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

                OVERSIGHT OF THE U.S. DEPARTMENT OF  
                          AGRICULTURE

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 22, 2015

                               __________

                           Serial No. 114-23
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           

          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov
                         
                         
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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

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

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

                                  (ii)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     1
    Prepared statement...........................................     3
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     4

                                Witness

Vilsack, Hon. Thomas ``Tom'' J., Secretary, U.S. Department of 
  Agriculture, Washington, D.C...................................     5
    Prepared statement...........................................     5
    Submitted questions..........................................    49

 
            OVERSIGHT OF THE U.S. DEPARTMENT OF AGRICULTURE

                              ----------                              

                        WEDNESDAY, JULY 22, 2015

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:00 a.m., in Room 
1300, Longworth House Office Building, Hon. K. Michael Conaway 
[Chairman of the Committee] presiding.
    Members present: Representatives Conaway, Lucas, King, 
Rogers, Thompson, Austin Scott of Georgia, Crawford, 
DesJarlais, Gibson, Hartzler, LaMalfa, Davis, Yoho, Allen, 
Bost, Abraham, Moolenaar, Newhouse, Kelly, Peterson, David 
Scott of Georgia, Costa, Walz, Fudge, DelBene, Vela, Lujan 
Grisham, Kuster, Nolan, Bustos, Maloney, Kirkpatrick, Aguilar, 
Plaskett, Adams, Graham, and Ashford.
    Staff present: Ashley Callen, Carly Reedholm, Christine 
Heggem, Haley Graves, Mollie Wilken, Scott C. Graves, Skyler 
Sowder, John Konya, Anne Simmons, Evan Jurkovich, Lisa Shelton, 
Liz Friedlander, Mary Knigge, Mike Stranz, and Nicole Scott.

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

    The Chairman. Well, good morning. This hearing of the 
Committee on Agriculture for oversight of the U.S. Department 
of Agriculture, will come to order.
    I have asked Rick Crawford from Arkansas to open us up with 
prayer.
    Rick?
    Mr. Crawford. Thank you, Mr. Chairman.
    Father, I bow humbly before you, thankful for every 
blessing of life, Lord, thankful for this country you have 
given us, and, Father, mindful of the great responsibility that 
you have charged us with.
    Father, I would just ask that everything that is said and 
done here today be pleasing in your sight. And we would ask 
that you help us to be civil in our discourse and discerning in 
our comments and dialogue.
    Father, I just pray it all in Jesus' name. Amen.
    The Chairman. Thank you, Rick.
    I want to thank Secretary Vilsack for coming to be with us 
this morning. He has a hard stop at 12:15. He has Cabinet 
responsibilities.
    So, Mr. Secretary, thanks very much for being here this 
morning. Be careful of your knee there on the table.
    I want to welcome him.
    I want to say at the start of this, he and his staff have 
worked really hard to fulfill the multitude of Committee 
requests for oversight information that we have flooded them 
with over the last 7 months, and I appreciate their cooperation 
and efforts to do that and work with our team on that.
    It is Congress' responsibility under the Constitution and 
explicit in House Rules that each of the authorizing Committees 
conduct oversight over the Executive Branch areas of their 
jurisdiction. The American people demand that we hold our 
government accountable for the responsible stewardship of our 
taxpayer dollars, holding us accountable as well.
    Today, we will examine the Department through the lens of 
fraud, waste, and abuse, as identified by the Department's 
Inspector General, Phyllis Fong, and the Government 
Accountability Office, Congress' external audit organization.
    I would like to say a few words about Inspector General 
Fong. She has served the Department since 2002. Her office 
works hard in conducting hundreds of audits and investigations 
each year, all aimed at making the Department more efficient. 
Her investigations, particularly on SNAP cases, ensure that 
those engaged in fraud do not prey on our most vulnerable.
    On behalf of the Committee, I want to thank Inspector 
General Fong and her staff for working with the Committee over 
the past 6 months.
    Oversight is essential to deterring waste, fraud, and abuse 
at Federal departments and agencies. Government employees must 
remember that each time they award a grant or a contract, it is 
the taxpayers' money that they are spending.
    Today, we will examine a few of the programs that the 
Department manages and executes. Over the course of our 
oversight efforts this year, we focused on the Farm Service 
Agency's MIDAS information technology program and the Office of 
Advocacy and Outreach grants and cooperative agreements awarded 
between 2010 and 2011.
    FSA intended for the MIDAS program to modernize its 
delivery of programs to farmers and ranchers. Unfortunately, it 
was mismanaged, as evidenced by the fact that it is $140 
million over budget and only contains two of the five planned 
core functions.
    In July of 2014, Mr. Secretary, you signed a memorandum 
ceasing further development of MIDAS. GAO and the IG agree with 
that action. It makes sense. The maintenance of MIDAS alone is 
costly.
    Today, we expect to hear about the path forward on the 
FSA's delivery of programs. IT management across government has 
been deemed a high-risk area by GAO. The Committee wants to see 
the Department of Agriculture implement the identified best 
practices and hold the responsible parties accountable. This 
Committee will continue to monitor the work of both the USDA 
Chief Information Officer as well as the FSA's Chief 
Information Officer.
    We are also going to discuss today, as I mentioned, the 
Office of Advocacy and Outreach, the award of grants and 
cooperative agreements under that program. Between 2010 and 
2011, that office, under the direction of then-Assistant 
Secretary of Administration Pearlie S. Reed, awarded 
approximately $40 million in grants and cooperative agreements 
on a noncompetitive basis.
    In essence, Mr. Secretary, he gave taxpayers' dollars away, 
and this is alarming. I know it is alarming to you, as well.
    The Inspector General recommended that those responsible 
for these awards be held accountable. And I agree with that 
recommendation and look forward to visiting with you this 
morning about the execution of that recommendation.
    Based on the public outcry that has occurred over other 
scandals involving the misuse or waste of taxpayer dollars, the 
American people want you to hold responsible individuals 
accountable for egregious conduct that violates that trust.
    We, Mr. Secretary, thank you and your staff again for the 
cooperation and I look forward to continuing to work together 
on oversight. Thank you for being here.
    [The prepared statement of Mr. Conaway follows:]

  Prepared Statement of Hon. K. Michael Conaway, a Representative in 
                          Congress from Texas
    I want to welcome the Secretary today and thank him for being here. 
He and his staff have worked hard to fulfill many of the Committee's 
oversight requests this first 7 months. We appreciate your cooperation 
and your staff working with my staff.
    It is Congress' responsibility implicit in the U.S. Constitution 
and explicit in the House Rules to conduct oversight of the Executive 
Branch.
    The American people demand that we hold government accountable for 
the responsible stewardship of their taxpayer dollars.
    Today, we will examine the Department through the lens of waste, 
fraud and abuse as identified by the Department's Inspector General, 
Phyllis Fong and the Government Accountability Office (GAO), Congress' 
external audit organization.
    I would like to say a few words about Inspector General Fong. She 
has served the Department since 2002. Her office works hard, conducting 
hundreds of audits and investigations each year all aimed at making the 
Department more efficient. Her investigations, particularly on SNAP 
cases, ensure that those engaged in fraud do not prey on our most 
vulnerable.
    On behalf of the Committee, I want to thank Inspector General Fong 
and her staff for working with the Committee over the past 6 months. 
Oversight is essential to deterring waste, fraud, and abuse at Federal 
departments and agencies.
    Government employees must remember that each time they award a 
grant or a contract, it is the taxpayers' money they are spending, not 
their own.
    Today, we will examine a few of the programs the Department manages 
and executes.
    Over the course of our oversight efforts this year, we focused on 
the Farm Service Agency's (FSA) MIDAS information technology or IT 
program and the Office of Advocacy and Outreach's (OAO) grants and 
cooperative agreements awarded in 2010 and 2011.
    FSA intended for the MIDAS IT program to modernize its delivery of 
programs to the farmers and ranchers.
    Unfortunately, it was mismanaged as evidenced by the fact that it 
was $140 million over budget and only contains two of the five planned 
core functions.
    On July 23, 2014, Mr. Secretary, you signed a memorandum ceasing 
further development on MIDAS. GAO and the IG agree this makes sense. 
The maintenance of MIDAS alone is costly. Today, we expect to hear 
about the path forward for FSA's delivery of programs.
    IT program management across government has been deemed a high risk 
area by the GAO. The Committee expects to see the Agriculture 
Department implement the identified best practices and hold the 
responsible parties accountable. This Committee will continue to 
monitor the work of both the USDA Chief Information Officer's (CIO) 
office as well as FSA's CIO.
    We are also going to discuss today, as I mentioned, the Office of 
Advocacy and Outreach's award of grants and cooperative agreements.
    Between 2010 and 2011, that office, under the direction of then-
Assistant Secretary for Administration Pearlie S. Reed awarded 
approximately $40 million in grants and cooperative agreements non-
competitively. In essence, Mr. Secretary, he gave away taxpayer 
dollars. This is alarming.
    The Inspector General recommended that those responsible for these 
awards be held accountable. I agree with that recommendation. And I 
look forward to hearing how you have executed that recommendation.
    Based on the public outcry that has occurred after other scandals 
involving misuse and waste of taxpayer dollars--the American people 
want you to hold responsible individuals accountable for egregious 
conduct that violates their trust. They also expect reform and we look 
forward to hearing about OAO's efforts post-2011.
    Mr. Secretary, thank you and your staff again for their 
cooperation. I look forward to continuing our working relationship on 
oversight. Thank you for being here today. I will yield to the Ranking 
Member for his opening statement.

    The Chairman. I now yield to the Ranking Member for any 
opening comments he has to make.

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

    Mr. Peterson. Well, thank you, Mr. Chairman.
    And welcome, Mr. Secretary, back to the Agriculture 
Committee. I appreciate you being here.
    Oversight of USDA is a responsibility the Committee takes 
very seriously. Having an open dialogue with the Department is 
important not just to ensure that USDA is operating in the best 
interest of our constituents but is implementing programs as 
Congress intended.
    A few areas that we are specifically looking at today 
include the operation of the Office of Outreach and Advocacy, 
created by the 2008 Farm Bill, awarding StrikeForce Initiative 
and Section 2501 grants in 2010, 2011, and the review of the 
Beginning Farmer Initiative, and the long-delayed development 
of MIDAS, the FSA computer system upgrade.
    Since the Secretary is joining us today, I wouldn't be 
surprised if Members used this opportunity to address other 
issues that may be happening in their districts, such as the 
avian flu situation, which has impacted many of my poultry 
producers and others across the region. I have appreciated the 
Department's efforts in this regard. Thus far, they have been 
doing a good job, and I am looking forward to an update on the 
future plans within the Department, their response if we have 
another outbreak that occurs this fall.
    So, again, Mr. Chairman, I thank you for holding today's 
hearing.
    USDA is a large department, which can make adequate 
oversight a difficult task, and we might have different ideas 
about how to get there, but I think that we all want the 
Department to be running as effectively and efficiently as 
possible.
    And the Secretary has a big job. We had a discussion 
yesterday, and he was telling me that they do 7\1/2\ billion 
transactions a year in the Department.
    Am I right about that?
    That is pretty astounding. So they are bound to have a 
couple glitches here and there.
    So, anyway, thank you, Mr. Chairman, and I yield back.
    The Chairman. I thank the gentleman.
    Secretary Vilsack, thank you again for being here. The 
microphone is yours, sir.

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

    Secretary Vilsack. Mr. Chairman, thank you very much for 
the opportunity to be here, and to the Ranking Member as well.
    Given the interest of time and the number of Members who 
are going to participate in this Committee meeting, Mr. 
Chairman, I wonder if I could defer my opening remarks and 
perhaps maybe use a bit of my time that I am saving to extend 
an answer if that becomes necessary so that everyone gets a 
chance to ask the questions that they need to ask.
    [The prepared statement of Secretary Vilsack follows:]

 Prepared Statement of Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
              Department of Agriculture, Washington, D.C.
    Mr. Chairman and distinguished Members of the Committee, I 
appreciate the opportunity to appear before you to discuss on-going 
efforts to strengthen management and oversight activities within the 
United States Department of Agriculture (USDA).
    I would like to start by thanking the dedicated public servants who 
serve at the Department. They work tirelessly to support the farmers, 
ranchers and growers who are driving the rural economy forward; carry 
out record conservation efforts; facilitate groundbreaking research; 
promote new markets for rural products; and provide a safe, affordable 
and nutritious food supply for American families.
    USDA has over 6,800 offices and laboratories spread across nearly 
every county in the country. We operate and maintain over 43,000 
buildings and structures which amount to nearly 57 million square feet 
of space and manage a fleet that exceeds 40,000 cars, trucks, and other 
vehicles. USDA has over 300 programs that in Fiscal Year (FY) 2014 
required approximately 7.5 billion transactions totaling $177 billion 
to deliver.
    USDA employees have carried out a record level of service to the 
American people in recent years, despite constrained budgets and a 
reduced workforce. Since 2010, USDA's budget has been reduced by more 
than ten percent, while the Department has been charged with additional 
responsibilities and more complex programming. Over that same period, 
we have also experienced a reduction of more than the equivalent of 
10,000 Federal employees from the USDA workforce.
    Despite these challenges, USDA employees have successfully 
implemented two farm bills--the 2008 Farm Bill and the 2014 Farm Bill--
and the Healthy Hunger Free Kids Act over the course of this 
Administration, all of which were successfully crafted thanks to the 
hard work of the Committee. In the year and a half since passage of the 
2014 Farm Bill, with 12 titles and more than 450 provisions, we made 
implementation a top priority at the Department. Immediately after 
enactment, USDA established a 2014 Farm Bill implementation team 
composed of key sub-cabinet officials and experts from every mission 
area of the Department to put new programs in place and make mandated 
reforms to existing programs. I am proud of the work USDA employees 
have undertaken to implement the farm bill.
    In addition to implementing complex programming under constrained 
budgets and resources, USDA employees have also continued to take 
proactive steps to find efficiencies that cut costs, streamline 
operations and save taxpayer dollars through the Blueprint for Stronger 
Service initiative. Through Blueprint-related efforts, our employees 
have recognized for the Department savings, efficiencies, and cost 
avoidances of over $1.4 billion in recent years. Some of these results 
came from relatively smaller, common-sense initiatives such as the $1 
million saved by streamlining the mail handling at one of the USDA 
mailrooms or the consolidation of the Department's cell phone 
contracts, that is saving taxpayers over $5 million per year. Other 
results have come from larger-scale activities, such as the focus on 
reducing non-essential travel that has yielded over $400 million in 
efficiencies. Overall, these results have allowed us to do more with 
less during a time when such stewardship of resources has been critical 
to meeting the needs of those that we serve. In addition, as a result 
of improvements to our program management practices, the Department has 
implemented process improvements that have saved over 100,000 hours of 
time for our employees and customers, which translates into better 
service and cost avoidance for our farmers, ranchers, and rural 
communities.
    Our ability to provide the highest levels of service to our 
customers under these circumstances is a testimony to the diligence of 
USDA employees. The Obama Administration and USDA have made historic 
investments in America's rural communities, helping create ladders of 
opportunity for rural people and building thriving rural economies for 
the long term. In the past 6 years, USDA has assisted more than 900,000 
rural families to buy or refinance a home; for many of these 
individuals, this is the first time they've owned their own home. We 
have invested $48.3 billion in new or improved infrastructure in rural 
areas, which, among other things, has helped 15.7 million rural 
residents get access to clean drinking water and better waste water 
disposal and brought new or improved broadband service to 1.49 million 
rural residents, which expands access to state-of-the-art health care, 
educational and cultural resources, and gives rural businesses the 
connectivity they need to create jobs and compete in the global 
economy.
    USDA has helped to open or expand new markets for the incredible 
bounty of rural America, which has led to the strongest 6 years for 
agricultural trade in the history of this country. Between 2009 and 
2014, more than 6,000 U.S. companies participating in USDA-endorsed 
trade shows reported total on-site sales of more than $1.3 billion and 
more than $7.2 billion in 12 month projected sales. This participation 
has assisted in the growth of agricultural exports, which have climbed 
more than 58 percent in value since 2009, totaling $771.7 billion over 
the past 6 years. USDA continues to pursue strong new trade deals that 
are both free and fair and will help to expand exports, increase wages, 
and help farm and ranch businesses grow and create jobs not just in 
rural communities, but across the country.
    Each day, the work of USDA scientists and researchers touches the 
lives of all Americans: from the farm field to the kitchen table and 
from the air we breathe to the energy that powers our country. USDA 
science is on the cutting edge, helping to protect, secure, and improve 
our food, agricultural and natural resources systems. Since 2009, USDA 
has invested $4.32 billion in research and development grants. Studies 
have shown that every dollar invested in agricultural research now 
returns over $20 to our economy. USDA leverages its investment in 
research by making data more widely available to universities, American 
companies, and others.
    In the past 6 years, research by USDA scientists has resulted in 
758 patent applications filed, 335 patents issued, and 953 new 
inventions disclosures covering a wide range of topics and discoveries.
    A surge in consumer demand for locally-produced food is creating 
jobs and opportunity throughout rural America for farms as well as the 
small businesses that store, process, market and distribute food 
locally and regionally. Local food sales were valued by the industry at 
$11.7 billion in 2014, up from USDA's estimate of $5 billion in 2008. 
To support farmers and ranchers that want to take advantage of this 
market opportunity, over the past 6 years, USDA has strengthened local 
and regional food systems by investing in more than 500 projects that 
recruit and train farmers, expand economic opportunities for small 
businesses and increase access to healthy foods. In addition, USDA has 
made expanding SNAP recipients' access to fresh fruits and vegetables 
through farmers markets a priority in recent years. Since 2008, the 
number of SNAP-authorized farmers, roadside farm stands, and farmers 
markets grew dramatically, from 753 to in excess of 6,400, more than 
eight times the number accepting SNAP when the Obama Administration 
took office. This is just a small snapshot of the successful and 
critical work USDA is doing across the board to support economic 
opportunity for farmers, ranchers and rural communities and improve 
access to healthy foods for all Americans.
    But my time as Secretary has also afforded me a true understanding 
of the challenges that come with managing a Department the size of 
USDA. The Department is faced with numerous issues, including the need 
for improved program integration amongst the agencies, enhanced 
internal controls across programs, and better IT security to protect 
employee and customer data. A common theme from these challenges is the 
recognition that due to the Department's multitude of programs, USDA 
must continue to improve cross-agency coordination.
    A key component in the Department's efforts in identifying these 
challenges and solutions for moving forward is the work of the Office 
of Inspector General (OIG). At USDA, OIG, while independent, is an 
important partner in the work to strengthen program integrity and 
management throughout the Department.
    To address USDA management challenges, I have challenged the 
Department's leaders to proactively seek and implement solutions. I 
have engaged USDA's OIG to better understand the issues identified 
through their audits and to assess where additional focus and attention 
are needed. In certain cases, I have asked that OIG examine particular 
issues of concern to uncover potential issues so that they can then be 
addressed. Once identified, we have taken proactive steps to address 
shortfalls and improve our practices.
    Furthermore, I have established a process through which resolution 
of the management challenges will be a constant focal point for the 
entire USDA leadership team. As an example, the reports of OIG and the 
Government Accountability Office helped to bring some clarity to the 
challenges facing the implementation of the Farm Service Agency's (FSA) 
MIDAS investment. As the issues for MIDAS were identified, the 
Department improved oversight and re-scoped the investment, which 
allowed USDA to deliver the most value for our customers. The MIDAS 
platform today is used in nearly 2,200 FSA offices and is used to help 
manage records for five million farms, 38 million tracts, and 11 
million customer records.
    In another example, in 2011, I requested that OIG evaluate the 
management of the Office of Advocacy and Outreach's grant program. As a 
result of this proactive engagement and the findings from OIG's recent 
audits of the section 2501 grant program and the StrikeForce Pilot 
initiative, the Department continues to improve management and 
oversight of these programs. For example, the Department has 
restructured the StrikeForce initiative to focus on our coordinating 
efforts at our field-based agencies. Since 2010, efforts through 
StrikeForce to target and help agricultural producers and rural 
communities experiencing chronic poverty gain access to USDA programs 
have shown results. Applications have increased and that has helped 
contribute to over $16.5 billion in USDA investments to create jobs, 
build homes, feed kids, assist farmers, and conserve the natural 
resources across 880 counties in 21 states and Puerto Rico.
    Finally, USDA has made program integrity a top priority, 
aggressively working to identify and eliminate fraud, waste, and abuse, 
because it is critical to ensure that program funds benefit those who 
need them, and that taxpayer dollars. For example, in FY 2014, SNAP 
achieved a payment accuracy rate of 96.34 percent, among the lowest in 
the Federal Government and reduced by more than \1/2\ since 2000. USDA 
efforts have also resulted in a significant reduction in trafficking. 
An FNS study released in 2013 found that the estimated rate of 
trafficking in SNAP--which was estimated to be as high as four percent 
15 years ago--is very low, down to just over one percent according to 
the most recent data. But more work must be done to maintain and 
improve the integrity of all USDA programs. That is why the 
Administration's FY 2016 budget requested over $20 million in 
additional resources for targeted program integrity enhancements for 
the Child Nutrition Programs, SNAP, and the Risk Management Agency.
    Thank you again for the opportunity to highlight our efforts to 
improve management at USDA and for the opportunity to collaboratively 
discuss items that may require additional attention. An organization 
the size of USDA--or any organization--will always have management 
challenges, but we are committed to addressing these challenges as they 
are identified and have a strong record of success in doing so. The 
Department has been able to achieve tremendous results in recent years 
due to the strong partnership with Congress. USDA truly is a great 
organization and our continued collaboration will strengthen and 
improve the work of the People's Department.

