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HEARINGS TO REVIEW USDA ORGANIZATION 

AND PROGRAM ADMINISTRATION 

HEARINGS 

BEFORE THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 15, 16, 2015 

Serial No. 114–26 

( 

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 

Tuesday, September 15, 2015 

Conaway, Hon. K. Michael, a Representative in Congress from Texas, opening 

statement .............................................................................................................. 1 

Prepared statement .......................................................................................... 2 

Peterson, Hon. Collin C., a Representative in Congress from Minnesota, opening statement ........................................................................................................ 3 

WITNESSES

Taylor, Alexis, Deputy Under Secretary, Farm and Foreign Agricultural Services; accompanied by Val Dolcini, J.D., Administrator, Farm Service Agency; Philip C. Karsting, Administrator, Foreign Agricultural Service; and 

Brandon Willis, Administrator, Risk Management Agency, U.S. Department 

of Agriculture, Washington, D.C. ........................................................................ 4 

Prepared statement .......................................................................................... 6 

Submitted questions: 

Taylor, Alexis ............................................................................................. 87 

Karsting, Philip C. .................................................................................... 87 

Willis, Brandon .......................................................................................... 90 

Bonnie, Hon. Robert, Under Secretary, Natural Resources and Environment, 

U.S. Department of Agriculture, Washington, D.C.; accompanied by Jason 

Weller, Chief, Natural Resources Conservation Service, USDA; and Mary 

Wagner, Associate Chief, U.S. Forest Service, USDA ....................................... 37 

Prepared statement .......................................................................................... 39 

Woteki, Ph.D., Hon. Catherine, Under Secretary, Research, Education, and 

Economics, U.S. Department of Agriculture, Washington, D.C.; accompanied 

by Chavonda Jacobs-Young, Ph.D., Administrator, Agricultural Research 

Service, USDA; Sonny Ramaswamy, Ph.D., Director, National Institute of 

Food and Agriculture, USDA; Mary Bohman, Ph.D., Administrator, Economic Research Service, USDA; and Renee Picanso, Associate Administrator, National Agricultural Statistics Service, USDA .................................... 65 

Prepared statement .......................................................................................... 67 

Submitted questions: 

Ramaswamy, Ph.D., Sonny ....................................................................... 91 

Picanso, Renee ........................................................................................... 91 

Wednesday, September 16, 2015 

Conaway, Hon. K. Michael, a Representative in Congress from Texas, opening 

statement .............................................................................................................. 93 

Peterson, Hon. Collin C., a Representative in Congress from Minnesota, opening statement ........................................................................................................ 106 

WITNESSES

Mensah, Hon. Lisa, Under Secretary, Rural Development, U.S. Department 

of Agriculture, Washington, D.C.; accompanied by Brandon McBride, Administrator, Rural Utilities Service, USDA; Tony Hernandez, Administrator, Rural Housing Service, USDA; and Samuel H. Rikkers, Acting Administrator, Rural Business—Cooperative Service, USDA .............................. 94 

Prepared statement .......................................................................................... 96 

Submitted question .......................................................................................... 195 

Page

IV 

* Editor’s note: the Administrators listed as accompanying Mr. Avalos are also accompanying 

Mr. Almanza. To avoid duplication they are not printed here. 

Avalos, Hon. Edward M., Under Secretary, Marketing and Regulatory Programs, U.S. Department of Agriculture, Washington, D.C.*; accompanied 

by Anne L. Alonzo, J.D., Administrator, Agricultural Marketing Service, 

USDA; Kevin Shea, Administrator, Animal and Plant Health Inspection 

Service, USDA; and Larry Mitchell, Administrator, Grain Inspection Packers and Stockyards Administration, USDA ....................................................... 133 

Prepared statement .......................................................................................... 136 

Submitted questions: 

Avalos, Hon. Edward M. ........................................................................... 195 

Alonzo, J.D., Anne L. ................................................................................ 195 

Shea, Kevin ................................................................................................ 196 

Almanza, Alfred V., Deputy Under Secretary, Food Safety, U.S. Department 

of Agriculture, Washington, D.C. ........................................................................ 142 

Prepared statement .......................................................................................... 144 

Submitted question .......................................................................................... 197 

Concannon, Hon. Kevin, Under Secretary, Food, Nutrition, and Consumer 

Services, U.S. Department of Agriculture, Washington, D.C.; accompanied 

by Audrey Rowe, Administrator, Food and Nutrition Service, USDA; and 

Angela Tagtow, M.S., R.D., L.D., Executive Director, Center for Nutrition 

Policy and Promotion, USDA .............................................................................. 168 

Prepared statement .......................................................................................... 170 

(1) 

HEARING TO REVIEW USDA ORGANIZATION 

AND PROGRAM ADMINISTRATION 

(PART 1) 

TUESDAY, SEPTEMBER 15, 2015 

HOUSE OF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Washington, D.C. 

The Committee met, pursuant to call, at 1:30 p.m., in Room 

1300, Longworth House Office Building, Hon. K. Michael Conaway 

[Chairman of the Committee] presiding. 

Members present: Representatives Conaway, Thompson, Gibbs, 

Austin Scott of Georgia, Crawford, Gibson, Benishek, Yoho, Allen, 

Rouzer, Abraham, Moolenaar, Peterson, McGovern, Plaskett, 

Adams, and Ashford. 

Staff present: Ashley Callen, Bart Fischer, Caleb Crosswhite, 

Callie McAdams, Chris Heggem, Haley Graves, Jackie Barber, Jessica Carter, John Goldberg, Josh Maxwell, Mary Nowak, Mollie 

Wilken, Paul Balzano, Patricia Straughn, Scott C. Graves, Skylar 

Sowder, Faisal Siddiqui, John Konya, Andy Baker, Anne Simmons, 

Evan Jurkovich, Keith Jones, Liz Friedlander, Mary Knigge, Mike 

Stranz, Nicole Scott, and Carly Reedholm. 

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A 

REPRESENTATIVE IN CONGRESS FROM TEXAS 

The CHAIRMAN. Part 1 of the hearing of the Committee on Agriculture, to review USDA organization and program administration, 

will come to order. 

I have asked Randy Neugebauer to open us with a quick prayer. 

Ready? 

Mr. NEUGEBAUER. Father, we just come to You to praise You and 

thank You for the privilege You have given us to live in this great 

country. Father, help us to be good stewards of this country. You 

have blessed it in the past, and we pray that You continue to bless 

it in the future. 

I will just pray now that You would be with us as we have these 

discussions about how to make a better life for all of our country 

and, in many cases, things that impact the world. We ask this and 

all these things in the precious name of Your Son, Jesus. Amen. 

The CHAIRMAN. Thank you, Randy. 

The Committee will come to order. I appreciate our first panel 

of witnesses being here this morning. Since the Committee organized in January 21 of this year, we have had 24 meetings. We are 

keeping the commitment to hold a top-to-bottom review of a full 

2 

range of issues and policies within our jurisdiction. We have held 

three executive briefings on trade, conducted 33 hearings, and 

stemming from what we have learned in those hearings, we have 

had eight business meetings with the purpose of advancing legislation. 

I am very pleased with the Committee and the full House that 

we have successfully discharged all the legislation that required action, including addressing every program in our jurisdiction with 

an expired authorization. 

I am very proud of the work that each Member of the Committee 

has done to make this happen. I am particularly pleased that we 

work together in such a strong bipartisan manner. Today and tomorrow, we will have before us most of the Under Secretaries of 

the Department of Agriculture. Each of these witnesses are responsible for an important mission within USDA. And accompanying 

our witnesses are Administrators, who actually do the hard work— 

the deputies get all the credit—of managing these agencies and 

programs within the larger mission areas. 

These folks make up a network of nearly 100,000 USDA employees who carry out the laws that this Committee works to enact. We 

welcome each of you here today. I know that preparing for these 

hearings was time-consuming for our witnesses who already have 

plenty on their plate, so we are pleased that you would commit 

time and effort to bring your knowledge to us to help us, and your 

efforts and attendance will not go unnoticed. We appreciate the 

work you do. 

The primary purpose behind these hearings is to connect the 

Members of the Committee with the full bench at USDA. As our 

witnesses are aware, each Member of this Committee serves on a 

number of Subcommittees that cover issues of special interest to 

that Member. These interests, of course, line up with the mission 

areas and agencies administered by our witnesses. 

In short, this is a good opportunity for constructive dialogue between the Members of the Committee and the Department. It is an 

opportunity for our Members to gain an even stronger understanding of the policies and issues they focus on by getting under 

the hood, so to speak, to see how this smooth running machine operates. 

It is also an opportunity for our witnesses to gain a better understanding of our responsibilities and the issues and policies that we 

care about. In a sense, it is about team building. Whatever our political stripes may be, we have shared responsibilities. 

And insofar as possible, we ought to carry out these possibilities 

cooperatively and amicably. I think this goal is achieved more effectively when the members of each team know each other and respect each other. So while our work is always ongoing, I hope these 

2 days together will allow us to learn how we might work better 

together more closely and more cooperatively for the good of the 

order. 

[The prepared statement of Mr. Conaway follows:] 

PREPARED STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE IN

CONGRESS FROM TEXAS

This hearing will come to order. 

3 

Since this Committee formally organized on January 21 of this year, the Committee has met 44 times. 

In keeping with my commitment to hold a top-to-bottom review of a full range 

of issues and policies within our jurisdiction, we have held three executive briefings 

on trade and conducted 33 hearings. And, stemming from what we have learned in 

these hearings, we have held eight business meetings with the purpose of advancing 

legislation. I am very pleased that this Committee and the full House has faithfully 

discharged all of the legislation that required action, including addressing every program in our jurisdiction with an expired authorization. 

I am very proud of the work that each Member of this Committee has done to 

make this happen. I am particularly pleased that we have worked together in such 

a strong, bipartisan manner. 

Today and tomorrow, we have before us most of the Under Secretaries of the Department of Agriculture. Each of these witnesses is responsible for an important 

mission area within USDA. Accompanying our witnesses are Administrators who 

manage agencies and programs within these larger mission areas. 

These folks make up the network of nearly 100,000 USDA employees who carry 

out the laws that this Committee works to enact. 

We welcome each of you here today. I know that preparing for these hearings can 

be time consuming for witnesses who already have plenty on their plate. So, please 

know that your commitment of time and knowledge does not go unnoticed or 

unappreciated. We do appreciate you and the work that you do. 

The primary purpose behind these hearings is to connect the Members of this 

Committee with the full bench at USDA. 

As our witnesses are aware, each Member of this Committee serves on a number 

of Subcommittees that cover issues of special interest to that Member. These interests, of course, line up with the mission areas and agencies administered by our witnesses. 

In short, this is a good opportunity for constructive dialogue between Members 

of this Committee and the Department. It is an opportunity for our Members to gain 

an even stronger understanding of the policies and issues they focus on by getting 

under the hood to see how all, or at least more, of the parts work. It is also an opportunity for our witnesses to gain a better understanding of our responsibilities 

and the issues and policies we care about. 

In a sense, it is also about team-building. Whatever our political stripes may be, 

we have shared responsibilities. And, insofar as it is possible, we ought to carry out 

these responsibilities cooperatively and amicably. I think this goal is achieved more 

effectively when the members of a team come to know and respect one another. 

So, while our work is always ongoing, I hope that these 2 days together allow each 

of us to learn how we might work together more closely and more cooperatively for 

the good of the order. 

With that, I recognize my friend, the Ranking Member, for any remarks he may 

wish to offer. 

The CHAIRMAN. I recognize my good friend, the Ranking Member, 

for any remarks he might have. 

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A 

REPRESENTATIVE IN CONGRESS FROM MINNESOTA 

Mr. PETERSON. Thank you, Mr. Chairman. 

And I thank the witnesses for being here. 

USDA’s work covers a lot of ground, and given the size and scope 

of the Department, it is good that we understand the full picture 

of the work being done in the various mission areas. 

I look forward to hearing from our witnesses over the next 2 

days. The 2014 Farm Bill created some new programs for the Department to implement and administer, and I will be interested in 

the status update on this process. I am also hoping our witnesses 

can provide some guidance on the impact the budget sequester will 

have on farm program payments and what is being done to address 

other challenges in agriculture such as the threat of the recurrence 

of avian flu and the devastation caused by this summer’s wildfires. 

4 

So we have a lot of testimony, so let’s get to it, and thank you, 

again, Mr. Chairman. 

I yield back. 

The CHAIRMAN. Thanks, Collin. 

The chair would request that other Members submit their opening statements for the record so our witnesses may begin their testimony and to ensure there is ample time for questions. 

The chair would like to remind Members that they will be recognized for questioning in order of seniority for the Members who 

were here at the start of today’s hearing. After that, Members will 

be recognized in the order of arrival, and I appreciate Members’ 

understanding. 

The witnesses are reminded to limit their oral presentations to 

5 minutes. All written statements will be included in the record. 

And over the course of today’s hearing, following the testimony of 

the Under Secretaries, the other Administrators will be here to answer questions. 

And, with that, I would like to welcome our first panel. We have 

Ms. Alexis Taylor, Deputy Under Secretary for Farm and Foreign 

Agricultural Services, USDA. Ms. Taylor is accompanied by Val 

Dolcini, Administrator of the Farm Service Agency; Phil Karsting, 

the Administrator of the Foreign Agricultural Service; and Mr. 

Brandon Willis, Administrator, Risk Management Agency. 

So, gentlemen, ladies, thank you for being here. 

Ms. Taylor, you may begin at your pleasure. 

STATEMENT OF ALEXIS TAYLOR, DEPUTY UNDER SECRETARY, 

FARM AND FOREIGN AGRICULTURAL SERVICES, U.S. 

DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 

ACCOMPANIED BY VAL DOLCINI, J.D., ADMINISTRATOR, 

FARM SERVICE AGENCY, USDA; PHILIP C. KARSTING, 

ADMINISTRATOR, FOREIGN AGRICULTURAL SERVICE, USDA; 

AND BRANDON WILLIS, ADMINISTRATOR, RISK 

MANAGEMENT AGENCY, USDA 

Ms. TAYLOR. Chairman Conaway, Ranking Member Peterson, 

and Members of the Committee, I am pleased to be here today to 

provide information on the programs and accomplishments of the 

Farm and Foreign Agricultural Services at the U.S. Department of 

Agriculture. 

First, let me extend Under Secretary Scuse’s apologies for not 

being able to join you here today and our appreciation for allowing 

me to testify in his place. Having started my career over a decade 

ago working for a Subcommittee Chairman on this very Committee, 

all I can say is it feels good to come home. 

FFAS helps keep American farmers and ranchers in business as 

they face uncertainties from weather and markets. We deliver commodity, credit, conservation, disaster, emergency, and export assistance programs that improve the stability and strength of the rural 

economy. 

Accompanying me today, as the Chairman said, is Administrator 

Val Dolcini of the Farm Service Agency; Administrator Brandon 

Willis of the Risk Management Agency; and Administrator Phil 

Karsting of the Foreign Agricultural Service. 

5 

Mr. Chairman, over the past 2 years, much of our work has been 

focused on implementing the 2014 Farm Bill, work we are truly 

proud of at the Department. The farm bill introduced two new farm 

safety net programs for program crop producers through FSA: The 

Agricultural Risk Coverage Program, or ARC; the Price Loss Coverage Program, or PLC. As a result of our aggressive producer outreach efforts, over 1.7 million producers elected to participate in 

these new programs. 

FSA implemented the new Margin Protection Program for dairy 

last fall, and over 23,000 producers, over 1⁄2 of all the U.S. dairy 

operations, enrolled for calendar year 2015 coverage. FSA provides 

a broad range of additional services for American agriculture from 

disaster assistance to marketing assistance loans to conservation 

programs. FSA also invests in opportunities in rural communities, 

providing a variety of loan programs to farm families who are temporarily unable to obtain the credit they need. 

RMA has also been very successful in implementing the farm 

bill’s crop insurance provisions. RMA released the actual production history yield exclusion option for 11 crops for the 2015 crop 

year, and expansion has already been announced for the 2016 crop 

year. 

APH yield exclusion as well as the Supplemental Coverage Option are now available for all major crops and many fruits and 

nuts. In addition, the Stacked Income Protection Plan for producers 

of upland cotton, or STAX, is available for over 99 percent of cotton 

acreage. The beginning farmers and ranchers incentives at FS—or 

excuse me, at RMA authorized in the farm bill have already been 

utilized by over 13,500 beginning farmers and ranchers, saving 

them over $13.5 million in premiums and administrator fees. In addition, the farm bill instructed RMA to develop a Whole Farm Revenue Protection plan, which was available for the 2015 insurance 

year, and it will be available for all counties in the U.S. for the 

2016 insurance year. 

This is a first for the crop insurance program. The efforts of the 

FAS, combined with our market promotion programs and in collaboration with the agricultural community, have contributed to 

the strongest 6 years in history for U.S. agricultural exports. For 

many American products, foreign markets represent more than 1⁄2

of total sales. These U.S. agricultural products support about one 

million jobs here at home. 

Over numerous farm bills, Congress has refined our agricultural 

market development programs, the largest of which is the Market 

Access Program, which benefits a diverse range of U.S. commodities. Also, the Market Development Program, like MAP, involves 

work with our agricultural cooperator partners. These programs 

are found to be highly effective. An independent study found that 

they provide $35 in economic benefits for every $1 spent by the 

government or industry. 

FAS leads USDA’s efforts to help developing countries increase 

food security, improve their agricultural systems, and build their 

trade capacity. For example, the McGovern-Dole Program provides 

support to child nutrition projects. We are quite proud that since 

the program was established in 2002, it has benefited more than 

30 million children in 38 countries. 

6 

FAS trade negotiators are advocating on behalf of U.S. agriculture and the Trans-Pacific Partnership, or TPP, and the Transatlantic Trade and Investment Partnership, or T–TIP. FAS experts 

are a key part of our negotiating team. 

TPP and T–TIP are opportunities not only to address market access commitments but also non-tariff barriers that impede our agricultural exports. Once these agreements are in place, the United 

States will enjoy improved market access and increased competitiveness to 2⁄3 of the global economy. I am proud to have the opportunity to work with such outstanding individuals in the FFAS mission area every day, individuals who I have seen work tirelessly 

over the past 2 years for the betterment of farmers and ranchers 

in rural communities. 

Thank you for the opportunity to be here today, and we look forward to any questions you may have. 

[The prepared statement of Ms. Taylor follows:] 

PREPARED STATEMENT OF ALEXIS TAYLOR, DEPUTY UNDER SECRETARY, FARM AND

FOREIGN AGRICULTURAL SERVICES, U.S. DEPARTMENT OF AGRICULTURE, 

WASHINGTON, D.C. 

Mr. Chairman and Members of the Committee, I appreciate this opportunity to 

provide information on the programs and accomplishments of the Farm and Foreign 

Agricultural Services (FFAS) mission area of the U.S. Department of Agriculture. 

The FFAS mission area is composed of the Farm Service Agency, the Risk Management Agency, and the Foreign Agricultural Service. Much of our work in the past 

2 years has focused on implementing the Agricultural Act of 2014 (the 2014 Farm 

Bill) in record time, providing safety net assistance to producers in every state within just a few months of bill passage. 

The Farm Service Agency (FSA) 

FSA programs encompass five of the twelve Titles of the 2014 Farm Bill, including Title I—Commodities, Title II—Conservation, Title V—Credit, Title VIII—Energy, and Title XII—Miscellaneous. The 2014 Farm Bill made significant changes 

to FSA’s commodity safety net programs, as well as many other key agency programs. 

Commodity Programs 

The 2008 Farm Bill’s Direct and Counter-Cyclical Program (DCP) and the Average Crop Revenue Election (ACRE) program were repealed and replaced by two new 

programs: Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). FSA 

has completed the ARC/PLC ‘‘election’’ process, 1.7 million producers made an election—exceeding the number of producers who participated in DCP/ACRE. The ‘‘election’’ period was open to producers from November 17, 2014, through April 7, 2015, 

when they had the opportunity to make a one-time election of ARC or PLC for their 

2014–2018 crops. During this period, base acres could be re-allocated (although not 

increased) and program payment yields could be updated. We are currently in the 

‘‘enrollment’’ phase, which ends on September 30, 2015, where producers are signing 

contracts associated with their 2014 and 2015 crops. 

The first ARC/PLC payments—for the 2014 crop year—will be made in October 

2015, shortly after marketing year average price data starts becoming available, and 

will continue through the fall as price data for additional commodities is published. 

Given the significant drop in commodity prices since passage of the farm bill, our 

current projection is that about $6.5 billion in 2014 crop payments will be made, 

largely to corn producers who signed up for ARC. 

Implementing the 2014 Farm Bill in record time required an ‘‘all hands on deck’’ 

approach to reach producers, and close collaboration between our university and extension partners and, of course, the hard work of our dedicated FSA staff. We 

worked closely with our university partners at Texas A&M, the Food and Agricultural Policy Research Institute, the University of Illinois, and others, who developed 

on-line web-based decision tools so that farmers could input their own farm data 

and explore various scenarios associated with adopting ARC or PLC, as well as the 

intersection of these programs with our crop insurance offerings. 

7 

Further, FSA worked with extension specialists in virtually every state on an extensive ARC/PLC education and outreach effort. Over 400,000 attendees participated in approximately 5,000 local ARC/PLC events that provided producers with 

valuable information on how to best manage risk on their farms. The ARC/PLC web 

tools were demonstrated at over 2,500 of these events and the tool developers hosted 

help desk ‘‘hotlines’’ for producers who needed additional help. In addition to collaboration with our university and extension partners, we worked closely with our 

media partners who produced over 1,000 news stories on ARC/PLC. 

Under the 2014 Farm Bill, upland cotton is no longer a covered commodity and 

is not eligible to participate in ARC or PLC, but rather, is eligible for the new 

Stacked Income Protection Plan (STAX) offered by the Risk Management Agency. 

For counties where STAX was unavailable, upland cotton was eligible for the Cotton 

Transition Assistance Payments program (CTAP) for 2014 and 2015 crops. FSA paid 

about $540 million to over 184,000 farms for 2014 CTAP payments; 2015 CTAP payments dropped off dramatically because STAX was available for over 98 percent of 

cotton acres. 

FSA has implemented the new Margin Protection Program for Dairy (MPP-Dairy) 

and over 23,000 producers—over 1⁄2 of all U.S. dairy operations—enrolled for calendar year 2015 coverage. We are now focused on 2016 calendar year enrollment, 

which closes on September 30, 2015, and FSA has an intensive mailing effort underway, just like last year, to encourage as much participation as possible. The new 

MPP-Dairy offers dairy producers catastrophic coverage to participating producers 

when the national dairy production margin is less than $4 per hundredweight (cwt), 

at no cost to the producer after an annual $100 administrative fee. Producers may 

also purchase higher coverage, for a premium, that provides payments when margins are between $4 and $8 per cwt. So far in 2015, producers who enrolled at the 

$8 coverage level received modest payments during three payment periods. 

Disaster Assistance Programs 

Immediately after the 2014 Farm Bill passage, FSA focused on implementing the 

livestock and tree disaster assistance programs—including the Livestock Forage 

Disaster Program (LFP); the Livestock Indemnity Program (LIP); the Emergency 

Assistance for Livestock, Honey Bees, and Farm-Raised Fish (ELAP); and the Tree 

Assistance Program (TAP). These programs, which had been expired for nearly 3 

years, were resumed within 60 days following enactment of the 2014 Farm Bill. This 

assistance benefited a diverse array of producers who were hit hard by natural disasters, ranging from winter storms, to wildfire, to drought. So far, FSA has issued 

approximately 700,000 payments to producers since the spring of 2014, totaling over 

$5.6 billion. The LFP accounted for the bulk of these payments. Through its Livestock Forage Program, USDA projects it will provide at least $2 billion in assistance 

to livestock producers in Fiscal Year 2015. 

The Noninsured Crop Disaster Assistance Program (NAP) was expanded in the 

2014 Farm Bill to include protection at higher coverage levels, similar to provisions 

offered under the Federal crop insurance program. NAP continues to offer coverage 

at the catastrophic level based on 50 percent of expected production at 55 percent 

of the average market price for the crop. However, producers can now obtain additional coverage levels ranging from 50 to 65 percent of expected production, in five 

percent increments, at 100 percent of the average market price for the 2014–18 

crops years. Beginning, limited resource, and other traditionally under-served farmers are now eligible for a waiver of the NAP service fee and a 50 percent reduction 

in premium for additional levels of coverage. The majority of 2015 NAP-eligible 

spring-seeded crops had an application closing date of March 15, 2015; additional 

crop application closing dates occur through the upcoming fall months as well. 

In addition to the ARC/PLC web tools noted earlier, the University of Illinois and 

their partners developed decision tools for both MPP-Dairy and NAP. These tools 

help producers make decisions about the optimal level of coverage for their operations, and have been widely accessed by producers. Further, approximately 14,000 

producers have participated in MPP-Dairy educational meetings and about 17,000 

producers have participated in NAP educational meetings. 

Conservation Reserve Program 

The Conservation Reserve Program (CRP), one of USDA’s largest conservation 

programs, allows USDA to contract with landowners so that environmentally sensitive land is not farmed or ranched, but instead used for conservation benefits. For 

30 years, CRP has helped participants establish long-term, resource-conserving 

cover. In return, FSA provides participants with annual rental payments, incentive 

payments, and cost-share assistance. Contract duration is between 10 and 15 years. 

CRP improves water quality, reduces soil erosion, and restores habitat for ducks, 

8 

pheasants, turkey, quail, deer and other wildlife. In doing so, CRP spurs hunting, 

fishing, recreation, tourism, and other economic development across rural America. 

Currently, 24.2 million acres are enrolled in CRP contracts, including 18.1 million 

acres under general sign-up enrollment authority and 6.1 million acres under continuous sign-up enrollment authority. CRP general sign-up is a competitive process 

conducted on a periodic basis, while CRP continuous sign-up occurs on an on-going 

basis throughout the year and does not involve a discrete sign-up period and is noncompetitive. CRP contracts on 1.8 million acres (combined general and continuous) 

are set to expire on September 30, 2015; program payments total approximately 

$1.8 billion annually. 

Earlier this year, the Secretary announced that the next CRP general signup offer 

period will begin on December 1, 2015, and that continuous sign-up for the new 

grassland component will begin on September 1, 2015. We will enroll sufficient CRP 

acreage to meet as closely as possible, but not exceed, the 24 million acre enrollment 

cap set in the 2014 Farm Bill, which is to be reached by Fiscal Year 2017. General 

sign-up program participants with contracts expiring September 30, 2015, and less 

than 15 years in duration, have the option of a 1 year extension. Those with continuous sign-up contracts are eligible to re-enroll in CRP. 

We are proud of the impact that CRP has had on the rural landscape. Since its 

inception, we estimate that CRP has prevented more than 8 billion tons of soil from 

eroding and reduced nitrogen and phosphorous runoff by 95 percent and 85 percent, 

respectively, on enrolled lands. In addition, CRP has sequestered an estimated average of 50 million tons of greenhouse gases annually since 2008, which is equal to 

taking eight million cars off the road each year. 

Farm Loan Programs 

Most farm loan programs are permanently authorized through the Consolidated 

Farm and Rural Development Act. However, the 2014 Farm Bill made several program changes, such as providing more favorable interest rates for joint financing arrangements, providing a larger percent guarantee on guaranteed conservation loans, 

increasing the loan limits for the down payment loan program, making youth loans 

available in urban areas, and eliminating term limits for guaranteed operating 

loans. All of these changes were implemented in the spring of 2014. 

Since then, FSA has implemented additional loan program changes authorized in 

the 2014 Farm Bill, such as increasing the maximum amount for direct farm ownership loans from $225,000 to $300,000, and eliminating the rural residency requirement for youth loans. FSA raised the borrowing limit of its popular microloan program from $35,000 to $50,000; updated the ‘‘farming experience’’ loan eligibility requirement to include military leadership positions, advanced agricultural education, 

or other non-farm management experience; and FSA is in the process of implementing a relending program to help Native American producers purchase 

fractionated interests of land. 

Farm loan programs through FSA constitute the Department’s largest investment 

in beginning farmers. Since 2009, FSA has provided over $13 billion in direct and 

guaranteed loans to beginning farmers. Beginning farmer loans now comprise over 

55 percent of the Agency’s direct loan portfolio, and the portfolio continues to grow. 

At the same time, loans to beginning farmers continue to perform well, with delinquencies below the portfolio average. 

FSA’s work on microloans—of which 70 percent has gone to beginning farmers— 

was initiated prior to farm bill passage and has been a resounding success, due in 

part to the streamlined paperwork required of applicants. Microloan financing focuses on the farm operating needs of a wide variety of operations, most notably 

small, beginning, niche, and non-traditional farm operations, such as farms participating in direct marketing and farmers’ markets. The microloan debt limit is 

$50,000 per borrower. Demand is up 58 percent over last year, and soon we will 

make our 15,000th microloan, just 21⁄2 years after program initiation. Fifty-five percent of microloans go to first-time FSA customers. 

FSA also provides low-interest financing through our Farm Storage Facility Loan 

program, which helps producers build or upgrade storage and handling facilities, 

and it was announced in mid-August that we will now include dairy, flowers and 

meats as eligible commodities. Since 2000, more than 35,000 loans have been approved totaling $2 billion in rural investments. On average, about 1,600 new loans 

are made each year. 

Energy Programs 

Supporting the biobased economy is also a focus of FSA. U.S. farmers are producing record amounts of feedstocks for renewable fuels, although lower commodity 

prices have created uncertain times. FSA announced this June the availability of 

9 

up to $100 million in grants under the Biofuels Infrastructure Partnership to support the renewable fuel infrastructure and build the market for ethanol. USDA announced finalists for awards on September 10, 2015; additional details will be announced later in the month. Interest in this program was very high and funding 

requests well exceeded the $100 million limit, with only a 1 month application period. 

In addition, FSA announced that enrollment began for farmers and forest owners 

seeking assistance for growing biomass for energy or biobased products within designated projects areas under the Biomass Crop Assistance Program (BCAP), which 

was reauthorized by the 2014 Farm Bill. Biomass energy facilities or groups of producers may submit proposals for new BCAP project areas through November 6, 

2015. In addition, FSA will allocate $7.7 million to four existing BCAP project areas 

in New York, North Carolina, Ohio/Pennsylvania and Kansas/Oklahoma for biomass 

establishment and maintenance payments through Sept. 25, 2015. Overall, BCAP 

has provided incentives for producers across more than 48,000 acres in 71 counties 

and 11 different project areas since the program was first authorized by the 2008 

Farm Bill. 

The Risk Management Agency (RMA) 

RMA provides crop insurance to America’s farmers and ranchers through a partnership with private insurance companies. In the year and a half since the passage 

of the 2014 Farm Bill, RMA has implemented almost all of Title XI (crop insurance 

provisions). From implementing the Actual Production History (APH) Yield Exclusion to offering a Whole Farm Revenue Protection insurance product that will be 

available in every county in the United States, I am proud of the accomplishments 

RMA has achieved over the past 18 months. While there is still work to be completed, farmers and ranchers have begun to take advantage of the new crop insurance options. 

The Supplemental Coverage Option and STAX 

The Supplemental Coverage Option (SCO) and Stacked Income Protection Plan for 

Upland Cotton (STAX) were made available for the 2015 crop year. SCO was available for corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring 

wheat, and winter wheat in selected counties for the 2015 crop year—representing 

over 80 percent of the program acres covered in the Federal Crop Insurance Program. RMA has continued expansion of SCO for the 2016 crop year with expansion 

to many fruit and nuts. RMA continues to research additional crops for suitability 

under SCO and will make additional announcements as the data becomes available. 

STAX is currently available in every county that had an existing crop insurance 

policy for cotton, representing over 99 percent of cotton acres in the United States. 

STAX is expected to be available for the remaining ‘‘traditional’’ cotton producing 

areas for the 2016 crop year. 

Additional New 2014 and 2015 Offerings 

RMA was able to develop and release the APH Yield Exclusion option for 11 crops 

for the 2015 crop year. As a result, nearly 3⁄4 of all program acres and liability in 

the Federal Crop Insurance Program was covered under this new option for the 

2015 crop year. RMA has already announced expansion of APH Yield Exclusion for 

the 2016 crop year for many crops, including winter wheat. RMA continues to research additional crops for suitability under APH Yield Exclusion and will make additional announcements as the data becomes available. 

A Peanut Revenue Policy was also made available for the 2015 crop year. This 

policy was approved by the Federal Crop Insurance Corporation Board of Directors 

less than a year after the 2014 Farm Bill became law. As a result, peanut farmers 

now have the ability to manage risk for both yield and revenue losses. 

The beginning farmers and ranchers incentives authorized in the 2014 Farm Bill 

were made available to farmers and ranchers for fall planted wheat in 2014. To 

date, over 13,500 new and beginning farmers and ranchers have taken advantage 

of these incentives on almost 49,000 policies. Beginning farmers and ranchers have 

saved over $14 million in premiums and administrative fees because of this provision. 

The 2014 Farm Bill required RMA to offer a plan of insurance to cover diversified 

farms. Prior to the passage of the 2014 Farm Bill, RMA had already begun development of the Whole Farm Revenue Protection (WFRP) pilot policy and the Federal 

Crop Insurance Corporation Board of Directors approved the policy shortly after the 

2014 Farm Bill was enacted. As a result, WFRP was available for purchase for the 

2015 crop year. This option has been generally well received when presented to specialty crop and organic growers around the country. After reviewing comments from 

growers, RMA intends to make additional improvements to WFRP for the 2016 crop 

10 

year. In addition, WFRP will be available in every county in the United States— 

a first for any policy under the Federal crop insurance program. 

RMA is also making progress in offering organic price elections for all crops, as 

required by the 2014 Farm Bill. Since 2010, RMA has eliminated the organic surcharge, added price elections for over 42 crops, and created the contract price addendum, which is available for 62 crops. 

The 2014 Farm Bill linked the ability of a producer to receive a Federal crop insurance premium subsidy to USDA highly erodible land (HEL) and wetland conservation (WC) compliance. In an effort to ensure that producers continue to receive 

the Federal crop insurance premium subsidy, RMA worked with the Natural Resource Conservation Service (NRCS) and FSA to develop comprehensive guidelines 

for farmers to comply with USDA conservation requirements. The three agencies 

collaborated to provide information to the respective field offices and developed material for all three agencies to inform Federal crop insurance customers of the new 

requirements. Successful outreach efforts continued well into this summer, and 98 

percent of producers participating in the Federal crop insurance program have certified or requested determinations to comply with HEL and WC requirements. 

Each one of the aforementioned 2014 Farm Bill items was completed by 

RMA within the past 18 months. 

The Foreign Agricultural Service (FAS) 

The Foreign Agricultural Service (FAS) is USDA’s lead international agency, linking U.S. agriculture to the world to enhance export opportunities and global food 

security. 

The efforts of FAS employees, both in Washington and around the globe, combined with 2014 Farm Bill authorized market promotion programs, and collaboration with the U.S. agricultural community, have contributed to the strongest 6 years 

in history for U.S. agricultural trade. From Fiscal Years 2009 to 2014, U.S. agricultural exports totaled $771.7 billion. For many American products, foreign markets 

now represent more than 1⁄2 of total sales. U.S. agricultural exports support about 

one million jobs here at home, a substantial part of the 11.7 million jobs supported 

by all exports across our country. Credit for record exports belongs to America’s 

hardworking farm and ranch families. 

FAS supports those producers through a network of agricultural economists, marketing experts, negotiators, and trade specialists in Washington, D.C. and 95 international offices covering 167 countries. We are proud that our role in opening and 

maintaining markets has resulted in billions of dollars of additional U.S. agricultural exports. FAS also contributes to the Department’s goal of enhancing global 

food security. The food assistance programs, technical assistance, and capacity 

building activities administered by FAS have provided assistance that has helped 

millions of people worldwide. 

Trade policy, trade promotion, and capacity building are the core functions at the 

heart of the programs and services that FAS provides to U.S. agriculture. 

Trade Policy 

FAS expands and maintains access to foreign markets for U.S. agricultural products by removing trade barriers and enforcing U.S. rights under existing trade 

agreements. Our personnel have been instrumental in resolving numerous sanitary, 

phytosanitary, and technical barriers to trade. FAS works with foreign governments, 

international organizations, and the Office of the U.S. Trade Representative (USTR) 

to establish international standards and rules to improve accountability and predictability for agricultural trade. 

FAS trade negotiators are currently advocating on behalf of U.S. agriculture in 

two major negotiations: the Trans-Pacific Partnership (TPP) and the Transatlantic 

Trade and Investment Partnership (T–TIP). FAS experts are an integral part of the 

negotiating team and USDA’s economic analysis supports the negotiating strategy 

on agriculture. The TPP and T–TIP are opportunities to address not only market 

access commitments, but also non-tariff Sanitary and Phytosanitary (SPS) and 

Technical Barriers to Trade (TBT) issues that impede our agricultural exports. Once 

these agreements are in place, the United States will enjoy improved access to markets representing 2⁄3 of the global economy. 

Trade Promotion 

Over numerous farm bills, Congress has authorized and refined an effective combination of agricultural market development and export credit guarantee programs. 

These programs that are designed to develop markets, facilitate financing of overseas sales, and resolve market access barriers dovetail with the FAS mission. We 

must open, expand, and maintain access to foreign markets, where 95 percent of the 

11 

world’s consumers live. FAS partners with 75 cooperator groups representing a 

cross-section of the U.S. food and agricultural industry and manages a toolkit of 

market development programs to help U.S. exporters develop and maintain markets 

for hundreds of products. 

The largest market development program operated by FAS is the Market Access 

Program (MAP). MAP is a cost-share program that uses funds from USDA’s Commodity Credit Corporation (CCC) to aid in the creation, expansion, and maintenance 

of foreign markets for hundreds of U.S. agricultural products. Through MAP, FAS 

partners with nonprofit U.S. agricultural trade organizations, U.S. agricultural cooperatives, nonprofit State Regional Trade Groups, and small-sized U.S. commercial 

entities to share the costs of overseas marketing and promotional activities, such as 

consumer promotions, market research, and trade show participation. A range of 

U.S. commodities from Texas beef and cotton, to Minnesota pork and soybeans, to 

California grapes and tree nuts, and apples and pears from the Pacific Northwest, 

all benefit from MAP. The 2014 Farm Bill makes available $200 million of CCC 

funds annually for MAP; that amount is matched with industry contributions. 

The Foreign Market Development Program (FMD) is another market development 

program reauthorized by Congress in the 2014 Farm Bill. FMD is a cost-share program that aids in the creation, expansion, and maintenance of long-term export 

markets for U.S. agricultural products. The 2014 Farm Bill makes available $34.5 

million of CCC funds annually for FMD. The program fosters a market development 

partnership between USDA and U.S. agricultural producers and processors who are 

represented by nonprofit commodity or trade associations known as Cooperators. 

Under this partnership, USDA and each Cooperator pool their technical and financial resources to conduct overseas market development activities. FMD-funded 

projects generally address long-term opportunities to reduce foreign import constraints or expand export growth opportunities. For example, FMD supported 

projects might include efforts to reduce infrastructural or historical market impediments, improve processing capabilities, modify codes and standards, or identify new 

markets or new uses for the agricultural commodity or product. FAS has allocated 

funds to 22 trade organizations that represent U.S. agricultural producers in FY 

2015. The organizations on average contribute nearly triple the amount they receive 

in Federal resources. 

Working with our agricultural cooperator partners, the programs have been 

shown to be highly effective. An independent study released in 2010 found that the 

programs provide $35 in economic benefits for every dollar spent by government and 

industry on market development. 

Building Capacity and Food Security 

FAS leads USDA’s efforts to help developing countries increase food security, improve their agricultural systems, and build their trade capacity. FAS’s non-emergency food aid programs help meet recipients’ nutritional needs and also support agricultural development and education. 

The McGovern-Dole International Food for Education and Child Nutrition Program (McGovern-Dole) provides agricultural commodities and technical assistance 

for school feeding and maternal and child nutrition projects in low-income, food-deficit countries committed to universal education. In August, USDA announced funding for seven school feeding projects to be supported by the McGovern-Dole in Fiscal 

Year 2015 that will benefit more than 2.5 million children in Africa and Central 

America. For FY 2015, FAS is donating U.S.-produced corn, corn-soy blend, lentils, 

green and yellow split peas, fortified rice, vegetable oil and pinto beans. The seven 

new McGovern-Dole projects are in addition to 28 projects ongoing in 21 countries. 

For FY 2016, USDA is requesting McGovern-Dole funding be maintained at $191.6 

million. Since the program was established in 2002, it has benefited more than 30 

million children in 38 countries. 

Sustainability is an important aspect of McGovern-Dole. FAS and its partner organizations work to ensure that the communities served by the program can ultimately continue the sponsored activities on their own or with support from other 

sources such as the host government or local community. For example, the Government of Bangladesh has increasingly taken over responsibility for McGovern-Dole 

school feeding projects, pledging from 2015 onward to spend $49 million annually. 

By 2017, the Government of Bangladesh will manage school feeding in 50 percent 

of the schools currently receiving food under McGovern-Dole. 

Since Congress established the Food for Progress (FFPr) program in 1985, it has 

been a cornerstone of USDA’s efforts to support sustainable agricultural production 

in developing nations that are committed to free enterprise in the agriculture sector. 

Under FFPr, proceeds from the sale of donated U.S. agricultural commodities are 

used to fund projects that improve agricultural market systems and trade capacity. 

12 

The 2016 Budget request includes an estimated program level of $135 million for 

this CCC-funded program. This year, FAS will donate more than 200,000 metric 

tons of U.S.-produced corn, rice, soybean meal and vegetable oil. The proceeds will 

assist six organizations that will work with local farmers, cooperatives, exporters 

and others on projects to improve agricultural production, food processing, food safety and quality, and marketing and distribution. The six new FFPr projects being 

supported by FAS in Fiscal Year 2015 are in addition to 66 projects ongoing in 26 

countries. 

For example, at the request of the Government of Jordan, USDA announced in 

May a FFPr agreement to provide 100,000 MT of U.S. wheat, valued at approximately $25 million. The Jordanian Government will use proceeds from the sale of 

the wheat to improve the country’s agricultural productivity, specifically through 

water conservation (over 20 percent of Jordanians are water insecure). As one of our 

most steadfast partners in the Middle East, the Government of Jordan will be able 

to access the expertise of USDA to improve its agricultural productivity and therefore relieve some of the economic burden that it is facing as a result of nearly 

630,000 refugees from Syria living in Jordan. 

USDA looks forward to implementing the new Local and Regional Purchase (LRP) 

program provided in the 2014 Farm Bill, based on the success of the LRP Pilot implemented under the previous farm bill. The Department’s FY 2016 budget request 

includes $20 million to support the LRP program. LRP would provide for local and 

regional procurement of food aid commodities to complement existing food aid programs—especially McGovern-Dole—and unexpected emergencies. In a non-emergency situation, an LRP pilot implementing partner, Land O’ Lakes, worked with 

local processors in Bangladesh who made cereal bars from chickpeas, peanuts, rice, 

and sesame seeds to supplement a school feeding program. Today, local processors 

have commercialized the cereal bar and are reportedly now sourcing from 15,000 

farmers in Bangladesh, instead of importing ingredients. Requested funding is expected to support three to four development programs. 

I am very pleased with the outstanding 2014 Farm Bill implementation work performed by all FFAS mission area employees. This concludes my testimony. I will be 

happy to answer any questions you may have. 

The CHAIRMAN. Ms. Taylor, thank you for your opening remarks. 

And gentlemen, thank you for being here. 

Let me start with Mr. Willis. 

Brandon, can you talk to us a little bit about the—our Congressional intent, when we set up the enterprise unit system that had 

irrigated versus non-irrigated, our intent was to allow farmers to 

mix and match on this. I think the RMA has taken a little stricter 

definition. 

Is there an opportunity to have RMA reevaluate this idea about 

forcing all irrigated into one unit, all non-irrigated into another, 

and not allowing producers to come up closer to what we, at least 

in our minds, thought we were setting up for them to do? 

Mr. WILLIS. Certainly. I appreciate the question, Mr. Chairman. 

The farm bill provided a significant amount of new options for 

farmers in the crop insurance title, new programs, and overwhelmingly, farmers have reacted positively to those. The section you are 

talking about, separation of enterprise unit by practice, we have 

not issued a final rule yet. We issued the interim rule a little over 

a year ago. 

Where we struggle with that is we don’t see where the authority 

is to provide anything more than the separation of coverage by irrigated or non-irrigated, and we have looked at the report language 

as well. 

So I guess the short way of saying it is we struggle to see where 

the authority comes from to go beyond where we are right now. 

Having said that, the final rule has not been issued yet either. 

13 

The CHAIRMAN. Well, thanks, Brandon. I hoped we would be able 

to continue discussions because we have a little different interpretation of that as well. 

Ms. Taylor, you mention the current negotiations going on with 

T–TIP and TPP. We are also a little concerned with the Nairobi 

Round of Doha as an example where we think agriculture is a big 

piece of that, and from Randy and my perspective, the cotton guys 

have given at the office, so to speak, when you look at what happens to them, in particular with the 2014 Farm Bill. You mention 

STAX and others. 

Can you talk to us a little bit about what you think the instructions will be from y’alls perspective to the trade negotiators with 

respect to the Nairobi talks? 

Ms. TAYLOR. Certainly, Mr. Chairman. 

Thank you for that question. USDA has been in active conversations with our office in Geneva. FAS has employees at the mission 

there, and we have been very active and in conversations with Ambassador Punke, who heads the mission in Geneva, and Ambassador Vetter, who heads the Ag Office here. U.S. agriculture has 

really benefited from the WTO system having a rules-based international trading system. It has opened markets, and it has really 

helped contribute to last year being a record year of agricultural 

exports of $150 billion. We have a strong interest in concluding 

Doha, the Doha Development Round in Nairobi; however, we are 

not interested in unilaterally making concessions, particularly on 

the side of domestic support where a growing problem internationally is really some of the increased support from emerging economies. 

We continue to have conversations through—and we will in the 

weeks and months to come, and we will certainly keep the Committee apprised. I think it is a little too early to know exactly how 

this will all come about in December. 

However, I do think it is important to highlight that the WTO 

hasn’t been our only option, and that is why we have aggressively 

pursued agreements like the Trans-Pacific Partnership that really 

give our agricultural producers a lot of new market opportunities 

around the world. 

The CHAIRMAN. All right. Well, thank you, and obviously, that is 

at the front of a lot of our producers’ minds as they watch those 

talks unfold. 

Val, could you talk to us a little bit about the interpretation on 

the AGI with respect to pass-through entities and the impact that 

not allowing a section 179 deduction to reduce the income there in 

terms of a separate application of the payment limit rule? Can you 

visit with us about the impact of that, and we are seeing it, a disproportionate impact of what we intended to have. Can you walk 

us through that a little bit? 

Mr. DOLCINI. I appreciate the opportunity to answer that question, Mr. Chairman. We are taking it on a case-by-case basis. We 

have seen it come up in the Midwest in some cases. Most recently, 

I was made aware of a case in Iowa. We are making sure that our 

experts here in Washington are in good communication with the 

state office specialist. We haven’t seen it in huge numbers, frankly, 

but we are ready for it. 

14 

The AGI definition hasn’t changed since 2002, but what we are 

seeing, in the field, is with good farm income over the last several 

years in some cases and a couple of years of payments, folks are 

taking advantage of their appreciation allowance a little bit more 

frequently than they had in the past. And so we are working with 

CPAs, with tax attorneys, and with other financial professionals 

that are working with our producers to make sure that they understand exactly what it is that we are doing, and to the degree we 

can offer greater clarification around that, we are happy to do that. 

The CHAIRMAN. Well, in specific, Val, the pass-through entity, 

typically the section 179 deduction does not reduce its individual 

income because those attributes pass through separately. So if you 

don’t have, let’s say, for example, $500,000 worth of immediate 

write-off under section 179, that is going to have a pretty dramatic 

impact at the income level of the entity itself. And so having you 

say that you are willing to look at the intended result was that the 

income would be actual income, AGI is, after all those deductions 

are out, if you are an individual. So the things that you have is 

that you are talking to two CPAs up here, but we just want to 

make sure that those pass-through entities get a fair treatment 

with respect to all the deductions; they don’t somehow have an artificial restriction on the payment limits because their income appears to be bloated at that entity level. 

Mr. DOLCINI. We are certainly keeping an open door, Mr. Chairman, in our state offices and here in Washington. 

The CHAIRMAN. All right. Thank you. 

I yield to the gentleman from Minnesota. 

Mr. PETERSON. Thank you, Mr. Chairman. 

Mr. Dolcini, which FSA and RMA mandatory funded programs 

will be impacted by sequestration, and how soon will we know 

what level of cuts producers will be facing, or maybe Mr. Willis. 

Mr. DOLCINI. Sure. I will take the first crack at that. All of the 

programs that we administer, with exception of CRP and Market 

Loan Gain Programs and the LDPs, will be affected by sequestration. We don’t feel, obviously, that sequestration is a very good policy, and it doesn’t offer much certainty to the producers that we 

work with all over the country. And we are working on a solution 

that we think will be an equitable one, and hopefully, we will be 

able to resolve that in the next few days, Mr. Peterson, but that 

is the universe of programs that will be covered, all but those three 

that I mentioned. 

Mr. WILLIS. The crop insurance program that producers deal 

with every day is not impacted by sequestration. Other minor programs would be, but what producers are used to as far as crop insurance would not be. 

Mr. PETERSON. Mr. Willis, how do you decide whether to use 

RMA data as opposed to NASS data in the implementation of title 

I programs? As you may know, we recently had a situation in my 

district where there was a concern about the NASS county data 

being used for the ARC–PLC program. 

Mr. DOLCINI. Sir, I will take that question as it relates to ARC 

and PLC. We use a cascading level of yield, so we start with NASS 

county data. If that is not available, we turn to RMA county data. 

If that is not available, we go to NASS district data. And, finally, 

15 

if that is not available, we use data that the state committee develops. 

We feel like the methodology used in the NASS county data is 

pretty solid. We have looked at it around the country, and we 

found that it is accurate, by and large, and where it is not available, we turn to the next best data, but that is the methodology 

that we use for the ARC county program. 

Mr. PETERSON. And where there are problems, there is no way 

to fix this or to—— 

Mr. DOLCINI. At this point, I don’t believe that there is, sir. We 

feel like the methodology that we are using is pretty sound, this 

is, in some ways, the nature of a county-based program, in this 

case, that there may be some disparities in payments from one 

county to another, could be weather related, could be related to 

other things. But we found that in most cases, the NASS county 

data that we are using is pretty good. 

Mr. PETERSON. I understand that USDA has just announced that 

we are going to allow milk handlers to deduct premium payments 

from their milk checks for the Margin Protection Program, and I 

am very glad to hear that. I have been advocating that from the 

start. But what coordination have you had with the cooperatives or 

other handlers to alert them to this change, and given that the 

signup deadline is in 2 weeks, do you think that that is enough 

time for them to incorporate that into their system, especially for 

the larger cooperatives? 

Mr. DOLCINI. In most cases, the 2015 premium payments have 

been made, so the change that we have envisioned here, and we 

have worked a lot with cooperatives here in town and elsewhere, 

will be effective for the 2016 program year, and the result of that 

will be that 100 percent of the premium will be due on September 

1 of next year as opposed to this year, where we had 25 percent 

due on February 1, and the balance due later in the summer. 

So we think that this is a better option. We appreciate your support for it, and we think that it will make the program work a little 

bit more effectively in terms of getting premium payments made 

through the cooperatives. 

Mr. PETERSON. These cooperatives are going to be on board then 

and be able to do this? 

Mr. DOLCINI. That is my understanding, sir. 

Mr. PETERSON. The current signup deadline is September 30, and 

I understand that at this point, only 30 percent of the producers 

that have signed up last year have signed up again. Is that true? 

Mr. DOLCINI. The numbers are still quite fluid, and of course, in 

the last couple of weeks of any signup that we do, we see greater 

participation in the final weeks. We anticipate that that will be the 

case in this instance as well. We are going the plan on doing another mass mailing. We sent out a big postcard to generate signup 

for the first go-round of MPP, and we will do that again. 

We are also continuing to do local outreach in your home state 

and other places around the country. When I traveled in New England, we talked at lot about this as well, so we are hopeful that 

we can get as much interest in the program for the 2016 year as 

we had in 2015. 

16 

Mr. PETERSON. So if we only end up with 30 percent, are you 

going to extend the deadline to try to—— 

Mr. DOLCINI. We will look at that, sir, as we get a little closer 

to the deadline. We are always mindful of the fact that producers 

are busy with other things, and there are lots of folks in the midst 

of harvest right now, and so we want to make sure that we are offering everyone the opportunity to get into the offices and sign up. 

Mr. PETERSON. Are they going to be aware of the fact that they 

can have a month-to-month—— 

Mr. DOLCINI. They certainly were—— 

Mr. PETERSON.—premium taken out of their check? 

Mr. DOLCINI. We are going to make every effort to make sure 

that everybody knows about that. 

Mr. PETERSON. Thank you. 

Thank you, Mr. Chairman 

The CHAIRMAN. I thank the gentleman. 

Mr. Dolcini, just to clarify, did you give Mr. Peterson a percentage that the sequester cuts might be for this coming year? Have 

you all figured the percentage yet? 

Mr. DOLCINI. We have not figured out the precise percentage, sir. 

For this year, it is 7.3 percent. For the fiscal year to come, it is 6.8 

percent. 

The CHAIRMAN. Okay, 6.8 percent, thank you. 

Mr. Neugebauer, 5 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. 

Mr. Dolcini, during the spring and the summer, we received a 

number of complaints from producers that were trying to get their 

financing through FSA, and in many cases, they were telling them 

that it would take months in some cases to process some of those 

applications. And that began to cause a problem for a number of 

those producers because they have planting deadlines, and so producers are worrying about planting deadlines, and they are worrying about financing. I was just wondering what do you see as to 

the current conditions? And then, more importantly, with these 

commodity prices in some of the areas so low—the farm income, 

and some commodities—it doesn’t look all that favorable, and so 

then I get to thinking about next spring. Are we going to have the 

people in place to give them more timely help for some of these producers to get their financing? 

Mr. DOLCINI. Mr. Neugebauer, that is an excellent question, and 

it is one that we spend a lot of time thinking about and working 

on at the Farm Service Agency both here and in your home State 

of Texas and, frankly, every other place where we have FLP teams 

around the nation. 

To address the issues that you raised earlier with me this year 

in Texas and other parts of the country, we sent jump teams in 

from other states that had a little more time on their hands to the 

degree that folks do have time on their hands and send them into 

Texas in 2 and 4 week details. We were able to address a lot of 

the backlog issues down there in Texas, and we were able to do 

that in Alabama as well. 

In the year to come, though, I think that we are going to have 

to continue to employ creative approaches to our workload issues 

like that. We have also brought on a number of new farm loan offiVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
17 

cer trainees around the country, and we are bringing them up to 

speed as quickly as we can so that they are able to jump in and 

help out wherever they are needed as well. 

We have had record years, as you probably know, on the farm 

loan program side at FSA over the last several years. In fact, in 

Fiscal Year 2015, we made nearly 27,000 direct loans and 8,400 

guaranteed loans for a total portfolio of about $5.2 billion. That 

breaks the record last year, and we are likely to see continued interest in our programs in Fiscal Year 2016 as well. 

It is one thing, of course, to make those loans and it is another 

to service those loans, and servicing takes longer. It takes a greater 

degree of expertise, and so one of the things that I am going to be 

focused on in Fiscal Year 2016 is ensuring that our folks in the 

field today have the appropriate training and background to service 

those loans appropriately, and to the degree that I need to reallocate resources and bring people in from different states to focus on 

servicing issues in the Midwest or the Southeast or far West, I am 

going do that as well 

Mr. NEUGEBAUER. I think it would be helpful if you anticipate 

those areas where you think you are going to have the higher participation rate and can get in there early for some of those folks 

as well. 

Something that you and I have discussed before is this payment 

limit issue where we have producers that have cotton in the loan 

program and their payment limits and not knowing necessarily exactly where they are. I think you said you all were working on that 

was the comment that you made last time. How is the work going? 

Mr. DOLCINI. The work is going pretty well. I can’t tell you today 

that I have a permanent solution, but we have worked closely with 

the Cotton Council to make sure that they have realtime information about pricing issues so that folks don’t get caught in a bind 

and their members don’t get surprised by a piece of financial news 

that comes out. 

We will hopefully have a permanent solution, sir, this fall. I 

would be happy to come back up and visit with you personally 

about what we are doing there. 

Mr. NEUGEBAUER. Now, I know that you are currently going to 

be issuing the ARC and PLC payments, but as I understand it, you 

may be holding up the final distribution of some of those checks 

until you have done some of the work on determining whether people are in compliance with the limits or how—— 

Mr. DOLCINI. With regard to that specific question, sir, I am 

going to have to get back to you with a better and more definitive 

answer on that. I don’t know that we have discussed that at this 

point, but it could be emanating from the staff level at the agency. 

Mr. NEUGEBAUER. Well, it is my understanding, just so to be 

clear, is that you all are in the process of determining whether they 

are in compliance with the loan limits—— 

Mr. DOLCINI. That is true. 

Mr. NEUGEBAUER.—before you issue the checks, and the question 

is: are you going to be able to do that in a timely basis so that 

those checks can go out on a—— 

Mr. DOLCINI. Yes, that is our intent, sir. 

18 

Mr. NEUGEBAUER. Okay. Quick question. The generic acres, in 

my district, we had some folks converting from one commodity and 

another, and in some of those commodities, there is not a lot of history on that, and there has been some concern making differentiation between dryland and irrigated, and what do you see doing to 

make sure we have good numbers? 

Mr. DOLCINI. We have had some good conversations in the last 

couple of days at the staff level. Mr. Abraham raised this question 

with me as well when I was last here, and we have come up with 

a proposed solution for the 2014 and 2015 crop years where producers on any farm may agree to allocate their generic base according to the contractual agreement that exists, which is, a better way 

to approach it. 

For future years, we would likely want those producers to reconstitute their farms according to established policy, but in the near 

term, we see the need for some relief, and we are happy to provide 

that. 

The CHAIRMAN. The gentleman’s time has expired. Thank you 

all. 

Mr. Ashford, for 5 minutes. 

Mr. ASHFORD. I am fine. 

The CHAIRMAN. Thank you. 

Mr. McGovern, for 5 minutes. 

Mr. MCGOVERN. Thank you very much. 

This is toward Administrator Karsting. I am a big fan of the 

McGovern-Dole Program, which has been in operation now for 

slightly over a decade, and I remember when it first began. It just 

seems like yesterday. But the program has come a long way, and 

one of the things that I have been really impressed with USDA 

about is its ability to kind of adapt and adjust and to constantly 

make the necessary changes to the program so that it is the most 

effective that it could possibly be. 

Now, I just would be curious if you could describe what you think 

are the most important lessons that have been learned in implementing the program, and what are you most proud of? 

Mr. KARSTING. Well, first of all, I am a big fan of the program 

too, and what makes me proud is when I go to places like Laos, 

as I did a few months ago, and I see kids whose teeth and skin 

and hair are better because they have the benefit of American nutrition support to their school nutrition programs and they go to 

school ready to learn, and that is a huge thing, especially in some 

really poor countries. As you know, we focus in areas where childhood stunting is very much a problem. 

Part of the success of McGovern-Dole is the relationship that we 

have cultivated with our cooperating organizations, the nonprofits 

that we work with. They go in consultation with our people at post. 

We have some really talented attache ́s all over the world and make 

sort of an individual regionalized assessment so they know what is 

going to work in one region because what works in one region isn’t 

necessarily going to work in another. 

The next evolution that we are trying to do, in McGovern-Dole, 

focuses on some authority that this Committee was kind enough to 

give us in the last farm bill, and that relates to local and regional 

procurement. And when we find places where the addition of a loVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
19 

cally procured item to the mix might increase kids’ ability or increase their nutrition, increase adoption of, or making permanent, 

school nutrition programs and begin to sow the seeds of a value 

chain in country, I think that is a really exciting thing to do. 

And if I could, just one more thing. We also have done some work 

on micro-nutrients, and that has had some measurable effects, not 

just in nutrition that kids get but in their cognitive abilities when 

they get to school 

Mr. MCGOVERN. Well, I appreciate that. Again, I appreciate the 

innovation as well as the willingness to make the necessary adjustments to make the program as effective as it possibly can be. 

I just wanted to say that one of the things that has been very 

helpful has been with regard to Feed the Future, which falls under 

the USAID, but they have had a very proactive approach to try to 

remind Members what Feed the Future is all about and how it is 

evolving and all the things they are accomplishing, all the things 

it has accomplished. 

I would like to suggest that it would be great to see a similar 

effort on McGovern-Dole. Members would be very proud of this program. I am not sure how many people are really aware of all that 

it does, but if they were, the support would be even greater if they 

knew about the program and how the combination of U.S. commodities and purchased commodities, technical assistance and cash 

grants combine to feed and educate millions of some of the most 

vulnerable kids in the world, including a lot of girls who otherwise 

would never go to school if it wasn’t for this program. 

It is one of the great success stories in our foreign aid programs, 

especially with regard to food assistance, and we ought to do more 

of it. I visited a McGovern-Dole Program when it initially happened 

in a displaced persons community in Colombia. And a young mother came up to me and the Ambassador and thanked us very much 

for this program because her son, who was 11 years old, every day 

was trying to be recruited by one of the armed actors, and in exchange, they promised the mother they would feed the kid. 

And now, with this program, the mother was able to put her son 

in school, but we need to figure out a way to make more people 

aware of it because that would translate to more support. 

Mr. KARSTING. I appreciate that. We will take note of that. I 

would also invite any Members, if you travel internationally, if you 

have a moment, our staff overseas would love to show you some of 

those programs, whether it is in Mozambique or Cambodia or Laos 

or wherever, wherever we have them. 

Mr. MCGOVERN. And that is part of kind of the proactive stance 

I am looking for so that when Members go on CODELs, they know 

enough to know that there are these programs, these school feeding 

programs for them to see because they would be very impressed, 

but thank you for all the great work that you are doing. 

The CHAIRMAN. The gentleman yields back. 

Mr. Austin Scott, for 5 minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. 

Mr. Dolcini, the USDA arbitrarily dropped the posted county 

price for peanuts by $170 a ton on August 18. This pushed the 

price below the loan rate. That is a big deal to farm families; it is 

20 

no additional support to the producer. It counts against payment 

limits as a market and loan gain. 

And it seems that there was no real economic justification for 

this dramatic reduction. And I have seen a review from the University of Georgia’s National Center for Peanut Competitiveness. They 

see no evidence that the reason for the drop justifies the amount 

of the drop, and I would just like a commitment that you would, 

if you will, review what was done there, review the report from the 

National Center for Peanut Competitiveness and that we take into 

consideration that this is a substantial drop, and it has a substantial impact on farm families. If you read the release from the agency, it was simply to move peanuts out of storage. And shellers 

aren’t going to shell peanuts just for the sake of shelling peanuts 

when they have to pay cold storage versus a regular storage. 

And so have you received any comments on that, if you would, 

just kind of a general question maybe what happened there, 

what—— 

Mr. DOLCINI. I don’t have a specific response for you, Congressman Scott, but I would be happy to review that report by the National Center, and I would also be happy to come up and meet with 

you and your staff here, along with the folks from the economic research division at the agency that work on peanut issues quite 

closely, and perhaps that can be a broader explanation of what the 

agency was doing. 

Mr. AUSTIN SCOTT of Georgia. Well, I very much appreciate that, 

and we will work around your schedule, work to accommodate you 

in any way we can, and we will get that report to you as soon as 

possible. 

Mr. DOLCINI. I appreciate that, sir 

Mr. AUSTIN SCOTT of Georgia. And, Mr. Willis, just kind of a general comment. I know that the cotton industry and cotton producers have been meeting with you about a couple of different 

issues with regard to STAX. They are very complimentary of you 

and the relationship that they have with you. I want to thank you 

for that and for working with them. 

What kind of timeline do you expect that we will be operating 

under with notification of any changes for the next year? 

Mr. WILLIS. I would like to also express my appreciation to the 

cotton producers. Throughout this farm bill, we have had significant amount of conversations with these groups simply because the 

changes in the farm bill were pretty dramatic. There was a lot of 

changes that we needed to have. Some of these programs, areawide programs are new, new to producers and sometimes new to 

the Risk Management Agency. So throughout it we talked to them 

and tried to take their input and take it to heart. 

There have been a few other issues. We have been talking about 

them lately, and I would anticipate very soon we will have any decisions made for the next year. Some of the requests they had were 

very reasonable, and we are trying to work with them to make that 

happen. 

The reality is, we want the safety net to work for the producer 

that it is intended to work for, and if they have reasonable ideas, 

we are willing to take them under consideration. That is one reason that we implemented many of our programs in the farm bill 

21 

using kind of a pilot authority. That gives us the ability, if something doesn’t work out perfect the first time, to make a few changes 

so that the next year it works better for the producers. 

Mr. AUSTIN SCOTT of Georgia. Thank you for that. You said soon. 

Is that 30 days? Sixty days? 

Mr. WILLIS. I don’t know exactly which changes you are referencing, but I know we have had conversations on allowing them 

to purchase STAX on certain practices and a lower percent on other 

practices. That issue there, in fact, we have already resolved it, and 

they are pleased with the result. Without knowing exactly any 

other issues, I don’t know the timing, but we would know very 

soon. 

Mr. AUSTIN SCOTT of Georgia. I have about 30 seconds left, so we 

will get you the list. 

Mr. WILLIS. Okay. 

Mr. AUSTIN SCOTT of Georgia. And I certainly appreciate you 

working hand in hand with the industry. 

Mr. Chairman, I will yield the remaining 29 seconds. 

The CHAIRMAN. The gentleman yields. 

And the chair will take full notice of the time yielded back. 

Ms. Plaskett, 5 minutes. 

Ms. PLASKETT. Thank you, Mr. Chairman, Ranking Member. 

Thank you, panelists, for your time and your tireless work on behalf of farmers. 

I have a question for Under Secretary Taylor. This is related to 

drought. This past year, the Virgin Islands was hit by a severe 

drought with rain levels very well below average since last October, 

and we had, as a result of that, we had enumerable livestock fatalities due to a lack of grazing and feed. 

I was encouraged that USDA was able to provide assistance, and 

an official drought disaster declaration was made for the Island of 

St. Croix, although it didn’t happen for the Islands of St. Thomas 

and St. John, and I understand that was due to the acreage and 

the amount of farmers that were on those islands. And we are 

pleased that help is on the way, although, of course, our farmers 

would like a little more assistance than just loans at this time. 

One of the problems that we had in this process was that the 

Virgin Islands is not included in the U.S. Drought Monitor and 

does not have a Drought Monitor classification, which is part of 

your program eligibility requirements before disaster is declared. It 

took a great deal of special arrangements on behalf of our office 

and my staff to make that happen, and I want to know how this 

process is supposed to work and how can it be done more smoothly 

and why the Virgin Islands might have been kept off and what can 

we do to ensure that this is rectified in the future. 

Ms. TAYLOR. Thank you, Congresswoman. I appreciate that question. 

I will actually turn it over to Administrator Dolcini, who has 

worked really closely on this issue, so he can elaborate further. 

Ms. PLASKETT. Okay. Thank you. 

Thank you, sir. 

Mr. DOLCINI. Absolutely, Congresswoman, and it has been a 

pleasure to work with your staff on this issue here. 

22 

As you are aware, the Drought Monitor does not cover the Virgin 

Islands, and so we were lacking a comparative rainfall analysis 

which allows us to make determinations about counties or regions 

that are eligible for, in this case, the Livestock Forage Program. 

We were able to make a comparative rainfall analysis using data 

from Caguas, Puerto Rico, and in the interim, and we are hopeful 

that we can work with the Drought Monitor to establish a more official presence on the Virgin Islands. The data from Caguas allowed us to extend 4 months’ worth of LFP payments to affected 

livestock operations on the Virgin Islands. We are happy to continue to work with your office to make sure that folks better understand what the process is around our disaster assistance programs. 

As you know, the Virgin Islands is administered out of our Florida State office and the State Executive Director gets over to the 

VI from time to time. Perhaps I can take a trip down to better understand. 

Ms. PLASKETT. You need to. You have an open invitation. 

Mr. DOLCINI. Well, I appreciate that. 

Ms. PLASKETT. As well as the Under Secretary, and come during 

the months of November to March. I think that will be the best 

time for you to come, don’t you? 

Mr. DOLCINI. If I can convince Deputy Taylor to sign the travel 

authorization, I will be happy to do that. But we are happy to work 

with you, and we have a good interim solution here on the—— 

Ms. PLASKETT. I appreciate that. And can I ask, with regard to 

those loans that were given to our farmers and for the loans that 

farmers have, we were talking about FSA monitoring their service. 

Are they servicing the loans? Are they able to buy/sell those loans? 

How does that work? 

Mr. DOLCINI. No, they are not sold on the secondary market. Our 

direct loans are made by the Farm Service Agency and serviced by 

the Farm Service Agency. That constitutes the bulk of our farm 

loan portfolio. We do have an extensive guaranteed program where 

we work with commercial lenders who participate in our guaranteed program, and we guarantee up to 95 percent of the body of 

the loan that is made. 

It is really one of the best deals that the U.S. Government offers, 

and our delinquency rates are very low for both programs. In the 

case of emergencies, we have an Emergency Loan Program that operates in a very similar way to most of our direct loan programs, 

and that is an option for producers impacted by natural disasters 

as well. 

Ms. PLASKETT. Thank you. And then I had a question for Mr. 

