TESTIMONY
OF U.S. AGRICULTURE SECRETARY ANN M. VENEMAN
2002 APPROPRIATIONS HEARINGS
APRIL 25, 2001

(As Prepared)

Mr. Chairman, Members of the Committee, it is an honor for me to appear before you to discuss the fiscal year 2002 budget for the Department of Agriculture.

I have with me today our Chief Economist, Keith Collins, and our Budget Officer, Steve Dewhurst.

I will make a relatively brief statement, and then we will be available to respond to your questions.

I would ask that my full statement be submitted for the record.

I want to begin by thanking the Committee for its support of USDA programs and for the long history of effective cooperation between the Committee and the Department.

I enjoyed a productive relationship with this Committee when I was Deputy Secretary in the early 1990's.

I want to preserve and strengthen that relationship in the future.

I look forward to working with you, Mr. Chairman, and all the Members of the Committee toward that objective.

As you know, the details of the President's Budget Proposals were released on April 9^th.

For the activities within the jurisdiction of this Committee, the Department is requesting appropriations for 2002 which total $72 billion, an increase of $883 million for the Department's on-going programs.

It's important to note, that in 2001 there was more than $4 billion appropriated for emergencies.

This budget does not include approximately $3.0 billion of that spending because it was mostly one-time emergency spending where the missions have been completed.

By any measure, this is a responsible, yet restrained budget.

It meets the President's objectives of slowing the growth of Federal spending, funding urgent national priorities, achieving historic levels of debt reduction and providing tax relief.

Farmers and other beneficiaries of USDA programs all have a stake in these objectives.

As you know, the Department is responsible for a very diverse set of programs.

It is always difficult to find the appropriate balance for funding them.

Nevertheless, we have tried very hard to provide adequate funding for the most urgent issues facing American agriculture.

And, we look forward to working with the Committee as it proceeds through the 2002 budget process.

However, I do want to emphasize that in order to get the growth of spending under control it is important that the levels that we are recommending to you today be supported.

This budget was developed to include sufficient funding to carry out key priorities such as:

· Making sure we have the funding and legal authorities we need to strengthen our agricultural quarantine inspection activities and combat pest and disease infestations;

· Providing the overseas market intelligence and technical expertise needed to support agricultural trade;

· Implementing the new Agricultural Risk Protection Act so that farmers will have the benefits of improved crop insurance as soon as possible;

· Providing adequate funding for our food safety activities, particularly the meat and poultry inspection workforce of the Food Safety and Inspection Service;

· Supporting our food assistance programs at levels consistent with the anticipated need for those programs;

· Providing adequate funding for the Department's rural development activities, with particular emphasis on water and sewer facilities; rural housing; and efforts to improve the access of rural areas to technology, particularly the internet;

· Providing continuing support to landowners, farmers, and ranchers through the Department's conservation programs; and

· Redirecting USDA research into important, new areas.

With your permission, I would like to briefly make some additional comments on a couple of the areas I just mentioned.

Pests and Diseases

As you know, there has been much attention this year devoted to issues such as foot-and-mouth disease and bovine spongiform encephalopathy (BSE), particularly given heightened concerns about the situation in Europe.

Preventing the introduction of these diseases into the U.S. is the best way of dealing with these threats.

I have said many times that pests and animal disease prevention and eradication programs are the very infrastructure to protect agriculture.

For 2002, we are requesting an increase of $174 million in appropriations for APHIS programs which will allow us to continue emergency programs underway in 2001.

Specifically, we are requesting almost a 40 percent increase over 2000 levels for the Agricultural Quarantine Inspection (AQI) program in order to increase the level of inspections along U.S. borders and ports of entry.

In order to provide more inspection resources at borders and ports of entry as soon as possible, I have authorized use of an additional $32 million of AQI user fees over two years beginning in FY 2001.

Using these two sources of additional funding we will be able to increase staffing in the AQI program by over 900 by the end of 2002 -- more than 35 percent higher than 2000.

We have also taken a number of other actions in response to the outbreak of foot-and-mouth disease abroad.

We have tightened regulations to prohibit shipments of livestock products from high risk countries, strengthened Federal, State, and industry coordination, implemented education campaigns and dispatched U.S. experts to provide technical assistance overseas.

All these measures have been taken to reduce the risk.

And, we continue to review and examine all existing programs to ensure this Department has all the necessary means to 1) prevent the possible entry of FMD; and 2) ensure that if we ever faced an emergency, that we have the resources and capability to quickly contain and eradicate.

Concerning BSE, we are proposing a research initiative for the Agricultural Research Service to determine the nature and transmission of the disease and to develop improved detection and diagnostic tools.

Early detection of the disease before symptoms appear is a priority, both to eradicate the disease and to prevent hazardous products from entering the food chain.

Food Safety

Concerning food safety, this budget does not propose any new user fees for meat, poultry or egg inspection.

However, it does request additional funding to support a workforce sufficient to meet industry demand for inspection services, so that there is no disruption in slaughter plant operations due to a lack of inspectors.

Our goal is to make sure the food supply is safe and protect it from the variety of hazards that pose a threat.

In that regard, we are also currently conducting a review of our food safety programs to ensure regulations and programs are meeting the goals of protecting consumers.

Trade

We believe this budget carries out the President's commitment to expand markets for American agricultural products.

I have personally spent a lot of my time over the years dealing with trade matters and I want to make sure the Department is well equipped to do the job in this area.

In this regard, I would like to emphasize the importance of funding our request to bolster the Department's capabilities to address technical trade issues and to strengthen our market intelligence capabilities at our overseas posts.

In addition, we are proposing funding for our credit, market development and export enhancement programs at or above 2001 levels.

We also will be aggressively pursuing international negotiations to reduce trade barriers and open markets for our farmers and ranchers.

Farm Programs

Finally, I would mention a couple points on the farm assistance side.

Farmers have been through some tough economic times in the past several years and there is continuing uncertainty about the future.

We are closely monitoring the crop and market conditions and if additional assistance is needed, we will work with the Congress to determine the nature and extent of that assistance.

There has been an extremely heavy workload in our county office service centers assisting farmers.

We expect the heavy workload to continue into 2002 although with some moderation.

In order to deal with providing adequate assistance to farmers, we will need greater funding for the salaries and expenses in the Farm Service Agency.

As is noted in the budget request, we have proposed some additional funding to properly implement the reformed crop insurance programs authorized by Congress last year.

As well, additional funding is included to assure that farmers have access to the credit they may need to carry out their farming operations.

With that I will conclude my statement.

I am looking forward to working closely with the Committee on the 2002 budget.

I know that one of the first things we can do to help the Committee is to make sure you have all the information you need as you proceed to make decisions about the 2002 budget.

You have received our Budget Justifications and other supporting material.

If there is additional information that you need, please do not hesitate to let us know.

Now we would be glad to respond to any questions you may have.

#