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[Senate Hearing 114-696]
[From the U.S. Government Publishing Office]

 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
          RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2017

                              ----------                              

                        WEDNESDAY, MARCH 9, 2016

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 2:05 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Jerry Moran (chairman) presiding.
    Present: Senators Moran, Blunt, Cochran, Hoeven, Daines, 
Merkley, Tester, Udall, and Baldwin.

                       DEPARTMENT OF AGRICULTURE

STATEMENT OF HON. THOMAS VILSACK, SECRETARY
ACCOMPANIED BY:
        DR. ROBERT JOHANSSON, CHIEF ECONOMIST
        MICHAEL YOUNG, BUDGET OFFICER

                OPENING STATEMENT OF SENATOR JERRY MORAN

    Senator Moran. I call this Committee hearing together, and 
we appreciate the Secretary joining us once again.
    As you would expect, the purpose of our hearing is to 
examine the Administration's fiscal year 2017 budget request.
    In addition to Secretary Vilsack, we welcome Dr. Johansson. 
Thank you very much for joining us last week in a discussion 
about agricultural economics.
    Mr. Young, thank you very much for your presence today.
    Agriculture supports 16 million jobs nationwide. It is 
certainly the backbone of my State, my community and States and 
communities across the country. We also know, unfortunately, as 
Dr. Johansson indicated to us last week, farmers are facing a 
dramatic reduction in commodity prices and falling revenues. We 
know the facts indicate that from 2013 through 2015, net farm 
income fell 54 percent.
    In these times, it is critical that our Nation's safety net 
for farmers and ranchers perform well and allow them to 
continue to grow and raise the safest, most affordable and 
abundant food supply in the world.
    As I indicated in our conversation with the agriculture 
(ag) economists, in the absence of doing that, they will not be 
around in good times. Therefore, I would express my 
disappointment that, once again, the President's budget 
proposes significant cuts to crop insurance, even though we had 
a grassroots effort that successfully reversed a reduction. 
That reduction pales in comparison to what this year's proposal 
in the budget requests.
    As this Subcommittee works to craft this year's 
appropriations bill, my priorities will be to focus on 
supporting agricultural producers and the rural communities in 
which they live, and keeping a strong safety net will be at the 
forefront of that effort.
    I look forward to discussing these issues and others at 
today's hearing. When Senator Merkley arrives, we will give him 
the opportunity to make any statements that he would like to 
make, then we will turn to Secretary Vilsack.
    [The statement follows:]
               Prepared Statement of Senator Jerry Moran
    This hearing will come to order. Good afternoon. The purpose of 
today's hearing is to discuss the Department of Agriculture's fiscal 
year 2017 budget request.
    Secretary Vilsack, Dr. Johansson, and Mr. Young--thank you for 
being here today.
    Agriculture supports more than 16 million jobs nationwide and forms 
the backbone of our rural communities. However, as you well know, our 
nation's farmers and ranchers have faced a drastic downturn in 
commodity prices and falling revenues. From 2013 to 2015, net farm 
income fell by a staggering 54 percent.
    In times like these, it is critical that our nation's safety net 
for farmers and ranchers performs well and allows them to continue to 
grow and raise the safest, most affordable, and abundant food supply in 
the world.
    I'm disappointed that once again the president's budget proposes 
massive cuts to the crop insurance program--even after the grassroots 
effort by so many last fall successfully reversed a reduction that 
pales in comparison to the proposals in this year's budget request.
    As the subcommittee works to craft this year's appropriations bill, 
my priorities will focus toward supporting agriculture producers and 
rural communities. Keeping a strong safety net intact will be one of 
those priorities.
    I look forward to discussing these issues and others at today's 
hearing. I would now like to turn to our Ranking Member, Senator 
Merkley, for his opening statement.
    Senator Moran. Secretary Vilsack, we are going to begin 
with your testimony. Thank you very much. Welcome.