Willis, and this is regarding in terms of the Risk Management 

Agency. 

One of the things that I note as one of the essential tools for 

farmers in anticipating and avoiding some of the things that we 

talked about, drought, disaster, is insurance. And particularly in 

the Virgin Islands, where we have small diversified farms, we recognize that this insurance is really helpful, particularly for new 

farmers as they are starting up. 

Can you talk about ways that RMA can help to strengthen and 

stabilize an island’s farm economy as it is trying to build itself and 

grow? 

23 

Mr. WILLIS. One of the new products that we are very proud of 

and we think has opportunities for helping everybody all across the 

United States and everywhere, because of its flexibility, is the 

Whole Farm Protection Program. The Whole Farm Protection Program is something that in many areas where you might not have 

a large agriculture presence, you don’t have what we need to set 

a rate. Well, what the whole farm does, it allows the farmer to insure everything on their farm, their whole farm. It looks at their 

revenue. I think that would be a program where I would love to 

sit down and talk to you and see what options we have to put it 

out there in the Virgin Island because that could probably be the 

most flexible safety net for those producers. 

Ms. PLASKETT. Thank you so much. 

And, Mr. Chairman, thank you for the time. 

The CHAIRMAN. Thank you. The gentlelady yields back. 

Mr. Crawford, for 5 minutes 

Mr. CRAWFORD. Thank you, Mr. Chairman. 

Ms. Taylor, I am concerned about the actively engaged rule. 

What is the status of the rulemaking process and when can we expect a final rule? 

Ms. TAYLOR. Thank you for that question, Congressman. As directed by the 2014 Farm Bill, it gave us some clear direction to 

take a look at the actively engaged rule due to active farm management, but it also gave us some strict confines to really operate 

under. One was an exclusion for entities solely comprised of family 

members. This fall—or excuse me, this spring, we published a proposed rule. That time closed. We received just under 100 comments. 

Currently we are analyzing those comments, addressing them 

within the final rule. As the rulemaking process is continuing, we 

don’t have an exact timeline for when the final rule will be published, but we will certainly keep your office and the Committee 

apprised as we go forward, and we are certainly cognizant of keeping producers informed of whatever the new rules may be but also 

not changing rules midstream for producers as well. 

Mr. CRAWFORD. Okay. I want to make sure that we are incorporating those concerns about the number of managers that are allowed on large or complex operations. Is that something being 

taken into consideration? 

Ms. TAYLOR. As actually directed by the farm bill, they also put 

some requirements for USDA to consider the size of operations and 

also the complexity of certain operations. We received some comments to that effect. In the proposed rule we allowed additional 

farm managers, whether if the operation was large or if it was complex, and two additional if it was large and complex. We received 

some comments on those limits, and we are taking a look at those 

through the rulemaking process. 

Mr. CRAWFORD. Okay. I understand that you are almost done 

with the implementation process for ARC and PLC with the payments for 2014 expected to go out in October. What are the lessons 

learned for the 2014 Farm Bill commodity program implementation 

and what issues do you have left on that? 

Ms. TAYLOR. I think some of the lessons that we learned is these 

were new programs to farmers. It was a whole different way for agVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00027 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
24 

ricultural producers to really think about a farm safety net. For the 

first time, they had required options they were going to have to 

make, as opposed to the direct payment program beforehand. 

We certainly appreciated the money this Committee directed toward development of some online tool resources. We partnered with 

Texas A&M and the University of Illinois to develop two different 

online tools so producers could kind of run scenarios on what these 

programs may do in the future based upon different commodity scenarios. 

We also worked through extension to provide education throughout the country, in counties all over the country. I think those resources were extremely valuable in educating producers on brand 

new programs and a whole new concept to the farm safety net. 

Mr. CRAWFORD. Okay. Thank you. 

Mr. Willis, on crop insurance, what steps are being taken to continue to educate farmers on crop insurance and the crop insurance 

providers on the provisions of the farm bill related to crop insurance as they continue to be rolled out? 

Mr. WILLIS. There are quite a few things going on right now, and 

many of them started immediately after passage. As soon as the 

farm bill was passed, we started working with our partners, the 

crop insurance companies. We held trainings. As different parts of 

the farm bill were available, they worked with crop insurance 

agents, we talked to producers, we educated producers. We also 

dedicated some funds through the Risk Management Education 

Program. We put a priority there to educate on new farm bill programs. 

The Risk Management Agency also partnered with Val’s agency, 

the Farm Service Agency. They held hundreds of sessions all 

around the United States to educate on farm bill programs, and because of the close ties between title I and crop insurance, we attended many of those with them. 

We also partner with some of the private developers of products, 

such as peanut revenue and such as margin, to help train them as 

well. So it is quite a few partnerships, and we have also used technology. We actually have an app out and a little calculator on our 

website that helps producers go in when they have some time and 

identify how the programs work for them and determine what the 

safety net is and what they want to take advantage of. 

Mr. CRAWFORD. How wide-spread is Supplemental Coverage Option for crop insurance now and specifically what crops are included and what aren’t? 

Mr. WILLIS. It is easier to summarize. Once we make all our announcements for next year, 97.5 percent of acres within the crop 

insurance program will have an SCO policy available for them. The 

vast majority of crops that have enough data to run an area program will have SCO. The same also goes along with APH exclusion 

as well. 

I can certainly get you the list of crops, but it is a very long list. 

We have a few more announcements to make as far for next year, 

but we are very pleased. And I want to recognize my staff. They 

have done a tremendous amount of work making sure SCO is available for as much as we can. 

25 

Mr. CRAWFORD. Excellent. Thank you. I would like a list of that 

if you wouldn’t mind providing that. 

And I yield back. 

The CHAIRMAN. The gentleman yields back in. 

Mr. Allen, for 5 minutes. 

Mr. ALLEN. Yes. Thank you, Mr. Chairman, and I appreciate 

your time this morning. 

Administrator Dolcini, the USDA—and I am talking about the 

actively engaged rule as far as you are currently in the final rulemaking phase to implement the farm bill language that modified 

the actively engaged provisions. I know that the Department has 

received extensive feedback as far as the comments and concerns 

from major commodity organizations regarding the impacts of the 

proposed changes. 

The farm bill provisions are pretty clear regarding concerns in 

how this proposed rule could impact farms that are largely made 

up of family members but we may have relatives involved not covered by the family member provision or others that serve a management function on the farm. In these circumstances, it is my understanding from the USDA proposal that all the members of the 

farm would then be subject to the new definition of actively engaged, even the family members of the farm, and I hope the final 

rule clarifies this issue. 

Can you tell me when the Department expects to release the 

final rule and for what crop year it will be affected? 

Mr. DOLCINI. I appreciate the opportunity to answer, Mr. Allen. 

The rule will apply for 2016 and subsequent years. There won’t be 

a retroactive application of this rule. As Deputy Under Secretary 

Taylor has noted, we are working on the final rule now, and we received a number of comments from around the nation, including 

many from commodity organizations that we have incorporated 

into the way we are approaching this rule. We are also trying to 

keep closely to what the farm bill directed us to do. 

And as you point out, there are exemptions for family members; 

there are exemptions for spouses, for others that are involved. And 

we really tried to focus on the large and complex—or large or complex—operations to determine how many payment limits would 

apply. But we are working on the rule as we speak, and we will 

certainly provide a good update to the Committee when that is in 

its appropriately final form. 

Mr. ALLEN. All right. Thank you. 

Administrator Willis, as far as the STAX program, I would like 

to commend the Department for their implementation of this, and 

would like to congratulate you on the implementation of the STAX 

income protection plan. This is a tremendously important insurance product for the cotton farmers, and I appreciate the time and 

effort the Risk Management Agency put into this timely implementation of this new insurance product. 

It is my understanding that RMA has received several suggestions of ways to improve STAX ahead of the 2016 crop contract 

change dates. Some of these changes, including allowing STAX purchase levels by practice, timing of any indemnity payments triggered by STAX in areas where data is available earlier, and offerVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00029 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
26 

ing STAX everywhere cotton is growing, including written agreement counties. 

It is my understanding that the cotton industry and RMA have 

had a very productive working relationship during the implementation of STAX, and I encourage this relationship to continue. Do you 

have a timeline for when these changes, if enacted, could be announced and implemented? 

Mr. WILLIS. Yes, sir. I apologize the order that the three changes 

that you mentioned, I do recognize, I believe, the first and the third 

we intend to do. I don’t know if they have been announced. I know 

we have had discussions on them. I apologize, the middle one, I 

have to get back to you on as far as the timing of the STAX payments. I don’t know if there was a lot of flexibility there in making 

those earlier. Certainly we have every desire to make them as 

quickly as possible, but I simply don’t know the answer, if that was 

possible. 

But my understanding is that on the first and the third issue, 

we are moving in those directions. We believe those are reasonable 

ways to make STAX work better 

Mr. ALLEN. All right, sir. 

As far as the overall cotton situation with regard to trade and 

that sort of thing, what are we doing with regard to the worldwide 

situation on cotton as far as the market price? Any ideas about 

what you are working on there? 

Ms. TAYLOR. Thank you for that question, Congressman. Well, 

first off, I will state that cotton is one of our agricultural cooperators, and so we continue to partner with them through some of our 

market development programs on MAP and FMD, where we are 

able to help promote cotton into new markets or expand into existing markets, so we are continuously looking for new cotton markets 

for our U.S. grown cotton. 

Also, we continue to have conversations, in the larger overall 

WTO context on subsidies around the world and their impact on 

production around the world, that trade distorting subsidies from 

any country, not just the United States, have a market distortion 

impact, and so we continue to have those conversations within the 

context of the WTO. 

Mr. ALLEN. Well, I appreciate your work on that because we are 

losing acres, and we need to keep this product going. Thank you. 

Mr. Chairman, I yield back 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Rouzer, 5 minutes 

Mr. ROUZER. Thank you, Mr. Chairman. 

And Ms. Taylor, great to see you again, as well as your colleagues and I appreciate you coming to join us here today. 

I have several different questions, so I am going to try to be brief 

as I ask them and if we have enough time to get through a few 

of these. 

Pork: Obviously, it is very important to the State of North Carolina. South Africa has significant potential for sales of U.S. pork, 

and I am just curious where we are with them in terms of opening 

up that market. 

Ms. TAYLOR. Thank you for that question, Congressman Rouzer. 

Pork is also very important to Iowa as well, my home state. 

27 

Mr. ROUZER. I heard that. 

Ms. TAYLOR. I certainly understand the importance that you emphasize on that. We continue to have ongoing technical discussions 

and political discussions with our South African colleagues. Two 

weeks ago, I was in Gabon for the AGOA forum where we met with 

South Africa again. We actually have a technical team there this 

week continuing those discussions on the host of SPS issues we 

have with South Africa. And then also we have the ongoing outof-cycle review under AGOA as well for South Africa. 

So we continue to press them at every venue we have possible 

on resolving our market access issues. 

Mr. ROUZER. Is there anything that we can do as a Committee, 

or Congress as a whole, to help spur that along any? Just curious. 

Ms. TAYLOR. I think the ongoing conversation that has been out 

there, it has been important for them to see that this is important 

for hosts, not just one industry, but all three, pork, beef, and poultry industries, that are being affected within the United States. 

Mr. ROUZER. Second question, MAP and FMD programs, there 

has been some concern that perhaps all the money that is appropriated and allocated by Congress for those programs isn’t always 

necessarily used—I wouldn’t say not used properly—but perhaps 

used for administrative and other costs perhaps. What is the Department doing to focus in on that? 

Ms. TAYLOR. First off I would just say, USDA believes MAP and 

FMD are critical tools to get into new markets or to expand into 

existing markets. The demand for these programs really continues 

to grow as new program participants come in, new commodities, 

new exports are showing interest in utilizing them. We continually 

look for the best options to manage the programs. We do take oftentimes a small portion for administrative fees, but also sometimes if we are not using those, we actually give them back at the 

end of the fiscal year like we did last year. 

So we are always looking for new opportunities to expand our agricultural mixes for exports that we are doing while maintaining 

the best management of the program possible. 

Mr. ROUZER. Mr. Karsting, the United States International Food 

Assistance Report, which is a joint product of USDA and USAID, 

is due April 1st of each year. Do you have any idea when we might 

be able to expect to see the report since it is about 5 months past 

due, and is FAS, have you all completed your component of that? 

Mr. KARSTING. Right. Just by way of background, the United 

States International Food Assistance Report covers the three farm 

bill authorized international food aid programs. So that is Food for 

Progress, McGovern-Dole Food for Education, and P.L. 83–480 Title 

II, or Food for Peace, which is an USAID administered program. 

So what we do between FAS and USAID is we try to merge our 

information. We are in the process of doing that so we can present 

one unified report. I am hopeful that we get that to you as soon 

as possible. 

What I can tell you today, is that that report will show that gov- ernment-wide in 2014, we did about $1.8 billion in food aid with 

about 35 million beneficiaries in 65 different countries. For USDAspecific programs, McGovern-Dole in 2014 totaled about 78,860 

metric tons and about $164.8 million in work with our cooperators. 

28 

We had six new grants covering 2.25 million recipients in nine 

different countries. On the Food for Progress side of things, that is 

where we send commodities and it is monetized for development in 

local countries, we did about 195,000 metric tons of commodities 

valued at $127.5 million, 1.6 million beneficiaries in ten countries. 

Bearing in mind the latter one, Food for Progress, if we are in 

a sequester situation, that will cut into the amount of money we 

can use for transportation; so we have gone from in the past about 

12 annual projects under Food for Progress. Now we are down to 

about six per year or five. So we are trying to make those programs 

work as best they can and cover as many people in a responsible 

way as possible. 

Mr. ROUZER. Thank you, Mr. Chairman. My time has expired. 

The CHAIRMAN. The gentleman yields back. Mr. Abraham, for 5 

minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. Under Secretary Taylor, first thank you so much for your service in the U.S. Army and 

your time in Iraq. It is much appreciated. 

First question to you. It is my understanding that the USDA is 

going to commit about $100 million to fund some biofuel infrastructure. Can you explain what authority is being used to do that? 

Ms. TAYLOR. Thank you for that question, Congressman. As you mentioned, we recently announced $100 million in matching grants 

where about 21 states have delivered projects to match that on an 

over one-on-one basis. We are using authority under the Commodity Credit Corporation charter. 

What we have actually found is this will certainly boost the renewable energy economy, but it is also going to be able to bring 

more choices to consumers, and we have found that one out of ten 

cars on the road today are flex fuel. However, there is a limited infrastructure out there. So this is really giving more choice to consumers all over the country. 

Mr. ABRAHAM. I am for it. We grow corn in Louisiana, too, just 

like you do in Iowa. But the authority is coming from the CCC? 

Ms. TAYLOR. Yes, sir. 

Mr. ABRAHAM. Okay. Mr. Dolcini, could you bring us up to speed 

on the Microloan Program. How is it being serviced? What is the 

average size of the loan? Are they performing well? Those types of 

questions. 

Mr. DOLCINI. That is a great question, sir, and I appreciate the 

opportunity to tell you a little bit about the Microloan Program as 

it has been one of the real shining stars in the Farm Service Agency loan portfolio since the program rolled out in January of 2013. 

We have made to date nearly 15,000 microloans from Maine to 

Hawaii. Most of them have been $35,000 or less, but the 2014 

Farm Bill increased the loan amount to $50,000, so now we are 

able to make loans of $50,000 or less; and we are also working on 

various new iterations of the Microloan Program as well. I like to 

think of it as 15,000 different American dream success stories because when I was the State Director in California, I saw firsthand 

the successes of the Microloan Program in building businesses, in 

adding jobs to rural economies, in allowing folks to expand their 

agricultural operations. And as Administrator in my travels, I have 

seen that all over the country, including recently in Louisiana. 

29 

So the Microloan Program has been a real success story for our 

agency and the farm loan folks around the country that work on 

microloans as well as our entire—— 

Mr. ABRAHAM. And they are performing well—— 

Mr. DOLCINI. They are performing quite well. They are not performing at any level different than our direct and guaranteed programs. In fact, in some cases the returns have been better. 

Mr. ABRAHAM. Okay. Thank you. And, Mr. Karsting, tell me your 

hopes or predictions on the American business or agribusiness outcomes in the TPP negotiations. 

Mr. KARSTING. I had a boss one time that told me if you must 

predict, predict often, so at least a few of them would come true. 

I think we are going to have an outcome in TPP that is commercially meaningful across a wide swath of American agriculture. We 

look at sort of what the opportunities are out there. This is a great 

opportunity for us to bring tariffs down, to hopefully resolve technical barriers to trade and non-tariff barriers, but also to set the 

rules of the road for a broader swath of the world. 

The countries engaged in the TPP negotiations represent 40 percent of global GDP. And I like to remind people that the question 

isn’t whether we have TPP and write the rules of the road or the 

status quo. If we don’t do anything, somebody else is going to fill 

that vacuum. And that is why we think it is important for us to 

have a high-quality, comprehensive agreement, and that is what 

our negotiators are working on every day. 

Mr. ABRAHAM. Do you see the same positive, hopeful outcome 

with T–TIP also, or is that going to be a little harder negotiation? 

Mr. KARSTING. Well, T–TIP isn’t quite as mature in the process, 

and if you want to weigh in on this, Deputy Secretary, we certainly 

have not been working on it as long, but there is some hopefulness 

that if we have a successful TPP conclusion, that that would lend 

momentum and urgency to T–TIP negotiations as well. 

Ms. TAYLOR. Thank you for that, Phil. I would just add, Congressman, that the issues are slightly different in T–TIP—— 

Mr. ABRAHAM. I understand. 

Ms. TAYLOR.—than what we experience in TPP—— 

Mr. ABRAHAM. Right. 

Ms. TAYLOR.—and are trying to resolve. I talk to Europeans consistently about this, and market access, reducing tariffs, is certainly something we have to address, but without addressing our 

SPS issues, the non-tariff barriers, that we are experiencing with 

Europe, those market access reductions, those tariff reductions, are 

meaningless; and so we really need to see progress on both within 

the context of T–TIP. 

With Europe we actually have a trade deficit, anywhere from $23 to $40+ billion in trade surplus on average from agriculture every 

year. We have a trade deficit almost every year with Europe because of some of these non-tariff barriers, so we are working hard 

to address those in the context of the negotiations. 

Mr. ABRAHAM. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. Mr. Yoho, for 5 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. Ms. Taylor, you brought 

up, let’s see here, that there is $35 that we invest in research and 

30 

development, or for every dollar we put in we get $35 return. Is 

that true? Did I hear that correctly? 

Ms. TAYLOR. Yes, sir. This is a study done independent several 

years ago by our cooperator groups, and they did find that for every 

$1 that the government or industry is spending in market development programs, we are seeing an additional $35 in agricultural exports stimulated. 

Mr. YOHO. Okay. And I meant to thank you for your service to 

our country. I appreciate it. 

Mr. Willis, on the Asian fruit fly, I am sure you are well aware 

of it in south Florida in the Homestead area. I come from the great 

State of Florida, and it has been a problem down there. It is rapidly emerging. It is rapidly spreading, and right now it is contained 

to the Homestead area in the south. But what happens, the perimeters are 1,200 yards I believe, or 400 yards, and anything within 

that area has to be destroyed, or it is quarantined and then obviously destroyed. 

And if it moves up to the Miami area, we are looking at about a $2 billion impact. What are you guys doing on that, or what do 

you see right now? Is there crop insurance to protect any of that? 

Mr. WILLIS. I think the best thing for me to do on that question, 

sir, is to get back to you in writing on that. 

Mr. YOHO. Okay. Thank you. 

Mr. Karsting, the Food for Peace program you were talking 

about, we all know the benefits of that. And one of the things that 

is real contentious, as you know, are GMOs. In your opinion, have 

you seen the beneficial effects of GMOs increasing production, increasing yields on these products, in your opinion? 

Mr. KARSTING. Well, I grew up in Nebraska, and if you just look 

at what has happened to corn yields, particularly in dryland corn 

over the last few years, you have to be cognizant of the fact that 

yields have increased in a variety of different conditions. 

We have examples of eggplant in Bangladesh that are grown that 

are Bt that reduce producers’ exposure to chemicals and grow more 

efficiently. We have other tropical fruits. There are a lot of opportunities out there. What I try to remind people is that we are going 

to have 9.6 billion people on this planet by 2050, and we ought not 

confront that challenge with our hands tied behind our back. And 

by saying our, I mean globally, global community so—— 

Mr. YOHO. I am sure you will see us come back to hopefully engage you guys helping us market this because we all know the benefits of it, but there is that other side out there that is trying to 

squash this. And we just can’t allow that to happen. There are too 

many good things that are coming out of this. 

Mr. KARSTING. I would say I sit next to the Secretary on most 

of his meetings with international leaders, and it is a topic that he 

raises eloquently on a regular basis. 

Mr. YOHO. Well, since we are on this topic, and we are talking 

about trade with TPP, we get involved with these multi-national 

trade agreements, and sometimes you have multiple countries saying, well, when they come together there will be multiple countries 

saying, no, we don’t want the GMOs in here or certain insecticides. 

Do you think it is better to have the large multi-national trade 

agreements or more of the bilateral? 

31 

Mr. KARSTING. I think the more sort of uniformity and commitment we have to sound science and transparency that is recognizable from country to country, in general, the better off we are. That 

has been our goal in all of these negotiations is to make sure that 

we have trade rules that are based on science and not based on 

other things. And so to the extent we can do that among a broader 

spectrum of countries, we are better off. 

Mr. YOHO. Okay. And then Mr. Dolcini, you were saying there 

are $5.2 billion in loans that you give out? Is that correct? 

Mr. DOLCINI. Yes, it is $5.2 billion worth of loans, sir. 

Mr. YOHO. Let me ask you because this is something that has 

come up in several meetings. You are obviously servicing these 

loans. Right? You are giving the money out, collecting the money? 

Mr. DOLCINI. That is right. 

Mr. YOHO. And so essentially the USDA has become a bank in 

a certain sector of the economy. Would it be better to move these 

over to the GSEs like Farm Credit Service? You guys guarantee 

them but let them service them so that the government is not in 

the banking industry? What are your thoughts on that? 

Mr. DOLCINI. Well, you are right to point out that we are one of 

the largest ag lenders in the country, and we serve an appropriate 

role. Frankly, our friends and collaborators in many instances in 

the Farm Credit System and commercial banks work well with us, 

take advantage of the guaranteed program we offer. But in some 

cases just aren’t willing to make some of the agricultural—— 

Mr. YOHO. But if the Federal Government guaranteed them and 

we got rid of the bureaucracy of collecting the money and allowed 

the GSEs or some other entity to do that with the government 

backing, I would like to have your thoughts, but I am out of time; 

and if we could get that in writing, I appreciate it. And I yield 

back. 

Mr. DOLCINI. Absolutely. Thank you, sir. 

The CHAIRMAN. The gentleman yields back. Mr. Thompson, for 5 

minutes. 

Mr. THOMPSON. Thank you, Mr. Chairman. Mr. Chairman, 

thanks for holding this 2 day marathon hearing here. Great opportunity. Thank you so much for this first panel. 

My question has to do with the ACRSI program. The report the 

Committee received on the accomplishments of ACRSI listed a 

number of key outstanding efforts that have not yet been completed. Now, we appreciate that these are complex systems and involve large amounts of data, but the report you sent to the Committee suggested that the program was, ‘‘substantially complete,’’ 

in spite of only covering 30 counties in a pilot program so far. 

So my question was what can you tell us about the outstanding 

issues for integrating systems across FSA, RMA, and the approved 

insurance providers, and how are they being addressed, and what 

kind of timeline can we anticipate for completing those? 

Mr. WILLIS. I will start out and if Administrator Dolcini wants 

to add anything because the two agencies are working together. It 

was our report that you were referencing as far as substantially 

complete. This past summer we did do a pilot. That was only a part 

of what we were doing with ACRSI. 

32 

ACRSI obviously is the process of integrating what the two agencies do as far as sharing data between the two agencies. In large 

part it is trying to make lives for farmers easier so that they don’t 

have to report the same data two times or more. 

The first major step was the pilot last summer. We are moving 

forward with a significantly expanded pilot this fall, and it will continue further next spring. The amount of progress we have been 

making is continually increasing at a much more rapid pace, so 

producers this fall will see a lot of improvements even over the 

summer. And next summer they will continue to see more. 

Mr. Scuse, Under Secretary Scuse, this is kind of in a way something that he talks about a lot because he is a farmer in Delaware, 

and he got tired of having to do the same report, one to his crop 

insurance agent and then to the Farm Service Agency. And I can 

tell you almost every day that I talk to him he asks how ACRSI 

is going. He is very intent upon seeing the success Congress envisioned when you put that language within the farm bill. 

Mr. DOLCINI. Sir, I would just add that you are absolutely right 

to point out the complicated technical environment that we work 

in here. What Brandon and I have tried to do between our two 

agencies is do more data sharing, and we have done it both with 

the ACRSI program that you mentioned as well as things like conservation compliance as well, trying to break down some of the IT 

silos that exist between the various agencies at USDA. 

So, as Brandon said, you will see more rapid movement with regard to this particular initiative, but we are doing everything on 

the IT front at the Department of Agriculture in a more thoughtful 

and strategic and incremental way. We have learned a lot of lessons about how to implement big, complicated IT projects in the 

last several years, and we want to make sure that ACRSI is done 

right. 

Mr. THOMPSON. Thank you. There has been some mention from 

my colleagues about trade. That is obviously extremely important. 

It seems like trade is what kind of insulated our agriculture industry during difficult times, 2008, 2009, at the least to a degree was 

maintained in a robust form. 

So Mr. Karsting, it would be helpful, can you describe or clarify 

your role as an advocate of the agriculture industry in the context 

of international trade? And how does your role differ from that of 

USTR? And how do all of you coordinate your efforts? 

Mr. KARSTING. Absolutely. I am glad to answer that. We work a 

great deal with USTR. As you may know, USTR is designated as 

the lead government-wide agency on trade negotiations; but the reality is that there are thousands of tariff codes relating to agriculture. Our people are at the negotiations supporting them with 

analytics and data on a host of those tariff sorts of issues as well 

as their expertise on non-tariff barriers to trade; so we are working 

with them all the time. We also do joint advisory committees with 

USTR. These are technical advisory committees appointed by Secretary Vilsack and Ambassador Froman, and so we work hand in 

glove with them all the time. 

For us, though, it is not just trade negotiations. We also have 

people at post in about 97 different countries around the globe, and 

they sort of serve as eyes and ears on emerging trade issues, reVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00036 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
33 

solving bilateral trade irritants where they can. So we work a lot 

in connection with USTR. 

Mr. THOMPSON. Very good. Thanks to all of you. Thank you, Mr. 

Chairman. 

The CHAIRMAN. The gentleman yields back. Mr. Moolenaar, for 

5 minutes. 

Mr. MOOLENAAR. Thank you, Mr. Chairman. I wanted to follow 

up on some of the discussions we have been having about TPP and 

T–TIP and specifically with respect to dairy. I am from Michigan, 

and dairy is a very important part of my district. And meeting with 

dairy producers in Michigan, one of the things we are concerned 

about is milk prices being depressed and oversupply. In fact, I 

guess in late August there was a report that dairies in the Northeast and Michigan dumped more than 30 million pounds of milk 

because of the lack of capacity to process or markets to handle it. 

And so as you can understand, our producers are looking for new 

markets. And one of the concerns has been with respect to Canada. 

And I am wondering if you could comment on your thoughts on 

that, and also perhaps mention how you interact with the trade 

representative in working on these issues? 

Ms. TAYLOR. Congressman, if I may take that question, I had the 

opportunity to be at the last formal TPP ministerial, which was a 

few months ago in Hawaii. 

The dairy industry, we have been working very closely with the 

dairy industry and in a final deal that is commercially meaningful 

for them. Obviously, the U.S. is in a unique spot. We have offensive 

and defensive interests as it comes to dairy trade. But we are 

working very closely with them on a deal in not just Canada but 

also Japan, that is commercially meaningful. 

I think also when you look at some of the other trading partners, 

there is a lot of interest there in markets like Vietnam and Malaysia which have growing middle classes. Over 40 percent in both of 

those countries, over 40 percent of their population is 25 years old 

or younger. And so as their populations age, they are going to be 

looking for a higher quality food, whether that is meat, dairy, fresh 

fruits and vegetables, things the United States really excels at producing. 

And as we have looked globally at competitive agricultural production, the U.S. cost of production has come much more in line 

with New Zealand or Australia, so we are much more competitive 

globally, and our exports in dairy are reflecting that. Today, roughly 15 percent of our dairy products produced are being exported 

globally. 

Mr. MOOLENAAR. And are you aware, did Canada make some 

agreements that they would open up markets to our dairy to enter 

into the TPP discussions? 

Ms. TAYLOR. We have long said that TPP needs to be a comprehensive agreement for the United States, but for all trading 

partners as well. What that is meaning for Canada is some of the 

supply managed programs, that we are going to need meaningful 

access there. That is dairy, but that is also in poultry and eggs as 

well. 

34 

Mr. MOOLENAAR. And are there criteria that have been established that you can say, this meets our criteria in terms of opening 

access? 

Ms. TAYLOR. The ongoing negotiations are very fluid, and so saying what that might or might not be is hard at this stage, but certainly we are looking at the whole package, so there is definitely 

a Canadian component here; but it is much broader than that. It 

is also what market access we can get into Japan and some of the 

other countries I mentioned like Vietnam and Malaysia. 

But certainly are happy to keep the Committee apprised as the 

negotiations continue and near finalized agreement and what that 

dairy package actually looks like. 

Mr. MOOLENAAR. Yes. I guess one of the things that strikes me, 

and again I wasn’t involved in the early stages of this, but my understanding was is that Canada, in order to become part of the 

TPP process, agreed to opening up their market to U.S. dairy products, and that was kind of a condition for them to be part of it. And 

I guess what I am wondering is, are there certain criteria that we 

are going to use to evaluate whether that has been met? 

Ms. TAYLOR. Congressman, from our perspective, Canada is 

going to need to offer commercially meaningful access into their 

dairy market. But what that criteria looks like, for the U.S. Government, but also our dairy industry, is looking at this a little more 

holistically for the entire agreement. And so what the exact Canadian criteria are, are very fluid because it is the overall trade picture through the 11 other TPP parties that we are negotiating 

with. 

Mr. MOOLENAAR. Is there a definition of commercially meaningful? 

Ms. TAYLOR. Not in this context. I don’t know if that is necessarily exactly defined, but certainly something worth value to our 

producers in an economic way to our dairy processors in an economic way. 

Mr. MOOLENAAR. Thank you very much. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Gibson, 

for 5 minutes. 

Mr. GIBSON. Thank you, Mr. Chairman. I want to commend you 

and the Ranking Member for setting up these hearings. I appreciate the opportunity for oversight. 

I apologize to everyone, including the panel, that I am just getting here and getting situation aware, but I do have a question. It 

actually follows up on Mr. Moolenaar. 

Given where we are and where dairy has been, say, 24 months 

ago when that percentage was a little higher—it was about 17 percent, maybe 18 percent at the highest—but also given the fact that 

production is up, I am just very interested to know raw numbers, 

if you will, the poundage in terms of how much now is being exported, controlling for the overproduction. So I am curious on that. 

Ms. TAYLOR. Congressman, I don’t have those exact poundage 

numbers with us, but we will certainly be happy to follow-up with 

your office with the numbers after the hearing. 

Mr. GIBSON. Well, thanks on that. Because, as I circulated in August, among the things I heard from my dairy producers, what 

35 

came up, Russia came up in terms of some reactions that we took 

in relation to the ongoing international affairs, Russia, the aggressive action they took last year. 

Our dairy producers are of the mind that our actions have hurt 

them. And I am just curious your reaction to that? 

Ms. TAYLOR. Thank you for that question, Congressman. This is 

getting back to Administrator Karsting’s point a little earlier about 

our presence all over the world. We have employees, the Foreign 

Agricultural Service has employees in roughly 96 countries, but 

they touched well over 150 countries through regional coverage as 

well; and they are our eyes and ears. 

While the Russia situation is ongoing, we are continually working to open markets all over the world within the context of TPP 

and T–TIP but also just bilaterally and working through a host of 

market access issues that arise every day. Whether it is facility 

registration for dairy products or things of that nature, we continue 

to work on a bilateral basis and a case-by-case basis; and our footprint on the ground really allows us to react quickly to ensure markets stay open. 

Mr. GIBSON. I appreciate that, and I look forward to getting that 

figure whenever it is available. And I look forward to continuing 

to participate in this as it unfolds, but that is all I have for now, 

Mr. Chairman. Thank you. 

The CHAIRMAN. The gentleman yields back. The Ranking Member has another 5 minutes. 

Mr. PETERSON. Thank you, Mr. Chairman. Mr. Willis, this provision that was in the farm bill about the catastrophic insurance or 

whatever it was for poultry. It probably wasn’t put in there for that 

reason, but you are doing a study on that or something? Are you 

getting close to having that done? When is that coming out? 

Mr. WILLIS. Yes. The study you are referencing should be available later this fall. 

Mr. PETERSON. Later this month? 

Mr. WILLIS. Later this fall. 

Mr. PETERSON. So that would be what, November? 

Mr. WILLIS. Probably around then, yes, sir. 

Mr. PETERSON. Did you farm that out to somebody or? 

Mr. WILLIS. We did. We contracted for that study, yes. 

Mr. PETERSON. Have you had any discussions with the industry 

about some work they have been doing with the reinsurers in 

terms of whether they would be interested in doing a business 

interruption insurance kind of a thing? Are you aware of that at 

all? 

Mr. WILLIS. I don’t believe that I have had any conversations. I 

don’t know if others have. There is also, in addition to the catastrophic study, there is a business interruption study that is also 

underway. We expect that early next year. 

Mr. PETERSON. Yes, but that was a different situation. That had 

to do with the bankruptcy of some processor or something and 

some producers being put at risk because their processor was bankrupt. Is that—— 

Mr. WILLIS. My understanding is yes. The two studies are different. The catastrophic will be available fall. The business interVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
36 

ruption will be next spring, and it covers the issues such as what 

you referenced. 

Mr. PETERSON. That will be in the spring? 

Mr. WILLIS. Yes, sir. 

Mr. PETERSON. And that was also farmed out to somebody, some 

university or something? 

Mr. WILLIS. I believe a private contractor. There were numerous 

different studies requested, often looking at the feasibility of crop 

insurance on a sector of agriculture that previously hadn’t had crop 

insurance coverage. 

Oftentimes to expedite implementation of the farm bill, we would 

offer these out as contracts to individuals who were experts in crop 

insurance, and they oftentimes write those. That allows us to focus 

a lot of our attention on implementation of the provisions that directly impact the farmers and not take resources away from that. 

Mr. PETERSON. Well, I just had a meeting with some of the poultry folks. If it is okay, we need to get together next week. I need 

to talk to you about some of the discussions that I have been having with them and get your input on that. If you would be up for 

that. 

Mr. WILLIS. I would welcome that opportunity. 

Mr. PETERSON. Thank you. Mr. Ashford, you had a question. I 

would yield to you. 

Mr. ASHFORD. Yes, I just had one follow-up. The question that we 

get, I get in Nebraska about the difference between TPP and T– 

TIP has to do with mainly the non-tariff-related issues. And would 

you mind going just in a general sense, explaining how you see 

those differences? I understand them generally, but if you could 

just kind of explain how you see the differences and the challenges 

between the two negotiations? 

We understand the tariff-reduction issue and eliminating tariffs 

in TPP; but what about the other, the non-tariff-related? 

Ms. TAYLOR. Certainly, Congressman. Thank you for that question. I will talk a little bit about T–TIP specifically. I think the 

issues, the negotiations themselves are very different. In T–TIP 

you have two very mature economies, developed economies, where 

we already are doing a lot of trade. The EU is already our fifth 

leading trading partner, and that is with oftentimes high tariffs on 

agricultural products and a host of non-tariff barriers or SPS barriers that is preventing trade. 

Really what we are having conversations on during the T–TIP 

negotiations are about real predictability in the regulatory process 

with the EU. What we see oftentimes with the EU is they have a 

scientific process that works quite well. It is called the ESF Committee. And they go through their scientific review. They find similar to what our scientists find in our regulatory processes, whether 

it is on certain pathogen reduction treatments or washes for meats 

and poultry or through certain approval of events in biotechnology. 

But then they have this political layer, and oftentimes then that 

is when it gets stuck. We don’t know the path forward. We don’t 

know how long that path forward can take. So what we are trying 

to do is build a process around the negotiations that will bring certainty that once the science is done, we don’t get stuck at that political layer. 

37 

Mr. ASHFORD. That is not so much the case in TPP? It is less so. 

Ms. TAYLOR. In TPP, many of our trading partners are working 

through, they are setting up their food safety systems or revising 

the regulations that we see today. Vietnam recently did a complete 

overhaul of their food safety system and food safety laws and regulations. We actually had, through some of our technical exchanges, 

helped them in that process. So in TPP, we worked a lot about recognizing international science-based standards, a rules-based process, having good regulations on the books. The same rules-based, 

science-based principles apply in TPP, just in a slightly different 

way. 

Mr. ASHFORD. Thank you. 

The CHAIRMAN. The gentleman yields back. Mr. Benishek, did 

you want 5 minutes on this panel? 

Mr. BENISHEK. No, thank you. I am just getting up to speed. 

The CHAIRMAN. Well, I want to thank, Ms. Taylor, thank you and 

the others for coming. 

As a transitional issue, our panelists have agreed graciously— 

thank you—to go down to 1306, for Members to go down and have 

a quick word if you want to while we are getting the next panel 

in. So to facilitate that, Ms. Taylor, you and your team, if you 

wouldn’t mind going to 1306, and our Members will swing by there 

and talk to you if they want to. 

Thank you so very, very much, and we will stand in recess for 

a couple minutes while we reset, about 10 minutes, and we crank 

back up. Thanks everybody. 

[Recess.] 

The CHAIRMAN. All right. Good afternoon. We will welcome our 

second panel to the podium. I passed you guys in the hall. I wasn’t 

trying to be rude, so we will have a chance to visit with you and 

transition to the next panel here in a minute. 

With us next we have the Honorable Robert Bonnie, Under Secretary of Natural Resources and Environment at the USDA. And 

accompanying him will be Jason Weller, who is Chief of the Natural Resources Conservation Service, and Ms. Mary Wagner who is 

the Associate Chief at the Forest Service. 

So, thank you for being here this afternoon. We appreciate it. Mr. 

Bonnie, the floor is yours. 

STATEMENT OF HON. ROBERT BONNIE, UNDER SECRETARY, 

NATURAL RESOURCES AND ENVIRONMENT, U.S. 

DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 

ACCOMPANIED BY JASON WELLER, CHIEF, NATURAL 

RESOURCES CONSERVATION SERVICE, USDA; AND MARY 

WAGNER, ASSOCIATE CHIEF, U.S. FOREST SERVICE, USDA 

Mr. BONNIE. Mr. Chairman, Ranking Member, and distinguished 

Members of the Committee, thank you for the opportunity to appear before you today to discuss the work of the Natural Resources 

Conservation Service and the Forest Service. This Committee deserves a great deal of credit for the 2014 Farm Bill, and I will focus 

much of my remarks on implementation of that law. 

In addition, given the seriousness of this year’s fire season, I also 

want to discuss forest restoration and the impact of wildland fire 

on our budget. Implementation of the 2014 Farm Bill is a top priVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
38 

ority for USDA. With respect to NRCS programs, the agency is 

demonstrating that voluntary conservation, backed by strong 

science and done in concert with a variety of partners, can solve 

critical natural resource challenges for America’s farmers, ranchers, and forestland owners. 

The agency has completed interim final rules for the Environmental Quality Incentives Program, the Conservation Stewardship 

Program, the new Agricultural Conservation Easement Program. 

NRCS has placed a particular priority on implementation of the 

new Regional Conservation Partnership Program. This new program has spurred new partnerships among producers, businesses, 

conservation groups, states, and others. In February, NRCS provided over $370 million in RCPP funding to 115 projects, an investment that matched more than dollar for dollar. In May NRCS, announced a second funding availability, 265 pre-proposals were submitted. Interest in RCPP is very high. 

Beyond this program, NRCS is spearheading a series of initiatives to address drought, water quality, wildlife habitat, and other 

issues. For example, our Mississippi River Basin Initiative is significantly increasing the adoption of critical water quality conservation practices. We are working with California farmers and ranchers to make their operations more resilient to drought. And NRCS 

is demonstrating through its Working Lands for Wildlife Program 

that farmers, ranchers, and forest landowners can voluntarily restore habitat for rare species so that they no longer need the protection of the Endangered Species Act. 

Let me now turn to the Forest Service. Increasing the pace and 

scale of forest restoration and management across our National 

Forests remains the top priority for the agency. The agency continues to invest in collaborative landscape-scale projects and has 

increased acres treated over the last several years. Timber sales 

have increased by 18 percent since 2008. 

The Forest Service has moved quickly to implement several provisions of the 2014 Farm Bill. Last year Secretary Vilsack designated over 46 million acres of National Forest System lands 

under the new insect and disease provisions of the farm bill. Twenty projects are moving forward, and 16 of those use categorical exclusions under NEPA. Working with states, the Forest Service has 

developed templates for use of the Good Neighbor Authority, and 

we have entered into agreements so far with Pennsylvania, Utah, 

and Wisconsin. 

Through our Joint Chiefs Landscape Restoration Partnership, 

NRCS and Forest Service are working together to restore forests on 

private lands adjacent to National Forests using farm bill dollars. 

Our biggest obstacle to increasing forest restoration and management is the wildfire budget. Longer fire seasons, increased fuel 

loads, and development into our wildlands are all significantly increasing the costs of fire fighting. In most years, the Forest Service 

is forced to transfer funds from nonfire programs to fund firefighting. This year we will transfer an estimated $700 million, but 

there is a long-term problem that goes well beyond these annual 

transfers. Fire programs now consume over 50 percent of the agency’s budget, up from 16 percent just 2 decades ago. As a result, the 

agency has 39 percent fewer employees working on nonfire proVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00042 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
39 

grams. All agency activities are suffering, including recreation, research, range management, and, yes, forest restoration. 

The current budget system is cannibalizing the very programs 

that can help us reduce the threat of fire. To solve the fire budget 

problem, we must solve both issues, both fire transfers and the 

long-term shift of resources away from nonfire programs. 

The Wildfire Disaster Funding Act supported by several Members of this Committee would make significant in-roads. It is time 

that we treat fire as the natural disaster that it is and adopt an 

approach which will allow the agency to invest in restoration activities that will over time save lives, property, natural resources, 

and money. Thank you. 

[The prepared statement of Mr. Bonnie follows:] 

PREPARED STATEMENT OF HON. ROBERT BONNIE, UNDER SECRETARY, NATURAL

RESOURCES AND ENVIRONMENT, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, 

D.C. 

Mr. Chairman, Ranking Member, and distinguished Members of the Committee, 

thank you for the opportunity to appear before you today to discuss the role of the 

Natural Resources Conservation Service (NRCS) and the Forest Service at the U.S. 

Department of Agriculture. My testimony today will focus on farm bill implementation; wildfire response; and strengthening rural communities through voluntary conservation, resilient landscapes and recreational opportunities. 

Farm Bill Implementation 

Implementation of the 2014 Farm Bill has been and will continue to be a priority 

across USDA. The new farm bill delivered a strong conservation title that makes 

robust investments to conserve and support America’s working lands and consolidates and streamlines programs to improve efficiency and encourage participation. 

For the Forest Service, the farm bill expanded current authorities and provided several new authorities including Good Neighbor Agreements, expanded insect and disease designations under the Healthy Forest Restoration Act, and permanently reauthorized stewardship contracting. NRCS is focusing on implementation of the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program 

(CSP), Agricultural Conservation Easement Program (ACEP), Regional Conservation Partnership Program (RCPP), and Voluntary Public Access and Habitat Incentive Program (VPA–HIP). 

Expanded Insect and Disease Designations 

The 2014 Farm Bill added authority to the Healthy Forest Restoration Act to authorize designation of insect and disease treatment areas and provide a categorical 

exclusion (CE) for insect and disease projects on areas as large as 3,000 acres. The 

Forest Service received letters from 36 states requesting designations under the insect and disease provisions and in response the Forest Service Chief designated approximately 46.7 million acres of National Forest System lands. Currently, 20 

projects have been proposed under the provision; the Forest Service intends to use 

the CE for 16 of the projects and streamlined Environmental Assessments for the 

remaining four. The initial 16 projects will help the agency and its partners better 

understand and implement the new CE authority while additional projects are proposed, planned, and authorized. The Forest Service expects that planning and implementation of projects within designated areas will expand in FY 2015 and beyond. 

Good Neighbor Agreement Authority 

The Forest Service completed the requirements under the Paperwork Reduction 

Act to approve the new Good Neighbor Agreement templates that will be used to 

carry out projects with the states. The Forest Service worked closely with the states 

to collaboratively develop the new templates, which were approved by the Office of 

Management and Budget on June 24, 2015. Since then, the agency has entered into 

agreements with Pennsylvania, Utah, and Wisconsin to carry out forest, rangeland 

and watershed health activities on the national forests in those states. 

40 

Stewardship Contracting 

The farm bill also provided permanent authority for stewardship contracting. Traditional timber sale contracts will continue to be a vital tool for the Forest Service 

in accomplishing management of the National Forests. At the same time, stewardship contracting is helping the Forest Service achieve land and natural resource 

management goals by funding forest health and restoration projects, stream restoration, hazardous fuel removal, and recreation improvements. In many areas, stewardship contracting will allow the agency to build larger projects, treating more acres, 

with broader public support. Since 2008, acres treated through stewardship contracts and agreements have nearly tripled. 

Conservation Stewardship Program 

Since CSP started in 2009, the program has become a major force for agricultural 

conservation, and it continues to inspire action to enhance America’s natural resources. All private or Tribal agricultural land and non-industrial private forestland 

is eligible, unless it is enrolled in the Conservation Reserve Program (CRP), ACEP— 

Wetlands Reserve Easements, or the Conservation Security Program. In FY 2014, 

NRCS enrolled about 9.6 million acres and now CSP enrollment exceeds 60 million 

acres, about the size of Iowa and Indiana combined. 

The CSP Interim Rule was published in November 2014, reflecting statutory 

changes to the acreage enrollment cap, stewardship levels, contract modifications, 

and CRP and certain easement land eligibility. NRCS received nearly 500 individual 

comments; most related to small operations having access to the program, minimum 

payments, contract rates, and stewardship thresholds. We expect to publish the 

final rule this fall. 

Environmental Quality Incentives Program 

Through EQIP, producers addressed their conservation needs on over 11 million 

acres in FY 2014. EQIP provides financial and technical assistance to agricultural 

producers to help plan and implement conservation practices that address natural 

resource concerns. Conservation practices are designed to improve soil, water, plant, 

animal, air and related resources on Tribal land, agricultural land, and non-industrial private forestland In FY 2014, over $928 million was obligated in nearly 40,000 

contracts to support this conservation work. EQIP has been instrumental in helping 

communities respond to drought as well, allocating $20million in 2015 for drought 

across the West. 

The EQIP Interim Rule was published in December 2014, reflecting statutory 

changes to incorporate the purposes of the former Wildlife Habitat Incentive Program and address the payment limitation and waiver authority, advance payments 

for historically under-served producers, and preferences to certain veteran farmers 

and ranchers. NRCS received over 330 individual comments; most related to the irrigation history, confined animal feeding operations, EQIP plan of operations, program administration, payment rates and limitations, application selection, and funding levels for wildlife practices. The final rule is targeted for publication in Fall 

2015. 

Conservation Innovation Grants 

Conservation Innovation Grants (CIG) are a component of the EQIP. They stimulate the development and adoption of innovative conservation approaches and technologies, while leveraging the Federal investment in environmental enhancement 

and protection in conjunction with agricultural production. CIG is used to apply or 

demonstrate previously proven technology in order to increase adoption with an emphasis on opportunities to scale proven, emerging conservation strategies. CIG funds 

projects targeting innovative on-the-ground conservation, including pilot projects 

and field demonstrations. In September 2014, NRCS awarded $15.7 million in CIG 

to 47 organizations that will help to accelerate innovation in private lands conservation. The FY 2015 Funding Announcement was released in January 2015 offering 

up to $20 million. Project selection is targeted for early Fall 2015. 

Agricultural Conservation Easement Program 

Landowners participating in the Agricultural Conservation Easement Program 

(ACEP) enrolled an estimated 143,833 acres of farmland, grasslands, and wetlands 

through 485 new ACEP easements (88,892 acres in Agricultural Land Easements, 

and 54,941 acres in Wetland Reserve Easements) with the $328 million in FY 2014 

funding. In FY 2015, $332 million is available in ACEP for the purchase of conservation easements to provide long-term protection of agricultural and wetland resources. 

The ACEP Interim Rule was published in February 2015, reflecting statutory 

changes to consolidate the purposes of Farm and Ranch Lands Protection Program, 

41 

Grassland Reserve Program (easement component only), and Wetlands Reserve Program and address the certification process for ACEP—Agricultural Land Easements; 

authority to subordinate, modify, or terminate an easement; grasslands of special 

environmental significance; and the agricultural land easement plan. NRCS is currently evaluating public comments and developing recommendations for the final 

rule. We expect to publish the final rule this winter. 

Regional Conservation Partnership Program 

The RCPP created a new platform for engaging partners and leveraging the Federal conservation investment. RCPP promotes coordination between NRCS and partners to deliver conservation assistance to producers and landowners. NRCS provides 

assistance to producers through partnership agreements and through program contracts or easement agreements. The first RCPP announcement of over $370 million 

in program funding was rolled out on May 27, 2014. Following a rigorous two-stage 

competitive process, 115 high-impact projects across all 50 states and the Commonwealth of Puerto Rico were selected in January 2015. Of those projects, $84 million 

is being used to fund high-impact conservation projects focused on water quantity 

and other drought-related resource concerns. The funded projects support many activities, from helping farmers improve their resilience to drought to protecting 

drinking water supplies. Partners brought forward an estimated $400 million in 

their own contributions for a total investment of nearly $800 million that will go 

to improve the nation’s water quality and supply, support wildlife habitat and enhance agricultural production and the environment. The FY 2016 funding announcement was released in May 2015, making available up to $235 million for new agreements. This round of RCPP will have an even greater emphasis on partnerships, 

leveraging, and diversity to achieve innovative solutions to locally identified issues. 

Selected pre-proposal applicants were notified on September 4th if their project was 

invited back for full proposal submission. 

Voluntary Public Access and Habitat Incentives Program 

The VPA–HIP assists states and Tribes to increase public access to private lands 

for wildlife-dependent recreation, such as hunting, fishing and hiking. In FY 2014, 

NRCS made $20 million available for VPA–HIP awards and was able to fund ten 

of the 30 proposals received. In February 2015, NRCS announced the availability 

of another $20 million for VPA–HIP projects. Project selections were announced on 

August 17 and funding was used to award grants to projects in 15 states. 

Mitigation Banking Program 

The Mitigation Banking program provision will be implemented directly through 

an announcement of program funding. The implementation approach is being finalized with an expected announcement in early Fall 2015. 

In addition to the major rule changes discussed above, minor statutory changes 

to Technical Service Providers; State Technical Committees; Healthy Forests Reserve Program; Small Watershed Program; Regional Equity; VPA–HIP, and Agricultural Management Assistance were published in a consolidated Interim Final Rule 

in August 2014. The few public comments received were addressed in the final rule 

published in April 2015. 

Managing Wildland Fires 

Increasingly severe fire seasons are one of the greatest challenges facing the nation’s forests. Already this fire season, we have spent weeks at National Preparedness Level 5—the highest level—meaning all available ground and air assets are 

committed to priority work. Severe drought across the west has increased fire severity in several states. Washington State, among others, has recorded a record season 

of severe wildfires. Drought-ridden California has also experienced tremendous fire 

activity. The Forest Service, in coordination with our fire response partners, mobilized thousands of firefighters along with numerous airtankers, helicopters, fire engines and other assets through our integrated, interagency suppression efforts. 

Every state and Puerto Rico, along with the military and international support, has 

provided people and equipment this season to respond to the severe fire activity. 

The Forest Service will continue to collaborate with its Federal, state, local, and 

Tribal governments, partners, and stakeholders on the implementation of the National Cohesive Wildland Fire Management Strategy. 

The Forest Service has one of the most effective fire organizations in the world 

and continues to keep almost 98 percent of the wildfires we fight very small. However, the few fires that do escape initial response tend to grow much larger far more 

42 

1http://www.fs.fed.us/about-agency/budget-performance/cost-fire-operations. 

quickly than ever before. As documented in a recently released report,1 the cost of 

fire suppression has soared in the past 20 years and is having a debilitating impact 

on the Forest Service budget and non-suppression activities of the Forest Service. 

In 1995, fire made up 16 percent of the Forest Service’s annual appropriated 

budget—this year, for the first time ever, more than 50 percent of the budget will 

be dedicated to fire. Along with this shift in resources, there has been a corresponding shift in staff, with a 39 percent reduction in all non-fire personnel. Left 

unchecked, the share of the budget devoted to fire in 2025 could exceed 67 percent. 

Restoring Fire-Adapted Ecosystems 

Fire plays a beneficial role in maintaining the ecological stability of many landscapes, and the Forest Service is working with partners to restore healthy, resilient, 

fire-adapted ecosystems. Our goal, especially near homes and communities, is to 

prepare forests and grasslands to resist stresses such as drought and recover from 

disturbances, including wildfires. Our large-scale restoration projects are designed 

in part to restore fire-adapted forest types across large landscapes, including the reintroduction of periodic wildland fire where safe and effective. 

Developing new markets for the low-value woody materials we remove during restoration and hazardous fuels treatments will help offset the costs of these activities 

while providing new revenue streams for private landowners and remains a top priority for the Forest Service. We will continue to provide grants and other forms of 

assistance for wood-to-energy initiatives, and to help projects compete for other 

sources of funding. We will also provide technical assistance to help facilities that 

convert wood to energy become or remain financially viable. 

Strengthening Rural Communities through Voluntary Conservation, Resilient Landscapes and Recreational Opportunities 

Our National Forest System presents a range of recreational opportunities to connect people with nature in an unmatched variety of settings and through a plethora 

of activities. Spending by visitors engaging in recreation activities, including skiing, 

hiking, hunting, and fishing, supports more jobs and economic output than any 

other activities on the National Forest System. In 2012, outdoor recreation on the 

National Forest System supported around 190,000 jobs and contributed about $13 

billion to the nation’s gross domestic product. 

Through work on the 193 million acres of National Forest System lands, the timber and forest products industries, livestock producers, and minerals/energy production collectively support about 118,000 jobs. Each year, these industries contribute 

about $11.5 billion to America’s gross domestic product. In rural areas in particular, 

these uses deliver sustained social and economic benefits to communities. 

The Forest Service works to build thriving communities across the nation by providing communities with the many economic benefits that result from sustainable 

multiple-use management of the National Forests and Grasslands, helping urban 

communities reconnect with the outdoors, and expanding the benefits that both 

rural and urban residents get from outdoor recreation. Jobs and economic benefits 

stem from our administration of the National Forest System, including its multiple 

uses, as well as from investments in the activities, access, and infrastructure needed 

to deliver essential public services such as clean water, electrical power, and outdoor 

recreational experiences. 

The right conservation practices put in the right places are an effective means to 

achieve cleaner more abundant water for farmers, ranchers, communities, and wildlife. Using farm bill programs through the Mississippi River Basin Initiative 

(MRBI), NRCS has invested significantly in high-priority water quality projects in 

the Basin delivering on the ground benefits. For example, as a result of MRBI conservation efforts, Arkansas was able to remove two stream segments from the 

State’s Clean Water Act 303(d) impairment designation. Working with partners and 

using farm bill tools, farmers, ranchers and other landowners have helped remove 

nine more streams from Oklahoma’s 303(d) list of impaired streams in 2014. Oklahoma ranks second in the nation for Environmental Protection Agency-recognized 

water quality success stories. In the region overlying the Ogallala Aquifer in the 

Central Plains, farm bill programs have allowed NRCS to partner with farmers to 

install water conservation practices that conserved an estimated 1.5 million acre 

feet of groundwater over 4 years, or enough water to provide annual water needs 

for about 3.3 million households. 

If the widespread drought has shown us anything, it is the value of crop resilience 

through good soil health management systems. Using farm bill programs, NRCS has 

been accelerating adoption of soil health practices and helping producers build resilVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
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ience in their production systems. Soil health management systems help increase 

organic matter, reduce soil compaction, improve nutrient storage and cycle and increase water infiltration and water availability to plants. These benefits lead to 

greater resiliency to adverse conditions but also boost yields. For example, a national survey of farmers documented an increase in yields of nine percent for corn 

following cover crops and ten percent for soybeans after cover crops. 

The StrikeForce for Rural Growth and Opportunity initiative targets farm bill 

programs in persistent poverty communities to assist farmers and ranchers in 

achieving economic and environmental objectives. Since 2010, NRCS and other 

USDA agencies have focused assistance and outreach in over 880 counties, parishes, 

boroughs, and Census areas, and in Indian reservations in 22 states. In FY 2014 

alone, NRCS invested $286 million in partnership with producers in high-poverty 

communities to help their operations be more economically successful and environmentally sustainable. For example, NRCS in partnership with Tuskegee University 

has invested about $1 million to help nearly 40 producers in Alabama StrikeForce 

counties to incorporate innovative practices on their farming operations, including 

retro-fits for current irrigation systems, new wells, solar powered wells, and drip irrigation systems that will make their operations more productive and sustainable. 

Conclusion 

We are now facing some of the greatest ecological challenges in our history: 

invasive species, climate change effects, regional drought and watershed degradation, fuel buildups and severe wildfires, habitat fragmentation and loss of open 

space, and devastating outbreaks of insects and disease. In response, we are working with our public and private partners to increase the pace and scale of ecological 

restoration and promote voluntary conservation that is creating healthy, resilient 

landscapes capable of sustaining and delivering clean air and water, habitat for 

wildlife, opportunities for outdoor recreation, and providing food and fiber for the 

world. The Forest Service and NRCS provide the programs and services that help 

strengthen agriculture, the environment, and rural economies. 

The CHAIRMAN. Thank you, Mr. Bonnie. 

I recognize myself for 5 minutes. 

Mr. Weller, could you talk to us a little bit about the mandate— 

mandate is one word—but our farmers and ranchers are constantly 

facing more and more regulations, and they all want to take care 

of the land. They all want to be good stewards of the land. Can you 

talk to us about your efforts trying to look at EQIP and RCPP programs in terms of trying to streamline those regulations and helping our producers and landowners who voluntarily want to comply, 

but we just keep layering on more regulations. 

Can you talk to us about your efforts in helping those folks to 

weave that complicated system we have put in place? 

Mr. WELLER. Yes, certainly, sir. So this Committee has afforded 

NRCS great tools. You talked about a few of them, the Environmental Quality Incentives Program, the new Regional Conservation 

Partnership Program, the basic authorities we have in our Soil Domestic Allotment Act go out and do conservation planning. 

And so there are examples now around the country, Under Secretary Bonnie referenced one of these a little bit, the sage-grouse 

work we are doing out West. It is not just out West. It is out in 

the Northeast. This last week we had a celebration in New Hampshire celebrating yet another species that through a collaborative 

voluntarily approach, landowners have helped head off the paths of 

potential listing in this case the New England cottontail rabbit. In 

the last 13 months alone, if you go around the country, starting 

last August in Montana, with the Arctic fluvial grayling, the Oregon chub in Oregon, the Louisiana black bear in Louisiana, the bistate population of sage-grouse in the border between California 

and Nevada, the New England cottontail rabbit. The list goes on 

and on, and those are all the species either taken off the list or preVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00047 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
44 

vented from getting on the endangered species list because of the 

proactive actions of farmers and ranchers and forest landowners, 

and in large part assisted through the programs and authorities 

this Committee provides in NRCS. 

Beyond ESA is the Clean Air Act in California. So under the 

Clean Air Act, in the San Joaquin Valley, one of the most heavily 

regulated air sheds in the world, agriculture is a regulated sector, 

and they were under a requirement to reduce the amount of nitrous oxide emissions, NOX emissions, and so they had to reduce 

emissions by 10 tons per day by the year 2017. Well, agriculture, 

through the help of the programs again this Committee provides 

our agency met that goal 3 years ahead of schedule. 

And so through the EQIP program that this Committee has af- forded us, we have invested over $120 million with voluntary actions in the San Joaquin Valley. And through the upgrading of diesel engines and retiring old tractors and off-road vehicles from operations, this Committee in the investment through EQIP has removed the equivalent of one million cars off the roads of California’s highways every years, in effect reducing 7 tons of NOX emissions per day, meeting the requirements 3 years ahead of schedule. 

So there are lots of examples around the country. Water quality 

in Arkansas, again is another example. Through EQIP assistance 

and conservation planning by targeting action working voluntarily 

with poultry producers in northwestern Arkansas, we have helped 

de-list two stream segments on the St. Francis River because of nutrient impairments, and those waters are now back to a fishable, 

swimmable condition because of the voluntary actions of farmers 

and ranchers. 

The CHAIRMAN. That is great information. Ms. Wagner, I try not 

to ask a question I don’t already know the answer to. We have Forest Service lands and we have National Parks which have a great 

deal of forests on them. Can you walk us through how those two 

are managed. Are they managed the same? And if they are not, do 

you guys talk to each other; your best practices, do they share 

those? I mean, how do you guys co-exist among the trees? 

Ms. WAGNER. The National Park Service is a Bureau within the 

Department of the Interior, and U.S. Forest Service, of course, is 

within the Department of Agriculture. We share many boundaries 

with the National Park Service. I can think of the Olympic National Forest as a good example on the Olympic Peninsula, which 

is surrounded by the Olympic National Forest. So the park and the 

forest are inextricably connected and connected with the communities that we serve, both on the forest and in the National Park. 

So we do a lot of collaborative work together. 

We coordinate well together. We share resources. We have authority from Congress called Service First which allows us to provide seamless visitor services so when people come into an office, 

they will be greeted by somebody and get information on both the 

National Park and the Forest Service. 

Our goals are a little bit different. The Park Service is focused 

on preservation and conservation. They interpret for visitors the 

scenic, cultural, historic values of a National Park. The National 

Forests are guided by the principles of multiple use management 

and sustained yield. So we like to think of the National Forests as 

45 

working landscapes, as places where people not only get the benefits that accrue from having public lands called National Forests, 

but also they see them as working to provide things like wood fiber, 

livestock grazing, minerals development, energy development. 

The CHAIRMAN. In terms of specifics, though, there is no real difference between a healthy forest on National Forest land and a 

healthy forest on a National Park. I understand the difference in 

what the Park Service is doing, but do they manage their forests 

to a healthy level the way you do? 

Ms. WAGNER. In the National Park Service they have a much 

more limited footprint in terms of active management of forests, 

though they do some hazardous fuels treatment and do manage forests to some degree by use of prescribed fire and natural fire in 

their parks. We tend to take a little bit more of a working stance 

on National Forests where we have timber sale contracts, stewardship contracts, as tools to help create resiliency in those forests. 

The CHAIRMAN. Thank you. Mr. Peterson, for 5 minutes. 

Mr. PETERSON. Thank you, Mr. Chairman. 

Mr. Weller, as you are aware, the interest in my district of this 

small watershed program and the implementation, I don’t know exactly what is going on, but I am getting the feedback from my district that things are not going as smoothly as people think they 

should. 

I don’t know what you are hearing about it or whether this is an 

issue of not having enough staffing or just what is going on. It was 

initially moving pretty good, but now reports are that it is kind of 

bogged down. Have you gotten any feedback? 

Mr. WELLER. Some feedback. There are a couple things happening. As you know, 20 years ago, 30 years ago, we had a much 

more robust watershed operations program. We had a lot more capacity. In our states we had engineering teams, whether it is Minnesota or throughout the country, where they really were experts 

at designing, building, constructing. In the end, ultimate zeroing 

out of the program, a lot of that capacity now is no longer—within 

each state, so now a lot of the capacity we have is a National 

Water Management Center. 

So while we still have in some states some residual capacity, particularly focused on a rehabilitation program this Committee has 

funded and we have had some success with over the last few years. 

With respect to the project in Red River and partnering with the 

authority, what I have been told there is that in Minnesota, there 

were 14 separate agreements or projects that are ongoing. And in 

North Dakota there are about six that are overall working as a system with the whole authority’s plan to address the funding concerns. 

So out of those, what I have been told is that 13 out of the 14 

agreements, these are with the cooperative agreements that actually start the work, are now with the partners for signature and 

review. Five of the six in North Dakota again are with the relevant 

partners for their signature and review. We hope within the next 

30 to 60 days they will all be signed and be able to roll at that 

point. In the end it just comes back to where I started with that 

is the capacity. 

46 

And so the authority and the partners there really should be 

commended with having everything ready to roll, and there is a lot 

of positive energy and they want to get a lot done. As to what you 

are sensing is a little bit on our end it is a bandwidth issue, and 

that is why we are having to bring in people from the national 

level and the National Water Management Center, as well as from 

national headquarters here, our national engineering team, to help 

support the folks in Minnesota and North Dakota to make sure we 

don’t have choke points where we don’t get in the way of the partners who want to proceed. 

Mr. PETERSON. So you think 30 to 60 days we will have—— 

Mr. WELLER. We will have all the agreements signed, sewn up. 

Mr. PETERSON. I appreciate the initiatives to improve foraging 

habitat for pollinators and especially this focus on honey bees. 

However, many of these plans apparently require the use of native 

plants only. In fact, I have had some personal experience with trying to plant some pollinator habitat. By doing that the feedstocks 

are hugely expensive, and they are very hard to get established. I 

have seen a number of these where they have attempted and the 

flowering stuff in a lot of cases doesn’t survive. 

So I guess why aren’t we more focused on using non-native 

plants like clovers and alfalfa and vetch and sunflowers where the 

seeds are a lot more available, a lot less expensive. It is a lot more 

easy to establish. Why aren’t we more focused on that, and why are 

we kind of hung up on all this native idea? 

Mr. WELLER. So at the national level, we do not prescribe a mandate to use native, and we don’t prescribe the cocktails of the seeding mixtures. That is something we really allow our states because 

they are the closest to our customers and the closest to what is 

needed. 

Mr. PETERSON. I get the impression from the state that they are 

being told by you guys. 

Mr. WELLER. That is something we need to follow up with Minnesota on. There have been some recent discussions on this, and 

I have asked our National Plant Material Center folks and our 

ecologists who are working on this, and what they have advised me 

on is that while natives are sometimes preferable, there is not a 

mandate to use natives. And a lot of times non-natives, to your 

point, alfalfa and clover, sunflowers, other species, are less costly, 

provide very good forage habitat, and are more appropriate. 

That is where then we really want to provide the flexibility for 

the local conservation planner to work with the producer to really 

figure out what is the right cost and performance they want. 

Mr. PETERSON. But if you are going to plant pollinator habitat, 

you are not going to be allowed to plant these non-natives. You are 

going to have to plant this mixture that they have under the NRCS 

CSP program and so forth. That is coming from the Federal, right, 

or from the top? 

Mr. WELLER. So we have enhancements, yes, under Conservation 

Stewardship Program. But if they are specific enhancements focused on whether it is for—there are different types of pollinator 

habitat. So for honey bee habitat, yes, alfalfa and clovers are a very 

good varietal you want to plant but there are other pollinators that 

you are concerned about that are native then they are going to be 

47 

adapted to and prefer native plantings, so it really depends upon 

what is the species that you are trying to provide the best habitat 

for. 

Mr. PETERSON. Thank you, very much. 

The CHAIRMAN. The gentleman yields back. Mr. Neugebauer, for 

5 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. Mr. Weller, Chief 

Weller, I was so glad to hear you talk a little bit about the endangered species and Fish and Wildlife. As you know, earlier this 

month, a Federal judge overturned the listing of the lesser prairie 

chicken because they found that Fish and Wildlife had not followed 

its own rules in evaluating the conservation efforts when it added 

the species to the threatened list. And by the way, I completely 

agree with that judge. I know that NRCS operates one of those conservation efforts so with the lesser prairie chicken initiative which 

works with the Western Association of Fish and Wildlife Agencies, 

which has been a very successful program, by the way. 

So the question I have is that initiative started back in 2010, I 

believe. So the first question I have, did Fish and Wildlife confer 

with NRCS about their efforts prior to the listing? 

Mr. WELLER. Yes, we did as an agency, NRCS provided to the 

Fish and Wildlife Service information on the extent and the scale 

of the conservation investments that we had made in partnership 

with the producers. So my understanding is the Fish and Wildlife 

Service did take into consideration the NRCS contributions to the 

protection of the habitat. 

Mr. NEUGEBAUER. And was that data based on, hey, we are having some success here? Give me a little idea of the kinds of information that you furnished them. 

Mr. WELLER. So what we are trying to then roll up across the 

multi-state region that is important for the prairie chicken, much 

like we are doing with the sage-grouse, talk about the acreage, the 

locations of the acreage, the type of practices we have in place. But 

what is also in the partnership with Fish and Wildlife Service, 

what we did is we also then tried to identify what are the best 

practices to actually help the prairie chicken but then also work in 

a working lands landscape. 

So we identified 40 different practices that we felt were the best 

for whether you are a farmer or rancher that would also then benefit prairie chickens. Because we have done that pre-consultative 

with Fish and Wildlife Service, then we would come back and say 

we had several hundred producers using the preapproved practices 

that you agreed benefit the chickens. Here is then the benefits that 

roll up in terms of improved forage for the chickens, improved habitat. So we did some work ahead of the listing, but then when they 

were proceeding with their analysis, we provided them the data in 

terms of participation, acreage, and investments. 

