AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED 

AGENCIES APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND 

DRUG ADMINISTRATION, AND RELATED AGENCIES 

ROSA L. DELAURO, Connecticut, Chairwoman 

MAURICE D. HINCHEY, New York 

SAM FARR, California 

ALLEN BOYD, Florida 

SANFORD D. BISHOP, JR., Georgia 

MARCY KAPTUR, Ohio 

JESSE L. JACKSON, JR., Illinois 

STEVEN R. ROTHMAN, New Jersey 

JACK KINGSTON, Georgia 

TOM LATHAM, Iowa 

JO ANN EMERSON, Missouri 

RAY LAHOOD, Illinois 

RODNEY ALEXANDER, Louisiana 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

MARTHA FOLEY, LESLIE BARRACK, JASON WELLER, and MATT SMITH, 

Staff Assistants 

PART 5 

Page 

Natural Resources Conservation Service .......................... 1 

Marketing and Regulatory Programs ................................ 307 

( 

Printed for the use of the Committee on Appropriations 


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PART 5—AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, 

AND RELATED AGENCIES APPROPRIATIONS FOR 2009 


jbell on PROD1PC69 with HEARING
AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED 

AGENCIES APPROPRIATIONS FOR 2009 

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND 

DRUG ADMINISTRATION, AND RELATED AGENCIES 

ROSA L. DELAURO, Connecticut, Chairwoman 

MAURICE D. HINCHEY, New York 

SAM FARR, California 

ALLEN BOYD, Florida 

SANFORD D. BISHOP, JR., Georgia 

MARCY KAPTUR, Ohio 

JESSE L. JACKSON, JR., Illinois 

STEVEN R. ROTHMAN, New Jersey 

JACK KINGSTON, Georgia 

TOM LATHAM, Iowa 

JO ANN EMERSON, Missouri 

RAY LAHOOD, Illinois 

RODNEY ALEXANDER, Louisiana 

NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full Committee, and Mr. Lewis, as Ranking 

Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. 

MARTHA FOLEY, LESLIE BARRACK, JASON WELLER, and MATT SMITH, 

Staff Assistants 

PART 5 

Page 

Natural Resources Conservation Service .......................... 1 

Marketing and Regulatory Programs ................................ 307 

( 

U.S. GOVERNMENT PRINTING OFFICE 

48–543 WASHINGTON : 2009 


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COMMITTEE ON APPROPRIATIONS 

DAVID R. OBEY, Wisconsin, Chairman 

JOHN P. MURTHA, Pennsylvania 

NORMAN D. DICKS, Washington 

ALAN B. MOLLOHAN, West Virginia 

MARCY KAPTUR, Ohio 

PETER J. VISCLOSKY, Indiana 

NITA M. LOWEY, New York 

JOSE ́ E. SERRANO, New York 

ROSA L. DELAURO, Connecticut 

JAMES P. MORAN, Virginia 

JOHN W. OLVER, Massachusetts 

ED PASTOR, Arizona 

DAVID E. PRICE, North Carolina 

CHET EDWARDS, Texas 

ROBERT E. ‘‘BUD’’ CRAMER, JR., Alabama 

PATRICK J. KENNEDY, Rhode Island 

MAURICE D. HINCHEY, New York 

LUCILLE ROYBAL-ALLARD, California 

SAM FARR, California 

JESSE L. JACKSON, JR., Illinois 

CAROLYN C. KILPATRICK, Michigan 

ALLEN BOYD, Florida 

CHAKA FATTAH, Pennsylvania 

STEVEN R. ROTHMAN, New Jersey 

SANFORD D. BISHOP, JR., Georgia 

MARION BERRY, Arkansas 

BARBARA LEE, California 

TOM UDALL, New Mexico 

ADAM SCHIFF, California 

MICHAEL HONDA, California 

BETTY MCCOLLUM, Minnesota 

STEVE ISRAEL, New York 

TIM RYAN, Ohio 

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland 

BEN CHANDLER, Kentucky 

DEBBIE WASSERMAN SCHULTZ, Florida 

CIRO RODRIGUEZ, Texas 

JERRY LEWIS, California 

C. W. BILL YOUNG, Florida 

RALPH REGULA, Ohio 

HAROLD ROGERS, Kentucky 

FRANK R. WOLF, Virginia 

JAMES T. WALSH, New York 

DAVID L. HOBSON, Ohio 

JOE KNOLLENBERG, Michigan 

JACK KINGSTON, Georgia 

RODNEY P. FRELINGHUYSEN, New Jersey 

TODD TIAHRT, Kansas 

ZACH WAMP, Tennessee 

TOM LATHAM, Iowa 

ROBERT B. ADERHOLT, Alabama 

JO ANN EMERSON, Missouri 

KAY GRANGER, Texas 

JOHN E. PETERSON, Pennsylvania 

VIRGIL H. GOODE, JR., Virginia 

RAY LAHOOD, Illinois 

DAVE WELDON, Florida 

MICHAEL K. SIMPSON, Idaho 

JOHN ABNEY CULBERSON, Texas 

MARK STEVEN KIRK, Illinois 

ANDER CRENSHAW, Florida 

DENNIS R. REHBERG, Montana 

JOHN R. CARTER, Texas 

RODNEY ALEXANDER, Louisiana 

KEN CALVERT, California 

JO BONNER, Alabama 

ROB NABORS, Clerk and Staff Director 

(II)


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(1) 

AGRICULTURE, RURAL DEVELOPMENT, FOOD 

AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 

2009 

THURSDAY, APRIL 3, 2008. 

NATURAL RESOURCES CONSERVATION SERVICE 

WITNESSES 

MARK REY, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT, U.S. DEPARTMENT OF AGRICULTURE 

ARLEN LANCASTER, CHIEF, NATURAL RESOURCES CONSERVATION 

SERVICE, U.S. DEPARTMENT OF AGRICULTURE 

JOHN DONDERO, DIRECTOR, BUDGET PLANNING AND ANALYSIS DIVISION, NATIONAL RESOURCES CONSERVATION SERVICE, U.S. DEPARTMENT OF AGRICULTURE 

W. SCOTT STEELE, BUDGET OFFICE, U.S. DEPARTMENT OF AGRICULTURE 

Ms. DELAURO. The committee is called to order. 

Thank you. And let me welcome everyone here today. I want to 

welcome all of our guests. 

Mr. Steele, Mr. Lancaster, Mr. Dondero, very nice to have you 

with us today. 

Mr. Secretary, I am very pleased to see you. We are finally getting this off the ground. What was it, the 14th of February, that 

we had to reschedule? 

Mr. REY. Valentine’s Day. 

Ms. DELAURO. I am eager to get started, as I am sure you are, 

with today’s hearing. But before we do, I want to recognize and 

thank the Department and NRCS for their valuable contributions 

that you are making to help the Nation’s farmers and ranchers to 

protect the land and to enhance the environment. 

NRCS is tasked with a huge and important job, to address a host 

of natural resource concerns on millions of acres of land across the 

country. And the benefits from NRCS’s work are two-fold: not only 

help the individual farmer and the rancher, but also enhances the 

broader environment that neighboring communities depend on for 

their health and their quality of life. 

In that context, I am concerned about the administration’s proposals again this year to cut back heavily on conservation efforts 

that are so important to rural America. And I am concerned with 

the NRCS’s ability to be able to effectively deliver conservation. 

This budget’s severe cuts to the agency’s capabilities only increase 

those concerns. 


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The 2009 budget funds NRCS discretionary programs at $800.7 million. This is about $136 million, or 14.5 percent, less than available in 2008. The Resource Conservation and Development Program, for example, whose goal it is to improve the capability of 

local government and nonprofit organizations in rural areas to plan 

and implement resource conservation and developments, is targeted for elimination. The move could affect 375 councils currently 

serving 85 percent of U.S. counties and more than 77 percent of the 

U.S. population. The budget also zeros out funds for the Grazing 

Lands Conservation Initiative and the watershed and flood-prevention operations as well. 

I am also concerned by the administration’s claims that the 

maintenance, repair and operation of the aging dams are a local responsibility, as justification for its move to cut watershed rehabilitation by 70 percent from 2008 to $6 million. You only have to travel throughout the agricultural areas in my own region in New England to understand what watershed work done by NRCS means. I 

think the American people, no matter where they live, have good 

reason to be concerned about what this budget may mean for the 

water resources that are so critical to their own effective agricultural practices. 

By requiring States and local authorities to suddenly take up 

these conservation responsibilities at the same time that Federal 

assistance is decreasing, the administration seems to be saying 

that if our rural communities want to continue thriving, then it 

will be up to them to put up the funds. Considering the very real 

and complex hardships that rural America faces today, I have to 

wonder about the logic behind that thinking. I have to wonder 

whether the NRCS budget undermines the conservation priorities 

this administration has outlined in the new farm bill. 

We have an obligation to our citizens and their communities to 

do better. The stewardship of our lands affects us all every day and 

will affect our children for years to come. The smart decisions that 

we make today will pay dividends well into the future. 

Under Secretary Rey, your team, I thank you for being here 

today. I look forward to your testimony and to hearing your answers to these questions and others from the subcommittee this 

morning, and understanding that knowing that we do want to work 

with you to confront the challenges of the agency in the weeks and 

months and the years ahead. Thank you very, very much. 

Mr. Kingston isn’t here. Mrs. Emerson. 

Mr. Alexander was first? 

Mr. Alexander, do you have an opening statement? 

Thank you. Thank you for being here. 

Let me ask you then, Under Secretary Rey, if you would begin 

your testimony. 

And you all understand that the testimony is part of the record, 

so I will ask you to summarize in any way that you choose. Thank 

you. 

MR. REY’S OPENING STATEMENT

Mr. REY. Thank you. I am pleased to begin, and I will summarize. And let me thank you for your ongoing support and that of 

the Subcommittee of voluntary conservation of working lands, 


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which enables American farmers and ranchers to achieve abundant 

agricultural production while simultaneously protecting our Nation’s valuable natural resources. 

At the end of fiscal year 2007, over 208 million acres across the 

Nation were enrolled in one or the other of USDA’s conservation 

programs. That is an area of land larger than the entire National 

Forest System, which is the other agency that I am involved with. 

Nearly 150 million acres were under contract through the Environmental Quality Incentives Program, and almost 37 million acres 

were enrolled in the Conservation Reserve Program. 

You will see proposals in the President’s fiscal year 2009 budget 

request for NRCS to produce savings in both mandatory and discretionary accounts. These savings will ensure the agency can continue to fulfill its critical mission of helping people help the land 

through the provision of conservation technical and planning assistance, as well as the delivery of farm bill programs. 

For the complete picture concerning our proposals, the President’s budget should be viewed in concert with the administration’s 

2007 farm bill proposal, which seeks to add $775 million to farm 

bill conservation programs in fiscal year 2009. As a result, the fiscal year 2009 budget request for NRCS provides over $3.4 billion 

in total funding. Of this total, $800.7 million is in discretionary 

funds and $2.6 billion is in mandatory funds, including $1.05 billion for the Environmental Quality Incentives Program. The President’s fiscal year 2009 budget also proposes $181.5 million for the Wetlands Reserve Program, which is the principal vehicle for the President’s wetlands initiative. The fiscal year 2009 program funding level and number of acres to be enrolled will be established in the new farm bill. A new farm bill is critical to raising 

acreage caps on the Wetlands Reserve Program and, for that matter, the Grasslands Reserve Program, as well as funding other conservation programs. A simple extension of the 2002 farm bill will 

accomplish none of those objectives and will leave roughly $5 billion in conservation spending on the table. 

Conservation Operations is the agency’s core discretionary program and the foundation for the Department’s conservation efforts 

with State and local partners. Conservation Operations, such as 

planning and technical assistance and soil and snow surveying, 

provide the support needed to successfully implement related farm 

bill programs. 

We are requesting a funding level of $794.8 million for the Conservation Operations program in fiscal year 2009. The administration’s farm bill proposal also recommended increasing mandatory 

conservation funding by $7.8 billion over the 10-year baseline, a 

significant and needed investment in natural resources conservation and management. 

We also proposed streamlining and consolidating certain programs to make them more efficient and effective as well as easier 

for our customers to use. We remain committed to working with 

Congress on the enactment of the new farm bill in the very near 

future. 

The Nation can be confident in increasing its investment in 

working lands conservation because of NRCS’s great strides in improving its accountability and performance measures. The agency 


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is maximizing technology to enhance transparency in its reporting 

systems and to make NRCS program information more accessible 

to citizens. 

For example, since 2005, we have released four Web-based energy estimators for tillage, nitrogen fertilizer application, irrigation 

and animal housing. Each tool estimates energy savings realized 

under various management scenarios relevant to the producer’s operation, management choice and location. To date, the energy 

awareness Web site has received over 3 million hits in a little over 

a year and a half. 

In fiscal year 2007, NRCS completed a prototype for the nitrogen 

training tool and will be validating the model on various water 

quality and trading projects in Maryland and Ohio. The nitrogen 

trading tool is a Web-based model that measures the changes in nitrogen losses based on changed management practices and calculates nitrogen credits available for water quality trading projects. 

Producers can use the tool to explore different agronomic scenarios 

and the associated nitrogen surpluses they may want to trade in 

the marketplace. 

But you don’t have to take just my word for it that the NRCS 

is working hard to make conservation easier. A recent report from 

the Federal Consulting Group indicated that overall satisfaction 

with NRCS programs was typically higher than for the Federal 

Government sector as a whole. But the results based on American 

Customer Satisfaction Index Surveys point to NRCS staff and technical assistance as strengths the agency should continue to leverage in delivering services to its customers. 

In closing, I believe the President’s fiscal year 2009 budget request reflects sound policy and the administration’s confidence in 

NRCS’s ability to effectively support land owners and other partners in putting conservation on the ground. In concert with a new 

farm bill, it will prepare the agency to meet future challenges while 

fulfilling its traditional missions. 

That concludes my summary, and I will turn to—— 

[The information follows:] 


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Ms. DELAURO. I understand, Chief Lancaster, that you would 

like to make some remarks as well. So I will recognize you for your 

testimony. 

MR. LANCASTER’S TESTIMONY

Mr. LANCASTER. Thank you. Good afternoon, Madam Chairwoman and members of the subcommittee. Thank you for the opportunity to appear before you today and, again, for your strong 

support, the subcommittee’s strong support for conservation and 

our mission at NRCS. 

My full written testimony has been submitted for the record. 

Before I begin, I also want to indicate it is my pleasure to introduce Mr. John Dondero, our new Director of Budget Planning and 

Analysis, who will provide assistance during this hearing and 

throughout this budget cycle and future budget cycles. 

You may be interested to learn that, in addition to his many 

other qualities, John is a native of Connecticut and alumni of the 

University of Connecticut. 

Ms. DELAURO. Where in Connecticut? 

Mr. DONDERO. Litchfield County. 

Ms. DELAURO. I know it. 

Mr. LANCASTER. And before we look forward to the fiscal year 

2009 budget, I would like to bring to your attention some of the 

past year’s achievements in cooperative conservation work that, although done primarily in private means, yields substantial benefits 

for all land owners. 

In fiscal year 2007, NRCS provided technical assistance to more 

than 1 million customers, enabling farmers and ranchers to treat 

over 47 million acres of working lands and more effectively management water resources, enhance water and air quality, improve 

soils and increase wildlife habitat. 

In 2007, NRCS, in concert with valued partners, helped producers develop over 5,100 comprehensive nutrient management 

plans, provided site-specific soils information to over 1 million 

users through our Internet-based Web Soil Survey, and issued 

more than 12,000 water supply forecasts. In addition, we utilized 

over 1 million volunteer hours, with an estimated value of $19 million, and signed agreements with 300 newly certified technical 

service providers. 

As we look to fiscal year 2009 and beyond, we will continue to 

fine-tune our business tools and practices, solidify progress with 

partners, farmers and ranchers, and ensure all potential gains for 

conservation are realized. 

An important priority for me has been to make conservation easier for our customers and for our employees. We have streamlined 

the conservation application process, developed new decision tools 

to calculate the benefits of conservation, and implemented the Customer Service Tool Kit. As a result, we developed 25 percent more 

conservation plans in 2007 than in 2006. 

We know we must also prepare ourselves to meet new challenges, including those presented by rapid changes in science, technology, regulations and demographics of our customer base. We 

have outlined a 5-year investment strategy for technology, and we 


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continue to execute our overarching strategic plan and the related 

human capital strategic plan. 

Finally, we are building the science case for conservation. We 

know we must prove to you, our partners, land owners and taxpayers, that good environmental practices are good investments as 

well as compatible with good economic performance for producers. 

The Conservation Effects Assessment Project, or CEAP, is designed to help us do just that. CEAP is a multi-agency effort to 

quantify the environmental benefits associated with conservation 

practices. We anticipate this summer the first release of CEAP 

data and recommendations that will help us direct programs and 

practices where they will do the most good and better enable us to 

tie conservation expenditures to specific outcomes. 

As we all know, two-thirds of the contiguous United States is 

crop land, ranch land, pasture land, and privately owned industrial 

forest land. With Conservation Operations and other programs, 

NRCS and its partners cooperate to get conservation on the 

ground, thus helping private land owners conserve landscapes, increase agricultural productivity, improve the environment and enhance the quality of life. 

The heart of our efforts to assist private land owners is our Conservation Operations. The President’s fiscal year 2009 budget request for Conservation Operations proposes a funding level of 

$794.8 million, which includes $680.8 million for Conservation 

Technical Assistance, $92.2 million for Soil Surveys, $10.8 million 

for Snow Surveys, and $10.9 million for the 27 Plant Materials 

Centers. We also request $5.9 million for the Watershed Rehabilitation Program. 

As was detailed in full in my submitted testimony, we do not request more funding for Watershed and Flood Prevention Operations and its related planning components, the RC&D Program, 

the Healthy Forest Reserve Program or the Agricultural Management Assistance Program. 

The administration’s budget proposes $1.05 billion for the Environmental Quality Incentives Program, $360 million for the Conservation Security Program, funding for the Wetlands Reserve Program to bring the total enrollment to the 2.275–million-acre cap 

authorized by the 2002 farm bill, and $97 million for the Farm and 

Ranch Lands Protection Program. 

As Under Secretary Rey mentioned, the President’s conservation 

budget should be viewed in concert with the administration’s farm 

bill proposal and includes $775 million that is not included in the 

agency’s current budget that I have just detailed. 

Madam Chairman, members of the committee, with your ongoing 

support and the commitment and stewardship of America’s private 

land owners, we look forward to a more productive land and 

healthy environment in 2009 and beyond. I thank you again for the 

opportunity to appear before you, and I would be happy to answer 

any questions you may have. 

[The information follows:] 


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Ms. DELAURO. Thank you very much. 

And I want to thank you both for your testimony. 

And let me begin with the mention of the farm bill. As we will 

consider how USDA will deliver a new farm bill, I would like to 

focus on your proposal for natural resources conservation. 

BUDGET REDUCTIONS

It appears the President’s request is out of alignment with the 

rhetoric of the administration. At the very time the administration 

has proposed and Congress is considering an expanded conservation title in the farm bill, your budget cuts a total of $136 million 

and a little over 1,400 staff years from NRCS in 2009. And that 

is across the country. 

I know that, in aggregate, the numbers include a number of programs that the budget eliminates that do not directly impact the 

delivery of a farm bill program. So, just looking at the conservation 

operations account, of the main technical assistance account that 

funds the field staff to work with land owners to prepare them for 

participating in the farm bill programs, your budget appears to 

slash 690 staff years, or almost 10 percent of the workforce. When 

you look at the number of staff supported by farm bill program dollars, your budget assumes another cut of 253 staff years, or 7 percent of the workforce. By my count, your budget eliminates almost 

1,000 staff years that either directly or indirectly work on the delivery of farm bill conservation programs. 

In light of the budget and the upcoming reauthorization of the 

farm bill, we are left with two conclusions, at least in my mind: Either land owners and producers will experience worse customer 

service, longer delays for technical assistance, and lower-quality 

conservation planning, or NRCS will be forced to shave even more 

farm bill funding off the top of the various programs, such as 

EQIP, to pay for staffing costs. That means less money for producers and actual on-the-ground conservation. Ultimately, your 

budget is a back-door cut in the farm bill’s conservation programs. 

So when I line up the Department’s rhetoric and the promises for 

conservation, especially the goals for successfully implementing a 

new farm bill with an expanded conservation title, I look at it and 

I am dismayed. I am confused by the incongruity. 

So, Mr. Secretary, if you can explain how the budget supports 

conservation when it cuts, in 1 year, over 1,400 staff or almost 12 

percent of your workforce from your lead conservation agency, what 

do you estimate will be the on-the-ground impact of the staffing 

cuts, in terms of wait times for assistance and the application backlog? And how did the staffing cuts comport with your human capital strategic plan? 

Mr. REY. I think the important thing here is to look at the farm 

bill proposal in concert with the budget proposal, as part of the 

large increase in conservation spending that we have proposed in 

the farm bill. We have proposed $775 million for technical assistance, which would support roughly another 1,600 staff years, to implement farm bill programs. So, you know, that is the context in 

which these proposals were made. 

And the objective of that is to try to make the farm bill programs 

more self-supporting, in terms of their draw on NRCS staff time. 


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Obviously, when you are juggling two roles, the farm bill and the— 

you have greater opportunity for one of them to fall on the ground. 

But I think what we have proposed, in its full context, is fairly 

described as a significant increase in conservation spending. And, 

yes, we would have to get a new farm bill for that to work. I have 

already acknowledged that. 

Ms. DELAURO. I understand. And you understand as well, because we—you know, we have been talking about a number of the 

programs, not just your agency but others, who have put a lot of 

the eggs in the farm bill basket. This has not been an easy ride 

for the farm bill, as I think you would concur. 

We do not know what is going to come out of the farm bill. We 

know we have, you know, deadlines and extensions, deadlines and 

extensions. We also are pretty sophisticated in understanding that 

you don’t get everything that you want, and there are cuts and are 

always cuts, so there will be an impact, there will be an impact on 

the budget. 

And that context, quite honestly—and I am not just singling you 

out, Mr. Secretary. Almost every agency that has come up that 

talks about the farm bill doesn’t come up with a contingency plan 

for ‘‘what if,’’ with either cutbacks or, you know—I don’t want to 

even say doesn’t happen, but a cutback. Let me leave it at that. 

Mr. REY. Right. 

Ms. DELAURO. So what is the contingency? Will we see a formal 

budget amendment reflecting any discretionary changes needed 

after the farm bill enactment? And if it is significantly delayed, 

what is the impact on your operations, 2008 and 2009? And based 

on the House- and Senate-passed versions, which program changes 

or new initiatives would most impact your budget? 

Mr. REY. We are pretty comfortable with the broad discussion 

that is occurring right now between the House and the Senate conferees, that, if there is a new farm bill, that it will be close enough 

to what the administration has proposed in the conservation area 

that we will obviously have to make some adjustments but they 

won’t be dramatic. If there is not a new farm bill, if there is rather 

an extension of the 2002 bill, then we will have to take a harder 

look at what we have proposed. 

I guess the best news in all of that is that we will probably know 

the answer to that question relatively shortly, with enough time to 

work with you to readjust some of the discretionary accounts, taking into account what is finally arrived at as a result of the deliberations that the House and Senate are currently engaged in on 

the farm bill. 

But we think, at this point, at this moment in time—and, of 

course, that may be a brief moment, because the discussions are 

ongoing—we think we are looking at a conservation package in 

broad terms that isn’t too far off what the administration proposed. 

Ms. DELAURO. My time is up; it was a couple of minutes ago. 

And I will just say, I want to be optimistic, as well. I have heard 

that there will be cuts in conservation, in nutrition and in other 

areas, that everything is going to take a cut. My hope is—because 

when we would produce the farm bill in the House and I had an 

opportunity to work with that, as a number of my colleagues on 

this committee did, we were specifically concerned about conservaVerDate Nov 24 2008 00:59 Apr 23, 2009 Jkt 048543 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 E:\HR\OC\A543P2.XXX A543P2

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tion and other areas. So I don’t want to see it cut that much. But 

I think we have to take, in short order, a very hard look at what 

this means in terms of the cuts that you are proposing and the cuts 

that may be mandated for us, given where this farm bill comes out. 

Mr. REY. I think that is fair. And we would be happy to work 

with the subcommittee on this. 

Ms. DELAURO. Mr. Alexander. 

Mr. ALEXANDER. I yield to Mrs. Emerson. 

Ms. DELAURO. Mrs. Emerson. 

Mrs. EMERSON. Thanks so much, Mr. Alexander. 

Thank you so much for being here, you all. 

Thanks, Madam Chair. 

CERTIFICATION OF FOREST PRODUCTS

Under Secretary Rey, I hope you forgive me. I just need to venture into forestry a teeny bit here. I want to take advantage of your 

being here. I hope that is okay with you. Something that has recently been brought to my attention, I want to ask you about it. 

As you know and as we have talked, the Missouri domestic timber market is declining, and many of our producers are looking for 

new ways to increase their exports. And they keep running up 

against what is called—this increasing need for accreditation from 

the Forest Stewardship Council, the FSC. I understand it is a voluntary and private international organization that certifies wood 

products as being produced in an environmentally sustainable way. 

And, obviously, you are familiar with that. 

Here is my concern, and here is the concern across the board, not 

only of the forest products industry but the Forest Service folks 

themselves: that with this FSC logo being virtually a prerequisite 

now to sales in some markets, particularly Europe, number one, 

there is some difference between the standards among countries. In 

other words, France might have one standard, and Germany might 

have one, and the Netherlands might have another. And also perhaps even throughout regions of a country, the standards are not 

uniform, number one. 

Number two, I had the list of all of the working group members 

of the FSC for our region and the country. And I am looking at this 

accreditation standard, and not only do I not see one person from 

the Forest Service, which is the largest land owner in my district 

and probably in the State, I don’t see any Missouri foresters, any 

State foresters. I don’t see any land owners or operators from the 

forest products industry whatsoever. And so, I guess I am concerned about this. 

And I want to know, is this something that the USDA is looking 

at? Are you all looking at participating in this accreditation process? Or do you have some kind of plan to give some oversight to 

these kinds of organizations? 

Mr. REY. Okay, I think I can answer those questions. 

Just a little bit of background. FSC, the Forest Stewardship 

Council, is one of two international certification programs. Certification programs are, as you suggested, designed to certify that a 

forest product is grown in a sustainable fashion, for those people 

who want to be able to buy a forest product with that certification. 

The other system is the Sustainable Forestry Initiative, or SFI. 


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There are some differences in the two, both in the way they approach the process and where they are used. As it turns out, SFI 

was originated in North America. SFI was originated in North 

America. FSC originated in Europe and is more widely used outside of North America than SFI is. So, in today’s markets, those 

two systems are what are generally relied upon by people who 

want green building products. 

We have looked at both of them, and we have experimented with 

both of them, so we are familiar with the systems. I think one of 

the issues with FSC is that it is less familiar to some of our private-sector producers because it is not as common in North America. But if we can be of any assistance to the producers in Missouri 

to help them get to know the FSC system a little bit better, we 

would be happy to do that. 

We are familiar with both. Our general view is that their similarities are probably more significant than their differences. They 

tend to be, kind of, approaching a very common set of mechanisms 

for certifying forest products. 

Mrs. EMERSON. So do you endorse this concept? 

Mr. REY. We have neither endorsed it nor rejected it, as a Federal Government agency. It has been purely a private-sector initiative. We have studied both systems to, first, see how they would 

affect national forest management. Some people have suggested 

maybe the national forests should be certified. Other people have 

said, wait a minute, Congress sets the standards for how the national forest should be managed, not some private-sector entity. So, 

you know, there has been a very vibrant conversation both ways. 

We have used both systems on a select number of national forests, just to see how it turns out. It generally turns out that the 

way we are managing the national forest needs to require a mix 

of both systems, both the Forest Stewardship Council and Sustainable Forestry Initiative. 

THE FUTURE OF FOREST PRODUCT CERTIFICATION

Mrs. EMERSON. Just so I can tell—this is one of the biggest industries in the State. Just so I can tell my forest folks, do you 

think the FSC standard might become the standard over time? It 

is important for them for purposes of exporting, since there has 

been such a decline in use. 

Mr. REY. Right. 

Mrs. EMERSON. For their purposes, is this something that is a 

good investment for them? 

Mr. REY. I would recommend so. What I think is going to happen 

over time—and this is just pure speculation on my part—is I think, 

because of the similarities in the systems, at some point in the future I am going to guess that they will merge. 

But right now, today, if you want to export into certain markets 

and your producers would be largely hardwood producers who 

would be looking at the European markets, FSC is more broadly 

used in Europe, I think, than SFI is. SFI is more broadly used in 

North America. 

Mrs. EMERSON. Thank you very much. I am out of time. 


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AGRICULTURAL PRODUCTION AND SPRAWL

Mr. FARR [presiding]. Thank you. 

I am next. And the Chair has asked me to chair, so if you could 

tell me when I am out of time, I would appreciate it. 

I always enjoy having this panel here, because I am a big believer that the forests of this Nation and the Department of Agriculture, which has more of a role in private lands than anybody, 

that, really, the open space of America is managed by the folks that 

are here at the table. 

And I am constantly reminded, my area is such a beautiful area 

and such a productive agricultural area that it is just a constant 

battle to try to keep land in production rather than just sprawl out 

and build housing all over it. The history of California is that 

sprawl wins. So when you have sprawled everything else out, then 

you discover that the most beautiful place in all of the State is 

right in the center of the State, the rush comes in. And I have a 

couple of observations about this. 

One, I would really like to try to get working really closely with 

you on these agriculture easements stuff, because I really think 

there is a lot of reform that can go in here. I don’t think the Government ought be paying for what people shouldn’t be farming anyway, just because they are in riparian corridors or they are a habitat that has to be protected under some other law. And therefore, 

there is no reason, you know, that we have to pay for that conservation protection. That is the local law, State law and Federal 

law. 

MANAGING THE E. COLI BREAKOUT

But, more importantly, what I am really interested in right now 

is, last year, we had this E. coli breakout. And it was unusual that 

it was not declared a natural disaster, so the normal ways of assisting the problem could not be funded at the Federal level. What 

we saw was the largest voluntary recall of food in the history of 

America and a personal loss of hundreds of millions of dollars because we never did help it. I tried to get some help in the bill, and 

everybody made a joke of spinach, and it never got anywhere. 

What stepped in, in the meantime, was these corporate risk managers who have been consistently, as agriculture and especially 

crop agriculture gets corporate—and you have organizations like 

McDonald’s that come out and buy all the lettuce that can be produced by certain fields. So the growers are essentially growing lettuce for one company. 

And that company comes in and says, ‘‘Well, now we are worried 

about E. coli, and we think the way you ought to keep E. coli out 

is to build a fence around your entire property.’’ Well, this fence 

now is clearing everything NRCS has done in trying to develop, you 

know, integrated pest management programs, compatible buffer 

zones, in some cases riparian corridors. And the local governments 

have given waivers to get these things done because it is critical 

for the people to stay in production. For those who walk away and 

say, if you don’t do what—and I went through the Salinas Valley 

last week, 100 miles along that valley. And they have all these rodent traps out now poisoning everything that can crawl into these 


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pipes. They are about every—about the length of this room from 

one end of the valley to the other, tied to the fences. 

So what you are seeing and what is frustrating the local science 

is that this has totally gotten outside of the ability—this is, kind 

of, chaos management. There is not a sense of the totality of pest 

management practices. And I really would like to see the Department kind of step in, because I think there is a vacuum here where 

there is no comment or backlash to say that we can’t allow this 

kind of freelancing. It reminds me when they put together the vigilante teams, they just said, ‘‘Let’s go get ’em.’’ and this is how it 

is being done. 

And everybody at the regulator level is just stuck, because they 

are operating out of a field that we have never done before. There 

are suggestions that all agricultural fields now have screens over 

them so that the birds can’t fly over them, that the—I mean, the 

fences they have to build have to be strong enough that a wild boar 

couldn’t get in. They have already done all the things that you 

have to do—move the cattle away from ag fields and so on. 

And I don’t know what the answer to this is, but it needs leadership. And I would just ask if you have any suggestions of how we 

might take a look at it and provide that leadership. At least some 

of these practices are not in the best interest of productive agriculture. 

Mr. REY. We would be happy to do that and maybe come up and 

sit down with my counterpart in the food safety mission area. Because I think what you are seeing there is a market reaction. It 

is somewhat of an overreaction. But you are right, it is driven by 

a couple of big purchasers that they have. That probably gives us 

at least some opportunity to sit down with them and walk through, 

you know, what a more appropriate reaction might be. 

FOOD SAFETY

Mr. FARR. Could we set a time where you and I could get together and see if we could draft out some protocols? 

Mr. REY. I think we ought to involve Richard Raymond, my counterpart in the food safety area, because he is a lot more expert at, 

sort of, dealing with reaction to these kinds of food safety issues 

than I am. 

Mr. FARR. Because this is going to get out of control. They are 

going to start advertising, ‘‘Our food is safer than your food, my lettuce is safer than your lettuce, because I do all this stuff.’’ But at 

the same time, it is going to really be hard to manage the environment in a totalitarian way, which we have been trying to do, to 

help water conservation and soil erosion and so on. 

Mr. REY. We would be happy to. 

Mr. FARR. My time is up. 

Mr. LANCASTER. Congressman, might I add as well, we share 

that concern at the State level. We are developing the technical 

data to share with producers, private auditors, food safety inspectors, to show that balance of food safety and conserving our natural 

resources. We are working with the Western Growers Association 

and the signers of the Leafy Greens Marketing Agreement to get 

that information in the hands of growers. 


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But, as well, those food safety regulators and those private auditors will be looking at those systems to say, ‘‘These are conservation benefits; there is no food safety concern related to those practices.’’ It is something we have undertaken with numerous partners, including the Resource Conservation Districts, the State Departments of Agriculture. And we will—— 

Mr. FARR. I don’t think that message is getting out there very 

effectively. 

Mr. Latham. 

PROGRAM PAYMENTS

Mr. LATHAM. Thank you, Mr. Farr. 

And welcome, everyone. And please relay my thanks to your staff 

back in the States and who I think do an outstanding job and 

sometimes under difficult situations. 

Last fall, the GAO had a report talking about the conflict between conservation programs and payments, and they are at crosspurposes at certain times. Can you give us your point of view? And 

are, in fact, our conservation programs at cross-purposes with the 

farm payment program? 

Mr. REY. I wouldn’t say cross-purposes. What I think the audit 

suggested is that there were some instances where the same farmers were getting payments from both the commodity and the conservation title programs. And we have been working since with the 

Farm Service Agency to eliminate those payments if they were not, 

in fact, justified as payments advancing two separate objectives. 

Mr. LANCASTER. Congressman, I would add, as well, one of the 

things we see in response to markets’ additional pressure on producers to grow on every acre and produce on every acre. We have 

looked at this opportunity to see higher net farm income as opportunities to invest in conservation, and we don’t see that as incompatible. We see production agriculture—keeping that land into agricultural production as very compatible with land conservation. 

What we strive to do is take that income, that money that is in 

the producer’s pocket today, and get them to invest in conservation 

practices. When we see pressures to produce on our marginal 

lands, we are trying to get the data into the hands of those producers to show, you know, you can enroll in certain conservation 

programs and not produce on those marginal lands. There are ways 

to maximize your yields on those lands you really shouldn’t be 

farming. 

But we are looking to take advantage of this opportunity where 

folks are acting in response to the market, in response to the safety 

net that we have, to ensure that the dollars they have available go 

into conservation. 

