[House Hearing, 105 Congress] [From the U.S. Government Publishing Office]AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 1998 ======================================================================== HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FIFTH CONGRESS FIRST SESSION ________ SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES JOE SKEEN, New Mexico, Chairman JAMES T. WALSH, New York MARCY KAPTUR, Ohio JAY DICKEY, Arkansas VIC FAZIO, California JACK KINGSTON, Georgia JOSE E. SERRANO, New York GEORGE R. NETHERCUTT, Jr., Washington ROSA L. DeLAURO, Connecticut HENRY BONILLA, Texas TOM LATHAM, Iowa NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees. Timothy K. Sanders, Carol Murphy, John J. Ziolkowski, and Joanne L. Orndorff, Staff Assistants ________ PART 7 TESTIMONY OF MEMBERS OF CONGRESS AND OTHER INTERESTED INDIVIDUALS AND ORGANIZATIONS ________ Printed for the use of the Committee on Appropriations ________ U.S. GOVERNMENT PRINTING OFFICE 40-074 O WASHINGTON : 1997 ------------------------------------------------------------------------ For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 COMMITTEE ON APPROPRIATIONS BOB LIVINGSTON, Louisiana, Chairman JOSEPH M. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin C. W. BILL YOUNG, Florida SIDNEY R. YATES, Illinois RALPH REGULA, Ohio LOUIS STOKES, Ohio JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania JOHN EDWARD PORTER, Illinois NORMAN D. DICKS, Washington HAROLD ROGERS, Kentucky MARTIN OLAV SABO, Minnesota JOE SKEEN, New Mexico JULIAN C. DIXON, California FRANK R. WOLF, Virginia VIC FAZIO, California TOM DeLAY, Texas W. G. (BILL) HEFNER, North Carolina JIM KOLBE, Arizona STENY H. HOYER, Maryland RON PACKARD, California ALAN B. MOLLOHAN, West Virginia SONNY CALLAHAN, Alabama MARCY KAPTUR, Ohio JAMES T. WALSH, New York DAVID E. SKAGGS, Colorado CHARLES H. TAYLOR, North Carolina NANCY PELOSI, California DAVID L. HOBSON, Ohio PETER J. VISCLOSKY, Indiana ERNEST J. ISTOOK, Jr., Oklahoma THOMAS M. FOGLIETTA, Pennsylvania HENRY BONILLA, Texas ESTEBAN EDWARD TORRES, California JOE KNOLLENBERG, Michigan NITA M. LOWEY, New York DAN MILLER, Florida JOSE E. SERRANO, New York JAY DICKEY, Arkansas ROSA L. DeLAURO, Connecticut JACK KINGSTON, Georgia JAMES P. MORAN, Virginia MIKE PARKER, Mississippi JOHN W. OLVER, Massachusetts RODNEY P. FRELINGHUYSEN, New Jersey ED PASTOR, Arizona ROGER F. WICKER, Mississippi CARRIE P. MEEK, Florida MICHAEL P. FORBES, New York DAVID E. PRICE, North Carolina GEORGE R. NETHERCUTT, Jr., Washington CHET EDWARDS, Texas MARK W. NEUMANN, Wisconsin RANDY ``DUKE'' CUNNINGHAM, California TODD TIAHRT, Kansas ZACH WAMP, Tennessee TOM LATHAM, Iowa ANNE M. NORTHUP, Kentucky ROBERT B. ADERHOLT, Alabama James W. Dyer, Clerk and Staff Director AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR 1998 ---------- TESTIMONY OF MEMBERS OF CONGRESS AND OTHER INTERESTED INDIVIDUALS AND ORGANIZATIONS ---------- Tuesday, March 4, 1997. COALITION OF EPSCOR STATES WITNESS DR. GREG WEIDEMANN, ASSOCIATE DEAN, DALE BUMPERS COLLEGE OF AGRICULTURE, FOOD AND LIFE SCIENCES, UNIVERSITY OF ARKANSAS, FAYETTEVILLE Mr. Skeen. The committee will come to order. We have outside witnesses today. Dr. Greg Weidemann is the first gentleman up at the bat. What I'd like for you to do, as much as possible, is abstract your statement. You are submitting it in writing, I'm assuming? Dr. Weidemann. Yes, sir. Mr. Skeen. We'd appreciate that because we do read them. Thank you. Welcome. Dr. Weidemann. Mr. Chairman, Members of the subcommittee, my name is Greg Weidemann. I'm the Associate Director of the Arkansas Agricultural Experiment Station and Associate Dean of the Dale Bumpers College of Agricultural Food and Life Sciences, University of Arkansas. Thank you for the opportunity to be here today to support the EPSCOR Program, experimental program, to stimulate competitive research. This afternoon, I'm testifying on behalf of the coalition of 18 EPSCORE states and Puerto Rico. I would ask the committee to include my entire testimony in the record and ask your indulgence for briefly summarizing my report. EPSCORE is a science and technology development program involving several federal agencies, including USDA where a small portion of the federal R&D budget is targeted to the 18 states and Puerto Rico that have historically received a smaller portion of federal R&D dollars. The funds set aside are competitively awarded and receive the same rigorous scientific review as other projects. The program has been a remarkable success. It has significantly enhanced the research capabilities and quality of those institutions that lag behind in acquiring federal R&D funds. The program helps to ensure that federal research dollars are not concentrated in a few states and a few institutions. It ensures that all areas of the nation become more globally competitive in science and technology. Within the USDA NRI program, 10 percent of the program funds are set aside for this program for the EPSCOR states. Scientists that are funded through this program no longer qualify for EPSCOR funding and must compete with other scientists for non-EPSCOR funds. This program has had major impact on the Agricultural Research Program at the University of Arkansas. USDA NRI funding has increased from approximately $80,000 in 1991 to over $1 million in 1995 and 1996. Most of these funds now come from non-EPSCOR standard research grants. This clearly illustrates that the program is achieving its goal of enhancing the research capacity of our scientists at our institution. Many of the grants awarded are addressing critical research priorities of national importance such as water quality, food safety, pesticide contamination, and so on. We request that this committee again direct USDA to set aside ten percent of fiscal year 1998 NRI funds for EPSCOR as in previous years. EPSCOR fosters our leadership in agricultural research by ensuring that all parts of the country continue to build our science and technology expertise. That we strengthen our research capacity in all regions of the country and that we're responsive to the needs of rural America. Mr. Chairman, thank you for the courtesy of allowing me to testify today on behalf of this very important program. I certainly would answer any questions that you have. Mr. Skeen. Thank you Dr. Weidemann. We appreciate what you do and the way you do it. I have no questions of you. Mr. Serrano. Mr. Serrano. No questions. Mr. Skeen. Thank you, sir, for your presentation. Can we have Professor James N. Siedow? Welcome. Go ahead and proceed. [The prepared statement of Dr. Weidemann follows:] [Pages 3 - 9--The official Committee record contains additional material here.] Tuesday, March 4, 1997. AMERICAN SOCIETY OF PLANT PHYSIOLOGISTS WITNESS JAMES N. SIEDOW, PAST-PRESIDENT Mr. Siedow. Thank you, Mr. Chairman. My name is Jim Siedow. My testimony is on behalf of the American Society of Plant Physiologists which I represent as past-president. I'm also a professor of botany at Duke University. My research is on plant respiration and is currently funded by the National Research Initiative Competitive Grants Program of the USDA. Despite its few years of existence, the NRI has supported leading research which has already been recognized for its major contributions. Fundamental research supported by the NRI has led to the first transgenic soy bean cultivated that produces its own environmentally benign insecticide, thus reducing the need for pesticide applications and increasing cost effectiveness for growers. NRI supported fundamental research in plant genetics, plant metabolism, and plant growth and development has helped give U.S. industry the capability to regenerate genetically transformed plant tissues. This aids in producing new enhanced crops and has given the plant biotechnology industry in the U.S. a world leading position. The list of NRI successes is a long one which I cannot cover adequately in this testimony. I request to submit for the record cover articles of other important NRI supported research published in two leading plant science journals, Plant Physiologist and Plant Cell. Mr. Skeen. It will be introduced in its entirety. Mr. Siedow. Thank you very much. All agricultural research supported by the USDA, including NRI, ARS, Formula Funds and other programs represents an investment of about $6 per American per year. When you consider that this research helps assure a stable and safe food supply, promotes better health and longer lives, supplies materials for our clothes, furnishings, homes and offices, and helps make American agriculture the nation's leading sector in creating export surpluses, we firmly believe the support for agricultural research represents an outstanding value among public investments for Americans. We had hoped that the new Fund For Rural America would offer more basic research opportunities like the NRI, but after reading the RFP for the Fund For Rural America we find it has more of an applied focus that does not include fundamental research. USDA officials have confirmed this complementary role of the Fund For Rural America which they expect to fund multi- disciplinary research in areas not currently supported by NRI or ARS. If agricultural research is interpreted to include issues such as rural development research, essential agricultural research funds could be diverted. Such diversion of funds will make it more difficult to make the gains in crop productivity that farmers and consumers as a nation require. I and my colleagues at ASPP admire the courageous efforts bythis subcommittee to protect support for research in the face of declining allocations. Last year, ASPP coordinated for the 20 Science Society Coalition on Funding Agricultural Research Missions, several advertisements published by the Congressional Quarterly's Congressional Monitor, which we request to submit for the record. Mr. Skeen. It will be done. Mr. Siedow. Thank you. We strongly agree with the quote in one of these ads by you, Mr. Chairman, and the committee in its report which said the only way that less than 2 percent of this country's population can produce food and fiber for all the needs of this country and also provide this country with its tremendous export opportunities is through research. It's a pretty impressive fact that we can manage with 2 percent of our population. I thank you for this opportunity to share our views with the distinguished Members of this subcommittee and we'd be happy to answer any questions. Mr. Skeen. Well, you scientists are a pretty awesome group yourself because you're the ones that have produced the kind of incentives and methodology that we use in producing as much as we do because there are few people doing it and for I think a very minimal cost. Mr. Siedow. I appreciate that statement. It's a team effort though that requires I think all of us. Mr. Skeen. We'd like to pat you on the back and not in the middle of the head. Mr. Serrano? Mr. Serrano. Just a comment. Thank you for your comment that this subcommittee has done a great job continuing to be helpful in the area of research. There are some folks who may not understand and who wonder why we try to fund it as we do. So, I appreciate your comments. Mr. Siedow. Thank you. Mr. Skeen. We thank you. Mr. Samuel Minor. We welcome you. Your entire written testimony will be put in the record. If you will abstract it, we'd appreciate it. [The prepared statement of James N. Siedow follows:] [Pages 12 - 21--The official Committee record contains additional material here.] Tuesday, March 4, 1997. COUNCIL FOR AGRICULTURE RESEARCH, EXTENSION AND TEACHING WITNESS SAMUEL MINOR, DAIRY FARMER Mr. Minor. Good afternoon and thank you Mr. Chairman. I come from the other end of agriculture. My name is Sam Minor, a dairy farmer, retail market and restaurant operator with my wife and family just south of Pittsburgh, Pennsylvania. On this farm we milk 100 cows and grow the forage for those dairy cattle, plus grow several acres of popcorn, sweet corn, and other vegetables for our retail market and restaurant. These products are primarily marketed to the dairy store and the restaurant which is operated by five family members and approximately 55 additional full-time and part-time employees. The customer count at this rural market or restaurant would indicate that in excess of 200,000 people visited our farm in this past year. In addition to working in this farm business I have for a number of years had the opportunity to serve on the boards of directors of two farm cooperatives; Penn West Farm Credit in Western Pennsylvania that provides credit and financial services for about 4,600 farmers and Agri, Inc. the primary farm supply cooperative for 85,000 farmers in the 13 northeastern states. I am here today to testify on behalf of the Council For Agriculture Research, Extension and Teaching or commonly referred to as CARET. CARET is a national organization of grassroots or lay people such as myself. It was created in1982 by the National Association of State Universities and Land Grand Colleges commonly referred to as NASULGC. Our mission of CARET is to enhance national support and the understanding of Land Grant University Food and Agriculture Research, Extension and Teaching mission and programs. Now, I have taken the time to talk about my personal background here today because the importance of this subject that we are discussing, agriculture research and education. It's been very important to our family, to our farm business, to the farmer members of the cooperatives which I work with and to the agricultural industry. For example, prior to the time that we started farming in 1975 I had the opportunity to work for several years in the artificial breathing industry where we saw first-hand the fullest of the applied research and extension work in dairy cattle genetics and semen physiology. That work which allows U.S. dairymen today have the highest producing and most efficient dairy herds in the world. Then it really hit home when we started our own farming business in 1975. Although growing up on a family farm in the hills of Southwestern Pennsylvania I was not fully appreciative of the full impact of a Land Grant Research and Extension Programs until we started this own farm and retail farm business. We soon learned that research and extension was the very basis of nearly every program we carried out in this business, literally everything from testing the soil and planning, to selecting the varieties and harvesting, all the way through to producing, processing, and the selling the milk that we produced on this farm. Now, I know that these comments are very basis, but this availability of science and technology is the very reason that today American agriculture is the envy of the world. It has been, I'm sure, said many times here today that federally supported programs of research, extension and teaching that are provided the scientific basis to allow 1.8 million U.S. firms such as our in Southwestern Pennsylvania to produce a record in excess of $200 billion of food and fiber; a record 60 billion of which went to the export market allowing for that very positive $30 billion contribution to the balance of trade. And it's important time to talk about agriculture research and extension because we are aware of the fiscal restraints of the changing world of the federal government and the conduct of our agricultural businesses. We will rely less upon the commodity support programs. We will compete more effectively in the world market place. A result of these past efforts in research, extension and Education will have--we will have an agricultural system that is even more competitive in the global economy. An economy for agriculture provides almost 20 percent of the jobs in this country and accounts for 16 percent of the Gross National Product. And yet as I'm sure has been said many times, we just spend a little bit more than 10 percent of our disposable income to meet these food needs. Specifically we're here to request support for the fiscal year 1998 budget recommendations of the NASULGC Board on Agriculture of $891.2 million; an increase of 6.6 percent over the current year appropriations. This request is for the federal portion of the funding for research, extension and higher education. And the federal administration--turned leverages up to five times at the state and local level. I realize this is a large amount of money but really it's quite moderate when one considers this in relation to the total federal appropriations, or even when one considers the simulation to the agriculture appropriations. Mr. Chairman, I especially want to emphasize the importance of the request of the small increase in the amount appropriated for the base programs for research and extension. These base funds represent the ongoing state-federal partnership. It represents a long-term commitment to U.S. agricultural research and a transfer of this research to implementation. The importance of these base funds cannot be over- emphasized. The Land Grant University system works very closely as you are well aware with CSREES. The Land Grant system has gone through recognizing the changes that have taken place in government and the changes taking place in society; a thorough evaluation of preparing for the future. The recognition of the need for this change has resulted in a very thorough assessment or future process has brought about a plan for action on agricultural natural resources for the Land Grant Universities. This plan of action, the future process, has six goals that are coordinated very closely with the USDA REE section. And I'm sure you are very, very familiar with those. The Land Grant University system, one of the greatest inventions ever in higher education is today in cooperation with its federal partner, CSREES, positioned with a renewed commitment to help the U.S. food and fiber section to prepare to take advantage of the great opportunities that lay ahead. As an individual farmer and a member of the agricultural community, I'm very proud of what this partnership has provided to us. At the same time, I believe that agriculture research and education must be an important part of our long-term agricultural policy. We must strengthen our financial commitment to ensure that these basic programs for the Land Grant system will be prepared to address the emerging needs of this food and fiber sector. We want to be prepared as the opening of global markets, deregulation of commodity programs, the promise of scientific breakthroughs and the complexity of environmental and food safety issues provide an unprecedented opportunity to put science and education to work for farmers such as myself and in support of mankind. Thank you very much for the opportunity to be with you here this afternoon. Mr. Skeen. Thank you, Mr. Minor. We appreciate what you're doing. You have a very effective organization for talking to us; one of them, my wife belongs to. Mr. Minor. Yes. We're very familiar with her, sir. Mr. Skeen. You're certainly getting a good ear. Mr. Minor. We missed her last week. Mr. Skeen. Well, she missed you too. They're sheering sheep today. Somebody had to stay there and tend to the real business while we're sneaking off up here having all of this fun. Mr. Minor. Good. Mr. Skeen. We certainly appreciate what you're doing and the group that you represent. They've been a tremendous and significant gift to the whole United States agricultural system. Mr. Minor. Thank you very much. Mr. Skeen. By the way, New Mexico's number one agricultural product is now dairy. Mr. Minor. Is that right? Mr. Skeen. Yes, sir. We have refugees from California that have moved in. Mr. Minor. We read about them and we read about the increased production. Mr. Skeen. They're sure producing a lot of cheese. We're glad to have you and we'll certainly take a look at your testimony. We appreciate your support. Mr. Minor. Thank you very much. It's a pleasure being here. Mr. Skeen. Thank you. It was a pleasure having you. Dr. John C. Owens from the grand State of New Mexico and New Mexico State University. Please proceed. [The prepared statement of Samuel Minor follows:] [Pages 25 - 30--The official Committee record contains additional material here.] Tuesday, March 4, 1997. NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND LAND GRANT COLLEGES WITNESS DR. JOHN C. OWENS, DEAN, COLLEGE OF AGRICULTURE AND HOME ECONOMICS, NEW MEXICO STATE UNIVERSITY Dr. Owens. Chairman Skeen, I'm delighted to be here again before the committee. I want to thank you and the committee itself for the investment that you've made in agriculture research, extension and education in the past. Its very investment is what's made the system so strong. Pennsylvania Delegate Minor said it very well. And with your permission, I'll make my remarks extremely short. There is no need repeating what he said. Mr. Skeen. We certainly appreciate that. Dr. Owens. I thought you might. Mr. Skeen. We're not rushing you. Dr. Owens. No. We're in good shape. Thank you very much for that. I would like to remind you that the fiscal year 1998 budget priorities that are before you represented by the NASULGC request were identified by a process of nationwide consultation within the Land Grant community with the CARET delegates, with farmers and agribusiness persons, consumers, industry individuals, families as well as local community leaders. You will tell from all of this there are two cross-cutting priorities that define the NASULGC fiscal year 1998 budget recommendations. Those are two things. Number one is to strengthen the base funds in agriculture research, extension and higher education programs. And number two is targeted funds which advance some special initiatives in support of the food agriculture and environmental system that we all have. As you know we often refer to the base funds as the heart of the Land Grant system. They're those funds that create this unique partnership between the United States Department of Agriculture, the State Land Grant Universities, and country governments. And this system has ensured a profitable and successful food and agricultural industry that as Mr. Minor said, is the envy of the world. I'll stop right there and tell you that I'd be happy to answer any questions that you might have about the budget. We made a request for a modest increase in funds. We know that you guys face a really tough budget year as we face back in home states also. These dollars are the fuel that keeps the system going. And the federal investment is the money that coordinates the entire system nationwide. And I think that's the key ingredient that has made our Land Grant system of research, extension, education and teaching so awfully strong. Mr. Skeen. You're exactly on the mark. That's a dilemma that we face today. It is because we're trying to balance budgets without taking into account some of the most important activities that we're involved in, particularly in agriculture. It's been very difficult. The few people represented in the agricultural community just don't out vote some of the others. But we're going to try to make this thing an equitable situation. They also enjoy eating. Dr. Owens. Three times a day. Mr. Skeen. Three times a day and regular, and excellent food and so forth. We appreciate your testimony. We will certainly have it in the record. I have no questions. Mr. Serrano. Mr. Serrano. No questions. Thank you. Mr. Skeen. Thank you, Dean Owens. Dr. Terril Nell. Welcome. Glad to have you here. We'll proceed. [The prepared statements of Dr. John C. Owens, Dr. Thomas L. Payne, Dr. William B. Lacy, Dr. John M. White, Dr. P.S. Benepal, Dr. James P. Lassoie, and Dr. Donald K. Layman follow:] [Pages 33 - 69--The official Committee record contains additional material here.] Tuesday, March 4, 1997. SOCIETY OF AMERICAN FLORISTS WITNESS DR. TERRIL NELL, CHAIRMAN, DEPARTMENT OF ENVIRONMENTAL HORTICULTURE, UNIVERSITY OF FLORIDA IN GAINESVILLE Dr. Nell. Thank you. It is a pleasure once again to be here to share information with the committee about the environmental horticulture and floriculture industries in this country. I am Chairman of the Environmental Horticulture Department, University of Florida. I am here representing the Society of American Florists. I serve on their board and also Chairman of their Government Relations Committee. I have over 20 years experience in agriculture. There are times I wish I didn't have to admit that. But I do; specializing in floriculture. My career has been specializing in research and education in floriculture. You have the written testimony. In the past we've talked about the value of the floriculture industry to the economy of this country and the significance to society. And I will leave that to the testimony. Now, what I would like to do first representing the floral industry and the researchers around the country who are doing work on floriculture commodities which can be translated to other commodities throughout agriculture is to thank you, Mr. Skeen, Members of this committee, and Congress for recognizing the value of this industry and for putting into this current year's budget $200,000 that could be used for floriculture research, NARS. That money had been very helpful and it has served to really encourage the industry and the academic community, the researchers with new hope for progress and research. Today, I'd like to concentrate on four areas: research funding, pesticide registration and research, international trade, and also statistical information. The funding that is in this year's budget clearly will help this industry to meet the increasing strict environmental regulations that are facing this industry. Also, it will help this industry to become much more competitive in an international market. And it will help the small business people that are represented by the growers and retailers throughout the country to maintain good employees, be good employers and help the economy. We were excited with the funding that was put into the USDA budget this year, but we are also disappointed to see that, that funding has been deleted from the proposed budget for the coming year. We are asking that you and the committee make sure that, that funding is placed back into the budget so that this effort can go forward as it was originally intended. I am also very pleased to share with you that the Society of American Florists and the American Association of Nurserymen have joined together with USDA and are in the process of developing a new initiative that will be used to address issues that are facing the floriculture and the nursery industries which might be recognized as the green industries in this country. The goals of the new joint research initiative will be directed to refund research on the floral and nursery crops. It will leave with the goal simply of leading the growers to better environmental protection, including research for reduced use of chemicals and reduced runoff and other waste, maintain biodiversity by establishing first an ornamental plant germ plasm center at the Ohio State University. And that is a part of the USDA national plant germ plasm system; enhance environmental--efforts such as those around wetlands and for reclamation of wetland areas by developing better plants and trees that will work for remediation. And improve our rural and suburban economies by helping growers and retailers to be more efficient in their businesses and prove our international competitiveness and improve the quality of life for the citizens of this country. In order to develop that initiative and go forward, first, we need to make sure that the funding that was in this year's budget is maintained. Second, we are asking for your help as we bring that initiative forward in the coming year. And that is not just for this industry. It is for our environment. It's for our economy. And it's for the society in this country. We would also direct your attention to four items in the written testimony. First, we are asking that specialattention be directed to maintain the funding for the IR4 program. It is through that program that pesticides can be evaluated and ultimately registered for minor use pesticides which are those primarily used by the floriculture industries. And also to support, as you heard earlier from the USDA presentation, funding for methyl bromide. That is a serious issue that's facing many of the floriculture businesses throughout this country. We ask also that there be a no-year emergency fund set-up for APHIS. So this can be accessed when there is a real problem. And we've seen a few of those that need to be addressed quickly. We would also ask that APHIS be continued fighting the Chrysanthemum white/rust issue. This has been a problem that surfaced several years ago in California and became a serious issue in Washington State and Oregon last year. And if it spread through the rest of the country, it could lead to considerable increase in pesticide usage. And we ask for strong funding for the Census of Agriculture and that the horticulture census be included as a part of that. With this request we realize fully that you face many budget restraints. We are in a time of change. We appreciate what you've done. We ask that you realize the significance of this industry to the economy and the people. I'll be happy to answer any questions. Mr. Skeen. Thank you Dr. Nell. Let me ask you a question about what the agriculture research service is already doing on pest management. Does your industry derive any benefit from that work? Dr. Nell. Yes, sir, it does. The research that the Agricultural Service and CSREES is doing throughout the country it is greatly benefitting the industry. The difficulty is there are not enough people directly related to the floriculture nursery industries. Mr. Skeen. So, you're talking about a very specific---- Dr. Nell. I'm talking about a very specific situation. Mr. Skeen [continuing]--pest management, that you'd have to use for horticulture. Dr. Nell. Right, because those materials have to be leveled for that use. We have unique pests. And because of the global importation of many cut flowers today, we're seeing this industry plagued by a number of new insects and diseases on a regular basis. Mr. Skeen. So, what's your proposal? You need to be more specific as to your research dealing with pest management. Dr. Nell. Our proposal on pest management is very simply that the researchers need to be conducting the work on floral and nursery crops. Mr. Skeen. What other research benefits do you get from the science now being funded by the government? Dr. Nell. It's not specific to horticulture. Some benefits, clearly the presentation earlier by the plant physiologist group, the genetic engineering is now beginning to flow into floriculture. We are hoping that floriculture begins flowing into other areas as well. We are also benefitting when new pesticides, new pest management strategies are developed that they can be brought from other segments of agriculture into floriculture. But also much of the IPM material began with the floriculture industry and has been moved from the floriculture industry out. Mr. Skeen. So, it's kind of a swap situation to some degree. Dr. Nell. Earlier in the USDA testimony it was mentioned about chemigation where a small amount of fertilizer is injected into the irrigation system and applied directly through the irrigation system. That chemigation or fertigation system was actually developed in the floriculture industry 25 years ago. Mr. Skeen. It is like the drip system with the additives and the pesticides and also the fertilizers and things of that kind. Dr. Nell. Correct. Mr. Skeen. With regard to the agricultural product, wheredoes floriculture stand right now in dollars--I would suspect it's very high. Dr. Nell. Environmental horticulture represents 11 percent of farm gate value. It is currently more valuable nationwide than cotton, wheat or tobacco. Mr. Skeen. So, it stands very high. Dr. Nell. Yes. Mr. Skeen. A lot of folks never realize that horticulture or that particular undertaking is ranked as such a high agriculture dollar producer. Dr. Nell. It's a very high economic value that has also been the most rapidly expanding segment of agriculture for approximately 12 years. Mr. Skeen. So, we've become aware of that here of late. Dr. Nell. People love them. Mr. Skeen. We have no more questions. Thank you very much for your testimony. Dr. John Suttie. Welcome. Glad to have you here. [The prepared statement of Dr. Terril Nell follows:] [Pages 73 - 78--The official Committee record contains additional material here.] Tuesday, March 4, 1997. FEDERATION OF AMERICAN SOCIETIES FOR EXPERIMENTAL BIOLOGY WITNESS JOHN W. SUTTIE, PH.D., PRESIDENT Dr. Suttie. Thank you, Mr. Chairman and subcommittee Members. I'm John Suttie. I'm the current president of the Federation of American Societies for Experimental Biology, commonly called FASEB. I'm also professor of biochemistry and Chair of a Department of Nutritional Sciences at the University of Wisconsin. I appear before you today as president of the Federation in support of the research budget of the Department of Agriculture. If you're not familiar with FASEB it's coalition of 12 societies with a combined membership of more than 46,000 scientists. In general they work in the biomedical research area. The Federation was created in 1913 to provide an organization which could represent the views of the basic scientists in the relevant policy debates of its day. This remains our fundamental purpose to this time. We appear before you today not only as advocates for life science research but also to express our views on the approaches to agricultural research which we as bench scientists believe will be the most productive. These approaches are grounded in the principle that a competitive system for allocating government funds is the most effective mechanism for getting the results we all seek. It is for this reason that FASEB recommends to the committee an increase in funding for the Competitive Grants Program at the Department of Agriculture from its current level of $94 million to $138 million. This is similar to the request that the President presented to Congress last month. Let me describe for the committee briefly the Department's current program and give you one example of the quality of research which is already being carried out. Officially referred to as the National Research Initiative Competitive Grants Program, or more commonly simply as the NRI, this program funds extramural research projects at public and private universities. Proposals are evaluated based on a regular system of peer review. Projects have a schedule for completion and both yearly reports and a final report are required. We believe that recent accomplishments of the NRI provide rich evidence in support of our request that this program be expanded. Let me describe just one in the field of animal health. Porcine reproductive and respiratory syndrome is a viral disease of pigs which has been cited by the National Pork Producers Council as its most important animal health problem. It's the cause of significant economic loss. NRI supported research has identified and characterized the causative agent of this disease and has contributed to the development of the first vaccine which will protect swine against it. The vaccine is now being used by swine producers throughout the United States. Mr. Chairman, we believe this example is typical of the quality of science that can be expected from an expanded competitive research program at the Department of Agriculture. FASEB has previously distributed to this subcommittee other recommendations in several areas under your jurisdiction. In the interest of time, I will not cover these in my testimony. We hope that this subcommittee will consider them carefully when it marks up this year's appropriation bill. Mr. Chairman, I'd be pleased to answer any questions. Mr. Skeen. Thank you very much Dr. Suttie. I appreciate your statement. Competitive research, I think, has proved to be a vastly productive way of doing this. You've certainly hit on the high spots. Our problem is, we had it funded at about $94 million. The President's administrative budget comes in at $138 million, I believe, and so you're looking for a compromise of about $130 million. We'd like to produce that for you, but I think we're going to be lucky to get the $94 million back. Dr. Suttie. I think what the scientists are looking for, if at all possible, is some indication that the committee and the USDA sees this as the type of program which really occupies the niche within their research programs that we think that it should. We all realize the problems of the budget. Mr. Skeen. I think you've earned that slot. There is no question about it. Our problem is how do you get the funding for it under the sanctions that we have to deal with because we've got every idealist in the world telling us how the budget ought to be done. Not a one of them knows how to build it. And that's what we're doing down here. We've got a lot of folks who have great visions, the visionaries. We're trying to be the functionaries and make this thing go. Give us a little leeway. We appreciate it very much. Dr. Suttie. It's a difficult task. We do appreciate the difficulty. Mr. Skeen. We appreciate your testimony. We think a great deal of the Competitive Research Grants. Thank you, sir. Next we have Ron Brichler speaking on my favorite topic--crop insurance. You've got a good man there too by the name of Mike McLeod that's following you around. Welcome. [The prepared statement of Dr. John W. Suttie follows:] [Pages 81 - 94--The official Committee record contains additional material here.] Tuesday, March 4, 1997. AMERICAN ASSOCIATION OF CROP INSURERS WITNESS RONALD J. BRICHLER Mr. Brichler. Thank you, Mr. Chairman. and Mr. Serrano. My name is Ron Brichler and I'm here representing the American Association of Crop Insurers who write 80 percent of the multi- peril crop insurance premiums throughout the United States. During recent months we have heard many buzz words. We hear risk management for farmers. We hear safety net. We hear revenue insurance. We have also repeatedly heard Secretary Glickman talk about freedom to farm and how it generates more risks for farmers. We feel that crop insurance plays the major role in farmers risk management today. As you know if the program is not adequately funded, it will cease to operate on October 1, 1997. We need your help to secure this funding. The issues are pretty straight forward. If there is no funding then we have no program. If we have no program there is no safety net. If we have no safety net, we have an increased risk for farmers and our rural communities. In order to effectively deliver crop insurance and service the risk management needs of farmers, we need adequate funding. In 1996 the private industry wrote over 2.2 million policies of all types. And these were delivered to farmers all throughout the United States. This covered 204 million acres which is two times the acreage that was covered in 1994. In addition, during 1996, this coverage was done at a 76 percent loss ratio which means that for every dollar in premium that was collected, the government only paid out 76 cents in losses. If you fund delivery correctly the private sector will respond. Last year, industry responded in a tremendous way to delivery newly designed catastrophic levels of coverage. We delivered over 360,000 policies. And we are retaining them in greater numbers than our FSA counterparts. Based on our efforts, we are asking that Secretary Glickman announce prior to April 30th the complete transition to private delivery of all policies. Let me get back to funding again. The Administration has proposed a reimbursement rate of 24\1/2\ percent for administrative and operating costs. We feel this represents a broken promise. For fiscal year 1998 it was supposed to be 28 percent. However, the Administration's budget calls for 24\1/2\. I think that we are being asked to do an awful lot. You're asking us to deliver the safety net to U.S. farmers, but you're asking us to do it with our hands tied behind our backs. While our expense reimbursement is dropping, the cost of regulation is increasing. The Federal Crop Insurance Act of 1994 mandated corresponding reductions in paperwork to offset our reimbursements. What did we get? Red tape increased. Our costsincreased. The Risk Management Agency has ignored its mission. It is contrary to statute and it is contrary to Vice President Gore's initiative on reinventing government. We need a new mind set within RMA or we need new leadership. In the private sector, if I ignore regulation or my corporate mission I will soon be looking for a new employer. In closing, Chairman Skeen, let me read a quote. In 1994 this administration strongly opposed an amendment to reduce the reimbursement stating ``The basic reimbursement rate has already been from about 34 percent to 31 percent of premium. However, to mandate that the reimbursement on renewals now be lifted to 28 percent or a lower level could impose serious burdens particularly on smaller companies. Some companies may even refuse to participate in the reform program. If companies do not participate, both farmers and tax payers will lose.'' Chairman Skeen, you refused to support the pending amendment says that you didn't before Congress should cut the insurance any more until the new crop insurance was well- established. Your wise advice was followed. We have a successful beginning. We appreciate that you have kept your word and we ask that you insist that the Administration keep its word. If the needed funding is appropriated and we move to a more simplified program, the private sector will be a true partner in delivering risk management tools to farmers. We have held and will continue to hold our end of the net. We ask the Administration to hold theirs. Thank you. Mr. Skeen. Thank you, Mr. Brichler. This has been one of the hot topics that we have discussed over the last number of years; going back at least ten years or so. Privatization of that is getting away from the old disaster payment mode and trying to come to a real business like crop insurance has been very, very difficult. You folks have done a real good job trying to accommodate it. Of course the question is, who is going to pay; the Federal Government or are we going to use user fees. When the Vice President called you was he in his place or was he outside? Mr. Brichler. Mr. Chairman, I've never spoken with Vice President Gore. I'd like to, but I haven't. Mr. Skeen. Well, I've spoken to him, but I didn't get any answers. Now the Administration has taken the view that's it's of less importance than some of the other programs. I think it is a marketing tool that we should have had put in place a long time ago. The private supporter supports this. We should be augmenting this rather than shelling out for disaster payments. Mr. Brichler. I agree. That's clearly where we want to go. Mr. Skeen. I haven't changed my mind on that. Mr. Brichler. Thank you. Mr. Skeen. By the way, it's still a good management practice. If you've got crop insurance over there, your bankers are a whole lot more interested in funding you. And those of us in agriculture know how sensitive a situation that is. You've got to keep a happy banker or you won't have a happy crop. But we thank you for your patience. We're going to try to make this thing come out whole. Mr. Brichler. I appreciate it. Mr. Skeen. Mr. Serrano. Mr. Serrano. No questions. Thank you. [The prepared testimony of Ronald J. Brichler follows:] [Pages 97 - 106--The official Committee record contains additional material here.] Tuesday, March 4, 1997. AMERICAN HONEY PRODUCERS ASSOCATION, INC. WITNESS JERRY STROOPE Mr. Skeen. Next we want to welcome Mr. Stroope who represents an industry that has always intrigued me. Mr. Stroope, you're as busy as your hives, the bees and the rest. We appreciate it. You took a lot of cursing and blasphemy and profanity over the years along with the wool act. So, now we're producing wool and honey without the government storing it anyplace. Mr. Stroope. And we're doing a pretty good job. Mr. Skeen. I think you're doing a pretty fair job; try to anyway. Mr. Stroope. I do want to thank you for allowing us to come here today. I appreciate your taking the time to listen to our testimony. Mr. Skeen. Well, if you had brought a little honey along with you. We're glad to see you. Mr. Stroope. I want you to know, you're not the first person that has said that. Mr. Skeen. Go ahead. We'll use the verbal honey. Mr. Stroope. Mr. Chairman, Mr. Serrano, I appreciate your time. I'm here to speak in behalf of the American Honey Producers' Association. I'm a third generation bee keeper from the State of Texas. And I have Mr. James Ross from Oklahoma, and if you want to hold it against him for moving to Oklahoma; he tells me he grew up in New Mexico. So, we're glad to have him here today. He is also past-president of the Oklahoma Bee Keepers Association. On my left I have Mr. Mark Brady. He is a commercial bee keeper from the State of Texas. And Mr. Brady is the current President of the Texas Bee Keepers Association. Mr. Skeen. Glad to have you here. Mr. Stroope. We've come here to ask you for some appropriations to go to honey bee research. As you may well be aware, honey bees have been attacked over the last ten years by parasitic mites. About a year ago when we testified before this committee. Mr. Skeen. Excuse me; what are they? Mr. Stroope. Parasitic mites. We have two parasitic mites now. We have one that resides internally in the tracheal tubes of the honey bee and one now that resides on the outside of the honey bee. So, we have two types. Either one of them can put the bee keeper out of business, but we have both. About a year ago when we testified before this committee, 30 percent of the colonies in the United States had both mites. Now that figure has reached close to 100 percent. Very few colonies now can survive without treatment. All of our wild bees are the--colonies that exist which the wildlife depend so heavily on and our home gardeners and such. Those bees have been virtually wiped out. So, now basically you have the commercial bee keepers that are holding on to the only bees left in this country. And we are losing the battle against the mites. We do have a treatment. The mites are already developing a resistance to this treatment. And if we don't do something fairly soon to get us on the right road to solving the problem against these mites, we will be put out of business. And of course, you are well aware that one-third of our food supply in this country is dependent upon honey bee pollination. So, it is our understanding that the President's budget has called for $4.7 million to be earmarked for honey bee research. We would hope that this committee would support that level of funding. An additional $995,000 on top of the $4.7 million to be earmarked for our Wesleco Bee Lab down in Texas. Now, you may be familiar with it. This is the new lab. It's only been there for five or six years now. It's a beautiful establishment, but it's never been properly staffed. Currently, we have four research scientists working out at this lab. Two are permanent. One is a part-time temporary, full-time. And then we have one on loan from Mexico which her funds are covered by the University of Mexico. So, what we'd like to do to help us against this fight against the mites is receive an additional $995,000 to properly staff that lab in Wesleco. And that would bring the level to seven full-time scientists there. Maybe with this increase in research, we can start gaining a handle on these mites. But at the current level, we're losing the battle and we could use some help. Now, at this time, I don't have much more to say. So, I'll open it up to questions if you have any. Mr. Skeen. Thank you, Mr. Stroope. What about the African bee situation? Has that been a problem? Mr. Stroope. Well, the African Honey Bees, as it turned out, were heavily hit by the mites as well. Mr. Skeen. The mites were getting the African Honey Bees also? Mr. Stroope. Yes, sir. They were advancing pretty fast through Texas. They got up right to the edge of the City of Houston where we operate and their advancement stopped. And it was quite puzzling at the time exactly why they stopped right where they did. But come to find out at the time they stopped we started losing bees at a very rapid rate in our operation in Houston. As a matter of fact, we have bees right up next to his fence. The mites appeared to have set those African Honey Bees back seriously. But for the domestic bees that were living in the wild which we call feral colonies, which are no different from the ones we house in our hives, the African Bees snapped back pretty quick. Now, they're on the road to recovery. Their numbers are increasing now. But our domestic bees are not recovering. Mr. Skeen. Because of the mite. Mr. Stroope. Because of the mite. So there are some qualities there. If you can pick the good from the bad with the African Honey Bees, it's possible---- Mr. Skeen. Well, it's a good research project. It's very selective. We want a mite that eats only African Honey Bees. Mr. Stroope. And the thing about it is it's real possible that we can take some good traits from the Africanized as far as its ability to survive against the mites. We need more research or continued research on the Africanized bee because we did find it had some good traits involved there. But we need to gear up and really zero in on mite research at this time. We're more afraid at this point of the mites than the Africanized Honey Bees. Mr. Skeen. You are? Mr. Stroope. Yes, sir. Mr. Chairman, we're afraid that if we don't staff this laboratory at Wesleco with bee research it will get staffed by ARS by some other commodity and eventually we'll lose that lab which was specifically built for bee research. And eventually we won't have it for our needs, but for some other commodity. Mr. Skeen. That wasn't the site of the original screw worm experimentation. That was Mission wasn't it Mission, Texas? Mr. Stroope. That, I don't know. I believe they did come to the valley. Mr. Skeen. If they're in the valley, I didn't know wherethey were. We initiated that program back in 1955 or somewhere along in there. Mr. Stroope. Well, we have already been told that if we don't get that lab properly staffed in Wesleco, we will---- Mr. Skeen. They're going to shut it down? Mr. Stroope. Not shut it down. They will fill it with other research other than honey bee research. And at this time we don't need less honey bee research, we need more. So, we're zeroing in on that right now. Mr. Skeen. Have you lost any producers over the last several years? Mr Stroope. Mr. Brady might be able to answer that. Mr. Brady. I would say in the last five years, we're probably down 30 percent. Mr. Skeen. Thirty percent as far as just overall? Mr. Brady. In the United States, yes, sir. Some of those numbers are due to bad economics. But a lot of those numbers are due to the mite. It's interesting, since---- Mr. Skeen. But this mite is a tremendous threat to you. Mr. Brady. A tremendous threat, yes, sir. To give you a real quick example, about four or five years ago when those mites hit my outfit, in the first year we lost about 1,500 colony; not really knowing exactly what they were or how to handle them. And it was very interesting today, I ran across some people from California. They were in the almond business. One of the questions they asked me is why don't you guys get enough bees out there and pollinate our almond grove? And that's one of the reasons. We're having a hard time keeping our numbers up. So many people have gone out of business due to the mites. We just can't supply enough bait. The almond orchards are growing. Sunflowers, watermelons, cucumbers, tremendous amount of crops that have to have the bees for pollination. If we're going to be able to supply those bait, we're going to have to come into this research and try to keep these mites out. Mr. Skeen. Let me ask you one other question and this is on imported honey. Is that still a big problem for the industry? Mr. Brady. It's still a problem. We've begun to get a handle on that through, an anti-dumping suit. Prices have rebounded---- Mr. Skeen. Against whom? Mr. Brady. China. Mr. Skeen. China? Mr. Brady. Yes, sir. Prices have rebounded somewhat. We're in better economic shape than we were a few years back. But it's not going to matter, in another five years it's not going to matter if honey is worth $5 a pound if we can't keep these bees alive. Mr. Skeen. If you don't keep your colonies alive. Mr. Brady. Yes. Mr. Skeen. Is this a full-time business for both of you gentlemen? Mr. Stroope. Yes, sir. Mr. Brady. Yes, sir; for all three of us. Mr. Skeen. All three of you. Mr. Brady. Yes, sir. Mr. Ross. I usually loose about 5 percent to 10 percent each year. Year before last I lost over between 40 and 50 percent to the mites. I haven't recovered from that. Mr. Stroope. The thing that we're concerned about is we have a chemical, as Jerry said, which is a mite strip that we can use in the colony. We're very sensitive to what we put in there because honey is a food product, a pure food product. We've got to be very careful what we introduce into the hives. Mr. Skeen. You're talking about any chemicals. Mr. Stroope. Yes, sir. The one strip that we're using and is approved in the United States is the only chemical that we've got. And up to this point, we don't have anything to replace it; anything that's approved. Like Jerry said, the bees are already showing some resistance to this chemical; the mites are. If we don't get something else on the road coming in to help us--bar the door because there is not anything that's going to stop it. Mr. Skeen. Well, we certainly appreciate your testimony. Mr. Stroope. We appreciate your listening to us. Mr. Serrano? Mr. Serrano. I've been appreciating your testimony in the sense that people like myself, coming from New York would have at times a limited understanding of the issue. Your presentation was clear. And I understand it is a serious problem. I was really taken by the fact that 33 percent of our food supply is directly related to honey bee pollination. So, you've made your point certainly to me. And I fully understand what the problem is. Mr. Skeen. Do you have any environmentalists that are supporting the mites? Mr. Stroope. We hope not. Mr. Skeen. We'll send you some coyote lovers. Mr. Stroope. Send them on down. Mr. Skeen. All right. You've got a mite for them? Mr. Stroope. We may have. Mr. Skeen. We'll take care of that problem. Any other questions? Mr. Serrano. No, Mr. Chairman. Mr. Skeen. Thank you very much for your testimony. We understand it is a severe problem. We will see what we can do to help you. Mr. Stroope. We appreciate that very much. Mr. Skeen. Thank you all. We want to thank all of you for attending. We're adjourned. [The prepared statement of Jerry Stroope follows:] [Pages 111 - 112--The official Committee record contains additional material here.] Tuesday, March 11, 1997. AMERICAN SOCIETY FOR NUTRITIONAL SCIENCES WITNESS ROBERT J. COUSINS, PRESIDENT Mr. Skeen. The committee will come to order. We have outside witnesses here today. First up is Dr. Robert J. Cousins, American Society For Nutritional Sciences. Welcome. We are glad to have you abstract your statement. We have a copy of your written one and it will all be entered in full in the record. Dr. Cousins. Thank you. Mr. Skeen. If you will abstract it, the floor is all yours. Welcome. Dr. Cousins. Thank you very much. Good afternoon. My name is Bob Cousins. I'm the Boston Family Professor of Human Nutrition at the University of Florida. For 25 years I've taught and conducted research in the area of nutritional biochemistry. I'm here today as President of the American Society For Nutritional Sciences. Our professional society is comprised of 3,500 nutritional research scientists. Our members hold positions at virtually every Land Grant and private institution in the United States that conducts nutrition research. Our members are also in the food and nutrition related industries. I'm very glad to have the opportunity to be here today. I want to thank Congress for the past generous support of all USDA programs. I specifically would like to address the USDA programs in nutrition and food safety which are important to individuals in all Congressional districts. My specific purpose is to emphasize the importance of the Competitive Grants Program of the National Research Initiative. As you know, research under the NRI is in the form of peer- reviewed, modest, two- to three-year awards. But unfortunately the NRI has never come closer than 20 percent of its full authorized level of $500 million. In the Human Nutritional Program funding is such that on average there is only one proposal for every two states. And unfortunately, this is at a time when research tools in all of biological sciences are of greater potential than ever before. This is really the golden age of the life sciences. And in my written testimony I've given a number of examples of just a few that really highlight what has been accomplished. The area of obesity, for example, is now being studied at the molecular level based upon observations that were made over 40 years ago. And I mention this really because research is a long-term investment. And the USDA has made a long-term investment in this research. Our society recommends increasing the NRI budget to $138 million for fiscal year 1998. This recommendation is at the level for the NRI that was arrived at, at a consensus conference on funding in the life sciences held recently by the Federal of American Societies For Experimental Biology. We believe the NRI is the best method of getting the most highest quality research in a cost effective way for programs that are of vital interest to the American people. Thank you for the opportunity and if there are any questions I'll try to answer them. Mr. Skeen. Dr. Cousins, how many Land Grant Colleges are involved with your effort; all of them? Dr. Cousins. Virtually all in our society, yes. Mr. Skeen. Virtually all of them. Dr. Cousins. It covers the full gamut. Mr. Skeen. Texas A&M is one? Dr. Cousins. You'd better believe it. Mr. Skeen. Well, I just want to be sure we are. Dr. Cousins. You are. Ed Harris and Joann Lupton is the Associate Editor of our Journal. Mr. Skeen. Well, we appreciate the work you're doing. Your research is important. Money is our big problem. As you know, we will try to do the best we can with the request. We think this is a fundamentally important piece of work. We appreciate what you do. Mr. Walsh. Mr. Walsh. No questions, Mr. Chairman. Mr. Skeen. You are scott free. Dr. Cousins. Thank you very much, sir. Mr. Skeen. Your check will be in the mail. Dr. Cousins. Thank you. [The prepared statement of Dr. Cousins follows:] [Pages 115 - 129--The official Committee record contains additional material here.] Tuesday, March 11, 1997. AMERICAN CANCER SOCIETY WITNESS MARY THOMPSON, VOLUNTEER Mr. Skeen. We have next Mary Thompson, a lady that I've known for just a few years. I wanted to say it was quite a long time, Mary. Welcome, Mary. Ms. Thompson. Just don't say how old we were when we met each other and we'll be okay, Mr. Chairman. Mr. Skeen. Well, we were a lot younger, but we still made it. Ms. Thompson. That's right. That's right. Mr. Skeen. Glad to have you here, Mary. Ms. Thompson. Thank you. Mr. Skeen. If you will abstract your statement, it will appear in full in the record. Then we will open for questions. Thank you, Mary. Ms. Thompson. I want to tell the committee that I am from Las Cruces, New Mexico. And I'm a volunteer with the New Mexico Division of the American Cancer Society and a former state legislator. I am pleased to be here on behalf of the American Cancer Society, the nation's largest community based voluntary health organization dedicated to the elimination of cancer. With more than two million volunteers nationwide, the American Cancer Society is the community based leader in cancer control. The American Cancer Society is also the largest source of private cancer research funds in the United States. Although most federally funded cancer research and control programs are coordinated by the Department of Health and Human Services, there are other key players. The American Cancer Society believes that the war on cancer requires a coordinated national effort. The Food and Drug Administration and the Department of Agriculture are an important part of this national effort. And I will focus my remarks on some specific programs of interest. Research shows a clear relationship between diet, nutrition, and cancer. As many as 35 percent of all cancer deaths in the United States are related to poor nutrition. We are pleased to see that federal agencies such as the FDA and the USDA are taking steps to reverse this trend. The society applauds the work of the FDA in implementing nutrition labels for food, which are allowing people to make better, more informed choices about the food they eat. We also commend the USDA, through its Food and Consumer Service, for its emphasis on ensuring healthy high quality foods for children enrolled in federally funded child nutrition programs. An integration of these programs with federal nutrition guidelines is an excellent example of a cost effective coordinated federal approach to primary disease prevention. In addition to providing sound nutrition guidelines, our nation must ensure that our youngest citizens get the fuel they need to succeed in school. Nutrition experts estimate that as many as 20 percent of children do not get regular meals at home and are chronically hungary. The American Cancer Society urges this subcommittee to provide full funding for the National School Lunch Program, the School Breakfast Program, WIC, and the Child and Adult Care Food Program which will level the playing field and allow all children an equal opportunity to succeed in school and in life. Another significant health threat is tobacco use. We believe the federal government should no longer support tobacco growth and promotion through the United States Department of Agriculture. The Centers For Disease Control and Prevention have publicly acknowledged the dangers of tobacco use and have spent millions of tax dollars to fund public health programs to prevent or reduce tobacco use. In our view, it does not make sense to continue providing federal assistance for the growth and promotion of tobacco products when we are working to protect our children from its dangers. We believe these funds would be better spent to facilitate the growth of alternative crops for the tobacco farmers. The American Cancer Society is also extremely concernedabout the growing number of children who are using tobacco products. Tobacco use remains the single largest preventable cause of premature death in the United States. This year alone tobacco use will claim more than 420,000 lives, including over 30 percent of all cancer deaths. What is most distressing is that 90 percent of all smokers start as teenagers. And the use of tobacco products among the teenage population is on the rise. Every day 3,000 children start using tobacco. The Centers For Disease Control recently reported that teen smoking is at a 20-year high. Five million of our children will ultimately die from tobacco related diseases and will cost our economy $200 billion. Our greatest opportunity to save lives is to stop children from ever beginning to use tobacco products. The American Cancer Society urges this subcommittee to support the strong federal youth tobacco control policies being instituted by the FDA. We believe the FDA's regulation of tobacco is a critical step to reduce the number of children using tobacco products. The American Cancer Society believes that enforcement is the critical component of this comprehensive program. The $34 million to enforce the Youth Access Initiatives included in FDA's budget is an important first step. We are hopeful that States will be encouraged by this leadership at the federal level to increase state funding for enforcement that will enhance the FDA's efforts. The programs mentioned above are important in preventing or reducing risks from cancer. Equally important are policies that assure quality health care for all Americans. For decades, the FDA has played a vital role in ensuring safety and effectiveness of drugs and medical devices. The American Cancer Society supports a strong FDA that, based on sound scientific practices, assures that Americans have speedy access to safe and effective drugs. We believe reforms that have already begun to speed the approval of safe and effective drugs for cancer patients must continue. We realize that the current system for approving drugs is imperfect, but believe that there has been some improvement in the last year. We applaud the cancer initiatives implemented by the FDA last year, and are pleased that efforts are being made to improve patient access to promising new cancer therapies. The General Accounting Office suggests that since the implementation of the Prescription Drug Users Fee legislation, the FDA has been able to reduce the length of time necessary to approve drugs. But there is still work to be done in this and in other areas within the FDA. Finally, we call your attention to the Mammography Quality Standards Act of 1992. The intent of Congress in enacting this law was to improve the safety and effectiveness of this breast cancer screening modality through a national quality assurance program. Mammography, along with physical examination of the breast, is the only screening modality clearly tied to reducing death from breast cancer. However, the benefits of screening for breast cancer may be lost or diminished if women do not receive high quality mammography. Since its enactment, more than 10,300 mammography facilities have fully or provisionally met the law's requirements to become certified. Today, we ask that you continue your support for this valuable program and provide full funding for the MQSA. Mr. Chairman, that's the total of my remarks. I thank you all for the time. Mr. Skeen. We thank you for the presentation. You've touched on some very important topics. FDA is under the purview of this subcommittee. We have a new head. We think they've done an admirable job in the past, but we think we can brighten things up by getting this process in a little quicker stance. We appreciate the recommendations you have made on cancer and tobacco use. These are all vital topics of conversation and legislation in the body today. We share your concerns. Thank you for your presentation. Mr. Walsh. Mr. Walsh. Thank you, Mr. Chairman, and I do too. Thank you; nice