on the vine which it was? does my right honorable friend therefore agree -- [shouting] -- i agree that there are better things to spend 600 million pounds on than introducing a bit of an anomaly? >> well, i can reassure my honorable friend that we will be continuing to invest in the short starts his. we will continue that the child tax credit. we will conclude that child trust fund, and i can reassure her we will not be reproducing a married man's tax allowance which would give 13 times more to the richest people than to the poorest people. it will not encourage one single couple to get married or to make them happy in their marriage. but it does send, and i think this is what it is cruel, because it sends a very clear message to children in families where the parents are divorced. it says to them there's something wrong with your family, therefore, there must be something wrong with you.

and that's another reason why we would never introduce this. >> thank you, mr. speaker. five years ago a young person in my constituency was on the outreach eight months before they got a job. that figure now stands at 18 months. the highest figure in the northwest. isn't that the real reality of what this government have failed young people? >> the reality is that there are four times fewer people unemployed now in this recession than the were in the previous recession, because of the action that we have taken. and i can assure him that we will fight hard to support industry. we will fight hard to support jobs, and particularly jobs for young people. and that's why we've introduced the future jobs fund with a guarantee that after only six months every person under the age of 24 will be guaranteed

work or training. >> thank you, mr. speaker. can my right honorable friend and form the house that the government has received representations from the electoral commission of foreign money being used to i constituency? >> well, i think there is an important issue that my honorable friend has raised. it is evident that the toward party is for sale, but britain is not. [shouting] >> town crier and firefighter dave taylor has got cancer. his doctor, his oncologist has described him medicine which is not approve. what can she do to keep this man alive in? >> well, the national institute for clinical excellence is independent, and acts on the best scientific and medical advice. and i pay tribute to the progress that has been made in

cutting the loss of life from cancer. and the work that is done i oncologist and throughout the health service, which is improved people's length of life and improve healthcare, and that's one of the things that has benefited from the great increase in investment that we have put forward. and also, that i would ask him to back our commitment that there should be a one week guarantee that after visiting your gp with a suspect, suspected cancer, you should get to treat -- you should get to see an oncologist. >> we come now to the main business. >> from london you have been watching prime minister's question time from the british house of commons. aired live every wednesday where parliament is in session at 7 a.m. eastern on c-span2. you can see this again sunday night at 9 p.m. eastern and pacific on c-span. for more information go to c-span.org.

>> agriculture secretary tom vilsack was on capitol hill today to outline the administration's budget proposal of nearly $150 billion for his department. an increase of about 10%. that includes almost 123 million in mandatory spending that increased attrition programs, food stands, and decreases on farm subsidies. this is two hours. >> good morning. today we begin our hearings on the fiscal year 2011 budget for the department of agriculture. we would like to welcome secretary vilsack. is accompanied by dr. kathleen

merrigan, deputy secretary, and dr. scott steele, the usda budget officer. we thank you all for being here. last year this subcommittee worked in a bipartisan manner that produce effective and efficient results. with an adequate there was much collaboration across the aisle. we were able to provide usda with much-needed increases in programs like food safety, which had long been underfunded. and we were rewarded for our bipartisan cooperation by getting our bill out nearly on time, which as everyone knows was a welcome change. this year the numbers are a little different but i'm hopeful the process will be much the same. the president's budget proposes 21.5 billion for discretionary programs at usda for fiscal year 2011. this is ashley a decrease from last year, and i'm pleased that usda is showing fiscal

restraint. it is an comment upon this subcommittee to review all these proposals were three priorities in mind. first, we need to produce a bill that protects important gains made last year. second, we need to ensure that programs by two people's health and safety and livelihood are adequately funded. and third we need to do so in the way that shows fiscal restraint and responsible austerity. briefly come here are a few of the major increases in the budget as i see them. the wic program which we consider it essential we seize funding necessary to provide assistance to roughly 10 million low income women, infants and children. the food safety and inspection service budget receives an increase smaller than those of the past several years but nevertheless an increase in order to maintain the safety of our food supply. the farm service agency received a large increase in order to pay for much-needed information technology upgrades, which will

allow farmers to continue receiving assistance. there is a small increase in agricultural research funding. the foreign agricultural service receives a significant increase for export trade activities. finally we have additional welcome emphasis on healthy local food production. all these increases however are more than offset by decreases in other programs like conservation, research, rural development, and others. further, the budget proposes to reduce multiple farm bill programs at this subcommittee has work to protect and which will serve raise opposition. none of these options are off the table and everyone needs to be aware of that. clearly we all have to tighten our belts. will surely work to ensure that the department has all of the funding necessary to serve the american people.