Mr. LATHAM. But you don’t see any conflict with their—not really 

conflict—but the increased crop insurance and things like that? I 

think the biggest factor out there is the fact that you have got over 

$5 corn and $12, $13, $14 beans, which is wonderful, except that 

you are going to want to produce in every piece of square foot of 

dirt you can find. 

Mr. LANCASTER. My biggest concern is actually conversion of agricultural lands to nonagricultural uses and the pressures that 

places on the environment. So we are looking to find ways that 


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keep that land in agricultural production by helping working farmers with conservation measures. And, to me, that is a more significant threat to the environment. 

BENEFITS OF CONSERVATION

Mr. LATHAM. Okay. On the CSP program, I would like to get 

your input as to what kind of changes you think that—or that 

maybe you have talked about with the Ag Committee, as far as rewriting the farm bill. 

And have you found a way to quantify benefits when you are 

talking about air quality and soil tills, water quality, on an individual producer’s land? I mean, I can understand in the watershed 

on a regional basis. But is there any way to quantify the benefits? 

Mr. LANCASTER. It is a struggle. One of the things that we have 

talked about is the Conservation Effects Assessment Project, which 

will give us that science-based data related to conservation practices and certain climates or certain geographies, so that we are 

better able to say what is the effect of that practice on that particular farm. 

So we do think that we are getting that data so that we will be 

able to quantify it. We are not able to now. It certainly is a challenge when we are looking at our conservation practices of how 

they are applied across different landscapes. 

With regard to the Conservation Security Program, the administration recognizes that a stewardship program is an important part 

of our toolbox. We did propose significant changes. We are working 

with the committee in the hopes that they will adopt some of those 

changes. 

CONSERVATION SECURITY PROGRAM

Mr. LATHAM. What changes? 

Mr. LANCASTER. We proposed to reduce the number of tiers to 

use what the producer has been doing in terms of their level of 

stewardship to get them in the program, to make them eligible for 

the program, but our payments would be tied to enhancements, 

those new things that they are doing. So rather than paying a producer for those activities that they are already undertaking, we 

would use that as the bar to get in, but we would pay for those 

additional benefits associated with the program. And by tightening 

that, that is a true stewardship program, where the program would 

be designed from the beginning as one that is rewarding the best 

producers. 

We do have an acreage cap, and we are able to then, in our proposal, offer a CSP program in watersheds every year, as opposed 

to how we have had to enroll in the program based on the current 

funding restrictions. 

Mr. LATHAM. What would it cost if it was wide open? 

Mr. LANCASTER. Under the current statute? 

Mr. LATHAM. That is what we have, yeah. 

Mr. LANCASTER. Under the current statute, we had done a rough 

number of looking at 900 million acres of cropland potentially eligible in the country. We are seeing 50 percent of the enrollment in 

that, and we are averaging about $18 an acre. 


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Mr. REY. While he is doing the arithmetic, let me speak to your 

first question. We have done a lot of work with the Department of 

Energy in the air quality area and with the Environmental Protection Agency in the water quality area to quantify the sequestration 

benefits of different kinds of conservation practices. So if a particular conservation practice is followed, we can quantify how much 

carbon is sequestered as a consequence of that as compared to not 

doing it. 

Mr. LATHAM. On an individual farmer’s piece of ground? 

Mr. REY. The farmer would have to plug in his own specifics to 

get his numbers. But if he follows certain types of practices and 

certain circumstances, we can give him a number, going through 

the analysis in the registry that we have developed, so that he can 

have an answer to that. 

Mr. LANCASTER. On your CSP question, we had done an estimate 

last year of, assuming those numbers, determining that. Assuming 

the number of acres that are eligible for the program, our current 

enrollment rates are $19 per acre. We had assumed about $9 billion for that program, but neither the House bill—— 

Mr. LATHAM. $9 billion? 

Mr. LANCASTER. Yes, sir. But neither the House bill nor the Senate bill proposed to continue current law under the CSP program. 

Both bills looked to cap that program in terms of the number of 

acres and what you are enrolling in it. In fact, the House bill did 

not propose enrollment in it for the next 5-year period. 

Ms. DELAURO [presiding]. The Senate bill does? 

Mr. LANCASTER. The Senate bill does allow for enrollment but 

does cap those dollars and acres associated with the program and 

does streamline it somewhat. 

Mr. LATHAM. $9 billion. 

Thank you. 

Ms. DELAURO. Mr. Bishop. 

SMALL AND BEGINNING FARMERS

Mr. BISHOP. Thank you very much. 

Secretary Rey, Chief Lancaster, Director Dondero and Mr. Steele, 

welcome. 

I am concerned about what is happening in our farming communities, particularly the fact that the average age of our farmers is 

getting higher and higher. I think somewhere now it is about 58.5 

years. We are having fewer and fewer young people going into 

farming, and they cite difficulties in doing that. 

And, as you know, the purpose of the agency’s small, limited and 

beginning farmer assistance program is to ensure that NRCS programs are administered in a way that enables small, limited-resource and beginning farmers and ranchers to maintain and develop economic viability in farm operations and to ensure that the 

NRCS’s technical assistance programs and activities reach the 

small and beginning farmers and ranchers. 

Can you share with us how effective the program has been, how 

the program is working, the extent of participation, and how robust 

the agency has been in pursuing efforts to make sure that it 

works? 


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And I would be particularly interested, if you could supply for 

the record, some statistical information, demographic information 

on the small, limited and beginning farm assistance program. 

Mr. REY. What I would like to submit for the record is an exhibit 

that shows what percentage of the Environmental Quality Incentives Program is being enjoyed by small or limited-resource or new 

farmers. We have been doing a lot of outreach in that area. 

Just as an interesting aside, the median age of a USDA employee 

is also about 57 years old today, so we are all, kind of, going off 

together into the sunset I guess. We will be able to have these debates in perpetuity. There will probably be enough of us in both 

places to have it, too. 

Mr. BISHOP. Will somebody be producing our food, though? 

Mr. REY. We have proposed in the administration’s farm bill proposal a fairly significant increase in support for the small or limited-resource farmer. So that has been a focus area of the administration under current law. It was an area that we wanted to see 

emphasized in the new farm bill, as well. 

But I will submit this material for the record so you can see 

today what percentage of our programs are going to farmers in 

these categories. 

Mr. BISHOP. Good. And I hope that you can share with us some 

of the demographic information so we know what is small, you 

know, what—a real description of who those participants are demographically. 

Mr. REY. What the breakdown is among the categories, yes. 

[The information follows:] 


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smartinez on PROD1PC70 with HEARINGInsert offset folio 66 here 48543A.030
47 

NRCS STRATEGIC PLAN

Mr. BISHOP. Let me ask you about your strategic plan. Last year, 

NRCS began development of its new strategic plan. And can you 

tell us where you are in the process and how the current farm bill 

negotiations of the proposed changes would impact that plan, particularly in terms of the Department’s internal and external assessments of natural resources, human capital, civil rights and other 

issues? 

Mr. LANCASTER. We are making progress relative to our strategic 

plan. As you know, it sets forward, kind of, our overarching goals 

as we proceed as an agency and then has specific goals about measurable achievements with water quality or soil health and soil 

quality. 

I would be happy to provide for the record our performance 

measures and where we are based on our projected progress. We 

are meeting those targets. We are currently under way. We are 

currently undertaking an update to that strategic plan based on 

the information we have. 

As we get into a new farm bill, we will certainly look at those 

additional resources that might be provided in that farm bill to see 

how we adjust those priorities. And as Congress looks at adjusting 

its priorities and where those funds are allocated, we will look at 

that strategic plan. 

[The information follows:] 


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49 

Mr. BISHOP. Is one of those metrics civil rights, so you are able 

to determine where you are there with respect to a program’s participation with regard to staffing, with regard to all of the civil 

rights issues that the Department is concerned with overall? Is 

that a part of your strategic plan? 

Mr. LANCASTER. It is part of our customer base and our customer 

targets for our strategic plan, but, as well, it is an important part 

of our human capital strategic plan, how we are investing in our 

people and ensuring that we are meeting the appropriate target. 

Mr. BISHOP. Thank you. 

Ms. DELAURO. Mr. Boyd. 

Mr. BOYD. Thank you very much, Madam Chairman. I wondered 

what I had done there that took you so long. 

CONSERVATION SPENDING

Ms. DELAURO. I try to get the order here right. 

Mr. BOYD. No, I was just teasing. 

Secretary Rey, Chief Lancaster, others, thank you for being here. 

Thank you for your service. 

Indulge me for a moment. There are many, many challenges that 

the farmer, agricultural producer faces today. I think, in the long 

term, though, none more daunting than the one that Chief Lancaster has laid out, and that is the development encroachment and 

the removal of ag land from agricultural production. I happen to 

be from Florida and see that, maybe, in a greater way than maybe 

Mr. Latham does out in the West or some other traditional agricultural areas. But nevertheless, it is a problem, I think, all around 

the country—rising land costs, other uses, alternative uses. 

And I am also one who has a strong belief that we have to be 

able to produce our own food to survive here in this country. Now, 

your activities in conservation are critically important for that. I 

have maps in my office at home that show what the farm that I 

was raised on looked like in the Depression, and it was not pretty. 

It was nonproductive, in many ways, because of erosion and other 

lack-of-conservation problems. 

The United States Government made it a productive farm with 

the incentives and the programs that exist today to allow our farmers to get help, technical advice and sometimes even financial support to carry on those conservation practices. 

And my question to you, really looking at the proposed budget 

and where there are many, many conservation initiatives and programs that are totally eliminated or substantially cut—grazing 

lands, conservation, watershed and flood prevention, watershed 

surveys, watershed rehab, RC&D, healthy forests, AMA—my question to you is, have we lost our understanding within the Department, within the professional and bureaucratic career staff at the 

Department, about the value of these conservation programs? Or is 

this something that is driven by administrative decisions relative 

to budgets? 

This is a simple question. It is not complicated. 

Mr. REY. What I think you have to do, in reviewing this budget, 

is review it alongside of the administration’s farm bill proposal. In 

the farm bill proposal, we have proposed to increase conservation 

title spending by $7.9 billion over 10 years or by roughly $780 milVerDate Nov 24 2008 00:59 Apr 23, 2009 Jkt 048543 PO 00000 Frm 00049 Fmt 6633 Sfmt 6602 E:\HR\OC\A543P2.XXX A543P2

smartinez on PROD1PC70 with HEARING
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lion, $790 million a year. So if you aggregate both of those proposals, what I think you have is a significant increase in conservation spending. 

And as we talked about earlier, we have to see what the final 

farm bill looks like. And depending on what it looks like, we may 

have to look at this budget and reassess it. 

But at least in terms of what we proposed, in its totality, I think 

that there is a significant commitment to increasing spending for 

conservation or with a focus on spending the money first on what 

are the most significant conservation challenges today. And that is, 

in one instance, to try to help land owners who are in the path of 

development keep their lands as working rural landscapes, and, in 

the second instance, try to provide them technical and financial assistance to manage their lands in a way that there are no air and 

water quality problems associated with the continued use of those 

lands as agricultural lands. 

Now, in the course of all that, we have proposed modifications to 

programs to make them more effective. The Healthy Forest Reserve 

Program, for instance, is one that we proposed funding through the 

farm bill and consolidating a similar program. And we have proposed a couple of programs to be eliminated because we thought, 

in the broad scheme of things, even if they were producing good results, they were less important results than other places where we 

thought the money could be better spent in the service of one of 

those two priorities. 

But, you know, those are the kinds of decisions that we will work 

on together as Congress completes work on the farm bill. And then, 

thereafter, we will work on this budget bill. 

CONSERVATION COMMITMENT

Mr. BOYD. So, Secretary Rey, I know I have worked with you for 

a long time, and I know where your heart is. 

Is your answer, then, that in the Department we have not lost 

our understanding of the need for solid Federal help in the area of 

conservation? If our farmers are going to stay in business—I will 

tell you, we have farmers in Florida that now their land is worth 

$10,000, $20,000, $30,000 an acre, and you know what that means 

when you start figuring the bottom lines and what you do with 

that land. You can never farm that out, it can never be passed on, 

unless there is some way to pass it onto the next generation. And 

that is, sort of, another battle. You can never buy that kind of land 

and make it work. 

We are very fortunate we have good commodity markets now. I 

mean, I have been doing this—I have been farming for 40 years 

myself, and just up and down. And you know what? It may be $5 

corn today, but in 3 years it may be $1.75. So it is going to be up, 

and it is going to be down. 

But we have to—a lot of people are on the land because they 

want to be there. And they have to have a partner in the Federal 

Government. So do I hear you saying that, in terms of the Department, we have the career people and the bureaucrats in there that 

really have the commitment to conservation? 

Mr. REY. Absolutely. And I think that commitment was reflected 

in the farm bill that we sent up to Congress last year and that is 


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currently under consideration. Conservation was one of the areas 

where we proposed the largest increases in the funding. 

And if you look at what we have done with the funding you have 

given us and that the Congress has given us with the 2002 farm 

bill, you see a dramatic increase in the number of private acres 

that are involved in one or another of our conservation title programs. 

When I testified up here last year, I think the number I used 

was 190 million acres that are under one or another conservation 

title programs. The testimony I gave a few minutes ago has 208 

million acres. So just within a period of a year, we have been able 

to bring more farmers into one or the other of the conservation title 

programs. 

Mr. BOYD. Thank you very much. 

And, Madam Chair, thank you for indulging me with a little 

extra time. 

TECHNICAL ASSISTANCE

Ms. DELAURO. I will recognize Mr. Kingston in a minute. 

Under Secretary Rey, as my colleague was talking to you, we 

keep referring to the farm bill. But as I understand this, the farm 

bill deals with the dollars for the contract that—in fact, what we 

are doing is what I said in my opening remarks, is we are undermining the ability to do precisely what Mr. Boyd is talking about, 

by cutting out the people who deal with the planning and doing the 

assistance of helping to carry out this effort. 

The farm bill has program money. It is not dealing with the— 

for contracts, not with what we are dealing with in terms of those 

who can help to sustain that agricultural base that Mr. Boyd is 

talking about. 

So I think we have to be—I think we have to really be very clear 

as to what is happening here and that Members and particularly 

the big farm communities that are represented on this community 

and throughout the Congress have to understand what, in fact, is 

happening to their ability to be able to sustain themselves. 

Mr. REY. The only amendment I would make to what you said 

is that the farm bill we proposed did have money isolated for NRCS 

staff to make sure that we could deliver the programs that were 

proposed in that farm bill and in the 2009 budget. 

Now, you know, if the Senate and the House conferees choose not 

to do that, if that is a possibility, then we will have to sit down 

with you and reassess. 

BUDGET AMENDMENT

Ms. DELAURO. No. And I want to be specific about this. And I 

am sorry, Mr. Kingston, but because I did ask in my first question, 

will we see a formal budget amendment reflecting discretionary 

changes needed after the farm bill is enacted so that we know what 

precisely is needed and we come before here and talk about the dollars and cents. 

And what I also want to know, which we didn’t get answered in 

the first go-around, is which program changes or new initiatives 

would most impact your 2009 budget based on the House and Senate-passed versions? 


smartinez on PROD1PC70 with HEARING
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I have listened to too many people coming before us, Mr. Secretary, again, as I said earlier, putting all of their eggs in the farm 

bill basket, and that is not a good bet at the moment. It is not a 

good bet. 

So will we see a formal budget amendment if there is a discrepancy? 

Mr. REY. If there is a need for a formal budget amendment because there is a discrepancy, we will work with you to produce 

that. I am not yet willing to concede that that will be necessary, 

but maybe I am more of an optimist. I am always looking for the 

pony, and, you know, it is not over until it is over. 

Ms. DELAURO. Well, that is true. But, again, I think Mr. Boyd’s 

question is pertinent, as to what the future is about. And that is 

the thing, we have to keep that core—that is the center of maintaining and sustaining people on the land. 

Mr. Kingston, sorry for the interruption. 

Mr. KINGSTON. Thank you, Madam Chair. 

Mr. Secretary, first of all, I want to thank you for helping the 

Waycross, Georgia, fire, which actually was about 6,000 acres between my district and Mr. Boyd’s district. And Mr. Bishop, I believe, had a little bit of it. But it was in southwest-central Georgia—south-central Georgia and northern Florida. And you guys 

were very helpful on that. We want to say thank you. 

I have a question about the budget that shows a decrease in staff 

for CTA from 6,096 work-years in 2008 to 5,525 in 2009, or a loss 

of 570 work-years in CTA, about a 10 percent reduction. At the 

same time, staffing for CCC-funded programs, especially CRP, is 

increasing. In fact, CRP staffing just about doubles from 475 workyears to 840. 

Can you explain that? 

Mr. REY. I think that is a description of exchange we were just 

having. What that is, is that essentially we are funding some conservation technical assistance through our farm bill proposal, and 

that addition offsets the reduction in the 2009 discretionary budget. 

ORGANIZATIONAL STRUCTURE OF USDA

Mr. KINGSTON. Okay. Does that tie in with the FSA proposal, to 

be more involved with conservation? 

Mr. REY. No. I think what you are referring—— 

Mr. KINGSTON. As I understand, that proposal has kind of died 

down in the farm bill discussions both in the Senate and the 

House. 

Mr. REY. Yes. What you are referring to is a proposal that has 

been made by some for reorganization of some of the functions of 

the Farm Service Agency and the Natural Resources Conservation 

Service. And we have indicated the administration doesn’t support 

that. And you are right, it has died down some. So that is a different issue all together. 

Mr. KINGSTON. Although they do feel that that proposal would 

put you folks more in the field and out of a desk situation, and that 

is why they feel like it is a good deal for the farmer. Do you want 

to comment on that? 


smartinez on PROD1PC70 with HEARING
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Mr. REY. You know, we have run these programs together for a 

number of years under a couple of different structures. I think the 

arrangement we have with FSA today is probably the most effective one that we have had. So I don’t know that farmers are going 

to be benefiting to any great degree if we change the boxes around 

one more time. 

Mr. KINGSTON. I will ask some more questions on that for the 

record. So maybe we could get back to that. 

But I want to say, if Congress agrees for some elimination of 

RC&D staff, would those FTEs go into CTA activities? 

Mr. REY. Many of those people are doing conservation technical 

assistance as a portion of their jobs today. So, should Congress 

agree with our proposal, we would transition those staff largely 

into CTA-related positions. 

Mr. KINGSTON. And would that be enough to meet the technical 

needs of farmers and ranchers who are not participating in farm 

bill programs? 

Mr. REY. We believe that the proposals that we have put forward, both in the farm bill and in the 2009 budget request, will 

meet the needs of farmers, both those who were participating in 

farm bill programs as well as those who are involved in the development of comprehensive nutrient management plans and other 

non-farm-bill-related developments. 

Mr. KINGSTON. Okay. I have a question. There was a New York 

Times article on January 13, 2008—and any time I start off with 

referring to a New York Times article, you can bet that the question came either from staff or from the Chairwoman, because it is 

not on my daily read. 

But apparently what the article said—— 

Ms. DELAURO. Do something counterintuitive now. 

Mr. KINGSTON. I send her the Wall Street Journal on a daily 

basis. 

Ms. DELAURO. I read it every day. 

Mr. KINGSTON. And then I send her my NRA magazine. She 

sends me child nutrition stuff. 

Mr. REY. But at least you are both well-read. 

ASSISTANCE TO MEGAFARMS

Mr. KINGSTON. But it talked about changes to the EQIP program 

in 2002, made the program mission for further concentration of agriculture into megafarms. And the reason was that the payment 

limitation for this program increased from $10,000 in 1996 to 

$450,000 in 2002. 

And what was the reason behind that? Even though most of us 

were here, we weren’t on the farm bill negotiations at that time because it was more authorizing. 

Mr. REY. Well, I think it is probably a stretch to say that the 

changes to the EQIP program were a driving force in the consolidation of animal agriculture. I think broader market issues have driven that. 

What the change in the EQIP program did, however, was make 

it possible by raising the cap for NRCS to provide assistance to 

much larger producers than would have previously been the case. 


smartinez on PROD1PC70 with HEARING
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Mr. KINGSTON. Well, was it done at the expense of smaller producers, in your opinion? And have you studied that perhaps that 

did have an inadvertent effect of that? 

Mr. REY. I will let the Chief offer his thoughts. But I don’t think 

it occurred at the expense of small producers. I think what it did, 

as a consequence of some of the changes in the program that Congress made in 2002, is focus the program on animal agriculture as 

one of the top environmental priorities. And I suspect what that 

was was a congressional response to some of the environmental implications of the consolidation of the livestock industry. 

Mr. LANCASTER. Yeah, I would like to add on that. And I would 

be happy to submit for the record, as well, a letter we drafted to 

the reporter and shared with him to help him better understand 

some of the intricacies of the EQIP program and some data that 

he, I think, in the article admitted that he did not have. 

But what it shows, as well, is that our average contract size has 

not increased appreciably from our pre-2002 farm bill dollars. We 

are still doing many smaller contracts. We have very few contracts 

that are at that $450,000 limit. 

The intent, though, I think, of the program is to address those 

resource concerns regardless of the size of the operation, regardless 

of what you are producing. You know, we want to make that program available to you to help address your resource concerns. 

But the data shows that our contract size, our average contract size is still well below $20,000 as an average contract size. And I 

don’t believe it has had an impact on smaller producers. We have 

to remember, in the context of the program, we were talking about 

a $174 million program prior to 2002, $174 million a year, and now 

we are a little over $1 billion annually. 

[The information follows:] 


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smartinez on PROD1PC70 with HEARINGInsert graphic folio 83 48543A.032
56 


smartinez on PROD1PC70 with HEARINGInsert graphic folio 84 48543A.033
57 

Mr. KINGSTON. Okay. Well, obviously I am out of time. 

Ms. DELAURO. Ms. Kaptur. 

Ms. KAPTUR. Thank you very much, Madam Chair. 

Welcome, gentlemen. I am really glad to have you here. And I 

am very supportive of the work of your agency and the critical 

work on conservation and natural resources that you all do. Thank 

you very much. 

I have several questions. Maybe we can tick through them quickly. 

EMERALD ASH BORER

First, on replacement tree planting, as we approach this spring 

season, particularly related to the emerald ash borer and the 

States that have been most heavily impacted, could you perhaps 

tell us when the trees have been lost and what special approaches 

you might be employing? 

I know we are looking at Earth Day and trying to figure out how 

to encourage more local groups to access trees from NRCS in the 

private sector. And we are talking about millions of trees. We need 

everybody’s help to replant. 

Do you have, sort of, a magic plan to help us do this? 

Mr. REY. I don’t know how magic it is. But we estimate that we 

have lost about 20 million ash trees to the borer so far. Most of 

that loss has been concentrated in Michigan and Ohio, where the 

epidemic initiated. 

We have been, so far, successful in containing spot outbreaks 

that have occurred outside of the main infected zone. That is important and, we hope, something that we can continue to enjoy, because we have seen outbreaks in Pennsylvania, Maryland and 

West Virginia, which we have contained. 

We are providing assistance to State forestry agencies to help 

with tree replanting. We will probably have to increase that assistance as people start to deal with the epidemic within the infected 

area. And I can give you some figures on what we have spent so 

far on that for the record. 

[The information follows:] 

2008 EMERALD ASH BORER (EAB) EXPENDITURES FOR REPLANTING

Federal Forest Health (SPFH) $500,000 

Coop Forest Health (SPCH) 495,000 

Research and Development (FRRE)—approximately 550,000 

Total Obligated $1,545,000 

In FY 2008 Animal Health Inspection Service (APHIS) will spend approximately 

$30.4 million on the EAB. APHIS cooperates with several States (including Illinois, 

Indiana, Maryland, Michigan, Ohio, and Pennsylvania) to prevent EAB spread 

through survey, regulatory, outreach, and control efforts. 

Ms. KAPTUR. All right, Mr. Secretary. I would love for you to take 

a look at using our Ohio delegation and what we could do, the 

whole of whatever districts are affected. And I don’t want to exclude Michigan. I know your fondness for Michigan. But is there 

is something we can do now on our Web sites, at public events? 

I mean, we are already planning to do this. But it is a drop in 

the bucket; the need is so huge. If anybody over there is a genius 

on this, I would sure love for you to send them over and help us 


smartinez on PROD1PC70 with HEARING
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figure this out. I mean, we are knocking them down at 10,000 a 

shot with these machines that come in, and it is unbelievable to 

see this happen. 

Mr. REY. I will arrange to come up and talk, because if you are 

willing to let us use some of your communication tools, this is the 

right time to be communicating. 

Ms. KAPTUR. I would like for you to meet with the whole delegation. It goes all the way down into Ohio. Or you tell us how far 

down it goes. And if we want to do it with the Wolverines, we are 

happy to include the Michiganders too. 

But this is a really breathtaking set of occurrences that we are 

living through, and we have to fight back. I mean, we have to 

plant. And we are in a key moment here in the spring. So I would 

deeply appreciate a visit. 

Mr. REY. The spring is important because one of the means of 

transmission is people moving firewood around. So, as we are getting into the camping and then fishing season, any communications 

tools that we can use to communicate with the public not to haul 

firewood north, south or west is helpful. 

Ms. KAPTUR. Right. But we want to get them digging and putting 

trees in the ground. 

Mr. REY. That, too. 

URBAN WILDLIFE

Ms. KAPTUR. So any advice you can give us on how to maximize 

these efforts would be appreciated. 

Number two, this is probably not your jurisdiction, but I just 

want to make you aware, as you get into meetings over there at 

USDA, under the conservation and proper management of both the 

wildlife and plant life, USDA is not in charge of cities. That is 

somebody else’s job. 

The problem is, in many places, there are no predators left. And 

what we are seeing in cities is explosions of populations of deer, 

coyotes, feral cats, squirrels, beyond normal levels. I can’t seem to 

get my arms around this. You know, you have a dog warden, but 

you don’t have a cat warden. Is it a local problem, or is it really— 

you try to take these animals out to the forest, they say you can’t 

do that, that is a crime. What are you supposed to do with these 

animals? 

And we need somebody somewhere who has enough jurisdiction 

to help us figure out, in urban areas, where you have explosions 

of these populations, what do you do? All I am looking for you is, 

who is responsible? If the State is not doing it, if the mayor is not 

doing it. 

These animals move along stream beds, they do all kinds of 

things. And there is a problem there. There is a problem. 

So if you could give me advice on where to go, just in—maybe 

do some test pilots in urban areas, particularly those with rising 

numbers of poor people. There is an explosion in these rodent and 

wildlife populations inside city limits. 

Do you have any comments on that? 

Mr. REY. Only that most of that jurisdiction falls at the county 

level. Most every county has animal damage-control officers and an 


smartinez on PROD1PC70 with HEARING
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agency for that purpose. Usually the dog warden is, you know, a 

portion of that agency, but it varies in different jurisdictions. 

The closest we come to dealing with that is the Animal and Plant 

Health Inspection Service in the Division of Wildlife Services. But 

there we are called in typically when there is a conflict between agriculture and wildlife in a much more rural setting than what you 

are talking about. So APHIS, for the most part, hasn’t come within 

the city limits historically. 

Ms. KAPTUR. If somebody over there—and I will end with this, 

Madam Chair—but if somebody over there at USDA could give me 

an example of where in the country this is being done right, maybe 

somebody knows. 

I can tell you, in vast jurisdictions, it is not being done right. We 

shouldn’t have deer populations, with lyme disease and everything 

else—isn’t that what they carry, with the ticks? I can’t tell you how 

many people have gotten that. You know, something is wrong here, 

and the urban people are ill-equipped to deal with this. 

So we need some prototypes, we need some examples of where 

this has been done right to be shared more broadly. 

Mr. REY. I will ask my counterpart who oversees APHIS’ work 

what their suggestion might be, because they probably do interact 

with some of the county organizations. I do know they interact a 

lot with the Departments of Natural Resources, the Departments 

of Fish and Game in each State. But I think you are probably 

right; there is probably a gap, because the Departments of Fish 

and Game typically don’t come within the city limits either. 

Ms. KAPTUR. Exactly. It is a real issue, and unquantified. But I 

tell you, it exists. 

Thank you, Madam Chair. 

Ms. DELAURO. Thank you, Ms. Kaptur. 

Mr. Latham. 

RESOURCE CONSERVATION AND DEVELOPMENT

Mr. LATHAM. Thank you, Madam Chairwoman. 

Mr. Boyd was making a point about the value of farmland. We 

have gone from about $2,000 an acre, $2,500 an acre, up to $6,000, 

$7,000, $8,000 an acre for just farmland. This is not development 

ground. 

And I just think that the financial pressure of producers today, 

you are going to have a real problem getting people into more conservation programs. And I think we need to have a lot more technical assistance out there. It is very troubling what Jack was talking about with reductions there, elimination. 

The RC&D, from my understanding, you did a survey a year or 

so ago about the public’s perception. That was one of the highestrated programs that was out there. And I guess I am troubled 

somewhat as to why you would have the elimination of that when 

the public likes the program, they use it. 

And who is going to do the work if you do eliminate it? 

Mr. REY. Well, we are trying to distinguish between the utility 

of the program and the Federal role in it. The program, in our 

view, will continue. 

Mr. LATHAM. Who is going to pay for it? 


smartinez on PROD1PC70 with HEARING
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Mr. REY. Well, I think the RC&Ds themselves have proven to be 

very aggressive and competent fundraisers. Now, if the Federal 

Government continues to give the money to them, I am sure they 

will continue to take it. 

What we looked at is, could the vast majority of RC&Ds continue 

on with the program without the Federal money, which was supposed to be a catalyst to get them started and not a, sort of, limitless base of support? And the answer—and I think many of them 

would probably concede the point is—oh, yeah, it will be harder, 

but we will continue on, we can raise the money to cover those expenses. 

So this was a case of not diminishing or denying the value of the 

program, because it is a highly regarded program. It has been beneficial not only to NRCS but to the Forest Service as well. So it 

wasn’t that so much as, in the broad scheme of setting Federal priorities in tight budget times, is this the best use of the Federal 

money? 

I initially, you know, years ago, concluded it was. We had an 

OMB budget examiner at the time who felt very strongly that, you 

know, that was one of the ways that you do effect good budget discipline, is to look at what the proper Federal role is. And he made, 

you know, he made a convert out of me. 

Mr. LATHAM. Be careful. 

Mr. REY. But he is available to you now, too. 

Mr. LATHAM. Okay. You don’t have your green eye shades with 

you or anything? 

Mr. REY. No. 

A WATERSHED APPROACH

Mr. LATHAM. We talked earlier about the CSP program, the po- tential expenditure of $9 billion. And yet, an area where I think we 

could do a lot more good is if we looked at total watersheds. 

In your budget, you are cutting watershed rehabilitation pretty 

dramatically. And it is a small amount, comparatively anyway. But 

why don’t we take a holistic approach rather than give individual 

farmers money to do something no one can quantify, when I think 

we all know that if we do a watershed basis, that that actually is 

where you are going to get the results? And you can have 10 good 

operators and one bad one, and you are going to have the watershed negatively affected. So why would you be cutting this and 

with all the money supposedly going to CSP? 

Mr. REY. Well, in broad terms, we are trying to focus our conservation assistance programs on a watershed basis, because you 

are right—— 

Mr. LATHAM. You are cutting the funding. 

Mr. REY. Well, the program that you are referring to is one of 

the older programs that provides assistance to local governments 

for primarily structural watershed improvement work—in other 

words, to build small dams. 

It is an old program. It has been around for a long time. It has 

been 100 percent earmarked, except for the year that, through a 

clerical error, it was 110 percent earmarked. And we think, by and 

large, we are sort of running to the end of the road for those kinds 

of structural solutions, in any case. 


smartinez on PROD1PC70 with HEARING
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So, again, in the setting of budget priorities, we would rather 

spend the money with land-owner assistance programs and not 

building a whole bunch of more dams. And that is what this budget 

reflects. 

Mr. LATHAM. You are cutting technical assistance also. 

Mr. REY. Well, no. We are shifting part of the responsibility to 

pay for technical assistance to our farm bill proposal. And, again, 

we will—— 

Mr. LATHAM. Which has about a 10 percent chance of happening 

this year. 

Mr. REY. I am still looking for the pony, as I said earlier. 

Mr. LATHAM. Well, I guess. 

Thank you, Madam Chairman. 

Ms. DELAURO. Mr. Farr. 

Mr. FARR. Thank you very much, Madam Chair. 

REGULATORY BURDEN

Mark, I just want to sort of lay out something for you here. I was 

thinking about this committee and the experience of this committee. We don’t have many new Members of Congress on here, 

and most of us have served in offices before we came to Congress. 

And I have 33 years of elected office, from county government to 

State government to Federal Government. And I think what I 

learned most about the Federal Government is you are not going 

to find a solution to a local problem without a Federal partner, because there is the regulatory process and the monetary. 

I am representing one of the most productive places in agriculture in the world. It is a 100-mile-long valley called the Salinas 

Valley. It produces 85 crops, sells them for about $3 billion. It is 

year-round agriculture. It is the largest farm worker community in 

the United States, living there, not migratory. All our water is 

local. We don’t get it off the State water system. 

And what we have is land that is worth, you know, in the hundreds of thousands of dollars an acre. So, essentially, if you look 

at the land, there is nothing you can grow on that land that you 

can get a return on as equivalent to the value of the underlying 

land. And yet people want to stay in—they want to keep it in open 

space. They want to farm. 

The problem is, is we have so many regulatory issues, and it is 

not that they are going to go away. It is that they all, kind of, work 

in their own silos with their own budgets. 

And we see this now. We have an LBAM spraying program going 

on for the light brown apple moth, where, because the moth is a 

bad moth, you can’t buy anything where this moth lies. You can’t 

ship stuff. But it is the State Department of Agriculture that is responsible for getting rid of it, and they are spraying. And the 

spraying now is getting into—it is a pheromone; it is not a pesticide. It doesn’t kill the moths. It just sort of drives them nuts. 

And then they go to mate, and they can’t do that, and therefore it 

is supposed to get rid of them in a passive way. Well, this thing 

is going to come to a crashing halt because the PR is so bad on it, 

nobody wants to be spraying, even with water. 

So what I am trying to get at is I have worked with all these 

different agencies from time to time—Corps of Engineers, ARS, we 


smartinez on PROD1PC70 with HEARING
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have a research station in Salinas, and fisheries issues on our 

river, fish and wildlife issues, NRCS with the FSA, we are on the 

ag extension programs, with the Forest Service. We are also on one 

side of the valley and then Park Service on the other, with three 

universities—California State University at Santa Cruz, at Monterey, University of California-Santa Cruz, and community colleges. 

BIG PICTURE APPROACH

Now, have we ever been able—did you have any experience of 

ever putting together a whole team of really good experts that 

could take a look at these problems that are right out there? 

I mean, it is no longer that we are not going to do it. It is now 

just coping. How do we really build a sustainable plan? Cities are 

doing a sustainable plan, but they are doing it in a way where, 

every time we get to the edge of the city, we have to then do a 

sphere of influence for the outside, and then they are sucking in 

the ag land. And we are losing the most productive ag lands in 

America. 

What is going to happen is these kinds of crops can’t be grown 

in other places in the United States. They will go to Mexico, and 

they will go to Central America. And all the other issues about all 

the food safety that we are talking about and pest management 

practices and good environmental trade-offs won’t be—Mexico will 

probably do a pretty good job, but not to the quality standards that 

we insist and certainly not to the health standards that we insist. 

But we are going to lose that. We are going to lose that, because 

they are going to be able to grow and we can’t. 

And my question is, have you ever put together—because I know 

you do a lot of things, and you like to go to those Burning Man conventions where everybody in the world shows up with ideas. Have 

you ever put together—had an idea of just putting an incredible, 

talented team of all of these various entities together and working 

with a community just to see if we can overcome? 

