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72–302 PDF 2013

S. HRG. 112–853 

AGRICULTURE, RURAL DEVELOPMENT, FOOD AND 

DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2013 

HEARINGS 

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

ON

H.R. 5973/S. 2375 

AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2013, 

AND FOR OTHER PURPOSES 

Department of Agriculture 

Department of Health and Human Services: Food and Drug 

Administration 

Farm Credit Administration 

Nondepartmental Witnesses 

Printed for the use of the Committee on Appropriations 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=senate&committee=appropriations 
(II) 

COMMITTEE ON APPROPRIATIONS 

DANIEL K. INOUYE, Hawaii, Chairman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

DIANNE FEINSTEIN, California 

RICHARD J. DURBIN, Illinois 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JACK REED, Rhode Island 

FRANK R. LAUTENBERG, New Jersey 

BEN NELSON, Nebraska 

MARK PRYOR, Arkansas 

JON TESTER, Montana 

SHERROD BROWN, Ohio 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

RICHARD C. SHELBY, Alabama 

KAY BAILEY HUTCHISON, Texas 

LAMAR ALEXANDER, Tennessee 

SUSAN COLLINS, Maine 

LISA MURKOWSKI, Alaska 

LINDSEY GRAHAM, South Carolina 

MARK KIRK, Illinois 

DANIEL COATS, Indiana 

ROY BLUNT, Missouri 

JERRY MORAN, Kansas 

JOHN HOEVEN, North Dakota 

RON JOHNSON, Wisconsin 

CHARLES J. HOUY, Staff Director 

BRUCE EVANS, Minority Staff Director 

SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG

ADMINISTRATION, AND RELATED AGENCIES

HERB KOHL, Wisconsin, Chairman 

TOM HARKIN, Iowa 

DIANNE FEINSTEIN, California 

TIM JOHNSON, South Dakota 

BEN NELSON, Nebraska 

MARK PRYOR, Arkansas 

SHERROD BROWN, Ohio 

DANIEL K. INOUYE, Hawaii (ex officio) 

ROY BLUNT, Missouri 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

SUSAN COLLINS, Maine 

JERRY MORAN, Kansas 

JOHN HOEVEN, North Dakota 

Professional Staff 

GALEN FOUNTAIN

JESSICA ARDEN FREDERICK

DIANNE NELLOR

STACY MCBRIDE (Minority) 

RACHEL JONES (Minority) 

Administrative Support 

MOLLY BARACKMAN-EDER
(III) 

C O N T E N T S 

THURSDAY, MARCH 29, 2012 

Page 

Department of Agriculture: Office of the Secretary .............................................. 1 

THURSDAY, APRIL 19, 2012 

Department of Health and Human Services: Food and Drug Administration ... 89 

MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS

Department of Agriculture: Office of Inspector General ...................................... 153 

Related Agency: Farm Credit Administration ....................................................... 158 

Nondepartmental Witnesses ................................................................................... 163 

(1) 

AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

FISCAL YEAR 2013 

THURSDAY, MARCH 29, 2012 

U.S. SENATE, 

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

The subcommittee met at 2:03 p.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Herb Kohl (chairman) presiding. 

Present: Senators Kohl, Pryor, Brown, Blunt, Cochran, Moran, 

and Hoeven. 

DEPARTMENT OF AGRICULTURE 

OFFICE OF THE SECRETARY

STATEMENT OF HON. THOMAS VILSACK, SECRETARY 

ACCOMPANIED BY: 

KATHLEEN MERRIGAN, DEPUTY SECRETARY 

JOSEPH GLAUBER, CHIEF ECONOMIST 

MICHAEL YOUNG, BUDGET OFFICER, OFFICE OF BUDGET AND 

PROGRAM ANALYSIS 

OPENING STATEMENT OF SENATOR HERB KOHL

Senator KOHL. The subcommittee will come to order. Today, we 

begin our first hearing on the fiscal year 2013 budget request for 

the U.S. Department of Agriculture (USDA). Secretary Vilsack, we 

thank you for being here. We also want to welcome Deputy Secretary Kathleen Merrigan, USDA Chief Economist, Joseph Glauber, and Budget Officer, Michael Young. We look forward to hearing from you today. The fiscal year 2013 budget request for the USDA is $18.3 billion. This represents a 7-percent increase over last year. Some programs are cut, while some programs are eliminated entirely. Several new initiatives are proposed and substantial increases are requested in some areas. 

The Women, Infants, and Children (WIC) program provides 

healthy food for women, infants, and children, and is increased by 

$422 million. This is mainly due to higher food prices. 

Public Law 480 program is reduced by $66 million. This is somewhat of a concern, as the humanitarian and food needs around the 

world, as we all know, have increased. 
2 

Our job is to review all the priorities in the budget ensure that 

programs vital to people’s health, safety, and livelihoods are adequately funded. We also need to make sure that tax dollars are 

spent wisely, as we all know we need to do more with less. 

The USDA is broad in scope and affects the lives of every American. Now, more than ever, it’s essential that we set the priorities 

correctly to ensure the Department is both effective, efficient, and 

also serves the American people in the proper way. 

We face many challenges this year, as we move through the appropriations process. I hope to work closely with the Department, 

so we can produce a responsible bill. 

We also very much look forward to working with Senator Blunt 

and all members of the subcommittee. I’d like to thank Senator 

Blunt for the helpful and the bipartisan manner in which we have 

worked together. This subcommittee has a tradition of working in 

a bipartisan manner, and I assure all members that we will continue that practice as we move forward. 

Secretary Vilsack, we thank you again for being here, and we 

look forward to your statement. Before that, I would like ask Senator Blunt for any comments that he may have. 

STATEMENT OF SENATOR ROY BLUNT

Senator BLUNT. Thank you, Mr. Chairman, and thank you for 

holding this hearing. I hope that with your leadership we can 

produce a bill again this year, and I’m going to do everything I can 

to be helpful in your efforts to get that done, as I believe others 

on the subcommittee will. It was good that the agriculture appropriations bill was the bill that became the host for the first appropriations bills that passed last year, and I hope we can do our work 

in the same manner this year. 

The President’s budget proposes a net increase in spending in 

the USDA. Of course, as our Nation’s debt increases, we have to 

look carefully at every part of the budget, including this one. But 

over the past year, the Agriculture subcommittee has made difficult 

and necessary decisions, as the Department has, including cutting 

discretionary spending by 15 percent. 

This year represents a significant anniversary for the USDA. It 

was 150 years ago, in 1862, that President Lincoln signed into law 

the bill that created the USDA. And today, the Department touches 

the lives of every American, every day. Activities undertaken by 

USDA include agriculture research, conservation, housing and 

business loan programs for rural communities, domestic and international nutrition programs, food safety, and trade promotion. 

The same year that President Lincoln signed the bill that created 

the USDA, he also signed a bill that was the Morrill Land Grant 

College Act. And over the course now of a century-and-a-half research and extension conducted at those land grant universities, 

and now others, has transformed American agriculture into the 

most innovative and productive in the world. As a result, agriculture remains the brightest spot in our country’s economy today. 

Last year, American farmers supported record agricultural exports and earned their highest income since the 1970s. U.S. farm 

exports alone helped support more than 1 million U.S. jobs in 2011. 

At the same time, however, USDA predicts farm income will de-
3 

cline by 6.5 percent this year, and recent studies show that farmers 

are less optimistic as surging fuel prices and increases in other inputs increase their costs. 

As we look ahead to fiscal year 2013, we have to be mindful of 

the important role that agriculture plays in our economic recovery. 

We have to make wise investments in those programs that will increase our agricultural community’s competitiveness here and 

abroad, and sound agricultural research is the cornerstone to success in all aspects of the agriculture industry, whether it’s developing more efficient production methods, eradicating pest and disease, developing biofuels, maintaining a safe food supply, or enhancing the nutritional quality of our diets, USDA is and will be 

involved. 

Agriculture research today makes it possible for one American 

farmer to feed 155 people. Continued investment in research will 

make it possible for us to meet the global food demand, which is 

expected to double, a number that always surprises me, but the 

global food demand expected to double by 2050. 

I’m pleased to see the Department has increases in its plans for 

research. These programs and others are critical to our farmers’ 

ability to increase production, and every $1 spent on research results in a $20 return to the U.S. economy. 

I’m glad the Secretary and his team are here today, and really 

believe that they are managing the Department in a really challenging time in a way that’s transparent, and effective, and forward looking. And Mr. Secretary, glad you could join us today. 

Senator KOHL. Thank you very much. 

Secretary Vilsack. 

SUMMARY STATEMENT OF HON. THOMAS VILSACK

Secretary VILSACK. Mr. Chairman, and Senator Blunt, and Senator Moran, thank you very much for the opportunity to appear 

today. You have my statement, and I would just simply ask for an 

opportunity to amplify on it just a bit. 

We want to thank the subcommittee for this opportunity, and we 

would like to start with a plea, and the plea is for an understanding that we need time and flexibility during these difficult 

times. 

While the budget that we propose does increase over last year, 

I would like to point out that it is several billion dollars less than 

it was in 2010. And that has resulted in us at USDA taking a look 

very carefully at the ways in which we expend taxpayer resources 

and are in the process of a variety of steps to try to make this a 

more efficient and more effective USDA. 

We need time to absorb the reductions that have taken place. We 

need time to fully implement our plans for additional savings, 

which includes a very top to bottom review of our administrative 

functions. And we need to have the opportunity and the flexibility 

to build on the success that we’ve experienced at USDA in the recent past. 

Senator Blunt mentioned the fact that we had record income last 

year. And while it is true that income is expected to be down just 

a bit, it will still be one of the best years in farm income in our 

history. It is a result of record exports, a record number of acres 
4 

enrolled in conservation, a record number of crop insurance programs, a record amount of credit extended to producers, homeowners, and businesses, a record amount of investment in biobased products, and a bio-based economy, as well as the expansion 

of local and regional food systems, a record investment in business 

growth in rural areas and community development, record lows in 

fraud and in error rates in many of our nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP), expanded food safety efforts, and expanded effort to improve the nutrition of American families, with a particular emphasis on our 

school children. And as Senator Blunt indicated, an expanded effort 

at agriculture research, which is extraordinarily important for us 

to be able to meet the growing demands, not here just in the 

United States, but also globally. 

This has required us to make some tradeoffs, and you’ll find that 

we actually had to make some difficult decisions concerning programs that were either duplicative, ineffective, inefficient, unnecessary, or in some cases, just inadequately funded to make a difference. We also had to take into consideration the impact of the 

farm bill discussions, which have just begun in the Senate and the 

House. 

We have very specific goals, and I’ll conclude with that. We want 

a Farm Service Agency (FSA) that provides appropriate credit and 

maintains a safety net for our producers. We want to continue to 

expand trade and to establish food security globally through our 

Foreign Agricultural Service. We want to promote job growth and 

improve quality of life and energy security through rural development. 

Through our food safety efforts, we want better food safety more 

focused on prevention, surveillance, and detection, and more rapid 

recovery and response. 

Through the natural resources portion of our budget, we want to 

expand technical assistance to landowners so that we can get conservation on the ground sooner, and we want to focus on some 

high-priority landscaped areas, so we can improve soil and water 

quality, increase wildlife diversity, work with our friends and 

neighbors in the sportsmen field to expand outdoor recreational opportunities. 

In the Marketing and Regulatory Programs (MRP) area, we’d 

like to continue our efforts at expanding local and regional food 

systems, as well as prioritizing animal and plant health. The research area, we want to continue to focus on our ability to maintain competitive targeted research towards priorities, and within 

the administration of our food programs, we want to continue to 

provide access while improving the integrity of each and every one 

of the programs. 

Finally, in the administration of the Department, we want to 

continue the cultural transformation efforts to improve employee 

moral, expand on our process improvement efforts, which is provided for a more efficient use of our time, realign our workforce 

through early retirement incentives, and consider taking a look at 

our footprint, which has involved some very difficult and tough decisions concerning office consolidations, and at the same time, con-
5 

tinue, as I indicated earlier, a fairly extensive process that’s looking at our administrative services. 

PREPARED STATEMENT

It has been a busy time at USDA, and we appreciate the subcommittee’s opportunity to appear today, and look forward to your 

questions. 

Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF HON. THOMAS VILSACK

Mr. Chairman and distinguished members of this subcommittee, I appreciate the 

opportunity to appear before you to discuss the administration’s priorities for the 

Department of Agriculture (USDA) and provide you an overview of the President’s 

2013 budget. I am joined today by Deputy Secretary Kathleen Merrigan, Joseph 

Glauber, USDA’s Chief Economist, and Michael Young, USDA’s Budget Officer. 

When I made my first appearance before this subcommittee, our country and the 

Department of Agriculture faced historic challenges. The economy had deteriorated 

significantly. It was a crisis that cost the United States more than 8 million jobs 

and plunged the economy and the world into a crisis from which we are still fighting 

to recover. Three years later, thanks to the President’s bold actions, the economy 

is growing again and creating millions of jobs in the private sector. Over the past 

22 months, the Nation’s businesses have created 3.2 million jobs. Last year, we 

added the most private sector jobs since 2005. 

I am proud to say that America’s farmers, ranchers, and producers have helped 

fuel the beginnings of the recovery. The establishment of the Department 150 years 

ago underscored the importance of agriculture and rural America to the country. 

What was true then remains true today—agriculture and rural America matter. Agriculture plays a fundamental role in our economy—responsible for 1 in 12 jobs. 

That’s not surprising, because at the time the Department was created, the Morrill 

Act established the partnership between USDA and the land grant universities. Because of this partnership, these institutions have graduated 20 million people, people who went on to jobs that built our economy. So, when American producers earn 

record income, as they did last year, everyone benefits through the creation of more 

jobs and higher wages, whether in food processing, packaging, or farm equipment 

manufacturing, the reduction of our dependence on foreign oil supplies, or the increased availability of more nutritious food. 

On February 10, 2012, I announced another record-breaking calendar year for 

farm exports. Total agricultural exports for calendar year 2011 were a robust $136.3 

billion. We saw a rise in both the value and volume of U.S. agricultural exports 

worldwide in 2011, as international sales rose $20.5 billion over the previous record 

set in calendar year 2010. Agricultural exports have supported the creation of over 

a million jobs. USDA has expanded markets for American goods abroad by working 

aggressively to break down barriers to trade and provide U.S. businesses with the 

resources needed to reach consumers around the world. Last year, we exported an 

all-time high of $5.4 billion worth of beef and beef products, surpassing the previous 

record by more than $1.6 billion. The volume of shipments also surpassed the 2003 

levels, the last year before a detection of bovine spongiform encephalopathy (BSE) 

disrupted U.S. trade. The return to pre-2003 levels marks an important milestone 

in USDA’s steadfast efforts to open and expand international markets. The ratification of the trade agreements with South Korea, Colombia, and Panama will increase 

U.S. farm exports by an additional $2.3 billion—supporting nearly 20,000 American 

jobs—by eliminating tariffs, removing barriers to trade and leveling the playing 

field for U.S. producers. 

Agriculture has also led the development of our bio-based economy, where what 

we grow and raise is used to make fuel, chemicals, and polymers to complement our 

traditional production of food, feed, and fiber. Resilient, hard-working rural residents provide a model for creating economically thriving communities, which underscores why the unemployment rate is dropping more quickly in rural America than 

anywhere else in the country. 

At USDA we have been working to fulfill President Obama’s vision for a Nation 

where everyone gets a fair shot and an economy that makes, creates and innovates. 

We have been working to implement the President’s vision by laying a foundation 

for sustainable economic growth and job creation. USDA is at the forefront of devel-
6 

oping the technology and tools necessary to transform rural America so that it can 

create and take advantage of new economic opportunities. 

We have generated rural wealth with our conservation and rural development 

programs. These programs help create green jobs, improve recreation and tourism, 

and facilitate the production of renewable energy. We have maintained a strong agriculture safety net through a system of income support, disaster mitigation, and 

a record number of farm loans. 

The Department has programs to help people in need by ensuring that they have 

access to a plentiful supply of safe and nutritious food. This is fundamental to the 

healthy development of every child in America and to the well-being and productivity of every family. In recent years, the Supplemental Nutrition Assistance Program (SNAP) has helped millions of families meet basic nutritional needs. The program currently serves as a bridge to recovery for over 46 million Americans who 

are at risk of being hungry when they face challenging economic times. More than 

half of those who rely on the program are children, elderly, or the disabled, and 

many participants are newly unemployed who may have never thought they would 

need this assistance. 

While SNAP has increased steadily since its last low point in 2000, and sharply 

during the recent economic downturn, the rate of increase has been declining since 

January 2010. And now, we estimate that rising employment and household income 

will reduce participation in SNAP in 2013, even as the program serves a larger 

share of those eligible. This is how the program is designed to work; participation 

rises during difficult economic times and falls in better times. Even under this period of rapid growth in participation, this administration has achieved historically 

high accuracy rates in SNAP, saving the taxpayer billions of dollars. We will continue to make improvements that protect program integrity, even as Federal and 

State budgets for oversight of the program are declining. 

We have accomplished a critical step on the road to deliver healthier, more nutritious food to our Nation’s schoolchildren and to help them develop healthy eating 

habits for life. On January 26, 2012, we published the final rule that refines and 

improves the standards for meals available to over 51 million school children across 

the country every day. The new rule implements provisions of the Healthy, HungerFree Kids Act of 2010 that are simpler and less burdensome than the ones they replace. The rule substantially increase offerings of fruits, vegetables, and whole 

grains; reduce saturated fat, trans fats and sodium; and set sensible calorie limits 

based on the age of children being served. Our understanding of the nutritional 

quality of food is built upon USDA science. We have seen the connection between 

what our kids eat and how well they perform in school. And we know that America’s 

success in the 21st century is dependent on having the best-prepared and best-educated workforce in the world. So it is critical that that all children have the basic 

nutrition they need to learn, to grow, and to pursue their dreams. 

These are just a few of the ways that USDA is helping to create jobs and work 

towards an economy built to last. But it’s going to take more to keep moving forward, and that’s the goal of President Obama. 

I share the President’s vision for investing in activities that promote economic 

growth, while reducing our deficits over the long-term. We need to cut what we can’t 

afford in order to pay for what really matters, but in a way that does not hamper 

growth or prevent us from helping businesses and American families that need assistance. At USDA we recognized, like families and businesses across the country, 

that we could not continue to operate as we did in the past and that we must innovate, modernize, and be better stewards of the taxpayers’ dollars. 

Over the past decade, USDA has seen an increase in program complexity and demand for services while staffing has decreased. Therefore, for fiscal year 2012, I led 

a Department-wide review of operations to make USDA work better and more efficiently for the American people. Agency leaders took a hard look at all their operations, both in headquarters and field offices. The result was our Blueprint for 

Stronger Service. The plan identifies administrative efficiencies, office closures, and 

targeted staffing reductions, to help us deal with reductions in funding. This plan 

will create optimal use of USDA’s employees, better results for USDA customers, 

and greater efficiencies for American taxpayers. 

Under the Blueprint for Stronger Service, USDA is reducing expenditures for certain IT products, supplies, travel, printing, and other services. The Blueprint also 

calls upon USDA to strengthen its administrative services. Under this initiative, the 

Department identified 379 recommendations for improving USDA’s office support 

and operations, which includes ways to streamline the provision of administrative 

services, such as civil rights, information technology, finance, human resources, 

homeland security, procurement, and property management. Twenty-seven initial 

improvements have been identified for first-phase implementation of this project 
7 

that will realize efficiencies through improved administrative services, such as 

leveraging USDA’s size through strategic and volume purchases as is demonstrated 

by the consolidation of over 700 cell phone plans down to approximately 10. 

To realize further efficiencies, USDA has proposed closure of 259 domestic offices, 

facilities, and labs across the country, as well as seven foreign offices while ensuring 

that the vital services they provide are not diminished. In some cases, the offices 

being closed are no longer staffed or are staffed by one or two people; many are 

within 20 miles of other USDA offices. In other cases, technology improvements, advanced service centers, and broadband service have reduced the need for brick and 

mortar facilities. 

Last year, many agencies put hiring controls in place, followed by voluntary early 

retirement programs and targeted separation incentive programs. We have offered 

these programs on a broader basis in fiscal year 2012. Over the last 15 months, 

nearly 7,800 people have elected to take advantage of regular and early retirement 

opportunities. These departures have provided agencies the flexibility to eliminate 

or restructure positions to be more relevant to customer needs. Many of the vacated 

positions will not be refilled, and many of those refilled will be at lower grades than 

before. We opted to manage change rather than implement reductions-in-force or 

furloughs, which would have disrupted services that matter to the public. 

When fully implemented, these immediate actions along with other recommended changes will generate efficiencies valued at about $150 million annually. Further 

improvements are expected based on the realignment of the workforce. Most important, these actions will ensure that USDA continues to provide an optimal level of 

service to the American people within available funding levels. Ultimately, the Blueprint for Stronger Service will allow us to manage change in a way that allows us 

to provide a high level of services despite reduced operating budgets. 

I have made it a priority to transform USDA into a high-performing and diverse 

organization. Under our Cultural Transformation initiative, we are focusing on improving several aspects of employee culture, including leadership accountability, employee development, talent management, labor relations, customer focus, and diversity of the workforce. By strengthening management operations and engaging employees, USDA will also improve customer service; increase employment satisfaction; and implement strategies to enhance leadership, performance, diversity, and 

inclusion. 

This in-depth evaluation and improvement of our operations provided a firm foundation for us to develop the fiscal year 2013 budget. For 2013, the budget we are 

proposing reflects the difficult choices we are making to control spending, while 

maintaining investments that are critical to long-term economic growth and job creation. 

In total, the 2013 budget we are proposing before this subcommittee is $141 bil- lion, an increase of $6.9 billion above the 2012 estimate. Of the increase, $6.4 billion 

is for mandatory programs, due primarily to a one-time shift in the timing of certain 

crop insurance costs mandated by the 2008 farm bill. The budget also increases 

funding for the nutrition assistance programs to fully fund estimated participation 

levels. As we continue to create jobs and grow the economy, fewer families will need 

nutrition assistance. 

For discretionary programs, our budget proposes $19.3 billion, approximately $478 

million above the 2012 level. The majority of the increase is for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) and agricultural 

research. The discretionary funding request reflects the Department’s continued efforts to innovate, modernize, and be better stewards of the taxpayers’ dollars. Discretionary spending is partially offset through about $1 billion of proposed limits on 

selected mandatory programs and other adjustments. For 2013, further administrative efficiencies, realignment of staff, and other actions are proposed to reduce costs. 

In addition, the budget proposes to reduce or terminate selected programs and reallocate resources to fund targeted investments in priority programs and infrastructure to provide a foundation for sustainable economic growth. 

This budget provides the resources we need to effectively deliver the level of service our customers and your constituents expect from USDA—whether it is applying 

for a farm operating loan, enrolling more acres into conservation programs, supporting business creation, seeking nutrition assistance, or any of the multitude of 

services provided by our dedicated workforce. Any further reduction in funding for 

our back office operations would significantly impair our ability to deliver critical 

services and would imperil our efforts to manage an increasingly complex workload 

with less money and fewer workers. 

Reducing the deficit is a critical part of the President’s economic plan. The longterm stability of the economy depends on whether we have the will to act now. 

Farmers and ranchers know the importance of a healthy economy, which raises in-
8 

comes and increases demand for their products. Therefore, the 2013 budget reflects 

the President’s Plan for Economic Growth and Deficit Reduction. The President’s 

plan reduces the deficit by $32 billion over 10 years by eliminating direct farm payments, decreasing crop insurance subsidies, and better targeting conservation funding to high-priority areas. 

As Congress initiates its deliberations on the reauthorization of the farm bill, we 

must remember that American agriculture has achieved its success today because 

of the policies and the investments that have been made over many decades. We 

are here because we’ve maintained a strong safety net so there is adequate financial 

help when times are tough and disaster strikes. We have supported research that 

has led to a significant increase in agricultural productivity and promoted vibrant 

markets. We are also here because policies in the farm bill for research, renewable 

energy, and broadband are providing rural America the tools to take advantage of 

new economic opportunities. Statutory authority for all disaster programs expired 

on September 30, 2011; accordingly, USDA cannot provide assistance through these 

programs to producers for losses due to natural disasters occurring after that date. 

As the farm bill is drafted, I encourage Congress to provide USDA the tools and 

the flexibility needed to address the challenges faced by American producers. 

Our 2013 budget protects the farm safety net, while achieving the President’s goal 

for deficit reduction. Income support programs, including 2012 direct payments, 

2013 counter-cyclical payments, and Average Crop Revenue Election (ACRE) payments, are expected to total about $4.9 billion and outlays under the Federal crop 

insurance program are projected to reach $9.3 billion. Despite a strong farm economy, demand for USDA farm loans remains strong due, in part, to tighter private 

credit standards including higher down-payment requirements. The 2013 budget 

provides nearly $4.8 billion for loans to meet the expected demand for financing. 

The requested loan levels will serve nearly 30,000 farmers. 

In order to better serve producers with faster and simpler service, the budget continues to fund IT modernization activities of our Farm Service Agency (FSA). This 

investment will improve the Agency’s ability to deliver increasingly complex farm 

program benefits, securely, reliably, and rapidly. Since 2003, staffing levels at FSA 

have declined over 30 percent, making investments in IT infrastructure even more 

important. 

One of USDA’s most important objectives is to protect our abundant natural resources. Over the last 3 years, we enrolled a record number of acres of private working lands in conservation programs. These programs help to preserve the soil, improve water quality, and promote wildlife diversity and add hundreds of millions of 

dollars to local economies in rural areas. For 2013, the budget provides approximately $6.2 billion to support approximately 358 million acres in farm bill conservation programs. 

For the Natural Resources Conservation Service (NRCS), the 2013 budget proposes $828 million for conservation operations. NRCS will continue efforts to leverage technical assistance funds through agreements with its traditional partners, 

such as conservation districts, as well as with nonprofit organizations and State and 

local agencies. This approach of voluntary conservation works. That is why we are 

embracing locally driven conservation programs and entering partnerships that 

focus on large landscape-scale conservation programs, such as the Chesapeake Bay, 

the Bay-Delta region in California, the Mississippi River Basin, Gulf Coast, and the 

Great Lakes. 

Our budget for 2013 contributes significantly to the economic growth goals of the 

White House Rural Council by continuing to fund programs that promote renewable 

energy, job training, infrastructure investment, access to capital, and green jobs 

throughout rural America. Approximately $6.1 billion in direct loans will be made 

available to support the transformation from fossil fuels to cleaner technologies. Allowing financing for environmental upgrades will support the continued development of a national clean energy strategy. Almost $1 billion in loans will be used 

to support rural business and entrepreneurs, which will put more people back to 

work. USDA’s efforts, including a regional approach to wealth and job creation, is 

one reason why the unemployment rate is dropping more quickly in rural America 

than anywhere else in the country. We are giving renewed opportunity to the nearly 

50 million people who live in those areas who don’t necessarily farm. 

Cutting edge research remains key to the United States retaining its competitive 

edge and global leadership in agricultural productivity—estimated to need to increase 70 to 100 percent by 2050 to meet growing global demands for food. The correlation between research and improved productivity could not be clearer. As a result of research at USDA, our land grant universities, and the private sector, American agriculture ranks second in productivity gains of all segments of the U.S. economy since 1980. Over the past 60 years, yields per acre of major crops—corn, soy, 
9 

wheat, and cotton—have doubled, tripled, and in some cases even quadrupled. At 

the same time, livestock production and specialty crop production have become far 

more efficient. These incredible productivity gains were achieved through a sustained investment in research. We will continue to support a robust research program that will ensure sustainable agricultural production, economic growth for 

growers and greater choice for consumers. The 2013 budget proposes funding of 

$325 million for the Agriculture and Food Research Initiative (AFRI), an increase 

of $60.5 million, and $1.1 billion for our Agricultural Research Service (ARS). We 

will continue to focus additional research dollars in key areas, such as biofuel feedstocks, livestock and crop production and protection, and enhancing American agriculture’s ability to meet growing global demand sustainably. 

Because we are still in a recovering economy, USDA recognizes the need to support those in need by ensuring access to safe and nutritious food, which is essential 

to the healthy development of every American child and to the well-being and productivity of every American family. The budget fully funds the expected requirements for the Department’s three major nutrition assistance programs—WIC, the 

National School Lunch Program, and SNAP. 

The Department has had great success in promoting healthy eating habits and 

active lifestyles. Too many adults and children have poor diets and gain excessive 

weight contributing to poor health and increased medical costs. The Centers for Disease Control and Prevention data show that the prevalence of obesity among children tripled from 1970 to 2008 and it doubled among adults. However, data for 

2009–2010 show the obesity rate for both children and adults has stopped increasing. Policies aimed at increasing access to more nutritious diets, promoting eating 

habits consistent with the Dietary Guidelines and encouraging healthy lifestyles are 

partly responsible for this change. 

One of the key challenges for providing healthier school meals is to modernize cafeteria equipment appropriately so schools can prepare attractive, wholesome meals 

with more whole grain, fruit and vegetables, and less fat and saturated fat. Helping 

schools to upgrade the nutritional quality of meals served is essential. So an important part of the budget request is $35 million to continue competitive grants to help 

schools purchase equipment to serve healthier meals as well as to expand the breakfast program. These grants will help about 10,000 schools across America. 

The budget not only supports domestic food assistance, but also provides $1.4 billion to support programs that further the administration’s global food security objectives, including those supporting preschool and school feeding programs carried out 

under the McGovern-Dole International Food for Education and Child Nutrition 

Program. In fiscal year 2013, the McGovern-Dole program is expected to benefit 

more than 4 million women and children. Through the U.S. Government’s leadership in global food security, we advance global stability and prosperity by improving 

the most basic of human conditions—the need that families and individuals have 

for a reliable source of quality food and sufficient resources to purchase it. 

The Obama administration and USDA are committed to partnering with rural 

communities to increase their economic competitive by helping them provide residents access to quality healthcare services, modern library facilities and school 

buildings, and reliable emergency equipment and services. Financing totaling $2 billion, an increase of approximately $700 million, will provide assistance to over 1,700 

rural communities. Investing in rural communities is essential for growth and job 

creation. 

Helping rural residents obtain safe and affordable housing is also a key to maintaining stable communities and creating jobs. The 2013 President’s budget requests 

a significant level of funding for housing programs. USDA continues to request that 

single family housing assistance be provided primarily through loan guarantees. 

The 2013 budget includes funding to support $24 billion for guaranteed loans. 

USDA’s single family housing direct loan program is funded at $653 million, and 

will be targeted to teachers in rural areas, and very-low-income recipients of mutual 

and self help grants. These funds will create job opportunities and make the dream 

of home ownership a reality for over 184,000 families in rural America. 

Since the founding of President’s Obama’s Food Safety Working Group in 2009, 

USDA has collaborated extensively with other Federal partners to safeguard the 

food supply, prevent foodborne illnesses and improve consumers’ knowledge about 

the food they eat. USDA is working to strengthen Federal efforts and develop strategies that emphasize a three dimensional approach to prevent foodborne illness: 

Prioritizing prevention; strengthening surveillance and enforcement; and improving 

response and recovery. Between 2000 and 2010, USDA reached a national goal of 

reducing E. coli rates by 50 percent, largely because of strengthened beef safety policy and enforcement. In 2011, stricter Salmonella and Campylobacter performance 
10 

standards were implemented to reduce these pathogens in turkeys and young chickens, which are expected to prevent as many as 25,000 foodborne illnesses annually. 

Despite this success, we can and must do a better job of ensuring the safety of 

meat and poultry products regulated by USDA, but we need to do it more efficiently 

and effectively. The Food Safety and Inspection Service (FSIS) recently published 

a proposed regulation that will prevent thousands of food-borne illnesses, streamline 

poultry inspections, and reduce spending by approximately $90 million over the first 

3 years of implementation. We will revise current procedures and remove outdated 

regulatory requirements that do not help combat foodborne illness. The new procedures will use taxpayer dollars more effectively and efficiently; even with these program efficiencies, the budget includes approximately $1 billion for FSIS. 

The economic vitality and quality of life in rural America and the U.S. economy 

at large depends on a competitive, efficient, and productive agricultural system. In 

an era of market consolidation and intense competition, producers rely on fair and 

open access to markets and control over their decisions to thrive. Producers also rely 

on animal and plant resources being protected against the introduction of foreign 

agricultural pests and diseases. For 2013, the budget includes over $880 million in 

discretionary funding to improve agricultural market competitiveness and production for the overall benefit of consumers and producers. 

We have taken a close look at the budget for the Animal and Plant Health Inspection Service and have proposed a number of program reductions and implemented 

identified program efficiencies to ensure that scarce resources are being used efficiently. The budget achieves savings through a variety of means. It includes decreases for activities where eradication campaigns have been successful, such as boll 

weevil, and for pests and diseases where management is currently more prudent 

than eradication, such as emerald ash borer. Savings are also possible in animal disease testing while still meeting international standards. Further, the budget 

achieves other savings by acknowledging the role of the producer and other cooperators to directly reduce certain pests and diseases, such as Johne’s disease. The budget also proposes modest increases to improve overall animal disease traceability and 

to provide protections against animal diseases that could impact human health. At 

the requested budget level, we estimate we will prevent and mitigate about $1.18 

billion in damages as a result of selected plant and animal health monitoring and 

surveillance efforts. 

USDA’s central Departmental Management provides human resource, procurement, information technology, and financial management oversight and services to 

agencies. Departmental staff offices provide legal and economic support, communications coordination, and program appeal hearings for the Department’s program activities. These activities are vital to USDA’s success in creating opportunities for 

America’s farmers, ranchers, and rural communities. The 2012 appropriations act 

made deep cuts in funding for these offices. Under these reduced funding levels, we 

took prudent actions to maintain critical functions needed to support the agencies’ 

effective delivery of program operations. But further reductions in these areas cannot be sustained without deterioration in service. For 2013, the budget proposes 

funding to ensure that these offices maintain the staffing levels needed to provide 

leadership, oversight, and coordination. These efforts are critical to making the Department an efficient and effective organization. 

Since coming to USDA, I have made it a priority to resolve all of the civil rights 

cases facing the Department which the administration inherited. During this time, 

we have resolved large-scale class action lawsuits involving allegations of past discrimination by Black and Native American farmers and ranchers and provided an 

additional path to justice for women and Hispanic farmers and ranchers who allege 

discrimination. We have corrected past errors, learned from mistakes, and charted 

a stronger path for the future where all USDA employees treat all Americans with 

dignity and respect. The 2013 budget builds upon our progress by increasing funding for selected key priorities that will improve USDA’s handling of civil rights matters and will address claims of potential discrimination in the delivery of programs. 

In conclusion, the President is deeply committed to reducing the deficit so that 

the economy can continue to grow over the longer term. This is a responsible, balanced budget that continues to meet key priorities and is consistent with the President’s commitment. We will continue to achieve significant progress in administering more complex programs with fewer staff and resources by adopting reforms 

that will improve our programs and service to our customers. 

At this time, I will be glad to answer questions you may have on our budget proposals. 

Senator KOHL. Thank you very much, Secretary Vilsack. 
11 

WIC PROGRAM FUNDING

Mr. Secretary, the fiscal year 2013 budget includes $422 million 

increase for WIC. Do you believe this budget is sufficient to cover 

the demand for the WIC program? How will the Department adjust 

should cost food costs and participation increase in 2013? 

Secretary VILSACK. Mr. Chairman, we do believe it is adequate. 

We do believe it’s based on accurate estimates. We’re a bit off this 

year, and so we wanted to be doubly sure that we focused on maintaining the WIC program so that there weren’t waiting lines. We 

know that’s something the Congress does not want us to have. But, 

also point out that we are expecting and anticipating that the food 

inflation will be moderate in comparison to last year. We saw fairly 

significant spikes at various points in time. We don’t expect to see 

quite the high level of food price increases that we experienced last 

year. So, we do believe that that estimate is accurate. 

SNAP CONTINGENCY FUND

Senator KOHL. Mr. Secretary, the food stamp program, which is 

now called SNAP, saw a $2 billion increase to its contingency fund. 

This is not a small amount of money. Why is this additional 

amount of money needed, given the current state of the economy? 

Do you envision using any of the contingency? 

Secretary VILSACK. Mr. Chairman, what we have seen with reference to SNAP is a plateauing of our SNAP numbers, which is obviously a good sign, may very well be reflective of the fact that 

we’re beginning to see an improved economy. 

Having said that, as noted earlier, high energy costs could potentially derail that recovery, and so we want to be in a position that 

if things don’t continue to proceed in a positive way that we can 

respond to the nutritional needs of families, and also continue to 

focus on the fact that their nutrition assistance programs are not 

just for the struggling families, but it is, in a sense, part of the 

overall program to ensure the safety net for our producers. Sixteen 

cents of every food dollar goes into a farmer’s pocket. So, as we look 

at the totality of our support, and help, and assistance for our 

farmers and producers, you have to look at all of the programs, including SNAP. 

SNAP PROGRAM INTEGRITY

Senator KOHL. Mr. Secretary, over the past few months we’ve 

heard a lot about the integrity of the SNAP program. This program 

provides a crucial safety net for millions of people. We certainly 

need to ensure that this program is managed in the most effective 

and efficient manner possible. What is your Department doing to 

address waste, fraud, and abuse in this program? 

Secretary VILSACK. Mr. Chairman, let me start off by pointing 

out that the fraud rates and the error rates are at historic lows. 

We’ve taken a number of steps. 

First, as it relates to individuals, we have in place a program 

that will allow us to check against death records, Social Security 

records, et cetera, to make sure that people are not inappropriately 

using other’s identity. We also have a program for those individuals 
12 

who live near border States to ensure that they don’t try to collect 

in a number of States. 

I will tell you that in 2010, our latest numbers, nearly 800,000 

investigations were conducted by States, in terms of individuals, 

and more than 44,000 individuals were disqualified from the program as a result of being disqualified in those inspections. 

We have looked at approximately 15,000 businesses, stores, and 

we have an alert program, which allows us to begin looking at 18 

different demographic factors and demographic pieces of information and data about how SNAP proceeds are being processed. 

For example, if we see a continuation of even no-cent purchases, $35, $50 even, that is a tip-off for us to really do a more thorough 

investigation of how the program is being utilized. 

We are also making sure that if a location is disqualified from 

the program, that there’s not a transfer of ownership that is basically hiding the previous owner, so we’re going into greater detail 

in terms of looking at the paperwork of these transfers. 

So, we take all of this very, very seriously. We understand it’s 

important and necessary to maintain the integrity of these programs. While we are pleased that we are at record lows, we’re not 

satisfied. We want to continue to work to ensure the integrity of 

these programs. 

FOOD SAFETY AND INSPECTION SERVICE POULTRY INSPECTION

Senator KOHL. Thank you. The Food Safety and Inspection Service (FSIS) program, is responsible for ensuring that the Nation’s 

commercial supply of meat, poultry, and processed egg products is 

safe and wholesome. This is done to a large degree by Federal inspectors and meat processing plants. However, FSIS’s budget includes a $13 million cut in funding associated with implementing new methods of poultry inspection and 

reducing staff by 500 employees. Certain inspection responsibilities 

would shift from Federal inspectors to company employees. 

In light of continuing outbreaks of food-borne illness, we’re concerned that this decision may put consumers at risk solely for 

budget savings. Do you believe this new inspection method will 

keep our food safe? What training will be required of company employees prior to assuming these new tasks? 

Currently, FSIS inspectors can evaluate up to 35 birds per 

minute. The new process is supposed to be five times faster, and 

is this safe for workers? 

Secretary VILSACK. Mr. Chairman, thank you for asking that 

question. First of all, let me suggest to you that we believe that 

this process will actually make the food safer, not as safe, but 

safer. And the reason for this is, based on the fact that we have 

had a number of pilot facilities around the country for a number 

of years use this new system that we’re proposing, and from that, 

the data suggests that we can save 5,200 food-borne illness 

incidences as a result of this new system. 

Second, it’s important to know that essentially what we’re doing 

in terms of company inspection is not so much in terms of food inspection and in terms of food safety, it has more to do with the cosmetic appearance of the poultry. At the beginning of the process, 

we are currently using individuals to look for defects in the cos-
13 

metic nature of poultry, which we think is really more about the 

marketing of the product, not the safety of it. 

What we’d like to be able to do is to have the company assume 

that responsibility for cosmetic review, and then shift the responsibility of the people that we currently have on that line to taking 

a look at the locations along the line where the hazards are greatest, and beef up that effort. 

It is true that this will result ultimately over time in roughly 500 

to 800 fewer positions, but it will also result in more than 1,000 

people actually receiving a higher paying job and a more sophisticated job, for which there will be additional training. We expect 

and anticipate that this will be factored in or phased in over a couple-of-years period in order to ensure the training is accurate. 

As it relates to the worker safety question, we are going to institute a study at the beginning of this process. We have a study, but 

we want to make sure that the results of that study are verified. 

And we are going to essentially look at a very complicated review 

of the safety of workers. If we see a problem with the safety, we 

will obviously adjust accordingly. 

The last thing I would say is that this whole process, this review 

process, this inspection process has been peer reviewed. And I 

think that the review suggests very strongly that this will actually 

result in a safer system, a safer food supply. It just happens to also 

save money for the Government and for the companies, but it is 

primarily for food safety that we’re looking at this. 

Senator KOHL. Thank you, Mr. Secretary. 

Secretary VILSACK. Thank you. 

Senator KOHL. Senator Blunt. 

Senator BLUNT. Thank you, Chairman. 

WIC PROGRAM INCREASES IN CALIFORNIA

Mr. Secretary, in the WIC program, I think there’s been, particularly in California, an increase in costs. It’s the largest program, 

of course, but it’s increased a whole lot faster than in other States. 

And I wonder if you could tell us a little bit about what you’re 

doing to look at that, and what might be the cause for that. 

Secretary VILSACK. Senator, there may be a number of reasons, 

but the one that concerns us the most is that there are very, very 

small stores that have dramatically overpriced products in the WIC 

package. And we have advised the State of California that this has 

taken place. We have asked the State of California to first and foremost stop any further approvals or permission for those sized 

stores to continue to participate in the WIC program. We’ve asked 

them to review their protocols for the analysis of those smaller 

stores, and we have been advised by the State of California that 

they will be coming up with a new regime this spring that will address in a very serious way, in a very concrete way, and a very 

quick way, the fact that there have been stores that have taken advantage of folks, and taken advantage of this program. 

So, that’s one of the concerns that we’ve had, and we’ve notified 

the State, the State has responded, and they are in the process of 

fixing the problem. 

Senator BLUNT. Just a curiosity here. I’m glad you’re looking at 

this carefully, and it sounds like you’re working with them to solve 
14 

it. Do these stores have a different section for WIC customers, or 

do they just assume that most people won’t buy the more expensive 

gallon of milk, the more expensive loaf of bread, or whatever 

they’re pricing at this higher rate? 

Secretary VILSACK. Senator, I’m not sure if they have a different 

section. My understanding was, and I could be wrong about this, 

that this was sort of mixed in with their overall operation, and basically taking a fairly significant advantage of folks. When we’re 

seeing the price of various items being two, three, four, maybe even 

higher at times what you would normally see in a regular grocery 

store. And I think one of the keys for us, as this is—— 

Senator BLUNT. Did you say two, three, or four times as high? 

Secretary VILSACK. Or higher. 

Senator BLUNT. To understand this, if you’re a WIC recipient, 

you have a coupon that allows you to get this product that has 

nothing to do really with the price of the product where you buy 

it. 

Secretary VILSACK. That’s correct. And then the grocery store or 

the convenience store puts in a bill, if you will, for reimbursement 

for that, and were charging a substantial amount for that product 

far, far in excess of what the market was currently charging for 

that product, whether it be cereal, or whatever it might be. 

We noticed this in our review of the data, and we contacted the 

State and said this is a serious problem. First and foremost, what 

we are going to tell you is we don’t want any further businesses 

of this size, if you will, in these high-risk areas to basically be permitted, and then second, we want you to take this very seriously 

and rethink the way in which you are providing oversight. As you 

know, these programs, the administrative oversight is initially at 

the State level to provide oversight so that this doesn’t happen. 

And, again, I think California did respond. Governor Brown and 

his team have looked at this, and they said, yes, you’re right. This 

is not right. We’re going to fix it, and we’re going to fix it quickly. 

Senator BLUNT. Do you feel like this might be happening on 

maybe even a lesser level, but in other places? 

NUTRITION PROGRAMS FRAUD DETECTION

Secretary VILSACK. I’m not aware of it happening in other States, 

Senator. I know that we’re looking at this, and being careful about 

it. And the point I would make, with reference to nutrition programs, generally, is—as we look at the farm bill, and as we talk 

about this issue—I think we need to take a look at the definition 

of stores that qualify for these various programs, because right now 

we see a lot of issues with relatively small facilities. That’s where 

many of our concerns are relative to error rates or fraud in many 

of these nutrition programs. So, I think we really need to be careful 

about the permission we grant. There are more than a quarter-ofa-million stores, for example, that provide SNAP, and a relatively 

small percentage of those stores sell a disproportionate amount of 

SNAP food. It’s maybe less than 20 percent sells 80 percent of the 

food. That type of ratio. So, I think we need to really take a look 

at that. 

Senator BLUNT. I’m going to ask a technology question next, so 

it may be the answer. 
15 

Is there any way your system can monitor whether some area is 

way out of bounds on pricing of specific products? 

Secretary VILSACK. I think there is. Certainly, in a couple of programs we do have that review, and we’re continuing to look at 

ways in which we can mine data that we collect to be able to identify problems, as I said earlier. 

For example, if we see a store where there are a lot of even pur- chases. I mean no one goes into a grocery store and gets $35 worth 

of groceries. They get $35.18 or $35.16. We see a pattern of that. 

That gives us a tip that there’s a problem there, and that triggers 

a review and investigation. 

Senator BLUNT. And you say for both WIC and SNAP this is 

something that you’re watching carefully. 

Secretary VILSACK. Yes. And that’s why we had 15,000 store reviews. That’s why we had nearly 800,000 individual investigations 

and reviews, in terms of the program. And that’s why several hundred stores were disqualified, and 44,000 individuals were taken off 

the program. And that’s why our fraud rate and our error rate are 

at historic lows. 

Senator BLUNT. On technology, I thought about that. I thought 

well, I probably ought to go to this technology question, too. 

FARM SERVICE AGENCY INFORMATION TECHNOLOGY

With the FSA offices, I understand the technology there has been 

about as old as any technology anybody’s still using, and to some 

extent, individual farm records were essentially captive to whatever machine they were in 1984, or whatever. You could tell me 

more about this. The Modernize and Innovate the Delivery of Agricultural Systems (MIDAS) program is the program that would upgrade that? 

Secretary VILSACK. That’s correct. And we spent the last several 

years, with the resources provided by this subcommittee, building 

the design for the new system. And the good news, this year we’ll 

begin to see actual on-the-ground construction or building of the 

system, starting with acreage reports, and starting with some of 

the farm record development as a strong foundation. And then the 

following year, we will build on top of that foundation, and hopefully, within the next year or 2, our farmers will begin to see a 

much more convenient approach from the FSA offices. And hopefully, we will get to a point in those places where there’s sufficient 

broadband Internet access that folks can work literally from their 

homes. 

Senator BLUNT. From their home. Now, my belief is that the 

equipment that the FSA office has been using is like mid-1980s. 

Secretary VILSACK. It’s not so much the equipment. It’s the software. 

Senator BLUNT. It’s the software system. 

Secretary VILSACK. Yes. And so when you have a farm bill every 

5 years, what happens is oftentimes those systems, many of them 

have to be manually coded, if you can imagine that. And that’s why 

it takes a long time to implement things. But, MIDAS is designed 

to address that. And it’s taken a number of years to do it right, a 

lot of feedback from those who work on the ground, in the field, to 

make sure that we design it properly, and to test it properly. 
16 

Senator BLUNT. And this has almost $12 million in it. Would 

that complete MIDAS? 

Secretary VILSACK. Oh, no. No. No. It’s far more than that, Senator. This is a very, very significantly expensive operation. 

Senator BLUNT. There’s a $12 million increase, though. $11.78 

million, I guess. 

Secretary VILSACK. We are asking for a substantial increase this 

year. Just to give you a sense of this, the implementation, in fiscal 

year 2011, we asked for $45 million. In fiscal year 2012, it’s $112 

million. And the reason it goes from $45 million to $112 million is 

because we’re not actually building the infrastructure to do this. 

And we’re going to build the foundation this year, and a lesser 

amount next year should complete the process. 

Overall, we had anticipated and estimated years ago that this 

would cost several hundred million dollars, and that estimate is 

going to be correct. 

Senator BLUNT. So, in fiscal year 2012, the budget year we’re in 

right now, this is the big year for MIDAS. 

Secretary VILSACK. This is the big year. And fiscal year 2013, 

we’re reducing it, but it’s still a substantial amount of money. It’s 

nearly $100 million. So, it’s less than this year, but it’s still substantially more than the previous years, because we’re now building it, as opposed to designing it and testing it. 

Senator BLUNT. And this is more of a software problem than a 

hardware problem? 

Secretary VILSACK. That’s my understanding. I’m not a technical 

expert, and maybe someone here on the panel can amplify on this. 

But it’s primarily—— 

Senator BLUNT. No one’s raising their hand on the panel. 

Secretary VILSACK. It’s primarily. 

Secretary BLUNT. You’re on your own. 

Secretary VILSACK. It’s, as I understand it, primarily a software 

issue. If I’m wrong about that, we will let you know. But the reality 

is, it is an expensive proposition, but eventually, it should get to 

the point where if you have Internet access, you will be able to be 

at your kitchen table, call up your files, and basically be able to 

work with FSA offices online. That’s the goal. 

[The information follows:] 

MIDAS focuses on software, specifically adapting commercial-off-the-shelf software (COTS) to run Farm Program applications in a Web-accessible environment. 

The Department’s Common Computing Environment (CCE) focuses on refreshing 

the system hardware and upgrading the network used by the USDA Service Centers. 

Regarding MIDAS, the Farm Service Agency (FSA) has completed the initial design for MIDAS, which includes business requirements documentation, design of reengineered processes, improved access to data, and creation of a network comprised 

of Service Center employees to ensure the new software meets the needs of the business. The MIDAS Program is now in the build phase, during which the system software is configured to meet the requirements, and all technical components are set 

up and tested. 

In fiscal year 2012 the emphasis of CCE is network optimization which is the effort to replace the aging infrastructure—desktop computers, servers, data storage 

capacity, bandwidth to support applications—to ensure that the core network infrastructure meets the demands of many of USDA’s and FSA’s IT modernization efforts 

including MIDAS. At completion, it will be possible for farmers and ranchers to access MIDAS online, via Internet access, e.g., ‘‘from your kitchen table.’’ 
17 

FARM SERVICE AGENCY OFFICE CONSOLIDATION

Senator BLUNT. Now, if you go to a new FSA office, based on consolidation, will your records be there? Do you know that they’re 

there? 

Secretary VILSACK. Not only will the records be there, but most 

likely, the person who dealt with you at the previous office will also 

be there. There are about 170 people that are impacted specifically 

by what we’re proposing, and all 170 of those folks will still be able 

to work at FSA, if they choose to do so. 

Senator BLUNT. Mr. Chairman, do you think we’ll have time for 

a second round? 

Senator KOHL. Yes. 

Senator BLUNT. If so, I’ll go ahead and wait for that second 

round for other questions. 

Senator KOHL. Thank you very much. 

Senator Pryor. 

Senator PRYOR. Thank you, Mr. Chairman. I thought Senator 

Moran was here before me. 

Senator KOHL. I thought I’d rotate. 

Senator PRYOR. Okay. Thank you, Mr. Chairman. 

FARM SERVICE AGENCY OFFICE CONSOLIDATION CRITERIA

Mr. Secretary, I think a bad way to start a hearing is when one 

of us writes you a letter on February 21, and we don’t get the response until March 28, at 4 p.m., hand-delivered the day before a 

hearing. I’d like to follow-up on some of the questions I asked in 

that letter, one, in particular, that you did not answer. And that 

would be my question No. 2 in the letter, where I ask you ‘‘to provide all relevant criteria relating to the closure of offices within 

specific distances, along with the formula used to determine mileage between county offices. I’d appreciate if this included copies of 

mapping data, provided by any internal or external source, used to 

determine the mileage between all proposed office closures in Arkansas.’’ 

And the reason I ask that is because you have chosen to use Euclidean miles, which is defined ‘‘as the crow flies,’’ as compared to 

road miles. Had you used road miles, 7 of the 10 offices in Arkansas would not be closing now, but you chose to use Euclidean miles. 

So, could you tell us why you decided to use ‘‘as the crow flies,’’ instead of the mileage that people actually have to drive to get to the 

office? 

Secretary VILSACK. Senator, we had a process that involved not 

just the offices in DC, but also the State offices that assisted us in 

making the calculations. And candidly, we’re confronted and faced 

with two realities in the farm service world. One is that over a period of time, we have seen operating budgets reduced by the Congress. And second, 10 years ago, there were 18,000 people working 

for FSA. Today, there are around 12,000 people. So, we have seen 

one-third fewer workers. We’ve seen an increase in workload. We 

were faced with a very difficult decision, whether we would take a 

look at roughly 130 offices that were within 20 miles ‘‘as the crow 

flies,’’ as you have indicated, for closure, or whether we would institute furloughs or layoffs. And I will tell you, sir, from my perspec-
18 

tive, as long as I’m Secretary, the last thing I want to do is furlough a worker or lay one off. And if I can prevent it, that’s what 

I’m going to do. 

Senator PRYOR. Why did you choose to use ‘‘as the crow flies,’’ as 

opposed to road miles? Was it to close more offices? 

Secretary VILSACK. Not necessarily. It was what the staff recommended. It was not necessarily to close more offices. It was basically to make sure that we were operating within the directive of 

the Congress. The Congress was not clear, and was not definitive 

and specific. It just said 20 miles. So, we felt that that was the simplest way to do it. 

And it’s true that there may be situations and circumstances in 

your State and other States where it may take longer, or it may 

require more of a distance, but again, the reality is the choices. You 

either do that, or you basically create potential chaos in 2,000 offices with furloughs or potentially chaos in a number of offices with 

layoffs. We felt focusing on offices that had no employees, we found 

that 35 of the 131 offices had no full-time employees. Offices that 

had one employee, where if you were sick or if there was a 

ballgame you needed to see, there was no one there to service the 

needs. It was a better idea to basically provide for larger staffed 

offices, and perhaps within 20 miles or so of where the previous office was. 

BLUEPRINT FOR STRONGER SERVICE

Senator PRYOR. Now, I’ve heard that your proposed savings on this are going to be $150 million. Is that per year? 

Secretary VILSACK. No, sir. That’s not accurate. 

Senator PRYOR. How much do you save on this? 

Secretary VILSACK. The office closings themselves are about $6.5 million. The $150 million figure comes from a combination of a 

number of things that we’ve done. A reduction in travel, a reduction in supply purchases, a reduction in conferences, and the administrative services process, in which we’ve identified 379 recommendations for changes internally within USDA, 27 of which 

we’re in the process of implementing. An example is taking over 

700 cell phone contracts that we had at USDA and consolidating 

them into 10 to 15 contracts, so we get quantity discounts, things 

of that nature. When you combine all of those steps, that’s where 

you get the $150 million number. 

Senator PRYOR. Yes. That’s a helpful clarification. All right. 

FARM SERVICE AGENCY OFFICE CONSOLIDATION

I want to ask you about three offices in Arkansas. I’ll probably 

have to come back on the second two. But, we have one in Izard 

County, in Melbourne, Arkansas, that is 18.5 miles ‘‘as the crow 

flies,’’ but it’s 21.8 miles to the nearest FSA office if you drive it. 

The problem is, to drive it on those highways and those roads it’s 

44 minutes each way. So, it’s 1.5 hours roundtrip, if you want to 

go over to that next county’s office and pick up a form, or whatever 

it may be. 

Now, in the farm bill in 2008, in the closure criteria, we use the 

phrase, ‘‘To the maximum extent possible,’’ which, to me, sounds 

like we gave you discretion on hardship cases like this, where it 
19 

may be technically 20 miles away, even though this is longer than 

20 road miles away. It seems like you would have some discretion 

to make exceptions or to understand the hardship that you’d be 

causing on people to close the office. Did you make any exceptions 

for anyone in the country? 

Secretary VILSACK. We’ve not made exceptions as of today, Senator. And the reality is that I think probably every single member 

of Congress and every Senator could probably make a good persuasive local case for why a particular office should stay open and not 

be closed. This is a very difficult set of circumstances that we’re 

confronted with. We have less money and we have substantially 

fewer people. 

We’ve had a substantial increase in the number of retirements. 

In order to avoid substantial layoffs and furloughs, we had to have 

an early retirement, an early separation package, which in the last 

15 months we’ve seen 7,000 of our most experienced people leave. 

This is not an easy process. We have tried desperately to avoid 

furloughs and layoffs. That’s basically where I’m coming from. And 

I’m not hiding anything here. We’re doing everything we possibly 

can to try to squeeze out every buck that we can in a way that allows us to continue a record amount of activity. 

Senator PRYOR. Thank you, Mr. Chairman. 

Senator KOHL. Thank you. 

Senator Moran. 

Senator MORAN. Chairman Kohl, thank you. Mr. Secretary, 

thank you for being here. 

Mr. Secretary, you’re going to be in Kansas in a few days, a couple of weeks, and I wanted to welcome you to our State. Very much 

appreciate you accepting the opportunity to speak at a Landon lecture in Manhattan, Kansas. Also want to thank you for your ongoing and continued support for the National Bio and Agri-Science 

Research facility and your efforts to see that it gets built. 

I want to ask a couple of questions, and I’m going to try to ask 

them so I can get them both in in the 5 minutes that I’m allowed. 

UNIVERSAL SERVICE FUND

Two different topics. First of all, Rural Utilities Service (RUS), 

it’s a lending agency that you have a jurisdiction over. It provides 

loans for electric, water, sewer, and telecommunications. The telecommunications loan portfolio is more than $4 billion. In October, 

the Federal Communications Commission (FCC) adopted an order 

that significantly modifies the Universal Service Fund and intercarrier compensation formulas. On February 15, I wrote you a letter. I’m not yet complaining that it hasn’t been responded to, but 

I’ve raised this topic with USDA, with you, in particular, trying to 

discover what your analysis is about the impact of the FCC’s Universal Service Fund and inter-carrier compensation order, what the 

consequences are to the RUS loan portfolio, as it relates to telecommunications. 

Are you concerned with that order? If so, what’s RUS USDA 

doing to explain to the FCC and within the administration? I’m 

worried that the potential now exists for significant loan defaults 

of RUS, because one of the main features by which a rural telephone company has to repay their loan to RUS is Universal Service 
20 

Fund dollars that no longer will be flowing to those telephone companies. 

Secretary VILSACK. Senator, I’m not sure if that’s one question or 

two. 

Senator MORAN. That was one question. 

Secretary VILSACK. Okay. Do you want to ask the second one? 

Senator MORAN. Thank you very much for that opportunity, if 

the chairman will let me get by with that. 

LEAN FINELY TEXTURED BEEF

The second one is certainly a different topic, but Kansas is certainly a beef State. And lean finely textured beef has been front 

and center in the last few weeks. If lean finely textured beef is no 

longer used, it will take 1.5 million more head of cattle to make up 

for the lost beef, and the cost to producers is estimated to be about 

$15 a head. 

You said yesterday, and this is your quote, ‘‘Let me reiterate, 

without any equivocation, something that we have said hundreds 

of times, this product is safe, and there’s no question about it.’’ I 

would like to make certain that that’s a statement that you believe 

to be true. And isn’t it true that finely textured beef is just beef? 

I notice that one of the newspapers today called it filler. There’s 

nothing to this product except beef. And I would like to give you 

the opportunity to have you explain to us, but to the consumer the 

safety of this product. 

UNIVERSAL SERVICE FUND

Secretary VILSACK. Okay. Senator, let’s talk about the Rural 

Utilities Service first. That was your first question. When the FCC 

proposed its initial order, we did, in fact, communicate with the 

FCC about the fact that rural utility providers count on the Universal Service Fund. They count on inter-carrier rates. They also 

count on the infrastructure assistance that we can provide at 

USDA. Those three are three sort of pillars upon which the whole 

system operates. 

And we expressed to them the need for them to consider, as they 

put together this proposal, enough flexibility to be able to address 

the need for expanded broadband, which we support. At the same 

time, recognize that there may be circumstances and situations 

where that order may have an impact on a particular carrier, that 

we would have to work with those carriers, and they need to give 

us the flexibility to do so. 

We have asked the folks that we are currently doing business 

with to basically give us more information on the specifics as it relates to their individual operation, so that we have a better understanding on an individual basis how they see the potential impact. 

We have asked the FCC, as they are flushing out this process, 

and it still has not been completed. We’ve asked them to take a 

look at the waiver system that’s in place, to give us that flexibility 

that we’ve asked for, and if we have it, then I think we can make 

adjustments. We’re also aware of the fact that the regression factor 

that they’re using to calculate various fees and so forth is also 

being looked at. 
21 

So, this process is not complete. We have weighed in and asked 

for an understanding of its impact on individual operations. We’ve 

asked those individual operations to provide us with information so 

we could do an appropriate analysis, and we’ve also begun our 

process of figuring out precisely how we will approach things differently if this ultimately comes to fruition. 

So, we are aware of it. We’ve engaged in it. We continue to engage in it. We are sensitive to the concerns that you’ve expressed. 

And we are hopeful that the FCC, with the waiver process, will 

give us enough flexibility to be able to address any anomalies or 

any concerns that might arise. 

LEAN FINELY TEXTURED BEEF

We appreciate the fact that folks are now joining us in a discussion of lean finely textured beef. We have been talking about this 

issue, Senator, for a number of weeks. Sometimes we have been the 

only ones talking about it. So, we appreciate your question. 

It is beef. And it is safe. And it’s got less fat. It’s something we’ve 

been saying for literally almost a month now. 

I can’t tell you how many times USDA, myself, Dr. Hagen, and 

other members of the FSIS family have been quoted or alluded to 

in reports, and articles, and broadcasts, and in news radio interviews about the safety of this product. 

We have two issues, two responsibilities to USDA. One is to attest to the safety of a product. The other is as a purchaser of items 

for school lunch and school breakfast programs. In that context, we 

have to be responsive to our customers. We’re not in the position 

to mandate that people do a certain thing or buy a certain thing, 

or have a certain thing. 

Several hundred school districts have contacted us asking for 

choice. We have to be responsive to our customers. We’ve provided 

that choice. But we want to make sure that if they make that 

choice, they’re making it based on the facts, and that they’re not 

making it on the assumption or belief that this product is unsafe, 

because it is not. 

Senator MORAN. Mr. Secretary, thank you very much. And if 

you’d ask somebody in your office to take a look at my February 

15 letter to you in regard to RUS, I’d appreciate it. 

Thank you. 

Senator KOHL. Thank you very much. 

Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. Mr. Secretary, thank 

you. Again, thank you for your trip to Ohio recently, and the contribution you made there. 

AGRICULTURAL RESEARCH FACILITIES

We’ve talked a lot about agriculture research, and I appreciate 

the work you’ve done in Wooster to help us after the tornado there. 

Agriculture is my State’s—as the case in just about everybody here, 

I think—number one industry. Both the Center for Innovative Food 

Technologies—near Toledo, and you met some people from there— 

and Ohio State University’s Agricultural Research Service (ARS) 

research station in Wooster have conducted groundbreaking research in many ways. 
22 

Last year, several of the ARS stations, including the North Appalachian Experimental Watershed Research Station in Coshocton, 

Ohio, eastern Ohio, were slated for closure. The facility provides 

valuable information on how farming practices affect water quality, 

data that is important, particularly important, given the algal 

blooms in the Western Lake Erie basin, which we discussed, and 

you learned even more about than you already knew the other day. 

This subcommittee provided USDA with the option of transferring the land and the facility slated for closure at certain other institutions. Could you just give me sort of an update? To what extent is USDA open to partnering with eligible institutions to develop and implement a use for these facilities? How do you plan to 

move forward on that, inform us, and let us know sort of every step 

of the way, as you go forward? 

Secretary VILSACK. ARS basically has got to follow a certain set 

procedure, which we are in the process of doing. We are certainly 

amenable to working with partnerships, land grant universities, 

and others. In fact, in some of the facilities that are slated for closure, those discussions, negotiations have already taken place, and 

are taking place. 

BEGINNING FARMERS

I will say that, if I can take your question to a slightly different 

place, not only should we think about the partnerships with universities, but we have a real problem in terms of beginning farmers 

in this country, in terms of how young people, who might be interested in farming, could get into farming and be able to afford to 

get into farming. 

To the extent that the Federal Government is the owner of land, 

or finds itself with land that it needs to dispose of, we might want 

to give consideration to expanding the opportunities available to 

ARS to basically lease or sell to beginning farmers, at a reasonable 

price that land, to make it a little bit easier to get young people 

engaged in farming. The average age of the farmer today, I’m 

guessing, is close to 60 years of age now. And I think it’s something 

that we really need to be sensitive to. 

So, Senator, we are following the rules as the statutes and regulations require. We are making efforts to reach out and find out if 

there is interest. And if there is interest, under what circumstances 

the arrangements could be made for the transfer. 

We understand that there are restrictions on what that land can 

be used for, and we will follow those prescriptions and those restrictions. 

Senator BROWN. Thank you. And I think that your point about 

beginning farmers will pique a lot of interest in a lot of places in 

Ohio, and we’ve discussed that. I think your idea is a good one 

there, and we will pursue that. 

BROADBAND ACCESS

Let me follow-up with a slightly different twist on what Senator 

Moran said about broadband. Yesterday, I did my fifth annual, 

since 2008, my second year in the Senate, I bring college presidents 

from around Ohio to the Capitol for a day, and we had about 50, 

55 of them yesterday. At the dinner the night before, a number of 
23 

them were talking about broadband access or the lack of broadband 

access. One college president said he believes about 29 out of Ohio’s 

88 counties don’t have full broadband access. Only one county has 

none, until a local community action agency applied for one of the 

first ever USDA rural development broadband grant. What you-all 

did, and what we did together in the Recovery Act for the $7 billion, and a good amount of that went to USDA, and that helped 

a lot in my State, but it’s still not enough. 

We must ensure the funding through the rural broadband loan 

program; the community connect programs ensure that funding 

provides it direct to the most underserved areas in the most rural 

communities. 

Tell me what you’re doing to ensure that the program integrity 

there in bringing services, especially to those underserved low-income and small communities that all of us represent. 

Secretary VILSACK. With reference to the Recovery Act proceeds, 

that was the principal effort on the part of USDA, was to make 

sure that we had a focus on areas that were remote and rural. In 

some cases, those remote rural areas probably would not be in a 

position to support full-blown broadband. We looked at additional 

ways in which we could enhance technology and make it fiscally responsible and accountable. Part of the Recovery Act money was 

used to create satellite opportunities and an upgrade of technology. 

So, whether it’s full-blown broadband or whether it was an upgrade, we did focus on remote and rural areas. 

As it relates to our regular program, which we’re now in the 

process of instituting, there’s a very small part of what we get from 

the Congress that is in the form of grants, and it is specifically directed, and it is roughly $13 million. It’s not a great deal of money. 

It’s specifically directed to trying to expand opportunities in remote 

and rural areas. 

In addition to that, there’s roughly $25 million that’s available 

for distance learning and telemedicine grant opportunities. Then, of 

the $822 million that is in this pot of money for telecommunications, about $94 million of it will be made available for loan 

guarantees for expansion in rural areas. So, there is a significant 

effort here, either through grants, loans, or the Recovery Act. 

We have, in the last 3 years, funded roughly 600 projects. If you 

take the Recovery Act, the distance learning, the telemedicine, and 

the Connect program, we basically have funded roughly 600 

projects. Now, it doesn’t anywhere near address this from a national perspective, which is why the Commerce Department has a 

map that shows where the areas are that still need attention, and 

that should drive additional decisions and future decisions. 

Senator KOHL. Thank you very much. 

Senator Cochran. 

Senator COCHRAN. Mr. Chairman, thank you for convening this 

hearing. 

WATERSHED REHABILITATION PROGRAM

Mr. Secretary, I notice in the Department’s budget request that 

we see described a budget summary of the Watershed Rehabilitation Program. We’ve had a good many problems in the lower Mississippi River Valley with flooding and challenges that have re-
24 

sulted from erosion, and it has been clear that there’s a lot of 

money that’s going to be needed to repair and refurbish existing 

watershed programs, dams, and other impoundments that have 

reached the end of their design lives. 

The budget request doesn’t have a specific request for funding of 

any activity in this area, and I wonder what your suggestion is. Is 

there going to be a supplemental budget request submitted, or 

what is the intention of the administration in providing assistance 

to local and district-wide governments and associations to rehabilitate these structures that are in need of attention? 

Secretary VILSACK. Senator, one of the reasons why there is not 

an appropriation amount is that at the time these facilities were 

constructed, I think there was a basic understanding that they became a local and State responsibility. Second, the amount of money 

that has been appropriated in that program is relatively small, 

given what could very well be a very significant national need. 

So, if we’re going to do this, I would say two things. One, it needs 

to be done on a much larger scale than this budget conversation 

we’re having today. And two, if we’re going to do it, it needs to be 

in conjunction with and in partnership with States and local governments, because they have at least an equal responsibility, if not 

a greater responsibility, given the fact that these structures are 

theirs. 

CONSERVATION PROGRAMS

Having said that, we are investing a substantial amount of 

money in conservation and in landscape-scale efforts to try to avoid 

and to try to do a better job of controlling water. We still have a 

long way to go, but we’re working on it. We have a record number 

of acres now enrolled in conservation, and the budget before you 

would allow us to add another 29–30 million acres to the 330 million acres that are currently enrolled of the 1.4 billion acres that 

could potentially be subject to conservation programs of the amount 

of farmland in this country. 

So, I would say we’d be happy to work with you on a much larger, much, much larger infrastructure discussion. I mean, I think 

this is part of why there has been a suggestion for an infrastructure bank, why there’s been a suggestion for a large-scale infrastructure appropriations, because when you talk about $20 or $30 

or $40 million, it really has very little impact on the overall problem that you’re alluding to. 

Senator COCHRAN. I appreciate your personal attention to the situation and your willingness to explore possibilities for providing 

some Federal assistance in this area. 

CATFISH INSPECTION PROGRAM

One area of interest, too, that I wanted to mention at today’s 

hearing involved our domestic fish program and the development 

of what has become a very substantial financial investment 

throughout the southern part of the country. Catfish inspection and 

expansion of markets, dealing with competition from overseas in 

the United States are all parts of this area of concern and interest. 
25 

I know that as we are preparing for this new farm bill that’s 

being considered, there’s an opportunity for defining some statutory 

responsibilities for inspection and standards. 

Do you have any information that you can provide the subcommittee giving us a status report of where we are on developing 

an inspection program for domestically produced catfish? 

Secretary VILSACK. Senator, can I offer some advice before I answer your question? 

Senator COCHRAN. Sure. 

Secretary VILSACK. If you work on this in the farm bill, to the 

extent that you can define what a catfish is, it would be helpful. 

Senator COCHRAN. You can tell by looking. 

Secretary VILSACK. That’s what I thought, too, coming from Iowa, 

but I found out in this process that there are at least 39 different 

varieties, and depending upon where you are domestically, or 

where you are internationally, catfish is not necessarily a catfish, 

which is why we received a substantial number of comments to the 

proposal. 

As you know, we asked for input from folks to give us a better 

understanding of precisely how the world defines catfish, and we’re 

in the process of evaluating those responses. And literally, it is a 

very difficult circumstance and situation, because depending upon 

how narrow or how broadly you define that term, it impacts and 

affects quite a bit. So, we’re in the process of trying to figure out 

precisely what was meant, and there’s some conflict in terms of the 

congressional history of this. And so, it would be helpful if there 

was clarity from the Congress in terms of precisely what variety or 

type of catfish you were referring to, or maybe you’re referring to 

all types of catfish. 

Senator COCHRAN. We look forward to working with you on this 

issue. It is very important, and I think it needs our best efforts. 

Secretary VILSACK. I understand, sir. 

Senator KOHL. Senator Hoeven. 

Senator HOEVEN. Thank you, Mr. Chairman. Mr. Secretary, good 

to see you again. 

WATER BANK PROGRAM

I want to thank you for your help on the Water Bank Program, 

and your folks are working to implement it. We think that would 

be very helpful on Devils Lake. So I just want to thank you for 

that. 

WIC PROGRAM

Also, I want to bring up the WIC program, specifically regarding 

potatoes. I and others feel potatoes need to be included with fruits 

and vegetables. Your thoughts? 

Secretary VILSACK. Senator, the WIC program is basically a supplemental program. It’s designed to supplement and to encourage 

nutritious eating. What we do in developing the package is we take 

a look at what people are already consuming, in terms of fruits and 

vegetables, and then what we try to do is to amplify or add to that. 

What we found from the review is that people are already consuming quite a bit of—the potatoes are not something that they 

don’t consume. They consume quite a bit of that. What they don’t 
26 

consume as much of are dark green, orange vegetables, things of 

that nature. So, the WIC program is designed to essentially complement what people are already deciding to do or already eating. 

Senator HOEVEN. Are you willing to encourage that potatoes be 

included with the WIC supplemental nutrition program? I think 

there’s a lot of people who feel that it should not have been left out, 

and we’d like to see it included. Are you willing to work towards 

that objective? 

Secretary VILSACK. Senator, again, the purpose of this is to complement what people are already doing. If they’re already consuming enough of one item, it would basically mean that we would 

have to reduce our commitment to some other item that they’re not 

consuming a great deal of, and probably ought to, if they want to 

have a balanced and nutritious opportunity for their young children. So, this is a complementary. This is not a situation where 

people aren’t eating any potatoes. These are situations in which 

people are eating quite a lot of potatoes, but they aren’t eating a 

lot of the other types of vegetables and fruits. So what we want to 

do is make sure that they have access to those other options. 

Senator HOEVEN. All right. I understand your point and would 

encourage its inclusion. 

BLENDER PUMPS

But, I want to move to blender pumps. I believe that you’ve 

looked at funding blender pumps out of the Rural Energy for America Program (REAP). Is that correct? 

Secretary VILSACK. That’s right. 

Senator HOEVEN. And in the President’s budget, there’s $4.6 million in REAP funding. Give me your thoughts on what portion of 

that can and should go to blender pumps. I know you and I share 

a common belief that blender pumps are a good thing, can help 

give consumers more choice, better pricing, help stimulate renewable fuel, production, and distribution. What are your thoughts in 

terms of what you can put towards blender pump, promoting blender pumps and helping gas station owners get blender pumps on 

their premises? 

Secretary VILSACK. I agree, Senator. And I may be misstating 

this, and if I have, I’ll correct it. I believe we received instructions 

from the House that they were not particularly interested in us 

using monies for blender pumps. I’m not sure if there’s a prohibition. I think there was at one point. 

I don’t know that I’d necessarily want to commit to a certain percentage, because there are an awful lot of good ideas that come out 

of the REAP program. We were a little concerned about the fact 

that it was substantially reduced in this current budget, which 

made it more difficult for us to do everything we’d like to do. 

We’ve had 13,000 different projects, energy efficiency, anaerobic 

digesters, energy audits, windmill solar systems, as well as blender 

pumps. We’ve funded, I think, a couple hundred, maybe 250 blender pumps. We obviously want to do more than that. And depending 

upon the amount of resources that the Congress allocates to this 

program, we’re going to continue to fund blender pumps, if there’s 

not a prohibition restriction. 
27 

Senator HOEVEN. I know there’s been some legislation offered 

that would restrict it. I don’t know of any restriction in place. I 

mean last year, I think the funding was about $3.4—— 

Secretary VILSACK. You mean in terms of what went to blender 

bumps, or the overall REAP money, because it was more than that. 

Senator HOEVEN. Oh. Blender pumps. I think it was around $3.4. 

Does that sound right? 

Secretary VILSACK. You’re probably right. 

Senator HOEVEN. In any event, I’d like to work with you to see 

what we can do. I know there is some pushback on it, but look, I 

think in terms of renewable fuels, we’re trying to find more market-based approaches to continue to develop renewables from the 

standpoint of giving customers choice and helping with pricing. I 

think blender pumps is the way to do it. So, I’m interested in working with you in the context of your budget as to how we can do 

more of it. 

I thought REAP might be the best program. You may have other 

ideas. If so, I’d love to hear what they are. 

Secretary VILSACK. To me, when you deal with the farm bill, you 

deal with rural development programs, and you deal with the energy title within the farm bill, to the extent that we can have flexibility, that’s the key. We may have to have fewer programs, but if 

we have flexibility, we can use maybe the business and industry 

loan program to work with a consortium, for example, of convenience store owners to assist them in putting blender pumps in, as 

opposed to an individual grant to an individual business. Maybe 

that’s a possibility. That’s currently not necessarily a possibility 

under the business and industry loan program. 

Senator HOEVEN. Who would we work with on your staff to really 

figure out what makes most sense, in terms of trying to develop 

this? 

Secretary VILSACK. Sarah Bittleman. We’ll get you her contact 

information, Senator. 

Senator HOEVEN. Thanks, Secretary. 

Secretary VILSACK. Thank you. 

Senator KOHL. Thank you very much. 

FOOD FOR PEACE TITLE II GRANTS

Mr. Secretary, we all know that many, many millions of people 

around the world suffer from chronic and acute hunger. We’ve seen 

how rising food prices have caused instability to some of the most 

vulnerable populations, and yet, the budget includes a decrease of 

$66 million in the Public Law 480 program. 

What is the rationale for cutting this program when the need for 

food assistance around the world is increasing? And if less funding 

is provided for this program, is this administration prepared to respond to an emergency, as we saw last year in the Horn of Africa? 

INTERNATIONAL FOOD ASSISTANCE

Secretary VILSACK. Senator, we work with our sister agency, the 

U.S. Agency for International Development (USAID), to make sure 

that we’re providing the assistance and help that’s necessary. We 

have the Bill Emerson Humanitarian Trust, as you well know, that 

provides some degree of assistance and help, an entity that may, 
28 

for example, be utilized when North Korea is requesting food assistance. There’s a possibility of that. 

These are difficult times. If you say to add the money back that 

you reduced from that, then the question is, where does it come 

from? Does it come from the WIC program? Does it come from 

rural development programs? Does it come from the food safety 

program? Where does it come from? I mean the reality is we’re 

dealing with constrained budgets. So, tough choices have to be 

made. 

We think that there’s a substantial amount of money that’s com- mitted to these programs. It’s $1.4 billion, plus the McGovern-Dole 

program, which we did maintain at a status quo funding. We think 

we’re still in a position to help millions of people with this. And we 

also believe it’s not just the United States’ responsibility, which is 

why we’ve been working with General Assembly countries and the 

Group of Twenty (G–20) Agricultural Ministers to discuss a more 

coordinated and global response to these concerns. A discussion, for 

example, of developing virtual reserves, grain reserves, so that 

we’re in a position to be able to respond internationally and in 

partnership in a collaborative effort. That’s the reason why we 

have the Feed the Future initiative, which is not just designed to 

provide food assistance, but also to take a look at how we might 

make producers in other countries more productive, so that they 

can do a better job of meeting their own needs. So, we reduce the 

need for this kind of assistance. 

So, I think you have to look at the totality of what we’re proposing, and look at what we’re doing internationally to try to 

stretch and leverage these resources. 

ANIMAL AND PLANT HEALTH INSPECTION SERVICE FUNDING AND

STAFFING

Senator KOHL. Mr. Secretary, the Animal and Plant Health Inspection Service (APHIS) promotes the health of animals and 

plants and guards against invasive species. The budget proposes 7- 

percent funding reduction as well as elimination of 151 employees. 

How do you plan to meet the responsibilities of APHIS with such 

severe cuts in funding and staff? Can you provide assurances that 

existing safeguards against intrusion of new invasive pests will not, 

in fact, be weakened? 

Secretary VILSACK. Senator, what we have done is we’ve, first of 

all, engaged in a fairly significant process improvement initiative 

within APHIS, so that we can do our job in a quality way, in a better way, and spending less time. There are a number of permitting 

regulatory and licensing responsibilities that APHIS has, where we 

have substantially reduced the amount of time. We can provide you 

and the subcommittee with a copy of our process improvement 

manual that shows the number of days that we’ve saved from biotechnology reviews, et cetera. That’s one strategy. 

[The information follows:] 

STREAMLINE DECISIONS FOR GENETICALLY ENGINEERED PLANTS

While maintaining strong oversight to ensure the safety of genetically engineered 

(GE) products, APHIS is reforming its processes so that the time it takes to consider 

petitions for deregulating the use of GE crops will be cut in half, reducing to 13– 
29 

16 months the potential adoption of new seeds with traits that can deliver a variety 

of improvements such as improved yields or reduced inputs. APHIS announced the 

start of this process in November 2011 as part of other streamlining improvements. 

APHIS reviewed its approval process using Lean Six Sigma’s business process improvement strategy and identified a number of areas that could be improved, leading to a more timely, predictable and higher quality process. APHIS has improved 

the overall timeline significantly by standardizing and streamlining process steps. 

APHIS will also be soliciting public input on pending petitions earlier in the review 

process, enabling the agency to improve the quality of its environmental analyses. 

By taking these steps, APHIS believes it can deliver to its customers and the public 

a more predictable process for considering and acting on product deregulations. 

Once the agency implements all of these business process improvements, a more 

predictable timeframe will enable developers to bring products granted nonregulated 

status to market more quickly and provide growers with more choices and access 

to new technologies sooner, while enabling APHIS to maintain its mission to protect 

U.S. agriculture and the environment from plant pests. In calendar year 2011, 

USDA made 10 determinations on petitions for nonregulated status for genetically 

engineered crops. That is the most determinations in a single year in more than a 

decade. 

STREAMLINE VETERINARY BIOLOGICS LICENSING PROCESS

To ensure the best use of resources and work toward meeting the demand of the 

biologics industry, APHIS is conducting a business process improvement review of 

work flow at the agency’s Center for Veterinary Biologics with the objective of decreasing turnaround times for veterinary biologics license submissions, reducing the 

overall time it takes to process a complete license application by about 100 days, 

a savings of 20 percent. Making certain we meet our responsibility of ensuring that 

veterinary biologics are pure, safe and effective has always been the strongest consideration during this process. APHIS broke the larger licensing process up into 

smaller, multiple projects creating a group of projects that will ultimately speed up 

overall licensing times. Some of the process improvements include the electronic 

workflow of documents and moving from a four-tier labeling system to a single-tier 

labeling system. The four-tier labeling system required a significant amount of information to be printed on product packages. Rather than have more information on 

the label, the proposal is to require a label statement referring the user to a Web 

site where basic information regarding efficacy and safety for the product may be 

viewed. From this information, the end-user can use personal judgment in determining which product to use to meet his/her particular circumstances/needs. The 

user may also compare efficacy results from several firms with like products. APHIS 

projects additional savings from reductions in reagent/reference production, laboratory testing, and animal use. 

Additional examples of process improvements can be found at USDA’s Web site 

on the Blueprint for Stronger Service (www.usda.gov/strongerservice). A summary 

of some other APHIS actions is included in the fact sheet for Marketing and Regulatory Programs and a blog on February 24, 2012, by Administrator Parham. 

Secretary VILSACK. The second strategy is that we have taken a 

look at the pest and diseases that we are currently managing and 

asking the question, Is the strategy that we are using with reference to specific diseases and pests the appropriate strategy? Do 

we have an eradication strategy when, in fact, a maintenance strategy might be more appropriate and probably more feasible? Are 

there circumstances where good practices by producers will be sufficient to protect against a reemergence of a particular disease or 

pest? 

As a result of all of those steps, we feel that we can still do the 

job that we are required to do and should do in order to increase 

and maintain agricultural productivity, even though we’re faced 

with, again, some difficult budget discussions and decisions. 

The 151 employees, this is basically, we worked our way through 

an attrition program. We have a workforce where 50 percent is 

probably within 5 to 10 years of retirement, and in many cases, 

well over the normal retirement age. We’re seeing a lot of folks be-
30 

ginning to retire. So, we’re trying to manage this in a way that allows us to do our job, do it well, but perhaps do it quicker, more 

efficiently, and more effectively. 

Senator KOHL. All right. Senator Blunt. 

BROADBAND PROGRAM RULE

Senator BLUNT. Thank you, Chairman. Mr. Secretary, both Senator Moran and Senator Brown talked about broadband. My biggest question on broadband continues to be the balance between 

the underserved and the unserved. In fact, Senator Brown used the 

phrase, ‘‘The most underserved,’’ which I assume the unserved, 

would be the most underserved. 

Talk to me a little about the new rule, and concerns I would 

have, without knowing a lot about the rule until you explain it to 

me, that we’re continuing to encourage competition, where people 

have taken their own money and created a network that somebody’s decided is underserved, because there’s no competition, rather than really focusing on the 15 percent of Missourians that are 

unserved. 

Secretary VILSACK. Senator, I want to make sure I understand 

your question. When you talk about the rule, you’re talking about 

the FCC rule, or are you talking about the rule that we have for 

the administration of our broadband program? 

Senator BLUNT. I’m talking about the new RUS rule. 

Secretary VILSACK. Okay. What we are attempting to do is to respond to the concerns that folks have expressed about the fact that 

we are not directing our resources in the appropriate way and in 

the right way. I think what you’ll see from us is a focus on those 

unserved. 

Senator BLUNT. Unserved is what I want to say. 

Secretary VILSACK. Unserved areas. Having said that, there are 

times when because of the remoteness of it or the population of a 

particular area, it may be difficult to have the highest level of 

broadband capacity, because you may not be able to sustain it with 

a customer base. So, it is, I think, important for us to continue to 

look for ways in which we can improve access and connection to 

telecommunications, without necessarily creating a circumstance 

where we’re setting somebody up for failure. 

I think the FCC rule does have some play here, because I think 

the FCC is under the belief that if they empower some of the larger 

operators to become more interested in these unserved areas, that 

they’ll do a better job than they’ve done in the past of trying to respond to the needs of those unserved areas. 

Let me also say that I think that there are new technology opportunities that we haven’t had a chance to discuss today. I should 

have brought my prop with me today. At USDA, we are engaged 

in experimenting in the State of Hawaii with a technology that basically is about as big as this card, and it’s about that thick, and 

four or five of these items placed on a tall building or on a hill will 

provide access for miles and miles of coverage, without the necessity of tens-of-thousands of dollars of infrastructure. 

We are operating these units to develop a 4G network in Hawaii, 

using it for public safety purposes, and to provide interoperability. 

So, a month or so ago, I was sitting in my office in DC, in the Agri-
31 

culture building in DC, talking to our chief information officer, who 

was on the big island in Hawaii, and we were talking to an ambulance that was driving on another island, by virtue of these little 

square boxes. As I understand it, they are several hundred dollars, 

not several thousand dollars, in cost. So, it is conceivable that we 

are on the cusp of new technology that will make it easier to get 

to those remote areas, and still make it financially feasible for 

them to have the technology. It’s a combination of our programs, 

the FCC trying to help the Verizons and the AT&Ts of the world 

be more responsive to these needs, and new technology advancements that might make it less expensive to do it. 

Senator BLUNT. That sounds good. It doesn’t surprise me at all 

that the technology is getting smaller and more available, and I encourage you to continue to stay focused, as you obviously are, on 

that. It does bother me when we use tax dollars to create a competitor to somebody that has created a service without tax dollars, 

particularly, when there are still people who have no service of any 

kind. 

Secretary VILSACK. I agree, and I think that’s the reason why 

when we did the Recovery Act we made a real effort to avoid that 

criticism and that concern. So you’ll see a lot of where we’re working on the unserved areas, and in some cases, very remote areas. 

RESEARCH LAB CLOSURES

Senator BLUNT. Right. I appreciate that. On the extramural 

grants, when we close research labs, what’s the cost of moving that 

program somewhere else? And did the cost in fiscal year 2012 meet 

your expectations for the fiscal year 2012 cost of the labs we’re currently in the process of closing and moving that work somewhere 

else? 

Secretary VILSACK. We’re still in the process of doing that, Senator, so it may very well be that a more definitive response can be 

given to you in a couple of months. 

Senator BLUNT. Would you do that? 

Secretary VILSACK. Sure. 

Senator BLUNT. Go ahead and do what you can today, but I’ll 

just ask right now. 

Secretary VILSACK. Absolutely. 

Senator BLUNT. When you get more information on that, I’d like 

to see it. 

[The information follows:] 

The fiscal year 2012 agriculture appropriations conference report agreed with the 

ARS proposal to close 12 laboratories. Research activities at the 12 laboratories have 

ceased and were not relocated elsewhere. The one-time costs associated with the relocation or separation of affected personnel and the disposal of property are estimated at $39 million in fiscal year 2012. 

Secretary VILSACK. I have requested from ARS an outline of 

what their plans are. There are certain timelines, certain restrictions, certain communication requirements that they are going 

through, and they are going through with each individual location. 

In some cases, it obviously costs a little bit more upfront, and the 

savings occurs down the line. 

I don’t know that I’ve been apprised at this point that any of the 

estimates are totally inaccurate. Sometimes it does depend on the 
32 

relationship and the deal that’s made with the university, in terms 

of rehabilitation, in terms of environmental cleanup, that type of 

thing, but I have not been advised as of today that there is a significant difference between our estimates and what we actually will 

incur. 

As far as the programming is concerned, let me say that what 

ARS has done, at my request, is they have looked at every single 

facility in our portfolio, more than 100 of these locations, and if you 

can conceptualize in your mind a grid, it is basically divided into 

four quadrants. In this quadrant at the top right-hand are those 

facilities that are in very good shape, from a maintenance standpoint, and are also high-priority research. 

The lower right-hand quadrant are high-priority research, but in 

facilities that are not in particularly good shape. The upper lefthand quadrant are low-priority research and facilities that are in 

pretty good shape, and then over here, low-priority research and facilities that are in bad, bad shape. 

So as we look at this quadrant, we’re going to be in a position 

to know, as resources get tight, where the priority research is and 

where the good facilities are, and we have to make sure that we 

do the best job we can to match those up, and that’s essentially 

what we’re doing. 

If we close a facility, and the research is high priority, it gets 

transferred to another facility. If it’s research that is of a lower priority, it may have to be assumed by someone else. I mean the reality is we’re dealing with a different day here, a different day, and 

that day is that we will have and have had less money in many 

of these areas, and that’s the consequence of having less money. 

You’ve got to prioritize. And when you prioritize, you basically 

prioritize, and you draw a line where the money runs out, and everything below that line has got to go in some way, or shape, or 

form. 

Senator Hoeven knows about this. Maybe he doesn’t, because 

he’s always dealt with surpluses, but those of us who are not fortunate enough to have been Governor of North Dakota understand 

that. And if you want to take something from the bottom of the pile 

and take it to the top of the pile, and then something from the top 

of the pile has to come down, because you’ve only got so many dollars. 

Senator BLUNT. My understanding is the surpluses got a lot 

greater after Senator Hoeven became Governor, so maybe they 

didn’t always have them, but they did have them when he left. 

On that regard, as long as I don’t have to explain what was in 

every quadrant, I’m okay, but I think I’ve kind of followed the 

quadrants, as you explained them. 

Do you have any idea how ARS, rather, arrived at the decision 

as to where to make the cuts? It did seem they fell very heavily 

on the research outside of ARS, the extramural, the campus-based 

research, as opposed to research that was more inside the department. 

Secretary VILSACK. I think I would have to provide a more detailed explanation, but I don’t want to misstate something, and I’ll 

be happy to provide that to you, but I will tell you that given where 

we see this headed, with various discussions and decisions you-all 
33 

have to make about reducing budgets significantly, we want to be 

prepared to be able to do this in a thoughtful and strategic way. 

As a result of this approach that I’ve just outlined, we’re now in 

a position to do that. And I think, if there are criticisms, I’d be 

happy to visit with you about—— 

Senator BLUNT. Yes. If you can get a little more of that information to our staff, that would be great. I would like to look at that, 

because it does seem to me that the campuses, particularly, have 

a lot of resources included, and student labor, and other opportunities that aren’t available in other places. And I think that campusbased research has always been pretty cost-effective, but these closures appear to be heavily focused on that kind of research versus 

research that’s fully funded by the Federal Government. 

Secretary VILSACK. It may be the age of the facilities. It really 

may be the priority of the research itself. It could be the fact that 

it duplicates research that’s being done in other locations more effectively and more efficiently. I mean it could be a combination of 

all those factors, Senator. 

[The information follows:] 

The temporary budget reductions to ongoing ARS programs in fiscal year 2012 are 

necessary to finance the one-time costs associated with the closure of 12 ARS laboratories. ARS sought to balance the impact on intramural and extramural programs through an across-the-board reduction of intramural research, a hiring freeze, 

and extramural funding reduction. Together, these actions will finance the one-time 

costs to ARS for facility closures without terminating other ARS research projects 

and continuing research with ARS extramural partners. 

Senator BLUNT. I want to talk more about that, and we can. 

Thank you, Chairman. 

Senator KOHL. Senator Pryor. 

FARM SERVICE AGENCY OFFICE CONSOLIDATION

Senator PRYOR. Thank you, Mr. Chairman. And I would like to 

follow-up on something Senator Blunt said a few moments ago 

about broadband, and Senator Moran and Senator Brown mentioned it as well. 

In terms of closing some of these offices, these FSA offices in Arkansas, if you look on a map, where we have the least amount of 

broadband, that’s where you tend to be closing these offices. It’s in 

the most rural and sometimes most challenging parts of the State. 

And I know a lot of people do business online today, but these 

farmers who are out there in these parts of the State, they’re not 

going to be able to go online. 

Let me ask about another FSA office in Arkansas, and I’m sure 

this is true in other places. In Lafayette County, it’s spelled Lafayette, but we pronounce it La-fay-ette in our State, there’s 

Lewisville, Arkansas. It is 22.86 Euclidean miles away from the 

closest FSA office, which is in Hope. And what I would like to do, 

if possible, is get an understanding from you, because your people 

say it is only 14.9 Euclidean miles away. 

Secretary VILSACK. Senator, if we’ve made a mistake, we obviously have to acknowledge that, and we’d be happy to work with 

you and your staff to make sure that either we’re right or you’re 

right, and if we’re wrong, we’ll need to correct that. 
34 

Senator PRYOR. Here’s a map of it right here. Is it possible that 

I could send one of my staff members over either today or tomorrow to sit down with your people and look at your software? This 

software that we have right here, we couldn’t get from you. We requested several times to give us a copy of what you have, and to 

show us how you’re doing it. You wouldn’t do it. We were going on 

Google. We were going on MapQuest, whatever else. Finally, we 

figured out that we actually have the software that you use at the 

Geographic Information office in Little Rock, so we understand 

we’re using the exact same software you are. Could we send a staff 

person over there to sit down with your people and confirm 

that—— 

Secretary VILSACK. Sure. 

Senator PRYOR. We’re right on our numbers? Thank you. 

In Faulkner County, which is Conway, we have a situation where 

there’s 136,000 total reported planted acres in Conway. You have 

what we call a one-stop shop. I think you guys may call it a service 

center, where you have lots of different government offices there, 

where everybody can come in, and it’s something that I know in recent years USDA and others have bragged about, because it makes 

it very convenient for the citizens of the State. This is another example where if we were using the road miles versus the Euclidean 

miles, this one wouldn’t be closed. Do you take into consideration 

the convenience here that, in effect, what you’re doing is you’re 

breaking out of this one-stop shop for people? Did you-all take that 

into consideration when you looked at it? 

Secretary VILSACK. We were aware of the fact that some of these 

facilities were collocated, Senator, but to get back to the comment 

that I made earlier, the options are not good. None of the options 

are good. And eventually, the options were creating greater inconvenience for a lot more people and a lot more offices. I mean, if you 

furlough people or you lay people off, that’s going to create more 

concerns in a lot more offices. So, that’s what we’re faced with. 

BLUEPRINT FOR STRONGER SERVICE

These are not easy decisions, trust me. We did not take these 

lightly. Just in the same way that we’re not taking lightly internally what we’re trying to do within USDA to figure out how we 

might be able to provide more efficient service, save money, and 

not have to close offices in the future. This administrative services 

process, I’m not sure how familiar you and your staff are with it, 

but we’d be happy to brief you on it. I think you will find that we 

are looking very carefully at our own internal activities, taking a 

look at whether or not we could be better off with regional centers 

for some of the work that we do, figuring out whether or not there 

are centers of excellence or shared service centers that might allow 

us to do a better job of human resources, or civil rights, or IT, the 

things that are common to every mission area. 

We are looking at every aspect of this, because we recognize youall have tough decisions to make, you’re going to make those tough 

decisions, and we’re going to have less money. 
35 

FARM SERVICE AGENCY OFFICE CONSOLIDATION

Senator PRYOR. I mentioned that we have 10 FSA offices in Arkansas that closed, and I promise you this will be the last one I 

mention. This is the fourth out of the 10. And we could go through 

all 10, but we won’t today. 

In Clarksville, Arkansas, there’s one, and it’s within the 20 miles 

of Paris, Arkansas. But, you also have Paris on the closure list. So, 

that means that there will not be one for the folks in Clarksville, 

in that county, so they’re going to have to go to Ozark, which is 

farther than 20 miles. Did you take that in consideration when you 

were doing this? That, to me, seems inconsistent with the statute. 

Secretary VILSACK. Let me say that we asked the State folks to 

verify and to weigh in on the decisions that were specific to the 

State of Arkansas. 

Senator PRYOR. Right. But there again, this is another map of it. 

That seems inconsistent with the statute, because what they’re left 

with is, they’re left with traveling farther than the 20 miles that’s 

in the statute to get to an FSA office. I mean this is more of an 

interpretative issue, I think, with USDA rather than your local 

people in Arkansas issue. 

Secretary VILSACK. It isn’t, though, sir, because of the way in 

which these decisions were developed. They were developed primarily from instructions in DC, implemented, if you will, at the 

State level, so the State folks were the ones who gave us the recommendations for which offices needed to be closed. So, if we’ve 

made mistakes, we obviously have to own up to those mistakes. 

Senator PRYOR. Right. 

Secretary VILSACK. There’s no question about that. 

Senator PRYOR. But, wouldn’t you say that this might be a mistake, too? 

Secretary VILSACK. I don’t know, because—I mean, I don’t know 

this particular situation. The first example that you gave me was, 

I think, a little clearer in my mind, and it may be that I need to— 

I can’t see that map, frankly, Senator. 

Senator PRYOR. Okay. We certainly can—— 

Secretary VILSACK. My eyes aren’t that good. I wish they were. 

Senator PRYOR. In fact, maybe this afternoon or tomorrow, when 

I send my staff person over to meet with your people, they can talk 

about this one, too, because basically the bottom line is, these folks 

in Clarksville, the net effect is they will have to drive farther. They 

will have to drive much farther than 20 miles to get to an FSA office. 

Actually, my last question on this line, Mr. Chairman, is, I know 

that you slated 131 of these for closure, and you had several public 

meetings. Did any of these public meetings change your mind at all 

on these 131? 

Secretary VILSACK. Senator, these are tough decisions, and obviously, people are going to come and they’re going to talk very passionately about the need for their individual office. And you could 

basically find a reason to keep every single one of them open, but 

the reality is we don’t have the resources or the people to do that. 

That’s number one. 
36 

RURAL DEVELOPMENT

Number two, my view of this is that we really need, perhaps, at 

USDA to do an even better job than we’ve done, even though we’ve 

helped more than 50,000 small businesses in the last 3 years, 

which is a record number. We really need to figure out how we can 

generate a lot of private sector activity in these communities so 

that there are options for jobs and for better incomes. Many of 

these communities rely, to a great extent, on publicly supported institutions, and really, we need to figure out how to do a better job 

of creating private enterprise, so that folks have more job opportunities than they have from trying to keep a post office, or an FSA 

office, or a school open. Those are really important, but we haven’t 

done a good enough job, I guess, in getting factories opened there 

so that folks have options. 

Senator PRYOR. Thank you, Mr. Chairman. I actually have a few 

more questions. Are we going to have a third round? 

Senator KOHL. Certainly. 

Senator PRYOR. Thank you. 

Senator KOHL. Mr. Hoeven. 

Senator HOEVEN. Thank you, Mr. Chairman. I can defer, if you 

just have a question or two to finish up, Senator. Are you sure? 

Okay. 

AGRICULTURE RESEARCH FUNDING

I actually want to follow-up on a question that Ranking Member 

Senator Blunt asked you, and it’s about the agriculture research 

funding, and it’s the extramural program funding. At North Dakota 

State University, they’re doing a lot of work on the U.S. Wheat and 

Barley Scab Initiative, and also on the Ug99 barley stem rust research program. Both of those have seen administrative reductions 

of about 30 percent. And at the State level we’ve put a lot of funding into our agriculture research greenhouse at North Dakota State 

University, and so I understand that you have to find ways to save, 

but could you go into a little bit of how you’re making that analysis? 

And I know that Senator Blunt was asking the same question, 

but through the university system, and in States like ours, we’re 

willing to try to design programs to maximize the leverage on that 

research. So, we need to understand how you’re approaching that, 

so that we can, I guess, do the best job possible of attracting those 

dollars into programs like these two, which are very important to 

us. 

Secretary VILSACK. Roughly 51 percent of the resources go into 

crop and animal production protection and productivity. Roughly 

18 percent or so goes into environmental stewardship and the importance of maintaining water quality and quantity. A percentage 

goes into some of the other areas that are outside of agriculture, 

specifically in terms of nutrition, food safety, and things of that nature. So, it’s a broad base of responsibilities we have from a research perspective. I get a little confused, because when we talk at 

USDA about external and internal, we often refer to the external 

as the competitive grant program. 
37 

Our belief is that we have got to do a better job on two fronts. 

First, we have to do a better job of continuing to leverage the resources that we have more effectively. The competitive grant process allows us that opportunity to fund the best projects possible, 

and to really force and compel people to really think about what 

research they’re doing and how they’re doing it. 

Second, as great as the university systems are, and they are, and 

I appreciate Senator Blunt’s acknowledgement of our 150th anniversary, and that of the Morrill Act, there is no overarching process 

that establishes the national research goals that would allow us to 

avoid duplication and replication of research that’s taking place in 

many land grant universities across the country. So it’s going to be 

important, I think, for us to have a conversation in a time of limited resources, either at the State level or at the Federal level, to 

do what we’re doing at the global level. 

We have the Global Research Alliance, where we’re dealing with 

30 different countries on climate issues, and we’re saying let’s not 

replicate or duplicate research, let’s make sure the right hand 

knows what the left hand is doing. I have to feel that there’s probably some duplication that’s taking place across the country, and 

maybe we’re not investing our research dollars, whether internally 

or externally, as efficiently as we can. So, somewhere there’s got to 

be a process, the competitive grant process is one way of compelling 

collaboration, and which is working. We’re making grants now to 

a university, but that university may have six or seven different 

other universities that they’re partnering with. So, I think there’s 

a lot of work in this area. 

The last thing I would say, we don’t have the advantage that 

other research areas have, the National Science Foundation, the 

National Institutes of Health. Our funding has been flat-lined, for 

the most part. It hasn’t been increased dramatically. We don’t have 

outside foundations or resources that would allow us to supplement 

our resources. So, I think there’s a lot of opportunity in this space 

for us to do a better job. 

Senator HOEVEN. I do want to emphasize those two programs to 

you, U.S. Wheat and Barley Scab Initiative, also, the Ug99 Barley 

Stem Rust Research Program, because both saw 30-percent reduction, administratively applied reduction, which I think is significant. 

Secretary VILSACK. Senator, can I ask, when you say administrative, so I know what you mean, I think I know what I would mean 

by that, but what do you mean by that? 

Senator HOEVEN. Essentially, reduction in this year’s funding for 

those programs, for those research programs, in terms of what 

came out to the university to deduct. 

Secretary VILSACK. I think there has been an effort on our part 

to make sure that we’re not overfunding the administration of 

grants, as opposed to the actual research. There’s a difference between how much money goes to the university to sort of administer 

the university versus how much money actually goes to the research project itself. 

Senator HOEVEN. No. I’m talking about research for those specific programs, research dollars for those specific programs. 
38 

Secretary VILSACK. But I’m saying, within that grant, there’s a 

certain allocation for administration and a certain allocation for the 

actual research, and I’m not sure if that’s where we’re having a 

communication issue. 

Senator HOEVEN. No. When I say administratively reduced, I 

mean USDA actually coming in on a discretionary basis, reducing 

actual research dollars for that research. And this is something 

that I’ll be working with Senator Blunt and others on, because I 

mean this is something that, obviously, we’re very interested in 

and think that this is critically important. 

The other thing is, in terms of the, and I say this a lot of times, 

I’ve got one more question. I can certainly defer for the third round. 

I know that’s what Mark did. Maybe it’s best I do that. 

Senator KOHL. Go ahead. 

CROP INSURANCE

Senator HOEVEN. Okay. Just in the overall budget, the administration’s budget, they reduced crop insurance by almost $8 billion. 

I’m on the Agriculture subcommittee as well, and that’s not the direction we’re going. Clearly, we’re not going to have direct payments. And so, what we’re trying to do is find ways to enhance crop 

insurance. I’m on legislation with Senator Conrad, Senator Baucus, 

and others, and there are other bills as well. But crop insurance 

is going to be more important, in terms of a cost-effective safety 

net. 

Just give me your thoughts here, because my sense is you’re 

sympathetic to the tremendous importance of crop insurance, particularly in the situation of tight dollars. That’s going the wrong direction. Just your thoughts. 

Secretary VILSACK. It depends. It depends on where the money 

is coming from. I mean clearly, let me state unequivocally that crop 

insurance is the linchpin of the safety net. But, there are three 

components to the crop insurance. There’s the amount the insurance company gets. There’s the amount the agent gets. And there’s 

the amount that the farmer pays. And all of those are basically 

supplemented, if you will, by Government assistance. 

We’ve done an analysis of what insurance companies currently 

are getting in terms of the return on investment, and how much 

it would take for those insurance companies to be able to maintain 

the integrity of crop insurance. What we found was a 12-percent 

return on the money would be sufficient to maintain the integrity. 

Even in a year that was extraordinary, last year, crop insurance 

companies are still going to net about $1.5 billion, I’m told, of profit. So right now, they’re getting 14 percent. So, the question is: Is 

there any adjustment in these tight times between 14 and 12 that 

could be made that doesn’t compromise the process of the crop insurance program at all? Number one. 

Number two, I think agents, on average, get somewhere around 

$1,000 per policy for selling a policy, a slight adjustment to that, 

given the fact that 15 years ago when crop insurance was sold, it 

was quite difficult to sell the concept to farmers. Today, it’s not at 

all difficult, because most farmers want it, and most bankers require it. Can there be a slight adjustment there? 
39 

Then the third component of the President’s proposal is crop insurance is a partnership between the Government and farmers. 

Some commodities, we are actually subsidizing the premium by 60 

to 65 percent. Maybe a 50–50 partnership is fair. So those three 

areas do not compromise the capacity for us to have crop insurance, 

nor does it compromise our capacity to expand the number of products available to cover more crops as we’ve done. So, I don’t know 

that you necessarily equate reductions in Government subsidy with 

not supporting the program. It depends on where the money comes 

from. 

Senator HOEVEN. There was $6 billion taken out of crop insurance, in terms of what goes to the insurers in the past year. And 

crop insurance is going to have to carry a lot more of the load. So, 

separate and apart from what you’re saying, in terms of the actual 

program and how we make sure we have a safety net for farmers, 

we’re going to need to emphasize crop insurance, which is going to 

take more funding in that part of the program, not less. 

Secretary VILSACK. Not necessarily, Senator, because with the 

money that was taken, insurance companies were generating 17, in 

some cases as much as 26-percent return on their money annually. 

Senator HOEVEN. But, remember, we took $6 billion out of the 

program already. 

Secretary VILSACK. This brought it down to 14—$2 billion went 

back into various programs to help the farmers. 

Senator HOEVEN. And now you’ve got crop insurance picking up 

some of the help that was formerly provided by other parts of the 

program. Crop insurance is going to have to pick that up. So, 

there’s a lot more to it than just the one piece you’re talking about. 

Secretary VILSACK. Unless you amplify crop insurance with another program, which a lot of folks are talking about, which the 

President recognized in his budget of providing additional resources 

for ‘‘a disaster program of one kind of another.’’ 

Senator HOEVEN. There’ll be some of that, but we’re still going 

to need to have to emphasize crop insurance. 

Thank you. 

Senator KOHL. Good. Senator Pryor. 

AGRICULTURAL RESEARCH SERVICE LAB CLOSURES

Senator PRYOR. Thank you, Mr. Chairman. Let me ask about an 

ARS issue, about a 30-percent cut to extramural ARS activities. 

As I understand it, in fiscal year 2012, ARS proposed to close 12 

laboratories. However, USDA did not submit a budget request to 

the Congress that included all the costs associated with closing 

these facilities, including the closure of labs, relocating employees, 

et cetera. As a result, ARS was $38 million short for these activities after the appropriation bills were signed into law. Is that 

right? Do I have that right? 

Secretary VILSACK. Senator, you may very well be right, and 

that’s basically what we have to do is when that happens we’ve got 

to figure out how to absorb that cost. 

Senator PRYOR. And that seems to me to be a budget mistake on 

USDA’s part for not budgeting properly last year. 
40 

Secretary VILSACK. I’d like to think that you-all would have given 

us that money, but I’m not sure that’s the case, given the fact that 

you’ve been cutting ARS the last couple of years. 

Senator PRYOR. My understanding was that it wasn’t part of 

your request, that you thought you had adequate funds to do the 

changes. 

Secretary VILSACK. We have to absorb that, Senator. 

Senator PRYOR. And that’s my point. You’re absorbing it at our 

expense. I mean, in effect, we’re paying for the mistake. Aren’t 

there other ways to find that money to absorb that $38 million? 

Secretary VILSACK. There are other ways. You could appropriate 

money. I mean a supplemental appropriation. We could transfer 

money, but in which case you’d then be asking me why we were 

transferring resources from another program that you like to another program that you like. I mean these are tough issues, Senator. These are tough issues, and when the Congress is basically 

telling us, as we have heard repeatedly, that we’re going to have 

less money, and when we’re talking about a $1.5 trillion cut that’s 

forthcoming, these are hard decisions. There’s no easy answer. 

And I will tell you, I hear a lot of folks talk about waste, fraud, 

and abuse is the answer. Well, there’s always going to be better 

ways to do things, but at the end of the day, with the kind of cuts 

we’re talking about, and that we’ve dealt with, we’re dealing with 

real difficult decisions. I think it’s important for people to understand that. 

Senator PRYOR. I do have some more questions along those lines, 

but I don’t want to try the subcommittee’s patience. So, let me ask 

about one more thing. 

AGRICULTURAL RESEARCH SERVICE GRAZING RESEARCH

It seems like Arkansas got a lot of focus over at the USDA when 

they looked at cutting their budget this year. You’ve decided to 

close the Dale Bumpers Small Farms Research Center in 

Booneville. In light of the closure of the Brooksville, Florida, facility in 2011, and the expected closures of Watkinsville, Georgia, and 

Beaver, West Virginia, by June 1, 2012, where will the ARS conduct grazing research for the Eastern part of the United States? 

Secretary VILSACK. There are three areas that will pick up some 

of the work that was done in Arkansas. They are Nebraska, Oklahoma, and Texas. 

Senator PRYOR. And they’ll be looking at the grazing aspect of it. 

Secretary VILSACK. Yes, sir. 

Senator PRYOR. Because I know that part of what Booneville was 

doing is they were doing long-term, like a 20-year study on watersheds and the impact livestock have on those. 

Secretary VILSACK. The fact is that the priority research is going 

to continue. It may continue in a facility where the maintenance 

costs over time will be less. It may continue at a facility that is actually doing this work as well, to avoid duplication. 

Senator PRYOR. And actually, this Dale Bumpers facility actually 

meets one of the criteria you talked about earlier, because it is 

hard for young people to get into farming. And here, they focus on 

small farms, and startups, and how you can get into certain type 

of farming activities and actually make a go of it. 
41 

AGRICULTURAL RESEARCH

I think that on this, and maybe some of these other facilities that 

we’ve talked about today, they focus on long-term basic research 

that actually helps farming, helps agriculture, and helps that be a 

core strength in the U.S. economy. So, are you-all just going to be 

getting out of the research business? Is that where you’re headed? 

Secretary VILSACK. Senator. 

Senator PRYOR. I’m asking. 

Secretary VILSACK. We have over 100 facilities that will still be 

operating, and we’ve asked for additional resources in the Agriculture and Food Research Initiative (AFRI) portion of the budget, 

$60 million-plus additional above and beyond what was appropriated last year. We’ve been advocating for more research opportunities. It doesn’t necessarily mean that we have to have more facilities. It means that there is a number of different ways in which 

we can embrace additional research. 

So, it’s unfair to suggest that we’re trying to get out of the research business. But, it is fair to point out that the Congress has 

provided less money in several areas of our budget, and we have 

to deal with that. I’m not going to whine about it. I’m not going 

to complain about it. I’m going to manage it. But I have to have 

the capacity to manage it. I have to have the capacity to make 

choices. And sometimes those choices are difficult. 

If it doesn’t come from one source, it’s got to come from another 

source. That’s the reality of less money, and we are in that position 

and circumstance where every single entity, every single agency of 

the Government is going to have to go through this. 

BLUEPRINT FOR STRONGER SERVICE

Frankly, it’s a difficult process, but it’s an important process, because it really allows you to think carefully and very strategically 

about what we ought to be doing, where we ought to be doing it, 

and how we ought to be doing it. Which is why we just didn’t focus 

on office closings, we just didn’t do what a lot of people do when 

they’re faced with less money, is just to do a blanket across-theboard cut in workforce, which would have disrupted services in a 

lot of different areas. We took a strategic approach. We said, Less 

travel, less supplies, less conferences. We said, Are there ways in 

which we can do civil rights, IT, budget and finance, human resources, security, property management, and procurement more effectively and efficiently? Yes—379 different set of recommendations 

that we’re now in the process of implementing. 

