Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 10, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
15282 words
HEADLINE: PREPARED STATEMENT BY
DAN
GLICKMAN
SECRETARY OF AGRICULTURE
BEFORE THE HOUSE
APPROPRIATIONS COMMITTEE
AGRICULTURE, RURAL DEVELOPMENT, FDA
AND RELATED
AGENCIES SUBCOMMITTEE
BODY:
Mr. Chairman,
Members of the Committee, it is a privilege to appear before you to discuss the
2000 budget for the Department of Agriculture (USDA).
Even though the
Federal Budget is now in surplus for the first time in 30 years, USDA's 2000
budget is still governed by the constraints put in place by the Balanced Budget
Act of 1997. Thus, we are faced with another year of very tight funding.
However, we have tried to provide the necessary resources that will enable USDA
to achieve the basic goals and objectives of its strategic plan as well as focus
on some key Presidential initiatives on food safety, nutrition and food
assistance, global change, and conservation and the environment. And, as the
President indicated in his State of the Union message, we must work with
lawmakers of both parties to create a farm safety net that will include crop
insurance reform and farm income assistance.
The Presidential initiatives
that involve participation of USDA agencies, include:
- A continuing Food
Safety initiative for improving the Federal food inspection system from
farm-to-table, through increased inspection, expanded research and consumer
education, better surveillance of foodborne illness, and improved Federal,
State, and local coordination.
- A Lands Legacy initiative
to develop a national program to protect great places and to provide the tools
for localities, States, Indian tribes, and non-profit corporations and
cooperatives to plan Smart Growth, open space preservation, and land use
management. $268 million of the $1 billion governmentwide program would be
provided to USDA.
- A Global Change Research initiative aimed at
investigating mitigation tactics to minimize the adverse effects of climate
change on agricultural production, and inventory soil carbon levels, research
how soils absorb carbon, and expand biomass research.
- A Climate Change
Technology initiative to develop technology for predicting and adapting
agricultural production to global change impacts and to demonstrate and test
various greenhouse gas mitigation strategies and monitoring mechanisms.
- A
Clean Water Action Plan to improve water quality on the Nation's forested lands
and to address water quality issues, such as waste management and grazing
practices on private lands. It also includes new research on hypoxia,
pfiesteria, and related problems.
The budget also focuses resources on the
following priority areas:
- Providing adequate funding for Food Stamp, Child
Nutrition, and WIC Programs, increased funding for program integrity
initiatives, a new gleaning and food recovery initiative, a school breakfast
research pilot, and restoration of food stamp benefits for elderly immigrants.
- Meeting the urgent needs for water and housing in rural communities.
-
Supporting research to improve the productivity and competiveness of our
farmers, to help solve environmental problems and to provide safe, nutritious
food for all Americans.
- Strengthening our risk management programs,
providing small farm assistance, and modernizing farm program delivery.
-
Expanding domestic and overseas markets through aggressive promotion and a
reduction in impediments and restrictions trade.
- Carrying out an
aggressive civil rights policy to correct past weaknesses and fairly implement
new program proposals.
The discipline imposed on the 2000 budget has forced
us to make difficult decisions to restrain, reduce, and redirect resources to
focus on the priority goals we established. We again propose user fees and
contain and absorb certain costs. We are continuing to scrutinize our employment
and business practices. As a part of the Department's continuing reorganization,
we are implementing a field office streamlining plan which collocates the
county-based agencies in one- stop USDA Service Centers and to consolidate
administrative support functions in a new Support Services Bureau and modernize
program delivery. We are implementing a common computing environment for these
agencies to optimize the use of data and equipment and improve our efficiencies
across the agencies. These efforts, combined with program reductions and reforms
taken in prior years, have made a significant positive contribution to the
current favorable Federal budget situation.
The President's budget proposes
$55.1 billion in budget authority for 2000 for USDA compared to a current
estimate of $67.5 billion for 1999. Budget authority for discretionary spending,
which accounts for about 28 percent of USDA's total budget authority, declines
from $15.8 billion in 1999 to $15.2 billion in 2000. The request before this
Committee for discretionary budget authority is $13.2 billion.
The budget
again proposes legislation that could affect the appropriation for the
Department, including user fees for the Food Safety and Inspection Service; the
Animal and Plant Health Inspection Service; and the Grain Inspection, Packers
and Stockyards Administration. This proposed legislation will be sent to the
authorizing committees, and the request before this Committee is not adjusted
for the passage of this legislation. Upon enactment of fee authorizations, we
would forward you our revised appropriation request. However, the appropriations
request will include a proposed assessment on tobacco marketings similar to the
expiring marketing assessment established by the Budget Reconciliation Act of
1993.
The budget also proposes legislative changes in some mandatory
programs, e.g., restoring food stamp benefits to elderly legal immigrants,
reauthorizing and funding a range of conservation programs, providing mandatory
funding for the Foreign Market Development Cooperator Program, providing rural
development grants and direct Treasury rate electric loans.
I also want to
emphasize the importance that the President and I have placed on USDA civil
rights issues; this priority is reflected in the budget. The President's budget
provides the necessary funding to continue to carry out the recommendations of
the Civil Rights Action Team (CRAT) as well as the recommendations of the
National Commission on Small Farms which support our civil rights agenda.
FARM AND FOREIGN AGRICULTURAL SERVICES
The mission of the Farm and
Foreign Agricultural Services area to secure the long-term vitality and global
competitiveness of American agriculture, has surely been tested by the tough
times farmers and ranchers are now facing. While planting flexibility provisions
of the Federal Agriculture Improvement and Reform Act of 1996(the 1996 Act),
strong export and trade policy programs, and other program initiatives already
underway have helped many crop and livestock producers, it is clear, as the
President indicated, that the farm safety net still needs some reinforcement.
The Administration and Congress worked together last year to support
farmers in areas hit hard by declining prices and successive years, of reduced
yields. This year we will continue our efforts to expand and improve programs
which help producers manage risk, and we look forward to working with Congress
to further reform the insurance programs for crop and livestock producers. We
are also working hard to expand opportunities for small farmers and others who
traditionally have been under served in our farm programs. The class action
settlement with African American farmers I announced last month closes a painful
chapter in USDA's history but does not complete our civil rights initiative. We
still have more to do to ensure all of our customers and our employees are
treated with dignity and respect.
The weakening farm economy has challenged
our efforts to improve customer service while improving efficiency in the Farm
Service Agency (FSA) and the other county-based conservation and rural
development agencies. While additional funding provided in the Agriculture,
Rural Development, Food and Drug Administration and Related Agencies
Appropriations Act, 1999 (the 1999 Act) allowed FSA to maintain current staffing
levels, the increasing demand for Commodity Credit Corporation (CCC) Marketing
assistance loan programs and disaster assistance has dramatically increased
workload and placed new burdens on county staff. The higher workload,
particularly for the marketing assistance programs, is projected to continue at
least through 2000. The need to find new ways of doing business in the service
centers is underscored by findings of the independent study of county-based
agencies conducted by Pricewaterhouse Coopers. The recently completed study
recommends further steps to improve the efficiency of program delivery and field
office operations of the county-based agencies. It also supports on-going
efforts by the Department to streamline offices, establish a common computing
environment, converge administrative services. We are currently evaluating the
results of this study to determine how best to take it into account in our on-
going efforts.
Farm Service Agency
FSA Federal and county staffing since
1993 has declined by about 6,000 staff years, from over 22,500 staff years at
the end of 1993 to about 16,400 staff years at the end of 1998. Additional funds
appropriated for 1999 in the 1999 Act have allowed the agency to avoid
reductions- in-force this year and to hire additional temporary staff. The
proposed program level in 2000 for salaries and expenses of $1 billion is
estimated to support a ceiling of 5,745 Federal staff years, and 10,048
non-Federal county staff years, assuming legislation is enacted allowing for CCC
to cover a portion of FSA's computer operations and maintenance costs for the
farm programs.
Farm Loan Programs
Traditionally, USDA's role in the farm
credit market has been to be the "lender of last resort." Currently, the
Department supplies only about 5 to 6 percent of the credit used by farmers --
the rest is supplied by private lenders, including the federally-chartered Farm
Credit System. However, the Department's role is important because it provides
opportunities for farmers who experience financial difficulty to stay in
business, and fills credit gaps, particularly for socially disadvantaged and
beginning farmers.
Because the programs operate at the margin of the credit
market, they are vulnerable to changes in market conditions -- and sometimes it
is very difficult to predict changes in demand for program assistance. Right
now, there is a great deal of uncertainty as to the impact recent declines in
farm prices and income may have on repayments of past debts and the willingness
of private lenders to make new loans. Even small changes in these factors can
have a proportionally larger impact on the number of applicants seeking program
assistance and the amount of their requests.USDA is keeping a very careful eye
on the situation as it develops, not only for year 2000, but also for meeting
the more immediate needs in 1999.