We have farmer housing problems, which, you know, is in the 

Department—we discussed this the other day. We have listings of 

fish and wildlife, the steering of the stream. This is a stream that 

delivers the water. You have to maintain it. It floods. When it 

floods, it is nasty. 

I am just kind of overwhelmed by having to problem-solve on a 

micro basis, on just micro, little problems, rather than looking at 

the big picture of how can we build a plan to sustain 100 miles of 

the most productive agriculture in America for the foreseeable future? And nobody has yet been able to kind of envision that. 

Mr. REY. Actually, the vision for integrated approaches to a 

wider variety of environmental problems on a watershed basis is 

emerging from the field. It is reflected in the cooperation that has 

been going on the last 2 years in the Klamath Basin, and there are 

other places where that is occurring. 

We have been trying to encourage the development of that. And 

one of the proposals in our farm bill was the Regional Watershed 

Enhancement Program, designed specifically to provide financial 

assistance to the exercise of bringing all of the various State, local 

and Federal agencies and land owners together to try to look at 

trying to solve those problems. 


smartinez on PROD1PC70 with HEARING
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Mr. FARR. We do that. We have the largest monitoring of water 

quality in the United States. We monitor nine counties wide, and 

it is all voluntary. And this is water quality monitoring—it all ends 

up in Monterey Bay National Marine Sanctuary. But it is always 

built around a specific project. 

Let’s do water quality. Let’s get this river fixed up. It is a 100- 

mile-long river that is all privately owned. We have no Corps levies 

on it, where we have to get a Corps permit to get in it. How do 

you get in and do something? Then the Fish and Wildlife says you 

can’t cut any trees because it is going to change the water temperature. We are stuck. The Corps says you have to cut the trees because you can’t have floods. 

So we have a lot of these problems. We have problems of, where 

are you going to house people? You have, you know, the E. coli 

breakout, where the corporate world comes in and says, ‘‘Well, you 

are not going to grow the way you have always grown. You will 

now put up fences.’’ and some people will even want you to put 

nets over the entire fields so the birds and insects won’t be flying 

over them. They are nutty ideas, but they are coming from people 

who have a lot of clout in determining whether your product gets 

purchased. 

So it seems to me that, until we kind of grab a really—like a city 

would do, to really do minute planning of how all of these integrated systems can work. And you have to get some controls on 

land. It can’t just be, well, after you do all this, you will just go 

and sell it for urban sprawl. You can also ask to have conservation 

easements on it. And we have a lot of capability of doing that 

through buying out development rights. A lot of ranches have put 

themselves in a conservation. They will never be subdivided. 

But there needs to be some Federal leadership on it. And I am 

one of those, but I can’t provide all that technical expertise. 

Mr. REY. Uh-huh. 

Mr. FARR. And if I were trying to put together a team, I would 

like to know some ideas that you might have of how that team can 

be put together. 

Mr. REY. Okay. I would be happy to visit with you on that. 

I think, you know, Salinas Valley would be the kind of area that 

we looked at, that we would look at as a candidate for the proposal 

that we send forward. Because our proposal, in essence, was one 

of providing financial assistance to bring all of the players together 

to look not exclusively at water quality issues but at what the 

other issues, the conservation issues, are that are affecting a particular watershed. 

In the Klamath, for instance, our experience was it started as a 

water dispute, but then as you looked to bring in all of the players 

necessary to try to effectuate a solution, what you found is you had 

to deal not just with water quality and endangered species but 

electricity rates because you were dealing with the power company, 

farming practices because those had some implications on water 

quality, land tenure because those affected the farming practices, 

and basically tribal claims on land because those were also 

wrapped in. 


smartinez on PROD1PC70 with HEARING
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So our experience was, you had to deal with all of those if you 

were even going to get to the core issue. And I think what you are 

describing in the Salinas Valley is roughly similar to that. 

Ms. DELAURO. Thank you, Mr. Farr. 

FINANCIAL MANAGEMENT

Mr. Secretary, let me just ask one or two other financial management questions. 

In the USDA’s Consolidated Financial Statements report for 

2007, the Office of Inspector General noticed three significant deficiencies within the Department, the first being the need for improvements in overall financial management. 

As a part of the 2007 review, NRCS uncovered a significant number of obligations, legally binding agreements to spend Federal dollars that were no longer acceptable. In the end, NRCS had to cancel contracts for conservation projects valued at more than $560 

million—more than a half a billion dollars. That is a lot of money. 

What happened? Why did NRCS determine that these contracts 

were no longer acceptable? And from what program were these contracts cancelled? 

Mr. REY. Go ahead. 

The Chief has been fussing with this, so I will let him add—— 

Ms. DELAURO. Let me ask, Chief, is $560 million the final 

amount of the contracts were cancelled? Or did NRCS cancel a 

large amount after a further review? 

Mr. LANCASTER. We continue to obligate and deobligate money. 

So when you are looking at that deobligation number, that number 

will continue to change, and change daily. The reason those dollars 

are deobligated, there are many reasons for that. 

When you look at our various programs, mandatory programs as 

well as discretionary, we have our cost-share programs where we 

will enter into a contract with an individual producer to say—and 

by statute, those are up to 10 years. So we go into a contract with 

a producer who agrees on a schedule for when they will implement 

certain practices: We will put in fencing this year, we will put in 

a heavy-use area next year, we will put in an animal waste system 

the third year. So we work with producers very closely in each of 

those years to try and keep them on track. 

What happens in agriculture, as you well know, is weather happens, price change happens. And at some point in the context of 

that 5- or 10-year contract, a producer will come to the conclusion 

that they are no longer able to make that investment within the 

period of that contract. 

We base our contracts—we obligate that money when the contract is signed. So, in year one, we obligate the dollars associated 

with those practices that will be implemented in year five, and we 

base that on a certain cost-share rate of what that costs in today’s 

dollars. Well, 5 years from now—you know, after Hurricane 

Katrina, concrete prices doubled, or plastic prices tripled. So the 

producer comes to the realization that they are no longer able to 

fulfill that contract based on the prices and based on the prices 

that they are getting. 

So we end up canceling the contract with the producer because 

they are no longer able to install those practices. That is a 


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deobligation. We have obligated the money; we had to then 

deobligate it. 

With our easement programs, in many cases, we will order an 

appraisal as we get toward the point of actually—we will obligate 

the dollars into essentially a contract where we then move forward 

with appraisals. The producers may at some point, before they enroll their land in an opponent easement, may get cold feet and say, 

based on where prices are and based on what I want to do with 

this land, I have changed my mind. Those dollars are then 

deobligated. 

Any cost recovery we do related to those deobligations aren’t balanced on the books against the deobligation. So if we recover our 

costs associated with the technical assistance or any fines or any 

cost recovery we charge them in terms of penalty, that is not offset 

against the deobligation. So you will see in WRP significant 

deobligations where producers backed out of what they initially intended to do in their contract. 

The Emergency Watershed Protection Program is a good example 

that shows with dollars—we will have a disaster event tomorrow. 

We will go out and do an assessment. At some point, we will obligate dollars into a contract to do that cleanup work. What we see 

in that program particularly is, you are always going to ensure you 

have the money to do that job. Because conditions have changed, 

because we may be able to get the work done more cheaply, we end 

up deobligating dollars out of EWP. That money then goes to the 

next project in line. 

So when Congress, when you consider supplemental appropria- tions bills and you fund EWP and you provide, say, $80 million— 

our current backlog is about $90 million in EWP. If you were to 

provide $70 million, it is very likely that $70 million will, dollars 

that are deobligated will be reobligated into other contracts, 

deobligated and then reobligated again, so that we move down our 

backlog list. 

We can provide for the record a list of all our programs. 

[The information follows:] 


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USE OF DEOBLIGATED FUNDS

Ms. DELAURO. Yes, that is what I would like. I would like to do 

that. 

You mentioned the issue of backlogger, a list of unfunded applications for various—what we hear about at this subcommittee is a 

backlog particularly as it deals with the Environmental Quality Incentive Program. And, for instance, in fiscal year 2006, the agency 

reported they had on hand more than $600 million in unfunded 

EQIP applications. How many EQIP contracts could NRCS have 

enrolled with that $560 million that the agency cancelled last year? 

That is the—— 

Mr. LANCASTER. The money we get in those programs are our annual funds. So we will obligate it in—with EQIP for 2008, we will 

obligate those dollars in 2008. If those contracts fall out, if they are 

deobligated in 2010, those dollars are not available for obligation 

in 2010 contracts. We can only use them for contracts signed in 

2008. 

We use that money for cost overruns. We use it if there is a disaster. If you had a contract in 2008 and you built fencing, and you 

had a fire within that wiped out all your fencing, we would go back 

and use that 2008 money that was deobligated to pay 100 percent 

of the cost to restore that fence. But we are not able to use that 

dollar for current-year projects. 

And when you talk about the discretionary dollars, in particular—— 

Ms. DELAURO. You go back to the backlog of what you have left 

over from 2008 that didn’t get funded? 

Mr. LANCASTER. No. We are not able to do that. 

Ms. DELAURO. You are not able to do that either? 

Mr. LANCASTER. Existing contracts where deobligations occurred. 

With our discretionary dollars, again, many of those dollars may 

fall out and be used over and over again. So the deobligation number is not an actual—$560 million was lost. Some of that money 

may have been lost year after year. 

Ms. DELAURO. How do we keep this from happening? 

Mr. LANCASTER. We take it very seriously. We are very concerned 

with our deobligation numbers. 

One of the things we are doing with our—I gave the WRP example. We are moving the obligation period much closer to the close 

of that easement, which means we are going to invest more money 

before we actually obligate the money in terms of the technical assistance relative to the financial assistance for that farm bill program. We are going to spend more money before the dollars are obligated, which means we may be investing money in appraisals or 

other expenses. 

Ms. DELAURO. Whose idea was it, $3 billion in obligated dollars 

from the farm bill conservation program sitting on the books for 

various contracts? 

Mr. LANCASTER. Those are open obligations. That is where we 

have entered in the contract, and the work has not yet been completed, so we have not yet paid that out. 

With EQIP—maybe this will help get to your concern—we are 

moving for shorter contracts rather than 10-year contracts or 5- 


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year contracts. We are moving toward much shorter contracts 

where we will be expending dollars much sooner to the date of obligation. 

Ms. DELAURO. What I would like to have from you, if you don’t 

mind, what are your best thoughts on how we can prevent this 

from occurring, and help to educate us so when we are looking at 

this, there is an understanding of what we are dealing with, rather 

than, you know, seeing numbers that—— 

Mr. LANCASTER. We would be happy to work with you and your 

staff. 

Mr. REY. We can describe how the process works now and then 

show you, you know, walk through how it—— 

Ms. DELAURO. Right, the how does it work. But I would really 

like to know how you anticipate trying to fix it. 

Mr. REY. Right. 

Ms. DELAURO. How do we fix this? So. 

Mr. REY. Yeah. Obviously, the simplest fix would make these all 

no-year funds, but you may not want to do that. 

Ms. DELAURO. Probably not. 

Mr. REY. But there are other ways of us reporting to you so you 

have a running tally of what the deobligation is. 

Ms. DELAURO. Ms. Kaptur. 

WATERSHED PROGRAMS

Ms. KAPTUR. Thank you, Madam Chair. 

I wanted to specifically thank Mr. Lancaster for making the effort to come to Ohio and to see us struggle forward in our efforts 

to handle one of the watersheds. This is an important watershed 

of the Great Lake system, and I truly, truly appreciated that. 

And as I was listening to Congressman Farr describe his situation, I couldn’t help but identify with the struggle that we have had 

to try to get all the relevant partners around a table to talk about 

a chunk of geography that we refer to as the Western Lake Erie 

Basin Partnership now, for lack of a better term. It is one of the 

watersheds in the Great Lakes region that has a precious global 

asset in the form of fresh water. 

I think one of the books that most impressed me in my life has 

been ‘‘Cadillac Desert,’’ reading that book and then watching my 

colleagues Sanford Bishop and Bobby Etheridge from North Carolina as they struggled for water, trucking in water last year during 

drought seasons. And I am thinking here, ‘‘I sit in the water bowl, 

and we are wasting it. We are not managing the asset we have.’’ 

And subsequent, I think—I can’t recall if, during your visit, Mr. 

Lancaster, we had the second flood down in Findlay, Ohio, or not. 

But, in any case, we really need a mechanism to better assess what 

is happening within this watershed and to plan for the proper use 

of its natural assets, including fresh water. 

Thank God you existed as an agency, as an instrumentality, 

NRCS. And the work that Terry Cosby and Steve Davis have done, 

they both need big gold crowns for what they have been doing over 

the last several years. 

And again, as with Mr. Farr, we have been searching for a way 

to get our arms around this. We think we are creating a model for 

a very large watershed. Because I represent the American equivaVerDate Nov 24 2008 00:59 Apr 23, 2009 Jkt 048543 PO 00000 Frm 00069 Fmt 6633 Sfmt 6602 E:\HR\OC\A543P2.XXX A543P2

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lent of Amsterdam; it is flat. But it does have some slope, and the 

largest river that flows into the Great Lakes, the Maumee River, 

comes through my district, and also Mr. Latta’s district and Mr. 

Souder’s district. And we don’t have a very good means. 

Mr. Rey, you talk about communication. Now that we understand 

more about what ails us, in terms of the mismanagement of this 

asset, it flows in the wrong places at the wrong times, we know we 

don’t have installations like dry dams that can help us control 

where this water goes. But what a great problem to have, fresh 

water, when other places are starved for it. 

Our problem has been getting the parties around the table, the 

same problem Mr. Farr talked about. We are trying to keep the 

Army Corps of Engineers involved, trying to keep EPA involved, 

USGS involved. And now we are at the point, after several years 

of studying—your agency has been stellar in providing us with critical information we didn’t even have—for instance, maps that are 

visually attractive that we can put on our major television stations, 

showing people, ‘‘This really is soybean bowl, folks. Yeah, we have 

corn and we have other things, but this is what is really going on. 

We have phosphorous flowing into Lake Erie. And this is what you 

can do on your farm.’’ And they can literally go right down to the 

parcel mill because of the technology that we have, we can show 

where we have crop enrollment, we can show where we have got 

wetland reserves enrollment, we can show where we don’t have 

stream beds that have plant life. We have an incredible teaching 

vehicle now, but it is not without a lot of effort on the behalf of 

many, many people. 

And we still don’t have the engineering solutions that we need 

to deal with the volume of water that we have, whether we put it 

in reservoirs, whether we store it underground. Whatever we are 

going to do with this, we still don’t have that piece of it. And I notice in your budget you are canceling all your watershed programs. 

I was sitting here looking at the watershed and flood prevention 

account, the watershed surveys and planning account. I don’t know 

what all that means. All I know is how hard it has been for us to 

get to a point where we can work more intelligently to handle this 

water asset and its involvement. If it weren’t for NRCS, we 

wouldn’t be as far as we are. 

And I guess my question to you is, why are you cutting these accounts? And have you replaced them? Now we have to move to implementation. Will USDA play a role in that? Do we have to depend on the Army Corps to do that? 

How do we get our arms around handling the water and natural 

resource challenges we have in this region, to handle these natural 

assets better, by your cutting the authorities that we thought we 

would use for implementation? 

Mr. LANCASTER. I think—and again, we look at these programs 

globally. In the Maumee, the flood measures and the scale of any 

projects would exceed what we would do at NRCS. That would be 

a Corps project when we are looking at watershed structural practices. 

But what we have chosen to do is focus, really, on our land treatment efforts, our cost-share programs, our technical assistance. We 

are working with land owners to address those lands to look at all 


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of our programs in concert where we are preserving ag land so that 

those farm lands don’t become impervious surfaces that contribute 

more toward those hydrological conditions you are facing, when we 

have that ability for that land to serve as a sponge to absorb some 

of that water during rain events. 

So our focus, again, with those competing priorities for dollars, 

has been to focus our dollars in those programs that directly assist 

land owners on an individual basis rather than a watershed structural practice, where—as folks have indicated, we have put about 

$6 million into the Watershed Rehabilitation Program because we 

recognize that there are aging facilities out there that we need to 

ensure that they remain safe for those communities below it. But 

when we are challenged with addressing that rehabilitation need 

as well as those needs of private land owners, that, in some instances, should we be out there building new structures with our 

limited capability within those limited dollars? 

So, in your specific example, we are working to cross State 

boundaries as well. We have talked about—and we have worked 

with our State conservation partners in Indiana so that the focus 

is there. We treat this as an entire watershed, and watershed 

doesn’t end at a State boundary. 

But those are specific NRCS-to-individual-land-owner contracts, 

where we are working to help them address their erosion issues, 

their flood control issues, and then we see the downstream benefits. 

CONSERVATION TECHNOLOGY

Ms. KAPTUR. I just wanted to, Madam Chair, if I could, just take 

1 extra minute. 

The visuals that have been produced are scientific right down to 

the acre, all right. Imagine this, imagine a slide that goes up and 

it will be broadcast on all of our television stations, which is within 

the capacity of the system to do this now. They can actually show 

where an acre of land has a given soil content, and it doesn’t need 

as much nitrogen or as much fertilizer, or it needs more lyme rather than phosphorous. And they can show where a farmer has 

missupplied. And we have this problem of algal blooms in Lake 

Erie. We have all these pollution issues related to the bigger farming within the watershed. The scientific basis of this is unbelievable. 

The problem is what Mr. Rey said, who knows it? You know, how 

do you get this out there? How do you teach at the level that Mr. 

Farr is talking about? I am just talking about this so we can think 

more creatively about how to use the information systems we have, 

not just in our watershed but in other places across the country. 

We are trying to better manage these habitats. And we are creeping toward an answer, but it hasn’t been easy. And without NRCS 

and without the resource people at USDA, we wouldn’t be anywhere. 

But it shouldn’t be this hard. I mean, it shouldn’t be this hard 

to do this. And we have had our foot on the accelerator for almost 

a decade now, trying to do this. Something is wrong with the legislative authority that makes it so difficult for communities to plan 

intelligently how to manage their natural resource endowment. 


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So I just—I thank you. 

And could you give me, in closing, the title of what section of the 

farm bill you are saying will do this better than we have done it 

in the past? 

REGIONAL WATERSHED ENHANCEMENT INITIATIVE

Mr. REY. In the Administration’s proposal, we have proposed to 

include within the Environmental Quality Incentive Program a Regional WatershedEnhancement Initiative. So it would be in title 2, 

in the language that reauthorizes the Environmental Quality Incentives Program. 

Ms. KAPTUR. And do you know at what level, Mr. Secretary, that 

is funded or requested? 

Mr. REY. We requested $175 million a year for that, $1.7 billion 

over the life of the cycle. I don’t know what is in the House or the 

Senate proposal, in that regard. Both proposals treat EQIP pretty 

fairly, and so we would probably launch this initiative unless there 

is language prohibiting us from doing it with a portion of whatever 

is put into EQIP in the final farm bill solution. 

Ms. KAPTUR. I thank you. 

Thank you, Madam Chair and members. 

COST EFFECTIVENESS

Ms. DELAURO. As a follow-up, in terms of water quality, let me 

ask you, which of the NRCS water conservation programs—and 

this is with regard to water quality—is most cost-effective? Which 

gives us the most bang for the buck in addressing water quality? 

And on the other side of the coin, which program is the least costeffective? 

Mr. REY. I would say the Environmental Quality Incentives Program is the most cost-effective. It is the program we have used 

across a larger number of ownerships to deal directly with waterquality issues and sometimes in cooperation with the Environmental Protection Agency. 

The ones that I think are least cost-effective are the ones that 

we have proposed for elimination—the structural watershed programs that basically go to building more small watershed structures, more of small dams. I don’t think that, over the history, that 

those have shown the same level of water-quality improvement for 

the investment made. 

Ms. DELAURO. Overall, in terms of conservation programs, with 

regard to the programs, which of the programs is—just overall in 

terms of conservation, which program is the most cost-effective? 

This one was with regard to water quality, I am asking about. 

Mr. REY. I would say probably the Conservation Technical Assistance, because even though we are not incentivizing any particular category of land owner with financial incentives—— 

Ms. DELAURO. Right. 

Mr. REY [continuing]. We are reaching probably the broadest 

number of land owners and providing them technical assistance 

that is materially affecting the quality of work that they do on 

their holdings. 

Ms. DELAURO. And that gets back to my colleague Mr. Kingston’s 

questions—he isn’t here; I am sure he would jump in—where he 


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talked about the CTA. You know these issues, and you are dealing 

with the requests in the field, et cetera. But if CTA is the most effective, CTA is being cut, as I understand it. 

Mr. REY. Well, here, again, I would call it a shift. And, you know, 

cost efficiency is one important barometer of how you look at programs. 

But, you know, there are people who would make an argument 

that the most important programs, period, are the easement programs, because they are the ones that are having the most material impact on what the future of the land involved looks like. Because once it has been subdivided and paved, you are not going to 

get it back into farm ownership. We are going to have to get a lot 

higher than the price per bushel for corn that we have right now 

before people are going to take jackhammers to their subdivisions 

and start planting corn. 

So even though you can’t make a case that those easements are 

as cost-efficient as CTA, you can make a pretty good case that they 

are, in some areas, more important. 

CSP COST EFFECTIVENESS

Ms. DELAURO. I am going to follow that with a couple of the CSP 

questions and follow up on what Mr. Latham was saying. As you know, from 2004 to 2007, we provided almost $800 million in funding for CSP. Annual costs don’t account for long-term 

Federal obligations to continue 5- to 10-year contracts. Just based 

on our conversations, right now, in your estimation, Mr. Secretary, 

is the CSP program a cost-effective program? 

Mr. REY. I think there are things that could be done to make it 

more cost-effective than the way it was implemented in the first 

round. We have proposed some of those changes in our farm bill 

proposal. 

I think the program has proven very valuable in terms of providing some incentives and some examples of high-quality stewardship. And I think we can make it better, and that was the purpose 

of our proposals. 

Ms. DELAURO. Let me ask you this, though. It probably does put 

you on the spot, but I think that this is important. Because if you 

could invest only another dollar in CSP or another farm conservation program like what we have been talking about of your choice, 

where would you recommend that we spend that additional dollar? 

Mr. REY. I am probably going to have to spend the afternoon 

with Senator Harkin now. But I think if you asked me where the 

last marginal dollar that I have would go, my personal preference—and it is just a personal preference, not based on any empirical data—would be to put it into Farm and Ranch Land Protection or Grassland Reserve Program. And that is because I think 

that the consequences of the more intensive development of those 

lands are irreversible. 

You know, there may be some day in the future when you will 

give me $10 million more or $10 billion more, when the Federal 

budget is in a great surplus. And, at that point, I can reverse some 

of the effects of bad stewardship. But I don’t think I am ever going 

to convince people to tear down their homes and plant crops or put 

land back into farming. 


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CSP ENVIRONMENTAL BENEFITS

Ms. DELAURO. I am just going to leave this one for the record, 

because my time has run out and I have gone over. 

Beyond the anecdotal evidence which is out there, has NRCS 

made progress in estimating the program’s environmental benefits? 

And if that is the case, I would like you to describe the findings 

in the area on the CSP and the environmental policies. 

Mr. REY. We have done a lot in the process of trying to quantify 

what these programs are producing. And I would be happy to share 

for the record the complete part scores for all the programs. 

[The information follows:] 


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Ms. DELAURO. That is what I would like. I am not asking to you 

do that here in a second, but to lay this out, because I think that 

this is one of the big questions as part of this program. 

Mr. REY. Okay. 

Ms. DELAURO. Mr. Farr, I think you are up. 

SALINAS VALLEY AGRICULTURE

Mr. FARR. I just want to follow up on that earlier discussion. 

Have you ever put together a team of—not applying for grants, but 

a team made up of people like you were talking about—Corps of 

Engineers, ARS, Fish and Wildlife, NRCS, FSA, the ag extension 

programs, maybe even in this case USGS because we are the largest study of earthquakes in the area, Forest Service, Park Service—smart teams, I would call it, and take a look at the whole comprehensive plan of how to sustain agriculture in the Salinas Valley? 

Mr. REY. We have done that in the Klamath Basin. 

Mr. FARR. Yeah, I heard you say that. Klamath is complicated. 

But it is almost easier because you don’t have a lot of cities in the 

Klamath area. 

Mr. REY. It is largely a rural landscape. We have done it in the 

Sonoma Valley, as well with the Sonoma grape growers, kind of 

spurred the interest in that. 

Mr. FARR. What was the Federal link there? 

Mr. REY. We provided a lot of technical assistance to the work 

that they wanted to do, to try to develop a more comprehensive—— 

Mr. FARR. Was it an invite to come in? How does it get launched? 

Mr. REY. I think it was largely through the wine growers’ interests. And NRCS responded to it, joining Fish and Wildlife Service 

and NOAA Fisheries. 

Mr. FARR. That is really the only agriculture they have in that 

area, wine growers. And they are the Cadillac of growers. 

Mr. REY. There is some Forest Service involvement because we 

have land on the upper end of the valley. 

COLLABORATION TO PRESERVE AGRICULTURAL LAND

Mr. FARR. Is it hard to get them all going to a spot? 

I mean, we have some demonstrations that are phenomenal. I 

think that one of the greatest farmers in the United States lives 

in my district. He is a cattleman, Jack Varian. I took my staff to 

see him, and they were just awed by him just talking about the 

ground. And most of them had no idea about agriculture. And he 

has put all his ranch, 20,000 acres, into ag reserve. He said, you 

know, my five kids aren’t going to get to inherit one property. And 

he is bringing all the native grasses back. He is bringing back all 

the wildlife. He is doing it all without any money. He is just doing 

it on his own. 

And that is the kind of thing that his approach and that approach to sustainability—because he is looking at, how do I sustain 

the cattle business and five kids who are going to live here, who 

have grandchildren, on this piece of property forever? And he does 

a lot of recreation with, you know, limited hunting and so on. But 

it is fascinating because he has really thought about it. 


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And what happens, though, is that if the ranchers around him 

fail to stay in that kind of—it is going to ruin the cattle business, 

and it is going to end up in urban sprawl. So what you find is that 

the anathema of open agriculture is the urban invasions of kids 

getting all-terrain bikes and dogs chasing wildlife and cattle, the 

fencing and lots of roads. And, you know, all of a sudden, people 

who come from the rural area bring all kinds of urban stuff with 

them, and they want to live an urban lifestyle in the rural area, 

and it is just totally contrasting with what is essential for ag practices. 

So how do you stop all that? How do you make sure that the agriculture is the first line of defense to urban sprawl? And I don’t 

think we have really engaged in that very effectively. 

And I think the long-term ability of being able to grow in America and in California, which is still a lead ag state, this is the challenge. How do we bring agriculture into this century? It has essentially been respected, but now that the pressures on it are so great 

that people—multimillion-dollar operation in California of an almond grower. He told me he made $24,000 last year. And his kids 

are going to college. And he said, you know, if things don’t change, 

I can’t run this business, and lots of people are going to be unemployed, and I am going to have to sell the whole thing just to pay 

for my children’s education. 

That is the kind of thing that I am struggling with is, how do 

we make sure that we use all of the talent that we have collected— 

and we certainly have a brain trust—really apply it to these problems that you can’t just solve them inside a stovepipe? 

Mr. REY. I think what you are seeing develop, particularly in 

California but increasingly in other parts of the country, is collaborative work among a large number of parties to address those 

kinds of problems. The growth of the land trust movement in the 

last 10 years, for instance, has been—— 

RESIDENTIAL ENCROACHMENT IN RURAL AREAS

Mr. FARR. We are working with all of that. What I am saying is 

there needs to be something more than just this scrapping around 

at the local level for the next crisis. 

And how do we get that team together? We need this vision of 

the departments so the services that you represent and others can 

come together—my God, if we collaborate in this thing, we can 

really make a difference here. We can sustain agriculture in the 

United States of America in the most expensive—I mean, 36 million people living in California, and they all want to live in the 

rural areas. And we have to be able to keep agriculture economically viable, or they will all live in the rural areas. 

Mr. REY. But they are moving there with increasing frequency, 

spending a lot of money, fighting fires to protect their homes. 

Mr. FARR. Shouldn’t have built them there in the first place. 

Mr. REY. That is a hard case to make when the fire is burning. 

Mr. FARR. I know. Santa Cruz County I represented. We had 

earthquakes, fires. When the county said, ‘‘You built them in the 

wrong place; you can’t go back and rebuild them, so you are out,’’ 

it was very controversial. But we ought not allow—with FEMA and 

all those organizations, we ought not allow people to go back who 


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shouldn’t have built in the first place, and we shouldn’t bail them 

out, and they shouldn’t be able to build, get insurance or their 

bank loans. We have pushed this stuff to allow a lot of bad things 

to happen, and then they ask the taxpayers and Government to 

bail them out for a stupid decision. 

NRCS COOPERATION WITH FSA

Ms. DELAURO. Mr. Secretary, let me just ask a couple of more 

questions. I know Ms. Kaptur has one, and I will try to conclude 

with mine, and let Ms. Kaptur be the last question. 

And we appreciate your patience here. We are going to vote in 

a little bit as well. 

I want to talk about NRCS and FSA. Inspector General reports, 

audit report, August 2007, reviewed how NRCS and FSA were 

working together in California. The programs reviewed what was 

preserved, grasslands, emergency watershed protection program, 

for one State. OIG found FSA not communicating, FSA making millions of dollars in improper payments. We have land owners participating in both the farm subsidy in the conservation easement 

programs. Two agencies are supposed to share the information so 

that the public does not pay the land owner twice. So it really 

needs to have the two agencies coordinating to make the appropriate payments. 

What is more frustrating, however, was that OIG had made this 

same exact finding in an earlier audit of the same program in the 

same State. The earlier audit exemplified the need for the two 

agencies to get their acts together, improve their interagency communication. They had been talking about, OIG has, this issue as 

a major management challenge from at least 2004 to 2007. The 

most recent audit found NRCS still not communicating conservation easement information to FSA. As a result, FSA made a host 

of improper farm subsidy payments to easement-encumbered land. 

Let me just say this, because I think it is important. OIG reviewed 28 reported easements for three programs in only eight 

counties in California. At such a small scale, OIG identified about 

$1.4 million in improper payments. If you look at 50 States, 3,000 

counties, you can begin to imagine the large dollar amount that we 

are looking at, significant costs for the failure of two agencies to 

communicate. I don’t think you think it is acceptable. This subcommittee does not think it is acceptable. 

How would you characterize the degree of coordination, cooperation and communication between NRCS and FSA? What steps are 

being taken to improve the communication between the two agencies? And more concretely, what actions have the two agencies 

taken to address the findings, the repeat findings, in the OIG 

audit? 

Mr. LANCASTER. Madam Chairwoman, we agree it is completely 

unacceptable. We have provided additional training to our folks. 

What is unfortunately more embarrassing is I don’t think it is a 

result of a lack of coordination between FSA and NRCS. It was a 

lack of communication between NRCS employees. What had occurred when we look at the report, the local NRCS office believed, 

because the easement programs are coordinated through the State 

office, the local office believed that the State office was commuVerDate Nov 24 2008 00:59 Apr 23, 2009 Jkt 048543 PO 00000 Frm 00078 Fmt 6633 Sfmt 6602 E:\HR\OC\A543P2.XXX A543P2

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nicating the information to the Farm Service Agency so they would 

eliminate those base acres. The State-level NRCS employees believed that the local office was communicating to FSA the terms of 

the easement and reduction of base acres. 

I believe that the coordination between the two agencies is very 

strong. I think that the relationship is very strong. The training 

has been provided, but this was clearly an incident where our staff 

internally was not communicating with one another on who was 

supposed to notify the Farm Service Agency. So it was more a coordination—— 

Ms. DELAURO. If you can lay out what has been done to address 

this issue and to specifically address what the OIG recommendations are and if they are being complied with. 

And as you mention that—let me just go back for one second before I forget this, with regard to the question on CSP and the environmental issues. I know it was the part assessment. What I want 

to know is, what has happened since that assessment? So that goes 

back to the prior question that I asked about the CSP program. 

But, really, this is now 2004 to 2007. You have to lay out for us, 

you know, the stopping of this lack of communication, lack of coordination, internal difficulties with State agencies, how is this 

going to be ended so that we are not looking at these overlaps? And 

we have just done this one area, you know, this one area. 

Mr. LANCASTER. I would be happy to provide that for the record. 

[The information follows:] 


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COST OF CEAP

Ms. DELAURO. Let me ask a question about the CEAP program, 

which you talked about in your testimony, getting a handle on, 

again, what environmental benefits USDA is generating in the 

farm bill conservation program. 

Since 2004, what has been the total cost of CEAP? What level 

of funding are you assuming in 2009? My understanding is that the 

goal was to have the monitoring and evaluation data completed before the 2007 farm bill to better inform the public and Congress as 

it deliberated over the new farm bill. Again, it is my understanding 

that this program, CEAP, was to help justify the massive increases 

in conservation spending on the 2002 farm bill. 

We are at the tail end of this farm bill process; at least we hope 

we are. And to our knowledge, NRCS has yet to release any CEAP 

performance information. After more than 4 years of funding, what 

has been the delay? And when will Congress be able to review the 

monitoring and the evaluation results? 

And again, let me just say this to you. We are coming to the next 

round of the farm bill. You are optimistic about it. Why should we 

continue to fund CEAP if it is not providing the public information 

it was set out to provide? 

Mr. LANCASTER. Madam Chairwoman, I share your frustration. 

This is a program that USDA initiated in 2004 based on its interest in quantifying these benefits. And it did not meet the target it 

was necessary to provide good input for the 2007 farm bill. 

As I indicated in my testimony, we will provide initial cropland 

data in 2008. I will provide for the record the breakdown. 

This is something that I think is important to note. This is not 

an NRCS initiative. This is a USDA initiative where we have significant contributions from the Agricultural Research Service, the 

CSREES, USGS, EPA, Fish and Wildlife Service. This is one that 

we have partnered with across Government, with the private sector, to get this data so that we can truly assess this—— 

[The information follows:] 


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Ms. DELAURO. So none of it is available for this current farm 

bill? 

Mr. LANCASTER. What we have been able to produce to this point 

is synthesis data on what research has been collected, so that we 

have provided that in a synthesis. But we have not been able to 

mature our models to the point that we are able to provide that 

specific detail on a watershed basis. We do expect in 2008, later, 

in summer, to have that data for the upper Mississippi River basin. 

We certainly will share that with the Committee. 

It has been one of my priorities since I have joined the agency. 

I have required monthly meetings on progress because it is something that I think is critical for all of us, if we are going to continue 

to make investments in all of these programs, to know what is the 

result of that on the ground and how can we quantify benefits so 

that we can move to that next phase of conservation Under Secretary Rey has talked about, in terms of market-based rewards for 

producers, so we can quantify those practices. 

VALUE OF CEAP

Ms. DELAURO. So it is your view that we should continue the 

program, even though it doesn’t provide the information, but we 

are going to get the information? 

Mr. LANCASTER. It is providing some information, at this point. 

What it is not—we are not able to do—we are currently moving forward with the peer review of that 2008 data. Our intent is that 

this data will be peer-reviewed and science-based so that there will 

be no questions about what the data says. 

Ms. DELAURO. And its value. 

Mr. LANCASTER. And its value. That is correct. This is something 

that—as you know, the peer-review process takes, in some cases, 

years before that information is published. We expect to have that 

upper Mississippi River basin watershed study completed now this 

year through that peer-review process. 

