[Senate Hearing 115-261]
[From the U.S. Government Publishing Office]






 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2018

                              ----------                              
                              


                         TUESDAY, JUNE 13, 2017

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:32 a.m. in room SD-124, Dirksen 
Senate Office Building, Hon. John Hoeven (chairman) presiding.
    Present: Senators Hoeven, Cochran, Moran, Merkley, Tester, 
Udall, and Baldwin.

                       DEPARTMENT OF AGRICULTURE

STATEMENT OF HON. SONNY PERDUE, SECRETARY
ACCOMPANIED BY:
        DR. ROBERT JOHANSSON, CHIEF ECONOMIST
        MICHAEL YOUNG, BUDGET OFFICER


                Opening Statement of Senator John Hoeven


    Senator Hoeven. Good morning. We will call the hearing to 
order.
    The purpose of today's hearing is to discuss the Department 
of Agriculture's fiscal year 2018 budget request. And I want to 
thank our Secretary of Agriculture, Sonny Perdue, former 
Governor of Georgia, and a good friend. Thank you so much for 
being here and for your commitment to agriculture. We 
appreciate it.
    One of the things obviously that we are concerned about is 
the funding level in the budget. We are going to talk about 
that right up front. And I recognize you are not involved in 
the formulation of the Department's budget given the late 
timing of your confirmation, but we really want to talk about 
and clarify the Administration's support for rural America and 
for production agriculture.
    The reductions proposed in the President's budget directly 
impact small rural communities that many of us call home. 
Production agriculture is the cornerstone of local rural 
economies and weakening the farm safety net would leave farmers 
and ranchers vulnerable to low commodity prices and unforeseen 
weather conditions. We know we have low commodity prices right 
now, and unfortunately, it is looking like it could be a 
drought year as well. So that makes it a tough time in the farm 
patch and I know you are well aware of it.
    Cuts to Agriculture research undermine our country's 
ability to compete internationally and meet the demands of a 
growing global population. Agriculture remains one of America's 
net export industries due to open trade and we must continue to 
explore foreign markets access for producers. And that is a 
bright spot. We have a positive balance of trade in Agriculture 
and so those trade agreements are very, very important that 
they give our farmers an opportunity to export the great 
products that they produce.
    While I support many proposals included in the President's 
budget such as increased funding for our military and defense, 
the burden of balancing the Federal budget cannot be placed on 
the backs of farmers and our rural communities. Agriculture has 
already done its fair share by reducing spending in the current 
Farm Bill. When passed in 2014, the Farm Bill was calculated to 
save more than $23 billion. So that was the Congressional 
Budget Office (CBO) estimate. In actuality now scored over the 
next 10 years, the Farm Bill saves $104 billion.
    So clearly Agriculture is doing its part to help with the 
budget debt and deficit, but right now they are facing a tough 
time. And that is the whole idea behind the countercyclical 
safety net, behind crop insurance, is that when they need it, 
it is there for them.
    Eliminating key rural development programs as proposed in 
the budget would inhibit the smallest rural communities from 
upgrading aging infrastructure and growing small businesses. I 
also remain concerned about the proposed elimination of the 
position of Under Secretary for Rural Development. And I look 
forward to hearing further rationale for the Department's 
approach and how they are going to handle it and make sure that 
that commitment is there.
    We need to invest in the future of agriculture and rural 
America. And as chairman, I look forward to working with 
Ranking Member Merkley and other members of the committee to 
identify those priorities and make the most effective and 
efficient decisions on behalf of the America taxpayer.
    Again, I appreciate, Mr. Secretary, you coming here. I 
appreciate your commitment to agriculture. I know these are 
challenging issues. You and I have talked about them. I 
appreciate you coming in this morning so we could do that. But 
it is a tough time for our farmers and ranchers and we need to 
be there for them and I have every intention of doing that.
    Again, thanks for coming and I would turn to Senator 
Merkley for his comments.


               opening statement of senator jeff merkley


    Senator Merkley. Thank you very much, Mr. Chairman. It is a 
pleasure to be here with you at your first opportunity to chair 
this subcommittee of appropriations and I greatly enjoyed 
working with your predecessor, Senator Moran, who is here with 
us today and I know I will enjoy working with you as well.
    And Secretary Perdue, welcome to the hearing. 
Congratulations on your confirmation and welcome also to Mr. 
Young and Mr. Johansson.
    The President's budget proposal for the Department of 
Agriculture for fiscal year 2018 was developed prior to your 
confirmation, Mr. Secretary. And for the sake of today's 
hearing, that is probably a good thing because the budget comes 
across less as a make American agriculture great budget and 
more as a rural America and farmers last budget. Net spending 
for agriculture and rural development is cut by about $5 
billion or 26 percent. More than 20 research programs are 
eliminated and the rest are cut at a time when we desperately 
need innovation in agriculture.
    USDA's most important customer service agencies, 
specifically for farmers, are hit hard. The Farm Service Agency 
would lose almost 1,000 employees who help producers across 
America access USDA's Farm Loan Programs. The Natural Resources 
Conservation Service budget would cut funding for conservation 
by $100 million, resulting in thousands of fewer conservation 
plans which are a requirement for producers to enroll in USDA's 
conservation programs as well as to apply for crop insurance. 
You cannot have good customer service if you do not have 
customer service representatives.
    The proposals for nutrition programs, both domestic and 
international, are shortsighted and heartless. To propose the 
elimination of McGovern--Dole and Food for Peace Programs at a 
time when multiple famines are occurring and people are 
literally starving makes little sense from a standpoint of U.S. 
compassion or from a standpoint of American security.
    Rural Development, an agency that I know that is important 
to you, is gutted. More than 40 programs, including a number of 
vital housing loan and grant programs, the entire Rural 
Business Service, the entire Water and Waste Disposal program 
are eliminated. These are important programs that provide 
struggling rural communities with access to basic facilities 
and they are completely gone if this budget were enacted.
    I have noted before that although many of my colleagues on 
both sides of the aisle believe that a budget is dead on 
arrival almost regardless of the President that provides it, it 
is still a reflection of the President's priorities and it does 
not take long to determine that based on this budget, rural 
families and farming are not a priority for this President. The 
good news is that I know that rural families and farmers are a 
priority of yours, Secretary Perdue. And I am hopeful that you 
can do everything in your power to communicate to your boss 
what a budget would look like that would empower and support 
rural America.
    I look forward to working with you over the coming weeks 
and months as we write our bill and again, I appreciate you 
being here today.
    Senator Hoeven. Thank you, Senator Merkley.
    I would now turn to the other members of the committee for 
any opening statements they may have, starting with Senator 
Cochran.


               opening statement of senator thad cochran


    Senator Cochran. Mr. Chairman, I am pleased to join you in 
welcoming our witnesses today to talk about the budget request 
for the Department of Agriculture. This is a very important 
part of the appropriations process, to make available the funds 
for agriculture research, direct funds to help support 
producers, and so a lot of people are looking on with hope and 
despair, one end or the other.
    You know, somebody said as they walked by the farm field 
and the farmer was out there tending his garden or something, 
and they said, ``It sure is a pretty day and everything looks 
good.'' And he said, ``Yeah, but you know what? All this hot 
sun and rain, it really saps the soul.'' It is hard to please 
everybody.
    Senator Hoeven. It is.
    Senator Cochran. That is what that illustrates. But we are 
going to try to make as many happy and do the thoughtful 
process so that we do not have anybody that is left out that 
ought to be included. And we will be working toward that end.
    Senator Hoeven. Senator Tester.


                opening statement of senator jon tester


    Senator Tester. Thank you, Mr. Chairman.
    I want to thank you for your statement as well as the 
ranking member's statement. Governor, Secretary, good to have 
you here. I appreciate you being here today to talk about the 
budget.
    I think it is a bipartisan--maybe disgust is too big of a 
word--but disappointment with this budget. I am very concerned, 
being somebody from rural America, and quite frankly, you 
understand rural America, the impacts of this budget. The fact 
is that it came on prior to you being Secretary of Agriculture, 
but the real question here today is how the hell do we fix it, 
because it does not work.
    Right now farm income, because of prices being in the 
toilet, is down about half of what it was in record year 2013, 
a $62 billion drop. And as was pointed out by the chairman, and 
I believe the ranking member too, safety net programs are there 
for this exact reason. When times are not always good in 
Agriculture. We know that. And, quite frankly, when prices drop 
there needs to be a safety net to help manage risk.
    You were in Montana a few weeks ago. I appreciate you 
coming to our great state. You said something that was a little 
bit disturbing, and that is that you would not buy home 
insurance and hope that your house burned down, would you? No, 
but the fact of the matter is mother nature is mother nature. 
And we know that mother nature is going to do things that are 
totally unpredictable, whether it is a drought in North Dakota 
this year or whether it is a hail storm in some other part of 
the country. Hell, I lost my barley crop a few years ago just 
because it rained really, really hard a day before I was 
supposed to cut it, literally. And so making sure that when 
disasters happen that we have a safety net is critically 
important.
    I want to close with this. I have had about a half dozen 
listening sessions around Montana, east, west, north, and 
south. Farmers and ranchers are not asking for much, maybe with 
the exception of the Environmental Quality IncentivesProgram 
(EQIP) that they would like to have plussed up. What they are 
asking for is let us not take a step backwards because if we 
take a step backwards, especially in this time when we have low 
commodity prices, and they truly are very bad.
    For example, I took the farm over in 1978. Prices are as 
low now as they were when I took the farm over in 1978, and you 
know what a tractor or a pickup costs compared to what they did 
in 1978. So they just do not want to take a step back and I 
think this budget takes a giant step back. And I think we need 
to flesh that out and find out what the Secretary of 
Agriculture is going to do about that moving forward.
    Thank you for being here.
    Senator Hoeven. Other opening comments before the Secretary 
provides his testimony? Hearing none.
    Again, Mr. Secretary, Dr. Johansson, and Mr. Young, thank 
you all for being here and we would welcome your opening 
statement.


                  summary statement hon. sonny perdue


    Secretary Perdue. Well, thank you, Mr. Chairman, and 
Ranking Member Merkley. I very much appreciate the confidence 
that you all have expressed in me and my understanding of 
agriculture. It is true that I have lived it. It has been my 
life and, Senator Tester, I want to tell you again to thank you 
personally for the nomination on the confirmation on the floor.
    Thank you for that. And you all have expressed a lot of 
confidence and my goal is to live up to that confidence in that 
area.
    Senator Tester, I hope to address the question that you had 
regarding crop insurance in my comments in Montana.
    What I would like to do, Mr. Chairman, is to give you 
broadly the vision that I outlined on the first day that I went 
to the Whitten Building for our employees for the Department of 
Agriculture. I am delighted, frankly, that it is attached to 
this committee which does demonstrate a working together, both 
for the authorizing committee and the appropriating committee.
    And I think we all have U.S. agriculture's heart at mind 
when we make these decisions. And I take your vision sincerely 
about that, how do we go forward in right sizing an 
agricultural budget for the benefit of our producers and the 
benefit mostly of America. So that is our goal.
    I outlined really four broad goals there as I went to the 
USDA. The first was to maximize the opportunity and the ability 
of the men and women of agriculture and the agribusiness sector 
to create jobs, to produce and sell the foods and fiber and 
energy that feed and clothe the world, and to reap the earned 
reward of their labor. I think it should be the aim of the 
American government to remove every obstacle to give farmers 
and ranchers and producers every opportunity to prosper from 
their labor.
    Secondly, I want to prioritize customer service every day 
for American consumers, customers, and taxpayers. I think they 
have the right to expect and demand that their government 
conduct the people's business efficiently, effectively, and 
with the utmost integrity, and that is our goal at USDA. I 
think also our vast array of investors, the American taxpayers, 
all of our citizens have a right to expect a safe and secure 
food supply. And I want to commit to you that USDA will 
continue to serve in the critical role of ensuring the food 
that we put on our table to feed our families each and every 
day meets the strict safety standards that have been 
established and we all aspire to.
    And then fourthly, farmers are great stewards and I want 
the USDA to be a great steward of American agriculture. Simply 
put, we must preserve the land. We must pursue clean water, 
clean air, and it is not an option. Stewardship for farmers and 
for ranchers and producers is a requirement. And I have found 
them to be the best stewards of our land.
    So American agricultural bounty comes directly from all the 
resources used to produce food and fiber. Those were the 
principles that were driven into me as a young boy growing up 
on a diversified row crop farm.
    I know that you all have some questions and I look forward 
to answering all of them. I want to address our efforts of 
reorganization and I will answer your questions specifically 
that you may have regarding the new mission area for the Under 
Secretary of International Trade.
    As you know, this was directed in the 2014 Farm Bill and we 
felt we took you all seriously and created a new Under 
Secretary for Trade in the mission areas. It recognizes the 
growing importance of international trade to the Agriculture 
sector of the American economy. I am one of those who believes 
that the U.S. economy is tied to the Agriculture economy and 
the Agriculture economy is tied to international trade.
    As I visited with you all and 75 of your colleagues there, 
there were three points that were really made. Trade was number 
one. Labor was number two. And regulation was number three. I 
heard those repeatedly overall and I took those to heart.
    As you know and have heard, yesterday we reached an 
agreement with Chinese officials on the final details of a 
protocol to allow the U.S. to begin beef exports with China. 
This is a huge deal and we are happy to have that. I am very 
impressed and very pleased--honored, frankly--to work with 
Secretary Wilbur Ross of Commerce as well as Ambassador 
Lighthizer as we go around the world to sell U.S. Agriculture 
products.
    You rightly noted, Mr. Chairman, it is a balance of trade 
that we have that we should be proud of. Our producers are the 
best in the world and we think that they produce a product that 
can be used for world peace, figuratively and literally, around 
that.
    Secondly, we reconstituted our domestic customer facing 
agencies under the newly named Secretary of Farm Production and 
Conservation. We removed the National Resources Conservation 
Service (NRCS) from the forestry mission area into I believe a 
more logical fashion when farmers walk in the door to have a 
domestic agency that represents them. We have an Under 
Secretary for Trade and Foreign Agriculture Affairs, 
international relationships. We have got an Under Secretary for 
Farm Production and Conservation that deals with our domestic 
issues that farmers deal with each and every time.
    I know there has been more conversation and more concern 
regarding our efforts in Rural Development. I have done what I 
believe and I literally continue to believe by elevating the 
Rural Development, mission area, and position it where it 
reports directly to the Secretary. There is not going to be an 
intermediary.
    That person that we named yesterday, Anne Hazlett, who has 
been a member of your committee, authorizing committee staff 
here, and has been vastly experienced in rural development 
issues. We named her to the Assistant to the Secretary for 
Rural Development yesterday. She comes from an impressive 
background in agriculture, and most appropriately, rural 
development, working in both the U.S. House and U.S. Senate. 
Anne has most recently served as a Republican Chief Counsel for 
the Senate Committee on Agriculture, Nutrition and Forestry. In 
addition to her public service here, she also had the 
experience of Director of Agriculture for her home state where 
she managed the Indiana State Department of Agriculture and was 
a huge advisor to those governors on agriculture and rural 
issues.
    Additionally, we have her put to work. You know that the 
Farm Bill directed the Under Secretary for Trade. It did not 
direct an eighth Under Secretary position, nor did it fund 
that. And the good news is with our confirmation process 
lagging, Anne Hazlett is on the job working for Rural 
Development today whereas it could possibly be after the August 
recess before we get our other nominees in place. And that was 
another function. Rural Development was too important to wait 
and we chose to go to work right away.
    As I close, I would like to address Senator Tester's quote 
from me regarding crop insurance in his home state of Montana. 
And I hope that it was not misinterpreted. What I indicated was 
as producers, agriculturalists across the country, we have got 
to understand that insurance is just that. When there is a 
tragedy, when there is a drought, when there is a flood, when 
there is hail, we need a safety net to call upon, but no longer 
can we think about insurance as an investment. We do not invest 
a dollar in insurance and expect to get $1.10 back every year 
in that area.
    So I want crop insurance to be just like we have property 
and casualty insurance. Otherwise, hopefully never using. I 
have never met a real farmer, Senator that wanted to--would 
rather have to call on insurance rather than have a good crop 
at a fair price. And that is really what we want to do. We know 
the vagaries of agriculture from weather, from all the risks 
they take year in and year out, that is altogether possible and 
they deserve--America deserves a healthy safety net of crop 
insurance. And I trust that this committee and the Congress as 
a whole will make sure that we right size that crop insurance 
budget where our producers can continue to rely on that and 
make good crop decisions based on that.
    So, with that, Mr. Chairman, I look forward to answering 
any and all of your questions from your committee and your 
members.
    [The statement follows:]
                Prepared Statement of Hon. Sonny Perdue
    Mr. Chairman and distinguished members of this Subcommittee, I 
appreciate the opportunity to appear before you to discuss the 
Administration's priorities for the Department of Agriculture (USDA) 
and provide you an overview of the President's 2018 budget. Joining me 
today are Robert Johansson, USDA's Chief Economist, and Michael Young, 
USDA's Budget Officer.
                    a strong vision for agriculture
    It is an honor to be with you today as the nation's 31st Secretary 
of Agriculture. I am truly humbled by the opportunity to serve the 
American people and our farmers, and I assure you I will work 
tirelessly on their behalf. I thank you for the opportunity to appear 
before you today, and I look forward to working with you in the coming 
months and years as we can continue our nation's agricultural 
preeminence, building on the innovative progress of years gone by and 
growing to meet the needs and demands of customers and consumers here 
in America and around the world.
    While I am new to the Federal budget process, I know firsthand the 
challenges related to developing and enacting budgets at the state 
level. As governor, I reformed state budget priorities to transform a 
budget deficit into a surplus, improved program performance, and helped 
Georgians create more than 200,000 new jobs. Now, in my role as 
Secretary of Agriculture, I will be the leading advocate for rural 
America and agricultural producers, bringing to the Department the same 
energy and creativity I brought to my job as Governor. As U.S. 
Secretary of Agriculture, I have set four goals for my time as 
Secretary.
    First, I will maximize the ability of the men and women of 
America's agriculture and agribusiness sector to create jobs, to 
produce and sell the foods and fiber that feed and clothe the world, 
and to reap the earned reward of their labor. We want to remove 
obstacles, and give them every opportunity to prosper.
    Today, we need to feed some 7 billion people. By the year 2050, 
that population will swell to 9.5 billion, over half of which will be 
living in under-developed conditions. Also, the demographics of that 
population will change over time. If we examine the data available, we 
can see that our global population is aging, and by the year 2050, more 
of the population will be older than 65 than younger than 5 years of 
age. What this means is that as we move forward, the dietary demands of 
the global population are going to change. We are also going to see 
stronger middle classes in developing countries that will join the 
already strong middle classes in the developed world. This means that 
the demand for meat will grow exponentially as will the demand for 
grain production. To put the demand for food into perspective, we are 
going to have to double our production between now and 2050. We will 
have to produce more food in the next 30 years than has been produced 
in the last 8,000 years--a daunting task, to say the least. Rest 
assured it is a task that USDA is ready to take on.
    That being said, we cannot feed the world if we continue to place 
obstacle after obstacle in front of those who produce our food and 
fiber. People in agriculture used to fear disease and drought as the 
greatest threats to their livelihoods and their mission of feeding 
their neighbors and the world. Those hazards remain, but now too often 
it is the government--through interference and regulation--that poses 
the most existential threat to American farmers and producers. We aim 
to put a stop to that. As you may know, the President recently 
announced the creation of the Interagency Task Force on Agriculture and 
Rural Prosperity. With USDA as chair, we will examine, consider and 
take actions to address current barriers to economic prosperity and the 
welfare of communities in in rural America, including how innovation 
and modern technology, and infrastructure play a critical role in fully 
bringing communities into the 21st century. This multi-department group 
will find ways to improve regulatory flexibility and provide relief for 
farms and small businesses. We will examine how the Federal government 
does business and how that impacts rural communities, and food and 
fiber production. And, we will, at every turn, ensure that decisions 
and actions are founded in principles of sound science and validated 
facts. The questions we are asking at USDA, and that I will be asking 
the task force, are fundamental to this process: How do we impact jobs 
and job creation; are we doing things that make sense; do the costs 
outweigh the benefits; and, is there better way or better place we can 
do it? We have a lot to tackle. It is long overdue and must and will be 
done.
    Another key issue that I hear about is the continued instability in 
the agricultural workforce. This instability often limits not only 
farmer's ability to grow their businesses but also consumers' access to 
freshly grown, local products. It is my priority to ensure farmers and 
ranchers have access to a legal and stable workforce and I look forward 
to working with the President, Congress, and with the other 
stakeholders to find a solution.
    We must also work with our producers to expand foreign markets to 
sell their products. Ninety-five percent of the world's consumers live 
outside of our borders. That means our trade agreements open a world of 
opportunities for American businesses. In fiscal year 2016, American 
agricultural producers achieved $129.7 billion in exports, and fiscal 
year 2017 exports are projected to reach $136 billion. Agricultural 
exports totaled over $1 trillion for the period fiscal year 2009 
through fiscal year 2016, the best eight year stretch in history, and 
agriculture has produced a trade surplus each year since the 1960s. 
Agricultural exports support more than 1 million American jobs both on 
and off the farm each year, a significant part of the estimated 11.5 
million jobs supported by total exports all across the country. 
Agricultural exports support farm income, which translates into more 
economic activity in rural areas. Each dollar of agricultural exports 
is estimated to stimulate another $1.27 in business activity.
    However, the slowing global economy and appreciating dollar have 
put unprecedented competition on U.S. farmers. Many countries do not 
respect fair trading rules that have already been agreed to as part of 
previous agreements and many others insist on enforcing trade barriers 
to our products that are not based on sound science. I assure you that 
USDA will use all the instruments available to us to ensure our 
agricultural producers and products get fair treatment in foreign 
markets. This Administration will not stand idly by as other countries 
try to take advantage.
    In addition, on May 11, 2017, I directed a reorganization of USDA 
to focus our attention keenly on agricultural trade, consistent with 
direction from the 2014 Farm Bill. The newly established Under 
Secretary for Trade and Foreign Agricultural Affairs will be 
responsible for coordinating agency efforts at opening new and 
protecting current markets. I believe Congress had great forethought in 
including this provision in the Farm Bill, and this will strengthen 
USDA's ability to ensure a level playing field for U.S. farmers and 
ranchers in the global marketplace. Moreover, the Under Secretary for 
Trade will bring new energy and support to our interagency 
relationships with the Commerce and the U.S. Trade Representative.
    As part of that reorganization, and touching on the equally 
important priority of customer service, we are combining the critical 
functions in our Farm Service Agency, Risk Management Agency, and 
Natural Resources Conservation Service under a single umbrella to 
ensure our services to farmers and ranchers are efficient, streamlined, 
and deliver the results that our producers expect and need. Our 
customers will have a one stop shop, with common leadership and one 
voice, to provide the services they need. The walls are coming down, 
and our employees will be empowered to work together to serve USDA's 
customers. I am also elevating our Rural Development program to report 
directly to my office. The economic vitality of small towns across 
America is crucial to the future of the agriculture economy, and we 
will be leveraging USDA's expertise in rural development as the 
Administration works to increase investments in America's 
infrastructure.
    Through these, the Department's further reorganization proposals 
that are being developed as part of the Administration's government-
wide reorganization effort, and other actions, USDA will prioritize 
customer service every day, across the mission areas. Our customers 
expect, and have every right to demand, that we conduct the people's 
business efficiently, effectively, and with the utmost integrity. 
Arguably, no other Federal agency has more direct interface with 
Americans than does the Department of Agriculture. In the Food and 
Nutrition Services alone, we serve one in four Americans every year, 
including more than 30.6 million children per day who benefit from a 
healthy meal at school and the 42.8 million participants in the 
Supplemental Nutrition Assistance Program each month. We touch millions 
of Americans through a host of other programs, as well. If we take into 
account our farm services, rural development, conservation, extension 
and education programs, we touch every single facet of American life. 
If we are to do the best for our producers and feed the world by 2050, 
we must not only continue to provide top rate customer service, but we 
must also develop strong partnerships so that we can face our 
challenges together. Together with our 100,000 plus employees spread 
across thousands of locations around the United States and the globe, I 
know we can make USDA the best agency in the country.
    Next, since our taxpayers are also consumers, we know they expect a 
safe and secure food supply, and USDA is committed to continue to serve 
in the critical role of ensuring the food we put on the table to feed 
our families meets the strict safety standards we've established. By 
having the best science and data, we will be able to make strong 
strategic decisions that will transcend generations.
    And, last but certainly not least, we must preserve the land--and 
we must relentlessly pursue clean air and water. Stewardship is not 
optional for farmers, producers and ranchers. American agricultural 
bounty comes directly from all the resources used to produce food and 
fiber. Today, that land and those resources sustain more than 320 
million Americans and countless millions more around the globe. My 
father's words still ring in my ears, ``Son, if you take care of the 
land, it will take care of you. Owned or rented, we're all stewards, 
and our responsibility is to leave it better than we found it.'' 
Without proper care, our resources could be squandered. Science and 
hard work will help us find the best ways to produce our crops, be 
mindful of our use of inputs, preserve the soil, keep our air and water 
clean, and allow us to live in a better place than we found when we 
started. Rather than clearing another acre of land, let's first seek 
out ways to produce more with what we already have. If we live by these 
principles, we can preserve our wetlands, our watersheds, our forests, 
our prairies and our ecosystems for generations to come.
                      the president's 2018 budget
    I am here today to present to you the Administration's budget for 
the Department. The President's Budget for 2018 for USDA programs 
within this Subcommittee is about $135 billion, of which approximately 
$122 billion is mandatory funding. The majority of these funds support 
crop insurance, nutrition assistance programs, farm commodity and trade 
programs and a number of conservation programs. For discretionary 
programs of interest to this Subcommittee, our budget proposes a net 
budget authority of about $13 billion, approximately $5 billion below 
the 2017 annualized continuing resolution. The Budget includes 
mandatory funds to fully support estimated participation levels for 
Child Nutrition programs and discretionary funds to fully serve the 
expected participation in the Special Supplemental Nutrition Program 
for Women, Infants, and Children. It includes the funding needed to 
meet our responsibility for providing inspection services to the 
Nation's meat and poultry establishments.
    As access to credit remains a significant issue for producers, the 
Budget supports a loan level of approximately $7 billion to support 
farm ownership and operating loans for about 42,000 producers. Recent 
demand has led to full utilization of the program level for farm 
operating loans for fiscal year 2016, with record loan levels at $6.3 
billion. To facilitate exports to buyers in countries that may not have 
access to adequate commercial credit, the Budget includes a program 
level of $5.5 billion for CCC Export Guarantee Programs to provide 
guarantees. As research is critical to fostering innovation needed to 
increase production, the Budget proposes $2.5 billion for high priority 
agricultural research, including about $350 million for the Agriculture 
and Food Research Initiative and $64 million to conduct the Census of 
Agriculture. The Budget also includes a total of $810 million to 
protect agricultural resources from pest and disease.
    USDA will continue to assist rural communities with resources to 
promote economic development and revitalization, job growth and 
infrastructure improvements. These investments include $3 billion, an 
increase of $800 million, for the Community Facilities direct loan 
program to provide funding for critical rural infrastructure. We are 
also proposing an increase of about $162 million to establish a new 
grant account for the purpose of supporting economic infrastructure 
development across Rural America. Funding will support activities aimed 
at improving the quality of life in rural areas, such as broadband 
deployment in remote rural areas.
    I have learned that USDA's annual appropriations is very complex. I 
would like to work with you, as well as the authorizing committees, to 
make USDA a more nimble and effective organization. Looking forward, I 
am sure there are many ways we can make USDA programs work better for 
the constituents we serve. Particularly as Congress works toward 
developing the next Farm Bill, I am prepared to work with Members and 
our stakeholders to seek solutions to our common challenges, while 
remaining accountable to the people.
    As I recently informed the House Agriculture Committee, I am 
confident in the future of rural America and see opportunities for us 
to continue to strengthen this outlook and create opportunities for 
rural America. I look forward to working with this Subcommittee to 
fulfill the President's goals and our key responsibilities for the long 
term benefit of producers and all Americans.
    I will be glad to answer questions you may have at this time.

