[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
HEARINGS TO REVIEW USDA ORGANIZATION AND PROGRAM ADMINISTRATION
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HEARINGS
BEFORE THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 15, 16, 2015
__________
Serial No. 114-26
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
______
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96-269 PDF WASHINGTON : 2016
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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
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi
______
Scott C. Graves, Staff Director
Robert L. Larew, Minority Staff Director
(ii)
C O N T E N T S
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Page
Tuesday, September 15, 2015
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 1
Prepared statement........................................... 2
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, opening statement................................... 3
Witnesses
Taylor, Alexis, Deputy Under Secretary, Farm and Foreign
Agricultural Services; accompanied by Val Dolcini, J.D.,
Administrator, Farm Service Agency; Philip C. Karsting,
Administrator, Foreign Agricultural Service; and Brandon
Willis, Administrator, Risk Management Agency, U.S. Department
of Agriculture, Washington, D.C................................ 4
Prepared statement........................................... 6
Submitted questions:
Taylor, Alexis........................................... 87
Karsting, Philip C....................................... 87
Willis, Brandon.......................................... 90
Bonnie, Hon. Robert, Under Secretary, Natural Resources and
Environment, U.S. Department of Agriculture, Washington, D.C.;
accompanied by Jason Weller, Chief, Natural Resources
Conservation Service, USDA; and Mary Wagner, Associate Chief,
U.S. Forest Service, USDA...................................... 37
Prepared statement........................................... 39
Woteki, Ph.D., Hon. Catherine, Under Secretary, Research,
Education, and Economics, U.S. Department of Agriculture,
Washington, D.C.; accompanied by Chavonda Jacobs-Young, Ph.D.,
Administrator, Agricultural Research Service, USDA; Sonny
Ramaswamy, Ph.D., Director, National Institute of Food and
Agriculture, USDA; Mary Bohman, Ph.D., Administrator, Economic
Research Service, USDA; and Renee Picanso, Associate
Administrator, National Agricultural Statistics Service, USDA.. 65
Prepared statement........................................... 67
Submitted questions:
Ramaswamy, Ph.D., Sonny.................................. 91
Picanso, Renee........................................... 91
Wednesday, September 16, 2015
Conaway, Hon. K. Michael, a Representative in Congress from
Texas, opening statement....................................... 93
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, opening statement................................... 106
Witnesses
Mensah, Hon. Lisa, Under Secretary, Rural Development, U.S.
Department of Agriculture, Washington, D.C.; accompanied by
Brandon McBride, Administrator, Rural Utilities Service, USDA;
Tony Hernandez, Administrator, Rural Housing Service, USDA; and
Samuel H. Rikkers, Acting Administrator, Rural Business--
Cooperative Service, USDA...................................... 94
Prepared statement........................................... 96
Submitted question........................................... 195
Avalos, Hon. Edward M., Under Secretary, Marketing and Regulatory
Programs, U.S. Department of Agriculture, Washington, D.C.*;
accompanied by Anne L. Alonzo, J.D., Administrator,
Agricultural Marketing Service, USDA; Kevin Shea,
Administrator, Animal and Plant Health Inspection Service,
USDA; and Larry Mitchell, Administrator, Grain Inspection
Packers and Stockyards Administration, USDA.................... 133
Prepared statement........................................... 136
Submitted questions:
Avalos, Hon. Edward M.................................... 195
Alonzo, J.D., Anne L..................................... 195
Shea, Kevin.............................................. 196
Almanza, Alfred V., Deputy Under Secretary, Food Safety, U.S.
Department of Agriculture, Washington, D.C..................... 142
Prepared statement........................................... 144
Submitted question........................................... 197
Concannon, Hon. Kevin, Under Secretary, Food, Nutrition, and
Consumer Services, U.S. Department of Agriculture, Washington,
D.C.; accompanied by Audrey Rowe, Administrator, Food and
Nutrition Service, USDA; and Angela Tagtow, M.S., R.D., L.D.,
Executive Director, Center for Nutrition Policy and Promotion,
USDA........................................................... 168
Prepared statement........................................... 170
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* Editor's note: the Administrators listed as accompanying Mr.
Avalos are also accompanying Mr. Almanza. To avoid duplication they are
not printed here.
HEARING TO REVIEW USDA ORGANIZATION AND PROGRAM ADMINISTRATION
(PART 1)
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TUESDAY, SEPTEMBER 15, 2015
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 1:30 p.m., in Room
1300, Longworth House Office Building, Hon. K. Michael Conaway
[Chairman of the Committee] presiding.
Members present: Representatives Conaway, Thompson, Gibbs,
Austin Scott of Georgia, Crawford, Gibson, Benishek, Yoho,
Allen, Rouzer, Abraham, Moolenaar, Peterson, McGovern,
Plaskett, Adams, and Ashford.
Staff present: Ashley Callen, Bart Fischer, Caleb
Crosswhite, Callie McAdams, Chris Heggem, Haley Graves, Jackie
Barber, Jessica Carter, John Goldberg, Josh Maxwell, Mary
Nowak, Mollie Wilken, Paul Balzano, Patricia Straughn, Scott C.
Graves, Skylar Sowder, Faisal Siddiqui, John Konya, Andy Baker,
Anne Simmons, Evan Jurkovich, Keith Jones, Liz Friedlander,
Mary Knigge, Mike Stranz, Nicole Scott, and Carly Reedholm.
OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE
IN CONGRESS FROM TEXAS
The Chairman. Part 1 of the hearing of the Committee on
Agriculture, to review USDA organization and program
administration, will come to order.
I have asked Randy Neugebauer to open us with a quick
prayer. Ready?
Mr. Neugebauer. Father, we just come to You to praise You
and thank You for the privilege You have given us to live in
this great country. Father, help us to be good stewards of this
country. You have blessed it in the past, and we pray that You
continue to bless it in the future.
I will just pray now that You would be with us as we have
these discussions about how to make a better life for all of
our country and, in many cases, things that impact the world.
We ask this and all these things in the precious name of Your
Son, Jesus. Amen.
The Chairman. Thank you, Randy.
The Committee will come to order. I appreciate our first
panel of witnesses being here this morning. Since the Committee
organized in January 21 of this year, we have had 24 meetings.
We are keeping the commitment to hold a top-to-bottom review of
a full range of issues and policies within our jurisdiction. We
have held three executive briefings on trade, conducted 33
hearings, and stemming from what we have learned in those
hearings, we have had eight business meetings with the purpose
of advancing legislation.
I am very pleased with the Committee and the full House
that we have successfully discharged all the legislation that
required action, including addressing every program in our
jurisdiction with an expired authorization.
I am very proud of the work that each Member of the
Committee has done to make this happen. I am particularly
pleased that we work together in such a strong bipartisan
manner. Today and tomorrow, we will have before us most of the
Under Secretaries of the Department of Agriculture. Each of
these witnesses are responsible for an important mission within
USDA. And accompanying our witnesses are Administrators, who
actually do the hard work--the deputies get all the credit--of
managing these agencies and programs within the larger mission
areas.
These folks make up a network of nearly 100,000 USDA
employees who carry out the laws that this Committee works to
enact. We welcome each of you here today. I know that preparing
for these hearings was time-consuming for our witnesses who
already have plenty on their plate, so we are pleased that you
would commit time and effort to bring your knowledge to us to
help us, and your efforts and attendance will not go unnoticed.
We appreciate the work you do.
The primary purpose behind these hearings is to connect the
Members of the Committee with the full bench at USDA. As our
witnesses are aware, each Member of this Committee serves on a
number of Subcommittees that cover issues of special interest
to that Member. These interests, of course, line up with the
mission areas and agencies administered by our witnesses.
In short, this is a good opportunity for constructive
dialogue between the Members of the Committee and the
Department. It is an opportunity for our Members to gain an
even stronger understanding of the policies and issues they
focus on by getting under the hood, so to speak, to see how
this smooth running machine operates.
It is also an opportunity for our witnesses to gain a
better understanding of our responsibilities and the issues and
policies that we care about. In a sense, it is about team
building. Whatever our political stripes may be, we have shared
responsibilities.
And insofar as possible, we ought to carry out these
possibilities cooperatively and amicably. I think this goal is
achieved more effectively when the members of each team know
each other and respect each other. So while our work is always
ongoing, I hope these 2 days together will allow us to learn
how we might work better together more closely and more
cooperatively for the good of the order.
[The prepared statement of Mr. Conaway follows:]
Prepared Statement of Hon. K. Michael Conaway, a Representative in
Congress from Texas
This hearing will come to order.
Since this Committee formally organized on January 21 of this year,
the Committee has met 44 times.
In keeping with my commitment to hold a top-to-bottom review of a
full range of issues and policies within our jurisdiction, we have held
three executive briefings on trade and conducted 33 hearings. And,
stemming from what we have learned in these hearings, we have held
eight business meetings with the purpose of advancing legislation. I am
very pleased that this Committee and the full House has faithfully
discharged all of the legislation that required action, including
addressing every program in our jurisdiction with an expired
authorization.
I am very proud of the work that each Member of this Committee has
done to make this happen. I am particularly pleased that we have worked
together in such a strong, bipartisan manner.
Today and tomorrow, we have before us most of the Under Secretaries
of the Department of Agriculture. Each of these witnesses is
responsible for an important mission area within USDA. Accompanying our
witnesses are Administrators who manage agencies and programs within
these larger mission areas.
These folks make up the network of nearly 100,000 USDA employees
who carry out the laws that this Committee works to enact.
We welcome each of you here today. I know that preparing for these
hearings can be time consuming for witnesses who already have plenty on
their plate. So, please know that your commitment of time and knowledge
does not go unnoticed or unappreciated. We do appreciate you and the
work that you do.
The primary purpose behind these hearings is to connect the Members
of this Committee with the full bench at USDA.
As our witnesses are aware, each Member of this Committee serves on
a number of Subcommittees that cover issues of special interest to that
Member. These interests, of course, line up with the mission areas and
agencies administered by our witnesses.
In short, this is a good opportunity for constructive dialogue
between Members of this Committee and the Department. It is an
opportunity for our Members to gain an even stronger understanding of
the policies and issues they focus on by getting under the hood to see
how all, or at least more, of the parts work. It is also an opportunity
for our witnesses to gain a better understanding of our
responsibilities and the issues and policies we care about.
In a sense, it is also about team-building. Whatever our political
stripes may be, we have shared responsibilities. And, insofar as it is
possible, we ought to carry out these responsibilities cooperatively
and amicably. I think this goal is achieved more effectively when the
members of a team come to know and respect one another.
So, while our work is always ongoing, I hope that these 2 days
together allow each of us to learn how we might work together more
closely and more cooperatively for the good of the order.
With that, I recognize my friend, the Ranking Member, for any
remarks he may wish to offer.
The Chairman. I recognize my good friend, the Ranking
Member, for any remarks he might have.
OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE
IN CONGRESS FROM MINNESOTA
Mr. Peterson. Thank you, Mr. Chairman.
And I thank the witnesses for being here.
USDA's work covers a lot of ground, and given the size and
scope of the Department, it is good that we understand the full
picture of the work being done in the various mission areas.
I look forward to hearing from our witnesses over the next
2 days. The 2014 Farm Bill created some new programs for the
Department to implement and administer, and I will be
interested in the status update on this process. I am also
hoping our witnesses can provide some guidance on the impact
the budget sequester will have on farm program payments and
what is being done to address other challenges in agriculture
such as the threat of the recurrence of avian flu and the
devastation caused by this summer's wildfires.
So we have a lot of testimony, so let's get to it, and
thank you, again, Mr. Chairman.
I yield back.
The Chairman. Thanks, Collin.
The chair would request that other Members submit their
opening statements for the record so our witnesses may begin
their testimony and to ensure there is ample time for
questions.
The chair would like to remind Members that they will be
recognized for questioning in order of seniority for the
Members who were here at the start of today's hearing. After
that, Members will be recognized in the order of arrival, and I
appreciate Members' understanding.
The witnesses are reminded to limit their oral
presentations to 5 minutes. All written statements will be
included in the record. And over the course of today's hearing,
following the testimony of the Under Secretaries, the other
Administrators will be here to answer questions.
And, with that, I would like to welcome our first panel. We
have Ms. Alexis Taylor, Deputy Under Secretary for Farm and
Foreign Agricultural Services, USDA. Ms. Taylor is accompanied
by Val Dolcini, Administrator of the Farm Service Agency; Phil
Karsting, the Administrator of the Foreign Agricultural
Service; and Mr. Brandon Willis, Administrator, Risk Management
Agency.
So, gentlemen, ladies, thank you for being here.
Ms. Taylor, you may begin at your pleasure.
STATEMENT OF ALEXIS TAYLOR, DEPUTY UNDER SECRETARY, FARM AND
FOREIGN AGRICULTURAL SERVICES, U.S.
DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.;
ACCOMPANIED BY VAL DOLCINI, J.D., ADMINISTRATOR, FARM SERVICE
AGENCY, USDA; PHILIP C. KARSTING,
ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE, USDA; AND BRANDON
WILLIS, ADMINISTRATOR, RISK
MANAGEMENT AGENCY, USDA
Ms. Taylor. Chairman Conaway, Ranking Member Peterson, and
Members of the Committee, I am pleased to be here today to
provide information on the programs and accomplishments of the
Farm and Foreign Agricultural Services at the U.S. Department
of Agriculture.
First, let me extend Under Secretary Scuse's apologies for
not being able to join you here today and our appreciation for
allowing me to testify in his place. Having started my career
over a decade ago working for a Subcommittee Chairman on this
very Committee, all I can say is it feels good to come home.
FFAS helps keep American farmers and ranchers in business
as they face uncertainties from weather and markets. We deliver
commodity, credit, conservation, disaster, emergency, and
export assistance programs that improve the stability and
strength of the rural economy.
Accompanying me today, as the Chairman said, is
Administrator Val Dolcini of the Farm Service Agency;
Administrator Brandon Willis of the Risk Management Agency; and
Administrator Phil Karsting of the Foreign Agricultural
Service.
Mr. Chairman, over the past 2 years, much of our work has
been focused on implementing the 2014 Farm Bill, work we are
truly proud of at the Department. The farm bill introduced two
new farm safety net programs for program crop producers through
FSA: The Agricultural Risk Coverage Program, or ARC; the Price
Loss Coverage Program, or PLC. As a result of our aggressive
producer outreach efforts, over 1.7 million producers elected
to participate in these new programs.
FSA implemented the new Margin Protection Program for dairy
last fall, and over 23,000 producers, over \1/2\ of all the
U.S. dairy operations, enrolled for calendar year 2015
coverage. FSA provides a broad range of additional services for
American agriculture from disaster assistance to marketing
assistance loans to conservation programs. FSA also invests in
opportunities in rural communities, providing a variety of loan
programs to farm families who are temporarily unable to obtain
the credit they need.
RMA has also been very successful in implementing the farm
bill's crop insurance provisions. RMA released the actual
production history yield exclusion option for 11 crops for the
2015 crop year, and expansion has already been announced for
the 2016 crop year.
APH yield exclusion as well as the Supplemental Coverage
Option are now available for all major crops and many fruits
and nuts. In addition, the Stacked Income Protection Plan for
producers of upland cotton, or STAX, is available for over 99
percent of cotton acreage. The beginning farmers and ranchers
incentives at FS--or excuse me, at RMA authorized in the farm
bill have already been utilized by over 13,500 beginning
farmers and ranchers, saving them over $13.5 million in
premiums and administrator fees. In addition, the farm bill
instructed RMA to develop a Whole Farm Revenue Protection plan,
which was available for the 2015 insurance year, and it will be
available for all counties in the U.S. for the 2016 insurance
year.
This is a first for the crop insurance program. The efforts
of the FAS, combined with our market promotion programs and in
collaboration with the agricultural community, have contributed
to the strongest 6 years in history for U.S. agricultural
exports. For many American products, foreign markets represent
more than \1/2\ of total sales. These U.S. agricultural
products support about one million jobs here at home.
Over numerous farm bills, Congress has refined our
agricultural market development programs, the largest of which
is the Market Access Program, which benefits a diverse range of
U.S. commodities. Also, the Market Development Program, like
MAP, involves work with our agricultural cooperator partners.
These programs are found to be highly effective. An independent
study found that they provide $35 in economic benefits for
every $1 spent by the government or industry.
FAS leads USDA's efforts to help developing countries
increase food security, improve their agricultural systems, and
build their trade capacity. For example, the McGovern-Dole
Program provides support to child nutrition projects. We are
quite proud that since the program was established in 2002, it
has benefited more than 30 million children in 38 countries.
FAS trade negotiators are advocating on behalf of U.S.
agriculture and the Trans-Pacific Partnership, or TPP, and the
Transatlantic Trade and Investment Partnership, or T-TIP. FAS
experts are a key part of our negotiating team.
TPP and T-TIP are opportunities not only to address market
access commitments but also non-tariff barriers that impede our
agricultural exports. Once these agreements are in place, the
United States will enjoy improved market access and increased
competitiveness to \2/3\ of the global economy. I am proud to
have the opportunity to work with such outstanding individuals
in the FFAS mission area every day, individuals who I have seen
work tirelessly over the past 2 years for the betterment of
farmers and ranchers in rural communities.
Thank you for the opportunity to be here today, and we look
forward to any questions you may have.
[The prepared statement of Ms. Taylor follows:]
Prepared Statement of Alexis Taylor, Deputy Under Secretary, Farm and
Foreign Agricultural Services, U.S. Department of Agriculture,
Washington, D.C.
Mr. Chairman and Members of the Committee, I appreciate this
opportunity to provide information on the programs and accomplishments
of the Farm and Foreign Agricultural Services (FFAS) mission area of
the U.S. Department of Agriculture. The FFAS mission area is composed
of the Farm Service Agency, the Risk Management Agency, and the Foreign
Agricultural Service. Much of our work in the past 2 years has focused
on implementing the Agricultural Act of 2014 (the 2014 Farm Bill) in
record time, providing safety net assistance to producers in every
state within just a few months of bill passage.
The Farm Service Agency (FSA)
FSA programs encompass five of the twelve Titles of the 2014 Farm
Bill, including Title I--Commodities, Title II--Conservation, Title V--
Credit, Title VIII--Energy, and Title XII--Miscellaneous. The 2014 Farm
Bill made significant changes to FSA's commodity safety net programs,
as well as many other key agency programs.
Commodity Programs
The 2008 Farm Bill's Direct and Counter-Cyclical Program (DCP) and
the Average Crop Revenue Election (ACRE) program were repealed and
replaced by two new programs: Agricultural Risk Coverage (ARC) and
Price Loss Coverage (PLC). FSA has completed the ARC/PLC ``election''
process, 1.7 million producers made an election--exceeding the number
of producers who participated in DCP/ACRE. The ``election'' period was
open to producers from November 17, 2014, through April 7, 2015, when
they had the opportunity to make a one-time election of ARC or PLC for
their 2014-2018 crops. During this period, base acres could be re-
allocated (although not increased) and program payment yields could be
updated. We are currently in the ``enrollment'' phase, which ends on
September 30, 2015, where producers are signing contracts associated
with their 2014 and 2015 crops.
The first ARC/PLC payments--for the 2014 crop year--will be made in
October 2015, shortly after marketing year average price data starts
becoming available, and will continue through the fall as price data
for additional commodities is published. Given the significant drop in
commodity prices since passage of the farm bill, our current projection
is that about $6.5 billion in 2014 crop payments will be made, largely
to corn producers who signed up for ARC.
Implementing the 2014 Farm Bill in record time required an ``all
hands on deck'' approach to reach producers, and close collaboration
between our university and extension partners and, of course, the hard
work of our dedicated FSA staff. We worked closely with our university
partners at Texas A&M, the Food and Agricultural Policy Research
Institute, the University of Illinois, and others, who developed on-
line web-based decision tools so that farmers could input their own
farm data and explore various scenarios associated with adopting ARC or
PLC, as well as the intersection of these programs with our crop
insurance offerings.
Further, FSA worked with extension specialists in virtually every
state on an extensive ARC/PLC education and outreach effort. Over
400,000 attendees participated in approximately 5,000 local ARC/PLC
events that provided producers with valuable information on how to best
manage risk on their farms. The ARC/PLC web tools were demonstrated at
over 2,500 of these events and the tool developers hosted help desk
``hotlines'' for producers who needed additional help. In addition to
collaboration with our university and extension partners, we worked
closely with our media partners who produced over 1,000 news stories on
ARC/PLC.
Under the 2014 Farm Bill, upland cotton is no longer a covered
commodity and is not eligible to participate in ARC or PLC, but rather,
is eligible for the new Stacked Income Protection Plan (STAX) offered
by the Risk Management Agency. For counties where STAX was unavailable,
upland cotton was eligible for the Cotton Transition Assistance
Payments program (CTAP) for 2014 and 2015 crops. FSA paid about $540
million to over 184,000 farms for 2014 CTAP payments; 2015 CTAP
payments dropped off dramatically because STAX was available for over
98 percent of cotton acres.
FSA has implemented the new Margin Protection Program for Dairy
(MPP-Dairy) and over 23,000 producers--over \1/2\ of all U.S. dairy
operations--enrolled for calendar year 2015 coverage. We are now
focused on 2016 calendar year enrollment, which closes on September 30,
2015, and FSA has an intensive mailing effort underway, just like last
year, to encourage as much participation as possible. The new MPP-Dairy
offers dairy producers catastrophic coverage to participating producers
when the national dairy production margin is less than $4 per
hundredweight (cwt), at no cost to the producer after an annual $100
administrative fee. Producers may also purchase higher coverage, for a
premium, that provides payments when margins are between $4 and $8 per
cwt. So far in 2015, producers who enrolled at the $8 coverage level
received modest payments during three payment periods.
Disaster Assistance Programs
Immediately after the 2014 Farm Bill passage, FSA focused on
implementing the livestock and tree disaster assistance programs--
including the Livestock Forage Disaster Program (LFP); the Livestock
Indemnity Program (LIP); the Emergency Assistance for Livestock, Honey
Bees, and Farm-Raised Fish (ELAP); and the Tree Assistance Program
(TAP). These programs, which had been expired for nearly 3 years, were
resumed within 60 days following enactment of the 2014 Farm Bill. This
assistance benefited a diverse array of producers who were hit hard by
natural disasters, ranging from winter storms, to wildfire, to drought.
So far, FSA has issued approximately 700,000 payments to producers
since the spring of 2014, totaling over $5.6 billion. The LFP accounted
for the bulk of these payments. Through its Livestock Forage Program,
USDA projects it will provide at least $2 billion in assistance to
livestock producers in Fiscal Year 2015.
The Noninsured Crop Disaster Assistance Program (NAP) was expanded
in the 2014 Farm Bill to include protection at higher coverage levels,
similar to provisions offered under the Federal crop insurance program.
NAP continues to offer coverage at the catastrophic level based on 50
percent of expected production at 55 percent of the average market
price for the crop. However, producers can now obtain additional
coverage levels ranging from 50 to 65 percent of expected production,
in five percent increments, at 100 percent of the average market price
for the 2014-18 crops years. Beginning, limited resource, and other
traditionally under-served farmers are now eligible for a waiver of the
NAP service fee and a 50 percent reduction in premium for additional
levels of coverage. The majority of 2015 NAP-eligible spring-seeded
crops had an application closing date of March 15, 2015; additional
crop application closing dates occur through the upcoming fall months
as well.
In addition to the ARC/PLC web tools noted earlier, the University
of Illinois and their partners developed decision tools for both MPP-
Dairy and NAP. These tools help producers make decisions about the
optimal level of coverage for their operations, and have been widely
accessed by producers. Further, approximately 14,000 producers have
participated in MPP-Dairy educational meetings and about 17,000
producers have participated in NAP educational meetings.
Conservation Reserve Program
The Conservation Reserve Program (CRP), one of USDA's largest
conservation programs, allows USDA to contract with landowners so that
environmentally sensitive land is not farmed or ranched, but instead
used for conservation benefits. For 30 years, CRP has helped
participants establish long-term, resource-conserving cover. In return,
FSA provides participants with annual rental payments, incentive
payments, and cost-share assistance. Contract duration is between 10
and 15 years. CRP improves water quality, reduces soil erosion, and
restores habitat for ducks, pheasants, turkey, quail, deer and other
wildlife. In doing so, CRP spurs hunting, fishing, recreation, tourism,
and other economic development across rural America.
Currently, 24.2 million acres are enrolled in CRP contracts,
including 18.1 million acres under general sign-up enrollment authority
and 6.1 million acres under continuous sign-up enrollment authority.
CRP general sign-up is a competitive process conducted on a periodic
basis, while CRP continuous sign-up occurs on an on-going basis
throughout the year and does not involve a discrete sign-up period and
is non-competitive. CRP contracts on 1.8 million acres (combined
general and continuous) are set to expire on September 30, 2015;
program payments total approximately $1.8 billion annually.
Earlier this year, the Secretary announced that the next CRP
general signup offer period will begin on December 1, 2015, and that
continuous sign-up for the new grassland component will begin on
September 1, 2015. We will enroll sufficient CRP acreage to meet as
closely as possible, but not exceed, the 24 million acre enrollment cap
set in the 2014 Farm Bill, which is to be reached by Fiscal Year 2017.
General sign-up program participants with contracts expiring September
30, 2015, and less than 15 years in duration, have the option of a 1
year extension. Those with continuous sign-up contracts are eligible to
re-enroll in CRP.
We are proud of the impact that CRP has had on the rural landscape.
Since its inception, we estimate that CRP has prevented more than 8
billion tons of soil from eroding and reduced nitrogen and phosphorous
runoff by 95 percent and 85 percent, respectively, on enrolled lands.
In addition, CRP has sequestered an estimated average of 50 million
tons of greenhouse gases annually since 2008, which is equal to taking
eight million cars off the road each year.
Farm Loan Programs
Most farm loan programs are permanently authorized through the
Consolidated Farm and Rural Development Act. However, the 2014 Farm
Bill made several program changes, such as providing more favorable
interest rates for joint financing arrangements, providing a larger
percent guarantee on guaranteed conservation loans, increasing the loan
limits for the down payment loan program, making youth loans available
in urban areas, and eliminating term limits for guaranteed operating
loans. All of these changes were implemented in the spring of 2014.
Since then, FSA has implemented additional loan program changes
authorized in the 2014 Farm Bill, such as increasing the maximum amount
for direct farm ownership loans from $225,000 to $300,000, and
eliminating the rural residency requirement for youth loans. FSA raised
the borrowing limit of its popular microloan program from $35,000 to
$50,000; updated the ``farming experience'' loan eligibility
requirement to include military leadership positions, advanced
agricultural education, or other non-farm management experience; and
FSA is in the process of implementing a relending program to help
Native American producers purchase fractionated interests of land.
Farm loan programs through FSA constitute the Department's largest
investment in beginning farmers. Since 2009, FSA has provided over $13
billion in direct and guaranteed loans to beginning farmers. Beginning
farmer loans now comprise over 55 percent of the Agency's direct loan
portfolio, and the portfolio continues to grow. At the same time, loans
to beginning farmers continue to perform well, with delinquencies below
the portfolio average.
FSA's work on microloans--of which 70 percent has gone to beginning
farmers--was initiated prior to farm bill passage and has been a
resounding success, due in part to the streamlined paperwork required
of applicants. Microloan financing focuses on the farm operating needs
of a wide variety of operations, most notably small, beginning, niche,
and non-traditional farm operations, such as farms participating in
direct marketing and farmers' markets. The microloan debt limit is
$50,000 per borrower. Demand is up 58 percent over last year, and soon
we will make our 15,000th microloan, just 2\1/2\ years after program
initiation. Fifty-five percent of microloans go to first-time FSA
customers.
FSA also provides low-interest financing through our Farm Storage
Facility Loan program, which helps producers build or upgrade storage
and handling facilities, and it was announced in mid-August that we
will now include dairy, flowers and meats as eligible commodities.
Since 2000, more than 35,000 loans have been approved totaling $2
billion in rural investments. On average, about 1,600 new loans are
made each year.
Energy Programs
Supporting the biobased economy is also a focus of FSA. U.S.
farmers are producing record amounts of feedstocks for renewable fuels,
although lower commodity prices have created uncertain times. FSA
announced this June the availability of up to $100 million in grants
under the Biofuels Infrastructure Partnership to support the renewable
fuel infrastructure and build the market for ethanol. USDA announced
finalists for awards on September 10, 2015; additional details will be
announced later in the month. Interest in this program was very high
and funding requests well exceeded the $100 million limit, with only a
1 month application period.
In addition, FSA announced that enrollment began for farmers and
forest owners seeking assistance for growing biomass for energy or
biobased products within designated projects areas under the Biomass
Crop Assistance Program (BCAP), which was reauthorized by the 2014 Farm
Bill. Biomass energy facilities or groups of producers may submit
proposals for new BCAP project areas through November 6, 2015. In
addition, FSA will allocate $7.7 million to four existing BCAP project
areas in New York, North Carolina, Ohio/Pennsylvania and Kansas/
Oklahoma for biomass establishment and maintenance payments through
Sept. 25, 2015. Overall, BCAP has provided incentives for producers
across more than 48,000 acres in 71 counties and 11 different project
areas since the program was first authorized by the 2008 Farm Bill.
The Risk Management Agency (RMA)
RMA provides crop insurance to America's farmers and ranchers
through a partnership with private insurance companies. In the year and
a half since the passage of the 2014 Farm Bill, RMA has implemented
almost all of Title XI (crop insurance provisions). From implementing
the Actual Production History (APH) Yield Exclusion to offering a Whole
Farm Revenue Protection insurance product that will be available in
every county in the United States, I am proud of the accomplishments
RMA has achieved over the past 18 months. While there is still work to
be completed, farmers and ranchers have begun to take advantage of the
new crop insurance options.
The Supplemental Coverage Option and STAX
The Supplemental Coverage Option (SCO) and Stacked Income
Protection Plan for Upland Cotton (STAX) were made available for the
2015 crop year. SCO was available for corn, cotton, cottonseed, grain
sorghum, rice, soybeans, spring barley, spring wheat, and winter wheat
in selected counties for the 2015 crop year--representing over 80
percent of the program acres covered in the Federal Crop Insurance
Program. RMA has continued expansion of SCO for the 2016 crop year with
expansion to many fruit and nuts. RMA continues to research additional
crops for suitability under SCO and will make additional announcements
as the data becomes available.
STAX is currently available in every county that had an existing
crop insurance policy for cotton, representing over 99 percent of
cotton acres in the United States. STAX is expected to be available for
the remaining ``traditional'' cotton producing areas for the 2016 crop
year.
Additional New 2014 and 2015 Offerings
RMA was able to develop and release the APH Yield Exclusion option
for 11 crops for the 2015 crop year. As a result, nearly \3/4\ of all
program acres and liability in the Federal Crop Insurance Program was
covered under this new option for the 2015 crop year. RMA has already
announced expansion of APH Yield Exclusion for the 2016 crop year for
many crops, including winter wheat. RMA continues to research
additional crops for suitability under APH Yield Exclusion and will
make additional announcements as the data becomes available.
A Peanut Revenue Policy was also made available for the 2015 crop
year. This policy was approved by the Federal Crop Insurance
Corporation Board of Directors less than a year after the 2014 Farm
Bill became law. As a result, peanut farmers now have the ability to
manage risk for both yield and revenue losses.
The beginning farmers and ranchers incentives authorized in the
2014 Farm Bill were made available to farmers and ranchers for fall
planted wheat in 2014. To date, over 13,500 new and beginning farmers
and ranchers have taken advantage of these incentives on almost 49,000
policies. Beginning farmers and ranchers have saved over $14 million in
premiums and administrative fees because of this provision.
The 2014 Farm Bill required RMA to offer a plan of insurance to
cover diversified farms. Prior to the passage of the 2014 Farm Bill,
RMA had already begun development of the Whole Farm Revenue Protection
(WFRP) pilot policy and the Federal Crop Insurance Corporation Board of
Directors approved the policy shortly after the 2014 Farm Bill was
enacted. As a result, WFRP was available for purchase for the 2015 crop
year. This option has been generally well received when presented to
specialty crop and organic growers around the country. After reviewing
comments from growers, RMA intends to make additional improvements to
WFRP for the 2016 crop year. In addition, WFRP will be available in
every county in the United States--a first for any policy under the
Federal crop insurance program.
RMA is also making progress in offering organic price elections for
all crops, as required by the 2014 Farm Bill. Since 2010, RMA has
eliminated the organic surcharge, added price elections for over 42
crops, and created the contract price addendum, which is available for
62 crops.
The 2014 Farm Bill linked the ability of a producer to receive a
Federal crop insurance premium subsidy to USDA highly erodible land
(HEL) and wetland conservation (WC) compliance. In an effort to ensure
that producers continue to receive the Federal crop insurance premium
subsidy, RMA worked with the Natural Resource Conservation Service
(NRCS) and FSA to develop comprehensive guidelines for farmers to
comply with USDA conservation requirements. The three agencies
collaborated to provide information to the respective field offices and
developed material for all three agencies to inform Federal crop
insurance customers of the new requirements. Successful outreach
efforts continued well into this summer, and 98 percent of producers
participating in the Federal crop insurance program have certified or
requested determinations to comply with HEL and WC requirements.
Each one of the aforementioned 2014 Farm Bill items was
completed by RMA within the past 18 months.
The Foreign Agricultural Service (FAS)
The Foreign Agricultural Service (FAS) is USDA's lead international
agency, linking U.S. agriculture to the world to enhance export
opportunities and global food security.
The efforts of FAS employees, both in Washington and around the
globe, combined with 2014 Farm Bill authorized market promotion
programs, and collaboration with the U.S. agricultural community, have
contributed to the strongest 6 years in history for U.S. agricultural
trade. From Fiscal Years 2009 to 2014, U.S. agricultural exports
totaled $771.7 billion. For many American products, foreign markets now
represent more than \1/2\ of total sales. U.S. agricultural exports
support about one million jobs here at home, a substantial part of the
11.7 million jobs supported by all exports across our country. Credit
for record exports belongs to America's hardworking farm and ranch
families.
FAS supports those producers through a network of agricultural
economists, marketing experts, negotiators, and trade specialists in
Washington, D.C. and 95 international offices covering 167 countries.
We are proud that our role in opening and maintaining markets has
resulted in billions of dollars of additional U.S. agricultural
exports. FAS also contributes to the Department's goal of enhancing
global food security. The food assistance programs, technical
assistance, and capacity building activities administered by FAS have
provided assistance that has helped millions of people worldwide.
Trade policy, trade promotion, and capacity building are the core
functions at the heart of the programs and services that FAS provides
to U.S. agriculture.
Trade Policy
FAS expands and maintains access to foreign markets for U.S.
agricultural products by removing trade barriers and enforcing U.S.
rights under existing trade agreements. Our personnel have been
instrumental in resolving numerous sanitary, phytosanitary, and
technical barriers to trade. FAS works with foreign governments,
international organizations, and the Office of the U.S. Trade
Representative (USTR) to establish international standards and rules to
improve accountability and predictability for agricultural trade.
FAS trade negotiators are currently advocating on behalf of U.S.
agriculture in two major negotiations: the Trans-Pacific Partnership
(TPP) and the Transatlantic Trade and Investment Partnership (T-TIP).
FAS experts are an integral part of the negotiating team and USDA's
economic analysis supports the negotiating strategy on agriculture. The
TPP and T-TIP are opportunities to address not only market access
commitments, but also non-tariff Sanitary and Phytosanitary (SPS) and
Technical Barriers to Trade (TBT) issues that impede our agricultural
exports. Once these agreements are in place, the United States will
enjoy improved access to markets representing \2/3\ of the global
economy.
Trade Promotion
Over numerous farm bills, Congress has authorized and refined an
effective combination of agricultural market development and export
credit guarantee programs. These programs that are designed to develop
markets, facilitate financing of overseas sales, and resolve market
access barriers dovetail with the FAS mission. We must open, expand,
and maintain access to foreign markets, where 95 percent of the world's
consumers live. FAS partners with 75 cooperator groups representing a
cross-section of the U.S. food and agricultural industry and manages a
toolkit of market development programs to help U.S. exporters develop
and maintain markets for hundreds of products.
The largest market development program operated by FAS is the
Market Access Program (MAP). MAP is a cost-share program that uses
funds from USDA's Commodity Credit Corporation (CCC) to aid in the
creation, expansion, and maintenance of foreign markets for hundreds of
U.S. agricultural products. Through MAP, FAS partners with nonprofit
U.S. agricultural trade organizations, U.S. agricultural cooperatives,
nonprofit State Regional Trade Groups, and small-sized U.S. commercial
entities to share the costs of overseas marketing and promotional
activities, such as consumer promotions, market research, and trade
show participation. A range of U.S. commodities from Texas beef and
cotton, to Minnesota pork and soybeans, to California grapes and tree
nuts, and apples and pears from the Pacific Northwest, all benefit from
MAP. The 2014 Farm Bill makes available $200 million of CCC funds
annually for MAP; that amount is matched with industry contributions.
The Foreign Market Development Program (FMD) is another market
development program reauthorized by Congress in the 2014 Farm Bill. FMD
is a cost-share program that aids in the creation, expansion, and
maintenance of long-term export markets for U.S. agricultural products.
The 2014 Farm Bill makes available $34.5 million of CCC funds annually
for FMD. The program fosters a market development partnership between
USDA and U.S. agricultural producers and processors who are represented
by nonprofit commodity or trade associations known as Cooperators.
Under this partnership, USDA and each Cooperator pool their technical
and financial resources to conduct overseas market development
activities. FMD-funded projects generally address long-term
opportunities to reduce foreign import constraints or expand export
growth opportunities. For example, FMD supported projects might include
efforts to reduce infrastructural or historical market impediments,
improve processing capabilities, modify codes and standards, or
identify new markets or new uses for the agricultural commodity or
product. FAS has allocated funds to 22 trade organizations that
represent U.S. agricultural producers in FY 2015. The organizations on
average contribute nearly triple the amount they receive in Federal
resources.
Working with our agricultural cooperator partners, the programs
have been shown to be highly effective. An independent study released
in 2010 found that the programs provide $35 in economic benefits for
every dollar spent by government and industry on market development.
Building Capacity and Food Security
FAS leads USDA's efforts to help developing countries increase food
security, improve their agricultural systems, and build their trade
capacity. FAS's non-emergency food aid programs help meet recipients'
nutritional needs and also support agricultural development and
education.
The McGovern-Dole International Food for Education and Child
Nutrition Program (McGovern-Dole) provides agricultural commodities and
technical assistance for school feeding and maternal and child
nutrition projects in low-income, food-deficit countries committed to
universal education. In August, USDA announced funding for seven school
feeding projects to be supported by the McGovern-Dole in Fiscal Year
2015 that will benefit more than 2.5 million children in Africa and
Central America. For FY 2015, FAS is donating U.S.-produced corn, corn-
soy blend, lentils, green and yellow split peas, fortified rice,
vegetable oil and pinto beans. The seven new McGovern-Dole projects are
in addition to 28 projects ongoing in 21 countries. For FY 2016, USDA
is requesting McGovern-Dole funding be maintained at $191.6 million.
Since the program was established in 2002, it has benefited more than
30 million children in 38 countries.
Sustainability is an important aspect of McGovern-Dole. FAS and its
partner organizations work to ensure that the communities served by the
program can ultimately continue the sponsored activities on their own
or with support from other sources such as the host government or local
community. For example, the Government of Bangladesh has increasingly
taken over responsibility for McGovern-Dole school feeding projects,
pledging from 2015 onward to spend $49 million annually. By 2017, the
Government of Bangladesh will manage school feeding in 50 percent of
the schools currently receiving food under McGovern-Dole.
Since Congress established the Food for Progress (FFPr) program in
1985, it has been a cornerstone of USDA's efforts to support
sustainable agricultural production in developing nations that are
committed to free enterprise in the agriculture sector. Under FFPr,
proceeds from the sale of donated U.S. agricultural commodities are
used to fund projects that improve agricultural market systems and
trade capacity. The 2016 Budget request includes an estimated program
level of $135 million for this CCC-funded program. This year, FAS will
donate more than 200,000 metric tons of U.S.-produced corn, rice,
soybean meal and vegetable oil. The proceeds will assist six
organizations that will work with local farmers, cooperatives,
exporters and others on projects to improve agricultural production,
food processing, food safety and quality, and marketing and
distribution. The six new FFPr projects being supported by FAS in
Fiscal Year 2015 are in addition to 66 projects ongoing in 26
countries.
For example, at the request of the Government of Jordan, USDA
announced in May a FFPr agreement to provide 100,000 MT of U.S. wheat,
valued at approximately $25 million. The Jordanian Government will use
proceeds from the sale of the wheat to improve the country's
agricultural productivity, specifically through water conservation
(over 20 percent of Jordanians are water insecure). As one of our most
steadfast partners in the Middle East, the Government of Jordan will be
able to access the expertise of USDA to improve its agricultural
productivity and therefore relieve some of the economic burden that it
is facing as a result of nearly 630,000 refugees from Syria living in
Jordan.
USDA looks forward to implementing the new Local and Regional
Purchase (LRP) program provided in the 2014 Farm Bill, based on the
success of the LRP Pilot implemented under the previous farm bill. The
Department's FY 2016 budget request includes $20 million to support the
LRP program. LRP would provide for local and regional procurement of
food aid commodities to complement existing food aid programs--
especially McGovern-Dole--and unexpected emergencies. In a non-
emergency situation, an LRP pilot implementing partner, Land O' Lakes,
worked with local processors in Bangladesh who made cereal bars from
chickpeas, peanuts, rice, and sesame seeds to supplement a school
feeding program. Today, local processors have commercialized the cereal
bar and are reportedly now sourcing from 15,000 farmers in Bangladesh,
instead of importing ingredients. Requested funding is expected to
support three to four development programs.
I am very pleased with the outstanding 2014 Farm Bill
implementation work performed by all FFAS mission area employees. This
concludes my testimony. I will be happy to answer any questions you may
have.
The Chairman. Ms. Taylor, thank you for your opening
remarks.
And gentlemen, thank you for being here.
Let me start with Mr. Willis.
Brandon, can you talk to us a little bit about the--our
Congressional intent, when we set up the enterprise unit system
that had irrigated versus non-irrigated, our intent was to
allow farmers to mix and match on this. I think the RMA has
taken a little stricter definition.
Is there an opportunity to have RMA reevaluate this idea
about forcing all irrigated into one unit, all non-irrigated
into another, and not allowing producers to come up closer to
what we, at least in our minds, thought we were setting up for
them to do?
Mr. Willis. Certainly. I appreciate the question, Mr.
Chairman. The farm bill provided a significant amount of new
options for farmers in the crop insurance title, new programs,
and overwhelmingly, farmers have reacted positively to those.
The section you are talking about, separation of enterprise
unit by practice, we have not issued a final rule yet. We
issued the interim rule a little over a year ago.
Where we struggle with that is we don't see where the
authority is to provide anything more than the separation of
coverage by irrigated or non-irrigated, and we have looked at
the report language as well.
So I guess the short way of saying it is we struggle to see
where the authority comes from to go beyond where we are right
now. Having said that, the final rule has not been issued yet
either.
The Chairman. Well, thanks, Brandon. I hoped we would be
able to continue discussions because we have a little different
interpretation of that as well.
Ms. Taylor, you mention the current negotiations going on
with T-TIP and TPP. We are also a little concerned with the
Nairobi Round of Doha as an example where we think agriculture
is a big piece of that, and from Randy and my perspective, the
cotton guys have given at the office, so to speak, when you
look at what happens to them, in particular with the 2014 Farm
Bill. You mention STAX and others.
Can you talk to us a little bit about what you think the
instructions will be from y'alls perspective to the trade
negotiators with respect to the Nairobi talks?
Ms. Taylor. Certainly, Mr. Chairman.
Thank you for that question. USDA has been in active
conversations with our office in Geneva. FAS has employees at
the mission there, and we have been very active and in
conversations with Ambassador Punke, who heads the mission in
Geneva, and Ambassador Vetter, who heads the Ag Office here.
U.S. agriculture has really benefited from the WTO system
having a rules-based international trading system. It has
opened markets, and it has really helped contribute to last
year being a record year of agricultural exports of $150
billion. We have a strong interest in concluding Doha, the Doha
Development Round in Nairobi; however, we are not interested in
unilaterally making concessions, particularly on the side of
domestic support where a growing problem internationally is
really some of the increased support from emerging economies.
We continue to have conversations through--and we will in
the weeks and months to come, and we will certainly keep the
Committee apprised. I think it is a little too early to know
exactly how this will all come about in December.
However, I do think it is important to highlight that the
WTO hasn't been our only option, and that is why we have
aggressively pursued agreements like the Trans-Pacific
Partnership that really give our agricultural producers a lot
of new market opportunities around the world.
The Chairman. All right. Well, thank you, and obviously,
that is at the front of a lot of our producers' minds as they
watch those talks unfold.
Val, could you talk to us a little bit about the
interpretation on the AGI with respect to pass-through entities
and the impact that not allowing a section 179 deduction to
reduce the income there in terms of a separate application of
the payment limit rule? Can you visit with us about the impact
of that, and we are seeing it, a disproportionate impact of
what we intended to have. Can you walk us through that a little
bit?
Mr. Dolcini. I appreciate the opportunity to answer that
question, Mr. Chairman. We are taking it on a case-by-case
basis. We have seen it come up in the Midwest in some cases.
Most recently, I was made aware of a case in Iowa. We are
making sure that our experts here in Washington are in good
communication with the state office specialist. We haven't seen
it in huge numbers, frankly, but we are ready for it.
The AGI definition hasn't changed since 2002, but what we
are seeing, in the field, is with good farm income over the
last several years in some cases and a couple of years of
payments, folks are taking advantage of their appreciation
allowance a little bit more frequently than they had in the
past. And so we are working with CPAs, with tax attorneys, and
with other financial professionals that are working with our
producers to make sure that they understand exactly what it is
that we are doing, and to the degree we can offer greater
clarification around that, we are happy to do that.
The Chairman. Well, in specific, Val, the pass-through
entity, typically the section 179 deduction does not reduce its
individual income because those attributes pass through
separately. So if you don't have, let's say, for example,
$500,000 worth of immediate write-off under section 179, that
is going to have a pretty dramatic impact at the income level
of the entity itself. And so having you say that you are
willing to look at the intended result was that the income
would be actual income, AGI is, after all those deductions are
out, if you are an individual. So the things that you have is
that you are talking to two CPAs up here, but we just want to
make sure that those pass-through entities get a fair treatment
with respect to all the deductions; they don't somehow have an
artificial restriction on the payment limits because their
income appears to be bloated at that entity level.
Mr. Dolcini. We are certainly keeping an open door, Mr.
Chairman, in our state offices and here in Washington.
The Chairman. All right. Thank you.
I yield to the gentleman from Minnesota.
Mr. Peterson. Thank you, Mr. Chairman.
Mr. Dolcini, which FSA and RMA mandatory funded programs
will be impacted by sequestration, and how soon will we know
what level of cuts producers will be facing, or maybe Mr.
Willis.
Mr. Dolcini. Sure. I will take the first crack at that. All
of the programs that we administer, with exception of CRP and
Market Loan Gain Programs and the LDPs, will be affected by
sequestration. We don't feel, obviously, that sequestration is
a very good policy, and it doesn't offer much certainty to the
producers that we work with all over the country. And we are
working on a solution that we think will be an equitable one,
and hopefully, we will be able to resolve that in the next few
days, Mr. Peterson, but that is the universe of programs that
will be covered, all but those three that I mentioned.
Mr. Willis. The crop insurance program that producers deal
with every day is not impacted by sequestration. Other minor
programs would be, but what producers are used to as far as
crop insurance would not be.
Mr. Peterson. Mr. Willis, how do you decide whether to use
RMA data as opposed to NASS data in the implementation of title
I programs? As you may know, we recently had a situation in my
district where there was a concern about the NASS county data
being used for the ARC-PLC program.
Mr. Dolcini. Sir, I will take that question as it relates
to ARC and PLC. We use a cascading level of yield, so we start
with NASS county data. If that is not available, we turn to RMA
county data. If that is not available, we go to NASS district
data. And, finally, if that is not available, we use data that
the state committee develops.
We feel like the methodology used in the NASS county data
is pretty solid. We have looked at it around the country, and
we found that it is accurate, by and large, and where it is not
available, we turn to the next best data, but that is the
methodology that we use for the ARC county program.
Mr. Peterson. And where there are problems, there is no way
to fix this or to----
Mr. Dolcini. At this point, I don't believe that there is,
sir. We feel like the methodology that we are using is pretty
sound, this is, in some ways, the nature of a county-based
program, in this case, that there may be some disparities in
payments from one county to another, could be weather related,
could be related to other things. But we found that in most
cases, the NASS county data that we are using is pretty good.
Mr. Peterson. I understand that USDA has just announced
that we are going to allow milk handlers to deduct premium
payments from their milk checks for the Margin Protection
Program, and I am very glad to hear that. I have been
advocating that from the start. But what coordination have you
had with the cooperatives or other handlers to alert them to
this change, and given that the signup deadline is in 2 weeks,
do you think that that is enough time for them to incorporate
that into their system, especially for the larger cooperatives?
Mr. Dolcini. In most cases, the 2015 premium payments have
been made, so the change that we have envisioned here, and we
have worked a lot with cooperatives here in town and elsewhere,
will be effective for the 2016 program year, and the result of
that will be that 100 percent of the premium will be due on
September 1 of next year as opposed to this year, where we had
25 percent due on February 1, and the balance due later in the
summer.
So we think that this is a better option. We appreciate
your support for it, and we think that it will make the program
work a little bit more effectively in terms of getting premium
payments made through the cooperatives.
Mr. Peterson. These cooperatives are going to be on board
then and be able to do this?
Mr. Dolcini. That is my understanding, sir.
Mr. Peterson. The current signup deadline is September 30,
and I understand that at this point, only 30 percent of the
producers that have signed up last year have signed up again.
Is that true?
Mr. Dolcini. The numbers are still quite fluid, and of
course, in the last couple of weeks of any signup that we do,
we see greater participation in the final weeks. We anticipate
that that will be the case in this instance as well. We are
going the plan on doing another mass mailing. We sent out a big
postcard to generate signup for the first go-round of MPP, and
we will do that again.
We are also continuing to do local outreach in your home
state and other places around the country. When I traveled in
New England, we talked at lot about this as well, so we are
hopeful that we can get as much interest in the program for the
2016 year as we had in 2015.
Mr. Peterson. So if we only end up with 30 percent, are you
going to extend the deadline to try to----
Mr. Dolcini. We will look at that, sir, as we get a little
closer to the deadline. We are always mindful of the fact that
producers are busy with other things, and there are lots of
folks in the midst of harvest right now, and so we want to make
sure that we are offering everyone the opportunity to get into
the offices and sign up.
Mr. Peterson. Are they going to be aware of the fact that
they can have a month-to-month----
Mr. Dolcini. They certainly were----
Mr. Peterson.--premium taken out of their check?
Mr. Dolcini. We are going to make every effort to make sure
that everybody knows about that.
Mr. Peterson. Thank you.
Thank you, Mr. Chairman
The Chairman. I thank the gentleman.
Mr. Dolcini, just to clarify, did you give Mr. Peterson a
percentage that the sequester cuts might be for this coming
year? Have you all figured the percentage yet?
Mr. Dolcini. We have not figured out the precise
percentage, sir. For this year, it is 7.3 percent. For the
fiscal year to come, it is 6.8 percent.
The Chairman. Okay, 6.8 percent, thank you.
Mr. Neugebauer, 5 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman.
Mr. Dolcini, during the spring and the summer, we received
a number of complaints from producers that were trying to get
their financing through FSA, and in many cases, they were
telling them that it would take months in some cases to process
some of those applications. And that began to cause a problem
for a number of those producers because they have planting
deadlines, and so producers are worrying about planting
deadlines, and they are worrying about financing. I was just
wondering what do you see as to the current conditions? And
then, more importantly, with these commodity prices in some of
the areas so low--the farm income, and some commodities--it
doesn't look all that favorable, and so then I get to thinking
about next spring. Are we going to have the people in place to
give them more timely help for some of these producers to get
their financing?
Mr. Dolcini. Mr. Neugebauer, that is an excellent question,
and it is one that we spend a lot of time thinking about and
working on at the Farm Service Agency both here and in your
home State of Texas and, frankly, every other place where we
have FLP teams around the nation.
To address the issues that you raised earlier with me this
year in Texas and other parts of the country, we sent jump
teams in from other states that had a little more time on their
hands to the degree that folks do have time on their hands and
send them into Texas in 2 and 4 week details. We were able to
address a lot of the backlog issues down there in Texas, and we
were able to do that in Alabama as well.
In the year to come, though, I think that we are going to
have to continue to employ creative approaches to our workload
issues like that. We have also brought on a number of new farm
loan officer trainees around the country, and we are bringing
them up to speed as quickly as we can so that they are able to
jump in and help out wherever they are needed as well.
We have had record years, as you probably know, on the farm
loan program side at FSA over the last several years. In fact,
in Fiscal Year 2015, we made nearly 27,000 direct loans and
8,400 guaranteed loans for a total portfolio of about $5.2
billion. That breaks the record last year, and we are likely to
see continued interest in our programs in Fiscal Year 2016 as
well.
It is one thing, of course, to make those loans and it is
another to service those loans, and servicing takes longer. It
takes a greater degree of expertise, and so one of the things
that I am going to be focused on in Fiscal Year 2016 is
ensuring that our folks in the field today have the appropriate
training and background to service those loans appropriately,
and to the degree that I need to reallocate resources and bring
people in from different states to focus on servicing issues in
the Midwest or the Southeast or far West, I am going do that as
well
Mr. Neugebauer. I think it would be helpful if you
anticipate those areas where you think you are going to have
the higher participation rate and can get in there early for
some of those folks as well.
Something that you and I have discussed before is this
payment limit issue where we have producers that have cotton in
the loan program and their payment limits and not knowing
necessarily exactly where they are. I think you said you all
were working on that was the comment that you made last time.
How is the work going?
Mr. Dolcini. The work is going pretty well. I can't tell
you today that I have a permanent solution, but we have worked
closely with the Cotton Council to make sure that they have
realtime information about pricing issues so that folks don't
get caught in a bind and their members don't get surprised by a
piece of financial news that comes out.
We will hopefully have a permanent solution, sir, this
fall. I would be happy to come back up and visit with you
personally about what we are doing there.
Mr. Neugebauer. Now, I know that you are currently going to
be issuing the ARC and PLC payments, but as I understand it,
you may be holding up the final distribution of some of those
checks until you have done some of the work on determining
whether people are in compliance with the limits or how----
Mr. Dolcini. With regard to that specific question, sir, I
am going to have to get back to you with a better and more
definitive answer on that. I don't know that we have discussed
that at this point, but it could be emanating from the staff
level at the agency.
Mr. Neugebauer. Well, it is my understanding, just so to be
clear, is that you all are in the process of determining
whether they are in compliance with the loan limits----
Mr. Dolcini. That is true.
Mr. Neugebauer.--before you issue the checks, and the
question is: are you going to be able to do that in a timely
basis so that those checks can go out on a----
Mr. Dolcini. Yes, that is our intent, sir.
Mr. Neugebauer. Okay. Quick question. The generic acres, in
my district, we had some folks converting from one commodity
and another, and in some of those commodities, there is not a
lot of history on that, and there has been some concern making
differentiation between dryland and irrigated, and what do you
see doing to make sure we have good numbers?
Mr. Dolcini. We have had some good conversations in the
last couple of days at the staff level. Mr. Abraham raised this
question with me as well when I was last here, and we have come
up with a proposed solution for the 2014 and 2015 crop years
where producers on any farm may agree to allocate their generic
base according to the contractual agreement that exists, which
is, a better way to approach it.
For future years, we would likely want those producers to
reconstitute their farms according to established policy, but
in the near term, we see the need for some relief, and we are
happy to provide that.
The Chairman. The gentleman's time has expired. Thank you
all.
Mr. Ashford, for 5 minutes.
Mr. Ashford. I am fine.
The Chairman. Thank you.
Mr. McGovern, for 5 minutes.
Mr. McGovern. Thank you very much.
This is toward Administrator Karsting. I am a big fan of
the McGovern-Dole Program, which has been in operation now for
slightly over a decade, and I remember when it first began. It
just seems like yesterday. But the program has come a long way,
and one of the things that I have been really impressed with
USDA about is its ability to kind of adapt and adjust and to
constantly make the necessary changes to the program so that it
is the most effective that it could possibly be.
Now, I just would be curious if you could describe what you
think are the most important lessons that have been learned in
implementing the program, and what are you most proud of?
Mr. Karsting. Well, first of all, I am a big fan of the
program too, and what makes me proud is when I go to places
like Laos, as I did a few months ago, and I see kids whose
teeth and skin and hair are better because they have the
benefit of American nutrition support to their school nutrition
programs and they go to school ready to learn, and that is a
huge thing, especially in some really poor countries. As you
know, we focus in areas where childhood stunting is very much a
problem.
Part of the success of McGovern-Dole is the relationship
that we have cultivated with our cooperating organizations, the
nonprofits that we work with. They go in consultation with our
people at post. We have some really talented attaches all over
the world and make sort of an individual regionalized
assessment so they know what is going to work in one region
because what works in one region isn't necessarily going to
work in another.
The next evolution that we are trying to do, in McGovern-
Dole, focuses on some authority that this Committee was kind
enough to give us in the last farm bill, and that relates to
local and regional procurement. And when we find places where
the addition of a locally procured item to the mix might
increase kids' ability or increase their nutrition, increase
adoption of, or making permanent, school nutrition programs and
begin to sow the seeds of a value chain in country, I think
that is a really exciting thing to do.
And if I could, just one more thing. We also have done some
work on micro-nutrients, and that has had some measurable
effects, not just in nutrition that kids get but in their
cognitive abilities when they get to school
Mr. McGovern. Well, I appreciate that. Again, I appreciate
the innovation as well as the willingness to make the necessary
adjustments to make the program as effective as it possibly can
be.
I just wanted to say that one of the things that has been
very helpful has been with regard to Feed the Future, which
falls under the USAID, but they have had a very proactive
approach to try to remind Members what Feed the Future is all
about and how it is evolving and all the things they are
accomplishing, all the things it has accomplished.
I would like to suggest that it would be great to see a
similar effort on McGovern-Dole. Members would be very proud of
this program. I am not sure how many people are really aware of
all that it does, but if they were, the support would be even
greater if they knew about the program and how the combination
of U.S. commodities and purchased commodities, technical
assistance and cash grants combine to feed and educate millions
of some of the most vulnerable kids in the world, including a
lot of girls who otherwise would never go to school if it
wasn't for this program.
It is one of the great success stories in our foreign aid
programs, especially with regard to food assistance, and we
ought to do more of it. I visited a McGovern-Dole Program when
it initially happened in a displaced persons community in
Colombia. And a young mother came up to me and the Ambassador
and thanked us very much for this program because her son, who
was 11 years old, every day was trying to be recruited by one
of the armed actors, and in exchange, they promised the mother
they would feed the kid.
And now, with this program, the mother was able to put her
son in school, but we need to figure out a way to make more
people aware of it because that would translate to more
support.
Mr. Karsting. I appreciate that. We will take note of that.
I would also invite any Members, if you travel internationally,
if you have a moment, our staff overseas would love to show you
some of those programs, whether it is in Mozambique or Cambodia
or Laos or wherever, wherever we have them.
Mr. McGovern. And that is part of kind of the proactive
stance I am looking for so that when Members go on CODELs, they
know enough to know that there are these programs, these school
feeding programs for them to see because they would be very
impressed, but thank you for all the great work that you are
doing.
The Chairman. The gentleman yields back.
Mr. Austin Scott, for 5 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
Mr. Dolcini, the USDA arbitrarily dropped the posted county
price for peanuts by $170 a ton on August 18. This pushed the
price below the loan rate. That is a big deal to farm families;
it is no additional support to the producer. It counts against
payment limits as a market and loan gain.
And it seems that there was no real economic justification
for this dramatic reduction. And I have seen a review from the
University of Georgia's National Center for Peanut
Competitiveness. They see no evidence that the reason for the
drop justifies the amount of the drop, and I would just like a
commitment that you would, if you will, review what was done
there, review the report from the National Center for Peanut
Competitiveness and that we take into consideration that this
is a substantial drop, and it has a substantial impact on farm
families. If you read the release from the agency, it was
simply to move peanuts out of storage. And shellers aren't
going to shell peanuts just for the sake of shelling peanuts
when they have to pay cold storage versus a regular storage.
And so have you received any comments on that, if you
would, just kind of a general question maybe what happened
there, what----
Mr. Dolcini. I don't have a specific response for you,
Congressman Scott, but I would be happy to review that report
by the National Center, and I would also be happy to come up
and meet with you and your staff here, along with the folks
from the economic research division at the agency that work on
peanut issues quite closely, and perhaps that can be a broader
explanation of what the agency was doing.
Mr. Austin Scott of Georgia. Well, I very much appreciate
that, and we will work around your schedule, work to
accommodate you in any way we can, and we will get that report
to you as soon as possible.
Mr. Dolcini. I appreciate that, sir
Mr. Austin Scott of Georgia. And, Mr. Willis, just kind of
a general comment. I know that the cotton industry and cotton
producers have been meeting with you about a couple of
different issues with regard to STAX. They are very
complimentary of you and the relationship that they have with
you. I want to thank you for that and for working with them.
What kind of timeline do you expect that we will be
operating under with notification of any changes for the next
year?
Mr. Willis. I would like to also express my appreciation to
the cotton producers. Throughout this farm bill, we have had
significant amount of conversations with these groups simply
because the changes in the farm bill were pretty dramatic.
There was a lot of changes that we needed to have. Some of
these programs, area-wide programs are new, new to producers
and sometimes new to the Risk Management Agency. So throughout
it we talked to them and tried to take their input and take it
to heart.
There have been a few other issues. We have been talking
about them lately, and I would anticipate very soon we will
have any decisions made for the next year. Some of the requests
they had were very reasonable, and we are trying to work with
them to make that happen.
The reality is, we want the safety net to work for the
producer that it is intended to work for, and if they have
reasonable ideas, we are willing to take them under
consideration. That is one reason that we implemented many of
our programs in the farm bill using kind of a pilot authority.
That gives us the ability, if something doesn't work out
perfect the first time, to make a few changes so that the next
year it works better for the producers.
Mr. Austin Scott of Georgia. Thank you for that. You said
soon. Is that 30 days? Sixty days?
Mr. Willis. I don't know exactly which changes you are
referencing, but I know we have had conversations on allowing
them to purchase STAX on certain practices and a lower percent
on other practices. That issue there, in fact, we have already
resolved it, and they are pleased with the result. Without
knowing exactly any other issues, I don't know the timing, but
we would know very soon.
Mr. Austin Scott of Georgia. I have about 30 seconds left,
so we will get you the list.
Mr. Willis. Okay.
Mr. Austin Scott of Georgia. And I certainly appreciate you
working hand in hand with the industry.
Mr. Chairman, I will yield the remaining 29 seconds.
The Chairman. The gentleman yields.
And the chair will take full notice of the time yielded
back.
Ms. Plaskett, 5 minutes.
Ms. Plaskett. Thank you, Mr. Chairman, Ranking Member.
Thank you, panelists, for your time and your tireless work
on behalf of farmers.
I have a question for Under Secretary Taylor. This is
related to drought. This past year, the Virgin Islands was hit
by a severe drought with rain levels very well below average
since last October, and we had, as a result of that, we had
enumerable livestock fatalities due to a lack of grazing and
feed.
I was encouraged that USDA was able to provide assistance,
and an official drought disaster declaration was made for the
Island of St. Croix, although it didn't happen for the Islands
of St. Thomas and St. John, and I understand that was due to
the acreage and the amount of farmers that were on those
islands. And we are pleased that help is on the way, although,
of course, our farmers would like a little more assistance than
just loans at this time.
One of the problems that we had in this process was that
the Virgin Islands is not included in the U.S. Drought Monitor
and does not have a Drought Monitor classification, which is
part of your program eligibility requirements before disaster
is declared. It took a great deal of special arrangements on
behalf of our office and my staff to make that happen, and I
want to know how this process is supposed to work and how can
it be done more smoothly and why the Virgin Islands might have
been kept off and what can we do to ensure that this is
rectified in the future.
Ms. Taylor. Thank you, Congresswoman. I appreciate that
question.
I will actually turn it over to Administrator Dolcini, who
has worked really closely on this issue, so he can elaborate
further.
Ms. Plaskett. Okay. Thank you.
Thank you, sir.
Mr. Dolcini. Absolutely, Congresswoman, and it has been a
pleasure to work with your staff on this issue here.
As you are aware, the Drought Monitor does not cover the
Virgin Islands, and so we were lacking a comparative rainfall
analysis which allows us to make determinations about counties
or regions that are eligible for, in this case, the Livestock
Forage Program.
We were able to make a comparative rainfall analysis using
data from Caguas, Puerto Rico, and in the interim, and we are
hopeful that we can work with the Drought Monitor to establish
a more official presence on the Virgin Islands. The data from
Caguas allowed us to extend 4 months' worth of LFP payments to
affected livestock operations on the Virgin Islands. We are
happy to continue to work with your office to make sure that
folks better understand what the process is around our disaster
assistance programs.
As you know, the Virgin Islands is administered out of our
Florida State office and the State Executive Director gets over
to the VI from time to time. Perhaps I can take a trip down to
better understand.
Ms. Plaskett. You need to. You have an open invitation.
Mr. Dolcini. Well, I appreciate that.
Ms. Plaskett. As well as the Under Secretary, and come
during the months of November to March. I think that will be
the best time for you to come, don't you?
Mr. Dolcini. If I can convince Deputy Taylor to sign the
travel authorization, I will be happy to do that. But we are
happy to work with you, and we have a good interim solution
here on the----
Ms. Plaskett. I appreciate that. And can I ask, with regard
to those loans that were given to our farmers and for the loans
that farmers have, we were talking about FSA monitoring their
service. Are they servicing the loans? Are they able to buy/
sell those loans? How does that work?
Mr. Dolcini. No, they are not sold on the secondary market.
Our direct loans are made by the Farm Service Agency and
serviced by the Farm Service Agency. That constitutes the bulk
of our farm loan portfolio. We do have an extensive guaranteed
program where we work with commercial lenders who participate
in our guaranteed program, and we guarantee up to 95 percent of
the body of the loan that is made.
It is really one of the best deals that the U.S. Government
offers, and our delinquency rates are very low for both
programs. In the case of emergencies, we have an Emergency Loan
Program that operates in a very similar way to most of our
direct loan programs, and that is an option for producers
impacted by natural disasters as well.
Ms. Plaskett. Thank you. And then I had a question for Mr.
Willis, and this is regarding in terms of the Risk Management
Agency.