So I believe it has helped us. We are looking at better understanding from each case study on how those programs work. I will 

give you an example. And I would be happy to share this with the 

Committee. In Kansas, one of the CEAP projects is around Cheney 

Lake, which is the drinking water supply for the city of Wichita. 

What they were able to determine from CEAP is that 80 percent 

of the loading occurring in that lake was from an ephemeral gully, 

where, in many cases, we were targeting livestock practices and 

other areas and exclusions. What we are able to determine through 

CEAP is that the primary contributor to the water resource impairment was ephemeral gullies in this cropland. So we have been able 

to refine our practices, to refine what we are focused on within that 

watershed to target that resource concern. 

So we have some data, but we don’t have that published, peerreviewed data at this point. 

Ms. DELAURO. Let me just say this to you, because I think you 

make a case on the value of the program, and I am not going to 

doubt you on the value of the program. But what I am going to do 

and what I believe the subcommittee is going to do is to watch to 

see whether or not we are just funding something to which there 


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really is a very limited return in terms of what it is supposed to 

do. And I think you understand that to be a fair response to this. 

And I have no reason to doubt that it is very valuable information, but I want to make sure it works. And if there are other parts 

or the other agencies that are not cooperative in this effort, that 

would be good for the subcommittee to know that as well. Let me 

just ask you, if you cannot get us timely data, let us know that, 

so that we can address that issue as well. 

Truly, Ms. Kaptur, the final, final question that I have here. 

FEDERAL ROLE IN RC&D SUPPORT

I am not going to go through all RC&D, because every year it 

comes up. Every year there are deeper cuts in what we are doing 

here. Two questions. 

You obviously view this as poor performance, lack of performance. There is some sort of a performance criteria that you are basing your activities on. Has the agency asked the councils to develop 

program improvement proposals? If the RC&D found previous proposals were problematic, what solutions have they offered to you to 

address your concerns with the program? And if the support for 

these programs is eliminated, what do you foresee happening with 

the existing RC&D areas? And have you surveyed all 375 councils 

to understand how your proposal would impact them? 

Mr. REY. Going with your last questions to your first ones, we 

have talked with the RC&D councils. They are, as you would suspect and have heard, duly concerned about the loss of the Federal 

support. At the same time, it is our expectation, given the vibrancy 

of the way that they have done their job, that most, if not all, of 

them would continue even without the Federal support. 

The Federal support was envisioned originally as a catalyst to 

get these councils started and to allow them to have the financial 

support that they could enjoy as they went about raising the money 

associated with doing the things they do in the conservation and 

development area. Now, some of these councils have been around 

for over 20 years, so this is no longer a catalyst. You know, it is 

viewed maybe more accurately as an entitlement. 

The issue with this proposal is not that what the councils are 

doing is inadequate or, you know, in any way unimportant. It is 

being done well, and the work that is being done is important. The 

question that is presented in our proposal is, what is the appropriate Federal role? And is it to sustain these councils with a set 

amount of entitlement money indefinitely in the future? Or is this 

a case where the Federal Government has empowered innovation 

that can continue on its own? And should we take the money and 

look for other things to do which might produce results that 

wouldn’t occur but for the Federal investment? 

Ms. DELAURO. What will you do if some of them do go away? 

What will you do with those areas? 

Mr. REY. My guess is they won’t go away entirely. They will combine so there will be mergers of the weaker ones merging into the 

stronger ones. 

Ms. DELAURO. Ms. Kaptur. 


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NRCS OBLIGATIONS BY STATE

Ms. KAPTUR. Thank you, Madam Chair. 

I wanted to just have you guess as to the NRCS budget and what 

percent would you guess would be spent west of the Mississippi 

and south of the Mason Dixon Line in your total budget? Is it a 

majority? 

Mr. REY. I would say those two together probably would constitute a majority. But we actually have figures on what we spend 

in every State, so we can get you those. I am just having a hard 

time remembering off the top of my head. 

[The information follows:] 


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WATERSHED MANAGEMENT

Ms. KAPTUR. Okay. I saw an interesting map recently of the 

Great Lakes, and in two tiny little spots they represented the size 

of the Everglades and Chesapeake Bay. And it was very interesting 

to just sit back and contemplate this enormous fresh water asset 

we have up in the Great Lakes region. 

And listening to some of my colleagues and looking at some of 

your budgets dealing with irrigation, for example, and the amounts 

of money that we spend west of the Mississippi on water-related 

issues, I am very interested, as you can tell from prior questioning, 

in better managing the fresh water asset that we have. The most 

important fresh water asset in the world in our region, and I don’t 

think we are doing the best job of it. So I just want to make sure 

you are hearing me on this. 

And we, in this century, have to do a lot better than in the past, 

with the size of the population. When I was born, there were 146 

million people in the United States. There are now 300 million, and 

by 2050 we will probably have half a billion, 500 million, people in 

this country. So these pressures are going to grow, and the fresh 

water and its better management is a national imperative, in my 

opinion. 

So in terms of the Great Lakes, I would just point your attention 

there, making sure that we are using every tool that we have to 

better manage that. 

And if I use my watershed as an example, at least one of the two 

watersheds I represent, as an example of how well or poorly we are 

doing, America needs to do a lot better. Colorado has a much better 

sense of its water future than does our region, I think because we 

have been blessed with bounty, and we really haven’t thought 

about what portends down the road. 

And so I just direct your attention to the Great Lakes region. 

Let’s take a look at what is being expended there, maybe use the 

pilot there as an example of what needs to be done in other places. 

But America has to be much smarter about its management. I 

heard, Chief Lancaster, about what you said, that you work with 

individuals. I heard that very clearly. And yes, that is part of your 

mission. But I hope part of your mission is also the bigger picture, 

so that those individuals are part of a bigger plan. Because sometimes those individuals either aren’t part of your conservation efforts or they don’t know what is right to do. And we need to somehow have a broader vision that is shared across some of these regions, whether it is California, whether it is Ohio, whether it is 

Connecticut, so people act in their own self-interest. 

In working on this watershed study in our region, it came out 

that one of the ways that urban people could help, since they live 

in the bowl of this watershed, is to install rain gardens. We need 

10,000 rain gardens now. That is not going to solve all the problems, but urban people can help. How do we reach them? We have 

to reach them through the media. So having a bigger vision, 

though, to which they are called I think is also part of NRCS’s job. 

And I know you know that. But planting along strips—and not 

every person is a farmer. If people see what areas need to be planted, and they are called to do that, maybe they will help. 


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So I think the broader vision is as important as what individual 

land holders might do. And we have to lead them in the right direction by that broader vision. So I hope you consider that as part of 

your mission as well. 

Mr. LANCASTER. Absolutely. And I hope I didn’t leave the Subcommittee with the impression that we aren’t focused on watershed 

approaches where we are looking at the entire landscape. My reference was specifically to the financial system’s dollars, where 

those are targeted in individual contracts. So it is either with the 

individual private land owner if we are doing a cost-share program. 

If we are doing an easement or enrolling individual parcels, we are 

not able to do really group contracts under those programs. 

And to address your first question about the scope, just looking 

at the allocations, I think, clearly, you know, the West and the 

Southeast get the bulk of the EQIP dollars. With our programs, we 

use an allocation formula that is resource-based. There is an artificial factor associated with that, though. 

We are required through the farm bill to ensure that any State 

that would not get a certain level of funding, $12 million in this 

instance, from our farm bill programs based on our resource allocation formula which looks at a number of items, including crop land, 

pasture land, range land, listed streams, coastline, especially crop 

producers, air quality—those all go to our resource-based factor. 

But we also are required, if a State does not receive a certain 

amount of funding based on that, to pull money from States to 

those States that don’t receive $12 million. So we have pulled on 

average about $50 million a year from our normal allocation to 

States, to redirect those States so that they meet that $12 million 

floor. 

Ms. KAPTUR. Thank you. 

You know, Madam Chair, I don’t know that we can do this this 

year at some point, but I personally, and I think other members 

like Congressman Berry, are very interested in the water issue nationally. And as we look at the next 100 years, having good minds 

come in and talk to us about how we look at our country and what 

will be happening with the draining of the Ogallala, for example, 

what are Congressman Berry’s problems in the Arkansas region, 

what are Congressman Etheridge’s problems in the Carolinas, what 

are our needs in the Midwest where we sit right on the Great 

Lakes? 

I don’t know who the best water experts are there at NRCS, but 

I think there are really good minds that think about this. And if 

I could suggest perhaps just for a briefing on the subject of water, 

inviting some of the authorizers who might be interested in these 

topics, and I think we would find quite an interest. It would help 

us secure more clarity in our own minds as we handle these various programs across different accounts. 

AGRICULTURAL OPERATOR DEMOGRAPHICS

Finally, in Mr. Lancaster’s testimony, you have outlined a number of demographics of the customer base of agriculture, 2002 census, indicating principle operator increases across a range of ethnic 

groups: 8.6 percent for African Americans, 20 percent for Native 


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Americans and Alaskans, 13 percent for women, and an extraordinary 51.2 percent for Hispanic and Latino operators. 

This interests me a great deal. I don’t know if those percents 

looked so big because the base was so small that they started with. 

I would be very interested in what the breakout is, of where that 

might be, and how we could do a better job of linking some of the 

programs at USDA to assist those individuals and some of the populations that are in those same categories that are the most undernourished ones in this country. 

I am interested in what those numbers tell us. 

Mr. LANCASTER. I am happy to work with my colleagues at the 

National Ag Statistics Service to come in and provide information 

to you. 

Ms. KAPTUR. Thank you. 

Thank you, again. 

Ms. DELAURO. Thank you, Ms. Kaptur. 

Let me thank you, Secretary Rey, Chief Lancaster, Mr. Dondero, 

Mr. Steele, thank you very, very much for being here. We did go 

over a half-hour on our time. We appreciate your patience, and we 

appreciate the opportunity for the dialogue. It has been very, very 

informative and helpful. Thank you very, very much. 

Mr. REY. Thank you. 

Ms. DELAURO. The hearing is adjourned. 


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(307) 

WEDNESDAY, APRIL 9, 2008. 

MARKETING AND REGULATORY PROGRAMS 

WITNESSES 

BRUCE I. KNIGHT, UNDER SECRETARY, MARKETING AND REGULATORY PROGRAMS 

LLOYD C. DAY, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE 

CINDY J. SMITH, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION SERVICE 

JAMES E. LINK, ADMINISTRATOR, GRAIN INSPECTION, PACKERS AND 

STOCKYARDS ADMINISTRATION 

W. SCOTT STEELE, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE 

INTRODUCTION OF WITNESSES

Ms. DELAURO. The hearing will come to order. Thank you, Under 

Secretary Knight, for being here, and Mr. Day, Ms. Smith, and Mr. 

Link, and, of course, what would the subcommittee hearing be 

without Mr. Steele. So, we thank you all for joining us today. 

OPENING STATEMENT

The marketing and regulatory programs mission area carries a 

big responsibility, the safety, health of agriculture, as well as for 

its economic health and the order of our markets. This became evident several months ago during the historic 143 million pound beef 

recall involving the Westland Hallmark plant in southern California. As you know, over 50 million pounds of that recall beef was 

distributed to the National School Lunch Program. However, until 

this recall, a lot of people probably did not realize that the Agricultural Marketing Service is responsible for procuring commodities 

for all federal food assisted programs, including the school lunch 

program. 

In addition to procuring the commodities, the Agricultural Marketing Service is responsible for ensuring that the products it buys 

meet federal purchasing specification and that food suppliers comply with eligibility and food quality requirement. The agency has 

the authority to develop and revise food safety standards as needed 

and, in fact, it has worked with the Food and Nutrition Service and 

Food Safety and Inspection Service officials, as well as potential 

vendors, to develop specifications for product formulation, manufacturing, packaging, sampling, and testing, as well as quality assurance programs. In general, AMS has higher food safety testing 

standards than the Food Safety and Inspection Service, because the 

agency purchases food for programs that feed infants, children, the 

elderly, and other immune compromised persons. 


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For example, E. coli and salmonella, the agency has higher safety 

standards, but for all beef products that test positive for these organisms, AMS standards prohibit the delivery of the product, 

whereas under certain conditions, FSIS standards would allow beef 

products that test positive for these organisms to be used for commercial sale. Of course, we could have the best standards on paper 

in the world, but they would become ineffective if an agency is not 

held accountable for implementing it properly. 

While a 2005 report from the USDA, Office of Inspector General 

found that Agricultural Marketing Service coordinates effectively 

with Food Safety and Inspection Service and the Food and Nutrition Service on Food Safety, I am concerned about the agency’s potential failure to provide adequate oversight of the operations of 

Westland Hallmark. 

In preparation for this hearing, I wrote Mr. Day, asking him to 

provide the subcommittee with some information about the recall. 

Among the information I requested included a list of actions that 

AMS has taken to ensure that Westland Hallmark is being held 

liable for the recall pursuant to USDA policy. I, also, asked about 

the role the agency is playing in the recovery of the 143 million 

pounds of beef that was recalled. Thank you, Mr. Day, for your 

timely response to my letter and I look forward to discussing your 

answers in detail during the question and answer session. 

There are, of course, several other important issues to discuss 

during this hearing. One critical issue is country of origin labeling. 

In the fiscal year 2008 Omnibus Appropriations Bill, we included 

a time line that would lead to the implementation of country of origin labeling by September 30, 2008. Unfortunately, USDA missed 

the first deadline, which was for AMS to republish a proposed rule 

for covered commodities, beef, fruits, and vegetables by January 17, 

2008, almost three months past that deadline and we are still waiting. I realize that the provisions on COOL and the farm bill are— 

represents an agreement that was reached among the various 

stakeholders, so I understand that USDA may, therefore, be waiting for the farm bill to pass. However, USDA does not seem to have 

a problem making assumptions about the new farm bill in their fiscal year 2009 budget request, though it is interesting that they 

would ignore it when it pertains to COOL. 

I would also like to discuss the National Animal Identification 

Program. My position on this issue has always been clear. I support a mandatory animal ID program. I am concerned and frustrated by the seemingly slow and expensive progress on implementing an effective animal ID system in this country. Congress 

provides the funding proposed in fiscal year 2009 in the budget, 24 

million dollars. Taxpayers will have given USDA approximately 

152 million dollars over the past five years for the National Animal 

ID Program with virtually nothing to show for it. That was why I 

surprised, Mr. Knight, when you said in February that Congress 

was an obstacle to implementing the program. I believe that Congress is doing its part, so we need to discuss how USDA and 

APHIS can follow through on their part. 

Mr. Link, I have not forgotten about the Grain Inspection, Packers and Stockyards Administration. During last year’s hearing, we 

had a discussion about auditing meat packers and I want to follow 


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309 

with you on that. I, also, see that this year’s budget request has 

an increase in personnel to strengthen GIPSA’s compliance reviews 

and investigations and I hope that we can discuss that, as well. 

Thank you all for being here. I look forward to hearing your testimony, as well as your responses to our questions. And with that, 

let me recognize the ranking member of the committee, Mr. Kingston. 

Mr. KINGSTON. Thank you, Madam Chairman. I do not have an 

opening statement. 

Ms. DELAURO. Then, Mr. Knight, we will move to you for your 

testimony. And as you know, the full testimony of all of the witnesses will be made part of the record. So, we ask you to summarize it. 

Mr. KNIGHT. Certainly. Madam Chairwoman DeLauro, ranking 

member Kingston, members of the subcommittee, good morning. I 

am Bruce Knight. I am pleased to testify before you today. I would 

like to begin by introducing my colleagues with me today. New at 

the table with you is Cindy Smith, who was appointed the Administrator, Animal and Plant Health Inspection Service in September 

of 2007. Cindy is the first woman to head the agency and she 

brings with her a great deal of vision, experience, in the work that 

she did at overhauling our biotechnology laboratory services. Also 

joining me today, of course, is Administrator Day, as well as Administrator Link, who are familiar faces at this stage before the 

committee. 

The three agencies have made real progress in a number of key 

areas this past year. APHIS has been working collaboratively to 

monitor and slow the spread of H5N, one highly pathogenic avian 

influenza overseas and to expand prevention and protection against 

the disease here at home. APHIS has also further progressed on 

the National Animal Identification System. We now have approximately 33 percent of all premises in the country registered in the 

system. AMS has provided voluntary grading systems to a wide variety of commodities, including virtually all U.S.-fed beef. The number of regulatory actions and investigations that GIPSA’s packers 

and stockyards program conducted in 2007 exceeded 2,300 investigations. 

The President’s fiscal year 2009 budget proposes that MRP agencies carry out programs of close to two billion dollars. Four hundred and fourteen million dollars would be funded by fees charged 

to the direct beneficiaries of MRP services, 457 million would be 

generated by Customs receipts. On the appropriations side, the 

President’s budget request for APHIS is about 919 million dollars 

for salaries and expenses, seven million dollars for repair and 

maintenance of buildings and facilities. The request is approximately 77 million dollars for AMS and about 44 million dollars for 

GIPSA. The budget proposes user fees that if enacted, would generate about 57 million dollars in savings to the U.S. taxpayer. 

Let me highlight very briefly a few of the major activities we are 

engaged in. First, we share the agriculture quarantine inspection 

mission with the Department of Homeland Security. Our coordination with DHS, under Cindy’s leadership, has increased significantly. Last April, APHIS and CBP formed a joint task force to 


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310 

evaluate and address stakeholder and congressional concerns and 

strengthen the agency’s partnership. 

As I have said, we have also made significant progress with the 

voluntary National Animal Identification System. Animal ID is and 

will continue to be one of USDA’s top priorities. Our ultimate goal 

is 48-hour traceability, that is, to have data in our hands within 

48 hours of an incident. The initial focus in development animal ID 

has been encouraging farmers and ranchers to register their 

premise. Today, we have more than 457,000 premises registered 

nationwide out of an estimated 1.4 million. That is about 100,000 

more than when we last appeared before you. While we are continuing our efforts to encourage premise register, we are now focusing on moving towards our goal of 48-hour traceability. APHIS has 

developed a business plan for increasing traceability and accountability that sets clear priorities, focuses on areas where we can accomplish the most, and building on the investments we have already made. 

NAIS cooperative agreements with states, tribes, and industry 

organizations have played a key role in the education and outreach 

and increasing premise registration. For each and every agreement, 

we have in place work plans with the cooperators that define the 

project’s expectations and goals. We believe that these cooperative 

agreements are an effective means of leveraging our resources and 

I assure you that we will continue to closely monitor these agreements to ensure that our cooperators meet or exceed performance 

standards. 

NAIS’s primary purpose is to provide critical animal health data, 

but the traceability also creates an enabling platform for marketing. Earlier this month, our Agricultural Marketing Service released a draft business plan to further NAIS implementation that 

is coordinated and is supportive of the APHIS business plan. 

Among other strategies, AMS is strongly encouraging the use of 

NAIS participation to identify animals involved in USDA’s process 

programs and the quality systems assessment programs. This immediately provides the producer a twofold reward for a single investment. It ensures trace back to their animals for herd health 

reasons, provides benefits for marketing value added animals domestically and internationally. 

An official ID will also assist in meeting the objectives of the 

country of origin labeling program by identifying the origin of cattle upon arrival in the harvest facilities. Current requirements for 

COOL call for labeling of most red meat and produce on September 

30, 2008. However, both the House and Senate versions of the farm 

bill would make changes in COOL. Therefore, after the farm bill 

conference is completed, we will have a very short time period to 

turn those changes into regulations. Secretary Shafer has pledged 

to this committee that we would have the regulations operable by 

September 30. I will do everything possible to make that happen. 

Regardless of the final determinations on the specific labels that 

would be required, we want to be clear that producers, who participate in official ID systems today, will essentially have a safe harbor under COOL with animal ID, that is, that packers, retailers, 

producers, who rely on official ID to determine the origin of their 

livestock and poultry, will be recognized by the Department as havVerDate Nov 24 2008 00:59 Apr 23, 2009 Jkt 048543 PO 00000 Frm 00310 Fmt 6601 Sfmt 6601 E:\HR\OC\A543P2.XXX A543P2

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ing demonstrated compliance with the COOL programs recordkeeping requirements. 

Madam Chairman, members of the committee, thank you. I will 

be pleased to answer any questions you may have. 

[The information follows:] 


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NATIONAL ANIMAL IDENTIFICATION SYSTEM

Ms. DELAURO. Thank you, very much, Mr. Knight. Mr. Knight 

and Ms. Smith, there is an extended discussion in your testimony 

regarding APHIS’s continuing work on a national animal identification system. In particular, let me thank you for your agency’s effort 

and work with my staff to provide helpful information about your 

work on implementing NAIS. That said, I am sure that it comes 

to no surprise to you that I am concerned and frustrated by what 

is a seemingly slow and—what is, not—is a seemingly slow and 

very expensive progress on implementing an effective animal ID 

system in this country. 

The subcommittee and the taxpayers have given USDA enormous sums of money for animal ID, the fear of funding. If Congress 

provides the funding proposed in the 2009 budget that you have requested, a total of 24 million dollars for the animal ID program, 

as I said in my opening remarks, this will be 152 million dollars 

for the program and we still have no meaningful system in place. 

This is a massive investment that the public has already made in 

the system and as compared with the delay in the Department’s 

delivery. And so I will repeat, Undersecretary Knight, that I was 

really disappointed to hear your comments, and let me quote, and 

this was in February, implying that Congress was the obstacle, ‘‘if 

they come in less than 24 million dollars, they will be making a 

decision to slow down implementation of animal ID and will be 

jeopardizing our nation’s herd.’’ 

So, if we want to tally our delivery accomplishments talk about 

jeopardizing the nation’s herd, let us do it. Congress has provided 

128 million dollars to date in good faith to implement NAIS. Let 

us tally some of APHIS’s accomplishments to date. Out of more 

than 1.4 million premises, APHIS has only registered to date about 

457,000 feed lots, sales barn, less than 32 percent of your goal after 

four years and almost 128 million dollars. One state, one state, 

Wisconsin, comprises one-seventh of the total registrations that you 

have achieved to date. I note for the record, that it is a mandatory 

program in Wisconsin. At your current rate of enrolling about 1,500 

premises per week, just back of the envelope, I calculate it will 

take APHIS another 13 years to achieve its goal of 100 percent registration. Obviously, APHIS will miss its January 2009 goal to 

have all registrations complete. APHIS is reportedly years away 

from having a 48-hour traceability for beef and dairy cattle. 

If the Department is going to have a credible and effective animal ID system, you will have to change the Department’s approach. Given the Department’s management of the program over 

the past four years, please explain why the committee should provide the 24 million dollars you are requesting. What will APHIS do 

with the 24 million dollars? What is your time line for achieving 

the 48-hour trace back for all species? 

Mr. KNIGHT. Thank you, very much, for the question and let me 

add that as I have been asked to promote and manage and move 

animal ID forward, I have done a number of interviews to do that 

with the media. And that was not the best choice of words on my 

part and I sincerely apologize to you for that inopportune choice of 

words. 


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However, let me—— 

Ms. DELAURO. Thank you and I say that on behalf of the whole 

committee, because I think this committee has been very generous 

with its resources to have this system implemented. So, we thank 

you for that. 

Mr. KNIGHT. Very generous with the resources and very patient 

with the performance. Now, as to the work that has been going on, 

on animal ID, some of the more difficult things to quantify is the 

actual advancements that have been made behind the scenes over 

the last several years on building the databases, the IT investment, 

the interconnectibility that will improve upon the 48-hour 

traceability. That has been a significant investment that is coming 

on line and becoming operational as we move forward. 

We, also, see with the new business plan that was published in 

December of last year that we have very specific goals now by species on how to achieve 48 hour traceability. We think that we have 

48-hour traceability to date with poultry because of the experience 

with the National Poultry Improvement Plan and the kind of work 

that has been done historically with exotic Newcastle disease and 

avian influenza. 

We are almost to that point with pork as well, and the pork industry has stepped forward. They have set specific goals to help us 

in getting 100 percent of the commercial operations of pork enrolled in premise registration in moving forward. We should be able 

to achieve around 90 percent of the sheep industry at 48-hour 

traceability by the 2009 date as well. And so, we will have knocked 

off three of the major species and that is outlined in the business 

plan. 

That then has our focus from the business plan really on cattle, 

both dairy and beef, and the kind of inroads that need to be made 

there. We do believe that by 2009, at the end of 2009, we should 

be able to achieve a critical mass that will greatly improve 48-hour 

traceability. That is a goal of 70 percent of the cattle herd, meaning 

the number of cattle and the number of operations enrolled in animal ID. We had a major meeting last week at the National Institute for Animal Agriculture, seeking dialogue with the industry 

about how achievable each of these goals are and how to move forward. 

There are also embedded in the business plan a series of goals 

for critical control points and each of those goals vary by those. But 

with the critical control points, anytime a large number of animals 

come together to be intermixed and then get back into the countryside, there is a great deal of risk there associated with that. So, we 

have goals for premise registration for fairgrounds, livestock barns, 

packing facilities, each of those, all that are detailed in that business plan, to be able to, to really be able to get strategically at 

where to go. 

Perhaps the most significant aspect of the business plan that will 

dramatically move animal ID forward has been connecting it to the 

existing disease eradication programs and being able to really tie 

it to those programs. And so, each of Cindy’s program managers 

that are handling those programs are in the process of embedding 

animal ID into the work that is being done on bovine tuberculosis, 

the brucellosis program, the scrapie program, rabies, each of those, 


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because we really need to have measurable goals that we can hold 

the agency and ourselves accountable as we move forward. 

Ms. DELAURO. If you could fully get back to me on what you specifically are going to do with the 24 million dollars and give me the 

time lines again on the—you said—is it 2008, where we are dealing 

with poultry, with pork. Where are we going to be in 2009 for these 

other efforts? And the work that you said that you are doing with 

fairgrounds and these other areas, when do you propose to have 

the activities completed in these areas for us to take a look at? My 

time has expired. Mr. Kingston? 

[The information from USDA follows:] 


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PROPOSED USER FEES

Mr. KINGSTON. Thank you, Madam Chair. Mr. Knight, thank you 

for being here. One of your assumptions in your budget is that you 

are going to get 57 million in fees. Now, in the remote possibility 

that this committee does not agree with that, it looks like we will 

have to cut your budget 57 million dollars. Where would you propose that that cut come from? Yes, look at Mr. Steele. [Laughter.] 

It was his idea anyhow. 

Mr. KNIGHT. We would obviously need to go through each of the 

programs in the event of that and look very closely and very surgically at where we could generate cost savings in the event of the 

user fees not providing the expected income. 

Mr. KINGSTON. Well, I am certainly not picking on you or these 

agencies, but it is a practice for any administration to say, oh, yes, 

and the budget assumes collection of a user fee, which Congress 

never goes along with. So, basically, any budget that has a user fee 

that has not been signed off on by Congress is that amount of 

money over budget. So, we are already starting at 57 million dollars over and I would like you to take that back to Secretary 

Schafer and our good friend, Mr. Nussle, who—you know, these 

guys from Iowa, you have to watch anyhow. But, that is something 

that I think we should probably outgrow on a bipartisan basis in 

this town. 

I wanted to ask you about the chicken ban and let you talk a little bit about that. And do you think the ban will stay in place in 

2009? And all the problems with Chinese chicken, is that over with 

now? 

Mr. KNIGHT. Mr. Kingston, I am really not in the position to address the chicken ban with the committee. But, I would please to 

suggest to you Dr. Raymond to follow-up. 

Mr. KINGSTON. Okay. We can follow-up with it. 

Mr. KNIGHT. Yes. 

SCHOOL LUNCH PURCHASES

Mr. KINGSTON. Let me ask you this and Ms. Smith, I think this 

would come to you, and I am not quite sure, in terms of marketing, 

and the Chairwoman mentioned it in her opening statement about 

school lunch programs. What is your relationship, in terms of animal inspection? 

Mr. KNIGHT. If I could ask Mr. Day to address the school lunch 

program. 

Mr. DAY. I am trying to understand the question about—I do not 

quite understand what you are saying. 

Mr. KINGSTON. Well, I am trying to understand what is the relationship between beef that could have been contaminated and the 

school lunch program and your department. 

Mr. DAY. Right. Well—— 

Mr. KINGSTON. And the Chairwoman mentioned it in her opening—— 

Mr. DAY. Right. 

Mr. KINGSTON [continuing]. Opening comment. 

Mr. DAY. AMS procures the meat that goes into the school lunch 

program. And as the Chairwoman mentioned, we follow the FSIS 


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guidelines for food safety. But because these are vulnerable communities, children and the elderly mostly, we have additional requirements, as any large buyer does, for the product that we purchase. And with that, what we do is we go in—first, for someone 

to do business with us, they have to request to do business with 

us. Then, they have to submit a plan on how they are going to adhere to all of the standards that we have in place, which is above 

and beyond just traditional safety standards. Following that, we do 

an audit to ensure that they can comply to that. Once that happens, then they are an eligible vendor and they are able to bid on 

a procurement announcement that we make for beef, chicken, vegetables, fruits, whatever. 

Once that happens and we award a bid, we have a person on 

plant, at that facility, to ensure that they are compliant with our 

standard. In addition to that, we test every lot for microbial pathogens. And as the Chairwoman mentioned, if we find microbial 

pathogens, they cannot submit that lot into the school lunch program. So, we have, indeed, a very intense surveillance of these programs to make sure that they are in compliance, above and beyond 

standard food safety. 

Mr. KINGSTON. Do the compliance issues go beyond the testing 

of the product and go into, say, business practices? 

Mr. DAY. Yes, indeed. In fact, and we audit that on a regular 

basis. 

Mr. KINGSTON. Well, one of the concerns I have from some poultry manufacturers is that they are playing by the rules, as respects 

the legal aliens and others are not. And if they are both competing 

on the school lunch program, it puts the one, who is—— 

Mr. DAY. Right. 

Mr. KINGSTON [continuing]. Going loose on I&I and gives them 

a competitive advantage. Do you guys get into that at all? 

Mr. DAY. We do not get into that. That would be DHS. 

Mr. KINGSTON. If there was a legitimate complaint, could you be 

helpful, in terms of getting it to the right spot? 

Mr. DAY. I do not know the answer to that, but I will—— 

Mr. KINGSTON. If you could give me the name of who I could talk 

to about a specific case, that would be helpful. 

Mr. DAY. Well, you could certainly pass that information to me 

and I could investigate within the interagency as to how that process works. 

Mr. KINGSTON. Okay, thank you. And I am out of time. 

Ms. DELAURO. Mr. Boyd. 

QUARANTINE EXPORT FACILITY

Mr. BOYD. Thank you, Madam Chair. And Mr. Knight, gentlemen, Ms. Smith, thank you for your service. I have three brief 

questions that I would like to get answered in the few moments 

that I have here. 

Mr. Knight, last week, you met with Florida cattlemen about the 

Indiantown in Florida, Quarantine Export Facility, cattle export facility. I would like for you to share with the committee your conclusions after that meeting and what can we do together to make 

Indiantown a viable facility, to ensure that our cattle industry has 

a place to export their stock from. 


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Mr. KNIGHT. I met, as you are aware, I met with the Florida 

cattlemen on the Indiantown facility. We are resolved to try to assist them in finding creative ways to address their issues. For the 

committee, this is an export facility that does not meet official 

standards and specifications and needs to be upgraded. It is a rather nominal investment in infrastructure, they are looking for assistance on doing. Within APHIS, we lack the grant funds to be 

able to address that and so we have been trying to open doors within the Department to be able to do that. We are going to continue 

to work with them on how to get that facility to standards. Certainly, an export facility for Florida cattlemen, as we start to open 

these markets in Central and South America for live cattle, will be 

very desirable for all of us. 

Mr. BOYD. The closest export facility, I understand, is in Texas. 

Mr. KNIGHT. That is my understanding. And with the recent 

opening of Mexico for live cattle exports, we have got a tremendous 

marketing opportunity for heat tolerant cattle throughout the 

southeast and we need this additional facility. 

Mr. BOYD. Mr. Knight, can you share with the committee in writing what the cost for upgrading that facility to make it viable 

would be? 

Mr. KNIGHT. We will. We have been working closely with the 

cattlemen. They have been talking about a quarter of a million dollars, but we will get a more precise number for you. 

[The information follows:] 

COST TO UPGRADE INDIANTOWN (FLORIDA) QUARANTINE EXPORT FACILITY

Mr. Knight met with the Florida Cattlemen’s Association on April 4, 2008. During 

this meeting, the cattlemen agreed to develop a 5-year business plan proposal for 

Indiantown to become a permanent export facility. The plan is to include information on current and potential export markets, with estimated numbers of animals 

to be exported, and estimated user fee amounts, among other things. 

Two other facilities, Sagamore Farm and Horse Country Club in Florida have adequate infrastructure to support exporting cattle. The Sagamore Farm is permanently approved for equine exports, and has temporary approval for cattle. Temporary approval is granted on a case by case basis. Sagamore Farm can handle approximately 50 cattle at one time. Horse Country Club is also permanently approved 

for equine exports and small ruminants, and is currently pursuing options for temporary approval to handle cattle. Plans are also underway to construct facilities for 

permanent approval to handle cattle exports. Once the plans are approved, it would 

take approximately one year to complete construction. The Florida Cattlemen’s Association requested $250,000 for the facility upgrade 

in a letter to APHIS dated March 27, 2008. 

CITRUS GREENING SUMMIT

Mr. BOYD. If you would do that, I would be grateful. I know it 

would not be a marketing and regulatory program hearing, Madam 

Chair, without me asking about citrus. So, you expect this question, do not you? 

Ms. DELAURO. I do expect it and I am hoping you will open up 

the door to the pesticide issues. 

Mr. BOYD. Right. Well, let me just be brief here. There was a 

summit held by USDA in December on this issue of greening diseases. I know that the report has not yet been released. Is there 

something that you can share at this moment with the committee 

about the findings and conclusions of that summit and when the 

findings will be published? 


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Mr. KNIGHT. The report should be published within days. It is 

now a matter of just queuing it up for printing and for release. The 

greening summit is most significant in that with that, we brought 

together what is at times a very competitive industry in getting 

California, Florida, and Texas citrus producers unified on ways to 

address what is the single most significant disease problem I see 

facing the citrus industry. It has been very good as far as bringing 

together and coordinating the research activities, the experiences 

that have come to bear in Florida, to ensure that we do not have 

this problem in other countries and that we get it under control 

within Florida. 

[The information follows:] 

CITRUS GREENING SUMMIT FINDINGS

The final report, Citrus Greening Summit Findings and National Plan Development, is available at the APHIS home page: http://www.aphis.usda.gov/ 

plant_health/plant_pest_info/citrus_greening/downloads/pdf_files/ 

citrusgreening_summit_plan.pdf. 

Mr. BOYD. As you know, for the committee’s information, Madam 

Chair, there are many counties in Florida, I think, that are quarantined because of this greening issue and there are other states 

that have quarantined areas, also, I understand. 

Mr. KNIGHT. That is correct. 

Mr. BOYD. Also, this problem is—we thought citrus canker was 

serious. This is even more serious and the whole industry across 

this country has been devastated. And that has so many serious 

economic ramifications for us, as a nation, and certainly states and 

local areas. Mr. Knight, can you tell us if USDA is committed to 

dedicating a significant portion of the proposed—you have 22 million in what we called a short fund, the Citrus Health Response 

Program. Is a good portion of that going to be dedicated to this research on citrus greening disease? 

Mr. KNIGHT. I may need to turn to Administrator Smith—— 

Mr. BOYD. Okay. 

Mr. KNIGHT [continuing]. On this level of detail. 

Ms. SMITH. Our funding does not go to conducting research per 

se. We are in development of a national plan for this, and I think 

that plan is going to focus around communication and coordination 

more between us and Mexico in terms of both understanding pathways and in gearing up all activities. 