job. I would just like to tell you I agree with you on the Mammography Quality Standards Act of 1992. I will do everything I can to make sure that's fully funded. That's very important. Mr. Skeen. Thank you, Mary. [The prepared statement of Mary Thompson follows:] [Pages 133 - 144--The official Committee record contains additional material here.] Tuesday, March 11, 1997. GROCERY MANUFACTURERS OF AMERICA WITNESS STEPHEN A. ZILLER, VICE PRESIDENT, SCIENTIFIC AND REGULATORY AFFAIRS Mr. Skeen. We have Stephen Ziller with the Grocery Manufacturers of America. Welcome, Steve. Mr. Ziller. Thank you. Mr. Skeen. We'll take an abbreviated version. Your full text will be in the record. You may proceed any way you'd like. Mr. Ziller. Thank you, Mr. Chairman and other Members of the subcommittee. I am Steve Ziller, Vice President of Scientific and Regulatory Affairs for the Grocery Manufacturers of America. We appreciate the opportunity to come in on behalf of GMA on the FDA and USDA budgets for fiscal year 1998. And in particular, share our views about user fees for the food industry. GMA is the organization representing companies that make and market the world's best known brands of food and consumer package goods. GMA member companies have sales of nearly $400 billion representing the largest volume, about 90 percent, of all of the products that are sold in retail in the United States. Our members are regulated by both FDA and USDA. GMA opposes the President's fiscal year 1998 user fee proposals on the food industry for the following reasons. One, user fees imposed on the food industry are bad public policy. User fees, by definition, are intended to reimburse agencies for specific private benefits that they provide to identifiable regulated companies. The availability of asafe, plentiful, and affordable food supply however benefits the public generally. Consequently, regulatory activities such as post-marketing surveillance and inspection should be paid by public funds and not user fees. As Congress itself has repeatedly pointed out in previous years, these regulatory activities are designed to protect the public health and should not be funded by new taxes on the regulated industries. Two, user fees are essentially a regressive tax on food products. Imposition of user fees in effect would constitute an inappropriate tax on products essential to the health and well- being of the American public. Although user fees would be paid by food companies, the ultimate cost would be borne by consumers, many of whom are least able to pay. Number three, FDA principally regulates food by taking regulatory action against adulterated and mis-brand products, and are largely dedicated to enforcement activities which benefit the public at large, and which therefore are properly funded out of general revenues. Four, the imposition of user fees on food companies would encounter serious practical difficulties. Unlike the drug companies which are subject to FDA registration and product listing requirements, there is at present no way to identify all of the hundreds of thousands of food establishments and food products for which user fees might be imposed. Five, unlike the new drugs, food manufacturers may change product formulas frequently, taking advantage of availability of various raw materials. Thus, creating new products all the time. Thus, a user fee for products would be virtually impossible to manage. Six, the only type of food product for which any form of FDA pre-market approval is required is for individual food additives. And there are only about one petition every year for a new direct food additive. Seven, a user fee requirement related solely to food additive petitions would be inappropriate. Unlike a new drug application which gives the successful applicant an exclusive private license to sell a drug product, a food additive petition results in promulgation by FDA of a non-exclusive public regulation authorizing use of the additive by any person wishing to do so. Thus, there is no unique benefit to the food additive petitioner. Mr. Chairman, in conclusion GMA opposes any effort to extend the user fee concept to the food industry. As we've written in letters to Members of this committee, GMA remains committed to a strong FDA and USDA. Congress, however, should provide funding to meet its statutory requirements; that it is to protect the public health, that it is assigned to these agencies. Thank you very much. Mr. Skeen. Thank you very much, Steve. We appreciate your presentation. We will put you down as doubtful about user fees. Mr. Ziller. Thank you. [The prepared statement of Stephen A. Ziller, Ph.D., follows:] [Pages 147 - 154--The official Committee record contains additional material here.] Tuesday, March 11, 1997. AMERICAN PHYSIOLOGICAL SOCIETY WITNESS C. TERRANCE HAWK, PH.D., DEPUTY DIRECTOR, DIVISION OF LABORATORY ANIMAL RESOURCES, DUKE UNIVERSITY MEDICAL CENTER Mr. Skeen. Terrance Hawk. Mr. Hawk. Good afternoon. Mr. Skeen. Welcome, Mr. Hawk. You've heard the litany about the abbreviated forum. The entire text will be in the record. We welcome you here, and you may proceed any way you'd like. Mr. Hawk. I'd like to start out by mentioning that toward the end I will have something to say about user fees, myself. Mr. Skeen. Everybody's got a little itch. Mr. Hawk. That's right. My name is Terry Hawk and I am here today to testify on behalf of the American Physiological Society concerning the appropriate funding level for enforcement of the Animal Welfare Act; a subject of profound concern to the biomedical research community. I'm the Deputy Director of the Division of Laboratory Animal Resources at Duke University Medical Center located in Durham, North Carolina. I am, in fact, both a scientist and a veterinarian. I have a doctorate in human physiology and was previously an NIH-funded research scientist. I also have a doctorate in veterinary medicine and I'm board certified as a specialist in laboratory animal medicine. My background in both physiological research andlaboratory animal medicine gives me a unique perspective on the importance of animal welfare to science itself. For the past two years I've been the Chairman of the American Physiological Society's Animal Care and Experimentation Committee. The American Physiological Society is the nation's oldest learned society dedicated to medical research. It was founded in 1887. And the Society now has more than 8,000 members. I've come to testify in support of funding the Animal Welfare Act enforcement within the USDA's Animal and Plant Health Inspection Service, also known as APHIS. Given the current budget environment we also believe that APHIS should have clear priorities to make the most of its funding. Enforcing regulations concerning USDA license Class B Dealer should be one of those priorities. I note the Class B Dealer supply about one-third of non-purpose bread dogs and cats used by research institutions. You are no doubt aware of allegations that large scale pet theft is taking place in this country. There have been well- publicized claims that as many as one- to two-million stolen dogs and cats are sold each year to research laboratories. Because Class B Dealers supply dogs and cats to research institutions there has been a call to eliminate these dealers as a way to end pet theft. However, in some places where animal activists have succeeded in closing pounds and shelters to research, there is no source of non-purpose bred animals other than Class B Dealers. I note that last year the House Agriculture Subcommittee held hearings on pet theft allegations and USDA enforcement efforts. The research community finds itself in an impossible position of proving a negative. That animals used in research are not stolen pets. We don't want to use stolen pets in research. I think everyone is aware of that. We want legally acquired non-purpose bred animals that no one wants to so that we can study important health problems that affect humans and animals alike. These accusations of massive pet theft frightened the public. And while there is a very good reason to doubt those claims, there is also evidence that some aspects of APHIS enforcement have been inadequate. Therefore we believe that the answer to the pet theft claim is good enforcement of existing animal welfare act regulations which already has provisions to ensure that Class B Dealers do not receive stolen animals. The research community supports enforcement of the Animal Welfare Act regulations, including revoking the license of any animal dealer that acquires stolen animals or repeatedly refuses to comply with other provisions of the law. APHIS clearly recognizes the importance of its enforcement rule and has taken steps to ensure compliance by investigating complaints against Class B Dealers. APHIS must continue to give these inspection efforts the high priority they deserve. The Administration has requested $9.175 million for Animal Welfare Act enforcement. The program's funding has hovered around this figure for the past five years. This has required APHIS to take difficult steps such as closing regional offices and not filling vacant Animal Welfare Inspector positions. Even if the current budget precludes an increase, APHIS definitely needs the full $9.175 million in fiscal year 1998 to carry out its responsibilities. While unclear, the Administration's budget request seems to rely upon new user fees to supply $3 million of the requested funds. Unfortunately, these fees have not been formally proposed by the Administration, much less approved by Congress. Nevertheless, the request seems to rely upon these fees to replace $3 million in appropriated funds. I urge this committee to take a very close look at this matter. APHIS needs to be given both the necessary funding and a clear sense of priorities to continue its work of enforcing the Animal Welfare Act regulations. Thank you for this opportunity to express the views of the American Physiological Society. Mr. Skeen. Thank you very much, Doctor. How many doctors do you have? Mr. Hawk. I have two. Mr. Skeen. Two. It sounds like three. I was going to give you another one there. That's a fair presentation. How do you assess user fees on a situation such as yours? How in the world would that work? Mr. Hawk. Well, when an investigator comes, let's say, he would come to Duke University to do our site visit, then we would probably be charged for the amount of time that he is there. That's one way of producing the user fee. Mr. Skeen. So, you have to pay for the inspection. Mr. Hawk. Right. Mr. Skeen. Well, I'll tell you what. There is a lot of artificial thinking going on around here. Mr. Hawk. That's what it sounds like. Mr. Skeen. I really appreciate the response. How do you impose user fees on a research project? But then, I guess it could be done. Mr. Hawk. Right. Mr. Skeen. Mr. Walsh. Mr. Walsh. I've got a feeling no if you have anything to say about it, Mr. Chairman. No. Thank you very much for your comments. Mr. Hawk. Thank you again. [The prepared statement of C. Terrance Hawk follows:] [Pages 158 - 170--The official Committee record contains additional material here.] Tuesday, March 11, 1997. HUMANE SOCIETY WITNESS WAYNE PACELLE, VICE PRESIDENT, GOVERNMENT AFFAIRS AND MEDIA Mr. Skeen. Wayne Pacelle from the Humane Society. Mr. Pacelle. Thank you, Mr. Chairman. Good afternoon, Mr. Walsh. Mr. Walsh. Good afternoon. Mr. Pacelle. I'm Vice President of Government Affairs and Media for the Humane Society of the U.S. And I'll summarize our testimony. There are 12 subject areas which would be covered in the written testimony. I'll just address three very briefly. Mr. Skeen. We appreciate that. It will all be in the record. Mr. Pacelle. Yes. First is the Market Access Program. And one particular program in Market Access we supported the elimination of funding for the Mink Export Development Council in 1995. And the House and the Senate overwhelmingly voted to bar funding for that program. Your committee continued that bar in 1996. We would urge you to do the same in 1997. Regarding the Animal Welfare Act, we request $12 million in funding towards the Animal Welfare Act. We're concerned about continuing problems in implementation for the Animal Welfare Act. Currently there are 73 inspectors covering 13,000 licenses facilities, including 2,992 registered research facilities that house laboratory animals. The USDA continues to chase down class B dealers; those individuals that the previous gentleman mentioned, individuals who sell random source animals to laboratories. There are only about 40 of these B dealers. The USDA seems to be looking toward eliminating B dealers. We support that wholeheartedly. We're very concerned about the issue of pet theft. We cannot quantify how many animals, and we've never issued a figure in that regard. But obviously your committee has a responsibility for funding the Animal Welfare Act. We think that the funds should be spent wisely and judiciously. And a disproportionate amount of funds are being spent on chasing down these B dealers. Finally, Mr. McConnell on the Senate side was instrumental in getting a provision in the 1996 Farm Bill dealing with the commercial transportation of equines for slaughter; horse transport; Humane Horse Transport Standards. The agency folks have basically requested about $400,000 for developing regulations and implementing this program. It is our understanding that the Administration has now requested zero funds for this provision. We are quite concerned. We have a request here for basically the same amount that was originally requested by the people who know how to implement this program. There have been many problems with the transport of horses; animals being shipped on double-deck trailers, and all sorts of inhumane standards with respect o the treatment; almost entirely unregulated. That concludes my testimony, Mr. Chairman. Mr. Skeen. Are you opposed to, say, livestock haulers who take sheep on the triple deckers? Mr. Pacelle. Are we opposed to the shipping of livestock, non-equines? Mr. Skeen. Yes, non-equine. Mr. Pacelle. You know, I'd have to talk to some of our folks in our farm animals section. I don't believe we've ever commented on it. Mr. Skeen. I was just curious about it. Mr. Pacelle. Yes. We're principally concerned about the double deckers with respect to the horses. Mr. Skeen. The horses. Mr. Pacelle. Yes. Mr. Skeen. You realize that the ownership of federal land from a management situation has been over-blown in the press. Only about 900 head; their original compilation was something like 2,000, 3,000, 4,000; something like that. Mr. Pacelle. In terms of the number of VLM horses that go to slaughter? Mr. Skeen. A lot of them are just transported by private deals. How many sectors did you say they have? Mr. Pacelle. Seventy-three. Mr. Skeen. Seventy-three. Mr. Pacelle. Yes. Mr. Skeen. To cover the entire spectrum of it. How many possible inspections are you going to make? How many thousand? Mr. Pacelle. I don't have the figure with me. Mr. Skeen. You mentioned one in your text. Mr. Pacelle. Yes. There are 13,000 licensed facilities. Mr. Skeen. Thirteen thousand. Mr. Pacelle. Yes. Almost 3,000 are registered in research facilities that house laboratory animals. Mr. Skeen. That's a tough job for that number. Mr. Pacelle. Well, it's incredible. It almost strikes me as a farce. The spending priorities need to be set very explicitly. And the B Dealer issue is just taking too much time. How every one feels about the B Dealer issue, it's just taking too much time for the Agency. Mr. Skeen. I understand. Mr. Walsh. Mr. Walsh. Thank you, Mr. Chairman. Thank you for your testimony, sir. I'm just curious. On your list of issues, and you didn't cover all of them, but sustainable agriculture programs is in here. Why would the Humane Society be interested in those? There is strong support I think for those, but why the Humane Society. Why don't you comment on those. Mr. Pacelle. Generally, we're critical of intensive confinement systems for animals when they're being raised for commercial food production. The more intensive the confinement conditions, the less the animals social and behavioral needs are taken into account. Generally, we think there is a correlation between sustainable agriculture and more extensive systems to take the behavioral and social needs of the animals into account. Mr. Walsh. So, you would be opposed to any large scale livestock farming operations? Mr. Pacelle. We'll we're particular about things like battery cages for hens and egg-laying productions when you've got six or seven hens crammed into a small battery cage of confinement systems for pigs. Generally, our view is the animal's welfare is not taken into account as much in those systems. And we prefer more extensive systems, like Mr. Skeen who has them on the range there. Mr. Walsh. I see. Mr. Pacelle. Range fed sheep. Mr. Walsh. Thank you. Mr. Pacelle. Thank you. Mr. Skeen. Thank you for your presentation. [The prepared statement of Wayne Pacelle follows:] [Pages 173 - 180--The official Committee record contains additional material here.] Tuesday, March 11, 1997. UNIVERSITY OF PUERTO RICO WITNESS DR. STUART J. RAMOS, CHANCELLOR OF THE UNIVERSITY OF PUERTO RICO AT MAYOGUEZ Mr. Skeen. Dr. Stuart J. Ramos. Welcome. Dr. Ramos. Thank you. Mr. Skeen. Dr. Ramos, please proceed any way you'd like. Dr. Ramos. I am Stuart J. Ramos, Chancellor of the University of Puerto Rico at Mayaguez. With me is Dr. John Fernandez Van Cleve, Dean and Director of the University's College of Agricultural Sciences. I want to thank you for the opportunity to testify before you today, and for this subcommittee's support of the UPR and other Hispanic serving institutions dedicated to high quality research of equations in science, engineering, and technology. In the past 14 years the Department of Agriculture has been a partner with the University of Puerto Rico in research programs aimed at improving agricultural development and production in the Caribbean Basin region. This region plays an integral part in the nation's agricultural trade mission. Recently, the University has recognized the need for a centralized structure that will coordinate tropical research efforts in the Caribbean with those in the United States in a more efficient and productive manner. Today, there has never been a systemic assessment of assisting research efforts, nor a long time term for addressing many of the regions agriculturally related problems. As a result, the University of Puerto Rico has initiated efforts to establish a comprehensive, multi- disciplinaryinstitute of tropical agriculture, food and environmental safety to serve as the central point for coordinating agricultural research and training efforts within the United States and countries in the Caribbean Basin. There are many factors which support the establishment of the Tropical Agricultural Institute of the University of Puerto Rico. First, the University of Puerto is the only Land Grant Institution in the United States with a tropical agricultural science program positioned in the Caribbean. Second, Puerto Rico is uniquely qualified to support the variety of tropical agricultural research activities. In addition to its multiple ecosystem that goes from a tropical rain forest to semi-arid regions, the island is home to 15 of the 16 known soil samples in the world. Sir, Puerto Rico's agricultural issues are also similar to those countries in the Caribbean Basin. The island shares many tropical diseases, climate conditions, water management and quality, and soil conditions that affect most of the countries in the Basin. Lastly, the University of Puerto Rico is already partnering with many of the countries in the Caribbean Basin, the federal government, as well as mainland institutions of higher education. As the base for mainland research in tropical agriculture, the University of Puerto Rico hopes to be an important tool in the nation's understanding of the agricultural issues affecting this region of the world. With this in mind, Mr. Chairman, we ask for funding to maintained in the fiscal year 1998 for the Department of Agriculture's Special Research Grant Program, which supports tropical research activities. And that $250,000 be added to that account or be provided through the Fund For Rural America account to support the establishment of the Tropical Agricultural Institute. Mr. Chairman, this concludes my testimony. And I thank you again for allowing me to appear before you today. Mr. Skeen. Delighted to have you here. We take your message very seriously. I had the pleasure of visiting your country on the Island of Puerto Rico a couple of times. I never cease to be amazed at how beautiful it is. We've had a lot of discussion about the importation of fruits, and vegetables, and so forth. We need to do something about getting the kind of quality and approaching some of the problems that you've had with plant diseases. So, we take your message very seriously. Would you introduce your companion please? Dr. Ramos. Dr. Joseph John Fernandez Van Cleve, the Dean of the Agricultural Sciences. Mr. Skeen. Bienvenido. Dr. Cleve. Gracias. Mr. Skeen. De Nada, Senior. Thank you very much. Dr. Ramos. Thank you. Mr. Skeen. Mr. Walsh. Mr. Walsh. No questions, Mr. Chairman. Thank you both very much. Dr. Ramos. Thank you very much for your attention. [The prepared statement of Dr. Stuart J. Ramos follows:] [Pages 183 - 203--The official Committee record contains additional material here.] Tuesday, March 11, 1997. REGIONAL AQUACULTURE CENTER WITNESS DR. KEN CHEW, DIRECTOR, WESTERN REGIONAL AGRICULTURE CENTER Mr. Skeen. Dr. Ken Chew. Welcome, Dr. Chew. Dr. Chew. Good to see you again. Mr. Skeen. It's good to see you again. Did you bring any fish with you this time? No fish? Dr. Chew. No fish. Mr. Skeen. We welcome you and would you proceed with your message. We'd appreciate it if you would abstract it if you can. The script in full will be in the record. Thank you. Dr. Chew. Thank you Chairman Skeen and Mr. Walsh, and of course the other Members of the subcommittee who are not able to hear my statement. But we do appreciate the opportunity to come before you today to express our thanks for your continued support over the years. It has been just great. We have put out a good product. In any case, I am Ken Chew. I am presently the Director now of the School of Fisheries. I used to be a former Director of the Western Regional Aquaculture Center; one of the five centers that is funded. And now, I'm on the Board of the Western Regional Aquaculture Center. I'm really here to represent the Regional Aquacultural Center, per se. And the Directors of the five centers are all here and they're sitting behind me. But any how, the center's efforts are basically driven by the industry itself. I'm not going to take a lot of time. I'm going to turn it right over to Mr. Lester Meyers, to my right, who is the President and General Manager of Delta Western, Inc. And over to my far left is Mr. Jim Parsons who is the Research and Technical Director for Blue Trout Farm at Twin Falls, Idaho. Mr. Skeen. Welcome to both of you. Go ahead and proceed. Mr. Meyers. As Dr. Chew said, my name is Lester Meyers and I operate a family farm near Inverness, Mississippi. I have about a 400 acre fish farm and we also have rice and soybeans. For the past number of years I've served as an industry advisor Chairman for the Southern Regional Aquaculture Center. So, I've been associated with the centers here a good bit. There are basically three characteristics that set the regional centers apart from any other government funded operations. First, it's industry driven. The industry advisory people, which are made up of producers, marketing people, bankers, and other individuals set the priorities. Secondly, the Technical Committee, which is made up of research and extension people. They refine our priorities down to a research project. And then thirdly, it has to be basically in a regional significance. In the Southern region--technically, we have to cover two or more states. In the Southern region, all of our projects basically cover seven or more states. And I think this makes it very money efficient by encompassing all of the scientist personnel. In summary, the Regional Aquaculture Centers have a $7.5 million annual budget. In fiscal year 1997 they were funded at $4 million or $800,000 per each of the centers. For the 1998 budget, we strongly urge the $7.5 million funding if possible. On behalf of the aquaculture centers, we thank you for the opportunity to present our case in front of you today. Mr. Skeen. We are glad to have you here. If the other gentleman has a statement he'd like to make, you may proceed. Mr. Parson. As Dr. Chew mentioned, my name is Jim Parsons. I'm the Research and Technical Director for Blue Lakes Trout Farm in Twin Falls, Idaho. I've been personally involved with aquaculture for almost 20 years, usually in a research and development capacity. And as such, I've seen a lot of programs, both state, federal, and university that have offered research assistance to our industry. I truly feel that the Regional Aquaculture Center programs rank among the most well-conceived and productive programs that have been put forth for our industry. I think the success as Lester mentioned is due to several factors. Perhaps the most unique is that it is an industry driven program. Researchers identify, prioritize, and also monitor by an industry committee, and consequently focused on problems that are critical to our success or in often cases our survival as an industry. Secondly, and another very unique function of the RAC centers, is it brings research institutions together in a spirit of cooperation. It's truly refreshing to see researchers, that normally are competing for research dollars through grants, to sit side-by-side and work cooperatively with us on research needs addressed by our industry. So, I believe that both the concept and the reality of the Regional Aquaculture Center programs have demonstrated their worth. This program is an investment that is continuing to contribute manyfold returns to our industry and the nation's economy. And I thank you for your support of this program to date. I think that perhaps one of the best uses of our federal dollars in support of our aquaculture industry is through the full appropriation of the authorized funding level of $7.5 million for the Regional Aquaculture Centers. Mr. Skeen. We thank you. Give me some idea of what the total value, money-wise, in aquaculture production is in the United States today. Dr. Chew, do you have anything? Dr. Chew. Yes. The total production has been slowly increasing. And it's up to 950 million pounds now; close to about $900 million. Mr. Skeen. $900 million? Dr. Chew. Yes. Mr. Skeen. Well, this is a whole venue that has opened up only in the last 20 to 30 years. The research I think has made a direct contribution to that. Mr. Meyers. It is 600 million pounds of catfish. Mr. Skeen. How many? Mr. Parsons. He had to put that in there. Mr. Meyers. Six hundred million pounds of catfish. Mr. Skeen. I was going to ask you what kind of fish do you have. Mr. Meyers. Catfish. Mr. Skeen. I love trout and catfish. That's a good combination. Dr. Chew. If I might just add a point. I just came back from a U.S.-China joint coordinating panel over in NOAA. I was meeting with the Chinese. They were talking about their little figures of aquaculture production. They have a total of seafood production of 62.8 billion pounds right now. He said 55 to 60 percent of that is from---- Mr. Skeen. This is in China? Dr. Chew. In China. Mr. Skeen. What's the population of China? Dr. Chew. It is 1.3 billion people. Mr. Skeen. No wonder. They've got to eat a lot of fish. Dr. Chew. Well, I'll tell you they're going at it and they're looking at us for technology. Mr. Skeen. That's quite a population base. Mr. Meyers. The per capita consumption of fish in the United States is 13 to 14 pounds. Mr. Skeen. Thirteen to 14 pounds. Mr. Meyers. Eight-tenths is catfish. Eat it one more time and we'll double our industry. Mr. Skeen. I don't want you all now fighting between catfish and trout. Mr. Parsons. No, we're not. We're not. Mr. Skeen. We were in Hawaii recently and went through the new research station that's being developed there and the propagation of marine fish. It's a tremendous situation in the laboratory there. They're practically carved out of almost nothing. This is becoming a very vital part of your food culture system of the whole country. Dr. Chew. Well, very definitely because it is estimated that 70 percent of our present catchable stocks in the ocean now are depressed. Mr. Skeen. Do you know what's depressed it? Dr. Chew. If you want to, you can go and catch with nets. Aquaculture is going to have to pipe in. Mr. Skeen. We will revitalize this whole situation. Thank you. Mr. Walsh. Mr. Walsh. Thank you, Mr. Chairman. I'm an avid fisherman. I also did a little fish farming once. I've been a lot more successful at fishing than I was at fish farming. I'll tell you my story. I was a Peace Crops volunteer in Nepal which is a little country between India and China. There was a local agriculture station nearby, government agriculture. They grew grass carp there. And so we were going to do some fish farming in my district, but we had to do some soil samples first. So I took the soil samples up to the Capitol. I was gone for a couple of weeks. I told the farmer, don't do anything until I come back. When I got back there was a great big dry whole in the ground. It was all sand; it just was not going to hold water. Over there you don't just blow a whistle or pick up the phone and get a payloader. You get 20 guys with these things called codallies, which are like a maddox. And that's how they move, I don't know how many, yards of soil. It wasn't going to hold water very long. So, we didn't do any fish farming in that place. They saw the benefits. It was a growing industry there too. I think it really will benefit everybody. I think it will help the wildstocks tremendously. It already is in the fresh water industry. Not a lot of pressure on catfish in the wild I guess in the North as much as it is trout. But they're eating a lot of catfish in upstate New York; now, a lot more than they used to. I'm kind of interested, and maybe Dr. Chew, you can answer this. You mentioned the wildstock, specifically seafood. We're talking primarily about fresh water aquaculture here. But, you know, the cod stocks and haddock and all of the popular fish stocks. I know they're doing salmon. Salmon is commercial fishing in other countries, not quite as much here, but do you see the development of commercial fisheries for wild blue water fish stocks like cod, haddock, halibut; fish like that? Dr. Chew. Yes. I think that very definitely there has been a big push to go into the marine area for production enhancement, you might say, putting small juveniles back into the open ocean. There is a controversy on those, but by the same token, this whole thing wasn't until stocks had been so depressed and eliminated, something had to be done. I know that being the Director of School Fisheries, we have a real solid program in resource and management. We try to help train people to go out to maintain the wildstocks at their level or improve it as much as we can. It's a very difficult situation right now. The halibut, fortunately, it's coming back, for example, in the North Pacific. And thank God, you know, we have one major fish we like, like the North Pacific salmon run in Alaska. At least it's holding its own in all of these things. But there are other stocks like even the Georgia banks and right off our coasts in California. In Washington, the sea bass, the little sea basses and all of these stocks that used to be in abundance is gone. The fisheries are disseminated. Mr. Walsh. In Florida, they've pretty much banned netting in the inter-coastal waters. Dr. Chew. Yes. Even, for example, on the global scale, some of the people like in the South China Sea they just abandoned a lot of these fishing areas because they're all fished out. Mr. Walsh. My question was, as opposed to our artificial spawning in hatcheries and so on, do you see businesses like yours only in the ocean with a set-up of, not netting, but setting up a fish farm in bays in the ocean where you could raise the fish from spawn or from fingerlings up to a point where they're commercially saleable and not even have to go out and net the wildstocks? Dr. Chew. It's done now in the Northeast in Connecticut. Mr. Walsh. It's done on salmon. Is it done also on cod and other stocks? Dr. Chew. Not yet. Not yet. They're doing some on flat fish and the likes, and some of them like the red fish down in the south, in the Gulf. We're so brand new in this whole concept of aquaculture, because when you think about it 30 years ago when you asked somebody on the street what's aquaculture, they scratched their heads. Is it agriculture or something like that? And so really it's a new thing. The trout, the salmon, and all of these sorts of things. A lot of things are happening. Catfish--a lot of the research work that has gone on, and this is what Lester alluded to, gone on back in the days of the experimental station, the experimental advisory in the USDA. They helped the catfish industry really get started way back. And in the trout industry, the same thing, to a great extent. So, many of these other fisheries that deal with the marine environment, it's just Johnny come late. And it's just starting to break through. Like for example, the very tasty--if you haven't tried it, you should try it, black cod from the Pacific Northwest. It is very oily, loaded with Omega 3s and things. And they're starting to culture those in British Columbia now and in the National Main Fisheries Service. They're doubling with it over in some of our local areas in Puget Sound. So, all of these new things, and also halibut, same thing. We're all looking at it very specifically with the idea of getting them through the hatchery state and maybe, like you said, put pans out and growing them up to market size and the like. Mr. Walsh. Was there any--you may know this and you may not. Was there any reduction in the salmon run that would have been generated by the year the Valdez broke up in Alaska? Was there any impact on the succeeding year? The year that class of fish would have been generated, was there any reduction in the out years from that? Dr. Chew. In fact, I talked to one of the researchers off the Valdez area who said, it came and they went. And basically, things are getting back to normal, that they don't see any major effects due to this. Mr. Walsh. I just finished a book. It was a novel. It was fiction by a fellow named Kenkiai who wrote about a fishing village up in Alaska. And one of the things he talked about was a lot of it had to do with the effects of pollution and some of the things that were going on in the world. One of the things that he postulated was that a major oil spill destroyed much of the fish. While he wasn't talking about the Valdez oil spill he comments that every other year there was a real bad salmon run because the year the shipwreck occurred a lot of the fry were killed off. Dr. Chew. That's not necessarily true because they are somewhat healthy, they come back. I mean, all it takes is a few. And this is what they're finding up in Prince William Sound and in some of these areas. In fact, in some of our farming operations, ocean ranching for example, in the Southeastern, you read about fish being given away. We have so many salmon. A lot of that is due to the aquaculture effort. Mr. Walsh. The price of salmon was so far down, they weren't even going out for them because there were so many of them. Just one last pitch. Tunicin Lab is in my district, Cortland, New York, developed most of the salmon fish. I think they, to a large extent, helped to make salmon farming a practical reality. And they're still there working away. Thank you very much. Dr. Chew. I just want to clear one point. We're presently receiving $4 million for the five centers. I think what Lester alluded to was we were authorized for $7.5. and if we can realize that we only have one increment at one time, we have $3,750,000. And then we've got an increment of $250,000 five years ago. Mr. Skeen. That was the last raise you had. Dr. Chew. That was the last raise. So, we're looking for it. Mr. Walsh. I think it's a good investment. We will do everything we can. Dr. Chew. Well, good. Mr. Skeen. We thank you. [The prepared statements of Dr. Ken Chew, Mr. Jim Parsons, Mr. Lester W. Myers and additional supporting statements follow:] [Pages 210 - 273--The official Committee record contains additional material here.] Tuesday, March 11, 1997. NATIONAL WATERSHED COALITION WITNESS RICHARD G. JONES, CHAIRMAN Mr. Skeen. All right, next we have Richard G. Jones with the National Watershed Coalition. Mr. Jones. Thank you, Mr. Chairman. Mr. Skeen. Welcome. I'm glad you're here. Mr. Jones. I'm Richard Jones. I'm the current Chairman of the National Watershed Coalition. The National Watershed Coalition is pleased to present testimony in support of the most beneficial water resource conservation programs ever developed. We believe the Small Watershed Program, the Public Law 566, and the Flood Prevention Operations Program, Public Law 534, are programs that address our nation's vital natural resources, do so in a way that they provide more benefits than costs and serve as models for all federal programs. We are advocates of both the Small Watershed Program and the Flood Prevention Operations Program administered by the USDA's Natural Resource Conservation Service. These programs deserve much higher priority than they have had. Even in difficult financial times, their revitalization would pay dividends in monetary and other benefits and jobs. Every state in the United States has benefited from the Small Watershed Program. In order to continue this high priority work in partnerships with states and local governments, the Coalition recommends that fiscal year 1998 funding level of $350 million for small watersheds and flood prevention operations, Public Law 566 and Public Law 534. We recognize in these difficult financial times that Congress may not find it possible to provide that amount. But we also believe we are not doing our job of helping recognize the true need if we continually recommend the federal share of these needed program funds be less. The local project sponsors in these federally assisted endeavors have also made tremendous investment. Additionally, the Coalition supports the $10.5 million for watershed planning, $13 million for River Basin surveys and investigations, and $38 million for the Resource Conservation and Development Program. The Coalition also supports $6.6 million for the Forestry Incentive Programs and suggest that the Emergency Watershed Program be provided with $20 million to allow the NRCS to provide rapid response in times of natural disaster. We would like to express our great concerns with the way the Administration's budget proposes to change the Watershed Program funding in fiscal year 1998. The Administration proposes taking $60 million from the Public Law 566 Small Watershed Program and putting it in the NRCS Conservation Operations account. While the Administration's budget suggest this approach simply combines some of the NRCS' technical assistance expense into one account. And the funds will be used for water resource assistance, we believe this is a means to put these funds in an account where they will not be used for Public Law 566 Small Watersheds, but will instead be spread around with virtually no program accountability. In our view, this represents a long-time desire of some in the Administration to circumvent the will of Congress and eliminate the Small Watershed Program. The Administration's budget also eliminates any funding for the 11 watersheds authorized by the Flood Control Act of 1944, which was about $18 million in 1997. But suggests that worthwhile Public Law 534 projects can be continued under the Small Watershed Program. How can that be with no adequate funding for small watersheds. We see this, again, as an administrative way to eliminate a Congressionally mandated program, and one which has provided many millions of dollars of benefits to society. Watershed project sponsors who were encouraged to assume that responsibility by the federal government now feel abandoned by that same federal partner. The Administration's budget also provides for an additional $18 million in the RC&D Program account, which we believe was the original Public Law 534 funding. They would use this money for local non-federal watershed and range land coordinators. It is time for lesscoordinating and more actual work on the ground. The money taken from the Small Watershed Program, $60 million, put in the Conservation Operations account, and the $18 million in the RC&D account would be far better used and provide more real benefits if left in programs where Congress intended it. Please don't allow this Administration's money switching scheme. With the downsizing, in the NRCS' experience, we would be remiss if we did not express concern as to their ability to provide adequate technical support in these watershed program areas. The NRCS technical staff has been significantly reduced. And budget constraints have not allowed that expertise be replaced. We see many states where the NRCS capability to support responsibilities in these program areas is seriously diminished. This is a disturbing trend that needs to be halted. This downsizing has a very serious affect on state and local conservation program. The delivery system currently is in place. And by downsizing NRCS, we are ruining the most effective and efficient coordinative means of working with local people to solve environmental problems ever developed. Our system and its ability to produce food and fiber is the envy of the entire world. These programs are the most important federal programs in terms of national priorities. The Watershed Coalition thanks you for this opportunity to testify. Mr. Skeen. We appreciate your testimony. Unscramble for me, if you will, the differences between the various Public Laws you've cited, 566 and 534. Then also give me an idea of what they're trying to compress that into or what the Administration is trying to propose. Mr. Jones. The Public Law 566 Small Watershed Program came about in the 83rd Congress. It is administered by local people at the local level. Mr. Skeen. At the local level. Mr. Jones. At the local level. The 534 Program was a flood prevention operation program established by the government in which they came in, in certain watersheds like in Oklahoma. I know they've done a lot of work with that under the federal government. That was prior to the 566 Public Law. Mr. Skeen. I see. You're just stepping it up one notch this time. Mr. Jones. Yes. Mr. Skeen. Now, the Administration is proposing to put all of that money together. Mr. Jones. Yes. They're funding it at $101 million. Mr. Skeen. Your concern is that you'd lose your Small Watershed Program. Mr. Jones. Yes. Mr. Skeen. Thank you. I appreciate that. I just wanted to get the nuances straight with this thing. Mr. Kingston. Mr. Kingston. Thank you, Mr. Chairman. Mr. Jones, one of the questions I've always had and have never quite been able to figure out on RC&D, there seems to be some overlap with them on what they're able to do in a community development block grant on some of the projects. Can you clarify in my mind better what RC&D does? I work closely with our folks and support the program. Mr. Jones. Well, the RC&D, the Rural Development & Conservation Program is also a local oriented program. It's a multi-jurisdiction program that local people, through a counsel, developed at the local level, and through a coordinator from NRCS. They do rural development work. They can work anywhere in the area of public housing, to hospitals, to flood prevention, to conservation, lumber mills, saw mills, those kinds of things. The difference between them and local watershed districts, the watershed district is a flood damage reduction program run by local--setup by state law. Mr. Kingston. Well, they seem to have a wide mission statement and a great multiplier. I see a woman in the back shaking her head vigorously. So, let me address both of you. It's a very good program, yet, at the same time, I wonder aren't there other federal programs doing it? And the reason why I say that is because I suspect that RC&D can do it better. I look at some of their programs and think these community development block grants do some of the same things. She's assured me there are none. Mr. Jones. I was not. I was going to, if allowed to, refer to Ms. Peggy Blackman who is on the National Board of the RC&D Association. I'm with the National Watershed Coalition and do not propose to be an expert in the RC&D area. Mr. Kingston. Okay. Mr. Jones. We are concerned that they shipped the money from the watershed program over to RC&D. That is our concern. Ms. Blackman is the expert who happens to be in the back row who can answer your question, if allowed. Mr. Skeen. Please come forward. Ms. Blackman. I'm Peggy Blackman and I'm from Marion, Kansas. I am a legislative liaison for the National Association of RC&Ds. I'm on the Board. I'm also State Chairman of the Kansas Association. And yes, I was shaking my head vigorously because I participate with a lot of dedication to this program. I have been a mayor, an elected official of a very small community in rural Kansas. I know that the RC&D Program gave us the ability to go into programs that we simply were not aware of. Elected officials in your small communities have no time to go to meetings and so forth. Maybe you have staff and so forth from urban communities that do so. I also was the Chairman of the CDBG Task Force for the State of Kansas when the CDBG funds were turned over at the state level for the Small Cities Program. So, yes. I can answer to that too. The federal government's idea of a small city is anything under 50,000. We have over 13 million people in this nation that live in towns of under 2,500 in population. And the RC&D Program brings the technical assistance through one coordinator or 290 councils. I mean, each one has a coordinator. We receive nothing but an office space and a coordinator and the funding for the RC&D Program. Now, of that 290, 118 new ones have been approved and we have 39 additional ones waiting for authorization, plus new ones filing paperwork because they see the RC&D Program works in rural America. So, that is the vast difference between the CDBG funding and what we see coming through. We take the technical assistance offered through the RC&D and just in 1996 utilized by matching for every dollar coming in $10 to $20 of the federal funds for assistance. It ended up with over $432 million coming into rural America that helped with infrastructure, economic development, housing; a whole gamut of things. It gives us the ability to network, and we do not have any other vehicle so to speak in place to do that. Again, Richard answered very correctly. We do not have nor have allowed jurisdictional boundaries to get in our way. Mr. Kingston. Well, thank you Ms. Blackman. I appreciate that answer. Mr. Skeen. I'm certainly glad we got a great education on the program. That lady knows her business. Ms. Blackman. I've been in it a long time. Mr. Skeen. Thank you very much. [The prepared statement of Richard G. Jones follows:] [Pages 278 - 284--The official Committee record contains additional material here.] Tuesday, March 11, 1997. KOTASYS PROJECT WITNESS RICHARD MOLSEED, ASSISTANT VICE PRESIDENT FOR MARKETING AND STRATEGIC INITIATIVES Mr. Skeen. Mr. Richard Molseed from the Kotasys Project. I hope I'm pronouncing that right. Mr. Molseed. That's correct, Mr. Chairman. Thank you for seeing us today even though there was some mix-up about witnesses today, and we apologize for that mix-up. Mr. Skeen. Well, we apologize for not getting it straightened out earlier with you. So, we will share the blame with you and go right on about our business like we really intended to do in the first place. So, welcome. Glad you're here. Proceed. Mr. Molseed. Thank you, Mr. Chairman and Members of the subcommittee. My name is Richard Molseed. I'm Vice President, Marketing and Strategic Initiatives for McKennan Hospital in Sioux Falls, South Dakota. And I have administrative responsibility for the development, implementation, and operation of our tele-medicine operations in South Dakota. Project Kotasys will sponsor and evaluate continued development of a pilot tele-medicine system being built in South Dakota to care for patients, and support health care providers, supervise allied health, instruct medical students, and proctor medical residents in remote areas of a five-state region. McKennan Health Services together with Sioux Valley Health System and Rapid City Regional Hospital have begun experimenting throughout South Dakota using federal grants, state support and internally generated funds to install basic tele-medicine equipment, connecting the hospitals with select rural constituencies. The new consortium of these three pioneering hospitals, together with the University of South Dakota Medical School, and Georgetown University Medical Center is planning to expand into a statewide tele-medicine web link, linking providers, patients, students and medical residents with each other as well as with central hospitals. We believe the Kotasys project to be unique in a number of ways, first of all, in project design. From the beginning, the project was designed to define quality, cost and access of medical information to a large and diverse geographic region. Secondly, Kotasys integrates various technologies. The development of the Kotasys is unique in developing a tele- medicine network utilizing a public access switch technology. Kotasys will integrate interactive video, satellite distance learning, tele-radiology, and a wide area computer network technology into a single accessible tele-medicine project. Dissemination of information, Kotasys places an increased value in dissemination of information to physicians, staff, patients, and general community members alike by incorporating distance learning and creating rural access tothe University of South Dakota Medical School Library resources. Fourth, the regional focus, unlike other tele-medicine projects, Kotasys is truly regional in scope. Supported by the University of South Dakota Medical School and the three largest medical centers in the State of South Dakota, the Kotasys Project will actually impact all of South Dakota and portions of Minnesota, Iowa, Nebraska, Wyoming, and Montana. To my knowledge, no other comprehensive tele-medicine network has been designed to effectively impact rural health care over such a large geographic region, utilizing public switched and open architecture technology. Fifth, Kotasys actually creates a public access tele- medicine network. This done by creating a consortium of competing health systems. This, to my knowledge, will be the first that competing health systems have joined to create a public access tele-medicine network on a multi-state basis. And finally, Kotasys is designed from a rural perspective. Successful tele-medicine programs are designed to meet clearly defined rural goals. Kotasys is consistent with meeting the needs of rural practitioners to reduce isolation, increase rural resources, include long-term care facilities, and promote rural economic development. This in a nutshell is a brief description of the Kotasys Project. I would be happy to entertain any questions the committee may have. Mr. Skeen. Well, thank you very much for the dissertation. I was shocked to find out the other day that one of our larger communities in the State of New Mexico has no fiber optics which I think the whole system depends upon. There is no fiber optics delivery into Farmington, which is in the Four Corners area. I want to do something about getting that rectified because rural communities, this is the only help that they really have. This is the greatest help that they could have is being in a part of this system as far as health care delivery. Mr. Molseed. To be able to bring the specialties that's found in the two extremes in the State of South Dakota and bring that to the population in another state, and many of them the Native American population where they have tremendous health needs, and to be able to do this with competing networks and through public access where that can be reached anywhere through the public telephone network, is we think a real step forward in the development of sustainable cost effective tele- medicine to rural communities. Mr. Skeen. Thank you. Mr. Kingston. Mr. Kingston. Thank you, Mr. Chairman. Mr. Molseed, how much is this appropriation? Mr. Molseed. The current appropriation at Kotasys is one of four projects where $10 million has been appropriated for four projects. We're looking for a $5 million appropriation to move forward on the Kotasys Project. Mr. Kingston. And this is the only one of its nature in the country? Mr. Molseed. No, sir. There are a number of tele-medicine programs throughout the country. But most of them are proprietary in nature. Many of them use a closed network so that no one has access to them. And most of them are in much smaller defined geographic areas, with perhaps the exception of the Medical College of Georgia which has a number of their real sites connected interactively. But this brings together a multi-state, large region and competing networks that have agreed to move forward with an open architecture to allow access by any mid-level practitioner to physician, and nursing home area within a five-state region to access the medical knowledge, do distance learning, or interactive tele-medicine consults with specialists at any one of the four larger medical centers in the state. Mr. Kingston. The $5 million is the total or the federal share? Mr. Molseed. That would be the federal share. Mr. Kingston. What is the total and how much is the State putting in or the hospital? Mr. Molseed. Well, we're asking for $5 million for the next federal fiscal year appropriation. And I don't know at the present time what the total cost of the project would be. We're anticipating that probably direct expenditures in the State of South Dakota to be $12 million over three years. Mr. Skeen. I hate to interrupt you, but we have a vote in progress. Mr. Kingston. Okay. Saved by the bell. Mr. Skeen. Thank you very much. We're adjourned. [The prepared statement of Richard Molseed follows:] [Pages 288 - 295--The official Committee record contains additional material here.] Wednesday, March 12, 1997. COALITION FOR FOOD AID WITNESS MICHAEL R. WIEST, DEPUTY EXECUTIVE DIRECTOR OF CATHOLIC RELIEF SERVICES Mr. Skeen. The committee will come to order. We have outside witnesses today. Is anyone here from the Sac and Fox Nation? [No response.] Mr. Skeen. No Native Americans? [No response.] Mr. Skeen. Then we will move on to Michael R. Wiest. Welcome. Your entire written testimony will be entered in the record. If you will abstract it, we will appreciate it. It is nice to have you here this morning. Mr. Wiest. Thank you very much. Mr. Chairman, thank you for this opportunity to testify on behalf of the Coalition For Food Aid. My name is Michael Wiest. I'm the Deputy Executive Director of Catholic Relief Services. And I'm responsible for overseas operations for Catholic Relief Services. I've been with that agency, CRS for 24 years, and 20 of those years I've lived and worked in Africa and in Asia, and have had the privilege of managing on the ground Public Law 480, Title II Programs in many countries throughout the world. I'll now summarize my written testimony which will be submitted for the record. Thank you. The Members of the Coalition For Food Aid, like Catholic Relief Services are private voluntary organizations and cooperatives that conduct Public Law 480, Title II Programs in less developed countries. Cooperating sponsors take full responsibility of commodities donated under Title II. Except for special emergency situations, all Title II food must be provided through cooperating sponsors, the Red Cross, or the United Nations. The Title II food commodities are purchased, processed, fortified and packaged in the United States. And 75 percent of the commodities must be shipped on U.S. vessels. CRS, Catholic Relief Services, believes that the United States, as a member of the world community has a measure of responsibility for the 800 million people in the world suffering from hunger. To meet their minimum nutritional needs, 22 million tons of food aid are required. This year the United States will provide less than 3 million tons; a 40 percent drop from five years ago. The regular Title II Program is shrinking in the face of urgent needs. Sadly when the U.S. cuts its assistance other governments follow. Congress has mandated that Title II Programs be implemented by private voluntary organizations and cooperatives. There is a very good reason for that mandate. Cooperating sponsors have extensive networks in poor communities where the needs are greatest. Catholic Relief Services works with community based, self- help organizations in over 80 poor countries throughout the world. This extensive network cannot be duplicated by any United States Government agency for reach or accountability. Unlike contractors, cooperating sponsors commit substantial amount of their own human and financial resources. For example, last year Catholic Relief Services matched $71 million in private contributions to the $80 million of Title II food aid received. By using cooperating sponsors food aid is able to reach the poorest of the poor where and when it is needed, regardless of political, religious, or ethnic considerations. For instance, in Haiti, Ghana, or Kenafaso, and India School Lunch Programs improved students' attention and attendance, especially among young girls. Maternal Child Health Programs throughout Africa, Latin America, and South Asia distribute nutritious food for mothers attending clinics. This supplement, accompanied by basic health education, improves the health and vitality of both mother and child. And self-help public work projects construct wells, clinics, schools, roads, and improve agricultural practices in places as diverse as Ethiopia, Bangladesh, and Guatemala. Mr. Chairman, I sincerely want to thank this committee for its past support of Public Law 480. And I urge you to consider the following recommendations as you determine the fiscal year 1998 appropriations. First, no further cuts in Public Law 480. The Administration's budget requests an increase in International Affairs, but cuts Public Law 480 by 10 percent. Second, Public Law 480, Title II should be funded at a level to meet minimum requirements. The legislation mandates a minimum tonnage for Title II Programs. For fiscal year 1998 this would require $886 million, still less than in 1996. Three, support administrative changes to ensure that Title II reaches the neediest. Private voluntary organizations and cooperatives are increasingly pressured by AID to program Title II only in those countries that match AID priorities. This stops us from providing Title II food to the neediest countries and reaching the poorest of the poor. Mr. Chairman, I thank you for this opportunity to testify. And I'd be glad to answer any questions that I can. Mr. Skeen. Mr. Wiest, I appreciate what you've said in your testimony because the most severe problem I know of is hunger in various parts of the world that causes internal strife. It leads to usually warlike actions between neighbors and so forth. We are one of the few countries in the world, along with a few others, that have small populations but high agricultural production. They've been trying to feed the rest of the world. I want to commend you on the work that you've done and the objectives. It has been a very difficult, difficult process. I'm sure that there ought to be medals or something of real worthwhile note for the kind of service that you have given, personal service. The Administration is proposing that Congress rescind $50 million from the Title I Program and to give this to the WIC Program. Have you looked at that proposal and what are the consequences of it to Public Law 480 if such a reduction takes place? Mr. Wiest. I am familiar with your proposal, Mr. Chairman. I haven't studied the proposal. In our opinion, Catholic Relief Services, this would be a bad idea because it would have a further impact on the overall ability of Public Law 480 to reach the poor overseas, regardless of the fact of whether it's Title I or Title II. Mr. Skeen. You didn't mention that in there. That's why I asked the question because that's one of the first notable changes that they've made in that particular program area. Well, we certainly appreciate your work and we appreciate your testimony. We're going to do our best because we think this is a very important program. It has always been well-administered. I think you've cleared up a lot of the troubles about deliveries and things of that kind in foreign countries where they've had a terrible time. We've sent them a lot of food, but it never gets to the hungry. It goes somewhere else. I think you've done a good job in making sure it gets to where it's supposed to go. Thank you, sir. Mr. Wiest. Thank you, Mr. Chairman. [The prepared statement of Michael R. Weist follows:] [Pages 300 - 316--The official Committee record contains additional material here.] Wednesday, March 12, 1997. AD HOC COALITION ON PUBLIC LAW 480 WITNESS JOHN C. KIRTLAND Mr. Skeen. Next we call on Mr. John Kirtland. Mr. Kirtland. Good morning, Mr. Chairman. I'm joined today by Bob Bore. Mr. Skeen. They say that's a familiar name around this place. Mr. Bore. Mr. Chairman. Mr. Skeen. Bob, it's good to see you. Mr. Bore. Thank you, sir. Mr. Kirtland. Bob, of course, as you know is Counsel to the USA Rice Federation. Mr. Skeen. Well, I'm glad to see he's still counseling. Mr. Kirtland. Yes, sir. Mr. Skeen. We think a great deal of Mr. Bore. Mr. Bore. Well, thank you very much, Mr. Chairman. Mr. Skeen. He's been a great guy to work with. Mr. Kirtland. He's been a mentor of mine for about the last 20 years. I've appreciated and learned a lot from him. Mr. Skeen. Well, you're being steered in the right direction. Mr. Bore. Thank you, sir. Mr. Skeen. Your entire written testimony will be in the record. If you will abstract it, we'd appreciate it. Thefloor is all yours. I see that this is a day's ration of food; 80 grams of wheat. That doesn't look like much, but it makes a whole lot of difference to people who are starving to death. Mr. Bore. It really does, Mr. Chairman. Mr. Skeen. Thank you, sir. Go ahead. I'm sorry to interrupt you. Mr. Kirtland. Thank you, Mr. Chairman. Thank you for including our full statement in the hearing record. My name is John Kirtland appearing on behalf of an ad hoc coalition supporting increased funding levels above those proposed in the President's fiscal year 1998 budget request for Food for Peace, Title I, consessional credit sales and the Food For Progress Program. The coalition members that we're representing today include the USA Rice Federation, the National Association of Wheat Growers, the National Cotton Council of America, the National Council of Farmer Cooperatives, the American Soy Bean Association, the American Maritime Congress, the Maritime Institute for Research and Industrial Development, the Transportation Institute, Gulf Coast Transit Company, and Liberty Maritime Corporation. Others have asked to join our coalition on Title I. And they will be contacting the committee directly themselves to indicate their support of the coalition. Now, Mr. Chairman, Title I of Public Law 480 continues to be a key instrument of trade development policy even as it also serves as an important Food Assistance Program. The coalition respectfully requests that the appropriations for Title I be maintained in fiscal year 1998 at funding levels not less than those provided in fiscal year 1997. And that the proposed rescission of $50 million be disapproved with explicit instructions to the Department to allocate fully all appropriated monies for the Title I Program. Mr. Chairman, the Administration's proposal to reduce Title I is very short-sighted. The prosperity of American agriculture depends upon strong export markets and new foreign markets must be developed every year. New foreign markets must be developed every year to maintain farm income. Our agricultural exports last year were a record $60 billion in value. And a net farm income was a record $50 million. But USDA's Economic Research Service projects a 12 percent decline in U.S. corn exports this year; a 12 percent decline in corn exports just this year, and a 23 percent decline in wheat exports just this year. And that's projected by the USDA's Economic Research Service. Mr. Skeen. This is from the Public Law 480 Program? Mr. Kirtland. No, sir. The U.S. corn exports are projected to decline by 12 percent; commercial and otherwise. And total U.S. wheat exports are projected to decline by 23 percent as compared to last year. So, this is a very serious concern of all of the agricultural commodity organizations that have joined our coalition. Now, Mr. Chairman, our farmers continue to rely upon Public Law 480 and other developmental programs to open potential new markets. The new democracies in Eastern Europe and the former Soviet Union could become major commercial markets for U.S. agricultural commodities. Today, they purchase about $2 billion a year and that actually includes Food For Progress and Food For Peace as well as commercial shipments. But in Western Europe, total sales on an annual basis are $8 billion to $10 billion. We believe that Eastern Europe and the former Soviet Union have the potential to become that large of a market if we actively use Title I today. Mr. Chairman, Title I's recent successes are impressive. At least eight countries have graduated in the 1990s from Title I to commercial GSM Program shipments. And that's just in the 1990s. Title I, accordingly, remains extremely important. In fiscal year 1996, for example, one half of all of the Title I shipments went to ten Eastern European countries. And this year seven of them will receive Title I allocations. Now, Mr. Chairman, Congress for 43 years has funded Title I shipments with a combined present day value of $88 billion. That's about $2 billion a year over 43 years in current dollars. This long term commitment has helped produce huge gains for American agriculture and the industries that support it from the farm to the market. But since fiscal year 1990, Mr. Chairman, Title I allocations through this year have been reduced 73 percent; a 73 percent reduction through fiscal year 1997. And the Administration proposes a 50 percent cut from last year in the Title I appropriation. This is an unfortunate reversal of longstanding support. Our future commercial market share and thus our future farm prosperity may well depend upon stronger commitments now to Title I and other market development and food assistance programs. So, to preserve prosperity on the farm, and promote future export sales, the coalition strongly urges this subcommittee to reject the Administration's proposed additional cuts in Title I funding. Thank you, Mr. Chairman. Bob and I will be happy to answer any questions you may have. Mr. Skeen. In talking about the reductions, the proposed reductions, in this thing, we're talking about a rescission of $50 million from the amounts we've appropriated to Title I. This equates to some 200,000 metric tons. Mr. Kirtland. That is correct, Mr. Chairman. Mr. Skeen. How many people are we talking about? Mr. Kirtland. How many people can be fed by 200,000 metric tons? Mr. Skeen. Yes. Give me some kind of a number. Mr. Kirtland. I don't know, sir. Perhaps Ellen knows. I don't know the answer to that, sir. Mr. Skeen. It would be interesting. Mr. Kirtland. We will find out and submit it for the record. Mr. Skeen. Match up what you're doing to people with what you're doing with reductions. Mr. Kirtland. Yes, sir. We'll submit for the record our response. [Clerk's note.