while we have been able to provide some necessary increases over the past several years, we will be taking a long, hard look at the budget, the proposed increases in new initiatives as well as the proposed decreases. we all look for to working again with senator brownback and a bipartisan manner. we need to produce a bill that is reflection on the importance of the usda, but also a reflection of the need to slow spending growth. so secretary vilsack, we welcome you again for being here and look forward to your test of -- statement that before that we like to ask senator brownback for his statement. senator brownback? >> thank you, mr. chairman. appreciate hearing. welcome secretary. good to have you here. we had a good process last year that work successfully and quickly, and kind of the way the place is supposed to, which is pretty amazing in and of itself. and i give that applause to the chairman. i know in a cursory review of that you have worked with former

budget, cutting some places, putting higher priority and others which is the way i think will to look at things that if you have a high priority, put the money there, but don't just asked for more money. get it from somewhere else in the budget. we may have some questions about where you got and have suggestions about other places that you may get from, but i applaud that round of going. i've got two suggestions to you, that we're going to be working on. what is on the agriculture development legend, and here, this is one that's going on in another committee. but i think you're the one that's got the expertise on a. you are seeing a lot of agriculture develop at work starting in other sectors of the budget, particularly a.i.d. and i think you're the one the primary expertise, or you and the land grant university system. we're going to be pushing this and other sectors as to ways that we can see that budget fit better together. gates foundation and others are really stepping up in this

field. they stepped up and the health field on developing countries, and together, we've had a huge drop in aids, gas overseas, malaria is getting more under control, not complete by any means. and this is the best foreign policy tool we've got. when you save somebody's life. the next up and that is agriculture development, and to see it develop. this is a historic role that plays like i was day, kc, missouri, wisconsin and others have played for many years. but you have i think the best connection to the. i would really like to see us what we can do in the. the final one that i think is key, and you got my opening statement is the next generation on biofuels. there's just no question that this is a big deal for us and farm country. i was at an ethanol plant the other day that is feeding wet distillers grain. they can sell it 30 cents cheaper than if you have to dry

it. they are taking the co2 straight to an oilfield for recharge purposes. i was at golden, colorado, where they're working on the cellulosic ethanol. they believe they can make it as price effective with a grain ethanol by 2012. and i think that's going to really help us in agriculture, having a grain stream and the cellulosic stream, probably in the same plane. and i can't think of it bigger than forced to work on for market development and share than this next generation on biofuels, i'll based products, added group the other day pca hand me some chap stick that was out of soy oil. at a guy a few years ago hand me a blue rock, was made out of corn starch. you know, just little widgets, little tiny market segments, but all of them add up, all of them at you renewable uses.

and they are good products. and i really think that's one that come in for going to serve farmers and rural areas of this country, there is not a better place for us to invest time and effort. and focus in research dollars. and you've got the lion's share of that even though other areas are working on. and we hope we can work with you on those. chairman, look forward to the comments and questions. >> thank you, secretary brownback. and that we turned you, mr. secretary, for your stated. smack mr. chairman, thank you and much am for the committees of the thank for the opportunity to appear today. as the chair indicate i'm here with deputy secretary american and esther steel in an effort to try to educate the committee on our priorities. let me say that we start this budget process with four friends in mine. the first front is a recognition of the economic debacle is the country currently faces, which is reflected in a continuation of supporting programs like snape and went our food is as

programs which make up 70 percent of our budget. we will continue to provide the nutritionals assistance necessary to take care of america's families. as was mentioned by both the chair and senator brownback, we also recognize the fiscal challenge that this country faces and the senate and house faced in putting a budget together. which is why we made an effort to try to propose a budget with reductions in discretionary spending, recognizing full well that there are difficult and tough choices that have to be made by this committee, by this congress. we laid out what we believe would be the appropriate choices but are certainly open to working with this committee and a house committee on thoughts and ideas that you all have. i will tell you that while we were also struck by the state of the world economy. while the country has faced a recession for the last two years, i think i can make the case that rural americans face a recession for the number of decades. if you take a look at the statistics, which was the is in a rural america there's a higher poverty rate, higher unemployment rate, a loss of

population with over 50 percent of rural counties having lost population in the last decade. the facts are fairly clear that there are less educated in terms of college-educated and high school educated individuals living in rural america, and there is an aging of rural america, all of which is reflected also in statistics relative to farms we saw a 30% increase in the number of farmers over the age of 75 and a 20% decrease in number of farmers under the age of 25. we're proposing and suggesting a slightly different direction as it relates to rural development. we believe that we need to focus less on individual community and project by project effort and focus more on recognizing that smaller commutes are part of a regional economy. and looking for ways in which we can bolster the regional economy in order to create greater activity. we think this is a strategy that

a number of communities have banned together in parts of the country and are seeing positive results. we think this rural strategy in this regional strategy should be focused on five basic pillars. first, of all, a continuation of the efforts that this congress appropriate in terms of expansion of broadband to all parts of america, both rural and remote areas. and the opportunities that that presents. secondly, and senator brownback indicated, and we'll focus on biofuels and bio-based products and the energy potential that can be great in our farm fields that recognizing that this needs to be not just focused in one part or one region of the country, but as our biofuels task force indicates an opportunity for us to have regional economic opportunity and all parts of the country using a variety of feedstocks to create biofuels and bio-based products. this can happen in all parts of the country and it can create greater energy security for this country, promote national security, and also significantly