                       USDA POLITICAL NOMINATIONS

    Senator Hoeven. Thank you, Mr. Secretary.
    Any comments from Dr. Johansson or Mr. Young before we 
proceed?
    All right. Thank you very much for those opening comments. 
And one thing I always start out with. I did not today, so I am 
going to say it right now, and that is that good farm policy 
benefits every single American every single day with the 
highest quality lowest cost food supply in the history of the 
world. That is what our farmers do for us every single day. And 
so as we are crafting farm policy, we have to remember. It 
makes a difference. It benefits every single American every 
single day.
    You mentioned the agreement with China. I want to commend 
you on that as well as Lighthizer and Wilbur Ross. I think that 
will help our cattle producers and I appreciate very much your 
diligence and hard work on it. That is the example of the kind 
of work we need to see happen in trade for our farmers. We 
start out at a disadvantage right away because a dollar is so 
strong in terms of competing in those foreign markets. So, 
thank you for the China agreement and hopefully there will be 
more of that.
    Starting out with the appointments, there are 15 Senate 
confirmed positions for USDA, but so far you are the only one 
to be nominated. Now you have got--you mentioned Anne, but I 
guess can you provide us with any insight as to when we can 
expect more of these nominations to start being made so that we 
can take into the confirmation process and get you more help 
over there? For example, FSA Administrator, FSA State Executive 
Director. You know, when are we going to see more of these 
nominations made so we can get to work on getting them 
confirmed and putting them to work?
    Secretary Perdue. Senator, I was hoping you could help me 
with that.
    Senator Hoeven. Well, I will if----
    Secretary Perdue. Obviously you know that I spent almost my 
first 100 days after being nominated here walking the halls of 
the Senate and visiting with colleagues. And this process took 
far too long. It is taking far too long with the Under 
Secretary positions that we have submitted to the White House. 
Those have been passed along for the Federal Bureau of 
Investigation (FBI) vetting as well as the Office of Government 
Ethics. There does not seem to be a lot of urgency in those 
areas to get people cleared where you all can continue to have 
your vetting process as well and the confirmation hearing.
    So anything you all can do to encourage our Office of 
Government Ethics as well as our FBI to expedite those. We have 
submitted some--I think some very capable names that you all 
will be proud to confirm and I would love to have them on board 
as quickly as possible. When this Administration took office on 
January 20th and I am being told that some of these will not be 
confirmed until after the August recess, so, you know, almost 9 
months later, that is very troubling to me. I think it is a 
very difficult way to have a transition when you think that 
almost 9 months later we get the people in place to lead these 
agencies.
    That having been said, I want to tell you, this whole 
committee, and Congress as a whole, there are some dedicated 
career employees over there, two of which are sitting next to 
me that have been excellent in their operations there. I rely 
on their advice and counsel and I frankly do not know what we 
would have done without them. So the USDA is blessed to have a 
whole cadre of USDA employees, career employees, who work very, 
very hard dedicated to agriculture and our producers in 
general.
    So, while we need this leadership in place, we would like 
to get them as quickly as possible. I hope you can impress upon 
any influence in your sphere of influence you may have over the 
Office of Government Ethics and the FBI to move these names 
along so we can get them to you to be confirmed.

                             CROP INSURANCE

    Senator Hoeven. It is moving too slowly getting these 
appointments in place and I think we all need to do everything 
we can to help expedite it.
    Crop insurance has become the number one risk management 
tool for our producers. I mean, it is just vitally important. 
Crop insurance has been reduced in terms of the support, $12 
billion, between the 2008 Farm Bill and the last time the 
Administration took action to take funding out of crop 
insurance support, which was in 2011, so that is a $12 billion 
reduction in the support for crop insurance which is, again, as 
I said, has now become our farmer's number one risk management 
tool, particularly as you look at a drought year, low commodity 
prices. It is vitally important.
    In the last Farm Bill, we put specifically in statute that 
the Administration cannot take money out of the Farm Bill. That 
was a very important provision. And I am going to work very 
hard to make sure it gets in the next Farm Bill because they 
have got to be able to count on it. And so I would just like 
you to talk for a minute about your commitment to crop 
insurance. Do you agree that it is a vitally important risk 
management tool for our producers and that it needs to be there 
to help them?
    Secretary Perdue. Thank you, Mr. Chairman. Hopefully, I 
have already expressed my belief in crop insurance and I am 
happy to do so again. I do think it is a very appropriate part 
of the farm safety net. I think what you all did in 2014 with 
the Farm Bill, moving away from direct payments into a robust 
Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) 
payment scheme primarily with crop insurance is certainly more 
palatable to the American public, the American taxpayer, where 
producers actually are purchasing insurance with the help of 
the Federal government as well for those times where they need 
it.
    Agriculture is an extremely risky provision and prospect 
and it amazes me that we have enough producers who are willing 
to put that degree of equity every spring in the ground hoping 
for a good crop. Farmers or ranchers are the best optimists I 
know and year in and year out they are looking forward to a 
better year. We need the crop insurance and I trust that this 
committee as well as those committees on the House side will 
see that we are able to right size our crop insurance budget 
where it is meaningful.
    As I said to Senator Tester, I think every producer in the 
country would rather have a good crop at a fair price rather 
than have to call on crop insurance. Unfortunately, all over 
the country that is not possible each and every year. And I 
think this program, based on the geographical differences and 
weather, is the appropriate program to move forward as a part 
of the safety net for agricultural production for the food 
security of the American public.
    Senator Hoeven. I think the two real keys in the Farm Bill 
are going to be making sure that crop insurance support is 
there combined with the countercyclical ARC and PLC that work 
in the way intended. And as you say, that is exactly how we 
work with our farmers and to make sure that they can 
consistently produce that food supply that benefits everybody 
every day.
    And like I say, not only highest quality, lowest cost, but 
also that is the most cost-effective way to approach farm 
policy from the Federal government's perspective because when 
you do not need that help or support, then it does not cost 
anything which is why I started out making the point in a Farm 
Bill that was scored as saving $23 billion, the way it works 
actually over the next ten years it would save more than $100 
billion. And I think it is very important that people do not 
lose track that that is how it works and that farmers are doing 
their part in helping with debt and deficit as well as good 
farm policy and a favorable balance of trade.
    I will turn at this point to Senator Merkley.

                  OVERSIGHT REQUESTS FROM THE MINORITY

    Senator Merkley. Mr. Secretary, a number of news reports 
have discussed the Administration's directive to Federal 
agencies not to respond to oversight requests from the 
minority. This is obviously concerning because the Executive 
Branch works for all of America and this subcommittee certainly 
has a very positive bipartisan history. Will you continue to 
respond to written inquiries and requests from the majority and 
the minority, no matter who originated the request?
    Secretary Perdue. Absolutely, Senator. I mentioned the fact 
that that proposal, that suggestion, I do not think it was 
necessarily directed to the minority. I think the edict was 
that it must come from the chair. And that, irrespective of 
which party is in place. But I feel like you are duly elected 
and if you have got questions regarding the accountability of 
the Department of Agriculture, I feel an obligation to respond 
and I plan to do so.

            NATIONAL BIOENGINEERED FOOD DISCLOSURE STANDARD

    Senator Merkley. Thank you very much. Most appreciated.
    Last year Congress passed the national bioengineered food 
disclosure standard. This is not a standard I liked. I did not 
think the quick response code would work for consumers, but 
nevertheless, a study is supposed to be completed by July 29th 
and the standard is supposed to be implemented by the following 
summer in 2018. Will the study be on time and will 
implementation be on time?
    Secretary Perdue. It is my absolute commitment that the 
study and the rollout of that will be on time. And, Senator, I 
would recommend you get your grandchildren to help you with 
that QR code app on your phone.

                         USDA'S REORGAINZATION

    Senator Merkley. That is what it will take for many 
Americans, and that is assuming folks actually have a smart 
phone to be able to scan it and have the time to look at 
individual products, which they will not have in our busy 
society. But nonetheless, so as you know, I would love to see 
it right on the label so that folks do not have to go through 
all that fancy technology and websites.
    But continuing, you have announced the reorganization and 
you invited public comments on the reorganization due tomorrow, 
June 14th. So it caught many of us off guard when you appointed 
or filled the position of Assistant to the Secretary for RD 
before even the comment period was completed. And why? Why not, 
if you open up a comment period, why not wait until you get the 
comments before you proceed?
    Secretary Perdue. I would be happy to respond to the 
question, Senator. I think technically we informed the members 
of Congress on May 11th, which was our statutory responsibility 
to do and we waited the 30 days from May 11th, which had 
expired by a couple of days. The Federal Register was a few 
days late, later than that, and that is the 30 day period. But 
nonetheless, whether it is in time or after time, we plan to 
take those comments. We actually, at USDA, I hear press 
reports, about 600 comments. I have seen some of those pages of 
lists of people. They were not individual comments, but I think 
600 different people had--or groups, mostly Rural Housing 
Coalition--had signed on to that.
    We actually received 26 comments at the USDA, only 7 of 
which had to do with Rural Development. So I hope that--I am an 
accountability kind of guy, Senator, and I hope that you will 
hold me accountable on this. If you do not think that we are 
making progress in Rural Development by the time the Farm Bill 
comes up, I would welcome you all to direct us to create the 
nomenclature for an Under Secretary of Rural Development. And I 
can assure you, whatever you want to call it, we are going to 
do best for Rural Development America.
    Senator Merkley. Well, I will just note that Senator 
Stabenow and I sent you a letter supporting the creation of a 
new Trade Under Secretary, but opposing the elimination of the 
RD Under Secretary. And the fact that the announcement was made 
before the comment period ended made us feel that probably our 
comments had not been read or taken into account in making the 
decision, that it was predetermined.
    Secretary Perdue. Well, that was not intended in any way, 
Senator, and I hope that you do not take offense at that. That 
is one of the reasons I spoke with you and Senator Stabenow 
prior to making that announcement informing you of my plans and 
I certainly would have expected any kind of problem or any kind 
of issue to have been addressed when we spoke personally.
    And I apologize if you feel like--because, again, we took 
the date of May 11th, when we informed the Congress of those 
changes, for the 30 days to have expired. And once again, we 
are going to take your consideration, Senator Stabenow's 
consideration, and the public in consideration. But I state 
once again, hold us accountable. If I do not make you proud of 
Rural Development and what we do over the next year, I will be 
happy to have another Under Secretary directed by the Farm 
Bill.
    Senator Merkley. I thank you much.
    Senator Hoeven. Senator Cochran.

                         USDA'S RESEARCH BUDGET

    Senator Cochran. Mr. Chairman, I join you in welcoming our 
distinguished panel to talk about the Department's budget for 
the next fiscal year. We have got a growing demand for food and 
need for Federal government research dollars provided to help 
make sure that we are doing the best things for the crops and 
that we have thoughtful programs backed up by research from 
experts throughout many of the college and university systems, 
but also Federal government agencies.
    So I am asking you if you think that the amount of money 
provided for the Department's research budget is going to be 
adequate to sustain a level of research to make sure that 
farmers get the benefit of those efforts.
    Secretary Perdue. Well, Senator, you know that you and I 
were just at the Delta Council at the Stoneville Research 
Facility, which in my opinion is one of the best examples of 
the collaboration between our land grant universities--in this 
case, Mississippi State--and our Agriculture Research Service 
ARS at the USDA. It was a seamless operation and I do not think 
those people even knew, whether they had a Mississippi State 
shirt on, extension, or (ARS), the way they were working 
together collaboratively on that.
    I think, again, you know that I am a member of the 
Executive Branch. You have acknowledged that I did not have 
much input in the formulation of this budget. I would admit to 
you today that I think research is one of those areas where we 
may have missed the mark and I believe that we can work toward 
rightsizing the budget because research is really the basis of 
our agricultural productivity today.
    I have stated publicly and privately, been quoted publicly 
and privately, that I believe if American manufacturing had the 
same level of basic research, applied research, and had a 
delivery system like the Extension Service, we would not be 
talking about the demise of American manufacturing today. That 
is how strongly I believe in research in our land grants and 
research in our ARS. So I hope that we can appropriately find 
the money to fund them to continue.
    Senator Cochran. Thank you. Thank you, Mr. Chairman.
    Senator Hoeven. Senator Tester, you want to go again or you 
all done?
    Senator Tester. No, I have got questions now.
    Senator Hoeven. You had that opening statement. I did not 
know if you had anything left.
    Senator Tester. I do not know if it is good.
    Senator Hoeven. All right. Senator Tester.