                SUMMARY STATEMENT OF HON. THOMAS VILSACK

    Secretary Vilsack. Mr. Chairman, thank you very much. To 
Senator Merkley and other members of the committee, thank you 
for the opportunity to be here today.
    I thought I would take this opportunity to point out that 
budgets are oftentimes a lot about numbers. But behind each of 
these numbers, there are individuals and people that we care 
deeply about. So I thought I would take a little bit of my time 
today to discuss the people who will be benefited from the 
agricultural budget.
    The budget we submitted to the Senate and to the House will 
support 43,000 farm loans. We already, over the last 7 years, 
provided 239,000 farmers with the credit that they need to be 
able to operate and own their farm operation, 80 percent of 
those resources going to those beginning in the farming 
business and socially disadvantaged producers.
    This budget will continue to support our export assistance 
efforts. Every dollar we invest in export assistance generates 
$35 of activity. We are excited about the possibility during 
the last 7 years of reaching nearly $1 trillion of ag exports, 
which is a record, a 45-percent increase over the previous 7-
year period. This budget does provide adequate coverage for the 
$92 billion crop that will be grown and raised this year 
through crop insurance and provides what we estimate to be an 
18-percent return on investment for the company's crop 
insurance.
    It will provide enough resources to add 44 million acres to 
an already record number of enrolled acres in our conservation 
program. We are particularly pleased with the reaction and 
response to the Regional Conservation Partnership Program 
(RCPP), which is now leveraging nearly $2 for every $1 that we 
are investing in conservation.
    In addition to providing opportunities for credit, we also 
will, as the Chairman indicated, continue to administer the 
farm bill safety net programs. Last year, we provided 900,000 
farms agriculture risk coverage (ARC) or price loss coverage 
(PLC) payments, totaling $5.2 billion. Our expectation is that 
that amount will increase this year to provide the necessary 
bridge to better times.
    At the same time, we are also going to make sure that we 
create more innovation and opportunity in rural America. The 
budget we propose will support 55,000 new jobs added to the 
450,000 jobs that we have saved or created as a result of 
investments in over 100,000 businesses in the last 7 years 
through rural development.
    This budget will finance 167,000 home loans, which will 
allow us to exceed 1 million home loans in the last 7 years.
    We finance nearly 1,000 community facilities, provide safer 
and better water for 1.7 million rural Americans, which will 
reach nearly 20 million rural Americans who have benefited from 
over 5,000 water and wastewater projects that have been 
financed by the U.S. Department of Agriculture (USDA) since I 
have been Secretary.
    Our budget proposes a threefold increase in broadband 
grants. There are a multitude of reasons for business, for 
farmers as well as potential expansion of distance-learning and 
telemedicine, which will become critically important in rural 
America if we are to make sure that our youngsters are well-
prepared for a very competitive future, and if we are able to 
deal with the opioid issue, which I know is an issue that many 
of you are very, very concerned about, as I am.
    This budget will also fully fund our research initiative, 
our competitive research initiative, meeting the goal that was 
set when the National Institute of Food and Agriculture (NIFA) 
was first established of $700 million of assistance for 
research. There has never been a more important time in 
agriculture for additional research, whether it is pollinators, 
antimicrobial resistance, pests and diseases that we are 
dealing with as a result of a changing climate.
    We have already netted 429 patents, 953 inventions, and 714 
new plant varieties just in the time that I have been 
Secretary, through our research initiative.
    We will also continue to support and provide additional 
resources for the important role of the Agricultural Research 
Service (ARS) within USDA.
    On the nutrition side, this budget will support 8.1 million 
WIC (Women, Infants and Children Program) participants with 
continued expanded access to our school lunch and school 
breakfast program. I am particularly interested and hopeful 
that we are able to see an expansion of our summer program. The 
President has proposed an approach that will allow 1 million 
youngsters the opportunity to access food during the summer 
months.
    This also will provide an opportunity for us to focus on 
senior citizens and their access to the Supplemental Nutrition 
Assistance Program (SNAP). Only 41 percent of eligible senior 
citizens are currently receiving the benefits of SNAP. We would 
like to see the percentage increase.
    This is a budget, Mr. Chairman, that also will allow for an 
expansion of local and regional food systems in the bio-based 
economy.
    I would say that even though this is not the purview of 
this particular Subcommittee, I would hope that this is the 
year that we finally fix the fire budget, because that has 
implications and impacts on every other aspect of USDA's 
budget.
    Candidly, I am at the point now where folks have raised 
concerns about trails and a variety of other facets of the 
Forest Service that we are not going to do what we have done in 
the past, which is transfer money for fire suppression. 
Hopefully, this is the year that Congress get serious about 
fire suppression.
    This is also a budget, I might add, that is $1.8 billion 
less than the budget that was submitted in the first full year 
of this Administration. So we have been dealing with 
constrained budgets, but we have done this through the 
administrative services process, which has saved $1.4 billion, 
and through a process improvement program, which has saved over 
300,000 hours of time and which also saved $65 million to 
constituents and customers that we serve, all in an effort to 
try to continue to do better and more with less.
    I look forward to questions from the Subcommittee, and I 
appreciate the opportunity to be here.
    [The statement follows:]
              Prepared Statement of Hon. Thomas J. Vilsack
    Mr. Chairman and distinguished members of this Subcommittee, I 
appreciate the opportunity to appear before you to discuss the 
Administration's priorities for the Department of Agriculture (USDA) 
and provide you an overview of the President's 2017 budget proposals 
for the Department. Joining me today are Robert Johansson, USDA's Chief 
Economist, and Michael Young, USDA's Budget Officer.
    For more than 7 years, I have had the honor and privilege of 
serving as Secretary of Agriculture. I have traveled to all 50 states 
and heard from farmers, ranchers and Americans far and wide, from all 
walks of life about the impact that USDA's staff, programs and services 
have on their lives. I could not be more proud of the work the men and 
women of USDA do each and every day.
    Seven years ago I first appeared before this Subcommittee to 
present this Administration's first budget request for USDA. I made a 
commitment to make sure that USDA's programs provide a high level of 
service to advance rural economic opportunity, improve family farm 
profitability, ensure the safety of our food, expand export 
opportunities, strengthen local food systems, protect our natural 
resources, address civil rights and combat hunger and malnutrition.
    Seven years later, I can say that the men and women of USDA have 
made significant advancement in achieving our goals and they have done 
it with essentially the same discretionary funding level in fiscal year 
(FY) 2015 as in fiscal year 2009, and with 9,354 fewer total staff 
years in 2015 than in 2009. Critical to our success was the Blueprint 
for Stronger Service that allowed us to reduce spending, streamline 
operations and cut costs. Through the Blueprint for Stronger Services 
we completed a thorough review of the Department's administrative 
functions so that we could build a more efficient and effective 
workplace. Our savings and cost avoidance results for the American 
taxpayer have totaled over $1.4 billion since 2010. Through these 
results and the institutional changes resulting from the Department's 
focus on process improvement, shared services, and strategic sourcing, 
the impacts of the Blueprint will continue to grow into the future.
    Before getting to our fiscal year 2017 budget request, I want to 
highlight some of the great work that we have done to expand 
opportunities in rural America since fiscal year 2009. In fiscal year 
2015, American agricultural producers achieved $139.7 billion in 
exports, the third highest year on record. Agricultural exports climbed 
more than 45 percent in value, totaling over $911 billion, between 2009 
and 2015, the best seven year stretch in history. In addition, 
agricultural exports have increased in volume, demonstrating an 
increasing global appetite for American-grown products. Between 2009 
and 2015, U.S. companies participating in USDA-endorsed trade shows 
reported total on-site sales of more than $1.7 billion and more than 
$8.7 billion in 12-month projected sales. An independent study found 
that U.S. agricultural exports increase $35 for every market 
development dollar expended by government and industry.
    USDA has worked to open new markets worldwide for farm and ranch 
products. Trade agreements, like those with Panama, Colombia and South 
Korea, create opportunities for trade growth. U.S. agricultural exports 
to these three countries grew by nearly 28 percent, from $7.6 billion 
in fiscal year 2012, when the trade agreements were first going into 
effect, to $9.7 billion in fiscal year 2015, supporting approximately 
73,000 American jobs in 2015. USDA assisted with the recently concluded 
negotiations on the Trans-Pacific Partnership (TPP). When implemented, 
the TPP agreement, with 11 Pacific Rim countries representing nearly 40 
percent of global GDP, will provide new market access for America's 
farmers and ranchers by lowering tariffs and eliminating other 
barriers. Rural America needs the good deal laid out in the TPP 
agreement. We are committed to working closely with Congress to obtain 
support for this historic deal so that our businesses can sell more 
rural-grown and rural-made goods around the world, and we can help more 
American workers compete and win. Rural exports support farm income, 
which translates into more economic activity in rural areas. It is 
estimated that for each dollar of agricultural exports another $1.27 in 
business activity is stimulated.
    Access to credit is critical to the sustainability of small and 
beginning farmers. To make agriculture a reality for new and beginning 
farmers and ranchers, we have provided about 237,000 direct and 
guaranteed farm ownership and operating loans totaling $33.3 billion, 
80 percent of which have been made to beginning farmers and ranchers 
and socially disadvantaged producers.
    New and beginning farmers and ranchers are a fundamental part of 
the agricultural marketplace and are needed to carry-on America's 
strong legacy of agriculture productivity. However, according to the 
2012 Census of Agriculture, their numbers are continuing a 30 year 
downward trend. To reverse this trend, we need to equip the next 
generation of farmers and ranchers with the tools they need to succeed. 
Under the leadership of Deputy Secretary Krysta Harden, USDA has 
increased access to our programs by collaborating with partners and 
improving customer service to increase opportunities for all sizes, 
segments, and types of farmers and ranchers to break down the barriers 
they face during the first 10 years of business. For example, USDA 
initiated a microloan program that has provided more than 16,800 low-
interest operating loans, totaling over $373 million to producers 
across the country, and has recently expanded this to include farm 
ownership loans. We have also developed an innovative web tool and 
conducted other outreach activities, to help support key groups like 
veterans, women, and the socially disadvantaged, as well as facilitate 
intergenerational transfer of farms and ranches. To ensure the success 
and sustainability of beginning farmers and ranchers, USDA has created 
an agency priority goal that will publically share USDA performance 
goals and progress in support of new and beginning farmers.
    We recognized that a spark was needed to transform rural America 
from a primarily agri-based economy to one that makes, creates and 
innovates. That is why we focused our efforts on taking advantage of 
the emerging bioeconomy, including biomanufacturing and advanced 
biofuels, local and regional food systems, broadband, and telemedicine. 
Our efforts not only supported the most productive agricultural sector 
in the world, but also assisted rural communities to be places where 
all businesses, farm and non-farm alike, have prospered and created 
jobs. We also saw the need to provide increased opportunities to allow 
everyone to share in the prosperity of the growing economy. So we 
targeted our efforts to the poorest communities, invested in new and 
beginning farmers, and supported our veterans, which have increased 
opportunities for hard working Americans. Our efforts are bearing 
fruit. Over the last 5 years unemployment rates in rural areas have 
fallen considerably and fairly consistently in rural areas, with 
unemployment rates falling by a full percentage point or more in each 
of the last 2 calendar years. These efforts have contributed to the 
employment gains in rural America that have happened since 2009 and 
have led to increased economic activities in high poverty communities.
    We have also recognized rural opportunities beyond agriculture by 
making historic investments in rural communities, making them more 
attractive to non-farm businesses and talented hard-working individuals 
looking to get ahead. USDA has sought to revitalize rural areas and 
diversify our nation's agriculture by making significant investments in 
rural infrastructure. Since 2009, we invested a total of $13.3 billion 
in new or improved infrastructure in rural areas through 10,623 water 
projects. These improvements helped nearly 18 million rural residents 
gain access to clean drinking water and better waste water disposal. 
Modernized electric service was delivered to more than 5.5 million 
subscribers and over 180,000 miles of electric lines were funded. We 
helped nearly 103,000 rural small businesses grow, creating or saving 
nearly 450,000 jobs between fiscal year's 2009 and 2015. Since 2009, 
USDA assisted more than 1.1 million rural families to buy or refinance 
a home, helping 141,000 rural Americans become homeowners in fiscal 
year 2015 alone.
    USDA continues to lead the way for renewable energy by supporting 
the infrastructure needed to grow the new energy economy. Since 2009, 
RD has supported over 15,000 renewable energy projects to help 
producers and rural businesses save energy and increase their 
profitability and increase the production of renewable fuels. The 
Department has helped thousands of rural small businesses, farmers and 
ranchers improve their bottom lines by installing renewable energy 
systems and energy efficiency solutions, which will generate and save 
more than 9.4 billion kWh, enough energy to power 820,000 American 
homes annually. Under expanded authority provided by the 2014 Farm 
Bill, we are working to expand the number of commercial biorefineries 
in operation that produce advanced biofuels from non-food sources 
through the Biorefinery Assistance Program. This focus on renewable 
energy has resulted in support for the construction of 6 advanced 
biofuels production facilities, over 2,200 wind and solar renewable 
electricity generation facilities, and 93 anaerobic digesters to help 
farm operations capture methane to produce electricity.
    In addition, we made available $100 million in grants under Biofuel 
Infrastructure Partnership (BIP) to nearly double the number of fueling 
pumps nationwide that supply renewable fuels to American motorists, 
such as E15 and E85. Twenty one states are participating in the BIP, 
with matching funds from state and private partners, providing $210 
million to strengthen the rural economy by increasing the demand for 
advanced biofuels and expanding marketing opportunities for farmers. We 
also took new steps to support biobased product manufacturing that 
promises to create new jobs across rural America, including adding new 
categories of qualified biobased products for Federal procurement and 
establishing reporting by Federal contractors of biobased product 
purchases. We released a study of the bioeconomy last year and found 
the biobased products industry generates $369 billion and 4 million 
jobs each year for our economy. The expanding bioeconomy means more 
choices for customers and new jobs for rural America. Shifting just 20 
percent of the current plastics produced into bioplastics could create 
an increase of 104,000 jobs.
    USDA's place-based efforts are making sure that the programs that 
help alleviate the impact of poverty are available and accessible even 
in the poorest and persistently poor areas. In 2016, we expanded the 
StrikeForce Initiative to four additional states to include a total of 
970 counties, parishes, boroughs, and census areas in 25 states and 
Puerto Rico. We know that place-based efforts work and we have seen 
StrikeForce bring economic opportunity directly to rural Americans 
where they live and help rural communities leverage their assets. In 
2015, in StrikeForce target areas, USDA partnered with more than 1,000 
organizations to support 56,600 investments that directed more than 
$7.5 billion to create jobs, build homes, feed kids, assist farmers and 
conserve natural resources in some of the nation's most economically 
challenged areas. Since the initiative was launched in 2010, USDA has 
invested more than $23 billion in high-poverty areas, providing a 
pathway to success and expanding the middle class.
    Between 2009 and 2014, USDA invested more than $800 million in more 
than 29,100 local and regional food businesses and infrastructure 
projects. In fiscal year 2015, USDA directly supported nearly 10,000 
farms and ranches, food entrepreneurs and communities through local 
food-related projects, which reflects the implementation of FSA 
microloans. As a result, the market for local food has grown to at 
least $12 billion in 2014 from $5 billion in 2008. Given the current 
growth of local foods, some industry sources estimate that the market's 
value could hit $20 billion by 2019. In addition, USDA has made 
expanding SNAP recipients' access to fresh fruits and vegetables 
through farmers markets a priority in recent years. In 2008, about 750 
farmers markets and direct marketing farmers accepted SNAP. In 2015, 
almost 6,500 of these markets and farmers accepted SNAP.
    Research provides the foundation for developing innovative 
practices needed to feed the growing global population, while 
protecting and conserving our natural resources. USDA's in-house 
research and our work with land-grant universities have delivered 
science-based knowledge and practical information to farmers, ranchers 
and forest landowners to support decisionmaking, innovation and 
economic opportunity. Between fiscal year 2009 through fiscal year 
2015, USDA filed 883 patent applications with the U.S. Patent and 
Trademark Office and was issued 429 patents. In fiscal year 2015, USDA 
held 421 income-bearing licenses. It also had 301 cooperative research 
and development agreements, of which 106 involved small businesses.
    USDA has facilitated the adoption of new technologies by 
streamlining the process for making determinations on petitions 
involving biotechnology. These improvements provided more rapid and 
predictable availability of biotechnology products to farmers, 
ultimately providing technologies to growers sooner and more choices to 
consumers. In fiscal year 2015 alone, USDA reviews found safe 
genetically enhanced varieties of potato, corn, soybean, cotton, and 
alfalfa. USDA estimates that the cumulative number of actions taken to 
deregulate biotechnology products based on a scientific determination 
that they do not pose a plant pest risk will increase from a cumulative 
total of 82 actions in fiscal year 2009 to an estimated cumulative 
total of 126 actions in 2017.
    Since 2009, USDA has worked to safeguard America's food supply, 
prevent foodborne illnesses and improve consumers' knowledge about the 
food they eat. For example, USDA adopted a zero tolerance policy for 
raw beef products containing six strains of shiga-toxin producing E. 
coli, giving products that test positive for any of these strains the 
same illegal and unsafe status USDA has long given products testing 
positive for E. coli O157:H7. Additionally, USDA set tougher standards 
for Salmonella and new standards for Campylobacter on poultry 
carcasses, and developed the first ever Salmonella and Campylobacter 
standards for chicken parts, which are more commonly purchased than 
whole carcasses. Together, USDA estimates these new standards will 
reduce illnesses by about 75,000 annually, and help the agency meet 
Healthy People 2020 goals. The total number of illnesses attributed to 
USDA-regulated products fell nearly 11 percent from 2009 to 2015, which 
equates to more than 46,000 avoided illnesses on an annual basis.
    The Administration continues its strong support for the 
Supplemental Nutrition Assistance Program (SNAP), the Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC), 
and other critical programs that reduce hunger and help families meet 
their nutritional needs. SNAP kept at least 4.7 million people, 
including nearly 2.1 million children, out of poverty in 2014. Because 
hunger does not take a vacation during the summer months when school 
meals are unavailable, we have expanded the Summer EBT for Children 
demonstration pilots over the last 2 years, in tandem with the Summer 
Food Service Program. Summer meal participation has increased by almost 
16 percent since 2009. In total, summer meals sites have served over 
1.2 billion meals to low-income children since 2009. During the school 
year, over 97 percent of schools are successfully meeting nutrition 
standards by serving meals with more whole grains, fruits, vegetables, 
lean protein and low-fat dairy, and less sodium and fat. I am pleased 
the Senate Agriculture Committee passed a bill that ensures progress 
will continue improving our children's diets and urge Congress to 
reauthorize these programs for our young people without delay.
    America's farmers, ranchers and landowners have led the way in 
recent years to conserve and protect our soil, water and wildlife 
habitat. With the help of Farm Bill programs, USDA partnered with a 
record number of producers since 2009 to create not only a cleaner, 
safer environment, but to create new economic opportunities. We have 
enrolled a record number of private working lands in conservation 
programs and implemented strategies--such as landscape-scale efforts--
to restore our forests and clean our water supply. In fiscal year 2015, 
one such landscape-scale effort provided a noteworthy achievement in 
that 90 percent of the greater sage-grouse's breeding habitat in the 
western United States is protected as a result of our Working Land for 
Wildlife efforts and the work of our many partners. Due to this 
achievement, the U.S. Fish and Wildlife Service has determined this 
species does not warrant protection under the Endangered Species Act 
(ESA). In addition to wildlife benefits, conservation practices have 
reduced the amount of nitrogen leaving fields by about 26 percent, 
phosphorus by 46 percent, and the estimated amount of eroded soil by 60 
percent over the past 7 years. Through the Regional Conservation 
Partnership Program (RCPP), we leveraged $800 million to support 115 
high-impact conservation projects across the nation that will improve 
the nation's water quality, support wildlife habitat and enhance the 
environment. We have also offered producers multiple new opportunities 
to utilize the Conservation Reserve Program to retire marginal 
agricultural lands, restore grasslands and forests, and protect 
valuable wildlife habitat. But just as important as protecting our 
natural resources, we have increased economic opportunities for rural 
America by boosting outdoor recreation, which adds more than $640 
billion in consumer spending each year.
    To build on these accomplishments, we need to do more to transform 
rural America and increase opportunities for families. To do this, the 
2017 Budget will continue to expand opportunity for America's 
agricultural producers, rural communities, and the most vulnerable 
populations. Critical investments are made to strengthen rural 
communities, expand agricultural trade, provide more opportunities for 
hard working American families, modernize key infrastructure, and build 
resilience in the face of a changing climate.
    USDA's total budget for 2017 we are proposing before this 
Subcommittee is $146.8 billion, of which approximately $127 billion is 
mandatory funding. The majority of these funds support crop insurance, 
nutrition assistance programs, farm commodity and trade programs and a 
number of conservation programs. The budget includes mandatory funds to 
fully support estimated participation levels for SNAP and Child 
Nutrition Programs. For discretionary programs of interest to this 
Subcommittee, our budget proposes $19.7 billion, approximately $309 
million below the 2016 enacted level. That level fully funds expected 
participation in WIC. It includes the funding needed to meet our 
responsibility for providing inspection services to the Nation's meat 
and poultry establishments.
    The budget also includes $1.4 billion to renew approximately 
271,000 rental assistance agreements. This funding is critical to 
ensure housing stability for elderly and disabled tenants without the 
means to otherwise obtain safe, affordable housing. I appreciate the 
Subcommittee's assistance in ensuring we have the resources and 
flexibility in fiscal year 2016 needed to address challenges facing the 
Rental Assistance Program. The budget also funds single family housing 
at the 2016 enacted level, providing over 166,000 homeownership 
opportunities.
    The 2017 budget provides a strong farm safety net and makes 
investments to meet challenges of a competitive global market, changing 
climate, and making agriculture a reality for new and beginning 
farmers. The budget proposes a loan level of approximately $6.4 billion 
for direct and guaranteed farm ownership and operating loans, about 80 
percent of the loans will be made to beginning farmers and ranchers and 
socially disadvantaged producers. The Farm Service Agency will offer 
mentorship opportunities, support landowners who wish to sell or rent 
their land to beginning farmers and ranchers, increase local outreach 
and educational efforts, support agricultural youth organizations, 
provide loan fee waivers for veterans, and target additional farm loan 
funding to veteran farmers and ranchers. The budget doubles the funding 
for the Socially Disadvantaged Farmers and Ranchers and Veteran Farmers 
and Ranchers Grant Program for a total of $20 million. Funding will be 
used to assist these groups in owning and operating farms and ranches, 
while increasing their participation in agricultural programs and 
services provided by USDA. The 2017 budget also includes a $5 million 
increase for the Sustainable Agriculture Research and Education Program 
to help beginning farmers and ranchers adopt sustainable agricultural 
practices.
    The rural economy will be even stronger because of the investments 
in rural infrastructure made by USDA. We will make over $1 billion in 
investments in rural businesses estimated to provide over 55,000 jobs 
in rural areas. We will facilitate the growth of the bioeconomy with a 
$25 million increase in competitive research funding to support 
development of biobased energy sources. In addition, the budget 
includes $91 million in discretionary funding and $359 million in 
mandatory funding for a total of $450 million for REAP to assist 
agricultural producers and rural small businesses to take advantage of 
renewable energy. We also propose $6.5 billion in loans to rural 
electric cooperatives and utilities that will support the transition to 
clean-energy generation and increased energy efficiency. Funding for 
broadband grants is more than tripled to assist in bringing critically 
needed broadband service to more rural communities. In addition, the 
budget includes a total of $35 million for Distance Learning and 
Telemedicine grants to support improved education and medical services 
in rural areas which may help partially address the particular 
challenges tied to rural America's opioid abuse epidemic. Over $2.2 
billion is targeted to community facilities, which will expand 
educational opportunities for students, facilitate delivery of 
affordable healthcare, and ensure the availability of reliable 
emergency services. Through a pilot called Rural Corps, USDA will work 
in partnership with local organizations to deploy highly trained staff 
and increase the likelihood that investments in infrastructure and 
economic development are strategic, creating jobs and long-term 
economic benefits.
    Additional resources are proposed to address the acute and long-
term needs of socially disadvantaged populations, including $20 million 
for a new competitive grant Home Visits for Remote Areas Program that 
will provide support for high-need maternal, child, and family health 
in remote rural areas and Indian country. It should be noted that such 
populations are more likely to experience poverty in rural areas where 
over 18 percent of the total population and over 25 percent of children 
live in poverty. We are also proposing $25 million to support a Rural 
Child Poverty demonstration project to implement multi-generational 
strategies to addressing rural child poverty, which includes $5 million 
to support alignment of data and eligibility determination systems 
across programs. The budget also includes increased support to build 
the capacity of 1890 Institutions to meet the growing need for 
agriculture assistance in high poverty areas. Further, we propose an 
increase of about $7 million to enhance research, education, and 
extension efforts in tribal areas through long-term capacity building 
at 1994 Institutions and expansion of the federally Recognized Tribes 
Extension Program (FRTEP). This will lead to increased professional 
training opportunities, a 25 percent increase in the number of Indian 
students working on summer internships, and a doubling of the number of 
FRTEP staff engaged in 4-H activities to 72.
    Access to nutritious food is essential to the well-being and 
productivity of all Americans. The budget makes substantial investments 
in address child hunger in the summer. It provides an increase of $3 
million in discretionary funding to continue the successful Summer 
Electronic Benefit Transfer for Children (SEBTC) demonstration pilots. 
Beyond the expansion of the pilots, the 2017 budget proposes to invest 
$12.2 billion over 10 years to make the program permanent and begin 
phased-in nationwide implementation. Rigorous evaluations of SEBTC 
pilots have proven effective in reducing very low food security in 
children for about one-third of the children who would have otherwise 
experienced it and in improving children's nutrition. The proposal 
would reach almost one million low-income children beginning in the 
summer of 2017, increasing to nearly 20 million children after 10 
years. Given the harm that hunger imposes on children, this is a smart, 
evidence-based investment.
    The budget includes an increase of $30 million to strengthen animal 
disease preparedness and response capabilities funding needed to stem 
the impacts of significant pests and diseases. Minimizing such impacts 
allows for an abundant food supply as well as provides trade 
opportunities for our producers. Over the last few years, USDA has 
addressed some of the worst animal disease outbreaks in recent history 
with the emergence of novel swine enteric coronavirus disease in the 
swine industry and the highly pathogenic avian influenza outbreak last 
year that infected 232 flocks and resulted in the depopulation of 
approximately 50 million birds.
    Food for Progress and the McGovern-Dole International Food for 
Education and Child Nutrition Program will continue to provide benefits 
to millions of people overseas. These programs have helped to engage 
recipient countries not only by delivering food assistance, but also by 
fostering stronger internal production capacity and infrastructure, 
generating employment, boosting revenue, and developing new markets and 
productive economic partnerships. The budget provides $20 million, $5 
million through the McGovern-Dole program, to support the local and 
regional procurement of food aid commodities for distribution overseas 
to complement existing food aid programs and to fill in nutritional 
gaps for targeted populations or food availability gaps caused by 
unexpected emergencies. Also, the budget proposes the authority to use 
up to 25 percent of Title II resources for these types of flexible 
emergency interventions that have proven to be so critical to effective 
responses in complex and logistically difficult emergencies.
    The budget recognizes that there is a direct correlation between 
the capacity of this country to continue to sustainably meet a growing 
demand for food, feed and fiber and the amount of resources that we put 
into agricultural research. Long-term agricultural productivity growth 
relies on innovation through research funded by both public and private 
sectors. Analysis by the Economic Research Service shows that long-term 
agricultural productivity is fueled by innovations in animal/crop 
genetics, chemicals, equipment, and farm organization that result from 
public and private research and development. The 2017 budget includes 
$700 million for competitive grants through the Agriculture and Food 
Research Initiative, including $325 million in mandatory funding that 
would bring the program up to its authorized level. This significant 
investment is needed to ensure tools are in place to adapt to 
challenges faced by agricultural producers, while still feeding a 
growing population. A portion of this funding will support the 
President's clean energy efforts through the development of commercial-
scale advanced biofuels and biobased products that are compatible with 
existing infrastructure. Also, the budget more than doubles the funding 
available to address antimicrobial resistance in pathogens of humans 
and livestock, and to seek answers to key questions about the 
relationships among microbes and livestock, the environment, and human 
health. Further, the budget includes $36 million for research to 
address the decline of pollinator health by understanding, preventing, 
and recovering from pollinator losses.
    We appreciate the Subcommittee's action to fund critical research 
infrastructure in 2016. To continue the process of laboratory 
improvement, the budget proposes additional investments in research 
infrastructure to further reduce the backlog of USDA's laboratory 
construction and renovation needs. These investments include $30.2 
million for the Agricultural Research Technology Center in Salinas, CA, 
where research is done on alternatives to methyl bromide and 
development of scientifically based organic crop production practices 
for weed, insect, and disease control, as well as $64.3 million for the 
Foreign Disease-Weed Science Research Laboratory in Ft. Detrick, MD.
    The 2017 budget fully funds the EQIP and CSP programs at the Farm 
Bill authorized levels. The unprecedented level of funding provided for 
EQIP will support conservation practices on an additional 11.5 million 
acres, which will help farmers and ranchers make their operations more 
resilient to climate change, increase access to greenhouse gas markets, 
and protect wildlife habitat, among other benefits. The funding for CSP 
will allow 10 million more acres to be enrolled. The budget also 
provides an increase of $11 million to support conservation planning, 
which will result in over 8,000 additional conservation plans. This 
translates into 2.9 million additional acres of planned conservation. 
The strong support for conservation planning as well as robust funding 
for the mandatory conservation programs follows through with the 
principles laid out in USDA's Building Blocks for Climate Smart 
Agriculture and Forestry.
    Science and data are the primary tools that the Food Safety and 
Inspection Service (FSIS) uses to prevent foodborne illness and protect 
public health. As part of this effort, the budget includes $8.5 million 
to further modernize FSIS' science-based decisionmaking process by 
developing and deploying new tools to reduce the prevalence of 
foodborne illnesses.
    To enhance nutrition education and the provision of healthy meals, 
the budget includes a $4 million increase to promote healthful 
behaviors that can reduce incidence of chronic disease and obesity, and 
lower healthcare costs. Included in this is an initiative to research 
and implement cutting-edge initiatives to help Americans put healthy 
eating behaviors, based on the Dietary Guidelines for Americans and 
MyPlate, into practice. We will also develop the first-ever dietary 
guidelines for the birth to age two group and pregnant women. In 2013, 
The Pew Charitable Trusts and the Robert Wood Johnson Foundation 
released a report that found 88 percent of schools need at least one 
additional piece of kitchen equipment to serve healthier meals that 
meet science-based nutrition standards. The budget also requests an 
increase of $5 million, for a total of $35 million, for grants to help 
schools purchase needed equipment to prepare and serve healthier meals.
    The budget requests funding to establish an in-country presence in 
Cuba to cultivate key relationships, gain firsthand knowledge of the 
country's agricultural challenges and opportunities, and develop 
programs for the mutual benefit of both countries. U.S. agricultural 
exports have grown significantly since trade with Cuba was authorized 
in 2000. In fiscal year 2014, Cuba imported over $2 billion in 
agricultural products including $300 million from the U.S., and an in-
country presence will capitalize on opportunities this nearby market 
provides for U.S. agricultural exporters.
    We have identified additional opportunities to modernize and 
strengthen the Department. The budget includes resources to pursue 
these efforts, including $20 million to continue the modernization of 
the Headquarters complex that when finalized could yield annual savings 
of over $45 million through a reduction in rent and security costs. The 
budget also provides an increase of $18 million to fund a relocation or 
renovation of FNS headquarters in 2017. In addition, the Department is 
proactively addressing the cyber security threats posed against the 
network and systems of USDA. Through an investment of an additional $10 
million in 2017, the Department will enhance its ability to monitor and 
prevent breaches of the systems used to house data of importance to our 
employees and customers.
    The 2014 Farm Bill included several reforms to the Federal crop 
insurance program; however, there remain further opportunities for 
improvements and efficiencies. The President's 2017 budget includes two 
proposals to reform crop insurance, which are expected to save $18 
billion over 10 years. This includes reducing subsidies for revenue 
insurance that insure the price at the time of harvest by 10 percentage 
points and reforming prevented planting coverage. These reforms will 
make the program less costly to the taxpayer while still maintaining a 
quality safety net for farmers.
    We have accomplished much over the last 7 years. The budget 
presented to you will continue our progress. I would be happy to answer 
any questions you may have about our budget proposals.