We looked at a Voluntary Separation Incentive Pay and Voluntary Early Retirement Authority (VSIP/VERA) process, so that 

we didn’t have to be unfair to the people who had worked and dedicated their life to USDA, by giving them an opportunity for early 

retirement or for a buyout, so that we could keep a lot of our young 

people that we have been hiring over the course of the last several 

years, to maintain a good diversity in our workforce. 

We looked at office closings. We looked at lab closings. We looked 

at the entire process, which is what you have to do. If you could 

tell me we’re not going to be faced with tough budget times in the 

next couple of years, that’s great, but everything I read suggests 
42 

that we’re going to have to hunker down here. That’s why I managed the change, rather than be managed by the change. 

AGRICULTURAL RESEARCH

Senator PRYOR. That’s why I asked about research, because 

under the Budget Control Act, it’s going to be tougher in the next 

few years. And I’m trying to get a sense from you. You say you 

want to spend more in research, but you’re going to have to be cutting other places. I’m just trying to get a sense of where you think 

the USDA is going over the next several years. 

Secretary VILSACK. The research that we see is the best way to 

use scarce resources, is to do it in a competitive way, that compels 

land grant universities and other universities that are engaged in 

research to collaborate, to avoid duplication, to avoid replication of 

research. That’s why we think that the AFRI process and National 

Institute of Food and Agriculture (NIFA) is a good way to approach 

this and get the biggest bang and the largest stretch for our dollar. 

There have been those that have suggested that we need to complement that with the establishment of a foundation. I’m all for 

that. I think that’s great. We don’t have that in agriculture. We 

have it in a lot of other areas, and those areas have seen significant improvements in research. So, there are multiple ways in 

which we are going to be supportive of agricultural research. Make 

no mistake about that. Make no mistake about that. Because there 

is a direct correlation between agricultural productivity and research. The charts are very clear. 

Senator PRYOR. I agree. I agree. And that’s why I was asking 

that. I hope one thing you’ll consider is taking these old facilities 

and research you’re not using, and not going to fund any more, and 

possibly see if you can turn those over to some land grant universities so they can use those for research. 

Secretary VILSACK. We are required to do that, in the sense that 

we’re required to reach out to our land grant university partners 

and say, ‘‘Are you interested in having this facility? And if you are, 

what would you be willing to do with it, and can we enter into an 

agreement where you would commit it to agricultural activities for 

a period of time?’’ We’re required to do that, and we will follow 

through with that. 

Senator PRYOR. And would there be any funding stream that 

would go along with that for research? 

Secretary VILSACK. That would, I suppose, depend on whether or 

not they’d like to participate in the competitive grant process under 

NIFA and the AFRI program. 

CIVIL RIGHTS

Senator PRYOR. Mr. Chairman, the last thing I will say, and I’m 

sorry for trying the subcommittee’s patience here. I know you’ve 

made a lot of progress in the last few years on civil rights, but 

there is still one major problem, I think, that exists, and that is 

USDA has no deadline for civil rights intake process or responding 

to civil rights complaints. And we have several folks in our State, 

and I’m sure others do as well, that are hanging out there in limbo 

for sometimes years at a time, waiting for responses from USDA. 
43 

Secretary VILSACK. Senator, I don’t think that’s correct. I just 

don’t think that’s correct. In fact, I get a quarterly report on both 

internal and external complaints against USDA by mission area. 

We have a response time within 180 days. I will get to your staff 

the list that I get, and it will show you that there is no claim that’s 

currently before the USDA that is over the time period that the 

statute of limitations has expired since we started this process and 

started keeping track. 

[The information follows:] 

The attached table is the color coded list that USDA uses to track the progress 

of pending complaints that raise claims under the Equal Credit Protect Act (ECOA). 

The table tracks the number of days left before the statute of limitations runs on 

ECOA claims. USDA’s civil rights managers at every level meet once a week to review progress on these claims and take steps to expedite or remove road blocks as 

necessary. 

Most ECOA claims in inventory fall under a 2-year statute of limitations. This 

means that 2 years from the date of the incident alleged to be discriminatory, complainants lose the right to pursue the claim in court. More recent claims may benefit 

from the 5-year statute of limitations extended by the Dodd-Frank Act. This administration inherited a backlog of over 1,000 uncatalogued complaints that did not 

identify ECOA claims or track the date of the applicable statute of limitations. 

USDA civil rights staff inventoried the backlog and identified complaints raising 

ECOA claims. Based on that information, USDA created the attached table to track 

processing time against the deadline created by the statute of limitations for each 

complaint. The table identifies complainants’ names (redacted); the number of days 

remaining until a 2-year statute of limitations would expire; the date on which the 

2-year statute of limitations would expire; the status of each complaint; OASCR 

staff assigned to process the complaint; and other relevant information. 

An ECOA committee representing staff at every stage of complaint processing continues to meet regularly to maintain and update the table. New complaints raising 

ECOA claims are immediately added to the list. USDA civil rights managers at 

every level meet once a week to review progress on these pending claims and take 

steps to expedite or remove road blocks as necessary. 
44 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

1 32 ....... 4/30/ 

2012 

10/1/ 

2010 

FSA ..... 11–4279 Adjudication .. MB, WS .. OASCR ........... Farm Operating 

Loan (FSA).

9/14/ 

2010 

698 3/29/ 

2012 

5/1/2010 5/1/2010 10/13/ 

2010 

2 55 ....... 5/23/ 

2012 

5/25/ 

2010 

FSA ..... 10–3929 Adjudication .. SF, WH, 

EP.

OASCR ........... FSA-Guaranteed 

Loan.

5/24/ 

2010 

675 3/29/ 

2012 

5/24/ 

2010 

5/24/ 

2010 

...............

3 58 ....... 5/26/ 

2012 

7/28/ 

2010 

FSA ..... 10–4133 Adjudication .. RC, HR ... OASCR ........... Farm Service Agency 

(FSA).

7/22/ 

2010 

672 3/29/ 

2012 

5/27/ 

2010 

5/27/ 

2010 

9/23/ 

2010 

4 100 ..... 7/7/2012 7/27/ 

2010 

RD ....... 11–4412 Adjudication .. CB, KC ... Adjudication .. SFH—Rural Housing 

Direct Loans (RD).

7/29/ 

2010 

630 3/29/ 

2012 

7/8/2010 12/21/ 

2010 

12/29/ 

2010 

5 155 ..... 8/31/ 

2012 

7/27/ 

2010 

RD ....... 11–4338 Investigation .. SF ........... Investigation .. SFH—Rural Housing 

Direct Loans (RD).

9/29/ 

2010 

575 3/29/ 

2012 

9/1/2010 9/1/2010 12/2/ 

2010 

6 168 ..... 9/13/ 

2012 

10/4/ 

2010 

FSA ..... 11–4283 Adjudication .. HR, RC ... OASCR ........... Direct Operating 

Loan/Guaranteed Operating Loan (FSA).

9/27/ 

2010 

562 3/29/ 

2012 

9/14/ 

2010 

9/14/ 

2010 

11/5/ 

2010 

7 188 ..... 10/3/ 

2012 

1/31/ 

2011 

RD ....... 11–4704 Adjudication .. CB, JE .... Adjudication .. SFH—Rural Housing 

Direct Loans (RD).

3/25/ 

2011 

542 3/29/ 

2012 

10/4/ 

2010 

10/1/ 

2010 

3/25/ 

2011 

8 213 ..... 10/28/ 

2012 

7/27/ 

2010 

RD ....... 11–4515 Adjudication .. KCB, LR OASCR ........... SFH—Rural Housing 

Direct Loans (RD).

10/29/ 

2010 

517 3/29/ 

2012 

10/29/ 

2010 

10/29/ 

2010 

12/15/ 

2010 

9 228 ..... 11/12/ 

2012 

11/23/ 

2010 

FSA ..... 11–4443 Adjudication .. MB, LR ... Adjudication .. Farm Operating 

Loans (FSA).

11/13/ 

2010 

502 3/29/ 

2012 

11/13/ 

2010 

11/13/ 

2010 

1/12/ 

2011 
45 

10 265 ..... 12/19/ 

2012 

1/10/ 

2011 

FSA ..... 11–4609 Investigation .. MB ......... Investigation .. Farm Operating 

Loans (FSA).

12/22/ 

2010 

465 3/29/ 

2012 

12/20/ 

2010 

12/20/ 

2010 

2/7/2011 

11 289 ..... 1/12/ 

2013 

1/7/2011 RD ....... 11–4606 Investigation .. MP .......... Investigation .. SFH—Housing Repair & Rehabilitation Grant/Loan. 2/24/ 2011 441 3/29/ 2012 1/13/ 2011 1/13/ 2011 2/24/ 2011 

12 303 ..... 1/26/ 

2013 

2/1/2011 FSA ..... 11–4687 Investigation .. WH ......... Investigation .. Farm Operating 

Loan (FSA).

3/14/ 

2011 

427 3/29/ 

2012 

1/27/ 

2011 

1/27/ 

2011 

3/14/ 

2011 

13 330 ..... 2/22/ 

2013 

11/4/ 

2011 

FSA ..... 12–5519 Investigation .. TA ........... Investigation .. Farm Operating 

Loans (FSA).

10/17/ 

2011 

400 3/29/ 

2012 

2/23/ 

2011 

2/23/ 

2011 

11/29/ 

2011 

14 345 ..... 3/9/2013 9/22/ 

2011 

FSA ..... 11–5359 Investigation .. TA ........... Investigation .. Farm Ownership 

Loans (FSA).

10/19/ 

2011 

385 3/29/ 

2012 

3/10/ 

2011 

3/10/ 

2011 

10/19/ 

2011 

15 352 ..... 3/16/ 

2013 

4/11/ 

2011 

FSA ..... 11–4845 Investigation .. SA .......... Investigation .. Farm Operating 

Loans (FSA).

4/5/2011 378 3/29/ 

2012 

3/17/ 

2011 

3/17/ 

2011 

6/17/ 

2011 

16 377 ..... 4/10/ 

2013 

10/1/ 

2010 

FSA ..... 11–4280 Adjudication .. AG .......... Adjudication .. Farm Operating 

Loans (FSA).

9/29/ 

2010 

353 3/29/ 

2012 

4/11/ 

2011 

4/11/ 

2011 

10/15/ 

2010 

17 377 ..... 4/10/ 

2013 

4/21/ 

2011 

FSA ..... 11–4887 Adjudication .. JE, MP .... Adjudication .. Farm Ownership 

Loans (FSA).

4/14/ 

2011 

353 3/29/ 

2012 

4/11/ 

2011 

4/11/ 

2011 

5/13/ 

2011 

18 395 ..... 4/28/ 

2013 

3/2/2011 RD ....... 11–4828 Investigation .. MB ......... Investigation .. SFH—Rural Housing 

Loan (RD).

4/29/ 

2011 

335 3/29/ 

2012 

4/29/ 

2011 

............... 7/18/ 

2011 

19 395 ..... 4/28/ 

2013 

3/25/ 

2011 

FSA ..... 11–5093 Investigation .. EP .......... Investigation .. Farm Operating 

Loan (FSA).

4/29/ 

2011 

335 3/29/ 

2012 

4/29/ 

2011 

4/29/ 

2011 

8/15/ 

2011 

20 412 ..... 5/15/ 

2013 

8/19/ 

2011 

RD ....... 11–5227 Investigation .. TA ........... Investigation .. SHF–Guaranteed 

Loan.

8/4/2011 318 3/29/ 

2012 

5/16/ 

2011 

5/16/ 

2011 

10/7/ 

2011 

21 414 ..... 5/17/ 

2013 

9/20/ 

2011 

FSA ..... 11–5348 Investigation .. AG .......... Investigation .. Farm Operating 

Loans (FSA).

9/30/ 

2011 

316 3/29/ 

2012 

5/18/ 

2011 

5/18/ 

2011 

9/30/ 

2011 

22 421 ..... 5/24/ 

2013 

9/7/2011 RD ....... 11–5316 Investigation .. MP .......... Investigation .. SFH—Rural Housing 

Direct Loan (RD).

8/25/ 

2011 

309 3/29/ 

2012 

5/25/ 

2011 

5/25/ 

2011 

10/27/ 

2011 
46 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

23 433 ..... 6/5/2013 6/20/ 

2011 

FSA ..... 11–5046 Investigation .. CB .......... Investigation .. Farm Operating 

Loans (FSA).

6/12/ 

2011 

297 3/29/ 

2012 

6/6/2011 6/6/2011 9/26/ 

2011 

24 442 ..... 6/14/ 

2013 

5/4/2011 RD ....... 11–4937 Investigation .. MP .......... Investigation .. SFH—Rural Housing 

Direct Loans (RD).

4/25/ 

2011 

288 3/29/ 

2012 

6/15/ 

2011 

6/15/ 

2011 

6/23/ 

2011 

25 450 ..... 6/22/ 

2013 

7/5/2011 RD ....... 11–5098 Adjudication .. SA, LR .... Adjudication .. SFH—Rural Housing 

Guaranteed Loan (RD).

6/28/ 

2011 

280 3/29/ 

2012 

6/23/ 

2011 

6/23/ 

2011 

7/28/ 

2011 

26 456 ..... 6/28/ 

2013 

7/19/ 

2011 

FSA ..... 11–5132 Investigation .. KCB ........ Investigation .. Farm Operating 

Loan (FSA).

7/14/ 

2011 

274 3/29/ 

2012 

6/29/ 

2011 

6/29/ 

2011 

8/8/2011 

27 475 ..... 7/17/ 

2013 

8/15/ 

2011 

FSA ..... 11–5215 Investigation .. LJ ........... Investigation .. Farm Operating 

Loan (FSA).

7/18/ 

2011 

255 3/29/ 

2012 

7/18/ 

2011 

7/18/ 

2011 

11/9/ 

2011 

28 500 ..... 8/11/ 

2013 

11/8/ 

2011 

FSA ..... 12–5524 Investigation .. LJ ........... Investigation .. Farm Operating 

Loan (FSA).

10/19/ 

2011 

230 3/29/ 

2012 

8/12/ 

2011 

8/12/ 

2011 

11/18/ 

2011 

29 500 ..... 8/11/ 

2013 

9/30/ 

2011 

FSA ..... 11–5392 Investigation .. EP .......... Investigation .. Farm Operating 

Loans (FSA).

9/15/ 

2011 

230 3/29/ 

2012 

8/12/ 

2011 

8/12/ 

2011 

10/21/ 

2011 

30 542 ..... 9/22/ 

2013 

11/8/ 

2011 

RD ....... 12–5527 Investigation .. NA .......... Investigation .. SFH—Rural Housing 

Direct Loans (RD).

10/29/ 

2011 

188 3/29/ 

2012 

9/23/ 

2011 

1/27/ 

2010 

11/22/ 

2011 

31 553 ..... 8/29/ 

2013 

10/24/ 

2011 

RD ....... 12–5497 Fact-Finding .. FF ........... Fact-Finding .. SFH—Rural Housing 

Loan.

10/24/ 

2012 

177 2/23/ 

2012 

8/30/ 

2011 

8/30/ 

2011 

2/13/ 

2011 
47 

32 580 ..... 10/30/ 

2013 

1/9/2011 FSA ..... 12–5699 Fact-Finding .. FF ........... Fact-Finding .. Commodity Def. 

Loan (FSA).

12/28/ 

2011 

150 3/29/ 

2012 

10/31/ 

2011 

10/31/ 

2011 

3/16/ 

2012 

33 609 ..... 11/28/ 

2013 

1/18/ 

2012 

RD ....... 12–5715 Fact-Finding .. FF ........... Fact-Finding .. SFH—Other (Moratorium). 12/20/ 2011 121 3/29/ 2012 11/29/ 2011 11/29/ 2011 2/28/ 2012 

34 616 ..... 12/5/ 

2013 

1/20/ 

2012 

FSA ..... 12–5740 Fact-Finding .. FF ........... Fact-Finding .. Farm Operating 

Loan (FSA).

1/10/ 

2012 

114 3/29/ 

2012 

12/6/ 

2011 

12/6/ 

2011 

2/28/ 

2012 

35 624 ..... 12/13/ 

2013 

11/23/ 

2011 

RD ....... 12–5576 Fact-Finding .. FF ........... Fact-Finding .. SFH—Rural Housing 

Direct Loans (RD).

1/23/ 

2012 

106 3/29/ 

2012 

12/14/ 

2011 

12/14/ 

2011 

1/23/ 

2012 

36 687 ..... 2/14/ 

2014 

3/2/2012 FSA ..... 12–5864 Fact-Finding .. FF ........... Fact-Finding .. Farm Operating 

Loans (FSA).

2/21/ 

2012 

43 3/29/ 

2012 

2/15/ 

2012 

2/15/ 

2012 

3/16/ 

2012 

37 950 ..... 11/4/ 

2014 

2/26/ 

2010 

RD ....... 10–3706 Adjudication .. FF ........... Adjudication .. SFH—Other (RD) .... 11/19/ 

209 

875 3/29/ 

2012 

11/5/ 

2009 

11/5/ 

2009 

...............

38 1047 ... 2/9/2015 8/16/ 

2010 

RD ....... 10–4155 Adjudication .. FF ........... OASCR ........... Rural Development 

(RD).

4/25/ 

2010 

778 3/29/ 

2012 

2/10/ 

2010 

2/10/ 

2010 

10/1/ 

2010 

39 ¥103 12/17/ 

2011 

5/13/ 

2010 

FSA ..... 10–3906 Adjudication .. OASCR .... OASCR ........... Farm Operating 

Loan (FSA).

5/27/ 

2010 

833 3/29/ 

2012 

12/17/ 

2009 

7/15/ 

2010 

5/27/ 

2010 

40 ....... ............... 6/22/ 

2010 

FSA ..... 10–4017 Adjudication .. OASCR .... OASCR ........... Farm Operating 

Loan (FSA).

6/16/ 

2010 

............. 3/29/ 

2012 

TBD TBD 8/24/ 

2011 

41 ¥412 2/11/ 

2011 

3/4/2009 FSA ..... 09–2297 Adjudication .. OASCR .... OASCR NF 

Proposed OGC Not Signed.

Farm Operating 

Loans (FSA).

2/11/ 

2009 

1142 3/29/ 

2012 

2/11/ 

2009 

2/11/ 

2009 

4/16/ 

2010 

42 0 ......... 1/22/ 

2012 

2/18/ 

2010 

FSA ..... 10–3681 Settlement 

completed with complainant.

................ ........................ Farm Operating 

Loans (FSA).

2/8/2010 797 3/29/ 

2012 

1/22/ 

2010 

1/22/ 

2010 

9/1/2010 

43 42 ....... 5/10/ 

2012 

5/18/ 

2010 

FSA ..... 10–3933 F 2/29/2012 .. ................ ........................ Farm Operating 

Loan (FSA).

5/18/ 

2010 

688 3/29/ 

2012 

5/11/ 

2010 

5/11/ 

2010 

6/22/ 

2010 
48 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

44 218 ..... 11/2/ 

2012 

2/15/ 

2011 

FSA ..... 11–4729 F 2/29/2012 .. ................ ........................ FSA—Farm Operating Loan. 4/8/2011 512 3/29/ 2012 11/3/ 2010 4/8/2011 ...............

45 93 ....... 6/30/ 

2012 

9/22/ 

2010 

FSA ..... 10–4242 F 2/29/2012 .. ................ ........................ Farm Operating 

Loans (FSA).

8/27/ 

2010 

637 3/29/ 

2012 

7/1/2010 7/11/ 

2010 

10/20/ 

2010 

46 34 ....... 5/2/2012 6/2/2010 FSA ..... 10–3988 NF 3/8/2012 .. ................ ........................ Operating Loan 

(FSA).

5/25/ 

2010 

696 3/29/ 

2012 

5/3/2010 5/25/ 

2010 

7/7/2010 

47 0 ......... 2/22/ 

2012 

3/2/2010 RD ....... 10–3719 Closure Withdrawn 1/ 

30/2012.

................ ........................ SFH—Rural Housing 

Direct Loans (RD).

2/22/ 

2010 

766 3/29/ 

2012 

2/22/ 

2010 

2/22/ 

2010 

9/9/2010 

48 0 ......... 8/31/ 

2011 

1/20/ 

2010 

FSA ..... 10–3593 NF 3/8/2012 .. ................ ........................ Farm Operating 

Loans (FSA).

12/30/ 

2009 

941 3/29/ 

2012 

8/31/ 

2009 

5/1/2009 ...............

49 0 ......... 5/13/ 

2012 

6/8/2010 RD ....... 10–3966 NF 1/12/2012 ................ ........................ RD (loan) ................ 5/24/ 

2010 

685 3/29/ 

2012 

5/14/ 

2010 

5/14/ 

2010 

6/25/ 

2010 

50 0 ......... 8/18/ 

2012 

7/27/ 

2010 

FSA ..... 11–4445 Closure 8/19/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

8/22/ 

2010 

588 3/29/ 

2012 

8/19/ 

2010 

8/19/ 

2010 

12/15/ 

2010 

51 0 ......... 7/11/ 

2013 

7/20/ 

2001 

RD ....... 11–5143 Closure 11/03/ 

2011.

................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

7/12/ 

2011 

261 3/29/ 

2012 

7/12/ 

2011 

7/12/ 

2011 

8/12/ 

2011 
49 

52 0 ......... 2/8/2012 3/1/2010 FSA ..... 10–3707 NF 12/2/2011 ................ ........................ Direct Operating 

Loan/Guaranteed Operating Loan (FSA).

2/24/ 

2010 

780 3/29/ 

2012 

2/8/2010 2/8/2010 7/19/ 

2010 

53 0 ......... 11/9/ 

2011 

4/29/ 

2010 

FSA ..... 10–3873 NF 11/10/2011 ................ ........................ Outreach & Assistance for Socially 

Disadvantaged Farmers.

4/25/ 

2010 

871 3/29/ 

2012 

11/9/ 

2009 

4/7/2010 4/30/ 

2010 

54 0 ......... 11/9/ 

2011 

4/29/ 

2010 

FSA ..... 10–3872 NF 11/09/2011 ................ ........................ Outreach & Assistance for Socially 

Disadvantaged Farmers.

4/25/ 

2010 

871 3/29/ 

2012 

11/9/ 

2009 

4/7/2010 11/5/ 

2010 

55 0 ......... 12/2/ 

2011 

3/18/ 

2010 

RD ....... 10–3766 NF 10/24/2011 ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

3/8/2010 848 3/29/ 

2012 

12/2/ 

2009 

12/2/ 

2009 

2/11/ 

2011 

56 0 ......... 10/22/ 

2011 

9/15/ 

2010 

FSA ..... 10–4218 NF 10/21/2011 ................ ........................ Operating Loan 

(FSA).

9/7/2010 889 3/29/ 

2012 

10/22/ 

2009 

5/3/2010 ...............

57 0 ......... 11/1/ 

2011 

5/27/ 

2010 

FSA ..... 10–3942 NF 10/24/2011 ................ ........................ Farm Operating 

Loan (FSA).

5/21/ 

2010 

879 3/29/ 

2012 

11/1/ 

2009 

11/1/ 

2009 

Pending 

discussion 

58 0 ......... 2/29/ 

2012 

7/28/ 

2010 

RD ....... 10–4099 Closed 10/19/ 

2011.

................ ........................ Rural Development 

(502/504 loan grant).

7/20/ 

2010 

759 3/29/ 

2012 

3/1/2010 3/1/2010 6/1/2010 

59 0 ......... 3/9/2012 10/28/ 

2010 

RD ....... 11–4469 Closed 10/21/ 

2011.

................ ........................ SFH—Rural Housing 

Direct Loans (RD).

2/11/ 

2011 

750 3/29/ 

2012 

3/10/ 

2010 

3/10/ 

2010 

6/1/2010 

60 0 ......... 5/31/ 

2012 

7/20/ 

2010 

FSA ..... 10–4102 Closed 8/15/ 

2011.

................ ........................ Emergency Loan 

(FSA).

7/12/ 

2010 

667 3/29/ 

2012 

6/1/2010 ............... 9/27/ 

2010 

61 0 ......... 11/14/ 

2012 

5/4/2011 RD ....... 11–4941 Closed 10/5/ 

2011.

................ ........................ SFH—Rural Housing 

Loan (RD).

4/12/ 

2011 

500 3/29/ 

2012 

11/15/ 

2010 

............... 7/8/2011 
50 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

62 0 ......... 10/9/ 

2011 

10/27/ 

2009 

FSA ..... 10–3304 NF 9/30/2011 ................ ........................ Farm Operating 

Loans (FSA).

10/26/ 

2009 

902 3/29/ 

2012 

10/9/ 

2009 

10/9/ 

2009 

5/5/2010 

63 0 ......... 11/18/ 

2011 

1/26/ 

2010 

FSA ..... 10–3633 NF 9/29/2011 ................ ........................ Farm Ownership 

Loans (FSA).

1/27/ 

2010 

862 3/29/ 

2012 

11/18/ 

2009 

11/18/ 

2009 

5/18/ 

2010 

64 0 ......... 2/26/ 

2012 

2/26/ 

2010 

FSA ..... 10–3689 Closed—No 

Jurisdiction.

................ ........................ Farm Ownership 

Loans (FSA).

2/26/ 

2010 

762 3/29/ 

2012 

2/26/ 

2010 

2/26/ 

2010 

2/11/ 

2011 

65 0 ......... 6/30/ 

2012 

8/25/ 

2010 

FSA ..... 10–4181 Adjudication 

Closed— Filed in Federal Court.

................ ........................ Diaster Loan (FSA) 8/25/ 

2010 

637 3/29/ 

2012 

7/1/2010 7/1/2010 10/4/ 

2010 

66 0 ......... 9/1/2011 7/20/ 

2010 

FSA ..... 10–4083 NF 8/31/2011 ................ ........................ Farm Operating 

Loans (FSA).

7/12/ 

2010 

940 3/29/ 

2012 

9/1/2009 9/1/2009 ...............

67 0 ......... 10/14/ 

2011 

10/21/ 

2009 

FSA ..... 10–3312 NF 8/26/2011 ................ ........................ Farm Operating 

Loans (FSA).

10/14/ 

2009 

897 3/29/ 

2012 

10/14/ 

2009 

10/14/ 

2009 

5/20/ 

2010 

68 ¥616 7/22/ 

2010 

12/15/ 

2008 

FSA ..... 09–2094 Investigation 

(Held in Abeyance).

................ ........................ Farm Operating 

Loans (FSA).

12/9/ 

2008 

1346 3/29/ 

2012 

7/22/ 

2008 

7/22/ 

2008 

4/15/ 

2010 

69 ¥626 7/12/ 

2010 

7/31/ 

2008 

FSA ..... 8–1642 Investigation 

(Held in Abeyance).

................ ........................ Farm Operating 

Loans (FSA).

7/31/ 

2008 

1356 3/29/ 

2012 

7/12/ 

2008 

7/12/ 

2008 

4/30/ 

2010 
51 

70 0 ......... 7/4/2012 7/27/ 

2010 

RHS ..... 10–4092 Closure 8/23/ 

2011.

................ ........................ Rural Development 

(RD).

7/20/ 

2010 

633 3/29/ 

2012 

7/5/2010 7/5/2010 8/27/ 

2010 

71 0 ......... 12/2/ 

2011 

1/12/ 

2010 

FSA ..... 10–3558 Adjudication 

Not ECOA.

................ ........................ Farm Operating 

Loan (FSA).

1/4/2010 848 3/29/ 

2012 

12/2/ 

2009 

12/2/ 

2009 

...............

72 0 ......... 12/11/ 

2011 

12/30/ 

2009 

FSA ..... 10–3546 Removed Not 

ECOA.

................ ........................ Farm Ownership 

Loans (FSA).

12/11/ 

2009 

839 3/29/ 

2012 

12/11/ 

2009 

12/11/ 

2009 

9/3/2010 

73 0 ......... 9/1/2011 4/7/2010 FSA ..... 10–3827 Closure 8/17/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

3/21/ 

2010 

940 3/29/ 

2012 

9/1/2009 9/1/2009 5/27/ 

2010 

74 0 ......... 1/1/2012 10/6/ 

2010 

RD ....... 11–4468 Closure 8/17/ 

2011.

................ ........................ SFH—Rural Housing 

Direct Loans (RD).

2/11/ 

2011 

818 3/29/ 

2012 

1/1/2010 1/1/2010 5/14/ 

2010 

75 0 ......... 1/14/ 

2012 

4/5/2010 RD ....... 10–3813 Removed Not 

ECOA.

................ ........................ Rural Development 3/24/ 

2010 

805 3/29/ 

2012 

1/14/ 

2010 

1/14/ 

2010 

5/13/ 

2010 

76 0 ......... 7/24/ 

2011 

9/4/2009 FSA ..... 09–3073 F 7/25/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

8/27/ 

2009 

979 3/29/ 

2012 

7/24/ 

2009 

10/1/ 

2009 

...............

77 0 ......... 7/28/ 

2011 

8/14/ 

2009 

RD ....... 09–2948 NF 7/28/2011 ................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

8/7/2009 975 3/29/ 

2012 

7/28/ 

2009 

7/28/ 

2009 

4/16/ 

2010 

78 0 ......... 7/29/ 

2011 

1/8/2008 RD ....... 8–0907 NF 7/28/2011 ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

1/6/2010 974 3/29/ 

2012 

7/29/ 

2009 

7/29/ 

2009 

...............

79 0 ......... 10/26/ 

2011 

10/26/ 

2009 

FSA ..... 10–3260 Removed Not 

ECOA.

................ ........................ Farm Operating 

Loans (FSA).

10/26/ 

2009 

885 3/29/ 

2012 

10/26/ 

2009 

10/26/ 

2009 

5/20/ 

2010 

80 ¥253 7/20/ 

2011 

9/11/ 

2009 

FSA ..... 09–3087 Closure/File in 

Federal Court (KCB).

................ ........................ Farm Operating 

Loans (FSA).

7/20/ 

2009 

983 3/29/ 

2012 

7/20/ 

2009 

7/20/ 

2009 

...............

81 0 ......... 7/21/ 

2011 

11/7/ 

2009 

FSA ..... 10–3332 Closure 7/20/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

10/7/ 

2009 

982 3/29/ 

2012 

7/21/ 

2009 

7/1/2009 5/20/ 

2010 
52 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

82 0 ......... 10/31/ 

2011 

10/9/ 

2009 

FSA ..... 10–3343 Closure 6/27/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

9/29/ 

2009 

880 3/29/ 

2012 

10/31/ 

2009 

10/31/ 

2009 

7/1/2010 

83 0 ......... 2/26/ 

2012 

4/2/2010 RD ....... 10–3810 Closure 6/24/ 

2011.

................ ........................ Denial of Loan (RD) 2/26/ 

2010 

762 3/29/ 

2012 

2/26/ 

2010 

2/26/ 

2010 

9/3/2010 

84 0 ......... 2/23/ 

2012 

7/27/ 

2010 

FSA ..... 10–4090 Closure 6/23/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

4/27/ 

2010 

765 3/29/ 

2012 

2/23/ 

2010 

2/23/ 

2010 

4/30/ 

2010 

85 0 ......... 7/13/ 

2011 

7/30/ 

2009 

FSA ..... 09–2919 NF 7/12/2011 ................ ........................ Farm Operating 

Loans (FSA).

7/24/ 

2009 

990 3/29/ 

2012 

7/13/ 

2009 

7/13/ 

2009 

5/5/2010 

86 0 ......... 7/8/2011 3/5/2009 FSA ..... 09–2294 NF 7/5/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

2/25/ 

2009 

995 3/29/ 

2012 

7/8/2009 5/18/ 

2009 

4/16/ 

2010 

87 0 ......... 7/14/ 

2011 

4/6/2009 FSA ..... 09–2482 Removed ........ ................ ........................ Farm Ownership 

Loans (FSA).

4/3/2009 989 3/29/ 

2012 

7/14/ 

2009 

7/14/ 

2009 

4/30/ 

2010 

88 0 ......... 7/6/2011 7/29/ 

2009 

FSA ..... 09–2904 NF 7/1/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

7/9/2009 997 3/29/ 

2012 

7/6/2009 7/6/2009 4/16/ 

2010 

89 0 ......... 6/26/ 

2011 

7/30/ 

2009 

RD ....... 09–2899 NF 6/27/2011 ................ ........................ Rural Business Enterprise Grant 

(loan) (RBS).

7/28/ 

2000 

1007 3/29/ 

2012 

6/26/ 

2009 

6/26/ 

2009 

7/19/ 

2010 

90 0 ......... 6/17/ 

2011 

5/28/ 

2009 

FSA ..... 09–2668 Closure 5/26/ 

2011.

................ ........................ Farm Operating 

Loans (FSA).

5/18/ 

2009 

1016 3/29/ 

2012 

6/17/ 

2009 

4/24/ 

2009 

5/20/ 

2010 
53 

91 0 ......... 7/17/ 

2011 

8/20/ 

2009 

RD ....... 09–3014 Closure 6/23/ 

2011.

................ ........................ SFH—Housing Repair & Rehabilitation Grant/Loan. 8/11/ 2009 986 3/29/ 2012 7/17/ 2009 7/17/ 2009 5/6/2010 

92 0 ......... 8/1/2011 10/8/ 

2009 

FSA ..... 10–3243 Closure 6/27/ 

2011.

................ ........................ Beginning Farmer 

loan.

9/28/ 

2009 

971 3/29/ 

2012 

8/1/2009 8/1/2009 6/15/ 

2010 

93 0 ......... 8/8/2011 8/17/ 

2009 

RD ....... 09–2946 Closure 7/5/ 

2011.

................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

8/8/2009 964 3/29/ 

2012 

8/8/2009 8/8/2009 5/5/2010 

94 0 ......... 8/17/ 

2011 

8/25/ 

2009 

RD ....... 09–2999 Closure 6/23/ 

2011.

................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

8/17/ 

2009 

955 3/29/ 

2012 

8/17/ 

2009 

8/17/ 

2009 

5/20/ 

2010 

95 0 ......... 2/14/ 

2012 

2/26/ 

2010 

RD ....... 10–3716 Closure 6/23/ 

2011.

................ ........................ 502 Housing Loan 

(RD).

2/14/ 

2010 

774 3/29/ 

2012 

2/14/ 

2010 

2/14/ 

2010 

4/30/ 

2010 

96 0 ......... 2/22/ 

2012 

9/8/2010 FSA ..... 10–4260 Closure 6/23/ 

2011.

................ ........................ Farm Operating 

Loan (FSA).

8/23/ 

2010 

766 3/29/ 

2012 

2/22/ 

2010 

2/22/ 

2010 

8/3/2010 

97 0 ......... 6/3/2011 10/7/ 

2009 

RD ....... 10–3337 Partial Finding 

6/03/2011.

................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

10/7/ 

2009 

1030 3/29/ 

2012 

6/3/2009 6/4/2009 4/30/ 

2010 

98 0 ......... 5/18/ 

2011 

6/9/2009 FSA ..... 09–2724 NF 5/18/2011 ................ ........................ Farm Operating 

Loans (FSA).

5/1/2709 1046 3/29/ 

2012 

5/18/ 

2009 

4/14/ 

2009 

...............

99 0 ......... 5/18/ 

2011 

1/20/ 

2010 

FSA ..... 10–3593 NF 5/18/2011 ................ ........................ Farm Operating 

Loans (FSA).

12/30/ 

2009 

1046 3/29/ 

2012 

5/18/ 

2009 

5/1/2009 ...............

100 0 ......... 5/19/ 

2011 

4/7/2009 FSA ..... 09–2455 NF 5/19/2011 ................ ........................ Farm Operating 

Loans (FSA).

4/1/2009 1045 3/29/ 

2012 

5/19/ 

2009 

4/2/2009 4/16/ 

2010 

101 0 ......... 5/26/ 

2012 

7/15/ 

2010 

FSA ..... 10–4089 Adjudication 

Admin Close.

................ ........................ Farm Operating 

Loan (FSA).

7/6/2010 673 3/29/ 

2012 

5/26/ 

2010 

5/26/ 

2010 

8/3/2010 
54 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

102 0 ......... 5/13/ 

2011 

3/5/2009 RD ....... 09–2311 NF 5/13/2011 ................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

2/16/ 

2009 

1051 3/29/ 

2012 

5/13/ 

2009 

5/13/ 

2009 

4/23/ 

2010 

103 0 ......... 5/5/2011 5/27/ 

2009 

FSA ..... 09–2646 NF 5/4/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

5/4/2009 1059 3/29/ 

2012 

5/5/2009 5/5/2009 5/20/ 

2010 

104 0 ......... 4/30/ 

2011 

6/10/ 

2009 

FSA ..... 09–2726 NF 5/2/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

6/5/2009 1064 3/29/ 

2012 

4/30/ 

2009 

6/5/2009 4/16/ 

2010 

105 0 ......... 5/1/2011 3/4/2009 FSA ..... 09–2302 NF 5/2/2011 .. ................ ........................ Farm Operating 

Loan (FSA).

7/7/2009 1063 3/29/ 

2012 

5/1/2009 5/1/2009 ...............

106 0 ......... 4/23/ 

2011 

5/6/2010 RHS ..... 10–3898 F 4/25/2011 .. ................ ........................ 504 Loan Grant/ 

Loan (RD).

4/28/ 

2010 

1071 3/29/ 

2012 

4/23/ 

2009 

4/23/ 

2009 

5/20/ 

2010 

107 0 ......... 8/1/2011 11/17/ 

2009 

FSA ..... 10–3367 Admin Closure ................ ........................ Farm Operating 

Loans (FSA).

11/12/ 

2009 

971 3/29/ 

2012 

8/1/2009 8/1/2009 5/5/2010 

108 0 ......... 5/7/2011 5/27/ 

2009 

RD ....... 09–2667 Admin Closure ................ ........................ SFH—Rural Housing 

Guaranteed Loan (RD).

5/7/2009 1057 3/29/ 

2012 

5/7/2009 5/7/2009 5/20/ 

2010 

109 0 ......... 4/1/2011 6/12/ 

2009 

RD ....... 09–2815 Admin Closure ................ ........................ Rural Housing ......... 6/24/ 

2009 

1093 3/29/ 

2012 

4/1/2009 4/1/2009 4/23/ 

2010 

110 0 ......... 4/8/2011 4/21/ 

2009 

FSA ..... 09–2501 F 4/8/2011 .... ................ ........................ Farm Operating 

Loans (FSA).

4/15/ 

2009 

1086 3/29/ 

2012 

4/8/2009 4/8/2009 4/16/ 

2010 
55 

111 0 ......... 4/9/2011 5/6/2009 FSA ..... 09–2580 NF 4/11/2011 ................ ........................ Farm Operating 

Loans (FSA).

4/30/ 

2009 

1085 3/29/ 

2012 

4/9/2009 4/9/2009 4/16/ 

2010 

112 0 ......... 6/1/2011 10/14/ 

2010 

FSA ..... 11–4379 Status Change 

No Longer ECoa (RC).

................ ........................ Farm Operating 

Loans (FSA).

9/27/ 

2010 

1032 3/29/ 

2012 

6/1/2009 6/1/2009 2/3/2011 

113 0 ......... 4/17/ 

2011 

4/30/ 

2009 

FSA ..... 09–2560 Admin Closure ................ ........................ Farm Operating 

Loans (FSA).

4/17/ 

2009 

1077 3/29/ 

2012 

4/17/ 

2009 

4/17/ 

2009 

Request 

to withdraw ltr. 

Was 

mailed to Comp. on 

040610 

114 0 ......... 5/18/ 

2011 

5/27/ 

2009 

FSA ..... 09–2651 Admin Closure ................ ........................ Farm Operating 

Loans (FSA).

5/18/ 

2009 

1046 3/29/ 

2012 

5/18/ 

2009 

5/18/ 

2009 

Need 

ECOA ltr. 

Gave to 

TMJ on 

051910 

115 0 ......... 4/2/2011 4/26/ 

2009 

RD ....... 09–2568 NF 4/4/2011 .. ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

4/16/ 

2009 

1092 3/29/ 

2012 

4/2/2009 4/2/2009 4/16/ 

2010 

116 0 ......... 4/15/ 

2011 

4/22/ 

2009 

FSA ..... 09–2524 Admin Closure ................ ........................ Farm Operating 

Loans (FSA).

4/14/ 

2009 

1079 3/29/ 

2012 

4/15/ 

2009 

4/15/ 

2009 

...............

117 0 ......... 3/19/ 

2011 

6/5/2009 FSA ..... 09–2729 NF 3/21/2011 ................ ........................ Farm Operating 

Loans (FSA).

5/29/ 

2009 

1106 3/29/ 

2012 

3/19/ 

2009 

3/19/ 

2009 

6/15/ 

2010 

118 0 ......... 4/30/ 

2011 

5/13/ 

2009 

RD ....... 09–2622 Admin Closure ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

4/30/ 

2009 

1064 3/29/ 

2012 

4/30/ 

2009 

4/30/ 

2009 

5/24/ 

2010 

119 0 ......... 3/6/2011 4/7/2009 RD ....... 09–2438 Adjudication 

Admin Closure.

................ ........................ RD (loan) ................ 3/25/ 

2009 

1119 3/29/ 

2012 

3/6/2009 3/6/2009 6/15/ 

2010 

120 0 ......... 2/4/2011 6/30/ 

2008 

FSA ..... 8–1537 Settlement 2/ 

4/2011.

................ ........................ Farm Operating 

Loans (FSA).

6/30/ 

2008 

1149 3/29/ 

2012 

2/4/2009 2/4/2009 4/15/ 

2010 
56 

USDA—OFFICE OF THE ASSISTANT SECRETARY FOR CIVIL RIGHTS—OFFICE OF ADJUDICATION—EQUAL CREDIT OPPORTUNITY ACT CASES STATUTE OF LIMITATION NOT 

EXPIRED—Continued 

No. 

Days 

remaining until 

2 years 

from 

incident 

date 

2 years 

since 

incident 

date 

USDA rcvd 

date Agency Case # Status Investigator adjudicator Pending review OASCR Program name Corresp date 

Days 

elapsed 

(from 

incident 

date) 

Current 

date 

Actual 

incident 

date 

Initial 

incident 

date 

Date ECOA 

letter 

mailed 

121 0 ......... 2/5/2011 2/9/2009 FSA ..... 09–2233 NF 2/7/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

1/15/ 

2009 

1148 3/29/ 

2012 

2/5/2009 2/5/2009 4/16/ 

2010 

122 0 ......... 1/8/2011 2/24/ 

2009 

FSA ..... 09–2273 NF 1/10/2011 ................ ........................ Farm Operating 

Loans (FSA).

1/27/ 

2009 

1176 3/29/ 

2012 

1/8/2009 1/8/2009 4/16/ 

2010 

123 0 ......... 1/21/ 

2011 

1/6/2009 RD ....... 09–2164 NF 1/20/2011 ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

12/21/ 

2008 

1163 3/29/ 

2012 

1/21/ 

2009 

1/21/ 

2009 

4/16/ 

2010 

124 0 ......... 7/7/2011 7/22/ 

2009 

RD ....... 09–2861 Adjudication 

Admin Closure.

................ ........................ SFH—Housing Repair & Rehabilitation Loan (RD). 7/16/ 2009 996 3/29/ 2012 7/7/2009 7/7/2009 4/30/ 2010 

125 0 ......... 1/6/2011 1/29/ 

2009 

FSA ..... 09–2210 NF 1/6/2011 .. ................ ........................ Farm Operating 

Loans (FSA).

1/8/2009 1178 3/29/ 

2012 

1/6/2009 1/6/2009 4/23/ 

2010 

126 0 ......... 12/21/ 

2010 

2/2/2009 RD ....... 09–2226 NF 12/21/10 .. ................ ........................ RBP—Business & 

Industry Guaranteed Loans (RD).

1/20/ 

2009 

1194 3/29/ 

2012 

12/21/ 

2008 

12/21/ 

2008 

4/16/ 

2010 

127 0 ......... 12/20/ 

2010 

11/13/ 

2008 

FSA ..... 8–1651 NF 12/20/10 .. ................ ........................ Farm Operating 

Loan (FSA).

11/3/ 

2008 

1195 3/29/ 

2012 

12/20/ 

2008 

12/20/ 

2008 

4/23/ 

2010 

128 0 ......... 12/20/ 

2010 

8/5/2008 FSA ..... 8–1660 F 12/20/10 .... ................ ........................ Farm Operating 

Loans (FSA).

8/1/2008 1195 3/29/ 

2012 

12/20/ 

2008 

12/20/ 

2008 

4/15/ 

2010 

129 0 ......... 11/29/ 

2010 

1/7/2009 RD ....... 09–2129 NF 11/26/10 .. ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

12/27/ 

2008 

1218 3/29/ 

2012 

11/27/ 

2008 

11/27/ 

2008 

4/23/ 

2010 
57 

130 0 ......... 11/13/ 

2010 

12/23/ 

2008 

RD ....... 09–2118 NF .................. ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

12/4/ 

2008 

1232 3/29/ 

2012 

11/13/ 

2008 

11/13/ 

2008 

4/23/ 

2010 

131 0 ......... 11/1/ 

2010 

10/29/ 

2008 

FSA ..... 09–1973 NF 10/28/10 .. ................ ........................ Farm Operating 

Loans (FSA).

10/18/ 

2008 

1244 3/29/ 

2012 

11/1/ 

2008 

11/1/ 

2008 

4/15/ 

2010 

132 0 ......... 9/17/ 

2010 

12/15/ 

2008 

FSA ..... 09–2095 NF 9/16/10 .... ................ ........................ Beginning Farm 

loan denied (SOL).

12/5/ 

2008 

1289 3/29/ 

2012 

9/17/ 

2008 

9/17/ 

2008 

4/23/ 

2010 

133 0 ......... 8/13/ 

2010 

8/20/ 

2008 

RD ....... 8–1715 NF 8/12/10 .... ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

8/14/ 

2008 

1324 3/29/ 

2012 

8/13/ 

2008 

8/13/ 

2008 

4/23/ 

2010 

134 0 ......... 8/19/ 

2010 

8/27/ 

2008 

FSA ..... 8–1744 F 8/19/10 ...... ................ ........................ Farm Operating 

Loans (FSA).

8/20/ 

2008 

1318 3/29/ 

2012 

8/19/ 

2008 

8/19/ 

2008 

4/15/ 

2010 

135 0 ......... 6/14/ 

2010 

6/21/ 

2008 

FSA ..... 8–1269 NF 6/11/10 .... ................ ........................ Farm Operating 

Loans (FSA).

6/9/2008 1384 3/29/ 

2012 

6/14/ 

2008 

6/14/ 

2008 

5/27/ 

2010 

136 0 ......... 5/16/ 

2010 

5/14/ 

2008 

FSA ..... 7–0270 F 5/17/10 ...... ................ ........................ Farm Storage Facility Loans (FSA). 5/16/ 2008 1413 3/29/ 2012 5/16/ 2008 5/16/ 2008 4/27/ 2010 

137 0 ......... 5/6/2010 5/20/ 

2008 

RD ....... 8–1416 F 5/10/10 ...... ................ ........................ SFH—Rural Housing 

Direct Loans (RD).

5/15/ 

2008 

1423 3/29/ 

2012 

5/6/2008 5/6/2008 4/19/ 

2010 

Current date: 3/29/2012. Priority 1 =<180 days from 2-year incident date. Priority 2 =181–365 days from 2-year incident date. Priority 3 = >365 days from 2-/5-year incident date. Case SOL TBD. Case held in abeyance. Cases resolved prior to SOL expiration. 

Name Title Initial 

Tonya Ahmed ................................................................................................................................................................................................................................................................................................................. Investigator ............................... TA Sterling August ............................................................................................................................................................................................................................................................................................................. Investigator ............................... SA Karen Bascombe-Cleaver .............................................................................................................................................................................................................................................................................................. Investigator ............................... KBC Moses Brown ................................................................................................................................................................................................................................................................................................................. Investigator ............................... MB Cinnamon Butler ........................................................................................................................................................................................................................................................................................................... Investigator ............................... CB Roberto Contreras ......................................................................................................................................................................................................................................................................................................... Investigator ............................... RC Michele Ferreira ............................................................................................................................................................................................................................................................................................................. Investigator ............................... MF Shawntey Fox ................................................................................................................................................................................................................................................................................................................. Investigator ............................... SF Alpha Griffin .................................................................................................................................................................................................................................................................................................................. Investigator ............................... AG William Henry ................................................................................................................................................................................................................................................................................................................ Investigator ............................... WH 
58 

Name Title Initial 

Loretha Johnson ............................................................................................................................................................................................................................................................................................................ Investigator ............................... LJ Minh Pham .................................................................................................................................................................................................................................................................................................................... Investigator ............................... MP Edward Profit ................................................................................................................................................................................................................................................................................................................ Investigator ............................... EP Carletta Watkins ........................................................................................................................................................................................................................................................................................................... Investigator ............................... CW Kristine Yen ................................................................................................................................................................................................................................................................................................................... Investigator ............................... CY Barrett Caine ................................................................................................................................................................................................................................................................................................................. Adjudicator ............................... BC Leila Levi ....................................................................................................................................................................................................................................................................................................................... Adjudicator ............................... LL Carla Quincy .................................................................................................................................................................................................................................................................................................................. Adjudicator ............................... CQ William Reid Strong ...................................................................................................................................................................................................................................................................................................... Adjudicator ............................... RS Pilar Velasquez .............................................................................................................................................................................................................................................................................................................. Adjudicator ............................... PV Millie West-Wigins ......................................................................................................................................................................................................................................................................................................... Adjudicator ............................... MWW Tysan Williams .............................................................................................................................................................................................................................................................................................................. Adjudicator ............................... TW Keyo & Judy ................................................................................................................................................................................................................................................................................................................... Adjudicator ............................... K&J Heather .......................................................................................................................................................................................................................................................................................................................... Adjudicator ............................... H&N Lawrence Rudden .......................................................................................................................................................................................................................................................................................................... Adjudicator ............................... LR Neema G. ....................................................................................................................................................................................................................................................................................................................... Adjudicator ............................... NG 

UPDATE STATUS CODES 

Codes 

Program Intake Div ........................................................................................................................................................................................................................................................................................................................................................ PI Program Investigations Div ............................................................................................................................................................................................................................................................................................................................................ PID Program Adjudications Div ............................................................................................................................................................................................................................................................................................................................................ PAD Fact Finding ................................................................................................................................................................................................................................................................................................................................................................... FF Transfer .......................................................................................................................................................................................................................................................................................................................................................................... T Admin Closure ................................................................................................................................................................................................................................................................................................................................................................ AC Actual Incident Date Change ......................................................................................................................................................................................................................................................................................................................................... AIDC Finding ........................................................................................................................................................................................................................................................................................................................................................................... F No Finding ...................................................................................................................................................................................................................................................................................................................................................................... NF ECOA Complaint Addition ............................................................................................................................................................................................................................................................................................................................................. ECA Assignment ..................................................................................................................................................................................................................................................................................................................................................................... ASMT Pending .......................................................................................................................................................................................................................................................................................................................................................................... P Status Change ............................................................................................................................................................................................................................................................................................................................................................... SC Closure ........................................................................................................................................................................................................................................................................................................................................................................... C 
59 

1The Dodd Frank Financial Reform Act extended the statute of limitations to 5 years, but 

the extension was not retroactive. 

Secretary VILSACK. We are now in a process of knowing. We’ve 

got a red, green, yellow system, and if it’s a red, it tells us that 

within a certain period of time we’ve got to get a response, otherwise their claim expires. We have not let that happen. 

Senator PRYOR. That’s great. I know you have been improving 

this, but I met with a fairly large group in Arkansas, 3 or 4 months 

ago, I don’t remember exactly when it was, and that was one of the 

concerns that pretty much everybody in the group had. 

Secretary VILSACK. They don’t know what the system is, Senator. 

I mean that’s just not accurate. 

Senator PRYOR. Okay. We have one claim, apparently, that’s 2 

years old, that they haven’t gotten a response from you guys yet. 

I’ll tell you what. We’ll sit down after this. I’ll send my folks over, 

or you can send your folks over. We can talk about it. 

Secretary VILSACK. I’m happy to talk to you about it, but sometimes it turns out that there’s more to the story than either you 

or I are getting, and if we have a claim that’s more than 2 years 

old, I’m happy to personally get that rectified. But, I will tell you 

that we are very focused on this, because we are not interested in 

giving rise to the tens-of-thousands of lawsuits and claims that I’ve 

been working on for the last couple of years to get resolved. 

[The information follows:] 

In 2009, USDA discovered more than 14,000 documents that had been classified 

as civil rights program complaints filed against the Department between 2001 and 

2008 that had barely been looked into. Many of these documents in fact turned out 

to be complaints, alleging discrimination under a variety of laws, including title VI, 

section 504 of the Rehabilitation Act, the Food Stamp Act, and the Equal Credit Opportunity Act (ECOA). The delayed and minimal processing of complaints during the 

previous Administration was particularly troubling for those cases that fell under 

the ECOA. The ECOA, which prohibits discrimination in lending, is distinct from 

other civil rights laws because under the ECOA, the Government can be held liable 

by a court for compensatory damages. In addition, the USDA has the authority to 

provide monetary relief to resolve an administrative complaint of lending discrimination against the Department provided the complainant could still go to court on 

that claim (e.g., the statute of limitations is not expired). For incidents of discrimination that occurred before July 21, 2009, the statute of limitations for ECOA 

claims is 2 years.1

The administration proposed $40 million in the fiscal year 2013 President’s budget request for the purpose of settling written claims filed under the ECOA from July 

1, 1997, to October 31, 2009. This funding would be subject to authorization by Congress to allow USDA to waive the statute of limitations to settle these claims. 

A farmer or other customer with an ECOA claim does not have to file a complaint 

with USDA; they have the right to proceed directly to court. However, litigation can 

be a costly alternative to the administrative process. When the backlog was discovered, the typical processing time for a civil rights complaint was 4 years, with many 

cases taking much longer, which meant that by the time a decision was rendered 

on a complaint, no monetary relief could be provided by USDA where discrimination 

and resulting economic harm was found. To ensure that a backlog like the one encountered did not occur again, the Department set a policy to resolve all ECOA complaints either in formal closure and/or a settlement before the expiration of the statute of limitations. To achieve this goal, the Office of Civil Rights doubled the number of investigators and adjudicators working on program complaint processing, and 

instituted a Lean Six Sigma process improvement initiative to streamline the complaint process and reduce processing time. Since the new complaint staff have been 

recruited and trained, every ECOA complaint filed with the USDA has been resolved before the expiration of the statute of limitations. The typical processing time 

for new civil rights program complaints has been reduced from 4 years to 18 

months. Processing time for one component of the complaint process, complaint intake, has been reduced from an average of 90 days to an average of 28 days to de-
60 

termine jurisdiction and intake a complaint in 2012. Despite the extension of the 

ECOA statute of limitations to 5 years in the Dodd Frank Financial Reform Act, 

the Office of Civil Rights is pressing forward to further reduce processing time for 

complaints. Just this year, the Office of Civil Rights debuted a single, USDA-wide 

form that USDA customers and program participants can use to file a civil rights 

complaint. By capturing all of the information needed to accept a complaint, the 

form will reduce the time it takes to process complaints. The form helps to simplify 

and expedite the process for those who believe they have been discriminated 

against. The Department knows how important it can be to customers to receive a 

decision on their civil rights case and is committed to making that happen as quickly as a fair, thorough, and just decision can be reached. 

Senator PRYOR. Like I said, I think you deserve a lot of credit 

for the progress you’ve made in that area, because it’s been something that’s been neglected for a long time. 

Thank you. 

ADDITIONAL COMMITTEE QUESTIONS

Senator KOHL. Thank you very much, Senator Pryor, and we 

thank you-all for being here today, particularly Secretary Vilsack, 

for your very strong testimony. 

We’ll keep the record open for 1 week. 

Secretary VILSACK. Thank you. 

[The following questions were not asked at the hearing, but were 

submitted to the Department for response subsequent to the hearing.] 

QUESTIONS SUBMITTED BY SENATOR HERB KOHL

FIELD OFFICE CLOSINGS

Question. What is the current status of the Farm Service Agency (FSA), Natural 

Resources Conservation Service (NRCS), and Rural Development office closings that 

were recently announced? 

Answer. As of March 29, 2012, Rural Development (RD) closed 20 of the 43 offices 

with plans to close the remaining office by the end of fiscal year 2012 and NRCS 

plans to close or consolidate 24 offices by the end of fiscal year 2012. At this time 

none of the NRCS offices have been closed or consolidated. The 2008 farm bill (Public Law 110–246) requires that FSA take no action toward final approval of the office consolidation proposal until at least 90 days after the Secretary of Agriculture 

notified Members of Congress of his proposal. This notification occurred on February 

27, 2012. 

[Clerk’s note: Subsequently, on May 29, FSA announced its decision to consolidate 

125 of the 131 offices originally proposed for consolidation with other USDA Service 

Centers, consistent with provisions of the 2008 farm bill.] 

Question. What will be the total costs of closing offices in fiscal year 2012? 

Answer. The total estimated costs for the Department in fiscal year 2012 will be 

approximately $44.5 million. 

Question. What do you estimate to be the total savings of these closings in fiscal 

year 2013? 

Answer. Total annual savings for all closures is approximately $58.7 million, already reflected in the budget. 

FOOD SAFETY AND INSPECTION SERVICE

Question. The Food Safety and Inspection Service (FSIS) is responsible for ensuring that the Nation’s commercial supply of meat, poultry, and processed egg products is safe, wholesome, and correctly labeled and packaged. This is accomplished 

through inspection and regulation of the products by agency personnel. The budget 

calls for a $13 million cut in funding associated with implementing new methods 

of poultry inspection and reducing staff by 500 employees. 

Have you begun negotiations with your unions on implementation of the new inspection process? 

Answer. We are currently conducting pre-decisional involvement (PDI) sessions 

with the union that should be completed by June 2012. In PDI, we work with representatives of the union by sharing information about the proposed poultry slaugh-
61 

ter process and asking the union to identify its concerns. We have tried to find solutions to the union’s concerns to limit the scope of bargaining should we decide to 

go forward with the final rule. PDI is essentially pre-negotiations. 

Question. The $13 million in fiscal year 2013 savings assumes implementation of 

the new inspection method by October. Is it realistic to think you can obtain industry buy-in, successfully complete union negotiations, and implement new procedures 

in such a short time? 

Answer. Our timeline is very ambitious, and there are of course some things beyond our control. However, FSIS is committed to implementing on schedule. We understand that most large and small plants favor the proposed change, so industry 

will likely seek to participate shortly after a final rule is published. As stated above, 

we are conducting pre-decisional involvement sessions with the union. We are hopeful that these sessions will limit the scope of any necessary bargaining, assuming 

that the agency decides to finalize the proposal. When the agency makes a final decision on how to proceed, we hope to conduct any negotiations with the union, possibly in late summer. Our experience with the Hazard Analysis and Critical Control 

Point (HACCP)-based Inspection Models Project gives us some understanding of the 

implementation tasks we face and will help us manage the conversion should we 

decide to adopt the rule. Finally, our estimate was based on spreading implementation over about 9 months, so FSIS does not expect to have to convert a large number 

of plants immediately in order to achieve our estimated savings. 

We are currently conducting PDI sessions with the union. In PDI, we work with 

representatives of the union by sharing information about the proposed poultry 

slaughter process and asking the union to identify its concerns. We have tried to 

find solutions to the union’s concerns to limit the scope of bargaining should we decide to go forward with the final rule. PDI is essentially pre-negotiations. 

Question. How do you plan to purge 500 employees from your roles next year? 

Answer. FSIS’ goal is to ensure that every employee affected by this proposed 

change is given an opportunity to remain with the agency. We plan to accomplish 

most of the reductions through attrition and reassignment to vacancies in other 

parts of the agency. 

NON-O157

Question. In September 2011, FSIS published a ‘‘Final Determination’’ that six additional strains of E. coli would be deemed adulterants in certain beef products. 

Please detail the process and scientific evidence on which this determination was 

made. 

Answer. FSIS developed a risk profile to examine the risk of non-O157 Shiga 

toxin-producing Escherichia coli (STEC) as an emerging food safety hazard associated with beef consumption in the United States. This risk profile provides an indepth review of the relevant science to assess public health risk. The conclusions 

reached in the risk profile include that raw non-intact beef products and raw components of those products may harbor non-O157 STEC; that pathogenic non-O157 

STECs are injurious to human health; that ordinary cooking practices, which include rare cooking, may be insufficient to destroy all cells of the pathogen in beef; 

and that a low dose of a non-O157 STEC can induce illness. In fact, the Centers 

for Disease Control and Prevention estimate that each year, non-O157 STEC 

serotypes cause nearly 113,000 foodborne illnesses in the United States. Moreover, 

while more than 100 STEC serotypes have been associated with human illness, 

these six serogroups cause between 70 and 83 percent of the confirmed non-O157 

STEC illnesses. Thus, combating these six serogroups can have a significant beneficial public health impact. 

For these reasons, FSIS announced a final determination that raw, non-intact 

beef products, or raw, intact beef products that are intended for use in raw, nonintact product, that are contaminated with STEC O26, O45, O103, O111, O121, and 

O145, are adulterated, per 21 U.S.C. 601(m)(1) and (m)(3). 

Question. What are the implications on the industry and on our international beef 

trading partners of this determination? 

Answer. FSIS will launch its non-O157 E. coli testing program on June 4, 2012, 

which will allow establishments time to validate their test methods. FSIS will initially test raw beef manufacturing trimmings (the major component of ground beef), 

and then expand testing to other raw ground beef product components. FSIS will 

apply the new tests to samples already being tested for other pathogens, so this policy will ensure a safer, more reliable food supply with minimal additional cost to 

the agency or to industry. 

Foreign countries that export FSIS-regulated products to the United States must 

maintain a food safety system equivalent to that of the United States. Therefore, 
62 

in February 2012, FSIS contacted foreign governments already approved for the export of raw beef to the United States and informed them that FSIS would make a 

limited amount of reagents used in the FSIS laboratory method for non-O157 STEC 

serogroups available to a foreign government if that government wanted to conduct 

a comparative analysis of its methods with test kits assessed by FSIS. 

AGRICULTURAL RESEARCH SERVICE

2013 Budget Resource Reallocation 

Question. The Agricultural Research Service (ARS) is the flagship in-house research agency of the Department. 

This budget proposes to redirect over $70 million in resources from ‘‘lower priority 

programs’’ to higher priority research activities. Please explain your process to determine the priority of research initiatives, and how decisions were made to reallocate resources. 

Answer. Focusing on the need to reallocate limited resources to address high-priority initiatives, all research programs were systematically evaluated based on relevance, quality, impact and cost effectiveness. The fiscal year 2013 budget recommends selected high-priority initiatives which address the administration’s 

science and technology priorities and the Department’s strategic goals. The reallocation of these resources would allow Congress to fund higher priority agriculture research identified in the fiscal year 2013 budget. 

Question. Is the redirection of $70 million in resources in 1 year normal for your 

research portfolio or is this unusually high? 

Answer. The reduction of $70 million is not unusually high. In fiscal years 2009 

through 2012, the President’s budget for ARS proposed reductions and/or terminations of research activities ranging from $39 million to $146 million to help offset 

proposed initiatives. 

Agricultural Research Service Lab Closures 

Question. This budget proposes to close five laboratories within existing facilities, 

and to close one facility entirely. Please explain how these decisions were made. 

Answer. Decisions regarding which programs to propose for termination or closure 

are always difficult but necessary, given the ongoing budget constraints and changing priorities of research endeavors. These research laboratories proposed for closure 

met one or more of the following criteria: 

—Considered by the administration to be of lower priority; 

—Mature where the research objectives have been mainly accomplished; 

—Duplicative or can be accomplished more effectively elsewhere in ARS; 

—Marginal or below threshold funding for program viability or sustainability; 

—Conducted in substandard or inadequate infrastructure and future costs are 

prohibitive; 

—Lacking a critical mass of scientists/support personnel for an effective program; 

or 

—Are carried out by other research institutions. 

Question. What will happen to the employees at these locations? 

Answer. USDA will strive to place all impacted permanent Federal employees in 

suitable jobs where ARS position vacancies exist and for which the employee is 

qualified. While every effort will be made to identify a position for all impacted employees, USDA cannot guarantee that all employees will be placed. In the event that 

a placement cannot be identified for an impacted employee, the Department will ensure that the individual is provided all the entitlements and protections available 

under prescribed personnel procedures and programs. 

Question. How much will it cost to close these labs in 2013? 

Answer. The estimated cost to accommodate the impacted employees and dispose 

of the real property ranges from $10 million to $12 million. These costs may be 

spread over 2 fiscal years, depending on how quickly the real property assets can 

be disposed. 

Question. When do you expect to begin realizing savings from these closures? 

Answer. Beginning in fiscal year 2013, the $17 million associated with the research activities at the six laboratories will be reallocated to high-priority research 

in other ARS laboratories. After all costs have been expensed, the closure of these 

laboratories will allow ARS to achieve significant cost avoidance in the capital improvement and repair/maintenance of these facilities beginning in 2014. 
63 

ANIMAL AND PLANT HEALTH INSPECTION SERVICE

Budget Reductions 

Question. The Animal and Plant Health Inspection Service (APHIS) promotes the 

health of animal and plant resources to facilitate their movement in international 

markets, and works to ensure abundant agricultural products for U.S. consumers. 

These responsibilities include monitoring plant and animal health, working to eliminate or control invasive pests, facilitating safely bringing benefits of genetic research into the market place, providing diagnostic laboratory activities, assisting developing countries improve their safeguarding systems, and protecting and promoting animal welfare. However, the budget proposes a 7-percent funding reduction, 

and elimination of 151 employees. 

How do you plan to meet these responsibilities with such severe cuts in funding 

and staffing? 

Answer. The 2013 budget identified several ways for APHIS to operate more efficiently, allowing APHIS to maximize its resources to carry out its mission. APHIS 

has implemented a variety of changes in its operations that will result in cost-savings for fiscal year 2013, including the consolidation of information technology customer service support and switching telecommunications technology. In addition, 

APHIS has identified other areas where a shift in methodology can allow savings 

and still achieve the agency’s goals. For example, APHIS has developed several statistical and epidemiological methods to increase the efficiency of animal health surveillance while continuing to meet international standards, saving $9 million. 

APHIS also is implementing business process improvements that will result in savings in areas such as licensing of veterinary biologics products, import and export 

reviews, and reviews of petitions to determine the regulatory status of genetically 

engineered crops. The agency’s budget request reflects the implementation of the 

identified efficiencies and changes in strategies without compromising our mission 

and services. 

APHIS is also proposing further reductions in the agency’s contributions towards 

domestic and international efforts to allow those who benefit from our services to 

contribute, or to scale back the Federal role when a pest or disease is simply too 

widespread. We will continue to place high priority on protecting the health and 

value of American agriculture by focusing on those pests or diseases that pose the 

greatest risk and facilitating safe agricultural trade. 

Question. The Animal and Plant Health Inspection Service promotes the health 

of animal and plant resources to facilitate their movement in international markets, 

and works to ensure abundant agricultural products for U.S. consumers. These responsibilities include monitoring plant and animal health, working to eliminate or 

control invasive pests, facilitating safely bringing benefits of genetic research into 

the market place, providing diagnostic laboratory activities, assisting developing 

countries improve their safeguarding systems, and protecting and promoting animal 

welfare. However, the budget proposes a 7-percent funding reduction, and elimination of 151 employees. 

Can you provide assurances that existing safeguards protecting against intrusion 

of new invasive pests into the United States will not be weakened? 

Answer. APHIS uses a comprehensive set of measures to safeguard the United 

States against the introduction of foreign pests and diseases. These measures include assessing and reducing threats overseas through information collection and 

collaborating with foreign governments, and implementing regulatory import policies designed to facilitate trade while excluding high-risk products. The agency also 

works with the Department of Homeland Security’s Customs and Border Protection 

to enforce these regulations, monitoring for introductions of high-risk pests and diseases in the United States and maintaining emergency response capabilities to respond when outbreaks occur. 

In developing its fiscal year 2013 budget proposal, APHIS carefully examined its 

programs and operations to determine where we could gain efficiencies while maintaining focus on the areas that pose the highest risks. For example, APHIS has proposed decreases related to changes in epidemiological methods for swine and cattle 

disease surveillance. These changes will allow the agency to realize savings while 

still meeting international standards. In other cases, APHIS identified efficiencies 

that could be gained in telecommunications and information technology that will 

have little or no effect on program operations and reduce overall costs. Other reductions target programs for pests and diseases that are already established in the 

United States, such as emerald ash borer (EAB), and focus resources on those programs where they could make a difference. Despite intensive efforts by APHIS and 

cooperating States to address this pest, we lack the tools needed to control it. 

APHIS will continue to work on tools to manage EAB over the long term and protect 
64 

U.S. forests and urban landscapes. The overall proposed reduction is the result of 

our efforts to identify targeted changes and reduce costs while focusing on the highest risk areas. 

Question. The Animal and Plant Health Inspection Service promotes the health 

of animal and plant resources to facilitate their movement in international markets, 

and works to ensure abundant agricultural products for U.S. consumers. These responsibilities include monitoring plant and animal health, working to eliminate or 

control invasive pests, facilitating safely bringing benefits of genetic research into 

the market place, providing diagnostic laboratory activities, assisting developing 

countries improve their safeguarding systems, and protecting and promoting animal 

welfare. However, the budget proposes a 7-percent funding reduction, and elimination of 151 employees. 

Much of this savings assumes State-cooperating agencies accept higher costs. 

Have you discussed with your State partners their willingness to take on these 

higher costs? What are the implications of States being unable to pay more for these 

activities? Do you have a back-up plan? 

Answer. Most of APHIS’ plant and animal health programs are cooperative efforts 

with State and local partners, and we understand that our budget proposal affects 

them. In developing the agency’s budget request, we had to make difficult choices 

to enable us to best protect the health of American agriculture while balancing the 

President’s priority of reducing the deficit. Under the reality of current resource limitations, it is reasonable to share with cooperators the costs of programs for which 

they will receive a benefit. 

When addressing pests and diseases of national concern, the Federal Government’s role traditionally is to coordinate and manage program efforts, and ensure 

that we apply program methods and technologies consistently in all affected States 

and areas. Since these pests and diseases have a direct impact on State and local 

conditions and since States and localities are beneficiaries of the actions, it is expected that all parties will devote available resources to the effort. While there may 

not have been agreement to the level of contributions for each pest and disease program, it is reasonable to expect all parties to contribute some level of resources towards these cooperative programs that, in most cases, have been in place for several 

years. These decreases will result in a more appropriate allocation of funding responsibility given the budget realities we face, and a transparent level of Federal 

contribution will allow cooperators to plan for future needs. The agency’s budget request is presented more than 6 months in advance of when it will become effective, 

which allows time for program partners to develop their spending plans in the coming year. The agency will continue to conduct pest and disease programs based on 

the total available resources while considering the highest priorities for the program. We will continue to work cooperatively with our State partners on these programs and use available resources as effectively as possible. 

ANIMAL WELFARE

Question. Animal Welfare has been a high priority of this administration. In past 

years the Department transferred funds from other accounts to supplement these 

activities. However, this budget cuts Animal Welfare funding by over 11 percent 

(larger than the overall reduction to the agency). What has caused this change in 

the administration’s priority toward Animal Welfare responsibilities? 

Answer. Animal Welfare still remains a high priority of the administration. 

APHIS recognizes that we need to do our part in helping to reduce Federal spending. As such, we are scaling back operations as a cost-savings measure, including 

our priority areas such as animal welfare inspection and enforcement. Even with 

the proposed budget in 2013, the Animal Welfare program remains a priority and 

will be comparable to the adjusted fiscal year 2011 funding level, including the reprogramming of $2.5 million in funding. 

Additionally, APHIS will continue its focus on the most egregious violators of the 

Animal Welfare Act (AWA) while seeking ways to operate more efficiently in fiscal 

year 2013. The agency has implemented measures to enhance its animal welfare inspection and enforcement efforts in recent years. These measures include identifying 

potential regulation changes related to commercial dog breeders and dealers, reevaluating the current methodology for calculating the frequency of inspection, and 

developing and sponsoring meetings and trainings aimed at increasing compliance 

with the AWA. APHIS also conducted a business process improvement analysis of 

its enforcement activities, including animal welfare enforcement. After identifying 

more than 80 recommendations for streamlining its processes and improving timeliness, the agency pilot tested several recommendations with considerable success. 
65 

These business process improvement efforts will allow quicker and more effective actions that require fewer resources. 

LACEY ACT

Question. One of the rare increases in this budget is for implementation of Lacey 

Act responsibilities. In fact, the budget seeks to double Lacey Act spending by 50 

percent, to $1.5 million. Please describe what the Department is doing this year regarding its Lacey Act responsibilities. In your view, do you think this USDA effort 

is successful? What do you plan to do with the 50-percent increase? Could these responsibilities be more efficiently handled outside the Department? 

Answer. As amended in the 2008 farm bill, the Lacey Act prohibits the importation of any plant, with limited exceptions, taken or traded in violation of domestic 

or international laws. The amendments were designed to address illegal logging in 

other countries. Illegal logging is environmentally destructive and undermines markets for wood products produced in the United States, affecting businesses and jobs. 

Among other things, the Lacey Act requires a declaration for imported shipments 

of regulated products. This declaration must contain the scientific name of the 

plant, the importation value, the quantity of the plant, and name of the country 

where the plant was taken. 

APHIS began phased-in enforcement of the Lacey Act in May 2009 and currently 

receives about 10,000 declarations per week. Approximately 10 percent of these are 

submitted on paper forms that require significant resources to analyze and store. 

Currently, electronic declarations can only be made through licensed Customs brokers. In 2012, APHIS has $775,000 available for activities conducted under the 

amendments to the Lacey Act. The agency is using these funds for a dedicated staff, 

secure document storage, and outreach activities to inform the various industries 

and importers affected by the Lacey Act amendments. The program selects 1 percent of the declarations at random for a cursory review and stores the remaining 

documents. The Department of Homeland Security’s Customs and Border Protection 

collects the electronic declarations and sends them to APHIS on a weekly basis. For 

2013, the agency is requesting an additional $725,000 for a total funding level of 

$1.5 million. With these additional funds, the program would work toward providing 

an easier electronic means for collecting and maintaining declarations to help eliminate the need for paper-based declarations. This will provide another alternative to 

importers for filing declarations (as importers currently must go through a licensed 

customs broker or fill out a paper declaration) and allow APHIS to be more responsive to importers’ needs. In addition, APHIS would utilize additional staff to assist 

with Lacey Act activities and expand outreach efforts to affected industries so they 

better understand the act’s requirements. With the requested increase in 2013, the 

program anticipates selecting an increased share of the declarations for a review. 

APHIS is working within an interagency group representing the U.S. Forest Service, U.S. Department of Homeland Security’s Customs and Border Protection (CBP), 

U.S. Trade Representative, U.S. Department of Justice, U.S. Department of State, 

U.S. Fish and Wildlife Service, the Council on Environmental Quality, and the U.S. 

Department of Commerce, to implement the Lacey Act provisions and review the 

program. The interagency group represents a broad range of viewpoints on how to 

implement the act. Because of APHIS’ regulatory role and interaction with the importing community as well as its ongoing joint efforts with CBP through the Agriculture Quarantine Inspection program, the agency is well positioned to implement 

the act. APHIS will continue working with its partners to administer the Lacey Act 

in the most efficient manner possible given the volume of declarations and products 

covered. 

BIOTECHNOLOGY REGULATORY SERVICES

Question. In the past, this subcommittee has provided increased funding for Biotechnology Regulatory Services to support an effective biotechnology compliance program for genetically engineered organisms. Private sector demands on these services 

continue to expand. Currently, the agency currently faces litigation due to its inability meet its regulatory responsibilities in a timely manner. However, this budget reduces this funding by 8 percent. How do you plan to improve this unfortunate situation with a large funding cut? 

Answer. I appreciate the subcommittee’s support for APHIS’ Biotechnology Regulatory Services (BRS) program. BRS is integral to the process of ensuring that genetically engineered (GE) crops under development can be safely tested and brought 

to market. After a careful evaluation of the nonregulated status petition review 

process, APHIS has identified several process improvements that are expected to 

achieve the goal of reducing the overall length and variability of the time it takes 
66 

for the petition process. Once complete, this effort is expected to reduce review time 

by more than 50 percent (average review times will decrease from about 3 years to 

just over 1 year). For instance, APHIS has eliminated unnecessary steps, clarified 

and simplified responsibilities, and put into place time frames for completion of individual steps while maintaining appropriate safeguards. Additionally, a portion of 

the program’s $5 million increase in fiscal year 2012 will be used for one-time legal 

fees related to litigation over GE alfalfa. The remaining portion will be used to hire 

additional staff and enter into contracts for environmental analysis to support the 

improvements to the petition review process. While we are proposing a small decrease in fiscal year 2013, biotechnology remains a priority for the agency. Even 

with the proposed reduction, the BRS funding level would increase more than 25 

percent from the fiscal year 2010 level of $13.3 million to the fiscal year 2013 request of about $16.8 million. 

AGRICULTURAL MARKETING SERVICE

Microbiological Data Program 

Question. The fiscal year 2012 House report did not include funding for the Microbiological Data Program. The conference report included the following statement: 

‘‘The statement of the managers remains silent on provisions that were in both 

House Report and Senate Report that remain unchanged by this conference agreement, except as noted in this statement of the managers.’’. 

Please explain why this program was zeroed out in the budget even though no 

funding was provided in fiscal year 2012. 

Answer. The Microbiological Data Program (MDP) was continued in 2012 because 

the funding reduction in the Consolidated and Further Continuing Appropriations 

Act, 2012 for Marketing Services (which includes MDP) could not be positively identified. While the House provided $77,500,000 for Marketing Services, accompanied 

by Appropriations Committee report language that denied funding for MDP, the 

Senate and final Appropriations Act provided $82,211,000. Both the Senate committee and conference reports were silent on the matter. The program was zeroed 

out in the fiscal year 2013 proposed budget due to budget constraints. In developing 

the fiscal year 2013 budget, we took a hard look at activities which support AMS’ 

core mission. The fiscal year 2013 budget eliminates funding for MDP, which saves 

about $4.3 million. This reduces discretionary funding while focusing Marketing 

Services resources on AMS’ core mission. AMS is not a food safety agency and MDP 

is not closely aligned with AMS’s core mission to facilitate the competitive and efficient marketing of U.S. agricultural products. 

PESTICIDE RECORDKEEPING PROGRAM

Question. The budget proposes to terminate the Pesticide Recordkeeping Program. 

Currently, 27 States and 2 territories are reimbursed to conduct federally recognized 

State pesticide recordkeeping requirements. This program has been in place since 

1992. 

Please explain the rationale for terminating this program in light of ever-shrinking State budgets. 

Answer. We continue to take practical steps to control expenditures and optimize 

organizational structure to more effectively manage current and future resources. In 

making budget determinations we are focusing on AMS’ core mission to facilitate 

competitive and efficient marketing of U.S. agricultural products. 

Question. Since this program has been operating for 20 years, why does AMS now 

believe it is no longer central to its core mission? 

Answer. We took a hard look at activities that support AMS’ marketing-based 

mission and Pesticide Recordkeeping is not as closely aligned with marketing as 

other AMS activities such as Market News or Transportation and Market Development. Although Federal monitoring and advisory services will be discontinued, applicators of restricted use pesticides will still be required to retain their records and 

provide access upon request to Federal and State agency representatives. Since the 

Federal program has been operating for 20 years, we have had the opportunity to 

educate a large number of private applicators of federally restricted use pesticides. 

More than 100,000 pesticide recordkeeping manuals, brochures and other outreach 

materials have been distributed each year by the program to producers. 

CONSERVATION

Question. The budget proposes a decrease of $2.5 million and 142 staff years for 

conservation technical assistance. 
67 

How does NRCS plan to provide important technical assistance with fewer funds 

and fewer staff? 

Answer. NRCS will continue to provide important technical assistance to landowners in addressing their resource issues and concerns. This will be accomplished 

through the use of improved delivery and streamlining processes such as the Conservation Delivery Streamlining Initiative (CDSI), expanding the role of Technical 

Service Providers (TSPs), and continuing to build strong conservation partnerships 

with local, State, and Federal entities as well as with the private sector. 

Question. Please describe what organizational improvements NRCS plans to implement. 

Answer. In coordination with the USDA Blueprint for Stronger Service, NRCS is 

taking a holistic look at our entire organization to ensure we are well prepared to 

meet our mission now and in the years to come. NRCS currently has teams working 

on 17 major efforts that will result in a streamlined, efficient organization to transform NRCS into a 21st century, multi-billion dollar agency that can adapt to change 

while delivering exceptional conservation assistance to private landowners. The information is provided below. 

The efforts are organized into five categories: 

—Conservation Delivery Streamlining Initiative (CDSI).—This effort will result in 

new and innovative technology that will support conservation assistance process 

online, streamline service delivery, and will give landowners 24/7 access to their 

conservation information. It will allow conservationists to spend more time in 

the field while enabling administrative experts to handle the administrative 

tasks of programs and applications. 

In fiscal year 2012 through fiscal year 2013, CDSI will implement a national 

strategy to realign field positions through the establishment of program support 

specialist position. This position will reduce the administrative burden on the 

technical field employees and enable a more streamlined and efficient approach 

to the delivery of conservation support. —Science Efforts.—NRCS launched efforts to gain agency-wide efficiencies by 

sharing resources, reducing duplication of effort, and enhancing our role as a 

leader in conservation science while addressing decreased operating budgets. 

Efforts include: 

—Consolidate Soil Survey offices and provide shared services across larger geographic regions; 

—Reduce duplication of effort and streamline our system of developing and 

maintaining conservation practice standards and associated guidance; 

—Improve our capacity to support complex engineering needs across the country; and 

—Create more effective and efficient systems for conservation technology acquisition, development, and support to the field. 

In fiscal year 2012 and fiscal year 2013, NRCS will implement the consolidation 

of the Soil Survey offices, beginning with the 24 office closures identified by Secretary Vilsack. 

—State Efforts.—NRCS is also working on State level improvement efforts to coordinate, centralize, and streamline State processes and needs. 

—States are charged with finding ways to increase direct technical service and 

increase resource sharing across State boundaries. Selected States in each region will test models where they reduce duplication by sharing services such 

as contract management and technical expertise; 

—NRCS is also evaluating the benefits of centralizing support for quality assurance, equitable relief, and legal appeals at national headquarters to reduce 

burdens on State and field staff. 

In fiscal year 2012, NRCS kicked off the multi-State servicing pilot that is testing a comprehensive approach to identifying areas for State-sharing, analyzing 

the option, and implementing long-term strategies for sharing resources. 

—Administrative Efforts.—NRCS is taking a comprehensive approach to analyze 

administrative efforts; specifically NRCS is focusing on four key administrative 

functions or areas: 

—Budget and financial management; 

—Human resources; 

—Procurement; and 

—Property functions within NRCS. 

NRCS is determining short-term solutions to position NRCS to best integrate 

the USDA Administrative Solutions Project and deliver the best support to the 

field. 

In fiscal year 2012, NRCS will be moving forward with the development of a 

new administrative operating model that will focus on streamlining processes, 
68 

developing virtual teams, and enhancing standardization. NRCS will develop 

and implement the new operating model throughout fiscal year 2013 and this 

will result in increased capacity for administrative services and will position 

NRCS for improved performance. 

—Modernization Efforts.—Modernization efforts across NRCS will look at IT, Public Affairs, and Outreach to identify ways to improve the delivery of communications and information services to our internal and external customers. 

In fiscal year 2012, NRCS began the modernization of the public affairs and IT 

organizations. Public Affairs implemented the redesign of the external Web site 

and engaged with GovDelivery for modernization of communications delivery. 

Public Affairs is also underway with a comprehensive redesign that is currently 

in the baseline assessment stage and will result in fiscal year 2013 with additional improvements to the Public Affairs function at NRCS. The IT assessment 

is currently underway as well; an organization redesign is expected in fiscal 

year 2013. This effort will help to improve IT delivery, enhance oversight, and 

enable increased service delivery across NRCS. 

RURAL DEVELOPMENT

Broadband 

Question. This subcommittee has provided substantial support for expanding highspeed broadband service to remote rural areas. The Federal Communications Commission (FCC) is now engaged in revising access to the Universal Service Fund, on 

which the bulk of Rural Development broadband loans rely for a portion of their 

income. Reducing Universal Service Fund payments to rural providers will place 

Rural Development’s loan portfolio in severe jeopardy. 

Please discuss how USDA is working with the FCC to ensure that rural 

broadband providers are not treated unfairly under the new FCC requirements. 

Answer. Throughout the years, Rural Development and FCC have worked closely 

to uphold the universal service provisions in the 1996 Telecommunications Act as 

Congress had intended. Those provisions ensure that rural America has access to 

advanced telecommunications services at rates and at levels of service that are comparable to those offered in urban America. Prior to implementing the new Universal 

Service Fund (USF) Reform Order, Rural Development consulted with FCC on numerous occasions to help ensure that this important statutory objective was fulfilled. 

Rural Development has provided briefings and data to the FCC on its portfolio and 

on the impacts of revenue reductions to RD’s borrowers. The USDA also worked 

with the FCC in developing a national broadband strategy published in 2009, as required by the 2008 farm bill. 

Question. What is USDA doing in the short run to protect existing broadband borrowers and their rural customers? 

Answer. In the short run, Rural Development is analyzing its portfolio to determine the impacts of reduced USF and intercarrier compensation revenues on rural 

telecommunications providers serving rural high-cost communities. Rural Development has conducted a series of listening sessions with borrowers, financial experts, 

and other segments of the rural infrastructure sector to fully comprehend the impact on rural America. Rural Development is keenly focused on making sure that 

rural America continues to receive affordable, high-speed broadband service required for economic development and job creation. 

Question. Is the Department experiencing reduced loan demand due to the uncertainty of looming changes to FCC requirements? If so, does that affect the Department’s broadband loan request for fiscal year 2013? 

Answer. The Rural Utilities Service (RUS) and the telecommunications industry 

continue to evaluate the impact of the FCC revisions in USF, ICC, and local rates. 

While the level of uncertainty caused by the order may delay project consideration, 

the agency fully supports the proposed funding levels for fiscal year 2013. The 

broadband infrastructure needs across rural America were demonstrated by the tremendous response to the Recovery Act’s Broadband Initiatives Program (BIP). There 

were many valuable projects which simply could not be funded. We are hopeful that 

some BIP applicants will apply for regular RUS loan programs to further extend existing broadband networks to rural areas. We are also hopeful the FCC will consider 

the needs of RUS borrowers who are actively investing in rural broadband networks 

made possible through the Recovery Act by reestablishing the regulatory and financial certainty that is needed for rural telecommunications investment to continue. 

Question. When the FCC announced plans to reform the Universal Service Fund, 

what changes did the Department make to its broadband loan underwriting criteria 

to reflect this new uncertainty? 
69 

Answer. Even before FCC published it proposed USF Reform Order, Rural Development revised its underwriting criteria in both our infrastructure and broadband 

programs to determine reliance on USF and the impact of reduced revenues. Only 

loans which meet more rigid underwriting standards advance through this process 

to loan approval. The agency further enhanced its underwriting criteria after the 

first USF order was published and will continue to make changes to ensure any taxpayer investments are secured. 

HOUSING

Question. This budget calls for a 27-percent reduction in your flagship direct single family housing loan program. 

Is demand for this program going down? 

Answer. The USDA budget proposal reflects the efforts of this administration to 

do more with less and to make tough decisions where necessary. Historically, the 

direct single family housing program has helped low- and very-low-income borrowers to obtain homeownership. Our budget proposal will refocus the direct single 

family housing program to serve low- and very-low-income borrowers, and will target a portion of the funding to help attract a new generation of bright, young teachers to our rural schools. 

Over the past decade, Rural Development has increasingly relied upon guaranteed 

loans to cost effectively provide for the credit needs of rural America. In fact, during 

this administration alone, funding for the guaranteed single family housing program 

(excluding Recovery Act funding) has quadrupled from about $6.2 billion to $24 billion in 2011. This funding has helped to fill a critical need for credit in rural America, and importantly, this level of assistance is being provided at no subsidy cost 

to taxpayers. 

Question. What is the current backlog of applications and pre-applications for 

these loans? 

Answer. As of March 29, 2012, the total number of Section 502 Direct Loan applications on a waitlist pending processing due to the lack of available funds is 11,398. 

Question. Is there any other Federal direct loan program that provides home-ownership assistance for low- and very-low-income rural residents? 

Answer. There is no other Federal direct loan program similar to the Section 502 

Direct Loan program. The Section 502 Direct Loan program provides mortgage financing for low- and very-low-income rural Americans unable to get credit from 

other sources. The program includes a payment assistance feature to reduce the borrower’s housing cost for principal, interest, taxes, and insurance to approximately 

24 percent of income. The other fundamental difference in program administration 

between USDA and other Federal housing programs such as Housing and Urban 

Development (HUD) programs is USDA’s field staff, which allows USDA to maintain 

a local presence in the rural communities it serves. 

Question. Why are you seeking such a drastic cut in the program? 

Answer. Some of the same rural residents with low- and very-low-incomes who 

qualify for loans under the single family housing direct loan program can also qualify for the single family housing guaranteed loan program. The primary difference 

between the two programs is that the direct loans are made and serviced by USDA 

and in some instances contain an interest subsidy. The guaranteed loans are made 

and serviced by a bank or other commercial lender at the current market interest 

rate and guaranteed by the Federal Government. Unlike the direct program, the 

guaranteed program is provided at no subsidy cost to taxpayers. 

Question. Please discuss the requested set-asides for rural teachers and self-help 

housing program participants. Why did you elevate the priority of those applicants 

above others, including healthcare workers, police and fire workers, daycare workers, etc? 

Answer. The budget proposes to set aside a small portion of the direct single family housing program funding for teachers and beneficiaries of the Mutual and SelfHelp Grant Program for a portion of the fiscal year, after which the funds will be 

available for all applicants. 

The decision to set aside funding for the Mutual and Self-Help Grant Program 

ensures that adequate loan funds are available to support the grant funding provided by Congress. Without sufficient loan funding we would be unable to fulfill the 

intent of Congress with respect to self-help housing. 

Rural Development remains committed to the support of all low- and very-lowincome families, regardless of their profession. Set aside funding for teachers, however, would help address the shortage of teachers willing to work in rural areas that 

lack affordable housing. Teachers are a key factor in creating sustainable rural communities. By targeting a portion of this assistance to teachers, we hope to encourage 
70 

many bright, young, and enthusiastic college graduates to consider returning to 

rural America to begin their professions as teachers. 

Question. This budget seeks to eliminate the multi-family housing direct loan program (section 515). The stated justification for this elimination is that the guaranteed multi-family housing loan program (section 538) also provides construction financing and more funds are needed in the multi-housing revitalization program to 

maintain existing projects. 

How effective is the guaranteed loan program in promoting construction in small 

towns and not just in larger communities? 

Answer. The Multi-Family Housing (MFH) Guaranteed Rural Rental Housing 

Program (section 538) is very effective in promoting construction and preservation 

in rural areas. Like the MFH direct loan program (section 515), the section 538 program is restricted to areas of no more than 20,000 in population, unless eligible 

under a statutory exception. Approximately 50 percent of the loans guaranteed 

under section 538 preserve existing affordable properties in rural areas, most notably section 515 properties. For new construction, financial tools, including section 

515 and section 538 loans, are more efficient for properties with more units of affordable housing, so nearly all of the new construction activity is in rural areas with 

populations between 10,000 and 20,000. 

Question. How effective is the guaranteed program in offering affordable rents for 

very-low-income households? 

Answer. The MFH Guaranteed Rural Rental Housing Program is very effective 

in offering affordable rents to very-low-income seniors, families, and individuals. 

The vast majority of tenants are under 80 percent of the area median income. More 

than 70 percent of all properties financed in the past several years using the section 

538 program also have low-income housing tax credits (LIHTC), which impose lower 

income thresholds for tenants to qualify under the LIHTC program. Under the 

LIHTC program tenants must be very-low-income (50 percent of area median income) or low-income (less than 80 percent of area median income) families. In the 

last 3 years alone, the MFH Guaranteed Rural Rental Housing Program provided 

financing to build or preserve approximately 200 apartment buildings with 11,100 

apartments, of which more than 9,400 are rented to very-low-income or low-income 

seniors, families or individuals. 

Question. What is the total funding needed for the revitalization program? 

Answer. We believe the budget request provides adequate funding for the Revitalization Program. 

COMMUNITY FACILITIES

Question. This budget requests a $2 billion Community Facilities Direct Loan Program (CF) level, up from $1.3 billion in fiscal year 2012. 

Is there demand for a $2 billion annual loan program? 

Answer. As a result of the credit crisis, one of the biggest issues facing rural communities today is the lack of access to capital. In recent years, the agency has seen 

an increase in funding requests for projects that are larger in nature, scope, and 

complexity. Accordingly, we believe the proposed program level reflects the sizable 

demand that exists for infrastructure financing in rural areas. 

Question. What is the current backlog of applications and pre-applications? 

Answer. As of May 2, 2012, the Community Facilities Program has a total backlog 

of about $1.8 billion. This includes approximately 635 direct loan applications for 

$1.6 billion, over 900 grant applications for $51 million, and 27 guaranteed loan applications for $131 million. 

Question. Why is the guaranteed loan program eliminated? 

Answer. The guaranteed loan program originated as an inexpensive alternative to 

the direct loan program and was designed to stimulate additional assistance to moderate income communities in rural areas. The default rate for the program, however, 

has been much higher than originally projected; in effect, this has made it more expensive than the direct loan program. The proposed increase in the direct loan program will more than offset the effects of the guaranteed loan program termination. 

RURAL JOBS ACCELERATOR

Question. We have recently become aware of a new initiative, the Rural Jobs Accelerator, which apparently will be a joint effort among USDA, the Economic Development Administration, the Delta Regional Commission, and the Appalachian Regional Commission. 

Please explain the purpose of this initiative and how it is designed to work? 

Answer. The programmatic guidelines and goals of the Rural Jobs and Innovation 

Challenge (RJA) are very similar to those of the regular RCDI; RJA merely empha-
71 

sizes building regional capacity. To be eligible for RJA, applicants must be eligible 

for the regular RCDI program. 

RJA is a coordinated interagency funding opportunity designed to promote accelerated job creation and community and economic development in rural regions 

through regional collaboration. The RJA will provide resources to support economic 

development in the areas of renewable energy, food production, rural tourism, natural resources, and advanced manufacturing. The RJA will also assist distressed 

rural communities in accelerating job creation by leveraging local assets, building 

stronger economies, and creating regional linkages. The Funding Partners include 

USDA, the Department of Commerce’s Economic Development Administration 

(EDA), the Appalachian Regional Commission (ARC), and the Delta Regional Authority (DRA). This coordinated, integrated, interagency initiative offers applicants 

the opportunity to submit a single project narrative to access multiple funding 

sources that collaboratively support regional development in rural communities. 

Question. What are the performance measures you will use to gauge the initiative’s success? 

Answer. Applications will be evaluated based on their ability to satisfy core evaluation criteria. This includes building community and regional capacity, linking to 

regional clusters and opportunities, integrating and building regional partners, and 

utilizing multiple resources to meet project objectives and promote substantive economic growth in the region and rural communities. Grant recipients will identify 

project milestones and submit reports throughout the project period, along with a 

final project performance report. Success will be gauged by the degree to which 

grant recipients achieve their project milestones. 

Question. What administrative and programmatic resources have you committed 

in fiscal year 2012, and what resources do you hope to use in fiscal year 2013, to 

support the initiative? 

Answer. The Rural Jobs Accelerator will be administered using existing USDA 

staff for fiscal years 2012 and 2013. Approximately half ($2.49 million) of the funding available for use in fiscal year 2011 and half ($1.81 million) of the funding available for use in fiscal year 2012 for the Rural Community Development Initiative 

(RCDI) will be used to support this initiative. The remaining $4.33 million in RCDI 

funding was announced under a separate notice of funding availability on March 21, 

2012. 

Question. Will USDA’s support in fiscal year 2012 require a transfer or reprogramming of funds? 

Answer. No. USDA is using existing authorities and a portion of the existing appropriations for the Rural Community Development Initiative (RCDI) to fund our 

portion of the Rural Jobs Accelerator. The projects funded by USDA must meet all 

existing RCDI funding criteria and would be eligible for RCDI assistance regardless 

of their participation in the Rural Jobs Accelerator. However, by employing a 

‘‘whole-of-government’’ approach through the Rural Jobs Accelerator we can significantly enhance the prospects for job growth in the selected regions. 

NUTRITION

Equipment Grants 

Question. In 2009, this subcommittee provided $100 million through ARRA for 

grants to allow schools to purchase and renovate their food service equipment. The 

fiscal year 2013 budget for Child Nutrition Programs includes $35 million for this 

same activity. In February 2012, USDA’s Office of Inspector General (OIG) issued 

a report criticizing FNS’ management of these ARRA funds. According to the OIG 

report, FNS ‘‘did not create adequate, proactive controls to ensure that grants were 

awarded based on Recovery Act criteria and accurate data.’’ 

If funding is provided in fiscal year 2013, what assurances can FNS provide to 

this subcommittee that funds will be managed appropriately? 

Answer. USDA believes that the ARRA grant award process in its totality was 

highly effective and met the goals set forth by the Recovery Act to effectively and 

timely distribute funds to low-income schools that clearly demonstrated need. The 

OIG audit did not identify any instances of improper use of the ARRA funds, but 

it did identify some areas for process improvement, and FNS will address these 

issues where needed. FNS’ oversight of the State agencies which operate the school 

meals program will focus on ensuring that the processes used to distribute grant 

funds meet all appropriate requirements and ensure that funds are used for their 

intended purpose. As the audit report notes, OIG has accepted FNS’ plan to implement additional internal controls within its standard competitive grant award processes, identifying areas that can be strengthened for future grant awards. I am con-
72 

fident that FNS would appropriately manage another round of school equipment 

funding. 

Moreover, it is critically important to recognize that there remains significant 

unmet funding need for schools to replace out-dated equipment and help schools 

meet our new, updated standards for school meals. These standards represent the 

first update to school meals in over 15 years, emphasizing fruits, vegetables, and 

whole grains. Schools need modern, appropriate equipment to help them serve 

healthy meals. Only about 22 percent of the school districts who requested ARRA 

funds received them. So, the present $35 million request for the School Meals 

Equipment Grants is critical to providing support to help fund equipment purchases 

for school districts that did not receive Recovery Act funding. 

Question. How do you envision these grants being allocated? 

Answer. FNS would award equipment assistance funding to State agencies using 

a competitive process, and the State agencies would then build on the Recovery Act 

of 2009 criteria, which targeted low-income districts with the greatest need. When 

developing the specific competitive grant process that States would use when awarding these grants to school districts, FNS would also consider how to best meet the 

needs of school districts as per the requirements associated with the $35 million 

school meals equipment grant funding request. 

Question. What changes to your grant process will be made in response to OIG’s 

recommendations and concerns? 

Answer. FNS will use management evaluations and/or targeted reviews to determine State agency compliance with the grant application and award processes. As 

part of these reviews, if FNS reviewers determine that (1) exceptions to the grant 

application were made during grant execution; and (2) potential grant awards to the 

State are pending, FNS will develop appropriate corrective action plans which could 

include submission of documentation for selected future grant awards to FNS for review and approval prior to implementation. This documentation may include applications (RFAs) and grant award evaluation processes prior to the States releasing 

the applications to potential subgrantees. 

CIVIL RIGHTS

Question. Can you explain to the subcommittee the status of the women farmers 

discrimination litigation against USDA, along with the status of the USDA’s plans 

for a Women and Hispanic Farmers Claims Process? 

Answer. I will provide an update of the civil rights discrimination litigation as 

well as USDA’s plans for a Women and Hispanic Farmers Claims Process. 

[The information follows:] 

In 2006, the D.C. Circuit affirmed the district court’s denial of class certification 

of plaintiffs’ ECOA claims. Love v. Vilsack, 439 F.3d 723 (D.C. Cir. 2006). In 2009, 

the D.C. Circuit affirmed the district court’s dismissal of the claims plaintiffs 

brought under the Administrative Procedure Act (APA), 5 U.S.C. sections 701–706, 

by female farmers in Love v. Vilsack, and remanded the cases to the district court 

on the named plaintiffs’ individual claims under ECOA. Garcia v. Vilsack, 563 F.3d 

519 (D.C. Cir. 2009). In January 2010, the Supreme Court denied plaintiffs’ petitions for certiorari on the APA claims in Love and Garcia. 130 S. Ct. 1138 (Mem.) 

(2010). All appeals related to class certification have been decided in favor of USDA 

and the Love case is now limited to individual claims of credit discrimination. Love 

has been stayed while the voluntary Alternative Dispute Resolution claims process 

is being finalized by USDA. 

In order to offer relief to female and Hispanic farmers who allege credit discrimination during the relevant statutory period, USDA developed an entirely voluntary 

ADR program to settle those claims without litigating them individually in court. 

This non-adversarial process will be administered by a third-party neutral, who will 

make individualized determinations based on the evidence presented by each claimant. Successful claimants will receive up to $50,000 or $250,000 each depending on 

the tier of relief chosen by the claimant, plus tax relief on their award and possible 

debt cancellation for certain outstanding farm loans. Whether any individual chooses to participate in the program is entirely up to the individual. Those farmers who 

wish to ignore the ADR process are free to do so. 

The claims process has not yet started. On January 25, 2012, after hearing from 

members of Congress, community organizations, and farmers, the Department announced changes to the claims process framework. In May, USDA selected an independent Administrator/Adjudicator who is now preparing to implement the claims 

process. Claimants will not need to pay any filing fees to participate in the claims 

process. 
73 

Question. What is the USDA’s outreach plan to spread the word to women farmers nationwide about the availability of the claims process? Who will conduct the 

outreach, what forms of outreach will be used, and how much money does the agency plan to spend on outreach? Is the Agency involving women’s and farmers’ groups 

in the development of the outreach plan? 

Answer. USDA has engaged in outreach activities to inform potential claimants, 

including women farmers who have alleged past discrimination, about the claims 

process. As part of the outreach process, USDA has held numerous meetings and 

webinars with farmers and community organizations, including women’s organizations. USDA will expend up to $75,000 for outreach inclusive of staff travel and 

meeting space incidentals. In addition, USDA announced the claims process (including recent changes) through press releases and media interviews; and created a 

dedicated Web site with informational documents about the process such as a fact 

sheet and summary notice. USDA currently operates a toll-free call center to register individuals interested in participating in the process, allowing them to request 

a claims package. 

USDA plans to continue to notify women and Hispanic farmers who allege past 

discrimination against USDA about the claims process requirements and the date 

on which the claims period will commence. Ongoing outreach to potential claimants 

will be conducted in a number of ways. USDA will use media to contact as many 

women and Hispanic farmers as possible about the claims process, including social 

media, press releases, Web sites, and posters, and USDA will hold additional 

webinars summarizing the program to stakeholders. USDA also plans to mail postcards directly to over 500,000 women and Hispanic farmers listed in USDA customer information systems about the claims process, plans to continue to hold meetings with farmers to notify them about the program, and plans to work with thirdparty organizations to reach out to potential claimants. Finally, USDA plans to 

enter into cooperative agreements with third-party organizations to educate potential claimants about the process. 

Question. What, if any, specific program reforms is USDA implementing to prevent future discrimination against women farmers in particular? 

Answer. To prevent future discrimination against women farmers, USDA has 

strengthened training, outreach, and policy efforts. At my direction, every political 

appointee in the Department has attended civil rights trainings and USDA has offered civil rights training to Farm Service Agency, Natural Resources Conservation 

Service, and Rural Development leadership and staff at State offices in more than 

a dozen select States that have a history of problems in this area. The States included Oklahoma and Arkansas, two of the States with the highest concentrations 

of female producers. The States selected for civil rights training for the Farm Service Agency State leadership accounted for a total of 40 percent of FSA program complaints in fiscal year 2008, and the States selected for Rural Development trainings 

represented 42 percent of RD program complaints in the same period. 

We commissioned an independent assessment of civil rights in USDA’s program 

delivery. We are working to implement the recommendations of this Cultural Transformation Assessment to help USDA improve field-based service delivery to minority 

and women farmers and ranchers, and communities that have historically not participated in USDA programs. The recommendations for the Farm Service Agency in 

the assessment included steps to provide better representation of women and minority farmers on county committees, to take prompt action to hold employees accountable for discrimination, and to institute outreach as a core mission of the Agency. 

To improve USDA programs’ ability to serve all farmers, we analyzed the potential 

for new policies, rules and decisions to impact civil rights. Over 3 years the Office 

of Civil Rights recommended important changes on about 20 percent of all policies 

they reviewed. We also more than doubled the number of internal compliance reviews of USDA agencies to evaluate their civil rights policies, procedures and practices. 

USDA is committed to reaching out to women farmers and involving new generations of female farmers in local and State USDA committees. The Farm Service 

Agency also recently designed a customer’s guide to improve all producers’ knowledge of farm loan programs. 

In 2010 and again in 2011, USDA’s FSA recorded the fewest number of customer 

civil rights complaints since the Department began keeping track, 37 complaints 

were filed in 2010 and 37 in 2011. We have also made changes to improve the processing of the complaints we do receive. Adding staff and conducting Lean Six Sigma 

process improvement have reduced the typical processing time for new civil rights 

program complaints from 4 years to 18 months. 
74 

QUESTIONS SUBMITTED BY SENATOR ROY BLUNT

DIVERSITY OF RURAL ELECTRIC PROGRAMS

Question. The budget request for the Rural Utilities Service electric loan program 

provides specific set-asides for renewable energy plants and fossil fuel powered facilities that include carbon emissions reduction. As a result, the budget request puts 

traditional power plants sourced by fossil fuels, such as natural gas and coal, at a 

disadvantage in participating in the program. 

While I appreciate the importance of renewable energy and carbon sequestration, 

Americans in rural areas rely on cheap, accessible electricity that demands a diversification of energy sources for affordable customer rates. Energy policy should have 

a balanced approach and not focus on one particular source. 

Does USDA know the potential long-term economic effects if rural electric cooperatives are unable to utilize the loan program to construct natural gas and coalfired power plants or to provide basic facility upgrades that do not specifically reduce emissions? 

Answer. USDA has not calculated the long-term economic effects of limiting future investment in fossil fuel-fired power plants. However, by virtue of being located 

in rural America, the rural electric cooperatives are ideally situated to invest in 

many renewable energy technologies such as solar and wind power. By targeting future assistance to renewable fuel technologies the rural electric cooperatives have 

the opportunity to play a central role in this administration’s ‘‘all-of-the-above’’ approach to energy independence. 

Question. How will the recent EPA announcement on greenhouse gas emission 

limits affect participation in the electric loan program? 

Answer. The Rural Utilities Service (RUS) is expecting an increase in demand for 

RUS loan funds as borrowers work to comply with the EPA greenhouse gas emissions limits. At this point in time, RUS does not know the amount needed for borrowers to comply with EPA. However, the estimates for environmental upgrades 

range from $1 billion this fiscal year and reaching approximately $3.5 billion by 

2016 according to the Electric Program application pipeline and the National Rural 

Electric Cooperative Association’s 10-year projections. 

Question. Because the average natural gas powered electric plant has a CO2 emissions level below the recently announced EPA guidelines, what is the reasoning for 

prohibiting their access to two-thirds of the funding in the rural electric program 

unless they include carbon capture sequestration systems? 

Answer. This limitation is one of many ways to achieve energy independence and 

improve the environmental health of the Nation. The proposal does not preclude the 

ability of rural electric cooperatives from seeking other sources of financing to build 

or upgrade fossil fuel-fired power plants. Rather, it provides an opportunity for the 

rural electric cooperatives to be at the forefront of implementing renewable energy 

strategies that will power a greener tomorrow. 

FREE TRADE AGREEMENTS WITH COLOMBIA AND PANAMA

Question. Last year, Congress approved the trade agreements with South Korea, 

Colombia, and Panama. Implementation of all three of the trade agreements will increase U.S. farm exports by an additional $2.3 billion—supporting nearly 20,000 

American jobs. 

The agreement with South Korea came into force earlier this month (March 15). 

However, the agreements with Colombia and Panama have not been fully implemented. Full implementation of these two agreements would increase farm exports 

by $400 million and support approximately 4,000 jobs. It is important that these 

agreements are implemented expeditiously to open up these markets for our agriculture producers. 

What is the current status of the free trade agreements with Colombia and Panama? 

Answer. The United States-Colombia Trade Promotion Agreement will enter into 

force on May 15, 2012. The Department of Agriculture’s Foreign Agricultural Service (FAS) worked closely with the Office of the U.S. Trade Representative (USTR) 

and stakeholders to establish effective mechanisms for ensuring market access 

under the terms of the agreement, particularly for tariff-rate quotas (TRQs). A 

range of issues will be resolved prior to implementation, including barriers to U.S. 

poultry and rice. Almost 70 percent U.S. exports to Colombia will become duty-free 

upon implementation, and most other tariffs will be reduced and eliminated over 5 

to 10 years, with all Colombian tariffs on agricultural products duty-free in 19 

years. 
75 

With respect to the United States-Panama Trade Promotion Agreement, discussions with Panama are currently focused on changes required in their laws and regulations in order to implement the agreement. FAS is working closely with USTR 

to ensure the mechanisms Panama will use to implement its agricultural TRQs will 

be ready when the agreement enters into force. Panama will be adapting its current 

auction system for some TRQs and establishing new licensing and first-come, firstserved systems for others. FAS and USTR are working to ensure that these systems 

will be implemented in a way that is consistent with the provisions of the agreement and that will enable U.S. exporters to take full advantage of new opportunities. 

Question. Is there an estimated date for implementation of these agreements? 

Answer. The United States-Colombia Trade Promotion Agreement will enter into 

force on May 15, 2012. An implementation date for the United States-Panama Trade 

Promotion Agreement will be set once agreement has been reached on all of the implementation mechanisms. FAS is working with USTR to ensure the new market 

access opportunities established in the agreement will be available as soon as the 

agreement enters into force. In an effort to ensure the implementation of the agreement moves forward expeditiously, a team of FAS, USTR, and Customs officials will 

travel to Panama in the first week of May to assist the Panamanian Government 

as it develops its TRQ regulations. 

AGRICULTURAL RESEARCH SERVICE LAB CLOSURES

Question. Consistent with the budget request, the fiscal year 2012 agriculture bill 

closed 12 Agricultural Research Service (ARS) labs. However, the budget request did 

not adequately budget for the expense of closing these labs, which turned out to be 

far more significant than either USDA or the subcommittee imagined. 

How much do you estimate it will ultimately cost ARS to relocate staff and close 

all 12 labs in fiscal year 2012? 

Answer. The termination of research activities at the 12 ARS laboratories affected 

233 permanent ARS employees. The one-time costs associated with the relocation 

or separation of affected personnel and the disposal of property are estimated at $39 

million in fiscal year 2012. 

EXTRAMURAL RESEARCH

Question. I understand ARS plans to reduce existing extramural research funding 

by 30 percent this year to find the additional funds necessary to close the labs. 

How did ARS arrive at the decision to reduce extramural funding as opposed to 

other activities within ARS? 

Answer. The temporary budget reductions to remaining ARS programs in fiscal 

year 2012 are necessary to finance the one-time costs associated with the closure 

of 12 ARS laboratories. The 30-percent reduction to extramural research supported 

by ARS resources is one of several measures necessary to finance the one-time costs. 

These measures also include restricted hiring and assessing all remaining ARS 

management units. As a result of these actions, only about half of the one-time costs 

to close the 12 laboratories will be financed by reductions to extramural supported 

research. Although ARS’ mission is to conduct primarily intramural research, ARS 

along with other USDA agencies, such as the National Institute of Food and Agriculture (NIFA), will continue to support high-priority extramural research. 

CAPITAL ASSET AND CONSTRUCTION PLAN

Question. The fiscal year 2013 budget includes a proposal to close six more labs. 

Last year, the subcommittee requested a capital assets and construction plan from 

ARS. We have not received the capital asset plan. Without the benefit of this plan, 

how did USDA determine which labs would be closed? 

Answer. ARS has completed a capital investment strategy for recapitalization and 

new research facilities based on facility condition, needs, and research program priorities. The report establishes criteria and processes for determining and recommending the appropriate level of new investments needed for USDA research facilities. The report’s recommendations and overall strategy will inform and support the 

development of administration budget requests for research facilities in the out 

years. 

During the process of evaluating all ARS research programs, and in conjunction 

with developing the capital investment strategy, ARS also developed a conceptual 

framework to determine its capital investment needs based on the relation between 

the condition of a facility to the priority level of a program. This methodology allowed ARS to determine, on a scale, which facilities are in the poorest conditions 

and housed the lowest priority programs. The six laboratories recommended for clo-
76 

sure were identified after all evaluations were completed. The 2013 budget proposes 

reallocating these funds to facilities/programs that support higher priority initiatives. 

CLOSING COSTS OF RESEARCH LABORATORIES

Question. Should the subcommittee agree with ARS’s plan to close the labs, does 

the budget request adequately account for the cost of closing these labs? 

Answer. The estimated cost to accommodate the potentially impacted employees and dispose of the real property ranges from $10–12 million. If the fiscal year 2013 

proposed budget reallocations are approved, ARS would be able to utilize the associated program funds to offset the facility closure costs. 

BUDGET IMPACT OF SCHOOL MEALS REGULATIONS

Question. I have received a number of inquiries from schools across Missouri regarding the Department’s new school meal regulations. I am deeply concerned about 

the unintended costs on public schools as a result of the Department’s regulations. 

With the price of food commodities rising, it looks like the impact of the regulations will result in an unfunded Federal mandate on Missouri schools. My constituents have said that the fruit, vegetable, and whole grain requirements will increase 

the cost of a school lunch by as much as $0.28 per meal. The increase in funding 

provided in the reauthorization is set at $0.06 per lunch, significantly less than the 

estimated actual cost of implementation. 

These cost increases will be borne by local school districts, which will likely be 

forced to increase prices on paid lunches, resulting in a reduction in overall participation rates. 

How does the Department plan to deal with rising food commodity costs? 

