Copyright 1999 Federal News Service, Inc.
Federal News Service
FEBRUARY 24, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
3957 words
HEADLINE: PREPARED STATEMENT OF
DAN
GLICKMAN
SECRETARY OF AGRICULTURE
BEFORE THE SENATE
COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
BODY:
Mr. Chairman, Members of the Committee, I am pleased to appear before you to
discuss the 2000 budget for the Department of Agriculture. In this context, I
will specifically address crop insurance reform, Russian food assistance, and
certain Y2K issues that are of interest to the Committee.
Even though the
Federal budget is now in surplus for the first time in 30 years, it is still
governed by the constraints put in place by the Balanced Budget Act of 1997. For
the second year in a row, President Clinton has submitted a balanced budget to
Congress. Within the constraints of the balanced budget, the Administration has
proposed the necessary resources needs to meet the basic goals and objectives of
its strategic plan as well as focus on some key Presidential initiatives related
to food safety, global climate change, open space and the environment. USDA will
continue to meet its core commitments of helping farmers manage risk, expanding
economic opportunities for farmers and all rural Americans, fighting hunger,
improving food safety, protecting our natural resources, investing in research,
and preparing American agriculture for the 21st century.
I would now like to
address the specifics of our budget for 2000 and its relationship to the goals
we have established for the Department.
ENHANCE ECONOMIC AND TRADE
OPPORTUNITY
The 2000 budget reflects the Administration's commitment to
improving economic opportunities for family farmers and rural Americans. This
goes for minorities, small farmers, and others who have been traditionally
underserved by our farm and rural development programs. Making USDA a fair and
equitable place for all Americans remains high on my list of priorities.
Although a strong general economy with low unemployment and low inflation
has helped keep needs and outlays down in our food assistance and other non-farm
programs, the farm economy continues under substantial stress in 1999. Farm
program outlays will be up significantly in 1999 and are projected to be
moderately high in 2000 as the farm economy faces continued challenges.
Depressed markets and natural disasters challenge our ability to respond to
the needs of our farm clientele. Congress and the Administration worked together
last year to include in appropriations for 1999 nearly $6 billion in emergency
assistance to farmers. Market loss and disaster payments, in combination with
marketing loan assistance, direct payments to pork producers, expanded export
and food aid activities, and other initiatives are making a difference, but we
are stretching the limits of our staff and field structure to deliver the needed
assistance.
The demands on our resources for assistance will remain heavy in
2000. As the President indicated in his State of the Union address, it is clear
that we need to work with the Congress to find a bipartisan way to improve the
farm safety net including crop insurance reform and farm income assistance.
Fromthe day he signed the 1996 Farm Bill, the President and I have continuously
called for a stronger safety net. 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. I believe this is a strong first step in improving and energizing
the program so that there is a preventive approach to farm risk management
rather than the uncertainty of ad hoc disaster assistance that is very costly to
taxpayers.
Crop Insurance Reform
We are continually working to improve
the crop insurance program, because we believe there is widespread support for
the program. We have some specific proposals that we want to work on closely
with the Congress. We have issued a white paper which spells out the
Administration's principles and preliminary proposals for reforming crop
insurance. I want to emphasize , that while crop insurance is the centerpiece of
the safety net, we also need to look at a broad range of ideas to help farmers
manage risk. They include ideas on how to improve crop insurance and the safety
net -- from more crops covered to making crop insurance affordable, to including
multi-year policies to a new pilot revenue insurance program for livestock, to
non- insurance proposals like extending due dates on commodity loans or
subsidizing on-farm storage.
I plan to hold at least 3 regional forums
around the country to get input on how we should go about improving the crop
insurance program and the farm safety net.
Through these forums and
discussions with Congress, the Administration intends to build upon our
proposals to forge a bipartisan agreement on cropinsurance reform. A strong
safety net will be costly. But, I believe that if Congress and the
Administration work together, we will find the money, just as we have done in
the past. Together we will make the tough choices necessary to ensure that our
farmers can continue to feed the Nation, and much of the world, knowing that
some of their downside risk is protected.
Credit
Farmers and ranchers
also need access to adequate credit if they are to remain in business. To
supplement credit from private lenders, the budget requests about $3 billion in
farm loans and guarantees, up slightly from the 1999 level of $2.8 billion
including loans provided through the 1999 emergency supplemental, but with a
subsidy cost of about $50 million less than last year due to the lowest interest
rates in a generation. We also are reviewing the adequency of funding for our
farm credit programs in 1999.