                       RURAL DEVELOPMENT FUNDING

    Senator Tester. Well, thank you, Mr. Chairman. You asked 
for the opening statement. I could not resist.
    Look, I want to thank you for being here and I am not going 
to go into the crop insurance stuff. I think the chairman has 
dealt with that appropriately and you and I both know that 
there is not a farmer alive that would not rather get their 
check from the grain elevator or the livestock market than they 
would from the Federal government.
    Secretary Perdue. Sure.
    Senator Tester. And I also will tell you that in the case 
of insurance, I do not know anybody that has made money off of 
crop insurance.
    Secretary Perdue. That is right.
    Senator Tester. There have been a few that make some money 
off of hail insurance, but nothing off of crop insurance, okay, 
because it is really pretty basic.
    So I want to talk about the Rural Development. The ranking 
member talked about it a little bit. It is a cut of 20 percent. 
And this program is a program that, at least to my perspective, 
is overutilized, not underutilized. And I know you said watch 
and see what happens, but the problem with cutting 20 percent 
out of this program is I have got a list of about a dozen water 
systems that my staff just got me five minutes before this 
hearing that you are not going to see the negative effects 
until long after you and I are both out of these positions.
    And so what is the thought there? I mean, because it is 
pretty basic stuff for rural development and rural America. And 
you know, I do not think it is any different in Georgia than it 
is in Montana or North Dakota or Oregon. Rural America is 
drying up. And if we do this, the infrastructure is not there, 
we have got problems. Could you address that a little bit?
    Secretary Perdue. Certainly. I address it really by 
acknowledging that rural development has addressed some very 
serious needs. I like the fact that many times these are skin 
in the game programs where local needs are met with Federal 
help in order to accomplish----
    Senator Tester. Yeah. That is correct.
    Secretary Perdue. Things that are really good. I like that 
kind of leverage that we can get through Federal expenditures 
by ensuring that either local money, Federal or state money, or 
private money are involved in these projects.
    I would say, to the President's defense, that the day I was 
sworn in, he convened a farmer, rancher, forester, and producer 
roundtable and signed an Executive Order regarding rural 
prosperity, an interagency task force to deal with rural 
prosperity. I think, again, as we right size this budget, you 
all know that you are going to get a last stamp on this and the 
degree that you all believe that we are doing good. My comment 
about holding us accountable, Senator, is hold me accountable 
for the resources you give me.
    Senator Tester. I know.
    Secretary Perdue. I am a farmer at heart. I am going to 
make it go as far as you do----
    Senator Tester. I know.
    Secretary Perdue Just like you do, so.

                        RESEARCH AND DEVELOPMENT

    Senator Tester. And, Mr. Secretary, I would just tell you 
that, and it is just this way. You follow the money. I mean, 
words are one thing. And I am not saying you. I am talking 
about getting folks together and talking is good. We talk a lot 
of stuff in this Senate, but if the money is not there, the 
Research and Development R&D is just--I hate to say this, but 
it is not going to happen. And this is not at you. What I am 
saying though is as Secretary of Agriculture, you are going to 
have a big role in what this committee does, believe it or not.
    If you come in and say, just like you said to Senator 
Cochran, if you come in and say, ``You know what? R&D is not 
where it needs to be.'' That is going to hold a lot of weight 
with this. And, by the way, R&D is not where it needs to be and 
you are right. And I would just tell you sawflies. We never had 
that when I was growing up. Vomitoxin never had that 5 years 
ago. And it is for a number of reasons, because we are raising 
corn now in Montana instead of high quality wheat. Rust, 
blights, all this stuff.
    And by the way, so--and I do not know if they have got 
vomitoxin down in Georgia, but I am going to tell you 
something. Do you know what they do in Montana? They pull the 
combine in at harvest time. They cut out the corners. They take 
it to the elevator. If it has got vomitoxin, they set the field 
on fire.
    We need some (R&D) money. And, by the way, as long as we 
are on that, organic has been the fastest going. And I know the 
chairman of the Agriculture committee hates organic, but the 
truth is that organic is the fastest growing part of the farm 
industry for the last 25 years. Let us put a little money in 
there to make sure that those guys are at least getting a fair 
shake. Okay?
    Secretary Perdue. Fair enough.
    Senator Tester. Good enough.
    Secretary Perdue. I do not disagree.
    Senator Tester. You are good. I would just tell you that--a 
couple of things. This is really, really Montana centric, 
eastern Montana centric. We have got a little Agriculture 
rancher cattle research station, a range research lab called 
Fort Keogh in Miles City, Montana. Now, I am going to tell you 
something. In my life, ranchers have never been anybody at the 
trough as far as I am concerned. They have got some advantages 
on public land grazing and things like that, but they have 
never been anybody that has come in and said, ``We need this 
subsidy. We need this support. We need this.''
    We have got this little laboratory that helps ranchers 
figure out how to maximize their ability for cattle on range. 
And it is proven. It has been around since 1924 and it has been 
proven benefits to the ranchers I think throughout the country, 
but I can tell you absolutely unequivocally in the arid areas 
of this country. And it is set to close down, I believe. And I 
would just ask you why would we be doing that? I mean, we have 
got more cattle than we have got people in Montana. And I think 
that might be a good thing.
    Secretary Perdue. Is that a rhetorical question?
    Senator Tester. No. Why would we be closing this down when, 
quite frankly, it is one of the tools out there I think we get 
an incredible bang for the buck.
    Secretary Perdue. Yeah. I think I have expressed my favor 
and my enthusiasm for research and development in Agriculture 
production and in various components of that. And I think you 
will, if you have invited me to be an advisor to this committee 
over appropriations, and I think you will be happy with the 
results.
    Senator Tester. Well, I think you are. I do not want to 
speak for the chairman, but your input on this budget is 
critical. And it came down from the President and I will shut 
up. But the priorities, I gather, are not your priorities in 
this budget. They were somebody else's. And I think there is a 
lot of people that serve in the United States Senate and 
Congress that do not understand production agriculture. They do 
not understand the challenges in rural America.
    I voted for you because I think you do. And if your voice 
is not made loud and clear throughout this process about what 
is important, whether it is rural development or Agriculture 
research or safety nets for farmers, then we are going to end 
up with a bill that is not going to meet the needs of rural 
America. I will just tell you that. That is how important you 
are.
    Secretary Perdue. I do not think you will find a stronger 
advocate for those things that you and I agree on, Senator.
    Senator Hoeven. Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much. 
Congratulations and best wishes to you as the chairman of this 
subcommittee and I would repay the compliment to the Ranking 
Member of the cooperation he and I exhibited over the last 
couple of years when I was in your stead.
    Mr. Secretary, good to see you.
    Secretary Perdue. Thank you.

                           DISASTER PROGRAMS

    Senator Moran. Thank you for coming to Kansas City early in 
your tenure and it was a joy to join you in Stoneville and 
Cleveland and Mississippi over the weekend. Thanks for your 
advocacy for agriculture certainly in rural America and I look 
forward to making certain that you are an advocate for rural 
America and for agriculture in the urban and suburban areas of 
our country which desperately need, as was indicated by the 
senator from Montana, they need to know about what we do and 
how it affects them as well. So congratulations and best wishes 
to you in your new position. I look forward to working with 
you.
    I want to highlight--first of all, I want to thank Mr. 
Young. In your absence before you were confirmed, he was the 
acting Secretary. He responded forthwith to concerns that I had 
about fires in Kansas. We had a number of counties who were 
significantly devastated by wildfires, Clark County in 
particular. Nearly all of the county was burned. There was--I 
think the number is 700,000 acres in Kansas were burned by 
wildfires. Ironically, sadly, two weeks later the rains come 
and I guess the hope is that----
    Secretary Perdue. And snow.
    Senator Moran. The snow came. The good news is that you saw 
green begin to appear in places that were black just a few days 
before. It will take a long time, decades, perhaps generations, 
for a recovery to occur.
    There were three areas that I wanted to highlight for you 
in regard to response, the Federal government's response to 
those fires. First of all, we have had some staffing issues in 
FSA offices where the workload increased dramatically. And 
recently, there has been approval for two additional positions 
at the FSA county office in Clark County and we are pleased 
with that, anxious for those positions to be filled, and 
appreciate the restructuring in order to meet the current 
demands for FSA services.
    Kind of three areas of concern. The Emergency Conservation 
Program. This generally is a way in which ranchers can be 
compensated for loss of fencing. And we had a fire previously 
in the adjoining county, Barber County, the so-called Anderson 
Creek Fire. It took a year for ranchers to actually be 
compensated for the loss of their fence. It was a year before 
the payments began. And here is a problem with the program that 
you would--I would welcome your help. There is no advanced 
payment for that disaster. You get your fence rebuilt and then 
you submit the bill.
    Here is something that strikes me as nearly impossible to 
handle is when you lose your cattle, you have lost your 
collateral. And how do you go to the bank and borrow money to 
build a fence when you have little or no collateral to backup 
that loan? And so this program in my view needs to be changed 
with your help in which it is like other disaster payments. It 
is a payment that occurs at the time of the disaster, the money 
then can be used to rebuild, in this case, the fence.
    We were able, with the help of Mr. Young, to get the 
commitment of USDA that the payments could occur over a period 
of time in stages. So you could fix part of your fence and 
submit the bill, and that is a step in the right direction. It 
is an improvement and we appreciate the flexibility that was 
demonstrated in that response, but the program does not work in 
a way it should for a disaster. And so I would encourage you to 
work with me and others to see if we cannot alter the way that 
program works.
    The second part, and I think we have been assured, at 
least, there is flexibility in regard to the specifications of 
the kind of fence. Kansas is also an oil and gas producing 
state, and so we have oilfield pipe. It is a way you can build 
a fence and it is much cheaper than buying new fencing. And 
many ranchers would take that option and we believe we have the 
approval of USDA to allow that to happen. We have received 
those assurances, but what I need from you is if there are 
issues that come up, we need your common sense, your Georgia 
background to say, ``This is not about the actual 
specifications. This is about whether you are building a good 
fence.''
    And I do not know a single rancher in Kansas who wants to 
build a fence that will not last generations. That is the kind 
of fence that was destroyed in the fire, was fence that had 
been there for 70, 80, 100 years. So I need your cooperation as 
those issues arise to step in and help us make certain that 
common sense prevails.
    And then finally, payment limitations under the Livestock 
Indemnity Program. This is where you might actually get 
compensated for your loss of cattle. And, again, we think the 
Kansas Livestock Association estimates that there is between 
4,000 and 8,000 head of cattle that died in this fire. The 
payment limitation is such that it is per organization, per 
business organization, farm organization. And I think farmers 
over time have figured out how to organize their farming 
operation as a result of the laws related to payment 
limitations.
    Ranchers have never thought about this. And so almost 
without exception every one of our livestock producers is 
limited by the payment limitation. And we need to make certain 
that there is a way in which brothers and fathers and sons and 
daughters who have nor organized their ranching operation in a 
way to satisfy payment limitations issues are not harmed. 
$125,000 payment limitation does not go very far with the loss 
of up to 8,000 cattle.
    So those are three areas I wanted to highlight for you. 
Some of what I am saying is complimentary. The other is a 
forewarning that we will be knocking at your door asking for 
your assistance, guidance, direction, and leadership in making 
certain that a terrible situation is handled as best we can 
with common sense and compassion.
    Secretary Perdue. Well, I hope that I would demonstrate to 
you and to the producers that are affected not only in Kansas, 
but across the country, common sense and compassion. Those are 
two virtues that I value very much. And I think, again, I will 
take your easiest one first and then address the other two.
    The fencing is just--was a silly kind of thing and I think 
that can be easily determined. The payment limitations on the 
Livestock Indemnity Program, I am not sure if those are 
statutory in the Farm Bill or if there is any flexibility 
there. I will get the answer to that question regarding that. I 
do understand certainly the business organization structure 
that you have talked about and many of the production 
agricultures have taken that step and your producers could do 
that easily.
    I think it would be a matter of how we determine what those 
limitations are in light of the fact that those are not legal 
separations. So we will--I will be happy to talk with you about 
what a real solution is on that.
    Certainly the reimbursement on the fencing on the Emergency 
Conservation Program (ECP), on those kind of things from a 
reimbursement standpoint, we know that fencing is very 
expensive. And you are right. Sometimes when you are wiped out 
you do not really have cash or collateral to go borrow to 
create that. So I will explore that as well. I appreciate 
Acting Secretary Young in giving the flexibility.
    And what I will commit to you, this USDA will implement all 
the flexibility in these kinds of programs and these sort of 
disaster places that we have under the statute. And if we do 
not feel like they are optimal from a statutory perspective we 
will inform you of that and ask you to correct that in the next 
Farm Bill.
    Senator Moran. And I commit to you that--I thank you for 
your flexibility and I commit to you that I will work with you 
to accomplish those goals.
    Secretary Perdue. Thank you.
    Senator Hoeven. I think the limitation on the Livestock 
Indemnity, I think that may be statutory. I am not sure, but I 
think it may be. Senator----
    Senator Moran. Do not take the options away from the 
Secretary in case he reaches a different conclusion.
    Senator Hoeven. Well, I will try to help you out however I 
can.
    Senator Udall.

                          STAFFING REDUCTIONS

    Senator Udall. Thank you so much, Mr. Chairman. Thank you, 
Secretary Perdue, for being here today. I appreciated sitting 
down to visit with you last week. I enjoyed hearing your 
perspective on the wildfire funding challenge the Forest 
Service is facing and look forward to working with you through 
the Interior Appropriations Subcommittee to address that and 
other issues important to the Forest Service.
    Shifting over now to cuts in staff at USDA, making a living 
in rural America gets harder and harder each year. The safety 
nets USDA offers are often integral to the success of small 
farms and ranches. The proposed staffing cuts and the 
President's fiscal year 2018 budget eliminates 5,200 positions. 
As I read it, the majority of the staffing cuts are in the 
field, not in D.C. These cuts will make it extremely difficult, 
if not impossible, for rural and frontier communities to 
successfully access USDA's programs at the Farm Service Agency, 
National Resources Conservation Service (NRCS), and Rural 
Development.
    How can we work together to avoid these cuts and support 
good customer service for USDA services across rural America 
where they need these agents the most?
    Secretary Perdue. Thank you, Senator. I think our challenge 
and our opportunity, as Senator Tester has said is to do more 
with less, not less with less. And that is really what I commit 
to you today is that we have got to find the right sized budget 
to make sure that we do the job. I am an outcome kind of person 
and believe in metrics of accountability, and we want to be 
judged by that, but we do have to have the resources to do 
that.
    So, whether it is 5,200 people or what is the right size, I 
think you may have heard the fact or I may have expressed to 
you that day when we met that as Governor of Georgia for 8 
years, I had not voluntarily, but of eight budgets presented to 
the General Assembly, five had less money than the year before. 
Those are those glorious high economic times of 2003 to 2011. I 
did not necessarily choose to have that, but we were a balanced 
budget state and managed to that.
    So I am going to take what you all, as this appropriation 
committee, recommend and with consultation we will help you all 
determine where we can give a little and where we need some and 
work toward making sure that those front line workers, which 
are the most important in any organization, are not the ones 
that are cut, certainly in those customer facing situations.
    Frankly, one of the reasons that I wanted to combine NRCS 
and FSA was to have a critical mass of people in the office. So 
many of these offices only had two people and if one was on 
vacation and one had a sick child or was sick, then nobody was 
there. So with a critical mass, I think, and everybody helping 
the customer, focused on the customer and their needs, 
irrespective of what they are, we can do better. So I am with 
you and we look forward to having a budget that will adequately 
address the issues that you are concerned about.

                           BUDGET REDUCTIONS

    Senator Udall. Thank you. Mr. Secretary, I understand you 
are here to defend the President's budget and I do not believe 
there is much support for the USDA budget request on this 
committee, especially the cuts to Rural Development, 
conservation programs, and research. In particular, I am 
extremely disheartened by the cuts to programs that enhance our 
water security. The Administration's budget proposal zeroes out 
funding for watersheds, the Watershed Rehabilitation Program, 
Water Bank Program, Small Watershed Rehabilitation Program, 
Emergency Watershed Protection Program, and conservation 
security.
    New Mexico is a water constrained state, as many of our 
western states are, and climate change is exacerbating the 
challenge faster than anywhere else across the nation. 
According to the last Water Use Census by the State of New 
Mexico, 78 percent plus of our water is used in agriculture. 
The state needs more investment in the programs slated to be 
cut by the proposed budget in order to make our agriculture 
producers more efficient while addressing New Mexico's water 
shortages.
    If this committee provides funds for Rural Development, 
conservation programs, and research, which we expect to do, 
will you commit to working with me and other members of this 
committee to implement these programs in New Mexico as Congress 
intended notwithstanding the President's budget request?
    Secretary Perdue. Senator, in New Mexico and the other 49 
states as well.
    Senator Udall. Thank you very much. I appreciate your 
service and look forward to visiting with you as we work 
through this process.
    Secretary Perdue. Thank you.
    Senator Hoeven. Senator Baldwin.

                       DAIRY PRICING WITH CANADA

    Senator Baldwin. Thank you, Mr. Chairman.
    Secretary Perdue, welcome. We had a chance to discuss a 
number of issues that--challenges, frankly, that face Wisconsin 
dairy farmers prior to your confirmation and actually even 
subsequent to your confirmation. While there were an array of 
issues that we discussed, I raised, I think, heightened 
concerns about the changes that our neighbors to the north, 
Canada, have made in their dairy pricing practices that are 
disrupting trading between our two countries. They are blocking 
access for U.S. product into Canada.
    This has had a major impact, as I have shared with you, on 
Wisconsin for the past year and has literally threatened the 
livelihoods of dozens of Wisconsin farmers. When the President 
was in Wisconsin recently, he promised that he would convince 
Canada to change their dairy pricing program. And now that you 
have had a chance to look into this matter as Secretary and 
have spoken to your Canadian counterparts, I am very, very 
eager to hear what the plan is to help Wisconsin dairy farmers 
suffering from this unfair pricing scheme that Canada has 
adopted?
    Secretary Perdue. Thank you, Senator. We unashamedly 
addressed this with Minister MacAulay, my counterpart in 
Canada, Monday--a week ago in Toronto. We were there and we had 
the beginning of bilateral discussions, but dairy was at the 
forefront of that. We indicated that we believe the Class 7 
designation that Canada had just installed was unfair and it 
had created a glut on the world market that we were not 
prepared to accept.
    I told him and have told everyone that it is not our 
intention to get involved in Canadian supply management. They 
have got a different dairy program than we do. That is their 
prerogative. It was not included in Canada, but it is also not 
fair for them to create another class of milk that allows their 
producers to overprice on a--to overproduce on a quota system 
and then blend the surplus milk off to below world prices on 
the world market. That affects not only the U.S., but other 
dairy exporting nations as well.
    That point is very clear out there. I think, again, these 
are exactly the kind of points with Canada and with sugar in 
Mexico that the President has talked about renegotiating 
National America Free Trade Agreement (NAFTA). And I can assure 
you from our perspective, those will be at the forefront of the 
issues that we discuss regarding NAFTA renegotiations.
    Senator Baldwin. Well, Mr. Secretary, it sounds like you 
pursued the issue pointing out exactly what I would hope. What 
did you hear in response and what is our plan? Because the 
farmers that I represent need solutions and they need them 
really fast.
    Secretary Perdue. Well, one of the things we have heard and 
the Canadians have tried to put a Band-aid on this by offering 
contracts to those 75 Wisconsin dairy farmers that had lost 
their contract. We consider that a Band-aid approach, not a 
solution approach, to that and we pressed them on that. But you 
have to remember, Senator, that these negotiations, this was 
our first date and it was--you know, we were not even holding 
hands yet.
    So we look forward to very candid discussions and it was my 
responsibility to lay out the concerns I had. We did that on 
dairy. We did that on some of the wheat grading issues that we 
have in the Northern Plains regarding our wheat being graded as 
feed grade wheat going in there as well, and then as the wine, 
where in some of their provinces they have U.S. wine back 
behind a cage where the Canadian wine is out where the 
consumers can get it. So there were several issues, but dairy 
was at the forefront of that.