Answer. Beginning October 2012, school food authorities that meet the new meal 

patterns will receive a $0.06 lunch reimbursement rate increase authorized by the 

Healthy, Hunger-Free Kids Act of 2010 (HHFKA). Furthermore, the HHFKA requires that schools set an adequate price for paid lunches so that schools receive 

as much revenue from paid lunches as the Federal program provides for free 

lunches. The HHFKA also requires that schools set competitive prices for foods sold 

outside of the reimbursable meal so that revenues received from the sale of nonprogram foods equal the cost of obtaining them. When taken together, the additional 

Federal reimbursement provided for improved meals and the non-Federal revenue 

generated by the aforementioned provisions will, on average, make sufficient resources available for schools to meet the new meal requirements. Also, it is important to note that over 3,000 schools receiving the HealthierUS School Challenge 

(HUSSC) awards report they have been able to achieve similar standards without 

significant cost increases. To date, 61 Missouri schools have been recognized as 

HUSSC award winners, including 12 schools that were recognized at the Silver 

level. 

In addition, one key way that USDA helps schools provide cost-effective, nutritious meals is by providing agricultural commodities in the form of USDA Foods. 

The USDA Foods program helps schools stretch limited food budgets by providing 

high-quality fruits, vegetables, meat, fish, poultry, dairy, and grains. School commodities, which represent approximately 15–20 percent of the food on the cafeteria 

serving line, now include more fruits and vegetables, more whole grains, and more 

food that is lower in sugar, salt, and fat than ever before. For example, USDA purchased nearly $300 million in canned, fresh, frozen, and dried fruits and vegetables 

for schools through the USDA Foods program and the Department of Defense (DOD) 

Fresh Fruit and Vegetable Program in fiscal year 2011. The USDA Foods program 

is well positioned to help schools meet the new meal requirements and we are confident that most of the schools will continue to benefit from this program. 

Question. Does the Department have a plan for dealing with increased costs and 

the burdens these costs will place on public schools? 

Answer. Careful consideration of cost and logistical issues were an important part 

of developing the updated nutrition standards for the school meals programs. USDA 

is committed to ensuring that any such standards are practical and accompanied by 

extensive guidance and implementation assistance for our school partners. As part 

of the Healthy, Hunger-Free Kids Act of 2010, USDA built the new rule around recommendations from an Institute of Medicine expert panel, updated with key 

changes from the 2010 Dietary Guidelines for Americans. Getting the science right 

is critical to better nutrition and health for our children. 

We received unprecedented public participation and input on the proposed standards, and made modifications to the proposed rule where appropriate. As a result, 

the final standards are much less costly than the proposed standards, provide addi-
77 

tional time for implementation of some key changes, and better accommodate the 

administrative constraints facing schools and States. These responsible reforms do 

what is right for children’s health in a way that is practical and achievable in 

schools across the Nation. USDA’s estimate shows implementation of the new nutrition standards for school lunches and breakfasts will cost $3.2 billion over the next 

5 years. This is less than half of the proposed standards’ originally estimated cost 

of $6.8 billion. 

In addition, we believe the $0.06 lunch reimbursement rate increase authorized 

by the Healthy, Hunger-Free Kids Act of 2010 along with the revenue support provisions noted in the previous response such as the non-Federal revenue generated by 

schools setting an adequate price for paid lunches so that schools receive as much 

revenue from paid lunches as the Federal program provides for free lunches and the 

requirement that schools set competitive prices for foods sold outside of the reimbursable meal so that revenues received from the sale of nonprogram foods equal 

the cost of obtaining them, will make sufficient resources available for schools to 

meet the new meal requirements. Finally, we are working on technical assistance 

and menu planning materials to help schools plan and prepare nutritious meals in 

a cost-effective manner, and will make those materials available as soon as they are 

complete. 

BUDGET IMPACT OF COMPETITIVE STANDARDS RULE

Question. It’s clear from speaking to many of the schools in Missouri that they 

depend on revenue from foods sold outside of the National School Lunch & Breakfast Programs to give them greater ability to purchase healthier options for school 

meals. 

There is a lot of anxiety in the school foodservice community over how new competitive foods’ standards will impact this revenue stream, particularly at a time 

when school cafeterias are being asked to cut their budgets. 

I understand that the Department believes schools should expect increased revenue from competitive foods lines as a result of the new standards. 

What data you are basing this assumption on? 

Answer. The Department projected increased revenue from competitive foods as 

a result of regulations implementing section 206 of the Healthy, Hunger-Free Kids 

Act of 2010 (HHFKA). The rule, published in the Federal Register on June 17, 2011 

(76 FR 35301), requires school food authorities (SFAs) to set prices for nonprogram 

foods purchased with SFA funds, a subset of competitive foods, at a level sufficient 

to generate revenue proportionate to their share of SFA food costs. The Department 

estimated that HHFKA section 206 would generate $7.3 billion in additional SFA 

revenue over 5 years. The primary source for that estimate was USDA’s school year 

2005–2006 School Lunch and Breakfast Cost Study. That study found that nonprogram foods generated revenue for SFAs equal to just 71.3 percent of their reported 

costs of production. Counter to common perception, on average, the revenue generated by program meals subsidizes the production of other SFA foods when labor 

and overhead costs are properly allocated to all foods prepared with SFA funds. 

Elimination of that subsidy is the source of the revenue generated by HHFKA section 206—not nutrition standards for competitive foods, which are still under development. Whatever the ultimate impact of those nutrition standards on competitive 

food sales, section 206 ensures that competitive foods will not divert revenue from 

the production of reimbursable meals. Reforming SFA accounts in this manner frees 

up program revenue for the investments necessary to meet new meal standards. 

Question. Do you plan to perform any sort of assessment on impact of the competitive foods standards on school cafeteria budgets? 

Answer. Yes. The Department will begin data collection in school year 2014–2015 

for a ‘‘School Nutrition and Meal Cost Study’’. That study will examine both the 

school nutrition environment and school foodservice operations. The study will assess the impact of nutrition standards on the content of reimbursable meals and 

competitive foods, and will compare the revenues generated by each of these to their 

allocated share of SFA costs. 

QUESTION SUBMITTED BY SENATOR TOM HARKIN

LEAN FINELY TEXTURED BEEF

Question. In the light of the large amount of press attention recently given to a 

product called lean finely textured beef (LFTB), I would like to clarify for the record 

some aspects of the situation. As I understand it, the Department of Agriculture 

was informed and reviewed the process and technology involved in producing lean 
78 

finely textured beef and did not raise problems with the process, nor did the Department indicate a problem with including it in what is sold as ‘‘ground beef’’ without 

any special labeling. It is also my understanding that the Food and Drug Administration allows the use of ammonia in food under a designation of ‘‘generally recognized as safe.’’ The factual circumstances seem to show that the company that developed the process felt it was applying an innovative technology and addressing food 

safety risks in doing so, again, with the knowledge of and effectively an OK from 

the Department of Agriculture. Now the company has suspended operations at several plants and jobs of hundreds of workers are in doubt. 

My question is simply, does lean finely textured beef meet the applicable food 

safety standards and criteria of the Department of Agriculture? 

Answer. Yes, lean finely textured beef (LFTB) products meet Federal food safety 

standards. The process used to produce LFTB is safe, and adding LFTB to ground 

beef does not make that ground beef any less safe to consume. 

QUESTIONS SUBMITTED BY SENATOR SUSAN M. COLLINS

FOOD SAFETY

Question. I understand that the Department of Agriculture (the Department) has 

announced that it is preparing to propose new regulations for the grinding of raw 

beef that would require additional recordkeeping to help the Department trace outbreaks back to their source. It has been reported that these new regulations, which 

have not yet been published, would require retail stores to keep detailed records 

identifying the supplier and the quantities of all source materials used in raw 

ground beef products. The Department has long encouraged retail stores to keep 

such detailed records, but has not required them to do so. The Department has indicated that it considers the use of beef trimmings without detailed recordkeeping as 

a ‘‘high-risk’’ practice. 

What additional actions is the Department taking or proposing to take to improve 

its ability to prevent foods containing dangerous pathogens from ever leaving the 

slaughterhouse, processing facility, or entering the retail chain? 

Answer. FSIS announced and asked for comment on a new ‘‘test and hold’’ requirement for the meat and poultry industry that, once implemented, will significantly reduce consumer exposure to unsafe food. When the policy is finalized, industry will be required to hold products that FSIS has sampled for microbiological testing until the test results are received. The product will be released if the results 

show that it is safe to move in commerce. This approach could have prevented 22 

recalls during fiscal year 2009 and fiscal year 2010. Under this policy, FSIS expects 

fewer recalls by industry, fewer illnesses, and increased consumer confidence in the 

safety of the food supply. The agency is also announcing new procedures for tracing 

product that is positive for E. coli O157 to its supplier as well as actions that will 

strengthen its implementation of HACCP. 

Question. What steps is the Department taking to educate consumers about the 

risks of food-borne illness, the dangers and avoidance of cross contamination, and 

the need to handle and cook meat properly to ensure it is safe for consumption? 

Answer. On June 28, 2011, FSIS launched a joint national multimedia campaign 

with the U.S. Department of Health and Human Services to help families prevent 

food poisoning: The Food Safe Families—Check Your Steps campaign. The campaign 

urges consumers to remember four key steps to food safety: Clean (surfaces, utensils, and hands), separate (raw meat and poultry from other foods), cook (to a safe 

temperature), and chill (raw and prepared food). We have reached millions, in 

English and Spanish, using a variety of donated media, including television, radio, 

print media, social media tools, and the Internet. 

On May 5, 2011, FSIS launched the Mobile Ask Karen application 

(m.AskKaren.gov on your phone’s mobile browser), a Web-based smartphone application that gives consumers another way to access the only U.S. Government-sponsored food safety virtual-representative. Consumers can search by topic and products, send e-mails, or use the chat feature, all via their mobile devices. Thus, users 

can get answers to their food safety questions anywhere: At the grocery store, barbecue grill, and kitchen stovetop. 

During fiscal year 2011, the USDA Food Safety Discovery Zone, a new and improved USDA Food Safety Mobile, visited grocery stores, schools, and local community events to educate consumers about food safety and to promote the Food Safe 

Families Campaign. The Discovery Zone improves consumers’ awareness of the risks 

associated with mishandling food and provides in-depth, hands-on demonstrations 

of the steps they can take to reduce their risk of contracting a foodborne illness. 
79 

NATIONAL SCHOOL LUNCH PROGRAM

Question. Recently the Department purchased for use in the National School 

Lunch Program a product that is commonly referred to as ‘‘pink slime,’’ known in 

the industry as ‘‘boneless lean beef trimmings’’ or ‘‘lean finely textured beef,’’ as an 

additive in ground beef. This product is reportedly treated with ammonium hydroxide gas, suggesting that decontamination is necessary to ensure the product is safe 

to eat. What analysis has the Department done to determine whether this product 

is safe for consumption? 

Answer. Ammonium hydroxide is used in the production of lean finely textured 

beef (LFTB) as a pH control agent to help reduce harmful bacteria. Ammonium hydroxide, produced by mixing anhydrous ammonia (ammonia gas) with the natural 

moisture in LFTB, was determined to be Generally Recognized as Safe (GRAS) by 

the Food and Drug Administration (FDA) in 1974, after extensive review and a rulemaking process (21 CFR 184.1139). USDA, after consultation with FDA, determined 

that ammonium hydroxide is safe and suitable for use in the production of meat and 

poultry products (FSIS Directive 7,120.1). 

Question. Have there been incidents of food-borne contamination in products containing pink slime? 

Answer. Some ammoniated beef has been shown to be contaminated with E. coli 

O157:H7, and such product has been excluded or removed from commerce under the 

same procedures FSIS employs for any product it regulates. 

Question. Parents in Maine have contacted school districts to inquire about the 

safety and wholesomeness of products containing this additive. Are there any health 

implications, particularly for school-age children, associated with consuming foods 

that have been treated with ammonium hydroxide? 

Answer. No. Ammonium hydroxide is accepted as GRAS for this use. 

Question. Does the Department plan to undertake any additional studies or actions to ensure that these products are safe for consumption by the public and by 

our Nation’s school children? 

Answer. No. No evidence has been presented or cited that would raise a question 

about the GRAS status of this use of ammonium hydroxide. However, based on requests from school districts across the country, USDA announced on March 15 that 

it would offer more choices in the National School Lunch Program in terms of purchases of ground beef products. 

LEAN FINELY TEXTURED BEEF

Question. I understand that the Department has recently announced it will give 

schools the choice of using products that do not contain pink slime. 

What will the Department do with unwanted product that contains this additive 

that, in some cases, has already been delivered to school districts? 

Answer. On March 30, a policy memo was sent to State distributing agencies 

(SDAs) and school food authorities (SFAs) that not only reaffirmed the safety of lean 

finely textured beef (LFTB) but also outlined the options available for the treatment 

of their current inventories if recipients chose not to utilize the product as intended. 

USDA does strongly encourage all SDAs and SFAs that have ordered donated beef 

products to use them as intended but understands the desires of certain recipient 

Agencies not to do so. However, USDA cannot provide entitlement credit or reimbursement for any processing-related fees or replacement product. If the SFA does 

not wish to use donated beef products that contain LFTB, the SDA must determine 

if the donated products can be reallocated to another SFA that is willing to use 

them. If donated beef products in SDA inventories cannot be reallocated to another 

SFA, the SDA must determine if they can be transferred to another SDA for distribution to SFAs in the National School Lunch Program, or if such foods can be 

transferred for use in the Emergency Food Assistance Program (TEFAP), or another 

eligible charitable institution. SDAs will be responsible for any transportation costs, 

and there will be no compensation to an SDA or SFA for lost entitlements. 

USDA continues to affirm the safety of LFTB products. However, the Department 

was overwhelmed with inquiries from schools and parents who did not want it to 

be allowed as a component in the ground beef that USDA purchases. The schools 

are our customers and they were demanding choices. The decision was driven by 

customer demand. 

Question. What is the estimated cost to the Department and to schools of choosing 

not to use products containing this additive? 

Answer. AMS estimates that the cost of beef products that do not allow for the 

inclusion of LFTB could run 3 percent higher than the comparable LFTB-allowing 

beef product specifications. Depending on whether a school food authority is ordering donated products or using non-entitlement funds, selecting this option could ei-
80 

ther result in them receiving a smaller volume of products or a higher cost. USDA 

does not expect there to be any increased direct costs to the Department from providing the option. 

AGRICULTURAL RESEARCH SERVICE PROGRAM REALLOCATION

Question. In fiscal year 2012, and in the 10 previous fiscal years, ARS and the 

potato industry, through a potato research initiative, have cooperated to identify research projects that have scientific merit and address potato industry priorities. 

ARS researchers serve as the lead investigators on all projects and collaborate with 

land grant universities and other private entities to conduct this research. The President’s fiscal year 2013 budget request proposes to reallocate $4.6 million 

to improve the control of diseases attacking small fruits, nursery crops, potatoes, 

and other crops, through the development of resistant varieties and disease management strategies. Preventing the damaging effects of pests and diseases requires the 

consistent application of sound pest management strategies, including the development of disease- and pest-resistant crop varieties. These strategies are the result 

of years of collaborative efforts among ARS, research institutions, private industry, 

and local producers that have resulted in better pest management, reduced environmental impact, improved quality, and increased yield. Can you explain how the Department’s proposed reallocation will affect these partnerships? Is USDA committed 

to providing adequate funding for pest and disease management programs, including the development of pest and disease-resistant varieties through ARS that address the potato industry’s identified research priorities? 

How does the Department intend to fund and administer these programs, and 

what resources will USDA commit to these programs to ensure they are able to address evolving pest and disease management challenges facing producers? 

Answer. USDA will maintain its strong partnerships with its cooperators, customers, and stakeholders, including agricultural producers and universities. These 

close working relationships are an integral part of plant breeding and pathology research programs nationwide, and the Department will use its dedicated resources 

to continue these partnerships that address producer priorities in plant production 

and protection. 

Public plant breeding programs are crucial in meeting needs identified by the potato and other industries. Development of improved germplasm and varieties, as 

needed, with enhanced disease and pest protection is a high-priority research initiative within the Department. 

USDA research will continue to address producer needs for plant health and sustainability. Research priorities will continue to be established through a continuing 

dialogue with customers and stakeholders. 

NATIONAL INSTITUTE OF FOOD AND AGRICULTURE CROP PROTECTION PROGRAM

Question. The President’s fiscal year 2013 budget proposes to consolidate several 

pest management programs into a single ‘‘Crop Protection’’ program and to provide 

$29.1 million for that program in the next fiscal year. Integrated Pest Management 

(IPM) programs allow research universities to partner with State, local, and regional producers to conduct critical field work and research, perform field inspections, and provide producer notifications. These steps are critical to converting laboratory research into improved pest and disease management strategies that can be 

applied in the field to reduce pesticide application and improve crop quality and 

yield. 

Please describe how the Department intends to administer these important programs should such a consolidation occur. How would the proposed consolidation affect ongoing partnerships with States and research universities to transfer laboratory research to the field? How much of the $29.1 million that is requested would 

go to fund IPM programs, and specifically, potato IPM programs? How much of the 

requested funding under this proposed consolidation would go to Minor Crop Pest 

Management (IR–4) program efforts? 

Answer. USDA is currently soliciting broad stakeholder input on the appropriate 

design of the Crop Protection Program in anticipation of funding in fiscal year 2013. 

Our goal is to improve the efficiency of the program and enhance NIFA’s ability to 

support research, education, and extension activities needed to assist in global food 

security and respond to other major societal challenges. 

[Additional information is provided below.] 

The President’s budget for fiscal year 2013 proposed the consolidation of six pest 

management budget lines into the Crop Protection Program. The budget proposal 

identifies five priority areas that will be supported by the new program: 

—The development of crop protection tactics and tools; 
81 

—The development of diversified IPM systems; 

—Enhancing agricultural biosecurity; 

—Developing IPM for a sustainable society; and 

—Developing the next generation of IPM scientists. 

These priority areas encompass core research, extension and service activities 

supported by the six budget lines that will be consolidated. As we implement the 

new program, we will try to minimize disruption to ongoing efforts that are currently supported by the six budget lines, which includes the IR–4 program. We 

value the partnerships that have developed as a result of the Department’s involvement with these pest management efforts over the past 50 years, and we remain 

committed to supporting critical research, extension and service efforts in fiscal year 

2013 and beyond. We believe that the proposed budget consolidation and creation 

of the Crop Protection Program will strengthen these partnerships, and will result 

in the most effective and efficient use of Federal funding appropriated to the National Institute of Food and Agriculture for pest management efforts. Funding allocations for this competitive program will be determined when 2013 funding is provided. 

NORTHEAST REGIONAL AGRICULTURAL RESEARCH

Question. One of the major strengths of American agriculture is the wide variety 

of crops grown, and the ability of different geographic regions to produce high-quality, often unique, agricultural products. USDA research activities through the ARS 

play a key role in leveraging departmental resources, academic expertise, and the 

input of regional producers to improve quality and expand production of many crops. 

The President’s fiscal year 2013 budget proposes to close several ARS laboratories, 

including the New England Plant, Soil, and Water Research Center—the only ARS 

lab in the six-State New England Region that conducts crop, soil, water, environmental, and economic research. 

The closing of ARS labs represents a significant loss not only for regional producers, but also for affiliated research universities that will lose critical staff and 

resources. These losses can jeopardize the ability of universities and industry to 

apply prior research and develop better pest and disease management strategies. 

Moreover, the closure of the only plant, soil, and water ARS laboratory in New England hardens the impression that the Department does not view the Northeast’s agricultural sector as worthy of growth, improvement, or investment. Does the Department believe it is important to maintain an ARS laboratory research footprint in 

New England and other regions of the country? Has the Department analyzed the 

potential economic impacts of closing these labs on regional producers who may directly benefit from the applied research that these labs can generate? 

Answer. ARS is a national research institution; although many ARS research laboratories address the needs of local producers, these laboratories also often serve as 

model systems. Thus, research conducted at many ARS locations yields benefits to 

producers in Maine and elsewhere. USDA believes that there are significant benefits 

to maintaining research facilities across the range of climatic, soil, and cropping systems represented in the United States. Though the Orono facility is proposed for 

closure, ARS is maintaining a comprehensive set of research laboratories in New 

York, Pennsylvania, Maryland, and West Virginia that continue to address the 

needs of producers in the northeast. Agriculture in the United States is seldom extremely location-specific. Although crops usually are particularly productive in certain combinations of soils and climate, those conditions can often be found at multiple locations. Taking advantage of the differences across the country contributes 

to the important characteristic of resilience leading to increased food security. 

The Department has not undertaken a comprehensive economic analysis of the 

impacts on regional producers from the proposed closures. Aside from Orono, ARS 

conducts many research projects around the concept of Agricultural Systems Competitiveness and Sustainability at research locations in several States. In most instances, these projects address complete cropping systems relevant to various production areas across the country. For example, many research findings in sustainable potato production systems in Washington and Oregon benefit producers in the 

northeast. Although the research in those locations is by necessity conducted on 

local crops and soils, the principles that are developed are beneficial in a broad 

range of crops, soils, and climates. 
82 

QUESTIONS SUBMITTED BY SENATOR JERRY MORAN

COMPETITIVE FOOD RULE

Question. Changes to the National School Lunch and Breakfast Programs have 

imposed new challenges and costs on schools in Kansas and across the country. 

While I am glad the implementation cost of the final meal pattern rule is lower than 

what was initially proposed, I am concerned about what the cost may be of the competitive foods rule USDA is currently working on. What assurances can you give me 

and school nutritionists in Kansas who are already having difficulty planning 

menus for next year that the forthcoming rule on competitive foods will not impose 

costs and compliance hurdles similar to those that were proposed in the initial meal 

pattern rule? 

Answer. As you are aware, the Healthy, Hunger-Free Kids Act (HHFKA) requires 

that the USDA develop nutrition standards for foods sold in schools outside the National School Lunch Program (NSLP) and the School Breakfast Program (SBP). It 

also requires they be consistent with the most recent Dietary Guidelines for Americans and take a number of important issues into consideration, including the practical application of the nutrition standards in schools. A proposed rule to establish 

such standards is currently under development. 

We are aware that school districts have concerns regarding the potential financial 

and logistical impacts associated with the implementation of these standards and 

have received extensive input from a variety of stakeholders on how to best address 

those concerns. As we continue our work to develop the proposed rule, a great deal 

of time has been spent analyzing current scientific information and school practices 

as well as voluntary standards for food sold outside of the NSLP and SBP that have 

been recommended by a number of nongovernmental organizations. We have also 

considered the costs associated with implementation of such standards for all foods 

sold to students in school. I am committed to ensuring that any such standards are 

practical and accompanied by extensive guidance and assistance for our school partners as implementation moves forward. In addition, I understand the need to aim 

for consistency with the NSLP meal pattern regulation in areas in which the regulations may overlap, particularly as a means to ensure the regulations do not place 

undue burden or complexity on school staff who operate food service under both 

standards. We look forward to receiving public comments once the proposal is published and want to assure you that such comments will be most carefully considered 

as we develop the final rule. 

Question. Last year, in the Consolidated and Further Continuing Appropriations 

Act (Public Law 112–55), Congress expressed concern about sodium reduction targets specified in the proposed meal pattern rule. Is the Department taking these 

concerns about aggressive sodium reduction targets into account as it finalizes its 

proposed rule for competitive foods? 

Answer. We understand the complexity of balancing ambitious approaches to improving the food intake of children with the needs of program operators and look 

forward to receiving public comments once the competitive foods proposal is published. I want to assure you that such comments will be carefully considered as we 

develop the final rule. We continue to be committed to ensuring a careful review 

of current science and technologies before implementing the ambitious, but important, sodium reduction targets included in the school meal patterns final rule and 

will apply these considerations to our work on competitive foods. 

QUESTIONS SUBMITTED BY SENATOR TIM JOHNSON

OFFICE CLOSURES

Question. Let me first thank you for your February 13, 2012, response to the letter I sent with Senator Thune and Representative Noem concerning your January 

9, 2012, announcement to close 259 USDA offices, facilities, and laboratories across 

the country, including four FSA offices in my home State of South Dakota. At the 

same time, I was disappointed that several of our questions were not addressed in 

your response. I recognize, as you have stated publicly multiple times, that the Department has been faced with difficult choices given reduced budgets, and that you 

faced a choice of either closing offices or instituting furloughs. The situation in 

which you find yourself is certainly unfortunate; the rush to cut Federal spending 

by some in Congress without regard for the impact has begun to show the consequences. 

Recognizing these difficult circumstances, I would like to get a better idea of how 

you identified offices for closure. The 2008 farm bill directed you to use a specific 
83 

set of criteria. Specifically, my constituents would appreciate a better understanding 

of why the Department utilized ‘‘as the crow flies’’ rather than driving miles for determining the mileage between offices; this has been of significant concern for my 

constituents, because in multiple cases, the distance between offices in question is 

actually greater than 20 miles. As we stated in our letter, the Department utilizes 

miles driven when determining mileage for official Government travel with motor 

vehicles; particularly given the unique geographical characteristics of some of the 

affected offices, why did the Department utilize the ‘‘as the crow flies’’ standard? 

Answer. USDA selected Euclidian miles because it represents a precise distance 

between two points which is not subject to interpretation. 

Question. Additionally, some of the offices slated for closure, though minimally 

staffed at the time the decisions were made, have still had a significant workload. 

As we stated in our letter, using the actual number of employees in the office at 

any given time is an unreliable and inconsistent staffing measure as this number 

can vary greatly due to retirements and transfers. Why did the Department use the 

actual number of employees for determining whether county offices met this statutory guideline? 

Answer. USDA used the number of staff currently employed in each office in order 

to strictly adhere to the criteria laid out in the 2008 farm bill. 

HOUSE BUDGET RESOLUTION

Question. Can you outline what the impact will be of the budget resolution recently passed in the House of Representatives, if enacted on your ability to operate 

in the future, and in particular, the degree to which you may need to consider additional office closures? 

Answer. The President’s budget request was fiscally responsible and included reductions in many discretionary programs. For any further reductions beyond the 

President’s budget we would need to further review our priorities and make appropriate adjustments. 

COUNTRY OF ORIGIN LABELING

Question. Thank you for your continued efforts in defending our country-of-origin 

labeling (COOL) program. As you know, I’ve worked on this issue for many years, 

and I am pleased that USDA, under your leadership, has finally implemented the 

program. Additionally, I am very pleased that the administration will be appealing 

the World Trade Organization Dispute Settlement Panel’s decision concerning our 

COOL program. Can you provide a general timeframe for the appeals process moving forward and the role that USDA will play in the process? 

Answer. The parties to the dispute have already filed all their submissions in the 

appeal. The WTO Appellate Body will hold the hearing in this appeal on May 2– 

3, 2012. A final decision is expected sometime during the summer of 2012. USDA’s 

COOL team of regulators, economists, trade policy experts and lawyers has been 

working closely with United States Trade Representative’s litigation team throughout this dispute, both at the Panel stage and at the appellate stage. 

SUN GRANT INITIATIVE

Question. As you know, the Sun Grant Initiative is an important university research and education program that addresses national priorities to develop bioenergy and bioproducts at regional and local levels. The initiative broadens the role 

of land-grant universities to conduct research and educational programs that emphasize renewable energy systems based on agriculture and renewable resources. 

Particularly given the administration’s emphasis on the importance of the development of renewable energy, why does the administration’s budget propose zero funding for this nationally authorized program? 

Answer. A decrease is proposed so funding can be redirected to support higher priority activities, and is consistent with the administration’s policy to redirect available resources, as appropriate, and consistent with the agency mission, from lower 

priority areas to other science and technology activities. Alternative funding from 

the Agriculture and Food Research Initiative and/or formula funding may be used 

to support aspects of the program deemed to be of priority at State and/or local levels. For example, the 2013 budget proposes reallocating funding within AFRI towards bio-based energy technologies, increasing funding towards this initiative by 

$30 million. 
84 

QUESTIONS SUBMITTED BY SENATOR MARK L. PRYOR

AGRICULTURAL RESEARCH SERVICE FISCAL YEAR 2012 FUNDING

Question. It’s my understanding that USDA’s fiscal year 2012 budget request for 

Agricultural Research Service (ARS) underestimated the funding needed to close the 

12 ARS laboratories that were proposed for closure in fiscal year 2012. As a result 

I see that ARS has taken action to find the needed $38 million elsewhere in the 

budget. I note three things happened to make up this shortfall: 

—All ARS programs were cut an estimated 0.7 percent; 

—ARS has frozen all vacancies; and 

—ARS has proposed to reduce all extramural activities by 30 percent. 

Do these three rounds of cuts fully make up for the budgeting error? 

Answer. I do not believe this was a budgeting error. ARS’ fiscal year 2012 enacted 

level was $43 million below what was proposed in the fiscal year 2012 President’s 

budget and $38 million below the fiscal year 2011 enacted. This permanent reduction eliminated ARS’ ability to offset the costs of the closures with program funds 

associated with each of the 12 laboratories. The one-time costs associated with the 

relocation or separation of affected personnel and the disposal of property are estimated at $39 million in fiscal year 2012. These one-time costs are being financed 

by temporary reductions to remaining ARS research programs. The resources accumulated from the temporary assessments will cover the one-time costs in fiscal year 

2012. 

Question. Why do these cuts, to make up for an ARS budgetary mistake, target 

extramural activities? 

Answer. I do not believe this was a budgetary mistake. The permanent reduction 

of $38 million from fiscal year 2011 levels required that all ARS research, not just 

sponsored extramural research, needed to be reduced to pay for the closures. USDA 

sought to balance the impact on intramural and extramural programs through an 

across-the-board reduction of intramural research, a hiring freeze, and extramural 

funding reduction. Together, these actions will finance the one-time costs to ARS for 

the facility closures without closing other ARS research projects and let ARS partners continue ARS extramural research with 70 percent of the funding. USDA will 

also continue to support high-priority extramural research through other USDA 

agencies, such as the National Institute of Food and Agriculture (NIFA). 

Question. Why is the cut not across the board like the earlier 0.7-percent acrossthe-board cut and the freeze on all ARS vacancies? 

Answer. The approach to financing the one-time costs seeks to minimize the impact to USDA personnel. Additional temporary reductions to in-house research supported by ARS personnel would potentially impact additional ARS employees and 

require significant reductions in ARS intramural research. 

Question. Was there a measured approach used to evaluate productivity or performance? 

Answer. To fund the one-time costs associated with closing the 12 laboratories, 

all of ARS research was reduced through an across-the-board reduction of intramural research, a hiring freeze, and an extramural funding reduction. This balanced 

approach to reductions did not evaluate productivity or performance. 

Question. Who made this decision to cut extramural facilities on their expected 

fiscal year 2012 funds to cover the closure costs? 

Answer. I made the decision to assess the funding for extramural-supported research, as well as ongoing in-house programs, based on recommendations from ARS 

and other staff. 

Question. Is there an appeal process? 

Answer. USDA has not established a process to appeal the temporary reductions 

necessary to finance the one-time costs associated with closing the 12 laboratories. 

Question. What other sources of funding were under discussion to help cover the 

unit closure budget shortfall? 

Answer. The Department’s ability to finance the one-time costs is limited to the 

resources appropriated to conduct the agency’s research programs. All funds appropriated to ARS are used to support the salaries of ARS personnel and other necessary expenses to conduct research, including cooperative agreements with our extramural research partners that contribute to specific ARS program objectives. Since 

2010, the ARS Salaries and Expenses budget has been reduced by over 7 percent, 

while the need to invest in research continues to grow. Shared sacrifice has to be 

made given limited resources. 
85 

DALE BUMPERS SMALL FARMS RESEARCH CENTER

Question. The fiscal year 2013 budget request includes a proposal to effectively 

close the Dale Bumpers Small Farms Research Center in Booneville, Arkansas, by 

redirecting all its funding elsewhere. I obviously do not support this proposal. In 

light of the closure of Brooksville, Florida, in 2011, and the expected closures of 

Watkinsville, Georgia, and Beaver, West Virginia, by June 1, 2012, where will ARS 

conduct grazing research for the benefit of the eastern United States if it closes 

Booneville, too? 

Answer. Grazing research for the Eastern United States is conducted at ARS locations in University Park, Pennsylvania (Pasture Systems and Watershed Management Research Unit); Lexington, Kentucky (Forage Animal Production Research 

Unit); Madison, Wisconsin (U.S. Dairy Forage Research Center); Morris, Minnesota 

(North Central Soil Conservation Research Laboratory); Mandan, North Dakota 

(North Great Plains Research Laboratory); Tifton, Georgia (Southeast Watershed 

Research Unit); and El Reno, Oklahoma (Grazinglands Research Laboratory). The 

research at these units is done in cooperation with university and industry partners. 

Question. Booneville is the home of unique long-term water quality research including a 20-year grazing study that began in 2003 using 15 small watersheds in 

Booneville, and a 10-year study on the effects of poultry litter application method 

on nutrient runoff to watersheds. Both of these studies promise answers to critical 

issues plaguing the entire region. What are your plans to continue this highly valuable research if Booneville is abandoned? 

Answer. ARS maintains a nationwide network of research watersheds at 22 locations. Similar research is being conducted in watersheds at University Park, Pennsylvania; Beltsville, Maryland; Florence, South Carolina; Madison, Wisconsin; 

Tifton, Georgia; Fayetteville, Arkansas; Bushland, Texas; St. Paul, Minnesota; Mississippi State, Mississippi; Bowling Green; Kentucky; and Clay Center, Nebraska. 

The research is addressing animal production systems for cattle beef and dairy, 

swine, and poultry. The mitigation of poultry litter impacts is specifically addressed 

by research at University Park, Fayetteville, Mississippi State, and Tifton. 

Question. Additionally, Booneville is home to the only dedicated ARS sheep and 

goat research program. Sheep and goats are an ideal enterprise for small farms for 

the production of meat, wool, or milk, and there is an exploding demand for these 

products in the United States. What are your plans for conducting research in this 

area if you abandon Booneville? 

Answer. In addition to Booneville, ARS conducts research in sheep production at 

other locations—Clay Center, Nebraska (U.S. Meat Animal Research Center); 

Dubois, Idaho (U.S. Sheep Experiment Station); and El Reno, Oklahoma 

(Grazinglands Research Laboratory). Research at these locations is focused on the 

development of genetic resources for the sheep industry including an ‘‘easy care’’ genetic composite for small flock producers in the Midwestern and Eastern United 

States, and maternal and terminal lines adapted for large Western and Southwestern range flock production systems. This research program is also coordinated 

with the rangeland programs to examine the interaction between sheep and rangeland ecosystem services with specific focus on grazing and fire remediation, invasive 

weeds, and rangeland ecology. Additional research at the Grazinglands Research 

Laboratory is focused on grazing system forage using pastures and winter annual 

forages to reduce production costs and environmental impacts associated with grazing for both small and large animal ruminants. ARS is planning to initiate grazing 

goat research at El Reno in cooperation with the Langston University Goat Research Center. ARS is providing leadership for an international consortium which 

is developing a project to sequence the goat genome. This project is being developed 

by ARS scientists in Beltsville, Maryland, at the Beltsville Agriculture Research 

Center. 

Question. In your fiscal year 2012 budget proposal, this same Center was proposed 

to be one of the sites for a major increase in funding as part of an ARS biofuels 

feedstock initiative. Now this year ARS is apparently targeting for elimination grazing research and research that benefits small producers. I understand the budget 

realities the agency faces, but the on-again, off-again, chaotic nature of selecting 

funding priorities is out of line with the normal activities of a research agency focused on long-term, basic research. Can you explain the rationale behind the 

changes in ARS priorities from year-to-year? 

Answer. A portion of a President’s budget request for $10 million in 2010, and 

$6 million in 2011 to the USDA Regional Biomass Research Centers was designated 

for Booneville, but these funds were not appropriated. The Booneville location now 

has only three scientist positions. Because of the loss of critical mass of scientists, 

and adequate funding to support priority biomass research at Booneville, small ru-
86 

minant research will be addressed at other ARS locations including applications to 

small scale producers for goats at El Reno, Oklahoma, and coordination of regional 

biomass research at Temple, Texas. 

DELTA OBESITY PREVENTION UNIT

Question. USDA’s fiscal year 2013 budget request proposes to eliminate funding 

for the Delta Obesity Prevention Research Unit in Little Rock, Arkansas. I am opposed to this proposed elimination. In previous years, ARS has proposed changing 

priorities for the Delta Obesity Prevention Research Unit. It was suggested by ARS 

that funding redirected from this unit would be used at AR Children’s Nutrition 

Center, Tufts, and Houston to augment basic nutrition research that could be targeted to the Delta region. What happened to that proposal? This year’s budget proposal simply proposes to terminate this funding and redirect ‘‘to more critical 

needs.’’ 

Answer. The President’s budget for fiscal year 2012 proposed redirection of funds 

from the Delta Obesity Prevention Research Unit (DOPRU) to a study that would 

evaluate factors affecting adherence to the Dietary Guidelines for Americans. The 

funds for that study were to be reallocated to Beltsville, Maryland, but all six of 

the ARS Human Nutrition Research Centers were to participate in the research and 

would have received a share of those funds distributed from Beltsville. This proposed reallocation was never implemented since Congress, in the 2012 conference 

report, directed that the funds continue to support DOPRU. The proposed closure 

of DOPRU is part of the ARS proposed termination of several predominantly extramural research projects. 

CATFISH INSPECTION

Question. With passage of the Food, Conservation and Energy Act of 2008 Congress shifted inspection and regulation of catfish from the Food and Drug Administration (FDA) to the United States Department of Agriculture (USDA) Food Safety 

and Inspection Service (FSIS). Since that time, USDA has undertaken a thorough 

process to implement this new responsibility, including issuing a proposed rule and 

completing the comment period on June 24, 2011. It has been almost 4 years since 

this responsibility was given to USDA–FSIS. When will the final rule be implemented? 

Answer. Because there are many factors that influence rulemaking, it is difficult 

to estimate when the final rule is published, but FSIS will do so as soon as possible. 

Question. What are the challenges with completing this rule? 

Answer. As you know, the law provided that USDA define ‘‘catfish,’’ which is not 

as simple as it may seem. In the taxonomy of fish, Siluriformes (the common name 

of which is ‘‘catfish’’) consist of 36 different families, among which are Ictaluridae 

(North American channel and blue catfish) and Pangasiidae (which are common to 

Asia). While some Siluriformes imported from Asia include those in the family 

Ictaluridae, much of the product is in the family Pangasiidae. Thus, there is a great 

deal of controversy surrounding the question of whether ‘‘catfish’’ should be defined 

narrowly or broadly. 

Question. Will you commit to issuing this final rule this year? 

Answer. FSIS will publish a final rule as soon as possible. 

FARM SERVICE AGENCY OFFICE CLOSURES

Question. Do you foresee any need to take further action beyond the ‘‘Blueprint 

for Stronger Service’’ initiative to further reduce the number of Farm Service Agency (FSA) county offices? 

Answer. There is currently no plan or proposal to close more than the 131 FSA 

county offices identified on January 9, 2012. 

Over the last 2 years, FSA’s salaries and expenses appropriation has been reduced 

by more than 5 percent. These reductions have necessitated significant reductions 

in administrative spending, a reduction in permanent staffing by 12.5 percent, and 

the proposed consolidation of 131 offices in 32 States. These actions were designed 

to bring the Agency’s operating budget in line with the current and expected future 

funding levels. USDA will continue to do its best to serve America’s farmers and 

ranchers within the funding level set by Congress. 

Question. How could the process used to consider USDA field office consolidations 

be improved to involve stakeholders in the process before these proposals are officially announced? 

Answer. USDA adheres to congressional notification requirements in the annual 

appropriations acts. For FSA, additional guidelines are laid out in the 2008 farm 

bill. 
87 

The proposal to close 131 FSA county offices remains the Agency’s only proposal 

to close FSA offices. This proposal was announced on January 9, 2012. Over the following month, FSA held public meetings in each affected county and notified Congress of the proposed office closures on February 27, 2012. The public meetings enabled stakeholders to share their concerns with senior FSA leadership. FSA communicated about the circumstances that led to proposed county office closures—the 

need to manage the Agency under significantly reduced operational spending, 12.5 

percent fewer permanent staff, and an ever-increasing workload, while continuing 

to deliver the best possible service to farmers and ranchers. FSA’s approach to consultation adhered to statutory requirements, and provided a transparent and inclusive means to communicate with affected parties. 

Question. With 2,800 NRCS offices and only 2,100 FSA offices remaining open 

across the country, how is USDA insuring that producers are being adequately serviced in locations without both agencies present? 

Answer. We strongly believe that co-location is a great benefit to producers, and 

we will continue to offer these arrangements wherever possible. However, it is important to note that even before the proposed closures were announced, not all FSA 

offices had an NRCS presence. Further, we do not believe the proposed closures significantly undermine our efforts to co-locate FSA and NRCS offices. 

FSA is modernizing IT and improving its business processes so that farmers will 

be able to do more of their business with FSA without having to visit an office. If 

the proposed consolidations occur, FSA will concentrate staff in its 2,113 remaining 

offices in order to provide consistent service in fully staffed, fully functioning offices. 

If the proposed consolidations take place, producers may choose any county office 

that is convenient for them to conduct their FSA business. 

Question. Recently there has been a lot of emphasis on reorganizing the field office structure of the Farm Service Agency in an attempt to provide better more 

timely service to the producers they serve. Most private businesses do not cut or 

make reductions at the customer level until a complete review of their structure has 

been completed above the field level. As I look at USDA’s Blue Print for Success, 

it appears to me that you have not made any attempts to review FSA’s structure 

above the field level to find needed savings. When does USDA plan on reviewing 

and reorganizing USDA/FSA above the field level? Does USDA have any plans to 

reduce the number of State offices? 

Answer. FSA reviewed its operations at all levels to identify administrative efficiencies that resulted in significant savings. FSA also achieved needed savings by 

reducing staff levels in national, State, and county offices by 12.5 percent. There is 

currently no plan or proposal to close any offices other than the 131 FSA county 

offices identified on January 9, 2012. 

Question. Under USDA’s Blueprint for Success, a number of county offices met the 

criteria of two or fewer permanent full-time employees after VERA (voluntary early 

retirement program) and VSIP (voluntary incentive payment retirement program) 

programs in 2011. Some of these offices have the workload to support four or more 

employees and employed four or more FTEs when calendar year 2011 began. Because of VERA and VSIP, some of these offices were quickly reduced to two FTEs. 

When you looked at the number of employees for each office, did you take into account the previous workload of each office? 

Answer. The VERA and VSIP opportunities were implemented in order to reduce 

staffing necessary to live within current and expected future budget realities. To 

identify FSA offices for consolidation, USDA followed criteria provided by Congress 

in section 14212 of the 2008 farm bill, which required, for any office closures, that 

the Secretary ‘‘first close any offices of the Farm Service Agency that—(a) are located less than 20 miles from another office of the Farm Service Agency; and (b) 

have two or fewer permanent full-time employees.’’ In addition, FSA proposed for 

closure all offices with zero full-time, permanent employees regardless of the distance to another FSA office. 

Question. Office closure language included in the 2008 farm bill called for offices 

located closer than 20 miles apart would be the first offices considered for closure/ 

consolidation. Under USDA’s Blueprint for Success, there are a number of cases 

where the navigable miles between the proposed office to be closed and the proposed 

receiving office is significantly more than 20 miles. You mentioned in a previous letter that USDA used Euclidian miles in order to be more objective. Why was it determined that 20 Euclidian miles were more objective than 20 navigable road miles 

when developing the list of offices proposed to be closed/consolidated? 

Answer. USDA measured using Euclidian miles because Euclidean miles offer no 

advantages to any particular county. Euclidean miles are the most uniform and equitable unit of measurement for distance, regardless of geography or terrain. 
88 

Question. Since 1996, USDA has prided itself in using the Service Center for customers utilizing programs and services provided by any agency in USDA. Repeatedly, USDA has stated the importance of having all USDA agencies in a single location to provide maximum customer service. Knowing 131 of the 259 USDA offices 

being proposed for closure are FSA county offices, this will certainly cause the Service Center concept to be abandoned in many areas. How can USDA maximize customer service while abandoning the Service Center, causing USDA customers to 

visit separate locations to transact business? 

Answer. It is important to note that even before the proposed closures were announced, not all FSA offices were Service Center locations. Further, we do not believe the proposed closures undermine the Service Center concept. However, we 

strongly believe the Service Center concept is a great benefit to producers, and we 

will continue to offer these arrangements wherever possible. We understand the 

concerns of producers who will have to travel to another location to conduct business 

with FSA once consolidations take effect. However, over the past 3 years, FSA has 

had to make tough decisions to be able to continue to operate within significantly 

reduced budgets. 

FSA is modernizing IT and improving its business processes so that farmers will 

be able to do more of their business with FSA without having to visit an FSA office. 

FSA will concentrate staff in its remaining offices in order to provide consistent 

service in fully staffed, fully functioning offices. Producers affected by an office closure will be able to choose any county office that is convenient for them to conduct 

their FSA business. 

SUBCOMMITTEE RECESS

Senator KOHL. And this hearing is recessed. 

[Whereupon, at 3:53 p.m., Thursday, March 29, the subcommittee was recessed, to reconvene subject to the call of the 

Chair.] 
(89) 

AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

FISCAL YEAR 2013 

THURSDAY, APRIL 19, 2012 

U.S. SENATE, 

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

The subcommittee met at 1:58 p.m., in room SD–124, Dirksen 

Senate Office Building, Hon. Herb Kohl (chairman) presiding. 

Present: Senators Kohl, Pryor, Brown, Blunt, Collins, Moran, and 

Hoeven. 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

FOOD AND DRUG ADMINISTRATION

STATEMENT OF DR. MARGARET HAMBURG, COMMISSIONER 

ACCOMPANIED BY: 

PATRICK McGAREY, ASSISTANT COMMISSIONER, OFFICE OF BUDGET, FOOD AND DRUG ADMINISTRATION 

NORRIS COCHRAN, DEPUTY ASSISTANT SECRETARY, OFFICE OF 

BUDGET, DEPARTMENT OF HEALTH AND HUMAN SERVICES 

OPENING STATEMENT OF SENATOR HERB KOHL

Senator KOHL. Good afternoon. The subcommittee will come to 

order. 

Today’s hearing will focus on the Food and Drug Administration’s (FDA’s) fiscal year 2013 budget request. We welcome Commissioner Hamburg, Mr. McGarey, and Mr. Cochran. We appreciate your being here. 

Before we begin, I’d like everyone to know that we have votes 

scheduled for 2:15 p.m. today. So right now we’ll plan on just having opening statements by myself, Senator Blunt, as well as Commissioner Hamburg. Once the votes are called, we’ll have to stand 

in recess until the votes are through, and we’ll come back then and 

begin our questions. So we thank everybody for accommodating 

that. 

The administration’s budget request for fiscal year 2013 stands 

in stark contrast to the requests of recent years. Since 2008, the 

Congress has provided the FDA with budget increases totaling 

nearly 30 percent and the administration’s requests have even been 

higher. This year, however, the FDA budget proposes an increase 
90 

of only $15 million, bringing total funding to approximately $2.51 

billion. 

Two main funding increases requested in this budget are $10 

million to enhance inspections of drugs and drug ingredients manufactured in China, and to work with Chinese manufacturers on 

ways to meet FDA standards; and $18 million to complete the 

FDA’s Life Sciences-Biodefense Laboratory complex. These increases are partially offset by decreases found elsewhere in FDA’s 

budget. 

As we are all aware, this subcommittee has worked over the past 

several years to provide FDA with increased funding for food safety 

activities. This year the only additional funds for food safety are requested in the form of a new user fee. My understanding is that 

negotiations on this user fee are in their earliest stages, and it is 

not likely to be passed this year. This means essentially that food 

safety activities are flat-funded in this budget, when we all know 

that the FDA’s workload in this area has certainly not leveled off. 

That concerns us. I look forward to discussing this further. 

I don’t believe that this budget request reflects less support for 

FDA by the administration, but I do believe it reflects the budget 

realities that we continue to face. The FDA has been exempt from 

significant cuts found elsewhere throughout the Government. This 

will certainly prove to be the most difficult year in recent history. 

The importance of FDA’s work has not diminished, and the agency’s workload continues to increase. I have said in the past that I 

believe ensuring the safety of our food and drug supply is an important Federal function and should not and cannot be relegated 

to State and local governments as well as private industry. 

As these functions continue to become more and more complex 

every day, we will do our best to provide FDA with the funding you 

need to do your job well, with the understanding that we are all 

being required to do more with less. 

We look forward to your testimony, Dr. Hamburg. But first, Senator Blunt. 

STATEMENT OF SENATOR ROY BLUNT

Senator BLUNT. Thank you, Mr. Chairman. Thank you for holding today’s hearing on the FDA budget. I want to thank our witnesses for being here today. I look forward to working with the 

subcommittee, but particularly to working with the chairman, who 

has had such a good impact on FDA issues over his time on this 

subcommittee. 

Commissioner Hamburg, thanks for your visit the other day. The 

agency you head regulates approximately 20 cents out of every $1 

spent in America and Americans expect the FDA-related products 

will be safe and effective. Similarly, the industry expects transparency and certainty from the FDA. 

The agency has authority over 185,000 domestic establishments 

that range from food processing plants to facilities that manufacture life-saving medications. As companies struggle through the recession, FDA must be mindful that burdensome regulations can stifle innovation and lead to unnecessary expenses that limit small 

businesses’ ability to create jobs. 
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For example, FDA’s currently reviewing comments on a proposed 

rule that would require restaurants to list calorie content for standard menu items and of course very specifically defining standard 

menu items so you could know what that standard was. I believe 

the proposed rule that you’ve asked for comment on and haven’t finalized is at this point still unnecessarily broad and too inflexible, 

but hopefully the final rule will benefit from the comments you’re 

receiving. 

When implementing the rule, you should adopt the least burdensome alternatives that meet your responsibility, and doesn’t unnecessarily regulate stores that don’t sell food as their primary business or other things that wouldn’t be necessary under the act. In 

addition, the rule should be flexible enough to allow locations that 

don’t serve their patrons on site the opportunity to provide nutrition information in a variety of formats. 

I look forward to being able to discuss this issue a little further. 

I’d also like to take a moment to mention that this very well may 

be the last hearing of the subcommittee this year. Chairman Kohl 

has announced that he’ll leave the Senate soon, I suppose maybe 

to focus on basketball full-time or one of his other many activities 

that he’s involved in. But this may be his final hearing as chairman. We’re going to continue to work closely together to produce 

a bill. 

I’d like to say that in leading this subcommittee he’s really displayed keen knowledge of all the work of the subcommittee and— 

as you know, Commissioner—has shown particular interest and 

has been a real leader on FDA issues, particularly on food safety, 

and really, it’s been an honor for me to get to work with him last 

year. I hope we produce a bill this year that we can get to the floor 

again, and we’ll both be out there doing what we can to make this 

subcommittee work under the chairman’s leadership. 

Thank you, Mr. Chairman. 

Senator KOHL. Thank you. Thank you, Senator Blunt. 

Now, Dr. Hamburg. 

STATEMENT OF DR. MARGARET HAMBURG

Dr. HAMBURG. Thank you, Chairman Kohl and Ranking Member 

Blunt. I do also want to take this opportunity to thank you, Chairman Kohl, for the extraordinary leadership that you’ve shown over 

so many years and the support you’ve given the FDA in our important mission. 

I am joined, as you note, by Patrick McGarey, who is our Assistant Commissioner for Budget, and Norris Cochran, who’s Deputy 

Assistant Secretary for Budget at the Department of Health and 

Human Services (HHS). 

Let me begin by again thanking you and the subcommittee for 

your efforts in recent years to really try to shrink the gap between 

the agency’s budget and its vast and evolving responsibilities. Your 

leadership has put us on a path towards more appropriate funding 

levels to support our unique and crucial mission. We are using 

these funds responsibly to reinforce our core functions and to obtain the most public health value for the Federal dollar during 

these challenging fiscal times. We’re deploying smarter and more 

flexible regulatory approaches and better targeting of our 
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inspectional resources. We’ve consolidated our information technology (IT) infrastructure into modern data centers and expanded 

our efforts to leverage both financial and human capital through 

collaborations with public and private partners. 

DRUG APPROVALS

With your support, we have produced concrete results that really 

matter. For example, we lead the world in the number and speed 

of drug approvals, while maintaining high standards for safety and 

efficacy. Last year we approved 35 innovative new drugs, many of 

them groundbreaking, the second highest number of approvals in 

more than a decade. 

During this fiscal year, we’ve continued our strong performance 

and have already approved 15 innovative new drugs and biologics. 

Last year a total of 195 drug shortages were prevented through 

proactive collaboration with patients, healthcare providers, and 

manufacturers, and by exercising regulatory flexibility. This year 

we’ve already prevented another 30 drug shortages. 

FOOD SAFETY MODERNIZATION ACT

Just 1 year after the enactment of the Food Safety Modernization 

Act, we’ve issued guidances and interim final rules and are on the 

way to meeting the 5-year inspection mandate for high-risk domestic facilities. 

I think it is critical to note, though, that the volume and complexity of the products we regulate and the complexity of the supply chains by which they reach American consumers has increased 

dramatically. We receive thousands of medical product submissions 

each year and serve as the watchdog for the safety of tens of thousands of products that are already in the marketplace, and we 

oversee the safety of roughly 80 percent of the Nation’s food supply. 

Imports of food products alone come from some 200 different countries and from more than 250,000 foreign facilities each year. 

GLOBALIZATION

In addition, our core responsibilities are expanding to include additional product areas, such as tobacco, and evolving to accommodate scientific and technological advances and the challenges of 

globalization. Our budget request reflects these complexities and 

new demands, although, as you note, it is modest. 

FISCAL YEAR 2013 BUDGET

The fiscal year 2013 budget recommends $4.5 billion for FDA 

overall, a 17-percent increase from fiscal year 2012. User fees account for 98 percent of the increase, however. We’re proposing cuts 

or savings in two areas, IT and related systems and building and 

facilities. FDA is also absorbing more than 80 percent of inflationary rent costs. 

Our fiscal year 2013 budget authority increases will support import safety, medical countermeasures, White Oak facilities, the 

commissioned corps pay raise, and about 20 percent of our rent increase. 
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BUDGET REQUEST

To strengthen the safety of foods and drugs from China, FDA is 

requesting $10 million. Exports from China are experiencing unprecedented growth. In the last 5 years alone, shipments of FDAregulated products from China increased by 62 percent. So that 

represents a fundamental shift of our economic and security landscape. These additional resources will strengthen our capacity to 

inspect Chinese facilities and our ability to work with our colleagues in China and our ability to perform risk analysis on Chinese exports. 

MEDICAL COUNTERMEASURES

Thanks to this subcommittee, FDA received a fiscal year 2012 

appropriation of $20 million for medical countermeasures. The fiscal year 2013 budget recommends an additional $3.5 million to support development and review of new diagnostics, medical treatments, vaccines, and other technologies against a range of naturally occurring or deliberate chemical, biological, radiological, or 

nuclear threats, and new funding will help support initiatives focused on acute radiation syndrome, the needs of children and pregnant women, in vitro diagnostic tests, and building flexible medical 

countermeasure manufacturing capacity, and allow us to continue 

other ongoing efforts. 

LIFE SCIENCES-BIODEFENSE LABORATORY

The President’s budget also proposes an increase of $17.7 million 

to outfit the new Life Sciences-Biodefense Laboratory and ensure 

that all of the biosafety systems are operational before we occupy 

and can use the laboratory. 

USER FEES

User fees clearly represent a substantial part of our fiscal year 

2013 budget and I want to address that briefly. The current user 

fee programs for drugs and medical devices expires, as you no 

doubt know, on September 30 of this year. The reauthorization 

process is now well under way and new user fee programs for generic drugs and biosimilars have also been put forward. 

FOOD SAFETY MODERNIZATION ACT

But to implement the Food Safety Modernization Act and reduce 

the burden of food-borne illness on consumers and American food 

producers, a new food facility registration fee that would generate 

$220 million has been proposed. Additional proposals include new 

user fees to support the cosmetic and food contact substance programs, to compensate FDA for medical product reinspections, and 

support import operations at courier hubs. 

PREPARED STATEMENT

So, to conclude, let me emphasize that the resources in this 

budget are vital to our efforts to ensure timely access to innovative 

products, as well as our commitment to protecting the public from 

unsafe food and ensuring safe, effective medical products. 
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I appreciate your time and attention and will be happy to answer 

any questions you may have after you come back from your vote. 

[The statement follows:] 

PREPARED STATEMENT OF DR. MARGARET HAMBURG

Chairman Kohl, Senator Blunt and members of the subcommittee, I am Dr. Margaret Hamburg, Commissioner of the U.S. Food and Drug Administration. I am 

pleased to present the President’s fiscal year 2013 budget request for the Food and 

Drug Administration (FDA). 

I want to begin by thanking you for your efforts over the past few years to shrink 

the gap between the FDA’s budget and its vast and evolving responsibilities. We 

have made every effort to spend those funds responsibly—to reinforce core functions 

and obtain the most public health value for the dollar. 

As a science-based regulatory agency of global scope, FDA’s mission is both exciting and daunting. Our core responsibilities are evolving and expanding to include 

additional product areas such as tobacco, to accommodate scientific and technological advances, and to step up to the global leadership role that FDA must play 

if we are to promote innovation and protect American consumers. 

Our recent spending and new budget requests reflect this evolution. We are embracing these changes in several important ways—by deploying smarter and more 

flexible regulatory approaches, by identifying efficiencies and innovative approaches 

to deliver our core mission, improve outcomes, and better target our resources, and 

by using collaborations to leverage expertise, data, and experience. Through these 

approaches, we are already improving efficiency and achieving concrete results. 

While the challenges loom large, we are confident that we have identified investments and approaches that will allow us to continue this evolution and to protect 

and promote the public health. 

FDA INVESTMENTS AND RESULTS

With the funding you have provided, FDA has delivered significant and quantifiable benefits for the American people, and we are very proud of these achievements. 

In the area of drugs, FDA now has the highest first action approval rate for new 

drugs we have ever achieved, and we continue to look for ways to improve the predictability, consistency, and transparency of our drug review process. During fiscal 

year 2011, we approved 35 innovative drugs, many of them ground-breaking. This 

was the second-highest number of approvals in the past decade. These drugs represented real advances for patients, including breakthroughs in personalized medicine. They include two novel drugs that were developed and approved with diagnostic devices that will allow doctors to target the drug to those patients most likely 

to respond, as well as new drugs to treat important medical conditions. 

To achieve these results and to speed access to the American people, we demonstrated regulatory flexibility, using, for example, accelerated approvals and innovative clinical trial designs. Of note, we lead the world in the number and speed 

of drug approvals. Of the 57 novel drugs approved by both FDA and the European 

Union between 2006 and 2010, 75 percent were approved first in the United States. 

Furthermore, between 2003 and 2010, all 23 cancer drugs approved by FDA and the 

European Union were approved first in the United States by FDA. 

During fiscal year 2012, we continued our strong performance. Since October 1, 

FDA approved 15 innovative drugs and biologics. Of the 15, 11 (or 73 percent) were 

approved in the United States first. Fourteen of these products had Prescription 

Drug User Fee Act (PDUFA) deadlines, and we met the PDUFA deadline for 13 of 

the 14 products (that is, we met the PDUFA deadline 93 percent of the time). Just 

as important, of the 15 innovative drugs and biologics, 12 were approved on the first 

cycle, for an 80-percent first-cycle approval rate. 

Some specific information on individual drug approvals will provide context for 

the importance of these actions. During January 2012, FDA approved a truly breakthrough product in the field of personalized medicine, a drug to treat a rare form 

of cystic fibrosis. Known as ivacaftor and sold under the trade name Kalydeco, this 

drug only works for patients with a certain genetic mutation. But, thanks to advances in personalized medicine, physicians can identify patients with this mutation. This allows doctors to use Kalydeco only for patients where the drug will be 

effective. For patients who respond to this drug, it can keep their lungs clear, help 

them breathe, and make an enormous difference in the quality of their lives. 

The FDA drug review process normally takes about 10 months. But in the case 

of Kalydeco, a drug of great importance for patients in need, this drug was approved 

in less than 4 months. 
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FDA approved another drug in January 2012. Known as vismodegib and sold 

under the trade name Erivedge, it is the first FDA-approved drug for metastatic 

basal cell carcinoma, the most common type of skin cancer. This new drug interferes 

very little with the growth of healthy cells, but works by disrupting the molecular 

pathway in the body that causes cancer cells to grow. Given there were no available 

treatments at the time, FDA took measures to expedite its approval. As a result, 

Erivedge was approved in less than 5 months—or half the time of a typical FDA 

approval. 

We have also been working aggressively to address and prevent drug shortages 

and to implement important Presidential directives. On October 31, 2011, the President issued an Executive order that directed FDA to take action to help further reduce and prevent drug shortages. In 2011, FDA successfully prevented at least 195 

drug shortages. During the first 3 months of 2012, FDA prevented 22 shortages. 

FDA has sent letters to pharmaceutical manufacturers, reminding them of their 

legal obligations to report certain discontinuances to FDA, and urging them to voluntarily notify FDA of all potential disruptions of the prescription drug supply, even 

when not required by law. This has resulted in a significant increase in the number 

of potential shortages reported to FDA, and thus enhanced our ability to take action. In February of this year, we announced a series of steps to increase the supply 

of critically needed cancer drugs that were in short supply, including exercising enforcement discretion for the temporary importation of an alternative drug and approving a new manufacturer on an expedited basis. 

We are also playing our part to address the rising costs of healthcare, by implementing a new approval pathway for biosimilar biological products and a user fee 

program to support review and evaluation of biosimilar products. We are also proposing a new generic drug user fee program that will support faster, more predictable reviews for generic drugs, effectively eliminate the current generic application 

backlog, and help assure quality by providing resources for regular surveillance inspections of manufacturers of generic drugs. 

In the area of medical devices, in 2011, FDA released the Plan of Action for Implementation of 510(k) and Science Recommendations, which contained 25 specific actions that we would take in 2011 to improve the predictability, consistency, and 

transparency of our premarket programs. Seventy-five percent of those actions, plus 

eight additional actions, are already completed or well underway. We issued guidance on FDA’s regulatory expectations for personalized medicine diagnostic devices 

that are developed along with a therapeutic product, to target that therapeutic product to the appropriate population. We launched the Innovation Initiative, which proposed actions that FDA could take to help accelerate and reduce the cost of developing and evaluating innovative medical devices, using science-based principles to 

maintain or improve patient safety. 

In the area of food safety, the most sweeping reform of our food safety laws in 

more than 70 years was signed into law by President Obama on January 4, 2011— 

the FDA Food Safety Modernization Act (FSMA). We issued an interim final rule 

describing the criteria for administrative detention of food when there is reason to 

believe the food is adulterated or misbranded, and we have used this authority several times. We met the 1-year FSMA mandate for inspections of foreign facilities, 

and are well on the way to meeting the 5-year inspection frequency mandate for 

high-risk domestic food facilities. We also issued an updated guidance for the seafood industry on food safety hazards. We anticipate issuing several proposed rules 

called for in FSMA shortly. We post regular progress reports on implementation 

milestones on our Web site. 

In the area of tobacco, we have been working to achieve a number of significant 

public health goals since enactment of the Tobacco Control Act of 2009. These include restricting youth access to cigarettes and smokeless tobacco, encouraging 

youth and adults who use tobacco products to quit, providing accurate information 

on the contents of tobacco products and the consequences of tobacco use to the public, and using regulatory tools to protect kids from initiating tobacco use and to 

begin to reduce the public health burden of tobacco in the United States. 

We also have been aggressively and systematically addressing challenges that affect all products that FDA regulates. In June 2011, FDA issued our ‘‘Pathway to 

Global Product Safety and Quality’’ report, describing the challenges of regulating 

in the globalized world in which FDA now operates, calling for a paradigm shift in 

how we approach our duties in light of such challenges, and describing the concrete 

actions we will take in four areas: 

—Assembling global coalitions of regulators dedicated to building and strengthening the product safety net around the world; 
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—Developing a global data information system and network in which regulators 

worldwide can regularly and proactively share real-time information and resources across markets; 

—Expanding FDA’s capabilities in intelligence gathering and use, with an increased focus on risk analytics and thoroughly modernized IT capabilities; and 

—Effectively allocating FDA resources based on risk, leveraging the combined efforts of Government and industry. 

The essence of this strategy marries creative international coalitions with cuttingedge investigative tools to continue to provide the consistently high level of safety 

and quality assurance the public expects—and deserves. 

MAXIMIZING THE IMPACT OF FDA FUNDS

At this time of fiscal restraint, FDA is focusing on its core responsibilities and 

working to identify opportunities to streamline activities and leverage human and 

financial resources. 

I have instituted a series of reorganizations designed to ensure that FDA better 

reflects its evolving responsibilities, but that also recognizes our responsibility to 

make the most efficient use of our limited resources. Early in my tenure, I appointed a new Deputy Commissioner for Foods, to ensure coordination of our growing and rapidly evolving responsibilities for oversight of the domestic and global 

food supply chain. 

Last year I created the new position of Deputy Commissioner for Global Regulatory Operations and Policy, to fully address the need to integrate domestic and 

foreign inspections, streamline procedures, and seek greater harmonization and opportunities for collaboration with our counterparts in other countries. I also appointed a new Deputy Commissioner for Medical Products and Tobacco, reflecting 

our recognition that the review of medical products increasingly cuts across center 

boundaries and that a new framework was necessary to address challenges like personalized medicine and combination products. Together, these changes build efficiencies into our organizational structure from the ground up and will make it easier to identify new opportunities for streamlining in the years to come. 

We have made significant progress in consolidating our IT infrastructure into 

modern data centers. Simultaneously, we have modernized and standardized our 

hardware and software infrastructure, resulting in savings in power consumption 

and the ability to use FDA equipment and IT support resources more efficiently. 

You will see savings from this consolidation reflected in our proposed budget for fiscal year 2013, as well as additional proposed savings. 

Another key area for improved efficiencies is improved targeting of inspection resources. We have been working hard to ensure that our import inspection programs 

are risk-based, targeting imports at port-of-entry more efficiently. We are redeploying current food inspection resources and pursuing efficiencies to support initial 

implementation of FSMA. 

PREPARING FDA FOR THE CHALLENGES AHEAD

FDA’s mission is challenging, even in the best of times, with scientific advances 

occurring at breakneck speed and the pace of globalization accelerating. Our responsibilities are vast and growing, a trend that will only continue. We receive thousands of medical product submissions each year, and serve as the watchdog for tens 

of thousands of products on the market, ensuring that they continue to meet the 

highest standards. 

We have evolved from a country that once consumed simple, primarily domestically produced goods to one that consumes complex products manufactured in every 

corner of the globe. We enjoy a greater variety of products from a greater range of 

places than ever before. The complexity of the products we regulate and the complexity of the supply chains by which they reach the eventual consumer has only 

increased. All of this means that FDA’s job has gotten more complex and the stakes 

have continued to increase. 

As our fiscal year 2013 budget notes, FDA regulates more than $450 billion of domestic and imported foods. Nearly 40 percent of the drugs Americans take are made 

overseas, and about 80 percent of active pharmaceutical ingredients are imported. 

Food imports have increased nine-fold since 1993. These food imports come from 

more than 250,000 foreign facilities in 200 countries. About 70 percent of seafood 

and about 35 percent of fresh produce consumed in the United States comes from 

foreign countries. 

We are grateful that Congress has begun to help give FDA the tools needed to 

effectively regulate in a modern, complex, globalized environment. We are on the 

right path, but the road is long and challenging. The proposed fiscal year 2013 
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budget, described in more detail below, will continue the forward motion that you 

have supported. 

FDA FISCAL YEAR 2013 BUDGET REQUEST

Fiscal Year 2013 Summary 

The fiscal year 2013 budget recommends $4.5 billion for FDA, a 17-percent increase from fiscal year 2012. The fiscal year 2013 increase for user fees, including 

increases for current law user fees and amounts for seven new user fee programs, 

accounts for 98 percent of the FDA budget increase. 

FDA user fee programs support safety and effectiveness reviews of human and 

animal drugs, biological products, medical devices, and other FDA-regulated products. Fees also allow FDA programs to achieve timely and enhanced premarket review performance. Finally, fees support the programs and operations of the FDA 

Center for Tobacco Products. 

For fiscal year 2013, FDA is proposing savings in two areas—information technology (IT) and the FDA Buildings and Facilities (B&F) account. In addition to 

these budget authority reductions, FDA is also absorbing more than 80 percent of 

the inflationary cost of rent activities. 

After accounting for these savings, the net increase in budget authority is $11.5 

million for fiscal year 2013. Our increases support import safety, medical countermeasures, White Oak laboratory facilities, a portion of the increased cost of our rent 

activities, and the military pay raise that FDA Commissioned Corps officers will receive. 

The Federal investment in FDA is small compared to the breadth of our mission 

and the $2 trillion in products that we regulate. The investment in FDA is also an 

investment in the economic health of two of the largest sectors of America’s economy: The U.S. food industry and the medical products industry. 

FDA Budget Authority 

Fiscal Year 2013 Budget Reductions 

FDA made significant progress in recent years to consolidate our IT infrastructure 

into modern data center facilities. During the consolidation, FDA modernized and 

standardized its hardware and software infrastructure. This effort provides an FDA 

computing environment that reduces our costs and provides agility not previously 

possible. The result is savings in power consumption and more efficient use of FDA 

equipment and resources for IT support. 

Under this fiscal year 2013 initiative, FDA will realize savings that flow from the 

consolidation effort. FDA will generate additional IT savings by streamlining other 

data management activities, reducing redundant IT devices, and reducing other IT 

costs, for a total savings of $19.7 million. Finally, FDA will also save $3.5 million 

by deferring repair and maintenance projects supported by our Building and Facilities account. 

Food and Drug Imports From China 

FDA is requesting a budget authority increase of $10 million to strengthen the 

safety of foods, drug products, and ingredients exported from China to the United 

States. From fiscal year 2007 to 2011, the number of shipments of FDA-regulated 

products from China increased by 62 percent. This represents a fundamental change 

in our economic and security landscape, a change that requires FDA to alter its approach to protecting the health of the American public. To address this change, FDA 

must strengthen its capacity to inspect Chinese facilities that ship products to the 

United States and strengthen its ability to perform risk analysis on FDA-regulated 

products from China. 

The addition of $10 million will strengthen FDA’s ability to protect American consumers and patients in important and fundamental ways. 

—FDA will improve its food and drug inspection and analytical capabilities with 

16 additional inspectors in China, and by adding three United States-based analysts. 

—FDA will broaden the range of its inspections. In addition to inspecting Chinese 

facilities that manufacture food and medical products for export to the United 

States, FDA will inspect sites of clinical trials. 

—FDA will strengthen the understanding of Chinese regulators and the exporting 

industry about U.S. safety standards through targeted workshops and seminars. 

This process will foster a constructive dialogue on improving the safety and 

quality of food and medical products. 

With these resources, FDA will develop more robust knowledge about the complexities of regulatory pathways and supply chains within an increasingly globalized 
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environment. This understanding will allow FDA to make better evidence-based decisions and allocate FDA resources based upon risk. 

FDA Medical Countermeasures Initiative 

The FDA Medical Countermeasures Initiative (MCMi) is designed to help meet 

America’s national security and public health requirements for medical countermeasure (MCM) readiness. MCMs include drugs, vaccines, diagnostics, and other 

medical products needed to respond to chemical, biological, radiological, nuclear 

(CBRN) threats and emerging infectious diseases. Thanks to the efforts of this subcommittee, FDA received an appropriation of $20 

million in fiscal year 2012 to provide a base of funding for FDA’s MCMi. For fiscal 

year 2013, the FDA budget includes an additional $3.5 million for FDA medical 

countermeasures activities. 

With the fiscal year 2012 base funding and the additional fiscal year 2013 resources, FDA will support partnerships with industry, academia, and Government 

partners to improve the development timelines and success rates for MCMs. FDA 

will also expand technical assistance to developers of the highest priority MCMs. 

The top priorities for these MCM funds include FDA action teams to support the 

development of MCMs to address the following MCM needs: 

—Warfighter care for American soldiers exposed to trauma or CBRN threats; 

—Diagnosing and treating the multiple manifestations of acute radiation syndrome; 

—Meeting the special needs of pediatric patients and pregnant women; 

—Developing next generation in vitro diagnostic tests for CBRN threats; and 

—Working closely with HHS to establish flexible manufacturing capacity in the 

United States. 

Since the announcement of the FDA MCMi in August 2010, FDA and its drug, 

device and biologics programs have worked aggressively to ensure that the United 

States has access to high-priority MCMs during a public health emergency. Although less than 2 years old, FDA’s MCMi has an impressive list of accomplishments, made possible by the resources that this subcommittee approved. 

FDA Regulatory Science Facilities 

On August 18, 2010, the General Services Administration (GSA) awarded the construction contract for the new laboratory complex at White Oak, and construction 

is well underway. An fiscal year 2013 increase of $17.7 million will allow FDA to outfit the new Center for Biologics Evaluation and Research (CBER)–Center for Drug Evaluation and 

Research (CDER) Life Sciences-Biodefense Laboratory complex that will support 

FDA’s core regulatory science needs. FDA must make this investment now to ensure 

that all laboratory biosafety hazard systems are operational and the laboratory is 

ready for occupancy during fiscal year 2014. 

Pay and Rent 

The fiscal year 2013 budget also contains $1.5 million to support the military pay increase for Commissioned Corps personnel serving at FDA and $2.0 million to pay 

a portion of the inflationary rent costs for FDA for FDA programs. Funding these 

elements of the fiscal year 2013 budget will help ensure that FDA can retain the 

professional staff to perform our mission of protecting patients and consumers and 

improving public health. 

FDA User Fees 

Prescription Drug User Fees 

In January 2012, the Administration submitted legislation to Congress to reauthorize the Prescription Drug User Fee Act (PDUFA). The proposed legislation recommends $713 million in PDUFA fees for fiscal year 2013. The current law expires 

on September 30, 2012, and FDA is ready to work with Congress to ensure timely 

reauthorization of this vital program. To sustain and build on our record of accomplishments, reauthorization must occur seamlessly, without any gap between the expiration of the old law and the enactment of PDUFA V. The resources in PDUFA 

V will allow FDA to review and approve new and innovative therapies for patients, 

without compromising the FDA’s high standards for demonstrating safety, efficacy, 

and quality of new drugs prior to approval. 

Medical Device User Fees 

For more than a year, FDA met with stakeholders and held discussions with the 

medical device industry in an effort to develop a package of recommendations to reauthorize the Medical Device User Fee Act (MDUFA). On February 17, 2012, FDA 

reached an agreement with representatives from the medical device industry, and 
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published draft recommendations to reauthorize MDUFA on March 15. The agreement would authorize FDA to collect $595 million in user fees over 5 years, an 

amount that is subject to inflation increases. The agreement would also result in 

an fiscal year 2013 MDUFA fee amount is $97.7 million. 

The agreement strikes a careful balance between what industry agreed to pay and 

what FDA can accomplish with the proposed funding. We believe that it will result 

in greater predictability, consistency, and transparency through improvements to 

the review process. 

Key features of the agreement include: 

—Earlier, more transparent and more predictable interactions between FDA and 

applicants, both during the early product development stage as well as during 

the review process; 

—More detailed and objective criteria for determining when a premarket submission is incomplete and should not be accepted for review; 

—More streamlined FDA review goals that will provide better overall performance 

and greater predictability. This includes a commitment to provide feedback to 

an applicant if FDA’s review extends beyond the goal date, so that the parties 

can discuss how to resolve any outstanding issues; 

—Additional resources to support guidance development, reviewer training and 

professional development, and an independent assessment of the premarket review process to identify potential enhancements to efficiency and effectiveness; 

—More detailed quarterly and annual reporting of program performance; and 

—A commitment between FDA and industry to reduce the total average calendar 

time to a decision for premarket approvals (PMAs) and 510k applications. 

New User Fees for Generics and Biosimilars 

In addition to recommending the reauthorization of PDUFA and the Medical Device User Fee and Modernization Act (MDUFMA), the fiscal year 2013 budget recommends new user fee programs to support review and related activities for generic 

drugs and biosimilars. The proposed user fee programs for generic drugs and 

biosimilars are modeled on the successful PDUFA program, but are tailored to reflect the unique challenges and needs associated with regulating generic drugs and 

biosimilars. 

Generic Drug User Fees.—As a result of the Drug Price Competition and Patent 

Term Restoration Act of 1984, commonly known as the Hatch-Waxman Amendments, America’s generic drug industry has been developing, manufacturing, and 

marketing—and FDA has been reviewing and approving—lower cost versions of 

brand-name drugs for more than 25 years. This legislation and the industry it fostered are a true public health success. 

Last year, approximately 78 percent of the more than 3 billion new and refilled 

prescriptions dispensed in the United States were filled with generics, yet those 

drugs accounted for only 25 percent of prescription drug spending. In the last decade alone, generic drugs have provided more than $931 billion in savings to the Nation’s healthcare system. 

The number of generic drug submissions sent annually to FDA has grown rapidly, 

reaching another record high during fiscal year 2011, including nearly 1,000 

ANDAs. The current backlog of pending applications is estimated to be more than 

2,500. The current median time to approval is approximately 31 months, although 

this includes time that the application is with the sponsor to address FDA questions 

about the application. 

The Generic Drug User Fee Act (GDUFA) proposal submitted to Congress in January 2012 will put FDA’s generic drugs program on a firm financial footing and provide $299 million in additional resources to ensure timely access to safe, high-quality, affordable generic drugs. 

Biosimilars User Fees.—A successful FDA biosimilars review program will spark 

the development of a new segment of the biotechnology industry in the United 

States. To advance this opportunity, the fiscal year 2013 budget includes a proposal 

for biosimilar user fees of $20.2 million. 

The proposed biosimilars user fee program will generate fee revenue in the nearterm and enable sponsors to have meetings with FDA early in the process of developing candidates for biosimilar biological products. With these fees, FDA will develop the scientific, regulatory, and policy infrastructure necessary to review biosimilar biological product applications. 

Implementing FSMA—The Fiscal Year 2013 Food Establishment Registration 

Fee 

Food Safety remains a critical program area for FDA. FDA’s fiscal year 2013 proposal for food safety aims to advance the vision of a strong, reliable food safety sys-
100 

tem that Congress enacted in the landmark FDA Food Safety Modernization Act of 

2011 (FSMA). The fiscal year 2013 budget proposal builds on the food safety increases that the subcommittee appropriated for fiscal year 2011 and fiscal year 2012 

and calls for user fee revenue to allow FDA to establish a prevention-focused domestic and import food safety system, consistent with FSMA. 

FSMA set out a vision for a modern food safety system that shifts the focus to 

preventing food safety problems, rather than relying primarily on reacting to problems after they occur. Implementing Congress’ vision for a strengthened food safety 

system represents a dramatic expansion of FDA’s workload. However, the simple 

truth is that FDA cannot meaningfully deliver on these mandates without the funding contained in the fiscal year 2013 budget. 

The fee will support: 

—Establishing new, effective, and comprehensive food safety standards; 

—Establishing a new program for import safety; 

—Increasing the number and efficiency of inspections; 

—Launching an integrated national food safety system with States and localities; 

—Expanding research activities, which will include improved data collection and 

risk analysis; and 

—Improving FDA’s capability to conduct risk-based decisionmaking. 

These fees will allow FDA to reduce the risk of illness associated with food and 

feed and decrease the frequency and severity of food- and feed-borne illness outbreaks. With these fees, FDA can reduce instances of contamination and greatly diminish the burden on American businesses and the U.S. economy due to foodborne 

illness events. Without sufficient and reliable fee revenue, we can expect the unacceptably high human toll of foodborne illness to continue, with the resulting disruptions to the food system and the economic burdens to the food industry that result 

from foodborne illness outbreaks. 

Tobacco Product User Fees 

On June 22, 2009, President Obama signed the Family Smoking Prevention and 

Tobacco Control Act (Tobacco Control Act) into law. Since 2009, the user fees authorized in the statute have allowed FDA’s Center for Tobacco Products (CTP) to 

hire Center leadership and enable those leaders to initiate the scientific, educational, enforcement, and regulatory activities needed to accomplish the public 

health goals of the Tobacco Control Act. By the end of fiscal year 2011, the CTP 

had a staffing level of over 230 FTEs, and the Center anticipates meeting projected 

staffing goals in fiscal year 2013. 

The fiscal year 2013 budget request for the Tobacco Program, including resources 

for CTP, is $505 million, an increase of $28 million above the fiscal year 2012 enacted budget. The amount requested is specifically authorized in the Tobacco Control Act and comprised entirely of tobacco user fees. Fiscal year 2013 priorities include protecting youth from tobacco, encouraging current users to quit, and making 

existing tobacco products less harmful. 

Other New User Fee Proposals 

Cosmetics User Fee.—The proposed cosmetic user fee of $18.7 million will 

strengthen FDA efforts to protect public health by preventing harm to consumers, 

ensuring the safety of cosmetics and removing unsafe cosmetics from the market. 

With this fee revenue, FDA will develop necessary guidance and standards for industry. The fee revenue will also allow FDA to identify research gaps, such as gaps 

related to the safety of novel ingredients used in cosmetics. 

Medical Product Reinspection User Fee.—The FDA Food Safety Modernization 

Act, which Congress enacted in December 2010, authorized fees for reinspections of 

food and feed establishments. FDA is proposing to expand this fee authority to medical product establishments. With this change, medical product establishments will 

pay the full cost of reinspections and associated follow-up work. FDA will impose 

the user fee when FDA reinspects facilities due to a failure to meet Good Manufacturing Practices (GMPs) or other important FDA requirements. The fiscal year 2013 

estimate for medical product reinspection user fees is $14.7 million. 

Food Contact Notification User Fee.—FDA has statutory responsibility for the 

safety of all food contact substances in the United States. The Food Contact Notification (FCN) program supports applications for innovative food contact substances 

that help mitigate microbial food contamination and provide consumers with more 

healthful and safe food choices. The proposed user fees of $4.9 million will support 

FDA efforts to increase the availability of safe food contact substances, to prevent 

unsafe food contact substances from reaching the market and to apply the most 

modern regulatory science to the review of food contact substances. 
101 

International Courier Use Fee.—For fiscal year 2013, FDA is proposing a new International Courier User Fee of $5.6 million. The proposed fee will support activities associated with increased surveillance of FDA-regulated commodities at express 

courier hubs. To address the growing volume of imports entering through international couriers, FDA is proposing to pay the increased cost of its international 

courier activities through user fees. 

CONCLUSION

The resources in this budget will allow FDA to perform its fundamental public 

health responsibilities in new and more efficient ways. Our budget also supports industry efforts to innovate and bring new products to market that will benefit American patients and consumers and strengthen our economy. 

My goal with this proposed fiscal year 2013 budget is to position FDA to seize 

these opportunities. The resources in this budget will allow FDA to perform its core 

public health responsibilities in more efficient ways, to address these and the many 

other challenges at the heart of our mission. This budget also supports industry efforts to innovate and bring new products to market that will benefit American patients and consumers and strengthen our economy. 

Thank you for the opportunity to testify. I am happy to answer your questions. 

Senator KOHL. Thank you, Dr. Hamburg. The vote has been, at 

least for a while, postponed. So we’ll just—— 

Dr. HAMBURG. Oh, okay. 

Senator KOHL [continuing]. Start out with our questions. 

Dr. HAMBURG. Excellent. 

FOOD SAFETY MODERNIZATION ACT

Senator KOHL. Dr. Hamburg, this budget request assumes $220 

million in additional funding that theoretically would be used to 

implement to the Food Safety Modernization Act. However, as you 

said, that funding increase would come in the form of a new user 

fee that has already been rejected by the Congress and that essentially has no chance of being authorized this year. 

So what that really means is that this budget doesn’t include any 

funding increase to implement the Food Safety Modernization Act, 

which is of great concern to many of us. How have you been working with both the Congress and the industry in order to get these 

user fees authorized? 

Dr. HAMBURG. It is extremely important, as you note, to continue 

to implement the Food Safety Modernization Act, which gives us a 

chance to really reorient our whole food safety system towards preventing problems before they occur, rather than addressing them 

after the fact, which will have huge benefits both in terms of 

human health and reducing costs to the healthcare system, to the 

workplace, and to industry. 

We are talking with industry about the importance of this work. 

They understand it. These are difficult, challenging economic 

times, however. We all recognize that. And we are, of course, working with other potential partners as we implement the Food Safety 

Modernization Act. We have made progress. We will continue to 

make progress, but we will have to prioritize in the context of reduced resources, and it will mean that we cannot accomplish all of 

the goals of the Food Safety Modernization Act, and I think it will 

mean that, unfortunately, we will not be able to put in place systems that would prevent disease and economic burdens as well. 

But we hope that, though the process may take more time than 

we would like, we will continue to make progress in terms of the 

implementation of user fees. It’s not inappropriate, I think, when 
102 

you look at the common good, the benefits to industry, as well as 

the benefits to the public, that support for this program be a 

shared responsibility. We’ve seen the benefits of user fees with our 

drug user fees and more recently the device user fees, and I do believe that when you look at the amount of resources available to 

support food safety in this country, we clearly need to do more. 

Senator KOHL. But your budget assumes $220 million necessary 

to discharge your responsibilities, but to be raised in the form of 

user fees which, let’s be honest, isn’t going to happen this year— 

$220 million. How do you propose to even come close to discharging 

your responsibilities without that $220 million? 

Dr. HAMBURG. As I said, we are going to have to make very difficult choices. We are not going to be able to do all the things the 

Congress has asked us to do and that the American people expect 

us to do. We will place our emphasis and our resources on the highest priority issues. We do need to respond to the challenges of 

globalization and start to really ensure that import safety system— 

we will be taking more risk-based approaches so that we’re targeting resources where the greatest need is, where the greatest 

risk is. We’ll be working with States. We’d hoped to have resources 

to actually give to States as we build those partnerships for an integrated food safety system. That will be less possible, but we will 

have to find ways to work with State health and agriculture departments. 

And we will have to work closely with industry and they will 

have to fully step up to the plate as partners. This is going to be 

a very, very challenging budget to implement and it will put very 

difficult choices in front of the Commissioner and her team. 

GENERICS

Senator KOHL. All right. One question on generics, then I’ll turn 

to Senator Blunt. This budget request assumes the collection of 

$299 million in new user fees for approval of new generic drugs. 

Assuming these fees are authorized—and we are more optimistic in 

this case that they will be, as you know—how long will it take to 

eliminate the backlog of generic drug applications that could immediately then be marketed? 

Dr. HAMBURG. This is such an exciting and important opportunity to really move the generics program and its proven benefits 

to the next level. At the present time, we have unacceptable lags 

in the review of generic drugs, and we’re also faced with the increasing challenge that so many of the manufacturers of generic 

drugs or components of generic drugs are overseas and we really 

have to level the playing field in terms of domestic and overseas 

inspections. 

This user fee will enable us to do both. We’ve committed to reducing the review lag, which currently it takes an average of 30 

months to review a generic application. We’re going to bring that 

down to 10 months. We’re committed to doing that in the 5-year 

span of this user fee program. And we also have committed to having equity between domestic and foreign inspections over that same 

time period. 

Senator KOHL. Thank you very much. 

Senator Blunt. 
103 

Senator BLUNT. Thank you, chairman. Commissioner, on the $220 million of additional fees, in that fee 

category what’s produced now in the current fees, and the ones 

that expire at the end of this fiscal year? You have fees that expire 

at the end of this year. What do they produce? 

Dr. HAMBURG. The fees that would expire in September of this 

year are the drug user fees. 

Senator BLUNT. The drug fees. 

Dr. HAMBURG. And the medical device user fees. 

Senator BLUNT. So you have no fees in the food safety issue, 

right? 

Dr. HAMBURG. We don’t have an establishment fee, which is 

what is being recommended in this budget at the current time, no. 

REINSPECTION FEE

Senator BLUNT. What kind of fees do you—— 

Dr. HAMBURG. There’s one very small fee, which I have to turn 

to—reinspection. There’s a reinspection fee in the food safety program. 

Senator BLUNT. And the reinspection fee—— 

Dr. HAMBURG. But it’s a very small amount of money and it’s for 

after there have been problems in a facility and we go back in and 

reinspect to see if they’ve been corrected. 

Senator BLUNT. So with that exception, there are no fees—— 

Dr. HAMBURG. Right. 

Senator BLUNT [continuing]. Now, where you’re proposing the $220 million in fees? 

Dr. HAMBURG. Yes. 

Senator BLUNT. Would that be the same for the cosmetics? Are 

there fees there now? 

Dr. HAMBURG. That’s correct, there is not a cosmetics fee. 

Senator BLUNT. And that’s $18 million? 

Dr. HAMBURG. $18.7 million, I think, yes. 

Senator BLUNT. And what would the potential collection cost of that $18 million be? 

Dr. HAMBURG. I think that the—— 

Senator BLUNT. To put the fee in place and to collect it, however 

you would collect that fee? 

Dr. HAMBURG. Having built a very robust infrastructure to deal 

with user fees in other components of FDA, I think we can move 

very quickly and efficiently to establish the user fee collection 

mechanism. It is important that it is done properly with the right 

safeguards and firewalls. But we do know how to do that now. We 

have 20 years of experience on the drug user fee side. So I think 

the greater challenge is sitting at the table and negotiating to 

achieve those user fee agreements. 

COSMETICS

Senator BLUNT. Do you know what the average fee might be for 

the various categories of cosmetics producers, medium, small, or 

large? Do you have a sense of how this impacts the industry? 

Dr. HAMBURG. I think we would have to sit down and really talk 

about the different strategies for approaching it and what would be 

the most appropriate way to structure the fee system so that there 
104 

would be the greatest benefit to the industry and it would align 

with the kinds of demands on our time and resources. 

Senator BLUNT. So would that mean you haven’t decided yet 

whether it would just apply to a finished product or have a fee during the entire production chain of cosmetics? I assume they get 

things—— 

Dr. HAMBURG. Yes, I think it would very likely be modeled on 

some of the other fees in terms of registration of establishments. 

But it is a different regulatory framework than for drugs. For example, where there’s a pre-approval process with cosmetics, our 

legal regulatory responsibilities have to do with monitoring for 

safety issues and is really not focused on the pre-approval, so it 

wouldn’t follow the exact kind of model of other user fees in existence today. 

CHINA

Senator BLUNT. And the China inspection issue, would that be 

fee-based also, or would you propose some inspections in China? 

Dr. HAMBURG. Yes, the China proposal is really to enable us to 

enhance our inspectional capacity and our presence on the ground 

in China, as well as to enhance our risk-based analytics and our 

strategies for our operations in China. But it would be building on 

existing activities. We’d be expanding our inspectional cadre in 

China by 16 people and correspondingly increasing the numbers of 

inspections in both food and drug. But it would not be part of our 

user fee program. 

Senator BLUNT. So it’s paid for out of regular taxpayer dollars? 

Dr. HAMBURG. Yes. 

Senator BLUNT. So these Chinese companies wouldn’t pay for 

their inspection? 

Dr. HAMBURG. No. 

Senator BLUNT. Obviously, you’d have to agree that their products are going to have to go through this regimen for them to be 

allowed to come into the country? 

Dr. HAMBURG. Right. If we are approving a new drug in this 

country, we need to inspect to make sure that, if it’s being manufactured in another country, that the manufacturing meets our 

standards and requirements. If we are bringing a food product into 

this country, we need to inspect the facility to make sure that it’s 

being made according to good manufacturing practice and meets 

our safety quality standards. 

So it would be to enable us to expand work that is under way 

in China. But you can imagine, based on the huge increase in imports of the FDA-regulated products that I noted, that we are extremely hard-pressed to be able to even begin to do the range of 

inspections that really are important to assuring safety and quality 

to the American people. 

Senator BLUNT. But under your proposal for food or cosmetics, as 

an example, either one, that would still be paid out of your taxpayer-funded budget. That’s not in the fee proposal, the China inspection? 

Dr. HAMBURG. The China inspections are going to be focused on 

food and drug inspections in China, building on a framework that 

already exists. We do have offices now in Shanghai, Beijing, and 
105 

Guangzhou and are doing inspections out of those offices, and also 

working with our counterpart regulatory authorities in China and 

industry that’s based in China, either Chinese industries or United 

States companies, but that are manufacturing in China. So that $10 million will enable us to expand our capacity in ways 

that are very, very crucial. 

Senator BLUNT. I guess the point that I’m trying to get established for myself is that we would still fund that effort on food, for 

instance, like we always have, but we would under your proposal 

have a fee for food inspection for U.S. companies in the United 

States, which I’d be reluctant to do. But we can visit about that 

later. 

Dr. HAMBURG. What we’re trying to do is really create an integrated program that is supported by both budget authority and 

user fees. In negotiating the user fees, we would be very explicit 

about how those user fee dollars would be used as part of this 

broader program. But they would not be siloed programs in terms 

of impact—— 

Senator BLUNT. But the user fees wouldn’t be paid by the foreign 

companies. They’d be paid by U.S. companies, unless the foreign 

companies were producing in the United States? 

Dr. HAMBURG. The user fees would be paid by the establishment 

that was manufacturing a product—— 

Senator BLUNT. In the United States? 

Dr. HAMBURG. No. They could also be if you were manufacturing 

anything that would be FDA-regulated, foreign or domestic. 

Senator BLUNT. So the Chinese company might pay the user fee 

if it was in China? 

Dr. HAMBURG. Yes, yes. 

Senator BLUNT. Okay, okay. That’s the one point. 

Dr. HAMBURG. No, I’m sorry I wasn’t clear. But the $10 million 

we’re asking for now is to enhance our ability to inspect the facilities that are manufacturing goods that are FDA-regulated for export into the United States from China. 

MENU LABELING

Senator BLUNT. Let me ask a couple of questions about probably 

the issue that we’ve gotten the most questions about of anything 

you’re doing this year, which didn’t maybe sound all that hard 

going in, but probably has turned out to be pretty complicated. And 

that’s menu labeling. So if I understand the rule you’ve got out, on 

places where restaurant-type food is not the predominant part of 

the business, this would be certainly grocery stores that might 

have a food area, one of your options is that they wouldn’t be subject to the rule. I think that’s option two under your proposed rule. 

That’s how I understand that, that that is one option you believe 

you have available. 

Dr. HAMBURG. Yes. We put forward some draft proposed rule format for comments that included some of the different strategies 

that could be undertaken. As you note, it has proved very complicated, how you define a restaurant-like establishment and a 

standard menu. And we have gone out to get comment on the different approaches that could be used for defining the universe of 

restaurant-like establishments and what should be labeled and 
106 

how. And we are now in the process of responding to the comments 

that we’ve gotten. We got a lot of comments and they covered the 

waterfront in terms of perspectives on these issues, and we will be 

coming forward with a final rule in the near future. 

Senator BLUNT. As I said in my opening comment, I would certainly be as flexible as you think the law allows you to be here, because there’s lots of difficulty, it seems to me, in implementing this, 

particularly if it’s not the principal thing you do, if it truly is arguably incidental to what you do. And the food options vary so much 

from one of the grocery stores you own to another grocery store you 

may own because of what’s available that day or how the food 

counters are operated. I would encourage that. 

MENU BOARDS

The other two questions that I had that I’d like you to comment 

on at least, one is the drive-through menu board; what do you 

think that might entail? And what about places where—I read 

somewhere in some information I had that Domino’s Pizza, that 90 

percent of the customers never, never come into a location. So for 

90 percent of the customers, they’re not going to see what’s on the 

menu board anyway. Is there some understanding that that’s a different environment? Do you want them to comply in a different 

way or do you want them to doubly comply, something on the Web 

site and something else on a wall that nobody sees? Or what are 

you thinking there? 

Dr. HAMBURG. As I mentioned, we are finalizing the rule that 

will go forward, so I can’t speak to specific details because it’s still 

being discussed and worked through. But in terms of what was sort 

of put forward in the legislation was the recognition that there 

were different types of establishments, but how consumers access 

menus would be the place for communicating the information. 

So if you have a storefront, but that isn’t where consumers come 

in to order their pizza, it wouldn’t make sense to require a menu 

board that no one would ever see. But if there’s a menu that’s on 

the Internet, that would certainly be an appropriate place, or a 

flyer that would be distributed, whatever, and the same with drivethrough food establishments. Where there is a menu board that 

you look at to make your decisions, that would probably be the 

most appropriate place to have the communication as to calorie 

content of what’s on the menu. 

But with respect to all of the specifics, it is still in discussion, 

and we got across the range of different types of establishments a 

lot of suggestions about different ways to make information available so that it would be most consumer-friendly and-or least burdensome to the industries involved. 

Senator BLUNT. My last question is, where I read ‘‘nutritional 

content’’ does that mean calories or does that mean a lot more than 

calories, as you comply with this? 

Dr. HAMBURG. As I remember, calories was what was clearly indicated for posting with a requirement to indicate that additional 

nutritional information—— 

Senator BLUNT. Is available? 

Dr. HAMBURG [continuing]. Would be made available on request 

from the consumer. 
107 

Senator BLUNT. Thank you. 

Thank you, Mr. Chairman. 

Senator KOHL. Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. 

KV PHARMACEUTICAL

Thank you, first of all, for your decisive action a year ago on the 

Makena drug, the progesterone made by KV Pharmaceutical, when 

they took what was a compound, priced it $10 to $20 per injection, 

and a woman, a pregnant woman, needed about 20 injections, as 

you know, in the course of the treatment, and after getting FDA 

approval jacked the price up to $1,500. Some would say they overreached. Others would say they were greedy. 

Your action was important. However, some things have happened that I think demand more attention. As you instructed 

compounding pharmacies to keep compounding and not to respond 

to the cease and desist order, it was a real public health victory 

that you caused. So thank you for that. 

Recently, KV Pharmaceutical—and it’s pretty incredible behavior, a company that astounds me in its behavior and interaction 

with its patients—claimed that it collected contaminated samples 

of the compounded versions of the drug and asked the FDA to investigate. I am pretty amazed how they did it, what they did, but 

they did. This investigation and the length of it has caused some 

doctors to be reluctant in prescribing the compound, causing, I 

would be pretty certain, some women not to get the medication, 

which means a higher rate, I don’t have evidence of that, but I assume—a higher rate of low-birth-weight babies or, second, great expense to insurance companies and taxpayers. 

So my question is, what are you doing in this? Are you aware of 

this slowdown in prescriptions that we’re told about, and what are 

you doing to speed up this investigation so we can put this behind 

us, so that women who are at high-risk of low-birth-weight babies 

get access to this drug for $300 or $400 instead, or this progesterone for $300 or $400, instead of—well, they dropped the price from 

$1,500 to $690. That was really kind of them, so it’s only $20,000 

instead of $30,000. 

What are you doing to fix this public health hazard? 

Dr. HAMBURG. When we do get a report, wherever it comes from, 

of a potential public health concern regarding an activity that we 

regulate, we take it very seriously and we do follow up. So we are 

in the process of an inspection, an investigation of the concerns 

that were raised. Obviously, we need to do this based on more than 

just reports, especially if the reports come from—— 

Senator BROWN. The manufacturer. 

Dr. HAMBURG [continuing]. The manufacturer. 

However, it is an ongoing investigation and I can’t really report 

on details of findings or timing. I have not been made aware of concerns that during this process that there has been a decline in access to the therapeutic intervention overall. And I will go back and 

look at that. 

Senator BROWN. We’ll compile what information we can. 

Dr. HAMBURG. Okay. 
108 

Senator BROWN. Some in the medical community have told us 

that the number of prescriptions has slowed as a result of the fear 

that doctors have because this company has made accusations that 

certainly serve its financial interest. Maybe they’re true. I understand you have that responsibility. But you have a responsibility 

to move as quickly as you can in this case because it’s clearly a 

huge public health threat. Okay, thank you. 

IMPORTED DRUGS

Second group of questions. Tainted heparin from China—and I 

want to follow up on some things that Senator Blunt asked about— 

in 2008 it killed 100 people in this country, including, I believe— 

around the world; I’m not sure—including 3 people from Toledo, 

Ohio. In 2007–2008, melamine was found in pet food and in infant 

formula in China. I’ve heard recently, in the last year, from a number of dog owners who lost their animals as a result, their beloved 

animals, as a result of tainted chicken treats from China. 

More recently, the identity and safety of imported fish has become a growing concern, a recurring concern also. You know the 

importance of this. You’ve asked for $10 million in your budget, as 

you pointed out to Senator Blunt and he pointed out, 16 new fulltime employees, 7 food safety inspectors, including 7 new safety inspectors and 9 drug safety—7 food, 9 drug safety. 

This is a huge problem. There is no way, when you look at—my 

understanding is it would take the FDA 9 years to perform one inspection at the high-priority pharmaceutical facilities in China and 

13 years to inspect all of the foreign-based pharmaceutical manufacturing plants. 

Understand $10 million is important. The inspectors are important. But isn’t the goal to make the companies that import these 

drugs—I don’t care if they’re American companies or if they’re 

French companies or Chinese companies that are selling into the 

American market. Shouldn’t your goal be to make them personally 

responsible? 

I mean, if a chief executive officer (CEO) is not certain where all 

the ingredients come from, and those ingredients coming from 

wherever end up killing a patient in Toledo, shouldn’t that CEO go 

to jail? Shouldn’t that CEO, that company, be fined huge amounts 

of money? 

We’ll never be able to inspect every place in China. What do we 

do about this? Come up with something more creative than begging 

the Congress for $10 million so we can sprinkle a few food inspectors and safety and pharmaceutical inspectors in a country of 1.3 

billion. Come up with something—— 

Dr. HAMBURG. I want to reassure you that, number one, this is 

a huge priority for us and we have a multifaceted program. The 

$10 million is a small drop in the bucket of what our overall needs 

are. We do believe that we have to have a strategy that rally increases standards and accountability in the countries of manufacture, that increases the ability for us to work with other regulatory 

authorities to share information, because many countries are facing 

the same challenge. We need to really carve up the landscape. 

We need to also target our inspectional resources more efficiently 

so that they can be extended further. And of course, we have to 
109 

continue our border import safety activities as well, but do it in a 

more risk-based way. 

Senator BROWN. I’m going to interrupt. I’m sorry, Commissioner. 

Is there any way to do these inspections, short of threatening legal 

action—and I don’t care about, I really don’t care about a CEO 

going to jail or I don’t care about a huge fine against the companies. I want these companies to be responsible for their ingredients. 

Is there any way to do that short of some legal process? 

FOREIGN IMPORTER

Dr. HAMBURG. Yes. And in fact, the Congress has helped us in 

that domain. The Food Safety Modernization Act included a component for foreign importer verification and really puts a requirement 

on people that are bringing products into this country to verify that 

they were manufactured in compliance with our standards. 

Senator BROWN. And if the ingredients have shown to be contaminated and cost lives, what is the legal resource for a consumer 

or a family or a country? 

ENFORCEMENT

Dr. HAMBURG. I think on the drugs side there’s legislation that’s 

currently being considered to give us additional authorities to be 

able to act and enforce. On the food side, we have been able to 

achieve more of the tools and authorities that we need. It still is 

a real problem to take enforcement action proactively in another 

country, and I think it does speak to the fact that we need to continue to work, as we are, making this a very important area of 

focus within the FDA, to really—— 

Senator BROWN. I understand that. But for 100 years in this 

country, from the creation of the FDA after Upton Sinclair’s book, 

we have worked hard to protect public health and protect food safety and pharmaceutical and drug safety. And just because the company—you don’t have jurisdiction in another country doesn’t mean 

that they should have access to our markets unless those companies, the importer or the company, whoever it is that’s bringing it 

in, that they should have ultimate liability for that. 

Mr. Chairman, if I could go one other short set of questions. 

Thank you. 

Dr. HAMBURG. I just want to tell you that this is a huge priority, 

and it’s one that we talk about every day in terms of we as a Nation have to really address this. FDA is at the cutting edge of much 

of this in terms of responding to the challenges of globalization. At 

the present time, we don’t have the tools and authorities that we 

fully need to achieve that, nor do we have the resources. 

Senator BROWN. I respect you. I’ve watched your career. I’m not 

convinced yet that you are aggressive enough. 

On the question of drug shortages, thank you for your work on 

that. Thank you for the comments from the chairman. 

REPACKAGING

On the issues of repackaging, we sent you a letter about repackaging within a specific hospital. They get 15 vials of drug X, they 

break it into 5 packages of 3 each to treat a patient, that they’re 
110 

able to repackage and use those, helping to perhaps preclude a 

drug shortage. I sent you a letter suggesting we do that. We will 

follow up with some legislative language. 

The letter that you sent back to us yesterday was to us inconclusive. I mean, Erin in my office, it wasn’t clear to her in reading it 

that that was a very specific answer. I’d just like to ask you to 

work with us on the whole repackaging issue, because that can preclude some of these drug shortages. 

Dr. HAMBURG. I’d be happy to work with you. I think that actually some of the restrictions have to do with other components of 

HHS activity, and we need to work—— 

Senator BROWN. We’ll work with you. 

Thank you. 

Senator KOHL. Thank you, Senator Brown. 

Senator Moran. 

Senator MORAN. Mr. Chairman, thank you. Thank you to you 

and to the ranking member. 

ANTIBIOTICS—LIVESTOCK

Commissioner, I’m pleased by your presence here today. Recently 

the FDA-issued guidance concerning antibiotic use by farmers and 

ranchers in regard to their livestock. Was that guidance based 

upon peer-reviewed science? The second question is: Would you 

provide this subcommittee with the science on which that guidance 

was based? 

Dr. HAMBURG. Certainly. We did review an enormous amount of 

literature over quite a long period of looking at these questions. We 

also worked very closely with all of the critical stakeholders as we 

move toward putting forward that guidance, which is to restrict the 

use of antibiotics for growth promotion and feed enhancement purposes. We actually got a lot of support in both the analytic work 

for that and in the determination to go forward from our colleagues 

in animal and veterinary health, and the pharmaceutical manufacturers involved also, I think, believe that the world has changed 

considerably and we now know a great deal about the impact of injudicious use of antibiotics and the development of antibiotic resistance, that we as a Nation and as a global community are facing 

a very, very serious public health challenge with respect to antibiotic resistance and that this can make a real difference in order 

to really reduce this public health threat to both humans and animals with respect to ensuring that we have antibiotics that work. 

Senator MORAN. I think you were suggesting that there is broad 

consensus to back up, in the industry, both the users and the scientific community, to support the guidance that you have issued. 

Dr. HAMBURG. Nothing we do ever has consensus, but we did 

work hard to listen to the concerns of all of the stakeholders and 

address them. 

Senator MORAN. Is it related to the use? When you talk about 

use for growth, I assume that’s as compared to treating disease and 

infection? 

Dr. HAMBURG. Correct. 

Senator MORAN. Did the guidance have any implications on that 

use of antibiotics? 
111 

Dr. HAMBURG. Not for treating disease. We do believe that these 

antibiotics, just as in human populations, antibiotics are used 

under prescription and guidance of medical professionals, that veterinary professionals should be overseeing the appropriate use for 

treatment of disease. 

Senator MORAN. Commissioner, would you work with my staff to 

give us—— 

Dr. HAMBURG. Certainly. 

Senator MORAN [continuing]. A summary of the scientific basis 

for that guidance? 

Dr. HAMBURG. Certainly. 

[The information follows:] 

Questions regarding the use of antimicrobial drugs in food-producing animals 

have been raised and debated for many years. A variety of recognized international, 

governmental, and professional organizations have studied the issue. Within the 

FDA Guidance for Industry No. 209, ‘‘The Judicious Use of Medically Important 

Antimicrobial Drugs in Food-Producing Animals,’’ we have briefly summarized the 

findings and recommendations from some of the notable reports that have addressed 

this issue over the past 40 years. These reports provide context to FDA’s current 

thinking on this issue and highlight the longstanding concerns that have been the 

subject of discussion in the scientific community as a whole. 

We acknowledge that a significant body of scientific information exists, including 

some information that may present equivocal findings or contrary views. However, 

below is a list of some of the scientific literature that FDA considered in developing 

this guidance, including some key reports and peer-reviewed literature. This list is 

not intended to represent an exhaustive summary of the scientific literature but 

rather to highlight some of the more recent scientific research related to the use of 

antimicrobial drugs in animal agriculture and the impact of such use on antimicrobial resistance. 

—1. 1969 Report of the Joint Committee on the Use of Antibiotics in Animal Husbandry and Veterinary Medicine. 

—2. 1970 FDA Task Force Report, ‘‘The Use of Antibiotics in Animal Feed.’’ 

—3. 1980 National Academy of Sciences Report, ‘‘The Effects on Human Health 

of Subtherapeutic Use of Antimicrobial Drugs in Animal Feeds.’’ 

—4. 1984 Seattle-King County Study: ‘‘Surveillance of the Flow of Salmonella and 

Campylobacter in a Community.’’ 

—5. 1988 Institute of Medicine (IOM) Report: ‘‘Human Health Risks with the Subtherapeutic Use of Penicillin or Tetracyclines in Animal Feed.’’ 

—6. 1997 World Health Organization (WHO) Report, ‘‘The Medical Impact of Antimicrobial Use in Food Animals.’’ http://whqlibdoc.who.int/hq/1997/ 

WHOlEMClZOOl97.4.pdf 

—7. 1999 National Research Council (NRC) Report: ‘‘The Use of Drugs in Food 

Animals—Benefits and Risks.’’ 

—8. 1999 United States Government Accountability Office (GAO) Report—‘‘Food 

Safety: The Agricultural Use of Antibiotics and Its Implications for Human 

Health.’’ http://www.gao.gov/archive/1999/rc99074.pdf 

—9. 1999 European Commission Report, ‘‘Opinion of the Scientific Steering Committee on Antimicrobial Resistance.’’ http://ec.europa.eu/food/fs/sc/ssc/ 

out50len.pdf 

—10. 2000 World Health Organization (WHO) Expert Consultation: ‘‘WHO Global 

Principles for the Containment of Antimicrobial Resistance in Animals Intended 

for Food.’’ http://whqlibdoc.who.int/hq/2000/WHOlCDSlCSRlAPHl 

2000.4.pdf 

—11. 2003 Report, ‘‘Joint FAO/OIE/WHO Expert Workshop on Non-Human Antimicrobial Usage and Antimicrobial Resistance: Scientific assessment.’’ http:// 

www.who.int/foodsafety/publications/micro/en/amr.pdf 

—12. 2003 Institute of Medicine (IOM) Report, ‘‘Microbial Threats to Health: 

Emergence, Detection and Response.’’ 

—13. 2004 Report, ‘‘Second Joint FAO/OIE/WHO Expert Workshop on NonHuman Antimicrobial Usage and Antimicrobial Resistance: Management options.’’ http://www.oie.int/fileadmin/Home/eng/ConferenceslEvents/docs/pdf/ 

WHO-CDS-CPE-ZFK-2004.8.pdf 

—14. 2004 United States Government Accountability Office (GAO) Report—‘‘Antibiotic Resistance: Federal Agencies Need to Better Focus Efforts to Address 
112 

Risks to Humans from Antibiotic Use in Animals.’’ http://www.gao.gov/ 

new.items/d04490.pdf 

—15. 2005 Codex Alimentarius Commission (Codex), ‘‘Code of Practice to Minimize and Contain Antimicrobial Resistance.’’ http://www.codexalimentarius.net/ 

download/standards/10213/CXPl061e.pdf 

—16. 2006 Antimicrobial Resistance: Implications for the Food System, Comprehensive Reviews in Food Science and Food Safety, Vol. 5, 2006. 

—17. 2009. American Academy of Microbiology. Antibiotic Resistance: An Ecological Perspective on an Old Problem. 1752 N Street, NW, Washington, DC 20036, 

(http://www.asm.org). 

—18. 2011. Tackling antibiotic resistance from a food safety perspective in Europe. World Health Organization (WHO), Regional Office for Europe 

Scherfigsvej 8, DK-2100 Copenhagen ;, Denmark. http://www.euro.who.int/ 

data/assets/pdflfile/0005/136454/e94889.pdf 

—19. 2008. Longitudinal study of antimicrobial resistance among Escherichia coli 

isolates from integrated multisite cohorts of humans and swine. Alali WQ, Scott 

HM, Harvey RB, Norby B, Lawhorn DB, Pillai SD. Appl Environ Microbiol. 

74(12):3672–81. 

—20. 2008. Diversity and distribution of commensal fecal Escherichia coli bacteria 

in beef cattle administered selected subtherapeutic antimicrobials in a feedlot 

setting. Sharma R, Munns K, Alexander T, Entz T, Mirzaagha P, Yanke LJ, 

Mulvey M, Topp E, McAllister T. Appl Environ Microbiol. 74(20):6178–86. 

—21. 2008. Effect of subtherapeutic administration of antibiotics on the prevalence of antibiotic-resistant Escherichia coli bacteria in feedlot cattle. Alexander, 

T.W., L.J. Yanke, E. Topp, M.E. Olson, R.R. Read, D.W. Morck, and T.A. 

McAllister. Applied and Environmental Microbiology. 74:4405–4416. 

—22. 2009. A metagenomic approach for determining prevalence of tetracycline 

resistance genes in the fecal flora of conventionally raised feedlot steers and 

feedlot steers raised without antimicrobials. Harvey, R., J. Funk, T.E. Wittum, 

and A.E. Hoet. American Journal of Veterinary Research. 70:198–202. 

—23. 2009. Association between tetracycline consumption and tetracycline resistance in Escherichia coli from healthy Danish slaughter pigs. Vieira, A.R., H. 

Houe, H.C. Wegener, D.M. Lo Fo Wong, and H.D. Emborg. Foodborne Pathogens and Disease. 6:99–109. 

—24. 2009. Associations between reported on-farm antimicrobial use practices and 

observed antimicrobial resistance in generic fecal Escherichia coli isolated from 

Alberta finishing swine farms. Varga C., A. Rajic, M.E. McFall, R.J. Reid-Smith, 

A.E. Deckert, S.L. Checkley, and S.A. McEwen. Preventive Veterinary Medicine. 

88:185–192. 

—25. 2010. Farm-to-fork characterization of Escherichia coli associated with feedlot cattle with a known history of antimicrobial use. Alexander, T.W., G.D. Inglis, L.J. Yanke, E. Topp, R.R. Read, T. Reuter, and T.A. McAllister. International Journal of Food Microbiology. 137:40–48. 