One of the things that I note as one of the essential tools
for farmers in anticipating and avoiding some of the things
that we talked about, drought, disaster, is insurance. And
particularly in the Virgin Islands, where we have small
diversified farms, we recognize that this insurance is really
helpful, particularly for new farmers as they are starting up.
Can you talk about ways that RMA can help to strengthen and
stabilize an island's farm economy as it is trying to build
itself and grow?
Mr. Willis. One of the new products that we are very proud
of and we think has opportunities for helping everybody all
across the United States and everywhere, because of its
flexibility, is the Whole Farm Protection Program. The Whole
Farm Protection Program is something that in many areas where
you might not have a large agriculture presence, you don't have
what we need to set a rate. Well, what the whole farm does, it
allows the farmer to insure everything on their farm, their
whole farm. It looks at their revenue. I think that would be a
program where I would love to sit down and talk to you and see
what options we have to put it out there in the Virgin Island
because that could probably be the most flexible safety net for
those producers.
Ms. Plaskett. Thank you so much.
And, Mr. Chairman, thank you for the time.
The Chairman. Thank you. The gentlelady yields back.
Mr. Crawford, for 5 minutes
Mr. Crawford. Thank you, Mr. Chairman.
Ms. Taylor, I am concerned about the actively engaged rule.
What is the status of the rulemaking process and when can we
expect a final rule?
Ms. Taylor. Thank you for that question, Congressman. As
directed by the 2014 Farm Bill, it gave us some clear direction
to take a look at the actively engaged rule due to active farm
management, but it also gave us some strict confines to really
operate under. One was an exclusion for entities solely
comprised of family members. This fall--or excuse me, this
spring, we published a proposed rule. That time closed. We
received just under 100 comments.
Currently we are analyzing those comments, addressing them
within the final rule. As the rulemaking process is continuing,
we don't have an exact timeline for when the final rule will be
published, but we will certainly keep your office and the
Committee apprised as we go forward, and we are certainly
cognizant of keeping producers informed of whatever the new
rules may be but also not changing rules midstream for
producers as well.
Mr. Crawford. Okay. I want to make sure that we are
incorporating those concerns about the number of managers that
are allowed on large or complex operations. Is that something
being taken into consideration?
Ms. Taylor. As actually directed by the farm bill, they
also put some requirements for USDA to consider the size of
operations and also the complexity of certain operations. We
received some comments to that effect. In the proposed rule we
allowed additional farm managers, whether if the operation was
large or if it was complex, and two additional if it was large
and complex. We received some comments on those limits, and we
are taking a look at those through the rulemaking process.
Mr. Crawford. Okay. I understand that you are almost done
with the implementation process for ARC and PLC with the
payments for 2014 expected to go out in October. What are the
lessons learned for the 2014 Farm Bill commodity program
implementation and what issues do you have left on that?
Ms. Taylor. I think some of the lessons that we learned is
these were new programs to farmers. It was a whole different
way for agricultural producers to really think about a farm
safety net. For the first time, they had required options they
were going to have to make, as opposed to the direct payment
program beforehand.
We certainly appreciated the money this Committee directed
toward development of some online tool resources. We partnered
with Texas A&M and the University of Illinois to develop two
different online tools so producers could kind of run scenarios
on what these programs may do in the future based upon
different commodity scenarios.
We also worked through extension to provide education
throughout the country, in counties all over the country. I
think those resources were extremely valuable in educating
producers on brand new programs and a whole new concept to the
farm safety net.
Mr. Crawford. Okay. Thank you.
Mr. Willis, on crop insurance, what steps are being taken
to continue to educate farmers on crop insurance and the crop
insurance providers on the provisions of the farm bill related
to crop insurance as they continue to be rolled out?
Mr. Willis. There are quite a few things going on right
now, and many of them started immediately after passage. As
soon as the farm bill was passed, we started working with our
partners, the crop insurance companies. We held trainings. As
different parts of the farm bill were available, they worked
with crop insurance agents, we talked to producers, we educated
producers. We also dedicated some funds through the Risk
Management Education Program. We put a priority there to
educate on new farm bill programs.
The Risk Management Agency also partnered with Val's
agency, the Farm Service Agency. They held hundreds of sessions
all around the United States to educate on farm bill programs,
and because of the close ties between title I and crop
insurance, we attended many of those with them.
We also partner with some of the private developers of
products, such as peanut revenue and such as margin, to help
train them as well. So it is quite a few partnerships, and we
have also used technology. We actually have an app out and a
little calculator on our website that helps producers go in
when they have some time and identify how the programs work for
them and determine what the safety net is and what they want to
take advantage of.
Mr. Crawford. How wide-spread is Supplemental Coverage
Option for crop insurance now and specifically what crops are
included and what aren't?
Mr. Willis. It is easier to summarize. Once we make all our
announcements for next year, 97.5 percent of acres within the
crop insurance program will have an SCO policy available for
them. The vast majority of crops that have enough data to run
an area program will have SCO. The same also goes along with
APH exclusion as well.
I can certainly get you the list of crops, but it is a very
long list. We have a few more announcements to make as far for
next year, but we are very pleased. And I want to recognize my
staff. They have done a tremendous amount of work making sure
SCO is available for as much as we can.
Mr. Crawford. Excellent. Thank you. I would like a list of
that if you wouldn't mind providing that.
And I yield back.
The Chairman. The gentleman yields back in.
Mr. Allen, for 5 minutes.
Mr. Allen. Yes. Thank you, Mr. Chairman, and I appreciate
your time this morning.
Administrator Dolcini, the USDA--and I am talking about the
actively engaged rule as far as you are currently in the final
rulemaking phase to implement the farm bill language that
modified the actively engaged provisions. I know that the
Department has received extensive feedback as far as the
comments and concerns from major commodity organizations
regarding the impacts of the proposed changes.
The farm bill provisions are pretty clear regarding
concerns in how this proposed rule could impact farms that are
largely made up of family members but we may have relatives
involved not covered by the family member provision or others
that serve a management function on the farm. In these
circumstances, it is my understanding from the USDA proposal
that all the members of the farm would then be subject to the
new definition of actively engaged, even the family members of
the farm, and I hope the final rule clarifies this issue.
Can you tell me when the Department expects to release the
final rule and for what crop year it will be affected?
Mr. Dolcini. I appreciate the opportunity to answer, Mr.
Allen. The rule will apply for 2016 and subsequent years. There
won't be a retroactive application of this rule. As Deputy
Under Secretary Taylor has noted, we are working on the final
rule now, and we received a number of comments from around the
nation, including many from commodity organizations that we
have incorporated into the way we are approaching this rule. We
are also trying to keep closely to what the farm bill directed
us to do.
And as you point out, there are exemptions for family
members; there are exemptions for spouses, for others that are
involved. And we really tried to focus on the large and
complex--or large or complex--operations to determine how many
payment limits would apply. But we are working on the rule as
we speak, and we will certainly provide a good update to the
Committee when that is in its appropriately final form.
Mr. Allen. All right. Thank you.
Administrator Willis, as far as the STAX program, I would
like to commend the Department for their implementation of
this, and would like to congratulate you on the implementation
of the STAX income protection plan. This is a tremendously
important insurance product for the cotton farmers, and I
appreciate the time and effort the Risk Management Agency put
into this timely implementation of this new insurance product.
It is my understanding that RMA has received several
suggestions of ways to improve STAX ahead of the 2016 crop
contract change dates. Some of these changes, including
allowing STAX purchase levels by practice, timing of any
indemnity payments triggered by STAX in areas where data is
available earlier, and offering STAX everywhere cotton is
growing, including written agreement counties.
It is my understanding that the cotton industry and RMA
have had a very productive working relationship during the
implementation of STAX, and I encourage this relationship to
continue. Do you have a timeline for when these changes, if
enacted, could be announced and implemented?
Mr. Willis. Yes, sir. I apologize the order that the three
changes that you mentioned, I do recognize, I believe, the
first and the third we intend to do. I don't know if they have
been announced. I know we have had discussions on them. I
apologize, the middle one, I have to get back to you on as far
as the timing of the STAX payments. I don't know if there was a
lot of flexibility there in making those earlier. Certainly we
have every desire to make them as quickly as possible, but I
simply don't know the answer, if that was possible.
But my understanding is that on the first and the third
issue, we are moving in those directions. We believe those are
reasonable ways to make STAX work better
Mr. Allen. All right, sir.
As far as the overall cotton situation with regard to trade
and that sort of thing, what are we doing with regard to the
worldwide situation on cotton as far as the market price? Any
ideas about what you are working on there?
Ms. Taylor. Thank you for that question, Congressman. Well,
first off, I will state that cotton is one of our agricultural
cooperators, and so we continue to partner with them through
some of our market development programs on MAP and FMD, where
we are able to help promote cotton into new markets or expand
into existing markets, so we are continuously looking for new
cotton markets for our U.S. grown cotton.
Also, we continue to have conversations, in the larger
overall WTO context on subsidies around the world and their
impact on production around the world, that trade distorting
subsidies from any country, not just the United States, have a
market distortion impact, and so we continue to have those
conversations within the context of the WTO.
Mr. Allen. Well, I appreciate your work on that because we
are losing acres, and we need to keep this product going. Thank
you.
Mr. Chairman, I yield back
The Chairman. The gentleman's time has expired.
Mr. Rouzer, 5 minutes
Mr. Rouzer. Thank you, Mr. Chairman.
And Ms. Taylor, great to see you again, as well as your
colleagues and I appreciate you coming to join us here today.
I have several different questions, so I am going to try to
be brief as I ask them and if we have enough time to get
through a few of these.
Pork: Obviously, it is very important to the State of North
Carolina. South Africa has significant potential for sales of
U.S. pork, and I am just curious where we are with them in
terms of opening up that market.
Ms. Taylor. Thank you for that question, Congressman
Rouzer. Pork is also very important to Iowa as well, my home
state.
Mr. Rouzer. I heard that.
Ms. Taylor. I certainly understand the importance that you
emphasize on that. We continue to have ongoing technical
discussions and political discussions with our South African
colleagues. Two weeks ago, I was in Gabon for the AGOA forum
where we met with South Africa again. We actually have a
technical team there this week continuing those discussions on
the host of SPS issues we have with South Africa. And then also
we have the ongoing out-of-cycle review under AGOA as well for
South Africa.
So we continue to press them at every venue we have
possible on resolving our market access issues.
Mr. Rouzer. Is there anything that we can do as a
Committee, or Congress as a whole, to help spur that along any?
Just curious.
Ms. Taylor. I think the ongoing conversation that has been
out there, it has been important for them to see that this is
important for hosts, not just one industry, but all three,
pork, beef, and poultry industries, that are being affected
within the United States.
Mr. Rouzer. Second question, MAP and FMD programs, there
has been some concern that perhaps all the money that is
appropriated and allocated by Congress for those programs isn't
always necessarily used--I wouldn't say not used properly--but
perhaps used for administrative and other costs perhaps. What
is the Department doing to focus in on that?
Ms. Taylor. First off I would just say, USDA believes MAP
and FMD are critical tools to get into new markets or to expand
into existing markets. The demand for these programs really
continues to grow as new program participants come in, new
commodities, new exports are showing interest in utilizing
them. We continually look for the best options to manage the
programs. We do take oftentimes a small portion for
administrative fees, but also sometimes if we are not using
those, we actually give them back at the end of the fiscal year
like we did last year.
So we are always looking for new opportunities to expand
our agricultural mixes for exports that we are doing while
maintaining the best management of the program possible.
Mr. Rouzer. Mr. Karsting, the United States International
Food Assistance Report, which is a joint product of USDA and
USAID, is due April 1st of each year. Do you have any idea when
we might be able to expect to see the report since it is about
5 months past due, and is FAS, have you all completed your
component of that?
Mr. Karsting. Right. Just by way of background, the United
States International Food Assistance Report covers the three
farm bill authorized international food aid programs. So that
is Food for Progress, McGovern-Dole Food for Education, and
P.L. 83-480 Title II, or Food for Peace, which is an USAID
administered program. So what we do between FAS and USAID is we
try to merge our information. We are in the process of doing
that so we can present one unified report. I am hopeful that we
get that to you as soon as possible.
What I can tell you today, is that that report will show
that government-wide in 2014, we did about $1.8 billion in food
aid with about 35 million beneficiaries in 65 different
countries. For USDA-specific programs, McGovern-Dole in 2014
totaled about 78,860 metric tons and about $164.8 million in
work with our cooperators.
We had six new grants covering 2.25 million recipients in
nine different countries. On the Food for Progress side of
things, that is where we send commodities and it is monetized
for development in local countries, we did about 195,000 metric
tons of commodities valued at $127.5 million, 1.6 million
beneficiaries in ten countries.
Bearing in mind the latter one, Food for Progress, if we
are in a sequester situation, that will cut into the amount of
money we can use for transportation; so we have gone from in
the past about 12 annual projects under Food for Progress. Now
we are down to about six per year or five. So we are trying to
make those programs work as best they can and cover as many
people in a responsible way as possible.
Mr. Rouzer. Thank you, Mr. Chairman. My time has expired.
The Chairman. The gentleman yields back. Mr. Abraham, for 5
minutes.
Mr. Abraham. Thank you, Mr. Chairman. Under Secretary
Taylor, first thank you so much for your service in the U.S.
Army and your time in Iraq. It is much appreciated.
First question to you. It is my understanding that the USDA
is going to commit about $100 million to fund some biofuel
infrastructure. Can you explain what authority is being used to
do that?
Ms. Taylor. Thank you for that question, Congressman. As
you mentioned, we recently announced $100 million in matching
grants where about 21 states have delivered projects to match
that on an over one-on-one basis. We are using authority under
the Commodity Credit Corporation charter.
What we have actually found is this will certainly boost
the renewable energy economy, but it is also going to be able
to bring more choices to consumers, and we have found that one
out of ten cars on the road today are flex fuel. However, there
is a limited infrastructure out there. So this is really giving
more choice to consumers all over the country.
Mr. Abraham. I am for it. We grow corn in Louisiana, too,
just like you do in Iowa. But the authority is coming from the
CCC?
Ms. Taylor. Yes, sir.
Mr. Abraham. Okay. Mr. Dolcini, could you bring us up to
speed on the Microloan Program. How is it being serviced? What
is the average size of the loan? Are they performing well?
Those types of questions.
Mr. Dolcini. That is a great question, sir, and I
appreciate the opportunity to tell you a little bit about the
Microloan Program as it has been one of the real shining stars
in the Farm Service Agency loan portfolio since the program
rolled out in January of 2013.
We have made to date nearly 15,000 microloans from Maine to
Hawaii. Most of them have been $35,000 or less, but the 2014
Farm Bill increased the loan amount to $50,000, so now we are
able to make loans of $50,000 or less; and we are also working
on various new iterations of the Microloan Program as well. I
like to think of it as 15,000 different American dream success
stories because when I was the State Director in California, I
saw firsthand the successes of the Microloan Program in
building businesses, in adding jobs to rural economies, in
allowing folks to expand their agricultural operations. And as
Administrator in my travels, I have seen that all over the
country, including recently in Louisiana.
So the Microloan Program has been a real success story for
our agency and the farm loan folks around the country that work
on microloans as well as our entire----
Mr. Abraham. And they are performing well----
Mr. Dolcini. They are performing quite well. They are not
performing at any level different than our direct and
guaranteed programs. In fact, in some cases the returns have
been better.
Mr. Abraham. Okay. Thank you. And, Mr. Karsting, tell me
your hopes or predictions on the American business or
agribusiness outcomes in the TPP negotiations.
Mr. Karsting. I had a boss one time that told me if you
must predict, predict often, so at least a few of them would
come true. I think we are going to have an outcome in TPP that
is commercially meaningful across a wide swath of American
agriculture. We look at sort of what the opportunities are out
there. This is a great opportunity for us to bring tariffs
down, to hopefully resolve technical barriers to trade and non-
tariff barriers, but also to set the rules of the road for a
broader swath of the world.
The countries engaged in the TPP negotiations represent 40
percent of global GDP. And I like to remind people that the
question isn't whether we have TPP and write the rules of the
road or the status quo. If we don't do anything, somebody else
is going to fill that vacuum. And that is why we think it is
important for us to have a high-quality, comprehensive
agreement, and that is what our negotiators are working on
every day.
Mr. Abraham. Do you see the same positive, hopeful outcome
with T-TIP also, or is that going to be a little harder
negotiation?
Mr. Karsting. Well, T-TIP isn't quite as mature in the
process, and if you want to weigh in on this, Deputy Secretary,
we certainly have not been working on it as long, but there is
some hopefulness that if we have a successful TPP conclusion,
that that would lend momentum and urgency to T-TIP negotiations
as well.
Ms. Taylor. Thank you for that, Phil. I would just add,
Congressman, that the issues are slightly different in T-TIP--
--
Mr. Abraham. I understand.
Ms. Taylor.--than what we experience in TPP----
Mr. Abraham. Right.
Ms. Taylor.--and are trying to resolve. I talk to Europeans
consistently about this, and market access, reducing tariffs,
is certainly something we have to address, but without
addressing our SPS issues, the non-tariff barriers, that we are
experiencing with Europe, those market access reductions, those
tariff reductions, are meaningless; and so we really need to
see progress on both within the context of T-TIP.
With Europe we actually have a trade deficit, anywhere from
$23 to $40+ billion in trade surplus on average from
agriculture every year. We have a trade deficit almost every
year with Europe because of some of these non-tariff barriers,
so we are working hard to address those in the context of the
negotiations.
Mr. Abraham. Thank you, Mr. Chairman.
The Chairman. The gentleman yields back. Mr. Yoho, for 5
minutes.
Mr. Yoho. Thank you, Mr. Chairman. Ms. Taylor, you brought
up, let's see here, that there is $35 that we invest in
research and development, or for every dollar we put in we get
$35 return. Is that true? Did I hear that correctly?
Ms. Taylor. Yes, sir. This is a study done independent
several years ago by our cooperator groups, and they did find
that for every $1 that the government or industry is spending
in market development programs, we are seeing an additional $35
in agricultural exports stimulated.
Mr. Yoho. Okay. And I meant to thank you for your service
to our country. I appreciate it.
Mr. Willis, on the Asian fruit fly, I am sure you are well
aware of it in south Florida in the Homestead area. I come from
the great State of Florida, and it has been a problem down
there. It is rapidly emerging. It is rapidly spreading, and
right now it is contained to the Homestead area in the south.
But what happens, the perimeters are 1,200 yards I believe, or
400 yards, and anything within that area has to be destroyed,
or it is quarantined and then obviously destroyed.
And if it moves up to the Miami area, we are looking at
about a $2 billion impact. What are you guys doing on that, or
what do you see right now? Is there crop insurance to protect
any of that?
Mr. Willis. I think the best thing for me to do on that
question, sir, is to get back to you in writing on that.
Mr. Yoho. Okay. Thank you.
Mr. Karsting, the Food for Peace program you were talking
about, we all know the benefits of that. And one of the things
that is real contentious, as you know, are GMOs. In your
opinion, have you seen the beneficial effects of GMOs
increasing production, increasing yields on these products, in
your opinion?
Mr. Karsting. Well, I grew up in Nebraska, and if you just
look at what has happened to corn yields, particularly in
dryland corn over the last few years, you have to be cognizant
of the fact that yields have increased in a variety of
different conditions.
We have examples of eggplant in Bangladesh that are grown
that are Bt that reduce producers' exposure to chemicals and
grow more efficiently. We have other tropical fruits. There are
a lot of opportunities out there. What I try to remind people
is that we are going to have 9.6 billion people on this planet
by 2050, and we ought not confront that challenge with our
hands tied behind our back. And by saying our, I mean globally,
global community so----
Mr. Yoho. I am sure you will see us come back to hopefully
engage you guys helping us market this because we all know the
benefits of it, but there is that other side out there that is
trying to squash this. And we just can't allow that to happen.
There are too many good things that are coming out of this.
Mr. Karsting. I would say I sit next to the Secretary on
most of his meetings with international leaders, and it is a
topic that he raises eloquently on a regular basis.
Mr. Yoho. Well, since we are on this topic, and we are
talking about trade with TPP, we get involved with these multi-
national trade agreements, and sometimes you have multiple
countries saying, well, when they come together there will be
multiple countries saying, no, we don't want the GMOs in here
or certain insecticides. Do you think it is better to have the
large multi-national trade agreements or more of the bilateral?
Mr. Karsting. I think the more sort of uniformity and
commitment we have to sound science and transparency that is
recognizable from country to country, in general, the better
off we are. That has been our goal in all of these negotiations
is to make sure that we have trade rules that are based on
science and not based on other things. And so to the extent we
can do that among a broader spectrum of countries, we are
better off.
Mr. Yoho. Okay. And then Mr. Dolcini, you were saying there
are $5.2 billion in loans that you give out? Is that correct?
Mr. Dolcini. Yes, it is $5.2 billion worth of loans, sir.
Mr. Yoho. Let me ask you because this is something that has
come up in several meetings. You are obviously servicing these
loans. Right? You are giving the money out, collecting the
money?
Mr. Dolcini. That is right.
Mr. Yoho. And so essentially the USDA has become a bank in
a certain sector of the economy. Would it be better to move
these over to the GSEs like Farm Credit Service? You guys
guarantee them but let them service them so that the government
is not in the banking industry? What are your thoughts on that?
Mr. Dolcini. Well, you are right to point out that we are
one of the largest ag lenders in the country, and we serve an
appropriate role. Frankly, our friends and collaborators in
many instances in the Farm Credit System and commercial banks
work well with us, take advantage of the guaranteed program we
offer. But in some cases just aren't willing to make some of
the agricultural----
Mr. Yoho. But if the Federal Government guaranteed them and
we got rid of the bureaucracy of collecting the money and
allowed the GSEs or some other entity to do that with the
government backing, I would like to have your thoughts, but I
am out of time; and if we could get that in writing, I
appreciate it. And I yield back.
Mr. Dolcini. Absolutely. Thank you, sir.
The Chairman. The gentleman yields back. Mr. Thompson, for
5 minutes.
Mr. Thompson. Thank you, Mr. Chairman. Mr. Chairman, thanks
for holding this 2 day marathon hearing here. Great
opportunity. Thank you so much for this first panel.
My question has to do with the ACRSI program. The report
the Committee received on the accomplishments of ACRSI listed a
number of key outstanding efforts that have not yet been
completed. Now, we appreciate that these are complex systems
and involve large amounts of data, but the report you sent to
the Committee suggested that the program was, ``substantially
complete,'' in spite of only covering 30 counties in a pilot
program so far.
So my question was what can you tell us about the
outstanding issues for integrating systems across FSA, RMA, and
the approved insurance providers, and how are they being
addressed, and what kind of timeline can we anticipate for
completing those?
Mr. Willis. I will start out and if Administrator Dolcini
wants to add anything because the two agencies are working
together. It was our report that you were referencing as far as
substantially complete. This past summer we did do a pilot.
That was only a part of what we were doing with ACRSI.
ACRSI obviously is the process of integrating what the two
agencies do as far as sharing data between the two agencies. In
large part it is trying to make lives for farmers easier so
that they don't have to report the same data two times or more.
The first major step was the pilot last summer. We are
moving forward with a significantly expanded pilot this fall,
and it will continue further next spring. The amount of
progress we have been making is continually increasing at a
much more rapid pace, so producers this fall will see a lot of
improvements even over the summer. And next summer they will
continue to see more.
Mr. Scuse, Under Secretary Scuse, this is kind of in a way
something that he talks about a lot because he is a farmer in
Delaware, and he got tired of having to do the same report, one
to his crop insurance agent and then to the Farm Service
Agency. And I can tell you almost every day that I talk to him
he asks how ACRSI is going. He is very intent upon seeing the
success Congress envisioned when you put that language within
the farm bill.
Mr. Dolcini. Sir, I would just add that you are absolutely
right to point out the complicated technical environment that
we work in here. What Brandon and I have tried to do between
our two agencies is do more data sharing, and we have done it
both with the ACRSI program that you mentioned as well as
things like conservation compliance as well, trying to break
down some of the IT silos that exist between the various
agencies at USDA.
So, as Brandon said, you will see more rapid movement with
regard to this particular initiative, but we are doing
everything on the IT front at the Department of Agriculture in
a more thoughtful and strategic and incremental way. We have
learned a lot of lessons about how to implement big,
complicated IT projects in the last several years, and we want
to make sure that ACRSI is done right.
Mr. Thompson. Thank you. There has been some mention from
my colleagues about trade. That is obviously extremely
important. It seems like trade is what kind of insulated our
agriculture industry during difficult times, 2008, 2009, at the
least to a degree was maintained in a robust form.
So Mr. Karsting, it would be helpful, can you describe or
clarify your role as an advocate of the agriculture industry in
the context of international trade? And how does your role
differ from that of USTR? And how do all of you coordinate your
efforts?
Mr. Karsting. Absolutely. I am glad to answer that. We work
a great deal with USTR. As you may know, USTR is designated as
the lead government-wide agency on trade negotiations; but the
reality is that there are thousands of tariff codes relating to
agriculture. Our people are at the negotiations supporting them
with analytics and data on a host of those tariff sorts of
issues as well as their expertise on non-tariff barriers to
trade; so we are working with them all the time. We also do
joint advisory committees with USTR. These are technical
advisory committees appointed by Secretary Vilsack and
Ambassador Froman, and so we work hand in glove with them all
the time.
For us, though, it is not just trade negotiations. We also
have people at post in about 97 different countries around the
globe, and they sort of serve as eyes and ears on emerging
trade issues, resolving bilateral trade irritants where they
can. So we work a lot in connection with USTR.
Mr. Thompson. Very good. Thanks to all of you. Thank you,
Mr. Chairman.
The Chairman. The gentleman yields back. Mr. Moolenaar, for
5 minutes.
Mr. Moolenaar. Thank you, Mr. Chairman. I wanted to follow
up on some of the discussions we have been having about TPP and
T-TIP and specifically with respect to dairy. I am from
Michigan, and dairy is a very important part of my district.
And meeting with dairy producers in Michigan, one of the things
we are concerned about is milk prices being depressed and
oversupply. In fact, I guess in late August there was a report
that dairies in the Northeast and Michigan dumped more than 30
million pounds of milk because of the lack of capacity to
process or markets to handle it.
And so as you can understand, our producers are looking for
new markets. And one of the concerns has been with respect to
Canada. And I am wondering if you could comment on your
thoughts on that, and also perhaps mention how you interact
with the trade representative in working on these issues?
Ms. Taylor. Congressman, if I may take that question, I had
the opportunity to be at the last formal TPP ministerial, which
was a few months ago in Hawaii.
The dairy industry, we have been working very closely with
the dairy industry and in a final deal that is commercially
meaningful for them. Obviously, the U.S. is in a unique spot.
We have offensive and defensive interests as it comes to dairy
trade. But we are working very closely with them on a deal in
not just Canada but also Japan, that is commercially
meaningful.
I think also when you look at some of the other trading
partners, there is a lot of interest there in markets like
Vietnam and Malaysia which have growing middle classes. Over 40
percent in both of those countries, over 40 percent of their
population is 25 years old or younger. And so as their
populations age, they are going to be looking for a higher
quality food, whether that is meat, dairy, fresh fruits and
vegetables, things the United States really excels at
producing.
And as we have looked globally at competitive agricultural
production, the U.S. cost of production has come much more in
line with New Zealand or Australia, so we are much more
competitive globally, and our exports in dairy are reflecting
that. Today, roughly 15 percent of our dairy products produced
are being exported globally.
Mr. Moolenaar. And are you aware, did Canada make some
agreements that they would open up markets to our dairy to
enter into the TPP discussions?
Ms. Taylor. We have long said that TPP needs to be a
comprehensive agreement for the United States, but for all
trading partners as well. What that is meaning for Canada is
some of the supply managed programs, that we are going to need
meaningful access there. That is dairy, but that is also in
poultry and eggs as well.
Mr. Moolenaar. And are there criteria that have been
established that you can say, this meets our criteria in terms
of opening access?
Ms. Taylor. The ongoing negotiations are very fluid, and so
saying what that might or might not be is hard at this stage,
but certainly we are looking at the whole package, so there is
definitely a Canadian component here; but it is much broader
than that. It is also what market access we can get into Japan
and some of the other countries I mentioned like Vietnam and
Malaysia.
But certainly are happy to keep the Committee apprised as
the negotiations continue and near finalized agreement and what
that dairy package actually looks like.
Mr. Moolenaar. Yes. I guess one of the things that strikes
me, and again I wasn't involved in the early stages of this,
but my understanding was is that Canada, in order to become
part of the TPP process, agreed to opening up their market to
U.S. dairy products, and that was kind of a condition for them
to be part of it. And I guess what I am wondering is, are there
certain criteria that we are going to use to evaluate whether
that has been met?
Ms. Taylor. Congressman, from our perspective, Canada is
going to need to offer commercially meaningful access into
their dairy market. But what that criteria looks like, for the
U.S. Government, but also our dairy industry, is looking at
this a little more holistically for the entire agreement. And
so what the exact Canadian criteria are, are very fluid because
it is the overall trade picture through the 11 other TPP
parties that we are negotiating with.
Mr. Moolenaar. Is there a definition of commercially
meaningful?
Ms. Taylor. Not in this context. I don't know if that is
necessarily exactly defined, but certainly something worth
value to our producers in an economic way to our dairy
processors in an economic way.
Mr. Moolenaar. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. The gentleman's time has expired. Mr. Gibson,
for 5 minutes.
Mr. Gibson. Thank you, Mr. Chairman. I want to commend you
and the Ranking Member for setting up these hearings. I
appreciate the opportunity for oversight.
I apologize to everyone, including the panel, that I am
just getting here and getting situation aware, but I do have a
question. It actually follows up on Mr. Moolenaar.
Given where we are and where dairy has been, say, 24 months
ago when that percentage was a little higher--it was about 17
percent, maybe 18 percent at the highest--but also given the
fact that production is up, I am just very interested to know
raw numbers, if you will, the poundage in terms of how much now
is being exported, controlling for the overproduction. So I am
curious on that.
Ms. Taylor. Congressman, I don't have those exact poundage
numbers with us, but we will certainly be happy to follow-up
with your office with the numbers after the hearing.
Mr. Gibson. Well, thanks on that. Because, as I circulated
in August, among the things I heard from my dairy producers,
what came up, Russia came up in terms of some reactions that we
took in relation to the ongoing international affairs, Russia,
the aggressive action they took last year.
Our dairy producers are of the mind that our actions have
hurt them. And I am just curious your reaction to that?
Ms. Taylor. Thank you for that question, Congressman. This
is getting back to Administrator Karsting's point a little
earlier about our presence all over the world. We have
employees, the Foreign Agricultural Service has employees in
roughly 96 countries, but they touched well over 150 countries
through regional coverage as well; and they are our eyes and
ears.
While the Russia situation is ongoing, we are continually
working to open markets all over the world within the context
of TPP and T-TIP but also just bilaterally and working through
a host of market access issues that arise every day. Whether it
is facility registration for dairy products or things of that
nature, we continue to work on a bilateral basis and a case-by-
case basis; and our footprint on the ground really allows us to
react quickly to ensure markets stay open.
Mr. Gibson. I appreciate that, and I look forward to
getting that figure whenever it is available. And I look
forward to continuing to participate in this as it unfolds, but
that is all I have for now, Mr. Chairman. Thank you.
The Chairman. The gentleman yields back. The Ranking Member
has another 5 minutes.
Mr. Peterson. Thank you, Mr. Chairman. Mr. Willis, this
provision that was in the farm bill about the catastrophic
insurance or whatever it was for poultry. It probably wasn't
put in there for that reason, but you are doing a study on that
or something? Are you getting close to having that done? When
is that coming out?
Mr. Willis. Yes. The study you are referencing should be
available later this fall.
Mr. Peterson. Later this month?
Mr. Willis. Later this fall.
Mr. Peterson. So that would be what, November?
Mr. Willis. Probably around then, yes, sir.
Mr. Peterson. Did you farm that out to somebody or?
Mr. Willis. We did. We contracted for that study, yes.
Mr. Peterson. Have you had any discussions with the
industry about some work they have been doing with the
reinsurers in terms of whether they would be interested in
doing a business interruption insurance kind of a thing? Are
you aware of that at all?
Mr. Willis. I don't believe that I have had any
conversations. I don't know if others have. There is also, in
addition to the catastrophic study, there is a business
interruption study that is also underway. We expect that early
next year.
Mr. Peterson. Yes, but that was a different situation. That
had to do with the bankruptcy of some processor or something
and some producers being put at risk because their processor
was bankrupt. Is that----
Mr. Willis. My understanding is yes. The two studies are
different. The catastrophic will be available fall. The
business interruption will be next spring, and it covers the
issues such as what you referenced.
Mr. Peterson. That will be in the spring?
Mr. Willis. Yes, sir.
Mr. Peterson. And that was also farmed out to somebody,
some university or something?
Mr. Willis. I believe a private contractor. There were
numerous different studies requested, often looking at the
feasibility of crop insurance on a sector of agriculture that
previously hadn't had crop insurance coverage.
Oftentimes to expedite implementation of the farm bill, we
would offer these out as contracts to individuals who were
experts in crop insurance, and they oftentimes write those.
That allows us to focus a lot of our attention on
implementation of the provisions that directly impact the
farmers and not take resources away from that.
Mr. Peterson. Well, I just had a meeting with some of the
poultry folks. If it is okay, we need to get together next
week. I need to talk to you about some of the discussions that
I have been having with them and get your input on that. If you
would be up for that.
Mr. Willis. I would welcome that opportunity.
Mr. Peterson. Thank you. Mr. Ashford, you had a question. I
would yield to you.
Mr. Ashford. Yes, I just had one follow-up. The question
that we get, I get in Nebraska about the difference between TPP
and T-TIP has to do with mainly the non-tariff-related issues.
And would you mind going just in a general sense, explaining
how you see those differences? I understand them generally, but
if you could just kind of explain how you see the differences
and the challenges between the two negotiations?
We understand the tariff-reduction issue and eliminating
tariffs in TPP; but what about the other, the non-tariff-
related?
Ms. Taylor. Certainly, Congressman. Thank you for that
question. I will talk a little bit about T-TIP specifically. I
think the issues, the negotiations themselves are very
different. In T-TIP you have two very mature economies,
developed economies, where we already are doing a lot of trade.
The EU is already our fifth leading trading partner, and that
is with oftentimes high tariffs on agricultural products and a
host of non-tariff barriers or SPS barriers that is preventing
trade.
Really what we are having conversations on during the T-TIP
negotiations are about real predictability in the regulatory
process with the EU. What we see oftentimes with the EU is they
have a scientific process that works quite well. It is called
the ESF Committee. And they go through their scientific review.
They find similar to what our scientists find in our regulatory
processes, whether it is on certain pathogen reduction
treatments or washes for meats and poultry or through certain
approval of events in biotechnology.
But then they have this political layer, and oftentimes
then that is when it gets stuck. We don't know the path
forward. We don't know how long that path forward can take. So
what we are trying to do is build a process around the
negotiations that will bring certainty that once the science is
done, we don't get stuck at that political layer.
Mr. Ashford. That is not so much the case in TPP? It is
less so.
Ms. Taylor. In TPP, many of our trading partners are
working through, they are setting up their food safety systems
or revising the regulations that we see today. Vietnam recently
did a complete overhaul of their food safety system and food
safety laws and regulations. We actually had, through some of
our technical exchanges, helped them in that process. So in
TPP, we worked a lot about recognizing international science-
based standards, a rules-based process, having good regulations
on the books. The same rules-based, science-based principles
apply in TPP, just in a slightly different way.
Mr. Ashford. Thank you.
The Chairman. The gentleman yields back. Mr. Benishek, did
you want 5 minutes on this panel?
Mr. Benishek. No, thank you. I am just getting up to speed.
The Chairman. Well, I want to thank, Ms. Taylor, thank you
and the others for coming.
As a transitional issue, our panelists have agreed
graciously--thank you--to go down to 1306, for Members to go
down and have a quick word if you want to while we are getting
the next panel in. So to facilitate that, Ms. Taylor, you and
your team, if you wouldn't mind going to 1306, and our Members
will swing by there and talk to you if they want to.
Thank you so very, very much, and we will stand in recess
for a couple minutes while we reset, about 10 minutes, and we
crank back up. Thanks everybody.
[Recess.]
The Chairman. All right. Good afternoon. We will welcome
our second panel to the podium. I passed you guys in the hall.
I wasn't trying to be rude, so we will have a chance to visit
with you and transition to the next panel here in a minute.
With us next we have the Honorable Robert Bonnie, Under
Secretary of Natural Resources and Environment at the USDA. And
accompanying him will be Jason Weller, who is Chief of the
Natural Resources Conservation Service, and Ms. Mary Wagner who
is the Associate Chief at the Forest Service.
So, thank you for being here this afternoon. We appreciate
it. Mr. Bonnie, the floor is yours.
STATEMENT OF HON. ROBERT BONNIE, UNDER SECRETARY, NATURAL
RESOURCES AND ENVIRONMENT, U.S.
DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.;
ACCOMPANIED BY JASON WELLER, CHIEF, NATURAL
RESOURCES CONSERVATION SERVICE, USDA; AND MARY WAGNER,
ASSOCIATE CHIEF, U.S. FOREST SERVICE, USDA
Mr. Bonnie. Mr. Chairman, Ranking Member, and distinguished
Members of the Committee, thank you for the opportunity to
appear before you today to discuss the work of the Natural
Resources Conservation Service and the Forest Service. This
Committee deserves a great deal of credit for the 2014 Farm
Bill, and I will focus much of my remarks on implementation of
that law.
In addition, given the seriousness of this year's fire
season, I also want to discuss forest restoration and the
impact of wildland fire on our budget. Implementation of the
2014 Farm Bill is a top priority for USDA. With respect to NRCS
programs, the agency is demonstrating that voluntary
conservation, backed by strong science and done in concert with
a variety of partners, can solve critical natural resource
challenges for America's farmers, ranchers, and forestland
owners.
The agency has completed interim final rules for the
Environmental Quality Incentives Program, the Conservation
Stewardship Program, the new Agricultural Conservation Easement
Program. NRCS has placed a particular priority on
implementation of the new Regional Conservation Partnership
Program. This new program has spurred new partnerships among
producers, businesses, conservation groups, states, and others.
In February, NRCS provided over $370 million in RCPP funding to
115 projects, an investment that matched more than dollar for
dollar. In May NRCS, announced a second funding availability,
265 pre-proposals were submitted. Interest in RCPP is very
high.
Beyond this program, NRCS is spearheading a series of
initiatives to address drought, water quality, wildlife
habitat, and other issues. For example, our Mississippi River
Basin Initiative is significantly increasing the adoption of
critical water quality conservation practices. We are working
with California farmers and ranchers to make their operations
more resilient to drought. And NRCS is demonstrating through
its Working Lands for Wildlife Program that farmers, ranchers,
and forest landowners can voluntarily restore habitat for rare
species so that they no longer need the protection of the
Endangered Species Act.
Let me now turn to the Forest Service. Increasing the pace
and scale of forest restoration and management across our
National Forests remains the top priority for the agency. The
agency continues to invest in collaborative landscape-scale
projects and has increased acres treated over the last several
years. Timber sales have increased by 18 percent since 2008.
The Forest Service has moved quickly to implement several
provisions of the 2014 Farm Bill. Last year Secretary Vilsack
designated over 46 million acres of National Forest System
lands under the new insect and disease provisions of the farm
bill. Twenty projects are moving forward, and 16 of those use
categorical exclusions under NEPA. Working with states, the
Forest Service has developed templates for use of the Good
Neighbor Authority, and we have entered into agreements so far
with Pennsylvania, Utah, and Wisconsin.
Through our Joint Chiefs Landscape Restoration Partnership,
NRCS and Forest Service are working together to restore forests
on private lands adjacent to National Forests using farm bill
dollars.
Our biggest obstacle to increasing forest restoration and
management is the wildfire budget. Longer fire seasons,
increased fuel loads, and development into our wildlands are
all significantly increasing the costs of fire fighting. In
most years, the Forest Service is forced to transfer funds from
nonfire programs to fund firefighting. This year we will
transfer an estimated $700 million, but there is a long-term
problem that goes well beyond these annual transfers. Fire
programs now consume over 50 percent of the agency's budget, up
from 16 percent just 2 decades ago. As a result, the agency has
39 percent fewer employees working on nonfire programs. All
agency activities are suffering, including recreation,
research, range management, and, yes, forest restoration.
The current budget system is cannibalizing the very
programs that can help us reduce the threat of fire. To solve
the fire budget problem, we must solve both issues, both fire
transfers and the long-term shift of resources away from
nonfire programs.
The Wildfire Disaster Funding Act supported by several
Members of this Committee would make significant in-roads. It
is time that we treat fire as the natural disaster that it is
and adopt an approach which will allow the agency to invest in
restoration activities that will over time save lives,
property, natural resources, and money. Thank you.
[The prepared statement of Mr. Bonnie follows:]
Prepared Statement of Hon. Robert Bonnie, Under Secretary, Natural
Resources and Environment, U.S. Department of Agriculture, Washington,
D.C.
Mr. Chairman, Ranking Member, and distinguished Members of the
Committee, thank you for the opportunity to appear before you today to
discuss the role of the Natural Resources Conservation Service (NRCS)
and the Forest Service at the U.S. Department of Agriculture. My
testimony today will focus on farm bill implementation; wildfire
response; and strengthening rural communities through voluntary
conservation, resilient landscapes and recreational opportunities.
Farm Bill Implementation
Implementation of the 2014 Farm Bill has been and will continue to
be a priority across USDA. The new farm bill delivered a strong
conservation title that makes robust investments to conserve and
support America's working lands and consolidates and streamlines
programs to improve efficiency and encourage participation. For the
Forest Service, the farm bill expanded current authorities and provided
several new authorities including Good Neighbor Agreements, expanded
insect and disease designations under the Healthy Forest Restoration
Act, and permanently reauthorized stewardship contracting. NRCS is
focusing on implementation of the Environmental Quality Incentives
Program (EQIP), Conservation Stewardship Program (CSP), Agricultural
Conservation Easement Program (ACEP), Regional Conservation Partnership
Program (RCPP), and Voluntary Public Access and Habitat Incentive
Program (VPA-HIP).
Expanded Insect and Disease Designations
The 2014 Farm Bill added authority to the Healthy Forest
Restoration Act to authorize designation of insect and disease
treatment areas and provide a categorical exclusion (CE) for insect and
disease projects on areas as large as 3,000 acres. The Forest Service
received letters from 36 states requesting designations under the
insect and disease provisions and in response the Forest Service Chief
designated approximately 46.7 million acres of National Forest System
lands. Currently, 20 projects have been proposed under the provision;
the Forest Service intends to use the CE for 16 of the projects and
streamlined Environmental Assessments for the remaining four. The
initial 16 projects will help the agency and its partners better
understand and implement the new CE authority while additional projects
are proposed, planned, and authorized. The Forest Service expects that
planning and implementation of projects within designated areas will
expand in FY 2015 and beyond.
Good Neighbor Agreement Authority
The Forest Service completed the requirements under the Paperwork
Reduction Act to approve the new Good Neighbor Agreement templates that
will be used to carry out projects with the states. The Forest Service
worked closely with the states to collaboratively develop the new
templates, which were approved by the Office of Management and Budget
on June 24, 2015. Since then, the agency has entered into agreements
with Pennsylvania, Utah, and Wisconsin to carry out forest, rangeland
and watershed health activities on the national forests in those
states.
Stewardship Contracting
The farm bill also provided permanent authority for stewardship
contracting. Traditional timber sale contracts will continue to be a
vital tool for the Forest Service in accomplishing management of the
National Forests. At the same time, stewardship contracting is helping
the Forest Service achieve land and natural resource management goals
by funding forest health and restoration projects, stream restoration,
hazardous fuel removal, and recreation improvements. In many areas,
stewardship contracting will allow the agency to build larger projects,
treating more acres, with broader public support. Since 2008, acres
treated through stewardship contracts and agreements have nearly
tripled.
Conservation Stewardship Program
Since CSP started in 2009, the program has become a major force for
agricultural conservation, and it continues to inspire action to
enhance America's natural resources. All private or Tribal agricultural
land and non-industrial private forestland is eligible, unless it is
enrolled in the Conservation Reserve Program (CRP), ACEP--Wetlands
Reserve Easements, or the Conservation Security Program. In FY 2014,
NRCS enrolled about 9.6 million acres and now CSP enrollment exceeds 60
million acres, about the size of Iowa and Indiana combined.
The CSP Interim Rule was published in November 2014, reflecting
statutory changes to the acreage enrollment cap, stewardship levels,
contract modifications, and CRP and certain easement land eligibility.
NRCS received nearly 500 individual comments; most related to small
operations having access to the program, minimum payments, contract
rates, and stewardship thresholds. We expect to publish the final rule
this fall.
Environmental Quality Incentives Program
Through EQIP, producers addressed their conservation needs on over
11 million acres in FY 2014. EQIP provides financial and technical
assistance to agricultural producers to help plan and implement
conservation practices that address natural resource concerns.
Conservation practices are designed to improve soil, water, plant,
animal, air and related resources on Tribal land, agricultural land,
and non-industrial private forestland In FY 2014, over $928 million was
obligated in nearly 40,000 contracts to support this conservation work.
EQIP has been instrumental in helping communities respond to drought as
well, allocating $20million in 2015 for drought across the West.
The EQIP Interim Rule was published in December 2014, reflecting
statutory changes to incorporate the purposes of the former Wildlife
Habitat Incentive Program and address the payment limitation and waiver
authority, advance payments for historically under-served producers,
and preferences to certain veteran farmers and ranchers. NRCS received
over 330 individual comments; most related to the irrigation history,
confined animal feeding operations, EQIP plan of operations, program
administration, payment rates and limitations, application selection,
and funding levels for wildlife practices. The final rule is targeted
for publication in Fall 2015.
Conservation Innovation Grants
Conservation Innovation Grants (CIG) are a component of the EQIP.
They stimulate the development and adoption of innovative conservation
approaches and technologies, while leveraging the Federal investment in
environmental enhancement and protection in conjunction with
agricultural production. CIG is used to apply or demonstrate previously
proven technology in order to increase adoption with an emphasis on
opportunities to scale proven, emerging conservation strategies. CIG
funds projects targeting innovative on-the-ground conservation,
including pilot projects and field demonstrations. In September 2014,
NRCS awarded $15.7 million in CIG to 47 organizations that will help to
accelerate innovation in private lands conservation. The FY 2015
Funding Announcement was released in January 2015 offering up to $20
million. Project selection is targeted for early Fall 2015.
Agricultural Conservation Easement Program
Landowners participating in the Agricultural Conservation Easement
Program (ACEP) enrolled an estimated 143,833 acres of farmland,
grasslands, and wetlands through 485 new ACEP easements (88,892 acres
in Agricultural Land Easements, and 54,941 acres in Wetland Reserve
Easements) with the $328 million in FY 2014 funding. In FY 2015, $332
million is available in ACEP for the purchase of conservation easements
to provide long-term protection of agricultural and wetland resources.
The ACEP Interim Rule was published in February 2015, reflecting
statutory changes to consolidate the purposes of Farm and Ranch Lands
Protection Program, Grassland Reserve Program (easement component
only), and Wetlands Reserve Program and address the certification
process for ACEP--Agricultural Land Easements; authority to
subordinate, modify, or terminate an easement; grasslands of special
environmental significance; and the agricultural land easement plan.
NRCS is currently evaluating public comments and developing
recommendations for the final rule. We expect to publish the final rule
this winter.
Regional Conservation Partnership Program
The RCPP created a new platform for engaging partners and
leveraging the Federal conservation investment. RCPP promotes
coordination between NRCS and partners to deliver conservation
assistance to producers and landowners. NRCS provides assistance to
producers through partnership agreements and through program contracts
or easement agreements. The first RCPP announcement of over $370
million in program funding was rolled out on May 27, 2014. Following a
rigorous two-stage competitive process, 115 high-impact projects across
all 50 states and the Commonwealth of Puerto Rico were selected in
January 2015. Of those projects, $84 million is being used to fund
high-impact conservation projects focused on water quantity and other
drought-related resource concerns. The funded projects support many
activities, from helping farmers improve their resilience to drought to
protecting drinking water supplies. Partners brought forward an
estimated $400 million in their own contributions for a total
investment of nearly $800 million that will go to improve the nation's
water quality and supply, support wildlife habitat and enhance
agricultural production and the environment. The FY 2016 funding
announcement was released in May 2015, making available up to $235
million for new agreements. This round of RCPP will have an even
greater emphasis on partnerships, leveraging, and diversity to achieve
innovative solutions to locally identified issues. Selected pre-
proposal applicants were notified on September 4th if their project was
invited back for full proposal submission.
Voluntary Public Access and Habitat Incentives Program
The VPA-HIP assists states and Tribes to increase public access to
private lands for wildlife-dependent recreation, such as hunting,
fishing and hiking. In FY 2014, NRCS made $20 million available for
VPA-HIP awards and was able to fund ten of the 30 proposals received.
In February 2015, NRCS announced the availability of another $20
million for VPA-HIP projects. Project selections were announced on
August 17 and funding was used to award grants to projects in 15
states.
Mitigation Banking Program
The Mitigation Banking program provision will be implemented
directly through an announcement of program funding. The implementation
approach is being finalized with an expected announcement in early Fall
2015.
In addition to the major rule changes discussed above, minor
statutory changes to Technical Service Providers; State Technical
Committees; Healthy Forests Reserve Program; Small Watershed Program;
Regional Equity; VPA-HIP, and Agricultural Management Assistance were
published in a consolidated Interim Final Rule in August 2014. The few
public comments received were addressed in the final rule published in
April 2015.
Managing Wildland Fires
Increasingly severe fire seasons are one of the greatest challenges
facing the nation's forests. Already this fire season, we have spent
weeks at National Preparedness Level 5--the highest level--meaning all
available ground and air assets are committed to priority work. Severe
drought across the west has increased fire severity in several states.
Washington State, among others, has recorded a record season of severe
wildfires. Drought-ridden California has also experienced tremendous
fire activity. The Forest Service, in coordination with our fire
response partners, mobilized thousands of firefighters along with
numerous airtankers, helicopters, fire engines and other assets through
our integrated, interagency suppression efforts. Every state and Puerto
Rico, along with the military and international support, has provided
people and equipment this season to respond to the severe fire
activity. The Forest Service will continue to collaborate with its
Federal, state, local, and Tribal governments, partners, and
stakeholders on the implementation of the National Cohesive Wildland
Fire Management Strategy.
The Forest Service has one of the most effective fire organizations
in the world and continues to keep almost 98 percent of the wildfires
we fight very small. However, the few fires that do escape initial
response tend to grow much larger far more quickly than ever before. As
documented in a recently released report,\1\ the cost of fire
suppression has soared in the past 20 years and is having a
debilitating impact on the Forest Service budget and non-suppression
activities of the Forest Service.
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\1\ http://www.fs.fed.us/about-agency/budget-performance/cost-fire-
operations.
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In 1995, fire made up 16 percent of the Forest Service's annual
appropriated budget--this year, for the first time ever, more than 50
percent of the budget will be dedicated to fire. Along with this shift
in resources, there has been a corresponding shift in staff, with a 39
percent reduction in all non-fire personnel. Left unchecked, the share
of the budget devoted to fire in 2025 could exceed 67 percent.
Restoring Fire-Adapted Ecosystems
Fire plays a beneficial role in maintaining the ecological
stability of many landscapes, and the Forest Service is working with
partners to restore healthy, resilient, fire-adapted ecosystems. Our
goal, especially near homes and communities, is to prepare forests and
grasslands to resist stresses such as drought and recover from
disturbances, including wildfires. Our large-scale restoration projects
are designed in part to restore fire-adapted forest types across large
landscapes, including the reintroduction of periodic wildland fire
where safe and effective.
Developing new markets for the low-value woody materials we remove
during restoration and hazardous fuels treatments will help offset the
costs of these activities while providing new revenue streams for
private landowners and remains a top priority for the Forest Service.
We will continue to provide grants and other forms of assistance for
wood-to-energy initiatives, and to help projects compete for other
sources of funding. We will also provide technical assistance to help
facilities that convert wood to energy become or remain financially
viable.
Strengthening Rural Communities through Voluntary Conservation,
Resilient Landscapes and Recreational Opportunities
Our National Forest System presents a range of recreational
opportunities to connect people with nature in an unmatched variety of
settings and through a plethora of activities. Spending by visitors
engaging in recreation activities, including skiing, hiking, hunting,
and fishing, supports more jobs and economic output than any other
activities on the National Forest System. In 2012, outdoor recreation
on the National Forest System supported around 190,000 jobs and
contributed about $13 billion to the nation's gross domestic product.
Through work on the 193 million acres of National Forest System
lands, the timber and forest products industries, livestock producers,
and minerals/energy production collectively support about 118,000 jobs.
Each year, these industries contribute about $11.5 billion to America's
gross domestic product. In rural areas in particular, these uses
deliver sustained social and economic benefits to communities.
The Forest Service works to build thriving communities across the
nation by providing communities with the many economic benefits that
result from sustainable multiple-use management of the National Forests
and Grasslands, helping urban communities reconnect with the outdoors,
and expanding the benefits that both rural and urban residents get from
outdoor recreation. Jobs and economic benefits stem from our
administration of the National Forest System, including its multiple
uses, as well as from investments in the activities, access, and
infrastructure needed to deliver essential public services such as
clean water, electrical power, and outdoor recreational experiences.
The right conservation practices put in the right places are an
effective means to achieve cleaner more abundant water for farmers,
ranchers, communities, and wildlife. Using farm bill programs through
the Mississippi River Basin Initiative (MRBI), NRCS has invested
significantly in high-priority water quality projects in the Basin
delivering on the ground benefits. For example, as a result of MRBI
conservation efforts, Arkansas was able to remove two stream segments
from the State's Clean Water Act 303(d) impairment designation. Working
with partners and using farm bill tools, farmers, ranchers and other
landowners have helped remove nine more streams from Oklahoma's 303(d)
list of impaired streams in 2014. Oklahoma ranks second in the nation
for Environmental Protection Agency-recognized water quality success
stories. In the region overlying the Ogallala Aquifer in the Central
Plains, farm bill programs have allowed NRCS to partner with farmers to
install water conservation practices that conserved an estimated 1.5
million acre feet of groundwater over 4 years, or enough water to
provide annual water needs for about 3.3 million households.
If the widespread drought has shown us anything, it is the value of
crop resilience through good soil health management systems. Using farm
bill programs, NRCS has been accelerating adoption of soil health
practices and helping producers build resilience in their production
systems. Soil health management systems help increase organic matter,
reduce soil compaction, improve nutrient storage and cycle and increase
water infiltration and water availability to plants. These benefits
lead to greater resiliency to adverse conditions but also boost yields.
For example, a national survey of farmers documented an increase in
yields of nine percent for corn following cover crops and ten percent
for soybeans after cover crops.
The StrikeForce for Rural Growth and Opportunity initiative targets
farm bill programs in persistent poverty communities to assist farmers
and ranchers in achieving economic and environmental objectives. Since
2010, NRCS and other USDA agencies have focused assistance and outreach
in over 880 counties, parishes, boroughs, and Census areas, and in
Indian reservations in 22 states. In FY 2014 alone, NRCS invested $286
million in partnership with producers in high-poverty communities to
help their operations be more economically successful and
environmentally sustainable. For example, NRCS in partnership with
Tuskegee University has invested about $1 million to help nearly 40
producers in Alabama StrikeForce counties to incorporate innovative
practices on their farming operations, including retro-fits for current
irrigation systems, new wells, solar powered wells, and drip irrigation
systems that will make their operations more productive and
sustainable.
Conclusion
We are now facing some of the greatest ecological challenges in our
history: invasive species, climate change effects, regional drought and
watershed degradation, fuel buildups and severe wildfires, habitat
fragmentation and loss of open space, and devastating outbreaks of
insects and disease. In response, we are working with our public and
private partners to increase the pace and scale of ecological
restoration and promote voluntary conservation that is creating
healthy, resilient landscapes capable of sustaining and delivering
clean air and water, habitat for wildlife, opportunities for outdoor
recreation, and providing food and fiber for the world. The Forest
Service and NRCS provide the programs and services that help strengthen
agriculture, the environment, and rural economies.
The Chairman. Thank you, Mr. Bonnie.
I recognize myself for 5 minutes.
Mr. Weller, could you talk to us a little bit about the
mandate--mandate is one word--but our farmers and ranchers are
constantly facing more and more regulations, and they all want
to take care of the land. They all want to be good stewards of
the land. Can you talk to us about your efforts trying to look
at EQIP and RCPP programs in terms of trying to streamline
those regulations and helping our producers and landowners who
voluntarily want to comply, but we just keep layering on more
regulations.
Can you talk to us about your efforts in helping those
folks to weave that complicated system we have put in place?
Mr. Weller. Yes, certainly, sir. So this Committee has
afforded NRCS great tools. You talked about a few of them, the
Environmental Quality Incentives Program, the new Regional
Conservation Partnership Program, the basic authorities we have
in our Soil Domestic Allotment Act go out and do conservation
planning.
And so there are examples now around the country, Under
Secretary Bonnie referenced one of these a little bit, the
sage-grouse work we are doing out West. It is not just out
West. It is out in the Northeast. This last week we had a
celebration in New Hampshire celebrating yet another species
that through a collaborative voluntarily approach, landowners
have helped head off the paths of potential listing in this
case the New England cottontail rabbit. In the last 13 months
alone, if you go around the country, starting last August in
Montana, with the Arctic fluvial grayling, the Oregon chub in
Oregon, the Louisiana black bear in Louisiana, the bi-state
population of sage-grouse in the border between California and
Nevada, the New England cottontail rabbit. The list goes on and
on, and those are all the species either taken off the list or
prevented from getting on the endangered species list because
of the proactive actions of farmers and ranchers and forest
landowners, and in large part assisted through the programs and
authorities this Committee provides in NRCS.
Beyond ESA is the Clean Air Act in California. So under the
Clean Air Act, in the San Joaquin Valley, one of the most
heavily regulated air sheds in the world, agriculture is a
regulated sector, and they were under a requirement to reduce
the amount of nitrous oxide emissions, NOX
emissions, and so they had to reduce emissions by 10 tons per
day by the year 2017. Well, agriculture, through the help of
the programs again this Committee provides our agency met that
goal 3 years ahead of schedule.
And so through the EQIP program that this Committee has
afforded us, we have invested over $120 million with voluntary
actions in the San Joaquin Valley. And through the upgrading of
diesel engines and retiring old tractors and off-road vehicles
from operations, this Committee in the investment through EQIP
has removed the equivalent of one million cars off the roads of
California's highways every years, in effect reducing 7 tons of
NOX emissions per day, meeting the requirements 3
years ahead of schedule.
So there are lots of examples around the country. Water
quality in Arkansas, again is another example. Through EQIP
assistance and conservation planning by targeting action
working voluntarily with poultry producers in northwestern
Arkansas, we have helped de-list two stream segments on the St.
Francis River because of nutrient impairments, and those waters
are now back to a fishable, swimmable condition because of the
voluntary actions of farmers and ranchers.
The Chairman. That is great information. Ms. Wagner, I try
not to ask a question I don't already know the answer to. We
have Forest Service lands and we have National Parks which have
a great deal of forests on them. Can you walk us through how
those two are managed. Are they managed the same? And if they
are not, do you guys talk to each other; your best practices,
do they share those? I mean, how do you guys co-exist among the
trees?
Ms. Wagner. The National Park Service is a Bureau within
the Department of the Interior, and U.S. Forest Service, of
course, is within the Department of Agriculture. We share many
boundaries with the National Park Service. I can think of the
Olympic National Forest as a good example on the Olympic
Peninsula, which is surrounded by the Olympic National Forest.
So the park and the forest are inextricably connected and
connected with the communities that we serve, both on the
forest and in the National Park. So we do a lot of
collaborative work together.
We coordinate well together. We share resources. We have
authority from Congress called Service First which allows us to
provide seamless visitor services so when people come into an
office, they will be greeted by somebody and get information on
both the National Park and the Forest Service.
Our goals are a little bit different. The Park Service is
focused on preservation and conservation. They interpret for
visitors the scenic, cultural, historic values of a National
Park. The National Forests are guided by the principles of
multiple use management and sustained yield. So we like to
think of the National Forests as working landscapes, as places
where people not only get the benefits that accrue from having
public lands called National Forests, but also they see them as
working to provide things like wood fiber, livestock grazing,
minerals development, energy development.
The Chairman. In terms of specifics, though, there is no
real difference between a healthy forest on National Forest
land and a healthy forest on a National Park. I understand the
difference in what the Park Service is doing, but do they
manage their forests to a healthy level the way you do?
Ms. Wagner. In the National Park Service they have a much
more limited footprint in terms of active management of
forests, though they do some hazardous fuels treatment and do
manage forests to some degree by use of prescribed fire and
natural fire in their parks. We tend to take a little bit more
of a working stance on National Forests where we have timber
sale contracts, stewardship contracts, as tools to help create
resiliency in those forests.
The Chairman. Thank you. Mr. Peterson, for 5 minutes.
Mr. Peterson. Thank you, Mr. Chairman.
Mr. Weller, as you are aware, the interest in my district
of this small watershed program and the implementation, I don't
know exactly what is going on, but I am getting the feedback
from my district that things are not going as smoothly as
people think they should.
I don't know what you are hearing about it or whether this
is an issue of not having enough staffing or just what is going
on. It was initially moving pretty good, but now reports are
that it is kind of bogged down. Have you gotten any feedback?
Mr. Weller. Some feedback. There are a couple things
happening. As you know, 20 years ago, 30 years ago, we had a
much more robust watershed operations program. We had a lot
more capacity. In our states we had engineering teams, whether
it is Minnesota or throughout the country, where they really
were experts at designing, building, constructing. In the end,
ultimate zeroing out of the program, a lot of that capacity now
is no longer--within each state, so now a lot of the capacity
we have is a National Water Management Center.
So while we still have in some states some residual
capacity, particularly focused on a rehabilitation program this
Committee has funded and we have had some success with over the
last few years. With respect to the project in Red River and
partnering with the authority, what I have been told there is
that in Minnesota, there were 14 separate agreements or
projects that are ongoing. And in North Dakota there are about
six that are overall working as a system with the whole
authority's plan to address the funding concerns.
So out of those, what I have been told is that 13 out of
the 14 agreements, these are with the cooperative agreements
that actually start the work, are now with the partners for
signature and review. Five of the six in North Dakota again are
with the relevant partners for their signature and review. We
hope within the next 30 to 60 days they will all be signed and
be able to roll at that point. In the end it just comes back to
where I started with that is the capacity.
And so the authority and the partners there really should
be commended with having everything ready to roll, and there is
a lot of positive energy and they want to get a lot done. As to
what you are sensing is a little bit on our end it is a
bandwidth issue, and that is why we are having to bring in
people from the national level and the National Water
Management Center, as well as from national headquarters here,
our national engineering team, to help support the folks in
Minnesota and North Dakota to make sure we don't have choke
points where we don't get in the way of the partners who want
to proceed.
Mr. Peterson. So you think 30 to 60 days we will have----
Mr. Weller. We will have all the agreements signed, sewn
up.
Mr. Peterson. I appreciate the initiatives to improve
foraging habitat for pollinators and especially this focus on
honey bees. However, many of these plans apparently require the
use of native plants only. In fact, I have had some personal
experience with trying to plant some pollinator habitat. By
doing that the feedstocks are hugely expensive, and they are
very hard to get established. I have seen a number of these
where they have attempted and the flowering stuff in a lot of
cases doesn't survive.
So I guess why aren't we more focused on using non-native
plants like clovers and alfalfa and vetch and sunflowers where
the seeds are a lot more available, a lot less expensive. It is
a lot more easy to establish. Why aren't we more focused on
that, and why are we kind of hung up on all this native idea?
Mr. Weller. So at the national level, we do not prescribe a
mandate to use native, and we don't prescribe the cocktails of
the seeding mixtures. That is something we really allow our
states because they are the closest to our customers and the
closest to what is needed.
Mr. Peterson. I get the impression from the state that they
are being told by you guys.
Mr. Weller. That is something we need to follow up with
Minnesota on. There have been some recent discussions on this,
and I have asked our National Plant Material Center folks and
our ecologists who are working on this, and what they have
advised me on is that while natives are sometimes preferable,
there is not a mandate to use natives. And a lot of times non-
natives, to your point, alfalfa and clover, sunflowers, other
species, are less costly, provide very good forage habitat, and
are more appropriate.
That is where then we really want to provide the
flexibility for the local conservation planner to work with the
producer to really figure out what is the right cost and
performance they want.
Mr. Peterson. But if you are going to plant pollinator
habitat, you are not going to be allowed to plant these non-
natives. You are going to have to plant this mixture that they
have under the NRCS CSP program and so forth. That is coming
from the Federal, right, or from the top?
Mr. Weller. So we have enhancements, yes, under
Conservation Stewardship Program. But if they are specific
enhancements focused on whether it is for--there are different
types of pollinator habitat. So for honey bee habitat, yes,
alfalfa and clovers are a very good varietal you want to plant
but there are other pollinators that you are concerned about
that are native then they are going to be adapted to and prefer
native plantings, so it really depends upon what is the species
that you are trying to provide the best habitat for.
Mr. Peterson. Thank you, very much.
The Chairman. The gentleman yields back. Mr. Neugebauer,
for 5 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman. Mr. Weller, Chief
Weller, I was so glad to hear you talk a little bit about the
endangered species and Fish and Wildlife. As you know, earlier
this month, a Federal judge overturned the listing of the
lesser prairie chicken because they found that Fish and
Wildlife had not followed its own rules in evaluating the
conservation efforts when it added the species to the
threatened list. And by the way, I completely agree with that
judge. I know that NRCS operates one of those conservation
efforts so with the lesser prairie chicken initiative which
works with the Western Association of Fish and Wildlife
Agencies, which has been a very successful program, by the way.
So the question I have is that initiative started back in
2010, I believe. So the first question I have, did Fish and
Wildlife confer with NRCS about their efforts prior to the
listing?
Mr. Weller. Yes, we did as an agency, NRCS provided to the
Fish and Wildlife Service information on the extent and the
scale of the conservation investments that we had made in
partnership with the producers. So my understanding is the Fish
and Wildlife Service did take into consideration the NRCS
contributions to the protection of the habitat.
Mr. Neugebauer. And was that data based on, hey, we are
having some success here? Give me a little idea of the kinds of
information that you furnished them.
Mr. Weller. So what we are trying to then roll up across
the multi-state region that is important for the prairie
chicken, much like we are doing with the sage-grouse, talk
about the acreage, the locations of the acreage, the type of
practices we have in place. But what is also in the partnership
with Fish and Wildlife Service, what we did is we also then
tried to identify what are the best practices to actually help
the prairie chicken but then also work in a working lands
landscape.
