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Document 39 of 79.

March 2, 2000, Thursday

SECTION: PREPARED TESTIMONY

LENGTH: 2764 words

HEADLINE: PREPARED TESTIMONY OF JAMES R. LYONS UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT UNITED STATES DEPARTMENT OF AGRICULTURE

BEFORE THE HOUSE APPROPRIATIONS COMMITTEE SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION AND RELATED AGENCIES

BODY:
Mr. Chairman and Members of the Committee, I am pleased to appear before you today to present the 2001 budget and program proposals for the Natural Resources Conservation Service (NRCS) of the Department of Agriculture (USDA). With me this morning are Pearlie S. Reed, Chief of the Natural Resources and Conservation Service, Danny Sells, Associate Chief of the NRCS, Ms. Dana York, who is the Acting NRCS Budget Director, and Stephen Dewhurst, USDA's Budget Officer.

My testimony this morning will highlight the President's budget proposals and initiatives that are so important to providing a farm safety net and conserving our nation's natural resources on America's private lands. Mr. Reed's testimony focuses on the specific funding proposals by account for the NRCS. After brief oral remarks, we will be pleased to respond to your questions. Mr. Chairman, the role of the NRCS has been evolving in recent years as Congress has passed legislation relating to clean water, clean air, endangered species and new conservation programs administered by the USDA. NRCS has been a reliable agency for 4.7 million farmers, ranchers and landowners and operators to turn to for technical assistance in solving their natural resource concerns. Recently, at a national conservation summit the Secretary released a report demonstrating the mounting array of conservation challenges facing American agriculture in the 21st Century. And in the last few years, the economic crisis facing rural America has devastated the private landowner's ability to put conservation on the Nation's private lands. Farm income has been down and repeated floods and drought have devastated the nation's farmland.

And funding for several of the conservation programs, such as the Farmland Protection Program and the Wildlife Habitat Incentives Program, authorized by the 1996 Farm Bill has been fully utilized, with no additional funding authority available even though demand for the programs is strong.

The FY 2001 President's budget seeks an additional $1.3 billion over authorized levels for conservation programs funded by the Commodity Credit Corporation. This increase is critical to strengthening farm family income while promoting environmentally sound land management. Overall, the NRCS budget proposes a total funding level of $2.2 billion, including $876 million in appropriated funding, for NRCS related programs and the $1.3 billion additional funding from CCC. Within the total appropriated, the budget proposes a net decrease of $6.2 million from the FY 2000 appropriated level that includes emergency funding.

Farm Safety Net Conservation Initiatives Conservation Security Program.

Under proposed legislation, the President's budget proposes a new $600 million Conservation Security Program (CSP) to be administered by the NRCS. Technical assistance costs are estimated at 15 percent, or $90 million, within the total $600 million amount. We believe the CSP will strengthen ongoing conservation efforts and farm income by providing annual payments to farmers and ranchers who implement certain conservation practices. Without it, landowners may abandon conservation measures because they don't have the necessary financial resources. Having such a program would greatly assist the financially strapped agricultural community. The CSP would enable farmers to stay in business while helping the public benefit from conservation on agricultural lands. Ultimately, all Americans would benefit from clean air and water, reduced erosion, improved wildlife habitat and sustainable soil.

Voluntary conservation on agricultural lands is a successful approach to achieving conservation goals for clean water and clean air. Installing conservation measures like conservation tillage and nutrient management practices also have provided gains for the environment. So everyone benefits from such a program.The Conservation Security Program would be broad-based to include family farms and ranches, non-program crops and private grazing lands, as well as traditional commodity sectors. Direct payments would be made to producers and operators to financially recognize and reward them for voluntary land stewardship. Farmers who are protecting our valuable natural resources would be rewarded and provided financial assistance to help them during down-turns in market and weather cycles.

Expanded acreage under Conservation Reserve Program.

Under proposed legislation, the total acreage enrolled in the Conservation Reserve Program administered by the Farm Service Agency, would be expanded to 40 million acres from the currently authorized level of 36.4 million acres. The 40 million level was originally authorized with the Food Security Act of 1985. This increase of approximately 4 million acres coupled with bonus payments proposed for the continuous signup would have the positive result of increasing net farm income, while promoting the installation of more grassed waterways, filter strips, and riparian buffers. Overall, it would encourage enrollment of environmentally valuable acreage into the program.