                  RURAL DEVELOPMENT BUDGET REDUCTIONS

    Senator Baldwin. And I appreciate that, Mr. Secretary, and 
just urge you to continue to be very strenuous on this issue 
because it is so important to the farmers that you mentioned.
    I hope to get to a quick second question, which is the USDA 
Rural Development funding in the budget. Last year USDA Rural 
Development awarded $556 million for more than 8,700 projects 
in Wisconsin rural communities. And while I hear the 
Administration talk about helping rural communities being a 
shared goal, the budget that we have just seen suggests 
otherwise. And I am troubled by the elimination of water and 
wastewater treatment funding for our rural areas and 
communities. The elimination of funds that help with distance 
learning and telemedicine are vital in my state. And the 
zeroing out of broadband grants.
    Wisconsin communities need this funding. For example, the 
Village of Viola received $3.4 million from a USDA program that 
the budget cuts would--to replace--that the budget now cut to 
replace outdated water service lines that leaked 30 percent of 
the water they carried and exposed residents to contaminated 
water.
    So I am hoping, and I would like to hear from, if you would 
reconsider the decision to cut rural infrastructure funding and 
work with us to include really robust funding for those vital 
programs.
    Secretary Perdue. Senator, we have had a great discussion 
before you were able to join us about that and this committee 
has had my commitment that we are going to take the Rural 
Development funds that this committee recommends as well as the 
Congress recommends and use them as far as they will go as what 
Rural Development has been known for. I have a strong 
commitment to that and I think when we get the budget right 
sized you will see some efforts that way.

                             SUGAR INDUSTRY

    Senator Hoeven. Mr. Secretary, you mentioned sugar 
agreement. I would ask will you work with U.S. sugar producers 
to close any loopholes that threaten injury to our domestic 
sugar farmers.
    Secretary Perdue. I absolutely would, Senator, although I 
would disagree with the loophole comment that producers have 
latched onto. The agreement is the agreement. I think the 
agreement really needs enforcement. I think Secretary Wilbur 
Ross has negotiated a powerful agreement on behalf of U.S. 
sugar producers, both beet and cane, and I am very pleased with 
the agreement that he has had. The loophole referred to, I 
guess, deals with the polarity over additional sugar which the 
USDA gets to set. We are going to be very mindful of our sugar 
industry here, both in your area with sugar beets as well as 
the cane producers, and make sure that we do not harm our U.S. 
sugar industry.

                AGRICULTURE RISK COVERAGE PILOT PROGRAM

    Senator Hoeven. We are appreciative of Secretary Ross' 
efforts and appreciative of your efforts and we know that now 
it is enforcement by USDA. And that is very important and look 
forward to working with you on it.
    Agriculture Risk Coverage (ARC), we had included in the 
fiscal year 2017 Omnibus a pilot program on (ARC) that gives 
FSA more flexibility because sometimes there is not enough 
National Agricultural Statistics Service (NAS) data and then 
you look at the Risk Management Agency (RMA) data, but we are 
getting in some cases inconsistent determinations on contiguous 
counties that could, I think, be addressed simply by giving FSA 
some flexibility. And so we included funding and legislation in 
the fiscal year 2017 Omnibus that allows you to set up a pilot 
program this year to check that out. And we think that 
something could translate into the Farm Bill.
    So I would ask that you and your folks work to set that up 
and see what we can do to see if we can use that as a pilot to 
make an improvement in ARC for the Farm Bill next year.
    Secretary Perdue. I think that is necessary and we welcome 
the flexibility in that. Senator, as you know, out in Big Sky 
country, you all got some counties the size of Connecticut and 
there can be rain on one side and not on the other and 
different areas there and obviously you are closer. So we look 
forward to maybe negotiating and calculating a more regional 
approach to how we would do that. When you have a producer on 
one side of the county and the other part of the county is 50 
miles away, you are certainly closer to that neighbor across 
the county line than you are that way and the differential in 
payment is very hard to justify sometimes.
    So we are looking for a better way to do that. And I hope 
with consultation with you all we will be able to figure out a 
better way for the Farm Bill going forward rather than just a 
pilot project to understand how we can address those concerns.

                 RURAL ELECTRIC AND BROADBAND PROGRAMS

    Senator Hoeven. I appreciate that and that is why it is 
good to have a farmer at the head of USDA because you 
understand that. You have been asked about Rural Development a 
number of times. I would ask support for the Rural Electric 
Cooperative Program and for Rural Broadband. So any thoughts 
you have on those two?
    Secretary Perdue. Amen and amen.
    Senator Hoeven. That is the right answer.
    Secretary Perdue. I think we are going to be looking both 
at our rural electric utilities as well as our independent 
telephone systems. Rural broadband is something that Federal 
Communications Commission (FCC) Chairman, Ajit Pai, and I have 
talked about. It is a high priority. We know that it is no 
longer a luxury. It is really a requirement for the twenty-
first century. Our farmers are conducting precision 
agriculture. They need connectivity. Our kids need connectivity 
to stay in these rural towns because when they go to visit 
their city cousins and they play all these games on their 
phones and they want to do that at home and we want them to and 
enjoy a great wholesome life on the farm.
    Senator Hoeven. Well, with your grandkids, you know how 
that goes.
    Secretary Perdue. Absolutely.

                              SCHOOL MEALS

    Senator Hoeven. So school meals, done a lot of work with 
the school nutritionists. Great group. I mean, there is 
something like 8,000 of them in the National Association they 
have been in. And I just--it is such a great group, a fun 
group. They are out there every day providing nutritious meals 
into schools across the country.
    We need to make sure that they have flexibility and that we 
have common sense in the school lunch and breakfast programs so 
that they can do what they do every day to help and empower 
them. And that means giving them the necessary flexibility to 
serve not only healthy, nutritious meals, but meals that the 
school kids will eat, and then also to make their school 
budgets.
    And, of course, you will have a lot of influence in how 
this is administered and I would just ask for your support for 
those concepts that I just laid out.
    Secretary Perdue. I could not agree more. I am one of those 
people who trust our school nutrition professionals, probably 
more than anyone, to understand what it takes to feed a school 
kid a nutritious and a palatable meal. And I think the 
regulatory burden we have placed on them has been very, very 
difficult from a budget standpoint and from a regulatory 
accountability standpoint.
    So we are going to convene a large group of them and let 
them guide the policy regarding school nutrition. And I think 
that they can teach all of us how they can get the job done 
that we want, healthy, nutritious, but palatable school lunches 
while our kids are there.
    Senator Hoeven. No, that is it. Absolutely.
    Senator Merkley.
    Senator Merkley. Thank you, Mr. Chairman and Mr. Secretary. 
We are dashing about between different committee meetings 
today. There is so much going on.
    Secretary Perdue. I understand.

                         MCGOVERN-DOLE PROGRAM

    Senator Merkley. I wanted to ask you about the McGovern-
Dole Program.
    Secretary Perdue. Right.
    Senator Merkley. It is the world's premier school feeding 
program, about 24 countries we operate in, feeding 2 million 
school children a year. Often that one meal is the only meal 
they get and it increases school attendance dramatically. In 
the Somali region, it went from about 60 percent to about 100 
percent attendance because of that school meal.
    And the budget proposes eliminating the McGovern-Dole 
Program. Do you think the McGovern-Dole Program works and does 
eliminating this program align with your motto of do right and 
feed everyone?
    Secretary Perdue. Senator, I would say that I have agreed 
with Congress in their allocation of commodities, U.S. grown 
commodities for both our Food for Peace, our P.L. 480 program, 
as well as the McGovern-Dole that enables these children in 
foreign countries at schools to get nutrition. And I would 
trust you all to, again, look at that very closely in the 
budget. I think we have addressed some issues. I have admitted 
certainly on research and development, on rural development, on 
crop insurance, and I think on this area where I think the 
budget can benefit from some guidance.

                         FOOD FOR PEACE PROGRAM

    Senator Merkley. Thank you. And I will just skip over Food 
for Peace then since that was going to be my next question. And 
as I understand it, you are trusting the wisdom of the 
committee to find the right answer on that particular issue.
    Secretary Perdue. Right.
    Senator Hoeven. It is a pretty good answer.

               SINGLE-FAMILY HOUSING DIRECT LOAN PROGRAM

    Senator Merkley. That is a great answer. We love that. Can 
we apply that same philosophy to the Single-Family Housing 
Direct Loan Program?
    Secretary Perdue. Yes. I think again we may do direct 
loans. We also may increase our guaranteed loan policy 
regarding using underwriters in the community that know people. 
So I think you will see--I do not see the housing program 
diminished. I do not know whether it will be totally direct or 
more guaranteed program where we can leverage the Federal 
dollar in order to get more private sector money in there, but 
I do not expect the housing program to be diminished and I am 
hoping these 600 people or how many signed this or allowed 
their names to be used on this National Rural Housing Coalition 
that was mentioned by the press as 600 comments, will see at 
the end of the day that we mean well by them.

                    WATER AND WASTE DISPOSAL PROGRAM

    Senator Merkley. How about with the elimination in the 
budget, the proposed elimination, of the Water and Waste 
Disposal Program? Another topic for the wisdom of the 
committee?
    Secretary Perdue. Yes, sir. I think we discussed that maybe 
where you had to step out, but certainly water issues. Water is 
life and we understand that.
    Senator Merkley. I tell you, I hold a town hall in every 
county every year and before the town hall I meet with the 
local city commissioners, county commissioners and so forth. 
And there is hardly 1 of my 36 counties that does not raise a 
water issue because of the challenge in rural Oregon of having 
the funding to modernize or replace aging infrastructure or 
build new infrastructure for the opportunity to expand. So I 
think that is a very important thing.
    Secretary Perdue. I think one of the things that may have 
been underappreciated was the delivery system that USDA has 
through its Rural Development Program, over 400 outlets, to 
understand that. I know in Georgia we use the Community 
Development Block Grant very wisely in that. We use the water 
money through our Georgia Environmental Facilities Authority, 
but nonetheless, many of those communities still relied on the 
USDA for some of those grants and loans as well.
    The other thing I have not mentioned yet, Mr. Chairman and 
Ranking Member, is that the loan programs at USDA are run very 
wisely from a financial integrity perspective. I was very 
pleased with the default rate, better than commercial in many 
ways. And it demonstrates that we have had good wise decisions 
made out in the Rural Development Program.

                           CONSERVATION PLANS

    Senator Merkley. So I am just about out of time, but in the 
last 40 seconds, the Natural Resources Conservation Service is 
cut by $260 million, but that would profoundly affect the 
number of conservation plans it can put into place by the USDA. 
Should we sustain the funding for that program and keep farmers 
able to participate in this program?
    Secretary Perdue. Certainly. You are aware obviously of the 
Environmental Quality Incentives Programs (EQIP) and how well 
that in fact it has been oversubscribed every year over those 
kind of things. As I indicated earlier, I think farmers are our 
best stewards of the land. If we give them some technical 
guidance and some incentive money to help them do the right 
thing on their farms, I think that is a great investment.
    Senator Merkley. Thank you, Mr. Secretary.
    Senator Hoeven. Senator Cochran.

                         AGRICULTURAL RESEARCH

    Senator Cochran. Mr. Chairman. Mr. Secretary, it was a 
pleasure to have you in Mississippi last week. The timing was 
perfect. You were the keynote speaker for our 82nd annual 
meeting of the Delta Council, rich in tradition, tremendous 
influence for good and improvement of standard of life, 
standard of living, agriculture activities. During the trip I 
know you had the opportunity to see firsthand USDA'S impressive 
research activities, Agriculture Research Service Regional 
Office. It is headquartered in Stoneville, Mississippi and it 
covers the lower Mississippi River Valley.
    Given the growing demand for food and the need to double 
U.S. agriculture production by the year 2050, how important is 
it for Congress to invest in agriculture? Should we be 
providing funding for USDA research activities above the 
President's budget if we know that those funds are going to be 
used for good purposes?
    Secretary Perdue. Senator, I want to tell you 
unequivocally, I have not gotten over the fact that you moved 
that regional office from Athens, Georgia to Stoneville, 
Mississippi.
    Senator Cochran. Maybe our timing was a little off.
    Secretary Perdue. I indicated earlier it was.
    Senator Hoeven. Powerful appropriations chairman.
    Secretary Perdue. It was a very impressive facility. And 
once again, the seamless collaboration I experienced there, I 
think is the foundation of the productivity of American 
agriculture. I think we need more, not less and wherever we see 
collaboration like that, I think it needs to be rewarded. The 
portfolio that was included there from your research in 
aquaculture, catfish production, and to cotton to corn to 
insecticides to pesticides to cover crops, it was very, very 
impressive.
    I think the American public, if they could each one, one by 
one, visit the Stoneville facility would say, ``We need to do 
more of this, not less.'' So I do think--I am not being--I am 
not pandering this morning when I say that I honestly believe 
that is the essence of American productivity today. It has gone 
on, whether it is Senator Tester's research in grazing in his 
area or other places that is really the foundation of our 
American productivity. And I think as we see other nations 
ascending, we are wise not to reduce that, but to enhance that.
    Senator Cochran. Well, thank you very much. Thank you, Mr. 
Chairman.

                             BRAZILIAN BEEF

    Senator Hoeven. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman, and I want to 
thank you, Mr. Secretary when Senator Baldwin was bringing up 
her dairy issues for your work there and also on wheat grading 
because it does not make any sense to raise the best wheat in 
the world and it gets graded as feed going north. So I 
appreciate that.
    The USDA last August lifted a ban on Brazilian meat. I did 
not like that, had a difference of discussion with your 
predecessor about that. It previously was banned because of 
Foot and Mouth Disease (FMD) and quite frankly, USDA chose to 
open that market up again.
    In March, as you well know, investigators in Brazil shed 
light on a scandal involving meat packing plants paying off 
inspectors, selling expired meat, meat that was treated with 
acid mixed with good meat, sold to the marketplace. The 
European Union and China banned Brazil. I should not say 
banned. They halted the imports. The United States did not. We 
do not have country of origin labeling in this country. We had 
a USDA seal and what happens when we bring in tainted meat from 
somewhere else, it gets stamped with that seal unless it is 
rejected, but this was not.
    And being a country, and this is not to brag. This is 
fact--that raises the best meat in the world. And I know that 
because I eat a lot of it. It is ridiculous that we are 
allowing in tainted meat and really raising heck with our 
markets and, quite frankly, not doing right by the consumers or 
the producers.
    So I know you were just new to the slot. I mean, you were 
just freshly minted, so to speak, in this position. Wouldn't it 
have been wise to just kind of hit the pause button on this 
stuff and say, ``Look, until we get to the bottom of this and 
find out what is really going on, we are going to halt that 
import for a while?''
    Secretary Perdue. Well, Senator, I think my Food Safety 
Inspection Service (FSIS) people have assured me that the 
plants you referred to in Brazil were none of those exporting 
and we did go to a 100 percent inspection. You probably are 
aware that these programs are guided by the World Trade 
Organization (WTO) and bilateral trade agreements that make it 
rather difficult to do that, although, as you know, we have 
been the victims of that, getting back into China after 14 
years over one Canadian case of Bovine Spongiform 
Encephalopathy (BSE).
    Senator Tester. Yeah. That is right.
    Secretary Perdue. Also, avian influenza in China. When you 
have it in one small area that is confined, then our whole 
nation gets out of there. But I do not think we can preach fair 
and free trade if we do not practice that. And I hear your 
concerns. I had concerns as well until I talked to our chief of 
our Food Safety and Inspection Service that assured me that we 
were going 100 percent and that I think we have programs in 
place that once that meat comes in here it is not allowed to be 
re-exported with a USDA stamp.
    Senator Tester. So you are confident that it is indeed 100 
percent, the re-inspections that are taking place?
    Secretary Perdue. I have to rely on my people. FSIS has a 
great reputation, as you know, worldwide, and I am relying on 
them to do what they tell me they are doing.
    Senator Tester. Okay. And I would just tell you that when 
it comes to food, it is pretty important. I mean, I am telling 
you. And if we are putting bad stuff in our bodies from some 
other countries, I do not know why that cannot be that is not 
free trade. That is putting crap in our bodies and it is really 
impacting our consumers and our producers. And so I know you 
know that. I just want to say I think in this particular case, 
especially with the past history with Brazil, I think a more 
measured approach would have probably been better.
    Secretary Perdue. I understand. I think--I want to 
reiterate that we take food safety as zero tolerance.

                         CHAIR BEEF TRADE DEAL

    Senator Tester. Okay. Good. First of all, congratulations 
on the China beef deal. I think to open up a market to 1.3 
billion people is no small effort. And you talked about some of 
the reasons that it was not there before, and I appreciate your 
great work as well as the others that you have already 
mentioned.
    One of the things that I read in the agreement was 
traceability. It is a big deal. Evidently the Chinese born, 
raised, slaughtered in the U.S. could have been imported from 
Canada or Mexico, but subsequently raised and slaughtered in 
the U.S. These are reasonably stringent audit trail 
requirements. And do you think you can meet those?
    Secretary Perdue. I do believe. We had great consultation 
with the beef industry, from producers to packers. Actually, 
the traceability has to do with maybe one of your previous 
questions. China wanted to make sure they were not importing 
Mexican or Canadian beef in that. They wanted U.S. beef.
    Senator Tester. Got you.
    Secretary Perdue. Our producers and packers said, yes, it 
is probably going to be a little more expensive. It is going to 
be a little more onerous.
    Senator Tester. But they can do it.
    Secretary Perdue. But we are willing to do it.
    Senator Tester. So a few years ago we were on the cusp of 
having country of origin labeling. And one of the things the 
packers said they could not do is they could not trace that 
product and keep that audit trail separate. I thought it was 
baloney then and this kind of proves baloney now. Do you have 
any comments on that?
    Secretary Perdue. I think it is hamburger, Senator.
    Senator Tester. Okay. Mixed beef. But the truth is that we 
were told that it just flat could not be done and now we are 
told it can be done, which I believe--I mean, I have dealt 
personally with enough audit trails that we can audit trail 
anything.
    Secretary Perdue. Right.
    Senator Tester. And show you what cow it came out of in the 
end.
    Secretary Perdue. I think it has to do with 1.3 hungry 
mouths.
    Senator Tester. Okay.
    Secretary Perdue. 1.3 billion hungry mouths.
    Senator Tester. All right. Well, thank you very much and 
hopefully we can use what we have learned in this agreement, 
which I think is a good one, to expand to others and even 
domestic productions.
    Secretary Perdue. And I think, once again, we are not done 
here. I think when we demonstrate what we can do and the 
quality of U.S. beef coming in, I am absolutely convinced when 
those Chinese get a hold of U.S. beef, they are going to want 
more. They are going to trust it.
    Senator Tester. There is no doubt about it and that is why 
we should be extremely proud of our U.S. producers and not let 
that tainted--potentially tainted stuff from Brazil come in. 
Thank you.
    Senator Hoeven. He circled all the way around to the front 
end there, didn't he? But that is a legitimate concern, 
absolutely.
    Senator Moran.