So we identified 40 different practices that we felt were
the best for whether you are a farmer or rancher that would
also then benefit prairie chickens. Because we have done that
pre-consultative with Fish and Wildlife Service, then we would
come back and say we had several hundred producers using the
preapproved practices that you agreed benefit the chickens.
Here is then the benefits that roll up in terms of improved
forage for the chickens, improved habitat. So we did some work
ahead of the listing, but then when they were proceeding with
their analysis, we provided them the data in terms of
participation, acreage, and investments.
Mr. Neugebauer. Why do you think--you were talking about
the successes that you have had where you had some of these
other partnerships in place. It is my understanding this is one
of the larger partnerships and involves a lot more private land
than some of the other ones. Why do you think that the Fish and
Wildlife decided to proceed with that after you presented them
with that data?
Mr. Weller. It has been, I completely commend the ranchers
and the farmers in Texas, Oklahoma, Kansas, New Mexico, and
Colorado that contributed to this effort. They really have
stepped forward and been very proactive. I can't speak to why
in the end Fish and Wildlife Service made the decision. They
make the analysis they have, the trends they are looking at,
and in the end it is a trust species that they are responsible
for protecting; and that is not something NRCS was privy to or
I can't necessarily speak to what ultimately led to that
decision.
Mr. Neugebauer. Wouldn't you say there is a tremendous
amount of benefit for having these kind of partnerships and
coalitions?
Mr. Weller. Absolutely, yes.
Mr. Neugebauer. I think the concern I have is that this has
been very successful. Since 2014, the population has increased
20 percent in just 1 year. I think some of that is conservation
efforts. Obviously, we started getting a little rain.
What I am more concerned about is the disincentive that
this kind of action sets where you go out and enter into these
partnerships and bring these coalitions together, and the
reward that they get for that behavior is that the Fish and
Wildlife Service goes ahead and decides to list that. So I want
to make sure you are doing everything you can to make sure that
they have good science, good information, if you are working
with these partnerships.
Mr. Weller. Well one of the things, sir, I would just want
to highlight is I agree with you, and that is a big concern.
And so a lot of confusion, if not fear, around ESA, and so what
we try to do with the lesser prairie chicken but also with
sage-grouse and five other species around the country, is this
concept of regulatory certainty, predictability; and what we
are doing with the chickens is if you are a rancher and you
want help, you come in and visit with your local NRCS. We will
come out to your ranch, and we will provide you a conservation
plan, which will look at the specific threat to the chickens.
And as long as you are managing your ranch using that
conservation plan, you don't even have to go into a contract
with us. You can do it on your own. You don't need to work with
the government any more.
As long as you are managing your ranch according to that
plan, what Fish and Wildlife Service has then said is that you
get at least 30 years of certainty that you are not going to be
asked to do anything more for the chicken basically because you
have been recognized for your excellent stewardship.
So we are trying to reward folks, to your point, who are
willing to voluntarily take proactive actions benefit the
ranch, but also in this case benefit at-risk species, they
should get something in return, and that is to be able to sleep
at night not worrying about ESA.
Mr. Neugebauer. Well, I appreciate the regulatory
certainty. I think the bigger bonus and the bigger incentive
for cooperation is that if agencies and individuals and
corporations and farmers and ranchers are working towards a
reasonable conservation plan, that we should leave it at that.
Mr. Thompson [presiding.] Mr. Scott from Georgia.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. I
would follow-up with that and say somebody from the farm--I
remember the time when if you found a problem, you actually
would call somebody from the government because you wanted
help. Now I can assure you that that is the last person that
most farmers want to call. When it comes to conservation, that
is a problem. People don't trust us when we talk about prairie
chickens and other things. It seems to me that it is not about
the chicken as much as it is about stopping other industries in
certain areas.
I would just ask the one thing that we have heard about a
lot recently, Waters of the U.S., what do you expect the
workload for your agency to be if Waters of the U.S. becomes
the system that you have to operate under?
Mr. Weller. So first let me start with workload, and I will
get to your question about the Clean Water Rule, Waters of the
U.S. rule. In terms of workload, we have a lot. I am really
proud of how much NRCS has stepped forward with the 2014 Farm
Bill. In a matter of literally weeks after it was enacted into
law we were ready to roll. We had EQIP stood up and running. We
had CSP stood up and running. We did a nationwide sign-up. We
got another 10 million acres enrolled. We launched the new RCPP
in a matter of months. And that is on top of fewer people. So
because of sequestration cuts, today there are 1,500 fewer
professional NRCS employees than there were just 4 years ago.
So we have a lot of workload.
In regards to your question on the Clean Water Rule, at the
end this is an EPA/Army Corps of Engineers rule. What we offer
our customers when they want to work with us is advice. The
Clean Water Rule will not impact our work. What we do is
conservation compliance, but more importantly we do
conservation planning and implementation of farm bill
conservation programs.
And the Clean Water Rule does not impact any of those
authorities. So in instances where a producer is taking out a
fence row, cutting some trees, making alterations on their
operation, and our field folks think, well, maybe this is
something you may need a field permit for, we would then
recommend they go talk to the relevant Corps office. That is
not something we would necessarily advise them on how to do it,
how to fill out the permit, whether they are under jurisdiction
or not.
Mr. Austin Scott of Georgia. Let me interrupt for a second.
But you would agree that a lot of the reasons for the programs
that we have through your agency is so that there would be a
way to reduce the need for more regulations. Is that a fair
statement?
Mr. Weller. It is a complex environment. Regulations, yes.
It is a complex environment, particularly not just in Georgia,
a lot of different states. And so where our folks are trying to
help our customers navigate that, yes, it is challenging.
Mr. Austin Scott of Georgia. Mr. Chairman, I don't have any
further questions. I would just say it seems to me we have one
agency telling another agency what they can and can't do, and
then a tremendous amount of fear out there with the American
citizens that, quite honestly, most of us want to take care of
the environment, but I can tell you if I found something that I
thought might be an endangered species on my property, I sure
wouldn't call the Federal Government and let them know about
it. With that, I yield the remainder of my time.
The Chairman [presiding.] Probably not a bad idea before
you get yourself in trouble confessing to something you didn't
want to confess to. The gentleman yields back. Mr. Crawford,
for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman. In Arkansas, the
Mississippi River Basin Initiative has been a very effective
program in giving people at the state and local levels the kind
of tools that they need to deal with conservation challenges,
particularly specific to our region. You actually mentioned
that in your comments earlier.
In the 2014 Farm Bill, though, we created the RCPP, which
we had hoped would expand on that success, but it looks like a
lot of the policies in the MRBI have been reversed, and I am
being told there is actually a lot less local control and more
deference to national groups in what types of conservation
activities should be funded. Why the change in direction?
Mr. Weller. So with RCPP, I am a little bit surprised by
your comments, sir, in that it really affords maximum control
to those partners.
Mr. Crawford. If that is the case, why would I be hearing
from my folks at home? We have two projects in particular that
fall under this, and we are not hearing positive feedback with
respect to local control.
Mr. Weller. Then that is a real concern, and I need to
follow up with the Arkansas State Conservationist, because the
whole purpose of the program is to put the partners in at least
a co-equal lead with NRCS, if not in the lead, to devise the
project, to design what needs to happen, and then to really
deliver the assistance as needed.
There are different pots. There are different funding
pools. There is a national pool. There are what are called
critical conservation areas, and then there is the state pool.
And applicants from within Arkansas itself can focus on
projects just specific to certain communities, counties in
Arkansas; or it could be a multi-state project that would
include Arkansas and perhaps Louisiana and Mississippi or go up
river, up in Missouri.
So it depends on what the purpose of the original project
was. It is a very competitive program. But in the end if there
is a concern from local folks that there is less local control
than there was previously, that is something I need to follow
up with Arkansas on.
Mr. Crawford. Perhaps we can communicate offline and
address that problem.
Mr. Weller. Yes, sir.
Mr. Crawford. Let me expand on something that my colleague
from Georgia mentioned. The perception at home among farmers,
the NRCS has been up to this point the kind of agency that
farmers felt comfortable with in terms of asking for help,
technical help, funding help; for example, surface water
retention projects, tailwater recovery, irrigation reservoirs
and things like that. Not only did they get technical consult,
but in many cases were able to secure funding not necessarily
in total, but cost-share on a lot of projects. I have seen
these projects.
I have seen these projects, and they are great projects.
But because of WOTUS, the perception at home is now the
NRCS has been roped into this regulatory role that has
fundamentally redefined the dynamic of the relationship between
the NRCS and farmers. Your thoughts on that?
Mr. Weller. It is an unfortunate view. In my experience, in
my opinion, our role has not changed at all, and we need to do
a better job of communicating what our role is.
Mr. Crawford. Okay. So from a perspective of WOTUS, you
have no regulatory authority under WOTUS at all?
Mr. Weller. We do not, no.
Mr. Crawford. Okay. The perception is that you do, and I am
still not convinced that in some form or fashion, that you
don't, in some way, have a roundabout, maybe a reporting
requirement or something like that that may possibly impact the
relationships that up to this point, farmers have found very
favorable. The NRCS has been a very good agency to work with up
to this point.
But I just want you to know that the perspective of
farmers, at least in my district, is that the trust there is
not going to be there anymore, because of the relationship to
the EPA and WOTUS.
Mr. Weller. So to your point, sir, we hold the information
that a producer gives us voluntarily as sacrosanct. And this
Committee gives us privacy provisions that are even more
strenuous than other agencies. A lot of other agencies wish
they had privacy protections that USDA has with our customers.
We don't share that with anyone.
Mr. Crawford. Okay. Let me ask you this--I only have 30
seconds left--can you tell me, unequivocally that you don't
have any requirement to report to the EPA under any
circumstance as it applies to WOTUS or potential violation or a
significant nexus or connectivity or anything like that?
Mr. Weller. Unequivocally, we do not report our customers
to EPA. In fact, yesterday, in the Chesapeake Bay region, we
were highlighted by the newspaper because three states in the
Chesapeake Bay region, their departments of environmental
quality are calling us out for not cooperating, for giving them
farmers' information.
Mr. Crawford. Okay.
Mr. Weller. So we do not share information on farmers with
regulatory agencies.
Mr. Crawford. All right. Thank you. I appreciate that. My
time has expired. I yield back.
The Chairman. The gentleman's time has expired.
Mr. Allen, 5 minutes.
Mr. Allen. Thank you, Mr. Chairman.
And just real quickly, the RCCP program I have constituents
that, with the new farm program, there is an opt-out provision
in the new farm program. And I have been trying to get an
answer from USDA on this thing for some time, and the last
thing we heard from them was that they can't opt out because
the loblolly pine is now considered a hardwood. How did the
loblolly pine get to be a hardwood?
Mr. Weller. I am going to defer to my Under Secretary, who
is an expert in trees. But what I know, it is not hardwood.
That is the first I have heard that, sir. I could look into
what is going on.
Mr. Allen. Okay. Good. Well, maybe we could have a
discussion about that because you all are in the forestry
business. And I don't know how that happened, but anyway, that
was the letter that they received from the USDA is they could
not opt out because the loblolly is now considered a hardwood.
And so, well, that is good. I am glad that you all know that
that is the case. That is wonderful news.
Also, real quickly, you had announced the final projects
for consideration for the Regional Conservative Partnership
Program, RCPP, second signup. What lessons have you learned
from the first signup, and what types of partners are
participating in these projects? Are the goals of the program
being met? And what changes do you think Congress needs to make
with regards to this program?
Mr. Weller. So the first round, as I said a little bit
earlier to your previous question, we are moving, for us, at a
pretty quick pace. And as a result, we didn't leave a lot of
time for partners to put proposals together. I think we caught
people flatfooted. They didn't expect us to move as fast as we
did. And then we only gave them 45 days to throw together a
proposal, and then they didn't have a lot of time.
So that was the first thing we learned is that we needed to
give everyone, starting with ourselves, but more importantly
the partners, more time to put together comprehensive projects,
to call different partners to the table, and really design
something they really want to invest in. And that then also
gives them more time to leverage.
So what we are seeing with the second round, what we
invited back out of 265 applications this next time, we invited
back 164 projects, at least one in every state. Most states had
several. And what we saw is a higher level of quality in terms
of what people were proposing, because they had more time. They
had more experience. They had a feel for how the program works,
and, in some cases, how it doesn't.
And so people were even more careful in devising really
what they want to do. So if you are worried about fish passage
in the Northwest, if you are worried about soil quality, if you
are worried about irrigation efficiency, if you are worried
about endangered species habitat, they really were careful
about designing projects that would really bring a solution for
their community, for their area. And then what was very
impressive is they had a lot of matching contributions.
So in this next round, while out of the 164 we invited
back, the total what their request is from the Federal
Government from NRCS is about $540 million. They are actually
bringing to the table a total potential contribution of $780
million, so well over a one-to-one match, which is really
impressive, which just shows there is a real pent-up demand out
there for this type of assistance.
And when you, as an agency, step back and you invite people
to the table to design their own project, to really take the
lead, it is impressive what people bring forward.
Mr. Allen. And to follow up on that, because we have heard
comments about there seems to be some disconnect out there. Of
course, we go out in our districts, we have town hall meetings.
Do you have listening sessions throughout the country with
different farm agencies as far as what our farmers are having
to deal with out there versus what you are demanding that they
do?
Mr. Weller. Absolutely. In every state, we have what are
called a state technical committee where they meet once a month
and they invite in farm organizations, the public state
agencies, conservation groups, and they really talk about what
are the priorities in a given state. So what are their
concerns, whether it is drought, whether it is disease, pests,
soil erosion. It is a forum for the agricultural industry to
really talk directly to NRCS to say what their priorities are,
where they need help, and they meet regularly.
I personally get out and meet with farm groups. I travel a
lot. Wherever I go, I always want to meet with local producers
but also state associations. We have a national leadership
team. They are constantly engaging with regional groups, state
associations, corn grower association, cattlemen associations--
you name it. We really want to stay very connected to our
customers.
Mr. Allen. Well, as a son of a farmer, our farmers want to
protect the land, the forest. That is how they make their
living. And so we can work on that collaboration and do a much
better job. Thank you.
I yield back.
Mr. Weller. We will find out about soft wood becoming
hardwood, sir.
Mr. Allen. Good. I am glad I got you recorded on that.
The Chairman. I think there would be a lot of people
interested in how you convert loblolly pine to hardwood.
Mr. Abraham, 5 minutes.
Mr. Abraham. Thank you, Mr. Chairman.
Chief Wagner, I will ask you this question, but certainly
the other two may have answers. Hurricane Katrina hit Louisiana
about 10 years ago. We just, unfortunately, recognized that 10
year anniversary. Forest Service came in, did an NEPA study
within 60 days. I think within a month or 2, we were salvaging
timber. Things were working well, a very efficient process.
And I guess the question is, why has the timeline now gone
from the 2 months to over a year for an environmental analysis?
Because I have people in my district that are asking for an
analysis, and it has been over a year in some cases. So what is
the difference between 10 years ago, 2 month timeline for
environmental analysis, and now over a year? Is there different
personnel? What is going on?
Ms. Wagner. It may be that with a situation that Hurricane
Katrina brought on the landscape, we had provisions to deal
with emergency treatment and----
Mr. Abraham. But, if I remember right, and I can certainly
look back, that that contract was done without any
extraordinary clauses in the contract. It was just a, pretty
much a normal day at the office, so to speak, as far as getting
that done within that 2 month period.
Ms. Wagner. And so is it comparing emergency response to
just basic forest management and forest restoration today that
you are----
Mr. Abraham. I think that is the point, is back 10 years
ago when the Forest Service came in, there were no
extraordinary clauses, so it wasn't designated as an emergency
response even though we all know it was. But we move forward 10
years and now, also not deemed an emergency response. It has
taken well over a year just to get the analysis back. And I am
just asking for my constituents, because we get the calls, what
is the difference? How can we facilitate to expedite that
process for you guys?
Ms. Wagner. Excellent question. We are very committed to
using all of the tools available to us under the National
Environmental Policy Act to act quickly, to be adaptive, to use
the right kind of analysis for the right kind of situation. We
found that in the last 4 years, we have actually reduced the
number of NEPA analyses done and decisions done, so we are
getting better at larger-scale, fewer decisions. And we are
reducing the amount of time.
Now, that is nationally. I would be happy to follow up and
get you some more detail relative to----
Mr. Abraham. I appreciate that. We have some issues down in
the southern part of my district. Their perception is that they
are getting stonewalled, and I would just like to give them a
good, logical explanation to open up the discussion.
Another question that whoever wants to answer. I understand
the Chairman here and Chairman Lamar Smith back on the 1st of
July this year requested documents on the EPA's recent NAAQS
rule and its effect on the Forest Service burning. My
understanding, and please correct me if I am wrong, that they
got a response but they haven't received any documents. Is
there any timetable as to when those documents may be
forthcoming on this NAAQS rule?
Mr. Bonnie. I know the issue here is the ozone rule, right,
and the potential impacts on prescribed fire.
Mr. Abraham. Right. Right. Yes, on the controlled burn.
Mr. Bonnie. I don't know the exact--I know we have provided
a good bit of information to you all. We would be happy to go
back and check and make sure we have been responsive to your
requests. I will say, lots of conversations back and forth with
EPA on how to deal with this so that we can invest and
prescribe fire.
Mr. Abraham. I appreciate that.
And Chief Weller, I will ask you, what is the current
backlog for wetlands right now and the determinations as to
what determines a wetland or not, and how is that being
handled?
Mr. Weller. We have made a lot of investments in
accelerating in trying to reduce the backlog. Nationally, off
the top of my head, I do not know. I know where there has been
a lot of focus is a little bit north of this area, up in the
Prairie Pothole Region, where there has been a lot of focus of
this Committee and a lot of Members. The current backlog there
is around 4,000. That sounds like a lot and it is. It is not
acceptable. But where we were, 3 years ago, is the high as
12,000.
But what also folks have to understand is we have, since
that time, not only made a lot of progress, but we have also
processed tens of thousands of requests. So over that time
period has well been over 60,000 wetland determinations we have
made in that time, just in the Prairie Pothole Region, plus
reduced the backlog from 12,000 down to 4,000.
So it is sort of like being on a treadmill that is set at
sprint pace and still standing on the treadmill, if not getting
closer to the controls to hopefully hit the stop button. So we
are making progress, and we are on the track to get rid of the
backlog within the next 2 years.
Mr. Abraham. Great. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Mr. Yoho, 5 minutes.
Mr. Yoho. Thank you, Mr. Chairman.
I appreciate you all being here today.
Mr. Bonnie, you were talking about there were some
practices that you would recommend to prevent or decrease the
negative effect of forest fires. What are those? And then the
second question is, why aren't they being done now, and what do
you need to facilitate that?
Mr. Bonnie. So we have increased the number of acres for
treating across the National Forest System. We are doing more
projects out on the ground through collaborative, larger-scale
efforts.
Mr. Yoho. Projects like controlled burns?
Mr. Bonnie. Doing more prescribed fire, but as well,
thinning treatments, other types of restoration to remove
underbrush, small-diameter timber. As you know, in your part of
the world, we have taken fire out of a lot of the ecosystems.
In addition to getting the fire back in, we also need to do a
lot of mechanical treatment and thinning, and we are trying to
do that in a collaborative, larger-scale effort to increase
both the number of acres treated and the amount of board-feet
that come off of the National Forests.
Mr. Yoho. Okay. I live in the Southeast and we are blessed,
I mean, pine trees grow in 15, 20 years, whereas out West it is
a different story. And we do a really good job in the managing
of the forest. And one of the things we see out West, you have
the high wind velocities and all that and it is harder to do
your prescribed burns. What are you doing to address that
situation?
And along with that, we have heard from a lot of the
loggers that they can't go in and harvest the board-feet that
is already down. I don't know if it is the rules and
regulations of the permitting process, but there is a lot of
timber that is down that could be utilized that is not and that
leads to the underbrush in the fire. What are you doing to
alleviate that and expedite that process?
Mr. Bonnie. So let me hit the salvage piece first. There
are a number of things we can do--to get at a little bit the
question earlier--using some expedited procedures to try and
move, particularly near roads and trails, timber that can cause
a safety problem.
We moved a 300 million board-foot salvage sale in the wake
of the 2013 Rim Fire out on the Stanislaus through an expedited
NEPA process. We are trying to pilot efforts to do large-scale
salvage operations in places like that. We will have a
significant salvage issue in the wake of this fire season, and
so we are looking at ways to be creative to move those but to
do it with the best sound science as well.
Mr. Yoho. You just created another question for me. When
you are doing that and you are going down that road to harvest
those down trees, do you run into issues with the EPA and you
are fighting against them, or Army Corps or any other agency?
Mr. Bonnie. No.
Mr. Yoho. All right. So nobody else is restricting you,
right?
Mr. Bonnie. No. The bigger issue for us is to build a
collaborative effort to bring environmentalists, timber
industries, and others to the table so that we can create these
larger-scale projects that will have more public support.
Mr. Yoho. All right. You brought up the environmentalists,
and I want to go back to what Mr. Scott brought up when he
bowed out gracefully early. I have the same problem in my
district. I mean, we have gopher tortoises, we have the
rattlesnakes, we have the fox squirrels, and we have farmers
that have farmed for generations, 100 year farms. And they have
pretty much the same practices, obviously have gotten better at
best management practices.
But yet, now the government comes in and says, well, we
need to monitor these fox squirrels or this. And the farmers
don't want anything to do with it because they come in, they
being the government, say, ``We are here to help you,'' and we
all know how they run from that. And we are seeing the same
thing. It is, We don't want your help. Whereas before, people
came to the government.
And that is an attitude change. And you brought up the
environmentalists, and yes, we want the clean environment, we
want clean water, and we want clean air, but sometimes there is
a political agenda that we see driving a lot of this that is
counterintuitive or productive to our producers who are out
there trying to make a living. And it increases the costs and
it reduces the usability of their land. And that is something I
hope you guys take back in your discussions and say a little
bit of this is good, but a little bit is too much. We need to
back off here.
I have another question I wanted to ask. On the lands that
are going into the easements and the conservation easement, and
Mr. Weller, feel free to weigh in on this. What is the
percentage of land that has gone from the private sector back
to the government and off the payrolls? Because what we are
seeing in our state is we see a lot of this being put into the
conservation easements. And I don't want to get in a situation
in my state where we have PILT payments, payment in lieu of
taxes, and that lands are off the tax rolls.
Mr. Weller. So nationally, NRCS has either co-invested with
other land trusts and state agencies or on its own through the
wetland programs about 4 million acres of conservation
easements. Most of those are permanent, or is the maximum
allowed under state law. Those are still taxed but they are
just at a reduced rate. So it is no longer taxed at the
development potential. So if it was converted from an ag use to
non-ag use, you understand probably better than I do. It is
less of a PILT issue in terms of just not having any taxes at
all come off those lands.
Mr. Yoho. I yield back. I am out of time, Mr. Chairman.
Thank you.
The Chairman. Sure. The gentleman yields back.
Mr. Thompson, 5 minutes.
Mr. Thompson. Thank you, Mr. Chairman.
Mr. Bonnie, it is good to see you. I want to follow up on
the catastrophic wildfire season. It has been a terrible
season, obviously, and the loss of life of some very
outstanding Forest Service employees. We are certainly keeping
them and their families in our thoughts and prayers.
The Administration has been very vocal for the need to
provide more funding to combat wildfires and also to stop fire
borrowing from the Forest Service budget. As a matter of fact,
I see there is a press release today regarding the
Administration's letter to Congress addressing the budget
issue. And I agree there needs to be a solution, but fixing the
budget is not the final solution, certainly not the full
solution. However, addressing fire borrowing will not solve the
issue.
It is also very important the Forest Service have the
ability to expediently treat National Forest acres for forest
health and wild fire prevention. The Committee passed through
the House H.R. 2647, the Resilient Federal Forest Act of 2015.
Now, the legislation was an earnest attempt to give the Forest
Service more authority and much needed flexibility to deal with
these challenges of process funding, litigation, necessary
timber harvesting, and much needed act of management.
Now, the Obama Administration strongly opposes this
legislation, despite the fact in your testimony when you were
talking just most recently about a fire. You were using words
that were in that bill, collaborative, expedited, NEPA. I mean,
you were kind of describing the bill that your boss or your
boss' boss opposes, I guess, or you oppose. And so can you
explain the Administration's opposition to the bill?
Mr. Bonnie. I am happy to. So first, the most important
thing we can do to increase pace and scale is clearly to fix
the budget. Our criticism of the budget provisions in the
legislation is that they don't go far enough. You have done a
good job of solving the transfer problem, but the long-term
impact of fire in our budget, we expect that in 10 years we
will spend not 50 percent like we do now on fire programs, but
\2/3\ of our budget. That is going to impact our ability to do
all kind of things, including restoration.
Mr. Thompson. So let me cut to then--I get it. You want
more money. Is there anything in this legislation or are there
other ideas the Administration can support--and I am going to
say beyond money, okay. Not to say that we don't need to look
at that, but I am looking for ideas beyond that that would
assist the Forest Service in actively treating forest acres?
Mr. Bonnie. Absolutely. We welcome the conversation. As the
Statement of Administration Policy said, we have some concerns
with sort of the design and scale of some of the provisions
related to NEPA, some other things. But we are willing to have
a conversation. I put things maybe in a few different buckets.
One is a conversation about NEPA categorical exclusions, maybe
similar to the insect and disease provisions.
Mr. Thompson. I think we had categorical exclusions in this
bill that you oppose.
Mr. Bonnie. I think we would design them differently.
Second, there are things we can do to promote larger landscape
scale projects. There are some things there we can do.
Promoting markets is another key thing that we can do. There
may be some flexibility around----
Mr. Thompson. I agree wholeheartedly. But this was a forest
management bill. Certainly markets and doing things to increase
value timber to support the markets, those are the things we
can do and certainly are going in the trade agreements being
negotiated. But I still--you are not convincing me--I haven't
heard a good reason to oppose this bill yet.
Mr. Bonnie. Well, I guess my message to you would be, we
have to do a lot more on the budget side, and the budget piece
we design is budget neutral.
Mr. Thompson. Yes. Let me share some numbers with you. And
these are numbers actually from your testimony or from, maybe
it was a press release, but although you made reference to it.
1995, \1/6\ of the Forest Service budget was used for fighting
forest fires; August of 2015, \1/2\ the budget, and then you
made a projection for the future.
I would happen to agree with you, the trajectory we are on.
And I know part of it is warmer temperatures, but part of it is
just sort of allowing the fuel load to build up way too high.
Mr. Bonnie. Absolutely.
Mr. Thompson. I want to go back and readdress the numbers.
1995, where you spent \1/6\ the Forest Service budget, you
harvested 3.8 billion board-feet. Just in 1987, prior to that,
7 years prior we harvested 12.7 billion board-feet. In August
of 2015, where this year, \1/2\ the Forest Service budget is
consumed in wildfire fighting, you only harvested 2.4 billion
board feet.
I really want to look at the root cause of this. What are
those implications in terms of, number one, fuel load? And
number two, I would put on the table that I don't know what the
average--and I know there is a wide range--the average value of
a board-foot saw log harvested from a National Forest. I know
it is a wide range, but certainly there is a number there.
Whatever that number is, I mean, it has to be a huge amount of
lost revenue when you think that we have lost, based on the
high, we are not harvesting this year 10.3 billion board feet.
You know, you were looking for more revenue? You are
sitting on a resource that produces revenue if you are doing
the job. And if you are producing a revenue, you are taking
away the fuel load. And I would argue that is the biggest
problem we have.
And so those are--I know I am way out of time, but I will
look forward to talking with you more about those. This is
obviously--we are going to be doing a hearing in the
Subcommittee on Forestry, on October 6, coming up here soon. So
we will----
Mr. Bonnie. I know I am out of time. I would just share, we
share your interest in increasing the pace and scale of
restoration absolutely and welcome the conversation. We think
the budget is obviously a critical part of it, but there are
other pieces as well.
Mr. Thompson. Restoration is surrender treatment. The word
treatment is surrender, because that means you have allowed a
problem to be created. We need to be proactive. That is saw log
harvesting.
Mr. Bonnie. That is certainly part of it.
Mr. Thompson. Well, I would say it is a big part of it. It
is preventing problems from occurring and developing.
Sorry, Mr. Chairman.
The Chairman. The gentleman yields back.
Mr. Moolenaar, 5 minutes.
Mr. Moolenaar. Thank you, Mr. Chairman.
I wanted to ask you, are you the lead agency when it comes
to designating wetlands? Would that be your role?
Mr. Weller. I have to be careful how I answer that
question. It depends on, if it is for participating in a USDA
program, we are the agency that determines whether it is a
wetland or not, yes. For purposes of the Clean Water Act, no,
we are not the agency that determines whether that is a
wetland.
Mr. Moolenaar. Okay. So that is where, when you said that
you don't have expanded responsibilities with the Clean Water
Act, that is that differentiation, okay.
Would you agree that under the new EPA rule that their
jurisdiction has expanded?
Mr. Weller. I can't speak to their jurisdiction. I really
have to defer to EPA and their definition of their
jurisdiction.
Mr. Moolenaar. But I mean, you talk to a lot of farmers.
You probably talk to a lot of people. Wouldn't you say their
jurisdiction is expanded?
Mr. Weller. I have heard a lot from producers of concerns
about the jurisdiction and the potential expansion of that. And
I know EPA and the Corps are trying to put together
information. They have done a lot of outreach with the
producers, with the farming community and ranching community to
help provide education, provide more information about what is
or is not covered by this proposed or now the final rule.
But in terms of whether jurisdiction has expanded or not, I
really--I have to defer to EPA on that.
Mr. Moolenaar. Okay. And what are you hearing from people
when you hear about this rule? Is it positive? Because the EPA
would say that their goal is to clarify. Is that your sense?
Are you hearing that?
Mr. Weller. I know EPA's goal was to try and clarify
jurisdiction. I have heard from producers across the country a
lot of concerns and questions about what is or is not covered.
Mr. Moolenaar. Would you estimate that there will be a
greater need for Federal permits because of this rule, if you
are a home builder or someone who isn't participating in the
program that you oversee? Do you think this will lead to a need
for greater permitting?
Mr. Weller. With respect to agriculture, I do not expect
there to be a significant increase in the amount of permitting
required. All the protections for farming that have been in
place previously are still in place. All the protections for
conservation, particularly uplands, conservation practices are
still in place and are exempted.
So by and large, there is not a significant expansion of
need to do permitting. But at the end of the day, we are not
the permitting agency. That is going to have to be the Corps or
EPA to determine what is or is not.
With regard to home building or general construction or
other expansion of infrastructure, again, I am not an expert in
that arena. I can't speak to that.
Mr. Moolenaar. And it seems like they have introduced some
new definitions that many people in the--when I talk to the
farmers in my district, they are worried that the EPA is going
to regulate the mud puddles, the ditches, everything. They are
very concerned about it. And are you saying that they aren't
going to have jurisdiction over those areas in agriculture?
Mr. Weller. EPA has tried to define what is a ditch, first
of all, and what is covered. I think from EPA's standpoint,
they don't have the capacity, interest, or they do not want to
have to go out and regulate mud puddles or ditches. They know
that is beyond their capacity, and that is not really the
issues they are trying to address with the Clean Water rule.
They try, to the best of their ability, and I guess from
your line of questioning, it seems like they have a little bit
of ways to go--but they try to the best of their ability to
really make it as clear as possible what is covered and what is
not. But, again, I have to defer to EPA as to how well of a job
they did on that. And the feedback that you are receiving
apparently and that I have heard also from the agricultural
community, they have some work yet to do.
Mr. Moolenaar. Well, I guess that would be my question to
you is, to what extent can you advocate for agriculture in this
regard? Because, as I look at my district and hear from farmers
in my district, this is the number one concern. And I don't
think they believe that EPA is speaking for them. And the
question would be: is that something, a role that you can take
on?
Mr. Weller. We do advocate for agriculture at U.S.
Department of Agriculture, and we have provided technical
assistance to EPA and to the Corps when they were designing the
rule. Some aspects of that assistance they took; some they did
not. But throughout the rulemaking process, we did, as a
Department, NRCS, the Secretary's Office, other offices and
agencies within USDA, did engage with and try to provide
technical advice to EPA and the Corps as they designed the
rule.
And then throughout that, we really tried to bring a
commonsense approach in, here is what production agriculture
looks like, here is the facts on the ground, and here are the
implications of what--in terms of different decisions they are
considering, here are the implications for agriculture. So we
really did, as a Department, try to advocate for and speak for
agriculture.
Mr. Moolenaar. And do you believe it is successful for
agriculture, this new rule?
Mr. Weller. I guess it remains to be seen at the end how
well it is implemented and what its true impacts are. I have to
take EPA, from their comments, that they really do view this as
not impacting agriculture significantly, but that, I guess,
remains to be seen.
Mr. Moolenaar. Thank you.
Thank you, Mr. Chairman.
The Chairman. The gentleman yields back.
Mr. Gibson, 5 minutes.
Mr. Gibson. Well, thanks, Mr. Chairman.
I appreciate the panelists being here today.
The first question I have, really a comment, we have in our
district a major EWP project. NRCS, thank you very much for
your help on that. This is in Schoharie County in upstate New
York, and a $24 million investment. I want to thank you for
that.
Our area was devastated by Hurricanes Irene, Lee, and to a
degree, Sandy. And so clearly we need to take some proactive
measures to help protect people and property, going forward. So
I really want to express my gratitude that you agreed and were
working this project.
I suspect you probably know we are having some challenges
with the project. I am working as a broker in this to really
get this done. You guys are rightfully ensuring that we are
going to do this to the standard, and I appreciate that after
29 years in the military.
And from my local folks, they are feeling a little bit
picked on from time to time. We are sorting through the details
of that to make sure that they understand what the standards
are with the ultimate goal of making sure this gets done. What
I am just looking for today is just acknowledgment of how
important this project is and that you are in, you are
committed with us to getting this done.
Mr. Weller. Absolutely, sir. We are provided this program
and these resources to help communities. They are locally-led
projects, and we are there, but for the invitation to help
those communities. So we want this project, in particular, to
be successful. And we do appreciate your help in helping to be
that intermediary to help us understand, but also to help work
with the local project sponsors as well, and we are committed
to seeing this be successful.
Mr. Gibson. Well, I appreciate that, because rumor control,
as I hear that every now and then. Some folks on the ground
think that you are going to leave them, and I assure them that
you are not; that you are insisting on standards--and again, I
understand standards--but that you are committed to working
together to make sure we get done to standard.
Mr. Weller. And the standards are really important.
Sometimes they may sound bureaucratic, but at the end, they are
actually for people's protection; that if we are putting in
structural implements, if they fail, that could be a risk to
people's property or their lives. They have to be designed and
something that we can stand behind.
Mr. Gibson. And we understand that. And thank you for your
assurances that we are committed to working together on that.
The second question I have has to do with the Forest Legacy
Program. So I have a bill that looks explicitly at the
management of easements for forest legacy with the move in the
bill to allow for more local control for states to make the
decision as to whether or not they want land conservancies to
manage these easements. I am familiar with the history of this
in the last 10, 15 years or so, and some reports that were
rendered with regard to challenges.
From my research, it appears that we have learned from
those challenges and that it may be to the benefit of all, that
being those that support this program, those that benefit from
this program, and the taxpayer, that a bill thusly designed
should become law. I am curious to know if you know of it and
what your thoughts are on these ideas?
Mr. Bonnie. So, I am aware of the issue. Obviously, haven't
seen the specific piece of legislation, so don't want to
comment on that. We have had a number of people approach us
about this issue and interest in the role that local land
trusts and others can play in the Forest Legacy Program. We
welcome the conversation.
Frankly, there have been folks on both sides of this issue.
The Forest Legacy Program has worked well to keep forests and
forestry, and we want to continue that. I think we would
welcome the conversation to sit down with you and explore this
further.
Mr. Gibson. Well, I look forward to that. The analysis that
I have and the testimonial I have received is that we can
actually get more value out of this and allow this money to go
further, and to really get a fuller benefit in there. So thank
you for your interest in that, and I will work with my great
Chairman on that one as well.
So Mr. Chairman, with that, I yield back.
The Chairman. The gentleman yields back.
Mr. Benishek, 5 minutes.
Mr. Benishek. Thank you, Mr. Chairman.
Thank you all for being here this afternoon.
I want to follow up on a few questions that my colleague,
Mr. Abraham and Chairman Thompson mentioned as well, because
they are concerns to me. I represent the northern half of
Michigan. We have three Federal forests. It is a big part of
our economy, not only our recreation, but the timber
management.
And some of the things we see in value for the resource of
the forest, which you all are managing for the American people,
to me, this is a resource that provides income and jobs for the
community. I would like an answer to a couple questions. In
response to Mr. Abraham's question about the forest and then
the salvage of the fire, so how many acres of timberland have
burned in the last 10 years? And then how many of those acres
have actually been treated for salvage?
Mr. Bonnie. I can't give you an answer to that question off
the top of my head. I will say, this year we burned 8.8 million
acres, that is forestland and rangeland as well. The numbers
are high. And, in some cases, it makes sense to do salvage; in
other places it is either too remote or otherwise to think
about it.
Mr. Benishek. Well, that would be a great answer for me to
understand that a little better, because it seems to me that
some of the things that came up today related to the salvage
issue.
The other question I have is similar. To me, this fuel load
is an issue, okay, and how many acres of burn compared to how
many acres that we have harvested in the last 5 years? What is
the story there?
Mr. Bonnie. Annually, we are burning north of 7 million
acres a year. In terms of treatments in the Forest Service, I
look to my left a little bit, we are in the neighborhood of 2.9
million acres somewhere.
Ms. Wagner. Across all restoration, it is probably around
250,000 of mechanical treatment for timber sales.
Mr. Benishek. So much more land is burned than has been
harvested, sounds like----
Mr. Bonnie. That is right.
Mr. Benishek.--that order of magnitude.
And to Mr. Thompson's question about getting more harvest
into the forest, what have you done? What I hear from different
people in your agencies and outside is that because of
budgetary issues, they can't get more harvesting done. And
because of the way that the cuts are mandated to be done, it
actually costs the Forest Service more money than they make by
selling trees. And I always thought when you sell trees you
make money, but apparently the Forest Service does not.
And what have you done in the last 3 years to improve the
process by which sales occur to maximize the resource of the
American people? Because I don't want to see this--the process
cost more money than the actual, when I am a forest owner and
people own land elsewhere that harvest the forest in a very
satisfactory way the third party observations and all that and
they actually make money. But you folks can't seem to do that.
So to me, it should be easy to harvest the trees because
you can be making money at the same time. So can you go into
that a little bit for me, please?
Mr. Bonnie. So I will start off and then Mary can fill in.
So we have increased the amount of timber harvest since 2008 by
about 18 percent. Last year we harvested about 2.8 billion
board-feet. And we have clearly stated that we need to do more.
We agree with you; there is more land to treat.
In terms of new things that we have done, we have invested
in a larger-scale landscape projects. We have done a project
across 1 million acres in Arizona. I mentioned earlier the Rim
Fire project, so we are trying to----
Mr. Benishek. Let me just comment on that right away, that
in my district, it is difficult for the people that want to
harvest to get into a deal because they can't make a deal for
10,000 acres. They need some smaller deals----
Mr. Bonnie. Yes.
Mr. Benishek.--that the loggers can get into easier. So I
applaud your effort there, but it has made it harder for people
in my district to actually cut trees down in the Federal forest
because of maybe rules like you are talking about.
Mr. Bonnie. Well, so we can choose the sale. We can do
smaller sales. I didn't mean to suggest we are only doing
larger. Absolutely right.
The other thing I would say about value is there are
clearly places where timber sales are going to pencil out in a
positive way. I would also say that there are places where
either the markets aren't robust or we have small diameter
timber that we have to go in and remove, that the economics
aren't as good. There aren't places----
Mr. Benishek. Everybody understands--I mean, at least, I
understand the forest. You cut areas out you can make money in.
But there are a lot of those areas in the forest that aren't
being harvested now. So how can you improve that process, going
forward, and then how can I improve it?
Mr. Bonnie. I agree with you that we need to do more work.
As I noted earlier, I am willing to have a conversation about
are there authorities and things we can look at. I will come
back to the point that the most important thing, most of the
biggest constraint on our ability to do work is the lack of
capacity. And that lack of capacity comes from the shift of
non-fire resources into fire. And if we don't do something
about that problem, it is going to be harder for us to do all
kinds of things, including forest management.
Mr. Benishek. I think I am out of time though.
The Chairman. The gentleman's time has expired.
Chief Wagner, one final comment real quick. We need to get
to the other panel.
Ms. Wagner. I might just add that timber harvest does
increase despite the fact that our staff has decreased by \1/3\
since 1998. We are finding a lot of efficiencies to sell a
board-foot of timber at reduced costs, so we found efficiencies
internally.
With our National Environmental Policy Act efficiencies, we
have also, based on scale collaboration, we have exciting
ventures where we are using adaptive approaches with insects
and disease where we are forecasting a future 5 to 10 years out
without having to do additional NEPA.
Congress has also given us authority for the collaborative
Forest Landscape Restoration Program, 23 projects across the
nation. They are accelerating the reduction of fire risk,
improving forest health, eradicating noxious weeds and
producing board-feet, creating jobs as well. So those are on
track to meet their 10 year goals.
And the authorities through the farm bill, insects and
disease authority, good neighbor authority, and permanent
stewardship contracting authority. So we have a great set of
tools, and we are making the most of the resources that we
have.
The Chairman. I want to thank Secretary Bonnie; thank you,
Chief Weller; and Chief Wagner, thank you. I think you have all
so graciously agreed to meet with Members privately in 1306
while we transition. So, again, thank you very much for coming
in today. I know it is a hassle. We appreciate it. If you all
will go down to 1306, Members who want to have a quick
conversation with you individually will do that, and then we
will get the other panel in.
So we stand in recess while we swap out the panels. Thank
you all very, very much.
[Recess.]
The Chairman. Okay. Let's go ahead and start.
I want to welcome my third panel. The good news is, the
Department of Labor's overtime rules aren't going into effect
until January. So it probably wouldn't apply to you guys
anyway. I think some of us are going to try to stop that
anyway.
So anyway, I want to welcome our third panel. Thank you
very much for being here this afternoon. We have today with us
the Honorable Catherine Woteki, who is the Under Secretary for
Research, Education, and Economics, USDA. Thank you for being
here.
We have Dr. Chavonda Jacobs-Young, who is Administrator at
the Agricultural Research Service. Thank you; Dr. Sonny
Ramaswamy, who is the Director of National Institute of Food
and Agriculture; Dr. Mary Bohman, who is the Administrator for
Economic Research Service; and we have Renee Picanso, Associate
Administrator for the National Agricultural Statistics Service.
So thank you very much for being here today.
Under Secretary, the floor is yours.
STATEMENT OF HON. CATHERINE WOTEKI, Ph.D., UNDER
SECRETARY, RESEARCH, EDUCATION, AND ECONOMICS, U.S. DEPARTMENT
OF AGRICULTURE, WASHINGTON, D.C.;
ACCOMPANIED BY CHAVONDA JACOBS-YOUNG, Ph.D.,
ADMINISTRATOR, AGRICULTURAL RESEARCH SERVICE, USDA; SONNY
RAMASWAMY, Ph.D., DIRECTOR, NATIONAL
INSTITUTE OF FOOD AND AGRICULTURE, USDA; MARY BOHMAN, Ph.D.,
ADMINISTRATOR, ECONOMIC RESEARCH SERVICE, USDA; AND RENEE
PICANSO, ASSOCIATE
ADMINISTRATOR, NATIONAL AGRICULTURAL STATISTICS SERVICE, USDA
Dr. Woteki. Thank you, Chairman Conaway.
The Chairman. Microphone. The microphone. You will need to
pull it closer.
Dr. Woteki. I know how to operate these things, yes.
The Chairman. We will have to have you up here more often
so you can get better trained.
Dr. Woteki. Chairman Conaway, distinguished Members of the
Committee, it is really our honor to be testifying before you
this afternoon about the research, education, and economics
mission area.
As you noted, Mr. Chairman, I am accompanied by the leaders
of the four agencies within this mission area, and I request
that our written testimony be entered into the record, and I
will briefly summarize that testimony.
The Chairman. Without objection.
Dr. Woteki. The United States, as well as the world, is
facing a food security challenge. Investments in research are a
critical factor in our ability to provide the future
generations with food and provide the additional services that
will be demanded of agriculture.
The REE mission area agencies conduct and sponsor research
our country needs to keep our food supply safe, secure, and
abundant; to ensure profitability to our farmers and ranchers;
to improve nutrition and food safety for lifelong health; to
reduce pollution related to agricultural practices; to
safeguard natural resources, and to address our nation's energy
needs.
The four REE agencies play important and complementary
roles in developing the scientific understanding to tackle
these issues. ARS, with its network of 2,000 scientists at 90
different locations across the country, works to protect
agriculture and transfer its research results to the
marketplace.
NIFA funds research at universities that integrates
research, education, and extension to ensure that
groundbreaking discoveries go beyond the laboratory and make
their way to farmers, ranchers, classrooms, and communities
where Americans can put this knowledge into practice to improve
their lives.
ERS performs economic research and analysis that guide
program and policy decisions throughout the Department, and
NASS conducts numerous surveys as well as a Census of
Agriculture issues over 400 reports annually that provide
accurate, timely, and useful official statistical data on
national, state, as well as county levels about production,
supply, price, and other aspects of U.S. agriculture.
The land-grant universities are valued partners in all
these research, education, and statistical activities. REE's
work in the food and agricultural science is based on the
premise that the Federal Government has a role in advancing
scientific knowledge to promote our nation's social and
economic well-being. REE does this by investing in areas in
which for-profit industry does not invest, and a good example
of this is fundamental science, or also called basic research.
It also collaborates with the public-sector academia and the
private-sector to amplify research outcomes and impacts.
The 2014 Farm Bill has been very important to us. In it,
Congress underscored its interest in developing public-private
partnerships in the agriculture, research, education, and
extension realm through four different initiatives: Matching
funds provision that encourages prospective NIFA grantees to
partner with land-grant universities; the facilitation of
commodity promotion boards participating in NIFA's competitive
grants program; incentivizing a research consortia to form
centers of excellence and to apply for selected NIFA grants;
and also, Congress created a new private not-for-profit
foundation for food and agricultural research.
In keeping with the Administration's effort to break down
silos, the REE agencies are actively encouraged to seek
efficiencies, collaborate, and to form partnerships. And one
example of this approach is the way that we have been
addressing highly-pathogenic avian influenza. ERS has been
assessing the impacts of this disease on domestic and global
poultry markets.
NIFA has been supporting university researchers in
extension education to develop new tools that help producers
better prevent, control, and manage this year's outbreaks. And
ARS scientists have been working in connection with APHIS, not
only to identify the specific strains involved, but also to
develop a vaccine against the virus as well as better detection
technologies.
Our written testimony provides additional examples.
In closing, Mr. Chairman, despite the significant efforts
by recent farm bills and the annual spending bills to
restructure, reorganize, reauthorize, repeal outmoded
provisions, agriculture science in the United States is really
at a crossroads. It is no secret that the American research
enterprise needs additional resources.
Our written testimony makes reference to an ERS analysis,
indicating that a small increase each year in real term, about
a one percent increase in the research of that investment,
would yield an 80 percent increase in agricultural productivity
by the year 2050.
So, Mr. Chairman, we thank you for the interest that this
Committee has in agricultural research, education, and
economics. And my colleagues and I are eager to answer any
questions you might have. Thank you.
[The prepared statement of Dr. Woteki follows:]
Prepared Statement of Hon. Catherine Woteki, Ph.D., Under Secretary,
Research, Education, and Economics, U.S. Department of Agriculture,
Washington, D.C.
Chairman Conaway, Ranking Member Peterson, and distinguished
Members of the House Agriculture Committee, I am pleased to appear
before you to provide an overview of the activities of the Research,
Education, and Economics (REE) mission area of the United States
Department of Agriculture (USDA), highlight some of our recent success,
and share some insight on the priorities for the coming years.
I am accompanied by the leaders of our four agencies: Dr. Chavonda
Jacobs-Young, Administrator of the Agricultural Research Service (ARS),
Dr. Mary Bohman, Administrator of the Economic Research Service (ERS),
Ms. Renee Picanso, Associate Administrator of the National Agricultural
Statistics Service (NASS), and Dr. Sonny Ramaswamy, Director of the
National Institute of Food and Agriculture (NIFA).
The United States and the world are facing critical problems and
opportunities. Global population is expected to reach nine billion
people by 2050, almost two billion more people than today. At the same
time we are seeing the impacts of climate change, impacts that will
only get worse. These are among the challenges that all of us face.
Investments in research are a critical factor in meeting these and
other challenges and opportunities, and it is the REE mission area
agencies that support the critical research our country needs to keep
our food supply safe, secure, and abundant, ensure farm profitability,
improve nutrition and food safety for lifelong health, reduce pollution
and improve the environment through climate friendly practices,
safeguard sustainable use of natural resources, including an abundant
and safe water supply, and address our nation's energy needs. For
instance, ARS with its network of 2,000 scientists at nearly 90
laboratories across the country works to enhance and protect
agriculture as well as transfer research results to the marketplace
where they serve the needs of a wide range of users. By funding
research at land-grant universities, as well as other universities and
organizations, NIFA integrates research, education, and extension to
ensure that groundbreaking discoveries go beyond the laboratory and
make their way to the farms, ranches, classrooms, and communities where
Americans can put this knowledge into practice and improve lives. The
economic research and analysis work of ERS guides policy throughout
government and provides vital information to consumers, other
researchers and the marketplace. NASS conducts numerous surveys and
issues over 400 reports that provide accurate, timely, and useful
official statistical data on national, state and county agricultural
estimates covering production, supply, price and other aspects of the
U.S. agricultural economy. Farmers and ranchers, governments, commodity
markets, businesses, and researchers are among those who depend on
these statistics to make informed decisions.
We have a rich history of the agricultural sciences in the United
States and I would like to provide you some context for the ongoing
work within the mission area.
The agricultural research and education system of the United States
started in 1862 with President Abraham Lincoln signing into law the
creation of a new Department of Agriculture with the mission to promote
scientific agriculture and the propagation and distribution of seeds.
The passage of the Morrill Act in 1862 established the land-grant
university (LGU) system. In creating the land-grant system, a whole new
generation was allowed to gain access to post-secondary education in
the United States, ensuring that higher education would nevermore be
only for the elites. Congress expanded this family of land-grants in
1890 to serve the educational needs of the African American communities
and, in 1994, to serve Native Americans in welcoming Tribal
universities and colleges. Just 2 months ago, on July 15, 2015, this
Committee hosted the Presidents of 1890s land-grant universities at a
historic hearing to celebrate the 125th anniversary of the passage of
the Second Morrill Act.
Congress passed the Hatch Act of 1887, which created the State
Agricultural Experiment Stations. These experiment stations contributed
to many key discoveries in agricultural science. In 1914, the Smith-
Lever Act was signed into law, which created the Cooperative Extension
Service as a unique Federal, state, and local partnership to translate
knowledge into innovations and solutions that advanced economic and
social progress in American agriculture and rural America.
REE's work in the food and agricultural sciences is based on the
premise that the Federal Government has a role in advancing scientific
knowledge to promote our nation's social and economic well-being. REE
does this by investing in areas in which for-profit industry does not
invest, such as basic research. It also collaborates with the public-
sector, academia, and the private-sector to amplify research outcomes
and impacts. Underinvestment or the absence of investments in food and
agricultural sciences diminishes the needed foundational knowledge-base
and impacts our nation's global preeminence and economic well-being. It
is with these goals in mind, that the REE mission area agencies
establish their priorities and conduct their work.
These priorities are determined through a rigorous and extensive
process that incorporates the direction provided by this Committee
through its 5 year authorizing farm bills, the annual appropriations
bills, and related governance statutes set in place by Congress and
guidance provided by the President. REE agencies have their 5 year
strategic plans, which are aligned with the Department's plans. Input
is also solicited from many different types of stakeholders throughout
the planning process. These stakeholders conduct or use agricultural
research, education, and economics services provided by or for the
agencies and include representatives from commodity groups, industry,
interagency Federal working groups, scientific societies, and
university partners. Stakeholders also include the Congressionally-
established REE external advisory committee, the National Agricultural
Research, Extension, Education, and Economics Advisory Board
(NAREEEAB).
In the 2014 Farm Bill, Congress underscored its interest in
developing public-private partnerships in the agricultural research,
education, and extension realm through three different policy
provisions discussed below. These provisions enable the REE agencies--
in particular, NIFA--to partner with its stakeholders and foster
increased collaboration between academia and the private-sector.
Three specific examples of these provisions are: (1) the matching
funds provision which encourages prospective NIFA grantees to partner
with land-grant universities when applying for a NIFA grant; (2) the
facilitation of commodity promotion boards' participation in NIFA's
signature competitive grants program, the Agriculture and Food Research
Initiative; and (3) the incentivizing of research consortia to form
`centers of excellence' and apply for selected NIFA grants in a
collaborative manner. In addition, Congress created the new, private,
nonprofit Foundation for Food and Agriculture Research which must match
its initial Federal seed contribution of $200 million with an equal
amount from non-Federal sources before underwriting research. The
Office of Technology Transfer (OTT) nested within ARS serves all of
USDA in its work with the private-sector. Organizing public-private
partnerships, as the 2014 Farm Bill has done, ensures that more public
funds are leveraged with private-sector dollars to make the most of the
taxpayer investment.
As important as identifying priorities are in providing strategic
direction, this represents only part of REE's success model. The
ultimate measure of success is not just the number of research projects
we are working on, the number of surveys in the field, or the number of
grants awarded. The REE agencies measure their success by the outcomes
of their work. This evidence-based orientation forces us to examine how
our efforts are helping change the landscape of the American food and
agriculture enterprise.
Take for example the efforts of ARS, which views its work as
bookending the research spectrum--exploring fundamental topics that can
eventually be transferred to the private-sector in order to be
commercialized as a way of improving the public good. Examples include
the mosquito repellent DEET, Lactaid for the lactose-intolerant, the
variety Roma tomatoes (which is still the main variety used for tomato
paste), red seedless grapes, and disease-resistant, high-yielding
sugarcane, are additional examples of ARS's contributions. In Fiscal
Year 2013 alone, ARS scientists advanced 75 inventions towards the
patent process and were responsible for over 4,400 scientific
publications.
In the same vein, NIFA measures its success through the impacts of
its grants on the public good. Through the integration of research,
education, and extension programs totaling about $1.5 billion, NIFA
ensures that innovative solutions are found to problems in food and
agriculture and that these solutions go beyond the laboratory, into the
classroom and into our communities. For example, a team of NIFA-funded
scientists from the land-grant universities, ARS, and the dairy
industry have developed a new genetic test that can assess an animal's
traits immediately after birth. About 10,000 animals were genotyped,
and researchers used the data to develop a new breeding selection
method called genome selection. The genome selection method
simultaneously reduced animal selection time (from 5 years to 1 week)
and increased prediction accuracy by more than 30 percent for most
traits. The dairy industry quickly adopted this technology and has
since genotyped more than 500,000 dairy cattle for estimated annual
benefits of $100 million per year. Success in this Maryland-based
program has led to projects that aim to develop similar genotyping
tests for beef cattle. As another example, NIFA's impacts include a 5
year project at Iowa State University to investigate how heat stress
affects a pig's metabolism and performance. Heat stress is one of the
costliest issues in the U.S. pork industry. Researchers at ISU are
investigating how heat stress can influence a pig's fetal development
and postnatal life, including the ability to develop and grow. The
knowledge this study provides will become increasingly valuable as
producers work to mitigate severe summer temperatures.
Finally, NIFA research investments at Oregon State University have
resulted in the creation of an environmentally friendly wood adhesive
made from soybean flour. By replacing conventional adhesive, plywood
production plants have reduced the emission of hazardous air pollutants
by 90 percent.
These are just a few examples of results from two of the largest
REE mission area agencies. Despite their relatively smaller size, the
remaining two REE agencies--NASS and ERS--provide an essential service
that policymakers, regulators, markets, and academics rely on every
day.
For instance as I mentioned earlier, NASS's mission is to provide
timely, accurate, and useful official statistics in service to U.S.
agriculture. NASS achieves this through two separate appropriated
program areas: the Agricultural Estimates program and the Census of
Agriculture and its follow-on studies. The Agricultural Estimates
program provides critical supply, production and price data that is the
foundation of the commodities market and critical to the coordination
of damage and loss assessment of the crop insurance program and
disaster assistance. The Census of Agriculture serves as the benchmark
of the structure of agriculture in the U.S. and is critical to
formulation of agriculture policy. The Agricultural Estimates program
issues over 400 reports annually, providing U.S., regional and state
estimates on a wide range of crop and livestock commodities, in
addition to estimates of environmental issues, economics and
demographics. The quinquennial Census provides very detailed statistics
at the county, watershed and Congressional district level. Additionally
under this program, NASS conducts in-depth studies on topics like
irrigation, horticulture, organic farming and aquaculture.
The Economic Research Service also reaches far beyond the borders
of USDA. The mission of ERS is to inform and enhance public and private
decision making on economic and policy issues related to agriculture,
food, the environment, and rural development. Although ERS research
programs are aimed at the information needs of policymakers, its
information and analysis is also used by the media, trade associations,
public interest groups, and the general public. ERS studies are widely
recognized in the research community for its credibility, timeliness,
and use of cutting edge data, models, and methods.
Rather than make recommendations, ERS designs its research to
demonstrate to its users the consequences of taking alternative policy
or programmatic pathways. In fact, in recognition of this `arms-length'
role, along with NASS, ERS is also another of the 13 OMB officially
designated Federal statistical agencies. As principal Federal
statistical agencies both NASS and ERS provide data that are relevant
to policy issues, maintain credibility among data users, maintain the
trust and confidentiality of data providers and the independence from
political and other external influence.
In keeping with the Administration's effort to break down silos,
REE agencies are actively encouraged to seek efficiencies,
collaborations, and partnerships with other agencies in the REE mission
area and the Department. For example, ERS relies on NASS data for its
Farm Income Estimate research; ERS provides ARS with social science
research and analysis that guides some aspects of ARS' priority
setting; ARS and NIFA routinely work together on research projects that
have both intramural and extramural components. The REE mission area
works broadly across the Department and with other Federal agencies on
agricultural literacy, food safety, pests and diseases, bioenergy,
natural resources, and nutrition programs in order to ensure REE
programs provide the science backbone to support budget and program
policy decision makers.
Mr. Chairman, up to this point, I have presented some information
on the mission of REE agencies, provided some background on how
priorities are coordinated in the mission area, and featured some of
the results of the agencies' work in these longer term investments. I
would like to round out my discussion with a word on current
initiatives and a look forward at agricultural science in the coming
years.
Part of the portfolio approach to finding solutions to the
challenges that confront us includes efforts to mitigate and resolve
the challenges that are before us today. Here are three such examples.
The REE agencies have been working to combat the highly-pathogenic
avian influenza (HPAI) virus. ERS continues to monitor and assess the
impacts of this most devastating disease on domestic and global poultry
markets, while NIFA supports university researchers to develop new
tools that help better prevent, control, and manage future outbreaks of
HPAI. ARS scientists have been working in concert with the Department's
Animal and Plant Health Inspection Service (APHIS), which is in the
forefront of actions to combat HPAI, and the poultry industry to
identify the specific strains of the virus, develop a test to detect
the virus in poultry, and develop a vaccine against the virus. While
ARS vaccine development efforts look promising, much more work needs to
be done before a licensed vaccine could be available for use as an aid
to HPAI eradication.
In the last few years, the issue of antimicrobial resistance (AMR)
has emerged as a serious health threat to both animals and humans.
While our understanding of the development and spread of antimicrobial
resistance remains incomplete, the REE agencies have worked with the
Department-wide One Health Working Group to make strides in our
knowledge on AMR. The action plan for combating AMR takes a voluntary,
comprehensive, systems approach to surveillance, research and
development, and outreach activities. In implementing this action plan,
USDA intends to provide researchers, producers, and consumers science-
based, quantitative information about drug use and resistance in food
animals and their relationship to livestock management practices.
A final example of current work is the REE support of a multi-
agency effort on pollinators. As proposed in the President's FY 2016
budget request, the Pollinator Health Initiative will focus on the
decline of honey bees and other pollinators. The continued loss of
commercial honey bee colonies stands to have profound implications
throughout the food and agriculture enterprise. In collaboration with
the U.S. Environmental Protection Agency, university scientists, and
private-sector partners, the Pollinator Health Initiative will make
advances in our understanding of the complex factors--like poor bee
nutrition, loss of forage lands, parasites, pathogens, and the exposure
to pesticides--and provide a path forward to arrest continued
pollinator losses.
Mr. Chairman, despite significant efforts by recent farm bills and
annual spending bills to restructure, reorganize, reauthorize, or even
repeal provisions, agricultural science in United States is at a
crossroads. It is no secret that American research needs additional
resources.
This underinvestment will have grave consequences. Projections by
ERS compare the scenarios where public R&D investment remains the same
in nominal terms versus a world where public R&D investment has
increased by just one percent each year in real terms. ERS estimates
that a one percent increase in investment each year until 2050 yields
an 80 percent increase in agricultural output.
As well, resources are not always monetary. In May 2015, the
results of an employment outlook report developed by Purdue University,
with support from NIFA, revealed a deep chasm between the demand for
college graduates with a degree in agricultural programs and jobs
available. The study found that annually, there are 57,900 jobs in
food, agriculture, renewable natural resources, and environment fields
in the United States. Further, the study found that there is an average
of 35,400 new U.S. graduates with a bachelor's degree or higher in
agriculture related fields, 22,500 short of the jobs available
annually. However, grants provided by NIFA help to address these issues
by assisting educational institutions fix shortfalls in curricula
design, material development, instruction delivery systems, student
experiential learning opportunities, scientific instrumentation for
teaching, and student recruitment and retention.
Mr. Chairman although REE has made significant strides, there is
still much to be accomplished. Our storied legacy of discovery,
innovation, and international leadership in agricultural research,
education and economics is in jeopardy by insufficient investments in
both money and minds. This is a challenge we must all rise to meet and
I look forward to redoubling our efforts together in the coming years.
Thank you.
The Chairman. Well, thank you. I appreciate it. Again, I
appreciate you being here.
Ms. Picanso, the RMA and FSA collect a great deal of data
as they do their work on the title I programs as well as crop
insurance. I mean the actual data reference to county-level
information. Can you talk to us about efforts at how you review
the data that you collect year in and year out? How have you
morphed those or reduced those as a result of data that is
collected elsewhere so that you don't have duplication of
efforts. Can you talk us a little bit about data collection and
how you keep vetting your data to make sure you have the most
recent current data that you need?
Ms. Picanso. Yes, sir. We collect data via surveys of
farmers and ranchers and agricultural businesses, and we have
over 400 reports we put out every year. So we are constantly
collecting data on crops, livestock, prices, production, grain
stocks, an assortment of things. A lot of the statistics that
we do collect are in support of USDA programs, such as FSA and
RMA and are widely used by them.
The Chairman. I understand that, that you collect.
Ms. Picanso. Right.
The Chairman. But do you look at what you are collecting
versus what the other agencies are already collecting so that
if RMA, for example, is collecting all the necessary data
collected for county-wide information, do you need to also
collect against that county or could you use RMA data?
Ms. Picanso. We do use RMA and FSA data as administrative
data, but our surveys are as of the first of the month. In most
cases, their survey data, their data they collect from farmers
does not coincide with the timeline where we are required to
produce estimates as of the first of the month. So even though
we can use their data, we have to supplement with surveys of
farmers and ranchers in order to get a statistically-reliable
estimate as of the first of the month.
The Chairman. Give me a sense of what you think that your
reports can move markets in the data that you are collecting,
particularly those monthly reports that you are talking about.
Can you talk to us a little bit about your efforts to make sure
you are using the very best information available, as new
techniques evolve, those kind of things to make sure that
whatever it is you report that potentially could move a market
in the interim is based on as good of information that you
would have?
Ms. Picanso. Yes. We are constantly updating our
statistical methodology to be sure we have the most up-to-date
statistical models and methodology. We are constantly looking
for ways to use more administrative data so we aren't burdening
the farmers and ranchers as often as we have in the past. But
with the increasing demand for data, we are asked to do more
and more surveys; and we are also asked to do a lot of
publications down to the local level, which means we have to
increase sample sizes in order to get the data, which involves
contacting more farmers.
And as far as the volatility in the reports, our reports
are as of the first of the month. We usually don't release the
report until about the 10th. So sometimes between the first of
the month and the 10th of the month, there may be a weather
condition that occurs and our estimate may be a little
different than what the analysts are predicting, and that is
usually when the markets either go up or down.
We also release data in conjunction with the World
Agricultural Outlook Board, which is international data. So
sometimes when the reports are released, it isn't the U.S. data
that is affecting the markets. A lot of times it is an
international situation that can occur as well.
We do track this, though, and how many times prices go up
after a report and how many times prices go down and then how
many times they stay the same; and it is usually about 45
percent of the time they go up and about 45 percent of the time
they go down and about ten percent of the time they stay the
same. So it does even out over the course of time.
The Chairman. All right. Thank you.
Under Secretary, you mentioned a small increase in research
would have a dramatic increase in ag production. Can you reduce
that to dollars for me, because you spend about--total of your
agency is about $2.5 billion each year. That is all in. That is
not just research. That is everything. But what--could you
reduce the--help me understand the magnitude of money that you
are talking about.
Dr. Woteki. Yes. So the report that I am referring to is an
analysis that ERS has done that has shown that projecting out
to mid-century, when the expected food demand is going to
demand an increase in productivity not only in the United
States, but around the world, that a one percent real increase
in the appropriation going to agricultural research will result
in a productivity increase of about 80 percent over that period
of time.
The Chairman. So there is a direct line between dollars
spent and productivity increases and research?
Dr. Woteki. Historically that has been the case.
The Chairman. Okay. So it is just--okay.
Dr. Woteki. And increasingly, in the United States, in the
past decades, our increases in agricultural productivity have
come directly from scientific innovation, and our farmers know
how to implement that. So it is essentially a combination of
research, innovation, and education.
The Chairman. Yes. It is not all at the Federal level.
There is a lot of private research done as well, scientific
dollars that are spent as well, right?
Dr. Woteki. That tends to be more commercialization of----
The Chairman. The basic science.
Dr. Woteki.--basic science that the private-sector is
doing.
The Chairman. Okay. Ms. Fudge, 5 minutes. You are the
ranking Democratic Member on the Committee today.
Ms. Adams. Adams. I think you said Fudge.
The Chairman. Oh, I am sorry. Ms. Adams.
Ms. Adams. Thank you very much, Mr. Chairman, and I thank
you all very much for being here.
My first question is to Dr. Ramaswamy. Is that the correct
pronunciation? As many of you know, North Carolina A&T State
University is my alma mater and an 1890 institution found in
North Carolina and the 12th District that I represent. It is my
understanding that NIFA is conducting an investigation into
1890 institutions not being able to offer the full level of
matching funds needed to qualify for grants available through
land-grant institution and research programs.