help the world economy. we think there's also a need for us to continue an effort to link local production of local consumption of farm products, creating opportunities for schools, hospitals, prisons and the like to be able to purchase locally produced food in order to keep the wealth in the region and in the community. the establishment of the ecosystem markets under the 2008 farmville create an extraordinaire opportunity for us to focus on water, carbon and habitat protection as another alternative income source for farm families across the country. and finally, an aggressive effort in force restoration and private land conservation. we see this is actually historic in the sense that we will propose extending conservation programs to over 305 million acres, an increase of about 10%. also focusing those acres on acres in programs that really matter in terms of creating more habitat which in turn will create more hunting and fishing

opportunities, which is an often overlooked economic opportunity in rural economy. these vipers we believe can create higher income, better paying jobs and attract young people to stay and to come to rural communities that we would like the opportunity to prove that case with you with a proposal we have set forth in our budget. this process will be aided by our focus on research and development, recognizing the need for competitive grants. we have maintained a formula funding for our research efforts that have suggested that there needs to be competition for other research dollars. and so we're proposing record amount of competitive grants focused in four or five major areas that the energy area as was mentioned, the need for us to continue to look for ways in which we can increase productivity and protection of crops and animals from disease and pest and invasive species. a focus on food safety, a focus on obesity and nutrition, and finally a focus on the capacity of agriculture to mitigate to

change in climates. given the first ladies let's move initiative, we believe the last frame reflected in our budget stems from the centerpiece of her let's move effort, which is the reauthorization of the children, child nutrition proposals. an opportunity to substantially expand efforts in the school lunch and school practice program gives us an opportunity to create more fruits and vegetables in the diets of our young people, responding to the very strict obesity epidemic we now face a, as well as a strategy for being with the fact that we still get today in this rich and powerful country have hungry children. we also recognize the responsibility that we have that usda to provide the safest and most abundant and most affordable food supply. so there's continued emphasis on food safety with a focus on increase prevention, veterans affairs and risk assessment and more rapid response to recall and recovery. while there is a small budget

increase in food safety, there's been a tremendous amount of effort and focus on the radio zoisite of food safety and in an effort to better utilize the resources that congress has provided. we believe this is a good budget, a strong budget, a budget that has elements of reform in response to the challenges that we face in rural america and look forward to the opportunity to answer your questions. >> thank you very much for that fine statement. mr. secretary, last year farmers in my state of wisconsin as well as all round the nation the worst downfall in prices in history as you know. we are able to provide some direct assistance to dairy farmers in our bill last year, can you please update us on what usda has done to implement the assistance we provide? are the things you've done to stabilize the dairy sector as well as your outlook for the coming year? >> mr. chairman, the dairy outlook is, i think, much better than it was lashing when we're faced with record low prices. there has been a slight rebound

in prices and our hope is that we'll continue. we took aggressive steps last year in the form of increasing price supports, encouraging and expansion of the dairy export incentive program to spur exports and to allow us to be more competitive. we focused on, as you know, rapidly implementing the support and assistance that congress provide at the tail end of the year, distributing roughly 270 million of the 290 million that was provided by congress in the supplemental appropriation. to farmers pursuant to a formula that try to mirror the milk payment structure. with a few modifications to ensure an equitable dish a vision of those resources among all dairy farmers. the balance of the $350 million has been using purchasing cheese in an effort to make sure that all of the dairy farmers throughout the country have been assisted to this effort.

i think it's fair to say that we have the resources out, and i think it will give a quick period of time. the cheese purchases have i think recently been concluded. and so at this point we have eliminated or utilize all the resources that congress has provided, with the exception of a small percent of the cached items to make sure that if we made mistake on a new calculation or payment calculations that we can correct that mistake. >> thank you, mr. secretary. the american recovery investment act of 2009 provided funding to support increased with participation, according to this budget, not all this money has been yet allocated. will usual transfer authority to obligate any of the remaining funds from the recovery act for other nutrition programs come or will these funds be returned to the treasury? >> mr. chairman, we are watching very carefully to the resources provided in the recovery act in

terms of nutrition assistance. we are hopeful that we are making the right set of decisions. i will say that with a snap with seen a rather dramatic increase in the numbers. we have an associate that same corresponding increase in some of the other programs, and we are working with states to make sure that come with a tough budget situations that states face, that they aren't reducing the administrative assistance and help to get the information out about these programs. so we are cautious about transferring resources from one program to another, and children are confident that the trends we're seeing in snap are not all of a sudden going to be recognized in wic are some of the other programs. i visit, our goal is to make sure we do as much as we possibly can with this attrition assistance. and the reason for it is not just to make sure that people have adequate resources to buy groceries, but also the economic stimulus that these items represent. for every dollar we spend in a snap program for example, we

know there is $1.84 in economic activity. we know it has helped to retain jobs in grocery stores and trucking facilities, processing facilities around the country. so we're going to be careful about how we manage these resources. our budget doesn't request additional resources for wic. because we know that leads to healthier start for our youngsters. we will continue to monitor this. >> just to follow on, the budget includes as you know a big increase for the wic program because this program as you know is a volatile as well as a central. do you believe the budget is sufficient to cover the man for the wic program given the recent history about forcing food costs as well as other programs? >> i do because in part to rather dramatic increases with seen in food costs are not being reflected in the numbers we're seeing for food increases this year. there has been a moderation of those increases, number one. on the other hand we change the