Mr. NEUGEBAUER. Why do you think—you were talking about the 

successes that you have had where you had some of these other 

partnerships in place. It is my understanding this is one of the 

larger partnerships and involves a lot more private land than some 

of the other ones. Why do you think that the Fish and Wildlife decided to proceed with that after you presented them with that 

data? 

48 

Mr. WELLER. It has been, I completely commend the ranchers 

and the farmers in Texas, Oklahoma, Kansas, New Mexico, and 

Colorado that contributed to this effort. They really have stepped 

forward and been very proactive. I can’t speak to why in the end 

Fish and Wildlife Service made the decision. They make the analysis they have, the trends they are looking at, and in the end it 

is a trust species that they are responsible for protecting; and that 

is not something NRCS was privy to or I can’t necessarily speak 

to what ultimately led to that decision. 

Mr. NEUGEBAUER. Wouldn’t you say there is a tremendous 

amount of benefit for having these kind of partnerships and coalitions? 

Mr. WELLER. Absolutely, yes. 

Mr. NEUGEBAUER. I think the concern I have is that this has 

been very successful. Since 2014, the population has increased 20 

percent in just 1 year. I think some of that is conservation efforts. 

Obviously, we started getting a little rain. 

What I am more concerned about is the disincentive that this 

kind of action sets where you go out and enter into these partnerships and bring these coalitions together, and the reward that they 

get for that behavior is that the Fish and Wildlife Service goes 

ahead and decides to list that. So I want to make sure you are 

doing everything you can to make sure that they have good science, 

good information, if you are working with these partnerships. 

Mr. WELLER. Well one of the things, sir, I would just want to 

highlight is I agree with you, and that is a big concern. And so a 

lot of confusion, if not fear, around ESA, and so what we try to do 

with the lesser prairie chicken but also with sage-grouse and five 

other species around the country, is this concept of regulatory certainty, predictability; and what we are doing with the chickens is 

if you are a rancher and you want help, you come in and visit with 

your local NRCS. We will come out to your ranch, and we will provide you a conservation plan, which will look at the specific threat 

to the chickens. And as long as you are managing your ranch using 

that conservation plan, you don’t even have to go into a contract 

with us. You can do it on your own. You don’t need to work with 

the government any more. 

As long as you are managing your ranch according to that plan, 

what Fish and Wildlife Service has then said is that you get at 

least 30 years of certainty that you are not going to be asked to 

do anything more for the chicken basically because you have been 

recognized for your excellent stewardship. 

So we are trying to reward folks, to your point, who are willing 

to voluntarily take proactive actions benefit the ranch, but also in 

this case benefit at-risk species, they should get something in return, and that is to be able to sleep at night not worrying about 

ESA. 

Mr. NEUGEBAUER. Well, I appreciate the regulatory certainty. I 

think the bigger bonus and the bigger incentive for cooperation is 

that if agencies and individuals and corporations and farmers and 

ranchers are working towards a reasonable conservation plan, that 

we should leave it at that. 

Mr. THOMPSON [presiding.] Mr. Scott from Georgia. 

49 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. I would 

follow-up with that and say somebody from the farm—I remember 

the time when if you found a problem, you actually would call 

somebody from the government because you wanted help. Now I 

can assure you that that is the last person that most farmers want 

to call. When it comes to conservation, that is a problem. People 

don’t trust us when we talk about prairie chickens and other 

things. It seems to me that it is not about the chicken as much as 

it is about stopping other industries in certain areas. 

I would just ask the one thing that we have heard about a lot 

recently, Waters of the U.S., what do you expect the workload for 

your agency to be if Waters of the U.S. becomes the system that 

you have to operate under? 

Mr. WELLER. So first let me start with workload, and I will get 

to your question about the Clean Water Rule, Waters of the U.S. 

rule. In terms of workload, we have a lot. I am really proud of how 

much NRCS has stepped forward with the 2014 Farm Bill. In a 

matter of literally weeks after it was enacted into law we were 

ready to roll. We had EQIP stood up and running. We had CSP 

stood up and running. We did a nationwide sign-up. We got another 10 million acres enrolled. We launched the new RCPP in a 

matter of months. And that is on top of fewer people. So because 

of sequestration cuts, today there are 1,500 fewer professional 

NRCS employees than there were just 4 years ago. So we have a 

lot of workload. 

In regards to your question on the Clean Water Rule, at the end 

this is an EPA/Army Corps of Engineers rule. What we offer our 

customers when they want to work with us is advice. The Clean 

Water Rule will not impact our work. What we do is conservation 

compliance, but more importantly we do conservation planning and 

implementation of farm bill conservation programs. 

And the Clean Water Rule does not impact any of those authorities. So in instances where a producer is taking out a fence row, 

cutting some trees, making alterations on their operation, and our 

field folks think, well, maybe this is something you may need a 

field permit for, we would then recommend they go talk to the relevant Corps office. That is not something we would necessarily advise them on how to do it, how to fill out the permit, whether they 

are under jurisdiction or not. 

Mr. AUSTIN SCOTT of Georgia. Let me interrupt for a second. But 

you would agree that a lot of the reasons for the programs that we 

have through your agency is so that there would be a way to reduce the need for more regulations. Is that a fair statement? 

Mr. WELLER. It is a complex environment. Regulations, yes. It is 

a complex environment, particularly not just in Georgia, a lot of 

different states. And so where our folks are trying to help our customers navigate that, yes, it is challenging. 

Mr. AUSTIN SCOTT of Georgia. Mr. Chairman, I don’t have any 

further questions. I would just say it seems to me we have one 

agency telling another agency what they can and can’t do, and then 

a tremendous amount of fear out there with the American citizens 

that, quite honestly, most of us want to take care of the environment, but I can tell you if I found something that I thought might 

be an endangered species on my property, I sure wouldn’t call the 

50 

Federal Government and let them know about it. With that, I yield 

the remainder of my time. 

The CHAIRMAN [presiding.] Probably not a bad idea before you 

get yourself in trouble confessing to something you didn’t want to 

confess to. The gentleman yields back. Mr. Crawford, for 5 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. In Arkansas, the 

Mississippi River Basin Initiative has been a very effective program in giving people at the state and local levels the kind of tools 

that they need to deal with conservation challenges, particularly 

specific to our region. You actually mentioned that in your comments earlier. 

In the 2014 Farm Bill, though, we created the RCPP, which we 

had hoped would expand on that success, but it looks like a lot of 

the policies in the MRBI have been reversed, and I am being told 

there is actually a lot less local control and more deference to national groups in what types of conservation activities should be 

funded. Why the change in direction? 

Mr. WELLER. So with RCPP, I am a little bit surprised by your 

comments, sir, in that it really affords maximum control to those 

partners. 

Mr. CRAWFORD. If that is the case, why would I be hearing from 

my folks at home? We have two projects in particular that fall 

under this, and we are not hearing positive feedback with respect 

to local control. 

Mr. WELLER. Then that is a real concern, and I need to follow 

up with the Arkansas State Conservationist, because the whole 

purpose of the program is to put the partners in at least a co-equal 

lead with NRCS, if not in the lead, to devise the project, to design 

what needs to happen, and then to really deliver the assistance as 

needed. 

There are different pots. There are different funding pools. There 

is a national pool. There are what are called critical conservation 

areas, and then there is the state pool. And applicants from within 

Arkansas itself can focus on projects just specific to certain communities, counties in Arkansas; or it could be a multi-state project 

that would include Arkansas and perhaps Louisiana and Mississippi or go up river, up in Missouri. 

So it depends on what the purpose of the original project was. 

It is a very competitive program. But in the end if there is a concern from local folks that there is less local control than there was 

previously, that is something I need to follow up with Arkansas on. 

Mr. CRAWFORD. Perhaps we can communicate offline and address 

that problem. 

Mr. WELLER. Yes, sir. 

Mr. CRAWFORD. Let me expand on something that my colleague 

from Georgia mentioned. The perception at home among farmers, 

the NRCS has been up to this point the kind of agency that farmers felt comfortable with in terms of asking for help, technical help, 

funding help; for example, surface water retention projects, 

tailwater recovery, irrigation reservoirs and things like that. Not 

only did they get technical consult, but in many cases were able to 

secure funding not necessarily in total, but cost-share on a lot of 

projects. I have seen these projects. 

I have seen these projects, and they are great projects. 

51 

But because of WOTUS, the perception at home is now the 

NRCS has been roped into this regulatory role that has fundamentally redefined the dynamic of the relationship between the NRCS 

and farmers. Your thoughts on that? 

Mr. WELLER. It is an unfortunate view. In my experience, in my 

opinion, our role has not changed at all, and we need to do a better 

job of communicating what our role is. 

Mr. CRAWFORD. Okay. So from a perspective of WOTUS, you 

have no regulatory authority under WOTUS at all? 

Mr. WELLER. We do not, no. 

Mr. CRAWFORD. Okay. The perception is that you do, and I am 

still not convinced that in some form or fashion, that you don’t, in 

some way, have a roundabout, maybe a reporting requirement or 

something like that that may possibly impact the relationships that 

up to this point, farmers have found very favorable. The NRCS has 

been a very good agency to work with up to this point. 

But I just want you to know that the perspective of farmers, at 

least in my district, is that the trust there is not going to be there 

anymore, because of the relationship to the EPA and WOTUS. 

Mr. WELLER. So to your point, sir, we hold the information that 

a producer gives us voluntarily as sacrosanct. And this Committee 

gives us privacy provisions that are even more strenuous than 

other agencies. A lot of other agencies wish they had privacy protections that USDA has with our customers. We don’t share that 

with anyone. 

Mr. CRAWFORD. Okay. Let me ask you this—I only have 30 seconds left—can you tell me, unequivocally that you don’t have any 

requirement to report to the EPA under any circumstance as it applies to WOTUS or potential violation or a significant nexus or 

connectivity or anything like that? 

Mr. WELLER. Unequivocally, we do not report our customers to 

EPA. In fact, yesterday, in the Chesapeake Bay region, we were 

highlighted by the newspaper because three states in the Chesapeake Bay region, their departments of environmental quality are 

calling us out for not cooperating, for giving them farmers’ information. 

Mr. CRAWFORD. Okay. 

Mr. WELLER. So we do not share information on farmers with 

regulatory agencies. 

Mr. CRAWFORD. All right. Thank you. I appreciate that. My time 

has expired. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Allen, 5 minutes. 

Mr. ALLEN. Thank you, Mr. Chairman. 

And just real quickly, the RCCP program I have constituents 

that, with the new farm program, there is an opt-out provision in 

the new farm program. And I have been trying to get an answer 

from USDA on this thing for some time, and the last thing we 

heard from them was that they can’t opt out because the loblolly 

pine is now considered a hardwood. How did the loblolly pine get 

to be a hardwood? 

Mr. WELLER. I am going to defer to my Under Secretary, who is 

an expert in trees. But what I know, it is not hardwood. That is 

the first I have heard that, sir. I could look into what is going on. 

52 

Mr. ALLEN. Okay. Good. Well, maybe we could have a discussion 

about that because you all are in the forestry business. And I don’t 

know how that happened, but anyway, that was the letter that 

they received from the USDA is they could not opt out because the 

loblolly is now considered a hardwood. And so, well, that is good. 

I am glad that you all know that that is the case. That is wonderful 

news. 

Also, real quickly, you had announced the final projects for consideration for the Regional Conservative Partnership Program, 

RCPP, second signup. What lessons have you learned from the first 

signup, and what types of partners are participating in these 

projects? Are the goals of the program being met? And what 

changes do you think Congress needs to make with regards to this 

program? 

Mr. WELLER. So the first round, as I said a little bit earlier to 

your previous question, we are moving, for us, at a pretty quick 

pace. And as a result, we didn’t leave a lot of time for partners to 

put proposals together. I think we caught people flatfooted. They 

didn’t expect us to move as fast as we did. And then we only gave 

them 45 days to throw together a proposal, and then they didn’t 

have a lot of time. 

So that was the first thing we learned is that we needed to give 

everyone, starting with ourselves, but more importantly the partners, more time to put together comprehensive projects, to call different partners to the table, and really design something they really want to invest in. And that then also gives them more time to 

leverage. 

So what we are seeing with the second round, what we invited 

back out of 265 applications this next time, we invited back 164 

projects, at least one in every state. Most states had several. And 

what we saw is a higher level of quality in terms of what people 

were proposing, because they had more time. They had more experience. They had a feel for how the program works, and, in some 

cases, how it doesn’t. 

And so people were even more careful in devising really what 

they want to do. So if you are worried about fish passage in the 

Northwest, if you are worried about soil quality, if you are worried 

about irrigation efficiency, if you are worried about endangered 

species habitat, they really were careful about designing projects 

that would really bring a solution for their community, for their 

area. And then what was very impressive is they had a lot of 

matching contributions. 

So in this next round, while out of the 164 we invited back, the 

total what their request is from the Federal Government from 

NRCS is about $540 million. They are actually bringing to the 

table a total potential contribution of $780 million, so well over a 

one-to-one match, which is really impressive, which just shows 

there is a real pent-up demand out there for this type of assistance. 

And when you, as an agency, step back and you invite people to 

the table to design their own project, to really take the lead, it is 

impressive what people bring forward. 

Mr. ALLEN. And to follow up on that, because we have heard 

comments about there seems to be some disconnect out there. Of 

course, we go out in our districts, we have town hall meetings. Do 

53 

you have listening sessions throughout the country with different 

farm agencies as far as what our farmers are having to deal with 

out there versus what you are demanding that they do? 

Mr. WELLER. Absolutely. In every state, we have what are called 

a state technical committee where they meet once a month and 

they invite in farm organizations, the public state agencies, conservation groups, and they really talk about what are the priorities 

in a given state. So what are their concerns, whether it is drought, 

whether it is disease, pests, soil erosion. It is a forum for the agricultural industry to really talk directly to NRCS to say what their 

priorities are, where they need help, and they meet regularly. 

I personally get out and meet with farm groups. I travel a lot. 

Wherever I go, I always want to meet with local producers but also 

state associations. We have a national leadership team. They are 

constantly engaging with regional groups, state associations, corn 

grower association, cattlemen associations—you name it. We really 

want to stay very connected to our customers. 

Mr. ALLEN. Well, as a son of a farmer, our farmers want to protect the land, the forest. That is how they make their living. And 

so we can work on that collaboration and do a much better job. 

Thank you. 

I yield back. 

Mr. WELLER. We will find out about soft wood becoming hardwood, sir. 

Mr. ALLEN. Good. I am glad I got you recorded on that. 

The CHAIRMAN. I think there would be a lot of people interested 

in how you convert loblolly pine to hardwood. 

Mr. Abraham, 5 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. 

Chief Wagner, I will ask you this question, but certainly the 

other two may have answers. Hurricane Katrina hit Louisiana 

about 10 years ago. We just, unfortunately, recognized that 10 year 

anniversary. Forest Service came in, did an NEPA study within 60 

days. I think within a month or 2, we were salvaging timber. 

Things were working well, a very efficient process. 

And I guess the question is, why has the timeline now gone from 

the 2 months to over a year for an environmental analysis? Because I have people in my district that are asking for an analysis, 

and it has been over a year in some cases. So what is the difference 

between 10 years ago, 2 month timeline for environmental analysis, and now over a year? Is there different personnel? What is 

going on? 

Ms. WAGNER. It may be that with a situation that Hurricane 

Katrina brought on the landscape, we had provisions to deal with 

emergency treatment and—— 

Mr. ABRAHAM. But, if I remember right, and I can certainly look 

back, that that contract was done without any extraordinary 

clauses in the contract. It was just a, pretty much a normal day 

at the office, so to speak, as far as getting that done within that 

2 month period. 

Ms. WAGNER. And so is it comparing emergency response to just 

basic forest management and forest restoration today that you 

are—— 

54 

Mr. ABRAHAM. I think that is the point, is back 10 years ago 

when the Forest Service came in, there were no extraordinary 

clauses, so it wasn’t designated as an emergency response even 

though we all know it was. But we move forward 10 years and 

now, also not deemed an emergency response. It has taken well 

over a year just to get the analysis back. And I am just asking for 

my constituents, because we get the calls, what is the difference? 

How can we facilitate to expedite that process for you guys? 

Ms. WAGNER. Excellent question. We are very committed to using 

all of the tools available to us under the National Environmental 

Policy Act to act quickly, to be adaptive, to use the right kind of 

analysis for the right kind of situation. We found that in the last 

4 years, we have actually reduced the number of NEPA analyses 

done and decisions done, so we are getting better at larger-scale, 

fewer decisions. And we are reducing the amount of time. 

Now, that is nationally. I would be happy to follow up and get 

you some more detail relative to—— 

Mr. ABRAHAM. I appreciate that. We have some issues down in 

the southern part of my district. Their perception is that they are 

getting stonewalled, and I would just like to give them a good, logical explanation to open up the discussion. 

Another question that whoever wants to answer. I understand 

the Chairman here and Chairman Lamar Smith back on the 1st of 

July this year requested documents on the EPA’s recent NAAQS 

rule and its effect on the Forest Service burning. My understanding, and please correct me if I am wrong, that they got a response but they haven’t received any documents. Is there any timetable as to when those documents may be forthcoming on this 

NAAQS rule? 

Mr. BONNIE. I know the issue here is the ozone rule, right, and 

the potential impacts on prescribed fire. 

Mr. ABRAHAM. Right. Right. Yes, on the controlled burn. 

Mr. BONNIE. I don’t know the exact—I know we have provided 

a good bit of information to you all. We would be happy to go back 

and check and make sure we have been responsive to your requests. I will say, lots of conversations back and forth with EPA 

on how to deal with this so that we can invest and prescribe fire. 

Mr. ABRAHAM. I appreciate that. 

And Chief Weller, I will ask you, what is the current backlog for 

wetlands right now and the determinations as to what determines 

a wetland or not, and how is that being handled? 

Mr. WELLER. We have made a lot of investments in accelerating 

in trying to reduce the backlog. Nationally, off the top of my head, 

I do not know. I know where there has been a lot of focus is a little 

bit north of this area, up in the Prairie Pothole Region, where there 

has been a lot of focus of this Committee and a lot of Members. The 

current backlog there is around 4,000. That sounds like a lot and 

it is. It is not acceptable. But where we were, 3 years ago, is the 

high as 12,000. 

But what also folks have to understand is we have, since that 

time, not only made a lot of progress, but we have also processed 

tens of thousands of requests. So over that time period has well 

been over 60,000 wetland determinations we have made in that 

55 

time, just in the Prairie Pothole Region, plus reduced the backlog 

from 12,000 down to 4,000. 

So it is sort of like being on a treadmill that is set at sprint pace 

and still standing on the treadmill, if not getting closer to the controls to hopefully hit the stop button. So we are making progress, 

and we are on the track to get rid of the backlog within the next 

2 years. 

Mr. ABRAHAM. Great. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Mr. Yoho, 5 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. 

I appreciate you all being here today. 

Mr. Bonnie, you were talking about there were some practices 

that you would recommend to prevent or decrease the negative effect of forest fires. What are those? And then the second question 

is, why aren’t they being done now, and what do you need to facilitate that? 

Mr. BONNIE. So we have increased the number of acres for treating across the National Forest System. We are doing more projects 

out on the ground through collaborative, larger-scale efforts. 

Mr. YOHO. Projects like controlled burns? 

Mr. BONNIE. Doing more prescribed fire, but as well, thinning 

treatments, other types of restoration to remove underbrush, smalldiameter timber. As you know, in your part of the world, we have 

taken fire out of a lot of the ecosystems. In addition to getting the 

fire back in, we also need to do a lot of mechanical treatment and 

thinning, and we are trying to do that in a collaborative, largerscale effort to increase both the number of acres treated and the 

amount of board-feet that come off of the National Forests. 

Mr. YOHO. Okay. I live in the Southeast and we are blessed, I 

mean, pine trees grow in 15, 20 years, whereas out West it is a different story. And we do a really good job in the managing of the 

forest. And one of the things we see out West, you have the high 

wind velocities and all that and it is harder to do your prescribed 

burns. What are you doing to address that situation? 

And along with that, we have heard from a lot of the loggers that 

they can’t go in and harvest the board-feet that is already down. 

I don’t know if it is the rules and regulations of the permitting 

process, but there is a lot of timber that is down that could be utilized that is not and that leads to the underbrush in the fire. What 

are you doing to alleviate that and expedite that process? 

Mr. BONNIE. So let me hit the salvage piece first. There are a 

number of things we can do—to get at a little bit the question earlier—using some expedited procedures to try and move, particularly near roads and trails, timber that can cause a safety problem. 

We moved a 300 million board-foot salvage sale in the wake of 

the 2013 Rim Fire out on the Stanislaus through an expedited 

NEPA process. We are trying to pilot efforts to do large-scale salvage operations in places like that. We will have a significant salvage issue in the wake of this fire season, and so we are looking 

at ways to be creative to move those but to do it with the best 

sound science as well. 

56 

Mr. YOHO. You just created another question for me. When you 

are doing that and you are going down that road to harvest those 

down trees, do you run into issues with the EPA and you are fighting against them, or Army Corps or any other agency? 

Mr. BONNIE. No. 

Mr. YOHO. All right. So nobody else is restricting you, right? 

Mr. BONNIE. No. The bigger issue for us is to build a collaborative effort to bring environmentalists, timber industries, and others to the table so that we can create these larger-scale projects 

that will have more public support. 

Mr. YOHO. All right. You brought up the environmentalists, and 

I want to go back to what Mr. Scott brought up when he bowed 

out gracefully early. I have the same problem in my district. I 

mean, we have gopher tortoises, we have the rattlesnakes, we have 

the fox squirrels, and we have farmers that have farmed for generations, 100 year farms. And they have pretty much the same 

practices, obviously have gotten better at best management practices. 

But yet, now the government comes in and says, well, we need 

to monitor these fox squirrels or this. And the farmers don’t want 

anything to do with it because they come in, they being the government, say, ‘‘We are here to help you,’’ and we all know how they 

run from that. And we are seeing the same thing. It is, We don’t 

want your help. Whereas before, people came to the government. 

And that is an attitude change. And you brought up the environmentalists, and yes, we want the clean environment, we want clean 

water, and we want clean air, but sometimes there is a political 

agenda that we see driving a lot of this that is counterintuitive or 

productive to our producers who are out there trying to make a living. And it increases the costs and it reduces the usability of their 

land. And that is something I hope you guys take back in your discussions and say a little bit of this is good, but a little bit is too 

much. We need to back off here. 

I have another question I wanted to ask. On the lands that are 

going into the easements and the conservation easement, and Mr. 

Weller, feel free to weigh in on this. What is the percentage of land 

that has gone from the private sector back to the government and 

off the payrolls? Because what we are seeing in our state is we see 

a lot of this being put into the conservation easements. And I don’t 

want to get in a situation in my state where we have PILT payments, payment in lieu of taxes, and that lands are off the tax 

rolls. 

Mr. WELLER. So nationally, NRCS has either co-invested with 

other land trusts and state agencies or on its own through the wetland programs about 4 million acres of conservation easements. 

Most of those are permanent, or is the maximum allowed under 

state law. Those are still taxed but they are just at a reduced rate. 

So it is no longer taxed at the development potential. So if it was 

converted from an ag use to non-ag use, you understand probably 

better than I do. It is less of a PILT issue in terms of just not having any taxes at all come off those lands. 

Mr. YOHO. I yield back. I am out of time, Mr. Chairman. Thank 

you. 

The CHAIRMAN. Sure. The gentleman yields back. 

57 

Mr. Thompson, 5 minutes. 

Mr. THOMPSON. Thank you, Mr. Chairman. 

Mr. Bonnie, it is good to see you. I want to follow up on the catastrophic wildfire season. It has been a terrible season, obviously, 

and the loss of life of some very outstanding Forest Service employees. We are certainly keeping them and their families in our 

thoughts and prayers. 

The Administration has been very vocal for the need to provide 

more funding to combat wildfires and also to stop fire borrowing 

from the Forest Service budget. As a matter of fact, I see there is 

a press release today regarding the Administration’s letter to Congress addressing the budget issue. And I agree there needs to be 

a solution, but fixing the budget is not the final solution, certainly 

not the full solution. However, addressing fire borrowing will not 

solve the issue. 

It is also very important the Forest Service have the ability to 

expediently treat National Forest acres for forest health and wild 

fire prevention. The Committee passed through the House H.R. 

2647, the Resilient Federal Forest Act of 2015. Now, the legislation 

was an earnest attempt to give the Forest Service more authority 

and much needed flexibility to deal with these challenges of process 

funding, litigation, necessary timber harvesting, and much needed 

act of management. 

Now, the Obama Administration strongly opposes this legislation, despite the fact in your testimony when you were talking just 

most recently about a fire. You were using words that were in that 

bill, collaborative, expedited, NEPA. I mean, you were kind of describing the bill that your boss or your boss’ boss opposes, I guess, 

or you oppose. And so can you explain the Administration’s opposition to the bill? 

Mr. BONNIE. I am happy to. So first, the most important thing 

we can do to increase pace and scale is clearly to fix the budget. 

Our criticism of the budget provisions in the legislation is that they 

don’t go far enough. You have done a good job of solving the transfer problem, but the long-term impact of fire in our budget, we expect that in 10 years we will spend not 50 percent like we do now 

on fire programs, but 2⁄3 of our budget. That is going to impact our 

ability to do all kind of things, including restoration. 

Mr. THOMPSON. So let me cut to then—I get it. You want more 

money. Is there anything in this legislation or are there other ideas 

the Administration can support—and I am going to say beyond 

money, okay. Not to say that we don’t need to look at that, but I 

am looking for ideas beyond that that would assist the Forest Service in actively treating forest acres? 

Mr. BONNIE. Absolutely. We welcome the conversation. As the 

Statement of Administration Policy said, we have some concerns 

with sort of the design and scale of some of the provisions related 

to NEPA, some other things. But we are willing to have a conversation. I put things maybe in a few different buckets. One is a conversation about NEPA categorical exclusions, maybe similar to the 

insect and disease provisions. 

Mr. THOMPSON. I think we had categorical exclusions in this bill 

that you oppose. 

58 

Mr. BONNIE. I think we would design them differently. Second, 

there are things we can do to promote larger landscape scale 

projects. There are some things there we can do. Promoting markets is another key thing that we can do. There may be some flexibility around—— 

Mr. THOMPSON. I agree wholeheartedly. But this was a forest 

management bill. Certainly markets and doing things to increase 

value timber to support the markets, those are the things we can 

do and certainly are going in the trade agreements being negotiated. But I still—you are not convincing me—I haven’t heard a 

good reason to oppose this bill yet. 

Mr. BONNIE. Well, I guess my message to you would be, we have 

to do a lot more on the budget side, and the budget piece we design 

is budget neutral. 

Mr. THOMPSON. Yes. Let me share some numbers with you. And 

these are numbers actually from your testimony or from, maybe it 

was a press release, but although you made reference to it. 1995, 

1⁄6 of the Forest Service budget was used for fighting forest fires; 

August of 2015, 1⁄2 the budget, and then you made a projection for 

the future. 

I would happen to agree with you, the trajectory we are on. And 

I know part of it is warmer temperatures, but part of it is just sort 

of allowing the fuel load to build up way too high. 

Mr. BONNIE. Absolutely. 

Mr. THOMPSON. I want to go back and readdress the numbers. 

1995, where you spent 1⁄6 the Forest Service budget, you harvested 

3.8 billion board-feet. Just in 1987, prior to that, 7 years prior we 

harvested 12.7 billion board-feet. In August of 2015, where this 

year, 1⁄2 the Forest Service budget is consumed in wildfire fighting, 

you only harvested 2.4 billion board feet. 

I really want to look at the root cause of this. What are those 

implications in terms of, number one, fuel load? And number two, 

I would put on the table that I don’t know what the average—and 

I know there is a wide range—the average value of a board-foot 

saw log harvested from a National Forest. I know it is a wide 

range, but certainly there is a number there. Whatever that number is, I mean, it has to be a huge amount of lost revenue when 

you think that we have lost, based on the high, we are not harvesting this year 10.3 billion board feet. 

You know, you were looking for more revenue? You are sitting 

on a resource that produces revenue if you are doing the job. And 

if you are producing a revenue, you are taking away the fuel load. 

And I would argue that is the biggest problem we have. 

And so those are—I know I am way out of time, but I will look 

forward to talking with you more about those. This is obviously— 

we are going to be doing a hearing in the Subcommittee on Forestry, on October 6, coming up here soon. So we will—— 

Mr. BONNIE. I know I am out of time. I would just share, we 

share your interest in increasing the pace and scale of restoration 

absolutely and welcome the conversation. We think the budget is 

obviously a critical part of it, but there are other pieces as well. 

Mr. THOMPSON. Restoration is surrender treatment. The word 

treatment is surrender, because that means you have allowed a 

59 

problem to be created. We need to be proactive. That is saw log 

harvesting. 

Mr. BONNIE. That is certainly part of it. 

Mr. THOMPSON. Well, I would say it is a big part of it. It is preventing problems from occurring and developing. 

Sorry, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. 

Mr. Moolenaar, 5 minutes. 

Mr. MOOLENAAR. Thank you, Mr. Chairman. 

I wanted to ask you, are you the lead agency when it comes to 

designating wetlands? Would that be your role? 

Mr. WELLER. I have to be careful how I answer that question. It 

depends on, if it is for participating in a USDA program, we are 

the agency that determines whether it is a wetland or not, yes. For 

purposes of the Clean Water Act, no, we are not the agency that 

determines whether that is a wetland. 

Mr. MOOLENAAR. Okay. So that is where, when you said that you 

don’t have expanded responsibilities with the Clean Water Act, 

that is that differentiation, okay. 

Would you agree that under the new EPA rule that their jurisdiction has expanded? 

Mr. WELLER. I can’t speak to their jurisdiction. I really have to 

defer to EPA and their definition of their jurisdiction. 

Mr. MOOLENAAR. But I mean, you talk to a lot of farmers. You 

probably talk to a lot of people. Wouldn’t you say their jurisdiction 

is expanded? 

Mr. WELLER. I have heard a lot from producers of concerns about 

the jurisdiction and the potential expansion of that. And I know 

EPA and the Corps are trying to put together information. They 

have done a lot of outreach with the producers, with the farming 

community and ranching community to help provide education, 

provide more information about what is or is not covered by this 

proposed or now the final rule. 

But in terms of whether jurisdiction has expanded or not, I really—I have to defer to EPA on that. 

Mr. MOOLENAAR. Okay. And what are you hearing from people 

when you hear about this rule? Is it positive? Because the EPA 

would say that their goal is to clarify. Is that your sense? Are you 

hearing that? 

Mr. WELLER. I know EPA’s goal was to try and clarify jurisdiction. I have heard from producers across the country a lot of concerns and questions about what is or is not covered. 

Mr. MOOLENAAR. Would you estimate that there will be a greater 

need for Federal permits because of this rule, if you are a home 

builder or someone who isn’t participating in the program that you 

oversee? Do you think this will lead to a need for greater permitting? 

Mr. WELLER. With respect to agriculture, I do not expect there 

to be a significant increase in the amount of permitting required. 

All the protections for farming that have been in place previously 

are still in place. All the protections for conservation, particularly 

uplands, conservation practices are still in place and are exempted. 

So by and large, there is not a significant expansion of need to 

do permitting. But at the end of the day, we are not the permitting 

60 

agency. That is going to have to be the Corps or EPA to determine 

what is or is not. 

With regard to home building or general construction or other expansion of infrastructure, again, I am not an expert in that arena. 

I can’t speak to that. 

Mr. MOOLENAAR. And it seems like they have introduced some 

new definitions that many people in the—when I talk to the farmers in my district, they are worried that the EPA is going to regulate the mud puddles, the ditches, everything. They are very concerned about it. And are you saying that they aren’t going to have 

jurisdiction over those areas in agriculture? 

Mr. WELLER. EPA has tried to define what is a ditch, first of all, 

and what is covered. I think from EPA’s standpoint, they don’t 

have the capacity, interest, or they do not want to have to go out 

and regulate mud puddles or ditches. They know that is beyond 

their capacity, and that is not really the issues they are trying to 

address with the Clean Water rule. 

They try, to the best of their ability, and I guess from your line 

of questioning, it seems like they have a little bit of ways to go— 

but they try to the best of their ability to really make it as clear 

as possible what is covered and what is not. But, again, I have to 

defer to EPA as to how well of a job they did on that. And the feedback that you are receiving apparently and that I have heard also 

from the agricultural community, they have some work yet to do. 

Mr. MOOLENAAR. Well, I guess that would be my question to you 

is, to what extent can you advocate for agriculture in this regard? 

Because, as I look at my district and hear from farmers in my district, this is the number one concern. And I don’t think they believe 

that EPA is speaking for them. And the question would be: is that 

something, a role that you can take on? 

Mr. WELLER. We do advocate for agriculture at U.S. Department 

of Agriculture, and we have provided technical assistance to EPA 

and to the Corps when they were designing the rule. Some aspects 

of that assistance they took; some they did not. But throughout the 

rulemaking process, we did, as a Department, NRCS, the Secretary’s Office, other offices and agencies within USDA, did engage 

with and try to provide technical advice to EPA and the Corps as 

they designed the rule. 

And then throughout that, we really tried to bring a commonsense approach in, here is what production agriculture looks like, 

here is the facts on the ground, and here are the implications of 

what—in terms of different decisions they are considering, here are 

the implications for agriculture. So we really did, as a Department, 

try to advocate for and speak for agriculture. 

Mr. MOOLENAAR. And do you believe it is successful for agriculture, this new rule? 

Mr. WELLER. I guess it remains to be seen at the end how well 

it is implemented and what its true impacts are. I have to take 

EPA, from their comments, that they really do view this as not impacting agriculture significantly, but that, I guess, remains to be 

seen. 

Mr. MOOLENAAR. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. 

61 

Mr. Gibson, 5 minutes. 

Mr. GIBSON. Well, thanks, Mr. Chairman. 

I appreciate the panelists being here today. 

The first question I have, really a comment, we have in our district a major EWP project. NRCS, thank you very much for your 

help on that. This is in Schoharie County in upstate New York, and 

a $24 million investment. I want to thank you for that. 

Our area was devastated by Hurricanes Irene, Lee, and to a degree, Sandy. And so clearly we need to take some proactive measures to help protect people and property, going forward. So I really 

want to express my gratitude that you agreed and were working 

this project. 

I suspect you probably know we are having some challenges with 

the project. I am working as a broker in this to really get this done. 

You guys are rightfully ensuring that we are going to do this to the 

standard, and I appreciate that after 29 years in the military. 

And from my local folks, they are feeling a little bit picked on 

from time to time. We are sorting through the details of that to 

make sure that they understand what the standards are with the 

ultimate goal of making sure this gets done. What I am just looking for today is just acknowledgment of how important this project 

is and that you are in, you are committed with us to getting this 

done. 

Mr. WELLER. Absolutely, sir. We are provided this program and 

these resources to help communities. They are locally-led projects, 

and we are there, but for the invitation to help those communities. 

So we want this project, in particular, to be successful. And we do 

appreciate your help in helping to be that intermediary to help us 

understand, but also to help work with the local project sponsors 

as well, and we are committed to seeing this be successful. 

Mr. GIBSON. Well, I appreciate that, because rumor control, as I 

hear that every now and then. Some folks on the ground think that 

you are going to leave them, and I assure them that you are not; 

that you are insisting on standards—and again, I understand 

standards—but that you are committed to working together to 

make sure we get done to standard. 

Mr. WELLER. And the standards are really important. Sometimes 

they may sound bureaucratic, but at the end, they are actually for 

people’s protection; that if we are putting in structural implements, 

if they fail, that could be a risk to people’s property or their lives. 

They have to be designed and something that we can stand behind. 

Mr. GIBSON. And we understand that. And thank you for your 

assurances that we are committed to working together on that. 

The second question I have has to do with the Forest Legacy Program. So I have a bill that looks explicitly at the management of 

easements for forest legacy with the move in the bill to allow for 

more local control for states to make the decision as to whether or 

not they want land conservancies to manage these easements. I am 

familiar with the history of this in the last 10, 15 years or so, and 

some reports that were rendered with regard to challenges. 

From my research, it appears that we have learned from those 

challenges and that it may be to the benefit of all, that being those 

that support this program, those that benefit from this program, 

and the taxpayer, that a bill thusly designed should become law. 

62 

I am curious to know if you know of it and what your thoughts are 

on these ideas? 

Mr. BONNIE. So, I am aware of the issue. Obviously, haven’t seen 

the specific piece of legislation, so don’t want to comment on that. 

We have had a number of people approach us about this issue and 

interest in the role that local land trusts and others can play in the 

Forest Legacy Program. We welcome the conversation. 

Frankly, there have been folks on both sides of this issue. The 

Forest Legacy Program has worked well to keep forests and forestry, and we want to continue that. I think we would welcome the 

conversation to sit down with you and explore this further. 

Mr. GIBSON. Well, I look forward to that. The analysis that I 

have and the testimonial I have received is that we can actually 

get more value out of this and allow this money to go further, and 

to really get a fuller benefit in there. So thank you for your interest 

in that, and I will work with my great Chairman on that one as 

well. 

So Mr. Chairman, with that, I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mr. Benishek, 5 minutes. 

Mr. BENISHEK. Thank you, Mr. Chairman. 

Thank you all for being here this afternoon. 

I want to follow up on a few questions that my colleague, Mr. 

Abraham and Chairman Thompson mentioned as well, because 

they are concerns to me. I represent the northern half of Michigan. 

We have three Federal forests. It is a big part of our economy, not 

only our recreation, but the timber management. 

And some of the things we see in value for the resource of the 

forest, which you all are managing for the American people, to me, 

this is a resource that provides income and jobs for the community. 

I would like an answer to a couple questions. In response to Mr. 

Abraham’s question about the forest and then the salvage of the 

fire, so how many acres of timberland have burned in the last 10 

years? And then how many of those acres have actually been treated for salvage? 

Mr. BONNIE. I can’t give you an answer to that question off the 

top of my head. I will say, this year we burned 8.8 million acres, 

that is forestland and rangeland as well. The numbers are high. 

And, in some cases, it makes sense to do salvage; in other places 

it is either too remote or otherwise to think about it. 

Mr. BENISHEK. Well, that would be a great answer for me to understand that a little better, because it seems to me that some of 

the things that came up today related to the salvage issue. 

The other question I have is similar. To me, this fuel load is an 

issue, okay, and how many acres of burn compared to how many 

acres that we have harvested in the last 5 years? What is the story 

there? 

Mr. BONNIE. Annually, we are burning north of 7 million acres 

a year. In terms of treatments in the Forest Service, I look to my 

left a little bit, we are in the neighborhood of 2.9 million acres 

somewhere. 

Ms. WAGNER. Across all restoration, it is probably around 

250,000 of mechanical treatment for timber sales. 

63 

Mr. BENISHEK. So much more land is burned than has been harvested, sounds like—— 

Mr. BONNIE. That is right. 

Mr. BENISHEK.—that order of magnitude. 

And to Mr. Thompson’s question about getting more harvest into 

the forest, what have you done? What I hear from different people 

in your agencies and outside is that because of budgetary issues, 

they can’t get more harvesting done. And because of the way that 

the cuts are mandated to be done, it actually costs the Forest Service more money than they make by selling trees. And I always 

thought when you sell trees you make money, but apparently the 

Forest Service does not. 

And what have you done in the last 3 years to improve the process by which sales occur to maximize the resource of the American 

people? Because I don’t want to see this—the process cost more 

money than the actual, when I am a forest owner and people own 

land elsewhere that harvest the forest in a very satisfactory way 

the third party observations and all that and they actually make 

money. But you folks can’t seem to do that. 

So to me, it should be easy to harvest the trees because you can 

be making money at the same time. So can you go into that a little 

bit for me, please? 

Mr. BONNIE. So I will start off and then Mary can fill in. So we 

have increased the amount of timber harvest since 2008 by about 

18 percent. Last year we harvested about 2.8 billion board-feet. 

And we have clearly stated that we need to do more. We agree with 

you; there is more land to treat. 

In terms of new things that we have done, we have invested in 

a larger-scale landscape projects. We have done a project across 1 

million acres in Arizona. I mentioned earlier the Rim Fire project, 

so we are trying to—— 

Mr. BENISHEK. Let me just comment on that right away, that in 

my district, it is difficult for the people that want to harvest to get 

into a deal because they can’t make a deal for 10,000 acres. They 

need some smaller deals—— 

Mr. BONNIE. Yes. 

Mr. BENISHEK.—that the loggers can get into easier. So I applaud your effort there, but it has made it harder for people in my 

district to actually cut trees down in the Federal forest because of 

maybe rules like you are talking about. 

Mr. BONNIE. Well, so we can choose the sale. We can do smaller 

sales. I didn’t mean to suggest we are only doing larger. Absolutely 

right. 

The other thing I would say about value is there are clearly 

places where timber sales are going to pencil out in a positive way. 

I would also say that there are places where either the markets 

aren’t robust or we have small diameter timber that we have to go 

in and remove, that the economics aren’t as good. There aren’t 

places—— 

Mr. BENISHEK. Everybody understands—I mean, at least, I understand the forest. You cut areas out you can make money in. But 

there are a lot of those areas in the forest that aren’t being harvested now. So how can you improve that process, going forward, 

and then how can I improve it? 

64 

Mr. BONNIE. I agree with you that we need to do more work. As 

I noted earlier, I am willing to have a conversation about are there 

authorities and things we can look at. I will come back to the point 

that the most important thing, most of the biggest constraint on 

our ability to do work is the lack of capacity. And that lack of capacity comes from the shift of non-fire resources into fire. And if 

we don’t do something about that problem, it is going to be harder 

for us to do all kinds of things, including forest management. 

Mr. BENISHEK. I think I am out of time though. 

The CHAIRMAN. The gentleman’s time has expired. 

Chief Wagner, one final comment real quick. We need to get to 

the other panel. 

Ms. WAGNER. I might just add that timber harvest does increase 

despite the fact that our staff has decreased by 1⁄3 since 1998. We 

are finding a lot of efficiencies to sell a board-foot of timber at reduced costs, so we found efficiencies internally. 

With our National Environmental Policy Act efficiencies, we have 

also, based on scale collaboration, we have exciting ventures where 

we are using adaptive approaches with insects and disease where 

we are forecasting a future 5 to 10 years out without having to do 

additional NEPA. 

Congress has also given us authority for the collaborative Forest 

Landscape Restoration Program, 23 projects across the nation. 

They are accelerating the reduction of fire risk, improving forest 

health, eradicating noxious weeds and producing board-feet, creating jobs as well. So those are on track to meet their 10 year 

goals. 

And the authorities through the farm bill, insects and disease authority, good neighbor authority, and permanent stewardship contracting authority. So we have a great set of tools, and we are making the most of the resources that we have. 

The CHAIRMAN. I want to thank Secretary Bonnie; thank you, 

Chief Weller; and Chief Wagner, thank you. I think you have all 

so graciously agreed to meet with Members privately in 1306 while 

we transition. So, again, thank you very much for coming in today. 

I know it is a hassle. We appreciate it. If you all will go down to 

1306, Members who want to have a quick conversation with you individually will do that, and then we will get the other panel in. 

So we stand in recess while we swap out the panels. Thank you 

all very, very much. 

[Recess.] 

The CHAIRMAN. Okay. Let’s go ahead and start. 

I want to welcome my third panel. The good news is, the Department of Labor’s overtime rules aren’t going into effect until January. So it probably wouldn’t apply to you guys anyway. I think 

some of us are going to try to stop that anyway. 

So anyway, I want to welcome our third panel. Thank you very 

much for being here this afternoon. We have today with us the 

Honorable Catherine Woteki, who is the Under Secretary for Research, Education, and Economics, USDA. Thank you for being 

here. 

We have Dr. Chavonda Jacobs-Young, who is Administrator at 

the Agricultural Research Service. Thank you; Dr. Sonny 

Ramaswamy, who is the Director of National Institute of Food and 

65 

Agriculture; Dr. Mary Bohman, who is the Administrator for Economic Research Service; and we have Renee Picanso, Associate Administrator for the National Agricultural Statistics Service. So 

thank you very much for being here today. 

Under Secretary, the floor is yours. 

STATEMENT OF HON. CATHERINE WOTEKI, PH.D., UNDER 

SECRETARY, RESEARCH, EDUCATION, AND ECONOMICS, U.S. 

DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 

ACCOMPANIED BY CHAVONDA JACOBS-YOUNG, PH.D., 

ADMINISTRATOR, AGRICULTURAL RESEARCH SERVICE, 

USDA; SONNY RAMASWAMY, PH.D., DIRECTOR, NATIONAL 

INSTITUTE OF FOOD AND AGRICULTURE, USDA; MARY 

BOHMAN, PH.D., ADMINISTRATOR, ECONOMIC RESEARCH 

SERVICE, USDA; AND RENEE PICANSO, ASSOCIATE 

ADMINISTRATOR, NATIONAL AGRICULTURAL STATISTICS 

SERVICE, USDA 

Dr. WOTEKI. Thank you, Chairman Conaway. 

The CHAIRMAN. Microphone. The microphone. You will need to 

pull it closer. 

Dr. WOTEKI. I know how to operate these things, yes. 

The CHAIRMAN. We will have to have you up here more often so 

you can get better trained. 

Dr. WOTEKI. Chairman Conaway, distinguished Members of the 

Committee, it is really our honor to be testifying before you this 

afternoon about the research, education, and economics mission 

area. 

As you noted, Mr. Chairman, I am accompanied by the leaders 

of the four agencies within this mission area, and I request that 

our written testimony be entered into the record, and I will briefly 

summarize that testimony. 

The CHAIRMAN. Without objection. 

Dr. WOTEKI. The United States, as well as the world, is facing 

a food security challenge. Investments in research are a critical factor in our ability to provide the future generations with food and 

provide the additional services that will be demanded of agriculture. 

The REE mission area agencies conduct and sponsor research 

our country needs to keep our food supply safe, secure, and abundant; to ensure profitability to our farmers and ranchers; to improve nutrition and food safety for lifelong health; to reduce pollution related to agricultural practices; to safeguard natural resources, and to address our nation’s energy needs. 

The four REE agencies play important and complementary roles 

in developing the scientific understanding to tackle these issues. 

ARS, with its network of 2,000 scientists at 90 different locations 

across the country, works to protect agriculture and transfer its research results to the marketplace. 

NIFA funds research at universities that integrates research, 

education, and extension to ensure that groundbreaking discoveries 

go beyond the laboratory and make their way to farmers, ranchers, 

classrooms, and communities where Americans can put this knowledge into practice to improve their lives. 

66 

ERS performs economic research and analysis that guide program and policy decisions throughout the Department, and NASS 

conducts numerous surveys as well as a Census of Agriculture 

issues over 400 reports annually that provide accurate, timely, and 

useful official statistical data on national, state, as well as county 

levels about production, supply, price, and other aspects of U.S. agriculture. 

The land-grant universities are valued partners in all these research, education, and statistical activities. REE’s work in the food 

and agricultural science is based on the premise that the Federal 

Government has a role in advancing scientific knowledge to promote our nation’s social and economic well-being. REE does this by 

investing in areas in which for-profit industry does not invest, and 

a good example of this is fundamental science, or also called basic 

research. It also collaborates with the public-sector academia and 

the private-sector to amplify research outcomes and impacts. 

The 2014 Farm Bill has been very important to us. In it, Congress underscored its interest in developing public-private partnerships in the agriculture, research, education, and extension realm 

through four different initiatives: Matching funds provision that 

encourages prospective NIFA grantees to partner with land-grant 

universities; the facilitation of commodity promotion boards participating in NIFA’s competitive grants program; incentivizing a research consortia to form centers of excellence and to apply for selected NIFA grants; and also, Congress created a new private notfor-profit foundation for food and agricultural research. 

In keeping with the Administration’s effort to break down silos, 

the REE agencies are actively encouraged to seek efficiencies, collaborate, and to form partnerships. And one example of this approach is the way that we have been addressing highly-pathogenic 

avian influenza. ERS has been assessing the impacts of this disease on domestic and global poultry markets. 

NIFA has been supporting university researchers in extension 

education to develop new tools that help producers better prevent, 

control, and manage this year’s outbreaks. And ARS scientists have 

been working in connection with APHIS, not only to identify the 

specific strains involved, but also to develop a vaccine against the 

virus as well as better detection technologies. 

Our written testimony provides additional examples. 

In closing, Mr. Chairman, despite the significant efforts by recent 

farm bills and the annual spending bills to restructure, reorganize, 

reauthorize, repeal outmoded provisions, agriculture science in the 

United States is really at a crossroads. It is no secret that the 

American research enterprise needs additional resources. 

Our written testimony makes reference to an ERS analysis, indicating that a small increase each year in real term, about a one 

percent increase in the research of that investment, would yield an 

80 percent increase in agricultural productivity by the year 2050. 

So, Mr. Chairman, we thank you for the interest that this Committee has in agricultural research, education, and economics. And 

my colleagues and I are eager to answer any questions you might 

have. Thank you. 

[The prepared statement of Dr. Woteki follows:] 

67 

PREPARED STATEMENT OF HON. CATHERINE WOTEKI, PH.D., UNDER SECRETARY, RESEARCH, EDUCATION, AND ECONOMICS, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Chairman Conaway, Ranking Member Peterson, and distinguished Members of 

the House Agriculture Committee, I am pleased to appear before you to provide an 

overview of the activities of the Research, Education, and Economics (REE) mission 

area of the United States Department of Agriculture (USDA), highlight some of our 

recent success, and share some insight on the priorities for the coming years. 

I am accompanied by the leaders of our four agencies: Dr. Chavonda JacobsYoung, Administrator of the Agricultural Research Service (ARS), Dr. Mary 

Bohman, Administrator of the Economic Research Service (ERS), Ms. Renee 

Picanso, Associate Administrator of the National Agricultural Statistics Service 

(NASS), and Dr. Sonny Ramaswamy, Director of the National Institute of Food and 

Agriculture (NIFA). 

The United States and the world are facing critical problems and opportunities. 

Global population is expected to reach nine billion people by 2050, almost two billion 

more people than today. At the same time we are seeing the impacts of climate 

change, impacts that will only get worse. These are among the challenges that all 

of us face. Investments in research are a critical factor in meeting these and other 

challenges and opportunities, and it is the REE mission area agencies that support 

the critical research our country needs to keep our food supply safe, secure, and 

abundant, ensure farm profitability, improve nutrition and food safety for lifelong 

health, reduce pollution and improve the environment through climate friendly 

practices, safeguard sustainable use of natural resources, including an abundant 

and safe water supply, and address our nation’s energy needs. For instance, ARS 

with its network of 2,000 scientists at nearly 90 laboratories across the country 

works to enhance and protect agriculture as well as transfer research results to the 

marketplace where they serve the needs of a wide range of users. By funding research at land-grant universities, as well as other universities and organizations, 

NIFA integrates research, education, and extension to ensure that groundbreaking 

discoveries go beyond the laboratory and make their way to the farms, ranches, 

classrooms, and communities where Americans can put this knowledge into practice 

and improve lives. The economic research and analysis work of ERS guides policy 

throughout government and provides vital information to consumers, other researchers and the marketplace. NASS conducts numerous surveys and issues over 400 reports that provide accurate, timely, and useful official statistical data on national, 

state and county agricultural estimates covering production, supply, price and other 

aspects of the U.S. agricultural economy. Farmers and ranchers, governments, commodity markets, businesses, and researchers are among those who depend on these 

statistics to make informed decisions. 

We have a rich history of the agricultural sciences in the United States and I 

would like to provide you some context for the ongoing work within the mission 

area. 

The agricultural research and education system of the United States started in 

1862 with President Abraham Lincoln signing into law the creation of a new Department of Agriculture with the mission to promote scientific agriculture and the 

propagation and distribution of seeds. The passage of the Morrill Act in 1862 established the land-grant university (LGU) system. In creating the land-grant system, 

a whole new generation was allowed to gain access to post-secondary education in 

the United States, ensuring that higher education would nevermore be only for the 

elites. Congress expanded this family of land-grants in 1890 to serve the educational 

needs of the African American communities and, in 1994, to serve Native Americans 

in welcoming Tribal universities and colleges. Just 2 months ago, on July 15, 2015, 

this Committee hosted the Presidents of 1890s land-grant universities at a historic 

hearing to celebrate the 125th anniversary of the passage of the Second Morrill Act. 

Congress passed the Hatch Act of 1887, which created the State Agricultural Experiment Stations. These experiment stations contributed to many key discoveries 

in agricultural science. In 1914, the Smith-Lever Act was signed into law, which created the Cooperative Extension Service as a unique Federal, state, and local partnership to translate knowledge into innovations and solutions that advanced economic and social progress in American agriculture and rural America. 

REE’s work in the food and agricultural sciences is based on the premise that the 

Federal Government has a role in advancing scientific knowledge to promote our nation’s social and economic well-being. REE does this by investing in areas in which 

for-profit industry does not invest, such as basic research. It also collaborates with 

the public-sector, academia, and the private-sector to amplify research outcomes and 

impacts. Underinvestment or the absence of investments in food and agricultural 

68 

sciences diminishes the needed foundational knowledge-base and impacts our nation’s global preeminence and economic well-being. It is with these goals in mind, 

that the REE mission area agencies establish their priorities and conduct their 

work. 

These priorities are determined through a rigorous and extensive process that incorporates the direction provided by this Committee through its 5 year authorizing 

farm bills, the annual appropriations bills, and related governance statutes set in 

place by Congress and guidance provided by the President. REE agencies have their 

5 year strategic plans, which are aligned with the Department’s plans. Input is also 

solicited from many different types of stakeholders throughout the planning process. 

These stakeholders conduct or use agricultural research, education, and economics 

services provided by or for the agencies and include representatives from commodity 

groups, industry, interagency Federal working groups, scientific societies, and university partners. Stakeholders also include the Congressionally-established REE external advisory committee, the National Agricultural Research, Extension, Education, and Economics Advisory Board (NAREEEAB). 

In the 2014 Farm Bill, Congress underscored its interest in developing public-private partnerships in the agricultural research, education, and extension realm 

through three different policy provisions discussed below. These provisions enable 

the REE agencies—in particular, NIFA—to partner with its stakeholders and foster 

increased collaboration between academia and the private-sector. 

Three specific examples of these provisions are: (1) the matching funds provision 

which encourages prospective NIFA grantees to partner with land-grant universities 

when applying for a NIFA grant; (2) the facilitation of commodity promotion boards’ 

participation in NIFA’s signature competitive grants program, the Agriculture and 

Food Research Initiative; and (3) the incentivizing of research consortia to form ‘centers of excellence’ and apply for selected NIFA grants in a collaborative manner. In 

addition, Congress created the new, private, nonprofit Foundation for Food and Agriculture Research which must match its initial Federal seed contribution of $200 

million with an equal amount from non-Federal sources before underwriting research. The Office of Technology Transfer (OTT) nested within ARS serves all of 

USDA in its work with the private-sector. Organizing public-private partnerships, 

as the 2014 Farm Bill has done, ensures that more public funds are leveraged with 

private-sector dollars to make the most of the taxpayer investment. 

As important as identifying priorities are in providing strategic direction, this represents only part of REE’s success model. The ultimate measure of success is not 

just the number of research projects we are working on, the number of surveys in 

the field, or the number of grants awarded. The REE agencies measure their success 

by the outcomes of their work. This evidence-based orientation forces us to examine 

how our efforts are helping change the landscape of the American food and agriculture enterprise. 

Take for example the efforts of ARS, which views its work as bookending the research spectrum—exploring fundamental topics that can eventually be transferred 

to the private-sector in order to be commercialized as a way of improving the public 

good. Examples include the mosquito repellent DEET, Lactaid for the lactose-intolerant, the variety Roma tomatoes (which is still the main variety used for tomato 

paste), red seedless grapes, and disease-resistant, high-yielding sugarcane, are additional examples of ARS’s contributions. In Fiscal Year 2013 alone, ARS scientists 

advanced 75 inventions towards the patent process and were responsible for over 

4,400 scientific publications. 

In the same vein, NIFA measures its success through the impacts of its grants 

on the public good. Through the integration of research, education, and extension 

programs totaling about $1.5 billion, NIFA ensures that innovative solutions are 

found to problems in food and agriculture and that these solutions go beyond the 

laboratory, into the classroom and into our communities. For example, a team of 

NIFA-funded scientists from the land-grant universities, ARS, and the dairy industry have developed a new genetic test that can assess an animal’s traits immediately after birth. About 10,000 animals were genotyped, and researchers used the 

data to develop a new breeding selection method called genome selection. The genome selection method simultaneously reduced animal selection time (from 5 years 

to 1 week) and increased prediction accuracy by more than 30 percent for most 

traits. The dairy industry quickly adopted this technology and has since genotyped 

more than 500,000 dairy cattle for estimated annual benefits of $100 million per 

year. Success in this Maryland-based program has led to projects that aim to develop similar genotyping tests for beef cattle. As another example, NIFA’s impacts 

include a 5 year project at Iowa State University to investigate how heat stress affects a pig’s metabolism and performance. Heat stress is one of the costliest issues 

in the U.S. pork industry. Researchers at ISU are investigating how heat stress can 

69 

influence a pig’s fetal development and postnatal life, including the ability to develop and grow. The knowledge this study provides will become increasingly valuable as producers work to mitigate severe summer temperatures. 

Finally, NIFA research investments at Oregon State University have resulted in 

the creation of an environmentally friendly wood adhesive made from soybean flour. 

By replacing conventional adhesive, plywood production plants have reduced the 

emission of hazardous air pollutants by 90 percent. 

These are just a few examples of results from two of the largest REE mission area 

agencies. Despite their relatively smaller size, the remaining two REE agencies— 

NASS and ERS—provide an essential service that policymakers, regulators, markets, and academics rely on every day. 

For instance as I mentioned earlier, NASS’s mission is to provide timely, accurate, 

and useful official statistics in service to U.S. agriculture. NASS achieves this 

through two separate appropriated program areas: the Agricultural Estimates program and the Census of Agriculture and its follow-on studies. The Agricultural Estimates program provides critical supply, production and price data that is the foundation of the commodities market and critical to the coordination of damage and loss 

assessment of the crop insurance program and disaster assistance. The Census of 

Agriculture serves as the benchmark of the structure of agriculture in the U.S. and 

is critical to formulation of agriculture policy. The Agricultural Estimates program 

issues over 400 reports annually, providing U.S., regional and state estimates on a 

wide range of crop and livestock commodities, in addition to estimates of environmental issues, economics and demographics. The quinquennial Census provides very 

detailed statistics at the county, watershed and Congressional district level. Additionally under this program, NASS conducts in-depth studies on topics like irrigation, horticulture, organic farming and aquaculture. 

The Economic Research Service also reaches far beyond the borders of USDA. The 

mission of ERS is to inform and enhance public and private decision making on economic and policy issues related to agriculture, food, the environment, and rural development. Although ERS research programs are aimed at the information needs of 

policymakers, its information and analysis is also used by the media, trade associations, public interest groups, and the general public. ERS studies are widely recognized in the research community for its credibility, timeliness, and use of cutting 

edge data, models, and methods. 

Rather than make recommendations, ERS designs its research to demonstrate to 

its users the consequences of taking alternative policy or programmatic pathways. 

In fact, in recognition of this ‘arms-length’ role, along with NASS, ERS is also another of the 13 OMB officially designated Federal statistical agencies. As principal 

Federal statistical agencies both NASS and ERS provide data that are relevant to 

policy issues, maintain credibility among data users, maintain the trust and confidentiality of data providers and the independence from political and other external 

influence. 

In keeping with the Administration’s effort to break down silos, REE agencies are 

actively encouraged to seek efficiencies, collaborations, and partnerships with other 

agencies in the REE mission area and the Department. For example, ERS relies on 

NASS data for its Farm Income Estimate research; ERS provides ARS with social 

science research and analysis that guides some aspects of ARS’ priority setting; ARS 

and NIFA routinely work together on research projects that have both intramural 

and extramural components. The REE mission area works broadly across the Department and with other Federal agencies on agricultural literacy, food safety, pests 

and diseases, bioenergy, natural resources, and nutrition programs in order to ensure REE programs provide the science backbone to support budget and program 

policy decision makers. 

Mr. Chairman, up to this point, I have presented some information on the mission 

of REE agencies, provided some background on how priorities are coordinated in the 

mission area, and featured some of the results of the agencies’ work in these longer 

term investments. I would like to round out my discussion with a word on current 

initiatives and a look forward at agricultural science in the coming years. 

Part of the portfolio approach to finding solutions to the challenges that confront 

us includes efforts to mitigate and resolve the challenges that are before us today. 

Here are three such examples. 

The REE agencies have been working to combat the highly-pathogenic avian influenza (HPAI) virus. ERS continues to monitor and assess the impacts of this most 

devastating disease on domestic and global poultry markets, while NIFA supports 

university researchers to develop new tools that help better prevent, control, and 

manage future outbreaks of HPAI. ARS scientists have been working in concert 

with the Department’s Animal and Plant Health Inspection Service (APHIS), which 

is in the forefront of actions to combat HPAI, and the poultry industry to identify 

70 

the specific strains of the virus, develop a test to detect the virus in poultry, and 

develop a vaccine against the virus. While ARS vaccine development efforts look 

promising, much more work needs to be done before a licensed vaccine could be 

available for use as an aid to HPAI eradication. 

In the last few years, the issue of antimicrobial resistance (AMR) has emerged 

as a serious health threat to both animals and humans. While our understanding 

of the development and spread of antimicrobial resistance remains incomplete, the 

REE agencies have worked with the Department-wide One Health Working Group 

to make strides in our knowledge on AMR. The action plan for combating AMR 

takes a voluntary, comprehensive, systems approach to surveillance, research and 

development, and outreach activities. In implementing this action plan, USDA intends to provide researchers, producers, and consumers science-based, quantitative 

information about drug use and resistance in food animals and their relationship 

to livestock management practices. 

A final example of current work is the REE support of a multi-agency effort on 

pollinators. As proposed in the President’s FY 2016 budget request, the Pollinator 

Health Initiative will focus on the decline of honey bees and other pollinators. The 

continued loss of commercial honey bee colonies stands to have profound implications throughout the food and agriculture enterprise. In collaboration with the U.S. 

Environmental Protection Agency, university scientists, and private-sector partners, 

the Pollinator Health Initiative will make advances in our understanding of the 

complex factors—like poor bee nutrition, loss of forage lands, parasites, pathogens, 

and the exposure to pesticides—and provide a path forward to arrest continued pollinator losses. 

Mr. Chairman, despite significant efforts by recent farm bills and annual spending bills to restructure, reorganize, reauthorize, or even repeal provisions, agricultural science in United States is at a crossroads. It is no secret that American research needs additional resources. 

This underinvestment will have grave consequences. Projections by ERS compare 

the scenarios where public R&D investment remains the same in nominal terms 

versus a world where public R&D investment has increased by just one percent each 

year in real terms. ERS estimates that a one percent increase in investment each 

year until 2050 yields an 80 percent increase in agricultural output. 

As well, resources are not always monetary. In May 2015, the results of an employment outlook report developed by Purdue University, with support from NIFA, 

revealed a deep chasm between the demand for college graduates with a degree in 

agricultural programs and jobs available. The study found that annually, there are 

57,900 jobs in food, agriculture, renewable natural resources, and environment 

fields in the United States. Further, the study found that there is an average of 

35,400 new U.S. graduates with a bachelor’s degree or higher in agriculture related 

fields, 22,500 short of the jobs available annually. However, grants provided by 

NIFA help to address these issues by assisting educational institutions fix shortfalls 

in curricula design, material development, instruction delivery systems, student experiential learning opportunities, scientific instrumentation for teaching, and student recruitment and retention. 

Mr. Chairman although REE has made significant strides, there is still much to 

be accomplished. Our storied legacy of discovery, innovation, and international leadership in agricultural research, education and economics is in jeopardy by insufficient investments in both money and minds. This is a challenge we must all rise 

to meet and I look forward to redoubling our efforts together in the coming years. 

Thank you. 

The CHAIRMAN. Well, thank you. I appreciate it. Again, I appreciate you being here. 

Ms. Picanso, the RMA and FSA collect a great deal of data as 

they do their work on the title I programs as well as crop insurance. I mean the actual data reference to county-level information. 

Can you talk to us about efforts at how you review the data that 

you collect year in and year out? How have you morphed those or 

reduced those as a result of data that is collected elsewhere so that 

you don’t have duplication of efforts. Can you talk us a little bit 

about data collection and how you keep vetting your data to make 

sure you have the most recent current data that you need? 

Ms. PICANSO. Yes, sir. We collect data via surveys of farmers and 

ranchers and agricultural businesses, and we have over 400 reports 

71 

we put out every year. So we are constantly collecting data on 

crops, livestock, prices, production, grain stocks, an assortment of 

things. A lot of the statistics that we do collect are in support of 

USDA programs, such as FSA and RMA and are widely used by 

them. 

The CHAIRMAN. I understand that, that you collect. 

Ms. PICANSO. Right. 

The CHAIRMAN. But do you look at what you are collecting versus 

what the other agencies are already collecting so that if RMA, for 

example, is collecting all the necessary data collected for countywide information, do you need to also collect against that county 

or could you use RMA data? 

Ms. PICANSO. We do use RMA and FSA data as administrative 

data, but our surveys are as of the first of the month. In most 

cases, their survey data, their data they collect from farmers does 

not coincide with the timeline where we are required to produce estimates as of the first of the month. So even though we can use 

their data, we have to supplement with surveys of farmers and 

ranchers in order to get a statistically-reliable estimate as of the 

first of the month. 

The CHAIRMAN. Give me a sense of what you think that your reports can move markets in the data that you are collecting, particularly those monthly reports that you are talking about. Can you 

talk to us a little bit about your efforts to make sure you are using 

the very best information available, as new techniques evolve, 

those kind of things to make sure that whatever it is you report 

that potentially could move a market in the interim is based on as 

good of information that you would have? 

Ms. PICANSO. Yes. We are constantly updating our statistical 

methodology to be sure we have the most up-to-date statistical 

models and methodology. We are constantly looking for ways to use 

more administrative data so we aren’t burdening the farmers and 

ranchers as often as we have in the past. But with the increasing 

demand for data, we are asked to do more and more surveys; and 

we are also asked to do a lot of publications down to the local level, 

which means we have to increase sample sizes in order to get the 

data, which involves contacting more farmers. 

And as far as the volatility in the reports, our reports are as of 

the first of the month. We usually don’t release the report until 

about the 10th. So sometimes between the first of the month and 

the 10th of the month, there may be a weather condition that occurs and our estimate may be a little different than what the analysts are predicting, and that is usually when the markets either 

go up or down. 

We also release data in conjunction with the World Agricultural 

Outlook Board, which is international data. So sometimes when the 

reports are released, it isn’t the U.S. data that is affecting the markets. A lot of times it is an international situation that can occur 

as well. 

We do track this, though, and how many times prices go up after 

a report and how many times prices go down and then how many 

times they stay the same; and it is usually about 45 percent of the 

time they go up and about 45 percent of the time they go down and 

72 

about ten percent of the time they stay the same. So it does even 

out over the course of time. 

The CHAIRMAN. All right. Thank you. 

Under Secretary, you mentioned a small increase in research 

would have a dramatic increase in ag production. Can you reduce 

that to dollars for me, because you spend about—total of your agency is about $2.5 billion each year. That is all in. That is not just 

research. That is everything. But what—could you reduce the— 

help me understand the magnitude of money that you are talking 

about. 

Dr. WOTEKI. Yes. So the report that I am referring to is an analysis that ERS has done that has shown that projecting out to midcentury, when the expected food demand is going to demand an increase in productivity not only in the United States, but around the 

world, that a one percent real increase in the appropriation going 

to agricultural research will result in a productivity increase of 

about 80 percent over that period of time. 

The CHAIRMAN. So there is a direct line between dollars spent 

and productivity increases and research? 

Dr. WOTEKI. Historically that has been the case. 

The CHAIRMAN. Okay. So it is just—okay. 

Dr. WOTEKI. And increasingly, in the United States, in the past 

decades, our increases in agricultural productivity have come directly from scientific innovation, and our farmers know how to implement that. So it is essentially a combination of research, innovation, and education. 

The CHAIRMAN. Yes. It is not all at the Federal level. There is 

a lot of private research done as well, scientific dollars that are 

spent as well, right? 

Dr. WOTEKI. That tends to be more commercialization of—— 

The CHAIRMAN. The basic science. 

Dr. WOTEKI.—basic science that the private-sector is doing. 

The CHAIRMAN. Okay. Ms. Fudge, 5 minutes. You are the ranking Democratic Member on the Committee today. 

Ms. ADAMS. Adams. I think you said Fudge. 

The CHAIRMAN. Oh, I am sorry. Ms. Adams. 

Ms. ADAMS. Thank you very much, Mr. Chairman, and I thank 

you all very much for being here. 

My first question is to Dr. Ramaswamy. Is that the correct pronunciation? As many of you know, North Carolina A&T State University is my alma mater and an 1890 institution found in North 

Carolina and the 12th District that I represent. It is my understanding that NIFA is conducting an investigation into 1890 institutions not being able to offer the full level of matching funds needed to qualify for grants available through land-grant institution 

and research programs. 

And I would appreciate it if you could share any comments regarding the 1890 institutions not submitting the sufficient matching funds for these programs, if you would do that. 