The settlement of the civil rights class
action lawsuit represents a major step in our efforts to address the past and to
move forward with better service to minority and small farmers, consistent with
our commitment to enhance opportunities for all vital segments of the rural
community. We are pleased that Congress waived the statute of limitations and
that we were able to reach a settlement with African American farmers relating
to their long-standing complaints about discrimination in the Department's
handling of farm loans.
Exports
Events of the past year have clearly
demonstrated that strong export markets are a critical component of the farm
safety net, but they have also demonstrated that exports are but only one
dimension in providing a comprehensive safety net. Market disruptions in Asia,
Latin America, Russia,and elsewhere have had negative effects felt throughout
the farm economy and rural America. We have responded to those challenges by
utilizing our program authorities aggressively to ensure the continued flow of
U.S. agricultural exports. We increased the programming of export credit
guarantees to Asian markets. As a direct result, sales registrations under the
programs were up 40 percent last year.
We also continue our strong efforts
to open new markets through trade policy actions, including preparation for the
new round of multilateral trade negotiations set to begin later this year and
through negotiations in the Asia Pacific and Western Hemisphere regions.
The growing challenges posed by technical barriers to trade, such as
sanitary and phytosanitary barriers that are not scientifically based, also
continue to be addressed vigorously.
For 2000, the budget provides a total
program level of nearly $6.5 billion for USDA's international programs. This
includes $4.5 billion for the CCC export credit guarantee programs, which will
continue at last year's expanded level. I will not hesitate to make more credit
available if it is needed.
Foreign Food Assistance
We have taken a
number of important actions to assist countries meet their food and agricultural
import needs this year -- actions which also help maintain agricultural export
levels and support farm income. Last July, the President announced his Food Aid
Initiative under which approximately 5 million metric tons of wheat and wheat
products are being made available for donation overseas through foreign
governments, private voluntary organizations, and the World Food Program. We
expect to complete programming this wheat by theend of the fiscal year and to
complete shipments by the end of the calendar year.
We have also developed
and are implementing a major package of assistance for Russia, which is intended
to alleviate serious food and feed shortages there. The package includes over
3.1 million metric tons of commodity assistance, including 1.5 million metric
tons of wheat which is being made available under the President's Food Aid
Initiative. The total package is valued at $1.2 billion, including $880 million
for the estimated value of the commodities and about $300 million for associated
transportation costs.
This aid package has several objectives. We want to
increase food supplies to vulnerable groups and regions, making sure the food
reaches its intended destinations. We are also providing feed grains and oilseed
products to help bolster Russia's ailing livestock sector, and we are looking at
other ways to assist agriculture.
The first shipment of commodities,
vegetable seeds, is scheduled to leave Norfolk this week and is expected to
arrive in St. Petersburg around March 10. Shipments of wheat to Russia under the
President's Food Aid Initiative should begin in about 2 weeks, and grain tenders
under the P.L. 480 Title I credit agreements are expected to begin shortly. We
have concluded agreements with four of the five private voluntary organizations
that will be involved in the direct distribution of food. Shipments under the
first of these agreements are expected to begin by mid-March or sooner.The U.S.
and Russian governments have established an unprecedented monitoring program to
ensure that the food aid reaches the targeted populations throughout Russia.
USDA is devoting substantial resources to monitor the delivery and distribution
of the assistance, including stationing additional USDA staff in Russia to aid
in this effort. USDA is also working with other U.S. government agencies at our
Embassy and Consulates to expand the oversight effort, and we will, if
necessary, send additional staff.
Our aid to Russia is a temporary measure.
As we look down the road, our interest, along with that of the rest of the
world, is in the recovery of the Russian economy and its purchasing power, and
the resumption of its role in global commercial trade. Russia has been an
important market for U.S. agriculture, especially our poultry industry, and it
is in our best interests to see the Russian economy improve.
Rural
Development
This Administration believes that rural Americans should be able
to take advantage of the same opportunities for economic growth that exist in
urban areas -- that goes for housing, running water, electricity,
telecommunications, and job opportunities. Our rural development programs make a
significant contribution to the quality of life in rural areas, promote equal
opportunity, and serve as a bridge to the future.
Overall, the 2000 rural
development budget will support almost $11 billion in loans, loan guarantees,
grants, and technical assistance -- $800 million more than 1999. Yet again,
because of the strong economy and low interest rates, the cost to taxpayers to
help rural America will be $400 million lower than last year. We are helping to
create or protect over 100,000 jobs by providingover $1.1 billion in guaranteed
and direct loans to help rural businesses. Our budget includes $4.3 billion in
direct and guaranteed loans to bring single family housing to 50,000 rural
Americans adding to the highest home ownership rate in the Nation's history.