wic package to include more nutritious choices and options. and so we are obviously on making sure that we keep an eye on the cost of the package. because we want to encourage more nutrition. frankly what we're also focusing on expert is expensive 27 straits that are making an icon benefit transfer cards available to wic participants. we see this as a way of encouraging participation and making it easier on families to utilize these resources in an effectively without having any statement attached to it. today, 50% said of america's children aren't engaged in the wic program. >> can you say that again, 50%? >> yes, sir. >> of america's children? >> of infants, the infants. 50 percent of the youngsters who would qualify under wic are in the program. >> mr. secretary, are you aware congress approved additional funding to cover the cost of the

state administrative expenses for the snap program. because of budget constraints in some states have chosen to use these funds were other programs. i outlined this problem do you in a recent letter signed by the ranking member and myself. what is the department doing to make sure that these funds are only being used for snap? are there any repercussions to states are using these funds on other programs? >> mr. chairman, i had the opportunity to visit in formally with a number of the nation's governors during the recent national governors association meeting here in washington. i reinforce the message that we are here to help, but want to make sure our help is focused and directed in the proper manner. we have recently sent correspondents to the nation's governors on the important role that snape is playing come and making sure that despite the difficult choices that they have to make, that they don't miss use these resources, and we're keeping an eye on it. we are focused on a couple of states in particular who have had some significant difficulties with the

administrator of this that program. decisions that were made to sort of outsourced some of the administrative activities have not done as well as they had anticipated. and so we're working with those states to make sure that they are focus. we are also focused i would say on states where the participation rate has been less than i would say optimal. there are states that still today 50 percent of those who qualify for snap are not participating. so we are encouraging and trying to incense recognizing the difficulties and circumstances that governor states. having been in that situation for eight years in iowa, six of the ages i believe i was governor i had less but then i had the year before so i am somewhat sympathetic, but understand our responsibility make sure those resources are used a probally. >> you say there are states that are eligible for snap what they don't participate? >> they participate but they don't actively and aggressively promote the program. so as result in a number of

states, a little over 50 percent of the people who are eligible to participate in snap are in fact participating. it's one of the reasons why we're constantly looking for ways with eligibility, constantly looking for ways in which we can assist folks in our budget proposal we're taking a look at the asset test. we're taking a look at extending some of the provisions in the recovery act that are working pretty well to provide that floor, that nutritional floor that snape and nutritional assistance programs provide. we have seen an increase in the numbers in snap. we are now more than 38 million americans participating in the program. but if all of america participated, i think you would see even more significant numbers. >> thank you. senator brownback? >> thank you, mr. chairman. there have been proposals kicked around on the hill to up the percentage of ethanol and some of the fuel mixtures from 10 percent to 15%.

i don't know of a better way to move up ethanol than do something like that. has the agency been able to look at that a win on that debate, secretary? >> senator, we have. as you probably know, the epa is considering a jesting the eat-in rate to as much as 15. there in the process of working with the department of energy. and this is a test that are being conducted on a variety of engines. i believe that there is an indication that in the later model vehicles, e-15 would work. and some of the older vehicle that may be more difficult and so they're trying to figure out precisely what the cutoff point is. secondly, when we put together the biofuels task force report recognizing that we wanted to make sure this industry was a national industry is not necessary a regional industry, we recognize that there were some deficiencies in our strategy.

one commen, deficiency was thate was an adequate education. and that's why it's important i think for us to set up regional effort to weaken regional distribution systems of this tool doesn't have to travel long distances to get to where it can be used. secondly, we saw an overlapping of our research efforts. the department of energy was focused on what really was in its core competency and we were focusing on things that weren't ours. so that separate the resource responsibilities with usda focused on feedstocks, department energy focus on conversion efficiency. and also looking at ways in which we can focus on the near-term, things that could implement within the next 10 years. department of energy looking at more of the longer-term anti. so there is a company to look at this, and we are going to work as hard as we can to get to the 36 billion gallons threshold that you all have set. >> wing's epa going to make a ruling on this? a fairly since the? i think they are waiting on a

completion of the department of energy testing. the last time i checked there were still some testing to be done on some of the older vehicle, cars. i would anticipate and hope that we would see this relatively soon. i think we have positive news from ethanol and biofuels industry standpoint where the reflecting that virtually the corn-based ethanol and bio diesel would be able to qualify under the new program. so where are moving aggressively forward. we're looking at ways in which we can use both recovery money and our regular program money to encourage this distribution system, the biorefineries at we tried to extort the farm bill provisions. so we can make the resources available to really jumpstart this industry. we see this as a critical component as i said earlier, a critical pillar to a new revitalize world economy, and we absolutely need this, senator. we need this and a lot more and we need i believe a regional

approach in terms of how we invest these resources so we get the biggest bang for the buck. . .