                      SNAP CONVENIENCE STORE RULE

    Senator Moran. Mr. Secretary, we appreciate your presence 
here, and I appreciate the number of times you have reached out 
to me and provided me with information and meeting in the 
office and the phone calls, and I am grateful for the working 
relationship that we have.
    Let me just ask a couple questions and then we will move to 
my colleagues quickly, and I will have an opportunity to ask 
more again later.
    But let me start with the SNAP issue. February 17, the Food 
and Nutrition Service (FNS) published proposed rules in regard 
to SNAP. As you will recall, this was a significant, 
contentious issue in the farm bill.
    My question to you is, my understanding is that those 
proposed rules have a significant consequence on potentially 
the convenience store setting, perhaps small grocery store 
setting. And I have a particular interest in that because in 
many rural communities, there is no grocery store. A 
convenience store is one of the sole providers of food in many 
communities across rural America.
    I would be interested in hearing your thoughts, but my 
specific question is, would you entertain positively the idea 
of a longer comment period than the 60 days that you are 
currently proposing?
    Secretary Vilsack. Mr. Chairman, obviously, we will respect 
your request and certainly take a look at what extension would 
make sense. We obviously want to take a look at the comments 
and find out what people think and feel about this. But we 
obviously want to give people appropriate time to comment on 
this.
    This is an important issue. It is an important issue from 
the standpoint of the convenience store. It is also an 
important issue in terms of access to good, wholesome food, as 
we deal with this obesity crisis and the health care costs that 
are associated with obesity and the diseases that result from 
obesity.
    Part of the challenge is that folks who do live in rural, 
remote areas do not have access to the wide array and diversity 
of food that others are fortunate to have, and we believe it is 
not asking too much for convenience store owners and operators 
to be able to provide a broader array of resources and choices 
for people who are SNAP beneficiaries.
    So that is the purpose of the rule. I think there is also 
the belief that we can partner with these convenience stores in 
an effort to increase and enhance the nutritional value of what 
is being sold at the convenience stores.

                          GIPSA PROPOSED RULES

    Senator Moran. I appreciate what I took as a positive 
comment, that you will take a look at potentially extending the 
comment period. I appreciate that, Mr. Secretary.
    Let me ask about another rule. On Monday, you indicated in 
conversations in front of an organization here, I think in 
Washington, DC, that you anticipated that there would be 
revised Grain Inspection, Packers and Stockyards Administration 
(GIPSA) rules, and you expected them to be finalized before you 
leave office.
    Given the overwhelming congressional opposition to the 
previously proposed rules, what changes to GIPSA rules do you 
plan to make? And what discussions and outreach have you had 
with stakeholders in this regard?
    Secretary Vilsack. Mr. Chairman, that process is still 
ongoing, and no commitments, specifically, have been made in 
terms of what those rules will look like.
    We realize that Congress lifted the restriction on our 
ability to work on these issues. I have asked the team to take 
a look at what modifications or changes would be appropriate, 
given the concerns that have been expressed in the past, and 
also to determine whether or not what we were considering a 
couple years ago, whether or not that still makes sense in 
today's market.
    They are putting together that work plan, and I will be 
more than happy when that process is completed to obviously 
provide you additional information on precisely what we are 
thinking.
    But the key here is to make sure that the playing field is 
level between those who are owners and those who are producers, 
to make sure that there is not an unfair advantage in that 
relationship and to make sure, especially in difficult times, 
that those who invested a lot of hard-earned resources and time 
are treated fairly if a contract is terminated or for some 
reason a contract is modified.
    We have had examples where folks have been dealt a very 
serious and difficult blow in tight circumstances. The avian 
influenza situation was sort of a reminder to us about the 
importance of that relationship, particularly as we did 
indemnification payments for those who lost birds. We found 
that not all those indemnification payments were going to the 
producers who were economically suffering as well.
    So we want to make sure it is a fair and equitable 
relationship, and that is the purpose of our review of those 
rules.
    Senator Moran. Mr. Secretary, what do you expect the 
timeframe to be? What schedule are you on?
    Secretary Vilsack. I would say that I suspect that some of 
these rules may very well be finalized and some of these rules 
may be proposed, given the nature of the concerns that were 
expressed in the past.
    I would hope that we would be able to get work plans 
completed and we would get something over to the Office of 
Management and Budget (OMB) relatively soon. I would hope that 
we would be able to get that done sometime in early spring. And 
then there is the review by OMB, which can take sometimes up to 
90 days or longer.
    Then hopefully that process is expedited so that sometime 
in late summer, early fall, we are in a position to provide 
information specifically to the public for their comment and 
review. At that point, any adjustments that need to be made can 
be made. And hopefully by the time of year end, we will know 
what the rules will be or what they are at least proposed to 
be.