--The information is contained in Committee files.] Mr. Skeen. If you could do that, please give us that kind of information. Mr. Kirtland. Yes, sir. But if you look at since 1990 the value of commodity allocations under Title I has declined from three-quarters of a billion dollars down to an allocation in fiscal year 1997 of only $205 million. That's a 73 percent decline that we've already sustained. And our view is this. It's true that in 1996 the American farmers had the best year perhaps in history with $60 billion in export sales, $50 billion in net income, $233.5 billion in gross sales, gross receipts from their farms and livestock. But this kind of prosperity is premised upon continued development of new export markets; particularly in view of the competition from Latin America. And we think that over 43 years the Food For Peace Title I Program has proved itself over and over again. Mr. Skeen. I was interested in looking at the match-up and the figures you used. This is a ram into commercial production from a public program that equates to a good, sound economic base for shipments. Mr. Kirtland. It is. Mr. Skeen. I understand that through the Panama Canal we are shipping more corn into China than ever before in our history. Mr. Kirtland. Yes, sir. You may have noticed, Mr. Chairman, yesterday in the Wall Street Journal it reported that soy been prices are at an eight-year high right now. One of the reasons is that China is increasing soy bean purchases from U.S. farmers this year by substantial amounts. You know, our farmers really, really depend upon this. One of our coalition members has told me that of the 50 countries in the world that regularly buy U.S. farm commodities, 41 of these countries are graduates of the Title I Program. Mr. Skeen. The Title I Program. Mr. Kirtland. Yes, sir. Mr. Skeen. So, it's been very effective. Mr. Kirtland. Well, I think so. There are a few examples to the contrary. A few countries have disappointed us in terms of becoming long-term customers. But around the world, you know, Indonesia and the Philippines buy almost a billion dollars worth of farm products today from the United States. Brazil and Columbia buy $600 million each a year from the United States. Peru buys $400 million a year from the United States. The list goes on and on; Egypt $1.5 billion. These countries are graduates of the Title I Program. Now, our farmers today are benefitting from the commitments that Congress made over decades to develop these markets. The point that our coalition wants to make is that we cannot afford to give up one of the principal weapons that we've had in breaking open these new markets. It is shortsighted if this committee, if this committee three years from now has to come in with an emergency bail out plan for American farmers costing $30 billion or $40 billion because prices have collapsed, because markets have collapsed overseas, then there won't be money for anything else. We have to continue to develop these export markets. It's a life or death thing for farmers. Mr. Skeen. Thank you very much because I think that's the crux of the whole situation. We appreciate the major points you've made, and they're very interesting. Mr. Kirtland. Thank you, sir. Mr. Skeen. I think they are well-taken. Mr. Bore. Thank you very much, Mr. Chairman. Mr. Skeen. Thank you, sir. Mr. Bore. It's a pleasure to see you again. Mr. Skeen. Well, it's a pleasure to see you. Take care of yourself. Mr. Kirtland. Thank you. [The prepared statement of John C. Kirtland follows:] [Pages 321 - 326--The official Committee record contains additional material here.] Wednesday, March 12, 1997. CENTER FOR BUDGET PRIORITIES WITNESS BOB GREENSTEIN Mr. Skeen. Bob Greenstein, Center for Budget Priorities. I understand we rushed you a little bit. Mr. Greenstein. No. That's fine. Mr. Skeen. Well, we appreciate the response. You look like you're well-equipped to take care of the thing. We will put your entire testimony in the record, the written record, and if you will summarize now, we would appreciate it. Please commence. Mr. Greenstein. Thank you, Mr. Chairman. I appreciate it. I would like to talk this morning primarily about the WIC Program. I'd just like to start by noting the long standing support of this subcommittee and you and other Members for the WIC Program. It's due to your efforts that it's reached the level that it has today. As you know, the research on this program shows that it's probably the single most effective of all social programs the federal government runs here in the United States. I'd like to discuss some funding issues relating to WIC in 1997 and 1998 as you've just mentioned. The Administration has requested a supplemental for 1997. And the supplemental is necessary to prevent the number of women, infants, and children served in the WIC Program from declining by several hundred thousand. The question I think then comes up is, why are we in this situation? Is there a management problem in the WIC Program? And is this requestreally needed? I've been looking at the figures in recent weeks and have prepared a paper on this that I've provided earlier in the week to staff here. Basically, Mr. Chairman, several things have occurred. This subcommittee has encouraged the Department in recent years to squeeze down the amount of money that carries forward from one year to the next. One of the things that's happened is that it now turns out that the amount of money that's carried forward from 1996 into 1997 and is available this year is $50 million to $65 million less than had earlier been projected. So, in a sense progress was made on that front, but it's one of the factors that create the problem and the need for a supplemental in 1997. Basically, what happened is particularly due to rising dairy prices and WIC foods ended up costing about 1.1 percent more in 1996 than had been projected. In addition, because the caseload rose slowly in 1995, this subcommittee was critical of the Department for forecasting a large increase in caseload than actually occurred. There was a cautious forecast for 1996 that the caseload would be at 7.3 million people at the end of the year. It was 7.4 million. It's this combination of about one percent more people on the program than had been forecast, a little higher food prices, and lower carry over money that puts us in a situation that was not foreseen when the subcommittee acted last year. The current amount of money out there appears to be sufficient to support an average of about 7.2 million this year, as opposed to the 7.4 million level that we're currently at. That creates the need for additional funding if we're to avoid reducing the number of women, infants, and children served in this successful program. I think the question that it leads to though, and I frequently hear asked, is would there be a need for a supplemental if there is still carry over money in the program? I note that in some of the other subcommittees, Labor HHS, and HUD there are a series of social programs where the proportion of the budget authority that's spent in the same year is 50 percent, 30 percent, 20 percent. In WIC it's about 96 percent or 97 percent. The reason it's not 100 percent I think is actually due primarily not to mismanagement, but to cautious and prudent management by the States. When they issue WIC vouchers each month, not every voucher is used. Cereal, for example, some participants don't eat that much cereal and they don't cash every cereal voucher. Every voucher that's issued is something the State is liable for if it's cashed. But they only know after the month is over how many of them actually were cashed. You don't know for the August and September vouchers how many were actually used until the fiscal year is over. Similarly, as you know these are quite like Food Stamps with a $5 or a $1 amount. The grocer fills in the price of the food the day that it's purchased in the store. Again, the State does not know until the retailers take them to the banks and then to the State exactly what the price was. For the August, September vouchers, that's after the fiscal year is over. So, States have to be cautious. They have to make sure they don't overspend and they need to leave a little margin for error. This inevitably creates a small amount of carryover money from one year to the next. Another factor here is, as you know, we have a very successful cost containment effort on infant formula cost. It saves over $1 billion a year. But for the infant formula that's sold in September, the State will bill the companies in October. There were 25,000 cans of formula sold in September. Here is the number of cans and the company pays the rebate per can. That check which the State will get in October or November is considered money from the prior fiscal year because the formula that it's for was sold in September. This is another reason why it's hard for a State, virtually impossible, to spend exactly 100 percent of its money because the State does not know in advance the exact amount of the vouchers and the exact amount of the rebate checks. Now, the final issue on 1997 is as you know the Department a week or two ago provided the committee with information that it asked the States for. If one simply looks at the State figures and looks at the total number of people they say they could support, that does seem to come to 7.4 million. Some people have asked if the supplemental really is needed, given the figures the State submitted? From analyzing the figures and talking to some of the State people who submitted them, what we've found is that in a number of States if they run their program prudently, they spend 97, 98 percent of their money. They would had to have submitted a plan to the Department that said we're going to reduce the caseload, but we're going to leave some money unspent; this 2 or 3 percent that they couldn't spend. In some States politically, they could not clear a document through their political clearances that said we're going to leave money unspent even though it isn't necessarily bad management. We're going to have reductions in the caseload. So, 20 of those States submitted documents that basically estimated how many people they could serve if the State spent 100 percent of the grant and had no unspent funds whatsoever. In 1995, the last year for which we have data, there was only one state in the United States that spent 100 percent of its grant. Mr. Chairman, it was the District of Columbia. My fear is that the District spent more than 100 percent of its grant and had to perhaps make up some of it--and I'm afraid that's right. None of the other States exercising prudent management hit 100 percent. We talked on the phone two days ago to one of the States, a large State, that said it would spend 100 percent of its grant in the material that it submitted. The State Director told us over the phone that State is actually planning to reduce its caseload up to 10 percent, even though it reported in the information it submitted to USDA that it would increase its caseload. We said, how can you be reducing the caseload when you reported to the Department you would increase it? And the State said look, the report we submitted was how many people we could serve were we able to spend a full 100 percent of our grant. We can't do that. And we have to reduce the caseload. Basically, if you look at all of the State estimates as a whole, largely because of these 20-State unrealistic submissions, they indicate that the total amount of unspentfunding would be reduced more than 75 percent in a single year. And I don't know of any WIC analysts who think that is likely to occur or is credible. So, the conclusion this leaves us is added to the fact that when we have looked at the Consumer Price Index for those items that are in the WIC food package; milk, eggs, cheese, and so forth. The first four months of 1997 it was 5.8 percent above the first four months of 1996, which is actually higher than the Department predicted. I think the conclusion one comes to from this is that a supplemental is needed if one wants to maintain the caseload at the current level. I would hope the subcommittee would seriously entertain that. The last point I would like to make is that we've also looked at the 1998 issue. I know 1998 is going to be very tough for this subcommittee. The Administration has requested an increase to 7.5 million people in the WIC Program and a new contingency fund. We looked at the question, what would be the need if one didn't have the contingency fund, if one didn't increase the caseload to 7.5 and one simply maintained the caseload at that 7.4 level? Unfortunately, the story is that even if the State estimates proved to be right, which I think is extremely unlikely for the reasons I've mentioned for 1997, that wouldn't reduce the cost in 1998 because the State estimates are basically saying if we can get the unspent money all the way down to about $45 million, which would be remarkable, at the end of 1997, then we could serve more people in 1997. But if you have $45 million carrying from 1997 to 1998, and $45 million carrying from 1998 to 1999, no one believes one could get it any lower than that. Then the amount you would need to maintain caseload in 1998 would still be 7.4 million people times the cost per participant. Just to conclude, Mr. Chairman, when we simply multiply that out the figure it came to was that if you froze the farmers market and froze the WIC caseload at the 7.4 level, that the requirement in 1998 to do that would be $3.975 billion. That's about $135 million below the Administration's request, but it's still above the level that was appropriated for the current fiscal year. Thank you. Mr. Skeen. Thank you. As you know we have assiduously funded this program because we think it's doing the right thing at the right time. It's been forward funded as a matter of fact, which is most unusual for programs that come out of this body. Now, we're dog eating dog, so to speak. What do you think about the $50 million reduction in Title I that's to go? Is this a happy hunting ground? Mr. Greenstein. Mr. Chairman, listening to the first two witnesses, I knew you were going to ask me that question. Mr. Skeen. I felt that you probably would think I would. Mr. Greenstein. I've tried to make it a practice in the work that I do on public policy issues here not to offer opinions on things that I don't know that much about. I'm not that knowledgeable in the Public Law 480 Program. I do plan to try to learn more about this in the next week or two. Mr. Skeen. But you like the $50 million. Mr. Greenstein. I do not know the affects of the $50 million change in Public Law 480. What I can say is that all of the analysis we have done indicates that the WIC Program does need a supplement of at or close to it--it might be a little less than $100 million in 1997. I do not know whether the Public Law 480 is or is not the best place to finance it. I'm not familiar enough with the issues in that program. Mr. Skeen. Well, we'll be more familiar with it by the time we get through with this process. I'm sure. Mr. Greenstein. I will try to become more familiar with it myself. Mr. Skeen. Well, they're both good programs. But trying to find the money without raising taxes or doing something else has been the criteria they're operating under. What's the anticipated carry over that's projected with and without the supplement? Mr. Greenstein. In the Administration's budget they assume that the carryover which came down I think between this year and last year will come down again somewhat. Their estimate is that $100 million which would be about 2.5 percent, maybe a tiny bit more, of the funds available this year would be carried over and reallocated in 1998. I'd note, Mr. Chairman, that we've looked at the levels of carry over in the past five or six years. They always were between 3 and 4 percent, except in 1990. 1990 is interesting because there was a freeze in the orange groves. There was an Avian Flu and the egg prices went up. And we also had a situation that year where the States had to reduce WIC caseloads because there wasn't enough funding. They ultimately took them down over 100,000 people. Despite that, the carry over that year was about 2.5 percent. I'm skeptical that it can be squeezed lower than the 2.5 percent level. Mr. Skeen. What carry over would you figure you'd have in your program if you got the supplemental? Also, what would be the deficit if you didn't get the supplemental? Mr. Greenstein. I don't think the supplemental would have a---- Mr. Skeen. Well, make a conjecture on that. Mr. Greenstein. I don't think the supplemental would have a large affect on the carry over. I might go a little larger with it. But the fact of the matter is that even with the supplemental that would support a caseload of only 7.4 million. This would be the first time in 15 years, I think, that WIC is not in a growth mode where the caseload at the end of the year is much bigger than at the beginning of the year. Given that's the case, I think the Department's estimate that the carry over would get squeezed down somewhatwould be accurate; the best estimate that we can make. I'd also note that even with the supplemental, some states will probably still have to reduce caseload some. That would push them to run as close to the mark as they could. I think that in either event, we're likely to see carry over somewhere in the vicinity of the Administration's forecast. Mr. Skeen. Thank you very much for your testimony. Mr. Greenstein. Thank you, Mr. Chairman. Mr. Skeen. We appreciate it. We have a vote going on. So, I think we will run vote and we will be right back. Thank you very much for your testimony. If you will excuse us here, folks. Be patient and I'll be back. [Recess.] [Clerk's note.--The prepared paper referred to has been retained in Committee files.] ---------- Wednesday, March 12, 1997. AMERICAN ASSOCIATION OF NURSERYMEN WITNESS BENJAMIN C. BOLUSKY, DIRECTOR, GOVERNMENT AFFAIRS Mr. Skeen. Mr. Bolusky with the American Association of Nurserymen. Welcome. Mr. Bolusky. Thank you, Mr. Chairman. Mr. Skeen. Sorry we kept you on hold there for awhile. Mr. Bolusky. That's quite all right. Thank you, Mr. Chairman. The American Association of Nurserymen welcomes this opportunity to present the nursery industry's views regarding the fiscal year 1998 budget for the U.S. Department of Agriculture. I am Ben Bolusky, Director of Government Affairs for AAN. AAN is the national trade association for the nursery and landscape industry. I would ask that the entire statement be placed in the record. In the interest of time and to salvage what's left of my voice, I will be happy to summarize. Mr. Skeen. Please do that. We will be happy to hear you summarize. Mr. Bolusky. Thank you. According to USDA's Economic Research Service the nursery and greenhouse industry remains the fastest growing sector in agriculture in terms of cash receipts. In 1994, nursery and greenhouse crops totaled an estimated $10.04 billion in farm gate value, representing about 11 percent of the total cash receipts for all U.S. farm crops. Nursery and greenhouse crops in 1994 ranked sixth in total grower cash receipts among all agriculture commodities. It is the third largest plant crop behind corn and soy beans. But it is ahead of wheat, cotton, and tobacco. Nursery and greenhouse crop production now ranks among the top five agricultural commodities in 27 states, including New Mexico, Ohio, and New York, and among the top 10 in 43 states. And although nursery farms can be profitable, they're often more capital intensive than other agricultural operations. And are extremely labor intensive given the thousands of different plant species and the wide ranging sizes in which they are grown. Mr. Chairman, we're pleased to inform you that the nursery and fluroculture industries are in the process of developing a detail proposal establishing coordinated research initiative for the nursery and floral industry. AAN is very pleased that his committee provided $200,000 in fiscal year 1994 to help address nursery and greenhouse industry research needs. So, you can imagine that we are deeply disturbed that the Administration has failed to provide for a continuation of these research dollars in fiscal year 1998. We respectfully urge Congress to restore in fiscal year 1998 the $200,000 in funding, which serves as an encouraging springboard for the joint research initiative that the nursery and floral industry is currently developing. Research into methyl bromide alternatives is imperative since methyl bromide is a critical input to many nursery crop management and quarantine systems. The U.S. National Arboretum continues to play a preeminent cutting edge role in the breeding and introduction of new plant cultivars, and deserves this committee's continuing strong support. With respect to the Animal, Plant Health Inspection Service and its pest and disease management, the American Association of Nurserymen notes that APHIS plans to discontinue funding for the Imported Fire Ant Quarantine. The fiscal year 1997 funding level of $1 million represented only 27 percent of the funding level three years ago, yet the workload associated with the quarantine has increased as the pest has continued to spread. AAN respectfully urges Congress to direct APHIS to maintain Imported Fire Ant funding at the fiscal year 1997 funding level of $1 million. The small federal funding share is used to carry out cooperative efforts with infested states in the south and southeast. Continued federal involvement does two things. First, it strengthens the level of protection of uninfectedstates. And second, it ensures a fair, consistent framework for domestic commerce for nurseries located in the 11 affected states from North Carolina, through Florida, and Westover to Texas. With respect to the Pesticide Clearance Program under CSREES, AAN strongly supports the Administration's fiscal year 1998 budget proposal of $10.7 million for the IR-4 Program. This represents a $5 million increase over the last fiscal year, which is needed and justified in view of the new requirements of the Food Quality Protection Act passed by Congress last year. That Act requires the reassessment of virtually all pesticide dietary tolerances over the next ten years. And while most IR-4 projects focus on minor use food crops, to-date the program has generated very crucial data supporting uses of most products registered for nursery and greenhouse use. Mr. Chairman, in closing the American Association of Nurserymen is mindful of the budget constraints faced by this committee. Yet, we believe that federal funding of the kinds of activities supported in our testimony is not only justified, but necessary if the nursery industry is to continue to prosper and to play its increasingly significant role in our nation's economic strength. As in past years, we genuinely appreciate this opportunity to present the nursery industry's view. And we particularly appreciate the leadership, support, and interest that you have given the nursery industry. Thank you for your consideration. And we look forward to continuing to work with you, other committee Members, and your staff. Mr. Skeen. We thank you, sir. It was astonishing to believe or to understand after you've seen all of the statistics how fast the nursery industry has grown; how important it's become as an agricultural product. Most people don't class it as an agricultural product, but certainly it is. As far as dollar volume is concerned, I think it has made its place in the whole spectrum and done it very well. It is one of the few entities I know in agriculture where someone can start if you've enough money to make the investment, and you don't have to be in error as you do in a grazing operation like we have in the West. So, we look with a great deal of admiration at what's happening in the nursery industry. You folks have done a good job with it. Mr. Bolusky. Thank you, Mr. Chairman. To underscore that point, in the last 25 years, you may be interested to know that the number of nursery farms in the nation has actually grown by about 2.5 times of what it used to be. Mr. Skeen. I'm not at all surprised. We have quite a horticulture group producing in New Mexico. A lot of roses come out of there using geothermal energy. It's a good producer. Tell me more about this IR-4 Program. Explain it to me. Mr. Bolusky. Well, the IR-4 Program is a program whereby it looks at pesticides that are primarily developed for the food markets. The IR-4 Program actually provides the support to look at uses beyond those which were originally intended. Mr. Skeen. For consumption? Mr. Bolusky. For consumption, right. A lot of the pesticides that are produced or manufactured for food products, the nursery industry, nursery and floriculture, may ride as a piggy back as a result of the work that the IR-4 Program does support in developing the necessary protocols. Mr. Skeen. What success has been made on the fire ant eradication? Mr. Bolusky. The success in the fire ant eradication is one that it has not largely spread beyond where it is today. The concern--and that is perhaps one of the reasons that we understand that APHIS would prefer to do away with the funding of that Imported Fire Ant Quarantine Program. However, our analysis and the science shows that the Imported Fire Ant could probably expand greatly beyond the 11 states in the South and Southeast, moving over towards the West Coast, California, Washington, Oregon, and moving up the East Coast. It could probably withstand the climate in those areas. So, we maintain that the Fire Ant Program must be maintained at the million dollar federal funding level thatAPHIS has kept these years in order to prevent the expansion of the Fire Ant. And two, to keep a level playing field for those nurseries and those affected states. If you do away with the federal quarantine, what you would have in effect is the ability for all of the states to begin to impose their own rules and regulations regarding shipment of nursery stock out of those states that are infested. Mr. Skeen. We thank you for your presentation. Mr. Bolusky. Thank you, Mr. Chairman. It's always a pleasure to be here with you. Mr. Skeen. Well, it's a pleasure having you. We appreciate the testimony. We will do the best we can by it. We're going to have a tough year this year with the funding. We're juggling and only have two hands. We've got seven or eight places to grab. So, thank you very much. [The prepared statement of Benjamin C. Bolusky follows:] [Pages 335 - 343--The official Committee record contains additional material here.] Wednesday, March 12, 1997. HOLDEN'S FOUNDATION SEEDS, INC. WITNESSES DR. DAVID HARPER, PLANT BREEDER DR. DIRK BENSON, CORN BREEDER Mr. Skeen. Dr. Harper and Dr. Benson with the Holden's Foundation Seeds, Inc. Welcome. Dr. Harper. Thank you. Glad to be here. Mr. Skeen. Well, we're glad to have you. Your entire written text will be in the record. If you will abbreviate it, we would appreciate it. We have some questions we would like to ask. Dr. Harper. Thank you, Mr. Chairman. Mr. Skeen. We appreciate you being here. We appreciate your testimony. Proceed. Dr. Harper. And we appreciate the time we have here. Mr. Chairman, thank you for hearing us today. I'm Dave Harper. I'm a corn breeder with Holden's Foundation Seeds in Iowa. This is Dirk Benson. He is a corn breeder for specialty products with Limagrain Genetics Corp. in Indiana. We're here representing the Corn and Sorghum Basic Research Committee of the American Seed Trade Association. We're requesting $500,000 be appropriated annually for enhancing corn germ plasm in order to strengthen the germ plasm base in the U.S. The present USDA budget has $500,000 budgeted for this project. Those appropriations were originally from this committee, starting in 1995. We've been very thankful for this money. After the last couple of years, we've been able to make an excellent beginning to this research program. In order to completely fund--to the American economy as a raw material, about 20 percent of this reduction is exported each year providing a positive trade balance of over $4 billion in corn. Approximately 17 percent of the crop is refined into products such as corn sweeteners used in soft drinks and through feeding livestock. The rest of the crop is processed into meat, eggs, and dairy products that affect everyone in our society as you know. All of this production is based on using only 5 percent of the corn and germ plasm available in the world. And broadening this germ plasm base would provide genes to improve yields and protect against new disease, insect, and environmental stresses resulting in reduced pesticide use. In recent years export markets, industrial processors, and other end users have begun demanding changes in grain quality to meet their changing needs. It is likely that unique grain quality characteristics to meet these end user demands will be found in this exotic germ plasm. In addition, this germ plasm can provide many genes of interest for emerging technologies and biotech. In the Lamp Project, 12 countries in the Americas evaluated 12,000 accessions and picked the top 268. These are prime candidates for enhancing our germ plasm here. Most of this exotic germ plasm, however, is unadapted to our growing conditions in the U.S. and requires a concerted long-term breeding effort to adapt it so it is usable in commercial breeding programs. The total price of enhancement is too large and long-term for public institutions alone and/or seed companies to accomplish this individually. Therefore, this present program represents a joint USDA/ ARS, Land Grant University, and industry effort to enhance these and other exotic accessions so they can enter into commercial corn breeding programs. The U.S. GEM Program stands for Germ Plasm Enhancement of Maize. This project serves a national need and the primary effort and direction is coming from the USDA/ARS. And this GEM Program is the project we've developed to adapt these materials to U.S. conditions. Two permanent ARS locations are being used as primary sites for breeding and coordination. One is in Ames, Iowa and the other in Raleigh, North Carolina. The number of corn researchers at various Land Grant Universities and other ARS locations are also taking part in the enhancement and the evaluation of this exotic germ plasm. Industry is also involved. A total of 21 companies have pledged research and nursery yield trial plots for this breeding effort. This in-kind support is valued at $450,000 a year. Companies have also used their elite inbred lines to cross to these exotic populations in the breeding effort-- intellectual property shows the importance industry places on this kind of effort. Never before has industry been willing to donate their own intellectual property for something that will become publicly available. This germ plasm to the program is not added in this calculation of $450,000 per year. It is worth millions of dollars. Looking at accomplishments of some of the work done in 1996, at Ames there was one discovery from this research that aligned from one of the breeding crosses measured a total protein of 16 percent. And corn bell germ plasm normally has 10 percent; and total oil level of 6 percent. And corn bell is normally 4 percent. It is extremely unique to find increased levels for both of these traits in the same line and is potentially very useful for food and feed applications. In Raleigh, North Carolina from their disease screening work, they found that eight of the tropical and elite breeding crosses were more resistant to Gray leaf spot than the commercial resistant checks. And the Gray leaf spot has been the largest disease problem in the Mid-West and throughout the United States in the last three years on corn. Also, in yield trials in the Southeast some of the breeding crosses out yielded the commercial checks. Other public cooperators studied these materials for various trades. This included the States of Delaware, Georgia, Illinois, Iowa, Louisiana, Mississippi, Missouri, New York, Ohio, Pennsylvania, Tennessee, and Wisconsin. So, you can see it's quite a broad- based effort. The private company cooperators conducted yield trials on over 200 germ breeding populations this last year. The top 15 breeding populations were sent to winter nurseries for continued research work and advancement. Also, in 1996 the companies increased their nursery and yield trial in-kind support over 1995 by 25 percent. In 1997 the research will continue at the various ARS, University, and company locations similar to 1996. The affects of increased funding in 1998--the appropriation of the additional $500,000 annually would provide funds to increase research in the following ways. In Ames, it would provide laboratory equipment to conduct analysis for feed quality. Approximately 60 percent of corn is federal to animals. And the 20 percent that is exported mostly is federal to animals as well. In addition, the research plot combine for conducting yield trials could be purchased. In Raleigh, North Carolina testing and development work could be increased from two tropical by elite breeding crosses per year to six or more, greatly speeding up the introduction of these adapted germ materials into private and public breeding programs. As far as other public cooperators, it would increase the number of public cooperators from ten to over 30. This would allow for full evaluation and development of new breeding materials. Additional funding would also allow public materials to reach commercial breeding programs in half the time. However, appropriated funds could be used, could be seen detailed in the budget. Copies of this budget have been given to Mr. Sanders. This nationally coordinated Corn Germ Plasm Enhancement Program is a unique USDA/ARS, University and industry cooperation that will lead to an increase in the productivity, quality and marketability of hybrid corn in the U.S. and for export, benefitting the farmer, the feed and processing industries, and the consumer. And I might add that in some recent public discussions this U.S. GEM Program has been listed as an example of cooperation between industry and the public sector that is the type of cooperation that needs to be done more in the future in many agricultural areas of research. Thank you very much. Mr. Skeen. Thank you, sir. You said that 20 percent of your produce is germ plasm and is exported? Mr. Harper. Twenty percent of the grain crop. Mr. Skeen. Oh, the grain crop. Mr. Harper. That first section was on the use of the grain itself. Mr. Skeen. Use of the grain itself. Who are the importers? Mr. Harper. There are a number of them. China was mentioned earlier. Mr. Skeen. You mention China because I think it was one of the banner years. It took more bottoms going through the Panama Canal carrying American corn to China. Mr. Harper. Right. And we think and the indications are that, that would continue to increase with---- Mr. Skeen. They don't grow it themselves over there. Mr. Harper. No. They grow it. As a matter of fact, their acreage is about the same as ours, but their population of course is much larger. Mr. Skeen. It's a huge population. Mr. Harper. And our yields per acre are much higher also. Dr. Benson. And as their economy continues to increase, their demand for protein in their diet will increase, which is primarily chicken. And they feed those chickens American grain. Mr. Skeen. American grain. That's real interesting. It's been a noted fact there is a huge export market. I don't know how many billions of dollars each year, but it is very valuable for American producers. Mr. Harper. I think it's over $4 billion in just grain itself. Mr. Skeen. Four billion dollars. Mr. Harper. And if you look at some of their processed products coming directly from grain, it adds another $1.7 billion to export. Mr. Skeen. I see. Well, we thank you for your testimony and appreciate you being here today. Mr. Harper. Thank you very much for your time. [The prepared statement of Dr. David Harper follows:] [Pages 348 - 355--The official Committee record contains additional material here.] Wednesday, March 12, 1997. PICKLE PACKERS, INTERNATIONAL WITNESS JIM TERSKI, REPRESENTATIVE, VLASIC PICKLES Mr. Skeen. Mr. Jim Terski, Pickle Packers. Mr. Terski. Good morning, Mr. Chairman. Mr. Chairman and Members of the House Appropriations Subcommittee, it's my distinct honor to come before you as a representative of the growers and processors of the pickle vegetable industry. Specifically, Pickle Packers, International and the field research committee members that are here with me today. We are here to ask for your continuing and increased support of the agriculture research service of the Department of Agriculture, in particular, the Food Fermentation Lab at North Carolina State University, the Crop Research Lab at the University of Wisconsin in Madison, and the Vegetable Harvesting Unit at Michigan State University. The research performed by these laboratories has been and continues to be of critical importance to the pickle vegetable industry. These labs are responsible for many improvements made to our industry today. Growers have experienced higher yields on their crops, less waste due to fruit disease, new mechanical methods of harvesting the product, and a significant reduction of pesticide usage as a direct result of ARS research. Processors, on the other hand, have found new ways to handle the fruit without damaging it, less salt usage in their techniques, and an increase in the overall quality of the fruit which they can pass on to the consumers; again, a direct result of ARS. Economically, all aspects of our industry have benefitted from the work of these labs and continue to do so. Our industry is not just made up of growers and processors, but also of jar and lid manufacturers, freight haulers, salt grinners, seed companies, farm equipment manufacturers, and many others who benefit financially from these crops. The research must continue. There are still many problems to solve and these labs are working at solving them. In a time when food safety has become so prominent a topic, the research is critical to enable us to comply with all rules and regulations and still put out competitively priced products to compete with imports coming in from other countries. Food safety is of the utmost importance to our companies and to our consumers. We must find new ways of growing these crops without excessive use of pesticides and other chemicals. These ARS labs have the proven capability of finding and developing these new methods for us so that we can continue to produce safe and healthy products of a very high quality. Finally, I would like to thank the committee on behalf of those I represent for the past funding, and urge you to continue to provide the funds for these labs so that they can continue the important work they do for us all. Mr. Skeen. Thank you for your testimony. What diseases and what pests does the pickle grower have to contend with primarily? Mr. Terski. There are a number of diseases out there that are unique to the pickle industry. To the pickling cucumber itself riseactonia is one of them. It's a fruit disease that ages the fire fruit and begins to eat away at a bacteria. They have another one that's referred to as belly rot. It does the same thing from sitting on the ground. The scientists are coming up with new ways of making the seed and the gene disease resistant to that type of a problem. The same thing with the pesticide. There is a pickle worm that is specific to the cucumber. Peppers have a number of various worms that love to bore in and eat into the fruit. With disease resistance, again, without having to spray, these research people are finding ways to put it into the seed, into the gene so that it has the results. Mr. Skeen. So, they're doing it genetically. Mr. Terski. But we're not spraying anything out in the field. Mr. Skeen. I see. What sprays do you use; the common use? Mr. Terski. It's various to the different crops. Cucumbers are different than peppers. Mr. Skeen. So, it would be similar pesticides. Mr. Terski. It's similar pesticides, herbicides. That's correct. Mr. Skeen. All right. What's the monetary value in the pickle industry in production in the United States? Mr. Hentchel. Good morning. I'm Richard Hentchel, the Executive Vice President for Pickle Packers, International. The value we place on it at this point is $1.5 billion. Mr. Skeen. $1.5 billion. Mr. Hentchel. For the cucumber pickles. That does not include all of the other kinds of pickled vegetables that we eat. But at least for pickling cucumbers, it's about $1.5 billion. Mr. Skeen. It's a very substantial return. Mr. Hentchel. Yes. Mr. Skeen. Thank you. Mr. Serrano. Mr. Serrano. No, questions. Thank you, Mr. Chairman. Mr. Skeen. We thank you gentlemen. Mr. Hentchel. Thank you. [The prepared statement of Mr. Jim Terski follows:] [Pages 358 - 362--The official Committee record contains additional material here.] Wednesday, March 12, 1997. NATIONAL FOOD PROCESSORS ASSOCIATION WITNESS KELLY D. JOHNSTON, EXECUTIVE VICE PRESIDENT, GOVERNMENT AFFAIRS & COMMUNICATION Mr. Skeen. Mr. Johnston. Mr. Johnston. Good morning, Mr. Chairman. Mr. Skeen. Good morning, sir. Welcome. Sorry we have kept you kind of hanging around here while we were getting on with our work. We appreciate you being here. Would you please go ahead and commence. Your entire written testimony will be in the record, and if you will highlight it, we will appreciate it and we will see if we can't come up with some good questions for you. Mr. Johnston. Well, sir, I'll be very, very brief. Mr. Skeen. Thank you. Mr. Johnston. In respect of your time as well. First of all, Mr. Chairman, again, thank you for inviting us. I am Kelly Johnston. I'm Executive Vice President for government affairs and communications for the National Food Processors Association. NFPA is the voice of the $400 billion food processing industry on scientific and public policy issues involving food safety, nutrition, on technical and regulatory matters and, of course, consumer affairs as well. Mr. Chairman, first I want to thank you for two things. First of all, your subcommittee took a lead role in the last Congress in urging improvement in the practices of FDA and FSIS, calling on FDA in particular to act within statutory review deadlines or periods for applications and petitions. We strongly encourage you to keep the pressure on. There are still needs in that area. In addition, you have provided some opening comments when Dr. Michael Friedman was here recently to testify on FDA's proposed budget. We strongly concur with the comments you made with respect to their proposed so-called user fees. And that's one of the reasons that we wanted to come here today to talk about that proposed budget that came from the Administration. They had proposed $450 million in what they call user fees. We prefer to call them what we believe they really are, which is regulatory taxes. Any time you try to impose a fee on a regulated industry for programs that benefit the broad public, that's not a user fee. That's a tax. And our industry strongly opposes those. It's a highly regressive tax. It certainly will be passed on to consumers in the form of higher taxes. In addition, we believe as we've testified in past years, it will erode public confidence in the independence of the regulatory process. We wanted to convey those comments to you as well. Mr. Chairman, at this point, I just what to stop and thank you again for your leadership and the opportunity to testify this morning. I'd be happy to answer any questions you might have. Mr. Skeen. We thank you. And of course the battle cry this year is user fees. So, we appreciate the fact that they want to raise more money, but they want to do it with a user fee and a user fee is a tax. Mr. Johnston. Yes, sir. It is. Mr. Skeen. Or at least some form of taxation. Mr. Johnston. Yes, sir. Mr. Skeen. We appreciate that stance. Mr. Serrano. Mr. Serrano. I have no questions, Mr. Chairman. Mr. Skeen. We thank you. Mr. Johnston. Thank you, sir. Mr. Skeen. That concludes our work for today, unless we have someone else. [No response.] Mr. Skeen. We are adjourned. [The prepared statement of Mr. Kelly D. Johnston follows:] [Pages 365 - 371--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL UTILITY CONTRACTORS ASSOCIATION WITNESS WALTER GAINER, PRESIDENT Mr. Skeen. The committee will come to order. I want to welcome all of you here this morning. We have outside witnesses. We will start with Walter Gainer, who is with the National Utility Contractors Association, and your subject is going to be Rural Utilities Service. Mr. Gainer. This is a piece of water line. Mr. Skeen. It looks like some of ours around the country, alkali. Mr. Gainer. It's one of the problems they have around the country, mostly in large cities. That is the problem they have in D.C., for your information. That is why you can't drink the water. Mr. Skeen. That is what is wrong in the Rayburn Building and others, too. We can't pass EPA standards right here. We will get into sludge later. Mr. Gainer. That is correct. There's fire protection, too. The city of Rockville had to put pumps on it because they can't get enough water out of the fire hydrants to put a fire out. All right. My name is Walter Gainer. I am representing the National Utility Contractors Association. Mr. Skeen. Excuse me. Let me say your full written testimony will be entered into the record, and you can summarize it any way you would like. We would appreciate it. Mr. Gainer. Mr. Chairman, members of the committee, I am pleased to appear before you on behalf of the National Utility Contractors Association. I have been in business with a company that has been in business for 50 years. I have been there for 28 years and repaired water sewer systems all over the State of Maryland. My professional experience has shown me there is a critical need for Federal water and sewer construction funding in rural America. I grew up in the back country in West Virginia in a small place called Nicholas County, and I would like to talk about that. We were fortunate in the little town I grew up in. We had a big mill there, and we got the water from there. In the late 1960s, the mill changed hands. The fathers had to go out and build their own water system, and through this funding, that is how they got it. Since then, in Nicholas County, which is the surrounding county of where Richwood was where I grew up, they have put this water system all over the county in different places and, just like Rural Electric, has brought modern water to the different areas there in the county and has helped the economy. It is hard to put a price on how much it has helped the economy and gotten good water into the area. But there is still a lot of work to be done. There is an area that I am particularly fond of above Richwood that is called Hinkle Mountain, and they have been trying to get a water system up there for 15 years. They have been hauling water in the back of pickup trucks, much like a Third World country; and I think they are not even high on the priority list in West Virginia right now. So there must be serious problems elsewhere in the State; and, like I said, there is a real need for this construction assistance if not alone to help the people of Hinkle Mountain. I know they don't put brass plaques underground, but this system really works, and I have seen it work in the county I used to live in. I still own property down there, and I go down two or three times a year, and I can see the development and everything that has happened from this program. It really works down there, and I think there is a real need, and we urge you to support this in the administration's $1.2 billion request for fiscal year 1998. Thank you. Mr. Skeen. Let me thank you. I understand perfectly well what you are talking about. It has been one of the greatest programs in the world, but the maintenance and upkeep kind of goes in a cycle. You can initiate these systems and so forth, but somebody has to run them. Mr. Gainer. Somebody has to run them. Mr. Skeen. That is absolutely true. We have some severe problems, particularly in small communities. And now, with EPA and some others setting new standards they cannot even meet, there is going to be a collision somewhere down the road; and it is going to cost a lot of money somewhere. That is what we are trying to do, get these systems up and get water running. You can't have a community if you don't have a water system. Mr. Gainer. That is correct. A lot of these communities in the country are still like Third World countries as far as toting and moving water around. Mr. Skeen. I think some Third World countries are better off than some of our remote communities. Mr. Gainer. I won't disagree with that. Mr. Skeen. Walter, we sure do thank you for your testimony and we are going to do our best to keep these systems coming through. [The prepared statement of Walter Gainer follows:] [Pages 375 - 381--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL CENTER FOR APPROPRIATE TECHNOLOGY WITNESS TERESA MAURER, PROJECT MANAGER Mr. Skeen. Teresa Maurer, who is of the National Center for Appropriate Technology. Ms. Maurer. Yes, my name is Teresa Maurer. I am Project Manager for the ATTRA program, which is a project in the National Center; and it is funded through Rural Business- Cooperative Service, part of rural development. I appreciate the opportunity to testify, and I am going to just highlight a few parts of my written testimony. Mr. Skeen. We thank you for that. Ms. Maurer. Okay. We are an agriculture information service, accessible by a toll-free telephone line from all over the country, all 50 States and some of the territories. We operate by finding out a little bit about the person's farming operation. We put together written materials gathered from a number of sources, refer them to other farmers who are doing these practices, provide them with various kinds of marketing information, if we know about marketing channels, and this is summarized and mailed back to the person. So a person can call-in and the information is mailed back directly to the person's mailbox. Sixty-five percent of our callers are farmers. Thirty-five percent are from Extension, various government agencies and agriculture businesses that are interested in learning about these practices. Since 1987, which is when the program began, we have responded to nearly 100,000 requests and in fiscal year 1996 alone 18,000; and that annual figure has quadrupled the rate that we did in fiscal year 1989. We have been level funded at $1.3 million for the past 6 years, and in the fiscal year 1998 budget it has been proposed that we be funded at that level. One thing we have noticed with farmers over the last couple of years is that we are getting more farmers not only asking about production, but about marketing avenues for these sustainably produced products, and they want to be able to know how they are going to market the product before they actually put it in the ground and how to evaluate adding that enterprise to their operation. So this increase in marketing questions, helping the farmers develop their capabilities to market these kinds of products, is the reason why we are actually asking for a small increase over the 1.3. And I know the budget is very tough, but I think that will help us to deal with the doubling and the number of marketing questions that we are getting from farmers who want to develop these agriculture enterprises. I want to make a couple of final points. We do work with a couple other sustainable ag programs. The SARE program uses us as an outlet for the materials that they produce through their research and education program since they don't have dissemination capabilities, and we have been real partners with Extension training in all four of the regions. As a matter of fact, in the last year, I have spoken at two Extension conferences and had pleas from Extension people to continue our service and to continue helping them find materials that they need. Since the research program is relatively new, they need to be able to get information out faster from that SARE program. So we have really worked closely with Extension, but we are unique from them. I guess I would like to say we are convinced that we provide a national service that is valuable to broadening the acceptance and marketing of sustainably produced products. We appreciate the past support that Congress has provided, which enables this unique service to provide information which helps farmers with the choices they face, especially with the new farming legislation, and they look at some big changes over the next 6 to 7 years. I urge you to continue to support the work, and we pledge to continue to improve the efficiency of the program and the quality of information we offer to farmers. Mr. Skeen. Thank you for your testimony. What kind of an increase are you asking for? I haven't had a chance to look at that. Ms. Maurer. Oh, I am sorry. From 1.3 to 1.5. So about 15 percent. And we do understand the tightness of the budget, but that will help us deal with the quadrupling in the request for our service. Mr. Skeen. We appreciate your sensitivity in that area. We are all going to have to deal with that. Let me ask you a question. You mentioned tech transfer. Give me an example. Ms. Maurer. Well, for example, we have had farmers, for example, that are really concerned about the methyl bromide, you know, the outlying of methyl bromide. Mr. Skeen. That has been a persistent problem across the entire field. Ms. Maurer. Right, exactly. So one of the things we have been able to do is provide them with some access to some cutting edge information about what else they can do, what options they have. Mr. Skeen. I see. Thank you very much for your presentation. Ms. Maurer. Thank you for your time. [The prepared statement of Teresa Maurer follows:] [Pages 384 - 388--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL RURAL HOUSING COALITION WITNESS ROBERT A. RAPOZA, EXECUTIVE SECRETARY Mr. Skeen. Mr. Robert Rapoza. Did we pronounce that right? Mr. Rapoza. Yes, sir. Good morning, Mr. Chairman. Mr. Skeen. Good morning, sir. Mr. Rapoza. I am Bob Rapoza. I will submit my statement for the record. Mr. Skeen. Thank you, sir. Mr. Rapoza. I am with the National Rural Housing Coalition. We lobby on behalf of the rural development efforts of the Agriculture Department. We have appeared before the subcommittee many times in the past and appreciate the opportunity to testify this morning. We want to start off by supporting, in general, the budget request from the President. The housing and development funds of the Agriculture Department have been cut over the last 3 years; and while the President's budget isn't all that we would have hoped for, it does stem the tide of cuts. Certainly the budget has fallen hard on development funds over the last 3 years, and the President's budget does take us in a better direction in terms of providing funding for housing, water, sewer and related activities. We would urge the committee, as it looks at the budget, to look at the subsidy rates that are projected in the President's budget. The 1997 budget did not hit the mark with regard to interest rates and subsidy rates; and, therefore, in Section 502, direct loans in particular, there was a big reduction because it was based on the subsidy rates in the President's budget. While the 1998 budget does seem to do a better job, it still projects that interest rates will be down; and, thus far, one would expect that might not be the case, just based on the economic reports of the last few days and the fact that the stock market went down because it expects rates to go up soon. So we are once again in a situation where the interest rate projections and, therefore, the subsidy rate projections in the President's budget could well fall short of the mark; and the result would be if that were followed that there could be a cut in Section 502 that the committee and Congress---- Mr. Skeen. It puts a wet blanket on your program, doesn't it? Mr. Rapoza. That is right. We think that Section 502 is important and the only option for low-income home ownership in small communities. We would like to see the BA provided to support that at the billion dollar level. It works particularly well with self-help housing. And I know you have been to Tierra del Sol and some other sites---- Mr. Skeen. Yes, sir. Mr. Rapoza [continuing]--where self-help groups help families build their own housing, save the government 10 to 25 percent off the cost of a Section 502 house and do a lot of good things for the families. Self-help families are poorer than regular Section 502 borrowers, but yet have lower default rates. We are supporting the budget request for self-help housing, which is a grant, which is a grand total of 26 or so million dollars. We worked very hard and supported the efforts that the Chairman, Mr. Skeen, made on Section 515 reform. Now, we hope that the committee will be able to provide a fair level of funding for Section 515. The reform effort was a difficult one, but we certainly want to thank you for the effort that you made to get that down, Mr. Chairman. Finally, the budget does propose a consolidation for rural development act activities. It stems from the farm bill. It is called the RCAP. The Appropriations Committee over the last 2 fiscal years has provided three consolidations which we think ought to continue. The RCAP isn't a substantive departure from what the committee has done, but it does set aside some funds for the States. At a time of really tight budgets, we do not think that is justified. To set up a duplicative and redundant state of rural development effort funded by Federal funds, it does not seem to make much sense. I will stop now. Thank you for the opportunity. And I would be happy to answer any questions that you might have. Mr. Skeen. Thank you, Robert. We have tried to do a lot of budget bending for these programs because they are so vital and we think so important. You have done very well with it. Now we are squeezing these budgets down, and it is a little difficult for us to prophecize what is going to happen in this situation. But you have a good program, and you have adjusted some of the problems we have had with it. We are going to try to keep you viable. Thank you very much for your presentation. Mr. Rapoza. Thank you very much, Mr. Chairman. [The prepared statement of Robert Rapoza follows:] [Pages 391 - 397--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL ASSOCIATION OF HOME BUILDERS WITNESS MICHAEL GLASS, PRESIDENT, GLASS DEVELOPMENT COMPANY, LANCASTER PENNSYLVANIA Mr. Skeen. Michael Glass with the National Association of Home Builders on rural development. Welcome, Michael. Mr. Glass. Good morning, Mr. Chairman. Mr. Chairman, my name is Michael Glass. I am the President of Glass Development Company in Lancaster, Pennsylvania. I serve on the board of trustees of the National Association of Home Builders' Rural Housing Counsel and am here today representing the 190,000 member firms of the Association. I am a builder and developer of affordable housing, and I build homes in Central Pennsylvania and in upstate New York. My company has provided first-time homeownership opportunities to approximately 1,000 families. I am also the Chairman of the Commonwealth of Pennsylvania's Regional Housing Advisory Committee, appointed by Pennsylvania's Secretary of Community and Economic Development; and I serve as Chairman of the Pennsylvania Builders Association Housing Policy Subcommittee. Thank you very much for the opportunity to present the home building industry's views on rural housing appropriations. I have a written statement that I would like to submit for the record. Mr. Skeen. It will be in the record in its entirety. We appreciate your abstracting it. Mr. Glass. As you know, rural housing programs provide affordable housing to rural areas. Unfortunately, rural areas traditionally have lacked the financial resources for home financing. For this reason, the rural housing service programs are vital to increase the availability of decent, safe and affordable housing for lower and moderate income rural home buyers and renters. The Section 502 single family direct and guaranteed loan programs and the Section 515 rural rental house program have been overwhelmingly successful in providing cost-effective, affordable home ownership and rental housing opportunities; and they have provided additional capacities through job creation and the generation of tax revenue. I would like to commend the Department of Agriculture for their work to reduce the cost of the single family program by 30 percent and the regulatory burden by 90 percent over the past 2 years. I would also like to share with you examples of how the single family program can improve the life of a hard- working, creditworthy family. A 41-year-old single mother, who, in addition to raising her own son, is a mentor for troubled children, was able to purchase a new quality-built, energy-efficient home with affordable monthly payments, leaving behind her old dilapidated house in an unsafe neighborhood. The loan of a 26-year-old nurse's aid with two sons under 10 years old is a textbook case of public, private, State and Federal partnership. Her home was purchased with a first mortgage from the Pennsylvania Housing Finance Agency with an interest rate of 5.5 percent, a second mortgage provided with home funds with no interest, and a third mortgage provided by the Rural Housing Service at their applicable interest rate. These loans were originated and completed by the private sector in partnership with the State and Federal Governments. Mr. Chairman, great strides have been made to reduce the cost, regulatory burden, leverage funds and coordinate housing activities with other economic, industrial and community development activities in rural areas. However, despite all the progress, there is still a desperate need for affordable housing in America's rural areas. The funding for rural housing programs has decreased by 69 percent over the last decade, with rental housing suffering an 80 percent decrease. The decrease in funding far exceeds the percentage reduction in all other areas of the Federal budget. Meanwhile, the number of rural poor in need of affordable shelter has steadily increased. This, coupled with welfare reform, will place a disproportionate burden on the already strained rural communities. For fiscal year 1998, the administration's budget included funding for program levels of $1 billion for Section 502 single family direct loans, $3 billion for Section 502 single family guaranteed loans, $150 million for Section 515rural renting housing, and $25 million for credit sales. Taking into account the current tight budget climate, NAHB would like to see rural housing programs funded at the highest level possible. Adequate shelter must be considered a priority for rural areas, along with nutrition and workfare programs. Regardless of funding levels, rural housing programs are still susceptible to pressures from outside the appropriation process. The Section 502 single family direct loan program is completely sensitive to changes in interest rates. Last year, as you are well aware, the appropriated program level was cut in half when the credit subsidy rate was calculated at the beginning of the fiscal year. As a matter of fact, it is our understanding that interest rates have risen again since the President submitted his budget in February, and the proposed budget authority will produce a program of lower than $1 billion. The administration also proposes to reduce the loan term on the Section 515 rural housing program from 50 years to 30 years. This will reduce the subsidy rate and allow the program to be funded at the $150 million level program level. Without this change, Section 515 will be funded at $128 million. NAHB is disappointed the administration did not recommend funding the Section 538 rural renting guarantee program. This new program guarantees loans made by certified lenders from multi-family housing in rural areas. It is our hope that the Congress will reauthorize and fund the program again this year. NAHB supports a bill introduced by Congressman Doug Bereuter to permanently authorize the Section 538 program. Since the program level for the Section 515 program has continued to decline, NAHB would like to explore with this committee other options to use housing guarantees, combined with rental assistance and credit subsidy, to provide much- needed rental housing to rural areas in the future. On behalf of the National Association of Home Builders, I would like to thank you, Mr. Chairman, for the opportunity to testify today on important rural housing appropriations and especially for your continued support of home ownership and rental opportunities for lower and moderate income rural families. Mr. Skeen. Michael, we thank you for your presentation. There is an absolute need of horrendous proportions taking place in rural communities, and I think you have highlighted it very well. Also, I think the input you have is a good example of government and private sector working to the benefit of the population and particularly in rural