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95–687 PDF 2015

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 

( 

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

K. MICHAEL CONAWAY, Texas, Chairman 

RANDY NEUGEBAUER, Texas, 

Vice Chairman 

BOB GOODLATTE, Virginia 

FRANK D. LUCAS, Oklahoma 

STEVE KING, Iowa 

MIKE ROGERS, Alabama 

GLENN THOMPSON, Pennsylvania 

BOB GIBBS, Ohio 

AUSTIN SCOTT, Georgia 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

SCOTT DESJARLAIS, Tennessee 

CHRISTOPHER P. GIBSON, New York 

VICKY HARTZLER, Missouri 

DAN BENISHEK, Michigan 

JEFF DENHAM, California 

DOUG LAMALFA, California 

RODNEY DAVIS, Illinois 

TED S. YOHO, Florida 

JACKIE WALORSKI, Indiana 

RICK W. ALLEN, Georgia 

MIKE BOST, Illinois 

DAVID ROUZER, North Carolina 

RALPH LEE ABRAHAM, Louisiana 

JOHN R. MOOLENAAR, Michigan 

DAN NEWHOUSE, Washington 

TRENT KELLY, Mississippi 

COLLIN C. PETERSON, Minnesota, Ranking 

Minority Member 

DAVID SCOTT, Georgia 

JIM COSTA, California 

TIMOTHY J. WALZ, Minnesota 

MARCIA L. FUDGE, Ohio 

JAMES P. MCGOVERN, Massachusetts 

SUZAN K. DELBENE, Washington 

FILEMON VELA, Texas 

MICHELLE LUJAN GRISHAM, New Mexico 

ANN M. KUSTER, New Hampshire 

RICHARD M. NOLAN, Minnesota 

CHERI BUSTOS, Illinois 

SEAN PATRICK MALONEY, New York 

ANN KIRKPATRICK, Arizona 

PETE AGUILAR, California 

STACEY E. PLASKETT, Virgin Islands 

ALMA S. ADAMS, North Carolina 

GWEN GRAHAM, Florida 

BRAD ASHFORD, Nebraska 

SCOTT C. GRAVES, Staff Director 

ROBERT L. LAREW, Minority Staff Director 

(II) 

(III) 

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 

(1) 

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. 

2 

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 

3 

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 

4 

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 71⁄2 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. 

5 

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 AdVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 P:\DOCS\114-23\95687.TXT BRIAN
6 

ministration 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 

7 

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 fieldbased 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. 

8 

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 GovernVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00012 Fmt 6633 Sfmt 6601 P:\DOCS\114-23\95687.TXT BRIAN
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ment 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 

10 

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. 

11 

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. 

12 

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 

13 

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 

14 

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 

15 

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. 

16 

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 landgrant 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. 

17 

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 

18 

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? 

19 

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 

20 

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 rampup 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. 

21 

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 boardfeet 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. 

22 

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. 

23 

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 WalMart in Georgia that have now developed a successful co-op. That 

24 

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. 

25 

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 

26 

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 

27 

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. 

28 

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 

29 

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 growVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 P:\DOCS\114-23\95687.TXT BRIAN
30 

ing 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 someVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 P:\DOCS\114-23\95687.TXT BRIAN
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times 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? 

32 

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 

33 

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 

34 

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 procVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00038 Fmt 6633 Sfmt 6601 P:\DOCS\114-23\95687.TXT BRIAN
35 

ess 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 auVerDate Mar 15 2010 11:57 Dec 29, 2015 Jkt 041481 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 P:\DOCS\114-23\95687.TXT BRIAN
36 

thority 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 

37 

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 

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38 

ing 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 

39 

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 

40 

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 

41 

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 

42 

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 

43 

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? 

44 

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 

45 

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? 

46 

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. 

47 

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 

48 

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:] 

49 

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. 

50 

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. 

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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, 

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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. 

Æ