                            AVIAN INFLUENZA

    Senator Moran. Mr. Secretary, you mentioned avian flu. This 
is a topic of conversation that you and I have had one-on-one, 
but certainly in the hearing that we had a year ago on your 
budget, this was a significant issue and concern.
    Is there something that USDA has learned that we would now 
be in a better position, should this kind of occurrence 
reappear? And then if you would bring us up-to-date on what has 
transpired in other countries in regard to our exports in 
regard to avian flu?
    Secretary Vilsack. We have learned a great deal, Mr. 
Chairman.
    First of all, we have learned the necessity of making 
earlier determinations and quicker determinations, so we have 
beefed up our laboratory capacity. We would like to be able to 
make determinations within a 24-to-48-hour time period when 
something arises on a farm. We then would like to be able to 
work with that producer to be able to depopulate within 24 
hours. And we have learned that there are a multitude of ways 
in which that can potentially be done under each particular 
circumstance.
    We have learned the need to pre-position assets, or at 
least have an awareness and understanding of how disposal will 
be handled in advance as opposed to after the fact, which can 
delay disposal, which can in turn create potential greater 
risk.
    We have learned our indemnification systems needed to be 
altered a bit to reflect a more appropriate balance between the 
producer, the taxpayer, and USDA. We were cleaning up 
situations in some of these poultry facilities that had not 
been cleaned up for a decade, as opposed to cleaning up the 
specific cause or problem with avian influenza. So there was a 
better balanced approach there.
    The difference between providing the owner of the birds all 
of the indemnification and now some kind of equitable ratio, if 
you will, between owner and producer in terms of 
indemnification so we can keep producers in business.
    We have learned the necessity of constantly researching 
this, because it is constantly mutating and evolving.
    And we have also learned the necessity of at least having 
pre-positioned vaccine, not that we would necessarily use it, 
but there may be a circumstance or situation where it is 
appropriate. And we have basically wargamed what that would 
look like and what we would have to do in order to utilize 
vaccine.
    In terms of the trade issue, we are seeing many of those 
who initially banned all poultry sales beginning to understand, 
from an international rules standpoint, the need to look at 
this regionally. We have actually seen some that have become 
even State-specific and some bans that have even become very 
specific to the county or counties.
    So we have seen an expansion of opportunity. About 77 
percent of the poultry exports are currently in the right 
place. We are still working with some of our friends in China, 
for example.
    But for the most part, I think people have taken the right 
approach to regionalization or Statewide bans as opposed to 
countrywide bans.
    Senator Moran. Mr. Secretary, it seems as if you have 
learned a lot, which I assume means the USDA, the Federal 
Government, are better prepared for another occurrence, should 
it arise.
    Are there any legislative changes that are required to help 
you accomplish a better response?
    Secretary Vilsack. I would only say, Mr. Chairman, I think 
the research aspect of USDA needs to continue to be beefed up, 
because we are constantly dealing with things like this. But I 
do not know that we necessarily need a legislative change. But 
if there are, we will be happy to get some information to you. 
I do not know of anything, off the top my head.
    [The information follows:]

    We do not foresee needing any legislative changes to enhance our 
response to HPAI.

    Senator Moran. Thank you very much.
    Senator Merkley.

               OPENING STATEMENT OF SENATOR JEFF MERKLEY

    Senator Merkley. Thank you very much, Mr. Chairman.
    Thank you, Mr. Secretary. We are well along in the journey 
now, an 8-year journey serving President Obama, and I believe 
you are the only member of the Cabinet who has been there from 
the starting line and is still with us, and I assume is 
planning to go across the finish line. I want to thank you for 
these 8 years of service.
    Secretary Vilsack. Thank you.

                       RENTAL ASSISTANCE PROGRAM

    Senator Merkley. As you indicated to the Chairman, I know 
you have learned a lot in the post over these many years on so 
many different issues. Certainly, in your introduction you 
mentioned food, water, and shelter, that is everything from 
SNAP to water purification programs to housing programs. It 
really reflects on the essential functions that your Department 
has for millions, millions of Americans.
    I just wanted to note your March 7 speech where you called 
upon Congress to pass mandatory genetically modified organism 
(GMO) labeling. I know you and I have very different 
definitions of what that would look like, but I stand with you 
shoulder-to-shoulder in the cause of mandatory labeling.
    I wanted to turn to the housing component. One of the 
issues we had last year is that, under rental assistance, the 
project-based rent subsidy program, we had a situation where, 
essentially, we ran out of money to pay the share of the rent 
that we were responsible for as the Federal Government.
    That appears to be fully addressed in the budget for fiscal 
year 2017, but I just wanted to raise it and ask if people 
across the country who were involved in providing project-based 
housing can rest assured that we have it covered this time?
    Secretary Vilsack. Senator, I think we do. That is what I 
have been told. We certainly appreciate the work of yourself 
and Members of this Subcommittee to resolve that aspect of our 
Rental Assistance Program.
    We have, as you know, the other issue of maturing mortgages 
and loan payoffs, which will result potentially, unless we deal 
with those, in a lot of these units coming out of the program, 
in which case you are going to have a lot of families that are 
going to be looking for housing and not be able to afford it.
    Senator Merkley. You turned immediately to my second topic. 
We have recently been able to get some data from the Department 
on maturing mortgages in Oregon, but it is important that 
across the Nation we know when mortgages are maturing so 
nonprofits can attempt to buy them in places where they would 
go to much higher market rates.
    I know your team has been working on this issue, but I just 
wanted to emphasize how hard it is to recover this housing if 
we lose it out of the affordable portfolio.
    Years ago, I worked on a program called LIHPRHA, Low-Income 
Housing Preservation. It was a very similar situation, only in 
urban settings. Now we have this in rural settings. So anything 
I can do, and I am sure many members would say the same, to 
assist the Department in trying to make sure we identify the 
expiring projects and do everything possible to preserve them 
certainly would like to see happen.
    Secretary Vilsack. Senator, 75 percent of these loans 
potentially will become due and paid off in the next 10 years, 
so that is 75 percent of the units.
    One thing that you may want to think about is the ability 
of vouchering for those folks who are in a position where their 
unit ultimately gets out of the program. Another way that we 
are looking at it is being able to extend these mortgages and 
refinancing, so that improvements can be made to the property 
with the savings that results from extension and refinancing.
    So there are some creative solutions here, but we need to 
get focused on this in the very near future.

                      RURAL ENERGY SAVING PROGRAM

    Senator Merkley. I look forward to exploring with the 
Subcommittee the possibilities, because this will be very 
important to the housing stock in America.
    I wanted to turn to the Rural Energy Savings Program. The 
Rural Energy Savings Program, the concept was that we could 
create a lot of jobs in rural America if people could take 
loans on their electric bill and be able to replace their 
windows or add installation. It put a lot of people to work, 
and often the energy savings would pay for the improvements 
themselves, plus virtually all these products are made in 
America, so we get more bang for the buck because we get the 
local construction contractor employed but it also creates jobs 
in American manufacturing.
    We had the initial program funded last year. I was 
wondering if you have any information whether we have been able 
to get it stood up on its feet and have it running?
    Secretary Vilsack. Senator, as you know, we worked with a 
program that was similar to what you proposed with an interest 
rate that was higher. We were in the process of implementing 
that and learning from that, recognizing that there were some 
serious learning curves for the research and extension centers 
(RECs) that we were dealing with.
    We recently announced a statewide initiative in Vermont, 
where we learned quite a bit and created sort of a template.
    The proposal that you were the leader on last year, we 
expect and anticipate to stand up sometime this spring. We 
would anticipate and expect that there will be quite an 
interest in a interest-free or zero-interest loan program. But 
now that we know how to set it up, I think we will see more of 
these projects, because I think it is popular, and I think 
there is a great deal of potential there.
    Senator Merkley. I can tell you, in Oregon, the employment 
rate has not rebounded at all in rural areas the way it has in 
urban areas. I know you know this to be the case across the 
country, so it is a win-win program on several levels.
    Secretary Vilsack. Help us fix the fire budget, and that 
situation in rural Oregon will change.
    Senator Moran. Senator Blunt.
    Senator Blunt. Thank you, Chairman.

                         STREAMING FARM PROGRAM

    Secretary Vilsack, I want to join Senator Merkley and 
Senator Moran in appreciating your service, appreciating really 
how much you bring to this job, I think every year more than 
the year before. It is amazing how much there is still to 
learn, and I am impressed by how you dedicated yourself to 
learning how important this is.
    The future challenges and opportunities for agriculture are 
great, if not greater than they have ever been. Hopefully, we 
can figure out how to make the most of that.
    Just two or three pretty quick questions here. One is, I 
continue to hear from our friends in agriculture the desire for 
more streamlining in the reporting process.
    My good friend Blake Hurst, who is the president of the 
Missouri Farm Bureau, was telling me the other day he has to go 
into the Farm Service Agency (FSA) office and file his report 
on crop insurance, and then he has to go to his crop insurance 
agent, and then the crop insurance agent has to refile the same 
information with Risk Management.
    Are we making any progress in trying to streamline that 
time cost, both to Federal employees and to the people that 
they work for?
    Secretary Vilsack. We are, Senator. Last year we launched 
and this year we implemented FSA Plus, which is allowing folks 
to access their records at home. This year we started with a 
pilot project in Iowa and Illinois, to try to test market how 
we would be able to have better coordination between the Risk 
Management Agency (RMA) and FSA and the reporting. We then 
extended that to a number of other States. Now we are prepared 
this year to go Nationwide.
    So the concerns that he has expressed, I think by the end 
of this year, he will be much happier than he has been, and he 
will also be able to access all of his records, all of his 
maps, all of his information from his home computer with FSA 
Plus.
    Senator Blunt. I know that is a project that has been out 
there all the time you have been running the Department.
    Secretary Vilsack. It has.

                     NATIONAL SCHOOL LUNCH PROGRAM

    Senator Blunt. It is frustrating and challenging for all of 
us. I look forward to seeing it come to a conclusion.
    Now, you will remember my mom and dad were dairy farmers, 
so I come to this next topic with my own personal point of 
view, which is pretty strongly held.
    But I believe that there are significant parts of the 
country now where packaged bottled water is being offered as a 
substitute for milk in school cafeterias. Historically, USDA 
has recommended school children consume 2.5 to 3 servings of 
milk or other dairy products every day because of the 
potassium, vitamin D, and calcium.
    I guess my two questions are, because I believe the facts 
are that is an accurate statement about water as an alternative 
to milk, is packaged bottled water a reimbursable item in the 
National School Lunch Program?
    Secretary Vilsack. I believe it is, but I do not for a fact 
know that. We can check.
    I do know that we are encouraging more dairy products. It 
does not necessarily have to be milk. Greek yogurt is now a 
protein substitute, so there is a lot of interest--and, 
frankly, we are trying to be responsive to what school 
districts are asking us to provide them with and for.
    But I will check on the reimbursement issue.
    Senator Blunt. I am not a big advocate for us buying water 
as one of the alternatives at lunch. There are other ways to 
get water, I would think.
    USDA funds being used, do you think that is through the 
National School Lunch Program then? Or it might be and you are 
going to check and get back to us on that?
    Secretary Vilsack. I will check on that.
    [The information follows:]

    Water is not a food component or food item that is required for the 
reimbursable meal under the National School Lunch Program. As required 
by the Healthy, Hunger-Free Kids Act of 2010, potable water must be 
made available to students during meal service at no cost to students. 
However, school districts may not promote or offer water or other 
beverages as an alternative selection to the required fluid milk 
component on the meal service line. Most schools meet the potable water 
requirement by providing a water fountain or a cooler filled with tap 
water in the cafeteria. For the majority of operators, USDA expects 
compliance with the potable water requirement to incur minimal or no 
costs. However, USDA does not prohibit use of the nonprofit school 
foodservice account to purchase non-program food such as water. USDA is 
working with State agencies and local school districts during the 
Administrative Review process to provide technical assistance and 
corrective action when necessary to eliminate the occurrence of choices 
between milk and water or other beverages during meal service.

                           BROADBAND PROGRAM

    Senator Blunt. So Senator McCaskill and I wrote a letter 
recently to Federal Communications Commission (FCC) Chairman 
Tom Wheeler. Our concern is that the remaining funds available 
under phase II of the Connect America Fund, it is critically 
important that rural constituents all over--our letter was 
specifically focused on Missouri--have the same access to fiber 
optics and other advanced broadband networks as their urban 
counterparts at a comparable price.
    Secretary Vilsack. I certainly agree. We have conveyed 
those same sentiments to the Chairman. Our hope is that as they 
look at the Connect America and some of the other programs that 
we will continue to see an expansion of broadband.
    Also, we believe it is going to be important for us to 
continue to stay in that game from a grant and loan 
perspective. That is why our budget reflects a significant 
increase in the broadband projects.

                       DRUG USE IN RURAL AMERICA

    Senator Blunt. I think social access, economic opportunity, 
all those things matter. It may be that social access may lead 
to my last question, which is one--you and I talked right after 
the President asked you to play a leadership role in this 
effort to curb heroin and opioid use.
    On the floor of the Senate this morning, as we were trying 
to move through this bill, I made the point that actually more 
people die of drug overdoses now in rural America than urban 
America. More people die outside a metropolitan statistical 
area, even if that area may be quite far from the hub of that.
    Do you want to talk a little bit about the challenge to 
rural America of this epidemic of opioid and heroin use and 
overdose?
    Secretary Vilsack. Well, it is a complicated problem. It is 
one that requires a series of steps. We have to have more 
prescribers trained in the appropriate prescription of pain 
medication. I think we have to have, frankly, reasonable 
expectations on the part of patients as well, in terms of 
precisely what doctors can and cannot do in terms of pain 
relief.
    I think it is going to be important for us, particularly in 
rural areas, for our first responders to have access to the 
overdose reversal drugs that are available, that are now in a 
nasal spray, now more readily available. In fact, we might want 
to consider a general prescription that would allow family 
members to have access to that reversal drug, just in case, 
knowing that if a loved one is in trouble, being able to 
respond quickly.
    It is going to be necessary for us to look at ways in which 
we can encourage States, and specifically the State of 
Missouri, to have a better monitoring program, so we can 
prevent doctor shopping, and that we have interoperability 
between States. We have many States with these programs, but 
they do not necessarily communicate, so if you are on a border 
community, you can potentially game the system.
    I think it is going to be important for us to look at ways 
in which we can increase support for medication-assisted 
treatment, and perhaps not just limit it to physicians but 
perhaps physician assistants or some other medical 
professional, particularly in rural areas, to be able to be 
involved in the basic prescribing of those things in terms of 
trying to meet the needs.
    You mentioned broadband, telemedicine, and access to 
services. That may be a way of providing services without 
necessarily brick-and-mortar investment.
    We need to make sure people understand that mental health 
services and substance abuse services are now covered by 
insurance. There is, I think, a lack of understanding about 
that. We frankly need to engage the entire community, 
particularly the faith-based community, in making recovery 
support efforts more readily available.
    I know in my own personal situation, my mother struggled. 
She would have never been able to recover but for Alcoholics 
Anonymous (AA) and some of the support that she had from people 
similarly situated. There are not places today in many rural 
communities where those meetings can take the place. Faith-
based organizations I think have a particularly interesting 
role and opportunity there.
    So it takes a broad approach. I think the Administration 
looks forward to working with you and others to try to make 
sure we put the resources behind all of these solutions, 
because it is a horrendous problem and tens of thousands of 
people are dying, and hundreds of thousands of families are 
being impacted and affected by this.
    Senator Blunt. Thank you for your leadership there and in 
other areas, Mr. Secretary.
    Mr. Chairman, thank you for the time.
    Senator Moran. Thank you, Senator Blunt.
    Senator Tester.
    Senator Tester. Thank you, Mr. Chairman, for allowing me to 
speak and giving me these glasses so I can read.