    The Chairman. Well, thank you, Mr. Secretary. I appreciate 
that.
    Thousands and thousands of great employees at your 
Department get up every single day, go to work, try to do the 
very best they can for the taxpayers and beneficiaries they 
serve, but the actions of a few who violate that trust taint 
everybody. And so our conversation this morning will be about 
those few as opposed to being able to brag on all the rest of 
the folks, who really do a good job. And every organization has 
those few bad apples that we have to understand what happens to 
them and the deterrence factor and the fact that things should 
happen to folks who do breach the public trust.
    So let's talk a little bit about Pearlie Reed. I believe he 
was an Under Secretary in charge of spending a lot of money. 
The special agents that conducted that investigation 
discovered, in addition to the $40 million in grants that 
appear to have been granted without competition, that Mr. Reed 
also was able to direct, either by himself or through some 
other folks, a relatively significant amount of money, 
$275,000+, to an individual with which he had a physical 
relationship.
    Mr. Reed resigned, I guess, 2012. Did you ask for his 
resignation, or did he do that on his own?
    Secretary Vilsack. Mr. Chairman, I became aware of concerns 
about Mr. Reed's handling of the incidents and the accounts 
that you just addressed by virtue of a hotline tip that we 
received. Based on that tip, I asked immediately for the OIG to 
investigate.
    The OIG produced what is called a FAST report, which 
indicated some concerns that they had, not a comprehensive 
report. I shared that report with Mr. Reed, indicated to him 
that, obviously, we were disappointed in what we had initially 
learned about this. And, following that conversation, Mr. Reed 
left the employment of the USDA.
    The Chairman. Well, thank you.
    I believe that the overall investigation led to a 
recommendation by the agency to refer it to the Justice 
Department. Can you visit with us about that and why, if you 
know why, Justice chose not to pursue criminal actions?
    Secretary Vilsack. Mr. Chairman, following Mr. Reed leaving 
the office, then the OIG continued its review of activities 
involving section 2501 and StrikeForce involving Mr. Reed. And 
they took a good deal of time, obviously, to complete the 
report.
    When the report was completed, we basically requested the 
Department of Justice to take a look at this. I believe it was 
referred down to the Department of Justice in Arkansas, and the 
U.S. Attorney in Arkansas chose not to prosecute.
    I can't share with you today, because I don't know, the 
specific reasons for why he chose not to prosecute. But that 
decision makes it difficult, if not impossible, for us to take 
any further action with reference to Mr. Reed because of the 
Code of Federal Regulations, specifically 180.21 and 417.21 
that basically outlines processes that we could take if there 
is a criminal judgment or a civil judgment. Obviously, there is 
neither in this case, and so, as a result, we are where we are 
today.
    We have focused our attention, frankly, Mr. Chairman, after 
we received the FAST report and after we received the full 
report, on fulfilling the recommendations that OIG outlined in 
terms of improvements to the programs. And I can tell you that 
today they are fundamentally different than they were in 2010, 
2011.
    The Chairman. All right.
    Those processes, could this individual be--what is the 
phrase--suspension or debarment so that--I understand under the 
Bush Administration he was a consultant with the government. 
Can he be prevented from coming back under any kind of a 
contract?
    Secretary Vilsack. Under the Code of Federal Regulations 
that I cited, Mr. Chairman, in order to take that action, that 
specific action, there has to be a criminal judgment or a civil 
judgment. In other words, a court of law has to make a 
determination that something inappropriate occurred. And, based 
on that judgment and determination, you are then empowered 
under the Code of Federal Regulations to take steps. We don't 
have that, in this particular circumstance.
    The Chairman. Okay. Well, I----
    Secretary Vilsack. And, to be fair to Mr. Reed, he did 
serve the NRCS in a capacity for a number of years with the 
Federal Government before he came back as the Assistant 
Secretary of Administration. And the reason I asked him to do 
that in 2009 was because our Department had a very serious 
concern and problem with civil rights generally, which we 
wanted to aggressively address.
    The Chairman. Well, I appreciate that.
    I believe you mentioned that this came to your attention on 
a hotline tip, a whistleblower tip. Can you walk us through, 
kind of, the attitude at the Department toward whistleblowers 
and how the function is available to folks who see something 
going on that they disagree with?
    Secretary Vilsack. Well, obviously, we encourage folks who 
are seeing activity that is inappropriate to notify us, notify 
their supervisor, notify people in charge of concerns that they 
may have. That is why we have the hotline process, to be able 
to do that in a way that doesn't necessarily compromise your 
ability and your relationship with other coworkers.
    And we take these things very seriously, by virtue of the 
fact that when that hotline tip occurred it came to my 
attention immediately, and my first action was to ask the 
Inspector General to look into it.
    I have said to my folks, I am not concerned about people 
making mistakes, but I want to know what they are, and I want 
to be able to fix them. If there is a problem, I want to know 
what it is, and I want to know it as soon as I can. Because we 
are very interested in the job that we have, and I take very 
seriously what you said at the outset, which is that we have a 
responsibility to taxpayers to make sure that these resources 
are being spent appropriately. And it is unfortunate and 
disappointing when that doesn't occur.
    The Chairman. Thank you, Mr. Secretary.
    The Ranking Member, 5 minutes.
    Mr. Peterson. Thank you, Mr. Chairman.
    Back when I was the Chairman, I had meetings with some of 
your computer people. I thought at the time--they brought in a 
couple new people--that they were on track to get this thing 
straightened out. But they were having funding challenges. As I 
understand, I think that there has been an uneven, kind of, 
deal going on with the funding of that.
    How much of that uneven funding and not being able to plan 
had to do with the problems that happened there in the MIDAS 
situation?
    Secretary Vilsack. Well, Congressman, I was reading the 
Good Book the other day, and in Proverbs there are a couple of 
suggestions, that a wise man measures his steps, and a wise man 
has many counselors. With reference to MIDAS, we didn't measure 
our steps, and we didn't have as many counselors as we needed, 
frankly.
    When this thing was started in 2007, 2008, the vision was 
pretty grand, but I don't think people fully appreciated the 
difficulty of basically implementing that in the context of a 
1980s system, which is what we basically have at FSA offices.
    This is a huge undertaking. It involves 11 million 
customers, five million farmers, 8.1 million farms, and 38 
million tracts of land. So it is a huge undertaking. And, 
frankly, we didn't have at the outset what we have today, which 
is a process of review and many, many hands and many eyes 
basically watching this and doing this in an incremental way.
    So budgeting was an issue, there is no question about that, 
but also the way in which it was originally structured and the 
way in which--we failed to recognize that there was a different 
vision in Kansas City, where some of this work was going to be 
done, and a different vision in D.C. And, as a result of that 
conflict, things didn't get set up as they should have.
    We have made progress, and we do have some benefit from 
MIDAS today. A farmer can walk into an FSA office today in any 
county in the country and facilitate and see all of the 
records, regardless of where that land might be located. That 
was not the case before. He had to go to individual offices if 
he had land in different counties.
    We also have installed our business integrity efforts, 
which will allow us to reduce errors and mistakes. And we are 
now working collaboratively with NRCS on their Gateway program 
to take the next step, which is to allow folks to be able to do 
a lot of the work that they want to do at home without the 
necessity of even coming into an office.
    So progress has been made, but it clearly wasn't 
implemented in the way that people envisioned at the beginning. 
And we have addressed those issues by establishing a process 
within CIO's office for review, a more functioning E-Board, and 
weekly and now biweekly reports to me directly about the status 
of MIDAS, about the status of the Gateway program, and about 
the status of ACRSI, which is the next step.
    Mr. Peterson. Have we gotten rid of the AS/400s and System 
36s? Are they gone?
    Secretary Vilsack. Well, I don't think that they are 
totally gone, and that is one of the complications. We have 
sort of meshed and merged systems, which may explain why we are 
going to have to continue from time to time to patch and to put 
resources into the system.
    This gets back to this different vision and different focus 
between the folks in Kansas City and the folks in D.C.----
    Mr. Peterson. Right.
    Secretary Vilsack.--which we have addressed.
    Mr. Peterson. Thank you.
    First of all, I want to thank you and the Department, Dr. 
Clifford, for the work that you did and have done and continue 
to do helping us with our avian influenza situation, which hits 
my district probably harder than anybody.
    There are concerns out there, and you have been pretty good 
in addressing those as they come along. It wasn't a perfect 
situation, but whenever you get in a crisis, it is not going to 
be perfect.
    But one of the concerns I am hearing now is these 
inconsistencies in indemnity payments. We appreciate what you 
are doing. And you have been doing it out of the CCC, and the 
OMB has been supporting you. And so that seems to be working.
    But, apparently, there are different indemnity payments for 
high-path avian influenza versus low-path avian influenza. And 
this, I guess, goes back to when we did legislation back when 
we had the low-path in Virginia.
    And, under the regulations, apparently, egg layers are 
compensated for future egg production according to the low-path 
regulations, but the high-path regulations are silent in that 
aspect. And so the turkey folks are wondering why they are not 
compensated for what would be the full cost of the bird, kind 
of similar to what is happening with the egg production under 
the low-path.
    So are you looking at that? Is there a way to bring 
consistency, constancy to that situation?
    Secretary Vilsack. Well, the quick answer is we are looking 
at it. We recognize that there is a difference between low-path 
and high-path, and there ought not to be.
    We also are taking a look at whether or not we could create 
some kind of more uniform system that would be based on the 
size of the operation, in terms of cleaning and upkeep expense, 
as well, because there is obviously some confusion about 
precisely who gets paid to do what relative to disinfection and 
cleaning.
    This is a process that we are looking at, and we are 
hopeful that we get this thing in a better place, in a more 
consistent place, before the fall. That is why we have set up a 
task force, which I instructed be set up, to look at ways in 
which we could be better prepared if this thing reemerges in 
the fall.
    Mr. Peterson. Well, thank you. And, again, thank you and 
the Department for the work that you have done.
    I yield back.
    The Chairman. I thank the gentleman.
    Mr. Lucas, for 5 minutes.
    Mr. Lucas. Thank you, Mr. Chairman.
    And, Mr. Secretary, I have to echo the comments of the 
Chairman and the Ranking Member about the challenges that you 
and the Department have faced in implementing a rather dramatic 
change in policy in the 2014 Agricultural Act. Really, I think 
in most areas it has been quite fundamentally amazing how 
successful that has been.
    But, like anything, I have a few questions, Mr. Secretary, 
in a number of areas.
    One of the things I am curious about, the $100 million that 
was provided for the implementation of title I to be used for 
filling staff positions due to the increased workload from ARC 
and PLC, how much of that money was used? And, if you could, 
perhaps in a follow-up if necessary, but provide the Committee 
with a written breakdown of how that money was spent?
    Can you touch on that, Mr. Secretary?
    Secretary Vilsack. I can, Mr.--well, I----
    Mr. Lucas. Because, by the way, your county office folks 
have worked very diligently to get all this done. They are good 
people, but they face some challenges out there.
    Secretary Vilsack. There are so many chairs and former 
chairs on this Committee, I am probably going to----
    Mr. Lucas. Exactly.
    Secretary Vilsack. Congressman, we are using this resource 
in a planned and strategic way, the $100 million. We didn't use 
it all at once. We have been basically ramping up as work 
requirements are required and facilitated.
    I can't tell you today the exact amount that has been 
allocated, but I can tell you that staff and temporary staff 
have been hired in offices and that we are in the process of 
trying to determine where best to locate additional staff based 
on workloads.
    We will provide you with a breakdown, as you have 
requested, in terms of where the money has been spent and what 
we have purchased with it, as soon as this hearing is over.
    Mr. Lucas. I would very much appreciate that, Mr. 
Secretary, because one of the things that I and a number of 
Members of this Committee promised those folks out in the field 
when they were going through the challenges of implementing 
this was that there would be help. And we attempted in the farm 
bill, since, normally, staff funding issues are handled by the 
Appropriations Committee, as you well know, not by the 
authorizing Committee.
    Secretary Vilsack. I would point out that, overall, USDA 
staff is down by somewhere in excess of 10,000 FTEs since I 
became Secretary. And FSA has been disproportionately--and 
Rural Development have been disproportionately hit with those 
reductions.
    Mr. Lucas. Absolutely. And that just shows how much more 
effort the folks in the field are shouldering.
    That said, Mr. Secretary, I have also visited with you and 
a number of the other officials about a slightly different 
area, the way in which it appears that USDA is implementing a 
program that has a net effect of penalizing growers who plant 
cover crops, for producers who certified acreage planted to 
cover crops in generic base, particularly in 2014 and 2015 crop 
cycles.
    The question I keep getting from them is, why haven't you 
used your discretion to allow those crops to be eligible for 
ARC and PLC?
    Secretary Vilsack. Congressman, I think that the concern we 
have is the way in which the statute or the bill was crafted in 
terms of the flexibility that we have or don't have. I would be 
happy to continue to work with you on this.
    We are encouraging cover crop production. We have seen a 
350 percent increase in cover crop. We understand the 
importance of it.
    I think there may be a concern about whether or not we 
actually have the legal authority to do what you are asking us 
to do. But if you have an interesting way for us to get around 
that, we would be more than happy to hear it.
    Mr. Lucas. Thank you, Mr. Secretary.
    And one last question. I assume probably my colleagues will 
have some questions about the ACRSI program, A-C-R-S-I.
    In the 2014 Farm Bill, the USDA was instructed to inform 
the Committee when it had reached substantial completion of the 
ACRSI program. And the report that was submitted to the 
Committee in July indicates that, so far, the program has a 
pilot in place in about 30 counties in Illinois and Iowa. That 
is an interesting substantial completion report.
    You see the perspective that I offer up.
    Secretary Vilsack. Well, the reason for this, Congressman, 
is that we learned lessons from the initial implementation of 
MIDAS, which is that we instituted the whole program, or tried 
to institute the whole program, and found that we had serious 
glitches and unintended consequences through the computer 
process. So what we have decided to do in the future is to 
stage implementation so that we work out the bugs in advance 
before we basically create a lot of havoc and concern and 
confusion in the countryside.
    The states were chosen in part because folks volunteered 
and were willing to participate. They were also chosen in part 
because of the bulk of work that is done in corn and soybean 
production. And no disrespect to the good folks in Oklahoma, 
but Congressman King does have a lot of power in this 
Committee.
    Mr. Lucas. He has a lot of influence everywhere.
    Again, Mr. Secretary, thank you for the efforts you are 
implementing. And there are a few things that still need to be 
done, and I am sure, together, we will get it done.
    I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back.
    Mr. Walz, for 5 minutes. Tim?
    Mr. Walz. Thank you, Mr. Chairman.
    And, Mr. Secretary, thank you for being here.
    And I, too, want to echo my thanks to you and your team and 
the folks at the Minnesota Department of Agriculture on the 
avian influenza. It has been devastating to my district. It 
came hard, it came hot, it was big, and to try and get a handle 
on it--and now some of the lessons learned, maybe. And Mr. 
Peterson hit on this a little bit.
    I am just curious, as we look at this, this turned out to 
be really labor-intensive. It takes a lot of people to do this. 
And my two-part question on this is: making sure you have the 
resources moving forward on this; and some of the suggestions 
coming out of the industry is that you have kind of a first-
responder team that is ready to drop in and start spinning 
people up quicker so when this comes again--and unfortunately, 
that will probably be the case--are we ready for it.
    So just those two parts.
    Secretary Vilsack. APHIS employment is down by 800. About, 
roughly, 8,000 folks work for APHIS. We have had to hire 3,200 
people to supplement the work of APHIS, in terms of this avian 
influenza. Twenty-one states have been impacted.
    What we have learned is we do need a command structure and 
a communications structure that is organized and in place as 
quickly as possible, a structure that reflects the need for a 
regional communication, a structure that involves state 
communication, and a structure that involves county-by-county 
communication.
    So we are, as part of our planning process for the fall, we 
are looking at ways in which we can essentially identify assets 
and increase the number of incident command teams that would be 
available to go once this thing hits. We are planning for a 
circumstance where we are simultaneously having to deal with 
500 outbreaks. We think that is sort of a worst-case-scenario 
situation, so we are planning for that.
    We have had a meeting, a workshop last week. We have a 
meeting scheduled in Iowa next week with the industry to 
continue to listen and to learn.
    Mr. Walz. Great.
    Secretary Vilsack. We understand there are issues involving 
biosecurity, there are issues involving depopulation, there are 
issues involving disposal, there are issues involving 
indemnification and the time for repopulation. So these are all 
issues that we want to learn and try to be in a better 
position.
    We also want to make sure that we preposition and have as 
much work done as possible in terms of disposal sites. We ran 
into some issues with local officials on landfills. So we are 
looking at places where this could potentially crop up where it 
hasn't, trying to figure out if there are ways in which we can 
identify landfills, work already with local and state officials 
to get them prepared for this, if it occurs, so that we 
streamline the process and don't have quite the delay that we 
have experienced in some other states.
    Mr. Walz. Well, I am certainly glad to hear that.
    And please take back to your folks that, from the folks in 
the industry and the folks on the ground, they are appreciative 
of the work you did.
    And I would like to extend a thanks to my colleagues Mr. 
Peterson and Mr. King, who have been leading on making sure we 
get this right and preparing for the future.
    A question on Beginning Farmer and Rancher. Mr. 
Fortenberry, Mr. Gibson, and I authored that over here, and 
Senator Harkin on the other side. And much of those ideas came 
from things that you had done, Mr. Secretary, and told us about 
the need to build for the capacity for the future.
    The OIG came out with a few things on that. I think the one 
that probably was most troubling to me was--I have never 
questioned your commitment to this program; you have made it 
very clear. But the OIG says there were many agency officials 
that didn't understand that this was a priority. And that 
troubles me in terms of implementation and some of the things 
that came out about tracking and how many people are we getting 
involved. Because I believe in this program; I know you believe 
in it.
    Where are we moving forward to make sure they get it that 
you have made it a priority?
    Secretary Vilsack. As a result of that report and as a 
result of the concerns that we have about Beginning Farmers and 
Ranchers, the Deputy Secretary has been tasked with putting 
together a major effort to do better outreach and better 
communication within USDA and outside of USDA. She has done I 
can't tell you how many roundtables and visits with a variety 
of interest groups. And we are working more collaboratively in 
a more integrated fashion than we did before.
    And we are also calling upon our land-grant universities to 
help us and assist us. A recent example involves Florida A&M, 
where we have basically shut down an ARS lab as part of a 
budget situation. A substantial amount of land became 
available, and one of the requirements for Florida A&M to get 
that land was that they would actually use it as a Beginning 
Farmer and Rancher hub, use the land to basically make it 
easier for beginning farmers and ranchers.
    We are also working with the Defense Department. We noticed 
that there are a lot of folks leaving the military that are 
interested in potentially getting into farming. What we did 
notice was that the military didn't allow information about our 
USDA programs during the process of--when folks leave the 
military, they are given information. We are now going to make 
sure that all of our information is available at each one of 
the bases. And we will be making physical presentations to 
retired military or soon-to-be-retired military personnel, as 
well.
    So I think it is in a much better place and a much 
different place than it was 6 months ago, a year ago.
    Mr. Walz. Great. Thank you, Mr. Secretary.
    I yield back.
    The Chairman. The gentleman yields back.
    Austin Scott, 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman.
    And, Secretary Vilsack, thank you for being here.
    A couple of quick things.
    Mr. Peterson mentioned issues with regard to the turkey 
farmers. Obviously, in Georgia, we have a tremendous amount of 
poultry farmers. And I guess one of the concerns that has been 
expressed to us is that, in most cases, those farmers don't 
actually own the chickens.
    And so, with regard to any type of insurance product, would 
there be a product for the actual growers that they could take 
advantage of if the flu worked its way into----
    Secretary Vilsack. There isn't an insurance program. That 
was suggested and proposed in the 2014 Farm Bill, but I think 
because of budget concerns it was not put in the farm bill.
    I would strongly urge the Congress, as it begins the 
process of considering future farm bills, to look for a way in 
which that issue can be addressed. Because you have pointed to 
an inequity in the situation. We have paid out nearly $600,000 
in checks to livestock producers for a variety of disasters 
that they have experienced, and rightfully so. It feels 
different for these poultry producers because it is.
    So there is unfortunately not an insurance program. We are 
looking at ways in which we can look at this indemnification 
process through CCC that could potentially be based on a per-
square-foot basis for the folks who own the facility but not 
the chickens. We are looking at a variety of different ways, 
but there is not an insurance program today.
    Mr. Austin Scott of Georgia. All right. I would appreciate 
it if you would keep us informed on that. That is a very big 
deal for Georgia, as well as the cover crops that the former 
Chairman mentioned.
    I want to talk a little bit about the Natural Resources 
Conservation Service and the new wetland identification 
process, if we could.
    Last week, they announced a new wetland identification 
process for the Prairie Pothole Region. Can you explain how 
that is different from the current process?
    Secretary Vilsack. Part of what we are attempting to do is 
to have a quicker determination than in the past. We have had a 
serious issue with backlog of activities, particularly in the 
Dakotas, where this is an issue, and we are trying to find a 
process to streamline the process so that we can get 
information to folks quicker and simpler and easier.
    I can provide more detail to you and your office on that, 
Congressman. We will be glad to do that after this hearing.