>> we need help in that field. when you are looking at the biofuels sector if you can see that piece of it would be very helpful as well. >> i was a couple things in response to that comment, senator. first, one of the reasons we wanted to focus our competitive research dollars was to be able to advance areas that have great significance and so that our national institute would become the equivalent of the national institute of health. one of the areas we should be leveraging more dollars competitively is in this leveraging area. we entered into a memorandum of understanding with the dairy industry. dairy industry and the retail community have combined to really commit to reducing their

carbon dioxide by a steady amount. we are in the process of figuring out how we can use our program more effective with. the problem as the smaller areas. how can we help those small areas. finally i have seen hog operations there has been a rather phenomenal thing taking place, converting the methane producing their pit to electricity in doing it with solar power technology. it is happening in north carolina. >> we need some help with that. there is just a different setting. the methane production is fairly substantial. just a final thought would be, i'm a big person that if you show people, if you provide an ability to people to see

something their imagination catches on and things start to happen. i pressed for some time that we would to a new products expo where the usda with the department of energy would host of bring your latest dismal out, what you're doing with ith agriculture renewable products. like that detroit auto show where the latest and greatest comes out. maybe you want host it in a great midwestern city of kansas city. in that area, anyway. i think you would really get a lot of interest. there would be a lot of people looking at it just to see things. this start to tell people a different narrative. it also helps attract human capitol into our industry, which is at the root of what we need to do. we need to attract more people

into the industry. to do that you have got to sell some excitement with it. i think these things can be very exciting. i hope you consider doing that. >> positive suggestion. i will commit to the kansas part of it. i've got a wisconsin chair, missouri fan, mississippi could make a case for it. >> thank you, mr. secretary. >> thank you, mr. chairman. i agree with my friend from kansas. it's just so happens that the science center which is coming up with all these wonderful their cultural developments has their annual arrows show the last week in may, and i hope that you will be there because they are doing tremendous things, particularly in

biofuels. it would become happy to provide the information if your staff was .. my colleagues are welcome to come, too. i would agree strongly with what the senator said about a development. we found as a result of requests from the president of afghanistan and our commanding general at the time that providing agricultural tools can totally switched around the area. the state department was unable to send ag development specialists, but the missouri national guard went with back specialist working with the land grant college. in one year they brought reasonably modern ag practices that were much more productive and lucrative than poppy farming. poppy production in one year went from the second highest in the nation to almost zero. there are now at least ten other

states backed up by land-grant colleges that can provide a very valuable resources and what secretary clinton and i strongly we believe, smart power is the only way to establish stability in these countries. i commend you and thank you for the significant increase of 425 million for competitive grants to agriculture and food research. nipper is developing wonderful things for improving the nutrition, making much greater availability of food was a growing population. one of the problems we see in the developing areas of biotech, many of the experts say this is a tremendous industry but is being strangled by regulation. right now we have seen round up

ready alfalfa. has been three years since the court order is. is likely going to be four years before they get a final eis. said this has been tested, tested, and retested. in order for farmers and consumers to realize the benefits of aggro biotechnology it is his sense of the usda continue to implement a timely and prudent process. i would like to hear your thoughts on that. if there are things we can to legislatively i would be very happy to join my colleagues to provide you all the help you need. >> just a brief comment about afghanistan. i went to afghanistan in january to visit with 64 usda workers who were over there working with the national guard troops, as you mentioned, and with the

afghan farmers. i agree with you, tremendous the opportunity. the afghan ag minister is a person of integrity. he was to make sure the natural resources are protected. change management to his own operation. their is a lot of work yet to be done but you will continue to see usda presence. let me first of all say when i came into office of was confronted with an inspector general's report suggesting that the department did not have a strategy for promoting biotechnology, not only within the united states, but around the world for. we have spent the last seven or eight months developing.

less reliance on natural resources and on chemicals and protection of the environment. we are in the process of implementing that strategy. we are also focused on our own rulemaking process. we began a number of years ago. we got quite a bit of comment from all parts of the spectrum. >> mr. secretary, time is running out. i support the first lady's let's move, but as one whose jobs in a rural grocery store and sees people going through with food stamps with obese parents and baskets full of empty calorie food have you thought about implementing the same kind of guidelines you have for wic school lunch to snap to say you have to use it to buy milk,

fruits, vegetables. >> we have looked at this. the complexity is in the fact that there are now on average 15,000 different items. using the technology to be able to adjust the epg card makes it difficult to do what you have passed. we are looking at creating a set of incentives. instead of a dollar being credited for vegetables purchases the grocer gets the dollar. it would extend their card. we have about $20 million of grants to see how this is trying to work. our principal focus this year is trying to make sure we get more of them in our school lunch and breakfast programs. >> thank you very much. i think you, mr. chairman. i apologize for running over.