The 2000 budget request reflects a fairly
optimistic projection -- one that envisions a reasonably good supply of farm
credit provided by private lenders. The Administration believes that this is a
good starting point. But, I will not hesitate to request additional funding if
conditions deteriorate and there is evidence that additional program assistance
is needed.
Specifically, the budget request includes about $3 billion in
farm loans and guarantees -- slightly more than the $2.8 billion available for
1999. Because interest rates continue to decline, thereby reducing the subsidy
costs, the higher program level for 2000 can be supported with far less budget
authority than was necessary in 1999 ($77.3 million compared to $121.1 million).
For farm operating loans, the 2000 budget includes $1.7 billion in
unsubsidized guarantees, $500 million in direct loans, and $97 million in
subsidized guarantees. This mix reflects a shift to more unsubsidized
guarantees. Favorable interest rates should help more farmers qualify for such
credit and USDA's recent publication of a final rule for streamlining the
guaranteed loan program and establishing a preferred lender program should
encourage private lender participation. For farm ownership loans, the 2000
budget includes $128 million in direct loans, compared to $86 million available
for 1999, and $431 million for unsubsidized guarantees, which is about the same
as 1999.
In addition, the 2000 budget includes $100 million in loans for the
boll weevil eradication program and $53 million in emergency loans. The
Administration plans to review gaps in the emergency loan program which deny
credit to farmers and agriculture-related businesses that is otherwise available
to non-farmers through the Small Business Administration (SBA). It intends to
propose legislation to eliminate such gaps.
The 2000 budget also includes $4
million in grants for the State mediation program, double the amount available
in 1999. This program provides a valuable service in resolving disputes over the
administration of the farm credit and other USDA programs.
Commodity Credit
Corporation
Changes over the last decade in commodity, disaster, and
conservation programs have dramatically changed the level, mix, and variability
of CCC outlays. CCC outlays are projected to increase from $10 billion in 1998,
to $18 billion in 1999, and then to decline again to about $12 billion in 2000.
The increase in spending between 1998 and 1999 is accounted for by higher
marketing assistance loan program outlays, expenditures related to the
President's International Food Aid initiative, and by emergency spending
authorized for disaster assistance programs authorized by the 1999 Act. The
disaster assistance provision expenditures authorized in the 1999 Act total
nearly $5.9 billion, including $3.1 billion for market loss payments, $2.4
billion to compensate producers for crop losses, and $0.2 million for livestock
feed assistance. In 2000, commodity program outlays account for about
three-fourths of the total CCC outlays, with production flexibility contract
payments and loan deficiency payments accounting for nearly all of the commodity
program outlays.
Conservation program outlays account for most of the
remaining CCC expenditures in 2000. The 1996 Act authorized direct CCC funding
for the Conservation Reserve Program (CRP) administered by FSA and several new
conservation programs administered by the Natural Resources Conservation Service
(NRCS).
CRP provides landowners annual payments and half the cost of
establishing a conserving cover in exchange for retiring environmentally
sensitive land from production for 10 to 15 years. The 1996 Act authorized the
program through 2002 and set maximum enrollment in the program at 36.4 million
acres. About 30.3 million acres were enrolled in the program at the end of 1998.
The 2000 budget assumes nearly 6 million acres will be accepted in the 18th
signup, conducted in October through early December 1998. In addition, the
continuous, non-competitive 17th signup has been underway to enroll land in
filter strips, riparian buffers, and similar special conservation practices.
Other conservation programs funded by CCC but administered by NRCS include the
Wetlands Reserve Program (WRP), the Environmental Quality Incentives Program
(EQIP), the Wildlife Habitat Incentives Program (WHIP), and the Farmland
Protection Program (FPP). WRP offers landowners the opportunity to receive
payments for restoring and protecting wetlands on their properties.
For
2000, approximately 200,000 acres are proposed for enrollment resulting in a
cumulative WRP acreage enrollment of 975,000 acres, the maximum enrollment level
mandated by law. This program is a cornerstone supporting the Clean Water Action
Plan. EQIP gives producers incentives to implement long-term comprehensive farm
plans and the budget proposes to increase the annual program level from $174
million in 1999 to $300 million beginning in 2000. WHIP provides cost- share
assistance to landowners to implement management practices improving wildlife
habitat and FPP provides for the purchase of easements limiting nonagricultural
uses on prime and unique farmland. Under proposed legislation, WHIP and FPP
would be funded annually through CCC at $10 million and $27.5 million,
respectively, beginning in 2000. FPP is also slated to receive $50 million in
discretionary funding from the Vice President's new Lands Legacy
initiative.
Finally, provisions of the Commodity Credit Corporation
Charter Act (the CCC Charter Act) limit CCC expenditures for computer equipment
and cap, at the 1995 expenditure level, total allotments and transfers to State
and Federal agencies under Section 11 of the Act for administrative support
services. These provisions impose significant restrictions on the availability
of CCC funds for transfers and reimbursable agreements used to fund conservation
technical assistance and other support services for the conservation, commodity,
and export programs.
By 2000 the amount available under the computer cap
will be nearly exhausted preventing needed investment in our streamlining and
Service Center initiatives and prohibiting the Department from investing in
much-needed technology for business process reengineering efforts. USDA needs
these investments to improve service to our customers and reduce program
delivery costs.
The budget for 2000 includes a legislative proposal to raise
the limit on CCC expenditures for computer equipment by a total of $105 million
for the period 2000 through 2002. The increase in the multi-year cap will cover
a portion of FSA's computer operations and maintenance costs for the farm
programs, and will be offset by an equivalent reduction in authorized spending
for the Export Enhancement Program (EEP). Additional reductions in EEP will be
proposed to offset increased spending for EQIP and to offset proposed CCC
funding for the Foreign Market Development Cooperator Program and for a "quality
samples" proposal to boost the promotion of U.S. exports. Risk Management Agency
The need for supplemental funding in the 1999 Act for production losses and
price declines in the farm economy certainly provides a chilling example of
shortfalls in the program. Nonetheless, the facts are that since the 1994 reform
of the crop insurance program, producers have had the opportunity to obtain
protection against production losses -- free of cost, except for a processing
fee, for catastrophic losses and at a subsidized rate for higher levels of
coverage. Over 60 percent of insurable acres has been covered. There could be a
substantial increase in participation in this crop year due to an additional 30
percent subsidy of premium rates that is being provided as part of the 1999
supplemental funding.
A key element in the success of the crop insurance
program is the partnership with the private insurance industry, which not only
delivers the program but shares in the risk. This partnership has resulted in
innovative changes, such as the development of revenue insurance. There are 17
private insurance companies of various sizes participating in the program. They
provide delivery, mostly through their own sales agents who work on a commission
basis. Loss adjustment is usually done by independent contractors. Companies are
reimbursed at a rate of 24.5 percent of premium, which is the maximum fixed by
law. They also may receive underwriting gains for favorable loss experience.
Within USDA, the program is administered by the Risk Management Agency (RMA)
and is carried out through the Federal Crop Insurance Corporation which has a
Board of Directors composed of both Government and private sector members.
Legislation enacted last year authorized the shift of delivery expenses paid
to private companies from discretionary to mandatory spending, which also
includes premium subsidy and other program costs. The 2000 budget requests an
appropriation of "such sums as necessary" for the program's mandatory spending.
Such an appropriation is similar to previous years' appropriations, and provides
the assurance of full funding for increases in sales volume and potential
losses.
For discretionary spending, which includes salaries and expenses for
RMA staff, the budget requests $71 million -- an increase of $7 million over
1999. This increase would allow RMA to strengthen its efforts in research and
development, to extend its risk management education program, and to enhance its
civil rights activities and to provide public outreach.
The Administration
intends to continue working on improving the crop insurance program. It believes
that there is widespread support for the program because producers appreciate
the assurance of risk protection the program provides rather than the
uncertainty of ad hoc disaster assistance. Further, it believes that such
protection offered on an actuarially sound basis, with producers sharing in the
cost, is consistent with production efficiency. The Administration will do
everything possible to encourage program participation, to correct any
inequities in the structure of premium rates, yield guarantees, or other program
provisions, to make the program user-friendly for companies and producers alike,
and to facilitate new product development and other program innovations. As a
strong first step in improving and energizing the program, last year's emergency
supplemental has allowed us to make a $400 million down payment this year in
helping farmers meet their crop insurance needs. These funds will be used to
reduce 1999 insurance premiums by 30 percent.
The Administration stands
ready to work with the Congress on improving the safety net for farmers. We have
already announced the Administration's principles and preliminary proposals for
strengthening the farm safety net by reforming the crop insurance program and we
plan to hold 3 regional forums around the country to receive input from farmers
and other interested parties. A white paper on the subject can be viewed at the
USDA website on the internet. Through the forums and discussions with Congress,
the Administration intends to build upon our proposals to forge a bipartisan
agreement on crop insurance reform.