Dr. RAMASWAMY. Thank you very much, Mr. Chairman, for having us here. And Congresswoman Adams, thanks very much for 

that question. And as you know, you participated in this room right 

here, and thanks to the chair here for inviting our 1890s and the 

co-chair, Collin Peterson, as well. Congressman Peterson to invite 

73 

our 1890s institutions to come here and to highlight the wonderful 

work that is undertaken in the area of food and agriculture in 

those institutions, the 19 institutions across America. 

And so, indeed, to your point, some of the institutions are finding 

it difficult to have the state matches. So for every dollar that 

USDA provides, the National Institute of Food and Agriculture provides, there is a requirement that there is a dollar that is matched 

from other sources. 

And we say that these other sources, based on what Congress 

has told us, we say that these other sources are non-Federal 

sources. So they could be from the state, they could be from the 

sale of commodities, they could be from donations given to the institution, et cetera, but not from tuition that is charged to students. 

Tuition dollars cannot be utilized for that match. 

And it turns out that a number of institutions, 1890s institutions 

are not able to get their matches, and again, Congress has said 

that the Secretary is vested with the authority to do a waiver up 

to 50 percent. So an institution can contact us, and they can ask 

for a waiver of up to 50 percent, and there are three reasons under 

which we do provide the waiver, one of which is a natural disaster 

such as a hurricane or tornado or some such thing; second is financial exigency at the state or at the institutional level; and the third 

is that they make an honest effort to find the resources to get the 

match. 

And we get these requests coming in from all the institutions, 

and we look at them, and if they are meeting at least one of those 

criteria, we will go ahead and provide a waiver of 50 percent. 

So if they come in with ‘‘50¢’’ in quotes, we provide $1 of the Federal match. If they come in with less than 50¢, let’s say they come 

in only with 40¢, then we only provide 90¢, and the remaining 10¢ 

is available to be provided to other institutions, providing they can 

come up with a match as well. 

So that is the sort of the situation that we are in. A number of 

institutions do come in with waivers, and what we have done now 

is to—we have staff that is going to be investigating the situation 

in the 18 states where we have the 19 institutions, and not just the 

1890s institutions. We are also going to look at the 1862 institutions as well. Because we want to know the entire construct as to 

how these land-grant universities are dealing with the matching 

requirement that we have, and we hope to undertake that analysis 

in the next 2 or 3 months or so, the data gathered and there is an 

analysis done, and then we will develop a report, then go through 

the clearance process within USDA and make that available. 

And in that final report that we provide, we will also, depending 

on what we learn, make some recommendations as a path forward. 

Ms. ADAMS. Okay. Let me quickly ask another question—and 

thank you for your answer. What grant opportunities are forthcoming related to supporting small scale minority or women producers? 

Dr. RAMASWAMY. There are a number of funding opportunities 

that will be coming here with the start of the new fiscal year, and 

we hope that this body here and the rest of Congress will indeed 

provide us the funding necessary. 

74 

And we do have several funding opportunities for women and minority farmers and small farmers as well that are part of the opportunities we provide. And if you wish, I can send you separately 

a listing of the ones that we have done in the previous year. 

Ms. ADAMS. Yes, sir, I would appreciate that. 

Thank you, Mr. Chairman. I am out of time. 

The CHAIRMAN. Thank you. Ms. Adams. The gentlelady’s time 

has expired. Mr. Crawford, 5 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. This is in general to 

whoever might want to respond to this. A lot of our growers obviously rely on USDA estimates of commodities supply and demand 

for market information and outlook. What role does ERS play in 

the development of the monthly WASDE reports, and how is that 

involvement distinct from the efforts of other services of the USDA? 

Dr. BOHMAN. The Economic Research Service, has long played an 

important role in USDA’s commodity outlook program. It is over 50 

years at this point, and our expertise is to bring in the economic 

knowledge. We are all economists, how the markets work. We also 

have research behind the economists to participate in these committees, and we have data systems that are used to produce supply, demand, and utilization tables. 

So we are some of the sort of intellectual horsepower behind the 

committees and draws on our infrastructure. After the WASDE report comes out every month, ERS produces newsletters for the 

major commodities that show the reasoning behind the WASDE estimates, and this is a unique contribution. 

A final element that we produce is a periodic report such as on 

China’s cotton stocks, U.S. trade with Cuba, or the implications of 

lower energy prices for the farm sector which document the modeling and economic logic behind the WASDE reports. 

Another contribution ERS makes is leading USDA’s 10 year agriculture baseline. We really drive that process in collaboration with 

the Office of the Chief Economist. 

Mr. CRAWFORD. Okay. 

Dr. BOHMAN. We are committed to continuing excellence in this 

area. 

Mr. CRAWFORD. I appreciate that. I heard a lot of complaints 

from growers back home that the recent WASDE report had a huge 

impact on the price of soybeans in particular. Apparently, Arkansas 

average yield forecasts are published at a much higher rate than 

anyone is even capable of at this point, so considerably higher than 

record yields. 

Can you walk me through what controls you might have in place 

to ensure accuracy because there seems to be a huge difference of 

opinion on what our producers back home are telling us that they 

are expecting versus what was published. 

Dr. BOHMAN. Well, ERS analysts bring to the table, along with 

analysts from the Farm Service Agency, from NASS, from the 

World Board itself, a process where they have data from the past, 

they have the NASS statistics that are about to be released, and 

they also have expertise from talking to other people in the industry. 

So they bring the best knowledge to produce these forecasts. 

They regularly go back and check the accuracy of their forecast, the 

75 

ones that are predicting, how do they do when the market clears 

in the future, and so there is a robust system of checks and balances, but I will turn to my NASS colleague because they are a big 

part of the process. 

Ms. PICANSO. Yes. In addition to getting yield data from producers on surveys, we also go out into the fields, and we actually 

do objective measurements, and the objective measurements on the 

crops are combined with the producer yields and put into models, 

and that is how we come up with our forecasts. 

Mr. CRAWFORD. Okay. I don’t mean to cut you off, but I just have 

been kind of trying to be up to speed on my data here, and University of Arkansas cooperative extension service, which most states 

rely pretty heavily on their land-grant institutions, cooperative extension services, and those economists. 

And our economist at the University of Arkansas said USDA’s report was extremely bullish, and we are basing that on a pretty big 

increase year over year that the farmers in our district don’t think 

they are capable of meeting that level, and so let me move on to 

the next thing. 

Again, we have heard these repeated concerns from growers in 

the industry about the accuracy of these crop progress reports and 

the impact that those reports can have on market prices, particularly for corn and soybeans. Can you talk about the methodology 

that helps you get there, and throughout the growing season, what 

efforts NASS has undertaken to review its methodologies for yield 

estimates, and what changes, if any, you think, need to be made? 

Ms. PICANSO. I am not aware of any changes that need to be 

made, but we do use methodology, like I said before, with our models. We actually do get out into the field once the crops starts producing fruit, and we do measurements, we take weights of the 

fruit, and that combined with what the producers are telling us is 

how we get our yields that are published every month. 

And as the season goes on, the data we get on the objective 

measurements become more accurate because, sometimes, depending on the maturity of the crop, which go out September 1, October 

1, some years the crop is more mature than others, and the more 

mature the crop is, the more reliable our actual counts of the objective measurements are. 

So in years where the crop matures a little early, we tend to do 

better on the yield forecast, but we do have a publication that 

comes out every year that compares all of our forecasted yields to 

the final yield, so it does show the accuracy. It is available on our 

website. We also host dozens of people each month into our actual 

ag statistics board process where they go through and see how all 

of the yields and acreage and production are actually developed, 

and it is really a pretty impressive process with all of our statisticians. 

And if you sit down and go through the process, you will realize 

that we are using sophisticated models to come up with the data. 

Some people think we are just guessing or maybe we are just basing it on a handful of reports, but we do get 75 to 80 percent response on our surveys as well as our objective yield to complement 

it, and we do use some satellite data towards the end of the growing season as well. 

76 

Mr. CRAWFORD. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Scott, 5 minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you Mr. Chairman. 

Dr. Ramaswamy, how are you? It has been a while. 

Dr. RAMASWAMY. It has been a while. 

Mr. AUSTIN SCOTT of Georgia. With regard to ag research, we 

talk a lot about research, but would you speak to the value of extension along with the research? 

Dr. RAMASWAMY. Indeed, Congressman Scott, and good to see you 

again, sir, after several months now. And cooperative extension 

service, which we celebrated the 100th anniversary, as you 

know—— 

Mr. AUSTIN SCOTT OF GEORGIA. Yes, sir. 

Dr. RAMASWAMY.—last year, and you hosted a hearing for that 

particular event as well, is the very American approach to translating knowledge into innovations and solutions to address problems people are facing. And this is the only country on Earth that 

doesn’t dissuade the connectivity between the research discovery 

enterprise and the translational enterprise and then to deliver it 

to the end-users. No other country has been able to do anything 

like it. And I truly believe that our nation’s preeminence, global 

preeminence is, in large measure, that ability to translate knowledge and to deliver to the end-users. 

And we have a history of it over the last 100 years, and when 

we look at the situation now and as we project out, as we go forward as well, we need this sort of ability to translate and to deliver 

that knowledge more so today than we have ever needed it before; 

in part, because of the burgeoning population with pressures that 

we have; in part, because our ability to ensure food security, nutritional security specifically. 

And in the context of diminishing land and water resources, 

changing incomes and diets, et cetera, et cetera, it is driving the 

need to come up with better more efficient ways to produce food 

and to get it to where it is needed and to address those problems 

as well. 

Extension is absolutely a must if we are to be able to achieve 

what we need to achieve. 

Mr. AUSTIN SCOTT of Georgia. Things seem to change faster now 

than they have in the past with regard to chemicals and pests and 

other things, and certainly there is a tremendous amount of information and there is even more misinformation out there, and so 

that extension aspect, along with the research, is something that 

I don’t think we talk about extension enough. 

Dr. RAMASWAMY. Indeed. 

Mr. AUSTIN SCOTT of Georgia. But thank you for that. 

One other question I have. The 1890s land-grant universities, 

there are reports that they have not been receiving as much funding as some of the other universities. What suggestions do you or 

anybody else on the panel have for us in correcting that so that 

1890s universities received the funding? 

Dr. RAMASWAMY. Indeed. We do have a situation where the 

1890s institutions are not being able to meet the matching requirement that we have the dollar-for-dollar matching requirement that 

77 

we have and they ask for a waiver from us, 50 percent waiver, and 

based on three criteria, natural disasters, financial exigency, or 

that they are making a commitment to find the resources, then we 

give them a waiver. And we have developed that path forward, and 

it is a challenging situation for them. 

So what we have embarked on right now is to undertake a complete detailed data gathering and analysis in all 18 states for the 

19, 1890s institutions and their 1862 counterparts. So we don’t 

want to just go and find out what is the situation with the 1890s. 

We need to know what is happening in 1862s, use that to develop 

a path forward. 

Mr. AUSTIN SCOTT of Georgia. So I am down to 1 minute. I want 

to follow up on that if I can, sir. So if I understand you, a 50 percent waiver was granted? 

Dr. RAMASWAMY. Yes. 

Mr. AUSTIN SCOTT of Georgia. So is that in the difference in what 

they—the 50 percent is the difference in what they would have gotten had it been matched and what they did get? 

Dr. RAMASWAMY. Indeed. So for every dollar, they are only able 

to come up with 50¢. 

Mr. AUSTIN SCOTT of Georgia. Right. 

Dr. RAMASWAMY. That means they are short 50¢. Mr. AUSTIN SCOTT of Georgia. Right. 

Dr. RAMASWAMY. And that prevents them from deploying the 

kind of research that they need, deploying the kind of extension 

they need, et cetera. 

Mr. AUSTIN SCOTT of Georgia. I am interested in suggestions on 

how we resolve that. That is something that Fort Valley State is 

actually just outside my district but something that is important to 

a lot of the people that are in my district. 

Dr. RAMASWAMY. Indeed. I met with the Congressional Black 

Caucus staffers and other staffers as well and shared with them 

this process that we have just embarked on, and we hope to get it 

completed and come up with an analysis and a path forward on 

how we might address this, so—— 

Mr. AUSTIN SCOTT of Georgia. Would it be possible on some of 

these to grant them an absolute waiver instead of the 50 percent 

waiver? 

Dr. RAMASWAMY. No, sir. You would not allow us to do that. Congress does not allow us to do it. 

Mr. AUSTIN SCOTT of Georgia. Thank you. Thank you, Doctor. 

Good to see you again, and thank you for your work. 

Dr. RAMASWAMY. Indeed. Thanks so much. 

The CHAIRMAN. The gentleman yields. Just following up, Dr. 

Ramaswamy, how many Federal dollars are not claimed as a result 

of lack of match? 

Dr. RAMASWAMY. We believe approximately about—well, for 

every dollar that we send, if they don’t—— 

The CHAIRMAN. The question is, I understand that the state or 

the private-sector has to come up with their share, but of the Federal dollars available to be matched against, how many of those 

Federal dollars are not matched? 

Dr. RAMASWAMY. I would like to get back to you on that with a 

specific answer, Congressman Conaway. 

78 

The CHAIRMAN. Okay. 

Dr. RAMASWAMY. Because I can tell you approximately what the 

numbers are, but I want to get back to you—— 

The CHAIRMAN. All right. 

Dr. RAMASWAMY.—specifically with the numbers. 

The CHAIRMAN. All right. There are some Federal dollars that 

aren’t claimed? 

Dr. RAMASWAMY. Yes. 

The CHAIRMAN. Okay. That would be the problem. 

Dr. RAMASWAMY. Absolutely. 

The CHAIRMAN. You want to make sure that whatever Federal 

dollars we do have available to them, that gets claimed, and then 

the private-sector or states have to come up with their share. 

Dr. RAMASWAMY. Sure. 

The CHAIRMAN. Mr. Allen, 5 minutes. 

Mr. ALLEN. Thank you, Mr. Chairman, and thank you for being 

with us today. 

In looking through the opening comments, I was interested, obviously, in the 80 percent return on the invested dollars as far as 

the—and also you mentioned to ensure farm profitability. As you 

probably know, the farmers are going to be going through a difficult time this year relative to commodity prices, and corn is down. 

I mean, everything is down. 

I would appreciate whatever you would have to say as far as 

what research we need to do to figure out this problem. 

Dr. WOTEKI. Well, thank you, Congressman, for asking about the 

return on investment as well as what are the implications for farmers today, because I know that is constantly on the top of our mind. 

There have been a variety of studies that have been done over 

the years about, well, what is this investment in ag research actually returning to the economy. And a recent analysis by Dr. Phil 

Pardy at the University of Minnesota has taken all of these studies 

together and re-analyzed them to look at what is the annualized 

rate of return on the research investment in agriculture science, 

and this recent analysis indicates that that return on the investment is about ten percent, which is pretty good. 

And it is also similar to returns on investment from other areas 

of science. Agriculture tends to have more historical data associated with our scientific investment, so there has been quite a bit 

of this type of economic analysis done. 

To your question about what does that mean for the farmer 

today. It means a lot of different things. Agriculture is so diverse 

in this country, the week before last in Salinas, California I met 

with a group of lettuce and leafy green farmers, and they are really 

worried about water issues, and they are also constantly battling 

new diseases that have emerged. And from research that ARS has 

done over the years, just over this past year, they have introduced 

about a dozen new lettuce varieties that are resistant to downy 

mildew, a big problem in the lettuce industry. 

For the citrus industry, they have introduced a new root stock 

that is resistant to the citrus greening disease. We have also, 

through the investment that we have just been talking about that 

NIFA makes to the land-grant universities, provide funding that 

supports cooperative extension that allows these wonderful reVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00082 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
79 

search universities to be able to prepare and actually provide to 

farmers a synthesis of what we know about the problem that they 

themselves are facing. 

So there is a variety of different ways that farmers are getting 

a real return on investment right now. 

Mr. ALLEN. Well, I mean, we are growing lettuce in Burke county, in Georgia, south Georgia, so I know a little bit about diverse— 

we are getting more diverse in our farming in our districts. 

And our yield per acre, we are extremely productive but it seems 

like the marketplace or the commodity price or the investment side 

is not cooperating from the standpoint we have this incredible ability to produce this great cotton, this great corn, and everything 

else, but then again, from the world standpoint, when we go out 

and price this in the market, we are getting killed. 

You have public-private businesses working together and you collaborate, you get a lot of information and that sort of thing, the 

bottom line is it is great to produce, but then you have to get something for what you are producing. Have you all done any research 

on that, as far as how we are much more productive than the world 

in our agriculture, but for whatever reason, that has got to relate 

to the bottom line? 

Dr. WOTEKI. Well, we agree with you that American agriculture 

is enormously productive, and we are, remember, the research arm 

of the Department. We do have in the statistical agencies, NASS 

and ERS, the capability for generating the kind of information that 

will provide a lot of insights into markets and that also are very 

useful to you in making policy decisions. 

There are, through the Economic Research Service, in particular, 

a variety of different studies that shed some light on these questions of U.S. competitiveness in the marketplace, and I would commend those to you. 

Mr. ALLEN. Okay. Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Rouzer, 5 minutes. 

Mr. ROUZER. Thank you, Mr. Chairman. 

Dr. Jacobs-Young, my question would be most appropriate probably directed to you, although any of you that might have some insight, feel free to share. I am interested in avian influenza. In the 

southeastern part of the country, obviously, we are bracing for that 

potential possibility this fall as the birds migrate south. Can you 

tell us where we are in terms of development of a vaccine or vaccines that are available, what you are hearing from other countries 

as it relates to that or any interaction that you are having with 

other government agencies as it relates to this issue? 

Dr. JACOBS-YOUNG. So thank you for that question. Absolutely. 

Right away, when we had the issues in the Midwest with avian influenza, ARS partnered with APHIS and began to redirect our scientists to help them, first of all, determine what we are dealing 

with, what type of strains we are dealing with. We developed the 

diagnostic test, and then we began right away on work on a vaccine 

to address the two strains that we have been facing. 

And so ARS has developed a vaccine, and we are now working 

with the Department as they determine the potentials for commerVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00083 Fmt 6633 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
80 

cialization of that vaccine, which addresses the two strains that we 

experienced this year. 

Mr. ROUZER. How much of that vaccine has been produced? Is 

production of it an issue at all in terms of quantity of birds that 

might be affected? 

Dr. JACOBS-YOUNG. It has not been transferred to a commercial 

partner as of yet for production, and so that is part of the negotiation. As my colleague just said, we are the research side, we develop the science, and so we work with our partners to negotiate 

the commercialization. 

Mr. ROUZER. I’m curious just how much vaccine would be needed. 

That is really my question. That is just a question I am curious 

about, if anybody knows? 

Dr. JACOBS-YOUNG. We do not. At this time what we can certainly submit some information for the record on what we think 

would be the approximate need for the country. 

Mr. ROUZER. Switching gears, Madam Under Secretary, I am a 

big picture guy, and it was mentioned earlier in the hearing that 

we will have a population of 9.6 billion by the year 2050. It is hard 

to believe it is already the year 2015, and according to my little 

Google search here, we have 7.3 billion people in the world today. 

Of course, by 2050, in addition to a couple billion more, there will 

be a lot less land to produce our food and fiber on. 

What is our long-term strategy? What do we need to be doing 

now in terms of the basics and as relates to our research infrastructure and everything else to meet that demand? 

Dr. WOTEKI. Well, we need to take a two-pronged approach towards our research activities to really be able to face that demand 

for food, and as I mentioned in the testimony, all of the other services that are going to be demanded of agriculture; clean water, contributing to the bioeconomy, and beyond that, being sustainable 

into all of the future generations to come after that. 

So the two-pronged approach is, first of all, to focus on agricultural productivity and to do the kind of fundamental research that 

is going to provide us with insights into how we can increase productivity, given less inputs, less land, less water, perhaps less fertilizer and to be able to produce a wide variety of health promoting 

foods with that type of input. 

The second prong is to focus on agricultural systems at the landscape level, and how can we be promoting the long-term thinking 

as well as the adaptations that our rural communities are going to 

have to make to support these systems of integrated livestock and 

crop production that will be long-term sustainable. 

So we are approaching the research towards increasing productivity by following those two pathways. If you look at the way that 

we have structured our research priorities, they reflect that, so that 

is, very briefly, how we are looking to structure our agricultural research program to meet all of those demands. 

Mr. ROUZER. Thank you, Mr. Chairman. I see my time has expired. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Abraham, 5 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman, and I thank the panel 

for being here. 

81 

Dr. Jacobs-Young, just go back to the avian influenza vaccine. I 

am from northeast Louisiana. We have large poultry farms in that 

area, and we are in the season where ducks and geese are migrating down as we speak. 

You say ARS and APHIS, you identified the two strains, got the 

vaccine spooling up. Your best guess, best estimate as to when it 

will be turned over to commercial buyers that will make this vaccine and what are the hurdles preventing that now? Why isn’t that 

vaccine already being produced commercially, because going to Mr. 

Rouzer’s point on his question, we are going to need hundreds of 

thousands, if not, millions of doses of this vaccine? 

Dr. JACOBS-YOUNG. All right. So thank you for the question. So, 

sir, what I do know is that we are currently in negotiations to identify a commercial partner. 

Mr. ABRAHAM. What is holding—I mean, do you expect that to 

happen pretty quickly? Time is running out on this year. 

Dr. JACOBS-YOUNG. Yes. That is a good question. I know that 

they are in conversations, and I know that the urgency is very, 

very much appreciated right now. We are all very concerned about 

being prepared, and so with the temperatures, and I understand 

that there are some conditions right now that we have some window to work with a commercial partner to be prepared, but the 

best I could do is get some information for the record to get back 

to you. 

We are working with APHIS, and so they are our partner in this. 

Mr. ABRAHAM. Are there certain commercial entities that are better spooled up, better to facilitate making this vaccine, and is that 

under part of the negotiation as to who can do it the fastest and 

the best? 

Dr. JACOBS-YOUNG. Well, when we develop vaccines in ARS is 

typically we try to develop vaccines that can be retrofitted into existing pharmaceutical vaccine-type production processes, and so we 

have done the same thing in this case. 

At this point, the best answer I can give you is I can give you 

some information for the record. We are the science agency, we do 

not do the negotiations with the commercial partner. 

Mr. ABRAHAM. Okay. Let me switch gears a little bit, but I will 

stay with you. Where does ARS—give me an update on y’alls relationship at MARC, 

Dr. JACOBS-YOUNG. Okay. Fantastic. 

Mr. ABRAHAM. How is that doing? 

Dr. JACOBS-YOUNG. So ARS has really had an opportunity to 

strengthen the infrastructure for our animal research inside the 

agency. Should I talk a little bit about the panel review, the external panel review? 

So we have had an external panel review at MARC. It has been 

published and shared with many Members on the Hill. In that report, they found no evidence of animal abuse and made some recommendations on things that we can strengthen at MARC, and we 

have taken those recommendations, and we have implemented 

each one of them. 

Mr. ABRAHAM. That is a voluntary reporting to the institutional 

animal center, right? 

82 

Dr. JACOBS-YOUNG. The report did not recommend voluntary reporting to the Animal Welfare Act, but we are working with APHIS 

to voluntarily have an inspection register each one of our animal 

research locations, and we have already started a pilot program. 

APHIS has already inspected, I believe, two of our locations, and 

so we are working with APHIS to determine how this would be implemented. They do this with the National Zoo, and there are other 

Federal properties that they partner with, and so we are working 

with them to register each one of our locations. 

But we have identified an animal care ombudsman here at headquarters so that if anyone had any concerns about animal welfare, 

that they could contact that individual anonymously, confidentially. 

We hired an officer, an animal care and use officer for ARS. 

What the panel found is that we had adequate policies and procedures. There just wasn’t one person that had the responsibility to 

ensure that they were being followed across this huge centralized 

agency, and now we have that person in place. 

We have implemented formal training for all of our employees involved in animal research and some of our administrators. Those 

will all be completing the training. The first phase really focus on 

the IACUC members, and so those IACUC members have been 

trained, and we have also updated our policies and procedures and 

our Memorandum of Understanding with the University of Nebraska because we have—if you remember, that location has 50 

percent ARS employees and 50 percent University of Nebraska employees, and so we clarified some things and really cleaned up our 

partnership with Nebraska in terms of this brand new MOU. 

So there has been a lot of work under way. That panel went on 

to review some of our other locations. So they had an opportunity 

to review four other locations, including several in Georgia, down 

in our Athens location. Once again, that panel came back saying 

that they found no evidence of animal abuse and that they were 

impressed with our care of our animals, and so we are awaiting the 

OIG investigation and expecting an interim report very soon. 

Mr. ABRAHAM. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. 

Mr. Yoho, 5 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. And I appreciate everybody being here this late afternoon. 

Dr. Woteki, you were saying that the funds research to take 

these advancements in the research you are doing to the consumer, 

to the farmers, to increase production—I am adding this—decrease 

chemical usage, conserve resources, feed millions here at home and 

around the world, I mean, that is what we are doing with our research, and you are a researcher. Dr. Ramaswamy, you are a researcher, and Dr. Jacobs-Young, you research. Dr. Bohman, do you 

do research also? And Ms. Picanso, is that correct? 

Ms. PICANSO. Yes. 

Mr. YOHO. That is good. Do you do any research? 

Ms. PICANSO. We do. 

Mr. YOHO. You analyze the research. 

Ms. PICANSO. We have a small research—— 

Mr. YOHO. Okay. Well, first, I come from the great State of Florida, and you are well aware of citrus greening, and I appreciate you 

83 

bringing that up. And I know you have seven initiatives that you 

are working with, and I just want to thank you from our state. My 

Governor, Rick Scott, he wants to thank you, Commissioner Adam 

Putnam, and our producers for what you have done. 

My question is this. USDA funds and conducts researches at our 

land-grant universities and other places, that produces extremely 

important research for the advancement of agriculture, veterinary 

science, and it winds up feeding people around the world, and the 

advancement of medicine. 

But yet we get researchers that call us—I can’t tell you how 

many times they call us, and they are getting hammered because 

of FOIA. In fact, I have a letter right here from a doctor, and I 

won’t mention his name, but he says I am one of 43 scientists that 

have been attacked using public records law. We are forced to surrender our e-mails in the name of transparency. However, our own 

words are distorted, twisted, and our reputations harmed when we 

did nothing wrong. 

Now I have been FOIA’d by so-and-so, and he goes on to say, 

should we allow activists and pseudo-celebrities to have access to 

our records with the sole purpose of causing reputation harm for 

an agenda based on personal views, beliefs, or hyperboles, and the 

pseudo-science versus the science that you are supporting and the 

American taxpayers are funding? 

What is your thoughts on that, and what can we do? Because we 

have these researchers doing all this work, but they are not going 

to come out and talk about it. And citrus greening, one of the 

things on the table is a genetically modified orange, and 10 years 

ago there was a genetically modified papaya that has a ringspot 

virus, and they got rid of it 10 years ago. EPA has released it, but 

nobody has the political will to say it is okay. 

But yet we are funding this kind of research, and why are we 

funding this kind of research if we don’t have the political clout 

and the research of you guys standing up? So I want to hear your 

thoughts on that, please. 

Dr. WOTEKI. Well, I have been following the recent controversies 

that have involved some of the faculty at the University of Florida, 

I was visiting last week with the Dean of Agriculture at Iowa State 

University, some of their faculty have also been FOIA’d, and quite 

frankly, it is a situation that we in the government research agencies also face all of the time with frequent FOIA requests. 

Mr. YOHO. What I would request from you is to come up and help 

us come up with a policy where we need to protect it. We had an 

18 year old student from one of our universities, her name was put 

out there, her address and all that, and I can just see it squelching 

the research, and the scientists won’t back up to advance this. So 

go ahead, I cut you off. I am sorry. 

Dr. WOTEKI. Well, what I was going to go on to say is that we 

do live in a very open society, and one of the premises of our government is transparency. So the open access laws at the state level 

and the Federal level are being now being used in some ways that 

perhaps make us uncomfortable and also make it difficult for us to 

respond. 

But I do believe that one of the best ways for the scientific community to operate in this kind of environment is to continue to be 

84 

open about our science, to participate and have activities like cooperative extension that can provide the kind of messaging off of the 

science to the general public about what this investment is actually 

bringing to them. 

Mr. YOHO. And that is thing that we need to do, and if you could 

come out, when you see these attacks, just come out with a response from the USDA and saying, ‘‘No, this is the facts behind the 

science, and the science is good, and it benefits all.’’ I appreciate 

your time. 

Mr. Chairman, I yield back. 

Dr. WOTEKI. Thank you. 

The CHAIRMAN. The gentleman yields back. 

Mr. Thompson, 5 minutes. 

Mr. THOMPSON. Thank you, Mr. Chairman. Thanks to all the 

members of this panel. If there is probably two words that define 

agriculture today, and it is science and technology, and so I really 

appreciate the research, evidence-based research, the information, 

the data. That is the other thing. 

You know, we need good data. If you don’t have good data, I see 

that all too often here in Washington, we are making decisions 

based on myth or a notion and the research and the data that is 

provided. 

So my question for you, and I struggled with this my first term. 

I saw a number of different research prospects that the taxpayers 

funded, but it seemed like they didn’t go anywhere. They may have 

gotten great outcomes, but they sat on the shelf and it seemed like 

it maybe contributed towards tenure, but the mindset was, and I 

get it, especially our university-based research at times, it is once 

you do a great research study, it is time to do the next one. 

And so what are we doing in terms of assuring that we take, 

what I think are some pretty exciting outcomes and findings, from 

much of the research that taxpayers pay for, how do we make sure 

that is being commercialized, that the outcomes are actually going 

for the public good, and how can we improve that, because I actually believe that whatever we are doing now, we can raise the bar 

on that and improve it? 

Dr. WOTEKI. Well, that has already been a particular interest of 

ours to increase the commercialization of research findings, results, 

products of our research, and also to use a lot of the research that 

is done to inform the program and the policy decisions that other 

parts of the Department are making. 

The research can also find many applications in improving the 

decisions, the Food Safety Inspection Service, or FSIS makes as 

well. But on commercialization side, we talked a little bit about already about ARS. They do have an Office of Technology Transfer 

that actively seeks to patent and then license the research that 

ARS is doing, and they are also working to develop a more entrepreneurial skilled scientific workforce within ARS. 

NIFA, in the work that it supports at universities, has also been 

very much promoting the idea that universities should be trying to 

commercialize the results of the research investment that the agency makes, and I know both Dr. Ramaswamy and Dr. Jacobs-Young 

can give you some specific examples of programmatic activities 

they have under way. 

85 

Mr. THOMPSON. That would be great. 

Dr. JACOBS-YOUNG. Yes, so just some quick examples, things that 

will resonate with each of you, especially if you have children and 

you spend some time at McDonald’s. If you noticed it now, the 

Happy Meal comes with fresh apples. That technology was developed by ARS that permits children to enjoy those fresh apples and 

they are not brown and they still taste crispy. I have had them a 

couple of times myself. 

DEET, Lactaid, mashed potatoes, those flaked potatoes, the ability to have frozen foods in your grocery stores, all of those technologies began at ARS. So part of our entire mission is to deliver 

the innovation, and so the office of technology transfer, as Dr. 

Woteki said, is critical. 

On last year alone, we filed 110 patent applications. We had 28 

licenses executed. So it is just a part of who we are. We don’t patent the patent, so some people say why don’t you have more. We 

only patent when it is necessary to disseminate the information 

and get it out there. We released 348 new varieties of plants last 

year. So the entire goal is to deliver it, and so we have a few things 

to show for the work. 

Dr. RAMASWAMY. And if I might add, Congressman Thompson. 

Mr. THOMPSON. Please. 

Dr. RAMASWAMY. Indeed, the production practices that we follow 

today, for example, no-till is the result of the research that was undertaken in this country, or the development of value-added products from whether it is corn or sugarcane or cotton or whatever 

else we have, those are the result of the research undertaken by 

ARS and land-grant university scientists with the funding that we 

provided. 

And water use, for example, that is an existential threat, as I 

like to say, and already the work that has been done at multiple 

land-grant universities and ARS labs has resulted in billions of gallons of water being saved right now, so there are a whole bunch 

of examples that we can send you about the outcomes that are happening that actually are very impactful right now. 

Mr. THOMPSON. Very good. Thank you very much. 

Thanks, Mr. Chairman. 

The CHAIRMAN. I thank the panel. Dr. Ramaswamy, you had a 

clarifying comment on the claiming of Federal dollars with respect 

to the matches? 

Dr. RAMASWAMY. Indeed, Mr. Chairman. Thank you very much 

for that opportunity. Yes, so if an institution submits to us the 

waiver and it is less than the 50 percent waiver, so if it is less than 

50 percent waiver, it is 50 percent waiver, they get the dollar from 

us, so there is no loss of those Federal dollars. But if they are asking for less than 50¢—or pardon me, they come in with less than 

50¢. 

The CHAIRMAN. Right. 

Dr. RAMASWAMY. Let’s say it is 40¢, we only give them 90¢, but 

there is remaining 10¢. We make that available to other institutions that can come up with that match as well. 

The CHAIRMAN. Still within the 1890 school group? 

Dr. RAMASWAMY. Yes, sir. 

The CHAIRMAN. Okay. 

86 

Dr. RAMASWAMY. Only within the 1890s, and we try to make sure 

that we don’t return these things to Treasury. 

The CHAIRMAN. All right. I am looking forward to your study 

that would include both sets of land-grant schools and the impact 

there because I do think it is important, Dr. Woteki, as we look at 

ways to increase that small little piece of research you were talking 

about, that we are able to match up those Federal dollars at 100 

percent from the private-sector, the states, whatever, that they recognize that they are getting a big bang for their buck. 

This panel, in particular, is a great example of why we should 

have been doing this more often and the opportunity for you to 

share with us the great things that you are doing. We probably 

ought to reverse the role. Next time we will bring you guys in first 

next time and save Farm Service Agency for dead last, but I want 

to particularly recognize the Members who were here today. 

Today is a day we would normally be home in our districts, working with folks and doing all that kind of stuff, and so the folks who 

came in today a day early will have a group in the morning that 

will be here. They are actually coming in a half a day early, but 

I want to recognize Members who showed up today to be a part of 

this, but thank you, the panel, for your staying all afternoon and 

being here. 

I know it was logistically a bit of a challenge to get everybody 

up and down the street, and I want to thank you for that effort and 

the preparation that you did coming in here this afternoon. I think 

all of our Members will leave, particularly this panel, today, better 

informed as to what you are doing and why you are doing it, and 

I, for one, and I speak on behalf of the others on the Committee, 

I want to thank you, and let you know how much we appreciate 

the work that you do day in and day out to improve production agriculture across the spectrum. 

So I would like to thank our witnesses, remind everybody we will 

pick up on Part 2 of our hearing tomorrow morning at 10 a.m. 

When we hear from the representative remaining four mission 

areas of USDA. 

Under the rules of the Committee, the record of today’s hearing 

will remain open for 10 calendar days to receive additional material, supplementary written responses from the witnesses to any 

questions posed by a Member. This hearing of the Committee on 

Agriculture is adjourned. Thank you, everybody. 

[Whereupon, at 5:34 p.m., the Committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

87 

SUBMITTED QUESTIONS

Response from Alexis Taylor, Deputy Under Secretary, Farm and Foreign 

Agricultural Services, U.S. Department of Agriculture 

Questions Submitted by Hon. Bob Goodlatte, a Representative in Congress from Virginia 

Question 1. Blender Pumps: We understand that USDA’s Biofuels Infrastructure Partnership will be providing $100 million in grant funds for the installation of 

biofuel blender pumps in 21 states. Considering that for the last 10 years, consumers have already been forced to ‘‘foot the bill’’ for the higher levels of ethanol 

blended into their gasoline, is it fair to ask them to pay another $100 million in 

order to prop up the ethanol industry? 

Answer. The U.S. Department of Agriculture (USDA) is undertaking the Biofuel 

Infrastructure Partnership because of infrastructure constraints limiting the distribution of renewable fuels. Approximately 80 to 85 percent of the 250 million vehicles registered in the United States are able to use fuels containing 15 percent ethanol, E15. Also, 14 million flex-fuel vehicles can use E85, which contains more ethanol than gasoline. However, most of the Nation’s fueling pumps can deliver only 

fuels containing a maximum of 10 percent ethanol, E10. The Biofuel Infrastructure Partnership is investing up to $100 million, to be 

matched by states and private entities at a more than one-to-one ratio, for the installation of nearly 5,000 pumps offering higher blends of ethanol. USDA believes 

this infrastructure not only will provide consumers with cleaner fuels and more options at the pump, but also will expand markets for America’s farmers and will 

boost rural economic growth and jobs. 

Question 2. COOL: As you know, the House has passed legislation to repeal Country-of-Origin Labeling (COOL) for meat products, and the Senate is considering 

similar legislation. If COOL legislation is enacted into law, what would be the cost 

and timeline for USDA to implement the changes? 

Answer. The time and cost of implementing legislation altering or repealing COOL 

would vary depending on the final legislation passed by Congress. 

Question 3. Dairy: Average dairy margins in 2015 have been just under $8.00— 

the highest coverage level available under the new Dairy Margin Protection Program. Have payments been made to producers enrolled at that coverage level, and 

if so what was the approximate total of those payments? How much has been deducted from those payments due to sequestration? 

Answer. As of November 25, 2015, approximately $648,782 has been paid, net of 

sequester, to dairy producers enrolled in the Margin Protection Program for Dairy 

(MPP-Dairy) at the $8.00 coverage level for calendar year 2015. As required by Congress pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985, 

MPP-Dairy payments approved in Fiscal Year 2015 are sequestered at a rate of 7.3 

percent. 

Response from Philip C. Karsting, Administrator, Foreign Agricultural 

Service, U.S. Department of Agriculture 

Questions Submitted by Hon. David Rouzer, a Representative in Congress from 

North Carolina 

Question 1. Administrator Phil Karsting, the Livestock and Foreign Agriculture 

Subcommittee has launched a review of food aid programs to identify ways to make 

these programs function more efficiently for both the American taxpayers and for 

the people around the world that they are designed to help while also continuing 

to help protect the proud legacy of food aid. Can you briefly highlight the role that 

USDA plays in providing food aid overseas? I understand that USDA administers 

some of its own food aid programs, but can you also explain USDA’s involvement 

in implementing Food for Peace? 

Answer. The USDA Foreign Agricultural Service (FAS) administers two food assistance programs, the Food for Progress Program (FFPr) and the McGovern-Dole 

International Food for Education and Child Nutrition (McGovern-Dole) Program. 

USDA’s FY 2016 Budget also proposed $20 million in funding to take steps towards 

implementing the Local and Regional Procurement (LRP) Program that was authorized in the Agricultural Act of 2014 (the 2014 Farm Bill). 

The principal goals of FFPr are to improve agricultural productivity and to expand trade of agricultural products in developing countries. To achieve these goals, 

USDA donates U.S. agricultural commodities that it procures commercially or that 

are in Commodity Credit Corporation inventory. Proceeds from monetization, the 

sale abroad of these commodities, fund FFPr agricultural development projects. Proceeds may also be used for humanitarian projects targeted at hunger and malnutriVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00091 Fmt 6621 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
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tion. FFPr projects range in scope from training farmers and public officials in animal and plant health systems, implementing new farming methods appropriate to 

the land, building or improving road and utility systems, establishing producer cooperatives, providing microcredit, and establishing agricultural value chains. 

McGovern-Dole provides for the donation of U.S. agricultural commodities, and financial and technical assistance, to support school feeding and maternal and child 

nutrition projects in developing countries. The primary objectives of the McGovernDole are to reduce hunger and improve literacy and primary education, especially 

for girls. The program is projected to assist three million women and children worldwide in 2016. 

Funds appropriated for LRP through McGovern-Dole in FY 2016 will support the 

production of local and regional commodities that can be procured to provide nutritional complements to U.S. commodities for school feeding programs and boost incomes of smallholder farmers. Local and regional procurement tends to be cheaper 

and faster than shipping U.S. commodities overseas, allowing the funding to reach 

more families, feed more children, and improve nutrition. While the program will 

focus primarily on development programs, the 2014 Farm Bill also authorizes the 

use of the LRP Program for emergency responses if needed, in consultation with 

U.S. Agency for International Development (USAID). 

The Food for Peace Title II food aid program is administered by the Office of Food 

for Peace (FFP) in the USAID. USAID/FFP provides emergency food assistance to 

those affected by conflict and natural disasters and provides development food assistance to address the underlying causes of hunger. During an emergency response 

using Title II resources, USAID principally uses U.S. in-kind food aid, and a small 

amount of Title II is available for locally or regionally procured food, food vouchers 

and transfers to ensure communities have access to food. In FY 2014, USAID 

reached more than 31 million people in 32 countries with Title II resources. 

USDA’s Farm Service Agency coordinates the purchases of U.S. commodities and 

transportation provided under U.S. overseas food assistance programs. In FY 2014, 

1.45 million metric tons of U.S. food assistance were delivered at a cost of $1.81 billion. 

USDA and USAID coordinate our food assistance programs to be complementary 

and reach the largest number of beneficiaries. 

Question 2. Administrator Phil Karsting, what regions of the world is FAS 

prioritizing for the next 5 years? 

Answer. FAS’ global network of agricultural economists, marketing experts, negotiators, and trade specialists in Washington, D.C., and 95 international offices covering 167 countries support U.S. agricultural exports to all regions of the world. In 

FY 2014, exports of U.S. agricultural products reached a record $152.3 billion, supporting nearly one million American jobs. FY 2015 was another exceptional year 

with U.S. agricultural exports of $139.7 billion, the third highest level on record. 

Over the next 5 years, FAS will use the full range of tools at its disposal to help 

expand market opportunities in all major regions of the world. Our global presence 

and our consequent flexibility to adapt to emerging situations are among our core 

strengths. Three geographic areas stand out for their short-to-medium term opportunities, and these are priorities for FAS as we move ahead. 

China. U.S. agricultural exports to China have boomed from $2 billion in 2001 

(the year China joined the WTO) to over $25 billion in 2014, but we see significant 

additional potential. FAS is strongly committed to that market and to simultaneously holding China to its existing trade agreement commitments. We currently 

have six offices in five cities in China, by far our largest overseas presence. FAS 

leads USDA efforts to engage with China, both bilaterally (via the Strategic & Economic Dialogue and the Joint Commission on Commerce and Trade, both of which 

are annual events in which Secretary Vilsack participates and multilaterally (within 

APEC [the Asia Pacific Economic Cooperation forum]), to promote agricultural biotechnology and other innovative technologies, thereby advancing global food security, fostering better climate adaptability, and paving the way for increased U.S. agricultural exports. 

The Trans-Pacific Partnership (TPP) provides tremendous new opportunities for 

our stakeholders. TPP is a big win for U.S. agriculture in priority markets like 

Japan, Vietnam, Malaysia, and Canada. Not only does it create tariff preferences 

to keep us competitive, it also sets new benchmarks for trade agreements and will 

change the discussion on non-tariff issues like geographic indications, agricultural 

biotechnology, and sanitary and phytosanitary (SPS) measures. We see this agreement as precedent-setting. We expect our focus in the Pacific Rim to be on implementation of this agreement. We want to raise the bar on trade commitments to 

the level that the United States already meets through its own rules-based systems. 

89 

The Transatlantic Trade and Investment Partnership (T-TIP) holds out the promise of substantially improved access to the European Union (EU), one of the world’s 

largest economies, whose consumers are among the highest per-capita income earners in the world. The United States is currently one of only a very small number 

of countries that does not have preferential access to the EU market under existing 

trade agreements or preference programs, and we need to level the field for our exporters competing in this lucrative market. In FY 2015, U.S. exports of agricultural 

products to the EU were valued at $12.3 billion, making the EU as a whole our fifth 

largest export market. For the past 13 years, the United States has had an agricultural product trade deficit vis-a`-vis the EU. 

Around the globe FAS will continue to provide unbiased public reporting on the 

outlook for a full range of agricultural commodities, provide constituent servicing on 

the ground, advise and oversee our market development Cooperators, monitor and 

enforce our existing obligations under trade agreements, address SPS barriers to 

trade, and help developing countries establish science-based regulatory systems. 

Each year FAS develops specific strategies for each country covered by an FAS office. The strategies identify strengths, weaknesses, opportunities, and concerns 

there. These strategies enable FAS to quickly adapt to new conditions that might 

influence FAS’ promotion of U.S. agricultural products. 

FAS food aid and capacity building programs help developing countries increase 

their capacity to feed vulnerable populations and engage in international trade. In 

soliciting for Fiscal Year 2016 awards, priority countries for the McGovern-Dole program were identified in Asia, Africa, and Central America and the Caribbean. For 

the Food for Progress program awards, priority countries were identified in Asia, 

Africa, and Central America. 

Questions Submitted by Hon. Alma S. Adams, a Representative in Congress from 

North Carolina 

Question 1. Local and Regional Procurement. According to a 2013 Cornell study 

of three countries, food aid recipients were unconditionally more satisfied with LRP 

compared to U.S. shipped commodities. This sentiment was most pronounced among 

the poorest ‘‘less-well-off’’ recipients. What steps are being taken to ensure that commodity foods shipped are compatible with local tastes and dietary needs? If U.S. 

shipped commodities are not found to be compatible with local tastes and dietary 

needs, what steps are taken to address this problem and ensure beneficiaries are 

actually utilizing U.S. commodities? 

Answer. With respect to USDA’s programs, in FY 2013, USDA began offering enhanced guidance to applicants seeking funding through the McGovern-Dole International Food for Education and Child Nutrition Program (McGovern-Dole) related 

to nutritional and micronutrient deficiencies of intended beneficiaries. McGovernDole applicants are now required to provide a detailed explanation of how the requested commodity and ration size will help address these deficiencies. In addition, 

recipients of awards under McGovern-Dole choose the commodities that are donated 

under the program based on their in-country work experience and familiarity with 

the culture, including local diets. In the case of those commodities that perhaps are 

less familiar to the school children, the project implementers often will provide 

training to the beneficiaries on how to best use and prepare the newly introduced 

product in the local diet. Additionally, during the proposal review process prior to 

making an award, FAS seeks input from nutritionists and, often, local nationals, 

who understand the cultural food preferences. 

As an example, in Nicaragua, a private voluntary organization called Food for the 

Poor, with the help of the United States Potato Board and the Fabretto Children’s 

Foundation, reevaluated the school meal menu to find different ways to incorporate 

dehydrated potatoes, combined with local food resources. Over 600 parents and 

teachers were trained on proper storage, nutritional benefits, and preparation of 

dishes using dehydrated potatoes with local affordable ingredients. 

The local communities responded well to the product, given its versatility and 

ability to substitute for corn to produce dishes similar to the local diet. Local recipes 

were adjusted to substitute dehydrated potatoes for corn or rice. These recipes included Dehydrated Potato Enchiladas with Beans, Dehydrated Potato Tortillas and 

Dehydrated Potato Dumpling Soup. 

With respect to USAID’s programs, USAID’s Office of Food for Peace (USAID/ 

FFP) determines the best means of responding to food security emergencies-whether 

that assistance is provided with U.S. in-kind commodities, locally and/or regionally 

procured commodities, food vouchers, or cash transfers for food—based on the context of each individual humanitarian response. This decision making process is 

based on the timeliness for each modality; local market conditions; cost effectiveness; feasibility and scale; beneficiary targeting and gender; security; program objecVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00093 Fmt 6621 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
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tives; and beneficiary preferences—including compatibility with local tastes and dietary needs. Most USAID food aid is provided through U.S. in-kind commodities in 

Food for Peace Title II programs, and few of these funds can currently be used for 

cash-based food assistance such as local and regional procurement or food vouchers, 

although the Budget seeks to increase our flexibility within Title II to use the most 

appropriate tool for each emergency. 

USAID/FFP relies primarily on limited funds in the International Disaster Assistance (IDA) account currently to support cash-based assistance programs. For example, in Syria, USAID is using IDA resources to support an electronic food voucher 

program to reach millions of refugees across five countries, many of whom are living 

in cities and towns with functioning markets. This approach enables refugees to 

have more diversity of choice, enabling preparation of meals with more nutritious 

foods. 

Question 2. Local and Regional Procurement. When coupled with existing programs that strengthen local community systems and infrastructure, LRP can be easily adopted by knowledgeable beneficiaries with minimal impact on local markets. 

Given that most food assistance programs include a local capacity building component (McGovern-Dole FFE, Title II non-emergency programming) has there been 

any consideration for use of LRP to help transition to locally available products in 

these programs? If appropriated, how would the $20 million for LRP be utilized? Besides working with McGovern-Dole programs, do you see an opportunity to pair the 

new LRP program with Title II non-emergency programs? 

Answer. Local and regional agricultural procurement programs can help build sustainable production of locally grown food and strengthen local value chains, developing appropriate supply chains for the procurement of commodities from local producers. School meals using locally purchased foods will add locally preferred complementary commodities to the meals, which will make them more appealing to the 

children and help increase nutrition. In countries where supply chains need to be 

strengthened in order to support a workable and reliable supply of food, the recipients of awards under USDA’s Local and Regional Procurement Program (LRP) can 

work with producers, school authorities, and local municipalities in communities 

around schools to provide technical and management expertise to build reliable supply systems, as well as to procure commodities. The FY 2016 Budget requested $20 

million for the LRP program to serve as a complementary tool to support existing 

food aid programs, especially for the McGovern-Dole program. 

There may be potential opportunities for USDA to pair projects under LRP with 

USAID’s Title II non-emergency programs. In FY 2015, for example, USAID targeted two countries, Bangladesh and Mali, for development programs in numerous 

agriculturally-related topics, highlighting access to food, nutrition, and improving 

agricultural productivity. USDA has not only worked in both countries but also 

funded Food for Progress and McGovern-Dole projects there. USDA’s LRP Program 

could be implemented to assist smallholder farmers in enhancing their productivity 

with methods that mitigate climate change and prevent environmental hazards. 

In the 2014 Farm Bill, USAID received meaningful flexibility through Section 

202(e) in the Food for Peace Act to enhance Title II programs, including through 

the use of local and regional procurement and other market based food assistance 

interventions. With this new flexibility, for example, USAID has been able to integrate local food items towards the end of the 5 year development programs in order 

to facilitate a smoother transition for beneficiaries, support local markets, and enhance the overall sustainability of the programs. 

Response from Brandon Willis, Administrator, Risk Management Agency, 

U.S. Department of Agriculture 

Question Submitted by Hon. David Rouzer, a Representative in Congress from North 

Carolina 

Question. Administrator Brandon Willis, the 2014 Farm Bill directs FCIC to study 

a variety of topics that could lead to additional insurance policies for animal agriculture. FCIC is required to enter into contracts to conduct research and development on policies for poultry business interruption insurance for poultry growers, including losses due to bankruptcy of an integrator (owner-processor). FCIC is also required to contract for studies on insuring swine producers for a catastrophic event 

and insuring poultry producers for a catastrophic event. Can you please provide an 

update on how these studies are progressing? 

Answer. The Risk Management Agency (RMA) has contracted to provide feasibility studies for poultry catastrophic disease losses, poultry business interruption, 

and swine catastrophic disease losses, as required by the farm bill. RMA expects to 

submit these reports to Congress this winter. 

91 

Response from Sonny Ramaswamy, Ph.D., Director, National Institute of 

Food and Agriculture, U.S. Department of Agriculture 

Question Submitted by Hon. Alma S. Adams, a Representative in Congress from 

North Carolina 

Question. The 1890 Appropriation for the Expanded Food and Nutrition Education 

Program (EFENP) has increased over the years, however the funds are minute in 

comparison to the 1862 Institutions. The limited amount of money makes it difficult 

to develop a significant enough program to demonstrate widespread impact. Are 

there plans to increase the funding appropriations of 1890 Institutions? 

Answer. The Expanded Food and Nutrition Program allocations to 1862 and 1890 

institutions are based on a statutory formula distribution provided in the authorizing legislation. As such, NIFA does not have the authority to alter the proportion 

of EFNEP funding that is provided to 1890 versus 1862 institutions. The current 

formula provides that 1862 institutions shall receive a base in an amount equaling 

their FY 1981 allocation, and a minimum of $100,000 is distributed to each 1862 

and 1890 land-grant institution including the University of the District of Columbia. 

The remainder is distributed based on formulas that use the latest Census data for 

population living at or below 125 percent of the poverty level. Specifically, a percentage of the increase in funding that exceeds the FY 2007 appropriated level is distributed to the 1890 Land-Grant Institutions according to the pro-rata population 

for each institution at or below 125 percent of the poverty level; and the remainder 

to the 1862 land-grant institutions according to the pro-rata population for each institution at or below 125 percent of the poverty level. 

Response from Renee Picanso, Associate Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture 

Question Submitted by Hon. Alma S. Adams, a Representative in Congress from 

North Carolina 

Question. The Ag Census data seems to provide an inaccurate (duplication) for the 

number of producers. As an example, a husband and wife may both be listed as the 

primary operator, which increases the overall number of farmers. This methodology 

makes it difficult to determine the true number of farmers. Are there plans to modify the current data collection methods to reduce duplication? 

Answer. The Census of Agriculture collects data both on the number of farms and 

the number of people who operate the farms. An operator is defined as a person 

making day to day decisions for the farm operation. Since the 2002 Census of Agriculture, the Census allows respondents to report the total number of operators involved in day to day decision making, as well as detailed demographic characteristics for up to three of those operators. One of these operators is defined as the principal operator or senior partner. The number of principal operators is equal to the 

number of farms. For the 2012 Census, there were 2,109,303 farms, 2,109,303 principal operators, and 3,233,358 total farm operators. 

NASS is currently in the process of testing and updating the Census report form 

for the 2017 Census of Agriculture. In response to recommendations received from 

an outside panel commissioned to look at collection of demographic data on the Census, NASS will collect detailed demographic data on up to four operators per farm, 

and allow the respondent to designate multiple principal operators. As in previous 

Censuses, NASS will show information separately for the count of farms, and the 

count of persons operating those farms. 

(93) 

HEARING TO REVIEW USDA ORGANIZATION 

AND PROGRAM ADMINISTRATION 

(PART 2) 

WEDNESDAY, SEPTEMBER 16, 2015 

HOUSE OF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Washington, D.C. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

1300, Longworth House Office Building, Hon. K. Michael Conaway 

[Chairman of the Committee] presiding. 

Members present: Representatives Conaway, Neugebauer, Goodlatte, Lucas, King, Rogers, Thompson, Austin Scott of Georgia, 

Crawford, DesJarlais, Gibson, Hartzler, Davis, Yoho, Walorski, 

Allen, Rouzer, Abraham, Moolenaar, Kelly, Peterson, Fudge, 

McGovern, Plaskett, Adams, and Ashford. 

Staff present: Anne DeCesaro, Bart Fischer, Caleb Crosswhite, 

Callie McAdams, Haley Graves, Jessica Carter, John Goldberg, 

Josh Maxwell, Mary Nowak, Mollie Wilken, Paul Balzano, Skylar 

Sowder, Jadi Chapman, John Konya, Andy Baker, Anne Simmons, 

Evan Jurkovich, Keith Jones, Lisa Shelton, Liz Friedlander, Mary 

Knigge, Mike Stranz, Nicole Scott, and Carly Reedholm. 

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A 

REPRESENTATIVE IN CONGRESS FROM TEXAS 

The CHAIRMAN. This hearing of the Committee on Agriculture, to 

review USDA organization and program administration, will come 

to order. I have asked Rick Crawford to open us with a prayer. 

Rick. 

Mr. CRAWFORD. Thank you, Mr. Chairman. 

Heavenly Father, we bow humbly before you. We are thankful for 

every blessing of life and thankful for this nation that you have 

given us and thankful for the opportunity to represent those citizens of this great nation in our work here today. Father, we just 

ask for your wisdom, guidance, and discernment in all that we say 

and to be pleasing to you. In Jesus’ name. Amen. 

The CHAIRMAN. Thank you, Rick. Ranking Member Peterson is 

en route. He had a speech at 9:30, so he said to go ahead and start 

this morning on time, and he will get here as quickly as he can. 

We will pick up where we left off. I ask that any Member who 

wants to submit an opening statement for the record so the witnesses may begin the testimony to ensure there is ample time for 

questions. 

94 

The chair will remind Members they will be recognized for questioning in the order of seniority for Members who were here at the 

start at the hearing. After that Members will be recognized in 

order of arrival. I appreciate Members’ understanding. 

Witnesses are reminded to limit their oral presentations to 5 

minutes. All written statements will be included in the record. 

Over the course of today’s hearing, following the testimony of each 

witness everyone at the table will be made available for questions. 

So once Lisa finishes, then we will open the questions, and I hope 

to get responses from the appropriate administrator. 

I would like to welcome our first witness group to the table. The 

Honorable Lisa Mensah, who is Under Secretary of Rural Development, USDA. Accompanying her today is Brandon McBride, who is 

the Administrator of Rural Utility Service; Tony Hernandez, who 

is the Administrator for Rural Housing. And pinch hitting is Samuel Rikkers, who is the Acting Administrator for Rural Business— 

Cooperative Service. 

Lisa, the microphone is yours. 

STATEMENT OF HON. LISA MENSAH, UNDER SECRETARY, 

RURAL DEVELOPMENT, U.S. DEPARTMENT OF 

AGRICULTURE, WASHINGTON, D.C.; ACCOMPANIED BY 

BRANDON MCBRIDE, ADMINISTRATOR, RURAL UTILITIES 

SERVICE, USDA; TONY HERNANDEZ, ADMINISTRATOR, 

RURAL HOUSING SERVICE, USDA; AND SAMUEL H. RIKKERS, 

ACTING ADMINISTRATOR, RURAL BUSINESS—COOPERATIVE 

SERVICE, USDA 

Ms. MENSAH. Thank you also to the other Members and Ranking 

Member Peterson when he arrives. I want to thank you for the opportunity to discuss the program successes, challenges, of the Department of Agriculture’s Rural Development mission area. I am 

accompanied this morning by Rural Development Administrators 

Brandon McBride, Sam Rikkers, and Tony Hernandez. Rural Development manages a loan portfolio of more than $200 

billion through nearly 50 programs and services organized into 

three distinct areas: Rural business and cooperative services, rural 

utility programs, and rural housing and community facilities programs. Together we are focused on increasing economic opportunities and improving the quality of life for all rural Americans. 

Some of our resources finance large, long-term loans to develop 

and grow businesses. Other resources are invested in smaller, more 

specific projects targeted at the smallest producers. Further, support is offered by our agency to address underlying utility, housing, 

or community needs of large rural areas. All of these investments 

offer hope and support needed to encourage economic development. 

I am deeply appreciative of the authorities provided to our agency 

by Congress through the 2014 Farm Bill. 

You renew our ability to deepen our work in our core programs 

on behalf of rural America, and those programs are so important. 

For example, Rural Development provided a business and industry 

guaranteed loan to a Somerset, Pennsylvania company to purchase 

equipment to return manufacturing operations from China to the 

U.S. The company manufactures and distributes respiratory medical devices and products such as nebulizers, oxygen concentrators, 

95 

and CPAP equipment. USDA’s rural development assistance means 

that these products are now proudly stamped made in the USA by 

American workers. 

We are also supporting more basic needs like access to clean 

water or to food. Second Harvest of Georgia is a nonprofit that 

feeds hungry people in 30 south Georgia counties. We provided 

funding to build a distribution facility with a commercial kitchen 

that can produce up to 10,000 meals a day for south Georgia residents in need. Since 2009, Rural Development has helped more 

than 900,000 rural families to buy, repair, or refinance a home. We 

provided funding for 3,000 multi-family housing developments, and 

we are successfully delivering new or improved broadband service 

to 1.5 million households, businesses, schools, libraries, and community facilities. 

We helped modernize rural electric infrastructure for about 81⁄2

million rural businesses and families, and we provided grants and 

loans for water and wastewater projects to help safeguard the 

health of more than 14.5 million rural residents. 

We understand the need to invest wisely and stretch our limited 

resources. Our portfolio is full of examples of Rural Development 

working with others to understand the needs of the region and support projects that encourage development. Over the past 2 years, 

Rural Development leveraged over $2 billion in Community Facilities direct funds with $1.2 billion from institutional investors in the 

capital credit markets. 

Partnership projects are spurring economic growth and job creation while providing access to health care, education, and other 

critical services. True public-private partnerships are built on 

shared vision and mutual trust. Our job is to be fair, reliable, and 

consistent partners. 

Thanks to Congress, Rural Development is a uniquely structured 

agency with resources to encourage and support successful systems 

that are already at work in communities or to help develop those 

that are desperately needed. 

In the time I have been with USDA, I have witnessed rural resiliency on a very personal level. I watched the town of Floresville, 

Texas turn out in force to launch their improved water treatment 

system. 

I visited the Peoples Rural Telephone Cooperative in Jackson 

County, Kentucky, which built a state-of-the-art network that offers isolated rural residents the same educational and cultural opportunities available to residents in urban areas. 

I toured a manufacturer in Brundige, Alabama that is expanding 

its business with support from Rural Development. Each of these 

investments made in rural communities is an investment in our 

country’s future. 

I am a passionate advocate for tapping the potential of rural 

areas; so the communities located in every holler, hilltop, plain, 

and prairie are part of America’s story of growth and prosperity. 

I look forward to working with you in the coming months to ensure continued support for rural development, and I very much appreciate the opportunity to testify, and I am happy to answer your 

questions. 

[The prepared statement of Ms. Mensah follows:] 

96 

PREPARED STATEMENT OF HON. LISA MENSAH, UNDER SECRETARY, RURAL

DEVELOPMENT, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Chairman Conaway, Ranking Member Peterson, and Members of the Committee, 

thank you for the opportunity to discuss the programs, successes and challenges of 

the Department of Agriculture’s Rural Development mission area. I am accompanied 

this morning/afternoon by Mr. Brandon McBride, Mr. Sam Rikkers, and Mr. Tony 

Hernandez, Administrators for Rural Development’s Utilities, Business and Cooperatives and Housing and Community Facilities Programs, respectively. 

The Rural Utilities Service (RUS) has funded basic infrastructure services for 80 

years and provides the critical financial support for electric infrastructure, 

broadband to offer access to the digital economy, and clean, safe water to help 

healthy rural communities grow and prosper. Our Rural Business—Cooperative 

Service (RBS), in partnership with other public and private-sector stakeholders, are 

critical to improving lives of rural Americans. RBCS program not only promote rural 

business employment opportunities and support key energy project investments, but 

enable rural Americans to compete in the global economy. Last, our Rural Housing 

Service and Community Facilities (RHS and CF) make critical loans and grants to 

support rural residents and the communities in which they live. Congress has defined for us a tremendous set of housing and community development programs to 

ensure that rural families have access to safe, affordable homes and thriving communities. 

The men and women of my Agency, and the programs we administer on a daily 

basis, are committed to increasing the economic opportunities and improving the 

quality of life for all rural Americans. Approximately 15 percent of the population 

of the United States is considered rural. Yet that comparatively small percentage 

belies a far more relevant statistic: nearly 75 percent of our land mass is rural. So 

that 15 percent—which happens to represent forty-six million American citizens— 

feeds the world. Rural Development works on a daily basis to determine and support the needs of that ‘‘15 percent.’’ 

The 5,000 Rural Development professionals I lead work daily to help maintain 

and upgrade infrastructure investments that are so important to the modernization 

of rural America; to connect citizens to the video and data-intensive world of 

broadband; to build a cleaner, greener future through renewable power and energy 

efficiency; to reduce child poverty; to cope with growing healthcare needs of an aging 

population; and to make rural communities a place where young people will want 

to stay, start families, build businesses and create futures. 

Rural Development has a loan portfolio of more than $200 billion and invested 

upwards of $28 billion in 2014 alone assisting rural areas throughout the United 

States and its territories. We maintain a program delivery structure that Congress 

has supported since our founding, and our customers appreciate. Rural Development 

has financed large, long-term loans to develop and grow businesses. Other resources 

are invested in smaller, more specific projects targeted at the smallest producers. 

Further support is offered by our Agency to address underlying utility housing or 

community facility needs of rural communities. All of these investments offer the 

hope and support needed to encourage economic development. 

For example, Rural Development provided DeVilbiss Healthcare, LLC with a 

Business and Industry guaranteed loan to purchase equipment and machinery and 

to transfer manufacturing operations from China back to the United States. 

DeVilbiss manufactures and distributes respiratory medical devices and products 

such as nebulizers, oxygen concentrators, and CPAP equipment. The assistance preserves 92 jobs and creates 20 new jobs in rural Pennsylvania. 

This is just one example of many forward-leaning projects that Rural Development is proud to encourage. Our fundamental mission is to support thriving selfsustaining and prosperous rural communities. We’re doing so through the authorities provided to our Agency by Congress and through the added resources afforded 

in the annual appropriations legislation and the 2014 Farm Bill. The farm bill renewed our authority to deepen our work in our core programs for rural America. 

And for that, I am deeply appreciative. 

As Members of the Committee on Agriculture, you know better than most the 

challenges that face rural Americans. Rural communities are characterized by their 

isolation from population centers and product markets. These communities benefit 

most from initiatives that integrate local institutions and businesses with state and 

Federal agencies that have intimate knowledge of local needs. At the same time, 

these same communities have an enormous amount of importance to the health and 

well-being of our entire nation. The report, Promoting Growth in all Regions, released by the Organisation for Economic Co-operation and Development (OECD), inVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00100 Fmt 6601 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
97 

dicates investments in infrastructure and human capital in rural places are vital for 

national growth. 

For more than 80 years, Rural Development has doggedly pursued success for 

rural America. We are committed to working with partners to best serve rural 

areas. We understand that solid public-private partnerships and well-placed intentional investments can—quite literally—mean life or death for some communities. 

Pikeville Medical Center in Kentucky is a private, nonprofit (501(c)(3)) organization that provides comprehensive health care services through its 261 bed acute care 

and in-patient rehabilitation hospital. The Hospital primarily serves patients from 

persistent poverty areas. To meet a growing demand for services, Pikeville Medical 

Center used the Community Facilities (CF) program to construct ea new medical office building containing research facilities, outpatient surgery suites, endoscopy facilities, physical exam space, labs and lecture halls. 

Building on this success, and working with others to understanding the needs of the region, Rural Development provided a $40 million Community Facilities loan to 

the University of Pikeville (UPIKE) for the construction of a health professions education building that provides both instruction and demonstration for the new College of Optometry, School of Nursing, and other student support services. This funding enabled USDA to establish a public-private partnership for the new facility 

whereby UPIKE provided an additional $5.5 million, $3.7 million in private donations were raised, the Appalachian Regional Commission provided a $1.5 million 

grant, and the U.S. Economic Development Administration provided a $1.3 million 

grant. 

This partnership resulted in a facility that added 75 direct jobs to the local economy and created a distributed community-based clinic model, adding 25 to 30 jobs 

in local clinics. In addition, the community benefited from the facility as there was 

no College of Optometry serving that state or many of its neighbors previously. 

USDA Rural Development, through its Community Facilities programs, has taken 

a leadership role in facilitating and strengthening public-private partnerships to ensure that rural residents have the opportunity for a brighter future with good 

schools, quality health care and other critical community infrastructure needs. 

In communities like Pikeville, public-private partnership has bought together critical financial, project development and technical expertise, resources and innovation 

to large complex community infrastructure projects at a time when Agency staff resources have been reduced; it has strengthened underwriting with another set of 

eyes thereby reducing Agency credit risk and has provided the Agency with a long 

term partnership for servicing loans along with another avenue for communication 

with the borrower. More importantly, it has allowed USDA to assist more rural communities, invest in more essential community facilities and help more rural residents. 

From Fiscal Year 2012 to Fiscal Year 2014, Rural Development invested in 335 

Public-Private Partnership community infrastructure projects across rural America 

in 49 states. The Agency leveraged over $2 billion in community facilities direct loan 

funds, with $1.2 billion from institutional investors and the capital credit markets 

to strengthen investment in critical community infrastructure projects spurring economic growth, job creation and access to improved health care, education and other 

critical services. These Community Facility investments are projected to create or 

save approximately 75,000 quality paying jobs. 

True public partnerships are built on shared vision and mutual trust. Our job is 

to be fair, reliable and consistent partners. Thanks to Congress, Rural Development 

is a uniquely structured Agency with the resources to encourage and support successful systems already at work in communities or develop those that are desperately needed. 

Today, we are using lessons learned in our more established programs to capitalize on opportunities in other areas within the mission too. Consider our work in 

the rapidly expanding area of local and regional food systems. The concept behind 

the ‘‘Know Your Farmer, Know Your Food’’ initiative now includes more women, 

more people of color, and more veterans. 

In Poplarville, Mississippi, Ivory Smith, a veteran of the wars in Iraq and Afghanistan, is trying his hand at hydroponics by growing rainbow radishes and pea 

shoots. 

Funded in part by USDA Rural Development, an ‘‘Armed to Farm’’ workshop 

helped Ivory learn to better manage the business side of his operation. After shadowing working agribusinesses, he says he now feels more confident about the future 

of his company, SmithPonics. 

I am deeply moved by seeing taxpayer dollars at work in rural communities. 

There is something extraordinary about rural America’s ability to survive and 

thrive. It is a place where values count and where stewardship is a meaningful obliVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00101 Fmt 6601 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
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gation. Financing businesses like SmithPonics, which helps Ivory put food on the 

table and contribute to the local economy, is an amazing privilege. 

Over the course of the last couple of years, we have chosen to be proactive in identifying and pursuing areas of greatest need in rural America, rather than waiting 

for those places to find us. We’re doing so through StrikeForce, Promise Zones, 

Stronger Economies Together and other such initiatives that you are well familiar 

with. These efforts are just a few of the many reasons that I am so fiercely proud 

of the 5,000 Rural Development professionals nationwide. Our Agency and its partners are willing to help us move much needed assistance to the places that need 

it most. 