    Mr. Austin Scott of Georgia. All right. Well, thank you.
    I mean, I guess one of our primary concerns is with the EPA 
and waters of the U.S. and those rules. And when you see that 
coupled with the potential changes of process, if----
    Secretary Vilsack. This is not connected in relationship to 
waters of the U.S. This is basically an understanding that 
there are a couple of areas in this country that have unique 
geographic challenges relative to conservation, and we want to 
be in a position to be able to respond to those challenges 
appropriately.
    Mr. Austin Scott of Georgia. But it is a wetland 
identification process.
    Secretary Vilsack. Yes.
    Mr. Austin Scott of Georgia. Can you discuss the role of 
the Climate Change Program Office, the CCPO? I mean, how does 
that interact with the other USDA agencies, and what are their 
current activities?
    Secretary Vilsack. I hope I understand your question.
    Within USDA, we have a focus on climate, and we have a 
series of climate hubs that are regionally placed. Their 
responsibility is primarily to assess the vulnerabilities from 
changing climate and weather variability and then provide a 
series of suggestions--new technologies, new techniques, new 
strategies--for allowing producers in each region of the 
country to be able to adapt and mitigate to a changing climate. 
They are currently in the process of issuing those assessments. 
The Midwest section and the Northwest section have completed 
their assessments.
    They are also doing additional outreach to producers so 
that producers have the latest information. We have a series of 
tools now available, technology tools, that producers can use 
to allow them to better analyze precisely what they need to do.
    It is also designed to allow us to continue to work with 
producers to reduce greenhouse gases' emissions that are linked 
to agriculture. We think there are ways in which we can help 
producers do that and help the bottom line.
    And, finally, it is a complement to precision agriculture 
that is taking over production agriculture. Each acre of land 
is different, and we want folks to be able to know precisely 
what to do on each acre relative to inputs.
    Mr. Austin Scott of Georgia. Thank you for your testimony. 
The cover crops issue and the issue for the poultry farmers is 
certainly important to us, and I hope you will continue to work 
on that.
    The Chairman. The gentleman's time has expired.
    Ms. Fudge, for 5 minutes.
    Ms. Fudge. Thank you very much, Mr. Chairman.
    And thank you, Mr. Secretary, for being here today.
    Mr. Secretary, last week, this Committee heard from 1890 
land-grant institutions on a number of issues, including state 
matching requirements for certain research and extension 
grants. We heard from a number of them that they are not 
getting the funding for which they are eligible because their 
states are failing to meet the one-to-one match requirement.
    In fact, according to an APLU report, from 2010 to 2012, 61 
percent of 1890 land-grant institutions did not receive 100 
percent of the one-on-one matching funds from their respective 
states for extension and research funding. This lack of state 
matching funds resulted in a loss of almost $57 million to 
1890s.
    What actions, if any, is USDA taking to address this?
    Secretary Vilsack. Well, the first thing we are doing, 
Congresswoman, is trying to make sure that people understand 
precisely what is and isn't the rule relative to matching and 
what power the USDA has, potentially, in waiving the matching 
requirement.
    The 50 percent match requirement, the misunderstanding is 
that it has to come from the state. It doesn't necessarily have 
to come from the state; it can come from other sources. And 
that is part of what we need to get information out to the 
1890s, to make sure they understand that there are other 
options relative to those matching requirements and then, on a 
case-by-case basis, to determine whether or not a waiver is 
appropriate, which we do from time to time.
    If people understood that there are a multitude of ways in 
which that match can be reached, then that might alleviate some 
of the concerns. It might open up some of the additional 
resources.
    The other thing we are attempting to do is we asked the 
1890s to put together, in light of the 125th anniversary of the 
Morrill Act creating them, what do they see the future. They 
came back with a set of recommendations relative to the 
development of centers which would integrate and allow the 
1890s to work collaboratively together. We have been quite 
supportive. We have put resources together; we have made 
commitments to help create those centers.
    So there is a lot of good, positive activity taking place.
    Ms. Fudge. Well, good, because one of the things that I 
wanted to say to you is that I have to thank my colleagues Mr. 
Davis and, just recently, Mr. Scott for wanting to work with us 
on assisting you in making sure that these inequities are 
fleshed out. So you will be hearing from us.
    My second question is about HFFI. You know that it was 
authorized as a part of the farm bill to build off existing 
efforts and allow for communities across the country to improve 
healthy food access, foster local economies, and enhance public 
health.
    Now, recognizing the uncertainty of appropriations for HFFI 
in Fiscal Year 2016, please give me some update on how USDA 
plans to implement it.
    Secretary Vilsack. Well, I want to make sure that I 
understand the question.
    There are two efforts underway in terms of providing access 
and information for local and regional food systems that can 
meet people that are in need.
    One is an ongoing effort under the Healthy Food Financing 
Initiative, $100 million, which was allocated. Roughly $30 
million of that has already been directed to a variety of 
projects around the country. So that is being implemented and 
will be implemented over the next couple of years.
    The second issue is whether or not we can provide funding 
for the development of grocery stores and things of that 
nature. That has been less successful in terms of getting an 
appropriation, generally, from Congress.
    But we continue to work with our local and regional food 
efforts and our Farmers Market Promotion Program, our Local 
Food Promotion Programs to try to provide assistance and help.
    Ms. Fudge. Good, yes, because the storage is a big issue, 
of course, in food deserts, so I appreciate that.
    I have no other questions. If there is something else you 
would like to add, I have about a minute left, you are free to 
use it.
    Secretary Vilsack. Well, I would say that it is appropriate 
on the 125th anniversary of the 1890s to focus on the fact that 
they have tremendous opportunity.
    And one of the things that we are doing with the 1890s, in 
collaboration with them, agribusiness is coming to us 
expressing concerns about the diversity of their workforce. And 
so the Deputy Secretary this fall will be working with a number 
of major agribusinesses to create some kind of job fair or work 
fair which would introduce those businesses to some of the 
bright students at the 1890s. So there is a lot of activity 
going on to try to connect folks in the agribusiness world, as 
well.
    Ms. Fudge. Thank you very much.
    Mr. Chairman, I yield back.
    The Chairman. The gentlelady yields back.
    Mr. Crawford, for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman.
    Mr. Secretary, I appreciate you being here today.
    I have concerns about the actively engaged rules. The 
Department released draft rules on the implementation of those 
provisions in the 2014 Farm Bill. Setting limits on the number 
of managers allowed per farm was at your discretion. And I have 
some concerns that there are some farmers who will be 
unnecessarily penalized by this.
    How did the USDA arrive at this number of allowed managers? 
And can you be sure that farms that are genuinely complex or 
with legitimate business interests held by many individuals are 
not negatively impacted?
    Secretary Vilsack. Congressman, good question.
    This was designed to respond to some of the concerns that 
had been expressed about folks who were not farmers, who 
weren't connected to the land, receiving assistance and 
benefits.
    So we tasked a team to take a look at--and I would point 
out that, in crafting the farm bill, Congress basically ensured 
that we walk down a fairly narrow lane here. Roughly, 90 to 95 
percent of the people who farm are not impacted by what we are 
talking about here. Primarily, this is limited partnerships. It 
doesn't affect corporations. It doesn't affect family farming 
operations. So it is a very limited universe of folks who could 
potentially be impacted, and it is the universe that created 
the concern to begin with, with folks in Manhattan in high-
rises being on a conference call and getting subsidies.
    So, I tasked the team to take a look at trying to close 
that loophole. Then recognizing that closing the loophole would 
be helped by having a bright line: How many people does it 
actually take? And how do you determine?
    So you start with a proposition that there ought to be one 
manager, but then you recognize that, particularly in the 
South, there are operations that are large in size that 
require, actually, more than one person. So we created an 
option for those large operations to be able to make the case 
for additional managers, up to two additional managers. And we 
basically created some framework, some bright lines that will 
allow people to understand precisely how they could qualify and 
how they couldn't qualify for those additional managers.
    So there is a process where the default position is one 
manager, one set of subsidies, but if you can prove that you 
have a complex and significantly large operation, you can 
basically go to one or two additional managers, for a total of 
three.
    But, again, it impacts a very, very narrow framework. It 
does not impact family farming operations, it does not impact 
corporations because of the law.
    Mr. Crawford. Okay. I appreciate the bright line. I think 
it would be very helpful if that bright line were as bright as 
possible to help allay any kind of concerns that, particularly, 
as you mentioned, in the southern region, where we have 
economies of scale to a larger degree.
    You mentioned in your testimony that the MIDAS platform is 
currently being used to help manage records for about 11 
million FSA customers. Can you tell us if other agencies like 
the NRCS have access to these records to facilitate the work 
they are doing for producers?
    Secretary Vilsack. We are in the process of working with 
the NRCS. And the quick answer to your question is yes. But, 
actually, it also works the other way, in which FSA is working 
with the NRCS to utilize the Gateway technology system and 
process that NRCS has developed to allow for that producer 
today to be able to access records and to look at contracts, to 
look at payment history, et cetera, from their home as opposed 
to going to an office, which was the case before.
    We, obviously, want to then piggyback the FSA aspect to 
provide that same kind of flexibility in the future. So we will 
be using and trying to figure out how to merge those efforts so 
that we provide greater convenience to customers, producers.
    Mr. Crawford. Okay.
    I want to jump into the ACRSI, Acreage Crop Reporting 
Streamline Initiative. The report received by the Committee on 
the accomplishments of ACRSI listed a number of key outstanding 
efforts that haven't been completed yet.
    I certainly understand that they are complex systems that 
involve large amounts of data, but what can you tell us on how 
those outstanding issues for integrating systems across the 
FSA, RMA, and AIPs are being addressed? And what is the 
timeline for completion?
    Secretary Vilsack. The next big step in that process is 
this summer, where we will be basically taking a look at which 
contractor, which provider can provide us the best opportunity 
to take the next step, based on the pilots that have been 
taking place in Illinois and Iowa, which have been extended. We 
are learning lessons, and we are going to be determining how to 
best integrate this system on top of the system, the foundation 
that was laid with MIDAS investment.
    So, this summer, we will be making that determination 
review. And then, from that point on, we will begin to ramp up 
the number of people who are involved in the system, to 
eventually get to a nationwide effort.
    I would like to be able to tell you a specific date. The 
problem is I don't know what problems are going to crop up in 
that ramp-up process. I think this is a much better way to do 
it than in the past. So it may take a little bit longer at the 
front end, but it should have less inconvenience and confusion 
at the back end. And it should be better for producers at the 
end of the day.
    We are going to work on this in a very thoughtful, systemic 
way, which is going to be making progress as we go along. We 
are not delaying this. We want to do it right.
    Mr. Crawford. Thank you, Mr. Secretary.
    I yield back.
    The Chairman. The gentleman's time has expired.
    Mrs. Kirkpatrick, for 5 minutes.
    Mrs. Kirkpatrick. Nice to see you, Mr. Secretary. Thank 
you.
    I am going to ask you about two projects in my district 
that you are involved with that are very important to our 
economic development.
    The first is 4FRI. Campbell Global has left the project, 
and I would just like to know what effect that has had on the 
progress of 4FRI. And where does the progress of 4FRI stand 
today?
    Secretary Vilsack. Well, the Record of Decision for the 
Forest Service was signed, Congresswoman, in April of this 
year. This decision basically covers roughly a million acres, 
and it includes 430,000 acres of mechanically treated area and 
prescribed burn area.
    The stewardship contract, phase one stewardship contract, 
was issued to Good Earth Power. They have 19 task orders 
covering roughly 32,400 acres, of which 4,200 acres has already 
been harvested. So that work is proceeding.
    Chief Tidwell recently visited the 4FRI area and certainly 
understands it is a priority for you, but you need to know it 
is also a priority for us because it is essentially the way of 
the future. And we have been using 4FRI as an example of better 
collaboration in other parts of the country to try to get folks 
to understand how to streamline this process.
    We are going to continue to work with diverse interest 
groups to make sure that this thing is implemented and 
implemented in a timely way.
    Mrs. Kirkpatrick. Is there a plan B in case Good Earth 
can't fulfill the task orders?
    Secretary Vilsack. I don't----
    Mrs. Kirkpatrick. In other words, would other contracts be 
let so that we can actually meet what needs to be cleared?
    Secretary Vilsack. There are other forests within 4FRI that 
are being prepared. And let me have my office check with you in 
terms of what plan B is.
    Mrs. Kirkpatrick. Okay.
    Secretary Vilsack. As I sit here today, I don't know what 
plan B is, because we are hopeful plan A works. But if it 
doesn't, we obviously will look for additional contractors who 
are interested and able to do the work.
    Part of the challenge--folks say they want more timber 
harvested. And, in fact, this Administration has harvested more 
timber, and we continue every year to ramp up the number of 
board-feet that we are treating. But that requires resources. 
And I don't want to get into fire suppression, but that is a 
problem, in terms of budgeting.
    Mrs. Kirkpatrick. Well, I appreciate your interest in the 
project. You actually came out to Arizona and looked at our 
forests. And it is a model for a collaborative effort on forest 
health and bringing back the timber industry.
    My second question is about the Apache Railroad. It is a 
critical economic asset for Navajo County and the Town of 
Snowflake. In my district, the railroad itself provides good 
jobs. It is very important to my pork producers, the timber 
operations, and potash mining.
    Can you tell me what the status is of the Little Colorado 
Water Conservation District's application for a community 
facilities loan for the purchase of the Apache Railroad?
    Secretary Vilsack. What I can tell you, Congresswoman, is 
we need your help. We need your----
    Mrs. Kirkpatrick. Okay.
    Secretary Vilsack.--help to encourage folks to complete the 
application and to provide us a full and complete application.
    What was submitted was incomplete. We have notified them of 
that fact, and we are awaiting a response to our request for 
additional information. So----
    Mrs. Kirkpatrick. Okay.
    Secretary Vilsack.--anything you could do to help us get 
that additional information----
    Mrs. Kirkpatrick. We will do that. Time is of the essence, 
and it is a really important project, so we will certainly work 
with your office.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The gentlelady yields back.
    Mr. DesJarlais, for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman.
    Secretary Vilsack, I know that no trip to the Agriculture 
Committee would be complete without a lively discussion about 
black vultures, right?
    We are continuing to have problems in Tennessee. Charlie 
Hord brought this to our attention, from the Tennessee 
Cattlemen. And we have talked about this now two or three 
times.
    There is a provision in the farm bill Livestock Indemnity 
Program where producers are eligible for compensation for 
losses against protected species like black vultures. But what 
has been happening is that, after they have these losses, the 
Farm Service Agency representatives are telling farmers that 
they need someone from Federal agencies to come out and verify 
the losses; however, APHIS is telling farmers that they are not 
able to go and verify these losses.
    So there appears to be some kind of a miscommunication, and 
I wanted to make you aware that we are still having problems 
with that. Do you know of any action that has been taken to 
address this?
    Secretary Vilsack. Congressman, the honest answer is I 
don't. But you asking the question will prompt me to go back to 
the office to figure out if there is a third way to get this 
done. I understand APHIS is strapped, and that may be the 
reason. But that is not a particularly good reason for your 
producers, so let me see what we can do.
    Mr. DesJarlais. One suggestion has been made that the state 
extension services be able to do that or possibly even 
veterinarians be able to certify the losses. Is that something 
we could maybe entertain?
    Secretary Vilsack. That is a good point, Congressman. And 
it is something we try to impress upon our folks at USDA, that 
if you can't get the job done for whatever good reason, valid 
reason exists, then the next best thing is to figure out a way 
in which somebody else potentially could do it. And we 
obviously haven't done as good a job on that, in this 
particular circumstance, as we could. We will work on it.
    Mr. DesJarlais. Okay.
    I would just touch on one other thing on that issue, that 
many of the farmers and ranchers have voiced concerns about the 
process of submitting the application, that it just takes too 
long to ultimately deal with the problem. The only method 
currently for submitting an application is via the mail, snail 
mail. And some of the claims processes take 4 to 6 weeks, and a 
lot of times calving season is over. And so maybe we could also 
look at a more efficient permitting process, perhaps something 
online and then perhaps something for more than a year.
    Secretary Vilsack. We have a process improvement effort at 
USDA where I have tasked each mission area to identify two 
major process improvement projects that they work on in order 
to reduce time inconvenience to producers. We have had pretty 
good success. We have saved over 100,000 hours of time as a 
result of this.
    But this sounds like a good opportunity for us to maybe 
suggest to APHIS that this could be a process improvement 
initiative.
    Mr. DesJarlais. Sure. And, certainly, my office is willing 
to do a lot of the legwork on this, so if you can have someone 
follow up with our office on this issue, we would be happy to 
work with you and help get it resolved. And thank you for 
indulging me for the third time on this issue.
    Secretary Vilsack. Well, I apologize you had to bring it up 
a third time.
    Mr. DesJarlais. I yield back.
    The Chairman. The gentleman yields back.
    Ms. Graham, for 5 minutes.
    Ms. Graham. Thank you.
    Thank you, Mr. Secretary. It is good to see you.
    Secretary Vilsack. Nice to see you.
    Ms. Graham. I appreciate you being in my district for 
Florida A&M's commencement last May. Wonderfully received and 
much appreciated.
    Secretary Vilsack. Thank you.
    Ms. Graham. While you were there, you had an opportunity to 
go to Gadsden County, and I know that you met with farmers and 
local area leaders. During that time there, you spoke about the 
ways that the Department of Agriculture can assist in low-
income, high-poverty, rural communities.
    You mentioned the 1890s agribusiness partnerships. I am 
curious if that is what you were referring to during that or if 
you could elaborate more on that.
    Thank you.
    Secretary Vilsack. Congresswoman, I appreciate the 
question. It is part, but not by any means all, of what we are 
trying to do. And, with your permission and the chair's 
permission, I am going to a elaborate on this just a bit.
    When I came into office, one of the first suggestions that 
was made to me was that there were literally tens of thousands 
of claims against the Department for discrimination in the 
past, and there was an effort to try to make sure that that 
didn't reoccur.
    And one of the things that we noticed was that we weren't 
getting information, we weren't getting programs instituted and 
implemented in high-poverty areas. And part of the reason for 
that is because sometimes those areas don't have the 
sophistication and the technical assistance that would allow 
them to basically compete successfully for competitive grant 
programs. So that was the genesis and reason for putting 
StrikeForce together.
    Now, there were obviously some issues concerning the 
implementation early in the process of StrikeForce, but we have 
essentially significantly changed that program, so now it is an 
integrated effort between NRCS, FSA, RD, and our nutrition 
programs, going down into a county area like the one you 
mentioned and asking the question, what can we do, what do you 
need, and then trying to figure out, collaboratively, a way to 
make sure that it happens.
    To date, we are now in 21 states, over 880 counties, I 
believe. We have 1,000 partners that are local partners that 
are helping to drive this effort. And, as a result, we have 
invested nearly $16 billion in 129,000 different projects. It 
could be a home loan, it could be a business loan, it could be 
a conservation project, it could be a nutrition effort.
    What we were talking about there was to try to figure out 
ways in which we could use the agricultural base in a more 
creative and more value-added way in that county, as part of an 
effort to try to address child poverty. Because you are not 
going to be able to address child poverty, unless you have 
decent jobs; you are not going to have decent jobs unless you 
use your natural resources in the most effective way.
    So part of what we are trying to do is to try to figure out 
how to do that, and we have a great partner in Florida A&M. We 
have given them a substantial amount of land that could 
potentially be used in a Beginning Farmer effort. And you could 
link that Beginning Farmer effort and especially crop 
production that could occur on that land with a Wal-Mart.
    And, frankly, that is what has happened in Georgia. We have 
80 African American farmers who are selling collard greens to 
Wal-Mart in Georgia that have now developed a successful co-op. 
That is the kind of thing that we would like to be able to do 
more of. But it takes time, and it takes commitment and focused 
effort.
    Ms. Graham. Well, you will find that people in Gadsden 
County are ready to work hand in hand with you. And anything 
you can do, anything my team can do to help in this 
partnership, we stand ready to do.
    Secretary Vilsack. Well and we have taken the additional 
step of asking other Federal agencies to work with us. And that 
is why the President developed the child poverty initiative, in 
which we will be looking at a variety of factors involving 
child poverty, and we will be selecting 20 areas within the 
country to sort of focus on a two-generation approach to child 
poverty, not just programs for kids, not just programs for mom 
and dad, but programs that will work for the family 
collaboratively and in concert and in an integrative way.
    We think that there is an opportunity there to maybe make a 
dent in the child poverty rate in rural areas, which is 
unfortunately too, too high.
    Ms. Graham. Well, thank you. Thank you very much. And 
again, I look forward to working hand in hand with the 
Department of Agriculture in this project. And thank you for 
your commitment to helping work on child poverty. It is 
certainly a significant issue not only in Gadsden County, but 
across our district and our country. So I really appreciate 
that. And Mr. Chairman, I yield back the balance of my time.
    The Chairman. The gentlelady yields back. Mr. Yoho, for 5 
minutes.
    Mr. Yoho. Thank you, Mr. Chairman. Mr. Vilsack, good seeing 
you again.
    Secretary Vilsack. Nice to see you.
    Mr. Yoho. I want to go back to the MIDAS issue. When that 
first started, I saw that it was initiated under President 