International Trade and Export Programs
Developments in overseas markets during the past year have certainly
demonstrated that the health of the American farm economy is inextricably linked
to the global economy. As markets in Asia, Latin America, Russia, and elsewhere
experienced financial turmoil and their imports of food and agricultural
commodities were cut back, the effects of those developments were felt
throughout rural America.
Strong export markets are an important component
of the agricultural safety net, and we are committed to helping our farmers and
ranchers broaden their access to overseas markets and maximize export sales.
Faced with the challenges posed by last year's disruptions in global markets, we
have responded aggressively by utilizing our export program authorities to
ensure the continued flow of U.S. agricultural exports. We have expanded
substantially the level of CCC export credit guarantees made available to
markets in Asia, which otherwise would have been unable to obtain financing for
their food and agricultural imports. As a result, sales registrations under the
guarantee programs exceeded $4 billion in 1998, an increase of 40 percent above
the previous year.
In July, President Clinton announced his Food Aid
Initiative under which the United States is providing as much as 5 million
metric tons of wheat and wheat products to assist needy countries. Moreover, we
have developed a package of food assistance for Russia, which will provide over
3 million metric tons of commodities, once fully implemented.
We also have
continued our efforts to open and expand markets through a wide range of trade
policy activities. For example, last February the United States and Taiwan
signed a market access agreement which provides for Taiwan to lift its import
bans and allow access for U.S. pork, poultry, and variety meats. Upon Taiwan's
accession to the World Trade Organization, Taiwan will cut tariffs and open
tariff-rate quotas on numerous agricultural products.
We continue to prepare
for the new round of multilateral trade negotiations which is set to begin later
this year and presents an opportunity to further strengthen disciplines on
agricultural trading practices. We are pursuing market opening agreements on a
regional basis as well, including negotiations for the Free Trade Area of the
Americas and within the Asia Pacific Economic Cooperation forum.
And, we
continue to respond to the growing challenges posed by technical barriers to
trade, such as sanitary and phytosanitary barriers that are not scientifically
based.
In order to ensure we are able to continue these activities and our
export promotion objectives can be achieved, our budget proposals provide an
overall program level of nearly $6.5 billion for USDA's international programs
in 2000. For the CCC export credit guarantee programs, the largest of our export
activities, the budget includes program levels of $4.7 billion for 1999 and $4.5
billion for 2000. These levels continue the higher level of guarantee
programming which was established last year in response to developments in Asia.
However, the actual level of guarantees to be issued will not be limited by the
budget estimates, but instead will be determined by market conditions and
program demand.
The Department carries out a number of market promotion
programs which play a crucial role in efforts to develop and expand overseas
markets. The Market Access Program (MAP) has been particularly instrumental in
helping small and new-to-market companies build new markets overseas. To further
those efforts, all MAP assistance for brand promotions is now reserved for small
businesses and cooperatives. For 2000, the budget provides funding for MAP at
the maximum authorized level of $90 million, which is unchanged from 1999.
The Foreign Market Development Cooperator Program, a mainstay of USDA export
promotion efforts since 1954, provides cost-share assistance to nonprofit
commodity and agricultural trade associations to support market development
activities designed to remove long-term impediments to increased U.S. trade.
Beginning in 2000, the budget proposes that the Cooperator Program be funded by
CCC rather than the FAS appropriation. However, funding for the program will
remain at its current level of $27.5 million per year. This proposal is
consistent with the CCC Charter Act which authorizes the Corporation's funds to
be used for market development activities. By providing a permanent
authorization for CCC funding, the proposed change will provide greater
stability for future program activities and will thereby enhance long-term
planning by program participants.
The budget also includes funding to
implement a new market promotion activity, the Quality Samples Program. Under
this initiative, samples of U.S. agricultural products will be provided to
foreign importers in order to promote a better understanding and appreciation of
their high quality. The program will be carried out under existing authorities
through commodity organizations and agricultural trade associations, similar to
the Cooperator Program, and on a pilot basis will be funded by CCC at an annual
program level of $2.5 million.
The budget provides funding to continue both
of the Department's export subsidy programs -- the Dairy Export Incentive
Program (DEIP) and the Export Enhancement Program (EEP). In the case of DEIP,
the budget assumes a program level which continues programming near the current
level. For EEP, a program level of $494 million is proposed for 2000, which is
below the authorized level of $579 million. Proposed legislation to limit EEP
programming will be submitted in order to provide PAYGO savings which are needed
to help offset the costs of other initiatives in the budget which will increase
mandatory spending for agricultural programs. Although EEP will be limited to
the $494 million level, the program will remain in place and the awarding of
bonuses can be resumed whenever market conditions warrant. The Administration
will also propose to permit unobligated balances of EEP funds to be transferred
to other foreign food assistance programs, such as P.L. 480, toward the end of
each year.
For P.L. 480 foreign food assistance activities, the budget
provides an overall program level of $987 million. This is projected to provide
approximately 3.2 million metric tons of commodity assistance to recipient
countries. In 2000, this tonnage level is expected to be supplemented by
additional food assistance to be provided under the Food for Progress Program
and section 416(b) of the Agricultural Act of 1949.
For the Foreign
Agricultural Service (FAS), the budget provides appropriated funding of $115
million. This is $25 million below the 1999 enacted level due to the proposal to
fund the Cooperator Program through CCC rather than the FAS appropriation. The
budget provides funding for several new initiatives for FAS, including the
opening of a new Agricultural Trade Office in the southern Africa region and
implementation of a Reverse Buying Missions Program. The latter will bring
buying missions of foreign importers, retailers, and trade officials to the
United States to orient them on the quality and diversity of U.S. agricultural
products. The program will be focused on markets in which the United States is
generally competitive and has a clear potential for expanding commercial sales.
RURAL DEVELOPMENT
USDA's rural development programs provide decent, safe
and sanitary housing as well as amenities such as safe drinking water, waste
disposal, electrical and telephone service. They also provide jobs -- both for
the construction of projects and employment within those projects, and for
improved employment opportunities that result from the strengthening of rural
economies. Rural America remains diverse. There are prosperous rural communities
-- centers of local economic activity, communities that are attractive for
recreation or retirement, and some that have been remarkably successful in
bringing in high technology and other modem day businesses. However, there also
are numerous areas with severe poverty and economic depression -- places that
have lost their economic base of farming, forestry, mining or other traditional
enterprises. These communities have high rates of poverty, limited
opportunities, and lack even basic necessities. USDA's rural development
programs help alleviate these inequities, so that the people who live in rural
communities may have the same opportunity to share in the benefits of the
Nation's prosperity.
The 2000 budget includes almost $11 billion in loan,
grant and other assistance for rural development. This represents an increase of
almost $800 million over the amount available for 1999. The higher program level
can be supported at about the same cost to the Government -- roughly $2.2
billion in budget authority, including $200 million in budget authority that is
being forward financed into 2001 -- due primarily to a reduction in subsidy
costs for direct loans, which reflects the overall decline in interest rates.
USDA's rural development programs support a number of long-standing
initiatives of the Administration including the President's Homeownership
Initiative, Water 2000 and the Empowerment Zones and Enterprise Communities
(EZ/EC) Initiative. In 2000, Rural Development would also contribute to the
Smart Growth Partnership by helping to administer a $50 million loan program
which is included in the budget for the Forest Service.
Over $3 billion in
loans and grants ($670 million in budget authority) would be budgeted under the
Rural Community Advancement Program (RCAP) which allows flexibility to transfer
funds among programs to meet State and local priorities. These priorities must
be based on strategic plans to help guide the development process. RCAP was
authorized in the 1996 Act, but recent appropriations acts have restricted its
full implementation although the 1999 Appropriations Act provided more
flexibility than in prior years. The 2000 budget would allow RCAP to be fully
implemented.
The Administration will propose legislation to provide $15
million, annually, in grants to the rural communities that were selected in the
second round of the EZ/EC initiative. The 2000 budget also provides for the
targeting of about $200 million in loans and grants under USDA's rural
development programs to the EZ/EC initiative. In addition, a number of the EZ
communities receive certain tax benefits. The EZ/EC initiative has encouraged
communities to develop strategic plans to meet their goals and objectives. It
has created jobs and economic growth, and has served as a model for non-EZ/EC
communities to meet the challenge of planning for their future.
USDA's rural
development programs are administered through State and local offices, all
located within USDA Service Centers. The 2000 budget includes just under $542
million for Rural Development salaries and expenses. This funding level is
approximately $27 million over 1999 and is expected to be sufficient to maintain
staffing at current levels. Rural Utilities Service
The programs
administered by the Rural Utilities Service (RUS) provide financing for
electric, telephone, and water and waste disposal services. These programs have
a long history of significant contributions to rural America -- literally
lighting up rural households, allowing those households to communicate with the
rest of the world, and bringing running water for indoor plumbing.