—26. 2011. Lower prevalence of antibiotic-resistant Enterococci on U.S. conventional poultry farms that transitioned to organic practices. Sapkota AR, Hulet 

RM, Zhang G, McDermott P, Kinney EL, Schwab KJ, Joseph SW. Environ 

Health Perspect. 119(11):1622–8. 

—27. 2011. Association between antimicrobial resistance in Escherichia coli isolates from food animals and blood stream isolates from humans in Europe: an 

ecological study. Foodborne Pathogens and Disease. Vieira, A.R., P. Collignon, 

F.M. Aarestrup, S.A. McEwen, R.S. Hendriksen, T. Hald, and H.C. Wegener. 

8:1295–1301. 

—28. 2011. Distribution and characterization of ampicillin- and tetracycline-resistant Escherichia coli from feedlot cattle fed subtherapeutic antimicrobials. 

Mirzaagha P, Louie M, Sharma R, Yanke LJ, Topp E, McAllister TA. BMC 

Microbiol. 19;11:78. 

—29. 2012. In-feed antibiotic effects on the swine intestinal microbiome. Looft, T., 

T.A. Johnson, H.K. Allen, D.O. Bayles, D.P. Alt, R.D. Stedtfeld, W.J. Sul, T.M. 

Stedtfeld, B. Chai, J.R. Cole, S.A. Hashsham, J.M. Tiedje, and T.B. Stanton. 

Proceedings of the National Academy of Sciences USA. 109:1691–1696. 

In addition, FDA also considered a number of other studies that were referenced 

by the Department of Health and Human Services in response to the 2004 United 

States Government Accountability Office (GAO) report entitled, ‘‘Antibiotic Resistance: Federal Agencies Need to Better Focus Efforts to Address Risks to Humans 

from Antibiotic Use in Animals’’: 

—1. Phillips I, Casewell M, Cox T, et al. Does the use of antibiotics in food animals pose a risk to human health? A critical review of published data. J 

Antimicrob Chemother, 2004;53:28–52. 
113 

—2. Holmberg SD, Wells JG, Cohen ML. Animal-to-man transmission of antimicrobial-resistant Salmonella: investigations of U.S. outbreaks, 1971–1983. 

Science, 1984; 225:833–5. 

—3. Holmberg SD, Solomon SL, Blake PA. Health and economic impacts of antimicrobial resistance. Rev Infect Dis, 1987; 9:1065–78. 

—4. Lee LA, Puhr ND, Maloney K, et al. Increase in antimicrobial-resistant Salmonella infections in the United States, 1989–1990. J Infect Dis, 1994; 170:128– 

34. 

—5. Varma J, M<lbak K, Rossiter S, et al. Antimicrobial resistance in Salmonella 

is associated with increased hospitalization; NARMS 1996–2000. International 

Conference on Emerging Infectious Diseases. March 2002. Atlanta, Georgia. 

—6. Varma J, M<lbak K, Rossiter S, et al. Antimicrobial resistance in 

nontyphoidal Salmonella is associated with increased hospitalization and bloodstream infection—United States, 1996–2000. 51st Annual EIS Conference. April 

22–26, 2002. Atlanta, Georgia. 

—7. Helms M, Vastrup P, Gerner-Smidt P, M<lbak K. Excess mortality associated 

with antimicrobial drug-resistant Salmonella Typhimurium. Emerg Infect Dis, 

2002; 8:490–5. 

—8. Martin L, Fyfe M, Dor ́e K, et al. Increased burden of illness associated with 

antimicrobial-resistant Salmonella enterica serotype Typhimurium infections. J 

Infect Dis, 2004; 189:377–84. 

—9. Smith KE, Besser JM, Hedberg CW, et al. Quinolone-resistant Campylobacter 

jejuni infections in Minnesota, 1992–1998. N Engl J Med, 1999; 340:1525–32. 

—10. Neimann J, M<lbak K, Engberg J, et al. Longer duration of illness among 

Campylobacter patients treated with fluoroquinolones. 11th International Workshop on Campylobacter, Helicobacter, and Related Organisms, 1–5 September, 

2001. Freiburg, Germany. 

—11. Nelson JM, Smith KE, Vugia DJ, et al. Prolonged diarrhea due to 

ciprofloxacin-resistant Campylobacter infections. J Infect Dis, 2004; in press. 

Senator MORAN. Thank you very much. 

NUTRITION LABELING

Let me express my concern—and Senator Blunt raised this topic, 

but the nutrition labeling of standard menu items at chain restaurant provisions was authorized by the Patient Protection Affordable Care Act. It’s my view that that law was intended to provide 

a uniform standard for chain restaurants with 20 or more locations 

to comply with various State and local menu labeling laws. 

The concern I want to express is that the expansion of that— 

those regulations, to grocery stores is in my view a serious problem. In fact, the Office of Management and Budget (OMB) determined that this was the third most burdensome regulatory implementation of any law. Of any law that’s currently being implemented, OMB says this is the third-largest regulatory burden. 

They estimated an increase of over 14.5 million hours of work and 

almost $70 million for increased recordkeeping costs alone. 

I would just encourage you strongly and insist to the degree that 

I can that you not take this opportunity to regulate further than 

is required by the law. In part, I would express my concern, certainly about the cost that is occurring or will occur to the grocery 

store businesses. For many members of Congress, I assume that’s 

a large chain. We have a bit of that in Kansas, but many of our 

grocery stores are very small. They are marginal. We struggle—in 

fact, I remember numerous times in my time as a House member, 

now as a Senator, telling people that where I come from economic 

development can be whether or not there’s a grocery store in town. 

It’s a very basic need. 

In fact, I’m a co-chair of the Senate Hunger Caucus. We’re working with colleagues here in the Senate, but with the U.S. Depart-
114 

ment of Agriculture (USDA), in regard to so-called food deserts, 

where grocery stores are not available. It’s often the core center of 

cities, often rural communities. The ability for a grocery store to 

survive is very difficult now, and the burdens that you may place 

upon grocery stores will exacerbate the problem of access to highquality foods, including fruits and vegetables. 

I didn’t see in what I read about FDA’s cost analysis that there 

were very many benefits as far as calorie intake or health of the 

consumer related to the additional regulation of grocery stores in 

regard to so-called menu labeling. I want to point out the significant increase in cost, but I also want to point out these regulations 

may significantly damage the ability of everyday Americans who 

live in places that are already difficult to access quality food—it 

may reduce the access to that quality food even further. 

Dr. HAMBURG. I appreciate your comments, but I just want to 

make clear that the law did indicate restaurants and restaurantlike establishments. That was not intended, obviously, to address 

every single grocery store. But the challenge has been trying to determine—there are big grocery stores that have restaurant-like 

cafe ́s with a menu and prepared food. So that’s a very different 

thing than looking at menu labeling of everything that would be 

sold in a grocery store, whatever. 

So I just want to make clear that I think that the universe that 

would apply to a grocery store is much smaller than perhaps you 

have understood. We have put out for comment various potential 

strategies for how you would define a restaurant-like establishment, and of course the issue of how to deal with grocery store 

cafe ́s and these kinds of prepared foods for immediate consumption. 

That’s been one of the huge areas of complexity and where we’re 

still trying to sort out what does make sense in terms of benefits 

to consumers, but not being overly burdensome, and having it really be implementable. 

So I take very seriously what you say. 

Senator MORAN. Commissioner, thank you. Even if it is a larger 

grocery store, I assume the kinds of things that may get picked up 

are salad bars and fruit stands. Fruits and vegetables are a significant component of increasing the healthiness of the American consumer. Let’s make certain that in the quest to further regulate we 

don’t actually diminish the opportunities for—I can see the circumstance in which a grocery store, if you pursue these regulations, simply decides: We’re no longer going to provide the salad 

bar or the opportunity for fresh fruit; it’s just not worth trying to 

comply with these regulations that FDA is pursuing. 

Finally, Mr. Chairman, I would just express concern about the 

fees that you’re talking about. Mr. Blunt—my time has expired, but 

the ranking member raised this topic. Those are significant increases in cost of doing business, that in this economic time can be 

very damaging to the ability of a business to stay in business. 

Thank you, Mr. Chairman. 

Senator KOHL. Senator Pryor. 

Senator PRYOR. Thank you, Mr. Chairman. 

Thank you for being here today, Commissioner. It’s always good 

to see you. I want to start with a quick observation, that’s going 

to take some follow-up because I don’t have all my facts today. I 
115 

was in Arkansas over this most recent recess, and I talked to a 

pharmacist. She told me that one of the games that the pharmaceutical companies are playing right now allow a company to take 

an old drug that’s been around forever and somehow gain exclusively to sell the drug. 

But nonetheless, the cost has gone up considerably and it’s the 

same old drug. So I’d love to sit down with you or your team and 

talk about that. 

FACILITIES

Let me ask you about your budget, and specifically about buildings and facilities. I know that we’re on a spending decline for most 

agencies. In fiscal year 2011, as I understand it, for your building 

and facilities fund you had $12.75 million; fiscal year 2012, $8.7 

million; fiscal year 2013, $5.3 million. So you’re really shaving 

down the building and facilities account. 

That concerns me because you do very valuable, very important 

work. I know this isn’t the budget, if you had a magic wand that 

you would choose. But we are where we are. 

Do you share that concern that I have, that you may not have 

enough money for facilities? 

Dr. HAMBURG. I do. As you know, this is a budget of very hard 

choices. And it’s discouraging in such critical areas as building and 

facilities, as well as other arenas, to see limitations on dollars that 

are needed to make a difference. It will mean that we’ll have to 

defer some maintenance activities, some upgrade activities. It 

means we’re going to have to really prioritize to address those 

buildings and facilities issues that are most critical to supporting 

our mission in terms of being able to review and approve products 

and do the research necessary to support those efforts and to make 

sure that we have the safety systems in our laboratories, for example, that are necessary for our employees. 

NATIONAL CENTER FOR TOXICOLOGY RESEARCH

It is a huge concern, I’m sure you recognize, that the National 

Center for Toxicology Research (NCTR) in Arkansas is a place that 

we have a very important and unique lab resource, and this is a 

reduction that will come very hard on them. But we will work carefully with them to make appropriate decisions. 

I should note that 2011 was really a high water mark in our 

buildings and facilities budget. It’s not as though we have been at 

a steady state. We have always been stretched very thin, and I 

think it is reflected, unfortunately, in our inability to maintain all 

of our facilities at the levels that we would like. 

NANO

Senator PRYOR. You mentioned NCTR and I know that you’re 

very familiar with the work they do down there. One type of work 

is this new and emerging nano research. I would hate to see that 

slowed down or stopped based on the facilities, because they’re obviously going to need space and infrastructure to have the ability 

to do this work. 
116 

They have plenty of room out there to do it. It’s just a question 

if they have appropriate space within their existing facilities or if 

they need to reconfigure the space. But I hope, as you’re going 

through this year and managing the agency, you will always remember them and try to continue on with that mission. 

Let me move on to the next topic, which is again back on NCTR. 

I know you came down there. Was that last year, I guess? 

Dr. HAMBURG. I’ve been there a couple times, but I was most recently there in August of last year. 

Senator PRYOR. August of last year. 

Dr. HAMBURG. It was hot. 

Senator PRYOR. Yes, it was. I remember that. Thank you for coming down again. 

We’re trying to establish this virtual center of excellence in regulatory science. I’m curious about an update on that. As you know, 

that’s a multi-partner thing that they’re trying to pull together. 

Dr. HAMBURG. Yes. 

Senator PRYOR. So where are we on that? 

NATIONAL CENTER FOR TOXICOLOGICAL RESEARCH COLLABORATION

Dr. HAMBURG. It’s an exciting collaboration. It involves the State 

of Arkansas, the five research universities in Arkansas, and the 

FDA through the National Center for Toxicological Research. There 

are a number of things that are under way or about to happen. 

One is that there will be a regulatory science credentialed program, 

training program, at the University of Arkansas in their school of 

public health. The first class will begin in the fall, and that will 

be very, very important in terms of helping to ensure that we have 

the cadre of trained professionals that we need going forward, 

whether they work in academia, industry, or government. We need 

those people for the future. 

The State of Arkansas will be helping to support stipends for students in that program and we’ll be helping with teaching and developing the curriculum. 

We also have a research agenda focused in the nanotechnology 

area, and that is producing some exciting projects and collaborations really looking at issues at the present time of characterization 

and toxicology with respect to nano materials and nanotechnology 

processes. 

Senator PRYOR. That’s great. I think that is truly a partnership, 

a collaboration of lots of different entities. You guys are obviously 

very critical to that. But Arkansas’s pitching in a lot, too. Thank 

you for your leadership on that. 

Now, I have another question, since we’ve been talking about 

nanotechnology here, in 2007 there was a nanotechnology task 

force report. Here we are 5 years later. I’m wondering if that needs 

to be updated. Also, do you have a state of nano regulation, so to 

speak? How’s the process going of trying to get your hands around 

nanotechnology? 

Dr. HAMBURG. The work of that task force is ongoing and there 

is measurable progress in some critical areas, some of it reflected 

in what we were just discussing in terms of ongoing research and 

training activities. Also, FDA has been working with industry in 
117 

the areas that we regulate where nanotechnology or nano materials 

are now being used. 

We’re actually about to issue a couple of new guidances, I believe 

any day now, that will be I think very helpful to the food industry 

and cosmetics with respect to their use of nano materials and nanotechnology. 

We are dealing with nanotechnology as we deal with other 

emerging technologies where we have an important responsibility 

to help to advance the opportunities that are part of these new 

technologies, but also to really study and ensure safety short-term 

and long-term in terms of the use. We are seeing the application 

of nano-related techniques and materials across many domains of 

FDA activity—drugs, devices, food, cosmetics. So it’s an area that 

is very, very active at the present time. 

Senator PRYOR. And you think that the FDA has its arms around 

the direction nano is taking here and the resources to take care of 

that? 

Dr. HAMBURG. I think that we do. I think that the opportunity 

to engage in public-private collaborations is very, very critical so 

that we can assure access to the best and the brightest minds, 

wherever they are, in terms of the research that needs to be done, 

and then working closely with industry to address both the potential uses and the opportunity to really understand and identify any 

potential concerns in relation to that, so that we can look at both 

the ability to deliver innovative new products and strategies, but 

also assure safety. 

Senator PRYOR. Thank you, Mr. Chairman. 

Senator KOHL. Thank you, Senator Pryor. 

Senator Collins. 

Senator COLLINS. Thank you very much, Mr. Chairman. 

DRUG SHORTAGES

Dr. Hamburg, physicians, pharmacists, and patients throughout 

this country are continuing to struggle with alarming shortages of 

certain vital drugs. I’ve heard about this from virtually every hospital in my State. Many of the drugs in short supply are truly vital. 

They’re used for chemotherapy, for example, or for anesthesia or 

for the treatment of infections. 

There are also shortages of drugs used in emergency rooms and 

intensive care units. Eighty percent of hospitals are reporting that 

they’ve had to delay treatment due to shortages. That is so troubling to me, and it’s why I’ve joined with Senator Amy Klobuchar 

of Minnesota in introducing a bill to require pharmaceutical manufacturers to report to the FDA whenever they see evidence that 

they’re going to have a shortage of a drug, whether it’s because of 

raw material shortages or contamination, whatever the reason. 

Now, this builds on the model of a drug shortage program that 

already exists in FDA, but it is a voluntary program for manufacturers. Nevertheless, it’s my understanding that FDA, acting on 

these voluntary reports, has been able to avert almost 200 shortages in the last year. 

There’s been a tripling of the funding for the drug shortage program and yet we still see these shortages of critical drugs. So could 

you first give me some insight as to why these shortages are per-
118 

sisting, what FDA thinks should be done, and whether or not you 

have the resources and authority that you need? 

Dr. HAMBURG. Thank you and we appreciate your leadership and 

work on the drug shortage issue. It’s a huge concern, of course, to 

our country. As you identify, it cuts across many important areas 

of medical care. 

In recent years we have seen the numbers of drug shortages 

going up, although there was a report—I saw it in the Washington 

Post—that the University of Utah, which tracks drug shortages, is 

actually reporting that the numbers so far this year are one-half 

what we saw in the same timeframe last year. So that is encouraging. 

But drug shortages are occurring for a number of different reasons, complex reasons, that have to do with the nature of the drugs 

in short supply. The majority of the drugs that are in shortage are 

sterile injectables that present very specific manufacturing issues 

and also often are older drugs and generic drugs with a limited 

number of manufacturers. 

There also are economic forces at play, and I think we need to 

continue to work to fully understand the factors that are causing 

the drug shortages, so as a Nation we can best address those. 

With respect to the FDA role, we can’t stop the shortages from 

happening. We can’t compel manufacturers to make drugs if they 

choose to discontinue. We cannot assure that all of the precursor 

materials will be available or that the manufacturing will meet the 

quality standards that the American public expect and demand. 

But what we can do, and as the proposed legislation really addresses, is respond quickly and with a lot of flexibility when we 

have early warning that a shortage may occur and a disruption in 

the supply chain. That’s how we were able to prevent, as you noted, 

almost 200 drug shortages last year and about 30 so far this calendar year. 

We did put out a request at the end of October to drug manufacturers to voluntarily report to us if they saw a potential shortage 

situation looming. Since that time we’ve gotten a sixfold increase 

in reports and that has been very, very helpful. But we think that 

there is real value in making it more explicit through legislation 

and really enabling us to systematize the information that we get, 

and I think that will help us to also establish the kind of databases 

that we need to be able to track more effectively and learn from 

the shortages. 

But we have, using our ability to work with manufacturers to address quality issues, our ability to work with manufacturers who 

aren’t facing quality issues or distribution issues but make the 

same drug, to increase their manufacture to address the shortage 

problem, to bring a new manufacturer on board in some instances, 

and sometimes to look overseas if there’s a drug that can address 

the shortage need and make sure that that drug meets our standards of safety and efficacy, but for targeted use bring it over. 

So we do have tools when we know about a shortage situation 

or a looming shortage, and we look forward to working with you. 

Senator COLLINS. And of course, if you’re able to notify 

healthcare providers that a shortage is upcoming, they may be able 
119 

to substitute a drug without interrupting treatment halfway 

through. 

Dr. HAMBURG. Right, and we can work with them on that, and 

we do. 

ARTIFICIAL PANCREAS

Senator COLLINS. There is, very quickly, another issue I want to 

raise. I’m the co-chair and the founder of the Senate Diabetes Caucus, and I’m very excited about the potential for an artificial pancreas. I know that it would have the impact of dramatically improving the health and quality of life for individuals living with diabetes, particularly type 1 diabetes. 

The FDA has moved forward, has issued draft guidance—I was 

encouraged that that happened last December—to move to clinical 

trials from an inpatient to an outpatient basis. It’s my understanding that the first outpatient trial using an artificial pancreas 

will be held at the University of Virginia. So I commend you for 

that. 

I know there’s been a lot of comments on the draft guidance by 

the Juvenile Diabetes Research Foundation (JDRF) and other 

stakeholders, and I hope you’ll look at those comments. 

What I want from you today is a timetable. Could you tell us 

when you plan to finalize the draft guidance on the artificial pancreas, and also the draft guidance on the low glucose suspend system, which is available in other countries, and thus it’s been a 

source of frustration to a lot of people living with diabetes that it’s 

not available here? 

Dr. HAMBURG. Both of these guidances represent very important 

advances, as you know. If we could get an artificial pancreas on the 

market, it would make a huge difference in the lives of so many 

patients living with diabetes and their families. It is something 

that we’re very excited about the opportunity that advances in 

science and technology now offer. We want to do our part in making sure that we can advance this as quickly as possible, but mindful that this is a very sensitive kind of a medical device and you 

want it to work properly or else it doesn’t benefit anyone. 

I can’t give you an exact timeframe. We are actively looking at 

comments and we have been working very intensively and closely 

with organizations like JDRF and healthcare providers in this 

area. We very much want to move it forward swiftly and we think 

that there’s a lot of alignment in terms of the strategies, and we’ve 

gotten a lot of input in terms of the strategies for moving, as you 

point out, quickly to the clinical assessment and moving from a 

more controlled hospital environment to the more real world outpatient. But we want to do it right, but we want to do it in a way 

that’s mindful of the fact that time matters to people who are living with diabetes type 1. 

Senator COLLINS. I do hope that you’ll be able to finalize the 

guidance this summer. I know that’s the hope of many of the advocacy organizations and physicians and other experts in this field. 

I thank you, Mr. Chairman, ranking member, for your patience. 

Senator KOHL. Thank you, Senator Collins. 
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PREMARKET APPROVAL

Dr. Hamburg, in your statement, you spoke about improving the 

premarket approval process for medical devices, which is important 

to get the best medical care to patients. I and others have been 

concerned about the postmarket surveillance of medical devices and 

introduced bipartisan legislation to improve the surveillance. As 

you know, recent news reports have highlighted postmarket problems with medical devices, such as hip implants and most recently 

heart wires. 

Given these reports of serious medical device failures, don’t you 

agree that your current tools and strategies for postmarket safety, 

nearly all of which are voluntary, are in need of improvement? 

It’s my understanding that FDA is working on a new comprehensive postmarket surveillance strategy and is planning to unveil it 

shortly. 

Dr. HAMBURG. This is correct. 

Senator KOHL. Could you give us some indication and some 

elaboration on what you’re planning to do? 

Dr. HAMBURG. There are a number of different ways that we 

have to address the issues of ongoing monitoring of safety and efficacy once a product is in the marketplace. We are putting forward 

a strategy to strengthen postmarket surveillance and to really 

build on data that is available in terms of electronic health records 

and information that is already being collected, but that we can tap 

into to strengthen our ongoing monitoring. 

We also have, as you probably know, introduced in some of these 

higher risk areas requirements, working with the manufacturer, 

for ongoing targeted data collection as to safety in the experience 

with these products once they are in use and once we have the opportunity to really understand more about how they’re really working in the medical care context and in the context of daily lives. 

We also are eager to—in some key areas this has already been 

begun—create some registries that will enable us to have a deeper 

knowledge and understanding about the experience with these 

products, and we also believe that fairly soon we’ll be able to implement the unique device identifier, which will again create an infrastructure for better monitoring of devices in the postmarket setting. 

So there’s a lot of different strategies under way that get to the 

heart of your question, which is the concern for oversight of the 

lifecycle of these products and the ability to respond quickly to 

emerging public safety issues. 

INFORMATION TECHNOLOGY

Senator KOHL. All right. Secretary Hamburg, the budget request 

offsets some of your proposed increases through a decrease of $8 

million in IT and administrative savings. As we know, budgets are 

not increasing, so we all have to work smarter. An obvious way to 

do that is to eliminate redundant or wasteful programs. Which are 

some of the programs you’ve found to be in that category and does 

your budget request deal with some of those programs? If so, tell 

us about those programs? 

Dr. HAMBURG. Yes. In the area of IT we are going to be able to 

find some meaningful cost savings through activities to both con-
121 

solidate our systems into a data center and have savings in terms 

of efficiencies and reductions in contract costs. As well, we’re moving towards a system that will enable us to avoid duplication in 

terms of laptops and other IT equipment, and that actually is going 

to produce a surprisingly large amount of savings. 

Then through other IT initiatives, retiring old legacy systems 

and really looking at our business processes and a number of other 

actions being taken, we will be able, I think, to meet our targeted 

reduction of, I think it’s $19.7 million, in the fiscal year 2013 budget. 

I have to say, and embarrass him because he’s here, we have a 

wonderful new chief information officer (CIO), Eric Perakslis, who 

is really bringing a whole new way of thinking and doing business 

to FDA, strengthening both our IT systems and also enabling us, 

I think, to really deepen and strengthen our scientific computing, 

which will make such a difference in our ability to really address 

critical issues of safety, efficacy, and quality of the products that 

we regulate. 

Senator KOHL. Okay, Dr. Hamburg. 

Senator Blunt. 

Senator BLUNT. Thank you, Mr. Chairman. I just have a couple 

more questions. 

Actually, since we’re talking about IT, let’s just go ahead and go 

there. That was one of the areas I wanted to visit with a little bit. 

The Government Accountability Office (GAO) report wasn’t very 

good and do you want to talk a little more about how the new CIO 

is responding to that and how you feel about it? Information technology is about 10 percent of the money you’re spending and GAO 

just frankly said they didn’t think you were spending it very well. 

Dr. HAMBURG. I think that they will have a different message 

soon. That certainly is my hope and my commitment. They looked 

at a period that was time-limited and doesn’t, I think, reflect many 

of the advances that have been made and that are continuing to 

be made. They address a number of issues about our application 

list, which in fact we are in a very different place now. And while 

that will always be a dynamic listing because we want people to 

be introducing new applications and trying new things, we feel that 

we now have the kind of list that GAO is looking for and we’ll be 

able to sit down and talk with them about it. 

They talked about—the bulk of our money is really being spent 

on a limited number of really major systems, and it is very, very 

important that we examine those systems to make sure that they 

are working, that we really need them. We’re transiting to other 

ways of doing business that will in fact be both more effective and 

more efficient. 

They talked about that we didn’t have a strategy. We have a 

strategy that again is in its final stages. He’s been working hard 

since he’s been with us. He came on board at the end of October. 

INFORMATION TECHNOLOGY PROGRESS

But we have made enormous progress and, while I think it was 

a little discouraging to see their report because we know it doesn’t 

reflect all the progress that has been made, the good news is that 

that progress has in fact been made. It is very much in correspond-
122 

ence with the kinds of recommendations that GAO put forward in 

their report, and it is my strong belief that they will be pleased to 

see the progress made, and I hope that you will be pleased to see 

the progress made. 

Senator BLUNT. Have you been in a position to replace some of 

your old systems? Is that one of the things you’re evaluating, 

whether there is a much cheaper alternative to the old systems you 

had? 

Dr. HAMBURG. Yes, definitely. Consolidation of systems and 

using new strategies. I’m not an IT person, I will admit, but moving to cloud computing and other things changes the landscape dramatically. 

LIFE SCIENCES-BIODEFENSE LABORATORY

Senator BLUNT. The other thing I wanted to talk about, you had 

a request here to move into the new building. Where will this request get you if we’re able to get to most of that? 

Dr. HAMBURG. This request will enable us to actually go in and 

use this laboratory space to do absolutely critical work in the drug 

and medical countermeasures arena in particular. We have a building that has been basically built out by the General Services Administration (GSA), but in order to occupy it with laboratories that 

meet safety codes and other things we do need those additional dollars. It would be a tragedy, I think, to have invested so much in 

building this new, critically needed and unique facility, and then 

not be able to actually utilize it. 

Senator BLUNT. And that amount for outfitting that building, 

does somebody have a number there? 

Dr. HAMBURG. $17.7 million. 

Senator BLUNT. A little over $17 million. 

MEDICAL COUNTERMEASURES

You mentioned medical countermeasures and that was the last 

thing I was going to ask about. Talk to me a little about that, and 

talk to me about what you are doing or you believe you could do, 

or we could help you do, with like the Department of Defense 

(DOD), that clearly has done a whole lot of work in this area. A 

lot of what they’ve done could serve a bigger population, and maybe 

is. I’m asking for information here. 

Dr. HAMBURG. The medical countermeasures is obviously a critical area in terms of health, safety, and security of our Nation. It 

involves our ability to have the medical tools, the diagnostics, the 

drugs, the devices, and other technologies to enable us to respond 

to a set of naturally and deliberately caused threats, whether it’s 

pandemic flu or a nuclear, radiological, chemical, or biological attack, but the kinds of threats that could really be catastrophic in 

their implications for health and stability in our country. 

We do work closely with DOD and other components of government in terms of our activities. But we are a critical link in the 

chain. Whether it’s a product for DOD or a product for civilian use, 

FDA standards review and approval is necessary for use. Through 

this program, which has sort of three main pillars—one is to make 

sure that we have the best possible review systems for dealing with 

these often complex products, that we have the underlying science 
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to enable us to deal with these products, and that we have really 

the updated legal and regulatory framework for dealing with medical countermeasures. 

In all these areas there are complexities that may not exist in 

other domains, because sometimes you’re talking about a disease 

that actually doesn’t occur naturally in nature and where you can’t 

possibly expose people to see if your drug or your diagnostic works 

and there may not be an animal model. So we have to be very flexible in our regulatory pathways. We have to develop new science, 

whether it’s the appropriate models or innovative clinical trial 

strategies, to really ask and answer important questions about 

safety and efficacy, and then of course working with the companies 

that might be developing some of these new products. Because of 

an increased level of scientific and regulatory uncertainty, our ability to work closely with them really matters. 

So this program is very, very important. I think that’s recognized 

by all of our partners in government and outside. We have really 

been trying to work closely with the DHS and DOD to really identify what are the critical threats, what are the gaps in terms of 

available products, and what’s needed to address those. 

In this budget request for fiscal year 2013, one of the areas of 

critical focus is in fact on the warfighter and the need for additional products in some key areas that have to do with trauma sustained in the battlefield, and also the potential threat of chemical, 

biological, radiologic, and nuclear exposures. 

Senator BLUNT. Very good. 

Mr. Chairman, I think that’s all I have for today. 

Senator KOHL. Thank you very much, Senator Blunt. 

We’d like to thank you, Dr. Hamburg, for being with us today. 

ADDITIONAL COMMITTEE QUESTIONS

Members of the subcommittee can submit questions in a week’s 

time, by Thursday, April 26, and we’d appreciate your response 

within 1 month of our submitting those questions to you. 

Dr. HAMBURG. We certainly will. 

Senator KOHL. Thank you so much. 

[The following questions were not asked at the hearing, but were 

submitted to the Department for response subsequent to the hearing:] 

QUESTIONS SUBMITTED TO DR. MARGARET HAMBURG

QUESTIONS SUBMITTED BY SENATOR HERB KOHL

FOOD SAFETY

Question. Dr. Hamburg, this budget request assumes $220 million in additional 

funding that theoretically would be used to implement the Food Safety and Modernization Act. However, that funding increase would come in the form of a new 

user fee that has already been rejected by the Congress and that essentially has 

no chance of being authorized this year. So what that really means is that this 

budget doesn’t include any funding increase to implement the Food Safety and Modernization Act, which is of great concern to me. 

If this new user fee isn’t authorized, and at this point it appears it won’t be, what 

does that mean for FDA’s ability to implement the food safety law? What won’t happen? 

Answer. The FDA Food Safety Modernization Act (FSMA) envisions a modern new 

food safety system that is prevention-oriented, science- and risk-based, and efficient. 
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However, it cannot be fully realized without the proposed fiscal year 2013 resources. 

If FDA does not receive the additional resources recommended in the fiscal year 

2013 budget, then implementing FSMA will be significantly delayed or limited in 

several priority areas. Specifically, in the absence of the funding proposed for fiscal 

year 2013, FDA must delay its implementation of preventive controls because it will 

have limited capacity to develop guidance, conduct outreach and provide sciencebased technical assistance to industry, and retrain FDA and State inspection forces. 

FDA will also experience delays in its ability to create the new import oversight system required by FSMA and fulfill the FSMA vision of an effective, credible food safety system that uses the best modern tools to prevent food safety problems. 

Question. Assuming we are working under the same budget restraints as you are, 

please send us information shortly on what the highest priority activities are that 

would have been funded with the user fees. 

Answer. Priority FDA activities for implementing the FDA Food Safety Modernization Act would include continuing to focus on rulemaking to implement 

FSMA. FDA would also prioritize funding for the national integrated food safety 

system in the form of State grants, contracts, or cooperative agreements with regulatory and public health partners to improve, strengthen, and standardize regulatory activities among all partners as mandated by FSMA. As FDA enhances its 

risk-based decisionmaking efforts, another priority area for FDA is improving 

knowledge management tools for risk analysis, such as iRisk and iPrioritize, and investing in innovative information technology that will provide a systematic and 

transparent approach to identify, characterize, and evaluate food safety risks 

throughout the food supply system and to evaluate the potential impact of control 

measures or intervention strategies. Finally, FDA will further expand planning and 

response tools and systems to collect information for surveillance and outbreak detection, from traceback, and for post-response activities. This effort will allow FDA 

to identify trends and improve the effectiveness of future response and prevention 

activities. 

MEDICAL COUNTERMEASURES

Question. The budget request includes a small increase of $3.5 million for your 

Medical Countermeasures Initiative, which helps FDA work to develop drugs, vaccines, diagnostics, and other medical products needed to respond to chemical, biological, and other threats and emerging infectious diseases. Congress provided $20 

million last year for this initiative. 

Can you talk about what you have accomplished so far, and what you plan to do 

this year? 

Answer. We have made significant progress in implementing FDA’s Medical Countermeasures Initiative (MCMi). Key accomplishments include establishing action 

teams to identify and help resolve challenges to developing multiplex diagnostic 

tests and medical countermeasures (MCMs) for acute radiation syndrome, 

warfighter-trauma care, and at-risk populations such as children and pregnant 

women. We have also established an action team to develop strategies to assess 

MCM safety and performance during public health emergencies. 

FDA held workshops on developing and evaluating next-generation smallpox vaccines, regulating multiplex diagnostic tests, and ethical and regulatory challenges 

for MCMs in pediatric populations. FDA also held advisory committee meetings on 

smallpox drugs, MCMs for pneumonic plague, and antimicrobial medkits. These efforts have assisted us in establishing clear regulatory pathways for a next-generation smallpox vaccine, smallpox drugs, and multiplex diagnostic tests. 

Additionally, FDA finalized a pre-emergency use authorization package for an 

acute radiation syndrome MCM that is in strategic national stockpile, which will 

help enable rapid distribution in a radiological or nuclear event. FDA also launched 

a rigorous MCM regulatory science program, a program to qualify animal models, 

and a multifaceted MCMi professional development program. 

Our fiscal year 2012 MCMi priorities include sustaining FDA action teams and 

the MCM regulatory science program, with a focus on critical regulatory gaps and 

emerging technologies. We plan to strengthen our MCM regulatory science partnerships with academia and U.S. Government partners. And we plan to identify and 

communicate best review practices for MCMs across FDA and to re-issue draft guidance on addressing efficacy under the Animal Rule. 

FDA will also be holding workshops on developing animal models of pregnancy 

for MCM development and on radiation biodosimetry. FDA also plans to enhance 

pre-event planning and our process for rapid deployment of MCMs. Finally, FDA 

will continue our professional development program and expand our outreach activities. 
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Question. With resources becoming more limited every year, but the need for this 

work continuing as threats evolve and change, how do you prioritize to ensure that 

you’re using the money in the most effective way? 

Answer. FDA is working very closely with our U.S. Government partners through 

the Department of Health and Human Services’ interagency Public Health Emergency Medical Countermeasures Enterprise (Enterprise) to build and sustain the civilian MCM programs necessary to respond to public health emergencies. FDA is 

fully engaged with our enterprise partners at all levels to help develop and stay 

abreast of near-, mid-, and long-term MCM priorities and requirements and to ensure that our activities and investments are aligned with Enterprise goals and priorities, which are driven by threat and risk assessments. For example, FDA subject 

matter experts and senior leadership participate in the various Enterprise partner 

committees and working groups that develop MCM requirements, plans, priorities, 

and policies and that conduct program oversight and integration. 

FDA has also engaged Enterprise partners in implementing our Medical Countermeasures Initiative (MCMi) to ensure appropriate alignment with Enterprise priorities. For example, we have established a steering committee comprised of Enterprise partners to peer review research proposals for our MCM regulatory science 

program. This steering committee ensures that the regulatory science research that 

we fund is in alignment with Enterprise MCM priorities and focused on critical gaps 

or important emerging technologies. 

We also regularly meet with senior leadership at the Department of Defense to 

coordinate MCM activities and to ensure that our investments are appropriately 

aligned to Department of Defense MCM priorities and goals. 

CHINA IMPORT INITIATIVE

Question. The budget request includes $10 million to increase FDA’s inspection capabilities in China, as well as work with the Chinese regulators and industry on 

maintaining U.S. quality and safety standards. You noted previously that the number of shipments of FDA-regulated products from China increased by 62 percent 

from 2007 to 2011, so the emphasis there is understandable. 

Is the FDA working alone on this, or is this part of a larger Government initiative? 

Answer. With reference to increased FDA staffing in China, FDA is working with 

Chinese regulators and the U.S. Department of State. On the broader topic of imported commodities originating from China, FDA continues to work with other U.S. 

Federal agencies, including the U.S. Departments of Agriculture, Homeland Security, and Commerce, the Office of the U.S. Trade Representative, other agencies 

within the U.S. Department of Health and Human Services, as well as other Federal counterparts, with U.S. State regulatory agencies and with other foreign regulatory counterparts. As part of a comprehensive strategy to strengthen trade enforcement and enhance trade related inspections, the fiscal year 2013 budget includes an additional $10 million to expand FDA’s presence in China and ensure the 

safety of imports before they enter the United States. As growth in imports of FDAregulated products continues to increase, and such products travel through increasingly complex supply chains, FDA continues to leverage relationships with relevant 

stakeholders to fulfill our mission to protect the health of American consumers. 

Question. The proposal would add 16 additional inspectors based in China, and 

three analysts based in the United States. That averages out to over half a million 

dollars for each additional person—that is a lot of money, so you must have additional plans for these funds. 

How else will this $10 million be used? Specifically, how do you plan to enhance 

Chinese understanding of U.S. standards besides hiring additional inspectors? 

Answer. While the vast majority of work done by new proposed staff will be in 

the area of inspections, FDA will use some funding for workshops, conferences, and 

strategic seminars that will further our efforts to ensure that Chinese manufacturers comply with relevant FDA requirements for safety and quality. The new staff 

will work to expand FDA’s capacity-building efforts to strengthen China’s regulatory 

capacity and will provide the information, tools, and training that will enhance the 

safety of FDA-regulated products exported from China to the United States. 

FDA’s primary goal of increasing staff in China is to enhance compliance with relevant FDA regulations and requirements for FDA-regulated goods exported from 

China. Inspections can drive increased compliance, as can strategically targeted 

training and capacity building. Often, these activities complement one another. In 

China, we have used information from investigations performed by in-country inspectors to undergird and inform our strategy for capacity-building. The overarching 
126 

goal of these training activities is to encourage Chinese manufacturers to implement 

measures to ensure that their products meet FDA requirements. 

Question. Is this a scalable initiative? 

Answer. The fiscal year 2013 China Initiative contains additional positions to 

meet FDA’s expanding workload in China. We hope that the following background 

will highlight how FDA has already been scaling up activities in China. 

Each year since opening our China Office, FDA has set year-on-year records for 

numbers of FDA inspections in China. In fiscal year 2008, FDA performed 87 inspections in China. By fiscal year 2011, that number had grown to 245. Since 2009, 

two food investigators and two medical products investigators have served within 

FDA’s China Office. These staff has helped FDA achieve these significant increases 

in inspection numbers. Our inspections abroad will continue to increase under the 

requirements of the Food Safety Modernization Act and the Food and Drug Administration Reform Act. 

Question. What work, if any, have you done with the Chinese Government in 

preparation for this initiative? 

Answer. FDA has initiated discussions with the Chinese Government and the U.S. 

Department of State to seek approval for this increase in FDA staffing in China. 

The FDA Commissioner has also informed her regulatory counterparts in China 

through written correspondence of FDA’s interest in expanding its inspection presence in China. The staff that established the FDA China Office in 2008 included 

four investigators. This cadre’s work has provided Chinese regulators with ample 

evidence of both the seriousness with which FDA regards its mission to protect U.S. 

public health and of the mutual benefit that the presence of FDA inspectors in 

China can bring. 

DRUG SHORTAGES

Question. Dr. Hamburg, we have all been reading in the news recently about the 

large number of drug shortages, often for critical diseases such as cancer and heart 

disease. In your statement you note that in 2011, FDA prevented at least 195 drug 

shortages. This is impressive, but still the number of shortages continues to grow. 

In fact, they tripled from 2005 to 2010, and reached record levels in 2011. Recently, 

legislation has been introduced that would require drug companies to notify FDA 

of impending shortages so your agency can begin to take action sooner. 

Understanding this is a complicated issue, can you speak to what you believe are 

some of the underlying causes of this increase in shortages? 

Answer. In 2010, there were 178 drug shortages reported to FDA, 132 of which 

involved sterile injectable drugs. In 2011, FDA continued to see an increasing number of shortages, especially those involving older sterile injectable drugs. Two hundred and fifty-one shortages were recorded for 2011, and 183 of these involved sterile injectable drugs. These shortages include cancer drugs, anesthetics used for patients undergoing surgery, drugs needed for emergency medicine, and electrolytes 

needed for patients on IV feeding. 

A number of different factors contribute to the shortage of sterile injectables and 

other drugs, including manufacturing issues and economic factors. Some companies 

have decided to discontinue making their products for business reasons, others have 

had problems with their raw material suppliers, and some have shown manufacturing deficiencies that compromise the safety and efficacy of their products. Even 

when there is more than one firm making a drug, there is limited manufacturing 

capacity for sterile injectables at each manufacturer. When one firm has a delay or 

other problem, it is difficult for the remaining firms making the drug to increase 

production quickly to avoid or address a shortage. 

FDA works to find ways to mitigate drugs shortages. However, there are a number of factors that can cause or contribute to drugs shortages that are outside of 

FDA’s control. Also, FDA has no legal authority to compel drug manufacturers to 

manufacture or continue to manufacture a drug. 

Question. In what ways could we be of assistance to you as you try to deal with 

this issue? Are there additional tools that you could use? 

Answer. Early notification from manufacturers to FDA can help prevent drug 

shortages in certain circumstances. With earlier notification, FDA may be able, for 

example, to work with the company on the issues causing the shortage before the 

supply is depleted and may be able to contact other manufacturers of the drug to 

encourage them to increase production. 

FDA is doing everything it can, within the agency’s authority, to mitigate and 

manage shortages as they occur. However, many drug shortages arise from quality 

or other issues experienced during the manufacturing process. Manufacturers therefore play a large role in preventing or mitigating potential shortages by having rig-
127 

orous quality assurance and risk management processes in place and contingency 

plans to respond to a drug shortage—for example, redundancy built into manufacturing capabilities to allow continued production even if the main manufacturing 

site experiences problems, or identification of alternative active pharmaceutical ingredient and component suppliers in the event the original supplier becomes unavailable. 

FDA supports provisions encouraging manufacturers to institute such policies, 

consistent with our recommendations in the draft guidance for industry, Notification 

to FDA of Issues that May Result in a Prescription Drug or Biological Product 

Shortage. 

LAB FUNDING

Question. The largest requested budget increase is $17.7 million to outfit a new 

biodefense and life sciences laboratory complex currently being constructed at FDA’s 

White Oak facility. This new lab will support essential research by FDA scientists 

to protect patients and consumers. I understand that construction is nearly complete, and this funding will fully equip the lab and make the complex operational 

so research can begin there in 2014. 

If this funding is provided, will there be any additional costs beyond this, or will 

this particular project be complete? 

Answer. The increase of $17.7 million for fiscal year 2013 is required for special 

facility-related costs for outfitting, commissioning, and providing the essential 

equipment and infrastructure for the laboratories to be certified and operational. In 

subsequent years, FDA must determine how to replace aging laboratory equipment 

that cannot be moved from the existing laboratories and other equipment issues. 

Question. What will the effect be if this funding is not provided, or is only partially provided? Is this a scalable project? 

Answer. These costs have a direct relationship to the highly specialized construction of state-of-the-art laboratories. There are unique, one-of-a-kind installations 

and commissioning requirements needed to ensure acceptable operation of these facilities. The BSL–3 labs need to be in place and operational in 2013 to ensure they 

are certified for occupancy. Delay in certification will lead to the reduced ability to 

make advances in regulatory science, including efforts by scientists to do applied research and support regulatory decisionmaking in the areas of medical countermeasures and complex and novel product applications involving stem cells, tissues, 

blood and blood products, and vaccines. This building was designed in support of 

the consolidated Center for Biologics Evaluation and Research (CBER) Life 

Sciences-Biodefense Lab requirement to meet FDA’s mission. If funding is not provided and commissioning is not completed as scheduled, notifications will have to 

be provided to landlords of the existing facilities and leases will have to be extended. 

This will lead to rental payments on both facilities causing the programs to absorb 

these added costs. This project is not a scalable project. If the full $17.7 million is 

not received, certification will not be achieved and the facility will not be operational. 

Question. Is this the FDA’s top priority for this fiscal year? 

Answer. This is FDA’s top facilities priority in the fiscal year 2013 budget. 

USER FEES

Question. Dr. Hamburg, in your statement, you point out that of FDA’s total budget request, 98 percent of the requested increase will come from user fees, including 

current user fees and seven new proposed fees. 

Can you speak briefly about the status of each of the new user fees? 

Answer. The following is a summary of the status of FDA’s new user fees: 

PRESCRIPTION DRUG USER FEE AMENDMENTS OF 2012

The proposed Prescription Drug User Fee Amendments of 2012 (PDUFA), Generic 

Drug User Fee Amendments of 2012 (GDUFA), and Biosimilar User Fee Act of 2012 

(BsUFA) were submitted to the appropriate authorizing committees of the Congress 

on January 13, 2012, and are currently being considered by Congress. The draft legislative package for the Medical Device User Fee Amendments of 2012 (MDUFA) 

was submitted to Congress on April 20, 2012; this is also currently being considered 

by Congress. 

MEDICAL PRODUCT REINSPECTION

Regarding the Medical Products Reinspection User Fee, the Administration has 

not submitted a proposal for medical product reinspection user fees at this time. 
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However, FDA is ready to work with Congress and stakeholders to advance this 

user fee program. A fee structure and related proposals would be developed through 

negotiations with industry and other stakeholders. 

COURIER

Regarding the International Courier User Fee, the Administration has not submitted a proposal for authorizing this user fee at this time. However, FDA is ready 

to work with Congress and stakeholders to advance this user fee program. A fee 

structure and related proposals would be developed through negotiations with industry and other stakeholders. 

COSMETICS

FDA has met with industry representatives to discuss their ideas for possible new 

authorities, such as mandatory facility registration and ingredient listing. FDA is 

ready to work with Congress and stakeholders to advance this user fee program. A 

fee structure and related proposals would be developed through negotiations with 

industry and other stakeholders. 

FOOD CONTACT NOTIFICATION USER FEE

The Administration has not submitted a proposal for authorizing this user fee at 

this time. The Administration has not submitted a proposal for authorizing this user 

fee at this time. FDA is ready to work with Congress and stakeholders to advance 

this user fee program. Industry has previously expressed support for user fees to 

ensure continuation of the Food Contact Notification (FCN) program. A fee structure 

and related proposals would be developed through negotiations with industry and 

other stakeholders. 

FOODS AND VETERINARY MEDICINE PROGRAM

Regarding the Food Establishment Registration Fee, the Administration has not 

submitted a proposal for authorizing this user fee at this time. However, FDA is 

ready to work with Congress and stakeholders to advance this user fee program. A 

fee structure and related proposals would be developed through negotiations with 

industry and other stakeholders. 

FDA recommends that the proposal authorize the agency to establish a system of 

food establishment registration user fees to support food safety activities. The programs and activities that the fee will support are: Establishing new, effective, and 

comprehensive food safety standards, establishing a new program for import safety, 

increasing the number and efficiency of inspections, launching an integrated national food safety system with States and localities, expanding research activities, 

including improved data collection and risk analysis, and maintaining a current facilities registration database and supporting other information technologies to improve FDA’s risk-based decisionmaking capabilities. 

Question. I do understand that user fees allow FDA to raise additional funds without additional budget authority, but it is striking that so much of your proposed 

budget growth is slated to come from new fees, which obviously must be negotiated 

with the affected industries. 

Does this concern you? Do you believe FDA could be hampered in its ability to 

function when so much of its budget is dependent upon fees that must be paid by, 

and therefore agreed to, by the industries FDA regulates? 

Answer. The job of protecting patients and consumers requires stable and adequate sources of funding. FDA has benefited from user fees since the introduction 

of PDUFA in 1993. It is only appropriate that the industries who directly benefit 

from the actions taken at FDA pay a moderate fee to increase capacity at the agency. At a time when the availability of budget authority to support FDA programs 

is constrained, user fees provide an essential source of funding to conduct product 

reviews and ensure product quality and safety. 

DRUG LABELING DURING PREGNANCY

Question. I have been working with you and the FDA to improve drug labels for 

women during their pregnancies. As you know, an estimated 75 percent of pregnant 

women use about five prescriptions or over-the-counter drugs during their pregnancies. The FDA proposed rules to make drug labeling easier to understand and 

easier to use for women during pregnancy. This process began 15 years ago with 

the FDA’s Pregnancy Labeling Task Force and led to a proposed rule in 2008. As 

of today, 4 years later, these rules have not yet been finalized. 
129 

In previous inquiries, you told me that pregnancy drug labeling is a priority for 

FDA. If this rule is a priority, can you commit to me that FDA will finalize these 

labeling requirements by the end of this year? 

Answer. FDA is committed to finalizing a rule that will improve drug labeling for 

women who are pregnant, and we are diligently working to issue this important 

rule. Because of the complexity of this rule and the time required to review and finalize this rule, it is not possible to say whether the final rule will publish during 

2012. 

However, we want to emphasize that, in addition to finalizing the pregnancy and 

lactation rule, FDA has other important and ongoing projects related to the health 

of pregnant and lactating women. For example, on April 30–May 1, 2012, as part 

of the FDA Medical Countermeasures Initiative (MCMi), FDA held a ‘‘Public Workshop on Developing Animal Models of Pregnancy to Address Medical Countermeasures for Influenza.’’ 

In addition, FDA has issued five scientific guidance documents relating to pregnancy and lactation that support women’s health: 

—Integration of Study Results to Assess Concerns about Human Reproductive 

and Developmental Toxicities (final guidance); 

—Establishing Pregnancy Exposure Registries (final guidance); 

—Pharmacokinetics During Pregnancy and Lactation (draft guidance); 

—Evaluating the Risks of Drug Exposure in Human Pregnancies (final guidance); 

and 

—Clinical Lactation Studies-Study Design, Data Analysis, and Recommendations 

for Labeling (draft guidance). 

SEAFOOD CONSUMPTION DURING PREGNANCY

Question. In 2004, your agency published an advisory to pregnant women on seafood nutrition, which, unfortunately, had a negative consequence and was interpreted as a warning for all Americans to limit or stop consuming seafood altogether 

based on concerns over mercury. According to FDA’s own data, pregnant women 

have reduced their seafood consumption to less than 2 ounces per week since that 

advisory was issued. The updated U.S. Dietary Guidelines for Americans, released 

over a year ago, recommend that pregnant women eat at least 8 ounces of seafood 

per week—a quadrupling of current levels. 

Given the stark scientific evidence that women of childbearing years, pregnant 

women, and mothers with young children are eating too little seafood for their 

health and their babies’ health, when will FDA finalize and publish an updated advisory for seafood consumption for pregnant women? 

Answer. FDA agrees that the fish consumption advice issued in 2004 jointly by 

FDA and the Environmental Protection Agency (EPA) is in need of an update. We 

have been working together to issue draft new advice for public comment this year. 

Question. One of the problems with the current FDA advice to pregnant women 

is it takes a ‘‘risk only’’ approach that has been misinterpreted by consumers and 

the media as Federal advice to reduce or stop seafood consumption. 

What is the FDA doing to ensure that the updated advice is drafted in a way that 

includes both benefits and risks and is understandable to the average consumer? 

Answer. The Administration currently has several conflicting opinions on seafood 

advice to pregnant women. NOAA recently released a video called ‘‘Fish, Mercury, 

and Nutrition: The Net Effects’’ which includes a virtual ‘‘who’s who’’ of leading Government and academic scientists that lay out the science of why eating fish is important for all Americans, especially pregnant and breastfeeding moms. The scientists in the video question the 12 ounce consumption limit created by the FDA 

stating that it limits the benefits accrued from seafood consumption. The Washington Post ran an article on the front page of the Health section earlier this month 

that highlighted how the current conflict in seafood advice is confusing consumers. 

Question. How is the Administration working together to ensure that there is consistent advice across all Federal departments and agencies to pregnant women on 

the consumption of seafood during pregnancy? 

Answer. FDA agrees that the fish consumption advice issued in 2004 jointly by 

FDA and the Environmental Protection Agency (EPA) needs an update. FDA and 

EPA have been working together to issue draft new advice for public comment this 

year. 

As you point out, the 2004 advice was risk oriented, in that its primary objective 

was to limit exposure to methylmercury during pregnancy. Methylmercury is a 

neurotoxin and the developing fetus can be particularly sensitive to it. Since that 

advice issued, a number of research studies have consistently indicated that fish 

consumption during pregnancy can benefit fetal neurodevelopment even though the 
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fish contain at least some methylmercury. The research further indicates that for 

most fish, greater consumption can be more beneficial than less consumption, at 

least up to some point. Evidence shows, however, that the methylmercury in the fish 

can affect the size of the benefit, or, if exposure is high enough, whether there is 

a benefit at all. Too much methylmercury could still lead to neurodevelopmental 

deficits. 

Taking these findings into account, the Departments of Agriculture and Health 

and Human Services updated the Dietary Guidelines for Americans that the two 

agencies publish every 5 years to recommend that pregnant women eat more fish. 

As you noted, the Dietary Guidelines for Americans 2010 essentially modified the 

2004 FDA–EPA advice by adding a consumption target of 8–12 ounces per week of 

a variety of fish lower in methylmercury to promote cognitive development. The 

2004 advice does not contain a consumption target and, in that respect, is now inconsistent with the advice in the Dietary Guidelines for Americans 2010. 

In another development, FDA has performed a quantitative assessment of the net 

effects of fish consumption during pregnancy on fetal neurodevelopment that has 

produced results supportive of a consumption target in the range recommended in 

the Dietary Guidelines for Americans 2010. The FDA assessment was published in 

draft in 2009 and is now being prepared for publication in final form. 

Updated advice should be consistent with the 8–12 oz. per week consumption target for pregnant women for commercial fish as is now recommended in the Dietary 

Guidelines for Americans 2010. That objective has been fully recognized by FDA and 

EPA in their joint effort to update their advice. Although updated advice could retain a short list of fish that women should probably avoid during pregnancy—as the 

Dietary Guidelines for Americans 2010 now does—the advice should also be crafted 

in a way that does not scare women away from a consumption target well beyond 

what most women are now eating. Median fish consumption by pregnant women in 

an FDA survey was 1.8 ounces per week, as you have noted. 

It is also imperative that the advice have a solid scientific and analytical basis 

that is in the public domain. We expect that basis to consist of the research published since 2004, the FDA assessment as described above, and another assessment 

of the net effects of fish consumption published recently by the Food and Agriculture 

Organization of the United Nations and the World Health Organization. That assessment produced results consistent with the FDA assessment. 

SEAFOOD SAFETY

Question. Dr. Hamburg, the safety of imported seafood is a significant concern. 

FDA does not currently have the resources to inspect seafood at the point of origin, 

and is inspecting less than 2 percent of imported seafood. However, we understand 

that many seafood buyers already require testing of product in the country of origin, 

and use third-party organizations, including qualified laboratories, to do this testing. This does have the advantage of detecting unsafe product before it enters the 

United States. Last year, in both the Senate Report and Conference Statement of 

Managers, we directed FDA to develop a comprehensive program for imported seafood. 

What are you doing to implement this directive? In particular, does FDA currently 

have the authority to recognize third-party inspection and testing in seafood, and, 

if so, are you giving this concept any consideration? 

Answer. FDA regulates imported seafood by, among other things, reviewing U.S. 

Customs entries, conducting field exams, collecting samples for laboratory analysis, 

and placing products and processors with a history of problems on detention without 

physical examination—requiring the importer to demonstrate compliance, usually 

through third-party analysis, for future shipments. These procedures address the 

control of pathogens, filth, parasites, decomposition, animal drugs, bio-toxins, and 

illegal food and color additives in imported fish and fishery products, among other 

hazards. 

The implementation of the Seafood Hazard Analysis Critical Control Program 

(HACCP) regulation in 1997 initiated a landmark program designed to increase the 

safety that U.S. consumers already enjoyed and to reduce seafood related illnesses 

to the lowest possible levels. 

Under the HACCP system of controls, the importer and the foreign processor 

share the responsibility for seafood safety. Foreign processors that ship fish or fishery products to the United States must operate in conformance with the seafood 

HACCP regulation. In addition, importers are required to take steps to verify that 

their imported products are obtained from foreign processors that comply with the 

seafood HACCP regulation. Compliance is verified through inspections. 
131 

The FDA Food Safety Modernization Act (FSMA) directs FDA to establish a program for accreditation of third-party auditors to conduct food safety audits to assess 

foreign food firms for compliance with FDA requirements. Based on audit results, 

accredited third-party auditors may issue certifications to foreign food firms. In addition, FSMA authorizes FDA to set up a program for accredited laboratories to perform food testing. Neither program is specific to seafood or to any other particular 

commodity. However, the FSMA requirement is consistent with the report language 

asking FDA to develop a comprehensive program for imported seafood. 

BLOOD PLATELETS

Question. A recent study in Transfusion showed that the vast majority of 

bacterially contaminated platelet units are being missed by culture testing performed by the blood collectors and that testing on the day of transfusion detected 

more than twice as many contaminated units in an inventory where the culture 

positives had already been removed. While patients can be assured that there is virtually no risk of viral contamination in transfused blood products in the United 

States, the same cannot be said for bacterial contamination. It is estimated that 1 

of every 3000 units of platelets being transfused is contaminated with bacteria at 

clinically significant levels. What is the FDA doing to make the medical community 

aware of the safety risks to transfusion patients from bacterially contaminated blood 

platelets? 

Answer. FDA has the vital role of ensuring the safety of the approximately 17 

million donations of Whole Blood and Red Blood cells collected from approximately 

11 million donors each year. These Whole Blood donations are processed into approximately 23 million components, including platelets, which are transfused to approximately 4.5 million recipients 

Bacteria may contaminate platelet products if bacteria are introduced during collection or through the presence of transient bacteremia in blood donors. Because 

platelets are stored at room temperature, if the product is contaminated, the bacteria can proliferate throughout the storage period. To improve the safety of platelet 

products, collection centers have implemented a number of measures over the past 

several years. 

FDA has been diligent in its research and regulatory efforts to address and improve the safety of platelet transfusion. FDA has sponsored numerous workshops 

and advisory committee meetings and taken regulatory actions to address issues related to the bacterial contamination of platelets. Dating back to 1986, FDA reduced 

the shelf life of platelets from 7 days to 5 days based on reports of septic reactions. 

In 2003, FDA approved blood bags that facilitate diversion of the first 15 ml of blood 

collected into a diversion pouch in order to reduce the possibility of bacterial contamination. 

FDA has also cleared several bacterial detection devices for the quality control of 

platelet products. For example, in 2009 FDA cleared the Verax Platelet PGD® Test 

System for use as a quality control test for the detection of bacteria after platelets 

derived from whole blood have been pooled, just prior to a patient platelet transfusion. However, because of the complexity involved with the implementation of this 

test and its variable sensitivity in the detection of bacteria, further consideration 

is warranted prior to recommending its routine use. Given the continued risk of bacterial contamination of platelets, FDA will continue to collaborate with the transfusion community and will consider implementing additional measures that may 

further improve the safety of platelet transfusions as technology develops. 

RARE AND NEGLECTED DISEASES

Question. The Food and Drug Administration plays an essential role in capacitybuilding abroad to help build strong regulatory authorities in other nations. In addition, FDA’s funding for new global health tools and its leadership in reviewing and 

licensing global health technologies is key to sustaining and supporting American 

investment in this area. 

In the 2010 Appropriations legislation for FDA, Congress directed FDA to establish review groups on rare diseases and on neglected diseases of the developing 

world and to report to Congress on the agency’s development of guidance for development of new technologies in these areas. 

Would you please provide the Committee an update on the monitoring, evaluation 

and progress of the ‘‘Pathway to Global Product Safety and Quality’’? In the update, 

please provide the following information in discussing the review of drugs and other 

products for neglected diseases: 

—The frequency and barriers to the use of priority review; 
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—Ways to work with sponsors to facilitate expanded access to investigational 

products; 

—Ways FDA can increase coordination and interaction with the World Health Organization, European Medicines Agency, and other international regulatory 

agencies on these drugs and products; 

—Ways FDA can implement mechanisms to enhance collaboration between the 

Food and Drug Administration and National Regulatory Authorities in developing countries; 

—Ways FDA can increase coordination among individual drug, biological product, 

and device review divisions across Food and Drug Administration centers to 

support the development and monitoring of safe and effective medical products 

for rare and neglected diseases. 

Answer. The Pathway to Global product Safety and Quality is a major shift in 

the regulatory posture of intercepting harmful or contaminated medical products, to 

anticipating and preventing the arrival of violative and unapproved goods in the 

United States. As part of its global transformation, FDA is building an international 

operating model that relies on enhanced intelligence, information-sharing, data-driven risk analytics and the smart allocation of resources through partnerships. The 

following information addresses the separate issue of review of products for rare and 

neglected tropical diseases and the collaboration with stakeholders to develop and 

monitor drug development in this area. 

The Frequency and Barriers to the Use of Priority Review 

FDA has an existing priority review policy that is described in our Manual of Policy and Procedures. Products that qualify for priority review based on demonstrating 

an advantage will receive priority review based on the merits of the drug. FDA also 

prioritizes review of applications for antiretroviral drug products associated with the 

President’s Emergency Plan for AIDS Relief (PEPFAR Program) drugs, as discussed 

below, and applications for drugs that are in short supply. There are no barriers 

to the application of the priority review policy. 

The Tropical Disease Priority Review Voucher Program 

Regarding the Tropical Disease Priority Review Voucher program, to date, that 

program, implemented in 2007, appears to have provided limited, if any stimulus 

to development of drugs for neglected tropical diseases. One voucher has been issued 

and redeemed to date. This voucher was received for the approval of artemetherlumefantrine tablets—Coartem®—for treatment of malaria, and the voucher was redeemed for the review of canakinumab for treatment of gouty arthritis. 

Ways To Work With Sponsors To Facilitate Expanded Access to Investigational Products 

FDA has specific provisions in its regulations, which were updated just a few 

years ago, to facilitate access to investigational drugs when the primary purpose is 

to diagnose, monitor, or treat a patient’s disease or condition. The details in FDA 

regulations appear at 21 CFR 312 Subpart I—Expanded Access to Investigational 

Drugs for Treatment Use. This revision of the investigational new drug (IND) regulations, promulgated in 2009, was intended to clarify the procedures for obtaining 

investigational drugs for treatment use, by describing in detail three categories of 

expanded access to investigational drugs: Provides clarity for sponsors in characterizing expanded access of investigational products for individual patient use, for use 

in intermediate-sized patient populations, and for use in a treatment IND or treatment protocol. FDA also issued a companion rule at that time on charging for investigational products, to clarify and expand the number of scenarios where charging 

would be permitted. 

Ways FDA Can Increase Coordination and Interaction With the World Health Organization (WHO), European Medicines Agency (EMA), and Other International 

Regulatory Agencies on These Drugs and Products 

The Center for Drug Evaluation and Research (CDER) interacts with WHO, EMA, 

and other international regulatory agencies on an increasingly frequent basis on a 

variety of review issues. These interactions have promoted a familiarity with one 

another’s programs and processes and lead to increased collaboration on numerous 

review-based activities. 

An example is our collaboration with WHO on the review of antiretroviral drug 

products associated with the President’s Emergency Plan for AIDS Relief (PEPFAR) 

program. FDA actively worked with companies to facilitate the development and review of applications for fixed dose combination products, in order to help ensure consistent availability of these products under PEPFAR for use in treatment programs. 
133 

FDA and the European Medicines Agency collaborate on a regular basis on orphan product designation and development. There is a common application form for 

submission to both agencies for orphan designation. Sponsors may file a common 

Annual Report to both agencies. Sponsors are encouraged to seek parallel scientific 

advice on orphan product development from both agencies. FDA most recently met 

with the European Union and Japanese regulatory agencies on the common application last February in Japan while at the International Conference for Rare Diseases 

and Orphan Drugs. 

EMA has a program involving WHO which may assist in the development of neglected diseases outside our respective territories, and FDA participates in this program when sponsors seek parallel scientific advice. 

With regard to the ‘‘Pathway to Global Product Safety and Quality’’ Report, FDA, 

EMA, European National Competent Authorities, the European Directorate for the 

Quality of Medicine, WHO, and Australia’s Therapeutic Goods Administration collaborate on information-sharing and joint inspections of the manufacturers of active 

pharmaceutical ingredients. The program focuses on best use of international 

inspectional resources and information to help secure the global supply chain. 

Ways FDA Can Implement Mechanisms To Enhance Collaboration Between the Food 

and Drug Administration and National Regulatory Authorities in Developing 

Countries 

Since September 2005, CDER has offered the CDER Forum for International 

Drug Regulatory Authorities every spring and fall. The first nine programs focused 

on an overview of the CDER review process and major offices. Starting with the 

10th program, the focus shifted to the review process and specifically the information posted at DRUGS@FDA to promote a more detailed understanding of the 

CDER’s Review process and the scientific disciplines involved. The CDER Forums 

are very interactive and promote the possibility of drug regulatory authorities to 

learn from one another in a collegial way. 

To date, regulators from more than 70 countries have participated. Worthy of note 

is that many countries have now included this activity in their budgets to allow staff 

to participate in the program on a regular basis. 

Interactive modules have been created from CDER Forum lectures and they may 

be found on the CDER Web site under CDER World. Details on the CDER forum 

and other activities may be found in FDA’s recently published report Global Engagement. 

Ways FDA Can Increase Coordination Among Individual Drug, Biological Product, 

and Device Review Divisions Across Food and Drug Administration Centers To 

Support the Development and Monitoring of Safe and Effective Medical Products 

for Rare and Neglected Diseases 

In 2010, the Center for Drug Evaluation and Research (CDER) established a rare 

diseases program to increase coordination among the individual offices and review 

divisions within the Office of New Drugs on the review and regulation of rare diseases and orphan products. This program is due to expand in fiscal year 2013 under 

the Prescription Drug User Fee Act (PDUFA) V, with increased staff, staff training, 

guidance, policy and advice generation, and increased coordination and outreach 

among rare disease stakeholders both within and outside of FDA. PDUFA V will 

also establish a rare disease liaison within the Center for Biologics Evaluation and 

Research (CBER) with similar responsibilities. The proposed PDUFA V legislation 

should contribute to and continue to enhance existing efforts at CDER to facilitate, 

support, and accelerate rare disease drug development. 

To help facilitate medical device applications for rare diseases, the Center for Devices and Radiological Health (CDRH) released final guidance on the Humanitarian 

Device Exemption (HDE) process in July 2010 as well as draft guidance on the Humanitarian Use Devices (HUD) designation process (with CBER and the Office of 

Orphan Product Development) in December 2011. The proposed User Fee Amendment legislation should promote increased use of the HDE pathway for devices to 

treat rare pediatric and adult conditions and further the goal of the availability of 

medical devices for pediatric populations through continued funding of the consortia 

grants for medical device development. 

Question. It is my understanding that Chagas disease is not on the list of neglected diseases as currently defined by the FDA. 

Please explain why this is not the case and how the agency could include Chagas 

disease in its list of neglected diseases in line with the WHO list of Neglected Tropical Diseases. 

Answer. In addition to the list of tropical diseases provided in section 524(a)(3), 

other infectious diseases for which there is no significant market in developed na-
134 

tions and that disproportionately affects poor and marginalized populations could be 

designated as tropical diseases by regulation (section 524(a)(3)(Q)). We have heard 

from other stakeholders in public comments to us that Chagas disease should be 

added to the list of neglected tropical diseases. FDA is considering this suggestion 

as we work through the rulemaking procedures for designating other diseases as 

tropical diseases. FDA has reviewed a list of tropical infectious diseases that are not 

specifically listed in section 524(a)(3) and will provide a discussion of why or why 

not we are to proposing to designate them as tropical diseases in the Notice of Proposed Rulemaking. 

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

ANTIBIOTICS

Question. In 2010, nearly 12.5 million kilograms of antibiotics were used in animal agriculture. It is widely believed that the vast majority of these drugs were 

given in low doses to healthy animals for the sole purpose helping them gain weight. 

The overuse of antibiotics in animals has contributed to bacteria resistance and 

new, more deadly forms of bacteria that were once easily treatable. 

Commissioner Hamburg, the Food and Drug Administration’s (FDA’s) announcement calling on drug companies to help limit the use of antibiotics given to farm 

animals is a step in the right direction. However, it is important to note that the 

new guidance is voluntary, and I have real doubts that this industry will make 

these changes willingly. 

What steps are you taking to ensure that companies that do not voluntarily revise 

their antibiotic use, cause no additional harm to human health? 

Answer. FDA is confident that the cooperative framework outlined in the draft 

Guidance for Industry (GFI) No. 213, Revising Approved Conditions of Use for New 

Animal Drugs and New Animal Drug Combination Products Administered in or on 

Medicated Feed or Drinking Water of Food-Producing Animals, will help limit the 

use of antibiotic given to farm animals, which is why we are initially pursuing this 

voluntary approach. FDA anticipates that sponsors of affected products should be 

able to complete implementation of the changes discussed in this draft guidance 

within 3 years from the date of publication of the final version of this guidance. 

FDA will continue to monitor the progress of the voluntary adoption strategy, including the progress of measures intended to facilitate an orderly and minimally 

disruptive transition. Three years after issuing the final version of GFI No. 213, 

FDA intends to evaluate the rate of adoption of the proposed changes across affected 

products. FDA will consider further action, as warranted or required, in accordance 

with existing provisions of the Food, Drug, and Cosmetic Act (FD&C Act) for those 

products that have not been updated with the recommended changes through the 

voluntary process. 

Question. How much do you expect this policy to reduce the total volume of antibiotic use, in terms of kilograms? What metrics are you using to judge the success 

of this initiative? 

Answer. At this time, FDA does not have detailed drug use data that would enable us to estimate quantitatively the reduction in the total volume of use that 

would be expected with phasing out the production or growth promotion uses of 

medically important drugs. However, FDA does believe that eliminating production 

uses and limiting remaining use to address animal disease under the direction of 

a veterinarian represents a significant change to how these drugs have been used 

for decades in animal agriculture. 

As discussed in FDA’s Guidance for Industry (GFI) No. 209, ‘‘The Judicious Use 

of Medically Important Antimicrobial Drugs in Food-Producing Animals,’’ a key objective is to limit the use of medically important antimicrobial drugs in food-producing animals to those uses that are necessary for addressing animal health needs. 

Animal health needs are to treat, control, or prevent a specifically identified disease. 

Such uses typically involve drug administration at higher, therapeutic doses, for 

shorter durations to targeted animals that have a disease or are at risk of disease. 

In contrast, production or growth promotion uses are not necessary for maintaining 

animal health. Such uses are not intended to manage any disease and typically involve administering drugs at lower drug doses for prolonged durations to entire 

herds or flocks of animals. 

FDA acknowledges the importance of assessing the effectiveness of measures intended to curb antimicrobial resistance. However, identifying appropriate metrics is 

challenging. In conjunction with finalizing its plans for implementing the recommendations outlined in GFI No. 209, FDA is considering approaches for assessing 
135 

the impact of such measures over time. This includes exploring mechanisms for enhancing the drug sales and distribution data that it already receives and other 

metrics such as data provided by the National Antimicrobial Resistance Monitoring 

System (NARMS), to track trends in antimicrobial resistance over time. 

Question. How does this announcement interact with the recent court ruling that 

will require FDA modify its approved uses of penicillin and tetracycline? 

Answer. FDA is continuing its work with the animal pharmaceutical industry, 

veterinarians, and producer and consumer groups to ensure the judicious use of 

antimicrobials of human health importance. FDA is studying the opinion and determining how this will affect the voluntary approach outlined in GFI No. 209. 

However, to the extent that the court’s decision, dated March 22, 2012, is not ultimately reversed on appeal, and if sponsors have not already voluntarily withdrawn 

the growth promotion indications for their penicillin and tetracycline drug products 

used in animal feed, the application of the court’s opinion would appear to require 

FDA to initiate mandatory withdrawal proceedings pursuant to section 512(e) of the 

FD&C Act. The Court’s opinion does not address any other medically important 

antibiotics. Thus FDA does not believe that the March 22 decision precludes FDA 

from continuing to pursue the voluntary approach to phasing out growth promotion 

uses for those other drugs. In addition, the court’s decision does not affect FDA’s 

implementation of the second principle in GFI No. 209, which uses a voluntary approach to phase in veterinary oversight for approved therapeutic uses of medically 

important antimicrobial drugs in the feed or water of food-producing animals. 

ARSENIC IN CHICKEN STUDIES

Question. Commissioner Hamburg, I was recently made aware of the John’s Hopkins Center for a Livable Future study which suggests that poultry are fed banned 

antibiotics, low levels of arsenic, caffeine, and over-the-counter drugs—all illegal— 

in an effort in fatten them up and keep the meat tender. 

This concerns me, because consumers have no way of knowing if the chicken they 

are consuming have been fed these dangerous chemicals. 

How is the FDA responding to the industry’s use of illegal chemicals in poultry? 

Answer. FDA is aware of the recent studies published in Science of the Total Environment and in Environmental Science and Technology that analyzed chicken 

feather meal for bioaccumulated levels of arsenic and certain pharmaceuticals and 

personal care products. Scientists at FDA Center for Veterinary Medicine (CVM) are 

currently working to evaluate the methods used in and conclusions drawn by these 

studies. FDA takes this kind of information very seriously and, based on the outcome of our evaluation, will act accordingly. 

FDA has conducted its own scientific investigation to determine whether the use 

of the arsenic-based animal drug, roxarsone, causes carcinogenic residues in edible 

tissues of chickens. As part of this work, FDA scientists developed an analytical 

method capable of detecting inorganic arsenic in edible tissues. FDA scientists found 

that the levels of inorganic arsenic in the livers of chickens treated with 3–Nitro, 

also known as roxarsone—were increased relative to levels in the livers of the untreated control chickens. Based on this information, FDA met with the drug sponsor, 

Alpharma LLC, a subsidiary of Pfizer Inc., and developed a plan to address the concerns raised by the study. As a result, the drug sponsor voluntarily suspended the 

sale of the product in the United States. 

In addition, FDA and the United States Department of Agriculture’s Food Safety 

Inspection Service (FSIS) and the Environmental Protection Agency (EPA) continue 

to work collaboratively to control and monitor veterinary drug, pesticide, and environmental contaminant residues in FSIS-regulated foods. FSIS, through the National Residue Program, tests meat, poultry and egg products to verify that tolerances or action levels are not violated. When FSIS identifies violations, FDA uses 

its enforcement tools to address the violation. This includes issuing warning letters 

and seizures and injunctions. Throughout the years, the two agencies have pursued 

a number of cases which have resulted in consent decrees. 

Question. What research do you have that suggests that drugs like Prozac and 

Benadryl are safe food additives or food animal drugs? 

Answer. As mentioned above, scientists at FDA’s Center for Veterinary Medicine 

(CVM) are currently working to evaluate the study that reported finding residues 

of these drugs and other compounds in feather meal. At this time, FDA has no evidence that U.S. poultry producers are adding these chemicals to animal feed and 

it remains unclear whether other factors are involved, including exposure to environmental sources of these compounds. As this is the first study to examine feather 

meal for these types of compounds, additional research is needed to verify the results and to investigate exposure sources. 
136 

FOOD SAFETY

Question. In May 2011, the U.S. Department of Agriculture (USDA) received a petition to declare antibiotic-resistant salmonella as an ‘‘adulterant’’ in poultry. This 

would mean that products containing these bacteria could not be sold. I would support any decision that protects consumers from dangerous pathogens, particularly 

if that decision allowed USDA to recall contaminated poultry before consumers get 

sick. 

Is FDA collaborating with USDA on this issue of antibiotic-resistant organisms 

in meat? 

Answer. Yes, FDA and USDA have worked together on this issue since 1997 when 

USDA joined FDA’s NARMS program. USDA Hazard Analysis and Critical Control 

Point (HACCP) samples, which are tested for antibiotic resistance, include retail 

meat products in the sampling design. The results of this work are published in the 

NARMS annual reports on FDA’s Web site. In conjunction with HACCP sampling, 

FDA continues to collaborate with USDA on the collection of additional isolates that 

are more representative of food animal production. Additionally, with respect to 

monitoring the use of antibiotics in other nations, FDA works in conjunction with 

USDA’s Food Safety Inspection Service when residues are identified in imported 

meat and meat products. 

Question. The most recent data produced by the FDA’s National Antimicrobial Resistance Monitoring System (NARMS) shows that nearly 30 percent of poultry tested 

contain antibiotic resistant strains of salmonella. But the monitoring system doesn’t 

even test for highly dangerous and resistant bacteria such as methicillin-resistant 

Staphylococcus aureus (MRSA). 

Are there any plans to expand the scope of this important monitoring tool? 

Answer. Yes, needed improvements are being made to the sampling design for the 

food animal component of NARMS that will result in more reliable data on antibiotic resistance trends. NARMS is an important monitoring tool and it is critical 

to have a flexible program that is able to address current and emerging challenges. 

Regarding MRSA specifically, FDA is well aware of the recent research on this 

issue. FDA, the Centers for Disease Control (CDC), and USDA are in agreement 

that the epidemiology of community-associated MRSA does not point to the food 

supply as an important mechanism for spreading this infection. 

FOOD SAFETY MODERNIZATION ACT

Question. Commissioner Hamburg, on January 4, 2011, the President signed the 

Food Safety Modernization Act into law. This law ensures that we are working to 

prevent foodborne pathogens from entering the food supply rather than just responding to outbreaks. However, it is now more than a year since enactment and 

we still have not seen many of the regulations required by this law. 

Will you please provide an update on the timeline for the full implementation of 

the Food Safety Modernization Act? 

Answer. The numerous provisions of the FDA Food Safety Modernization Act 

(FSMA) present FDA with a unique opportunity to improve food safety. This also 

represents an enormous challenge to develop and issue more than 50 regulations, 

guidance documents, and reports under very tight timeframes. FDA is committed 

to issuing all of the rules and regulations in FSMA and is prioritizing its work by 

concentrating first on the rulemakings that will form the foundation of the preventive controls framework envisioned in FSMA. FDA currently has four FSMA proposed rules—Preventive Controls for Human Food, Preventive Controls for Animal 

Food, Produce Safety Standards, and the Foreign Supplier Verification Program— 

currently under review with the goal to issue these documents as soon as possible. 

Question. How does FDA plan to differentiate between high-risk and low-risk 

products? 

Answer. The provisions of the FDA Food Safety Modernization Act (FSMA) contain many references to high-risk and low-risk products, facilities, activities, or situations. FSMA frequently mandates that FDA consider risk and be risk-based in its 

actions. In some sections, FSMA provides criteria for evaluating risk and in other 

sections it does not. For example, section 204—Enhancing Tracking and Tracing of 

Food and Recordkeeping—states that each designation of a high-risk food shall be 

based on: 

‘‘(i) the known safety risks of a particular food, including the history and severity 

of foodborne illness outbreaks attributed to such food, taking into consideration 

foodborne illness data collected by the Centers for Disease Control and Prevention; 

‘‘(ii) the likelihood that a particular food has a high potential risk for microbiological or chemical contamination or would support the growth of pathogenic 
137 

microorganisms due to the nature of the food or the processes used to produce such 

food; 

‘‘(iii) the point in the manufacturing process of the food where contamination is 

most likely to occur; 

‘‘(iv) the likelihood of contamination and steps taken during the manufacturing 

process to reduce the possibility of contamination; 

‘‘(v) the likelihood that consuming a particular food will result in a foodborne illness due to contamination of the food; and 

‘‘(vi) the likely or known severity, including health and economic impacts, of a 

foodborne illness attributed to a particular food.’’ 

In implementing the various provisions of FSMA, FDA will consider the specific 

text related to risk in the relevant section and then, to the extent the text allows, 

strive to be consistent in our implementation across the provisions. 

REGISTRY OF LEGITIMATE ONLINE PHARMACIES

Question. The Internet has made it shockingly easy for patients to obtain—and 

become addicted to—prescription drugs. In a report published in January, the National Association of Boards of Pharmacy found that 96 percent of the nearly 9,000 

Internet drug outlets it reviewed were not in compliance with pharmacy laws or established industry standards. 

These Web sites are increasingly sophisticated, making it difficult for consumers 

to distinguish between legitimate online retailers and those that unlawfully sell prescription drugs. Oftentimes, illegal online pharmacies impersonate the layout of legitimate pharmacies; claim to be endorsed by Government agencies; or display licenses, phone numbers, and addresses, all to deceive consumers. 

I have introduced bipartisan legislation with Senators Sessions, Cornyn, and 

Schumer to protect consumers from these rogue Internet pharmacies. Because it is 

so difficult for consumers to distinguish the legitimate online pharmacies from the 

illegitimate ones, the bill as introduced proposes that FDA create a registry of legitimate pharmacy Web sites. This would make sure consumers are protected by providing accurate information about the legitimacy of pharmacy Web sites. I understand that FDA staff has some concerns with this approach. But the Internet is not 

going anywhere, and neither is the problem posed by rogue pharmacy Web sites. 

Will you work with me to devise solutions to better educate consumers so that 

they can make informed decisions when they seek to purchase prescription drugs 

online? 

Answer. One of our concerns with establishing a list or registry of ‘‘legitimate’’ online pharmacies as a resource for consumers is that the unregulated nature and volume of Web sites on the Internet would make it nearly impossible to monitor and 

maintain such a list with any form of real-time accuracy of the legitimacy of the 

online pharmacies. FDA does not have the ability to assure that every site listed 

in such a registry would always remain safe at the time of purchase. Despite being 

listed as ‘‘legitimate,’’ an online pharmacy may later decide to sell or dispense illegal 

products that may cause consumers harm. Additionally, criminals could also use the 

list to target online pharmacies and masquerade as a listed Web site to sell unapproved, adulterated, or counterfeit medicines. Therefore, consumers could be misled 

into thinking that the Web sites listed were completely safe sites from which to buy 

medicines. 

FDA looks forward to working with you and other stakeholders on solutions for 

empowering consumers to make informed decisions when they are considering purchasing prescription drugs online. FDA is committed to educating the public on how 

to safely buy prescription medicines online and about the risks associated with purchasing prescription drugs on the Internet from illegal Web sites. We currently have 

educational materials available on FDA’s Web site, http://www.fda.gov/Drugs/ 

ResourcesForYou/Consumers/BuyingUsingMedicineSafely/ 

BuyingMedicinesOvertheInternet/default.htm, and continue to research consumer 

and healthcare professional perceptions about buying prescription drugs online in 

order to improve these educational materials. 

DEFINITION OF VALID PRESCRIPTION

Question. An estimated 1-in-6 Americans—36 million people—have purchased prescription medication online without obtaining a valid prescription. This has contributed to a growing prescription drug abuse in our Nation. 

For example, a man in Wichita, Kansas took eight or nine pills of the muscle relaxant Soma each night to help him sleep, even though the recommended dosage 

is only one pill every 6 to 8 hours. One morning, his wife found him dead in bed 

from an accidental overdose of this drug. She had assumed that the pills were being 
138 

prescribed by a doctor, but she was wrong. Her husband had obtained the drugs 

from an illegal Internet pharmacy without ever visiting a doctor. 

In another example from my home town, a doctor in San Francisco wrote thousands of prescriptions for painkillers for customers of a rogue Internet pharmacy. 

The prescriptions were based on brief telephone conversations. The doctor never examined or even met the patients. One patient, who also lived in San Francisco, became addicted to narcotics and developed liver damage after receiving multiple orders of the pain killer Darvocet. 

These tragedies occurred because there is a loophole in current law that allows 

prescriptions for noncontrolled substances to be issued without a patient ever visiting a doctor. In 2008, Congress enacted legislation that I had introduced—the 

Ryan Haight Online Pharmacy Consumer Protection Act—that requires that a patient receive at least one in-person medical evaluation before prescriptions could be 

issued for a drug that is a controlled substance. It is time that we extend this provision to cover all prescription drugs, not just controlled substances, and I have introduced bipartisan legislation with Senators Sessions, Cornyn, and Schumer that 

would achieve this result. 

I know that the President’s U.S. Intellectual Property Enforcement Coordinator 

has issued reports that call for ‘‘valid prescription’’ to be defined in the law for prescription drugs that are not controlled substances. 

Could you describe why the Administration has taken this position? 

Answer. The Administration is correct in being concerned about the lack of a clear 

Federal definition of a ‘‘valid’’ prescription for the purposes of online drug sales of 

non-controlled substances. Although it will not solve all problems associated with 

Internet sales of prescription drugs, creating a national definition of a valid prescription would be helpful to broadly address some of the challenges associated with 

Internet pharmacies. A uniformly applicable definition of what constitutes a ‘‘valid’’ 

prescription would be beneficial for all prescription drugs as an enforcement tool, 

regardless of whether they are controlled or non-controlled substances. 

Prescription drugs may only be dispensed upon a prescription ordered by a Statelicensed healthcare practitioner for specific patients based on a medical need determined by that healthcare practitioner. To ensure the safe use of a prescription drug, 

the drugs should be used under the supervision of a licensed healthcare practitioner 

by law to administer such drug (section 503(b) of the Food Drug & Cosmetic Act). 

Illegal online drug sellers (including many located outside the United States) pretend to be legitimate Internet pharmacies and offer prescription drugs for sale without requiring that the purchaser have a valid prescription for such drugs. 

FDA is concerned about the public health risks associated with consumers buying 

prescription drugs from online drug sellers on the Internet, because some of these 

products, particularly those sold without requiring a valid prescription, may be ineffective and unsafe. Specifically, illegal Internet pharmacies are more likely to offer 

products that are counterfeit, contaminated, contain the wrong active ingredient(s), 

have too much or too little active ingredient, are not stored or handled under proper 

conditions, or are produced under filthy conditions. As a result, consumers may experience adverse health effects. 

FDA has several examples demonstrating our concern for the public’s safety when 

using illegal Internet pharmacies to buy prescription drugs: 

—A dangerous counterfeit product that was purchased using the Internet, that 

contained the wrong active ingredient: http://www.abbott.com/vicodin-consumeralert.htm 

—A past advisory about foreign products with confusing names or the same name, 

but that may have different active ingredients than the FDA-approved drug: 

http://www.fda.gov/Drugs/DrugSafety/ 

PostmarketDrugSafetyInformationforPatientsandProviders/ 

DrugSafetyInformationforHeathcareProfessionals/PublicHealthAdvisories/ 

ucm173134.htm 

—FDA found that products purchased from ‘‘Canadian pharmacies’’ actually came 

from 27 different countries: http://www.fda.gov/NewsEvents/Newsroom/ 

PressAnnouncements/2005/ucm108534.htm 

To help U.S. consumers who buy prescription drugs on the Internet protect themselves from receiving unapproved, unsafe, and ineffective drugs, FDA recommends 

that they buy only from online pharmacies that: 

—Are located in the United States; 

—Are licensed by the State board of pharmacy where the Web site is operating; 

—Have a licensed pharmacist available to answer questions; 

—Require a prescription from a doctor or other healthcare professional licensed 

to prescribe in order to buy a prescription medicine; and 
139 

—Provide contact information that allows the consumer to talk to a person if he 

or she has problems or questions. 

Additional advice to consumers about how to buy medicines online safely can be 

found on FDA’s Web site at: http://www.fda.gov/Drugs/ResourcesForYou/ 

ucm080588.htm 

NUTRITION LABELING STANDARDS

Question. I have heard from constituents in my State who own restaurant chains 

like Carl’s Junior and Domino’s. They are concerned about the implementation of 

the final rule of section 4205 of the Patient Protection and Affordable Care Act, Nutrition Labeling of Standard Menu Items at Chain Restaurants. 

These restaurant chains, which employ thousands of people in my State, are concerned that the implementation of this final rule could be overly burdensome, particularly in these challenging economic times. 

I appreciate your request for comments on many parts of the proposed rule, including on the use of stanchions, the declaration of variable menu items, and a discussion of different options for the final rule. 

The FDA estimates the initial mean cost of complying with the requirements of 

the rule will be $315 million, with an estimated ongoing cost of over $44 million. 

I believe this regulation should be implemented in a way that is the least burdensome. In what ways is the FDA working with industry to ensure the final regulations are the least burdensome and least costly? 

Answer. FDA conducted multiple listening sessions with the industry and other 

stakeholders when developing the proposed rule. The industry supplied numerous 

comments in response to the proposed rule and FDA is giving these comments careful consideration in development of the final rule. 

FDA examined the impacts of the proposed rule as required under Executive Orders 12866 and 13563, the Regulatory Flexibility Act (5 U.S.C. 601–612), and the 

Unfunded Mandates Reform Act of 1995 (Public Law 104–4). Executive Orders 

13563 and 12866 direct agencies to assess all costs and benefits (both quantitative 

and qualitative) of available regulatory alternatives and, if regulation is necessary, 

to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs 

and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. 

In addition, FDA evaluated the impacts of the proposed rule pursuant to the Regulatory Flexibility Act, which requires agencies to analyze regulatory options that 

would minimize any significant impact of a rule on small entities. FDA’s analysis 

of the regulatory impact of the proposed rule was made available for public comment and FDA is considering the comments received in developing the final rule. 

Question. Will you allow any flexibility in deadlines for small businesses to comply 

with the regulations? 

Answer. FDA proposed that the final rule become effective 6 months from the 

date of its publication. FDA also requested comments on whether the effective date 

should be extended for a greater period of time after the publication of the final rule 

(76 FR 19192 at 19219). FDA also sought comment on whether we should provide 

for staggered implementation based on the size of a chain or of a specific franchisee 

(76 FR 19192 at 19220). FDA is reviewing and considering the comments and will 

include its decisions on the effective date and on staggered implementation in the 

final rule. 

Question. What is the status of the final rule? 

Answer. FDA is currently reviewing and considering the comments, and developing the final rule. 

Question. Does the FDA have a target date for implementing the final rule? 

Answer. FDA will specify the effective date in the final rule when it is published. 

QUESTIONS SUBMITTED BY SENATOR ROY BLUNT

BIOSIMILARS USER FEE PROGRAM

Question. When Congress adopted the Biologics Price Competition and Innovation 

Act (BPCIA), it did so to ensure a consistent standard during the review process, 

as well as the same level of expertise with the reviewers as the Prescription Drug 

User Fee program. As a result of BPCIA, FDA has recently submitted a fee proposal 

for the review of biosimilar products to Congress. 
140 

As a part of this legislative package, why is FDA proposing an additional $20 million in appropriated funds, commonly referred to as a trigger, for each of the program’s 5 years? 

Answer. Under the ‘‘Biosimiliars User Fee Act of 2012’’ (BsUFA), FDA will allocate at least $20 million, adjusted for inflation, in non-user fee money for biosimilar 

review activities to ensure that user fees represent supplemental funding to the biosimilar program and to avoid redirection of resources from PDUFA to BsUFA activities. 

Question. Does BPCIA include a specific requirement to develop this separate 

funding trigger? 

Answer. BPCIA does not include a specific requirement for funding, but directs 

FDA to develop a biosimilar user fee program for fiscal years 2013 through 2017. 

Similar to FDA’s other medical product user fee programs, under BsUFA, user fee 

funding supplements dedicated non-user fee funding to ensure sufficient resources 

for the biosimilar review program. 

BIOSIMILARS

Question. How did FDA arrive at the $20 million figure, and what data or information did you use to support at that number? Is FDA currently spending appropriated funds on activities related to biosimilars? 

Answer. FDA considers the review of biosimilar biological products, which offer 

the potential for a safe and effective, and more affordable alternative to innovator 

biologics to be a high priority. FDA has devoted an increasing amount of resources 

to the biosimilar program since BPCIA enactment in March 2010. FDA is developing 

regulatory policies and guidance on the new biosimilar approval pathway, and building the review capacity to facilitate biosimilar biological product development. On 

February 9, 2012, FDA released three draft guidance documents on biosimilar product development. The draft guidances are ‘‘Scientific Considerations in Demonstrating Biosimilarity to a Reference Product’’, ‘‘Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product’’, and ‘‘Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition 

and Innovation Act of 2009.’’ FDA is currently seeking comments on the guidance 

documents and will consider information received from the public in finalizing the 

documents. FDA is spending appropriated funds on activities related to biosimilars. 

During fiscal year 2011, FDA spent $7.9 million on biosimilar activities. 

Characterizing biological products for the purpose of determining biosimilarity or 

interchangeability is challenging because the molecules of biological products tend 

to be much larger and have a far more complex spatial structure than small-molecule drugs. Therefore, FDA generally expects the level of effort and expertise required to review biosimilar applications to be comparable to that required to review 

innovator biologic applications. As a result, the proposed fee levels under BsUFA are 

similar to the fee levels under PDUFA. Industry agreed to these fee levels only if 

FDA committed to review performance goals that would quickly become comparable 

to the goals of the more mature, established PDUFA program. As a result, the proposed performance goals for BsUFA include goals related to meetings with sponsors, 

application review, and other biosimilar review activities. For certain goals, the target performance levels start at 70 percent and increase to 90 percent by the fifth 

year of the program, while others begin at 90 percent and remain at this level for 

the 5 years of the program. 

Although FDA has been meeting with, and providing advice to, sponsors of biosimilar product candidates since May 2010, FDA has not received a biosimilar biological product application, and there are no currently marketed biosimilar biological products. The biosimilar program is relatively new, leading to uncertainty regarding future program size and user fee collections. To ensure resources for biosimilar review activities, while avoiding redirection of resources from PDUFA, FDA 

estimated at least $20 million in non-user fee money plus biosimilar user fee collections would be required to have sufficient minimum program staffing capacity to be 

able to achieve these aggressive performance goals in the first 5 years of the BsUFA 

program. 

Question. Does this new trigger require Congress to appropriate an additional $20 

million specifically for the biosimilar program each year? 

Answer. BsUFA does not require Congress to appropriate funds for the biosimilar 

program, but requires FDA to spend at least $20 million each year, adjusted for inflation, in non-user fee money for biosimilar review activities. 

Question. If the FDA intends to reallocate or reprogram the $20 million from 

other FDA existing programs and accounts, from precisely what programs and in 

what amounts would the funding be derived? 
141 

Answer. FDA considers the review of biosimilar products to be a high priority. In 

fiscal year 2011, FDA received an increase of $1.8 million in non-user fee money 

for the biosimilar review program. For fiscal year 2013, if FDA does not receive approximately $20 million in new budget authority for the biosimilar review program, 

then FDA must reassess other priorities, and redirect budget authority funding from 

other programs. 

DEVICES AND DIAGNOSTICS

Question. Guidance documents can be a useful tool to provide flexible, rapid direction to industry and agency personnel on FDA policy or issues. However, the proliferation of guidance documents issued by FDA, particularly the Center for Devices 

and Radiological Health, has created some confusion in the industry. Issuing numerous guidance documents on related topics over a short timeframe creates a patchwork of industry responsibilities that may be difficult to navigate. The agency 

claims this ‘‘mosaic’’ will fit together smoothly once all the pieces are issued; however, it is difficult to see the agency’s vision. 

Dr. Hamburg, can you help me understand FDA’s end strategy regarding these 

guidance documents? 

Answer. In recent years concerns have been raised both within and outside of 

FDA about our regulatory review processes. In August 2010, the Center for Devices 

and Radiological Health (CDRH) released two reports that identified issues regarding our premarket programs and proposed potential actions for us to take to address 

the underlying root causes. After considering extensive and varied public input on 

our recommendations, in January 2011, CDRH announced a Plan of Action that included 25 specific actions that we would take to improve the predictability, consistency, and transparency of our premarket programs. 

The Plan of Action outlines which recommendations CDRH intends to implement 

including the identification of eight specific guidance documents that will help 

CDRH to better meet its mission of protecting and promoting the public health. To 

date six of the eight originally identified guidance documents have been issued in 

draft. 

FDA believes the actions identified in the Plan for Action, including the associated 

guidance documents, will strengthen our premarket review programs. By increasing 

the predictability, reliability, and efficiency of our regulatory pathways, FDA can 

help ensure that better treatments and diagnostics are provided to patients more 

quickly, stimulate investment in and development of promising new technologies to 

meet critical public health needs, and increase the global market position of U.S. 

medical devices. 

A detailed report informing constituents of the many actions CDRH is undertaking to improve its premarket programs is available on FDA’s Web site: 

(http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/ 

CDRH/CDRHReports/ucm276272.htm). 

Question. Until recently, FDA has exercised enforcement discretion when diagnostic products labeled Research Use Only (RUO) are used in clinical settings. Some 

are concerned that ending this practice will result in manufacturers discontinuing 

many RUO products, thus limiting patient access to innovative diagnostics, particularly in the personalized medicine arena. 

Can you comment on whether you believe FDA is striking the right balance between protecting the public health and ensuring patient access to new therapies? 

Answer. FDA believes that products intended for use in patient diagnosis should 

not be marketed or distributed with the label, ‘‘For research use only. Not for use 

in diagnostic procedures.’’ FDA has not had a policy of enforcement discretion for 

Research Use Only—or RUO—labeled products that are marketed for clinical diagnostic use. Our regulations, promulgated in 1976, require manufacturers to label 

products consistent with their intended use. Because RUO products are not intended to affect patient care, they are exempt from the safety-oriented regulatory 

controls applied to medical devices that are intended for diagnostic use. This exemption facilitates the marketing and shipping of devices that are intended for research 

use only by not requiring the same level of regulatory controls that are required for 

devices which are used to make patient management decisions. 

The RUO draft guidance was issued June 11, 2011. The policies outlined in the 

draft guidance are supported by longstanding statutory and regulatory requirements; the RUO labeling regulation was originally promulgated on March 15, 1973, 

and the definition of intended use for devices was promulgated on February 13, 

1976. The purpose of the draft guidance is to leverage our enforcement resources 

by reminding companies that these regulatory requirements exist, that FDA does 

enforce them, and that by ignoring these regulations, companies may be causing 
142 

their devices to be adulterated and/or misbranded under the Federal Food, Drug, 

and Cosmetic Act. 

In finalizing the guidance, we will carefully consider how the guidance might affect access and availability of certain products, and will take steps to assure that 

the public health is not put at risk. 

Question. It has been brought to my attention that FDA’s recent guidance on Research Use Only products could restrict patient access to important diagnostics by 

restricting sales of these products. Does the agency have any evidence of patients 

being harmed by Research Use Only products? What is the agency’s sense of the 

scope of this perceived problem? 

Answer. Because RUO products are exempt from the usual regulatory controls applied to medical devices, including exemption from registration of the manufacturer 

and listing of the devices sold, and the requirement to report adverse events to FDA, 

we do not typically receive reports of RUO device failures and malfunctions, or any 

adverse events related to such failures and malfunctions. However, we have encountered examples of advertisements, package inserts, and other marketing materials 

in which a device labeled for research use and not in compliance with FDA device 

regulations is promoted for clinical diagnostic use. We are also aware of anecdotal 

evidence that use of such products may have contributed to incorrect diagnoses, and 

errors in public health actions. 

We believe that clinical diagnostic use of products that are not labeled for diagnostic use and do not comply with FDA regulations presents safety concerns, in part 

because there is no assurance that such products are manufactured in any controlled way. There is also no assurance that such products perform as stated, that 

manufacturers will address problems with these products, that there will be uniformity between products of the same type, or that potential users will be notified 

if the products are defective or could cause harm. 

In finalizing the guidance, FDA will carefully consider how the guidance might 

affect access and availability of certain products, and will take steps to assure that 

the public health is not put at risk. 

Question. FDA’s current regulatory principles hold manufacturers responsible only 

for their own actions and clearly state that ‘‘intended use’’ is determined by objective 

actions taken by the manufacturer, such as product claims. Under the draft RUO 

guidance, FDA’s position on this matter has changed significantly. The draft guidance states that a product is subject to regulation based on how a customer uses 

the product, even if the manufacturer has labeled and promoted it properly. 

What is the basis for FDA’s position that a manufacturer’s knowledge of its customer’s use of the product—rather than the manufacturer’s conduct—makes the 

product subject to device regulations? 

Answer. We do not believe the draft RUO guidance represents a significant 

change, as the regulations governing RUO labeling and the definition of intended 

use that underlie the policies announced in the draft guidance have been in place 

since 1973 and 1976 respectively. Under these regulations, a manufacturer has the 

responsibility to label devices consistent with their intended use, and intended use 

may be shown by the circumstances surrounding the distribution of the device, including knowledge of actual use. We have observed a striking increase in marketing 

of products that clearly have a diagnostic purpose under the RUO label, and wish 

to remind manufacturers that putting an RUO label on a product and then marketing it for diagnostic use is violative. 

We consider a number of factors when determining whether a manufacturer is in 

violation of the labeling requirements and believe a ‘‘totality of the evidence’’ approach is appropriate to determining whether a manufacturer has acted in accordance with the regulations. 

MENU LABELING

Question. FDA is currently working on the final rule in regards to menu labeling. 

This is a tremendous undertaking for restaurants. Specifically, the law recognizes 

that the making of restaurant meals is different than manufacturing packaged foods 

and thus was explicit about the use of ‘‘reasonable basis’’ to enforce the law. 

Do you intend to follow the intent of the law in regards to uniform enforcement 

with ‘‘reasonable basis’’? What is your current thinking on how to approach this 

issue? 

Answer. Section 4205 of the Patient Protection and Affordable Care Act of 2010 

(Affordable Care Act) states that ‘‘a restaurant or similar retail food establishment 

shall have a reasonable basis for its nutrient content disclosures, including nutrient 

databases, cookbooks, laboratory analyses, and other reasonable means, as described 

in section 101.10 of title 21, Code of Federal Regulations (or any successor regula-
143 

tion) or in a related guidance of the Food and Drug Administration’’ (21 U.S.C. 

343(q)(5)(H)(iv)). FDA specifically requested comment on the appropriateness of its 

compliance approach in the proposed rule (76 FR 19192 at 19218). The comment period for the proposed rule closed on July 5, 2011, and FDA received comments, including comments from other members of Congress, on the issue of reasonable basis. 

We assure you that FDA will consider alternative solutions to address this complex 

issue. We evaluate all comments before issuing a final rule. 

ANTIMICROBIAL RESISTANCE

Question. What are the metrics FDA will use to measure ‘‘success’’ of the recently 

released Guidance No. 209? 

Answer. FDA acknowledges the importance of assessing the effectiveness of measures intended to curb antimicrobial resistance, but recognizes that identifying appropriate metrics as indicators of ‘‘success’’ is challenging. In conjunction with finalizing its plans for implementing the recommendations outlined in Guidance for Industry (GFI) No. 209, ‘‘The Judicious Use of Medically Important Antimicrobial 

Drugs in Food-Producing Animals,’’ FDA is considering approaches for assessing the 

impact of such measures over time. This includes looking at other metrics such as, 

exploring mechanisms for enhancing the drug sales/distribution data that we already receive and National Antimicrobial Resistance Monitoring System (NARMS) 

data to track trends in antimicrobial resistance over time. 

Question. The National Antimicrobial Resistance Monitoring System (NARMS) 

has been a collaboration between FDA, the Centers for Disease Control (CDC), and 

USDA. I have been informed that FDA is planning on discontinuing funding to 

USDA while continuing to fund CDC. If NARMS data is one potential metric to be 

used to measure the impact of Guidance No. 209 does FDA feel that program can 

be viewed as impartial and unbiased if the FDA does not have input from outside 

HHS in survey design and data collection? 

Answer. FDA has been working collaboratively with its USDA and CDC partners 

in developing a strategy for instituting enhancements to the NARMS program. We 

do not expect this strategy to reduce total funding to USDA, but rather it provides 

for a redeployment of funding within USDA to provide for significant improvements 

in sampling design for the food animal component of NARMS. The NARMS program 

has and will continue to be a collaborative effort between FDA, CDC, and USDA. 

The changes that are currently under development will serve to enhance the 

NARMS program and strengthen the utility of its data for supporting efforts to address antimicrobial resistance. 

Question. If metrics such as antibiotic resistance do not decrease, what does FDA 

see as next steps? 

Answer. As noted above, identifying appropriate metrics for assessing the effectiveness of measures implemented to curb antimicrobial resistance is challenging. 

In addition, FDA expects that such metrics will need to be observed over a number 

of years in order to identify any trends in the data. The strategy outlined in Guidance No. 209 and draft Guidance No. 213 represents an appropriate path forward 

for addressing this important public health issue in a manner that also ensures that 

animal health needs continue to be met. If following implementation of the recommended changes, assessments do not indicate positive effect. FDA will evaluate 

what additional measures, if any, may be needed. 

QUESTIONS SUBMITTED BY SENATOR JERRY MORAN

ADDRESSING DRUG SHORTAGES

Question. Has the Food and Drug Administration (FDA) evaluated whether policies and regulations of the Drug Enforcement Administration (DEA) have contributed in any manner to the drug shortage problems we are currently seeing in our 

country? 

Answer. FDA and DEA are continuing to work together to address evolving and 

potential drug shortages of critical care medications and prescription drugs. FDA 

applies the full range of regulatory and administrative tools available and engages 

in extensive cooperative efforts with DEA to manage issues associated with this 

public health crisis. These efforts are designed to avoid the concern raised by your 

question. 

Question. Does the FDA study or plan to study whether DEA policies and regulations contribute to drug shortage problems? 

Answer. FDA is not studying whether DEA policies and regulations contribute to 

drug shortage problems. However, we understand that the Government Account-
144 

ability Office (GAO) intends to conduct a study of the extent to which the Drug Enforcement Administration policies and regulations contribute to the growing drug 

shortage crisis with regard to controlled substances prescribed by physicians. FDA 

will support this GAO study as needed. 

Question. What collaborative efforts does FDA engage in with the DEA to address 

drug shortages that may be caused by some degree by current DEA quotas? 

Answer. FDA is very concerned about drug shortages and is working diligently 

with firms, stakeholders, and other Federal agencies as appropriate. The amount of 

raw material that a firm can make of a controlled substance is under the purview 

of DEA. However, when firms have notified FDA that additional raw material is 

needed to avoid shortages of controlled substances, FDA has worked closely with 

DEA to notify DEA of the potential for shortage. FDA and DEA are continuing to 

work together to address evolving and potential drug shortages of critical care medications and other prescription drugs. At this time, FDA is working closely with DEA 

to respond to shortage reports being shared with both organizations. 

MENU LABELING

Question. As you stated, and was stated in the proposed rule, one of the alternatives that FDA is considering is option 2, which would narrow the scope of menu 

labeling regulations to only restaurants and retail establishments whose primary 

business is the selling of restaurant or restaurant-type food. Since I’m assuming 

that the proposed rule was cleared by FDA’s General Counsel’s office, then FDA can 

implement the restaurant menu labeling regulations under the option 2 alternative 

and remain in compliance with the law, correct? 

Answer. Section 4205 of the Affordable Care Act requires that certain chain restaurants and similar retail food establishments disclose nutrition information for 

standard menu items. As we discussed in the proposed rule, the statutory term ‘‘restaurants and similar retail food establishments’’ is ambiguous, and it is possible to 

imagine a range of interpretations. 

FDA proposed an interpretation alongside alternatives for public comment (76 FR 

19192 at 19195–19196). Accordingly, in the proposed rule, FDA presented the approach of option 2 as an alternative to the proposed definition of ‘‘restaurant or similar retail food establishment’’ (76 FR 19192 at 19198), and considered the costs and 

benefits of option 2 as a regulatory alternative under Executive Orders 12866 and 

13563 (76 FR 19192 at 19223). Option 2 includes requirements similar to the proposed rule, but defines ‘‘restaurant or similar retail food establishment’’ as retail establishments where the sale of restaurant food or restaurant-type food—as opposed 

to food in general—is the primary business activity. Option 2 covers all establishments included in the proposed rule, with the exception that grocery and convenience stores would not be subject to the proposed requirements. FDA specifically requested comment on the proposed definition of ‘‘restaurant or similar retail food establishment’’ and on the alternatives, and is reviewing and considering the comments received as we are developing the final rule. 

Question. Can you explain how President Obama’s Executive Order 12866 and Executive Order 13563 have impacted your proposed implementation? Would the option 2 alternative fulfill Executive Order 12866 and Executive Order 13563 by minimizing burdens while achieving the statutory directives? Can you demonstrate that 

you are taking the least burdensome path in implementing these regulations? 

Answer. Under Executive Orders 12866 and 13563, FDA examined the regulatory 

impacts of the proposed rule and assessed the costs and benefits of a number of regulatory alternatives. The proposed rule reflects FDA’s tentative conclusion that the 

benefits of the proposed rule justify the costs as required by Executive Order 12866, 

and that the proposed rule is ‘‘the least burdensome tool for achieving [the] regulatory ends’’ of the statute as required by Executive Order 13563. In the proposed 

rule, FDA identified option 2 as a regulatory alternative to the proposed rule, and 

assessed its benefits and costs. We will review and consider comments on our preliminary regulatory impact analysis of the proposed rule and the regulatory alternatives in selecting the regulatory approach in the final rule that minimizes costs 

and maximizes net benefits. 

Question. Can you explain why, under ‘‘option 1’’ or the proposed rule itself, you 

use foods that already have nutritional information labeled or displayed under the 

Nutrition Labeling and Education Act (NLEA) as a trigger for establishments to be 

captured under this regulation? 

Answer. FDA considered comments received prior to the publication of the proposed rule as well as the language and purpose of section 4205 when considering 

the scope of establishments covered by section 4205 and deliberating on how to define ‘‘restaurants and similar retail food establishments’’ in the proposed rule. FDA 
145 

proposed that that the term ‘‘restaurant or similar retail food establishment’’ means 

a retail establishment that offers for sale restaurant or restaurant-type food, where 

the sale of food is the primary business activity of that establishment (76 FR 19192 

at 19197). FDA refers to this definition in the Preliminary Regulatory Impact Analysis (PRIA) as ‘‘option 1.’’ 

In the proposed rule, FDA also offered an alternative to this proposed definition. 

Under this alternative, a restaurant or similar retail food establishment means a 

retail establishment where the sale of restaurant or restaurant-type food—as opposed to food in general is the primary business activity of that establishment (76 

FR 19192 at 19198). Therefore, neither the proposed definition of ‘‘restaurant or 

similar retail food establishment’’ nor the alternative definition uses the sale of 

packaged food that is required to bear nutrition information on its label under the 

Nutrition Labeling and Education Act (NLEA) as the trigger for establishments to 

be covered by section 4205. FDA asked for comment on the proposed and alternative 

definitions as well as any other option for defining the term ‘‘restaurants and similar retail food establishments.’’ 

We further note that in the proposed rule, FDA tentatively concluded that some 

packaged food offered for sale in covered establishments is ‘‘food served in restaurants or other establishments in which food is served for immediate consumption 

or that is sold for sale or use in such establishments,’’ and would therefore meet 

the definition of ‘‘restaurant food.’’ To the extent that packaged food is ‘‘restaurant 

food’’ and otherwise satisfies the requirements of section 4205, such packaged food 

would be covered by the menu labeling requirements. FDA recognizes that such 

packaged food includes on its label the nutrition information required by the NLEA 

and in the proposed rule, has provided some flexibility to industry for satisfying the 

requirements of section 4205 (76 FR 19192 at 19217). 

Question. In the proposed rule, FDA uses the term ‘‘restaurant-type’’ food even 

though that term is nowhere in the statute. Can you explain how you came up with 

that term and then why you created a new food category (restaurant-type food) to 

cover another category beyond ‘‘restaurant food’’? 

Answer. The 1990 NLEA amendments included exemptions for nutrition labeling 

for two categories of food: 

—Food ‘‘which is served in restaurants or other establishments in which food is 

served for immediate human consumption or which is sold for sale or used in 

such establishments,’’ and 

—Food ‘‘which is processed and prepared primarily in a retail establishment, 

which is ready for human consumption, which is the type described in [(1)] and 

which is offered for sale to consumers but not for immediate human consumption in such establishment and which is not offered for sale outside such establishment’’ (21 U.S.C. 343(q)(5)(A)(i) and (ii)). 

The terms ‘‘restaurant food’’ and ‘‘restaurant-type food,’’ as used in the proposed 

rule, reflect these two categories of food. As explained in the proposed rule, we 

looked to this statutory context as a starting point for developing a regulatory definition of the term ‘‘restaurants and similar retail food establishments,’’ as used in 

section 4205 of the Affordable Care Act (76 FR 19192 at 19196). We are reviewing 

and considering comments that address the scope of establishments covered by section 4205 as we develop the final rule. 

Question. Have you accounted for how much the proposed rule’s definition of ‘‘restaurant-type’’ food, as ‘‘food not sold for immediate consumption, but ready for 

human consumption and processed or prepared in a retail establishment’’, which is 

sold at practically every grocery store, expands the scope of the regulations? 

Answer. In the proposed rule, FDA proposed that a restaurant or similar retail 

food establishment be defined as a retail establishment that offers for sale restaurant or restaurant-type food, where the sale of food is the primary business activity of that establishment (61 FR 19192 at 19233). The proposed rule—option 1— 

therefore encompasses grocery stores that are chain retail food establishments as 

defined in the proposed rule. In the proposed rule, FDA also estimated the cost of 

an alternative to this proposed definition—option 2—that limits the definition of 

‘‘restaurant or similar retail food establishment’’ to retail establishments where the 

sale of restaurant food or restaurant-type food is the primary business activity, and 

therefore excludes grocery stores from the coverage of section 4205 (76 FR 19192 

at 19223). Comparing option 1 to option 2 shows that covering grocery stores and 

convenience stores adds about $10.9 million to the cost of the proposed rule. FDA 

has received comments on the scope of establishments covered by section 4205 and 

will address this issue in its response to comments in the final rule. 

Question. Have you accounted how the term ‘‘restaurant-type’’ food also expands 

the number of items that would be regulated, particularly for grocery stores? 
146 

Answer. The Preliminary Regulatory Impact Analysis (PRIA) did not estimate the 

extent to which the definition of restaurant-type food expands the number of items 

that would be regulated. FDA has received comments on this issue and will address 

this issue in its response to comments in the final rule. 

Question. Please provide a revised estimate of the costs of option 1 to grocery 

stores based on your use of ‘‘restaurant-type food’’ and compare it with the costs estimated in your PRIA and by the Office of Management and Budget (OMB) in its 

September 2010 paperwork burdens report. 

Answer. FDA has received comments on this issue and FDA is giving those comments careful consideration in the development of the final rule. 