Mr. BOYD. Okay. Madam Chair, members of the committee, you 

heard that and there really is no ARS or USDA plan now. I mean, 

if we do not get some money into this, solving this problem, and 

I think given the sort of the political nightmare we have around 

here relative to earmarks, that is the only way we get this kind of 

funding in many cases. This is just something that I want the committee to be aware of, that this is a disease that is more serious 

than canker and it will finish off the citrus industry if we are not 

careful in this country. So, I want to make the committee aware 

of that and we have to focus on it at some point in time. Madam 

Chair. 

Ms. DELAURO. Thank you, and let us spend some time talking 

about it. 

Mr. BOYD. Thank you. Thank you, Mr. Knight. 


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Mr. KNIGHT. Thank you. 

Ms. DELAURO. Mr. Latham. 

CONTINUING RESOLUTION

Mr. LATHAM. Thank you, Madam Chairwoman and welcome everyone in the panel. Mr. Knight, there has been a lot of conversation around here on the House side probably getting our appropriation bills down, the Senate has basically said they are going to 

punt this year, what does the CR do to you, as far as any initiatives that you have forthcoming and are you preparing for the fact 

that there will be a CR this fall? 

Mr. KNIGHT. As the process moves along, we would certainly be 

prepared, in the event that it would move to a CR, for being able 

to continue those programs. Obviously, there is certainly management issues associated with the CRs that become a real challenge 

on how do you address emerging priorities, areas that have increased challenges, those types of things. Given the nature of the 

regulatory side of the three agencies here, that is fairly constant. 

We can manage that well under a CR. The emergency aspects that 

the three agencies are faced with are the emerging issues that you 

see are the greatest challenges to manage. 

Mr. LATHAM. How about things like animal ID? 

Mr. KNIGHT. Animal ID, in a CR, we would be in a very awkward 

situation if we were operating under a CR, given the current budget level. We are using carryover funds to be able to continue a robust animal ID system this year. We will have fully utilized and 

invested all of those carryover funds by the end of this fiscal year. 

VOLUNTARY COMPLIANCE WITH PACKERS AND STOCKYARDS

Mr. LATHAM. Okay, thank you. Mr. Link, you have been ignored 

so far. In your budget, you say you are going to promote greater 

voluntary compliance with the packers, the stockyards. Can you 

tell us what you are going to do to facilitate this compliance that 

you have not been doing in the past? 

Mr. LINK. Well, we have got a much more visual presence in the 

market. We have added some more employees where funds were 

available. We sped up standard operating procedures so that everyone across the country is operating the same. It is due to the scale 

checking of every packer that goes over a thousand head of livestock a year. And we have added some new market inspectors that 

strictly go on sale days that show a presence to check scales and 

have a presence with the market there. And, again, by adding auditors, we are doing more financial audits than we have been able 

to do in the past. 

Mr. LATHAM. Does that promote greater voluntary compliance? I 

guess I do not—what you said does not say much about voluntary 

compliance. We have had mandatory price reporting in the past 

and we are not there right now. Can you give us any idea as to 

the voluntary compliance with the intent of price reporting, both in 

hogs and beef? 

Mr. LINK. Well, the voluntary price reporting, of course, goes to 

AMS, but we utilize that information in some of our investigative 

work. And so far, the compliance, voluntary compliance, particularly on the work in the beef industry, has been very high. They 


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have stayed with the course and they have kept volunteering the 

information of prices to us. 

Mr. LATHAM. Okay. Mr. Day, any comment? 

Mr. DAY. I will just echo what Administrator—— 

Mr. LATHAM. Why don’t you pull your mike up? 

Mr. DAY. I will echo what Administrator Link said, that on the 

beef and pork side, the voluntary compliance has been excellent. It 

has not been as good on the lamb side. And I would just like to 

thank you for not ignoring Administrator Link, because we are concerned that sometimes he does not get enough questions, it seems, 

than I do. 

COORDINATION WITH HOMELAND SECURITY

Mr. LATHAM. Okay. As far as with—I do not want to miss anybody here—with APHIS, as far as working with Homeland Security 

and as far as shipments into the U.S., do you have the cooperation, 

are you working closely with Homeland Security, as far as products 

coming into the country? What has happened? 

Ms. SMITH. We have done a number of things to really strengthen the relationship between us and Homeland Security. Some of 

the things I have personally done is increase communications at 

several levels within the agency between us and them. We, also, 

have a project that is—— 

Mr. LATHAM. Can you hear—I do not know if you can pull your 

mike up closer there. You are very soft. 

Ms. SMITH. We, also, are doing two other primary things. One is 

a series of working groups that have—we have identified 10 areas 

where we need to work more closely together. We would like to 

work more closely together and we have action plans that are addressing each of those 10 areas. It is a very broad group of people 

that we worked with. Stakeholders put together these action plans 

and we are reporting periodically on the results of those. We have 

a meeting coming up in May, in which we are going to get a full 

reporting of the progress that we have made in those 10 areas. 

The other thing that we do are joint review processes, where we 

go to ports of entry jointly and we evaluate how well that particular location is doing their work. We use the results from those 

reviews to develop action plans for any enhancements that we need 

to make. 

Mr. LATHAM. Okay. Thank you, Madam Chairwoman. 

Ms. DELAURO. Mr. Bishop. 

PROPOSED USER FEES

Mr. BISHOP. Thank you, Madam Chairwoman. Welcome all. I 

want to follow-up on the line of questioning Mr. Kingston raised regarding the 57 million proposed revenues, which would be generated, of course, by a user fee, whose authority to recover the cost 

to administer the packers of the Packers Act, both grain standards, 

inspect entities regulated under the Animal Welfare Act. Also, the 

fees for the APHIS Veterinary Biology Regulatory Services Program, financing the monitoring and enforcement activities for country of origin labeling, and some legislative proposals to collect fees 

from retailers. My question is whether or not the Department has 

fully analyzed the potential impact that these fees, and I will put 


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tax increases, would have on the agricultural industry and particularly on the farmers at the ranchers, as well as the end consumer, 

and whether or not you have had any public hearings, provided any 

other opportunities for feedback from the stakeholders, such as the 

farmers or ranchers or consumer groups, the wholesale grocers, the 

retail grocers, and what impact it will have on our feeding programs, the school lunch program, in terms of prices? How is that 

going to impact these end users, who have limited budgets? Did 

you do an analysis of that, get any feedback? Or if you did, can you 

provide the committee with the results of that? 

Mr. KNIGHT. Certainly. For the user fees that are proposed in our 

budget, it is, I think, important for me to note that with all three 

of these agencies, there are a number of programs that are userfee funded today, especially in the case of the marketing programs. 

It has long been a philosophy that those who have the benefit or 

regulated ones that are paying those fees. And so, in many ways, 

it is a very logical progression for us to look at several of these 

items. It certainly weighed heavily in the decision on the country 

of origin labeling, recognizing that we had an important legislative 

initiative that we were going to have implemented this year and 

recognizing that we needed to put before everyone what we would 

have as the cost associated with that. So, we have proposed the 

user fee structure on that. 

We are currently in the process of clearing the legislative language to forward to the respective committees that it would take 

to move those user fees forward. And I will need to look at and respond to the record for you, sir, as to any of the public outreach 

that we may have done to date, as we move forward. 

[The information follows:] 

PUBLIC COMMENT ON COOL USER FEE

If the proposed Country of Origin Labeling (COOL) user fee is enacted by statute, 

USDA will publish a proposed rule in the Federal Register with a request for comments from interested parties and stakeholders. All comments and information received in response to the proposed rule will be evaluated and addressed in the final 

rule published to implement the COOL user fee. 

COUNTRY OF ORIGIN LABELING FEES

Mr. BISHOP. I am particularly interested in the additional fees 

that you are going to toss retailers, because that will have a direct 

impact on the consumer and mom and pop at the grocery store. 

And if you did do any kind of study to gauge what that impact 

would be, of course, we would like to get that. But, it seems that 

given the economic times that we are faced with now, that this is 

not a particularly good time to be adding fees to retailers. 

Mr. KNIGHT. If I could expand for the record on that particular 

item for your benefit. That specific retailer fee is our proposal to 

offset the additional implementation costs for country of origin labeling. Country of origin labeling, as the statute is defined, applies 

at the retail level. It does not apply to a farmer, it does not apply 

to a packer, but rather it applies to the retail level. Therefore, to 

move that user fee, we are looking at that being applied at a retailer level. It would be about 260 dollars a year for a given retailer, recognizing that most small grocery stores would be exempt. 


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Most butchers, most fish mongers would fall under the gross sales 

limit; COOL does not apply to those, as the statute is drafted. As 

a matter of fact, it would apply to really the only very largest of 

the retail stores. 

Mr. BISHOP. I am trying to understand the relationship between 

the retailer. How is the retailer—I mean, how is he the ultimate 

user to benefit from that, other than complying with the law? 

Mr. KNIGHT. The country of origin labeling applies only at the retail level and, as such, that is where we would have the authority 

to assess the user fee. 

Mr. BISHOP. I guess what I am trying to get at, in order for the— 

the retailer just presents the product to the customer. The retailer 

buys it from the wholesaler. 

Mr. KNIGHT. Yes. 

Mr. BISHOP. And, of course, in the grocery business, it may be 

from the direct producer or it may not be. There is usually a middleman somewhere in that process in most of the products. So, 

what I am trying to get at is you are tying it only to the retailer, 

when the retailer is going to have to depend on all of these other 

aspects of the marketing process to get access to that information. 

Mr. KNIGHT. That is correct. In the proposal that is moving 

through the farm bill process, it is suggested that that be largely 

an affidavit-based system. A producer would say this was of U.S. 

origin. That affidavit would move through the system for the—— 

Mr. BISHOP. You mean from the producer all the way up through 

the retailer? 

Mr. KNIGHT. Yes. That is essentially what you see occurring 

today with fish and shell fish on implementation of COOL. That is 

why today, if you go into a grocery store, you will see quite often 

a hand-marked card next to that piece of fish or shell fish indicating which country it would have been a product of. 

Mr. BISHOP. Okay. Just one more statement, just five seconds. I 

just do not see how it is fair to put all of that burden on the retailer, when you have so many other people that participate in the 

process and I have questions about that. We have not enacted it 

yet, so—— 

Ms. DELAURO. If I might add, Mr. Bishop, to get around to asking it again, in my view, it is one more way to delay the process 

of moving toward country of origin labeling. Mrs. Emerson. 

INTERNATIONAL TRADE NEGOTIATIONS

Mrs. EMERSON. Thank you, Madam Chair. You mentioned in 

your testimony that APHIS provides sanitary and phytosanitary 

expertise during international trade negotiations. This is my personal opinion, but it does become very frustrating. I really do think 

that the sanitary and phytosanitary regulations are just a smokescreen for non-tariff barriers trade, my personal opinion. But, as 

we continue to hear rumors that the Doha Round may actually 

produce more results, I just want to ask you a few questions. Number one, what is the state of SPS barrier of trade in the world? 

What is the trend? Who are the greatest abusers? And do we know 

the cost that such non-tariff barriers to trade place on U.S. producers? 


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Mr. KNIGHT. In this arena, certainly bringing down SPS barriers 

to trade is one of the greatest challenges that both USDA and the 

U.S. Trade Rep’s Office have and we coordinate very closely between APHIS’s technical work, the Foreign Ag Service, and USTR 

in being able to work at those. I am very proud to say that we had 

a significant advancement about two weeks ago in bringing down 

a post-BSE barrier that we had between ourselves and Mexico and 

Mexico has agreed to resume imports of live cattle. I mention this 

because this is a very real example of the impact for producers. 

Prior to this barrier coming up, Mexico was importing about 11 to 

13 million dollars worth of breeding animals per year. We expect 

this first year for it to far exceed that level. We recently reopened 

live animal movements with Costa Rica, Turkey, quite a number 

of countries in a post-BSE environment. So, we see these SPS barriers that have gone up that we need to bring down systematically 

and they are certainly a major investment for USDA’s time and a 

high priority for us. 

Mrs. EMERSON. Who are the greatest abusers? 

Mr. KNIGHT. I may have to ask folks to come back to the record 

for you on how to quantify which countries would fit into that category. 

Mrs. EMERSON. Do you ever see us being able to get together, for 

example, with the European Commission and really come up with 

some standards that all of us can agree upon? 

Mr. KNIGHT. There are glimmers of opportunities in our relationship with the European Union that we see out there. Mr. Day has 

just returned from Europe, where he was working on issues associated with aflatoxin and almonds and the European Union is our 

largest market for California almonds. And so, it has been extraordinarily important work and it is one that has gone very well. We 

have a great deal of work that remains to be done with Europe on 

non-hormone treated beef and being able to address that. Yet, at 

the same time, you see where that market has—the European 

Union has a real shortage of red meat and of protein products, and 

so they are looking for imports. That gives an opportunity for advancements to be made. Another notable one that we should mention, hatching eggs with the European Union, that has recently 

been worked through and that is about a 25 million dollar market 

with the Europeans. 

Mrs. EMERSON. So, these glimmers of hope, as you say, that is 

definitely positive. Do you think it will be long-lasting? It is just 

interesting, having been at a meeting with the secretary general 

for trade of the European Commission and asking him about this, 

he was actually responsive and said, you know, maybe we really do 

need to sit down and try to whittle away, whittle away. But, do you 

have to go product, by product, by product? Is that the way it is? 

Mr. KNIGHT. Most of this work tends to be product-by-product or 

bilaterals, country-by-country. So, every time you have a free trade 

agreement that comes up, you have an opportunity to discuss, debate, address some of those things. Then, you have the country-bycountry efforts or product-by-product efforts that are driven by a 

particular market opportunity. And so, we have to seize upon each 

of those. 


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We, also, use the international standard setting for us as a 

means of ensuring that decisions are constantly moving on all parts 

to a sound scientific basis. And in the case of the work in the postBSE environment, we talk a lot about the International Organization for Animal Health, OIE. We use similar standards-setting bodies for movements of seed and seed products in the same way from 

the plant side of things. 

Mrs. EMERSON. Okay. Is there something you want to add? Okay. 

Thank you, very much. 

Ms. DELAURO. Thank you, Mrs. Emerson. I think you have 

opened up a very good area and line of questioning for study and 

I would only add to that, that we may think about taking that up 

in a specific way at some other time and hearing and potentially 

add to that the whole area of the free trade agreements and what 

we have tied ourselves to, in terms of food safety, and what either 

opportunities or constraints that these agreements put on us with 

regard to trying to look at protecting food supply here, domestically, but what is coming in internationally. So, we should talk 

about maybe thinking through how we might address that. 

Mrs. EMERSON. Thank you, Madam Chairwoman. I would very 

much like to do that. 

Ms. DELAURO. Thank you. Mr. Farr. 

LIGHT BROWN APPLE MOTH

Mr. FARR. Thank you, very much, Madam Chair. I have a lot of 

questions, because just as we get over the national incident of E. 

coli in spinach, we now are being bombarded by aerial spraying for 

LBAM, which stands for the light brown apple moth. And what 

happens is this is an apple moth and basically a species, in which 

we have zero tolerance for, and the Department, working with the 

California State Department, has decided that the best way to get 

rid of this pest is to use aerial spraying. And pheromone, which is 

not an insecticide, but the ingredient in which they mix the 

pheromone is very controversial. 

And I want to ask you a series of questions, because I think this 

is going to end up being national news, the fact that the spraying 

has been ordered now in San Francisco, San Mateo, Berkeley. I 

think this moth only lands in liberal communities. [Laughter.] 

Maybe we ought to turn the name to liberal brown apple moth— 

and Santa Cruz, which I represent. And all of those counties are 

using all their legal powers to sue you, sue the state, sue the Feds, 

and it is basically getting back to why was this—what was the 

process used for blacklisting an invasive species like this. I am just 

going to ask you a bunch of questions and then submit another 50 

to you. So, there are just tons of questions. This is the hottest issue 

and my colleague in the state legislature told me that of all the 

issues that we have ever faced in our district, this has gotten more 

interest, more people attending hearings, 800 people, more concern 

than any issue ever, more than the Iraq—well, more than anything 

and these are activist communities that turn out for these things. 

So, it is the worst public relations program I have ever seen in my 

life. It took a problem and turned it into an incredible crisis. And 

I, frankly, think at the end of the day, aerial spraying will be 

stopped. I think the courts will stop it and that we are going to 


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have, then, all kinds of issues of how you can do the twist ties, 

which I think people will voluntarily do. But, the biggest problem 

is going to be what is going to happen to California agriculture and 

it is going to be a confrontation between the state and the Feds on 

essentially why was this species blacklisted in the first place. 

And I want to know that. I want to know what specific regulatory hurdles for the pest to be included on the blacklist. Has a 

blacklisted insect ever been reclassified? If so, what are the circumstances? When was LBAM blacklisted by USDA/APHIS? Can 

USDA/APHIS produce the original documents that it relied upon to 

place LBAM on the blacklist? Was U.S. the first country to blacklist LBAM. If not, please note which countries and when the classification occurred? Was the September 2003 mini-risk assessment 

by the University of Minnesota’s Department of Entomology the 

primary study relied upon to maintain LBAM on the blacklist? If 

not, what studies were referenced? At the time of classification, 

was the biological assessment of LBAM conducted by USDA/ 

APHIS? At the time of the classification, was the economic assessment cost benefit analysis to assess comparative risks of various 

options for managing LBAM, including managing containing the 

pest and eradication, conducted by USDA/APHIS? Was USDA/ 

APHIS presently conducting an economic assessment of LBAM, as 

recommended by TWG? If so, when will the assessment be completed and what countries have sanitary and phytosanitary measures in place for LBAM and when were those measures established? 

These are questions that are being asked now at the community 

level and a lot of other issues regarding the approval of the checkmate pesticide that is being sprayed. But, basically, what is the 

background for getting this listed and has any species ever been 

de-listed, any insect been de-listed? 

Mr. KNIGHT. This is a very exhaustive list on—— 

Mr. FARR. I do not expect you to have all of the exact answers 

right now. 

Mr. KNIGHT. We will certainly—— 

Mr. FARR. But, you know I was going to ask some of these. 

Mr. KNIGHT. Reply for the record, yes. This is certainly one of the 

thorniest issues that is facing both APHIS, California Department 

of Agriculture, and certainly the localities that we are dealing with. 

The light brown apple moth is a leaf roller, which makes it very 

difficult to control, because its action causes the leaf to roll around 

it. And so, that gives it an inherent protection on it. It impacts— 

well, most of the debate, unfortunately, has just been on the agricultural impact. The impact’s horticultural plants, a large number 

of the plants that are in these communities—— 

Mr. FARR. However, I have to admit, since it has been there, no 

one has ever detected any problems on any of the native horticultural or trees or anything. 

Mr. KNIGHT. Yes. It is, according to the experts, has a potential 

of impacting, I think, somewhere in the neighborhood of 250 different plants. It has a host range that if it would go beyond California, would extend to almost the entire southern tier of states in 

the United States. So, you think of the investment that this committee has made on bollworm eradication over the years and you 


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would be looking at a very similar size and scope and range that 

that would have to—— 

Mr. FARR. If, indeed, it has that impact. 

Mr. KNIGHT. If it would have the impact is feared and if it would 

get out of California. We have over a 70 million dollar CCC emergency authorities that have been given to move forward with this 

effort. The primary challenge now, of course, is the public relations 

issue and it is a very serious one and one that has to be dealt with 

very appropriately and very respectfully in the communities, because the intensity of the debate, as Congressman Farr is very well 

aware of, it is incredibly hot. It is going to be a very large problem 

or a challenge for us. 

The pheromone is, in fact, an organic product. The debate rests 

largely about aerial spraying. I wish we were not even referring to 

it as aerial spraying, because actually it is not an aerosol in the 

traditional thing. It is put on a small fiber, some sort of chip to distribute the pheromone. I have told folks that I wish we were calling 

it a distribution method or aerial distribution method. 

Mr. FARR. Planes flying over people’s houses at night, they are 

told to cover their furniture, it has no impact, but take precautions, 

wash off stuff. Mothers are terrified. But, you have lost this argument. The press is against you. You are beginning to even get the 

farming community, because it has put them—they make them the 

bad guys and it is essentially a policy that is developed by our 

country and the people are questioning the policy of why you need 

to list this in the first place. People say it has been here for a long, 

long time. We have had scientists go to Australia and New Zealand, they cope with it. They are saying that it is not having the 

negative impact. It is very much related to another moth species 

that has been there forever. So, I think the public relations on why 

you need to spray, I think you are losing that very quickly. And 

the question is, if you lose that, do you rethink this thing? I mean, 

if it does not have that big of an impact, can it just, instead of zero 

tolerance, reach some of the tolerance levels that we live with. As 

somebody says, there is a threshold of—I am going to come back 

to it. But, I want some really serious answers to these questions, 

because we appropriate the money. 

Mr. KNIGHT. Yes. And we will provide you responses to every one 

of these questions. I, also, am in the process of clearing a response 

to your letter of about a month ago on some of the additional questions that you had, as well. 

NATIONAL ANIMAL IDENTIFICATION SYSTEM

Ms. DELAURO. Mr. Farr, there will be additional rounds. Mr. 

Knight, let me get back to you, this is again on animal ID, because 

you spoke about the business plan. So, let me ask questions with 

regard to the business plan. I, also, have, and I do not know if I 

can get them into this round, but questions about the cooperative 

agreements and also this whole issue of mandatory versus voluntary. 

But, on the business plan, which was released December 2007, 

I will make this comment and maybe you feel it is gratuitous, but 

this four years late. But, we have a business plan now and let us 

take a look at it. But, I tried to look at this business plan and your 


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budget request as an investor, review a company’s operations and 

its performance. You produced a business plan that does not identify the total cost of the project, develop and operation of an effective national ID. There is no total cost. The first thing I would 

want to know is how much money you are looking for, to get for 

your company, what is it going to take to get the company up and 

running and making it profitable. According to your own business 

plan, your overhead costs are approaching 25 percent. As investors, 

we have put in 128 million over five years. You have not produced 

significant results. The company met less than a third of the promised deliverables, premises registration. We do not know where you 

are with respect to other important deliverables, the animal registration targets. You are years away from releasing one of your penultimate products, the 48-hour trace back on cattle. You now come 

back to your financial backers and you say you need 24 million dollars more without much explanation of how it ties to the business 

plan, what are the tangible deliveries that we are going to see from 

a next round of funding. 

I have got to ask you, what investor is going to continue to spend 

good money after bad? I honestly have not decided how I will recommend that we proceed with funding animal ID in the 2009 bill. 

It depends on a number of factors, not least of which is our allocation and the administration’s new found dogma on funding for domestic programs creates some difficult choices for our subcommittee. But, if we do proceed with funding for NAIS in 2009, 

we will require a high degree of accountability from the USDA. I 

would like to ask for your help, Mr. Knight, in providing the accountability and the transparency that I believe this program 

needs, if we are going to continue to fund the system. 

In addition to the action targets outlined in the draft business 

plan, what aggressive milestones would you recommend that Congress use to evaluate APHIS’s progress? Most of the plan’s targets 

do not occur until 2009, as you mentioned before and, as I mentioned before, as well, I want more concrete and near term measures. As we look forward to the next administration, could you recommend animal ID implementation measures beyond 2009? Why 

five years into the program does USDA still not have a handle on 

short term, let alone, long term costs? How does your 2009 request 

for an additional 24 million fit into the business plan? Since your 

budget and the business plan were developed at about the same 

time, we assumed that they were developed in concert. So, please, 

be specific as to how they link. Will the benefit cost study that you 

have contracted for evaluate alternative scenarios and, in particular, will it estimate the total costs of a national animal ID system that is voluntary versus a mandatory program and is that part 

of the specs, if you will, in this contract? And with the contract, I 

would very much like to know when it was put out for bid, what 

were the specifics, and what has the research entity been asked to 

specifically take a look at? 

Mr. KNIGHT. Thank you for those questions. A large number of 

those do tie to the cost benefit analysis that we put out for bid. 

That went out late last summer/early fall, if I recall correctly. The 

primary contractor is Kansas State University, with linkages to 

several other universities. 


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I will be very pleased to provide for the record all the details on 

that contract, and the scope of the work that is there. 

[The information follows:] 


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Ms. DELAURO. Does it include a contrast between a voluntary 

program and a mandatory program in the cost? 

Mr. KNIGHT. I do not believe that that is included in that analysis. If it is your desire, I would examine the possibility of adding 

that question and looking into those scopes, because I think it is 

a very key question that needs to be addressed. 

I would also be very pleased to work with you on those items 

that we believe would be mutual accountability measures for the 

appropriations process. We can pull those out of the business plan 

for goals of each of the years that are out there. 

Ms. DELAURO. Why does your business not talk about the total 

costs; short term costs, long term costs? This is not day one. 

Mr. KNIGHT. It is not day one. 

Ms. DELAURO. It is five years. 

Mr. KNIGHT. I would agree in that I would have preferred to 

have had a robust business plan like what we have before you 

today, five years ago. 

Ms. DELAURO. But it is not robust in the sense it does not give 

us any short term costs or long term costs. Anybody can take a 

business plan, you know, to the SBA. With this kind of data, it is 

thumbs down. It is a no, you know, if anybody is doing due diligence here. If our responsibility is to do due diligence, we say no. 

Why can you not give us numbers? 

Mr. KNIGHT. I will be very pleased to provide you the results that 

come from the cost benefit analysis that will give us a good estimate on those long term needs for animal ID. I am very reliant on 

the cost benefit analysis to help us on the next steps. 

Ms. DELAURO. When is it due? 

Mr. KNIGHT. It is due mid-summer, if I am not mistaken. 

Ms. DELAURO. Let me throw this in as a final question. I am 

very, very, very serious. Because Mr. Bishop’s questions have to do 

with this, and it has been one of my questions as well. We are talking about a user fee for the grocery folks, for the retailers, and they 

are going to come out of the woodwork, and that is going to delay 

your process. 

Clearly, it has been recommended, I know, by GAO on cost benefit. But if you are doing the cost benefit on a voluntary program, 

you have got the industry all over you—all over you—telling you 

that it is going to increase their costs. 

From my perspective and point of view, we are doing every single 

thing—not we—you, the agency, is doing every single thing with 

regard to cooperation with the industry to slow this thing down as 

much as we can, and you need to let me know. We have got eight 

months to go. What are we going to get in the next several months 

that is going to move this program to where it needs to be? 

I do not know if my colleagues are tired, but I am tired. But that 

does not mean I am going to stop asking the questions. If this cost 

benefit analysis does not deal in a specific way with mandatory 

versus voluntary programming and what the costs are, and it is another whitewash to have the industry come back and tell us that, 

you see, it cannot be done because this is what it is going to cost 

us. 

That is no longer tolerable by this committee, Mr. Knight; no 

longer tolerable; Mr. Latham. 


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COUNTRY OF ORIGIN LABELING

Mr. LATHAM. Well, on that bright note, I appreciate that. 

Speaking about costs, Mr. Knight, in the Farm Bill proposal, 

there is a form of COOL in there. Do you have any estimate of 

what that will cost, as far as inside the system, and who will pay 

the cost? 

Mr. KNIGHT. I will defer to Administrator Day on that question. 

Mr. DAY. Yes, our proposal for a user fee for COOL estimates 

that. 

Mr. LATHAM. We are not going to do any user fees. Just forget 

that. 

Mr. DAY. We assume it is going to cost about $9.6 million for enforcement of country of origin labeling. 

Mr. LATHAM. No, I am talking about inside the system. The way 

I see it, you are going to have two sectors be able to recover any 

costs as far as record keeping. It is going to be the packers who 

will reduce bids to the farmers, and the retailer will increase prices 

to the consumer. Have you done any estimate as far as what the 

increased cost to consumers will be? 

Mr. DAY. That will be in the rule that we publish related to country of origin labeling. So that has not been published, yet. 

Mr. KNIGHT. The changes in the Farm Bill, sir—— 

Mr. LATHAM. Right. 

Mr. KNIGHT [continuing]. Because they add goat meat, they add 

poultry not turkeys, add macadamia nuts, each of those, as we do 

the rule, we are having to do a new cost benefit analysis associated 

with that, and that will be part of that rule when we publish. 

Mr. LATHAM. You are not talking about cost to the Department. 

You are talking about cost in the system. 

Mr. KNIGHT. In the system, which I believe was the nature of 

your question, sir. 

Mr. LATHAM. But I mean, there are two people inside the system 

that are able to recover the costs; and that would be the packers 

by reduced bids to the farmers, and the retailers would be able to 

recover by increased costs on the shelf. 

Mr. KNIGHT. All of us in agriculture are very acquainted with 

that for the farm that, as a rule, producers are price takers; and 

it is further up the chain that folks have the ability to pass costs 

either up or down the value chain. 

NATIONAL ANIMAL IDENTIFICATION SYSTEM

Mr. LATHAM. Yes, I will be interested to see what those costs are, 

especially the consumer side. When we are talking about the animal ID—and I guess it would be Administrator Smith here—how 

many private veterinarians are actually using the USDA animal ID 

application. For this, I do not want to know how many are registered. How many are actually using the system? 

Ms. SMITH. This is for the VSPS system? 

Mr. LATHAM. The USDA animal ID applications, right, yes. 

Ms. SMITH. Yes, we currently have had 243 accredited veterinarians using that. 

Mr. LATHAM. Are they actually using it, or are they registered? 

Ms. SMITH. Those are the ones who are actually using it. 


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Mr. LATHAM. Out of how many registered? 

Ms. SMITH. I do not have that figure. I will be happy to get that 

for you. 

[The information follows:] 

NATIONAL ANIMAL IDENTIFICATION SYSTEM—REGISTERED ACCREDITED

VETERINARIANS

APHIS currently has 1,010 veterinarians registered for the Veterinary Services 

Process Streamlining system. Of this number, 243 veterinarians are actively using 

the system, based upon the number of veterinarians that have written Interstate 

certificates of veterinary inspections. 

Mr. LATHAM. Are you looking at systems? The frustration I share 

with the Chairman, and part of that frustration is the fact that I 

know there are systems that are commercially available, where 

people are registering with you and then using other systems basically to do the same thing, that you are trying to achieve after 

$100-some-million dollars of expenditures. There have been systems commercially available out there for a long time that have 

worked and been extraordinarily successful. 

Ms. SMITH. I know one of the components, of course, of the animal ID that we have been putting a lot of effort into is looking at 

what kinds of systems are already out there, communicating about 

our requirements for those to be compatible, and then certifying 

those as systems that could potentially be used. 

Mr. LATHAM. One big problem is, you went to K State rather 

than Iowa State; so anyway. [Laughter]. 

Ms. DELAURO. Mr. Latham. 

Mr. LATHAM. Yes. 

Ms. DELAURO. Could you just yield for a second, and then obviously you can take all the time that you need. I do not know, Ms. 

Smith, if this was your testimony. But there were eight devices— 

eight devices. 

Let me just say this to you. You have got eight devices. Do we 

have the capability to look at the eight devices? Why is the Federal 

Government not sending out a request that says, these are our 

specifications; this is what we need; let us get a bid; let us have 

one device? Why are we complicating this? This leads me again to 

my frustration. But I thought the noting that there are eight devices now, this is not a system that wants to get itself underway. 

Mr. LATHAM. Right; Mr. Knight, one concern that producers 

have—and you brought the word ‘‘traceability’’ up two or three 

times today—how far up this chain are you saying there is going 

to be traceability? 

Obviously, producers have a great concern about, if there is a 

problem with ground beef someplace, that somehow they are tracing it back to that individual producer when they have lost control 

of the product after things slaughtered or being ground or being 

packaged and everything else. How far up are you talking about 

traceability? 

Mr. KNIGHT. The traceability system that is being built with national animal ID is solely about animal health; and as such, is to 

be utilized for those purposes. It is only in the event of a disease 

outbreak that one would be doing that level of traceability. 

That traceability exists today. It simply takes a great deal more 

time to move forward. One of the things that I have explained to 


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producers around the country is that animal ID does not in any 

way change their risk or liability associated with any sort of food 

contamination issue. That risk is very much the same today, with 

or without an animal ID system. 

COUNTRY OF ORIGIN LABELING

Mr. LATHAM. Is there any correlation with country of origin labeling and food safety? 

Mr. KNIGHT. The country of origin labeling is perceived by some 

folks at the grocery level that as such, and I am implementing that 

in law. 

Mr. LATHAM. Was it ever the intent of country of origin labeling 

to be a food safety issue? 

Mr. KNIGHT. I am a rancher from South Dakota. There are a 

large number of my neighbors who are advocates of country of origin labeling; and their desire for that is about using it as a nontariff trade barrier against imports of basically Canadian cow beef. 

Mr. LATHAM. Or a marketing aspect? 

Mr. KNIGHT. Or a marketing aspect. 

Mr. LATHAM. Okay; thank you very much, Madam Chairwoman. 

Ms. DELAURO. Thank you. Mr. Farr. 

LIGHT BROWN APPLE MOTH

Mr. FARR. In Australia and New Zealand, where they use just 

natural means, it is listed there as a minor insect. Why is this a 

zero tolerance pest in this country? 

Mr. KNIGHT. My understanding, the reason for our position lies 

largely with the fact that there are no natural vectors in the 

United States that would lend control to that. 

I do recognize that as the debate has heated up on this issue, 

there are a few folks that are offering that they have a hypothesis; 

that there are natural vectors within the United States that would 

control this. 

We will take a look at that. I find that, just as a thumbnail 

sketch, fairly unlikely, given the level of exposure and the intensity 

or the presence of the light brown apple moth in those same areas. 

Mr. FARR. Also, in Australia and New Zealand, which grow a lot 

of California trees and Monterey pine as the commercial tree in 

New Zealand and Australia, and they even grow the redwood trees 

native to California, they have never found any negative impact on 

those trees. 

Are not your statements in California that these moths will attack all native oaks and pines and redwoods? There is a lot of 

doubt about that, since they have been there and have not been attacking them; and two, there have not been any indications that 

they attack those trees in those countries. 

Mr. KNIGHT. And we have got also folks in New Zealand, farmers, who are producing agriculture crops that are doing repeated 

sprays to control the light brown apple moth. So we definitely need 

to make the investment in going through each of these issues. 

Mr. FARR. I understand that New Zealand has no spraying program. They have stopped it, because they feel that it is at a classification that it is not a serious impact on agriculture. 


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As I understand, Canada and Mexico have the same standards 

that we have. Is there any discussion, any talk at the April 16 to 

18 tri-national agriculture court meeting in Sacramento, California, 

with those countries about changing the policies regarding LBAM 

and an actual pest? 

Mr. KNIGHT. Sir, this is an extraordinarily large agency; and I 

am, from your question, just learning about this meeting. So I will 

have to check on that and respond back to you. 

[The information follows:] 

LIGHT BROWN APPLE MOTH—CLASSIFICATION IN OTHER COUNTRIES

There was no discussion at the Sacramento meeting regarding plans to change 

policies for dealing with light brown apple moth (LBAM). After the initial LBAM 

detection in March 2007, Canada quarantined the entire State of California, and 

Mexico refused shipments of all host crops from anywhere in the State, regardless 

of any inspection results. However, this program’s eradication plan and progress has 

convinced Canada and Mexico to relax their trade restrictions and accept LBAMhost crops from non-infested California counties without restriction. APHIS’ strategy, then, is to reduce the impact of both countries’ phytosanitary restrictions on 

LBAM-host articles from California by continuing to pursue eradication. If we suspend our eradication efforts, Canada and Mexico are very likely to impose more 

stringent phytosanitary requirements. 

Mr. FARR. Why is LBAM not an actionable pest for European 

countries and their produce? 