communities. It has been a very successful program, and we would hate to lose it. The funding is going to be the tough part of the thing and also getting the authorizing committee working to make the changes in the program to resuscitate section 538 and some of the others. We thank you for your presentation. Mr. Glass. Thank you, sir. [The prepared statement of Michael Glass follows:] [Pages 401 - 409--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL ASSOCIATION OF WIC DIRECTORS WITNESS ELOISE JENKS, PRESIDENT Mr. Skeen. Eloise Jenks with the National Association of WIC Directors. There you are. Welcome. Ms. Jenks. Thank you. Mr. Skeen. You know the chorus. We will put all the written work in the record, and you summarize it any way you would like. Thank you for being here, Eloise. Ms. Jenks. Thank you very much. Mr. Chairman, on behalf of the National Association of WIC Directors, NAWD, I thank you for the opportunity to present testimony on the President's budget request. I am Eloise Jenks, President of NAWD and Executive Director of the Public Health Foundation WIC program of Los Angeles. WIC is a program of which you should be very proud. WIC is a short-term intervention program designed to influence lifetime nutrition and health behaviors in a targeted high-risk population. WIC provides services in 9,000 clinics administered by 1,800 local agencies in 86 State WIC programs. Of the Federal appropriation, only 9 percent of the WIC grant is used for program administration; 16 percent is used for direct client services needed to assess each individual's nutrition, health and income eligibility, to provide nutrition education, breast feeding support and promotion, prenatal pediatric and immunization screening and referral, to provide drug, alcohol and tobacco abuse information, to prescribe and issue food benefits, register voters and provide other mandated or necessary client services. The remaining 75 percent of the WIC grant is allocated for food benefits. WIC's monthly food prescription package is tailored to meet the specific nutritional needs of each client and is serving 7.4 million participants, including 1.8 million infants and 3.9 million children. WIC requires that each client has one or more documented nutrition risks and income less than or equal to 185 percent of the poverty level. In fact, 94.5 percent of all WIC participants have incomes below 150 percent of the poverty level. Numerous studies show that pregnant women who participate in WIC seek earlier prenatal care and consume more healthy diets. They have longer pregnancies, leading to fewer premature births, have less low and very low birth rate babies and have fewer fetal and infant deaths. It costs $544 a year for pregnant women to participate in WIC. By contrast, it costs $22,000 per pound to grow a low and very low birth weight baby to normal weight of 7 pounds in neonatal intensive care unit. WIC prenatal care benefits reduce the rate of very low birth rate babies by 44 percent. WIC promotes breast feeding as the preferred method of infant feeding. Breast milk contains all the nutrients younginfants need to grow and develop. Breast-fed infants tend to be healthier since they receive antibodies from the breast milk which protects them from infection. In 1994, WIC mothers increased their breast feeding initiation rates to 44 percent. WIC helps to assure children's normal growth, reducing levels of anemia, improving access to regular health care, increasing immunization rates and improving diets. Forty-seven percent of all infants born in the United States are on WIC. Eighteen percent of all children in the United States are on WIC. Four- and five-year-olds whose mothers participate in WIC during pregnancy had better vocabulary test scores than children whose mothers had not received WIC benefits. Children who participated in WIC after their first birthday had better digit memory test scores than children who did not participate in WIC. States stretch available WIC funds through rebates on foods and other cost-saving initiatives. State WIC agencies use their infant formula buying power to achieve bulk purchase savings in the form of monthly rebates paid by infant formula manufacturers. These rebates save over $1.1 billion for Federal taxpayers and fund services for $1.5 million women and children. NAWD supports both the administration's $100 million supplemental appropriation request for WIC in 1997 and its increase for just over $378 million in WIC funding for fiscal 1998. We are aware that a major concern of the committee has continued to be the amount of carry over funds projected for the next fiscal year. Why is this supplemental needed, given that carryover funds are available? WIC directors cannot overspend the WIC grants. It is not possible nor is it prudent management for WIC to expend all of its appropriated resources in a given fiscal year. WIC managers have typically experienced carryover margins of 3 or 4 percent--or about 3 cents on the dollar of the total WIC grant. This is well within the operating margins of the Nation's Fortune 500 companies. I would like to describe to you what happens at the local level which makes it difficult to give precise estimates of the expenditures. My program schedules about 240,000 families to receive WIC services within a 2-month period. Each month, about 110,000 families will come in to receive services. Each WIC-certified member will receive about 10 checks for specific foods. Some of these checks are for this month, and some are for next month. Each family spends the WIC checks at authorized grocery stores. The price on the foods on each check will vary from store to store and day to day. The food instruments are for specific choices of foods, for example, two dozen eggs. They have dollar limits on the checks. But the food instruments are not for a specific dollar figure. In other words, the cost of the two dozen eggs may be $1.79 today at one store and $1.75 at a different store. The market deposits the food checks to the bank, which in turn submits the checks to the State for reimbursement. The WIC client has 30 days to purchase the WIC foods. If she receives WIC food checks on 25 September, she will purchase the food perhaps in three or four trips to the market in the 30-day period. The market also has a legal time frame in which to deposit the checks to the bank. The point of all this is that USDA, the State and local agencies do a remarkable job of bringing the participation and expenses of this wonderfully complex problem to within 97 cents of each dollar appropriated. The administration's fiscal year 1998 budget request of nearly $378 million includes a $100 million contingency fund to cover unexpected WIC food increases. The amount is necessary for the following reasons: The amount of carryover funds anticipated for fiscal year 1998 are expected to be less than the current fiscal year. To maintain current participation levels and to prevent caseload reduction, the reduction of carryover funds available in fiscal year 1998 must be adequately offset by 1998 proposals. WIC food costs rose dramatically in fiscal year 1996 and 1997 and may do so in 1998 as well. Finally, if the WIC program is to reach the administration's full funding goal, additional resources will be needed. The committee should note that even if the administration's goal is met, there will still be over 1.5 million potentially eligible WIC participants who will not be served. The President's budget proposal provides $12 billion to fund the Farmers Market Nutrition Program, FMNP. NAWD recognizes the importance of FMNP, which supports WIC's health and nutrition objectives. NAWD recommends that alternative methods for funding the FMNP be explored. Currently, funding for FMNP is subtracted or set aside from the WIC appropriation. If its funding is to be at the expense of cutting WIC caseload, then maintaining WIC caseload must be the priority. If FMNP is to remain a part of the WIC appropriation, we urge the committee to empower WIC directors with the ability to make management decisions to protect WIC caseload. Again, Mr. Chairman and members and the rest of the committee who are not here, I thank you for this opportunity to present testimony on behalf of the National Association of WIC Directors, NAWD, and remain available, along with theAssociation's Executive Director, Douglas Green, to answer any questions you may have. Mr. Skeen. We thank you very much. We have a very serious problem, as you know, with the $100 million and the funding in general; but we have always tried to full and forward fund this program. You folks have done a good job with it and we would like to keep it up, but we have another side of the ballgame going on around here when it comes to allocations. We will do the best we can. Thank you for your presentation. Ms. Jenks. Thank you very much, Mr. Chairman. [The prepared statement of Eloise Jenks follows:] [Pages 413 - 418--The official Committee record contains additional material here.] Friday, March 14, 1997. RURAL ENTERPRISES OF OKLAHOMA, INC. WITNESSES HON. WES WATKINS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA JOHN GREEN, CHAIRMAN OF THE BOARD OF DIRECTORS, Mr. Skeen. I want to skip down here to Mr. Wes Watkins, our colleague. Welcome, Wes; and I understand you have John Green with you. Mr. Watkins. You bet. I have three individuals with me. Mr. Skeen. They are not all Oklahomans, are they? Mr. Watkins. Yes, sir, you bet they are. Mr. Skeen. You know where Baha, Oklahoma, is. That is Texas. We vote 100 percent of them there. I had a friend one time who was a very strong Democrat, as most Oklahomans had been at one time, almost solid; and we were visiting, and I said, what do you do if you find a Republican? He said, we just run them around the pasture until they drop dead. We keep the votes. But I see what some Democrat Oklahomans do, they switch to Republicans. We are delighted to have you. Go ahead with the introduction, Wes. Mr. Watkins. Mr. Chairman, I am just honored, I want you to know, from the bottom of my heart about getting to be here and appear before you and this committee. Mr. Skeen. It is nice to have you back. Mr. Watkins. I am delighted to be here. I am honored also to make some introductions, Mr. Chairman, if you don't mind. A long-time friend Jan Montgomery is from my district and also very much a leader in the home economics area, nutrition area, leadership in the extension area, and a multitude of other things, but always gave time to the Rural Enterprise program. The gentleman to my immediate right is the Executive Director of Rural Enterprises and has done a tremendous job in helping it to be probably the most creative program on developing jobs and creating private sector jobs in a depressed economic rural area of our part of the State. And the gentleman to my left, who is a private sector businessman, is an innovator, an entrepreneur in his own right, has been Small Businessman of the Year in his hometown of Stillwater, where I also live, Mr. John Green who serves as Chairman of Rural Enterprises Inc. And these people don't look at the clock--they're up early and stay late in order to get the job down. Mr. Skeen. Get the job done and worry about where you're going later. Mr. Watkins. Exactly. That is why, with the help of this committee and the funding, which has helped along the way, we have been able to achieve great success in this area. We have come back to ask you for your help again, Mr. Chairman, you and the staff and other members. If you don't mind, I would like to enter my remarks for the record. Mr. Skeen. They will be in the record. I just want to say before you leave here, though, I have never known anyone who was so dedicated to a program as the one which you are involved in right now; and in your prior years of service over there, you did a lot for rural development. Mr. Watkins. We have to have it in the rural areas. Mr. Skeen. Glad to have you back, because those are tough communities to take care of. I had to make you feel good. Mr. Watkins. Thank you, Mr. Chairman. [The prepared statement of Rep. Wes Watkins follows:] [Pages 421 - 423--The official Committee record contains additional material here.] Mr. Green. Mr. Chairman, I am John Green, Board Chairman of Rural Enterprises of Oklahoma, Incorporated. I am here today on behalf of Rural Enterprises to request continuance of funding from the U.S. Department of Agriculture in accordance with the Cooperative Extension Service to fund and create jobs through small business financing and technical assistance for rural Oklahoma businesses. Rural Enterprise is a non-profit, economic development organization. Our mission is to create jobs through business financing, business development efforts, business incubators and manufacturing assistance. Technology and resource services of the organization include memorandum of agreements with the Oklahoma Cooperative Extension Service to provide small and mid-sized businesses in rural Oklahoma with technical assistance to increase profitability. REI has helped provide technical research and document procurement services to OCES and to support the OCES technology transfer agent. Rural Enterprise is a certified development company and a one-stop capital shop for the U.S. Small Business Administration. In 1996, REI was designated as a community development financial institution by the U.S. Treasury Department. Appropriations from USDA have permitted REI to provide financing and technical assistance to small businesses. Since 1981, over $94 million has been secured for ruralbusinesses. In 1996, REI has secured over $20 million for small businesses and helped create and retain 809 jobs. Also, last year, microloans for rural entrepreneurs totaled over $143,000. REI is one of the co-applicants for rural business incubators and foreign trade zone centers to encourage exportation. Continued USDA appropriations of the $433,000 plus almost $80,000 through Cooperative Extension Service derived from the $333,000 allocated to technology transfer projects in Oklahoma and Mississippi. Funding will permit Rural Enterprise to continue the economic development efforts that USDA funding has provided since its first agreement between REI and the USDA prior to 1997. As Federal and State level governments move towards increasing privitazation, intermediary organizations like REI are needed as a link to deliver services. REI is well positioned to be that link, and the USDA funding is the key to sustaining and strengthening that link. Thank you for your considering our testimony and the request that you continue the funding. Mr. Skeen. Thank you very much for your testimony. You touch on a tough situation. A lot of our rural communities have begun to die off and have been for some time. It takes an infusion of some kind of enterprise operation, and we have finally recognized that. New Mexico is a good example. We have a lot of Californians who have rediscovered New Mexico and are bringing their dairy cows in there, and we have some avenues now called Holstein avenues. It is not only the milking herds; it is also the processing. That is what you are talking about, new enterprise in these rural communities that helps keep them viable. Thank you. [The prepared statement of John Green follows:] [Pages 425 - 430--The official Committee record contains additional material here.] Mr. Watkins. I thank you, Mr. Chairman. I might say, I mentioned Jan Montgomery a while ago. She lives on a ranching operation besides giving so much time to causes such as this, trying to build off farm jobs. I thank you, Mr. Chairman, for your leadership and your dedication and commitment. And I just wondered, behind you there, is that Dolly? Mr. Skeen. No, that is some clones we are working on. Mr. Watkins. I just kind of wondered. Mr. Skeen. They used to be Scotsmen. Mr. Watkins. We have some. Thank you, Mr. Chairman. Mr. Skeen. Let me tell you a story. When I first came up here, I was sitting next to a young man on Science and Technology who later became a governor of a great State and saw we were talking about limited rural communities; and he said, well, where do you live? I said, I live south of a little town called Picacho, New Mexico. And he said, well, where is that? I said that is west of Roswell about 39 miles. He said, where is Roswell? I said I live at the ranch; it's about 17 miles off the paved road. He said, there is no place in the United States that is 17 miles off a paved road. So these folks from the east have a lot to learn. Mr. Watkins. I have had a similar experience. Mr. Skeen. We like that living out there in the country, you don't have to fight with all your neighbors unless you make a long trek to do it. Thank you all very much. ---------- -- -------- Friday, March 14, 1997. U.S. TELEPHONE ASSOCIATION WITNESS JACK KEEN, PRESIDENT AND GENERAL MANAGER OF WESTERN NEW MEXICO TELEPHONE COMPANY Mr. Skeen. Mr. Jack Keen with the U.S. Telephone Association thank you for being patient. Welcome. Mr. Keen. Good morning, Mr. Chairman. I wish we had some of those 17 miles off the paved road myself instead of 50 miles. Mr. Skeen. We have some that are a lot worse, you bet. That is a good pin you have on there. Mr. Keen. I thought you might like that. I wear that on occasion. Mr. Skeen. What is it you need? Mr. Keen. I have submitted my written testimony for the record. Mr. Skeen. Yes, sir. We appreciate that. It will all be in the record. Mr. Keen. Good morning, Mr. Chairman. My name is Jack W. Keen. I am President and General Manager of Western New Mexico Telephone Company, Silver City, New Mexico. Western is a RUS borrower, as you well know, and serves over 5,000 customers spread out over 15,000 square miles in the southwestern part of the State. Mr. Skeen. You are one of the most unique telephone companies anywhere in the world--or in the United States, I should say--because you are not a big corporate entity, you are still a family-owned telephone system. Mr. Keen. Roughly the size of the State of Maryland, andwe are still in charge of all the operations of the company. Mr. Skeen. I have been bragging about you a lot. Mr. Keen. Thank you. I appear before you today as a representative of the United States Telephone Association. USTA represents over 1,000 local telephone companies that provide over 95 percent of the access lines in the United States. I present this testimony on behalf of the members of USTA and, of course, the customers they serve. Local telephone companies have two goals--meeting the needs of our customers and maintaining universal service at reasonable rates. USTA members strongly believe that the RUS telephone loan program is needed to maintain universal service. We appreciate, of course, the strong support you and this committee in particular have provided the telephone program since its inception back in 1994. As you know, the telephone industry is in the midst of a major change. It is hard to keep up with it all. Without system upgrades, rural areas will likely be left out of the information revolution. As the need and demand for new service evolves, rural telephone systems must have access to low-cost RUS financing to fund improvements. We look to digital switching, access to the Internet, a lot of new things coming down the road; and, of course, that requires broad band fiber optic lines in order to accommodate that. Mr. Skeen. That was one of my questions for you, fiber optics. Mr. Keen. And we have fiber optics about 380 miles in our system. Mr. Chairman, you know that New Mexico is one of the most rural states in the United States; and you know that my company, Western, and other RUS borrowers have worked hard to build the infrastructure to serve those customers. We also have a responsibility, as many of those are ratepayers as well. Many local phone companies are concerned about making long-term commitments needed to build rural telecommunications infrastructure itself. One answer, of course, is that RUS has always been an important element in convincing local telephone companies to make those needed investments. After all, RUS is a voluntary program designed to provide incentives to local telephone companies to build a plant essential to rural economic growth. RUS endures because it truly is a private-public partnership in which the borrower telephone systems are channeled through the Federal Government to help rural customers, the true beneficiaries of the RUS program. That is the way RUS borrowers look at it, is for the benefit of our customers. The government's contribution is protected by the equity, technical expertise and dedication of local telephone companies. Continuation of the loan levels for the RUS telephone programs that were recommended by this committee, signed into law for fiscal year 1997, would maintain our ability to serve the Nation's telecommunications needs and to maintain universal service. Rural Americans, I have learned, in our service area don't want to wait any longer to be full participants in the information age. They are very much like people all over the country. One and a half million dollars in subsidy authority would restore the proposed $35 million cut in hardship loan levels. This seems like an excellent use of scarce government resources for the benefit of rural Americans. In conclusion, I am pleased to remind you that the RUS telephone program has a perfect record of no defaults in over a half century of existence. We as RUS borrowers take great pride and take deadly serious our obligations to the government, the Nation and our subscribers; and certainly I can pledge that we will all do our best to assure universal telephone service at reasonable rates. I would like to quote Senator Conrad Burns, who spoke to our USTA convention last year in 1996. The people say to me, my gosh, how do you make a living in Montana? We go through here, and we don't see anything for miles. And I say, you know what? There are people in houses in Montana, and they have got faces, and they have got dreams, too, and their needs are the same as anybody in any other part of this country. I represent a big State. From one end to the other is further than from Washington, D.C., to Chicago, so I have got to deal with distances. But you know what? Our kids are just as important, their eyes are just as bright, and their dreams are just as valid as any other kids. They just want an opportunity, and local telephone companies are a vital part of the infrastructure that will allow them that. Thank you. Mr. Skeen. Thank you, sir. I really appreciate what you have to say, particularly from the aspect of new technology involvement in the communications system. However, I was shocked to find out here a few days ago that we have one large community in New Mexico that has, though, no fiber optics that is serviced by one of the bigger companies, but not to mention the name. A community in New Mexico has no fiber optic access at this point. Mr. Keen. It will be hard to be part of the information superhighway without it. Mr. Skeen. The technology is there and is part of the everyday living. I don't know how you can, particularly from a health standpoint and some of the other things. Mr. Keen. That is right. Healthcare, distance learning, all of the new things. Mr. Skeen. All the technology base. Thank you very much, Mr. Keen. Mr. Keen. Thank you. [The prepared statement of Jack Keen follows:] [Pages 434 - 439--The official Committee record contains additional material here.] Friday, March 14, 1997. WESTERN RURAL TELEPHONE ASSOCIATION WITNESS SAM J. MASELLI, EXECUTIVE VICE PRESIDENT Mr. Skeen. Sam Maselli with the Western Rural Telephone Association. Welcome, Sam. Mr. Maselli. Good morning, Mr. Chairman. Thank you, Mr. Chairman, for the opportunity to appear before you this morning related to agriculture appropriations for fiscal year 1998. We sincerely appreciate your ongoing commitment and hard work for the benefit of rural America. Mr. Chairman, my name is Sam Maselli; and I am the Executive Vice President of the Western Rural Telephone Association. WRTA is a regional trade association comprised of nearly 150 small, rural, local telephone systems scattered throughout the western United States and the Pacific rim territories. All of WRTA's member systems rely or have relied heavily on the RUS telecommunications loan program for their infrastructure financing needs. In this context, WRTA strongly supports the continued strength and viability of the RUS program in order for it to allow rural LECs to meet their infrastructure development needs in the future. Mr. Chairman, the RUS telecommunications loan program stands as a remarkable private-public partnership success story which continues to produce tangible results in the lives of our rural citizens. With the assistance of RUS capital and technical standards, rural telephone systems are providing modern services of a highly sophisticated quality. However, with the dynamic pace of change in the development of information technology, the need for RUS lending is greater than ever. Due to the nature of rural areas, particularly in the rural west, the challenge of providing modern service is truly formidable. Compared to their urban counterparts, rural communities are faced with higher poverty rates, lower income levels, physical isolation and, ultimately, higher costs associated with the deployment of modern infrastructure. Rural economic development is often frustrated by these unique rural conditions. With our Nation in the midst of the information revolution, rural areas are confronted with the dilemma of being left behind. Despite these obstacles, information technology holds significant promise for our rural communities. As we have seen in recent years, information services can directly benefit our schools, libraries, hospitals, clinics; and it can facilitate commercial opportunities such as telemarketing, insurance and manufacturing not possible in previous years. While the explosive nature of technological change offers our rural areas genuine opportunity for economic and social progress, we believe special attention must be placed on providing these communities with the appropriate set of tools to address their unique needs. The RUS telecommunicationsloan program is playing that critical front-line role in ensuring that rural America is indeed linked to the technology of the future. Mr. Chairman, in this regard WRTA believes that loan levels next year should be continued at the same level that Congress authorized last year. We also are requesting that the 7 percent interest rate cap on Treasury-cost loans be removed again in fiscal year 1998 to protect the viability of the program. We also believe that this year's bill should continue the restriction on the retirement of RTB Class A stock as provided in the past 2 fiscal years. Finally, we support the President's budget request for the DLT loan and grant program and urge the subcommittee to strongly take these recommendations into consideration. Again, thank you, Mr. Chairman, for the opportunity to appear before you this morning. Mr. Skeen. Thank you, Mr. Maselli. We appreciate what you had to say and leave with us, and we share the same concerns. We will try to get it all weeded out here through the allocation process, and if we ever decide on what kind of budget we have, we will get on the road. Mr. Maselli. We appreciate your hard work. Mr. Skeen. Thank you. We appreciate your testimony. [The prepared statement of Sam J. Maselli follows:] [Pages 442 - 447--The official Committee record contains additional material here.] Friday, March 14, 1997. NATIONAL COOPERATIVE BUSINESS ASSOCIATION WITNESS DAVID CARTER, PRESIDENT, ROCKY MOUNTAIN FARMERS UNION Mr. Skeen. Mr. David Carter of the National Cooperative Business Association. Welcome, Mr. Carter. Mr. Carter. Good morning, Mr. Chairman. It is good to see you again. Dave Carter. I am President of the Rocky Mountain Farmers Union, a general agricultural organization representing 13,000 farm ranch families in Colorado, Wyoming, and New Mexico. I also serve as the administrator for our foundation, through which we administer the Rocky Mountain Regional Cooperative Development Center, and I am testifying this morning on behalf of both the Farmers Union and the National Cooperative Business Association. Cooperative development is a part of a proud heritage within the Farmers Union and in the Rocky Mountain region. Specifically, our organization has been directly involved in several innovative and exciting programs utilizing the cooperative model as a tool to foster sustainable human and economic development in the underserved regions of our area. The funding that we have received, the assistance we have received through USDA's Rural Cooperative Development Grants program has been instrumental in providing us with the capacity to provide useful, meaningful assistance to these groups. I want to mention just a couple of specific examples. Imagine a group of predominantly Hispanic subsistence ranchers in southern Colorado and northern New Mexico working directly with rabbis from Baltimore to process and market certified Kosher and natural meat products in markets from Santa Fe to San Francisco. But that is exactly what is happening today. It is happening because we were able to provide assistance to a group of ranchers who demonstrated the willingness and perseverance to put together what has now been chartered as the Ranchers Choice Cooperative. In eastern Colorado, a group of wheat farmers are now in the midst of an equity drive to launch a cooperative project to purchase a state-of-the-art bakery to process and market specialty breads. We have got ranchers in western Colorado who are developing a cooperative to work directly with the restaurant trade. We have producers in New Mexico, wheat farmers, who are now completing a feasibility study regarding the purchase or construction of a flour mill and cooperative. And in little more than a week, I will be down in Las Cruces to meet with leaders in the longhorn industry who are now working to produce a branded longhorn beef cooperative. The 1996 Farm Bill has made a significant transition in the Federal approach to agriculture. Producers have been told that, rather than relying on farm programs for the baseline assistance, that we have to move more into the competitive marketplace. The program that is now called the Grants for Rural Cooperative Development, section 747, paragraph C, paragraph 4 of Public Law 104-127 provides an important part to that process. This program focuses on supporting nonprofit institutions for the purpose of enabling the institutions to establish and operate centers for rural cooperative development. It is authorized to provide funding at $50 million per year. The new statutory language defines the goals of these centers as facilitating the creation of jobs in rural areas through the development of new rural cooperatives, value-added processing and rural business. The Rocky Mountain Center perfectly fits this definition of eligible applicant for the program's assistance. Let me just add that it is not just an issue of jobs. What we are creating right now is ownership, producer ownership and some new businesses, as we move more into the global marketplace, new businesses that are going to provide producers and rural citizens with the ability to compete against the established companies. Centers in other regions of the country have similarly undertaken such projects in building value-added agricultural processing facilities. They have also developed community development credit unions, partnership among cooperative financial institutions, flexible manufacturing networks and cooperatives providing housing and child care for impoverished farm workers. Accompanying my testimony is a copy of a document entitled Best Practices for Cooperative Development, Defining, Communicating and Replicating Success; and this has been an important document in providing some guidance to those of us that are in the field working with producers to develop these new enterprises. This coming year, centers will be involved in replicating successes they have achieved and breaking new ground in areas where cooperative development is needed. The electric industry is rapidly being deregulated in every part of the country; and consumer-owned, rural electric cooperatives have provided reliable and affordable electricity to rural Americans since the rural electrification program began directly for them in the 1930s. Once again, a small Federal investment can provide essential assistance to develop consumer-owned energy purchasing cooperatives so that rural Americans won't be left in the dark by the current restructuring. The President has proposed allocating $1.7 million in his budget for this program. Though these funds would indeed provide important support for the center's endeavors, further funding would have a far greater impact. Again, $50 million is authorized under this program. In fiscal year 1996, 87 proposals submitted for program funding qualified for approval under USDA's criteria, and the amount of funding requested for these meritorious applications was $13 million. The administration recognized the importance of these programs when it requested that $5 million be allocated to it for fiscal year 1995, and we feel that $5 million in funding for the program would be a wise and cost-effective use of the limited funds available for rural development in the Federal budget. Each dollar invested in cooperative development yields many more benefits for our economy in the long-term. I thank you again for this opportunity to testify. Mr. Skeen. Thank you, too, and thank you for a very robust presentation. Mr. Carter. Yes, sir. [The prepared statements of David Carter and Russell Notar follow:] [Pages 451 - 460--The official Committee record contains additional material here.] Friday, March 14, 1997. HEALTH INDUSTRY MANUFACTURERS ASSOCIATION WITNESS G. GREGORY RAAB, VICE PRESIDENT FOR GOVERNMENT AFFAIRS Mr. Skeen. Gregory Raab? Welcome, Gregory. Mr. Raab. Thank you. Thank you, Mr. Chairman. My name is Greg Raab, and I am Vice President for Government Affairs at the Health Industry Manufacturers Association. I wish to stress four points today, Mr. Chairman. First, we urge you to keep the pressure on FDA to improve, particularly its review of breakthrough medical technologies. Second, FDA's medical device program can be improved without increases in appropriations, but it must receive stable funding. Third, if cuts are to be made in the FDA budget, they should be focused on low priority work. They should not threaten activities central to FDA's core mission such as product reviews and patient safety. Finally, the administration's medical device user fee proposal masked dangerous cuts to the FDA's budget that could undermine public health. Without question, FDA's performance in regulating medical devices has improved in the past 2 years. It has instituted administrative reforms that even a year ago seemed unlikely. We draw a number of lessons from this. First, the impact of this subcommittee is significant when it comes to reforming FDA. We have urged you to continue to push the agency for a clearer picture of just how resources are used and to press the agency to make improvements needed to meet its statutory goals. Second lesson is that FDA can improve without increases in appropriations. It has begun to rely on the management tools at its disposal, just as this subcommittee directed, and is beginning to see some solid results for the effort. The third lesson of the agency is that the agency does not need medical device user fees. Congress has repeatedly rejected these fees, and the agency has shown it can make improvements without them. This last lesson is particularly important this year, Mr. Chairman. The administration's medical device user fee proposal is set up in such a way that if Congress does not accept the savings it offers, the budget authority for FDA's medical device program would be slashed by $40 million, or 388 FTEs. If that happens, product review performance would fall well below current levels, which are already far short of congressional mandates; and patients, without question, would suffer. We strongly oppose these reductions. FDA personnel and the medical device program must be able to count onreasonable funding to do their jobs. Beyond that, before the subcommittee considers any kind of medical device user fee, the agency must be doing all that it can to use its existing funds wisely in performing its core duties. Unfortunately, it is not. Its performance in reviewing life-saving and life-extending MPA products, the high-tech products, have been poor at best. This is due to a variety of policies that hinder innovation and slow approvals. Until these activities are substantially reformed, FDA can't claim that it has done all that it can to use scarce appropriations efficiently. Ultimately, we believe that FDA's tendency to veer away from its primary responsibilities, such as clearing new PMAs, can be achieved only through legislative reform. We have learned that administrative reforms must be locked in, Congress must pass legislation to modernize the agency and outfit it for the next century. While Congress grapples with the elements of this modernization effort, we urge you to take the following steps in the FDA budget: reject medical device user fees; ensure level funding for the device program; force the agency to continue to modernize; and, finally, ensure that any budget reductions are not made in the areas that are central to the agency's primary mission, that is medical device reviews and patient safety. By taking these steps, you will help us and the jump-start that you gave FDA reform in the past couple of years so that Congress can, in fact, tune up the agency legislatively. I appreciate this opportunity to be here and would be glad to answer any questions you might have. [The prepared statement of G. Gregory Raab, Ph.D., follows:] [Pages 463 - 476--The official Committee record contains additional material here.] Mr. Skeen. Mr. Raab, you go right down the list of problems we have been dealing with in the FDA, and we have made some improvement, and I appreciate you bolstering it, and I think it is a good presentation. Mr. Raab. Thank you. Mr. Skeen. You have touched on exactly the problems we have had all along. It is going to be hotly debated. Mr. Raab. That is exactly right, Mr. Chairman. You have been wonderful here helping the agency, prodding them to reform. Mr. Skeen. At least we have had the conversation between the two elements, the providers and the regulators, and I think at least we have a talking situation going on, and we have moved some mountains. Small ones. Mr. Raab. Pretty soon we will move the entire mountain. Mr. Skeen. Very well. ---------- Friday, March 14, 1997. NATIONAL TELEPHONE COOPERATIVE ASSOCIATION WITNESS FAYE WELLS, RINGGOLD TELEPHONE COMPANY Mr. Skeen. The National Telephone Cooperative Association. Ms. Wells. Good morning. Mr. Skeen. Good morning, Faye. Ms. Wells. Mr. Chairman, I want to thank you for the privilege of testifying before you today regarding recommendations for fiscal year 1998. I appreciate the opportunity to discuss the future funding needs for the Rural Utility Service, RUS, telecommunications loan programs. Mr. Chairman, I am the Director of Governmental Affairs for Ringgold Telephone Company in Ringgold, Georgia. I am testifying today on behalf of the members of the National Telephone Cooperative Association. NTCA is a national trade association representing 500 telephone companies and cooperatives in 45 States. Our telephone company was established in 1912 in the back of a vacant store building. The first telephone cable was installed in 1929 to serve approximately 125 customers. Today, we serve nearly 11,000 subscribers in rural Georgia. We certainly would not have been able to if Ringgold had not had access to funding provided under the REA and RUS programs. We have been borrowers of the agencies since 1959. With the help of these lending programs, we have been able to build office switches and new exchanges to meet the demand for better customer service, and as our community has grownwe have been able to grow with it. In the mid-1970s, Ringgold was able to provide all of its customers with one party service. In 1994, we launched a $7.2 million project which, when completed, will include 10 digital remote switches offices tied to each other and a host switch by fiber-optic cable ring. This switch has allowed Ringgold to provide its customers with enhanced telecommunications services such as caller ID, voice mail, Internet and Equal Access. We currently have a loan application pending before the RUS for $12 million to build additional facilities and switching in order to provide telephone service and accommodate growth in our area. If Ringgold is denied access to a RUS loan, it will be costly and difficult to provide telephone service for new customers and we may not have adequate facilities to meet the increasing demands of our existing customers for ISDN and Internet, ultimately denying them access to the information superhighway. Mr. Chairman, as you can see, the challenge of providing modern telecommunications is formidable. The RUS telecommunications lending program is helping extend the benefits of the information superhighway to rural America. Due to the capital-intensive requirements of rural telecommunications infrastructure, and the commitment to advanced communications made by the enactment of the Telecom Act of 1996, the RUS program has become increasingly important and necessary. As we continue to move into the information age, many rural telecommunications systems will be unable to modernize their networks without RUS. RUS borrowers average only six customers per mile compared to 37 per mile for the much larger telephone companies. Average plan investment per customer is 38 percent higher for those who use the RUS programs. RUS is making a difference by allowing assistance to provide rural Americans with communications services comparable with what other Americans have access to. RUS is also making a difference in rural schools, libraries, and hospitals through extensive use of distance learning and telemedicine grant programs. NTCA, which represents our concerns here in Washington, recommends the subcommittee continue its ongoing commitment to the RUS programs. Specifically, we support continuing the current funding levels. The current fiscal year funding bill removed the 7 percent cap on the RUS treasury loans and we support a continuation of this policy. NTCA also supports full funding of the distance learning and telemedicine grant and loan program. A final request would be for the subcommittee to continue its critical report language ensuring that the funds in the rural telephone bank are not swept by the treasury. Mr. Chairman, thank you for the opportunity to address you today, and on behalf of NTCA, Ringgold Telephone Company and rural telephone companies across America, we deeply appreciate your commitment to rural telecommunications development. Mr. Skeen. Thank you very much, Faye. [The prepared statement of Faye Wells follows:] [Pages 479 - 483--The official Committee record contains additional material here.] Mr. Skeen. What is your population base, population numbers for your system? Ms. Wells. In our county, it is about 42,000. Ringgold serves two-thirds of Catoosa, which is the more rural side and our counterpart---- Mr. Skeen. So you are spread out over quite an area, then. Ms. Wells. Yes, sir. We have 11,000 access lines and it is pretty rural. We are spread out pretty far. Mr. Skeen. We thank you for your testimony and your service. Ms. Wells. Thank you. ---------- Friday, March 14, 1997. NATIONAL RURAL TELECOM ASSOCIATION WITNESS JOHN F. O'NEAL, GENERAL COUNSEL Mr. Skeen. John O'Neal, National Rural Telecom Association. Mr. O'Neal. Thank you, Mr. Chairman. It is always a pleasure to appear before you. Mr. Skeen. Glad to have you. Mr. O'Neal. I am appearing again in support of a continuation of a strong telecommunications lending program, and it is a sincere pleasure to follow that testimony by Faye Wells, to pinpoint precisely why this program is important to rural America. For the record, I am John F. O'Neal, General Counsel of the National Rural Telecom Association. NRTA is comprised of commercial telephone companies which borrow their capital needs from the Rural Telephone Service of USDA to extend and modernize telephone service in rural areas. Our U.S. borrowers serve almost 6 million subscribers in 46 States. In accepting loan funds, borrowers assume an obligation to serve the widest number of people in their service territory. Almost $11 billion has been loaned for rural telecommunications infrastructure development since the program's inception. Through 1996, Mr. Chairman, over $4 billion in principal and $5 billion in interest has been paid by telephone borrowers. Program principal repayments now annually exceed outlays so there is no adverse impact on the treasury. Mr. Chairman, I am proud to report again this year there has never been a default on telecommunications lending programs. All loans are being repaid in accordance with their terms. Given the current and projected loan demand, which is detailed more thoroughly in my prepared statement, NRTA believes that hardship, cost of money, and guaranteed loan levels next year should be continued at the same levels that Congress authorized last year. We particularly believe that hardship loans should be continued at last year's level, $75 million, despite the fact that the President's budget proposes a reduction. There is a substantial backlog in this program and a substantial demand in this program. The current backlog is $84 million this year with almost the entire annual authorization being already approved for this year. So there is substantial demand there. Again this year we are supporting removal of the 7 percent ceiling on the cost of money loans so that this program can be maintained at 1996 levels without subsidy cost. We also believe that this year's bill should continue the restriction on the retirement of Class A stock in Rural Telephone Bank as well as the prohibition against the transfer of its fund to the general fund. A new loan and grant program targeted to rapid deployment, telemedicine, and distance learning technology was authorized in the farm bill last year. We support the President's budget request for $150 million in cost of money loans and $21 million in grant authority for this important program. Mr. Chairman, our U.S. telephone program is truly a sound program that is in step with the economic and political needs of our time. It represents an investment in rural infrastructure and rural jobs, sound investments which form the basis for meaningful rural development, as pointed out by the administration witnesses yesterday. At the same time it is cost efficient for the taxpayer, most of subsidy cost is eliminated. That which remains has been targeted to the highest cost, lowest density systems. Most loans are made at Treasury's cost-of-money or greater today. The Rural U.S. Telecommunication Lending Program has a proud historical record, and I believe an unlimited future potential for our country. Thank you again, Mr. Chairman, for the opportunity to present our views. Mr. Skeen. Thank you, John, and you have a lot to be proud of, because the associations have been well managed, well operated, and no defaults. It speaks well for the system. Mr. O'Neal. Absolutely. We are proud of that record. Mr. Skeen. Not only that, but you have a lot of maintenance costs. Thank you. Mr. O'Neal. Thank you, sir. [The prepared statement of John F. O'Neal follows:] [Pages 486 - 491--The official Committee record contains additional material here.] Friday, March 14, 1997. PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA WITNESS ALAN F. HOLMER, PRESIDENT Mr. Skeen. Mr. Holmer is here with the Pharmaceutical Research and Manufacturers of America. Welcome. Mr. Holmer. Thank you very much, Mr. Chairman. Mr. Skeen. Your entire testimony will be in the record. You can abstract it any way you would like. Mr. Holmer. Thank you very much. As you know, the PhRMA represents the research-based pharmaceutical industry. That is, companies you are familiar with like Merck, Pfizer, Bristol-Myers, Squibb, and many other companies like them that are devoted to coming up with more cures and more treatments for more patients. We are very concerned about the administration's proposed budget for the FDA. A couple weeks ago you described their approach as being phoney, and we concur with that completely. We care passionately about the administration's budget, because it puts at great risk the Prescription Drug User Fee Act. This is the program where the pharmaceutical industry over the last 5 years has paid $327 million in exchange for approved drug approval process at the FDA, and that is exactly what we have achieved: Approval, the approval times have gone down in the last 5 years from about 30 months to get a drug approved, down to about 15 months to get a drug approved. Mr. Skeen. Now, this is some progress. Mr. Holmer. Yes, and we are very pleased with that. They can do more, we think, and we are working with them. In fact, we have been in negotiations with the FDA and they have agreed that for the renewal of this program, which expires on September 30th, we have a program that we believe will reduce the drug development and approval time by another 12 months. So we will get drugs to patients about a year earlier than would otherwise be the case. We have agreement on that. The problem is we have got to find a way to fund the program. And as we count it, the President has proposed roughly an 8 percent cut in the FDA, and with that kind of cut you are certainly going to lose the improvements in the program we have negotiated. You will probably lose the improvements that were in the program initially, and when you add it all up, that could cause a delay in the time it takes to get a drug to market by roughly 2\1/2\ years. It would just be a horrible problem. Every person on this panel knows of individuals who are waiting for a cure or for better treatments for disease. It may be a Member of Congress individually, it may be a member of their family, it may be a friend or coworker. But we all know there are millions of Americans who are in desperate need to have an FDA that is going to be able to operate asefficiently and effectively as possible. An 8 percent cut in their budget, we believe, is going to preclude that. So as you go about making your decisions with respect to the budget for fiscal year 1998, we hope you will remember those patients and the extent to which they will be disadvantaged if the FDA is not fully funded. What we are looking for, we respectfully suggest, Mr. Chairman, is level funding for the agency with an adjustment for inflation, plus a special level funded designation for the human drug approval process at the FDA. That is our position, Mr. Chairman, and we hope it can receive your sympathetic consideration. Mr. Skeen. Thank you. [The prepared statement of Alan F. Holmer follows:] [Pages 494 - 499--The official Committee record contains additional material here.] Mr. Skeen. After hearing the news this morning about the President's dilemma, maybe he will be interested in talking about user fees on medications. Mr. Holmer. We expect that to be the case. Mr. Skeen. We are all rooting for him to have a quick recovery. We are glad you are making progress and you folks have certainly responded well, and we appreciate that. Mr. Holmer. Thank you. Our companies, just so you know, Mr. Chairman, are going to be investing in 1997, $19 billion on research and development, over 21 percent of their sales. And as a result of that you were able to see in 1996, there were 53 new medicines to treat 40 different diseases that were approved by the Food and Drug Administration that had been promoted by our companies, submitted for our companies for approval. So it is a tremendous record of achievement that the industry and the FDA have achieved, and we want it to keep going. Mr. Skeen. We certainly appreciate that because we saw enough of it go overseas. Mr. Holmer. Thank you. ---------- Friday, March 14, 1997. SOCIETY FOR ANIMAL PROTECTIVE LEGISLATION WITNESS CATHY LISS Mr. Skeen. Cathy Liss with the Society for Animal Protective Legislation. Welcome, Cathy. Ms. Liss. Thank you. This morning, Mr. Chairman, I was going to testify regarding four separate matters. The first---- Mr. Skeen. Boy, you are very versatile. Ms. Liss. A lot to talk about and I will try to make it as brief as possible. The first is a desperate need for $12 million in appropriations for Animal and Plant Health Inspection Services' Animal Care Program, so they can enforce the Animal Welfare Act. Nationwide, there are more than 1 million animals covered by the Animal Welfare Act's standards for basic care and treatment. The USDA inspectors visit more than 10,000 separate sites to ensure compliance with the law, the dealers, research facilities, exhibitors, carriers, and handlers. And really what they need would be about 100 field inspectors to adequately enforce the act and visit these sites an appropriate number of times. And sadly, the number of inspectors have been decreasing over time from a peak of 86 inspectors back in fiscal year 1993. Now, however, there are only 72 field inspectors responsible for making these compliance inspections at more than 10,000 sites. Congress has maintained virtually level funding for the program and, in fact, it has gone down the past couple of years, and for each year it maintains about the same level, they are losing about four staff people. The program simply cannot continue to sustain such continued losses. There also are a couple of areas within the Animal Welfare Program where we might be able to save a little bit of money, and one would be to eliminate what they call the Preceptor Program, which is a specialized education that costs $10,000 and educates only two or three inspectors, and they are taking these two or three inspectors out of the field where we should be doing inspections for up to 6 weeks. So that is a serious loss. Mr. Skeen. For the course? Ms. Liss. For the course. I think they could do something through the use of videos that would be available for all the inspections versus giving specialized training to just a couple of inspectors. Another possible change in the Animal Care Program would be to eliminate the random source Class B dealers who are supplying dogs and cats for research purposes, and there is legislation to this effect pending in Congress introduced by Agriculture committee members Congressman Charles Canady and Congressman George Brown, H.R. 594, and this would greatly reduce USDA's regulatory burden. These few entities require four times the number of inspections than the other licenseesand registrants do, simply because they have such a tough time complying with the minimum requirements of the law that we should just get rid of them altogether. And research still would be able to obtain the dogs and cats they need through our means without having to get them through these particular class of dealers, and they are known for acquiring people's pets through fraud and outright theft and it would be very useful to do away with that problem. Moving on to another area where hopefully there could be an appropriation of at least $900,000 made available for the Animal Welfare Information Center at the National Agriculture Library. It has received funding of $750,000 since its creation more than 10 years ago. In addition, approximately half of the funds that are intended for this center are actually being taken by the National Agriculture library and used for other purposes. Therefore, we are hopeful of one of two options, either that the center would get an appropriation of this $900,000, or there might be a line item appropriation assuring that the whole $750,000 would be made available to the Animal Welfare Information Center. The center provides an essential resource for scientists and veterinarians, caretakers and administrators involved in the care and use of animals for research purposes, providing information on reducing pain and suffering in experimental animals, including use of anesthetics and analgesics and replacing use of animals in experiments, and they also provide employee training. It is a very small dedicated staff that are doing wonders with computers and have a great Web site and provide a tremendous resource to researchers. Under the Horse Protection Act, we are hoping for an appropriation in the amount of $500,000 for enforcement purposes. Historically, there has been a reliance on the designated qualified persons, the DQPs, to conduct checks of the horses to see which ones may be sore, and what we have found over time consistently is that when the USDA veterinary inspectors are present they are finding far more horses that are sore than when the DQPs are there alone. When USDA is present, the turndown rate is 2.48 percent whereas when it is just the DQPs present, it is .95 percent. There are more than 500 horse shows a year which need to be monitored with over 100,000 horses that have to be examined, and APHIS was only able to be present for 50 of those horse shows. In addition, they do have use of thermography equipment, which we strongly support, and the committee graciously made funds available for them to purchase this equipment a few years ago. It has been proven to be very effective as identifying scientifically those horses that are sore. Unfortunately, there isn't enough proper education in how to use the thermography equipment and it is not being widely utilized. As well as its usefulness in identifying the horses that are sore, just the presence of the equipment appears to be doing a very good job. Individuals have been known to show up at the horse shows, see the equipment, load their horses back on the trailer and drive away immediately, so it is certainly known as being a useful tool. The final issue is the Animal Damage Control Program, and we are hoping the program will be shifting and focusing on effective and publicly acceptable nonlethal methods, and particularly, there are a variety of alternative traps to the use of steel jaw leghold traps. This past year a couple of initiatives were adopted in the States of Colorado and Massachusetts prohibiting the use of leghold traps, killing snares, and a variety of other devices that we have recognized the need for controlled tools; however, we think the days of the leghold trap are numbered and it is time to move on to other options. And we have submitted for the Chairman this publication entitled ``Alternative Traps,'' which does describe the variety of alternatives for foot traps and killing traps. Thank you very much. We appreciate the opportunity to testify. Mr. Skeen. We thank you. [The prepared statement of the Society of Animal Protective Legislation follows:] [Pages 503 - 507--The official Committee record contains additional material here.] Friday, March 14, 1997. AMERICAN ASSOCIATION OF BLOOD BANKS WITNESS KATHLEEN SAZAMA, M.D. Mr. Skeen. Dr. Kathleen Sazama, American Association of Blood Banks. Welcome. Dr. Sazama. Thank you. Good morning, Chairman Skeen. Mr. Skeen. Good morning to you. Dr. Sazama. I am Dr. Kathleen Sazama. I am a Professor of Pathology and Laboratory Medicine at the Allegheny University of the Health Sciences at Philadelphia, and I serve on the American Association of Blood Banks' Board of Directors. We appreciate this opportunity to appear before you today to support full funding for the FDA in fiscal year 1998. Adequate FDA funding is essential to ensuring the safety of the Nation's blood supply. I will also discuss reforms to improve blood safety and conserve FDA resources. The AABB is the professional society for almost 8,500 individuals involved in blood banking and transfusion medicine. More than 2,200 AABB members select virtually all of the blood supply of this country and transfuse more than 80 percent of it. The AABB sets standards and inspects and accredits blood collection and transfusion facilities. Since the early 1980s, the FDA has increased its regulatory oversight of blood in response to the emergence of HIV, the virus that causes AIDS. The AABB also met this challenge by continuously revising its standards to adopt new donor screening and revise blood testing methods. As aresult of these methods, blood safety levels have vastly improved. In fact, this week, the GAO released a report that said, ``The blood supply is safer today than at any time in recent history.'' To maintain this level of safety, and to continue progress toward safer blood, it is essential that the FDA has the resources it needs. The AABB is concerned that the administration's budget for the FDA is dangerously inadequate and relies excessively on unauthorized user fees. While user fees may be appropriate for pharmaceutical companies who are willing to pay for faster license application reviews, as a matter of policy, user fees are inappropriate for blood. Blood is a shared resource that is drawn from altruistic individuals and processed by nonprofit organizations. Imposition of user fees on this system would result in higher medical bills for patients. As an alternative to user fees, the AABB and other national blood organizations are working with the FDA to develop improved regulations. Currently, the FDA must license each blood product at every production facility even though the manufacturer is fully licensed. This dual licensing system requires the agency to engage in redundant and lengthy application reviews that cause unnecessary delay in the application of new technologies. The AABB proposes that the FDA issue a single license authorizing the production of a specific set of blood products at any of the licensee's manufacturing facilities. Blood facilities could also implement new technologies faster if the FDA would adopt regulations to expedite approval of manufacturing changes for already licensed products. We support using certified private sector organizations to perform compliance inspections. Under this approach, the accredited organizations would report their finding to the FDA, which would retain the ultimate enforcing authority. The AABB applauds the FDA for taking an innovative approach in its new proposal for regulating cellular and tissue based products. Although aspects of the proposal need clarification and possibly revision, the AABB supports many of the reforms in this proposal. The AABB is very interested in exploring the use of a similar system in the blood area. We are hopeful that in the future the FDA will adopt innovative and more efficient regulatory practices for blood facilities. For the present, adequate FDA funding is critical to blood safety. I urge the subcommittee to fully fund FDA programs without consideration of unauthorized user fees. For our part, the American Association of Blood Banks will continue to work with the FDA to develop a more efficient and effective regulatory system so that the American people will continue to have access to the safest possible blood supply. Thank you. Mr. Skeen. We thank you. [The prepared statement of Kathleen Sazama, M.D. follows:] [Pages 510 - 539--The official Committee record contains additional material here.] Mr. Skeen. We have been very concerned about the levels of blood supply because of some of the situations attendant to collection and so on, and I hope we can get past this kind of a stalemate in our supplies. What is our supply situation? Dr. Sazama. Our supply situation has been very problematic and certain of the products are not readily available currently. There are throughout the year--there are times of the year when blood supplies are scarce, typically around holiday times. But currently we have also been experiencing shortages in such basic supplies as albumin, which are used in the place of blood supplies in the course, and we believe the industry is working hard to rectify that. Part of it is the unpredictable nature of when approvals for new technology will be made available and they are placed in the position of guessing when that will happen and not being able to adjust their manufacturing to accommodate the new happening, and some of the shortages are occurring that way. Others are similar to the situation with HIV, and that is unknown threats become known and we have to respond to those known threats, and that probably will always plague a human- based industry, if you will. Mr. Skeen. Well, we will see if we can't approve it, and we have the same reluctance to using the user fees as funding for this thing, because we don't think it is going to work. It doesn't make any sense to us. It is kind of a phony effort by saying we are going to reduce the cost of operating government but shift it to user fees. Dr. Sazama. Same pockets. Thank you. ---------- Friday, March 14, 1997. FDA-NIH COUNCIL WITNESS LAURA LIEBERMAN, EXECUTIVE DIRECTOR, CANDLELIGHTERS CHILDHOOD CANCER FOUNDATION Mr. Skeen. Laura Lieberman, the FDA-NIH Council. Ms. Lieberman. Good morning, Mr. Chairman. Mr. Skeen. Welcome, Laura. Ms. Lieberman. Thank you. I am Laura Lieberman, the Executive Director of the Candlelighters Childhood Cancer Foundation. Candlelighters is a member of the FDA-NIH council on whose behalf I am presenting this statement this morning. I would like to highlight a few points in my written statement. Over the past 6 years, the committee has been vitally important in addressing the funding needs of the FDA, and we are grateful for your support of the agency. Candlelighters represents over 44,000 children with cancer, their parents and the health professionals who care for them. We are an international organization founded 27 years ago who directs a network of over 450 self-help support groups across the country, who provide support, information and assistance to families and individuals whose lives have been challenged by cancer. To children diagnosed with cancer, the FDA's effectiveness can mean life and death. Without a strong and vigorous FDA positioned to respond to the research enterprise supported by partnership of our Nation's medical schools, universities and industry, children diagnosed with cancer will be denied cutting edge therapies. I am here today on behalf of those children. A diagnosis of cancer robs children of their innocence and vitality. It challenges their families financially, emotionally and physically. The only hope that a parent has when their child is diagnosed with cancer is that someone will have created a miracle through medical research and will save their child's life. It is through medical research that provides beneficial-- the stuff that miracles are made of, end