Question. In FDA’s cost-analysis, there appears to be very few—if any—studies 

showing a change in diets, obesity rates, health costs, and clearly no economic benefit that can be attributed to menu labeling. Can you compare the economic benefits 

of expanding these regulations to grocery stores versus the added costs to retailers? 

Answer. The Preliminary Regulatory Impact Analysis references the following 

studies showing a change in diets attributed to menu labeling: 

—Bollinger, B., P. Leslie, and A. Sorensen. ‘‘Calorie Posting in Chain Restaurants.’’ American Economic Journal: Economic Policy, 2011, 3(1): 91—128, 

2011. 

—Bassett, M. T., T. Dumanovsky, C. Huang, L. D. Silver, C. Young, C. Nonas, 

T. D. Matte, S. Chideya, and T. R. Frieden. ‘‘Purchasing Behavior and Calorie 

Information at Fast-Food Chains in New York City, 2007.’’ American Journal 

of Public Health, 98(8):1457–59, 2008. 

—Downs, J.S., G. Lowenstein, and J. Wisdom, J. ‘‘The Psychology of Food Consumption: Strategies for Promoting Healthier Food Choices’’. American Economic Review: Papers & Proceedings, 99(2): 159–164, 2009. 

—Elbel, B., J. Gyamfi, and R. Kersh. ‘‘Child and Adolescent Fast-Food Choice and 

the Influence of Calorie Labeling: A Natural Experiment,’’ International Journal 

of Obesity, Advance online publication, February 15, 2011. 

—Elbel, B., R. Kersh, V. L. Brescoll, and L. B. Dixon. ‘‘Calorie Labeling And Food 

Choices: A First Look At The Effects On Low-Income People In New York City.’’ 

Health Affairs, 28(6):W1110–W1121, 2009. 

—Finkelstein, E.A., L. Kiersten, N.L. Strombotne, L. Chan and J. Krieger. ‘‘Mandatory Menu Labeling in One Fast-Food Chain in King County, Washington,’’ 

American Journal of Preventive Medicine, 40(2):122–127, 2011. 

—Tandon, P. S., J. Wright, C. Zhou, C. B. Rogers, and D. A. Christakis. ‘‘Nutrition 

Menu Labeling May Lead to Lower-Calorie Restaurant Meal Choices for Children.’’ Pediatrics, 125(2):244–48, 2010. 

—Yamamoto, J.A., J.B. Yamamoto, B.E. Yamamoto, and L.G. Yamamoto. ‘‘Adolescent Fast Food and Restaurant Ordering Behavior with and without Calorie 

and Fat Content Menu Information.’’ Journal of Adolescent Health, 37: 397– 

402, 2005. 

Comparing option 1 to option 2, FDA estimates that covering grocery stores and 

convenience stores adds about $10.9 million to the cost of the proposed rule. FDA 

spent a significant amount of time considering the regulatory impact of the scope 

of establishments covered by section 4205. FDA will continue to consider the costs 

and benefits of covering grocery stores as we develop the final rule, and will address 

this issue in its response to comments in the final rule. 

Question. Have you factored in the cumulative effect of regulatory burdens that 

grocery stores already face as compared to restaurants? 

Answer. Executive Order 13563, which states that to the extent permitted by law, 

each agency must take into account ‘‘among other things, and to the extent practicable, the costs of cumulative regulations,’’ was issued on January 18, 2011. FDA 

published the proposed rule on April 6, 2011. The Office of Management and Budget 

(OMB) issued guidance on how to consider the cumulative effects of regulations, as 

directed by Executive Order 13563, on March 20, 2012, nearly 1 year after FDA 

published the proposed rule. FDA did not have sufficient time to estimate the cumulative effect of regulations for the proposed rule. However, FDA will carefully consider OMB’s guidance, and to the extent permitted by law and practicable, FDA will 

take active steps to take account of the cumulative costs of new and existing rules 

in the final rule. 

Question. The House Appropriations Committee included the following Report 

Language in support of FDA’s option 2 alternative for restaurant menu labeling 

with the fiscal year 2012 Agriculture Appropriations bill that was later accepted by 

the Senate-House Conference Committee when it reached final agreement and approved FDA: 

—Nutrition Labeling.—The Committee is concerned with the proposed rule that 

FDA issued on April 6, 2011, on nutrition labeling of standard menu items in 
147 

restaurants and similar retail food establishments. The proposed rule would include establishments that are not primarily in the business of selling food for 

immediate consumption or selling food that is prepared or processed on the 

premises. These establishments are not similar to restaurants and the Committee believes that FDA should define the term ‘‘restaurant’’ to mean only restaurants doing business marketed under the same name or retail establishments where the primary business is the selling of food for immediate consumption. The Committee urges FDA to use the proposed alternative definition in the 

rule that would encompass only establishments where the primary business is 

the selling of food for immediate consumption or selling food that is prepared 

and processed on the premises. 

Please explain how your agency has considered this report language. 

Answer. In addition to the report language that you cite, FDA received comments 

in response to the proposed rule that also support option 2, the proposed alternative 

definition of ‘‘restaurant or similar retail food establishment.’’ FDA will fully consider the comments received in response to the proposed rule as we develop our 

final rule. We want to clarify that under option 2, the term ‘‘restaurant or similar 

retail food establishment’’ means a retail establishment where the sale of restaurant 

or restaurant-type food—as opposed to food in general—is the primary business activity of that establishment. Restaurant-type food means food of the type described 

in the definition of restaurant food that is ready for human consumption, offered 

for sale to consumers but not for immediate consumption, processed and prepared 

primarily in a retail establishment, and not offered for sale outside the establishment. Therefore, option 2 would not define ‘‘restaurant or similar retail food establishment’’ to exclusively mean establishments where the primary business activity 

is the sale of food for immediate consumption. 

INTERNAL EFFICIENCIES

Question. USDA Secretary Vilsack has procured significant savings from increased operational efficiencies within USDA. He has reduced travel, utilized early 

retirement programs, and consolidated cell phone contracts from over 700 to 10. Secretary Vilsack saved approximately $90 million with these actions. In addition, the 

Farm Service Agency (FSA) office consolidation initiative will save approximately 

$60 million a year. Has FDA considered any actions like these, as opposed to raising 

taxes on food makers? Perhaps you could look at eliminating duplication with State 

inspections, or maybe some internal budget reductions? 

Answer. FDA has proposed savings as part of our fiscal year 2013 budget related 

to information technology expenditures. The estimate of IT savings for fiscal year 

2013 is $19.7 million, and the savings will occur in three areas. 

First, FDA has been working to consolidate its IT infrastructure into more modern data center facilities. During fiscal year 2013, we will realize $6.0 million in savings as due to our consolidation efforts. Second, we are launching an initiative to 

reduce the number of redundant laptops and other IT devices. This effort will 

produce $5.1 million in savings. Finally, other initiatives across all FDA programs 

will yield an additional $8.6 million in IT savings. The other initiatives include retiring legacy IT systems, modifying IT business processes, and other forms of IT 

database savings. 

MEDICAL RESEARCH

Question. Since the FDA Accelerated Approval process began, of the 80 products 

approved under Accelerated Approval, 32 have targeted AIDS, 29 cancer, and 20 all 

other disorders. (Source: Janet Woodcock, ‘‘FDA User Fees 2012: How Innovation 

Helps Patients and Jobs,’’ Statement before the Committee on Energy and Commerce Subcommittee on Health, U.S. House of Representatives, April 18, 2012, p. 

7.) Similarly, a recent study by Friends of Cancer Research highlighted the agency’s 

performance for oncology drugs, noting that most novel oncology products have been 

approved in the United States ahead of Europe. (Source: Samantha A. Roberts, Jeff 

D. Allen, Ellen V. Sigal, ‘‘Despite Criticism of the FDA Review Process, New Cancer 

Drugs Reach Patients Sooner in the United States,’’ Health Affairs, June 2011.) 

Clearly, cancer is an area where agency processes seem relatively consistent and 

predictable. However, there is growing concern that in other important public health 

and unmet medical needs areas—diabetes, cardiovascular disease, obesity, and central nervous system (CNS) conditions for example—FDA review processes are 

viewed as increasingly unpredictable and inconsistent. Understanding that the 

science across these various areas are very different, what is the agency doing to 

improve these variances? 
148 

Answer. The Accelerated Approval program has been a great success in bringing 

innovative new drugs to patients with serious or life-threatening diseases in a timely manner. While it is true that the program has been used most often in approval 

of drugs to treat cancer and HIV/AIDS, Accelerated Approval applies across all 

therapeutic areas where the science supports approval and the conditions established in the statute and regulations are met. FDA is actively working to improve 

awareness of this pathway for interested stakeholders and FDA staff. There are 

other initiatives in place to accelerate development and approval of important new 

drugs, including the Fast Track Program, Rolling Review, and Priority Review. 

These programs apply across the spectrum of therapeutics and have been used frequently to facilitate rapid development and approval of innovative medicines. Moreover, FDA recognizes the need for these new drugs and actively works with sponsors 

to facilitate the development of their safety, effectiveness, and high quality. FDA 

conducts over 2000 formal meetings with drug sponsors each year to discuss drug 

development programs. Also, the FDA publishes guidance documents outlining its 

current thinking on topics such as development of a drug for a specific disease and 

broader topics such as use of adaptive trial designs. 

Question. What metrics and data does the agency use, similar to that reported in 

the aggregate in its annual user fee performance reports, to monitor and address 

performance variances across its internal review divisions? 

Answer. In the Center for Drug Evaluation and Research (CDER) and Center for 

Biologics Evaluation and Research (CBER), senior management conduct ongoing 

oversight of the advice given and decisions made by the therapeutic review divisions 

and we carefully track the performance of divisions in meeting PDUFA review goals. 

As part of the proposals for PDUFA V there will be programs to further strengthen 

FDA’s capacity to respond to the rapidly changing science in areas such as 

pharmacogenomics, patient reported outcomes, meta-analyses, and rare disease drug 

development. These programs are expected to enhance our interactions with sponsors across the various therapeutic review divisions, which should streamline the 

development and approval of innovative new drugs to meet unmet medical needs. 

ANIMAL ANTIBIOTICS

Question. Farmer’s and rancher’s number one priority is taking care of their livestock and producing a safe and healthy food supply. Recently FDA issued concerning 

guidance about antibiotic use that suggests farmers and ranchers are not caring for 

livestock in the most appropriate way possible. 

Why did FDA issue this guidance? 

Answer. Current science supports the finding that widespread use of 

antimicrobials for growth promotion in animals can contribute to the emergence of 

drug resistance which may be transferred to humans, thereby reducing the effectiveness of these drugs for treating human disease. To address this concern, FDA’s 

Guidance for Industry No. 209 is intended to ensure that medically important antibiotics are used judiciously in food-producing animals by recommending a pathway 

to limit their use, in consultation with a veterinarian, to only address the health 

needs of animals, namely to treat, control, or prevent disease. 

Question. Was this guidance based on peer reviewed science? 

Answer. A variety of recognized international, governmental, and professional organizations have studied the judicious use of medically important antimicrobial 

drugs. Within the Guidance for Industry No. 209, ‘‘The Judicious Use of Medically 

Important Antimicrobial Drugs in Food-Producing Animals,’’ we have briefly summarized the findings and recommendations from some of the notable reports and 

peer-reviewed scientific literature that have addressed this issue over the past 40 

years. These reports provide context to FDA’s current thinking on this issue, and 

highlight the longstanding concerns that have been the subject of discussion in the 

scientific community as a whole. 

Question. Can you provide me with the scientific evidence that supports the guidance that you issued? 

Answer. Below is a list of some of the scientific literature that FDA considered 

in developing the Guidance for Industry No. 209, including some key reports and 

peer-reviewed scientific literature. This list is not an exhaustive summary of the scientific literature, but only highlights some of the more recent scientific research related to the use of antimicrobial drugs in animal agriculture and the impact of such 

use on antimicrobial resistance. We acknowledge that a significant body of scientific 

information exists, including some information that may present equivocal findings 

or contrary views. 

—1. 1969 Report of the Joint Committee on the Use of Antibiotics in Animal Husbandry and Veterinary Medicine. 
149 

—2. 1970 FDA Task Force Report, ‘‘The Use of Antibiotics in Animal Feed.’’ 

—3. 1980 National Academy of Sciences Report, ‘‘The Effects on Human Health 

of Subtherapeutic Use of Antimicrobial Drugs in Animal Feeds.’’ 

—4. 1984 Seattle-King County Study: ‘‘Surveillance of the Flow of Salmonella and 

Campylobacter in a Community.’’ 

—5. 1988 Institute of Medicine (IOM) Report: ‘‘Human Health Risks with the Subtherapeutic Use of Penicillin or Tetracyclines in Animal Feed.’’ 

—6. 1997 World Health Organization (WHO) Report, ‘‘The Medical Impact of Antimicrobial Use in Food Animals.’’ http://whqlibdoc.who.int/hq/1997/ 

WHOlEMClZOOl97.4.pdf 

—7. 1999 National Research Council (NRC) Report: ‘‘The Use of Drugs in Food 

Animals—Benefits and Risks.’’ 

—8. 1999 United States Government Accountability Office (GAO) Report—‘‘Food 

Safety: The Agricultural Use of Antibiotics and Its Implications for Human 

Health.’’ http://www.gao.gov/archive/1999/rc99074.pdf 

—9. 1999 European Commission Report, ‘‘Opinion of the Scientific Steering Committee on Antimicrobial Resistance.’’ http://ec.europa.eu/food/fs/sc/ssc/ 

out50len.pdf 

—10. 2000 World Health Organization (WHO) Expert Consultation: ‘‘WHO Global 

Principles for the Containment of Antimicrobial Resistance in Animals Intended 

for Food.’’ http://whqlibdoc.who.int/hq/2000/WHOlCDSlCSRlAPHl 2000.4.pdf 

—11. 2003 Report, ‘‘Joint FAO/OIE/WHO Expert Workshop on Non-Human Antimicrobial Usage and Antimicrobial Resistance: Scientific assessment.’’ http:// 

www.who.int/foodsafety/publications/micro/en/amr.pdf 

—12. 2003 Institute of Medicine (IOM) Report, ‘‘Microbial Threats to Health: 

Emergence, Detection and Response.’’ 

—13. 2004 Report, ‘‘Second Joint FAO/OIE/WHO Expert Workshop on NonHuman Antimicrobial Usage and Antimicrobial Resistance: Management options.’’ http://www.oie.int/fileadmin/Home/eng/ConferenceslEvents/docs/pdf/ 

WHO-CDS-CPE-ZFK-2004.8.pdf 

—14. 2004 United States Government Accountability Office (GAO) Report—‘‘Antibiotic Resistance: Federal Agencies Need to Better Focus Efforts to Address 

Risks to Humans from Antibiotic Use in Animals.’’ http://www.gao.gov/ 

new.items/d04490.pdf 

—15. 2005 Codex Alimentarius Commission (Codex), ‘‘Code of Practice to Minimize and Contain Antimicrobial Resistance.’’ http://www.codexalimentarius.net/ 

download/standards/10213/CXPl061e.pdf 

—16. 2006 Antimicrobial Resistance: Implications for the Food System, Comprehensive Reviews in Food Science and Food Safety, Vol. 5, 2006. 

—17. 2009. American Academy of Microbiology. Antibiotic Resistance: An Ecological Perspective on an Old Problem. 1752 N Street, NW, Washington, DC 20036, 

(http://www.asm.org). 

—18. 2011. Tackling antibiotic resistance from a food safety perspective in Europe. World Health Organization (WHO), Regional Office for Europe 

Scherfigsvej 8, DK–2100 Copenhagen ;, Denmark. http://www.euro.who.int/ 

data/assets/pdflfile/0005/136454/e94889.pdf 

—19. 2008. Longitudinal study of antimicrobial resistance among Escherichia coli 

isolates from integrated multisite cohorts of humans and swine. Alali WQ, Scott 

HM, Harvey RB, Norby B, Lawhorn DB, Pillai SD. Applied and Environmental 

Microbiology. 74(12):3672–81. 

—20. 2008. Diversity and distribution of commensal fecal Escherichia coli bacteria 

in beef cattle administered selected subtherapeutic antimicrobials in a feedlot 

setting. Sharma R, Munns K, Alexander T, Entz T, Mirzaagha P, Yanke LJ, 

Mulvey M, Topp E, McAllister T. Applied and Environmental Microbiology. 

74(20):6178–86. 

—21. 2008. Effect of subtherapeutic administration of antibiotics on the prevalence of antibiotic-resistant Escherichia coli bacteria in feedlot cattle. Alexander, 

T.W., L.J. Yanke, E. Topp, M.E. Olson, R.R. Read, D.W. Morck, and T.A. 

McAllister. Applied and Environmental Microbiology. 74:4405–4416. 

—22. 2009. A metagenomic approach for determining prevalence of tetracycline 

resistance genes in the fecal flora of conventionally raised feedlot steers and 

feedlot steers raised without antimicrobials. Harvey, R., J. Funk, T.E. Wittum, 

and A.E. Hoet. American Journal of Veterinary Research. 70:198–202. 

—23. 2009. Association between tetracycline consumption and tetracycline resistance in Escherichia coli from healthy Danish slaughter pigs. Vieira, A.R., H. 

Houe, H.C. Wegener, D.M. Lo Fo Wong, and H.D. Emborg. Foodborne Pathogens and Disease. 6:99–109. 
150 

—24. 2009. Associations between reported on-farm antimicrobial use practices and 

observed antimicrobial resistance in generic fecal Escherichia coli isolated from 

Alberta finishing swine farms. Varga C., A. Rajic, M.E. McFall, R.J. Reid-Smith, 

A.E. Deckert, S.L. Checkley, and S.A. McEwen. Preventive Veterinary Medicine. 

88:185–192. 

—25. 2010. Farm-to-fork characterization of Escherichia coli associated with feedlot cattle with a known history of antimicrobial use. Alexander, T.W., G.D. Inglis, L.J. Yanke, E. Topp, R.R. Read, T. Reuter, and T.A. McAllister. International Journal of Food Microbiology. 137:40–48. 

—26. 2011. Lower prevalence of antibiotic-resistant Enterococci on U.S. conventional poultry farms that transitioned to organic practices. Sapkota AR, Hulet 

RM, Zhang G, McDermott P, Kinney EL, Schwab KJ, Joseph SW. Environ 

Health Perspect. 119(11):1622–8. 

—27. 2011. Association between antimicrobial resistance in Escherichia coli isolates from food animals and blood stream isolates from humans in Europe: An 

ecological study. Foodborne Pathogens and Disease. Vieira, A.R., P. Collignon, 

F.M. Aarestrup, S.A. McEwen, R.S. Hendriksen, T. Hald, and H.C. Wegener. 

8:1295–1301. 

—28. 2011. Distribution and characterization of ampicillin- and tetracycline-resistant Escherichia coli from feedlot cattle fed subtherapeutic antimicrobials. 

Mirzaagha P, Louie M, Sharma R, Yanke LJ, Topp E, McAllister TA. BMC 

Microbiol. 19;11:78. 

—29. 2012. In-feed antibiotic effects on the swine intestinal microbiome. Looft, T., 

T.A. Johnson, H.K. Allen, D.O. Bayles, D.P. Alt, R.D. Stedtfeld, W.J. Sul, T.M. 

Stedtfeld, B. Chai, J.R. Cole, S.A. Hashsham, J.M. Tiedje, and T.B. Stanton. 

Proceedings of the National Academy of Sciences USA. 109:1691–1696. 

FDA also considered other studies that were referenced by the Department of 

Health and Human Services in response to 2004 United States Government Accountability Office (GAO) report entitled, ‘‘Antibiotic Resistance: Federal Agencies 

Need to Better Focus Efforts to Address Risks to Humans from Antibiotic Use in 

Animals’’: 

—1. Phillips I, Casewell M, Cox T, et al. Does the use of antibiotics in food animals pose a risk to human health? A critical review of published data. J 

Antimicrob Chemother, 2004; 53:28–52. 

—2. Holmberg SD, Wells JG, Cohen ML. Animal-to-man transmission of antimicrobial-resistant Salmonella: Investigations of U.S. outbreaks, 1971–1983. 

Science, 1984; 225:833–5. 

—3. Holmberg SD, Solomon SL, Blake PA. Health and economic impacts of antimicrobial resistance. Rev Infect Dis, 1987; 9:1065–78. 

—4. Lee LA, Puhr ND, Maloney K, et al. Increase in antimicrobial-resistant Salmonella infections in the United States, 1989–1990. J Infect Dis, 1994;170:128– 

34. 

—5. Varma J, M<lbak K, Rossiter S, et al. Antimicrobial resistance in Salmonella 

is associated with increased hospitalization; NARMS 1996–2000. International 

Conference on Emerging Infectious Diseases. March 2002. Atlanta, Georgia. 

—6. Varma J, M<lbak K, Rossiter S, et al. Antimicrobial resistance in nontyphoidal Salmonella is associated with increased hospitalization and bloodstream infection—United States, 1996–2000. 51st Annual EIS Conference. April 

22–26, 2002. Atlanta, Georgia. 

—7. Helms M, Vastrup P, Gerner-Smidt P, M<lbak K. Excess mortality associated 

with antimicrobial drug-resistant Salmonella Typhimurium. Emerg Infect Dis, 

2002; 8:490–5. 

—8. Martin L, Fyfe M, Dor ́e K, et al. Increased burden of illness associated with 

antimicrobial-resistant Salmonella enterica serotype Typhimurium infections. J 

Infect Dis, 2004; 189:377–84. 

—9. Smith KE, Besser JM, Hedberg CW, et al. Quinolone-resistant Campylobacter 

jejuni infections in Minnesota, 1992–1998. N Engl J Med, 1999; 340:1525–32. 

—10. Neimann J, M<lbak K, Engberg J, et al. Longer duration of illness among 

Campylobacter patients treated with fluoroquinolones. 11th International Workshop on Campylobacter, Helicobacter, and Related Organisms, 1–5 September, 

2001. Freiburg, Germany. 

—11. Nelson JM, Smith KE, Vugia DJ, et al. Prolonged diarrhea due to 

ciprofloxacin-resistant Campylobacter infections. J Infect Dis, 2004; in press. 
151 

QUESTIONS SUBMITTED BY SENATOR JOHN HOEVEN

Question. I would like to ask you about the Food and Drug Administration’s 

(FDA’s) lack of enforcement action against companies that market products as being 

eyelash growth promoters, without FDA approval, when those products contain 

prostaglandin analogues (PGAs) or derivatives of PGAs. North Dakota has ophthalmologists who prescribe Latisse, the FDA-approved drug counterpart to these cosmetic products and I am concerned these alternative cosmetic products may pose a 

public health threat to those that purchase them, such that additional enforcement 

action may be beneficial. 

I understand that this issue was raised before the House Appropriations Subcommittee on Agriculture on February 29, 2012, and you stated that you planned 

to further investigate the issue. 

What have you and the agency done since that hearing in February to address 

this issue and, if necessary, to protect consumers? 

Answer. Consistent with FDA priorities, resources, and legal authorities, FDA’s 

objective is to identify, investigate, and take corrective action against violative products. If violations are identified, FDA uses a variety of enforcement tools to address 

these violations and to facilitate compliance and protect the public health. These 

tools include but are not limited to warning letters, seizures, injunctions, and criminal prosecution. We appreciate and share your concerns about the potential risks 

posed by eyelash products that contain PGAs or their derivatives and are marketed 

as cosmetics. FDA will communicate information regarding any action taken related 

to these products when that information is available for disclosure. 

Question. Would the agency be willing to release a public health advisory about 

the health risks associated with the products so that the State Attorneys General 

can police the sale of these products, if necessary? 

Answer. FDA shares your concern about these PGA-containing products marketed 

as cosmetics. FDA is considering your suggestion and is committed to protecting the 

public from potential harm. We encourage the ophthalmologists in your State to 

submit any adverse events related to these PGA-containing eyelash products to 

FDA’s Medwatch Adverse Event Reporting program. 

QUESTIONS SUBMITTED BY SENATOR FRANK R. LAUTENBERG

Question. The Family Smoking Prevention and Tobacco Control Act of 2009 specifically banned candy flavorings in cigarettes. Now, tobacco companies are using 

flavored cigars to encourage kids to smoke. Cigars with candy-like flavorings such 

as strawberry, watermelon, vanilla, and chocolate attract kids to smoking and help 

hook them on this addictive habit. An estimated 1.8 million high school students 

and 475,000 middle school students smoke cigars. The Centers for Disease Control 

(CDC) estimates that, in 13 States, more high school males smoke cigars than 

smoke cigarettes. Does the Food and Drug Administration (FDA) believe youth cigar 

smoking is a problem? What is the agency doing to stop this epidemic and appropriately regulate flavored cigars? 

Answer. The restriction on cigarettes with characterizing flavors is in effect and 

is actively being enforced. With respect to products other than cigarettes, FDA is 

pursuing a proposed rule to deem all products meeting the statutory definition of 

‘‘tobacco product’’ to be subject to the Food, Drug, and Cosmetic Act (FD&C Act). 

This would enable FDA to take further action with respect to flavorings in other 

tobacco products if FDA concludes that it is appropriate to do so in order to protect 

the public health. 

FDA is currently engaged in research that is exploring the role that flavorings 

play in prompting the initiation and use of various tobacco products, particularly 

among youth. FDA is also continuing to evaluate the impact of menthol on youth 

initiation, and will determine what action, if any, is appropriate based on the scientific evidence. 

Question. The myth of the healthier cigarette continues to threaten the well-being 

of Americans. For decades, tobacco companies claimed that some cigarettes were 

‘‘light,’’ ‘‘mild,’’ or ‘‘low,’’ misleading Americans about the safety of the products. The 

Family Smoking Prevention and Tobacco Control Act helped put an end to this deceptive marketing, specifically prohibiting companies from using terms like ‘‘light,’’ 

‘‘mild,’’ ‘‘low,’’ or ‘‘similar descriptors.’’ However, the agency has failed to offer any 

regulations or guidance restricting the use of ‘‘similar descriptors,’’ and cigarette 

companies continue to use words like ‘‘natural,’’ ‘‘organic’’ and ‘‘smooth’’ to mislead 

consumers about the health of their products. When does the agency plan to issue 

guidance or regulations on the use of ‘‘similar descriptors’’? What is the FDA doing 

to prevent this deceptive marketing? 
152 

Answer. FDA has been actively enforcing the modified risk tobacco product provisions of the FD&C Act, particularly the provisions that pertain to reduced risk of 

disease, reduced level or lack of a substance, and the use of the descriptors ‘‘light,’’ 

‘‘low,’’ and ‘‘mild’’ on regulated tobacco product label, labeling, and advertising. FDA 

has not, at this time, issued a regulation or guidance that specifically defines the 

term ‘‘similar descriptors’’ and has been gathering information regarding descriptors 

that may be considered similar to ‘‘light,’’ ‘‘low,’’ or ‘‘mild’’ and could impact consumer perceptions of risk. This will help inform FDA’s implementation and enforcement of the modified risk tobacco product provision, which could include, for example, providing additional guidance. 

FDA is in the process of conducting consumer perception studies on terms that 

could be considered ‘‘similar descriptors.’’ FDA will continue to pursue violations for 

label, labeling, or advertising where FDA has sufficient evidence of claims that the 

product presents a lower risk of tobacco related disease, a reduced level of or exposure to a substance, or is free of or does not contain a substance. 

Question. Roll-your-own cigarette shops allow customers to make their own cigarettes. These stores exist in at least 15 States, including New Jersey, and I am concerned that these shops may be violating Federal cigarette laws and regulations by 

marketing their cigarettes as ‘‘healthier’’ and not appropriately restricting access to 

only those 18 and older. FDA has yet to assert its authority over the cigarettes produced in these shops. Is FDA aware of the proliferation of roll-your-own shops? Does 

the agency believe these shops are currently in violation of Federal law? 

Answer. FDA is aware of retail establishments with roll-your-own cigarette machines that permit customers to make their own cigarettes and is gathering more 

information about this practice to determine the appropriate regulatory response. 

Question. Under the Tobacco Control Act, the FDA has the authority to regulate 

tobacco products, but, without an important ‘‘deeming’’ regulation, the agency’s jurisdiction extends to only a small set of products. Products like cigars, hookah tobacco, dissolvable tobacco, and electronic cigarettes remain unregulated by FDA, 

putting Americans’ health at risk. Last year, FDA committed to issuing a ‘‘deeming’’ 

regulation by October 2011 that would extend its rightful regulatory authority over 

these of tobacco products. What is the status of this important regulation? Why is 

this regulation now 6 months overdue? 

Answer. The Tobacco Control Act provided FDA with immediate authority to regulate cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. The 

act also authorizes FDA to deem, by regulation, other tobacco products to be subject 

to chapter IX of the Food, Drug, and Cosmetic Act or FD&C Act. FDA has publicly 

announced its intention to deem all products that meet the statutory definition of 

tobacco product to be subject to the FD&C Act. Deeming would ensure that all tobacco products are subject to FDA’s tobacco control authority, which will help to address existing regulatory gaps. 

In the February 2012 edition of the Unified Agenda, FDA included an entry for 

a proposed rule that would deem products meeting the statutory definition of ‘‘tobacco product’’ to be subject to chapter 9 of the FD&C Act. 

While FDA cannot comment on the details of pending rulemaking, FDA continues 

to work diligently to issue the proposed rule in the near future. It is important to 

note that the process for issuing any proposed rule on this issue will provides the 

opportunity for public comment as part of the rulemaking process. FDA routinely 

allows a minimum of 60 days for public comment and carefully considers these comments when it develops the final rule. 

CONCLUSION OF HEARINGS

Senator KOHL. This hearing is recessed. 

[Whereupon, at 3:24 p.m., Thursday, April 19, the hearings were 

concluded, and the subcommittee was recessed, to reconvene subject to the call of the Chair.] 
(153) 

AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

FISCAL YEAR 2013 

U.S. SENATE, 

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR 

FORMAL HEARINGS 

[CLERK’S NOTE.—The following agency and related agency of the 

Department of Agriculture did not appear before the subcommittee 

this year. The following submitted testimonies are in support of 

their fiscal year 2013 budget requests.] 

DEPARTMENT OF AGRICULTURE 

OFFICE OF INSPECTOR GENERAL

PREPARED STATEMENT OF HON. PHYLLIS K. FONG, INSPECTOR GENERAL

I am pleased to submit testimony to Chairman Kohl, Ranking Member Blunt, and 

members of the subcommittee concerning the Office of Inspector General’s (OIG) fiscal year 2013 budget request. My statement will also provide the subcommittee with 

the highlights of OIG’s recent and planned audit and investigative work. 

OIG’s oversight work continues to achieve substantial and far-reaching results. In 

fiscal year 2011, our audit and investigative work obtained potential monetary results totaling over $4.3 billion. We issued 45 audit reports intended to strengthen 

Department of Agriculture (USDA) programs and operations, which produced about 

$4.2 billion in potential results. OIG investigations led to 449 convictions with potential results totaling almost $113.6 million. These large monetary results far surpass our annual budget, which was $88.5 million in fiscal year 2011. 

The first part of my statement describes our ongoing work to assess and improve 

the Department’s programs and operations under the American Recovery and Reinvestment Act of 2009 (Recovery Act). I will then summarize our most significant recent audit and investigative activities under our major strategic goals. My statement concludes with a description of the cost-saving actions OIG is taking in fiscal 

year 2012 to live within its budget constraints, as well as a summary of the President’s fiscal year 2013 budget request for OIG. 

OIG’S OVERSIGHT OF RECOVERY ACT PROGRAMS

With the additional funds this subcommittee appropriated for Recovery Act oversight, we have been able to perform a comprehensive review of USDA programs intended to ensure that the $28 billion in Recovery Act funds provided to USDA 

served their intended purpose. Notably, the funds OIG received allowed us to perform more audits with statistical samples. Sampling enables us to obtain a ‘‘bird’s 

eye view’’ of how a program is operating and draw more detailed and accurate conclusions concerning whether a program is functioning effectively or not. 
154 

Recovery Act Single Family Housing Direct Loan Program 

OIG is at the end of a review of the $1 billion the Recovery Act allotted to single 

family housing direct loans. These loans are intended to help very-low- and low-income households buy homes when they cannot qualify for other credit. Based on a 

statistical sample of 100 loans, we identified 18 loans where we questioned the borrower’s eligibility because field personnel had not ensured that borrowers were likely to repay their loans. Based on our overall sample results, we estimate that 1,450 

loans (18 percent of the single family housing direct loans), with a projected total 

value of $173 million, may have similar issues that will result in increased risk of 

default. We recommended that Rural Development (RD) strengthen its controls to 

ensure that it lends only to qualified applicants, and agency officials generally 

agreed. 

Recovery Act Business and Industry (B&I) Guaranteed Loan Program 

The Recovery Act provided an additional $130 million in budget authority for RD’s 

B&I guaranteed loan program, which seeks to finance business and industry in 

rural communities by guaranteeing quality loans. With this authority, the agency 

guaranteed a total of 515 loans across 47 States, and obligated more than $1.5 billion in Recovery Act funds. Our analysis of 55 statistically sampled loans found that 

68 percent of applications were given unmerited priority for loan approval, and that 

65 percent of requests for Recovery Act-funded B&I loan guarantees were reviewed 

inadequately because key financial data were not documented. As a result, the agency faces significant financial obligations if the borrowers default. Additionally, RD 

awarded guarantees to at least two loans, valued at $6.2 million, which do not comply with eligibility regulations. Agency officials agreed with OIG’s recommendations 

to improve how these loans are made. 

Upcoming Recovery Act Reports 

At present, we are starting the final phase of our Recovery Act audit objectives, 

which emphasizes how agencies are reporting their programs’ accomplishments. 

Specifically, our work focuses on the performance measures being used to report 

these accomplishments, such as whether the funds contributed to creating or saving 

jobs. 

But the value of our oversight will not expire with the end of Recovery Act funding. When we identify a problem with a program receiving Recovery Act funding, 

we are often helping to improve the overall program’s performance for the future, 

whether the dollar spent is from a Recovery Act appropriation or not. 

Similarly, we anticipate that our investigative work will continue in this area 

even after Recovery Act funding is no longer available. Our goal remains to timely 

identify and look into potential fraud involving USDA Recovery Act funds, including 

the prompt investigation of allegations of whistleblower reprisal, as set forth in the 

Recovery Act. Since the passage of the act, OIG has received 60 hotline complaints 

from various sources and initiated several ongoing investigations. 

GOAL 1: STRENGTHEN USDA’S SAFETY AND SECURITY MEASURES FOR PUBLIC HEALTH

One of OIG’s most important oversight responsibilities is helping USDA ensure 

the wholesomeness of the U.S. food supply, and we continue to conduct audits and 

investigations intended to help USDA reduce the risk of food contamination and 

food-borne illnesses. For example, when Japan halted U.S. beef imports—worth 

more than $1 billion annually—due to the discovery of vertebrae in a shipment of 

beef product originating from a U.S. company, OIG and the Food Safety and Inspection Service (FSIS) jointly conducted an investigation. As a result of our work, the 

Government filed a civil complaint charging the company with violations of the Federal Meat Inspection Act. In 2011, permanent injunctive relief and escalating monetary penalties were granted in an effort to prevent the company from committing 

future violations. 

The Food Emergency Response Network (FERN) 

In our 2011 audit of FERN—a program that was developed to integrate the Nation’s food testing laboratories into a network able to respond to emergencies involving biological, chemical, or radiological contaminants, we found that FSIS, in coordination with the Food and Drug Administration, needs to take steps to formalize 

FERN, ensure that the program’s laboratory capacity is sufficient to respond to 

emergency surges, and implement targeted surveillance of the food supply. Such 

surveillance should benefit the network by ensuring that emergency response personnel are able to execute their assigned tasks. Generally, FSIS agreed with our recommendations, and took steps to initiate a more robust program of targeted food 

surveillance. 
155 

1Trafficking is the illegal exchange of SNAP benefits for cash. 

2The 10 States are Alabama, Florida, Kansas, Louisiana, Massachusetts, Mississippi, Missouri, New Jersey, New York, and Texas. 

We are finalizing a second report on efforts to improve how FSIS tests ground 

beef for Escherichia coli O157:H7. In our February 2011 report on this topic, OIG 

made recommendations to FSIS concerning how it samples beef so that the agency 

could improve the accuracy of its tests. In Phase 2, we are visiting beef slaughter 

plants and analyzing how the beef industry’s sampling and testing protocols vary 

among plants and whether they differ from FSIS standards. 

In addition to food safety, assuring the personal safety of USDA employees is 

paramount. In January 2011, an OIG investigation disclosed that, from 2009 

through 2010, a USDA official sexually assaulted his female subordinate on multiple 

occasions. In February 2011, this official was charged in Federal court with four 

counts of aggravated sexual assault. He pled guilty in March 2011 to one misdemeanor count of sexual assault and in April 2011 was sentenced to 5 months’ incarceration. 

GOAL 2: STRENGTHENING PROGRAM INTEGRITY AND IMPROVING BENEFIT DELIVERY

One of OIG’s most important goals is helping USDA safeguard its programs and 

ensuring that benefits are reaching those they are intended to reach. This year we 

have made a concerted effort to help improve the integrity of the Supplemental Nutrition Assistance Program (SNAP). 

Trafficking in SNAP Benefits1

In fiscal year 2011, OIG devoted about 46 percent of its investigative resources 

to SNAP-related criminal investigations, and our investigations resulted in 179 convictions and monetary results totaling $26.5 million. In a recent example, OIG 

worked jointly with Immigration and Customs Enforcement to determine whether 

a SNAP retailer was engaged in a conspiracy to defraud SNAP through trafficking, 

wire fraud, money laundering, and operating an unlicensed money transmitting 

business. The investigation revealed that the SNAP retailer trafficked at least $3.1 

million in SNAP benefits. In January 2012, the owner was sentenced to 46 months 

of incarceration, and ordered to pay $2.5 million in restitution. 

OIG also is working to minimize fraud, waste, and abuse within SNAP by performing a series of data mining audits analyzing 10 States’ participant databases.2

We have completed work in seven States—Kansas, Florida, Louisiana, Alabama, 

Mississippi, Missouri, and Texas—and found a total of 13,936 recipients who were 

receiving potential improper payments. We estimate that these recipients could be 

receiving a total of about $1.9 million a month. 

In our reports, we have recommended that the Food and Nutrition Service (FNS) 

require State agencies to ensure they use a national database to perform death 

matches and social security number verifications, and that they perform checks to 

make sure information is entered correctly. Generally, FNS agreed with our recommendations and is taking appropriate action. 

Due to congressional interest in the early results of this work, we expanded the 

scope of our audit work to include evaluating the adequacy of FNS and State tools 

to prevent and detect SNAP fraud, determining whether the States are using all 

available tools, and identifying and evaluating the integrity of amounts reported for 

recipient and retailer fraud. 

Improper Payments at USDA 

OIG also continues to work on reducing the rate and volume of improper payments in USDA. In 2011, we released our first required report focusing on ‘‘highdollar’’ overpayments in high-risk programs. Our review found that USDA submitted its fiscal year 2010 high-dollar overpayment reports after the deadline, did 

not report all high-dollar overpayments, and did not accurately report its corrective 

actions. We recommended that the Department and its agencies take steps to formalize and improve their reporting processes, and the Department concurred with 

our recommendations. 

Participants Who Abuse USDA Programs 

In addition to improper payments, we often investigate program participants who 

provide false information to USDA agencies to obtain payments to which they are 

not entitled. In one such investigation, OIG found that a large number of farmers 

in North Carolina concealed their production and then subsequently filed false crop 

insurance claims based on non-existent losses. This was a far-reaching conspiracy, 

involving farmers, warehouse operators, insurance agents, and loss adjusters, all of 
156 

whom assisted in filing false claims and concealing the farmers’ actual production. 

To date, 24 individuals have pled guilty to various crimes in Federal court and, in 

total, have been ordered to pay $19.8 million in restitution, fines, and forfeiture. 

I would also like to note an especially significant case involving mortgage fraud 

in which employees of a Michigan mortgage company issued 271 guaranteed single 

family home loans, valued at over $38 million. OIG’s investigation disclosed that at 

least 63 percent of the loans reviewed were based on false borrower income certifications, fraudulent pay statements, forged application signatures, and altered credit 

scores. These bogus documents were subsequently provided to RD for loan guarantees. Over 5 years, approximately 40 of these loans defaulted, resulting in RD paying out over $2.3 million in guarantees. As a result of this case, four individuals 

received sentences ranging from 2 years of probation to 18 months in prison and 

have been ordered to pay $8.7 million in restitution. 

Upcoming Work 

OIG has several particularly significant audits in process. First, we are completing fieldwork on participant eligibility and vendor management in the Special 

Supplemental Nutrition Program for Women, Infants, and Children. The overall objective of this audit is to evaluate implementation of food delivery regulations intended to improve the integrity of vendor management, and assess how FNS determines if participants are eligible for the program. 

We are also in the process of completing work on the Farm Service Agency’s (FSA) 

Conservation Reserve Program, which provides incentives to farmers to maintain 

conservation practices to prevent soil erosion and chemical run-off. Our audit was 

designed to inform Congress and USDA whether FSA has effective controls in place 

to ensure that the rates used to pay benefits to these farmers were reasonable. 

GOAL 3: OIG WORK IN SUPPORT OF MANAGEMENT INITIATIVES

OIG works to improve the processes and systems the Department needs to function. USDA must manage vast amounts of data associated with its many programs 

and operations, information that ranges from agricultural statistics that drive domestic and global markets to inspection systems that help ensure our food is safe. 

As you are aware, USDA is facing many challenges to operating information technology (IT) that complies with all Federal requirements. 

Security Challenges Concerning Smartphones 

Like other Federal departments, USDA increasingly relies on smartphones and 

other handheld wireless devices to conduct its day-to-day business, but we found 

that many of these devices were not secured properly and were vulnerable to security breaches. Of approximately 10,000 wireless handheld devices USDA uses, we 

reviewed 277 devices and found that all 277 devices were not adequately secured. 

We recommended that USDA ensure that agencies better understand how to configure their wireless devices to meet Federal standards, and departmental officials 

agreed. 

IT Contracting 

During the course of the fiscal year 2011 Federal Information Security Management Act audit, OIG found that a contracting officer in USDA’s Information Technology Contracting Branch signed a contract that exceeded a $5 million warrant authority and resulted in an unauthorized commitment. We also learned that this contracting officer acted outside of a contracting officer’s roles and responsibilities; disclosed sensitive contractual information to vendors; and authorized a contractor to 

work even though funding was not available. We recommended that USDA take 

steps to rectify this situation, and also ensure that its contracting officials do not 

exceed their authority in the future. USDA concurred with our findings and recommendations and has provided a corrective action plan. 

Employee Integrity 

While the vast majority of USDA employees go about their work with the highest 

standards of integrity, OIG investigates allegations of wrongdoing when an employee is accused of breaking the law. In 2011, a former Forest Service accountant 

was sentenced to 4 years of incarceration for mail fraud, and was ordered to pay 

restitution of $1.1 million. These charges resulted from a year-end review that disclosed more than $600,000 missing from funds the agency collected to provide a 

service to private vendors in one of the national forests in California. OIG’s investigation revealed that the accountant had embezzled approximately $1.4 million by 

redirecting funds from multiple private vendor accounts to a corporation she and 

her husband owned. 
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Upcoming Work 

As required by law, OIG has begun conducting a performance audit based on a 

statistical sample of adjudicated claims from In re Black Farmers Discrimination 

Litigation, the discrimination litigation commonly known as Pigford 2. 

GOAL 4: IMPROVING USDA’S STEWARDSHIP OF NATURAL RESOURCES

Our audit of the Natural Resources Conservation Service’s (NRCS) Farm and 

Ranchlands Protection Program—a program that keeps selected parcels of land from 

being developed for housing or other non-agricultural purposes—found that NRCS 

accepted conservation easement appraisals even though they did not meet standards 

or were unsupported. Although appraisals should reflect the current value of the 

land, we found that the State Conservationist did not note that many conservation 

easements had appraisals that were too outdated to be accurate. We recommended 

that the NRCS State office improve its oversight processes to ensure that payments 

are not made to cooperating entities using invalid appraisals, and take more timely 

action when a cooperating entity submits appraisals that do not meet standards. 

Agency officials agreed. 

An OIG investigation of this program resulted in a land trust organization in Wisconsin entering into a settlement agreement to pay $50,000 to partly reimburse 

NRCS for overpayments caused by false statements submitted by the organization’s 

former executive director. These false statements led to NRCS paying too much to 

purchase conservation easements from four Wisconsin landowners participating in 

the program. 

Upcoming Work 

OIG is reviewing how NRCS is using Recovery Act and non-Recovery Act funds 

to rehabilitate aging dams across the country. In 2009, we reported serious issues 

with how NRCS was prioritizing dams for rehabilitation—the agency was not always focusing first on dams that, if they failed, might cause serious loss of life. Our 

current audit will evaluate whether NRCS has implemented the recommendations 

from our prior audit, and whether NRCS has more effectively used subsequent 

funds. 

OIG’S FISCAL YEAR 2013 BUDGET REQUEST

Since 2011, OIG has responded to the call to reduce Government spending while 

building a stronger and more efficient agency. We have taken a number of steps to 

increase our effectiveness within our limited budget: 

—We approved voluntary buyouts and early retirements for 21 employees during 

the first quarter of fiscal year 2012, and are seeking authority for 30 more to 

offset the reduction in available funds as OIG’s Recovery Act funding expires 

in December 2012. 

—We are using alternatives to Government travel, including teleconferencing and 

videoconferencing, which allowed us to reduce our travel expenditures by $1.1 

million, or 49 percent, during both fiscal year 2011 and fiscal year 2012. 

—We reduced the amount we spend on training by $203,000, or 33 percent, by 

relying more on the training that we provide our employees ‘‘in-house.’’ 

—We have reorganized and restructured to streamline business operations within 

the agency to better focus on high-priority work. As vacancies arise, we have 

filled only key positions. 

—We have taken steps to reduce our telecommunications costs, including 

inventorying all phone lines and disconnecting unused lines. We also have consolidated contracts for smartphones and copiers to achieve greater efficiency. 

Thanks to this work, we are a leaner and more effective agency that is better able 

to carry out our mission. For example, our improved efficiency allows us to reinvest 

in IT infrastructure and obtain more communication services, such as bandwidth, 

with the same money we used to pay for basic phone lines. 

We ask that you support the President’s fiscal year 2013 budget request of $89 

million for OIG, which would enable us to provide effective oversight of USDA programs and help ensure that tax dollars are being well spent. 

The President’s budget request includes modest increases in areas where we 

should be able to produce a high-value return for a relatively small investment: 

—$800,000 to support statistical samples in audits of improper payments. Statistical sampling allows OIG to project the results of our audit work to the entirety 

of a program, which multiplies our work’s range and effectiveness, especially for 

very large programs like SNAP. 
158 

—$1,072,000 to fund an OIG initiative to address SNAP fraud. OIG investigative 

teams plan to more actively engage State and local authorities and pursue the 

prosecution of both retailers and recipients involved in benefit trafficking. —$613,000 to fund enhanced oversight of USDA’s international programs. 

—$468,000 to support the Council of the Inspectors General on Integrity and Efficiency by funding Government-wide activities to identify vulnerabilities in Federal programs. 

From fiscal year 2006 to 2011, the potential dollar impact of OIG audits and in- vestigations has been $5.7 billion, while our appropriations have been $502.5 million. For every $1 invested, we have realized potential cost-savings and recoveries 

of about $11.42. This calculation does not include the value of our food safety work 

and program improvement recommendations, which are not so easily quantified. 

This concludes my remarks. Thank you again for the opportunity to submit a 

statement to the subcommittee regarding our fiscal year 2013 budget request. I 

would be pleased to address questions that members and staff may have about our 

request, and our continuing audit and investigatory activities pertaining to USDA 

operations. 

RELATED AGENCY 

FARM CREDIT ADMINISTRATION

PREPARED STATEMENT OF LELAND A. STROM, CHAIRMAN AND CHIEF EXECUTIVE

OFFICER

Mr. Chairman, Members of the Subcommittee, I am Leland A. Strom, Chairman 

and Chief Executive Officer of the Farm Credit Administration (FCA or Agency). On 

behalf of my colleagues on the FCA Board, Kenneth Spearman of Florida and Jill 

Long Thompson of Indiana, and all the dedicated men and women of the Agency, 

I am pleased to provide this testimony. 

Before I discuss the Agency’s role, responsibilities, and budget request, I would 

like to thank the Subcommittee staff for its assistance during the budget process. 

Also, I would respectfully bring to the Subcommittee’s attention that the funds used 

by FCA to pay its administrative expenses are assessed and collected annually from 

the Farm Credit System (FCS or System) institutions we regulate and examine— 

the FCS banks, associations, and service corporations, and the Federal Agricultural 

Mortgage Corporation (Farmer Mac). FCA does not receive a Federal appropriation. 

Earlier this fiscal year, the Agency submitted a proposed total budget request of $64,130,601 for fiscal year 2013. FCA’s proposed budget for fiscal year 2013 includes 

funding from current and prior assessments of $63,300,000 on System institutions, 

including Farmer Mac. Almost all this amount (approximately 83 percent) goes for 

salaries, benefits, and related costs. 

A key factor driving the fiscal year 2013 budget is the Agency’s need to hire and 

train qualified individuals to replace the many employees who are expected to retire 

soon. We must ensure that our staff has the skills it needs to address changes in 

the agricultural industry and the complexities of agricultural finance. Also, changes 

in the organization and structure of the System itself are presenting challenges. On 

January 1, 2012, two System banks merged, representing the largest merger in the 

history of the FCS. As System institutions continue to merge and grow larger and 

more complex, the Agency must dedicate more resources to examining and overseeing these institutions. The funding we have requested for fiscal year 2013 will 

allow us to hire and train the people we need to continue to properly examine, oversee, and regulate the System. 

MISSION OF THE FARM CREDIT ADMINISTRATION

As directed by Congress, FCA’s mission is to ensure a safe, sound, and dependable 

source of credit and related services for agriculture and rural America. The Agency 

accomplishes its mission in two important ways. First, FCA protects the safety and 

soundness of the FCS by examining and supervising all FCS institutions, including 

Farmer Mac, and ensures that the institutions comply with applicable laws and regulations. Our examinations and oversight strategies focus on an institution’s financial condition and any material existing or potential risk, as well as on the ability 

of its board and management to direct its operations. We also evaluate each institution’s compliance with laws and regulations to ensure that it serves all eligible borrowers, including young, beginning, and small farmers and ranchers. If a System 

institution violates a law or regulation or operates in an unsafe or unsound manner, 

we use our supervisory and enforcement authorities to take appropriate corrective 
159 

action. Second, FCA develops policies and regulations that govern how System institutions conduct their business and interact with customers. FCA’s policy and regulation development focuses on protecting System safety and soundness; implementing 

the Farm Credit Act; providing minimum requirements for lending, related services, 

investments, capital, and mission; and ensuring adequate financial disclosure and 

governance. The policy development program includes approval of corporate charter 

changes, System debt issuance, and other financial and operational matters. 

EXAMINATION PROGRAMS FOR FARM CREDIT SYSTEM BANKS AND ASSOCIATIONS

To help ensure the safety and soundness of FCS institutions, FCA uses examination and supervision processes to address material risks and emerging issues at the 

institution level and across the System. The Agency bases its examination and supervision strategies on institution size, existing and prospective risk exposure, and 

the scope and nature of each institution’s business model. We monitor agricultural, 

financial, and economic risks that may affect groups of institutions or the entire 

System. Given the increasing complexity and risk in the System and human capital 

challenges at FCA, we have undertaken a number of initiatives to improve operations, increase examination effectiveness, and enhance staff expertise in key examination areas. 

The frequency and depth of examination activities vary based on risk, but each 

institution receives a summary of examination activities and a report on its overall 

condition at least every 18 months. FCS institutions are required to have effective 

loan underwriting and loan administration processes, to properly manage assets and 

liabilities, to establish high standards for governance, and to provide transparent 

disclosures to shareholders. FCA’s examination and supervision program promotes 

accountability in FCS institutions by providing a framework to help institutions 

identify and manage risks. In addition, FCA is closely watching rapidly rising real 

estate values in certain sections of the country to ensure that FCS lending practices 

remain prudent. FCA may use its enforcement powers to effect changes in an institution’s policies and practices to correct unsafe or unsound conditions or violations 

of law or regulations. 

Source: FCA’s FIRS Ratings Database. The above chart includes only the System 

banks and their affiliated direct-lender associations. The figures in the bars reflect 

the number of institutions by FIRS rating. 

The Agency uses the Financial Institution Rating System (FIRS) to assess the 

safety and soundness of each FCS institution. The system provides a framework of 

component and composite ratings to help examiners evaluate significant financial, 

asset quality, and management factors. FIRS ratings range from 1 for a sound institution to 5 for an institution that is likely to fail. As the chart above indicates, the 

System remains financially strong overall. Institutions are well capitalized, and the 

FCS does not pose material risk to investors in FCS debt, the Farm Credit System 

Insurance Corporation, or to FCS institution stockholders. 
160 

Although the System’s condition and performance remain satisfactory overall, several institutions are experiencing stress and now require special supervision and enforcement actions. Factors causing the stress include weaknesses in the Nation’s 

economy and credit markets, a rapidly changing risk environment in certain agricultural segments, and, in certain cases, management’s ineffective response to these 

risks. We have increased supervisory oversight at a number of institutions and dedicated additional resources in particular to those 13 institutions rated 3 or worse. 

Although these institutions represent about 2 percent of System assets and do not 

meaningfully affect the System’s consolidated performance, they require significantly greater Agency resources to oversee. As of December 31, 2011, seven FCS institutions were under formal enforcement action, but no FCS institutions are in conservatorship or receivership. 

REGULATORY AND CORPORATE ACTIVITIES

Regulatory Activities.—Congress has given the FCA Board statutory authority to 

establish policy, prescribe regulations, and issue other guidance to ensure that FCS 

institutions comply with the law and operate in a safe and sound manner. The 

Agency is committed to developing balanced, flexible, and legally sound regulations. 

Current regulatory and policy projects include the following: 

—Revising regulations to implement the requirements of the Dodd-Frank Act; 

—Revising regulations to ensure that FCS funding and liquidity requirements are 

appropriate and to ensure that the discounts applied to investments reflect 

their marketability; 

—Revising regulations to require that each FCS institution’s business plan includes strategies and actions to serve all creditworthy and eligible persons in 

the institution’s territory and to achieve diversity and inclusion in its workforce 

and marketplace; 

—Enhancing our risk-based capital adequacy framework to make it more consistent with the Basel Accord and with that of other Federal financial regulating authorities; 

—Revising regulations to enhance System disclosures and compliance requirements for executive compensation, pension, and other benefit programs; 

—Strengthening investment-management regulations to ensure that prudent 

practices are in place for the safe and sound management of FCS investment 

portfolios; 

—Revising regulations to provide guidance on the statutory and regulatory authority related to rural community investments; 

—Revising regulations to provide the parameters under which an FCS institution 

may organize or invest in LLCs, LLPs, and other unincorporated business entities; 

—Clarifying and strengthening standards-of-conduct regulations; and 

—Revising regulations related to FCS bank and association mergers and consolidations. 

Corporate Activities.—Because of mergers, the number of FCS institutions has declined over the years, but their complexity has increased, placing greater demands 

on both examination staff resources and expertise. Generally, these mergers have 

resulted in larger, more cost-efficient, and better-capitalized institutions with a 

broad, diversified asset base, both by geography and commodity. Thus far in fiscal 

year 2012, two banks have merged, and two associations have merged. In addition, 

a new service corporation was chartered. As of January 1, 2012, the System had 

83 direct-lender associations, four banks, six service corporations, and two specialpurpose entities. 

CONDITION OF THE FARM CREDIT SYSTEM

The System remained fundamentally safe and sound in 2011 and is well positioned to withstand the continuing challenges affecting the general economy and agriculture. Total capital increased to $35.9 billion at September 30, 2011, up from 

$33.0 billion a year earlier. In addition, more than 81 percent of total capital is in 

the form of earned surplus, the most stable form of capital. The ratio of total capital 

to total assets increased to 15.8 percent at September 30, 2011, compared with 15.0 

percent the year before, as strong earnings allowed the System to continue to grow 

its capital base. 

Because of stronger agricultural profits, which reduced the need for farmers to 

borrow, the System experienced slower loan growth. In total, gross loans grew by 

1.3 percent over the 12-month period ended September 30, 2011, compared with 3.9 

percent during the previous period. Nonperforming loans decreased modestly to $3.3 

billion at the end of fiscal year 2011, representing 9.2 percent of total capital, down 
161 

from 11.3 percent a year earlier. However, although credit quality has been improving and is satisfactory overall, volatility in commodity prices, rising input prices, 

and weaknesses in the general economy pose continued risks to some agricultural 

operators, creating the potential for a reversal of this trend. 

The FCS earned $3.0 billion in the first 9 months of 2011, a 13.7 percent increase 

from the same period in 2010. Return on assets remained favorable at 1.7 percent. 

The System’s liquidity position increased from 172 days as of September 30, 2010, 

to 200 days a year later, remaining significantly above the 90-day regulatory minimum. The quality of the System’s liquidity reserves also improved in 2011. Further 

strengthening the System’s financial condition is the Farm Credit Insurance Fund, 

which holds almost $3.4 billion. Administered by the Farm Credit System Insurance 

Corporation, this fund protects investors in Systemwide consolidated debt obligations. 

U.S. agriculture just experienced back-to-back years of exceptional profitability. 

According to U.S. Department of Agriculture estimates, combined net farm income 

for 2010 and 2011 is 23 percent higher than for 2008 and 2009. Higher farm incomes reflect rising prices for key crops. However, farm prosperity has not been uniform—because of high feed costs, profits were lower for livestock producers than for 

crop producers. Despite continued financial stress among certain livestock enterprises, such as dairy, farm finances were generally strong going into 2012. While 

many farmers have significantly increased capital investments, they have done so 

using excess cash and limited their use of credit. For those farmers borrowing 

money, they are paying some of the lowest interest rates of their lifetime. 

U.S. farm incomes for 2012 may well hinge on the ability of farmers across the 

globe to expand production enough to alleviate tight world stocks of key crops. 

Greatly improved weather and higher plantings could turn shortages of key crops 

such as corn and soybeans into surpluses quickly, thus causing prices to fall. Meanwhile, future world economic growth and, hence, food demand, remains uncertain, 

as does the exchange value of the dollar and government policies that affect agriculture and energy. As a result, commodity prices will probably remain volatile. 

An increasing risk to the farm sector’s financial health is the persistent rise in 

production costs. The surge in farmland prices and rental rates have driven production costs even higher, especially over the past 2 years. This is most notable in the 

Midwest where corn and soybeans are the main enterprises. In some States, farmland prices now significantly exceed inflation-adjusted records. These prices could 

drop significantly if grain prices fall or interest rates climb. While the percentage 

of debt being used to purchase land appears to be modest, FCA continues to closely 

monitor farmland values and associated risk to loan collateral across the System. 

In addition, FCA continues to exchange ideas and meet with other banking regulators to determine the most appropriate regulator response to risks associated with 

rising land values. 

The System had full access to the capital markets during 2011, which further increased its overall financial strength and its ability to serve its mission. In addition, 

as a Government-sponsored enterprise (GSE), the System has benefited from the 

monetary policies that have helped foster historically low interest rates. Despite 

continued volatility in the financial markets, investor demand for System debt has 

remained favorable across the yield curve. Because of low interest rates, the System 

was able to exercise the options on significant quantities of callable bonds to further 

reduce the cost of funds. For 2012, the System expects that the capital markets will 

continue to meet its financing needs. 

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

Congress established Farmer Mac in 1988 to establish a secondary market for agricultural real estate and rural housing mortgage loans. Farmer Mac creates and 

guarantees securities and other secondary market products that are backed by agricultural real estate mortgages and rural home loans, USDA guaranteed farm and 

rural development loans, and rural utility loans made by cooperative lenders. 

Through a separate office required by statute (Office of Secondary Market Oversight), the Agency regulates, examines, and supervises Farmer Mac’s operations. 

Farmer Mac is a GSE devoted to making funds available to agriculture and rural 

America through its secondary market activities. Under specific circumstances defined by statute, Farmer Mac may issue obligations to the U.S. Treasury Department, not to exceed $1.5 billion, to fulfill the guarantee obligations on Farmer Mac 

Guaranteed Securities. Farmer Mac is not subject to any intra-System agreements 

and is not jointly and severally liable for Systemwide debt obligations. Moreover, the 

Farm Credit Insurance Fund does not back Farmer Mac’s securities. 
162 

Farmer Mac made financial progress during fiscal year 2011. Although GAAP net 

income was down from 2010, this decline was largely the result of unrealized gains 

and losses; however, core earnings, a measure based more on cash flow, was up by 

50 percent. As of September 30, 2011, Farmer Mac’s core capital totaled $461.3 million, which exceeded its statutory requirement of $336.6 million. The result is a capital surplus of $124.7 million, down from $183.2 million as of September 30, 2010. 

The total portfolio of loans, guarantees, and commitments grew 3.2 percent to $11.8 

billion. 

Farmer Mac’s program-business portfolio shows stress in certain subsectors, but 

credit risk remains manageable. Stress in the ethanol industry, as well as certain 

crop and permanent planting segments, contributed to an increase in the nonperforming loan rate. The nonperforming loan rate was 1.46 percent at September 30, 

2011, compared with 1.86 percent a year earlier. Loans more than 90 days delinquent decreased from 1.53 percent at September 30, 2010, to 1.02 percent a year 

later. 

Regulatory activity in 2012 that will affect Farmer Mac includes an interagency 

joint final rulemaking to implement provisions of the Dodd-Frank Act relating to 

capital and margin requirements for over-the-counter derivatives that are not 

cleared through exchanges; a final rulemaking on nonprogram investments and liquidity at Farmer Mac; a proposed rulemaking to amend regulatory requirements 

governing operating and strategic planning; and a proposed rulemaking to amend 

the Risk-Based Capital Stress Test to reduce its reliance on credit ratings. 

CONCLUSION

We at FCA remain vigilant in our efforts to ensure that the Farm Credit System 

and Farmer Mac remain financially sound and focused on serving agriculture and 

rural America. It is our intent to stay within the constraints of our fiscal year 2013 

budget as presented, and we continue our efforts to be good stewards of the resources entrusted to us. In addition to appointing a Performance Improvement Officer, we have met all of the other requirements of the GPRA Modernization Act that 

apply to our Agency. Our Budget Proposal identifies our goals and the performance 

measures we have developed to help ensure that we use our resources judiciously. 

While we are proud of our record and accomplishments, I assure you that the Agency will continue its commitment to excellence, effectiveness, and cost efficiency and 

will remain focused on our mission of ensuring a safe, sound, and dependable source 

of credit for agriculture and rural America. This concludes my statement. On behalf 

of my colleagues on the FCA Board and at the Agency, I thank you for the opportunity to share this information. 
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AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

FISCAL YEAR 2013 

U.S. SENATE, 

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

NONDEPARTMENTAL WITNESSES 

[The following testimonies were received by the Subcommittee on 

Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies for inclusion in the record. The submitted 

materials relate to the fiscal year 2013 budget request for programs within the subcommittee’s jurisdiction.] 

PREPARED STATEMENT OF THE AD HOC COALITION

Mr. Chairman, Members of the Subcommittee, this statement is respectfully submitted on behalf of the ad hoc coalition composed of the organizations listed below. 

The coalition supports sustained funding for our Nation’s food aid programs, including the Public Law 480 Title II Food for Peace Program, McGovern-Dole International Food for Education, and Food for Progress. We strongly oppose USDA’s proposal to divert funding away from Food for Peace. 

Food Aid’s Unique Role 

The donation of American commodities as food aid has been the cornerstone of 

U.S. and global foreign assistance programs since their inception, and the need for 

food aid today is stronger than ever. According to USDA’s Economic Research Service, 12 million metric tons of commodities are needed each year to fill food gaps in 

the 70 most food insecure countries. Food aid, delivered in bags bearing the U.S. 

flag marked ‘‘From the American People’’ provides a tangible symbol of our Nation’s 

generosity and compassion and builds good will toward the American people. 

In recent years, opponents of food aid programs have argued that they are not 

being administered efficiently, and that we should therefore just transfer these programming funds over to USAID’s Emergency Food Security Program (EFSP). 

Through a variety of reforms, such as prepositioning commodities and application 

of the Famine Early Warning System, the speed of delivery and accuracy of food 

aid targeting has been dramatically improved in recent years, leading USAID Administrator Shah to announce last summer that the United States is now the fastest 

provider of food assistance at times of crisis and emergency. Rather than abandon 

the demonstrated, life-saving benefits of U.S.-sourced food aid, we should work together across agencies, and across stakeholders, to apply American ingenuity to 

these programs, and continue to make them the best, most efficient programs they 

can be while still preserving their unique benefits overseas and here at home. 

In contrast to most other foreign assistance programs which just send money 

overseas, food aid also provides direct economic benefits here at home. U.S. food aid 

programs not only further our humanitarian and security goals by allowing Americans to share their bounty with the needy, but these programs also provide stable 

jobs for hundreds of thousands of Americans in our farming, processing, and shipping economic sectors. 
164 

Diversion of Food Aid Funding for Cash Donations 

The U.S. Department of Agriculture’s proposed fiscal year 2013 budget includes 

a request to divert $66 million in funding away from Food for Peace, instead adding 

it to the $300 million already designated for USAID’s EFSP. 

Mr. Chairman, we are concerned that this back-door diversion of funding will further weaken the Food for Peace Program, which has suffered extraordinary cuts in 

recent years. Although the program is authorized at $2.5 billion, funding has fallen 

in recent years and the current requested level is only $1.4 billion. This proposal 

is a replay of USDA’s proposals for fiscal year 2007–2009, which would have given 

authority to USAID to use Food for Peace funding for the purchase of foreign or 

‘‘local and regional’’ commodities at its discretion. The U.S. Government and its 

global partners already have significant cash amounts for local and regional purchases when it is necessary and appropriate. Especially in light of the recent cuts 

to Title II, it is our belief that the present funding level of EFSP does not need a 

further infusion of scarce Title II funds. We respectfully request that this Subcommittee again reject USDA’s proposal, and preserve the integrity of the Food for 

Peace program. 

Conclusions and Recommendations 

We respectfully recommend that our food aid programs continue to be funded at 

responsible, sustainable levels. The Public Law 480 Food for Peace Program is the 

world’s most successful foreign assistance program, has saved countless lives, and 

has provided valuable jobs to the American people, who take pride in their tangible 

commitment to relieving global hunger. Its straightforward delivery of American 

food to the hungry fills a clear and immediate need overseas, and its unique architecture has made it a successful program here at home that has endured for over 

fifty years. Therefore, we respectfully recommend that USDA’s request to siphon 

money away from Food for Peace be denied as it was in prior years. 

America Cargo Transport Corp. 

American Maritime Congress 

American Maritime Officers 

American Maritime Officers’ Service 

APL Limited 

American Soybean Association 

Central Gulf Lines, Inc. 

Hapag-Lloyd USA, LLC 

International Organization of Masters, 

Mates & Pilots 

Liberty Maritime Corporation 

Maersk Line, Ltd. 

Marine Engineers’ Beneficial Association 

Maritime Institute for Research and 

Industrial Development 

National Association of Wheat Growers 

North American Millers’ Association 

National Corn Growers Association 

National Council of Farmer Cooperatives 

National Potato Council 

National Sorghum Producers 

Sailors’ Union of the Pacific 

Seafarers International Union 

Sealift, Inc. 

Transportation Institute 

United Maritime Group, LLC 

U.S. Dry Bean Council 

U.S. Wheat Associates, Inc. 

USA Dry Pea & Lentil Council 

USA Maritime 

USA Rice Federation 

Waterman Steamship Corporation 

PREPARED STATEMENT OF THE AMERICAN COMMODITY DISTRIBUTION ASSOCIATION

On behalf of the American Commodity Distribution Association (ACDA), I respectfully submit this statement regarding the budget request of the Food and Nutrition 

Service for inclusion in the Subcommittee’s official record. ACDA members appreciate the Subcommittee’s support for these vital programs. 

We urge the subcommittee to fully fund administrative expense funding for the 

Emergency Food Assistance Program (TEFAP) at $100 million; to make TEFAP food 

purchase dollars available for 2 fiscal years; to approve the administration’s budget 

request of $186,935,000 for the Commodity Supplemental Food Program (CSFP) and 

provide an increase of $5 million to begin operations in six additional States approved by USDA, and to evaluate alternative approaches for the Department of Defense Fresh Program. 

ACDA is a nonprofit professional trade association, dedicated to the growth and 

improvement of USDA’s Commodity Food Distribution Program. ACDA members include: State agencies that distribute USDA-purchased commodity foods; agricultural 

organizations; industry; associate members; recipient agencies, such as schools and 

soup kitchens; and allied organizations, such as anti-hunger groups. ACDA members are responsible for distributing over 1.5 billion pounds of USDA-purchased 

commodity foods annually through programs such as National School Lunch Program, the Emergency Food Assistance Program (TEFAP), Summer Food Service 
165 

Program (SFSP), Commodity Supplemental Food Program (CSFP), Charitable Institution Program, and Food Distribution Program on Indian Reservations (FDPIR). 

Fully Fund TEFAP Administrative Funds at $100 Million 

We urge the subcommittee to fully fund TEFAP Administrative Funds at $100 

million. 

Food banks around the Nation are in great need. The number of Americans who 

are turning to food banks for assistance continues to increase. The Congress appropriated $74.5 million for TEFAP Administrative Funds in fiscal year 2010 including 

ARRA funds, $49.401 million in fiscal year 2011, and $48 million in fiscal year 2012. 

While these resources have been used responsibly, and are sincerely appreciated, 

food banks around the country are finding that operating expenses are increasing 

while private sector donations are decreasing. They have had to increasingly depend 

upon converting food dollars to administrative expense funds in order to maintain 

their operations. 

Donations to food banks are declining as many individuals and businesses no 

longer have the ability to be as supportive as they had been in the past. ACDA 

members tell us that unless TEFAP expense funds are restored to at least the fiscal 

year 2010 level, they will have to accept less food to reduce shipping/warehousing 

expenses, and will likely have to cut reimbursement to local distributors. These reimbursements are essential to maintaining distribution sites, especially in rural distribution sites. In fact, this past year Minnesota was not able to reimburse food 

bank warehouses for the storage and distribution costs. New Mexico had to restrict 

food deliveries to remote locations, and had to reduce paid staff by not hiring replacement employees. 

Make TEFAP Food Dollars Available for 2 Fiscal Years 

We urge the subcommittee to make TEFAP food dollars available for 2 fiscal 

years, as was done under ARRA. 

ACDA officials have met with FNS and AMS personnel to explore ways to improve the ordering of TEFAP foods. While the agencies of the Department of Agriculture work closely with food banks to provide as much food for distribution as possible, there are occasions when food dollars are at jeopardy through no fault of recipient agencies. If food orders are cancelled by either USDA or vendors for any reason near the end of the Federal fiscal year, State agencies must either purchase 

whatever items might be available through USDA, or lose these end-of-year balances. We are pleased that Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon told the Subcommittee on February 28 that USDA would support making TEFAP food dollars available for a 2 year period. At the end of fiscal year 2011, Minnesota was at risk of losing $70,000. Con- necticut had nearly $69,000 at risk. Other States had similar experiences at a time 

when private donations are fewer, and when available food dollars result in lower 

food volumes due to higher prices. 

As we did last year, we respectfully point out to the subcommittee that when 

ARRA was passed, TEFAP food dollars were allowed to be carried over from fiscal 

year 2009 to fiscal year 2010. This procedure helped food bank operators to make 

responsible decisions and to take maximum advantage of available resources. 

We urge the committee to make TEFAP food dollars available for 2 years, and 

urge the Secretary of Agriculture to allow those States who made responsible efforts 

to use their TEFAP Food dollars to roll over to the next fiscal year balances unexpended through no fault of the TEFAP operator. 

Funding for the Commodity Supplemental Food Program 

ACDA supports the fiscal year 2013 budget request of $186,935,000 for the Commodity Supplemental Food Program (CSFP), and urges the Committee provide an 

additional $5 million to begin CSFP operations in six States that now have USDAapproved State plans—Connecticut, Hawaii, Idaho, Maryland, Massachusetts and 

Rhode Island. This additional funding would make CSFP available in 45 States. 

CSFP overwhelmingly serves elderly individuals, many of whom are homebound. 

States currently operating CSFP requested 116,350 additional caseload slots for the 

current program year, clearly showing the need for this program. 

ACDA Requests the Evaluation of Alternative Approaches for DOD Fresh 

There is broad consensus that improving the nutritional well-being of Americans, 

particularly children, includes increasing fruit and vegetable consumption, including 

fresh items. USDA’s commodity program is constrained in its ability to distribute 

fresh foods. 

However, in the 1990s the Department developed a partner relationship with the 

Department of Defense to utilize some of the Federal commodity entitlement for 
166 

school meal programs to allow school districts to purchase through the DOD distribution system. This program, DOD Fresh, was very successful. 

Changes in the DOD procurement and distribution program which have 

outsourced these procurement activities have had a deleterious effect on the school 

program. This change has also created a situation where each school that participates must pay a fee to access the DOD secure ordering system. 

We once again ask the Committee to direct the Secretary to evaluate alternative 

approaches for replacing DOD Fresh including, but not limited to, developing an 

analog program through the Agricultural Marketing Service, and report back to the 

Committee on these options. 

We look forward to continuing to partner with you and USDA in the delivery of 

these needed services. 

PREPARED STATEMENT OF THE AMERICAN FARM BUREAU FEDERATION

The American Farm Bureau Federation has identified the following nine areas for 

funding in the fiscal year 2013 Agriculture spending bill: 

—Programs that promote animal health; 

—Programs that promote conservation; 

—Programs that expand export markets for agriculture; 

—Programs that enhance and improve food safety and protection; 

—Programs that ensure crop protection tools; 

—Programs that further develop renewable energy; 

—Programs that strengthen rural communities; 

—Programs that support wildlife services; and 

—Research priorities. 

Farm Bureau strongly opposes any cuts to funding of the farm safety net. The 

farm bill discussion has begun, and the House and Senate Agriculture Committees 

should continue to have the primary responsibility to ensure farmers and ranchers 

have a viable farm safety net. 

Programs That Promote Animal Health 

Farm Bureau supports a $5.3 million increase for the Animal and Plant Health 

Inspection Service (APHIS) to a total of $14 million for voluntary Animal Disease 

Traceability (ADT). The ADT program requires strong Government oversight on the 

expenditure of funds and is essential for animal health. 

Farm Bureau supports $4.79 million for the Veterinary Medicine Loan Repayment 

Program (VMLRP) administered by the Department of Agriculture (USDA) National 

Institute for Food and Agriculture (NIFA). VMLRP veterinarians ensure animal 

health and welfare, while protecting the Nation’s food supply. 

Farm Bureau supports $123.4 million for the Food and Drug Administration 

(FDA) Center for Veterinary Medicine (CVM). The CVM oversees the safety of animal drugs, feeds and biotechnology-derived products. 

Programs That Promote Conservation 

Farm Bureau supports funding for conservation programs but prioritizes working 

lands programs over retirement-type programs. Farmers and ranchers have made 

great strides in conserving our natural resources, and these gains can continue 

through working lands programs. 

Programs That Expand International Markets for Agriculture 

Farm Bureau supports funding at authorized levels for: 

—The Foreign Agricultural Service (FAS) to maintain services that expand agricultural export markets. Farm Bureau urges continued support for the Office 

of the Secretary for trade negotiations and biotechnology resources. 

—The Market Access Program, Foreign Market Development Program, Emerging 

Markets Program and Technical Assistance for Specialty Crops Program that 

are effective export development and expansion programs. These programs have 

resulted in increased demand for U.S. agriculture and food products abroad and 

should be fully funded. Public Law 480 programs which serve as the primary 

means by which the United States provides needed foreign food assistance 

through the purchase of U.S. commodities. 

—The APHIS Plant Protection and Quarantine personnel and facilities, especially 

the plant inspection stations, which are necessary to protect U.S. agriculture 

from costly pest problems that enter the United States from foreign lands. 

—APHIS trade issues resolution and management activities that are essential for 

an effective response when other countries raise pest and disease concerns (i.e., 
167 

sanitary and phytosanitary measures) to prohibit the entry of American products. 

—APHIS Biotechnology Regulatory Services (BRS), which oversees the permit, notification and deregulation process for plant biotechnology products. BRS personnel and activities facilitate agriculture innovation, and ensure public confidence and international acceptance of biotechnology. 

Farm Bureau supports continued funding for the U.S. Codex Office. Active U.S. 

participation in the Codex Alimentarius Commission is essential to improving the 

harmonization of international, science-based standards for the safety of food and 

agriculture products. 

Programs That Enhance and Improve Food Safety and Protection 

Farm Bureau recommends that adequate funding for food protection at the FDA 

and Food Safety Inspection Service (FSIS) be directed to the following priorities: 

—Increased education and training of inspectors; 

—Additional science-based inspection, targeted according to risk; 

—Effective inspection of imported food and feed products; 

—Research and development of scientifically based rapid testing procedures and 

tools; Accurate and timely responses to outbreaks that identify contaminated 

products, remove them from the market and minimize disruption to producers; 

and 

—Indemnification for producers who suffer marketing losses due to inaccurate 

Government-advised recalls or warnings. 

Farm Bureau supports funding for a National Antimicrobial Residue Monitoring 

System (NARMS) to detect trends in antibiotic resistance. NARMS protects human 

and animal health through integrated monitoring of antimicrobial resistance among 

foodborne bacteria. Farm Bureau requests that Congress direct that stakeholder involvement and industry input be a priority in the ongoing Federal review. 

Farm Bureau supports funding for the Food Animal Residue Avoidance Databank (FARAD) at the authorized level of $2.5 million. FARAD aids veterinarians in establishing science-based recommendations for drug withdrawal intervals. No other Government program provides or duplicates the food safety information FARAD provides to the public. 

Farm Bureau opposes the administration’s request for new user fees for inspection 

activities. Food safety is for the public good, and as such, it is a justified use of public funds. 

Programs That Ensure Crop Protection Tools 

Farm Bureau supports maintaining $12 million for Minor Crop Pest Management 

(IR–4) within NIFA Research and Education Activities. Developing pest control tools 

has high regulatory costs, and public support has been needed to ensure that safe 

and effective agrichemicals and biopesticides are available for small, orphan markets. The IR–4 Project facilitates Environmental Protection Agency registration of 

safe and effective pest management technologies where the private sector is unable 

to cover regulatory cost. 

Farm Bureau supports maintaining funding to the National Agricultural Statistical Service (NASS), specifically for the continuation of agricultural chemical-use 

surveys for fruits, vegetables, floriculture and nursery crops. NASS surveys provide 

data about the use of agricultural chemicals involved in the production of food, fiber 

and horticultural products. 

Programs That Support the Development of Renewable Energy 

Farm Bureau supports funding for the Renewable Energy for America Program 

(REAP). REAP offers grants, guaranteed loans and combination grant/guaranteed 

loans for agricultural producers to purchase renewable energy systems and energy 

efficiency improvements, as well as offers funding for energy audits and feasibility 

studies. 

Farm Bureau supports funding for the Biomass Crop Assistance Program (BCAP). 

BCAP provides vital financial assistance to farmers who produce and transport eligible biomass feedstocks and helps growers meet the capital-intensive costs of establishing new crops and delivering them to market. 

Programs That Strengthen Rural Communities 

Farm Bureau supports USDA implementing a regional approach to give its Rural 

Development (RD) programs greater flexibility and promote innovation in rural regions. 

Farm Bureau supports maintaining the funding at authorized levels for: 

—The Value-Added Agricultural Producer Grants, Rural Innovation Initiative, 

Rural Microentrepreneur Assistance Program, and Business and Industry Di-
168 

rect and Guaranteed Loans, which all foster business development in rural communities. 

—Rural Utilities Service for rural broadband and telecommunications services, 

and the Distance Learning and Telemedicine Program. 

—The Revolving Fund Grant Program for acquiring safe drinking water and sanitary waste disposal facilities. 

—The Resource Conservation and Development Program, which helps local volunteers create new businesses, form cooperatives and develop agri-tourism activities. 

—The Beginning Farmer and Rancher Development Program, which provides participants with the information and skills needed to make informed decisions for 

their operations. 

—Agriculture in the Classroom, a national grassroots program coordinated by 

USDA, which helps students gain greater awareness of the role of agriculture 

in the economy and society. 

Programs That Support Wildlife Service 

Farm Bureau supports maintaining the funding level for Wildlife Service pro- grams. Wildlife Service works to prevent and minimize an estimated $1 billion 

worth of wildlife damage, while protecting human health and safety from conflicts 

with wildlife. 

Research Priorities 

Agricultural research is vital, particularly research focused on meeting the growing challenges of production agriculture. The United Nations’ Food and Agriculture 

Organization predicts that farmers will have to produce 70 percent more food by 

2050 to feed an additional 2.3 billion people around the globe. America’s farmers are 

the most efficient in the world, but without a commitment to further agricultural 

research and technological advancement, even America’s farmers could be hardpressed to meet these challenges. 

PREPARED STATEMENT OF THE AMERICAN FOREST & PAPER ASSOCIATION

Introduction 

The American Forest & Paper Association (AF&PA) is the national trade association of the forest products industry, representing pulp, paper, packaging and wood 

products manufacturers, and forest landowners. Our companies make products essential for everyday life from renewable and recyclable resources that sustain the 

environment. 

The forest products industry accounts for approximately 5 percent of the total 

U.S. manufacturing GDP. Industry companies produce about $190 billion in products annually and employ nearly 900,000 men and women, exceeding employment 

levels in the automotive, chemicals and plastics industries. The industry meets a 

payroll of approximately $50 billion annually and is among the top 10 manufacturing sector employers in 47 States. Within the jurisdiction of this subcommittee, 

continued resources for protecting forest health and providing adequate resources to 

enforce existing trade laws are essential. Specific recommendations follow. 

Food and Drug Administration—Food Contact Notification Program 

AF&PA supports continued funding of the Food Contact Notification Program.— 

The Food Contact Notification (FCN) program protects consumer health, food safety 

and quality while providing packaging manufacturers with an efficient process that 

is less burdensome than the food additive approval process. It has allowed packaging manufacturers to bring new, more environmentally friendly products to market that have extended product shelf life, thereby increasing consumer value. 

As Congress begins work on appropriations legislation for FDA in the coming 

weeks, we would like your support and assistance in ensuring that robust funding 

is included in the appropriations bills for the Center for Food Safety and Applied 

Nutrition, and that Congress expresses its intention to continue the operation of the 

FCN program. AF&PA appreciates that the subcommittee has previously rejected 

proposals to eliminate the FCN program. 

Animal and Plant Health Inspection Service (APHIS)—Lacey Act Enforcement 

AF&PA supports $5.5 million to provide for implementation of the declaration requirement of the Lacey Act, as amended by the 2008 farm bill.—The 2008 farm bill 

amended the Lacey Act (16 U.S.C. 3371 et seq.) to make it unlawful to trade wood 

products or other plants taken in violation of the laws of either a U.S. State or foreign country. This ground-breaking legislation already is beginning to influence the 
169 

way companies make sourcing decisions and monitor their supply chains. Full and 

effective implementation and enforcement of the Lacey Act will enable American forest product companies to compete fairly in the global marketplace, help keep jobs 

in the United States, deter the destructive impacts of illegal logging on forests and 

forest-dependent communities in developing countries, and reinforce initiatives to 

mitigate climate change. 

When fully implemented, the law requires U.S. importers of wood and wood products to file a declaration identifying the genus/species name and country of harvest—a critical measure intended by the law’s sponsors to increase supply chain 

transparency and assist Federal agencies in fair and strong enforcement. The prohibition and the declaration requirement affect a wide array of American industries, 

so it is critical that the declaration process generates data in a streamlined, costeffective manner without unduly burdening legitimate trade. To that end, APHIS— 

which is responsible for implementing the declaration provision—needs $5.5 million 

in funding to fully implement congressional mandates, including to establish an 

electronic declarations database and to add internal capacity to perform data analysis needed for monitoring and enforcement purposes. 

APHIS—Plant Pests 

AF&PA recommends maintaining at least fiscal year 2012 funding of $56 million 

for the ‘‘Tree and Wood Pests’’ category to aid in combating these, and other pests 

and diseases.—As world trade continues to expand, global weather patterns shift, 

and an increasingly affluent world population has the ability to travel to—and demand products from—the far corners of the globe, the inadvertent, yet inevitable introduction of nonnative pests and diseases into the United States continues. Additional funding is vitally needed to aid in combating pests such as the Asian longhorn beetle, the Emerald Ash borer, and the Sirex woodwasp, as well as diseases 

such as Phytopthora ramorum. These are but a sampling of the diseases that harm 

commercial timber stands, community parks, and private forest landowners. American citizens most certainly will bear the cost of combating these and other emergent threats. We believe a comprehensive, coordinated response to each is more effective and more economical. 

National Institute of Food and Agriculture—McIntire-Stennis Cooperative Forestry 

Research 

AF&PA requests $33 million for the McIntire-Stennis Cooperative Forestry Research Program.—Approximately one-third of the United States is forested and 

these forests enhance our quality of life and economic vitality and are an invaluable 

source of renewable bioproducts, outdoor recreation, clean water, fish and wildlife 

habitat, and carbon sequestration. Sustaining these forests in a healthy and productive condition requires a strong, continuing commitment to scientific research and 

graduate education. Foundational financial support for university-based forestry research and graduate education comes from the McIntire-Stennis Cooperative Forestry program, funded through the USDA’s National Institute of Food and Agriculture. Funds are distributed according to a statutory formula to each of the 50 

States, Puerto Rico, Guam, and the Virgin Islands, with a dollar-for-dollar match 

required from the States. 

Additional funding is needed to: 

—Provide the additional scientific research needed to address critical forest issues 

such as fires, storms, insects, diseases, urbanization, fragmentation, and lost 

economic opportunities. 

—Develop new knowledge and innovations to sustain healthy, productive forests 

and address the challenges facing forest owners, forest products manufacturers 

and all Americans who benefit from our forest resources. 

—Support research capacity within each State to address issues that are essential 

to private forest owners, and develop new opportunities for economic benefit 

from their forests. 

PREPARED STATEMENT OF THE AMERICAN HONEY PRODUCERS ASSOCIATION, INC. 

Chairman Kohl and Members of the Subcommittee, my name is Mark Jensen, and 

I currently serve as President of the American Honey Producers Association 

(AHPA). I am pleased today to submit the following statement on behalf of the 

AHPA, a national organization of commercial beekeepers actively engaged in honey 

production and crop pollination throughout the country. The purpose of this statement is to bring to your attention the continued threats faced by American beekeepers and the billions of dollars in U.S. agriculture that rely upon honeybee pollination services. With those threats in mind, we respectfully request an appropria-
170 

tion that meets the needs anticipated by the 2008 farm bill for research funds to 

combat CCD and to conduct other essential honeybee research through the Agricultural Research Service (ARS) and other agencies at the Department of Agriculture, 

including at least $11.7 million for bee research at the ARS Honeybee Research Laboratories. And we specifically request that funds and personnel not be diverted from 

the essential ARS Honeybee Research Laboratory in Weslaco, Texas, which for reasons given below would jeopardize highly valuable research at a critical time for 

America’s beekeepers. 

Honeybees are an irreplaceable part of the U.S. agricultural infrastructure. Honeybee pollination is critical in the production of more than 90 food, fiber, and seed 

crops and directly results in more than $15 billion in U.S. farm output. One key 

example is the almond crop. California grows 100 percent of the Nation’s almonds 

and supplies 80 percent of the world’s almonds, all of which are 100 percent pollinated by managed bees. Nearly half of the managed colonies in the United States 

are transported each year from other parts of the country to pollinate those almonds. In addition to this clear commercial benefit, honeybees are also vital to the 

health of all Americans given the dietary importance of such diverse pollinated 

crops as almonds, apples, oranges, melons, blueberries, broccoli, tangerines, cranberries, strawberries, vegetables, alfalfa, soybeans, sunflower, and cotton, among 

others. In fact, honeybees pollinate about one-third of the human diet. 

With this in mind, a threat to the existence of managed American honeybees is 

a threat to all Americans. And unfortunately, the American honeybee continues to 

face a number of significant threats. While not specifically a topic of relevance for 

congressional appropriators, complex circumvention and customs fraud schemes continue to disadvantage the American honey producer, stress pollinated crops and 

even threaten the health and safety of consumers. Producers struggle under the impact of increasingly divergent market prices—one price for legitimate honey and another rock bottom price for illegally transshipped honey. The direct result of these 

divergent prices is a rapidly shrinking domestic market share for American producers. The shrinking domestic share has, in turn, diminished the available supply 

of managed bee colonies necessary to pollinate U.S. agriculture, and it has placed 

American consumers at risk due to increasing volumes of low-cost, often adulterated, food products entering uninspected into the Nation’s food supply. 

This substantial trade threat is layered on top of the industry’s ongoing battle 

against Colony Collapse Disorder (CCD), a phenomenon that since 2006 has ravaged 

bee colonies across the United States, moving from one hive to another in unpredictable patterns and causing the death of up to 90 percent of the bee colonies in affected apiaries. The National Research Council at the National Academy of Sciences 

has, as a result of CCD, characterized the beekeeping industry as being in ‘‘crisis 

mode’’—a point echoed and re-emphasized in a USDA action plan regarding honeybee threats. And hundreds of news articles and many in-depth media reports have 

continued to chronicle the looming disaster facing American beekeepers and the producers of over 90 fruit, vegetable and fiber crops that rely on honeybee pollination. 

Unfortunately, despite extensive and coordinated work by experts from Government, academia and the private sector, the definitive causes of and solutions for 

CCD have yet to be identified. The research is complex, as there are a wide range 

of factors that—either alone or in combination—may be causes of this serious condition, including stress from the cross-country movement of bees for commercial pollination, stress of pollinating crops, and the impact of certain crop pesticides and genetic plants with altered pollination characteristics. Continuing infestations of the 

highly destructive Varroa mite, combined with other pests and mites, are also 

thought to compromise the immune systems of bees and may leave them more vulnerable to CCD. At the same time, researchers will need to focus on the many reported instances in which otherwise healthy, pest-free, stationary bee colonies are 

also suffering collapse or problems with reproduction. 

AHPA, other industry officials, and leading scientists believe that an important 

contributing factor in the current CCD crisis is the longstanding, substantial underfunding of U.S. bee research, resulting in an inadequate capacity to respond to new 

research challenges and to take long-term steps to assure honeybee health. In recent 

years, honeybee research has become overly confined to four ARS laboratories that, 

while providing the first line of defense against exotic parasitic mites, Africanized 

bees, viruses, brood diseases, pests, pathogens and other conditions, simply cannot 

be expected to handle the full range of honeybee research challenges at current 

funding levels. At the same time, universities and the private sector, despite their 

ability to provide significant and innovative new research on emerging bee threats, 

have scaled back their efforts due to a lack of available funds. 

In recent years, the Federal Government has spent very modest amounts at each 

ARS Honeybee Research Laboratory—for a sector that contributes $15 billion per 
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year to the U.S. farm economy and exponentially more to ensuring ecological balance and a healthy human diet. Worse still, with the emergence of CCD, funding 

amounts have not been increased commensurate with growing bee health concerns, 

resulting in a serious gap between the threats faced by U.S. honeybees and the capacity of our researchers to respond. Closing this gap will require significant new 

resources. To give a sense of this cost, it is estimated that each new scientist, technician and the support materials that they need will cost an additional $500,000 per 

year. Many new scientists are needed. 

To address these challenges, the AHPA respectfully requests funding consistent 

with authorizations provided in the 2008 farm bill. Specifically, the funds should be 

divided among the following Department of Agriculture agencies and programs: (1) 

the four ARS Bee Research Laboratories for new personnel, facility improvement, 

and additional research; (2) the Animal and Plant Health Inspection Service to conduct a nationwide honeybee pest and pathogen surveillance program; (3) the ARS 

Area Wide CCD Research Program divided between the Beltsville, Maryland and 

the Tucson, Arizona research laboratories to identify causes and solutions for CCD 

in affected States; (4) the NIFA to fund extension and research grants to investigate 

the following: honey bee biology, immunology, and ecology; honey bee genomics; native bee crop pollination and habitat conservation; native bee taxonomy and ecology; 

pollination biology; sub-lethal effects of insecticides, herbicides, and fungicides on 

honey bees, native pollinators, and other beneficial insects; the effects of genetically 

modified crops, including the interaction of genetically modified crops with honey 

bees and other native pollinators; honeybees, bumblebees, and other native bee 

parasites and pathogens’ effects on other native pollinators; and (5) the additional 

ARS research facilities in New York, Florida, California, Utah, and Texas for research on honeybee and native bee physiology, insect pathology, insect chemical 

ecology, and honeybee and native bee toxicology. 

Unfortunately, it has come to our attention that ARS, in a unique decision to try 

and achieve false savings, is planning in fiscal year 2013 to close the Weslaco ARS 

research facility, including the ARS Honeybee Research Laboratory—perhaps the 

newest and best of the four honeybee research laboratories in terms of practical, 

near term results achieved. Our understanding is that funds currently dedicated to 

the Weslaco honeybee research function would be ‘‘re-directed’’ to honeybee research 

currently conducted in Beltsville, Maryland, and Tucson, Arizona. 

The AHPA strongly opposes the decision to close the Weslaco Honeybee Research 

Laboratory. While we appreciate that ARS intends to maintain and re-direct funds 

rather than terminate the research function entirely, it is important to note that 

the each of the four ARS Honeybee Research Laboratories focuses on different problems facing the U.S. honey industry and undertakes research that is vital to sustaining honey production and assuring essential pollination services in this country. 

And each of the four ARS Honeybee Research Laboratories has unique strengths 

and is situated and equipped to support independent research programs which 

would be difficult, and in many cases impossible, to conduct elsewhere. This is particularly true of the Weslaco laboratory. 

Thus, given the multi-factor research capacity needed to address the scourge of 

CCD and the unique contributions made by each of the four laboratories, the AHPA 

urges Congress to permit Weslaco and each of the other ARS Honeybee Research 

Laboratories to continue and expand upon their unique strengths in their respective 

geographic locations. For the following reasons, the AHPA believes that maintaining 

the laboratory in Weslaco is in the best overall interest of our Nation’s honeybee 

research agenda: 

—Personnel.—ARS, in its plan to re-direct funds from the Weslaco Honeybee Research Laboratory, does not account for the loss of highly skilled personnel. 

While ARS appears to believe that the scientific staff in Weslaco are replaceable, we believe this ignores that honeybee research is a unique study with a 

limited number of dedicated scientists worldwide. Further, even assuming ARS 

could replace some or all of the scientists, valuable time and years of practical 

and scientific knowledge and experience will be lost. In fact, some of the key 

personnel at Weslaco have already resigned or opted for retirement out of concern that the ARS plan for re-direction of funds will come to fruition. And finally, since the ARS plan would re-direct funding to other laboratories with existing research leaders, the result will likely be the loss of a research leader position—a position typically reserved for distinguished scientists. Each research 

leader position lost diminishes our capacity to attract world class scientific talent to honeybee research. 

—Mission.—The Weslaco Honeybee Research Laboratory’s mission is to research 

ways to implement integrated pest management principles. As discussed above, 

each of the four ARS laboratories has a unique focus. Weslaco is the only hon-
172 

eybee laboratory dedicating a significant amount of time, money and expertise 

to honeybee pest, parasite and disease management—an absolutely necessary 

endeavor if we intend to preserve colony strength while awaiting the results of 

research initiatives at other laboratories aimed at longer-term solutions for the 

same problems. In short, the Weslaco laboratory is the front-line defense. The 

others represent longer-term hope. For example, in cooperation with pharmaceutical and chemical manufacturing companies, Weslaco scientists have played 

a key role in bringing to market all of the major chemical controls that have 

successfully mitigated damage that would otherwise be caused by Varroa destructor mites. If the honeybee research laboratory at Weslaco is re-located as 

proposed, its research focus will necessarily be altered, and possibly even lost 

since the other laboratories do not have expertise in the same area of research. 

We cannot afford to take that risk at this particularly challenging time. —Cost.—If implemented, the ARS plan will produce an overall cost increase for 

the agency’s honeybee research program instead of serving as an austerity 

measure. The Weslaco Honeybee Research Laboratory will realize increased 

costs associated with travel and other administrative inefficiencies that will be 

necessary if ARS wishes to continue the current Weslaco research agenda—an 

agenda that relies on particular geographic and climate qualities not found in 

Beltsville, Maryland or Tucson, Arizona. Additionally, the receiving facilities 

will be burdened with new administrative responsibilities and demands for 

space. Restructuring any research facility requires time and funding. The ARS 

facilities are no exception. The fiscal year 2012 Senate Appropriations Committee report included the following language: ‘‘[W]hile the Committee understands the need to continually look for ways to increase efficiency and improve 

research outcomes, laboratory closures often cost money in the short-term and 

do not necessarily provide real savings. Therefore, the Committee directs ARS 

to evaluate its capital asset requirements for necessary coordination with ongoing and emerging research opportunities. As part of this evaluation, ARS should 

provide opportunity for public comment in order to incorporate the priorities of 

all interested stakeholders, including ARS and other scientists, and users of 

ARS data. Finally, in future budget requests, the Committee directs ARS to 

identify any costs associated with any proposed laboratory closures, including 

decommissioning, relocation or other effects on employees, and any other additional costs.’’ Unfortunately, the ARS plan to re-direct funding does not appear 

to account for the added costs discussed above and contemplated by Congress 

just a year ago. Further, while they have communicated with certain stakeholders, ARS has failed to provide formal notice and afford appropriate time for 

public comment by those most affected by its decision. And finally, ARS has not, 

to our knowledge, identified ‘‘costs associated with any proposed laboratory closures, including decommissioning, relocation or other effects on employees, and 

any other additional costs.’’ 

—Climate.—The research currently conducted at the Weslaco Honeybee Research 

Laboratory relies on more than 450 research-quality bee colonies located near 

the facility. The scientists at Weslaco have access to such a large bee supply 

due in substantial part to the unique climate and habitat afforded by the laboratory’s Weslaco, Texas location. Taken together, the warm climate and ample 

scrub brush ranch land combine for an optimal breeding ground and year-round 

research—a combination that neither the Beltsville, Maryland or Tucson, Arizona can offer. 

—Quality and Divisibility of Facility.—As a practical matter, closing the Weslaco 

Honeybee Research Laboratory is unnecessary. As discussed above, the laboratory at Weslaco is among the best and newest in the country, and it remains 

an ideal geographic location for honeybee research. While we acknowledge that 

ARS maintains other agricultural research laboratories on the same campus, 

known collectively as the Kika de la Garza Subtropical Agricultural Research 

Center, and that those other laboratories are also targeted for closure, we note 

that the property is easily divisible and that closure of one lab does not necessitate closure of another. Each laboratory on the Weslaco campus operates in 

a separate building with considerable distance between buildings. Further, each 

laboratory has its own independent scientific and administrative staff. Thus, 

ARS can easily close and lease or sell other agricultural research laboratories 

located on the Weslaco campus without disturbing the important work conducted by the honeybee laboratory. Indeed, this makes good sense given that 

the ARS plan is to both close and eliminate funding for those other laboratories 

whereas, in the case of the honeybee laboratory, it is only to close and re-direct 

funding, a move that the members of our organization believe strongly will actually result in greater costs than benefits. 
173 

—Precedent.—This is not the first time ARS laboratories have faced this challenge. In the President’s fiscal year 2003 budget proposal, a number of laboratories were proposed for closure, consolidation or reduction. Ironically, those targeted then for closure included all of the ARS Honeybee Research Laboratories 

except Weslaco. Similar to the current situation, the fiscal year 2003 proposal 

sought to achieve projected budgetary savings at the expense of science. Congress wisely and emphatically rejected that proposal. The following excerpt is 

from the fiscal year 2003 Senate Appropriations Committee report: ‘‘The Committee does not concur with proposals to close selected research laboratories and 

consolidate and terminate related ongoing research programs. The Committee 

directs the Agency to maintain these important research programs and laboratories and maintains funding which was eliminated under the President’s budget.’’ Then in the fiscal year 2009 omnibus appropriations bill, Congress preserved funding for the Weslaco, Texas ARS research facility despite a recommendation in the President’s budget proposal to close that facility. Congress 

should again reject closure and consolidation of the ARS Honeybee Research 

Laboratories in fiscal year 2013, just as it did on two prior occasions in the last 

decade. 

While to date the four ARS Research Laboratories have been the backbone of 

American Honeybee research, we do not believe that those four facilities alone— 

even when fully funded—will have the capacity to meet today’s research needs. This 

is why, after analyzing the new and serious threats to U.S. honeybees, Congress, 

representatives of the farm sector and leading researchers developed the research 

priorities that were incorporated into the 2008 farm bill. In addition to increased 

resources for ARS research, these experts pressed for new funding, through NIFA, 

for Government, academic and private sector research. They also urged new bee surveillance programs through the Animal and Plant Health Inspection Service to address the alarming lack of accurate information about the condition of U.S. bee colonies 

One particularly effective way of adding needed capacity and innovative expertise 

in the effort to ensure honeybee health would be to reinvigorate private sector and 

university bee research initiatives. For many years, these sectors played a vital role 

in honeybee research, and many leading universities have significant bee research 

capabilities. In recent years, non-Federal agency research has substantially declined 

due to a lack of support for such initiatives. Fully funding the 2008 farm bill authorization for the Department of Agriculture’s NIFA would go a long way toward 

achieving this worthy goal. 

NIFA is tasked with advancing knowledge for agriculture by supporting research, 

education, and extension programs. Funds may be channeled through the Department to researchers at land-grant institutions, other institutions of higher learning, 

Federal agencies, or the private sector. The requested funding for NIFA would provide important flexibility in allocating badly needed Federal dollars among Government, private sector and university researchers. The recipients would provide more 

widespread research on honeybee biology, immunology, ecology, and genomics, pollination biology, and investigations into the effects on honeybees of potentially harmful chemicals, pests, other outside influences, and genetically modified crops. The result of such funds would be to ensure flexible financing with a comprehensive plan 

for battling CCD, pests, and other ongoing and future honeybee threats. 

Additionally, the same coalition of experts identified a need for a honeybee pest 

and pathogen surveillance program. Although significant data exists on American 

honey production, comparably less and lower quality data exists on beekeepers and 

bees. Providing continued funding under the 2008 farm bill authorizations to the 

Animal and Plant Health Inspection Service at the Department of Agriculture would 

allow the Department to utilize such data to better respond to pest and disease outbreaks, and to compile data that may better enable prediction of new threats. Given 

the roughly $15 billion added to the U.S. farm economy each year by honeybees, this 

is certainly a worthwhile investment in the honeybee and pollinator industry. 

In conclusion, we wish to thank you again for your past support of honeybee research and for your understanding of the critical importance that Federal funding 

plays in ensuring a healthy honeybee supply. By way of summary, in fiscal year 

2013, the American Honey Producers Association strongly encourages at least $11.7 

million in funding for CCD and other honeybee research spread among the four ARS 

Honeybee Research Laboratories. The AHPA strongly opposes closure of the ARS 

Honeybee Research Laboratory in Weslaco, Texas. And, the AHPA supports continued funding for the NIFA at the Department of Agriculture, and the Animal and 

Plant Health Inspection Service. Only through critical research can we have a viable 

U.S. beekeeping industry and continue to provide stable and affordable supplies of 
174 

bee-pollinated crops, which make up fully one-third of the U.S. diet. I would be 

pleased to provide answers to any questions that you or your colleagues may have. 

PREPARED STATEMENT OF THE AMERICAN INDIAN HIGHER EDUCATION CONSORTIUM

On behalf of the American Indian Higher Education Consortium (AIHEC) and the 

32 Tribal Colleges and Universities (TCUs) that currently compose the list of 1994 

Institutions, thank you for this opportunity to outline our needs and concerns for 

fiscal year 2013. 

This statement is presented in three parts: (a) summary of our fiscal year 2013 

funding recommendations, (b) brief background on Tribal Colleges and Universities, 

and (c) an outline of the 1994 Institutions’ plan for using our land grant programs 

to fulfill the agricultural potential of American Indian communities, and to ensure 

that American Indians have the skills and support needed to maximize the economic 

potential of their resources. 

Summary of Requests 

We respectfully request the following for fiscal year 2013 for our land grant programs established within the USDA National Institute of Food and Agriculture 

(NIFA) and the Rural Development mission area. In NIFA, we request: $4,312,000 

for the 1994 Institutions’ competitive Extension grants program; $2 million for the 

1994 Institutions’ competitive Research Grants program; $3,335,000 for the Higher 

Education Equity Grants; a doubling of the corpus in the Native American Endowment fund; and in the Rural Development—Rural Community Advancement Program (RCAP), that $4 million be appropriated for the TCU Essential Community 

Facilities Grants program (the same level included in the President’s fiscal year 

2013 budget request) to help the 1994 Institutions address the critical facilities and 

infrastructure needs that advance their capacity to participate as full land grant 

partners. 

Background on Tribal Land Grant Institutions 

The first Morrill Act was enacted in 1862 specifically to bring education to the 

people and to serve their fundamental needs. Today, 150 years after enactment of 

the first land grant legislation, the 1994 Institutions, as much as any other higher 

education institutions, exemplify the original intent of the land grant legislation, as 

they are truly community-based institutions. 

The 32 Tribal Colleges and Universities that compose the list of 1994 Institutions 

are accredited by independent, regional accreditation agencies and like all institutions of higher education, must undergo stringent performance reviews to retain 

their accreditation status. TCUs serve as community centers by providing libraries, 

tribal archives, career centers, economic development and business centers, public 

meeting places, and child and elder care centers. Despite their many obligations, 

functions, and notable achievements, TCUs remain the most poorly funded institutions of higher education in this country. The vast majority of the 1994 Institutions 

is located on Federal trust territory. Therefore, States have no obligation, and in 

most cases, provide no funding to TCUs. In fact, most States do not even provide 

funds to our institutions for the non-Indian State residents attending our colleges, 

leaving the TCUs to assume the per student operational costs for non-Indian students enrolled in our institutions, accounting for approximately 20 percent of their 

student population. This is a significant financial commitment on the part of TCUs, 

as they are small, developing institutions and cannot, unlike their State land grant 

partners, benefit from economies of scale—where the cost per student to operate an 

institution is reduced by the comparatively large size of the student body. 

As a result of 200 years of Federal Indian policy—including policies of termination, assimilation, and relocation—many reservation residents live in conditions 

of poverty comparable to those found in Third World nations. Through the efforts 

of TCUs, American Indian communities are availing themselves of resources needed 

to foster responsible, productive, and self-reliant citizens. It is essential that we continue to invest in the human resources that will help open new avenues to economic 

development, specifically through enhancing the 1994 Institutions’ land grant programs, and securing adequate access to information technology. 

1994 Land Grant Programs—Ambitious Efforts to Economic Potential 

In the past, due to lack of expertise and training, millions of acres on Indian reservations lay fallow, under-used, or had been developed using methods that caused 

irreparable damage. The Equity in Educational Land Grant Status Act of 1994 is 

addressing this situation and is our hope for the continued improvement of our reservation lands. Our current land grant programs remain small, yet critically impor-
175 

tant to us. It is essential that American Indians explore and adopt new and evolving 

technologies for managing our lands. With increased capacity and program funding, 

we will become even more fundamental contributors to the agricultural base of the 

Nation and the world. 

Competitive Extension Grants Programs.—The 1994 Institutions’ extension programs strengthen communities through outreach programs designed to bolster economic development; community resources; family and youth development; natural 

resources development; and agriculture; as well as health and nutrition education 

and awareness. Without adequate funding the 1994 Institutions’ ability to maintain 

existing programs and to respond to the many emerging issues, such as food safety 

and homeland security (especially on border reservations) is severely limited. Increased funding is needed to support these vital programs designed to address the 

inadequate extension services that have been provided to Indian reservations by 

their respective State programs. Funding for the 1994 Land Grant Extension programs is extremely modest. The 1994 Institutions have applied their resourcefulness 

for making the most of every dollar they have at their disposal by leveraging funds 

to maximize their programs whenever possible. Two examples of effective 1994 Extension programs include: Extension activities at the College of Menominee Nation 

(Wisconsin) strengthen the sustainable economic development potential of the Menominee, Stockbridge-Munsee, Oneida, and Potawatomi Reservations and surrounding communities by increasing distance education capacity, conducting needs 

assessment studies, providing workshops and training sessions, and offering strategic planning assistance. The Agriculture & Natural Resources Outreach Education 

Extension program at Oglala Lakota College (South Dakota), which is located in one 

of the poorest counties in the Nation, utilizes education to promote the environmentally sound used of agriculture and natural resources by Lakota people. The 

program coordinates activities between the college’s Agriculture and Natural Resources department, reservation schools, other tribal departments, South Dakota 

State University, and county extension programs. Specific issues addressed by this 

program include poverty, isolation, health, cultural dissonance, and land use practices by Lakota landowners. To continue such highly successful programs conducted 

at 1994 Institutions, we request that the Subcommittee appropriate a minimum of 

$4,312,000 for this competitive grants program to support the growth and further 

success of these essential community-based extension programs. 

1994 Competitive Research Program.—As the 1994 Institutions enter into partnerships with 1862/1890 land grant institutions through collaborative research projects, 

impressive efforts to address economic development through natural resource management have emerged. The 1994 Research Grants program illustrates an ideal 

combination of Federal resources and TCU-State institutional expertise, with the 

overall impact being far greater than the sum of its parts. We recognize the severe 

budget constraints under which Congress is currently functioning. The $1,801,000 

appropriated last year is, by any measure, inadequate to develop capacity and conduct necessary research at our institutions. The 1994 Research Grants program is 

vital to ensuring that TCUs may finally be recognized as full partners in the Nation’s land grant system. Currently, many of our institutions are conducting applied 

research, yet finding the resources to continue this research to meet their communities’ needs is a constant challenge. This research authority opens the door to funding opportunities to maintain and expand the vital research projects begun at the 

1994 Institutions, but only if adequate funds are secured and sustained. A total research program funded at less than $2 million, for which all 32 of the 1994 Institutions compete for awards, is incredibly insufficient. Priority issue areas currently 

being studied at the 1994 Institutions include: sustainable agriculture and forestry; 

biotechnology and bioprocessing; agribusiness management and marketing; plant 

propagation, including native plant preservation for medicinal and economic purposes; animal breeding; aquaculture; ramifications of human nutrition (including 

health, obesity, and diabetes); and family, community, and rural development. For 

example, the Standing Rock Sioux Reservation, home to Sitting Bull College and located in North and South Dakota, is often characterized by high unemployment and 

considerable health concerns. The college is conducting a research project to develop 

a natural beef enterprise on the reservation that will maximize use of existing natural resources, allow American Indian students to be actively involved in research 

and to produce a healthier agricultural product for the community. This project combines expertise from Sitting Bull College, North Dakota State University, and the 

USDA–ARS Northern Great Plains Research Laboratory. We request that the Subcommittee afford the 1994 Research competitive program a very modest increase, 

and appropriate $2 million for these critical grants. 

1994 Institutions’ Educational Equity Grant Program.—This program is designed 

to assist 1994 Institutions with academic programs. Through the modest appropria-
176 

tions first made available in fiscal year 2001, the 1994 Institutions have developed 

and implemented courses and programs in natural resource management; environmental sciences; horticulture; forestry; and food science and nutrition. This last category is helping to address the epidemic rates of diabetes and cardiovascular disease 

that plague American Indian reservations. We request that the Subcommittee appropriate at a minimum, $3,335,000 to allow the 1994 Institutions to continue their 

current course offerings and the successful activities that have been established. 

Native American Endowment Fund.—Endowment installments that are paid into 

the 1994 Institutions’ account remain with the U.S. Treasury. Only the annual interest yield, less the USDA’s administrative fee, is distributed to the 1994 Institutions. The latest annual interest yield for the 1994 Institutions’ treasury endowment 

was $4,306,999 and after the USDA NIFA claimed its standard 4 percent administrative fee, $4,134,719 was distributed among the eligible 32 TCU Land Grant Institutions by statutory formula. Once again, the administrative fee paid to USDA– 

NIFA to simply make the funds available for draw down by the eligible 1994 Institutions was higher than the amount paid to all but 6 of the 32 tribal college (1994) 

land grant institutions. In other words, about 80 percent of the 1994 institutions 

receive less of the annual interest yield for program use than the administrative fee 

paid to the USDA–NIFA. 

Endowment payments appropriated increase the size of the corpus held by the 

U.S. Treasury and thereby increase the base on which the annual interest yield is 

determined. These additional funds would continue to support faculty and staff positions and program needs within 1994 agriculture and natural resources departments, as well as to help address the critical and very expensive facilities needs at 

these institutions. For the latest endowment interest distribution, the median interest payment to 1994 Institutions was $97,494, which is clearly not sufficient to address curriculum development and instruction delivery, not to mention the need to 

address the ongoing facilities and infrastructure projects at these institutions. In 

order for the 1994 Institutions to become full partners in the Nation’s land-grant 

system, we need the facilities and infrastructure necessary to fully engage in education and research programs vital to the future health and well being of our reservation communities. Identifying creative solutions is essential to address so many 

public funding needs in a time of extreme fiscal austerity. The TCUs propose a onetime doubling of the 1994 Native American endowment, which would result in an 

increase in the annual interest yield by approximately $4 million—the same amount 

as proposed for the TCU Rural Development Essential Community Facilities Grant 

program. Payments into the endowment remain with the U.S. Treasury, therefore 

only the interest yield is scored as outlay. Should the endowment corpus be doubled 

and the agency’s administrative fee scaled back, the TCUs could then consider forgoing the Rural Development program. We respectfully request that the Subcommittee consider doubling the current endowment corpus by fiscal year 2015. Additionally, we strongly urge the Subcommittee to review the USDA–NIFA administrative fee charged and consider directing the department to reduce said fee for the 

Tribal College Endowment program so that more of these already limited interest 

funds can be utilized by the 1994 Institutions to conduct essential community-based 

programs and address critical infrastructure needs. 