In the time that I’ve been with USDA, I’ve witnessed rural resiliency on a very 

personal level. I watched the town of Floresville, Texas turn out in force to launch 

their improved water treatment system. I visited the Peoples Rural Telephone Cooperative in Jackson County, Kentucky which built a state-of-the-art, fiber-to-thepremise network that offers isolated rural residents the same economic, educational 

and social opportunities available to residents in urban areas. I toured a condiment 

manufacturer in Brundige, Alabama that is expanding its business and market 

share with support from Rural Development. Each of these investments made in 

rural communities is an investment in our country’s future. 

Throughout all of these visits, it was clear to me that giving our rural children 

a reason not to leave was extremely important to local community leaders, family 

members and businesses. More importantly, I know it can be done. Jeanne and Dan 

Carver own and operate Imperial Stock Ranch in Wasco County, Oregon. This family business supplied wool for Ralph Lauren-designed sweaters worn by United 

States athletes at the Sochi Winter Olympics. Later, they launched a ‘‘ranch-to-runway’’ line of clothing with award-winning fashion designer Anna Cohen. They did 

all of this nearly three thousand miles removed from the frenetic pace of New York 

City’s fashion district. The Carvers have benefited from USDA’s Value-Added Producer Grant (VAPG) program since 2008, using the funds for planning and capital 

assistance. In this instance, the VAPG program—one of nearly 50 programs and 

services administered by Rural Development—is helping breathe life back into the 

textile industry and creating jobs right here in the United States. 

Another critical need for economic growth in rural areas is access to affordable 

water and wastewater services, electricity and broadband. Once again, Rural Development is working with partners to provide rural areas with these modern day necessities of business. 

We provided grants and loans for water and wastewater projects to help safeguard 

the health of more than 14.5 million rural residents since 2009. To support water 

utilities and households coping with drought in California, in June 2015, we pledged 

to provide at least $7 million to address the drought-related needs of water utilities 

and households. 

Since the creation of the Rural Electrification Administration (REA), we have 

worked to provide reliable electric infrastructure for rural residents and businesses. 

Rural Development has funded over $1.1 billion in smart grid technology during the 

Obama Administration. A recent loan to Minnesota Valley Electric Cooperative, for 

example, includes $1.9 million for smart grid projects to better manage electric load 

and equip consumers with information to enhance energy efficiency. 

Furthermore, broadband investments help rural communities attract new businesses; allow schools to improve educational opportunities through distance learning; and improve healthcare by providing cost-effective remote diagnosis and care. 

In many cases, the risks associated with building broadband infrastructure in rural 

areas can be too cost prohibitive for the private-sector. The Federal Government 

plays a necessary role in partnering with local institutions and communities in 

these instances. USDA works to carefully balance the need to provide broadband 

service to under- and unserved areas with the risks associated with funding large 

infrastructure projects in rural areas with low population density. Just as REA 

brought electricity to rural areas, Rural Development’s commitment to bringing high 

speed Internet to rural areas will make businesses more competitive ad bring opportunities to rural citizens that have long been afforded to urban citizens. 

Under the American Recovery and Reinvestment Act of 2009, Congress gave us 

the authority to continue to support delivery of broadband to remote and hard-toserve areas. We are proud to share with you that 244 of the 255 funded projects 

are complete and are successfully delivering new or improved service to nearly 

260,000 rural households, more than 17,000 businesses, and approximately 1,880 

schools, libraries and health care facilities. These new projects will continue to attract subscribers as they deliver educational and health care services and strengthen rural economies through connections to the global marketplace. In total, USDA 

investments in all broadband programs has delivered service to 1.5 million houseVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00102 Fmt 6601 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
99 

* Editor’s note: The testimony is published as received, there was no attached infographic. 

holds, businesses, schools, libraries, and community facilities since 2009 while also 

being good stewards of taxpayer dollars. Rest assured, we are committed to the 

work that remains to be done. Fewer than 50 percent of those who live in rural 

areas have access to the same high-speed Internet services that those who live in 

urban areas enjoy. We expect the White House later this month to release a report 

submitted by USDA and the Department of Commerce on ways to continue to bring 

broadband to unserved areas. We believe that the Farm Bill Broadband Loan Program will be an important resource in this effort. 

A special point of pride for Rural Development is our housing programs. Since 

2009, Rural Development has helped more than 900,000 rural families buy, repair 

or refinance a home and provided funding for 3,000 multi-family housing developments. Access to safe, modest, affordable housing is vitally important to the health 

and growth of rural areas. Helping to make the American Dream a reality is a tremendous responsibility. I am delighted that through our work Rural Development 

housing programs are often stepping stones on the journey to homeownership which 

will help build wealth and security for rural families. We offer one of the best home 

mortgages in the United States and boast a low default rate. 

In this, the 50th year of Rural Development’s Mutual Self-Help Housing Program, 

we also completed 50,000 homes through partnerships and sweat equity. In fact, 

several Members of Congress and Congressional staff participated in self-help builds 

this year to help us mark this important milestone. 

Rural Development is committed to continually testing new ways to address housing needs in rural America. The USDA Energy Efficiency Manufactured Home Pilot 

Program was introduced this summer in New Hampshire and Vermont. A low income home-buyer interested in purchasing a high-performance modular home and 

placing it in a mobile home park would be eligible for a 30 year mortgage at a 3.25 

percent interest rate. Very low income home buyers may be eligible for an interest 

subsidy down to one percent. The mortgage is the first of its kind for residents of 

mobile home parks, where home buyers face high interest rates and short loan 

terms. 

The Agency continues to make tremendous gains—and took on a decade of needed 

upgrades—to its systems and processes. As of this spring, our guaranteed Single 

Family Housing loan program is now paperless. Not only are we saving 37,500 

REAMS of paper every year, we’ve lowered postage costs, saved printer ink, and are 

moving loan guarantees out the door much more quickly. We estimate a 1 year savings of more than $4.2 million. [See attached infographic] * 

We are also in the process of modernizing the delivery of the Single Family Housing direct loan program through automation. Beginning Fiscal Year 2016, the Agency will implement an automated underwriting system nationwide, permit third parties to submit applications electronically, and move from paper-based to electronic 

customer files. These improvements will provide underwriting consistency nationwide, additional security features, and the ability to seamlessly transfer work when 

states experience increases in applications. 

In other rural areas, we are supporting organizations that are addressing more 

basic needs and on the front lines of fighting to alleviate poverty. Second Harvest 

of South Georgia is a nonprofit that feeds hungry people in 30 Georgia counties and 

is the largest in Georgia outside of the Metro Atlanta area. USDA provided funding 

through a $5.2 million Community Facilities loan to build a distribution facility in 

Thomasville. Its commercial kitchen can produce up to 10,000 meals a day for South 

Georgia residents in need. 

I appreciate your continued interest and support of Rural Development programs. 

When countries cannot make rural infrastructure work, it impedes not only their 

rural places and people; it holds back the growth of the entire nation. This is true 

for industrialized countries like the United States, as well as developing nations like 

my father’s homeland of Ghana. Investments in roads, the electric grid, water systems are what ignite the rural economy. USDA Rural Development and our partners address the unique needs of communities often lacking large populations or 

other support mechanisms. Rural investments are shared investments for all. Together, we can coordinate and leverage our resources to turn Rural Development’s 

transactional work into transformational work. 

I am a passionate advocate for tapping the potential of rural areas so that communities located in every holler, hilltop, plain, and prairie are part of America’s 

story of growth and prosperity. I look forward to working with you in the coming 

months to ensure continued support for USDA Rural Development. 

I appreciate the opportunity to testify before the House Agriculture Committee. 

At this time, I am happy to answer your questions. 

100 

The CHAIRMAN. Thanks, Lisa. I appreciate that. 

You have also been proud of the community of Robert E. Lee, 

Texas which had a water problem, and so they had to lay a line 

of about 12 miles; and the citizens actually pitched in and got in 

the ditch and helped put the plastic pipe together for that 12 miles, 

so that is a great example; and your agency pitched in. 

I don’t think either you or Brandon were here during the stimulus program in which about $7 billion was earmarked for 

broadband and rural access. As a part of that, there was some $300 

million that was earmarked for a survey to be done across the 

United States to tell us where it was and where it wasn’t, in other 

words where it needed to go. That survey was done, completed 

months after the $7 billion was committed, unfortunately. A bit of 

a history lesson. Can either one of you give us an update on, was 

the survey completed? And then I will go from there. 

Ms. MENSAH. I am going to ask Administrator McBride to speak 

to the survey, and while neither of us were in these spots at the 

time of the stimulus, I do want to say we are very proud of the 

stimulus dollars that reached and helped build our broadband 

work. 

The CHAIRMAN. Okay. Brandon. 

Mr. MCBRIDE. Thank you for the question, Mr. Chairman. I believe that the FCC has completed that survey, and we are in touch 

with them frequently—— 

The CHAIRMAN. Okay you were about to answer then. Given your 

comments in the opening statement that we are still not done, and 

given that I represent a rural district in which I have an AT&T 

phone and a Verizon phone, and I am out of contact, unfortunately, 

often in my rural district. What are your efforts compared to what 

that survey showed needed to be done? How did the $7 billion accomplish what we wanted it to? 

Mr. MCBRIDE. With the stimulus funding that we had, we were 

able to expand broadband into a number of rural areas, and that 

was a historic investment. We continue to work with the FCC and 

NTIA to make sure that we are reaching areas that do not have 

service. 

The 2014 Farm Bill instructed us to work with the FCC to update maps and make sure that we were sharing information to update those and ensure that the communities that do not have 

broadband, that we would get to those. 

The CHAIRMAN. So we have entire communities or just folks living out in the countryside that don’t have it? 

Mr. MCBRIDE. We have both. 

The CHAIRMAN. The testimony stated we have six projects yet to 

be completed under the stimulus program? 

Mr. MCBRIDE. I am sorry? 

The CHAIRMAN. I read in Ms. Mensah’s testimony that 244 of the 

250 projects were done. This is 6 years later; we have six of those 

projects that aren’t yet done? That may be unfair to ask you that 

question. 

Mr. MCBRIDE. There are less than a dozen projects that are still 

working on construction, and we hope to have those completed by 

September 30. 

101 

The CHAIRMAN. Okay. Lisa, can you talk to us about the Community Facilities investment? You partner with a bank, and I guess 

the bank services those loans, or how does that work? 

Ms. MENSAH. I am going to ask Administrator Hernandez to 

speak to all aspects of our Community Facilities because we have 

both direct and guaranteed programs. 

Mr. HERNANDEZ. Thanks, Mr. Chairman. We are very excited 

about the—— 

The CHAIRMAN. Is your microphone on? 

Mr. HERNANDEZ. It is now. Mr. Chairman, we have a program 

that really capitalizes on the private-sector so they can do what we 

call our guaranteed lending, and so we guarantee the loan up to 

90 percent; so the lenders do that loan and then we also have a 

product which we call the direct loan, and so we use both those financing to both mitigate—— 

The CHAIRMAN. The direct loan, do you service those? 

Mr. HERNANDEZ. We do those directly. 

The CHAIRMAN. What is the default rate on that? 

Mr. HERNANDEZ. Our default rate is less than one percent, sir. 

The CHAIRMAN. All right. That is a full out default. How many 

do you have that are not current on their payments? 

Mr. HERNANDEZ. Sir, we are very fortunate that almost all of our 

loans are current. We have folks that we are working with to make 

sure they stay current. Part of it goes to our underwriting. We try 

to make sure we are picking projects that are successful. 

The CHAIRMAN. I hear that, Tony, but how do you avoid competing with banks. It seems to me—we all want these projects 

done. We prefer to have the private-sector do it first. How do you 

not step on their toes? 

Mr. HERNANDEZ. That is a great question, sir. As a matter of 

fact, the partnership between the private-sector and public-sector, 

a lot of these projects in the private-sector would not lend if we 

were not part of that lending. They are looking to mitigate their 

risk. And that is why we do more on the direct side than we do 

on the guaranteed side because a lot of these projects a lender 

would not do. So they look to us—— 

The CHAIRMAN. Let me understand. You said you do extensive 

due diligence on it, which I appreciate, but you have already had 

a bank look at it and say we can’t commit our shareholder money 

for this. What steps do you, in the 30 seconds left, kind of what 

steps do you have to go through to look at it to decide to put taxpayer money against it, a direct loan? 

Mr. HERNANDEZ. Sure. The first thing we do, sir, is try to find 

the right project; they have the capacity to pay it back. But a lot 

of times a lender won’t lend there because they don’t want to have 

that much risk in that deal. So they look to do a minimum investment. 

The CHAIRMAN. So in the direct loans you would have a bank 

partner with you in those as well? 

Mr. HERNANDEZ. As a matter of fact most of our projects have 

both private and us in them, sir. 

The CHAIRMAN. So give me real quickly how many of those direct 

loans are 100 percent USDA loans versus one where you have a 

blend of other outsiders in it? 

102 

Mr. HERNANDEZ. Great question sir. I don’t have that information with, me. 

The CHAIRMAN. Would you give us kind of a report on portfolio, 

100 percent direct loans, and how much of those are blended loans 

in the sense where you have private folks coming in. I appreciate 

your help to make it happen. I am a former banker, so if you 

wouldn’t mind giving me kind of a read on where the current status is on the portfolio? 

Mr. HERNANDEZ. I can do that for you, sir. 

The CHAIRMAN. Thank you very much. Mr. Peterson, for 5 minutes. Ms. Fudge, for 5 minutes. 

Ms. FUDGE. Thank you very much, Mr. Chairman. And since I 

don’t know you well enough to call you by your first name, I will 

call you by your title. 

Under Secretary Mensah, does your Department have the resources to provide the loans and the grants needed to help all of 

Americans in rural areas to thrive? 

Ms. MENSAH. Thank you, Congresswoman Fudge. This farm bill 

was very good to us, and we started this year very strong. We had 

strong performance in all three of our portfolios, our housing, our 

utilities, and our business loans. 

But probably the thing I have talked the most about since I got 

to USDA is our people and our core programs. As long as those two 

things stay strong, we have nearly 5,000 people that work for us; 

my biggest hope is that we can retain all of those jobs and keep 

those people productive because they are the ones that will allow 

our core programs to move forward. It is a powerful staff. It is a 

field-based staff, and I am most concerned that we are able to keep 

our people and our core programs strong. 

Ms. FUDGE. Well thank you. Two of the people you have to thank 

for that are sitting right here. Of course, Mr. Peterson and Mr. 

Lucas, who worked so diligently to make sure that we did receive 

a farm bill. 

Ms. MENSAH. Absolutely. Thank you. 

Ms. FUDGE. Further, Know Your Farmer, Know Your Food initiative you cited an example of a veteran who benefited from this effort in your testimony. Could you tell us a little bit more about 

that? 

Ms. MENSAH. Know Your Farmer, Know Your Food is a way we 

talk about the entire local food economy. It is about getting more 

for your food dollar. In the example in my written testimony we 

had a veteran that was growing microgreens, what you can grow 

and what you can make on microgreens, even when you are beginning farmer, exceeds trying to be a row crop farmer when you are 

starting out. 

What we have seen is in our agency is that in our core programs, 

our programs like our Community Facilities, our programs such as 

our Business and Industry Loans, we are able and are Value-Added 

Producer Grant, all those things that were renewed in the farm 

bill, that allows us to strengthen this what we call the local food. 

So many Americans want to eat locally and buy locally, and they 

are willing to pay a little more. And this is an opportunity to 

strengthen the whole economy around. It is not just a little thing. 

I love the program. I tour and see the kind of food hubs, the storVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00106 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
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age facilities we have been able to build with our Community Facilities dollars, so it is really an important wedge into the rural 

economy and to renewing that. 

Ms. FUDGE. Thank you. Administrator Hernandez, in the Under 

Secretary’s testimony, she stated that Rural Development offers 

one of the best home mortgages in the United States and it boasts 

a low default rate. What is the default rate and why is it so successful? 

Mr. HERNANDEZ. Thank you, Congresswoman, for the question. 

We are very proud of our program that really creates an opportunity for people to own homes. And the reason it is so good is we 

work with our borrowers to make sure they stay in the house. So 

we have two products, one that is called the guaranteed product, 

which is where we work with the lenders; and for both of our products, customers have to not to be able to get access to capital someplace else. 

What makes the product so good, it is 100 percent financing, zero 

down payment. If they can qualify for a down payment program 

someplace else, we encourage them to go to FHA or someplace else. 

So most of our customers want to be a home buyer, but their incomes are lower, and so they have our product which is zero percent down, 100 percent financing. That is on the guaranteed. 

On the direct, we work with them directly, meet with the customers, we are their lender. If they have challenges with making 

their payments, we work with them. We call them, that is how we 

work to make sure they can be successful. And so it is a one on 

one. We do this in 47 different states. All over the country we have 

offices that really work with the customers. We find the customers 

working with our favorite nonprofits, and they are favored because 

they are successful in bringing good customers to us. So I think 

that is one of the reasons we are so successful with a lower default 

rate. 

Ms. FUDGE. Thank you. Administrator Rikkers, I want to talk a 

bit about HFFI. And we know that many projects have been funded 

through the existing framework, and there is a real opportunity to 

build on the success of this enterprise level funding at the national 

level. Recognizing the uncertainty of the appropriations we have 

coming in 2016, how does USDA plan to implement HFFI, and why 

can we not move forward at this time on a national fund manager? 

Mr. RIKKERS. Representative Fudge, thank you for the question. 

HFFI, as you note, is a critical program that supports healthy food 

and financing across the country. Many of our programs, not just 

within the Rural Business—Cooperative Service, but also across 

other parts of the USDA are integral to that program. We are looking for guidance. 

We have not yet had funding within that program within the 

RBCS, or Rural Business—Cooperative Service. As Under Secretary Mensah cited just moments ago, the importance of healthy, 

local foods in our rural communities is something that we are attempting to address with other programs we have within RD, but 

certainly something we are looking to Congress for support for 

funding. 

Ms. FUDGE. Thank you. I yield back. 

104 

The CHAIRMAN. The gentlelady yields back. Mr. Neugebauer, for 

5 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. Administrator Hernandez, one of the things that I have an opportunity to do is sit 

on this Committee as well as the House Financial Services Committee, and one of the things that we have been working on is 

housing reform. And one of the things, and I don’t have the number 

in front of me, but when I had an opportunity to chair the Housing 

and Insurance Committee, we were talking about the number of 

housing programs that exist across the entire government. And it 

is a substantial number of housing programs. 

As we are in a situation where we are borrowing money to keep 

our government operating. One of the issues that has been discussed is why are we doing so many housing programs across a 

broad number of different agencies, and why don’t we do housing 

in one location? So I would welcome your thoughts to why that is 

not a good idea? 

Mr. HERNANDEZ. Great. Thank you, Congressman. Congress was 

very smart and strategic when they created USDA to do housing 

because housing in rural America is different than housing in 

urban areas. The incomes for folks in rural areas are much less. 

It is harder to find jobs in rural America. Which means if you have 

a product that requires a down payment, they would not be able 

to get into housing. 

That is where Congress created USDA and, boy, we were so 

lucky because of that forethought to say we have a program that 

has zero percent down and 100 percent financing and we have it 

in every state, where we have staff that meet with customers and 

our staff meet with the nonprofits that are there. We are different 

than any other housing organization in our Federal Government. 

We are customer-based. We talk to the customers. 

The other reason the customers are so good with us is because 

we have that product, zero percent down, 100 percent financing. 

Our foreclosure rates and default rates are lower than almost any 

other program in the Federal Government. Congress did a great 

thing. We are going to build on that success and change people’s 

lives more with homeownership through USDA. 

Mr. NEUGEBAUER. Well, I don’t disagree that you have some programs that people are utilizing. I think what I am saying is when 

you have programs in the government, you have duplicative 

overheads; so you are paying people to administrate that program, 

but we are also paying people at HUD to administer some very 

similar programs where they offer either low or no down payment 

programs. 

And so the question, and it is a legitimate question, is I am sure 

you have very capable people. Those people, if there was some consolidation would be welcome to be a part of, possibly that consolidation; but to me it doesn’t make a lot of sense to have all of these 

different housing programs spread across the entire government, 

particularly at a time when those direct loans you are making, the 

taxpayers are having to go out and borrow that money for you to 

make those direct loans to those individuals. So to the extent that 

we can figure out a way to do that more efficiently, is appropriate. 

105 

Ms. Mensah, you mentioned in your testimony that Rural Development has been working with various partners to best serve 

America and with these private-public partnerships. Can you give 

me a few examples of what kinds of partnerships that you are talking about? 

Ms. MENSAH. Sure. Thank you, Congressman. I would like to return to the Communities Facilities Program and tell you about a 

recent hospital construction that I saw in North Dakota, and in 

this case our private partner was a banking partner to do the construction piece of the financing, and then we would come later and 

take on a kind of risk that is very long-term tenor of a loan; for 

those of you who have been in finance, 40 year money. And that 

kind of partnership where a private bank often comes in first, does 

the interim financing, and then we come in later, that allows a 

lower income community, in this case for a kind of facility that 

cash is modest, if we can stretch out the tenor of that loan to 40 

years, we have everybody in their best box, and so I would speak 

to that as one kind of partnership where we are in partnership 

with the private financial sector. 

Mr. NEUGEBAUER. I want to go back to something that Congressman Conaway, Chairman Conaway, was talking about, and it is 

something I am interested in as well. That is a great public-private 

partnership, but there is not a lot of risk to that bank if they have 

the Federal Government to be the take out for the permanent financing. So I get that. 

What I am looking for is those partnerships that want to share 

some of the risk with the taxpayers. In this particular case basically the taxpayers are taking most of the risk. What I would think 

more is a public-private partnership is where there is risk sharing. 

If you all have some examples of where there is some risk sharing, 

based on Mr. Conaway’s questioning and my thoughts as well, we 

would like to see that. 

Ms. MENSAH. I think it would be appropriate for us to come back 

to because we have partnerships in our utility work, with our housing work, and with our business work. But what is important here 

is that in many cases we do have credit elsewhere tests where we 

have to be the sole source. We are asked not to compete directly, 

perhaps though if I could just ask for an example from Administrator Rikker’s portfolio in some of our business and industry programs where we are explicitly taking not a full guarantee of the 

loan and where the bank is making the loan. 

Mr. NEUGEBAUER. Mr. Chairman, just for the record, the GA reported to Congress that 20 different Federal Government entities 

administer 160 different programs on housing in our government. 

I think that is too many. 

The CHAIRMAN. Quickly, Mr. Rikkers. 

Mr. RIKKERS. Thank you. One of the flagship programs within 

the business programs that we have at RBS is the Business and 

Industry Loan Guarantee Program. Certainly it can guarantee 

loans up to 80 percent, but as those projects get bigger, it is only 

guaranteeing in some cases up to 60 percent. What those B&I loan 

guarantees are able to do is really extend credit into rural communities where lenders by themselves without that 60 percent guarantee may otherwise not be ready or available to lend those dollars. 

106 

And I was in South Dakota in May and went into an industry 

park and visited two of those projects where we extended that capital in a town just outside of Sturgis, South Dakota, and watched 

the work of these local lenders, met local lenders that with our loan 

guarantee were able to extend that credit, grow jobs, and create the 

economic development that the program is intended to do. 

The CHAIRMAN. Thank you. The gentleman’s time has expired. 

Mr. Peterson, 5 minutes. 

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A 

REPRESENTATIVE IN CONGRESS FROM MINNESOTA 

Mr. PETERSON. Thank you, Mr. Chairman. I don’t know who can 

answer this or if you want to. But somebody at USDA, I guess the 

Economic Research Service, came out with a study about the best 

and the worst places to live in America. Actually you fare pretty 

well down there. 

Anyway, one of the things that Under Secretary Mensah was 

talking about is providing young rural entrepreneurs a reason to 

stay in rural areas, which we all want to do. But is it helpful for 

somebody to publish this map? My county is in the Red River Valley where Red Lake County was declared the worst county in 

America to live in. It was 3,111. So a reporter that picked up on 

this did this story. To his credit he came out to Red Lake County 

and spent 2 days, and he came back and basically said this information they came up with was a bunch of nonsense. 

Are you familiar with this, and why are we spending money on 

stuff like this? I mean, how is this helping your situation. 

Ms. MENSAH. I share the frustration with you because I have to 

answer questions about why are you championing rural America? 

Just give folks bus tickets. Let people leave. Why are you trying 

to make something happen? I so disagree with that. What I see is 

that the 15 percent of America’s population that lives in rural 

areas, they understand why they are there. They would love their 

communities to thrive. And we as Americans need rural areas to 

thrive. 

My father comes from Ghana, and in that country when you 

don’t invest in rural, the whole country suffers. And I believe that 

that is part of our job here in Rural Development, to make the 

case. Many of the communities that I know you and I know, are 

absolutely beautiful places to live. When we can bring the 

broadband, the housing, the businesses, they will thrive, and they 

will help us all thrive. So I love being on the message of thriving. 

And I am familiar with your map. I wouldn’t like it at all. 

Mr. PETERSON. You better tell the Economic Research Service 

your view on this. So, when I am back home in August, in addition 

to going over and defending Red Lake County, I also went to another little town. This one is second to the bottom in the country. 

They have struggled. They had a flood in 1997 and we rebuilt the 

town; but they have a business going on there that is just phenomenal. It kind of started out of nowhere, a retired farmer and 

his wife. And they are booming. They are doing business in 56 

countries. They are making some kind of little pieces that are used 

in jewelry, and they are shipping them all over the world. But part 

of the problem is they can’t get adequate broadband in that comVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00110 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
107 

munity. And I run into this all over the place. I don’t know how 

much money we have spent on this, putting money into broadband 

and the farm bill, the stimulus. We gave $2 billion to you guys in 

the stimulus bill for broadband. 

It seemed like the money that we spend gets sent out there to 

overbuild existing systems and does not get out to the rural areas 

where they are needed. Don Young and I have been working on 

trying to get rid of the Universal Service Fund, take that away 

from telephones and put it into broadband which needs to happen, 

but the telephone companies apparently are geared to the other 

thing or something, whatever it is. But how are we going to get 

past this and get these communities, like Ada, Minnesota where I 

was, broadband that they need? 

Ms. MENSAH. Okay. I am going to ask Administrator McBride to 

speak to that. If I can just say that this is the thing I hear the 

most. What 80 years ago was the telephone and its importance; 

today it is broadband, and we are not giving up on those communities. 

Mr. MCBRIDE. Thank you for the question, Congressman. Certainly we would be happy to meet with folks in your community to 

see what we could do to be helpful. There was a survey done of 

rural businesses in Michigan that found that the annual revenues 

were $200,000 greater for rural businesses that were connected as 

opposed to those that were not. So certainly we are aware of the 

importance of getting broadband out into those communities. 

We do have a grant program community connect that might be 

a fit for the community you are referring to if they do not have existing service. With regard to overbuilding, the farm bill does include restrictions on how many service providers can be in a particular applicant’s area before we fund a loan; so we do try to be 

diligent about going into communities that do not have service. 

Mr. PETERSON. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Thompson, for 5 minutes. 

Mr. THOMPSON. Thank you, Chairman. Madam Secretary, Administrators, thank you so much for being here, and thanks for 

what you do as well. I heard the word thrive being used. I would 

have to say that the only way that urban America, and I know that 

is the 25 percent of the land mass that we are not really talking 

about today—it is the 85 percent of the population—the only way 

urban America thrives is if rural America thrives. 

We provide their food; we provide their building materials; we 

provide their natural resources; we provide their energy. And people work hard to do that, those of us who live in rural America. 

So my personal experience with your agency has been a very positive one. I appreciate how when the communities work hard and 

they apply for these loan funds, I give them all the credit because 

it is their due diligence. It makes a difference to those communities, and they have gone the route of looking to the private-sector 

first. They have exhausted those opportunities and resources. 

Many times it is a collaboration. It is a true great examples of 

public-private partnerships. And so I want to thank you for what 

you do, and the fact is that if, how you serve rural America, beVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00111 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
108 

cause once again, if rural America fails, this country fails because 

those are just basic fundamental needs. 

A couple of specific questions, starting with Administrator 

McBride, rural electricity, I am hearing a lot about the President’s 

Clean Power Plan, and I am just curious, how will that, the President’s Clean Power Plan, affect your loan portfolio? 

Mr. MCBRIDE. Right now we are not sure exactly how the plan 

will affect our portfolio because the states need to develop their 

plans now in response to the EPA’s rule. We are in contact with 

our borrowers, with rural electric. We have a strong partnership 

with them. So we are trying to watch this situation as it evolves 

and make sure that we are ready to help our borrowers respond to 

the end result of the new rule. 

Mr. THOMPSON. I have significant concerns. I work very closely 

with the rural electric cooperatives. They provide some of the most 

affordable kilowatt hour rates. They use a very diverse portfolio. 

They need to be able to do that. They have already been impacted 

with the war on coal, the closing of coal-fired power plants, even 

the closing of waste coal power plants, which essentially are cleaning up some scars from 100 years ago. It makes no sense. So I have 

tremendous concerns on that. I look forward to keeping in contact 

with you on that issue. 

Mr. MCBRIDE. Yes, sir. 

Mr. THOMPSON. Administrator Hernandez, once again just revisiting the Community Facilities grants and loans program, which I 

have seen a lot of success in my rural communities. And the gentleman that runs Pennsylvania does such a great job, a former 

staffer here on the Hill for a Democratic Congressman, and so I appreciate his communications. The President’s Fiscal Year 2016 

budget request zeroed out the Community Facilities Guaranteed 

Loan Program and substantially increased the Community Facilities Grant Program. 

So my question is, what was the rationale behind this, and do 

you view grants as more efficient use of taxpayer resources than 

guaranteed loans; and can you compare the workload for the approval process for a grant to that of a loan guarantee? 

Mr. HERNANDEZ. Thank you, Congressman. The Community Facilities program has both grants and loans as you know. A lot of 

our communities can’t take all of the loans, so they look for other 

ways to reduce their burden by getting a grant. And so we give 

grants also to increase their capacity so they can apply for more 

loans. So we do both. 

We want people to have access to lower cost money. That is up 

to 40 years. But the grants sometimes give them the capacity so 

they can apply for the loan dollars. So we are actually training 

folks how to compete better for the loans, and that is why we do 

both. It is usually the same people that are doing the loans that 

are doing the grants, sir. 

Mr. THOMPSON. Any insight as to why the President’s budget request would have zeroed out the guaranteed loan program? 

Mr. HERNANDEZ. From what I understand from our customers, 

they keep asking for lower cost dollars. When we do a guaranteed 

loan it is a little higher because that is the market that is setting 

the price. And so when we do a direct loan, we have the flexibility 

109 

to do both; and that is why a lender sometimes only wants to do 

part of the risk, so we work with them to reduce the risk so we 

can partner in both. 

So we always need more dollars in the direct side because that 

is where we actually have more funding available. 

Mr. THOMPSON. Okay. Thank you. Thank you, Mr. Chairman. I 

yield back. 

The CHAIRMAN. The gentleman yields back. Ms. Plaskett, for 5 

minutes. 

Ms. PLASKETT. Yes thank you, Mr. Chairman. Good morning everyone. I had a question for you, Administrator Rikkers about 

REAP, about Rural Energy for America Program projects. It has 

had a good bit of history under its belt by this time, and I wanted 

to ask you what do you find to be the projects that you are focusing 

most on; and how does that differ from projects potentially 5 years 

ago? What is the trend now? 

Mr. RIKKERS. Thank you, Ms. Plaskett, and its Rikkers for the 

record. 

Ms. PLASKETT. Rikkers. Thank you. 

Mr. RIKKERS. Yes thank you. First I want to thank this Committee for its commitment to the Rural Energy for America Program, REAP as we know it as. You asked specifically what is the 

status of REAP today, and what does it look like compared to 5 

years ago? 

We have had a year where we have had more than $80 million 

in REAP grants and a record number of REAP loan guaranteed 

dollars obligated that we will do this fiscal year, and I am proud 

of the work of our staff both in the national office and the field for 

that work. 

Just touching on the point that has been made a couple times 

about the private-public partnerships even with the REAP grants, 

that is only 25 percent of a project; and so every time the Federal 

Government invests $25 in REAP dollars in a grant, that is 

leveraging $75 in private investment into those rural small businesses and agricultural producers that are using those dollars to 

make investments in renewable energy systems and energy efficiency improvements. 

Ms. PLASKETT. And what are farmers and your applicants, what 

kind of projects are they most interested in right now? 

Mr. RIKKERS. The projects really span a gamut of renewable energy systems and energy efficiency improvements, whether that is 

solar, wind, anaerobic digestion. We have geothermal and hydro. 

I think part of when you really make the comparison between 

now and 5 years ago, what we see is because of the outreach of our 

staff, we are reaching further and are more geographically diverse. 

That is we are spending the REAP dollars not in just one area of 

the country. Five years ago REAP dollars were investing probably 

predominantly in the Midwest. We really have seen 36 states this 

year alone have used their entire REAP allocation on the grant 

side. And so we are really proud to see the REAP dollars going 

across the country to the various different types of technologies. 

Ms. PLASKETT. Well, I am very interested in the project particularly in an area like the Virgin Islands which has limited resources 

in terms of fossil fuel energy that we are able to use. The cost is 

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really astronomical. And we have the natural resources that would 

make alternative energies a really good place. 

And how do we capitalize on that for our farmers to be able to 

be much more productive. We have a 31 percent child poverty rate, 

and we have rural farmers who are really committed to getting the 

technical assistance and support to be able to be part of some of 

our nutrition programs and support for their own communities 

rather than also feeding those outside to really make that leap, so 

your program would be something that I know we would be interested in. 

Madam Under Secretary, one of the questions I had for you was in terms of the large portfolio of loans that you do, $200 billion invested, upwards of $20 billion alone assisting rural areas throughout the United States. I addressed and spoke with your Secretary, 

Secretary Vilsack, written to him about the support that is needed 

for those areas which really have a great need of rural development 

areas. Most of my colleagues here who come from rural areas understand the need for your agency in particular and how important 

it is for basic infrastructure and support, not just in terms of utilities, but municipal buildings, schools and such. 

Can you tell us a little bit—I know that my time is running 

out—how that can be helpful to places like the Virgin Islands and 

others which are really isolated. We haven’t had a school built in 

over 30 years because we just cannot on our own support budgets 

like that. 

Ms. MENSAH. Thank you for your question. My focus on core programs and on our people is exactly the way we are going to get to 

our poorest areas, to what I like to call our last mile, the unfinished work. 

Our core programs like our Community Facilities are the kinds 

of programs that can be used for a school, for a hospital, for a police station. Those are the things I have toured. And our investments that you have enabled us to make in our staff allow us to 

keep people local so that they can reach places. They understand. 

They live in those communities themselves, our own team. 

So the two areas, core and our people, really has allowed us to 

focus to get that kind of core development and not just skim the 

surface but to go deeper. 

Ms. PLASKETT. I am looking forward to working with you on that 

and any support that you can give. And thank you very much, Mr. 

Chairman, for the time. 

The CHAIRMAN. The gentlelady yields back. Mr. Scott, for 5 minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. Madam 

Secretary, I want to thank you for mentioning Second Harvest of 

south Georgia. My colleague Sanford Bishop and I have both had 

the privilege of representing the communities that they serve, and 

we were both there for the ribbon cutting; and that is a wonderful 

mission that those people take very seriously, and they take action 

to make sure that people have the food that they need across a 

large geographical area. And while it might be the second largest 

in terms of meals served, it probably serves the largest geographic 

area of most of the food banks in the country. So thank you for acknowledging them. 

111 

Many of my questions have been asked. I look forward to the responses on the risk-sharing and the percentage of risk that we are 

taking versus the private-sector and the loans that we guarantee. 

I had questions about the zeroing out of the President’s budget 

which were asked by Mr. Thompson just before it came over to me. 

I guess one of the questions I have, when we look at the budget, 

is there a difference in the workload of the agency among the direct 

lending, the participation lending, or a grant? Or is it about the 

same amount of work per procedure? 

Ms. MENSAH. Let me ask my colleagues to give a couple of examples. But let me start by saying, direct lending, that is our toughest 

when we take on all the underwriting responsibilities, and whether 

that is in our housing program or the way we run our water program or the way we underwrite a business loan. 

We have actually had some great successes in the way we have 

reduced workload, and I want to ask Administrator Hernandez to 

speak to the way we changed processes in our guaranteed housing 

program. That is our biggest program. We will nearly do $20 billion 

of guarantees this year, and we have been able to streamline that 

efficiently and really change the workload. Can you speak to that. 

Mr. HERNANDEZ. Sure can. Congressman, one of the major feedback we receive from our customers is getting more predictability 

in how we deliver services. What they have asked us to do is to 

come into the 21st century with automation. We are one of the only 

agencies that has a housing program that hasn’t automated like 

other agencies. We are moving that direction now. We now with 

our process improvement save more than 37,000 reams of paper 

and can get an answer back in 48 hours. Where before it used to 

take us 8 weeks, 12 weeks to get an answer back because we didn’t 

have the automation. 

Just this last year we have implemented this what we call loan 

net guarantee and automatic loan closing. It saves the private-sector a significant amount of money but allows us to share the risk 

with the private-sector. The other reason that is so good is that 

there are more lenders out there that have access to capital for our 

customers that would not get it any other way if our lenders 

weren’t there because our customers would not qualify for any 

other mortgage products. So we have a nice distribution system. 

We save them time. We save them money. And we are focused on 

the customer. 

Mr. AUSTIN SCOTT of Georgia. My question was does one take 

longer than the other from the standpoint of the workload of the 

people that work in your agency? And one other thing, these loans 

are still originated from a mortgage broker or a bank when they 

happen; right? The average American citizen doesn’t know this 

loan is available to them unless somebody that they are relying on 

to advise them tells them about this. Correct? 

Mr. HERNANDEZ. That is correct, sir. 

Mr. AUSTIN SCOTT of Georgia. So a bank or a mortgage 

broker—— 

Mr. HERNANDEZ. That is correct, sir. The loans are easier to do 

on the guarantee side because we have the automation that is 

there. The direct side, we don’t have the automation yet. We will 

have that automation for the direct side in about 12 months. 

112 

Congress was very good to invest additional dollars for us to 

have automation. The reason we need both products because people 

who may not qualify for the guarantee, but they qualify for the direct. That is where Congress has given us more product variety to 

help more folks become homeowners, so it takes longer to do a direct loan than it does a guarantee, sir. 

Mr. AUSTIN SCOTT of Georgia. So if I can make one further point, 

is that the American citizen who needs this loan doesn’t know 

about it. It is a bank or it is a mortgage broker or somebody who 

advises them of the ability to get this loan. 

One of my concerns, one of the things that has held the economy 

back, quite honestly, has been a position towards those industries 

from the Administration at a global picture, not necessarily in your 

agency. Do you see any potential restrictions on who can help originate those loans? 

Mr. HERNANDEZ. There are restrictions. We are actually expanding how we are helping more and more customers by working with 

nonprofits, so they go out and find customers for the direct loan because we have had a reduction in staff over a number of years now. 

So we need to find another way to do outreach. So we need the 

trusted advisers like you are talking about. The realtors are very 

important, the lenders, but also a nonprofit to try to find the customers and educate them both on their options and do home buyer 

education. So we are trying to expand our outreach so we can get 

more customers. 

On the direct side we usually go through 20 customers until we 

find one that is qualified, sir, on the direct side. We have to work 

real hard to find the right customers who have the ability to pay 

back. But we are expanding our resources by using our nonprofits, 

lenders, and realtors. And with the investments you have given us, 

we are doing automation to make that program more effective and 

more efficient. 

Mr. AUSTIN SCOTT of Georgia. Mr. Chairman, I would just ask 

that we not push the private-sector out simply because we want to 

bring nonprofits in, sir. 

The CHAIRMAN. Thank you. The gentleman’s time has expired. 

Mr. Ashford, 5 minutes. 

Mr. ASHFORD. Thank you. I would like to just talk about two— 

the Vice Chairman made a great point about housing, I thought, 

and about the number of programs that exist in the Federal Government on the HUD side and on the Rural Development USDA 

side. I ran a housing authority in Omaha for 3 or 4 years and was 

familiar with those differences and those jurisdictional boundaries. 

It really causes—it seems to me, and the point that was made 

by the Vice Chairman is a really good one, is are there not, Administrator Hernandez, more opportunities, should be more opportunities for collaboration between rural housing opportunities and 

urban housing opportunities, especially in a place like Omaha, Nebraska, where what we want to do, economically, is we want to provide opportunities for urban people who are now living in an urban 

area to live in more rural areas to provide—— 

One of the things that is really holding our economy—our economy is doing very well. We have the lowest unemployment in the 

country and a lot of it is because of our ag-based sector. 

113 

But we see opportunities to bring urban people into the rural 

areas to help increase the economy of our state and especially 

hopefully as we increase trade through TPP and some of those programs, we need workers, and housing is a critical element to that, 

the point was made very well by the Vice Chairman to say, why 

do we have these—I know why we have them—but isn’t there an 

opportunity for a collaboration between the two? 

Mr. HERNANDEZ. Thank you Congressman. There is tremendous 

opportunity for collaboration, and we do that all the time. We have 

a number of committees trying to find ways, task forces to see what 

we can do better together. The difference really is who the customer is. USDA focuses only on rural. We are the only agency that 

has a mission just for rural America. We are the only one. So our 

expertise is better than anybody else in trying to solve problems in 

rural America. 

So we look forward to giving advice to other agencies, how we do 

it so well so they can find the efficiency and effectiveness that we 

have and maybe they can model what we are doing. 

Mr. ASHFORD. I think the point though is to just say we have 

rural America and urban America and draw those lines in the 

world that we are living in now with technology; we are talking 

about the Internet and about economies being not wedded to an 

urban area and rural area, that bifurcation, it doesn’t make any 

sense to me. 

And in practice, in a city like Omaha, where we want people to 

go back and forth between rural areas and urban areas where the 

jobs are, housing is a problem there. That is all I am saying. 

And I think the more we could—you are right. Your agency does 

very innovative things, and I am aware of that, of those things, and 

housing authorities under HUD could learn from those things. But 

it is about people, not houses. 

So what we really need to do is figure out a way to get people 

into rural Nebraska where really we need workers and provide 

housing for them and some of these programs that you do, interfacing with just letting people know who live in a housing authority, to letting them know that there are jobs out in Skyler, Nebraska, or Red Cloud, or wherever it is. And the housing, there is 

just that communication would be tremendously helpful to our 

state. 

Mr. HERNANDEZ. I agree, sir. We need to find a way to enhance 

education for our customers so they have a better opportunity to 

see which products work for them. 

Mr. ASHFORD. Right. And second, it is on another topic, and I 

want to get the names right here because I don’t want to miss the 

names. Our Agriculture Marketing Services State Director, Maxine 

Moul, who was the Lieutenant Governor of Nebraska and a great 

friend, and I served with her, and of yours as well. We had a great 

marketing collaborative session in Omaha, and talking about the 

opportunities for expanding food production in urban and rural Nebraska, and Maxine did a great job. 

But I want to compliment Anne Alonzo who was there as well 

who did a great job explaining all the opportunities. We really are 

doing some great initiatives in urban food desert things, and Anne 

was super as was, and I don’t want to get this name wrong because 

114 

she did such a great job so I am going to take my time and look, 

but my time is almost up. 

Anyway, I just want to thank the Department for what was really a great session: 150 people participated thinking about what we 

could do to bring urban and rural Nebraska together using food as 

the catalyst. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Crawford, 

for 5 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. And Madam Under 

Secretary, thank you, and the Administrators for being here. 

I am going to start with Administrator McBride. In February Politico published an article highlighting the 116 percent default rate 

for Broadband Loan Program. Since then we have been informed 

this was a miscalculation, and comparing government loans to 

loans in the private-sector is actually not a true apples-to-apples 

comparison. Can you expand on that situation and give us a better 

understanding of what the true default rate is for that program? 

Mr. MCBRIDE. You are referring to the farm bill loan program? 

That program was originally authorized in the 2002 Farm Bill and 

subsequently updated in the 2008 Farm Bill. Under those authorities we have made 100 loans. The default rate is 21 percent. Most 

of the defaults occurred very early on in the program. We have 

learned a great deal of lessons since then, and that is reflected certainly when you look at the other programs that we run and the 

defaults have decreased under that program. 

We have two other loan programs that support broadband expansion. One is our Telecommunications Infrastructure Loan Program. 

Since 2009 we made 161 loans under that program with only one 

default, and under the stimulus program we have funded 255 construction projects and expect to have only one default at this time. 

Mr. CRAWFORD. Where did they come up with that number, 116 

percent default? I mean that seems, based on what you are telling 

me, that seems pretty out in left field. 

Mr. MCBRIDE. The number was not intended to reflect a default 

rate. It should not have been in that, in the place where it was in 

the chart. It was not intended to reflect our default rate. 

Mr. CRAWFORD. Okay. Thank you for clearing that up. Now that 

the new regulations for farm bill loan program has been published, 

what kind of loan demand are you seeing? 

Mr. MCBRIDE. The program is open right now and is open until 

September 30. We expect the program to be oversubscribed this 

year. As the stimulus winds down, there are a number of service 

providers who are looking to come back to the farm bill loan program. 

Mr. CRAWFORD. There was a report in May of last year, a GAO 

report, the agency recommended that USDA do a better job of identifying the characteristics of loans that may be at risk of rescission 

or default and that the Department align the goals in its annual 

performance report to the loan program’s purpose. 

Recently the Department issued a proposed interim final rule to 

revise the current broadband program regulations. Did the Department take into account the GAO recommendations when developing the new proposed rule? 

115 

Mr. MCBRIDE. Yes, and we also tried to follow the instructions 

that Congress gave us in the farm bill. 

Mr. CRAWFORD. Okay. What changes, if any, are being made, and 

how do you expect the new rules to improve the administration of 

the broadband program and the accountability for taxpayer dollars? 

Mr. MCBRIDE. The key change to the program that was actually 

provided in the farm bill is the reporting requirements where applicants, the applications and the service areas that they intend to 

provide service to will be posted online; so taxpayers, Members of 

Congress, whoever, can go online and look at the applications that 

we have received and where the service areas will be. 

Mr. CRAWFORD. Okay. Excellent. Let me ask you about rural 

water, a couple of things here. In order to provide safe, healthy, 

and affordable drinking water and comply with the Safe Drinking 

Water Act and other Federal statutes, rural communities require 

technical expertise. I hear about this all the time at home, the circuit riders that are relied upon. How does USDA ensure rural communities have access to technical expertise to operate, maintain, 

and manage rural water systems? 

Mr. MCBRIDE. Congress gives us funding for two different programs that support that kind of assistance. One is the technical assistance program, and the other is the circuit rider program. And 

we work closely with the different organizations that provide those 

types of services and make sure to connect them with communities 

who need assistance. And our state offices do a great job of helping 

with that. 

Mr. CRAWFORD. Are you seeing an increase in demand for those 

services? 

Mr. MCBRIDE. Yes, Congressman. 

Mr. CRAWFORD. Okay. In the time I have left, it is our understanding that changes at the Census have driven changes to the 

formula that the agency uses to determine eligibility for rural 

water programs. Can you talk about those changes, how the Department is trying to mitigate the impact of those changes on rural 

communities and how the Department is working to publicize those 

options for those who might be affected? 

Mr. MCBRIDE. The changes in the Census data can have two different—there can be two ways that can affect us. One is if a community exceeds the 10,000 population limit, and we usually know 

the communities who are looking to submit an application, and we 

try to share information on other Federal programs that could assist them with their project. 

The other change could be the median household income which 

we take into account when determining grant-to-loan ratios, so 

those are the two potential impacts from the Census data. 

Mr. CRAWFORD. Thank you. I yield back. 

The CHAIRMAN. The gentleman yields back. Ms. Adams, for 5 

minutes. 

Ms. ADAMS. Thank you, Mr. Chairman. And thank you for being 

here to our panelists. 

Rural Development administers the Business and Industry Guaranteed Loan Program which—and this question will be to the Secretary—for local and regional food projects. 

116 

And a few weeks ago, staff from the B&I program participated 

in a call to discuss the program with my staff and the fundraising 

staff for a local food retail in my district, the Renaissance Community Co-Op. It has broad community support. It is an important opportunity for improving food access in one of the food deserts in 

East Greensboro, but unfortunately Renaissance cannot qualify for 

the B&I program because they are not borrowing from a USDA 

preferred lender such as a chartered bank or a credit union. 

Instead they are borrowing from a Treasury Department Certified Community Development Financial Institution. They chose 

this route for financing the food co-op because the cost of borrowing 

is lower than through a traditional bank. And my question is, what 

is USDA’s rationale for excluding CDFIs as a preferred lender from 

the B&I program? 

Ms. MENSAH. Thank you, Congresswoman Adams, and I will ask 

Administrator Rikkers to speak to this. As someone who has 

worked with Community Development Financial Institutions for 

most of my professional life, we certainly understand their importance. They work with us in other parts of the program, perhaps 

not in the B&I program. Administrator Rikkers, are you familiar 

with a case of—— 

Mr. RIKKERS. Representative Adams, I am not familiar with that 

specific case, but I understand the issue. CDFIs are an important 

partner across many of our programs, and we have used them 

under the B&I loan guarantee program. 

If a CDFI is connected or partnered with a traditional lender and 

bank or a credit union, which many CDFIs are, then we can work 

with a CDFI. 

In those cases where a CDFI is not connected to a traditional or 

regulated lender, there is a route for CDFIs to qualify under the 

B&I program as a nontraditional lender. And I am happy to circle 

back with your staff and work with our staff to see if those avenues 

have been explored. 

Ms. ADAMS. Thank you. It seems that the B&I program is oriented toward rural areas with fewer lending options, and we have 

a concern about that. 

But for food deserts in urban areas in the Twelfth District, the 

B&I program is one of the few funded programs that can improve 

food access, and we have a serious problem in the Twelfth District, 

particularly in the triad area in terms of food insecurity. 

So I hope to work with USDA, going forward, to make sure that 

my district can better utilize this program, which is authorized to 

improve food access in both urban and rural communities; but it 

seems like we are kind of getting the short end of that stick, so we 

would be happy to talk to you further about it. 

Thank you very much. Mr. Chairman, I yield back. 

The CHAIRMAN. The gentlelady yields back. 

Mr. Yoho, for 5 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. I appreciate it. I appreciate the panel being here. 

Chairman Peterson and I grew up in Minnesota, and I can understand why that is. I remember two seasons up there: winter is 

coming and winter is here. And I remember the state bird being 

a mosquito. It was so big, it had feathers. 

117 

Getting back to the question here. Administrator McBride, I 

want to thank you for the work you did with our office in our district for the rural broadband. I would encourage anybody in here 

to reach out. You guys did a stellar job helping to solve or to bring 

up solutions to get that into our area, and I just want to thank you 

for that. 

I want to kind of go back to Mr. Thompson’s question. In my district in north central Florida, I have more EMCs municipal cooperative power companies than anywhere else in our state. And these 

companies rely heavily on RUS loan program which helps keep energy affordable in my rural district and districts across the country. 

Due to the President’s new Clean Power Plan, I have been hearing concerns from my folks back home, the cooperatives. And I 

want to kind of go off of his question: How do you expect the CPP 

to affect your loan portfolio? That was asked specifically. What will 

happen if the coal power plants with outstanding RUS loans cannot 

meet the requirement by the EPA? And if they have to shut down 

their doors, how is that going to affect you? Because we have some 

plants that are scheduled to run for another 15 years. 

Mr. MCBRIDE. Thank you for the question. 

We have about $4.5 billion invested in coal power plants that 

may be affected by the EPA rule. At this time, it is unclear exactly 

what the impacts will be and how the state plans will be developed. 

We are in touch with our co-ops and want to work with them as 

they transition into this. 

Mr. YOHO. If a state does not adopt a plan and we see our power 

plants close with these active loans, is that a possibility for default 

for you guys? Has that happened before? 

Mr. MCBRIDE. I am not sure. I don’t want to speculate on what 

the state plans will be. 

Mr. YOHO. Was your agency in communication with the EPA on 

the rule writing in saying we have a certain amount of these plants 

that are in existence, they have a life span of 10 to 15 more years, 

is there a way they can be grandfathered in and weaned out of that 

so that they can adapt? 

Mr. MCBRIDE. Yes, sir, we were in contact with them and they 

developed the rule. 

Mr. YOHO. Under Secretary Mensah and Mr. Hernandez, to reiterate, that you said we have $200 billion in loans and your default 

rate is very small, on your zero down, 100 percent financing, if I 

go back to the housing bubble—and we heard a lot of horror stories 

how this led partly to that—how long has that program been back 

in existence, or did it ever go out of existence? Did it ever go out 

zero down, 100 percent financing? 

Mr. HERNANDEZ. Congressman, we are very fortunate this program was created under the Farmers Home Administration, so we 

have been in existence for over 40 years, and the program is still 

being very successful. But it is a small part of our program. The 

largest program is one we use with the private-sector. That is our 

guarantee program. 

Mr. YOHO. Let me ask you this: Do you hold those loans inhouse? 

Mr. HERNANDEZ. We do. 

118 

Mr. YOHO. You don’t rebundle them, repackage them, and sell 

them to the private-sector? 

Mr. HERNANDEZ. We do not, sir. 

Mr. YOHO. That leads up to a question I had yesterday. The 

USDA is doing these loans, so you are the servicer of these loans 

too, and it is a duplication of the private-sector, it is competition 

with the private-sector. Is there a way to devolve from the Federal 

Government, and do what you do as far as guaranteeing them and 

stand behind them, but yet, let the private-sector do them so you 

don’t have a bank within the USDA and the bureaucracy that goes 

with that? What are your thoughts on that? 

Mr. HERNANDEZ. Sir, the larger problem we have with the guarantee program is that private-sector service those. So we do about 

140,000 loans a year. The private-sector does all those. 

Mr. YOHO. These are the ones that are 100 percent guaranteed 

by you? 

Mr. HERNANDEZ. Both of our products are 100 percent guaranteed. The largest one, the private-sector does for us. They originate 

it and they service it. So that is 140,000 loans every year. We do 

a smaller part, which is 7,000 loans per year, which is the direct 

loan. That is the smaller part. So the biggest one, we are not competing with the private-sector at all. We are actually partnering 

with the private-sector. Because when they cannot do a loan, they 

refer it to our direct program so we can find another way to help 

that customer if they can pay back the loan. 

Mr. YOHO. So what is the purpose holding that within in-house 

instead of once you guarantee that loan, transition it out, so, again, 

you are not a bank, the Federal Government is not acting as a 

bank? 

Mr. HERNANDEZ. Well, Congress has to give us some authority so 

we can do something that way. Right now, if we were to sell those 

loans, which we don’t and cannot, all that money goes back to the 

Treasury and doesn’t come back to the agency. So if that is what 

Congress wants to do, Congress can write the loan so we can do 

that. 

Mr. YOHO. I just want to give you guys a thank you because you 

guys have financed so many things—a rural water treatment system in our area, rural hospitals—and you do a great job. Thank 

you. 

I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mr. Allen, for 5 minutes. 

Mr. ALLEN. Thank you, Mr. Chairman. And thank you, panel, for 

joining us today and all that you do. Also, I want to thank you for, 

as my colleague mentioned, the Second Harvest of Georgia. We 

have met with them many times and are looking forward to seeing 

the great work that they do, and thank you for that. 

There is one thing. In the 12th District of Georgia, we just need 

better cell service. I am telling you, it is tough traveling to that district when you keep breaking off calls, and, of course, we stay on 

the phone a good bit. So if we can keep working on that. I know 

you are. 

And, also, as Congressman Yoho mentioned, we have a lot of 

EMCs in our district, and they have put a lot of money into many 

119 

of these coal plants meeting the current requirements as set by the 

Congress. And, of course, we know the EPA has stepped over that. 

But they have a tremendous investment there. They are very concerned about, again, retiring that debt and getting the life out of 

those plants. So we need to be sure that the other folks know that, 

and know what a critical situation that is. They are very concerned 

about that. 

As far as the, Mr. McBride, in 2013, USDA finalized the Energy 

Efficiency and Conservation Loan program that was designed to 

help co-ops promote energy efficiency and renewable energy to 

their consumers. This saves energy while also saving consumers 

money on their energy bills. Do you have a success story that you 

would like to share with this program and how can we make this 

program more successful? 

Mr. MCBRIDE. Thank you for the question. We have two great 

stories, one in Arkansas and one in North Carolina, where they 

took advantage of the Energy Efficiency and Conservation Loan 

program. We are able to help their customers make improvements, 

new heat pumps, weatherization practices. The Roanoke Cooperative in North Carolina actually has an on-bill fee that they charge 

their customers, and the customers’ bills are actually lower with 

these new energy efficiency improvements. So we have seen success 

in those two projects. 

We are working with the different electric cooperatives to expand 

the program. I think something like 96 percent of the electric cooperatives have some kind of energy efficiency program. And so we 

feel they will have a great interest in this. We are trying to communicate with them and provide information that they might need 

as they develop their potential applications. 

Mr. ALLEN. That is good. And, again, thank you for your assistance with that program. 

As you know, in 2008 and 2014, the farm bill has included ways 

that RUS could help their co-ops increase energy efficiency for the 

benefit of their consumers. How is RUS helping co-ops increase energy efficiency and what more can RUS do to promote these efficiency programs and make them successful? 

Mr. MCBRIDE. The primary way that we are working with them 

right now is through the EQIP program and sharing information 

about that program, success stories in Arkansas and North Carolina, and making sure that they have the information that they 

need. We have a special partnership with the electric cooperatives. 

Our agency talks with them frequently and shares as much information as we have and try to help them as they consider potential 

energy efficiency improvements. 

Mr. ALLEN. Have you ever been to one of their annual meetings? 

Mr. MCBRIDE. Yes, sir, I have. I was there last week. 

Mr. ALLEN. Really? That does your heart good, doesn’t it? I will 

tell you what, those folks are doing a great job for us. 

Well, thank you, and I yield back, Mr. Chairman. 

The CHAIRMAN. The gentleman yields back. 

Trent Kelly, for 5 minutes. 

Mr. KELLY. First of all, Madam Under Secretary, you have in 

your testimony about a gentleman, or a person, Ivory Smith, of 

Poplarville, Mississippi, and what a success story they are in the 

120 

Armed to Farm program. Of course, that combines two of the 

things that I love the most, which is my State of Mississippi, although not in my district, and also our veterans. 

So I just wanted to thank you for that and thank you for recognizing that success story and which we hope will continue to be a 

success. 

I spent the entire month of August in town hall meetings, being 

the newest Member up here, doing nothing but town halls or being 

engaged in all 22 of my counties which I represent, and over and 

over, whether it be large or small towns involved. And over and 

over again, the main concern that I got was the amount of regulation which we are getting across the board, whether it be in agriculture, or whether it be in banking or whatever, that just our 

small, local regular businesses can no longer perform and it is 

shutting them down and taking away opportunities. Whether that 

be a Dodd-Frank or whether that be waters of the U.S. or whether 

that be a number of other things that we have the Clean Power 

Plan, all those things are regulations which are putting restrictions 

on our most rural customers, who, a lot of times, don’t have the 

technology, or don’t have the access to technology, or don’t have the 

income, or don’t have the education, in order to comply with these 

regulations which seem like a good idea at a high level, but they 

are not at the end-user level. 

What are you doing to help, or what is Rural Development doing 

to help them not only to comply with the regulations but, first of 

all, to understand what regulations they have? 

Ms. MENSAH. Thank you, Congressman. 

My first trip as Under Secretary was to your state. And what I 

saw that our agency is in a special place to do is that we are on 

the ground with the kind of citizens who are trying to borrow from 

us. Most of our programs are loan programs. And so our team—we 

have state offices, area offices—are able to sit with the people who 

come to us for water loans, for broadband loans, for community facilities. And while the applications can be long, we don’t just leave 

people alone. We are able to work with them. I was able to announce one of our intermediary relending programs, where we are 

lending to an intermediary who then is making a grant to an intermediary who then makes more loans. So we try hard to be in a position that is forward looking to work with the local borrowers. 

I am appreciative of everything this Committee has done to invest in our core programs and in our people to do that job. 

Mr. KELLY. Thank you again. I want you to just know how grateful I am for what Rural Development and USDA as a whole does 

for my state, and I appreciate that. 

On the broadband issue, Administrator McBride, I have a specific 

incident, and I won’t mention names and those kind of things, but 

they got in on the pilot program of the broadband. And because 

they were involved in the pilot program, they are no longer eligible 

for any other programs for any loan things—this is what they are 

told—is because they were part of the pilot, they are not—do not 

have. Some of the later programs are better programs. And they 

are very important. They have been very successful. They brought 

broadband to areas in my district which otherwise would not have 

any Internet service whatsoever. 

121 

What, if anything, can you in your job do to make sure that if 

we have success stories where we are using the taxpayers’ money 

wisely to bring those services to the people that were intended, 

that they are able to go out and not to forfeit on their loans, which 

they haven’t done yet, but at the rate they are going they will, unless they can get more assistance to help them to ensure that they 

are doing it. Because they have been successful, but the amount of 

rates go down over time that you get back. And the bottom line is 

the big companies are not going to come in there and run 

broadband, so there is no one to replace it, so there is no service. 

So when the rates get so high that they no longer get the credit 

from USDA, or from Rural Development, then they just lose service 

because they just forfeit and can’t pay it anymore. 

Mr. MCBRIDE. Thank you for the question, Congressman. I would 

be happy to visit with the folks that you are referring to and see 

if there is anything that we can do. As the Under Secretary referenced, we want to work with all of our potential applicants in all 

the rural communities that we deal with. And while we are working very hard to follow instructions from Congress and our regulations, we also want to work with folks to be as selectable as we can 

to make sure that their projects are successful and see them provide the kind of services that they want to provide to rural America. So I would be happy to visit with the folks that you are referring to. 

Mr. KELLY. I thank the panel, I thank you, Mr. Chairman, and 

I yield back the remainder of my time. 

The CHAIRMAN. The gentleman yields back. 

Mr. Abraham, for 5 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. And I thank the panel. 

Under Secretary Mensah, thank you for your support of rural development. I will echo my esteemed colleague, Mr. Thompson’s 

comments, that the good people of rural America, without them, 

the good people of urban America would be cold, tired, and hungry 

every day of their life. 

My district is very rural. I live myself in about the middle of a 

soybean field. So we appreciate USDA’s presence. Most of what we 

hear is very positive on our end from the USDA. 

I want to also echo Mr. Kelly’s, and some other comments here 

about the broadband. We certainly lack it. For our state-of-the-art 

businesses, they can’t do business as they should, not as quickly 

and not as efficiently. I was in Lake Providence, Louisiana, this 

past Sunday at a prayer vigil for our law enforcement and Lake 

Providence is a quaint town on the banks of the Mississippi River. 

And I looked down at my cell phone and had no service, didn’t even 

have a bar. And this is a city that has basically no service at all. 

So that is near and dear certainly to my constituents that we need 

that and we need it very quickly. 

The question on these public-private partnerships, very much 

needed, again. We are Louisiana Delta. We are in poverty in much 

of where my district is. So we look for any method of funding, and 

public-private partnership seems to be one of those. But like has 

already been said here, we certainly want the private enterprise to 

assume some of the risk because they will certainly assume some 

122 

of the benefit if it works, and we don’t want the taxpayers on the 

hook for the whole shebang, so to speak. 

So I guess my question is, what specifically are we doing to keep 

the public aware and show them that these public-private partnerships are out there? What kind of dialogue are you guys having? 

Ms. MENSAH. Thank you so much, Congressman, for raising the 

importance of broadband, but also asking what we are doing to 

keep the public aware of the kind of partnerships we are working 

on. 

So much involves lender outreach for us—how we talk to our 

lending partners, how we reintroduce programs. This, again, has 

been such a strong year for us because of the authorities in the 

new farm bill. 

I would like to ask Administrator Rikkers to speak more to some 

of the new outreach that we have pushed, particularly around some 

of our newer facilities, our REAP facilities, our renewed B&I, 

where we do ask people to come in, put their own skin in the game, 

yes, get our guarantee, but they are on the hook too. 

Mr. RIKKERS. Representative Abraham, thank you for the question. There is also a project in Louisiana that is a modeling of the 

partnerships that the Under Secretary is referencing. There is a 

biodiesel facility that took a grant, it was a REAP grant, about 

$370,000 in REAP grant—and, remember, that is only 1⁄4 of the 

grant cost—so a level much larger that was invested by the private 

company that was asking for that. 

In addition, they combined that REAP grant together with the $10 million B&I loan guarantee. And so if there is a project in your 

state where they were taking multiple programs from RD together 

with a private biodiesel firm and a private lender, all packaging it 

together, ultimately opening up new industries and developing an 

economy, a really vibrant economy for rural communities. 

Mr. ABRAHAM. Thank you. Another quick question that kind of 

ponies off of Mr. Crawford’s question on this rural water system. 

We have that issue also in my district. And I know there has been 

a change in Census that actually affected the change in eligibility 

of rural water systems. How are you guys mitigating that? Again, 

how are you reaching out to the stakeholders and keeping them informed, that type of deal? 

Ms. MENSAH. Things have changed. 

Again, Mr. McBride, please speak to the Census change in our 

water program. 

Mr. MCBRIDE. Our water programs are actually run out of our 

state offices. And so we have state staff who are in frequent contact 

with the communities who would apply. And, of course, you have 

organizations like the National Rural Water Association who work 

with the communities to make sure that they are aware of any 

changes, and work with them to find alternatives in case their population now exceeds our 10,000 population cap. 

Mr. ABRAHAM. Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mr. Moolenaar, for 5 minutes. 

Mr. MOOLENAAR. Thank you, Mr. Chairman, for having this 

hearing, and also for all of you for being part of this panel. I find 

it very informative. 

123 

I wanted to follow up specifically with you, Administrator 

McBride. I am from Michigan, and you had mentioned a Michigan 

report on broadband that you referenced. One of the questions that 

has been going through my mind is, when you think of a state like 

Michigan, when you think of my district, which is 15 counties, fairly rural, in wanting to know kind of where we stand relative to 

broadband and the needs of our local communities, and then how 

we would work with your office to advance these goals—obviously, 

you have a state office—and I am just kind of wondering, it is more 

of a process question is, how do local communities find out about 

the resources, how do they work with your office, the state office, 

how would they work with my office, so that we can all be working 

together to kind of advance an agenda? 

Mr. MCBRIDE. Sure. Thank you for the question. I would encourage your constituents to start with our state office in Michigan. We 

also have several regional offices in the various states. I would encourage them to start there, and discuss the type of programs that 

we have available. And then once there is a consensus at the local 

level of how the communities would like to proceed, we can meet 

with them and our state staff to make sure that everyone is on the 

same page. Our state staff is really the first point of contact because they can provide information on the different loans and grant 

programs, eligibility requirements, things of that nature, that 

would help your constituents as they put a plan together. 

Mr. MOOLENAAR. And if we wanted to share information about 

the resources to start that dialogue, would we work with your office 

to send something out or to have forms, those kinds of things? 

Mr. MCBRIDE. Yes, sir, we would be happy to work with you on 

that. 

Mr. MOOLENAAR. When you mentioned the Michigan report, I 

have heard that as well in terms of just how just to be competitive, 

you need access to those resources. Where are we in this whole— 

and I guess rural America, not just Michigan, not just my district— 

but where are we, if our goal was 100 percent coverage, where are 

we in that? 

Mr. MCBRIDE. The SEC released a report earlier this spring that 

showed that about 50 percent of rural America had access to the 

same high-speed Internet that is available in urban areas. So we 

have some work to do. We made a lot of progress, but there is still 

work to do. 

Mr. MOOLENAAR. And what would be the elements of a plan to 

get to that 100 percent goal? Is it all a financial issue? 

Mr. MCBRIDE. In a lot of instances, getting into the most remote 

rural hard-to-reach regions is very expensive. And so, we try to 

work with potential borrowers who want to do that work and give 

them the resources that they would need. But there is a lot of work 

that goes into that, both on the part of the provider that would go 

into those communities and with the agency to make sure that we 

are making loans that are sustainable. 

Mr. MOOLENAAR. Thank you very much, Mr. Chairman. I yield 

back my time. 

The CHAIRMAN. The gentleman yields back. 

Mrs. Hartzler, for 5 minutes. 

Mrs. HARTZLER. Thank you, Mr. Chairman. 

124 

As being part of the 15 percent that you reference, I appreciate 

your focus on rural communities in this country because I am a little partial, but it is the best place. And, as you say, I appreciate, 

Under Secretary, you saying that we feed the world, and that is so 

true. What you do is so important. 

And I wanted to start with Mr. McBride there. We talked a lot 

about broadband. But we have a rural electric cooperative in my 

district who is just doing some amazing things putting in 

broadband, and has provided over 2,000 customers now with highspeed broadband that they wouldn’t have had before. And I just 

wondered how widespread is the use of rural electric cooperatives 

to help fill this gap, and how can we promote it, as well as what 

are some of the barriers to being able to encourage them to reach 

out and provide this service? 

Mr. MCBRIDE. Thank you for the question. A number of the rural 

electric cooperatives are starting to provide this service because 

there is a synergy between their smart grid technology and highspeed Internet. And so we have seen a number of our borrowers 

start to think along these lines to see what they can do to expand 

broadband access. 

From our perspective at Rural Development, we realize that no 

one is working in rural America in a silo. Our communities will be 

much more successful if we have partnerships between the rural 

electric cooperative, between the telecommunications cooperative, 

and the other utilities and industry in those communities. So we 

try to encourage all of our partners, and we try to work together 

as an agency to make sure that we are working with communities 

to reach their full potential and build out their infrastructure. 

Mrs. HARTZLER. Are you providing several loans to rural electric 

cooperatives to pursue this? 