up in front of the FDA. The clock is ticking for millions of Americans affected with catastrophic diseases like cancer. The trends and time lines of what it takes to identify and develop new therapies are troubling to me and the lives threatening to the children I represent today. The total development time to move a product from the laboratory to the patient grew from 8 years in 1960 to 15 years in 1990. At the same time, the cost of developing a new drug has risen from over $70 million to over $500 million. This extended development time impacts the availability of therapy time for patients and drives up the price of the end product. Thus, it is crucial that when these products arrive at the FDA that the resources and tools necessary to review and approve them exist. The FDA is the last step in realizing the wondering hope of medical research and innovation. The FDA-NIH Council also recognizes that the members of this great body have a very tough job in terms of weighing the available resources in numerous worthy Federal programs. We recognize the tough choices that you have ahead of you. In making these choices, we urge you to do all you can to ensure that the FDA is provided the necessary resources to carry out its mandates. We respectfully request the following to be considered by the committee: A total program authority of $1.19 billion for fiscal year 1998 to fully fund the current operations of this agency. This includes $120 million to be collected from authorized user fees and congressional support of the Prescription Drug User Fee Act reauthorization this year. All the stakeholders in the research and innovation process, patients, health providers, research and industry agree on how enormously successful this program has been; user fees to be used to enhance the speed of the quality of review. We oppose any user fee whose primary aim is deficit reduction. Mr. Chairman, I appreciate the opportunity to present this statement before you today and we appreciate the support of you and your fellow committee members towards this agency and look forward to working with you in the future. [The prepared statement of Laura Lieberman follows:] [Pages 542 - 546--The official Committee record contains additional material here.] Mr. Skeen. We appreciate your testimony. What is the child cancer population, do you have any estimate? Ms. Lieberman. There are 11,000 children diagnosed in the United States every year. Mr. Skeen. Eleven thousand? Ms. Lieberman. Eleven thousand. Mr. Skeen. Very significant number. Thank you very much for your concern and thank you for your testimony. Ms. Lieberman. Thank you. ---------- Friday, March 14, 1997. NATIONAL PHARMACEUTICAL ALLIANCE WITNESS G. THOMAS LONG, LEGISLATIVE COUNCIL Mr. Skeen. G. Thomas Long. Welcome. Mr. Long. Good morning, sir. Mr. Skeen. Good morning. Mr. Long. I am Tom Long, Legislative Counsel for the National Pharmaceutical Alliance, and it is a pleasure to have the opportunity to present NPA's comments on the fiscal year 1998 budget request for the Food and Drug Administration. NPA is a national trade association consisting of more than 170 companies dedicated to the manufacturing and distribution of safe, effective and affordable pharmaceutical products. We have submitted a five-page statement for the record, Mr. Chairman, and if we could just summarize and have that included, I would appreciate it very much. Mr. Skeen. It will be included in its entirety. Mr. Long. Thank you. Generic drugs represent one of the most cost-effective means of controlling United States health care costs. These products save consumers and the Federal Government more than $11 billion annually because they are sold at a significantly lower price than brand drugs. Although FDA's Office of Generic Drugs has worked diligently, almost one-half of abbreviated new drug applications are not being reviewed within the statutorily required 180 days. These applications typically stay at the agency for 2 to 3 years. In fact, only 12 percent of theANDAs are approved within one year. The Federal Government and all purchasers could realize considerable additional savings if ANDAs were reviewed in the statutorily required time of 6 months. According to FDA's estimates, 90 percent of ANDAs could be reviewed within the required 6 months in OGD and an additional $13 million annually. In the context of the size of FDA's 1997 nonuser budget of $887 million and the value of the pharmaceutical products purchased by the Federal Government, almost $2 billion for the Veterans' Administration and DOD in 1996, 13 million is a relatively modest figure. NPA commends this subcommittee for including language in the fiscal year 1997 agriculture appropriations bill conference report that directs FDA to comply with its 180-day statutory mandate. However, FDA has not heeded this instruction. Rather, FDA has insufficiently staffed OGD and failed to provide it with adequate resources, even though OGD's workload has increased considerably. NPA recommends that the subcommittee implement its instruction to FDA by taking the following actions: Appropriate $13 million directly to the Office of Generic Drugs in addition to its fiscal year 1997 funding level. In the alternative, reallocate $13 million to OGD from FDA administrative offices which oversee few, if any, programs with statutorily required deadlines. As a further alternative, appropriate sufficient funds to restore OGD FTEs to at least the fiscal year 1995 level of 155 FTEs. As a final alternative, ensure that OGD and its programs maintained 1997 funding levels in 1998, despite the administration's fiscal year 1998 budget request. Secondly, we request that FDA be required to submit as a line item agency expenditures for and by the Office of Generic Drugs. On behalf of NPI, I would like to thank the subcommittee for its time and attention to this critical aspect of FDA's fiscal year 1998 budget request and I would be happy to discuss this further with you, Mr. Chairman. [The prepared statement of G. Thomas Long follows:] [Pages 549 - 555--The official Committee record contains additional material here.] Mr. Skeen. Thank you. You said something about the Government's use of some of these drugs is very substantial. I wonder what the government would think about paying user fees. Mr. Long. We would be very open about discussing that with them, and you raise a good point. Between medicaid and the Veterans Administration and the Department of Defense, it is close to $3 million. We would be delighted to discuss that with them and the appropriators who oversee their functions. Mr. Skeen. It is likely to be part of the argument. Mr. Long. Yes, sir. Mr. Skeen. Thank you for your attendance. Folks, that is all the entertainment we have for you this morning, and I want to tell you how much we appreciate you being here and the testimony you have given and to the reporter, you do an excellent job as always. Thank you. Thank all of you. --------- Tuesday, March 18, 1997. TEXAS A&M RESEARCH FOUNDATION WITNESS DR. EDWARD A. HILER, VICE CHANCELLOR Mr. Skeen. The committee will come to order. Welcome, Dr. Hiler. You may proceed. Your entire written text will be entered into the record. You will please summarize it. Dr. Hiler. I'll sure do that. Mr. Chairman, I'm Edward A. Hiler, Vice Chancellor for Agriculture and Life Sciences in the Texas A&M University System. Mr. Skeen. What was that University again? Dr. Hiler. Texas A&M University. Mr. Skeen. Texas A&M. Thank you. Dr. Hiler. As you know the 1996 Farm Bill and the phase down of the federal programs makes research, key research, very, very important to the technological underpinning of agriculture. I'd just like to describe a couple of examples. Our written testimony has our priority list in it. The first example is our number one priority. It's a new project that we have not received funding for yet. We are doing some preliminary work on it. It's one that I think has tremendous potential. It's called designing foods for health. And it's a joint effort between agriculture and medicine. It's focused on developing fruits and vegetables, modifying fruits and vegetables, to reduce the risk of diet related diseases; diseases such as many forms of cancer, cardiovascular disease, atherosclerosis, diabetes. All of these are diet related diseases that make up many of the diseases that are key today. This initiative links a very strong agriculture program at Texas A&M with a program in Arkansas on the fruit and vegetable genetics area with a strong medical system in the University of Texas System, the M.D. Anderson Cancer Center in Houston and Southwest Medical Center in Dallas. And in that linkage basically the medical researchers are determining the compounds that are very key to reducing the risk of these diseases. These compounds then are identified in fruits and vegetables and genetic work is done. Genetic research is done to increase their levels in those fruits and vegetables. You may recall last year we brought pieces of maroon carrot for you. That maroon carrot is novel because as you know, Mr. Chairman, maroon is an important color for Texas A&M, but it's even more important because it contains eight times higher level betacarotine than ordinary carrots. And it has a marker that way, too. That's just one example of the kinds of things that can be done. I believe this type of work represents our future in this country. I believe this is the long-term health care solution for the United States. Our researchers at M.D. Anderson are a part of this. They're extremely excited. And they say that their whole effort is focused in research toward preventative type medicine at this point. This is very high for their priorities as well. So, anyway, linking the world's foremost cancer, heart, and circulatory disease centers with the nation's top vegetable, fruit improvement research centers make this a unique combination to determine the affects of disease prevention and to develop fruits and vegetables to reduce the risk of these diseases. A second request is one for which we have had continuing funding. We are requesting continuing funding. It relates to animal fiber research. As you well know, Mr. Chairman, the phase out of the wool and mohair incentive payments, even prior to the 1996 Farm Bill have left the United States sheep and Angora goat industry in a very difficult position. We believe the U.S. must maintain a viable and competitive sheep and goat industry for efficient use of the land and feed resources and for supporting the existing U.S. wool and mohair infrastructure. This is particularly important for the large areas of semi-arid United States and the Southwest that have few options for alternative agriculture enterprises. This research is focused on development and expanded use of an objective fiber measurement process. It's a joint effort of Texas, Montana, and Wyoming. At our St. Angelo, Texas Center is where the work in Texas is done and where the majority of the funding for this effort goes. This approach that's being taken there permits using a value based marketing system that we think is very important to the future in this regard. So, we had more than 50 percent of the U.S. wool clip was measured with this process in 1996 versus less than 15 percent only 10 years earlier; and about 25 percent of all wool sold in the U.S. is now objectably measured before sale. More research is needed in this area to refine these measurements before industry fully adopts innovative practices for product, selection, and marketing. We believe this research will be very important in developing new markets and enable producers to be more competitive in the existing markets. There are several other items that we have that I will not go into at this point. We have policy centers that are joint with the University of Missouri and another one on livestock and dairy, joint with Cornell University. A Center for North American Studies that focuses on the impacts of NAFTA and GNATT to a certain extent, but mainly focused on NAFTA. A World Food Distribution Training Center which is a joint effort of Prairie View A&M University, Texas A&M University at Kingsville, and Texas A&M International at Laredo, as well as Texas A&M University at College Station, that is primarily focused on assuring greater numbers of minorities entering professional fields of world food distribution. And if you look worldwide, distribution is a big, big problem. We're using our interactive TV system to teach classes. There is one class taught by one person at four locations. And with teachers at each of those locations providing supplement. Sometimes one of them will teach and sometimes another. It's a very innovative approach that we will probably see a lot more of in the future. The Texas Department of Agriculture and the United States Department of Agriculture are a part of this program as well. It started out with the Center of Excellence funding from USDA. Funding is needed we hope for a year and possibly two years to keep this afloat. Our longer-term goal is to get industry to support this effort. And we're making some inroads there. With that, I'll stop and be happy to respond to any questions or move on to the next. [The prepared statement of Dr. Hiler follows:] [Pages 560 - 567--The official Committee record contains additional material here.] Mr. Skeen. Thank you for your presentation, Dr. Hiler. It's a very interesting thing. Recently, I had the opportunity to travel into Panama for about the second time. They have a tropical forest system, a rain forest, experiment island that's going to do exactly what you said by adopting plants' ability to ward off diseases related to human health. It's a very interesting category because penicillin was a product of that same kind of research that began some years ago that started us on the antibiotics. So, I think we're really getting down to the fact that nature tells us a whole lot about how to ward off diseases for human beings, just as it wards against diseases and pests and things in its natural state. It's a very interesting study. General fiber research of course interests me very much too because being in the sheep business, the greatest successes we had were the coyotes. We are trying to control those. The animal activists are raising hell about it. But I think we can survive that as well. Dr. Hiler. Yes. I believe we are. Mr. Skeen. First of all, if they want to guard them all night long and round them all up, we would enjoy having them come out and prescribe to that kind of duty. They'd learn real quick, that isn't the process. Dr. Hiler. Yes. Mr. Skeen. Thank you very much for your presentation. It is good to see you again. Dr. Hiler. Thank you, Mr. Chairman. Mr. Skeen. Jerry Skees, Consortium of Social Science Associations. ---------- Tuesday, March 18, 1997. CONSORTIUM OF SOCIAL SCIENCE ASSOCIATIONS WITNESS JERRY R. SKEES, PH.D., PROFESSOR OF AGRICULTURAL ECONOMICS Mr. Skeen. You almost have my name down. Mr. Skees. Pretty close. Mr. Skeen. Are you Catholic too or Scottish? Mr. Skees. Yes, sir, Welch. Mr. Skeen. That's pretty good; a pretty close neighborhood. Mr. Skees. Thank you for the opportunity. Mr. Skeen. You may proceed any way you'd like. Your full text will be in the record. Mr. Skees. I appreciate the opportunity to come before you this afternoon. Mr. Skeen. We're delighted to have you. Mr. Skees. From the rank and file research community, I'm at the University of Kentucky, an Agricultural Economist. I also serve on the Board for the American Agricultural Economics Association. Today, I'm here to testify on behalf of the Consortium of Social Science Associations. This is over 100 or nearly 100 different associations, scientific societies, institutes, universities. So, I feel fairly humbled to be representing that diverse of a group of scholars. I've known a lot of these people through my years in my career and have a lot of respect for the scientists. Within the community of agricultural research system, social science sub-disciplines include agricultural communications, agricultural economics, agricultural education, family and consumer economics, human development, family studies, rural sociology; a whole scope of social scientists with very different approaches to problems and problem solving. These disciplines seek to help us understand the factors that affect the well-being of rural people, the viability of the rural communities, the sustainability of the farm, the rural businesses, preservation of rural environments. So, a very broad agenda, Mr. Chairman. At this time, I'm sure you're keenly aware that understanding the relationship between markets, society, the well-being of people, the behavior of people becomes a key when we start talking about economic development and creating new wealth in rural communities. So, clearly I hope you can sense that I'm committed to the cause here. This is a noble profession that we're in. We think there are some priorities that we would like to put on the table before you. We're interested in full funding at $8 million, as recommended by the National Association of State Universities and Land Grant Colleges for markets, trade, and rural development, and the NRI Program. We're interested in full funding at $1.595 million, as recommended by NASULGC for the research programs administered by the four regional rural development centers. Funding is recommended by NASULGC for CSREES initiatives on managing change in agriculture and enhanced support for the Economic Research Service of USDA. I think you can appreciate that with the things that are going on now in the agricultural economy, change and adjusting to change, issues like risk management, environmental concerns; the new Farm Bill, of course, is what people are all talking about up here, what that means for change. I think that we can all agree that social scientists have a role to play here. In my testimony I've tried to highlight a few reasons that we're concerned about these areas of support. In particular, some things that we're interested in. So, I'll leave that for the record. I want to just point to a couple of examples now of some of the types of research that have occurred in the last few years. I went through a whole host of research the social scientists have done over the last couple of years. And it was hard to pick and choose. But I thought I would pick one here today. One area that clearly is going to be important is when we look at the trade negotiations that we've been through, one of the things that we've been successful at is breaking down some of the barriers to trade. But at the same time, we've got some studies here done by the Economic Research Service in collaboration with Virginia Tech University that recently provides the first analysis to help us understand some of the other types of barriers, some of the technical barriers to agricultural trade. This is going to be a very important issue for those that are concerned about barriers that are facing U.S. exporters. The VPI Study, along with a separate study conducted at Utah State University raise new concerns about regulatory barriers in the world markets. Clearly, social scientists are going to have to be involved in helping the U.S. understand this so that we can be in a good negotiation position with our competitors around the world. So, that's one piece of research that I wanted to highlight for you. Basically, again, I'm here to answer any questions. I appreciate the opportunity to come spend a few minutes with you and talk about some of the social science research priorities. [The prepared statement of Mr. Skees follows:] [Pages 571 - 587--The official Committee record contains additional material here.] Mr. Skeen. Dr. Skees, we appreciate your testimony. We understand this dedication to trying to renovate the economy of rural neighborhoods which is a very vital part of our problem today because there is only about 2 percent of our entire population actually producing agricultural products. If it wasn't for the research, and if it wasn't for these communities, they wouldn't be there at all. It's a tough proposition. But we also want to get into the trade business. I think you've touched on each and every one of these elements. That research is very vital to us and the input. Full funding, we may have a tough time with that because the money is scarce this time. But we do appreciate your presentation and the research that you're doing. Keep us abreast of it and we'll try to get the money to you for the research effort. That's our job. Mr. Skees. Okay. Mr. Skeen. Thank you, sir. Mr. Skees. Thank you. Mr. Skeen. And we're not ignoring Mr. Bonilla, but he said I'm doing such a good job of questioning all of you, that he won't. Mr. Bonilla. I'm just learning something every minute, Mr. Chairman. Mr. Skeen. Okay. Margaret Maizel. Did I pronounce it correctly? Ms. Maizel. You did. ---------- Tuesday, March 18, 1997. NATIONAL CENTER FOR RESOURCE INNOVATIONS WITNESS MARGARET L. STEWART MAIZEL, PRINCIPAL INVESTIGATOR Mr. Skeen. Welcome. Ms. Maizel. Thank you very much, Mr. Chairman. Mr. Skeen. We'll put the entire text of your presentation in the record, and if you'll summarize it, well, we'd appreciate that. Ms. Maizel. Thank you. I'll do that. I thank you for the opportunity to testify today. I'm Margaret Maizel. I'm the Principal Investigator of the National Center For Resource Innovations, and one of its founders. One of the founding Board Members is here, Norm Berg. I notice also today NCRI is a national private not for profit consortium established by funding through the CSRS in 1990 through the USDA. Our mission is to build geographic information systems for public and private policy development and decision making in primarily rural areas. We have six sites nationally. Most of our projects are outlined in written testimony, but I'll just highlight some here. Mr. Skeen. Thank you. Ms. Maizel. At the University of Arkansas, they've been concentrating on training and outreach to local governments. Recently, they tracked the tornado that passed the state. And as it went, they reported to the Governor's Office on damage to rural areas. The South Georgia Regional Development Center has been supporting local governments on the Florida border on assessment and taxation issues. At the University of North Dakota at the Regional Weather Information Center, they've been providing weather to farmers on their PCs in near real time format for precision farming applications. At Central Washington University and the Yakama Valley GAS analysis have been helping local governments deal with water supply, irrigation, old growth forests, bird populations, and soils. At the University of Wisconsin, they've been concentrating on satellite down links to educate local governments nationally about land information systems. NCRI Chesapeake, my program, is the one, of course, I am most proud of, of course. And one of the most interesting things we've been doing, Mr. Chairman, is recently we've been using private sector commercial target marketing techniques to understand socially, economically, environmentally, and from a farm perspective farming communities at a sub-county level. We think now we can understand why farmers adopt conservation practices; where farmers may, if they were properly approached. This has been done in a study area in Southeastern Pennsylvania and in two counties in Maryland. The idea is that we might be able to bring private sector techniques to USDA to help them implement conservation targeting to farmers pursuant to provisions in the Farm Bill and EQUIP. Most recently, we worked with the Washington Post in looking at future land use in the Washington region. And you're going to see us on Sunday's Post in the two-page spread. We're going to put things up on the net so that people can understand their neighborhoods and what's in store for them in the larger Washington area. Last, but not least, Mr. Chairman, the University of New Mexico has been a future site with NCRI for two years. This year, they are proposing to bring the Southwestern Indian Polytechnic Institute into our Consortium, and take advantage of the technology we have at NCRI, and to help us all work with Tribal Councils; more than 500 of them in the U.S. and nationally. By integrating at NCRI, we've been doing for seven years with OMB and Congress has decided it is important to do as prescribed in the Fund For Rural America. And, Mr. Chairman, we have consistently, every year, asked for $1.8 million in funding. To meet our objectives, we have either had to cut programs or find matching funds, which we've done rather well. Our matching funds have been equivalent to our federal funds. And in fact, last year when you asked us to do a cost benefit study, we were able to show that for every federal dollar spent, $7.40 in benefit was realized for our customers. For this year, Mr. Chairman, we are requesting the committee to restore our basic budget to $1.2 million from the $844,000 that we're operating on now. And we'd like to ask you to consider bringing New Mexico into our collaboration with some way to find funding for them in a level of $100,000. This will facilitate some significant existing funding that has been implemented by the private sector at Sippi in hardware and computer technologies. I'd like to thank you again, Mr. Chairman. You've been always so kind to us to give us time to testify. I'd be very happy to respond to any questions. [The prepared statement of Ms. Maizel follows:] [Pages 591 - 600--The official Committee record contains additional material here.] Mr. Skeen. Thank you very much, Margaret, and I appreciate including Sippi. That's been a hard piece of territory. Ms. Maizel. Yes. Mr. Skeen. The money is the most difficult part of this whole thing. You understand that too. Ms. Maizel. Yes. I do. Yes. I do. Mr. Skeen. The Lord giveth and then Congress taketh away. Ms. Maizel. Yes. And restoreth; and restoreth. Mr. Skeen. So, let's continue working with the Lord, and maybe Congress will be able to get---- Ms. Maizel. It's good to see good things happen. Mr. Skeen. We appreciate your support and your testimony. Thank you very much for your presentation. Ms. Maizel. Thank you so much. Mr. Skeen. We'll give it every consideration. Ms. Maizel. Thank you. Mr. Skeen. Gary Taylor with the International Association of Fish and Wildlife Agencies. Welcome, Gary. ---------- Tuesday, March 18, 1997. INTERNATIONAL ASSOCIATION OF FISH AND WILDLIFE AGENCIES WITNESSES R. MAX PETERSON, EXECUTIVE VICE PRESIDENT GARY TAYLOR, LEGISLATIVE DIRECTOR Mr. Taylor. Mr. Chairman, thank you for the opportunity to appear before you today to share the prospectus of the fifty State Fish and Wildlife Agencies on the fiscal year 1998 budget request for several agencies of the Department of Agriculture. Mr. Peterson was unavoidably detained at a meeting across town and does send his regrets. I am Gary Taylor. I'm the Legislative Director for the Association. Mr. Chairman, we have some vital conservation programs under the U.S. Department of Agriculture that meet both the objectives of agricultural landowners and conservation of the natural resources our country is so abundantly blessed with. We recognize that the cooperation and support of the agricultural community is absolutely vital in maintaining fish and wildlife populations because, as you are well-aware, much of this resource is found on private agricultural lands. We believe that programs in the Department of Agriculture that facilitate and support partnerships between agricultural landowners and producers, and the natural resource agencies to meet objectives for both commodity production and natural resource vitality should be given the highest funding priority. These partnerships are vital in meeting both of our objectives. We further believe that most agricultural landowners, the vast majority of them want to be good stewards of the land and its natural resources. And we believe that with technical assistance, education, and various incentives from the federal and state natural agencies, our country's objectives for agriculture and conservation can be most effectively achieved. Now, you have my full statement, Mr. Chairman, of our budget recommendation. So, I'll just give a couple of highlights. First, we applaud Congress for passing the most environmentally sensitive Farm Bill ever in the form of the 1996 Federal Agriculture Improvement and Reform Act. The Natural Resource Conservation service, as you know, has immense responsibilities for implementing the conservation provisions of this and its predecessor Farm Bills. And I would respectfully call your attention to the specific budget recommendations in our statement relative to funding technical assistance, funds for the Wetlands Reserve Program, the Wildlife Habitat Incentive Program, and other provisions. Similarly, we strongly advocate that the Farm Service Agency budget include sufficient funding to facilitate a very active conservation reserve program sign-up. Under the APHIS Animal Damage Control budget, we recognize that wildlife is sometimes in conflict with agricultural commodity production for grain, livestock, or other products. ADC has taken the lead in developing alternative wildlife control methods to address wildlife damage situations. We urge your favorable consideration of adequate funding for the animal damage control unit to address society's interest in having wildlife damage problems redressed in the most effective, efficient, and humane manner. And would specifically ask that the subcommittee add $350,000 in the Methods Development Program at ADC's Fort Collins National Wildlife Research Center to work with our state Fish and Wildlife Agencies to support trap research and humane trap development efforts. We think this is a vital program that needs just a little bit of money to help continue that partnership and to solve some of those problems, Mr. Chairman. Finally, the programs of the Cooperative State Research, Education, and Extension Service are vital in facilitating natural resource public education on such issues as wetlands, and urban and community forestry. We would respectfully direct your attention to our specific recommendations for these programs in our full statement. Thank you, Mr. Chairman. I'd be happy to respond to any questions you might have. [The prepared statements of R. Max Peterson and Gary Taylor follow:] [Pages 603 - 612--The official Committee record contains additional material here.] Mr. Skeen. Thank you for your presentation. I think what you are getting to that interest me the most is the people who are in agricultural production today are probably the best conservators and conservation oriented people I know of because their livelihood depends on how well they protect the land. I don't understand the idea we've grown into today that anybody who harvests anything or takes a natural resource and makes a product out of it is somehow or another working against the best interest of conservation ideas or propagation of soil and the soil base in this country. ABC, Sam Donaldson and I are having a real good time with that prospect this year because it's a great program. But some animal rights people don't get the message at all. They don't understand what goes on in these places. They will stand there and vilify somebody for doing control because they're producing a product over there, but have natural enemies, as you've pointed out. The most humane way to handle them is the ADC system that we've generated here in this country. I'm not excusing it or making excuses or trying to defend anything. But I just think it is tragic that a lot of people shoot their mouths off before they get their head in gear. That's going on in a lot of places throughout this country. Thank you for your testimony. Mr. Taylor. Thank you, Mr. Chairman. We concur with your perspectives. We think the wildlife professionals can help solve these problems and appreciate your assistance in that. Mr. Skeen. Well, thank you very much. When it comes to sheep and coyotes over there, sheep pay taxes and coyotes don't. When this world burns to a cinder, there will be one species that survives, coyote. Mr. Taylor. Thank you, Mr. Chairman. Mr. Skeen. Harlan James and Billy Frank. I understand they want to come up together; the Lummi Indian Business Council and Northwest Indian Fisheries Commission. I think you have something very much in common. So, welcome both of you. You know the process. We'll take your full dissertation of your full written text and it will be in the record. If you will highlight it and then we'll visit with you a little. Mr. James. Thank you. Mr. Skeen. Go ahead. ---------- Tuesday, March 18, 1997. LUMMI INDIAN BUSINESS COUNCIL NORTHWEST INDIAN FISHERIES COMMISSION WITNESSES HARLAN JAMES, LUMMI INDIAN BUSINESS COUNCIL BOB WHITENER, NORTHWEST INDIAN FISHERIES COMMISSION Mr. James. My name is Harlan James. I'm testifying for Merle Jefferson, Director of Lummi Nation Department of Natural Resources. Mr. Chairman and Members of the subcommittee, I want to thank you for the opportunity to testify. I'm asking for $385,000 from the Department of Agriculture funds, Rural Business and Enterprise Grants for each of the three years, 1998, 1999, and 2000 to complete the second phase of the Northwest Tribal Clam and Oyster Project. This project is supported by Tribes in the Pacific Northwest, Washington State Departments of Health and Fisheries, and private commercial shellfish industry. Beginning in fiscal year 1994, this subcommittee directed the Department of Agriculture to renovate and begin to operate a shellfish hatchery on the Lummi Indian Reservation. The Department of Agriculture has provided the grants as directed. And the hatchery has successfully distributed nearly four billion shellfish larvae to the Northwest Tribes which has produced 50,000 bags of oyster seed with a value of $2 million. This effort has brought the Tribes closer to self- sustaining projects that will help meet increasing world seafood demands. Our request is for the second phase of the Northwest Clam and Oyster Project. This phase has two primary components. The first component is the remote setting of seed. Oyster larvae raised at the Lummi Hatchery is the first step of the production. The oyster larvae that is produced is then put into large tanks where they are combined with large volumes of cultch. In the case of oysters, use oyster shell. Manila clams, after setting, need room to grow to a large enough size to gain the survivability necessary for commercial viability. This is best accomplished at juvenile rearing sites near the growout area. We are proposing that four regional sites be developed for the setting and growout of seeds. This would increase both production and efficiency. The estimated cost for this one-time capital expense is $175,000 to construct the facilities. In the written testimony, the operating expense for this project is identified by year. The second component is for additional species capability. In phase one, the hatchery focused on Manila clams and Pacific oyster production. In Phase II, we proposed to add the capability to produce additional oyster species, mussels and geoduck claims. Mussel production in the State of Washington will exceed one million pounds in 1997 and is expected to double in 1998. Hatchery seed is in need for this expansion. Geoduck clam is an emerging industry that needs seed for development. This animal presently brings $7.50 per pound live weight. A market size claim of 1.5 to 3 pounds is produced in three to five years. Also, sub-tidal populations are inadequate to meet market demands. Mr. Chairman, in conclusion, the first phase of this project has been very successful. Tribes are rapidly increasing their capacity for growout of oysters and clams using seed from the Lummi Shellfish Hatchery. More than 50 jobs were initially created by this project which will expand to nearly 200 when harvest of these created crops occurs. This is a great opportunity to increase existing production with new low cost regional facilities and additional species. These areas are in rural areas of Washington that fit the federal mandates for rural development and Tribal capacity building. We strongly request your support for language instructing the U.S. Department of Agriculture to continue support of this valuable project. I would like to also add to the record that we have especially appreciated the support of John Bruger and Norrel Andrew on Phase I on the shellfish project. I thank you for your time. [The prepared statement of Mr. Jefferson follows:] [Pages 616 - 619--The official Committee record contains additional material here.] Mr. Skeen. Thank you, Harlan. Billy Frank. Mr. Whitener. Well, this is Bob Whitener standing in for Billy Frank. I'm a Member of the Squakson Island Tribe. I've stood in for Billy the last three years. I think maybe next year I'll ask him to put my name on the testimony. Mr. Skeen. Well, we want to give you full credit. Mr. Whitener. Thanks, I need that. Mr. Skeen. I'll tell Billy you did a good job. Mr. Whitener. I appreciate that. That's my boss. Well, we have two things to add to this. We obviously are here supporting the Lummi Project because it benefits all the Tribes in the Northwest, not just the Lummi Tribe which is one key feature to that project. The other two are similar to what speaker Forest talked about in terms of the problems between the natural resource managers and the issues facing us in Washington. We'd like to consider earmarking some of the NRCS funds, the Natural Resources Conservation Service, to be used by Tribes to help in watershed analysis and monitoring services in the Northwest. We are deeply concerned about Pacific salmon and the ESA listings that we have in Washington State. The Tribes there as co-managers have been involved in a number of different agreements to prevent some of the major blow-ups that we see can happen with ESA. We especially see this conflictstarting to move into water and in the agricultural community. We've proposed a couple of different things to try to prevent that from destablizing both the fisheries and the agricultural community by coming up with processes that deal primarily with watershed restoration stewardship. One of those is like The Sake of the Salmon where watershed coalitions and communities have been established all the way from California, Oregon, and Washington. That's why we support The Sake of the Salmon from NRCS. We support the funding for NRCS. We'd like you to consider possibly and earmark for the Tribal role in that NRCS. Generally, that is my testimony. Thank you. [The prepared statement of Billy Frank follows:] [Pages 621 - 632--The official Committee record contains additional material here.] Mr. Skeen. Would you give the Reporter your name? We want to be sure we give the credit to the right place, since you're going to have your name on the document here next year. We appreciate very much your support for these programs. That aquaculture project with the Tribe has been imminently successful. There is no question about it. I think it has great commercial value to you as a tribal enterprise. We appreciate you folks making it work. You've spent the money, I think, very wisely in the way that you've handled that project. I know with my experience over the years, it's improved every year. Thank you for your testimony. I appreciate your being here. Next up is Norman Berg, Soil and Water Conservation Society. Welcome, Mr. Berg. Glad to have you here. ---------- Tuesday, March 18, 1997. SOIL AND WATER CONSERVATION SOCIETY WITNESS NORMAN A. BERG, WASHINGTON, D.C. REPRESENTATIVE Mr. Berg. Thank you, Mr. Chairman. This is the 36th year that I've had the privilege of testifying before this subcommittee. Mr. Skeen. See there. There is a good argument against term limitations. Mr. Berg. It was first as a long-term USDA career Conservationist. Then I've been a private citizen for the last 14 years. Our Society really appreciates the time that you give us each year. And we'd be pleased to have our full statement put in the record. Mr. Skeen. It will be done. Mr. Berg. I also, just today, received a letter from a Chapter in North Dakota concerned about the possible closure of the Agricultural Research Service, the Northern Great Plains Research Lab. I'd like to have that made a part of the record. Mr. Skeen. Thank you. It will be done. Mr. Berg. Our thanks to you again is in support of several USDA Agencies that are responsible for soil, water, and watershed conservation activities, including research, extension, financing, and technical assistance. And the clients that these agencies serve include producers, not only of food and fiber, but many, many others. Each year that I've been coming up here I've noted a new challenge or challenges for your committee. One for this coming fiscal year will undoubtedly be what will be the long-term impact of the new Farm Bill. Until we know more about the implementation of the several conservation provisions, our budget recommendations for fiscal year 1998 are indeed modest. For most items, we support the Administration's proposal. As you know, the Federal Government proposes to suspend nearly $1.7 trillion in this next fiscal year. The non-defense discretionary portion of the budget has shrunk from 23 percent in 1966 to an estimated 17 percent in 1998. Of the $60.3 billion proposed for USDA, only $15-plus billion is now discretionary. This obviously, is another challenge for your committee. We supported funding for several of the recent Farm Bill's conservation provisions as non-discretionary. The most costly will be the Conservation Reserve Program with the 15th bid process now open until the end of the month. Our Society supports that the new contracts for CRP be for the most environmentally sensitive soils and return to crop production those lands that should not continue in the CRP. A recent document released by Paul Johnson and his staff, America's Private Land, the Geography of Hope, has an excellent update on the state of the land. There is a report of good progress in this area, but they also cite a variety of soil and water conservation problems that still seek solution. Private land in our country constitutes the single largest part of our landscape. Farmers, ranchers, and foresters produce food and fiber that's the envy of the world. But the owners and operators of well managed soil and water resources also produce clean water, clean air, wildlife habitat, and a pleasing landscape, all increasingly valued by our rural and urban citizens alike. However, with federal spending each year for protecting and managing public land runs about $10 per acre, contrasted with less than $2 per acre for private land. USDA would spend $4.8 billion in 1996 dollars to share the cost of conservation today if we were to match the spending of 1937. Instead, projecting conservation funding for private land each year for the seven years will be about $2.2 billion, less than half the commitment of 60 years ago. There are two pages from NRCS' budget document, this one here, that show the trends over the last ten years in today's dollars of the downward movement in terms of staffing and for appropriations. In the three minutes suggested for each witness, I'll finish by highlighting three issues quickly. First, given FAIR and the outlook for market prices, USDA is forecasting more land use for crops, with more intensive use of the soils. With appropriate assistance, farmers can do this without returning to the 1970 mentality of planting fence-row-to-fence- row. The sod-buster and compliance requirements will help guide decisions. However, conditions make it important that NRCS' technical field work force be maintained. These new programs in the Farm Bill, including the non- federal programs, will work with the 1.7 million producers with highly erodible land, should assist with the maintenance of conservation compliance plans in an adequate manner. However, the workload of the agencies, including conservation districts, will be heavy, even under the more farmer-friendly rules of the new Farm Bill. Second, the new provisions of the Farm Bill, Conservation Reserve, Environmental Quality, Wildlife Habitat Incentive, et cetera, now funded through the CCC, still leaves an unanswered question regarding the technical assistance that's in doubt. Will it require legislation to clarify this issue? I just don't know. We support the newly enacted Grazing Land Initiative from the bill. And we're really pleased that the committee led by including a $10 million item during this fiscal year. I think Chief Paul Johnson will, when he is here testifying will, point out that Fee Busby has been brought in. He is one of the top grazing lands people in the country. Third, the Farm Bill's provisions to requirements easements to help non-federal programs strengthen their programs to retain prime and unique agricultural lands for farm use long- term has proven to be very popular. The fiscal year 1998 budget would use the remaining amount authorized by FAIR. Finally, over the past years, as you know the Department has reorganized and downsized. The Agency that I served for 40 years, SCS, has even been renamed. We hope that USDA will continue to be able to deliver the most cost effective services to their clients. However, the proposed study of an NRCS, FSA possible merger in our view is a waste of taxpayers' money. We would also suggest that we need to monitor the authority that's been given to the President in terms of the line item veto. We're not at all sure how that will work. And we need to understand more as to what that may mean in the future. We appreciate the time that you give us. And thanks for the early action last year on this year's fiscal year appropriation. [The prepared statement of Mr. Berg follows:] [Pages 636 - 644--The official Committee record contains additional material here.] Mr. Skeen. We thank you Norm. I think you're heading in the right direction because we used to have the technical help out in the field. We did away with it for so many years and reduced the technical help we had. I think we're going back down to the old system that worked as well. I think it's a step forward. I have no further questions. Does anybody? Mr. Kingston? Mr. Kingston. No. The only thing I wanted to mention, Mr. Chairman, to Mr. Berg is that we don't know the impact of the line item veto either. Mr. Skeen. No. Mr. Kingston. But we do know that agriculture and agricultural products are easy targets because people can laugh at them and think that it doesn't affect them. And the President has already released somewhat of a potential list of a lot of agricultural research projects. Mr. Berg. Mr. Kingston, that's why we're concerned that our urban base population in this country understand that farmers, ranchers, and foresters in this country under private lands, produce much more than food and fiber. They produce our wildlife habitat, clean water, et cetera, that's so valued by the urban citizens. Mr. Skeen. Good point. Thank you, sir. Mr. Berg. Thank you, Mr. Chairman. Mr. Skeen. John Pierre Menvielle. ---------- Tuesday, March 18, 1997. IMPERIAL COUNTY WHITEFLY MANAGEMENT COMMITTEE WITNESS JOHN PIERRE MENVIELLE, CHAIRMAN Mr. Menvielle. Chairman Skeen, how are you, sir? Mr. Skeen. I'm fine. Did I pronounce that name right? Mr. Menvielle. Yes, sir. You certainly did. Mr. Skeen. I don't know whether my French was that good or not. Mr. Menvielle. It's pretty good. Mr. Skeen. Thank you, sir. Mr. Menvielle. Chairman Skeen, today I have with me here to my left, Stephen Birdsall who is the Agriculture Commissioner from Imperial County, and to my right is Tom Vissi who is farmer and present Supervisor of Imperial County. Also, in the audience is Brad Luck, a farmer and former Supervisor of Imperial County. Mr. Skeen. Welcome to all of you. Mr. Menvielle. Thank you. Congressman Hunter was supposed to be here to give testimony with us. But he is tied up in a subcommittee meeting and you have his full testimony. You also have my full testimony. I'm just going to highlight what I'm going to speak to you about today. Mr. Skeen. Well, Duncan is such a good friend. I would suspect that the only reason he wouldn't have been here was for real serious business like going hunting. Mr. Menvielle. He's probably hunting for coyotes. Mr. Kingston. Mr. Chairman, isn't this a project that was cut last year and Duncan came to intervene? Wasn't there something that---- Mr. Skeen. No. I don't think it was cut. Mr. Kingston. No. That was something that was a research thing. Mr. Skeen. Yes; some research project. Mr. Kingston. Okay. Mr. Skeen. Thank you. Proceed at your convenience. Mr. Menvielle. Mr. Chairman, I am John Pierre Menvielle of Clexico, California in Imperial County where I am a third generation farmer with a diversified cropping program and a family farming operation. I am Chairman of the Imperial County Whitefly Management Committee, an organization of producers who rallied together in 1991 to do something about the economic disaster caused by an overwhelming invasion of whitefly that destroyed our crops and greatly impacted farm income and the whole economy of our county. Farmers assess themselves a fee and raise a significant amount of capital to go with contributions from allied industries. Imperial County supports the University of California--assistance from the California Department of Food and Agriculture, and the USDA with the support of this committee. This effort continues to be a fine example of how the private community can pool its resources with the county, state, university, and federal resources to tackle a significant problem. We continue to be a victim of this defiant pest that is spreading in other areas of the United States and California. The Whitefly is now showing up with increased frequency, and density, in other farming regions such as the San Joaquine Valley. It has infested greenhouses and fields in 36 of California's 52 counties, causing sizeable, economic damage in at least half of them. We know much more about the Whitefly than in 1991 when it devoured 98 percent of our fall mellon crop and much of the early winter vegetable production. It continues to inflict major damage, but thanks to the five-year national research and action plan supported by the various elements I just mentioned, we are learning to farm much differently; with fewer pesticides and more IPM orientation, and there is a vision of hope for relief from this pest. A new action plan commencing with fiscal year 1998 is focused on continued research, methods development, education, and extension that with technology transfer as a primary objective. Priority research and action areas have been revised to reflect our current knowledge of the Whitefly problem. We hope to expand participation from foreign countries, as well as the U.S. annual reviews have been effective for information exchange, analysts, and identification of research needs and will continue to be a vital part of the new plan. Although my time is limited, I must explain about our cooperative efforts and the technology transfer and biological control. The search for exotic beneficial insect species has been very intense, thanks to the efforts of ARS in cooperation with its European biological control lab in Montpelier, France. Candidate species have been quarantined at and distributed from the APHIS-PPQ Mission, Texas Biological Control Quarantine facility. Continue foreign exploration may increase the number of unique species available for evaluation. Based on three years' work by APHIS-PPQ researchers using a small half-acre plots, we are now willing to commit to an extremely large scale project utilizing the most effective parasites found today. This project will likely tax our manpower and research resources. Coordination of activities, communication with participants and various agencies will be extremely critical. The need for an effective biological control program is paramount. Chemicals provide only a short-term answer. We know that the--concept of the new Food Quality Protection Act is going to eventually rule out many of the chemicals being used today. We need to have increased participation by APHIS in this effort. We cannot understand why APHIS' interest in this program is not as vibrant as that of ARS. If we could get APHIS' annual funding in this program up to the $5 million level, together with around $6 million for ARS, you should see significant breakthroughs in biological control and much more rapid IPM involvement. This year, in an effort to help the USDA meet last year's budget reduction mandates, the transfer of USDA, ARS, Brawley Research Station to the County of Imperial will be concluded. The County plans to lease these facilities to the Imperial Valley Conservation Research Center Committee to maintain the necessary research which is relevant to desert agriculture. Although the Brawley Station is being conveyed to the County, we need to continue to have a critical mass of research such as only the USDA, ARS, and APHIS can provide. This station is where much of the local Whitefly research is being done. Therefore, every effort should be made to utilize this research facility. We invite other Whitefly infected areas to let us perform research for them. And we hope that you will encourage the ARS and APHIS to contract with the Brawley Station for as much of their research as possible. Mr. Chairman, thank you for your support this committee has given to the Whitefly Research and Control Program. We are very hopeful that you will continue your support. We invite each of you to come to the Imperial Valley and see how we are putting federal, state, county, university, and growers' dollars into an action to control one of this century's most damaging and defiant agricultural pests. I will be happy to answer any questions that you have. [The prepared statements of Mr. Menvielle and Congressman Duncan Hunter follow:] [Pages 648 - 657--The official Committee record contains additional material here.] Mr. Skeen. Well, John, it seems to me like we met when Tim and I toured out at Brawley. They moved a part of your research from the Brawley Station to the Imperial Valley? Mr. Menvielle. Well, while research is going on there, and Stephen Birdsall will explain to you what's going on. Mr. Skeen. Yes. Tell me what's going on. Tell me what the spin-off was because I really appreciate the work that you're doing on Whitefly. We had a very impressive, afternoon on that visit at the station. Mr. Birdsall. Mr. Chairman, Stephen Birdsall. Essentially what happened is that ARS has conveyed the facility, the Brawley Research Station; two account errors in that process have gone through that. Mr. Skeen. Well, it's a transition to the County. Mr. Birdsall. It's in that process. We expect it will be transitioned by the end of this fiscal year. The County, in turn, is going to continue the research. Mr. Skeen. Of the Whitefly? Mr. Birdsall. Well, the Whitefly along with other research there also. But what we're asking particularly in this instance is that ARS, their continued Whitefly research, whatever Whitefly research that can be done, we continue it at the Brawley Station, either via contract, or cooperative agreement, or whatever. Mr. Skeen. I appreciate that. I appreciate that the work is still going on because I was very impressed with the effectiveness of it. That's been replicated in other kinds of pest orientation. I figure you've got a good point about ARS and APHIS. There ought to be some accommodation made. There isn't any question about it. You know, we don't realize this in most parts of the country that you're able to produce agricultural products year around. There are only three areas in the United States like that; Florida, South Texas, and the Imperial Valley. I think it's a tremendous resource for this country. Mr. Birdsall. Absolutely. Mr. Skeen. Mr. Kingston. Mr. Kingston. What do you guys know about BT cotton? Are you familiar with that? Mr. Birdsall. Yes, sir. This year the Valley, even though the acreage of cotton is down substantially from an average of five years ago, ten years ago about 70,000 acres to about 45,000. We're embarking on a project now with APHIS in conjunction with the California Department of Food and Agriculture, and several private organizations to try to, we hope, eradicate the pink bollworm by using BT cottons and the whole entire Valley, within the limitations stated by EPA as planted in BT cotton. That in conjunction with fairmones and sterile pink--we hope to start pushing this pink bollworm in the South and East from Imperial County. Mr. Kingston. Would BT cotton stand a Whitefly? Mr. Birdsall. No. They're not resistent to Whitefly. However, since we don't have to spray for the pink bollworm, that increases the chances of whatever natural parasites and predators that do affect or attack Whitefly a better chance of surviving in cotton. Mr. Kingston. And you call cotton that's been attacked by Whitefly sticky cotton? Mr. Birdsall. Yes, sir. That's correct. Sticky cotton is a Whitefly exudes a sticky substance which will drip onto the lower leaf--and the cotton in itself. It's a sugary substance. It's very sticky on the cotton and on the leaves. If it's heavy enough, there is a sooty black mold that will grow on that sugary substance. That will turn your cotton then black if it's serious enough in infestation and also make the limb sticky. Mr. Kingston. The pesticide that works best against Whitefly; what kind of form is it in? Mr. Birdsall. Well, it depends upon the crop. Cotton, particularly, the two best pesticides that are available at this point are some organic phosphate that you can normally put on by ground or by air. We have, however, asked the EPA to grant us a special registration for two insect growth regulators which have been extremely successful in Arizona. One application in some cases will take care of the Whitefly population all season long. It's a very, very soft pesticide, very non-toxic. Mr. Kingston. Thank you, Mr. Chairman. Mr. Skeen. Thank you all. I came home from that trip with a little souvenir. And that was I caught my finger in the door of that old repair station. You had those metal doors. It left an imprint on me for about a year. It reminded me of all of the good work that you do out there. We thank you. Mr. Birdsall. It was that special finger also. Mr. Skeen. It was. ---------- Tuesday, March 18, 1997. NATIONAL FAMILY FARM COALITION WITNESS JEAN WYONT, FAMILY FARMER Mr. Skeen. Next we have Jean Wyont. Ms. Wyont. Thank you. I have submitted a written statement. I'd like for you to review some of those issues. Mr. Skeen. We review every one of them. I promise you. Ms. Wyont. Okay. So, I'm going to highlight. I'd like to talk to you today as a family farmer that is a single woman. That is a limited resource as far as it relates to the purpose or my testimony. Is that okay? Mr. Skeen. You're talking to a family farmer sitting here last year. Ms. Wyont. I'm going to get one of your programs in a mediation. Mr. Skeen. Everybody that calls us says, I understand you are a sheep farmer. And I say, no. I haven't planted one here lately. Ms. Wyont. I'm a dairy. Mr. Skeen. Oh, you're dairy. Ms. Wyont. I'm dairy from Wisconsin, even with my Southern accent. Mr. Skeen. Please proceed. We'll take that into consideration. We like that Southern accent. Ms. Wyont. Okay. I also wear another hat though that's important to me. I work as a farm advocate for limited resource minority and small farmers. And with this, I'm going to relate some of the things that are happening with our Agriculture Credit Programs with FSA as we're talking about appropriations. I would like to thank the Civil Rights Action Team for the work they've done. As a person, you know, that feels like when I go to FSA I haven't always been taken seriously because, as a woman, I do want to farm by myself. I really appreciate the effort that they've made in trying to correct the situation. At this point though I want to stress to you that this work will be in vane if Congress doesn't follow through with the implementation of the recommendations. That is a very important factor. And one of the ways implementation can start is with Agriculture Appropriations. It may be very easy for Congress to hold USDA accountable, but the FAIR Act of 1996 took away so many of the tools that USDA could use to help limited resource borrow. Sensible debt restructuring that makes sense to both farmers and taxpayers has been dismantled. Limited resource farmers will fail as it continues to be long waiting lines for FSA direct loans. As a limited resource borrower, we request that for fiscal year 1998 the appropriation level for credit subsidy ensures that there is a minimum of $500 million in direct farm operating loans. And I might point out that this is still a 20 percent cut from 1996 levels. We request that for fiscal year 1998, the appropriation level for credit subsidy ensure that at a minimum there is $80 million for direct farm ownership loans. Without these levels, many of us were being denied access to credit. Perhaps you're thinking and wondering why I have not referred to the Guaranteed Loan Program. I'd like to put it this way as a farmer, if I could to you. As a limited resource borrower, do I have 20 to 30 percent net equity in my farming operation? As a dairy farmer, how many cows do I have to milk on $12 per hundred weight milk, to come up to 10 to 15 percent positive cash flow? It's pretty hard to do for a small farmer. I milk 43 cows. So, I'm average size in the State of Wisconsin. I should also point out as it relates to the Guaranteed Loan Program, if I met those guidelines I would not be a limited resource borrower with the agency. Mr. Skeen. You would not be eligible. Ms. Wyont. I would not be eligible. So, I'm in a catch-22. Also, the Guaranteed Loan Program, we're hearing in the countryside that banks two years ago re-streamlined paperwork or the agency streamlined paperwork. And it was greatly appreciated. Now, with the Debt Collection Act, it's on the other end in the amount of paperwork to collect and the length of time to sometime collect the land loss claim. That's is turning many banks away once again. So, we're going back to where we started from. Minority Outreach is a vital part of implementation of the Civil Rights Action Team Report. It has increased awareness in the countryside of farmers and participation in the USDA programs. And it's done so with a very limited budget. For the first two years of the program it was almost as if Outreach was given a blank check and never signed. That's the way it needs to be thought of. We're requesting that this be funded at the full $10 million level. There is another problem as we think about farmers facing foreclosure and that's on our Indian Reservations. We need to fund the Indian Land Acquisition Restoration Act. This will permit tribes to keep land, and this is within their boundaries. It's not adding to their external boundaries. One important piece of this is on the Crow Reservation, there is approximately two million acres in that Reservation. Five hundred thousand are owned by the Tribe; 700,000 by Native Americans; and the balance of that Reservation are owned by non-Indians. This fund, if it were appropriated, even from the $1 million to $10 million would assure that tribes could keep some of the lands with the farmers that are going to befacing foreclosure. I've got to stress that we've got to take these programs collectively. To say that we're going to cut farm ownership so we can have minority outreach isn't going to work. It doesn't do any good to do outreach if we don't have the program money to put out there. So, I requested, as you look at the Direct Loan Program, as well as Minority Outreach, Mediation Program, that these all be taken collectively. Mr. Chairman, I know in your county you have mediation. There are farmers that have used that program. We're requesting that this be funded at $4.5 million for fiscal year 1998. Twenty-two states currently have this process. And it is a vital important process. If we, as a minority, are limited resource borrowers are to graduate and go to commercial credit, there are direct market programs and technical assistance programs that are out there through USDA that would be beneficial to us. The Farmers Market Nutrition Program helps both low income consumers, as well as farmers direct market. We request that his program be funded at the $12 million level. One last issue that I would like to point out to you is if USDA is really going to be beneficial to us in the countryside, we need to move Farm Service Agency Agriculture Credit Programs back to Rural Economic Development. The way the system is currently working, it is a fragmented system. You have a rural housing loan here. You have your farm loan there. And at no point do the Rural Economic Development Grants tie into the total picture. On behalf of limited resource borrowers across the nation, I urge you to fund these programs at levels that will give us some access to them. All of us, even at these levels will not be eligible. I will be happy to answer any questions you have. Thank you for allowing me here this afternoon. [The prepared statement of Ms. Wyont follows:] [Pages 662 - 666--The official Committee record contains additional material here.] Mr. Skeen. Thank you, Ms. Wyont. To get into one of these so-called agricultural businesses, you say you have 43 cows that you milk. Ms. Wyont. Right. Mr. Skeen. Is that a sustainable number of cattle? Ms. Wyont. Not on $12 milk. Mr. Skeen. Not on $12 milk. Ms. Wyont. Right. Last summer for three straight months, I took my milk check on 42 I was milking at the time, sat down and paid every bill I had, did not have to work off the farm to go to the grocery store, and I had a beginning balance the beginning of the month. Now, I milked Jerseys at that time. I was shipping about $17.80 milk, but it more than met my cost of production. Mr. Skeen. But you're always in that space where you're just barely riding on the rim a little bit. Ms. Wyont. Right. I supplement my farm with non-farm income. Mr. Skeen. Non-farm. Ms. Wyont. Right. Mr. Skeen. That's another tragedy that's happening to us. Ms. Wyont. Right. Mr. Skeen. A lot of so-called farm operations are dual purpose situations because the farm is operated, but it's not their main source of income or it's not their total source of income. Ms. Wyont. Right. And this is the important piece for getting FSA agriculture credit back to Rural Economic Development. Mr. Skeen. Yes. Ms. Wyont. There are a lot of business enterprises that would help me on my farm through that, that are not available through any agriculture credit program, if they could be tied together for family farmers and let me do something at home. Mr. Skeen. Do you use