                         MCGOVERN-DOLE PROGRAM

    Senator Moran. Chairman, thank you very much. Senator 
Merkley, in your absence, I congratulated Senator Hoeven for 
this chairmanship and thanked you for the previous service. You 
were kind in your comments to me and I wanted to make sure that 
you knew I was reciprocating not just out of necessity, but out 
of genuine gratitude for the way we worked together.
    Mr. Secretary, in regard to Senator Merkley, he talked 
about a couple of our most important food programs, Food for 
Peace and McGovern-Dole. I will not pile on too much more, but 
I hold those programs in high regard, believe that we have a 
moral opportunity to help feed the world. I believe it is 
advantageous to American producers to do so, so there is also 
that benefit. I have encouraged USDA and USAID to increase its 
use of grains, particularly Kansas wheat, in its programs and 
would reiterate that issue with you.
    What I wanted to raise is a budget issue. You indicate 
that--your budget indicates, the Administration's budget 
indicates that McGovern-Dole is not being effectively 
implemented and lacks adequate oversight by USDA and then 
zeroes out McGovern-Dole funding.
    I do not know whether there is an issue with 
administration, but if there is, that is your responsibility to 
figure out and address. I assume you would agree with me that 
it is better to fix the problems with oversight and effective 
implementation. That is not a reason to eliminate the program. 
It is a reason to fix the problems, if there are any, 
associated with the program. That make sense to you?
    Secretary Perdue. It does make sense. You may be aware that 
we do have some question and investigation going into one of 
the areas of where this program was utilized, but I think that 
is the oversight responsibility of the USDA and we take that 
very seriously. I have asked the probing questions about how is 
this administered, are we making sure. I think we are dealing 
with maybe a couple of rogue agents who have used the--
misappropriated the resources there and we are on it.

                         FOREIGN TRADE PROGRAMS

    Senator Moran. Very good. In Kansas, we call it the Dole-
McGovern Food Program. A lot of conversation about beef to 
China. Again, thank you for that effort. It is a couple of 
things that I wanted to raise in regard to trade.
    My understanding is you have been active in your 
conversations, advocacy in regard to trade within the 
Administration. Mexico and Canada are important customers of 
Kansans in agriculture. We are an export state not only in 
agriculture, but in what we manufacture. One of the things the 
budget does is zero the funding for Market Access Program and 
the Foreign Market Development Program, again at a time in 
which agriculture commodity prices are what they are.
    Sometimes in Kansas and in the country we have been able to 
get by in tough times with low prices when we have significant 
production, see if you can produce your way to a level of 
revenue that allows you to survive, but that is not the case 
today in Kansas and many places in the country. And so we need 
every market we can acquire. We need to acquire new ones. We 
need to maintain what we have. And I encourage you. I thank you 
for your advocacy for Mexico and Canada and others.
    Again, I would suggest to you that this budget ought to 
include the funding that it normally includes, but particularly 
at this time in regard to the Market Access Program (MAP) and 
to the Foreign Market Development Program. And perhaps this is 
one that goes in Senator Merkley's list of the wisdom of the 
committee. But I would--if you want to respond to that, you are 
welcome to.
    Secretary Perdue. I would respond. I have used skin in the 
game before here and I like the leverage that financial 
collaboration can bring. This is one program that has 
collaboration with the commodity groups. They are investing 
sometimes one to one or two to one over these programs. And I 
think one group told me seven to one for their programs over 
the Market Access Program.
    So, once again, my commitment to the producers of America, 
if they grow it, we will sell it and we need all the--we need 
an Under Secretary for Trade, but we need all these market 
programs that can help us persuade people around the world to 
buy it.

                         CONSERVATION PROGRAMS

    Senator Moran. Let me turn to conservation, similar kind of 
circumstances. Conservation Technical Assistance is reduced by 
almost $100 million in the Administration's budget. That 
technical assistance is hugely important in voluntary 
conservation. I think that is the focus. You mentioned the 
Environmental Quality Incentives Program (EQIP) earlier, the 
opportunity for landowners, farmers, and ranchers to 
voluntarily enter into programs and conduct their farming and 
ranching operations in ways that enhance the environmental 
quality of the land, air, and water is a direction that I think 
is important for us to continue to pursue.
    The budget also eliminates the Conservation Stewardship 
Program, CSP, and the Regional Conservation Partnership 
Program. When it comes time for Farm Bill reauthorization, will 
you advocate for the elimination of those programs or is this 
just a request in the Administration, by the Administration, 
for no money?
    Secretary Perdue. I think the heart of the farmer is for 
conservation stewardship and many times they want to do, but 
they do not know exactly how to do. And that is what these 
technical helpers do with the NRCS. I think, again, aligning 
them with FSA will make them even more productive in addressing 
the needs programmatically of the farmers who come in. So I 
think you will find a--once again, a strong advocate for 
conservation programs here in this Secretary.

                        RURAL BROADBAND PROGRAM

    Senator Moran. Mr. Chairman, would you rule me out of order 
if I go one more question? Thank you very much.
    Let me--you mentioned Ajit Pai and the Federal 
Communications Commission (FCC). And I wanted to highlight a 
conversation I have had with your predecessor and folks at USDA 
for a long period of time. A number of years ago, three or 
four, the FCC, the Federal Communications Commission, made a 
decision in regard to how our rural electric--I am sorry--our 
rural telephone companies could be reimbursed from the 
Universal Service Fund.
    What I have tried to get to occur over a long period of 
time is a conversation between the FCC and Rural Utilities 
Services (RUS). And really what I was looking for is for RUS to 
make its needs known to the FCC. I think the FCC was operating 
in its vacuum. And the consequence was the decisions made in 
the FCC order reduced the financial viability of many of our 
rural telephone companies. And that financial ability was 
reduced in a way that would make it problematic, if not 
impossible, for the rural telephone company to repay their RUS 
loan.
    So it is one of those things that can drive you crazy if 
you let it, which is an agency making a decision over here 
without knowing about perhaps the unintended consequences to 
another agency. And the portfolio at RUS is a significant 
amount of money and I would encourage you to make sure that 
your RUS administrator, when you have one, is an advocate for 
the circumstances that allow those phone companies to be able 
to repay their obligations to RUS. It is not a problem that 
Congress or the American taxpayer want to have as a result of 
lack of revenue from an FCC decision.
    I have Ajit Pai, Commissioner Pai, Chairman Pai is a 
Kansan. I know him well. I am pleased to know that you are 
working with him and I think this is an area in which the 
Department of Agriculture, Rural Development in particular, but 
the FCC can work hand in hand, use the fact that Ajit is from 
Parsons, Kansas, a small Kansas community, to your advantage 
and make sure that good things happen in rural America by 
cooperating and advocating on behalf of the folks that we 
represent.
    Secretary Perdue. Thank you, Senator.
    Interestingly enough, Anne Hazlett and I were just talking 
yesterday about this very issue of rural broadband and using 
our rural utilities, both independent telephone companies and 
co-ops and rural electric co-ops for broadband. I was very 
pleased and frankly pleasantly surprised with the Chairman of 
FCC's interest in rural broadband. I think you will find a 
different policy there regarding our rural utility services and 
we hope to explore that to the fullest.
    Senator Moran. The way you answered that question suggests 
that I was somewhat critical of Ajit Pai. His parents would not 
like to hear that from me and that was my intention at all.
    Secretary Perdue. Oh, I----
    Senator Moran. We are delighted to have Ajit Pai as the 
Chairman of the FCC.
    Secretary Perdue. If I answered that way, I did not mean 
that. I am very impressed and very pleased with his interest in 
rural broadband.
    Senator Moran. No, I knew you were. I just wanted to make 
sure his parents knew I was. And it is important that the 
Universal Service Fund and RUS, those are compatible. They each 
serve a mission. RUS is important beyond the Universal Service 
Fund. We need USDA to advocate in that manner. Thank you, Mr. 
Secretary.
    Senator Hoeven. Mr. Ajit Pai is a very impressive 
individual. I will add to that. He has been very responsive and 
very impressive.
    I guess I would turn to Ranking Member. Any final comments 
before we wrap?

                       COUNTRY OF ORIGIN LABELING

    Senator Merkley. Well, I just want to follow up about 
Senator Tester's comment about country of origin labeling. I 
would like to live in a nation where if I want to choose to buy 
American grown beef or pork at the store that I can see it 
labeled and I can buy it. And so I am very disturbed that we 
were not able to work out a system to enable us to keep that 
country of origin labeling. And I hope that the experience 
regarding the export of American beef to China will give us 
some practices that we might be able to go back and fix that 
and restore that opportunity to all Americans who want to 
support our own local ranchers.
    Secretary Perdue. I think you are aware, Senator, that was 
a WTO adjudication and we simply had to comply. And I think 
again from a statutorily perspective, if Congress wants to 
address that, I stand by ready to implement.
    Senator Merkley. Well, there was an adjudication based on 
the fact that our meat packers could not find a way to 
basically do it at the same cost and therefore not to create a 
trade barrier. But maybe what the lesson we are going to learn 
with China, maybe we can find that method and apply it.
    Senator Hoeven. Mr. Secretary, again, I want to thank you 
for being here. I would just check to see if you have any final 
comments or from Dr. Johansson or Mr. Young before close. 
Anything else that you want to put of record?
    Secretary Perdue. I have got one final comment and I would 
offer them if they would like to speak at all. Hearing none.
    You all have been very kind in expressing your confidence 
and I want you to know that I take that very seriously. And I 
am an outcome based kind of guy willing to be held accountable. 
If you see us--you asked, Senator Merkley, earlier about 
inquiries and oversight.
    If you see things that you disagree with, obviously I 
expect us to have a discussion about that or provide reasons 
for decisions that are made. But it has been a very friendly 
conversation and I respect your role in that. Having been in 
the Legislative Branch and the Executive Branch, I fully 
understand our system of government and I want you all to know 
I have got confidence in the wisdom of the committee.
    Senator Hoeven. Thank you, Mr. Secretary, and we very much 
look forward to working with you.
    Secretary Perdue. Thank you. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Hoeven. For members of the subcommittee, any 
questions that you would like to submit for the hearing record 
should be turned in to subcommittee staff within one week, 
which is Tuesday, June 20th. We would appreciate it then if we 
could have responses back from USDA within four weeks of that 
time for any written questions.
             Questions Submitted by Senator Mitch McConnell
    Question. On August 12, 2016, the United States Department of 
Agriculture (USDA), the Drug Enforcement Agency, and the Food and Drug 
Administration (FDA) released a joint statement of principles (Federal 
Register; Vol. 81: no. 156) on industrial hemp research and production 
as established under section 7606 of the Agricultural Act of 2014 
(Public Law 113-79). In this joint statement, the Federal agencies 
state that ``institutions of higher education and other participants 
authorized to carry out agricultural pilot programs under section 7606 
may be able to participate in USDA research or other programs to the 
extent otherwise eligible for participation in those programs.'' What 
has the Department done beyond issuing this joint statement to 
disseminate information and work with stakeholders on Federal funding 
opportunities for which industrial hemp pilot program participants may 
be eligible?
    Answer. The National Institute of Food and Agriculture (NIFA) 
responds regularly to industry groups and university requests for 
information on NIFA programs that could support research and 
development to help commercialize industrial hemp as a crop. Industrial 
hemp is one among many crops that can be used to produce an array of 
value-added plant products, and as such, can be supported by NIFA 
programs.
                              horsesoring
    Question. On July 26, 2016, the Animal and Plant Health Inspection 
Service at USDA proposed a rule entitled, ``Horse Protection: Licensing 
of Designated Qualified Persons and Other Amendments'' (Federal 
Register; Vol. 81: no. 143). Although the comment period for this 
proposed regulation closed on October 26, 2016, no final regulation has 
been issued. This proposed rule seeks to implement legislative 
proposals that have not been considered or adopted by the Congress and 
would have devastating impacts on the walking horse industry in 
Kentucky. It is my understanding that APHIS is following the directives 
from Congress included in the fiscal year 2016 and 2017 Appropriations 
Acts by communicating with stakeholders in the walking horse industry 
and working to bring consistency and objectivity to the inspection 
methodology in a way that protects horses. Will the Department, through 
APHIS, continue to work with stakeholders and equine veterinarians to 
ensure that objective inspections are implemented and that more 
consistency is brought to the inspection protocols and methodology? 
Secondly, with respect to the proposed rule, will you work with 
stakeholders to ensure that any final regulation does not exceed the 
powers granted to the Department by Congress under the Horse Protection 
Act?
    Answer. Yes, we will continue to work with stakeholders and equine 
veterinarians to ensure inspection protocols and the methodology used 
are more consistent. If we decide to pursue final rulemaking, we will 
thoroughly consider the input provided by stakeholders in response to 
the proposed rule to ensure that the powers granted do not exceed what 
was provided under the Horse Protection Act.
    Question. The President's Budget also includes a legislative 
proposal to eliminate Regional Conservation Partnership Program--which 
is a new, comprehensive and flexible program... that uses partnerships 
to stretch and multiply conservation investments and reach conservation 
goals on a regional or watershed scale. The National Resource 
Conservation Service in New Mexico--partnering with the New Mexico 
Conservation Districts--have competed and secured critical funding to 
revitalize three projects in New Mexico the Canadian River, North 
Central New Mexico and, an issue of personal interest to me, Acequia 
Revitalization. These partnerships are bringing new farmers into the 
conservation program and reducing overhead costs for USDA. And we need 
to protect and improve this program, not eliminate it.
    If this Committee provides funds for RCPP, will you commit to 
working with me to implement these programs in New Mexico as Congress 
intended, notwithstanding the President's budget request to eliminate 
the program?''
    Answer. If Congress provides funds for the Regional Conservation 
Partnership Program (RCPP), we will commit to implementing programs as 
Congress intended in New Mexico and other States.
    Question. Secretary Perdue, I am very concerned that the Rural 
Development program is being cut in this proposed budget, to the 
detriment of people in New Mexico. Over the past decade, New Mexico has 
received $1.7 billion dollars in Rural Development loans and grants. 
These loans and grants build water systems, provide housing, install 
renewable energy and connect rural areas with broadband. And much of 
this assistance is not just in rural areas, but frontier areas as well. 
New Mexico has some that are the most economically distressed in the 
country.
    What is your vision for revitalizing rural America? And how do you 
think that can be done with these drastic budget cuts proposed in the 
President's Budget--in particular to programs like Rural Development?
    Answer. The increased emphasis on Rural Development at USDA will 
help in providing to Rural America the tools necessary to improve its 
economy and to remedy some of the economic difficulties facing rural 
communities. Rural America has serious needs and this Administration 
recognizes the need for action, which will be discussed through the 
Agriculture and Rural Prosperity Task Force. The Task Force will focus 
its efforts on Rural Development activities, including access to 
broadband, community infrastructure, community mental and physical 
health, workforce training and veterans' employment, agricultural 
research, regulatory reform, improved access to capital, and increased 
local control of decisionmaking.
    Question. The President's budget cuts $193 billion dollars from the 
Supplemental Nutritional Assistance Program over the next decade--a 25 
percent cut--including shifting $116 billion dollars of that to funding 
requirement to states. For states like New Mexico with a budget crisis, 
it would be impossible for them to maintain that safety net. In 
addition more than one out of every five New Mexicans counts on the 
food stamps to assure they don't go to bed hungry. New Mexico has the 
third highest percentage of recipients in the nation after D.C. and 
Mississippi. This change would abandon the national commitment to 
provide low-income families, seniors, and people with disabilities with 
a basic diet regardless of where they live. Instead, states' ability to 
contribute to the cost of SNAP could drive the level of benefits 
available to poor households in that state. This is a radical departure 
from SNAP's basic design--which has been proven to reduce hunger and 
poverty.
    Secretary, do agree that making sure Americans are not going hungry 
should be a core tenant of our Federal social safety net?
    Answer. Yes, I agree making sure Americans are not going hungry is 
key to our Federal social safety net. That is why, our motto at the 
USDA is to ``Do right and feed everyone.'' However, I also believe we 
have the responsibility to ensure that the program operates with 
efficiency and effectiveness and delivers on that purpose. The package 
of proposals in the fiscal year 2018 President's Budget will help 
target SNAP benefits to the neediest households while ensuring able-
bodied adults are expected to work.
    Question. Do you believe transferring this responsibility to the 
states is a not financially sustainable?
    Answer. I am willing to work with Congress on meeting the needs of 
program participants in a fiscally responsible manner, while supporting 
State flexibilities.
    Question. Will you commit to working with Congress to assure that 
sufficient funding is provided at the Federal level for food stamps?
    Answer. Yes. I look forward to working with Congress as we go 
forward in budget proceedings, to assure sufficient funding is provided 
to appropriately and adequately serve program participants.
    Question. Secretary Perdue--Yesterday Secretary Zinke announced his 
interim 45-day review of the Bears Ears National Monument. That review 
states that:

        ``In consultation with the Secretary of Agriculture, the 
        Secretary of the Interior recommends that the existing boundary 
        of the Bears Ears National Monument be modified to be 
        consistent with the intent of the [Antiquities] Act.''

    Simply put, you and Secretary Zinke recommend removing protections 
for Bears Ears.
    The Forest Service is under your jurisdiction. What was your role 
in this recommendation?
    Answer. USDA personnel worked in conjunction with the Department of 
Interior (DOI) to develop information necessary to make the 
recommendation provided to the Administration.
    Question. How did Secretary Zinke consult with you? And why were 
you not a co-signatory on this document--which includes recommendations 
about hundreds of thousands of acres of Forest Service lands?
    Answer. The USDA Forest Service provided input and was in contact 
with DOI counterparts throughout the Monument review process. The 
Administration designated the DOI as the lead Department in the 
Monument review. That said, the Secretary of the Interior was the 
appropriate signatory of the recommendation document.
    Question. Have you ever visited the Forest Service lands in 
question?
    Answer. No, I have never visited the lands in question as the 
Secretary of Agriculture. However, the Forest Service personnel have a 
deep understanding and working knowledge of the lands in question and 
have established a comprehensive analysis commensurate with the 
recommendations made by the Department.
    Question. Have you or your senior staff consulted with the tribal 
communities impacted by these lands in this report?
    Answer. Forest Service officials participated in the scheduled 
listening sessions across the country as well as the Bears Ears 
National Monument specific meeting with Interior Secretary Zinke and 
the Bears Ears Inter-Tribal Coalition.
    Question. How do you plan to maintain the existing co-management of 
Federal lands?
    Answer. The Forest Service and Bureau of Land Management have 
experience at co-management of Federal lands in other parts of the 
country. The framework for the management of this particular site would 
be through the establishment of a Monument Management Plan.
    Question. Finally, do you believe the President has the legal 
authority under the Antiquities Act, FLPMA and NFMA to rescind national 
monument protections?
    Answer. I feel that the Administration's position on the statutory 
authorities and scope and scale of decisionmaking within those 
authorities is best provided by the lead Department of the review.
    Question. The 502 and 504 programs have financed the construction 
and repair, as well as ensured the affordability of millions of homes 
for low and moderate income rural Americans across the country. It does 
this by offering homeowners access to high quality loans who often have 
little to no other options for mortgage financing.
    Given the importance of 502 and 504 lending in addressing 
underserved, rural populations, why has the President proposed to 
completely defund them?
    Answer. Keeping in line with the Administration's priority to 
reduce the Federal deficit and create a balanced budget, USDA had to 
make some tough funding decisions. USDA looks forward to working with 
the Subcommittee more to ensure that the unique needs of rural 
communities are met. If it is determined that USDA should continue to 
administer this program, I will work to ensure that we do so in the 
most effective and efficient manner possible.
                                 ______
                                 