President's Clean Water Action Plan and Farm Safety Net Initiatives

Mr. Chairman, the President's budget proposes to increase conservation as part of the Farm Safety Net Proposal and with the President's Clean Water Action Plan and as an additional benefit increase net farm income. These include increased funding for the Environmental Quality Incentives Program, NRCS Conservation Operations, increased Wetlands Reserve Program acreage, and annual funding for the Farmland Protection Program and Wildlife Habitat Incentives Program.

For the Environmental Quality Incentives Program, the President's budget proposes a $325 million total annual level. As you know,* EQIP provides financial, technical, and educational assistance to farmers and ranchers who wish to implement conservation practices for land currently in agricultural production. Since the program was authorized by the 1996 Farm Bill, demand for the program has far exceeded the authorized funding level of $200 million. The budget proposal seeks an increase of $125 million to: address nutrient management and animal waste issues associated with the hundreds of thousands of Animal Feeding Operations (AFO) across the country; provide priority funding for environmental issues on tribal lands; provide assistance for Pacific salmon habitat recovery; and, fund demonstration or pilot projects for methane gas recovery and utilization projects.

Over the past decade, livestock manure has become a major environmental, social and political issue. The rise in the number of AFOs in recent years has brought greater concerns regarding safe drinking water and food. Two pathogens commonly found in livestock feces, Giardia and Cryptosporidium parvum, have been linked to impairments in drinking water supplies and food safety concerns if manure is applied directly to crops at inappropriate times. The toxic organism Pfiesteria has caused human illness in several outbreaks along the East Coast. The outbreaks have been associated with excessive phosphorous runoff from manure applications on agricultural fields. We have worked with the Environmental Protection Agency to develop and implement a joint USDA-EPA Unified National Strategy for Animal Feeding Operations as part of the President's Clean Water Action Plan. It is crucial that financial cost-share, technical and educational assistance from EQIP be available to producers to help them develop and implement comprehensive nutrient management plans.

The budget proposes to provide $50 million in annual funding for Wildlife Habitat Incentives Program (WHIP) in support of the President's Farm Safety Net Proposal. WHIP was first authorized by the 1996 Farm Bill and has used all of the $50 million authorized.

The President's budget proposes increased funding for Conservation Operations to provide additional NRCS technical assistance support for the AFO-related planning workload ($20 million), competitive partnership grants ($10 million) and increased funding for data collection and technical analysis, and pilot projects ($3 million).

In addition, the Farm Safety Net proposes to expand acreage for the Wetlands Reserve Program to meet the Clean Water Action Plan's goal of net increases in wetlands by 100,000 acres annually. Under proposed legislation, the WRP would be expanded to enroll 250,000 acres annually at a FY 2001 cost of $286 million. Re-authorized under the 1996 Farm Bill for an acreage total of 975,000 acres, the WRP will have enrolled all but approximately 40,000 acres by September 30, 2000.

Lands Legacy Initiative

Mr. Chairman, protecting our Nation's lands and preserving them for future generations is an important legacy we can leave future generations. Prime agricultural lands have been lost in small and mid- sized cities, not just near large metropolitan areas. Urbanization and development leads to fragmentation of agricultural land and the loss of prime farmland. From 1992 to 1997, nearly 16 million acres of agricultural land were developed.

The President's Farm Safety Net proposal funds the Farmland Protection Program (FPP) at a $65 million annual funding level beginning in FY 2001 to help states, tribes, and communities address the growing problem. The FPP was first authorized by the 1996 Farm Bill at a full funding level of $35 million through FY 2002. The funds were used by September 30, 1998 in 19 states to acquire over 127,000 acres using 460 easements.

Livability Initiative A new century poses new conservation challenges. We must work together to preserve our natural resources and make our communities more livable. As part of the Administration's initiative for promoting smarter growth, the President's budget proposes $5 million for the Community Federal Information Partnership and proposes $5 million for helping farmers plan, develop and implement biomass production systems.

The Community Federal Information Partnership is an effort designed to help the nation's communities make use of geo-spatial data by making it accessible to governments, businesses, academia and citizens. The $5 million requested would assist in the long-term development and maintenance of digital geo-spatial data that is critical to community development decision making.

The budget proposal also would help farmers interested in developing biomass enterprises by providing them with competitive start up grants and technical assistance.