computers? Ms. Wyont. Yes. Mr. Skeen. Are you computerized? Ms. Wyont. I sure am. Mr. Skeen. That's one avenue that I see being exploited. We're a very rural community as well. It's very difficult. Ms. Wyont. My total county population is 10,000 folks. We had one iron ore mine that just finished up and is in a two- year reclamation period. Beyond that, other than a few stores and shops, we have to drive 40 miles to Eclair. And these are family farmers that are in our population, except for our County Seat that's about 29. Mr. Skeen. You are remote family farmers. Ms. Wyont. Right; very remote. Mr. Kingston. Mr. Kingston. Please further explain the Farmers Market Nutrition Program and how it works. Ms. Wyont. Okay. It allows farmers to go directly to a farmers market and a low income person using WIC or Food Stamp have access to that market. It allows the farmer in a sense a value added. It is a value added, while the consumer gets wholesome food and still not paying what she's paying when that produce goes to the middle man. Mr. Kingston. Why can't the farmer go directly to the farmers market? Ms. Wyont. He can. But the importance of this project is the market that it gives the farmer. It's just not like going and pitching a tent on Saturday morning on a parking lot. It is a program that benefits that low income consumer, but it also gives the farmer the backing that he needs to make that market successful. Mr. Kingston. I understand that farmers can go already directly to a farmers market. Is that not the case? Ms. Wyont. That is true. Mr. Kingston. So, they can do that now. Ms. Wyont. They can do that now. Mr. Kingston. So, then there is nothing new in the program with respect to that; correct? Ms. Wyont. We need to develop more markets, okay. We need to develop--for me in Wisconsin, I was paying $1.99 for summer squash. In August when farmers in South Carolina were already plowing under summer squash because they couldn't give them away. So, we need to be able to develop transportation systems or whatever to get these markets so that they are more direct instead of to one small locale. That's the way they're working now. Mr. Kingston. Right now, can a person with Food Stamp or WIC go directly to a farmers market? Ms. Wyont. Until we go on the electronic card, yes. On the electronic card we're going to be in trouble. Mr. Kingston. Why is that? Ms. Wyont. Because we don't have the technical ability to use it. Mr. Kingston. But that will be fairly close. Ms. Wyont. Well, we hope. It's going to take some work to get there, but we hope so. And that's the importance of funding this program so we can get to that point. Mr. Kingston. Thank you. Mr. Skeen. Thank you very much for your testimony. We appreciate you taking the time and the effort to come here. Unless there is anything else for the good of the order, that's all for today. We're adjourned. --------- Wednesday, March 19, 1997. TESTIMONY OF MEMBERS OF CONGRESS WITNESS HON. TONY P. HALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Mr. Skeen. The committee will come to order. Good morning to Congressman Hall and Mr. Bereuter. First up we have Congressman Hall and then Mr. Bereuter. The rules are that you can have all the time you need up to five minutes. For every minute over that we take a million off. Mr. Hall. Mr. Chairman, thank you for the chance to be here. I appreciate your leadership on this most important issue, and certainly Congresswoman Kaptur. I would ask that my written statement be inserted in the record. Mr. Skeen. In total, it will be in the record. Mr. Hall. Thank you. My focus today is on two programs that are in my opinion most important in fulfilling the United States historic amendment to alleviating hunger and malnutrition in our country and overseas. First, the WIC Program and secondly Public Law 480 Food For Peace Program. It is a sad reality, Mr. Chairman, that over 20 million, probably somewhere between 20 and 25 million people in America, including more than one in four of our children, do not consistently have enough to eat, and that 800 million of the world's poor face hunger on a daily basis. Budget cuts have dramatically reduced funding availability for both domestic and international food and nutrition programs. In my opinion, we have a tremendous responsibility and we have limited resources. In this light, my testimony will respectfully urge this subcommittee to consider the following recommendations. One, is to keep the WIC Program on the path to full coverage for all eligible participants by approving the requested fiscal year 1997 supplemental WIC appropriation of $100 million, and provide the requested level of $4.108 billion fiscal year 1998 appropriations for the WIC Program. Two, do not cut Public Law 480 as a means to fund WIC. A $50 million rescission in the Public Law 480 Title I Program is proposed as a partial offset for the much needed $100 million supplemental. Such a cut to Title I would further shrink the already drastically diminished Public Law 480 Program. Three, fully fund the Public Law 480 Title II Program in order to meet the 2.025 million metric ton floor level of commodities established by law for this program. Four, carefully review the use of the Food Security Commodity Reserve to ensure that it meets its priority purpose as an effective and timely back-up to the Public Law 480 Title II Program. Options for replenishment of the reserves should be thoroughly explored with the Administration, with the view to enhancing its viability as an emergency response mechanism over the long run. Mr. Chairman, it's a tremendous responsibility that we have in this Congress in feeding our own people, and certainly helping with the feeding of programs overseas. Those pictures over there on the wall, especially of the storage of grain, I have seen many places all over the world. And I've seen our food save a lot of lives. The tonnage for it continues to go down every year. As we lower our amount, other countries follow suite. They say, if the United States can do it, we can do it too. We've got a lot of crisis going on. A lot of emergency problems in the world today, and they don't seem to let up. So, I hope that we can help in this whole area of WIC with the supplemental and certainly with Public Law 480. Thank you, sir. [The prepared statement of Congressman Hall follows:] [Pages 671 - 680--The official Committee record contains additional material here.] Mr. Skeen. Thank you for your testimony and for your concern because we share that interest with your avidly. We're going to do our very best to keep these programs alive. When you talk about a worldwide hunger, you're talking our kind of language because we're the kind of nation with only 2 percent of our population producing a tremendous amount of agricultural food stuffs. We can almost feed the entire world. I think that attacking hunger worldwide is one way of keeping wars and conflicts down to an absolute minimum because we've had far too many of them. But hunger I think is the mainspring of the whole situation. So, we share your concerns and will do our very best. We appreciate you being here today. Mr. Hall. Thank you. Mr. Skeen. Thank you, sir. Mr. Bereuter. ---------- Wednesday, March 19, 1997. WITNESS HON. DOUG BEREUTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEBRASKA Mr. Bereuter. Chairman Skeen, thank you very much for the opportunity to testify before your committee. If the subcommittee would, I would like to make my entire statement a part of the record. Mr. Skeen. It will be done in its entirety. Mr. Bereuter. Thank you, Mr. Chairman. I could certainly agree and do agree with Mr. Hall and the testimony just given, and in your response to it. I come today listing some of the priority projects for my district, the State and also some in the area of housing that are for the nation as a whole. The highest priority request I have is one that I've made before, Mr. Chairman, to this subcommittee and this subcommittee has assisted in the past. It is dealing with the hazardous waste problem generated by the CCC Grain Storage Programs across many parts of the country, but specifically and especially in the Plain States. I worked with then-Secretary of Agriculture, Clayton Yeutter, to establish a program to deal with the carbon tetrachloride hazardous waste problem we have. This was a fumigant used at our CCC grain bin storage sites in the 1940s through the early 1970s. It's a carcinogen. It's in the water supply of grain bin sites in approximately 268 communities in Kansas. My hometown of Utica which is a town of 700 is plagued by this problem. Help now is beginning to be given to us by USDA, but it's a major problem. USDA has worked out a program for dealing with it, but it takes money. These communities, having had to give us their water supplies, and in my cases all of their wells being contaminated, need the assistance the Federal Government should give as a result of the contamination that the CCC grain bin sites brought to those communities. The funding request divided equally between Kansas and Nebraska is $420,000 for each of the two States. The second program, and a Nebraska specific one, but it involves 12 universities in almost as many States is the Mid- West Advanced Food Manufacturing Alliance. Its purpose is to develop and facilitate the transfer of new food manufacturing and processing technologies. Last year, the Alliance received $423,000 in funding. This year the Members of the Alliance, and I'm conveying it on behalf of them from those States, are requesting $500,000 million to keep up with increasing demand for the program. These programs award competitively based research projects requiring a dollar-for-dollar corporate match. So, a $1 million allocation with the Alliance would generate at least $2 million in research in food processing, packaging, storage, and transportation. I am requesting that the subcommittee increase the Alliance funding to $1 million. I'd ask you to do what you possibly can in that area, Mr. Chairman. Third, I have listed a Drought Mitigation Project for the University of Nebraska. They received $200,000 in fiscal year 1997 for a research project on Drought Mitigation. I've seen their work in plant pathology and plant breeding. It is very impressive today. I think that this kind of program bears benefit, not only for the Great Plains, but also for States like your own. I know that New Mexico is very active in drought related research activities as well. I have other Nebraska specific programs listed. I won't go over them in detail. Some of them are extraordinarily important directly to my farmers; things that relate to disease. Various plants and animals are listed very specifically. I want to save the remainder of my time to discuss two national housing programs. The first is the Section 502 Unsubsidized Loan Guarantee Program. This is for middle and low income people in the 80 to 115 percent median area income. It's based upon a demonstration program that dates from 1991. I'm the author of the legislation with a lot of help and funding from this subcommittee in the past. As a result of this, there are 65,000 families across the country located in the communities of less than 25,000 that now have a home. Either they built on or they purchased an existing home. The default rate is incredibly low. I believe overall it's the best single housing program that exists in the entire Federal Government, and it met a need that was not being met. People who lived in large cities from HUD could receive such loan guarantees. But there was no program until 1991 when we began the demonstration program now available in all 50 States. Secondly, I wanted to mention something that is called the Section 538 Program, a Rural Rental Multi-Family Housing Loan Guarantee Program. This will enable us to build more units of low and middle income housing. But's it's a rental unit; five or more units. We've had a demonstration program underway for some time now. It leverages up greatly because these are loan guarantees. It is I think a partial answer to a very troubled Section 515 Program. But this is a loan guarantee program and not a direct loan program. So, the dollars go a long way. Chairman Skeen, I'll be happy to answer any questions you might have about these housing programs or any of the other projects that I mentioned. [The statement of Congressman Bereuter follows:] [Pages 683 - 686--The official Committee record contains additional material here.] Mr. Skeen. Well, thank you very much, Mr. Bereuter. We certainly agree with you on the priorities that you've outlined; particularly, let's start with hazardous waste. I think it is one of the most ever-present problems we have in the United States today; waste disposal in general, both solid and liquid waste, true waste from manufacturers of atomic weapons and things of that kind. Pharmaceuticals and some of the rest of them have been very difficult. This is a very difficult problem. Also research has a very high priority with this subcommittee as well because with only 2 percent of our population producing food stuffs to feed us all, we depend on the technology to produce that kind of gain. In the housing programs also, we have a very avid interest in them. I'm surprised that you mentioned the Section 538 programs, the rentals? Mr. Bereuter. Yes. Mr. Skeen. That's a loan guarantee program? Mr. Bereuter. That's a loan guarantee program, right. Mr. Skeen. I'm not as familiar with that as I am with Section 502. Mr. Bereuter. It's relatively new. Mr. Chairman, we've been operating with it for less than two years now. But the Section 502 Program is for single family housing and dates back to 1991. Mr. Skeen. It seems to me like you've got the rental program which kind of fits in between the direct and the guaranteed loan situation, but these are rentals. That interests me in agricultural country. Mr. Bereuter. That's correct. Mr. Skeen. Of course, I'm sure that the population could support rental units. Mr. Bereuter. These are for multi-family housing with five or more units in the structure. Mr. Skeen. In one structure. Mr. Bereuter. Right. Mr. Skeen. Thank you very much. Mr. Bereuter. Thank you very much. Mr. Kingston. Mr. Chairman, I wanted to ask one quick question. Mr. Skeen. Oh, I beg your pardon. Mr. Kingston. Mr. Kingston. Mr. Bereuter, do you know why the Administration did not have a budget request for the Section 538 Housing? What was their reason? Mr. Bereuter. USDA will provide a figure saying it was an accident on their part that they did not submit to OMB their support for the program. They'll be relaying it. I tried to have it for today. We did not. The USDA does assure us that they are supportive of the program, but they did not forward that request to OMB. Mr. Kingston. The second question is, you had legislation last year on this. Did your bill pass? I do not remember. Mr. Bereuter. It did not. It would have reauthorized it. We tried at the end of the session to get it reauthorized. It had been a part of a larger housing program which fell to Senate problems. So, again, I have on the first day of this session reauthorized it as a simply straightforward, stand alone bill. It would be for a reauthorization of the Section 538 Program. Mr. Kingston. And it doesn't do anything on Section 515? Mr. Bereuter. No. Mr. Kingston. Okay. Mr. Bereuter. We understand our problems with Section 515, but there is no agreement about how to solve those problems. Mr. Kingston. As I understand it, and I think it's real important for the record here that your bill saves substantially large amounts of money in the way this thing is administered. Is that correct? Mr. Bereuter. It's a Loan Guarantee Program. So, we leverage very highly. Mr. Kingston. Is it 20 cents on the hundred dollars or whatever the number is? Yes, 20 cents per hundred dollars? Mr. Bereuter. That's the estimate. We are estimating a higher default rate than we think would be the case. We believe it would be less than that. But an effort to be conservative on what we're promising, that's the 20 cent figure you have of the default rate of the Section 502 Program which is not directly comparable with single family home ownership versus multi- family units. But we have been much below the projected default rate there. It's been less than 3 percent throughout its history. And it is somewhere at about 2.7 today which is an incredibly low default rate because it filters through the commercial lenders who first look at whether or not the borrower is credit worthy. Mr. Kingston. Are you more optimistic this year? Mr. Bereuter. I am. Actually, Democratic Members of the committees came to me and said, would you move that legislation separately. So, I've gone to Chairman Leach and Chairman Lazio, the subcommittee Chairman and they said, they had no objection to moving it as a separate bill. Mr. Kingston. Thank you. Mr. Skeen. Thank you very much, Doug. Let's have Congressman Frank Pallone. ---------- Wednesday, March 19, 1997. WITNESS HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. Pallone. Thank you, Mr. Chairman. Mr. Skeen. Welcome, sir. Mr. Pallone. Thank you for the opportunity to testify; and my colleague there, Mr. Kingston. I have a complete statement for the record, but I'll just try to summarize it. Mr. Skeen. If you will abstract it, we will appreciate it very much. The entire written testimony will be in the record. Mr. Pallone. Thank you. I usually mention to you when I come before this subcommittee that I don't have any agriculture, per se, in my district. Mr. Skeen. You have folks that eat though, don't you? Mr. Pallone. I have people that eat and Rutgers University, which is the Agricultural Extension Service at Cook College at Rutgers University in my district. So, we're very dependent on some of the projects that relate to research, in particular, around the State and around the country. Basically what I'm requesting is funding for several of these agricultural projects at Cook College at Rutgers University. The first matter which we visited last yearis a request to include $3.5 million in the USDA's Facilities grant program to complete Phase II construction of the Walter E. Foran Plant Science and Biotechnology Complex. This would complete the federal contribution to the project. Phase I has been completed. The testimony details that. But Phase II involves construction of a wing off the existing structure, which originally called for a $10 million federal investment, of which about $7.47 million has been appropriated by Congress since fiscal year 1994. It gets a little complicated because the amount actually received by the University is about $7.24 million and USDA captures a 3 percent administrative allowance. But what I wanted to mention is that last year I had requested this funding and the committee included it in the House bill that we passed. I believe the Senate did the same. When it went to conference, the Agriculture Department provided incorrect information to the Appropriations Conference Committee that resulted in a substantial reduction in the fiscal year 1997 appropriation for this Phase II. I wasn't at the conference, and, unfortunately, no one was there to challenge them. But later they admitted that was not the case and they had given the conference the wrong information. I discussed that with your staff, and, of course, there was nothing we could do about it at that point. Since 1993 when this project was budgeted, construction costs have risen. So, actually the cost of this is a little higher. It now stands at $10.64 million or $3.4 million more than Rutgers has received. So, what I'm requesting is $3.5 million which would provide the 3 percent overhead that goes to USDA, plus the additional funding there that's necessary because of the fact that it's now a year later. Again, I hope that I can work with the committee to make sure that what happened last year doesn't happen again. The Department has assured me they will not be there at the conference this year giving you incorrect information again, but we'll see. Mr. Skeen. It may be incorrect in itself. Mr. Pallone. I don't know. Mr. Skeen. We'll see. Mr. Pallone. I just wanted to call it to your attention. The other thing I've requested is $220,000 for the USDA budget for Rutgers Blueberry and Cranberry Research and Extension at Chatsworth. This matches a similar amount from the State Legislature that they received. Again, this is something the committee included in the appropriations bill last year. I can't stress enough how important blueberries and cranberries are to New Jersey. It still ranks first. We rank first in blueberries and third in cranberries. But a lot of this research relates to activities in States around the country that have expressed support for this--California, Delaware, Louisiana; the list goes on. Those are the only two things that are not included in the President's budget, Mr. Chairman. But I wanted to mention two other things. The third program is what we call the IR-4 Project. This is headquartered at the New Jersey Agricultural Experimental Station. It's a national program to support the registration and re-registration of pest control agents for use on minor crops. Again, it serves all States and all territories. The President has recommended a funding level of $10.7 million, and I'm simply asking the committee to support the President's request. Lastly, I wanted to mention to try to make sure there is adequate funding for the Hatch Act and Smith Lever formula funding for scientific research and outreach. Again, this is very important not only to my State but to a number of States. The National Association of State Universities and Land Grant Colleges, of which Rutgers is a Member Institution, is basically stressing that the Hatch-Lever funding is the single most important component of agricultural research. Again, that's not a specific request, but essentially to support what the President has requested. [The prepared statement of Congressman Pallone follows:] [Pages 691 - 693--The official Committee record contains additional material here.] Mr. Skeen. Frank, what was the information that the Agriculture Department---- Mr. Pallone. They basically told the conference that the full federal funding had been provided for this plant, science and biotechnology complex. So, it was a very minimal amount that was included in the conference bill. I think it was like $.1 million or something, as opposed to the $3.4 million that I needed. Mr. Skeen. I see. Mr. Pallone. But you had included it and I believe the Senate did as well. Mr. Skeen. I think it was in both. Mr. Pallone. Yes. That's why I got very upset. Of course, as soon as I found out I called Agriculture and they came back and said I was right, but we had already passed the bill--it had gone to the Floor. It went to the President and that was it. Mr. Skeen. Thank you. Mr. Kingston. Mr. Kingston. Mr. Chairman, let me ask a question of you. Was that $220,000 a part of the President's potential hit list? Because you may not---- Mr. Pallone. For the blueberries and cranberries? Mr. Kingston. Yes. Mr. Pallone. That is never in the President's budget to my knowledge. Mr. Kingston. But it's ongoing money. That's what it was last year. Mr. Pallone. Oh, it's been going on ever since I've been in Congress. Mr. Kingston. Because hasn't he floated a list of potential research projects that he wants to zap? Mr. Pallone. He has, but that list is just a list of projects they did not ask money for is how it's stated on there. It's very strange. But he's correct. They never have asked for money for this. And they always use that project as, gee, this is a reason you should have line item veto. Mr. Kingston. Is that on that list? Are you aware of that? Mr. Pallone. No. I wasn't. I'm glad you're bringing it to my attention. Mr. Kingston. Because you know this committee catches a lot of grief on agriculture research because it's always the screwworm or some peculiar named insect that makes good reading for Readers Digest articles and so forth. So, you may need to be aware of it. Let me ask you this. The States, Oregon, Michigan, Louisiana and so forth, are those the only ones participating in it? Are they the only ones who are---- Mr. Pallone. No. They're the ones that basically have sent letters to Rutgers saying that they support it and talk about the excellent work. That's why I cited them. Mr. Kingston. You know they do blueberries in Georgia also. Is there a way that we can get the Georgia folks behind it if interested in it? Because they may be looking for---- Mr. Pallone. I'll contact them through you and we'll-- absolutely, sure. Thanks. Mr. Kingston. Okay. Thanks a lot. Mr. Skeen. Mr. Walsh. Mr. Walsh. I have no questions, Mr. Chairman. Mr. Skeen. Thank you very much. Mr. Pallone. Thank you, Mr. Chairman. Mr. Skeen. Mr. Clay Shaw. ---------- Wednesday, March 19, 1997. WITNESS HON. CLAY SHAW, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA Mr. Shaw. Mr. Chairman, I will summarize and ask that my full statement be made a part of the record. Mr. Skeen. Welcome, Mr. Shaw. We appreciate that and we may have some questions for you. Proceed. Mr. Shaw. Thank you very much. We are here to ask that the Appropriations Committee appropriate funds as provided in the President's budget for $4 million for the construction of a quarantine facility in Broward County Florida. We are presently in great danger in the Everglades. The second biggest threat in the Everglades today is the Melaleuca which is spreading at the rate of 52 acres a day. This is a crisis that we are facing. The Melaleuca was imported into the United States back in the 1930s, and it was thought to be an ornamental that came from Australia. Unfortunately, what was thought to be an ornamental which was brought in for lawn decoration as well as for its ability to soak up water has gotten totally out of control and is it ever soaking up water. It soaks up water I think at about four times the rate of a normal plant. It has no natural enemies, and no food value. It doesn't contribute to the food chain whatsoever. As a matter of fact, the paper weight there in front of you with the Melaleuca leaf and one of the beetles itself, down at the lower left-hand corner is the seed pod. The seed itself is about the size of a flea. It really doesn't even contribute anything to the bird population. The Melaleuca grows so thick that man cannot even walk through it. Literally, the trunks of the trees are almost back-to-back. It will grow to large diameters such as a pine tree. However, the number of trees that's in this area is really quite incredible. The only way of eradication now or the favored way of eradication now is actually doing this by hand, which is an incredibly laborious and painstaking process. We have found several insects that are being imported into the United States. The beetle there that's before you is one of them that was a result of the quarantine and testing facility in Gainsville, Florida at the University of Florida. The University of Florida has some land that would be available for this larger quarantine facility in South Florida. It would be much better to have that in South Florida in that when you're doing the research on these exotic types of species, the climate is correct. South Florida, being a tropical climate, with Gainesville being in the Northern part of the State is not considered to be a tropical environment. Therefore, it cannot sustain the life of these trees, and also other types of trees that have to be eradicated. As I said, $4 million was included in the President's budget. I was successful in having the Melaeuca put on the noxious weed list some years ago. And it appears that the best hope we have is this particular insect and other insects which we need to do some research on to be sure that if we let them go, they're not going to attack the grasses or other types of vegetation in South Florida. Thank you, Mr. Chairman. [The prepared statement of Congressman Shaw follows:] [Pages 697 - 699--The official Committee record contains additional material here.] Mr. Skeen. Thank you. Melaleuca, where did it come from originally? Mr. Shaw. Australia. Mr. Skeen. Australia. It is almost as bad as the kudzu problem we had. That was a conservation effort that got out of hand. The kudzu was thought to be a nice cattle feed at one time. And, of course, that grows while you're looking at it. A foot a day. Mr. Shaw. Water hyacinth. It seems that we bring these plants in that you think are kind of pretty, but are creating an entire environmental disaster in many parts of our country. Mr. Skeen. You also were talking about a quarantine facility. Mr. Shaw. Yes, sir. There has already been appropriated and then partially spent $1 million which was for the design and partial construction of the facility. What we're looking for now is $4 million so we can complete it. Again, I want to impress on the committee the urgency of this. We have this thing spreading at 52 acres a day, and this is into the Everglades National Park, which is a federal park. If we don't address this issue very rapidly, we could have the first national park that would be found ecologically dead at an early date. Mr. Skeen. We've also taken a very avid interest in and have done some inspection work on citrus canker and also the relocation of the new citrus lab. Mr. Shaw. Yes, sir. Mr. Skeen. You're a very prominent agricultural producing state over there. But also it invites all kinds of pests. Mr. Shaw. Yes, sir. Mr. Skeen. Melaleuca is the coyote of Florida. Mr. Walsh. Mr. Walsh. No questions, Mr. Chairman. Mr. Shaw. Well, I'll put you down as a friend of the Everglades. Mr. Walsh. Thank you. Mr. Skeen. Mr. Kingston. Mr. Kingston. Mr. Shaw, how is it controlled in Australia? Mr. Shaw. Well, they have these natural pests in Australia. Also Australia is a different climate. The Melaleuca is also in California and it creates no problem in their particular environment. Where it creates a horrible problem is when it gets into the wetlands such as tropical wetlands like Florida. It's a unique looking tree. You may have seen it on some of the trips to Florida. It has a trunk that looks like paper. In fact, when I was a kid we used to call it the paper tree. They used to plant them, actually, beside the front doors of houses because it gives off an odor that is thought to actually repel flies, mosquitos and other insects that would otherwise get into the house. But it's totally gotten out of control. Once it got into the Everglades, then we had some big, big problems. Mr. Kingston. I know they harvest it commercially for agriculture and I think all kinds of Melaleuca products come from it; soap and stuff like that in Australia. Mr. Shaw. It might. I was trying to promote the use of it as mulch or something down there in order to try to harvest it. It was thought at one time to have a value as lumber. However, it doesn't. It grows so fast and it's so soft that it cannot make a decent board either. Mr. Kingston. Have you ever tried to kill bamboo? Mr. Shaw. Yes. Mr. Kingston. Is it as hard to kill as bamboo? Mr. Shaw. Well, bamboo will come back from the sprouts. With this actually when you burn Melaleuca it will come back with a vengeance because the seed pods explode and throw those little seeds like dust on the ground. Then I'll tell you, when you look at the Melaleuca coming back it looks like hairs on a dogs back. It comes back so thick and with such a vengeance. This plant really fights back. Mr. Kingston. May I ask you one other question on your bug. The love bugs that you guys have in Florida are coming up I-95. What did the love bug go to Florida for originally? Mr. Shaw. I don't know. It's up mainly around the Orlando area. It really hasn't made its way into South Florida. The love bug itself, other than its unique characteristic of flying United with its mate, is a bigger problem than it is for automobiles and the mess it makes on your windshield. Mr. Kingston. It was an issue that birds won't eat it. Mr. Shaw. They won't? Mr. Kingston. No, no. I don't think there is any--they just taste bad. Mr. Shaw. See, you've got to be careful bringing in insects--I mean we could end up bringing in another problem. That's why when we import an insect, we want to be sure that it's exposed to just about everything you can possibly think of. Mr. Kingston. That's why this research money is so important because you could---- Mr. Shaw. You can't just go and let these beetles go without knowing exactly what they're going to eat. Mr. Kingston. Thank you. Thank you, Mr. Chairman. Mr. Skeen. We thank you, sir. Ms. Emerson. Welcome, Jo Ann. ---------- Wednesday, March 19, 1997. WITNESS HON. JO ANN EMERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI Mrs. Emerson. Thank you, Mr. Chairman. I want to thank you for allowing me to come before your subcommittee today on behalf of continued funding for cyst nematode research. I also want to thank you and the other Members of the subcommittee for the funding that you have given to this project in the past. As you know, the Delta Area Agricultural Research Center in Portageville, Missouri has been the premier national facility for extensive research on the soybean cyst nematode. Because of your subcommittee's past support, I know you're aware of the many benefits accruing to soybean farmers as a result of this research. Presently, scientists estimate that nearly 75 percent of the domestic farmland planted to soybeans in a given year is infested with the cyst nematode. According to the University of Missouri research, that figure climbs to nearly 90 percent in Mississippi and Missouri soybean acreage. Nationally, soybean producers lose more than $400 million annually in reduced yields to the soybean nemesis. As these numbers show, this problem goes far beyond Missouri State borders. Scientists in Illinois, Kentucky, Mississippi, Missouri, Nebraska, Iowa and Indiana now view the cyst nematode as one of our soybean growers' worst enemies. As you can see, soybean yields are continuing to decline due to this pest, and that translates into diminished profits; something both farmers and rural communities can ill-afford to lose. There is cause for hope, however, for farmers trying to cope with this profit destroying dilemma. That hope lies in the hands of research capabilities presently available at the Delta Center. Much of the progress that's been made has been the control of and eradication of cyst nematode as a result of the research that has been and is continuing to be conducted at the Delta Center. That progress would not have been possible without the $285,000 that the Delta Center received last year to continue its research program. As you know or perhaps know, funding for cyst nematode research was not included in the Administration's budget request. In fact, the Administration has never requested funding for this program. But fortunately Congress has always transferred funds from other accounts to allow this vital research at the Delta Center to continue. As a result, cyst nematode research has not increased the overall agriculture budget. Mr. Chairman, I can't overstate the importance of this research to soybean farmers across this country. The cyst nematode will threaten hundreds of millions of dollars in yields this year and potentially billions in years to come. Yield losses combined with the spread of this pest prove that additional funding is necessary in order to guarantee both sustained and accelerated progress in the eradication of the cyst nematode. By supporting research at the Delta Center, I think we'll be able to save farmers from financial ruin in the long-run. Thus, save the Federal Government many times what we hope to spend this year. I thank the subcommittee for continuing this request and for providing me the opportunity to testify. [The prepared statement of Congresswoman Emerson follows:] [Pages 703 - 704--The official Committee record contains additional material here.] Mr. Skeen. Well, Jo Ann, I'll tell you right off the top, there is only one request that was ever made by Bill every year, year after year. I can see it right here today; cyst nematode. Mrs. Emerson. Yes. Mr. Skeen. It's in there and it's going to stay in there. Mrs. Emerson. I thank you very much, Mr. Chairman. I appreciate that. Mr. Skeen. We thank you, again, for taking the time. We appreciate it very much. Mr. Walsh. Mr. Walsh. I associate myself with the remarks of the Chairman. Mrs. Emerson. Thank you, Congressman Walsh. Mr. Walsh. Thank you, Mr. Chairman. Mr. Skeen. Thank you very much. Now, Congressman Hilliard. Welcome. ---------- Wednesday, March 19, 1997. WITNESS HON. EARL F. HILLIARD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA Mr. Hilliard. Good morning. Mr. Chairman and Members of the authorizing subcommittee, I thank you for this opportunity to testify before you about some programs that I'm very much concerned with and I very much would like to see them fully funded. These are programs that are very dear to America. They are very important to my Congressional district and very important to those people that I represent. There are many that I would like to talk about, but there are only three, because of time constraints, that I will speak of. The first one is the section 2501 Program. Last year, the President sent a budget and we passed a budget. We authorized it at $10 million, but only $1 million was appropriated. Of course, this program is very important. It provides outreach and technical assistance to socially disadvantaged farmers and ranchers. If we are ever to be able to have a diversified farm economy and to have small farmers, then we need the program fully funded so that it can help those persons who are in the category. Secondly, I'd like to urge this committee to continue to fully fund the Rural Development Programs. Now, those programs affect all Americans. They are the Waste Water Treatment Program, the Safe Drinking Water Program, Tele-Medicine, and Telecommunications. These programs are very much important to the rural areas of this country, not only to the rural areas of my district, but everywhere. And of course, if we are to really develop the rural areas, if we are to keep people there who want to live there, want to farm there, we need to make sure that we have tele-medicine so that they could be afforded the opportunity to thrive and live healthy, and at the same time work, in a part of our country where they are needed and perform a service for those of us who live in the rural areas. The third program that I would like to place a great deal of emphasis on is the program for those people who are unable to fend for themselves. This is the program popularly known as WIC. This is the National School Lunch Program, the Food Stamp Program, and the Women, Infants and Child Program. These programs really help the most vulnerable in our society. These are people that cannot fend for themselves. In most instances, they are not organized. They can't come here and lobby for themselves. But they are those that we must keep from falling through the cracks in our society. The test of any society, of any great country, is how they treat their young and how they treat their elderly. But also how they treat those who are unable to help themselves. If we are to retain the level of living of this country, the standard of living of this country, we must look out for those persons who cannot fend for themselves. Of course, this program helps those people in that category. I would like to thank you for considering my request. I would like to make sure that my remarks that have been submitted be made a part of the record because they are detailed and they set out in specification certain aspects of these programs that probably will be very important to you as you go about making your decision. I will be happy to answer any questions that you may have. [The prepared statement of Congressman Hilliard follows:] [Pages 707 - 708--The official Committee record contains additional material here.] Mr. Skeen. Your full written testimony will be in the record, Congressman. Mr. Hilliard. Thank you very much. Mr. Skeen. We do appreciate your support for the programs that you've mentioned and highlighted because they are absolutely necessary for rural community development, for women and children, and the rest; the nutritional levels for the rest of the country. Those programs are very vital to us. We hope that we can fund them all to the fullest extent. We will do the best we can. Mr. Hilliard. Thank you very much. Mr. Skeen. Mr. Walsh. Mr. Walsh. Thank you, Mr. Chairman. I agree with what the Chairman said. There is strong support for all of these programs. They are very important. We will do the best we can to make sure that they're fully funded. We just have very difficult decisions to make because we have a request for about $1 billion more in discretionary spending than we have money for right now. But some of these programs are going to be fully funded for sure. Mr. Hilliard. I fully appreciate the circumstances that this subcommittee finds itself in. I just hope that you once again consider that these are people who have the least of those in our society. They are the ones who are actually in need of help. Mr. Walsh. We understand. Thank you very much. Mr. Hilliard. Thank you. Mr. Skeen. Thank you, sir. Congressman Frank Lucas from Oklahoma. Welcome. Your entire written statement will be in the record. ---------- Wednesday, March 19, 1997. WITNESS HON. FRANK LUCAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA Mr. Lucas. Thank you. Mr. Skeen. You may go ahead and proceed any way you'd like. Mr. Lucas. If I could also include a written statement from Dr. Sam Curl, the new Dean of Agriculture at Oklahoma State University along with mine, I'd appreciate that, sir. Mr. Skeen. Certainly. Mr. Lucas. I realize, Mr. Chairman and subcommittee that you have a very, rigorous hearing schedule. I will attempt to paraphrase in the briefest of manners. As a Member of the House Agriculture Committee I'm truly cognizant of the budget constraints that you face and that we all face in the coming year. I'm also aware of the importance of cost effective agriculture research and the future that it helps provide for all of agriculture in the great State of Oklahoma and all across this nation. That's why I'm here today, is to visit you with regard for, and very respectfully ask, that you consider the potential of supporting the federal appropriations for a couple of key research projects in the State of Oklahoma and at the Oklahoma State University. One of the most rapidly growing industries in Oklahoma right now is the swine industry. That's why I'm in support of, as you will see in my written statement, efforts that animal waste management in semi-arid as they say agroecosystems. That is one of the most rapidly growing industries in Oklahoma. We are in tremendous need of research to develop ways to deal with the waste problem that's coming up in Oklahoma. That's one of the key points there. Along with that, Mr. Chairman, as always, wheat remains the bedrock of production agriculture in Western Oklahoma. Any resources that might be available to help expand the research that's going on at Marshall, Oklahoma which is now in its seventh year, it's a very diversified effort involving not only the science agronomy, but agriculture economic departments at the Oklahoma State University, would also, I think, be very helpful in Oklahoma and agriculture as a whole in our State. With that, sir, basically those are the two points that I wanted to stress. [The prepared statements of Congressman Lucas and Dr. Sam E. Curl follow:] [Pages 711 - 730--The official Committee record contains additional material here.] Mr. Skeen. Thank you very much. You haven't had any problem with Karnal bunt in your wheat production? Mr. Lucas. We've had some nervousness, but our State Department of Agriculture has moved in a very aggressive fashion to try and make sure---- Mr. Skeen. Head it off. Mr. Lucas. Yes; exactly. Mr. Skeen. Very good. And your research on waste is primarily from hog production? Mr. Lucas. Yes. That's the environment, and our regulatory environment in Oklahoma is very favorable. We have companies coming in and companies being formed in Oklahoma at a rapid clip. These hog operations, swine operations, are showing up all over the State. In Western Oklahoma, in particular, where we have water resources, but there is not that much background about how to deal with the waste factor and the odor is one of those hot discussions among the neighbors. Mr. Skeen. I'm sure that's probably the case. Mr. Walsh. Especially when it's hot. Mr. Lucas. Oh, yes, and the wind does blow in Oklahoma most of the year round. Mr. Walsh. Thank you. Thank you, Mr. Chairman. Mr. Lucas. Thank you. Mr. Skeen. I appreciate your effort. Ray LaHood from Illinois. Congressman, welcome. ---------- Wednesday, March 19, 1997. WITNESS HON. RAY LaHOOD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS Mr. LaHood. Thank you, Mr. Chairman. I will be brief. I have a full statement and I know you will make it a part of the record. Mr. Skeen. It's a part of the record. Mr. LaHood. I appreciate that. Mr. Skeen. We appreciate your being here and abstracting it. Mr. LaHood. Thank you. I want to thank you for allowing me to testify. I wanted to bring you up-to-date a little bit on one of the premiere ARS facilities in the country in Peoria, what we refer to commonly as the Peoria Agriculture Lab. The lab that's the largest of the four ARS utilization centers and the designated lead USDA Technology Transfer Facilities dedicated to the commercialization of research and technology. The Peoria Lab is a shining example of what government can do to provide a growing world with a safe and ample supply of food at a reasonable cost to the taxpayer. Throughout the years, my predecessor, former Congressman Bob Michael and Republic Leader, was instrumental in forwarding the growth of the lab with the Federal Technology Transfer Act. The act enhanced the lab's ability to commercialize new technology which lead to new uses and markets for agriculture commodities. As a result, approximately 25 percent of all technologies licensed by the entire USDA came from the Peoria Lab. Additionally, Mr. Chairman, we are proud of the Biotechnology Research Development Corporation which you're well-aware of and have been very gracious enough to meet with those folks on a number of occasions. We've appreciated your interest in BRDC. It's a direct catalyst of the Peoria Lab and it is instrumental in bringing research conclusions developed at the lab. Over the last fiscal year the lab filled 17 new patent applications on new inventions. One invention is in the process of being licensed for market, a remarkable achievement. Sales interests already exist from numerous food companies. The lab continues to develop new technologies for other government agencies, including FDA, FSIS, EPA, and CDC. Unfortunately, the Clinton Administration is proposing to cut some ongoing research and personnel at the lab. I hope you will look closely at whatever you can to restore the projects that have been on the block to be eliminated and the positions. I know you will look carefully at this and the future of agriculture research is dependent to a large extent on our ability to develop non-food uses of agriculture products. The Peoria Lab is the focal point of such research, and it should be fully staffed and funded to meet these demands. I appreciate again the chance to appear personally, to offer my testimony, and whatever interest you will have in the lab will be greatly appreciated. [The prepared statement of Congressman LaHood follows:] [Pages 733 - 736--The official Committee record contains additional material here.] Mr. Skeen. Thank you very much. We have a very avid interest in all of the research facilities and the activities that go on there because they're not duplicative. In their own right, they are most important, and that's the reason why 2 percent of our population is feeding us and could potentially feed almost the entire world. Mr. LaHood. Amen. Mr. Skeen. We appreciate it. Thank you. Mr. LaHood. Thank you. Mr. Skeen. Mr. Walsh. Mr. Walsh. Nothing to add, Mr. Chairman. Thank you. Mr. Skeen. Thank you. Could we have now the Honorable Richard Doc Hastings from Washington State. Welcome, Doc. ---------- Wednesday, March 19, 1997. WITNESS HON. RICHARD DOC HASTINGS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON Mr. Hastings. Thank you, Mr. Chairman. Mr. Skeen. Your entire written testimony will be in the record. Mr. Hastings. Mr. Chairman, I'm wondering if I could make an addition to that? Mr. Skeen. Certainly. Mr. Hastings. Good. Thank you very much. In my testimony I focus on the Prosser Research Station. The Prosser Research Station, of course, is an agriculture research station, and a number of the commodity groups in my State, of course, match those dollars. But what I want to suggest today is not an increase necessarily in funding, but rather a reallocation of the President's budget on how he submitted the budget to you. I am very much in favor of agriculture research. I don't think anybody would argue with that. But if you look at the President's budget, the biggest area line item that increases in research is in nutrition research. I'm not opposed to nutrition research. But NIH spends ten times as much as USDA on nutrition research and I think that's where the emphasis ought to be. In fact, in the President's budget, his increase is approximately $11 million over last year. I should say $10 million over last year. In nutrition research alone, it's $11 million. In their words, the entire increase is in an area I think that may be duplicative. So I would just suggest to you that you as a committee look at reallocating those funds to basic agriculture research. Because there is a bit of difference on that. You can't stop and start research. We already have another area of the Federal Government where we allocate those funds. So, I would respectively suggest to you that you look at that particular line item and reallocate those funds in different areas. Basic agriculture research, particularly in my area in irrigated crops, is very important. Potatoes, for example, is being attacked now by a new nematode, research is being done specifically at the Prosser on this nematode. You can't stop and start it under the President's request, that is to be moved to a different area that isn't specialized in that particular area. So, I'm just simply saying that if we keep the dollars there in that basic research and shift those dollars away from nutrition research, which to me is duplicative, I think that would make a great deal of sense. With that, I just wanted to make my comments in that very short specific area. [The prepared statement of Congressman Hastings follows:] [Pages 739 - 740--The official Committee record contains additional material here.] Mr. Skeen. Where is the location of that? Mr. Hastings. It's in Prosser, Washington. Mr. Skeen. Prosser, Washington. Yes. We're aware of the fact that the Administration recommended either closing it or moving it. Mr. Hastings. Moving some people away from there. But they do specific research there like I said on potatoes. Mr. Skeen. On nematodes? Mr. Hastings. On nematodes. That would not be available where they're going to shift that. Mr. Skeen. We'll certainly take a very close look at it. Mr. Hastings. Thank you very much. Mr. Skeen. Thank you, Doc. Mr. Walsh. Mr. Walsh. No questions, Mr. Chairman. Mr. Skeen. Mr. Gordon from Tennessee. We've been looking for you. You're right on cue. ---------- Wednesday, March 19, 1997. WITNESS HON. BART GORDON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE Mr. Gordon. Thank you, Mr. Chairman. I thought I was going to be on at 11:00 a.m and someone wanted to go before me. Mr. Skeen. Well, we try to run it just a little bit ahead. Please proceed. Mr. Gordon. Following the Chairman's role of being prompt, I'll try to be prompt here. But first, let me thank you for the time before you. More importantly, I want to thank you for the wisdom that this subcommittee showed last year in providing an appropriation of $2.5 million to my alma mata of Middle Tennessee State University where my father was also an agriculture graduate for an equine education, public service, and research center. Really the excitement that you helped create there has generated a lot of activity. One of the things that has been generated is that through private contributions, we were able to setup a chair of excellence in equine reproductive physiology. We've also been able to generate additional private funds to add onto the lab that you were kind enough to help us put together, for reproductive research. That's the reason that I'm coming before you today is to ask that we are able to expand this research facility to the reproductive area. We have the private funds committed to do our share. We've already put together this special chair of excellence, and I think that it's an appropriate time to do this because we're in the engineering design stage right now. While we're doing that it's going to be much more economical to make this expansion than to have to come back at a later time. The funds as I say are together on the local level. We have checked with the committee, as well as the Department of Agriculture concerning the facilities report. This does fall within the Favorable Facilities Report of 1995. I would suggest this is not a new project, but rather an extension of your wisdom in creating one last year. I hope that you can help us to expand this for this important purpose in the equine industry. [The prepared statement of Congressman Gordon follows:] [Pages 743 - 747--The official Committee record contains additional material here.] Mr. Skeen. We thank you for the interest. We thank you for the compliments that you paid to us. We appreciate that because a lot of times we'd rather have that than what is sometimes sent our way after the allocations are made. Speaking of the Equine Center, I think it probably should be noted that it is probably a premier institution because I don't think there is any duplication almost anywhere in the United States today. Horse breeding I think is a very large practice amongst a lot of these States, particularly in our part of the country for racing, for working, and the rest. I think you've certainly filled a gap that was a big void that was absolutely essential in doing these kinds of studies. An equine business is a very important part of our animal reproduction in the United States. Congratulations on that. Mr. Gordon. Thank you for helping us. In our part of the country, unlike out West, or in the mid-West where you get on the tractor and you just sort of drive for a mile and you turn around, we have smaller farms. That's the reason tobacco and sort of labor crops have been so important. As we move away from those, the horse industry gets even more important because you can use those smaller parcels of land. The breeding is important. It's just important to our area of the country. I hope that some of the research can be taken out to those big ranches and farms out your way too. Mr. Skeen. Well, we were in the quarter horse racing business, but we got out of it real quickly because they were too slow for that and just about right for roping. So, we've maintained that attitude. We had the same experiences. When you look down there in front of you and there is no head on that horse all of a sudden because he is looking up, you know that you're in deep trouble. Thank you very much. Mr. Gordon. Thank you, sir. Mr. Skeen. We appreciate your being here. We'll recess here for a short period. [Recess.] Mr. Skeen. Mr. Meehan. Welcome, sir. Sorry to grab you right off. ---------- Wednesday, March 19, 1997. WITNESS HON. MARTIN MEEHAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS Mr. Meehan. Thank you for giving me this opportunity, Mr. Chairman. Chairman Skeen and Members of the subcommittee, I have submitted written testimony to the committee. I do appreciate this opportunity to testify in support of the FDA's budget request in connection with the agency's final tobacco regulations. As co-Chairman of the Congressional Task Force on Tobacco and Health, whose membership now consists of 73 Members of the House, I'm here to urge you to ensure full and adequate funding of the FDA's rules. At issue here is the support the FDA needs to implement its rules to protect young people against the disease of tobacco related nicotine addiction. The smoking epidemic poses an immediate crisis, one which costs this country $50 billion a year in direct medical costs. The FDA has responded in a measured fashion requesting a budget that translates into an outlay of just $85 for each of the annual 400,000 smoking related deaths; a worthy investment in my view in prevention, if ever there was one. The FDA's rules were carefully crafted based on more than 700,000 public comments. They represent an historic initiative to improve the public health by decreasing the 400,000 preventable deaths caused by tobacco use each year. The number one goal of the new rule is to reduce tobacco use by children and adolescents by 50 percent within seven years. Nothing could be more important to improving the health of our citizens than the prevention of nicotine addiction among our youth. Today, 5.5 million children smoke or use smokeless tobacco in the United States. Most adult smokers began smoking before reaching the age of 18. Most of them attest that they are physically dependent upon nicotine; a phenomenon that we now know is a direct result of the tobacco companies' manipulation of the drug and their products. Nearly one-third of the people who smoke will die prematurely as a result of tobacco related illness. To combat this trend, the first part of the rule sets a national minimum age of 18 for the purchase of tobacco products, and requires that tobacco sellers be shown a valid ID by anyone under the age of 27. Most kids who smoke are sold cigarettes by adult sales clerks. The FDA rules provide the tools to right this ongoing wrong. The FDA's budget request also includes $34 million for the cost of implementing the new rules, primarily through outreach and enforcement activities. More than half of the funds to be provided to State and local officials under contracts that are setup for enforcement. In this sense, the FDA's regulations are a funded mandate. I believe it would be penny-wise and pound-foolish for the Congress not to grant the President's budget request for FDA's new tobacco rules. Most Americans support the FDA's action to protect kids against tobacco. Each day 3,000 children smoke their first cigarette. Many of them will become addicted before they're old enough to make a mature, well-informed decision about whether to use the leading preventable killer in our society. Mr. Chairman, I believe we must slow this trend and hopefully reverse it. If we are to succeed, the FDA must be granted the basic funding request to fully implement its new rules. I think our children deserve it. Thank you, Mr. Chairman for this opportunity to speak before the committee. [The prepared statement of Congressman Meehan follows:] [Pages 750 - 753--The official Committee record contains additional material here.] Mr. Skeen. Well, thank you, Mr. Meehan. This is going to be a very controversial topic and subject. We're going to have to deal with it with some intelligence and discernment. We certainly appreciate your input. Mr. Meehan. I appreciate the opportunity to appear before the committee. Mr. Skeen. Thank you, sir. Mr. Meehan. Thanks, Mr. Chairman. Mr. Skeen. Mr. Walsh. Mr. Walsh. Mr. Chairman, yes. I have a couple of questions I'd like to ask Mr. Meehan. The reason that you feel that the FDA should be regulating tobacco is because of the nicotine in the tobacco which you consider to be a drug. Is that correct? Mr. Meehan. Well, no. That's part of the reason. I mean, basically the reason is because we have 3,000 kids a day who experiment with the product; 1,000 of them become addicted. The tobacco companies have literally spent millions of dollars advertising the product to children. I think that we, as a government, ought to do everything we can to try to protect children from becoming addicted. Now, a part of that is that I believe nicotine is in fact an addictive drug. Mr. Walsh. Right. Mr. Meehan. That is the basis upon which the FDA ought to be able to regulate it in this fashion. Mr. Walsh. So, should the FDA be regulating all drugs? Is that the point? Mr. Meehan. Well, the FDA in this instance would be regulating tobacco because of the nicotine and the fact that the product is a drug in this particular instance. I think it's a balancing test, given the fact that 400,000 people die a year as a result of the product than the weight of the evidence would come down in favor in this case of the FDA regulating it on the basis of the fact that nicotine is an addictive substance. Mr. Walsh. How about alcohol? Mr. Meehan. There is certainly more regulation of alcohol in this country than there are tobacco products. Mr. Walsh. Should the FDA regulate the content of alcohol and alcohol beverages, do you think? Mr. Meehan. I think at this point the regulation of alcohol is adequate in the sense that certainly there are many, many more safeguards and regulations taken seriously by society about having young people drink alcohol. Now, there are going to be controversial hearings and a controversial issue before this Congress on the advertising of alcohol. I draw the line at least with regard to nicotine in the sense that tobacco is the only product if you use it specifically as intended will kill you, which I think distinguishes it from alcohol. But clearly, there will be hearings and this will be a controversial issue with regard to that. Mr. Walsh. There are some parallels obviously. Mr. Meehan. There are. Mr. Walsh. Alcohol kills an awful lot of people too. Mr. Meehan. Right. Mr. Walsh. My other question is, other than this proposal for funding, I mean we hear all of the time about the Federal Government's subsidy of tobacco. There really isn't any except for, as I understand it anyway, crop insurance. Farmers of all sizes, regardless of the crops that they grow, get some support, some subsidy from the government, whether you're a wheat farmer, a grape grower, a tomato farmer, potato farmer, or a tobacco farmer. Is it your position, and you may not want to comment on this because it is different basically than what your testimony is. Is it your position that the Federal Government should not provide crop insurance subsidy or specifically for tobacco farmers as opposed to potato or tomato farmers? Mr. Meehan. Again, I view this as totally a separate issue. But my personal position is that the Federal Government shouldn't provide a subsidy, but rather I think the Federal Government needs to undertake or begin the process of undertaking a plan that would help farmers find other crops. I do think we're going to have to make an attempt to assist tobacco farmers in this country in the event that tobacco use goes down. I think we have a strategy to try to do that. I think there is going to be a need for subsidies and assistance to tobacco growers, but I'm not sure that they should be in the growing of tobacco. Mr. Walsh. Our dilemma is that in many cases these are very small farmers with no other options. I mean they can grow other crops and they do, but if they do grow other crops, then if we remove the crop insurance subsidy, they have to reapply and go through the paperwork if they go from corn to beans to tobacco. Sometimes it's a dilemma. But we're trying to help American agriculture here. We're not trying to support the tobacco industry, nor are we trying to support the cereal industry by helping farmers with crop insurance on wheat. It's a difficult dilemma. Mr. Meehan. It is a dilemma. You know, it's interesting in my district, obviously I don't have tobacco farmers in Massachusetts, but I do have defense contractors. With the cuts in procurement over the last decade or so, it has been devastating to workers all over Massachusetts, particularly in my district where Raytheon is located. It seems to me, and it is a difficult question, but the issue is how to get these workers, in this case how to get the farmers, so that they can raise their families and make a decent living and make that transformation. I think that's a challenge as we go down the road that we're going to face. Mr. Walsh. Thank you. Mr. Meehan. Thank you. Mr. Skeen. Thank you very much. I think in courtesy to Mr. Riggs who was a part of your panel, we'd like to give him a little exposure. That's a beautiful tie you have on. We'll trade you the tie for the testimony. Mr. Riggs. Well, if you guessed it's a Rush Limbaugh tie you'd be right. Mr. Skeen. Please proceed. --------- Wednesday, March 19, 1997. WITNESS HON. FRANK RIGGS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. Riggs. Mr. Chairman, it's good to be back in front of you. Mr. Skeen. It's good to have you here again. Mr. Riggs. Well, I feel like I'm at home. This is actually the first opportunity I've had to testify before the subcommittee. Unfortunately, our colleagues aren't present, but I want you to know how much I enjoyed serving on the committee in the last Congress, especially under your Chairmanship and your leadership. Mr. Skeen. You've been very kind. We appreciate it. We miss your great incisive look-see into the agricultural picture. We appreciate having you here this morning. We will have your entire written testimony in the record. Mr. Riggs. Thank you, Mr. Chairman. I guess it's appropriate to perhaps pick-up where Mr. Meehan left off because I join him and Jim Hansen, the co- Chairs of the Task Force on Tobacco to speak in support of the FDA's budget request for the 1998 fiscal year of $34 million for implementing its final tobacco regulations. These, of course, are the regulations that are designed to restrict access to tobacco products on the part of minors or teenagers under the legal age of 18. I think you may recall in the two years that I served on this subcommittee under your Chairmanship and I was active in this fight. In fact, I think I frequently raised the issue with Mr. Sanders and other members of the staff. I'm sure you know that tobacco is the single most preventable cause of death and disease in the United States responsible for one out of every five deaths nationwide. The estimate is that 420,000 Americans will die this year from tobacco use. One of every three long-term users of tobacco eventually will die from a disease related to their tobacco use. Almost half of all regular cigarette smokers will eventually be, for all intents and purposes, killed by their habit or their