Mr. MCBRIDE. We have made some loans on smart grid technology, and I can follow up with you on the specific number. 

Mrs. HARTZLER. I was wondering, just in general, do you have 

maps in the United States showing places where people have access to broadband and not? 

Mr. MCBRIDE. Yes, ma’am. 

Mrs. HARTZLER. I would like one for my district, or Missouri. I 

think that would be very helpful. 

This is just a general question, Under Secretary Mensah. Since 

your agency deals a lot with loans, there has been a lot of change 

as to how loans are processed for private commercial banks since 

Dodd-Frank. And I visited with them ever since I have been elected 

to serve here and it is very, very, very onerous. Getting a housing 

loan used to take five pages. Now, on average, it is 50 pages that 

a homeowner has to go through. And I just wondered—and maybe 

this would be also a question for Administrator Hernandez—but 

after Dodd-Frank passed, have you seen any changes to the paperwork that you have to do to give a loan for housing? 

Mr. HERNANDEZ. Congresswoman, thank you. 

Dodd-Frank is an important part for us to be in compliance and 

so we work with our lenders. And part of our process is trying to 

make sure that we automate our processes. And that is why lenders have come to us and said if you change the way you do business, it will make our participation a lot easier. So there is more, 

125 

we think more compliance, but we think it is appropriate for us to 

make sure we are doing good loans and there is good lending being 

done. 

Mrs. HARTZLER. So what changes, though, have you seen to how 

loans are done before and after Dodd-Frank? 

Mr. HERNANDEZ. The major change is more education to the 

home buyer to make sure they know what responsibility they are 

taking on. That was the whole purpose of that, just trying to make 

sure home buyers only sign the dotted line when they know there 

is good lending and there is good compliance from the lender’s 

point of view. That is very important. So we spend lots of time 

doing home buyer education with our customers trying to make 

sure they know what they are doing is the right thing and they can 

pay back the loan. 

I can get you more specifics on what additional paperwork or 

things that we are going through, so I can do that for you if you 

would like. 

Mrs. HARTZLER. Have you had to hire more people in order to 

comply? 

Mr. HERNANDEZ. Actually, we had lost a number of staff for a 

number of years, over 20+ percent less staff. That is why automation is so important to us. As we invest the dollars that Congress 

has given us to automate more, it saves our lenders’ time, which 

a majority of our program is for private-sector due to lending. So 

with that investment in technology, we can save more time. 

Mrs. HARTZLER. Very good. And I have only 30 seconds left. 

Administrator McBride, a lot of my small communities are having trouble changing the way they treat their water, the water 

treatment systems, because of the changes from EPA. So what has 

EPA done that has caused this to happen? 

Mr. MCBRIDE. Thank you for the question. I am not sure exactly 

which regulation that you are referring to. 

Mrs. HARTZLER. There are so many. 

Mr. MCBRIDE. I would be happy to work with your community 

to see what we can do to help them comply. 

Mrs. HARTZLER. Thank you. I yield back. 

The CHAIRMAN. The gentlelady yields back. 

Mr. Gibson, for 5 minutes. 

Mr. GIBSON. Thank you, Mr. Chairman. I appreciate the witnesses too. It is a very informative and helpful hearing. I just want 

to express my gratitude. These programs are essential to my district, and generally we are very pleased with your responsiveness 

and the way things are going, so thank you for that. 

The broadband issue is one we have been involved with in my 

office—2011, an amendment on restoring funding for the low interest loan program involved in the farm bill with some of these reforms that Mr. Crawford was mentioning earlier. I appreciate your 

responsiveness to all this. And, really, I agree with your point that 

we have certainly learned from some earlier challenges and looking 

to perfect the program. 

So my question really is that I was encouraged to see you have 

a report coming soon, the collaborative work that is being done between USDA and Commerce. This is one of the things that I have 

learned in my time. I was in the military until about 51⁄2 years ago. 

126 

And I have found that there have been times when I am having 

to perform a role like a liaison who used to be a chief of staff— 

when we had the storms Hurricanes Irene and Lee and Sandy and 

we were getting aid out—and there really wasn’t a synchronizer, 

somebody who was integrating these programs. 

So I was encouraged to see that you are collaborating with Congress because, candidly, this has been among my frustrations, is 

that out there in the 19th District in New York in upstate, we are 

working with the Rural Utilities Service—thank you very much for 

that—and also the Connect America Fund. And so I would like to 

hear more about that process, about how you are working together, 

because we seem to hit the end of one program and the possibilities 

of another. 

And so I am looking for a little bit of inspiration that you guys 

are looking at that problem, too. I realize I put you in an uncomfortable position because you are sort of at the edge of your authority and at the beginning of somebody else’s, but this is really where 

the real advantages or the real progress we can make when we actually integrate these programs better. 

Ms. MENSAH. Thank you. I will let Administrator McBride speak 

to the collaboration between Commerce and USDA. 

I will say that there are times when our regulations prevent us 

from going to a community that is of a certain size. And then that 

collaboration is even more important because we can cover a broader swath of the country. 

Mr. MCBRIDE. Thank you for the question, Congressman. 

The White House Rural Council actually gives us a framework 

to work across agencies and communicate and make sure that we 

are sharing information on our programs with different agencies 

who maybe can’t fund a project through one of their programs. So 

we are trying to do the best that we can to coordinate at a Federal 

level. As difficult as that can be sometimes, we are trying to coordinate to make sure that we are actually getting the information to 

the folks that can use it. 

I grew up in rural Arkansas, and so I am very familiar with the 

challenges that small communities can have, and oftentimes they 

don’t have grant writers, oftentimes they don’t have folks who can 

identify the programs that they might be able to access. And so 

that is something, with the Under Secretary’s leadership, that we 

have worked very hard to do in Rural Development, to make sure 

that we are sharing information with people who would be interested in that, and also making sure that we are aware of things 

that are going on in other agencies, or there might be some 

synergies and we can collaborate. 

Mr. GIBSON. Thank you. To put a finer point on this, so in our 

district, electrical co-ops are also in the space of broadband expansion doing yeoman’s work on it. I call your program sort of like the 

ground game. We get 2 or 3 yards and a cloud of dust. And then 

we have the real possibility with the Connect America Fund, but 

the first round wouldn’t let the electrical co-ops get access to that 

program. 

It does seem encouraging now that we are getting a review of 

that and our co-ops are now going to get access to that. But that 

is really the question that I am raising here is, is somebody sort 

127 

of looking at this from an integrator standpoint and saying, ‘‘Look, 

there are a lot of efforts that are trying to expand broadband.’’ In 

rural America, we have disparate but yet complementary programs. Is anybody working to maybe tie up some of the fine point 

details of these regulations so that we can get the maximum value 

out of it? 

Mr. MCBRIDE. Yes, sir. We have about, $55 million this year in 

the farm bill loan program. Then we have our infrastructure program, then we have Community Connect. All of these programs 

tend to be oversubscribed. And so we are aware of the need to work 

with other agencies and make sure that we are connecting dots 

there. 

Mr. GIBSON. Thank you. I will submit for the record really just 

an observation. Visiting my food banks, I was very encouraged to 

hear about Second Harvest. It is a great story. 

I just wanted to share with you. In some of my visits, I have 

found cans of goods on the shelves, a lot of imported food from 

China. I don’t know if you knew about that. We have food banks 

that have canned goods from China or not, but I wanted to share 

that with you. I don’t know if you have a reporting element that 

picks up on that. But I am just a little concerned about that. 

Thank you for your great work. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Rouzer, for 5 minutes. 

Mr. ROUZER. Thank you, Mr. Chairman. And, Madam Under Secretary, I appreciate you and your Administrators coming to join us 

today. As you may know, I used to be at USDA Rural Development, 

and so, perhaps, learned a little more than maybe even I wanted 

to while I was there. I see some of my old bosses in the crowd back 

there with smiles on their faces, so great to have you here today. 

A question for you. I am curious about the Rural Business—Cooperative Service reorganization there and what is taking place, 

and very curious about the state of the value-added program. That 

was of great interest of mine when I was there at the Department. 

Ms. MENSAH. Thank you for both questions. We tend to, as you 

know, we are always looking for ways to continue to do our work 

in the most efficient way possible. And your former area of Rural 

Business—Cooperative Service is so important to us, both in the 

way it handles its business in cooperative loans and the way it 

handles the new energy work and our renewed focus on community 

economic development. 

And I will let Administrator Rikkers speak to that and to your 

concern also with Value-Added Producer Grants, one of my favorite 

programs because of what it is able to do in unlocking more potential. I think it is thriving. 

If you could say a little more, Administrator Rikkers. 

Mr. RIKKERS. Thank you, Congressman Rouzer. It is a unique opportunity to speak to someone who was at least close to where I 

am today. It is special. So thank you for your question. 

To your first question of the reorganization draft plan that we 

have now, it is a proposed reorganization within the Rural Business—Cooperative Service that is working its way through the 

Rural Development review. Before starting this review, we made 

sure, first and foremost, that we made sure that we communicated 

128 

effectively and had spent time with the staff of both the appropriations staff of the Senate and House and the authorizing staff of 

both the Senate and the House. And have also met with stakeholders that have an interest in the reorganization. 

The reorganization is minor in the functioning of RBS. What it 

does is it makes some changes to our program so that we can better manage the responsibilities that, first, Congress has given us 

in our energy programs through the 2014 Farm Bill. It also 

changes and improves the management so that the important work 

that we do for cooperatives is better integrated with the core programs that we deliver. All of the functions that are currently being 

done now at RBS will continue to be performed. Although we think 

that through this reorganization, that we will be able to manage 

it more effectively. 

To your point about the Value-Added Producer Grant, it is a coveted program within RD, first, for the Committee, and the Committee instructed the USDA in the 2014 Farm Bill to make sure 

that it prioritized new and beginning farmers, as well as veteran 

farmers. And so in the new regulation that was published earlier 

this year, those priorities are reflected in the new regulation. 

We are working diligently, and we will be making awards by the 

end of this fiscal year, and we look forward to the results. And we 

know that they will reflect those priorities that this body had us 

incorporate into the regulations. So thank you. 

Mr. ROUZER. The B&I program has always been the flagship, obviously. How is our default rate looking on that these days? 

Mr. RIKKERS. We are at a historic low, I am proud to report. The 

default rate, or delinquency rate, nationally is under five percent. 

It is 4.87 as of this morning. So thank you. 

Mr. ROUZER. Mr. Hernandez, Community Facilities program was 

a popular one in my district. I have a lot of rural areas, a lot of 

small towns, a lot of fire stations, medical clinics, town halls, et 

cetera, that are always needing a little help. I remember when I 

was there, the demand for that program was just astronomical. I 

am just wondering what your dollar amount is, what the demand 

is these days? How large is your backlog? 

Mr. HERNANDEZ. The demand, Congressman, for this program is just outstanding. We get an appropriation of $2.2 billion. This year 

we think we are probably close, close to $1.1 billion. Forty-six percent of that is invested in rural health care. That is where a lot 

of the rural towns are looking for ways to any type of access to 

health care for facilities, equipment, and buildings; 20 percent is 

for education; and 50 percent for public infrastructure. People love 

this program. It helps change and build the community that you 

need to do with housing. You have to do both. Because what happens is people have to drive too far and so they need the facility, 

but they also need housing, both. 

Mr. ROUZER. Mr. Chairman, unfortunately, I see my time has expired. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Goodlatte, for 5 minutes. 

Mr. GOODLATTE. Thank you, Mr. Chairman. I appreciate your 

holding this series of hearings. And I want to welcome all of our 

witnesses. 

129 

To the Under Secretary and to Administrator McBride, I want to 

reiterate what a number of folks have said here about the importance of the services for economic development in rural areas. 

About 1⁄3 of the population of my district is in rural areas, and your 

work has had a tremendous impact on promoting and, in some instances, stabilizing economic development that might not take 

place but for your help. 

One of those areas, Administrator McBride, is the issue of rural 

broadband services. It is very, very important, but also has to be 

done very, very delicately. This is not like originally delivering telephone services or rural electrification where it was either there or 

it wasn’t there. In the old monopoly days where there was either 

one phone company providing services or there was no phone company providing services, that was a fairly easy call. But today, 

broadband services are provided from a multitude of different 

sources, and you can inadvertently destroy existing competition by 

providing government subsidies to entities that enter the marketplace, not to provide strictly new service to an area that doesn’t 

have any, but also to make their business more profitable and go 

into areas where there is already competition. Tell me, how are you 

handling that and how is it working? 

Mr. MCBRIDE. Thank you for the question, Congressman. 

The 2014 Farm Bill actually instituted an unserved requirement 

for the first time for our potential applicants. So for any applicant 

that is successful through the farm bill loan program, at least 15 

percent of that proposed service territory will be unserved. 

Mr. GOODLATTE. What is happening in the other 85 percent? 

Mr. MCBRIDE. Well, the second piece of this in terms of determining eligibility is that there is a requirement that there can be 

no more than three existing service providers. That is also in statute, and so we are careful to make sure that we are following that. 

Mr. GOODLATTE. What kind of complaints have you received from 

some of those existing providers who may be, for example, providing what had historically been broadband services, but as these 

speeds increase and increase and increase, it no longer is, and now 

there is the subsidy for a new competitor coming in? 

Mr. MCBRIDE. Part of the farm bill requirements that require us 

to post potential applications online will give existing service providers the ability to see who is applying, and they can contact us 

with any concerns that they might have. 

Mr. GOODLATTE. Is there any effort to balance this out? So if an 

existing provider comes in and says, well, you just gave this financing to this company that come in and provide this service, what opportunity do they have to get loans in order to upgrade their services to be competitive? 

Mr. MCBRIDE. Assuming that the existing service provider met 

the eligibility requirements under the program, they could potentially apply as well. 

Mr. GOODLATTE. What if they didn’t want to go into the 15 percent new file, they just wanted to be able to compete with somebody that you subsidized to compete with them? 

Mr. MCBRIDE. We would need to look at their application and 

discuss with them the possibilities that they are considering. 

130 

Mr. GOODLATTE. Well, could they qualify if they didn’t have that 

15 percent requirement? 

Mr. MCBRIDE. We are required to include a 15 percent unserved 

territory under the farm bill. 

Mr. GOODLATTE. Should there be an exception for these type of 

circumstances where you have let a new entrant into the market, 

they are competing very effectively in an already existent marketplace to the disadvantage of people who used private capital to invest in that same area? 

Mr. MCBRIDE. I wouldn’t speculate on exceptions. I don’t think 

I have that authority under the statute. 

Mr. GOODLATTE. I am just asking your opinion, I am not asking 

you to make the decision. 

Mr. MCBRIDE. I would want to see the potential applicants and 

the concerns that they raised and consider that fully before offering 

an opinion. 

Mr. GOODLATTE. Let me ask you one other subject area with regard to rural electricity. How will the President’s Clean Power Plan 

affect your loan portfolio? 

Mr. MCBRIDE. Right now, the action has moved to the states as 

they develop their plans. As I mentioned earlier, we are in frequent 

contact with all of our borrowers, and will want to work with them 

to make sure that they have the tools that they need to respond 

to the plan. 

Mr. GOODLATTE. Do you not have any concerns that some of the 

loans that you have outstanding may be jeopardized by the massive 

change in this policy? 

Mr. MCBRIDE. Without seeing the specific plans put forward by 

the states, I would hesitate to speculate on the impacts on individual borrowers. 

Mr. GOODLATTE. So you are going to put us off? 

Mr. MCBRIDE. We will be in touch with you as we move forward 

on this. 

Mr. GOODLATTE. All right. Thank you very much. 

The CHAIRMAN. Mr. King, for 5 minutes. 

Mr. KING. Thank you, Mr. Chairman. I thank the witnesses for 

your testimony. 

A couple of things come to mind as I listened to Mr. Goodlatte. 

One of them is—and I pose my first question to Mr. McBride— 

there is a model out there that has emerged, or is emerging, that 

sees rural water systems incorporating septic systems, rural septic 

systems. I shouldn’t use that word incorporate, but incorporate into 

their business model, not into the water system, where they would 

go in and build a system and then lease that system back to the 

property owner so that the property owner is no longer in ownership of their own leach field, but they are paying a monthly fee in 

order to avoid their requirement that is likely an EPA requirement 

that they upgrade their system. 

Could you comment on what that looks like for a business model, 

and what that might look like if much of the United States that 

is served by rural water would end up also being served by a rural 

water system that also does the sewer system? 

Mr. MCBRIDE. Thank you for the question, Congressman. That is 

not a specific issue that has been brought to my attention, but I 

131 

would be happy to follow up with you after the hearing and discuss 

the instances that you are referring to and look at that. 

Mr. KING. I appreciate that direct response, and I look forward 

to a comment further on that. I just don’t know that anybody has 

looked into that very far to contemplate what that means for, let’s 

say, a county, a state, a nation. I think that goes a lot further than 

what this Congress imagined. So I would ask you to take a look 

at that. 

Mr. MCBRIDE. Yes, sir. 

Mr. KING. I thank you for that. 

I would like to, then, turn to Under Secretary Mensah. And, 

again, thank you for your testimony. 

I am thinking in terms of rural development, and have many 

times, from this platform, said that all new wealth comes from the 

land. And you can mine it out of the Earth, and you can seine a 

few fish out of the ocean, but it is fields and mines, and the wealth, 

actually renewable wealth, comes out of the land itself. So when we 

talk about rural development, I know that there has been a concerted effort on the part of the USDA to focus on, especially development of our small towns and communities. I do think that is admirable, and it is about the second best way that you can raise 

children. If you can’t raise them on a family farm, you can raise 

them in a small town or rural area. It is a pretty good thing to promote. 

But I am concerned about the regulation we have on top of us 

now, the waters of the United States. And I lay that foundation for 

the economic development side of this because the utilization of 

this land has been driven by a desire for profit from people who 

are good stewards of the land. And the waters of the United States 

regulation turns this thing on its head, where it puts our producers 

in a position where they have to ask permission in order to utilize 

their property that they have invested in, either in their lifetime 

or in previous generations. 

I wonder if you would comment on what you think the impact 

is of an EPA that has a reach that—just a moment. I should probably lay a little more foundation on this. 

I am in Iowa. So the waters of the United States regulations, according to the map that has been delivered to me, would cover 96.7 

percent of Iowa. We don’t have an ocean, some say we don’t have 

a beach; 96.7 percent of the state, and the balance of that is in the 

prairie pothole region that looks to me like they are already designated wetlands. 

So it could be that the Federal Government has reached out to 

put special regulations on nearly every square foot of my state. And 

there are some 50+ practices that are essentially approved by this 

proposal, but many of those practices have been developed in my 

lifetime. So new practices they would have to have permission for. 

And I just ask you if you could comment on the threat that this 

is to put the Federal Government in a position to control crop inputs, to control nitrogen, for example. If they can do that, they can 

control production, they can limit the value of your land, and that 

affects rural development. So I would ask if you could comment on 

waters of the United States. 

132 

Ms. MENSAH. Congressman, thank you for your clear passion for 

where wealth comes from, wealth from the land, and your passion 

for your producers. 

I do not have a role in the waters of the U.S. rule. But what I 

can tell you is that Rural Development has been standing by the 

small communities, the producers, the people that need broadband, 

that need housing, that need businesses, and that is really our role, 

and I look forward to seeing that continue. 

Mr. KING. I would just ask you to couple that into your thinking 

because the well-being of the people in these communities is going 

to be directly tied to the profitability of the land that surrounds 

them. 

I appreciate your comments and your testimony. 

Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. The gentleman yields back. 

I want to thank our panel today for coming up and sharing with 

us. We appreciate your testimony and your candor. I appreciate 

what you do. The four of you supervise an important part of the 

farm bill and the work that it does, but rural America and production agriculture can’t prosper without each other. So I appreciate 

the work you do and I appreciate this morning’s testimony. 

[Recess.] 

The CHAIRMAN. Good morning. Welcome to our second panel. 

Before I introduce our panel, administrative business. Given the 

really strong showing of Members today, I want to ask unanimous 

consent that we take the questioning time to 4 minutes instead of 

5. We had hoped to have both panels done this morning by 12:30 

so we would have time for the afternoon panel. So we will go to 

4 minutes for questions for everybody. And rather than taking a 

formal lunch break, Members are advised that we have food in 

1302, so come and go as you please to take care of that, and we 

will move on to the panel. 

I would now like to welcome our second panel. We have the Honorable Ed Avalos, Under Secretary, Marketing and Regulatory Programs, USDA; Mr. Alfred Almanza, Deputy Under Secretary for 

Food Safety, USDA; and then joining both Under Secretaries 

Avalos and Almanza, we have Ms. Anne Alonzo, Administrator, Agricultural Marketing Service; Mr. Kevin Shea, Administrator, Animal and Plant Health Inspection Service; and Mr. Larry Mitchell, 

Administrator, Grain Inspection, Packers and Stockyards Administration. 

Let me, again, thank the panel for coming this afternoon. I appreciate your patience with the morning panel which went a little 

longer. We are now ready for the report from you on the good work 

that you do. So, Mr. Avalos, if you would start us off, we will be 

good to go. 

133 

STATEMENT OF HON. EDWARD M. AVALOS, UNDER 

SECRETARY, MARKETING AND REGULATORY PROGRAMS, 

U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 

ACCOMPANIED BY ANNE L. ALONZO, J.D., ADMINISTRATOR, 

AGRICULTURAL MARKETING SERVICE, USDA; KEVIN SHEA, 

ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION 

SERVICE, USDA; AND LARRY MITCHELL, ADMINISTRATOR, 

GRAIN INSPECTION, PACKERS AND STOCKYARDS 

ADMINISTRATION, USDA 

Mr. AVALOS. Mr. Chairman and distinguished Members of this 

Committee, I am pleased to appear before you to discuss activities 

of U.S. Department of Agriculture Marketing and Regulatory Programs mission area, which includes the Agricultural Marketing 

Service, AMS, Animal and Plant Health Inspection Service, APHIS, 

and the Grain Inspection, Packers and Stockyards Administration, 

GIPSA. 

With me today are Mr. Kevin Shea, Administrator for APHIS; 

Ms. Anne Alonzo, Administrator for AMS; and Mr. Larry Mitchell, 

Administrator for GIPSA. 

Agriculture is an engine of growth and prosperity, directly or indirectly supporting 16 million jobs. MRP programs contribute significantly to the success and development of domestic and international markets in a variety of ways. Each of our agencies has 

unique responsibilities that are crucial to this work. Today, my colleagues and I are here to discuss some of these responsibilities and 

how we contribute to the success and profitability of American agriculture. 

APHIS’ primary mission is to safeguard health and value of U.S. 

agriculture and other plant and animal resources. The agency’s 

programs protect U.S. livestock, poultry, and specialty crops which 

are worth more than $191 billion. Also, they assure well-being of 

animals covered under the Animal Welfare Act. APHIS employees 

come to work every day across the country and around the world 

to serve the diverse array of customers and stakeholders and respond to challenges and threats as they arise, such as avian influenza. These customers include ranchers, farmers, poultry producers, licensed animal dealers, importers, exporters, and many, 

many others. 

While APHIS is engaged in this crucial work, the agency is also doing so much more with less. We have lost over $400 million in 

appropriations over the last 4 years. 

One area where APHIS has made significant strides is with its 

biotech petition review process. In recent years, this process has 

taken more than 3 years for review, and preparation of evaluations 

necessary to make the decisions. Such delays added to a growing 

backlog of petitions. To address this situation, APHIS undertook a 

business process improvement review, which allowed APHIS to 

eliminate the backlog and to cut review times down to about 18 

months. And in the near future when the process is fully implemented, the review time will be down to around 15 months. 

USDA and APHIS have been confronting the largest animal 

health emergency in this country’s history. APHIS is dealing with 

an unprecedented outbreak of highly pathogenic avian influenza, 

taking a heavy toll on the poultry industry. Mr. Chairman and 

134 

Members of this Committee, I can assure you, however, that this 

disease has USDA’s fullest attention and we are committed to 

standing with our producers, poultry industry, and the rural communities to get them back on their feet. 

In Fiscal Year 2014, APHIS requested and received funding from 

Congress to initiate the National Feral Swine Damage Management program. These animals cause damage estimated at $1.5 billion every year and pose risks to agriculture, natural resources, 

property, animal health, human health and safety. APHIS is working to remove animals in 41 states, and together with our partners, 

APHIS established state-level management control plans that outline our management goals and objectives with regard to feral 

swine in each state. Depending on local conditions, these range 

from total elimination of feral swine populations to management of 

individual populations. 

We also appreciate Congress’ support of the Huanglongbing, 

HLB, Multi-Agency Coordination group. With support from Congress, the HLB MAC has been able to approve $20 million in 

projects to put practical tools to work in the field now while longerterm solutions are being developed. MAC is working very hard in 

support of the citrus industry to fund near-term practical tools and 

solutions for the industry to use in combating citrus greening. 

APHIS has made significant progress in addressing a variety of 

other plant pests, including our successful work with the State of 

California to address and to keep the European grapevine moth 

from maintaining a foothold. 

I am also proud of the work that APHIS has done towards eradicating the boll weevils from the United States. Through the agency’s work with state partners, the cotton industry and our counterparts in Mexico, APHIS has worked to eradicate boll weevils from 

over 99 percent of the 16 million acres of U.S. cotton. 

APHIS also used funding provided by the 2014 Farm Bill to continue to enhance plant health through two important programs— 

the Plant Pest and Disease Management and Disaster Prevention 

program and the National Clean Plant Network program. Since 

2009, APHIS has funded more than 1,800 projects in 50 states and 

two U.S. territories. 

The ability to export is key to the growth, profitability, and continued success for our U.S. farmers, ranchers, and related agricultural businesses. For some crops, 50 percent or more of our production is exported, including 80 percent of U.S. cotton, 70 percent of 

tree nuts, 50 percent of wheat, and 50 percent of rice. Agricultural 

exports were a record $152 billion last year, and have climbed more 

than 58 percent in value since 2009. 

Last year, APHIS, in cooperation with other agencies, successfully negotiated and resolved a total of 170 sanitary and 

phytosanitary trade-related issues involving U.S. agricultural exports, with an estimated value of $2.5 billion. APHIS also successfully intervened in 273 situations where U.S. cargo was being held 

up in foreign ports of entry, which prevented and rejected shipments worth more than $49 million. 

The mission of AMS is to facilitate the efficient, fair marketing 

of U.S. agricultural products, including food, fiber, and specialty 

crops. AMS administers programs that create domestic and interVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00138 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
135 

national marketing opportunities for U.S. producers. AMS also provides the agriculture industry with valuable services to ensure the 

quality and availability of wholesome food for consumers across the 

country. 

AMS carries a wide range of programs under the authorization 

of the Agricultural Marketing Act of 1946, as well as over 50 other 

statutes. More than 1⁄2 of the funds needed to finance AMS activities are derived from voluntary user fees. AMS also provides services for private industry and state and Federal agencies on a reimbursable basis. In addition, AMS conducts several appropriated 

program activities through cooperative agreements with State Departments of Agriculture and other agencies. 

AMS employees work every day to support the country’s diverse 

agricultural operations. The agency’s workforce includes marketing 

specialists, commodity graders, economists, Market News reporters, 

scientists, and analysts who support the marketing of American agricultural products and work in industry-specific processing plants, 

terminal and shipping point markets, production facilities, and office environments. AMS provides services and awards millions of 

dollars in annual grant investments that create opportunities by 

supporting economic development in small towns and rural communities across the United States. 

Much of the agency’s support for agriculture is provided through 

commodity-specific efforts, such as its dairy; food and vegetable; 

livestock, poultry and seed; and cotton and tobacco programs. AMS 

also oversees the National Organic Program; Science and Technology Program; and the Transportation and Marketing Program. 

Further, AMS provides oversight for 20 research and promotion 

programs. 

I would like to provide a few examples of how AMS activities 

touch and benefit U.S. agricultural producers and consumers. One 

of the most widely used programs is Market News. This year marks 

the 100 year anniversary for AMS Market News, which provides 

agricultural stakeholders with information they need to evaluate 

market conditions and trends, to make marketing decisions, and to 

assess movement of products across the nation and across the 

world. 

Another key AMS activity is purchasing nonprice supported commodities, such as meats, fish, fruits, vegetables, poultry, and egg 

products in order to stabilize market conditions pursuant to Section 

32 and in support of nutrition assistance programs within USDA. 

The AMS grant programs also play an important role in facilitating marketing, assisting states in exploring new market opportunities for U.S. food and agricultural products both locally and 

internationally. 

The CHAIRMAN. Mr. Avalos, you are a little past the 5 minute 

mark. Do you want to go ahead and finish up? 

Mr. AVALOS. Well, okay, Mr. Chairman. This was turned in, I 

guess the Members will read it? 

The CHAIRMAN. The written report, your written comments, will 

be in the record, of course. Any last couple thoughts? 

Mr. AVALOS. Mr. Chairman, let me just say this: I want to thank 

you and the Committee for an invitation to be here. We stand 

136 

ready to answer any questions you might have on the MRP mission 

area. 

[The prepared statement of Mr. Avalos follows:] 

PREPARED STATEMENT OF HON. EDWARD M. AVALOS, UNDER SECRETARY, MARKETING

AND REGULATORY PROGRAMS, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, 

D.C. 

Mr. Chairman and distinguished Members of this Committee, I am pleased to appear before you to discuss the activities of the U.S. Department of Agriculture 

(USDA) Marketing and Regulatory Programs (MRP) mission area, including the Agricultural Marketing Service (AMS), the Animal and Plant Health Inspection Service (APHIS), and the Grain Inspection, Packers and Stockyards Administration 

(GIPSA). 

With me today are: Mr. Kevin Shea, Administrator of APHIS; Ms. Anne Alonzo, 

Administrator of AMS; and Mr. Larry Mitchell, Administrator of GIPSA. They will 

answer questions regarding specific agency activities. 

Agriculture is an engine of growth and prosperity, directly or indirectly supporting 

16 million jobs. MRP programs have contributed significantly to the success as well 

as the development of domestic markets in a variety of ways. For example, both 

AMS and GIPSA certify the quality of agricultural commodities and provide industry with a competitive edge earned by the USDA seal of approval for grading and 

inspection. AMS also facilitates marketing by reporting essential market data, upholding strong organic standards, and supporting the ongoing growth of local and 

regional food systems. GIPSA works to help ensure that livestock producers have 

a fair and competitive market environment. APHIS also protects the health of 

plants and animals, enhancing the competitiveness of U.S. producers by keeping 

production and marketing costs low. All three agencies help resolve international 

issues to maintain and open markets around the world for U.S. products, thus supporting American families. 

As you can see, each of our agencies has unique responsibilities, and today my 

colleagues and I are here to and discuss the important work our agencies are engaged in and how the agencies contribute to the success of American agriculture. 

APHIS 

APHIS’ primary mission is to safeguard the health and value of U.S. agricultural 

and other plant and animal resources. The Agency’s programs protect U.S. livestock, 

poultry, and specialty crops worth more than $191 billion (based on data from the 

2012 Census of Agriculture), as well as the well-being of animals covered under the 

Animal Welfare Act. APHIS employees come to work, every day, across the country 

and around the world, to serve a diverse array of customers and stakeholders and 

respond to challenges and threats, such as Avian Influenza, as they arise. These 

customers include ranchers, farmers, poultry producers, citrus producers, licensed 

animal dealers, importers and exporters, and many others. While APHIS is engaged 

in this crucial work, the Agency is also doing more with less. APHIS has lost more 

than $400 million in appropriations over the last 4 years. This means there are 225 

fewer staff for APHIS’ veterinary services program from 2009 levels at a time when 

it is facing the continuing threat of HPAI. 

Several core beliefs form the foundation of this mission. First, healthy and profitable agriculture is good for America; it provides food and clothing for countless people worldwide and is a key pillar to a thriving economy. Second, as a Federal agency, APHIS’ role is to take actions that no one state or individual entity has the capacity to take on their own. And third, APHIS has a special role to carry out in 

caring for vulnerable animals. 

Biotechnology 

One area where APHIS has made significant strides is with its biotechnology petition review process. In recent years, this process was taking more than 3 years for 

review and preparation of evaluations necessary to make regulatory decisions. Such 

delays added to a growing backlog of petitions. To address this situation, APHIS undertook a business process improvement review, has developed a process that when 

fully implemented will take 13 to 15 months for the review of petitions that do not 

require an environmental impact statement (EIS). The Agency is now nearly 

through the entire list of backlogged petitions and has reduced petition review times 

to an average of 18 months without compromising the quality of the analyses. The 

Agency expects to fully meet the new timeframes for new petitions received in FY 

2015. For petitions that do require an environmental impact statement, additional 

137 

resources are being devoted to these intensive analyses so they can be completed 

in a timely manner. 

HPAI 

USDA and APHIS have been confronting the largest animal health emergency in 

this country’s history. APHIS is dealing with an unprecedented outbreak of highly 

pathogenic avian influenza (HPAI) that is taking a heavy toll on the poultry industry. People have lost their jobs and have seen their livelihoods put in grave danger 

by this outbreak, and our hearts go out to them. I can assure you, however, that 

this disease has USDA’s fullest attention, and we are committed to standing with 

our producers, the poultry industry, and the communities they live in and support, 

to get them back on their feet. 

USDA has been and will be there every step of the way with producers, industry, 

and our state partners. APHIS has worked closely with them to respond quickly and 

decisively to this outbreak. More than 400 USDA staff and nearly 3,000 USDA-contracted personnel have been working around the clock in every affected state on the 

response. We’ve delivered over $190 million in indemnification payments to producers to control the spread of disease, and to help them recover from it. Should 

the need arise, we have the authority to request even further funding. All told, 

USDA has received around $1 billion in Commodity Credit Corporation (CCC) funding to address this outbreak. We’ve seen trade cut off by trading partners concerned 

about the devastating effects of this disease, causing over $1 billion in poultry products to be directed to other markets at a cost to producers. We understand the devastating impact this outbreak has had upon all, and we are committed to helping 

those affected. And we will help protect those producers who have not yet been— 

and we certainly hope, will not be—impacted by this disease. 

Despite the difficulties we’ve faced, we’ve had some good news. APHIS has not 

had a single detection of the disease since June 17, and of the 211 commercial premises affected, cleaning and disinfection has been completed on 178, and 133 are eligible to restock. The restocking guidelines that the Agency and the states have put 

in place provide assurance that the premises and the local environment are free 

from the disease, and that enhanced biosecurity measures are in place to reduce the 

threat of re-contamination. 

APHIS HPAI emergency response activities in the spring were largely based on 

existing emergency response plans the Agency and its partners developed prior to 

the outbreak. As the Agency began planning for the fall, it spent a lot of time meeting with states and industry to determine what worked and what needed to be improved so that the response for any potential fall outbreaks could be improved. 

In addition to weekly planning and information-sharing calls with state and industry partners through the spring and summer, USDA participated in several conferences and workshops to discuss these issues and plan for the fall. Two important 

workshops were held in Riverdale, Maryland and Des Moines, Iowa. Industry and 

Animal Health officials discussed worst case scenarios, and preparation efforts going 

into the fall season. 

Based upon those conversations and the lessons APHIS identified, the Agency prepared and presented to the Secretary a comprehensive and updated emergency response plan for the fall outbreak. The plan outlines steps the Agency and its partners will take, including enhancing biosecurity, increasing surveillance efforts, and 

improving efforts to identify and deploy personnel. 

Other actions that APHIS has identified or implemented as a result of our fall 

planning: 

• Conducted a nationwide review of emergency resources to identify state and 

local resources that could contribute to a response and reduce response time. 

• Emphasized the need for stronger biosecurity and worked with states and industry to prepare additional materials to educate producers. 

• Prepared to deploy vaccines, including issuing a request for proposals to stockpile vaccines and holding discussions with trading partners about how USDA 

would use them. 

• Increased wild bird surveillance with Federal and state partners to more quickly identify where the virus may strike. 

• Initiated the hiring process to bring additional veterinarians and employees to 

USDA on a term basis to assist with any potential outbreak. 

• Worked with state partners to identify disposal options in each state, such as 

landfills, to allow for more rapid depopulation and disposal of sick birds. 

138 

• Set a goal to more rapidly depopulate sick birds, within 24 hours if possible, 

which will reduce the amount of virus in the environment and help reduce potential lateral spread. 

• Started work on developing a new virus elimination process to more rapidly and 

cost-efficiently provide funding to producers to remove the virus from their 

barns. 

APHIS has encouraged states to update their response plans, and has worked 

with them to identify depopulation and disposal options available in their states. 

APHIS has also begun an inventory of necessary depopulation and disposal equipment and will work to stage equipment in strategic areas. 

Feral Swine 

In FY 2014, APHIS requested and received funding from Congress to initiate the 

National Feral Swine Damage Management program. These animals cause damage 

estimated at $1.5 billion annually and pose risks to agriculture, natural resources, 

property, animal health, and human health and safety. APHIS is working to remove 

animals in the 41 states, and with our partners, has established state-level management control plans that outline our management goals and objectives for each state. 

Depending on local conditions, these range from total elimination of feral swine populations to the management of individual populations. 

Plant Protection Issues 

We also appreciate Congress’ support of the Huanglongbing (HLB) Multi-Agency 

Coordination group (MAC). The MAC is working diligently with the citrus industry 

to find near-term practical tools and solutions for the industry to use in combating 

HLB. It has brought unprecedented coordination and cooperation across Federal and 

state agencies and industry in an effort to speed progress on methods to fight this 

disease. With support from Congress, the HLB MAC has been able to approve $20 

million in HLB-related projects to put practical tools to work in the field now while 

longer term solutions are developed. Some of the tools being developed include delivering thermal therapy to citrus trees (to kill the bacteria that causes HLB) on a 

grove-size scale, increasing production of biological control agents to manage Asian 

citrus psyllid populations (which spreads HLB), and training detector dogs to find 

trees newly infected with HLB, among other exciting projects. In addition, in FY 

2015, with Congress’ support, APHIS was able to commit more than $48.5 million 

to Citrus Health Response Program activities with an emphasis on HLB and Asian 

citrus psyllid. 

APHIS also has made significant progress in addressing a variety of plant pests, 

including our very successful work with the State of California and industry to keep 

the European grapevine moth (EGVM) from establishing a foothold. APHIS detected 

more than 100,000 of these moths in FY 2009, the first year of the program. Last 

year, on track with expectations, APHIS found a single moth. It meant the Agency 

could free all of Solano County and portions of Sonoma and Napa counties from Federal quarantine in time for the fall grape harvest. Although we can’t claim just yet 

that we’ve completely eradicated this pest, this progress is a tremendous win for all 

of us. 

I am also very proud of the work APHIS has done toward eradicating boll weevil 

from the United States. More than 30 years ago, you could find boll weevils in every 

cotton-producing state from Virginia to Texas. Through cooperative work with state 

partners, the cotton industry, and counterparts in Mexico, we have eradicated boll 

weevils from 99.5 percent of the 16 million acres of the U.S. cotton crop. In Fiscal 

Year 2014, the number of boll weevils captured decreased in the Lower Rio Grande 

Valley by more than 32 percent. This effort helped growers in the Valley have the 

option to plant 55,000 more acres of cotton than they did the previous year. 

APHIS has also used the funding provided by the Agricultural Act of 2014 (2014 

Farm Bill) to continue to enhance plant health through two important programs, 

Plant Pest and Disease Management and Disaster Prevention and the National 

Clean Plant Network (NCPN). Since 2009, APHIS has funded more than 1,800 

projects in 50 states and two U.S. territories, strengthening the Agency’s abilities 

to protect U.S. agriculture and natural resources from foreign pest threats. In support of the NCPN, which provides reliable sources of pathogen-free planting stock 

of high-value specialty crops, APHIS and cooperators have also provided funding 

and other support to 20 clean plant centers and associated programs in 16 states 

representing five specialty crops including fruit trees, grapes, citrus, berries, and 

hops. 

139 

Exports 

The ability to export is key to the growth, profitability, and continued success of 

U.S. farmers and ranchers and related agricultural businesses. For some crops, 50 

percent or more of our production is exported, including 80 percent of U.S. cotton, 

70 percent of tree nuts, and 50 percent of wheat and rice. Agricultural exports surpassed $152 billion in FY 2014, and have climbed more than 58 percent in value 

since 2009, totaling $771.7 billion over the past 5 years. They have increased in volume as well as monetary value, demonstrating world-wide demand for high-quality 

U.S. grown products. 

APHIS plays a significant role in continuing to help U.S. farmers and ranchers 

access new markets. Last year, APHIS, in cooperation with other agencies, successfully negotiated and resolved a total of 170 sanitary and phytosanitary (SPS) traderelated issues involving U.S. agricultural exports, with an estimated market value 

of $2.5 billion. This includes continuing efforts to eliminate all remaining bovine 

spongiform encephalopathy (BSE)-related restrictions on U.S. cattle and beef. In FY 

2014, APHIS achieved success with several countries agreeing to remove all BSE 

restrictions and grant access to U.S. beef and beef products. These include major 

markets such as Mexico and Hong Kong, among others. APHIS also successfully intervened in 273 situations where U.S. cargo was held up at foreign ports-of-entry, 

which prevented the rejection of shipments worth more than $49 million. 

Animal Welfare 

APHIS’ Animal Welfare program carries out activities designed to ensure the humane care and treatment of animals covered under the Animal Welfare Act (AWA) 

through inspections, enforcement, and education. The program ensures that proper 

care is provided for certain animals that are: exhibited to the public; bred for commercial sale; used in medical research; or transported commercially. Facilities using 

regulated animals for regulated purposes must provide their animals with adequate 

housing, sanitation, nutrition, water and veterinary care, and they must protect 

their animals from extreme weather and temperatures. 

AMS 

The mission of AMS is to facilitate the efficient, fair marketing of U.S. agricultural products, including food, fiber, and specialty crops. AMS administers programs 

that create domestic and international marketing opportunities for U.S. producers. 

AMS also provides the agriculture industry with valuable services to ensure the 

quality and availability of wholesome food for consumers across the country. 

AMS carries out a wide range of programs under the authorization of the Agricultural Marketing Act of 1946, as well as over 50 other statutes. More than 1⁄2 of the 

funds needed to finance AMS activities (excluding commodity purchase program 

funds) are derived from voluntary user fees. AMS also provides services for private 

industry and state-Federal agencies on a reimbursable basis. In addition, AMS conducts several appropriated program activities through cooperative arrangements 

with State Departments of Agriculture and other agencies. 

AMS employees work every day to support the country’s diverse agricultural operations. The Agency’s workforce includes marketing specialists, commodity graders, 

economists, market news reporters, scientists, and analysts who support the marketing of American agricultural products and work in industry-specific processing 

plants, terminal and shipping point markets, production facilities, and office environments. AMS provides services and awards millions of dollars in annual grant investments that create opportunities by supporting economic development in small 

towns and rural communities across America. 

Much of the agency’s support for agriculture is provided through commodity-specific efforts, such as its Dairy; Fruit and Vegetable; Livestock, Poultry and Seed; and 

Cotton and Tobacco Programs. AMS also oversees the National Organic Program; 

Science and Technology Program; and the Transportation and Marketing Program. 

Further, AMS provides oversight for over 20 research and promotion programs, also 

known as checkoffs, which are responsible for well-known advertising campaigns 

such as ‘‘Got Milk’’ and ‘‘Beef: It’s what’s for dinner.’’ In addition, AMS enforces 

other Federal regulations such as the Perishable Agricultural Commodities Act 

(PACA) and the Federal Seed Act. 

I would like to provide the Committee with a few examples of how AMS activities 

touch and benefit U.S. agricultural producers and consumers. One of our most widely used programs is Market News. This year marks 100 years of AMS’ Market News 

which provides agricultural stakeholders with the information they need to evaluate 

market conditions and trends, make purchasing decisions, and assess movement of 

products across the nation and the globe. Every year, AMS issues more than 

250,000 reports that get more than 53 million views. Agricultural stakeholders 

140 

around the country rely on USDA Market News as a trusted source for timely, reliable, unbiased data. 

Market News is constantly evaluating the evolving needs of the agriculture industry to better serve our stakeholders. For example, AMS is increasing reporting on 

organic commodities and on locally and regionally marketed products in response 

to market demand. The Agency recently released an innovative, enhanced version 

of the Market News Portal with simplified navigation, giving users easier access to 

the wealth of timely and reliable data. 

Another key AMS activity is purchasing non-price supported commodities such as 

meats, fish, fruits, vegetables, poultry, and egg products in order to stabilize market 

conditions pursuant to Section 32, and in support of nutrition assistance program 

needs within USDA. The 2002 and 2008 Farm Bills established minimum levels of 

specialty crop purchases. All purchased commodities are distributed by FNS to 

schools or to other domestic nutrition assistance programs. In 2014, AMS’ Commodity Purchase Program purchased a total of over $1.5 billion worth of food from 

our nation’s producers. These purchases support producers in rural America, while 

helping meet government nutrition goals. 

AMS grant programs also play an important role in facilitating marketing. The 

Federal-State Marketing Improvement Program (FSMIP) provides matching funds 

to states to assist in exploring new market opportunities for U.S. food and agricultural products, both locally and internationally. Recent FSMIP projects have supported efforts to bolster local and regional food systems through farmers’ markets 

and community supported agriculture operations, while other projects have focused 

on building international markets for pine lumber, pork, and more. 

With the Specialty Crop Block Grant Program, AMS helps states strengthen markets for their specialty crops, such as fruits, vegetables, tree nuts, horticulture and 

nursery crops. In FY 2014, all 50 states, the District of Columbia, and four U.S. Territories were awarded Specialty Crop Block Grants that funded a total of 839 

projects, totaling approximately $66 million. AMS expects to award approximately 

$63 million in FY 2015. These grants address issues ranging from food safety to research needs to increased access to fruits and vegetables, all benefiting specialty 

crop producers and consumers across the country. With additional funding from the 

2014 Farm Bill, we are able to do even more to help specialty crop growers increase 

profitability and sustainability. 

Farmers Market and Local Food Promotion Program grants are available annually to support local and regional food systems through two competitive programs: 

the Farmers Market Promotion Program (FMPP) and the Local Food Promotion Program (LFPP). FMPP grants fund farmer-to-consumer direct marketing projects such 

as farmers’ markets, community-supported agriculture programs, roadside stands, 

and agritourism. LFPP grants fund local and regional food business enterprises that 

serve as intermediaries to process, distribute, aggregate, and store locally or regionally produced food products. Projects also provide technical assistance and outreach, 

including planning grants for local food businesses. For Fiscal Year 2015, AMS expects to award over $27 million in competitive grants to expand marketing through 

these two programs. 

AMS, along with other USDA agencies, is helping producers tap into growing consumer demand for locally-grown food. According an Economic Research Service report, the value of local food sales, defined as the sale of food for human consumption 

through both direct-to-consumer (e.g., farmers’ markets) and intermediated marketing channels (e.g., sales to institutions or regional distributors), topped $6 billion 

in 2012. Secretary Vilsack has identified strengthening local and regional food systems as one of the four pillars of USDA’s work to help revitalize the rural economy 

and create jobs. Recently, AMS launched a new set of Local Food Directories to help 

consumers find Community Supported Agriculture enterprises, food hubs, and onfarm stores, making it easier for consumers to find local food. AMS research and 

technical assistance contribute to our efforts to provide farmers and ranchers 

around the country with tools to reach consumers, strengthen ties between urban 

and rural communities, and help meet the growing demand for locally and regionally produced food. 

As demand for certified organic food products continues to grow, AMS plays a key 

role in setting and enforcing meaningful standards. In 2014, AMS partnered with 

13 organizations to develop tools that will identify and remove barriers to certification and streamline the certification process. The projects will be completed by 

September 2015. Tools, resources, and technical assistance—including educational 

materials, training videos, and more—will be widely available to help farmers and 

businesses that are new to organic production. The 2014 Farm Bill added additional 

resources to support organic certification, research, and market development. AMS 

quickly made organic certification cost-share funds available to help producers pay 

141 

for the cost of certification, and we have already published a proposed rule to expand the organic exemption for producers paying into commodity checkoff programs. 

Within five of the twelve titles of the 2014 Farm Bill, there were nearly 30 provisions related to AMS. The agency has made great strides toward implementation 

including the timely awarding of grants, providing several reports to Congress, establishing the Unprocessed Fruit and Vegetable Pilot in eight states, and moving 

to a hearing on a proposed California Federal Milk Marketing Order. 

GIPSA 

The core mission of GIPSA is to facilitate the marketing of livestock, poultry, 

meat, cereals, oilseeds, and related agricultural products, and promote fair and competitive trading practices for the overall benefit of consumers and American agriculture. GIPSA plays an integral role in ensuring the economic viability of America’s 

farmers and livestock producers, and in turn, of rural America. GIPSA administers 

two programs that are very import to American agriculture: the Packers and Stockyards Program (P&SP) and the Federal Grain Inspection Service (FGIS). 

Packers and Stockyards Program 

Under the Packers and Stockyards Act (P&S Act), GIPSA’s P&SP regulates businesses that market livestock, poultry, and meat. Congress passed the P&S Act in 

1921 to address serious concerns of unfair and deceptive practices in the 

meatpacking industry. Over the years, Congress has amended and supplemented 

the P&S Act to keep the Act relevant to the changing livestock, poultry and meat 

industries. For instance, in 1976, Congress added authority for the Secretary to assess civil penalties for violations. In 1987, Congress added financial protection for 

poultry producers, and as recently as 2008, Congress added the right of producers 

growing poultry or swine under contract to decline arbitration clauses in the contracts and established the forum for resolving disputes. 

Today, the P&S Act promotes fair and competitive marketing in livestock, poultry, 

and wholesale meat for the benefit of American agriculture and consumers. By fostering fair competition, the P&SP helps assure that meat and meat products are 

available to consumers at fair prices. Fair competition, payment protection, and prohibitions against deceptive and fraudulent trade practices in livestock markets assure producers that they will receive competitive prices and timely payment for livestock. 

The P&S Act provides specific protections for poultry growers and swine production contract growers including the right to cancel production contracts, the right 

to be informed of the possibility of additional capital investments, the right to resolve contract disputes in the Federal judicial district in which the principle part 

of the performance takes place under the contract, and the right to decline to be 

bound by the arbitration provision in a contract. 

The P&S Program investigative work is handled by three regional offices located 

in Atlanta, Georgia, Des Moines, Iowa, and Aurora, Colorado. The regional offices 

include a staff of auditors, marketing specialists, resident agents, economists, investigating attorneys, and legal specialists some of whom are assigned to the regional 

office and others whose duty stations are their personal residences. These employees 

conduct investigations and regulatory activities such as business audits, weighing 

verifications, and day-to-day industry monitoring. The P&SP Washington, D.C. staff 

provides litigation support through investigation review, sanction recommendation, 

hearing preparation, settlement negotiations, and testimony at hearings. The headquarters staff also processes and summarizes industry data and develops policy and 

information materials and drafts notices and regulations under the P&S Act. 

By protecting fair-trade practices, financial integrity, and competitive markets, 

GIPSA promotes marketplace fairness for livestock producers, buyers, sellers, swine 

contract growers, and poultry growers for the benefit of all market participants and 

American consumers. 

GIPSA maintains a toll-free hotline (800–998–3447) to receive complaints and 

other communications from livestock producers, poultry growers, and other members 

of the industry or general public. The hotline allows callers to voice their concerns 

or file a complaint anonymously. GIPSA responds to all calls received. In 2014, 

GIPSA initiated 86 investigations or reviews of livestock market operations in response to complaints. Although this was less than four percent of all investigations 

and reviews of market agencies that year, complaints from injured parties or the 

general public are important sources of information about fairness and financial integrity in the livestock sector. 

Federal Grain Inspection Service 

FGIS facilitates the marketing of U.S. grain, oilseeds, and related agricultural 

products by providing official U.S. grading standards, as well as methods to assess 

142 

* Editor’s note: the Administrators listed as accompanying Mr. Avalos are also accompanying 

Mr. Almanza. To avoid duplication they are not printed here. 

product quality; maintaining the integrity of the marketing system by enforcing the 

U.S. Grain Standards Act (USGSA) and the Agricultural Marketing Act of 1946 

(AMA); and administration and oversight of America’s national grain inspection system, a network of third-party Federal, state, and private laboratories that provide 

impartial, user-fee funded official inspection and weighing services under the 

USGSA and the AMA. Grain standards established under the USGSA and AMA and 

maintained by FGIS are used to facilitate the marketing of approximately 301 million metric tons of grain, rice, and pulses for export around the world by the way 

of ships, trucks, rail, and containers worth approximately $50 billion. In 2014, there 

were more than 3.3 million inspections. This amounted to approximately one out of 

every four rows of corn raised in the U.S., one out of every two rows of soybeans 

and two out of every five truckloads of wheat. 

FGIS is recognized worldwide as the gold standard for grain inspection. From October 1, 2014, to July 31, 2015, FGIS grain inspection accuracy was 96.5% based 

on a review of 3,782 samples covering a total of 7,144 factors. FGIS resolves grain 

quality and weight discrepancies, by promoting domestic grain and commodity 

standards and marketing infrastructures in other countries. FGIS also assists importers in developing quality specifications and complements international trade by 

training foreign inspectors in U.S. inspection methods and procedures. 

During 2014, GIPSA personnel met with 49 teams from 32 nations. This year 

FGIS inspectors traveled to China to certify grain shipments, as well as Columbia 

and Algeria to conduct workshops on U.S. inspection methods for corn, soybean, and 

wheat. These activities foster a better understanding of the entire U.S. grain marketing system and enhance purchasers’ confidence in U.S. grain. Ultimately, these 

efforts are instrumental in moving our nation’s harvest to end-users around the 

globe. 

Conclusion 

In closing, MRP supports the Department of Agriculture’s key role in growing the 

rural economy and supporting producers and consumers across the nation. As Federal agencies tasked with regulating and facilitating the agricultural industry, MRP 

agencies must perform this work at the speed of commerce. To do this, AMS, 

APHIS, and GIPSA must have strong relationships and partnerships with state 

agencies, industry groups, universities, and other Federal agencies, among others. 

Further, we are constantly seeking new opportunities to leverage the capabilities of 

other USDA mission areas to meet the needs of producers and consumers. 

In addition, I would like to take this opportunity to thank Chairman Conaway, 

Ranking Member Peterson, and the Members of this Committee and their staff for 

their leadership in the efforts to reauthorize the U.S. Grain Standards Act and the 

Mandatory Price Reporting Act. We are grateful for the Committee’s efforts and look 

forward to the completion of this important work before September 30, 2015. 

Mr. Chairman and Members of this Committee, this concludes my statement. 

Thank you for the opportunity today and I look forward to continuing to work with 

you. At this time, my colleagues and I will be glad to answer any questions you may 

have regarding the MRP mission area. 

The CHAIRMAN. Mr. Almanza, 5 minutes. 

STATEMENT OF ALFRED V. ALMANZA, DEPUTY UNDER 

SECRETARY, FOOD SAFETY, U.S. DEPARTMENT OF 

AGRICULTURE, WASHINGTON, D.C.* 

Mr. ALMANZA. Thank you. Mr. Chairman, Ranking Member Peterson, and Members of the Committee, I am the Deputy Under 

Secretary for Food Safety at the United States Department of Agriculture, and I would like to thank you for the opportunity to come 

before you here today to discuss our food safety mission. To start, 

I would like to thank you, Chairman Conaway, for joining me on 

the plant tour this past year, and I would also like to extend the 

invitation to any of you to accompany me on a tour in the future. 

A plant tour is really the best way to see what our inspectors do 

on the line and what they are doing on a daily basis to protect the 

143 

public’s health. I look forward to continue working with Representatives Rouzer and Davis, as well as all Members of the Agriculture 

Committee. 

Sometimes it is easy to forget that the meat on your plate has 

undergone a thorough process of inspection and testing to ensure 

that you don’t get sick, but if you are one of the millions of Americans who consume meat, poultry, or processed egg products, your 

food is inspected every single day by the dedicated man and women 

of FSIS who are present in all these plants throughout the county. 

Additionally, FSIS administers a labeling program to protect consumers from misbranded and economically adulterated meat, poultry, and processed egg products. We are modernizing the way we 

do things, and carcass-by-carcass inspection remains a cornerstone 

of our work. Our system of inspection is the most reliable in the 

world, and I take great pride in the inspection process after having 

begun my own career nearly 40 years ago as a line inspector in 

Dalhart, Texas. 

Today, billions of pounds of meat, poultry, and liquid egg products are produced, transported and sold every year. A system of 

this magnitude requires constant vigilance to prevent the possibility of foodborne contamination. FSIS is legally required to have 

inspectors present across the country in every plant that processes 

meat, poultry, and processed egg products. The agency employs approximately 9,000 employees, and 80 percent of them work in establishments across the nation. FSIS cooperates with 27 states to 

develop and administer state meat and poultry inspection programs that implement food safety requirements that are at least 

equal to Federal requirements at over 1,600 small and very small 

establishments. 

During Fiscal Year 2014, FSIS personnel inspected almost 150 

billion head of livestock, nine billion poultry carcasses, and over 3 

billion pounds of processed egg products. Last year, FSIS conducted 

nearly seven million food safety and defense procedures. Some 

highlights of our achievements this year include the implementation of our new poultry inspection system, which will prevent an 

estimated 5,000 illnesses each year. We also launched stronger performance measures to reduce pathogens like Salmonella and 

Campylobacter in poultry products, which could prevent an estimated 50,000 illnesses annually. In addition, we announced a best 

practices guidance for controlling Listeria monocytogenes in retail 

delis to help prevent cross contamination in deli counters. 

We spend much of our time educating the millions of Americans 

who consume our products every single day. Over the past year, we 

have partnered with the Ad Council on public service announcements, conducted outreach to at-risk and under-served populations, 

and developed our own Smart Phone application, the FoodKeeper 

App, in conjunction with Cornell University and the Food Marketing Institute. As we move forward, our focus on modernization 

also has us looking at ways to modernize pork and beef slaughter. 

Our focus on science will increase our use of whole-genome sequencing, sampling, and the use of new performance standards to 

address Salmonella in chicken parts and comminuted poultry. We 

are closely coordinating with other Federal agencies, like the Food 

and Drug Administration and the Centers for Disease Control to 

144 

discover sources of illnesses more quickly and to respond more effectively during recalls and outbreaks. 

In Fiscal Year 2015, we developed harmonized attribution estimates for Salmonella, E. coli O157:H7, Listeria monocytogenes, and 

Campylobacter for major food categories. 

Improved estimates of foodborne illness source attribution can inform efforts to prioritize food safety initiatives, interventions, and 

policies for reducing illness outbreaks. These types of collaborative 

efforts help FSIS work with our partner agencies to ensure that 

food safety is better informed, better targeted, and more effective. 

As a public health agency committed to achieving excellence, FSIS 

continuously tracks performance, modernizes methodology, and applies science-based approaches to the work that we do. 

I began my career at FSIS as a line inspector, and I know firsthand the hard work that these dedicated men and women perform 

every day to ensure that we have the safest food supply in the 

world. It is because of this work that millions of Americans can sit 

down at their table and enjoy safe, wholesome meals every day. 

Thank you for your support, and I hope you will soon join me in 

a plant tour to see what FSIS is doing to protect the American food 

supply. Thank you. 

[The prepared statement of Mr. Almanza follows:] 

PREPARED STATEMENT OF ALFRED V. ALMANZA, DEPUTY UNDER SECRETARY, FOOD

SAFETY, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Introduction 

Mr. Chairman, Ranking Member Peterson, and Members of the Committee, my 

name is Al Almanza, Deputy Under Secretary for Food Safety at the U.S. Department of Agriculture (USDA). Thank you for the opportunity to come before you 

today to discuss the Food Safety and Inspection Service, our mission, and our people. 

Who We Are 

FSIS is the public health agency in the U.S. Department of Agriculture (USDA) 

responsible for ensuring that the nation’s commercial supply of meat, poultry, and 

processed egg products, whether domestic or imported, is safe, wholesome, and correctly labeled and packaged. FSIS inspection personnel inspect each and every livestock and poultry carcass before it can enter commerce, and Agency inspectors inspect every processing plant at least once per shift. No meat or poultry product can 

enter commerce unless we can find that it is not adulterated and apply our mark 

of inspection. In addition, FSIS approves the labels of meat, poultry, and egg products and ensures that they are truthful, not misleading, and contain the requisite 

information. We also take action should misbranded or economically adulterated 

products manage to enter commerce. 

After publication in 1906 of Upton Sinclair’s The Jungle, which described in detail 

the unsanitary working conditions in a Chicago meatpacking house, Congress 

passed legislation providing for the inspection of meat. Ultimately, this legislation 

became the Federal Meat Inspection Act (FMIA). Subsequently, Congress passed the 

Poultry Products Inspection Act (PPIA), the Humane Methods of Slaughter Act 

(HMSA), and the Egg Products Inspection Act, all of which the Food Safety and Inspection Service (FSIS) enforces. 

What We Do 

As stated above, FSIS is mandated to have inspectors present in virtually every 

meat, poultry, and processed egg products plant in the country. To meet this obligation, as of September 30, 2014, the Agency employed 8,676 permanent full-time employees, including 625 in the Washington, D.C. area, and 8,051 in the field. These 

employees work in approximately 6,426 federally regulated establishments, three 

FSIS laboratories, 127 ports-of-entry, and 150,000 in-commerce facilities nationwide. 

During FY 2014, FSIS personnel inspected about 148 million head of livestock, nine 

billion poultry carcasses, and about 3.2 billion pounds of processed egg products. In 

145 

FY 2014, FSIS conducted 6.84 million food safety and defense procedures and condemned over 465 million pounds of poultry and more than 205,000 head of livestock 

during postmortem (post-slaughter) inspection. 

Federal Inspection of Exports and Imports 

FSIS regulates all imported meat, poultry, and processed egg products intended 

for use as human food. Before FSIS-regulated products can enter the country, the 

Agency determines whether the food safety regulatory system of any country that 

wishes to export to the U.S. is equivalent to that of the U.S. Once FSIS finds a foreign country’s system for meat, poultry, or egg products to be equivalent, FSIS inspects eligible products from that country at U.S. ports-of-entry. 

The Agency evaluates an exporting country’s food safety system on an ongoing 

basis. Each year, FSIS reviews any changes in the foreign country’s food safety system. In addition, FSIS may conduct an in-country audit of the system and will review the country’s performance in port-of-entry inspections. Based on these reviews, 

the Agency decides whether the country is maintaining equivalence, or whether additional action by FSIS is warranted. This performance-based approach allows FSIS 

to direct its resources to foreign food regulatory systems that potentially pose a risk 

to public health and makes its international program more consistent with its domestic inspection system. Finally, it improves the linkage between port-of-entry reinspection and on-site audits. 

State Inspection 

FSIS also assesses the safety of state-inspected meat and poultry products 

through agreements with State Departments of Agriculture. FSIS works with 27 

states to develop and administer state meat and poultry inspection (MPI) programs 

that implement food safety requirements that are ‘‘at least equal to’’ Federal requirements at more than 1,600 small and very small establishments. These establishments can only ship or sell products within their respective states. State MPI 

programs must ensure that livestock are treated humanely by imposing humane 

handling requirements that are ‘‘at least equal to’’ those FSIS has established under 

the Humane Methods of Slaughter Act of 1978. 

In 2014, FSIS completed comprehensive reviews of the meat or poultry inspections 

programs of Kansas, Missouri, Minnesota, North Dakota, Wisconsin, and Wyoming. 

The Agency also obtained self-assessment reviews of the other 21 MPI programs. 

FSIS also cooperates with four states—Ohio, North Dakota, Wisconsin, and Indiana—to operate a fairly new interstate shipment program, as provided for in the 

2008 Farm Bill. This approach eliminates barriers and allows small state-inspected 

businesses to expand their customer base and explore new markets, by making 

these establishments eligible to ship meat and poultry products in interstate commerce. 

Assistance to Small Plants 

With more than 90 percent of the 6,000 FSIS inspected plants considered small 

or very small operations, FSIS has a Small Plant Help Desk that serves to assist 

plant owners and operators with questions. Many of these questions involve technical expertise, information, and providing advice on FSIS regulations and policies. 

During FY 2014, the Small Plant Help Desk received and responded to 2,042 inquiries in person, over the phone, and via e-mail. In addition, FSIS publishes Compliance Guides that help small plants comply with new or modified FSIS regulations. 

Strategic Planning for Accountability 

Every 5 years, FSIS adopts a new Strategic Plan that sets out the Agency’s goals 

and initiatives. The FSIS Strategic Plan is the foundation for both the long range 

and day-to-day operations of the Agency. 

A main driver of the Strategic Plan is the desire for the Agency to continue to 

be an ever more trusted and successful public health agency—an Agency that 

adapts to the changing nature of food safety risks. Outlined in the Agency’s current 

strategic plan are three themes and eight goals within those themes. The themes 

are ‘‘Prevent Foodborne Illness,’’ ‘‘Understand and Influence the Farm-to-Table Continuum,’’ and ‘‘Empower People and Strengthen Infrastructure.’’ 

Each year, FSIS also develops an Annual Performance Plan that sets out three 

or four key results that each of the Agency’s ten offices intends to accomplish to advance the Strategic Plan. At the end of each year, we publish a report that sets out 

how well we did in achieving key results. 

We are now operating under our third Annual Performance Plan (APP) under the 

FY 2011–2016 Strategic Plan, and we have already begun drafting the Strategic 

Plan for FY 2017–2021. The APP provides the American public and FSIS employees 

with a clear list of Agency priorities and a detailed roadmap of the steps we intend 

146 

to take to achieve our goals. It provides an operational plan that we are following 

in order to steer the Agency as we work to prevent foodborne illness and protect 

public health. It is traceable and transparent, so that we can be accountable to the 

Congress and the American public. 

A major theme of our current Strategic Plan is Cultural Transformation. Cultural 

Transformation is a commitment to work in collaboration with USDA on civil rights 

and equal employment opportunities (EEO), embrace a respectful and diverse workforce, and strive for a highly effective, collaborative work environment. FSIS fosters 

an inclusive workforce by recruiting and hiring skilled applicants that reflect America’s diversity. FSIS eliminates barriers to equal employment and allows employees 

to advance based on merit. 

Managers and supervisors lead by example to ensure that the work environment 

is free from discrimination, hostility, intimidation, reprisal, and harassment. 

In developing the 2017–2021 Plan, we are involving not only our headquarters 

leadership but employees in a range of positions across the Agency. In addition, we 

have consulted with external stakeholders so that we have broad input to guide our 

progress forward. 

Modernization 

A key theme for FSIS is modernization. Inspection changed from a sight, smell, 

and touch approach to a more science-based method when FSIS implemented its 

Hazard Analysis and Critical Control Points (HACCP) regulations between January 

1997 and January 2000. Our inspection is supported by sampling programs such as 

testing ready-to-eat meat and poultry products for Listeria monocytogenes, testing 

for Salmonella and Campylobacter in raw poultry, and testing for seven serogroups 

of pathogenic E. coli (including E. coli O157:H7) in non-intact raw beef, and by performance standards to assess how well plants are controlling these hazards. 

FSIS also has recently adopted its New Poultry Inspection System regulations, 

which focuses the efforts of FSIS inspection personnel on food safety much more 

than has previously been the case. FSIS is also considering changes to how it does 

inspection in hog and cattle slaughter plants. 

Consumer Outreach 

To keep the public safe, we spend much of our time conducting outreach and educational awareness efforts to the millions of Americans who consume our products 

every single day. 

Just as FSIS is focusing on modernizing our inspection techniques, we also are 

modernizing the way we communicate with our consumers. We recently celebrated 

the 30 year anniversary of the USDA’s Meat and Poultry Hotline, which enables 

consumers to ask questions or report incidents of foodborne illness. The Hotline receives more than 80,000 calls each year and helps prevent foodborne illness by answering questions about the safe storage, handling and preparation of meat, poultry, 

and processed egg products. 

The Food Safety Education Staff (FSES) has had some great successes in consumer food safety outreach throughout FY 2015 thus far. Some of these initiatives 

include: partnering with the Ad Council, partnerships for reaching at-risk groups, 

Hispanic outreach, social media, and our new smartphone application, the 

Foodkeeper App. 

FY 2014–2015 Accomplishments 

As I stated previously, FSIS’s main goal is to protect the public health and reduce 

foodborne illness. Thus, it is a significant indication of our success that the All-Illness Measure that we have created, which combines the number of illnesses attributable to meat, poultry, or egg products caused by Salmonella, E. coli O157:H7, and 

Listeria, showed a reduction of about 41,000 estimated illnesses between FY 2013 

and FY 2014, from 427,171 in FY 2013 to 386,265 in FY 2014. Further, in FY 2014, 

FSIS ‘‘met’’ or ‘‘exceeded’’ 81 percent of our annual performance measures. 

Our successes have continued in FY 2015. Here are just a few of our accomplishments: 

• Began the implementation of the New Poultry Inspection System after the release of the final rule; 

• Asked for public comment on performance measures to reduce Salmonella and 

Campylobacter in chicken parts and comminuted poultry. These new standards 

could help prevent an estimated 50,000 illnesses annually; 

• Issued a best practices guideline for retailers to help them to protect public 

health by decreasing the potential for Listeria monocytogenes contamination; 

147 

• Completed an economic analysis for expanding the testing for non-O157 STEC 

in ground beef and components other than trim; 

• Continued to implement the Public Health Information System (PHIS) by increasing plant connectivity and enhancing information sharing capabilities, thus 

aligning our efforts to modernize food safety through technological enhancements; 

• Strengthened humane handling in plants; 

• Developed new in-plant activities, such as the new Food Safety Assessment 

(FSA) methodology; 

• Issued a proposed rule on non-ambulatory disabled veal calves, which, if adopted, would require that veal calves that are unable to rise at the time of antemortem inspection be euthanized. Under the proposed rule, all non-ambulatory 

disabled veal calves that are brought to slaughter will be promptly and humanely euthanized, and prohibited from entering the food supply; and 

• Finalized the proposed mechanically tenderized beef rule that makes it easier 

for consumers to understand what they are buying at supermarkets, and what 

steps they must take in the kitchen to keep their families safe. 