            NORTHERN PLAINS AGRICULTURAL RESEARCH LABORATORY

    It is good to have you here, Secretary Vilsack. I am going 
to start out a little parochial right now with an ARS station 
in Sidney.
    I do not know all the information about it because it was 
just pointed out to me today by a producer from eastern 
Montana, that it is being repurposed or potentially may be 
taking a step toward closure. So I just want to get some input 
from you on what is going on. If you do not know, you can 
certainly get back to me.
    But these guys do incredible research. It is an incredible 
facility, as I am sure they all are. It does research on saw 
fly and other kinds of pests. You now the issue with barley 
scab showing up in Montana. So these research facilities are 
really, really important.
    Can you give me an idea what the plans are for that?
    Secretary Vilsack. The budget that we proposed requested an 
increase in the ARS budget. Part of that increase would be 
targeted actually toward the facility that you mentioned.
    It currently supports 41 scientists. I do not know of any 
plan to reduce that number, or reduce the support for those 41 
folks.
    Obviously, research projects come in. Some get concluded 
and new ones begin. So I am not sure that is necessarily 
repurposing, but perhaps there is a different focus given a 
particular disease or pest. But I do not know of any desire to 
close or reduce the importance of that.

                            RESEARCH BUDGET

    Senator Tester. That is what I wanted to hear. You answered 
that very, very well.
    The research for Smith-Lever dollars and Hatch are flat at 
about $302 million and $44 million, respectively. These are 
also very, very important. Could you shed some light? Has the 
use of those also flattened out? Or does demand far exceed? 
Tell me what is going on.
    Secretary Vilsack. Yes, it is a combination of having an 
overall number for our budget, and the challenge in our budget 
where fire suppression, WIC, rental assistance, and food safety 
eat up to 50 percent of the budget. Oftentimes, when those 
items have to be increased, it impacts and affects the other 50 
percent.
    It is also a fact that we are trying to look at our 
competitive grant programs as a way of encouraging more 
collaboration between universities. Many universities are 
receiving resources from that that ultimately help to support 
the university and support the capacity university, so it is a 
balance.
    Senator Tester. I got you. I think that you have done some 
positive things for research in here. But you know, you know 
how important research is. For farmers to do trial and error is 
a good way to go broke.
    So moving forward, you are in office for another 10 months.
    Secretary Vilsack. I am in office for another day, for 
sure. I serve at the pleasure of one guy.
    Senator Tester. One never knows what might happen to you. I 
stand corrected.
    But moving forward, are you confident that this budget that 
you are putting forward, those priorities on research 
particularly, will be heading in the right direction, moving 
into the next administration, whoever that might be?
    Secretary Vilsack. I am confident, because I think we have 
addressed both short-term and long-term, traditional and 
nontraditional, challenges that agriculture is going to face.
    This is an incredibly complex and changing world that our 
farmers are living in. I think we have figured out a way in 
which we can provide them assistance and help, if our research 
budget is adequately funded.

                    WATER AND WASTE DISPOAL PROGRAMS

    Senator Tester. Okay. I want to talk about rural 
development and water infrastructure, critically important in 
rural America, as you well know. $244 million for loans and 
grants to rural businesses, tripling of funding of broadband 
grants, which is really important.
    There is a reduction though in grants and loans for water 
and waste disposal programs. If you look around this country, 
and I know I am preaching to the choir here, these systems are 
for the most part wore out. So why the reduction?
    Secretary Vilsack. Well, because in the past several years, 
we reduced the business and industry loan programs, and we have 
reduced and not adequately funded some, so it is about balance, 
number one.
    Number two, we are looking for leveraged opportunities. We 
are trying to get the private sector more engaged in investing 
in these water projects. We are finding that there is interest 
in this. Pension plans, some of the private investment that we 
have been cultivating at USDA to leverage our scarce resources 
are now seeing 3-percent or 4-percent payment on a 30-year loan 
quite attractive.
    We are actually working to try to look at our own portfolio 
to see whether or not we can maximize the value of that 
portfolio and create an incentive for the private sector to 
invest hundreds of millions if not billions of dollars.
    So it does not necessarily mean that less work is going to 
be done, Senator. It just means that we have to be creative 
about where the financing is going to come from. We are being 
very creative at USDA.

                      RURAL COMMUNITY POPULATIONS

    Senator Tester. We appreciate that creativity. I just want 
to talk about something. We had a roundtable that the Chairman 
and Ranking Member put on. Dr. Johansson was at it here a 
couple weeks ago.
    One of the things that is going on in rural America that I 
also know you know about is depopulation in a big, big way. We 
are seeking rural communities dry up, I think at a faster rate 
than I have ever seen in my lifetime.
    In the last 40 years since I graduated from high school, 
the little town I am from, if you go by enrollment in high 
school, is two-thirds smaller than it was when I went to school 
there, more than two-thirds.
    I know there is big equipment out, and I know it is more 
efficient, and we do have more technology that makes things 
move. But I mean, where I live, and it is different in every 
area, but you know, 1,000 acres was an average farm. I have 
folks around me that farm 20,000 acres and north of that even.
    So is this just something that is going to continue? Are 
there things that we can do to encourage smaller farms maybe? 
Or encourage more people to move into rural America?
    Because you have schools that are closing down. You have 
cities that have to build schools. They are just all sorts of 
social problems that all cost money.
    Secretary Vilsack. Senator, in my lifetime, American 
agriculture has increased its productivity 170 percent, with 22 
million fewer farmers----
    Senator Tester. Yes.
    Secretary Vilsack  [continuing]. On 26 percent less land.
    Here is the problem. In the past, we did not create a 
companion economy to the extraction economy that was part and 
parcel of rural America.
    We now have a companion economy. It involves local and 
regional food assistance. We supported nearly 1,000 
infrastructure investments in local and regional food systems 
supporting 162,000 producers. We are beginning to see that 
prosper.
    We are seeing conservation. Howard Buffett came to our 
Outlook Forum and talked about the need for people to 
understand that conservation can actually be profitable. He is 
proving it in his operation.
    And the bio-based economy, the ability to transfer and 
produce a multitude of materials and chemicals and fabrics and 
fibers and fuels from bio-based systems.
    So we are headed in the right direction on two data points. 
One, the unemployment rate is coming down, which is good. And 
two, the poverty rate in rural America in the last 2 years has 
come down faster than in any preceding 25 years.
    So we are beginning slowly to turn around. Now, we are not 
going to get out of the fix that you mentioned overnight 
because we did not get into it overnight. But I think we are 
headed in the right direction.
    And I am hopeful that this companion economy that you all 
have helped to support with farm bills and budgets continues.
    Senator Tester. Thank you.
    Thank you, Mr. Chairman.
    Senator Moran. The Senator from Montana, Senator Daines.
    Senator Daines. Montana and Montana, Jon. All good.
    Senator Tester. Back to back.

                              BRUCELLOSIS

    Senator Daines. Secretary Vilsack, thanks for being here 
today.
    Agriculture is Montana's number one industry. It is a $5 
billion a year economy for us.
    Last year, I was pleased to be able to work with the 
Montana Grain Growers and other stakeholders to reform and 
reauthorize the Grain Standards Act to ensure that Montana 
farmers are protected from disruptions in federally mandated 
grain inspections, like what happened at the Port of Vancouver.
    I remember having literally farmers jumping off of a 
combine in the middle of the harvest running to Great Falls to 
meet with you and talk about the crisis we had. I was glad to 
see we got it resolved, and I look forward to ensuring this new 
law is implemented effectively moving forward, so we can 
prevent the crisis from happening again. Thank you for your 
help on that.
    I want to shift gears and talk about brucellosis. I live 
about an hour north of the Yellowstone National Park. I went 
from kindergarten through college there in Bozeman.
    As you know, there is significant bison herd within 
Yellowstone National Park and the greater Yellowstone 
ecosystem.
    My question is, how is your Department and the Animal and 
Plant Health Inspection Service (APHIS), in particular, 
coordinating and cooperating with State agencies in Montana 
like the Fish, Wildlife and Parks in Montana and the Department 
of Livestock on disease management efforts, particularly 
regarding brucellosis in the greater Yellowstone area?
    Secretary Vilsack. A number of years ago, we entered into 
an arrangement with the folks at Yellowstone, the State 
officials and others, to address this. I can get you more 
information, Senator, on the success of that, but I think we 
were able to isolate and provide a much better environment 
relative to the bison and other animals.
    So I would be happy to get you more detail about that, but 
I know that we have been working collaboratively with folks on 
this.
    [The information follows:]

    The Greater Yellowstone Area (GYA) wild elk and bison populations 
have persistent levels of brucellosis and the potential for continued 
exposure to livestock. To address this unique challenge, we assist with 
the Interagency Bison Management Plan (IBMP) operations in the GYA in 
cooperation with our fellow IBMP partners. These partners include the 
National Park Service; the U.S. Forest Service; the Montana Department 
of Livestock; the Montana Department of Fish, Wildlife, and Parks; the 
Intertribal Buffalo Council, the Confederated Salish and Kootenai 
Tribes, and the Nez Perce Tribe. We also facilitate and participate in 
studies to develop brucellosis risk mitigation measures.
    The ultimate goal of the IBMP activities is to reduce the risk of 
brucellosis transmission from wild bison and elk in the GYA, while 
maintaining a viable wild bison population. In addition to the 
cooperative effort, each IBMP agency is actively conducting activities 
that are in line with their own agency's mission. Recently, we 
sponsored a review of brucellosis control in the GYA by a National 
Academy of Sciences panel, and we are waiting on the report's release 
later this year. This report will describe the likely effectiveness and 
trade-offs of options that could be used to address brucellosis in the 
GYA. It will also describe and prioritize further research needed to 
reduce uncertainties and advance the knowledge base on brucellosis 
vaccines, vaccine delivery mechanisms, and diagnostics. APHIS will use 
the findings from this report to help guide the development of a 
unified strategy to deal with brucellosis in the GYA.
    Specific to Montana, APHIS provides cooperative agreement funds to 
support brucellosis mitigation activities. APHIS personnel also work 
with the State on every aspect of the brucellosis program, such as 
sample collection and testing for surveillance, responding to 
detections, and conducting epidemiological investigations. In 
collaboration with the Agricultural Research Service and the States of 
Montana and Wyoming, APHIS has developed and continues to develop non-
lethal techniques to detect and eliminate the disease from bison and 
elk populations.

    Senator Daines. Speaking of collaboration, I am going to 
throw something out there, something to consider. In prior 
years, there was extensive collaborative effort. I think 
actually we had better communication. There are a lot of moving 
parts here between State agencies, Federal agencies, and 
private groups.
    It was called the Greater Yellowstone Interagency 
Brucellosis Committee. It brought together a diverse group of 
stakeholders, including representatives from Montana, Idaho, 
Wyoming--obviously, this crosses borders--as well as USDA and 
the Interior. The working group improved communication and 
furthered efforts to provide sound science surrounding wildlife 
disease management throughout the Greater Yellowstone area.
    Unfortunately, this effort lapsed in 2006, 10 years ago, 
and no similar working group has filled that void. I have heard 
concerns in talking to farmers, ranchers, and stakeholders that 
the result has been a deterioration in communication between 
agencies, Federal, State, as well as private groups, regarding 
disease management in the Greater Yellowstone Ecosystem.
    So my question is, would the USDA be supportive of 
reestablishing that Greater Yellowstone Interagency Brucellosis 
Committee, or perhaps something similar?
    Secretary Vilsack. Senator, I appreciate you bringing this 
up. My understanding was that we were in the process of a 
focused, collaborative effort. But if that is not the case, I 
will certainly go back and ask our team to figure out a way in 
which we can be more collaborative as a working group or 
whatever it is.
    We have been trying to stress collaboration with the local 
folks at every level. So if that is not happening, we need to 
make it happen.

                     GENETICALLY MODIFIED ORGANISMS

    Senator Daines. I appreciate that, if that would be an 
outcome from this hearing. We could certainly have that 
communication and bring that concern and try to bring those 
groups together again. The word from back home is that it 
really was valuable.
    I want to shift gears now and talk a bit about what is 
going on in the area of GMOs and biotech. Last weekend, you 
were quoted at a commodities conference, referring to GMOs, 
stating, ``I am here to say unequivocally they are safe to 
consumers.''
    With that in mind and notwithstanding marketing efforts or 
the hurdles of getting legislation through Congress, which is a 
topic of discussion here as we sit here today, are there any 
safety concerns or any sound scientific research that would 
warrant the mandatory labeling of GMOs?
    Secretary Vilsack. No, but that is not obviously the issue. 
The issue is that folks in States have made decisions based on 
referendums and State legislators to create labeling systems 
that are applicable within State borders.
    That creates a circumstance and situation, as you know, 
where we are going to have a hodgepodge and chaotic 
circumstance were individual States and/or individual companies 
are going to make their own decision about what they are going 
to put on the package. It is going to create confusion. It is 
going to create additional expense. It may limit access to 
food, or it may increase the cost of food. It does not have to 
be.
    There is a way, in my view, where you can respect a 
consumer's right to know, if they have interest in knowing the 
production process by which their food has been produced, but 
doing it in a way that does not convey the wrong impression 
about the safety of the food.
    Senator Daines. So I guess getting to this issue of 
mandatory versus voluntary, I mean I think to be clear, a 
decision to implement mandatory labeling would then not be 
based on safety concerns or sound science, but on other 
factors?
    Secretary Vilsack. It would be based on balancing the 
desire on the part of a growing amount of consumers who want to 
know, and companies are in the business of selling to 
consumers--obviously, the customer is always right kind of 
thing--with doing it in a way that does not send the wrong 
message about the safety.
    In the past, we have labeled, we have put something on the 
package, either to talk about caloric content or nutrition or a 
known risk. That is not what this is about, which is why I have 
suggested the establishment of the smart label process, which 
would essentially give consumers who are interested information 
that they are interested in, but not in a way that conveys a 
false impression about the safety of the product.
    Senator Daines. I think we agree it is critical we address 
this issue in a timely manner, given what is going on in 
Vermont.
    Secretary Vilsack. Absolutely.
    Senator Daines. And I have no issue with the voluntary 
programs that meet market demands or consumer preferences.
    That being said, I do believe the USDA's priority should be 
with making determinations based on sound science regarding the 
safety of biotech products within its jurisdiction, not on 
marketing or mandatory labeling efforts that really have no 
bearing on food safety or plant pest risk.
    Secretary Vilsack. Well, I am trying to avoid a chaotic 
circumstance, Senator. I am certainly hopeful that there are at 
least 60 of you who feel the same way I do.
    Senator Daines. All right. Thank you.
    Senator Moran. We are pleased to have the Chairman of the 
Full Committee with this.
    Senator Cochran, you are recognized.