addiction. These are very avoidable deaths. Former FDA Commissioner Dave Kessler, who really sort of spearheaded this fight is correct to call tobacco a pediatric disease because each year 3,000 children, and they are our children, will start smoking tobacco. It is simply not right for this government to sit idly by while our children are bombarded by advertisements and promotions that target the young people of America. Every day, children are exposed to commercials and advertisements that are very sophisticated in nature, and are really more designed for a mature audience. Children are particularly susceptible to peer pressure and to the influence of slick public relations campaigns. In my view, it is really a disgrace that we have somehow glamorized tobacco smoking. That combination produces deadly consequences. I believe as a result, our government has a moral obligation to education and protect our children from influences that could jeopardize their health and well-being. As I mentioned, it is absolutely irrefutable that tobacco kills when children start smoking. It's really only a matter of time before they become addicted and suffer the consequences of tobacco related illnesses. Anyone who says otherwise I think is sort of kidding themselves. The FDA regulations on cigarettes and smokeless tobacco products is a good investment in our children and in the future of our country. The goal of the program is to reduce the availability and the appeal of tobacco products to children and teenagers and to educate young people about the very real health risk of tobacco use. As you know, the regulations are not an attempt, are not an attempt, I repeat, to curb access by adults to tobacco products or to infringe on the First Amendment rights of any American. They are common sense measures to address a severe public health crisis. This is a commitment to our children and our future. I ask that as you begin to draft the subcommittee mark for fiscal year 1998 that you include full funding for implementation of the FDA's final tobacco regulations. Again, I appreciate this opportunity to testify before you today, Mr. Chairman. [The prepared statement of Congressman Riggs follows:] [Pages 758 - 762--The official Committee record contains additional material here.] Mr. Skeen. We appreciate the testimony. We also appreciate the terrible problem we're going to go through here in dealing with this thing, but that's what we're here for. We certainly do appreciate your input and the work that you do on behalf of this effort. I'm sure it's one of dedication. We appreciate you being here. We do miss you on this subcommittee. I'm glad to have you back. Mr. Riggs. Thank you, Mr. Chairman. Mr. Skeen. We will go off the record for a little short recess here until we get our last two Members. [Recess.] Mr. Skeen. Ms. Hooley is here. The seat is ready for you. ---------- Wednesday, March 19, 1997. WITNESS HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON Ms. Hooley. Thank you very much. Mr. Skeen. What part of Oregon are you from? Ms. Hooley. Mr. Chairman, I represent the Fifth District which includes Corvallis. It's just south of Portland and North of Eugene. Mr. Skeen. I know exactly where it is. I started high school in Portland. Ms. Hooley. Oh, is that right? Mr. Skeen. Yes. Ms. Hooley. Where about in Portland? Mr. Skeen. Central Catholic. Ms. Hooley. Oh, yes; know it well. Mr. Skeen. I played on their first football team. Ms. Hooley. Is that right? Mr. Skeen. Yes. We didn't do much. Ms. Hooley. I was going to say, did you have a winning season? Mr. Skeen. No. We didn't. We were pretty green, but I loved Oregon. Ms. Hooley. It's a great State. Mr. Skeen. It's a beautiful, beautiful State. I've always enjoyed the signs too because new comers there always had a terrible time with pronouncing the name of Willamette. Ms. Hooley. Yes. Mr. Skeen. And there used to be a sign that said Willamette, damn it. Ms. Hooley. Yes. That's it. I told my staff that's not from Oregon. I said there are three things you need to know. You need to know how to pronounce Oregon, Willamette, and you need to know that we grow filberts there. Mr. Skeen. That's exactly right. Welcome. We're glad to have you here. You may proceed. Your entire written testimony, will be in the record. Ms. Hooley. Okay. Mr. Skeen. So, you may proceed. Ms. Hooley. Thank you, Mr. Chairman. I will try to be very brief. Mr. Skeen. We appreciate that too. Ms. Hooley. I am from the Willamette Valley which has probably the most fertile soils in the United States, as well as the most diversity in its crops. About 95 percent of the farmers in our district are small family farmers. My district includes one of the most prestigious agricultural and eduction and research institutions and that's Oregon State University. It has a network of agriculture experiment and extension stations and is an international leader in advancing agricultural industries through the discovery and application of new technology. Much of what's happened in Oregon State with its ground breaking research could not have been done without the help of you and this subcommittee. Thank you very much for your help in the past. I would ask for your continued support for Oregon State University's research projects in fiscal year 1998. I have a full written statement that you have, and I'm just going to summarize the three projects that we're asking for. Mr. Skeen. Very good. Ms. Hooley. First of all, we would like to have $350,000 from the Agricultural Research Service and $250,000 from the Cooperative State Research Education and Extension Services to fund the Pacific Northwest Center for Small Fruit Research Program. They've received federal funding since 1990. This is a national model. It's a cooperative between the growers, the researchers, three States and the Federal Government. Just to put it in perspective, Oregon, for example is leading in raspberry producers, Washington State, is second in grape growing. The Center focuses on the use of pesticides, genetic research, production practices and so forth. It's received acclaim because of its cooperative nature. It works with three States, again, as I've said in the Federal Government. The second project I respectfully request $1.5 million in Agricultural Research Service funding for the establishment of a Nursery Crops Research Center located in Oregon State. Although it would be located in Oregon, it would really be the center for the nation for both research and a meeting place. It would be located at Oregon State which really is the heart of the Northwest nursery industry. Again, we would work with the University of Idaho and Washington State University. It is really critical that we began to do a lot more research on our nursery crops. Finally, I'm requesting $275,000 from the Cooperative State Research, Education and Extension Services for the recovery of bioactive components from seafood waste programs. This program is not in my district, but I have a lot of the Oregon Coast and a lot of seafood producers. What this program would try to do is look at how we use the waste from seafood. Currently, we're using about 30 to 40 percent of the materials from seafood for production and we're throwing away 60 to 70 percent. That's an incredible amount of waste. There is a lot of nutrition in that part that we throw away. We need to have a program going on what we can do with this waste material, and how we can use that for production. I think funding the program like the Seafood Waste Utilization Program can ensure that our agricultural industries in Oregon and across the country continue to lead the world in innovative ways to reduce waste, save money, and help feed our nation. Thank you for consideration of these three programs. They are very important to the agricultural community not only in Oregon, but I think as well around the nation. [The prepared statement of Congresswoman Hooley follows:] [Pages 766 - 770--The official Committee record contains additional material here.] Mr. Skeen. Well, we thank you for your support and sponsorship of this part of the Agricultural Research System. Everyone says, well, why do we have so many Agricultural Research Stations? Because we produce so many different varieties of agricultural products throughout the entire United States, as big a country as we are. But then, once again, only 2 percent of our population is providing enough food to feed us and almost the rest of the world because of the research that we've done. Ms. Hooley. It's the research that we've done that really has enabled us to stay as the leader, and I think the other thing people forget is the climate and the growing conditions are so different. I mean, what we do to grow blueberries is very different than what they do in Pennsylvania or what they do in another State. So, our growing conditions are very different. Mr. Skeen. The byproduct, the waste, the utilization of the waste from your seafood industry interests me very much because once again, someone says well, it's just a matter of disposal. It's the utilization of something that has unique ingredients and could be useful in some process. Ms. Hooley. Well, think about all of the---- Mr. Skeen. Sixty percent. Ms. Hooley. Sixty to 70 percent is thrown away, and you think of all of the nutritional value in seafood. Mr. Skeen. Fertilization, as fertilizers. Ms. Hooley. I think they can make some other products out of it. Mr. Skeen. Edible products. Ms. Hooley. Yes; edible products. Mr. Skeen. That's interesting. Thank you very much for your testimony. Ms. Hooley. You are more than welcome. Thank you for your time. I appreciate it. Mr. Skeen. We're delighted working with you. You are welcome back any time. Whether we have money or don't. Ms. Hooley. Okay. Thank you. Mr. Skeen. Mr. Pomeroy. ---------- Wednesday, March 19, 1997. WITNESS HON. EARL POMEROY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH DAKOTA Mr. Pomeroy. Hello, Mr. Chairman. Mr. Skeen. Good to see you again. Mr. Pomeroy. Good to be here. Mr. Skeen. Proceed any way you'd like. Your entire written statement will be placed in the record. Mr. Pomeroy. Mr. Chairman, North Dakota has many issues before your subcommittee. But I'm going to involve my time this morning to talk just about one issue in particular. Mr. Skeen. We appreciate that. Mr. Pomeroy. The funding of the Northern Great Plains Research Laboratory in Mandan, North Dakota. The Administration's fiscal year 1998 budget request recommends closure of the Mandan Research Lab. I believe that would be a serious mistake for several reasons, including it would preempt the agriculture research facility review process established by the 1996 Farm Bill. It would halt the progress that's been made to develop environmentally sustainable cropping systems on the Upper Great Plains, and it would reduce the profitability of farming on the Upper Great Plains just one year after Congress eliminated the government's safety net for family farmers. For these reasons I ask you to reject the Administration's recommendation and provide the $2.8 million necessary to fund the Northern Great Plains Research Lab in fiscal year 1998. To provide some detail on those points. As you know, the last farm bill does provide for a base closure like review of all of the agricultural research facilities in this country. I find it very surprising and disappointing that the U.S. Department of Agriculture would recommend closure of the Mandan facility prior to this comprehensive review where the assets of the Mandan Station are evaluated competitively to the other stations under review. It reminds me something like closing the Holloman Air Force Base in New Mexico before the start of a base closure round. It just wouldn't be fair. It wouldn't be equitable. It's not the way to do it. Aside from the glaring unfairness of recommending the closure outside of the so-called base closure round for the Agricultural Research facilities the closure recommendation makes no notice of the fact that the U.S. Department of Agriculture has just spent $1.5 million in further improvement at the facility. I also believe they paid very little heed to the unique contributions of the Mandan Agricultural Research Station over the last several years, particularly in the development of minimum and no-tillage cropping systems for the Northern Great Plains. We're not just talking about a North Dakota facility here. The contributions from this station have benefitted the agriculture from Eastern Washington all the way down to Kansas. No-till and minimum till systems have helped control soil erosion and improve water quality by increasing the efficiency of water use and reducing the leaching potential of fertilizers and agriculture chemicals. The lab's research on the beneficial effects of no-till farming on wind erosion have lead to the development of an ARS Wind Erosion Prediction Model that is used today by farmers across the country. In recognition of their contribution for improving the environment, Ducks Unlimited and the National Audubon Society have expressed their strong opposition to closing the facility. In addition to the proven track record of success, the Mandan Lab is also looking to the future to discover new environmentally responsible farming practices. An area of particular interest to policy makers that is currently being evaluated by the lab is the development of new methods. Techniques for converting CRP land to crop production while preserving the soil and environmental quality are benefits derived from the ten-year CRP Program. We are going to be having thousands and thousands of acres coming out of the CRP Program in the highly, wind erodible types of conditions that are targeted by the Mandan Research Facility with their research. It is precisely the wrong time to attempt to close a facility that's helping producers learn how to bring land out of CRP and back into production. It is the critical time for the research that they are providing. Finally, the Mandan research lab plays a critical role in enhancing the profitability of farming across the Upper Great Plains, particularly in light of the passage of the 1996 farm law repealing the 60 year old system of agricultural price supports. We are going to have to find ways to make farming more profitable, now that it is even more dependent upon the free market and less dependent upon government price supports. This is an area where the Mandan Research Facility has made distinct contributions in the past, and its role in the future as I mentioned is even more critical. One of their notable contributions has been the leading role they have played in helping farmers change from a crop- fallow system of farming to a continuous cropping system of farming. This conversion not only improved environmental conditions on the Great Plains and reduced wind erosion, it increased farm income in North Dakota alone by $16 million to $29 million per year. Likewise, a system of dry land crop rotations developed by the lab using alternative crops has proven to be 40 percent more profitable than the continuous planting of wheat. Importantly, the rotations being developed will reduce the incidents of disease and provide for safer raw food product. Mr. Chairman, in the interest of fairness and recognition of the Mandan ARS Lab's substantial contribution to protecting the environment and enhancing farmer productivity. I urge this subcommittee to fund the $2.8 million required for the fiscal year 1998 operation of this station. Let it be reviewed with every other Agricultural Research Station during the comprehensive review as authorized by the Farm Bill. That concludes my presentation. I'd be happy to answer any questions you might have. [The prepared statement of Congressman Pomeroy follows:] [Pages 774 - 775--The official Committee record contains additional material here.] Mr. Skeen. Thank you very much, Congressman. I think we funded it in our last appropriation bill. Is that not correct; the Mandan? Mr. Pomeroy. Correct. Yes. It's always been a part of the USDA budget. We didn't have any notice whatsoever prior to the publication. Mr. Skeen. There was no consultation with you at all? Mr. Pomeroy. No. Mr. Skeen. This came out of the Administration. Mr. Pomeroy. It came out of the blue out of the Administration. Mr. Skeen. Well, you've been a very strong supporter of agriculture and agricultural research, and as I recall, I think you've probably had as many or more requests the last time than probably any other Member because it's so vital to you in your area. What was the rationale? What is your most prominent agricultural product; wheat? Mr. Pomeroy. Wheat and barley, Mr. Chairman. Mr. Skeen. Wheat and barley. Mr. Pomeroy. Absolutely; wheat number one. Mr. Skeen. Does Mandan play a part in that? Mr. Pomeroy. It most certainly does. The Mandan Research Facility, in particular, is geared at productive farming, both crop and ranching, in areas where the moisturebegins to be reduced. So the farming a little more on the economic margin. Now, that's the situation in terms of Western North Dakota, also Montana, all the way out to Eastern Washington along the Northern tier, and as you know, all the way down South into Southern Kansas. So the research of this facility helps farmers that are the most economically on the edge in light of the challenging growing conditions that they're trying to operate in. Mr. Skeen. Well, I'm a little surprised that the Administration made that recommendation. Mr. Pomeroy. I think it is a ridiculous recommendation. I believe the U.S. Department of Agriculture blew it on this one. I don't think it was fair in terms of process. There is a process to review all of these facilities next year. Why single one out for closure this year? Second, it was flawed in terms of substance. The contributions of this facility are very important, for example, the acreage now bring brought out of the CRP Program. Farmers need to know how to bring it back into production in the optimal way possible without sacrificing the environmental benefits gained while it was in CRP. This station is unique in the country in their ability to help in that respect. Third, to recommend closure of this station when farmers in the semi-arid regions of the country dealing with the challenging circumstances of having a profitable farming operation are going to have a tougher go than ever before in light of the changes made to the Farm Bill. They need more help, not less. Mr. Skeen. I agree. Mr. Pomeroy. I think they really made a mistake this time. Mr. Skeen. I agree with you. It's very difficult to make a profit because of margins and so forth, particularly in large cropping situations like wheat and some other grains. You're open to every kind of disaster situation and so forth. Mr. Pomeroy. We seem to be experiencing our full share of disasters lately in North Dakota. Mr. Skeen. Well, we've tried to support you. Now this is not a point of criticism, but we noticed that you didn't vote for the Agriculture Appropriation Bill last time. Was it because we had left something out? Mr. Pomeroy. Yes, sir. Mr. Skeen. What was the problem. Mr. Pomeroy. You recall the Sugar Program is routinely attacked in the appropriations process. Mr. Skeen. Yes. We have quite a tussle. Mr. Pomeroy. It was a difficulty with some language relative to the Sugar Program that lead me to vote against it. Mr. Skeen. Well, I appreciate that. Once again, that was no point of criticism. Mr. Pomeroy. It's a fair point. I mean, agriculture, as a component of the state's economy, is a bigger deal in North Dakota than any of the other 50 States. So, when I'm in here looking for what I consider to be appropriate federal support for the tremendous agriculture taking place in North Dakota, it is my responsibility to support you, Mr. Chairman, in your efforts to make sure agriculture is fairly treated. I do that as a matter of course. Sometimes as you know, in an appropriations bill things get in that can cause particular heartburn to important commodities. Mr. Skeen. Well, you have a large sugar beet industry. Mr. Pomeroy. A very significant sugar beet industry in the Eastern part of the State. Mr. Skeen. Sure. And--process as well? Mr. Pomeroy. Yes. In fact, there are three major processing plants in the Red River Valley. We estimate at least 30,000 are employed in the sugar beet industry in North Dakota with many, many millions of dollars of input to our economy. Mr. Skeen. Well, we like to support the research efforts, because everything is so vital. I mean that's why I asked you this question. Mr. Pomeroy. I think it's a fair question, Mr. Chairman. Mr. Skeen. I want to get some idea, some scale on what goes on with these things because once in awhile you don't get a chance to visit with a Member about whether there is something wrong or what the situation was that caused a negative approach to the thing. So, I appreciate your candor. Mr. Pomeroy. Mr. Chairman, I want to cite you in particular for having been a friend of production agriculture. I think your record is a clear, consistent, and highly distinguished one in that regard. Mr. Skeen. Well, we appreciate that. It parallels yours. You certainly have been a great proponent of agriculture research and a supporter. We appreciate that too. Mr. Pomeroy. Thank you, Mr. Chairman. Mr. Skeen. Thank you for your testimony and thank you for being here. We have no further people on our list today so we will stand adjourned. -------- Thursday, March 20, 1997. WITNESSES HON. WES WATKINS, UNITED STATES CONGRESSMAN FROM THE STATE OF OKLAHOMA DR. JOE TARON, DDS, POTTAWATOMIE DEVELOPMENT AUTHORITY Mr. Skeen. The subcommittee will come to order. I apologize for being a little bit late. Let's start with Wes Watkins this morning from Oklahoma. Mr. Watkins. Mr. Chairman, members of staff and all, I'm honored again to be in front of you and to be here on the committee I used to serve on. It was always one of the highlights of my previous 14 years. Mr. Skeen. We're glad to have you back. Mr. Watkins. Thank you, sir. I have the honor of introducing a dear friend; a friend who gets up early, stays late, and catches the Red Eye special that came in here last night and flew into Baltimore so he could save a few dollars and then catch a train down. He is a dentist by profession, a community leader. I knew him a long time and when I got his county in my district from redistricting, I noticed a paper where Dr. Joe Taron was working to try to solve the water problems in his county and spending untold hours doing so. He has been the Chairman of the Pottawatomie Development Authority. I called him personally and I said, you know, I have an interest in trying to help. I would like to meet with you whenever we can. Well, that was in the early 1980s. We've worked together night and day on the North Deer Creek Watershed and the impound area. That has come to pass. What has happened though is the local people have bonded; they have raised their money. They kept their word on the amount of dollars they would put up. The people have raised even their water rates and everything in order to meet their commitment. But on a federal level, we haven't kept our commitment of $750,000 in order to finish up some of the activities in and around the lake. The lake has been built, water is being impounded, and things are all in front, but the people cannot hold any more bonding. They've done everything they can. Mr. Chairman, with those comments, I would like to introduce to you one of the probably most dedicated civic workers who gives probably more hours to his fellow human beings than any person I know of, Dr. Joe Taron, for his comments if that's okay with you. [The prepared statement of Congressman Watkins follows:] [Pages 781 - 783--The official Committee record contains additional material here.] Mr. Skeen. You are welcome. Go ahead. You may proceed. Your full written testimony will be included in the record. If you will abstract it or summarize it we would appreciate it, sir. We appreciate your service. Dr. Taron. Mr. Chairman, I want you to understand that I appreciate your allowing us to come here on behalf of the North Deer Creek Watershed Site 1M Program. When this first started we were working through the Natural Resource Conservation Service. They gave us a menu to pick from. They said if you'll go with no recreation we'll participate at a certain level. If you go with half recreation, we'll go at a different level of participation. But if you go with full recreation, we will 50/50 cost share with you. So, we selected that part from the menu. In 1987 the commitment was made then to participate at the level of approximately $3.2 million. The recreation funds, are the ones we want to talk about today because all of the other amenities are completed. The dam is finished. All of the relocation is done; utility relocation and everything. Based on this commitment, the participation of the Soil Conservation Service, we went back home and got the City of Shawnee and the City of Tecumseh to agree to purchase all of the water. On the strength of these take or pay contracts, we went to the bond market and sold $18 million worth of bonds. So, the participation by the Natural Resource Conservation Service equated out about 18 percent of the total project cost. But it made it a feasible and a do-able project when we crunched the numbers. So, on this strength they agreed on a take or pay basis to take all of the water and pay the bills. Included in that was a recreational plan that they were depending on us to sell permits and such to generate the monies to do the operation and the maintenance on it. The life expectancy of this project is 100 years. So, they made a commitment for 100 years to operate and maintain this facility. That was a requirement of the Natural Resource Conservation Service that we give them an operation and maintenance plan. On the strength of these contracts we were able to sell our bonds and get the funding done. I think that's enough about that. In closing, I would like to read a quotation from the Geography of Hope, which is published by the Natural Resource Conservation Service. ``Commodity for the market place are what our Nation's farms, ranches, and other private enterprises are about. But private land is about much more than this. The foundation of our farm's productivity is our soil, a complex, living system that, although largely unrecognized as important in our national environmental policies, is in fact the basis of all life. ``If we farm well, healthy soil will exist; most water that we use falls first on our Nation's farms and ranches. If we manage our soil well, water will be used efficiently. By the time it leaves the farm heading downstream to support our urban neighbors and other life, it will be clean. Healthy productive land does not simply happen. A good deal of thought, work, and conservation assistance, both technical and financial, are often requisite to success.'' Of all the funds appropriated for the NRCS, 25 to 28 percent are used to provide the oversight technical assistance and inspection. They provided all of the technical oversight. We provided the engineering. They provided the approval and oversight on that. They provided the inspections on this thing. I can't say enough. Though that was not a part of their appropriation to us, it was a part of your appropriation to them and they spent it on us. I really understand that and recognize how valuable that was. The Soil Conservation Act of 1935 charged the Soil Conservation Service to deliver conservation assistance to farmers, ranchers, and other private land owners. From the perspective of 60 years, we can see how they have helped. Conservation is a continuing responsibility that produces a continuing reward, particularly when multiple interests can act jointly. Thank God for your wisdom in the past. I pray for your wisdom now and in the future. Mr. Chairman, I thank you. [The prepared statement of Dr. Taron follows:] [Pages 786 - 797--The official Committee record contains additional material here.] Mr. Skeen. Thank you very much. I appreciate the hard work and the trouble you folks have gone through. What was the government's part as far as financing was concerned? Dr. Taron. It was $3.2 million. Mr. Skeen. It's the $3.2 million? Dr. Taron. Yes, sir. Mr. Skeen. Is that the total? Dr. Taron. The total cost of the project was $21 million. Mr. Skeen. About $21 million. Dr. Taron. Yes, sir. Mr. Skeen. The local communities bonded and did their part to put their share up. Dr. Taron. Yes. Mr. Skeen. One of your partners is not paying their share. Dr. Taron. Yes, sir. Believe it or not, when we crunched our numbers, that 3.2 percent made the water affordable. Without it, it was not affordable for us to sell to Shawnee and Tecumseh as municipalities. Mr. Skeen. But you are providing water for those two communities. Dr. Taron. Yes, sir. Mr. Skeen. You are bonded up to the hilt. Is this their drinking water system? Dr. Taron. Yes, sir. Mr. Skeen. Thank you very much. Mr. Watson. Mr. Chairman, we thank you. I'd like to say that Dr. Joe Taron is not just a dentist by profession, but he lives out on a farming ranching operation. So, he goes deep in the roots and the soils of Oklahoma. Mr. Skeen. Well, I appreciate that. Anybody that's involved in agriculture ought to have a good reliable income like dentistry. Dr. Taron. Right. Thank you, Mr. Chairman. Mr. Skeen. We thank you. Mr. Lehman. Delighted to see you. Welcome. ---------- Thursday, March 20, 1997. SOUTH FLORIDA DAILY BREAD FOOD BANK WITNESSES HON. WILLIAM LEHMAN (RET.), UNITED STATES CONGRESSMAN DAVID KREPCHO, EXECUTIVE DIRECTOR Mr. Lehman. I'm happy to be here. Mr. Skeen. Who do you have there with you? Mr. Lehman. I have David Krepcho from the South Florida Daily Bread Food Bank. He was kind enough to meet with us a couple of years ago about the same problem that we're talking about today. We are happy to be back here before you. Mr. Skeen. It is good to see you. You are well-attended. Mr. Lehman. We are survivors. Mr. Skeen. That's the name of the game, survival. Mr. Lehman. Right. I'm on the Board of Directors of the South Florida Food Bank. I'd like to tell you again what the problem is and the best example about what's happening in Miami today. This week is the first week of two weeks of the huge Lipton Tennis Tournament. There are dozens of hospitality tents all serving food. Every day they have all kinds of prepared food left over. The Daily Bread Food Bank has need for this food and hungry people to feed. There is no way to get the food from the leftover hospitality tents at the Lipton Tournament to the people that are hungry. What we're trying to do is to set-up an arrangement for funds to buy the kinds of refrigerated vehicles to house the food from these institutions such as the Lipton Tennis tournament or the restaurants or the stadium, banquets and so forth, that have this leftover food and transport it to the Food Bank for distribution. Currently, the Food Bank has no way to get the food. What we want to do is to try to find a program in the Department of Agriculture that will be able to fund money for refrigerated trucks and other needs to salvage this prepared food that's so available and so needed. So, at this time, I will yield to David Krepcho, our Executive Director to better explain it. Thank you, again, Mr. Chairman. Mr. Skeen. Thank you, Bill. Mr. Krepcho. Mr. Krepcho. Thank you, Mr. Chairman for the opportunity to speak to this subcommittee. It is a privilege. The Daily Bread Food Bank is a member of the Second Harvest National Network of Food Banks. With us today we have the CEO, Christine Vladameroff from Second Harvest. We serve the Miami, Fort Lauderdale, and West Palm Beach area in South Florida and distribute otherwise wasted food to organizations that are feeding needy people. Through food banks like the Road Runner Food Bank in New Mexico and other food banks, 181 food banks across the country, we all do basically that same thing. Our request as Congressman Lehman mentioned, is for support from the Department on supplemental funding for not-for-profit prepared food rescue programs. Ours is one example. This funding will provide the means to leverage existing successful programs like ours to go out to restaurants, hotels, catering companies, sporting events, and the like. The lack of refrigerated vehicles, or operating, or technical support is the major problem in limiting the expansion. We request specific conference report language which supports these types of food recovery efforts to be funded through the TEFAP Administrative Fund. This administrative funding request is not a request for additional funding, but to protect the current level that it is at for fiscal year 1997 to maintain that for fiscal year 1998. We're very mindful of the significant budgetary pressures that this subcommittee has. So, we are not requesting in addition, but specific language that these prepared food programs could tap that administrative fund. The TEFAP commodities in themselves are a vital supplement to what food banks do across the country. We would love to see that funding of $100 million for commodity purchase stay intact for fiscal year 1998. While we have a program in place to get prepared foods, there is incredible supply. About 20 percent of the food in this country is wasted. That's equivalent to the EPA estimates to about 13.8 billion pounds, enough to feed 49 million people. Just in South Florida alone, we have food donors lined up for our program. We're working with about 200 food donors on our prepared food program. We have in just our area about 6,000 eating establishments. So, you can see that we've barely scratched the surface on the potential of a program like this. Last year alone over a half a million pounds of this type of food was collected and distributed. So, while so much food is going to waste, and we have so much interest from food donors, many, many people go hungry. Twenty-six million Americans are currently at risk of hunger each day. In South Florida alone, the demand is huge. Food banks across the country are experiencing increased demand for their services; some food banks as high as a 50 percent increase. The U.S. Conference of Mayors in December released their annual report which showed an 11 percent increase in the number of people asking for emergency food assistance. So, it's not just indicative of Southeast Florida, but across this nation. For nearly two decades, food banks have been there to fill a part of the gap when the government benefits have fallen short. Just a couple other quick additional reasons for support of these kinds of programs. The nutritional value of the prepared food at times can be extremely high and a good complement to what we do with private donations already. As a national network, we distributed close to one billion pounds. The leveraging of funds. When dollars are invested into a program such as this, and our program is just one example, for every dollar invested we can distribute enough food for four meals. If you multiply that across the country, the impact is significant. But it goes beyond feeding people as well. As we supplement these charitable organizations on their food and beverage, those are expenses that they do not have to incur whether they run a day care center, a home for the elderly, a soup kitchen, or a homeless shelter. They can take those funds they do not have to spend and plow that right back into social services in their community. The Gleaning Initiative which the Department of Agriculture has launched ties right into this. That has opened up many new doors such as school cafeterias. Food is out there. We need help to go collect it. The Bill Emmerson Good Samaritan Food Donation Act is also opening up many potential new food donors. It does waive the risk of liability. So, in conclusion, Daily Food Bank and Second Harvest would, again, thank this subcommittee for this opportunity to present this very vital need and request that this funding do come from the TEFAP Administrative Fund, and that you protect that funding for fiscal year 1998. Food banks are ready, willing, and able to show this subcommittee what we do day-in and day-out and invite anyone to visit their local food bank and see first hand what we do. So, on behalf of the needy of this country, again, I'd like to thank you. [The prepared statement of Mr. Krepcho follows:] [Pages 802 - 808--The official Committee record contains additional material here.] Mr. Lehman. Mr. Chairman, I'd like to just add one thing. I'd like to be able to work with David to try to have the best approach to the kind of language, bill language or report language, that you will be able to incorporate in your bill this year. We would like to work with him and your staff to determine how best to support this problem, either in the report language or bill language for the next fiscal year. Thank you very much. Mr. Skeen. Let me advise you of something. I appreciate your testimony. I appreciate particularly the work that you folks do. You've made this program work. It's been a personal dedication for each and every one of you and a great hardship. We certainly appreciate that. Last year, the USDA told us that they had the authority to use TEFAP administrative funds to purchase freezer and cold storage equipment. I'm surprised that they haven't followed through evidently, on the trucks necessary to distribute these foods that you pick-up and so forth. The USDA obviously may not be using that authority they already have. So, what I want to do is advise you that they have that authority. We don't need the language. We need to tell the USDA to use it as they indicated they wanted to. Let's go back to the USDA again and tell them that you folks need that equipment. How are you handling it now? Mr. Krepcho. It's totally privately funded. Mr. Skeen. Do you have refrigeration? Mr. Krepcho. Refrigerated trucks. Mr. Skeen. But that service is donated to you? Mr. Krepcho. No. We have to go out and raise money privately to go purchase those vehicles. Mr. Skeen. I see. We'll talk to the USDA about this and give you a referral. Mr. Lehman. Mr. Chairman, is there any point in putting in any report language to urge the USDA to do this? Mr. Skeen. If necessary, Bill, yes. We can do that. But rather than going through all of the business of trying to put the language in there, I'd like to just go tell the USDA to do what we told you to do in the first place. Mr. Lehman. Maybe all they need is a phone call. Mr. Skeen. Well, that usually works pretty good. Mr. Serrano. Mr. Serrano. Thank you, Mr. Chairman. I also join the Chairman in making sure that we take care of this situation. I'm one of those individuals, as are most Americans, who is outraged at the amount of food in this country that is left over, if you will, that could very well be used by other people. It's just a matter of getting it there. I think people should always be aware of the fact that we're not talking about leftovers in the classic sense of a lesser quality food. Mr. Lehman. It is quality stuff. Mr. Serrano. Yes. Great quality stuff, and this country just wastes a lot of food. We do. We do at home. We do in school. We do everywhere. We have to find a way of doing it. So, I just want to second the Chairman's comments. I will work and our staffs will work together to make sure that USDA does what it was supposed to do. If not, I join the Chairman in making sure that the---- Mr. Lehman. I'm sure that the committee is aware that once the Food Stamps are no longer available for the legal immigrants that are not naturalized yet, there will be an extra demand for this same kind of food in both my old territory and I'm sure in your own districts right now. Mr. Serrano. Absolutely. This is a big issue in the South Bronx because there is food like everywhere else, but at times it is the ability to get it to other people. Just a personal question. The refrigerated vehicles, is there a standard vehicle that is used in most places? Does it vary? Mr. Krepcho. It all depends on the particular community that you're in. In our situation which is, I guess, a large urban center, we have three 14-foot refrigerated trucks on the road full-time just for the prepared food program. They are constantly going out to kitchens with containers. The drivers are trained in safe food handling, as well as the recipient organizations. So, that food is picked up, put into containers, put on the racks in the back of the trucks, and then delivered directly to the organizations that can handle that food properly, and serve it to folks. Mr. Serrano. I just took a look at the testimony here. I don't know to what extent it's related to this issue, but I do have the concern, have we taken care of or are we in the process of taking care of the issue of any liability that some donors may have or that may hold them back from donating this food? Mr. Krepcho. The Bill Emerson Good Samaritan Act that was just passed very recently is a tremendous help to programs across the country because that's one of the first hurdles we come across with a potential new donor and that is the worry of a lawsuit. We can get over that hurdle with the Good Samaritan Act and at the same time, we can tell that donor of the other benefits. There are tax benefits to donating. They reduce their dumping cost. They get to feel really good about helping being a part of the solution of feeding the needy in this country. Again, we appreciate your support of the language. The funding is absolutely critical to go along with that to expand what we have in place already that is successful. Mr. Serrano. Again, Mr. Chairman, I join you in support of this fine effort in either getting the USDA to do what they were supposed to do or getting new language to make sure they do what they were supposed to do when they had language to it before. Mr. Skeen. Thank you, Mr. Serrano. I think we're traveling the same track. Mr. Kingston. Mr. Kingston. No questions, Mr. Chairman. Mr. Skeen. We thank you very much. Former Congressman, Larry Coughlin. --------- Thursday, March 20, 1997. FRIENDS OF THE U.S. NATIONAL ARBORETUM WITNESSES HON. R. LAWRENCE COUGHLIN (RET.), UNITED STATES CONGRESSMAN MURIAL GOSS LINDA WILSON, EXECUTIVE DIRECTOR Mr. Skeen. Welcome. I see that you're well attended as usual. Mr. Coughlin. Thank you very much, Mr. Chairman. Mr. Skeen. The most powerful companions in the whole Capitol area. Mr. Coughlin. Mr. Chairman, with me is Murial Goss, the distinguished wife of our distinguished colleague from Florida and Linda Wilson who is the Executive Director of the Friends of the National Arboretum. Mr. Skeen. I recognize power when I see it. Mr. Coughlin. Mr. Chairman and Members of the subcommittee, thank you very much for the opportunity to submit testimony on behalf of the Friends of the National Arboretum in support of three specific programs at the U.S. National Arboretum. FONA, the Friends of the National Arboretum, is a private non-profit corporation dedicated to providing support for the U.S. National Arboretum. Since 1927 the U.S. National Arboretum is engaged in horticultural research and education in nursery and floral crops, the fastest growing segment of the U.S. agricultural business. Thanks to your foresight and your generosity, as well as the generosity of the private sector, the U.S. National Arboretum has introduced over 150 important new cultivars of disease resistant ornamental plants. This year with the support of generous contributors to FONA, the U.S. National Arboretum went on-line on the Internet in a further effort to enhance dissemination of research and horticultural information. Today, nursery and floral crops represent 11 percent of the total cash value of all U.S. agricultural products. Gardening is the number one leisure activity in the United States. We at FONA are well-aware of the fiscal constraints on the Federal Government. At the same time, the U.S. National Arboretum is a tiny piece of the budget of the Agricultural Research Service. In fact, the Arboretum represents less than one percent of the President's fiscal year 1998 budget of $726.8 million for the ARS. In addition to the allocations of funds that FONA is seeking for the Arboretum are a small part of a specific increase proposed in the President's budget. The President's budget requests a $4 million increase for integrated pest management research and biological control. Of this amount, we request the committee to direct that a modest increase of $150,000 be allocated to the Arboretum's very successful IPM program. This is $150,000 of a $4 million increase. This would match and supplement current private grant funds and allow the Arboretum to develop a landscape IPM program with significant national implications. Second, we request the committee to direct the $250,000 of the $4 million IPM biocontrol increase be allocated to the Arboretum's ongoing program to develop environmentally safe pesticides. Products like Rose Guard, containing neem oil, are paving the way for a new generation of ``people safe'' products to control harmful pests and diseases. Again, this is a small part of a specific increase requested by the President and is for the purpose of the requested increase. Third, the President's budget for fiscal year 1998 requests an increase of $2 million to expand ARS germ plasm collection. We request the committee to direct $250,000 of this increase be allocated to expand the Arboretum's modest program of germ plasm collection of trees and shrubs. This will provide potentially useful genetic materials for the development of new and improved ornamental trees and floral plants. It is, of course, important that these allocations not be done in such a way that the funds are shifted from other U.S. National Arboretum priorities. Modernizing and adapting the Arboretum to the information age, as well as providing new horticultural research is ongoing with both public and private funds. It is important that the federal support for the U.S. agricultural research not be regarded as waning. We would emphasize again that our request is not for unbudgeted funds or for new programs. It is for a portion of budgeted funds, funding increases, for ongoing priority programs. The U.S. National Arboretum performs outstanding research, as well as providing the outlet, the outreach, and the showcase for U.S. agriculture. Mr. Chairman, we thank you and Mr. Serrano for your stewardship of the jewel that is our U.S. National Arboretum and for your consideration of FONA's request. [The prepared statement of Congressman Coughlin follows:] [Pages 813 - 815--The official Committee record contains additional material here.] Mr. Skeen. One of the greatest monuments we have in this local area is the U.S. National Arboretum. It is a spectacular place. Also, the germ plasm bank and some of the things you're headed for I think follows the line that we're following now in medicine. We are finding a lot of cures for a lot of diseases through plant elements. The Smithsonian is involved and several others. It is very interesting. I want to particularly express the appreciation we have for the volunteer work that you folks do and the promotion you do for that wonderful asset we have out there. Mr. Serrano. Mr. Serrano. No questions, Mr. Chairman. Just to welcome our former colleague and just to again join our Chairman in thanking you for the work that you do. It is a national asset and a jewel. I just look forward to the days when you can tell us how we can get palm trees in New York. I'm convinced there is a way. I'm trying to do it. Mr. Skeen. Indoors. Mr. Serrano. I'd like them outdoors. I know you have to cover them up with something for the winter. I can't get the city to listen to that. That's my problem. Thank you. Mr. Skeen. We're going to work on that with each other. Thank you all very much. Mr. Coughlin. Thank you very, very much, Mr. Chairman. Mr. Skeen. Dr. Anne Vidaver. ---------- Thursday, March 20, 1997. AMERICAN SOCIETY FOR MICROBIOLOGY WITNESS ANNE K. VIDAVER, PH.D. CHAIRMAN Mr. Skeen. Welcome, Dr. Vidaver. I'm sorry that we delayed your appearance slightly, but we had to get these wonderful folks who have been with us for a long time as Members of Congress. Dr. Vidaver. I understand. Mr. Skeen. It is the least amount of respect that we can give them. Dr. Vidaver. I understand. Mr. Skeen. I know that you do. I appreciate that. You may proceed. Dr. Vidaver. I appreciate the opportunity to make comments to you on behalf of the American Society for Microbiology. I Chair the American Society for Microbiology's Committee on Agriculture, Food, and Industrial Microbiology. I'm also head of the Department of Plant Pathology at the University of Nebraska-Lincoln. Today, I am testifying on behalf of the ASM's fiscal year 1998 support of the USDA's research budget. To introduce you to the American Society for Microbiology, it's the largest and the oldest life science society in the world. It represents over 42,000 members. They are employed in academia and government. These members are involved in many facets of microbiological research impacting agriculture all the way from foodborne diseases to new and emerging plant and animal diseases, which I will touch upon later, soil erosion, soil biology, agriculture biotechnology, and in the development of new agricultural products and processes. In addition, the Society has been an active member of coalitions that foster fundamental research and needs for agricultural research. Now, there are five points in my written testimony. In view of time constraints, I will only focus on one. That is on new and emerging infectious diseases in plants and animals. I provide you and the committee a copy of a document that the American Society for Microbiology as put together on this issue. I believe you will find it of extreme interest. These diseases are a threat to the U.S. agricultural system that requires not only immediate, but sustained attention as well. I point out that we spend, for example, over a billion dollars on human diseases and probably only about $100 million on all the other species combined. Consider that when you eat your food today and look at the clothes that you're wearing from natural products. Like the human population, U.S. agriculture is also experiencing severe problems that are caused by these new and emerging infectious diseases in plants and animals. The reasons for these are multiple. They involve changes in agricultural practices, population growth, climate, microbial evolution, including fungicide and antibiotic resistance, as well as international trade and travel, and the lack of knowledge to effectively manage and control new an emerging infectious diseases as you well probably know can lead to very severe consequences. I'd like to just illustrate a few examples of these. I would say that in your states represented by this committee, at least some of these diseases occur. The Chairman, for example, may well be aware of Karnal bunt disease of wheat. This was not detected in the United States prior to just March of 1996; not only in Arizona, Texas, and also in California. This puts the U.S. wheat market, the export market, at risk. Secondly, another fungal disease is late blight of potatoes. The colleague from New York would probably be familiar with this. This was the cause of the Irish potato famine. This has reappeared partly due to fungicide resistance, but also to developments in the pathogen itself. This is a severe disease that impacts not only potatoes, but tomato production as well. In some other areas, for example, the colleague from Georgia, gray leaf spot of corn is concerned. That is spreading to the Midwest as well. In the Midwest we also have a virus called the High Plains Virus that is so new it's in a new class all by itself. The significance of that is not fully known. We have probably emerging this spring--soygum that is going to blow into Texas and perhaps into other areas where soygum is grown. These are plant diseases. In animals we have tuberculosis as a reemerging disease at least partly due to drug resistance. This tuberculosis in cattle can infect other animals and can also be transmitted to humans and obviously cause a severe illness. I understand you have a colleague particularly interested in pigs. There is a new porcine respiratory viral disease that is devastating pig production in the Midwest. These are illustrative of the many kinds of problems that are occurring and will continue to occur because the world does not stand still. It changes all the time. Thus, you will not be surprised to hear ASM strongly supports the $5 million total in the ARS budget to fund airious and emerging infectious diseases to develop methods to reduce the risk to U.S. crops and animals from infection with both the new domestic and exotic foreign diseases. In addition, the ASM encourages the ARS to support coordination, communication and new program development in comparative pathobiology across a broad range of plants and animals as a way of more fully understanding and managing disease agents that infect them and host response. I thank you for your attention. [The prepared statement of Dr. Vidaver follows:] [Pages 819 - 828--The official Committee record contains additional material here.] Mr. Skeen. Thank you for your contribution because we're learning more and more often that microbiology with plants and the development of diseases and so forth in plants also parallels a lot of things that happens in humans. Dr. Vidaver. Absolutely. Mr. Skeen. We're becoming much more aware of this day-by- day in your area of expertise and the contribution that you make to it. We want to keep those funds rolling because we have only 2 percent of our whole nation involved in agriculture. If we don't have the research to keep us producing, well, somebody is going to go hungry. Dr. Vidaver. Yes, sir. Mr. Skeen. We thank you. Mr. Jim Mallow with the Association of State Foresters. Welcome. ---------- Thursday, March 20, 1997. NATIONAL ASSOCIATION OF STATE FORESTERS WITNESS JIM MALLOW, STATE FORESTER OF MARYLAND Mr. Mallow. Thank you, Mr. Chairman. Mr. Skeen. Your full written testimony will be included in the record. Mr. Mallow. Yes, sir. I'll be as brief as possible. Mr. Skeen. We appreciate that. Mr. Mallow. My name is Jim Mallow. I'm the State Forester of Maryland. I'm here representing the National Association of State Foresters. My written testimony will, as you've said Mr. Chairman, provide recommendations for a number of programs that assist my colleagues in the other 50 States, including New Mexico, to work with roughly 9,000,000 private land owners to help them bring their forests under better management. In my oral remarks here today I want to focus on three programs; the Renewable Resources Extension Act, the Forest Incentive Program, and the Rural Community Fire Protection Program. Under the Renewable Resources Extension Act, members of the National Association are extremely distressed at the Administration's proposal to eliminate funding for this particular program. We see this as a critical link in USDA's extension efforts to provide landowners with advice and assistance in managing their renewable resources. Survey after survey has shown that this type of assistance is a key stimulus to manage private lands. The target audience is the non-industrial private forest landowner. As you can imagine, this audience continues to grow by leaps and bounds, particularly in this part of the country. The Administration should be using this program as a model for federal programs instead of proposing its elimination. It uses a network of State extension agents to achieve much more than its small budget implies. The Renewable Resource Extension Act is implemented locally. It leverages local resources and provides national direction at minimum cost to the Department. It seems to us that zeroing out a program like this sends the wrong message. It says that you lose out on funds if you have a low cost high benefit program. As I say, this is, we think, the wrong message at a time when we're supposed to be encouraging federal agencies to do more with less. The NASF strongly urges the committee to at least restore the RREA to last year's funding level of $3.4 million if not higher. In our opinion there are ample opportunities to achieve this within the budget levels proposed by the Administration. The second program I'd like to highlight is the Forest Incentive Program or FIP. This program remains a high priority for the National Association of State Foresters. As you know, timber demand remains extremely high and more and more the non- industrial private forest lands are having to meet a growing proportion of that demand. FIP is the only cost share program targeted specifically at ensuring long-term timber supplies and the need for that remains very high. Last year, the Department began allocating FIP funds under a new formula which spread the funds out beyond their traditionally targeted areas and regions of the country. While this is a laudable goal, we think the key here is increasing the funding and the need to ensure that they continue to have sustainable impact on the ground. We continue to support FIP because it reaches out to landowners in a non- regulatory way in an incentive-based approach. It's a cost share; a 50/50 cost share which means that there is a required level of investment and a commitment on the part of the participating landowner. In other words, it's not a handout. We would also note that in spite of its timber focus, FIP does provide numerous conservation benefits including long- term soil protection and wildlife habitat. NASF recommends funding FIP at $10 million for fiscal year 1998. The last program we would mention is the Rural Community Fire Protection Program, RCFP. It is one of the key ones in the State Foresters' effort to combat wildfire nationwide. Fire protection is part of the core mission of most State forestry agents and certainly here in Maryland it is that. RCFP allows us to work with one of our closest partners, the nation's 26,000 rural volunteer fire companies to ensure that they're adequately trained and equipped and organized to fight wild land fires. These volunteers are often times the first line defense against wild land fire. We're asking them more and more to protect our homes and communities as we continue to grow and build houses in the woods around our urban areas. RCFP represents a modest investment and a resource that is currently valued at over $30 billion. This program has been cut to the bare bones over the past two years. In its current level, it's barely functioning as a national program. With federal agency fire policies being implemented, new ones, 1998 may be the first year we see a real bite on volunteer fire fighters. These people who are ordinary members of our communities serve as the only fire defense in some areas of our country. When a fire season rages as long and as hot as the one did last year, these volunteers make up almost a third of the personnel staffing our fire lines across the country. Without RCFP, a large and dangerous gap in our preparedness and ability to respond to wild fire could open. We strongly recommend that this program be restored to $10 million for this coming fiscal year. I thank you Mr. Chairman for the opportunity to testify today. Our written testimony does include recommendations for other conservation programs. We recommend those to your attention. We thank you for your time and consideration. [The prepared statement of Mr. Mallow follows:] [Pages 832 - 836--The official Committee record contains additional material here.] Mr. Skeen. We thank you for your time, Mr. Mallow. As an observation, I've noticed of late the federal management of forests and forest situations, both in Interior and Agriculture and have come to some of the conclusions that the State Foresters have been using and the methodology that they've adopted. Mr. Mallow. Yes, sir. Mr. Skeen. I had the Secretary of Interior say to me today that he approved controlled burns as a management tool. We've known this for a great length of time, but there was the attitude no fire is the best situation in the national forest. So, I think that without this business of reducing the funding, they probably ought to be upping the funding for State forestry because they've been leading the technology. Mr. Mallow. Thank you for that compliment. Thank you, sir. Mr. Skeen. We don't want to lose that expertise because you're going to teach the Feds how to manage forests. Mr. Mallow. I'm glad you said that. Mr. Skeen. I said it and there ain't much they can do about it. Mr. Mallow. Thank you, sir. Mr. Skeen. We thank you, sir. Albert Hale, President of the Navajo Nation. Welcome. ---------- Thursday, March 20, 1997. NAVAJO NATION WITNESS ALBERT HALE, PRESIDENT Mr. Hale. Good morning, Mr. Chairman. [A discussion in Navajo between Chairman Skeen and Mr. Hale.] Mr. Hale. Mr. Chairman and Members of the subcommittee. Mr. Skeen. We're glad to have you here and welcome. Mr. Hale. Thank you very much. Glad to be here. I appreciate the opportunity to address the issue that's on the table before the subcommittee which is the fiscal year 1998 appropriation for the U.S. Department of Agriculture. Over the past several years, the USDA, at the urging of the Navajo Nation, has made notable progress in developing a cooperative relationship with the Navajo Nation. I recently visited with Secretary Glickman and he affirmed to me that USDA will continue to support the Navajo Nation's participation in USDA programs. Secretary Glickman also committed to visiting the Navajo Nation this spring to learn first-hand about our rural development needs and opportunities. Over the past several years, the USDA--at the strong urging of the Navajo Nation--has made notable progress in developing a USDA/Navajo Nation cooperative relationship. Some of the progress is outlined in our written statement submitted to this subcommittee. In February 1997 the USDA's Civil Rights Action Team issued recommendations based on a series of Listening Sessions held throughout the United States. A Listening Session was held on the Navajo Nation on January of this year. Some of the recommendations from the team include, one, adjust the USDA budget and develop statutory or regulatory changes to eliminate the disparity in funding of the 1890 and the 1994 Land Grant Colleges. Two, target $100 million annually from the Rural Utilities Service Water and Waste Disposal Grant Programs to Indian Nations. Three, increase Environmental Quality Incentive Program funding to $300 million and target $100 million for assistance to minorities and those with limited resources, including farmers, ranchers, and Indian nations. Four, extend and fully fund the Indian Reservation Extension Program at $8 million annually. We fully support the team's recommendations and urge the implementation thereof. I will now highlight several important items that we have requested for inclusion in the fiscal year 1998 budget. First, full funding for the Navajo Community College which is the oldest and largest of the 29, 1994 Tribal-owned and operated colleges. Unfortunately, NCC and other Tribal-owned colleges only acquired land-grant status in 1994. Before acquiring land-grant status, the Tribal-owned colleges have never shared in the land-grant educational programs. The enormous and well documented deficit in all aspects of Native American rural development is, therefore, caused in part by the critical shortage of precisely those knowledge bases and skills which are required for successful planning and implementation of needed rural development. Therefore, the Navajo Nation requests full funding amounts for which the 1994 Land Grant Tribal-Owned Colleges are authorized. Second, due to massive infrastructure deficiencies, geographic isolation and related legal issues, the Navajo Nation and Indian country in general are perhaps the most poverty-stricken areas in the United States. There is little economic development activity and very few jobs. In an effort to reverse this trend, I recently initiated a new economic development plan for the Navajo Nation. This plan includes the creation of a business development council. My goal is to create employment opportunities on the Navajo Nation. Basic infrastructure is essential and critical to such development. The lack of basic infrastructure such as electric, water and sewer lines significantly hampers our ability to attract outside businesses and to foster Navajo entrepreneurs. Welfare reform presents a potential disaster for Indian country if we do not create jobs. On the Navajo Nation we expect over 7,000 Navajos to be looking for jobs in five years. We need the help of the Federal Government and the States and the local governments to create the jobs now. Lastly, based on the Navajo Nation's 1994 proposal for an integrated rural planning and development, which is referred to as the Rural Development 2000 Plan submitted to USDA, and the current changes that are occurring in funding and in funding authorization, the Navajo Nation requests $750,000 to initiate a pilot rural development planning team to be located on the Navajo Nation. The Navajo Nation proposes a holistic approach to rural development, integrating each of the necessary sectors of rural development through comprehensive planning while at the same time providing urgently needed capacity building for the Navajo people. We are convinced that this approach is vastly superior to and far more efficient and cost effective than the existing piecemeal project-by-project focus that constrains USDA's rural development agencies. In conclusion, USDA's cooperative efforts must now be significantly expanded and enhanced with direction from this subcommittee. We request this subcommittee to encourage and direct the USDA to redirect its priorities and staffing to Indian nations. Indian nations have a compelling need for USDA expertise in programs and, sad to say, a demonstrated lack of access to such service. To overcome this inequity the subcommittee must direct necessary funding to ensure that the Navajo people can at last access the important USDA programs, services, and expertise to which they have previously virtually no access. The Navajo Nation wishes to thank the Chairman and the Members of the subcommittee for their leadership and support of these programs. Thank you very much. [Navajo spoken.] [The prepared statement of the Navajo Nation follows:] [Pages 840 - 844--The official Committee record contains additional material here.] Mr. Skeen. [Navajo spoken.] I appreciate the dissertation. Could you bring me up-to-date on what's going on with your NAPE, that's your agricultural production industry out there? I have followed that development for many years, but I haven't heard anything lately. What's the