Bush, and then in 2009 is kind of when it came together. When 
that was bid out, was that a competitive bid on that IT 
program?
    Secretary Vilsack. I don't want to mislead you. I am not 
sure. I would be surprised if that weren't a competitive bid, 
but I can check on that.
    Mr. Yoho. Well, I only ask that because when I looked at 
the StrikeForce, the language in here says that it looked like 
those were given out without a competitive bid. And so that 
raised the question on MIDAS. And then when I read through 
this, it just talks about the inefficiencies and the oversight 
of the FSA office watching this, and it says FSA has obligated 
over $444 million on the project as of 2015, but it has not 
modernized the farm programs.
    And we heard that you only have two applications working. 
Is that program even worth continuing, or is that something 
that needs to be ended and not put good money on top of bad and 
go to something else?
    Secretary Vilsack. Well, first of all, I am not going to 
suggest that this was done in an effective way, because 
obviously it wasn't. But it started off with a very grand 
vision and an implementation plan that didn't understand and 
appreciate how difficult it was going to be to overlay all of 
this on top of a 1980 system.
    There was this disconnect between the folks in Kansas City 
who do a lot of our IT stuff and the folks in D.C. who do a lot 
of our IT stuff. They weren't communicating particularly 
effectively, and we didn't have enough oversight. All that has 
been changed. That has been fundamentally changed.
    Mr. Yoho. For the future, I hope it is, because if it was a 
1980 system that they started with, and then it was 2009 when 
things were starting to be implemented, you would have thought 
they would have been projecting ahead on the new technology 
that is going to come out.
    Secretary Vilsack. That relates to the fact that there are 
2,100 offices and people in those offices that are pretty 
comfortable with one system. And none of that was really 
particularly well thought out. So what I did, once I became 
fully aware of the problems, I said we are going to stop MIDAS, 
we are going to start looking at this thing incrementally. So 
we did the first effort, which was to make sure that folks 
could access their records regardless of where they were. That 
is a big convenience opportunity and a tremendous savings of 
staff. That is implemented. Then the business integrity stuff 
to reduce errors. Now we are working on the questions that have 
been posed, working collaboratively with NRCS to allow 
producers to work from their homes.
    That process is in play, and hopefully over the course of 
the next few months or so that will see progress on that. So 
there is work being done. So I don't think we want to say we 
should stop the program. We don't want to stop the program. We 
want to make it more convenient.
    Mr. Yoho. Well it was saying here that it is only an 
effective or useful life span of 2021. And I have two other 
questions, so I am going to move on.
    And it is said that the FSA continued to pay the 
contractor, as of April 2015, $213 million in taxpayers' 
dollars were obligated, and the OIG reported that during the 
timeframe of questionable performance, FSA paid the contractor 
over $108 million. I mean isn't there a way to stop that? If 
you have an inefficient contractor, or one that is inept, is 
there a way that you can stop a program in the future? And then 
I have something I have to ask you about citrus.
    Secretary Vilsack. The answer is yes. And that is why we 
are on the ACRSI effort, we are looking at a more intensive 
process to determine whether or not contractors who worked on 
this in the past should continue or whether we should bring new 
people in. And of course that has caused some interesting 
concern.
    Mr. Yoho. Well I would like to work with you on that. And 
then just talking about the citrus in Florida. As you know, the 
citrus greening, and I appreciate the help you have given us. 
Florida, we had a high of over 300 million boxes of oranges 
that accounted for $4.5 billion in revenue. And we have seen 
that drop steadily and rapidly due specifically to citrus 
greening.
    Is there anything that is being held up in that program or 
that needs to be expedited, we just talked with our ag 
commissioner yesterday, in Florida, we have gone from 300 
million boxes, then it went down to 200, this year's crop looks 
like it is going to be under a hundred million boxes. And it is 
at a point where it won't sustain the infrastructure for that 
whole industry. And you are looking at millions of jobs that 
will be lost. What is your comments in 14 seconds?
    Secretary Vilsack. Well, the challenge, obviously, is to 
find a solution. And that is why it was important to continue 
to put research money behind that solution. And that is exactly 
what the Congress did in the farm bill and providing additional 
resources directed to citrus greening research. That is 
precisely what we are doing getting that money out the door as 
quickly as possible and in the hands of folks who are doing the 
research.
    There is some promising research on vectors. There is some 
promising research on heat therapy. There is some promising 
research on phosphorous utilization that we think potentially 
could over the long haul solve this. But that is basically 
where the focus is, on essentially containing it to the extent 
we can, and trying to figure out through research how to solve 
it.
    Mr. Yoho. I appreciate your efforts. And Mr. Chairman thank 
you for letting him go over. Thank you.
    The Chairman. The gentleman yields back. Mr. Scott, 5 
minutes.
    Mr. David Scott of Georgia. Thank you, Mr. Chairman. 
Welcome, Mr. Secretary. First of all, Mr. Secretary, it was 
great being with you in Georgia back in March when you came. 
And we had a wonderful time.
    Mr. Secretary, my State of Georgia produces more poultry 
than any other state in the United States. On an average day, 
the Georgia poultry industry produces 29 million pounds of 
chicken, 6.3 million pounds of eggs, and 5.5 million pounds of 
hatching age. And so you can see we have a very profound 
economic and business agriculture impact with our poultry.
    And I wanted to ask you, with the migratory season coming, 
and birds coming south, can you tell us exactly what your 
Department is doing to help thwart this avian bird flu in 
getting down into the South?
    Secretary Vilsack. Congressman, we are taking a number of 
steps. Let me start with something that Congressman Peterson 
has been involved in and helpful with, and that is the 
development of a vaccine that could potentially be of 
assistance. We are making progress. We have a seed strain that 
appears to be fairly successful with reference to chickens. It 
is now in the process of being tested for turkey. Once those 
tests are completed, it will go to the company that basically 
is capable of producing the vaccine. And they in turn will work 
with other companies that are working on vaccines to begin the 
process of developing it commercially. We have requested 
resources to be able to allow for stockpiling, which I know 
Congressman Peterson is interested in us doing. So that is 
first and foremost one thing we are doing to try to focus.
    The second thing we are doing is if we are able to obtain a 
vaccine that is a hundred percent effective, we want to work 
with our trading partners so that we don't discourage trade as 
a result of the utilization of vaccine in very targeted ways.
    Mr. David Scott of Georgia. Well let me ask you, what is 
being done specifically to help the growers? I mean 
particularly----
    Secretary Vilsack. The vaccine. One thing is the vaccine. 
The second thing is to focus on biosecurity provisions that 
would allow them to tighten up their operations so that they 
could reduce the risk of this occurring. There is not a lot you 
can do about changing the flight of birds in terms of the 
migratory patterns.
    Mr. David Scott of Georgia. Well let me ask you, Mr. 
Secretary, what about funding? What about helping with funding 
on this? There are certain funds that the APHIS is responsible 
for. I want to know are any of these funds going to help the 
growers on the ground?
    Secretary Vilsack. Yes. We have already committed well over 
$500 million for assistance to growers in two primary 
categories, one, indemnifying for loss, and two, helping to pay 
for the reasonable expenses of cleanup and disinfection.
    We are also working closely with the industry to try to 
create as tight a set of biosecurity protocols as possible so 
that we do the best job we can to mitigate the consequences and 
spread of this if it occurs again.
    Mr. David Scott of Georgia. And so you are saying there are 
funds that can be directed to help the growers on the ground--
and they have that?
    Secretary Vilsack. And they actually have been. They 
actually have been. We have actually gotten resources out to 
farmers.
    Mr. David Scott of Georgia. All right. The other thing is I 
want to compliment you working with my alma mater, Florida A&M 
University for that tremendous land in Florida will be the 
largest acquirement of land to help beginning farmers for any 
of the colleges. And I just want to thank you for that.
    And while I am on the subject of 1890s, Mr. Secretary, your 
Assistant Secretary for Civil Rights, Mr. Joe Leonard, joined 
with many of us in the concern for getting more African 
American students going into the business of agriculture and 
agriculture business. And we are very, very, very much onboard 
with that. I want you to also tell him how much we appreciate 
him providing that leadership to help us with getting funds to 
be able to help these students to be able to go into careers in 
agribusiness.
    And one of the things we hope we are able to do is be able 
to tweak language in the farm bill that will allow these 1890s 
to be able to add the area of student scholarships and loan 
forgiveness, much as we did for our veterinarians. As you 
remember, we sponsored legislation, got that passed, we saw a 
shortage of veterinarians, and we actually did, and helped them 
with loan forgiveness. So I wanted to make you aware of that 
and certainly ask for your support and help as we move forward 
on that initiative to help the African American students as 
well. Thank you, sir.
    Secretary Vilsack. Mr. Chairman, 5 seconds? Just 
Congressman, there are I believe 550 scholars currently working 
at USDA from these 1890 universities that are getting 
scholarship help and assistance and the commitment of a job at 
USDA. So we are going to continue to work to make sure that 
bright young people have opportunities at USDA as well as 
agribusiness.
    The Chairman. I thank the gentlemen. The gentleman's time 
has expired. Mr. Kelly is recognized for 5 minutes.
    Mr. Kelly. Thank you, Mr. Chairman. And thank you, Mr. 
Secretary, for being here.
    First, just going back to the MIDAS, I thank you first for 
your vigilance, once you found out there was something going 
wrong and the money was being appropriated, for jumping on that 
and taking immediate action. However, to me as a former 
prosecutor, there is no greater crime than the violation of the 
public trust and just basically corruption. And so I thank you, 
but I am very disappointed that our justice system did not 
either civilly or criminally punish someone for abusing that 
much of the public's money.
    What policies and procedures have you taken now to ensure 
that we don't take as long to discover fraud and abuse by your 
Department? Have you done anything? And what steps have you 
taken to ensure that we get to that a little quicker?
    Secretary Vilsack. Well, one thing we have done with 
reference to the StrikeForce in OAO is to basically take a look 
at the recommendations that OIG has recommended. And basically 
we are following through on each one of those recommendations.
    We have a completely different system for competitive 
review and competitive grants in terms of the section 2501 
grants that were a concern. There are actually two sets of eyes 
that look on this. There is a panel that is not connected to 
USDA specifically that reviews the applications. There is also 
a second panel that reviews the mathematical computations for 
determination of competitiveness. And so that process is much, 
much better than it was.
    In terms of MIDAS, we have fundamentally changed the way in 
which we deal with IT. One of the problems we have confronted 
when I became Secretary is that each mission area of USDA had 
its own CIO operating relatively independently of one another. 
That has changed. We now have a process in which everyone is 
sort of working in a collaborative and integrated way so we 
kind of know what the right hand is always doing and the left 
hand.
    We have also created an E-Board that basically reviews 
projects, that requires updates, and is willing and able to ask 
the difficult questions. We have solved the issue, to a certain 
extent, of the different vision between Kansas City and D.C. 
And we have put a project manager in charge of each of these 
major projects so that I know that there is someone personally 
responsible for oversight. And those people are meeting with me 
on a regular basis.
    I have monthly meetings on MIDAS, I have monthly meetings 
on the ACRSI. And I am going to continue to have those 
meetings. And I have monthly meetings on our efforts at 
Blueprint, which is designed to create savings within and more 
efficient government. So there is a lot going on in that space 
that didn't go on in 2009 and 2010.
    Mr. Kelly. Thank you, Mr. Secretary. On the Supplemental 
Nutrition Assistance Program, how are you working with states 
to ensure or to bolster our anti-fraud efforts? Because I 
understand both you and the states have a process to work. So 
how are we working with states to bolster that process?
    Secretary Vilsack. Two different responses to that, 
Congressman. First of all, the fraud rate in SNAP is a little 
bit over one percent. It is historically at low rates, 
significantly lower than it was 5 years ago, 10 years ago, 15 
years ago. Two reasons: One, we are working more 
collaboratively with states. We are providing states with 
better training. We are data mining information. There are 
seven million transactions in SNAP a day. We are using computer 
technology to sort of identify where there may be potential 
problems. For example, we saw a problem with lost cards, people 
coming in every other month saying I lost my card, I lost my 
card. We now have a process that we piloted in North Carolina 
that was very successful, basically advising folks when they 
have had multiple cards lost that, hey, this is a problem and 
you may be violating the law. We have seen a significant 
decrease in the number.
    We did over 700,000 investigations and interviews on a 
personal basis. Over 40,000 people were disqualified from SNAP 
as a result of those investigations. And we are constantly 
looking at the 260,000 businesses that are SNAP-eligible. And 
about 1,400 of those were basically stopped from doing business 
because they were involved in activities that they shouldn't be 
involved in. So there is an ongoing effort. We obviously still 
have work to do. We have teams that are now in place, 
additional staff dedicated to this. We are going to continue to 
work on it. But when you are dealing with as many transactions 
and as many people, there is still work to be done.
    Mr. Kelly. Thank you, Mr. Secretary. Mr. Chairman, I yield 
back the balance of my time.
    The Chairman. The gentleman yields back. Thank you. Ms. 
Lujan Grisham, 5 minutes.
    Ms. Lujan Grisham. Thank you, Mr. Chairman. I share the 
sentiments of my colleagues. It is nice to have you, Mr. 
Secretary. And thank you also for participating in program 
review and program support and visiting my home State of New 
Mexico.
    I actually have a similar line of questioning. And I 
appreciate that you spent so much time with my colleagues Mr. 
Kelly and Mr. Yoho on figuring out what is the balance? You 
don't want to throw out a program, the outreach programs and 
the StrikeForce initiative and Beginning Ranchers and Farmers. 
These are the kinds of initiatives that in a state like New 
Mexico are not only incredibly meaningful if they are 
implemented correctly, and we don't have waste or abuse in 
those programs, but are critical. We have the average age of 
our farmers now is 60 and over.
    And I appreciate that you have had another internal review 
looking at discriminatory practices and really looking at 
making sure that you move the Department forward in being clear 
about your relationship with these communities. And I am 
grateful for that. I think there is a lot of work to be done in 
those programs. So looking, being forward thinking and 
proactive so that it is not a hotline tip that we are thinking 
maybe about random reviews of certain programs. And even in 
doing that so that it is not particularly focused on waste and 
abuse, because the intent isn't to try to find programs that 
don't work, although we want that information, we want 
accountability, we want staff to be held accountable every time 
there is a purposeful or there is conduct that creates 
accountability issues in taxpayer-funded programs.
    But in addition, and as important, is making sure that 
these programs work in the way that they are designed to, and 
if they are not, to readdress that so that they can. Because 
those initiatives, both coming from the Department as 
identified strategies and methods that will make a difference 
for future farmers, and growing food for this country, but also 
responding to ideas that come from our constituents directly in 
this Committee.
    Is there anything we have missed in this dialogue that 
helps you have a relationship, particularly with this 
Committee, but everyone, to really address both the 
accountability so we are holding folks accountable, including 
in the private sector, and thinking about those clawbacks and 
making sure that they are not involved in mismanaging these 
programs, and also doing everything we can to highlight that 
USDA is leading the Federal example for best practices and 
making these programs work for their intended beneficiaries?
    Secretary Vilsack. Well a couple of things. I think we are 
in a much different place than we were in 2008 when OAO was 
created. We have a receipt for service system now in place so 
people can actually prove that they went into an office, they 
didn't get help, they don't have a problem as they did in the 
past of saying we don't remember him coming in. Well, he has a 
receipt for service or a receipt for request for service.
    We also put minority members on county boards and county 
committees, which has helped. And we have seen the election of 
a lot of those minority members occur after their selection. So 
that is a good thing. The StrikeForce is in a much better place 
and much more effective. I would say the one thing that you 
could potentially look at is something that the Chairman raised 
in his questions, or in my answer, and that is at what level 
will you require before action can be taken? In other words, is 
that standard of a criminal judgment and a civil judgment, is 
that the proper standard or the proper bar that has to be 
crossed before you can take action? I don't know. I think that 
is something that you all may want to talk about. It may be 
that that is a bright enough line that makes it easy for people 
to know when to and when not to hold people accountable.
    But it makes it pretty hard, right, other than removing 
somebody from office or asking them to leave the Department, it 
makes it a little difficult if that is the bar. So that may be 
something you may want to look at.
    Ms. Lujan Grisham. Mr. Secretary, I appreciate that. And we 
have these conversations about some of the differences between 
Federal employment and Federal contracting systems and other 
government systems, local level and state. And I inherited an 
agency in the 1990s that couldn't account for a million 
dollars, which at the time was ten percent of our total budget. 
And we dismissed almost half the workforce. And it was 
difficult in a civil service environment, but it was warranted.
    And you need to have the flexibility to have a hard line 
when you need a hard line, and the opportunity to retool, 
redirect, and retrain employees who are working hard sometimes 
when a program is not flexible enough to meet the needs of its 
constituents. So I applaud the Chairman and look forward to 
more conversations of that nature to get it right.
    The Chairman. The gentlelady yields back. Mr. Davis, for 5 
minutes.
    Mr. Davis. Hi, Mr. Secretary. First off, I want to thank 
you again for coming in here. You have always been open and 
sometimes brutally honest with your answers. I appreciate your 
participation in this oversight hearing today. It has been 
great to work with you and many of your staff at the USDA on a 
wide variety of issues, where we don't agree on every single 
issue. One thing that I found out about you personally, and 
also the USDA, is that you are willing to listen to all sides. 
So thank you for that.
    And you know it wouldn't be a hearing without you coming 
here without me bringing up the school nutrition program. I do 
just actually want to thank you. I want to thank the Department 
for actually bringing about some flexibility. I think we can do 
a little bit more. I look forward to working with you on that. 
Again, I would like to invite you to come out to one of our 
schools and talk to some of the folks on the ground in Illinois 
about the program. Your folks have done that. They have done a 
great job. And I know we are working together to make it even 
better.
    But before I get into the oversight question, I do want to 
bring up one issue not related to school nutrition, but the 
summer meal program. I visit as many summer meal sites as I 
can. And I know we have a concern with the lack of 
participation because of some transportation issues both in 
rural areas that I serve and some of the smaller urban areas 
that I serve, too, and then other urban areas that I don't 
serve. Can you give me any suggestions on how we might be able 
to increase participation in the summer meal program that you 
and I can work together to make that happen?
    Secretary Vilsack. Well I would say two things in response. 
And I appreciate your acknowledgment of our team at FNS working 
with you through some of the difficult issues involving the 
school lunch program. Two things. One, the E&T Program that we 
have in a pilot we believe does effectively deal with the issue 
of transportation in remote areas because it basically provides 
an alternative to a concrete specific site that a youngster has 
to go to. It gives that family a little more flexibility to get 
the food that basically provides summer meals. So an extension 
of that program might be in order.
    The second thing would be to work with us and to direct us 
to be a bit more flexible in terms of the actual physical site. 
Right now we have a fairly narrow view of where these kids need 
to congregate. And I have been encouraging our team to look at 
creative ways to be more flexible so that instead of forcing 
kids to come to us, we figure out where the kids are to begin 
with and provide mobile opportunities. And some of that has 
happened, but we probably could do more.
    Mr. Davis. Well, anything I can do to be helpful in 
offering suggestions for that flexibility based upon my visits 
in my district, I am happy to help. And I appreciate your 
willingness to do so, sir.
    Secretary Vilsack. Thank you.
    Mr. Davis. I do want to ask you one quick oversight 
question. My colleague, Mr. Yoho, alluded to some IT issues in 
the past. I just want to know what has the USDA done, what 
steps have you taken to implement some IT solutions to correct 
some of the problems that have been discussed here today? And 
what have you learned maybe in best practices from the private-
sector? And are there any issues that you see on the horizon 
that we might be able to assist with?
    Secretary Vilsack. Well, when I came into this Department I 
asked to send an e-mail to the employees to introduce myself. 
And I was told that I couldn't do that. And I thought, well, 
now that can't be. Clearly, I can send an e-mail to the 
employees. They said, well, sir, you can send an e-mail, but 
you can't send a single e-mail, you have to do 17 separate e-
mails. I said what do you mean 17 separate e-mails? Well, we 
have 17 separate e-mail systems. Well, we can go into a long 
detailed conversation about how many problems there are with 
that model. But we spent a considerable period of time, and we 
now have a single e-mail system, which obviously provides 
greater security and allows us to save money at the same time.
    So one thing we learned from the private-sector is an 
effort to try to strategically source our technology. Again, I 
mentioned the fact that we had silos, we had individual CIOs. 
They were off buying different systems and different hardware 
and different software that weren't necessarily compatible. We 
now have a strategic sourcing initiative, where basically 
before you do something you better find out who else in your 
mission area is doing the same thing, and maybe you can 
purchase in bulk. And by the way, before you even do that how 
about checking with other mission areas to determine whether or 
not they are buying the same thing at the same time. In which 
case you could save substantial money. So there is a focus on 
that.
    And there is a focus on consistency. And we have spent a 
good deal of time recently, obviously, in terms of cyber issues 
reviewing our systems, identifying and creating authentication 
systems that are much, much tighter than they were 6 months 