And I would appreciate it if you could share any comments
regarding the 1890 institutions not submitting the sufficient
matching funds for these programs, if you would do that.
Dr. Ramaswamy. Thank you very much, Mr. Chairman, for
having us here. And Congresswoman Adams, thanks very much for
that question. And as you know, you participated in this room
right here, and thanks to the chair here for inviting our 1890s
and the co-chair, Collin Peterson, as well. Congressman
Peterson to invite our 1890s institutions to come here and to
highlight the wonderful work that is undertaken in the area of
food and agriculture in those institutions, the 19 institutions
across America.
And so, indeed, to your point, some of the institutions are
finding it difficult to have the state matches. So for every
dollar that USDA provides, the National Institute of Food and
Agriculture provides, there is a requirement that there is a
dollar that is matched from other sources.
And we say that these other sources, based on what Congress
has told us, we say that these other sources are non-Federal
sources. So they could be from the state, they could be from
the sale of commodities, they could be from donations given to
the institution, et cetera, but not from tuition that is
charged to students. Tuition dollars cannot be utilized for
that match.
And it turns out that a number of institutions, 1890s
institutions are not able to get their matches, and again,
Congress has said that the Secretary is vested with the
authority to do a waiver up to 50 percent. So an institution
can contact us, and they can ask for a waiver of up to 50
percent, and there are three reasons under which we do provide
the waiver, one of which is a natural disaster such as a
hurricane or tornado or some such thing; second is financial
exigency at the state or at the institutional level; and the
third is that they make an honest effort to find the resources
to get the match.
And we get these requests coming in from all the
institutions, and we look at them, and if they are meeting at
least one of those criteria, we will go ahead and provide a
waiver of 50 percent.
So if they come in with ``50 '' in quotes, we provide $1 of
the Federal match. If they come in with less than 50 , let's
say they come in only with 40 , then we only provide 90 , and
the remaining 10 is available to be provided to other
institutions, providing they can come up with a match as well.
So that is the sort of the situation that we are in. A
number of institutions do come in with waivers, and what we
have done now is to--we have staff that is going to be
investigating the situation in the 18 states where we have the
19 institutions, and not just the 1890s institutions. We are
also going to look at the 1862 institutions as well. Because we
want to know the entire construct as to how these land-grant
universities are dealing with the matching requirement that we
have, and we hope to undertake that analysis in the next 2 or 3
months or so, the data gathered and there is an analysis done,
and then we will develop a report, then go through the
clearance process within USDA and make that available.
And in that final report that we provide, we will also,
depending on what we learn, make some recommendations as a path
forward.
Ms. Adams. Okay. Let me quickly ask another question--and
thank you for your answer. What grant opportunities are
forthcoming related to supporting small scale minority or women
producers?
Dr. Ramaswamy. There are a number of funding opportunities
that will be coming here with the start of the new fiscal year,
and we hope that this body here and the rest of Congress will
indeed provide us the funding necessary.
And we do have several funding opportunities for women and
minority farmers and small farmers as well that are part of the
opportunities we provide. And if you wish, I can send you
separately a listing of the ones that we have done in the
previous year.
Ms. Adams. Yes, sir, I would appreciate that.
Thank you, Mr. Chairman. I am out of time.
The Chairman. Thank you. Ms. Adams. The gentlelady's time
has expired. Mr. Crawford, 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman. This is in general
to whoever might want to respond to this. A lot of our growers
obviously rely on USDA estimates of commodities supply and
demand for market information and outlook. What role does ERS
play in the development of the monthly WASDE reports, and how
is that involvement distinct from the efforts of other services
of the USDA?
Dr. Bohman. The Economic Research Service, has long played
an important role in USDA's commodity outlook program. It is
over 50 years at this point, and our expertise is to bring in
the economic knowledge. We are all economists, how the markets
work. We also have research behind the economists to
participate in these committees, and we have data systems that
are used to produce supply, demand, and utilization tables.
So we are some of the sort of intellectual horsepower
behind the committees and draws on our infrastructure. After
the WASDE report comes out every month, ERS produces
newsletters for the major commodities that show the reasoning
behind the WASDE estimates, and this is a unique contribution.
A final element that we produce is a periodic report such
as on China's cotton stocks, U.S. trade with Cuba, or the
implications of lower energy prices for the farm sector which
document the modeling and economic logic behind the WASDE
reports.
Another contribution ERS makes is leading USDA's 10 year
agriculture baseline. We really drive that process in
collaboration with the Office of the Chief Economist.
Mr. Crawford. Okay.
Dr. Bohman. We are committed to continuing excellence in
this area.
Mr. Crawford. I appreciate that. I heard a lot of
complaints from growers back home that the recent WASDE report
had a huge impact on the price of soybeans in particular.
Apparently, Arkansas average yield forecasts are published at a
much higher rate than anyone is even capable of at this point,
so considerably higher than record yields.
Can you walk me through what controls you might have in
place to ensure accuracy because there seems to be a huge
difference of opinion on what our producers back home are
telling us that they are expecting versus what was published.
Dr. Bohman. Well, ERS analysts bring to the table, along
with analysts from the Farm Service Agency, from NASS, from the
World Board itself, a process where they have data from the
past, they have the NASS statistics that are about to be
released, and they also have expertise from talking to other
people in the industry.
So they bring the best knowledge to produce these
forecasts. They regularly go back and check the accuracy of
their forecast, the ones that are predicting, how do they do
when the market clears in the future, and so there is a robust
system of checks and balances, but I will turn to my NASS
colleague because they are a big part of the process.
Ms. Picanso. Yes. In addition to getting yield data from
producers on surveys, we also go out into the fields, and we
actually do objective measurements, and the objective
measurements on the crops are combined with the producer yields
and put into models, and that is how we come up with our
forecasts.
Mr. Crawford. Okay. I don't mean to cut you off, but I just
have been kind of trying to be up to speed on my data here, and
University of Arkansas cooperative extension service, which
most states rely pretty heavily on their land-grant
institutions, cooperative extension services, and those
economists.
And our economist at the University of Arkansas said USDA's
report was extremely bullish, and we are basing that on a
pretty big increase year over year that the farmers in our
district don't think they are capable of meeting that level,
and so let me move on to the next thing.
Again, we have heard these repeated concerns from growers
in the industry about the accuracy of these crop progress
reports and the impact that those reports can have on market
prices, particularly for corn and soybeans. Can you talk about
the methodology that helps you get there, and throughout the
growing season, what efforts NASS has undertaken to review its
methodologies for yield estimates, and what changes, if any,
you think, need to be made?
Ms. Picanso. I am not aware of any changes that need to be
made, but we do use methodology, like I said before, with our
models. We actually do get out into the field once the crops
starts producing fruit, and we do measurements, we take weights
of the fruit, and that combined with what the producers are
telling us is how we get our yields that are published every
month.
And as the season goes on, the data we get on the objective
measurements become more accurate because, sometimes, depending
on the maturity of the crop, which go out September 1, October
1, some years the crop is more mature than others, and the more
mature the crop is, the more reliable our actual counts of the
objective measurements are.
So in years where the crop matures a little early, we tend
to do better on the yield forecast, but we do have a
publication that comes out every year that compares all of our
forecasted yields to the final yield, so it does show the
accuracy. It is available on our website. We also host dozens
of people each month into our actual ag statistics board
process where they go through and see how all of the yields and
acreage and production are actually developed, and it is really
a pretty impressive process with all of our statisticians.
And if you sit down and go through the process, you will
realize that we are using sophisticated models to come up with
the data. Some people think we are just guessing or maybe we
are just basing it on a handful of reports, but we do get 75 to
80 percent response on our surveys as well as our objective
yield to complement it, and we do use some satellite data
towards the end of the growing season as well.
Mr. Crawford. Thank you. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired.
Mr. Scott, 5 minutes.
Mr. Austin Scott of Georgia. Thank you Mr. Chairman.
Dr. Ramaswamy, how are you? It has been a while.
Dr. Ramaswamy. It has been a while.
Mr. Austin Scott of Georgia. With regard to ag research, we
talk a lot about research, but would you speak to the value of
extension along with the research?
Dr. Ramaswamy. Indeed, Congressman Scott, and good to see
you again, sir, after several months now. And cooperative
extension service, which we celebrated the 100th anniversary,
as you know----
Mr. Austin Scott of Georgia. Yes, sir.
Dr. Ramaswamy.--last year, and you hosted a hearing for
that particular event as well, is the very American approach to
translating knowledge into innovations and solutions to address
problems people are facing. And this is the only country on
Earth that doesn't dissuade the connectivity between the
research discovery enterprise and the translational enterprise
and then to deliver it to the end-users. No other country has
been able to do anything like it. And I truly believe that our
nation's preeminence, global preeminence is, in large measure,
that ability to translate knowledge and to deliver to the end-
users.
And we have a history of it over the last 100 years, and
when we look at the situation now and as we project out, as we
go forward as well, we need this sort of ability to translate
and to deliver that knowledge more so today than we have ever
needed it before; in part, because of the burgeoning population
with pressures that we have; in part, because our ability to
ensure food security, nutritional security specifically.
And in the context of diminishing land and water resources,
changing incomes and diets, et cetera, et cetera, it is driving
the need to come up with better more efficient ways to produce
food and to get it to where it is needed and to address those
problems as well.
Extension is absolutely a must if we are to be able to
achieve what we need to achieve.
Mr. Austin Scott of Georgia. Things seem to change faster
now than they have in the past with regard to chemicals and
pests and other things, and certainly there is a tremendous
amount of information and there is even more misinformation out
there, and so that extension aspect, along with the research,
is something that I don't think we talk about extension enough.
Dr. Ramaswamy. Indeed.
Mr. Austin Scott of Georgia. But thank you for that.
One other question I have. The 1890s land-grant
universities, there are reports that they have not been
receiving as much funding as some of the other universities.
What suggestions do you or anybody else on the panel have for
us in correcting that so that 1890s universities received the
funding?
Dr. Ramaswamy. Indeed. We do have a situation where the
1890s institutions are not being able to meet the matching
requirement that we have the dollar-for-dollar matching
requirement that we have and they ask for a waiver from us, 50
percent waiver, and based on three criteria, natural disasters,
financial exigency, or that they are making a commitment to
find the resources, then we give them a waiver. And we have
developed that path forward, and it is a challenging situation
for them.
So what we have embarked on right now is to undertake a
complete detailed data gathering and analysis in all 18 states
for the 19, 1890s institutions and their 1862 counterparts. So
we don't want to just go and find out what is the situation
with the 1890s. We need to know what is happening in 1862s, use
that to develop a path forward.
Mr. Austin Scott of Georgia. So I am down to 1 minute. I
want to follow up on that if I can, sir. So if I understand
you, a 50 percent waiver was granted?
Dr. Ramaswamy. Yes.
Mr. Austin Scott of Georgia. So is that in the difference
in what they--the 50 percent is the difference in what they
would have gotten had it been matched and what they did get?
Dr. Ramaswamy. Indeed. So for every dollar, they are only
able to come up with 50 .
Mr. Austin Scott of Georgia. Right.
Dr. Ramaswamy. That means they are short 50 .
Mr. Austin Scott of Georgia. Right.
Dr. Ramaswamy. And that prevents them from deploying the
kind of research that they need, deploying the kind of
extension they need, et cetera.
Mr. Austin Scott of Georgia. I am interested in suggestions
on how we resolve that. That is something that Fort Valley
State is actually just outside my district but something that
is important to a lot of the people that are in my district.
Dr. Ramaswamy. Indeed. I met with the Congressional Black
Caucus staffers and other staffers as well and shared with them
this process that we have just embarked on, and we hope to get
it completed and come up with an analysis and a path forward on
how we might address this, so----
Mr. Austin Scott of Georgia. Would it be possible on some
of these to grant them an absolute waiver instead of the 50
percent waiver?
Dr. Ramaswamy. No, sir. You would not allow us to do that.
Congress does not allow us to do it.
Mr. Austin Scott of Georgia. Thank you. Thank you, Doctor.
Good to see you again, and thank you for your work.
Dr. Ramaswamy. Indeed. Thanks so much.
The Chairman. The gentleman yields. Just following up, Dr.
Ramaswamy, how many Federal dollars are not claimed as a result
of lack of match?
Dr. Ramaswamy. We believe approximately about--well, for
every dollar that we send, if they don't----
The Chairman. The question is, I understand that the state
or the private-sector has to come up with their share, but of
the Federal dollars available to be matched against, how many
of those Federal dollars are not matched?
Dr. Ramaswamy. I would like to get back to you on that with
a specific answer, Congressman Conaway.
The Chairman. Okay.
Dr. Ramaswamy. Because I can tell you approximately what
the numbers are, but I want to get back to you----
The Chairman. All right.
Dr. Ramaswamy.--specifically with the numbers.
The Chairman. All right. There are some Federal dollars
that aren't claimed?
Dr. Ramaswamy. Yes.
The Chairman. Okay. That would be the problem.
Dr. Ramaswamy. Absolutely.
The Chairman. You want to make sure that whatever Federal
dollars we do have available to them, that gets claimed, and
then the private-sector or states have to come up with their
share.
Dr. Ramaswamy. Sure.
The Chairman. Mr. Allen, 5 minutes.
Mr. Allen. Thank you, Mr. Chairman, and thank you for being
with us today.
In looking through the opening comments, I was interested,
obviously, in the 80 percent return on the invested dollars as
far as the--and also you mentioned to ensure farm
profitability. As you probably know, the farmers are going to
be going through a difficult time this year relative to
commodity prices, and corn is down. I mean, everything is down.
I would appreciate whatever you would have to say as far as
what research we need to do to figure out this problem.
Dr. Woteki. Well, thank you, Congressman, for asking about
the return on investment as well as what are the implications
for farmers today, because I know that is constantly on the top
of our mind.
There have been a variety of studies that have been done
over the years about, well, what is this investment in ag
research actually returning to the economy. And a recent
analysis by Dr. Phil Pardy at the University of Minnesota has
taken all of these studies together and re-analyzed them to
look at what is the annualized rate of return on the research
investment in agriculture science, and this recent analysis
indicates that that return on the investment is about ten
percent, which is pretty good.
And it is also similar to returns on investment from other
areas of science. Agriculture tends to have more historical
data associated with our scientific investment, so there has
been quite a bit of this type of economic analysis done.
To your question about what does that mean for the farmer
today. It means a lot of different things. Agriculture is so
diverse in this country, the week before last in Salinas,
California I met with a group of lettuce and leafy green
farmers, and they are really worried about water issues, and
they are also constantly battling new diseases that have
emerged. And from research that ARS has done over the years,
just over this past year, they have introduced about a dozen
new lettuce varieties that are resistant to downy mildew, a big
problem in the lettuce industry.
For the citrus industry, they have introduced a new root
stock that is resistant to the citrus greening disease. We have
also, through the investment that we have just been talking
about that NIFA makes to the land-grant universities, provide
funding that supports cooperative extension that allows these
wonderful research universities to be able to prepare and
actually provide to farmers a synthesis of what we know about
the problem that they themselves are facing.
So there is a variety of different ways that farmers are
getting a real return on investment right now.
Mr. Allen. Well, I mean, we are growing lettuce in Burke
county, in Georgia, south Georgia, so I know a little bit about
diverse--we are getting more diverse in our farming in our
districts.
And our yield per acre, we are extremely productive but it
seems like the marketplace or the commodity price or the
investment side is not cooperating from the standpoint we have
this incredible ability to produce this great cotton, this
great corn, and everything else, but then again, from the world
standpoint, when we go out and price this in the market, we are
getting killed.
You have public-private businesses working together and you
collaborate, you get a lot of information and that sort of
thing, the bottom line is it is great to produce, but then you
have to get something for what you are producing. Have you all
done any research on that, as far as how we are much more
productive than the world in our agriculture, but for whatever
reason, that has got to relate to the bottom line?
Dr. Woteki. Well, we agree with you that American
agriculture is enormously productive, and we are, remember, the
research arm of the Department. We do have in the statistical
agencies, NASS and ERS, the capability for generating the kind
of information that will provide a lot of insights into markets
and that also are very useful to you in making policy
decisions.
There are, through the Economic Research Service, in
particular, a variety of different studies that shed some light
on these questions of U.S. competitiveness in the marketplace,
and I would commend those to you.
Mr. Allen. Okay. Thank you, Mr. Chairman. I yield back.
The Chairman. The gentleman's time has expired.
Mr. Rouzer, 5 minutes.
Mr. Rouzer. Thank you, Mr. Chairman.
Dr. Jacobs-Young, my question would be most appropriate
probably directed to you, although any of you that might have
some insight, feel free to share. I am interested in avian
influenza. In the southeastern part of the country, obviously,
we are bracing for that potential possibility this fall as the
birds migrate south. Can you tell us where we are in terms of
development of a vaccine or vaccines that are available, what
you are hearing from other countries as it relates to that or
any interaction that you are having with other government
agencies as it relates to this issue?
Dr. Jacobs-Young. So thank you for that question.
Absolutely. Right away, when we had the issues in the Midwest
with avian influenza, ARS partnered with APHIS and began to
redirect our scientists to help them, first of all, determine
what we are dealing with, what type of strains we are dealing
with. We developed the diagnostic test, and then we began right
away on work on a vaccine to address the two strains that we
have been facing.
And so ARS has developed a vaccine, and we are now working
with the Department as they determine the potentials for
commercialization of that vaccine, which addresses the two
strains that we experienced this year.
Mr. Rouzer. How much of that vaccine has been produced? Is
production of it an issue at all in terms of quantity of birds
that might be affected?
Dr. Jacobs-Young. It has not been transferred to a
commercial partner as of yet for production, and so that is
part of the negotiation. As my colleague just said, we are the
research side, we develop the science, and so we work with our
partners to negotiate the commercialization.
Mr. Rouzer. I'm curious just how much vaccine would be
needed. That is really my question. That is just a question I
am curious about, if anybody knows?
Dr. Jacobs-Young. We do not. At this time what we can
certainly submit some information for the record on what we
think would be the approximate need for the country.
Mr. Rouzer. Switching gears, Madam Under Secretary, I am a
big picture guy, and it was mentioned earlier in the hearing
that we will have a population of 9.6 billion by the year 2050.
It is hard to believe it is already the year 2015, and
according to my little Google search here, we have 7.3 billion
people in the world today. Of course, by 2050, in addition to a
couple billion more, there will be a lot less land to produce
our food and fiber on.
What is our long-term strategy? What do we need to be doing
now in terms of the basics and as relates to our research
infrastructure and everything else to meet that demand?
Dr. Woteki. Well, we need to take a two-pronged approach
towards our research activities to really be able to face that
demand for food, and as I mentioned in the testimony, all of
the other services that are going to be demanded of
agriculture; clean water, contributing to the bioeconomy, and
beyond that, being sustainable into all of the future
generations to come after that.
So the two-pronged approach is, first of all, to focus on
agricultural productivity and to do the kind of fundamental
research that is going to provide us with insights into how we
can increase productivity, given less inputs, less land, less
water, perhaps less fertilizer and to be able to produce a wide
variety of health promoting foods with that type of input.
The second prong is to focus on agricultural systems at the
landscape level, and how can we be promoting the long-term
thinking as well as the adaptations that our rural communities
are going to have to make to support these systems of
integrated livestock and crop production that will be long-term
sustainable.
So we are approaching the research towards increasing
productivity by following those two pathways. If you look at
the way that we have structured our research priorities, they
reflect that, so that is, very briefly, how we are looking to
structure our agricultural research program to meet all of
those demands.
Mr. Rouzer. Thank you, Mr. Chairman. I see my time has
expired.
The Chairman. The gentleman's time has expired.
Mr. Abraham, 5 minutes.
Mr. Abraham. Thank you, Mr. Chairman, and I thank the panel
for being here.
Dr. Jacobs-Young, just go back to the avian influenza
vaccine. I am from northeast Louisiana. We have large poultry
farms in that area, and we are in the season where ducks and
geese are migrating down as we speak.
You say ARS and APHIS, you identified the two strains, got
the vaccine spooling up. Your best guess, best estimate as to
when it will be turned over to commercial buyers that will make
this vaccine and what are the hurdles preventing that now? Why
isn't that vaccine already being produced commercially, because
going to Mr. Rouzer's point on his question, we are going to
need hundreds of thousands, if not, millions of doses of this
vaccine?
Dr. Jacobs-Young. All right. So thank you for the question.
So, sir, what I do know is that we are currently in
negotiations to identify a commercial partner.
Mr. Abraham. What is holding--I mean, do you expect that to
happen pretty quickly? Time is running out on this year.
Dr. Jacobs-Young. Yes. That is a good question. I know that
they are in conversations, and I know that the urgency is very,
very much appreciated right now. We are all very concerned
about being prepared, and so with the temperatures, and I
understand that there are some conditions right now that we
have some window to work with a commercial partner to be
prepared, but the best I could do is get some information for
the record to get back to you.
We are working with APHIS, and so they are our partner in
this.
Mr. Abraham. Are there certain commercial entities that are
better spooled up, better to facilitate making this vaccine,
and is that under part of the negotiation as to who can do it
the fastest and the best?
Dr. Jacobs-Young. Well, when we develop vaccines in ARS is
typically we try to develop vaccines that can be retrofitted
into existing pharmaceutical vaccine-type production processes,
and so we have done the same thing in this case.
At this point, the best answer I can give you is I can give
you some information for the record. We are the science agency,
we do not do the negotiations with the commercial partner.
Mr. Abraham. Okay. Let me switch gears a little bit, but I
will stay with you. Where does ARS--give me an update on y'alls
relationship at MARC,
Dr. Jacobs-Young. Okay. Fantastic.
Mr. Abraham. How is that doing?
Dr. Jacobs-Young. So ARS has really had an opportunity to
strengthen the infrastructure for our animal research inside
the agency. Should I talk a little bit about the panel review,
the external panel review?
So we have had an external panel review at MARC. It has
been published and shared with many Members on the Hill. In
that report, they found no evidence of animal abuse and made
some recommendations on things that we can strengthen at MARC,
and we have taken those recommendations, and we have
implemented each one of them.
Mr. Abraham. That is a voluntary reporting to the
institutional animal center, right?
Dr. Jacobs-Young. The report did not recommend voluntary
reporting to the Animal Welfare Act, but we are working with
APHIS to voluntarily have an inspection register each one of
our animal research locations, and we have already started a
pilot program. APHIS has already inspected, I believe, two of
our locations, and so we are working with APHIS to determine
how this would be implemented. They do this with the National
Zoo, and there are other Federal properties that they partner
with, and so we are working with them to register each one of
our locations.
But we have identified an animal care ombudsman here at
headquarters so that if anyone had any concerns about animal
welfare, that they could contact that individual anonymously,
confidentially. We hired an officer, an animal care and use
officer for ARS.
What the panel found is that we had adequate policies and
procedures. There just wasn't one person that had the
responsibility to ensure that they were being followed across
this huge centralized agency, and now we have that person in
place.
We have implemented formal training for all of our
employees involved in animal research and some of our
administrators. Those will all be completing the training. The
first phase really focus on the IACUC members, and so those
IACUC members have been trained, and we have also updated our
policies and procedures and our Memorandum of Understanding
with the University of Nebraska because we have--if you
remember, that location has 50 percent ARS employees and 50
percent University of Nebraska employees, and so we clarified
some things and really cleaned up our partnership with Nebraska
in terms of this brand new MOU.
So there has been a lot of work under way. That panel went
on to review some of our other locations. So they had an
opportunity to review four other locations, including several
in Georgia, down in our Athens location. Once again, that panel
came back saying that they found no evidence of animal abuse
and that they were impressed with our care of our animals, and
so we are awaiting the OIG investigation and expecting an
interim report very soon.
Mr. Abraham. Thank you, Mr. Chairman.
The Chairman. The gentleman yields back.
Mr. Yoho, 5 minutes.
Mr. Yoho. Thank you, Mr. Chairman. And I appreciate
everybody being here this late afternoon.
Dr. Woteki, you were saying that the funds research to take
these advancements in the research you are doing to the
consumer, to the farmers, to increase production--I am adding
this--decrease chemical usage, conserve resources, feed
millions here at home and around the world, I mean, that is
what we are doing with our research, and you are a researcher.
Dr. Ramaswamy, you are a researcher, and Dr. Jacobs-Young, you
research. Dr. Bohman, do you do research also? And Ms. Picanso,
is that correct?
Ms. Picanso. Yes.
Mr. Yoho. That is good. Do you do any research?
Ms. Picanso. We do.
Mr. Yoho. You analyze the research.
Ms. Picanso. We have a small research----
Mr. Yoho. Okay. Well, first, I come from the great State of
Florida, and you are well aware of citrus greening, and I
appreciate you bringing that up. And I know you have seven
initiatives that you are working with, and I just want to thank
you from our state. My Governor, Rick Scott, he wants to thank
you, Commissioner Adam Putnam, and our producers for what you
have done.
My question is this. USDA funds and conducts researches at
our land-grant universities and other places, that produces
extremely important research for the advancement of
agriculture, veterinary science, and it winds up feeding people
around the world, and the advancement of medicine.
But yet we get researchers that call us--I can't tell you
how many times they call us, and they are getting hammered
because of FOIA. In fact, I have a letter right here from a
doctor, and I won't mention his name, but he says I am one of
43 scientists that have been attacked using public records law.
We are forced to surrender our e-mails in the name of
transparency. However, our own words are distorted, twisted,
and our reputations harmed when we did nothing wrong.
Now I have been FOIA'd by so-and-so, and he goes on to say,
should we allow activists and pseudo-celebrities to have access
to our records with the sole purpose of causing reputation harm
for an agenda based on personal views, beliefs, or hyperboles,
and the pseudo-science versus the science that you are
supporting and the American taxpayers are funding?
What is your thoughts on that, and what can we do? Because
we have these researchers doing all this work, but they are not
going to come out and talk about it. And citrus greening, one
of the things on the table is a genetically modified orange,
and 10 years ago there was a genetically modified papaya that
has a ringspot virus, and they got rid of it 10 years ago. EPA
has released it, but nobody has the political will to say it is
okay.
But yet we are funding this kind of research, and why are
we funding this kind of research if we don't have the political
clout and the research of you guys standing up? So I want to
hear your thoughts on that, please.
Dr. Woteki. Well, I have been following the recent
controversies that have involved some of the faculty at the
University of Florida, I was visiting last week with the Dean
of Agriculture at Iowa State University, some of their faculty
have also been FOIA'd, and quite frankly, it is a situation
that we in the government research agencies also face all of
the time with frequent FOIA requests.
Mr. Yoho. What I would request from you is to come up and
help us come up with a policy where we need to protect it. We
had an 18 year old student from one of our universities, her
name was put out there, her address and all that, and I can
just see it squelching the research, and the scientists won't
back up to advance this. So go ahead, I cut you off. I am
sorry.
Dr. Woteki. Well, what I was going to go on to say is that
we do live in a very open society, and one of the premises of
our government is transparency. So the open access laws at the
state level and the Federal level are being now being used in
some ways that perhaps make us uncomfortable and also make it
difficult for us to respond.
But I do believe that one of the best ways for the
scientific community to operate in this kind of environment is
to continue to be open about our science, to participate and
have activities like cooperative extension that can provide the
kind of messaging off of the science to the general public
about what this investment is actually bringing to them.
Mr. Yoho. And that is thing that we need to do, and if you
could come out, when you see these attacks, just come out with
a response from the USDA and saying, ``No, this is the facts
behind the science, and the science is good, and it benefits
all.'' I appreciate your time.
Mr. Chairman, I yield back.
Dr. Woteki. Thank you.
The Chairman. The gentleman yields back.
Mr. Thompson, 5 minutes.
Mr. Thompson. Thank you, Mr. Chairman. Thanks to all the
members of this panel. If there is probably two words that
define agriculture today, and it is science and technology, and
so I really appreciate the research, evidence-based research,
the information, the data. That is the other thing.
You know, we need good data. If you don't have good data, I
see that all too often here in Washington, we are making
decisions based on myth or a notion and the research and the
data that is provided.
So my question for you, and I struggled with this my first
term. I saw a number of different research prospects that the
taxpayers funded, but it seemed like they didn't go anywhere.
They may have gotten great outcomes, but they sat on the shelf
and it seemed like it maybe contributed towards tenure, but the
mindset was, and I get it, especially our university-based
research at times, it is once you do a great research study, it
is time to do the next one.
And so what are we doing in terms of assuring that we take,
what I think are some pretty exciting outcomes and findings,
from much of the research that taxpayers pay for, how do we
make sure that is being commercialized, that the outcomes are
actually going for the public good, and how can we improve
that, because I actually believe that whatever we are doing
now, we can raise the bar on that and improve it?
Dr. Woteki. Well, that has already been a particular
interest of ours to increase the commercialization of research
findings, results, products of our research, and also to use a
lot of the research that is done to inform the program and the
policy decisions that other parts of the Department are making.
The research can also find many applications in improving
the decisions, the Food Safety Inspection Service, or FSIS
makes as well. But on commercialization side, we talked a
little bit about already about ARS. They do have an Office of
Technology Transfer that actively seeks to patent and then
license the research that ARS is doing, and they are also
working to develop a more entrepreneurial skilled scientific
workforce within ARS.
NIFA, in the work that it supports at universities, has
also been very much promoting the idea that universities should
be trying to commercialize the results of the research
investment that the agency makes, and I know both Dr. Ramaswamy
and Dr. Jacobs-Young can give you some specific examples of
programmatic activities they have under way.
Mr. Thompson. That would be great.
Dr. Jacobs-Young. Yes, so just some quick examples, things
that will resonate with each of you, especially if you have
children and you spend some time at McDonald's. If you noticed
it now, the Happy Meal comes with fresh apples. That technology
was developed by ARS that permits children to enjoy those fresh
apples and they are not brown and they still taste crispy. I
have had them a couple of times myself.
DEET, Lactaid, mashed potatoes, those flaked potatoes, the
ability to have frozen foods in your grocery stores, all of
those technologies began at ARS. So part of our entire mission
is to deliver the innovation, and so the office of technology
transfer, as Dr. Woteki said, is critical.
On last year alone, we filed 110 patent applications. We
had 28 licenses executed. So it is just a part of who we are.
We don't patent the patent, so some people say why don't you
have more. We only patent when it is necessary to disseminate
the information and get it out there. We released 348 new
varieties of plants last year. So the entire goal is to deliver
it, and so we have a few things to show for the work.
Dr. Ramaswamy. And if I might add, Congressman Thompson.
Mr. Thompson. Please.
Dr. Ramaswamy. Indeed, the production practices that we
follow today, for example, no-till is the result of the
research that was undertaken in this country, or the
development of value-added products from whether it is corn or
sugarcane or cotton or whatever else we have, those are the
result of the research undertaken by ARS and land-grant
university scientists with the funding that we provided.
And water use, for example, that is an existential threat,
as I like to say, and already the work that has been done at
multiple land-grant universities and ARS labs has resulted in
billions of gallons of water being saved right now, so there
are a whole bunch of examples that we can send you about the
outcomes that are happening that actually are very impactful
right now.
Mr. Thompson. Very good. Thank you very much.
Thanks, Mr. Chairman.
The Chairman. I thank the panel. Dr. Ramaswamy, you had a
clarifying comment on the claiming of Federal dollars with
respect to the matches?
Dr. Ramaswamy. Indeed, Mr. Chairman. Thank you very much
for that opportunity. Yes, so if an institution submits to us
the waiver and it is less than the 50 percent waiver, so if it
is less than 50 percent waiver, it is 50 percent waiver, they
get the dollar from us, so there is no loss of those Federal
dollars. But if they are asking for less than 50 --or pardon
me, they come in with less than 50 .
The Chairman. Right.
Dr. Ramaswamy. Let's say it is 40 , we only give them 90 ,
but there is remaining 10 . We make that available to other
institutions that can come up with that match as well.
The Chairman. Still within the 1890 school group?
Dr. Ramaswamy. Yes, sir.
The Chairman. Okay.
Dr. Ramaswamy. Only within the 1890s, and we try to make
sure that we don't return these things to Treasury.
The Chairman. All right. I am looking forward to your study
that would include both sets of land-grant schools and the
impact there because I do think it is important, Dr. Woteki, as
we look at ways to increase that small little piece of research
you were talking about, that we are able to match up those
Federal dollars at 100 percent from the private-sector, the
states, whatever, that they recognize that they are getting a
big bang for their buck.
This panel, in particular, is a great example of why we
should have been doing this more often and the opportunity for
you to share with us the great things that you are doing. We
probably ought to reverse the role. Next time we will bring you
guys in first next time and save Farm Service Agency for dead
last, but I want to particularly recognize the Members who were
here today.
Today is a day we would normally be home in our districts,
working with folks and doing all that kind of stuff, and so the
folks who came in today a day early will have a group in the
morning that will be here. They are actually coming in a half a
day early, but I want to recognize Members who showed up today
to be a part of this, but thank you, the panel, for your
staying all afternoon and being here.
I know it was logistically a bit of a challenge to get
everybody up and down the street, and I want to thank you for
that effort and the preparation that you did coming in here
this afternoon. I think all of our Members will leave,
particularly this panel, today, better informed as to what you
are doing and why you are doing it, and I, for one, and I speak
on behalf of the others on the Committee, I want to thank you,
and let you know how much we appreciate the work that you do
day in and day out to improve production agriculture across the
spectrum.
So I would like to thank our witnesses, remind everybody we
will pick up on Part 2 of our hearing tomorrow morning at 10
a.m. When we hear from the representative remaining four
mission areas of USDA.
Under the rules of the Committee, the record of today's
hearing will remain open for 10 calendar days to receive
additional material, supplementary written responses from the
witnesses to any questions posed by a Member. This hearing of
the Committee on Agriculture is adjourned. Thank you,
everybody.
[Whereupon, at 5:34 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Questions
Response from Alexis Taylor, Deputy Under Secretary, Farm and Foreign
Agricultural Services, U.S. Department of Agriculture
Questions Submitted by Hon. Bob Goodlatte, a Representative in Congress
from Virginia
Question 1. Blender Pumps: We understand that USDA's Biofuels
Infrastructure Partnership will be providing $100 million in grant
funds for the installation of biofuel blender pumps in 21 states.
Considering that for the last 10 years, consumers have already been
forced to ``foot the bill'' for the higher levels of ethanol blended
into their gasoline, is it fair to ask them to pay another $100 million
in order to prop up the ethanol industry?
Answer. The U.S. Department of Agriculture (USDA) is undertaking
the Biofuel Infrastructure Partnership because of infrastructure
constraints limiting the distribution of renewable fuels. Approximately
80 to 85 percent of the 250 million vehicles registered in the United
States are able to use fuels containing 15 percent ethanol, E15. Also,
14 million flex-fuel vehicles can use E85, which contains more ethanol
than gasoline. However, most of the Nation's fueling pumps can deliver
only fuels containing a maximum of 10 percent ethanol, E10.
The Biofuel Infrastructure Partnership is investing up to $100
million, to be matched by states and private entities at a more than
one-to-one ratio, for the installation of nearly 5,000 pumps offering
higher blends of ethanol. USDA believes this infrastructure not only
will provide consumers with cleaner fuels and more options at the pump,
but also will expand markets for America's farmers and will boost rural
economic growth and jobs.
Question 2. COOL: As you know, the House has passed legislation to
repeal Country-of-Origin Labeling (COOL) for meat products, and the
Senate is considering similar legislation. If COOL legislation is
enacted into law, what would be the cost and timeline for USDA to
implement the changes?
Answer. The time and cost of implementing legislation altering or
repealing COOL would vary depending on the final legislation passed by
Congress.
Question 3. Dairy: Average dairy margins in 2015 have been just
under $8.00--the highest coverage level available under the new Dairy
Margin Protection Program. Have payments been made to producers
enrolled at that coverage level, and if so what was the approximate
total of those payments? How much has been deducted from those payments
due to sequestration?
Answer. As of November 25, 2015, approximately $648,782 has been
paid, net of sequester, to dairy producers enrolled in the Margin
Protection Program for Dairy (MPP-Dairy) at the $8.00 coverage level
for calendar year 2015. As required by Congress pursuant to the
Balanced Budget and Emergency Deficit Control Act of 1985, MPP-Dairy
payments approved in Fiscal Year 2015 are sequestered at a rate of 7.3
percent.
Response from Philip C. Karsting, Administrator, Foreign Agricultural
Service, U.S. Department of Agriculture
Questions Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question 1. Administrator Phil Karsting, the Livestock and Foreign
Agriculture Subcommittee has launched a review of food aid programs to
identify ways to make these programs function more efficiently for both
the American taxpayers and for the people around the world that they
are designed to help while also continuing to help protect the proud
legacy of food aid. Can you briefly highlight the role that USDA plays
in providing food aid overseas? I understand that USDA administers some
of its own food aid programs, but can you also explain USDA's
involvement in implementing Food for Peace?
Answer. The USDA Foreign Agricultural Service (FAS) administers two
food assistance programs, the Food for Progress Program (FFPr) and the
McGovern-Dole International Food for Education and Child Nutrition
(McGovern-Dole) Program. USDA's FY 2016 Budget also proposed $20
million in funding to take steps towards implementing the Local and
Regional Procurement (LRP) Program that was authorized in the
Agricultural Act of 2014 (the 2014 Farm Bill).
The principal goals of FFPr are to improve agricultural
productivity and to expand trade of agricultural products in developing
countries. To achieve these goals, USDA donates U.S. agricultural
commodities that it procures commercially or that are in Commodity
Credit Corporation inventory. Proceeds from monetization, the sale
abroad of these commodities, fund FFPr agricultural development
projects. Proceeds may also be used for humanitarian projects targeted
at hunger and malnutrition. FFPr projects range in scope from training
farmers and public officials in animal and plant health systems,
implementing new farming methods appropriate to the land, building or
improving road and utility systems, establishing producer cooperatives,
providing microcredit, and establishing agricultural value chains.
McGovern-Dole provides for the donation of U.S. agricultural
commodities, and financial and technical assistance, to support school
feeding and maternal and child nutrition projects in developing
countries. The primary objectives of the McGovern-Dole are to reduce
hunger and improve literacy and primary education, especially for
girls. The program is projected to assist three million women and
children worldwide in 2016.
Funds appropriated for LRP through McGovern-Dole in FY 2016 will
support the production of local and regional commodities that can be
procured to provide nutritional complements to U.S. commodities for
school feeding programs and boost incomes of smallholder farmers. Local
and regional procurement tends to be cheaper and faster than shipping
U.S. commodities overseas, allowing the funding to reach more families,
feed more children, and improve nutrition. While the program will focus
primarily on development programs, the 2014 Farm Bill also authorizes
the use of the LRP Program for emergency responses if needed, in
consultation with U.S. Agency for International Development (USAID).
The Food for Peace Title II food aid program is administered by the
Office of Food for Peace (FFP) in the USAID. USAID/FFP provides
emergency food assistance to those affected by conflict and natural
disasters and provides development food assistance to address the
underlying causes of hunger. During an emergency response using Title
II resources, USAID principally uses U.S. in-kind food aid, and a small
amount of Title II is available for locally or regionally procured
food, food vouchers and transfers to ensure communities have access to
food. In FY 2014, USAID reached more than 31 million people in 32
countries with Title II resources.
USDA's Farm Service Agency coordinates the purchases of U.S.
commodities and transportation provided under U.S. overseas food
assistance programs. In FY 2014, 1.45 million metric tons of U.S. food
assistance were delivered at a cost of $1.81 billion.
USDA and USAID coordinate our food assistance programs to be
complementary and reach the largest number of beneficiaries.
Question 2. Administrator Phil Karsting, what regions of the world
is FAS prioritizing for the next 5 years?
Answer. FAS' global network of agricultural economists, marketing
experts, negotiators, and trade specialists in Washington, D.C., and 95
international offices covering 167 countries support U.S. agricultural
exports to all regions of the world. In FY 2014, exports of U.S.
agricultural products reached a record $152.3 billion, supporting
nearly one million American jobs. FY 2015 was another exceptional year
with U.S. agricultural exports of $139.7 billion, the third highest
level on record.
Over the next 5 years, FAS will use the full range of tools at its
disposal to help expand market opportunities in all major regions of
the world. Our global presence and our consequent flexibility to adapt
to emerging situations are among our core strengths. Three geographic
areas stand out for their short-to-medium term opportunities, and these
are priorities for FAS as we move ahead.
China. U.S. agricultural exports to China have boomed from $2
billion in 2001 (the year China joined the WTO) to over $25 billion in
2014, but we see significant additional potential. FAS is strongly
committed to that market and to simultaneously holding China to its
existing trade agreement commitments. We currently have six offices in
five cities in China, by far our largest overseas presence. FAS leads
USDA efforts to engage with China, both bilaterally (via the Strategic
& Economic Dialogue and the Joint Commission on Commerce and Trade,
both of which are annual events in which Secretary Vilsack participates
and multilaterally (within APEC [the Asia Pacific Economic Cooperation
forum]), to promote agricultural biotechnology and other innovative
technologies, thereby advancing global food security, fostering better
climate adaptability, and paving the way for increased U.S.
agricultural exports.
The Trans-Pacific Partnership (TPP) provides tremendous new
opportunities for our stakeholders. TPP is a big win for U.S.
agriculture in priority markets like Japan, Vietnam, Malaysia, and
Canada. Not only does it create tariff preferences to keep us
competitive, it also sets new benchmarks for trade agreements and will
change the discussion on non-tariff issues like geographic indications,
agricultural biotechnology, and sanitary and phytosanitary (SPS)
measures. We see this agreement as precedent-setting. We expect our
focus in the Pacific Rim to be on implementation of this agreement. We
want to raise the bar on trade commitments to the level that the United
States already meets through its own rules-based systems.
The Transatlantic Trade and Investment Partnership (T-TIP) holds
out the promise of substantially improved access to the European Union
(EU), one of the world's largest economies, whose consumers are among
the highest per-capita income earners in the world. The United States
is currently one of only a very small number of countries that does not
have preferential access to the EU market under existing trade
agreements or preference programs, and we need to level the field for
our exporters competing in this lucrative market. In FY 2015, U.S.
exports of agricultural products to the EU were valued at $12.3
billion, making the EU as a whole our fifth largest export market. For
the past 13 years, the United States has had an agricultural product
trade deficit vis-a-vis the EU.
Around the globe FAS will continue to provide unbiased public
reporting on the outlook for a full range of agricultural commodities,
provide constituent servicing on the ground, advise and oversee our
market development Cooperators, monitor and enforce our existing
obligations under trade agreements, address SPS barriers to trade, and
help developing countries establish science-based regulatory systems.
Each year FAS develops specific strategies for each country covered by
an FAS office. The strategies identify strengths, weaknesses,
opportunities, and concerns there. These strategies enable FAS to
quickly adapt to new conditions that might influence FAS' promotion of
U.S. agricultural products.
FAS food aid and capacity building programs help developing
countries increase their capacity to feed vulnerable populations and
engage in international trade. In soliciting for Fiscal Year 2016
awards, priority countries for the McGovern-Dole program were
identified in Asia, Africa, and Central America and the Caribbean. For
the Food for Progress program awards, priority countries were
identified in Asia, Africa, and Central America.
Questions Submitted by Hon. Alma S. Adams, a Representative in Congress
from North Carolina
Question 1. Local and Regional Procurement. According to a 2013
Cornell study of three countries, food aid recipients were
unconditionally more satisfied with LRP compared to U.S. shipped
commodities. This sentiment was most pronounced among the poorest
``less-well-off'' recipients. What steps are being taken to ensure that
commodity foods shipped are compatible with local tastes and dietary
needs? If U.S. shipped commodities are not found to be compatible with
local tastes and dietary needs, what steps are taken to address this
problem and ensure beneficiaries are actually utilizing U.S.
commodities?
Answer. With respect to USDA's programs, in FY 2013, USDA began
offering enhanced guidance to applicants seeking funding through the
McGovern-Dole International Food for Education and Child Nutrition
Program (McGovern-Dole) related to nutritional and micronutrient
deficiencies of intended beneficiaries. McGovern-Dole applicants are
now required to provide a detailed explanation of how the requested
commodity and ration size will help address these deficiencies. In
addition, recipients of awards under McGovern-Dole choose the
commodities that are donated under the program based on their in-
country work experience and familiarity with the culture, including
local diets. In the case of those commodities that perhaps are less
familiar to the school children, the project implementers often will
provide training to the beneficiaries on how to best use and prepare
the newly introduced product in the local diet. Additionally, during
the proposal review process prior to making an award, FAS seeks input
from nutritionists and, often, local nationals, who understand the
cultural food preferences.
As an example, in Nicaragua, a private voluntary organization
called Food for the Poor, with the help of the United States Potato
Board and the Fabretto Children's Foundation, reevaluated the school
meal menu to find different ways to incorporate dehydrated potatoes,
combined with local food resources. Over 600 parents and teachers were
trained on proper storage, nutritional benefits, and preparation of
dishes using dehydrated potatoes with local affordable ingredients.
The local communities responded well to the product, given its
versatility and ability to substitute for corn to produce dishes
similar to the local diet. Local recipes were adjusted to substitute
dehydrated potatoes for corn or rice. These recipes included Dehydrated
Potato Enchiladas with Beans, Dehydrated Potato Tortillas and
Dehydrated Potato Dumpling Soup.
With respect to USAID's programs, USAID's Office of Food for Peace
(USAID/FFP) determines the best means of responding to food security
emergencies-whether that assistance is provided with U.S. in-kind
commodities, locally and/or regionally procured commodities, food
vouchers, or cash transfers for food--based on the context of each
individual humanitarian response. This decision making process is based
on the timeliness for each modality; local market conditions; cost
effectiveness; feasibility and scale; beneficiary targeting and gender;
security; program objectives; and beneficiary preferences--including
compatibility with local tastes and dietary needs. Most USAID food aid
is provided through U.S. in-kind commodities in Food for Peace Title II
programs, and few of these funds can currently be used for cash-based
food assistance such as local and regional procurement or food
vouchers, although the Budget seeks to increase our flexibility within
Title II to use the most appropriate tool for each emergency.
USAID/FFP relies primarily on limited funds in the International
Disaster Assistance (IDA) account currently to support cash-based
assistance programs. For example, in Syria, USAID is using IDA
resources to support an electronic food voucher program to reach
millions of refugees across five countries, many of whom are living in
cities and towns with functioning markets. This approach enables
refugees to have more diversity of choice, enabling preparation of
meals with more nutritious foods.
Question 2. Local and Regional Procurement. When coupled with
existing programs that strengthen local community systems and
infrastructure, LRP can be easily adopted by knowledgeable
beneficiaries with minimal impact on local markets. Given that most
food assistance programs include a local capacity building component
(McGovern-Dole FFE, Title II non-emergency programming) has there been
any consideration for use of LRP to help transition to locally
available products in these programs? If appropriated, how would the
$20 million for LRP be utilized? Besides working with McGovern-Dole
programs, do you see an opportunity to pair the new LRP program with
Title II non-emergency programs?
Answer. Local and regional agricultural procurement programs can
help build sustainable production of locally grown food and strengthen
local value chains, developing appropriate supply chains for the
procurement of commodities from local producers. School meals using
locally purchased foods will add locally preferred complementary
commodities to the meals, which will make them more appealing to the
children and help increase nutrition. In countries where supply chains
need to be strengthened in order to support a workable and reliable
supply of food, the recipients of awards under USDA's Local and
Regional Procurement Program (LRP) can work with producers, school
authorities, and local municipalities in communities around schools to
provide technical and management expertise to build reliable supply
systems, as well as to procure commodities. The FY 2016 Budget
requested $20 million for the LRP program to serve as a complementary
tool to support existing food aid programs, especially for the
McGovern-Dole program.
There may be potential opportunities for USDA to pair projects
under LRP with USAID's Title II non-emergency programs. In FY 2015, for
example, USAID targeted two countries, Bangladesh and Mali, for
development programs in numerous agriculturally-related topics,
highlighting access to food, nutrition, and improving agricultural
productivity. USDA has not only worked in both countries but also
funded Food for Progress and McGovern-Dole projects there. USDA's LRP
Program could be implemented to assist smallholder farmers in enhancing
their productivity with methods that mitigate climate change and
prevent environmental hazards.
In the 2014 Farm Bill, USAID received meaningful flexibility
through Section 202(e) in the Food for Peace Act to enhance Title II
programs, including through the use of local and regional procurement
and other market based food assistance interventions. With this new
flexibility, for example, USAID has been able to integrate local food
items towards the end of the 5 year development programs in order to
facilitate a smoother transition for beneficiaries, support local
markets, and enhance the overall sustainability of the programs.
Response from Brandon Willis, Administrator, Risk Management Agency,
U.S. Department of Agriculture
Question Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question. Administrator Brandon Willis, the 2014 Farm Bill directs
FCIC to study a variety of topics that could lead to additional
insurance policies for animal agriculture. FCIC is required to enter
into contracts to conduct research and development on policies for
poultry business interruption insurance for poultry growers, including
losses due to bankruptcy of an integrator (owner-processor). FCIC is
also required to contract for studies on insuring swine producers for a
catastrophic event and insuring poultry producers for a catastrophic
event. Can you please provide an update on how these studies are
progressing?
Answer. The Risk Management Agency (RMA) has contracted to provide
feasibility studies for poultry catastrophic disease losses, poultry
business interruption, and swine catastrophic disease losses, as
required by the farm bill. RMA expects to submit these reports to
Congress this winter.
Response from Sonny Ramaswamy, Ph.D., Director, National Institute of
Food and Agriculture, U.S. Department of Agriculture
Question Submitted by Hon. Alma S. Adams, a Representative in Congress
from North Carolina
Question. The 1890 Appropriation for the Expanded Food and
Nutrition Education Program (EFENP) has increased over the years,
however the funds are minute in comparison to the 1862 Institutions.
The limited amount of money makes it difficult to develop a significant
enough program to demonstrate widespread impact. Are there plans to
increase the funding appropriations of 1890 Institutions?
Answer. The Expanded Food and Nutrition Program allocations to 1862
and 1890 institutions are based on a statutory formula distribution
provided in the authorizing legislation. As such, NIFA does not have
the authority to alter the proportion of EFNEP funding that is provided
to 1890 versus 1862 institutions. The current formula provides that
1862 institutions shall receive a base in an amount equaling their FY
1981 allocation, and a minimum of $100,000 is distributed to each 1862
and 1890 land-grant institution including the University of the
District of Columbia. The remainder is distributed based on formulas
that use the latest Census data for population living at or below 125
percent of the poverty level. Specifically, a percentage of the
increase in funding that exceeds the FY 2007 appropriated level is
distributed to the 1890 Land-Grant Institutions according to the pro-
rata population for each institution at or below 125 percent of the
poverty level; and the remainder to the 1862 land-grant institutions
according to the pro-rata population for each institution at or below
125 percent of the poverty level.
Response from Renee Picanso, Associate Administrator, National
Agricultural Statistics Service, U.S. Department of Agriculture
Question Submitted by Hon. Alma S. Adams, a Representative in Congress
from North Carolina
Question. The Ag Census data seems to provide an inaccurate
(duplication) for the number of producers. As an example, a husband and
wife may both be listed as the primary operator, which increases the
overall number of farmers. This methodology makes it difficult to
determine the true number of farmers. Are there plans to modify the
current data collection methods to reduce duplication?
Answer. The Census of Agriculture collects data both on the number
of farms and the number of people who operate the farms. An operator is
defined as a person making day to day decisions for the farm operation.
Since the 2002 Census of Agriculture, the Census allows respondents to
report the total number of operators involved in day to day decision
making, as well as detailed demographic characteristics for up to three
of those operators. One of these operators is defined as the principal
operator or senior partner. The number of principal operators is equal
to the number of farms. For the 2012 Census, there were 2,109,303
farms, 2,109,303 principal operators, and 3,233,358 total farm
operators.
NASS is currently in the process of testing and updating the Census
report form for the 2017 Census of Agriculture. In response to
recommendations received from an outside panel commissioned to look at
collection of demographic data on the Census, NASS will collect
detailed demographic data on up to four operators per farm, and allow
the respondent to designate multiple principal operators. As in
previous Censuses, NASS will show information separately for the count
of farms, and the count of persons operating those farms.
HEARING TO REVIEW USDA ORGANIZATION AND PROGRAM ADMINISTRATION
(PART 2)
----------
WEDNESDAY, SEPTEMBER 16, 2015
House of Representatives,
Committee on Agriculture,
Washington, D.C.
The Committee met, pursuant to call, at 10:00 a.m., in Room
1300, Longworth House Office Building, Hon. K. Michael Conaway
[Chairman of the Committee] presiding.
Members present: Representatives Conaway, Neugebauer,
Goodlatte, Lucas, King, Rogers, Thompson, Austin Scott of
Georgia, Crawford, DesJarlais, Gibson, Hartzler, Davis, Yoho,
Walorski, Allen, Rouzer, Abraham, Moolenaar, Kelly, Peterson,
Fudge, McGovern, Plaskett, Adams, and Ashford.
Staff present: Anne DeCesaro, Bart Fischer, Caleb
Crosswhite, Callie McAdams, Haley Graves, Jessica Carter, John
Goldberg, Josh Maxwell, Mary Nowak, Mollie Wilken, Paul
Balzano, Skylar Sowder, Jadi Chapman, John Konya, Andy Baker,
Anne Simmons, Evan Jurkovich, Keith Jones, Lisa Shelton, Liz
Friedlander, Mary Knigge, Mike Stranz, Nicole Scott, and Carly
Reedholm.
OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE
IN CONGRESS FROM TEXAS
The Chairman. This hearing of the Committee on Agriculture,
to review USDA organization and program administration, will
come to order. I have asked Rick Crawford to open us with a
prayer. Rick.
Mr. Crawford. Thank you, Mr. Chairman.
Heavenly Father, we bow humbly before you. We are thankful
for every blessing of life and thankful for this nation that
you have given us and thankful for the opportunity to represent
those citizens of this great nation in our work here today.
Father, we just ask for your wisdom, guidance, and discernment
in all that we say and to be pleasing to you. In Jesus' name.
Amen.
The Chairman. Thank you, Rick. Ranking Member Peterson is
en route. He had a speech at 9:30, so he said to go ahead and
start this morning on time, and he will get here as quickly as
he can. We will pick up where we left off. I ask that any
Member who wants to submit an opening statement for the record
so the witnesses may begin the testimony to ensure there is
ample time for questions.
The chair will remind Members they will be recognized for
questioning in the order of seniority for Members who were here
at the start at the hearing. After that Members will be
recognized in order of arrival. I appreciate Members'
understanding.
Witnesses are reminded to limit their oral presentations to
5 minutes. All written statements will be included in the
record. Over the course of today's hearing, following the
testimony of each witness everyone at the table will be made
available for questions. So once Lisa finishes, then we will
open the questions, and I hope to get responses from the
appropriate administrator.
I would like to welcome our first witness group to the
table. The Honorable Lisa Mensah, who is Under Secretary of
Rural Development, USDA. Accompanying her today is Brandon
McBride, who is the Administrator of Rural Utility Service;
Tony Hernandez, who is the Administrator for Rural Housing. And
pinch hitting is Samuel Rikkers, who is the Acting
Administrator for Rural Business--Cooperative Service.
Lisa, the microphone is yours.
STATEMENT OF HON. LISA MENSAH, UNDER SECRETARY, RURAL
DEVELOPMENT, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY
BRANDON McBRIDE, ADMINISTRATOR, RURAL UTILITIES SERVICE, USDA;
TONY HERNANDEZ, ADMINISTRATOR, RURAL HOUSING SERVICE, USDA; AND
SAMUEL H. RIKKERS, ACTING ADMINISTRATOR, RURAL BUSINESS--
COOPERATIVE SERVICE, USDA
Ms. Mensah. Thank you also to the other Members and Ranking
Member Peterson when he arrives. I want to thank you for the
opportunity to discuss the program successes, challenges, of
the Department of Agriculture's Rural Development mission area.
I am accompanied this morning by Rural Development
Administrators Brandon McBride, Sam Rikkers, and Tony
Hernandez.
Rural Development manages a loan portfolio of more than
$200 billion through nearly 50 programs and services organized
into three distinct areas: Rural business and cooperative
services, rural utility programs, and rural housing and
community facilities programs. Together we are focused on
increasing economic opportunities and improving the quality of
life for all rural Americans.
Some of our resources finance large, long-term loans to
develop and grow businesses. Other resources are invested in
smaller, more specific projects targeted at the smallest
producers. Further, support is offered by our agency to address
underlying utility, housing, or community needs of large rural
areas. All of these investments offer hope and support needed
to encourage economic development. I am deeply appreciative of
the authorities provided to our agency by Congress through the
2014 Farm Bill.
You renew our ability to deepen our work in our core
programs on behalf of rural America, and those programs are so
important. For example, Rural Development provided a business
and industry guaranteed loan to a Somerset, Pennsylvania
company to purchase equipment to return manufacturing
operations from China to the U.S. The company manufactures and
distributes respiratory medical devices and products such as
nebulizers, oxygen concentrators, and CPAP equipment. USDA's
rural development assistance means that these products are now
proudly stamped made in the USA by American workers.
We are also supporting more basic needs like access to
clean water or to food. Second Harvest of Georgia is a
nonprofit that feeds hungry people in 30 south Georgia
counties. We provided funding to build a distribution facility
with a commercial kitchen that can produce up to 10,000 meals a
day for south Georgia residents in need. Since 2009, Rural
Development has helped more than 900,000 rural families to buy,
repair, or refinance a home. We provided funding for 3,000
multi-family housing developments, and we are successfully
delivering new or improved broadband service to 1.5 million
households, businesses, schools, libraries, and community
facilities.
We helped modernize rural electric infrastructure for about
8\1/2\ million rural businesses and families, and we provided
grants and loans for water and wastewater projects to help
safeguard the health of more than 14.5 million rural residents.
We understand the need to invest wisely and stretch our
limited resources. Our portfolio is full of examples of Rural
Development working with others to understand the needs of the
region and support projects that encourage development. Over
the past 2 years, Rural Development leveraged over $2 billion
in Community Facilities direct funds with $1.2 billion from
institutional investors in the capital credit markets.
Partnership projects are spurring economic growth and job
creation while providing access to health care, education, and
other critical services. True public-private partnerships are
built on shared vision and mutual trust. Our job is to be fair,
reliable, and consistent partners.
Thanks to Congress, Rural Development is a uniquely
structured agency with resources to encourage and support
successful systems that are already at work in communities or
to help develop those that are desperately needed.
In the time I have been with USDA, I have witnessed rural
resiliency on a very personal level. I watched the town of
Floresville, Texas turn out in force to launch their improved
water treatment system.
I visited the Peoples Rural Telephone Cooperative in
Jackson County, Kentucky, which built a state-of-the-art
network that offers isolated rural residents the same
educational and cultural opportunities available to residents
in urban areas.
I toured a manufacturer in Brundige, Alabama that is
expanding its business with support from Rural Development.
Each of these investments made in rural communities is an
investment in our country's future.
I am a passionate advocate for tapping the potential of
rural areas; so the communities located in every holler,
hilltop, plain, and prairie are part of America's story of
growth and prosperity.
I look forward to working with you in the coming months to
ensure continued support for rural development, and I very much
appreciate the opportunity to testify, and I am happy to answer
your questions.
[The prepared statement of Ms. Mensah follows:]
Prepared Statement of Hon. Lisa Mensah, Under Secretary, Rural
Development, U.S. Department of Agriculture, Washington, D.C.
Chairman Conaway, Ranking Member Peterson, and Members of the
Committee, thank you for the opportunity to discuss the programs,
successes and challenges of the Department of Agriculture's Rural
Development mission area. I am accompanied this morning/afternoon by
Mr. Brandon McBride, Mr. Sam Rikkers, and Mr. Tony Hernandez,
Administrators for Rural Development's Utilities, Business and
Cooperatives and Housing and Community Facilities Programs,
respectively.
The Rural Utilities Service (RUS) has funded basic infrastructure
services for 80 years and provides the critical financial support for
electric infrastructure, broadband to offer access to the digital
economy, and clean, safe water to help healthy rural communities grow
and prosper. Our Rural Business--Cooperative Service (RBS), in
partnership with other public and private-sector stakeholders, are
critical to improving lives of rural Americans. RBCS program not only
promote rural business employment opportunities and support key energy
project investments, but enable rural Americans to compete in the
global economy. Last, our Rural Housing Service and Community
Facilities (RHS and CF) make critical loans and grants to support rural
residents and the communities in which they live. Congress has defined
for us a tremendous set of housing and community development programs
to ensure that rural families have access to safe, affordable homes and
thriving communities.
The men and women of my Agency, and the programs we administer on a
daily basis, are committed to increasing the economic opportunities and
improving the quality of life for all rural Americans. Approximately 15
percent of the population of the United States is considered rural. Yet
that comparatively small percentage belies a far more relevant
statistic: nearly 75 percent of our land mass is rural. So that 15
percent--which happens to represent forty-six million American
citizens--feeds the world. Rural Development works on a daily basis to
determine and support the needs of that ``15 percent.''
The 5,000 Rural Development professionals I lead work daily to help
maintain and upgrade infrastructure investments that are so important
to the modernization of rural America; to connect citizens to the video
and data-intensive world of broadband; to build a cleaner, greener
future through renewable power and energy efficiency; to reduce child
poverty; to cope with growing healthcare needs of an aging population;
and to make rural communities a place where young people will want to
stay, start families, build businesses and create futures.
Rural Development has a loan portfolio of more than $200 billion
and invested upwards of $28 billion in 2014 alone assisting rural areas
throughout the United States and its territories. We maintain a program
delivery structure that Congress has supported since our founding, and
our customers appreciate. Rural Development has financed large, long-
term loans to develop and grow businesses. Other resources are invested
in smaller, more specific projects targeted at the smallest producers.
Further support is offered by our Agency to address underlying utility
housing or community facility needs of rural communities. All of these
investments offer the hope and support needed to encourage economic
development.
For example, Rural Development provided DeVilbiss Healthcare, LLC
with a Business and Industry guaranteed loan to purchase equipment and
machinery and to transfer manufacturing operations from China back to
the United States. DeVilbiss manufactures and distributes respiratory
medical devices and products such as nebulizers, oxygen concentrators,
and CPAP equipment. The assistance preserves 92 jobs and creates 20 new
jobs in rural Pennsylvania.
This is just one example of many forward-leaning projects that
Rural Development is proud to encourage. Our fundamental mission is to
support thriving self-sustaining and prosperous rural communities.
We're doing so through the authorities provided to our Agency by
Congress and through the added resources afforded in the annual
appropriations legislation and the 2014 Farm Bill. The farm bill
renewed our authority to deepen our work in our core programs for rural
America. And for that, I am deeply appreciative.
As Members of the Committee on Agriculture, you know better than
most the challenges that face rural Americans. Rural communities are
characterized by their isolation from population centers and product
markets. These communities benefit most from initiatives that integrate
local institutions and businesses with state and Federal agencies that
have intimate knowledge of local needs. At the same time, these same
communities have an enormous amount of importance to the health and
well-being of our entire nation. The report, Promoting Growth in all
Regions, released by the Organisation for Economic Co-operation and
Development (OECD), indicates investments in infrastructure and human
capital in rural places are vital for national growth.
For more than 80 years, Rural Development has doggedly pursued
success for rural America. We are committed to working with partners to
best serve rural areas. We understand that solid public-private
partnerships and well-placed intentional investments can--quite
literally--mean life or death for some communities.
Pikeville Medical Center in Kentucky is a private, nonprofit
(501(c)(3)) organization that provides comprehensive health care
services through its 261 bed acute care and in-patient rehabilitation
hospital. The Hospital primarily serves patients from persistent
poverty areas. To meet a growing demand for services, Pikeville Medical
Center used the Community Facilities (CF) program to construct ea new
medical office building containing research facilities, outpatient
surgery suites, endoscopy facilities, physical exam space, labs and
lecture halls.
Building on this success, and working with others to understanding
the needs of the region, Rural Development provided a $40 million
Community Facilities loan to the University of Pikeville (UPIKE) for
the construction of a health professions education building that
provides both instruction and demonstration for the new College of
Optometry, School of Nursing, and other student support services. This
funding enabled USDA to establish a public-private partnership for the
new facility whereby UPIKE provided an additional $5.5 million, $3.7
million in private donations were raised, the Appalachian Regional
Commission provided a $1.5 million grant, and the U.S. Economic
Development Administration provided a $1.3 million grant.
This partnership resulted in a facility that added 75 direct jobs
to the local economy and created a distributed community-based clinic
model, adding 25 to 30 jobs in local clinics. In addition, the
community benefited from the facility as there was no College of
Optometry serving that state or many of its neighbors previously.
USDA Rural Development, through its Community Facilities programs,
has taken a leadership role in facilitating and strengthening public-
private partnerships to ensure that rural residents have the
opportunity for a brighter future with good schools, quality health
care and other critical community infrastructure needs.
In communities like Pikeville, public-private partnership has
bought together critical financial, project development and technical
expertise, resources and innovation to large complex community
infrastructure projects at a time when Agency staff resources have been
reduced; it has strengthened underwriting with another set of eyes
thereby reducing Agency credit risk and has provided the Agency with a
long term partnership for servicing loans along with another avenue for
communication with the borrower. More importantly, it has allowed USDA
to assist more rural communities, invest in more essential community
facilities and help more rural residents.
From Fiscal Year 2012 to Fiscal Year 2014, Rural Development
invested in 335 Public-Private Partnership community infrastructure
projects across rural America in 49 states. The Agency leveraged over
$2 billion in community facilities direct loan funds, with $1.2 billion
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. These Community Facility
investments are projected to create or save approximately 75,000
quality paying jobs.
True public partnerships are built on shared vision and mutual
trust. Our job is to be fair, reliable and consistent partners. Thanks
to Congress, Rural Development is a uniquely structured Agency with the
resources to encourage and support successful systems already at work
in communities or develop those that are desperately needed.
Today, we are using lessons learned in our more established
programs to capitalize on opportunities in other areas within the
mission too. Consider our work in the rapidly expanding area of local
and regional food systems. The concept behind the ``Know Your Farmer,
Know Your Food'' initiative now includes more women, more people of
color, and more veterans.
In Poplarville, Mississippi, Ivory Smith, a veteran of the wars in
Iraq and Afghanistan, is trying his hand at hydroponics by growing
rainbow radishes and pea shoots.
Funded in part by USDA Rural Development, an ``Armed to Farm''
workshop helped Ivory learn to better manage the business side of his
operation. After shadowing working agribusinesses, he says he now feels
more confident about the future of his company, SmithPonics.
I am deeply moved by seeing taxpayer dollars at work in rural
communities. There is something extraordinary about rural America's
ability to survive and thrive. It is a place where values count and
where stewardship is a meaningful obligation. Financing businesses like
SmithPonics, which helps Ivory put food on the table and contribute to
the local economy, is an amazing privilege.