While
almost all of rural America now have these basic necessities, the challenges in
recent years has been to maintain and upgrade the facilities that provide
service, to ensure that rural America does not fall behind in the fast-paced
world of high-tech communications, and to address the increasing risks of unsafe
or poor quality water.
The 2000 budget would support over $1.6 billion in
electric and telephone loans, which is about $75 million less than 1999. The
Administration will submit legislation to authorize direct electric loans at a
Treasury rate of interest. Under the proposed legislation, $400 million in such
loans would be shifted from FFB directly to RUS.
The 2000 budget also
reflects additional direct loan activity under the Distance Learning and
Telemedicine program. This program was initially designed to provide only
grants. However, there has been an overwhelming request for assistance due to
the awareness of rural communities that the high-tech world of communications
offers their best chance to receive enhanced learning and medical services and
connect to the information-based economy. In order to serve more of these
communities, the program was expanded in 1996 to include loan as well as grant
assistance. RUS expects to see substantial progress in loan activity. In
anticipation, the 2000 budget provides for an increase in the loan program -- to
$200 million in loans. It also provides for an increase in grants -- from $12
million available in 1999 to $20 million in 2000.
The 2000 budget includes
$503 million in grants and $975 million in loans For the water and waste
disposal program -- together representing an increase of $156 million over the
amount available for 1999. The program will continue to be targeted, under the
Water 2000 initiative, to communities with the most serious needs for assistance
-- which means that they lack service, are at risk of health due to unclean
water or unsanitary conditions, cannot afford to pay the full cost of service
due to high incidence of poverty.
Rural communities benefit not only
directly in terms of the services their residents receive from the facilities
financed by water and waste disposal loans and grants, but also, in terms of the
jobs and overall economic growth that can result from those services being
provided to commercial users. The secondary impact can, in fact, turn rural
communities around -- giving them the means to attract industry to diversify
their economies. Rural Housing Service
USDA rural housing programs have
played a key role in providing affordable homeownership and rental opportunities
in rural America since the 1960's. The programs serve very low to moderate
income families who cannot obtain conventional credit and cannot otherwise
afford decent, safe and sanitary housing. Interest and rental payment assistance
reduces the cost of such housing to the families' ability to pay, based on
income and other factors, The overall decline in interest rates has made it
possible to operate the direct homeownership program at relatively modest cost
-- for 2000, less than 10 percent per dollar of loans. The 2000 budget would
support $1.1 billion in direct (single-family) homeownership loans -- compared
to $965 million in 1999.
In addition, the 2000 budget would support $3.2
billion in guarantees -- $200 million more than in 1999. The loan guarantee
program has operated for only a few years and has proven to be helpful in
filling gaps in the commercial credit market where lenders are reluctant to make
loans on their own. The program offers no interest payment assistance, so
borrowers must be able to pay commercial rates of interest. However, the subsidy
cost of the guaranteed program is only about 1 percent per dollar of loan
guaranteed. The combined total of $4.3 billion in homeownership loans and
guarantees is expected to serve over 50,000 rural families.
The 2000 budget
provides for $100 million in direct loans and $200 million in guarantees for
rental housing, $100 million of which would be contingent on legislation to
eliminate the statutory requirement that 20 percent of the units in projects
with guarantees receive interest payment assistance. The guaranteed program for
rental housing is relatively new and uses other sources of funds and financial
incentives, such as tax credits. Experience has shown, that the program can be
operated without interest payment assistance and still serve low income families
due to the combination of other incentives.
In the direct rental housing
program, RHS currently has a portfolio of about 18,000 projects with
approximately 245,000 units receiving rental assistance payments. In year 2000,
it is anticipated that about 41,800 of these units will require renewal at a
cost of $603 million. Some additional units in existing projects will be
provided for servicing purposes and a small number of units are expected to be
provided in new projects, including those for farm labor housing. In total, the
2000 budget includes $640 million for rental assistance payments, of which $440
million would be available beginning in 2000. The remaining $200 million would
be available beginning in 2001. The budgeting of 2000 program needs over 2 years
will not affect the flow of funds to project sponsors or impact occupants in
such projects.
RHS also administers several housing programs that serve
specific needs, including farm labor housing, self-help housing for families who
trade their sweat equity for a chance to own their own home, and very-low income
repair loans and grants. The 2000 budget provides for the continuation of these
programs at sightly higher levels than available for 1999.
In addition, RHS
administers a program of direct and guaranteed loans and a limited amount of
grants for essential community facilities. In recent years, the priority has
been to serve children and the elderly through child care centers and health
facilities; however, a wide range of projects have received this assistance, to
reflect the diversity of State and local priorities. The 2000 budget would
support $250 million in direct loans -- $80 million more than available in 1999.
Guaranteed loans would remain at the same level as in 1999 -- $210 million. In
addition, the 2000 budget includes $15 million for grants, $5 million of which
would be used for early warning systems for hazardous weather conditions.
Rural Business-Cooperative Service
Many rural communities need a more
diversified economic base -- one that will provide good-paying jobs and
withstand the fast-paced challenges of a high-tech global marketplace. The
Administration has undertaken initiatives such as EZ/EC which requires
communities to develop strategic plans in the process of competing for
designation. Implementing these plans, requires significant financial resources.
The primary source of capital must be the private sector and there are many ways
to encourage private lenders to be more responsive to unmet needs, such as
through tax credits and other incentives. Programs that offer guarantees and, in
some cases, direct loans also contribute to the supply of credit. Within USDA,
these programs are administered by the Rural Business-Cooperative Service (RBS).
RBS' largest program is the business & industry loan guarantee program
which has operated at a level of about $1 billion for the last few years, and
would be continued at that level in the 2000 budget. This level of funding is
expected to produce almost 38,000 jobs in rural America. In recent years, the
program has had very few losses and the cost to the Government has been minimal.
The 2000 budget continues the direct business & industry loan program at
a $50 million level. This program is particularly helpful in filling gaps in the
credit market, particularly in areas that are underserved by private lenders. In
addition, the 2000 budget provides for $52 million for the intermediary
relending program -- $19 million more than 1999. This program allows
intermediaries to develop their lending capacity. Currently, each dollar loaned
to an intermediary circulates about 3 times over its lifetime. Further, the
experience intermediaries gain in loan making improves their prospects for
gaining access to other sources of funding.
The rural business enterprise
grant program would be funded at $36 million -- about the same as available for
1999. In addition, there would be $5 million for the new partnership technical
assistance grant program. This program provides communities with assistance for
strategic planning and would help them better coordinate and leverage Federal,
State, and private funding.
The 2000 budget also provides $5 million for
rural cooperative development grants ($3 million more than available in 1999),
$2 million for the appropriate technology transfer program, $700,000 more than
the 1999 level, $2 million for cooperative research agreements (the same as in
1999), and $10 million for the Alternative Agricultural Research and
Commercialization Corporation (compared to only $4 million available for 1999).
As noted earlier, the Administration will be proposing legislation to
provide mandatory funding of $15 million each year for the second round of rural
EZ/EC's that were announced recently. In 2000, RBS will also administer a new
$50 million loan program in support of the Smart Growth under the Lands
Legacy initiative. Funding for this program is included under the
Forest Service budget and would be administered by RBS under the authorities
used to establish the intermediary relending program.
FOOD, NUTRITION AND
CONSUMER SERVICES
America has the most affordable, safest food supply in the
world, thanks to its hard-working farmers and producers. However, with nearly 36
million Americans living in poverty, millions of Americans still need nutrition
assistance. USDA's nutrition assistance programs are part of the national safety
net. Proper nutrition and sufficient food is as essential to the successful
transition from Welfare to work as child care and health insurance. The
importance of nutrition support does not diminish as families leave welfare. A
family working full- time throughout the year at the minimum wage can lift
themselves out of poverty, but only with the assistance of food stamps. The
budget requests an appropriate level of funding for this effort -- for Food
Stamps, Child Nutrition, and the WIC program, the Nation's primary means for
carrying out food assistance policy. Over two-thirds of the $36.5 billion
requested will help low-income children, school age or under, receive the
nutrition they need.
The Food Stamp Program is budgeted at $22.5 billion in
2000, which includes a $1.0 billion contingency fund to cover unforeseen needs,
and is predicated on a participation estimate of some 20.1 million people. While
this level is higher than 1999 estimated participation of 19.7 million, this is
just cautious budgeting. The economy is expected to remain strong. In fact, food
stamp participation is down over 9 million from its peak of 28 million
participants in March of 1994. This trend began before welfare reform was
enacted and intensified as welfare reform began to work. With the strong
economy, unemployment is at the lowest peacetime level since 1957. Increases in
child support payments from absent parents -- achieved via Administration
initiatives -- are also helping low-income households reduce dependency on food
stamps. The Department will watch fluctuations in participation levels carefully
to ensure that food stamp eligibles are not denied access to the program if they
or their children still require nutrition assistance.