               OPENING STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, thank you.
    Thank you to the panel for being here and helping us sort 
through the requests we have for funding of various activities 
administered by the Department of Agriculture.
    One of the bright spots in what appeared to be some 
questions that all seemed to be having trouble being 
administered or costing too much or contributing to the deficit 
and all kinds of bad things, what we found out is that the 
Department of Agriculture has won a big victory in the labeling 
of domestically produced farm fish grown and sold in the United 
States.
    They were having to compete with fish from overseas that 
were mislabeled or suggested that they were superior in some 
ways to domestically produced fish.
    So thank you for the good, strong support and effort in 
defining the new limits and the new requirements that help to 
give customers and consumers an opportunity to choose. They are 
finding out that they are choosing to buy American, and that is 
encouraging in this day of real tough international competition 
in so many areas of agriculture and food production and 
marketing.
    The end of my speech.
    Senator Moran. Mr. Chairman, thank you for joining us.
    We now recognize the Senator from New Mexico.
    Senator Udall. Thank you very much, Chairman Moran.
    And thank you, Senator Vilsack, for your service.
    Secretary Vilsack. I am a Secretary. I am not a Senator.
    Senator Udall. Secretary. I understand. I understand, and 
you were a Governor before that. And you like to get things 
done, I know.
    Senator Moran. Would you like those words stricken from the 
record?
    [Laughter.]

                        STRIKE FORCE INITIATIVE

    Senator Udall. Secretary Vilsack, thank you very much for 
your service and thank you for being here. Just a couple things 
I wanted to ask your support on.
    The New Mexico delegation recently sent you a letter in 
support of the Navajo Promise Zone applications submitted by 
the Navajo Technical University and also submitted by the 
Navajo Nation for what is called a Tribal Promise Zone.
    It is an extremely high priority for me. Let me tell you 
why here.
    The Navajo Nation faces significant challenges, high 
poverty, lack of basic infrastructure, lack of housing, public 
safety deficiencies, among other things. The unemployment rate 
there is totally unacceptable. It is near 50 percent. And an 
equally large percentage of the population is below the poverty 
level.
    They have made steady progress on economic development in 
recent years, but they really needed a boost. I think this 
Promise Zone would really make a difference.
    As part of the President's efforts, this Promise Zone will 
help the Navajo Nation help tackle the issues outlined in their 
application, which I have talked a little bit about here.
    I simply urge you to give consideration to their request. I 
know there are many communities in need, but few face the 
extremely difficult conditions we see on the Navajo Nation.
    Secretary Vilsack. That is one of the reasons why we have 
already included that area in our StrikeForce Initiative at the 
USDA. But you are right, the Promise Zone would extend that 
kind of approach to all Federal agencies.
    I appreciate the comment, Senator, and I will take that 
back to the team.
    Senator Udall. Secretary Vilsack, could you tell me a 
little bit about the StrikeForce effort there?
    Secretary Vilsack. Sure. StrikeForce was designed to focus 
on the areas of persistent poverty in this country. The reality 
is 85 percent of persistently poor areas in this country are, 
in fact, in rural areas.
    What we found early in the Administration was that we were 
not doing enough work in those areas to get folks to understand 
how to basically apply for programs where they could get help.
    So we instructed our team, our FSA team, our nutrition 
team, our rural development teams, and our NRCS team, to go to 
communities across the country where there is persistent 
poverty and basically work with a community-building 
organization to identify projects and needs that we could 
address through USDA programs.
    It is now operating in 920 counties, 21 States, and several 
tribal areas. The result is that we have invested $26.3 billion 
in over 190,000 investments that have been made in the 
StrikeForce areas.
    I would imagine a significant percentage of those would 
never have been made but for the attention and intense work 
relationship that we have created.
    We are now working with over 1,500 community-building 
organizations and partners. It has been I think a successful 
endeavor.
    And I think that has led us to take a look at the Promise 
Zone and some place-based initiatives as well throughout the 
entire Federal Government.

                                COLONIAS

    Senator Udall. Thank you very much for that initiative, 
because I have many communities in my State that I think need 
that kind of initiative and kind of push that you are making 
there.
    This next issue is an issue that I raised last year, and it 
is yet to be resolved. Two communities in New Mexico, Chaparral 
and Sunland Park, our designated colonias. I think you are 
probably familiar with that term. It is on your USDA rural Web 
site. But it means neighborhoods or communities within 150 
miles of the United States-Mexico border that are economically 
distressed.
    They both have been designated colonias, and they are 
ineligible for some USDA rural development funds because of the 
USDA's formula for determining a rural community based on 
proximity to a municipality.
    In this case, because of their proximity to El Paso, Texas, 
even though they are in New Mexico, even though they do not 
benefit from any support or municipal services from a city or 
county like El Paso, which they are close to, and because they 
are not in the same State, these communities have high poverty 
rates, limited public sector funding, separated by over 40 
miles from Las Cruces, the nearest city.
    These communities need rural development funds for critical 
housing projects, economic development funding, infrastructure 
improvements. The area is seeing increasing traffic at the 
nearby Santa Teresa Port of Entry, which is positive, but 
really underscores the need for infrastructure.
    So waivers have been used for similar situations in the 
past, but we are experiencing difficulty with waivers in these 
cases. Would you work with me and within your authority to 
ensure that these two communities do not fall through the 
cracks and are made eligible for rural development assistance?
    Secretary Vilsack. Senator, as you were outlining your 
request, I turned to my staff to ask whether or not waivers 
were available, and we will certainly work with you and your 
team to figure out, if they are, how to use them, and if they 
are not, what else we could potentially do to provide--because 
colonias is part of our StrikeForce Initiative. So we obviously 
are cognizant of the challenges of that particular area, so we 
will be happy to try to find a creative solution to the problem 
they are facing there.
    Senator Udall. Thank you very much. I could not think of a 
better person to be Secretary of Agriculture because you served 
as Governor from a rural State. You know rural communities and 
how they are struggling. I sure appreciate this effort in terms 
of the StrikeForce and look forward to working with you. Thank 
you very much.
    I yield back, Mr. Chairman.
    Senator Moran. You had no time to yield back, but thank you 
for the effort.
    The Senator from North Dakota.

                       FARM PROGRAMS SURVEY DATA

    Senator Hoeven. Thank you, Mr. Chairman.
    Good to see you, Mr. Secretary. Thank you for your work on 
behalf of our farmers and ranchers. As you know, we want to 
make the farm bill as farmer-friendly as possible.
    That is particularly important right now with low commodity 
prices. We are seeing real stress out there in the ag world on 
the part of our farmers and ranchers with these low commodity 
prices.
    One area that we can help in terms of making sure that the 
farm bill is farmer-friendly is with the National Agricultural 
Statistics Service (NASS) data. I think that you are already 
working on this with your FSA Administrator Val Dolcini.
    But in some cases, that NASS data, because there are not 
enough survey forms sent in for some counties, we are getting a 
bad result.
    It is not unique to North Dakota. It is occurring in other 
States as well. I believe in Iowa, and I do not know about 
Kansas, but a number of States. We have counties, and there are 
not enough of the survey forms that come back and so the NASS 
information is not used. Instead, we are using Risk Management 
Agency (RMA) information. And we are getting a bad result.
    What I mean by that is if you take counties, for example, 
in North Dakota, Logan and Lamoure, and you compare them to 
similar counties in terms of the average for corn, for example, 
for the year. If we do not have enough NASS data, we use the 
RMA data, and we are getting a result that does not correlate 
with like counties. So other counties that typically have about 
the same yield, those farmers get an ARC payment. But because 
the RMA data is so high, it is disqualifying farmers in Logan 
and Lamoure counties, for example, from getting in an ARC 
payment on corn.
    That is one example. There are other examples around the 
country.
    So we have asked Val Dolcini at FSA to allow us to work 
with the FSA Director in the respective State and use 
comparable counties that have adequate NASS data, so we do not 
get a skewed result. It is very important to farmers, 
particularly with low commodity prices.
    So what can you tell me in terms of your willingness to 
provide this flexibility? I know you are doing an interagency 
analysis or study, I think is the term for it. But what can you 
do to help here, Secretary, so we can get this fixed?
    Secretary Vilsack. Well, as you know, Congress made the 
decision to do a county program as opposed to an individual 
program. I think they probably did that because of the cost of 
the individual program and the need to generate savings in the 
overall program. So we obviously have to deal with the county 
program, and we have to have some kind of process by which we 
can try to treat as many of the several thousand counties that 
we are dealing with as fairly and equitably as we can.
    So we have come up with a proposal, the outline that you 
have addressed, which we have looked at NASS data first. If 
there are inadequate numbers of surveys, we ought to focus on 
making sure we get farmers to respond to those surveys, so we 
have adequate information.
    If we do not, we go to RMA information. If we are not 
satisfied that that is appropriate or correct, we have 
empowered our State Committees to basically take a look and 
provide some direction.
    So we think we have some degree of predictability and 
consistency without necessarily creating a circumstance where 
we cannot address the anomaly or the inaccuracy of information.
    I am more than happy to go back to our team and basically 
make sure that we are in a position to be able to explain why 
we are making the decisions we are making. If we cannot, then 
we obviously need to do something different.
    Senator Hoeven. My understanding is it is currently in this 
interagency review. I do not know what the results of that are.
    If, in fact, the State Committee is empowered to make a 
decision, I think that is where we need to go. Again, it is 
making sure you are giving discretion out there in the field to 
your directors to make a good decision.
    Secretary Vilsack. That is the key, a good decision. We do 
not necessarily want to create a circumstance where everybody 
is not happy with whatever it is they ultimately get, because 
then you create a very confusing circumstance and you end up 
getting an individual program when you really, by statute, are 
directed to have a county program.
    So I think there is a balance here. I am more than happy to 
try to be flexible, but I think we do have to have some system.
    Senator Hoeven. I hear you. Of course, we want the NASS 
survey forms to come in, so you have adequate data and you have 
good data. But where that has not occurred, just so that that 
State Committee or FSA Director, however you decide you want to 
do it, is empowered to say, okay, this is a nonsensical result. 
We will make an adjustment.
    My question is, I do not think we have gotten that response 
back from FSA. They are still doing this interagency review. 
This has been going on since November. I am asking for your 
help to get an answer.
    Secretary Vilsack. You deserve an answer, Senator. We will 
try to get you one quickly.
    Senator Hoeven. All right, thank you very much, Secretary.

                         CROP INSURANCE PROGRAM

    The other thing I will just mention, if you have any 
reaction, that is great. I am very concerned about any 
reductions to the support for crop insurance. That is the 
number one risk-management tool for our farmers. You are 
probably not surprised to hear me say that because you and I 
have had this discussion before.
    But I am very concerned about that and I am going to make 
sure we do everything we can to support crop insurance. In 
fact, we included language in the farm bill to make sure that 
did happen.
    On the positive side, though, I appreciate the support that 
you have provided for Agricultural Research Service, ARS, and 
for NIFA, National Institute of Food and Agriculture. I think 
that research area is incredibly important, incredibly 
impactful for our farmers and ranchers. So if you have some 
thoughts there, I would welcome them.
    Secretary Vilsack. Just briefly on the crop insurance, 
there are two areas. One is on the prevented planning. Our 
Inspector General, and I think the Government Accountability 
Office, have been critical of the way in which that program 
operates. So I think it is appropriate for us to be responsive 
to those criticisms. What we have proposed in the budget is our 
effort at being responsive.
    On the price harvest loss option, where we are proposing a 
slightly different arrangement between the producer, the 
government, and the insurance company, where we are currently 
financing 62 percent of the premium, we think it is probably 
fair to taxpayers that it be more of a 50/50 partnership. Those 
are the two proposals.
    Senator Hoeven. I would point out that since 2008, $12 
billion has been taken out of crop insurance support. And you 
want a robust number of companies out there providing crop 
insurance to have a competitive market, and we have to be 
careful or you are not going to have enough competition out 
there to have a robust market.
    Secretary Vilsack. That is true. Our projections I think 
for return on investment with this budget is 18 percent.
    Senator Hoeven. For which they have to cover all of their 
costs.
    Secretary Vilsack. Well, not all their costs, because there 
is also an additional resource for administrative and operating 
costs.
    Senator Hoeven. Right. But again, at the end of the day, if 
they cannot make enough money to continue to stay in that 
business and to cover costs, you are going to have fewer and 
fewer agencies. You are not going to have a robust insurance 
group out there providing crop coverage.
    Secretary Vilsack. I am not sure either one of these two 
proposals necessarily impacts the issue that you have raised, 
but I am certainly sensitive to the fact. That is why we are 
continuing look at the return on investment. We had a couple of 
years where it was difficult, but we are beginning to see more 
profitability in that part of the operation. I think it was 15 
percent or 13 percent last year, 18 percent projected for this 
year.
    Senator Hoeven. Again, I appreciate that. I understand your 
point of view, though I do not agree with it.
    I do want to again emphasize that crop insurance support 
has been reduced by $12 billion since 2008. I think there are a 
lot of programs across the Federal Government that have not 
contributed as much in terms of help with finding savings as 
crop insurance.
    Secretary Vilsack. You do not have to tell me about 
reductions, Senator. My overall operating budget is less than 
it was in 2010.
    Senator Hoeven. Secretary, again, thanks for what you do. 
Thanks for your willingness to take a look at the NASS data. I 
appreciate it.
    Senator Moran. Senator Merkley.