Over the course of the last couple of years, we have chosen to be
proactive in identifying and pursuing areas of greatest need in rural
America, rather than waiting for those places to find us. We're doing
so through StrikeForce, Promise Zones, Stronger Economies Together and
other such initiatives that you are well familiar with. These efforts
are just a few of the many reasons that I am so fiercely proud of the
5,000 Rural Development professionals nationwide. Our Agency and its
partners are willing to help us move much needed assistance to the
places that need it most.
In the time that I've been with USDA, I've witnessed rural
resiliency on a very personal level. I watched the town of Floresville,
Texas turn out in force to launch their improved water treatment
system. I visited the Peoples Rural Telephone Cooperative in Jackson
County, Kentucky which built a state-of-the-art, fiber-to-the-premise
network that offers isolated rural residents the same economic,
educational and social opportunities available to residents in urban
areas. I toured a condiment manufacturer in Brundige, Alabama that is
expanding its business and market share with support from Rural
Development. Each of these investments made in rural communities is an
investment in our country's future.
Throughout all of these visits, it was clear to me that giving our
rural children a reason not to leave was extremely important to local
community leaders, family members and businesses. More importantly, I
know it can be done. Jeanne and Dan Carver own and operate Imperial
Stock Ranch in Wasco County, Oregon. This family business supplied wool
for Ralph Lauren-designed sweaters worn by United States athletes at
the Sochi Winter Olympics. Later, they launched a ``ranch-to-runway''
line of clothing with award-winning fashion designer Anna Cohen. They
did all of this nearly three thousand miles removed from the frenetic
pace of New York City's fashion district. The Carvers have benefited
from USDA's Value-Added Producer Grant (VAPG) program since 2008, using
the funds for planning and capital assistance. In this instance, the
VAPG program--one of nearly 50 programs and services administered by
Rural Development--is helping breathe life back into the textile
industry and creating jobs right here in the United States.
Another critical need for economic growth in rural areas is access
to affordable water and wastewater services, electricity and broadband.
Once again, Rural Development is working with partners to provide rural
areas with these modern day necessities of business.
We provided grants and loans for water and wastewater projects to
help safeguard the health of more than 14.5 million rural residents
since 2009. To support water utilities and households coping with
drought in California, in June 2015, we pledged to provide at least $7
million to address the drought-related needs of water utilities and
households.
Since the creation of the Rural Electrification Administration
(REA), we have worked to provide reliable electric infrastructure for
rural residents and businesses. Rural Development has funded over $1.1
billion in smart grid technology during the Obama Administration. A
recent loan to Minnesota Valley Electric Cooperative, for example,
includes $1.9 million for smart grid projects to better manage electric
load and equip consumers with information to enhance energy efficiency.
Furthermore, broadband investments help rural communities attract
new businesses; allow schools to improve educational opportunities
through distance learning; and improve healthcare by providing cost-
effective remote diagnosis and care. In many cases, the risks
associated with building broadband infrastructure in rural areas can be
too cost prohibitive for the private-sector. The Federal Government
plays a necessary role in partnering with local institutions and
communities in these instances. USDA works to carefully balance the
need to provide broadband service to under- and unserved areas with the
risks associated with funding large infrastructure projects in rural
areas with low population density. Just as REA brought electricity to
rural areas, Rural Development's commitment to bringing high speed
Internet to rural areas will make businesses more competitive ad bring
opportunities to rural citizens that have long been afforded to urban
citizens.
Under the American Recovery and Reinvestment Act of 2009, Congress
gave us the authority to continue to support delivery of broadband to
remote and hard-to-serve areas. We are proud to share with you that 244
of the 255 funded projects are complete and are successfully delivering
new or improved service to nearly 260,000 rural households, more than
17,000 businesses, and approximately 1,880 schools, libraries and
health care facilities. These new projects will continue to attract
subscribers as they deliver educational and health care services and
strengthen rural economies through connections to the global
marketplace. In total, USDA investments in all broadband programs has
delivered service to 1.5 million households, businesses, schools,
libraries, and community facilities since 2009 while also being good
stewards of taxpayer dollars. Rest assured, we are committed to the
work that remains to be done. Fewer than 50 percent of those who live
in rural areas have access to the same high-speed Internet services
that those who live in urban areas enjoy. We expect the White House
later this month to release a report submitted by USDA and the
Department of Commerce on ways to continue to bring broadband to
unserved areas. We believe that the Farm Bill Broadband Loan Program
will be an important resource in this effort.
A special point of pride for Rural Development is our housing
programs. Since 2009, Rural Development has helped more than 900,000
rural families buy, repair or refinance a home and provided funding for
3,000 multi-family housing developments. Access to safe, modest,
affordable housing is vitally important to the health and growth of
rural areas. Helping to make the American Dream a reality is a
tremendous responsibility. I am delighted that through our work Rural
Development housing programs are often stepping stones on the journey
to homeownership which will help build wealth and security for rural
families. We offer one of the best home mortgages in the United States
and boast a low default rate.
In this, the 50th year of Rural Development's Mutual Self-Help
Housing Program, we also completed 50,000 homes through partnerships
and sweat equity. In fact, several Members of Congress and
Congressional staff participated in self-help builds this year to help
us mark this important milestone.
Rural Development is committed to continually testing new ways to
address housing needs in rural America. The USDA Energy Efficiency
Manufactured Home Pilot Program was introduced this summer in New
Hampshire and Vermont. A low income home-buyer interested in purchasing
a high-performance modular home and placing it in a mobile home park
would be eligible for a 30 year mortgage at a 3.25 percent interest
rate. Very low income home buyers may be eligible for an interest
subsidy down to one percent. The mortgage is the first of its kind for
residents of mobile home parks, where home buyers face high interest
rates and short loan terms.
The Agency continues to make tremendous gains--and took on a decade
of needed upgrades--to its systems and processes. As of this spring,
our guaranteed Single Family Housing loan program is now paperless. Not
only are we saving 37,500 REAMS of paper every year, we've lowered
postage costs, saved printer ink, and are moving loan guarantees out
the door much more quickly. We estimate a 1 year savings of more than
$4.2 million. [See attached infographic] *
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* Editor's note: The testimony is published as received, there was
no attached infographic.
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We are also in the process of modernizing the delivery of the
Single Family Housing direct loan program through automation. Beginning
Fiscal Year 2016, the Agency will implement an automated underwriting
system nationwide, permit third parties to submit applications
electronically, and move from paper-based to electronic customer files.
These improvements will provide underwriting consistency nationwide,
additional security features, and the ability to seamlessly transfer
work when states experience increases in applications.
In other rural areas, we are supporting organizations that are
addressing more basic needs and on the front lines of fighting to
alleviate poverty. Second Harvest of South Georgia is a nonprofit that
feeds hungry people in 30 Georgia counties and is the largest in
Georgia outside of the Metro Atlanta area. USDA provided funding
through a $5.2 million Community Facilities loan to build a
distribution facility in Thomasville. Its commercial kitchen can
produce up to 10,000 meals a day for South Georgia residents in need.
I appreciate your continued interest and support of Rural
Development programs. When countries cannot make rural infrastructure
work, it impedes not only their rural places and people; it holds back
the growth of the entire nation. This is true for industrialized
countries like the United States, as well as developing nations like my
father's homeland of Ghana. Investments in roads, the electric grid,
water systems are what ignite the rural economy. USDA Rural Development
and our partners address the unique needs of communities often lacking
large populations or other support mechanisms. Rural investments are
shared investments for all. Together, we can coordinate and leverage
our resources to turn Rural Development's transactional work into
transformational work.
I am a passionate advocate for tapping the potential of rural areas
so that communities located in every holler, hilltop, plain, and
prairie are part of America's story of growth and prosperity. I look
forward to working with you in the coming months to ensure continued
support for USDA Rural Development.
I appreciate the opportunity to testify before the House
Agriculture Committee. At this time, I am happy to answer your
questions.
The Chairman. Thanks, Lisa. I appreciate that.
You have also been proud of the community of Robert E. Lee,
Texas which had a water problem, and so they had to lay a line
of about 12 miles; and the citizens actually pitched in and got
in the ditch and helped put the plastic pipe together for that
12 miles, so that is a great example; and your agency pitched
in.
I don't think either you or Brandon were here during the
stimulus program in which about $7 billion was earmarked for
broadband and rural access. As a part of that, there was some
$300 million that was earmarked for a survey to be done across
the United States to tell us where it was and where it wasn't,
in other words where it needed to go. That survey was done,
completed months after the $7 billion was committed,
unfortunately. A bit of a history lesson. Can either one of you
give us an update on, was the survey completed? And then I will
go from there.
Ms. Mensah. I am going to ask Administrator McBride to
speak to the survey, and while neither of us were in these
spots at the time of the stimulus, I do want to say we are very
proud of the stimulus dollars that reached and helped build our
broadband work.
The Chairman. Okay. Brandon.
Mr. McBride. Thank you for the question, Mr. Chairman. I
believe that the FCC has completed that survey, and we are in
touch with them frequently----
The Chairman. Okay you were about to answer then. Given
your comments in the opening statement that we are still not
done, and given that I represent a rural district in which I
have an AT&T phone and a Verizon phone, and I am out of
contact, unfortunately, often in my rural district. What are
your efforts compared to what that survey showed needed to be
done? How did the $7 billion accomplish what we wanted it to?
Mr. McBride. With the stimulus funding that we had, we were
able to expand broadband into a number of rural areas, and that
was a historic investment. We continue to work with the FCC and
NTIA to make sure that we are reaching areas that do not have
service.
The 2014 Farm Bill instructed us to work with the FCC to
update maps and make sure that we were sharing information to
update those and ensure that the communities that do not have
broadband, that we would get to those.
The Chairman. So we have entire communities or just folks
living out in the countryside that don't have it?
Mr. McBride. We have both.
The Chairman. The testimony stated we have six projects yet
to be completed under the stimulus program?
Mr. McBride. I am sorry?
The Chairman. I read in Ms. Mensah's testimony that 244 of
the 250 projects were done. This is 6 years later; we have six
of those projects that aren't yet done? That may be unfair to
ask you that question.
Mr. McBride. There are less than a dozen projects that are
still working on construction, and we hope to have those
completed by September 30.
The Chairman. Okay. Lisa, can you talk to us about the
Community Facilities investment? You partner with a bank, and I
guess the bank services those loans, or how does that work?
Ms. Mensah. I am going to ask Administrator Hernandez to
speak to all aspects of our Community Facilities because we
have both direct and guaranteed programs.
Mr. Hernandez. Thanks, Mr. Chairman. We are very excited
about the----
The Chairman. Is your microphone on?
Mr. Hernandez. It is now. Mr. Chairman, we have a program
that really capitalizes on the private-sector so they can do
what we call our guaranteed lending, and so we guarantee the
loan up to 90 percent; so the lenders do that loan and then we
also have a product which we call the direct loan, and so we
use both those financing to both mitigate----
The Chairman. The direct loan, do you service those?
Mr. Hernandez. We do those directly.
The Chairman. What is the default rate on that?
Mr. Hernandez. Our default rate is less than one percent,
sir.
The Chairman. All right. That is a full out default. How
many do you have that are not current on their payments?
Mr. Hernandez. Sir, we are very fortunate that almost all
of our loans are current. We have folks that we are working
with to make sure they stay current. Part of it goes to our
underwriting. We try to make sure we are picking projects that
are successful.
The Chairman. I hear that, Tony, but how do you avoid
competing with banks. It seems to me--we all want these
projects done. We prefer to have the private-sector do it
first. How do you not step on their toes?
Mr. Hernandez. That is a great question, sir. As a matter
of fact, the partnership between the private-sector and public-
sector, a lot of these projects in the private-sector would not
lend if we were not part of that lending. They are looking to
mitigate their risk. And that is why we do more on the direct
side than we do on the guaranteed side because a lot of these
projects a lender would not do. So they look to us----
The Chairman. Let me understand. You said you do extensive
due diligence on it, which I appreciate, but you have already
had a bank look at it and say we can't commit our shareholder
money for this. What steps do you, in the 30 seconds left, kind
of what steps do you have to go through to look at it to decide
to put taxpayer money against it, a direct loan?
Mr. Hernandez. Sure. The first thing we do, sir, is try to
find the right project; they have the capacity to pay it back.
But a lot of times a lender won't lend there because they don't
want to have that much risk in that deal. So they look to do a
minimum investment.
The Chairman. So in the direct loans you would have a bank
partner with you in those as well?
Mr. Hernandez. As a matter of fact most of our projects
have both private and us in them, sir.
The Chairman. So give me real quickly how many of those
direct loans are 100 percent USDA loans versus one where you
have a blend of other outsiders in it?
Mr. Hernandez. Great question sir. I don't have that
information with, me.
The Chairman. Would you give us kind of a report on
portfolio, 100 percent direct loans, and how much of those are
blended loans in the sense where you have private folks coming
in. I appreciate your help to make it happen. I am a former
banker, so if you wouldn't mind giving me kind of a read on
where the current status is on the portfolio?
Mr. Hernandez. I can do that for you, sir.
The Chairman. Thank you very much. Mr. Peterson, for 5
minutes. Ms. Fudge, for 5 minutes.
Ms. Fudge. Thank you very much, Mr. Chairman. And since I
don't know you well enough to call you by your first name, I
will call you by your title.
Under Secretary Mensah, does your Department have the
resources to provide the loans and the grants needed to help
all of Americans in rural areas to thrive?
Ms. Mensah. Thank you, Congresswoman Fudge. This farm bill
was very good to us, and we started this year very strong. We
had strong performance in all three of our portfolios, our
housing, our utilities, and our business loans.
But probably the thing I have talked the most about since I
got to USDA is our people and our core programs. As long as
those two things stay strong, we have nearly 5,000 people that
work for us; my biggest hope is that we can retain all of those
jobs and keep those people productive because they are the ones
that will allow our core programs to move forward. It is a
powerful staff. It is a field-based staff, and I am most
concerned that we are able to keep our people and our core
programs strong.
Ms. Fudge. Well thank you. Two of the people you have to
thank for that are sitting right here. Of course, Mr. Peterson
and Mr. Lucas, who worked so diligently to make sure that we
did receive a farm bill.
Ms. Mensah. Absolutely. Thank you.
Ms. Fudge. Further, Know Your Farmer, Know Your Food
initiative you cited an example of a veteran who benefited from
this effort in your testimony. Could you tell us a little bit
more about that?
Ms. Mensah. Know Your Farmer, Know Your Food is a way we
talk about the entire local food economy. It is about getting
more for your food dollar. In the example in my written
testimony we had a veteran that was growing microgreens, what
you can grow and what you can make on microgreens, even when
you are beginning farmer, exceeds trying to be a row crop
farmer when you are starting out.
What we have seen is in our agency is that in our core
programs, our programs like our Community Facilities, our
programs such as our Business and Industry Loans, we are able
and are Value-Added Producer Grant, all those things that were
renewed in the farm bill, that allows us to strengthen this
what we call the local food.
So many Americans want to eat locally and buy locally, and
they are willing to pay a little more. And this is an
opportunity to strengthen the whole economy around. It is not
just a little thing. I love the program. I tour and see the
kind of food hubs, the storage facilities we have been able to
build with our Community Facilities dollars, so it is really an
important wedge into the rural economy and to renewing that.
Ms. Fudge. Thank you. Administrator Hernandez, in the Under
Secretary's testimony, she stated that Rural Development offers
one of the best home mortgages in the United States and it
boasts a low default rate. What is the default rate and why is
it so successful?
Mr. Hernandez. Thank you, Congresswoman, for the question.
We are very proud of our program that really creates an
opportunity for people to own homes. And the reason it is so
good is we work with our borrowers to make sure they stay in
the house. So we have two products, one that is called the
guaranteed product, which is where we work with the lenders;
and for both of our products, customers have to not to be able
to get access to capital someplace else.
What makes the product so good, it is 100 percent
financing, zero down payment. If they can qualify for a down
payment program someplace else, we encourage them to go to FHA
or someplace else. So most of our customers want to be a home
buyer, but their incomes are lower, and so they have our
product which is zero percent down, 100 percent financing. That
is on the guaranteed.
On the direct, we work with them directly, meet with the
customers, we are their lender. If they have challenges with
making their payments, we work with them. We call them, that is
how we work to make sure they can be successful. And so it is a
one on one. We do this in 47 different states. All over the
country we have offices that really work with the customers. We
find the customers working with our favorite nonprofits, and
they are favored because they are successful in bringing good
customers to us. So I think that is one of the reasons we are
so successful with a lower default rate.
Ms. Fudge. Thank you. Administrator Rikkers, I want to talk
a bit about HFFI. And we know that many projects have been
funded through the existing framework, and there is a real
opportunity to build on the success of this enterprise level
funding at the national level. Recognizing the uncertainty of
the appropriations we have coming in 2016, how does USDA plan
to implement HFFI, and why can we not move forward at this time
on a national fund manager?
Mr. Rikkers. Representative Fudge, thank you for the
question. HFFI, as you note, is a critical program that
supports healthy food and financing across the country. Many of
our programs, not just within the Rural Business--Cooperative
Service, but also across other parts of the USDA are integral
to that program. We are looking for guidance.
We have not yet had funding within that program within the
RBCS, or Rural Business--Cooperative Service. As Under
Secretary Mensah cited just moments ago, the importance of
healthy, local foods in our rural communities is something that
we are attempting to address with other programs we have within
RD, but certainly something we are looking to Congress for
support for funding.
Ms. Fudge. Thank you. I yield back.
The Chairman. The gentlelady yields back. Mr. Neugebauer,
for 5 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman. Administrator
Hernandez, one of the things that I have an opportunity to do
is sit on this Committee as well as the House Financial
Services Committee, and one of the things that we have been
working on is housing reform. And one of the things, and I
don't have the number in front of me, but when I had an
opportunity to chair the Housing and Insurance Committee, we
were talking about the number of housing programs that exist
across the entire government. And it is a substantial number of
housing programs.
As we are in a situation where we are borrowing money to
keep our government operating. One of the issues that has been
discussed is why are we doing so many housing programs across a
broad number of different agencies, and why don't we do housing
in one location? So I would welcome your thoughts to why that
is not a good idea?
Mr. Hernandez. Great. Thank you, Congressman. Congress was
very smart and strategic when they created USDA to do housing
because housing in rural America is different than housing in
urban areas. The incomes for folks in rural areas are much
less. It is harder to find jobs in rural America. Which means
if you have a product that requires a down payment, they would
not be able to get into housing.
That is where Congress created USDA and, boy, we were so
lucky because of that forethought to say we have a program that
has zero percent down and 100 percent financing and we have it
in every state, where we have staff that meet with customers
and our staff meet with the nonprofits that are there. We are
different than any other housing organization in our Federal
Government. We are customer-based. We talk to the customers.
The other reason the customers are so good with us is
because we have that product, zero percent down, 100 percent
financing. Our foreclosure rates and default rates are lower
than almost any other program in the Federal Government.
Congress did a great thing. We are going to build on that
success and change people's lives more with homeownership
through USDA.
Mr. Neugebauer. Well, I don't disagree that you have some
programs that people are utilizing. I think what I am saying is
when you have programs in the government, you have duplicative
overheads; so you are paying people to administrate that
program, but we are also paying people at HUD to administer
some very similar programs where they offer either low or no
down payment programs.
And so the question, and it is a legitimate question, is I
am sure you have very capable people. Those people, if there
was some consolidation would be welcome to be a part of,
possibly that consolidation; but to me it doesn't make a lot of
sense to have all of these different housing programs spread
across the entire government, particularly at a time when those
direct loans you are making, the taxpayers are having to go out
and borrow that money for you to make those direct loans to
those individuals. So to the extent that we can figure out a
way to do that more efficiently, is appropriate.
Ms. Mensah, you mentioned in your testimony that Rural
Development has been working with various partners to best
serve America and with these private-public partnerships. Can
you give me a few examples of what kinds of partnerships that
you are talking about?
Ms. Mensah. Sure. Thank you, Congressman. I would like to
return to the Communities Facilities Program and tell you about
a recent hospital construction that I saw in North Dakota, and
in this case our private partner was a banking partner to do
the construction piece of the financing, and then we would come
later and take on a kind of risk that is very long-term tenor
of a loan; for those of you who have been in finance, 40 year
money. And that kind of partnership where a private bank often
comes in first, does the interim financing, and then we come in
later, that allows a lower income community, in this case for a
kind of facility that cash is modest, if we can stretch out the
tenor of that loan to 40 years, we have everybody in their best
box, and so I would speak to that as one kind of partnership
where we are in partnership with the private financial sector.
Mr. Neugebauer. I want to go back to something that
Congressman Conaway, Chairman Conaway, was talking about, and
it is something I am interested in as well. That is a great
public-private partnership, but there is not a lot of risk to
that bank if they have the Federal Government to be the take
out for the permanent financing. So I get that.
What I am looking for is those partnerships that want to
share some of the risk with the taxpayers. In this particular
case basically the taxpayers are taking most of the risk. What
I would think more is a public-private partnership is where
there is risk sharing. If you all have some examples of where
there is some risk sharing, based on Mr. Conaway's questioning
and my thoughts as well, we would like to see that.
Ms. Mensah. I think it would be appropriate for us to come
back to because we have partnerships in our utility work, with
our housing work, and with our business work. But what is
important here is that in many cases we do have credit
elsewhere tests where we have to be the sole source. We are
asked not to compete directly, perhaps though if I could just
ask for an example from Administrator Rikker's portfolio in
some of our business and industry programs where we are
explicitly taking not a full guarantee of the loan and where
the bank is making the loan.
Mr. Neugebauer. Mr. Chairman, just for the record, the GA
reported to Congress that 20 different Federal Government
entities administer 160 different programs on housing in our
government. I think that is too many.
The Chairman. Quickly, Mr. Rikkers.
Mr. Rikkers. Thank you. One of the flagship programs within
the business programs that we have at RBS is the Business and
Industry Loan Guarantee Program. Certainly it can guarantee
loans up to 80 percent, but as those projects get bigger, it is
only guaranteeing in some cases up to 60 percent. What those
B&I loan guarantees are able to do is really extend credit into
rural communities where lenders by themselves without that 60
percent guarantee may otherwise not be ready or available to
lend those dollars.
And I was in South Dakota in May and went into an industry
park and visited two of those projects where we extended that
capital in a town just outside of Sturgis, South Dakota, and
watched the work of these local lenders, met local lenders that
with our loan guarantee were able to extend that credit, grow
jobs, and create the economic development that the program is
intended to do.
The Chairman. Thank you. The gentleman's time has expired.
Mr. Peterson, 5 minutes.
OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE
IN CONGRESS FROM MINNESOTA
Mr. Peterson. Thank you, Mr. Chairman. I don't know who can
answer this or if you want to. But somebody at USDA, I guess
the Economic Research Service, came out with a study about the
best and the worst places to live in America. Actually you fare
pretty well down there.
Anyway, one of the things that Under Secretary Mensah was
talking about is providing young rural entrepreneurs a reason
to stay in rural areas, which we all want to do. But is it
helpful for somebody to publish this map? My county is in the
Red River Valley where Red Lake County was declared the worst
county in America to live in. It was 3,111. So a reporter that
picked up on this did this story. To his credit he came out to
Red Lake County and spent 2 days, and he came back and
basically said this information they came up with was a bunch
of nonsense.
Are you familiar with this, and why are we spending money
on stuff like this? I mean, how is this helping your situation.
Ms. Mensah. I share the frustration with you because I have
to answer questions about why are you championing rural
America? Just give folks bus tickets. Let people leave. Why are
you trying to make something happen? I so disagree with that.
What I see is that the 15 percent of America's population that
lives in rural areas, they understand why they are there. They
would love their communities to thrive. And we as Americans
need rural areas to thrive.
My father comes from Ghana, and in that country when you
don't invest in rural, the whole country suffers. And I believe
that that is part of our job here in Rural Development, to make
the case. Many of the communities that I know you and I know,
are absolutely beautiful places to live. When we can bring the
broadband, the housing, the businesses, they will thrive, and
they will help us all thrive. So I love being on the message of
thriving. And I am familiar with your map. I wouldn't like it
at all.
Mr. Peterson. You better tell the Economic Research Service
your view on this. So, when I am back home in August, in
addition to going over and defending Red Lake County, I also
went to another little town. This one is second to the bottom
in the country. They have struggled. They had a flood in 1997
and we rebuilt the town; but they have a business going on
there that is just phenomenal. It kind of started out of
nowhere, a retired farmer and his wife. And they are booming.
They are doing business in 56 countries. They are making some
kind of little pieces that are used in jewelry, and they are
shipping them all over the world. But part of the problem is
they can't get adequate broadband in that community. And I run
into this all over the place. I don't know how much money we
have spent on this, putting money into broadband and the farm
bill, the stimulus. We gave $2 billion to you guys in the
stimulus bill for broadband.
It seemed like the money that we spend gets sent out there
to overbuild existing systems and does not get out to the rural
areas where they are needed. Don Young and I have been working
on trying to get rid of the Universal Service Fund, take that
away from telephones and put it into broadband which needs to
happen, but the telephone companies apparently are geared to
the other thing or something, whatever it is. But how are we
going to get past this and get these communities, like Ada,
Minnesota where I was, broadband that they need?
Ms. Mensah. Okay. I am going to ask Administrator McBride
to speak to that. If I can just say that this is the thing I
hear the most. What 80 years ago was the telephone and its
importance; today it is broadband, and we are not giving up on
those communities.
Mr. McBride. Thank you for the question, Congressman.
Certainly we would be happy to meet with folks in your
community to see what we could do to be helpful. There was a
survey done of rural businesses in Michigan that found that the
annual revenues were $200,000 greater for rural businesses that
were connected as opposed to those that were not. So certainly
we are aware of the importance of getting broadband out into
those communities.
We do have a grant program community connect that might be
a fit for the community you are referring to if they do not
have existing service. With regard to overbuilding, the farm
bill does include restrictions on how many service providers
can be in a particular applicant's area before we fund a loan;
so we do try to be diligent about going into communities that
do not have service.
Mr. Peterson. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired. Mr.
Thompson, for 5 minutes.
Mr. Thompson. Thank you, Chairman. Madam Secretary,
Administrators, thank you so much for being here, and thanks
for what you do as well. I heard the word thrive being used. I
would have to say that the only way that urban America, and I
know that is the 25 percent of the land mass that we are not
really talking about today--it is the 85 percent of the
population--the only way urban America thrives is if rural
America thrives.
We provide their food; we provide their building materials;
we provide their natural resources; we provide their energy.
And people work hard to do that, those of us who live in rural
America. So my personal experience with your agency has been a
very positive one. I appreciate how when the communities work
hard and they apply for these loan funds, I give them all the
credit because it is their due diligence. It makes a difference
to those communities, and they have gone the route of looking
to the private-sector first. They have exhausted those
opportunities and resources.
Many times it is a collaboration. It is a true great
examples of public-private partnerships. And so I want to thank
you for what you do, and the fact is that if, how you serve
rural America, because once again, if rural America fails, this
country fails because those are just basic fundamental needs.
A couple of specific questions, starting with Administrator
McBride, rural electricity, I am hearing a lot about the
President's Clean Power Plan, and I am just curious, how will
that, the President's Clean Power Plan, affect your loan
portfolio?
Mr. McBride. Right now we are not sure exactly how the plan
will affect our portfolio because the states need to develop
their plans now in response to the EPA's rule. We are in
contact with our borrowers, with rural electric. We have a
strong partnership with them. So we are trying to watch this
situation as it evolves and make sure that we are ready to help
our borrowers respond to the end result of the new rule.
Mr. Thompson. I have significant concerns. I work very
closely with the rural electric cooperatives. They provide some
of the most affordable kilowatt hour rates. They use a very
diverse portfolio. They need to be able to do that. They have
already been impacted with the war on coal, the closing of
coal-fired power plants, even the closing of waste coal power
plants, which essentially are cleaning up some scars from 100
years ago. It makes no sense. So I have tremendous concerns on
that. I look forward to keeping in contact with you on that
issue.
Mr. McBride. Yes, sir.
Mr. Thompson. Administrator Hernandez, once again just
revisiting the Community Facilities grants and loans program,
which I have seen a lot of success in my rural communities. And
the gentleman that runs Pennsylvania does such a great job, a
former staffer here on the Hill for a Democratic Congressman,
and so I appreciate his communications. The President's Fiscal
Year 2016 budget request zeroed out the Community Facilities
Guaranteed Loan Program and substantially increased the
Community Facilities Grant Program.
So my question is, what was the rationale behind this, and
do you view grants as more efficient use of taxpayer resources
than guaranteed loans; and can you compare the workload for the
approval process for a grant to that of a loan guarantee?
Mr. Hernandez. Thank you, Congressman. The Community
Facilities program has both grants and loans as you know. A lot
of our communities can't take all of the loans, so they look
for other ways to reduce their burden by getting a grant. And
so we give grants also to increase their capacity so they can
apply for more loans. So we do both.
We want people to have access to lower cost money. That is
up to 40 years. But the grants sometimes give them the capacity
so they can apply for the loan dollars. So we are actually
training folks how to compete better for the loans, and that is
why we do both. It is usually the same people that are doing
the loans that are doing the grants, sir.
Mr. Thompson. Any insight as to why the President's budget
request would have zeroed out the guaranteed loan program?
Mr. Hernandez. From what I understand from our customers,
they keep asking for lower cost dollars. When we do a
guaranteed loan it is a little higher because that is the
market that is setting the price. And so when we do a direct
loan, we have the flexibility to do both; and that is why a
lender sometimes only wants to do part of the risk, so we work
with them to reduce the risk so we can partner in both.
So we always need more dollars in the direct side because
that is where we actually have more funding available.
Mr. Thompson. Okay. Thank you. Thank you, Mr. Chairman. I
yield back.
The Chairman. The gentleman yields back. Ms. Plaskett, for
5 minutes.
Ms. Plaskett. Yes thank you, Mr. Chairman. Good morning
everyone. I had a question for you, Administrator Rikkers about
REAP, about Rural Energy for America Program projects. It has
had a good bit of history under its belt by this time, and I
wanted to ask you what do you find to be the projects that you
are focusing most on; and how does that differ from projects
potentially 5 years ago? What is the trend now?
Mr. Rikkers. Thank you, Ms. Plaskett, and its Rikkers for
the record.
Ms. Plaskett. Rikkers. Thank you.
Mr. Rikkers. Yes thank you. First I want to thank this
Committee for its commitment to the Rural Energy for America
Program, REAP as we know it as. You asked specifically what is
the status of REAP today, and what does it look like compared
to 5 years ago?
We have had a year where we have had more than $80 million
in REAP grants and a record number of REAP loan guaranteed
dollars obligated that we will do this fiscal year, and I am
proud of the work of our staff both in the national office and
the field for that work.
Just touching on the point that has been made a couple
times about the private-public partnerships even with the REAP
grants, that is only 25 percent of a project; and so every time
the Federal Government invests $25 in REAP dollars in a grant,
that is leveraging $75 in private investment into those rural
small businesses and agricultural producers that are using
those dollars to make investments in renewable energy systems
and energy efficiency improvements.
Ms. Plaskett. And what are farmers and your applicants,
what kind of projects are they most interested in right now?
Mr. Rikkers. The projects really span a gamut of renewable
energy systems and energy efficiency improvements, whether that
is solar, wind, anaerobic digestion. We have geothermal and
hydro.
I think part of when you really make the comparison between
now and 5 years ago, what we see is because of the outreach of
our staff, we are reaching further and are more geographically
diverse. That is we are spending the REAP dollars not in just
one area of the country. Five years ago REAP dollars were
investing probably predominantly in the Midwest. We really have
seen 36 states this year alone have used their entire REAP
allocation on the grant side. And so we are really proud to see
the REAP dollars going across the country to the various
different types of technologies.
Ms. Plaskett. Well, I am very interested in the project
particularly in an area like the Virgin Islands which has
limited resources in terms of fossil fuel energy that we are
able to use. The cost is really astronomical. And we have the
natural resources that would make alternative energies a really
good place.
And how do we capitalize on that for our farmers to be able
to be much more productive. We have a 31 percent child poverty
rate, and we have rural farmers who are really committed to
getting the technical assistance and support to be able to be
part of some of our nutrition programs and support for their
own communities rather than also feeding those outside to
really make that leap, so your program would be something that
I know we would be interested in.
Madam Under Secretary, one of the questions I had for you
was in terms of the large portfolio of loans that you do, $200
billion invested, upwards of $20 billion alone assisting rural
areas throughout the United States. I addressed and spoke with
your Secretary, Secretary Vilsack, written to him about the
support that is needed for those areas which really have a
great need of rural development areas. Most of my colleagues
here who come from rural areas understand the need for your
agency in particular and how important it is for basic
infrastructure and support, not just in terms of utilities, but
municipal buildings, schools and such.
Can you tell us a little bit--I know that my time is
running out--how that can be helpful to places like the Virgin
Islands and others which are really isolated. We haven't had a
school built in over 30 years because we just cannot on our own
support budgets like that.
Ms. Mensah. Thank you for your question. My focus on core
programs and on our people is exactly the way we are going to
get to our poorest areas, to what I like to call our last mile,
the unfinished work.
Our core programs like our Community Facilities are the
kinds of programs that can be used for a school, for a
hospital, for a police station. Those are the things I have
toured. And our investments that you have enabled us to make in
our staff allow us to keep people local so that they can reach
places. They understand. They live in those communities
themselves, our own team.
So the two areas, core and our people, really has allowed
us to focus to get that kind of core development and not just
skim the surface but to go deeper.
Ms. Plaskett. I am looking forward to working with you on
that and any support that you can give. And thank you very
much, Mr. Chairman, for the time.
The Chairman. The gentlelady yields back. Mr. Scott, for 5
minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. Madam
Secretary, I want to thank you for mentioning Second Harvest of
south Georgia. My colleague Sanford Bishop and I have both had
the privilege of representing the communities that they serve,
and we were both there for the ribbon cutting; and that is a
wonderful mission that those people take very seriously, and
they take action to make sure that people have the food that
they need across a large geographical area. And while it might
be the second largest in terms of meals served, it probably
serves the largest geographic area of most of the food banks in
the country. So thank you for acknowledging them.
Many of my questions have been asked. I look forward to the
responses on the risk-sharing and the percentage of risk that
we are taking versus the private-sector and the loans that we
guarantee. I had questions about the zeroing out of the
President's budget which were asked by Mr. Thompson just before
it came over to me.
I guess one of the questions I have, when we look at the
budget, is there a difference in the workload of the agency
among the direct lending, the participation lending, or a
grant? Or is it about the same amount of work per procedure?
Ms. Mensah. Let me ask my colleagues to give a couple of
examples. But let me start by saying, direct lending, that is
our toughest when we take on all the underwriting
responsibilities, and whether that is in our housing program or
the way we run our water program or the way we underwrite a
business loan.
We have actually had some great successes in the way we
have reduced workload, and I want to ask Administrator
Hernandez to speak to the way we changed processes in our
guaranteed housing program. That is our biggest program. We
will nearly do $20 billion of guarantees this year, and we have
been able to streamline that efficiently and really change the
workload. Can you speak to that.
Mr. Hernandez. Sure can. Congressman, one of the major
feedback we receive from our customers is getting more
predictability in how we deliver services. What they have asked
us to do is to come into the 21st century with automation. We
are one of the only agencies that has a housing program that
hasn't automated like other agencies. We are moving that
direction now. We now with our process improvement save more
than 37,000 reams of paper and can get an answer back in 48
hours. Where before it used to take us 8 weeks, 12 weeks to get
an answer back because we didn't have the automation.
Just this last year we have implemented this what we call
loan net guarantee and automatic loan closing. It saves the
private-sector a significant amount of money but allows us to
share the risk with the private-sector. The other reason that
is so good is that there are more lenders out there that have
access to capital for our customers that would not get it any
other way if our lenders weren't there because our customers
would not qualify for any other mortgage products. So we have a
nice distribution system. We save them time. We save them
money. And we are focused on the customer.
Mr. Austin Scott of Georgia. My question was does one take
longer than the other from the standpoint of the workload of
the people that work in your agency? And one other thing, these
loans are still originated from a mortgage broker or a bank
when they happen; right? The average American citizen doesn't
know this loan is available to them unless somebody that they
are relying on to advise them tells them about this. Correct?
Mr. Hernandez. That is correct, sir.
Mr. Austin Scott of Georgia. So a bank or a mortgage
broker----
Mr. Hernandez. That is correct, sir. The loans are easier
to do on the guarantee side because we have the automation that
is there. The direct side, we don't have the automation yet. We
will have that automation for the direct side in about 12
months.
Congress was very good to invest additional dollars for us
to have automation. The reason we need both products because
people who may not qualify for the guarantee, but they qualify
for the direct. That is where Congress has given us more
product variety to help more folks become homeowners, so it
takes longer to do a direct loan than it does a guarantee, sir.
Mr. Austin Scott of Georgia. So if I can make one further
point, is that the American citizen who needs this loan doesn't
know about it. It is a bank or it is a mortgage broker or
somebody who advises them of the ability to get this loan.
One of my concerns, one of the things that has held the
economy back, quite honestly, has been a position towards those
industries from the Administration at a global picture, not
necessarily in your agency. Do you see any potential
restrictions on who can help originate those loans?
Mr. Hernandez. There are restrictions. We are actually
expanding how we are helping more and more customers by working
with nonprofits, so they go out and find customers for the
direct loan because we have had a reduction in staff over a
number of years now. So we need to find another way to do
outreach. So we need the trusted advisers like you are talking
about. The realtors are very important, the lenders, but also a
nonprofit to try to find the customers and educate them both on
their options and do home buyer education. So we are trying to
expand our outreach so we can get more customers.
On the direct side we usually go through 20 customers until
we find one that is qualified, sir, on the direct side. We have
to work real hard to find the right customers who have the
ability to pay back. But we are expanding our resources by
using our nonprofits, lenders, and realtors. And with the
investments you have given us, we are doing automation to make
that program more effective and more efficient.
Mr. Austin Scott of Georgia. Mr. Chairman, I would just ask
that we not push the private-sector out simply because we want
to bring nonprofits in, sir.
The Chairman. Thank you. The gentleman's time has expired.
Mr. Ashford, 5 minutes.
Mr. Ashford. Thank you. I would like to just talk about
two--the Vice Chairman made a great point about housing, I
thought, and about the number of programs that exist in the
Federal Government on the HUD side and on the Rural Development
USDA side. I ran a housing authority in Omaha for 3 or 4 years
and was familiar with those differences and those
jurisdictional boundaries.
It really causes--it seems to me, and the point that was
made by the Vice Chairman is a really good one, is are there
not, Administrator Hernandez, more opportunities, should be
more opportunities for collaboration between rural housing
opportunities and urban housing opportunities, especially in a
place like Omaha, Nebraska, where what we want to do,
economically, is we want to provide opportunities for urban
people who are now living in an urban area to live in more
rural areas to provide----
One of the things that is really holding our economy--our
economy is doing very well. We have the lowest unemployment in
the country and a lot of it is because of our ag-based sector.
But we see opportunities to bring urban people into the
rural areas to help increase the economy of our state and
especially hopefully as we increase trade through TPP and some
of those programs, we need workers, and housing is a critical
element to that, the point was made very well by the Vice
Chairman to say, why do we have these--I know why we have
them--but isn't there an opportunity for a collaboration
between the two?
Mr. Hernandez. Thank you Congressman. There is tremendous
opportunity for collaboration, and we do that all the time. We
have a number of committees trying to find ways, task forces to
see what we can do better together. The difference really is
who the customer is. USDA focuses only on rural. We are the
only agency that has a mission just for rural America. We are
the only one. So our expertise is better than anybody else in
trying to solve problems in rural America.
So we look forward to giving advice to other agencies, how
we do it so well so they can find the efficiency and
effectiveness that we have and maybe they can model what we are
doing.
Mr. Ashford. I think the point though is to just say we
have rural America and urban America and draw those lines in
the world that we are living in now with technology; we are
talking about the Internet and about economies being not wedded
to an urban area and rural area, that bifurcation, it doesn't
make any sense to me.
And in practice, in a city like Omaha, where we want people
to go back and forth between rural areas and urban areas where
the jobs are, housing is a problem there. That is all I am
saying.
And I think the more we could--you are right. Your agency
does very innovative things, and I am aware of that, of those
things, and housing authorities under HUD could learn from
those things. But it is about people, not houses.
So what we really need to do is figure out a way to get
people into rural Nebraska where really we need workers and
provide housing for them and some of these programs that you
do, interfacing with just letting people know who live in a
housing authority, to letting them know that there are jobs out
in Skyler, Nebraska, or Red Cloud, or wherever it is. And the
housing, there is just that communication would be tremendously
helpful to our state.
Mr. Hernandez. I agree, sir. We need to find a way to
enhance education for our customers so they have a better
opportunity to see which products work for them.
Mr. Ashford. Right. And second, it is on another topic, and
I want to get the names right here because I don't want to miss
the names. Our Agriculture Marketing Services State Director,
Maxine Moul, who was the Lieutenant Governor of Nebraska and a
great friend, and I served with her, and of yours as well. We
had a great marketing collaborative session in Omaha, and
talking about the opportunities for expanding food production
in urban and rural Nebraska, and Maxine did a great job.
But I want to compliment Anne Alonzo who was there as well
who did a great job explaining all the opportunities. We really
are doing some great initiatives in urban food desert things,
and Anne was super as was, and I don't want to get this name
wrong because she did such a great job so I am going to take my
time and look, but my time is almost up.
Anyway, I just want to thank the Department for what was
really a great session: 150 people participated thinking about
what we could do to bring urban and rural Nebraska together
using food as the catalyst. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired. Mr.
Crawford, for 5 minutes.
Mr. Crawford. Thank you, Mr. Chairman. And Madam Under
Secretary, thank you, and the Administrators for being here.
I am going to start with Administrator McBride. In February
Politico published an article highlighting the 116 percent
default rate for Broadband Loan Program. Since then we have
been informed this was a miscalculation, and comparing
government loans to loans in the private-sector is actually not
a true apples-to-apples comparison. Can you expand on that
situation and give us a better understanding of what the true
default rate is for that program?
Mr. McBride. You are referring to the farm bill loan
program? That program was originally authorized in the 2002
Farm Bill and subsequently updated in the 2008 Farm Bill. Under
those authorities we have made 100 loans. The default rate is
21 percent. Most of the defaults occurred very early on in the
program. We have learned a great deal of lessons since then,
and that is reflected certainly when you look at the other
programs that we run and the defaults have decreased under that
program.
We have two other loan programs that support broadband
expansion. One is our Telecommunications Infrastructure Loan
Program. Since 2009 we made 161 loans under that program with
only one default, and under the stimulus program we have funded
255 construction projects and expect to have only one default
at this time.
Mr. Crawford. Where did they come up with that number, 116
percent default? I mean that seems, based on what you are
telling me, that seems pretty out in left field.
Mr. McBride. The number was not intended to reflect a
default rate. It should not have been in that, in the place
where it was in the chart. It was not intended to reflect our
default rate.
Mr. Crawford. Okay. Thank you for clearing that up. Now
that the new regulations for farm bill loan program has been
published, what kind of loan demand are you seeing?
Mr. McBride. The program is open right now and is open
until September 30. We expect the program to be oversubscribed
this year. As the stimulus winds down, there are a number of
service providers who are looking to come back to the farm bill
loan program.
Mr. Crawford. There was a report in May of last year, a GAO
report, the agency recommended that USDA do a better job of
identifying the characteristics of loans that may be at risk of
rescission or default and that the Department align the goals
in its annual performance report to the loan program's purpose.
Recently the Department issued a proposed interim final
rule to revise the current broadband program regulations. Did
the Department take into account the GAO recommendations when
developing the new proposed rule?
Mr. McBride. Yes, and we also tried to follow the
instructions that Congress gave us in the farm bill.
Mr. Crawford. Okay. What changes, if any, are being made,
and how do you expect the new rules to improve the
administration of the broadband program and the accountability
for taxpayer dollars?
Mr. McBride. The key change to the program that was
actually provided in the farm bill is the reporting
requirements where applicants, the applications and the service
areas that they intend to provide service to will be posted
online; so taxpayers, Members of Congress, whoever, can go
online and look at the applications that we have received and
where the service areas will be.
Mr. Crawford. Okay. Excellent. Let me ask you about rural
water, a couple of things here. In order to provide safe,
healthy, and affordable drinking water and comply with the Safe
Drinking Water Act and other Federal statutes, rural
communities require technical expertise. I hear about this all
the time at home, the circuit riders that are relied upon. How
does USDA ensure rural communities have access to technical
expertise to operate, maintain, and manage rural water systems?
Mr. McBride. Congress gives us funding for two different
programs that support that kind of assistance. One is the
technical assistance program, and the other is the circuit
rider program. And we work closely with the different
organizations that provide those types of services and make
sure to connect them with communities who need assistance. And
our state offices do a great job of helping with that.
Mr. Crawford. Are you seeing an increase in demand for
those services?
Mr. McBride. Yes, Congressman.
Mr. Crawford. Okay. In the time I have left, it is our
understanding that changes at the Census have driven changes to
the formula that the agency uses to determine eligibility for
rural water programs. Can you talk about those changes, how the
Department is trying to mitigate the impact of those changes on
rural communities and how the Department is working to
publicize those options for those who might be affected?
Mr. McBride. The changes in the Census data can have two
different--there can be two ways that can affect us. One is if
a community exceeds the 10,000 population limit, and we usually
know the communities who are looking to submit an application,
and we try to share information on other Federal programs that
could assist them with their project.
The other change could be the median household income which
we take into account when determining grant-to-loan ratios, so
those are the two potential impacts from the Census data.
Mr. Crawford. Thank you. I yield back.
The Chairman. The gentleman yields back. Ms. Adams, for 5
minutes.
Ms. Adams. Thank you, Mr. Chairman. And thank you for being
here to our panelists.
Rural Development administers the Business and Industry
Guaranteed Loan Program which--and this question will be to the
Secretary--for local and regional food projects.
And a few weeks ago, staff from the B&I program
participated in a call to discuss the program with my staff and
the fundraising staff for a local food retail in my district,
the Renaissance Community Co-Op. It has broad community
support. It is an important opportunity for improving food
access in one of the food deserts in East Greensboro, but
unfortunately Renaissance cannot qualify for the B&I program
because they are not borrowing from a USDA preferred lender
such as a chartered bank or a credit union.
Instead they are borrowing from a Treasury Department
Certified Community Development Financial Institution. They
chose this route for financing the food co-op because the cost
of borrowing is lower than through a traditional bank. And my
question is, what is USDA's rationale for excluding CDFIs as a
preferred lender from the B&I program?
Ms. Mensah. Thank you, Congresswoman Adams, and I will ask
Administrator Rikkers to speak to this. As someone who has
worked with Community Development Financial Institutions for
most of my professional life, we certainly understand their
importance. They work with us in other parts of the program,
perhaps not in the B&I program. Administrator Rikkers, are you
familiar with a case of----
Mr. Rikkers. Representative Adams, I am not familiar with
that specific case, but I understand the issue. CDFIs are an
important partner across many of our programs, and we have used
them under the B&I loan guarantee program.
If a CDFI is connected or partnered with a traditional
lender and bank or a credit union, which many CDFIs are, then
we can work with a CDFI.
In those cases where a CDFI is not connected to a
traditional or regulated lender, there is a route for CDFIs to
qualify under the B&I program as a nontraditional lender. And I
am happy to circle back with your staff and work with our staff
to see if those avenues have been explored.
Ms. Adams. Thank you. It seems that the B&I program is
oriented toward rural areas with fewer lending options, and we
have a concern about that.
But for food deserts in urban areas in the Twelfth
District, the B&I program is one of the few funded programs
that can improve food access, and we have a serious problem in
the Twelfth District, particularly in the triad area in terms
of food insecurity.
So I hope to work with USDA, going forward, to make sure
that my district can better utilize this program, which is
authorized to improve food access in both urban and rural
communities; but it seems like we are kind of getting the short
end of that stick, so we would be happy to talk to you further
about it.
Thank you very much. Mr. Chairman, I yield back.
The Chairman. The gentlelady yields back.
Mr. Yoho, for 5 minutes.
Mr. Yoho. Thank you, Mr. Chairman. I appreciate it. I
appreciate the panel being here.
Chairman Peterson and I grew up in Minnesota, and I can
understand why that is. I remember two seasons up there: winter
is coming and winter is here. And I remember the state bird
being a mosquito. It was so big, it had feathers.
Getting back to the question here. Administrator McBride, I
want to thank you for the work you did with our office in our
district for the rural broadband. I would encourage anybody in
here to reach out. You guys did a stellar job helping to solve
or to bring up solutions to get that into our area, and I just
want to thank you for that.
I want to kind of go back to Mr. Thompson's question. In my
district in north central Florida, I have more EMCs municipal
cooperative power companies than anywhere else in our state.
And these companies rely heavily on RUS loan program which
helps keep energy affordable in my rural district and districts
across the country.
Due to the President's new Clean Power Plan, I have been
hearing concerns from my folks back home, the cooperatives. And
I want to kind of go off of his question: How do you expect the
CPP to affect your loan portfolio? That was asked specifically.
What will happen if the coal power plants with outstanding RUS
loans cannot meet the requirement by the EPA? And if they have
to shut down their doors, how is that going to affect you?
Because we have some plants that are scheduled to run for
another 15 years.
Mr. McBride. Thank you for the question.
We have about $4.5 billion invested in coal power plants
that may be affected by the EPA rule. At this time, it is
unclear exactly what the impacts will be and how the state
plans will be developed. We are in touch with our co-ops and
want to work with them as they transition into this.
Mr. Yoho. If a state does not adopt a plan and we see our
power plants close with these active loans, is that a
possibility for default for you guys? Has that happened before?
Mr. McBride. I am not sure. I don't want to speculate on
what the state plans will be.
Mr. Yoho. Was your agency in communication with the EPA on
the rule writing in saying we have a certain amount of these
plants that are in existence, they have a life span of 10 to 15
more years, is there a way they can be grandfathered in and
weaned out of that so that they can adapt?
Mr. McBride. Yes, sir, we were in contact with them and
they developed the rule.
Mr. Yoho. Under Secretary Mensah and Mr. Hernandez, to
reiterate, that you said we have $200 billion in loans and your
default rate is very small, on your zero down, 100 percent
financing, if I go back to the housing bubble--and we heard a
lot of horror stories how this led partly to that--how long has
that program been back in existence, or did it ever go out of
existence? Did it ever go out zero down, 100 percent financing?
Mr. Hernandez. Congressman, we are very fortunate this
program was created under the Farmers Home Administration, so
we have been in existence for over 40 years, and the program is
still being very successful. But it is a small part of our
program. The largest program is one we use with the private-
sector. That is our guarantee program.
Mr. Yoho. Let me ask you this: Do you hold those loans in-
house?
Mr. Hernandez. We do.
Mr. Yoho. You don't rebundle them, repackage them, and sell
them to the private-sector?
Mr. Hernandez. We do not, sir.
Mr. Yoho. That leads up to a question I had yesterday. The
USDA is doing these loans, so you are the servicer of these
loans too, and it is a duplication of the private-sector, it is
competition with the private-sector. Is there a way to devolve
from the Federal Government, and do what you do as far as
guaranteeing them and stand behind them, but yet, let the
private-sector do them so you don't have a bank within the USDA
and the bureaucracy that goes with that? What are your thoughts
on that?
Mr. Hernandez. Sir, the larger problem we have with the
guarantee program is that private-sector service those. So we
do about 140,000 loans a year. The private-sector does all
those.
Mr. Yoho. These are the ones that are 100 percent
guaranteed by you?
Mr. Hernandez. Both of our products are 100 percent
guaranteed. The largest one, the private-sector does for us.
They originate it and they service it. So that is 140,000 loans
every year. We do a smaller part, which is 7,000 loans per
year, which is the direct loan. That is the smaller part. So
the biggest one, we are not competing with the private-sector
at all. We are actually partnering with the private-sector.
Because when they cannot do a loan, they refer it to our direct
program so we can find another way to help that customer if
they can pay back the loan.
Mr. Yoho. So what is the purpose holding that within in-
house instead of once you guarantee that loan, transition it
out, so, again, you are not a bank, the Federal Government is
not acting as a bank?
Mr. Hernandez. Well, Congress has to give us some authority
so we can do something that way. Right now, if we were to sell
those loans, which we don't and cannot, all that money goes
back to the Treasury and doesn't come back to the agency. So if
that is what Congress wants to do, Congress can write the loan
so we can do that.
Mr. Yoho. I just want to give you guys a thank you because
you guys have financed so many things--a rural water treatment
system in our area, rural hospitals--and you do a great job.
Thank you.
I yield back.
The Chairman. The gentleman yields back.
Mr. Allen, for 5 minutes.
Mr. Allen. Thank you, Mr. Chairman. And thank you, panel,
for joining us today and all that you do. Also, I want to thank
you for, as my colleague mentioned, the Second Harvest of
Georgia. We have met with them many times and are looking
forward to seeing the great work that they do, and thank you
for that.
There is one thing. In the 12th District of Georgia, we
just need better cell service. I am telling you, it is tough
traveling to that district when you keep breaking off calls,
and, of course, we stay on the phone a good bit. So if we can
keep working on that. I know you are.
And, also, as Congressman Yoho mentioned, we have a lot of
EMCs in our district, and they have put a lot of money into
many of these coal plants meeting the current requirements as
set by the Congress. And, of course, we know the EPA has
stepped over that. But they have a tremendous investment there.
They are very concerned about, again, retiring that debt and
getting the life out of those plants. So we need to be sure
that the other folks know that, and know what a critical
situation that is. They are very concerned about that.
As far as the, Mr. McBride, in 2013, USDA finalized the
Energy Efficiency and Conservation Loan program that was
designed to help co-ops promote energy efficiency and renewable
energy to their consumers. This saves energy while also saving
consumers money on their energy bills. Do you have a success
story that you would like to share with this program and how
can we make this program more successful?
Mr. McBride. Thank you for the question. We have two great
stories, one in Arkansas and one in North Carolina, where they
took advantage of the Energy Efficiency and Conservation Loan
program. We are able to help their customers make improvements,
new heat pumps, weatherization practices. The Roanoke
Cooperative in North Carolina actually has an on-bill fee that
they charge their customers, and the customers' bills are
actually lower with these new energy efficiency improvements.
So we have seen success in those two projects.
We are working with the different electric cooperatives to
expand the program. I think something like 96 percent of the
electric cooperatives have some kind of energy efficiency
program. And so we feel they will have a great interest in
this. We are trying to communicate with them and provide
information that they might need as they develop their
potential applications.
Mr. Allen. That is good. And, again, thank you for your
assistance with that program.
As you know, in 2008 and 2014, the farm bill has included
ways that RUS could help their co-ops increase energy
efficiency for the benefit of their consumers. How is RUS
helping co-ops increase energy efficiency and what more can RUS
do to promote these efficiency programs and make them
successful?
Mr. McBride. The primary way that we are working with them
right now is through the EQIP program and sharing information
about that program, success stories in Arkansas and North
Carolina, and making sure that they have the information that
they need. We have a special partnership with the electric
cooperatives. Our agency talks with them frequently and shares
as much information as we have and try to help them as they
consider potential energy efficiency improvements.
Mr. Allen. Have you ever been to one of their annual
meetings?
Mr. McBride. Yes, sir, I have. I was there last week.
Mr. Allen. Really? That does your heart good, doesn't it? I
will tell you what, those folks are doing a great job for us.
Well, thank you, and I yield back, Mr. Chairman.
The Chairman. The gentleman yields back.
Trent Kelly, for 5 minutes.
Mr. Kelly. First of all, Madam Under Secretary, you have in
your testimony about a gentleman, or a person, Ivory Smith, of
Poplarville, Mississippi, and what a success story they are in
the Armed to Farm program. Of course, that combines two of the
things that I love the most, which is my State of Mississippi,
although not in my district, and also our veterans.
So I just wanted to thank you for that and thank you for
recognizing that success story and which we hope will continue
to be a success.
I spent the entire month of August in town hall meetings,
being the newest Member up here, doing nothing but town halls
or being engaged in all 22 of my counties which I represent,
and over and over, whether it be large or small towns involved.
And over and over again, the main concern that I got was the
amount of regulation which we are getting across the board,
whether it be in agriculture, or whether it be in banking or
whatever, that just our small, local regular businesses can no
longer perform and it is shutting them down and taking away
opportunities. Whether that be a Dodd-Frank or whether that be
waters of the U.S. or whether that be a number of other things
that we have the Clean Power Plan, all those things are
regulations which are putting restrictions on our most rural
customers, who, a lot of times, don't have the technology, or
don't have the access to technology, or don't have the income,
or don't have the education, in order to comply with these
regulations which seem like a good idea at a high level, but
they are not at the end-user level.
What are you doing to help, or what is Rural Development
doing to help them not only to comply with the regulations but,
first of all, to understand what regulations they have?
Ms. Mensah. Thank you, Congressman.
My first trip as Under Secretary was to your state. And
what I saw that our agency is in a special place to do is that
we are on the ground with the kind of citizens who are trying
to borrow from us. Most of our programs are loan programs. And
so our team--we have state offices, area offices--are able to
sit with the people who come to us for water loans, for
broadband loans, for community facilities. And while the
applications can be long, we don't just leave people alone. We
are able to work with them. I was able to announce one of our
intermediary relending programs, where we are lending to an
intermediary who then is making a grant to an intermediary who
then makes more loans. So we try hard to be in a position that
is forward looking to work with the local borrowers.
I am appreciative of everything this Committee has done to
invest in our core programs and in our people to do that job.
Mr. Kelly. Thank you again. I want you to just know how
grateful I am for what Rural Development and USDA as a whole
does for my state, and I appreciate that.
On the broadband issue, Administrator McBride, I have a
specific incident, and I won't mention names and those kind of
things, but they got in on the pilot program of the broadband.
And because they were involved in the pilot program, they are
no longer eligible for any other programs for any loan things--
this is what they are told--is because they were part of the
pilot, they are not--do not have. Some of the later programs
are better programs. And they are very important. They have
been very successful. They brought broadband to areas in my
district which otherwise would not have any Internet service
whatsoever.
What, if anything, can you in your job do to make sure that
if we have success stories where we are using the taxpayers'
money wisely to bring those services to the people that were
intended, that they are able to go out and not to forfeit on
their loans, which they haven't done yet, but at the rate they
are going they will, unless they can get more assistance to
help them to ensure that they are doing it. Because they have
been successful, but the amount of rates go down over time that
you get back. And the bottom line is the big companies are not
going to come in there and run broadband, so there is no one to
replace it, so there is no service. So when the rates get so
high that they no longer get the credit from USDA, or from
Rural Development, then they just lose service because they
just forfeit and can't pay it anymore.
Mr. McBride. Thank you for the question, Congressman. I
would be happy to visit with the folks that you are referring
to and see if there is anything that we can do. As the Under
Secretary referenced, we want to work with all of our potential
applicants in all the rural communities that we deal with. And
while we are working very hard to follow instructions from
Congress and our regulations, we also want to work with folks
to be as selectable as we can to make sure that their projects
are successful and see them provide the kind of services that
they want to provide to rural America. So I would be happy to
visit with the folks that you are referring to.
Mr. Kelly. I thank the panel, I thank you, Mr. Chairman,
and I yield back the remainder of my time.
The Chairman. The gentleman yields back.
Mr. Abraham, for 5 minutes.
Mr. Abraham. Thank you, Mr. Chairman. And I thank the
panel. Under Secretary Mensah, thank you for your support of
rural development. I will echo my esteemed colleague, Mr.
Thompson's comments, that the good people of rural America,
without them, the good people of urban America would be cold,
tired, and hungry every day of their life.
My district is very rural. I live myself in about the
middle of a soybean field. So we appreciate USDA's presence.
Most of what we hear is very positive on our end from the USDA.
I want to also echo Mr. Kelly's, and some other comments
here about the broadband. We certainly lack it. For our state-
of-the-art businesses, they can't do business as they should,
not as quickly and not as efficiently. I was in Lake
Providence, Louisiana, this past Sunday at a prayer vigil for
our law enforcement and Lake Providence is a quaint town on the
banks of the Mississippi River. And I looked down at my cell
phone and had no service, didn't even have a bar. And this is a
city that has basically no service at all. So that is near and
dear certainly to my constituents that we need that and we need
it very quickly.
The question on these public-private partnerships, very
much needed, again. We are Louisiana Delta. We are in poverty
in much of where my district is. So we look for any method of
funding, and public-private partnership seems to be one of
those. But like has already been said here, we certainly want
the private enterprise to assume some of the risk because they
will certainly assume some of the benefit if it works, and we
don't want the taxpayers on the hook for the whole shebang, so
to speak.
So I guess my question is, what specifically are we doing
to keep the public aware and show them that these public-
private partnerships are out there? What kind of dialogue are
you guys having?
Ms. Mensah. Thank you so much, Congressman, for raising the
importance of broadband, but also asking what we are doing to
keep the public aware of the kind of partnerships we are
working on.
So much involves lender outreach for us--how we talk to our
lending partners, how we reintroduce programs. This, again, has
been such a strong year for us because of the authorities in
the new farm bill.
I would like to ask Administrator Rikkers to speak more to
some of the new outreach that we have pushed, particularly
around some of our newer facilities, our REAP facilities, our
renewed B&I, where we do ask people to come in, put their own
skin in the game, yes, get our guarantee, but they are on the
hook too.
Mr. Rikkers. Representative Abraham, thank you for the
question. There is also a project in Louisiana that is a
modeling of the partnerships that the Under Secretary is
referencing. There is a biodiesel facility that took a grant,
it was a REAP grant, about $370,000 in REAP grant--and,
remember, that is only \1/4\ of the grant cost--so a level much
larger that was invested by the private company that was asking
for that.
In addition, they combined that REAP grant together with
the $10 million B&I loan guarantee. And so if there is a
project in your state where they were taking multiple programs
from RD together with a private biodiesel firm and a private
lender, all packaging it together, ultimately opening up new
industries and developing an economy, a really vibrant economy
for rural communities.
Mr. Abraham. Thank you. Another quick question that kind of
ponies off of Mr. Crawford's question on this rural water
system. We have that issue also in my district. And I know
there has been a change in Census that actually affected the
change in eligibility of rural water systems. How are you guys
mitigating that? Again, how are you reaching out to the
stakeholders and keeping them informed, that type of deal?
Ms. Mensah. Things have changed.
Again, Mr. McBride, please speak to the Census change in
our water program.
Mr. McBride. Our water programs are actually run out of our
state offices. And so we have state staff who are in frequent
contact with the communities who would apply. And, of course,
you have organizations like the National Rural Water
Association who work with the communities to make sure that
they are aware of any changes, and work with them to find
alternatives in case their population now exceeds our 10,000
population cap.
Mr. Abraham. Thank you, Mr. Chairman. I yield back.
The Chairman. The gentleman yields back.
Mr. Moolenaar, for 5 minutes.
Mr. Moolenaar. Thank you, Mr. Chairman, for having this
hearing, and also for all of you for being part of this panel.
I find it very informative.
I wanted to follow up specifically with you, Administrator
McBride. I am from Michigan, and you had mentioned a Michigan
report on broadband that you referenced. One of the questions
that has been going through my mind is, when you think of a
state like Michigan, when you think of my district, which is 15
counties, fairly rural, in wanting to know kind of where we
stand relative to broadband and the needs of our local
communities, and then how we would work with your office to
advance these goals--obviously, you have a state office--and I
am just kind of wondering, it is more of a process question is,
how do local communities find out about the resources, how do
they work with your office, the state office, how would they
work with my office, so that we can all be working together to
kind of advance an agenda?
Mr. McBride. Sure. Thank you for the question. I would
encourage your constituents to start with our state office in
Michigan. We also have several regional offices in the various
states. I would encourage them to start there, and discuss the
type of programs that we have available. And then once there is
a consensus at the local level of how the communities would
like to proceed, we can meet with them and our state staff to
make sure that everyone is on the same page. Our state staff is
really the first point of contact because they can provide
information on the different loans and grant programs,
eligibility requirements, things of that nature, that would
help your constituents as they put a plan together.
Mr. Moolenaar. And if we wanted to share information about
the resources to start that dialogue, would we work with your
office to send something out or to have forms, those kinds of
things?
Mr. McBride. Yes, sir, we would be happy to work with you
on that.
Mr. Moolenaar. When you mentioned the Michigan report, I
have heard that as well in terms of just how just to be
competitive, you need access to those resources. Where are we
in this whole--and I guess rural America, not just Michigan,
not just my district--but where are we, if our goal was 100
percent coverage, where are we in that?
Mr. McBride. The SEC released a report earlier this spring
that showed that about 50 percent of rural America had access
to the same high-speed Internet that is available in urban
areas. So we have some work to do. We made a lot of progress,
but there is still work to do.
Mr. Moolenaar. And what would be the elements of a plan to
get to that 100 percent goal? Is it all a financial issue?
Mr. McBride. In a lot of instances, getting into the most
remote rural hard-to-reach regions is very expensive. And so,
we try to work with potential borrowers who want to do that
work and give them the resources that they would need. But
there is a lot of work that goes into that, both on the part of
the provider that would go into those communities and with the
agency to make sure that we are making loans that are
sustainable.
Mr. Moolenaar. Thank you very much, Mr. Chairman. I yield
back my time.
The Chairman. The gentleman yields back.
Mrs. Hartzler, for 5 minutes.
Mrs. Hartzler. Thank you, Mr. Chairman.
As being part of the 15 percent that you reference, I
appreciate your focus on rural communities in this country
because I am a little partial, but it is the best place. And,
as you say, I appreciate, Under Secretary, you saying that we
feed the world, and that is so true. What you do is so
important.
And I wanted to start with Mr. McBride there. We talked a
lot about broadband. But we have a rural electric cooperative
in my district who is just doing some amazing things putting in
broadband, and has provided over 2,000 customers now with high-
speed broadband that they wouldn't have had before. And I just
wondered how widespread is the use of rural electric
cooperatives to help fill this gap, and how can we promote it,
as well as what are some of the barriers to being able to
encourage them to reach out and provide this service?
Mr. McBride. Thank you for the question. A number of the
rural electric cooperatives are starting to provide this
service because there is a synergy between their smart grid
technology and high-speed Internet. And so we have seen a
number of our borrowers start to think along these lines to see
what they can do to expand broadband access.
From our perspective at Rural Development, we realize that
no one is working in rural America in a silo. Our communities
will be much more successful if we have partnerships between
the rural electric cooperative, between the telecommunications
cooperative, and the other utilities and industry in those
communities. So we try to encourage all of our partners, and we
try to work together as an agency to make sure that we are
working with communities to reach their full potential and
build out their infrastructure.
Mrs. Hartzler. Are you providing several loans to rural
electric cooperatives to pursue this?
Mr. McBride. We have made some loans on smart grid
technology, and I can follow up with you on the specific
number.