            Questions Submitted by Senator Susan M. Collins
                bioenergy program for advanced biofuels
    Question. The forest products industry is a vital part of the Maine 
economy. Wood pellet manufacturers in Maine, however, continue to have 
concerns with an interim rule that the Department has issued for the 
Bioenergy Program for Advanced Biofuels. Wood pellets, recognized by 
USDA as ``advanced biofuels,'' represent a very efficient end use for 
material that is otherwise a waste byproduct. I am told that this 
program is being implemented in a way that severely disadvantages solid 
based advanced biofuels, including wood pellets used in heating 
applications. USDA has imposed deep discounts on the payments to solid 
biofuel producers and an overall payment cap on companies in this 
sector, which starkly contrasts with the payments being made to liquid 
advanced biofuel producers used in the transportation sector. It seems 
that this program should be implemented in a way that is fuel and 
technology neutral. Will you work to bring fairness and equity to the 
administration of this program for all producers of qualified advanced 
biofuels?
    Answer. Creating and expanding economic opportunities in rural 
America is a primary concern for me as Secretary. As a result of the 
elevation of the Rural Development mission area to report directly to 
me and through the work of the Agriculture and Rural Prosperity Task 
Force of which I am the Chair, I expect that USDA to further create 
opportunities. In our review of the Department's energy-related 
programs, we will assess the issue you identified above to determine 
whether a more fair approach to delivering the program is needed.
                           rural development
    Question. I am concerned that the President's budget request 
proposes to eliminate several programs run through the Department of 
Agriculture's Rural Development agency that assist rural communities in 
maintaining and improving critical municipal water infrastructure. This 
includes the Rural Utilities Service's (RUS) Rural Water Circuit Rider 
Program, which provides technical assistance to rural water systems 
that are experiencing operation, financial, and/or managerial issues, 
and is widely used in my home state of Maine. The President's budget 
also proposes to eliminate the RUS's Water and Waste Disposal Program, 
which has been used to provide financing for rural communities to 
establish, expand, or modernize water treatment and waste disposal 
facilities. What do you view as the proper role for the Federal 
government in assisting small rural communities with water 
infrastructure requirements to comply with Clean Water and Safe 
Drinking Water requirements? Can you describe current efforts by the 
Department to make sure water infrastructure assistance in rural areas 
is adequate?
    Answer. The Federal Government plays a very critical role by 
providing technical support and financing so that rural communities may 
have safe drinking water and adequate water disposal facilities. Rural 
communities can be served by private sector financing or other Federal 
investments in rural water infrastructure, such as the Environmental 
Protection Agency's State Revolving Funds. USDA looks forward to 
working with the Subcommittee more to ensure that the unique needs of 
rural communities are met. If it is determined that USDA should 
continue to administer this program and funding is provided, I will 
administer the program and ensure that it is run in the most effective 
and efficient manner possible.
    Question. USDA Rural Development's rural housing programs, such as 
the multi-family subsidized housing program, single-family home loans, 
remodeling funds, and rental assistance, have been vital in my state. 
In Aroostook County, Maine's northernmost region, a flood in 2008 left 
some families homeless and in need of Federal assistance. The 
President's budget request includes $1.35 billion for multi-family 
housing program rental assistance payments to fund all contract 
renewals as well as $20 million for the multi-family housing voucher 
program, while proposing to eliminate programs such as the multi-family 
housing direct loan program and the multi-family housing preservation 
and revitalization programs. Given the overall funding requested for 
these programs, what steps is the Department taking to ensure rural 
families that rely on Federal housing assistance can continue to do so?
    Answer. Rural Development (RD) will continue to leverage the 
funding that is provided to ensure that low-income families receive the 
support they need. The fiscal year 2018 President's Budget includes 
funding for the Multifamily Guaranteed program, which can be used to 
rehabilitate aging multifamily housing properties and maintain low rent 
prices for tenants. RD continues to promote public-private partnerships 
to further assist rural America and stimulate the economy. 
Additionally, we recently launched a pilot program to incentivize non-
profit organizations to acquire the multifamily housing properties to 
continue providing affordable housing in the rural areas.
                     land-grant university research
    Question. The land-grant university system helps ensure integration 
of experiment station science with the educational missions of 
universities. Matching Federal funds with state funds increases 
capacity and strengthens the long-term commitment of states to research 
and development. Local input from advisory and constituency groups 
informs decisionmaking on research programs. In Maine, research is 
focused on the natural resource areas that have long been the backbone 
of Maine's economy agriculture and food, forestry and wood products, 
marine fisheries and aquaculture, wildlife, and tourism. This research 
uses cutting-edge tools to address current challenges, including fuel 
innovation, pest-management and disease treatment, value-added 
products, and nutrition improvements. I have heard concerns, however, 
regarding a backlog of deferred maintenance at land-grant university 
facilities. Infrastructure improvements would help modernize research 
facilities and increase competitiveness. Do you see a role for the 
Department to partner with land-grant universities to help address 
these infrastructure needs?
    Answer. Yes, currently we provide support to the 1890 land-grant 
institutions for the acquisition and improvement of agricultural and 
food sciences facilities and equipment.
                                 ______
                                 
                Questions Submitted by Senator Roy Blunt
                            research funding
    Question. As you mentioned in your testimony, growing global food 
demand will mean that we have to double food production by 2050, or 
just one working lifetime. America has historically been the 
breadbasket of the world and American producers stand ready to meet 
this challenge. One of the key reasons that American producers have 
filled this role is that we have lead the world in Agricultural 
research and innovation. Much of this innovation has been borne out of 
research performed at the USDA's Agricultural Research Service (ARS) or 
at leading institutions of higher education through the National 
Institute of Food and Agriculture (NIFA).
    Unfortunately, USDA's fiscal year 2018 budget seems to take a step 
back is supporting research by calling for cuts to NIFA and ARS 
including a proposal to close 17 ARS research stations.
    Do you stand by the proposed cuts to research funding included in 
your budget request?
    Answer. The fiscal year 2018 budget was finalized before my arrival 
at USDA, but I agree that research is the basis of our agricultural 
productivity today. I look forward to working together to right-size 
USDA's research budget to ensure American producers remain the most 
competitive around the globe.
    Question. How do you plan to ensure that American producers can 
meet the opportunity of growing food demand (while using the same 
amount of land and less resources) with a diminished role of USDA 
research?
    Answer. Ensuring that American producers can meet the opportunity 
of growing food demand will require that we partner with the private 
sector and land-grant universities. Additionally, I look forward to 
working with the Subcommittee to ensure our research agencies have the 
resources necessary to improve U.S. agricultural productivity and are 
equipped with the expertise to address future opportunities and 
challenges for producers and consumers around the world.
    Question. Can you describe how you prioritized funding for research 
programs in your budget?
    Answer. The fiscal year 2018 budget was finalized before my arrival 
at USDA, but I will work to ensure research programs maximize benefits 
to producers, train the next generation of scientists and others to 
enter the agricultural workforce, and promote nutritious and safe food 
for all Americans. USDA's research agencies are continuously evaluating 
the progress of their research portfolios and shifting limited 
resources around as necessary to ensure their efforts are meeting the 
needs of US producers and consumers.
                              fsa staffing
    Question. The budget requests calls for a 9 percent cut in Farm 
Service Agency staffing. This would obviously require substantial 
consolidation and closure of certain offices.
    How will you ensure consistent and accessible service for farmers 
and ranchers if these cuts are instituted?
    Answer. The fiscal year 2018 President's Budget does not call for 
FSA office closures or consolidations. I will continue to work to 
identify how best to allocate our financial resources and ensure that 
the FSA continues to provide efficient service to America's farmers and 
ranchers.
    Question. How would an FSA consolidation plan be constructed to 
ensure geographic fairness?
    Answer. The fiscal year 2018 President's Budget does not call for 
FSA office closures or consolidations. FSA, RMA and NRCS were realigned 
to a new mission area for Farm Production and Conservation (FPAC). As 
part of this reorganization, FSA, RMA and NRCS are exploring ways to 
improve customer service and increase collaboration.
    I will continue to work to identify how best to allocate our 
financial resources, and insure that the FSA continues to provide 
efficient service to America's farmers and ranchers.
    Question. What functions of FSA would you prioritize in a 
consolidation plan?
    Answer. FSA, NRCS and RMA, now part of the new FPAC mission area, 
are conducting a rigorous review to look for opportunities for 
collaboration, improved administrative efficiencies, and improved 
program implementation. Improving customer service, increasing 
administrative efficiencies, and providing a simplified one-stop shop 
for America's farmers, ranchers and foresters continues to be a top 
priority of the Department.
                  foreign market development programs
    Question. In May, you announced a reorganization plan that, among 
other changes, calls for the creation of an Undersecretary for Trade 
and Foreign Agricultural Affairs. The creation of this position was 
required by the 2014 Farm Bill and your announcement stated that the 
mission of this office will be to coordinate all trade functions to 
address trade barriers facing U.S. exports. Agricultural exports have 
been one of the strongest sectors of American trade as these products 
have run a positive trade balance since the 1960's with exports nearly 
tripling since 2000.
    As we all know, the farm economy is in the midst of challenging 
times. Increased export opportunities have the potential to help 
alleviate the pressure put on family farmers by opening up new markets.
    What role do you foresee the Under Secretary for Trade performing 
in upcoming trade agreement negotiations such as NAFTA renegotiation?
    Answer. The Under Secretary for Trade will bring new energy and 
support to our interagency relationships as we work closely with the 
Office of the U.S. Trade Representative and the Department of Commerce 
in the NAFTA renegotiation.
    Question. What assurances can you give the American farmer that the 
export gains made by agriculture won't be lost in these negotiations?
    Answer. I share your views on the importance of agricultural trade 
with Mexico and Canada to the overall U.S economy. USDA will work 
closely with others in the Administration to preserve the existing 
benefits to agricultural markets that we have created through NAFTA. At 
the same time, there is plenty of room for U.S. agriculture to benefit 
from renegotiating NAFTA. It is one of our earliest trade agreements 
and trade policy has evolved considerably since NAFTA entered into 
force.
    Question. Programs like the Market Access Program (MAP) and the 
Foreign Market Development Program have a proven track record of 
success. Can you describe how elimination of trade promotion programs 
will help to advance American agricultural trade?
    Answer. The Market Access Program (MAP) and the Foreign Market 
Development Program (FMD) have been important tools in the effort to 
export U.S. agriculture's production. These programs leverage Federal 
dollars through public private partnerships and maximize collaboration 
with producer groups. However, eliminating funding for MAP and FMD will 
not end these types of trade promotion activities; rather, it means the 
private sector entities will need to fully fund those activities. In 
addition, USDA will continue trade promotion functions that are 
inherently governmental, including leading trade missions and using the 
overseas network of USDA's Foreign Agricultural Service to connect U.S. 
exporters with foreign buyers.
                             crop insurance
    Question. We all know the challenges facing American farmers with 
the low global commodity price environment. Many Missouri farm families 
are struggling to make ends meet with input costs often exceeding sale 
prices. We ask these farmers to continue producing a safe, affordable, 
and abundant food supply while having to deal with Mother Nature and 
the ever present threat of drought, flooding, pests, and disease. 
Congress made significant changes to the farm safety net in the 2014 
Farm Bill and one of the programs that many farmers have told me is 
essential to their survival is the Crop Insurance Program. Your budget 
request proposes a nearly 36 percent cut ($28.6 billion over 10 years) 
to the crop insurance program.
    In your opinion, if your proposed crop insurance cuts were enacted, 
would family farmers in Missouri still have an effective safety net 
when disaster strikes?
    Answer. USDA would continue to provide an effective strong safety 
net for family farmers in Missouri as well as other U.S. family 
farmers. Federal crop insurance would continue to provide coverage to 
protect against natural perils and low prices.
    Question. How do you see these cuts going forward, especially as it 
relates to our discussions on drafting the new Farm Bill?
    Answer. I believe that crop insurance is an area where we will work 
with the Authorizing Committees as they draft the new Farm Bill.
                             food for peace
    Question. The Food for Peace programs is one our nation's premier 
international food assistance programs. It is a great example of a 
program that advances our foreign policy and humanitarian policy goals 
while enjoying robust support from domestic industry.
    Do you see a role for USDA to play in addressing world hunger?
    Answer. Yes, I believe that USDA has a role to play in addressing 
world hunger. As I stated during the hearing, I will work with the 
resources provided by Congress. If funding for Food for Peace is 
provided, I will work diligently to administer them in the most 
effective and efficient manner possible.
                  rural utility service water programs
    Question. Your budget proposes eliminating Rural Utility Service 
Water and Waste Disposal loans and grants as well as a number of 
technical assistance programs. Many of the smallest communities in 
Missouri rely on these programs for guidance, assistance, and financial 
help to ensure clean drinking water and safe waste water disposal for 
their citizens.
    Where should these small communities turn for assistance with water 
system management if the USDA no longer offers rural focused programs?
    Answer. Rural communities can be served by private sector financing 
or other Federal investments in rural water infrastructure, such as the 
Environmental Protection Agency's State Revolving Funds. However, as I 
stated during the hearing, if these programs are funded, I will work 
diligently to administer them in the most effective and efficient 
manner possible.
    Question. Do you believe that the water programs offered by EPA and 
other agency effectively incorporate the unique characteristics and 
needs of rural communities?
    Answer. The water programs offered by EPA and other agencies 
complement the water programs offered by USDA to meet the needs of 
rural communities. You have my commitment that if the program is 
funded, I will work to administer it in the most effective and 
efficient manner possible.
                                 ______
                                 
              Questions Submitted by Senator Jeff Merkley
                                food aid
    Question. Could you please explain to what extent the procurement 
and shipment of Title II commodities today compares with similar 
operations over the past several decades, especially in reference to 
the time necessary for commodities to reach food insecure populations 
once the need for assistance is recognized?
    Answer. USDA has worked closely with USAID on the provision of 
Title II food aid abroad, which has evolved from the distribution of 
surplus U.S. in-kind commodities to, in recent decades, mainly 
distributing U.S. commodities purchased on the open market. To move 
U.S. commodities to intended recipients overseas takes an average of 
three to 6 months. Section 202(e) of the Food for Peace Act, as amended 
by The Agricultural Act of 2014 (i.e. the 2014 Farm Bill), authorizes 
additional enhancement of Title II in-kind programs through local and 
regional procurement and other interventions where appropriate to reach 
more beneficiaries in a timely manner or fill gaps until U.S. 
commodities arrive. With this additional authority, more beneficiaries 
can be reached in a more timely manner.
    Question. What problems or delays exist today that create problems 
in providing food assistance in a timely manner, and identify if 
remedies to such problems require a policy, regulatory, or statutory 
response.
    Answer. Global hunger and food crises often occur in difficult and 
remote locations. We face many obstacles to improve the speed and cost-
effectiveness of aid delivery, ranging from political challenges, such 
as working in countries in conflict, to technical challenges. Sending 
U.S. commodities tends to be higher cost and is slower than other 
options. In some cases, the U.S. flagged fleet cannot provide the 
service necessary to deliver food to required locations. In fiscal year 
2017, USAID received no U.S. flag vessel bids for over 253,620 metric 
tons of Title II commodities and U.S.-flag regular direct services do 
not exist to most of our destination ports. As a result, we typically 
pay substantially more per metric ton for U.S.-flag vessels as compared 
to shipping commodities on foreign--flag vessels, which reduces our 
ability to address ongoing and unanticipated global food needs. To 
address the requirement of shipping commodities on U.S.-flagged vessels 
as compared to other vessels, a policy, regulatory, and statutory 
response would be needed.
    Question. What lessons can be learned from the U.S. private 
sector's ability to move commodities internationally that can be 
applied to food aid shipments? What changes would be required to allow 
food aid agencies, including our many NGO partners and international 
organizations like the World Food Programme, the ability to employ 
those same efficiencies in the pursuit of saving lives?
    Answer. The private sector continues to innovate and find new ways 
to cost-effectively address the rise in demand for shipping products, 
including through new technologies to better track and ensure the 
security of shipments, and is looking increasingly to apply its methods 
to development and humanitarian contexts. Leveraging its expertise--in 
logistics, transport, and other arenas--and working collaboratively 
with private sector leaders are critical to generating new ideas and 
solutions in tackling global hunger. We will continue to explore ways 
to work more closely with the private sector so that we can better 
serve populations in need.
                            rural broadband
    Question. The FCC and USDA play important, complementary roles in 
promoting rural broadband infrastructure deployment and consumer use of 
such services. We have heard in the past that the FCC and USDA programs 
aren't always coordinated well in terms of how changes to one affect 
the other. How does USDA work with the FCC and others to ensure a 
consistent, stable set of policies that will promote and sustain 
investments, and protect the integrity of the USDA portfolio?
    Answer. USDA's Rural Utilities Service (RUS) and the FCC are 
currently working to closely coordinate outreach efforts to better 
assist rural areas in providing high-speed broadband access. 
Discussions have progressed on development of joint outreach materials 
that explain how programs can be interrelated, and how available 
funding options may be leveraged. Both the USDA and the FCC offer 
programs to improve Internet availability and adoption in unserved and 
under-served areas.
    USDA co-chairs the Broadband Interagency Working Group (BIWG) along 
with the Department of Commerce. The BIWG partners with over 25 Federal 
agencies to improve coordination across programs, reduce regulatory 
barriers to broadband deployment, and collect and share information 
with communities about available Federal resources for broadband 
deployment. Through the BIWG and separately, RUS will continue to work 
closely with the FCC in developing joint outreach events focused on 
providing high-speed broadband access to America's rural areas.
                   single family housing direct loans
    Question. Is there a commensurate increase elsewhere in the Federal 
budget to make up for the elimination of the single family housing 
direct loan program?
    Answer. Yes, as part of the fiscal year 2018 President's Budget, 
the U.S. Department of Housing and Urban Development (HUD) requested 
$160 million for the Mutual Mortgage Housing Insurance Fund, a $30 
million increase from fiscal year 2017, which also provides financing 
to individuals and families that cannot participate in the conventional 
market. Very low- and low-income families may obtain funding through 
that program, as well as the USDA Single Family Housing Guaranteed 
Program.
    Question. Since many families in this program cannot obtain 
commercial credit, where can they go to obtain the assistance they 
need?
    Answer. As noted above, programs exist within the Department of 
Housing and Urban Development that may be of assistance, in addition to 
the USDA Single Family Housing Guaranteed Program.
                    water and waste disposal program
    Question. The budget states that rural communities can access 
private sector financing or State Revolving Funds to meet their 
financing needs. What evidence exists indicating that these sources 
would be sufficient to meet rural community needs, and would not result 
in overly high user rates?
    Answer. EPA's State Revolving Fund is the key Federal program for 
water infrastructure financing and can provide low-cost assistance to 
communities in need. Moreover, the absence of the USDA program could 
stimulate infrastructure lending from rural lenders, because there is 
no prohibition on rural communities to seek out private sector lending 
for the municipal needs.
                              conservation
    Question. If the USDA budget request for Conservation Operations 
were to be enacted, how many fewer conservation plans will be put into 
place by USDA?
    Answer. Currently we do not anticipate that fewer conservation 
plans will be put into place by USDA if the budget request for 
Conservation Operations were to be enacted.
    Question. What effect would a cut of this size to conservation 
operations, and the resulting reduction in conservation plans, have on 
the participation of other USDA programs which require conservation 
plans to participate?
    Answer. Currently we do not anticipate that fewer conservation 
plans will be put into place by USDA if the budget request for 
Conservation Operations were to be enacted.
                          farm service agency
    Question. The budget proposes to reduce FSA by nearly $76 million, 
assumes a reduction of 973 staff years, and cuts Farm Operating direct 
loans by $226 million. Will this budget request allow USDA to 
adequately serve our farmers and ranchers?
    Answer. Yes, this budget request will allow USDA to adequately 
serve our farmers and ranchers. I will identify how best to allocate 
our financial resources and ensure that the FSA continues to provide 
efficient service to America's farmers and ranchers.
    Question. What impact will these reductions have on the ability of 
the Department to service existing loans?
    Answer. I do not anticipate any change to the servicing of existing 
loans.
                                  snap
    Question. The budget includes several legislative proposals that 
would dramatically change the program. What impact the proposed 
legislative changes to SNAP will have on the program and participation 
in it?
    Answer. The table below reflects how the proposed legislation will 
impact SNAP.