The budget includes
several legislative proposals and initiatives for the Food Stamp Program. While
Americans are committed to a society where work and responsibility are rewarded,
current law does not permit many immigrants who have been legal residents of the
United States since before welfare reform, to receive food stamps even after
reaching age 65. The Department proposes to level the playing field with
legislation that would allow such humanitarian assistance to these hardworking,
long-time legal resident immigrants who fall on hard times when they are over
age 65.
The budget also includes a small amount of funding for nutrition
education and technical assistance. This will make sure program eligibles
understand how to get nutrition assistance and what assistance is available if
they want it; and it will help educate them on how to achieve a better diet.
Finally, in addition to the continuing effort to modernize benefit delivery via
nationwide use of Electronic Benefit Transfer, USDA is developing a plan to
reduce error. A $6 million increase is requested as part of the plan to crack
down on retailer and participant abuses, as well as reduce program errors
causing overpayments.
For the Child Nutrition Programs, including the
National School Lunch, Breakfast, Child and Adult Care Food, Summer Food
Service, and Special Milk Programs, the current law budget request is $9.6
billion, about $0.4 billion more than the 1999 level. The request assumes
continued full funding for all of these programs, support for Team Nutrition and
$2 million is requested for Nutrition Education and Training. The National
School Lunch Program touches almost all school children during the year and can
help them achieve a better diet, especially with this effort in nutrition
education. USDA is also developing an integrity plan to assess and address error
in the school lunch program for which another $2 million is requested. We will
increase USDA's visibility at the State and local level to ensure program
integrity. Finally, the William F. Goodling Child Nutrition Reauthorization Act
of 1998, P.L. 105336, (the Goodling Act) authorized demonstration projects in 6
school districts that would allow the Department to evaluate the effect of
providing breakfasts free to all elementary school children regardless of
income. The budget includes $3 million to pay for the meal costs, and $10
million for a 3-year evaluation of the effects on participation, academic
achievement, attendance, tardiness, and dietary intake.
For WIC, the budget
request calls for an increase of $181 million, bringing the total to $4.1
billion for 2000. This level of funding will support a monthly average of 7.5
million participants over the year. The program is widely credited with reducing
anemia and improving other key indicators of early childhood health. Over 46
percent of the infants born in America are WIC participants. USDA is working to
implement the changes in the Goodling Act, many of which would increase program
integrity. The Department is also working with the States to improve program
integrity and efficiency, to make sure the program makes as much difference as
it can for needy program recipients. Further, as part of our Commodity
Assistance Program request, the Department seeks $20 million for the WIC
farmers' market program, a $5 million increase. This program brings WIC
recipients together with small, local farm producers and encourages the
consumption of fruits and vegetables, a priority in nutrition promotion.
The
budget proposes an increase of $10 million for the Emergency Food Assistance
Program (TEFAP). The Commodity Supplemental Food Program is funded to maintain
the current program levels, although it is anticipated that caseload will
continue to shift toward greater elderly participation. The Nutrition Program
for the Elderly is increased by $10 million, to $150 million to increase
subsidized meals provided to persons aged 60 or older at low-income elderly
centers and through "meals on wheels" programs.'
Finally, the Department
will also increase its efforts to promote the new Dietary Guidelines to be
issued in 2000 to help all Americans achieve a better diet via the Center for
Nutrition Policy and Promotion. An important principle of nutrition education is
that all Americans can benefit, whether they participate in nutritious
assistance programs or not. Our concern is greatest for those in need, but
nutrition education helps everyone.
FOOD SAFETY
As the safety of the
food supply has become more important to the success of American agriculture and
the health of consumers, the Department has stepped up its efforts to provide
the leadership and expertise necessary to address the complex domestic and
international food safety issues facing us today.
On July 25, 1996, a
milestone was reached in our strategy for making significant gains in improving
the safety of America's food supply. On this date, the final rule for Pathogen
Reduction and Hazard Analysis and Critical Control Point (HACCP) Systems for
meat and poultry products was published. This rule modernizes a 90-year-old
inspection system and lays out the Administration's commitment to improve food
safety and reduce the incidence of foodborne illness by 25 percent by the year
2000 as stated in the Department's strategic plan.
Two more milestones were
reached: in January 1998 when approximately 300 large plants entered the
program, accounting for 75 percent of the volume of meat and poultry production
in the United States; and in January 1999 when over 2,800 small plants
accounting for another 15 percent of meat and poultry production implemented
HACCP. Implementation in large plants has been smooth thanks to the efforts of
both industry and Government. Large plants had approximately a 92 percent
compliance rate during the first 9 months of implementation. Where a few
problems did occur, enforcement actions were implemented and establishments
responded by modifying and strengthening their HACCP plans. As of January 25,
1999, small establishments, defined as having between 10 and 500 employees, were
required to meet the HACCP requirements. All other establishments must implement
HACCP requirements on January 25, 2000.
Recent results demonstrate that 90
percent of large HACCP establishments, for which there were adequate data, met
the Government's Salmonella performance standards. Those establishments that did
not meet the standards were required to take immediate corrective action. Data
also indicate that there was a significant reduction in the prevalence of
Salmonella due to the implementation of HACCP. The performance standards for
Salmonella represent the first time USDA has set microbial standards for raw
products on such a broad scale and is the first step towards a greater reliance
on performance standards for specific pathogens.
These data, while
preliminary, indicate that the Administration's science-based inspection system
has already had a significant effect on the safety of food American families eat
by reducing the prevalence of Salmonella. Salmonella is a potentially deadly
bacteria that in the past had sickened as many as 3.8 million Americans a year
and cost billions of dollars in lost productivity and medical costs annually.
The positive results from the implementation of HACCP underscores the
important role Government plays in promoting public health, but the final rule
is only part of our overall strategy to improve the safety of our meat and
poultry supply. On January 25, 1997, the President announced the National Food
Safety initiative. The initiative includes seven components for improving the
Federal food inspection system from farm-to-table. Key components include
expansion of the Federal food safety surveillance system, improved coordination
between Federal, State, and local health authorities; improved risk assessment
capabilities; increased inspection; expanded research, consumer education, and
strategic planning. The initiative reflects a high level of coordination among
agencies within USDA, the Department of Health and Human Services, and the
Environmental Protection Agency (EPA). For 2000, the plan is to build on these
investments, which Congress has generously supported in both 1998 and 1999.
For 2000, the budget proposes an appropriated level under current law of
$653 million, a net increase of $36 million over the 1999 current estimate. The
budget includes an increase for pay costs to meet our statutory obligation to
provide inspection services and a programmatic increase to implement our
farm-to-table food safety strategy. The 2000 budget includes increases to help
the FSIS inspection workforce make the transition to a new HACCP environment,
including conversion of 388 current inspection personnel and hiring of 250 new
personnel as Consumer Safety Officers. In these new positions, these employees
will be responsible for conducting scientific testing and inspections through
the farm-to-table continuum. Some of these personnel will be redeployed to cover
critical inspection vacancies in nearly 3,000 very small establishments. These
redeployments and upgrades will increase the professional qualifications of the
inspection workforce and cover a broader segment of the farm-to-table continuum.
In support of the President's Food Safety initiative, the budget for FSIS
includes increases to address food safety risks from farm-to-table, including:
emergency response coordination with the States in investigating foodborne
illness outbreaks; validation of the ability of State laboratories to meet HACCP
pathogen testing requirements; and pathogen testing in Federal laboratories of
State-inspected product.
The 2000 budget request includes again this year a
legislative proposal which would provide authority to recover the full cost of
providing Federal meat, poultry, and egg products inspection. We estimate that
this proposal would generate approximately $504 million in new revenues in 2000
and $606 million thereafter. The proposal would require $149 million in
appropriated funding to convert the program to user fees and to maintain State
inspection programs. States administering their own inspection programs would
continue to be reimbursed by the Federal Government for up to 50 percent of the
cost of administering their programs and the special assistance beginning in
1999.
NATURAL RESOURCES AND ENVIRONMENT
Public awareness and concern for
the Nation's natural resources has continued to grow as we gain a better
understanding of soil and related resource problems and how best to address
them. The importance of maintaining a healthy environment and a strong natural
resource base becomes even more vital when considering the present economic
state of rural America and the uncertainties that will be facing agriculture in
the next century. The need to stem the decline of our important prime farmlands
and address the problem of urban sprawl will require a greater Federal
investment in "Smart Growth" programs. Understanding and demonstrating new
methods of mitigating the adverse effects of global climate change on
agriculture is another area to which the Federal Government should devote more
resources. In addition, the plight of small, limited resource farmers has become
more widely known as we begin to appreciate the vital role they play in American
agriculture and the environmental and economic challenges that they face.