Mrs. Hartzler. I was wondering, just in general, do you
have maps in the United States showing places where people have
access to broadband and not?
Mr. McBride. Yes, ma'am.
Mrs. Hartzler. I would like one for my district, or
Missouri. I think that would be very helpful.
This is just a general question, Under Secretary Mensah.
Since your agency deals a lot with loans, there has been a lot
of change as to how loans are processed for private commercial
banks since Dodd-Frank. And I visited with them ever since I
have been elected to serve here and it is very, very, very
onerous. Getting a housing loan used to take five pages. Now,
on average, it is 50 pages that a homeowner has to go through.
And I just wondered--and maybe this would be also a question
for Administrator Hernandez--but after Dodd-Frank passed, have
you seen any changes to the paperwork that you have to do to
give a loan for housing?
Mr. Hernandez. Congresswoman, thank you.
Dodd-Frank is an important part for us to be in compliance
and so we work with our lenders. And part of our process is
trying to make sure that we automate our processes. And that is
why lenders have come to us and said if you change the way you
do business, it will make our participation a lot easier. So
there is more, we think more compliance, but we think it is
appropriate for us to make sure we are doing good loans and
there is good lending being done.
Mrs. Hartzler. So what changes, though, have you seen to
how loans are done before and after Dodd-Frank?
Mr. Hernandez. The major change is more education to the
home buyer to make sure they know what responsibility they are
taking on. That was the whole purpose of that, just trying to
make sure home buyers only sign the dotted line when they know
there is good lending and there is good compliance from the
lender's point of view. That is very important. So we spend
lots of time doing home buyer education with our customers
trying to make sure they know what they are doing is the right
thing and they can pay back the loan.
I can get you more specifics on what additional paperwork
or things that we are going through, so I can do that for you
if you would like.
Mrs. Hartzler. Have you had to hire more people in order to
comply?
Mr. Hernandez. Actually, we had lost a number of staff for
a number of years, over 20+ percent less staff. That is why
automation is so important to us. As we invest the dollars that
Congress has given us to automate more, it saves our lenders'
time, which a majority of our program is for private-sector due
to lending. So with that investment in technology, we can save
more time.
Mrs. Hartzler. Very good. And I have only 30 seconds left.
Administrator McBride, a lot of my small communities are
having trouble changing the way they treat their water, the
water treatment systems, because of the changes from EPA. So
what has EPA done that has caused this to happen?
Mr. McBride. Thank you for the question. I am not sure
exactly which regulation that you are referring to.
Mrs. Hartzler. There are so many.
Mr. McBride. I would be happy to work with your community
to see what we can do to help them comply.
Mrs. Hartzler. Thank you. I yield back.
The Chairman. The gentlelady yields back.
Mr. Gibson, for 5 minutes.
Mr. Gibson. Thank you, Mr. Chairman. I appreciate the
witnesses too. It is a very informative and helpful hearing. I
just want to express my gratitude. These programs are essential
to my district, and generally we are very pleased with your
responsiveness and the way things are going, so thank you for
that.
The broadband issue is one we have been involved with in my
office--2011, an amendment on restoring funding for the low
interest loan program involved in the farm bill with some of
these reforms that Mr. Crawford was mentioning earlier. I
appreciate your responsiveness to all this. And, really, I
agree with your point that we have certainly learned from some
earlier challenges and looking to perfect the program.
So my question really is that I was encouraged to see you
have a report coming soon, the collaborative work that is being
done between USDA and Commerce. This is one of the things that
I have learned in my time. I was in the military until about
5\1/2\ years ago. And I have found that there have been times
when I am having to perform a role like a liaison who used to
be a chief of staff--when we had the storms Hurricanes Irene
and Lee and Sandy and we were getting aid out--and there really
wasn't a synchronizer, somebody who was integrating these
programs.
So I was encouraged to see that you are collaborating with
Congress because, candidly, this has been among my
frustrations, is that out there in the 19th District in New
York in upstate, we are working with the Rural Utilities
Service--thank you very much for that--and also the Connect
America Fund. And so I would like to hear more about that
process, about how you are working together, because we seem to
hit the end of one program and the possibilities of another.
And so I am looking for a little bit of inspiration that
you guys are looking at that problem, too. I realize I put you
in an uncomfortable position because you are sort of at the
edge of your authority and at the beginning of somebody else's,
but this is really where the real advantages or the real
progress we can make when we actually integrate these programs
better.
Ms. Mensah. Thank you. I will let Administrator McBride
speak to the collaboration between Commerce and USDA.
I will say that there are times when our regulations
prevent us from going to a community that is of a certain size.
And then that collaboration is even more important because we
can cover a broader swath of the country.
Mr. McBride. Thank you for the question, Congressman.
The White House Rural Council actually gives us a framework
to work across agencies and communicate and make sure that we
are sharing information on our programs with different agencies
who maybe can't fund a project through one of their programs.
So we are trying to do the best that we can to coordinate at a
Federal level. As difficult as that can be sometimes, we are
trying to coordinate to make sure that we are actually getting
the information to the folks that can use it.
I grew up in rural Arkansas, and so I am very familiar with
the challenges that small communities can have, and oftentimes
they don't have grant writers, oftentimes they don't have folks
who can identify the programs that they might be able to
access. And so that is something, with the Under Secretary's
leadership, that we have worked very hard to do in Rural
Development, to make sure that we are sharing information with
people who would be interested in that, and also making sure
that we are aware of things that are going on in other
agencies, or there might be some synergies and we can
collaborate.
Mr. Gibson. Thank you. To put a finer point on this, so in
our district, electrical co-ops are also in the space of
broadband expansion doing yeoman's work on it. I call your
program sort of like the ground game. We get 2 or 3 yards and a
cloud of dust. And then we have the real possibility with the
Connect America Fund, but the first round wouldn't let the
electrical co-ops get access to that program.
It does seem encouraging now that we are getting a review
of that and our co-ops are now going to get access to that. But
that is really the question that I am raising here is, is
somebody sort of looking at this from an integrator standpoint
and saying, ``Look, there are a lot of efforts that are trying
to expand broadband.'' In rural America, we have disparate but
yet complementary programs. Is anybody working to maybe tie up
some of the fine point details of these regulations so that we
can get the maximum value out of it?
Mr. McBride. Yes, sir. We have about, $55 million this year
in the farm bill loan program. Then we have our infrastructure
program, then we have Community Connect. All of these programs
tend to be oversubscribed. And so we are aware of the need to
work with other agencies and make sure that we are connecting
dots there.
Mr. Gibson. Thank you. I will submit for the record really
just an observation. Visiting my food banks, I was very
encouraged to hear about Second Harvest. It is a great story.
I just wanted to share with you. In some of my visits, I
have found cans of goods on the shelves, a lot of imported food
from China. I don't know if you knew about that. We have food
banks that have canned goods from China or not, but I wanted to
share that with you. I don't know if you have a reporting
element that picks up on that. But I am just a little concerned
about that.
Thank you for your great work.
The Chairman. The gentleman's time has expired.
Mr. Rouzer, for 5 minutes.
Mr. Rouzer. Thank you, Mr. Chairman. And, Madam Under
Secretary, I appreciate you and your Administrators coming to
join us today. As you may know, I used to be at USDA Rural
Development, and so, perhaps, learned a little more than maybe
even I wanted to while I was there. I see some of my old bosses
in the crowd back there with smiles on their faces, so great to
have you here today.
A question for you. I am curious about the Rural Business--
Cooperative Service reorganization there and what is taking
place, and very curious about the state of the value-added
program. That was of great interest of mine when I was there at
the Department.
Ms. Mensah. Thank you for both questions. We tend to, as
you know, we are always looking for ways to continue to do our
work in the most efficient way possible. And your former area
of Rural Business--Cooperative Service is so important to us,
both in the way it handles its business in cooperative loans
and the way it handles the new energy work and our renewed
focus on community economic development.
And I will let Administrator Rikkers speak to that and to
your concern also with Value-Added Producer Grants, one of my
favorite programs because of what it is able to do in unlocking
more potential. I think it is thriving.
If you could say a little more, Administrator Rikkers.
Mr. Rikkers. Thank you, Congressman Rouzer. It is a unique
opportunity to speak to someone who was at least close to where
I am today. It is special. So thank you for your question.
To your first question of the reorganization draft plan
that we have now, it is a proposed reorganization within the
Rural Business--Cooperative Service that is working its way
through the Rural Development review. Before starting this
review, we made sure, first and foremost, that we made sure
that we communicated effectively and had spent time with the
staff of both the appropriations staff of the Senate and House
and the authorizing staff of both the Senate and the House. And
have also met with stakeholders that have an interest in the
reorganization.
The reorganization is minor in the functioning of RBS. What
it does is it makes some changes to our program so that we can
better manage the responsibilities that, first, Congress has
given us in our energy programs through the 2014 Farm Bill. It
also changes and improves the management so that the important
work that we do for cooperatives is better integrated with the
core programs that we deliver. All of the functions that are
currently being done now at RBS will continue to be performed.
Although we think that through this reorganization, that we
will be able to manage it more effectively.
To your point about the Value-Added Producer Grant, it is a
coveted program within RD, first, for the Committee, and the
Committee instructed the USDA in the 2014 Farm Bill to make
sure that it prioritized new and beginning farmers, as well as
veteran farmers. And so in the new regulation that was
published earlier this year, those priorities are reflected in
the new regulation.
We are working diligently, and we will be making awards by
the end of this fiscal year, and we look forward to the
results. And we know that they will reflect those priorities
that this body had us incorporate into the regulations. So
thank you.
Mr. Rouzer. The B&I program has always been the flagship,
obviously. How is our default rate looking on that these days?
Mr. Rikkers. We are at a historic low, I am proud to
report. The default rate, or delinquency rate, nationally is
under five percent. It is 4.87 as of this morning. So thank
you.
Mr. Rouzer. Mr. Hernandez, Community Facilities program was
a popular one in my district. I have a lot of rural areas, a
lot of small towns, a lot of fire stations, medical clinics,
town halls, et cetera, that are always needing a little help. I
remember when I was there, the demand for that program was just
astronomical. I am just wondering what your dollar amount is,
what the demand is these days? How large is your backlog?
Mr. Hernandez. The demand, Congressman, for this program is
just outstanding. We get an appropriation of $2.2 billion. This
year we think we are probably close, close to $1.1 billion.
Forty-six percent of that is invested in rural health care.
That is where a lot of the rural towns are looking for ways to
any type of access to health care for facilities, equipment,
and buildings; 20 percent is for education; and 50 percent for
public infrastructure. People love this program. It helps
change and build the community that you need to do with
housing. You have to do both. Because what happens is people
have to drive too far and so they need the facility, but they
also need housing, both.
Mr. Rouzer. Mr. Chairman, unfortunately, I see my time has
expired.
The Chairman. The gentleman's time has expired.
Mr. Goodlatte, for 5 minutes.
Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your
holding this series of hearings. And I want to welcome all of
our witnesses.
To the Under Secretary and to Administrator McBride, I want
to reiterate what a number of folks have said here about the
importance of the services for economic development in rural
areas. About \1/3\ of the population of my district is in rural
areas, and your work has had a tremendous impact on promoting
and, in some instances, stabilizing economic development that
might not take place but for your help.
One of those areas, Administrator McBride, is the issue of
rural broadband services. It is very, very important, but also
has to be done very, very delicately. This is not like
originally delivering telephone services or rural
electrification where it was either there or it wasn't there.
In the old monopoly days where there was either one phone
company providing services or there was no phone company
providing services, that was a fairly easy call. But today,
broadband services are provided from a multitude of different
sources, and you can inadvertently destroy existing competition
by providing government subsidies to entities that enter the
marketplace, not to provide strictly new service to an area
that doesn't have any, but also to make their business more
profitable and go into areas where there is already
competition. Tell me, how are you handling that and how is it
working?
Mr. McBride. Thank you for the question, Congressman.
The 2014 Farm Bill actually instituted an unserved
requirement for the first time for our potential applicants. So
for any applicant that is successful through the farm bill loan
program, at least 15 percent of that proposed service territory
will be unserved.
Mr. Goodlatte. What is happening in the other 85 percent?
Mr. McBride. Well, the second piece of this in terms of
determining eligibility is that there is a requirement that
there can be no more than three existing service providers.
That is also in statute, and so we are careful to make sure
that we are following that.
Mr. Goodlatte. What kind of complaints have you received
from some of those existing providers who may be, for example,
providing what had historically been broadband services, but as
these speeds increase and increase and increase, it no longer
is, and now there is the subsidy for a new competitor coming
in?
Mr. McBride. Part of the farm bill requirements that
require us to post potential applications online will give
existing service providers the ability to see who is applying,
and they can contact us with any concerns that they might have.
Mr. Goodlatte. Is there any effort to balance this out? So
if an existing provider comes in and says, well, you just gave
this financing to this company that come in and provide this
service, what opportunity do they have to get loans in order to
upgrade their services to be competitive?
Mr. McBride. Assuming that the existing service provider
met the eligibility requirements under the program, they could
potentially apply as well.
Mr. Goodlatte. What if they didn't want to go into the 15
percent new file, they just wanted to be able to compete with
somebody that you subsidized to compete with them?
Mr. McBride. We would need to look at their application and
discuss with them the possibilities that they are considering.
Mr. Goodlatte. Well, could they qualify if they didn't have
that 15 percent requirement?
Mr. McBride. We are required to include a 15 percent
unserved territory under the farm bill.
Mr. Goodlatte. Should there be an exception for these type
of circumstances where you have let a new entrant into the
market, they are competing very effectively in an already
existent marketplace to the disadvantage of people who used
private capital to invest in that same area?
Mr. McBride. I wouldn't speculate on exceptions. I don't
think I have that authority under the statute.
Mr. Goodlatte. I am just asking your opinion, I am not
asking you to make the decision.
Mr. McBride. I would want to see the potential applicants
and the concerns that they raised and consider that fully
before offering an opinion.
Mr. Goodlatte. Let me ask you one other subject area with
regard to rural electricity. How will the President's Clean
Power Plan affect your loan portfolio?
Mr. McBride. Right now, the action has moved to the states
as they develop their plans. As I mentioned earlier, we are in
frequent contact with all of our borrowers, and will want to
work with them to make sure that they have the tools that they
need to respond to the plan.
Mr. Goodlatte. Do you not have any concerns that some of
the loans that you have outstanding may be jeopardized by the
massive change in this policy?
Mr. McBride. Without seeing the specific plans put forward
by the states, I would hesitate to speculate on the impacts on
individual borrowers.
Mr. Goodlatte. So you are going to put us off?
Mr. McBride. We will be in touch with you as we move
forward on this.
Mr. Goodlatte. All right. Thank you very much.
The Chairman. Mr. King, for 5 minutes.
Mr. King. Thank you, Mr. Chairman. I thank the witnesses
for your testimony.
A couple of things come to mind as I listened to Mr.
Goodlatte. One of them is--and I pose my first question to Mr.
McBride--there is a model out there that has emerged, or is
emerging, that sees rural water systems incorporating septic
systems, rural septic systems. I shouldn't use that word
incorporate, but incorporate into their business model, not
into the water system, where they would go in and build a
system and then lease that system back to the property owner so
that the property owner is no longer in ownership of their own
leach field, but they are paying a monthly fee in order to
avoid their requirement that is likely an EPA requirement that
they upgrade their system.
Could you comment on what that looks like for a business
model, and what that might look like if much of the United
States that is served by rural water would end up also being
served by a rural water system that also does the sewer system?
Mr. McBride. Thank you for the question, Congressman. That
is not a specific issue that has been brought to my attention,
but I would be happy to follow up with you after the hearing
and discuss the instances that you are referring to and look at
that.
Mr. King. I appreciate that direct response, and I look
forward to a comment further on that. I just don't know that
anybody has looked into that very far to contemplate what that
means for, let's say, a county, a state, a nation. I think that
goes a lot further than what this Congress imagined. So I would
ask you to take a look at that.
Mr. McBride. Yes, sir.
Mr. King. I thank you for that.
I would like to, then, turn to Under Secretary Mensah. And,
again, thank you for your testimony.
I am thinking in terms of rural development, and have many
times, from this platform, said that all new wealth comes from
the land. And you can mine it out of the Earth, and you can
seine a few fish out of the ocean, but it is fields and mines,
and the wealth, actually renewable wealth, comes out of the
land itself. So when we talk about rural development, I know
that there has been a concerted effort on the part of the USDA
to focus on, especially development of our small towns and
communities. I do think that is admirable, and it is about the
second best way that you can raise children. If you can't raise
them on a family farm, you can raise them in a small town or
rural area. It is a pretty good thing to promote.
But I am concerned about the regulation we have on top of
us now, the waters of the United States. And I lay that
foundation for the economic development side of this because
the utilization of this land has been driven by a desire for
profit from people who are good stewards of the land. And the
waters of the United States regulation turns this thing on its
head, where it puts our producers in a position where they have
to ask permission in order to utilize their property that they
have invested in, either in their lifetime or in previous
generations.
I wonder if you would comment on what you think the impact
is of an EPA that has a reach that--just a moment. I should
probably lay a little more foundation on this.
I am in Iowa. So the waters of the United States
regulations, according to the map that has been delivered to
me, would cover 96.7 percent of Iowa. We don't have an ocean,
some say we don't have a beach; 96.7 percent of the state, and
the balance of that is in the prairie pothole region that looks
to me like they are already designated wetlands.
So it could be that the Federal Government has reached out
to put special regulations on nearly every square foot of my
state. And there are some 50+ practices that are essentially
approved by this proposal, but many of those practices have
been developed in my lifetime. So new practices they would have
to have permission for.
And I just ask you if you could comment on the threat that
this is to put the Federal Government in a position to control
crop inputs, to control nitrogen, for example. If they can do
that, they can control production, they can limit the value of
your land, and that affects rural development. So I would ask
if you could comment on waters of the United States.
Ms. Mensah. Congressman, thank you for your clear passion
for where wealth comes from, wealth from the land, and your
passion for your producers.
I do not have a role in the waters of the U.S. rule. But
what I can tell you is that Rural Development has been standing
by the small communities, the producers, the people that need
broadband, that need housing, that need businesses, and that is
really our role, and I look forward to seeing that continue.
Mr. King. I would just ask you to couple that into your
thinking because the well-being of the people in these
communities is going to be directly tied to the profitability
of the land that surrounds them.
I appreciate your comments and your testimony.
Thank you, Mr. Chairman. I yield back.
The Chairman. The gentleman yields back.
I want to thank our panel today for coming up and sharing
with us. We appreciate your testimony and your candor. I
appreciate what you do. The four of you supervise an important
part of the farm bill and the work that it does, but rural
America and production agriculture can't prosper without each
other. So I appreciate the work you do and I appreciate this
morning's testimony.
[Recess.]
The Chairman. Good morning. Welcome to our second panel.
Before I introduce our panel, administrative business.
Given the really strong showing of Members today, I want to ask
unanimous consent that we take the questioning time to 4
minutes instead of 5. We had hoped to have both panels done
this morning by 12:30 so we would have time for the afternoon
panel. So we will go to 4 minutes for questions for everybody.
And rather than taking a formal lunch break, Members are
advised that we have food in 1302, so come and go as you please
to take care of that, and we will move on to the panel.
I would now like to welcome our second panel. We have the
Honorable Ed Avalos, Under Secretary, Marketing and Regulatory
Programs, USDA; Mr. Alfred Almanza, Deputy Under Secretary for
Food Safety, USDA; and then joining both Under Secretaries
Avalos and Almanza, we have Ms. Anne Alonzo, Administrator,
Agricultural Marketing Service; Mr. Kevin Shea, Administrator,
Animal and Plant Health Inspection Service; and Mr. Larry
Mitchell, Administrator, Grain Inspection, Packers and
Stockyards Administration.
Let me, again, thank the panel for coming this afternoon. I
appreciate your patience with the morning panel which went a
little longer. We are now ready for the report from you on the
good work that you do. So, Mr. Avalos, if you would start us
off, we will be good to go.
STATEMENT OF HON. EDWARD M. AVALOS, UNDER
SECRETARY, MARKETING AND REGULATORY PROGRAMS, U.S. DEPARTMENT
OF AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY ANNE L.
ALONZO, J.D., ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE,
USDA; KEVIN SHEA, ADMINISTRATOR, ANIMAL AND PLANT HEALTH
INSPECTION SERVICE, USDA; AND LARRY MITCHELL, ADMINISTRATOR,
GRAIN INSPECTION, PACKERS AND STOCKYARDS
ADMINISTRATION, USDA
Mr. Avalos. Mr. Chairman and distinguished Members of this
Committee, I am pleased to appear before you to discuss
activities of U.S. Department of Agriculture Marketing and
Regulatory Programs mission area, which includes the
Agricultural Marketing Service, AMS, Animal and Plant Health
Inspection Service, APHIS, and the Grain Inspection, Packers
and Stockyards Administration, GIPSA.
With me today are Mr. Kevin Shea, Administrator for APHIS;
Ms. Anne Alonzo, Administrator for AMS; and Mr. Larry Mitchell,
Administrator for GIPSA.
Agriculture is an engine of growth and prosperity, directly
or indirectly supporting 16 million jobs. MRP programs
contribute significantly to the success and development of
domestic and international markets in a variety of ways. Each
of our agencies has unique responsibilities that are crucial to
this work. Today, my colleagues and I are here to discuss some
of these responsibilities and how we contribute to the success
and profitability of American agriculture.
APHIS' primary mission is to safeguard health and value of
U.S. agriculture and other plant and animal resources. The
agency's programs protect U.S. livestock, poultry, and
specialty crops which are worth more than $191 billion. Also,
they assure well-being of animals covered under the Animal
Welfare Act. APHIS employees come to work every day across the
country and around the world to serve the diverse array of
customers and stakeholders and respond to challenges and
threats as they arise, such as avian influenza. These customers
include ranchers, farmers, poultry producers, licensed animal
dealers, importers, exporters, and many, many others.
While APHIS is engaged in this crucial work, the agency is
also doing so much more with less. We have lost over $400
million in appropriations over the last 4 years.
One area where APHIS has made significant strides is with
its biotech petition review process. In recent years, this
process has taken more than 3 years for review, and preparation
of evaluations necessary to make the decisions. Such delays
added to a growing backlog of petitions. To address this
situation, APHIS undertook a business process improvement
review, which allowed APHIS to eliminate the backlog and to cut
review times down to about 18 months. And in the near future
when the process is fully implemented, the review time will be
down to around 15 months.
USDA and APHIS have been confronting the largest animal
health emergency in this country's history. APHIS is dealing
with an unprecedented outbreak of highly pathogenic avian
influenza, taking a heavy toll on the poultry industry. Mr.
Chairman and Members of this Committee, I can assure you,
however, that this disease has USDA's fullest attention and we
are committed to standing with our producers, poultry industry,
and the rural communities to get them back on their feet.
In Fiscal Year 2014, APHIS requested and received funding
from Congress to initiate the National Feral Swine Damage
Management program. These animals cause damage estimated at
$1.5 billion every year and pose risks to agriculture, natural
resources, property, animal health, human health and safety.
APHIS is working to remove animals in 41 states, and together
with our partners, APHIS established state-level management
control plans that outline our management goals and objectives
with regard to feral swine in each state. Depending on local
conditions, these range from total elimination of feral swine
populations to management of individual populations.
We also appreciate Congress' support of the Huanglongbing,
HLB, Multi-Agency Coordination group. With support from
Congress, the HLB MAC has been able to approve $20 million in
projects to put practical tools to work in the field now while
longer-term solutions are being developed. MAC is working very
hard in support of the citrus industry to fund near-term
practical tools and solutions for the industry to use in
combating citrus greening.
APHIS has made significant progress in addressing a variety
of other plant pests, including our successful work with the
State of California to address and to keep the European
grapevine moth from maintaining a foothold.
I am also proud of the work that APHIS has done towards
eradicating the boll weevils from the United States. Through
the agency's work with state partners, the cotton industry and
our counterparts in Mexico, APHIS has worked to eradicate boll
weevils from over 99 percent of the 16 million acres of U.S.
cotton.
APHIS also used funding provided by the 2014 Farm Bill to
continue to enhance plant health through two important
programs--the Plant Pest and Disease Management and Disaster
Prevention program and the National Clean Plant Network
program. Since 2009, APHIS has funded more than 1,800 projects
in 50 states and two U.S. territories.
The ability to export is key to the growth, profitability,
and continued success for our U.S. farmers, ranchers, and
related agricultural businesses. For some crops, 50 percent or
more of our production is exported, including 80 percent of
U.S. cotton, 70 percent of tree nuts, 50 percent of wheat, and
50 percent of rice. Agricultural exports were a record $152
billion last year, and have climbed more than 58 percent in
value since 2009.
Last year, APHIS, in cooperation with other agencies,
successfully negotiated and resolved a total of 170 sanitary
and phytosanitary trade-related issues involving U.S.
agricultural exports, with an estimated value of $2.5 billion.
APHIS also successfully intervened in 273 situations where U.S.
cargo was being held up in foreign ports of entry, which
prevented and rejected shipments worth more than $49 million.
The mission of AMS is to facilitate the efficient, fair
marketing of U.S. agricultural products, including food, fiber,
and specialty crops. AMS administers programs that create
domestic and international marketing opportunities for U.S.
producers. AMS also provides the agriculture industry with
valuable services to ensure the quality and availability of
wholesome food for consumers across the country.
AMS carries a wide range of programs under the
authorization of the Agricultural Marketing Act of 1946, as
well as over 50 other statutes. More than \1/2\ of the funds
needed to finance AMS activities are derived from voluntary
user fees. AMS also provides services for private industry and
state and Federal agencies on a reimbursable basis. In
addition, AMS conducts several appropriated program activities
through cooperative agreements with State Departments of
Agriculture and other agencies.
AMS employees work every day to support the country's
diverse agricultural operations. The agency's workforce
includes marketing specialists, commodity graders, economists,
Market News reporters, scientists, and analysts who support the
marketing of American agricultural products and work in
industry-specific processing plants, terminal and shipping
point markets, production facilities, and office environments.
AMS provides services and awards millions of dollars in annual
grant investments that create opportunities by supporting
economic development in small towns and rural communities
across the United States.
Much of the agency's support for agriculture is provided
through commodity-specific efforts, such as its dairy; food and
vegetable; livestock, poultry and seed; and cotton and tobacco
programs. AMS also oversees the National Organic Program;
Science and Technology Program; and the Transportation and
Marketing Program. Further, AMS provides oversight for 20
research and promotion programs.
I would like to provide a few examples of how AMS
activities touch and benefit U.S. agricultural producers and
consumers. One of the most widely used programs is Market News.
This year marks the 100 year anniversary for AMS Market News,
which provides agricultural stakeholders with information they
need to evaluate market conditions and trends, to make
marketing decisions, and to assess movement of products across
the nation and across the world.
Another key AMS activity is purchasing nonprice supported
commodities, such as meats, fish, fruits, vegetables, poultry,
and egg products in order to stabilize market conditions
pursuant to Section 32 and in support of nutrition assistance
programs within USDA.
The AMS grant programs also play an important role in
facilitating marketing, assisting states in exploring new
market opportunities for U.S. food and agricultural products
both locally and internationally.
The Chairman. Mr. Avalos, you are a little past the 5
minute mark. Do you want to go ahead and finish up?
Mr. Avalos. Well, okay, Mr. Chairman. This was turned in, I
guess the Members will read it?
The Chairman. The written report, your written comments,
will be in the record, of course. Any last couple thoughts?
Mr. Avalos. Mr. Chairman, let me just say this: I want to
thank you and the Committee for an invitation to be here. We
stand ready to answer any questions you might have on the MRP
mission area.
[The prepared statement of Mr. Avalos follows:]
Prepared Statement of Hon. Edward M. Avalos, Under Secretary, Marketing
and Regulatory Programs, U.S. Department of Agriculture, Washington,
D.C.
Mr. Chairman and distinguished Members of this Committee, I am
pleased to appear before you to discuss the activities of the U.S.
Department of Agriculture (USDA) Marketing and Regulatory Programs
(MRP) mission area, including the Agricultural Marketing Service (AMS),
the Animal and Plant Health Inspection Service (APHIS), and the Grain
Inspection, Packers and Stockyards Administration (GIPSA).
With me today are: Mr. Kevin Shea, Administrator of APHIS; Ms. Anne
Alonzo, Administrator of AMS; and Mr. Larry Mitchell, Administrator of
GIPSA. They will answer questions regarding specific agency activities.
Agriculture is an engine of growth and prosperity, directly or
indirectly supporting 16 million jobs. MRP programs have contributed
significantly to the success as well as the development of domestic
markets in a variety of ways. For example, both AMS and GIPSA certify
the quality of agricultural commodities and provide industry with a
competitive edge earned by the USDA seal of approval for grading and
inspection. AMS also facilitates marketing by reporting essential
market data, upholding strong organic standards, and supporting the
ongoing growth of local and regional food systems. GIPSA works to help
ensure that livestock producers have a fair and competitive market
environment. APHIS also protects the health of plants and animals,
enhancing the competitiveness of U.S. producers by keeping production
and marketing costs low. All three agencies help resolve international
issues to maintain and open markets around the world for U.S. products,
thus supporting American families.
As you can see, each of our agencies has unique responsibilities,
and today my colleagues and I are here to and discuss the important
work our agencies are engaged in and how the agencies contribute to the
success of American agriculture.
APHIS
APHIS' primary mission is to safeguard the health and value of U.S.
agricultural and other plant and animal resources. The Agency's
programs protect U.S. livestock, poultry, and specialty crops worth
more than $191 billion (based on data from the 2012 Census of
Agriculture), as well as the well-being of animals covered under the
Animal Welfare Act. APHIS employees come to work, every day, across the
country and around the world, to serve a diverse array of customers and
stakeholders and respond to challenges and threats, such as Avian
Influenza, as they arise. These customers include ranchers, farmers,
poultry producers, citrus producers, licensed animal dealers, importers
and exporters, and many others. While APHIS is engaged in this crucial
work, the Agency is also doing more with less. APHIS has lost more than
$400 million in appropriations over the last 4 years. This means there
are 225 fewer staff for APHIS' veterinary services program from 2009
levels at a time when it is facing the continuing threat of HPAI.
Several core beliefs form the foundation of this mission. First,
healthy and profitable agriculture is good for America; it provides
food and clothing for countless people worldwide and is a key pillar to
a thriving economy. Second, as a Federal agency, APHIS' role is to take
actions that no one state or individual entity has the capacity to take
on their own. And third, APHIS has a special role to carry out in
caring for vulnerable animals.
Biotechnology
One area where APHIS has made significant strides is with its
biotechnology petition review process. In recent years, this process
was taking more than 3 years for review and preparation of evaluations
necessary to make regulatory decisions. Such delays added to a growing
backlog of petitions. To address this situation, APHIS undertook a
business process improvement review, has developed a process that when
fully implemented will take 13 to 15 months for the review of petitions
that do not require an environmental impact statement (EIS). The Agency
is now nearly through the entire list of backlogged petitions and has
reduced petition review times to an average of 18 months without
compromising the quality of the analyses. The Agency expects to fully
meet the new timeframes for new petitions received in FY 2015. For
petitions that do require an environmental impact statement, additional
resources are being devoted to these intensive analyses so they can be
completed in a timely manner.
HPAI
USDA and APHIS have been confronting the largest animal health
emergency in this country's history. APHIS is dealing with an
unprecedented outbreak of highly pathogenic avian influenza (HPAI) that
is taking a heavy toll on the poultry industry. People have lost their
jobs and have seen their livelihoods put in grave danger by this
outbreak, and our hearts go out to them. I can assure you, however,
that this disease has USDA's fullest attention, and we are committed to
standing with our producers, the poultry industry, and the communities
they live in and support, to get them back on their feet.
USDA has been and will be there every step of the way with
producers, industry, and our state partners. APHIS has worked closely
with them to respond quickly and decisively to this outbreak. More than
400 USDA staff and nearly 3,000 USDA-contracted personnel have been
working around the clock in every affected state on the response. We've
delivered over $190 million in indemnification payments to producers to
control the spread of disease, and to help them recover from it. Should
the need arise, we have the authority to request even further funding.
All told, USDA has received around $1 billion in Commodity Credit
Corporation (CCC) funding to address this outbreak. We've seen trade
cut off by trading partners concerned about the devastating effects of
this disease, causing over $1 billion in poultry products to be
directed to other markets at a cost to producers. We understand the
devastating impact this outbreak has had upon all, and we are committed
to helping those affected. And we will help protect those producers who
have not yet been--and we certainly hope, will not be--impacted by this
disease.
Despite the difficulties we've faced, we've had some good news.
APHIS has not had a single detection of the disease since June 17, and
of the 211 commercial premises affected, cleaning and disinfection has
been completed on 178, and 133 are eligible to restock. The restocking
guidelines that the Agency and the states have put in place provide
assurance that the premises and the local environment are free from the
disease, and that enhanced biosecurity measures are in place to reduce
the threat of re-contamination.
APHIS HPAI emergency response activities in the spring were largely
based on existing emergency response plans the Agency and its partners
developed prior to the outbreak. As the Agency began planning for the
fall, it spent a lot of time meeting with states and industry to
determine what worked and what needed to be improved so that the
response for any potential fall outbreaks could be improved.
In addition to weekly planning and information-sharing calls with
state and industry partners through the spring and summer, USDA
participated in several conferences and workshops to discuss these
issues and plan for the fall. Two important workshops were held in
Riverdale, Maryland and Des Moines, Iowa. Industry and Animal Health
officials discussed worst case scenarios, and preparation efforts going
into the fall season.
Based upon those conversations and the lessons APHIS identified,
the Agency prepared and presented to the Secretary a comprehensive and
updated emergency response plan for the fall outbreak. The plan
outlines steps the Agency and its partners will take, including
enhancing biosecurity, increasing surveillance efforts, and improving
efforts to identify and deploy personnel.
Other actions that APHIS has identified or implemented as a result
of our fall planning:
Conducted a nationwide review of emergency resources to
identify state and local resources that could contribute to a
response and reduce response time.
Emphasized the need for stronger biosecurity and worked with
states and industry to prepare additional materials to educate
producers.
Prepared to deploy vaccines, including issuing a request for
proposals to stockpile vaccines and holding discussions with
trading partners about how USDA would use them.
Increased wild bird surveillance with Federal and state
partners to more quickly identify where the virus may strike.
Initiated the hiring process to bring additional
veterinarians and employees to USDA on a term basis to assist
with any potential outbreak.
Worked with state partners to identify disposal options in
each state, such as landfills, to allow for more rapid
depopulation and disposal of sick birds.
Set a goal to more rapidly depopulate sick birds, within 24
hours if possible, which will reduce the amount of virus in the
environment and help reduce potential lateral spread.
Started work on developing a new virus elimination process
to more rapidly and cost-efficiently provide funding to
producers to remove the virus from their barns.
APHIS has encouraged states to update their response plans, and has
worked with them to identify depopulation and disposal options
available in their states. APHIS has also begun an inventory of
necessary depopulation and disposal equipment and will work to stage
equipment in strategic areas.
Feral Swine
In FY 2014, APHIS requested and received funding from Congress to
initiate the National Feral Swine Damage Management program. These
animals cause damage estimated at $1.5 billion annually and pose risks
to agriculture, natural resources, property, animal health, and human
health and safety. APHIS is working to remove animals in the 41 states,
and with our partners, has established state-level management control
plans that outline our management goals and objectives for each state.
Depending on local conditions, these range from total elimination of
feral swine populations to the management of individual populations.
Plant Protection Issues
We also appreciate Congress' support of the Huanglongbing (HLB)
Multi-Agency Coordination group (MAC). The MAC is working diligently
with the citrus industry to find near-term practical tools and
solutions for the industry to use in combating HLB. It has brought
unprecedented coordination and cooperation across Federal and state
agencies and industry in an effort to speed progress on methods to
fight this disease. With support from Congress, the HLB MAC has been
able to approve $20 million in HLB-related projects to put practical
tools to work in the field now while longer term solutions are
developed. Some of the tools being developed include delivering thermal
therapy to citrus trees (to kill the bacteria that causes HLB) on a
grove-size scale, increasing production of biological control agents to
manage Asian citrus psyllid populations (which spreads HLB), and
training detector dogs to find trees newly infected with HLB, among
other exciting projects. In addition, in FY 2015, with Congress'
support, APHIS was able to commit more than $48.5 million to Citrus
Health Response Program activities with an emphasis on HLB and Asian
citrus psyllid.
APHIS also has made significant progress in addressing a variety of
plant pests, including our very successful work with the State of
California and industry to keep the European grapevine moth (EGVM) from
establishing a foothold. APHIS detected more than 100,000 of these
moths in FY 2009, the first year of the program. Last year, on track
with expectations, APHIS found a single moth. It meant the Agency could
free all of Solano County and portions of Sonoma and Napa counties from
Federal quarantine in time for the fall grape harvest. Although we
can't claim just yet that we've completely eradicated this pest, this
progress is a tremendous win for all of us.
I am also very proud of the work APHIS has done toward eradicating
boll weevil from the United States. More than 30 years ago, you could
find boll weevils in every cotton-producing state from Virginia to
Texas. Through cooperative work with state partners, the cotton
industry, and counterparts in Mexico, we have eradicated boll weevils
from 99.5 percent of the 16 million acres of the U.S. cotton crop. In
Fiscal Year 2014, the number of boll weevils captured decreased in the
Lower Rio Grande Valley by more than 32 percent. This effort helped
growers in the Valley have the option to plant 55,000 more acres of
cotton than they did the previous year.
APHIS has also used the funding provided by the Agricultural Act of
2014 (2014 Farm Bill) to continue to enhance plant health through two
important programs, Plant Pest and Disease Management and Disaster
Prevention and the National Clean Plant Network (NCPN). Since 2009,
APHIS has funded more than 1,800 projects in 50 states and two U.S.
territories, strengthening the Agency's abilities to protect U.S.
agriculture and natural resources from foreign pest threats. In support
of the NCPN, which provides reliable sources of pathogen-free planting
stock of high-value specialty crops, APHIS and cooperators have also
provided funding and other support to 20 clean plant centers and
associated programs in 16 states representing five specialty crops
including fruit trees, grapes, citrus, berries, and hops.
Exports
The ability to export is key to the growth, profitability, and
continued success of U.S. farmers and ranchers and related agricultural
businesses. For some crops, 50 percent or more of our production is
exported, including 80 percent of U.S. cotton, 70 percent of tree nuts,
and 50 percent of wheat and rice. Agricultural exports surpassed $152
billion in FY 2014, and have climbed more than 58 percent in value
since 2009, totaling $771.7 billion over the past 5 years. They have
increased in volume as well as monetary value, demonstrating world-wide
demand for high-quality U.S. grown products.
APHIS plays a significant role in continuing to help U.S. farmers
and ranchers access new markets. Last year, APHIS, in cooperation with
other agencies, successfully negotiated and resolved a total of 170
sanitary and phytosanitary (SPS) trade-related issues involving U.S.
agricultural exports, with an estimated market value of $2.5 billion.
This includes continuing efforts to eliminate all remaining bovine
spongiform encephalopathy (BSE)-related restrictions on U.S. cattle and
beef. In FY 2014, APHIS achieved success with several countries
agreeing to remove all BSE restrictions and grant access to U.S. beef
and beef products. These include major markets such as Mexico and Hong
Kong, among others. APHIS also successfully intervened in 273
situations where U.S. cargo was held up at foreign ports-of-entry,
which prevented the rejection of shipments worth more than $49 million.
Animal Welfare
APHIS' Animal Welfare program carries out activities designed to
ensure the humane care and treatment of animals covered under the
Animal Welfare Act (AWA) through inspections, enforcement, and
education. The program ensures that proper care is provided for certain
animals that are: exhibited to the public; bred for commercial sale;
used in medical research; or transported commercially. Facilities using
regulated animals for regulated purposes must provide their animals
with adequate housing, sanitation, nutrition, water and veterinary
care, and they must protect their animals from extreme weather and
temperatures.
AMS
The mission of AMS is to facilitate the efficient, fair marketing
of U.S. agricultural products, including food, fiber, and specialty
crops. AMS administers programs that create domestic and international
marketing opportunities for U.S. producers. AMS also provides the
agriculture industry with valuable services to ensure the quality and
availability of wholesome food for consumers across the country.
AMS carries out a wide range of programs under the authorization of
the Agricultural Marketing Act of 1946, as well as over 50 other
statutes. More than \1/2\ of the funds needed to finance AMS activities
(excluding commodity purchase program funds) are derived from voluntary
user fees. AMS also provides services for private industry and state-
Federal agencies on a reimbursable basis. In addition, AMS conducts
several appropriated program activities through cooperative
arrangements with State Departments of Agriculture and other agencies.
AMS employees work every day to support the country's diverse
agricultural operations. The Agency's workforce includes marketing
specialists, commodity graders, economists, market news reporters,
scientists, and analysts who support the marketing of American
agricultural products and work in industry-specific processing plants,
terminal and shipping point markets, production facilities, and office
environments. AMS provides services and awards millions of dollars in
annual grant investments that create opportunities by supporting
economic development in small towns and rural communities across
America.
Much of the agency's support for agriculture is provided through
commodity-specific efforts, such as its Dairy; Fruit and Vegetable;
Livestock, Poultry and Seed; and Cotton and Tobacco Programs. AMS also
oversees the National Organic Program; Science and Technology Program;
and the Transportation and Marketing Program. Further, AMS provides
oversight for over 20 research and promotion programs, also known as
checkoffs, which are responsible for well-known advertising campaigns
such as ``Got Milk'' and ``Beef: It's what's for dinner.'' In addition,
AMS enforces other Federal regulations such as the Perishable
Agricultural Commodities Act (PACA) and the Federal Seed Act.
I would like to provide the Committee with a few examples of how
AMS activities touch and benefit U.S. agricultural producers and
consumers. One of our most widely used programs is Market News. This
year marks 100 years of AMS' Market News which provides agricultural
stakeholders with the information they need to evaluate market
conditions and trends, make purchasing decisions, and assess movement
of products across the nation and the globe. Every year, AMS issues
more than 250,000 reports that get more than 53 million views.
Agricultural stakeholders around the country rely on USDA Market News
as a trusted source for timely, reliable, unbiased data.
Market News is constantly evaluating the evolving needs of the
agriculture industry to better serve our stakeholders. For example, AMS
is increasing reporting on organic commodities and on locally and
regionally marketed products in response to market demand. The Agency
recently released an innovative, enhanced version of the Market News
Portal with simplified navigation, giving users easier access to the
wealth of timely and reliable data.
Another key AMS activity is purchasing non-price supported
commodities such as meats, fish, fruits, vegetables, poultry, and egg
products in order to stabilize market conditions pursuant to Section
32, and in support of nutrition assistance program needs within USDA.
The 2002 and 2008 Farm Bills established minimum levels of specialty
crop purchases. All purchased commodities are distributed by FNS to
schools or to other domestic nutrition assistance programs. In 2014,
AMS' Commodity Purchase Program purchased a total of over $1.5 billion
worth of food from our nation's producers. These purchases support
producers in rural America, while helping meet government nutrition
goals.
AMS grant programs also play an important role in facilitating
marketing. The Federal-State Marketing Improvement Program (FSMIP)
provides matching funds to states to assist in exploring new market
opportunities for U.S. food and agricultural products, both locally and
internationally. Recent FSMIP projects have supported efforts to
bolster local and regional food systems through farmers' markets and
community supported agriculture operations, while other projects have
focused on building international markets for pine lumber, pork, and
more.
With the Specialty Crop Block Grant Program, AMS helps states
strengthen markets for their specialty crops, such as fruits,
vegetables, tree nuts, horticulture and nursery crops. In FY 2014, all
50 states, the District of Columbia, and four U.S. Territories were
awarded Specialty Crop Block Grants that funded a total of 839
projects, totaling approximately $66 million. AMS expects to award
approximately $63 million in FY 2015. These grants address issues
ranging from food safety to research needs to increased access to
fruits and vegetables, all benefiting specialty crop producers and
consumers across the country. With additional funding from the 2014
Farm Bill, we are able to do even more to help specialty crop growers
increase profitability and sustainability.
Farmers Market and Local Food Promotion Program grants are
available annually to support local and regional food systems through
two competitive programs: the Farmers Market Promotion Program (FMPP)
and the Local Food Promotion Program (LFPP). FMPP grants fund farmer-
to-consumer direct marketing projects such as farmers' markets,
community-supported agriculture programs, roadside stands, and
agritourism. LFPP grants fund local and regional food business
enterprises that serve as intermediaries to process, distribute,
aggregate, and store locally or regionally produced food products.
Projects also provide technical assistance and outreach, including
planning grants for local food businesses. For Fiscal Year 2015, AMS
expects to award over $27 million in competitive grants to expand
marketing through these two programs.
AMS, along with other USDA agencies, is helping producers tap into
growing consumer demand for locally-grown food. According an Economic
Research Service report, the value of local food sales, defined as the
sale of food for human consumption through both direct-to-consumer
(e.g., farmers' markets) and intermediated marketing channels (e.g.,
sales to institutions or regional distributors), topped $6 billion in
2012. Secretary Vilsack has identified strengthening local and regional
food systems as one of the four pillars of USDA's work to help
revitalize the rural economy and create jobs. Recently, AMS launched a
new set of Local Food Directories to help consumers find Community
Supported Agriculture enterprises, food hubs, and on-farm stores,
making it easier for consumers to find local food. AMS research and
technical assistance contribute to our efforts to provide farmers and
ranchers around the country with tools to reach consumers, strengthen
ties between urban and rural communities, and help meet the growing
demand for locally and regionally produced food.
As demand for certified organic food products continues to grow,
AMS plays a key role in setting and enforcing meaningful standards. In
2014, AMS partnered with 13 organizations to develop tools that will
identify and remove barriers to certification and streamline the
certification process. The projects will be completed by September
2015. Tools, resources, and technical assistance--including educational
materials, training videos, and more--will be widely available to help
farmers and businesses that are new to organic production. The 2014
Farm Bill added additional resources to support organic certification,
research, and market development. AMS quickly made organic
certification cost-share funds available to help producers pay for the
cost of certification, and we have already published a proposed rule to
expand the organic exemption for producers paying into commodity
checkoff programs.
Within five of the twelve titles of the 2014 Farm Bill, there were
nearly 30 provisions related to AMS. The agency has made great strides
toward implementation including the timely awarding of grants,
providing several reports to Congress, establishing the Unprocessed
Fruit and Vegetable Pilot in eight states, and moving to a hearing on a
proposed California Federal Milk Marketing Order.
GIPSA
The core mission of GIPSA is to facilitate the marketing of
livestock, poultry, meat, cereals, oilseeds, and related agricultural
products, and promote fair and competitive trading practices for the
overall benefit of consumers and American agriculture. GIPSA plays an
integral role in ensuring the economic viability of America's farmers
and livestock producers, and in turn, of rural America. GIPSA
administers two programs that are very import to American agriculture:
the Packers and Stockyards Program (P&SP) and the Federal Grain
Inspection Service (FGIS).
Packers and Stockyards Program
Under the Packers and Stockyards Act (P&S Act), GIPSA's P&SP
regulates businesses that market livestock, poultry, and meat. Congress
passed the P&S Act in 1921 to address serious concerns of unfair and
deceptive practices in the meatpacking industry. Over the years,
Congress has amended and supplemented the P&S Act to keep the Act
relevant to the changing livestock, poultry and meat industries. For
instance, in 1976, Congress added authority for the Secretary to assess
civil penalties for violations. In 1987, Congress added financial
protection for poultry producers, and as recently as 2008, Congress
added the right of producers growing poultry or swine under contract to
decline arbitration clauses in the contracts and established the forum
for resolving disputes.
Today, the P&S Act promotes fair and competitive marketing in
livestock, poultry, and wholesale meat for the benefit of American
agriculture and consumers. By fostering fair competition, the P&SP
helps assure that meat and meat products are available to consumers at
fair prices. Fair competition, payment protection, and prohibitions
against deceptive and fraudulent trade practices in livestock markets
assure producers that they will receive competitive prices and timely
payment for livestock.
The P&S Act provides specific protections for poultry growers and
swine production contract growers including the right to cancel
production contracts, the right to be informed of the possibility of
additional capital investments, the right to resolve contract disputes
in the Federal judicial district in which the principle part of the
performance takes place under the contract, and the right to decline to
be bound by the arbitration provision in a contract.
The P&S Program investigative work is handled by three regional
offices located in Atlanta, Georgia, Des Moines, Iowa, and Aurora,
Colorado. The regional offices include a staff of auditors, marketing
specialists, resident agents, economists, investigating attorneys, and
legal specialists some of whom are assigned to the regional office and
others whose duty stations are their personal residences. These
employees conduct investigations and regulatory activities such as
business audits, weighing verifications, and day-to-day industry
monitoring. The P&SP Washington, D.C. staff provides litigation support
through investigation review, sanction recommendation, hearing
preparation, settlement negotiations, and testimony at hearings. The
headquarters staff also processes and summarizes industry data and
develops policy and information materials and drafts notices and
regulations under the P&S Act.
By protecting fair-trade practices, financial integrity, and
competitive markets, GIPSA promotes marketplace fairness for livestock
producers, buyers, sellers, swine contract growers, and poultry growers
for the benefit of all market participants and American consumers.
GIPSA maintains a toll-free hotline (800-998-3447) to receive
complaints and other communications from livestock producers, poultry
growers, and other members of the industry or general public. The
hotline allows callers to voice their concerns or file a complaint
anonymously. GIPSA responds to all calls received. In 2014, GIPSA
initiated 86 investigations or reviews of livestock market operations
in response to complaints. Although this was less than four percent of
all investigations and reviews of market agencies that year, complaints
from injured parties or the general public are important sources of
information about fairness and financial integrity in the livestock
sector.
Federal Grain Inspection Service
FGIS facilitates the marketing of U.S. grain, oilseeds, and related
agricultural products by providing official U.S. grading standards, as
well as methods to assess product quality; maintaining the integrity of
the marketing system by enforcing the U.S. Grain Standards Act (USGSA)
and the Agricultural Marketing Act of 1946 (AMA); and administration
and oversight of America's national grain inspection system, a network
of third-party Federal, state, and private laboratories that provide
impartial, user-fee funded official inspection and weighing services
under the USGSA and the AMA. Grain standards established under the
USGSA and AMA and maintained by FGIS are used to facilitate the
marketing of approximately 301 million metric tons of grain, rice, and
pulses for export around the world by the way of ships, trucks, rail,
and containers worth approximately $50 billion. In 2014, there were
more than 3.3 million inspections. This amounted to approximately one
out of every four rows of corn raised in the U.S., one out of every two
rows of soybeans and two out of every five truckloads of wheat.
FGIS is recognized worldwide as the gold standard for grain
inspection. From October 1, 2014, to July 31, 2015, FGIS grain
inspection accuracy was 96.5% based on a review of 3,782 samples
covering a total of 7,144 factors. FGIS resolves grain quality and
weight discrepancies, by promoting domestic grain and commodity
standards and marketing infrastructures in other countries. FGIS also
assists importers in developing quality specifications and complements
international trade by training foreign inspectors in U.S. inspection
methods and procedures.
During 2014, GIPSA personnel met with 49 teams from 32 nations.
This year FGIS inspectors traveled to China to certify grain shipments,
as well as Columbia and Algeria to conduct workshops on U.S. inspection
methods for corn, soybean, and wheat. These activities foster a better
understanding of the entire U.S. grain marketing system and enhance
purchasers' confidence in U.S. grain. Ultimately, these efforts are
instrumental in moving our nation's harvest to end-users around the
globe.
Conclusion
In closing, MRP supports the Department of Agriculture's key role
in growing the rural economy and supporting producers and consumers
across the nation. As Federal agencies tasked with regulating and
facilitating the agricultural industry, MRP agencies must perform this
work at the speed of commerce. To do this, AMS, APHIS, and GIPSA must
have strong relationships and partnerships with state agencies,
industry groups, universities, and other Federal agencies, among
others. Further, we are constantly seeking new opportunities to
leverage the capabilities of other USDA mission areas to meet the needs
of producers and consumers.
In addition, I would like to take this opportunity to thank
Chairman Conaway, Ranking Member Peterson, and the Members of this
Committee and their staff for their leadership in the efforts to
reauthorize the U.S. Grain Standards Act and the Mandatory Price
Reporting Act. We are grateful for the Committee's efforts and look
forward to the completion of this important work before September 30,
2015.
Mr. Chairman and Members of this Committee, this concludes my
statement. Thank you for the opportunity today and I look forward to
continuing to work with you. At this time, my colleagues and I will be
glad to answer any questions you may have regarding the MRP mission
area.
The Chairman. Mr. Almanza, 5 minutes.
STATEMENT OF ALFRED V. ALMANZA, DEPUTY UNDER
SECRETARY, FOOD SAFETY, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, D.C.*
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* Editor's note: the Administrators listed as accompanying Mr.
Avalos are also accompanying Mr. Almanza. To avoid duplication they are
not printed here.
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Mr. Almanza. Thank you. Mr. Chairman, Ranking Member
Peterson, and Members of the Committee, I am the Deputy Under
Secretary for Food Safety at the United States Department of
Agriculture, and I would like to thank you for the opportunity
to come before you here today to discuss our food safety
mission. To start, I would like to thank you, Chairman Conaway,
for joining me on the plant tour this past year, and I would
also like to extend the invitation to any of you to accompany
me on a tour in the future. A plant tour is really the best way
to see what our inspectors do on the line and what they are
doing on a daily basis to protect the public's health. I look
forward to continue working with Representatives Rouzer and
Davis, as well as all Members of the Agriculture Committee.
Sometimes it is easy to forget that the meat on your plate
has undergone a thorough process of inspection and testing to
ensure that you don't get sick, but if you are one of the
millions of Americans who consume meat, poultry, or processed
egg products, your food is inspected every single day by the
dedicated man and women of FSIS who are present in all these
plants throughout the county.
Additionally, FSIS administers a labeling program to
protect consumers from misbranded and economically adulterated
meat, poultry, and processed egg products. We are modernizing
the way we do things, and carcass-by-carcass inspection remains
a cornerstone of our work. Our system of inspection is the most
reliable in the world, and I take great pride in the inspection
process after having begun my own career nearly 40 years ago as
a line inspector in Dalhart, Texas.
Today, billions of pounds of meat, poultry, and liquid egg
products are produced, transported and sold every year. A
system of this magnitude requires constant vigilance to prevent
the possibility of foodborne contamination. FSIS is legally
required to have inspectors present across the country in every
plant that processes meat, poultry, and processed egg products.
The agency employs approximately 9,000 employees, and 80
percent of them work in establishments across the nation. FSIS
cooperates with 27 states to develop and administer state meat
and poultry inspection programs that implement food safety
requirements that are at least equal to Federal requirements at
over 1,600 small and very small establishments.
During Fiscal Year 2014, FSIS personnel inspected almost
150 billion head of livestock, nine billion poultry carcasses,
and over 3 billion pounds of processed egg products. Last year,
FSIS conducted nearly seven million food safety and defense
procedures. Some highlights of our achievements this year
include the implementation of our new poultry inspection
system, which will prevent an estimated 5,000 illnesses each
year. We also launched stronger performance measures to reduce
pathogens like Salmonella and Campylobacter in poultry
products, which could prevent an estimated 50,000 illnesses
annually. In addition, we announced a best practices guidance
for controlling Listeria monocytogenes in retail delis to help
prevent cross contamination in deli counters.
We spend much of our time educating the millions of
Americans who consume our products every single day. Over the
past year, we have partnered with the Ad Council on public
service announcements, conducted outreach to at-risk and under-
served populations, and developed our own Smart Phone
application, the FoodKeeper App, in conjunction with Cornell
University and the Food Marketing Institute. As we move
forward, our focus on modernization also has us looking at ways
to modernize pork and beef slaughter.
Our focus on science will increase our use of whole-genome
sequencing, sampling, and the use of new performance standards
to address Salmonella in chicken parts and comminuted poultry.
We are closely coordinating with other Federal agencies, like
the Food and Drug Administration and the Centers for Disease
Control to discover sources of illnesses more quickly and to
respond more effectively during recalls and outbreaks.
In Fiscal Year 2015, we developed harmonized attribution
estimates for Salmonella, E. coli O157:H7, Listeria
monocytogenes, and Campylobacter for major food categories.
Improved estimates of foodborne illness source attribution
can inform efforts to prioritize food safety initiatives,
interventions, and policies for reducing illness outbreaks.
These types of collaborative efforts help FSIS work with our
partner agencies to ensure that food safety is better informed,
better targeted, and more effective. As a public health agency
committed to achieving excellence, FSIS continuously tracks
performance, modernizes methodology, and applies science-based
approaches to the work that we do.
I began my career at FSIS as a line inspector, and I know
firsthand the hard work that these dedicated men and women
perform every day to ensure that we have the safest food supply
in the world. It is because of this work that millions of
Americans can sit down at their table and enjoy safe, wholesome
meals every day.
Thank you for your support, and I hope you will soon join
me in a plant tour to see what FSIS is doing to protect the
American food supply. Thank you.
[The prepared statement of Mr. Almanza follows:]
Prepared Statement of Alfred V. Almanza, Deputy Under Secretary, Food
Safety, U.S. Department of Agriculture, Washington, D.C.
Introduction
Mr. Chairman, Ranking Member Peterson, and Members of the
Committee, my name is Al Almanza, Deputy Under Secretary for Food
Safety at the U.S. Department of Agriculture (USDA). Thank you for the
opportunity to come before you today to discuss the Food Safety and
Inspection Service, our mission, and our people.
Who We Are
FSIS is the public health agency in the U.S. Department of
Agriculture (USDA) responsible for ensuring that the nation's
commercial supply of meat, poultry, and processed egg products, whether
domestic or imported, is safe, wholesome, and correctly labeled and
packaged. FSIS inspection personnel inspect each and every livestock
and poultry carcass before it can enter commerce, and Agency inspectors
inspect every processing plant at least once per shift. No meat or
poultry product can enter commerce unless we can find that it is not
adulterated and apply our mark of inspection. In addition, FSIS
approves the labels of meat, poultry, and egg products and ensures that
they are truthful, not misleading, and contain the requisite
information. We also take action should misbranded or economically
adulterated products manage to enter commerce.
After publication in 1906 of Upton Sinclair's The Jungle, which
described in detail the unsanitary working conditions in a Chicago
meatpacking house, Congress passed legislation providing for the
inspection of meat. Ultimately, this legislation became the Federal
Meat Inspection Act (FMIA). Subsequently, Congress passed the Poultry
Products Inspection Act (PPIA), the Humane Methods of Slaughter Act
(HMSA), and the Egg Products Inspection Act, all of which the Food
Safety and Inspection Service (FSIS) enforces.
What We Do
As stated above, FSIS is mandated to have inspectors present in
virtually every meat, poultry, and processed egg products plant in the
country. To meet this obligation, as of September 30, 2014, the Agency
employed 8,676 permanent full-time employees, including 625 in the
Washington, D.C. area, and 8,051 in the field. These employees work in
approximately 6,426 federally regulated establishments, three FSIS
laboratories, 127 ports-of-entry, and 150,000 in-commerce facilities
nationwide. During FY 2014, FSIS personnel inspected about 148 million
head of livestock, nine billion poultry carcasses, and about 3.2
billion pounds of processed egg products. In FY 2014, FSIS conducted
6.84 million food safety and defense procedures and condemned over 465
million pounds of poultry and more than 205,000 head of livestock
during postmortem (post-slaughter) inspection.
Federal Inspection of Exports and Imports
FSIS regulates all imported meat, poultry, and processed egg
products intended for use as human food. Before FSIS-regulated products
can enter the country, the Agency determines whether the food safety
regulatory system of any country that wishes to export to the U.S. is
equivalent to that of the U.S. Once FSIS finds a foreign country's
system for meat, poultry, or egg products to be equivalent, FSIS
inspects eligible products from that country at U.S. ports-of-entry.
The Agency evaluates an exporting country's food safety system on
an ongoing basis. Each year, FSIS reviews any changes in the foreign
country's food safety system. In addition, FSIS may conduct an in-
country audit of the system and will review the country's performance
in port-of-entry inspections. Based on these reviews, the Agency
decides whether the country is maintaining equivalence, or whether
additional action by FSIS is warranted. This performance-based approach
allows FSIS to direct its resources to foreign food regulatory systems
that potentially pose a risk to public health and makes its
international program more consistent with its domestic inspection
system. Finally, it improves the linkage between port-of-entry re-
inspection and on-site audits.
State Inspection
FSIS also assesses the safety of state-inspected meat and poultry
products through agreements with State Departments of Agriculture. FSIS
works with 27 states to develop and administer state meat and poultry
inspection (MPI) programs that implement food safety requirements that
are ``at least equal to'' Federal requirements at more than 1,600 small
and very small establishments. These establishments can only ship or
sell products within their respective states. State MPI programs must
ensure that livestock are treated humanely by imposing humane handling
requirements that are ``at least equal to'' those FSIS has established
under the Humane Methods of Slaughter Act of 1978.
In 2014, FSIS completed comprehensive reviews of the meat or
poultry inspections programs of Kansas, Missouri, Minnesota, North
Dakota, Wisconsin, and Wyoming. The Agency also obtained self-
assessment reviews of the other 21 MPI programs.
FSIS also cooperates with four states--Ohio, North Dakota,
Wisconsin, and Indiana--to operate a fairly new interstate shipment
program, as provided for in the 2008 Farm Bill. This approach
eliminates barriers and allows small state-inspected businesses to
expand their customer base and explore new markets, by making these
establishments eligible to ship meat and poultry products in interstate
commerce.
Assistance to Small Plants
With more than 90 percent of the 6,000 FSIS inspected plants
considered small or very small operations, FSIS has a Small Plant Help
Desk that serves to assist plant owners and operators with questions.
Many of these questions involve technical expertise, information, and
providing advice on FSIS regulations and policies. During FY 2014, the
Small Plant Help Desk received and responded to 2,042 inquiries in
person, over the phone, and via e-mail. In addition, FSIS publishes
Compliance Guides that help small plants comply with new or modified
FSIS regulations.
Strategic Planning for Accountability
Every 5 years, FSIS adopts a new Strategic Plan that sets out the
Agency's goals and initiatives. The FSIS Strategic Plan is the
foundation for both the long range and day-to-day operations of the
Agency.
A main driver of the Strategic Plan is the desire for the Agency to
continue to be an ever more trusted and successful public health
agency--an Agency that adapts to the changing nature of food safety
risks. Outlined in the Agency's current strategic plan are three themes
and eight goals within those themes. The themes are ``Prevent Foodborne
Illness,'' ``Understand and Influence the Farm-to-Table Continuum,''
and ``Empower People and Strengthen Infrastructure.''
Each year, FSIS also develops an Annual Performance Plan that sets
out three or four key results that each of the Agency's ten offices
intends to accomplish to advance the Strategic Plan. At the end of each
year, we publish a report that sets out how well we did in achieving
key results.
We are now operating under our third Annual Performance Plan (APP)
under the FY 2011-2016 Strategic Plan, and we have already begun
drafting the Strategic Plan for FY 2017-2021. The APP provides the
American public and FSIS employees with a clear list of Agency
priorities and a detailed roadmap of the steps we intend to take to
achieve our goals. It provides an operational plan that we are
following in order to steer the Agency as we work to prevent foodborne
illness and protect public health. It is traceable and transparent, so
that we can be accountable to the Congress and the American public.
A major theme of our current Strategic Plan is Cultural
Transformation. Cultural Transformation is a commitment to work in
collaboration with USDA on civil rights and equal employment
opportunities (EEO), embrace a respectful and diverse workforce, and
strive for a highly effective, collaborative work environment. FSIS
fosters an inclusive workforce by recruiting and hiring skilled
applicants that reflect America's diversity. FSIS eliminates barriers
to equal employment and allows employees to advance based on merit.
Managers and supervisors lead by example to ensure that the work
environment is free from discrimination, hostility, intimidation,
reprisal, and harassment.
In developing the 2017-2021 Plan, we are involving not only our
headquarters leadership but employees in a range of positions across
the Agency. In addition, we have consulted with external stakeholders
so that we have broad input to guide our progress forward.
Modernization
A key theme for FSIS is modernization. Inspection changed from a
sight, smell, and touch approach to a more science-based method when
FSIS implemented its Hazard Analysis and Critical Control Points
(HACCP) regulations between January 1997 and January 2000. Our
inspection is supported by sampling programs such as testing ready-to-
eat meat and poultry products for Listeria monocytogenes, testing for
Salmonella and Campylobacter in raw poultry, and testing for seven
serogroups of pathogenic E. coli (including E. coli O157:H7) in non-
intact raw beef, and by performance standards to assess how well plants
are controlling these hazards.
FSIS also has recently adopted its New Poultry Inspection System
regulations, which focuses the efforts of FSIS inspection personnel on
food safety much more than has previously been the case. FSIS is also
considering changes to how it does inspection in hog and cattle
slaughter plants.
Consumer Outreach
To keep the public safe, we spend much of our time conducting
outreach and educational awareness efforts to the millions of Americans
who consume our products every single day.
Just as FSIS is focusing on modernizing our inspection techniques,
we also are modernizing the way we communicate with our consumers. We
recently celebrated the 30 year anniversary of the USDA's Meat and
Poultry Hotline, which enables consumers to ask questions or report
incidents of foodborne illness. The Hotline receives more than 80,000
calls each year and helps prevent foodborne illness by answering
questions about the safe storage, handling and preparation of meat,
poultry, and processed egg products.
The Food Safety Education Staff (FSES) has had some great successes
in consumer food safety outreach throughout FY 2015 thus far. Some of
these initiatives include: partnering with the Ad Council, partnerships
for reaching at-risk groups, Hispanic outreach, social media, and our
new smartphone application, the Foodkeeper App.
FY 2014-2015 Accomplishments
As I stated previously, FSIS's main goal is to protect the public
health and reduce foodborne illness. Thus, it is a significant
indication of our success that the All-Illness Measure that we have
created, which combines the number of illnesses attributable to meat,
poultry, or egg products caused by Salmonella, E. coli O157:H7, and
Listeria, showed a reduction of about 41,000 estimated illnesses
between FY 2013 and FY 2014, from 427,171 in FY 2013 to 386,265 in FY
2014. Further, in FY 2014, FSIS ``met'' or ``exceeded'' 81 percent of
our annual performance measures.