    [The information follows:]


------------------------------------------------------------------------
                                      Fiscal Year
                                      2018 Budget
       SNAP Budget Proposal            Impact ($    Participation Impact
                                       millions)
------------------------------------------------------------------------
Eliminate the link between LIHEAP            -$647  No impact
 receipt and HCSUA.
Standardizing HCSUA across States             -507  No impact
 at 80th percentile of low-income
 households' utility costs.
Restrict categorical eligibility            -1,514  8 percent of
 to HHs receiving cash TANF.                         participants lose
                                                     eligibility
Limit ABAWD waivers to counties             -1,806  3 percent of
 with unemployment rate exceeding                    participants lose
 10 percent averaged over 12                         eligibility
 months.
Cap benefits at 6-person max                  -163  No impact
 allotment.
Eliminate minimum benefit.........             255  3.6 percent of
                                                     participants lose
                                                     eligibility
Impose a State match formula to                  0  No impact
 share SNAP benefit costs.
Reduction in Savings due to                    255  No impact
 Interactive Impacts of Proposals.
Implementation of Authorization               -252  No Impact
 Fees for SNAP Retailers.
Other Proposals (State Dept., HHS)              -6  No Impact
    Total Impact (fiscal year               -4,895  ....................
     2018).
------------------------------------------------------------------------


    Question. What impact will these changes have on low-income 
Americans who rely on these benefits?
    Answer. These legislative changes will strengthen program integrity 
and move people to work, making it more accountable to the American 
taxpayers, while targeting services to those most in need.
                              conservation
    Question. I have a letter from Western farmers, ranchers, 
sportsmen, and conservation organization that are all deeply concerned 
about the proposed budget cuts to conservation programs. Why does the 
budget propose to cut the Regional Conservation Partnership Program 
when these efforts are really helping agriculture producers and others 
on and off farm conservation needs and stabilize the Colorado River 
basin?
    Answer. The proposal to eliminate the Regional Conservation 
Partnership Program (RCPP) is part of a larger effort to better target 
USDA conservation funding. Since the Environmental Quality Incentives 
Program and the Agricultural Conservation Easement Program already 
provides a substantial portion of the funding and authority for the 
existing RCPP, many of the existing activities, including those in the 
Colorado River basin, will continue.
    Question. How do you plan to ensure that the 2018 Farm Bill 
contains adequate funding and new tools to expand USDA's efforts to 
enhance drought resiliency and water conservation?
    Answer. I plan to work with the Agriculture Authorizing Committees 
as they draft the 2018 Farm Bill to ensure that drought resiliency and 
water conservation are addressed to meet the needs of America's 
farmers.
                            sudden oak death
    Question. Sudden Oak Death is a disease that is very concerning to 
me and many Oregonians. I understand that APHIS' work on this disease 
is funded through its Specialty Crop Pest line, which is proposed to be 
cut by over $18 million. Will you commit to us that APHIS will, at a 
minimum, maintain its efforts in combatting this devastating disease?
    Answer. I recognize the concerns about this serious disease and 
will bear them in mind as we prioritize many pest and disease threats 
to agricultural production.
    Question. What assurances can you provide to this Subcommittee that 
the proposed cuts to APHIS in the budget will not threaten U.S. 
agriculture with damaging incursions of new foreign pests and diseases?
    Answer. Yes, I assure you that APHIS will continue to protect 
agricultural health and defend America's animal and plant resources 
from foreign agricultural pests and disease incursions.
              rural economic infrastructure grant program

    Question. Would the new Rural Economic Infrastructure Grant Program 
proposed in the budget have any new authorities?
    Answer. The Rural Economic Infrastructure Grant program proposed in 
the fiscal year 2018 President's budget does not have any new 
authorities. The authorities requested are the same as the grants that 
have been combined in this account.
    Question. Will you maintain all of the current authorities in the 
four existing grant programs, and ensure a minimum funding level for 
each one?
    Answer. The request would maintain all the existing authorities for 
the four grant programs that are combined in the account but would not 
establish a minimum funding level for each one. This account will 
provide the Administration with flexibility on delivering the programs 
in the areas that will provide the best opportunities. The Department 
will work with communities across the country to ensure the funding is 
used for projects that will make the biggest impact in these 
communities.
    Question. It appears that the set-aside for Appalachia included in 
this proposal is the only such set-aside in the budget. Why?
    Answer. The fiscal year 2018 budget eliminated the Appalachian 
Regional Authority; however, the budget provided the Department with 
funding to continue work in this area of the country. With such a set-
aside, USDA will be able to address a variety of critical needs in the 
Appalachia area.
               elimination of the rural business service
    Question. Is there any evidence that private commercial market will 
step in and provide credit and similar rates and terms to ones provided 
through Rural Business Service programs? Have they done so in the past?
    Answer. We expect the private commercial market to continue to 
provide credit in rural America though other existing Federal loan 
guarantee programs provided by the Farm Service Agency and the Small 
Business Administration.
    horse protection act (hpa)/animal welfare act (awa) transparency
    Question. Mr. Perdue, at the beginning of February, APHIS abruptly 
removed from its website thousands of pages of searchable inspection 
reports, annual reports, and other documents regarding enforcement of 
the Horse Protection Act and the Animal Welfare Act. Public access to 
this data ensures accountability for the agency's enforcement of these 
laws and acts as deterrence against violations.
    It is essential that the public be able to see which dog dealers, 
horse trainers, laboratories, roadside zoos, and other regulated 
entities have been cited for subjecting animals in their care to abuse 
or otherwise failing to meet basic welfare standards. Responsible 
actors in the regulated communities want to be able to point to their 
clean records that help them establish public trust. When will the 
agency restore these vital records and resume posting them in a timely 
way on a searchable database with names and cities identified?
    Answer. I understand your concerns about the removal of records 
from the Animal and Plant Health Inspection Service (APHIS) Web site. 
The removal of the search tool was part of a comprehensive review of 
documents APHIS initiated in early February 2017, after a year-long 
process, as it strives to balance a commitment to transparency with 
rules protecting personal information. To date, APHIS has restored all 
the content it removed, in its original redacted form, with the 
exception of inspection reports involving individuals or homestead 
businesses. Roughly two-thirds of the Animal Welfare Act (AWA) 
inspection reports involve individuals or homestead businesses. APHIS 
is diligently exploring options for promoting transparency involving 
inspection activities that center on individuals and homestead 
businesses while working to protect personal information, which is of 
greatest concern for these types of licensees.
                              horse soring
    Question. The last Administration proposed an important rule to 
update Horse Protection Act regulations to end the practice of horse 
soring--inflicting pain on the hooves and legs of Tennessee Walking 
Horses and related breeds to force them to perform an artificial high-
stepping gait. The rule was designed to fix serious weaknesses in 
USDA's oversight of this law enacted almost 50 years ago. This rule had 
overwhelming, bipartisan Congressional support from 42 Senators and 182 
Representatives who sent letters to USDA, along with more than 100,000 
public comments submitted in support.
    Mr. Perdue, will you commit to reviewing this broadly supported 
proposed rule, and inform us promptly about your intentions regarding 
final publication?
    Answer. We are currently reviewing the input provided by 
stakeholders before deciding on the appropriate next step, which could 
include finalizing the rulemaking. Once a decision has been made, we 
will inform the Congress.
    Question. Please provide, for the last 5 years, the number of 
highly qualified applications received for each competitive NIFA 
program, the total amount of funding applied for, and the number, and 
amount, of grants which were approved.
    Answer. NIFA is in the process of collecting and analyzing the 
program data for all competitive programs. Because of the voluminous 
number of program proposals over the last 5 years, (almost 19,000), and 
because these pre-award proposal and ranking data exists in many 
disparate data formats over these years, a report on all competitive 
programs is not available at this time. This information will be 
provided as soon as the analysis is completed.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                             climate change
    Question. Agriculture contributes many positive benefits to our 
nation and the world, but it is also responsible for a significant 
amount of U.S. greenhouse gas emissions. Specifically, gases such as 
nitrous oxide and methane are a major byproduct of farming and are far 
more damaging than carbon dioxide.
    What is USDA doing to combat this climate threat while also 
providing the resources that farmers need to continue farming, remain 
profitable, and adapt to climate change?
    Answer. The Department is working to improve the way we help 
farmers and ranchers manage the risks they face, whether related to 
weather and pests or financial uncertainty. As we move forward, we will 
be looking for pragmatic and solution-oriented approaches. In addition, 
I will work to ensure that we manage programs and make decisions based 
upon best available data and sound science that support our farmers, 
ranchers, and forest owners and managers.
    Question. USDA's Climate Hubs have become a model for connecting 
researchers and producers in order to enhance the ability of farmers 
and ranchers to adopt practices that will help them to plan for changes 
in climate, as well as a provide coordination across multiple 
government agencies and research being conducted through universities.
    Will the Department be continuing this important work in fiscal 
year 2018 under the Budget request submitted to Congress?
    Answer. Yes, I will continue to support the work of the Climate 
Hubs. The continuation of this work will allow the Hubs to focus on 
practical and pragmatic approaches to address risks such as drought, 
wildfire, pests and disease pressures on crops and livestock, and other 
threats that are sensitive to the climate.
                          groundwater recharge
    Question. Title II programs are essential for many producers across 
the country, and California is no different. Over the last several 
years, California has faced a historic drought, but over this last 
winter we received an enormous amount of precipitation that led to 
massive mudslides, flooding, and several disaster declarations. With 
rivers and creeks at the levels they are, many producers are hoping to 
use the excess water for groundwater recharge.
    It is my understanding that NRCS does not currently consider 
groundwater recharge as meeting a ``resource concern'', thus making 
projects that seek to use funding from programs such as EQIP ineligible 
if they list groundwater recharge in their application.
    Why does NRCS not consider groundwater recharge to be a resource 
concern?
    Answer. Groundwater recharge is not a resource concern, but is a 
means to help prevent the depletion of an aquifer water resource by 
adding water to it. The resource concern is that an aquifer is being 
depleted at a rate faster than it is being recharged, so aquifer 
depletion is identified as the resource concern.
    Question. Will you direct NRCS to take another look at their 
position in light of the water situation currently facing many 
California farmers?
    Answer. NRCS will continue to assist producers throughout the 
Nation through the Environmental Quality Incentives Program (EQIP) to 
implement practices that address water conservation and mitigate the 
effects of the drought.
    Question. What statutory changes or congressional action would NRCS 
need in order to provide greater flexibility to regional, state, and 
local actors who seek to use USDA programs to assist with groundwater 
recharge?
    Answer. NRCS has flexibility within the current program authorities 
to assist producers to address resource concerns.
                        antibiotic use on farms
    Question. I have long advocated for reducing the use of antibiotics 
in agriculture, as it is well-documented that the overuse of 
antibiotics leads to antibiotic-resistant bacteria. I am encouraged 
that the FDA has now fully implemented Guidance for Industry #213, but 
we can do more to ensure that the judicious use standard is followed.
    Funding the National Antimicrobial Resistance Monitoring System and 
continuing collaboration between USDA and the FDA are both key pieces 
in our efforts to combat the rise in antibiotic-resistant bacteria, and 
data is key to informing our policy actions. We must also increase the 
number of trained veterinarians who can assist producers to prevent and 
treat animals when they need it.
    How will USDA be improving their collection of on-farm data?
    Answer. USDA conducts the National Animal Health Monitoring System 
(NAHMS), which conducts national studies on the health and health 
management of United States domestic livestock and poultry populations. 
In fiscal year 2017, NAHMS conducted surveys on antimicrobial use and 
stewardship practices in cattle feedlots and swine operations. 
Additionally, NAHMS launched the 2017 Beef Cow-calf study, a component 
of which will survey producers regarding antimicrobial use and collect 
biological samples to evaluate resistance patterns among foodborne 
pathogens. The data collected from these surveys will help assess 
antimicrobial stewardship practices on farms, which can help inform and 
guide stewardship and judicious use efforts by USDA and other partners 
in both the public and private sectors.
    Question. What is USDA doing to work with producers and 
veterinarians to decrease the risk that the overuse of antibiotics on 
farms pose?
    Answer. APHIS conducts surveys in cattle feedlots and swine 
production to characterize antibiotic use and to monitor resistant 
organisms of importance to animal health and public health. I will have 
the agency provide you with additional details for the record.
    We are conducting these surveys as part of the National Animal 
Health Monitoring System, and will undertake additional studies to help 
define appropriate and judicious use of antibiotics for veterinarians. 
Additionally, we have also launched a pilot in the National Animal 
Health Laboratory Network with State partners to examine resistance 
patterns in samples submitted from sick animals. This information will 
help the veterinary practitioner with antibiotic choices.
    Question. How is USDA working to educate veterinarians on the most 
up to date guidance on antibiotic use? How many veterinarians are being 
reached through training modules?
    Answer. I will have the agency provide you with additional details 
for the record.
    APHIS' National Veterinary Accreditation Program (NVAP) is designed 
to provide accredited veterinarians with the information they need to 
ensure the health of the Nation's livestock and protect public health 
and well-being. This program currently reaches 66,000 accredited 
veterinarians. We introduced an NVAP module titled, ``Use of 
Antibiotics in Animals'' in 2012 in online, classroom, and printed 
training material formats. Since then, it has played a key role in our 
antimicrobial resistance global education and outreach efforts and has 
been completed more than 21,900 times by accredited veterinarians. At 
the meeting of the Group of Seven (G7) in Germany in 2015, this module 
was cited as one of only two ``Best Practices of Combating 
Antimicrobial Resistance'' from North America. More recently, a module 
was created in close collaboration with FDA's Center for Veterinary 
Medicine to provide guidance on FDA regulations that went into effect 
in January 2017.
    Question. How is USDA working to increase the number of 
veterinarians who are available in rural areas?
    Answer. In fiscal year 2017, USDA has two competitive grant 
programs dedicated to increasing the number of veterinarians in 
veterinary shortage situations. The Veterinary Medicine Loan Repayment 
Program helps qualified veterinarians offset a significant portion of 
the debt incurred in pursuit of their veterinary medicine degrees in 
return for their service in certain high-priority veterinary shortage 
situations. The Veterinary Services Grant Program makes grants 
available on a competitive basis to qualified entities to develop, 
implement, and sustain veterinary services through education, training, 
recruitment, placement, and retention of veterinarians, veterinary 
technicians, and students of veterinary medicine and veterinary 
technology. Grants are also made to establish or expand veterinary 
practices in rural areas.
                              food safety
    Question. I was encouraged by the advances made by the previous 
administration to improve food safety standards and address concerning 
antimicrobial resistance trends. It is my profound hope that you will 
continue rather than abandon Secretary Vilsack's important efforts on 
this critical public safety issue.
    Under your leadership, how will the Department be continuing on 
this progress?
    Answer. We will continue to work with Federal partners at the Food 
and Drug Administration and Centers for Disease Control and Prevention 
to further strengthen the twenty-year-old National Antimicrobial 
Resistance Monitoring System (NARMS). For example, the Food Safety and 
Inspection Service will continue to strengthen the NARMS program by 
applying whole genome sequence analysis to NARMS bacterial isolates.
    Question. Specifically, will the Antimicrobial Resistance 
initiative continue, will whole genome sequencing advancements be 
funded and utilized, and will laboratory analysis upgrades continue to 
be prioritized?
    Answer. Antimicrobial resistance (AMR) has been an area of focus 
during the past two decades as USDA plays a dual role in protecting 
animal agriculture and public health. Recognizing AMR as a potential 
and serious threat, USDA continues, as funds allow, to adopt laboratory 
technological advancements, including whole genome sequencing that will 
meet the agency's goal of enhanced public health protection.
    Question. When will the Department issue final rules for beef and 
pork pathogen standards?
    Answer. USDA is committed to continue to serve in the critical role 
of ensuring the food we put on the table to feed our families meets 
strict safety standards. By having the best science and data, we will 
be able to make strong strategic decisions that will benefit all 
Americans. I do not know now when we will be able to issue those rules.
                          agricultural workers
    Question. As you know, many farmers rely on immigrant labor for 
their operations. Indeed, immigrant labor is essential to the 
productivity of millions of acres of agricultural land across 
California and the nation. Without these workers, not only would local 
economies suffer, but crops would rot in fields and on trees, and food 
prices would rise.
    This is simply unacceptable, and I'd like to know if you have 
communicated the negative impacts that immigration enforcement actions 
and reckless rhetoric could have on the agricultural economy and rural 
communities.
    Have you communicated these concerns to the Secretary of Homeland 
Security?
    Answer. I have shared with my colleagues in the Cabinet and with 
the President the need for a solution to agricultural labor demands 
that is reliable, considers year-round solutions, is secure, and legal.
    Question. Have you communicated these concerns to the Attorney 
General?
    Answer. I have shared with my colleagues in the Cabinet, including 
the Attorney General, the need for a solution to agricultural labor 
demands that is reliable, considers year-round solutions, is secure, 
and legal.
    Question. Have you communicated these concerns to the President?
    Answer. I have shared with the President the need for a solution to 
agricultural labor demands that is reliable, considers year-round 
solutions, is secure, and legal.
    Question. I also hear every day from constituents who rely on a 
seasonal workforce and are afraid that the workers simply will not show 
up this year when they are needed due to the actions this 
Administration is taking.
    Again, what assurances can you provide that you are doing all you 
can to advocate for these farmers, ranchers, producers, agricultural 
workers, and their families when it comes to the seasonal workforce 
they rely on?
    Answer. I am a strong advocate for farmers, ranchers, producers, 
agricultural works and their families. It is my intention to work with 
the President, the Secretary of Homeland Security and Congress to 
design a program that meets the needs of American agriculture.
                                 ______
                                 