And, to meet the goals set in the President's Water 2000 initiative, we've
included a 12 percent increase in funding to help over 1 million rural Americans
have safe, affordable drinking water. The Administration will also propose
legislation to provide $15 million annually in mandatory funding to fund grants
to 5 new rural Empowerment Zones and 20 new rural Enterprise Communities.
Marketing
Our marketing programs continue to be important to the
economic health of U.S. agriculture. The budget requests increased funding for
pest detection, disease prevention, and border inspections. We have several
proposals that will help farmers and ranchers stay competitive in an
increasingly concentrated market, especially the meat and poultry markets. Our
budget requests funds to implement the organic certification program, address
market concentration, and to broaden the pesticide data program.
Research
Research is critical to the future economic growth of agriculture and it
undergirds much of what we do in the Department. Advances in research and
technology are the keys to many of the most challenging problems we face in
agriculture, and there are budget proposals that address these problems,
especially helping farmers increase their productivity to improve their
competitiveness, while providing a safe, nutritious food supply and preserving
our natural resources. The 2000 budget proposes an increase of 8 percent for the
research mission areas of the Department from the comparable 1999 level. This is
the first substantial inflation-adjusted increase for these programs since 1992.
The research budget reflects the priorities outlined in the Research Reform
Act of 1998. 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 Act, for competitive research, education, and
extension grants to address critical and emergency issues. Mandatory funding is
also available under the Fund for Rural America, where between one-third and
two- thirds of the $60 million total is to be provided for a wide range of
research and education activities in 2000, based on decisions to be made after
appropriations for 2000 are enacted.
HEALTHY, SAFE, AFFORDABLE FOOD SUPPLY
Our budget request also supports our Continuing major commitment to fighting
hunger in America and ensuring consumer confidence in the safety of the Nation's
food supply.
Food Safety
The budget includes an additional $67 million,
almost two-thirds of a governmentwide increase of $107 million for food safety
activities aimed at reducing microbiological contamination of foods. These
increases will be directed to the President's Food Safety Initiative and
inspection modernization activities of the Food Safety and Inspection
Service.USDA is well into the process of modernizing its 90-year-old meat and
poultry inspection system. We are celebrating the first year anniversary of
HACCP implementation in large plants. Recent results demonstrate that 90 percent
of large HACCP establishments met the Government's Salmonella performance
standards and that there was a significant reduction in the prevalence of
Salmonella due to the implementation of HACCP. These data indicate that the
Administration's science-based inspection system has already had a significant
effect on the safety of food American families eat.
We are also working with
the Environmental Protection Agency (EPA) at the Vice President's direction to
ensure that producers will continue to have the means necessary to provide a
safe and affordable food supply, while meeting the goals set out in the Food
Quality Protection Act. We owe it to our farmers to make every effort to assist
them in the transition to an agricultural system that addresses environmental
and public health risks associated with the use of pesticides.
Nutrition
Assistance
We have the most affordable, safest food supply in the world.
Yet, many low-income people need nutrition assistance to take advantage
of it. The budget reflects full funding for this effort -- for Food Stamps,
Child Nutrition, and the WIC program.
Over two-thirds of the $38 billion
requested for the nutrition programs will help low-income children receive the
nutrition they need. The programs also set a good nutritional example by
promoting a proper diet, so that recipients can learn how to maintain good
nutrition levels in the future. We have also included funds to jump start a plan
to improve program integrity, to evaluate the effectsof a universal free school
breakfast pilot project and to expand the WIC farmers' market program.
We
are also taking another step toward fixing one of the wrongs of the welfare
reform bill by restoring food stamp eligibility to 15,000 elderly legal
immigrants as part of funding to support over 20 million food stamp
participants.
Strong Federal programs will always be the bedrock of
America's antihunger effort, but I believe the Government should also assist
community-led work. Our budget includes a new $15.8 million gleaning and food
recovery initiative to provide community-based grants to help neighborhood
organizations recover edible food and use it to help alleviate hunger. I believe
there is the potential for far more successful food recovery programs which this
initiative will help us realize.
MANAGEMENT OF NATURAL RESOURCES
In
order to keep American agriculture competitive into the 21st century without
sacrificing our critical natural resources, farmers will need adequate levels of
financial and technical conservation assistance.