Global Warming

As the President reported in his State of the Union message and in regard to what we hear almost nightly on the national news, global warming is one of the greatest environmental challenges of the new century. If we fail to reduce the emission of greenhouse gases, droughts will become more frequent and unforeseen negative impacts on the global ecosystem could result. The President's budget requests a modest ,$15 million for NRCS to expand soil carbon studies and conduct pilot projects to assess various crop and livestock management techniques.

Other Conservation Program Highlights

Watershed Flood Prevention and Operations

The President's budget proposes funding for Watershed and Flood Prevention Operations at $83.4 million. The funding request for FY 2001 includes a new loan program to assist communities who have aging dams that may pose significant safety risks. Under the proposal, local communities and states would be able to take out low interest loans to help them defray the costs of rehabilitating the aging watershed structures across the country.

NRCS Delivery System

Technical Assistance Funding for CCC Funded Conservation programs.

The 1996 Farm Bill provided funding for NRCS technical assistance in two ways for CCC funded conservation programs. First, for programs like EQIP, the technical assistance was provided within the authorized level. For other programs, like CRP and WRP that are authorized by acreage enrollment limitations, the technical assistance components come from CCC funding authorities under the CCC Charter Act Section 11 reimbursable transfer authorities. In FY 1999 Congress provided $35 million in additional funding for WRP and CRP technical assistance costs in FY 2000. However, more funding is needed in FY 2001 if Congress enacts the President's budget proposals for expanding CRP and WRP acres. Under proposed legislation, the President's budget proposes to exempt CCC conservation program technical assistance from CCC Charter Act Section 11 cap through two approaches.

For those conservation programs that have a funding level identified, the technical assistance component has been added to the proposed authorized funding levels. For WRP and CRP, the budget proposes specific language exempting WRP and CRP technical assistance from the Section 11 cap in FY 2001 up to a limit of $75 million.Increased funding for Conservation Technical Assistance.

The President's budget proposes an $86 million increase in funding for the Conservation Operations account. Twenty-eight million of the proposal is for funding to provide an increase in basic technical assistance to private landowners who are not typically participants in CCC cost-share conservation programs. The commitment to provide conservation assistance on private lands has become more difficult as NRCS has been asked to do more in recent years. This funding increase is essential for NRCS to continue to provide quality conservation on private lands. It will enable NRCS to place approximately 310 more trained personnel in the field to work directly with farmers, ranchers and private landowners.

Common Computing Environment Funding

Mr. Chairman, another important tool necessary for getting good conservation on the ground is the ability of the NRCS to collect, process and share data electronically with partner agencies and customers. A key ingredient in providing well coordinated, quality assistance at USDA service centers is the replacement of separate agency computers and aging information technology systems with common computing environment along with re-engineered business processes. The ability to share common information reduces the need for redundant information requests, the number of office visits and overall, the paperwork burden faced by customers participating in multiple USDA programs.The President's budget proposes to fund NRCS computer needs for FY 2001 under a Common Computing Environment, managed by the USDA's Chief Information Officer through coordination of an executive board that includes the Chief of the NRCS. The budget proposes $75 million for this effort. In addition, NRCS will support this effort by transferring additional funding, as necessary, to support the Department's modernization plan and service center initiative to the benefit of all USDA service center customers.

An important part of the efforts to modernize field operations for the Natural Resources Conservation Service, the Farm Service Agency and the Rural Development agencies is the effective consolidation of three separate and largely redundant administrative systems into one under the proposed Support Services Bureau. This is a glaring inefficiency that needs to be eliminated. Consolidated support would be provided for information technology, financial management, travel, procurement, civil rights, and human resources management. These services would be provided under the direction of an Executive Director who would report to a board of directors comprised of the heads of the service agencies. Unfortunately, language in the FY 2000 Appropriations Act prevented us from implementing our plans for the Support Services Bureau. I ask that you take a look at that language and work with us to move our operations into the modem world. By pooling resources in the administrative arena, each agency will be in a better position to provide greater program support.

Conclusion

In conclusion, the environmental and financial concerns facing American's farmers and ranchers pose a daunting challenge. But, we also have a great opportunity ahead. With your help, we can strengthen the family farm, make important investments in land conservation, and ultimately, leave a healthy environmental legacy for our nation's children.

This concludes my statement, Mr. Chairman. Chief Reed and I would be pleased to answer any questions you and Members of the Committee may have.

END

LOAD-DATE: March 3, 2000

Document 39 of 79.


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