ago.
    Mr. Davis. Thank you. My time has expired.
    The Chairman. The gentleman yields back. Ms. Plaskett, for 
5 minutes.
    Ms. Plaskett. Yes. Thank you, Mr. Chairman, Mr. Ranking 
Member, for this hearing. I think it is very timely and much 
needed. And I appreciate so much the Secretary's having not 
just being forthcoming, but really having a depth of 
information that he is able to provide the Committee with.
    Mr. Secretary, there has been a quite a bit of discussion 
about the Office of Advocacy and Outreach, created in part to 
avoid the wholesale disenfranchisement of rural farmers not 
being able to receive services. But I wanted to know if you 
could speak a little bit about, and if you had information as 
to, the penetration of minority farmers in the growth of 
agricultural exports.
    I know that under your leadership the agency has really 
grown tremendously the amount of exports that our farmers have 
been able to be a part of in being able to send their goods off 
outside of the United States. And I didn't know if there had 
been any data correlated, compiled, or any information that 
lets us know how much of that is really being able to go to 
businesses that are owned by minorities and minority farmers?
    Secretary Vilsack. As you were asking the question, 
Congresswoman, it occurred to me that most of the activity and 
the progress that we have made with minority producers recently 
has been in the local and regional market, in other words 
within the U.S., creating co-ops and doing business with local 
restaurants and local grocery stores and so forth. You ask a 
very interesting question. I don't have the answer 
specifically.
    We do have a breakdown of the number of small businesses 
that we do business with, the minority-owned businesses that we 
generally do business with at USDA. But I don't know that we 
necessarily have a breakdown of how frequently African American 
producers, for example, would benefit from an export. I would 
say my guess is that there is not a great deal for the 
following reasons. One, most of our exports are bulk, a 
substantial amount of them are bulk commodities, which played 
to the strengths of large scale ag producers.
    Number two, if there is an opportunity it may be in the 
organic space. I think a lot of the minority producers are 
getting in this space with the equivalency agreements we have 
been able to negotiate recently with Europe, Japan, Korea, 
Mexico, Canada. There are now new opportunities potentially for 
exports that might be a little bit easier to participate in. We 
have been working with the Commerce Department to try to create 
a streamlined process for companies to export. There are so few 
companies in this country actually export--it is actually less 
than five percent of the overall companies. And most of them 
only export to one country.
    So we are trying to figure out ways in which we can help 
small businesses get in the export game more effectively. So, I 
am happy to go back to our team to ask specifically your 
question, but my sense is that you are probably not going to 
be----
    Ms. Plaskett. I know that in the Virgin Islands the issue 
of organic as well as the fancy foods is an area that our 
farmers would be most interested in. The types of products that 
we would produce that would be outside of our local markets 
would be in the fancy foods, the tamarinds, the guavas, mangos, 
and those types of products. But the one thing that you 
mentioned that was really important as well in our area is when 
you talk about local and regional marketing and local and 
regional produce.
    Because I find that one other thing that I hear quite 
frequently from our local farmers is not having the resources 
to assist them with processing, having cooperatives but not 
being able to do the value-added to those products. What 
resources have you seen being sent out to those areas in that 
respect?
    Secretary Vilsack. Two programs come to mind, maybe three 
programs come to mind. The Value-Added Producer Grant Program, 
the Local and Regional Foods Promotion Program, and to a 
certain extent the Specialty Crop Block Grant Program, which is 
administered through the states and territories, are three 
areas where you could potentially get resources.
    What we will do, Congresswoman, is I will have my team get 
in touch with you and would encourage you to do what a number 
of folks have done recently, which is to come down, have your 
team come down to USDA, we put together a half day presentation 
of all the programs. I think you will be quite surprised how 
many opportunities there are that you may not be aware of.
    Ms. Plaskett. That would be great.
    Secretary Vilsack. And we would be happy to do that.
    Ms. Plaskett. I would be remiss to not mention of course we 
would very much appreciate you and your staff and others coming 
down to the territory. One of the things that you talked about 
is something that is very dear to us, which is your child 
poverty initiative. Presently, about 31 percent of the children 
in the Virgin Islands live in poverty. And so we are very 
interested in our farmers, as well as our local government, on 
how do we have our farmers be able to participate in feeding 
those children through the school lunch program, as my 
colleague discussed, and other areas to be able to serve those 
children.
    Secretary Vilsack. Thank you.
    The Chairman. The gentlelady's time has expired.
    Ms. Plaskett. Thank you so much, Mr. Chairman.
    The Chairman. Mr. Allen, 5 minutes.
    Mr. Allen. Yes, thank you, Mr. Chairman. I just came from a 
markup, Mr. Chairman, so my mind is not all there. But anyway, 
we are back.
    Mr. Secretary, thank you for being here this morning. You 
have a lot going on here today. I just wanted to ask a couple 
questions on the OAO StrikeForce pilot program. USDA officials 
awarded the cooperative agreements non-competitively, and they 
awarded them to unqualified community organizations hand picked 
by political appointee Pearlie S. Reed. According to the IG, 
some of these community organizations were created just months 
before the award was made. These organizations allowed 
approximately $300,000 to expire or be wasted. The OIG 
recommended recovering this sum. Can you tell me what the 
status of that recommendation is?
    Secretary Vilsack. Yes. Two hundred thirty-three thousand 
dollars has been recovered. We are currently in the process of 
establishing proof--there is an issue involving $67,000 we 
believe that still is owed. The entity that we are dealing with 
believes they have already paid it. So we are in the process of 
trying to convince them that they still owe us $67,000. Two 
hundred thirty-three thousand has been recovered.
    Mr. Allen. Okay, sir. Another question. I was in the 
district, and of course our folks are worried about the avian 
flu. Of course we haven't had that problem down South yet in 
Georgia. But they are concerned with the migration of wild 
birds to the South over the winter. Anything we are doing to 
try to stop that?
    Secretary Vilsack. Well, there are a few things that can be 
done. First, is to develop a vaccine and make sure that if we 
are able to develop an effective vaccine that our trading 
partners don't hold it against us for using it. That is still 
an open question. And we have been working with a number of 
countries today to get them convinced to do this, to ban 
regionally as opposed to the entire country.
    And second, working with the industry to identify 
additional biosecurity initiatives and steps that could 
potentially be taken to mitigate the risk of spread of this. 
And then third, I suppose, is to continue to focus on the most 
efficient way of dealing with it if it does hit in terms of 
disposal, in terms of depopulation so that we minimize the risk 
that can occur if we don't do that properly or in a timely way.
    Mr. Allen. Where are we with the development of a vaccine?
    Secretary Vilsack. There is a seed strain that has been 
developed that is 100 percent effective on chickens. It is now 
in the process of being tested by our ARS folks on turkeys. 
Cross your fingers, hope it is 100 percent effective for them. 
Once that occurs, the seed strain will be provided to the 
vaccine company that has basically the license agreement. They 
in turn will then begin the process of manufacturing and 
working with other vaccine companies that would want to 
purchase the license to be able to produce it.
    We have asked OMB for additional resources to make sure 
that we have a sufficient resource to begin stockpiling that 
vaccine. We are also working with, as I said earlier, our 
foreign friends. We had a meeting in Baltimore where over 30 
countries came with representatives to talk to them about the 
appropriate way of banning poultry if we have this. That it is 
not fair to your poultry producers because there is an incident 
in Oregon or Iowa to ban production from you. And so we are 
continuing to work on that as well.
    The last thing we are trying do is convince Congress--this 
is a long term issue, because I am pretty sure this isn't the 
only time we are ever going to have to deal with something like 
this--is to see if we can complete the funding for the poultry 
lab improvements that are absolutely necessary, and 
modernization of that lab.
    Mr. Allen. That would be good. And would this vaccine be 
available fairly soon? Or what is the timetable?
    Secretary Vilsack. I would hope it would be, but I don't 
want to speak for the company in terms of how quickly they can 
turn it around. I am pretty impressed with the fact that in a 
relatively short period of time we have come a long way. The 
previous vaccine was 60 percent effective, which meant that if 
you treated 100 birds, 60 would be okay but 40 wouldn't. Well, 
that is not good enough. You have to get it to 100 percent or 
very close to 100 percent for it to be effective.
    Mr. Allen. I am about out of time, so I won't get to ask 
this question, but I still am hearing a real problem with H-2A, 
as far as legal services in suing our vegetable growers and 
costing them hundreds of thousands of dollars on really 
frivolous lawsuits. So that needs to be addressed. And we need 
to come up with a solution. And I yield back the remainder of 
my time. Thank you.
    Mr. Rogers [presiding.] I thank the gentleman. The chair 
now recognizes himself for 5 minutes. Mr. Secretary, earlier 
when you were answering Trent Kelly's questions about the CIOs, 
you indicated that there were stovepiped CIOs in the various 
agencies in your Department. Did I understand you have hired a 
chief CIO now to oversee those agencies?
    Secretary Vilsack. There has always been a chief CIO. But 
that chief CIO wasn't empowered, if you will, to have 
sufficient oversight, and sufficient responsibility, in my 
view, to basically be able to know and to be able to channel 
all other CIOs from each mission area in the proper direction--
--
    Mr. Rogers. Do they now have to report to that one 
individual?
    Secretary Vilsack. Yes. And there is now a process based on 
a directive that I signed some time ago that says, look, you 
are all in this together here, you are not going to be 
operating separate and distinctly from each other.
    Mr. Rogers. I am glad to hear that. We had the exact same 
problem in the Department of Homeland Security, and it is just 
a real mess if you don't empower one individual to have direct 
authority over those individuals because they want to do their 
own thing.
    Secretary Vilsack. And they do. And that creates a lot of 
problems.
    Mr. Rogers. Glad to hear it. Many people, including myself, 
believe that the EPA's waters of the United States rule is 
expanding the EPA's jurisdiction beyond what they are 
statutorily authorized. If the EPA determines that there is a 
jurisdictional water in a producer's field, but the Natural 
Resources Conservation Service has not identified it as a 
wetland, how will that work? How do you reconcile that?
    Secretary Vilsack. The correct answer is I don't know. And 
the hope would be that that doesn't occur. There is still an 
awful lot of work yet to be done in terms of this issue. I 
don't think we have resolved it. I think there is going to be a 
lot of litigation and concern about this.
    My focus, and frankly what I have told our NRCS people, is, 
we are in the business of trying to help farmers do whatever 
they have to do to comply with whatever the law or regulation 
might be. So that is why we are trying to figure out ways in 
which we can be better at what we do at NRCS, more efficient, 
more effective, more timely, to be able to use resources more 
effectively. That is why we are excited about the RCCP program, 
because we think it is a way of dealing with large watershed-
scale projects that could potentially make a big difference in 
terms of water quality. So that is our focus.
    Mr. Rogers. Let me ask you the alternative to that. What if 
USDA identifies wetlands that the Corps and EPA have not 
identified? What will that mean for the farmers and ranchers? 
Will these wetlands be Clean Water Act wetlands?
    Secretary Vilsack. I don't know the answer to that 
question, Mr. Chairman. And I would be happy to have our team 
try to respond to both of those questions. Those are technical 
questions, and frankly I just don't know the answer.
    Mr. Rogers. I fear that they are going to end up in 
litigation. And that is just so unfair to our farmers and 
ranchers.
    Secretary Vilsack. I think that is a pretty safe bet today.
    Mr. Rogers. Thank you very much. That is all I have. The 
chair now recognizes the gentlelady whose name I can't see from 
here.
    Mr. Kuster. No problem, Ms. Kuster from New Hampshire.
    Mr. Rogers. Ms. Kuster, for 5 minutes.
    Mr. Kuster. Thank you very much. Thank you, Mr. Secretary. 
I apologize for my delay, but your contemporary and colleague, 
Mr. McDonald, was at the Veterans' Affairs Committee. And we 
had a very informative hearing there.
    I wanted to say first off thank you very much. I am very 
excited in New Hampshire that we have growth in farming, I 
think one of the few states, five percent increase in new 
farmers, and typically small. A lot of emphasis on farm-to-
table and buying local and farmers' markets really taking off 
in our region.
    I wanted to talk to you about the program of beginning 
farmers and ranchers. And an Inspector General report issued in 
May of 2015 about the generation of farmers that are retiring 
from the industry and how we can encourage--and I don't want to 
say young people, because sometimes it is young people, 
sometimes it is not so young people, it may be people seeking a 
second career. The quote was, ``Despite considerable resources 
and effort provided by USDA agency, the Department lacks 
sufficient performance goals, direction, coordination, and 
monitoring to ensure success that funds were being used 
effectively by farmers.'' And I just wanted to see if you could 
comment on that. How can we implement effective performance 
goals to ensure that taxpayer dollars are being well spent in 
this regard?
    Secretary Vilsack. Well, I have asked the Deputy Secretary 
to lead this effort. And she is traveling around the country 
visiting with a number of organizations and groups of folks who 
are interested in getting into farming or folks who are 
encouraging folks to get into farming.
    One of the issues that has cropped up that we have asked 
specifically the beginning farmer advisory group to look at is 
this issue of land tenure. Candidly, you mentioned the fact 
that there are going to be a lot of people retiring and leaving 
the farming business. And that is probably true. The question 
is what happens to the land? And the question then is, whoever 
owns that land, what is their ultimate goal here? Or their 
relatives' ultimate goal? Is it to maximize return or is it to 
create opportunity for the next generation? Or is it a 
combination of both? And frankly, I have asked this task force 
to come with recommendations on this issue of land tenure.
    What can we do, should we do, ought we do at USDA with 
reference to our programs to ensure that there is that proper 
balance so that it is not a focus simply on bottom line, but it 
is also a focus on next generation, number one.
    Number two, you all asked us to create a military liaison 
position, which we have done with Karis Gutter, who is a Marine 
who works at FSA. Karis is actively pursuing efforts to try to 
get into military bases with information about farming 
opportunities, and basically providing opportunities for us to 
actually go on base to talk to folks who may be retiring or 
thinking about retiring about the opportunities that exist in 
farming.
    I think it is also helpful, the recent effort by the Farmer 
and Rancher Alliance, which is predominantly production 
agriculture, to create a more positive image about farming and 
a more supportive image, to push back a little bit on some of 
the folks who are constantly critical of farmers. And I have 
seen recently some very, very positive, good ads. I saw one 
yesterday from the corn growers that was fabulous about the 
opportunities in farming.
    And the more we focus on the positive aspect of farming, 
the more we focus on all kinds of diversity within farming and 
diversity of size of operations, methods of production, crops 
being produced and people, the better it is going to be in 
terms of our ability to attract more young people, younger 
people, or more folks into this business. We are seeing an 
uptick in beginning farmers. We still have more to do.
    Mr. Kuster. Well, and I appreciate you bringing up the 
military. And I would encourage you as well with veterans. I 
know our Veterans Administration in White River Junction, 
Vermont, on the border with New Hampshire, has a program for 
veterans in farming because of the connection to working with 
their hands, working outdoors. There is good mental health 
aspects to farming that are very conducive to a better 
transition back into civilian life. I also wanted to commend 
your deputy for coming to New Hampshire to have an event with 
women farmers. And I really appreciate that. I think that is 
something that we need to look into.
    And I look forward to working with you on all of these 
programs to bring in different constituencies to farming.
    Secretary Vilsack. If I can, Mr. Chairman, the issue of 
veterans is one that I care very deeply about. It is obviously 
personal to me because of a nephew who served in Afghanistan 
who is now potentially hopefully thinking about a career after 
he graduates from college, in the Forest Service. These folks 
are good problem solvers.
    One of the challenges that we have seen at USDA, and I have 
actually asked Secretary McDonald about this, is we are trying 
to get more veterans to actually work at USDA. And we are 
trying to get more veterans to work in Federal Government 
generally. We have had some success. We have seen increased 
numbers. But the attrition rate, folks coming and then leaving, 
is disproportionately high. And so we are asking our team to 
look at this. Why is that? What aren't we doing? What do we 
need to do to make sure that these folks are acclimated and get 
back into a system?
    The Forest Service is nice because it has sort of a more of 
a military mind-set. But the other mission areas that we need 
to continue to do a little more work so that we make it a 
welcoming place for veterans. And that in turn should increase 
the more people getting into the business of farming from 
veterans.
    Mr. Kuster. Terrific. Thank you.
    The Chairman [presiding.] The gentlelady's time has 
expired. Mr. King, for 5 minutes.
    Mr. King. Thank you, Mr. Chairman. Mr. Secretary, you 
mentioned a vaccine that is 100 percent effective for AI. And I 
am wondering if that might be in reference to a company out of 
Iowa?
    Secretary Vilsack. It is not. It is a different company. 
The seed strain actually, Congressman, has been done I believe 
by our researchers in concert with another company. But there 
is nothing to prevent Harris Vaccine from participating in this 
once we get it figured out.
    Mr. King. And I am hopeful there will be an open 
competition to that and we can bring all the technology to the 
table. And I appreciate your words on that.
    Secretary Vilsack. The key here is for whatever entity gets 
to it first being willing to provide the licensing 
arrangements. And we will absolutely facilitate that. Because 
no one company--this is my belief, I don't know if this is 
right or not--but no one company is going to be able to produce 
as much as we need as quickly as we need it. Hopefully, we will 
be able to get a lot of folks working collaboratively together. 
We stockpile enough so that if this thing does hit and hits us 
hard, we are in a position to respond quickly.
    Mr. King. There is much to be said about a vaccine. And I 
appreciate your comments on this. Also you referenced 
phosphorous, which caught my interest, in your discussion with 
Mr. Yoho. And I happen to have gone to watch a demonstration 
project in Storm Lake, Iowa, right before the 4th of July that 
was taking out, by that demonstration, more than 99 percent of 
the soluble phosphorous that was suspended in the effluent that 
was at the discharge end of the plant.
    And I just wanted to bring that to your attention, that 
there is new technology that is emerging here that looks like 
it could effectively solve the phosphorous problem that we 
have. So this opportunity, I mention that, and I didn't know if 
that was something that you were aware of.
    Secretary Vilsack. I wasn't aware of that. What I was 
referring to was the use of phosphorous at the base of a tree 
that has been hit by the citrus greening that somehow has an 
impact on minimizing the consequences of citrus greening.
    Mr. King. I will get that information to you and ask you to 
pass that along to your people that will want to be focused on 
it.
    Secretary Vilsack. Sure.
    Mr. King. And then another piece of this, there is so much 
to be said about bird flu. And I wanted to make sure that the 
Committee is aware and the public is aware of how big this is. 
I will say I know of no livestock disease problem that has ever 
in the history of this country that has met the magnitude of 
this avian influenza that we have. And I am open to any 
rebuttal to that.
    However, into that, if we are looking at nationwide 48 
million birds that have been affected by this, all dead. 
Seventy-five percent of the layers in the country, Iowa. 
Ninety-two percent of the layers in Iowa in the Fourth 
Congressional District. That is my district. And so this is 
devastating to a very localized region in the country.
    And it began in the turkey region in Minnesota as far as 
the Midwestern component of this is concerned. And I know that 
USDA deployed people up there quickly. By the time it hit in 
Iowa my numbers are about 47 turkey locations were positive 
before it spilled over into two turkey locations in Iowa. And 
then from there it hit the large laying operation near Harris, 
Iowa in Osceola County. That is when it became such a large 
epidemic that it was for a time out of control.
    And so I wanted to speak with you about the things that 
need to be prepared for another event that may happen. And the 
focus on the East Coast, I am glad to see that here. I think it 
is very appropriate that they do that. But the resources that 
you have had, you testified here that they are at least 
adequate to this moment. And I am happy to be supportive if you 
need more resources.
    I would want to bring to your attention some of the things 
like the emergency response component of this, the level of 
urgency that I thought I should have seen, more in line with a 
flood or a natural disaster or a hurricane, perhaps tornado is 
too small a magnitude for this. I thought that level of urgency 
should have been higher. The chain of command so that we know 
what that order of command is and who we can communicate with. 
I would ask you to take a look at that. Maybe look at the Corps 
of Engineers approach on how they bring a lot of resources to 
play under a military-style chain of command so there can be a 
quicker response.
    You mentioned the disposal issue. That is a big problem. It 
was the biggest problem from the beginning. I am very troubled 
by what we had to do. And some of that is composting birds 
outside in wind rows, yes, mixed with compost material, yes, an 
attempt to cover them with saw dust or corn stover. But still 
exposed to birds that can carry that disease elsewhere.
    The epidemiological study that is at this point not 
completely complete is going to be a key to how we bring the 
biosecurity to bear, which might well be the key as to whether 
we can set up something maybe under RMA for an income 
interruption type of insurance for our producers, not only the 
turkey people, but especially the layers. So there are a lot of 
components of this that I would like to weigh in on.
    And I will say this, is it your counsel I should write a 
series of op-eds on this and have that talk, or is there a 
better method that we can convey some of these things so that 
the next disaster, if it hits, pray it doesn't, these things 
that I have been in a position to see also can be implemented 
for solutions?
    Secretary Vilsack. Mr. Chairman, can I respond? Well, the 
first step in the process, Congressman, would be for any ideas 
and thoughts you have, to be willing to share them at the 
meeting that is going to take place next week in Iowa, which is 
designed to basically get people to discuss this openly and 
fully, number one.
    Number two, I agree with you in terms of the incident 
command process. That is why we are setting up a much different 
system. I agree with you that disposal is an issue. But of 