Ms. SMITH. Because it is not present in the EU. 

Mr. FARR. If these lawsuits challenge the emergency status, 

which is what you are using to distribute the spray, and lots of people think that they can challenge the labeling that says an emergency, is it possible that Federal funds allocated for the eradication 

can be reassigned to non-emergency programs of control, emphasizing ecological methods? Have you ever shifted from an emergency fund to just a non-emergency program? 

Ms. SMITH. We do not have the authority with our emergency 

funding to re-direct it in that way. Emergency funds are requested 

and may be used for emergency types of situations, so we cannot 

pull those funds to use them for another situation. 

Mr. FARR. But you could pull them from spraying and go to 

ground manual eradication. 

Ms. SMITH. That is correct. 

Mr. FARR. Who ends up classifying this moth as a zero tolerance? 

Is that your department? 

Ms. SMITH. I am not sure it is the term zero tolerance. What we 

did in this case is, we conducted a thorough scientific analysis; and 

we convened a group of international scientists that are coming 

from the countries New Zealand and Australia that have dealt with 

this pest. 

So we base this on science and the most widely available science 

that we can, which is what we did in this case. 

Mr. FARR. That was 25 years ago that we listed it. 

Ms. SMITH. What I am speaking to is, in terms of our strategy 

that we are developing to respond to LBAM is a convening of scientists. So we have the most current information, and we have the 

benefit of drawing upon years of experience that New Zealand and 

Australia have had with the pest. 

Mr. FARR. So what is the worst case scenario? If you cannot 

eradicate it by spraying or you get the spraying stopped, what is 


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this going to do? Are you going to impound all the agriculture from 

California? 

Ms. SMITH. That would not be our intention. The potential long 

term consequence of not using spraying to stop this pest, which we 

have had some success in doing, is that this is a pest that could 

spread across the entire U.S. and be particularly a problem in the 

southern states, where it is warmer all year round, and in other 

states in the summers. 

But it has the potential to be a really serious pest, which is why 

since we have a combined strategy, it has allowed us to eliminate 

it in the counties that it started in. 

Mr. FARR. Where was that? 

Ms. SMITH. I think that is Los Angeles County and Napa County. 

It was originally in 12 counties. 

Mr. FARR. You did not do area spraying in those two counties. 

Ms. SMITH. Not in those two counties. 

Mr. FARR. I will just come back in another round. I want to think 

about how I want to put this. 

Ms. DELAURO. Mr. Kingston. 

ANIMAL WELFARE ACT

Mr. KINGSTON. Thank you, Madam Chair. 

Ms. Smith, I am curious, as the Animal Welfare Act has not provided for the regulation of pet stores. But there are facilities that 

have rats and mice and birds, not used in research, that have been 

infected. What do you attribute that to? 

Ms. SMITH. Since most rats and mice are bred for research, most 

of the new facilities that we would be talking about would be pet 

bird breeders and dealers. 

Mr. KINGSTON. Why is that a Federal Government function? 

Ms. SMITH. Because that was the direction that we were given 

as a result of the issue being raised. This was something that came 

about. There was a settlement with the Department of Justice, that 

the Government agreed to this coverage of the rats, mice, and 

birds. 

Mr. KINGSTON. A lawsuit could put you in a new business? 

Ms. SMITH. As part of the settlement in that Department of Justice lawsuit, as I understand, the lawsuit was seeking for us to 

have greater coverage than the AWA. 

So there was subsequent legislation in the 2002 Farm Bill that 

came about as a result of this issue being raised initially and the 

lawsuit. 

Mr. KINGSTON. Is it constitutional for the Federal Government to 

have a rat inspection program? I know the Federal Government is 

the alpha and omega of all good things, and the enforcement of rat 

regulations is very important to the taxpayers. But is that what we 

need to be putting our resources in? 

Ms. SMITH. Well, all I can tell you is, it was in the Farm Bill. 

The legislation was there for us to take on the responsibility or 

evaluate the responsibility of that. 

Mr. KINGSTON. Regardless of a state law that would allow state 

inspection of pet stores—so now pet stores would be subject to a 

state inspector and federal inspectors? 

Ms. SMITH. Not pet stores directly. 


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Mr. KINGSTON. Okay, well, pet breeders who supply rats to pet 

stores—that has got to be a real difficult business to be in. Because 

I know they hate breeding and growing a rat population is so hard. 

But now we are going to have forms and everything that say how 

big the cage has to be for a rat, and Federal inspectors who will 

go by and make sure that they are being treated humanely. 

Is that what I am hearing? How much is this going to cost? I can 

tell that you are very proud of this program. [Laughter.] 

Ms. SMITH. In the 2009 budget request, there is an additional $314,000 being requested. 

Mr. KINGSTON. So we are going to spend $314,000 to inspect rats, 

even though the state government could be doing it and is doing 

it in many states, correct? 

Ms. SMITH. APHIS is anticipating that the large amount of 

work—well, what this is really going to get down to in terms of the 

work that we would be doing is really going to be more of the pet 

bird breeders and pet bird dealers. 

Mr. KINGSTON. Who was the judge? This is what the Ninth Circuit of California was responsible for. [Laughter.] 

I am just trying to figure out how the Federal Government gets 

involved in this. 

Mr. FARR. It was just by legislation. The state legislature standardizes all the cage sizes for all animals. 

Mr. KINGSTON. Okay, but if the state has a program, would the 

gentleman agree that maybe the Federal Government should, similar to the McCarran-Ferguson Act on insurance, where the state is 

regulating that the Federal Government would not need to. 

Mr. FARR. First of all, this is the commercial raising of rats for 

pets and things like that. I frankly think that whenever you have 

commercial utilization of animals, then you ought to have some humane standards, and they ought to be standards set for across the 

nation. 

I think the reason that ours applies to potential universities or 

the ones that have this research is that in their own protocols, they 

have to have humane procedures. When they are doing research 

from one university to another, you certainly want to have national 

standards, rather than just every state having a separate standard. 

Mr. KINGSTON. I agree they should be treated humanely. I just 

question that we need to have a Federal standard. 

Mr. FARR. That is what happens when all the states start adopting these things and they are all different. Then they come screaming to the Federal Government and say, standardize it. 

Mr. KINGSTON. We will talk about that. Who was asking for the 

legislation? 

Mr. FARR. That is typically what happens. You know, these antismoking laws and anything else, with the health and safety, usually it starts with a community, a county, or a city, and then several cities in those states. 

They come to the legislature and say, we cannot live by this. We 

have 58 counties in California and 58 different standards. Make a 

state standard. Then after a few states adopt it, they come to the 

Federal Government saying, we need a national standard. 

That is usually the way standards are set. We are the last to set 

them, except for things like aviation and interstate commerce. 


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Mr. KINGSTON. Do you know how many people it is going to take to do this? An amount of $314,000 is not huge dollars by Federal 

standards; but you say 10,000 facilities. 

Ms. SMITH. In the 2008 budget, we have seven staff members associated with this; and then we would be requesting to add two additional staff. 

Mr. KINGSTON. So they do not go out in the field, obviously. Oh, 

they do? 

Ms. SMITH. They do. 

Mr. KINGSTON. They do or they do not? With nine people, you do 

not really have a field staff. 

Ms. SMITH. Yes, we would most likely have some of these in the 

field, and some may be at headquarters, as well. 

Mr. KINGSTON. Okay, Mr. Farr and I will discuss this a little 

more. 

Mr. FARR. Yes, if you will enlighten me, I did not even know this 

was an issue. 

Mr. KINGSTON. Yes. 

Mr. FARR. I have not been keeping up on the rats. 

Mr. KINGSTON. Well, it just caught my attention in terms of Federal Government involvement in things. Now I am out of time, having yielded so generously to you. If I could ask one quick question, 

though. 

Mr. FARR. Yes. 

NATIONAL ANIMAL IDENTIFICATION SYSTEM

Mr. KINGSTON. We did talk about the Kansas State University 

study on national ID. When is that going to be ready? Because I 

thought that there were some findings already out. 

Mr. KNIGHT. It will be this summer. I cannot recall off the top 

of my head whether it is a June or July delivery date. But it will 

be this summer that we will have the preliminary findings. 

Mr. KINGSTON. You know, in the Farm Bill deliberations, they 

will not have the benefit of this study. 

Mr. KNIGHT. They will not. 

Mr. KINGSTON. They do get together by the 18th. 

Mr. KNIGHT. There is nothing at present in the Farm Bill in reference to ID, other than one provision regarding confidentiality of 

the information. So the Farm Bill has virtually no impact on the 

ID program. 

Mr. KINGSTON. Okay, I yield back. I am going to have another 

question on another subject. 

Mr. FARR [presiding]. Ms. Kaptur. 

WIND TURBINES

Ms. KAPTUR. Welcome, it is good to have you here today, and I 

guess I will start with APHIS and Administrator Smith. 

Last year, in the 2008 Appropriations Bill, our committee directed the agency to pay particular attention to the effect of bird 

strikes from wind power generation. All over America and really 

the world, the fastest growing segment of renewable energy is wind 

turbines. 

It is my understanding that the agency did not act on this directive from Congress. Could you please tell me why and what we 


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might be able to do to help develop better data where these turbines may be intersecting with flyways and so forth? 

Ms. SMITH. Certainly, I would be happy to. Just a point of clarification, we did receive funding for our air safety program, which 

is ensuring that our aerial operations are conducted in a safe manner to protect our employees. 

We did not receive specific dedicated funding with respect to the 

aerial safety issue with respect to birds and the wind turbines. But 

we are doing some research at the Sandusky Field Station, where 

we are doing research on visual warnings for birds; both looking at 

how they respond to specific light wavelengths and pulse frequency 

combinations. We are hoping that this research will lead to some 

potential warning mechanisms that can be used in association with 

these turbines. 

I would also just share that the Fish and Wildlife Service and 

the Department of Energy have authorities, as well, related to bird 

conservation and energy development. We are aware that they are 

working together to develop wind power turbine design and identify areas where the placement of these turbines would have minimal impact on migrating species. 

So we are talking to other agencies so that we are aware of what 

they are doing, and we are also doing some specific research at the 

Sandusky Field Station. 

Ms. KAPTUR. All right, if you could give me any direction; if we 

have not given you enough authority, if we have not provided sufficient funding. This is a particular issue in the Great Lakes—Lake 

Erie is the Saudi Arabia of wind—or also on the intersection of the 

Mississippi and Atlantic flyways. 

We have to find an answer to this. I happened to run into somebody; and I got the best answer sitting next to somebody sitting 

next to somebody on an airplane, a researcher up at the Michigan 

State University, who has done extensive research on bird turbine 

issues. 

I just wonder whether your APHIS people, would they be doing 

a search of studies? I think this person was part of the faculty up 

there at the agriculture school. Would you be in receipt of that information? 

Ms. SMITH. I would imagine we would be. The standard approach 

for us in terms of deciding what types of research projects we undertake, we start with an assessment of what is needed. Part of 

that is evaluating the literature that is currently available. 

So certainly, if it is anything peer reviewed, or if this individual 

is active in the professional community, then our researchers 

should be aware of it. But, of course, I would be happy to take that 

back and make sure that we are. 

Ms. KAPTUR. Okay, if you could tell us who to work with at Sandusky, because we have a huge task force working. I represent the 

longest coastal district in Ohio. These involve people from NASA, 

Department of Energy, EPA, all these different people. 

There has been a lot of money being put into this, and it is like, 

hey, build the windmills. I mean, get them up. We are spending all 

this money on bird research, and we have got the highest power 

rates in the country. We have to find power solutions here. 


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So if there is a scientific issue, you know, we really need USDA’s 

help in this. So I am glad to hear there is somebody over there. 

They are certainly not known to me. 

But if you could give us more information on that. Also, if you 

need more of something in legislation that we have not done to give 

you the authority, I hope you will let me know that. 

Ms. SMITH. Okay; thank you. 

VIRAL HEMORRHAGIC SEPTICEMIA

Ms. KAPTUR. In the area of, again, the Great Lakes, viral hemorrhagic septicemia—we appropriated last year $5.56 million for 

APHIS to prevent its spread. 

As we look at the expenditure of those dollars, I guess what is 

a little bit of concern is why the majority of funds—and it is not 

that much; $5 million out of billions and billions of dollars—the expenditure is not happening in the front line states being affected 

by this disease. 

In not just the Great Lakes States, but the Mississippi and Ohio 

connecting riverways, the agency seems to have signed agreements 

with Montana, Wyoming, Colorado, New Mexico, Texas, Kansas, 

where there is no evidence of the disease. 

We are a little confused, and I know the Chairman of the full Appropriations Committee, Chairman Obey, is very interested in this 

issue, as well, of why were the dollars not spent in the places 

where the disease is prevalent; and on the basis of what has been 

done already, is the disease being contained? 

Ms. SMITH. I am not sure specifically what kind of agreements 

you are talking about or work you are talking about. But what we 

did do, speaking to your issue, is that we implemented cooperative 

agreements with the eight state agencies bordering the Great 

Lakes. Then the next tier of agreements we entered into was the 

next 11 states that are located alongside those states. So we did 

put cooperative agreements in place for the most directly affected 

states. 

Ms. KAPTUR. Have you contained the spread of the disease? 

Ms. SMITH. Right now, we are doing a national survey where we 

are focusing more surveying on the high risk states. So it is a survey based on the higher risk. At the end of this national survey 

then, we will have a fuller picture of the status of this. 

Ms. KAPTUR. I am going to share with you, I mean, you have got 

agreements with Alabama, Connecticut. I do not know if you have 

viral hemorrhagic septicemia in Connecticut—Delaware, Mississippi, New Jersey, New Hampshire. Anyway, you know, the people in the Great Lakes are a little unhappy, to say the least. So 

we are just curious as to what kind of thinking would not focus 

where the problem was the greatest. 

Mr. KNIGHT. If I could, we will look at this and make sure we 

give you a good comprehensive response for the record on this. 

I do believe that part of what you are seeing are the funds for 

this comprehensive survey. As we were dealing with VHS, I recall 

last summer, we have those states that are definitely on the front 

line. So it is the Great Lakes that are experiencing the challenges 

with this. 


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But because this is an emerging disease problem, we do not know 

the extent of its presence in the entire United States, and that is 

what this national survey is intended to do; to really be able to 

scope the extent and to be able to make an informed decision on 

how to control VHS. 

So I am speculating, and this is pure speculation, that that is 

why you see the investments in some of the states that are beyond 

the known front line of the VHS problem. 

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Ms. KAPTUR. Madam Chair, the Chairman of the full committee 

also wanted me to present this information. I will end with this 

statement, so we see if we are working from the same database or 

not here. 

But of the $5.56 million for APHIS, four activities relating to combating VHS and its spread, you have spent $1.8 million for 39 

state cooperative agreements and one tribal organization; $1.4 million for a lab at Ames, Iowa; 20 percent, $1.1 million for administrative overhead, and we have a question mark what that is for. 

Then there was another $1.26 million left. We do not know what 

that was spent for. So we are very interested in pinning down 

where these dollars are being spent and for what purpose. Finally, I believe that you had proposed in your budget a $3 million cut from APHIS’s aquaculture program. If that is true, if you 

have not contained the spread, why are you cutting the funds for 

aquaculture, when we have to restore the fish population? We do 

not really understand that. 

Mr. KNIGHT. If we could, I will have our follow-up work go 

through each of those numbers and respond to you. 

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Ms. KAPTUR. Thank you. 

NATIONAL ANIMAL IDENTIFICATION SYSTEM

Ms. DELAURO [presiding]. Thank you very much, Ms. Kaptur. Let 

me ask if we can put the chart up. Can we put that chart up? I 

will really wind up with two additional questions on the animal ID 

program, and then I want to move to AMS and to GIPSA. 

But this whole area of cooperative agreements, we are not really 

clear what the department has produced the whole $128 million 

for. We talked about, I think it may even be 51 percent of it. It is 

$35 million that we have talked about from 2004 to 2006 on a cooperative agreement. That does not include 2007. 

Let me just quote the GAO on cooperative agreements. ‘‘USDA 

has not consistently monitored cooperative agreements and, as a 

result, cannot be assured that the agreement outcomes have been 

achieved.’’ 

I would just explain the chart. Each one of the dots represents 

a state. Then you have the dollar amounts on the horizontal line 

at the bottom. The vertical line tells you what percentage of the 

goal has been met in terms of premise registration. 

So what we see, if you go to absolutely the far end of the right 

side of the chart, we have got $2.2 million there that has been in 

this particular agreement with this state. We have got, you know, 

maybe 15 or so percent where we are dealing with what has been 

accomplished. 

The point of the chart is that really the dollar amounts that are 

being spent in the states and the premise registration, there is no 

connection. There is no connection that if you spend more money, 

you are getting more registration. So you have spent significant 

amounts of money on agreements, and they still have not enrolled 

the premises. 

Some states have spent $9, Wisconsin; $15, Michigan, $18 per 

premises in Indiana per premises registered. Other states have 

spent $421, California; $383, Kansas; $340, Colorado per premises 

registered. So we have no connection between the amount of money 

you are spending per state versus what is being registered. 

Now I am going to ask these three questions which are for the 

record, because I want to, as I said, wind up with one more question. What value are taxpayers deriving from these cooperative 

agreements? Why should taxpayers continue to fund cooperative 

agreements? How has APHIS stepped up its oversight and evaluation of these cooperative agreements since the release of the GAO 

findings? That question is, what are the lessons learned here? 

How is APHIS evaluating the performance of the states that 

have effectively used Federal dollars in sharing these best management practices with other states? 

I would just add one final note there. I read in testimony that 

you have also set up cooperative agreements with industry. I would 

be interested to know whom those folks are, what they are doing, 

and the monitoring of those efforts, as well, and the costs involved 

in that effort, as well. I think graphically, this demonstrates what 

is happening. 


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MANDATORY VERSUS VOLUNTARY ANIMAL ID

Let me make a comment. I am not going to belabor mandatory 

versus voluntary and re-litigate that effort again. But I am concerned though about another comment that you made. These are 

remarks to animal identification form at the cattle industry annual 

convention in Reno, Nevada this past February. 

You acknowledge that NAIS set a trigger for it to become mandatory in 2009 if there was insufficient participation. This is your 

quote. ‘‘But I took that out behind the barn and shot it to death. 

It is no longer there.’’ 

I need to ask, to what extent did you in the USDA evaluate other 

countries’ experiences with implementing animal ID systems before 

you took our ID system out back and shot it to death? 

I am also going to mention the Secretary’s comments just recently, I think, this week. This is about animal identification. He 

sends a strong message that we need to gather the information and 

put a system in place in the United States of America now. 

We look to our good neighbors to the north in Canada. They have 

got well done and a good functioning animal ID system, and it has 

proved valuable to them many times. It was born out of a crisis. 

But do we have to have a crisis here before responding? 

I will also mention to you, I think it is imperative to note that 

Argentina, Australia, Brazil, Canada, the European Union, which 

makes up 27 countries, all have mandatory ID systems. They have 

had them now for the last several years. 

Has USDA reconsidered its decision to move forward with a 

mandatory ID system for certain species? Have you re-thought this 

issue; and what is the compelling public interest to not allow us to 

move forward with a mandatory system? 

Mr. KNIGHT. Certainly, to the first round of questions, we will be 

pleased to respond on the record. They are excellent questions and 

deserving of a good response. 

The voluntary versus mandatory issue continues to be one of the 

more controversial issues that we have pertaining to ID. We have 

areas of very, very intense and strongly-felt producer-led grassroots 

opposition to animal ID. 

I have met with many of those individuals. There is a very intense opposition to ID in Missouri, very intense and active groups 

in Virginia. In New England, Vermont has been very difficult. In 

Maine, Maine has been extraordinarily difficult. Montana and 

Washington have very strong opposition to ID, mandatory or voluntary. 

The decision to proceed with a voluntary program is a very pragmatic effort to move past those pockets of opposition to a program 

that can become robust in a very coordinated manner. 

The investments that have been made over the last several 

years, as far as integrities of the database, standardization of the 

rules, every one of those things are an extraordinarily sound investment that would work every bit as well under a mandatory system as a voluntary program. So you have got a good sound underpinning there as we move forward with animal ID. 

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Ms. DELAURO. You acknowledge that the NAIS set a trigger for 

it to become mandatory in 2009 if there was insufficient participation. I think there is ample evidence that there is insufficient participation. 

But you felt that this movement—and you are the Under Secretary here—that you took it behind the barn and you shot it to 

death. You know, I understand going to conference and throwing, 

excuse me, red meat out. But you know, your words follow you; and 

what you say gives us some insight to what your view is about this 

program. 

Let me just say this. The GAO report revealed that earlier on in 

the development of the animal ID system, USDA recognized that 

a fully functional tracking system will keep the U.S. competitive in 

international markets. 

Given the Administration’s focus, your focus on trade, and your 

focus on supporting the industry, I find it necessary to return to 

that decision that you have made to hobble our animal ID system 

and to weaken our competitive position. I believe that that is the 

result; and if the Department is going to have a credible and effective animal ID system, there has got to be a change in the department’s approach. 

Maybe the sense is that it will not be on your watch and we will 

wait and pass the time for another day and another Administration. If that is the case, I think you have done a disservice to our 

competitive position and to our industry. 

Mr. KNIGHT. If I may? 

Ms. DELAURO. Sure. 

Mr. KNIGHT. The reason that I have confidence in a voluntary 

system lies with the market forces that are leading people towards 

voluntarily embracing identification and those marketing systems. 

I see both domestic and the international market forces asking for 

increased traceability and putting greater and greater reliance 

upon that, and so I see this coming about quite naturally because 

of the market forces, as opposed to a government fiat. And so as— 

Ms. DELAURO. Argentina, Australia, Brazil, Canada, the European Union and 27 countries which make up the European Union. 

This goes back. 1992, sheep and goats in the European Union fined 

since 1992. Cattle, buffalo, bison, equine for 2000. These are nations, these are our trading partners. They make it mandatory. 

They protect, if you will, their industry. We have left our industry 

exposed, and I think that ultimately that will be—well, we will see 

where we go but I do not think that there is, quite honestly, any 

of the data that points in the direction that we have taken this 

issue as seriously as we should have. 

Mr. Farr. 

LIGHT BROWN APPLE MOTH

Mr. FARR. Thank you very much. You will never guess what I 

want to ask you about. I was just reading some of the articles here. 

There are 30 cities in California that adopted resolutions to oppose 

a spraying for LBAM and other state legislatures considering a 

dozen bills right now, and they are moving. I know Senator Boxer 

and Senator Feinstein are going to be inquiring about these issues. 

I am the only westerner that sits on this committee, so I am sort 


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of raising these issues for all the California Congress members. 

There are 54 of us, and I am sure if it spreads to the other Western 

states I will probably be asked those questions by those legislators 

as well. 

So I would like to, since this has been declared an emergency 

and you are assisting the state with eradication, what is your 

budget request for 2009 for funding for the LBAM program? 

Mr. KNIGHT. $24 million. 

Mr. FARR. 24 million? 

Mr. KNIGHT. Yes. 

Mr. FARR. Is there any state match for that? 

Mr. KNIGHT. There is no state match in that number. 

Mr. FARR. I have heard that the current eradicative strategy may 

take up to five years to be successful. Are you preparing funding 

forecasts that support that expectation? 

Mr. KNIGHT. The 74 million dollars in emergency funding, I believe, includes the capacity to go multiple years on those efforts. 

Mr. FARR. And do you have, does the USDA have a plan that 

provides the technical and economic feasibility for eradicating 

LBAM in California by using the aerial application, or was that a 

state—is this your plan or their plan? 

Ms. SMITH. We are the ones with the plan, but if I could just 

clarify,—— 

Mr. FARR. Please. 

Ms. SMITH. The 74 million was for one year, and we have a proposed plan for lesser amounts in future years. 

Mr. FARR. 74? You said 24 for 2009. 

Ms. SMITH. 24 is 2009, and he referenced 74, that was for the— 

Mr. FARR. That is for the whole, any kind of emergency? 

Mr. KNIGHT. The 74 was the CCC fund. I believe in my response 

I had implied to you that that would carry into the multiple years, 

and Administrator Smith is trying to very delicately correct my 

statement. 

Ms. SMITH. Maybe not so delicately. [Laughter.] 

Mr. FARR. But appropriately. So how much do we have for 2009? 

Mr. KNIGHT. 24 million for 2009. 

Mr. FARR. That is including CCC? 

Mr. KNIGHT. That is not including the CCC request. 

Mr. FARR. And how much to add the CCC? 

Mr. KNIGHT. Those are emergency funding requests, and we use 

those as the bridge money up front. 

Mr. FARR. And that was 74? 

Mr. KNIGHT. That was 74 million. 

Mr. FARR. For 2008. 

Mr. KNIGHT. Beginning in 2008, because that was not anticipated. 

Mr. FARR. Has USDA or any other agency eradicated LBAM 

using a pheromone? 

Mr. KNIGHT. The scientific advisory panel, when they had looked 

at all the alternatives, came to the conclusion that, given the complexity of this issue, that the pheromone would be the best possible 

response. 


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Mr. FARR. Is that eradication response, because you have zero— 

the standard is zero tolerance, so it has to be eradication. The 

question is, is it a tool to eradicate or is it a tool to control? 

Ms. SMITH. It is a tool to control and eradicate, and of course, 

that is supplemented in the more heavily infected areas with the 

application of pesticides. 

Mr. FARR. Yes, and in those applications of pesticides you are requiring, we have a lot of organic farmers who are complaining that 

the organic phosphates that they use are, you know, do not allow 

that they have been—market their produce organic. 

Ms. SMITH. And perhaps those are not in the more heavily infested areas. I mean, what we have put together is a comprehensive strategy of multiple tools, and which tools will be applied 

would be dependent upon the specific environment that we are trying to achieve. 

Mr. FARR. But that environment is managed at a county level, 

so if you are an affected county, then you have to abide by these 

spray protocols in order to get your produce—or infections to get 

your produce certified so it can be shipped out of the county. Is that 

correct? 

Ms. SMITH. A point of clarification is that the Bt insecticide, 

which is a common one being used, is considered an organic insecticide. 

Mr. FARR. If the state is unable to launch an aerial application 

of pheromone over urban areas because of lawsuits and other 

things in state court, will USDA take over and conduct an eradication program? 

Ms. SMITH. We will have to see where we are if such a thing 

were to happen. 

Mr. FARR. Have you done that before, sort of federalize the—— 

Ms. SMITH. In any other kind of program? 

Mr. FARR. Mm-hmm. 

Ms. SMITH. I am not certain if we have. Yes, we have. 

Mr. KNIGHT. We would have to look very carefully at any decision along those lines. If we were not—— 

Mr. FARR. But see, this is the point. Our laws and regulations 

are driving it. 

Mr. KNIGHT. Yes. 

Mr. FARR. The state is doing this because the federal laws require it in order to ship out of this number one ag state, number 

one specialty crop state. The counties where they usually are found 

are in specialty crop areas. There is a lot of debate by host countries, by scientists at Davis and so on that you will never be able 

to eradicate it. New Zealand and Australia were able to control it 

through natural license, and as I read, that New Zealand has 

stopped any kind of spraying program. 

So I think there is going to have to be revisiting, first on the initial policy of how bad this pest is and whether it really does eat 

up all these things that it says it does, because so far, the evidence 

is that it has not. So we are having a hard time standing on our 

federal policy. Meanwhile, the states are going nuts about having 

to do—meet your standard, even though they have used a 

pheromone which is, you know, we thought was going to be a very 

passive way of confusing this moth, and—but the public rejects it 


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from a spraying standpoint and has raised some serious issues 

about the ingredients that the pheromone is mixed in that is 

sprayed. 

I think it is really important, and these questions really get to, 

is to this long-term commitment of whether we ought to, one, revisit the policy of how dangerous is this specie, and do we have to 

have zero tolerance? Perhaps we need a little more time to study 

that, and at the same time, I think we might have to step in, and 

you know, I do not know how you are going to win a public relations war that the state is losing. 

There are just some serious issues here, where the public might 

be able to stop the Department from using the spray technique, 

and are we going to then go to ground twist ties and things like 

that. I think these things really have to be thought through and 

have a budget for it, and really, this is like an emergency. This is 

the Katrina of agriculture right now in California. 

Mr. KNIGHT. No doubt about it, it is a major event that is worthy 

of serious dialogue and consideration on how we go forward. The 

advisory panels that have looked at this have come to us with the 

recommendation that the current eradication strategy would be 

most cost-effective. 

Mr. FARR. But if that does not work, what is plan B? 

Mr. KNIGHT. Plan B would be to fall to a containment strategy. 

I am fundamentally concerned about a containment strategy, or 

how to contain it in the current geographic area in California, because of the potential of disruptions in movements of fruits, vegetables, propagated material, perhaps within California, but certainly 

outside of California, very concerned about the potential for both 

domestic and international business impact. 

Mr. FARR. If science warrants a reclassification, cannot you do 

that? I mean, there seems to be nobody asking, putting money and 

research into the assumptions on which this policy was adopted. It 

is 24 years old. 

Mr. KNIGHT. I am certainly willing to, per your request, take a 

look at that and we will see what assumptions we can, what we 

can do and find. 

[The information follows:] 

LIGHT BROWN APPLE MOTH—NEXT STEPS IF ERADICATION IS NOT FEASIBLE

If eradication is not feasible, APHIS can reclassify a pest based on new scientific 

analyses. In 2003, APHIS had the University of Minnesota’s Department of Entomology conduct a mini-risk assessment on Light Brown Apple Moth (LBAM) updating the 1984 analyses. The 2003 risk assessment indicated that LBAM is considered 

highly likely to become established in the United States and that the consequence 

of its establishment in the United States to agricultural and natural ecosystems 

would be high or severe. This conclusion supports LBAM’s classification as a quarantine pest. 

Mr. FARR. Thank you. 

Ms. DELAURO. Ms. Kaptur. 

TRADE WITH JAPAN

Ms. KAPTUR. Thank you, Madame Chair. I have got a lot of questions and not much time. 

On, Mr. Knight, Agricultural Marketing Service, are normal beef 

marketing relationships reestablished with Japan? 


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Mr. KNIGHT. Trade with Japan is restricted to beef under 20 

months of age. There is a great deal of work to be done to fully reopen that market. 

Ms. KAPTUR. I would very much like to work with you and the 

Japanese embassy on bringing in their officials to northern Ohio, 

and to go to some of our family farmers who are tagging animals, 

and they know everything they have eaten, no hormones, no antibiotics, et cetera, and to see if we cannot begin to restore some of 

that beef market. I am not exclusive to Ohio. You can do this in 

any state, but I sort of do defend Ohio quite a bit—to see if we cannot begin to reestablish that relationship by buyers gaining confidence at the farm level. 

If that is possible to do through you, I would very much like to 

do that. 

Mr. KNIGHT. We would be willing to do that, or working with 

some of my other colleagues that do that sort of trade work, we 

could coordinate a USDA effort. 

Ms. KAPTUR. Okay. Honda operates in Ohio. It is one of our big 

corporations there, and there are a lot of flights that happen between Columbus and Tokyo. All right, so I am thinking, you know, 

if we would need a freezer at the airport, but we have got to have 

people confident this is good product, but I think it is good if the— 

however the Japanese arrange it, if they send in their buyers, to 

get to know people and to gain a confidence level on how it is not 

a huge feed lot with, you know, 40 to 100,000 animals, that they 

are individually raised, and so forth, I would love to try that if it 

would aid you in your efforts to open up that market. 

Mr. KNIGHT. Certainly, and I would be remiss if I did not note 

that my counterpart, Under Secretary Mark Keenum is before you 

tomorrow, and he has the primary lead on this topic. 

Ms. KAPTUR. Okay. All right. What would be your role, then? 

Mr. KNIGHT. From the animal ID side, I could assist you. From 

the aspect of the AMS export verification, we could assist you. 

From the aspect of the phytosanitary issues, the APHIS side of the 

house could take care of it. Under Secretary Keenum, Under Secretary of Farm and Foreign Ag Service, FFAS, has the lead on the 

international relations on market development. 

Ms. KAPTUR. Okay, whatever you can put together for me over 

there, help me do it. Okay? I am going to try with the Ohio Cattle 

Association to do this the right way. 

Mr. KNIGHT. Okay. 

URBAN WILD ANIMALS

Ms. KAPTUR. Okay. Small question to Administrator Smith, 

urban—though it is not your job, but wild animals within the 

urban environment, how can I get USDA to partner with whomever 

I have to get them to partner with to look at exploding populations 

of deer, coyote, rodents, in cities? The animals do not know where 

the border of a municipality is. They go along the rivers. They go 

along the creeks. Urban people treat anything that breathes as a 

pet. 

How do you know when you have reached a tipping point in 

terms of too many of something wild within your city limits? Quite 

frankly, because we are in the North American flyway up in the 


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Lakes area where I live, we have too many geese. They are literally 

now polluting our urban borer pits where we have these reservoirs 

that we have created. I do not know what the solution is. In terms 

of cormorants, we have managed to put oil on some of the eggs out 

in the nests that line the shore just for that one bird, but what is 

the role of APHIS and others, where we could put a team together 

to look at maybe some prototype urban areas and what could be 

done to control the wild animal populations that are growing that 

nobody has responsibility for? 

We have a dogcatcher. That is all we have within the urban limits. What do we do? 

Ms. SMITH. I very much appreciate the question. Of course, we 

do have Wildlife Services, and within that program, of course, we 

have authority to provide assistance to public and private entities 

to manage urban areas. Of course, it is not part of our appropriated 

funding, so we do it on a reimbursable basis, but we do get involved in that kind of work. We have been involved in, for example, 

you mentioned the cormorants. 

We worked with that in the Fish and Wildlife Services and conducted environmental impact statements to look at double-breasted 

cormorants, we did that back in 2003, and their impact on water 

bodies and on other places, and certainly we recognize that— 

coyotes are another example of something that has become a pest 

in urban areas. They can go all the way across the country. Raccoons and coyotes both transmit rabies and bring other types of 

problems for people in Ohio, and then of course, we have got the 

whole issue of deer with populations that have moved to a level 

that are creating more than $1.1 billion a year in damages through 

vehicle collisions. 

So there are certainly a lot of these areas. I would be happy to 

talk with you further about how we might look at this a little bit 

from equals, work with some others in terms of getting answers to 

your questions on kind of what is the tipping point. In the meantime, we will conduct environmental assessments and environmental impact statements when we have specific projects that we 

are asked to work on. 

Ms. KAPTUR. I would like you to help me think of how to do this. 

Madame Chair, I will just take 30 seconds to say that I am not 

quite sure who to put around a table, but I want to do that since 

I do not even have data in terms of raccoon rabies, where its 

spread is and then looking at the explosion of raccoons in our region. If I look at deer, I do not know the extent of lyme disease, 

where it is spread, where it is in the country. I do not have all 

these researchers on my staff that can do all this for me, and then 

looking at the exploding deer population in the city of Toledo. 

Coyotes is another issue. I know we have a lot of them. You 

know, these people, integrated pest management, all these companies that go out and try to catch these things when they are in people’s yards, how do you measure this? Who do we get together to 

look at this and to work with our local officials? We have a huge 

feral cat problem within the city. We are not the only city that 

does, but there is this tiny little program to neuter cats, but somebody has got to give us a sense of how does an urban area work 

in conjunction with the wild, and what are normal limits? 


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If geese are polluting all of your city play lots, you have reached 

a tipping point, and you know, what do you do? Nobody has responsibility. So if you could help me figure out how to put people 

around a table, I cannot believe we are the only city in America 

that has this situation. 

Ms. SMITH. We would be happy to have that discussion with you. 

Ms. KAPTUR. Thank you. 