>> mr. chairman, thank you very much. i appreciate your leadership of this committee. we appreciate your dedicated service as secretary of agriculture. i know you have a couple of hot-button issues. we'll always have one or two. one is the implementation of judgment in the minority farmers lawsuit which has been pending for some years. there is now a directive that funds be paid to those who are shown to have been discriminated against in the administration of the department of agriculture programs over a period of years. i wonder if you could give us a status report or what the administration is during to g to

settle plans. what is the request, if any, for specific settlement payments quercitron, thank you for asking that question. the former secretary it incurs me on trying to get these cases settles. their car cases involving farmers of a wide variety. they are all different. we had a class action certification. we have had a settlement of the case. late filers caveman. congress essentially reopened this matter but did not put sufficient resources to actually get it settled. i encouraged the president and administration to fix the dollar amount that would be real. the president submitted his budget last year and has submitted it in a recent supplemental request. $1.25 billion that will be distracted in the same way the

first resources were. a more complicated track would allow you to get upset to under $50,000. that process requires congress to appropriate the resource. we have made the request and we will continue to work with congress to make sure that is followed through and hopefully done by the end of this month. the other cases, we have encouraged the department of justice splendid has responded to begin the process of discussing negotiations. there are a number being discussed. their is a fairly wide gap. we are continuing to have conversations to narrow that gap. we are in the process now. they are complicated because it is not yet certified as class action. candidly to get these cases settled in my view one of two things has to happen.

added there has to be an understanding and agreement on a dollar amount that lawyers representing nting an average at of complainants that agree. we are very committed. >> we appreciate your insights as sharing with us the status of these programs. your efforts to help resolve this in a fair way and one that is consistent with the judgments of the courts. in our state we have been advised by some of our aquaculture catch fish farmer constituents that the department has not been doing much to support them in their effort to

get inspection of foreign fish imported in the country. it doesn't say mississippi. it borrows the name in other ways. it is making it difficult to compete because they are not going through this inspection processes and other safeguards that are required of our domestic producers. we have got a problem there. folks are not only angry. they're going out of business. notice some bulldozers pushing down the impoundments. i found out that person, landowner involved is going to try to make money. maybe that is a good decision based on the fact that we do have this difficult competitive situation. what is the status of

implementation of inspection programs for foreign fish coming in? do you have any encouragement that i can pass on to fish farmers in mississippi? >> center, ethics or asking that question. one of the things i have tried to do as secretary is occasionally walk down the various hallways of the usda building and pop into someone's office and to sit down and find out what they are up to. not long ago i happened into the office of the fellows working on the catfish regulations. first we have to determine the intent of congress from the legislation that was passed. there are 39 different varieties of catfish. they are, as you have indicated, raised in a number of parts in

the world in different conditions and circumstances. following that conversation we did put together a rural and submit to that. at the current time that is with the processes. omb is in the process of reviewing the rule. we have made our germination as to what we think is appropriate. in light of the process we have to allow the folks to sign off on that. we recognize this is a complicated circumstances. we have relationships of other countries that get complicated. but me just simply say from usda's perspective we are concerned about safety and not to be. that is our number one concern. we're also concerned about making sure the consumers have the right information. we want to make sure they get

what they're paying for. we are also interested in making sure that what we do is consistent with the size space systems and we are advocating in relationships throughout the world. those are the three criteria we use. >> thank you. i want to start by thanking you both for your leadership of this subcommittee. mr. secretary, recently i met with a group of potato growers from maine who expressed to me their difficulty in securing funds for it important irrigation project in my state. it is my understanding that

there are three usda potential sources for the irrigation projects. one is the natural resources conservation service. a second is the environmental quality incentives program, and the third is the agricultural management assistance program. unfortunately our potato farmers have had difficulty in securing one name from any of these programs on an ongoing basis. that may explain why it y it is important. in 2007 the need for irrigation funding was greatly increased when the state of maine established low-flow rules for streams and rivers. these rules were the result of a collaborative process between agricultural stakeholders and environmental groups.

they developed significant new environmental standards for minimum flow levels. everyone worked together in a collaborative process, and it was understood at the time that nrcs would provide the resources to assist in implementing these rules. they are particularly a problem in the months of july and august when the money is most needed. thus the potato industry is in desperate need of funds to establish irrigation ponds and the purchase of fish and irrigation equipment. now, there are local meetings that are held to decide how to allocate part of the nrc as fund, but those meetings are inevitably scheduled as either planting or harvesting * and thus the farmers are unable to leave their farms to

to participate. so my first request would be for you to encourage those in charge of the program in our region to scheduled both allocation meetings at a time when the farmers can attend. this second issue is the director of the program has discretion with some of the funding, and yet is putting it to other uses. this is an ongoing problem with the maine potato board. it was their number one issue. i worked with the chairman last year on a colloquy urging the department to help us. unfortunately nothing really has changed. i want test to ask you personalo help us resolve this irrigation problem that has been created by my farmers working in a very

collaborative way with the environmental groups. >> first of all, i instructed the staff to make sure meetings are scheduled at a more convenient time. we will certainly try to rectify that committee. i have been advised $750,000 of money was made available and resources of about $258,000 was made available. the total ama allocation for maine was exclusively available for one county appointed, i may give this wrong. aruse. okay. that is where all the money

went. the rest of the resource, available state wide for irrigation management. it intends to fund each year for the years 2010, 2011, and 2012 an additional $750,000 per year statewide. we will make sure those resources are obviously strategically focused and make sure that people have been put as to where they are to be spent. >> thank you. it is an important issue. we did receive some funding, but this year that conservationists, the head of the nrcs program has allocated the ama irrigation funds for other purposes. so we look forward to working with you. mr. chairman, i know my time has expired. i would ask that i be permitted to submit for the record a