Looking Forward 

As we move forward, our focus on modernization also has us looking at ways to 

modernize inspection, improve our web-based Public Health Inspection System 

(PHIS), improve our system for ensuring the safety of imports, and improve the 

traceability of products as they move to the consumer. As mandated by Congress, 

FSIS is responsible for the regulation of Siluriformes and Siluriformes products. As 

soon as the rule is final, we will begin taking steps to implement this inspection 

program. Our focus on science will increase our use of whole-genome sequencing, increased sampling, and the use of new performance standards to address Salmonella 

in chicken parts and comminuted poultry. We will be ensuring that plants properly 

validate their HACCP plans, and we intend to improve how our inspection personnel verify how sanitary dressing is done, to minimize the possibility that contamination will occur during the slaughter process. With regard to illness investigations, we are also coordinating closely with other Federal agencies, like the FDA and 

the CDC. Increased communication with our partner agencies makes FSIS more effective and improves our responses during recalls and outbreaks. In 2011, we created the Interagency Food Safety Analytics Collaboration (IFSAC), which brings together senior leaders and technical experts on food safety attribution from CDC, 

FDA, and FSIS to improve coordination of Federal food safety analytic efforts and 

address cross-cutting priorities for food safety data collection, analysis and use. 

In FY 2015, one of IFSAC’s major successes was developing harmonized attribution estimates for Salmonella, E. coli O157, Listeria monocytogenes, and 

Campylobacter for major food categories and hosting a public meeting, with over 200 

people in attendance in-person and online, to share those findings. 

These improved estimates of foodborne illness source attribution can inform efforts to prioritize food safety initiatives, interventions, and policies for reducing 

foodborne illnesses. These types of collaborative efforts help FSIS work with our 

partner agencies to ensure that food safety is better informed, better targeted, and 

more effective. 

Conclusion 

These are some of the ways we are holding ourselves accountable for achieving 

positive results and outcomes on critical food safety issues. We continuously track 

performance, modernize, and apply science in developing our approach to the problems we face. 

I began my career at FSIS as a line inspector. I know first-hand the hard work 

that the dedicated men and women who make up FSIS’s inspection force perform 

every day to ensure that we have the safest food supply in the world. It is because 

of this work that millions of Americans can sit down at the table and enjoy safe, 

wholesome meals each day. Thank you for your support for our vital work as a public health agency. 

The CHAIRMAN. Thank you, gentlemen. I appreciate both of your 

testimonies. Mr. Avalos, I was privileged to see your feral swine 

program at work in central Texas. We had a great example of the 

state agency and your agency working together to provide that 

service. And we had landowners who were the beneficiaries of having the feral swine taken care of. Obviously, you have some landVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00151 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
148 

owners in central Texas who provide hunting opportunities, but 

you also have other landowners that the feral swine is a nuisance 

and a pest and a predator, so I appreciate the good work that you 

are doing there. Mr. Almanza, thank you also for your tour at the 

packing plant in San Angelo, and the work that went in that day 

to get you down there and have you join me with the good work 

there. You let me actually see your inspectors doing their job. I 

don’t think you had set up the carcasses to go through at the appropriate place so there wouldn’t be anything wrong; but your guys 

looked like they were taking care of business. 

Recently, we had a Consumer Reports article out that ground 

beef contains harmful bacteria, and that 18 percent contains bacteria resistant to more than three classes of antibiotics. The report 

claimed that the numbers are far less if they are from a sustainable beef, whatever that means. Could you give me your take on 

that consumer report and what it means to consumers? 

Mr. ALMANZA. Yes, sir. The recent Consumer Reports study was 

what I would say an unfortunate article that serves to scare consumers. The most deadly pathogens that FSIS routinely tests for 

were not found in the report sampling. Rather, the study focused 

on generic bacteria. The Consumer Reports article confirmed that 

there were no Shiga toxin producing E. coli STECs present in the 

ground beef samples; and so these STEC strains have been declared adulterants by FSIS because they can cause severe illness. 

So we believe that the article overlooks many requirements and 

achievements that FSIS and USDA inspection and testing programs for meat products right now. 

The CHAIRMAN. I appreciate that. Mr. Avalos, you mentioned significant budget cuts to your team. Can you help the Committee understand what the impact has been on your ability to do what you 

are doing? 

Mr. AVALOS. Mr. Chairman, most of the cuts that were made to 

my mission area were at APHIS. And what we did was to look for 

ways to do as much work, in many cases, more work, with less 

money; and we looked for efficiencies, and Administrator Shea and 

his team did a really good job in finding ways to be more efficient 

and do the same job, in many cases more work with less money. 

So I am going to ask Administrator Kevin Shea to expand on my 

response. 

Mr. SHEA. Thank you, Mr. Under Secretary. We did several 

things. As Mr. Avalos said, first, we looked for efficiencies. Second, 

we looked for programs that were no longer as effective or we could 

not be as effective at as we would like to be. For example, we were 

spending a lot of money or the Emerald Ash Borer, a significant 

forest pest, but we simply lacked the tools to have great success 

against it; so we reduced spending in that kind of program. 

The most damaging thing was we did have to leave over 800 positions unfilled, so we lost over ten percent of our workforce; and 

that does mean that it is more difficult for us to respond quickly 

when we have a new pest or disease outbreak. It means it is more 

difficult for us to have full surveillance around the country so we 

can find these outbreaks faster, and simply, more difficult to carry 

out all of our activities. 

149 

But as Mr. Avalos said, people pitched in, did more, and the people who were left behind continue to work hard. 

The CHAIRMAN. Thank you for that. The first couple things you 

did, about finding efficiencies and looking for programs that may 

have outlived their usefulness, I wouldn’t call those damaging. I 

would say those are appropriate for every organization to go 

through. But helping policymakers understand the other side of 

that where you are having shortfalls that might affect health and 

safety would be helpful. So I appreciate your work. 

Mr. Peterson, for 4 minutes. 

Mr. PETERSON. Thank you, Mr. Chairman, and I thank the panel 

for being here. I have been to the plants and seen your people in 

action. You are right. They do a great job. I want to focus in the 

little bit of time I have on this avian influenza which hit my district more than anyplace in the U.S. First of all, I might say 

APHIS, by and large, did a pretty good job given what we were 

dealing with, but there were problems, and I am sure you know 

that, in the process. 

So now, one of the things I am hearing from my egg layers is 

that you have been responsive to some of these requests on the 

changes in the indemnification formula, but there are still some 

unanswered questions about what goes into the formula. I just met 

with some of them yesterday. Is USDA going to release that formula so that everyone is on the same page about what it covers 

and what it doesn’t? Is that going to be released so we can see it? 

Mr. Shea? 

Mr. SHEA. Absolutely, Mr. Peterson. We will be happy to post on 

our website and release anything that has to do with any of the 

formulas—— 

Mr. PETERSON. That hasn’t been done yet, or haven’t you finalized it? 

Mr. SHEA. Well, I would say this: We do adjust the indemnity 

formula as market conditions change, because the indemnity intends to pay fair market value. Fair market value can change, but 

the basic formula remains pretty much the same. And to the extent 

that is not well known, we will make it better. 

Mr. PETERSON. Yes. And then the part of it that has to do with 

paying for the depopulation and cleaning and all of that stuff, there 

are some issues with that. And it seems like that is kind of a moving target. Has that been finalized, or is that still a work in 

progress? 

Mr. SHEA. That is still somewhat a work in progress. We appreciate what people are saying. What we want to do is move toward 

a standard formula for compensation for cleaning and disinfection. 

Mr. PETERSON. What I am hearing is there a lot of bureaucracy 

as there was in this current situation, people wanting to go to some 

sort of simplified method, where it is maybe so much a square foot, 

so much a bird or something and then to have people being able 

to compete for that business, and maybe letting the people themselves do the work as opposed to bringing in all these contractors, 

which might have spread the disease. Are you working on that? 

Mr. SHEA. Absolutely. We think that is a great idea, and we 

want to move toward that kind of formula. Indeed, in many cases, 

the owners themselves are in the best shape to do the work, and, 

150 

additionally, it helps keeps their workers employed, who otherwise 

may not continue being employed, and also local folks. 

Mr. PETERSON. Where are you in that process? Are you anyplace 

to be able to come out and start talking about that or putting out 

information on how you are going to do this? 

Mr. SHEA. We are not quite there yet because we want to make 

sure that we have tabulated what all the costs were so far this 

year, so we can get this formula correct. As I mentioned earlier, 

there are kind of two different formulas here, one for indemnity for 

the birds themselves and then one for this work. And this is the 

work that we still need a little bit more information to complete, 

but it is coming very, very soon. 

Mr. PETERSON. We are going to probably ask you to come up and 

talk to us about some questions that have been raised there. One 

last thing. On the depopulation, I appreciate your goal of 24 hours. 

I think the sooner you can depopulate, the sooner you stop the 

virus. As soon as the birds are dead, as I understood it the virus 

does not continue. I think in turkeys it is one thing, but when you 

get into these layer operations, I don’t know how in the world you 

are going to kill or depopulate those in 24 hours, unless you shut 

off the ventilation, which has not been supported, and I guess the 

AVMA doesn’t support it. So where is that whole process at? 

Mr. SHEA. If, indeed, we see another large outbreak like we did, 

and, of course, we hope we don’t, but if we do, we are going to have 

to look at all the tools available and make those decisions at the 

time. But everything needs to be on the table, but we still need to 

look through all the possibilities. 

Mr. PETERSON. So you haven’t made any—everything will be 

open then as you go forward? 

Mr. SHEA. I think we will be reaching very final decisions very, 

very shortly. Literally in a matter of days as opposed to weeks, we 

hope to have the final touches on our fall planning that will address all the various depopulation options. 

Mr. PETERSON. Thank you, and, again, thanks to the USDA. You 

guys have really stepped up to the plate, and our people appreciate 

it. 

The CHAIRMAN. The gentleman’s time has expired. I recognize 

Mr. Neugebauer, for 4 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. Mr. Shea, last fall, 

27 Members of the Texas Congressional Delegation wrote to GAO 

expressing concern about the transparency of APHIS’ site reviews 

in their decision to allow fresh meat from the regions of north Argentina and Brazil with historical risk for foot-and-mouth disease 

that had been recognized. Specifically, we asked the GAO to open 

a review of the methodology and the management controls used 

when APHIS conducted their site visits to determine animal health 

information. And thankfully, the GAO agreed to do that. I wondered if you could kind of give us an update on the progress that 

has been made in the GAO review? 

Mr. SHEA. Mr. Congressman, I am not aware that the GAO has 

directly contacted us yet to start the specifics of the review, but we 

are certainly very prepared and happy to cooperate with them as 

soon as they do. 

151 

Mr. NEUGEBAUER. Can you kind of walk us through the process 

of why this review is in question, because a lot of people were concerned about where we had a presence of foot-and-mouth disease 

in that region, that the decision was made to allow us to import 

that. 

Mr. SHEA. I understand why there is a lot of concern. Foot-andmouth disease, of course, is probably the biggest concern for livestock industry in the United States; and, indeed, there have been 

cases of foot-and-mouth disease in Brazil and Argentina in the 

past, but there haven’t been any since 2006, and we did several site 

visits. We reviewed all the literature. We looked at their veterinary 

infrastructure, and proposed a rule that would be just like the one 

we have applied to Uruguay, which would require that there be inspection before and after slaughter, that the animals be deboned, 

and that the lymph nodes be removed, and that the pH level is 

moved to a level where foot-and-mouth disease can’t exist. 

These are the same kind of mitigations that the European Union 

uses, the same ones that OIE uses, and they have not found any 

movement of foot-and-mouth disease from countries where they 

apply these mitigations. 

But all that said, I understand the concerns because foot-andmouth disease is, indeed, our number one livestock concern, so I 

can understand why people wanted to know more about it, and, 

again, we certainly welcome GAO to look at it. 

Mr. NEUGEBAUER. So you have not been contacted by GAO about 

beginning this process? 

Mr. SHEA. I am not aware that we have been, no. 

Mr. NEUGEBAUER. Can you double check with your folks and get 

back to us on that? 

Mr. SHEA. I will be very happy to do that. 

Mr. NEUGEBAUER [presiding.] I will yield back my time and now 

recognize the gentleman from Virginia, Mr. Goodlatte, for 4 minutes. 

Mr. GOODLATTE. Thank you, Mr. Chairman, and I want to welcome this panel as well. Under Secretary Avalos, as USDA marketing orders fall under your authority, I am sure you are aware 

how very different our dairy and specialty crop markets are today 

than they were in 1937 when the Agricultural Marketing Agreement Act was passed. As evidenced by the recent Horne case in 

which the Supreme Court ruled against USDA and aspects of the 

Raisin Marketing Order, farmers are increasingly doubtful about 

the utility of these antiquated programs. 

I am sure that marketing orders will gain even more scrutiny 

now that the USDA is in the midst of considering California’s bid 

for a Federal Milk Marketing Order. Therefore, considering that 

the California dairy industry represents 20 percent of all U.S. milk 

production, it is obvious that California’s entry into the Federal 

system will deeply impact dairy markets nationwide. Can you give 

us a summary of the impact of such an Order on the rest of the 

country, and have you taken steps to analyze the impact of everyday consumers? 

Mr. AVALOS. Congressman, I am very much aware of the proposal, the request for marketing order from California. There is another marketing order that we are working on at this time, that 

152 

is a U.S. Pecan Marketing Order. We received a proposal last 

month. So anyway, marketing orders are still ongoing, two marketing orders in progress right now to create a marketing order. As 

far as implications from the Horne case, I am going to ask our Administrator Alonzo to answer your question. 

Ms. ALONZO. Good morning, Mr. Congressman. Yes, in June, the 

U.S. Supreme Court decided against USDA in the Horne case, regarding personal property, taking without just compensation. But 

we believe that the Supreme Court’s decision in Horne addresses 

a very narrow situation where under the Raisin Marketing Order, 

the government, through an administrative committee, takes title 

to a crop held in reserve and may physically appropriate that crop. 

The decision, we believe, does not address other types of volume 

controls or reserve programs. There is no other administrative committee currently, physically appropriating or taking title to the agricultural product, so we believe that this is a very narrow reading, 

and it is applicable to this case and not to other marketing orders. 

Mr. GOODLATTE. And would one of you answer my question, 

which was, can you give us a summary of the impact that such an 

Order, meaning the California Dairy Marketing Order, will have on 

the rest of the country? And have you taken steps to analyze the 

impact on everyday consumers? 

Ms. ALONZO. Yes. California—in fact, next week, well, the 2014 

Farm Bill allowed California producers to request a Federal Milk 

Marketing Order. And next week, September 22, there is going to 

be a hearing in Clovis, California to consider the establishment of 

a California Federal Milk Marketing Order. The hearing is going 

to take a few weeks. We have received proposals, and we have economic analyses from some of those proposals; but the hearing that 

is expected to take several weeks is going to be very important and 

pertinent to our ability to go forward. And so we don’t have a concrete analysis, but based upon—— 

Mr. GOODLATTE. Let me interrupt you because my time is expiring. Mr. Chairman, if I might ask one more question as follow-up. 

After the Supreme Court issued the Horne decision, the USDA 

amended general regulations for Federal fruit, vegetable, and specialty crop marketing agreements and marketing orders to accentuate that antitrust laws do apply to these marketing order programs. Could you explain why the Federal Milk Marketing Orders 

were not covered under this same final rule? 

Ms. ALONZO. Can we get back to you on that because I don’t 

quite think—— 

Mr. GOODLATTE. Pretty glaring if you change the marketing orders in several other areas, fruit, vegetable, specialty crops, but you 

don’t change it from milk, there has to be a reason why milk was 

left out. 

Ms. ALONZO. We haven’t completed the California. We are just 

going to a hearing. 

Mr. GOODLATTE. We are talking about something different than 

California now. We are talking about all Federal Milk Marketing 

Orders. 

Ms. ALONZO. Can we respond to you on the record later on about 

that? 

Mr. GOODLATTE. When will you be able to do that by? 

153 

Mr. AVALOS. We can do it today. 

Mr. GOODLATTE. That would be fine. 

Mr. NEUGEBAUER. I thank the gentleman. I want to apologize to 

the gentleman from Nebraska. I didn’t see him sitting down there 

in that hole position, and I skipped over him, and I apologize. You 

are now recognized for 4 minutes. 

Mr. ASHFORD. I am fairly low down here. Thank you, Mr. Vice 

Chairman. I just want to move a little bit away from where we are 

in the question and talk a little bit about what is important to us 

in Omaha, which is an urban area obviously. My district is urban, 

but we are in a very ag state. We had the conversation with Mr. 

Mitchell earlier, having been to Nebraska many times. 

Administrator Alonzo, you were there as well, and I want you to 

know, personally, how much I appreciate your efforts on the panel, 

what a significant event that was. We talked about the Know Your 

Farmer, Know Your Food Initiative. It is very important to our city 

that our population be, first of all, exposed to products from the 

farm obviously, both because it is good for the young people to understand their state, but most importantly, on the nutrition side. 

Where do you see this initiative going, and obviously the demand 

and interest in Omaha, Nebraska is significant. Could you just generally describe how you see this happening, being rolled out? 

Where it is going? 

Ms. ALONZO. Sure. And congratulations to you, Congressman 

Ashford, for your leadership in putting together that conference, 

which was probably the first of its kind. Many of our agencies at 

USDA participated, NRCS, the FSA, RD, and AMS; and so we 

thought it was so well attended and so well done and really underscoring just how important this sector is and how it is growing. According to industry estimates in 2014, local food sales topped $11.7 

billion. People, as you know, and this was discussed during the conference, want to know where their food is coming from. They want 

to know their farmers. They want to keep money in their local communities. They want to create jobs and access to healthy foods, and 

in the case of Omaha, how do you bridge the rural and urban communities? 

And at the Department, and as we mentioned at the conference 

that day, Secretary Vilsack from the Department is very aware of 

this interest and its growing dynamic. We identified this area as 

one of the four pillars of the work that we are doing to revitalize 

the rural economy. You mentioned the Know Your Farmer, Know 

Your Food Initiative, and that is the coordinating tool that we use 

at the Department by which we all work at. 

And in the past 6 years, in fact, under this initiative, we have 

invested more than $800 million in more than 29,100 local businesses in the last 6 years as mentioned. I think where we are going 

is that we are trying to be even more responsive to the needs of 

the marketplace. We recently had the Farmers’ Market Week, and 

throughout the nation, many states were celebrating Farmers’ Market Week. We have about 8,500 farmers’ markets now in the U.S., 

and it continues to grow. There is also other business models that 

are opening up, community-supported agriculture, food hubs, and 

so we are going to continue within our auspices to support this. My 

agency is part of the Know Your Farmer, Know Your Food group, 

154 

and what we do is primarily in the area of technical assistance. 

Last year, we fielded something like 2,000 calls and requests for 

help. We also, via the farm bill, were supported with many grants, 

several grants, one of them called the Farmers’ Market and Local 

Food Promotion Program, of which I know many of Members here, 

their constituents have taken advantage of. 

Also the specialty crop block grants also focusing a lot on local 

and regional foods, and these are block grants to the states that 

the State Departments of Agriculture work with. We just announced this week, or last week, a multi-state project across states, 

$3 million; and these are competitive grants, the State Departments of Agriculture to work on a lot of these issues in terms of 

local. 

We are also doing all that we can to put resources together. A 

lot of folks don’t know where to go for their farmers’ market or 

their food hubs, so we have direct—— 

Mr. ASHFORD. I think my time has expired. 

Ms. ALONZO. I get very passionate. 

Mr. ASHFORD. No. Just, also thank Eleanor Starmer as well for 

coming out. Thank you, Mr. Vice Chairman. 

Mr. NEUGEBAUER. I thank the gentleman, and now the gentleman from Georgia, Mr. Scott, is recognized for 4 minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman, and 

ma’am and gentlemen, thank you for being here today. Mr. Peterson asked about the potential for insurance for poultry growers. I, 

too, am concerned about the growers of poultry, so that is a bipartisan issue and I look forward to a review of those answers. I want 

to ask about something that has been brought up before, the pecan 

order. We have a tremendous number of pecan growers in my area. 

When I had cows, I paid a dollar every time we sold one into the 

beef industry and certainly thought that was money well spent as 

a cattleman. And I understand the hearings are complete on the 

Pecan Marketing Order, and what is the status of the proposal for 

pecans, and when do you estimate we will see the next action on 

this issue? 

Mr. AVALOS. Congressman, being from New Mexico, also a major 

pecan-producing state, and having so many friends in the pecan industry, not only New Mexico, but in Texas, and now, I have quite 

a few friends in your State of Georgia, it is absolutely amazing that 

we took these growers, who at one time actually didn’t get along, 

seeing them work together, seeing them work towards a marketing 

order for the benefit of the U.S. pecan industry, not for Georgia, 

not for New Mexico, not for Texas, but for the U.S. pecan industry, 

is absolutely incredible. 

So anyway, three hearings were held, one in New Mexico, one in 

Texas, and one in Georgia. Tremendous attendance; received tremendous input from the industry. So now we are in the assessment 

stage, and I am not sure what the next steps are exactly, but I am 

going to ask Administrator Anne Alonzo to expand, but I just wanted to emphasize that if this marketing order, if it is voted on and 

goes through, will be a landmark accomplishment for the pecan industry, and it is all about obtaining market share and staying on 

top of the nut industry in the world. 

So I will turn it over to Ms. Alonzo. 

155 

Ms. ALONZO. Thank you, Under Secretary. Yes, a proposal was 

submitted on behalf of the pecan industry by the American Pecan 

Board, and so as mentioned, we had three hearings this summer; 

and the next steps, that based on the hearing record, and the briefs 

that we have received, we are going to move forward in the formal 

rulemaking process, which includes a recommended decision, a 

public comment period, a Secretary’s decision, a grower referendum, and a handler sign-up. And so those are the next steps 

in the process for the Pecan Marketing Order. 

Mr. AUSTIN SCOTT of Georgia. Thank you for that. I know one 

other thing that would very much help that industry is if we were 

able to get the trade barriers with India removed. Certainly a tremendous market there, and anything that the people in your agency can do to help in removing those trade barriers, I would certainly appreciate. 

With that, Mr. Chairman. I will yield back the remaining 35 seconds. 

The CHAIRMAN [presiding.] The gentleman yields back. Mr. 

Crawford, 4 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. Thank you Secretaries and Administrators. Mr. Shea, from what I understand, 

APHIS is coming close to finalizing an SPS agreement with China 

for the import of U.S. rice. Throughout the process there have been 

some hang-ups on protocols like trapping, labeling, and segregation 

and varieties, but it seems like these issues have slowly been resolved. Can you give us an update on how this process is moving 

along and shed some light on how China is generally, when it 

comes to adhering to SPS protocols? I know they have a tendency 

to kind of move the goal posts, and I just want to get your assessment. 

Mr. SHEA. Congressman, as you said we are very, very close. I 

think we have been working with them and they have been working with us in good faith on this particular issue. And we are very 

close. We had hoped to have been there already, but we are not. 

Things move slowly in negotiations with the Chinese as always, 

but we think we are very, very close to an agreement, but not quite 

there yet. 

Mr. CRAWFORD. Thank you. Mr. Almanza, we met with Ambassador Froman last week to discuss the status of TPP negotiations, 

and I asked him why USTR has been intervening with OMB to 

hold up on issuing the final catfish inspection program rules. His 

response was that they were worried about making sure the rules 

are consistent with WTO protocols, and they want to make sure it 

is implemented without any objections from our trading partners, 

but what is confusing to me in this whole debate is don’t these new 

rules follow the same equivalency standards as we have for chicken, livestock, and poultry in general? So why would a system we 

have had in place for decades cause a trade dispute? 

Mr. ALMANZA. I would say it is because we have never inspected 

catfish, so that is probably a nuance there, but, yes, the equivalence process for other countries remains the same as with any 

other products that are imported through FSIS. 

156 

Mr. CRAWFORD. Did Ambassador Froman or staff at FSIS work 

with you during the development of the catfish inspection program 

so you could arrive at a product that is acceptable to everyone? 

Mr. ALMANZA. Yes. 

Mr. CRAWFORD. And if so, I don’t understand what the concerns 

are on the back end. 

Mr. ALMANZA. There are a number of issues that we have gone 

back and forth with them on, which is typical for a proposed rule, 

and this one, like I said, has a little bit of an added nuance in that 

it is going to be a totally different type of inspection protocol than 

we have ever had for catfish; and so meat, poultry, processed eggs, 

and catfish, catfish is just a different species that we have never 

done, and that is part of it. 

Mr. CRAWFORD. Okay. Early on, I—I am going to shift gears a 

little bit here—I supported original, proposed new poultry inspection system rules which changed the role of food safety inspectors 

and increased line speeds. We have a few pilot plants in my district, and poultry companies there reported tremendous success on 

all fronts. I was disappointed when the rules were finalized that 

only food safety protocols were changed while the line speeds were 

not permitted. 

So a couple of problems there, incentive for plans to move the 

new inspection models impaired because they don’t have the opportunity to increase production speeds; and if the incentive isn’t 

there, we are not making important steps toward improved food 

safety. It seems like a lose-lose. Can you report to the Committee 

in terms of how many plants have begun participating in the new 

model, and do you see any way to get back to the original proposed 

line speed? 

Mr. ALMANZA. So we currently have 49 plants that have expressed an interest to opt in, which includes the original 20 that 

we had under what was a HIMP models project. So those plants 

are able to maintain the line speed which we thought was going 

to go along with this rule at 175 birds per minute. But what we 

are looking at is the food safety value, and to me right now, companies, for the first time, we are having them address Salmonella and 

Campylobacter control and required to do their own testing, which 

we hadn’t done before. So that is a public health food safety advantage. 

The other side of it, we believe, that with time, we will see what 

the plants that are opting in develop data as to how they are performing, and then we will look down at the future and see how that 

measures up to the plants that are running at 175 and see if there 

is any difference. 

Mr. CRAWFORD. Thank you. I yield back. 

The CHAIRMAN. The gentleman yields back. Mr. Yoho, for 5 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. I appreciate the panel 

being here. Mr. Shea, when you started off with talking about the 

decreased number of inspectors as dangerous in general, but especially in the face of an outbreak; and we in Florida with our Florida 

orange juice here—I hope this is not our last crop—with citrus 

greening and now with the Asian oriental fruit fly, I am sure you 

are aware of the damage it has done. 

157 

Adam Putnam, our Commissioner of Agriculture, has called a 

state of emergency for our state. And if that gets up in the Miami 

area, we are looking at a $1.6 billion economic impact, and we appreciate the research and work that you guys have done. Knowing 

that, and you had brought up about the foot-and-mouth disease, 

how they haven’t had an outbreak in South America since 2006, 

knowing the difficulty we have of exporting cattle that have been 

exposed to blue tongue, or the threat of BSE going into other countries and we know the economic impact and the danger that footand-mouth disease could have here in America with all cloven livestock, it is estimated to be between $150 to $250 billion is what 

I have heard, different estimates. 

When I look at the benefit of importing beef from any country 

that has had that or they are using a modified live vaccine, I would 

like to hear your thoughts on that. And then also another question 

is, and I want to commend the USDA and APHIS in the Plum Island Research for coming up with a leader list of foot-and-mouth 

disease vaccine. It is cutting edge technology. Being such a safe 

vaccine, will that be rolled over in production in the United States 

and have a provisional release on that where they can manufacture 

it here in the private-sector? 

Mr. SHEA. I will take the second part first. Our colleagues in the 

Agricultural Research Service did, indeed, come up with a new vaccine that we are now working with them on to see how it can be 

tested and whether or not it can be produced in the mainland in 

mass quantities. We are certainly not at that point yet. We can’t 

even bring a vaccine onto the mainland without special approval 

from the Secretary, so we are still working through that process; 

and indeed, foot-and-mouth disease, of course, is also a select 

agent, so we have to work through our select agent regulation. 

Mr. YOHO. How long have we been waiting on that approval? 

Mr. SHEA. We are just now getting to that point. So that has 

great promise, and you are absolutely right. We would be better off 

having more FMD vaccine available and more kinds available, and 

so we are certainly going to be working with our colleagues in ARS 

to pursue that. 

As to your first question about the beef from Argentina and 

Brazil, I understand that importing some beef from Brazil or Argentina might have limited impact, or limited benefit to the U.S., 

but we in APHIS see it somewhat differently. We need to do rules 

like this so we can have credibility going around the world to, as 

you say, get our beef into other countries. So if we want other countries to treat us the same way, we need to apply the same kinds 

of principles. 

Of course, we believe, with foot-and-mouth disease, it is a special 

threat. I understand that completely, and that is why before we 

would let beef in from Argentina or Brazil, the 14 states of Brazil, 

we have all those mitigations required that I mentioned earlier. So 

that is our thinking of why we think it is appropriate to do it while 

still understanding your very valid point. 

Mr. YOHO. I know the Administration is trying to allow that beef 

to come into this country, but before the rules and all the studies 

have been done, I would hope that APHIS would stand strong to 

protect the domestic beef population so we don’t have that threat. 

158 

I yield back. I am out of time. I look forward to talking to you down 

the road. 

The CHAIRMAN. The gentleman yields back. Mr. Rick Allen, 4 

minutes. 

Mr. ALLEN. Thank you, Mr. Chairman. I thank the panel for your 

testimony here this morning. And just thinking about the process, 

dealing with everything that you have to deal with, I know our 

state commissions, their budget is about a little north of $51 million, and particularly dealing with the avian flu and some other 

things, and realizing that we are all stretched budget-wise, has 

there been any attempt at overall collaboration? I know the states 

are sensitive to Federal intrusion, and I understand that as far as, 

particularly from a regulatory process. But it looks like when we 

have a situation, say in Iowa, in Minnesota, it looks like it ought 

to be kind of all hands on deck across the country, because eventually we are going to all possibly be affected by that. 

And I hear from our farmers’ and our producers often about the 

regulatory environment and kind of what the, okay, yes, and we 

appreciate your help very much, but there always seems to be a 

price to pay for that. 

Have you all thought about some overall, and I will ask both the 

Under Secretaries, any overall collaboration across the country 

when we have these events, whether it be foot-and-mouth disease 

or avian flu or whatever and say all hands on deck; we need to deal 

with this problem? 

Mr. AVALOS. Congressman, we actually have quite a bit of cooperation working together with our stakeholders throughout the 

country. For example, at APHIS, vet services, we have cooperative 

agreements for most of our diseases, for different pests, with the 

states, animal disease traceability. We implemented a national program where we have complete cooperation nationwide with the 

states, and a lot of the funding that the states receive, they received from USDA. 

So some of this is already ongoing. I understand what you are 

saying absolutely because I know that state budgets are tight, and 

when a major outbreak like, in this case, high-path avian influenza; in other cases we had Asian long-horned beetle; we had European grapevine moth, and we can go on and on. So we do look for 

ways to be more efficient, look for ways to work with our stakeholders across the country. 

Another example, we mentioned the feral swine program. We received money from Congress, Federal money, but it is not 100 percent Federal program. Every state is a stakeholder, and every state 

puts money into this, and the private-sector puts money into this, 

so some of this is ongoing. 

Mr. ALLEN. Right. Certainly it is a big country. We have tremendous resources. Obviously, the poultry industry is the largest industry. I mean, Georgia is number one in that industry. We have 

tremendous. We have a poultry research center there at the University of Georgia. And I would think across this nation, including 

USDA, we would have the resources available to deal with these 

matters, even when you are, as you say, stretched. I certainly think 

that collaboration in all instances is very important. I would also 

159 

like a quick update on the, Administrator Shea, on the various aspects of the high-path avian influenza. 

The CHAIRMAN. Mr. Allen. 

Mr. ALLEN. Timed out? 

The CHAIRMAN. Yes. We will do a second round if you need to. 

Mr. Thompson, for 4 minutes. 

Mr. THOMPSON. Mr. Chairman, thank you. Thanks to all the Secretaries, Administrators, for your service, for being here today. I 

wanted to, Administrator Shea, APHIS has made some very firm 

commitments about how long it takes to make regulatory decisions 

for biotechnology products, which obviously are very important. 

This is something this Committee has worked on. My question is 

pretty straightforward. Are you meeting those goals? Can you talk 

about the process a little bit? 

Mr. SHEA. Yes, we are absolutely making the goals. We had 23 

deregulation decisions pending 3 years ago. Twenty of those 23 

have been made. Since that time, 11 more deregulation requests 

came in. We have completed seven of those and expect to complete 

three more of those within the next month. So there are only seven 

pending decisions right now, and that should be down to four within a few days. So we made some tremendous improvement there. 

I think one thing we simply did was, something that a lot of folks 

kind of miss, in processes, that there are a lot of internal deadlines; 

and you have to enforce each internal deadline with all the various 

people that have to approve something, and just by doing that, we 

made great progress. We also are focusing on novel or new kinds 

of technologies that we are looking at so that we can take our prior 

analysis and decision-making on more standardized biotechnology 

and make those decisions more quickly. So we are really doing 

very, very well with this. 

Mr. THOMPSON. Thank you very much. Mr. Secretary, you recently proposed very stringent, new performance standards for 

ground turkey and chicken products. Do you think the industry as 

a whole can even be able to meet those new standards, and are you 

certain that their implementation will result in quantifiable benefits to American consumers that will ultimately outweigh the cost 

to both the industry and the consumers? 

Mr. ALMANZA. Yes, we do believe that they would be able to meet 

those standards. I think they have made significant strides since 

we have been talking about this, and we proposed, they understand 

about more stringent performance standards that we are going to 

have. We do believe that they will be able to meet them ultimately. 

They have met them before, and we do believe that there is going 

to be a quantifiable advantage to the American consumer just 

based on some of the problems that we have had in the past with 

those products. 

Mr. THOMPSON. So you will be able to measure, and at some 

point, share with us, the cost-benefit analysis of the cost of implementing the regulations versus the benefits? 

Mr. ALMANZA. Certainly we can provide that to you if you would 

like that. 

Mr. THOMPSON. Sure. I think that is important any time we are 

looking at regulation. 

Mr. ALMANZA. Absolutely. 

160 

Mr. THOMPSON. I appreciate what you are doing. Administrator 

Mitchell, at times, livestock market owners have been told by 

GIPSA they may not exclude people from their places of business. 

When can a livestock market exclude someone for financial reasons, and how can they go about it? 

Mr. MITCHELL. Well, we expect markets to admit all willing sellers and buyers. The exception helps to ensure livestock producers 

who cosign livestock will have the widest possible pool of potential 

buyers. Further, the United States Supreme Court held that the 

Packers and Stockyards Act makes stockyard market agencies public utilities with a duty to serve all impartially and without discrimination. 

At the same time, the Act makes the responsibility of every 

stockyard owner to prescribe rules and regulations to require those 

persons engaging in the purchase, sale, or solicitation of livestock, 

to conduct their operations in a manner, which will foster, preserve, and ensure an efficient, comprehensive public market. 

GIPSA expects market agencies to take those reasonable steps to 

assure that those who bid on livestock have the financial ability to 

pay for the livestock and to assure that the market personnel and 

market participants behave appropriately. 

Occasionally, a market may find it necessary to exclude a buyer 

because the individual has failed to pay for livestock. Even less frequently, a market may determine that a market participant’s presence is disruptive to the conduct of business and act to exclude that 

individual. GIPSA has not addressed the statutory requirements 

through regulations. Rather, the agency has relied on the livestock 

markets to conduct their business fairly and with professionalism. 

In the rare instances where a problem arises, GIPSA would investigate a complaint that an individual has been unlawfully excluded 

from market and determine whether the actions of the market violate the Act. 

Mr. THOMPSON. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Kelly, for 

4 minutes. 

Mr. KELLY. Deputy Under Secretary Almanza, I just want to follow. I share the sentiments from the gentleman from Arkansas as 

to the catfish. What other meats are not inspected that either come 

in or don’t have similar inspection patterns that come into the 

United States that we export? 

Mr. ALMANZA. What other? 

Mr. KELLY. Meat. There is for poultry. There is for beef. What 

other meat, other than catfish, is not inspected that we export that 

does not have a dual inspection role, either going in or coming out? 

Mr. ALMANZA. Right. The only thing that FSIS is responsible for 

is meat, poultry, and processed eggs. Everything else is basically 

inspected by FDA. 

Mr. KELLY. Okay. And this is for Administrator Shea. While 

high-pathogen avian influenza hasn’t affected the southeastern 

United States of which Mississippi and several other states are 

there, our poultry producers and resources are doing all they can 

to prepare. What lessons have you learned at APHIS about the 

spring’s avian influenza outbreak that will make it better, make 

161 

you better able to respond to that when and if it hits the Southeast? 

Mr. SHEA. First, of course, we know there needs to be better biosecurity. Biosecurity in poultry farms is really good, but not good 

enough for this kind of outbreak, so we need to step that up. That 

is the lesson. But once an outbreak does occur, we have learned a 

lot of lessons. First, we need to depopulate the sick and exposed 

birds as quickly as possible; two, we need to compensate those owners quickly so they can get back on the road to recovery, get back 

into business; we need to very quickly determine how to dispose of 

the carcasses. That was something that was a cause of delay before. We need to know whether we are going to compost them in 

the hothouse, compost them in the field, bury them, incinerate 

them, or take them to a landfill; but we need to make that decision 

very, very quickly. In the Southeast with lots of broilers, 

composting in the house would probably work well; but we need to 

make that decision on a case-by-case basis. 

I know in Georgia, they would prefer to not do that, so we need 

to work with everyone on that. We also know we need consistency 

on how we are going to clean and disinfect each facility once we 

are done. 

Mr. KELLY. Mr. Under Secretary, I am not sure who to address 

this question to, but one of the issues I had come up while I was 

back home in district, was between the grower and the owner of 

broilers, a lot of times the grower does not have insurance or cannot get insurance and it goes to the owner of the broilers, not to 

the grower. Are there any provisions, or has USDA, or has anyone 

looked at how do we take care of the grower who not only loses his 

crop that he doesn’t get paid for, but also is not capable of growing 

crops in the future or for a long time? 

Mr. AVALOS. Congressman, that question has come up before in 

conversation, and I do not have an answer for you but Administrator Shea can explain the process to you. 

Mr. SHEA. It is kind of ironic, but for low-pathogenic regulations, 

we do require that the grower gets some of the compensation; and 

we do not have that in our current regulations for highly-pathogenic avian influenza, but we are looking to correct that. 

Mr. KELLY. Thank you both for your answer. Mr. Chairman, 

thank you again for allowing me, and thank the panel, and I yield 

back the balance of my time. 

The CHAIRMAN. The gentleman yields back. Mr. DesJarlais, 4 

minutes. 

Mr. DESJARLAIS. Thank you, Mr. Chairman. Mr. Shea, you and 

I have talked a few times by letter and otherwise regarding the 

walking horse industry, and I wanted to speak with you a little bit 

today. I sent you a letter on August 10, and you were very gracious 

to give me a response by August 20, and I appreciate that. I have 

had a lot of calls from constituents over concerns about the objectivity in the inspection process on the walking horses, and the 

numbers grew to the point that I decided to hold a town hall during the week of the celebration in Shelbyville. They had set aside 

a room for 450 people which ended up overflowing and had to be 

moved into an arena, and we had over 1,100 people in attendance. 

And I don’t think in 5 years I have ever had that many people turn 

162 

out for a town hall, so it is important that we talk a little bit about 

it. 

What is your current opinion about the state of the walking 

horse industry; is it improving and does it have a right to exist in 

its current form? 

Mr. SHEA. It certainly has a right to exist in its current form. 

And we certainly believe that the industry can exist without soring. 

And, indeed, despite the understandable controversy at the celebration, nearly nine out of ten horses passed inspection. So it is, indeed, possible to train a horse, to compete in the celebration and 

other Tennessee walking horse shows without soring. So we believe 

that certainly the industry is in better shape than it was many 

years ago when soring was openly blatant. That is not the case 

now, I don’t think. 

Mr. DESJARLAIS. Okay. And I was just looking at some numbers 

and there were VMOs and DQPs at 39 shows through the first 8 

months of the year. And over 4,300 horses were inspected and 

there was a turndown rate of about one percent. So I would say 

that is pretty good, wouldn’t you? 

Mr. SHEA. I am not sure that I can concur with those statistics. 

I believe that the disqualification rate was somewhat higher than 

that. But it is—— 

Mr. DESJARLAIS. With the celebration, I agree. The celebration is 

kind the Super Bowl of horse shows. So it is kind of in the NFL— 

they play all the games all year long to get to the Super Bowl so 

people can come and watch the best athletes, if you will. But at the 

celebration this year there was about 1,200 horses inspected—or 

2,000 horses. No, 1,200 entries and there was about a ten percent 

turndown rate. 

How can you explain one percent through 8 months of August, 

same horses, same inspectors, same BMOs, and then they get to 

the big Super Bowl of shows and it jumps tenfold? 

Mr. SHEA. There are any number of reasons why it can increase. 

For one, scarring and soring can take place throughout the entire 

year. And by the time the horses get to the celebration, the soring 

and the scar caused by the soring is more apparent and easier to 

see, is one thing. 

Second, because the stakes are so high at the celebration, our experience is that, perhaps, owners and trainers are more willing to 

try to get a sored horse through inspection than they might at a 

lower stake show. 

Mr. DESJARLAIS. It seems like they would know that there would 

be more people watching there, so I don’t necessarily agree with 

that. Do you think that a biopsy is an appropriate objective form 

of testing for scarring? Let’s say a horse gets turned down for scarring and a biopsy is performed and it shows no scaring, would that 

be insignificant to you? 

Mr. SHEA. Well, certainly, if a biopsy were to prove that, it would 

be something we should look at. 

Mr. DESJARLAIS. Okay. Is thermography capable of detecting 

scarring? 

Mr. SHEA. Thermography does not detect a scar, but it indicates 

where a scar may be. 

163 

Mr. DESJARLAIS. Okay. Now, like if there were 200 horses, or 

whatever I said, turned down, 126 were turned down, how many 

of these are followed up on an issued citations? The whole Horse 

Protection Act is to get rid of bad actors, and I think it should be 

and I think that is great. How many are followed up on and issued 

citations? 

Mr. SHEA. We either issue a citation or issue a warning letter to 

all of them. But because there are so many, we simply can’t follow 

through and file a Federal case against literally each and every 

one. 

Mr. DESJARLAIS. Okay. I thank you for your time. Mine has expired, but I hope we can visit some more about this later. 

Mr. SHEA. I would be happy to. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Abraham, for 4 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. And I thank the panel 

for being here. I actually think you men and women are an integral 

part of our national security because food safety is utmost on all 

of our minds, and certainly a place where our enemies could do us 

harm if they so choose. So thanks for doing a good job on that. 

I will address my question to you, Secretary Almanza. I am both 

a veterinarian and a human physician, so the use, or lack of use, 

of antibiotics in our food chain is somewhat important to me, and 

I will hit it from two questions real quickly. 

On the veterinary side, I understand the withdrawal times, but 

the use or the lack of use of antibiotics in the feedlots in our poultry farms, have there been studies or what’s the discussion on y’alls 

level as to animal welfare and mortality morbidity as far as use 

and lack of use of antibiotics and that? And on the human side, you 

mention in your opening statement several food pathogens: E. coli, 

Salmonella, Listeria, and Campylobacter. Those we know about. 

Any studies or discussions, again, at your level, as far as whether 

antibiotic use or lack of use does promote resistance? 

Mr. ALMANZA. That is primarily at FDA, what I would say is in 

their bailiwick for setting standards. I will tell you that we are 

very active in testing for residues. If we have veterinarians in each 

of our slaughter plants, in addition to food inspectors as well, but 

at any time if we see any injection sites, anything that appears to 

be abnormal, we certainly test those animals to see whether they 

have any residues, that they haven’t met any withdrawal times 

and things of that nature. 

Now, we also work very closely with FDA and with CDC, as well, 

to look at the prevalence of these types of issues and concerns certainly in the biosecurity arena as well. 

Mr. ABRAHAM. Thank you, Mr. Chairman. I yield back. 

The CHAIRMAN. The gentleman yields back. 

Mrs. Walorski, for 4 minutes. 

Mrs. WALORSKI. Administrator Shea, I am thrilled that you are 

here. I have additional questions about the avian flu. 

I appreciate your answers to Mr. Kelly. I just have a couple of 

additional questions on that. For example, so in Indiana, obviously, 

we are in the Midwest. We had a brief skirting of this with only 

77 birds destroyed. But certainly in my district, in northern Indiana, where we have a large amount of poultry providers and egg 

164 

production, I have worried constituents. And what you were talking 

about just a second ago with biosecurity, depopulating very, very 

rapidly and things like that, in some cases it took 2 weeks to put 

down all those birds. And we were embroiled in that conversation 

about this question. Then what? What are they going to do with 

all these birds and how are they going to disintegrate them or what 

is going to happen? You are alluding to all of that. 

So when you looked at these states that were wiped out, did you 

look at states like Indiana as well that had these skirmishes, and 

when you are looking at setting policy are you going to include 

states like Indiana, these professional growers as well, since we 

have already dealt with that. There is a lot of stress in my district 

about what happens in spring with these migratory populations. 

Can you speak to that? 

Mr. SHEA. Sure. I think that every state is pretty much in the 

same boat. As was mentioned earlier, we are all in this together, 

and every state needs to have pretty much the same approach to 

it, no matter what kind of poultry you have or how large a poultry 

industry it is. We are all in this thing together. So we definitely 

have looked at how it can work in every state. 

One of the things we did to plan for the fall was ask every state 

to tell us the state of their readiness for an outbreak in the fall, 

and each one did that. And many are in very good shape, others 

learned through this survey that we sent them that they need to 

do more. 

Certainly, Indiana has a very vigorous and robust animal health 

operation with Dr. Marsh for many years. 

Mrs. WALORSKI. Absolutely. He did an incredible job, by the way. 

Mr. SHEA. And so I am pretty confident that Indiana will be prepared better than maybe even some other states would be should 

there be an outbreak. 

Mrs. WALORSKI. I appreciate that, and I agree. 

Do you feel APHIS has the authority to do what it needs or do 

you feel Congress needs to make legislative changes? 

Mr. SHEA. I think we have the authority we need. And also kind 

of getting back to something that was mentioned earlier, much of 

the regulatory action that takes place in a program like this is really under state power. The state imposes the quarantine, the state 

actually issues depopulation orders. So we have to work hand in 

hand with states on these programs. 

Mrs. WALORSKI. I appreciate it. I appreciate your efforts as well. 

I yield back, Mr. Chairman. 

The CHAIRMAN. The gentlelady yields back. 

Mrs. Hartzler, for 4 minutes. 

Mrs. HARTZLER. Thank you, Mr. Chairman. Thank you, everyone. 

I wanted to reference some of the other questions on catfish, 

Deputy Under Secretary, in that this species has been successfully 

inspected for years through the FDA, correct? There has been no 

major human health risk, isn’t that right? 

Mr. ALMANZA. Not that I am aware of. 

Mrs. HARTZLER. Right. And are you aware that moving forward 

with this rule is jeopardizing the TPP as it relates to Vietnam and 

that they believe that it violates the WTO agreements and it opens 

165 

up all the rest of the agricultural products in America to retaliation? 

Mr. ALMANZA. I have certainly read that. But as a regulator at 

FSIS, I am basically about food safety, and I can’t pay attention 

to that rhetoric. 

Mrs. HARTZLER. Sure. How much money has the agency spent already on trying to implement this rule? 

Mr. ALMANZA. Well, implement is probably a little over the top 

because basically what we have done is we have tried to set up 

what catfish inspection would look like. I could get you an exact 

number so that you can have that, but we can provide that to you. 

Mrs. HARTZLER. Sure. I have heard already we have spent $20 

million. And I don’t know if that is the case or not, but we have 

invested already and it is not even set up. And we have another 

agency that we are spending hard-earned tax dollars on that is already doing it successfully. 

Mr. ALMANZA. Well, one of the things I will say is that it is different in that the way FSIS inspects, we are there every single day, 

FDA isn’t. They may get there once every year or every 3 years. 

So having a robust inspection system of every single catfish that 

is slaughtered—if you want to call it slaughtered—and having direct oversight over that every single day is significantly different 

than just having somebody come audit your plant. 

Mrs. HARTZLER. Sure. And it is going to cause a lot additional 

cost without necessarily a need there. 

But anyway, I want to move on, but thank you for that. 

Administrator Mitchell, I want to thank you for being so prompt 

in replying to a letter that I wrote to you about some concerns with 

the livestock marketing facilities in my district as relates to the auditing process. 

And I was really thrilled and I know all of my livestock markets 

at home are very appreciative of getting the information back to 

them now in a timely manner after an audit so there is some closure. So I just wanted to thank you for that. 

And just generally in reference, though, can you give me a little 

more background about the way that GIPSA strategically decides 

who to audit and when? 

Mr. MITCHELL. Well, most of our work is done by our resident 

agents. Many years ago, we reduced the number of our offices from 

13 down to three. So a lot of our agents are in a locale. They will 

have an entire state, they may have part of a state, or they may 

have several states. They do ride a circuit. It is not etched in stone 

on what year or what month they are going there, but they are on 

the ground. And they have to go on some of the information that 

they may pick up at other sales or from producers. And, of course, 

we have an 800 number hotline that comes in for people to call in 

that might get someone reviewed. 

But it is fairly well at random. But when you have a facility that 

hasn’t been reviewed in many years, they probably will be coming 

up for review very soon. We take it very seriously. We want to 

make sure that they are in business. Our livestock barns, they are 

rural for the most part, they are certainly local, they are small 

businesses, and they are just absolutely vital to ensuring that we 

do have price discovery within the market. 

166 

So, I don’t have a formula for you on exactly when it is going to 

come up, but it has a lot to do with those folks that are on the 

ground out there. 

Mrs. HARTZLER. Thank you. My time has expired. 

The CHAIRMAN. The gentlelady’s time has expired. 

Mr. Rouzer, for 4 minutes. 

Mr. ROUZER. Thank you, Mr. Chairman. I appreciate each of you 

coming before the Committee today. 

Mr. Shea, I have been advised there is a pretty serious shortage 

of FMD vaccine needed to manage an FMD outbreak. Can you 

share with us what the Administration’s plan is for that? 

Mr. SHEA. Well, indeed, there is not a huge vaccine bank for footand-mouth disease. But I want to emphasize that our first reaction, 

God forbid we ever did have a foot-and-mouth disease outbreak in 

this country, would not be to vaccinate. We would immediately try 

to stamp that disease out through depopulation and movement restrictions because we don’t want to move immediately to a vaccination program because that could lead to export restrictions. And we 

want to eradicate the disease, not live with it through vaccine. 

We are looking at all the options for vaccine. I think it was alluded to earlier, our colleagues in the Agricultural Research Service have been working on a leaderless vaccine which has great 

promise. So we are, indeed, looking at other possibilities. 

Mr. ROUZER. Given all that, do you have any idea what type of 

cost estimate if we are going to try to tackle this from all quarters, 

what type of cost estimate we would be looking at for a vaccine? 

Mr. SHEA. I hesitate to say what that cost may be until we can 

see how this leaderless vaccine works out. Traditional FMD vaccine 

currently used around the world is very, very expensive, certainly. 

Mr. ROUZER. I have heard some reports that should we pursue 

that route, the industry might be required to help cover the cost 

of it. Has there been any discussion of that or any insights you can 

share on that front? 

Mr. SHEA. We haven’t made any kinds of policy decisions like 

that. We have had some very generalized discussions with industry 

about the vaccine issue. We certainly agree with them that we 

would be better off to have a good supply of effective vaccine for 

foot-and-mouth disease, but we haven’t really gotten to any kind of 

details how to pay for these very high numbers that would be involved. 

Mr. ROUZER. Thank you very much. Mr. Almanza or Almanza, 

which do you prefer? 

Mr. ALMANZA. Al is fine with me. 

Mr. ROUZER. Well, I get asked all the time, do I like Rouzer or 

Rouzer and I say Rouzer so—— 

I have a question for you. What sorts of tools and assistance can 

FSIS provide to assist smaller producers or facilities? What is the 

best way for those businesses who are looking for answers to get 

those answers? 

Mr. ALMANZA. We have an extensive outreach program for small 

and very small plants. And at the beginning, I kind of covered our 

food safety app that we developed, that Food Keeper app. We think 

that that is really helpful for not only small and very small plants, 

but it is just general outreach that we did with Cornell. 

167 

But we have a USDA small plant help desk that fields calls. Last 

year, we had over 1,400 inquiries. We had 1,400 inquiries just 

through the third quarter of this fiscal year. And then we also have 

a small and very small plant web page that received close to 12,000 

views through the third quarter of 2015. 

So we tend to do a lot of outreach to small and very small plants 

because they don’t have the resources available to them to get 

those kind of answers. 

Mr. ROUZER. And real quickly, I understand you all are updating 

the way you carry out inspections. If you want to talk about that 

for a second and any updates on any proposals to modernize hog 

slaughter? 

Mr. ALMANZA. Yes. So the whole modernization effort, I spoke to 

that about what we did with our new poultry inspection system. 

Right now we are gathering data and analyzing that data in the 

five plants that we currently have under the HIMP project in swine 

plants. What we are looking to do is develop enough of the data, 

analyze it, and have a proposed rule to implement that, or just to 

have a proposed rule by the end of the year. 

Mr. ROUZER. Thank you, Mr. Chairman. My time has expired. 

The CHAIRMAN. The gentleman’s time has expired. 

Let me follow up. I think all the Members have talked. 

Mr. Shea, can you talk to us a little bit about if we had an FMD 

outbreak in Texas and it migrated into the feral hog population, 

one, is that likely or not, but if it did happen, how do we control 

that? 

Mr. SHEA. Well, certainly, we would hope that wouldn’t happen 

and we would find it quickly. 

The CHAIRMAN. I mean, that is the problem I am dealing with 

as we look at this issue with Argentina and South America, is that 

this is a high stakes deal. If it were just animals that were under 

pen and you knew where they were and could handle them, that 

would be one thing. Mr. Avalos has a great program going, but we 

create more feral hogs every day than we are killing, so what 

would happen to us? 

Mr. SHEA. Well, certainly, if we started seeing foot-and-mouth 

disease circulating in feral swine, that might be the point where 

vaccination is going to have to become the next tool. Because, obviously, we can’t capture and depopulate all the feral swine. There 

are at least five million in the United States now and 1⁄2 of them 

are in Texas. 

The CHAIRMAN. Ms. Fudge, did you want to ask questions of this 

panel. 

Ms. FUDGE. No. 

The CHAIRMAN. Gentleman and ladies, thank you very much for 

being here this afternoon. We appreciate it. This was very educational. Again, as for the other panels, we really appreciate what 

you do day in and day out. Your team goes to work every day to 

work on your issues and to make sure that the American consumer 

has the, when we talk about the cheapest, most abundant, and 

safest, you are on the safe side for the most part, and we appreciate everything that you do to make that prediction fulfilled every 

single day, so thank you very much. 

168 

If you wouldn’t mind transitioning down to 1306, we will let the 

Members swing by and say a quick word to you individually if they 

want to, while we transition to our third panel. But again, thank 

you very much for your testimony today we appreciate it. 

We will take a break for about 3 or 4 minutes. 

[Recess.] 

The CHAIRMAN. I would like to welcome our third panel to the 

witness table today. We are joined by the Honorable Kevin 

Concannon, who is the Under Secretary for Food, Nutrition, and 

Consumer Services at USDA. He is accompanied by Ms. Audrey 

Rowe, Administrator, Food and Nutrition Service; and Ms. Angie 

Tagtow, who is the Executive Director, Center for Nutrition Policy 

and Promotion. 

Ms. Rowe, did I get your name right? 

Ms. ROWE. Yes, sir. 

The CHAIRMAN. Terrific. I made it through that one. Mr. 

Concannon, you have the microphone for 5 minutes. 

STATEMENT OF HON. KEVIN CONCANNON, UNDER 

SECRETARY, FOOD, NUTRITION, AND CONSUMER SERVICES, 

U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C.; 

ACCOMPANIED BY AUDREY ROWE, ADMINISTRATOR, FOOD 

AND NUTRITION SERVICE, USDA; AND ANGELA TAGTOW, 

M.S., R.D., L.D., EXECUTIVE DIRECTOR, CENTER FOR 

NUTRITION POLICY AND PROMOTION, USDA 

Mr. CONCANNON. Thank you, Mr. Chairman. Since time is short, 

I will highlight a few key points, but I ask the Committee to review 

my full written statement. 

As the economic recovery continues to strengthen, we remain 

acutely conscious of the impact of nutrition programs in the lives 

of Americans and supporting institutions, such as schools, volunteer organizations, and the health care system. 

The program works through partnerships in communities across 

the country with national standards for eligibility and benefits, but 

considerable state and local flexibility, a combination that is critical to success. These successes also reflect a partnership between 

Congress and Administrations of both parties that we must continue. 

President Nixon established the Food Nutrition Service. Senators 

Dole and McGovern, with others on both parties, fought for food 

stamps and WIC in the 1970s. And Members of this Committee 

from both parties championed the Agricultural Act of 2014. 

When I travel, I visit not just government offices, but schools, 

food banks, WIC clinics, and employment programs to see firsthand 

how services are delivered and who receives them. The Committee’s informative and useful hearings on SNAP, chaired by Congresswoman Walorski, have affirmed, through the testimony of 

most witnesses, the program’s value in the lives of Americans 

aligning with the positive impacts I see on the ground. Let me 

briefly outline a few. 

As SNAP provides needed food assistance, it lifts millions of people out of poverty and lessens poverty’s impact on food insecurity 

effects supported by research. And while SNAP has not solved food 

insecurity, it has contributed to its decline between 2011 and 2014. 

169 

SNAP also supports work. I rely on my experience as a State 

Commissioner overseeing food stamps and other safety net programs in three states, but the statistics confirm it too. Today, 31 

percent of households, including 42 percent of recipients, have 

earnings—a major shift from 20 years ago. 

SNAP requires able-bodied adults to register for work, deducts 

part of their earned income to incentivize work and lessens the 

benefit cliff and helps recipients get jobs. We all agree that meaningful work is the right way to reduce demand on nutrition assistance, and strengthening this part of SNAP is a priority. 

Our new Office of Employment and Training is reenergizing 

SNAP E&T to help recipients get good-paying jobs. We promote 

fuller E&T efforts in meetings with states, urging engagement with 

organizations such as Goodwill, food banks, and job centers. And 

the farm bill E&T pilots will help us define and scale up the most 

effective strategies. 

Nutrition is the link between agriculture and health, and USDA 

Foods, formerly called USDA Commodities, support both good diets 

and our nation’s farmers, who have reduced sodium, fat, and added 

sugars in the products we buy, increase the variety of fruits and 

vegetables available. 

Though I am pleased by these results, I know we can do more. 

We have refocused SNAP on evidence-based nutrition and healthy 

weight strategies, including farm bill authorized efforts to expand 

and test incentives to encourage healthier food choices. 

We have brought more farmers’ markets into SNAP—a win-win 

for farmers and SNAP recipients. As of July, more than 6,400 

farmers’ markets and farmers are SNAP authorized—a seven-fold 

increase since 2008. The farm bill authorized pilots to use USDA 

food funds flexibly to enhance schools’ ability to buy locally. 

Our Center for Nutrition Policy and Promotion choose MyPlate 

Resources are widely used by dietitians and recognized by American consumers. The center develops the USDA food plans, tracks 

the nutrient content of U.S. food supply, and produces the annual 

Cost of Raising a Child report. 

We are working with the Department of Health and Human 

Services on the next addition of the Dietary Guidelines for Americans, which will remain within our mandate to quote ‘‘provide nutrition and dietary information and guidelines based on the preponderance of the scientific and medical knowledge.’’ In the future, the 

2020 Guidelines will include guidance for infants, babies, and 

women who are pregnant or breastfeeding. 

Public trust demands our ongoing commitment to improve integrity. We must also stop the unfortunate misinformation that these 

programs are rife with abuse. This too undermines public trust and 

does nothing to help Americans. SNAP’s 2014 payment accuracy 

rate is one of the best in the government, but any improper payment is too much so we must continue to improve. Trafficking the 

sale of benefits for cash has been reduced from four percent down 

to 1.3 percent. Again, we are not satisfied. We continue to push 

states on that issue. 

We recently reorganized and created a retail operations division 

that focuses on high risk areas around the country while enhancing 

customer service. Last year, we permanently disqualified 1,400 

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stores or storeowners, the most ever in 1 year. New rules will 

stiffen penalties on those who try to exploit the program. But most 

people follow the rules. We work closely with our state partners to 

fight recipient fraud. 

Let me turn briefly to disaster nutrition assistance, not one of 

our larger functions, but a critical one, especially these days. I received a report yesterday on the fires out West. Over the past 

month, we have been very much involved helping people out in the 

CNMI, Congressman Sablan’s area, where, again, they were affected by a terrible set of storms. So it is important to know that 

we have that capacity as well. 

While I have discussed the major farm bill authorized programs, 

my written statement includes results and priorities for nutrition 

programs authorized through other laws. I thank you for your time 

and attention and the opportunity to appear before you today. 

[The prepared statement of Mr. Concannon follows:] 

PREPARED STATEMENT OF HON. KEVIN CONCANNON, UNDER SECRETARY, FOOD, NUTRITION, AND CONSUMER SERVICES, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Thank you, Mr. Chairman, and Members of the Committee, for the opportunity 

to update you on the work of the U.S. Department of Agriculture’s (USDA) Food, 

Nutrition, and Consumer Services (FNCS) mission area, and to highlight our current priorities. I am joined today by Audrey Rowe, Administrator of the Food and 

Nutrition Service (FNS), and Angie Tagtow, Executive Director of the Center for 

Nutrition Policy and Promotion (CNPP), the two agencies within our mission area. 

The programs administered by FNS touch one in four people in this country over 

the course of a year, improving food security and diet quality for children and lowincome people throughout the United States, while CNPP reaches Americans of all 

income levels with information to help them improve their health and well-being. 

While FNS’ nutrition assistance programs have helped millions of Americans meet 

their nutritional needs during tough economic times, I’m pleased to join you at a 

time when the economy is recovering to the benefit of more and more Americans. 

The official unemployment rate has been below six percent since last September. It 

also appears that the economic improvement has started to yield decreases in participation in the Supplemental Nutrition Assistance Program (SNAP) from the levels 

we saw as a result of the recession. SNAP continues to respond to changes in the 

economy precisely as it was designed to do. There are currently about 1.3 million 

fewer participants in SNAP than there were 2 years ago and the reductions in participation are geographically dispersed. As of May, SNAP participation was lower 

in more than 3⁄4 of the states and Territories that operate the program as compared 

to 1 year earlier, and the downward trend in participation is expected to continue, 

with more than 1.9 million fewer people receiving SNAP in 2016 than in 2013. 

While the recovery has not yet reached every American, there are encouraging 

signs. 

We are making good progress on the economic front. But despite the many people 

who have benefited from the recovery, there remain millions of American families 

in need. The nutrition assistance programs remain vitally important to help these 

struggling families put food on the table. 

We have a great responsibility to continue our bipartisan work to ensure the safety net programs remain an important part of our country’s social compact to serve 

those who need it. President Richard Nixon convened the 1969 White House Conference on Hunger and established the Food and Nutrition Service at USDA. Senators Bob Dole and George McGovern, along with others from both parties, fought 

for the expansion of the Food Stamp Program and Special Supplemental Nutrition 

Program for Women, Infants and Children (WIC) in the 1970’s. 

The commitment to these programs has endured and grown under bipartisan 

leadership from both ends of Pennsylvania Avenue, as was evident in the passage 

of the Agricultural Act of 2014 (farm bill) thanks to the efforts of former Chairman 

Lucas and Ranking Member Peterson. I want to thank you, Chairman Conaway and 

Ranking Member Peterson, as well as the other Members of the Committee, for carrying on that legacy of bipartisanship. I am proud of the accomplishments shared 

by the Administration and Congress related to the nutrition assistance programs. 

171 

I have watched with interest the series of hearings that the full Committee and 

Chairwoman Walorski of the Nutrition Subcommittee have convened to review the 

operations and impact of SNAP. These have been informative and useful hearings, 

and have underscored the evidence base underlying SNAP and other nutrition assistance programs. It is also important to pause and examine the accomplishments 

of the nutrition assistance programs in offering critical support to those in need. Let 

me review a few key points in this regard. Research on the long-term impacts of 

the introduction of SNAP (formerly the Food Stamp Program) showed that young 

children who had access to the program when it was first rolled out county-by-county saw long-term health benefits. They were less likely to suffer from high blood 

pressure, heart disease, obesity, and diabetes, and the study also found that SNAP 

participation increased educational attainment, employment, and earnings. 

We know that SNAP, in addition to helping millions of low-income Americans put 

food on the table, more than 1⁄2 of whom are children, the elderly, or individuals 

with disabilities, also lifts millions of people out of poverty. The Census Bureau indicates that SNAP lifted over five million Americans—including nearly 2.2 million 

children—out of poverty in 2013. The Supplemental Poverty Measure, based on recommendations from the National Academy of Sciences, shows that SNAP reduced 

child poverty by three percentage points in 2012—the largest child poverty impact 

of any safety net program other than refundable tax credits. We also know that 

SNAP effectively mitigates the effect of poverty on food insecurity. A recent USDA 

study found that participating in SNAP for 6 months is associated with a significant 

decrease in food insecurity. The temporary increase in SNAP benefits provided in 

the Recovery Act resulted in a sharp decline in the number of households experiencing very low food security (meaning that one or more household members had 

to skip meals or otherwise reduce their food as a result of insufficient resources). 

We also know that SNAP supports work. Today, 1⁄2 of SNAP households with children have earnings. This includes 42 percent of female-headed, single-parent households, and 70 percent of married-couple households participating in SNAP. This reflects a dramatic transformation over the past 20 years. As you are aware, SNAP 

requires able-bodied adults to register for work, allows a deduction for earned income to incentivize work, reduces benefits gradually as income increases to avoid 

a ‘‘benefit cliff,’’ and provides employment and training services to help participants 

prepare for and get jobs. 

Though the results are impressive, we all know there is more to be done to make 

these programs even more effective. We are working vigorously on a number of 

fronts, and I look forward to continue to work with you and the Committee toward 

our mutual goals. Let me briefly review some of our most 

• In SNAP, we continue to work with states to implement evidence-based approaches to nutrition education and prevention of obesity to support and facilitate healthy eating choices among SNAP participants. For example, the farm 

bill provided $100 million for us to work with retailers, including farmers’ markets, on incentives to encourage healthier food choices and increase access to 

fruits and vegetables. We are also developing new standards for retailers to 

stock a wider array of healthful offerings, as required by the farm bill. 

• We are expanding SNAP participants’ access to farmers’ markets to improve access to fresh and nutritious food. This is a priority not only of mine, but also 

of the Secretary. This is a win-win for farmers who experience an increase in 

customers, and for SNAP clients who have better access to healthy food. In 

2008, there were only 753 SNAP-authorized farmers’ markets and direct-marketing farmers. I am happy to report that as of July 2015, there were more than 

6,400 SNAP-authorized farmers’ markets and farmers. That is over a 750 percent increase. 

• The farm bill authorized us to provide SNAP Employment and Training Pilot 

grants to ten states to demonstrate and evaluate new and innovative ways to 

help SNAP participants prepare for and get meaningful work, and help them 

move toward self-sufficiency. The ten pilots, selected in March 2015, are now 

underway, and Secretary Vilsack and FNS have made it a priority to assist all 

states in making more effective use of regular SNAP Employment and Training 

funding that is available. 

• In our food distribution programs, we are enhancing services to participants in 

a variety of ways. We implemented a farm bill-authorized pilot that is allowing 

schools in eight states to flexibly use their USDA Foods entitlement to buy unprocessed fruits and vegetables for school meals, and to make those purchases 

locally if they choose. We are providing ground bison, a healthful traditional 

food, for the first time in a number of years for use in the Food Distribution 

Program on Indian Reservations (FDPIR). We transitioned the Commodity SupVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00175 Fmt 6601 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
172 

plemental Food Program (CSFP) to an elderly-only program, as required by the 

farm bill, and expanded it to an additional seven states with funding provided 

by Congress in the Fiscal Year 2015 appropriations bill, allowing over 600,000 

low-income senior citizens to be served nationwide. And so far this year, we’ve 

purchased over $160 million in additional USDA Foods for bonus distribution 

through The Emergency Food Assistance Program (TEFAP), including apples, 

fruit juice, cranberries, cherries, carrots, chicken, and lamb, which are then distributed to families in need through food banks and local organizations. 

• CNPP is working with the Department of Health and Human Services on the 

next scientific update to the Dietary Guidelines for Americans (DGA), which provide science-based recommendations to help prevent disease and promote health 

for people aged 2 years and older. As we develop the 2015 DGA for release at 

the end of this calendar year, we will examine all recommendations and public 

comments. The 2015 DGA will be developed within the scope of our statutory 

mandate to provide ‘‘nutrition and dietary information and guidelines . . . 

based on the preponderance of the scientific and medical knowledge.’’ 