                        RURAL BROADBAND PROGRAM

    Senator Merkley. Thank you, Mr. Chairman.
    I thought I would turn to a piece of the picture that I 
hear about a lot that has not been mentioned yet, and that is 
rural broadband. Everywhere I go in Oregon, folks note the 
importance of it to the success of their rural communities.
    So I wanted to explore this a little bit, because, as I 
understand it, USDA recently rewrote the broadband loan program 
regulations to reflect the changes in the 2014 Farm Bill. It 
really has just kind of gotten going, but I believe you are now 
proposing eliminating this.
    Meanwhile, the grant program, which has increased, is a 
distinctly different program. The grant program serves a small 
number of poor, unconnected communities. The number of 
communities it focused on in fiscal year 2015 was five 
communities.
    So I think there is concern that there is going to be a 
sacrifice of a program that serves large expanses for assisting 
a small number of communities, and whether or not that really 
reflects the demand for rural broadband. There is probably a 
lot more thinking behind it. I thought I would just give you a 
chance to explain it.
    Secretary Vilsack. Senator, I appreciate the question. What 
we have found is that it is not impossible for companies to 
secure loans. But to the extent that they can get grant funds 
that either reduce the amount they have to borrow or to reduce 
the interest rate on the loan, that makes it much more likely 
that they are in a position to do significant improvements and 
expansions.
    So listening to what we believe the industry is telling us 
is necessary to get more broadband in more places, combining 
that with hopefully with what the FCC is attempting to do and 
hoping it works properly to create more incentive and more 
resource for expansion of broadband, the combination of those 
two.
    So that is why we are proposing an increase in the grant 
program, because we think that will generate more activity than 
simply a loan program.
    Senator Merkley. Thank you for that explanation. I look 
forward to tracking that because it is of so much importance.
    My colleague from Wisconsin has arrived, and I am going to 
turn this over to her. Just in closing out my comments, thank 
you again for your service over 7-plus years and counting. 
There are many more questions I have that I will be submitting 
to you for the record, but I do not need to address them at 
this point. Thank you.
    Senator Moran. The Senator from Wisconsin.
    My intention is to have the Senator from Wisconsin ask her 
questions. I have a few follow-up questions, and then we would 
anticipate concluding the hearing.

                WATER AND WASTE WATER TREATMENT PROGRAM

    Senator Baldwin. I thank the Chair.
    Mr. Secretary, in Wisconsin, water issues are on everyone's 
mind, as our rural communities are facing many challenges to 
protect their water quality.
    In particular, Kewaunee and Door Counties in Wisconsin's 
northeastern region have nitrate and bacteria contamination in 
their groundwater. Testing is showing that more and more 
private wells are contaminated.
    Local stakeholder groups are working with the State 
Department of Natural Resources (DNR) to talk about long-term 
solutions. But as those deliberations continue, rural families 
remain without immediate solutions to these very pressing 
concerns and the obvious need for safe drinking water.
    Mr. Secretary, I believe your Department can help, but it 
is going to take some really, really hard work. So I would ask 
you how you see the USDA playing a role in these communities in 
Wisconsin, and would you commit to working with me and the 
local communities to offer both immediate and long-term 
solutions that help watersheds in this vital region of our 
State and our country?
    Secretary Vilsack. Senator, do you know offhand what the 
population is of those two communities? Is it greater than 
10,000 or less than 10,000?
    Senator Baldwin. Both counties I believe would be greater, 
but they might be close. They are sparsely populated.
    Secretary Vilsack. Well, the first line of response to your 
question is, to the extent that the infrastructure that treats 
water can be modernized, obviously, the USDA has our water and 
wastewater treatment programs that are available.
    We also have a partnership with CoBank and other farm 
credit agencies that are providing infrastructure loans that 
USDA cannot do or will not do or does not have enough resources 
to do. It is leveraging our resources.
    We have had a series of partnerships with the farm credit 
system where we will fund half a project and the CoBank will 
fund the other half. They made a $10 billion commitment to 
infrastructure in rural areas across the United States.
    The third alternative, on this side of the equation, is to 
work with us to identify potentially private sector investors 
who might be willing to provide the financing to improve the 
systems.
    So those are three basic avenues of financing 
infrastructure. We will be more than happy to work with you and 
have our rural development people work with those two counties 
in those two areas.
    You asked for a short- and long-term solution. Obviously, 
long-term is to try to work with conservation programs to try 
to prevent the problem from getting worse and ultimately 
reversing it.
    Actually, Wisconsin has a number of communities like Green 
Bay that are working with the Fox River that are trying to 
create ecosystem markets where essentially regulated industries 
would be able to pay farmers for conservation that would allow 
them to satisfy a particular ecosystem regulation, or there may 
be a corporate entity that is looking from a social 
responsibility perspective.
    We just did an event with Chevrolet on carbon credits, for 
example, in North Dakota, a working ranch in North Dakota.
    So we are trying to create more ecosystem market 
opportunities in Wisconsin. That requires us to be able to 
measure and verify and quantify the conservation results. If 
you can do that, and I would encourage those folks to consider 
a Conservation Innovation Grant, a CIG grant, which we have 
used in the past to help create a measurement and certification 
and qualification system.
    Let me just give one other piece of this. There is also the 
regular Natural Resources Conservation Service (NRCS) programs 
and the Conservation Reserve Program (CRP). There is a 
continuous program that potentially could be used to develop 
bioreactors in those conservation programs that would allow for 
better filtering of contaminants, nitrates and so forth.
    So there is a body of steps that can be taken short term 
and long term to try to address this.
    Senator Baldwin. I appreciate that, and there has been, as 
I was mentioning, a good local collaboration not only with our 
State DNR but I know a real interest in these collaborations on 
long-term solutions at the Federal level.
    I will just restate that many of the residents impacted 
have private wells. They, therefore, have an immediate need for 
clean drinking water. So I hope we can follow up this exchange 
with ways in which the USDA can help meet those very important 
and immediate needs.
    Secretary Vilsack. What we were able to do in a slightly 
different situation in California where it was drought and they 
had private wells, but they just did not have any water in the 
well, we were able to take a look at whether they were 
adjoining an area of municipal systems that could potentially 
be extended to those private homes that were serviced by a 
private well.
    So I do not know if that is possible at all in what you are 
talking about, but that is something.

                      CLASSICAL BREEDING RESEARCH

    Senator Baldwin. I appreciate your commitment to work with 
me and local communities, and we will certainly follow up.
    I did have one other question that I wanted to address to 
you, Mr. Secretary. In addition to being America's dairyland, 
Wisconsin also produces a lot of specialty crops, and we have a 
very vibrant and rapidly growing organic sector, second only to 
the State of California in the number of organic farms within 
our State.
    The specialty crops and organic farmers have a great need 
for new varieties and breeds that are adapted regionally and 
respond to market demands that can help them grow their 
markets, so-called seeds and breeds.
    In response to this Subcommittee's work last year and 
direction in the fiscal year 2016 spending bill, I know that 
the USDA is producing a report on classical breeding 
investments, but this committee also directed the agency to 
create a specific competition for classical breeding so that 
proposals for this specific type of research compete against 
each other and not against other different research fields.
    So we have yet to see progress on that particular front. 
For Wisconsin farmers, it is not about the academic 
competition. It is about having the varieties that they need 
right on the farm to help them make it through tough years.
    So I hope that you will commit to resolving this issue this 
year, and pushing forward with that specific competition for 
classical breeding research.
    Secretary Vilsack. I will certainly take a look at that. I 
will tell you that there is an intent and interest in this 
area. We are investing a bit more time and energy in it.
    We are also making sure that our own seed banks are 
available, in the event there is a situation where we do not 
have seed in the past. So it is a combination of preserving the 
past and also preparing for new varieties.
    I said earlier that our research has already created, over 
the time I have been Secretary, 714 different plant varieties, 
so we are involved and engaged in this. I think there is a good 
balance between where we have genomic information, using that, 
where we do not, using the classical breeding. So it is a 
combination and balance.

                         AGRICULTURAL RESEARCH

    Senator Baldwin. I thank the Chairman and Ranking Member 
for their leniency in watching the clock.
    Senator Moran. Thank you, Senator Baldwin, for joining us 
today, and thank you for your questions of the Secretary.
    Mr. Secretary, let me editorialize just for a moment.
    In regard to agriculture research, our fiscal year 2016 
agriculture appropriation bill provided $350 million for the 
Agriculture and Food Research Initiative (AFRI), a $25 million 
increase. That is the highest funding level this program has 
received since its inception. We worked hard under the 
allocation that we had to provide additional support for 
agriculture research. You mentioned its importance, as have a 
number of my colleagues.
    My editorial comment is that we cannot compete with the 
Administration's budget when they use mandatory spending as the 
solution to funding this and many other programs, not just in 
your budget but across the Federal Government, Federal 
Government-wide.
    Again, this is a budgetary issue beyond your scope, but it 
is important that the Administration recognize that when they 
make a budget request to us as appropriators, we do not have 
the ability to provide funding with mandatory spending. I think 
they know that. It sets a bar. Perhaps it is just posturing to 
suggest that the Administration, your Department is more 
interested in agricultural funding than we are. But when we 
come to the amount of money that we have within our 
jurisdiction to provide support for agriculture research, in my 
view, we have been there.

                              CUBA OFFICE

    You have been kind enough to attempt to include me in a 
visit to Cuba. I appreciate that invitation. I have been a 
longtime advocate for lifting the embargo, particularly as it 
relates to food, medicine, and agriculture commodities to Cuba. 
I had some success in that regard when I was a member of the 
House of Representatives.
    Your budget includes some funding for changes that may 
occur in our relationship or is occurring in our relationship 
with Cuba. What is the circumstance by which you ask for 
dollars for agricultural representation in Cuba?
    And secondly, knowing that the appropriations process in 
which you are asking for this money to be included, that may be 
a controversial request, I am not certain. But even if it is 
not, this process takes a long time. So what is USDA doing in 
Cuba today to help assist in the export, sale of agriculture 
commodities.
    Secretary Vilsack. Senator, the embargo statute basically 
prohibits the Department of Agriculture from using any of its 
market assistance programming money, so we cannot directly help 
promote, as we do in other countries. That is one of the 
reasons why we need to get rid of the embargo.
    But even if we get rid of the embargo tomorrow, we would 
not necessarily be prepared to do everything we are potentially 
able to do in Cuba, in terms of regaining market share that we 
have lost over the years because we do not have the 
relationships and people on the ground to basically know the 
people that we need to know on the Cuban side to be able to 
effectuate more trade. That is the reason why we have asked for 
personnel to be down in Cuba, to be permanently located down 
there, so they can create the relationships so that when the 
embargo is in fact lifted and we can use promotion resources, 
that we are in a position to move expeditiously to take full 
advantage.
    Senator Moran. I do not know off the top my head the amount 
of dollars you have requested.
    Secretary Vilsack. I think it is $1.5 million for five or 
six people.
    Senator Moran. I think that is right. So the point you are 
making is that is not to assist directly in support 
subsidization of any sale to Cuba or to any marketing program.
    Secretary Vilsack. Correct.
    Senator Moran. It is directly related to the ability to 
have USDA personnel in Cuba, developing relationships with 
potential customers.
    Secretary Vilsack. And also to do an evaluation of the 
pests and diseases that we may potentially confront when our 
relationship becomes more bilateral.
    The second piece of this is that there are commodity groups 
that are quite interested in doing business down there, because 
they realize that we have a competitive advantage that we have 
not taken full advantage of. They are asking us to explore ways 
in which they themselves, apart from what we cannot do, can 
they be more aggressive in their promotion efforts.
    We are looking for ways we can find--a way for them to be 
more aggressive, so that without necessarily direct support 
from USDA, commodity groups, State ag commissioners, State ag 
secretaries, individual farm groups will be able to promote 
product.
    Senator Moran. Mr. Secretary, in that regard, my 
understanding of the current state of the law in regard to Cuba 
is that we can sell agriculture commodities, food, and medicine 
to Cuba for cash.
    Secretary Vilsack. It is harder, but we can.
    Senator Moran. So commodity groups could promote those 
sales today. Is that true?
    Secretary Vilsack. Yes. The question is whether or not any 
of the resources, the check off dollars, for example, could 
potentially be used by those commodity groups. We are in the 
process of trying to figure out the answer to that question. We 
do not want to unnecessarily create a circumstance where we are 
violating the law. We want to make sure we understand the law.
    But this is a tremendous opportunity for us. It is just 
nuts that we do not have more of a market share than we do down 
there.
    Senator Moran. Dr. Johansson, in his commentary to us, in 
his conversation with us last week, indicated significant 
opportunities and compared it to the Dominican Republic, as I 
recall.
    Secretary Vilsack. Eighty percent of Cuban food is 
imported, 80 percent. And I think we do 10 percent, 15 percent 
of their needs today. We should be doing 50 percent.