Tribal Colleges and Universities Essential Community Facilities Program (Rural 

Development).—The Absent the doubling of the 1994 endowment corpus resulting in 

an additional interest yield equal to the TCU Essential Community Facilities Program, we strongly urge the Subcommittee to appropriate a minimum of $4 million, 

the level included in the President’s fiscal year 2013 budget request, each year for 

the next 3 fiscal years to afford the 1994 Institutions the means to actively address 

critical facilities and infrastructure needs, thereby allowing them to better serve 

their students and their respective communities. 

Conclusion 

The 1994 Institutions have proven to be efficient and effective vehicles for bringing educational opportunities to American Indians and the promise of self-sufficiency to some of this Nation’s poorest and most underserved regions. The modest 

Federal investment in the 1994 Institutions has already paid great dividends in 

terms of increased employment, access to higher education, and economic development. Continuation of this investment makes sound moral and fiscal sense. American Indian reservation communities are second to none in their potential for benefiting from effective land grant programs and, as earlier stated, no institutions better exemplify the original intent of the land grant concept than the 1994 Institutions. 

We appreciate your support of the 1994 Institutions and recognition of their role 

in the Nation’s land grant system. We ask you to renew your commitment to help 
177 

move our students and communities toward self-sufficiency and respectfully request 

your continued support and full consideration of our fiscal year 2013 appropriations 

requests. 

PREPARED STATEMENT OF THE AMERICAN PHYTOPATHOLOGICAL SOCIETY

The American Phytopathological Society (APS), the premier educational, professional, and scientific society dedicated to the promotion of plant health and plant 

disease management for the global good, appreciates the opportunity to provide our 

views on research, extension, and education provisions of the fiscal year 2013 agricultural appropriations bill. The APS believes that now is the time to make strategic, additional investments in agricultural science to help jumpstart the U.S. economy. Thus, we request the Subcommittee to include in the fiscal year 2013 agricultural appropriations bill, funding for agricultural science and technology at no less 

than the fiscal year 2012 level for the USDA Agricultural Research Service (ARS) 

and the National Institute of Food and Agriculture (NIFA). We further request the 

Subcommittee to support strategic investments, above the fiscal year 2012 funding 

levels, of $72.9 million for the ARS and NIFA as described below: 

—A net increase of $7.9 million for salaries and expenses for the USDA Agricultural Research Service, (i.e., funding at not less than the President’s budget request of $1,102,565,000); 

—A net increase of $4 million for the Food and Agriculture Defense Initiative 

(homeland security) under the Integrated Activities account of the National Institute for Food and Agriculture, returning the funding to the fiscal year 2010 

level of $9.83 million with the increase divided equally between the National 

Plant Diagnostic Network and the National Animal Health Laboratory Network; and 

—A net increase of $61 million (total budget of $325 million) for the Agriculture 

and Food Research Initiative (AFRI) competitive grants program of the National 

Institute for Food and Agriculture. 

Agriculture in the United States is highly productive. This productivity was 

achieved because past investments in agricultural science led to advances that 

placed our producers, processors, and manufacturers at the cutting edge of agricultural technology. To ensure continued safety and security of our food, feed, fiber, 

and natural resources, we believe that science-based solutions to the new challenges 

faced in today’s agriculture must be explored and developed. Further, our agricultural economy must be protected from devastating invasive plant diseases and pests 

by a robust diagnostic network and the development of science based tools and resources. The only way we can achieve these solutions is by providing strategic investments in agricultural science, extension, and education and to make these investments with additional funds and not by reducing funding for other essential programs at ARS and NIFA. 

The jobs of 21 million Americans depend on the vitality of the U.S. agriculture 

and food sector. In Ohio, for example, one in seven jobs is directly tied to agriculture. For every $1 invested in publicly funded agricultural research, a minimum 

of $20 in economic activity is generated. Unfortunately, U.S. Government investments in agricultural innovation have been flat in recent years. As a consequence, 

the competitive edge that made the U.S. agricultural research sector the envy of the 

world has declined, and industry is turning to other parts of the world for innovation. The decisions made by the Subcommittee this year will have far-reaching impacts, the downstream implications of decisions made now have far reaching impacts, as the scientific research funded today will be responsible for enhancing the 

Nation’s agricultural productivity and overall economic prosperity in the future. 

While an increase of $100 million would have little impact on the NIH or NSF 

research budgets, a $73 million increase in funding for the USDA’s ARS and NIFA 

would be significant in the impact on the Nation’s economy, generating almost $1.5 

billion in economic activity. 

The added funds we are requesting for the Food and Agricultural Defense Initiative (Homeland Security) would ensure that we have a coordinated network of diagnostic laboratories and experts at land grant universities, State departments of agriculture to protect our crops from diseases such soybean rust, citrus greening, plum 

pox virus, sudden oak death, Ug99. The slight increase in funding for the ARS 

would support funding for food safety, crop health, and strengthen long-term agroecosystem research that will be essential for ensuring an abundant supply of safe, 

high quality, food, feed, and fiber during periods of changing weather patterns. 

The 23 percent increase in the AFRI competitive grants program would provide 

a much needed boost of funding for fundamental, applied, and integrated research 
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and education that will be used to address critical gaps in food safety science, particularly those related to human pathogens on/in plants and plant associated microbial communities. The AFRI funding increase could also expand opportunities for 

scientists broadly trained to meet the needs of the various agricultural industries. 

We recognize the difficult challenge facing the Subcommittee. However, we believe 

that investment in science for food and agriculture is essential for maintaining the 

Nation’s food, economic, and national security. Thank you for this opportunity to 

present our views. 

PREPARED STATEMENT OF THE AMERICAN PUBLIC POWER ASSOCIATION

The American Public Power Association (APPA) appreciates the opportunity to 

submit this statement outlining our fiscal year 2013 funding priorities within the 

jurisdiction of the Agriculture, Rural Development, Food and Drug Administration 

and Related Agencies Subcommittee. We support increased funding for farm bill 

Title IX programs, and $308 million for the Commodity Futures Trading Commission. 

APPA is the national service organization representing the interests of over 2,000 

municipal and other State and locally owned utilities in 49 States (all but Hawaii). 

Public power utilities deliver electricity to one of every seven electricity consumers 

(approximately 46 million people), serving some of the Nation’s largest cities. However, the vast majority of APPA’s members serve communities with populations of 

10,000 people or less. 

Department of Agriculture: Title IX Programs 

APPA supports full funding for programs authorized in Title IX of the 2008 farm 

bill for energy efficiency, renewable energy and biofuels. APPA is extremely pleased 

that the President’s budget provides $56 million for the Rural Energy for America 

Program (REAP). In addition, we request the full authorized level of $5 million for 

the Rural Energy Self-Sufficiency program, and $5 million for the Community Wood 

Energy Program for fiscal year 2012. 

Commodity Futures Trading Commission 

APPA supports the President’s budget request of $308 million for the Commodity 

Futures Trading Commission (CFTC), a $102 million increase over fiscal year 2012. 

As the CFTC continues to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, they will struggle to do so in a timely manner without 

the proper staffing levels and technology necessary to complete rulemakings and implementation. Given the direct effect the rulemakings will have on public power utilities and consumers, APPA is supportive of giving the CFTC the resources it needs 

to complete the rulemakings quickly and thoroughly. 

PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR MICROBIOLOGY

The American Society for Microbiology (ASM) is pleased to submit the following 

testimony on the fiscal year 2013 appropriation for food safety and science programs 

at the U.S. Department of Agriculture (USDA). The ASM is the largest single life 

science organization in the world with more than 38,00 members. 

The administration’s fiscal year 2013 budget for research and development (R&D) 

at USDA would provide $2.6 billion or a 2.7 percent increase over the fiscal year 

2012 level. There is a proposed increase of 23 percent for the USDA’s competitive 

grants program, the Agriculture Food and Research Initiative (AFRI), which funds 

research at both USDA facilities and land grant universities. Also increased is funding for research in food safety and global food security. The budget would increase 

support for USDA bioenergy research as well, in part to develop cellulosic and 

algae-based biofuels. We strongly support these program increases and ask Congress 

to approve the fiscal year 2013 request for these resources necessary to strengthen 

USDA research. 

Agriculture not only ensures a healthy, plenteous food supply, but contributes significantly to the economy. Agriculture related businesses account for 1-in-12 U.S. 

jobs. Net farm income is forecast to be nearly $92 billion this year. Farms and 

ranches produce food volumes roughly one-third greater than domestic demand, and 

the U.S. export share of the global ag market is usually about 20 percent. In 2011, 

exports of agriculture related products reached a record $136.3 billion, supporting 

more than 1 million jobs in an economic sector where exports outperform imports. 

In 2010, U.S. agriculture generated food products worth $352 billion, and USDA 

expects $410 billion for 2011 when market data are completed. Higher crop yields, 
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better animal breeding, and new products like genetically modified plants are 

among the many science based advances involved in the success of U.S. agriculture. 

R&D efforts have had tangible farm-to-fork results, making U.S. agriculture statistically one of the Nation’s most productive economic sectors. USDA research also improves food safety, helps develop sustainable energy, protects animal health, and 

preserves water quality and the environment. USDA personnel depend upon the 

best available methods and tools to accomplish public health goals like decreasing 

foodborne illnesses and crop losses due to microbial pathogens. 

USDA Funding Advances Science-Based Agriculture 

The Agricultural Research Service (ARS) conducts intramural research and the 

National Institute of Food and Agriculture (NIFA) distributes grants to colleges and 

universities for extramural research, extension, and education activities. The ARS 

budget request for discretionary funding is $1.103 billion, which is $8 million over 

the fiscal year 2012 enacted level. The NIFA request is $1.244 billion or $37 million 

over fiscal year 2012. Updated science and technology like genomic databases are 

critical to USDA’s oversight of the agriculture enterprise in this country. For example, one-third of total U.S. ag exports are genetically engineered (GE) crops or products from these crops, and about 80 percent of processed foods sold in the United 

States contain GE-derived ingredients. Federal regulators test an increasing number of samples resulting from food biotechnology; in fiscal year 2011 alone, testing 

increased by approximately 28 percent. USDA investigators and educators clearly 

must access the latest information when assessing the safety of our food supply. 

USDA researchers also discover best practice approaches to food production, microbial diseases of food animals and plants, and sustainable environments. A 2011 report by the Government Accountability Office called for stronger efforts by USDA 

in collecting data on antibiotic use in food animals, to better understand the relationship between use and pathogens’ drug resistance. These science based activities 

require adequate funding each year for USDA R&D programs. 

ARS maintains over 100 facilities in the United States and abroad with ongoing 

studies of optimal ag production, food safety and security, and environmental stewardship. ARS scientists are responsible for epidemiological studies of pest and disease transmission to protect crops. The fiscal year 2013 request identifies new proposed research, like the allocation of $7.6 million to develop management tools for 

soil-borne plant pathogens and nematodes. One goal is to identify beneficial soil microbes for use as biocontrol tools that stop plant pathogens naturally. ARS also will 

increase capacity at its overseas biological control laboratories to find new biocontrol 

agents for use in the United States. Another plant protection program receiving increased funding will develop plant varieties inherently resistant to infectious diseases. Other researchers would focus on livestock protection, such as projects to detect and eliminate tumor and enteric viruses in poultry. 

NIFA funds extramural research projects at the States’ agricultural experiment 

stations, land grant universities, State-based cooperative extension system, and 

other research and education institutions. Federal funds are distributed through 

grants and other competitive awards, and NIFA administers USDA’s primary grants 

program, the Agriculture and Food Research Initiative. The ASM supports the fiscal 

year 2013 budget for AFRI of $325 billion, an increase of $60.5 million. USDA identified priority areas funded in part by this increase will be developing better feedstocks for biofuel production, minimizing antibiotic resistance transmission among 

foodborne pathogens, and supporting additional graduate student training through 

the NIFA Fellows program. 

Research results reported in the past year are the best argument for sufficient 

USDA R&D funding in fiscal year 2013, illustrating the breadth of contributions 

made by USDA science: 

—ARS scientists found that using Fourier transform infrared-attenuated total reflection (FTIR–ATR) spectroscopy can rapidly identify citrus plant leaves infected with citrus greening disease, faster and cheaper than the current DNA 

method. 

—Last year, USDA and the U.S. Department of Energy jointly announced they 

will invest up to $30 million over 3 to 4 years to support R&D in biofuels, bioenergy, and high-value bio-based products. In August, they awarded 10 university grants totaling $12.2 million to improve the efficiency and cost-effectiveness 

of biofuel and bioenergy crops. 

—ARS molecular biologists are identifying genes in the yeast Saccharomyces 

cerevisiae to improve fermentation of fiber from corn, wheat, and other plants 

into cellulosic ethanol during biofuel manufacture. The genes are likely to improve the yeast’s ability to resist deleterious growth inhibitors created during 

acid pre-treatments. 
180 

—Last year, USDA and the U.S. Agency for International Development began 

construction on a university-associated ARS facility that will specialize in breeding wheat varieties resistant to stem rust disease, which threatens grain crops 

worldwide. 

—An ARS procedure developed to improve polymerase chain reaction (PCR) methods for detecting plant pathogens has increased test sensitivity by 100 to 1,000 

fold. Called Bio-PCR, it identified the bacterium responsible for Pierce’s disease 

of grapes in 90 percent of infected samples compared to 13 percent with conventional PCR. 

—A team of ARS scientists, screening Starmerella yeast for their ability to 

produce surfactant-like sophorolipids, are identifying green alternatives to the 

currently used petroleum-based surfactants in products like detergents and 

paints. 

USDA Funding Protects the U.S. Food Supply 

One in six Americans becomes sick each year with foodborne illnesses that could 

be prevented. USDA cooperates daily with other Federal partners, the Food and 

Drug Administration (FDA) and the Centers for Disease Control and Prevention 

(CDC) to safeguard the U.S. food supply through prevention, public and industry 

education, site inspections and disease outbreak investigations. The fiscal year 2013 

budget for food safety will continue USDA’s three part strategy to fulfill its food 

oversight responsibilities: prioritizing prevention, strengthening surveillance and enforcement and improving response and recovery. 

USDA scientists and inspectors are responsible for some important steps in reducing foodborne illness. For example, USDA expects to enforce new, stricter Salmonella and Campylobacter standards in turkeys and young chickens, which could 

prevent up to 25,000 human illnesses annually. During 2000–2010, the agency 

helped achieve the national goal of reducing E. coli O157 infection rates by 50 percent. In the past 15 years, the overall rates of six foodborne infections have declined 

by 23 percent, according to a 2011 CDC report. Both ARS and NIFA sponsor research on safe production, storage, processing, and handling of animal and plant 

products. For instance, ARS microbiologists are studying the relationship between 

cattle feed containing corn byproducts of biofuel processing and the persistence of 

pathogenic E. coli on the animals’ hides. Other USDA microbiologists are studying 

yeast extracts as an alternative to using antibiotics in organic turkey farming. 

The USDA’s Food Safety and Inspection Service (FSIS) enforces the Federal 

standards for all meat, poultry, and processed egg products, to ensure they are safe, 

wholesome, and properly labeled and packaged. The fiscal year 2013 budget proposes a decrease in FSIS discretionary funding: at $996 million, more than $8 million below fiscal year 2012 and $11 million less than the fiscal year 2011 level. Volumes of imported foods are steadily increasing and foodborne illnesses persist as 

major public health threats in the United States. Approximately 8,400 FSIS employees inspect foods and production methods at more than 6,200 slaughtering and processing facilities, import houses, and other federally regulated entities involved in 

food production. Their workload is daunting: for example, about 40 million cattle inspected yearly by FSIS personnel. 

Conclusion 

The ASM encourages Congress to increase the fiscal year 2013 budget in support 

of USDA’s science and food safety programs. USDA research in multiple agriculture 

sectors has pervasive impacts on our quality of life. The USDA mission reaches far 

beyond its role in transforming our Nation’s farms and ranches into highly productive, economically important businesses. USDA science protects human and animal 

health, prevents crop losses from disease and climate changes, seeks best practices 

to preserve the environment, encourages innovation in valuable agriculture based 

products and supports new generations of agriculture scientists and educators. 

PREPARED STATEMENT OF THE AMERICAN SOCIETY OF AGRONOMY; CROP SCIENCE

SOCIETY OF AMERICA; AND SOIL SCIENCE SOCIETY OF AMERICA

The American Society of Agronomy (ASA), Crop Science Society of America 

(CSSA), and Soil Science Society of America (SSSA) represent over 18,000 members 

in academia, industry, and Government, and 13,000 Certified Crop Advisers. The 

largest coalition of professionals dedicated to the agronomic, crop, and soil science 

disciplines in the United States, ASA, CSSA, and SSSA are dedicated to utilizing 

science in order to meet our growing food, feed, fiber, and fuel needs. We are pleased 

to submit the following funding recommendations for fiscal year 2013: ASA, CSSA, 

and SSSA urge the Subcommittee to support a $60 million increase from fiscal year 
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2012 for the Agriculture Food Research Initiative (AFRI), bringing total funding to 

$325 million, as requested in the President’s fiscal year 2013 budget proposal. This 

strong level of funding will enable AFRI to continue to target areas that are key 

to American scientific leadership including: plant health and production, food safety, 

sustainable bioenergy and global food security. ASA, CSSA, and SSSA further recommend funding the Agricultural Research Service (ARS) at $1.13 billion in fiscal 

year 2013 to recognize the essential role of the intramural programs in ensuring the 

safety of our Nation’s food system. In addition, ASA, CSSA, and SSSA recommend 

funding the United States Department of Agriculture’s (USDA) National Institute 

of Food and Agriculture (NIFA) at $1.244 billion (an increase of $37 million over 

fiscal year 2012) in order to maintain continued support for research, education, and 

extension programs. Finally, we support a strong commitment to farm bill conservation programs and request that they be funded at levels agreed to in the 2008 farm 

bill to ensure preservation of our Nation’s essential resources—soil and water. 

Background 

The success of the agriculture and food industry plays a significant role in the 

overall health and security of the U.S. economy. In 2010, U.S. farms and ranches 

spent $288 billion to produce goods valued at $369 billion. The value of U.S. food 

and agriculture exports is expected to be more than $140 billion in 2011, creating 

a record trade surplus of $42.5 billion. Furthermore, the jobs of 21 million Americans depend on the vitality of the U.S. agriculture and food sector. 

Investments in publicly funded research are critical for maintaining a successful agriculture and food sector. For every $1 invested in publicly funded agricultural 

and food research, $20 in economic activity is generated. Budgetary decisions made 

today have far-reaching impacts, as the scientific research funded today will be responsible for enhancing the Nation’s agricultural productivity and economic prosperity in the future. A strengthened commitment to investments in science for food 

and agriculture is essential for maintaining the Nation’s food, economic, and national security. 

Agricultural Research Service (ARS) 

ASA, CSSA, and SSSA applaud the Agricultural Research Services’ (ARS) ability 

to respond to and address agricultural problems of high national priority. ARS’s 

2,200 scientists are located at 90∂ research locations, managing 800 research 

projects that help solve current and future crop and livestock production and protection, human nutrition and environmental quality challenges. ARS programs and 

technologies ensure high-quality, safe food and other agricultural products; assess 

the nutritional needs of Americans; help to sustain a competitive agricultural economy; enhance the natural resource base and the environment; and, provide economic 

opportunities for rural citizens and communities. ARS also forms key partnerships 

that move new technologies to the marketplace. 

These partnerships are especially important to leverage during a time when our 

Nation’s economy remains vulnerable and Federal funding is constrained. Such cooperative research and development helps foster American businesses and enhances 

the position of the United States as a global leader in food, feed, fiber and fuel production. 

Highlighting National Institute of Food and Agriculture Programs (NIFA) 

Agriculture and Food Research Initiative (AFRI).—ASA, CSSA, and SSSA strongly endorse funding AFRI at $325 million, which is less than half of what is authorized 

in the Food, Conservation, and Energy Act of 2008. AFRI is the premier competitive 

grants program for fundamental and applied research, extension and education in 

support of our Nation’s food and agricultural systems. Investments in AFRI bolster 

work performed by ARS, America’s land grant colleges and universities, the private 

sector and the American farmer. 

Hatch Act Formula Funding.—ASA, CSSA, and SSSA support $236 for Hatch Act 

formula funds. These funds provide research grants to our Nation’s great land-grant 

colleges and universities. Any additional cuts to academic funding will reduce the 

ability of our scientists and students to conduct imperative research such as developing drought resistant wheat varieties. 

Sustainable Agriculture Research and Education Programs (SARE).—ASA, CSSA, 

and SSSA support the President’s budget request for SARE at $22.7 million. This 

includes $4.7 million for the Professional Development Program and $3.5 million for 

the creation of a new Federal-State Matching Grant SARE Program. SARE directly 

supports farmer-led research and development in practices that, in turn, increase 

food, fuel and fiber sustainability. In 2007, 64 percent of farmer and rancher grantees noted that because of an SARE project, they had achieved higher sales, and another 79 percent had experienced improved soil quality. 
182 

Cooperative Extension System.—Extension forms a critical part of research, education and extension program integration, a feature unique to NIFA. ASA, CSSA, 

and SSSA support $294 million for Smith-Lever 3(b) and 3(c) to support continuing 

education and research activities. 

Natural Resources Conservation Service 

ASA, CSSA, and SSSA also support farm bill conservation programs that help 

farmers and ranchers adopt critical conservation practices to reduce soil erosion, 

conserve water, address nutrient management concerns and contribute to carbon sequestration. NRCS conservation programs are an essential tool to help mitigate and 

address the challenge of producing the food, feed, fuel and fiber needed for a growing global population. We urge the Subcommittee to fund these programs at levels 

agreed to in the 2008 farm bill. 

Summary 

A balance of funding mechanisms, including intramural, competitive, and formula 

funding is essential to maintain the capacity of the United States to conduct both 

basic and applied agricultural research, to improve crop and livestock quality, and 

to deliver safe and nutritious food products while protecting and enhancing the Nation’s environment and natural resource base. 

Thank you for your consideration. For additional information or to learn more 

about the ASA, CSSA, and SSSA, please visit www.agronomy.org, www.crops.org, or 

www.soils.org. 

PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR NUTRITION

The American Society for Nutrition (ASN) appreciates the opportunity to submit 

testimony regarding fiscal year 2013 appropriations for the U.S. Department of Agriculture (USDA) National Institute of Food and Agriculture’s Agriculture and Food 

Research Initiative (AFRI) and the USDA Agricultural Research Service (ARS). 

Founded in 1928, ASN is a nonprofit scientific society with more than 4,500 members in academia, clinical practice, Government and industry. ASN respectfully requests $1.2 billion for USDA’s Agricultural Research Service, and we urge you to 

adopt the President’s request of $325 million for the Agriculture and Food Research 

Initiative competitive grants program in fiscal year 2013. 

Agriculture and Food Research Initiative 

The USDA has been the lead nutrition agency and the most important Federal 

agency influencing U.S. dietary intake and food patterns for years. Agricultural research is essential to address the ever-increasing demand for a healthy, affordable, 

nutritious and sustainable food supply. The AFRI competitive grants program is 

charged with funding research, education, and extension grants and integrated research, extension, and education grants that address key problems of national, regional, and multi-state importance in sustaining all components of agriculture. 

These components include human nutrition, farm efficiency and profitability, ranching, renewable energy, forestry (both urban and agro forestry), aquaculture, food 

safety, biotechnology, and conventional breeding. AFRI has funded cutting-edge, agricultural research on key issues of timely importance on a competitive, peer-reviewed basis since its establishment in the 2008 farm bill. Adequate funding for agricultural research is critical to provide a safe and nutritious food supply for the 

world population, to preserve the competitive position of U.S. agriculture in the 

global marketplace, and to provide jobs and revenue crucial to support the U.S. 

economy. 

In order to achieve these benefits, AFRI must be able to advance fundamental 

sciences in support of agriculture and coordinate opportunities to build off of these 

discoveries. Therefore, ASN strongly urges you to adopt the President’s request of 

$325 million for the Agriculture and Food Research Initiative competitive grants 

program in fiscal year 2013. ASN also strongly supports funding AFRI at the fully 

authorized level of $700 million as soon as practical. Current flat and decreased 

funding for AFRI hinders scientific advances that support agricultural funding and 

research. 

Agricultural Research Service 

The ARS is the Department of Agriculture’s lead scientific research agency. The 

ARS conducts research to develop and transfer solutions to agricultural problems of 

high national priority. It is also the job of ARS to ensure high-quality, safe food, 

and other agricultural products; assess the nutritional needs of Americans; sustain 

a competitive agricultural economy; enhance the natural resource base and the envi-
183 

ronment; and provide economic opportunities for rural citizens, communities, and 

society as a whole. 

Nutrition monitoring conducted in partnership by the USDA ARS with the Department of Health and Human Services (HHS) is a unique and critically important 

surveillance function in which dietary intake, nutritional status, and health status 

are evaluated in a rigorous and standardized manner. (ARS is responsible for food 

and nutrient databases and the ‘‘What We Eat in America’’ dietary survey, while 

HHS is responsible for tracking nutritional status and health parameters.) Nutrition 

monitoring is an inherently governmental function and findings are essential for 

multiple Government agencies, as well as the public and private sector. Nutrition 

monitoring is essential to track what Americans are eating, inform nutrition and dietary guidance policy, evaluate the effectiveness and efficiency of nutrition assistance programs, and study nutrition-related disease outcomes. Because of past funding deficiencies, some food composition database entries don’t reflect the current 

food supply, which may negatively impact programs and policies based on this information. It is imperative that needed funds to update USDA’s food and nutrient 

databases and the ‘‘What We Eat in America’’ dietary survey, both maintained by 

the USDA ARS, are appropriated to ensure the continuation of this critical surveillance of the Nation’s nutritional status and the many benefits it provides. 

With the growing need for agricultural research to ensure that the country is 

healthy, ARS requires access to sufficient funding. Therefore, ASN requests that 

ARS receive $1.2 billion in fiscal year 2013. At least $10 million above current funding levels is necessary to ensure that the critical surveillance of the Nation’s nutritional status and the many other benefits ARS provides continue. With such funding, the ARS will be able to continue its vision of leading America toward a better 

future through agricultural research and information. 

USDA AFRI and ARS programs are both equally important to the nutrition field 

because together they provide the infrastructure and the investigator-initiated, peerreviewed research that generates new knowledge and allows for rapid progress toward meeting national dietary needs. These programs allow USDA to make the connection between what we grow and what we eat. Through strategic nutrition monitoring, we can also learn how dietary intake affects our health. 

Thank you for your support of USDA ARS and AFRI, and thank you for the opportunity to submit testimony regarding fiscal year 2013 appropriations. Please contact John E. Courtney, Ph.D., Executive Officer, at jcourtney@nutrition.org, if ASN 

may provide further assistance. 

PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR THE PREVENTION OF CRUELTY

TO ANIMALS

On behalf of the American Society for the Prevention of Cruelty to Animals 

(ASPCA) and our 2.5 million supporters nationwide, thank you for the opportunity 

to submit this written testimony. Founded in 1866, the ASPCA was the first humane organization in North America. Our mission, as stated by founder Henry 

Bergh, is ‘‘to provide effective means for the prevention of cruelty to animals 

throughout the United States.’’ The ASPCA works to rescue animals from abuse, 

pass humane laws, and share resources with other animal protection groups nationwide. 

The fiscal year 2013 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations bill presents opportunities to not only cut 

unnecessary and wasteful Federal spending, but also to ensure that programs to 

protect animals are being effectively implemented. As you craft the fiscal year 2013 

appropriations bill, the ASPCA asks that you please consider the following provisions to ensure that Federal funds are being effectively and responsibly spent to 

protect animals. 

Reinstatement of the Ban on Federal Funding for Horse Slaughterhouse Inspections 

The fiscal year 2012 Agriculture Appropriations bill failed to include a provision 

that barred Federal funding of USDA inspectors at horse slaughter plants in the 

United States. Added as an amendment to the Agricultural Appropriations bill in 

2005, the original measure was supported by huge, bipartisan votes (69–28 in the 

Senate and 269–158 in the House). Each successive appropriations bill included the 

provision until last year. This provision effectively prevented horse slaughter in the 

United States for human consumption and saved taxpayers up to $5 million a year. 

Now that the ban on inspections has been removed, horse slaughterhouses could resume operations on American soil, even though horsemeat is not sold for human 

consumption in the United States. 
184 

This is distressing on two counts. First, at a time when Congress is cutting funds 

for many vital programs across the entire Federal budget, it is outrageous that taxpayers would be asked to spend $5 million for something as senseless as horse 

slaughter. Second, since Americans do not eat horsemeat, this action will benefit 

only foreign markets in Asia and Europe, where horsemeat is considered a delicacy. 

Contrary to what some may claim, horse slaughter does not create jobs. The last 

three remaining slaughter plants in the United States only created a handful of 

physically dangerous and low paying jobs. Nor is horse slaughter a humane way to 

end a horse’s life. Horses are ill-suited for commercial slaughterhouses due to their 

biology. They often endure repeated blows to the head and remain conscious during 

slaughter and dismemberment. The USDA has documented, at length, the cruel 

treatment of horses at domestic slaughterhouses. 

Ending horse slaughter enjoys mainstream, bipartisan support in Congress. The 

American Horse Slaughter Prevention Act, which would permanently ban horse 

slaughter in this country and the export of horses for slaughter abroad, has overwhelmingly bipartisan support in Congress with 26 cosponsors in the Senate and 

over 160 in the House. Beyond Congress, efforts to end horse slaughter enjoy strong 

mainstream support with the American public. A 2012 poll commissioned by the 

ASPCA and conducted by Lake Research Partners found that 80 percent of American voters are opposed to the slaughter of horses for human consumption. 

The ASPCA requests that the Committee make the fiscally responsible and humane decision to reinstate the ban on Federal funding for horse slaughterhouse inspections by the USDA by inserting the following language: 

‘‘None of the funds made available in this Act may be used to pay the salaries 

or expenses of personnel to— 

‘‘(1) inspect horses under section 3 of the Federal Meat Inspection Act (21 

U.S.C. 603); 

‘‘(2) inspect horses under section 903 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1901 note; Public Law 104–127); or 

‘‘(3) implement or enforce section 352.19 of title 9, Code of Federal Regulations.’’ 

Maintain or Increase Animal Welfare Act Enforcement Funding for the Inspection of 

Puppy Mills 

One of the functions of the USDA’s Animal and Plant Health Inspection Service 

(APHIS) is to ensure the humane care and treatment of animals by enforcing the 

requirements of the Animal Welfare Act of 1966 (AWA). Included in this mandate 

is the inspection of large-scale commercial dog breeding operations, which prioritize 

profit over welfare. Dogs raised in these facilities, commonly known as puppy mills, 

spend their entire lives in small, crowded cages without adequate veterinary care, 

food, water, and socialization. These dogs receive no exercise or basic grooming. To 

minimize waste cleanup, dogs are often kept in cages with wire flooring that injures 

their paws and legs. Because these cages are often stacked, waste falls through wire 

floors onto the animals housed below. Female dogs usually have little to no recovery 

time between bearing litters. When, after a few years, they can no longer reproduce, 

the dogs are often abandoned or killed. 

In 2010, the USDA’s Office of the Inspector General (OIG) released a report detailing the lax and ineffective enforcement of the AWA for puppy mills. In response, 

the House Appropriations Committee late last year, recognizing the importance of 

inspecting ‘‘problematic dog dealers,’’ repurposed $4 million for puppy mill inspection enforcement. The same OIG report recommended closing a loophole in the AWA 

that exempts from regulation breeders selling directly to customers over the Internet. In compliance with that request, the USDA is currently drafting regulations 

that would close that loophole, thereby increasing the number of entities regulated 

and inspected under the AWA. These rules will likely be final by 2013 and will require increased funding for pre-licensing inspections of these new entities and for 

continued, annual inspections of these breeding facilities once licensed. The ASPCA 

is disappointed that the President’s fiscal year 2013 budget request includes a reduction in funding for APHIS’s AWA enforcement from $28 million in the previous 

year to $25 million. For fiscal year 2012, Congress approved a 20 percent increase 

in the USDA’s annual budget to strengthen inspections and enforcement of the 

AWA. This is on top of $4 million in reprogrammed fiscal year 2011 funds approved 

in October by House Agriculture Appropriations leaders to address problematic dog 

dealers. We encourage the Committee to continue this trend of prioritizing AWA enforcement. The ASPCA requests that the Committee maintain or increase the previous year’s funding for APHIS’s Animal Welfare Act enforcement, build upon the 

advancements of last year’s repurposing of funds, and encourage the USDA to improve its inspections of puppy mills. 
185 

Exceed the Statutory Funding Cap for Horse Soring Enforcement 

In addition to enforcing the Animal Welfare Act, APHIS is charged with protecting horses through its enforcement of the Horse Protection Act (HPA) of 1970. 

USDA inspectors enforce the HPA by conducting surprise inspections at walking 

horse shows by examining horses for soring and the presence of harmful and illegal 

chemicals. Horse soring is a cruel practice in which trainers use painful chemicals 

and other devices to cause such agony to a horse’s front limbs that any contact with 

the ground makes the horse quickly jerk up its leg, producing the pronounced gait 

prized by the walking horse industry. Recently, the USDA’s Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Tennessee successfully 

obtained guilty pleas from four individuals arrested for horse soring in Tennessee. 

While the ASPCA applauds these successful prosecutions, in most cases the cruelty of horse soring goes unnoticed because USDA officials do not have the resources 

to oversee most shows. In 2011, USDA inspectors had the resources to attend just 

62 of approximately 700 walking horse shows nationwide. Other shows were overseen solely by inspectors trained and hired by the horse industry itself. Although 

present at only 8–10 percent of shows, USDA inspectors found over 50 percent of 

reported violations last year. One of the defendants in the recent case in the Eastern District of Tennessee testified that ‘‘every Walking Horse that enters into a 

show ring is sored... They’ve got to be sored to walk.’’ Clearly the problem is endemic and industry self-regulation is not effectively exposing violators. A greater 

USDA presence is necessary to root out the bad actors and hold them accountable. 

Since passage of the HPA in 1970, effective USDA enforcement of horse soring 

has been frustrated by a $500,000 statutory funding cap on activities under the authority of HPA. Though Congress can choose to ignore the cap and fund the program 

at higher levels, only once, in fiscal year 2012, did the Committee choose to do so. 

If APHIS is to eradicate soring, the program must be adequately funded so that it 

can assert a strong and frequent presence at horse shows. It must also have proper 

funding to sample horses for the presence of foreign substances, such as those documented in the most recent criminal soring prosecutions. Finally, HPA enforcement 

should not have to rely on lax and inadequate industry self-regulation. The agency 

requires increased funding in order to certify independent veterinarians who are not 

biased by their involvement in the walking horse industry. APHIS has now begun 

this process and needs greater resources for the program to be effective. 

The President’s fiscal year 2013 budget request includes only $493,000 for HPA 

enforcement, which is below the statutory cap and below the $696,000 that this 

Committee provided last year. The ASPCA requests that the Committee continue 

to furnish the USDA with the proper resources and continue to exceed the statutory 

funding cap to allow the USDA to properly enforce the Horse Protection Act and 

prevent the cruel practice of horse soring. 

Ensure Proper Enforcement of the USDA Ban on Double-Deck Transport of Horses 

Bound for Slaughter 

Double-deck trailers are dangerous and inhumane when used to transport horses. 

The USDA bans the use of these trailers for horses bound for slaughter, stating: 

‘‘We do not believe that equines can be safely and humanely transported on a conveyance that has an animal cargo space divided into two or more stacked levels.’’ 

The USDA’s Veterinary Services (VS) program is charged with enforcing this regulation. 

Double-deck trailers are designed for cattle and other short-necked livestock—not 

horses. Because horses are significantly taller and require more head room, these 

trailers cannot physically provide enough space to stand upright, leading to unstable 

footing, falls, injuries, trampling, and death. As long as Congress allows horses to 

be transported and exported for slaughter, VS should take proper steps to ensure 

that horses are not transported in cramped and inhumane double-deck trailers during their final journeys. Currently, VS does not employ sufficient inspectors in the 

field or at the border to ensure that horses are not being transported to slaughter 

in double-deck trailers. 

The ASPCA requests that the Committee direct Veterinary Services to properly 

and effectively enforce the ban on the use of double-deck trailers to transport horses 

bound for slaughter. 

Defund Licensing and Relicensing of Class B Dealers 

Currently, two types of animal dealers are licensed by the USDA to sell animals 

for research: Class A ‘‘purpose-bred’’ dealers and Class B ‘‘random source’’ dealers. 

Class A dealers are highly regulated businesses that raise their own animals. Class 

B dealers, on the other hand, routinely obtain animals from suppliers with unknown 

or suspicious backgrounds. Many of these suppliers obtain the dogs and cats 
186 

through theft, or by posing as adopters and responding to ‘‘free to good home’’ advertisements. Class B dealers pay suppliers for each animal, creating a financial incentive for individuals to steal pet dogs and cats from owners’ properties. Class B dealers then sell the pets to researchers. As a result, many lost or stolen family pets 

could end up as part of an experiment. 

The USDA spends hundreds of thousands of taxpayer dollars each year unsuccessfully trying to regulate Class B dealers. The process is both lengthy and time consuming; the USDA must do lengthy ‘‘tracebacks’’ to try to determine the source of 

the animals. At one point, the USDA estimated that it spent as much as $300,000 

to regulate approximately 10 Class B dealers, or about $30,000 per license. Even 

so, the department acknowledges that it is unable to guarantee that dogs and cats 

are not being illegally acquired for use in experiments. Five of the only eight dealers 

currently in operation are under investigation by the USDA, and one was recently 

indicted on a number of Federal charges, including identity theft. Additionally, the 

inability to effectively regulate Class B dealers leads to animals often being kept 

in deplorable and inhumane conditions. 

Removing animals sourced from Class B dealers would have little impact on our 

Nation’s research capabilities. In May 2009, a National Academies report released 

on the Class B dealer system concluded that ‘‘Class B dealers are not necessary for 

supplying dogs and cats for NIH-funded [National Institutes of Health] research.’’ 

The NIH began implementing a pilot program in March 2011 to eliminate the use 

of Class B sourced dogs in favor of other more reputable sources for NIHsupported 

research. 

Since the NIH is already taking steps to phase out the use of random sourced animals in research, there is no need or justification for the USDA to continue to spend 

Federal funds to support the inhumane and corrupt system of Class B dealers. The 

Committee has an opportunity to not only save tax dollars but to also put an end 

to its tacit endorsement of inhumane and possibly illegal businesses. 

The ASPCA requests that the Committee insert the following language to prohibit 

the USDA from spending funds on new licensing or relicensing of Class B Dealers: 

‘‘Provided, That appropriations herein made shall not be available for any activities or expense related to the licensing of new Class B dealers who sell live, random 

source dogs and cats for use in research, teaching, or testing, or to the renewal of 

licenses of existing Class B dealers who sell live, random source dogs and cats for 

use in research, teaching, or testing’’. 

Defund Wildlife Services’ Lethal Predator Control 

The USDA’s Wildlife Services (WS) division is a little-known Federal agency that 

uses tax dollars to kill wildlife species considered by private landowners and ranchers to be problematic or nuisances. Unattended traps and poisons—and even helicopter hunting—are all routine features of WS’s campaign to kill wildlife. Their 

work is often carried out without oversight, fiscal accountability, or public notification. The methods they employ are often indiscriminate and ineffective. In some 

cases, WS traps and poisons have unintentionally killed beloved family pets. 

The WS lethal predator control program is a waste of taxpayer dollars. Not only 

does WS provide a subsidized service for private landowners, but also its indiscriminate and random targeting of predators is not based on sound science. The USDA 

estimates that it spends $10 million on its lethal predator control program. By cutting this wasteful and unnecessary program, Congress can ensure that U.S. taxpayers will stop subsidizing risky wildlife control methods for the benefit of private 

property owners. 

The ASPCA requests that the Committee act in a fiscally sound and humane 

manner and reduce funding for Wildlife Services Damage Management by $10 million. 

Direct APHIS Veterinary Services To Prioritize Twenty-Eight Hour Law Enforcement 

Passed in 1873, the Twenty-Eight Hour Law states that animals cannot be transported interstate via ‘‘rail carrier, express carrier, or common carrier’’ for more than 

28 hours consecutively without being unloaded for rest, food, and water. It was not 

until 2005 that the USDA agreed to extend the statute to interstate truck transport, 

which comprises the overwhelming majority of modern farm animal transport. The 

Twenty-Eight Hour Law is an important protection for livestock, as many travel 

great distances en route to livestock auctions and slaughter facilities. However, enforcement of this act is still lacking. APHIS Veterinary Services (VS) program is 

charged with enforcing the Federal Twenty-Eight Hour Law. Like its lax enforcement of the ban on double-decked trailers for horses bound for slaughter, VS has 

not made enforcement of the Twenty-Eight Hour Law an enforcement priority. 
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1http://www.gatesfoundation.org/annual-letter/2012/Pages/home-en.aspx. 

The ASPCA requests that the Committee direct APHIS Veterinary Services to 

prioritize Twenty-Eight Hour Law enforcement. 

PREPARED STATEMENT OF THE AMERICAN SOCIETY OF PLANT BIOLOGISTS

On behalf of the American Society of Plant Biologists (ASPB) we submit this 

statement for the official record in support of funding for agricultural research by 

the U.S. Department of Agriculture (USDA). ASPB supports the requested level for 

USDA’s Agriculture and Food Research Initiative (AFRI) of $325 million as well as 

the requested level of the Agricultural Research Service (ARS) at $1.13 billion. 

This testimony highlights the importance of biology, particularly plant biology, as 

the Nation seeks to address vital issues including a sustainable food supply, energy 

security, and protecting our environment. We would like to thank the Subcommittee 

for its consideration of this testimony and for recognizing that its support of agricultural research is an important investment in America’s future in this difficult fiscal 

environment. 

Food, Fuel, Environment, and Health: Plant Biology Research and America’s Future 

Plants are vital to our very existence. They harvest sunlight, converting it to 

chemical energy for food and feed; they take up carbon dioxide and produce oxygen; 

and they are the primary producers on which all life depends. Indeed, plant biology 

research is making many fundamental contributions in the areas of fuel security 

and environmental stewardship; the continued and sustainable development of better foods, fabrics, and building materials; and in the understanding of basic biological principles that underpin improvements in the health and nutrition of all Americans. 

Despite the fact that foundational plant biology research—the kind of research 

funded by agencies such as USDA—underpins vital advances in practical applications in agriculture, health, energy, and the environment, the amount of money invested in understanding the basic function and mechanisms of plants is relatively 

small. In his 2012 annual letter Bill Gates wrote, ‘‘Given the central role that food 

plays in human welfare and national stability, it is shocking—not to mention shortsighted and potentially dangerous—how little money is spent on agricultural research.’’ 1 This is especially true considering the significant positive impact crop 

plants have on the Nation’s economy and in addressing some of our most urgent 

challenges like food and energy security. 

Understanding the importance of these areas and in order to address future challenges, ASPB organized the Plant Science Research Summit held in September 

2011. With funding from the National Science Foundation, USDA, Department of 

Energy, and the Howard Hughes Medical Institute, the Summit brought together 

representatives from across the full spectrum of plant science research to identify 

critical gaps in our understanding of plant biology that must be filled over the next 

10 years or more in order to address the grand challenges facing our Nation and 

our planet. The grand challenges identified at the Summit include: 

—In order to feed everyone well, now and in the future, advances in plant science 

research will be needed for higher yielding, more nutritious varieties able to 

withstand a variable climate. 

—Innovations leading to improvements in water use, nutrient use, and disease 

and pest resistance that will reduce the burden on the environment are needed 

and will allow for improved ecosystem services such as clean air, clean water, 

fertile soil, and biodiversity benefits such as pest suppression and pollination. 

—In order to fuel the future with clean energy—and to ensure that our Nation 

meets its fuel requirements—improvements are needed in current biofuels technologies including breeding, crop production methods, and processing. 

—For all the benefits that advances in plant science bestow—in food and fiber 

production, ecosystem and landscape health, and energy subsistence—to have 

lasting, permanent benefit they must be economically, socially, and environmentally sustainable. 

In spring 2012, a report from the Plant Science Research Summit will be published. This report will further detail priorities and needs to address the grand challenges. 

Recommendations 

Because of our membership’s extensive expertise and participation in the academic, industry and Government sectors, ASPB is in an excellent position to articu-
188 

late the Nation’s plant science priorities as they relate to agriculture. Our recommendations are as follows: 

—Since the establishment of NIFA and AFRI, interest in USDA research has increased dramatically, a trend ASPB hopes to see grow in the future. However, 

much higher investment in competitive funding is needed if the Nation is to 

continue to make ground-breaking discoveries and accelerate progress toward 

addressing urgent national priorities. ASPB encourages the appropriation of the 

requested level of $325 million in fiscal year 2013 for AFRI, which, although 

far short of the authorized level of $700 million, provides sound investment in 

today’s fiscal environment. 

—The Agricultural Research Service (ARS) provides vital research to serve 

USDA’s mission and objectives and the Nation’s agricultural sector. The need 

to bolster ARS efforts to leverage and complement AFRI is great given the challenges in food and energy security. ASPB is supportive of a strong ARS and 

supports the $1.13 billion request for ARS in fiscal year 2013. 

—USDA has focused attention in several key priority areas including childhood 

obesity, climate change, global food security, food safety, and sustainable bioenergy. Although ASPB appreciates the value of such strategic focus, ASPB also 

emphasizes the importance of robust support for AFRI’s Foundational Program 

because scientific research supported by this program provides a basis for outcomes across a wide spectrum, often leading to groundbreaking developments 

that cannot be anticipated in advance. 

—Current estimates predict a significant shortfall in the needed scientific and engineering workforce as the demographics of the U.S. workforce change. For example, there is a clear need for additional scientists in the areas of interdisciplinary energy research and plant breeding. ASPB applauds the creation of the 

NIFA Fellows program and calls for additional funding of specific programs 

(e.g., training grants and fellowships) to provide this needed workforce over the 

next 10 years and to adequately prepare these individuals for careers in the agricultural research of the future. 

—Considerable research interest is now focused on the use of plant biomass for 

energy production. However, if crops are to be used to their full potential, extensive effort must be expended to improve the understanding of their basic biology 

and development, as well as their agronomic performance. Therefore, ASPB 

calls for additional funding that would be targeted to efforts to increase the utility and agronomic performance of bioenergy crops. 

—With NIFA now in place, USDA is in a strong position to cultivate and expand 

interagency relationships (as well as relationships with private philanthropies) 

to take on bolder new initiatives to address grand challenges related to food, 

energy, the environment, and health. ASPB also appreciates the need to focus 

resources in key priority areas. However, ASPB emphasizes continued focus on 

individual grantees, in addition to group awards and larger multi-institution 

partnerships. Truly paradigm shifting discoveries cannot be predicted through 

collaborative efforts alone and, thus, there is a need to maintain a broad, diverse, and robust research agenda. 

Thank you for your consideration of our testimony on behalf of the American Society of Plant Biologists. Please do not hesitate to contact ASPB if we can be of any 

assistance in the future. For more information about the American Society of Plant 

Biologists, please see www.aspb.org. 

PREPARED STATEMENT OF THE ANIMAL WELFARE INSTITUTE

Thank you for the opportunity to submit testimony as you consider fiscal year 

2013 funding priorities. Our testimony addresses the U.S. Department of Agriculture’s Animal Care Program of the Animal and Plant Health Inspection Service, 

and the Food Safety and Inspection Service. AWI has also joined several horse show 

industry organizations, other animal protection groups, and the key association of 

equine veterinarians on a separate statement calling for sufficient funding to enable 

USDA to do a better job enforcing the Horse Protection Act. 

Animal Care/Animal Welfare Act Enforcement/Class B Random Source Dealers 

In 1966, Congress passed the Animal Welfare Act (AWA) to prevent the mistreatment of animals and to assure families that their pets would not be sold for laboratory experiments after an expose ́ revealed the widespread theft of pets for that purpose. 

Unfortunately, 46 years later, this is still a problem. Despite the well-meaning intent of the AWA and the enforcement efforts of the U.S. Department of Agriculture 
189 

(USDA), the AWA routinely fails both to reliably protect pet owners against the actions of Class B dealers who sell random source dogs and cats for use in research 

(also known as ‘‘random source’’ dealers), and to ensure that these dealers provide 

humane care for the dogs and cats kept on their premises. 

In response to repeated requests from Congress, the National Institutes of Health 

(NIH) funded a study by the National Academy of Sciences (NAS) of the use of Class 

B dogs and cats in NIH-funded research. The NAS’s 2009 report ‘‘Scientific and Humane Issues in the Use of Random Source Dogs and Cats in Research’’ describes 

a ‘‘complicated tangle of trade’’ in animals sold for use in experiments, and notes 

that ‘‘loopholes in the AWR [Animal Welfare Regulations] permit pets to enter the 

research pipeline via Class B dealers.’’ Furthermore, ‘‘. . . USDA could not offer assurances that pet theft does not occur, and agreed that such a crime is exceedingly 

difficult to prove . . .’’ That difficulty notwithstanding, the report stated that there 

are ‘‘descriptions of thefts provided by informants in prison... and documented 

accounts of lost pets that have ended up in research institutions through Class B 

dealers.’’ (p.84) 

[As part of its mandate, the NAS report assessed whether there is a scientific rationale for recipients of research grants from NIH to purchase dogs and cats from 

random source Class B dealers. The report concluded that there is not.] 

Across the Nation, these random source Class B dealers—and the middlemen who 

work for them, known as ‘‘bunchers’’—use deceit and fraud to acquire dogs and cats. 

Their tactics include tricking animals’ owners into giving away their dogs and cats 

by posing as someone interested in pet adoption, and the outright theft of family 

pets left unattended. The treatment of the animals sold by these random source 

Class B dealers is shocking and cruel. Hundreds of animals are kept in squalid conditions and are denied much needed veterinary care. Again, the NAS report cited 

a variety of problems with regard to animal welfare and enforcement. 

USDA has had to implement a lengthy and time-consuming enforcement protocol 

for these random source dealers, involving quarterly inspections (more than any 

other licensees) and ‘‘tracebacks,’’ in order to attempt to verify the source of their 

animals. While it is exceedingly difficult to put a price tag on this exaggerated level 

of oversight, USDA did estimate for the NAS report, at a time when 11 random 

source Class B dealers were still in business, that it was spending as much as 

$300,000 per year to regulate that small number of dealers. There are now eight 

dealers left, with one’s license still suspended and four others under investigation. 

One dealer who recently gave up his license had been indicted on a number of Federal charges, including conspiracy, aggravated identity theft, mail fraud, and making false statements to a Federal agency. 

Congress, too, has spent an inordinate amount of time reviewing the actions of 

Class B dealers and prodding USDA and NIH to address their respective Class B 

dealer problems. NIH long ago banned its intramural researchers from using Class 

B dealers but had until recently ignored Congress’ repeated calls for it to do likewise 

with respect to outside researchers. 

As a result of the NAS report, ongoing congressional interest, enhanced (but disproportionate to their numbers) oversight by USDA, and evaporating demand for 

their dogs and cats, very few of these dealers remain, and with NIH’s phased-in ban 

on the use of Class B dealers by its extramural researchers, the Class B dealer system has become a cruel and expensive anachronism. Those who continue to operate 

are an unjustifiable drain on USDA’s resources. However, as long as it is possible 

to issue and renew licenses for such dealers, there is the risk that this anachronism 

will continue to limp along, wasting taxpayer money and perpetuating the inhumane treatment of animals and the trade in illegally acquired dogs and cats. 

For this reason, we respectfully request that Congress prohibit any further spending by USDA both to grant new licenses and to renew existing licenses for Class 

B dealers selling dogs and cats for research purposes by including the following language in the report accompanying the fiscal year 2013 agriculture appropriations: 

‘‘Provided, That appropriations herein made shall not be available for any activities or expense related to the licensing of new Class B dealers who sell dogs and 

cats for use in research, teaching, or testing, or to the renewal of licenses of existing 

Class B dealers who sell dogs and cats for use in research, teaching, or testing’’. 

While this step in and of itself will not immediately save much money, it will lead 

to more significant savings later as USDA’s enforcement load with respect to these 

entities is eliminated. 

Food Safety and Inspection Service/Humane Methods of Slaughter Act Enforcement 

We appreciate the generous support provided by Congress during the past decade 

for enforcing the Humane Methods of Slaughter Act (HMSA). While USDA’s enforce-
190 

ment of the law has increased recently, attention to the issue remains uneven 

among Federal regional districts. 

An analysis of Humane Activities Tracking System (HATS) data reveals that in 

calendar year 2010, some USDA districts spent 10–20 times the number of hours 

on humane enforcement, per animal slaughtered, as other districts. Overall, USDA 

continues to allot an extremely small percentage of its resources to humane slaughter. For example, in calendar year 2010, only 0.5 percent of all noncompliance 

records written by FSIS were for humane violations. 

Repeat violators present a major enforcement problem for FSIS. Of the 205 federally inspected plants that have been suspended for humane slaughter violations 

since January 1, 2008, 32 percent have been suspended more than once within a 

1 year period. Moreover, 32 plants have been suspended on three or more occasions 

during the past 4 years. 

Federal inspection personnel have inadequate training in humane enforcement 

and inadequate access to humane slaughter expertise. Enforcement documents reveal that inspectors often react differently when faced with similar violations. District Veterinary Medical Specialists (DVMS) are stationed in each district to assist 

plant inspectors with humane enforcement and to serve as a liaison between the 

district office and headquarters on humane matters. However, the work load of each 

of the 15 DVMSs, which includes visiting each meat and poultry plant within the 

district to perform humane audits and conducting verification visits following suspensions, severely limits the effectiveness of the role. 

The problems of inadequate and inconsistent enforcement can be resolved by increasing the number and qualifications of the personnel assigned to humane handling and slaughter duties. No fewer than 140 full-time equivalent positions should 

be employed for purposes dedicated solely to inspections and enforcement related to 

the HMSA. In addition, the number of DVMS positions should be increased to a 

minimum of two per district. It is essential that the DVMS role, and humane 

slaughter enforcement overall, not be weakened as a consequence of the planned 

consolidation of FSIS districts. Enforcement records suggest that violations are reported with greater frequency in the presence of outside inspection personnel, such 

as DVMSs. Hiring additional DVMSs will provide for increased auditing and training to help uncover problems before they result in egregious humane handling incidents. 

Animal Care/Horse Protection Act Enforcement/Requested: $891,000 

We request that you support $891,000 for strengthened enforcement of the Horse 

Protection Act (HPA). Congress enacted the HPA in 1970 to make illegal the abusive practice of ‘‘soring,’’ by which unscrupulous trainers deliberately inflict pain on 

Tennessee Walking Horses’ hooves and legs to exaggerate their high-stepping gait 

and gain unfair competitive advantage at horse shows. They use such abominable 

practices as applying caustic chemicals and then using plastic wrap and tight bandages to ‘‘cook’’ those chemicals deep into the horse’s flesh for days; attaching heavy 

chains to slide up and down the horse’s sore legs; inserting metal screws or other 

foreign objects into the sensitive areas of the hooves; cutting the hooves down to expose the live tissue; and using salicylic acid or other painful substances to slough 

off scarred tissue in an attempt to disguise the sored areas. 

A report released in October 2010 by USDA’s Office of Inspector General documents significant problems with the industry self-monitoring system on which the 

seriously understaffed APHIS inspection program relies, recommends its abolition, 

and calls for funding to enable the agency to more adequately enforce the law. 

We greatly appreciate the appropriation last year of $696,000 for Horse Protection 

Act enforcement. Under its historic levels of funding, Animal Care inspectors were 

able to attend only about 10 percent of the more than 500 Tennessee Walking Horse 

shows held annually. Sustained support at the requested level of $891,000 will help 

ensure that this program doesn’t lose ground now that it is finally beginning to address the need for additional inspectors, training, security (due to threats of violence 

against inspectors), and advanced detection equipment (thermography and gas chromatography/mass spectrometry machines). 

Horse Slaughter 

In 2006, the U.S. House of Representatives and U.S. Senate overwhelmingly approved language that prevented tax dollars from being used to inspected horse 

slaughter facilities. This language remained in effect until it was removed in conference last year, despite having been approved by the full House Appropriations 

Committee. Allowing horse slaughter to resume will only bring this well-documented abuse to U.S. soil at great expense to the horses and the American public. 
191 

Given the financial troubles facing the Nation, we encourage the Committee to accept this bipartisan language while the full Congress moves to pass a ban on horse 

slaughter: 

‘‘None of the funds made available in this Act may be used to pay the salaries 

or expenses of personnel to— 

(1) inspect horses under section 3 of the Federal Meat Inspection Act (21 

U.S.C. 603); 

(2) inspect horses under section 903 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 1901 note; Public Law 104–127); 

(3) implement or enforce section 352.19 of title 9, Code of Federal Regulations; 

(4) promulgate or implement a fee-for-service-based Federal horsemeat inspection scheme.’’. 

PREPARED STATEMENT OF CATHOLIC RELIEF SERVICES

On behalf of Catholic Relief Services (CRS) I thank the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee for 

this opportunity to testify on fiscal year 2013 appropriations under your jurisdiction. 

CRS is the relief and development agency of the U.S. Catholic Church. The Catholic Church’s social teaching informs the work of CRS and our focus on the poorest 

people in the poorest parts of the world. The Church has broad and deep experience 

combating poverty and CRS has direct experience as an implementer of foreign assistance projects for almost 70 years, and is currently operating in 100 countries 

around the world. CRS programs address HIV and AIDS, health, education, civil society, food security, agriculture, emergency relief, WASH, and peace building. The 

Catholic Church in the United States also has abiding relationships and regular 

contact with the church in developing countries, where our worldwide community 

serves the needs of the poorest members of the human family. In fact, CRS counts 

institutions of the local Catholic Church as important local partners in many countries, and works through the church’s network abroad to reach significantly more 

people, and often in communities inaccessible to the local government or other actors. 

CRS acknowledges the difficult fiscal challenges that Congress faces, including 

fulfilling our obligations to future generations. We welcome thoughtful efforts to reduce our Nation’s deficit and debt. But even in this context, the most poor and vulnerable must have adequate access to our Nation’s limited resources. We therefore 

urge Congress to be fiscally responsible in morally responsible ways. We urge Congress and the Subcommittee in particular, not to make cuts to international povertyfocused humanitarian relief and development assistance. 

CRS has five specific requests related to the Agriculture appropriations that we 

ask you to consider: 

—CRS is advocating for a reauthorization of Title II of Public Law 480, the Food 

for Peace Program, of at least $2 billion per year before the Senate and House 

Agriculture Committees. We encourage the Agriculture Appropriations Subcommittee to meet our recommended authorized funding levels, but in light of 

the tight fiscal climate, we consider $1.5 billion the absolute minimum that 

should be appropriated to Title II in fiscal year 2013. 

—Within the amounts appropriated for Title II, CRS requests that the Agriculture 

Appropriations Subcommittee direct a minimum of $450 million to development 

programs, and that the existing waiver system safe guarding these funds remain unchanged and intact. 

—To make more efficient use of resources, CRS encourages the Agriculture Appropriations Subcommittee to direct additional Title II funding to cash resources, 

which we believe will help to address the inefficiencies of commodity monetization. 

—Similarly, to make more efficient use of resources, CRS encourages the Agriculture Appropriations Subcommittee to direct the use of Title II funds toward 

Local and Regional Procurement (LRP), which has proven to be an effective tool 

in the implementation of emergency and development programs under certain 

circumstances. 

—CRS requests that the Agriculture Appropriations Subcommittee appropriate 

$250 million for the McGovern-Dole Food for Education Program. 

For the duration of the testimony, I will explain our justifications for these requests. 
192 

1World Food Program USA, Emergency Response, at http://usa.wfp.org/advocate/emergency-response, last visited March 21, 2012. 2 United Nations Food and Agriculture Organization, The State of Food Insecurity in the World 

(2010), at 8, available at http://www.fao.org/docrep/013/i1683e/i1683e00.htm. 3Drought and Famine in the Horn of Africa, Testimony of Assistant Administrator, Bureau 

for Democracy, Conflict, and Humanitarian Assistance, U.S. Agency for International Development (USAID), Nancy E. Lindborg, Before the Committee on Foreign Relations Subcommittee 

on African Affairs. Washington, DC. August 3, 2011. 4 Nancy Lindborg, Assistant Administrator, Democracy, Conflict, and Humanitarian Assistance, USAID, Responding Early and Building Resilience in the Sahel, The Huffington Post, 

March 3, 2012, available at http://www.huffingtonpost.com/nancy-lindborg/responding-early-andbuillbl1316234.html. The article focuses on a CRS market garden program in Burkina Faso 

that was funded through 2009, and is still in operation under its own accord. 5 Nancy Lindborg, Assistant Administrator, Democracy, Conflict, and Humanitarian Assistance, USAID, Building Resilience in the Horn of Africa, USAID IMPACT blog, Dec. 19, 2011, 

available at http://blog.usaid.gov/2011/12/building-resilience-in-the-horn-of-africa/. 

Title II should be reauthorized for at least $2 billion per year, and CRS supports 

yearly appropriations that match this level, but at minimum $1.5 billion should to 

be appropriated to Title II in fiscal year 2013. 

It is estimated that around 100 million people will require emergency food assistance 1 and more than 925 million people will continue to suffer from chronic hunger 

worldwide.2 CRS estimates it would take more than $12 billion annually to effectively address these needs. While this global need exceeds the budgetary constraints 

of the U.S. Government, we believe it is our moral imperative to provide as much 

assistance as we can to the world’s poor. 

Title II has been, and continues to be, the U.S. Government’s premier mechanism 

to fight chronic hunger and meet the food needs of those in emergency situations. 

In 2011, Title II funding helped CRS respond to the devastating drought and famine 

in the Horn of Africa that affected more than 12 million people.3 CRS worked in 

consortium with other international and local organizations to provide life-saving 

food to more than 2 million Ethiopians, while also helping households protect productive assets, particularly livestock, which is an important source of food and 

serves as a savings mechanism that is available when absolutely necessary. 

Looking ahead to 2012, the Famine Early Warning System has predicted food 

shortfalls in the Sahel region of West Africa for the coming year. Much like the 

Horn of Africa, the Sahel has faced in recent years cyclical periods of food deficit 

due to increasingly inadequate rainfall and farmers’ unfamiliarity with cultivation 

practices tailored to such dry conditions. CRS’s current development programs in 

the region help the poor and vulnerable prepare for impending food crises through 

interventions like dry season market gardening projects.4 In areas where no development programs exist, Title II will likely be needed to fund any potential emergency response in the Sahel to meet impending acute food needs. Title II will also 

continue to be a necessary source of funding for other unexpected global emergencies stemming from natural disasters and human conflict. 

Within the amounts appropriated for Title II, a minimum of $450 million should 

be directed to development programs and the existing waiver system protecting 

these funds should be preserved. 

As mentioned above, more than 925 million people suffer from chronic hunger 

worldwide, yet there are insufficient resources to meet these needs. Title II development programming is the primary U.S. Government funded program to directly address the underlying causes of chronic hunger. These programs distribute U.S. food 

commodities and use complementary programming to address all aspects of food security, including agricultural production, health, and nutrition. 

Development programs are designed to promote self reliance, long-term sustainability, resilience in poor communities, which in the long-run can reduce their need 

for emergency assistance. For example, in the recent drought and famine in the 

Horn of Africa in 2011, CRS worked alongside other aid providers, the U.S. Agency 

for International Development, and the Government of Ethiopia, to implement a national Productive Safety Net Program (PSNP). The program, funded in large part 

by Title II development resources, distributed food and cash to the most vulnerable, 

giving communities the means to withstand the drought’s affects and making more 

costly emergency assistance unnecessary for 7 million Ethiopians.5

The United States response to chronic hunger through Title II continues to be disproportionately low compared to the need, and compared to resources provided for 

emergencies. Prior to the 2008 farm bill, 75 percent of Title II resources were allocated to development programs, but a weak waiver system allowed these resources 

to be diverted for emergencies. Ultimately, development program funding during 

this period was whittled down to only a small fraction of overall Title II funding. 
193 

6 7 U.S.C. § 1736f(e)(1). 

7This waiver requires following to occur before funds protected by the development safebox 

can be used for emergencies: (1) the President to determine that an extraordinary food emergency exists; (2) resources from the Bill Emerson Humanitarian Trust be exhausted; and (3) the 

President has to submit a request for additional appropriations to Congress equal to the reduction in the safe box and Emerson Trust. See, 7 U.S.C. § 1736f(e)(2). 8 Bonnard, P., et al. Report of the Food Aid and Food Security Assessment: A Review of the 

Title II Development Food Aid Program (2002). 9 7 U.S.C. 1721(e)(1). 

To address this siphoning of development funding, the 2008 farm bill authorized 

specific funding levels each fiscal year 6 and established a stronger waiver mechanism.7 Both of these additions have greatly aided development programming by ensuring a reliable funding source, and are generally referred to as the ‘‘safebox.’’ 

It is critical that development programs have steady and reliable funding because 

they require a multiyear approach to achieve a sustainable impact on chronic hunger. When funding levels shift dramatically from year to year, it is hard to ensure 

program objectives, like improved agricultural production or behavior changes 

around nutrition practices, are met. Funding for development programs should remain consistent with recent authorized and appropriated amounts. CRS therefore 

requests that the Subcommittee direct $450 million to development programs in fiscal year 2013, the same level authorized in fiscal year 2012. Furthermore, CRS requests that the Subcommittee protect the integrity of the safebox by maintaining 

the current waiver provision. We believe it is a common sense approach to ensuring 

development funding is not siphoned off for emergencies unless other emergency 

funding sources have been exhausted. 

To make more efficient use of resources, CRS encourages the Agriculture Appropriations Subcommittee to consider making more cash resources available within 

Title II funding. 

Improving food security requires more than just food. Essential complementary 

activities in development programs ensure that gains made by food distribution programs can be sustained.8 For example, some development programs provide new 

mothers with nutrition and sanitation education so that good health practices continue even after programs are completed. Programs also distribute food in exchange 

for community work. These programs contribute to long-term food security by building roads for better access to markets and by digging irrigation systems to grow 

crops. 

Complementary programs require cash funding to acquire basic inputs such as 

tools, seeds, and building materials, as well as to hire technical staff to train, mentor and support beneficiaries. However, Title II does not provide cash funding to 

cover these expenses. Rather, implementers like CRS engage in the practice of 

monetization, which is the sale of U.S. in-kind food donations abroad to generate 

proceeds that go to pay for program costs. Monetization is considered an inefficient 

mechanism to pay for development programs because the costs incurred to buy, 

ship, and sell U.S. commodities overseas are often greater than the proceeds raised. 

In the absence of cash resources, CRS values the use of monetization to support program activities, but to address the inefficiencies of monetization CRS believes more 

cash resources should be made available within Title II, which can be used to fund 

the necessary complementary activities that are vital in development programming. 

One option to increase cash resources is to increase funding available under the 

existing 202e provision of Title II, and broaden the allowable uses of this funding 

source. Under the current authorization of the farm bill, 202e permits up to 13 percent of Title II funding to be provided in cash and used for a discrete set of purposes 

related to program implementation.9 However, the limitations placed on the use of 

202e hamstring the ability of this mechanism to provide necessary flexibility in program budgets. The Committee could address this by expressly directing additional 

Title II funding to be used for 202e, and allowing 202e to cover any type of program 

cost. If the Agriculture Appropriations Subcommittee pursued this course, CRS recommends that appropriations directed to 202e should be to up to 25 percent of overall Title II funding. Further, other options for providing additional cash resources 

do exist, and CRS would be happy to discuss these with the Subcommittee. 

To make more efficient use of resources, CRS encourages the Agriculture Appropriations Subcommittee to consider allowing the use of Local and Regional Procurement (LRP) as a tool to implement emergency and development programs under 

Title II. 
194 

10 Currently USAID provides a limited level of assistance for local and regional purchase in 

emergencies through the Emergency Food Security Program funded in the International Disaster Assistance (IDA) Account. Unlike the LRP Pilot Program, IDA funded LRP cannot be used 

for non-emergency purpose. 11 Erin C. Lentz, Christopher B. Barrett, and Miguel I. Go ́mez, ‘‘The Impacts of Local and Regional Procurement of U.S. Food Aid: Learning Alliance Synthesis Report, ‘‘Final Report: A 

Multidimensional Analysis of Local and Regional Procurement of U.S. Food Aid,’’ January 2012, 

available at http://dyson.cornell.edu/facultylsites/cbb2/papers/ 

LRP%20Ch%201%20Lentz%20et%20al%2011Jan2012Update.pdf. Formally, this collaboration 

was known as the Local and Regional Procurement (LRP) Learning Alliance, which began as 

a collaboration among organizations implementing LRP programs (Catholic Relief Services, 

Land O’Lakes, Mercy Corps, World Vision) and Cornell University, to monitor and analyze the 

market impacts of LRP. Since the closing of the LRP Pilot Program, the Learning Alliance continues to work on knowledge sharing to improve the efficacy of LRP as a whole, and has welcomed other LRP implementers, including Fabretto Children’s Foundation, International Relief 

and Development, ACDI/VOCA, CARE and the United Methodist Committee on Relief. 12 At present, food assistance programs authorized through the farm bill allow implementing 

partners to purchase enriched, nutritious products only if they are produced in the United 

States. By supporting the development and production of locally procured foods, including those 

used for therapeutic and targeted feeding programs, LRP can address this gap. 

The 2008 farm bill authorized a small 5-year pilot program for Local and Regional 

Procurement (LRP) of food assistance.10 Recent analysis conducted through Cornell 

University and implementing organizations demonstrates that program activities 

undertaken as part of the pilot can be cost-efficient, effective in saving lives during 

emergencies, and enables communities to improve long-term food security through 

development activities.11 More specifically, the pilot showed that LRP can save 

money, varying by commodity, with the most cost savings at 53 percent for cereals 

when compared to U.S. commodities. LRP can also save time, reducing the transportation costs relative to U.S. in-kind shipments by an average of 13.8 weeks. Further, 

several development LRP interventions funded through the pilot program showed 

that LRP has multiple potential benefits, including linking smallholder food producers to markets, building local capacity for food processing, milling and fortification, and expanding availability and access to highly nutritious foods.12

CRS’s LRP pilot program in Mali successfully integrated into an existing school 

feeding initiative, and realized cost savings of 46 percent for peas and 62 percent 

for grains. In our program, LRP was also timely by having food available at the beginning of the school year. The program also had noteworthy developmental impacts; for instance, through farmer field trainings, the program improved local production and storage of harvests, and by purchasing locally sourced foods the program helped develop a source for locally led school feeding programs in the future. 

The evidence to date demonstrates that LRP can have significant benefits, though 

it also shows that LRP isn’t necessarily appropriate in all situations. The context 

of any food crisis should frame the decision of which food assistance tool should be 

used. We simply encourage the Agriculture Appropriations Subcommittee to allow 

LRP programming to be used as a tool within Title II, so that LRP can, where appropriate, achieve cost savings in some Title II programs. 

CRS requests that the Agriculture Appropriations Subcommittee appropriate at 

minimum $250 million for the McGovern-Dole Food for Education Program. 

The McGovern Dole Food for Education (FFE) program supports education, child 

development, and food security initiatives for some of the world’s poorest children 

through donations of U.S. food commodities, as well as financial and technical assistance for school feeding and nutrition projects. FFE has successfully increased 

school enrollment by feeding school children. CRS recently implemented a FFE program in Mali, serving 45,000 individuals over 3 years. In this program more than 

5 million meals, as well as vitamins and medications, were distributed among 120 

schools. Our program increased school enrollment in targeted communities for boys 

from 26 percent to 32 percent and for girls from 39 percent to 55 percent. As education and nutrition are inextricably linked to a promising future for all children, 

CRS requests $250 million be appropriated for the FFE program. By targeting the 

most poor and vulnerable early in their lives, we hope to curb their need for U.S. 

assistance in the future. 

Thank you for your many years of partnership with CRS and for this opportunity 

to reiterate our values and report back to you on our experiences. 

PREPARED STATEMENT OF THE COLORADO RIVER BASIN SALINITY CONTROL FORUM

Waters from the Colorado River are used by approximately 35 million people for 

municipal and industrial purposes and used to irrigate approximately 4 million 
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acres in the United States. Natural and man-induced salt loading to the Colorado 

River creates environmental and economic damages. The U.S. Bureau of Reclamation (BOR) has estimated the current quantifiable damages at about $300 million 

per year. Congress authorized the Colorado River Basin Salinity Control Program 

(Program) in 1974 to offset increased damages caused by continued development 

and use of the waters of the Colorado River. Modeling by BOR indicates that the 

quantifiable damages would rise to more than $500 million by the year 2030 without continuation of the Program. The USDA portion of the Program, as authorized 

by Congress and funded and administered under the Environmental Quality Incentives Program (EQIP), is an essential part of the overall effort. A funding level at 

approximately $18 million annually is required to prevent further degradation of the 

quality of the Colorado River and increased downstream economic damages. 

Congress concluded that the Colorado River Basin Salinity Control Program 

should be implemented in the most cost-effective way. The Program is funded under 

EQIP, the U.S. Bureau of Reclamation’s Basinwide Program, and a cost share for 

both of these programs provided by the Basin States. Realizing that agricultural onfarm strategies were some of the most cost-effective strategies, 

Congress authorized a program for the United States Department of Agriculture 

(USDA) through amendment of the Colorado River Basin Salinity Control Act (Act) 

in 1984. With the enactment of the Federal Agriculture Improvement and Reform 

Act of 1996 (FAIRA), Congress directed that the Program should continue to be implemented as part of the newly created Environmental Quality Incentives Program. 

Since the enactment of the Farm Security and Rural Investment Act (FSRIA) in 

2002, there have been, for the first time in a number of years, opportunities to adequately fund the Program within EQIP. In 2008, Congress passed the Food, Conservation and Energy Act (FCEA). The FCEA addressed the cost sharing required 

from the Basin Funds. In so doing, the FCEA named the cost sharing requirement 

as the Basin States Program (BSP). The BSP will provide 30 percent of the total 

amount that will be spent each year by the combined EQIP and BSP effort. 

The Program, as set forth in the act, is to benefit Lower Basin water users hundreds of miles downstream from salt sources in the Upper Basin as the salinity of 

Colorado River water increases as the water flows downstream. There are very significant economic damages caused downstream by high salt levels in the water 

source. There are also local benefits from the Program in the form of soil and environmental benefits, improved water efficiencies and lower fertilizer and labor costs. 

Local producers submit cost-effective proposals to the State Conservationists in 

Utah, Wyoming and Colorado and offer to cost share in the acquisition of new irrigation equipment. It is the act that provides that the seven Colorado River Basin 

States will also cost share with the appropriated funds for this effort. This has 

brought together a remarkable partnership. 

After longstanding urgings from the States and directives from Congress, USDA 

has concluded that this Program is different than small watershed enhancement efforts common to EQIP. In the case of the Colorado River salinity control effort, the 

watershed to be considered stretches more than 1,400 miles from the River’s headwater in the Rocky Mountains to the River’s terminus in the Gulf of California in 

Mexico and receives water from numerous tributaries. The USDA has determined 

that this effort should receive a specific funding designation and has appointed a 

coordinator for this multi-state effort. 

In recent fiscal years, the Natural Resources Conservation Service (NRCS) has directed that about $18 million of EQIP funds be used for the Program. The Colorado 

River Basin Salinity Control Forum (Forum) appreciates the efforts of NRCS leadership and the support of this Subcommittee. Colorado River water quality standards 

have been prepared by the Forum, adopted by the States, and approved by the 

United States Environmental Protection Agency (EPA). The Forum has taken the 

position that funding for the EQIP portion of the Program should be consistent with 

the 3-year funding plan submitted by the three NRCS State Conservationists for 

Colorado, Utah and Wyoming. This amount for 2013 is $18 million and includes 

both farm and technical assistance. Over the last few fiscal years, funding has 

reached the needed level. State and local cost-sharing is triggered by the Federal 

appropriation. In fiscal year 2013, it is anticipated that the States will cost share 

with about $7.7 million and local agriculture producers will add about $5.5 million. 

Hence, it is anticipated that in fiscal year 2013 the State and local contributions 

will be about 42 percent of the total cost. The Basin States have cost sharing dollars 

available to participate in funding on-farm salinity control efforts. The agricultural 

producers in the Upper Basin are waiting for their applications to be considered so 

that they might improve their irrigation equipment and also cost share in the Program, and specifically for the USDA portion of the effort which was added by 
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amendments to the act in 1984. It has been determined that the agricultural efforts 

are some of the most cost-effective opportunities. 

Since congressional mandates of more than three decades ago, much has been 

learned about the impact of salts in the Colorado River system. BOR has conducted 

studies on the economic impact of these salts. BOR recognizes that the damages to 

United States water users alone are hundreds of millions of dollars per year. 

The Forum is composed of gubernatorial appointees from Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming. The Forum is charged with reviewing the Colorado River’s water quality standards every 3 years. In so doing, it 

adopts a Plan of Implementation consistent with these standards. The level of appropriation requested in this testimony is in keeping with the adopted Plan of Implementation. If adequate funds are not appropriated, significant damages from the 

higher salt concentrations in the water will be more widespread in the United 

States and Mexico. 

Concentrations of salt in the River cause approximately $300 million in quantified 

damages and significantly more in unquantified damages in the United States and 

result in poor water quality for United States users. Damages occur from: 

—a reduction in the yield of salt sensitive crops and increased water use for leaching in the agricultural sector, 

—a reduction in the useful life of galvanized water pipe systems, water heaters, 

faucets, garbage disposals, clothes washers, and dishwashers, and increased use 

of bottled water and water softeners in the household sector, 

—an increase in the use of water for cooling and the cost of water softening, and 

a decrease in equipment service life in the commercial sector, 

—an increase in the use of water and the cost of water treatment, and an increase 

in sewer fees in the industrial sector, 

—a decrease in the life of treatment facilities and pipelines in the utility sector, 

—difficulty in meeting wastewater discharge requirements to comply with National Pollutant Discharge Elimination System permit terms and conditions, 

and an increase in desalination and brine disposal costs due to accumulation 

of salts in groundwater basins, and 

—increased use of imported water for leaching and cost of desalination and brine 

disposal for recycled water. 

Over the years, NRCS personnel have developed a great working relationship 

with farmers within the Basin. Maintaining salinity control achieved by implementation of past practices requires continuing education and technical assistance from 

NRCS personnel. Additionally, technical assistance is required for planning and design of future projects. Last, the continued funding for the monitoring and evaluation of existing projects is essential to maintaining the salinity reduction already 

achieved. 

In summary, implementation of salinity control practices through EQIP has proven to be a very cost effective method of controlling the salinity of the Colorado River 

and is an essential component to the overall Colorado River Basin Salinity Control 

Program. Continuation of EQIP with adequate funding levels will prevent the water 

quality of the River from further degradation and significantly increased economic 

damages to municipal, industrial and irrigation users. 

PREPARED STATEMENT OF THE COLORADO RIVER BOARD OF CALIFORNIA

This testimony is in support of funding for the U.S. Department of Agriculture 

(USDA) and its on-farm Colorado River Basin Salinity Control Program (Program) 

for fiscal year 2013. This program has been carried out through the Colorado River 

Basin Salinity Control Act (Public Law 93–320) (Act), since it was enacted by Congress in 1974. Further, with the enactment of the Federal Agricultural Improvement 

and Reform Act (FAIRA) in 1996 (Public Law 104–127), Congress directed that the 

Program should continue to be implemented as one of the components of the Environmental Quality Incentives Program (EQIP). Finally, Congress passed the Food, 

Conservation, and Energy Act (FCEA) in 2008, that addressed the cost-sharing required from the Basin Funds, and redesignated the cost-sharing requirement as the 

Basin States Program (BSP). Currently, the BSP provides approximately 30 percent 

of the total amount that will be spent each year by the combined EQIP and BSP 

efforts. 

The Salinity Control Program benefits both the Upper Basin water users through 

more efficient water management and the Lower Basin water users, through reduced salinity concentration of Colorado River water. For example, California’s Colorado River water users continue to suffer economic damages in the hundreds of million of dollars per year due to the current salinity of the Colorado River. 
197 

The Colorado River Board of California (Colorado River Board) is the State agency 

charged with protecting California’s interests and rights in the water and power resources of the Colorado River system. In this capacity, California participates along 

with the other six Colorado River Basin States through the Colorado River Basin 

Salinity Control Forum (Forum), the interstate organization responsible for coordinating the Basin States’ salinity control efforts. In close cooperation with the U.S. 

Environmental Protection Agency (EPA) and pursuant to requirements of the Clean 

Water Act (Public Law 92–500), the Forum is charged with reviewing the Colorado 

River’s water quality standards every 3 years. The Forum adopts a Plan of Implementation consistent with these water quality standards. The level of appropriation 

being supported in this testimony is consistent with the Forum’s 2011 Plan of Implementation. If adequate funds are not appropriated, significant damages associated with increasing salinity concentrations of Colorado River water will become 

more widespread in the United States and Mexico. 

Currently, the salinity concentration of Colorado River water causes about $300 

million in quantifiable damages in the United States annually. Economic and hydrologic modeling by U.S. Bureau of Reclamation (Reclamation) indicates that the 

quantifiable damages could rise to more than $500 million by the year 2030 without 

the continuation of the Salinity Control Program as identified in the 2011 Plan of 

Implementation. For example, salinity damages occur from: 

—A reduction in the yield of salt-sensitive crops and increased water use for 

leaching in the agricultural sector; 

—A reduction in the useful life of galvanized water pipe systems, water heaters, 

faucets, garbage disposals, clothes washers, and dishwashers, and increased use 

of bottled water and water softeners in the household sector; 

—An increase in the use of water for cooling, and the cost of water softening, and 

a decrease in equipment service life in the commercial sector; 

—An increase in the use of water and the cost of water treatment, and an increase in sewer fees in the industrial sector; 

—A decrease in the life of treatment facilities and pipelines in the utility sector; 

—Difficulty in meeting wastewater discharge requirements to comply with National Pollutant Discharge Elimination System permit terms and conditions, 

and an increase in desalination and brine disposal costs due to accumulation 

of salts in groundwater basins, and fewer opportunities for recycling due to 

groundwater quality deterioration; and 

—Increased use of imported water for leaching and the cost of desalination and 

brine disposal for recycled water. 

In recent fiscal years, the Natural Resources Conservation Service (NRCS) has directed that about $18 million of EQIP funds be used for the Salinity Control Program. The Colorado River Board respectfully urges the Subcommittee to support 

funding for the Colorado River Basin Salinity Control Program for fiscal year–2013 

at least at this level. 

The Forum has taken the position that funding for the Program should be consistent with the 3-year funding plan submitted by the three NRCS State Conservationists for Colorado, Utah and Wyoming. The NRCS funding plan for 2013 is $18 

million and includes both farm and technical assistance program elements. It should 

also be pointed out that State and local cost-sharing is triggered by Federal appropriations. In fiscal year 2013, it is anticipated that the States will cost-share with 

about $7.7 million and that local agriculture producers will add another $5.5 million. Consequently, it is anticipated that the fiscal year 2013 State and local contributions are expected to be approximately 42 percent of the total Program costs. 

In conclusion, the Colorado River Board of California recognizes that the Federal 

Government has made significant commitments to the seven Colorado River Basin 

States with regard to the delivery of Colorado River water. In order for those commitments to continue to be honored, it is essential that Congress continue to provide 

funds to the USDA to allow it to provide needed technical support to agricultural 

producers for addressing salinity control activities in the Colorado River Basin. Over 

the past 28 years, the Colorado River Basin Salinity Control program has proven 

to be a very cost-effective and collaborative approach to help mitigate the impacts 

of the salinity of Colorado River water. Continued Federal funding of the USDA elements of this important Basin-wide program is essential to maintaining this effort. 

PREPARED STATEMENT OF COLORADO STATE UNIVERSITY

Mister Chairman, Ranking Member and Members of the subcommittee, thank you 

for the opportunity to submit testimony for the record. I am writing to share my 

concerns regarding a recently recognized fungal canker disease that poses an enor-
198 

mous economic and ecological risk to our Nation’s walnut resources. Over the past 

decade, thousand cankers disease (TCD) has caused the death of thousands of black 

walnut trees in nine western States (Arizona, California, Colorado, Idaho, Oregon, 

New Mexico, Tennessee, Utah, and Washington) and recently has been discovered 

in Tennessee, Virginia and Pennsylvania. The negative economic impacts of TCD 

are felt by our Nation’s timber, nut and nursery producers, furniture manufacturers, 

and private landowners. While States are attempting to stop the spread of TCD 

through surveys and quarantines, greater Federal oversight and funding are needed. I request dedicated funding be allocated to the U.S. Department of Agriculture’s 

Plant Protection and Early Detection and Rapid Response programs for fiscal year 

2013 for the study and management of TCD. 

What is TCD? 

TCD results from the combined activity of a fungus (Geosmithia morbida) and the 

walnut twig beetle (Pityophthorus juglandis). As the beetle moves through a tree’s 

twigs, branches and main stem it creates galleries beneath the bark of the branches 

and introduces the fungal spores. Numerous cankers develop and disrupt the flow 

of nutrients throughout the tree. Over time the tree is unable to store and move 

nutrients and starves. The most likely pathway for transmission of TCD is through 

the movement of raw wood (logs, firewood, stumps, burls and wood packaging materials) with bark attached. It is not known whether transmission to the eastern 

United States occurred through natural dispersal or by human transport of twig 

beetle infested walnut products. 

Need for Greater Federal Funding and Oversight 

At the Federal level, pests and diseases similar to TCD are addressed by the 

USDA’s Animal and Plant Health Inspection Service (APHIS) and the U.S. Forest 

Service (USFS). Within APHIS, the Plant Protection and Quarantine (PPQ) program 

is primarily responsible and has the regulatory authority for all pests coming to the 

Nation’s borders and the interstate movement of regulated pests. The USFS oversees the Early Detection and Rapid Response (EDRR) program, which detects new 

invasive species infestations and support the infrastructure necessary to rapidly 

contain or eradicate these infestations. 

To date, USDA has provided some funding and technical assistance for TCD, 

mainly through fiscal year 2010 farm bill funding for survey, detection and mitigation methods. However, it has not identified TCD as an actionable pest as was done 

with the emerald ash borer and Asian long horned beetle and it has determined that 

Federal regulatory oversight of TCD would be challenging due to the interstate 

movement of products, poor detection capability and the widespread distribution of 

the disease. I believe that it is for these reasons that greater Federal oversight and 

funding is needed. 

Funding Needs 

Funding for basic research to study the life history, biology and behavior of the 

walnut twig beetle and the fungus is needed and would inform and improve management of the disease. Examples of priority research needs include developing an 

effective lure for the walnut twig beetle, the development of data and maps that 

would inform where the pest is most likely to migrate, and evaluating methodologies 

on survival of the insect and the pathogen after debarking and kiln drying or other 

treatments. 

I thank the committee for this opportunity to provide testimony on this important 

subject. Please do not hesitate to contact me/us if you should require additional information. 

PREPARED STATEMENT OF COPPERHEAD HILL RANCH—JOHN A. AND KAREN M. 

BUCHANAN, OWNERS

Mister Chairman, Ranking Member and Members of the subcommittee, thank you 

for the opportunity to submit testimony for the record. I am writing to share my 

concerns regarding a recently recognized Thousand Cankers Disease (TCD) that 

poses an enormous economic and ecological risk to our Nation’s black walnut resources. Over the past decade, TCD has caused the death of millions of black walnut 

trees in nine western States (Arizona, California, Colorado, Idaho, Oregon, New 

Mexico, Nevada, Utah, and Washington) and recently has been discovered in the native walnut range (Tennessee, Virginia and Pennsylvania). The USDA–APHIS has 

estimated the standing value of walnut timber as being $539 billion. This does not 

include potential loss of: Jobs related to logging, transportation, and domestic milling; derivatives of the domestic milling industry to make veneer and lumber for fur-
199 

niture, cabinetry, paneling, flooring, and gun stocks; export market accounts for 

about 60 percent of the harvested logs; and nuts are shelled into nutmeats and the 

shells are processed for many industrial uses. 

The negative economic impacts of TCD will be felt by private landowners with immature walnut timber and by home owners with millions of walnut trees in residential areas of the Midwest and Eastern States. It will be any ugly site and very expensive to safely remove all the walnut trees as they succumb to TCD over the next 

couple of decades if this disease is not contained, suppressed, and locally eradicated. 

Research efforts to date have been limited to monitoring, ecological studies of the 

walnut twig beetle, epidemiology of the fungal pathogen, and development of phytosanitation treatment of walnut logs harvested in quarantined areas. Insecticide and 

fungicide application is not feasible or practical as a means of controlling the spread 

of TCD. Development of biological insect control of the walnut twig beetle is expected to be the most effective and feasible technique in stopping the advancement 

of TCD through the native range of black walnut. 

While States are attempting to stop the spread of TCD through surveys and quarantines, greater Federal assistance and funding are needed. I request dedicated 

funding be allocated to the USDA–ARS for leadership in the development of biological insect control techniques of the walnut twig beetle and to the USDA–FS for continued efforts in monitoring for TCD for fiscal year 2013. 

What is TCD? 

TCD is a recently recognized disease in which a tiny walnut twig beetle 

(Pityophthorus juglandis) spreads a fungal organism (Geosmithia morbida) that 

causes cankers under the bark which prevents nutrient flow to the foliage leading 

to dieback of branches and ultimately death to the tree. While the walnut twig beetle advances only a mile or two per year, humans are the vector that spread TCD 

great distances within days by hauling walnut slabs with fresh bark attached that 

harbor the tiny beetles and fungal spores. Such shipments are believed to be the 

reason TCD moved into the native walnut range from the western States. Movement of firewood, logs, stumps, and burls with fresh bark attached can spread the 

disease great distances. 

Need for Greater Federal Funding and Specific Directives 

The USDA–APHIS considers both the walnut twig beetle and the fungal pathogen 

to be indigenous to the USA (historical evidence shows them to reside on a different 

walnut species in Arizona and New Mexico). Since neither is considered exotic to 

the USA, APHIS is not productively serving any role in combating TCD. 

Federal funding needs to be directed to the USDA–ARS to lead research and development of techniques that will contain, suppress, or potentially locally eradicate 

the walnut twig beetle. Additional funding needs to be directed to the USDA–FS for 

continued effort in monitoring and development of phyto-sanitization treatment of 

walnut logs harvested in quarantined areas. 

I thank the committee for this opportunity to provide testimony on this important 

subject. Please do not hesitate to contact me if you should require additional information. 

PREPARED STATEMENT OF THE CYSTIC FIBROSIS FOUNDATION

On behalf of the Cystic Fibrosis Foundation and the approximately 30,000 people 

with cystic fibrosis (CF) in the United States, we are pleased to submit the following 

testimony to the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies requesting sufficient 

funding for the Food and Drug Administration in fiscal year 2013. This testimony 

urges the Committee to provide the Food and Drug Administration the funding it 

needs to quickly and efficiently review treatments for CF and other rare diseases 

and encourages the FDA to reach out on a more systematic basis to outside experts 

early in the drug development process. Additionally, the CF Foundation urges the 

Committee to support collaborative efforts by the FDA and the National Institutes 

of Health, such as the Regulatory Science Initiative and the FDA–NIH Joint Leadership Council. Collaboration between the NIH and FDA has the potential to help 

move innovative new drugs more quickly through the development process and into 

the hands of patients. 

In particular, the Foundation wishes to commend the speed with which the FDA 

approved KalydecoTM, a breakthrough treatment for cystic fibrosis that is the first 

to address the underlying genetic cause of the disease for 1,200 people with CF who 

carry a specific genetic mutation. The agency reviewed and approved Kalydeco’s 

New Drug Application in only 3 months—one of the fastest approvals of any drug 
200 

in the history of the agency. The speed with which this review was conducted is a 

testament to the FDA’s commitment to collaboration with Vertex Pharmaceuticals, 

Kalydeco’s developer, and the Cystic Fibrosis Foundation, as well as its commitment 

to the patients who are already benefiting from the drug. The science behind 

Kalydeco has opened exciting new doors to research and development that may 

eventually lead to a cure for all people living with CF. 

About Cystic Fibrosis 

Cystic fibrosis is a life-threatening genetic disease for which there is no cure. People with CF have two copies of a defective CFTR gene, which causes the body to 

produce abnormally thick, sticky mucus that clogs the lungs and results life-threatening lung infections. This mucus also obstructs the pancreas, preventing pancreatic 

enzymes from assisting in the breakdown of food and the absorption of nutrients. 

The mission of the Cystic Fibrosis Foundation is to find a cure for cystic fibrosis 

and improve the quality of life for people living with the disease. This is accomplished by funding life-saving research and working to provide access to quality care 

and effective therapies for people with CF. Through the Foundation’s efforts, the life 

expectancy of a child with CF has doubled in the last 30 years. Although real 

progress toward a cure has been made, the lives of young people with CF are still 

cut far too short. 

The promise for people with CF lies in research. The CF Foundation has raised 

and invested hundreds of millions of dollars in private money to help develop CF 

drugs and therapies and nearly every CF drug available today was made possible 

because of the Foundation’s support. The Foundation accredits a nationwide network of over 110 CF care centers that has been widely recognized as a national 

model for specialized treatment of a disease. 

Sustaining Funding for Rare Disease Drug Review at the FDA 

Funding for Rare and Orphan Disease Drug Review 

In order to encourage swift review of drugs for CF and other rare diseases, we 

urge the Committee to recommend sufficient funding for the Food and Drug Administration, particularly the Center for Drug Evaluation and Research (CDER)’s Office 

of New Drugs, in fiscal year 2013. 

To be effective, the FDA needs an adequate number of reviewers with the appropriate skills and expertise to evaluate therapies for rare diseases like cystic fibrosis. 

Additional support for the FDA through increased funding not only ensures that the 

Nation has a safe and effective supply of drugs and devices, but also that the agency 

can give the necessary attention to reviewing therapies that treat small populations 

and serve specific unmet medical needs. 

It is more critical than ever that Congress significantly increase funding for the 

Center for Drug Evaluation and Research (CDER) at the FDA and for the agency 

as a whole in fiscal year 2013 so that it can meet its statutory obligations in a timely manner. 

Accelerating the Rare Disease Drug Review Process at the FDA 

The Cystic Fibrosis Foundation applauds the FDA and Associate Director for Rare 

Diseases Dr. Anne Pariser in particular for their attention to rare disease drugs and 

sensitivity to the unique challenges posed by the evaluation of these treatments. 

As we reap the benefits of the mapping of the human genome, treatments like 

Kalydeco are being developed that target smaller and smaller populations. This aspect of personalized medicine holds the promise to treat or cure rare diseases and 

subsets of more common diseases that plague millions of Americans. 

However, as the scientific landscape changes, it is important that the FDA has 

access to the expertise it needs to swiftly review innovative new treatments. FDA 

review officials have taken steps to improve access to scientific expertise during the 

review of therapies that treat rare diseases, and FDA leaders and review staff have 

been willing to engage in constructive dialogue to address the challenges of rare disease review. The agency has taken part in productive conversations with researchers and patients at the CF Foundation, including with many of the world’s foremost 

experts on cystic fibrosis, on the development and review of potential therapies to 

treat cystic fibrosis and on topics separate from specific drug review, such as improving tools for Patient Reported Outcomes (PROs). In particular, the collaboration 

showcased during the review of Kalydeco is an excellent example of how the FDA, 

a drug sponsor, patients and external experts can work to effectively evaluate new 

drugs and accelerate the approval process. 

However, in some cases the opportunity for public comment is not available if the 

product in question is not the subject of an advisory committee. In all cases, this 

public comment period occurs very late in the review process. While FDA review di-
201 

visions do conduct some consultations with external experts separate from the advisory committee process, the complexity and diversity of applications for rare disease 

therapies suggest that the agency would benefit from more regular consultation 

with extramural experts early in the review process. The Cystic Fibrosis Foundation 

asks that the Committee encourage the FDA to reach out on a more systematic 

basis to outside experts early in the drug development process. 

One such strategy the House of Representatives is considering is the proposed Expanding and Promoting Expertise in Review of Rare Treatments (EXPERRT) Act, 

H.R. 4156. CFF strongly supports the EXPERRT Act, which establishes a program 

to facilitate FDA outreach to external experts earlier and throughout the drug review process on issues such as unmet medical need, genetically targeted treatments, 

disease severity, clinical trial design and patient demographics. 

Additionally, the CF Foundation urges the Committee to support collaborative efforts by the Food and Drug Administration and the National Institutes of Health, 

such as the Regulatory Science Initiative and the FDA–NIH Joint Leadership Council. Collaboration between the NIH and FDA has the potential to help move innovative new drugs more quickly through the development process and into the hands 

of patients by ensuring that the FDA has the resources, strategies, and tools it 

needs to efficiently review and regulate drugs in this ever changing scientific landscape. As treatments like Kalydeco are being developed to target specific genetic 

mutations and smaller and smaller populations, it is important that the FDA has 

the expertise it needs to quickly move these drugs through the review process. 

The Cystic Fibrosis Foundation’s unique and successful drug development model 

for creating treatments for a rare disease has helped create a robust pipeline of potential therapies to fight cystic fibrosis. The Food and Drug Administration has 

played a critical role in this process, working with the Foundation as they review 

treatments and move them into the hands of patients. Encouraged by our successes, 

we believe the experience of the CF Foundation in clinical research can serve as a 

model of drug discovery and development for research on other orphan diseases and 

we stand ready to work with the FDA and congressional leaders. On behalf of the 

Cystic Fibrosis Foundation, we thank the Committee for its consideration. 

PREPARED STATEMENT OF THE FARMERS MARKET COALITION

The Farmers Market Coalition (FMC) represents more than 2,700 farmers markets across the United States, as well as the more than 30,000 farmers that depend 

upon them. We seek to build viable agricultural economies by expanding farmers’ 

marketing choices while expanding consumers’ opportunities to purchase fresh, locally grown foods. Herein, we urge you to fully fund both the Farmers Market Promotion Program and the WIC Farmers Market Nutrition Program. 

Farmers markets have grown in response to consumer demand in recent years, 

emerging as cornerstones in more than 7,100 communities across the United States. 

Markets are extending their seasons into winter months, too, offering farmers income throughout the year. Uniquely, they have the potential to bridge urban and 

rural divides, strengthening the fabric of our country while addressing the nutritional needs of Americans at every income level. The percentage of SNAP dollars 

redeemed at farmers markets, for example, is increasing as more markets become 

EBT-equipped and program participants choose to use their benefits there. For this 

reason, FNS and AMS programs that facilitate the sector’s growth are of critical importance not just to farmers, but to families, and community economies. FMC urges 

the following: 

Reauthorize and increase funding for the Farmers Market Promotion Program.— 

The ripple effects of the FMPP program are impressive, providing small infusions 

of funding to communities and groups of farmers in all 50 States since 2006. These 

awardees grow capacity, increase farmer income, help new entrepreneurs get started in feeding their local communities, and build local partnerships for long-term viability. However, the program is highly competitive, funding only 444 of the Nation’s 

7,100 farmers markets since 2006. With rural jobs on the line, and the nascent local 

food sector in need of training, capacity building, and technical assistance, now is 

not the time to turn our backs on a program with such far-reaching positive impacts, as illustrated in recent Senate Agriculture Committee briefings and testimonies. 

We urge you to reauthorize funding for the Farmers Market Promotion Program, 

and increase funding to $20 million annually so that it can fully serve farmers markets and the many farmers choosing to begin marketing to consumers in their local 

communities. 
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Restore full funding to the WIC Farmers Market Nutrition Program (WIC 

FMNP).—In 2010, WIC FMNP served more than 2.1 million WIC families, bringing more than $22 million in income directly to more than 18,000 small and mid-scale 

produce farmers. Proposed cuts of $3.5 million to this important program threaten 

access to fresh local produce for WIC eligible clients in 45 State agencies, Territories 

and Indian Tribal Organizations. For example, in Wisconsin alone, WIC FMNP provided fresh fruits and vegetables to approximately 100,000 women and their children in 2011, simultaneously providing $864,037 in additional income to 1,552 participating Wisconsin produce farmers. Proposed cuts to this effective win-win program would mean thousand fewer families in need having access to nutritious, locally grown produce, and many hardworking farmers unable to serve them. 

New York State, which serves almost 400,000 WIC mothers and their children, 

calculated the devastating impact of these proposed WIC FMNP cuts on their agricultural sector. They estimate that small family farmers in the State would lose approximately $1.1 million in revenues. 

We urge you to restore WIC FMNP funding to $20 million for fiscal year 2013. 

Thank you for your consideration of this testimony, and, on behalf of the Farmers 

Market Coalition Board of Directors and members, thank you for all you do on a 

daily basis to support America’s family farmers. 

PREPARED STATEMENT OF FLORIDA HOME PARTNERSHIP, INC. 

On behalf of Florida Home Partnership, I wish to thank you for accepting this 

testimony on Rural Housing Funding for fiscal year 2013. Florida Home Partnership, Inc. (FHP) is a nonprofit Community Housing Development Organization 

(CHDO). Our mission is to provide low and moderate income families affordable, 

quality-built, energy efficient homes in communities that offer long-term value and 

comfort. I am urging the Appropriations Subcommittee to fund the following USDA 

Rural Housing Programs at the higher of fiscal year 2012 levels or the President’s 

fiscal year 2013 budget request: (1) $900 million for Section 502 Family Direct 

Homeownership Loans, (2) $30 million for Section 523 Self-Help Housing Program, 

and (3) $13 million for the Rural Community Development Initiative. The Section 

502 Loans provide affordable mortgage opportunities for low-income rural Americans, while the Section 523 funds allow Self-Help Housing grantees across Rural 

America provide technical assistance to Rural Americans engaged in building their 

own homes through USDA’s Mutual Self-Help Housing Program. 

FHP administers the USDA Mutual Self-help Program in the rural areas of 

Hillsborough and Pasco Counties in Florida. The impact of this service asserts a 

positive result in four areas: Affordable quality housing for low- to moderate-income 

families; Green Built and Energy Star certified homes conserve precious resources; 

safe and affordable housing instills higher goals for the future of youth and teens; 

and the Mutual Self-help Program sustains and stimulates the local economic environment. 

With the support of the USDA Mutual Self-Help Program, Florida Home Partnership guides groups of 6 to 10, low- to moderate-income families to work together to 

help build each other’s homes. In the past 15 years, over 500 homes and 5 communities have been built. Leveraging dollars from the USDA Mutual Self-Help Program, the State of Florida’s Home Ownership Pool and down payment assistance 

through Hillsborough and Pasco Counties, Federal funds enable FHP to efficiently 

operate a very complex yet effective program. FHP has successfully administered 

over $65 million to implement this USDA affordable housing program. 

Family members of the groups share the common goal of homeownership and 

commit themselves to share in the work that will make that goal a reality. When 

all homes in the construction group are completed, all homeowners are authorized 

to move into their new homes on the same day, creating an instant community. 

Families and individuals contribute a minimum of 600 hours of ‘‘sweat equity’’ in 

the construction of their new homes in exchange for their down payment. Hard work 

is the key, along with a willingness to work cooperatively with other participants. 

No construction experience is necessary! Participants perform a variety of unskilled 

and semi-skilled tasks from digging the foundation, to carpentry, painting, electrical 

and plumbing activities through construction clean-up and landscaping—along with 

everything in between! Our knowledgeable family construction coordinators (who 

themselves have gone through the program) guide participants through the construction process all the while teaching the participants many new skill sets. 

Friends, family, church members, and others help these families accomplish the 

labor requirements. Therefore, it becomes a community endeavor to complete all the 

homes in a group. 
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Each Self Help Home is currently being built as a GREEN Certified home, and 

is constructed to Exceed Energy Star Standards. To date, FHP has constructed over 

150 GREEN and Energy Star Certified homes. These homes conserve energy resources for our country, and just as importantly, conserve the precious financial resources of the low-income rural clients we serve. Many of the Self-Help Housing organizations across America build their homes to these same GREEN and Energy 

Conserving Standards. 

FHP provides services before, during and after to assure the success of the families. Services provided ‘‘during’’ the application process include homeownership education, improving credit, and understanding the responsibilities of homeownership. 

Once the home is built, homeowners are also educated and encouraged to become 

active with their homeowners association to assure their community remains a quality and safe neighborhood. FHP recently hosted a Parliamentary Procedure Training 

class for interested homeowners and to train new and seasoned HOA board members. 

While FHP provides safe housing and encourages community involvement, the 

groundwork is being laid to support a positive outlook for youth and teens in the 

community. The youth of our communities have witnessed the hard work of their 

parents leading to the accomplishment of the American Dream, homeownership. We 

have had multiple experiences where children growing up in our decent affordable 

self help housing communities, have gone on to build self help homes of their own. 

These children have learned that hard work and perseverance do pay off. 

The USDA Mutual Self-help Program has also had a positive impact on the local 

economy. In addition to a staff of 17 employees, in which 58 percent are Self Help 

Homeowners, FHP has been able to regularly subcontract with small family owned, 

mid-size and chain store businesses. A great portion of the $65 million has been circulated to these various businesses since our inception in 1993. Consequently, as a 

primary client for many businesses, including Home Depot, in the Ruskin, Florida 

area, FHP has contributed to supporting jobs throughout its rural service area. 

The value of the Mutual Self-Help Housing Program has inherent benefits that 

provide answers to other social problems in our society by meeting the needs of affordable, quality and energy-efficient housing that provides safe environments for 

our rural families. Accordingly, the program also prepares the children of these 

homeowners with the tools to change their collective destinies; all while creating 

and maintaining meaningful jobs for rural Americans. 

PREPARED STATEMENT OF THE FEDERATION OF AMERICAN SOCIETIES FOR

EXPERIMENTAL BIOLOGY

The Federation of American Societies for Experimental Biology (FASEB) respectfully requests a fiscal year 2013 appropriation of $325 million for the Agriculture 

and Food Research Initiative (AFRI) within the National Institute of Food and Agriculture. This funding level matches the recommendation made in the President’s fiscal year 2013 budget request. FASEB’s broader goal is to support sustainable 

growth so that AFRI funding reaches its authorized level of $700 million as soon 

as feasible. 

As a federation of 26 scientific societies, FASEB represents more than 100,000 life 

scientists and engineers, making it the largest coalition of biomedical research associations in the United States. FASEB’s mission is to advance health and welfare by 

promoting progress and education in biological and biomedical sciences through 

service to its member societies and collaborative advocacy. FASEB enhances the 

ability of scientists and engineers to improve—through their research—the health, 

well-being, and productivity of all people. 

As the Department of Agriculture’s premier competitive grants program, AFRI 

supports agricultural research, education, and extension projects at public land 

grant universities and other institutions nationwide. In order to optimize the effectiveness of its resources, AFRI facilitates collaborative, interdisciplinary research to 

address key societal problems and build foundational knowledge in high-priority 

areas of the food and agricultural sciences. AFRI also encourages young scientists 

to pursue careers in agricultural research by providing research funding for over 

1,700 of the Nation’s most promising pre- and postdoctoral scholars. 

According to the results of a recent study published in the Proceedings of the National Academy of Sciences, global food demand is expected to double by the year 

2050. The world must meet the increasing need for food while simultaneously providing better nutrition, new biofuel materials, sustainable farming practices, and 

greater food safety. The effective coordination of research, education, and extension 

activities like those supported by AFRI enables efficient translation of scientific dis-
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coveries into a broad range of applications to overcome some of our most daunting 

food and agriculture challenges. For example, a team of scientists supported by 

AFRI are discovering the biological processes that determine how warm temperatures affect corn seed development and crop production. With this knowledge, researchers can develop hardier genetic variants of corn that are able to overcome the 

negative effects of heat stress and produce higher yields—advances which will be 

important for maintaining an adequate food supply. Other AFRI-funded scientists 

are studying the genomes of soilborne microorganisms responsible for damaging soybeans and other crops. By understanding the pathogen’s ability to harm plants, research and extension specialists can develop methods to manage the disease, increase crop production, and assist farmers, who lose an estimated $300 million to 

soybean root and stem rot diseases each year. AFRI also makes critical contributions to improving human health; scientists are using multidisciplinary approaches 

to examine the process by which disease-causing E. coli are released from the digestive tracts of cattle into the food supply. Research on the genetic, microbial, and environmental factors that cause the bacteria to spread throughout livestock populations enables scientists to devise new strategies for reducing cattle infections and 

preventing food contamination. 

Robust AFRI funding will also help attract talented young scientists to careers in 

agricultural research. A new AFRI-sponsored fellowship program has been established to help train and develop the next generation of agricultural, forestry, and 

food scientists and educators. In its first year of funding, the program awarded a 

total of $6 million to 54 students from 32 universities across the country. Fellows 

are already advancing important research projects, including a study to identify 

sources of microbial contamination in imported foods. 

Agricultural research directly benefits all sectors of society and every geographic 

region of the country. Furthermore, the private sector relies on public investments 

in USDA research to increase productivity, improve crops, and train future cohorts 

of agricultural scientists. The estimated value of U.S. agricultural exports increased 

32.2 percent between fiscal year 2007 and fiscal year 2010, illustrating the growing 

demand for agricultural products worldwide, and yet the AFRI budget has stagnated 

since the program was established with an authorized funding level of $700 million 

in the 2008 farm bill. In fiscal year 2010, AFRI’s limited resources could only support 40 percent of project proposals recommended for funding by review panels, and 

the program remains significantly underfunded relative to its current capacity. The 

fiscal year 2012 AFRI budget of $264 million is woefully inadequate to ensure viability of a research enterprise at the core of human prosperity. 

Thank you for the opportunity to offer FASEB’s support for AFRI. 

FASEB is composed of 26 societies with more than 100,000 members, making it 

the largest coalition of biomedical research associations in the United States. Celebrating 100 Years of Advancing the Life Sciences in 2012, FASEB is rededicating 

its efforts to advance health and well-being by promoting progress and education in 

biological and biomedical sciences through service to our member societies and collaborative advocacy. 

PREPARED STATEMENT OF FRIENDS OF AGRICULTURAL RESEARCH—BELTSVILLE, INC. 

Mister Chairman and Members of the Subcommittee, thank you for this opportunity to present our statement supporting funding for the USDA’s Agricultural Research Service (ARS), and especially for its flagship research facility, the Henry A. 

Wallace Beltsville Agricultural Research Center (BARC), in Beltsville, Maryland. 

We strongly recommend full fiscal year 2013 funding support for research programs 

at Beltsville. 

We begin our recommendations, Mr. Chairman, by drawing attention to Agriculture Secretary’s Tom Vilsack’s February 13, 2013, remarks on the proposed fiscal 

year 2013 budget: ‘‘USDA has supported farmers, ranchers and growers so that last 

year they enjoyed record farm income. . . . To help sustain record farm income, we 

will invest in research and development to improve agricultural productivity. [And 

continue] support for in-house research and the land grant universities. We’ll continue our efforts to combat destructive pests and disease that threaten crops and 

livestock. 

Following a Department-wide review of operations, we created a Blueprint for 

Stronger Service to make USDA work better and more efficiently for the American 

people. We found savings in areas like technology, travel, supplies and facilities. 

We’ve been able to avoid the interruptions in service that come with furloughs and 

employee layoffs. 
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The Blue Print for a Stronger Service holds out substantive agency-wide impacts 

for the Agricultural Research Service as a whole as well as for Beltsville in particular. The agency is streamlining its business operations, consolidating activities 

such as human resources and procurement into three ‘‘business service centers.’’ In 

fiscal year 2011, ARS cut its travel costs by approximately 28 percent from the past 

year, and the ARS printing fund has been cut by more than half. While continuing 

to serve the research needs of American agriculture and the Nation, ARS is committed to ‘‘doing more with less.’’ 

We strongly endorse the remarks of Secretary Vilsack and the purposes and goals 

of the Blue Print for a Stronger Service. Overall, ARS will close 12 of its research 

programs at 10 locations in 2012, none of them at Beltsville—a recognition of the 

outstanding research conducted at Beltsville. 

Beltsville—the Nation’s premier agricultural research center—has spearheaded 

technical advances in American agriculture for over 100 years. Beltsville celebrated 

100 years of research leadership and technical advances in 2010. The long list of 

landmark research achievements over that time is truly remarkable. Still at the 

threshold of its second century, Beltsville stands unequalled in scientific capability, 

breadth of agricultural research portfolio, and concentration of scientific expertise. 

Under the leadership of Director Dr. Joseph Spence and with its powerful scientific 

capability, the Beltsville Agricultural Research Center is distinctively, indispensably 

prepared for the challenges that lie ahead. 

Toward that end, the scientists of Beltsville have developed a new, bold vision for 

the future. Titled Innovation and Integration: Agricultural Research for a Growing 

World, this visionary document stems from the realization that broader, multidisciplinary approaches will be needed to address new, perhaps unforeseeable agricultural challenges of the future. New approaches will be needed to reach beyond the 

confines of traditional research approaches tied to narrow issues or specific commodities. Traditionally, for instance, plant scientists may have worked in some combination with animal scientists or with human nutritionists. Only rarely, however, have 

scientists combined efforts across many disciplines to solve problems. Given its 

broad research portfolio and its many disciplines, Beltsville is perfectly situated for 

broad, multidisciplinary approaches to flourish. Thus, in every way, Beltsville remains and will continue to be a national Center of Excellence for the highest agricultural research priorities. 

We are aware of the financial constraints facing our country. We are aware, too, 

of urgent demands for funding among compelling national priorities. Securing 

ample, safe, and nutritious food—food security—has always been the most compelling of human priorities. That is true today, and it will be no less so in the years 

ahead. Commentators such as Robert Samuelson speculate that as much as oil, 

scarce food could shape global politics for decades to come. In summation, Mr. 

Chairman, we strongly support adequate funding for Beltsville. We would respectively suggest that adequate funding for the Agriculture Department’s flagship research center is central to maintaining national and world food security. 

Priorities in the President’s Fiscal Year 2013 Budget Request 

Now, Mr. Chairman, we turn to key research areas highlighted in the President’s 

proposed budget. We strongly recommend this proposed funding. Our recommendation is consistent with the remarks of Secretary Vilsack. 