The Administration has also targeted water pollution as a serious threat to
the environment and has demonstrated its commitment to addressing this problem
with the publication of the President's Clean Water Action Plan in February
1998. This important document comes 25 years after passage of the Clean Water
Act and outlines key Federal actions that will attempt to address the pollution
problems of the next generation. USDA is called on to play a significant role in
helping to implement this plan.
These initiatives have put more pressure on
the Department's unique conservation partnership and has led to an increased
demand for financial and technical services that we provide to farmers and
communities. The budget request for 2000 recognizes this and proposes an
appropriated funding level of $866 million for NRCS. This includes $585 million
for conservation technical assistance, the program that constitutes the backbone
of the Department's partnership with conservation districts and farmers, as well
as the primary tool by which the Department addresses many of the
Administration's environmental priorities.
The technical assistance proposal
will assist in implementation of the Administration's Clean Water Action Plan
and provides $20 million, including an $8 million increase, for technical
assistance to owners and operators of animal feeding operations (AFO) to help
them develop and implement waste management plans. Financial assistance that AFO
operators might need to implement the plans will come from a $126 million
increase requested for EQIP which is funded through CCC. NRCS will direct $20
million to competitive partnership grants to enable locally-based organizations,
such as conservation districts or watershed councils, to provide coordination of
locally-initiated conservation efforts in problem identification and goal
setting. Finally, an additional $3 million is provided for monitoring work to
help target resources and document baseline conditions and performance.
In
support of the Administration's Global Climate Change initiative, the budget
includes an increase of $12 million to develop accurate baseline soil carbon
data and to determine the impacts of Federal programs on. soil carbon stocks at
the national, regional and field levels. In addition, NRCS will devote $3
million to fund demonstration and pilot projects to test various carbon
sequestration and greenhouse gas mitigation strategies and monitoring
mechanisms.
Another Administration priority is the need to protect
productive farmland and preserve open space. The President's Lands
Legacy initiative will seek to accomplish this through a $50 million
increase in discretionary spending for NRCS' Farmland Protection Program (FPP).
Since funding authority for this program was fully expended in 1998, the NRCS
budget also proposes new CCC legislative funding authority of $27.5 million.
These two sources of funding for FPP will help meet the high demand for this
program and ensure that solutions to problems of urban sprawl and loss of prime
farmland are achieved.
Rural America is now facing serious economic
hardships as a result of the declining farm economy. Nevertheless, farmers must
still meet numerous environmental challenges and this places the greatest burden
on the smaller operators. To address this, the budget includes $5 million to
more fully implement the Debt for Nature program which will provide technical
and financial assistance to financially strapped USDA borrowers who also have
lands that require conservation treatment. At a time when many of these small
operators are facing foreclosure, this program will offer some financial relief
while at the same time implementing state-of the-art conservation stewardship
practices.
Funds will again be limited in the watershed planning and
construction area where allocations will be made only to those projects that
demonstrate cost effectiveness and clear environmental need. We will also work
closely with our partners to get a better understanding of the overall condition
of the more than 10,000 project dams that have been installed with USDA funding
over the past 50 years. Many of these older projects are now approaching the end
of their projected life span and concerns about public safety are being raised.
NRCS will devote $1 million to providing educational assistance to communities
on the need to inspect and possibly repair older dams.
Finally, the
Department's 2000 budget will continue to support the 315 authorized Resource
Conservation and Development areas. This ongoing program will continue to
improve State and local leadership capabilities in planning, developing and
carrying out resource conservation programs.
RESEARCH, EDUCATION, AND
ECONOMICS
The 2000 budget represents the Administration's first
comprehensive set of recommendations for investments in agricultural research
and related technology since the Agricultural Research, Extension, and Education
Reform Act was enacted in June 1998. The Research Reform Act called for a major
infusion of funding in research and technology in areas that will enable
American agriculture adapt to changing conditions in the global economy and in
the domestic production environment. The 2000 budget proposes total funding for
the four REE agencies of $2.1 billion, an increase of over 10 percent from the
comparable 1999 level and the first substantial increase for these programs
since 1992. Advances in research and technology are the keys to many of the most
challenging problems we face in agriculture today and provide the basis for
solutions to tomorrow's problems. The proposals put the Department in the ranks
of the Federal Government's leading science agencies.
The REE budget
proposal reflects the priorities outlined in the Research Reform Act. Mandatory
spending of $120 million in 2000, and $600 million over the next 5 years is
provided for the Initiative for Future Agriculture and Food Systems under
Section 401 of the Research Reform Act, for competitive research, education, and
extension grants to address critical and emerging agricultural issues. Grants of
up to 5 years will be awarded to address priority research topics targeting
enhanced agricultural productivity, food safety and human nutrition, and natural
resource management. Mandatory funding is also available under the Fund for
Rural America, where approximately one-half of the $60 million total is to be
provided for a wide range of research and education activities in 2000.
The
2000 budget of $881 million for the Agricultural Research Service (ARS) includes
a $51 million net increase for ARS research programs above the comparable 1999
enacted level. Within that total, the agency will fund increases of $76 million
in support of major Presidential Initiatives and other high priority research
projects. In addition, $10 million is provided to partially offset increased pay
costs. Of the total increase, $35 million will be funded through savings
achieved from the termination of lower priority projects at select locations.
The discretionary budget request for CSREES of $948 million is up by $24 million
or 2.6 percent, with a shift within this total to programs where funds are
distributed competitively to address the most critical needs of the agricultural
community. The 2000 budget proposes an increase of $81 million for the National
Research Initiative (NRI), a 68 percent increase over the 1999 appropriated
level. NRI supports both fundamental and mission-linked research through a
competitive, peer-reviewed process that is open to all of the Nation's top
scientists, including those at land-grant institutions. The proposed increase
will target a wide range of environmental, economic, human health, and nutrition
concerns through additional investments in breakthrough research that aims to
address the most pressing concerns faced by the agricultural community.
The
2000 budget for the Economic Research Service (ERS) and the National
Agricultural Statistics Service (NASS), in total, $140 million, up $6 million
from comparable 1999 levels. Increases are proposed to support important
departmental initiatives while reductions reflect the cyclical funding needs for
the Census of Agriculture and the proposal to fund food program studies through
the Food and Nutrition Service.
The budget includes $120 million, an
increase of about $25 million, for REE research and education in support of the
President's Food Safety Initiative. Of the total, about $7.3 million is provided
to ARS for pre-harvest food safety research to study animal pathogen resistance
to antibiotics, reduce pathogen infestation in animal waste, and examine the
risks associated with the transmission of zoonotic pathogens from animals to
humans. The ARS budget includes an increase of $4.4 million for post-harvest
research to enhance detection and measurement of microbial pathogens during
handling, distribution, and storage of fresh fruits and vegetables to determine
the sources of contamination and risks of disease transmission. An increase of
$3 million provided in the Cooperative State Research, Education, and Extension
Service (CSREES) budget for competitive grants for integrated research and
extension, food safety activities grants will complement the ARS research
efforts. The extension programs carried out by CSREES will provide the necessary
training to small retail establishments in helping them to implement HACCP.
Additionally, about $21 million of the total of $200 million proposed National
Research Initiative (NRI) competitive grants will go for food safety related
projects. An increase of about $0.5 million is provided to support activities
carried out by ERS in collaboration with other Federal and USDA agencies to
assess the costs of foodborne illness and the economic implications of different
options to improve food safety. An increase of $2.5 million is included in the
NASS budget for a baseline survey of good agricultural practices of fruit and
vegetable growers.
The ARS budget also contains an increase of $8 million
for research to reduce the incidence of emerging diseases and exotic pests that
threaten the safety and competitiveness of the U.S. food supply at home and
abroad. Of the total, about half will be used for developing diagnostic tests,
vaccines, and other preventive measures to control emerging and infectious
diseases afflicting animals. The remaining amount is provided for research on
emerging and exotic plant diseases, insects, and weeds that negatively impact
crop quality and yield.
An increase of $3 million is provided in the ARS
budget for genetic research aimed at enhancing U.S. agricultural competitiveness
by improving the quality of plant and animal food products. The increase is
provided to enhance crop production through research on genetic vulnerability of
plants to pests and diseases and to improve the quality and safety of 'animal
products through more accurate information on genes responsible for animal
diseases and parasites.
The ARS budget also includes a $20.3 million
increase in support of the President's Human Nutrition initiative. The overall
goal of the initiative is to promote health and reduce health care costs by
identifying the relationship between diet and health and to improve the
scientific basis for more effective food assistance programs.