              Questions Submitted by Senator Patrick Leahy
              consistent enforcement of organic standards
    Question. I consider the passage of the Organic Foods Production 
Act one of my greatest accomplishments in my Senate tenure. Many said 
it was a niche industry that would not amount to much. Today it is 
nearly a $50 billion market in the United States, with strong growth 
year after year. But that growth is dependent on consumer confidence in 
the USDA organic seal and the strict standards it represents. Unequal 
enforcement of Federal organic standards has long been a problem. This 
was highlighted recently in two Washington Post stories about poor 
enforcement of the dairy pasture rule and imports of fraudulent organic 
grain.
    Your budget justification says the National Organic Program will 
continue to effectively administer its compliance and enforcement 
program, even with a nearly $1 million budget cut and corresponding 
staffing cuts. How can you effectively enforce these standards if you 
reduce the Program's already limited staff, do not fill vacant 
positions, and cut funding by over 10 percent? In the face of recent 
troubling fraud cases and rapid industry growth shouldn't we be 
increasing USDA enforcement efforts?
    Answer. A top priority of mine and the Agricultural Marketing 
Service's (AMS) National Organic Program is ensuring compliance to 
protect certified organic farms and businesses. None of the budget and 
staffing cuts proposed in the President's budget would impact oversight 
of accredited organic certifiers or the compliance and enforcement 
mission. AMS has a number of investigations and initiatives underway to 
strengthen the enforcement of organic imports and to protect organic 
integrity across complex supply chains. The program will continue to 
prioritize compliance and enforcement under the proposed President's 
budget.
                           rural development
    Question. This budget would devastate rural communities with the 
elimination of vital programs that support rural economic opportunity 
and security across the country. In Vermont, we value investing in 
agriculture, rural businesses, and infrastructure. We see the direct 
impacts on our families, businesses, and towns. I am concerned by your 
proposal to reduce Rural Development spending by 30 percent and cut 
staffing levels by 925 staff across the country. I am also concerned by 
the proposed reorganization of USDA-RD and elimination of the 
Undersecretary position.
    Our states are waiting for the release of important fiscal year 
2017 Rural Development funds from USDA headquarters. Due to so much 
demand in Vermont for water and waste water projects this year, we have 
several Vermont towns waiting for the release of national funds for 
their projects. The construction season is short in Northern New 
England. They are worried that excessive delay by your Department is 
going to cost them more money in escalating project costs and 
compressed project schedules.
    Can these small towns expect these national funds to be released 
soon, because they cannot afford any further delay?
    Answer. Yes, this funding will be released soon and I understand 
that these small towns cannot afford delays.
               supplemental nutrition assistance program
    Question. The Supplemental Nutrition Assistance Program (SNAP) 
provides essential help in the form of food assistance to individuals 
and families across the country. The recent declines in SNAP 
participation mirror the improving economy, showing that the program is 
working as intended. As better paying jobs are more available, families 
are able to move off of SNAP.
    Unfortunately, this budget proposes a massive cut to SNAP that 
would result in a $193 billion or 25 percent cut to the program. Your 
budget submission includes a number of legislative changes to SNAP that 
this administration recommends, many on the basis of creating ``a 
single, consistent policy nationwide.''
    One of the proposals you submitted is to eliminate the connection 
between SNAP and LIHEAP, a way that Vermont currently ensures that 
those in poverty are able to receive SNAP benefits. In fact, many 
Vermonters live in housing situations where they cannot claim their 
utility bill because utilities are built into the cost of their rent. 
This is typical for seniors in my state. The state is able to help 
those eligible for LIHEAP claim the deduction and therefore receive the 
benefits they should receive, even though the cost of their utilities 
is paid through their rent.
    Shouldn't states have the ability to simplify eligibility for 
programs like SNAP so they can better administer these programs?
    Answer. We are open to working with Congress on improving the 
eligibility practices for SNAP to meet the needs of participants in a 
cost-effective manner.
    Question. Why does USDA want to penalize beneficiaries who happen 
to pay for the high cost of utilities through their rent?
    Answer. The proposal to eliminate the Low-Income Home Energy 
Assistance Program (LIHEAP) and Heating/Cooling Standard Utility 
Allowance (HCSUA) link eliminates the automatic receipt of the HCSUA 
when a household receives LIHEAP benefits. This would target the 
receipt of the HCSUA for those with actual heating and/or cooling 
expenses and would create a single, consistent policy nationwide.
    Question. How does limiting benefits to six household members 
ensure SNAP works better?
    Answer. This proposal provides for a program cost containment 
strategy by capping household benefits at the six person maximum 
allotment, reducing benefits and Federal costs for large households. 
The estimated savings to the program is $1.8 billion over a 10 year 
period.
                           international aid
    Question. You have said that you are a ``facts-based, data driven 
decision maker.'' However, this budget does not appear to be based on 
facts. If it was, it would not completely eliminate programs like the 
McGovern-Dole global school meals program or other international aid 
programs like Food for Peace, that embody the very best of America's 
values.
    Saving these programs means supporting American farmers and saving 
lives. It is as simple as that and America is not made safer by failing 
to feed the hungry. With these USDA programs, we are able to transform 
people's lives. We give youth and communities a future.
    Do you believe that USDA's work on stabilization, food aid, and 
development in Africa, and around the globe, is fundamental to our 
national security?
    Answer. Yes, I do believe USDA's work is fundamental to our 
national security. We know that where hunger persists, instability 
often grows. Investing in these critical programs can promote stability 
and ensure that people have the opportunity to lead healthy, productive 
lives. As I stated during the hearings, I will work with the resources 
provided by Congress.
    Question. Do you believe that our country's collective moral 
convictions make fighting hunger the right thing to do? And that the 
benefits we receive as a nation from reducing global food insecurity 
also make it the smart thing to do?
    Answer. Yes, investing in the most cost-effective and efficient 
humanitarian programs helps ensure that people have the opportunity to 
lead stable, healthy, and productive lives while being sensitive to 
U.S. taxpayers. I look forward to working with this Subcommittee to 
achieve these goals. If these programs are funded, I will work 
diligently to administer them in the most effective and efficient 
manner possible.
             response to letters from democrats in congress
    Question. During your confirmation process, you assured the Senate 
Agriculture Committee Ranking Member that you would ``reply promptly to 
any reasonable request for information'' and that you would ``respond 
to her requests for data and technical assistance in drafting 
legislation.'' Yet the Justice Department's Office of Legal Counsel has 
issued an opinion in which it opines that the executive is not 
obligated to respond to requests from members of Congress. Dozens of 
requests from Senate Democrats have gone unanswered across the 
administration, including several from Ranking Member Stabenow to your 
Department.
    Do you commit to respond promptly and completely to congressional 
inquiries, whether those requests come from Republicans or Democrats?
    Answer. It is important to me that the Department responds promptly 
to inquiries from not only Congress, but also its other constituents. 
We have been working diligently to accelerate the process for drafting 
such responses. I will continue to work with the USDA team to address 
inquiries received from USDA partners and constituents in a timely 
manner.
               elimination of rural development programs
    Question. Given your strong statements about rural jobs and 
supporting rural economies, this budget makes astounding cuts to 
programs that do those exact things. Although much of the country has 
seen recovery from the financial crisis, rural America and rural 
economies still lag behind. Now is not the time to be eliminating these 
programs.
    A major issue facing Vermont and most of rural America is the lack 
of adequate infrastructure necessary for our rural communities to 
compete in the global economy. Specific to USDA's water and wastewater 
loans and grants, this funding is a lifeline to small rural communities 
and in my view the Water and Environmental Programs are complementary 
to the EPA's State Clean Water and Drinking Water Revolving Loan Funds, 
rather than duplicative. Virtually every community in the country with 
inadequate drinking water has a population of 3,300 or less. In Vermont 
we have a total of 1,377 active public water systems, 97 percent of 
these systems are in small communities, and the state has identified 
some $154 million in wastewater infrastructure needs and $510.8 million 
in drinking water infrastructure needs over the next 20 years. This is 
a huge amount for a state our size and without USDA's water and 
wastewater programs, many of our small communities would lack access to 
clean water.
    Through just the Rural Utilities Service Water and Environmental 
Programs, Vermont is facing a backlog of some $33.5 million and 
nationwide USDA is facing a backlog of 995 applications, seeking a 
total of $2.5 billion in USDA funding for water and wastewater 
infrastructure. Where do you propose these communities turn to if these 
critical programs are eliminated as this budget proposes?
    Answer. EPA's State Revolving Fund is the key Federal program for 
water infrastructure financing and can provide low-cost assistance to 
communities in need. In addition, I would note that the USDA guaranteed 
program has enabled private sector financing to support water and waste 
disposal projects in these communities. USDA believes that private 
financing would continue to be a source of funding for such projects. 
If funding is provided for the program, we will work diligently to 
administer it in the most effective and efficient manner possible.
    Question. The administration claims that the Value-Added Producer 
Grants are ``duplicative and overlap with similar business development 
programs operated by other Federal Agencies.'' There is no other 
program that fills this unique role to help our agricultural producers 
grow their businesses by turning raw commodities into value-added 
products. These grants help to expand marketing opportunities and 
develop new uses for existing products, and grow jobs in rural 
communities. How do you justify this elimination?
    Answer. I look forward to working with the Subcommittee more to 
ensure that the unique needs of rural communities are met. If it is 
determined that USDA should continue to administer this program and 
funding is provided, I will work to ensure that we do so in the most 
effective and efficient manner.
                          usda service centers
    Question. You have mentioned several times that you will work every 
day to prioritize customer service. But I am concerned that this budget 
could result in the loss of one-third of USDA Service Center employees, 
nearly 10,000 jobs. This would mean longer wait times for farmers, and 
if local offices are closed, farmers would have to drive potentially 
hundreds of miles out of their away for help. At a time when the farm 
economy is struggling for the third year in a row, we should not be 
making it harder for our farmers and local businesses to seek 
assistance with farm programs, conservation, and rural development 
assistance. While discussing staffing at Service Centers when you 
testified before the House Appropriations Committee, you said that 
``the staffing level is something I've not been able to get to yet.''
    Have you been able to get to that issue yet and get to an 
understanding for how this budget proposal would affect staffing at 
field offices, which are the first point of contact for farmers who 
enroll in conservation and farm programs? Do you believe that these 
USDA front line staff can be reduced by 30 percent without an impact on 
service delivery?
    Answer. The Administration is in the process of taking a closer 
look at the proper role and size of Federal Government. My 
reorganization announcements earlier this year focused on the goals of 
improved service delivery to agricultural producers, addressing the 
needs of rural America, and addressing agricultural issues while 
providing a simplified one-stop shop for USDA's primary customers, the 
men and women farming, ranching and foresting across America. I will 
continue to work to identify how best to allocate resources to serve 
our rural communities, and manage and implement efficiently delivered 
services while fulfilling the core mission of USDA.
                            staffing levels
    Question. I am concerned that our USDA workforce needs are not 
being met at our USDA Service Centers in Vermont due to limits placed 
on hiring. This is exacerbating problems with vacant positions for the 
Natural Resources Conservation Program and the Farm Service Agency and 
in the end it is having a negative effect on the services farmers.
    How do you plan to prioritize hiring needs at USDA service centers 
to ensure that you are fulfilling our nation's commitment to our 
farmers and rural businesses?
    Answer. The Administration is in the process of taking a closer 
look at the proper role and size of Federal Government. My 
reorganization announcements earlier this year impart the goals of 
improved service delivery to agricultural producers, addressing the 
needs of rural America, and addressing agricultural issues while 
providing a simplified one-stop shop for USDA's primary customers, the 
men and women farming, ranching and foresting across America. I will 
continue to work to identify how best to allocate resources to serve 
our rural communities, and manage and implement efficiently delivered 
services while fulfilling the core mission of USDA.
    Question. Can you submit to the Subcommittee a list of vacancies 
for each USDA agency, broken out by state so we know exactly how this 
limits placed on hiring are impacting your department and our local 
county and state offices?
    Answer. At this time that information is not available. The 
Department is reviewing the staffing needs throughout all agencies.
                            nrcs salary cap
    Question. You have expressed that the administration is seeking to 
deliver programs more efficiently across the board and that reductions 
in staff and operating costs should not impact program delivery. The 
Natural Resources Conservation Service (NRCS) is currently able to 
deploy its salary and expense budget without working within an imposed 
cap for the salary account. This provides NRCS with the flexibility to 
make ongoing strategic decisions in how to most efficiently deliver its 
program in response to changing needs and changing resources, without 
being constrained by an inflexible cap salary or in effect, on the 
number of employees or FTE's at any given time. Taking away this 
flexibility, I fear, would make the NRCS less efficient.
    Will you continue to allow NRCS flexibility in allocating dollars 
within its salary and expense account, with no salary cap, in order to 
achieve efficiency while addressing changing needs and resources? Or do 
you intend to take away this flexibility by imposing an arbitrary cap 
on salary expenditures by NRCS?
    Answer. Currently, there is no salary cap proposed for NRCS.
            farm production and conservation reorganization
    Question. You have been clear about your intent to reorganize the 
USDA and place both the Natural Resources Conservation Service (NRCS) 
and the Farm Service Agency (FSA) under a new Farm Production and 
Conservation mission area. While there may be some efficiencies 
achieved in doing so, there is also a danger that delivery of programs 
to farmers may be hindered if the reorganizations disrupts long 
established channels of communication with farmers, or tasks some USDA 
offices with programs that they may not be well constituted to handle. 
For example, overseeing NRCS contracts depends on a constant field 
presence and deep technical knowledge of conservation practices, while 
overseeing FSA contracts requires more knowledge of finance and 
business practices but less hands-on field work.
    Will your proposed reorganization provide for FSA to continue 
delivering the loan and risk management programs that have been in 
their jurisdiction and keep NRCS responsible for writing and fulfilling 
the contracts for conservation practices? Do you agree that to have FSA 
oversee contracts for conservation practices or to have NRCS begin to 
process farm loans and risk management programs would erode overall 
program delivery?
    Answer. The vision for the proposed reorganization of FSA, NRCS, 
and RMA under a common mission area will be to have these agencies 
continue to deliver their programs, more efficiently and with enhanced 
customer service.
                    investments in organic research
    Question. We have a huge shortage of organic commodities grown in 
this country.
    I believe that with more investments in research we could help our 
farmers to meet these growing market demands rather than relying on 
imports, yet this budget would slash research, especially for 
sustainable agriculture. Why?
    Answer. With the understanding that research provides the 
foundation for increasing agricultural productivity, the budget 
provides an emphasis on basic research and efforts to support the 
transfer of research and development products to industry to promote 
the Nation's economic growth through innovation.
    Question. With respect to fraudulent imports of organic grain, will 
your new Trade Undersecretary be focused on organic imports and 
identifying corrective actions? How will you ensure that we are not 
losing opportunities for American farmers?
    Answer. Yes, the USDA Under Secretary for Trade and Foreign 
Agricultural Affairs (Trade) will be focused on unfair trading 
practices, including the improper labeling of organic imports by our 
trading partners. The organic sector has been a great opportunity for 
U.S. agricultural producers and USDA's Under Secretary for Trade will 
work closely with the USDA Under Secretary for Marketing and Regulatory 
Programs to ensure a level playing field for U.S. producers in the 
organic and other sectors.
    If it is determined that USDA should continue to administer this 
program and funding is provided, USDA will work to ensure that we do so 
in the most effective and efficient manner possible.
                            trade with cuba
    Question. During your confirmation, in response to questions about 
expanding markets to support our farmers you stated that, ``I think we 
would love to have Cuba as a customer in many things.'' You went on to 
say that, ``American agriculture has a wonderful opportunity. That is a 
country that is hungry,'' and, ``I think we have the product they need 
and they would like the product. I think the real issue I heard with 
Cuba was the financing part . . .  and I would support the efforts if 
we could get private financing.''
    Has anything changed since then? Do you stand by those statements? 
If not, why not?
    Answer. I still stand by my statements and I continue to believe 
that American farmers produce the highest quality, best valued, food 
products in the world.
    Question. How do you anticipate the President's Trump's recent 
announcement to restore restrictions on our engagement with Cuba will 
impact American farmers who are eager to access this market?
    Answer. Cuba represents a tremendous opportunity for American 
agricultural exports. However, in order to capitalize on that 
opportunity legislation is needed to eliminate the statutory 
prohibition against a U.S. person providing financing terms for the 
sale of agricultural commodities or products to Cuba.
                 under secretary for rural development
    Question. I am concerned that the reorganization of the Department, 
including the decision to eliminate the position of Under Secretary of 
Rural Development, minimizes the significance of this program, despite 
reports about the proposed elevation of its responsibilities to the 
Secretary's office. The Under Secretary has formally overseen a $216 
billion portfolio, 12 programs and 47 state offices that serve rural 
Americans on a wide range of vital issues from telecommunications to 
housing. It is commendable that you have an interest in direct 
oversight of these programs, I however, remain concerned about the 
feasibility of implementing programs with such size and scope that 
serve our most vulnerable rural Americans.
    How will the Department ensure that the mission of the Rural 
Development programs, and the economic challenges facing family farmers 
and rural communities, will not be overlooked without an Under 
Secretary position?
    Answer. I have made the determination that establishing an 
Assistant to the Secretary for Rural Development is the most effective 
way to elevate the issues of rural America directly to me. This 
position will report directly to me and with this decision rural 
America will have a seat at the main table and have walk-in privileges. 
The increased emphasis on Rural Development at USDA is in recognition 
of the economic difficulties facing rural communities, which have 
lagged behind other parts of the country in prosperity.
    Question. How will the Department ensure that high-quality 
technical assistance and customer service will remain available to 
states and grantees without the position of an Under Secretary to 
oversee Rural Development?
    Answer. It is my commitment to this Subcommittee to be accountable 
to rural communities. The Department will continue to maintain the same 
level of customer service and care provided in the past. Rural 
Development staff has run these loan and grant programs wisely and I am 
very proud of them. The change will not affect the functions of the 
mission area; it will enhance the delivery of the programs and customer 
service.
                 usda rural rental housing loan program
    Question. Throughout the country, thousands of properties 
participating in the Section 515 Rural Rental Housing Loan Program are 
approaching their 40-year terms, resulting in maturing mortgages that 
will no longer guarantee rent subsidies, threatening many low-income 
tenant households with drastic rent increases. In my home state of 
Vermont, there are 79 active Section 515 properties containing 1,842 
units that will expire within the next 10 years. Meanwhile, the 
statewide vacancy rate rests at one percent, making every unit assuring 
affordability even more critical to our housing stock.
    As these mortgages mature and communities face the challenge of 
investing in aging housing stock, the budget proposed by President 
Trump eliminates the Section 515 Program, which makes loans to property 
owners to provide and maintain affordable rental housing for very low-, 
low-, and moderate-income families, elderly persons, and persons with 
disabilities. One in every four very low-income renter households in 
nonmetropolitan areas is cost-burdened, inadequately housed, or do not 
receive Federal housing assistance.
    What investments is the Department prepared to make to address 
maturing mortgages in the immediate future, and over the next several 
years?
    Answer. The Department, through the Rural Housing Service, will 
continue to refine its Rental Assistance Tool. Through this tool, which 
provides analysis on which properties are expected to naturally mature 
and when, the agency can be proactive to assist both the property 
managers and its residents to maintain quality housing at a low cost.
    Question. What resources is the Department currently dedicating to 
address the immediate needs?
    Answer. The Rural Housing Service (RHS) has three main strategies 
to ensure safe and affordable housing is available to very low- and 
low-income rural residents. Currently, RHS provides loans to properties 
within its portfolio through Section 515 Rural Rental Housing and the 
Multifamily Preservation and Revitalization Demonstration Program, 
which has several methods to rehabilitate, refinance, and re-amortize 
loans to maintain both the quality and affordability of these 
properties. Additionally, RHS recently launched a pilot program to 
study effective means to transfer Section 515 properties exiting the 
program, due to mortgage maturity, to qualified non-profit 
organizations.
    Question. Will the Department be including funding requests in 
future budgets to address this issue?
    Answer. In line with the Administration's goal to reduce the 
Federal deficit and create a balanced budget, tough funding decisions 
must be made. I will propose a budget that funds our most necessary and 
high-performing programs. I look forward to working with the 
Subcommittee more to ensure that the unique needs of rural communities 
are met.
    Question. What resources is the Department prepared to commit to 
ensuring that rental housing for very low-, low-, and moderate-income 
families, elderly persons, and persons with disabilities is accessible 
in the nation's most rural communities?
    Answer. The RHS has several programs that work to provide safe and 
affordable rental housing options to very low-, low-, and moderate-
income families, as well as elderly persons and persons with 
disabilities. Additionally, we have proposed to fund Section 521 Rental 
Assistance at its full level, as well as the Voucher Program for 
properties that prepay or default, to ensure that those who need 
assistance receive it.
 section 502 direct and guaranteed homeownership loans and section 504 
                  home repair and rehabilitation loans
    Question. The 502 program offers a unique opportunity to advance 
the economic development of rural areas, which have higher poverty 
rates and higher rates of unemployment when compared to big cities and 
suburbs. Unlike other lending programs, the 502 program ensures that 
mortgage payments are subsidized to not more than 24 percent of a 
borrower's adjusted income--allowing this program to reach a portion of 
the population whose income is often too low to obtain credit 
elsewhere. In recent years, the percentage of applications to the 
Section 502 Direct and Guaranteed Homeownership Loan Program from very 
low-income borrows in my home state of Vermont has topped 40 percent, 
signaling a strong need for Rural Development's programming to remain 
available to borrowers with limited financial capacity.
    The 504 Home Repair and Rehabilitation Program upholds a key 
mission of the USDA, to create prosperity for these families that 
fosters self-sustaining, repopulating, and economically thriving rural 
communities. The Administration's budget proposes to eliminate these 
programs, which according to the USDA may guarantee an estimated 
159,959 guaranteed home loans in 2017, including home purchases and the 
refinancing of existing Rural Housing Service (RHS) loans.
    With this evidence, why is the President's budget proposing to 
eliminate the Section 502 and Section 504 programs that directly grant, 
loan and guarantee funds for low-income homeowners when available 
capital is so limited?
    Answer. In keeping in line with the Administration's priority to 
reduce the Federal deficit and create a balanced budget, USDA had to 
make some tough funding decisions. USDA looks forward to working with 
the Subcommittee to ensure that the unique needs of rural communities 
are met. If it is determined that USDA should continue to administer 
this program, I will work to ensure that we do so in the most effective 
and efficient manner possible.
    Question. Vermont is one of many states that continues to see a 
rise in its senior population with limited earnings. The President's 
budget proposes to eliminate the Section 504 grants to very-low-income 
applicants 62 years or older unable to afford a 1 percent loan, what 
resources will remain available to ensure seniors' housing health and 
safety is not at risk?
    Answer. RHS has several programs that assist elderly and disabled 
persons. Approximately 60 percent of Section 515 Rural Rental 
properties are for elderly and disabled persons, and residents living 
in those facilities can also qualify for rental assistance. 
Additionally, the Community Facilities program can provide funding for 
the construction or rehabilitation of nursing homes and assisted living 
facilities. Additionally, the Rural Economic Infrastructure Grant 
program proposed in the fiscal year 2018 President's budget included 
low income housing repair grants as one of the four combined 
authorities requested in that account. This account will provide the 
Administration with flexibility on delivering the programs in the areas 
that will provide the best opportunities.

                          SUBCOMMITTEE RECESS

    Senator Hoeven. And with that, again, thank you, and we are 
adjourned.
    [Whereupon, at 12:09 p.m., Tuesday, June 13, the 
subcommittee was recessed, to reconvene subject to the call of 
the chair.]