                        BROADBAND OPPORTUNITIES

    Senator Moran. We have seen significant improvements in the 
opportunity to sell. I think it was 2010, maybe 2011, the law 
was changed to allow the sales. And regulations were altered 
about that point in time, money had to be received upfront, 
whether it was when the ship left the United States or when it 
arrived in Havana. Then the third-party financing issues.
    But those are regulatory issues that perhaps will be 
addressed. But this issue of Cuba will be one of broad interest 
in Congress. It has its opponents, which I discovered in my 
time working on this issue.
    Let me return to a topic that we visited about last year in 
this same setting. I encouraged you, and you indicated that you 
do and would, continue your conversations with the Federal 
Communications Commission. I have expressed an ongoing concern 
about the ability for particularly rural telephone companies to 
be able to repay loans they owe the Rural Utilities Services 
(RUS) based upon decisions that the FCC has and is continuing 
to make.
    I would again highlight this issue for you in the sense 
that it is important I assume to you that we allow those 
companies to expand broadband opportunities in rural America, 
but also you may have a default rate of significant magnitude 
if the FCC makes decisions, particularly as it relates to the 
Universal Service Fund that would have consequences to a 
telephone company, a broadband provider, let me be broader than 
that, a broadband provider's ability to repay RUS.
    Secretary Vilsack. We are cognizant of that. I can assure 
you that we indicate to FCC concern in that space. So we are 
keeping an eye on it. We have advised them of your concerns and 
of our concern.
    Senator Moran. On the same topic of broadband, I am an 
advocate, obviously, for expansion of those opportunities in 
places that are unserved. I have worried from time to time that 
various programs, perhaps more related to the Stimulus package 
than the programs under your Department, have provided loans 
and subsidization for companies to compete in already existing 
territory in which broadband services exist.
    Could you tell me the current state of at least your 
programs, those that you are responsible for, and their ability 
to obtain support from your Department to compete with existing 
broadband providers?
    Secretary Vilsack. Yes. We do not have unlimited resources, 
so we have to make sure that they do the job. We are mostly 
focused on unserved and underserved areas. I do not believe we 
are creating circumstances where we are encouraging competition 
here. We are trying to meet an unmet need.
    Senator Moran. You used a few words there that cause me to 
ask you to confirm that to me.
    Secretary Vilsack. Sure. I am not trying to be evasive 
here. I am reasonably certain that our focus is on unserved and 
underserved areas. It is not based on places where there is 
already service.
    Now, I would say that we may be in a situation where we are 
trying to upgrade the service that is being provided, so that 
download speeds and upload speeds are increased. I do not think 
that falls within the scope of your question, because it is not 
competition. It is about working with an existing operation to 
improve their service.
    Senator Moran. I know of circumstances in which loans or 
grants were made to provide service to areas that had no 
service. But in order to make that financially possible, the 
territory in which the loan could be used included areas that 
already had service. So areas that already had service got 
competition. They were larger communities, and I assume the 
theory was that revenue generated in that larger area makes it 
economically more viable for service to be provided in places 
that are much smaller that have no service.
    But my view is that the government program is the subsidy, 
not creating additional service in places that are already 
served, and taking the revenue that is generated there to 
support areas that do not have service.
    Secretary Vilsack. You deserve a more detailed answer. We 
will make sure you get it.
    [The information follows:]

    The Farm Bill Broadband Loan Program funds broadband facilities in 
rural service territories with at least 15 percent unserved 
households,as per statute in Title VI of the Agricultural Act of 2014 
(Public Law 113-79, Section 6104 2(B)i). A household is considered 
unserved if it is not receiving broadband service as defined in the 
latest Notice of Funding Available (NOFA). The program offers 
incentives for loan applicants to go into areas with at least 50 
percent unserved households. Areas with three existing broadband 
service providers are not eligible for funding. Applications that are 
proposing to provide service at the Broadband Lending Speed as defined 
in the NOFA will receive priority consideration for funding.

                         MCGOVERN DOLE PROGRAM

    Senator Moran. I appreciate that. I am almost done, Mr. 
Secretary.
    Food aid, and particularly the McGovern-Dole--in Kansas, we 
would say the Dole-McGovern program. You are proposing 
reductions in the spending in that area.
    If we agree with your position, your budget request, how 
would USDA absorb those cuts? Are there ongoing programs that 
would be affected? Do you have countries that you would 
specifically exclude from the program? So if there is less 
money, how would you spend the money that you would have 
remaining?
    Secretary Vilsack. As you well know, the Dole-McGovern, 
McGovern-Dole program is designed not to be a permanent level 
of support for countries, but it is designed to show the wisdom 
of basically linking education and food with the hope that the 
host country would eventually take over that responsibility. So 
there very well may be countries where we have been active and 
involved in providing assistance for an extended period of 
time, but which we think it is time for them to basically pick 
up the mantle, if you will. That may be a consequence.
    So it may be that there is not a circumstance where we are 
necessarily going to cut off or cut out people who are 
currently receiving service or assistance without some 
substitute from the host country.
    The other possibility is that we are proposing to use a 
small portion of McGovern-Dole for local purchases, which may 
potentially leverage those dollars more effectively as well.
    So I would be more than happy to give you a more detailed 
response to that question, but it does point out the challenge. 
Whenever we have conversations about budgets, we always focus 
on individual programs. But the reality is your circumstance 
and our circumstance in putting a budget together, it is all 
about choices.
    If we did not have a finite number that we had to deal 
with, if we could fix the fire budget, it creates more 
flexibility in our budget.

                         FOREST FIRE BORROWING

    Senator Moran. Is there another opportunity you would like 
to say that, Mr. Secretary?
    Secretary Vilsack. Yes. To be very, very candid, Mr. 
Chairman, this is one area that has frustrated me more than any 
since I have been Secretary, because everybody--everybody--
knows this is a problem.
    The reason I feel so strongly about this is last year 
during our award ceremony, I had to give out seven American 
flags to family members who lost loved ones in forest fires. 
The reason why some of them were lost was because we have not 
been able to do the job that we need to do in restoring and 
making our forests more resilient because every year we borrow 
money from those very accounts to put fires out.
    To me, a fire is no doggone different than a flood or 
tornado or hurricane, where we fund not out of an operating 
budget, but out of an emergency budget.
    If we could just create a circumstance where those large, 
uncontrolled, very expensive fires could be dealt with, it 
would create more flexibility within this budget, and many of 
the concerns that you all have addressed here, which we share, 
could potentially be more adequately addressed.

                 NATIONAL BIO AND AGRO-DEFENSE FACILITY

    Senator Moran. Thank you for your passion and for your 
compassion.
    Mr. Secretary, I appreciate you being in Manhattan, Kansas, 
when we cut a ribbon on the National Bio and Agro science 
facility. Thank you very much, soon to be a Department of 
Agriculture operation.
    I just would highlight, as transition occurs from Plum 
Island to the National Bio and Agro-Defense Facility (NBAF), my 
impression is that there may be USDA employees who do not 
relocate. We want to work with you to make certain that the 
training and recruitment, retention opportunities exist at USDA 
to make certain that when the day comes that you are fully 
staffed with the highly capable and significant expertise in 
this important issue of protecting our homeland.
    Secretary Vilsack. Well, that is certainly an appropriate 
request, Mr. Chairman. Thank you.

            NEW, BEGINNING, AND VETERAN FARMERS AND RANCHERS

    Senator Moran. Finally, your budget proposes a $5 million 
increase in the Office of the Secretary. This sounds like a 
difficult question, but it is for something that I find very 
appealing, for new, beginning, women, and Veteran farmers. I am 
not certain how you intend to utilize those dollars, but I 
would highlight for you that our Subcommittee intends to have a 
hearing in the next several weeks on this topic of how to bring 
veterans into agriculture.
    Secretary Vilsack. We have finally, after a good deal of 
effort, secured commitments from the Department of Defense to 
begin the process of going on base. As service men and women 
are leaving the service, they receive a series of briefings on 
opportunities. In the past, agriculture has not been part of 
that process. Now we are getting permission to be part of that 
process.
    We want to be able to provide those veterans with the 
opportunity to know how they might be able to access a chance 
to be a farmer.
    If you go on our Web site, probably the most popular aspect 
of our Web site in the last 6 months has been are Beginning 
Farmer Web site that we revamped. You can actually go in now 
and you can plug in your wish list of what kind of farmer you 
would like to be, what you would like to grow, how big you 
would like to be. It will give you essentially a personalized 
plan for the programs within USDA that can provide help and 
assistance, whether it is a microloan, conservation, help with 
crop insurance, whatever it might be.
    We think the combination of more education of those 
returning veterans about opportunities that do, in fact, exist 
within agriculture, the greater the interest will be.
    So to the extent that we can sort of spread our tentacles 
in a much wider base than we have in the past, I think that 
will be helpful.
    We also know that 70 percent of the world's farmers are 
women, and there is an increasingly greater interest among 
women in this country to participate. Again, it requires 
outreach. It requires a little time. It requires access to 
information and providing an easy way for people to get 
information.
    So that is the purpose of this. The Deputy, Secretary 
Krysta Harden, who is no longer with the agency, was a great 
proponent of this. I think her work has been very successful.
    If you look at the recent census, you are going to see an 
increase in women farmers. You are going to see an increase in 
farmers of color. And you are also going to see an increased 
interest in working with other veterans' groups to see bring 
veterans into the farming business.
    Senator Moran. Mr. Secretary, I applaud those efforts. We 
have seen a number of just individuals--Gary LaGrange, who is 
retired military in my hometown, has created opportunities for 
veterans returning with traumatic injuries to enter farming, in 
this case, beekeeping, in a very successful way.
    Incidentally, legislation that I have introduced has passed 
the Small Business Committee to create an opportunity for 
veterans to use their G.I. Bill. I welcome my colleagues who 
are still here to join us in this effort, to use their G.I. 
Bill to get education, training vocationally to become farmers, 
or other business men and women to become entrepreneurs, which 
farming is.
    So we look forward to working with the Department to 
accomplish that.
    I would be less than polite if I did not give my colleagues 
a chance--I hope they say no--but does anybody have anything to 
follow up before I conclude the hearing?
    Senator Merkley.

                         FOREST FIRE BORROWING

    Senator Merkley. Thank you, Mr. Chair.
    Since you offered, I just wanted to address the fire 
borrowing. Senator Wyden and I have been working with Senator 
Murkowski and have been chief advocates of ending fire 
borrowing. We worked very hard to persuade the Administration 
to back this plan. The Administration backed it. Thank you.
    It is not in this Subcommittee's jurisdiction, but it is 
absolutely important. I hope every meeting you go into, you 
will be talking about it.
    We did make a significant change last year. That is that 
the firefighting was funded at 100 percent of the previous 10-
year average, plus a $600 million buffer. Given the impact of 
the Pacific blob and its change in precipitation in the forests 
of the Northwest, there is a chance that there will be no fire 
borrowing this year. We will wait and see. We will see what the 
summer looks like.
    But you are absolutely right. I will just put a huge 
exclamation point. The mega-fires, the large fires, should be 
treated as the natural disasters they are. We have constantly 
robbed fire health and hazardous fuel buildup on the floor of 
the forests, we have constantly robbed that to pay for fighting 
fires. People say, why do you always go to the backend when it 
is at the point of disaster, rather than treat the forest right 
on the front end?
    So thank you for your advocacy on it. Please continue in 
every possible setting. All of us from the Northwest who suffer 
these terrible fires are grateful.
    Secretary Vilsack. Senator, I appreciate those comments. I 
just want to underscore, I am not going to authorize transfers.
    Senator Merkley. Oh, yes, not from this committee to 
another. But that is not the point. Yes, I understand. You are 
saying you are going to block----
    Secretary Vilsack. I am not going to authorize it because 
basically that takes everybody off the hook.
    Senator Merkley. Well, I think that should focus a lot of 
minds here on Capitol Hill.
    Secretary Vilsack. I hope so.
    Senator Merkley. Thank you.
    Senator Moran. Senator Baldwin.
    Senator Baldwin. Thank you. At the risk of not saying no to 
your offer, I want to also add my words of agreement with 
tackling the fire borrowing issue.
    Certainly, Wisconsin is not a State where we have many 
forest fires, but we have a significant part of our Northwoods 
with a very active timber industry and small businesses 
dependent upon sustainable management of our forests. I feel 
like we absolutely must tackle this.
    I just want to say, not only to the Secretary, but to the 
Chair and Ranking Member, how pleased I am to be on the 
Subcommittee, and how much I look forward to working on a 
number of issues with you over this appropriations season. I 
wanted to just call attention to two that I did not have a 
chance to refer to during my question period, which is 
promoting agricultural innovation through the Value-Added 
Producer Grant program, and everything we can do to help new 
producers get their start with the Beginning Farmer programs, 
in addition to the ones the chairman and the Secretary just 
discussed. I am a big fan and look forward to working with all 
of you on that.

                CLOSING STATEMENT OF SENATOR JERRY MORAN

    Senator Moran. Senator Baldwin, we appreciate your 
participation and presence on the Subcommittee. We look forward 
to working with you on that and other issues.
    Senator Merkley, thank you very much for your kindness and 
the working relationship that we have.
    Mr. Secretary, you have been complimented by members of 
this Subcommittee on both sides of the aisle. I would add my 
compliments to you. This is the only the second year that I 
have chaired this Subcommittee, so while I have been on it, 
this is the time I have had the most opportunity to get 
acquainted with you, mostly in this setting.
    What I would say is that I am impressed, pleased, about the 
level of your knowledge, the amount of detail that you know. 
There is something perhaps to what Senator Blunt said about 
experience, 7 years. I guess I should not assume this is your 
last opportunity to appear in a budget hearing before this 
Subcommittee. Perhaps it is. But I would like to thank you for 
being a Secretary who apparently, seemingly, knows what is 
going on to a large extent at the Department that you head. 
That is pleasing to me.
    We are going to try to do everything that I can do to 
become comparable in level of knowledge as a member of this 
Appropriations Committee, so that I can have a full and 
complete understanding as best as possible on the details of 
what goes on at USDA, and, in our case, the Food and Drug 
Administration (FDA). I want to be knowledgeable as well and 
look forward to developing greater expertise as you have 
developed over the last 7 years. I thank you for your public 
service.
    Secretary Vilsack. Mr. Chairman, thank you very much. It 
has been an honor to appear before this Subcommittee.
    I really feel blessed that I get to work with incredibly 
dedicated people at USDA. We all work for just an amazing group 
of people who live, work, and raise their families in rural 
areas who do so much for this country and oftentimes what they 
do is underappreciated or not appreciated at all. So I 
appreciate this privilege that I have, and I consider it a deep 
honor. Thank you.
    Senator Moran. Mr. Secretary, thank you very much.
    I will not diminish what you just said by sounding very 
formal now, but I have magic words I must say.
    For Members of the Subcommittee, any question that you 
would like to submit for the hearing record should be turned 
into Subcommittee staff within 1 week, which is Wednesday, 
March 16. We would appreciate it if you would have responses 
back from USDA within 4 weeks of that time.

                          SUBCOMMITTEE RECESS

    Senator Moran. I thank the gentlemen who accompanied you 
today, and I believe that concludes our hearing.
    Thank you.
    [Whereupon, at 3:45 p.m., Wednesday, March 9, the 
subcommittee was recessed, to reconvene subject to the call of 
the chair.]
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