An increase of
$3.0 million will support the development and application of new technology and
management practices to replace the traditional pest controls that are at risk
of being restricted or prohibited due to the Food Quality Protection Act of 1996
(FQPA). Of the total, about half of the amount is provided for technical and
administrative support to the Office of Pest Management and Policy which is
responsible for coordinating all pest control activities in the Department and
collaborating with EPA on all pesticide-related issues. Additional funding is
also provided in the CSREES budget in support of FQPA, including $10 million in
new funds for long-term development and implementation of innovative pest
management systems for major acreage crops, fruits, and vegetables, and $3
million in new funds for the development of alternative pest controls for fruit
and vegetable crops to replace the pesticides at risk of not meeting the new
regulatory requirements. The budget includes a proposal for a new $5 million
program of integrated research and extension grants for development of practical
management alternatives and technologies for commodities affected by the methyl
bromide phase-out.
Additional funding is also provided for a number of
programs aimed at preserving the Nation's natural resource base. An increase of
$11 million is provided in the ARS budget for research and development of viable
management strategies to achieve sustainable ecosystems. Specific efforts will
include reducing nutrient build-up and transport to control hypoxia and harmful
algae blooms, developing an Integrated Pest Management system for invasive weeds
such as melaluca, leafy spurge, and yellow star thistle, and developing
integrated strategies and technologies for conservation and restoration of
ecosystems.
An increase of $15 million is provided for ARS global change
research activities, with particular emphasis on utilizing management and
conservation strategies to store carbon in soil, mitigating the impacts of
climate change on agriculture and food availability, and developing new
technology for predicting effects of global change on management and
conservation of natural resources. The ERS budget is increased by $1 million for
global climate change work, including identifying the economic implications of
various alternatives for reducing greenhouse gases. Funds are also proposed to
support USDA participation in the U.S. Global Change Research Program National
Assessment activities in which several agencies collaborate to provide better
understanding of potential climate changes for the Nation and to examine options
for adaptations to these changes.
An additional $2 million is provided
for ARS research to develop measures to control particulate matter in compliance
with EPA's new ambient air quality standards mandated by the Clean Air Act.
An increase of $2 million is proposed in the ARS budget so that the National
Agricultural Library can enhance the availability and delivery of information to
rural areas through the Internet. Additional support is provided to land-grant
universities to establish "Centers of Excellence" on subjects of critical
importance to the agricultural community, including food safety, pest
management, water quality, and agricultural productivity.
The budget also
includes $45 million for facility construction and modernization projects at 7
ARS locations, a reduction of $12 million from 1999. Of the total amount, $13
million is provided to support the first phase of a new addition to the
Beltsville Human Nutrition Research Center and other small projects at the
Beltsville Agricultural Research Center. Additional funding is also provided for
modernization projects at ARS regional research centers, including $6 million
for the Southern Regional Research Center at New Orleans, Louisiana; $4 million
for the Eastern Regional Research Center at Philadelphia, Pennsylvania; $3
million for the Western Regional Research Center at Albany, California; and $2
million for the National Center for Agricultural Utilization Research, at
Peoria, Illinois. Additional funding totalling $8 million is also provided for
continued modernization of the Plum Island Animal Disease Center in New York and
$9 million for construction of a relocation facility for the Western Human
Nutrition Research Center in Davis, California.
Increases are also proposed
in the CSREES budget for two innovative efforts to empower communities to reduce
hunger and improve nutrition at the grass roots level. One of my highest
priorities as Secretary is fostering partnerships between the public, private,
and non-profit sectors to improve community food security, help individuals move
towards self-sufficiency, and increase the amount of excess, wholesome food that
is distributed to hungry Americans rather than discarded. Such coordinated
efforts are particularly important at a time when nonprofit feeding
organizations throughout the Nation are reporting an increased demand for food,
particularly among working poor families. For these reasons, $776,000 is
proposed to increase technical assistance to local anti-hunger and nutrition
activities. In addition, as part of that initiative, $15 million is requested to
increase the amount of excess food distributed by nonprofit feeding
organizations by awarding grants to expand community infrastructures for food
recovery and gleaning activities. The goal is to increase food recovery by 33
percent or 500 million pounds, which would provide approximately 500,000
low-income individuals with 3 pounds of nutritious food a day. An increase of $2
million above the 1999 level is also proposed to support nutrition education
programs aimed at assisting individuals below poverty levels in improving basic
nutrition and resource management practices.
An increase $4 million is
proposed in the CSREES budget for competitive research, extension, and education
grants to support the Small Farms initiative. The main goal of the Initiative is
to enhance agricultural production on small farms by developing and facilitating
networks between small farmers and trained professionals in the public and
private sectors.
Stable funding is provided for CSREES' higher education
programs to continue ongoing efforts to support graduate and undergraduate
education aimed at improving instructional capabilities in food and agricultural
sciences. Funding is also held constant for the 1890 Capacity Building Grants
Program which supports partnerships between the 1890's Historically Black
Colleges and Universities and USDA agencies to improve research and instruction
programs at these schools. The budget also continues to support the
recommendations proposed by CRAT. Proposed increases include an additional $4
million for 1890 facilities projects for building renovation and construction,
an increase of $3 million to support 30 additional extension agents on Indian
reservations in 19 States, and an increase of $1.4 million to expand extension
capacity at the 30 Native American land-grant institutions.
In addition to
the food safety and global climate change increases noted previously, the ERS
budget includes increases to support economic analysis on other priority issues.
The budget includes additional funds to enhance commodity market analysis,
particularly through alliances with the land-grant university system, and
electronic dissemination.of this and other ERS analysis to producers,
processors, and others that use the information. An increase is also included to
assess the varying information needs of different types of farming operations,
how well USDA and private information services meet the needs of small farmers,
and what modification of the Department's current information programs are
needed to better serve small farmers. Finally, an increase is provided to
support research on electric utility deregulation in order to assess the
potential impacts of deregulation on the competitiveness of rural businesses,
communities, and households.
The National Agricultural Statistics Service
(NASS) is also an important source of information that is relied upon by a wide
range of participants in the agricultural economy. The changes brought about by
the 1996 Farm Bill make reliable and timely information about production, supply
and prices even more critical to participants in agricultural markets. The
budget request for NASS reflects a net decrease of $3 million, which includes a
$9 million reduction due to the cyclical funding needs of the Census of
Agriculture. The budget includes increases for a number of priority NASS
efforts.
An increase is included to establish a permanent office in Puerto
Rico in collaboration with the Puerto Rico Department of Agriculture to enhance
collection of agricultural-related data. Funding is requested to conduct the
decennial Agriculture Economics Land Ownership Survey which provides
comprehensive data that are used to assess changes in farm structure, farm
financial health, land ownership patterns, and landlord contributions to
agricultural production. An increase is included for increased data collection
to assist in the setting of safe pesticide use standards and in defining good
agricultural practices to promote food safety. Lastly, an increase is requested
to expand coverage of the program to measure chemical usage on cropland --
information vital to understanding stresses on cropland and environmental
changes.
MARKETING AND REGULATORY PROGRAMS
The Marketing and Regulatory
Programs facilitate domestic and international marketing of U.S. agricultural
products by: (1) reducing internationai trade barriers and assuring that all
sanitary and phytosanitary requirements are based on sound science; (2)
protecting domestic producers from animal and plant pests and diseases; (3)
monitoring markets to assure fair trading practices; (4) promoting competition
and efficient marketing; (5) reducing the effects of destructive wildlife; and
(6) assuring the well-being of research, exhibition, and pet animals. Consumers,
as well as farmers, ranchers, handlers, processors, and other marketers in the
agricultural sector, benefit from these activities.
The budget includes an
increase of $13 million for the Agricultural Marketing Service (AMS) for a
number of important activities. It would be used to: (1) expand market news
reporting; (2) finalize the National Organic Program; (3) enhance the rapid
response capability of the Pesticide Data Program (PDP) necessary to support the
Department's responsibilities to meet EPA's data requirements for agricultural
pesticide residues under FQPA; and (4) expand the operating program for
microbiological testing of fruits and vegetables to support the President's Food
Safety initiative.
For the Animal and Plant Health Inspection Service
(APHIS), the budget proposes a number of significant changes in priorities, but
only a $10 million overall increase in appropriations for the salaries and
expenses account. Program successes in brucellosis eradication will allow a
redirection to higher priority activities such as improved animal and plant
health monitoring to reduce the likelihood of dangerous and costly infestations.