We were pleased to see that the fiscal year 2013 budget includes increases for environmental stewardship; crop breeding and protection; animal breeding and protection; food safety; and human nutrition. Obviously, these are areas of great concern 

to all Americans, and they are certainly among the highest priorities for agricultural 

research today. All of these research areas are strengths of the Beltsville Agricultural Research Center and they will benefit well from the unique facilities and scientific expertise at the Center. We encourage you to seriously consider funding the 

proposed budget and to ensure that Beltsville receives the funding that it needs to 

address these critical research needs. 

Although funds are not requested for major facilities projects in the fiscal year 

2013 budget, we would like to bring to your attention the urgent need for renovation 

of Building 307 on the Beltsville campus. The Center has aggressively moved to consolidate space and reduce costs and has been very successful at doing so. However, 

these plans require the renovation of a building—Building 307—that was vacated 

some years ago in anticipation of a complete renovation. In the past, Congress approved partial funding for this renovation, and those monies were retained pending 

appropriation of the full amount required for the renovation. Unfortunately, those 

funds now have been lost to ARS. Consequently, renovation of this vacant, highly 

useful building is on indefinite hold. While we realize that funding is extremely 

tight, we confirm that Beltsville urgently needs a renovated Building 307 for ade-
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1Global Health Technologies Coalition. http://www.ghtcoalition.org/coalition-members.php. 

quate, high quality lab space. Moreover, a renovated Building 307 would not only 

yield substantial energy savings, but also would allow Beltsville to move forward 

with other long-delayed relocation and consolidation plans. 

In summation, we would highlight these spheres of excellence: 

Animal Breeding and Protection.—Beltsville conducts extensive research on animal production and animal health. The research center is the foundation of genetic 

improvement in dairy cow production. Beltsville is examining ways to prevent resistance to drugs for animal parasite prevention and control. 

Crop Breeding and Protection.—Beltsville scientists have an extensive record of 

ongoing research relating to protecting crops from pests and emerging pathogens. 

Beltsville has distinctive expertise for identifying pathogens, nematodes, and insects 

that destroy crops or make crops ineligible for export. Beltsville houses the 

Germplasm Resource Information Network, the United States coordinating body to 

identify and catalog plant germplasm. 

Child and Human Nutrition.—The Beltsville Human Nutrition Research Center 

(BHNRC) is the Nation’s largest, most comprehensive Federal human nutrition research center; unique activities include the What We Eat in America survey, which 

is the Government’s nutrition monitoring program, and the National Nutrient 

Databank, which is the gold standard reference of food nutrient content that is used 

throughout the world. These two activities are the basis for food labels, nutrition 

education programs, food assistance programs including SNAP, the Supplemental 

Nutrition Assistance Program, school feeding programs, and Government nutrition 

education programs. 

Global Climate Change.—Beltsville became actively engaged in climate change research long before climate change became a topic of intense media interest. Beltsville scientists are at the forefront of climate change research—understanding how 

climate change affects crop production and the effects of climate change on growth 

and spread of invasive and detrimental plants (such as weeds.) A central aim is 

finding ways to mitigate negative effects of climate change on crops. Beltsville 

houses unequalled facilities for replicating past climates or climates that may exist 

in the future. 

Plant, Animal, and Microbial Collections.—Beltsville houses matchless national 

biological collections that are indispensable to the well-being of American agriculture. In addition to the actual collections, Beltsville scientists are internationally 

recognized for their expertise and ability to quickly and properly identify insect 

pests, fungal pathogens, bacterial threats, and nematodes. This expertise is crucial 

to preventing loss of crops and animals, ensuring that invasive threats to American 

agriculture are identified before they can enter the country, thus helping to protect 

homeland security, and ensuring that American exports are free of pests and pathogens that could prohibit exports. Also, Beltsville houses the National Animal Parasite collection and has the expertise to identify parasites that are of importance to 

agricultural animals. 

Mr. Chairman, this concludes our statement. Thank you for consideration and 

support for the educational, research, and outreach missions of the Beltsville Agricultural Research Center. 

PREPARED STATEMENT OF THE GLOBAL HEALTH TECHNOLOGIES COALITION

Chairman Kohl, Ranking Member Blunt, and members of the Committee, thank 

you for the opportunity to provide testimony on the fiscal year 2013 appropriations 

funding for the U.S. Food and Drug Administration (FDA). We appreciate your leadership in global health, and we hope that your support will continue. I am submitting this testimony on behalf of the Global Health Technologies Coalition (GHTC), 

a group of nearly 40 nonprofit organizations working together to advance U.S. policies that can accelerate the development of new global health innovations—including new vaccines, drugs, diagnostics, microbicides, multi-purpose technologies, and 

other tools—to combat global health diseases and conditions. The GHTC members 

strongly believe that to meet the world’s most pressing global health needs, it is 

critical to invest in research today so that the most effective health solutions are 

available now and in the future. We also believe that the U.S. Government has a 

historic and unique role in doing so. My testimony reflects the needs expressed by 

our member organizations, which include nonprofit advocacy organizations, policy 

think-tanks, implementing organizations, product development partnerships (PDPs), 

and many others.1 We strongly urge the Committee to continue its established support for global health research and development (R&D), as well as product safety 
207 

by (1) sustaining and supporting the U.S. investment in global health research, 

product development, and global regulation; (2) instructing the FDA to prioritize the 

review and licensure of global health technologies; and (3) requiring leaders at the 

FDA to put plans in place to ensure that global health product regulation is efficient, coordinated, and streamlined. 

Critical Need for New Global Health Tools 

Every day, more than 35,000 people die from AIDS, tuberculosis (TB), malaria, 

and other neglected diseases. The health detriments these diseases cause, even 

when not fatal, have profound implications in other areas such as economic stability 

and access to education. This highlights the urgent need for sustained investment 

in global health research to deliver new tools to combat these devastating diseases. 

While drugs and other health technologies exist for these diseases, many have 

grown ineffective due to increasing drug resistance and toxicity or are costly and 

difficult to administer in poor, remote, and unstable settings. While we must increase access to proven, existing drugs, vaccines, diagnostics, and other health tools 

to tackle global health problems, it is just as critical to develop the next generation 

of tools to fight existing disease and address emerging threats such as malaria, dengue, and drug-resistant TB. There are several very promising technology candidates 

in the R&D pipeline; however, these tools will never be available if the support 

needed to continue R&D is not supported and sustained. 

Innovation as a Smart Economic Choice 

Global health R&D brings lifesaving tools to those who need them most; however, 

the benefits are much broader than preventing and treating disease. It is also a 

smart economic investment in the United States, where it drives job creation, spurs 

business activity, and benefits academic institutions. Biomedical research, including 

global health, is a $100 billion enterprise in the United States. In Washington State, 

$4.1 billion is generated annually from global health activities, including R&D. In 

North Carolina, the economic impact from global health is roughly $2 billion. It is 

important that the U.S. Government support industries, such as global health R&D, 

which exhibit such strong potential to build the economy at home and abroad. Global health R&D has been an important legacy of USAID’s work for over three decades, and should be supported and protected. History has shown that investing in 

global health research not only saves lives but also produces cost-savings and efficiencies. In the United States alone, for example, polio vaccinations during the last 

50 years have resulted in a net savings of $180 billion. New therapies to treat drugresistant TB have the potential to reduce the price of treatment by 90 percent and 

cut health system costs significantly. The United States has made smart investments in research in the past that have resulted in lifesaving breakthroughs for 

global health diseases, as well as important advances in diseases endemic to the 

United States. It is essential that we keep this momentum going and not allow this 

research to lag behind, in order to maximize the resources we have put into these 

programs. We must now build on those investments to turn those discoveries into 

new vaccines, drugs, tests, and other tools. 

Advancing Global Health Product Development 

Because private industry does not invest significantly in the development of products for diseases for which there are no lucrative markets, a host of new organizational models and incentive mechanisms have emerged to address this challenge, 

with varying success. 

One organizational model that has proven promising is the product development 

partnership (PDP). PDPs are a unique form of a public-private partnership established to drive greater development of products for neglected diseases. Currently, 

there are more than 26 PDPs developing drugs, vaccines, microbicides, and 

diagnostics that target a range of infectious and neglected diseases, including HIV/ 

AIDS, malaria, TB, Chagas disease, dengue fever, and visceral leishmaniasis. 

While each PDP operates differently depending on its disease area(s) of focus, 

they typically employ a portfolio approach to R&D to accelerate product development by pursuing multiple strategies for the same disease area. They also work in 

close partnership with academia, large pharmaceutical companies, the biotechnology 

industry, and with regulatory and other Government agencies in developing countries. 

PDPs are delivering on their promise to develop lifesaving products for use in 

countries where disease burdens are highest and no viable commercial markets 

exist. To date, PDPs have developed and licensed 16 products to combat neglected 

diseases in low- and middle-income countries. More can be expected from PDPs in 

the future with sustained and additional support: in 2009, PDPs had more than 120 

biopharmaceutical, diagnostic, and vector-control candidates in various stages of de-
208 

velopment, including 32 in late-stage clinical trials. In the next 5 years, it is anticipated that several new technologies could be ready for use or in final stages of clinical development. 

For example the RTS,S/AS01 malaria vaccine candidate, manufactured by 

GlaxoSmithKline and co-developed with the PATH Malaria Vaccine Initiative, has 

produced positive results in clinical trials thus far, and could be available for general implementation for infants in Africa within 5 years or so. Such a vaccine would 

significantly reduce the burden of sickness and death from malaria. Additionally, six 

TB vaccine candidates are in clinical trials worldwide, including the first late-stage 

infant study of a TB vaccine in more than 80 years. There are also several new TB 

drug candidates in testing, which, if approved, would become the first new TB drugs 

in nearly 50 years. These therapies could help reduce the 8 million new TB infections and nearly 1.7 million TB-related deaths that happen each year. Also, a vaccine candidate and drug candidates are currently in clinical trials to prevent and 

treat visceral leishmaniasis, a neglected disease whose current treatments are costly 

and toxic. Additionally, two artemisinin combination therapies—the gold standard 

of malaria drug treatment—developed in partnership with Medicines for Malaria 

Venture have recently been approved and will be reaching those in need in the near 

future. 

Global Health Product Development Challenges 

Developers of products intended for the developing world face challenges in three 

key areas: 

First, capacity to conduct as well as adequately regulate clinical trials does not 

exist or is often weak in countries where diseases are endemic. Second, there is a 

lack of financing for late-stage clinical trials, which are necessary for testing the efficacy and safety of new tools. And third, the approval process for new products for 

neglected diseases is poorly coordinated and involves multiple, complex steps. Global 

regulatory systems are not sufficiently streamlined and the capacity of regulatory 

authorities to approve products for the developing world is frequently weak. Therefore, regulatory review and introduction of new safe and effective products takes 

longer than necessary. 

The FDA has demonstrated through a number of recent actions that it can have 

an impact on the introduction of global health tools. These include: 

—The FDA’s program to review HIV/AIDS drugs delivered in the developing 

world through the U.S. President’s Emergency Plan for AIDS Relief. 

—The release of guidance documents that outlined the FDA’s willingness to review vaccines and other products for diseases not endemic to the United States. 

—The agency’s partnership with global bodies, such as the World Health Organization (WHO), to enhance access to medicines for the developing world and assist other countries in bolstering their regulatory capacity. 

—The FDA’s Priority Review Voucher Program, which awards a voucher for future expedited product review to the sponsor of a newly approved drug or biologic that targets a neglected tropical disease (NTD). 

—The FDA’s Office of Critical Path Initiatives, which supports the development 

of regulatory science such as biomarkers and animal models to better evaluate 

and register new TB tools. 

—The FDA’s issuance of a guidance for testing new anti-TB drugs in combination, 

which accelerates the development of new, safe, and highly effective treatment 

regimens with shorter therapy durations. 

The FDA’s efforts in these areas are to be applauded. The agency can and should 

continue to increasingly leverage its expertise to benefit the millions of people affected by infectious diseases around the world. 

Recommendations 

Support for global health research that saves lives around the world—while at the 

same time promoting innovation, creating jobs, and spurring economic growth at 

home—is unquestionably one of the Nation’s highest priorities. In keeping with this 

value, the GHTC respectfully requests that the Committee do the following: 

—Sustain and support U.S. investments in the FDA’s funding resources, as well 

as its capacity to provide technical advice to other regulatory bodies and review 

and license health products for diseases not usually endemic to the United 

States, and its authority to fund research and development for global health 

technologies, including but not limited to those created though the Critical 

Pathways Initiative. 

—Instruct all U.S. agencies in its jurisdiction involved in global health to 

prioritize R&D within all development programs by creating actions plans, including metrics to measure progress. We request that leaders at the FDA to 
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2 HHS Global Health Strategy. http://www.globalhealth.gov/global-programs-and-initiatives/ 

global-health-strategy/. 

work with leaders at other U.S. agencies, including the State Department, U.S. 

Agency for International Development, the National Institutes of Health, the 

Centers for Disease Control and Prevention, and the Department of Defense to 

ensure that efforts in global health R&D are coordinated, efficient, and streamlined. This should include establishing transparency mechanisms designed to 

show what global health R&D efforts are taking place and how U.S. agencies 

are collaborating with each other to make efficient use of the U.S. investment, 

and align with the goals and intentions of the recently released Health and 

Human Services Global Health Strategy.2

—Direct that the results of these initiatives should be reported on to Congress 

and be made publicly available. Past reports of the health R&D activities at 

U.S. agencies have helped coordinate efforts between agencies and transparently inform the public about the investment of taxpayer money. These reports must be continued in the future and should include information on all 

U.S. Government agencies involved in global health R&D. 

We respectfully request that the Committee consider inclusion of the following 

language in the report on the fiscal year 2013 Agriculture and FDA appropriations 

legislation: ‘‘The Committee recognizes the critical contribution that the U.S. Food 

and Drug Administration’s (FDA) funding for new global health tools and its leadership in reviewing and licensing global health technologies makes to the impact of 

new global health technologies, and also recognizes the need to sustain and support 

U.S. investment in this area by fully funding the FDA to carry out this work. The 

Committee acknowledges the FDA’s essential role in capacity-building abroad to 

help build strong regulatory authorities in other nations, and asks that the FDA 

continue and expand on this work. New global health products are cost-effective 

public health interventions that play an important role in improving global health 

and are vital in protecting the lives of Americans and populations abroad. The Committee directs the FDA to expand its outreach and information-sharing activities 

with product developers—including but not limited to industry groups, nonprofit organizations, and other product development partnerships (PDPs)—to support the development of safe and effective global health tools. Further, the Committee directs 

the FDA to submit a report to Congress and the public outlining the monitoring, 

evaluation, and progress of its ‘Pathway to Global Product Safety and Quality’ as 

it pertains to products outlined in paragraphs (2) and (3) of section 740(c) of the 

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010 (Public Law 111–80). In its review of drugs and other 

products for neglected diseases, the Committee requests that FDA: 

—Maximize the use of priority review where feasible and appropriate. 

—Work with sponsors to facilitate expanded access to investigational products. 

—Increase coordination and interaction with the World Health Organization, European Medicines Agency, and other international regulatory agencies. 

—Implement mechanisms for enhanced collaboration between the FDA and national regulatory authorities in developing countries. 

—Increase coordination among individual drug, biological product, and device review divisions across FDA centers to support the development and monitoring 

of safe and effective medical products for rare and neglected diseases. 

The Committee is also aware that Chagas disease is not on the list of neglected 

diseases as currently defined by the FDA. The Committee urges the FDA to make 

the necessary modifications to include Chagas disease in its list of neglected diseases in line with the World Health Organization (WHO) list of neglected tropical 

diseases. The Committee is pleased with FDA’s current activities in the areas of regulatory capacity-building and the promotion of sound regulatory science practices 

abroad, and recommends that the FDA explore how to expand on such activities.’’ 

On behalf of the members of the GHTC, I would like to extend my gratitude to 

the Committee for the opportunity to submit written testimony for the record. 

PREPARED STATEMENT OF THE HOUSING DEVELOPMENT ALLIANCE, INC. 

On behalf of Housing Development Alliance, Inc. and the communities we serve, 

I wish to thank the Subcommittee for the opportunity to submit testimony on fiscal 

year 2013 Appropriations for the Department of Agriculture (USDA) Rural Housing 

Programs. I urge this subcommittee to fund USDA Rural Housing’s Section 502 Single Family Direct Loan Program at $900 million (the fiscal year 2012 level); Section 
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504 Very-Low Income Rural Housing Repair Loans at $28 million; and Section 504 

Very-Low Income Rural Housing Repair Grants at $29.5 million. 

Housing Development Alliance, Inc. (HDA) serves Perry, Knott, Leslie and 

Breathitt Counties in Kentucky. These are among four of the poorest counties in the 

Nation with poverty rates ranging from 24 percent to over 33 percent. In these four 

counties over 12,650 households have annual incomes of less than $25,000 including 

over 5,100 households with incomes less than $10,000. Furthermore, these counties 

suffer from persistent poverty (having more than 20 percent of population in poverty 

for more than five decades) which has resulted in a poor housing stock and a broken 

housing market. In short, our community has a critical need for safe, decent and 

affordable housing. 

Since 1996, the Housing Development Alliance has constructed 90 new homes 

which were sold to qualified low and very-low income homebuyers who received financing through the Section 502 Single Family Direct Loan Program. In this same 

period, the Housing Development Alliance has repaired nearly 180 homes using Section 504 Loan and Grants. These programs often serve the poorest of the poor. In 

fact, the average annual income of our Section 502 Direct Loan homebuyers was 

$14,252 and the average annual income of our Section 504 Loan and Grant repair 

client was $10,660 per year. 

In many cases the living conditions of the households prior to receiving assistance 

are deplorable. These homes often lack an adequate heat source; have little or no 

insulation; often have major structural defects including collapsing foundations, rotting floors and walls and leaking roofs; have unsafe electrical wiring; and lack complete plumbing. For example recently the Housing Development Alliance encountered an elderly woman whose gas water heater was spewing potentially deadly levels of carbon monoxide into her home and another elderly woman whose tub/shower 

was not hooked to the sewer and was draining directly under her home. 

However, the benefits of these programs are not limited to just to the households 

purchasing the new home or receiving the affordable home repair. The programs 

provide jobs and other needed economic activity to our community. For example, in 

2011 the constructed seven homes financed in part by the Section 502 Single Family 

Direct Loan Program. Using the National Association of Home Builders’ estimate 

that each home constructed creates/preserve 3 construction job per year, in 2011 the 

Housing Development Alliance’s use of Section 502 Direct Loans created/preserved 

21 construction jobs. Even more jobs were created/preserved through our use of the 

Section 504 Repair Loans and Grants which funded 14 home repairs. While these 

numbers may seem modest, as they are repeated in rural communities throughout 

America these programs have a huge impact on jobs in rural America. 

Furthermore the Section 502 Single Family Direct Loan Program is the most cost 

effective Federal housing program. Despite serving low and very-low income households, the average lifetime cost of a Section 502 Single Family Direct Loan is just 

$7,200 while the average cost of Section 8 Housing Assistance is nearly $7,000 per 

year. This low cost is due in part to the fact that Section 502 Direct portfolio maintains an excellent repayment history with a foreclosure rate of just over 4 percent. 

The administration and others have suggested that the Section 502 Guarantee 

Program is a suitable alternative to the Section 502 Direct Loan Program; this is 

simply not true in our community. We completed a study of our 502 Direct Loan 

Program recipients and found that only 1 out of 10 would have been able to afford 

the higher interest cost associated with a Section 502 Guarantee Loan. 

Thank you again for the opportunity to provide testimony on the critically important programs. Without adequate funding for these programs low income households 

will remained trapped in substandard, if not outright deplorable, housing and construction and other related jobs will be lost across rural America. 

PREPARED STATEMENT OF THE HUNGER TASK FORCE

I am writing to provide comments on the fiscal year 2013 Agriculture Appropriations bill. 

Hunger Task Force is a nonprofit, independent food bank located in Milwaukee 

County. We have been feeding emergency food free of charge to needy people in 

southeastern Wisconsin since 1974. Last year we distributed 9.8 million pounds of 

food to programs in our network. 

Currently, our network of 81 food pantries, soup kitchens and homeless shelters 

is providing food to over 35,000 people per month in our food pantry network, and 

we are serving over 60,000 hot meals in our soup kitchen network each month. We 

have seen an 11.9 percent increase in the number of people using our food pantries 

in the last 12 months. The numbers do not surprise us as 1-in-3 City of Milwaukee 
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residents continue to live at or below the poverty level, and 1-in-2 Milwaukee children live at the poverty level. Milwaukee County’s 2–1–1 IMPACT emergency hotline says that the number one reason people call them (27 percent of all calls) is 

to connect to an emergency food provider. A record 272,661 Milwaukee County residents (1-in-5 residents in the county) now receive FoodShare benefits. In Wisconsin, 

a record 831,000 people now receive FoodShare benefits. A recent report by our 

State’s Department of Public Instruction notes that the percentage of children in 

Wisconsin receiving free and reduced-price meals has increased 8 consecutive 

years—a record 41 percent of Wisconsin’s children now receive free and reducedprice meals, and in the City of Milwaukee a record 83 percent of students now receive subsidized meals. 

The increasing poverty and ongoing demand for emergency food in southeastern 

Wisconsin and throughout the State make the Federal nutrition and commodity programs more important than ever. 

Hunger Task Force continues to be involved in many of the Federal nutrition programs. We have been a contracted provider of TEFAP foods since 1999, and we have 

implemented the CSFP (we call it StockBox) since 2003. TEFAP and CSFP commodity foods now account for 75 percent of the food we distribute every year. We 

coordinate 100 StockBox sites in southeastern Wisconsin at which 9,300 low-income 

seniors receive monthly box deliveries to their doorstep. The CSFP boxes are incredibly important to the seniors we serve. A recent survey of our StockBox beneficiaries 

told us that 39 percent of recipients would eat less, go hungry or have a hard time 

obtaining enough food in they could no longer obtain a StockBox. Another 21 percent of StockBox beneficiaries mentioned that they would have to look for additional 

assistance, such as meal sites or food pantries, if they did not receive a StockBox 

each month. 

Hunger Task Force has also administered the Senior Farmers Market Nutrition 

Program since 2004. Last year we distributed 3,200 vouchers to needy seniors in 

Milwaukee County. We know Milwaukee’s seniors value these vouchers, as 91 percent of the vouchers were redeemed in 2011. 

Hunger Task Force has also been actively involved in improving and expanding 

participation in programs such as SNAP (Supplemental Nutrition Assistance Program), School Lunch and School Breakfast, WIC (Women, Infants and Children), 

CACFP after-school suppers, and the SFSP (Summer Food Service Program). For 

example: 

—We worked with the Milwaukee Public School district to pilot and then expand 

a universal-breakfast-in-the-classroom program. This program now provides free 

breakfast every day to all MPS schoolchildren in 87 schools—over 25,000 children per day now receive this benefit. 

—We have spearheaded a local coalition that provides summer meals (including 

suppers) to low-income children in Milwaukee. This summer feeding initiative, 

which is in large part subsidized by the Kohl’s Corporation, provided over 

720,000 meals (including 89,000 suppers) to needy children last summer. 

—We continually strive to ‘‘modernize’’ FoodShare programming in Milwaukee 

County. Since 2009, through our three satellite self-service locations, we have 

helped over 47,000 people apply for FoodShare or retain benefits. We also have 

received Federal/state SNAP Outreach Grant funding to ensure that all people 

eligible for SNAP benefits receive them. 

—We worked with Senator Kohl’s office to bring the CACFP after-school supper 

program to Wisconsin in 2009. Currently, 36 MPS schools provide more than 

40,000 after-school suppers each month to schoolchildren. 

—We have been a member of the Wisconsin WIC Advisory Committee since 2000. 

As a member, we work with local practitioners and State officials to ensure that 

WIC participation is maximized for those who are eligible. We also have begun 

attempting to work with State officials on a transition to EBT, and we have conducted outreach in our network around the new WIC food package. 

Our experience with the Federal nutrition programs is diverse and extensive. We 

see the value of these programs to the people who need benefits, as well as to the 

service providers and local economy. In general, we are very pleased with President 

Obama’s fiscal year 2013 Proposed Budget for USDA’s nutrition programs. In particular: 

—We support continued investment in the SNAP, including a continuation of 

State options to suspend time limits on SNAP for able-bodied adults without dependent children and restoration of cuts to SNAP benefits made in the 2010 

child nutrition bill. 

—We support the increased investment in the SFSP and WIC Program, including 

an increase in the cash value vouchers for fruits and vegetables for children 

from $6 to $8 per month. 
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—We support the competitive grants to fund school meal equipment needed for 

the implementation of the new school meal standards and expansion of the 

School Breakfast Program. 

—We are supportive of the $187 million provided to support the existing CSFP 

caseload, but disappointed that CSFP is not made into a seniors-only program. 

We also would like to see a seniors-only CSFP expanded to all 50 States. 

—We are supportive of the increased funding for TEFAP (both commodity purchases and administrative funding). 

—We are disappointed that the budget does not provide increased investment in 

the Senior Farmers Market Nutrition Program and WIC FMNP. Although we 

provided SFMNP vouchers to 3,200 needy seniors last year, poverty among the 

elderly continues to grow and we could easily triple the number of distributed 

vouchers with additional Federal funding. Also, the WIC FMNP is proposed to 

receive a 30 percent reduction, which will impact families who need healthy and 

nutritious produce as well as small farmers at farmers markets that operate in 

low-income communities. 

As an experienced emergency food provider and advocacy-driven organization, we 

ask that you consider our comments as you move forward with fiscal year 2013 

budget deliberations. Thank you for your consideration. 

Sincerely, 

JON JANOWSKI, 

Director of Advocacy. 

PREPARED STATEMENT OF THE IZAAK WALTON LEAGUE OF AMERICA

The Izaak Walton League of America appreciates the opportunity to submit testimony concerning appropriations for fiscal year 2013 for various agencies and programs under the jurisdiction of the Subcommittee. The League is a national, nonprofit organization founded in 1922. We have more than 39,000 members and 250 

community-based chapters nationwide. Our members are committed to advancing 

common sense policies that safeguard wildlife and habitat, support communitybased conservation, and address pressing environmental issues. The League has 

been a partner with farmers and a participant in forming agriculture policy since 

the 1930s. The following pertains to conservation programs administered by the 

U.S. Department of Agriculture. 

The Food, Conservation, and Energy Act of 2008 (farm bill) was enacted with a 

prominent commitment to increased mandatory conservation spending. It was bipartisan and supported by more than a thousand diverse organizations engaged in farm 

bill policy. We urge the Subcommittee to maintain the mandatory spending levels 

for conservation programs as provided in the farm bill. The League strongly opposes 

the administration’s proposal to cut essential conservation programs, unilaterally reducing the farm bill baseline for fiscal year 2013 and beyond. 

The League is concerned that the administration’s budget would deprive farmers 

and ranchers of conservation and environmental stewardship assistance in fiscal 

year 2013 and reduce the farm bill conservation baseline. These programs benefit 

producers through improved soil quality and productivity of their land, and the 

American people through cleaner air and water and healthy habitat. Reducing the 

farm bill baseline in the face of increasing future demands for resource protection 

and productivity is counterproductive. 

The League and its members across the country are especially focused on the following core conservation programs: 

Conservation Reserve Program (CRP).—The Conservation Reserve Program (CRP) 

reduces soil erosion, protects water quality, and enhances habitat through long-term 

contracts with landowners that convert highly erodible cropland to more sustainable 

vegetative cover. The administration’s fiscal year 2013 budget for CRP proposes a 

reduction in the farm bill authorized acreage limit from 32 million to 30 million. 

It is encouraging to see the announcement of a general sign-up in fiscal year 2012, 

and the special provision for 1 million acres of wetland and grassland restoration, 

but that does not alter the proposed cut to CRP’s mandatory authorization for fiscal 

year 2013. 

Wetlands Reserve Program (WRP).—The Wetlands Reserve Program (WRP) provides technical and financial assistance to landowners to restore and protect wetlands on their properties. Wetlands are generally conserved through permanent or 

30-year easements purchased by the U.S. Department of Agriculture. Unfortunately, 

the administration takes no action to request new farm bill funding for WRP, which 

expires with the current farm bill authorization in fiscal year 2012. The League 
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urges Congress to continue the decades-long commitment made to the goals of the 

program. 

Grassland Reserve Program (GRP).—The Grassland Reserve Program (GRP) focuses on limiting conversion of pasture and other grasslands to cropland or development while allowing landowners to continue grazing and other operations that align 

with this goal. Again, the League is disappointed that the administration has not 

proposed continuing GRP or any form of the program beyond fiscal year 2012. The 

League opposes this reduction because it will undermine efforts to protect one of the 

country’s most threatened natural resources. 

Conservation Stewardship Program (CSP).—The Conservation Stewardship Program (CSP) is a comprehensive approach to conserving soil, water, and other natural resources across a range of lands, including cropland, prairie, and forests. CSP 

makes conservation the basis for a producer to receive Federal financial support 

rather than limitless subsidies for intensive production of a few crops. It is troubling 

that the administration’s fiscal year 2013 budget is proposing to cut the mandatory 

spending for CSP by $68 million. The League opposes this cut because CSP is a 

comprehensive, whole-farm approach to conservation that can maximize benefits to 

natural resources, fish and wildlife, and producers alike. 

Wildlife Habitat Incentives Program (WHIP).—The Wildlife Habitat Incentives 

Program helps agricultural landowners develop habitat for upland wildlife, wetland 

wildlife, threatened and endangered species, fish, and other wildlife. The President’s 

fiscal year 2013 proposal also seeks to permanently reduce the mandatory commitment established for WHIP in the farm bill. The budget would cut fiscal year 2013 

funding for WHIP by $12 million. The League opposes this damaging cut to a program with the central goal of supporting wildlife resources in rural America. 

Finally, effective implementation of farm bill conservation programs depends upon 

adequate technical resources to work with landowners in addressing their unique 

environmental concerns. Although conservation programs are available, under-investment in technical assistance limits agency support to assist farmers and ranchers in selecting and optimizing appropriate programs for their operations. The technical expertise of the Natural Resource Conservation Service and partners that assist in the delivery of programs and technical assistance directly to landowners is 

necessary for the adoption and maintenance of conservation practices. We request 

that the Subcommittee support the mandatory levels of conservation program funding as provided in the farm bill to enable robust technical resources to implement 

those programs successfully. 

We appreciate the opportunity to testify in strong support of fully funding agricultural conservation programs. 

PREPARED STATEMENT OF THE LITTLE DIXIE COMMUNITY ACTION AGENCY, INC. 

LDCAA is requesting adequate funding provided to support $900 million in lending authority for the Section 502 Single Family Direct Loan Program. It is disappointing to see the USDA relinquish the section 502 direct loan program. The section 502 direct loan program has far exceeded in successful outcomes any other Federal homeownership program. No other Federal program can equal the profile of 

families served: approximately 60 percent of the families receiving section 502 loans 

have incomes of less than 60 percent of the median income, and 40 percent of families participating in the program have incomes that do not exceed 50 percent of the 

median income. 

Despite serving families with limited economic means, the section 502 direct loan 

program is the most cost effective affordable housing program in the Federal Government. In fiscal year 2010, the total per unit cost for a homeownership loan to 

a low income family was less than $5,000. This stands in significant contrast to the 

Section 8 Rental Assistance program with the annual per unit costs exceeding the 

total Federal expense of a section 502 direct loan. 

Section 523 Mutual Self-Help Housing Program 

LDCAA is requesting national funding of $30 million for the Section 523 Mutual 

Self-Help Housing Program. Currently, more than 100 organizations across America 

participate in the self-help housing program. These organizations unite groups of 8 

to 10 self-help families who work collectively in the construction of each family’s 

home. They perform approximately 65 percent of the overall construction labor. This 

‘‘Sweat Equity’’ results in each homeowner earning and gaining instant equity in 

their homes. It also makes a significant investment in their community often resulting in the building of homes and neighborhoods together. And despite the fact that 

self-help families constitute the lowest incomes of participants in the section 502 
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portfolio, data demonstrates that these families prove to have the lowest rates of 

default and delinquency. 

For the past 3 years, self-help housing organizations have constructed almost 

3,500 homes. This construction has in turn led to more than 11,000 jobs, more than 

$738 million in local income and $77 million in taxes and revenue in rural communities across the Nation as evidenced from economic impact numbers from the National Association of Homebuilders. 

PREPARED STATEMENT OF THE LUMMI NATION

Mr. Chairman and subcommittee members, thank you for the opportunity to provide testimony on the fiscal year 2013 Agriculture, Rural Development, Food and 

Drug Administration and Related Agencies appropriations. The following are the requests and priorities of the Lummi Nation. 

BACKGROUND INFORMATION

The Lummi Nation is located on the northern coast of Washington State, and is 

the third largest Tribe in Washington State serving a population of over 5,200. The 

Lummi Nation is a fishing Nation. We have drawn our physical and spiritual sustenance from the marine tidelands and waters for hundreds of thousands of years. 

Now the abundance of wild salmon is gone, and the remaining salmon stocks do not 

support commercial fisheries. Consequently, our fishers are trying to survive off the 

sale of shellfish products. In 1999 we had 700 licensed fishers who supported nearly 

3,000 tribal members. Today, we have about 523 remaining. This means that over 

200 small businesses in our community have gone bankrupt in the past 15 years. 

This is the inescapable reality the Lummi Nation fishers face without salmon. We 

were the last surviving society of hunters/gatherers within the contiguous United 

States, but we can no longer survive living by the traditional ways of our ancestors. 

GOVERNMENT-TO-GOVERNMENT PROTOCOL

Executive Order No. 13175.—The United States has a unique legal and political 

relationship with Indian tribal governments, established through and confirmed by 

the Constitution of the United States, treaties, statutes, executive orders, and judicial decisions. In recognition of that special relationship, pursuant to Executive 

Order 13175 of November 6, 2000, executive departments and agencies (agencies) 

are charged with engaging in regular and meaningful consultation and collaboration 

with tribal officials in the development of Federal policies that have tribal implications, and are responsible for strengthening the government-to-government relationship between the United States and Indian tribes. 

LUMMI SPECIFIC REQUESTS

Rural Development Loan Fund 

Tribal Financing and Access.—It is critical that Tribal governments acquire affordable and assessable financing for infrastructure development, to build facilities 

that provide tribal governmental services to our member and other governmental 

projects. Tribes must have equitable access and the same loan eligibility criteria as 

counties and States. Currently, existing loan criteria is inequitable and obligates 

valuable Tribal financial resources that otherwise would be allocated to providing 

needed services to our community. 

Water Supply.—Phase 1 funding of ∂$2 million, for a new Water Supply System—Increase in funding for Hatchery construction, operation and maintenance. 

Funding will be directed to increase hatchery production to make up for the shortfall of wild salmon. 

The Lummi Nation currently operates two salmon hatcheries that support tribal 

and non-tribal fishers in the region. The tribal hatchery facilities were originally 

constructed utilizing Federal funding from 1969–1971. Understandably most of 

original infrastructure needs to be repaired, replaced and/or modernized. Lummi 

Nation Fish Biologists estimate that these facilities are currently operating at 30 

percent of their productive capacity. Through the operation of these hatcheries the 

Tribe annually produces 1 million fall Chinook and 2 million Coho salmon. To increase production, we must pursue a ‘‘phased approach’’ that addresses our water 

supply system first. The existing system only provides 850 GPM to our hatchery. 

To increase production to a level that will sustain tribal and non-tribal fisheries 

alike, we need to increase our water supply four-fold. A new pump station and 

water line will cost the Tribe approximately $6 million. We are requesting funding 

for the first phase of this project. Our goal is to increase fish returns by improving 
215 

aquaculture and hatchery production and create a reliable, sustainable resource to 

salmon fishers by increasing enhancement. 

Lummi Nation needs financial resources to develop comprehensive water resources conservation and utilization plans that accommodates the water needs of its 

residents, its extensive fisheries resources. 

To ensure related to the removal of wild stocks from the salmon available for harvest are compensated through increased hatchery construction, operations and 

maintenance funding. 

Job Development.—The Lummi Nation needs support of its comprehensive Fisherman’s Cove Harbor and Working Water Front Project which addresses Indian Energy, Economic and Workforce Development needs of the Lummi Nation membership. 

Unemployment on the reservation has been very difficult to address with limited 

on-reservation jobs. Tribal governments need to be able to meet the employment and 

training needs of our membership as well as the business development needs of our 

communities. This is the objective of the Lummi Nation Fisherman’s Cove Harbor 

and Working Waterfront Project. We need financial assistance to enable our membership to get the job skills the local (Reservation and Non-Reservation) labor market demands. We ask the Committee to direct the Bureau to require this Office to 

work with the Lummi Nation to fully develop the Working Waterfront Project for 

the benefit of the Lummi Nation fishers, members and others invested in the marine economy of the extreme northwest corner of the United States. 

USDA—Natural Resources Conservation Service 

Treaty Reserved Rights.—The Lummi Nation and other western Washington 

tribes are in danger of losing our treaty reserved rights. At risk are our constitutionally protected treaty reserved rights to harvest salmon. Because of the diminishing salmon populations and subsequently constrained tribal harvests—all due to 

the inability to restore salmon habitat faster than it is currently being destroyed 

and limitation on hatchery production to mitigate for lost natural production. To 

stop this habitat degradation, we are requesting that our Federal trustee to implement their fiduciary duties by better protecting salmon habitat. By fulfilling these 

essential Federal obligations, it is our hope that our salmon resource—the foundation of our cultures, our economies, and our rights—will be restored. We are urging 

the following action: 

—Require that all Federal funding for agricultural BMPs are contingent upon 

agreement to imp implement full suites of NMFS/USFWS/EPA’s western Washington BMP performance standards. 

—Consult with NMFS regarding the impacts of agricultural subsidy programs on 

western Washington salmon. 

—Fund tribal riparian easement and fee simple habitat conservation acquisitions. 

—Make the production of traditional tribal foods eligible for agricultural subsidy 

and conservation programs. 

FAMILY AND CHILDREN WELLNESS

Healthy, Hunger-Free Kids Act of 2010.—Lummi Nation needs assistance to develop and implement our tribal program to take full advantage of the National 

School Lunch Program reimbursement by having our tribal traditional foods eligible 

for reimbursement/subsidy. 

Child Abuse and Neglect.—Poverty is the primary factor in predicting incidents 

of child abuse and neglect. When the whole family is living in a car or a camper 

or in a low income house sparsely furnished house stimulation for positive mental, 

physical and emotional child development is absent. Poverty starts a downward spiral that is further fueled by the lack of traditional teachings, which values working 

together, not competing with one another. The first and most important step in reversing this trend is a job. Jobs not only change the life of the one who gets the 

job, but the lives of everyone in their family and positive impact to the community. 

The reverse is also true when jobs are lost. Over the last 10 years over 300 hundred 

small fishing businesses operated by members of the Lummi nation have financially 

failed. The people employed and families supported by these businesses are unemployed without access to unemployment insurance. Most of these people have replaced their employment with access to TANF, GA and other related income transfer programs. Lummi Nation needs financial assistance to insure that every Lummi 

Nation members who needs a job has access to a job. 

Domestic Violence.—Poverty starts a downward spiral that is further fueled by the 

lack of traditional teachings, which values working together and not competing with 

one another. Domestic Violence is a function of poverty and a lack of traditional values about the most prominent difference in our lives is the difference between men 
216 

1The Friends of IR–4 is a large diversified assemblage of commodity/agricultural organizations that rely upon and support the IR–4 Project as it currently exists. For more information, 

go to www.saveir-4.org. 

and women. Traditionally both are considered sacred functions and cannot be preempted by the other. The first and most important step in reversing this trend is 

a job. 

Elder Abuse.—Lummi Nation is concerned that incidents of elder abuse have been 

identified in our community. The Lummi Nation is committed to identify conditions 

which lead to and support elder abuse and eliminating those conditions from the 

community. Those elders who have secured social security payments are often the 

only family member with cash income. As the head of a family they are looked to 

support others who do not have a cash income. When the available resources do not 

match required expenditures month after month tension builds and tragic incidents 

result. Lummi Nation needs financial assistance to insure that all of its members 

who need jobs have jobs. This is the best way to insure that our elders may live 

in our community without harm. 

Thank you again for this opportunity to provide you with the priorities and requests of the Lummi Nation. 

Hy’shqe. 

PREPARED STATEMENT OF THE MASSACHUSETTS VEGETABLE & FLOWER GROWER

U.S. agriculture is made up of hundreds of crops of which only a dozen or so are 

considered major crops. The rest are referred to as minor or specialty crops and 

form the backbone and bloodline of our country’s food supply. The commodity groups 

supporting this letter represent those who grow all the high quality vegetables and 

fruits we eat, the herbs and spices that add flavor to our lives, and the flowers and 

landscape plants that make America a beautiful place to live. All crops require pest 

control whether grown organically or conventionally. Due to cost of meeting EPA 

standards, which ensure all pest control compounds are safe to both human health 

and the environment, it is often economically unfeasible to commercialize pest control products for minor markets without public support. The limited acres on which 

these crops are grown do not provide the economic incentive for the private sector 

to register these products on our crops. Recognizing the need for the Government 

to assist with pest management in specialty crops, the IR–4 1 Project was created 

nearly 50 years ago to help America’s specialty crop growers. The IR–4 Project is 

widely considered to be a model program with a history of successfully providing 

specialty crop growers with needed production tools and has deep support throughout the agricultural community. 

We believe the IR–4 Project has become one of the most efficient, indispensable 

and reliable Government programs ever developed. Simply put, specialty crops cannot economically survive without the IR–4 Project. Since the IR–4 Project is so crucial to our existence, we felt great alarm and deep concern when the fiscal year 2013 

President’s budget proposal for the USDA National Institute Food and Agriculture 

(NIFA) was proposing to transfer the IR–4 budget line item (Minor Crop Pest Management in Research and Education Activities) into a proposed new Crop Protection 

Program which includes five integrated pest management (IPM) programs. This proposed elimination of dedicated funding for the IR–4 Project will have profound negative impacts on production costs for all specialty crops and will result in 

unsustainable economic losses to growers, food processers and, ultimately, the consumers. 

We support the logic and financial considerations behind the proposal to consolidate five similar Integrated Pest Management Programs into the proposed Crop 

Protection Program. However, we believe that the Crop Protection Program is not 

the appropriate place to merge IR–4 due to its distinct objectives, which do not dovetail into the other IPM programs. 

We offer the following reasons why we are adamantly opposed to this move: 

—The five Focus Areas for the proposed Crop Protection program, as documented 

in the Explanatory Notes, which was submitted to Congress in the President’s 

budget, do not include the primary IR–4 mission of ‘‘supporting the development 

of appropriate data to facilitate registration of sustainable pest management 

technologies for specialty crops and minor uses’’. Thus, it appears that USDA 

does not intend to continue to support the regulatory approvals of new crop protection chemicals and biopesticides for food and nonfood specialty crops in the 

proposed Crop Protection Program. We consider this change to be a serious 

threat to specialty crop agriculture in the United States. 
217 

—IR–4 is exempt from indirect cost recovery by the host land-grant universities 

under 7 U.S.C. 450i(e), the NIFA grant currently provided to fund IR–4. The 

proposed Crop Protection Program transfers funds to Integrated Activities 

which would allow up to 30 percent indirect cost recovery. If IR–4 is included 

as part of the Crop Protection program, it means a 30 percent decrease in funds 

available for IR–4 project. This funding decrease is a very threatening proposition for specialty agriculture and is something that we cannot accept. 

—IR–4 does much more than crop protection chemical testing. IR–4 collaborates 

with: 

—USDA-Foreign Agricultural Service.—To reduce the impact of pesticide residues in/on specialty crops from being a barrier of trade for U.S. grown exports. 

—Department of Defense.—To prevent sickness/death within deployed U.S. military forces who are exposed to insect pests which transmits diseases to humans by facilitating the availability of public health pesticides. 

—USDA–APHIS.—To perform collaborative research to combat invasive pests. 

—USEPA.—To review IR–4 submitted data to help with their priorities to provide new technology to reduce the risk from pesticides. 

—Department of Commerce/OMB.—IR–4 is involved in a critical project supporting the U.S.-Canada agreement to accomplish key objectives of the Regulatory Cooperation Council. 

—IR–4 food residue research often takes 3 to 5 years to complete, involves highly 

trained staff that are proficient with USEPA’s Good Laboratory Practices regulations, and requires expensive analytical instruments. This is vastly different 

from NIFA’s typical research grants. Restructuring or eliminating IR–4 and 

abandoning numerous ongoing studies would be extremely expensive and a 

waste of already appropriated taxpayer money. 

—Investment in IR–4 has yielded a huge return on investment. Since its inception, IR–4 has facilitated the registration of over 25,000 crop uses. The Michigan State University Center for Economic Analysis (Dec. 2011) determined that 

for a total budget of $18 million (USDANIFA and other public/private sources), 

IR–4 efforts contribute over $7.2 billion to annual U.S. Gross Domestic Product 

and supports 104,650 U.S. jobs. 

These comments are on behalf of the 88 undersigned commodity associations/ 

grower groups who represent American specialty agriculture. Collectively, we represent growers with operations in almost every congressional district of every State. 

Our operations are a huge driver in American agriculture; the farm gate value of 

specialty crops is over $67 billion annually. For more information on this topic 

please see: www.saveir-4.org. 

In summary, the proposed consolidation of the IR–4 Project into the Crop Protection Program significantly hurts growers of food and non-food specialty crops and 

our food systems. It will lead to higher prices for the food that enhances health, and 

plants that enhance the environment. Consolidating IR–4 with the proposed Crop 

Protection Program will substantially increase costs to the taxpayer or result in a 

much smaller program providing significantly less service to American growers and 

ultimately the American public. We urge the Senate Appropriations Committee Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and 

Related Agencies to continue to dedicate at least $12 million net dollars for Minor 

Crop Pest Management (IR–4) in fiscal year 2013 USDA–NIFA Research and Education Activities. Simply put, the United States specialty crop growers ask Congress 

to let the IR–4 Project continue to do the excellent job it has done for the past 49 

years. 

The following commodity associations/grower groups support the above written 

testimony: 

(WHILE LOOKING AT THIS LIST, CONSIDER THE BREADTH OF CROPS, REGIONS AND

STATES REPRESENTED)

Ag Matters, LLC 

American Farm Bureau Federation 

American Mushroom Institute 

American Nursery & Landscape 

Association 

Ball Horticultural Company 

California Apple Commission 

California Asparagus Commission 

California Blueberry Commission 

California Garlic and Onion Research 

Advisory Board 

Cherry Marketing Institute, Inc. 

Center for Applied Horticultural 

Research 

Cranberry Institute 

Dill Growers of Oregon and Washington 

Engage Agro USA 

Essex County Fruit Growers 

Florida Blueberry Growers Association 
218 

Florida Fruit and Vegetable Association 

Florida Strawberry Growers Association 

Ginseng board of Wisconsin 

Great Lakes IPM, Inc. 

Hawleys Florist 

Hoogasian Flowers, Inc. 

Hop Growers of Washington, Inc. 

Hop Growers of American, Inc. 

Idaho Grain Producers Association 

Idaho Hop Commission 

Idaho Hop Growers Association 

Idaho Sugar Beet Growers Association, 

Inc. 

Iwasaki Bros, Inc. 

Kona Perfect Estate Grown Coffee 

Lavender Growers of Oregon 

Maine Vegetable & Small Fruit Growers 

Association 

Massachusetts Fruit Growers 

Association 

MGB Marketing 

Meister Media Worldwide-Publisher of: 

American Western Fruit Grower 

American Vegetable Grower 

Florida Grower 

Greenhouse Grower 

CropLife 

Michigan Asparagus Advisory Board 

Michigan Cherry Committee 

Michigan Mint Growers Association 

Minor Crop Farmers Alliance 

Mint Industry Research Council 

Montana Mint Committee 

Nash Produce 

National Asparagus Council 

National Barley Growers Association 

National Greenhouse Manufacturers 

Association 

National Onion Association 

National Potato Council 

National Watermelon Growers 

Association 

NC Commercial Blackberry & Raspberry 

Growers Association 

NC Pickles Packers Association 

NH Vegetable & Small Fruit Growers 

Association 

New England Vegetable & Berry 

Growers Association 

North American Blueberry Council 

North American Greenhouse/Hothouse 

Vegetable Growers Association 

North American Strawberry Growers 

Association 

North California Garlic & Onions 

Growers 

North Carolina Blueberry Council 

North Carolina Nursery & Landscape 

Association 

North Carolina Strawberry Association 

Oregon Blueberry Commission 

Oregon Essential Oil Growers League 

Oregon Fine Fescue Commission 

Oregon Hop Commission 

Oregon Mint Commission 

Oregon Ryegrass Commission 

Oregon Seed Council 

Oregon Tall Fescue Commission 

Pacific Northwest Christmas Tree 

Association 

Pacific Northwest Vegetable Association 

Pickle Packers International 

Rudd Farm 

Society of American Florists 

Texas Citrus Mutual 

Texas Vegetable Association 

Tulelake Growers Association Mint 

Research Advisory Committee 

U.S. Apple Association 

U.S. Dry Pea & Lentil Council 

U.S. Hop Industry Plant Protection 

Committee 

Washington Asparagus Commission 

Washington Blueberry Commission 

Washington Hop Commission 

Washington Mint Growers Association 

Washington Red Raspberry Commission 

Washington State Commission on 

Pesticide Registration 

Western Alfalfa Seed Growers 

Association 

Wisconsin Mint Industry 

Wisconsin Muck Farmers Association 

PREPARED STATEMENT OF THE METROPOLITAN WATER DISTRICT OF SOUTHERN

CALIFORNIA

The Metropolitan Water District of Southern California (Metropolitan) encourages 

the Subcommittee’s support for fiscal year 2013 Federal funding of about $18 million from the U.S. Department of Agriculture’s Environmental Quality Incentives 

Program for the Colorado River Basin Salinity Control Program. 

The concentrations of salts in the Colorado River cause approximately $300 million in quantified damages in the lower Colorado River Basin States each year and 

significantly more in unquantified damages. Salinity concentrations of Colorado 

River water are lower than at the beginning of Program activities by over 100 milligrams per liter (mg/L). Modeling by the U.S. Bureau of Reclamation indicates that 

the quantifiable damages would rise to more than $500 million by the year 2030 

without continuation of the Colorado River Basin Salinity Control Program (Program). 

Water imported via the Colorado River Aqueduct has the highest level of salinity 

of all of Metropolitan’s sources of supply, averaging around 630 mg/L since 1976, 

which leads to economic damages. For example, damages occur from: 
219 

—A reduction in the yield of salt sensitive crops and increased water use for 

leaching in the agricultural sector; 

—A reduction in the useful life of galvanized water pipe systems, water heaters, 

faucets, garbage disposals, clothes washers, and dishwashers, and increased use 

of bottled water and water softeners in the household sector; 

—An increase in the cost of cooling operations, and the cost of water softening, 

and a decrease in equipment service life in the commercial sector; 

—A decrease in the life of treatment facilities and pipelines in the utility sector; 

—Difficulty in meeting wastewater discharge requirements to comply with National Pollutant Discharge Elimination System permit terms and conditions, 

and an increase in desalination and brine disposal costs due to accumulation 

of salts in groundwater basins, and fewer opportunities for recycling due to 

groundwater quality deterioration; and 

—Increased use of imported water for leaching and the cost of desalination and 

brine disposal for recycled water. 

Concern over salinity levels in the Colorado River has existed for many years. To 

deal with the concern, the International Boundary and Water Commission approved 

Minute No. 242, Permanent and Definitive Solution to the International Problem of 

the Salinity of the Colorado River in 1973, and the President signed into law the 

Colorado River Basin Salinity Control Act in 1974 (Act). High total dissolved solids 

in the Colorado River as it enters Mexico and the concerns of the seven Colorado 

River Basin States regarding the quality of Colorado River water in the United 

States drove these initial actions. To foster interstate cooperation and coordinate the 

Colorado River Basin States’ efforts on salinity control, the seven Basin States 

formed the Colorado River Basin Salinity Control Forum. 

The salts in the Colorado River system are indigenous and pervasive, mostly resulting from saline sediments in the Basin that were deposited in prehistoric marine 

environments. They are easily eroded, dissolved, and transported into the river system, and enter the River through both natural and anthropogenic sources. 

The Program reduces salinity by preventing salts from dissolving and mixing with 

the river’s flow. Irrigation improvements (sprinklers, gated pipe, lined ditches) and 

vegetation management reduce the amount of salt transported to the Colorado 

River. Point sources such as saline springs are also controlled. The Federal Government, Basin States, and contract participants spend over $40 million annually on 

salinity control programs. 

The Program, as set forth in the act, benefits both the Upper Colorado River 

Basin water users through more efficient water management and the Lower Basin 

water users, hundreds of miles downstream from salt sources in the Upper Basin, 

through reduced salinity concentration of Colorado River water. California’s Colorado River water users are presently suffering economic damages in the hundreds 

of millions of dollars per year due to the river’s salinity. 

These Federal dollars will be augmented by the State cost sharing of 30 percent 

with an additional 25 percent provided by the agricultural producers with whom the 

U.S. Department of Agriculture contracts for implementation of salinity control 

measures. Over the past years, the Colorado River Basin Salinity Control program 

has proven to be a very cost effective approach to help mitigate the impacts of increased salinity in the Colorado River. Continued Federal funding of this important 

Basin-wide program is essential. 

Metropolitan urges the Subcommittee to support funding for fiscal year 2013 of 

about $18 million from the U.S. Department of Agriculture’s Environmental Quality 

Incentives Program for the Colorado River Basin Salinity Control Program. 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF COUNTY AND CITY HEALTH

OFFICIALS

The National Association of County and City Health Officials (NACCHO) is the 

voice of the approximately 2,800 local health departments across the country. City, 

county, metropolitan, district, and tribal health departments work every day to ensure the safety of the water we drink, the food we eat, and the air we breathe. Local 

health departments work with State, local, and national partners to prevent, identify, and respond to outbreaks of foodborne illness. 

The Nation’s current financial challenges are compounded by those in State and 

local governments further diminishing the ability of local health departments to address community health and safety needs. Repeated rounds of budget cuts and layoffs continue to erode local health department capacity. NACCHO surveys have 

found that since 2008, local and State health departments have lost 52,000 jobs due 

to budget reductions. In the area of food safety, that means there are fewer inspec-
220 

tors and trained food safety and food service professionals—from restaurants and 

school cafeteria workers to street fair vendors—able to identify risks and prevent 

foodborne illness. 

Local health departments have wide ranging responsibilities including measuring 

population-wide illness and organizing efforts to prevent disease and prolong quality 

of life. In the area of food safety, local health department responsibilities are focused 

on preventing foodborne illness and investigating the cause and spread of illness. 

Local health departments represent two-thirds of the 3,000 State, local and tribal 

agencies that have primary responsibility to regulate the more than 1 million food 

establishments in the United States. 

Despite the best efforts of public officials, over 48 million cases of preventable 

foodborne illness occur every year in this country. Many of these cases cause pain 

and suffering, high medical bills, disability, lost productivity, lower life expectancy 

and death. Foodborne illness causes an estimated 128,000 hospital visits and 3,000 

deaths annually. Foodborne illness has significant costs associated with direct medical expenses, lost productivity, and decreased revenue for food manufacturers and 

retail establishments. Salmonella, which causes 1 million cases of foodborne illness, 

costs $365 million a year in direct medical expenses. The 2009 salmonella outbreak 

saw a double digit decline in the amount of peanut products purchased. 

In 2011, the United States experienced the deadliest foodborne illness outbreak 

in 90 years, an outbreak of listeria in cantaloupe that killed 32 people and infected 

146 people in 28 States. This outbreak was quickly contained and the loss of life 

limited because of coordinated action between local, State and Federal public health 

agencies, including local and State health departments. 

Local health departments are on the front lines conducting food safety inspections 

and have the expertise to educate food handlers in their communities. Local health 

departments inspect restaurants, grocery stores, daycare facilities, hospitals, 

schools, and some food manufacturing plants to ensure safe food handling practices 

and sanitary conditions. Local health departments investigate citizen complaints 

and when necessary, will take action to ensure that a food establishment complies 

with sanitation standards. 

In 2010, Congress passed the Food Safety Modernization Act (FSMA), which recognized the importance of protecting the public from foodborne illness and the need 

to strengthen our current system for prevention of these costly illnesses. In the 21st 

century, our global food supply system is more complex than ever before and has 

an increased risk of accidental or intentional contamination. In FSMA, the Federal 

Government made a commitment to foster coordination and increase capacity at the 

local, State and Federal level to prevent and respond to foodborne illness. The return on Federal investment in food safety training, surveillance and investigation 

capacity can be measured in improved health and lower health care costs and lost 

productivity. In fiscal year 2012, Congress made a down payment on the implementation of FSMA by providing $39 million. NACCHO recommends Congress take further steps in fiscal year 2013 to fully implement FSMA and fund the Food and Drug 

Administration’s food safety programs as outlined below. 

FOOD AND DRUG ADMINISTRATION—CENTER FOR SAFETY AND APPLIED NUTRITION

NACCHO Request: $1.0 Billion 

President’s Fiscal Year 2013 Budget: $1.0 Billion 

Fiscal Year 2012: $883 Million 

FDA’s Center for Safety and Applied Nutrition (CFSAN) supports partnerships at 

the local, State and Federal level to protect consumers from, and quickly respond 

to and track, foodborne illness outbreaks. CFSAN also oversees the food safety 

training program which helps to maintain uniform standards in food inspection and 

the retail food safety initiative which provides best practices for retail food handlers. 

A national food safety training system, including a certification system, will ensure that officials at all levels of government have consistent, up-to-date knowledge, 

as well as the necessary skills, to do their jobs. Without a robust national training 

system, there is less capacity to consistently and continuously improve knowledge 

and skills based on the latest science and risk assessments. It is crucial that regulators and public health partners have the appropriate knowledge and training to 

carry out their duties to safeguard the public from foodborne illness. Food safety 

training requires continued funding to increase capacity and adequately train our 

Nation’s food protection workers. 

FDA’s dedicated retail food safety initiative supports research and distribution of 

technologies that prevent, mitigate, or detect foodborne illness hazards in the retail 

environment. FDA resources allow local health departments to learn about and 
221 

adopt best practices for prevention of foodborne illness in the retail setting and to 

utilize products developed by FDA to educate the public and food service workers 

in their communities. 

As you draft the fiscal year 2013 Agriculture-Rural Development—FDA Appropriations bill, we urge consideration of these recommendations for FDA programs 

that are critical to ensuring the safety of our Nation’s food supply and protecting 

our Nation’s people. 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF STATE ENERGY OFFICIALS

Chairman Kohl and Ranking Member Blunt, I am David Terry, Executive Director of the National Association of State Energy Officials (NASEO) 

(dterry@naseo.org), and I am testifying in support of funding for the energy title of 

the farm bill. Specifically, we support funding of at least $39 million in discretionary 

funds for the Rural Energy for America (REAP) program (Section 9007 of the farm 

bill), in addition to any mandatory funding. The REAP program was created in the 

2002 farm bill and it has been a huge success. Over 9,600 energy efficiency and renewable energy projects have been implemented in every State since 2003. With a 

required $3 match of non-Federal funds for every Federal dollar invested in REAP, 

over $1.6 billion in matching funds have been provided. This program has specifically benefitted farmers, ranchers and rural small businesses. NASEO members 

work directly with eligible entities, as well as State agricultural agencies and rural 

interests to promote this successful program. Rising oil and distillate prices have 

made this program even more important. 

NASEO represents the energy offices in the States, territories and the District of 

Columbia. The REAP program, and the other critical programs in the energy title 

of the farm bill, helps create jobs, increases agricultural productivity, saves energy 

for farmers, ranchers and rural small businesses, generates energy, promotes use 

of alternative fuels, reduces our dependence on imported petroleum and saves 

money in rural America. The cost is very low and the payback is very high. REAP 

is about rural economic development. 

We urge your support for the REAP program. 

PREPARED STATEMENT OF THE NATIONAL COMMODITY SUPPLEMENTAL FOOD

PROGRAM ASSOCIATION

Mister Chairman and Subcommittee members, thank you for this opportunity to 

present information regarding the USDA/FNS Commodity Supplemental Food Program (CSFP). 

The National Commodity Supplemental Food Program Association (NCSFPA) requests the Senate Agriculture Appropriations Subcommittee fund CSFP for fiscal 

year 2013 at $191,935,000; $186,935,000 as requested by the U.S. Department of 

Agriculture, an additional $5 million to begin CSFP operations in six States (Connecticut, Hawaii, Idaho, Maryland, Massachusetts, and Rhode Island) with USDAapproved plans. Additionally, the subcommittee should note that current States requested approximately 116,350 additional slots to meet the rising demand for nutritional assistance among our vulnerable senior population. 

CSFP is a unique program because it brings together Federal and State agencies, 

along with public and private entities. In fiscal year 2011, the CSFP provided services through 150 nonprofit community and faith-based organizations at 1,800 sites 

located in 39 States, the District of Columbia, and two Indian Tribal Organizations 

(Red Lake, Minnesota and Oglala Sioux, South Dakota). 

In fiscal year 2011, 97 percent of all CSFP recipients were low-income seniors. 

Our association has proposed as part of the next farm bill fully converting the program into a seniors-only program, allowing sufficient time for those mothers and 

children to transition off CSFP. 

USDA purchases specific nutrient-rich foods at wholesale prices, including canned 

fruits and vegetables, juices, meats, fish, peanut butter, cereals, grain products, 

cheese and dairy products from American farmers. State agencies provide oversight, 

contract with community and faith-based organizations to warehouse and distribute 

food, certify eligibility and educate participants. Local organizations build broad collaboration among nonprofits, health units, and area agencies for effective access to 

these supplemental foods as well as nutrition education to improve participants’ 

health and quality of life. This partnership reaches even homebound seniors in both 

rural and urban settings with vital nutrition and remains an important ‘‘market’’ 

for commodities supported under various farm programs. 
222 

CSFP continues to be a testimony to the power of community partnerships between faith-based organizations, farmers, private industry and Government agencies. The CSFP offers a unique combination of advantages that are unparalleled by 

any other food assistance program: 

—The CSFP specifically targets one our Nation’s most nutritionally vulnerable 

populations: low-income seniors (but association is suggesting that this becomes 

senior-only project, so don’t mention children?). 

—The CSFP provides a monthly selection of food packages tailored to the specific 

nutritional needs of seniors. The nutritional content of the food provided has 

improved with the introduction of low-fat cheese, whole grain products, canned 

fruits packed in fruit juice or extra light syrup, and low-salt canned vegetables. 

—The CSFP purchases foods at wholesale prices, directly supporting American farmers. The average cost of a CSCP food package is estimated at $19.85 while 

the retail value is $50. 

—The CSFP involves the entire community. Thousands of volunteers and private 

companies donate money, equipment, and most importantly time and effort to 

deliver food to needy and homebound seniors. These volunteers not only bring 

food but companionship and other assistance to seniors who might have limited 

support systems. 

In the most recent CSFP survey, more than half of seniors living alone reported an income of less than $750 per month. One-half of respondents from two-person 

households reported an income under $1,000 per month. Twenty-five percent were 

enrolled in the Supplemental Nutrition Assistance Program (SNAP) and 50 percent 

said they ran out of food during the month. Seventy percent of senior respondents 

said they choose between medicine and food. 

The Senate Agriculture Appropriations Subcommittee has consistently supported 

CSFP, acknowledging that it is a cost-effective way of providing nutritious supplemental foods. While USDA’s budget request will provide adequate resources for our 

monthly caseload of 599,380 seniors, mothers, and children—a reduction from the 

604,931 packages USDA was able to support in fiscal year 2011—we urge the Subcommittee to strongly consider our request for increased funding to allow six additional States to begin providing nutritional assistance to their vulnerable seniors. 

CSFP and other nutrition programs such as SNAP are only supplemental programs by design. Together they cover a shortfall that many seniors face each month. 

These programs must have support to meet the increasing need as part of the ‘‘safety net’’. 

According to the 1997 report by the National Policy and Resource Center on Nutrition and Aging at Florida International University, Miami—Elder Insecurities: 

Poverty, Hunger, and Malnutrition, malnourished elderly patients experience 2 to 

20 times more medical complications, have up to 100 percent longer hospital stays, 

and incur hospital costs $2,000 to $10,000 higher per stay. Proper nutrition promotes health, treats chronic disease, decreases hospital length of stay and saves 

healthcare dollars. America is aging. CSFP must be an integral part of Senior Nutrition Policy and plans to support the productivity, health, independence and quality of life for America’s seniors, many of whom now need to continue working at 

least part-time beyond retirement age to afford basics. 

CSFP recipients believe this is a very significant and vital program; our belief is 

supported by agency and recipient testimonials. An Arkansas recipient tells us that 

they would not be able to eat the balanced meals that CSFP provides each month. 

Arkansas program operators talk about the importance of interaction between seniors and program staff, saying this interaction is very important for the well-being 

of recipients, and recipients are able to live more stable, self-sufficient lives as a result. Colorado participants say that they would not be able to have juice and cereal 

without CSFP, and many appreciate the program because they are homebound, and 

that there are 100 clients on the waiting list in El Paso County. Seniors in St. 

Louis, Missouri, say that CSFP foods help them get through to their next checks. 

Participants in Nebraska say that they don’t know what they would do without this 

food, calling the program a ‘‘lifesaver’’. New Hampshire participants tell us that 

they use CSFP as a primary source of nutrition each month and would see a dramatic loss in food availability without the program. One Wisconsin recipient said 

that they would starve without the program, while others said that CSFP on their 

limited income meant that they could pay their telephone and electric bills. 

These anecdotes represent just a small portion of those affected, but it highlights 

the deep and rising need we are seeing in communities across the country. Whether 

urban, suburban, or rural—we have seen dramatic rises in the demand from the 

community—and have become more limited in available resources. With an evergrowing senior population living on fixed incomes, there has never been a more 

pressing time to fund this vital program. 
223 

The CSFP is supported by committed grassroots operators and dedicated volunteers with a mission to provide quality nutrition assistance economically, efficiently, 

and responsibly always keeping the needs and dignity of our participants first. We 

commend the Food Distribution Division of Food and Nutrition Service of the Department of Agriculture for their continued innovations to strengthen the quality of 

the food package and streamline administration. 

PREPARED STATEMENT OF THE NATIONAL ORGANIC COALITION

Chairman Kohl, Ranking Member Blunt, and Members of the Subcommittee: My 

name is Steven Etka. I am submitting this testimony on behalf of the National Organic Coalition (NOC) to detail our fiscal year 2013 funding requests for USDA programs of importance to organic agriculture. 

The NOC is a national alliance of organizations working to provide a voice for 

farmers, environmentalists, consumers, cooperative retailers and others involved in 

organic agriculture. The current members of NOC are the Beyond Pesticides, Center 

for Food Safety, Equal Exchange, Food and Water Watch, Maine Organic Farmers 

and Gardeners Association, Midwest Organic and Sustainable Education Service, 

National Cooperative Grocers Association, Northeast Organic Dairy Producers Alliance, Northeast Organic Farming Association–Interstate Policy Council, Organically 

Grown Company, Organic Seed Alliance, Rural Advancement Foundation International–USA, and the Union of Concerned Scientists. 

USDA/AGRICULTURAL MARKETING SERVICE (AMS)

National Organic Program 

Request: 9.896 Million 

Sales of organic food and beverages have experienced a rapid growth over the last 

decade, averaging nearly 20 percent per year. Despite the recession, organic sales 

grew at a rate of 5 percent in 2009 and 8 percent in 2010. In 2011, the organic sector experienced a 9.5 percent growth rate. The National Organic Program (NOP) is 

the agency charged with regulating and enforcing the USDA organic label. For 

years, the rapid growth of the organic industry has far outpaced the resources provided to the NOP, which has greatly limited the ability of NOP to fulfill its regulatory and enforcement role credibly. 

Fortunately, both Congress and the Administration responded with an increase in 

funding in fiscal years 2009 and 2010 to meet these needs. In the final fiscal year 

2011 Continuing Resolution cuts were made to AMS overall, and funding levels for 

individual AMS programs were left to the discretion of the agency. The resulting 

NOP funding level for fiscal year 2011 is $6.919 million. 

We are requesting for $9.896 million for the NOP, which is the same level requested by the Administration’s fiscal year 2012 budget, representing an increase 

of $2.98 million over current levels. The Administration’s fiscal year 2013 level-funding request for NOP does not adequately address the needs of this rapidly growing 

sector. Increased funding is needed to accelerate the review and amendment of program standards and regulations to reflect industry and consumer expectations 

through a transparent and participatory process; improve the consistency in certifier 

application of the standards; and improve timeliness and effectiveness of enforcement actions to protect organic integrity. 

USDA (AMS, ERS, NASS)

Organic Data Initiative 

Request: $300,000 for AMS Price Report; Report Language for NASS Organic 

Production Survey, and ERS Organic Data Analysis 

Authorized by Section 7407 of the 2002 Farm Bill, the Organic Production and 

Marketing Data Initiative states that the ‘‘Secretary shall ensure that segregated 

data on the production and marketing of organic agricultural products is included 

in the ongoing baseline of data collection regarding agricultural production and marketing.’’ Section 10302 of the Farm, Conservation, and Energy Act of 2008 amends 

the provision to provide mandatory funding, and to authorize $5 million annually 

in discretionary funding. 

As the organic industry matures and grows at a rapid rate, the lack of national 

data for the production, pricing, and marketing of organic products has been an impediment to further development of the industry and to the effective functioning of 

many organic programs within USDA. The organic data collection and analysis effort at USDA has made significant strides in recent years, but remains in its in-
224 

fancy. Because of the multi-agency nature of data collection within USDA, organic 

data collection and analysis must also be undertaken by several different agencies 

within the Department. 

In 2008, NASS conducted the first-ever comprehensive Organic Production Survey 

as a follow-on survey to the 2007 Census of Agriculture. Published in February 

2010, the survey has provided information vital to the organic sector’s growth and 

to the U.S. Department of Agriculture. The Organic Production Survey should be 

conducted on a regular basis to properly assess the characteristics, trends, and 

changes in the sector. 

The Administration’s fiscal year 2013 budget proposes to address organic data collection needs within the overall budget request for the data collection agencies. 

However, we are requesting that report language be included in the fiscal year 2013 

report to clearly specify the organic data collection efforts within AMS, ERS and 

NASS. Specifically, we are requesting report language identifying $300,000 for AMS 

organic price reporting, level with fiscal year 2012 funding. In addition, we are requesting report language urging NASS to undertake the necessary planning to conduct an Organic Production Survey on an on-going 5-year cycle, as a follow-on survey to the Census of Agriculture, starting in 2013; and for ERS to continue its organic data analysis efforts. 

USDA/NATIONAL INSTITUTE OF FOOD AND AGRICULTURE (NIFA)

Organic Transitions Program 

Request: $5 Million 

The Organic Transition Program, authorized by Section 406 of the Agricultural 

Research, Education and Extension Reform Act (AREERA) for Integrated Research 

Programs, is a research grant program that helps farmers surmount some of the 

challenges of organic production and marketing. As the organic industry grows, the 

demand for research on organic agriculture is experiencing significant growth as 

well. The benefits of this research are far-reaching, with broad applications to all 

sectors of agriculture, even beyond the organic sector. Yet funding for organic research is minuscule in relation to the relative economic importance of organic agriculture and marketing in this Nation. 

The Organic Transition Program was funded at levels ranging between $2.1 and 

$1.8 million during the period of fiscal year 2003 through fiscal year 2009, received 

an increase to $5 million in fiscal years 2010, and $4 million in fiscal years 2011 

and 2012. The Administration’s fiscal year 2013 budget requested level funding. We 

are requesting $5 million to restore the program to its fiscal year 2010 level. 

Agriculture and Food Research Initiative (AFRI) 

Request: Report language on Conventional/Classical Plant and Animal Breeding 

In recent decades, public resources for classical plant and animal breeding have 

dwindled, while resources have shifted toward genomics and biotechnology, with a 

focus on a limited set of major crops and breeds. This problem has been particularly 

acute for organic and sustainable farmers, who seek access to germplasm well suited 

to their unique cropping systems and their local environment. 

Since fiscal year 2005, the Senate Agriculture Appropriations Subcommittee has 

included report language raising concerns about this problem, and urging CSREES 

(now NIFA) to give greater consideration to research needs related to classical plant 

and animal breeding when setting priorities within the National Research Initiative 

(now AFRI). 

In Section 7406 of the Food, Conservation, and Energy Act of 2008, the National 

Research Initiative was merged with the Initiative for Future Agriculture and Food 

Systems to become the Agriculture and Food Research Initiative (AFRI). Congress 

included language within AFRI to make ‘‘conventional’’ plant and animal breeding 

a priority for AFRI research grants, consistent with the concerns expressed by the 

Appropriations Committee in preceding appropriations cycles. 

Despite the many years of Senate report language and the 2008 Farm Bill language on this matter, research proposals for classical breeding that have sought 

AFRI funding in recent years have been consistently denied. Of the 127 AFRI-funded projects in 2009, 2010, and 2011 related to plant breeding and genomics, there 

was only one project that could truly be classified as classical breeding, which was 

a 2010 grant to Kansas State University for $210,000. Of the 59 AFRI-funded 

projects in animal breeding, fertility and genomics, there appear to be no classical 

animal breeding projects funded at all. 
225 

It is becoming clear that unless a separate AFRI subgrant category dedicated to 

classical plant and animal breeding and the development of public cultivars is created, the 2008 Farm Bill classical breeding requirement and concerns stated in 

years of Senate report language will not be adequately addressed. 

We are requesting strong report language from the Subcommittee to reiterate that 

the funding for classical plant and animal breeding and pubic cultivar development 

should be a priority area within the AFRI program, and urging that a separate and 

distinct RFA be created within AFRI to address this critical need. Specifically, we 

are requesting the following report language in the AFRI section of the Committee 

report: 

The Committee believes that funding for classical plant and animal breeding that 

results in finished public cultivars and breeds should be a priority area within the 

AFRI program, and urges the agency to create a separate and distinct RFA within 

AFRI to address this critical need. 

Sustainable Agriculture Research and Education (SARE) 

Request: $30 Million ($18 Million for Research and Education Grants, $7 Mil- lion for the Federal-State Matching Grant Program, and $5 Million for 

Extension and Outreach Grants) 

The SARE program has been very successful in funding on-farm research on environmentally sound and profitable practices and systems, including organic production. The reliable information developed and distributed through SARE grants have 

been invaluable to organic farmers. The President’s budget requests $22.7 million 

for SARE program for fiscal year 2013, including $3.5 million to start the FederalState Matching Grant program. We are requesting $18 million for research and education grants, $7 million for Federal-State Matching Grant program, and $5 million 

for extension and outreach. 

USDA/RURAL BUSINESS COOPERATIVE SERVICE

Appropriate Technology Transfer for Rural Areas (ATTRA) 

Request: $3 Million 

ATTRA, authorized by Section 6016 on the Food, Conservation, and Energy Act 

of 2008, is a national sustainable agriculture information service, which provides 

practical information and technical assistance to farmers, ranchers, Extension 

agents, educators and others interested and active in sustainable agriculture. 

ATTRA interacts with the public, not only through its call-in service and website, 

but also provides numerous excellent publications written to help address some of 

the most frequently asked questions of farmers and educators. Much of the realworld information provided by ATTRA is extremely helpful to both the conventional 

and organic communities, and is available nowhere else. As a result, the growth in 

demand for ATTRA services has increased significantly, both through the websitebased information services and through the growing requests for workshops. 

Funding for ATTRA was completely eliminated in the fiscal year 2011 Continuing 

Resolution, greatly jeopardizing information transfer to farmers seeking the most 

up-to-date scientific and practical information about sustainable farmers systems, 

but was funded at $2.25 million in fiscal year 2012. The President’s fiscal year 2013 

budget requests level funding ($2.25 million) for ATTRA. We are requesting $3 million for fiscal year 2013, to help meet the growing demand from farmers for up-todate, science-based information. 

USDA/AGRICULTURE RESEARCH SERVICE (ARS)

Classical Plant and Animal Breeding Activities 

Request: $9.03 Million 

As noted above in the AFRI section of this request, public resources for classical 

plant and animal breeding have dwindled in recent decades, and as a result, our 

capacity for public breeding in at a critical point. While USDA’s statutory obligation 

to address this problem through the AFRI competitive grant program remains 

strong, ARS also has an obligation in this regard. Although ARS has the resources 

and expertise to help reverse this dangerous trend, the agency has not made a concerted effort in this regard. 

We are requesting $9 million for ARS classical plant and animal breeding efforts, 

to be utilized in a manner similar to that described in the Administration’s fiscal 

year 2011 budget request (pages 16–19 and 16–29 of USDA’s fiscal year 2011 Budget Justification document), which called for an increase of $4.289 million for ‘‘crop 

breeding to enhance food and production security’’ and other $4.75 million for ‘‘crop 
226 

protection to enhance food and production security,’’ with a clear focus on classical 

plant and animal breeding activities. With the change in leadership at USDA, the 

Administration’s fiscal year 2012 and 2013 requests for ARS have failed to reiterate 

this request. However, we believe the fiscal year 2011 ARS request for this research 

was well stated, and urge the Subcommittee to provide funding for this critical ARS 

activity. 

Thank you for your consideration of these fiscal year 2013 funding priorities. We 

look forward to working with the Subcommittee throughout this year’s appropriations process. 

PREPARED STATEMENT OF THE NATIONAL RURAL HOUSING COALITION

On behalf of the National Rural Housing Coalition (NRHC), I would like to thank 

the Subcommittee for the opportunity to submit testimony on fiscal year 2013 appropriations for Department of Agriculture (USDA) Rural Housing Programs. I 

strongly urge this Subcommittee to fund USDA Rural Housing programs at the 

higher of fiscal year 2012 levels or the President’s fiscal year 2013 budget request: 

(1) $900 million for Section 502 Family Direct Homeownership Loans; (2) $28 million for Section 504 Very-Low Income Rural Housing Repair Loans; (3) $29.5 million 

for Section 504 Very-Low Income Rural Housing Repair Grants; (4) $26 million for 

Section 514 Farm Labor Housing Program Loans; (5) $9 million for Section 516 

Farm Labor Housing Program Grants; (6) $64.5 million for Section 515 Rural Rental 

Housing Program; (7) $907 million for Section 521 Multi-Family Rental Housing 

Rental Assistance Program; (8) $30 million for Section 523 Self-Help Housing Program: (9) $3.6 million for Section 533 Housing Preservation Grants Program; (10) 

$150 million for Section 538 Guaranteed Multi-Family Housing Loans; (11) $46.9 

million for the Multi-Family Housing Preservation and Revitalization Program; and 

(12) $13 million for the Rural Community Development Initiative. 

NRHC is a national membership organization consisting of housing developers, 

nonprofit housing organizations, State and local officials, and housing advocates. 

Since 1969, NRHC has promoted and defended the principle that rural people have 

the right, regardless of income, to a decent, affordable place to live, clean water, and 

basic community services. 

Housing Needs in Rural America 

Even in strong economic times, the needs of rural America are too often overlooked. And, although our most recent economic crisis pushed these many of these 

communities to the brink, their needs continue to be neglected by the mainstream 

media, traditional sources of capital, and Federal policymakers. For example, although nearly 20 percent of the population lives in rural communities, other Federal 

agencies consistently overlook their unique housing needs; less than 7 percent of the 

Federal Housing Administration assistance, 10 percent of Veterans Affairs programs, and 12 percent of Section 8 Rental Assistance serves rural areas. 

Rural communities have severe housing and development needs. With some of the 

Nation’s lowest incomes, rural communities are four times more likely to have at 

least 20 percent of their population living in poverty. About 98 percent of ‘‘consistently poor counties’’ are rural, as are nearly all communities with inadequate drinking water. As a result, rural families are far more likely to live in substandard housing or be overburden by rent. Housing in rural America is simply too expensive relative to household income, overcrowded, or lacks certain basic facilities. 

Despite the overwhelming need for safe, clean, and affordable housing in rural 

America, Congress has consistently cut funding for the very programs specifically 

tailored to meet this need. And now, President Obama has proposed significant cuts 

to the Section 502 Direct Loan and Self-Help Housing programs, and the elimination of the Section 515 Rural Rental Housing program. Because these programs 

overwhelmingly serve our most vulnerable residents—lower income families, the elderly, and persons with disabilities, these cuts will only make it harder for low-income, rural Americans to access safe, decent, affordable housing. As such, I would 

like to focus my testimony on how these programs are critical to meeting the needs 

of rural families. 

Section 502 Single-Family Direct Homeownership Loans 

Over 60 years, the Section 502 Direct Loan Program has helped more than 2.1 

million families realize the American Dream and build their wealth by more than 

$40 billion. Despite the program’s success, demand for Section 502 loans continues 

to outpace supply. Over 25,000 loan applications—amounting to more than $2 billion—are currently on Section 502 waiting lists. 
227 

No other Federal home ownership program can match the profile of the families 

served under Section 502. It is the only Federal homeownership program that is exclusively targeted to very low- and low-income rural families. By law, at least 40 

percent of Section 502 funds must be used to assist families earning less than 50 

percent of the area median income. Two-thirds borrowers have incomes less than 

60 percent of AMI, with an average income less than $27,000. 

Despite serving families with limited economic means, Section 502 is the single, 

most cost-effective Federal housing program, period. On average, each Section 502 

loan costs less than $7,200 over its entire lifetime. Compare that to the average Section 8 Housing Assistance payment, which costs taxpayers nearly $7,000 each year. 

Although some have suggested that the Section 502 Guarantee Program can serve 

as an adequate alternative, this is simply untrue. Unlike the Direct Loan program, 

the Guarantee program overwhelmingly serves higher-income individuals—with an 

average income of nearly twice that of Direct Loan families—leaving rural communities with the greatest credit needs without any alternative. Even the USDA has 

held that the guarantee program is the worst-targeted of all its rural development 

guarantees, with loans going to larger, wealthier communities. Likewise, the guarantee program does not provide interest rate subsidies. This defect will become even 

more harmful when interest rates return to normal levels. 

Section 523 Mutual Self-Help Housing 

The Self-Help Housing program adapts the rural tradition of barn-raising to provide housing opportunities for families with limited economic means. Through this 

program, more than 3,500 families have been able to realize the American Dream 

in the past 3 years. This construction has led to over 11,000 jobs, more than $738 

million in local income and $77 million in taxes and revenue in rural communities 

across the country. If the President’s budget is approved by Congress, Self-Help 

Housing will be cut to its lowest funding in more than 30 years, decimating the network of over 100 Self-Help organizations over 37 States and deserting 50,000 families currently on their waiting lists. 

Self-Help Housing is the only Federal program that combines ‘‘sweat equity’’ 

homeownership opportunities with technical assistance and affordable loans for 

America’s rural families. Self-Help Housing families work nights and weekends to 

provide 65 percent of the construction labor on their own and each other’s homes. 

In doing so, families earn equity, decrease construction costs, and make lasting investments in their community. The hallmark of the Self-Help Housing program is 

its emphasis on hard work, self-reliance, and community. 

This program is exclusively targeted to very low- and low-income families who are 

otherwise unable to access decent housing. Over half of the participants are minorities. Although these families have lower incomes, default rates are significantly 

lower than other borrowers. Section 515 Rural Rental Housing 

Section 515 is the principal source of financing for rental housing in rural communities. Today, more than 500,000 families live in housing financed by Section 515. 

If approved by Congress, the President’s budget will end a 40-year effort to improve 

the quality of rural housing, leaving seniors, low-income families, and those with 

disabilities even more vulnerable. 

Rental units developed with Section 515 loans are exclusively targeted to very 

low-, low-, and moderate-income families, the elderly, and persons with disabilities. 

A vast majority—94 percent—of Section 515 tenants have very-low incomes. The average yearly income is only $11,000. Some 57 percent these households are elderly 

or disabled, 26 percent are headed by persons of color, and 73 percent are headed 

by women. 

Demand for affordable, rural rental housing continues to outpace supply. More 

than 7.8 million rural residents—including 19 percent of all rural children—live in 

poverty. Almost 1 million rural renters live in substandard housing. Yet, despite its 

success and increased demand, Section 515 funding has been cut drastically, stalling 

the production of new units and the preservation of existing ones. 

Conclusion 

Providing adequate funding for USDA Rural Housing programs is essential to efforts to improve the quality of life and economic opportunity in rural America. These 

programs are all part of the toolbox that USDA employs address the shortfall in decent, clean, and affordable housing in these communities. For a very small fraction 

of the USDA’s budget, Congress can provide affordable rental and homeownership 

opportunities to thousands of rural families with limited means and boost flagging 

economies in small communities. 

Thank you for this opportunity to submit this statement. 
228 

PREPARED STATEMENT OF THE NATIONAL SUSTAINABLE AGRICULTURE COALITION

Thank you for the opportunity to present our fiscal year 2013 funding requests. 

NSAC is a national alliance of over 90 organizations that advocates for policies that 

support the economic, social, and environmental sustainability of agriculture, natural resources, and rural communities. Our USDA requests are as follows, in the 

order they appear in the appropriations bill. 

Departmental Administration 

Office of Advocacy and Outreach.—The Office of Advocacy and Outreach coordinates policy and outreach in two vital areas—small and beginning farmers, and socially disadvantaged or minority farmers. It administers the Outreach and Technical 

Assistance for Socially Disadvantaged Farmers and Ranchers program and the 

Farm Labor Grants program. We support USDA’s request for $1.4 million for the 

OA&O. 

National Institute of Food and Agriculture 

Sustainable Agriculture Research and Education Program (SARE).—We urge you 

to fund this innovative competitive grants program at $30 million, divided among 

research and education grants ($18 million), extension and professional development 

grants ($5 million), and Federal-State matching grants ($7 million). SARE has 

helped turn farmer-driven research, education, and extension initiatives into profitable and environmentally sound practices for over 20 years. 

Organic Transitions Integrated Research Program.—We request $5 million to 

maintain the funding level established in fiscal year 2010 and in USDA’s fiscal year 

2012 request. Maintaining the fiscal year 2010 funding level will allow cooperation 

with natural resource programs to provide environmental solutions with strong 

farmer delivery mechanisms built in. Without full funding, organic research will fall 

further behind in its fair share of the research budget, a share that continues to 

lag behind trends in agriculture. 

National Food Safety Training, Education, Extension, Outreach, and Technical Assistance.—We request $10 million to help small and mid size farms and small processing facilities comply with new food safety regulations. This food safety training 

for farmers and small processors, authorized in the Food Safety Modernization Act 

of 2010, is one of the best, quickest, and least costly ways to improve food safety 

outcomes without resorting to excessive regulation. 

Agricultural Marketing Service 

Federal-State Market Improvement Program (FSMIP).—The FSMIP provides 

matching funds to State departments of agriculture to help grantees increase marketing efficiency and innovation, reduce costs, stabilize food prices, and support local 

and regional food marketing opportunities. NSAC supports the USDA request of 

$1.3 million. 

Organic Market Reporting.—NSAC requests level funding at $0.3 million for AMS 

for this price data collection and reporting initiative. As the organic industry surpasses $30 billion a year in sales, this multi-agency initiative is vital to maintaining 

markets, creating risk management tools, and negotiating equivalency agreements 

with foreign governments. We also support baseline funding for NASS and ERS to 

continue coordinated data collection and reporting on organic production, marketing, 

and pricing, including NASS funding for the Organic Production Survey. 

Farm Service Agency 

Direct Farm Ownership and Operating Loans—(Program Levels).—Direct loans 

provide a crucial source of capital for beginning farmers and others not well served 

by commercial credit. The final fiscal year 2011 continuing resolution cut direct 

farm ownership loan funding by $175 million and the fiscal year 2012 bill retained 

this lower level. Nearly $130 million worth of qualified applications were turned 

away in fiscal year 2011. In light of the increasing age of farmers and the challenges 

faced by beginning farmers, it is critical that we fund these direct loan programs 

in the most effective way possible. We ask that Congress appropriate sufficient 

funds to provide for program levels of $600 million for Direct Farm Ownership loans 

and $1,050 million for Direct Operating Loans. 

Beginning Farmer and Rancher Individual Development Account (IDA) Program.—We urge you to provide $5 million for this program, as authorized in the 

2008 farm bill. This competitive grants program enables low-income, limited resource beginning farmers and ranchers to open an IDA (matched savings account) 

to save for asset-building purchases, including farmland, equipment, breeding stock, 

or similar expenditures. A 50 percent local match is required. 
229 

Natural Resources Conservation Service 

Conservation Technical Assistance (CTA).—CTA, a subset of Conservation Operations, supports farmers enrolling in financial assistance programs and helps farmers with conservation planning and implementation. CTA also funds assessment of 

conservation practices and systems that underpin the conservation programs, as 

well as NRCS collection, analysis, and dissemination of information on the condition 

of the Nation’s natural resources. NSAC urges you to provide $740 million for CTA 

in order to adequately support and maximize the effectiveness of conservation financial assistance. We also support the addition of report language encouraging a modest net increase in the percentage of farm bill mandatory funding that may be used 

for technical assistance. 

Rural Business and Cooperative Service 

Value-Added Producer Grants (VAPG).—VAPG offers grants to farmers and 

ranchers developing new farm and food-related businesses that boost farm income, 

create jobs, and increase rural economic opportunity. VAPG grants encourage the 

kind of entrepreneurship in agriculture that enables farms and communities to survive economically. Moreover, growing interest in local and regional foods is generating greater demand for mid-tier value chains and enterprises that aggregate local 

production, exactly the kind of rural development strategy VAPG is designed to support. We request VAPG funding of $30 million. 

Rural Microentrepreneur Assistance Program (RMAP).—RMAP provides business 

training, technical assistance, and loans to owner-operated businesses with up to 10 

employees. Small businesses make up 90 percent of all rural businesses, and microbusinesses are the fastest growing segment in many areas. RMAP creates jobs and 

local markets and alleviates poverty. This program was stripped of its mandatory 

farm bill funding (only $3 million) in fiscal year 2012. NSAC requests $5.7 million 

in discretionary funding in fiscal year 2013 and opposes any limitation to renewed 

or extended direct Farm Bill spending for RMAP. 

Appropriate Technology Transfer for Rural Areas (ATTRA).—The ATTRA program, also known as the National Sustainable Agriculture Information Service, provides critical support to farmers and Extension agents throughout the country. The 

national program was reauthorized by the 2008 farm bill. We urge $3 million for 

fiscal year 2013. 

General Provisions 

Repeated annual cuts the Conservation Stewardship Program, Environmental 

Quality Incentives Program, and other mandatory conservation programs have created enormous backlogs among highly qualified producers and made it more difficult 

for farmers to maintain healthy, productive soil and to protect water and other natural resources. These programs provide critical public benefits such as clean water, 

erosion reduction, and carbon sequestration and act as a key piece of the farmer 

safety net. We strongly oppose the proposed cuts to these critical conservation programs. We also oppose changes in mandatory program spending to any existing, renewed, or extended farm bill direct spending for the Organic Agriculture Research 

and Extension Initiative, Beginning Farmer and Rancher Development Program, 

Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers, Farmers’ Market Promotion Program, National Organic Certification Cost-Share Program, Community Food Grants, and Rural Energy for America Program. 

Finally, we oppose any limitation to full implementation of the Packers & Stockyards rule on fair competition that Congress directed USDA to promulgate in the 

2008 farm bill. 
230 

SUMMARY OF NSAC’S FISCAL YEAR 2013 REQUESTS 

[Dollars in millions] 

Fiscal year 2012 USDA 2013 request NSAC 2013 request 

Departmental Administration: Office of Advocacy and Outreach ................................... $1.2 ........................................................ $1.4 ........................................................ $1.4 National Institute of Food and Agriculture: 

Sustainable Agriculture Research and Education Program ................................... $14.5 (research & education) ∂ $4.7 

(extension) = $19.2.

$14.5 ∂ $4.7 ∂ $3.5 (Federal-State 

matching grants) = $22.7.

$18.0 ∂ $5.0 ∂ $7.0 = $30 total 

Organic Transitions Program .................................................................................. $4.0 ........................................................ $4.0 ........................................................ $5.0 National Food Safety Training, Education, Extension, Outreach and Technical 

Assistance (Authorized by Congress in the Food Safety Modernization Act of 2010).

................................................................ ................................................................ $10.0 

Agricultural Marketing Service: 

Federal-State Market Improvement Program ......................................................... $1.2 ........................................................ $1.3 ........................................................ $1.3 Organic Market Reporting ......................................................................................

We also support continued baseline funding for NASS and ERS to continue coordinated data collection and reporting on organic production, 

marketing, and pricing, including NASS funding for the Organic Production Survey.

$0.3 ........................................................ Funding for this activity included in 

top line request.

$0.3 

Farm Service Agency: 

Direct Farm Ownership and Operating Loans—(Program Levels) ........................ $475.0 ∂ $1,050.0 .............................. $475.0 ∂ $1,050.0 .............................. $600.0 ∂ $1,050.0 Beginning Farmer Individual Development Account (IDA) Pilot Program .............. ................................................................ $2.5 ........................................................ $5.0 

Natural Resources Conservation Service: Conservation Technical Assistance ............... $729.5 .................................................... $728.8 .................................................... $740.0 Rural Business and Cooperative Service: 

Value-Added Producer Grants ................................................................................ $14.0 ...................................................... $15.0 ...................................................... $30.0 Rural Microentrepreneur Assistance Program ........................................................ $0.0 ($3.0 CHIMP ∂ $0 discretionary). $3.7 (discretionary) ............................... $5.7 ($5.7 discretionary ∂ no CHIMP/ limitation on 2012 farm bill direct 

funding) 

National Sustainable Agriculture Information Service (ATTRA) ............................. $2.25 ...................................................... $2.25 ...................................................... $3.0 
231 

General Provisions: Conservation Stewardship Program ................................................

We also oppose changes in mandatory program spending (CHIMPS) for: other 

directly funded farm bill conservation programs; and any existing, renewed or extended mandatory farm bill spending for the Organic Agriculture Research and Extension Initiative, Beginning Farmer and Rancher Development Program, Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers, Farmers’ Market Promotion Program, National Organic Certification Cost-Share Program, Community Food Grants, and Rural Energy for America Program.

We oppose any limitation to full implementation of the Packers & Stockyards 

rule on fair competition that Congress directed USDA to promulgate in the 2008 farm bill.

$768.5 ($75.5 CHIMP) ........................... $972.0 ($68.0 approx. CHIMP; permanent cut of 759,632 acres). No CHIMP/limitation on farm bill direct spending 
232 

PREPARED STATEMENT OF THE NORTHWEST REGIONAL HOUSING AUTHORITY

USDA Rural Development funding for these programs needs to be funded to at 

least the level of 2012. Section 502 Direct Program should be at $900 million or 

more and the Section 523 funding needs to be maintained at $30 million. The 502 

Direct Program is the only Federal homeownership program that is exclusively targeted to very low- and low-income rural families. In the past 60 years this program 

has helped more than 2.1 million families build wealth and achieve the American 

dream of homeownership. By law 40 percent of 502 Direct Loan funds must be used 

to assist families earning less than 50 percent of area median income. 25,000 loan 

applications are currently on a waiting list for Section 502 loan funding. 

The Section 523 program helps organizations to provide training, supervision and 

technical assistance to families. Families work nights and weekends providing construction labor on their own and each other’s homes to decrease construction costs 

increase equity and build wealth. Every 100 homes built on this program results 

in 324 jobs, $21.1 million in local income and $2.2 million in tax revenue. Even 

though Self-Help families have lower income, default rates are significantly lower 

than other borrowers. More than 50,000 families are currently on Self-Help Housing 

waiting lists. Each family that builds a Self-Help home makes many sacrifices. 

Throughout the process and after all the hard work they will say, yes, it was worth 

it. It does not make sense to let these programs deteriorate to the point of extinction. 

Thank you for the opportunity to address these issues today. 

PREPARED STATEMENT OF THE OREGON WATER RESOURCES CONGRESS

The Oregon Water Resources Congress (OWRC) strongly supports the U.S. Department of Agriculture’s (USDA) Natural Resources Conservation Service (NRCS) 

and is deeply concerned about reductions to programs important to our members for 

fiscal year 2013. OWRC is requesting that funding for several key NRCS programs 

be increased for fiscal year 2013 and that the ‘‘Bridging the Headgates’’ MOU between NRCS and the Bureau of Reclamation be reactivated and expanded to include 

other Federal agencies. 

OWRC was established in 1912 as a trade association to support district member 

needs to protect water rights and encourage conservation and water management 

statewide. OWRC represents non-potable agricultural water suppliers in Oregon, 

primarily irrigation districts, as well as other special districts and local governments 

that deliver irrigation water. The association represents the entities that operate 

water management systems, including water supply reservoirs, canals, pipelines, 

and hydropower production. 

Need 

OWRC and its members believe conservation of natural resources through collaborative partnerships is crucial to ensuring the viability of irrigation districts and 

similar organizations that deliver irrigation water for the Nation’s agriculture. Federal support of water conservation activities funded through NRCS programs including the Agricultural Watershed Enhancement Program (AWEP) and the Cooperative 

Conservation Partnership Initiative (CCPI) are essential to the conservation of our 

natural resources and critical to protecting our food, energy and water supply. Irrigation districts and other agricultural water users in Oregon have used these programs to develop collaborative projects with Federal, State, and other local entities—proving that on-the-ground conservation can be best achieved by leveraging 

partnerships, pooling available resources, and focusing on each partner’s strengths. 

We are deeply disappointed that the NRCS budget for fiscal year 2013 is a 13 

percent decrease from fiscal year 2012 estimated budget levels. While we recognize 

that the administration has increased funding for some of the NRCS programs, the 

need for additional financial assistance with conservation projects still far outweighs 

the budget. NRCS programs are essential to irrigation districts in developing and 

implementing conservation projects that benefit not only the individual farmers they 

serve but also the entire watershed and community as a whole. Furthermore, conservation projects also benefit the economy through job creation and ensuring the 

future viability of American agriculture. OWRC is requesting that funding for 

AWEP be increased to at least $75 million, which is comparable to the enacted fiscal 

year 2011 levels but is still far less than what could be used in Oregon and nationally. 
233 

AWEP and CCPI Needs 

AWEP and CCPI help fill a funding void for multi-partner conservation projects. 

Often large conservation projects do not include individual on-farm projects which 

limits the effectiveness of the project. AWEP and CCPI allow farmers to pool together and leverage the dollars invested in the off-farm project with the addition 

of EQIP on-farm projects. Because of the large number of successful project applications for AWEP, USDA will have to obligate a large amount of the annual $60 million appropriation to existing multiyear projects. It is important that the funding 

for these projects not be interrupted so that they may be completed. However, it is 

equally important to have funding available for new eligible AWEP and CCPI 

projects that simultaneously benefit the environment and economy. 

Bridging the Headgates MOU and Watershed Planning Needs 

The need for continued coordination among Federal agencies, including NRCS, the 

Bureau of Reclamation (BOR), Bureau of Land Management (BLM), Environmental 

Protection Agency (EPA), NOAA Fisheries, U.S. Fish and Wildlife Service, and 

Army Corps of Engineers (ACOE), is a significant issue. With the loss of watershed 

planning funding, reactivating and expanding this program to other Federal agencies would be a very cost-effective alternative. 

In the past, Oregon NRCS used a watershed resources planning team to conduct 

Rapid Watershed Assessments throughout Oregon. This planning program helped 

prioritize projects to bring about the most benefit in critical watersheds. The use 

of the Rapid Watershed Assessment has been instrumental in getting on-the-ground 

conservation projects completed in a timely manner. A number of NRCS funded district projects have been implemented using the data from this program. 

Following in the vein of the Rapid Watershed Assessments, Oregon has adopted 

a Strategic Approach to Conservation. The goal is to invest technical and financial 

resources to strategically solve natural resource problems and be more effective, efficient, and accountable for staffing, funding and partnerships. The process builds 

from the ongoing planning process utilizing existing conservation plans, watershed 

assessments; conservation agencies, organizations, groups and producers to develop 

consensus on overarching 5–10 years local goals and priorities for conservation; including vision, resource inventories, resource problems, desired outcomes, other Government/NGO partners interests and contributions. This is a method to prioritize 

and develop detailed strategies to address natural resource problems. This strategy 

is intended to accelerate the conservation implementation and leverage technical 

and financial resources required to solve the problem. These types of program activities are effective tools that need a consistent funding source. 

Program Benefits 

OWRC strongly supports AWEP and CCPI, which are both critical tools for districts and other agricultural water suppliers in developing and implementing water 

and energy conservation projects in Oregon. AWEP has been highly successful in developing cooperative approaches on a basin-wide scale. This program allows districts 

and other agricultural water suppliers to partner with farmers to address regional 

water quantity and quality issues in local watersheds. 

The CCPI allows partnerships to be formed with Federal, State and local interests 

to address Endangered Species Act (ESA) and Clean Water Act (CWA) issues in watershed basins and sub basins. We believe that water supply issues in Oregon and 

elsewhere in the Nation can be resolved best locally in cooperative partnership efforts that promote conservation with a more aggressive Federal funding partnership 

as defined in AWEP and CCPI. In the spirit of streamlining farm bill programs, 

OWRC would support combining AWEP and CCPI into one program, but only if the 

current authorized funding is maintained or increased for the two programs combined. OWRC strongly supports the continuation and increased funding of the 

AWEP and CCPI programs for fiscal year 2013. 

Examples of Successful AWEP Projects in Oregon 

Oregon has had several successful AWEP applicants over the past several years, 

three from our member districts (described below). The full list of Oregon projects 

can be found on the Oregon NRCS website at: http://www.or.nrcs.usda.gov/programs/ 

awep/index.html. 

—The Whychus Creek/Three Sisters Irrigation District Collaborative Restoration 

Project focuses on irrigation water efficiency with irrigation improvements in 

the Upper Division of the Three Sisters Irrigation District, which is the project 

partner. The effort will improve stream flows and water quality for native fish 

while providing farmers a reliable supply of water. Fiscal year 2012 funding: 

$251,300 (AWEP). 
234 

—The Talent Irrigation District Project works with agricultural producers to install conservation practices that will properly utilize limited surface water resources, improve water quality on flood irrigated land by converting to more efficient irrigation systems, and apply irrigation water management to eliminate 

irrigation runoff. Fiscal year 2012 funding: $4,470 (AWEP). 

—The Willow Creek Project helps landowners in the Lower Willow Creek Watershed portion of Malheur County convert to water-saving irrigation systems, reduce irrigation runoff, and improve water quality in Willow Creek and Malheur 

River. The project partner is the Vale Oregon Irrigation District. Fiscal year 

2012 funding: $251,300 (AWEP). 

In 2012 Oregon requested approximately $3.1 million for project funding but only 

received $2.4 million for existing AWEP approved projects. Oregon also requested 

approximately $3.2 million of CCPI funds and received $3 million. Each year local 

interest has increased to compete for AWEP and CCPI funding and additional innovative projects like the ones above could be developed and implemented in Oregon 

if more funding is made available. 

The projects above are just a few examples of how NRCS programs have been successfully used in Oregon to develop and implement collaborative multi-benefit conservation projects. In the future, OWRC would also like to see additional funding 

targeted for projects that conserve both water and energy—which are two key and 

complimentary resource areas for the agricultural community. In Oregon, NRCS is 

helping develop the Save Water, Save Energy Initiative, a multi-agency cooperative 

effort to develop a clearinghouse of information on financial incentives and technical 

expertise to assist districts and their water users in implementing conservation 

measures. Supporting projects like the pilot project being implemented in the 

Deschutes Basin will provide the groundwork for future Save Water, Save Energy 

projects and help maximize Federal investment in conservation efforts. 

Conclusion 

Our member districts, the farms and other water users they serve, and the communities in which they are located benefit greatly from the NRCS programs described in our testimony. Oregon’s agricultural community is actively committed to 

water conservation programs, but those programs require Federal participation if 

the agricultural community is to be able to continue its efforts to address Oregon’s 

water supply needs through water conservation. These valuable programs are essential tools in not only conserving natural resources but also in leveraging Federal, 

State, local partnerships and resources to implement important projects that would 

otherwise be unrealized. Increasing the budget for NRCS programs is a strategic investment that will pay both environmental and economic dividends to Oregonians 

and America as a whole. 

Thank you for the opportunity to provide testimony for the record on the proposed 

fiscal year 2013 budget for the U.S. Department of Agriculture. 

PREPARED STATEMENT OF THE ORGANIC FARMING RESEARCH FOUNDATION

The Organic Farming Research Foundation (OFRF) is a national, farmer-led nonprofit organization that fosters the improvement and widespread adoption of organic 

farming systems. Organic agriculture is one of the fastest growing sectors of American agriculture, creating jobs in rural areas and keeping farmers in business. In 

2011, the organic sector grew by 9.5 percent; the sector experienced double-digit 

growth before the economic recession and has maintained positive growth since. Ensuring the continued growth and job creation ability of the organic sector requires 

upholding the integrity of the U.S. Department of Agriculture organic label and continuing the modest but important investment in organic agriculture. The following 

requests are for national programs authorized by Congress in past farm bills. The 

agencies included in the requests are all at the U.S. Department of Agriculture 

(USDA): National Institute of Food and Agriculture (NIFA), Agricultural Marketing 

Service (AMS), Rural Business—Cooperative Service (RBCS). The programs are the 

Organic Transitions Integrated Research Program (ORG) at $5 million, the Sustainable Agriculture Research and Education Program (SARE) at $30 million, the National Organic Program (NOP) at $10 million, the Organic Production and Market 

Data Initiatives (ODI) at $0.3 million, and the Appropriate Technology Transfer for 

Rural Areas (ATTRA) at $3 million. We present sensible, modest requests that support a basic investment in a fast-growing, job-creating sector of agriculture. Additionally, we urge no cuts to mandatory program funding. Please read below for further details. 
235 

Organic Transitions Integrated Research Program (ORG)—USDA–NIFA 

2008 Farm Bill Authorized: Sums as Appropriate; Fiscal Year 2013 OFRF Request: $5 Million 

An investment in research underpins growth in any sector. One of the barriers 

to continued growth in organic is lack of research and information that growers 

need to improve and increase production. ORG is a national, competitive research, 

education, and extension program that provides research to the fast-growing organic 

sector. Funding ORG at $5 million would help bridge the gap between sector growth 

and research investment. 

Sustainable Agriculture Research and Education Program (SARE)—USDA–NIFA 

2008 Farm Bill Authorized: $60 Million; Fiscal Year 2013 OFRF Request: $30 

Million 

SARE is a farmer-driven and regionally led competitive research and extension 

grants program that provides farmers with business, marketing, and production information to be successful. SARE complements the activities of dedicated organic research programs by funding on-farm research. Funding SARE at $30 million would 

allow for the launch of a Federal-State Matching Grants program to build capacity 

at the State level for research and extension to address regional and local needs. 

We support splitting the funding between the Research and Education section of 

SARE ($25 million) and the Extension (or Professional Development Program) section of SARE ($5 million). 

National Organic Program (NOP)—USDA–AMS 

2008 Farm Bill Authorized: $11 Million; Fiscal Year 2013 OFRF Request: $10 

Million 

NOP enforces the national organic program standards, accredits certifiers, develops equivalency agreements, handles complaints—in essence, NOP ensures the integrity of the organic seal. NOP performs regulatory oversight of the organic label 

and ensures that consumers are getting what they pay for when they choose foods 

with the organic label. These are essential functions to the survival and growth of 

the organic sector. 

Organic Production and Market Data Initiatives (ODI)—USDA–AMS 

2008 Farm Bill Authorized: $5 Million; Fiscal Year 2013 OFRF Request: $0.3 

Million 

Every sector needs reliable, current data and statistics to function properly and 

grow. USDA has historically not collected basic data and statistics on the growing 

organic sector. In the 2008 farm bill, Congress directed USDA to collect data for organic through ODI. As the industry surpasses $32 billion, the information collected 

through this multi-agency initiative is vital to maintaining stable markets, creating 

proper risk management tools, and negotiating equivalency agreements with foreign 

governments. The request of $0.3 million for AMS is specifically to continue the collection of price data and its dissemination through Market News Reports. We also 

support continued baseline funding for NASS and ERS to continue coordinated data 

collection and reporting on organic production, marketing, and pricing, including 

NASS funding for the Organic Production Survey. 

Appropriate Technology Transfer for Rural Areas (ATTRA)—USDA–RBCS 

2008 Farm Bill Authorized: $5 Million; Fiscal Year 2013 OFRF Request: $3 

Million 

ATTRA serves farmers and ranchers nationwide by providing cutting-edge production and marketing information through web publications and a toll-free phone line. 

Authorized originally in the 1985 farm bill, ATTRA has provided technical assistance and educational resources to a broad range of farmers and agricultural professionals for over two decades. Just last year, ATTRA received over 60,000 technical 

requests, had over 5.8 million publication downloads from its website, and conducted 

workshops in 45 States that over 177,000 individuals attended. The program was 

recently zeroed out because of the mistaken assumption that the program is an earmark. ATTRA is a national program that is run according to statute by a national, 

nonprofit organization through a cooperative agreement with USDA. The classification of the program as an earmark is a mistake. 

No Cuts to Mandatory Program Spending 

OFRF urges the Subcommittee not to cut mandatory program spending. Over half 

a billion dollars in cuts have already been made to mandatory farm bill programs 
236 

(primarily conservation and energy), and we urge the Subcommittee not to make 

anymore. These cuts have negative impacts on the baseline funding available for the 

next farm bill and should not unfairly be targeted to certain sectors of agriculture. 

Thank you for the opportunity to submit testimony. Organic agriculture is a 

growth industry. Making the modest investments in the key programs described 

above will help to ensure that organic sector operations and businesses continue to 

grow, to hire new employees, and to meet the strong consumer demand for organic 

food. 

PREPARED STATEMENT OF PICKLE PACKERS INTERNATIONAL, INC. 

SUMMARY

Sustained and increased funding is desperately needed to maintain the research 

momentum built over recent years and to defray rising fixed costs at laboratory facilities. Companies in the pickled vegetable industry generously participate in funding and performing short-term research, but the expense for long-term research 

needed to insure future competitiveness is too great for individual companies to 

shoulder on their own. 

Additional Budget Requests for Fiscal Year 2013 

Funding needs for four USDA/ARS laboratories are as follows: 

REQUESTS FOR PROGRAM ENHANCEMENT—PICKLED VEGETABLES 

Amount 

Emerging Disease of Crops ................................................................................................................................. $500,000 

Quality and Utilization of Agricultural Products & Food Safety ......................................................................... 500,000 

Applied Crop Genomics ........................................................................................................................................ 500,000 

Specialty Crops .................................................................................................................................................... 550,000 

Total Program Enhancements Requested—Pickled Vegetables ............................................................ 2,050,000 

USDA/ARS Research Provides 

Consumers with over 150 safe and healthful vegetable varieties providing vitamins A, C, folate, magnesium, potassium, calcium, and phytonutrients such as antioxidant carotenoids and anthocyanins. 

Genetic resistance for many major vegetable diseases, assuring sustainable crop production with reduced pesticide residues—valued at nearly $1 billion per year in 

increased crop production. 

Classical plant breeding methods combined with bio-technological tools, such as 

DNA marker-assisted selection and genome maps. 

New vegetable products with economic opportunities amidst increasing foreign 

competition. 

Improved varieties suitable for machine harvesting, assuring post harvest quality 

and marketability. 

Fermentation and acidification processing techniques to improve the efficiency of 

energy use, reduce environmental pollution, and reduce clean water intake while 

continuing to assure safety and quality of our products. 

Methods for delivering beneficial microorganisms in fermented or acidified vegetables, and produce reduced sodium, healthier products. 

New technology and systems for rapid inspection, sorting and grading of pickling 

vegetable products. 

Health and Economical Benefits 

Health agencies continue to encourage increased consumption of fruits and vegetables, useful in preventing heart disease, cancer, stroke, diabetes and obesity. 

Vegetable crops, including cucumbers, peppers, carrots, onions, garlic and cabbage 

(sauerkraut), are considered ‘‘specialty’’ crops and not part of commodity programs 

supported by taxpayer subsidies. 

Current farm value for just cucumbers, onions and garlic is estimated at $2.4 billion with a processed value of $5.8 billion. These vegetables are grown and/or manufactured in all 50 States. 

The pickled vegetable industry strongly supports and encourages your committee 

in its work of maintaining and guiding the Agricultural Research Service. To accomplish the goal of improved health and quality of life for the American people, the 

health action agencies of this country continue to encourage increased consumption 
237 

of fruits and vegetables in our diets. Accumulating evidence from the epidemiology 

and biochemistry of heart disease, cancer, diabetes and obesity supports this policy. 

Vitamins (particularly A, C, and folic acid), minerals, and a variety of antioxidant 

phytochemicals in plant foods are thought to be the basis for correlation’s between 

high fruit and vegetable consumption and reduced incidence of these debilitating 

and deadly diseases. 

As an association representing processors that produce over 85 percent of the tonnage of pickled vegetables in North America, it is our goal to produce new products 

that increase the competitiveness of U.S. agriculture as well as meet the demands 

of an increasingly diverse U.S. population that is encouraged to eat more vegetables. 

The profit margins of growers continue to be narrowed by foreign competition. This 

industry can grow by meeting today’s lifestyle changes with reasonably priced products of good texture and flavor that are high in nutritional value, low in negative 

environmental impacts, and produced with assured safety from pathogenic microorganisms and from those who would use food as a vehicle for terror. With strong 

research to back us up, we believe our industry can make a greater contribution toward reducing product costs and improving human diets and health for all economic 

strata of U.S. society. 

Many small to medium sized growers and processing operations are involved in 

the pickled vegetable industry. We grow and process a group of vegetable crops, including cucumbers, peppers, carrots, onions, garlic, cauliflower, cabbage (sauerkraut) and brussels sprouts, which are referred to as ‘‘minor’’ crops. None of these 

crops are in any ‘‘commodity program’’ and do not rely on taxpayer subsidies. However, current farm value for just cucumbers, onions and garlic is $2.4 billion with 

an estimated processed value of $5.8 billion. These crops represent important 

sources of income to farmers and rural America. Growers, processing plant employees and employees of suppliers to this industry reside in all 50 States. To realize 

its potential in the rapidly changing American economy, this industry will rely upon 

a growing stream of appropriately directed basic and applied research from four important research programs within the Agricultural Research Service. These programs contribute directly to top research priorities that the Research, Education, 

and Economics Mission Area (REE) of the USDA has identified in that they develop 

vegetable crop germplasm and preservation technology that contributes to improved 

profitability with reduced pesticide inputs in a safer, higher quality product grown 

by rural farm communities across the United States, consequently improving food 

security and food safety. Improved germplasm, crop management practices and processing technologies from these projects have measurably contributed to the profitability, improved nutritional value and increased consumption of affordable vegetable crops for children and adults in America and around the world. 