Our successes have continued in FY 2015. Here are just a few of our
accomplishments:
Began the implementation of the New Poultry Inspection
System after the release of the final rule;
Asked for public comment on performance measures to reduce
Salmonella and Campylobacter in chicken parts and comminuted
poultry. These new standards could help prevent an estimated
50,000 illnesses annually;
Issued a best practices guideline for retailers to help them
to protect public health by decreasing the potential for
Listeria monocytogenes contamination;
Completed an economic analysis for expanding the testing for
non-O157 STEC in ground beef and components other than trim;
Continued to implement the Public Health Information System
(PHIS) by increasing plant connectivity and enhancing
information sharing capabilities, thus aligning our efforts to
modernize food safety through technological enhancements;
Strengthened humane handling in plants;
Developed new in-plant activities, such as the new Food
Safety Assessment (FSA) methodology;
Issued a proposed rule on non-ambulatory disabled veal
calves, which, if adopted, would require that veal calves that
are unable to rise at the time of ante-mortem inspection be
euthanized. Under the proposed rule, all non-ambulatory
disabled veal calves that are brought to slaughter will be
promptly and humanely euthanized, and prohibited from entering
the food supply; and
Finalized the proposed mechanically tenderized beef rule
that makes it easier for consumers to understand what they are
buying at supermarkets, and what steps they must take in the
kitchen to keep their families safe.
Looking Forward
As we move forward, our focus on modernization also has us looking
at ways to modernize inspection, improve our web-based Public Health
Inspection System (PHIS), improve our system for ensuring the safety of
imports, and improve the traceability of products as they move to the
consumer. As mandated by Congress, FSIS is responsible for the
regulation of Siluriformes and Siluriformes products. As soon as the
rule is final, we will begin taking steps to implement this inspection
program. Our focus on science will increase our use of whole-genome
sequencing, increased sampling, and the use of new performance
standards to address Salmonella in chicken parts and comminuted
poultry. We will be ensuring that plants properly validate their HACCP
plans, and we intend to improve how our inspection personnel verify how
sanitary dressing is done, to minimize the possibility that
contamination will occur during the slaughter process. With regard to
illness investigations, we are also coordinating closely with other
Federal agencies, like the FDA and the CDC. Increased communication
with our partner agencies makes FSIS more effective and improves our
responses during recalls and outbreaks. In 2011, we created the
Interagency Food Safety Analytics Collaboration (IFSAC), which brings
together senior leaders and technical experts on food safety
attribution from CDC, FDA, and FSIS to improve coordination of Federal
food safety analytic efforts and address cross-cutting priorities for
food safety data collection, analysis and use.
In FY 2015, one of IFSAC's major successes was developing
harmonized attribution estimates for Salmonella, E. coli O157, Listeria
monocytogenes, and Campylobacter for major food categories and hosting
a public meeting, with over 200 people in attendance in-person and
online, to share those findings.
These improved estimates of foodborne illness source attribution
can inform efforts to prioritize food safety initiatives,
interventions, and policies for reducing foodborne illnesses. These
types of collaborative efforts help FSIS work with our partner agencies
to ensure that food safety is better informed, better targeted, and
more effective.
Conclusion
These are some of the ways we are holding ourselves accountable for
achieving positive results and outcomes on critical food safety issues.
We continuously track performance, modernize, and apply science in
developing our approach to the problems we face.
I began my career at FSIS as a line inspector. I know first-hand
the hard work that the dedicated men and women who make up FSIS's
inspection force perform every day to ensure that we have the safest
food supply in the world. It is because of this work that millions of
Americans can sit down at the table and enjoy safe, wholesome meals
each day. Thank you for your support for our vital work as a public
health agency.
The Chairman. Thank you, gentlemen. I appreciate both of
your testimonies. Mr. Avalos, I was privileged to see your
feral swine program at work in central Texas. We had a great
example of the state agency and your agency working together to
provide that service. And we had landowners who were the
beneficiaries of having the feral swine taken care of.
Obviously, you have some landowners in central Texas who
provide hunting opportunities, but you also have other
landowners that the feral swine is a nuisance and a pest and a
predator, so I appreciate the good work that you are doing
there. Mr. Almanza, thank you also for your tour at the packing
plant in San Angelo, and the work that went in that day to get
you down there and have you join me with the good work there.
You let me actually see your inspectors doing their job. I
don't think you had set up the carcasses to go through at the
appropriate place so there wouldn't be anything wrong; but your
guys looked like they were taking care of business.
Recently, we had a Consumer Reports article out that ground
beef contains harmful bacteria, and that 18 percent contains
bacteria resistant to more than three classes of antibiotics.
The report claimed that the numbers are far less if they are
from a sustainable beef, whatever that means. Could you give me
your take on that consumer report and what it means to
consumers?
Mr. Almanza. Yes, sir. The recent Consumer Reports study
was what I would say an unfortunate article that serves to
scare consumers. The most deadly pathogens that FSIS routinely
tests for were not found in the report sampling. Rather, the
study focused on generic bacteria. The Consumer Reports article
confirmed that there were no Shiga toxin producing E. coli
STECs present in the ground beef samples; and so these STEC
strains have been declared adulterants by FSIS because they can
cause severe illness. So we believe that the article overlooks
many requirements and achievements that FSIS and USDA
inspection and testing programs for meat products right now.
The Chairman. I appreciate that. Mr. Avalos, you mentioned
significant budget cuts to your team. Can you help the
Committee understand what the impact has been on your ability
to do what you are doing?
Mr. Avalos. Mr. Chairman, most of the cuts that were made
to my mission area were at APHIS. And what we did was to look
for ways to do as much work, in many cases, more work, with
less money; and we looked for efficiencies, and Administrator
Shea and his team did a really good job in finding ways to be
more efficient and do the same job, in many cases more work
with less money.
So I am going to ask Administrator Kevin Shea to expand on
my response.
Mr. Shea. Thank you, Mr. Under Secretary. We did several
things. As Mr. Avalos said, first, we looked for efficiencies.
Second, we looked for programs that were no longer as effective
or we could not be as effective at as we would like to be. For
example, we were spending a lot of money or the Emerald Ash
Borer, a significant forest pest, but we simply lacked the
tools to have great success against it; so we reduced spending
in that kind of program.
The most damaging thing was we did have to leave over 800
positions unfilled, so we lost over ten percent of our
workforce; and that does mean that it is more difficult for us
to respond quickly when we have a new pest or disease outbreak.
It means it is more difficult for us to have full surveillance
around the country so we can find these outbreaks faster, and
simply, more difficult to carry out all of our activities.
But as Mr. Avalos said, people pitched in, did more, and
the people who were left behind continue to work hard.
The Chairman. Thank you for that. The first couple things
you did, about finding efficiencies and looking for programs
that may have outlived their usefulness, I wouldn't call those
damaging. I would say those are appropriate for every
organization to go through. But helping policymakers understand
the other side of that where you are having shortfalls that
might affect health and safety would be helpful. So I
appreciate your work.
Mr. Peterson, for 4 minutes.
Mr. Peterson. Thank you, Mr. Chairman, and I thank the
panel for being here. I have been to the plants and seen your
people in action. You are right. They do a great job. I want to
focus in the little bit of time I have on this avian influenza
which hit my district more than anyplace in the U.S. First of
all, I might say APHIS, by and large, did a pretty good job
given what we were dealing with, but there were problems, and I
am sure you know that, in the process.
So now, one of the things I am hearing from my egg layers
is that you have been responsive to some of these requests on
the changes in the indemnification formula, but there are still
some unanswered questions about what goes into the formula. I
just met with some of them yesterday. Is USDA going to release
that formula so that everyone is on the same page about what it
covers and what it doesn't? Is that going to be released so we
can see it? Mr. Shea?
Mr. Shea. Absolutely, Mr. Peterson. We will be happy to
post on our website and release anything that has to do with
any of the formulas----
Mr. Peterson. That hasn't been done yet, or haven't you
finalized it?
Mr. Shea. Well, I would say this: We do adjust the
indemnity formula as market conditions change, because the
indemnity intends to pay fair market value. Fair market value
can change, but the basic formula remains pretty much the same.
And to the extent that is not well known, we will make it
better.
Mr. Peterson. Yes. And then the part of it that has to do
with paying for the depopulation and cleaning and all of that
stuff, there are some issues with that. And it seems like that
is kind of a moving target. Has that been finalized, or is that
still a work in progress?
Mr. Shea. That is still somewhat a work in progress. We
appreciate what people are saying. What we want to do is move
toward a standard formula for compensation for cleaning and
disinfection.
Mr. Peterson. What I am hearing is there a lot of
bureaucracy as there was in this current situation, people
wanting to go to some sort of simplified method, where it is
maybe so much a square foot, so much a bird or something and
then to have people being able to compete for that business,
and maybe letting the people themselves do the work as opposed
to bringing in all these contractors, which might have spread
the disease. Are you working on that?
Mr. Shea. Absolutely. We think that is a great idea, and we
want to move toward that kind of formula. Indeed, in many
cases, the owners themselves are in the best shape to do the
work, and, additionally, it helps keeps their workers employed,
who otherwise may not continue being employed, and also local
folks.
Mr. Peterson. Where are you in that process? Are you
anyplace to be able to come out and start talking about that or
putting out information on how you are going to do this?
Mr. Shea. We are not quite there yet because we want to
make sure that we have tabulated what all the costs were so far
this year, so we can get this formula correct. As I mentioned
earlier, there are kind of two different formulas here, one for
indemnity for the birds themselves and then one for this work.
And this is the work that we still need a little bit more
information to complete, but it is coming very, very soon.
Mr. Peterson. We are going to probably ask you to come up
and talk to us about some questions that have been raised
there. One last thing. On the depopulation, I appreciate your
goal of 24 hours. I think the sooner you can depopulate, the
sooner you stop the virus. As soon as the birds are dead, as I
understood it the virus does not continue. I think in turkeys
it is one thing, but when you get into these layer operations,
I don't know how in the world you are going to kill or
depopulate those in 24 hours, unless you shut off the
ventilation, which has not been supported, and I guess the AVMA
doesn't support it. So where is that whole process at?
Mr. Shea. If, indeed, we see another large outbreak like we
did, and, of course, we hope we don't, but if we do, we are
going to have to look at all the tools available and make those
decisions at the time. But everything needs to be on the table,
but we still need to look through all the possibilities.
Mr. Peterson. So you haven't made any--everything will be
open then as you go forward?
Mr. Shea. I think we will be reaching very final decisions
very, very shortly. Literally in a matter of days as opposed to
weeks, we hope to have the final touches on our fall planning
that will address all the various depopulation options.
Mr. Peterson. Thank you, and, again, thanks to the USDA.
You guys have really stepped up to the plate, and our people
appreciate it.
The Chairman. The gentleman's time has expired. I recognize
Mr. Neugebauer, for 4 minutes.
Mr. Neugebauer. Thank you, Mr. Chairman. Mr. Shea, last
fall, 27 Members of the Texas Congressional Delegation wrote to
GAO expressing concern about the transparency of APHIS' site
reviews in their decision to allow fresh meat from the regions
of north Argentina and Brazil with historical risk for foot-
and-mouth disease that had been recognized. Specifically, we
asked the GAO to open a review of the methodology and the
management controls used when APHIS conducted their site visits
to determine animal health information. And thankfully, the GAO
agreed to do that. I wondered if you could kind of give us an
update on the progress that has been made in the GAO review?
Mr. Shea. Mr. Congressman, I am not aware that the GAO has
directly contacted us yet to start the specifics of the review,
but we are certainly very prepared and happy to cooperate with
them as soon as they do.
Mr. Neugebauer. Can you kind of walk us through the process
of why this review is in question, because a lot of people were
concerned about where we had a presence of foot-and-mouth
disease in that region, that the decision was made to allow us
to import that.
Mr. Shea. I understand why there is a lot of concern. Foot-
and-mouth disease, of course, is probably the biggest concern
for livestock industry in the United States; and, indeed, there
have been cases of foot-and-mouth disease in Brazil and
Argentina in the past, but there haven't been any since 2006,
and we did several site visits. We reviewed all the literature.
We looked at their veterinary infrastructure, and proposed a
rule that would be just like the one we have applied to
Uruguay, which would require that there be inspection before
and after slaughter, that the animals be deboned, and that the
lymph nodes be removed, and that the pH level is moved to a
level where foot-and-mouth disease can't exist.
These are the same kind of mitigations that the European
Union uses, the same ones that OIE uses, and they have not
found any movement of foot-and-mouth disease from countries
where they apply these mitigations.
But all that said, I understand the concerns because foot-
and-mouth disease is, indeed, our number one livestock concern,
so I can understand why people wanted to know more about it,
and, again, we certainly welcome GAO to look at it.
Mr. Neugebauer. So you have not been contacted by GAO about
beginning this process?
Mr. Shea. I am not aware that we have been, no.
Mr. Neugebauer. Can you double check with your folks and
get back to us on that?
Mr. Shea. I will be very happy to do that.
Mr. Neugebauer [presiding.] I will yield back my time and
now recognize the gentleman from Virginia, Mr. Goodlatte, for 4
minutes.
Mr. Goodlatte. Thank you, Mr. Chairman, and I want to
welcome this panel as well. Under Secretary Avalos, as USDA
marketing orders fall under your authority, I am sure you are
aware how very different our dairy and specialty crop markets
are today than they were in 1937 when the Agricultural
Marketing Agreement Act was passed. As evidenced by the recent
Horne case in which the Supreme Court ruled against USDA and
aspects of the Raisin Marketing Order, farmers are increasingly
doubtful about the utility of these antiquated programs.
I am sure that marketing orders will gain even more
scrutiny now that the USDA is in the midst of considering
California's bid for a Federal Milk Marketing Order. Therefore,
considering that the California dairy industry represents 20
percent of all U.S. milk production, it is obvious that
California's entry into the Federal system will deeply impact
dairy markets nationwide. Can you give us a summary of the
impact of such an Order on the rest of the country, and have
you taken steps to analyze the impact of everyday consumers?
Mr. Avalos. Congressman, I am very much aware of the
proposal, the request for marketing order from California.
There is another marketing order that we are working on at this
time, that is a U.S. Pecan Marketing Order. We received a
proposal last month. So anyway, marketing orders are still
ongoing, two marketing orders in progress right now to create a
marketing order. As far as implications from the Horne case, I
am going to ask our Administrator Alonzo to answer your
question.
Ms. Alonzo. Good morning, Mr. Congressman. Yes, in June,
the U.S. Supreme Court decided against USDA in the Horne case,
regarding personal property, taking without just compensation.
But we believe that the Supreme Court's decision in Horne
addresses a very narrow situation where under the Raisin
Marketing Order, the government, through an administrative
committee, takes title to a crop held in reserve and may
physically appropriate that crop. The decision, we believe,
does not address other types of volume controls or reserve
programs. There is no other administrative committee currently,
physically appropriating or taking title to the agricultural
product, so we believe that this is a very narrow reading, and
it is applicable to this case and not to other marketing
orders.
Mr. Goodlatte. And would one of you answer my question,
which was, can you give us a summary of the impact that such an
Order, meaning the California Dairy Marketing Order, will have
on the rest of the country? And have you taken steps to analyze
the impact on everyday consumers?
Ms. Alonzo. Yes. California--in fact, next week, well, the
2014 Farm Bill allowed California producers to request a
Federal Milk Marketing Order. And next week, September 22,
there is going to be a hearing in Clovis, California to
consider the establishment of a California Federal Milk
Marketing Order. The hearing is going to take a few weeks. We
have received proposals, and we have economic analyses from
some of those proposals; but the hearing that is expected to
take several weeks is going to be very important and pertinent
to our ability to go forward. And so we don't have a concrete
analysis, but based upon----
Mr. Goodlatte. Let me interrupt you because my time is
expiring. Mr. Chairman, if I might ask one more question as
follow-up. After the Supreme Court issued the Horne decision,
the USDA amended general regulations for Federal fruit,
vegetable, and specialty crop marketing agreements and
marketing orders to accentuate that antitrust laws do apply to
these marketing order programs. Could you explain why the
Federal Milk Marketing Orders were not covered under this same
final rule?
Ms. Alonzo. Can we get back to you on that because I don't
quite think----
Mr. Goodlatte. Pretty glaring if you change the marketing
orders in several other areas, fruit, vegetable, specialty
crops, but you don't change it from milk, there has to be a
reason why milk was left out.
Ms. Alonzo. We haven't completed the California. We are
just going to a hearing.
Mr. Goodlatte. We are talking about something different
than California now. We are talking about all Federal Milk
Marketing Orders.
Ms. Alonzo. Can we respond to you on the record later on
about that?
Mr. Goodlatte. When will you be able to do that by?
Mr. Avalos. We can do it today.
Mr. Goodlatte. That would be fine.
Mr. Neugebauer. I thank the gentleman. I want to apologize
to the gentleman from Nebraska. I didn't see him sitting down
there in that hole position, and I skipped over him, and I
apologize. You are now recognized for 4 minutes.
Mr. Ashford. I am fairly low down here. Thank you, Mr. Vice
Chairman. I just want to move a little bit away from where we
are in the question and talk a little bit about what is
important to us in Omaha, which is an urban area obviously. My
district is urban, but we are in a very ag state. We had the
conversation with Mr. Mitchell earlier, having been to Nebraska
many times.
Administrator Alonzo, you were there as well, and I want
you to know, personally, how much I appreciate your efforts on
the panel, what a significant event that was. We talked about
the Know Your Farmer, Know Your Food Initiative. It is very
important to our city that our population be, first of all,
exposed to products from the farm obviously, both because it is
good for the young people to understand their state, but most
importantly, on the nutrition side. Where do you see this
initiative going, and obviously the demand and interest in
Omaha, Nebraska is significant. Could you just generally
describe how you see this happening, being rolled out? Where it
is going?
Ms. Alonzo. Sure. And congratulations to you, Congressman
Ashford, for your leadership in putting together that
conference, which was probably the first of its kind. Many of
our agencies at USDA participated, NRCS, the FSA, RD, and AMS;
and so we thought it was so well attended and so well done and
really underscoring just how important this sector is and how
it is growing. According to industry estimates in 2014, local
food sales topped $11.7 billion. People, as you know, and this
was discussed during the conference, want to know where their
food is coming from. They want to know their farmers. They want
to keep money in their local communities. They want to create
jobs and access to healthy foods, and in the case of Omaha, how
do you bridge the rural and urban communities?
And at the Department, and as we mentioned at the
conference that day, Secretary Vilsack from the Department is
very aware of this interest and its growing dynamic. We
identified this area as one of the four pillars of the work
that we are doing to revitalize the rural economy. You
mentioned the Know Your Farmer, Know Your Food Initiative, and
that is the coordinating tool that we use at the Department by
which we all work at.
And in the past 6 years, in fact, under this initiative, we
have invested more than $800 million in more than 29,100 local
businesses in the last 6 years as mentioned. I think where we
are going is that we are trying to be even more responsive to
the needs of the marketplace. We recently had the Farmers'
Market Week, and throughout the nation, many states were
celebrating Farmers' Market Week. We have about 8,500 farmers'
markets now in the U.S., and it continues to grow. There is
also other business models that are opening up, community-
supported agriculture, food hubs, and so we are going to
continue within our auspices to support this. My agency is part
of the Know Your Farmer, Know Your Food group, and what we do
is primarily in the area of technical assistance. Last year, we
fielded something like 2,000 calls and requests for help. We
also, via the farm bill, were supported with many grants,
several grants, one of them called the Farmers' Market and
Local Food Promotion Program, of which I know many of Members
here, their constituents have taken advantage of.
Also the specialty crop block grants also focusing a lot on
local and regional foods, and these are block grants to the
states that the State Departments of Agriculture work with. We
just announced this week, or last week, a multi-state project
across states, $3 million; and these are competitive grants,
the State Departments of Agriculture to work on a lot of these
issues in terms of local.
We are also doing all that we can to put resources
together. A lot of folks don't know where to go for their
farmers' market or their food hubs, so we have direct----
Mr. Ashford. I think my time has expired.
Ms. Alonzo. I get very passionate.
Mr. Ashford. No. Just, also thank Eleanor Starmer as well
for coming out. Thank you, Mr. Vice Chairman.
Mr. Neugebauer. I thank the gentleman, and now the
gentleman from Georgia, Mr. Scott, is recognized for 4 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and
ma'am and gentlemen, thank you for being here today. Mr.
Peterson asked about the potential for insurance for poultry
growers. I, too, am concerned about the growers of poultry, so
that is a bipartisan issue and I look forward to a review of
those answers. I want to ask about something that has been
brought up before, the pecan order. We have a tremendous number
of pecan growers in my area. When I had cows, I paid a dollar
every time we sold one into the beef industry and certainly
thought that was money well spent as a cattleman. And I
understand the hearings are complete on the Pecan Marketing
Order, and what is the status of the proposal for pecans, and
when do you estimate we will see the next action on this issue?
Mr. Avalos. Congressman, being from New Mexico, also a
major pecan-producing state, and having so many friends in the
pecan industry, not only New Mexico, but in Texas, and now, I
have quite a few friends in your State of Georgia, it is
absolutely amazing that we took these growers, who at one time
actually didn't get along, seeing them work together, seeing
them work towards a marketing order for the benefit of the U.S.
pecan industry, not for Georgia, not for New Mexico, not for
Texas, but for the U.S. pecan industry, is absolutely
incredible.
So anyway, three hearings were held, one in New Mexico, one
in Texas, and one in Georgia. Tremendous attendance; received
tremendous input from the industry. So now we are in the
assessment stage, and I am not sure what the next steps are
exactly, but I am going to ask Administrator Anne Alonzo to
expand, but I just wanted to emphasize that if this marketing
order, if it is voted on and goes through, will be a landmark
accomplishment for the pecan industry, and it is all about
obtaining market share and staying on top of the nut industry
in the world.
So I will turn it over to Ms. Alonzo.
Ms. Alonzo. Thank you, Under Secretary. Yes, a proposal was
submitted on behalf of the pecan industry by the American Pecan
Board, and so as mentioned, we had three hearings this summer;
and the next steps, that based on the hearing record, and the
briefs that we have received, we are going to move forward in
the formal rulemaking process, which includes a recommended
decision, a public comment period, a Secretary's decision, a
grower referendum, and a handler sign-up. And so those are the
next steps in the process for the Pecan Marketing Order.
Mr. Austin Scott of Georgia. Thank you for that. I know one
other thing that would very much help that industry is if we
were able to get the trade barriers with India removed.
Certainly a tremendous market there, and anything that the
people in your agency can do to help in removing those trade
barriers, I would certainly appreciate.
With that, Mr. Chairman. I will yield back the remaining 35
seconds.
The Chairman [presiding.] The gentleman yields back. Mr.
Crawford, 4 minutes.
Mr. Crawford. Thank you, Mr. Chairman. Thank you
Secretaries and Administrators. Mr. Shea, from what I
understand, APHIS is coming close to finalizing an SPS
agreement with China for the import of U.S. rice. Throughout
the process there have been some hang-ups on protocols like
trapping, labeling, and segregation and varieties, but it seems
like these issues have slowly been resolved. Can you give us an
update on how this process is moving along and shed some light
on how China is generally, when it comes to adhering to SPS
protocols? I know they have a tendency to kind of move the goal
posts, and I just want to get your assessment.
Mr. Shea. Congressman, as you said we are very, very close.
I think we have been working with them and they have been
working with us in good faith on this particular issue. And we
are very close. We had hoped to have been there already, but we
are not. Things move slowly in negotiations with the Chinese as
always, but we think we are very, very close to an agreement,
but not quite there yet.
Mr. Crawford. Thank you. Mr. Almanza, we met with
Ambassador Froman last week to discuss the status of TPP
negotiations, and I asked him why USTR has been intervening
with OMB to hold up on issuing the final catfish inspection
program rules. His response was that they were worried about
making sure the rules are consistent with WTO protocols, and
they want to make sure it is implemented without any objections
from our trading partners, but what is confusing to me in this
whole debate is don't these new rules follow the same
equivalency standards as we have for chicken, livestock, and
poultry in general? So why would a system we have had in place
for decades cause a trade dispute?
Mr. Almanza. I would say it is because we have never
inspected catfish, so that is probably a nuance there, but,
yes, the equivalence process for other countries remains the
same as with any other products that are imported through FSIS.
Mr. Crawford. Did Ambassador Froman or staff at FSIS work
with you during the development of the catfish inspection
program so you could arrive at a product that is acceptable to
everyone?
Mr. Almanza. Yes.
Mr. Crawford. And if so, I don't understand what the
concerns are on the back end.
Mr. Almanza. There are a number of issues that we have gone
back and forth with them on, which is typical for a proposed
rule, and this one, like I said, has a little bit of an added
nuance in that it is going to be a totally different type of
inspection protocol than we have ever had for catfish; and so
meat, poultry, processed eggs, and catfish, catfish is just a
different species that we have never done, and that is part of
it.
Mr. Crawford. Okay. Early on, I--I am going to shift gears
a little bit here--I supported original, proposed new poultry
inspection system rules which changed the role of food safety
inspectors and increased line speeds. We have a few pilot
plants in my district, and poultry companies there reported
tremendous success on all fronts. I was disappointed when the
rules were finalized that only food safety protocols were
changed while the line speeds were not permitted.
So a couple of problems there, incentive for plans to move
the new inspection models impaired because they don't have the
opportunity to increase production speeds; and if the incentive
isn't there, we are not making important steps toward improved
food safety. It seems like a lose-lose. Can you report to the
Committee in terms of how many plants have begun participating
in the new model, and do you see any way to get back to the
original proposed line speed?
Mr. Almanza. So we currently have 49 plants that have
expressed an interest to opt in, which includes the original 20
that we had under what was a HIMP models project. So those
plants are able to maintain the line speed which we thought was
going to go along with this rule at 175 birds per minute. But
what we are looking at is the food safety value, and to me
right now, companies, for the first time, we are having them
address Salmonella and Campylobacter control and required to do
their own testing, which we hadn't done before. So that is a
public health food safety advantage.
The other side of it, we believe, that with time, we will
see what the plants that are opting in develop data as to how
they are performing, and then we will look down at the future
and see how that measures up to the plants that are running at
175 and see if there is any difference.
Mr. Crawford. Thank you. I yield back.
The Chairman. The gentleman yields back. Mr. Yoho, for 5
minutes.
Mr. Yoho. Thank you, Mr. Chairman. I appreciate the panel
being here. Mr. Shea, when you started off with talking about
the decreased number of inspectors as dangerous in general, but
especially in the face of an outbreak; and we in Florida with
our Florida orange juice here--I hope this is not our last
crop--with citrus greening and now with the Asian oriental
fruit fly, I am sure you are aware of the damage it has done.
Adam Putnam, our Commissioner of Agriculture, has called a
state of emergency for our state. And if that gets up in the
Miami area, we are looking at a $1.6 billion economic impact,
and we appreciate the research and work that you guys have
done. Knowing that, and you had brought up about the foot-and-
mouth disease, how they haven't had an outbreak in South
America since 2006, knowing the difficulty we have of exporting
cattle that have been exposed to blue tongue, or the threat of
BSE going into other countries and we know the economic impact
and the danger that foot-and-mouth disease could have here in
America with all cloven livestock, it is estimated to be
between $150 to $250 billion is what I have heard, different
estimates.
When I look at the benefit of importing beef from any
country that has had that or they are using a modified live
vaccine, I would like to hear your thoughts on that. And then
also another question is, and I want to commend the USDA and
APHIS in the Plum Island Research for coming up with a leader
list of foot-and-mouth disease vaccine. It is cutting edge
technology. Being such a safe vaccine, will that be rolled over
in production in the United States and have a provisional
release on that where they can manufacture it here in the
private-sector?
Mr. Shea. I will take the second part first. Our colleagues
in the Agricultural Research Service did, indeed, come up with
a new vaccine that we are now working with them on to see how
it can be tested and whether or not it can be produced in the
mainland in mass quantities. We are certainly not at that point
yet. We can't even bring a vaccine onto the mainland without
special approval from the Secretary, so we are still working
through that process; and indeed, foot-and-mouth disease, of
course, is also a select agent, so we have to work through our
select agent regulation.
Mr. Yoho. How long have we been waiting on that approval?
Mr. Shea. We are just now getting to that point. So that
has great promise, and you are absolutely right. We would be
better off having more FMD vaccine available and more kinds
available, and so we are certainly going to be working with our
colleagues in ARS to pursue that.
As to your first question about the beef from Argentina and
Brazil, I understand that importing some beef from Brazil or
Argentina might have limited impact, or limited benefit to the
U.S., but we in APHIS see it somewhat differently. We need to
do rules like this so we can have credibility going around the
world to, as you say, get our beef into other countries. So if
we want other countries to treat us the same way, we need to
apply the same kinds of principles.
Of course, we believe, with foot-and-mouth disease, it is a
special threat. I understand that completely, and that is why
before we would let beef in from Argentina or Brazil, the 14
states of Brazil, we have all those mitigations required that I
mentioned earlier. So that is our thinking of why we think it
is appropriate to do it while still understanding your very
valid point.
Mr. Yoho. I know the Administration is trying to allow that
beef to come into this country, but before the rules and all
the studies have been done, I would hope that APHIS would stand
strong to protect the domestic beef population so we don't have
that threat. I yield back. I am out of time. I look forward to
talking to you down the road.
The Chairman. The gentleman yields back. Mr. Rick Allen, 4
minutes.
Mr. Allen. Thank you, Mr. Chairman. I thank the panel for
your testimony here this morning. And just thinking about the
process, dealing with everything that you have to deal with, I
know our state commissions, their budget is about a little
north of $51 million, and particularly dealing with the avian
flu and some other things, and realizing that we are all
stretched budget-wise, has there been any attempt at overall
collaboration? I know the states are sensitive to Federal
intrusion, and I understand that as far as, particularly from a
regulatory process. But it looks like when we have a situation,
say in Iowa, in Minnesota, it looks like it ought to be kind of
all hands on deck across the country, because eventually we are
going to all possibly be affected by that.
And I hear from our farmers' and our producers often about
the regulatory environment and kind of what the, okay, yes, and
we appreciate your help very much, but there always seems to be
a price to pay for that.
Have you all thought about some overall, and I will ask
both the Under Secretaries, any overall collaboration across
the country when we have these events, whether it be foot-and-
mouth disease or avian flu or whatever and say all hands on
deck; we need to deal with this problem?
Mr. Avalos. Congressman, we actually have quite a bit of
cooperation working together with our stakeholders throughout
the country. For example, at APHIS, vet services, we have
cooperative agreements for most of our diseases, for different
pests, with the states, animal disease traceability. We
implemented a national program where we have complete
cooperation nationwide with the states, and a lot of the
funding that the states receive, they received from USDA.
So some of this is already ongoing. I understand what you
are saying absolutely because I know that state budgets are
tight, and when a major outbreak like, in this case, high-path
avian influenza; in other cases we had Asian long-horned
beetle; we had European grapevine moth, and we can go on and
on. So we do look for ways to be more efficient, look for ways
to work with our stakeholders across the country.
Another example, we mentioned the feral swine program. We
received money from Congress, Federal money, but it is not 100
percent Federal program. Every state is a stakeholder, and
every state puts money into this, and the private-sector puts
money into this, so some of this is ongoing.
Mr. Allen. Right. Certainly it is a big country. We have
tremendous resources. Obviously, the poultry industry is the
largest industry. I mean, Georgia is number one in that
industry. We have tremendous. We have a poultry research center
there at the University of Georgia. And I would think across
this nation, including USDA, we would have the resources
available to deal with these matters, even when you are, as you
say, stretched. I certainly think that collaboration in all
instances is very important. I would also like a quick update
on the, Administrator Shea, on the various aspects of the high-
path avian influenza.
The Chairman. Mr. Allen.
Mr. Allen. Timed out?
The Chairman. Yes. We will do a second round if you need
to. Mr. Thompson, for 4 minutes.
Mr. Thompson. Mr. Chairman, thank you. Thanks to all the
Secretaries, Administrators, for your service, for being here
today. I wanted to, Administrator Shea, APHIS has made some
very firm commitments about how long it takes to make
regulatory decisions for biotechnology products, which
obviously are very important. This is something this Committee
has worked on. My question is pretty straightforward. Are you
meeting those goals? Can you talk about the process a little
bit?
Mr. Shea. Yes, we are absolutely making the goals. We had
23 deregulation decisions pending 3 years ago. Twenty of those
23 have been made. Since that time, 11 more deregulation
requests came in. We have completed seven of those and expect
to complete three more of those within the next month. So there
are only seven pending decisions right now, and that should be
down to four within a few days. So we made some tremendous
improvement there.
I think one thing we simply did was, something that a lot
of folks kind of miss, in processes, that there are a lot of
internal deadlines; and you have to enforce each internal
deadline with all the various people that have to approve
something, and just by doing that, we made great progress. We
also are focusing on novel or new kinds of technologies that we
are looking at so that we can take our prior analysis and
decision-making on more standardized biotechnology and make
those decisions more quickly. So we are really doing very, very
well with this.
Mr. Thompson. Thank you very much. Mr. Secretary, you
recently proposed very stringent, new performance standards for
ground turkey and chicken products. Do you think the industry
as a whole can even be able to meet those new standards, and
are you certain that their implementation will result in
quantifiable benefits to American consumers that will
ultimately outweigh the cost to both the industry and the
consumers?
Mr. Almanza. Yes, we do believe that they would be able to
meet those standards. I think they have made significant
strides since we have been talking about this, and we proposed,
they understand about more stringent performance standards that
we are going to have. We do believe that they will be able to
meet them ultimately. They have met them before, and we do
believe that there is going to be a quantifiable advantage to
the American consumer just based on some of the problems that
we have had in the past with those products.
Mr. Thompson. So you will be able to measure, and at some
point, share with us, the cost-benefit analysis of the cost of
implementing the regulations versus the benefits?
Mr. Almanza. Certainly we can provide that to you if you
would like that.
Mr. Thompson. Sure. I think that is important any time we
are looking at regulation.
Mr. Almanza. Absolutely.
Mr. Thompson. I appreciate what you are doing.
Administrator Mitchell, at times, livestock market owners have
been told by GIPSA they may not exclude people from their
places of business. When can a livestock market exclude someone
for financial reasons, and how can they go about it?
Mr. Mitchell. Well, we expect markets to admit all willing
sellers and buyers. The exception helps to ensure livestock
producers who cosign livestock will have the widest possible
pool of potential buyers. Further, the United States Supreme
Court held that the Packers and Stockyards Act makes stockyard
market agencies public utilities with a duty to serve all
impartially and without discrimination.
At the same time, the Act makes the responsibility of every
stockyard owner to prescribe rules and regulations to require
those persons engaging in the purchase, sale, or solicitation
of livestock, to conduct their operations in a manner, which
will foster, preserve, and ensure an efficient, comprehensive
public market. GIPSA expects market agencies to take those
reasonable steps to assure that those who bid on livestock have
the financial ability to pay for the livestock and to assure
that the market personnel and market participants behave
appropriately.
Occasionally, a market may find it necessary to exclude a
buyer because the individual has failed to pay for livestock.
Even less frequently, a market may determine that a market
participant's presence is disruptive to the conduct of business
and act to exclude that individual. GIPSA has not addressed the
statutory requirements through regulations. Rather, the agency
has relied on the livestock markets to conduct their business
fairly and with professionalism. In the rare instances where a
problem arises, GIPSA would investigate a complaint that an
individual has been unlawfully excluded from market and
determine whether the actions of the market violate the Act.
Mr. Thompson. Thank you. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired. Mr. Kelly,
for 4 minutes.
Mr. Kelly. Deputy Under Secretary Almanza, I just want to
follow. I share the sentiments from the gentleman from Arkansas
as to the catfish. What other meats are not inspected that
either come in or don't have similar inspection patterns that
come into the United States that we export?
Mr. Almanza. What other?
Mr. Kelly. Meat. There is for poultry. There is for beef.
What other meat, other than catfish, is not inspected that we
export that does not have a dual inspection role, either going
in or coming out?
Mr. Almanza. Right. The only thing that FSIS is responsible
for is meat, poultry, and processed eggs. Everything else is
basically inspected by FDA.
Mr. Kelly. Okay. And this is for Administrator Shea. While
high-pathogen avian influenza hasn't affected the southeastern
United States of which Mississippi and several other states are
there, our poultry producers and resources are doing all they
can to prepare. What lessons have you learned at APHIS about
the spring's avian influenza outbreak that will make it better,
make you better able to respond to that when and if it hits the
Southeast?
Mr. Shea. First, of course, we know there needs to be
better biosecurity. Biosecurity in poultry farms is really
good, but not good enough for this kind of outbreak, so we need
to step that up. That is the lesson. But once an outbreak does
occur, we have learned a lot of lessons. First, we need to
depopulate the sick and exposed birds as quickly as possible;
two, we need to compensate those owners quickly so they can get
back on the road to recovery, get back into business; we need
to very quickly determine how to dispose of the carcasses. That
was something that was a cause of delay before. We need to know
whether we are going to compost them in the hothouse, compost
them in the field, bury them, incinerate them, or take them to
a landfill; but we need to make that decision very, very
quickly. In the Southeast with lots of broilers, composting in
the house would probably work well; but we need to make that
decision on a case-by-case basis.
I know in Georgia, they would prefer to not do that, so we
need to work with everyone on that. We also know we need
consistency on how we are going to clean and disinfect each
facility once we are done.
Mr. Kelly. Mr. Under Secretary, I am not sure who to
address this question to, but one of the issues I had come up
while I was back home in district, was between the grower and
the owner of broilers, a lot of times the grower does not have
insurance or cannot get insurance and it goes to the owner of
the broilers, not to the grower. Are there any provisions, or
has USDA, or has anyone looked at how do we take care of the
grower who not only loses his crop that he doesn't get paid
for, but also is not capable of growing crops in the future or
for a long time?
Mr. Avalos. Congressman, that question has come up before
in conversation, and I do not have an answer for you but
Administrator Shea can explain the process to you.
Mr. Shea. It is kind of ironic, but for low-pathogenic
regulations, we do require that the grower gets some of the
compensation; and we do not have that in our current
regulations for highly-pathogenic avian influenza, but we are
looking to correct that.
Mr. Kelly. Thank you both for your answer. Mr. Chairman,
thank you again for allowing me, and thank the panel, and I
yield back the balance of my time.
The Chairman. The gentleman yields back. Mr. DesJarlais, 4
minutes.
Mr. DesJarlais. Thank you, Mr. Chairman. Mr. Shea, you and
I have talked a few times by letter and otherwise regarding the
walking horse industry, and I wanted to speak with you a little
bit today. I sent you a letter on August 10, and you were very
gracious to give me a response by August 20, and I appreciate
that. I have had a lot of calls from constituents over concerns
about the objectivity in the inspection process on the walking
horses, and the numbers grew to the point that I decided to
hold a town hall during the week of the celebration in
Shelbyville. They had set aside a room for 450 people which
ended up overflowing and had to be moved into an arena, and we
had over 1,100 people in attendance. And I don't think in 5
years I have ever had that many people turn out for a town
hall, so it is important that we talk a little bit about it.
What is your current opinion about the state of the walking
horse industry; is it improving and does it have a right to
exist in its current form?
Mr. Shea. It certainly has a right to exist in its current
form. And we certainly believe that the industry can exist
without soring. And, indeed, despite the understandable
controversy at the celebration, nearly nine out of ten horses
passed inspection. So it is, indeed, possible to train a horse,
to compete in the celebration and other Tennessee walking horse
shows without soring. So we believe that certainly the industry
is in better shape than it was many years ago when soring was
openly blatant. That is not the case now, I don't think.
Mr. DesJarlais. Okay. And I was just looking at some
numbers and there were VMOs and DQPs at 39 shows through the
first 8 months of the year. And over 4,300 horses were
inspected and there was a turndown rate of about one percent.
So I would say that is pretty good, wouldn't you?
Mr. Shea. I am not sure that I can concur with those
statistics. I believe that the disqualification rate was
somewhat higher than that. But it is----
Mr. DesJarlais. With the celebration, I agree. The
celebration is kind the Super Bowl of horse shows. So it is
kind of in the NFL--they play all the games all year long to
get to the Super Bowl so people can come and watch the best
athletes, if you will. But at the celebration this year there
was about 1,200 horses inspected--or 2,000 horses. No, 1,200
entries and there was about a ten percent turndown rate.
How can you explain one percent through 8 months of August,
same horses, same inspectors, same BMOs, and then they get to
the big Super Bowl of shows and it jumps tenfold?
Mr. Shea. There are any number of reasons why it can
increase.
For one, scarring and soring can take place throughout the
entire year. And by the time the horses get to the celebration,
the soring and the scar caused by the soring is more apparent
and easier to see, is one thing.
Second, because the stakes are so high at the celebration,
our experience is that, perhaps, owners and trainers are more
willing to try to get a sored horse through inspection than
they might at a lower stake show.
Mr. DesJarlais. It seems like they would know that there
would be more people watching there, so I don't necessarily
agree with that. Do you think that a biopsy is an appropriate
objective form of testing for scarring? Let's say a horse gets
turned down for scarring and a biopsy is performed and it shows
no scaring, would that be insignificant to you?
Mr. Shea. Well, certainly, if a biopsy were to prove that,
it would be something we should look at.
Mr. DesJarlais. Okay. Is thermography capable of detecting
scarring?
Mr. Shea. Thermography does not detect a scar, but it
indicates where a scar may be.
Mr. DesJarlais. Okay. Now, like if there were 200 horses,
or whatever I said, turned down, 126 were turned down, how many
of these are followed up on an issued citations? The whole
Horse Protection Act is to get rid of bad actors, and I think
it should be and I think that is great. How many are followed
up on and issued citations?
Mr. Shea. We either issue a citation or issue a warning
letter to all of them. But because there are so many, we simply
can't follow through and file a Federal case against literally
each and every one.
Mr. DesJarlais. Okay. I thank you for your time. Mine has
expired, but I hope we can visit some more about this later.
Mr. Shea. I would be happy to.
The Chairman. The gentleman's time has expired.
Mr. Abraham, for 4 minutes.
Mr. Abraham. Thank you, Mr. Chairman. And I thank the panel
for being here. I actually think you men and women are an
integral part of our national security because food safety is
utmost on all of our minds, and certainly a place where our
enemies could do us harm if they so choose. So thanks for doing
a good job on that.
I will address my question to you, Secretary Almanza. I am
both a veterinarian and a human physician, so the use, or lack
of use, of antibiotics in our food chain is somewhat important
to me, and I will hit it from two questions real quickly.
On the veterinary side, I understand the withdrawal times,
but the use or the lack of use of antibiotics in the feedlots
in our poultry farms, have there been studies or what's the
discussion on y'alls level as to animal welfare and mortality
morbidity as far as use and lack of use of antibiotics and
that? And on the human side, you mention in your opening
statement several food pathogens: E. coli, Salmonella,
Listeria, and Campylobacter. Those we know about.
Any studies or discussions, again, at your level, as far as
whether antibiotic use or lack of use does promote resistance?
Mr. Almanza. That is primarily at FDA, what I would say is
in their bailiwick for setting standards. I will tell you that
we are very active in testing for residues. If we have
veterinarians in each of our slaughter plants, in addition to
food inspectors as well, but at any time if we see any
injection sites, anything that appears to be abnormal, we
certainly test those animals to see whether they have any
residues, that they haven't met any withdrawal times and things
of that nature.
Now, we also work very closely with FDA and with CDC, as
well, to look at the prevalence of these types of issues and
concerns certainly in the biosecurity arena as well.
Mr. Abraham. Thank you, Mr. Chairman. I yield back.
The Chairman. The gentleman yields back.
Mrs. Walorski, for 4 minutes.
Mrs. Walorski. Administrator Shea, I am thrilled that you
are here. I have additional questions about the avian flu.
I appreciate your answers to Mr. Kelly. I just have a
couple of additional questions on that. For example, so in
Indiana, obviously, we are in the Midwest. We had a brief
skirting of this with only 77 birds destroyed. But certainly in
my district, in northern Indiana, where we have a large amount
of poultry providers and egg production, I have worried
constituents. And what you were talking about just a second ago
with biosecurity, depopulating very, very rapidly and things
like that, in some cases it took 2 weeks to put down all those
birds. And we were embroiled in that conversation about this
question. Then what? What are they going to do with all these
birds and how are they going to disintegrate them or what is
going to happen? You are alluding to all of that.
So when you looked at these states that were wiped out, did
you look at states like Indiana as well that had these
skirmishes, and when you are looking at setting policy are you
going to include states like Indiana, these professional
growers as well, since we have already dealt with that. There
is a lot of stress in my district about what happens in spring
with these migratory populations. Can you speak to that?
Mr. Shea. Sure. I think that every state is pretty much in
the same boat. As was mentioned earlier, we are all in this
together, and every state needs to have pretty much the same
approach to it, no matter what kind of poultry you have or how
large a poultry industry it is. We are all in this thing
together. So we definitely have looked at how it can work in
every state.
One of the things we did to plan for the fall was ask every
state to tell us the state of their readiness for an outbreak
in the fall, and each one did that. And many are in very good
shape, others learned through this survey that we sent them
that they need to do more.
Certainly, Indiana has a very vigorous and robust animal
health operation with Dr. Marsh for many years.
Mrs. Walorski. Absolutely. He did an incredible job, by the
way.
Mr. Shea. And so I am pretty confident that Indiana will be
prepared better than maybe even some other states would be
should there be an outbreak.
Mrs. Walorski. I appreciate that, and I agree.
Do you feel APHIS has the authority to do what it needs or
do you feel Congress needs to make legislative changes?
Mr. Shea. I think we have the authority we need. And also
kind of getting back to something that was mentioned earlier,
much of the regulatory action that takes place in a program
like this is really under state power. The state imposes the
quarantine, the state actually issues depopulation orders. So
we have to work hand in hand with states on these programs.
Mrs. Walorski. I appreciate it. I appreciate your efforts
as well.
I yield back, Mr. Chairman.
The Chairman. The gentlelady yields back.
Mrs. Hartzler, for 4 minutes.
Mrs. Hartzler. Thank you, Mr. Chairman. Thank you,
everyone.
I wanted to reference some of the other questions on
catfish, Deputy Under Secretary, in that this species has been
successfully inspected for years through the FDA, correct?
There has been no major human health risk, isn't that right?
Mr. Almanza. Not that I am aware of.
Mrs. Hartzler. Right. And are you aware that moving forward
with this rule is jeopardizing the TPP as it relates to Vietnam
and that they believe that it violates the WTO agreements and
it opens up all the rest of the agricultural products in
America to retaliation?
Mr. Almanza. I have certainly read that. But as a regulator
at FSIS, I am basically about food safety, and I can't pay
attention to that rhetoric.
Mrs. Hartzler. Sure. How much money has the agency spent
already on trying to implement this rule?
Mr. Almanza. Well, implement is probably a little over the
top because basically what we have done is we have tried to set
up what catfish inspection would look like. I could get you an
exact number so that you can have that, but we can provide that
to you.
Mrs. Hartzler. Sure. I have heard already we have spent $20
million. And I don't know if that is the case or not, but we
have invested already and it is not even set up. And we have
another agency that we are spending hard-earned tax dollars on
that is already doing it successfully.
Mr. Almanza. Well, one of the things I will say is that it
is different in that the way FSIS inspects, we are there every
single day, FDA isn't. They may get there once every year or
every 3 years.
So having a robust inspection system of every single
catfish that is slaughtered--if you want to call it
slaughtered--and having direct oversight over that every single
day is significantly different than just having somebody come
audit your plant.
Mrs. Hartzler. Sure. And it is going to cause a lot
additional cost without necessarily a need there.
But anyway, I want to move on, but thank you for that.
Administrator Mitchell, I want to thank you for being so
prompt in replying to a letter that I wrote to you about some
concerns with the livestock marketing facilities in my district
as relates to the auditing process.
And I was really thrilled and I know all of my livestock
markets at home are very appreciative of getting the
information back to them now in a timely manner after an audit
so there is some closure. So I just wanted to thank you for
that.
And just generally in reference, though, can you give me a
little more background about the way that GIPSA strategically
decides who to audit and when?
Mr. Mitchell. Well, most of our work is done by our
resident agents. Many years ago, we reduced the number of our
offices from 13 down to three. So a lot of our agents are in a
locale. They will have an entire state, they may have part of a
state, or they may have several states. They do ride a circuit.
It is not etched in stone on what year or what month they are
going there, but they are on the ground. And they have to go on
some of the information that they may pick up at other sales or
from producers. And, of course, we have an 800 number hotline
that comes in for people to call in that might get someone
reviewed.
But it is fairly well at random. But when you have a
facility that hasn't been reviewed in many years, they probably
will be coming up for review very soon. We take it very
seriously. We want to make sure that they are in business. Our
livestock barns, they are rural for the most part, they are
certainly local, they are small businesses, and they are just
absolutely vital to ensuring that we do have price discovery
within the market.
So, I don't have a formula for you on exactly when it is
going to come up, but it has a lot to do with those folks that
are on the ground out there.
Mrs. Hartzler. Thank you. My time has expired.
The Chairman. The gentlelady's time has expired.
Mr. Rouzer, for 4 minutes.
Mr. Rouzer. Thank you, Mr. Chairman. I appreciate each of
you coming before the Committee today.
Mr. Shea, I have been advised there is a pretty serious
shortage of FMD vaccine needed to manage an FMD outbreak. Can
you share with us what the Administration's plan is for that?
Mr. Shea. Well, indeed, there is not a huge vaccine bank
for foot-and-mouth disease. But I want to emphasize that our
first reaction, God forbid we ever did have a foot-and-mouth
disease outbreak in this country, would not be to vaccinate. We
would immediately try to stamp that disease out through
depopulation and movement restrictions because we don't want to
move immediately to a vaccination program because that could
lead to export restrictions. And we want to eradicate the
disease, not live with it through vaccine.
We are looking at all the options for vaccine. I think it
was alluded to earlier, our colleagues in the Agricultural
Research Service have been working on a leaderless vaccine
which has great promise. So we are, indeed, looking at other
possibilities.
Mr. Rouzer. Given all that, do you have any idea what type
of cost estimate if we are going to try to tackle this from all
quarters, what type of cost estimate we would be looking at for
a vaccine?
Mr. Shea. I hesitate to say what that cost may be until we
can see how this leaderless vaccine works out. Traditional FMD
vaccine currently used around the world is very, very
expensive, certainly.
Mr. Rouzer. I have heard some reports that should we pursue
that route, the industry might be required to help cover the
cost of it. Has there been any discussion of that or any
insights you can share on that front?
Mr. Shea. We haven't made any kinds of policy decisions
like that. We have had some very generalized discussions with
industry about the vaccine issue. We certainly agree with them
that we would be better off to have a good supply of effective
vaccine for foot-and-mouth disease, but we haven't really
gotten to any kind of details how to pay for these very high
numbers that would be involved.
Mr. Rouzer. Thank you very much. Mr. Almanza or Almanza,
which do you prefer?
Mr. Almanza. Al is fine with me.
Mr. Rouzer. Well, I get asked all the time, do I like
Rouzer or Rouzer and I say Rouzer so----
I have a question for you. What sorts of tools and
assistance can FSIS provide to assist smaller producers or
facilities? What is the best way for those businesses who are
looking for answers to get those answers?
Mr. Almanza. We have an extensive outreach program for
small and very small plants. And at the beginning, I kind of
covered our food safety app that we developed, that Food Keeper
app. We think that that is really helpful for not only small
and very small plants, but it is just general outreach that we
did with Cornell.
But we have a USDA small plant help desk that fields calls.
Last year, we had over 1,400 inquiries. We had 1,400 inquiries
just through the third quarter of this fiscal year. And then we
also have a small and very small plant web page that received
close to 12,000 views through the third quarter of 2015.
So we tend to do a lot of outreach to small and very small
plants because they don't have the resources available to them
to get those kind of answers.
Mr. Rouzer. And real quickly, I understand you all are
updating the way you carry out inspections. If you want to talk
about that for a second and any updates on any proposals to
modernize hog slaughter?
Mr. Almanza. Yes. So the whole modernization effort, I
spoke to that about what we did with our new poultry inspection
system. Right now we are gathering data and analyzing that data
in the five plants that we currently have under the HIMP
project in swine plants. What we are looking to do is develop
enough of the data, analyze it, and have a proposed rule to
implement that, or just to have a proposed rule by the end of
the year.
Mr. Rouzer. Thank you, Mr. Chairman. My time has expired.
The Chairman. The gentleman's time has expired.
Let me follow up. I think all the Members have talked.
Mr. Shea, can you talk to us a little bit about if we had
an FMD outbreak in Texas and it migrated into the feral hog
population, one, is that likely or not, but if it did happen,
how do we control that?
Mr. Shea. Well, certainly, we would hope that wouldn't
happen and we would find it quickly.
The Chairman. I mean, that is the problem I am dealing with
as we look at this issue with Argentina and South America, is
that this is a high stakes deal. If it were just animals that
were under pen and you knew where they were and could handle
them, that would be one thing. Mr. Avalos has a great program
going, but we create more feral hogs every day than we are
killing, so what would happen to us?
Mr. Shea. Well, certainly, if we started seeing foot-and-
mouth disease circulating in feral swine, that might be the
point where vaccination is going to have to become the next
tool. Because, obviously, we can't capture and depopulate all
the feral swine. There are at least five million in the United
States now and \1/2\ of them are in Texas.
The Chairman. Ms. Fudge, did you want to ask questions of
this panel.
Ms. Fudge. No.
The Chairman. Gentleman and ladies, thank you very much for
being here this afternoon. We appreciate it. This was very
educational. Again, as for the other panels, we really
appreciate what you do day in and day out. Your team goes to
work every day to work on your issues and to make sure that the
American consumer has the, when we talk about the cheapest,
most abundant, and safest, you are on the safe side for the
most part, and we appreciate everything that you do to make
that prediction fulfilled every single day, so thank you very
much.
If you wouldn't mind transitioning down to 1306, we will
let the Members swing by and say a quick word to you
individually if they want to, while we transition to our third
panel. But again, thank you very much for your testimony today
we appreciate it.
We will take a break for about 3 or 4 minutes.
[Recess.]
The Chairman. I would like to welcome our third panel to
the witness table today. We are joined by the Honorable Kevin
Concannon, who is the Under Secretary for Food, Nutrition, and
Consumer Services at USDA. He is accompanied by Ms. Audrey
Rowe, Administrator, Food and Nutrition Service; and Ms. Angie
Tagtow, who is the Executive Director, Center for Nutrition
Policy and Promotion.
Ms. Rowe, did I get your name right?
Ms. Rowe. Yes, sir.
The Chairman. Terrific. I made it through that one. Mr.
Concannon, you have the microphone for 5 minutes.
STATEMENT OF HON. KEVIN CONCANNON, UNDER
SECRETARY, FOOD, NUTRITION, AND CONSUMER SERVICES, U.S.
DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY
AUDREY ROWE, ADMINISTRATOR, FOOD AND NUTRITION SERVICE, USDA;
AND ANGELA TAGTOW, M.S., R.D., L.D., EXECUTIVE DIRECTOR, CENTER
FOR
NUTRITION POLICY AND PROMOTION, USDA
Mr. Concannon. Thank you, Mr. Chairman. Since time is
short, I will highlight a few key points, but I ask the
Committee to review my full written statement.
As the economic recovery continues to strengthen, we remain
acutely conscious of the impact of nutrition programs in the
lives of Americans and supporting institutions, such as
schools, volunteer organizations, and the health care system.
The program works through partnerships in communities
across the country with national standards for eligibility and
benefits, but considerable state and local flexibility, a
combination that is critical to success. These successes also
reflect a partnership between Congress and Administrations of
both parties that we must continue.
President Nixon established the Food Nutrition Service.
Senators Dole and McGovern, with others on both parties, fought
for food stamps and WIC in the 1970s. And Members of this
Committee from both parties championed the Agricultural Act of
2014.
When I travel, I visit not just government offices, but
schools, food banks, WIC clinics, and employment programs to
see firsthand how services are delivered and who receives them.
The Committee's informative and useful hearings on SNAP,
chaired by Congresswoman Walorski, have affirmed, through the
testimony of most witnesses, the program's value in the lives
of Americans aligning with the positive impacts I see on the
ground. Let me briefly outline a few.
As SNAP provides needed food assistance, it lifts millions
of people out of poverty and lessens poverty's impact on food
insecurity effects supported by research. And while SNAP has
not solved food insecurity, it has contributed to its decline
between 2011 and 2014.
SNAP also supports work. I rely on my experience as a State
Commissioner overseeing food stamps and other safety net
programs in three states, but the statistics confirm it too.
Today, 31 percent of households, including 42 percent of
recipients, have earnings--a major shift from 20 years ago.
SNAP requires able-bodied adults to register for work,
deducts part of their earned income to incentivize work and
lessens the benefit cliff and helps recipients get jobs. We all
agree that meaningful work is the right way to reduce demand on
nutrition assistance, and strengthening this part of SNAP is a
priority.
Our new Office of Employment and Training is reenergizing
SNAP E&T to help recipients get good-paying jobs. We promote
fuller E&T efforts in meetings with states, urging engagement
with organizations such as Goodwill, food banks, and job
centers. And the farm bill E&T pilots will help us define and
scale up the most effective strategies.
Nutrition is the link between agriculture and health, and
USDA Foods, formerly called USDA Commodities, support both good
diets and our nation's farmers, who have reduced sodium, fat,
and added sugars in the products we buy, increase the variety
of fruits and vegetables available.
Though I am pleased by these results, I know we can do
more. We have refocused SNAP on evidence-based nutrition and
healthy weight strategies, including farm bill authorized
efforts to expand and test incentives to encourage healthier
food choices.
We have brought more farmers' markets into SNAP--a win-win
for farmers and SNAP recipients. As of July, more than 6,400
farmers' markets and farmers are SNAP authorized--a seven-fold
increase since 2008. The farm bill authorized pilots to use
USDA food funds flexibly to enhance schools' ability to buy
locally.
Our Center for Nutrition Policy and Promotion choose
MyPlate Resources are widely used by dietitians and recognized
by American consumers. The center develops the USDA food plans,
tracks the nutrient content of U.S. food supply, and produces
the annual Cost of Raising a Child report.
We are working with the Department of Health and Human
Services on the next addition of the Dietary Guidelines for
Americans, which will remain within our mandate to quote
``provide nutrition and dietary information and guidelines
based on the preponderance of the scientific and medical
knowledge.'' In the future, the 2020 Guidelines will include
guidance for infants, babies, and women who are pregnant or
breastfeeding.
Public trust demands our ongoing commitment to improve
integrity. We must also stop the unfortunate misinformation
that these programs are rife with abuse. This too undermines
public trust and does nothing to help Americans. SNAP's 2014
payment accuracy rate is one of the best in the government, but
any improper payment is too much so we must continue to
improve. Trafficking the sale of benefits for cash has been
reduced from four percent down to 1.3 percent. Again, we are
not satisfied. We continue to push states on that issue.
We recently reorganized and created a retail operations
division that focuses on high risk areas around the country
while enhancing customer service. Last year, we permanently
disqualified 1,400 stores or storeowners, the most ever in 1
year. New rules will stiffen penalties on those who try to
exploit the program. But most people follow the rules. We work
closely with our state partners to fight recipient fraud.
Let me turn briefly to disaster nutrition assistance, not
one of our larger functions, but a critical one, especially
these days. I received a report yesterday on the fires out
West. Over the past month, we have been very much involved
helping people out in the CNMI, Congressman Sablan's area,
where, again, they were affected by a terrible set of storms.
So it is important to know that we have that capacity as well.
While I have discussed the major farm bill authorized
programs, my written statement includes results and priorities
for nutrition programs authorized through other laws. I thank
you for your time and attention and the opportunity to appear
before you today.
[The prepared statement of Mr. Concannon follows:]
Prepared Statement of Hon. Kevin Concannon, Under Secretary, Food,
Nutrition, and Consumer Services, U.S. Department of Agriculture,
Washington, D.C.
Thank you, Mr. Chairman, and Members of the Committee, for the
opportunity to update you on the work of the U.S. Department of
Agriculture's (USDA) Food, Nutrition, and Consumer Services (FNCS)
mission area, and to highlight our current priorities. I am joined
today by Audrey Rowe, Administrator of the Food and Nutrition Service
(FNS), and Angie Tagtow, Executive Director of the Center for Nutrition
Policy and Promotion (CNPP), the two agencies within our mission area.
The programs administered by FNS touch one in four people in this
country over the course of a year, improving food security and diet
quality for children and low-income people throughout the United
States, while CNPP reaches Americans of all income levels with
information to help them improve their health and well-being.
While FNS' nutrition assistance programs have helped millions of
Americans meet their nutritional needs during tough economic times, I'm
pleased to join you at a time when the economy is recovering to the
benefit of more and more Americans. The official unemployment rate has
been below six percent since last September. It also appears that the
economic improvement has started to yield decreases in participation in
the Supplemental Nutrition Assistance Program (SNAP) from the levels we
saw as a result of the recession. SNAP continues to respond to changes
in the economy precisely as it was designed to do. There are currently
about 1.3 million fewer participants in SNAP than there were 2 years
ago and the reductions in participation are geographically dispersed.
As of May, SNAP participation was lower in more than \3/4\ of the
states and Territories that operate the program as compared to 1 year
earlier, and the downward trend in participation is expected to
continue, with more than 1.9 million fewer people receiving SNAP in
2016 than in 2013. While the recovery has not yet reached every
American, there are encouraging signs.
We are making good progress on the economic front. But despite the
many people who have benefited from the recovery, there remain millions
of American families in need. The nutrition assistance programs remain
vitally important to help these struggling families put food on the
table.
We have a great responsibility to continue our bipartisan work to
ensure the safety net programs remain an important part of our
country's social compact to serve those who need it. President Richard
Nixon convened the 1969 White House Conference on Hunger and
established the Food and Nutrition Service at USDA. Senators Bob Dole
and George McGovern, along with others from both parties, fought for
the expansion of the Food Stamp Program and Special Supplemental
Nutrition Program for Women, Infants and Children (WIC) in the 1970's.
The commitment to these programs has endured and grown under
bipartisan leadership from both ends of Pennsylvania Avenue, as was
evident in the passage of the Agricultural Act of 2014 (farm bill)
thanks to the efforts of former Chairman Lucas and Ranking Member
Peterson. I want to thank you, Chairman Conaway and Ranking Member
Peterson, as well as the other Members of the Committee, for carrying
on that legacy of bipartisanship. I am proud of the accomplishments
shared by the Administration and Congress related to the nutrition
assistance programs.
I have watched with interest the series of hearings that the full
Committee and Chairwoman Walorski of the Nutrition Subcommittee have
convened to review the operations and impact of SNAP. These have been
informative and useful hearings, and have underscored the evidence base
underlying SNAP and other nutrition assistance programs. It is also
important to pause and examine the accomplishments of the nutrition
assistance programs in offering critical support to those in need. Let
me review a few key points in this regard. Research on the long-term
impacts of the introduction of SNAP (formerly the Food Stamp Program)
showed that young children who had access to the program when it was
first rolled out county-by-county saw long-term health benefits. They
were less likely to suffer from high blood pressure, heart disease,
obesity, and diabetes, and the study also found that SNAP participation
increased educational attainment, employment, and earnings.
We know that SNAP, in addition to helping millions of low-income
Americans put food on the table, more than \1/2\ of whom are children,
the elderly, or individuals with disabilities, also lifts millions of
people out of poverty. The Census Bureau indicates that SNAP lifted
over five million Americans--including nearly 2.2 million children--out
of poverty in 2013. The Supplemental Poverty Measure, based on
recommendations from the National Academy of Sciences, shows that SNAP
reduced child poverty by three percentage points in 2012--the largest
child poverty impact of any safety net program other than refundable
tax credits. We also know that SNAP effectively mitigates the effect of
poverty on food insecurity. A recent USDA study found that
participating in SNAP for 6 months is associated with a significant
decrease in food insecurity. The temporary increase in SNAP benefits
provided in the Recovery Act resulted in a sharp decline in the number
of households experiencing very low food security (meaning that one or
more household members had to skip meals or otherwise reduce their food
as a result of insufficient resources).
We also know that SNAP supports work. Today, \1/2\ of SNAP
households with children have earnings. This includes 42 percent of
female-headed, single-parent households, and 70 percent of married-
couple households participating in SNAP. This reflects a dramatic
transformation over the past 20 years. As you are aware, SNAP requires
able-bodied adults to register for work, allows a deduction for earned
income to incentivize work, reduces benefits gradually as income
increases to avoid a ``benefit cliff,'' and provides employment and
training services to help participants prepare for and get jobs.
Though the results are impressive, we all know there is more to be
done to make these programs even more effective. We are working
vigorously on a number of fronts, and I look forward to continue to
work with you and the Committee toward our mutual goals. Let me briefly
review some of our most
In SNAP, we continue to work with states to implement
evidence-based approaches to nutrition education and prevention
of obesity to support and facilitate healthy eating choices
among SNAP participants. For example, the farm bill provided
$100 million for us to work with retailers, including farmers'
markets, on incentives to encourage healthier food choices and
increase access to fruits and vegetables. We are also
developing new standards for retailers to stock a wider array
of healthful offerings, as required by the farm bill.
We are expanding SNAP participants' access to farmers'
markets to improve access to fresh and nutritious food. This is
a priority not only of mine, but also of the Secretary. This is
a win-win for farmers who experience an increase in customers,
and for SNAP clients who have better access to healthy food. In
2008, there were only 753 SNAP-authorized farmers' markets and
direct-marketing farmers. I am happy to report that as of July
2015, there were more than 6,400 SNAP-authorized farmers'
markets and farmers. That is over a 750 percent increase.
The farm bill authorized us to provide SNAP Employment and
Training Pilot grants to ten states to demonstrate and evaluate
new and innovative ways to help SNAP participants prepare for
and get meaningful work, and help them move toward self-
sufficiency. The ten pilots, selected in March 2015, are now
underway, and Secretary Vilsack and FNS have made it a priority
to assist all states in making more effective use of regular
SNAP Employment and Training funding that is available.
In our food distribution programs, we are enhancing services
to participants in a variety of ways. We implemented a farm
bill-authorized pilot that is allowing schools in eight states
to flexibly use their USDA Foods entitlement to buy unprocessed
fruits and vegetables for school meals, and to make those
purchases locally if they choose. We are providing ground
bison, a healthful traditional food, for the first time in a
number of years for use in the Food Distribution Program on
Indian Reservations (FDPIR). We transitioned the Commodity
Supplemental Food Program (CSFP) to an elderly-only program, as
required by the farm bill, and expanded it to an additional
seven states with funding provided by Congress in the Fiscal
Year 2015 appropriations bill, allowing over 600,000 low-income
senior citizens to be served nationwide. And so far this year,
we've purchased over $160 million in additional USDA Foods for
bonus distribution through The Emergency Food Assistance
Program (TEFAP), including apples, fruit juice, cranberries,
cherries, carrots, chicken, and lamb, which are then
distributed to families in need through food banks and local
organizations.
CNPP is working with the Department of Health and Human
Services on the next scientific update to the Dietary
Guidelines for Americans (DGA), which provide science-based
recommendations to help prevent disease and promote health for
people aged 2 years and older. As we develop the 2015 DGA for
release at the end of this calendar year, we will examine all
recommendations and public comments. The 2015 DGA will be
developed within the scope of our statutory mandate to provide
``nutrition and dietary information and guidelines . . . based
on the preponderance of the scientific and medical knowledge.''