• CNPP is working on a number of other initiatives. We are beginning to build 

the framework for gathering evidence to support dietary guidance for birth to 

24 months of age and women who are pregnant or breastfeeding. By 2020, we 

expect to be able to provide dietary guidance for every American. Our SuperTracker online diet and physical activity assessment tool has over 5.6 million 

registered users. Our other healthy eating tools, such as MyPlate, are used by 

parents, educators, and all Americans to improve their diets and their health. 

• And although it falls under the jurisdiction of your colleagues on the Education 

and the Workforce Committee, Members of this Committee may also be interested to know that FNS continues to make progress working together with 

states and local school districts to implement the Healthy, Hungry-Free Kids 

Act (HHFKA), ensuring our nation’s children receive nutritious meals at school 

and during the summer months when school is out. 

I am pleased with the coordination we have had with you, Mr. Chairman, and 

Members of this Committee in enacting and implementing the farm bill, which preserved the fundamental structure of nutrition assistance while also making needed 

improvements. As you know, prompt and robust implementation of the farm bill is 

a top Departmental priority. Most provisions of Title IV that impact SNAP eligibility and benefits were implemented in the first few months after enactment. We 

are working energetically, and as quickly as possible, to codify these provisions in 

our regulations, some of which we completed just this month, and to implement a 

number of other Title IV provisions, many of which impact our partners in the retail 

food industry. 

I remain committed to integrate science and evidence-based improvements into all 

of the programs for which I am responsible. Like many of you, I am not a scientist. 

That is why we work with organizations like the National Academy of Medicine (formerly the Institute of Medicine) and our colleges and universities, who provide us 

the evidence and analysis we need to make sound policy. 

I am further committed to making continued improvements in the integrity of 

these programs—one of my, and the Department’s, most important responsibilities, 

and one I know we share. As I have testified previously, Americans expect and deserve a government that ensures that the significant public investment in nutrition 

assistance is managed wisely. We must continue to earn and maintain the public’s 

trust through the proper administration of these programs—for a lack of public confidence could threaten the programs’ very survival. We must also debunk the myths 

about SNAP and other nutrition assistance programs—that they are rife with fraud, 

or that benefits are going to people who are not eligible. These mischaracterizations 

of the programs also undermine public trust. 

Maintaining payment accuracy is a nationwide commitment between USDA and 

our state partners and supports President Obama’s Executive Order to reduce improper payments. The Department uses a rigorous quality control process to find 

payment errors in SNAP—which can result from administrative mistakes or intentional violations—and require states to recover over issued benefits and provide 

under issued benefits. The SNAP national payment accuracy rate for Fiscal Year 

2014 was 96.34 percent. Achieving high rates of payment accuracy is the result of 

years of aggressive work and a nationwide commitment to reduce improper payments and improve administration of SNAP. Since 2000, we have reduced the rate 

of improper payments by more than 1⁄2, and the SNAP error rate is among the lowest in the Federal Government. That said, we are constantly working to do even better. That is the kind of government the American taxpayer deserves. 

173 

With regard to trafficking—the sale of SNAP benefits for cash—we are actively 

investigating and punishing this illegal activity. We use data analytics to track retailers and participants who are potentially defrauding the program. The penalties 

for trafficking are severe, ranging from permanent program disqualification and 

monetary fines, to criminal prosecution. Over the last 15 years, FNS has implemented measures to reduce retailer trafficking dramatically, from an estimated four 

percent down to about 1.3 percent currently. Rules now being finalized at USDA 

will stiffen penalties so that fines are truly reflective of the harm done—strengthening the disincentive for retailers who may be thinking about trying to make a 

quick buck off the program. This year, we are on track to increase penalties by 29 

percent for violations. 

We are also working closely with our state partners to fight SNAP participant 

fraud. Participants who commit fraud are subject to disqualification and repayment 

of benefits. In Fiscal Year 2012, states conducted nearly 730,000 investigations, disqualified over 42,000 individuals, and collected over $72 million in fraud claims from 

households. And since 1992, the Federal Government has collected more than $1.3 

billion in delinquent SNAP participant claims. But there is still more to do. Those 

seeking to commit crimes are always seeking new opportunities, so we must continually adapt to these new challenges in order to make sure that public investments 

are protected. This year, our joint SNAP initiative with Inspector General Fong’s 

team is drawing on our respective offices and the strengths and responsibilities of 

Federal, state, and local law enforcement partners to identify and prosecute SNAP 

fraud, and also to prevent it in the first place. 

The President’s budget builds on existing efforts and provides strategic increases, 

including funds to strengthen Federal training, oversight, and monitoring of state 

quality control processes and data, to ensure that states are meeting the highest 

standards in program administration and payment accuracy. We will continue to 

confront error and abuse head-on to make sure that benefits go to those who truly 

need them. 

While I have focused my remarks on SNAP and the other nutrition assistance 

programs authorized under the farm bill, such as TEFAP, FDPIR, and CSFP, a 

number of our other major programs are authorized under other laws, under the 

jurisdiction of the Education and the Workforce Committee. I would like to mention 

them briefly here, since they make up such a large part of the work we do in FNCS. 

The Child Nutrition Programs, including school meals, child care and after school 

meals and snacks, and summer meals, give children the nutrition they need to develop and grow and become future leaders of this country. In school, students across 

the country are experiencing a healthier school environment with balanced meals 

that reflect nutrition recommendations by pediatricians and other child nutrition experts. The latest data shows that today, over 95 percent of school districts have been 

certified as meeting the new standards. And the average number of students eating 

a school breakfast each day has increased by almost 28 percent since 2008, meaning 

more children are ready each day to learn. 

WIC is one of the nation’s premier public health nutrition programs. WIC leads 

to better pregnancy outcomes—fewer infant deaths, fewer premature births, and increased birth weights—and saves money. Every dollar spent on prenatal WIC participation for low-income women on Medicaid saves as much as three times that in 

health care costs within the first sixty days after birth. And a study by the Centers 

for Disease Control and Prevention found that rates of obesity among low-income 

U.S. preschool children have stabilized or improved in a number of states, suggesting that recent changes to the WIC food packages may have contributed to this 

positive trend. 

Thank you again for the opportunity to appear before you today. I look forward 

to answering any questions you may have. 

The CHAIRMAN. Thank you, Mr. Concannon. I appreciate your 

being here today. 

Ms. Tagtow, your agency has done the Dietary Guidelines work 

for 2015. We will have the Secretaries up next month. But I would 

like to visit with you about just the volume of work, some 29,000 

comments received this time versus 1,300 last time. And we are 

told that some of these, or many of those, may have been duplicative, form letters like the ones that Members of Congress get. 

Can you walk us through those numbers? How many discrete 

comments did you get? And did your team, as well as the team at 

174 

HHS, go through them in appropriate detail to be reflected in the 

final output? 

Ms. TAGTOW. Absolutely. Thank you, Chairman Conaway, for the 

question. 

As a registered dietitian in public health nutrition, it is absolutely thrilling to see the level of interest in the Dietary Guidelines, 

and really an unprecedented time for the Dietary Guidelines. 

Just to reflect on the opportunities for public comment, during 

the 19 months in deliberation of the Dietary Guideline Advisory 

Committee, the public did have opportunity to provide response to 

the scientific committee during their deliberations. And then once 

the Dietary Guidelines Advisory Committee submitted their report, 

their set of recommendations to both departments, USDA and 

HHS, earlier this year, there was a subsequent public comment period of an additional 75 days. 

As a result of that, we had just over 29,000 comments submitted 

in response to the Dietary Guidelines Advisory Committee Scientific 

Report. And, yes, you are correct, a majority of them, at least 70 

to 75 percent of those public comments, were duplicative in nature. 

They were either form letters or in the ways of a petition and 

things. 

When we received those public comments through the 

www.dietaryguidelines.gov website, there was a thorough review by 

both agencies and a reposting of those public comments. So all of 

the public comments that were submitted are available at 

www.dietaryguidelines.gov. Very few of them were not posted due 

to inappropriate language and things like that. 

Both agencies are in the process of thoroughly reviewing all of 

the public comments and taking those into consideration while developing the 2015 Dietary Guidelines for Americans. And just to 

emphasize the role of science in this process, Mr. Chairman, we, of 

course, are very interested in those public comments that are supported by scientific justification, and so those are very helpful in 

moving forward with our process at hand. Thank you. 

The CHAIRMAN. Thank you. 

Ms. Rowe, would you discuss with us about the IG’s recent report 

about the need for FNS to strengthen SNAP management controls 

and the recommendations that were in that report. Where might 

we see you guys going with those recommendations should we have 

this hearing this time next year? 

Ms. ROWE. I would be happy to answer the question, Mr. Chairman. 

We have reviewed all of the OIG’s recommendations. There are 

some that we are still talking to OIG about because as we approach 

and look at those recommendations we have some disagreement on 

the findings. 

What we are moving forward to do is look very seriously at how 

states make a determination as to whether an error is, in fact, an 

error and not an error and what we need to do about that, whether 

it is something that the OIG has recommended, should there be a 

Federal review process rather than a state review process, should 

we have a two-tier process. So there are several issues that we are 

looking at, and we will have the final agreement on that report in 

the next 2 weeks. 

175 

The CHAIRMAN. I look forward to improvements for next year. As 

a CPA, we typically give those kind of reports to our clients when 

we do internal control reviews. I think it would be important for 

the taxpayers to be able to see, even if you disagree, that there is 

a rationale for doing it and just don’t ignore the report, but actually adopt those that need to be adopted and then take the other 

actions as you and your team agrees. 

With that, Ms. Fudge, for 4 minutes. 

Ms. FUDGE. Thank you very much, Mr. Chairman. And thank 

you all for being here today. 

Secretary Concannon, what is your opinion about the use of categorical eligibility and direct certification as options to increase efficiency and to streamline the application process for SNAP? And 

further, just as a point of clarification, just because someone is eligible, is categorically eligible, does not necessarily mean that they 

receive SNAP, is that accurate? 

Mr. CONCANNON. That is correct on both fronts, particularly that 

last one. Let me mention that 42 states avail themselves of categorical eligibility status. It simplifies the process for states and reduces the number of errors. 

The principal benefit to consumers, as well as to state agencies, 

is states have the option of disregarding the assets. The household 

must still meet the income test, but their assets are set aside. And 

the underlying rationale for that was, particularly during the recession, to not force families to exhaust their household resources 

while they might be unemployed or going through a difficult period. 

But I also should point out that historically—and I reflect on this 

in my own time as a state director—the area of eligibility determination most fraught with errors or mistakes is when state staff 

try to assess the value of certain assets. So it has actually contributed to the reduction in payment error rates as a result, but its ultimately benefit is it does simplify the process, it gives us better 

assurance of, in fact, the eligibility of the person, and it is an option that states have under law. 

Ms. FUDGE. Thank you very much. 

Administrator Rowe, the Congressional Budget Office has forecast a leveling off of SNAP enrollment and a decline of recipients. 

Can you just elaborate a bit on that and tell me what you foresee 

over the next 5 years? 

Ms. ROWE. Thank you for the question, Congresswoman. 

Yes, we do continue to see and anticipate a continued decline. We 

have seen somewhat of a decline right now as the economy has improved. We are seeing fewer people coming in to apply, but we are 

also seeing a reduction of those who are currently on the rolls. It 

is our anticipation that as the economy continues to improve, we 

will continue to see a reduction of participation in the SNAP program. 

But also as we get our employment and training programs into 

full gear, identifying job opportunities for individuals to move from 

the SNAP program into full employment. So we continue to anticipate a decline in the overall enrollment in the SNAP program. 

Ms. FUDGE. Thank you. 

Under Secretary, I want you to reiterate. I know you said it just 

briefly in your comments, and I know it is in your written testiVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00179 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
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mony. But I certainly hear an awful lot about we are spending 

more money and the numbers are not going down and they are 

never going to go down. I hear things about waste, fraud, and 

abuse. I want you to address it again for this Committee the small 

amount of waste, fraud, and abuse in this program, as well as the 

fact that the numbers actually are going down. 

Mr. CONCANNON. To the first question, the numbers are down by 

two million people from what I call a high water mark. They have 

gone down at the rate of about a million a year. I think most forecasts we predicted continued to be reduced. And I believe the latest 

forecast that I have seen shows by 2020 it would be in the high 

39+ million individuals across the country. 

On the question of the program integrity, meaning, one, are people who apply for the program, in fact, who they say they are and 

is their income properly reported, are they receiving the proper 

benefit, we have one of the lowest rates of payment error rates in 

the Federal Government. 

And on the question of fraud, the most serious abuse of the program in my view is trafficking the sale of benefits. We are very focused on that. That is 1.3 percent of the benefits. So a small percentage. But, in fact, when you apply that 1.3 percent, it is a large 

amount of money. So I don’t minimize it in any way. I am very focused on it. 

Ms. Rowe and her staff are very much focused on it. And we 

have been using and increasing not just the undercover people 

across the country, but data analytics where we look at the transaction amounts and the time of day and where the consumer lives 

versus the store. And as I mentioned, last year we took out 1,400 

stores permanently. Those owners are out for a lifetime, a number 

of them have been prosecuted, but even if they weren’t prosecuted 

they are out of the program for a lifetime. 

Ms. FUDGE. Thank you very, very much. 

I yield back, Mr. Chairman. 

The CHAIRMAN. The gentlelady yields back. 

Mr. Crawford, for 4 minutes. 

Mr. CRAWFORD. Thank you, Mr. Chairman. 

Thank you, Mr. Secretary and Administrators for being here. 

Ms. Rowe, my district is home to a large swath of the Delta region. And while the Delta is heavily agricultural, paradoxically we 

have some pretty serious issues as it relates to the low-income population and their access to healthy nutritious foods. I am proud of 

some of the work we have done on the farm bill that targeted this 

problem, such as expanding the Farmers’ Market Promotion Program, but I want to get a sense as to what your agency does specifically to improve access to nutritious foods in hard hit rural 

areas like the Delta, and how do you approach the unique challenges that rural areas like the Delta present that are much different from the challenges faced in heavily populated areas? 

Ms. ROWE. Thank you for the question. 

We have worked very closely with the state agency within the 

Department of Human Services within the State of Mississippi or 

in the Delta areas. We have worked with community-based organizations and others that create more access points that get more inVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00180 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
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formation out to individuals on what programs that are available 

and how they can access those programs. 

There have been a number of grant programs, some recently that 

we will be announcing in the next few weeks which will be focusing 

on farmers’ markets and SNAP participation. We have worked with 

Rural Development in rural housing developments to expand, for 

example, access to summer feeding opportunities. We have worked 

with schools to expand information and access to not only feeding 

opportunities or where they can go and have access to programs, 

but also healthy eating, healthy lifestyles, healthy nutrition. 

We have worked with farmers and we have expanded our work 

with farmers. Our regional office recently held meetings in the 

Delta area with a number of farmers to talk about opportunities for 

them to work with schools to sell new produce and make produce 

available to children in our schools. 

Mr. CRAWFORD. Thank you. One quick question. 

SNAP is a state-administered program but has heavy Federal 

oversight in how states operate their programs. Can you talk about 

your relationship with the states, and you mentioned that a little 

bit in your previous answer, but how that plays out during various 

times of the year? And how do you resolve differences in state 

plans or thoughts about what is within the scope of SNAP? 

Ms. ROWE. Through our regional offices, we work very closely 

with our states in planning their SNAP program and reviewing 

their SNAP program and providing technical assistance. It is a collaborative, cooperative working relationship. We try and make sure 

that as the state is developing its plans, that we are sharing with 

them best practices that may exist in other states that could improve both the administration of the program and access to the program. 

We continue to provide working sessions. We bring all of the 

state SNAP directors and others together to do technical assistance 

and to provide technical support. We do webinars. Our view is to 

work cooperatively with the state to ensure that we are reaching 

the largest population increasing participation. 

Mr. CRAWFORD. Do you keep a pretty open mind with respect to 

ideas that emanate from the states on how they can more efficiently administer programs? 

Ms. ROWE. Absolutely. The state understands their environment, 

what it takes in that state to make it work effectively, and we are 

always open to working with states in trying to achieve those objectives. 

Mr. CRAWFORD. Just real quick, can you give me an example of 

one state that may have jumped out and done something that was 

maybe a little bit unconventional but that you guys have decided 

was a good idea? 

Mr. CONCANNON. If I might jump in on that, we promote something with state agencies across the country that we refer to as 

business process reengineering, BPR, where we help pay for that— 

small consulting groups that come in and try to simplify the process so that they will actually put on a board literally every step of 

the way when a consumer comes in the front door. And the idea 

behind it is to cut down on some of the bureaucratic steps that are 

involved. 

178 

We have a program or a budget item that has been authorized, 

and relatively small by national standards, but it is referred to as 

a state exchange. When a state runs into a problem and we are 

aware of a state, let’s say Colorado or a state up in the Northeast, 

we can either bring the staff from the state agency in that state 

to Mississippi or to a state that is struggling with it, or conversely 

put people on a plane from that state and bring them up and say 

this is how it is done. 

The state exchange is one of the most powerful tools that we 

have. And states I know appreciate that because often state budgets don’t allow people to travel. They may just have a broad prohibition against travel out of state. And we think it is important for 

them to see this is how it is done effectively. 

Mr. CRAWFORD. BPR? 

Mr. CONCANNON. Business process reengineering. 

Mr. CRAWFORD. I yield back. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. McGovern, for 4 minutes. 

Mr. MCGOVERN. Thank you very much. 

Let me begin by expressing my gratitude to all of you for what 

you do and for the millions of people in this country who benefit 

from the work that you and your agencies do. The programs that 

you oversee represent the best of this country. And I think that one 

of the things that was said, you made this point that the number 

of people on the SNAP rolls is decreasing, but the reality is that 

there are still a lot of people on SNAP. And a lot of people on 

SNAP are working people because, quite frankly, they are working 

and they don’t earn a decent wage so they still qualify for government assistance. 

But there is a lot of talk in this Committee and in Congress 

about the need for more flexibility when it comes to SNAP. And I 

always worry that flexibility is a code word for block grants. That 

would be a terrible mistake and would lead to increasing hunger 

in this country. 

We already have a case study of what block granting SNAP looks 

like. It is in the Northern Mariana Islands. When Congressman 

Sablan was a Member of this Committee, he passionately advocated for full SNAP for all of his constituents. And right now we 

are seeing the shortcomings of block grants. The islands were devastated by a recent typhoon and thousands of residents are in need 

of food assistance. But with a fixed pot of money, the SNAP block 

grants simply can’t keep up with the demand. 

So can you talk a little bit about what we are learning from the 

situation in the Northern Mariana Islands right now, and what are 

the limitations of a block grant in cases of natural disasters or 

other emergency situations, and is this really the kind of flexibility 

that we ought to be expanding? 

Let me just say one final thing. If I have one critique of the program, it is that the benefit is not adequate to meet a family’s 

needs. When I go to food banks at the end of each month, a lot of 

the people that are in line are families who are on SNAP because 

their benefit has run out. Granted, the mood in this Congress is 

not going to expand SNAP. I wish it would. But we have to understand that this benefit is not adequate to meet the nutrition needs 

179 

of a family. I yield to you on that and on the issue of block granting. 

Mr. CONCANNON. Let me say I agree with you. I think in the food 

banks, the food pantries, that testimony may have come before the 

Subcommittee, but food banks across the country, food pantries, my 

wife volunteers at one at a church here in the District, toward the 

end of the month the numbers who come in for those suppers go 

way up because people, whether they are working or on fixed incomes, they run out of money. So that is a fact of life that we are 

very mindful of. 

On the question of block grants, to me, the most powerful evidence about the inadequacy of it at times of real change in the 

American economy, is what has occurred in the TANF or cash assistance program. For many years, I was a State Health and 

Human Services Commissioner. For most of those years when it 

was either called food stamps or later called the SNAP program, 

in the early years of SNAP about 30 percent of the households who 

were receiving food stamp benefits were also receiving cash assistance through the TANF program. 

Now we have on the current SNAP caseload, the percentage of 

households receiving cash benefits is in the single digit. It is six or 

seven percent. Even though we have just gone through from 2008 

to 2010 or 2011, you pick your years, the deepest recession since 

the Great Depression of the last century, and that is what accounts 

for the fact that even though Congress in 2008 changed the name 

of the food stamp program to the Supplemental Nutrition Assistance Program purposefully to say it should supplement, it should 

not be the only source of benefit, some 22 percent of the households 

now on SNAP have no other source of income whatsoever. 

So I have a real worry about the inability of block grants to respond to whether it is a natural disaster or a deep dive in the economy. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Thompson, for 4 minutes. 

Mr. THOMPSON. Mr. Chairman, thank you. Thanks to all of you 

for your service. 

Ms. Rowe, I wanted to continue to talk about SNAP. As we all 

know, it is a federally-funded state administered program, meaning 

the states are responsible for administering, being the boots on the 

ground basically of the SNAP program. They are the ones down on 

the ground making the program happen with FNS providing guidance and support. 

So my question I have, first one, in your budget request for Fiscal Year 2016 there was a request for 373 employees just for SNAP 

at the Federal level, in addition to overall nutrition program administration staff of nearly 1,000 employees. Now, the request is 

more than double the employees from 2013 when the program 

peaked at 47.6 million. As we just heard, thankfully, the need is 

coming down. So we should meet that need, no doubt about it, but 

it is good though when we see that need come down. 

And I know within testimony I hear a lot about technology and 

the recognition that we use technology for efficiency, we need to 

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sources. But this represents more than double the employees from 

2013 when the program peaked the demand for it. Back then, there 

were only 170 employees. Why the significant increase of needed 

employees for SNAP? 

Ms. ROWE. Most of that increase has been in our program integrity area. As the Under Secretary mentioned, we have organized 

and centralized our retail operations division so that we can be 

more effective and more efficient. Training of staff, individuals who 

can go out and we actually do undercover buys. We engage in review of lots more documents. We have expanded the number of documents that storeowners have to provide, particularly those that 

we identify that may be in high trafficking areas. 

So to be able to make sure that we are achieving the goals that 

we have set, we have set specific goals within our various program 

areas that we intend to achieve. We need the staff to make sure 

that we are properly implementing these programs and addressing 

the taxpayers’ issues of trafficking or fraud in our program. 

Mr. CONCANNON. Why don’t I jump in on that as well. A significant increase as well is the focus on employment and training. As 

was mentioned earlier, during the downturn in the recession, 40+ 

states were granted waivers around employment and training. In 

addition to what the farm bill or the Agricultural Act of 2014 provided to us, when I go out or when we go out to meet with states 

we urge them to do more on the employment and training side. 

And they get two categories of grants from us. They get 100 percent Federal funding, about $90 million nationally, and then they 

get several hundred million more. But that several hundred million 

more that is matched with state funds goes to roughly 10 or 11 

states. 

There are a handful of states that are very active in employment 

and training. The other states are not on the playing field so to 

speak. And so we have been very focused on urging those other 

states to say, look, there are opportunities in your state to help 

people. I am very mindful—it has come to my attention in a number of ways over the last year—we have people who have come out 

of the correctional system. And because they are not bondable or 

because they committed a felony maybe when they were 19 years 

of age they have trouble getting into the workforce. 

And so we have said to state agencies, you should use some of 

that employment and training money for folks who are in the 

SNAP program to say, what else can we do to help you with truck 

driver training or training in the food industry? Help them actually 

get into the economy in a constructive way. 

Mr. THOMPSON. I see my time has expired, but I certainly agree. 

I think anything that we can do to take these supports and make 

it a workforce development program that is a springboard toward 

greater opportunity for people. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. 

Mr. Scott, for 4 minutes. 

Mr. AUSTIN SCOTT of Georgia. Thank you, Mr. Chairman. I apologize for being late. I had a general in my office from my Air Force 

base. 

181 

I want to follow up on what you just mentioned, only because I 

have a situation back home I am working right now. A gentleman 

that was arrested when he was younger. He works full time now, 

he makes around $12 an hour, his wife doesn’t make quite that 

much, but they would normally qualify for food stamps. But because of his criminal record, even though he is a deacon in the 

church now and has no arrest or charges or anything in the last 

probably 10 years, is being told that he is not eligible, is that for 

the duration of his life that he would be prohibited from receiving 

the benefit? 

Mr. CONCANNON. I am familiar with the prohibition. And, unfortunately, that goes back to a law that was passed way back by 

Congress that said if you have a felony drug arrest you are not eligible for the, what was then the food stamp, now SNAP program, 

unless your state legislature takes an affirmative vote to overcome 

that. 

Now, 23 states across the country, the legislature, for example, 

Maryland near here and the District of Columbia would be two examples, they have taken votes to say, okay, you are still eligible if 

you meet the other income eligibility requirements. 

But Virginia, next door to us, if you have that same history, you 

are not eligible. So it depends. It is the state legislature that could 

pass a law that says we will affirmatively allow persons with prior 

felony drug arrests to participate. The State of Texas, I am not familiar with the details of it, but the legislature in Texas, just within the last month, has taken steps to allow certain prior felons with 

drug arrests—— 

Mr. AUSTIN SCOTT of Georgia. If I may, I just kind of wanted a 

yes or no, if I could, on that. 

But I am from Georgia, and I will look into the state law with 

regard to that. I assume that they could say if after 5 years you 

haven’t had another arrest or something along those lines then—— 

Mr. CONCANNON. The state legislature would have to approve it, 

but they could do that. 

Mr. AUSTIN SCOTT of Georgia. So my state is one of ten who received the SNAP pilot and just a couple quick questions on that. 

How are you working with the states on that, and what is your expectation, and when will we start to hear more about the actual 

implementation, and are some states further along than others. If 

you could just speak generally to that issue, I would appreciate it. 

Mr. CONCANNON. Yes, indeed. The pilots are, as Congress directed us, are diverse in terms of they are from different parts of 

the country. Some are work attachment right away. Some are more 

fuller assessments. Some are mandatory. Some are voluntarily. So 

there are a variety of strategies and approaches. We have hired 

through competitive process the top policy groups, research groups, 

in the country on outcomes, because at the end of the day, all of 

us, you want to know, we want to know, what works best. We are 

working with those states right now as they are gearing up to get 

their program set up. We expect by November, all ten of the 

projects will be established, and they will, because it is a, it requires a control group as well an experimental group. I mean, it 

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182 

tion of it starts in the spring. We are very much in dialogue and 

contact with the states. 

Now, apart from the pilot projects, states like Georgia can be 

doing even more in the traditional employment training program, 

and that is where I urge them to say you can talk to, like, Goodwill 

Industries. You can talk to Lutheran Services if it is in your area. 

The food banks themselves are doing a lot of training. I was at one 

in Albuquerque where they are training people for long distance 

truck driving because there is a shortage of truck drivers in that 

part of the country. 

So you don’t even have to wait for the full stepping on the gas 

of those ten projects. You can do more, and we are more than 

happy to work with states. We keep bringing this up to them to 

say do more on the training E&T, or the employment and training 

side. 

Mr. AUSTIN SCOTT of Georgia. Thank you all for your service. I 

think the key is finding that balance and access and integrity in 

this program as in any of the programs that we have. And with 

that, Mr. Chairman, I will yield the remaining 46 seconds that I 

don’t have. 

The CHAIRMAN. The gentleman’s time has already expired. Mr. 

Yoho has graciously allowed Mrs. Walorski to go next, so Mrs. 

Walorski is recognized for 4 minutes, Chairwoman of the Subcommittee on Nutrition. 

Mrs. WALORSKI. Thank you, Mr. Chairman. Thank you, Representative Yoho. Administrator Rowe, I so much appreciate all of 

you being here, and I am the Chairwoman of the Subcommittee, 

and we have looked at past, present and future when it comes to 

SNAP. We have talked about the economic ladder and really assisting people climbing up into this economic ladder, and we need to 

be clear, though, just one little item of interest here. When we talk 

about SNAP, and we talk about the decrease, we also have to remember that since 2009, or you alluded to before, 2008, 2009 with 

the recession and the stimulus policy changes, that is where the 81 

percent increase in SNAP came from. 

So while we are looking at a decrease of single digits, we are 

talking about an increase of 81 percent, and I just want to make 

sure we are all talking about the same thing here. I believe we can 

be good stewards of the American taxpayer money. I really do. And 

we can assist people climbing up an economic ladder. And with 

that, Administrator Rowe, I am concerned that we are looking at 

17 programs, 14 in one area, and the other in the areas of aging, 

three other programs. What is the USDA doing to address duplication and duplicative efforts on all those programs together? 

Ms. ROWE. Well, we spend a great deal of time at the beginning 

of every fiscal year taking a look and strategically planning what 

our priorities are going to be and how those programs are going to 

work together, and whether we are going to target certain programs in certain areas or how we are going to increase participation in programs in certain states, as the Under Secretary has 

talked about, the employment and training initiative. So the way 

in which we manage is through a strategic planning process. That 

process allows us to identify our goals, our priorities, the tasks and 

183 

steps that we need to undertake to achieve those goals and priorities. 

We have a major dashboard that is available in each one of our 

priority areas that we report on every month, so we are looking 

and we are constantly looking at how well we are integrating the 

programs from one particular area with the needs in another. 

Mrs. WALORSKI. I have a further question there. So does FNS 

look at data points? For example, we are looking at kind of like a 

holistic look at people. Does FNS have the ability to track wellbeing, economic security, as the recipients go through the program, 

or are you just simply tracking numbers served? 

Ms. ROWE. We are talking both. We are tracking well-being. 

Through much of the research in our operations and policy division; 

we look at changes in behavior; we are looking at increased access 

as well as nutrition changes in people’s behavior. So we look on 

both sides of the question, how well we are administering the program, and is it making a difference? Are we moving the dial as it 

relates to people’s well-being? 

Mrs. WALORSKI. Okay. I appreciate that. My final question is 

this: We work with a lot of outside agencies as you do as well with 

these international feeding programs like Feed the Children. One 

of the things we had chatted with them about is they were telling 

us about their outcome measures that they use in every country 

around the world. My question is, the data points that we just 

talked about, helps better discern what approaches work and don’t 

work. It certainly would help us in Congress, as we have the role 

of oversight, in understanding are people really making it, or are 

we just rolling numbers and filling slots on those numbers. It gives 

us a better picture of oversight. Does FNS have that similar kind 

of outcome measures, and I guess if not, why not—and they are 

certainly a standard. 

Ms. ROWE. As a matter of fact, I am very familiar with what 

Feed the Children is doing. We have had earlier conversations with 

them about how successful their approach has been. We do have 

outcome measures. We continue to get better at defining what we 

are looking for, what we want to measure, and what outcomes we 

are looking at. We can provide you with an overview of how we go 

about measuring that—— 

Mrs. WALORSKI. I appreciate that. 

Ms. ROWE.—and looking at the outcomes in all of our programs. 

Mrs. WALORSKI. That would be great. Thanks. I yield back, Mr. 

Chairman. 

The CHAIRMAN. Mr. Yoho, 4 minutes. 

Mr. YOHO. Thank you, Mr. Chairman. And, panel, I appreciate 

you being here. You took my question. That was great. You did. 

You got me the answer I was looking for about the 81 percent increase and the slow dropdown. What do you think accounts for 

that? Is it the quality of jobs out in the marketplace that people 

just aren’t getting enough high paying jobs? I know everybody 

wants to raise the minimum wage, but in some industries, you 

can’t raise the minimum wage to that level to get them off of this. 

We need quality jobs to come back here, and that addresses the 

bigger picture about Tax Codes and things like that, incentives for 

manufacturers to come back. 

184 

Mr. CONCANNON. Just the increase, which was significant, about 2⁄3, the way we generally characterize it, 2⁄3 of it was directly attributable to what was going on in the economy; and about 1⁄3 of it was 

associated with states simplifying the process, places like California, where if you move from one county to another, you had to 

reapply all over again. It was like moving from one state to another. So we got rid of some of those barriers in that regard. That 

accounts for about 1⁄3. Two-thirds are really, to your point and your 

question, associated with the jobs. 

I mentioned that in my testimony, that, again, my own experience that for all those years, we have a 50 percent increase right 

now, from 20+ percent of the households in the food stamp era that 

had earnings, to now over 30 percent that involves over 42 percent 

of the recipients. So we have a much higher rate of people with 

earnings. You say how can this be, then, that we still have them 

on the program? It is that they are either part-time jobs, or they 

are in the lowest quartile. They are very poorly paid. 

And it is a challenge. That is part of our effort in employment 

and training to say what can we do to help position people so they 

can move up in the workforce? I remember this from my state days, 

the old dictum that he or she who has a job is more likely to be 

the person to get a job. So how can we help people move up? 

Mr. YOHO. I think that is one of the big concerns, and one of our 

goals is to get people in, up and out. Secretary Concannon, you had 

talked about the waste, fraud, and abuse was mainly in the trafficking of EBT cards, if I understood you correctly? 

Mr. CONCANNON. It is partly, it is multiple use of EBT cards. 

And mainly what I was talking about was trafficking, that is when 

I sell my card. 

Mr. YOHO. I bring this up because we had USAID in here, and 

they were talking about the 2.5 million Syrian refugees getting 

EBT cards. Through USAID, they said that right here. 

Mr. CONCANNON. They might through USAID. They can’t get 

EBT cards. 

Mr. YOHO. I would like to talk to you about that, but the point 

is, they said what they were doing was biometrics where they had 

a picture ID on there and some other form of biometrics, and it 

really cut that down as far as the illegal use of them. In this country, I asked him if he could elaborate if that would be a good thing 

here. Would that prevent the trafficking of cards, if there was a 

picture ID on them or somebody had to show a picture ID to use 

those or it was tied to some kind of—— 

Mr. CONCANNON. Unfortunately it wouldn’t, because it takes two 

to tango, as I described it; and these are fraudulent store owners 

who then would, they are indifferent to whether your picture is on 

the card. They know perfectly well if they are trafficking in cards. 

They don’t care who owned the card. 

Mr. YOHO. I am glad to hear you say that when you catch them, 

they are out permanently. 

Mr. CONCANNON. For a lifetime. 

Mr. YOHO. That is something that we need to advertise, and I 

commend you for doing that. With that, Mr. Chairman, I yield 

back. Thank you. 

185 

The CHAIRMAN. The gentleman yields back. Mr. Allen, for 4 minutes. 

Mr. ALLEN. Thank you, Mr. Chairman, and thank you panel, and 

just to elaborate on my fellow Georgian, Congressman Scott’s question, to make sure I understood this correctly, on the E&T training, 

getting these people into the workforce, because everywhere I go in 

my district, and I know we are blessed in our district, but there 

are a lot of jobs available. Of course, they require skills. As I understand it, you said the states can ramp up this program on their 

own? 

Mr. CONCANNON. Yes, they can. Again, there are two, this is the 

traditional, what I call the core employment and training program. 

States across the country receive $90 million and 100 percent state 

money. If I recall now, and I will have to confirm this, but I believe 

the State of Georgia received about $3 million, or $3.5 million, and 

100 percent Federal money on E&T. But then over and above that, 

they can go to Goodwill Industries—I often point them in that direction—or Lutheran Services, Catholic Charities, the agencies in 

the area, and to the extent, it can’t be—volunteer time can’t be appropriated, but if they have paid staff time that is being used to 

train staff recipients, that—50 percent of that can be matched. 

And I have seen examples of it. I mentioned the example in the 

Albuquerque food bank that I was at probably 8 weeks ago, where 

they are training long distance truck drivers because that is the 

shortage in the State of New Mexico. 

Mr. ALLEN. We have the same thing. The state administrators 

have been made aware of the fact that they can ramp this thing 

up. 

Mr. CONCANNON. Every time I meet with them, I pitch that to 

say there is an opportunity for you. 

Mr. ALLEN. Good. Great. Ms. Tagtow, I guess this is for the benefit of my wife, but she is a nutrition animal or whatever; but she 

really knows a lot about it. She would love to advise folks on what 

they buy in a grocery store. I think she would volunteer her time 

to do that, to be honest with you, because she is so adamant about 

what you eat is what you are. And she sees a lot of abuse from the 

SNAP program as far as that is concerned. Folks don’t know exactly what to buy, and she just thinks that with some advice, that 

they could not only get the necessary food they need, but they could 

eat very nutritiously which would then cut down on thing like Type 

2 diabetes and things like that which is an epidemic in Georgia. 

Any comments on that? 

Ms. TAGTOW. I will start, and then I will refer it back to the 

Under Secretary. Excellent question. One of the charges of the Center for Nutrition Policy and Promotion, first and foremost, is to promote the Dietary Guidelines for Americans. And what we are seeing is that the average quality of diet, and the Under Secretary’s 

earlier remarks about the healthy eating index, we actually measure the average diet quality of Americans; and any guesses as to 

what our average intake index is? It is 57 on a scale of 1 to 100. 

Mr. ALLEN. How would you relate that into average calories per 

day? 

Ms. TAGTOW. What I was going to say is, we know the research 

does provide us with sufficient evidence that if we can start shiftVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00189 Fmt 6601 Sfmt 6601 P:\DOCS\114-26\96269.TXT BRIAN
186 

ing people to healthier diets, to a diet that is more closely aligned 

to the Dietary Guidelines, we can significantly reduce the relative 

risk of developing diet-related chronic diseases in this country. So 

that is the answer to the first question. 

As far as educating and informing and better supporting nutrition attitude, knowledge, and behavior of SNAP participants, I am 

going to shift that over to the Under Secretary. 

Mr. ALLEN. I am out of time, so one of my colleagues may be able 

to address that question as well. I yield back, Mr. Chairman. 

The CHAIRMAN. The gentleman yields. Mr. Kelly, for 4 minutes. 

Mr. KELLY. Mr. Secretary, if you would address that briefly, and 

then let me get to my questions, please. 

Mr. CONCANNON. Thank you very much, both Members. We have 

a major opportunity in that regard called SNAP Ed, or it is nutrition education. To the Member’s comments, we are in the middle 

of a crisis in this country in terms of public health with the problems of obesity; and it translates into work opportunities, or a lack 

thereof, health care costs, quality of life. So we are very focused on 

that, and we promote something called MyPlate, not only in 

schools, but in food banks, in the farmers’ markets where we are 

encouraging them, but we have also let, in the last year, a contract 

with the Duke University and UNC Chapel Hill to use the research 

of behavioral economists. We have a lot of nutritionists with us. We 

have tremendous nutrition capacity and potency. We know a lot 

less about what actually motivates somebody to reach for a certain 

product in the store. 

So we are very focused on saying what else can we learn that actually influences people to more consistently buy healthier foods? 

Some of it obviously relates to where you live. I live in the D.C. 

area out in the Maryland suburbs where there are a lot of supermarkets around me, but on the other side of the Anacostia River 

here, there is probably one supermarket. So where you live makes 

a difference, rural or urban; but we need to do a better job, and 

we are focused on trying to say what else can we do to educate people. And we are hopeful that what we are doing in schools, and in 

Georgia by the way—I was just in Savannah—is doing great work 

in the schools to promote healthier eating. And my hope and expectation is these school students as they grow up into adulthood, will 

have been socialized to eat healthier, and that is one of the best 

things we can do. 

Mr. KELLY. Thank you, again, Mr. Chairman, and panel for being 

here. My question is, I understand that it is just not—I know there 

is a lot of fraud, or there is some fraud that goes on. And like many 

things in life, the few punish not only the end-user, but they punish your department, and they punish us all because of what a few 

do. That being said, I understand that. What initiatives are you 

doing or working with the states to make sure that we reduce the 

amount of fraud and that we continue to focus on that so that those 

few don’t disparage all of us by the way that they act? 

Mr. CONCANNON. Exactly. I appreciate the question. As I mentioned earlier, to me the most serious—first of all, states and counties where they administer it, pay special attention on the front 

end. So the USAID reference that was made here, that just isn’t 

the case. You have to be a U.S. citizen and you have to prove it 

187 

in a variety of ways. We don’t have anything near that in terms 

of fake people showing up and getting SNAP benefits. My concern 

is on the other end. Once they get the card, we have this 1.3 percent of trafficking. It takes as I say, two to tango. These are stores, 

mostly small stores, rarely, rarely a supermarket. These are small 

stores. 

Thankfully in the farm bill that you passed, you gave us more 

authority to increase the requirement on those small stores in 

terms of their food variety, because I am hopeful that it will result 

in fewer of those stores that have the ads of liquor, cigarettes, and 

something else. That is where our problems come in so many cases. 

One, we are very focused on data analytics. We have undercover 

people, but we catch most of those stores by looking at redemption 

data electronically. We are much more astute that way. We also 

have hired a consulting group, Accenture. We have sent them 

around to states to say we took out these stores last year. Now we 

want you to analyze the actual redemption data to see what are 

some of the associations. One of the associations we found, for example, in the first state we went to was multiple cards. If I am in 

a household and I keep calling the state saying I have lost my card, 

our alert goes up to say wait a minute, what is going on here? 

Another would be redemption amounts late at night in round figures. I don’t want to say too many of the variables and tip people 

off, but there are ways to identify, we are redeploying, as Audrey 

Rowe mentioned, redeploying our people into the high-risk places 

in the country. As I mentioned, the chair picked up as well, when 

you traffick, sell benefits, you as a store or a store owner, you are 

out for a lifetime. 

Mr. KELLY. Thank you, Mr. Chairman. I yield back the balance 

of my time that I don’t have. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Abraham, 

for 4 minutes. 

Mr. ABRAHAM. Thank you, Mr. Chairman. Let’s continue, Under 

Secretary, on this fraud issue because we all are in districts that 

have more people on the program than I am sure they desire or we 

desire, because of this poor economy that we have had for the last 

few years is driving that. The 1.3 percentage, convert that on the 

fraud issue. Convert that into dollar amounts for me. 

Mr. CONCANNON. That is 1.3 of about $75 billion, so it is close 

to $1 billion a year. 

Mr. ABRAHAM. Wow. Walk me through on this exchange or this 

fraud issue, if somebody obtained a card fraudulently, and they 

take it to one of the stores that you just referenced, the under-theradar-type store, can they present that card and buy something of 

low value and get the cash back? How does the fraud issue, how 

do they take that card and fraudulently use it? 

Mr. CONCANNON. Typically what happens, we refer to it as trafficking. In other words, let’s say I had $100 benefit on this card. 

I go to the store and either I tell the store owner that I have $100 

on this card. If you will give me $50 in cash, I will give you my 

card, or you can run the card as though I bought $100 in food here. 

That is referred to as trafficking. That never literally does not happen 2⁄10 of 1 percent times in supermarkets. There is too much at 

risk. It happens in more than 96 or 97 percent of the cases in small 

188 

stores. It is a minority of those small stores, but that is where we 

go after them. 

And I have been meeting with states to say we are taking stores 

out, that I referenced it earlier, 1,400 stores permanently out last 

year, over 10,000 stores in the last 10 years permanently out of the 

program. I have said to states, when we take a store out, you need 

to go back through the redemption history in that store for the previous 6 months. Now, not everybody who redeemed benefits there 

is trafficking, but you need to look at that in order to get the other 

side of the equation here. 

Mr. ABRAHAM. Thank you. Let me switch gears just a little bit. 

I will stay with you, Mr. Secretary, or anybody. I, in my district, 

as I am sure everybody has these farmers’ markets. You guys have 

made it possible for them to benefit the SNAP customer, but most 

of them are hooked up wireless. They are paying a pretty good premium to play the game, so to speak. And I know in the farm bill 

with the FINI there was money dedicated to breach that technology 

gap. What is going on today? What are you guys doing to facilitate 

that, make it better, make it so these farmers’ markets can work 

efficiently? 

Mr. CONCANNON. We are very committed to that. I just met with 

the National Association of Farmers Markets when I was down in 

Savannah, Georgia here, just within the last week at their national 

meeting. As I mentioned in my testimony, we are up to 6,400 farmers’ markets, direct marketing farmers. We still have a ways to go. 

On record, there are like 8,300 or 8,400 farmers’ markets across 

the country. We have been working with them to keep up with 

technology. We provided the technology devices to close to 2,000 of 

those markets, but there is also, as you know, a monthly charge, 

processing fees. 

So we are very much engaged with them to say are there less 

expensive ways to meet that processing charge for the farmers’ 

markets, and we have simplified the application process for them. 

When we first started here 6 years, 7 years ago, farmers’ markets 

had to fill in the same application as a supermarket; and they are 

a lot less formal. 

These are growers, farmers. They don’t have the time for that. 

We simplified that. So we are very committed to it because it 

speaks to an earlier question. We believe farmers’ markets are a 

way to nudge people into healthier eating, but also keeps those dollars in the local economy. That is important to us. 

Mr. ABRAHAM. Thank you. I yield back, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. Mrs. Hartzler, 

for 4 minutes. 

Mrs. HARTZLER. Thank you, Mr. Chairman, as a former nutrition 

teacher, I really appreciate the Dietary Guidelines that you all 

come out with and have for years. It started off as the basic four 

group. I am showing my age, basic four, and then we went to the 

food pyramid, and now MyPlate; and so I am interested, certainly, 

in seeing what you are going to come up with here pretty soon for 

us moving forward. 

I was concerned, though, with when the advisory committee 

came out with their recommendations. I have a copy of that report 

here. I can hardly pick it up; it is so heavy because it is far larger 

189 

than in the past. One of the main reasons for that is that it seems 

like, to me, it goes far beyond just your basic scientific nutrition 

recommendations of what should be in the diet, and it is still called 

Dietary Guidelines. So as you know, I authored and headed up a letter that 70 of my 

colleagues signed on to expressing our concerns with some of these 

things that goes beyond such as including sustainability recommendations and physical activity behavior change, and food environment and environmental impact, and making recommendations on what we eat based on environmental impact and things 

rather than sound science and what really should go into our bodies as far as nutrition. 

And so I am looking forward to meeting with Secretary Vilsack 

next month and visiting with him. I did appreciate his letter back 

saying that he believes as far as what you are going to come out 

with, it is going to stay and color within the lines. So I appreciate 

that. I appreciate your being responsive to our concerns. 

But, Director Tagtow, I see that you are a dietitian, so you seem 

like a perfect person to help lead this effort. I was just wondering 

with these concerns, what steps will the USDA take during the selection process of the next Dietary Guidelines Advisory Committee 

member selection process to ensure that the next advisory committee will stick to their Congressional charter and focus solely on 

providing useful health and nutritional information to all Americans? 

Ms. TAGTOW. Thank you, Congresswoman Hartzler. Excellent 

questions. Thank you for your letter expressing your concerns as 

well. I first want to make very clear that the Dietary Guideline Advisory Committee is an independent entity overseen by FACA, Federal Advisory Committee Act, and they provided simply recommendations to both HHS and USDA. And we are taking those 

recommendations into consideration along with the wide array of 

public comments that we received, as well as agency comments as 

well. And so looking forward, I don’t want to speculate as to the 

procedures for 2020; but, again, just emphasizing that they provided a very independent, science-based review of the evidence and 

provided recommendations back to both agencies for consideration 

in developing the 2015 Dietary Guidelines. 

Mrs. HARTZLER. As it relates to the law that you referenced 

which establishes the committee, do you see any need for ways that 

we could help in changing the law to help it make sure that the 

people on the advisory committee in the future give a report that 

is just strictly dealing with nutrition? 

Ms. TAGTOW. I might defer that to the Under Secretary. As far 

as changing the law, perhaps not. The use of a Federal advisory 

committee is not determined by the law. The law doesn’t dictate 

that we actually use an independent body to provide a thorough review of the scientific evidence and provide recommendations back 

to both agencies. The law does specifically state that what we develop, what the two agencies put forth, is based on the preponderance of the current scientific and medical knowledge. It is released 

within 5 years. It addresses food-based recommendations for ages 

2 and above, and we need to do it every 5 years. 

Mrs. HARTZLER. Thank you very much. 

190 

The CHAIRMAN. The gentlelady’s time has expired, and I now recognize the gentleman who I skipped twice rudely. I apologize to 

you. You can ask for 5 minutes if you want it. 

Mr. ASHFORD. Thank you, Mr. Chairman. I am speechless actually. I just wanted to follow up on what Representative Hartzler 

was talking about. If there is one issue I hear about in Omaha 

from our schools, we have one entity that provides all of the school 

meals for one public high school and all of the parochial schools; 

and then we have a few others that provide the meals to the other 

public schools, so it is not a massively large group of providers. 

And essentially, what the refrain is, and I am sorry if I am repeating myself, or repeating what others have said, but the refrain 

really is we are concerned that the young people simply won’t eat 

what we are giving them, and that is a real concern, and this is 

given to me by people I know that have been doing this for 25, 30 

years. And nutrition is their concern. They are nutritionists. They 

just want the kids to be able to get a meal that they can eat or 

will eat. I am sure you have answered this, but would you mind 

just, Under Secretary? 

Mr. CONCANNON. I am happy to receive the question. As I mentioned in my testimony, when I travel out to states, I always try 

to go to a school. I just did down in Savannah within the last 10 

days. And I do so because it is the best part of the job, but also 

to see how kids are doing and to talk to teachers. There are real 

challenges in the meal pattern because remember, it is the first 

time there are menu changes, science-based, in more than almost 

2 decades, so it represented a big change; and I don’t, in any way, 

underestimate the challenge it is, and particularly so for children 

coming into the school system, especially older kids. High school 

kids, in the best of times, may be challenging around diet. 

But we have been working consistently with schools to say what 

else can we do to help you? Ninety-five percent of American schools 

are meeting these new standards. We are not satisfied with that 

in this sense. We know that it is a challenge for school food service 

personnel, so we have a number of programs. One we have something called Team Up, where we worked with the University of 

Mississippi with their resource staff, but we brought school systems 

together with those schools that are successfully implementing, 

pair them up with a similarly-sized school where they are struggling to say this is what we are doing to make sure that the kids 

are consuming those foods, because having a healthy menu is only 

part of it. We want to make sure it is consumed. 

The second area that we are working on is we have a group up 

at Cornell University in New York, in Ithaca, that is working on 

what they call the Healthy Lunchroom and where they recommend 

to schools, they are in about 30,000 schools across the U.S. It is 

free to the school or to the school system. They have a whole set 

of ideas, low-cost ideas, that can result in students more likely consuming the food. As an example, with younger children, one of my 

favorite aspects, and I have seen it all over the country, they add 

an adjective or a noun. So they will say championship carrots, Xray vision carrots. They add words, and young kids see that and 

they think, man, this is for me. 

Mr. ASHFORD. That might help me to eat carrots, I don’t know. 

191 

Mr. CONCANNON. But the idea to use behavioral economics, 

where they place the salad bar, or for high schools, how they design the cafeteria to make it look more like a restaurant that kids 

would look for. 

Mr. ASHFORD. Thank you, and I would like to loop some of our 

people into your team because to the points that have been made, 

your point, these are very good people that are doing it; they are 

nutritionists, they get it. I think they are more concerned about the 

consumption part and the kids not having enough. 

Mr. CONCANNON. We will definitely follow-up with Omaha, you 

mentioned. 

Mr. ASHFORD. Definitely. The other point, and I made it to the 

last panel, but just to focus on it again, our SNAP authorized farmers, we have a lot of farmers in Nebraska still, and our SNAP authorized farmer numbers have gone from 750 to 6,400 to do from 

farm to market. It is an exceptional program. I have been listening 

today about the farm bill, and I wasn’t here obviously when it was 

passed; but it sounds like a remarkable piece of work by this Committee and the Congress, the Chairman and the Department to 

really do some amazing things. The pilot projects, there are ten of 

them or 12 of them. 

Mr. CONCANNON. Yes. Farmers’ markets. FINI grants, the grants 

that are out there to really encourage more, to facilitate more use 

of farmers’ markets, doubling up bucks. I was up in Rochester, 

New York, recently, and they have a farmers’ markets that has 

been around since 1904. It is a large farmers’ market, 300 stalls 

on a weekend; but they do almost $900,000 a year in SNAP benefits there. I always look at the price of the food—— 

Mr. ASHFORD. I am over my time, but I thank you for your work, 

and obviously for this Committee in getting the farm bill where it 

is, so thank you. 

Mr. CONCANNON. It was a great bill. 

The CHAIRMAN. The gentleman’s time has expired. Mr. Davis, for 

4 minutes. 

Mr. DAVIS. Thank you, Mr. Chairman. Sorry I am late. Just arrived at the airport and had the chance to come down here and get 

the tail end of the discussion on the school nutrition program. This 

is an issue that Secretary Vilsack has sat in your seat numerous 

times, and I have brought it up. I have some concerns with the reauthorization process, with the sodium level requirements, and 

with the sheer fact that many of my constituents who attend school 

are not even a part of the school nutrition program any longer because some of the rural school districts in my district in central Illinois have pulled out because what used to be a profitable part of 

their portfolio is now costing them upwards, as in the case of Monticello, Illinois, upwards of $100,000 a year because kids that can 

pay are not eating food. 

So it was interesting to hear you talk about the placements of 

salad bars, other tips and procedures; but the sheer fact is we have 

a lot more plate waste. You have less kids, in my district—you may 

shake your head, but in my district, I am hearing from superintendents that the plate waste is going up. I am hearing that less 

kids are eating the school lunch, and that there is a concern as we 

see new requirements go forth, that we are going to see more 

192 

school districts, especially in areas like mine, pull out; and I don’t 

want to see that. And can you, and I don’t mean to make you repeat yourself, but can you let me know some tips of what we can 

do to help? 

Mr. CONCANNON. Yes, indeed, and I appreciate the candor in 

your question frankly. We are never happy to hear that schools 

have dropped out of the program because it is, by intent, for all 

American students, the numbers of noontime lunch participants in 

the School Lunch Program went down by 1,300,000. It has stabilized now. At the same time it was going down, the numbers of 

students participating in the National Breakfast Program went 

from 10.3 million to 14 million. So we are actually serving more 

meals to kids right now across the United States. I recognize that 

some systems had challenges with it, so that as I mentioned earlier, we have a great partnership with the University of Mississippi. 

Senator Cochran, championed the development of a center down 

there that really matches schools across the country that are struggling to say, okay, let us match you up with a school that has similar demographics, because it probably is going to be very useful to 

match the Dallas independent school district with a rural school 

district in another state. We are more than happy to provide that 

kind of technical assistance. 

Actually I am confident that we are going to see additional 

growth this year in the meals participation. The significant reduction was lost mostly in that paid meal category, and part of that 

was everybody I work with, every school nutritionist, has said in 

their schools in the past, whenever they would raise the price on 

the paid meal, they would lose participation. And by the way, the 

National School Lunch Meals Program was losing participation 

going back to 2008. So it didn’t just start with the new meals pattern. 

Mr. DAVIS. Well, I can only address this as somebody who has 

listened to many superintendents in my district and as a parent 

who coaches football, and I have heard kids talk about how they 

are hungry when they leave school and they are coming to practice. 

So I guess my request to you is the same request I offer to Secretary Vilsack every time he is here. Come talk to my district. 

Come talk to the folks who are telling me that this is a problem 

in their school districts. Secretary Vilsack was in Champaign, Illinois, just I believe last week; and that is an area that is a center 

point of most of the concerns with my superintendents. I wish we 

could have had a chance to get him in front of those superintendents, and I would ask that you do that for him at some point, and 

I would love to work with you to make that happen. 

Mr. CONCANNON. I will personally, or I will make sure our Chicago office, but I will try to personally go up there to meet with 

them as well. 

Mr. DAVIS. I know my time has expired, but your Chicago office 

and your regional office has participated in a round table with me, 

but I want somebody from D.C. to come out and hear from my constituents. So with that, thank you, Chairman. My time is expired. 

The CHAIRMAN. The gentleman’s time has expired. Everybody’s 

talked. Thank you, Under Secretary and Ms. Rowe and Ms. 

193 

Tagtow. I appreciate it. I recognize it takes a significant amount 

of time for you to be here. Just a couple of points. I am encouraged 

greatly about your comments about data mining and the emphasis 

there. I am familiar with a program that we have at Charleston 

State University that does a great deal of data mining, and just 

looking for out of ordinary conduct that doesn’t make any sense. So 

reliance on that will improve the system as well. 

A 1⁄10 of a percent improvement in the error rate is $75 million, 

and so it is a meaningful number. You talked about one of your 

training programs in which you had about $45 million that you 

used to help training, a 1⁄10 of percent improvement in the error 

rate, so it is a big deal; and I know you have committed to it and 

I appreciate that. 

I want to offer up for the record my thanks to Secretary Vilsack 

and his efforts at putting all this together the last 2 days. It didn’t 

happen just by accident. The Under Secretaries and Administrators 

and Chiefs across the system pitched in and made this work. The 

staff sitting behind you and all the other staff that were here all 

yesterday and today sitting behind their bosses made that happen. 

My team is here as well, and I want to make sure they know how 

much I appreciate them doing all they did. This is a historic 2 

days, quite frankly, to have every one of those Department agencies come up here and pitch their wares and make themselves 

available for criticism or comments or bragging, or whatever it was, 

our team is better educated today as a result of your efforts over 

the last few days. We will figure out ways to maybe not necessarily 

do everybody all in the 2 days, but nevertheless to replicate this 

kind of process where Members, new and old, have a chance to 

visit with Administrators and the leadership of these organizations 

other than Secretary Vilsack. 

I suspect he will appreciate sharing the Congressional load of it 

as well. We are better off as a result of all of the testimony from 

all of the program areas, and let me just officially thank you so 

very, very much for making that happen, and everybody behind 

you who really made it happen and all my team who really, really 

made it happen, so thank you all very much. 

I also thank the membership. I did not anticipate the participation we would have. I know it is a little thin right now, but we 

have had great participation. Yesterday was a day in which most 

folks would have been back home working the district or mowing 

the lawn as Rodney was doing. So it is a good exercise. 

Under the rules of the Committee, today’s hearing will remain 

open for 10 calendar days to receive additional material, supplementary written responses from witnesses to any questions posed 

by a Member. This hearing on the Committee of Agriculture is now 

adjourned. Thank you. 

[Whereupon, at 2:43 p.m., the Committee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

195 

SUBMITTED QUESTIONS

Response from Hon. Lisa Mensah, Under Secretary, Rural Development, 

U.S. Department of Agriculture 

Question Submitted by Hon. Eric A. ‘‘Rick’’ Crawford, a Representative in Congress 

from Arkansas 

Question. There has been long standing bipartisan support for a government role 

in expanding broadband services to rural America. Such access is essential to educating our young and for participating in a 21st century economy, but I am concerned with the slow pace of progress towards that goal. Last year, Congress authorized $690 million for the Rural Utilities Service (RUS) to bring broadband services 

to rural America, yet only about a third of that amount was loaned out. Despite 

these shared goals, it is my understanding that RUS continues to place unrealistic 

barriers before applicants—in some cases the barriers erected seem to contradict 

both the law and your own regulations. For example, I have heard from an Arkansas phone company, Walnut Hill, which operates in one of the poorest rural areas 

of the country, the Mississippi Delta. They tell me that RUS has indicated that it 

will not refinance existing phone company debt even if it is needed in order for a 

construction loan to move forward. Yet the law and your own regulations indicate 

that such refinancing is permitted when it is ‘‘incidental and necessary’’ to furnishing broadband services. I would appreciate your looking into this application 

and seeing if this can be resolved. 

Answer. RUS continues to support the mission of providing new and improved 

telecommunications services in rural areas. In fiscal year (FY) 2015, RUS obligated 

approximately 1⁄3 of the $690 million in funding appropriated for this purpose One 

reason for this low obligation level is that there has been low, but steadily increasing, demand for the RUS Broadband loans since 2011. 

In meeting the mission of providing new and improved telecommunications services in rural areas, RUS must ensure that loans are being made in conformance 

with the statute and regulations. With regard to the Walnut Hill example, the applicant requested funding to support refinancing outstanding debt from another lender. 

Under existing regulations and in accordance with statute, RUS may consider refinancing outstanding loans, but only if those loans were for something RUS could 

have originally financed such as construction of telecommunications or broadband 

facilities. In this case, the debt that they were asking RUS to refinance was originally held by the parent company, Townes Telecommunications. RUS cannot refinance debt of other entities. The application did not provide evidence that any of 

this debt was associated with construction improvements at Walnut Hill. As such 

the debt was ineligible for refinancing. RUS has continued to express our willingness to consider a loan for system improvements, subject to agreement by the other 

lender to share a lien with RUS for loan security purposes. 

Response from Hon. Edward M. Avalos, Under Secretary, Marketing and 

Regulatory Programs, U.S. Department of Agriculture 

Question Submitted by Hon. Bob Goodlatte, a Representative in Congress from Virginia 

Question. Avian Flu: I appreciate all the hard work your agency has done with 

its HPAI emergency response. While I know there were some hiccups in preparations, I know you’ve all worked hard to improve. What lessons have you learned in 

this response that will assist us if we see further outbreaks this fall? Are we prepared to deal with another large outbreak of the magnitude that we saw last spring? 

Answer. 

Response from Anne L. Alonzo, J.D., Administrator, Agricultural Marketing 

Service, U.S. Department of Agriculture 

Question Submitted by Hon. David Rouzer, a Representative in Congress from North 

Carolina 

Question. Administrator Anne Alonzo, I have heard from growers in my district 

that there are inconsistencies with policies at the Tobacco Administrative Grading 

Service (TAGS). Can you please provide an analysis of how TAGS sets the price and 

details on how TAGS ensures that USDA standards are being strictly applied? 

Answer. Tobacco Administrative Grading Services (TAGS) is a private entity created by the Burley Tobacco Growers Cooperative Association and a third party consultant organization, AgWin, with input from USDA’s Risk Management Agency 

(RMA) and Agricultural Marketing Services (AMS). TAGS provides administrative 

services by collecting and notifying AMS electronically of producers’ name, farm 

number, number of bales, location, weight, grading confirmation number, and reVerDate Mar 15 2010 14:09 Feb 09, 2016 Jkt 041481 PO 00000 Frm 00199 Fmt 6621 Sfmt 6621 P:\DOCS\114-26\96269.TXT BRIAN
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quest of scheduled date of grading service. AMS tobacco grades are used for quality 

loss adjustment for the tobacco crop insurance program. TAGS itself does not set 

prices for tobacco crop insurance, nor is it involved in the process of making quality 

adjustments or payments to the producers through the RMA crop insurance program. AMS does not have an agreement with TAGS. The Agency has a business/ 

billing agreement with the Burley Tobacco Growers Cooperative Association. This 

is not covered in the Tobacco Inspection Act. 

AMS is solely responsible for grading tobacco, and these AMS tobacco grades are 

the only grades that can be used for the crop insurance program. AMS acts as an 

independent third-party. In doing so, AMS uses USDA certified tobacco graders to 

ensure that tobacco standards are applied properly, consistently, and in accordance 

with USDA Official Grade Standards (published at 7 CFR Part 29). AMS has no 

authority over the operations, policies, or pricing of TAGS itself, nor does AMS have 

authority over RMA’s crop insurance program, the determination of quality loss adjustments, or payments made to tobacco producers or their representatives. For its 

services, AMS charges user fees based on the total volume of tobacco submitted. 

After grading the tobacco, AMS provides the grades to RMA electronically who in 

turn provides them to the crop insurance companies for their respective policies. 

AMS is committed to ensuring that tobacco grades are applied fairly and uniformly across the program. Tobacco grading operations are managed by AMS personnel without any input from outside entities. AMS personnel utilize USDA grade 

standards to assess the quality of the tobacco and provide supervision of the services 

requested. Random samples are collected periodically and stored in a secured storage unit at the AMS facility in Raleigh, North Carolina. These samples are examined by AMS supervisors for accuracy, which contributes toward each tobacco grader’s performance appraisal. In addition, supervisors make random visits to grading 

locations during heavy grading periods to observe procedures, provide guidance, and 

ensure quality determinations. 

Response from Kevin Shea, Administrator, Animal and Plant Health Inspection Service, U.S. Department of Agriculture 

Questions Submitted by Hon. David Rouzer, a Representative in Congress from 

North Carolina 

Question 1. Administrator Kevin Shea, the challenges that APHIS has faced in 

controlling this devastating outbreak of High Pathogenic Avian Influenza is alarming to our animal agriculture industry. Is APHIS prepared to deal with an even 

more devastating outbreak of a disease such as foot-and-mouth disease (FMD) that 

affects multiple species? Can you assure this Committee that you have the resources 

and tools necessary to control an outbreak of FMD? 

Answer. Safeguarding against significant animal diseases, including FMD, is vital 

to protecting industry, producers, and consumers. It remains a top priority for 

APHIS and USDA, and we have rigorous emergency procedures in place. 

Our plan to protect the country starts with our existing regulatory import controls 

that includes overlapping safeguards to reduce the risk of the disease coming from 

imports of agricultural products to an extremely low level. It includes extensive surveillance to detect any presence of the disease, should it make its way to our shores, 

as well as sanitary/phytosanitary requirements to which exports must adhere. If disease is suspected, we investigate the case immediately. 

In the extremely rare chance that FMD is confirmed, our first priority would be 

to immediately contain and stamp out the disease through depopulation and movement restrictions. We would work closely with our state and industry partners to 

pool resources to expand our ability to respond to and eradicate this disease. 

In the event of an outbreak, USDA would be able to use its emergency transfer 

authority under the Animal Health Protection Act to obtain funding to combat the 

disease, just as it did with the outbreak of HPAI. 

Recently, APHIS has begun discussions with our partners about the use of vaccines in an emergency FMD response. While the response to an FMD detection 

would depend on several factors, vaccination is a key tool to have available should 

FMD enter the country. Accordingly, we maintain a supply of about 25 million doses 

of vaccine across multiple strains in the North American Vaccine Bank. However, 

this amount of vaccine on hand is not sufficient to respond to a large outbreak of 

the disease, if we must make the policy decision to use vaccine. This would limit 

the tools we have available to reduce disease spread. 

Estimates of the amount of vaccine needed to address an outbreak of FMD in the 

United States vary. APHIS has set a preliminary goal of increasing to 35–40 million 

doses of vaccine across multiple strains. APHIS’ 2016 appropriations request included $1.2 million for the North American Vaccine Bank. This amount is a continuation of baseline funding and would maintain the vaccine bank at its current size. 

197 

Given the mismatch between estimates of vaccine need and what APHIS currently has access to, the Agency has had discussions with industry about how best 

to address the gaps in vaccine coverage. Those discussions have included a range 

of alternatives, including Federal-industry cost-sharing, to fund efforts to eliminate 

the shortage, and those conversations with industry are ongoing. APHIS and industry recognize the need for an increased vaccine stock, and we are committed to 

working with our partners to identify solutions. 

Question 2. Administrator Kevin Shea, this year, the appropriations bill did not 

allot extra funding for the CARB (Combating Antibiotic Resistant Bacteria) initiative. Can you clarify your plans in support of the research portion of the CARB initiative? Are you anticipating cuts to other programs to fund CARB? 

Answer. Antimicrobial resistance (AMR) is considered a serious health threat to 

both animals and humans. To address this threat the FY 2016 Budget for USDA 

included a total of $77 million (+$57 million), of which $66 million (an increase of 

$47 million) is for the Research, Education and Economics (REE) Mission Area and 

$10.7 million (+$10 million for surveillance) is for APHIS. The enacted FY 2016 

Budget for USDA is $25 million for REE for intramural and extramural research 

and $730,000 for APHIS for surveillance. 

USDA intends to continue to provide science-based, quantitative information 

about antibiotic drug use and resistance in food animals and their relationship to 

livestock management practices through existing work and available funding. This 

funding severely restricts our capability to implement initiatives described in the 

USDA Antimicrobial Resistance (AMR) Action Plan and Combating Antibiotic Resistant Bacteria (CARB) National Strategy. That plan may be found here: http:// 

www.usda.gov/documents/usda-antimicrobial-resistance-action-plan.pdf. 

USDA’s AMR Action Plan takes a voluntary, comprehensive, systems approach for 

surveillance, research, education, extension, and outreach. This approach would include the development of partnerships with stakeholders and work through the existing programs and mission of APHIS (as well our sister agencies at USDA). 

USDA, along with FDA, has continued to gather input from stakeholders to further refine plans for on-farm antibiotic use data collection contained in the AMR Action plan. Although no additional funding was provided in FY 2016, USDA has 

again requested additional funding for FY 2017 to conduct this voluntary on-farm 

monitoring of antibiotic-use practices and antibiotic resistance. 

USDA will also solicit applications for competitive extramural funding to support 

research, education, and extension/outreach through the Antimicrobial Resistance 

Initiative program in FY 2016. This will continue to add to the portfolio of the AMR 

program that began in FY 2012. Funded scientists are generating and will continue 

to obtain science-based data, knowledge, and information to be used by relevant 

stakeholders to inform policy and other decision-making activities related to antibiotic stewardship and across the food chain. 

Response from Alfred V. Almanza, Deputy Under Secretary, Food Safety, 

U.S. Department of Agriculture 

Question Submitted by Hon. David Rouzer, a Representative in Congress from North 

Carolina 

Question. Deputy Under Secretary Alfred Almanza, Congressman Lucas and I 

sent you a letter earlier this year regarding several U.S. processing plants and storage facilities that were barred from exporting pork to China last summer. Can you 

please update us on FSIS requirements for exports to China and is China still barring any U.S. facilities that have been approved by the guidelines of the 

Ractopamine Residue Program or the Never Fed Beta-Agonist Program? 

Answer. The Food Safety and Inspection Service (FSIS) is working with China to 

get the fifteen establishments delisted by China reinstated as soon as possible, and 

is engaged in a thorough review of the circumstances that led to the establishments 

being suspended. 

FSIS has emphasized to Chinese health officials that all raw U.S. pork products 

exported to China are produced either under the Never Fed Beta Agonist Program 

or a Ractopamine Free Residue Program. Both of these programs are administered 

by the United States Department of Agriculture’s Agricultural Marketing Service, 

and any company seeking to export to China must participate in one of these two 

programs before FSIS will certify these products. The companies have taken corrective actions that FSIS has verified, and FSIS has requested that the establishments 

be allowed to resume exporting to China. 

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