VEGETABLE CROPS RESEARCH LABORATORY, MADISON, WISCONSIN

The USDA/ARS Vegetable Crops Research Lab at the University of Wisconsin is 

the only USDA research unit dedicated to the genetic improvement of cucumbers, 

carrots, onions and garlic. Three scientists in this unit account for approximately 

half of the total U.S. public breeding and genetics research on these crops. Their 

past efforts have yielded cucumber, carrot and onion cultivars and breeding stocks 

that are widely used by the U.S. vegetable industry (i.e., growers, processors, and 

seed companies). These varieties account for over half of the farm yield produced 

by these crops today. All U.S. seed companies rely upon this program for developing 

new varieties, because ARS programs seek to introduce economically important 

traits (e.g., pest resistances and health-enhancing characteristics) not available in 

commercial varieties using long-term high risk research efforts. The U.S. vegetable 

seed industry develops new varieties of cucumbers, carrots, onions, and garlic and 

over 20 other vegetables used by thousands of vegetable growers. Their innovations 

meet long-term needs and bring innovations in these crops for the United States 

and export markets, for which the United States has successfully competed. 

Scientists in this unit have developed genetic resistance for many major vegetable 

diseases that are perhaps the most important threat to sustained production of a 

marketable crop for all vegetables. Genetic resistance assures sustainable crop production for growers and reduces pesticide residues in our food and environment. 

Value of this genetic resistance developed by the vegetable crops unit is estimated 

at $670 million per year in increased crop production, not to mention environmental 

benefits due to reduction in pesticide use. New research in Madison has resulted 

in cucumbers with improved disease resistance, pickling quality and suitability for 

machine harvesting. New sources of genetic resistance to viral and fungal diseases, 

tolerance to environmental stresses, and higher yield have recently been identified 

along with molecular tools to expedite delivery of elite cucumber lines to U.S. grow-
238 

ers. A new genetic resistance to nematode attack was found to almost completely 

protect the carrot crop from one major nematode. Baby carrots were founded on 

germplasm developed in Madison, Wisconsin. Carrots provide approximately 30 percent of the U.S. dietary vitamin A. New carrots have been developed with tripled 

nutritional value, and nutrient-rich cucumbers have been developed with increased 

levels of provitamin A. The genetic bases of onion flavor, as well as compounds that 

enhance cardiovascular health and have anti-carcinogenic effects have been determined and are being used to develop onions that are more appealing and healthier 

for consumers. 

There are still serious vegetable production problems which need attention. For 

example, losses of cucumbers, onions, and carrots in the field due to attack by 

pathogens and pests remains high, nutritional quality needs to be significantly improved and U.S. production value and export markets should be enhanced. Genetic 

improvement of all the attributes of these valuable crops are at hand through the 

unique USDA lines and populations (i.e., germplasm) that are available and the new 

biotechnological methodologies that are being developed by the group. The achievement of these goals will involve the utilization of a wide range of biological diversity 

available in the germplasm collections for these crops. Classical plant breeding 

methods combined with bio-technological tools such as DNA marker-assisted selection and genome maps of cucumber, carrot and onion will be used to implement 

these genetic improvements. With this, new high-value vegetable products based 

upon genetic improvements developed by our USDA laboratories can offer vegetable 

processors and growers expanded economic opportunities for United States and export markets. 

FOOD SCIENCE RESEARCH UNIT, RALEIGH, NORTH CAROLINA

The USDA/ARS Food Science Research Unit (FSRU) in Raleigh, North Carolina 

is the major public laboratory that this industry looks to for new scientific information on the safety of our products and development of new processing technologies 

related to fermented and acidified vegetables. The scientists in the FSRU have consistently provided innovative solutions to processing challenges which have helped 

this industry remain competitive in the current global trade environment. Major accomplishments of the FSRU include: pasteurization treatments currently used for 

most acidified vegetables; the preservation technology used for manufacturing shelf 

stable sweet pickles; fermentation technology (purging) used to prevent the formation of air pockets within fermented pickles. These innovations have improved processing and product quality and yielded significant savings industry-wide. Furthermore, the FSRU has determined the microbial safety parameters now used for acidified vegetable process filings, as required by the Food and Drug Administration. The 

picking industry in the United States relies on the FSRU for the development of 

new and improved technologies that will increase the economic value of processed 

vegetable products, provide consumers with safe, high quality, healthful vegetable 

products, and reduce the environmental impact of industrial activities. Additional 

funding is needed to support important new research initiatives. 

First, nearly all retail pickled vegetables are pasteurized for safety and shelf stability. Current steam and water bath pasteurizers rely on technology from the 1940s 

and 1950s. Promising new technologies include continuous flow microwave technology and ‘‘hot-fill-and-hold’’ pasteurization. The objective is to reduce water use 

and significantly improve energy efficiency with new, scientifically validated thermal processing technology. 

Second, additional research that offers significant economic and environmental 

advantages to the U.S. industry includes the reduction or replacement of salt in 

commercial vegetable fermentations. Calcium substitution of salt in commercial vegetable fermentations has the potential to eliminate salt disposal problems and create opportunities to manufacture calcium enriched, reduced sodium, healthier vegetable products. Reducing environmental impact and production costs for the manufacture of healthier products is essential to the sustainability of the U.S. industry. 

Third, there is a growing body of research indicating that certain beneficial microorganisms (probiotics) improve human health by remaining in the intestinal tract 

after they are consumed. New processing technology is needed to develop high value 

probiotic vegetable products, opening new markets in the United States and improving the health benefits derived from consumption of fermented and acidified vegetables. 

SUGAR BEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

Quality inspection and assurance of pickling vegetables is critical to growers and 

processors and ultimately consumers of pickling vegetables. While automated sys-
239 

tems are currently used in many pickle processing facilities, they are only for inspecting product surface quality characteristics. Opportunities exist for developing 

more efficient sensors and automated inspection technologies, especially for internal 

quality assessment and grading of pickling vegetables and pickled products. Moreover, labor required for postharvest handling and processing operations represents 

a significant portion of the total production cost. New and/or improved inspection 

technologies can help growers and processors assess, inspect and grade pickling 

vegetables and pickled products rapidly and accurately for internal and external 

quality characteristics so that they can be directed to, or removed from, appropriate 

processing or marketing avenues. This will minimize postharvest losses of food that 

has already been produced, ensure high quality, consistent final product and enduser satisfaction, and reduce production cost. 

The USDA/ARS Sugarbeet and Bean Research Unit at East Lansing, Michigan, 

provides national leadership in research and development of innovative technologies 

and systems for assessing and assuring quality and marketability of tree fruits and 

pickling vegetables and enhancing production efficiency. Over the years, the Unit 

has developed a number of innovative engineering technologies for rapid, nondestructive measurement and inspection of postharvest quality of tree fruits and 

vegetables, including a novel spectral scattering technology for assessing the texture 

and flavor of fruits, a portable fruit firmness tester, and a spectral property measuring instrument for quality evaluation of fruits and vegetables. Recently, it also developed an advanced hyperspectral imaging system for automated detection of internal and external quality of pickling cucumbers and pickles. Research at East Lansing will continue to provide the pickling vegetable industry a vital source of innovative inspection and grading technology to assure high-quality safe products to the 

marketplace and achieve labor cost savings. It is critical that additional resources 

be provided to support and expand the existing program to effectively address the 

technological needs for the pickling industry. 

U.S. VEGETABLE LABORATORY, CHARLESTON, SOUTH CAROLINA

Research at the USDA/ARS U.S. Vegetable Laboratory in Charleston, South Carolina, addresses national problems confronting the vegetable industry of the southeastern United States. The mission of the laboratory is to develop disease and pest 

resistant vegetables, and also new, reliable, environmentally sound disease and pest 

management practices that do not rely on conventional pesticides. The laboratory’s 

program currently addresses 14 crops, including those in the cabbage, cucumber, 

and pepper families, all of major importance to the pickling industry. Research at 

this ARS facility is recognized world-wide, and its accomplishments include over 150 

new vegetable varieties and many improved management practices. 

Expansion of the Charleston program would directly benefit the southeastern vegetable industry. Vegetable growers depend heavily on synthetic pesticides to control 

diseases and pests. Cancellations of many effective pesticides directly impacts future 

vegetable crop production. Without the use of certain pesticides, producers will experience crop failures unless other effective, non-pesticide control methods are readily 

identified. In this context, the research on improved, more efficient and environmentally compatible vegetable production practices and genetically resistant varieties at the U.S. Vegetable Laboratory continues to be absolutely essential. Research 

like this can help provide U.S. growers with a competitive edge they must have to 

sustain and keep their industry vibrant, allowing it to expand in the face of increasing foreign competition. Current cucumber varieties are highly susceptible to a new 

strain of the downy mildew pathogen; this new strain has caused considerable damage to commercial cucumber production in some South Atlantic and Midwestern 

States during the past 5 years, and a new plant pathologist position at the U.S. 

Vegetable Laboratory could address this critical situation. 

FUNDING NEEDS FOR THE FUTURE

It remains critical that funding continues the forward momentum in pickled vegetable research that the United States now enjoys and to increase funding levels as 

warranted by planned expansion of research projects to maintain U.S. competitiveness. We also understand that discretionary funds are now used to meet the rising 

fixed costs associated with each location. Additional funding is needed at the Wisconsin and South Carolina programs for genetic improvement of crops essential to 

the pickled vegetable industry, and at North Carolina and Michigan for development 

of environmentally sensitive technologies for improved safety and value to the consumer of our products. The fermented and acidified vegetable industry is receptive 

to capital investment in order to remain competitive, but only if that investment is 

economically justified. The research needed to justify such capital investment in-
240 

volves both short term (6–24 months) and long term (2–10 years or longer) commitments. The diverse array of companies making up our industry assumes responsibility for short-term research, but the expense and risk are too great for individual 

companies to commit to the long-term research needed to insure future competitiveness. The pickled vegetable industry currently supports research efforts at Wisconsin and North Carolina and anticipates funding work at South Carolina and 

Michigan as scientists are put in place. Donations of supplies and processing equipment from processors and affiliated industries have continued for many years. 

It is important to note that fiscal year 2012 funding for four USDA ARS laboratories (Charleston, South Carolina; East Lansing, Michigan; Madison, Wisconsin; 

and Raleigh, North Carolina) totaled $11,004,900. However, funding for all cucurbits 

equaled just $3,939,000 with only $1,718,000 directed toward pickled vegetable research. For fiscal year 2013, PPI is requesting an additional $2,050,000 in program 

enhancements that will provide needed research for pickled vegetables. 

U.S. VEGETABLE LABORATORY, CHARLESTON, SOUTH CAROLINA

There is a critical need to establish and fund a plant pathology position to address 

cucumber diseases, especially the disease caused by a new strain of the downy mildew pathogen responsible for recent extensive damage to cucumber production in 

South Atlantic and Midwestern States. The pathologist is needed to characterize 

pathogen strains and to develop new management approaches, as well as resistant 

cucumber varieties, to combat the disease. Ultimately, this proposed plant pathologist would accomplish research that results in effective protection of cucumbers from 

disease without the use of conventional pesticides. 

Amount 

Fiscal year: 

2012 (pickled vegetables) .......................................................................................................................... $456,100 

2013 (proposed budget) ............................................................................................................................. 456,100 

2013 additional request (plant pathologist and support) ......................................................................... 500,000 

FOOD SCIENCE RESEARCH UNIT, RALEIGH, NORTH CAROLINA

The current funding includes research and development for a variety of vegetable 

products, including fermented and acidified vegetables. To carry out new research 

initiatives to reduce energy and water use, reduce environmental impact from commercial fermentations, and develop new health-promoting food (probiotic) technology, we request additional support for the Food Science Research Unit of 

$500,000 in fiscal year 2013. This will provide support for Post-Doctoral or Pre-Doctoral research associates in food engineering and food microbiology along with necessary equipment and supplies to develop these new areas of research. 

Amount 

Fiscal year: 

2012 (pickled vegetables) .......................................................................................................................... $647,800 

2013 (proposed budget) ............................................................................................................................. 647,800 

2013 additional request (post-doctoral and pre-doctoral research associate and support) .................... 500,000 

VEGETABLE CROPS RESEARCH LABORATORY UNIT, MADISON, WISCONSIN

Emerging diseases, such as downy mildew of cucumber, threaten production of the 

crop in all production areas. Therefore, we request an additional $500,000 to fully 

fund the scientists and support staff in fiscal year 2013, including graduate students 

and post-doctorates for researching genetic resistance to emerging diseases. 

Amount 

Fiscal year: 

2012 (pickled vegetables) .......................................................................................................................... $456,600 

2013 (proposed budget) ............................................................................................................................. 456,600 

2013 additional request (post-doctoral and pre-doctoral research associate and support) .................... 500,000 

SUGAR BEET AND BEAN RESEARCH UNIT, EAST LANSING, MICHIGAN

The current funding is far short of the level needed to carry out research on inspection, sorting and grading of pickling cucumbers and other vegetable crops to as-
241 

sure the processing and quality of pickled products. An increase of $550,000 in the 

current base funding level would be needed to fund the research engineer position. 

Amount 

Fiscal year: 

2012 (pickled vegetables) .......................................................................................................................... $157,500 

2013 (proposed budget) ............................................................................................................................. 157,500 

2013 additional request (research engineer and support) ........................................................................ 550,000 

Thank you for your consideration and expression of support for the USDA/ARS. 

LETTER FROM THE RURAL COALITION/COALICIO ́ N RURAL, ET. AL

MARCH 30, 2012. 

Hon. HERB KOHL, Chairman, 

Hon. ROY BLUNT, Ranking Member, 

Subcommittee on Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies, Committee on Appropriations, U.S. Senate, Washington, 

DC. 

DEAR SENATORS: As the Senate considers the Agriculture Appropriation for fiscal 

year 2013, we respectfully request that the Senate Appropriations Subcommittee on 

Agriculture, Rural Development and FDA provide adequate funding for a set of critical programs that make a real difference in communities that most need support. 

The 2008 Farm Bill made significant improvements in programs designed to address the outreach and technical assistance challenges of historically underserved 

producers. We urge you to provide long-term protection and continued funding for 

this critical subset of programs and offices charged with serving the most chronically underserved segments of agriculture. These represent a fraction of the full agriculture budget but are the lifeblood of the sustainable agriculture community, beginning, socially disadvantaged and veteran producers, and farmworkers. 

We urge you to consider the following recommendations: 

Farm Credit.—Farm Service Agency (FSA) Direct Farm Ownership and Operating 

Loans provide a crucial source of capital for farmers who are ineligible for commercial credit. The final fiscal year 2011 continuing resolution cut direct farm ownership loan funding by $175 million and the fiscal year 2012 bill retained this lower 

level. Nearly $130 million worth of qualified applications were turned away in fiscal 

year 2011. This is the funding that is essential to create opportunities for individuals to get into the farming business. To meet the challenges faced by many farmers 

who are confronting increasing input costs and volatile prices, it is critical to fund 

these direct operating loan programs at the highest level possible. We ask that Congress appropriate sufficient funds to provide for program levels of $600 million for 

Direct Farm Ownership loans and $1.05 billion for Direct Operating Loans. 

We further urge you to ensure that farmers and ranchers who are in economic 

trouble receive fair loan restructuring and servicing of their loans by funding the 

Federal match for State Mediation Programs at $5 million. These programs currently operate in 40 States. We urge the Committee to instruct FSA to develop price 

information to improve eligibility and lending capabilities to farmers growing for 

local and regional food markets. 

Tribal Communities.—We urge you to support and expand funding to a level of 

$10 million for the Office of Tribal Relations Program to enhance its ability to serve 

its function as a critical link between the Department of Agriculture and the Nation’s Tribes. 

In addition, in order to provide critically needed services to tribal producers, we 

urge you to expand funding for the Federally Recognized Tribal Extension Program 

(FRTEP) to $10 million for fiscal year 2013 to reach at least 100 of the 566 tribes. 

Congress mandates research and extension services in every county in the Nation— 

over 3,100 offices nationwide, funded cooperatively by county, State, and Federal 

levels of government. Extension services are not extended to Indian Reservations, 

except through the limited Federal funds provided through USDA to the FRTEP, 

the only vehicle by which extension programs are currently delivered to Indian 

Country. Tribes contribute in-kind cost share for office space and a small portion 

of operating expenses. 

Only 36 extension agents are supported on Indian reservations with current funding of $3 million. These programs have significantly affected not only agriculture, 

but natural resources, 4–H/youth development, human nutrition, community re-
242 

source development and family and consumer sciences program areas—much like 

the impacts seen in non-reservation, county-based extension programs. The inadequate funding of FRTEP has, without question, a profound negative impact on the 

long-term viability of tribal agriculture, which remains a critical basis for the economic security, health and nutrition of Native Americans. 

Fewer than 4 percent of American Indians living on America’s Indian reservations 

have access to these programs, yet more than 97 percent of America’s counties have 

had robust programs since 1914. Increased funding would allow FRTEP to serve 

better the many tribes who have repeatedly requested full access to these programs. 

It is time that Native American producers, families, youth and reservation residents 

receive the same level of service as U.S. citizens who are not reservation-bound. In 

order to correct this grave inequity, we urge you to appropriate $10 million for this 

program in the fiscal year 2013 Agriculture Appropriation. 

Farmworker Communities.—Farmworkers are a critical component of our food and 

agriculture system. We urge you to maintain the Farmworker Coordinator in the 

Office of Advocacy and Outreach (see below), restore funding of at least $4 million 

annually for the Grants to Improve the Agricultural Labor Workforce Program, and 

provide at least $2 million to the Emergency Disaster Grants for Farmworkers program to provide funding for services to farmworkers affected by natural disasters 

and keep this critically needed workforce in place in disaster affected areas. 

Coordination Activities.—For many years, beginning and socially disadvantaged 

producers have lacked an office at USDA to better understand and utilize the wide 

array of USDA services. The Office of Advocacy and Outreach, established in the 

2008 Farm Bill, is now in full operation and working effectively with communities 

across the Nation to provide equitable access to its programs and enhance the viability and profitability of small farms, beginning farmers and ranchers, and socially 

disadvantaged farmers and ranchers, and farmworkers. An increase to $5 million 

would fund the staffing and operational needs of this office to allow OAO to adequately conduct its activities related to overseeing the Advisory Committees on Minority Farmers and Beginning Farmers and Ranchers, overseeing the activities of 

the Office of Small Farms Coordination and the Farm Worker coordinator; managing the 1890, 1994 and Hispanic-serving institutions programs; managing outreach programs and performing any other outreach functions that improve coordination among USDA agencies to improve their ability to enhance access to USDA programs for underserved constituencies. We urge Congress to provide at least $5 million to this office to allow it to continue to provide the important coordination services it is designed to deliver. 

Rural Housing.—These Federal rural housing programs provide loans, grants and 

related assistance that create jobs and ensure that low-income families live in safe, 

decent housing. Of particular importance is maintaining adequate funding levels for 

the Section 502 Direct Loan program, the Mutual Self Housing program, and programs to finance Rural Rental Housing construction and preservation. 

Under the Section 502 Direct Loan program, nearly 66 percent of the families receiving loans have incomes at or below 60 percent of area median income and 40 

percent of the loans go to households with incomes at or below 50 percent of area 

median income. In fiscal year 2011, the average total cost to the government for a 

Section 502 loan was less than $7,200 per unit 

We support funding levels for Rural Housing programs administered by the Rural 

Housing Service (RHS) at USDA at the following levels: 

—$900 million for the Section 502 Single Family Direct Homeownership Loans; 

—$28 million for the Section 504 Very Low-Income Rural Housing Repair Loans; 

—$29.5 million for the Section 504 Very Low-Income Rural Housing Repair 

Grants; 

—$26 million for the Section 514 Farm Labor Housing Program Loans; 

—$9 million for the Section 516 Farm Labor Housing Program Grants; 

—$64.5 million for the Section 515 Rural Rental Housing Program; 

—$907 million for the Section 521 Multi-Family Rental Housing Rental Assistance Program; 

—$30 million for the Section 523 Self-Help Housing Program; 

—$3.6 million for the Section 533 Housing Preservation Grants Program; 

—$150 million for the Section 538 Guaranteed Multi-Family Housing Loans; and 

—$46.9 million for the Multi-Family Housing Preservation and Revitalization Program; and $13 million for the Rural Community Development Initiative. 

Farmers Market Nutrition Programs.—We strongly urge the Committee to fund 

the WIC Farmers Market Nutrition Program at its fiscal year 2011 funded level of 

$20 million. The fiscal year 2012 cut will translate into a loss of 25 percent in the 

benefits available to eligible consumers this year who shop at our Nation’s farmers’ 

markets and roadside stands. In fiscal year 2010, 2.15 million WIC participants re-
243 

ceived FMNP benefits and over 18,000 farmers were authorized to receive them at 

3,647 farmers’ markets and 2,772 roadside stands. According to USDA’s data, this 

translated into over $15.7 million in revenue to farmers. 

Conservation Programs.—We further urge you to protect and maintain funding 

agricultural conservation programs including maintaining support for the Environmental Quality Incentive Program and the Conservation Stewardship Program, and 

other programs which are helping producers across the Nation protect their land. 

The diverse producers many of the undersigned groups represent are returning to 

USDA through these programs, and building up small operations that care for the 

land and contribute to the economic viability of small rural communities in some 

of the poorest areas of the Nation. 

Beginning Farmer and Rancher Individual Development Account (IDA) Program.—We urge you to provide $5 million for this program, as authorized in the 

2008 Farm Bill. This pilot program would enable low-income, limited resource beginning farmers and ranchers to open an IDA (matched savings account) to save for 

asset-building purchases, including farmland, equipment, breeding stock, or similar 

expenditures. 

In addition to the programs outlined in this letter, we urge you to oppose changes 

in mandatory program spending to any existing, renewed, or extended farm bill direct spending. These programs include the Outreach and Assistance to Socially Disadvantaged Farmers and Ranchers, Beginning Farmer and Rancher Development 

Program, Farmers Market Promotion Program, Community Food Project Competitive Grants, National Organic Cost-Share Program, Organic Agriculture Research 

and Extension Initiative, and the Rural Energy for America Program. 

As you proceed with funding for these important programs for fiscal year 2013, 

we urge you to consider the impacts of your funding decisions on the future, a concern for the next generation of American farmers and ranchers, and great care to 

being inclusive of beginning, minority, tribal women, and limited resource farmers 

who are often in most need of these important programs. 

Sincerely, 

Alliance of Forest Workers and 

Harvesters, Oakland, CA 

American Federation of Government 

Employees Local 3354, St. Louis, MO 

American Federation of Government 

Employees (AFL–CIO), Washington, 

DC 

BioRegional Strategies, Albuquerque, 

NM 

Birthing Project USA, Albuquerque, NM 

California Food & Justice Coalition, 

Oakland, CA 

Casa de Cultura, Las Vegas, NM 

CASA del Llano, Inc., Hereford, TX 

Church Women United in New York 

State, Rochester, NY 

Community Food Security Coalition, 

Portland, OR 

D.C. Farm to School Network, 

Washington, DC 

Family Farm Defenders, Madison, WI 

Farmworker Association of Florida, 

Apopka, FL 

Federation of Southern Cooperatives, 

Atlanta, GA 

Food & Water Watch, Washington, DC 

Idaho Rural Council, Filer, ID 

Intertribal Agriculture Council, Billings, 

MT 

Just Food, NewYork, NY 

Kentucky Resources Council, Inc., 

Frankfort, KY 

Lideres Campesinas, Oxnard, CA 

Live Real, Oakland, CA 

National Family Farm Coalition, 

Washington, DC 

National Hmong American Farmers, 

Inc., Fresno, CA 

National Latino Farmers and Ranchers 

Trade Association, Washington, DC 

National Wildlife Federation, 

Washington, DC 

National Women in Agriculture 

Association, Oklahoma City, OK 

National Young Farmers’ Coalition, 

Tivoli, NY 

New Orleans Food & Farm Network, 

New Orleans, LA 

Northern New Mexico Stockman’s 

Association, Albuquerque, NM 

Oklahoma Black Historical Research 

Project, Inc., Oklahoma City, OK 

Rural Advancement Fund, Orangeburg, 

SC 

Rural Coalition/Coalicio ́n Rural, 

Washington, DC 

Southern Regional Asset Building 

Coalition, Tuskegee, AL 

Taos County Economic Development 

Corporation, Taos, NM 

The Cornucopia Institute, Cornucopia,WI 

The Presbyterian Church (U.S.A.) Office 

of Public Witness, Washington, DC 

United Farmers USA, Manning, SC 

World Farmers, Inc., Lancaster, MA 
244 

PREPARED STATEMENT OF THE RURAL HOUSING DEVELOPMENT CORPORATION

On behalf of Rural Housing Development Corporation (RHDC), I would like to 

thank the Subcommittee for the opportunity to submit testimony on fiscal year 2013 

Appropriations for two of Department of Agriculture (USDA) Rural Housing Programs. I strongly urge this Subcommittee to fund USDA Rural Housing programs 

at the higher of fiscal year 2012 levels or the President’s fiscal year 2013 budget 

request: (1) $900 million for Section 502 Family Direct Homeownership Loans; and 

(2) $30 million for Section 523 Self-Help Housing Program. 

RHDC is a nonprofit affordable housing organization in Utah. Since 1998, RHDC 

has promoted affordable housing opportunities to low-income families living in Central Utah. Over 300 single family homes have been built through USDA’s Mutual 

Self-Help Housing program using the 502 loan in Central Utah and over 1,000 

homes have been built across the State of Utah. 

About the Mutual Self-Help Housing Program 

The Mutual Self Help Housing program takes the rural tradition of barn-raising 

and puts it to use for families who, after working all day and all week, spend their 

nights and weekends building their own home. It is a model of how low-income families help themselves through sweat equity. Without the opportunity, many of these 

families would never own their own home. Consider the West family in Utah, a lowincome family of 5 (children ages 5, 3 and 1),who have lived in two-room log cabin 

built in the 1880’s. The cabin measures 21 by 26 feet, which is very similar to a 

modes two-car garage. 

In their own words: 

‘‘While we enjoy the ‘coziness’ of our home, it does present some challenges. The 

cabin is not well-insulated. We can feel the wind through the single-paned windows 

and cracks throughout the house. Big rainstorms cause leaks. Other than weather 

problems, we are not sure which we have the most of living in the walls of our 

home: bees, spiders or mice. Our home is on a cinderblock basement built into a 

dike constructed to control the flooding of the river in the 1980’s. Because of our 

close proximity to the river and lake, we have had to face additional challenges. 

This year the ground water is so high it fills the septic tank, causing the sewer to 

back up. The high water flow in the river also caused the water to seep through 

the cracks in our basement floor. At the highest point, we had almost 2 feet of 

standing water. Even though the water level has recently dropped, we are left with 

the challenge of the profuse growth of mold. Every summer, we have a mold problem in the basement. However, this year, with the flooding, the mold is 100 percent 

worse. This makes us concerned for our family’s health. 

‘‘Unfortunately for us, moving is not an option at this time. For these reasons, 

we are telling you our story—not to complain, but to ask you for the much needed 

financial assistance in purchasing a new, healthy home for our family through the 

Mutual Self Help Housing Program. We cannot better our situation without your 

help.’’ 

Families like the West family have found refuge in building their own home and 

for that reason take great care in the homes they have a major stake in. Of the 

1,000∂ homes built in Utah, there is a foreclosure rate of less than 1 percent. This 

means that the 502 loans borrowed are paid back with interest and perpetuated for 

future families. 

Economic Impact 

The economic impact in Utah has been substantial; it is anticipated that during 

2011 and 2012, the Self Help Housing program would bring Utah’s economy approximately $58,210,788. The program also creates employment opportunities in 

rural areas; each year in Utah, over 500 jobs are created for subcontracts, suppliers, 

realtors, and land developers. 

The Section 502 program provides loans to low- and very-low income families at 

a low cost the Government, and as mentioned, has a very low foreclosure rate. Sixty 

percent of the families borrowing direct loans from USDA have incomes at or below 

60 percent of the area median income. The proposed budget contends that the 502 

guarantee loan program can assist families who are now receiving direct loans. 

There is ample evidence to the contrary; including an Economic Research Service 

report indicating that the guarantee loan program is not working well in smaller, 

more isolated communities. Nor does the guarantee loan product have a track record 

of serving households with incomes at 60 percent AMI or less, while the direct loan 

program does. The proposed change will not provide homeownership opportunities 

for many of the current workforce in rural areas, who struggle to find affordable 
245 

rental housing that is both safe and adequate for their family size. The loss of this 

program will also destabilize rural workers, negatively impacting rural employers. 

I would ask that the Subcommittee reconsider the proposed budget and look at 

ways to reallocate the reduced spending level in a manner that still supports the 

502 and 523 programs as indicated above. I appreciate your consideration of this 

request. 

PREPARED STATEMENT OF THE SELF-HELP ENTERPRISES

Self-Help Enterprises is a regional nonprofit housing and community development 

organization serving eight expansive counties in California’s agricultural San Joaquin Valley. Founded in 1965, Self-Help Enterprises has developed nearly 6,000 

self-help homes and 1,200 units of multifamily rental housing for farmworkers and 

other low wage earners. In partnership with local governments, SHE has rehabilitated or replaced 6,000 homes, assisted 1,500 first-time homebuyers, and provided 

planning and technical assistance to dozens of small, unincorporated communities 

meeting needs for safe drinking water and wastewater treatment. 

The Rural Housing Service’s housing programs continue to be the most effective, 

and in many cases, the only, resources which address the critical housing needs of 

rural America. Self-Help Enterprises strongly supports an appropriation to maintain 

USDA’s Rural Housing programs at the following levels. 

—Section 502 Family Direct Homeownership Loans: $900 million 

—Section 504 Very-Low Income Rural Housing Repair Loans: $28 million 

—Section 504 Very-Low Income Rural Housing Repair Grants: $29.5 million 

—Section 514 Farm Labor Housing Program Loans: $26 million 

—Section 516 Farm Labor Housing Program Grants: $9 million 

—Section 515 Rural Rental Housing Program: $64.5 million 

—Section 521 Multi-Family Rental Housing Rental Assistance Program: $907 million 

—Section 523 Self-Help Housing Program: $30 million 

—Section 533 Housing Preservation Grants Program: $3.6 million 

—Section 538 Guaranteed Multi-Family Housing Loans: $150 million 

—Multi-Family Housing Preservation and Revitalization Program: $46.9 million 

—Rural Community Development Initiative: $13 million 

Section 523 Mutual Self-Help Housing Program 

No other program combines the unique features which make the Self-Help program a success. The Section 523 grants provide support to Self-Help sponsors who 

provide technical assistance, recruiting, training, and supervising to families to earn 

‘‘sweat equity.’’ This unique construction method also promotes strong communities 

by building close bonds among future neighbors. (PART review, 

www.expectmore.gov) 

Created by the Housing and Community Development Act of 1968, the USDA 

Rural Development Section 523 Mutual Self-Help Housing Program is one of the 

best and most successful avenues to sustainable homeownership for low-income 

rural Americans. 

With its roots in the tradition of barn raising, mutual self-help housing gives 

hardworking rural families the opportunity to work together to achieve the dream 

of homeownership which individually could not be attained. Mutual self-help housing programs, which still retain a style reminiscent of pioneer barn raisings, provide 

the organizational structure that allows low-income families to build the homes they 

so desperately want and need. This includes the capital, training and supervision, 

coordination, accounting, and myriad of other technical skills necessary to any successful housing development effort. 

The concept is straightforward: groups of 6–12 low-income families join together 

to pool their labor to build each other’s homes, in the process building a neighborhood for their community, for their children, and for themselves. The future homeowners commit to completing 65 percent of the work necessary to build the homes. 

At Self-Help Enterprises, these families pour the concrete, frame the walls, and install electrical wiring, heating ducts, roof framing, as well as all finish, tile, paint, 

and trim. Reducing the labor cost of the home reduces the total cost of the home, 

enabling lower-income households to become homeowners and earn equity at the 

same time. 

The economic benefits extend far beyond the individual homeowners. As contractors are hired to turn raw land into subdivisions, local vendors provide building materials and subcontractors complete technical work such as plumbing. Local governments receive building permit fees, and in the long term, property taxes from proud 
246 

homeowners. Rural communities, often plagued with an abundance of substandard 

housing, gain an expanding stock of good housing and the stability that comes to 

a community of homeowners. 

In the San Joaquin Valley each year, as many as 120 hardworking families each 

commit 1,400 hours, 40 hours per week, week after week, through the heat of summer and the cold of winter, sharing the labor necessary to build homes for their 

neighbors, their children and themselves. 

It is popular today to talk about the importance for homebuyers to have ‘‘skin in 

the game’’ as protection against failed mortgages. Mutual self-help families have 

more than skin in the game. They have skin, sweat, and occasionally a bit of blood 

as they invest themselves in the home of their dreams. And does it work? With 47 

years of experience behind us, those of us at Self-Help Enterprises say ‘‘YES’’ unequivocally. Self-help homebuilders achieve remarkable stability. Despite being the 

lowest income of the Section 502 borrowers, our self-help homebuilders have lower 

delinquency rates and very low foreclosure rates. 

No other path to homeownership for low-income families has proven to be as successful. 

Section 502 Direct Lending Program 

The Section 502 Direct Loan program is an equally important element of self-help 

housing, affording well-underwritten construction-to-permanent mortgages that finance the home from the start of construction to the final mortgage payment. But 

the reach of this model mortgage program goes far beyond self-help households. 

Since the Housing Act of 1961, the USDA 502 Direct Loan Program has been a 

cornerstone of homeownership opportunity in rural America, with over 2 million 

homeowners seizing the opportunity for an affordable mortgage which would enable 

them to be homeowners in the town where they live and work. For a surprisingly 

low Federal budget cost, the 502 Direct mortgage is a well underwritten, affordable, 

no gimmicks financing for rural families who want to invest in homes and in their 

communities. 

No other Federal home ownership program can match the profile of the families 

served by the section 502 direct loan program. The average income for families receiving direct loans is $27,000. By law, 40 percent of families participating in the 

program have incomes that do not exceed 50 percent of the median income. For the 

past 2 years at Self-Help Enterprises, fully 60 percent of the borrowers have incomes below 50 percent of median. 

Despite serving families with limited economic means, the section 502 direct loan 

program is the most cost effective affordable housing program in the Federal Government. In fiscal year 2011, the total per unit cost for a homeownership loan to 

a low income family was less than $7,200. There are a number of reasons for this 

overall low cost to the Government. First, a low interest rate environment reduces 

the cost of borrowing. Less well known is a longstanding requirement to recapture 

subsidy when a house financed under section 502 is sold. Essentially a family and 

the Government share in the appreciation on a home, taking into account how long 

a family has lived in the house. Recapture provides a substantial return to the Government. 

Although the Section 502 Direct Loan Program lends to families with limited incomes, the program has a record of success not only in creating affordable homeownership opportunity, but also protecting the Federal investment. For example, in 

2010, USDA Rural Development in California foreclosed on a mere 57 mortgages out 

of a loan portfolio of nearly 10,000 loans. This is a foreclosure rate of just over 0.5 

percent and stands in stark contrast to what is happening in the conventional market in California. 

It has been stated that the Section 502 guarantee program is an alternative for 

families eligible for direct loans. It is not. The average annual income for families 

receiving the guarantee is $48,000. The majority of the loan guarantees go to households with incomes at or above 100 percent of the median, and only about 5 percent 

of families receiving guarantees make between 60–70 percent of the median. With 

the inevitable end of the current low interest rate environment, interest rates on 

502 Guarantee loans will once again rise, and the number of qualifying low income 

borrowers will drop, if not disappear altogether. 

Summary 

USDA’s Rural Housing Service and the resources it delivers represent vital resources to the people and the economies of rural American communities so desperate for jobs. As the recession seems finally to be fading in some areas of the 

country, its grip on rural America is still devastatingly strong. This is no time to 

reduce the investment so important to the recovery of Rural America. 
247 

PREPARED STATEMENT OF THE SELF-HELP HOUSING CORPORATION OF HAWAII

The Self-Help Housing Corporation of Hawaii is requesting the same allocations 

from fiscal year 2012 for the USDA Rural Development 502 Direct Loan Program, 

and the RD 523 Technical Assistance Mutual Self-Help Housing Program. With the 

average sales price for a single family house in Hawaii at $550,000, there would be 

no affordable housing for homeownership in Hawaii without the USDA Rural Housing Programs. Because of the extreme gap of income levels for low income families 

in Hawaii and the average housing prices, even the ‘‘workforce’’ of Hawaii cannot 

afford homeownership without the subsidies offered by these programs. 

Through the recent development of its 72 lot subdivision in a rural low income 

neighborhood, SHHCH is able to offer homeownership opportunities to 72 very low 

and low income families who will build their own houses through the mutual selfhelp housing program. SHHCH is providing more than 200 jobs with just this selfhelp housing project with the construction of the infrastructure, materials and 

equipment from building supply houses, and services from title companies, appraisers, insurance companies, lenders, etc. With the Federal funding of these programs 

acting as a catalyst, SHHCH has been able to leverage another $11 million in private financing to undertake this development. Additionally, very low and low income 

families, who presently live in sub-standard, and severely crowded situations, not 

only improve their housing situations, but also gain equity; thereby, continuing to 

improve their lives. 

The Self-Help Housing Corporation has built 591 self-help units throughout the 

State of Hawaii with firemen, policemen, teacher’s aides, hospital workers, hotel 

workers, laborers, and those considered the ‘‘workforce’’ of Hawaii. Currently, in a 

remote rural area of Maui, SHHCH is assisting native Hawaiian low income families to build three and four bedroom houses through the RD 523 and RD 502 Direct 

Loan Programs. This is the first affordable housing program in Hana in 35 years. 

Some of these self-help builders have no electricity or potable water in their existing 

houses. Without these Rural Housing Programs, these families, and thousands of 

rural low income families across the country would continue to live in severely substandard conditions, some without electricity and potable water; conditions I saw as 

a Peace Corps volunteer in third world countries! 

In the past 3 years more than 3,500 low income families in more than 37 States 

have built their own houses through the RD 523 Technical Assistance Program in 

tandem with the RD 502 Direct Loan Program. With a cost of approximately $5,000 

to subsidize the program over the entire 33 year amortization period, these programs are less expensive than rental subsidy programs. Through these programs 

not only does the family improve their living situation, gain equity, and learn invaluable skills in leadership, team work, and building skills, but the community 

benefits with a broadening of the tax base, an enhancement of property values, and 

an establishment of stable neighborhoods with well maintained houses. Every 100 

homes built in this program results in 324 jobs, $21.1 million infused in the local 

economy, and $2.2 million paid in for tax revenues. These significant housing programs are assisting to rebuild the economy in rural areas. 

I urge you, as at the leaders of our country, to consider funding such valuable 

community development programs at the fiscal year 2012 funding levels. 

PREPARED STATEMENT OF THE SCHOOL NUTRITION ASSOCIATION

The School Nutrition Association (SNA) strongly supports approval of the $35 million requested by the Food and Nutrition Service for School Meal Equipment 

Grants. Many School Food Authorities (SFAs) throughout the Nation have a significant need to replace and upgrade their equipment, particularly as we all work to 

implement the final rule revising school lunch and school breakfast meal standards. 

Most importantly, new equipment will directly benefit the millions of children that 

school food service professionals serve each and every school day by enabling SFAs 

to provide more fruits and vegetables, and enabling SFAs to maintain, expand, and 

establish school breakfast programs throughout the Nation. 

Mr. Chairman and Members of the Committee, SNA represents more than 55,000 

members who provide high-quality, low-cost meals to students across the country. 

We appreciate your continuing support for all school meal programs. These programs are needed more than ever before and we want to work with you to improve 

the efficiency and integrity of school meals. 

Our members are charged with several simultaneous tasks. First, they must provide the best meal possible. Second, they must provide the safest meal possible. 

Third, they must do so within extremely tight budget limits that often do not leave 

any resources for replacing and upgrading equipment on a regular basis. 
248 

School meals must be nutritious and varied in order to qualify for Federal reimbursement, and to maintain student interest. As a result of both the new meal pattern standards and requirements of the Healthy, Hunger-Free Kids Act of 2010, 

SFAs are required to serve both a greater volume and a wider array of fruits and 

vegetables. We are prepared to meet that challenge, but many SNA members will 

need additional refrigeration equipment, storage equipment, and food preparation 

equipment in order to meet these requirements. Equipment assistance is vitally 

needed to fully achieve the requirement for nutritious and varied meals. 

Food safety is a tremendous responsibility. SNA members take great care to provide safe food for the benefit of each child, and for the integrity of school meal programs. Old equipment that is in need of constant repair or is scheduled to be replaced jeopardizes food safety. Equipment assistance is vitally needed to help ensure 

the continued provision of safe food. 

And while we certainly recognize and respect the financial challenges facing the 

Federal budget, one school food service professional after another is prepared to tell 

you about the difficult budget situations they face in their States, their school districts, and their individual schools. Many areas that have traditionally been well off 

financially are facing significant budget difficulties. We see this in our schools every 

day as more and more students move from paid meals to reduced price meals to 

free meals as families face economic difficulties. As a consequence, school food service professionals are managing tighter and tighter budgets, and are forced to put 

off replacing and upgrading equipment more than they should. Equipment assistance is vitally needed to help SFAs deal with little or no local resources for replacing and upgrading equipment. 

It is well known that the $100 million provided by the American Recovery and 

Reinvestment Act, and the $25 million provided as part of the fiscal year 2010 Agriculture Appropriations Act made a positive difference for the 6,500 successful applicants. Yet many more SFAs need to upgrade their equipment. There were 25,000 

applications submitted for the prior program, with priority having been given to 

school districts where 50 percent or more students are eligible for free or reduced 

price meals. 

As an example of what this prior funding accomplished, Burlington, Vermont, 

schools received several ARRA fund grants. Most went into walk-in coolers and one 

went into a Blodgett oven. The new walk-in coolers have given the Burlington 

schools the ability to provide more fresh fruits and vegetables to their students 

daily. Between the use of salad bars, the Fresh Fruit and Vegetable Program, breakfast, and after-school suppers and snacks they are now providing at least 8∂ fruit 

and vegetable choices daily, to all students K–12. In addition, the increased refrigeration space has improved their food safety and storage capacity as well as reducing energy costs, noise and heat in their kitchens. The addition of the oven, which 

replaced a 25∂ year old electric model, was not only more cost effective, but also 

reduced cooking times and improved food quality. 

The amount requested as part of the fiscal year 2013 FNS budget is projected to 

assist up to 10,000 schools in 15 to 25 States make similar improvements. 

We also would like to respectfully point out that many schools serving fewer than 

50 percent free and reduced price meals need equipment assistance. While SNA understands the desire to prioritize who may be eligible for this assistance, schools 

serving fewer than 50 percent free and reduced price meals face the same budgetary 

problems and equipment needs. The prior program established an assistance scale 

for SFAs with less than 50 percent free and reduced price participation. If a school 

applying had less than 30 percent F&R, they would only have been reimbursed for 

25 percent of the cost of the equipment. This discouraged SFAs from applying at 

all last time. The situation is further complicated by the Paid Equity requirement 

included in the Healthy, Hunger-Free Kids Act. This provision requires SFAs with 

meal prices below the Federal reimbursement rate to increase their prices, even if 

they are already covering all of their costs. SFAs are relying on paying students for 

most of their income, and find that any price increase usually means a drop in participation. This drop in participation makes it even harder for SFAs to derive sufficient revenue to replace equipment absent a full grant. We hope that FNS will have 

the flexibility to consider additional methods for prioritization of grant applications 

in addition to just meal participation rates. 

We thank you for this opportunity to share our support for the requested $35 million for School Meal Equipment Grants, and look forward to continue to work with 

you in the future. 
249 

PREPARED STATEMENT OF THE SOCIETY FOR WOMEN’S HEALTH RESEARCH

The Society for Women’s Health Research (SWHR) is pleased to submit written 

testimony to urge the Committee to increase the fiscal year 2013 budget authority 

(BA) appropriations (non-user fees) for the U.S. Food and Drug Administration 

(FDA) to $2.656 billion, resulting in a 6 percent increase over 2012. This allocation 

will allow the agency to provide necessary and critical improvements in infrastructure, address resource shortages, and support needed investment into the Office of 

Women’s Health (OWH), the focal point on women’s health within the Agency. 

SWHR, a national nonprofit organization based in Washington, DC, is widely recognized as the thought leader in research on sex differences and is dedicated to improving women’s health through advocacy, education, and research. SWHR was 

founded in 1990 by a group of physicians, medical researchers and health advocates 

who wanted to bring attention to the myriad of diseases and conditions that affect 

women uniquely. 

Insufficient investment in this important agency prevents the FDA from fully 

achieving its mission and threatens the health, economic and national security of 

the Nation. While SWHR recognizes the need for responsible discretionary spending, 

proper and sustained funding of the FDA must remain a public priority. The increase of $150 million to FDA reflects the Agency’s increased responsibilities and 

workload. Appropriate funding of the FDA by Congress is vital for it to fulfill its 

mission. Americans rely on the FDA every day, from promoting wellness and meeting healthcare needs to ensuring the food supply and keeping drugs safe and effective. Altogether, 25 percent of every consumer dollar spent in America is spent on 

products regulated by the FDA. 

This level of investment will allow the FDA to foster a 21st century culture of 

proactive science and research leadership that will better meet the demands and expectations of the American public. Each year, over 80 percent of FDA’s budget is 

allocated toward the salary of its scientists and staff, making a substantial investment in infrastructure needs, technology, and human collateral all but impossible. 

Until the budgetary allocation from Congress is enough to allow FDA to invest in 

staffing and infrastructure needs, the FDA will continue to act in a reactionary 

manner against the emerging or known threats to food and drug security. 

FDA and Sex Differences Research 

In the past decades, scientists have uncovered significant biological and physiological differences between men and women. Sex differences have been found everywhere, from the composition of bone matter to the metabolism of certain drugs, to 

the rate of neurotransmitter synthesis in the brain. Sex-based biology, the study of 

biological and physiological differences between men and women, has revolutionized 

the way that the scientific community views the sexes. America’s drug development 

process continues to advance in delivering new and better targeted medications to 

combat disease; however, medication effectiveness and safety could be better targeted to women and men if analysis of sex and gender differences would be done 

routinely during review processes at FDA. 

SWHR has long recognized that the inclusion of women in study populations by 

itself was insufficient to address the inequities in our knowledge of human biology 

and medicine, and that only by the careful study of sex differences at all levels, from 

genes to behavior, would science achieve the goal of optimal healthcare for both men 

and women. Many sex differences are already present at birth, whereas others develop later in life. These differences play an important role in disease susceptibility, 

prevalence, time of onset, and severity and have documented roles in cancer, obesity, heart disease, immune dysfunction, mental health disorders, and other illnesses. Physiological differences and hormonal fluctuations may also play a role in 

the rate of drug absorption, distribution, metabolism, elimination as well as ultimate effectiveness of response in females as opposed to males. This vital research 

is supported and encouraged by the OWH at FDA, working directly with the various 

centers to advance the science in this area, collaborating on programs, projects, and 

research. 

Unfortunately, FDA’s requirement that the data acquired during research of a 

new drug or device’s safety and efficacy be reported and analyzed as a function of 

sex is not universally enforced. 

Information about the ways drugs may differ in various populations (e.g., women 

may require a lower dosage because of different rates of absorption or metabolism) 

are often unexplored, or female enrollment in studies is too low to adequately power 

statistically significant results. As a result, this information is not able to be transmitted to healthcare providers and the potential benefit of a more appropriate medical option is not available to the patient, man or woman. 
250 

SWHR believes that the opportunity to translate this information to patients exists now. Sex differences data discovered from clinical trials can be presented to the 

medical community and to patients through education, drug labeling and packaging 

inserts, and other forms of alerts directed to key audiences. SWHR encourages the 

FDA to continue addressing the need for accurate, sex-specific drug and device labeling to better serve male and female patients, as well as to ensure that appropriate data analysis of post-market surveillance reporting for these differences is 

placed in the hands of physicians and ultimately the patient. 

FDA Must Improve Its IT Infrastructure 

The FDA is tasked with guarding the safety, efficacy, and security of human 

drugs, biological products, and medical devices, yet still does not have sufficient resources to establish and maintain the information technology needed to appropriately analyze the information that FDA receives. This lack of appropriate IT systems inhibits the FDA from fulfilling its mission and prevents appropriate sex differences analysis from being conducted. A 2007 Science Board Report, requested by 

former Commissioner von Eschenbach, found that FDA’s IT systems were inefficient 

and incapable of handling the current demands placed on the Agency. 

Tremendous advances have been made throughout the Agency to modernize in the 

5 years since that initial report; however, it still remains a challenge for the Agency 

to access and maintain the information technology needed to meet the growing expectations from the American public and to fulfill its mission. As technology continues to advance, congressional investment in FDA must remain robust. 

FDA is expected by Congress and the American public to have IT systems that 

can quickly and effectively do appropriate data analyses and reporting, safety analyses, tracking the natural history and disease models for rare disorders, analyses 

of subpopulations within the context of larger trials or comparative effectiveness research (CER), access large amounts of clinical data, capture emerging trends, and 

determine food and drug safety when a problem impacting the public breaks out. 

FDA Must Create a Centralized Database 

The creation of a central database would provide a single repository for all relevant facts about a certain product, including where, when and how the product was 

made. Such a database will be relevant for all information stored across agencies, 

so as to maximize functionality not only of FDA’s data but for any other research 

and analysis needed by the American public for safety and surveillance. This database should allow for easier tracking of recruitment and retention rates of women 

and minorities in clinical trials, which will allow the FDA to monitor and collect 

data on how drugs, devices and biologics affect men and women differently, and 

allow for sex differences to be analyzed during the drug review process. 

FDA IT Systems Must Encourage Electronic Submissions and Be Able To 

Handle All Applications in an Electronic Format 

FDA must move away from a paper based system into a standardized electronic 

format. This will aid in transforming Agency reviews, CER, and further data analysis and reporting, such as sex differences. 

FDA Office of Women’s Health 

The FDA’s Office of Women’s Health (OWH), like the Agency that houses it, requires steady and sustained investment to remain a key resource advocating for this 

important research. OWH at the FDA, established in 1994, plays a critical role in 

women’s health, both within and Agency and as an information source to the public. 

OWH’s programs, often conducted with the Agency centers, focus on women’s 

health within the FDA and are critical to improving care and increased awareness 

of disease-specific impacts on women. OWH works to ensure that sex and gender 

differences in the efficacy of drugs (such as metabolism rates), devices (sizes and 

functionality) and diagnostics are taken into consideration in reviews and approvals, 

but they cannot fix the problem alone. Additionally, OWH endeavors to correct sex 

and gender disparities in the areas for which the FDA has jurisdiction and also 

monitors women’s health priorities, providing both leadership and an integrated approach to problem solving across the FDA. The OWH continues to provide women 

with invaluable tools for their health and ensure that the agency is examining sex 

and gender differences during its review of new drugs, devices, and biologics. 

To address OWH’s growing list of priorities, SWHR recommends that Congress 

support an additional $1 million budget for OWH for fiscal year 2013 within the 

budget for the FDA. Each year, OWH exhausts its budget as OWH’s pamphlets are 

the most requested of any documents at the Government printing facility in Colorado. More than 5 million OWH pamphlets have been distributed to women across 

America, including target populations such as Hispanic communities, seniors and 
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low-income citizens. Last year, the OWH’s intramural research program funded over 

23 new and 8 continuing research studies conducted by FDA scientists. To date, 

over 50 concept papers were submitted. OWH has also collaborated with CDRH to 

award a contract to Duke Research Institutes for prospective assessment of clinical 

and patient-reported outcomes for female patients undergoing percutaneous coronary intervention (PCI) procedures via femoral and radial access. Further, FDA 

OWH has worked closely with CDRH on its publication of the Draft Guidance on 

the Evaluation of Sex Differences in Medical Device Clinical Studies. 

The value-added with congressional investment in FDA’s OWH is clear. The office 

provides women with the high quality and timely information that American women 

need to make medical decisions on behalf of them and their families. Further, 

OWH’s website is a vital tool for consumers and physicians. It is regularly updated 

to include new and important health information. The website provides free, 

downloadable fact sheets on over 100 different illnesses, diseases, and health related 

issues for women. OWH has created medication charts on several chronic diseases, 

listing all the medications that are prescribed and available for each disease. This 

type of information is ideal for women to use in talking to their doctors, pharmacists, or nurses about their treatment options. Such resources need to be updated, evaluated, and disseminated to further impact improvements in women’s 

health. 

OWH provides imperative information to the medical communities in the form of 

web trainings to keep medical professionals up to date with emerging science. OWH 

developed Sex and Gender Differences in Health and Behavior, with assistance from 

the Office of Research on Women’s Health (ORWH) at the National Institutes of 

Health (NIH) to develop the second in a web series of free courses on the ‘‘Science 

of Sex and Gender in Human Health’’. Developed in partnership with the Health 

Resources and Services Administration (HRSA), OWH developed online courses in 

health literacy to help promote best practices for improving patient/provider communication and addressing factors such as low health literacy that limit a patient’s 

ability to safely use their medications. 

OWH and Sex Differences Research 

OWH funds high quality scientific research to serve as the foundation for FDA 

activities that improve women’s health. Since 1994, OWH has funded approximately 

195 research projects with approximately $15.7 million in intramural grants, supporting projects within the FDA that address knowledge gaps or set new directions 

for sex and gender research. All contracts and grants are awarded through a competitive process and a large number are published in peer reviewed journals. It is 

critical for Congress to help preserve the vital functions of OWH and to ensure that 

its budget is dedicated to the resource needs of the office and to the projects, programs, and research it funds. 

In conclusion, Mr. Chairman, we thank this Committee for its strong record of 

support for the FDA and women’s health. SWHR recommends for fiscal year 2013 

BA appropriations (non-user fees) of $2.656 billion so that the FDA may dramatically improve upon current operations and to improve its staffing and infrastructure 

needs. Second, we urge you to allocate $7 million for the Office of Women’s Health 

for fiscal year 2013, and to ensure that future budget appropriations for the OWH 

never fall below fiscal year 2012 funding levels of $6 million. 

We look forward to continuing to work with the Committee to build a stronger, 

healthier, and safer future for all Americans. 

PREPARED STATEMENT OF THE HUMANE SOCIETY OF THE UNITED STATES

As the largest animal protection organization in the country, we appreciate the 

opportunity to provide testimony to your Subcommittee on fiscal year 2013 items of 

great importance to The Humane Society of the United States (HSUS) and its 11 

million supporters nationwide. In this testimony, we request the following assistance for the following USDA accounts: 

—APHIS/Animal Welfare Act Enforcement—$27,087,000; 

—APHIS/Horse Protection Act Enforcement—$891,000; 

—APHIS/Investigative and Enforcement Services—$16,275,000; 

—FSIS/Horse Slaughter—language mirroring fiscal year 2012 House bill provision; 

—FSIS/Humane Methods of Slaughter Act Enforcement—language directing FSIS 

to ensure that inspectors hired with funding previously specified for Humane 

Methods of Slaughter Act enforcement focus their attention on overseeing com-
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pliance with humane handling rules for live animals as they arrive and are 

offloaded and handled in pens, chutes, and stunning areas; 

—OIG/including Animal Fighting Enforcement—$85,621,000; 

—NIFA/Veterinary Medical Services Act—$4,790,000; 

—APHIS/Emergency Management Systems/Disaster Planning for Animals— 

$1,017,000; 

—APHIS/Wildlife Services Damage Management—reduce by $10 million; and 

—APHIS/Class B Dealers—language barring expenditures of funds for licensing 

or renewal of licenses of any Class B Dealers who sell dogs or cats for use in 

research, teaching, or testing. 

At this time of intense budget pressure, we thank you for your outstanding past 

support for enforcement of key animal welfare laws by the U.S. Department of Agriculture and we urge you to sustain this effort in fiscal year 2013. While we understand the focus on reducing Federal spending, we believe there should be room for 

careful decisionmaking within the budget to achieve macro-level cuts and at the 

same time ensure adequate funding for specific accounts that are vital and have 

previously been underfunded. 

Your leadership is making a difference, helping to protect the welfare of millions 

of animals across the country and upholding the values of the American public. As 

you know, better enforcement also directly benefits American citizens by: (1) preventing the sale of unhealthy pets from unlawful commercial breeders, commonly 

referred to as ‘‘puppy mills’’; (2) improving laboratory conditions that may otherwise 

impair the scientific integrity of animal-based research; (3) reducing risks of disease 

transmission from, and dangerous encounters with, wild animals in or during public 

exhibition; (4) minimizing injury, loss, and death of pets on commercial airline 

flights due to mishandling and exposure to adverse environmental conditions; (5) decreasing food safety risks to consumers from sick animals who can transmit illness, 

and injuries to slaughterhouse workers from suffering animals; and (6) dismantling 

orchestrated dogfights and cockfights that often involve illegal gambling, drug trafficking, human violence, and can contribute to the spread of costly illnesses such 

as bird flu. In order to continue the important work made possible by the Committee’s prior support, we request the following for fiscal year 2013. 

Animal and Plant Health Inspection Service (APHIS)/Animal Welfare Act (AWA) 

Enforcement 

We request that you support level funding of $27,087,000 for AWA enforcement 

under APHIS. We commend the Committee for responding in recent years to the 

urgent need for increased funding for the Animal Care division. The funding has 

helped improve inspections by Animal Care of approximately 12,870 sites, including 

commercial breeding facilities, laboratories, zoos, circuses, and airlines, to ensure 

compliance with AWA standards. In May 2010, USDA’s Office of Inspector General 

released a report criticizing the agency’s history of lax oversight of dog dealers, finding that inhumane treatment and horrible conditions often failed to be properly documented and yielded little to no enforcement actions. While Agriculture Secretary 

Vilsack called for more inspections and a tougher stance on repeat offenders, the 

agency must have the resources to follow through on that commitment. USDA is 

also implementing a new responsibility created by Congress in 2008—enforcing a 

ban on imports from foreign puppy mills where puppies are mass produced under 

inhumane conditions and forced to endure harsh long-distance transport. Animal 

Care currently has 122 inspectors (with 14 vacancies that are in the process of being 

filled), compared to 64 inspectors at the end of the 1990s. An appropriation at the 

requested level would help the agency continue to address the concerns identified 

by the OIG, enforce the new puppy import ban, and provide adequate oversight of 

the many licensed/registered facilities. 

APHIS/Horse Protection Act (HPA) Enforcement 

We request that you support $891,000, the amount provided in last year’s Senate 

bill, for strengthened enforcement of the Horse Protection Act. Congress enacted the 

HPA in 1970 to make illegal the abusive practice of ‘‘soring,’’ in which unscrupulous 

trainers use a variety of methods to inflict pain on sensitive areas of Tennessee 

Walking Horses’ hooves and legs to exaggerate their high-stepping gait and gain unfair competitive advantage at horse shows. For example, caustic chemicals—such as 

mustard oil, diesel fuel, and kerosene—are painted on the lower front legs of a 

horse, then the legs are wrapped for days in plastic wrap and tight bandages to 

‘‘cook’’ the chemicals deep into the horse’s flesh, and then heavy chains are attached 

to slide up and down the horse’s sore legs. Though soring has been illegal for 40 

years, this cruel practice continues unabated by the well-intentioned but seriously 

understaffed APHIS inspection program and the inherent conflicts of interest in the 
253 

industry self-policing system established to supplement Federal enforcement. A report released in October 2010 by USDA’s Office of Inspector General documents 

these problems and calls for increased funding to enable the agency to more adequately oversee the law. Several horse show industry groups, animal protection 

groups, and the key organization of equine veterinarians have also called for funding increases to enable the USDA to do a better job enforcing this law. To meet the 

goal of the HPA, Animal Care inspectors must be present at more shows. Exhibitors 

who sore their horses go to great lengths to avoid detection—even fleeing shows 

when USDA inspectors arrive. With current funding Animal Care is able to attend 

only about 10 percent of the more than 500 Tennessee Walking Horse shows held 

annually. We greatly appreciate the enactment of a modest increase for Horse Protection Act enforcement last year (bringing the budget for this to $696,000), the first 

time in decades that the program received more than $500,000. An appropriation 

at the requested level will help ensure that this program doesn’t lose ground but 

instead builds on last year’s crucial first step in addressing the need for additional 

inspectors, training, security—for threats of violence against inspectors—and advanced detection equipment. 

APHIS/Investigative and Enforcement Services 

We request that you support level funding of $16,275,000 for APHIS Investigative 

and Enforcement Services (IES). We appreciate the Committee’s consistent support 

for this division. IES handles many important responsibilities, including the investigation of alleged violations of Federal animal welfare laws and the initiation of appropriate enforcement actions. The volume of animal welfare cases is rising significantly. An appropriation at the requested level would enable the agency to keep 

pace with the additional enforcement workload. 

Horse Slaughter 

We request inclusion of the same language barring USDA from the expenditure 

of funds for horse slaughter inspection as was included in the Committee’s fiscal 

year 2012 Agriculture Appropriations bill. This provision is vital to prevent renewed 

horse slaughter activity in this country. 

Food Safety and Inspection Service (FSIS)/Humane Methods of Slaughter Act 

(HMSA) Enforcement 

We request language to ensure strengthened HMSA enforcement. We appreciate 

the Committee’s inclusion of language in the fiscal year 2012 Committee report regarding humane slaughter. USDA oversight of humane handling rules for animals 

at slaughter facilities is vitally important not only for animal welfare but also for 

food safety. Effective day-to-day enforcement can prevent abuses like those previously documented in undercover investigations, and reduce the chance of associated food safety risks and costly recalls of meat and egg products. We therefore urge 

inclusion of language directing FSIS to ensure that inspectors hired with funding 

previously provided specifically for Humane Methods of Slaughter Act enforcement 

focus their attention on overseeing compliance with humane handling rules for live 

animals as they arrive and are offloaded and handled in pens, chutes, and stunning 

areas. 

Office of Inspector General/Animal Fighting Enforcement 

We request that you support level funding of $85,621,000 for the Office of Inspector General (OIG) to maintain staff, ensure effectiveness, and allow investigations 

in various areas, including enforcement of animal fighting laws. We appreciate the 

Committee’s inclusion of funding and language in recent years for USDA’s OIG to 

focus on animal fighting cases. Congress first prohibited most interstate and foreign 

commerce of animals for fighting in 1976, tightened loopholes in the law in 2002, 

established felony penalties in 2007, and further strengthened the law as part of 

the 2008 farm bill. We are pleased that USDA is taking seriously its responsibility 

to enforce this law. Its work with State and local agencies to address these barbaric 

practices, in which animals are drugged to heighten their aggression and forced to 

keep fighting even after they’ve suffered grievous injuries, is commendable. Dogs 

bred and trained to fight endanger public safety, and some dogfighters steal pets 

to use as bait for training their dogs. Also, in 2002–2003 cockfighting was linked 

to an outbreak of Exotic Newcastle Disease that cost taxpayers more than $200 million to contain. Cockfighting has further been linked to the death of a number of 

people in Asia reportedly exposed to bird flu. Given the potential for further costly 

disease transmission, as well as the animal cruelty involved, we believe it is a sound 

investment for the Federal Government to increase its efforts to combat illegal animal fighting activity. We also support the OIG’s auditing and investigative work to 
254 

improve compliance with the Animal Welfare Act, the Horse Protection Act, and the 

Humane Methods of Slaughter Act and downed animal rules. 

National Institute of Food and Agriculture/Veterinary Medical Services Act 

We request that you support level funding of $4,790,000 to continue the implementation of the National Veterinary Medical Service Act (Public Law 108–161). We 

appreciate that Congress is working to address the critical maldistribution of veterinarians practicing in rural and inner-city areas, as well as in Government positions 

at FSIS and APHIS. A 2009 Government Accountability Office report enumerating 

the challenges facing veterinary medicine identified that an inadequate number of 

veterinarians to meet national needs is among the foremost challenges. Having adequate veterinary care is a core animal welfare concern. To ensure adequate oversight of humane handling and food safety rules, FSIS must be able to fill vacancies 

in inspector positions. Veterinarians support our Nation’s defense against bioterrorism. The Centers for Disease Control estimates that 75 percent of potential bioterrorism agents are zoonotic—transmitted from animals to humans. Veterinarians 

are also on the front lines addressing public health problems such as those associated with pet overpopulation, parasites, rabies, chronic wasting disease, and bovine 

spongiform encephalopathy—‘‘mad cow’’ disease. Veterinary school graduates face a 

crushing debt burden of $142,613 on average, with an average starting salary of 

$66,469. For those who choose employment in underserved rural or inner-city areas 

or public health practice, the National Veterinary Medical Service Act authorizes 

the Secretary of Agriculture to repay student debt. It also authorizes financial assistance for those who provide services during Federal emergency situations such 

as disease outbreaks. 

APHIS/Emergency Management Systems/Disaster Planning for Animals 

We request that you support level funding of $1,017,000 for Animal Care under 

APHIS’ Emergency Management Systems line item. Hurricanes Katrina and Rita 

demonstrated that many people refuse to evacuate if they are forced to leave their 

pets behind. The Animal Care division develops infrastructure to help prepare for 

and respond to animal issues in a disaster and incorporate lessons learned from previous disasters. Funds are used for staff time and resources to support the efforts 

of State, county and local governments and humane organizations to plan for protection of people with animals. They also enable the agency to participate, in partnership with FEMA, in the National Response Plan without jeopardizing other Animal 

Care programs. 

APHIS/Wildlife Services Damage Management 

We request that funding be reduced for Wildlife Services Damage Management 

by $10 million. This is the amount that the USDA estimates it spends annually on 

lethal predator control to protect livestock. In light of record deficits, this is a wasteful subsidy that needs to be terminated. Under its ‘‘livestock protection’’ program, 

Wildlife Services provides taxpayer-subsidized wildlife extermination services to private agribusiness. USDA data show that less than 1 percent of livestock are killed 

by predators. Livestock producers and property owners—not U.S. taxpayers—should 

be financially responsible for protecting their property from damage attributed to 

wildlife. Expensive lethal control methods used by Wildlife Services such as aerial 

gunning, poisoning, and trapping are indiscriminate and ineffective, often killing 

non-target species including endangered species protected by Federal law and companion animals. Common sense non-lethal methods like the use of guard animals 

(e.g., llamas, dogs), lighting, penning, and good animal husbandry practices like 

shepherding are cheaper and proven more effective in reducing predation to livestock. Ranchers have no incentive to use these methods if the Federal Government 

continues to pay for unlimited lethal control. By cutting this wasteful and unnecessary program, we will ensure that U.S. taxpayers stop subsidizing lethal wildlife 

control for the benefit of private livestock producers and property owners. 

APHIS/Class B Dealers 

We also ask that you include a funding limitation as suggested below regarding 

Class B Dealers. A September 2010 Government Accountability Office report to Congress found that numerous Animal Welfare Act violations have been documented 

during inspections of Class B dealer facilities, seven of the nine licensed Class B 

dealers of live, random-source dogs and cats at that time had one or more violations, 

and several Class B dealers were under further investigation by the USDA because 

of repeated violations. The USDA is spending an inordinate amount of its limited 

resources in an attempt to regulate these Class B dealers, especially considering 

that a 2009 study by the National Academies—‘‘Scientific and Humane Issues in the 
255 

Use of Random Source Dogs and Cats in Research’’—found that Class B dealers are 

not necessary to supply random-source dogs and cats for NIH-funded research. 

Requested bill language: ‘‘Provided, That appropriations herein made shall not be 

available for any activities or expense related to the licensing of new Class B dealers 

who sell dogs or cats for use in research, teaching, or testing, or to the renewal of 

licenses of existing Class B dealers who sell dogs or cats for use in research, teaching, or testing’’. 

Again, we appreciate the opportunity to share our views and priorities for the Agriculture, Rural Development, FDA, and Related Agencies Appropriation Act for Fiscal Year 2013. We are so grateful for the Committee’s past support, and hope you 

will be able to accommodate these modest requests to address some very pressing 

problems affecting millions of animals in the United States. Thank you for your consideration. 

PREPARED STATEMENT OF THE HUMANE SOCIETY OF THE UNITED STATES—EQUINE

PROTECTION

On behalf of the undersigned animal welfare and horse industry organizations, 

with combined supporters exceeding 12 million, and former Senator Joseph Tydings, 

we submit the following testimony seeking funding for the USDA/APHIS Horse Protection Program of $891,000 for fiscal year 2013. We recognize that Congress is focused on the imperative of cutting Federal spending. But we believe that it should 

be possible to achieve meaningful reductions in the overall budget while still addressing shortfalls in very specific accounts that are vital and have been seriously 

underfunded. This $891,000 is urgently needed to begin to fulfill the intent of the 

Horse Protection Act—to eliminate the cruel practice of soring—by allowing the 

USDA to strengthen its enforcement capabilities for this law. 

In 1970, Congress passed the Horse Protection Act to end soring, the intentional 

infliction of pain to the hooves and legs of a horse to produce an exaggerated gait, 

practiced primarily in the Tennessee Walking Horse show industry. 

For example, caustic chemicals—such as mustard oil, diesel fuel, and kerosene— 

are painted on the lower front legs of a horse, then the legs are wrapped for days 

in plastic wrap and bandages to ‘‘cook’’ the chemicals deep into the horse’s flesh. 

This makes the horse’s legs extremely painful and sensitive, and when ridden, the 

horse is fitted with chains that slide up and down the horse’s sore legs, forcing him 

to produce an exaggerated, high-stepping gait in the show ring. Additional tactics 

include inserting foreign objects such as metal screws or hard acrylic between a 

heavy stacked shoe and the horse’s hoof; pressure shoeing—cutting a horse’s hoof 

down to the sensitive live tissue to cause extreme pain every time the horse bears 

weight on the hoof; and applying painful chemicals such as salicylic acid to slough 

off scarred tissue, in an attempt to remove evidence of soring. 

The Horse Protection Act authorizes the USDA to inspect Tennessee Walking 

Horses and Racking Horses—in transport to and at shows, exhibits, auctions and 

sales—for signs of soring, and to pursue penalties against violators. Unfortunately, 

since its inception, enforcement of the act has been plagued by underfunding. As 

a result, the USDA has never been able to adequately enforce the act, allowing this 

extreme and deliberate cruelty to persist on a widespread basis. 

The most effective way to eliminate soring and meet the goals of the act is for 

USDA officials to be present at more shows. However, limited funds allow USDA 

attendance at only about 10 percent of Tennessee Walking Horse shows. So the 

agency set up an industry-run system of certified Horse Industry Organization 

(HIO) inspection programs, which are charged with inspecting horses for signs of 

soring at the majority of shows. These groups license examiners known as Designated Qualified Persons (DQPs) to conduct inspections. To perform this function, 

some of these organizations hire industry insiders who have an obvious stake in preserving the status quo. Statistics clearly show that when USDA inspectors are in 

attendance to oversee shows affiliated with these organizations, the numbers of 

noted violations are many times higher than at shows where industry inspectors 

alone are conducting the inspections. By all measures, the overall DQP program as 

a whole has been a failure—the only remedy is to abolish the conflicted industryrun inspection programs charged with self-regulation and give USDA the resources 

it needs to adequately enforce the act. 

USDA appears to have attempted to step up its enforcement efforts in recent 

years, and has begun to work with the Department of Justice in prosecuting criminal cases as provided for under the act. In 2011, a Federal prosecutor sought the 

first-ever criminal indictments under the act and as a result, a well-known, winning 

trainer in the Spotted Saddle Horse industry is serving a prison sentence of over 
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1 year. A former Walking Horse Trainers’ Association Trainer of the Year and winner of the Tennessee Walking Horse World Grand Championship was recently indicted on 52 counts (18 of them felony) of violating the act and is awaiting trial. 

While these are significant actions which should have a deterrent effect, there are 

many other violators who go undetected, and many cases which go unprosecuted— 

all due to a lack of resources. USDA needs enhanced resources to carry out its responsibilities under this act, as Congress, and the public, expects. 

In years past, inspections were limited to physical observation and palpation by 

the inspector. Protocols for the use of new technologies, such as thermography and 

‘‘sniffer’’ devices (gas chromatography/mass spectrometry—or GC/MS—machines), 

have been implemented, which can help inspectors identify soring more effectively 

and objectively. The results of USDA’s recent GC/MS testing for prohibited foreign 

substances used by violators on the legs of horses (either to sore them, or to mask 

underlying soring and evade detection by inspectors) are staggering: 97.6 percent of 

the samples taken at various Tennessee Walking Horse competitions in 2011 tested 

positive for illegal foreign substances, and 86 percent tested positive in 2010. 

Effective though this inspection protocol may be, due to budget constraints, USDA 

has been unable to purchase and put enough of this testing into use in the field, 

allowing for industry players to continually evade detection. In 2011, USDA was 

able to afford to collect and test samples at only three of the industry’s largest 

shows; in 2010, only five. With increased funding, the USDA could purchase more 

equipment and hire and train more inspectors to use it properly, greatly increasing 

its ability to enforce the HPA. 

Currently, when USDA inspectors arrive at shows affiliated with some industry 

organizations, many of the exhibitors load up and leave to avoid being caught with 

sored horses. While USDA could stop these trailers on the way out, agency officials 

have stated that inspectors are wary of going outside of their designated inspection 

area, for fear of harassment and physical violence from exhibitors. Armed security 

is frequently utilized to allow such inspections, at additional expense to this program. The fact that exhibitors feel they can intimidate Government officials without 

penalty is a testament to the inherent shortcomings of the current system. 

Lack of a consistent presence by USDA officials at events featuring Tennessee 

Walking Horses, Racking Horses, Spotted Saddle Horses and other related breeds 

has fostered a cavalier attitude among industry insiders, who have not stopped their 

abuse, but have only become more clandestine in their soring methods. The continued use of soring to gain an advantage in the show ring has tainted the gaited horse 

industry as a whole, and creates an unfair advantage for those who are willing to 

break the law in pursuit of victory. Besides the indefensible suffering of the animals 

themselves, the continued acceptance of sored horses in the show ring prevents 

those with sound horses from competing fairly for prizes, breeding fees and other 

financial incentives, while those horse owners whose horses are sored may unwittingly suffer property damage and be duped into believing that their now abused, 

damaged horses are naturally superior. 

The egregious cruelty of soring is not only a concern for animal protection and 

horse industry organizations, but also for veterinarians. In 2008, the American Association of Equine Practitioners (AAEP) issued a white paper condemning soring, 

calling it ‘‘one of the most significant welfare issues faced by the equine industry.’’ 

It called for the abolition of the DQP Program, saying ‘‘the acknowledged conflicts 

of interest which involve many of them cannot be reasonably resolved, and these 

individuals should be excluded from the regulatory process.’’ The AAEP further stated, ‘‘The failure of the HPA to eliminate the practice of soring can be traced to the 

woefully inadequate annual budget... allocated to the USDA to enforce these 

rules and regulations.’’ 

The USDA Office of Inspector General conducted an audit of the Horse Protection 

Program, and issued its final report in September 2010. The report recommends the 

abolition of the DQP program, and an increase in funding for APHIS enforcement 

of the Horse Protection Act. The agency concurred with the findings and recommendations in the report, specifically Recommendation 2: ‘‘Seeking the necessary 

funding from Congress to adequately oversee the Horse Protection Program,’’ indicating that it would develop a budgeting and staffing plan to phase in the resources 

needed to adequately oversee the Horse Protection Program. 

It is unacceptable that nearly 40 years after passage of the Horse Protection Act, 

the USDA still lacks the resources needed to end this extreme form of abuse. It is 

time for Congress to give our public servants charged with enforcing this act the 

support and resources they want and need to fulfill their duty to protect these 

horses as effectively and safely as possible. 

We appreciate the opportunity to share our views about this serious problem, and 

thank you for your consideration of our request. 
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UNDERSIGNED ORGANIZATIONS

Friends of Sound Horses, Inc.; former U.S. Senator Joseph Tydings; Animal Welfare Institute; American Society for the Prevention of Cruelty to Animals (ASPCA); 

American Horse Protection Association; American Horse Defense Fund; Plantation 

Walking Horses of Maryland; Red Rover; National Plantation Walking Horse Association; Plantation Walking Horse Association of California; United Pleasure Walking Horse Association; Gaitway Walking Horse Association; International Pleasure 

Walking Horse Registry; Sound Horse Outreach (SHO); One Horse At a Time, Inc. 

Horse Rescue; Northern California Walking Horse Association; Tennessee Walking 

Horse Association of Oklahoma; Pure Pleasure Gaited Horse Association; Northwest 

Gaited Horse Club; New York State Plantation Walking Horse Club; Northwest 

Pleasure Tennessee Walking Horse Association. 

PREPARED STATEMENT OF THE WILDLIFE SOCIETY

The Wildlife Society appreciates the opportunity to submit testimony concerning 

the fiscal year 2013 budgets for the Animal and Plant Health Inspection Service, 

National Institute of Food and Agriculture, Natural Resources Conservation Service, 

and Farm Service Agency. The Wildlife Society represents over 11,000 professional 

wildlife biologists and managers dedicated to sound wildlife stewardship through 

science and education. The Wildlife Society is committed to strengthening all Federal programs that benefit wildlife and their habitats on agricultural and other private land. 

Animal and Plant Health Inspection Service 

Wildlife Services, a unit of APHIS, is responsible for controlling wildlife damage 

to agriculture, aquaculture, forest, range, and other natural resources, monitoring 

wildlife-borne diseases, and managing wildlife at airports. Its activities are based 

on the principles of wildlife management and integrated damage management, and 

are carried out cooperatively with State fish and wildlife agencies. The President’s 

request is a $7 million decrease from fiscal year 2012 and a $10 million decrease 

from fiscal year 2011. In recognition of the important work that Wildlife Services 

performs regarding methods development and wildlife damage management, we request that Congress appropriate $94 million to Wildlife Services in fiscal year 2013. 

A key budget line in Wildlife Service’s operations is Methods Development, which 

funds the National Wildlife Research Center (NWRC). Much of the newest research 

critical to State wildlife agencies is being performed at NWRC. In order for State 

wildlife management programs to be the most up-to-date, the work of the NWRC 

must continue. We recommend funding Methods Development at $18 million in fiscal year 2013. 

National Institute of Food and Agriculture 

The Renewable Resources Extension Act (RREA) provides an expanded, comprehensive extension program for forest and rangeland renewable resources. RREA 

funds, which are apportioned to State Extension Services, effectively leverage cooperative partnerships at an average of four to one, with a focus on private landowners. The need for RREA educational programs is greater than ever because of 

continuing fragmentation of land ownership, urbanization, diversity of landowners 

needing assistance, and increasing societal concerns about land use and increasing 

human impacts on natural resources. The Wildlife Society recommends that the Renewable Resources Extension Act be funded at $10 million. 

The McIntire-Stennis Cooperative Forestry Program is essential to the future of 

resource management on non-industrial private forestlands while conserving natural resources, including fish and wildlife. As the demand for forest products grows, 

privately held forests will be increasingly needed to supplement supplies obtained 

from national forest lands. However, commercial trees take many decades to 

produce. In the absence of long-term research, such as that provided through 

McIntire-Stennis, the Nation might not be able to meet future forest-product needs 

as resources are harvested. We appreciate the $33 million in funding allocated in 

the fiscal year 2012 appropriations process and urge that amount to be continued 

in fiscal year 2013. 

Natural Resources Conservation Service 

Farm bill conservation programs are more important than ever, given the huge 

backlog of qualified applicants, increased pressure on farmland from biofuels development, urban sprawl, and the concurrent declines in wildlife habitat and water 

quality. The Natural Resources Conservation Service (NRCS), which administers 
258 

many farm bill conservation programs, is one of the primary Federal agencies ensuring our public and private lands are made resilient to climate change. NRCS does 

this through a variety of programs that are aimed at conserving land, protecting 

water resources, and mitigating effects of climate change. 

One key program within the overall NRCS discretionary budget is Conservation Operations. The total fiscal year 2013 request for Conservation Operations is $828 

million, level with fiscal year 2012 but down from $871 million in fiscal year 2011. 

Conservation Operation’s Technical Assistance (TA) subactivity provides funding for 

NRCS to support implementation of the various farm bill programs. The fiscal year 

2013 budget recommends level funding for TA, which is a decrease of $26 million 

from the fiscal year 2011 level of $755 million. The Wildlife Society encourages you 

to return funding for TA to the fiscal year 2011 level of $755 million. 

Overall, The Wildlife Society believes more attention to TA delivery is needed. 

Changes in the 2008 farm bill greatly increased the number of conservation programs NRCS was required to support through delivery of TA. In addition, Congress 

expanded TA eligible activities in the 2008 farm bill to include conservation planning, education and outreach, assistance with design and implementation of conservation practices, and related TA services that accelerate conservation program 

delivery. TA will require funding levels from OMB that are more than what was 

historically allocated if NRCS is to fulfill congressional intent as expressed in the 

2008 farm bill. Recently, Congress allowed the use of mandatory funds for TA and, 

under current economic conditions, The Wildlife Society believes that such funds 

must continue to be utilized for effective delivery to occur. The Wildlife Society 

urges Congress to authorize up to 30 percent of each mandatory program’s funding 

for Technical Service Provider provisions as mandated by the 2008 farm bill and additional technical assistance to provide resources necessary to help meet NRCS TA 

shortfalls. Similarly, we strongly encourage Congress to explore new ways of funding technical assistance in fiscal year 2013 and beyond. 

The Wildlife Society also supports the continuation of funding for the Conservation Effects Assessment Project. Information gathered from this effort will greatly 

assist in monitoring accomplishments and identifying ways to further enhance effectiveness of NRCS programs. 

The Wildlife Society recommends farm bill conservation programs be funded at 

levels mandated in the 2008 farm bill. Demand for these programs continues to 

grow during this difficult economic climate at a time when greater assistance is 

needed to address natural resource challenges and conservation goals, including climate change, soil quality deficiencies, declining pollinator health, disease and 

invasive species, water quality and quantity issues, and degraded, fragmented and 

lost habitat for fish and wildlife. 

We would like to specifically highlight the Wildlife Habitat Incentive Program 

(WHIP), a voluntary program for landowners who want to improve wildlife habitat 

on agricultural, non-industrial, and Indian land. WHIP plays an important role in 

protecting and restoring America’s environment, and is doubly important because it 

actively engages public participation in conservation. We appreciate the proposed increase in WHIP funding, to $73 million in fiscal year 2013 from $50 million in fiscal 

year 2012, but would urge Congress to fully fund WHIP at $85 million. 

The Voluntary Public Access and Habitat Incentives Program was first authorized 

in the Food, Conservation, and Energy Act of 2008 (2008 farm bill) for $50 million 

for fiscal year 2008–2012, and was administered by the Farm Service Agency. This 

funding has expired, and the fiscal year 2013 budget includes $5 million for the program within the NRCS budget. The Wildlife Society commends the administration 

for continuing to fund this program in fiscal year 2013. These funds will assist State 

and Tribal governments with needed resources to provide the public with additional 

outdoor opportunities. In addition, increased public access opportunities will help 

create jobs and stimulate rural economies. Continuity of program funding is critical 

to these programs that rely on landowner interest across multiple years. 

Farm Service Administration 

The administration’s request would increase funding for the Conservation Reserve 

Program (CRP) to $2.2 billion in fiscal year 2013, up from $2.07 billion in fiscal year 

2012. This increase assumes a CRP enrollment of 6 million acres in 2012. The Wildlife Society applauds FSA efforts to have a 6 million acre general sign-up in 2012, 

and to more fully utilize CRP enrollment authority to address conservation needs. 

Lands enrolled in CRP are important for the conservation of soil on some of the 

Nation‘s most erodible cropland. These lands also contribute to water quantity and 

quality, provide habitat for wildlife that reside on agricultural landscapes, sequester 

carbon, and provide a strategic forage reserve that can be tapped as a periodic compatible use in times when other livestock forage is limited due to drought or other 
259 

natural disasters. We strongly encourage Congress to fund CRP at a level that fully 

utilizes program enrollment authority through CRP general sign-up. We are pleased 

with and support the general sign-up and target enrollment of 6 million acres FSA 

included in the fiscal year 2012 budget. However, we are concerned about the proposed reduction in the acreage cap from 32 million to 30 million. 

Thank you for considering the views of wildlife professionals. We look forward to 

working with you and your staff to ensure adequate funding for wildlife conservation. Please feel free to contact Laura Bies, Director of Government Affairs, at 

laura@wildlife.org if you need further information or have any questions. 

LETTER FROM THE USA RICE FEDERATION

MARCH 30, 2012. 

Hon. HERB KOHL, Chairman, 

Hon. ROY BLUNT, Ranking Member, 

Subcommittee on Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies, Committee on Appropriations, U.S. Senate, Washington, 

DC. 

Re: USA Rice Federation’s Fiscal Year 2013 Agriculture Appropriations Requests 

DEAR CHAIRMAN KOHL AND RANKING MEMBER BLUNT: This is to convey the rice 

industry’s requests for fiscal year 2013 funding and related policy issues for selected 

programs under the jurisdiction of your subcommittee. The USA Rice Federation appreciates your assistance in making this letter a part of the hearing record. 

The USA Rice Federation is the global advocate for all segments of the U.S. rice 

industry with a mission to promote and protect the interests of producers, millers, 

merchants, and allied businesses. USA Rice members are active in all major riceproducing States: Arkansas, California, Florida, Illinois, Kentucky, Louisiana, Mississippi, Missouri, Tennessee, and Texas. The USA Rice Producers’ Group, the USA 

Rice Council, the USA Rice Millers’ Association, and the USA Rice Merchants’ Association are members of the USA Rice Federation. The rice industry annually supports about 128,000 jobs and more than $34 billion of economic output nationally. 

USA Rice understands the budget constraints the subcommittee faces when developing the fiscal year 2013 appropriations bill. We appreciate your past support for 

initiatives that are critical to the rice industry and look forward to working with 

you to meet the continued needs of research, food aid, and market development in 

the future. 

A healthy U.S. rice industry is also dependent on the program benefits offered by 

the Farm Bill. Therefore, we oppose any attempts to modify the farm-safety-net support levels provided by this vital legislation through more restrictive payment limitations or other means and encourage the subcommittee and committee to resist 

such efforts during the appropriations process, especially given that the 2008 Farm 

Bill will be debated and reauthorized this year, is paid for, and represents a fiveyear contract with America’s producers. USA Rice also strongly opposes reducing 

the farm-safety net to appropriate funds for other Federal programs. We urge that 

the President’s fiscal year 2013 legislative proposals be rejected that would eliminate farm-bill commodity programs, change crop-insurance provisions, and reduce 

conservation-program funding. We also urge that the Natural Resources Conservation Service technical-assistance user-fee proposal be rejected. 

A list of the programs the USA Rice Federation supports for appropriations in fiscal year 2013 are as follows: 

MARKET ACCESS

Exports are critical to the U.S. rice industry. About 50 percent of the U.S. crop 

is exported annually in a highly competitive world-rice market. Those directly involved in U.S. rice exports contributed $6 billion in output and supported more than 

14,000 jobs. The Market Access Program (MAP) and Foreign Market Development 

(FMD) Program play key roles in helping to promote U.S. rice sales overseas. USA 

Rice Federation industry members spend $4 in matching funds for each $1 of FAS 

funds received. The USA Rice Federation uses MAP and FMD funding in over 20 

markets to conduct successful export-market-development initiatives. 

The Foreign Market Development Program allows USA Rice to focus on importer, 

foodservice, and other non-retail promotion activities around the world. This program should be fully funded for fiscal year 2013 at the authorized level of $34.5 million. 

The Market Access Program (MAP) allows USA Rice to concentrate on consumer 

promotion and other activities for market expansion around the world. This program 
260 

should also be fully funded for fiscal year 2013 at the authorized level of $200 million. 

In addition, the Foreign Agricultural Service should be funded to the fullest degree possible to ensure adequate support for trade-policy initiatives and oversight 

of export programs. These programs are critical for the economic health of the U.S. 

rice industry. 

FOOD AID

Food-aid sales historically account for an important portion of U.S. rice exports. 

We urge the subcommittee to fund Public Law 480 Title I. No Title I funding has 

been provided since fiscal year 2006. At a minimum, fiscal year 2013 funding should 

be the same as 2006. Public Law 480 Title I is our top food-aid priority and we support continued funding in order to meet international demand. 

For Public Law 480 Title II, we strongly support funding Title II up front at the fully authorized $2.5 billion level, which would help to make possible satisfying the 

2.5 million MT amount required by statute. We encourage the subcommittee to fund 

Title II at the higher level to ensure consistent tonnage amounts for the rice industry. We strongly oppose any shifting of Title II funds, which have traditionally been 

contained within USDA’s budget. 

We believe all U.S. food-aid funds should continue to be used for food-aid purchases of rice and other commodities from only U.S. origin. 

USA Rice supports continued funding at fiscal year 2006 levels, at a minimum, 

for the Food for Progress Program’s Public Law 480 Title I-sourced funding. For the 

program’s Commodity Credit Corporation funding component, USDA’s fiscal year 

2013 budget estimate of $170 million is requested. Funding for this program is important to improve food security for food-deficit nations. 

The McGovern-Dole International Food for Education and Child Nutrition Program is a proven success and it is important to provide steady, reliable funding for 

multi-year programming. USA Rice supports funding at the $300 million level for 

this education initiative because it efficiently delivers food to its targeted group, 

children, while also encouraging education, a primary stepping-stone for populations 

to improve economic conditions. 

RESEARCH

U.S. agricultural-research needs are great and the challenges are plentiful. USA 

Rice strongly supports funding for the core-capacity programs at land-grant institutions, USDA’s intramural-research activities, and the National Institute of Food and 

Agriculture and its Agriculture and Food Research Initiative at levels that would 

continue the commitment to strong agricultural research by and through USDA. 

FARM SERVICE AGENCY, RISK MANAGEMENT AGENCY, AND NATURAL RESOURCES

CONSERVATION SERVICE

We encourage the subcommittee to provide adequate funding so the agencies can 

deliver essential programs and services, including for improved computer hardware 

and software. Our members fear a serious reduction in service if sufficient funds are 

not allocated. 

Please feel free to contact us if you would like further information about the programs we have listed. Additional background information is available for all of the 

programs we have referenced; however, we understand the volume of requests the 

subcommittee receives and have restricted our comments accordingly. 

Thank you for your consideration of our recommendations. 

Sincerely, 

REECE LANGLEY, 

Vice President, Government Affairs. 

PREPARED STATEMENT OF THE WISCONSIN WALNUT COUNCIL

Mister Chairman, Ranking Member and Members of the subcommittee, thank you 

for the opportunity to submit testimony for the record. I am writing to share my 

concerns regarding a recently recognized Thousand Cankers Disease (TCD) that 

poses an enormous economic and ecological risk to our Nation’s black walnut resources. Over the past decade, TCD has caused the death of millions of black walnut 

trees in nine western States (Arizona, California, Colorado, Idaho, Oregon, New 

Mexico, Nevada, Utah, and Washington) and recently has been discovered in the native walnut range (Tennessee, Virginia and Pennsylvania). The USDA–APHIS has 

estimated the standing value of walnut timber as being $539 Billion. This does not 
261 

include potential loss of: Jobs related to logging, transportation, and domestic milling; derivatives of the domestic milling industry to make veneer and lumber for furniture, cabinetry, paneling, flooring, and gun stocks; export market accounts for 

about 60 percent of the harvested logs; and nuts are shelled into nutmeats and the 

shells are processed for many industrial uses. 

The negative economic impacts of TCD will be felt by private landowners with immature walnut timber and by home owners with millions of walnut trees in residential areas of the Midwest and Eastern States. It will be any ugly site and very expensive to safely remove all the walnut trees as they succumb to TCD over the next 

couple of decades if this disease is not contained, suppressed, and locally eradicated. 

Research efforts to date have been limited to monitoring, ecological studies of the 

walnut twig beetle, epidemiology of the fungal pathogen, and development of phytosanitation treatment of walnut logs harvested in quarantined areas. Insecticide and 

fungicide application is not feasible or practical as a means of controlling the spread 

of TCD. Development of biological insect control of the walnut twig beetle is expected to be the most effective and feasible technique in stopping the advancement 

of TCD through the native range of black walnut. 

While States are attempting to stop the spread of TCD through surveys and quarantines, greater Federal assistance and funding are needed. I request dedicated 

funding be allocated to the USDA–ARS for leadership in the development of biological insect control techniques of the walnut twig beetle and to the USDA–FS for continued efforts in monitoring for TCD for fiscal year 2013. 

What Is TCD? 

TCD is a recently recognized disease in which a tiny walnut twig beetle 

(Pityophthorus juglandis) spreads a fungal organism (Geosmithia morbida) that 

causes cankers under the bark which prevents nutrient flow to the foliage leading 

to dieback of branches and ultimately death to the tree. While the walnut twig beetle advances only a mile or two per year, humans are the vector that spread TCD 

great distances within days by hauling walnut slabs with fresh bark attached that 

harbor the tiny beetles and fungal spores. Such shipments are believed to be the 

reason TCD moved into the native walnut range from the western States. Movement of firewood, logs, stumps, and burls with fresh bark attached can spread the 

disease great distances. 

Need for Greater Federal Funding and Specific Directives 

The USDA–APHIS considers both the walnut twig beetle and the fungal pathogen 

to be indigenous to the USA (historical evidence shows them to reside on a different 

walnut species in Arizona and New Mexico). Since neither is considered exotic to 

the USA, APHIS is not productively serving any role in combating TCD. 

Federal funding needs to be directed to the USDA–ARS to lead research and development of techniques that will contain, suppress, or potentially locally eradicate 

the walnut twig beetle. Additional funding needs to be directed to the USDA–FS for 

continued effort in monitoring and development of phyto-sanitization treatment of 

walnut logs harvested in quarantined areas. 

I thank the committee for this opportunity to provide testimony on this important 

subject. Please do not hesitate to contact me if you should require additional information. 

LETTER FROM THE WYOMING STATE ENGINEER’S OFFICE

HERSCHLER BUILDING, 4–E, 

Cheyenne, Wyoming, March 29, 2012. 

Hon. HERB KOHL, Chairman, 

Hon. ROY BLUNT, Ranking Member, 

Subcommittee on Agriculture, Rural Development, Food and Drug Administration, 

and Related Agencies, Committee on Appropriations, U.S. Senate, Washington, 

DC. 

Re: Support for Designation to the Colorado River Basin Salinity Control Program 

of Not Less Than $18 Million of the Total Environmental Quality Incentives 

Program (EQIP) Funding Recommended in the President’s Fiscal Year 2013 

Budget 

DEAR CHAIRMAN KOHL AND RANKING MEMBER BLUNT: This letter is sent in support of the designation of $18 million of the fiscal year 2013 Environmental Quality 

Incentive Program (EQIP) funding for the Department of Agriculture’s (USDA’s) 

Colorado River Salinity Control (CRSC) Program. Realizing that agricultural on- 
262 

1These strategies include reducing deep percolation of irrigation water through salt-bearing 

shale formations below farmlands across the Upper Colorado River Basin through improving irrigation water application efficiency by changing from flood and furrow irrigation methods to 

gated pipe, side-roll sprinkler and center-pivot sprinkler and low-energy, precision application 

(LEPA) irrigation practices. 

farm strategies 1 provided some of the most cost-effective strategies to control salinity, the Congress in 1984 directed the USDA to implement its CRSC Program. Since 

enactment of the Federal Agriculture Improvement and Reform Act of 1996 (FAIRA; 

Public Law 104–127), the USDA’s CRSC Program is a component program within 

EQIP. Wyoming views the inclusion of the CRSC Program in EQIP as a congressional recognition of the Federal obligation and commitment to maintaining the 

EPA-adopted, basin-wide water quality standards for salinity in the Colorado River. 

The USDA has played a vital role in meeting that commitment over the past 25 

years we have observed and encouraged Agriculture’s efforts effectively reducing 

salt loading into the Colorado River system through proven and cost-effective irrigation water application and management practices. Each of the seven Colorado River 

Basin States, acting collectively through the Colorado River Basin Salinity Control 

Forum, have actively assisted the U.S. Department of Agriculture in implementing 

its unique, collaborative and important program. 

Established in 1973, the seven State Colorado River Basin Salinity Control Forum 

coordinates with the Federal Government on the maintenance of the basin-wide 

Water Quality Standards for Salinity in the Colorado River System. The Forum is 

composed of gubernatorial representatives and serves as a liaison between the seven 

States and the Secretaries of the Interior and Agriculture and the Administrator of 

the Environmental Protection Agency. The Forum advises the Federal agencies on 

the progress of efforts to control the salinity of the Colorado River. Its annual recommendation process includes suggesting to the Department of Agriculture the 

funding amount the Forum believes USDA should expend in the subsequent 2 years 

for its CRSC Program. The combined efforts of the Basin States, the Bureau of Reclamation and the USDA have resulted in one of the Nation’s most successful 

nonpoint source control programs. 

The Colorado River provides municipal and industrial water for nearly 33 million 

people and irrigation water to approximately 4 million acres of land in the United 

States. The River is also the water source for some 3 million people and 500,000 

acres in Mexico. The high concentration of total dissolved solids (e.g., the water’s 

salinity concentration) in the water limits users’ abilities to make the greatest use 

of this water supply. This remains a major issue and continuing concern in both the 

United States and Mexico. The water’s salinity concentration especially affects agricultural, municipal, and industrial water users. The Bureau of Reclamation presently estimates direct and computable salinity-related damages in the United States 

amount to more than $300 million per year. 

At its recent October 2012 meeting, the Forum recommended that the USDA 

CRSC Program expend not less than $18 million of the Environmental Quality Incentive Program’s funding. In the Forum’s judgment, this funding is necessary to 

implement one of the most successful Federal/State cooperative nonpoint source pollution control programs in the United States. 

The State of Wyoming greatly appreciates the Subcommittee’s support of the Colorado River Salinity Control Program in past years. We continue to believe this important basin-wide water quality improvement program merits support by your Subcommittee. We request that your Subcommittee direct the allocation of $18 million 

of the Environmental Quality Incentives Program funding for the USDA’s CRSC 

Program during fiscal year 2013. Thank you in advance for your consideration and 

this statement’s inclusion in the record for 2013 appropriations. 

Respectfully submitted, 

PATRICK T. TYRRELL, 

Wyoming State Engineer, 

Member, Colorado River Basin, 

Salinity Control Forum. 

DAN S. BUDD, 

Interstate Stream Commissioner, 

Member, Colorado River Basin, 

Salinity Control Forum. 
(i) 

LIST OF WITNESSES, COMMUNICATIONS, AND 

PREPARED STATEMENTS 

Page 

Ad Hoc Coalition, Prepared Statement of the ....................................................... 163 

American: 

Commodity Distribution Association, Prepared Statement of the ............... 164 

Farm Bureau Federation, Prepared Statement of the .................................. 166 

Forest & Paper Association, Prepared Statement of the .............................. 168 

Honey Producers Association, Inc., Prepared Statement of the ................... 169 

Indian Higher Education Consortium, Prepared Statement of the .............. 174 

Phytopathological Society, Prepared Statement of the ................................. 177 

Public Power Association, Prepared Statement of the .................................. 178 

Society: 

For: 

Microbiology, Prepared Statement of the ......................................... 178 

Nutrition, Prepared Statement of the .............................................. 182 

The Prevention of Cruelty to Animals, Prepared Statement of 

the .................................................................................................... 183 

Of: 

Agronomy; Crop Science Society of America; and Soil Science 

Society of America, Prepared Statement of the ........................... 180 

Plant Biologists, Prepared Statement of the ................................... 187 

Animal Welfare Institute, Prepared Statement of the ......................................... 188 

Blunt, Senator Roy, U.S. Senator From Missouri: 

Questions Submitted by................................................................................. 74, 145 

Statement of ....................................................................................................... 2, 90 

Catholic Relief Services, Prepared Statement of ................................................... 191 

Cochran, Norris, Deputy Assistant Secretary, Office of Budget, Department 

of Health and Human Services ........................................................................... 89 

Collins, Senator Susan M., U.S. Senator From Maine, Questions Submitted 

by ........................................................................................................................... 78 

Colorado: 

River: 

Basin Salinity Control Forum, Prepared Statement of the ................... 194 

Board of California, Prepared Statement of the ..................................... 196 

State University, Prepared Statement of ....................................................... 197 

Copperhead Hill Ranch—John A. and Karen M. Buchanan, Owners, Prepared 

Statement of ......................................................................................................... 198 

Cystic Fibrosis Foundation, Prepared Statement of the ...................................... 199 

Farmers Market Coalition, Prepared Statement of the ....................................... 201 

Federation of American Societies for Experimental Biology, Prepared Statement of the ............................................................................................................ 203 

Feinstein, Senator Dianne, U.S. Senator From California, Questions Submitted by ............................................................................................................... 134 

Florida Home Partnership, Inc., Prepared Statement of ..................................... 202 

Fong, Hon. Phyllis K., Inspector General, Office of Inspector General, Department of Agriculture, Prepared Statement of ..................................................... 153 

Friends of Agricultural Research—Beltsville, Inc., Prepared Statement of ....... 204 

Glauber, Joseph, Chief Economist, Office of the Secretary, Department of 

Agriculture ............................................................................................................ 1 

Global Health Technologies Coalition, Prepared Statement of the ..................... 206 
Page

ii 

Hamburg, Dr. Margaret, Commissioner, Food and Drug Administration, Department of Health and Human Services .......................................................... 89 

Prepared Statement of ..................................................................................... 94 

Questions Submitted to .................................................................................... 123 

Statement of ...................................................................................................... 91 

Harkin, Senator Tom, U.S. Senator From Iowa, Questions Submitted by ......... 77 

Hoeven, Senator John, U.S. Senator From North Dakota, Questions Submitted by ............................................................................................................... 157 

Housing Development Alliance, Inc., Prepared Statement of the ....................... 209 

Hunger Task Force, Prepared Statement of the ................................................... 210 

Izaak Walton League of America, Prepared Statement of the ............................ 212 

Johnson, Senator Tim, U.S. Senator From South Dakota, Questions Submitted by ............................................................................................................... 82 

Kohl, Senator Herb, U.S. Senator From Wisconsin: 

Opening Statements of ...................................................................................... 1, 89 

Questions Submitted by................................................................................. 60, 123 

Lautenberg, Senator Frank R., U.S. Senator From New Jersey, Questions 

Submitted by ........................................................................................................ 157 

Little Dixie Community Action Agency, Inc., Prepared Statement of the .......... 213 

Lummi Nation, Prepared Statement of the ........................................................... 214 

Massachusetts Vegetable & Flower Grower, Prepared Statement of the ........... 216 

McGarey, Patrick, Assistant Commissioner, Office of Budget, Food and Drug 

Administration, Department of Health and Human Services .......................... 89 

Merrigan, Kathleen, Deputy Secretary, Office of the Secretary, Department 

of Agriculture ........................................................................................................ 1 

Metropolitan Water District of Southern California, Prepared Statement of 

the .......................................................................................................................... 218 

Moran, Senator Jerry, U.S. Senator From Kansas, Questions Submitted 

by......................................................................................................................... 82, 149 

National: 

Association of: 

County and City Health Officials (NACCHO), Prepared Statement 

of the ....................................................................................................... 219 

State Energy Officials (NASEO), Prepared Statement of the ............... 221 

Commodity Supplemental Food Program Association (NCSFPA), Prepared 

Statement of the ........................................................................................... 221 

Organic Coalition (NOC), Prepared Statement of the ................................... 223 

Rural Housing Coalition (NRHC), Prepared Statement of the ..................... 226 

Sustainable Agriculture Coalition (NSAC), Prepared Statement of the ...... 228 

Northwest Regional Housing Authority, Prepared Statement of the .................. 232 

Oregon Water Resources Congress, Prepared Statement of the .......................... 232 

Organic Farming Research Foundation, Prepared Statement of the .................. 234 

Pickle Packers International, Inc., Prepared Statement of .................................. 236 

Pryor, Senator Mark, U.S. Senator From Arkansas, Questions Submitted 

by ........................................................................................................................... 84 

Rural: 

Coalition/Coalicio ́n Rural, et. al, Letter From the ......................................... 241 

Housing Development Corporation, Prepared Statement of the .................. 244 

School Nutrition Association, Prepared Statement of the .................................... 247 

Self-Help: 

Enterprises, Prepared Statement of the ......................................................... 245 

Housing Corporation of Hawaii, Prepared Statement of the ........................ 247 

Society for Women’s Health Research, Prepared Statement of the ..................... 249 

Strom, Leland A., Chairman and Chief Executive Officer, Farm Credit Administration, Prepared Statement of .................................................................. 158 

The: 

Humane Society of the United States, Prepared Statement of .................... 251 

Equine Protection, Prepared Statement of .............................................. 255 

Wildlife Society, Prepared Statement of ......................................................... 257 
Page

iii 

USA Rice Federation, Letter From the .................................................................. 259 

Vilsack, Hon. Thomas, Secretary, Office of the Secretary, Department of Agriculture ................................................................................................................... 1 

Prepared Statement of ..................................................................................... 5 

Summary Statement of .................................................................................... 3 

Wisconsin Walnut Council, Prepared Statement of the ....................................... 260 

Wyoming State Engineer’s Office, Letter From the .............................................. 261 

Young, Michael, Budget Officer, Office of Budget and Program Analysis, 

Department of Agriculture .................................................................................. 1 

(v) 

SUBJECT INDEX 

DEPARTMENT OF AGRICULTURE 

OFFICE OF INSPECTOR GENERAL

Goal 1: Strengthen USDA’s Safety and Security Measures for Public Health ... 154 

Goal 2: Strengthening Program Integrity and Improving Benefit Delivery ....... 155 

Goal 3: OIG Work in Support of Management Initiatives ................................... 156 

Goal 4: Improving USDA’s Stewardship of Natural Resources ........................... 157 

Office of Inspector General’s (OIG’s): 

Fiscal Year 2013 Budget Request ................................................................... 157 

Oversight of Recovery Act Programs .............................................................. 153 

OFFICE OF THE SECRETARY

Page 

Additional Committee Questions ............................................................................ 60 

Agricultural: 

Marketing Service (AMS) ................................................................................. 66 

Research............................................................................................................ 41, 42 

Facilities ..................................................................................................... 21 

Service ........................................................................................................ 62 

Fiscal Year 2012 Funding ................................................................. 84 

Grazing Research ............................................................................... 40 

Lab Closures....................................................................................... 39, 75 

Program Reallocation ......................................................................... 80 

Agriculture Research Funding ................................................................................ 36 

Animal: 

And Plant Health Inspection Service (APHIS) .............................................. 63 

Funding and Staffing ................................................................................ 28 

Welfare .............................................................................................................. 64 

Beginning Farmers .................................................................................................. 22 

Biotechnology Regulatory Services (BRS) .............................................................. 65 

Blender Pumps ......................................................................................................... 26 

Blueprint for Stronger Service ........................................................................ 18, 34, 41 

Broadband: 

Access ................................................................................................................ 22 

Program Rule .................................................................................................... 30 

Budget Impact of: 

Competitive Standards Rule ............................................................................ 77 

School Meals Regulations ................................................................................ 76 

Capital Asset and Construction Plan ..................................................................... 75 

Catfish Inspection .................................................................................................... 86 

Program ............................................................................................................. 24 

Civil Rights .............................................................................................................. 42, 72

Closing Costs of Research Laboratories ................................................................. 76 

Community Facilities .............................................................................................. 70 

Competitive Food Rule ............................................................................................ 82 

Conservation ............................................................................................................ 66 

Programs ........................................................................................................... 24 

Country of Origin Labeling ..................................................................................... 83 

Crop Insurance ......................................................................................................... 38 

Dale Bumpers Small Farms Research Center ....................................................... 85 

Delta Obesity Prevention Unit ............................................................................... 86 

Diversity of Rural Electric Programs ..................................................................... 74 

Extramural Research .............................................................................................. 75 
Page

vi 

Farm Service Agency (FSA): 

Information Technology (IT) ............................................................................ 15 

Office: 

Closures ...................................................................................................... 86 

Consolidation............................................................................... 17, 18, 33, 35 

Criteria ................................................................................................ 17 

Field Office Closings ................................................................................................ 60 

Food: 

For Peace Title II Grants ................................................................................. 27 

Safety ................................................................................................................. 78 

And Inspection Service (FSIS) ................................................................. 60 

Poultry Inspection .............................................................................. 12 

Free Trade Agreements With Colombia and Panama .......................................... 74 

House Budget Resolution ........................................................................................ 83 

Housing ..................................................................................................................... 69

International Food Assistance ................................................................................ 27 

Lacey Act .................................................................................................................. 65 

Lean Finely Textured Beef (LFTB).......................................................... 20, 21, 77, 79 

National: 

Institute of Food and Agriculture (NIFA) Crop Protection Program ........... 80 

School Lunch Program ..................................................................................... 79 

Non-O157 .................................................................................................................. 61 

Northeast Regional Agricultural Research ............................................................ 81 

Nutrition ................................................................................................................... 71

Programs Fraud Detection ............................................................................... 14 

Office Closures ......................................................................................................... 82 

Pesticide Recordkeeping Program .......................................................................... 66 

Research Lab Closures ............................................................................................ 31 

Rural: 

Development ..................................................................................................... 36, 68 

Jobs Accelerator ................................................................................................ 70 

Streamline: 

Decisions for Genetically Engineered Plants ................................................. 28 

Veterinary Biologics Licensing Process .......................................................... 29 

Sun Grant Initiative ................................................................................................ 83 

Supplemental Nutrition Assistance Program (SNAP): 

Contingency Fund ............................................................................................ 11 

Program Integrity ............................................................................................. 11 

Universal Service Fund (USF) ............................................................................... 19, 20 

Water Bank Program .............................................................................................. 25 

Watershed Rehabilitation Program ........................................................................ 23 

Women, Infants, and Children (WIC) Program .................................................... 25 

Funding ............................................................................................................. 11 

Increases in California ..................................................................................... 13 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

FOOD AND DRUG ADMINISTRATION

Additional Committee Questions ............................................................................ 123 

Addressing Drug Shortages .................................................................................... 143 

Animal Antibiotics ................................................................................................... 148 

Antibiotics ................................................................................................................ 136

Animal ............................................................................................................... 148 

Livestock ........................................................................................................... 110 

Antimicrobial Resistance ......................................................................................... 143 

Arsenic in Chicken Studies ..................................................................................... 135 

Artificial Pancreas ................................................................................................... 119 

Biosimilars ............................................................................................................... 140 

User Fee Program ............................................................................................ 139 

Blood Platelets ......................................................................................................... 131 

Budget: 

Fiscal Year 2013 ............................................................................................... 92 

Request .............................................................................................................. 93 

China ........................................................................................................................ 104 

Import Initiative ............................................................................................... 125 

Cosmetics ............................................................................................................. 103, 128 

Courier ...................................................................................................................... 128 
Page

vii 

Definition of Valid Prescription .............................................................................. 137 

Devices and Diagnostics .......................................................................................... 141 

Drug: 

Approvals .......................................................................................................... 92 

Labeling During Pregnancy ............................................................................. 128 

Shortages ...................................................................................................... 117, 126 

Enforcement ............................................................................................................. 109 

Facilities ................................................................................................................... 115 

Fiscal Year 2013 Budget ......................................................................................... 92 

Food: 

And Drug Administration (FDA): 

Fiscal Year 2013 Budget Request ............................................................ 97 

Investments and Results .......................................................................... 94 

Contact Notification (FCN) User Fee .............................................................. 128 

Safety ............................................................................................................ 123, 136 

Modernization Act (FSMA) .................................................... 92, 93, 101, 136 

Foods and Veterinary Medicine (FVM) Program .................................................. 128 

Foreign Importer ...................................................................................................... 109 

Generics .................................................................................................................... 102 

Globalization ............................................................................................................ 92 

Imported Drugs ........................................................................................................ 108 

Information Technology (IT) ................................................................................... 120 

Progress ............................................................................................................. 121 

Internal Efficiencies ................................................................................................ 147 

KV Pharmaceutical .................................................................................................. 107 

Lab Funding ............................................................................................................. 127 

Life Sciences-Biodefense Laboratory ................................................................... 93, 122 

Maximizing the Impact of FDA Funds .................................................................. 96 

Medical: 

Countermeasures (MCMs).................................................................... 93, 122, 124 

Product Reinspection ........................................................................................ 127 

Research ............................................................................................................ 147 

Menu: 

Boards ................................................................................................................ 106 

Labeling ............................................................................................... 105, 142, 144 

Nano .......................................................................................................................... 115 

National Center for Toxicological Research (NCTR) ............................................ 115 

Collaboration ..................................................................................................... 116 

Nutrition Labeling ................................................................................................... 113 

Standards .......................................................................................................... 139 

Premarket Approval (PMA) .................................................................................... 120 

Preparing FDA for the Challenges Ahead ............................................................. 96 

Prescription Drug User Fee Amendments of 2012 (PDUFA) ............................... 127 

Rare and Neglected Diseases .................................................................................. 131 

Registry of Legitimate Online Pharmacies ............................................................ 137 

Reinspection Fee ...................................................................................................... 103 

Repackaging ............................................................................................................. 109 

Seafood: 

Consumption During Pregnancy ..................................................................... 129 

Safety ................................................................................................................. 130 

User Fees ............................................................................................................... 93, 127 

FARM CREDIT ADMINISTRATION 

Condition of the Farm Credit System (FCS) ......................................................... 160 

Examination Programs for Farm Credit System Banks and Associations ......... 159 

Federal Agricultural Mortgage Corporation (FAMC) ........................................... 161 

Mission of the Farm Credit Administration (FCA) ............................................... 158 

Regulatory and Corporate Activities ...................................................................... 160 

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