APHIS anticipates that all 5() States will reach brucellosis Class "Free" Status
by the end of 1999. The budget proposes increased cost sharing from
beneficiaries of Wildlife Services activities, particularly in States which
support less than half of the program costs. Also, savings in the APHIS budget
for boll weevil eradication can be achieved because FSA has established a
successful loan program to assist producer-operated foundations to eradicate
this menace to our agriculture. These reductions enable budget priorities to
increase in the following areas: (1) detection and exclusion of pests and
diseases including fruit flies, emerging plant pests, invasive alien species and
Agricultural Quarantine Inspection at the borders where upwards of 85 million
passengers potentially carry banned agricultural .products into the United
States; (2) more timely, and accurate surveillance information on animal health;
(3) emergency preparedness against acts of bioterrorism; and (4) important data
gathering and risk analysis used in negotiations concerning sanitary and
phytosanitary trade barriers and restrictions on genetically engineered products
entering world markets.
In addition, legislation will be proposed to
increase license fees on the entities regulated under the Animal Welfare Act to
recover the field level costs of administering the Act and to increase
biotechnology permit fees to recover the cost of providing such services.
The budget requests no net increase for the Grain Inspection, Packers and
Stockyards Administration. The one-time appropriation of $2.5 million in 1999 to
restructure the Packers and Stockyards (P&S) activities is being used to
strengthen P&S programs' ability to investigate anti-competitive practices
and provide greater flexibility and efficiency in enforcing the trade practice
and payment protection provisions of the Act. In 2000, a similar amount of funds
would be used to: (1) hire additional staff to monitor and analyze packer
competitive practices and the implications of structural changes in the meat
packing industry; (2) expand poultry compliance resources; (3) install
electronic filing equipment to reduce financial reporting costs for stockyard
owners and packing house operators, (4) develop new cost-saving methods of grain
inspection, (5) develop specific tests for grain varieties, and (6) develop
automation techniques for mycotoxin testing. Legislation for new license fees
from livestock marketing firms will be proposed to recover the cost of
administering the Packers and Stockyards Act and to increase fees for grain
inspection to recover the cost of developing grain standards.
DEPARTMENTAL
MANAGEMENT ACTIVITIES
Although few support activities have high visibility,
they are, nevertheless, vital to USDA's success in providing effective customer
service and efficient program delivery. The 2000 budget proposes a number of
increases for USDA's central offices and management functions to strengthen
Departmentwide management oversight, leadership, coordination, and
administrative support in keeping with the Department's Strategic Plan
Management Initiatives to: ensure that all customers and employees are treated
fairly and equitably, with dignity and respect; improve customer service by
streamlining and restructuring the county offices; create a unified system of
information technology management; and improve financial management and
reporting.
The request reflects a number of priority funding increases to
continue activities to improve civil rights enforcement throughout USDA. In
recent years the Congress has increased funding specifically for civil rights
activities within Departmental Administration. I appreciate this support and
these activities will continue. The 2000 budget includes an increase of $3.9
million to build on these improvements. I want to be sure that we have the
necessary resources to meet our Strategic Goal of ensuring that all employees
and customers are treated fairly and equitably with dignity and respect. The
funds will support additional staffing in the Office of Outreach to strengthen
and expand leadership and coordination capabilities and expand outreach to
minority and limited resource farmers; additional staffing for the Office of
Civil Rights to handle increased workload in discrimination complaints and
enhance complaints tracking to provide increased accountability; and additional
staffing for the Office of Small and Disadvantaged Business Utilization to
support an ongoing project to create new jobs in rural America.
The budget
also includes an increase of $7 million for the Department's Socially
Disadvantaged Farmers Outreach Program. The program, authorized by Section 2501
of the Food, Agriculture, Conservation, and Trade Act of 1990, is designed to
assist socially and disadvantaged farmers and ranchers in participating in USDA
programs and be successful in their operations by providing outreach and
technical assistance. The proposed increase will enable support of approximately
35 projects that will serve more than 10,000 small producers with the goal of
turning them into solvent enterprises and stemming the continual reduction of
the number of minority farmers and ranchers.
The challenge of providing
improved customer service with improved efficiency as resource constraints are
tightened remains a major focus of the Department's county-based agencies
including FSA, the RD mission area, and NRCS. An initial administrative
convergence plan has been developed to create the Support Services Bureau (SSB)
which combines the administrative structures of these agencies into one unit to
deliver better services to local customers and employees, provide a new
consistency in administrative policy and operations, make better use of limited
resources, and help preserve limited budget resources for program delivery.
Thus, the budget includes funding for the new consolidated organization, SSB, to
provide administrative services, including information technology activities, to
these agencies. The salaries and expenses of the new bureau will be financed
through direct appropriations and transfers from the serviced agencies.
The
new SSB will support the Department's ongoing Service Center Implementation
initiative. In 2000, a total program level of $90 million is proposed to
continue Service Center Implementation activities, including further development
and implementation of the common computing environment (CCE). One of the keys to
success of improved customer service, while streamlining the field structure, is
the replacement of the aging business and technology systems of the field
service agencies. A collective re-engineering of business processes for
administrative services and program delivery is underway, along with testing
information technology alternatives. Common information shared by the partner
agencies will reduce the redundant requests made of program participants, as
well as customer office visits and paperwork burden, and ease workload for
internal staff. CCE will enable the county-based agencies to: optimize the data,
equipment, and staff sharing opportunities at the USDA service centers; overcome
the extreme limitations of the current legacy information systems; and enhance
customer service.
The Office of the Chief Information Officer (OCIO)
provides policy guidance, leadership, and coordination in USDA's information
management and technology investment activities. The proposed increase for 2000
includes $2.4 million to enhance USDA's infrastructure security and OClO's
emergency response capabilities; continue oversight of the Department's Service
Center Implementation initiative; and continue implementation of critical
Clinger-Cohen activities including further development of the Department's
Information Technology Capital Planning and Investment Control program, the USDA
Information Architecture, and workforce planning activities to ensure USDA
maintains a highly qualified IT workforce.
Supplemental funding of $37.8
million was provided to OCIO in 1999 to support an aggressive program of
remediation activities to address Year 2000 computer and embedded chip problems
in the Department. I appreciate this support provided by the Congress and we are
diligently working to ensure uninterrupted delivery of USDA programs and
services in 2000.
The Office of the Chief Financial Officer provides overall
direction and leadership in the development of modern financial management
structures and systems in the Department. The budget proposes an increase of $2
million to restore the Department's financial credibility and accountability
including successful implementation of legislative mandates such as the
Government Performance and Results Act, debt collection and cost accounting.
Increases in the Department's Working Capital Fund will enhance implementation
of our new USDA-wide financial accounting system.
The Office of the General
Counsel (OGC) provides critical legal support and advice to the Department and
its agencies. An increase of $3.5 million is proposed to strengthen OGC's
ability to provide timely response to requests for legal assistance, especially
in the areas of trade practices, natural resources, and general law. Funds area
also included to provide information technology improvements to enhance the
efficiency of the office.
The Department's Office of Communications (OC)
plays a critical role in disseminating information about USDA's programs to the
general public. The request includes an increase of $1.2 million to enable OC to
utilize new technology to reach audiences in a more timely and effective manner,
and to lead Department-wide communications outreach efforts to reach underserved
populations.
The request includes additional funds to continue the ongoing
implementation of the USDA Strategic Space Plan for the Washington Metropolitan
area. This plan has been tailored to meet the needs of USDA based on the
projected staff levels at the Washington Headquarters and to provide a safe,
efficient workplace for our employees. Occupancy of the Beltsville facility is
scheduled to be completed during 1999. The work required in the renovation of
the South Building includes fire protection systems, abatement of hazardous
materials such as asbestos; replacement of old, inefficient heating, ventilation
and air conditioning systems; upgrade of electrical and plumbing systems;
improved accommodations for disabled persons; and accommodation of modem
telecommunications systems..The construction contract for Phase 1 of the
modernization was awarded in July 1998. The design for Phase 2 is substantially
complete and the 2000 request includes funds for the construction of Phase 2.
The Department's Hazardous Waste Management program provides leadership and
funding for compliance with the requirements of the Comprehensive Environmental
Response, Compensation, and Liability Act, the Resources Conservation and
Recovery Act, the Oil Pollution Act and the Pollution Prevention Act for
facilities and lands under USDA's jurisdiction. An increase of $7 million is
requested to minimally comply with necessary investigative and cleanup
activities to protect human health and the environment and support increased
efforts to identify and bill other responsible parties in the cleanup of
hazardous waste sites.
OFFICE OF INSPECTOR GENERAL
The Office of
Inspector General (OIG) conducts and supervises audits and investigations
relating to programs and operations of the Department, reviews and makes
recommendations on existing and proposed legislation and regulations, and
recommends policies and activities to promote economy and efficiency and to
prevent and detect fraud and mismanagement in USDA operations. The budget
includes an increase of $3.1 million to maintain these activities and enhance
the information technology capabilities of OIG.
That concludes my statement,
I am looking forward to working with the Committee on the 2000 budget so that
together we can meet the needs of our clients.
END
LOAD-DATE: February 12, 1999