course as you know, it is not just dictated by the Federal 
folks. The state folks are involved, and the local folks are 
involved, and the landfill people are involved. That is why I 
have instructed our team to begin thinking about where could 
this potentially happen in states that have not yet been hit? 
Where are the landfills? Can we begin having conversations with 
landfill operators now to acquaint them with what this is all 
about, why it is not a risk for them to participate in 
disposal.
    Disposal issues, absolutely no question that is an issue. 
And that is why we are looking at ways in which we can do a 
better job of that. The epidemiological study is going to be 
supplemented next week. We may learn additional steps in terms 
of biosecurity. And long term, the issue of an insurance 
product or disaster program certainly makes a lot of sense. So 
there is an awful lot of work that has been done, going to be 
done. If you have input, I am more than happy to receive it 
beginning of next week.
    Mr. King. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    The Chairman. The gentleman's time has expired. Mr. 
LaMalfa, for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. And thank you, 
Secretary Vilsack, for being so available to this Committee and 
faithfully coming as often as you do. It is appreciated.
    So, I just wanted to follow up on previous that we have 
talked in the past about on California's drought situation and 
emergency relief funding that was made available which was 
announced February of 2014. It was intended for emergency 
assistance in the drought period. So actually it was in 
response to 2013 drought.
    And so we still have additional years on top of that. And 
we just need some more help with the state FSA offices on 
getting that out there. Because we have had only a handful that 
have actually been issued of drought relief funds that have 
been processed. And I have the e-mail from one of the state 
staff here too that shows that there is still outstanding 180 
applications of an initial $5.4 million that was approved in an 
account. There is at least $3.9 million still remaining in that 
same reserve that needs to be disbursed in response to the 
2013. So we are here in 2015. And for those that really need 
that, it must be really having a lot of answers they are having 
to provide their bankers, et cetera.
    So could you help us with whatever it is going to take to 
expedite at least in 2015 like ASAP to get those additional--
those 180 applicants, get those out and the remainder of those 
funds, get those disbursed, please?
    Secretary Vilsack. Congressman, I appreciate you bringing 
this to our attention, and as a result of your efforts, our 
prioritizing--I am not going to be able to pronounce this.
    Mr. LaMalfa. Siskiyou.
    Secretary Vilsack. Siskiyou County because of your 
concerns. I would say that part of the challenge we have is 
that it is not just our office, we work and have to work 
through the State of California's rules and regulations. There 
is a cultural resource review; there is an historic 
preservation officer, and a tribal preservation officer that 
are involved in reviewing these projects. And it depends on----
    Mr. LaMalfa. For even something as simple as the 
disbursement of funds?
    Secretary Vilsack. Yes. Yes.
    Mr. LaMalfa. It is California.
    Secretary Vilsack. The producer has to basically submit 
their receipts and then is essentially reimbursed for 75 
percent of the work. So we will do what we can. We understand 
how important this is, that is why we allocated additional 
resources in 2014. That is why we just recently announced 
additional resources in 2015. We understand it is a problem.
    Mr. LaMalfa. Thank you. All right, can we work with you on 
finding ways where you run into road blocks to be able to move 
those hurdles out?
    Secretary Vilsack. Sure.
    Mr. LaMalfa. It will be waivers for things that don't have 
an effect on----
    Secretary Vilsack. Sure.
    Mr. LaMalfa. This should not have any kind of cultural 
effect or other things. There shouldn't be a reason to have 
this hold it up. I am not pointing at you, sir, just the other 
end of the process. If you could help us find that, and get to 
the specifics, maybe we can work to get a waiver process or 
something that really doesn't have any negative effect and 
doesn't need all that review. Is that reasonable?
    Secretary Vilsack. Yes. Yes, it is.
    Mr. LaMalfa. Okay. Thank you. And then just one follow-up 
on one of my colleague's previous questions talked about the 
waters of the United States rule from EPA. Let's go to the 
other side of that. If the USDA were to identify a wetland that 
the Corps or EPA or others had not necessarily identified, what 
would that mean for farmers and ranchers if USDA classified it? 
Would that make those wetlands, if it was identified as CWA, a 
Clean Water Act wetland, too do you think?
    Secretary Vilsack. Congressman, I apologize. I just don't 
have the information and knowledge to be able to answer your 
question accurately or adequately. But I have, obviously, been 
asked this question by you and variations of it by other 
Members of the Committee. I am certainly happy to go back and 
ask our team to brief me on this and get me up to speed on 
precisely how best to answer that.
    Mr. LaMalfa. I appreciate it. Because waters of the United 
States is a bit of a moving target, I understand, too. Maybe if 
we can anticipate this, some of these things won't happen. Go 
ahead, sir.
    Secretary Vilsack. I agree with you. It is a moving target, 
and it may very well take the political process and a judge at 
some point in time to figure it out. But I apologize that I am 
not able to answer your question.
    Mr. LaMalfa. It is okay. All right. So, thank you, sir.
    And Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back.
    Mike Bost, 5 minutes.
    Mr. Bost. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary. And my questions are pretty short. First off, let me 
apologize for not being present at the start. It was between 
you and the Secretary of the VA, who got first. I am sorry, but 
I am here now.
    The question that I have, and it is because my district 
right now, sometimes you hear around this nation where people 
lack water. Well, we would like to send some to them. And I am 
just kind of wondering, because I know our governor from the 
State of Illinois is applying for a declaration, disaster 
declaration.
    How are you prepared, and how does that process work for 
our farms that have just been devastated through the flooding 
that we are experiencing right through the Corn Belt?
    Secretary Vilsack. Well, if the governor is asking for 
secretarial designation----
    Mr. Bost. Exactly.
    Secretary Vilsack.--it comes through our process, and we 
try to respond to it as quickly as we can, because we know that 
that then gives us the capacity to make emergency loans more 
readily available, those kinds of things. I would be happy to 
take a look at. I don't know if we received it yet, but if we 
do, it has been my instruction to our team to try to turn these 
things around as quickly as possible.
    We did streamline the process for drought declarations 
making it more automatic, but I will be happy to take a look at 
it.
    Mr. Bost. Okay. My staff has been working with them. So it 
is our hope that we can move fairly quickly, because of the 
situation.
    Also, the other question I have is: I know that you are 
talking about implementing the new information technology and 
that type of programs out there. Would any of that reduce and/
or shut down any of our service centers, does it centralize it? 
Do we still have our service centers in the field, or is there 
any----
    Secretary Vilsack. Well, it should reduce the amount of 
busy work and paperwork and is already actually doing that in 
terms of reducing the amount of staff time. In the past what 
would happen is if you came into an FSA office and you needed 
information, literally paper records would have to be pulled. 
That obviously takes time.
    Now that is no longer the situation. You can call it up on 
the screen pretty quickly. Over a longer period of time, as we 
continue this, you will eventually, if you have access to 
broadband and so forth, you will eventually be able to access a 
lot of this information. Your conservation stuff is already 
accessible at home. So clearly, that is going to reduce the 
amount of time that has been spent in the past on those kinds 
of issues.
    Now, what we have attempted to do is to try to plan for 
that by creating a process in which FSA offices will become 
more than what they had been in the past without minimizing 
what they do, which is important in terms of their relationship 
with farmers. We would like to see them also be a provider of 
information about other USDA programs that might assist the 
farmer that may not be an NRCS program or may not be a farm 
loan program, but they could be a marketing program.
    So we are in the process of creating pilots around the 
country to see whether or not FSA offices would be amenable to 
this, whether they could learn enough about our rural 
development programs to be able to say to a farmer coming in, 
``Hey, have you ever thought about this value-added 
opportunity, have you ever thought about this cooperative 
opportunity as a way of creating additional responsibilities, 
additional information that will allow them to maintain their 
legitimacy and their relevance.''
    There are issues relative to the structure that we have 
today. In my view, there are 31 offices today in FSA that have 
no full-time employee in them, but I cannot close those offices 
because Congress has directed me not to close any office. So 
when you basically say to me, operate it like a business, I 
say, fine. Then tell me that I can't close 31 offices that have 
no full-time people in them, you have to ask the question, is 
that really operating it like a business?
    Mr. Bost. Thank you. I yield back.
    The Chairman. The gentleman yields back.
    Mr. Thompson, 5 minutes.
    Mr. Thompson. Mr. Chairman, thank you so much.
    Mr. Secretary, good to see you.
    Secretary Vilsack. Good to see you.
    Mr. Thompson. I wanted to touch base, basically, on the 
issue of the AD-1026s and the new conservation compliance 
requirements that we have in the farm bill. We had the Director 
of NRCS in, the chief, and we had a conversation on that. So I 
wanted to follow up on that. I have some continued concerns. I 
know that, actually, the Department and the agency has tried 
its best to reach out to inform folks about the need to file 
that form, but I do have concerns that the fall is going to 
come, and the bill is going to come due, and there may be some 
farmers or ranchers kind of surprised because they missed it, 
whether it was livestock or perhaps specialty crops. Some folks 
that just this may be somewhat new to.
    Any idea how many of those, overall, how many did or did 
not complete the AD-1026 form in time?
    Secretary Vilsack. The statistics that I can cite to you, 
are 98.1 percent of producers that we thought potentially might 
think about this actually signed up and got their form on file.
    We estimated it is roughly 10,000 folks who potentially, 
from prior records may be impacted, but of that number, many of 
them are no longer farming. Some of them are no longer around. 
So that number is going to be significantly reduced by the time 
it is all said and done.
    Congressman, we really made an effort, every press release 
that went out about this 6 months in advance made reference to 
that June 1 date. We actually worked with the companies to make 
phone calls, to send e-mails. There was an aggressive, 
comprehensive effort, and that is why you saw as many people 
sign up. At the end of the day, there may very well be a 
handful of folks who just didn't get it done. But, on balance, 
we did the best we could with a very firm date that was set in 
law.
    Mr. Thompson. Do you have any flexibility at this point? 
And I am glad to hear, that was the number I heard, too, 
10,000. As you said, some of those may not be farming today, 
maybe choosing not to just go down that route in terms of crop 
insurance.
    I am just curious, any tools that you may have as we get 
closer to that and we see that people start to discover that 
they are just not going to be in compliance, therefore, their 
premiums are not going to get that subsidy and, therefore, may 
take it out of a range of what is affordable in terms of 
managing their risk. I don't know if we have provided you with 
any flexibility in the final hour.
    Secretary Vilsack. Yes. I have been told that we don't.
    Mr. Thompson. Okay.
    Secretary Vilsack. We are sending out letters now to that 
handful of folks who may, as you say, be surprised when they 
find out. Those letters started going out July 22nd. I guess it 
is today. They go out today. So we will, obviously, begin 
hearing soon, I suspect, from folks.
    I have been told we don't have any flexibility. I am happy 
to go back and ask that question one more time, but I don't 
think we have much of--that is why I was so insistent on a 
massive effort to make sure that everybody knew the June 1 date 
was coming up. I can't tell you how many interviews I gave 
about that, how many times I mentioned it. We did everything we 
could to try to get that information as personal as possible to 
people.
    Mr. Thompson. And you have done a good job. I think the 
Department, quite frankly, and NRCS has done a good job pushing 
that information out. So I look forward to keeping in contact 
with you just as we get closer to that date just to see how we 
did in the end.
    Secretary Vilsack. Fair enough.
    Mr. Thompson. Thank you.
    Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back.
    Mr. Abraham, for 5 minutes.
    Mr. Abraham. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. I represent 
northeast Louisiana, central Louisiana, and the problem that I 
have had come up is it goes back to how generic base acres or 
former cotton acres are divided among farmers on a farm.
    For some reason, the FSA has decided to divide up generic-
base acres differently than how the agency divides up the 
regular base acres. And I know this is a problem throughout the 
South, the Chairman of the great State of Texas has run into 
the same obstacle. In the division of the regular base acres, 
it makes perfect sense to me and my farmers, and I still farm 
actively too. It simply follows the rental agreement on the 
farm.
    But for a generic-base acres, instead of simply dividing up 
generic base in the same way in accordance with the rental 
agreement, FSA ignores the rental agreement and instead, 
divides the generic base upon the total planted acres of 
covered commodities on the farm as recorded in the FSA's 578 
form. And I have looked at that and ran into this on my farm.
    So the issue gets confusing, but the upshot is the FSA's 
new way of dividing up generic base among producers on the farm 
results in a lot of inequities where farm bill payments are 
going to be paid to actually the wrong farmers. So some farmers 
will be seriously shortchanged while other farmers will receive 
more than they should, actually windfalls in some cases in my 
district. So this is especially problematic because rental 
agreements and loans have been made based upon the way regular 
acres have been allocated.
    So, again, the best way to resolve the problem personally 
is to simply have the generic base divided like the regular 
base is divided. My question, will you work with me and my rice 
farmers especially that want to convert these old cotton base, 
generic acres into rice farms as we move forward to try to fix 
this problem? We need some help in the South on that.
    Secretary Vilsack. Congressman, I need some help myself. At 
one point in time I could answer that question, because it was 
in my head, but it is not in my head. Can I ask----
    Mr. Abraham. Sure you can. You can get back to me. I need 
to ensure or tell my farmers that this is a fixable problem. 
Because right now these base acres, these generic base acres, 
they are not being allocated very productively for my rice 
farmers especially.
    Secretary Vilsack. Congressman, I will absolutely commit to 
you that our team will get in touch with your folks and work 
with your folks.
    Mr. Abraham. Very well. That is all I ask.
    Secretary Vilsack. I don't want to mislead you in terms of 
whether or not it is a solvable problem. It may or may not be. 
Right now I am having a hard time calling it up.
    Mr. Abraham. As long as we can have conversation, then I am 
good.
    Secretary Vilsack. Always.
    Mr. Abraham. All right. One other question, then I will 
yield back. On the Inspector General's recommendation, it 
included having a third-party non-government entity review of 
the MIDAS program to determine whether it is the most effective 
IT fix or not. Where is the status of that recommendation from 
the Attorney General--I mean the Inspector General as far as 
you guys are concerned? Are you all taking that to heart? Are 
you utilizing it? What stage is it in?
    Secretary Vilsack. We are attempting to follow all of the 
recommendations that the OIG has provided on many of the 
subjects that we have talked about today, including MIDAS.
    Mr. Abraham. Do you actually think a third party needs to 
come in, in light of the GAO and the MIDAS program problems?
    Secretary Vilsack. Honestly, I am not sure that that would 
necessarily be helpful. It is certainly at the time that this 
was reviewed and the time that these problems occurred, 
essentially, that is what we did by bringing in somebody from 
the outside. I brought in Jonathan, who is now our CIO. I 
brought him in from the outside and said, take a look at this. 
He came back and basically said, here are the problems that you 
have. You have a disconnect between some of your career folks 
in Kansas City and some of your folks in D.C.
    You have an old system that some people are trying to 
cobble together, and you have actually, you know this has been 
a fairly aggressive effort. We need to break this down into 
incremental parts, and we need to do this in a more thoughtful 
way in terms of bringing this stuff online. And as a result of 
bringing him in from the outside looking at this, he became the 
project manager. He began meeting with me on a weekly basis, 
and we are in a much better place today.
    So in that sense we did bring somebody in from the outside. 
Now, I don't know if it was an outside entity, but it certainly 
is somebody who knew what he was talking about. And I think he 
has----
    Mr. Abraham. As long as progress is made. Okay. Thank you.
    I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back. Before we adjourn, 
I ask the Ranking Member for any closing remarks he has?
    Mr. Peterson. Thank you, Mr. Chairman. And I want to just 
thank the Secretary, again, for his forthright answers today 
and doing a good job, as he normally does. And also thank him 
and Dr. Clifford and others at the Department for their 
response to the avian flu crisis.
    We went through, probably, one of the toughest times that I 
have ever seen with this avian influenza situation, and people 
were pretty down in the mouth at one point. But I met with a 
number of people on Saturday, and their attitude has changed, 
and part of that is because of your efforts and Dr. Clifford's 
and others in terms of listening and responding. And that has 
helped restore confidence in the industry as well.
    And in your response today to the questions, you hit on the 
things that my producers were concerned about, and what that 
means is that you have been listening and we don't have all the 
answers, any of us, but we are going to try to boil down and 
out of 100 different ideas out there about how to improve 
things, we are going to try to boil that down to a few, bring 
it to this meeting you are having next week. I think it is next 
week.
    Secretary Vilsack. Yes, it is.
    Mr. Peterson. And again, just thank you for what you have 
done and what you are doing. We look forward to continuing to 
work with you and appreciate you.
    Secretary Vilsack. Thank you, Congressman. And the meeting 
is on Tuesday, next week, in Des Moines.
    Mr. Peterson. Okay.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The gentleman yields back.
    Mr. Secretary, I had one real quick follow-up on the 
debarment and suspension. Can you bring the civil suit, I 
guess, to someone or does it have to be Justice who do that?
    Secretary Vilsack. Everything that we do in terms of a 
legal action gets----
    The Chairman. Okay.
    Secretary Vilsack. It is Justice.
    The Chairman. Well, I appreciate your comments earlier 
about wanting to expand, perhaps, that issue about what can and 
when is it subject to debarment, because my crack legal staff 
showed me under the Code of Federal Regulations, that there are 
some steps beyond just civil and criminal things that can allow 
you to propose somebody for debarment and suspension.
    Secretary Vilsack. There are. However, as it relates to the 
situation we are talking about here, those don't necessarily 
apply. They are very specific. So there is a process where you 
could amplify on that list that would create more flexibility.
    And the idea, Mr. Chairman, is, frankly, is to create some 
kind of due process mechanism by which there is a determination 
that there was wrongdoing so you don't get in a situation where 
I make a judgment about somebody and they come in and they go, 
well that was a poor judgment or you did it because you didn't 
like the guy.
    The Chairman. You didn't like the guy--well, Mr. Secretary, 
you and I are violently in agreement with each other on what 
needs to be done with respect to that, so I appreciate that.
    Oversight is not all that pleasant from time to time. In 
many instances, these investigations take a long time to get 
done. Some the of things we are talking about are several years 
old. That doesn't lessen the impact it has on the American 
people's trust and confidence in all of us that Congress is 
doing its job, that you are doing the job you need to do to 
protect those scarce resources for all of us.
    But I hope we can have your commitment to continue to work 
with us on all of these oversight issues.
    Secretary Vilsack. [Nods heads.]
    The Chairman. Your team has been working really well. I was 
hoping that we wouldn't make you so mad this morning that you 
decided to bail out on us on that deal, because we do have some 
legitimate things that we want to understand and know. And I 
know you have certain equities, we have certain equities. But 
having your team work with us, I appreciate that. We don't want 
to devolve into something like a mud fight, that it is 
unnecessary. And I really appreciate what you guys have done to 
date.
    One other thing, there was another thing you talked about 
where in these grants are made to NGOs or other organizations 
making sure that you have the proper internal controls in 
place, that they then spend the money the way they are supposed 
to, and that they don't overpay themselves. There are a variety 
of ways to control the $177 billion that you guys oversee every 
year in expenditures. I mean, out of your testimony, that is a 
pretty sizable number, number of transactions are pretty 
daunting. We are only talking about a few of those, but those 
few as I mentioned earlier taint the water.
    So I appreciate you being here this morning. And we are 
getting you out of here right on time. Under the rules of the 
Committee, the record of today's hearing will remain open for 
10 calendar days to receive additional materials, supplemental 
written responses from the witness to any questions posed by a 
Member.
    This hearing on the Committee on Agriculture is adjourned. 
Thank you, Tom.
    [Whereupon, at 12:14 p.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
                          Submitted Questions
Response from Hon. Thomas ``Tom'' J. Vilsack, Secretary, U.S. 
        Department of Agriculture
Questions Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question 1. Sec. Vilsack, you stated in a hearing before this 
Committee on Feb. 11 of this year on the State of the Rural Economy 
that ``The public-private partnerships found in the guaranteed lending 
programs administered by RD and FSA are robust and growing''. How do 
you reconcile this statement with the fact that for FY15 and again for 
FY16 you have proposed through the President's Budget request a 
complete zeroing out of the Community Facilities Guaranteed Loan 
Program which would result with the private-sector being completely 
excluded from participation in the Community Facilities Loan program? 
Would this not put the government in direct competition with the 
private sector for these loans?
    Answer. Although the Community Facilities (CF) Guaranteed loan 
program has been a successful program over the years, it does require 
budget authority for it to be funded. For FY16, this program has a 
subsidy rate of 2.36%, which means that it would take $2.36 million of 
taxpayer funds to support a program level of $100 million. On the other 
hand, the CF Direct loan program has a negative subsidy rate and does 
not require any taxpayer funds to support the President's proposed 
funding level of $2.2 billion. Although the CF Direct loan program 
serves those communities whose rural and economic conditions do not 
afford them access to private lending, this program has been able to 
leverage its funds with those from private investments. In FY15, CF 
Direct loan funds were leveraged with over $142 million of non-
guaranteed private investments. Hence, we consider the CF Direct loan 
program to complement, rather than compete, with the private-sector.