CNPP is working on a number of other initiatives. We are
beginning to build the framework for gathering evidence to
support dietary guidance for birth to 24 months of age and
women who are pregnant or breastfeeding. By 2020, we expect to
be able to provide dietary guidance for every American. Our
SuperTracker online diet and physical activity assessment tool
has over 5.6 million registered users. Our other healthy eating
tools, such as MyPlate, are used by parents, educators, and all
Americans to improve their diets and their health.
And although it falls under the jurisdiction of your
colleagues on the Education and the Workforce Committee,
Members of this Committee may also be interested to know that
FNS continues to make progress working together with states and
local school districts to implement the Healthy, Hungry-Free
Kids Act (HHFKA), ensuring our nation's children receive
nutritious meals at school and during the summer months when
school is out.
I am pleased with the coordination we have had with you, Mr.
Chairman, and Members of this Committee in enacting and implementing
the farm bill, which preserved the fundamental structure of nutrition
assistance while also making needed improvements. As you know, prompt
and robust implementation of the farm bill is a top Departmental
priority. Most provisions of Title IV that impact SNAP eligibility and
benefits were implemented in the first few months after enactment. We
are working energetically, and as quickly as possible, to codify these
provisions in our regulations, some of which we completed just this
month, and to implement a number of other Title IV provisions, many of
which impact our partners in the retail food industry.
I remain committed to integrate science and evidence-based
improvements into all of the programs for which I am responsible. Like
many of you, I am not a scientist. That is why we work with
organizations like the National Academy of Medicine (formerly the
Institute of Medicine) and our colleges and universities, who provide
us the evidence and analysis we need to make sound policy.
I am further committed to making continued improvements in the
integrity of these programs--one of my, and the Department's, most
important responsibilities, and one I know we share. As I have
testified previously, Americans expect and deserve a government that
ensures that the significant public investment in nutrition assistance
is managed wisely. We must continue to earn and maintain the public's
trust through the proper administration of these programs--for a lack
of public confidence could threaten the programs' very survival. We
must also debunk the myths about SNAP and other nutrition assistance
programs--that they are rife with fraud, or that benefits are going to
people who are not eligible. These mischaracterizations of the programs
also undermine public trust.
Maintaining payment accuracy is a nationwide commitment between
USDA and our state partners and supports President Obama's Executive
Order to reduce improper payments. The Department uses a rigorous
quality control process to find payment errors in SNAP--which can
result from administrative mistakes or intentional violations--and
require states to recover over issued benefits and provide under issued
benefits. The SNAP national payment accuracy rate for Fiscal Year 2014
was 96.34 percent. Achieving high rates of payment accuracy is the
result of years of aggressive work and a nationwide commitment to
reduce improper payments and improve administration of SNAP. Since
2000, we have reduced the rate of improper payments by more than \1/2\,
and the SNAP error rate is among the lowest in the Federal Government.
That said, we are constantly working to do even better. That is the
kind of government the American taxpayer deserves.
With regard to trafficking--the sale of SNAP benefits for cash--we
are actively investigating and punishing this illegal activity. We use
data analytics to track retailers and participants who are potentially
defrauding the program. The penalties for trafficking are severe,
ranging from permanent program disqualification and monetary fines, to
criminal prosecution. Over the last 15 years, FNS has implemented
measures to reduce retailer trafficking dramatically, from an estimated
four percent down to about 1.3 percent currently. Rules now being
finalized at USDA will stiffen penalties so that fines are truly
reflective of the harm done--strengthening the disincentive for
retailers who may be thinking about trying to make a quick buck off the
program. This year, we are on track to increase penalties by 29 percent
for violations.
We are also working closely with our state partners to fight SNAP
participant fraud. Participants who commit fraud are subject to
disqualification and repayment of benefits. In Fiscal Year 2012, states
conducted nearly 730,000 investigations, disqualified over 42,000
individuals, and collected over $72 million in fraud claims from
households. And since 1992, the Federal Government has collected more
than $1.3 billion in delinquent SNAP participant claims. But there is
still more to do. Those seeking to commit crimes are always seeking new
opportunities, so we must continually adapt to these new challenges in
order to make sure that public investments are protected. This year,
our joint SNAP initiative with Inspector General Fong's team is drawing
on our respective offices and the strengths and responsibilities of
Federal, state, and local law enforcement partners to identify and
prosecute SNAP fraud, and also to prevent it in the first place.
The President's budget builds on existing efforts and provides
strategic increases, including funds to strengthen Federal training,
oversight, and monitoring of state quality control processes and data,
to ensure that states are meeting the highest standards in program
administration and payment accuracy. We will continue to confront error
and abuse head-on to make sure that benefits go to those who truly need
them.
While I have focused my remarks on SNAP and the other nutrition
assistance programs authorized under the farm bill, such as TEFAP,
FDPIR, and CSFP, a number of our other major programs are authorized
under other laws, under the jurisdiction of the Education and the
Workforce Committee. I would like to mention them briefly here, since
they make up such a large part of the work we do in FNCS. The Child
Nutrition Programs, including school meals, child care and after school
meals and snacks, and summer meals, give children the nutrition they
need to develop and grow and become future leaders of this country. In
school, students across the country are experiencing a healthier school
environment with balanced meals that reflect nutrition recommendations
by pediatricians and other child nutrition experts. The latest data
shows that today, over 95 percent of school districts have been
certified as meeting the new standards. And the average number of
students eating a school breakfast each day has increased by almost 28
percent since 2008, meaning more children are ready each day to learn.
WIC is one of the nation's premier public health nutrition
programs. WIC leads to better pregnancy outcomes--fewer infant deaths,
fewer premature births, and increased birth weights--and saves money.
Every dollar spent on prenatal WIC participation for low-income women
on Medicaid saves as much as three times that in health care costs
within the first sixty days after birth. And a study by the Centers for
Disease Control and Prevention found that rates of obesity among low-
income U.S. preschool children have stabilized or improved in a number
of states, suggesting that recent changes to the WIC food packages may
have contributed to this positive trend.
Thank you again for the opportunity to appear before you today. I
look forward to answering any questions you may have.
The Chairman. Thank you, Mr. Concannon. I appreciate your
being here today.
Ms. Tagtow, your agency has done the Dietary Guidelines
work for 2015. We will have the Secretaries up next month. But
I would like to visit with you about just the volume of work,
some 29,000 comments received this time versus 1,300 last time.
And we are told that some of these, or many of those, may have
been duplicative, form letters like the ones that Members of
Congress get.
Can you walk us through those numbers? How many discrete
comments did you get? And did your team, as well as the team at
HHS, go through them in appropriate detail to be reflected in
the final output?
Ms. Tagtow. Absolutely. Thank you, Chairman Conaway, for
the question.
As a registered dietitian in public health nutrition, it is
absolutely thrilling to see the level of interest in the
Dietary Guidelines, and really an unprecedented time for the
Dietary Guidelines.
Just to reflect on the opportunities for public comment,
during the 19 months in deliberation of the Dietary Guideline
Advisory Committee, the public did have opportunity to provide
response to the scientific committee during their
deliberations. And then once the Dietary Guidelines Advisory
Committee submitted their report, their set of recommendations
to both departments, USDA and HHS, earlier this year, there was
a subsequent public comment period of an additional 75 days.
As a result of that, we had just over 29,000 comments
submitted in response to the Dietary Guidelines Advisory
Committee Scientific Report. And, yes, you are correct, a
majority of them, at least 70 to 75 percent of those public
comments, were duplicative in nature. They were either form
letters or in the ways of a petition and things.
When we received those public comments through the
www.dietaryguidelines.gov website, there was a thorough review
by both agencies and a reposting of those public comments. So
all of the public comments that were submitted are available at
www.dietaryguidelines.gov. Very few of them were not posted due
to inappropriate language and things like that.
Both agencies are in the process of thoroughly reviewing
all of the public comments and taking those into consideration
while developing the 2015 Dietary Guidelines for Americans. And
just to emphasize the role of science in this process, Mr.
Chairman, we, of course, are very interested in those public
comments that are supported by scientific justification, and so
those are very helpful in moving forward with our process at
hand. Thank you.
The Chairman. Thank you.
Ms. Rowe, would you discuss with us about the IG's recent
report about the need for FNS to strengthen SNAP management
controls and the recommendations that were in that report.
Where might we see you guys going with those recommendations
should we have this hearing this time next year?
Ms. Rowe. I would be happy to answer the question, Mr.
Chairman.
We have reviewed all of the OIG's recommendations. There
are some that we are still talking to OIG about because as we
approach and look at those recommendations we have some
disagreement on the findings.
What we are moving forward to do is look very seriously at
how states make a determination as to whether an error is, in
fact, an error and not an error and what we need to do about
that, whether it is something that the OIG has recommended,
should there be a Federal review process rather than a state
review process, should we have a two-tier process. So there are
several issues that we are looking at, and we will have the
final agreement on that report in the next 2 weeks.
The Chairman. I look forward to improvements for next year.
As a CPA, we typically give those kind of reports to our
clients when we do internal control reviews. I think it would
be important for the taxpayers to be able to see, even if you
disagree, that there is a rationale for doing it and just don't
ignore the report, but actually adopt those that need to be
adopted and then take the other actions as you and your team
agrees.
With that, Ms. Fudge, for 4 minutes.
Ms. Fudge. Thank you very much, Mr. Chairman. And thank you
all for being here today.
Secretary Concannon, what is your opinion about the use of
categorical eligibility and direct certification as options to
increase efficiency and to streamline the application process
for SNAP? And further, just as a point of clarification, just
because someone is eligible, is categorically eligible, does
not necessarily mean that they receive SNAP, is that accurate?
Mr. Concannon. That is correct on both fronts, particularly
that last one. Let me mention that 42 states avail themselves
of categorical eligibility status. It simplifies the process
for states and reduces the number of errors.
The principal benefit to consumers, as well as to state
agencies, is states have the option of disregarding the assets.
The household must still meet the income test, but their assets
are set aside. And the underlying rationale for that was,
particularly during the recession, to not force families to
exhaust their household resources while they might be
unemployed or going through a difficult period.
But I also should point out that historically--and I
reflect on this in my own time as a state director--the area of
eligibility determination most fraught with errors or mistakes
is when state staff try to assess the value of certain assets.
So it has actually contributed to the reduction in payment
error rates as a result, but its ultimately benefit is it does
simplify the process, it gives us better assurance of, in fact,
the eligibility of the person, and it is an option that states
have under law.
Ms. Fudge. Thank you very much.
Administrator Rowe, the Congressional Budget Office has
forecast a leveling off of SNAP enrollment and a decline of
recipients. Can you just elaborate a bit on that and tell me
what you foresee over the next 5 years?
Ms. Rowe. Thank you for the question, Congresswoman.
Yes, we do continue to see and anticipate a continued
decline. We have seen somewhat of a decline right now as the
economy has improved. We are seeing fewer people coming in to
apply, but we are also seeing a reduction of those who are
currently on the rolls. It is our anticipation that as the
economy continues to improve, we will continue to see a
reduction of participation in the SNAP program.
But also as we get our employment and training programs
into full gear, identifying job opportunities for individuals
to move from the SNAP program into full employment. So we
continue to anticipate a decline in the overall enrollment in
the SNAP program.
Ms. Fudge. Thank you.
Under Secretary, I want you to reiterate. I know you said
it just briefly in your comments, and I know it is in your
written testimony. But I certainly hear an awful lot about we
are spending more money and the numbers are not going down and
they are never going to go down. I hear things about waste,
fraud, and abuse. I want you to address it again for this
Committee the small amount of waste, fraud, and abuse in this
program, as well as the fact that the numbers actually are
going down.
Mr. Concannon. To the first question, the numbers are down
by two million people from what I call a high water mark. They
have gone down at the rate of about a million a year. I think
most forecasts we predicted continued to be reduced. And I
believe the latest forecast that I have seen shows by 2020 it
would be in the high 39+ million individuals across the
country.
On the question of the program integrity, meaning, one, are
people who apply for the program, in fact, who they say they
are and is their income properly reported, are they receiving
the proper benefit, we have one of the lowest rates of payment
error rates in the Federal Government.
And on the question of fraud, the most serious abuse of the
program in my view is trafficking the sale of benefits. We are
very focused on that. That is 1.3 percent of the benefits. So a
small percentage. But, in fact, when you apply that 1.3
percent, it is a large amount of money. So I don't minimize it
in any way. I am very focused on it.
Ms. Rowe and her staff are very much focused on it. And we
have been using and increasing not just the undercover people
across the country, but data analytics where we look at the
transaction amounts and the time of day and where the consumer
lives versus the store. And as I mentioned, last year we took
out 1,400 stores permanently. Those owners are out for a
lifetime, a number of them have been prosecuted, but even if
they weren't prosecuted they are out of the program for a
lifetime.
Ms. Fudge. Thank you very, very much.
I yield back, Mr. Chairman.
The Chairman. The gentlelady yields back.
Mr. Crawford, for 4 minutes.
Mr. Crawford. Thank you, Mr. Chairman.
Thank you, Mr. Secretary and Administrators for being here.
Ms. Rowe, my district is home to a large swath of the Delta
region. And while the Delta is heavily agricultural,
paradoxically we have some pretty serious issues as it relates
to the low-income population and their access to healthy
nutritious foods. I am proud of some of the work we have done
on the farm bill that targeted this problem, such as expanding
the Farmers' Market Promotion Program, but I want to get a
sense as to what your agency does specifically to improve
access to nutritious foods in hard hit rural areas like the
Delta, and how do you approach the unique challenges that rural
areas like the Delta present that are much different from the
challenges faced in heavily populated areas?
Ms. Rowe. Thank you for the question.
We have worked very closely with the state agency within
the Department of Human Services within the State of
Mississippi or in the Delta areas. We have worked with
community-based organizations and others that create more
access points that get more information out to individuals on
what programs that are available and how they can access those
programs.
There have been a number of grant programs, some recently
that we will be announcing in the next few weeks which will be
focusing on farmers' markets and SNAP participation. We have
worked with Rural Development in rural housing developments to
expand, for example, access to summer feeding opportunities. We
have worked with schools to expand information and access to
not only feeding opportunities or where they can go and have
access to programs, but also healthy eating, healthy
lifestyles, healthy nutrition.
We have worked with farmers and we have expanded our work
with farmers. Our regional office recently held meetings in the
Delta area with a number of farmers to talk about opportunities
for them to work with schools to sell new produce and make
produce available to children in our schools.
Mr. Crawford. Thank you. One quick question.
SNAP is a state-administered program but has heavy Federal
oversight in how states operate their programs. Can you talk
about your relationship with the states, and you mentioned that
a little bit in your previous answer, but how that plays out
during various times of the year? And how do you resolve
differences in state plans or thoughts about what is within the
scope of SNAP?
Ms. Rowe. Through our regional offices, we work very
closely with our states in planning their SNAP program and
reviewing their SNAP program and providing technical
assistance. It is a collaborative, cooperative working
relationship. We try and make sure that as the state is
developing its plans, that we are sharing with them best
practices that may exist in other states that could improve
both the administration of the program and access to the
program.
We continue to provide working sessions. We bring all of
the state SNAP directors and others together to do technical
assistance and to provide technical support. We do webinars.
Our view is to work cooperatively with the state to ensure that
we are reaching the largest population increasing
participation.
Mr. Crawford. Do you keep a pretty open mind with respect
to ideas that emanate from the states on how they can more
efficiently administer programs?
Ms. Rowe. Absolutely. The state understands their
environment, what it takes in that state to make it work
effectively, and we are always open to working with states in
trying to achieve those objectives.
Mr. Crawford. Just real quick, can you give me an example
of one state that may have jumped out and done something that
was maybe a little bit unconventional but that you guys have
decided was a good idea?
Mr. Concannon. If I might jump in on that, we promote
something with state agencies across the country that we refer
to as business process reengineering, BPR, where we help pay
for that--small consulting groups that come in and try to
simplify the process so that they will actually put on a board
literally every step of the way when a consumer comes in the
front door. And the idea behind it is to cut down on some of
the bureaucratic steps that are involved.
We have a program or a budget item that has been
authorized, and relatively small by national standards, but it
is referred to as a state exchange. When a state runs into a
problem and we are aware of a state, let's say Colorado or a
state up in the Northeast, we can either bring the staff from
the state agency in that state to Mississippi or to a state
that is struggling with it, or conversely put people on a plane
from that state and bring them up and say this is how it is
done.
The state exchange is one of the most powerful tools that
we have. And states I know appreciate that because often state
budgets don't allow people to travel. They may just have a
broad prohibition against travel out of state. And we think it
is important for them to see this is how it is done
effectively.
Mr. Crawford. BPR?
Mr. Concannon. Business process reengineering.
Mr. Crawford. I yield back.
The Chairman. The gentleman's time has expired.
Mr. McGovern, for 4 minutes.
Mr. McGovern. Thank you very much.
Let me begin by expressing my gratitude to all of you for
what you do and for the millions of people in this country who
benefit from the work that you and your agencies do. The
programs that you oversee represent the best of this country.
And I think that one of the things that was said, you made this
point that the number of people on the SNAP rolls is
decreasing, but the reality is that there are still a lot of
people on SNAP. And a lot of people on SNAP are working people
because, quite frankly, they are working and they don't earn a
decent wage so they still qualify for government assistance.
But there is a lot of talk in this Committee and in
Congress about the need for more flexibility when it comes to
SNAP. And I always worry that flexibility is a code word for
block grants. That would be a terrible mistake and would lead
to increasing hunger in this country.
We already have a case study of what block granting SNAP
looks like. It is in the Northern Mariana Islands. When
Congressman Sablan was a Member of this Committee, he
passionately advocated for full SNAP for all of his
constituents. And right now we are seeing the shortcomings of
block grants. The islands were devastated by a recent typhoon
and thousands of residents are in need of food assistance. But
with a fixed pot of money, the SNAP block grants simply can't
keep up with the demand.
So can you talk a little bit about what we are learning
from the situation in the Northern Mariana Islands right now,
and what are the limitations of a block grant in cases of
natural disasters or other emergency situations, and is this
really the kind of flexibility that we ought to be expanding?
Let me just say one final thing. If I have one critique of
the program, it is that the benefit is not adequate to meet a
family's needs. When I go to food banks at the end of each
month, a lot of the people that are in line are families who
are on SNAP because their benefit has run out. Granted, the
mood in this Congress is not going to expand SNAP. I wish it
would. But we have to understand that this benefit is not
adequate to meet the nutrition needs of a family. I yield to
you on that and on the issue of block granting.
Mr. Concannon. Let me say I agree with you. I think in the
food banks, the food pantries, that testimony may have come
before the Subcommittee, but food banks across the country,
food pantries, my wife volunteers at one at a church here in
the District, toward the end of the month the numbers who come
in for those suppers go way up because people, whether they are
working or on fixed incomes, they run out of money. So that is
a fact of life that we are very mindful of.
On the question of block grants, to me, the most powerful
evidence about the inadequacy of it at times of real change in
the American economy, is what has occurred in the TANF or cash
assistance program. For many years, I was a State Health and
Human Services Commissioner. For most of those years when it
was either called food stamps or later called the SNAP program,
in the early years of SNAP about 30 percent of the households
who were receiving food stamp benefits were also receiving cash
assistance through the TANF program.
Now we have on the current SNAP caseload, the percentage of
households receiving cash benefits is in the single digit. It
is six or seven percent. Even though we have just gone through
from 2008 to 2010 or 2011, you pick your years, the deepest
recession since the Great Depression of the last century, and
that is what accounts for the fact that even though Congress in
2008 changed the name of the food stamp program to the
Supplemental Nutrition Assistance Program purposefully to say
it should supplement, it should not be the only source of
benefit, some 22 percent of the households now on SNAP have no
other source of income whatsoever.
So I have a real worry about the inability of block grants
to respond to whether it is a natural disaster or a deep dive
in the economy.
The Chairman. The gentleman's time has expired.
Mr. Thompson, for 4 minutes.
Mr. Thompson. Mr. Chairman, thank you. Thanks to all of you
for your service.
Ms. Rowe, I wanted to continue to talk about SNAP. As we
all know, it is a federally-funded state administered program,
meaning the states are responsible for administering, being the
boots on the ground basically of the SNAP program. They are the
ones down on the ground making the program happen with FNS
providing guidance and support.
So my question I have, first one, in your budget request
for Fiscal Year 2016 there was a request for 373 employees just
for SNAP at the Federal level, in addition to overall nutrition
program administration staff of nearly 1,000 employees. Now,
the request is more than double the employees from 2013 when
the program peaked at 47.6 million. As we just heard,
thankfully, the need is coming down. So we should meet that
need, no doubt about it, but it is good though when we see that
need come down.
And I know within testimony I hear a lot about technology
and the recognition that we use technology for efficiency, we
need to apply what I consider originated manufacturing, the
whole lean approach to greater outcomes, greater productivity,
with fewer resources. But this represents more than double the
employees from 2013 when the program peaked the demand for it.
Back then, there were only 170 employees. Why the significant
increase of needed employees for SNAP?
Ms. Rowe. Most of that increase has been in our program
integrity area. As the Under Secretary mentioned, we have
organized and centralized our retail operations division so
that we can be more effective and more efficient. Training of
staff, individuals who can go out and we actually do undercover
buys. We engage in review of lots more documents. We have
expanded the number of documents that storeowners have to
provide, particularly those that we identify that may be in
high trafficking areas.
So to be able to make sure that we are achieving the goals
that we have set, we have set specific goals within our various
program areas that we intend to achieve. We need the staff to
make sure that we are properly implementing these programs and
addressing the taxpayers' issues of trafficking or fraud in our
program.
Mr. Concannon. Why don't I jump in on that as well. A
significant increase as well is the focus on employment and
training. As was mentioned earlier, during the downturn in the
recession, 40+ states were granted waivers around employment
and training. In addition to what the farm bill or the
Agricultural Act of 2014 provided to us, when I go out or when
we go out to meet with states we urge them to do more on the
employment and training side.
And they get two categories of grants from us. They get 100
percent Federal funding, about $90 million nationally, and then
they get several hundred million more. But that several hundred
million more that is matched with state funds goes to roughly
10 or 11 states.
There are a handful of states that are very active in
employment and training. The other states are not on the
playing field so to speak. And so we have been very focused on
urging those other states to say, look, there are opportunities
in your state to help people. I am very mindful--it has come to
my attention in a number of ways over the last year--we have
people who have come out of the correctional system. And
because they are not bondable or because they committed a
felony maybe when they were 19 years of age they have trouble
getting into the workforce.
And so we have said to state agencies, you should use some
of that employment and training money for folks who are in the
SNAP program to say, what else can we do to help you with truck
driver training or training in the food industry? Help them
actually get into the economy in a constructive way.
Mr. Thompson. I see my time has expired, but I certainly
agree. I think anything that we can do to take these supports
and make it a workforce development program that is a
springboard toward greater opportunity for people.
Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired.
Mr. Scott, for 4 minutes.
Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. I
apologize for being late. I had a general in my office from my
Air Force base.
I want to follow up on what you just mentioned, only
because I have a situation back home I am working right now. A
gentleman that was arrested when he was younger. He works full
time now, he makes around $12 an hour, his wife doesn't make
quite that much, but they would normally qualify for food
stamps. But because of his criminal record, even though he is a
deacon in the church now and has no arrest or charges or
anything in the last probably 10 years, is being told that he
is not eligible, is that for the duration of his life that he
would be prohibited from receiving the benefit?
Mr. Concannon. I am familiar with the prohibition. And,
unfortunately, that goes back to a law that was passed way back
by Congress that said if you have a felony drug arrest you are
not eligible for the, what was then the food stamp, now SNAP
program, unless your state legislature takes an affirmative
vote to overcome that.
Now, 23 states across the country, the legislature, for
example, Maryland near here and the District of Columbia would
be two examples, they have taken votes to say, okay, you are
still eligible if you meet the other income eligibility
requirements.
But Virginia, next door to us, if you have that same
history, you are not eligible. So it depends. It is the state
legislature that could pass a law that says we will
affirmatively allow persons with prior felony drug arrests to
participate. The State of Texas, I am not familiar with the
details of it, but the legislature in Texas, just within the
last month, has taken steps to allow certain prior felons with
drug arrests----
Mr. Austin Scott of Georgia. If I may, I just kind of
wanted a yes or no, if I could, on that.
But I am from Georgia, and I will look into the state law
with regard to that. I assume that they could say if after 5
years you haven't had another arrest or something along those
lines then----
Mr. Concannon. The state legislature would have to approve
it, but they could do that.
Mr. Austin Scott of Georgia. So my state is one of ten who
received the SNAP pilot and just a couple quick questions on
that. How are you working with the states on that, and what is
your expectation, and when will we start to hear more about the
actual implementation, and are some states further along than
others. If you could just speak generally to that issue, I
would appreciate it.
Mr. Concannon. Yes, indeed. The pilots are, as Congress
directed us, are diverse in terms of they are from different
parts of the country. Some are work attachment right away. Some
are more fuller assessments. Some are mandatory. Some are
voluntarily. So there are a variety of strategies and
approaches. We have hired through competitive process the top
policy groups, research groups, in the country on outcomes,
because at the end of the day, all of us, you want to know, we
want to know, what works best. We are working with those states
right now as they are gearing up to get their program set up.
We expect by November, all ten of the projects will be
established, and they will, because it is a, it requires a
control group as well an experimental group. I mean, it is
going to be the strongest science, and the full-scale
implementation of it starts in the spring. We are very much in
dialogue and contact with the states.
Now, apart from the pilot projects, states like Georgia can
be doing even more in the traditional employment training
program, and that is where I urge them to say you can talk to,
like, Goodwill Industries. You can talk to Lutheran Services if
it is in your area. The food banks themselves are doing a lot
of training. I was at one in Albuquerque where they are
training people for long distance truck driving because there
is a shortage of truck drivers in that part of the country.
So you don't even have to wait for the full stepping on the
gas of those ten projects. You can do more, and we are more
than happy to work with states. We keep bringing this up to
them to say do more on the training E&T, or the employment and
training side.
Mr. Austin Scott of Georgia. Thank you all for your
service. I think the key is finding that balance and access and
integrity in this program as in any of the programs that we
have. And with that, Mr. Chairman, I will yield the remaining
46 seconds that I don't have.
The Chairman. The gentleman's time has already expired. Mr.
Yoho has graciously allowed Mrs. Walorski to go next, so Mrs.
Walorski is recognized for 4 minutes, Chairwoman of the
Subcommittee on Nutrition.
Mrs. Walorski. Thank you, Mr. Chairman. Thank you,
Representative Yoho. Administrator Rowe, I so much appreciate
all of you being here, and I am the Chairwoman of the
Subcommittee, and we have looked at past, present and future
when it comes to SNAP. We have talked about the economic ladder
and really assisting people climbing up into this economic
ladder, and we need to be clear, though, just one little item
of interest here. When we talk about SNAP, and we talk about
the decrease, we also have to remember that since 2009, or you
alluded to before, 2008, 2009 with the recession and the
stimulus policy changes, that is where the 81 percent increase
in SNAP came from.
So while we are looking at a decrease of single digits, we
are talking about an increase of 81 percent, and I just want to
make sure we are all talking about the same thing here. I
believe we can be good stewards of the American taxpayer money.
I really do. And we can assist people climbing up an economic
ladder. And with that, Administrator Rowe, I am concerned that
we are looking at 17 programs, 14 in one area, and the other in
the areas of aging, three other programs. What is the USDA
doing to address duplication and duplicative efforts on all
those programs together?
Ms. Rowe. Well, we spend a great deal of time at the
beginning of every fiscal year taking a look and strategically
planning what our priorities are going to be and how those
programs are going to work together, and whether we are going
to target certain programs in certain areas or how we are going
to increase participation in programs in certain states, as the
Under Secretary has talked about, the employment and training
initiative. So the way in which we manage is through a
strategic planning process. That process allows us to identify
our goals, our priorities, the tasks and steps that we need to
undertake to achieve those goals and priorities.
We have a major dashboard that is available in each one of
our priority areas that we report on every month, so we are
looking and we are constantly looking at how well we are
integrating the programs from one particular area with the
needs in another.
Mrs. Walorski. I have a further question there. So does FNS
look at data points? For example, we are looking at kind of
like a holistic look at people. Does FNS have the ability to
track well-being, economic security, as the recipients go
through the program, or are you just simply tracking numbers
served?
Ms. Rowe. We are talking both. We are tracking well-being.
Through much of the research in our operations and policy
division; we look at changes in behavior; we are looking at
increased access as well as nutrition changes in people's
behavior. So we look on both sides of the question, how well we
are administering the program, and is it making a difference?
Are we moving the dial as it relates to people's well-being?
Mrs. Walorski. Okay. I appreciate that. My final question
is this: We work with a lot of outside agencies as you do as
well with these international feeding programs like Feed the
Children. One of the things we had chatted with them about is
they were telling us about their outcome measures that they use
in every country around the world. My question is, the data
points that we just talked about, helps better discern what
approaches work and don't work. It certainly would help us in
Congress, as we have the role of oversight, in understanding
are people really making it, or are we just rolling numbers and
filling slots on those numbers. It gives us a better picture of
oversight. Does FNS have that similar kind of outcome measures,
and I guess if not, why not--and they are certainly a standard.
Ms. Rowe. As a matter of fact, I am very familiar with what
Feed the Children is doing. We have had earlier conversations
with them about how successful their approach has been. We do
have outcome measures. We continue to get better at defining
what we are looking for, what we want to measure, and what
outcomes we are looking at. We can provide you with an overview
of how we go about measuring that----
Mrs. Walorski. I appreciate that.
Ms. Rowe.--and looking at the outcomes in all of our
programs.
Mrs. Walorski. That would be great. Thanks. I yield back,
Mr. Chairman.
The Chairman. Mr. Yoho, 4 minutes.
Mr. Yoho. Thank you, Mr. Chairman. And, panel, I appreciate
you being here. You took my question. That was great. You did.
You got me the answer I was looking for about the 81 percent
increase and the slow dropdown. What do you think accounts for
that? Is it the quality of jobs out in the marketplace that
people just aren't getting enough high paying jobs? I know
everybody wants to raise the minimum wage, but in some
industries, you can't raise the minimum wage to that level to
get them off of this. We need quality jobs to come back here,
and that addresses the bigger picture about Tax Codes and
things like that, incentives for manufacturers to come back.
Mr. Concannon. Just the increase, which was significant,
about \2/3\, the way we generally characterize it, \2/3\ of it
was directly attributable to what was going on in the economy;
and about \1/3\ of it was associated with states simplifying
the process, places like California, where if you move from one
county to another, you had to reapply all over again. It was
like moving from one state to another. So we got rid of some of
those barriers in that regard. That accounts for about \1/3\.
Two-thirds are really, to your point and your question,
associated with the jobs.
I mentioned that in my testimony, that, again, my own
experience that for all those years, we have a 50 percent
increase right now, from 20+ percent of the households in the
food stamp era that had earnings, to now over 30 percent that
involves over 42 percent of the recipients. So we have a much
higher rate of people with earnings. You say how can this be,
then, that we still have them on the program? It is that they
are either part-time jobs, or they are in the lowest quartile.
They are very poorly paid.
And it is a challenge. That is part of our effort in
employment and training to say what can we do to help position
people so they can move up in the workforce? I remember this
from my state days, the old dictum that he or she who has a job
is more likely to be the person to get a job. So how can we
help people move up?
Mr. Yoho. I think that is one of the big concerns, and one
of our goals is to get people in, up and out. Secretary
Concannon, you had talked about the waste, fraud, and abuse was
mainly in the trafficking of EBT cards, if I understood you
correctly?
Mr. Concannon. It is partly, it is multiple use of EBT
cards. And mainly what I was talking about was trafficking,
that is when I sell my card.
Mr. Yoho. I bring this up because we had USAID in here, and
they were talking about the 2.5 million Syrian refugees getting
EBT cards. Through USAID, they said that right here.
Mr. Concannon. They might through USAID. They can't get EBT
cards.
Mr. Yoho. I would like to talk to you about that, but the
point is, they said what they were doing was biometrics where
they had a picture ID on there and some other form of
biometrics, and it really cut that down as far as the illegal
use of them. In this country, I asked him if he could elaborate
if that would be a good thing here. Would that prevent the
trafficking of cards, if there was a picture ID on them or
somebody had to show a picture ID to use those or it was tied
to some kind of----
Mr. Concannon. Unfortunately it wouldn't, because it takes
two to tango, as I described it; and these are fraudulent store
owners who then would, they are indifferent to whether your
picture is on the card. They know perfectly well if they are
trafficking in cards. They don't care who owned the card.
Mr. Yoho. I am glad to hear you say that when you catch
them, they are out permanently.
Mr. Concannon. For a lifetime.
Mr. Yoho. That is something that we need to advertise, and
I commend you for doing that. With that, Mr. Chairman, I yield
back. Thank you.
The Chairman. The gentleman yields back. Mr. Allen, for 4
minutes.
Mr. Allen. Thank you, Mr. Chairman, and thank you panel,
and just to elaborate on my fellow Georgian, Congressman
Scott's question, to make sure I understood this correctly, on
the E&T training, getting these people into the workforce,
because everywhere I go in my district, and I know we are
blessed in our district, but there are a lot of jobs available.
Of course, they require skills. As I understand it, you said
the states can ramp up this program on their own?
Mr. Concannon. Yes, they can. Again, there are two, this is
the traditional, what I call the core employment and training
program. States across the country receive $90 million and 100
percent state money. If I recall now, and I will have to
confirm this, but I believe the State of Georgia received about
$3 million, or $3.5 million, and 100 percent Federal money on
E&T. But then over and above that, they can go to Goodwill
Industries--I often point them in that direction--or Lutheran
Services, Catholic Charities, the agencies in the area, and to
the extent, it can't be--volunteer time can't be appropriated,
but if they have paid staff time that is being used to train
staff recipients, that--50 percent of that can be matched.
And I have seen examples of it. I mentioned the example in
the Albuquerque food bank that I was at probably 8 weeks ago,
where they are training long distance truck drivers because
that is the shortage in the State of New Mexico.
Mr. Allen. We have the same thing. The state administrators
have been made aware of the fact that they can ramp this thing
up.
Mr. Concannon. Every time I meet with them, I pitch that to
say there is an opportunity for you.
Mr. Allen. Good. Great. Ms. Tagtow, I guess this is for the
benefit of my wife, but she is a nutrition animal or whatever;
but she really knows a lot about it. She would love to advise
folks on what they buy in a grocery store. I think she would
volunteer her time to do that, to be honest with you, because
she is so adamant about what you eat is what you are. And she
sees a lot of abuse from the SNAP program as far as that is
concerned. Folks don't know exactly what to buy, and she just
thinks that with some advice, that they could not only get the
necessary food they need, but they could eat very nutritiously
which would then cut down on thing like Type 2 diabetes and
things like that which is an epidemic in Georgia. Any comments
on that?
Ms. Tagtow. I will start, and then I will refer it back to
the Under Secretary. Excellent question. One of the charges of
the Center for Nutrition Policy and Promotion, first and
foremost, is to promote the Dietary Guidelines for Americans.
And what we are seeing is that the average quality of diet, and
the Under Secretary's earlier remarks about the healthy eating
index, we actually measure the average diet quality of
Americans; and any guesses as to what our average intake index
is? It is 57 on a scale of 1 to 100.
Mr. Allen. How would you relate that into average calories
per day?
Ms. Tagtow. What I was going to say is, we know the
research does provide us with sufficient evidence that if we
can start shifting people to healthier diets, to a diet that is
more closely aligned to the Dietary Guidelines, we can
significantly reduce the relative risk of developing diet-
related chronic diseases in this country. So that is the answer
to the first question.
As far as educating and informing and better supporting
nutrition attitude, knowledge, and behavior of SNAP
participants, I am going to shift that over to the Under
Secretary.
Mr. Allen. I am out of time, so one of my colleagues may be
able to address that question as well. I yield back, Mr.
Chairman.
The Chairman. The gentleman yields. Mr. Kelly, for 4
minutes.
Mr. Kelly. Mr. Secretary, if you would address that
briefly, and then let me get to my questions, please.
Mr. Concannon. Thank you very much, both Members. We have a
major opportunity in that regard called SNAP Ed, or it is
nutrition education. To the Member's comments, we are in the
middle of a crisis in this country in terms of public health
with the problems of obesity; and it translates into work
opportunities, or a lack thereof, health care costs, quality of
life. So we are very focused on that, and we promote something
called MyPlate, not only in schools, but in food banks, in the
farmers' markets where we are encouraging them, but we have
also let, in the last year, a contract with the Duke University
and UNC Chapel Hill to use the research of behavioral
economists. We have a lot of nutritionists with us. We have
tremendous nutrition capacity and potency. We know a lot less
about what actually motivates somebody to reach for a certain
product in the store.
So we are very focused on saying what else can we learn
that actually influences people to more consistently buy
healthier foods? Some of it obviously relates to where you
live. I live in the D.C. area out in the Maryland suburbs where
there are a lot of supermarkets around me, but on the other
side of the Anacostia River here, there is probably one
supermarket. So where you live makes a difference, rural or
urban; but we need to do a better job, and we are focused on
trying to say what else can we do to educate people. And we are
hopeful that what we are doing in schools, and in Georgia by
the way--I was just in Savannah--is doing great work in the
schools to promote healthier eating. And my hope and
expectation is these school students as they grow up into
adulthood, will have been socialized to eat healthier, and that
is one of the best things we can do.
Mr. Kelly. Thank you, again, Mr. Chairman, and panel for
being here. My question is, I understand that it is just not--I
know there is a lot of fraud, or there is some fraud that goes
on. And like many things in life, the few punish not only the
end-user, but they punish your department, and they punish us
all because of what a few do. That being said, I understand
that. What initiatives are you doing or working with the states
to make sure that we reduce the amount of fraud and that we
continue to focus on that so that those few don't disparage all
of us by the way that they act?
Mr. Concannon. Exactly. I appreciate the question. As I
mentioned earlier, to me the most serious--first of all, states
and counties where they administer it, pay special attention on
the front end. So the USAID reference that was made here, that
just isn't the case. You have to be a U.S. citizen and you have
to prove it in a variety of ways. We don't have anything near
that in terms of fake people showing up and getting SNAP
benefits. My concern is on the other end. Once they get the
card, we have this 1.3 percent of trafficking. It takes as I
say, two to tango. These are stores, mostly small stores,
rarely, rarely a supermarket. These are small stores.
Thankfully in the farm bill that you passed, you gave us
more authority to increase the requirement on those small
stores in terms of their food variety, because I am hopeful
that it will result in fewer of those stores that have the ads
of liquor, cigarettes, and something else. That is where our
problems come in so many cases.
One, we are very focused on data analytics. We have
undercover people, but we catch most of those stores by looking
at redemption data electronically. We are much more astute that
way. We also have hired a consulting group, Accenture. We have
sent them around to states to say we took out these stores last
year. Now we want you to analyze the actual redemption data to
see what are some of the associations. One of the associations
we found, for example, in the first state we went to was
multiple cards. If I am in a household and I keep calling the
state saying I have lost my card, our alert goes up to say wait
a minute, what is going on here?
Another would be redemption amounts late at night in round
figures. I don't want to say too many of the variables and tip
people off, but there are ways to identify, we are redeploying,
as Audrey Rowe mentioned, redeploying our people into the high-
risk places in the country. As I mentioned, the chair picked up
as well, when you traffick, sell benefits, you as a store or a
store owner, you are out for a lifetime.
Mr. Kelly. Thank you, Mr. Chairman. I yield back the
balance of my time that I don't have.
The Chairman. The gentleman's time has expired. Mr.
Abraham, for 4 minutes.
Mr. Abraham. Thank you, Mr. Chairman. Let's continue, Under
Secretary, on this fraud issue because we all are in districts
that have more people on the program than I am sure they desire
or we desire, because of this poor economy that we have had for
the last few years is driving that. The 1.3 percentage, convert
that on the fraud issue. Convert that into dollar amounts for
me.
Mr. Concannon. That is 1.3 of about $75 billion, so it is
close to $1 billion a year.
Mr. Abraham. Wow. Walk me through on this exchange or this
fraud issue, if somebody obtained a card fraudulently, and they
take it to one of the stores that you just referenced, the
under-the-radar-type store, can they present that card and buy
something of low value and get the cash back? How does the
fraud issue, how do they take that card and fraudulently use
it?
Mr. Concannon. Typically what happens, we refer to it as
trafficking. In other words, let's say I had $100 benefit on
this card. I go to the store and either I tell the store owner
that I have $100 on this card. If you will give me $50 in cash,
I will give you my card, or you can run the card as though I
bought $100 in food here. That is referred to as trafficking.
That never literally does not happen \2/10\ of 1 percent times
in supermarkets. There is too much at risk. It happens in more
than 96 or 97 percent of the cases in small stores. It is a
minority of those small stores, but that is where we go after
them.
And I have been meeting with states to say we are taking
stores out, that I referenced it earlier, 1,400 stores
permanently out last year, over 10,000 stores in the last 10
years permanently out of the program. I have said to states,
when we take a store out, you need to go back through the
redemption history in that store for the previous 6 months.
Now, not everybody who redeemed benefits there is trafficking,
but you need to look at that in order to get the other side of
the equation here.
Mr. Abraham. Thank you. Let me switch gears just a little
bit. I will stay with you, Mr. Secretary, or anybody. I, in my
district, as I am sure everybody has these farmers' markets.
You guys have made it possible for them to benefit the SNAP
customer, but most of them are hooked up wireless. They are
paying a pretty good premium to play the game, so to speak. And
I know in the farm bill with the FINI there was money dedicated
to breach that technology gap. What is going on today? What are
you guys doing to facilitate that, make it better, make it so
these farmers' markets can work efficiently?
Mr. Concannon. We are very committed to that. I just met
with the National Association of Farmers Markets when I was
down in Savannah, Georgia here, just within the last week at
their national meeting. As I mentioned in my testimony, we are
up to 6,400 farmers' markets, direct marketing farmers. We
still have a ways to go. On record, there are like 8,300 or
8,400 farmers' markets across the country. We have been working
with them to keep up with technology. We provided the
technology devices to close to 2,000 of those markets, but
there is also, as you know, a monthly charge, processing fees.
So we are very much engaged with them to say are there less
expensive ways to meet that processing charge for the farmers'
markets, and we have simplified the application process for
them. When we first started here 6 years, 7 years ago, farmers'
markets had to fill in the same application as a supermarket;
and they are a lot less formal.
These are growers, farmers. They don't have the time for
that. We simplified that. So we are very committed to it
because it speaks to an earlier question. We believe farmers'
markets are a way to nudge people into healthier eating, but
also keeps those dollars in the local economy. That is
important to us.
Mr. Abraham. Thank you. I yield back, Mr. Chairman.
The Chairman. The gentleman's time has expired. Mrs.
Hartzler, for 4 minutes.
Mrs. Hartzler. Thank you, Mr. Chairman, as a former
nutrition teacher, I really appreciate the Dietary Guidelines
that you all come out with and have for years. It started off
as the basic four group. I am showing my age, basic four, and
then we went to the food pyramid, and now MyPlate; and so I am
interested, certainly, in seeing what you are going to come up
with here pretty soon for us moving forward.
I was concerned, though, with when the advisory committee
came out with their recommendations. I have a copy of that
report here. I can hardly pick it up; it is so heavy because it
is far larger than in the past. One of the main reasons for
that is that it seems like, to me, it goes far beyond just your
basic scientific nutrition recommendations of what should be in
the diet, and it is still called Dietary Guidelines.
So as you know, I authored and headed up a letter that 70
of my colleagues signed on to expressing our concerns with some
of these things that goes beyond such as including
sustainability recommendations and physical activity behavior
change, and food environment and environmental impact, and
making recommendations on what we eat based on environmental
impact and things rather than sound science and what really
should go into our bodies as far as nutrition.
And so I am looking forward to meeting with Secretary
Vilsack next month and visiting with him. I did appreciate his
letter back saying that he believes as far as what you are
going to come out with, it is going to stay and color within
the lines. So I appreciate that. I appreciate your being
responsive to our concerns.
But, Director Tagtow, I see that you are a dietitian, so
you seem like a perfect person to help lead this effort. I was
just wondering with these concerns, what steps will the USDA
take during the selection process of the next Dietary
Guidelines Advisory Committee member selection process to
ensure that the next advisory committee will stick to their
Congressional charter and focus solely on providing useful
health and nutritional information to all Americans?
Ms. Tagtow. Thank you, Congresswoman Hartzler. Excellent
questions. Thank you for your letter expressing your concerns
as well. I first want to make very clear that the Dietary
Guideline Advisory Committee is an independent entity overseen
by FACA, Federal Advisory Committee Act, and they provided
simply recommendations to both HHS and USDA. And we are taking
those recommendations into consideration along with the wide
array of public comments that we received, as well as agency
comments as well. And so looking forward, I don't want to
speculate as to the procedures for 2020; but, again, just
emphasizing that they provided a very independent, science-
based review of the evidence and provided recommendations back
to both agencies for consideration in developing the 2015
Dietary Guidelines.
Mrs. Hartzler. As it relates to the law that you referenced
which establishes the committee, do you see any need for ways
that we could help in changing the law to help it make sure
that the people on the advisory committee in the future give a
report that is just strictly dealing with nutrition?
Ms. Tagtow. I might defer that to the Under Secretary. As
far as changing the law, perhaps not. The use of a Federal
advisory committee is not determined by the law. The law
doesn't dictate that we actually use an independent body to
provide a thorough review of the scientific evidence and
provide recommendations back to both agencies. The law does
specifically state that what we develop, what the two agencies
put forth, is based on the preponderance of the current
scientific and medical knowledge. It is released within 5
years. It addresses food-based recommendations for ages 2 and
above, and we need to do it every 5 years.
Mrs. Hartzler. Thank you very much.
The Chairman. The gentlelady's time has expired, and I now
recognize the gentleman who I skipped twice rudely. I apologize
to you. You can ask for 5 minutes if you want it.
Mr. Ashford. Thank you, Mr. Chairman. I am speechless
actually. I just wanted to follow up on what Representative
Hartzler was talking about. If there is one issue I hear about
in Omaha from our schools, we have one entity that provides all
of the school meals for one public high school and all of the
parochial schools; and then we have a few others that provide
the meals to the other public schools, so it is not a massively
large group of providers.
And essentially, what the refrain is, and I am sorry if I
am repeating myself, or repeating what others have said, but
the refrain really is we are concerned that the young people
simply won't eat what we are giving them, and that is a real
concern, and this is given to me by people I know that have
been doing this for 25, 30 years. And nutrition is their
concern. They are nutritionists. They just want the kids to be
able to get a meal that they can eat or will eat. I am sure you
have answered this, but would you mind just, Under Secretary?
Mr. Concannon. I am happy to receive the question. As I
mentioned in my testimony, when I travel out to states, I
always try to go to a school. I just did down in Savannah
within the last 10 days. And I do so because it is the best
part of the job, but also to see how kids are doing and to talk
to teachers. There are real challenges in the meal pattern
because remember, it is the first time there are menu changes,
science-based, in more than almost 2 decades, so it represented
a big change; and I don't, in any way, underestimate the
challenge it is, and particularly so for children coming into
the school system, especially older kids. High school kids, in
the best of times, may be challenging around diet.
But we have been working consistently with schools to say
what else can we do to help you? Ninety-five percent of
American schools are meeting these new standards. We are not
satisfied with that in this sense. We know that it is a
challenge for school food service personnel, so we have a
number of programs. One we have something called Team Up, where
we worked with the University of Mississippi with their
resource staff, but we brought school systems together with
those schools that are successfully implementing, pair them up
with a similarly-sized school where they are struggling to say
this is what we are doing to make sure that the kids are
consuming those foods, because having a healthy menu is only
part of it. We want to make sure it is consumed.
The second area that we are working on is we have a group
up at Cornell University in New York, in Ithaca, that is
working on what they call the Healthy Lunchroom and where they
recommend to schools, they are in about 30,000 schools across
the U.S. It is free to the school or to the school system. They
have a whole set of ideas, low-cost ideas, that can result in
students more likely consuming the food. As an example, with
younger children, one of my favorite aspects, and I have seen
it all over the country, they add an adjective or a noun. So
they will say championship carrots, X-ray vision carrots. They
add words, and young kids see that and they think, man, this is
for me.
Mr. Ashford. That might help me to eat carrots, I don't
know.
Mr. Concannon. But the idea to use behavioral economics,
where they place the salad bar, or for high schools, how they
design the cafeteria to make it look more like a restaurant
that kids would look for.
Mr. Ashford. Thank you, and I would like to loop some of
our people into your team because to the points that have been
made, your point, these are very good people that are doing it;
they are nutritionists, they get it. I think they are more
concerned about the consumption part and the kids not having
enough.
Mr. Concannon. We will definitely follow-up with Omaha, you
mentioned.
Mr. Ashford. Definitely. The other point, and I made it to
the last panel, but just to focus on it again, our SNAP
authorized farmers, we have a lot of farmers in Nebraska still,
and our SNAP authorized farmer numbers have gone from 750 to
6,400 to do from farm to market. It is an exceptional program.
I have been listening today about the farm bill, and I wasn't
here obviously when it was passed; but it sounds like a
remarkable piece of work by this Committee and the Congress,
the Chairman and the Department to really do some amazing
things. The pilot projects, there are ten of them or 12 of
them.
Mr. Concannon. Yes. Farmers' markets. FINI grants, the
grants that are out there to really encourage more, to
facilitate more use of farmers' markets, doubling up bucks. I
was up in Rochester, New York, recently, and they have a
farmers' markets that has been around since 1904. It is a large
farmers' market, 300 stalls on a weekend; but they do almost
$900,000 a year in SNAP benefits there. I always look at the
price of the food----
Mr. Ashford. I am over my time, but I thank you for your
work, and obviously for this Committee in getting the farm bill
where it is, so thank you.
Mr. Concannon. It was a great bill.
The Chairman. The gentleman's time has expired. Mr. Davis,
for 4 minutes.
Mr. Davis. Thank you, Mr. Chairman. Sorry I am late. Just
arrived at the airport and had the chance to come down here and
get the tail end of the discussion on the school nutrition
program. This is an issue that Secretary Vilsack has sat in
your seat numerous times, and I have brought it up. I have some
concerns with the reauthorization process, with the sodium
level requirements, and with the sheer fact that many of my
constituents who attend school are not even a part of the
school nutrition program any longer because some of the rural
school districts in my district in central Illinois have pulled
out because what used to be a profitable part of their
portfolio is now costing them upwards, as in the case of
Monticello, Illinois, upwards of $100,000 a year because kids
that can pay are not eating food.
So it was interesting to hear you talk about the placements
of salad bars, other tips and procedures; but the sheer fact is
we have a lot more plate waste. You have less kids, in my
district--you may shake your head, but in my district, I am
hearing from superintendents that the plate waste is going up.
I am hearing that less kids are eating the school lunch, and
that there is a concern as we see new requirements go forth,
that we are going to see more school districts, especially in
areas like mine, pull out; and I don't want to see that. And
can you, and I don't mean to make you repeat yourself, but can
you let me know some tips of what we can do to help?
Mr. Concannon. Yes, indeed, and I appreciate the candor in
your question frankly. We are never happy to hear that schools
have dropped out of the program because it is, by intent, for
all American students, the numbers of noontime lunch
participants in the School Lunch Program went down by
1,300,000. It has stabilized now. At the same time it was going
down, the numbers of students participating in the National
Breakfast Program went from 10.3 million to 14 million. So we
are actually serving more meals to kids right now across the
United States. I recognize that some systems had challenges
with it, so that as I mentioned earlier, we have a great
partnership with the University of Mississippi.
Senator Cochran, championed the development of a center
down there that really matches schools across the country that
are struggling to say, okay, let us match you up with a school
that has similar demographics, because it probably is going to
be very useful to match the Dallas independent school district
with a rural school district in another state. We are more than
happy to provide that kind of technical assistance.
Actually I am confident that we are going to see additional
growth this year in the meals participation. The significant
reduction was lost mostly in that paid meal category, and part
of that was everybody I work with, every school nutritionist,
has said in their schools in the past, whenever they would
raise the price on the paid meal, they would lose
participation. And by the way, the National School Lunch Meals
Program was losing participation going back to 2008. So it
didn't just start with the new meals pattern.
Mr. Davis. Well, I can only address this as somebody who
has listened to many superintendents in my district and as a
parent who coaches football, and I have heard kids talk about
how they are hungry when they leave school and they are coming
to practice.
So I guess my request to you is the same request I offer to
Secretary Vilsack every time he is here. Come talk to my
district. Come talk to the folks who are telling me that this
is a problem in their school districts. Secretary Vilsack was
in Champaign, Illinois, just I believe last week; and that is
an area that is a center point of most of the concerns with my
superintendents. I wish we could have had a chance to get him
in front of those superintendents, and I would ask that you do
that for him at some point, and I would love to work with you
to make that happen.
Mr. Concannon. I will personally, or I will make sure our
Chicago office, but I will try to personally go up there to
meet with them as well.
Mr. Davis. I know my time has expired, but your Chicago
office and your regional office has participated in a round
table with me, but I want somebody from D.C. to come out and
hear from my constituents. So with that, thank you, Chairman.
My time is expired.
The Chairman. The gentleman's time has expired. Everybody's
talked. Thank you, Under Secretary and Ms. Rowe and Ms. Tagtow.
I appreciate it. I recognize it takes a significant amount of
time for you to be here. Just a couple of points. I am
encouraged greatly about your comments about data mining and
the emphasis there. I am familiar with a program that we have
at Charleston State University that does a great deal of data
mining, and just looking for out of ordinary conduct that
doesn't make any sense. So reliance on that will improve the
system as well.
A \1/10\ of a percent improvement in the error rate is $75
million, and so it is a meaningful number. You talked about one
of your training programs in which you had about $45 million
that you used to help training, a \1/10\ of percent improvement
in the error rate, so it is a big deal; and I know you have
committed to it and I appreciate that.
I want to offer up for the record my thanks to Secretary
Vilsack and his efforts at putting all this together the last 2
days. It didn't happen just by accident. The Under Secretaries
and Administrators and Chiefs across the system pitched in and
made this work. The staff sitting behind you and all the other
staff that were here all yesterday and today sitting behind
their bosses made that happen. My team is here as well, and I
want to make sure they know how much I appreciate them doing
all they did. This is a historic 2 days, quite frankly, to have
every one of those Department agencies come up here and pitch
their wares and make themselves available for criticism or
comments or bragging, or whatever it was, our team is better
educated today as a result of your efforts over the last few
days. We will figure out ways to maybe not necessarily do
everybody all in the 2 days, but nevertheless to replicate this
kind of process where Members, new and old, have a chance to
visit with Administrators and the leadership of these
organizations other than Secretary Vilsack.
I suspect he will appreciate sharing the Congressional load
of it as well. We are better off as a result of all of the
testimony from all of the program areas, and let me just
officially thank you so very, very much for making that happen,
and everybody behind you who really made it happen and all my
team who really, really made it happen, so thank you all very
much.
I also thank the membership. I did not anticipate the
participation we would have. I know it is a little thin right
now, but we have had great participation. Yesterday was a day
in which most folks would have been back home working the
district or mowing the lawn as Rodney was doing. So it is a
good exercise.
Under the rules of the Committee, today's hearing will
remain open for 10 calendar days to receive additional
material, supplementary written responses from witnesses to any
questions posed by a Member. This hearing on the Committee of
Agriculture is now adjourned. Thank you.
[Whereupon, at 2:43 p.m., the Committee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Questions
Response from Hon. Lisa Mensah, Under Secretary, Rural Development,
U.S. Department of Agriculture
Question Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative
in Congress from Arkansas
Question. There has been long standing bipartisan support for a
government role in expanding broadband services to rural America. Such
access is essential to educating our young and for participating in a
21st century economy, but I am concerned with the slow pace of progress
towards that goal. Last year, Congress authorized $690 million for the
Rural Utilities Service (RUS) to bring broadband services to rural
America, yet only about a third of that amount was loaned out. Despite
these shared goals, it is my understanding that RUS continues to place
unrealistic barriers before applicants--in some cases the barriers
erected seem to contradict both the law and your own regulations. For
example, I have heard from an Arkansas phone company, Walnut Hill,
which operates in one of the poorest rural areas of the country, the
Mississippi Delta. They tell me that RUS has indicated that it will not
refinance existing phone company debt even if it is needed in order for
a construction loan to move forward. Yet the law and your own
regulations indicate that such refinancing is permitted when it is
``incidental and necessary'' to furnishing broadband services. I would
appreciate your looking into this application and seeing if this can be
resolved.
Answer. RUS continues to support the mission of providing new and
improved telecommunications services in rural areas. In fiscal year
(FY) 2015, RUS obligated approximately \1/3\ of the $690 million in
funding appropriated for this purpose One reason for this low
obligation level is that there has been low, but steadily increasing,
demand for the RUS Broadband loans since 2011.
In meeting the mission of providing new and improved
telecommunications services in rural areas, RUS must ensure that loans
are being made in conformance with the statute and regulations. With
regard to the Walnut Hill example, the applicant requested funding to
support refinancing outstanding debt from another lender.
Under existing regulations and in accordance with statute, RUS may
consider refinancing outstanding loans, but only if those loans were
for something RUS could have originally financed such as construction
of telecommunications or broadband facilities. In this case, the debt
that they were asking RUS to refinance was originally held by the
parent company, Townes Telecommunications. RUS cannot refinance debt of
other entities. The application did not provide evidence that any of
this debt was associated with construction improvements at Walnut Hill.
As such the debt was ineligible for refinancing. RUS has continued to
express our willingness to consider a loan for system improvements,
subject to agreement by the other lender to share a lien with RUS for
loan security purposes.
Response from Hon. Edward M. Avalos, Under Secretary, Marketing and
Regulatory Programs, U.S. Department of Agriculture
Question Submitted by Hon. Bob Goodlatte, a Representative in Congress
from Virginia
Question. Avian Flu: I appreciate all the hard work your agency has
done with its HPAI emergency response. While I know there were some
hiccups in preparations, I know you've all worked hard to improve. What
lessons have you learned in this response that will assist us if we see
further outbreaks this fall? Are we prepared to deal with another large
outbreak of the magnitude that we saw last spring?
Answer.
Response from Anne L. Alonzo, J.D., Administrator, Agricultural
Marketing Service, U.S. Department of Agriculture
Question Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question. Administrator Anne Alonzo, I have heard from growers in
my district that there are inconsistencies with policies at the Tobacco
Administrative Grading Service (TAGS). Can you please provide an
analysis of how TAGS sets the price and details on how TAGS ensures
that USDA standards are being strictly applied?
Answer. Tobacco Administrative Grading Services (TAGS) is a private
entity created by the Burley Tobacco Growers Cooperative Association
and a third party consultant organization, AgWin, with input from
USDA's Risk Management Agency (RMA) and Agricultural Marketing Services
(AMS). TAGS provides administrative services by collecting and
notifying AMS electronically of producers' name, farm number, number of
bales, location, weight, grading confirmation number, and request of
scheduled date of grading service. AMS tobacco grades are used for
quality loss adjustment for the tobacco crop insurance program. TAGS
itself does not set prices for tobacco crop insurance, nor is it
involved in the process of making quality adjustments or payments to
the producers through the RMA crop insurance program. AMS does not have
an agreement with TAGS. The Agency has a business/billing agreement
with the Burley Tobacco Growers Cooperative Association. This is not
covered in the Tobacco Inspection Act.
AMS is solely responsible for grading tobacco, and these AMS
tobacco grades are the only grades that can be used for the crop
insurance program. AMS acts as an independent third-party. In doing so,
AMS uses USDA certified tobacco graders to ensure that tobacco
standards are applied properly, consistently, and in accordance with
USDA Official Grade Standards (published at 7 CFR Part 29). AMS has no
authority over the operations, policies, or pricing of TAGS itself, nor
does AMS have authority over RMA's crop insurance program, the
determination of quality loss adjustments, or payments made to tobacco
producers or their representatives. For its services, AMS charges user
fees based on the total volume of tobacco submitted. After grading the
tobacco, AMS provides the grades to RMA electronically who in turn
provides them to the crop insurance companies for their respective
policies.
AMS is committed to ensuring that tobacco grades are applied fairly
and uniformly across the program. Tobacco grading operations are
managed by AMS personnel without any input from outside entities. AMS
personnel utilize USDA grade standards to assess the quality of the
tobacco and provide supervision of the services requested. Random
samples are collected periodically and stored in a secured storage unit
at the AMS facility in Raleigh, North Carolina. These samples are
examined by AMS supervisors for accuracy, which contributes toward each
tobacco grader's performance appraisal. In addition, supervisors make
random visits to grading locations during heavy grading periods to
observe procedures, provide guidance, and ensure quality
determinations.
Response from Kevin Shea, Administrator, Animal and Plant Health
Inspection Service, U.S. Department of Agriculture
Questions Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question 1. Administrator Kevin Shea, the challenges that APHIS has
faced in controlling this devastating outbreak of High Pathogenic Avian
Influenza is alarming to our animal agriculture industry. Is APHIS
prepared to deal with an even more devastating outbreak of a disease
such as foot-and-mouth disease (FMD) that affects multiple species? Can
you assure this Committee that you have the resources and tools
necessary to control an outbreak of FMD?
Answer. Safeguarding against significant animal diseases, including
FMD, is vital to protecting industry, producers, and consumers. It
remains a top priority for APHIS and USDA, and we have rigorous
emergency procedures in place.
Our plan to protect the country starts with our existing regulatory
import controls that includes overlapping safeguards to reduce the risk
of the disease coming from imports of agricultural products to an
extremely low level. It includes extensive surveillance to detect any
presence of the disease, should it make its way to our shores, as well
as sanitary/phytosanitary requirements to which exports must adhere. If
disease is suspected, we investigate the case immediately.
In the extremely rare chance that FMD is confirmed, our first
priority would be to immediately contain and stamp out the disease
through depopulation and movement restrictions. We would work closely
with our state and industry partners to pool resources to expand our
ability to respond to and eradicate this disease.
In the event of an outbreak, USDA would be able to use its
emergency transfer authority under the Animal Health Protection Act to
obtain funding to combat the disease, just as it did with the outbreak
of HPAI.
Recently, APHIS has begun discussions with our partners about the
use of vaccines in an emergency FMD response. While the response to an
FMD detection would depend on several factors, vaccination is a key
tool to have available should FMD enter the country. Accordingly, we
maintain a supply of about 25 million doses of vaccine across multiple
strains in the North American Vaccine Bank. However, this amount of
vaccine on hand is not sufficient to respond to a large outbreak of the
disease, if we must make the policy decision to use vaccine. This would
limit the tools we have available to reduce disease spread.
Estimates of the amount of vaccine needed to address an outbreak of
FMD in the United States vary. APHIS has set a preliminary goal of
increasing to 35-40 million doses of vaccine across multiple strains.
APHIS' 2016 appropriations request included $1.2 million for the North
American Vaccine Bank. This amount is a continuation of baseline
funding and would maintain the vaccine bank at its current size.
Given the mismatch between estimates of vaccine need and what APHIS
currently has access to, the Agency has had discussions with industry
about how best to address the gaps in vaccine coverage. Those
discussions have included a range of alternatives, including Federal-
industry cost-sharing, to fund efforts to eliminate the shortage, and
those conversations with industry are ongoing. APHIS and industry
recognize the need for an increased vaccine stock, and we are committed
to working with our partners to identify solutions.
Question 2. Administrator Kevin Shea, this year, the appropriations
bill did not allot extra funding for the CARB (Combating Antibiotic
Resistant Bacteria) initiative. Can you clarify your plans in support
of the research portion of the CARB initiative? Are you anticipating
cuts to other programs to fund CARB?
Answer. Antimicrobial resistance (AMR) is considered a serious
health threat to both animals and humans. To address this threat the FY
2016 Budget for USDA included a total of $77 million (+$57 million), of
which $66 million (an increase of $47 million) is for the Research,
Education and Economics (REE) Mission Area and $10.7 million (+$10
million for surveillance) is for APHIS. The enacted FY 2016 Budget for
USDA is $25 million for REE for intramural and extramural research and
$730,000 for APHIS for surveillance.
USDA intends to continue to provide science-based, quantitative
information about antibiotic drug use and resistance in food animals
and their relationship to livestock management practices through
existing work and available funding. This funding severely restricts
our capability to implement initiatives described in the USDA
Antimicrobial Resistance (AMR) Action Plan and Combating Antibiotic
Resistant Bacteria (CARB) National Strategy. That plan may be found
here: http://www.usda.gov/documents/usda-antimicrobial-resistance-
action-plan.pdf.
USDA's AMR Action Plan takes a voluntary, comprehensive, systems
approach for surveillance, research, education, extension, and
outreach. This approach would include the development of partnerships
with stakeholders and work through the existing programs and mission of
APHIS (as well our sister agencies at USDA).
USDA, along with FDA, has continued to gather input from
stakeholders to further refine plans for on-farm antibiotic use data
collection contained in the AMR Action plan. Although no additional
funding was provided in FY 2016, USDA has again requested additional
funding for FY 2017 to conduct this voluntary on-farm monitoring of
antibiotic-use practices and antibiotic resistance.
USDA will also solicit applications for competitive extramural
funding to support research, education, and extension/outreach through
the Antimicrobial Resistance Initiative program in FY 2016. This will
continue to add to the portfolio of the AMR program that began in FY
2012. Funded scientists are generating and will continue to obtain
science-based data, knowledge, and information to be used by relevant
stakeholders to inform policy and other decision-making activities
related to antibiotic stewardship and across the food chain.
Response from Alfred V. Almanza, Deputy Under Secretary, Food Safety,
U.S. Department of Agriculture
Question Submitted by Hon. David Rouzer, a Representative in Congress
from North Carolina
Question. Deputy Under Secretary Alfred Almanza, Congressman Lucas
and I sent you a letter earlier this year regarding several U.S.
processing plants and storage facilities that were barred from
exporting pork to China last summer. Can you please update us on FSIS
requirements for exports to China and is China still barring any U.S.
facilities that have been approved by the guidelines of the Ractopamine
Residue Program or the Never Fed Beta-Agonist Program?
Answer. The Food Safety and Inspection Service (FSIS) is working
with China to get the fifteen establishments delisted by China
reinstated as soon as possible, and is engaged in a thorough review of
the circumstances that led to the establishments being suspended.
FSIS has emphasized to Chinese health officials that all raw U.S.
pork products exported to China are produced either under the Never Fed
Beta Agonist Program or a Ractopamine Free Residue Program. Both of
these programs are administered by the United States Department of
Agriculture's Agricultural Marketing Service, and any company seeking
to export to China must participate in one of these two programs before
FSIS will certify these products. The companies have taken corrective
actions that FSIS has verified, and FSIS has requested that the
establishments be allowed to resume exporting to China.
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