question on our dairy industry which is still facing tough times, but i want to thank the department for the work that you have been doing to try to provide some assistance and also an issue that senator smell and i have written to you about. new obligations that have a big impact on the chicken producer and main. we are just asking that the full rulemaking process be followed so that we can have the opportunity for input. >> mr. chairman, can i make two comments to iraq we have met with the main business that has concerns about the ready to eat, not-ready-to-eat products. we have had a good meeting with them. secondly we have a dairy council

that we established. that group will meet by conference call in march and we will have their first in person meeting in washington d.c. in a our hope is they can report to us by the end of this year with recommendations. >> thank you. >> thank you very much, senator collins. senator harkin. >> thank you for your great leadership and your deputy secretary. good to see our budget officer again, as he is every year for a long time. first of all let me congratulate you and thank you for the tremendous emphasis that you have put on child nutrition. long overdue, but i can sense the refocusing of the department's efforts in this area under your leadership.

truly as you said in a statement it is an historic investment in improving the quality of the food that kids get in schools, improving nutritional level and getting the market start of course. again we have that meeting with the first lady. i know we are going to be all working together with this committee and another committee i'm on, the education committee and subcommittee to make this a coordinated effort. at just think you for having that in the budget. the increase in the fruit and vegetable vouchers. something long overdue. i am glad you are addressing that also. on the food safety issue, as you know, we have a food safety bill that the house has passed.

we have it about ready to go. i am sure you have looked at it, at least what the house has done. we will be tracking closely with the house. there will be a few differences will have to work out. i am hopeful we will have that food safety bill on the senate floor. well, i don't know. maybe during this work. i don't know. if not it will definitely be at the top of the list as soon as we come back after easter. i hope to have that done and to the president's desk by may, something like that. but then again, a lot of that involves the food safety and inspection service. it meant to be focusing that just on the diseases but actually food safety. i think you have addressed that also in your statement, and i

appreciate that. lastly then know you're a farmer, know your your food initiative. this is something i have sensed in the last few years a growing interest in. in fact, we are more and more basically young people. my age. a lot of people are dying. anyway. gender people are getting involved in agriculture that with big, mines and 10,0 00 acres, but smaller things where they are raising nietzsche markets with fruits and vegetables, and will husbandry, that kind of thing. then may not be a full-time occupation, but it is something they're doing with their

families. i sense this is a growing movement all over the country. to the extent you have focused on that and focusing on local processing and local meat-packing and things that can build off of that this generates income. people tend to stay in the as the communities. i commend you for your focus on that the energy to continue to of really pushed that know your a farmer near your food ood pro. okay. those are all the good things. obviously i want to get to conservation. we work very hard on the farm bill to strike a balance is. it was a long process to my but

we had overwhelming support for it here . you yourself have pointed out that a number of conservation items, the mississippi river basin initiative, the court brief conservation initiative are all things -- and i know personally you are commitment. but i am a little disappointed in the budget on conservation. last fall and just 56 days usga received 21,300 applications for conservation's to rigid program covering an estimated 33 million acres. but we could only enrolled 128 million for 2009.

the demand is there. we couldn't do that. the demand is there. in the grip program at the end of 2009 usda had on hand but not the funding for 53,329 applications. again, the demand is there. as we keep reading in the paper we just can't back off of all the great strides we have test to make in conservation. farmers want to do it. when a farmer is faced with the cost price squeeze, well, that the additional few acres of land that may be was being used in conservation, in the act at the plant. you know that as well as i do.

they are willing to put in some of their own labor and the money. they need help from the federal government. the estimates i have is that the budget cuts will eliminate conservation that would be carried out on about 4 million acres of land. so talk to me about that, mr. secretary. and know there are budget problems and things like that. it just seems to me that this is one area where we just can't back off of. i am concerned deeply about it. >> senator, first of all, let me acknowledge the fact that he had been a champion of conservation for as long as you have been in this body, and certainly have led the effort in 2008. in previous efforts to try to get people's attention and focused as if it were in a sense a commodity. i have not been in washington very long. i don't quite understand the way

washington things at times. last year we basically funded enough resources to enroll roughly 277 million acres, almost 277, a half-million acres totally. the budget resubmitted this year will cover 304 million acres, almost 305, an increase of over 27 million acres. so i think we are continuing to try to look for ways in which we can enhance conservation. i understand there is a difference between authorized levels and appropriated levels. we believe this budget actually appropriates more money. some more money and more acres. one of the challenges that we have is to manage these programs properly. the nrc as has been under a cloud of an audit for the last couple of years because it did not do all it needed to do in

previous years in making sure that people were applying properly and getting resources for the right type of conservation. we want to make sure that as we increase and read about some of these programs that we do it in a way that we manage the resources effectively and that we don't continue to be under this cloud of an audit. would take a couple of years for us to fix this problem. frankly we tried to do too much too soon and did not have enough people. we are in the process of trying to make sure we do this properly. i think our budget is a constructive one, and i think it is furthering the interests of conservation. may not be as much as folks would like to spend, but given the fiscal realities we that we did a pretty good job of balancing. >> i've understand that. in the farm bill we put that money in there and pay for it.