Ms. DELAURO. Thank you, Ms. Kaptur. 

NUTRITION PROGRAM PURCHASES

Mr. Day, we get a lot of scrutiny of the school food programs of 

late because of what happened at Westland/Hallmark and the recall. I think it would help the subcommittee, the press and the public to try to clarify some basic points about the role that AMS plays 

in the purchasing of commodities for the school food program. Let 

me just try to go through this if I can. 

The IG described your role as follows: ‘‘AMS obtains commodity 

orders from FNS, and is responsible for issuing and accepting bids 

and awarding and administering contracts. Also, AMS is charged 

with overseeing the contractors’ production and shipment activities 

to ensure conformance to product specifications. In addition, AMS 

works with the Food Safety and Inspection Service to ensure that 

products are wholesome and processing plants operate under sanitary conditions.’’ Is this accurate? 

Mr. DAY. Yes, ma’am. 

Ms. DELAURO. You buy products for programs other than the 

school lunch programs? 

Mr. DAY. That is correct. 

Ms. DELAURO. Are your specifications for purchases of a product 

the same—— 

Mr. DAY. Yes. 

Ms. DELAURO [continuing]. Regardless of the program served? 

School lunch versus TEFAP, for instance. 

Mr. DAY. Yes, ma’am. 

PURCHASING STANDARDS

Ms. DELAURO. Okay. In terms of the standards, let us use 

ground beef as an example. You have a very long ‘‘technical requirements schedule,’’ in which you lay out your specifications, for 

example, the ground beef must be only from U.S.-produced livestock, be from humanely handled cattle in compliance with all 

FSIS rules, not come from non-ambulatory cattle, have gone 

through two pathogen intervention steps, must have been subjected 

to certain microbial tests and be within certain standards. 

Who decides what your standards should be? 

Mr. DAY. We decide what those standards are. 

Ms. DELAURO. AMS decides? 

Mr. DAY. Yes. 

Ms. DELAURO. Does the final decision on standards come from 

FNS, FSIS, AMS? Do you all have to agree to those standards? 

Mr. DAY. We agree that they must meet FSIS requirements, and 

then on top of that, AMS has other standards because of the vulnerable communities about which you spoke, to ensure that, as any 


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large procurer, we are getting what we want and we are protecting 

school kids or the elderly from the potential of pathogens. 

Ms. DELAURO. So your standards go above the FSIS standard? 

Mr. DAY. I would just say they complement them, but they are 

higher. 

Mr. KNIGHT. Yes. 

Ms. DELAURO. They are higher standards? 

Mr. DAY. They are in addition to those standards. 

Ms. DELAURO. In addition to. And the ones that I have mentioned, those are the—only U.S.-produced livestock, humanely handled cattle in compliance with—having not come from non-ambulatory—are those the current standards? 

Mr. DAY. Correct. 

Ms. DELAURO. Your standards? 

Mr. DAY. Yes. 

Ms. DELAURO. Okay. And I think I know the answer to this 

question. Do you always choose the highest standard from a public 

health perspective? 

Mr. DAY. Well, FSIS has the highest standards from a public 

health perspective. We have additional requirements as a major 

procurer of commodities. 

Ms. DELAURO. And your standards then are based on—they are 

higher because of? 

Mr. DAY. They are higher because of the fact that we are feeding 

these vulnerable communities, and the fact that we are a large procurer, therefore, we can insist on higher standards, and we model 

those standards on what some of the largest procurement operations in the country do that are private as well. 

Ms. DELAURO. So do you choose the higher standard from a public health perspective? 

Mr. DAY. No. 

Ms. DELAURO. Let me try to bring two issues together at once. 

Let me just go back. So your standards are just for procurement 

purposes? They are not as you have to deal with the populations 

that you are charged with procuring the product from? 

Mr. DAY. We feel a great deal of responsibility to ensure that our 

communities that receive the commodities we procure have the 

highest standard in both the public and private marketplace for 

procurement. The standards based on public health are set by 

FSIS. 

Ms. DELAURO. So the public health standards are set by FSIS. 

Mr. DAY. Correct. 

Ms. DELAURO. You do not set public health standards. 

Mr. DAY. Correct. 

FOOD PROGRAM PURCHASES AND ANIMAL ID

Ms. DELAURO. Let me try to bring two issues together at once 

here. AMS purchases for food programs, and the animal ID issue 

that we have been talking about. Some have suggested that one 

way to boost participation in the animal ID program, in the absence of a mandatory program, would be to require that all meat 

purchased by AMS come from producers who have registered their 

premises. We could even require the animals themselves to be 

tagged. 


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This could increase participation in the animal ID program. Also, 

in a case such as Hallmark/Westland, we would know about the 

history of the animals involved, which could help address public 

health concerns. I believe your technical requirements schedule 

does say that the meat bought by AMS must be traceable to domestic sources. The best way to ensure that is to require sellers to register their premises and their animals. 

What do you think about this? 

Mr. DAY. Well, one of the issues around this is that probably at 

this point we do not have the ability, or this might preclude some 

animals from coming into the system if we required animal identification. I have been working very closely with Under Secretary 

Knight, whose very high priority is animal identification, to find 

ways in which we can enhance the marketing value of having animal identification, and some of that effort is around things like our 

export markets, as well as, potentially, country of origin labeling. 

What you are raising is something that we can certainly look 

into and find out if there would be some kind of market impediment or attraction to having this as a requirement. Right now we 

conduct audits to ensure that—— 

Ms. DELAURO. What do you see would be a market impediment 

to doing that? In other words, you have to deal with—you are dealing with the highest standards with regard to procurement. 

Mr. DAY. Right. 

Ms. DELAURO. And those standards, you would be able to meet 

those highest standards with what your regulations are, this traceable to—meat bought by AMS must be traceable to domestic 

sources. Would it not then make sense—I mean, I am just trying, 

you know, for—we then, those who are going to be supplying the 

food programs here that you have lifted standards on, that then requiring them to register their premises and their animals, would 

that in fact enhance your ability to meet those highest standards 

which you have? 

Mr. DAY. It would, but we need to evaluate whether it could potentially price us out of the market, because at the same time, we 

are trying to buy as much beef at as good a price as possible so 

we can supply an ever-increasing number of recipients. But it is 

certainly something that we can look into. 

Ms. DELAURO. Yes, well I think that we ought to try to take a 

look at this, because I think it makes enormous sense to do that 

because I said, and I said in my opening remarks, you have higher 

standards, and they are directly related to the procurement piece, 

and if it is directly related to procurement, these are folks who 

want to sell their product to you, and you want to procure their 

product, therefore, let us try to achieve the highest standard, which 

are your standards, which you have laid out, and I think very 

rightly so, that it would make enormous sense to me to try to move 

in this direction. 

So I really do want to pursue this with you and see if that is 

something that we can really try to consider. Can I just ask a question which is probably a frivolous question? Who recommended 

Westland/Hallmark for the supplier of the year award for the lunch 

program? 


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Mr. DAY. I assume our Livestock and Seed Division evaluated 

their performance on contract and meeting of specific requirements 

and specifications, and they did a good job on that, and thus they 

were awarded that, but given what we know now, we have retracted that award based on what they have done. 

Ms. DELAURO. I understand the award has been retracted. Okay. 

Thank you. I really do want to pursue this, and we will be back 

to you about this. Thank you. 

Mr. Farr. 

AGRICULTURAL INSPECTIONS

Mr. FARR. Thank you very much. I have been grilling you, but 

I also have not thanked you for being public servants, and I really 

appreciate that. We appreciate your professional work. 

Ms. Smith, you know, a lot of us at Congress think we made an 

error back in 2002 when we moved the agricultural inspection from 

the oversight of USDA to the Department of Homeland Security, 

and it sort of looks like now that it is piecemeal, ad hoc, emergency 

appropriations that have become necessary to eradicate pests, and 

when they were in your department, it fit better for your responsibilities. I noticed in your testimony that you stated that you are 

responding to new outbreaks of tuberculosis, emerald ash borer, 

the potato cyst nematode, the light brown apple moth, and some 

other programs. 

Do you still think that the APHIS folks in Homeland Security 

are doing a better job there of pest exclusion than they would be 

in USDA? 

Ms. SMITH. I do think there are—I have had the opportunity to 

go to a couple of ports of entry since I have taken this position, and 

one thing that they have there that gives them a leg up from what 

they had with us, they have the technology that Customs, that 

CBP has, in terms of looking for drugs or guns or other things, 

things smuggled into the country. It is a very nice technology that 

they have access to. It is just an example of something that—— 

Mr. FARR. But the complaints are that then they have to spend 

their time looking for drugs, not looking for bugs. 

Ms. SMITH. Well, they have different ways that they approach 

the resources, and that is one of the specific areas when I mentioned earlier that we have 10 areas that we have identified that 

we are working in partnership with them, and the management of 

the staff of the inspectors that do that work is one of those areas, 

and looking at how you provide the right management structure 

over them, but we dedicate agricultural inspectors that just do 

that, and they are supplemented by some inspectors that are doing 

a variety of tasks as well as the management work. I think we are 

reaching some agreement about additional dedicated managers 

that oversee the AQIs. 

Mr. FARR. Well, we are going to submit some questions of just 

how much pests they have detected outside of the U.S., and how 

much of it is sort of the learning at ports of entry, or like light 

brown apple moth, how much just gets discovered state by state 

that it has gotten in here somehow. I think this whole question of 

where we put our resources is under review, and I know there are 

many members of Congress who feel that we ought to move APHIS 


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back into your department rather than Homeland Security’s, and 

I am sure that will be a discussion for legislation next year, but 

we will submit some questions on that. 

PHYTOSANITARY CERTIFICATE FEES

I wanted to turn to another, which is really the regulation area. 

Our county ag inspectors have the responsibility for inspecting 

every single shipment. I am the leading agriculture county in the 

United States in sales, and probably in just movement of cartons, 

probably number one in the world. Those things all have to be inspected by hand locally, and it is a cost to our county ag commissioner and they have to take over the entire fairground. I do not 

know what we are going to do when the fair starts, but that is this 

age, and the question there is, what program area line contains the 

allocation for issuing the phytosanitary certificate? 

Is that in your, Mr. Knight, in your budget? Do you reimburse 

the counties, states and counties on this? 

Mr. KNIGHT. I am going to defer to Administrator Smith to give 

you the response on the certificates. 

Ms. SMITH. We charge fees for those certificates. 

Mr. FARR. So you require the locals to collect? What assumptions 

did you make regarding the change to the fees charged for issuing 

these certificates? 

Ms. SMITH. I am sorry. Would you repeat the question? 

Mr. FARR. I guess the question is, how are these fee rates set? 

What is the basis for it? 

Ms. SMITH. I would be happy to get that information again and 

provide it to you. 

Mr. FARR. Because it is not cost effective, whatever the rates are, 

and obviously it goes into competition if that is the cost of doing 

business, but it is affecting just those counties that are quarantined. Is there any, in the emergency money, any way of helping 

out the local ag commissioners in carrying out their responsibilities 

for issuing these phytosanitary certificates without just relying on 

the fee rate? 

Mr. KNIGHT. If I am understanding the question correctly, you 

are inquiring as to the additional costs associated with issuing the 

phytosanitary certificates in these counties that are in the light 

brown apple moth quarantine area, because we have got a fee 

schedule for phytosanitary certificates, for the normal commerce of 

that. Now those counties are facing an additional unanticipated 

cost—— 

Mr. FARR. That is correct. 

Mr. KNIGHT [continuing]. Associated with that. Okay, now that 

I understand the question, I think we can get an answer for you 

on those costs and where that is going. If I recall correctly, I believe we are counting those additional costs as the state and local 

government match for the emergency work, but I would like to 

check on that and respond to the record to make sure that I am 

accurate, but I do think we use those fees to be the state and local 

government match associated with that, but we will look into that 

for you. 

[The information follows:] 


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smartinez on PROD1PC70 with HEARINGInsert graphic folio 579 48543A.361
459 

Mr. FARR. Yes, okay. 

Ms. DELAURO. Ms. Kaptur. 

LOCAL AGRICULTURE

Ms. KAPTUR. Thank you, Madame Chair. 

Mr. Day, I am going to ask you to think creatively with me here 

for a minute, and I always use my district as a barometer for the 

rest of the world. My goal is to do my best to connect local farmers 

to local consumers, and to figure out why the system does not work 

to that end. Also, I am very interested in providing better nutrition 

to all people in my community, regardless of income. Last year we 

submitted a question on data assistance by USDA to farmers markets. 

I found farmers markets to be one of the most effective ways that 

local farmers can make product available to the public, and we 

asked your agency to comment about what more was being done to 

help to promote farmers markets, and we pretty much got a status 

quo answer on that. I note from the testimony today that in the 

Farmers Market Promotion Program, you provided $1.3 million, 

over 300 applicants submitted applications and only 23 were able 

to be funded. 

This is a significant dysfunction within USDA. There is a desire 

for local agriculture to market its products, and I just want to point 

out to you, I do not think USDA is doing everything it can to put 

its shoulder to the wheel to help to connect local agriculture to 

local consumers. Now, just let me continue here for a second at 

some of your other programs. You have tremendous authority to 

buy, to procure, and one of my questions to you would be, what 

structures have you set up to procure from local farmers? 

Example, I met with a group of our farmers yesterday who are 

specialty crop producers, and you know, they are able to sell their 

bell peppers, for example, that have no red spots on them, they 

have not ripened too much, and those go to the major chain, but, 

and I do not think this is a secret anywhere, all across the country, 

farmers plow under a third to a half of what they produce because 

of market—they do not want to interfere with market price locally, 

but there ought to be a way for USDA through your service to find 

a way to collect that, to help us get it processed locally, we will 

work on that, and then to get it to the hungry people in our regions, including our senior citizens and our food pantries, which 

are empty in areas where the recession has been a reality for a 

long time. 

We have great food needs, but I do not see that the local farmers 

are being empowered in this. Same thing with your specialty crop 

program. I was looking at that and I wondered how much of that 

procurement is actually being done by local producers. I want to 

give you an insight. For years I have been a big supporter of the 

senior farmers market coupon program up here and the WIC Farmers Market Coupon Program, because it empowers local agriculture 

and it feeds hungry people and it gives them better nutrition. 

There is a network now set up—it is very loose, but it is out 

there—if you come to a district like mine, over 150 farmers are now 

registered to work with the Senior Farmers Market Coupon Program and bring healthy, nutritious food to our seniors. That is a 


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very good network that could be built on. They do not see themselves as a network, but it did not exist 10, 15 years ago when we 

got started on this. Those are people that could work with you, but 

I bet you do not see them. 

You probably work with big food brokers or something like that, 

so my question to you really is, what can you do through the AMS 

and the powers you have, and I want you to think about this. You 

cannot just answer me off the top of your head. What can you do 

in my district and across the country to use your considerable powers to help local agriculture feed the consumers closest to them? 

Mr. DAY. Well, thank you very much for your question, Congresswoman Kaptur. There is a lot that is going on in terms of our marketing programs as well as our procurement programs that is focusing on buying locally. A lot of the schools demand locally produced items. In our Farmers Market Promotion Program, much of 

what we do is focused on ensuring that people have the opportunity 

to buy food in a farmers market area, and one of the strongest contenders have been those that are putting in the electronic benefits 

transfers materials in those farmers markets so that lower income 

people can have the opportunity to buy fresh fruits and vegetables 

and meats and other things. 

In terms of our procurement, we buy product on an as-delivered 

basis, and that gives a preference to local firms. Also, states get to 

choose who does their reprocessing, and then we deliver to them, 

so that is another incentive for locally produced items. There are 

opportunities within the state specialty crop block grants for local 

production and for finding out how to market better to the schools 

as well as the feeding programs in terms of local production, and 

we also, for feeding programs, when there is a surplus and we go 

out and we buy additional commodities, much of that goes into the 

local distribution as well. 

So we are very cognizant of this movement. We are working with 

the schools and the Food and Nutrition Service to find a way that 

we can do this. Our job when we take bids is to get the best value 

for the dollar, but we buy from across the country and many small 

businesses as well, and that is all delivered locally. So there is 

much of this that goes into the feeding programs, but—— 

Ms. KAPTUR. Do you have a best community? Do you have someplace in America that is just doing it right? 

Mr. DAY. Perhaps. I would have to look into that, but there is 

a lot of local production, especially in a state like California. 

[The information follows:] 


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Ms. KAPTUR. The biggest room in the world is room for improvement, and I will tell you, in my area, there is a huge room for improvement, so I would love to follow up on this with you, and I am 

sure all of our other members would be happy to. 

COUNTRY OF ORIGIN LABELING TIMELINES

Ms. DELAURO. Thank you, Ms. Kaptur. Let me just—well, we 

have three votes coming up and I want to just tick off a couple of 

things. The country of origin labeling, you can get back to us next 

week, next Friday if you can. What are the scenarios? A farm bill? 

What happens with country of origin labeling scenario, no farm 

bill, what happens? And we need to really know that information. 

Let me ask a question if I can for our colleague, Representative 

Rodriguez. 

CATTLE FEVER TICK

This is the Texas-Mexico border, the cattle fever tick. As a result 

of the heavy rains there, the administration budget is requesting 

$2 million for this program. USDA and APHIS have acknowledged 

the worsening of the threat. They have released $500,000 in contingency funds, recently dedicating 5.2 million emergency funding to 

hire more inspectors. State officials estimate the need of $13 million. They also contend they need 42 million for a five-year plan 

that includes expanding eradication. 

The state is obviously at the farm more than your budget. If you 

very quickly can explain the discrepancy between the states’ projected need and APHIS’s budget request. Somebody. 

Mr. KNIGHT. The primary gap had to do with the emergency 

funds, in that—well, excuse me. The emergency funds, we had the 

gap there because we were not paying for the long-term equipment 

needs that were associated with that. That portion was not able to 

be done, so the $5.2 million for tick riders plus the pesticide work, 

each of those things. The 2 million that we had in our budget proposal was the best estimate of the needs at the time that the budget was developed. 

Ms. DELAURO. And the discrepancy between the 13 and 42 that 

the states have come up with? 

Mr. KNIGHT. The state estimate of their needs reflects their current experience as the problem has grown larger. 

FSIS AND AMS COMMUNICATION

Ms. DELAURO. Let me do this by way of—and again, you know, 

a more timely response. This is about communications between 

FSIS and AMS. Do the agencies communicate their findings to 

each other? 

Mr. DAY. Yes. 

Ms. DELAURO. Is there overlap in what the agencies are looking 

for? 

Mr. DAY. Sometimes. 

Ms. DELAURO. If FSIS finds a violation during an inspection that 

relates to an AMS contractor, they inform AMS? 

Mr. DAY. Yes, if they find a violation. 


smartinez on PROD1PC70 with HEARING
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Ms. DELAURO. If FSIS finds a violation during an inspection that 

relates to an AMS contract, do they inform AMS? 

Mr. DAY. Not necessarily. They do not inspect for our requirements. They inspect for their own, but we have constant contact 

both in Washington as well as in the field. 

Ms. DELAURO. So that you, AMS, notifies FSIS when it finds a 

problem? 

Mr. DAY. Yes. 

Ms. DELAURO. Does AMS check to see if FSIS is actually following up on what AMS tells it? 

Mr. DAY. I would assume they do. 

Ms. DELAURO. Well, you are AMS. Do you follow up? 

[Electronic interference.] 

Well, if you tell them that there is a violation someplace, how do 

you follow that up? 

Mr. DAY. I am sure they follow it up, but I can have consultations with my FSIS colleagues and get back to you on their followup procedures—— 

Ms. DELAURO. Well, your follow-up procedures as well. How do 

you follow up with—you said AMS notifies FSIS when it finds a 

problem. You notify them that there is a problem. 

Mr. DAY. Right. 

Ms. DELAURO. And how do you follow up with them? 

Mr. DAY. I will have to get back to you on that. 

[The information follows:] 

PROCUREMENT CONTRACT VIOLATIONS

If an AMS employee observes conditions or products in a federally-inspected facility that pose a potential food safety hazard, the Food Safety Inspection Service 

(FSIS) Inspector-in-Charge (IIC) is immediately notified. It is important to note that 

AMS employees performing assignments on the premises of FSIS-inspected facilities 

are required by written instruction to notify the FSIS IIC of any observation of conditions that appear unsanitary or products that may be unwholesome for appropriate disposition. Since these types of situations fall under the jurisdiction and responsibility of FSIS, no follow-up is required on the part of AMS. If an FSIS employee observes non-conformances with AMS contractual or specification requirements, they notify the local AMS officials of their findings for appropriate action by 

AMS. 

AMS notifies the appropriate FSIS officials of all positive microbial test results 

for Salmonella and E. Coli 0157H:7. 

HALLMARK/WESTLAND

Ms. DELAURO. Okay. Your letter, Mr. Day, this is—I do not want 

to go through all of the efforts. I asked a series of questions. What 

actions has AMS itself taken to ensure that we do not see a recall 

the like of Hallmark/Westland ever again? 

Mr. DAY. Well, we have done a number of different things. One, 

I think the recall itself has put an incredible burden on that company, and I think it will send a shiver throughout the industry to 

not violate the rules of FSIS in terms of non-ambulatory animals. 

Ms. DELAURO. But the fact of the matter is that the Humane Society discovered this. What are you going to do with regard to your 

own agency that would allow you to be able to do this? 

Mr. DAY. We are working with FSIS on enhanced surveillance 

techniques, and we ourselves are enhancing our own audits of 


smartinez on PROD1PC70 with HEARING
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these facilities applying to our program to ensure that they are 

complying with all the requirements. 

Ms. DELAURO. Senate hearing, Secretary Schafer yesterday as 

USDA may have found major humane treatment violations at two 

or three other plants that supply beef to the school food program. 

Are you aware of this? 

Mr. DAY. I heard about that, yes. 

Ms. DELAURO. Can you have any discussion with us on this? 

Mr. DAY. We are certainly going to look into that, and look into 

all the—— 

Ms. DELAURO. Okay, could you get back to us on that? 

Mr. DAY. Certainly, yes. 

WARRANTY CLAIMS

Ms. DELAURO. You, in the near future you say you are going to 

send an initial warranty claim to Westland/Hallmark seeking reimbursement of money paid for recalled product, and that you will 

submit additional warranty claims for removal and disposal costs. 

Has the initial claim been sent yet? 

Mr. DAY. Yes, we sent that last week. 

Ms. DELAURO. How much are you seeking in the initial claim, 

and what do you estimate in total? 

Mr. DAY. $67.2 million was the initial claim, and I cannot speculate on what additional costs may be, but if there are additional 

costs, we will submit those as part of the—— 

Ms. DELAURO. Can you estimate for us and get back to us on 

what you think might be the additional costs? 

Mr. DAY. Certainly. 

[The information follows:] 

BEEF RECALL WARRANTY CLAIM

The additional costs associated with any further warranty claim against Hallmark/Westland will primarily be those submitted by States for reimbursement of 

transportation, processing and disposal costs of the recalled products. Since we have 

only received claims from four States and have no way of estimating the total expenses incurred by State and local food service authorities, any estimate at this 

time would be premature. Once the State costs are known, we can provide detailed 

cost information. 

RECALL REIMBURSEMENTS

Ms. DELAURO. Based on what—okay. You say that you anticipate 

starting making the reimbursement payments as early as this 

week. Have you started this? 

Mr. DAY. We have received information from three states, West 

Virginia, New Jersey and I cannot remember what the third state 

is, Maryland, and I believe we are in the process of processing 

them this week. 

Ms. DELAURO. How much do you estimate you will be spending 

on this? 

Mr. DAY. We estimate that the total costs will be somewhere in 

the neighborhood of $50 million. 

Ms. DELAURO. Can you get to us what you are covering and how 

are you determining how much states lost? 

Mr. DAY. The states end up—the individual districts go to a state 

distributing agent, and that person compiles everything for the 


smartinez on PROD1PC70 with HEARING
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state and sends it to us. We review that and then we submit a 

check to the state that they then pass out. 

Ms. DELAURO. So you are taking the states’ word for what they— 

Mr. DAY. We are, but we are also doing appropriate due diligence 

to ensure that—— 

Ms. DELAURO. Okay, and can you get us information on what 

that appropriate due diligence is, what are you looking for in that 

process? 

Mr. DAY. Certainly. 

[The information follows:] 

RECALL REIMBURSEMENTS TO STATES

Each claim submitted by a State Distributing Agent for reimbursement by USDA 

must first be reviewed to ensure each of the itemized expenses is authorized and 

substantiated by documentation. Reimbursement expenses are limited to the costs 

incurred for storage, processing costs if the commodity products were further processed, transportation to a disposal site and disposal fees. The actual products are 

directly replaced by USDA or the State’s entitlement account is credited for future 

use. Once USDA officials determine that the expenses incurred by the State and 

local jurisdictions are appropriate, reasonable and supported by documentation, the 

claim vouchers are approved for payment. Payments are made by electronic transfer 

of funds. 

POULTRY IMPORTS

Ms. DELAURO. And any of those questions that I have just mentioned, if there is additional information, it would be helpful to us, 

and as I say, in a timely way. This is now, you are beginning to 

move forward. There will be additional questions for the record 

with regard to avian flu, and more cases involving the smuggling 

of poultry products into the U.S. from countries. There are a lot of 

articles these days about China, about South Korea, etc., where 

they are finding—I know my colleague Mr. Kingston mentioned the 

chicken issue, but the fact of the matter, you must have somewhere, somehow, some indication in your own psyche about whether or not it makes sense for us to be importing Chinese poultry into 

the United States, and whether or not we ought to deal with the 

issue of processed chicken as well, given our lax record on inspections of China. 

MICROBIOLOGICAL DATA PROGRAM

The microbiological program, I will submit a question. I happen 

to think it is a good program. I hope we can work together to see 

how that is a program that ought to be maintained. We have one 

minute to go to vote. I thank you all very, very much for your time 

and for your efforts and your work, and I will gavel down the hearing. Thank you very much. 


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smartinez on PROD1PC70 with HEARINGInsert offset folio 769 here 48543A.535
639 