status on NAPE? Mr. Hale. We have developed seven blocks. Mr. Skeen. You have developed how many? Mr. Hale. That will be about 72,000 acres of land that's now being farmed. Mr. Skeen. How many more blocks do you have left? Mr. Hale. We have four more blocks. Mr. Skeen. Four more blocks. Mr. Hale. To go. That's 11,000 acres per block. We also are engaging on developing a french fry plant right there on sight. Mr. Skeen. I knew that you were producing potatoes. Mr. Hale. We're producing potatoes. Mr. Skeen. You're processing them now? Mr. Hale. We want to process them there now, but we're running into the dual taxation problem. Mr. Skeen. Dual taxation? Mr. Hale. The dual taxation where any non-Navajo owned business that operates on the Navajo Nation must be taxed by the state and also by the---- Mr. Skeen. The State and the feds. Mr. Hale. Right. Mr. Skeen. Always get the tax bite. Mr. Hale. Right. I think we've resolved that to some extent. We were informed yesterday that a bill we were supporting in the State legislature in New Mexico was passed. What that does in trying to address dual taxation is it doesn't exempt, it sets a ceiling like, for example, 5 percent. Mr. Skeen. I see. Mr. Hale. Then share within that 5 percent between the nation and the State. So, I think we're moving towards resolution of that issue, at least in New Mexico. That will also enhance our ability to finally realize this french fry project that we're proposing. It's not french fry. It's Navajo fries, excuse me. But we're proposing that project there. Mr. Skeen. I can understand that. If you can do that with potatoes like you do with Navajo fry bread, you've got a real product. Mr. Hale. We certainly would. Mr. Skeen. We're looking to send you some mutton to go along with that. Mr. Hale. We're looking for help from Congress to provide us some capital to do the infrastructure development. Mr. Skeen. The infrastructure development. Mr. Hale. Yes. Mr. Skeen. You've done a great deal in strengthening your Tribal economy--the Navajo's and your leadership. Mr. Hale. I thank you very much. Mr. Skeen. We hope to keep it going. We hope that we can help along the way. I appreciate your recommendation. We thank you very much for being here today. [Navajo spoken.] Mr. Hale. [Navajo spoken.] Mr. Skeen. Ruth Goldstein with American Farmland Trust. Welcome. ---------- Thursday, March 20, 1997. AMERICAN FARMLAND TRUST WITNESS RUTH GOLDSTEIN, FEDERAL POLICY PROGRAM MANAGER Ms. Goldstein. Thank you, Mr. Chairman for this opportunity to testify today. My name is Ruth Goldstein and I am the Federal Policy Program Manager for American Farmland Trust. The American Farmland Trust is a 30,000 member non-profit organization founded to protect our nation's farmland. Since 1980 American Farmland Trust has been working to stop the loss of productive farmland and to promote farming practices that lead to a healthy environment. My written testimony discusses conservation, research, and eduction programs; in particular, the complement of NRCS and FSA programs under the 1996 Farm Bill. These include the CRP, WHIP, CFO, WRP, EQUIP, and Farmland Protection Programs. Fully funded, these conservation provisions of the 1996 Farm Bill can help protect the integrity of the natural resource base upon which farming depends and protect farmland for the multiple environmental benefits it provides; food production, scenic views, open space, and wildlife habitat to name a few. American Farmland Trust supports these programs and funding for the man and woman power to implement them. Please refer to my written testimony which discusses these programs in more detail. I'd now like to highlight the Farmland Protection Program which is a vital part of this conservation tool kit. Every year, hundreds of thousands of acres of our nation's most productive farmland are lost due to urbanization. When urban pressure pushes up the value of agricultural land, the next generation simply cannot afford to continue farming. The Farmland Protection Program in the 1996 Farm Bill encourages States and local communities to expand their own farmland protection efforts by providing federal matching funds. In addition to preserving the food production capability of the land, Farmland Protection Program funds help communities retain the important natural resource conservation benefits provided by farmland. This program was authorized to draw $35 million in CCC funds. When funded in fiscal year 1996 at $15 million this program protected 77,000 acres on more than 200 farms. It created no new bureaucracy, required no additional FTEs. It leveraged funds through 37 State and local farmland protection programs for 17 States. Unfortunately, in fiscal year 1997 this program was capped at $2 million, which is not enough for a functioning program. We strongly urge that you not cap this program in fiscal year 1998. Let it continue to work encouraging action at the State and local level to protect farmlands across the country. Before I close, I would like to note that American Farmland Trust has just completed a new report that Chief Johnson spoke of yesterday. It's called Farming on the Edge and highlights the top 20 most threatened agricultural regions in the path of development. You will find a very comprehensive story on this issue in today's Business Section of the New York Times. It highlights New York State and California in particular. I have provided copies of that article for Members of the subcommittee. Thank you very much for this opportunity to testify. I look forward to working with this committee to ensure the vitality of our nation's farmland and natural resources. [The prepared statement of Ms. Goldstein follows:] [Pages 848 - 853--The official Committee record contains additional material here.] Mr. Skeen. We appreciate your testimony. We appreciate the objectives that you have. It is a serious problem, the transition of urban spoil into productive agricultural land. Somewhere along the line we're going to have to make some determination just how far we can go with that situation or do a better job of classifying the land, leaving those that are agriculturally adept or useful to us to protect them. We appreciate the work that you do. Ms. Goldstein. Thank you, sir. Mr. Skeen. Thank you for being here today. Scott Berg. We welcome you, the American Forest and Paper Association. Your written testimony will be in the record. You may proceed. ---------- Thursday, March 20, 1997. AMERICAN FOREST AND PAPER ASSOCIATION WITNESS SCOTT BERG, DIRECTOR FOREST POLICY RESEARCH Mr. Berg. Thank you, Mr. Chairman. I'm another one of those foresters. I'm with the American Forest and Paper Association. I'm representing our Forest, Science, and Technology Committee here today. Mr. Skeen. You're on the right side. Mr. Berg. Yes. I am. Thank you. I'm not going to read my full testimony, but there are a few key points I wanted to make. Mr. Skeen. Thank you. We appreciate that. Mr. Berg. For sort of a take-home message. I wanted to start out by mentioning that forest crops are the number one agricultural commodity in the nation. We hope that it will increase with changes in the farm subsidies in the Farm Bill Program. We appreciate those changes. It allows forestry to compete more on a level playing field with other agricultural crops. Agriculture really does have a major stake in forestry, research, and education as forestry becomes much more like agriculture over time. Some 60 percent of our total forest land base is actually owned by close to 10 million tree farmers, not the 9 million that the State Forester from Maryland mentioned. It keeps going up. The industry really isn't in a position to do the research and education for those 10 million small land owners. That actually compares with 2 million farmers out there. So, the government really does have an important role in collaborative research. But really what's happening, Mr. Chairman, is the timber supply responsibility has shifted from the public lands to the private lands. There has been a substantial increase in the harvesting on private lands, particularly in the South; a major increase in imports from overseas. In fact, I was a part of the U.S. delegation to a meeting in Chile last year. The Chileans gave us a carved bird recognizing the positive influence that a reduction in our federal Timber Sale Program has had on their timber economy. Our Timber Sale Program here in the U.S. went from about 11 billion board feed down to about three or four today. So, those economies, the Chileans, the New Zealanders, and the other folks that are now exporting wood into the U.S. have really benefitted from that. To add insult to injury, they're using one of our California species, Radiada Pine, to out compete us. At the same time, our private land owners and production forestry in general has been largely abandoned through reprogramming of Forest Service Research and, as the State Forester from Maryland mentioned, the zeroing out of our education program, the Renewable Resources Extension Act. Since we think that government is partly responsible for the crisis that we're currently facing in forestry, we would ask that the Agriculture Appropriations Subcommittee not abandon, and in fact enhance, research and eduction to assist those 10 million small land owners that we, the industry, rely on for our raw material. There are three critical components that I wanted to mention that are in my testimony. One is funding for our forestry schools and colleges through the Cooperative Forestry Research Act. We would ask that at least $21.62 million go for McIntire-Stennis. That program leverages $5 for each one dollar that you folks invest. We think that's a pretty good darn investment for the government. Forestry Competitive Grants through the National Research Initiative reward the best scientist with the best research projects. We're very much supportive of competitive grants at least $109.5 million. We're continuing to try to get the forestry's share of that up by submitting good and sound research projects each year. Then the education of the tree farmers that I talked about, the $4 million in the Renewable Resources Extension Act. So, Mr. Chairman, in conclusion we really need the help of Congress to adjust to our new reality in forestry of this shift from the public lands to the private lands and those 10 million small land owners that are going to have to increase their productivity, and the research investments in education that are going to have to be in place to make sure that we achieve sustainable management of our private lands as the Administration and other folks want us to do. So, the research and education investments on private lands are going to be key investments to the future prosperity of a lot of rural areas in this country that rely on forestry and forest crops, and the sustainability of those resources. Thank you very much for the opportunity to testify and I will answer any questions. [The prepared statement of Mr. Berg follows:] [Pages 856 - 861--The official Committee record contains additional material here.] Mr. Skeen. We thank you. I don't have any questions, but I would like to make this comment. I don't understand the National Forestry Policy we have had for a long time. When you can study what's happened in Europe using forests as a renewable resource, those forests in Europe, Germany, France and some of the mainland areas have been forested and cropped for years, and years, and years. It's a renewable resource. We've absolutely let our national forests decay, rot, become insect infested and so forth. I did, however, see the beginning of learning in the federal sector because the Secretary of Interior was mentioning the other day about using controlled burn fires to remedy some of our problems in the forest. So, that's at least an admission that we're beginning to understand how to handle this renewable resource which we had in such an abundant supply. Now, it relies almost entirely on private sector production. So, we're very interested in what you do. We're interested in watching the philosophy and the change. I think right now we want to keep the research going and we want to keep you folks producing. Thank you for being here today. Mr. Berg. Thank you. I appreciate your help with working with our small land owners through the research and education programs. Mr. Skeen. Well, we may be able to educate through the U.S. Forest Service and others through your medium. Mr. Berg. I hope so. We're trying. Mr. Skeen. Thank you. Kim Wardensky, American Federation of Government Employees, and American Federation of State, County and Municipal Employees. That's a big area. ---------- Thursday, March 20, 1997. AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES AND AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL EMPLOYEES WITNESS KIM WARDENSKY, PRESIDENT, LOCAL 3870 Ms. Wardensky. I will be speaking on behalf of two Unions. Mr. Skeen. We appreciate having you. Welcome. Ms. Wardensky. Thank you. Mr. Chairman and subcommittee Members, my name is Kim Wardensky. I'm the President of AFSCME Local 3870 which represents employees of the Rural Development Headquarters here in Washington. We're testifying today on behalf of both American Federation of Government Employees and American Federation of State, County and Municipal Employees Local 3925 regarding issues which affect both the programs and employees of the former Farmers Home Administration which has been transferred to Rural Development in FSA. I have a number of issues that I would like to cover. I will try to synopsize them. Mr. Skeen. We appreciate that. Your full testimony will be in the record. Ms. Wardensky. Thank you. The first topic I'd like to discuss is direct versus guaranteed loans programs. We've consistently, over the last several years, worked to defend and even to increase the funding of the Section 502 and Section 515 Housing Direct Loans, Farm Operating and Ownership Direct Loans, and the Minority Farmers Outreach Programs, Section 2501 of the 1990 Farm Bill. There is a large unmet need out there for direct farm ownership and operating. We have a three- to five-year waiting list for direct farm ownership loans in most States. We're running out of direct operating loan funds in March of each year. A farmer who is not independently wealthy cannot farm without operating loans for credit. Lack of funding or improper administration of the Farm Credit Program however will put them out of business. The Minority Farmer Outreach Grants are very low cost, yet a very effective program under which Native Americans, historically Black colleges, and community based organizations with a proven track record are funded to do outreach and technical assistance with minority farmers in accessing USDA programs. In those areas where this program has been funded, the loss of Black farm land has actually been slowed down considerably. To continue to slash funding in the direct lending in order to maintain higher funding levels or corporate welfare programs within USDA is bad policy. I would like to discuss multi-family and single family housing just briefly if I can. The Section 502 Single Family Direct Lending Program is the only federal housing program that targets the system to low and very low income home buyers in the rural areas. Since the program's start in 1949, over 1.8 million homes have been financed by the Section 502 Program. Considering that the average income of the Section 502 direct borrower is about $15,000 or 55 percent of the rural median household income, the Guaranteed Loans Program does not work for these individuals and their families. These loans are far too expensive for them to obtain. We respectfully request appropriations for the Section 502 program at least at the fiscal year 1997 levels, preferably at the fiscal year 1994 levels. We can always hope. Maybe they won't get the point messed up this year. Multi-family housing loan programs in the Rural Development mission area at USDA are undergoing reinvention under the guidance of this committee from last year's instructions. The Secretary of Agriculture is also cooperating with the Secretary of HUD to convert expensive 20-year Section 8 housing assistance payments into our rural assistance, rental assistance payments in the Section 515. Previous owners of those units, could request an exception to obtain an adjustment for the HUD rates if they were understated. But there is no incentive for them to request an adjustment for an overly generous fair market share of that. HUD was attempting to remedy that problem, but to no avail. So, it is saving the government quite a number of dollars to convert them over to the Rental Assistance Program. HUD is getting full credit for subsidy savings under Credit Reform Rules while USDA picks up an increased subsidy burden without an effective recognition of the savings overall to the Federal Government. The agencies implementing the multi-family housing reforms will be in a position of meeting the Congressional conditions imposed release of new funds for new construction. Industry interface of automated data to eliminate entering already automated data is being tested. Success in this area should result in significantly improved service to the public and better oversight of program operations. Continued support of adequate funding for multi- family housing projects is critical in meeting the housing needs of rental rural residents. Adequate funding to protect against displacement is essential. Under water and waste, we have some concerns regarding the State Block Grant Program which is a set aside of 5 percent of water and waste grant money which has been proposed in the President's budget. The money will be allocated to the States. These funds can be used for whatever rural development purposes are deemed necessary. We're concerned that with over $4 billion in backlog in water and waste programs, services will not be available to very needy communities and could be used for other rural development programs, not just water and waste. The moniesat the national level can be leveraged at a higher rate. The budget assumes it will only take $9.76 in budget authority to make $100 in program loan level. We doubt that the States could leverage funds anywhere close to that ratio. Due to the small allocations, an average of $1 million per State, the States will receive, funds could only be used for small grants. Now, I'd like to cover some of our employee issues. Our labor unions appreciate the recognition of the leadership of this subcommittee that we can only create a USDA that works better and costs less if we make sure that the proposed changes and their implementation will enhance rather than harm the ability of the front line workers to serve the public in the most effective and efficient manner. Unfortunately, we must report to Congress that most of the Department has failed to adopt this common sense approach. Instead, both our front line employees and the programs we deliver, have suffered from management turf battles. Since USDA management is using your subcommittee as an excuse for their actions, we feel compelled to turn to you, our elected Congressional representatives and ask for some micromanagement of USDA from Congress. Over the past two years our unions have entered into the record of your subcommittee enormous evidence that significant taxpayer savings could be achieved by utilizing federal employees to perform work that is currently being performed by service contractors. During the past 13 years an increasing amount of work which could be performed more effectively by USDA employees has been contracted out, than even performing a cost comparison, in the name of reducing government. If our goal is to build a new USDA that truly works better, then the 11,000 service contracts which use taxpayer dollars to pay contract workers to perform USDA services should also be put on the table for review and reduction whenever it would be more cost effective for federal employees to do the work. We urge the Appropriations Committee to revisit this issue. We urge you to require the Department to conduct cost comparisons on all current and future such service contracts. No more federal employees should be laid off so long as contractors are working for the Department performing work that federal employees can do. Streamlining the middle management bureaucracy. The House Agriculture Committee adopted report language in Section 213 in the final USDA Reorganization Act of 1994 for reductions in the number of Department personnel which stated the Congressional intent that to meet the objectives of improving customer service while reducing cost, the committee expects the Department to maintain the greater possible number of front line workers, both in the field and in Headquarters in administrative support functions. The committee therefore expects the Department to accomplish the required staffing reductions by reducing and streamlining the necessary layers of middle management, supervision, and control. The committee specifically went on to require the department to reach its own goals of supervisory to non-supervisory ratios as outlined in the reorganization proposal submitted to Congress that year. USDA isn't close to those goals. They admit that they have a 1:9 ratio. So, we request the Appropriations Committee enforce the intent of Congress as established by the Authorizing Committee's report language on this matter. The Department should be banned from making any further non-supervisory staff reductions until the number of supervisors has been reduced to a rate of 1:14. Recently, a proposal has surfaced as administrative convergence. I don't know if you've heard of this. In a recent decision memo signed by Rominger, USDA is continuing to make proposals for the abolishment of some or all of our current main frame administrative processing centers; specifically Kansas and St. Louis, to enable development of a common administrative system. These proposals meant nothing more than that managers are too incompetent and turf driven to provide the leadership needed to develop common administrative systems. We are adamantly opposed however to proposals that assume that the only way people can do work together is by being physically located in the same city. This is a 19th Century idea, not a 21st Century idea. In contrast, our Union believes that the idea of consolidating government automation related operations from several locations into big offices in one locality should no longer be seen as the top choice for getting government to work better. It generally leads to hidden costs and lower quality of services because 80 percent of the experienced employees usually take the severance pay and leave the government rather than relocate to the new service center. The House Committee and agriculture report language accompanying Section 105, Section 216 of the final bill, improvement of information sharing, very specifically expresses the intent of Congress in support of this view. We ask for a reiteration of the Appropriations Committee this year. The next issue I'd like to talk about is the County Committee Employment System. The Secretary's Civil Rights Action Team and the Secretary himself have now called for removing the County Committees from personnel matters. This would create one personnel system within USDA instead of two. More importantly, it would establish a clear line of accountability for civil rights and other matters, from the Secretary through the state directors to district directors and county directors. It's not good business practice for our programs or employees to continue to allow its system of service employment at the whim of the County Executive Directors to remain in place, especially when those CEDs are themselves farm loan borrowers or recipients of other USDA programs. It is creating a fairly large conflict of interest which I expect will get worse the longer we allow this two-tier employment system to continue. Delegation of farm credit loan making authority should be restricted to federal employees. In 1994 the Department, OPM, House points of contact and the Agriculture committees reached consensus on these issues and made a commitment that the Farm Credit Federal Employee jobs would remain federal jobs after their transfer to FSA. Despite this commitment, FSA managers, state executive directors are back-filling agriculture credit jobs with employees at the county committees. They have given crash courses in farm credit to these employees and then delegated loan making authority to non-federal county office employees without proper training. If Congress allows this to continue, FSA will be making loans without supervised credit assistance and the Farm Credit Program will eventually be destroyed. Farm Operatingand Ownership Credit is a very different type of program than corn loans and deficiency payments. Operating an ownership loan requires judgment, knowledge, and background of the particular family farm history. The county office employment system is dominated by the local politics of the county committees and not by the financial integrity or compassion of the family farmers. Employees of the county committee are not governed by the FMFIA, EEO, and Civil Rights or Merit Systems laws which govern federal employees. Farm Credit decision making authority is not being granted to the county committees for the same reason it should not be granted to the employees of the county committees. We further request that there should be alignment with the number of agriculture credit offices for their case load. Previously there was one agriculture credit officer and one agriculture credit technician for every 56 farm loan borrowers. That ratio is now in the average case load of 150:200 borrowers. It makes it impossible to adequately perform and supervise credit functions which are necessary to the success of the program. This occurred when the employees were transferred from the former Farmers Home to FSA. There were not enough that were sent over for the Agriculture Credit Teams. Our technicians and the Agriculture Credit Office are overwhelmed in the field. They're unable to provide adequate supervised credit. Finally, we ask that no Farm Service Agency employee be allowed to have a federal farm credit loan. For years FMHA guarded the financial integrity of the Farm Credit Program by ruling that no FMHA employee could receive a farm operating or ownership loan. FSA has abolished this most basic protection against potential conflicts of interest. Unless Congress intervenes to change this policy, the Farm Credit Program will become subject to the same type of abuses that have been reported to the Environmental Working Group report, Fox in the Hen House, as were reported on the former ASCS. This concludes my testimony. I'll be glad to answer any questions. [The prepared statement of Ms. Wardensky follows:] [Pages 868 - 875--The official Committee record contains additional material here.] Mr. Skeen. I appreciate your testimony. We're certainly going to go through it and consider your recommendations. You've brought up some very serious points. We appreciate that very much. Ms. Wardensky. Yes. We look forward to working with you. Mr. Skeen. Thank you for your time. Ms. Wardensky. Thank you. Mr. Skeen. I'd like to take next Dr. James McGuire. Go ahead, sir. ---------- Thursday, March 20, 1997. AMERICAN ASSOCIATION OF STATE COLLEGES OF AGRICULTURE AND RENEWABLE RESOURCES WITNESS DR. JAMES M. McGUIRE, DEAN, COLLEGE OF AGRICULTURE Dr. McGuire. Mr. Chairman, I'm Jim McGuire. Mr. Skeen. Welcome, Jim. Dr. McGuire. Thank you; Dean of the College of Agriculture, Southern Illinois University. I'm here representing AASCARR, the American Association of State Colleges of Agriculture and Renewable Resources. Mr. Skeen. It's not easy to say AASCARR. Dr. McGuire. In fact, when I first became Dean, I asked someone what AASCARR stood for. No one in my office knew. Mr. Skeen. We appreciate you enlightening us as well. Dr. McGuire. I appreciate this opportunity to speak with you this morning about the support for the funding of the higher education programs administered by the USDA. This testimony that I'm giving compliments that testimony which you received on March 4th from the Board of Agriculture of NASULGC. I want to make about four major points to you about the USDA higher education programs. The first point is that we submit that the development of well prepared human capital to strengthen the nation's scientific, professional, and technical work force in support of the food and agriculture industry is critical to the well being of the American people. It's our business at the AASCARR and Land Grant Universities to educate and prepare this human capital. We have well over 90 percent of the four-year baccalaureate students at the AASCARR and Land Grant Universities. The support for all of the USDA higher education programs is important in the development of this human capital. Therefore, we recommend the funding of all of these programs in that office at the levels that are listed in my written testimony. The second point, the Challenge Grants Program is the cornerstone of this USDA higher education program. It enhances and compliments the priorities of all of the other USDA higher education programs. It's therefore, the highest priority of AASCARR to fund these challenge grants. AASCU, the American Association of State Colleges and Universities, with whom we are affiliated and NASULGC have also listed the Challenge Grants Programs as highest priority. These three organizations speak as one voice to you to recommend and ask for $5.35 million for fiscal year 1998 for the Challenge Grants Program in order to expand this program. This would be an increase of $1.35 million over the fiscal year 1997 funding level. There are some characteristics of the Challenge Grants Program that make it so important. It supports and encourages innovative and enriched course materials, teaching technology, and curriculum. It supports and promotes faculty development. Both of those areas are very critical to our education of students. It encourages universities to cooperate on educational enhancement projects to work together in groups and to work also with private industry. The ultimate result of the Challenge Grants Program is better education of traditional and non-traditional students in agriculture; a majority and minority students, including the Native American students, the Hispanics, and the African Americans. Fourth, the Challenge Grants give a big bang for the buck. The federal dollars that are invested in Challenge Grants are matched dollar-for-dollar with non-federal funds by the institutions which receive those grants. The program supplements the basic educational programs of the AASCARR and NASULGC universities. The results of the projects that are funded are shared throughout the entire system for use by all of the universities who desire to use these results. It, therefore, helps to prepare human capital to deliver the important research and extension programs in agriculture, as well as the human capital requirements of all of the food and agriculture industry. For these reasons, we're requesting this $5.35 million for Challenge Grants in fiscal year 1998 and also funding of the other programs at the recommended levels. I want to thank you, Mr. Chairman, for the support that you've given to higher education programs in agriculture and especially the support that you've provided for a long time to this Challenge Grants Program. I'll be very happy to answer any questions. [The prepared statement of Mr. McGuire follows:] [Pages 878 - 888--The official Committee record contains additional material here.] Mr. Skeen. I don't have any questions. I just want to commend you on the work that you're doing. It's your leadership that keeps us running. We appreciate the combination of the two. We'd like to put the money to a good program. If it produces results, that's what we expect. It certainly has in this case. We'll do our best. Dr. McGuire. I appreciate that. Mr. Skeen. We thank you. We've got a vote on. If you don't mind waiting, Dr. Lewis, I'll be right back. I'll go vote and come right back. [Recess.] Mr. Skeen. We're back on the record. Dr. Lewis, welcome. You are with the American Indian Higher Education Consortium. Please proceed. ---------- Thursday, March 20, 1997. AMERICAN INDIAN HIGHER EDUCATION CONSORTIUM WITNESS DR. TOMMY LEWIS, PRESIDENT, NAVAJO COMMUNITY COLLEGE Dr. Lewis. Thank you, Mr. Chairman. I'd also like to greet you in my native tongue. [Navajo spoken.] Mr. Skeen. [Navajo spoken.] Dr. Lewis. My name is Tommy Lewis. I'd like to present some information to you on behalf of the American Indian Higher Education Consortium and the 29 Tribal colleges that comprise the AIHEC Land Grant Institutions. I thank you for this opportunity to share our funding request for fiscal year 1998. Navajo Community College is the largest and oldest of all of the Tribal colleges. We have seven campuses scattered throughout Arizona and New Mexico. I'm honored to be here to respectfully request on behalf of the Tribal college full funding for our four Land Grant Programs. These are $4.6 million for Tribal college endowment; $1.45 million for the Equity Grant Program; $5 million for the Joint 1862, 1994 Institution Extension Program; and $1.7 million for Institution Capacity Building Grants. My remarks will touch on four key points which are discussed in greater detail in my written statement. First, I will provide a brief background on the Tribal colleges and our long awaited inclusion in the Land Grant System. Second, I will discuss the untapped agricultural potential of American Indian lands. Third, I will discuss ways in which the Tribal colleges are working with the Department of Agriculture and State Land Grant Institutions. Fourth, I will describe our program requests for fiscal year 1998. Under background information; since American Indian Reservations became the final lands under the American Flag to receive land grant status in 1994 we had heard very quietly but persistent rumblings that Tribal colleges should not be a part of the Land Grant System because we are not ``true'' Land Grant Institutions. Mr. Chairman, nothing could be further from the truth. Today, 130 years after the enactment of the first Land Grant legislation, Tribal colleges more so than any other institutions truly exemplify the original intent of land grant legislation. The first moral act was enacted in 1862 specifically to bring education to the people and to serve their fundamental needs. The institutions were to ``promote'' education that would be practically applied to meet the economic development needs of that area. In effect, they were to be chartered by the people to serve the people. Mr. Chairman, this is the definition and mission of Tribal colleges. We truly are institutions by, of, and for our people. Twenty-five years ago, the first Tribal colleges were chartered on remote reservations by their respective Tribal governments to be governed by boards of local Tribal people. Today, Tribal colleges serve 25,000 students each year offering primarily two-year degrees with a few colleges offering four- year and graduate degrees. In addition, tribal colleges offer a wide range of community services. Since their inception, Tribal colleges have helped address the problems and challenges of our welfare system. Tribal colleges provide GED and other college preparatory courses probably more than any other community colleges in this country. We have done this because our mission requires us to help move American Indian people toward self-sufficiency and make American Indians productive tax paying members of American society. Despite our many obligations, functions, and notable achievements Tribal colleges are the most poorly funded institutions of higher education in this country. In fact, total funding for the agriculture programs authorized for all 29 of the 1994 Institutions combined, equals approximately the amount the Department of Agriculture gives to just one State Land Grant Institution each year. The third item; although current Land Grant Programs at Tribal colleges are modest, the 1994 authorizing legislation is vitally important to us because of the nature of our land base. Of the 54.5 million acres of land that comprise American Indian Reservations, 75 percent are agricultural lands and 15 percent are forestry holdings. Land Grant funding is our hope for teaching American Indians about new and evolving technology for managing our lands. We are committed to becoming as we were when our forefathers came to this land centuries ago, productive contributors to this nation and the world's agricultural base. The 1994 Institutions are ready to address the challenges of Indian country, but we need this subcommittee's support. Already a firm and growing commitment exist on the part of the Department of Agriculture and mainstream Land Grant Institutions to work cooperatively with us. Last December AIHEC was placed to co-host with USDA a conference on departmental programs. This two-day meeting in Albuquerque, New Mexico gave Tribal college presidents and USDA officials and staff a chance to become better acquainted. In addition to the Albuquerque meeting we have met on several occasions with Deputy Secretary Rominger most recently at AIHEC's annual winter conference here in Washington last month. The Deputy Secretary gave us an update on the status of the memorandum of understanding between the Department and the Tribal colleges which we hope to sign shortly. The MOU which was mandated in the Farm Bill will strengthen and expand our partnership with USDA. We have also developed a strong working relationship with the National Association of State Universities and Land Grant Colleges, NASULGC. Our appropriations request for fiscal year 1998 are extremely modest when compared with the annual appropriation for existing Land Grant Institutions. AIHEC respectfully requests full funding for the four programs. Number one, a $4.6 million endowment fund for the 1994 Land Grant Institutions. This endowment installment remains with the U.S. Treasury and only the interest is distributed to the 1994 Institutions. The Navajo Community College got $13,000 out of this endowment this past year. That is just a small amount of money to do hardly anything with. The first year payment totalled nearly $116,000, which was distributed last fall to the 29 Tribal Land Grant Institutions on a formula basis. Two, the $1.45 million for the Tribal College Educational Equity Grant Program. This program provides $50,000 per the 1994 Institutions to assist in academic programs. Through the funding made available in 1996, my own college, the Navajo Community College established a center for integrated rural development studies. The new center will design and deliver classroom, research, and extension programs in three inter-related fields; community development, economic development, and natural resources management. These three fields are critical to the Navajo well being. My President, Albert Hale, addressed you earlier talking about ways that the Tribal Government would work very closely with the Tribal colleges in delivering some of these training and needs. I wholeheartedly support the statement that President Hale presented to you earlier. I think they're right in line with what we're trying to accomplish through our Land Grant Program. Three, the $5 million Extension Programs; currently the extension services provided by the state on our reservations are inadequate. We are anxious to begin our first year of funding under a new extension program for the remote reservation communities served by Tribal colleges. For fiscal year 1997 Congress appropriated $2 million to begin this Competitive Grants Program which will be administered and coordinated through the 1862 Institutions. For fiscal year 1998 we are requesting a modest funding increase of $3 million to $5 million to the fully authorized level. Four, the $1.7 million Institutional Capacity Building Grant Program. This competitive program which requires a non- federal match would help us strengthen and more fully develop our educational infrastructure. Unlike state institutions that have existed for nearly a century and a half, the 1994 Institutions have basic infrastructure needs. Facility is a real need. I know in my college it's a real matter of concern. In conclusion, Mr. Chairman, we appreciate your longstanding support of Tribal colleges and your commitment to our efforts to bring self-sufficiency to our communities. We look forward to continuing a partnership with you, the Members of your subcommittee, the Department of Agriculture, and the main stream land grant system; a partnership that will bring equal educational, agricultural, and economic opportunities to Native Americans. Thank you very much for your time. [The prepared statement of Dr. Lewis follows:] [Pages 893 - 899--The official Committee record contains additional material here.] Mr. Skeen. Thank you Dr. Lewis for your time. How many students do you have at the Navajo Community College now? Dr. Lewis. Head count wise of all students taking classes, we have about 5,200. Mr. Skeen. It's 5,200? Dr. Lewis. When you convert that to FTE, the number that we submitted to the BIA was about 2,200 students? Mr. Skeen. It's 2,200. Dr. Lewis. Yes; FTE wise. We have seven campuses. Two of them, as you know, are in New Mexico. Mr. Skeen. That's correct. How many did you graduate last year? Dr. Lewis. Last year we graduated 176 students. Out of the 176, 140 were able to transfer into mainstream universities. Mr. Skeen. That's a pretty good percentage. Dr. Lewis. That is a darn good rate. Our retention rate is very high. We keep track of these students. I just ran into a student the other day in Arizona who graduated from the Navajo Community College in 1993. We have a campus over there. She graduated in 1993 with an AA Degree. She transferred to the University of Arizona. She got her Baccalaureate as well as Masters Degree in guidance and counselor. I ran into her the other day at Great Hill High School as a certified school counselor. I think that's a success story right there. Mr. Skeen. Absolutely; a good example. How many of your graduate students go into the economic community outside of the reservation? Dr. Lewis. A large percentage of our students do go off because there is not much back home for them; the infrastructure to put them to work. Mr. Skeen. You're slowly converting that. Dr. Lewis. Definitely, I think so through these kinds of training rather than bringing in outsiders to do these kinds of work for us, we can put our Navajo people in these positions as professional engineers. Mr. Skeen. Your educational system has supported that. Dr. Lewis. Right. We will have our own people take over. That's the hope and dream. Mr. Skeen. For many years. Dr. Lewis. For many years. Mr. Skeen. After all, the Navajo were the greatest agricultural producers for a period of time from the records that we can read from the evidence that was left behind. So, I think that you have a great heritage. Dr. Lewis. Yes. My Navajo people still hold land close to their heart. It's a way of life for us. Mr. Skeen. They're wedded to the land. Dr. Lewis. Yes. Mr. Skeen. We thank you very much for your presentation. Dr. Lewis. Thank you, sir. Mr. Skeen. We will give it very serious consideration. Dr. Lewis. [Navajo spoken.] Mr. Skeen. [Navajo spoken.] That's all we have I believe. We sure appreciate it. Thank you all very much. [The following statements were submitted by individuals unable to attend the hearing:] [Pages 902 - 1243--The official Committee record contains additional material here.] M E M B E R S O F C O N G R E S S __________ Page Bereuter, Hon. Doug.............................................. 681 Coughlin, Hon. R. L.............................................. 811 Emerson, Hon. Jo Ann............................................. 701 Gordon, Hon. Bart................................................ 741 Hall, Hon. T. P.................................................. 669 Hansen, Hon. J. V................................................ 903 Hastings, Hon. Richard ``Doc''................................... 737 Hilliard, Hon. E. F.............................................. 705 Hooley, Hon. Darlene............................................. 763 Hunter, Hon. Duncan.............................................. 654 LaHood, Hon. Ray................................................. 731 Lehman, Hon. William............................................. 798 Lewis, Hon. Ron.................................................. 902 Lucas, Hon. Frank................................................ 709 Meehan, Hon. Martin.............................................. 748 Pallone, Hon. Frank, Jr.......................................... 688 Pomeroy, Hon. Earl............................................... 771 Riggs, Hon. Frank................................................ 756 Shaw, Hon. Clay, Jr.............................................. 695 Watkins, Hon. Wes..............................................419, 779 W I T N E S S E S __________ Page Albin, Dr. R. C.................................................. 1019 Allen, W. R...................................................... 1128 Archer, Dr. D. L................................................. 1093 Ballin, S. D..................................................... 977 Barry, P. J...................................................... 906 Batterson, Dr. T. R.............................................. 256 Beer, K. E....................................................... 240 Benepal, Dr. P. S................................................ 58 Benoit, Harold................................................... 226 Benson, Dr. Dirk................................................. 344 Berg, N. A....................................................... 633 Berg, Scott...................................................... 854 Berne, B. H...................................................... 1002 Birdsall, S. L................................................... 648 Blackman, Peggy.................................................. 1197 Bolusky, B. C.................................................... 331 Branton, Brian................................................... 1035 Brichler, R. J................................................... 95 Brown, R. D...................................................... 991 Bullock, Bruce................................................... 914 Bye, Dr. R. E., Jr............................................... 1027 Cabral, R. J..................................................... 1148 Campion, Dennis.................................................. 912 Carlton, B. C.................................................... 926 Carter, David.................................................... 448 Chaikin, Steve................................................... 236 Chew, Dr. Ken.................................................... 204 Chicoine, D. L.................................................914, 919 Clark, Les....................................................... 1148 Cline, K. E...................................................... 243 Cochran, Mark.................................................... 906 Connealy, Michael................................................ 935 Cousins, R. J.................................................... 113 Croft, Richard................................................... 238 Croker, K. A..................................................... 949 Curl, Dr. S. E................................................... 727 Dewey, W. F...................................................... 246 Dixon, M. A...................................................... 995 DuMelle, Fran.................................................... 977 Dunlap, Jim...................................................... 1177 Faga, Betsy...................................................... 1207 Fender, D. H..................................................... 1145 Fore, T. H., Jr.................................................. 960 Frank, Billy..................................................... 621 Gainer, Walter................................................... 373 Galvin, Mark..................................................... 943 George, Mel...................................................... 914 Geringer, Jim.................................................... 1006 Glass, Michael................................................... 398 Goldstein, Ruth.................................................. 846 Goss, Murial..................................................... 811 Graham, L. T..................................................... 1045 Green, John...................................................... 419 Greenstein, Bob.................................................. 327 Guest, R. T...................................................... 1054 Gunnerson, Chuck................................................. 1108 Hale, Albert..................................................... 837 Harper, Dr. David................................................ 344 Harrison, Dr. K. E............................................... 263 Hawk, C. T....................................................... 155 Heichel, G. H.................................................... 919 Helle, Aggie..................................................... 1219 Hershberger, W. K................................................ 248 Hiler, E. A...................................................... 557 Hocker, Jean..................................................... 1242 Holmer, A. F..................................................... 492 Holt, D. A....................................................... 914 Hood, Kenneth.................................................... 1040 Hout, Eldon...................................................... 1133 James, Harlan.................................................... 613 Jefferson, Merle................................................. 616 Jenks, Eloise.................................................... 410 Johnson, Roger................................................... 965 Johnston, K. D................................................... 363 Jones, R. G...................................................... 274 Keen, Jack....................................................... 431 Kenny, M. P...................................................... 1148 Kirtland, J. C................................................... 317 Kleine, M. A..................................................... 1074 Knudson, Jeff.................................................... 943 Krepcho, David................................................... 798 Lacy, Dr. W. B................................................... 49 Lassoie, Dr. J. P................................................ 60 Lawless, T. L.................................................... 952 Layman, Dr. D. K................................................. 66 Lee, Dr. Cheng-Sheng............................................. 231 Levine, Dr. I. A................................................. 266 Lewis, Dr. Tommy................................................. 889 Lieberman, Laura................................................. 540 Liss, Cathy...................................................... 500 Long, G. T....................................................... 547 Lynn, N. B....................................................... 924 Maguire, John.................................................... 1113 Maizel, M. L. S.................................................. 588 Mallow, Jim...................................................... 829 Maselli, S. J.................................................... 440 Matoian, Richard................................................. 953 Maurer, Teresa................................................... 382 McGuire, Dr. J. M..............................................876, 914 McMillan, S. P................................................... 1238 Menvielle, J. P.................................................. 645 Minor, Samuel.................................................... 22 Mitchell, M. J................................................... 251 Mitchell, R. L................................................... 914 Molseed, Richard................................................. 285 Morehouse, David................................................. 267 Mott, A. T....................................................... 1090 Myers, L. W...................................................... 217 Nell, Dr. Terril................................................. 70 Nelson, Christian................................................ 254 Netterville, Linda............................................... 955 Notar, R. C...................................................... 457 O'Neal, J. F..................................................... 484 Owens, Dr. J. C.................................................. 31 Pacelle, Wayne................................................... 170 Parsons, J. E.................................................... 213 Payne, Dr. T. L.................................................. 45 Peterson, R. M................................................... 601 Raab, G. G....................................................... 461 Raftopoulos, Steve............................................... 1049 Ramos, Dr. S. J.................................................. 181 Rapoza, R. A..................................................... 389 Redden, G. T..................................................... 268 Reheis, C. H..................................................... 1148 Robertson, T. J.................................................. 1024 Runnels, Bruce................................................... 1169 Rutta, R. L...................................................... 1154 Sanders, Ted..................................................... 914 Sazama, Kathleen................................................. 508 Schram, S. G..................................................... 1065 Searle, Brent.................................................... 943 Semmens, K. J.................................................... 221 Siedow, J. N..................................................... 10 Silverglade, Bruce............................................... 1035 Skees, J. R...................................................... 568 Smith, Dr. D. A.................................................. 261 Spencer, Dr. Richard............................................. 233 Stephens, Norm................................................... 924 Stroope, Jerry................................................... 107 Stukel, J. J...................................................914, 919 Stutzman, Curtis................................................. 259 Sullivan, J. H................................................... 1071 Sullivan, Patrick................................................ 943 Suttie, J. W..................................................... 79 Taron, Dr. Joe................................................... 779 Taylor, Gary..................................................... 601 Terski, Jim...................................................... 356 Thames, Dr. S. F................................................. 1079 Thompson, Mary................................................... 130 Thor, Dr. Eric................................................... 943 Tucker, C. S..................................................... 224 VanDe Hei, Diane................................................. 1143 Vidaver, A. K.................................................... 816 Vladimiroff, Christine........................................... 1016 Walker, Dr. W. W................................................. 988 Wardensky, Kim................................................... 862 Weidemann, Dr. Greg.............................................. 1 Weist, M. R...................................................... 297 Wells, Faye...................................................... 477 White, Dr. J. M.................................................. 54 Whitener, Bob.................................................... 613 Wilder, Gordon................................................... 271 Williamson, Jerald............................................... 229 Wilson, Linda.................................................... 811 Wyont, Jean...................................................... 659 Yopp, Dr. J. H................................................... 1010 Ziller, S. A..................................................... 145 Zimmerman, G. R.................................................. 1224 ORGANIZATIONAL INDEX ---------- Page Academic Programs Committee on Organization and Policy (NASULGC). 54 Ad Hoc Coalition on Public Law 480............................... 317 American Association of Blood Banks.............................. 508 American Association of Crop Insurers............................ 95 American Association of Nurserymen............................... 331 American Association of Retired Persons.......................... 995 American Association of State, Colleges of Agriculture and Renewable Resources............................................ 875 American Beekeeping Federation, Inc.............................. 960 American Cancer Society.......................................... 130 American Farm Bureau Federation.................................. 1160 American Farmland Trust.......................................... 845 American Federation of Government Employees...................... 862 American Federation of State, County, and Municipal Employees.... 862 American Forest and Paper Association............................ 854 American Heart Association....................................... 977 American Honey Producers Association, Inc........................ 107 American Indian Higher Education Consortium...................... 889 American Lung Association........................................ 977 American Physiological Society................................... 155 American Sheep Industry Association.............................. 1049 American Society for Microbiology................................ 816 American Society for Nutritional Sciences........................ 113 American Society for Pharmacology and Experimental Therapeutics.. 949 American Society of Plant Physiologists.......................... 10 American Water Works............................................. 1071 American Zoo and Aquarium Association............................ 1226 Association of Metropolitan Water Agencies....................... 1143 Association of Research Directors, Inc. (NASULGC)................ 58 Baystate Health Systems.......................................... 1090 Board on Human Sciences (NASULGC)................................ 66 California Grape and Tree Fruit League........................... 953 California Industry and Government Coalition on PM-10/PM-2.5..... 1148 Center for Budget Priorities..................................... 327 Center for Science in the Public Interest........................ 1035 Chocolate Manufacturers Association.............................. 1045 City of Gainesville, Florida..................................... 1135 Coalition for Food Aid........................................... 297 Coalition of Agricultural Mediation Programs..................... 943 Coalition of EPSCOR States....................................... 1 Coalition to Promote U.S. Agricultural Exports................... 1121 Coastal States Organization...................................... 1133 Colorado River Basin Salinity Control Program.................... 1224 Colorado River Salinity Control Program.......................... 1006 Commodity Supplemental Food Program.............................. 1024 Consortium for International Earth Science Information Network... 1065 Consortium of Social Science Associations........................ 568 Council for Agriculture, Research, Extension and Teaching........ 22 Experiment Station Committee on Organization and Policy (NASULGC) 45 Extension Committee on Organization and Policy (NASULGC)......... 49 FDA-NIH Council.................................................. 540 Federation of American Societies for Experimental Biology........ 79 Florida State University......................................... 1027 Florida Sugarcane League......................................... 962 Friends of the U.S. National Arboretum........................... 811 Golden Gate University........................................... 1074 Grazing Lands Conservation Initiative National Steering Committee 1219 Grocery Manufacturers of America................................. 145 Guld Coast Research Laboratory Consortium........................ 988 Health Industry Manufacturers Association........................ 461 Holden's Foundation Seeds, Inc................................... 344 Humane Society of the United States.............................. 170 Illinois Groundwater Corsortium.................................. 1010 Imperial County Whitefly Management Committee.................... 645 International Association of Fish and Wildlife Agencies.......... 601 Kotasys Project.................................................. 285 Land Trust Alliance.............................................. 1242 Lumni Indian Business Council.................................... 613 Metropolitan Water District of Southern California............... 1060 Minor Crop Farmer Alliance....................................... 1103 National Association of Farmer Elected Committeemen.............. 1040 National Association of Farmers' Market Nutrition Programs....... 1238 National Association of Home Builders............................ 398 National Association of Meal Programs............................ 955 National Association of Professional Forestry Schools and Colleges (NASULGC)............................................. 60 National Association of Resource Conservation and Development Councils....................................................... 1197 National Association of State Foresters.......................... 829 National Association of State Universities and Land-Grant Colleges....................................................... 31 National Association of University Fisheries and Wildlife Programs....................................................... 991 National Association of WIC Directors............................ 410 National Center for Appropriate Technology....................... 382 National Center for Resource Innovations......................... 588 National Center for Tobacco-Free Kids............................ 1086 National Congress of American Indians............................ 1128 National Cooperative Business Association........................ 448 National Corn Growers Association................................ 1202 National Cotton Council of America............................... 1113 National Council of Farmer Cooperatives.......................... 1210 National Dry Bean Council........................................ 1229 National Easter Seal Society..................................... 1154 National Electrical Manufacturers Association.................... 983 National Family Farm Coalition................................... 659 National Food Processors Association............................. 363 National Pharmaceutical Alliance................................. 547 National Potato Council.......................................... 1108 National Rural Housing Coalition................................. 389 National Rural Telecom Association............................... 484 National Telephone Cooperative Association....................... 477 National Utility Contractors Association......................... 373 National Watershed Coalition..................................... 274 Nature Conservancy............................................... 1169 Navajo Nation.................................................... 837 New Mexico Rural Water Association............................... 1177 North Dakota Department of Agriculture.........................969, 972 Northwest Indian Fisheries Commission............................ 613 Oklahoma Agricultural Experiment Station......................... 727 Oklahoma Cooperative Extension Service........................... 727 Organization for the Promotion and Advancement of Small Telecommunications Companies................................... 1030 Pharmaceutical Research and Manufacturers of America............. 492 Pickle Packers, International.................................... 356 Pottawatomie Development Authority............................... 779 Protein Grain Products International............................. 1207 Regional Aquaculture Center...................................... 204 Rocky Mountain Farmers Union..................................... 451 Rural Community Insurance Services............................... 935 Rural Enterprises of Oklahoma, Inc............................... 419 Rutgers University Blueberry and Cranberry Research and Extension Station........................................................ 931 Rutgers University Plant Science and Biotechnology Complex....... 926 Rutgers University, IR-4 Project................................. 1054 Second Harvest................................................... 1016 Society for Animal Protective Legislation........................ 500 Society of American Florists..................................... 70 Soil and Water Conservation Society.............................. 633 South Florida Daily Bread Food Bank.............................. 798 Southern Illinois University..................................... 914 Sustainable Agriculture Coalition................................ 1172 Texas A&M Research Foundation.................................... 557 Texas Tech University............................................ 1019 Turfgrass Producers International................................ 1145 U.S. Agricultural Export Development Council.................1097, 1214 U.S. Apple Association........................................... 1137 United States Telephone Association.............................. 431 University of Florida Aquatic Foods Products Program............. 1093 University of Illinois..........................906, 912, 914, 919, 924 University of Missouri........................................... 914 University of Puerto Rico........................................ 181 University of Southern Mississippi............................... 1079 Western Rural Telephone Association.............................. 440