    Question 2. Sec. Vilsack, in testimony your provided this Committee 
on Feb. 11 of this year in a hearing on the State of the Rural Economy, 
you stated that there has been an increase in the Community Facilities 
Loan program staffing by 44% since the first quarter of FY15 and that 
all of the new hires are underwriters. However, it has also been stated 
that the previous staff reductions were some of your most senior and 
experienced personnel. It is unknown what level of experience and 
expertise comes with the 44% increased staff levels, yet with any large 
staff turnover, time is needed for new personnel to become acclimated 
to new policies and procedures. Since, as you stated, all new hires are 
underwriters would this not seem to strongly indicate a focus by your 
Department on the pipeline of new Direct loans rather than ensuring 
proper management and servicing of the direct loans already approved? 
Who will be minding the store on the loans booked over the recent years 
as they travel through the risk cycle (construction, seasoning, etc.)? 
What assurance can you provide this Committee that the annual $1.2B in 
taxpayer money used in loan authority through the CF Direct Loan 
Program is being properly managed and serviced once the loans are 
approved?
    Answer. The additional Community Facilities (CF) staffing relieves 
some of the work overload across the entire CF program, which allows 
the agency to increase its emphasis in multiple areas, including CF 
portfolio management. We continue to make the soundness of all of our 
portfolios a top priority. For the CF program, we recently developed 
and have been utilizing a credit risk assessment tool that helps staff 
identify and assess risk through a series of financial and operational 
analyses; then, develop a strategy to address risk concerns. We also 
established four CF Asset Risk Management (ARM) specialist positions 
that provide regional coordination and oversight of CF operations 
within their respective region of the country. One of the primary 
responsibilities of these positions is to oversee and monitor the CF 
portfolio for their region. These ARM specialists also work directly 
with the Rural Development State Offices in their region on all complex 
servicing issues. At the National Office level, CF program managers 
have implemented monthly servicing meetings and monthly delinquency 
reporting by RD region to ensure early servicing intervention. Also, 
the National Office has strengthened a wide variety of internal 
controls to manage the risk associated with our programs. Due to the 
sound management of the CF Direct loan portfolio, the delinquency rate 
continues to remain low. The average monthly delinquency during the 
past 3 fiscal years was only 2.10%. The average monthly delinquency 
during FY15 was only 2.07%. And, the delinquency at the end of FY15 for 
the CF Direct loan program was only 2.05%. The Committee can be assured 
that the agency will continue to properly manage and service the CF 
Direct loans after they are approved.
Question Submitted by Hon. Marcia L. Fudge, a Representative in 
        Congress from Ohio
    Question. Secretary Vilsack, a primary advantage of a flourishing 
Historically Black College and University system is the incredible 
talent pipeline these schools can provide for employers who value 
diversity and inclusion--and the skills, strengths and perspectives 
that brings--in their workforce. For example, The Boeing company has 
developed a rich partnership with 25 Historically Black Colleges and 
Universities and Minority Institutions in 14 states and the District of 
Columbia. This has resulted in:

   Boeing has hired 500 full time employees from these 
        institutions between 2012 and 2014.

   6,352 Boeing employees are alumni (as of May 2015).

   120 Boeing Executives are alumni (as of May 2015).

    Further, these institutions themselves have been directly supported 
by The Boeing Company and its' employees with $11.75 million in 
charitable investments, research and development spending, and 
continuing education for the period of 2012-2014.
    Can you please identify plans the Department of Agriculture might 
have to highlight, promote, or encourage partnerships such as these 
with the public, students, Congress, or other employers?
    Answer. USDA has a number of initiatives and programs to promote 
diversity and inclusion and deepen our partnerships, including with the 
1890s institutions and the private sector. Our Cultural Transformation 
Initiative is now in its sixth year, with a strong emphasis on 
recruitment and retention, as well as diversity and inclusion, across 
the Department. For the 125th anniversary of the 1890s, USDA was 
pleased to support the newly created Centers of Excellence, including 
one on workforce development. APHIS and FAS provided an initial 
investment in that Center, and RD, FSA, NRCS and FS provided 
investments in other Centers. We have an ongoing presence at all 1890 
campuses through our Office of Advocacy and Outreach liaisons who, 
among other things, promote our USDA 1890s National Scholar program 
that provides financial assistance for students who then intern and 
work at USDA.
    The Office of Advocacy and Outreach (OAO) coordinates the delivery 
of USDA services to underserved groups. This includes USDA's Higher 
Education Institutions Program. This program partners the USDA with 
1890's Land-Grant Colleges and Universities, the 1994 Tribal Land-Grant 
Colleges and Universities, Hispanic Serving Institutions (HSI's), 
Historically Black Colleges and Universities (HBCU`s), and 
Predominantly Black Institutions (PBI's). The mission of these 
partnerships is to increase minority participation in programs and 
services available across the government agencies, as well as in 
private industry. The USDA/1890 National Scholars Program is a major 
effort between the USDA and the nineteen 1890 Historically Black Land-
Grant Universities. The program awards scholarships to students 
attending one of the 1890 Historically Black Land-Grant Universities, 
pursuing a bachelor's degree in agriculture, food, natural resource 
sciences, or related academic disciplines.
    The USDA`s partnership with the Thurgood Marshall College Fund 
(TMCF) provides internship and post-graduate fellowship opportunities 
to students from Historically Black Colleges and Universities who have 
displayed exemplary academic ability and professionalism. These 
internship opportunities serve as a channel for potential endeavors in 
government as well as in the private-sector by providing scholars with 
invaluable first-hand experience in governmental agencies. TMCF has 
partnered with major entities such as Wells Fargo, Apple Inc., and 
GlaxoSmithKline, whom have tasked them with providing a pool of 
exemplary ready talent for internal positions upon graduation. The 
USDA/TMCF partnership program assists HBCU students in garnering the 
experience necessary to compete for these positions.
    Also, USDA partners with the National Association for Equal 
Opportunity in Higher Education (NAFEO). NAFEO's Higher Education 
Internship Program recruits students across all 155 HBCU's and PBI's 
for the USDA internship opportunities. The goal of the USDA's 
partnership with NAFEO is to increase the number of students studying 
agriculture, food, natural resources, science, engineering, health, and 
other related disciplines and offer internship opportunities to NAFEO 
Scholars within the USDA by providing qualified students with paid 
internship opportunities in the USDA offices nationwide.
    NIFA and ARS have several on-going programs that enable students 
from 1890s to gain purposeful working experience and knowledge at Agri-
Businesses across the country.
    Through NIFA, twenty students from University of Maryland Eastern 
Shore have recently completed training at Dow Agro-Sciences. As a 
result, many of these students are interested in applying for extended 
internships and jobs at Dow. Delaware State University sent six 
students for similar trainings at Dow. The next to go for these 
experiential learning opportunities are students from North Carolina 
A&T and Tuskegee. NIFA is actively pursuing additional Agribusinesses 
to engage 1890s students.
    Also this year, as a part of its Agriculture and Food Research 
Initiative competitive program, NIFA is offering an ``experiential 
learning'' component within its Education and Literacy Initiative that 
will enable students including from 1890s to find internship 
opportunities at various U.S. Agribusinesses and even study abroad. 
This program is designed for students to gain hands-on experience and 
working knowledge of Agribusinesses so that upon graduation these 
students will more likely be able to find jobs in these agribusinesses. 
NIFA expects to fund 300 such internships this year. More information 
on these programs can be found at http://nifa.usda.gov/program/afri-
education-and-literacy-initiative.
    ARS also provides support to Historically Black Colleges and 
Universities (HBCUs) including 1890 Land-Grant Institutions, in the 
areas of Research and Development; Facilities and Equipment; Student 
Tuition Assistance, Scholarships, and Other Aid; and Third Party 
Awards. This includes, but not limited to, Alcorn State University, 
Alabama A&M University, Delaware State University, Tennessee State 
University, Florida A&M University, and the University of Maryland, 
Eastern Shore. This support is in excess of $2.77 million. In addition, 
ARS supports a number of Pathways Interns, including USDA/1890 National 
Scholars, many of whom go on to complete degrees in agriculture and 
related sciences and pursue careers with USDA upon graduation. 
Currently, the Agency is sponsoring ten scholars and providing support 
over several years to each. ARS has provided assistance for six 
additional scholars over the last 5 years. More information pertaining 
to ARS' Diversity Outreach Program can be found at http://
www.ars.usda.gov/AboutUs/docs.htm?docid=23072. Here you will find USDA 
Internship Programs, Recent Graduate Programs, and USDA Pathways 
Program.
    These programs support our partners:

   USDA/1890 Capacity Building Grants.

   USDA/1890 Centers of Excellence.

   USDA Liaison Programs.

   White House Initiatives.

   Historically Black Colleges and Universities (HBCU).

   Hispanic Serving Institutions (HSI).

   Hispanic Association of Colleges and Universities (HACU).

   Tribal Colleges and Universities (TCU).

    I would also like to mention USDA's Agricultural Outlook Forum 
Student Diversity Program. In an effort to increase the present and 
future diversity participation in the Forum, the Student Diversity 
Program, created in 2007 when ten students were selected to attend the 
annual meeting held in the Washington, D.C. area, provides sponsorship 
opportunities for junior-senior baccalaureate and graduate students. 
The program has grown and now targets 30 students (20 undergraduate and 
ten graduate) studying agriculture related disciplines come from Land-
Grant Colleges and Universities including the 1890s institutions, 
Hispanic-Serving Institutions, and American Association of State 
Colleges of Agriculture and Renewable Resources institutions. USDA's 
Office of the Chief Economist provides leadership for The Student 
Diversity Program, and with program partner the University of Maryland 
Eastern Shore, an 1890s institution, and support from sponsors, 
including CHS, Inc., Farm Credit, and USDA's Economic Research Service, 
Agricultural Research Service, and Natural Resources Conservation 
Service, 145 students have participated. More than a dozen participants 
have gone on to become USDA employees.
    Last, USDA has recently been engaged with the agricultural business 
sector on the need to develop effective strategies to recruit diverse 
candidates for the increasing number of career opportunities that exist 
within the industry. Over the next five years, 35,400 new U.S. 
graduates with expertise in food, agriculture, renewable natural 
resources, or the environment will fill only 61% of forecasted openings 
(USDA funded report here). As demand will outpace supply, USDA is 
encouraging private sector employers to explore non-traditional 
sources--such as community colleges, land-grant institutions, Hispanic 
Serving Institutions, Tribal Colleges, and HBCUs--to fill talent needs. 
While the private sector understands that innovation and market success 
rest on a workforce that is diverse, in its broadest sense, they have 
not yet had the opportunity to partner across the industry to establish 
a strong framework for how to grow the pipeline of talented, diverse 
individuals.
    USDA understands that overall success in achieving diversity cannot 
only come from individual company efforts. As such, the Department has 
encouraged Archer Daniels Midland (ADM)--a leader in diversity 
recruitment efforts--to organize an industry-wide roundtable on 
diversity in agriculture. ADM has planned the event for later this 
fall, and has invited Secretary Vilsack, Deputy Secretary Harden, and 
USDA senior leaders to speak to industry leaders about the importance 
of this open dialogue and to share best practices. This discussion will 
bring together representatives from the food, agribusiness and 
workforce-recruitment industries with experts from the academic, not-
for-profit and public sectors. USDA will use the forum to encourage 
business leaders to work with educational institutions, among other 
groups, and with each other to develop creative initiatives to expand 
diversity within the entire agricultural sector.
Questions Submitted by Hon. Alma S. Adams, a Representative in Congress 
        from North Carolina
    Question 1. Thank you, Mr. Chairman, and thank you Secretary 
Vilsack for being here. It was nice to see you last week when we both 
spoke at the 1890 Convocation in the Library of Congress.
    In the 12th District of North Carolina, the No. 1 Agriculture issue 
is food insecurity. Mr. Secretary, we have discussed in previous 
Education hearings about the summer meals program.
    Twenty-two percent of children in the 12th district who qualify for 
free and reduced lunch do not qualify for the summer meals program 
because their community is not considered poor enough to offer a summer 
meals site.
    Mr. Secretary, what authority would USDA need to waive some of the 
current requirements for the Summer Food Service Program that keep 
eligible children who live in currently ineligible communities from 
accessing the program?
    Answer. I appreciate the opportunity to clarify this issue. There 
are no communities in the country that are ``ineligible'' to operate a 
Summer Food Service Program (SFSP) site. Open SFSP sites, where any 
child under 18 years old can receive a free meal, must be located in 
areas where at least 50 percent of the children residing in the area 
are eligible for free and reduced price school meals. Communities under 
the 50 percent threshold can operate closed enrolled sites or camps, 
where children need to enroll and can receive free meals if more than 
\1/2\ of them are from low-income families. FNS has been doing 
extensive outreach to States, including extra technical assistance for 
13 targeted States this summer, to help them increase access to summer 
meal sites. I would be happy to work with you to make sure communities 
in your district that may not be eligible for an open site are aware of 
the other options to help them serve more children. Summer Electronic 
Benefit Transfer (EBT) is a very promising model to increase access to 
food during the summer and could be targeted to low-income children 
living in areas that are ineligible for open summer sites. The 
President's fiscal year 2016 Budget requests about $67 million to 
expand Summer EBT. Providing flexibility in SFSP's congregate feeding 
requirement and expanding eligibility criteria for open sites are two 
other strategies to potentially reach more children, which would 
require authorization from Congress.

    Question 2. The Healthy Food Financing Initiative (HFFI) is very 
important to many communities in the 12th District that have food 
deserts.
    The President, the First Lady and you have constantly made the 
Healthy Food Financing Initiative a USDA priority.
    Can you share when are you going to start the program? The Senate 
Agricultural Appropriations bill included funds of $1 million to 
support USDA's portion of the Healthy Food Financing Initiative. What 
is the minimum amount that USDA would need to have appropriated to the 
program to begin supporting food access projects?
    Answer.

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