smartinez on PROD1PC70 with HEARINGInsert offset folio 770 here 48543A.536
640 


smartinez on PROD1PC70 with HEARINGInsert offset folio 771 here 48543A.537
641 


smartinez on PROD1PC70 with HEARINGInsert offset folio 772 here 48543A.538
642 


smartinez on PROD1PC70 with HEARINGInsert offset folio 773 here 48543A.539
643 


smartinez on PROD1PC70 with HEARINGInsert offset folio 774 here 48543A.540
644 


smartinez on PROD1PC70 with HEARINGInsert offset folio 775 here 48543A.541
645 


smartinez on PROD1PC70 with HEARINGInsert offset folio 776 here 48543A.542
646 


smartinez on PROD1PC70 with HEARINGInsert offset folio 777 here 48543A.543
647 


smartinez on PROD1PC70 with HEARINGInsert offset folio 778 here 48543A.544
648 


smartinez on PROD1PC70 with HEARINGInsert offset folio 779 here 48543A.545
649 


smartinez on PROD1PC70 with HEARINGInsert offset folio 780 here 48543A.546
650 


smartinez on PROD1PC70 with HEARINGInsert offset folio 781 here 48543A.547
651 


smartinez on PROD1PC70 with HEARINGInsert offset folio 782 here 48543A.548
652 


smartinez on PROD1PC70 with HEARINGInsert offset folio 783 here 48543A.549
653 


smartinez on PROD1PC70 with HEARINGInsert offset folio 784 here 48543A.550
654 


smartinez on PROD1PC70 with HEARINGInsert offset folio 785 here 48543A.551
655 


smartinez on PROD1PC70 with HEARINGInsert offset folio 786 here 48543A.552
656 


smartinez on PROD1PC70 with HEARINGInsert offset folio 787 here 48543A.553
657 


smartinez on PROD1PC70 with HEARINGInsert offset folio 788 here 48543A.554
658 


smartinez on PROD1PC70 with HEARINGInsert offset folio 789 here 48543A.555
659 


smartinez on PROD1PC70 with HEARINGInsert offset folio 790 here 48543A.556
660 


smartinez on PROD1PC70 with HEARINGInsert offset folio 791 here 48543A.557
661 


smartinez on PROD1PC70 with HEARINGInsert offset folio 792 here 48543A.558
662 


smartinez on PROD1PC70 with HEARINGInsert offset folio 793 here 48543A.559
663 


smartinez on PROD1PC70 with HEARINGInsert offset folio 794 here 48543A.560
664 


smartinez on PROD1PC70 with HEARINGInsert offset folio 795 here 48543A.561
665 


smartinez on PROD1PC70 with HEARINGInsert offset folio 796 here 48543A.562
666 


smartinez on PROD1PC70 with HEARINGInsert offset folio 797 here 48543A.563
667 


smartinez on PROD1PC70 with HEARINGInsert offset folio 798 here 48543A.564
668 


smartinez on PROD1PC70 with HEARINGInsert offset folio 799 here 48543A.565
669 


smartinez on PROD1PC70 with HEARINGInsert offset folio 800 here 48543A.566
670 


smartinez on PROD1PC70 with HEARINGInsert offset folio 801 here 48543A.567
671 


smartinez on PROD1PC70 with HEARINGInsert offset folio 802 here 48543A.568
672 


smartinez on PROD1PC70 with HEARINGInsert offset folio 803 here 48543A.569
673 


smartinez on PROD1PC70 with HEARINGInsert offset folio 804 here 48543A.570
674 


smartinez on PROD1PC70 with HEARINGInsert offset folio 805 here 48543A.571
675 


smartinez on PROD1PC70 with HEARINGInsert offset folio 806 here 48543A.572
676 


smartinez on PROD1PC70 with HEARINGInsert offset folio 807 here 48543A.573
677 


smartinez on PROD1PC70 with HEARINGInsert offset folio 808 here 48543A.574
678 


smartinez on PROD1PC70 with HEARINGInsert offset folio 809 here 48543A.575
679 


smartinez on PROD1PC70 with HEARINGInsert offset folio 810 here 48543A.576
680 


smartinez on PROD1PC70 with HEARINGInsert offset folio 811 here 48543A.577
681 


smartinez on PROD1PC70 with HEARINGInsert offset folio 812 here 48543A.578
682 


smartinez on PROD1PC70 with HEARINGInsert offset folio 813 here 48543A.579
683 


smartinez on PROD1PC70 with HEARINGInsert offset folio 814 here 48543A.580
684 


smartinez on PROD1PC70 with HEARINGInsert offset folio 815 here 48543A.581
685 


smartinez on PROD1PC70 with HEARINGInsert offset folio 816 here 48543A.582
686 


smartinez on PROD1PC70 with HEARINGInsert offset folio 817 here 48543A.583
687 


smartinez on PROD1PC70 with HEARINGInsert offset folio 818 here 48543A.584
688 


smartinez on PROD1PC70 with HEARINGInsert offset folio 819 here 48543A.585
689 


smartinez on PROD1PC70 with HEARINGInsert offset folio 820 here 48543A.586
690 


smartinez on PROD1PC70 with HEARINGInsert offset folio 821 here 48543A.587
691 


smartinez on PROD1PC70 with HEARINGInsert offset folio 822 here 48543A.588
692 


smartinez on PROD1PC70 with HEARINGInsert offset folio 823 here 48543A.589
693 


smartinez on PROD1PC70 with HEARINGInsert offset folio 824 here 48543A.590
694 


smartinez on PROD1PC70 with HEARINGInsert offset folio 825 here 48543A.591
695 


smartinez on PROD1PC70 with HEARINGInsert offset folio 826 here 48543A.592
696 


smartinez on PROD1PC70 with HEARINGInsert offset folio 827 here 48543A.593
697 


smartinez on PROD1PC70 with HEARINGInsert offset folio 828 here 48543A.594
698 


smartinez on PROD1PC70 with HEARINGInsert offset folio 829 here 48543A.595
699 


smartinez on PROD1PC70 with HEARINGInsert offset folio 830 here 48543A.596
700 


smartinez on PROD1PC70 with HEARINGInsert offset folio 831 here 48543A.597
701 


smartinez on PROD1PC70 with HEARINGInsert offset folio 832 here 48543A.598
702 


smartinez on PROD1PC70 with HEARINGInsert offset folio 833 here 48543A.599
703 


smartinez on PROD1PC70 with HEARINGInsert offset folio 834 here 48543A.600
704 


smartinez on PROD1PC70 with HEARINGInsert offset folio 835 here 48543A.601
705 


smartinez on PROD1PC70 with HEARINGInsert offset folio 836 here 48543A.602
706 


smartinez on PROD1PC70 with HEARINGInsert offset folio 837 here 48543A.603
707 


smartinez on PROD1PC70 with HEARINGInsert offset folio 838 here 48543A.604
708 


smartinez on PROD1PC70 with HEARINGInsert offset folio 839 here 48543A.605
709 


smartinez on PROD1PC70 with HEARINGInsert offset folio 840 here 48543A.606
710 


smartinez on PROD1PC70 with HEARINGInsert offset folio 841 here 48543A.607
711 


smartinez on PROD1PC70 with HEARINGInsert offset folio 842 here 48543A.608
712 


smartinez on PROD1PC70 with HEARINGInsert offset folio 843 here 48543A.609
713 


smartinez on PROD1PC70 with HEARINGInsert offset folio 844 here 48543A.610
714 


smartinez on PROD1PC70 with HEARINGInsert offset folio 845 here 48543A.611
715 


smartinez on PROD1PC70 with HEARINGInsert offset folio 846 here 48543A.612
716 


smartinez on PROD1PC70 with HEARINGInsert offset folio 847 here 48543A.613
717 


smartinez on PROD1PC70 with HEARINGInsert offset folio 848 here 48543A.614
718 


smartinez on PROD1PC70 with HEARINGInsert offset folio 849 here 48543A.615
719 


smartinez on PROD1PC70 with HEARINGInsert offset folio 850 here 48543A.616
720 


smartinez on PROD1PC70 with HEARINGInsert offset folio 851 here 48543A.617
721 


smartinez on PROD1PC70 with HEARINGInsert offset folio 852 here 48543A.618
722 


smartinez on PROD1PC70 with HEARINGInsert offset folio 853 here 48543A.619
723 


smartinez on PROD1PC70 with HEARINGInsert offset folio 854 here 48543A.620
724 


smartinez on PROD1PC70 with HEARINGInsert offset folio 855 here 48543A.621
725 


smartinez on PROD1PC70 with HEARINGInsert offset folio 856 here 48543A.622
726 


smartinez on PROD1PC70 with HEARINGInsert offset folio 857 here 48543A.623
727 


smartinez on PROD1PC70 with HEARINGInsert offset folio 858 here 48543A.624
728 


smartinez on PROD1PC70 with HEARINGInsert offset folio 859 here 48543A.625
729 


smartinez on PROD1PC70 with HEARINGInsert offset folio 860 here 48543A.626
730 


smartinez on PROD1PC70 with HEARINGInsert offset folio 861 here 48543A.627
731 


smartinez on PROD1PC70 with HEARINGInsert offset folio 862 here 48543A.628
732 


smartinez on PROD1PC70 with HEARINGInsert offset folio 863 here 48543A.629
733 


smartinez on PROD1PC70 with HEARINGInsert offset folio 864 here 48543A.630
734 


smartinez on PROD1PC70 with HEARINGInsert offset folio 865 here 48543A.631
735 


smartinez on PROD1PC70 with HEARINGInsert offset folio 866 here 48543A.632
736 


smartinez on PROD1PC70 with HEARINGInsert offset folio 867 here 48543A.633
737 


smartinez on PROD1PC70 with HEARINGInsert offset folio 868 here 48543A.634
738 


smartinez on PROD1PC70 with HEARINGInsert offset folio 869 here 48543A.635
739 


smartinez on PROD1PC70 with HEARINGInsert offset folio 870 here 48543A.636
740 


smartinez on PROD1PC70 with HEARINGInsert offset folio 871 here 48543A.637
741 


smartinez on PROD1PC70 with HEARINGInsert offset folio 872 here 48543A.638
742 


smartinez on PROD1PC70 with HEARINGInsert offset folio 873 here 48543A.639
743 


smartinez on PROD1PC70 with HEARINGInsert offset folio 874 here 48543A.640
744 


smartinez on PROD1PC70 with HEARINGInsert offset folio 875 here 48543A.641
745 


smartinez on PROD1PC70 with HEARINGInsert offset folio 876 here 48543A.642
746 


smartinez on PROD1PC70 with HEARINGInsert offset folio 877 here 48543A.643
747 


smartinez on PROD1PC70 with HEARINGInsert offset folio 878 here 48543A.644
748 


smartinez on PROD1PC70 with HEARINGInsert offset folio 879 here 48543A.645
749 


smartinez on PROD1PC70 with HEARINGInsert offset folio 880 here 48543A.646
750 


smartinez on PROD1PC70 with HEARINGInsert offset folio 881 here 48543A.647
751 


smartinez on PROD1PC70 with HEARINGInsert offset folio 882 here 48543A.648
752 


smartinez on PROD1PC70 with HEARINGInsert offset folio 883 here 48543A.649
753 


smartinez on PROD1PC70 with HEARINGInsert offset folio 884 here 48543A.650
754 


smartinez on PROD1PC70 with HEARINGInsert offset folio 885 here 48543A.651
755 


smartinez on PROD1PC70 with HEARINGInsert offset folio 886 here 48543A.652
756 


smartinez on PROD1PC70 with HEARINGInsert offset folio 887 here 48543A.653
757 


smartinez on PROD1PC70 with HEARINGInsert offset folio 888 here 48543A.654
758 


smartinez on PROD1PC70 with HEARINGInsert offset folio 889 here 48543A.655
759 


smartinez on PROD1PC70 with HEARINGInsert offset folio 890 here 48543A.656
760 


smartinez on PROD1PC70 with HEARINGInsert offset folio 891 here 48543A.657
761 


smartinez on PROD1PC70 with HEARINGInsert offset folio 892 here 48543A.658
762 


smartinez on PROD1PC70 with HEARINGInsert offset folio 893 here 48543A.659
763 


smartinez on PROD1PC70 with HEARINGInsert offset folio 894 here 48543A.660
764 


smartinez on PROD1PC70 with HEARINGInsert offset folio 895 here 48543A.661
765 


smartinez on PROD1PC70 with HEARINGInsert offset folio 896 here 48543A.662
766 


smartinez on PROD1PC70 with HEARINGInsert offset folio 897 here 48543A.663
767 


smartinez on PROD1PC70 with HEARINGInsert offset folio 898 here 48543A.664
768 


smartinez on PROD1PC70 with HEARINGInsert offset folio 899 here 48543A.665
769 


smartinez on PROD1PC70 with HEARINGInsert offset folio 900 here 48543A.666
770 


smartinez on PROD1PC70 with HEARINGInsert offset folio 901 here 48543A.667
771 


smartinez on PROD1PC70 with HEARINGInsert offset folio 902 here 48543A.668
772 


smartinez on PROD1PC70 with HEARINGInsert offset folio 903 here 48543A.669
773 


smartinez on PROD1PC70 with HEARINGInsert offset folio 904 here 48543A.670
774 


smartinez on PROD1PC70 with HEARINGInsert offset folio 905 here 48543A.671
775 


smartinez on PROD1PC70 with HEARINGInsert offset folio 906 here 48543A.672
776 


smartinez on PROD1PC70 with HEARINGInsert offset folio 907 here 48543A.673
777 


smartinez on PROD1PC70 with HEARINGInsert offset folio 908 here 48543A.674
778 


smartinez on PROD1PC70 with HEARINGInsert offset folio 909 here 48543A.675
779 


smartinez on PROD1PC70 with HEARINGInsert offset folio 910 here 48543A.676
780 


smartinez on PROD1PC70 with HEARINGInsert offset folio 911 here 48543A.677
781 


smartinez on PROD1PC70 with HEARINGInsert offset folio 912 here 48543A.678
782 


smartinez on PROD1PC70 with HEARINGInsert offset folio 913 here 48543A.679
783 


smartinez on PROD1PC70 with HEARINGInsert offset folio 914 here 48543A.680
784 


smartinez on PROD1PC70 with HEARINGInsert offset folio 915 here 48543A.681
785 


smartinez on PROD1PC70 with HEARINGInsert offset folio 916 here 48543A.682
786 


smartinez on PROD1PC70 with HEARINGInsert offset folio 917 here 48543A.683
787 


smartinez on PROD1PC70 with HEARINGInsert offset folio 918 here 48543A.684
788 


smartinez on PROD1PC70 with HEARINGInsert offset folio 919 here 48543A.685
789 


smartinez on PROD1PC70 with HEARINGInsert offset folio 920 here 48543A.686
790 


smartinez on PROD1PC70 with HEARINGInsert offset folio 921 here 48543A.687
791 


smartinez on PROD1PC70 with HEARINGInsert offset folio 922 here 48543A.688
792 


smartinez on PROD1PC70 with HEARINGInsert offset folio 923 here 48543A.689
793 


smartinez on PROD1PC70 with HEARINGInsert offset folio 924 here 48543A.690
794 


smartinez on PROD1PC70 with HEARINGInsert offset folio 925 here 48543A.691
795 


smartinez on PROD1PC70 with HEARINGInsert offset folio 926 here 48543A.692
796 


smartinez on PROD1PC70 with HEARINGInsert offset folio 927 here 48543A.693
797 


smartinez on PROD1PC70 with HEARINGInsert offset folio 928 here 48543A.694
798 


smartinez on PROD1PC70 with HEARINGInsert offset folio 929 here 48543A.695
799 


smartinez on PROD1PC70 with HEARINGInsert offset folio 930 here 48543A.696
800 


smartinez on PROD1PC70 with HEARINGInsert offset folio 931 here 48543A.697
801 


smartinez on PROD1PC70 with HEARINGInsert offset folio 932 here 48543A.698
802 


smartinez on PROD1PC70 with HEARINGInsert offset folio 933 here 48543A.699
803 


smartinez on PROD1PC70 with HEARINGInsert offset folio 934 here 48543A.700
804 


smartinez on PROD1PC70 with HEARINGInsert offset folio 935 here 48543A.701
805 


smartinez on PROD1PC70 with HEARINGInsert offset folio 936 here 48543A.702
806 


smartinez on PROD1PC70 with HEARINGInsert offset folio 937 here 48543A.703
807 


smartinez on PROD1PC70 with HEARINGInsert offset folio 938 here 48543A.704
808 


smartinez on PROD1PC70 with HEARINGInsert offset folio 939 here 48543A.705
809 


smartinez on PROD1PC70 with HEARINGInsert offset folio 940 here 48543A.706
810 


smartinez on PROD1PC70 with HEARINGInsert offset folio 941 here 48543A.707
811 


smartinez on PROD1PC70 with HEARINGInsert offset folio 942 here 48543A.708
812 


smartinez on PROD1PC70 with HEARINGInsert offset folio 943 here 48543A.709
813 


smartinez on PROD1PC70 with HEARINGInsert offset folio 944 here 48543A.710
814 


smartinez on PROD1PC70 with HEARINGInsert offset folio 945 here 48543A.711
815 


smartinez on PROD1PC70 with HEARINGInsert offset folio 946 here 48543A.712
816 


smartinez on PROD1PC70 with HEARINGInsert offset folio 947 here 48543A.713
817 


smartinez on PROD1PC70 with HEARINGInsert offset folio 948 here 48543A.714
818 


smartinez on PROD1PC70 with HEARINGInsert offset folio 949 here 48543A.715
819 


smartinez on PROD1PC70 with HEARINGInsert offset folio 950 here 48543A.716
820 


smartinez on PROD1PC70 with HEARINGInsert offset folio 951 here 48543A.717
821 


smartinez on PROD1PC70 with HEARINGInsert offset folio 952 here 48543A.718
822 


smartinez on PROD1PC70 with HEARINGInsert offset folio 953 here 48543A.719
823 


smartinez on PROD1PC70 with HEARINGInsert offset folio 954 here 48543A.720
824 


smartinez on PROD1PC70 with HEARINGInsert offset folio 955 here 48543A.721
825 


smartinez on PROD1PC70 with HEARINGInsert offset folio 956 here 48543A.722
826 


smartinez on PROD1PC70 with HEARINGInsert offset folio 957 here 48543A.723
827 


smartinez on PROD1PC70 with HEARINGInsert offset folio 958 here 48543A.724
828 


smartinez on PROD1PC70 with HEARINGInsert offset folio 959 here 48543A.725
829 


smartinez on PROD1PC70 with HEARINGInsert offset folio 960 here 48543A.726
830 


smartinez on PROD1PC70 with HEARINGInsert offset folio 961 here 48543A.727
831 


smartinez on PROD1PC70 with HEARINGInsert offset folio 962 here 48543A.728
832 


smartinez on PROD1PC70 with HEARINGInsert offset folio 963 here 48543A.729
833 


smartinez on PROD1PC70 with HEARINGInsert offset folio 964 here 48543A.730
834 


smartinez on PROD1PC70 with HEARINGInsert offset folio 965 here 48543A.731
835 


smartinez on PROD1PC70 with HEARINGInsert offset folio 966 here 48543A.732
836 


smartinez on PROD1PC70 with HEARINGInsert offset folio 967 here 48543A.733
837 


smartinez on PROD1PC70 with HEARINGInsert offset folio 968 here 48543A.734
838 


smartinez on PROD1PC70 with HEARINGInsert offset folio 969 here 48543A.735
839 


smartinez on PROD1PC70 with HEARINGInsert offset folio 970 here 48543A.736
840 


smartinez on PROD1PC70 with HEARINGInsert offset folio 971 here 48543A.737
841 


smartinez on PROD1PC70 with HEARINGInsert offset folio 972 here 48543A.738
842 


smartinez on PROD1PC70 with HEARINGInsert offset folio 973 here 48543A.739
843 


smartinez on PROD1PC70 with HEARINGInsert offset folio 974 here 48543A.740
844 


smartinez on PROD1PC70 with HEARINGInsert offset folio 975 here 48543A.741
845 


smartinez on PROD1PC70 with HEARINGInsert offset folio 976 here 48543A.742
846 


smartinez on PROD1PC70 with HEARINGInsert offset folio 977 here 48543A.743
847 


smartinez on PROD1PC70 with HEARINGInsert offset folio 978 here 48543A.744
848 


smartinez on PROD1PC70 with HEARINGInsert offset folio 979 here 48543A.745
849 


smartinez on PROD1PC70 with HEARINGInsert offset folio 980 here 48543A.746
850 


smartinez on PROD1PC70 with HEARINGInsert offset folio 981 here 48543A.747
851 


smartinez on PROD1PC70 with HEARINGInsert offset folio 982 here 48543A.748
852 


smartinez on PROD1PC70 with HEARINGInsert offset folio 983 here 48543A.749
853 


smartinez on PROD1PC70 with HEARINGInsert offset folio 984 here 48543A.750
854 


smartinez on PROD1PC70 with HEARINGInsert offset folio 985 here 48543A.751
855 


smartinez on PROD1PC70 with HEARINGInsert offset folio 986 here 48543A.752
856 


smartinez on PROD1PC70 with HEARINGInsert offset folio 987 here 48543A.753
857 


smartinez on PROD1PC70 with HEARINGInsert offset folio 988 here 48543A.754
858 


smartinez on PROD1PC70 with HEARINGInsert offset folio 989 here 48543A.755
859 


smartinez on PROD1PC70 with HEARINGInsert offset folio 990 here 48543A.756
860 


smartinez on PROD1PC70 with HEARINGInsert offset folio 991 here 48543A.757
861 


smartinez on PROD1PC70 with HEARINGInsert offset folio 992 here 48543A.758
862 


smartinez on PROD1PC70 with HEARINGInsert offset folio 993 here 48543A.759
863 


smartinez on PROD1PC70 with HEARINGInsert offset folio 994 here 48543A.760
864 


smartinez on PROD1PC70 with HEARINGInsert offset folio 995 here 48543A.761
865 


smartinez on PROD1PC70 with HEARINGInsert offset folio 996 here 48543A.762
866 


smartinez on PROD1PC70 with HEARINGInsert offset folio 997 here 48543A.763
867 


smartinez on PROD1PC70 with HEARINGInsert offset folio 998 here 48543A.764
868 


smartinez on PROD1PC70 with HEARINGInsert offset folio 999 here 48543A.765
869 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1000 here 48543A.766
870 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1001 here 48543A.767
871 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1002 here 48543A.768
872 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1003 here 48543A.769
873 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1004 here 48543A.770
874 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1005 here 48543A.771
875 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1006 here 48543A.772
876 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1007 here 48543A.773
877 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1008 here 48543A.774
878 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1009 here 48543A.775
879 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1010 here 48543A.776
880 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1011 here 48543A.777
881 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1012 here 48543A.778
882 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1013 here 48543A.779
883 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1014 here 48543A.780
884 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1015 here 48543A.781
885 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1016 here 48543A.782
886 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1017 here 48543A.783
887 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1018 here 48543A.784
888 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1019 here 48543A.785
889 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1020 here 48543A.786
890 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1021 here 48543A.787
891 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1022 here 48543A.788
892 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1023 here 48543A.789
893 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1024 here 48543A.790
894 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1025 here 48543A.791
895 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1026 here 48543A.792
896 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1027 here 48543A.793
897 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1028 here 48543A.794
898 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1029 here 48543A.795
899 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1030 here 48543A.796
900 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1031 here 48543A.797
901 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1032 here 48543A.798
902 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1033 here 48543A.799
903 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1034 here 48543A.800
904 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1035 here 48543A.801
905 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1036 here 48543A.802
906 


smartinez on PROD1PC70 with HEARINGInsert offset folio 1037 here 48543A.803
907 


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909 


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925 


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930 


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967 


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(i) 

W I T N E S S E S 

Page 

Day, L. C .................................................................................................................. 307

Dondero, John .......................................................................................................... 1 

Knight, B. I .............................................................................................................. 307 

Lancaster, Arlen ...................................................................................................... 1 

Link, J. E .................................................................................................................. 307 

Rey, Mark ................................................................................................................. 1 

Smith, C. J ............................................................................................................... 307 

Steele, W. S............................................................................................................... 1, 307 


SMARTINEZ on PROD1PC64 with HEARING

SMARTINEZ on PROD1PC64 with HEARING
(iii) 

I N D E X 

Page 

Natural Resources Conservation Service 

Accountability Measures.......................................................................................... 9, 118 

Administrative Costs ........................................................................................... 278, 280 

Administrative Operations ...................................................................................... 279 

Agricultural Land, Collaboration to Preserve ....................................................... 76 

Agricultural Management Assistance Program .................................................... 34 

Agricultural Operator Demographics ..................................................................... 89 

Agricultural Production and Sprawl ...................................................................... 40 

Allocation Formulas ................................................................................................. 291 

American Customer Satisfaction Index (ACSI) Results ....................................... 10 

Animal Feeding Operations .................................................................................... 149 

Assistance to Mega-Farms ...................................................................................... 53 

Big Picture Approach .............................................................................................. 62 

Budget Amendment ................................................................................................. 51 

Budget Reductions ................................................................................................... 36 

Budget Request, President’s FY 2009 .................................................................... 6 

CCC Funded Programs ........................................................................................... 261 

Centers and Institutes ............................................................................................. 91 

Certification of Forest Products .............................................................................. 38 

Colleges and Universities ........................................................................................ 105 

Conservation Commitment ..................................................................................... 50 

Conservation Compliance Activities ....................................................................... 128 

Conservation District Program Activities .............................................................. 94 

Conservation Effects Assessment Project........................................................... 237, 260 

Cost of ................................................................................................................ 82 

Funding.......................................................................................................... 239, 244 

Small Watershed Studies ................................................................................. 240 

Value of ............................................................................................................. 84 

Conservation Innovation Grants ............................................................................ 206 

Conservation Operations....................................................................... 22, 127, 149, 155 

Conservation Plans .................................................................................................. 133 

Conservation Programs ........................................................................................... 95 

Conservation Reserve Program........................................................................... 212, 279 

Conservation Security Program (CSP)........................................... 32, 43, 262, 275, 303 

Cost Effectiveness ............................................................................................. 73 

Environmental Benefits ................................................................................... 74 

Conservation Spending ............................................................................................ 49 

Conservation Technical Assistance..................................................................... 264, 304 

Conservation Technology ........................................................................................ 71 

Conservation, Benefits of ........................................................................................ 43 

Cooperation with FSA ............................................................................................. 78 

Cooperative Soil Surveys, Funding and Staffing of .............................................. 148 

Cost Effective Programs .......................................................................................... 236 


SMARTINEZ on PROD1PC64 with HEARING
Page

iv 

Cost of Moving Employees and Reassigning Them .............................................. 109 

CRP Reimbursements ............................................................................................. 280 

Dam Rehabilitation ................................................................................................. 265 

Deobligated Funds, Use of ...................................................................................... 68 

Duplicate Payments ................................................................................................. 276 

E. Coli Breakout, Managing the ............................................................................. 40 

Emerald Ash Borer .................................................................................................. 57 

Emergency Watershed Program ......................................................................... 166, 173 

Environmental Quality Incentives Program ......................................................... 28 

EQIP Allocation.................................................................................................... 202, 274 

EQIP Financial Assistance to Livestock ................................................................ 207 

Equal Employment Opportunity ............................................................................ 280 

Farm and Ranch Lands Protection Program ....................................................... 34, 263 

Farm Bill .................................................................................................................. 8 

Administration Proposals ................................................................................ 8 

Apportionment .................................................................................................. 223 

Authorized Programs ....................................................................................... 28 

Benefits .............................................................................................................. 294 

Conservation Programs .................................................................................... 259 

Program Allocations ......................................................................................... 212 

Unobligated Balance ........................................................................................ 234 

Farm Program Payments ........................................................................................ 303 

Field Offices ............................................................................................................. 111 

Financial Management ............................................................................................ 64 

Floodplain Easements Program .......................................................................... 162, 170 

Food Safety ............................................................................................................... 41 

Foreign Assignments ............................................................................................... 102 

Forest Production Certification, Future ................................................................. 39 

GIS Activities ........................................................................................................... 136 

Grassland Reserve Program ................................................................................... 31 

Grazing Lands .......................................................................................................... 156–158 

Healthy Forests Reserve Program ......................................................................... 27 

Heritage Rivers ........................................................................................................ 155 

High Commodity Prices ........................................................................................... 293 

Indirect Cost Charged per NRCS Program ........................................................... 186 

Information Technology ........................................................................................... 110 

Invasive Species ....................................................................................................... 229 

Livestock Production ............................................................................................... 210 

Local Offices ............................................................................................................. 293 

Motor Vehicles ......................................................................................................... 245 

National Grazing Land Technology Institute ........................................................ 158 

National Headquarters Funding ............................................................................ 154 

National Soil Information System .......................................................................... 136 

Natural Resources Inventory .................................................................................. 270 

New Plants Releases ............................................................................................... 139 

Nutrient Management and Water Quality Concerns ........................................... 151 

Object Class Tables ................................................................................................. 103 

Obligations by State ................................................................................................ 86 

Office Closure ....................................................................................................... 111, 294 

Office Consolidations ............................................................................................... 295 

Open Obligations ..................................................................................................... 231 

Opening Statement, Mark Rey, Under Secretary, Natural Resources and Environment .............................................................................................................. 2 

Opening Statement, Mr. Arlen Lancaster, Chief, Natural Resources Conservation Service ........................................................................................................... 12 


SMARTINEZ on PROD1PC64 with HEARING
Page

v 

Organizational Chart............................................................................................. 52, 119 

PART Assessment .................................................................................................. 75, 301 

Personnel Action ...................................................................................................... 109 

PL–534 Projects, Status of ...................................................................................... 162 

Plant Materials Centers .......................................................................................... 139 

Annual Operating Costs ................................................................................... 138 

Facility Construction ........................................................................................ 139 

Index .................................................................................................................. 145 

Royalty Collections ........................................................................................... 146 

Program Evaluation Studies and Reviews ............................................................ 97 

Program Payments .................................................................................................. 42 

ProTracts System ..................................................................................................... 230 

Questions Submitted by Chairwoman DeLaur ..................................................... 91 

Questions Submitted by Congressman Bishop ...................................................... 274 

Questions Submitted by Congressman Kingston .................................................. 259 

Questions Submitted by Congressman Latham .................................................... 303 

Questions Submitted by Congresswoman Kaptur ................................................ 290 

Rapid Watershed Assessment Concept .................................................................. 272 

Regional Projects ..................................................................................................... 198 

Regional Water Enhancement Program ................................................................ 272 

Regional Watershed Enhancement Initiative ........................................................ 72 

Regulatory Burden .................................................................................................. 61 

Residential Encroachment in Rural Areas ............................................................ 77 

Resource Conservation and Development Program.............. 26, 59, 175, 269, 296, 304 

Allocations ......................................................................................................... 187 

Coordinators .................................................................................................. 181, 300 

Councils ............................................................................................................. 190 

Performance ...................................................................................................... 301 

Reporting System ............................................................................................. 181 

Support, Federal Role in .................................................................................. 85 

Resource-Based Allocation Process ........................................................................ 99 

Salinas Valley Agriculture ...................................................................................... 76 

Schedule C Appointees ............................................................................................ 119 

Senior Executive Service Training ......................................................................... 121 

Small and Beginning Farmers ................................................................................ 44 

Small Farmer Initiative .......................................................................................... 207 

Soil Survey Reimbursements .................................................................................. 137 

Soil Surveys .......................................................................................................... 135, 151 

Staff Years ................................................................................................................ 102, 151 

Staffing ..................................................................................................................... 263 

Stand-Alone Audit ................................................................................................... 236 

Status of Outsourcing .............................................................................................. 117 

Strategic Plan......................................................................................................... 47, 275 

Streamlining and Cost-Savings Initiative ............................................................. 119 

Technical Assistance, Definition of ........................................................................ 129 

Technical Assistance ................................................................................................ 51 

Technical Service Providers ................................................................................ 228, 264 

Technology Support Centers ................................................................................... 226 

Training .................................................................................................................... 227 

Unfunded Applications ............................................................................................ 66 

Urban Wildlife ......................................................................................................... 58 

Water Quality Incentives ........................................................................................ 147 

Water Quality Trading Cooperative Program ....................................................... 271 

Watershed and Flood Prevention Operations ..................... 24, 163, 170, 171, 269, 292 

Watershed and Rehabilitation Construction Projects ........................................... 168 


SMARTINEZ on PROD1PC64 with HEARING
Page

vi 

Watershed Approach ............................................................................................... 60 

Watershed Development ......................................................................................... 291 

Watershed Evaluations ........................................................................................... 305 

Watershed Management ......................................................................................... 88 

Watershed Programs.............................................................................................. 69, 161 

Watershed Projects, Authorized ............................................................................. 169 

Watershed Projects, Backlog ................................................................................... 170 

Watershed Rehabilitation Program ...................................................................... 26, 174 

Watershed Surveys and Planning......................................................................... 25, 171 

Western Lake Erie ............................................................................................... 292, 295 

Wetlands Reserve Program ................................................................................... 30, 121 

Wildlife Habitat Incentives Program ..................................................................... 33 

Written Statement, Mark Rey, Under Secretary, Natural Resources and Environment ................................................................................................................. 5 

Written Statement, Mr. Arlen Lancaster, Chief, Natural Resources Conservation Service ........................................................................................................... 14 

WRP Easement Enrollment .................................................................................... 126 

Marketing and Regulatory Programs 

Administrative Expenses ........................................................................................ 469 

Aflatoxin Inspections ............................................................................................... 1031 

Agricultural Inspections .......................................................................................... 456 

Agricultural Marketing Service .......................................................... 322, 326, 359, 367 

Agricultural Quarantine Inspections.................................................................. 638, 685 

Ames Master Plan ................................................................................................... 581 

Ames National Veterinary Services Laboratory (NVSL) ...................................... 1003 

Animal and Plant Health Inspection Service............................ 315, 318, 334, 350, 637 

Animal and Plant Health Regulatory Enforcement Violation Cases .................. 619 

Animal Care Inspection Activities .......................................................................... 623 

Animal Damage Control Research Spending ........................................................ 581 

Animal Identification................................................................................. 455, 585, 1009 

Animal Import Centers ........................................................................................... 584 

Animal Welfare Act............................................................................................ 435, 1009 

Animal Welfare ............................................................................................ 619, 620, 636 

Animal-Related Biotechnology Activities ............................................................... 619 

Anti-Competitive Barrier, GIPSA ........................................................................... 1044 

APHIS Aquaculture FY 2009 Budget Request ...................................................... 1005 

Aquaculture, WI ....................................................................................................... 1005 

Asian Longhorned Beetle .................................................................................... 686, 771 

Auction Market Failures ......................................................................................... 1035 

Audit of the Four Largest Beef Meatpackers ........................................................ 1050 

Audit Verification Services ..................................................................................... 364 

Avian Influenza .................................................................................................. 687, 1019 

Aviation Safety ......................................................................................................... 690 

Biotech Crops ........................................................................................................... 1020 

Biotechnology Regulatory Services (BRS) .............................................................. 690 

Blacklisting Invasive Pests ..................................................................................... 806 

Boll Weevil ............................................................................................................... 995 

Bovine Spongiform Encephalopathy (BSE) ........................................................... 692 

Bovine Tuberculosis ................................................................................................. 694 

Brown Tree Snake ................................................................................................... 696 

Brucellosis ................................................................................................................ 696

Canadian Imports .................................................................................................... 699 

Carcass Merit Purchasing Technologies ................................................................ 1046 

Carryover .................................................................................................................. 701

Cartagena ................................................................................................................. 1047


SMARTINEZ on PROD1PC64 with HEARING
Page

vii 

Cattle Tick Eradication ........................................................................................... 701 

Chronic Wasting Disease................................................................................... 702, 1007 

Citrus Canker .......................................................................................................... 705 

Citrus Greening Summit ......................................................................................... 402 

Classical Swine Fever ............................................................................................. 707 

Codex ........................................................................................................................ 1040 

Commodity Credit Corporation .............................................................................. 713 

Commodity Purchase—Farmer Cooperatives ........................................................ 473 

Commodity Purchasing Management System ....................................................... 365 

Common Computing Environment ......................................................................... 767 

Companies Subject to the Packers and Stockyards Act ....................................... 1036 

Compliance Audits ................................................................................................... 1037 

Continuing Resolution ............................................................................................. 404 

Coordination with Homeland Security ................................................................... 405 

Cotton Pests.......................................................................................................... 708, 995 

Country of Origin Labeling................................................. 365, 372, 431, 433, 471, 578 

Fees .................................................................................................................... 406 

Timelines ........................................................................................................... 464 

Dealer Failures ........................................................................................................ 1039 

Dealer/Order Buyer Financial Failures ................................................................. 1033 

Department of Homeland Security ......................................................................... 712 

Digital Technology ................................................................................................... 1048 

Duty Officer in Asia ................................................................................................. 1048 

Economic and Statistical Analysis ......................................................................... 1039 

Emerald Ash Borer .................................................................................................. 772 

Emergency Authority .............................................................................................. 713 

Emergency Funding, Responses to Foreign Pest Infestations ............................. 968 

Emergency Management Systems (EMS) .............................................................. 723 

Emergency Preparedness ........................................................................................ 1020 

Exotic Newcastle Disease ........................................................................................ 724 

Export and Import Applications ............................................................................. 727 

Export Verification .................................................................................................. 472 

Exported Grain Complaints .................................................................................... 1030 

Farmers Market Promotion Program......................................................... 371, 473, 576 

Federal and Non-Federal Funds ............................................................................ 728 

Federal ID Card ....................................................................................................... 733 

Federal Seed ............................................................................................................. 374 

Federal-State Cooperation ...................................................................................... 366 

Fees ........................................................................................................................... 996 

Fire Ant .................................................................................................................... 733 

Food and Agriculture Defense Initiative (FADI) ................................................... 733 

Food Program Purchases and Animal ID .............................................................. 454 

Food Safety ............................................................................................................... 480 

Food-and-Mouth Disease (FMD) ............................................................................. 735 

Foreign Animal Diseases ........................................................................................ 736 

Foreign Pest Infestations, Emergency Funding for Responses to ....................... 968 

Four Firm Concentration Ratio .............................................................................. 1034 

Fruit Fly Exclusion .................................................................................................. 740 

FSIS and AMS Communication .............................................................................. 464 

FSMIP Proposal Selection Criteria ........................................................................ 513 

Funding Sources ...................................................................................................... 314 

Grading ..................................................................................................................... 483 

Grain Dust Explosions ............................................................................................ 1029 

Grain Facilities ........................................................................................................ 1023 

Grain Inspection, Packers and Stockyards Administration ................... 329, 332, 1043 


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Hallmark/Westland .................................................................................................. 465 

Homeland Security MOA ........................................................................................ 640 

Indemnity Funds ..................................................................................................... 742 

Information Systems Acquisitions .......................................................................... 743 

Information Technology............................................................................. 486, 488, 1043 

International Activities ........................................................................................... 744 

International Monitoring Program ......................................................................... 1041 

International Trade ..................................................................................... 407, 450, 489 

International Wheat Market ................................................................................... 1038 

Invasive Pests, Blacklisting .................................................................................... 806 

Johne’s Disease ........................................................................................................ 748 

Laboratory Networks ............................................................................................... 749 

Light Brown Apple Moth ............................................ 409, 433, 447, 808, 976, 980–994 

Live Weight Livestock Purchases ........................................................................... 1045 

Livestock Complaints .............................................................................................. 1022 

Livestock from Captive Supplies and/or Forward Contracts ............................... 1036 

Livestock Industry Integration and Consolidation ............................................... 1053 

Livestock Mandatory Price Reporting .................................................................... 489 

Local Agriculture ..................................................................................................... 459 

Market News ................................................................................................ 360, 368, 490 

Measures of Carcass Quality .................................................................................. 1046 

Microbiological Data Program..................................................................... 375, 467, 492 

National Animal Health Monitoring System (NAHMS) ....................................... 757 

National Animal Identification System ..................................... 393, 411, 431, 437, 444 

Spending Plan ................................................................................................... 396 

Voluntary vs. Mandatory ................................................................................. 396 

National Organic Program .................................................................................. 362, 369 

National Zoo Investigations .................................................................................... 764 

Noxious Weeds ......................................................................................................... 766 

Nutrition Program Purchases ................................................................................. 453 

OCIO & CCE Payments .......................................................................................... 487 

Office of the Chief Information Officer .................................................................. 767 

OIG Audit Report .................................................................................................... 1049 

Opening Statement, Chairwoman DeLauro .......................................................... 307 

Organic Program ...................................................................................................... 498 

Packers and Stockyards Act, Companies Subject to the ...................................... 1036 

Payments to States and Possessions ...................................................................... 511 

PCIMS ...................................................................................................................... 487

Perishable Agricultural Commodity Act Program ................................................ 509 

Pest and Disease Outbreaks ................................................................................... 767 

Pest Detection .......................................................................................................... 770 

Pest Exclusion ...................................................................................................... 857–967 

Pesticide Data Program..................................................................... 373, 516–528, 1040 

Phytosanitary Certificate Fees............................................................................ 457, 975 

Pierce’s Disease ........................................................................................................ 770 

Pigweed ..................................................................................................................... 995 

Pink Bollworm ......................................................................................................... 995 

Plant Variety Protection ......................................................................................... 528 

Post Entry Plant Quarantine Facility .................................................................... 774 

Potato Cyst Nematode ............................................................................................. 775 

Poultry Complaints .................................................................................................. 1032 

Poultry Imports ........................................................................................................ 467 

Proposed User Fees.............................................................................................. 400, 405 

Pseudorabies ............................................................................................................ 775 

Purchasing Standards ............................................................................................. 453 


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Qualified Through Verification (QTV) Program .................................................... 477 

Quarantine Export Facility ..................................................................................... 401 

Questions Submitted by Chairwoman DeLauro...................................... 468, 581, 1022 

Questions Submitted by Congressman Bishop ...................................................... 995 

Questions Submitted by Congressman Farr ......................................................... 806 

Questions Submitted by Congressman Jackson .................................................... 576 

Questions Submitted by Congressman Kingston .................................. 578, 1009, 1053 

Questions Submitted by Congressman Obey ......................................................... 997 

Rabies Program ........................................................................................................ 777 

Rapid Response, GIPSA .......................................................................................... 1044 

Recall Reimbursements ........................................................................................... 466 

Referenda ................................................................................................................. 529 

Regulatory Enforcement Staff Years ...................................................................... 622 

Remaining Funds ..................................................................................................... 1004 

Removal of Surplus Commodities ........................................................................... 535 

Research and Promotion Programs ........................................................................ 530 

Research Cooperative Agreements ......................................................................... 532 

Sanitary/Phytosanitary Trade Barriers............................................................ 780, 1018 

School Lunch Purchases .......................................................................................... 400 

Scrapie ...................................................................................................................... 781 

Screwworm ............................................................................................................... 783 

Section 32.............................................................................................................. 533–546

Select Agents ............................................................................................................ 784 

Service Expenses, Other .......................................................................................... 1049 

Specialty Crop Support ........................................................................................... 363 

Spending on Competition, Fair Trade Practices, and Financial Protection ........ 1038 

Standardization Program ........................................................................................ 547 

State Department Reimbursements ....................................................................... 785 

Sudden Oak Death .................................................................................................. 1017 

Threatened and Endangered Species Spending .................................................... 786 

Tobacco Program ...................................................................................................... 549 

Trade Issues Resolution and Management ............................................................ 787 

Trade with Japan .................................................................................................... 450 

Transfer of Funds, GIPSA ...................................................................................... 1044 

Transportation Regulatory Actions ........................................................................ 550 

Trap Testing Spending ............................................................................................ 788 

Travel ........................................................................................................................ 789 

Tropical Bont Tick ................................................................................................... 792 

Trust Fund Agreements .......................................................................................... 794 

Unannounced AWA Inspections ............................................................................. 624 

Urban Wild Animals ................................................................................................ 451 

User Fees.................................................................................. 636, 685, 795, 1047, 1054 

Veterinary Biologics ................................................................................................ 796 

Violation Cases ........................................................................................................ 1040 

Violation Report Calls ............................................................................................. 1031 

Viral Hemorrhagic Septicemia.................................................................. 439, 997–1002 

Voluntary Compliance with Packers and Stockyards ........................................... 404 

Warranty Claims ..................................................................................................... 466 

Web-Based Supply Chain Management System ....................................... 371, 486, 488 

West Nile Virus ........................................................................................................ 797 

Wholesale Market Development ............................................................................. 551 

Wildlife Predation Pilot Project Spending ............................................................. 798 

Wildlife Services ...................................................................................................... 799 

Wind Turbines ......................................................................................................... 437 

Wolf Control ............................................................................................................. 804 


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Written Statement, Bruce Knight, Under Secretary, Marketing and Regulatory Programs .................................................................................................... 312 

Written Statement, Cindy J. Smith, Administrator, Animal and Plant Health 

Inspection Service ................................................................................................ 334 

Written Statement, James E. Link, Administrator, GIPSA ................................ 376 

Written Statement, Lloyd Day, Administrator, Agricultural Marketing Service .......................................................................................................................... 359 

Æ 


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