USDA's conservation mission
has dramatically expanded and become more sharply focused during my tenure as
Secretary. The 1996 Farm Bill's conservation programs have given USDA the best
array of conservation tools that we've ever had, and I would like to build on
this success. Thus, we are requesting the level of funding that the Natural
Resources Conservation Service (NRCS) will need to protect and strengthen the
core conservation technicalassistance and watershed work that it carries out.
The budget also supports implementation of the Administration's Clean Water
Action Plan and the Unified National Strategy for Animal Feeding Operations to
protect our rivers and streams. To help implement these plans, the budget
includes legislation to increase funding for the Environmental Quality
Incentives Program (EQIP) to $300 million.
Our other conservation and land
retirement programs are also continuing to have a positive impact on the
environment. We have just completed our 18th Conservation Reserve Program (CRP)
signup and based on the public's response, all indications are that the new
environmentally-focused CRP continues to be our most effective conservation
tool. The Wetlands Reserve Program (WRP) will reach a major milestone in 2000 as
we enroll nearly 200,000 new acres to reach the statutory enrollment level of
975,000 acres. I am also proposing to reauthorize funding for the Wildlife
Habitat Incentives Program that provides cost sharing to landowners to help them
install a variety of practices to develop wildlife habitat.
Last year Chief
Dombeck, at my direction, developed a natural resources agenda for the 21st
Century for the Forest Service. I strongly support its four emphasis areas:
watershed health and restoration, sustainable forest management, recreation, and
forest roads. For fiscal year 2000, we again are using this agenda to establish
spending, legislative, and regulatory priorities.
The President's
Lands Legacy initiative will help USDA address the serious
problem of prime farmland loss and to provide the tools for localities and
States to plan for smart growth and open space preservation. Much of America's
farmland is near major cities and, as our cities continue to grow
intoneighboring rural areas, our farms are in danger of becoming subdivisions or
shopping malls. We can no longer take our prime farmland for granted. The
budget's proposal to reauthorize CCC funding for the Farmland Protection
Program, as well as financial support from the Lands Legacy
initiative, will help protect our best farms and the food they supply
for our families. Forest Service land acquisition will continue to add land
valuable to recreation, wildlife habitat, and watershed protection to the
national forests. Other Forest Service programs will provide financial
assistance to States that wish to preserve private woodlands threated by
conversion to other uses.
This budget also supports the Administration's
Global Climate Change initiative by providing a large increase in funding to
develop more accurate baseline data and to conduct demonstration and research
pilot projects.
CUSTOMER SERVICE AND PROGRAM DELIVERY
I place a high
priority on improving customer service and program delivery. As 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. The plan will also consolidate administrative support functions
for the county-based agencies through the 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
contribution to the current favorable Federal budget situation.I know that there
is a great interest in the Department's progress in remediating our internal
systems for the Year 2000 as well as our outreach efforts, especially with
respect to small businesses and rural utilities.
As we noted in our most
recent report to the Office of Management and Budget, three-fourths of the
mission critical systems we are tracking are now compliant. Agencies are
conducting tests on many of our remaining systems prior to certifying their
compliance as well. We expect to achieve near total compliance by the March 31
government- wide deadline.
This does not mean that our work will be done. We
will continue to work on our non-mission critical systems, including the
deployment of more than 22,000 personal computers. We are redoubling our efforts
to assure our facilities, laboratories, and telecommunications equipment are
functional. And, we will continue to test all of our systems to assure that the
Department is fully prepared well before January 1, 2000. Recognizing that not
everything is within our immediate control, we will focus on business continuity
requirements and continue to make contingency plans so that all of our programs
will be delivered even if some glitches do occur.
We are also taking
seriously our responsibility to work with our partners, be they States or
private entities. We are continuing to work with the States to monitor the
status of food and nutrition programs which are vital to millions of Americans.
We are giving special attention to the interests of rural America. As part
of our work with the President's Council on Year 2000 Conversion, we are joining
with the Small Business Administration and the Department ofCommerce to fully
engage small businesses in meeting the Year 2000 challenge. Our Cooperative
State Research, Education and Extension Service will focus on rural America by
helping to train core teams in each state who will provide direct assistance to
small businesses on remediation of Year 2000 problems.
In conclusion, I want
to point out that over the last few years, we have tightened our belts to become
more efficient in response to constrained or reduced funding. USDA agencies,
across-the-boa, rd, are carrying out a heavy workload and at the same time we
are expecting staff to provide a high level of customer service. Our goal is to
do a good job in delivering the programs the Congress has put in place. We are
the "people's department", here to serve all Americans equally, with fairness
and respect for all.
END
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