it was fully offset. that is why we got so many votes for it. again, yes, you are increasing. you are here. the farm bill is here. their is a gap. now, if you are saying that you want to make sure that you have the people in place to make sure that it works more efficiently, i can understand that, to. but i am just worried about whether or not we are going to be able to get these people signed up in the numbers that we had laid out in the farm bill. he think he will be okay in that this year? >> i think we will probably candidly p closer to 12 million, but we will probably see e a significant increase in the

grip. it depends on which program. i will said, senator, our goal is not to undercut the conservation efforts. i think the worst thing that can happen would be for folks to learn that people who weren't entitled to money for conservation were getting money. we want to make sure that we do this right. if you read the audit, as i have, you realize that there were some serious issues that had to be addressed and are being addressed. they were fairly comprehensive. i don't want, with the resources and not properly manage those resources. i have a responsibility to do that. we are trying to wrap this up in a way that is manageable. >> fair enough. >> next is on the whole area of the bio refinery assistance program, 9203. again, a lot of strong support for that. i know you have been a supporter of biofuels, but the budget is 245 million in 2010.

150 million for 2011. your budget only calls for 17 million. then new york such a a low inpu? >> senator, we have a significant element of carryover. there has not been -- let me back up. in order for this to work has to be a strategy. a very tough year last year. there was a slowing down of interest in this year. the other components of the energy bill that you all put

together. all of them have to work in concert. you have to have the resources available to incentive to produce feedstocks. they have to be retrofitted to become more efficient. a broader expense of the opportunity not just in one region but all across the country. coordinated research that increases the efficiency of what we're doing. as a result all that we're trying to coordinate these resources. we think we're going to have a much stronger and more viable biofuels industry than we see and are already seeing signs of interest picking up. the uncertainty about the rfs2 had issues which we have now

cleared up. so it is, there are a lot of moving pieces in 2009. some of those pieces have come into play. you will see more aggressive effort. you will see us do a better job in terms of resources in the future. at the present time the carryover is enough to meet the demand, especially using some of the loan guarantee assistance. >> to the state anything on the timeframe when we we will see e rfs2 come out? >> it has come out in the sense that the epa has indicated that corn-based ethanol is alive and well. soy-diseel bio-diesel, alive and

well. so that was a positive indication and sign that upping the blended. the department of energy is currently doing testing on all the vehicles to determine the impact. they are fairly confident that the newer vehicles can take e-15. they want to make sure they know what to cut off point is. as they are figuring that out we obviously are figuring out ways in which we can provide assistance and help through rural development for the kind of blunder palms that we will ultimately have mately have to . some the y we will drive into a gas station and want e-15. somebody will want e-5. that is part of our commitment. we are using rural resources

from the recovery act to promote. once we get a read on whether it is eaten or whenever it is then we hen we can move forward on the appropriate distribution systems. >> very good. >> mr. chairman, i have a couple of questions. i am concerned u.s. some of the cuts in the a and l expenses for our crop insurance. i am concerned about that. i will take any time here. i will submitted in writing. >> if i can clarify, in terms of the bio refinery, we believe we have one guaranteed authority of to $900 million. we think there is a tremendous, there is discretionary money and

mandatory money. we have $900 million of the guarantees which is a fairly significant amount. i would like the opportunity to comment about the crop insurance. >> go right ahead. >> this is a very important issue, and is one that folks have to understand. when crop insurance was first devised it was not a product that people were aware. it was a new product. it was in the thing that was mandated. it was a choice. so there were efforts to try to encourage agents and companies to get into this business. over the course of time, scott, do you have the chart? over the course of time the profits for both the agents and the companies have grown rather significantly. in fact, in the last couple of years, and this is the chart. this is where it started command

this is where it yesterday. you have seen a dramatic increase in profits in the last couple of years in pa becau agents are paid based on the value of the policy as opposed to the number of policies they sell, and the companies have done a pretty good job. they have gotten a 16% return on their money. what we are proposing is a change that would adjust so that agents would b paid for the number of policies they sell. the reality is that most bankers require crop insurance. it is not all that difficult to sell this product. on the profit side we think it 12% return is a fair return. so there is a slight adjustment. why do we say that tonight we had a study done by an independent research group that suggested that 12 percent would be a pretty good return. i would take toe% on my money.

and secondly, the gao was a very critical of this program. we try to response to the concerns to the fact that there are 200,000 fewer policies being written then there were into doesn't. so the profits have doubled for 200,000 fewer policies. so there has to be some adjustments, there has to be a fair balance between the need for this product and the need for farmers to have it and also the taxpayers to be treated fairly. finally, some of the resource is going to be used to expand access to the product in some parts of the country where it has been very difficult to get crop insurance and all. so it is an effort to try to spread the opportunity and risk management tool in other parts of the country. >> that is a greater explanation. i might submit a couple other

things to get more vibration. you make of very strong point, and i appreciate that very much >> thank you. >> thank you. the secretary answered the discovery of mad cow disease nearly a decade ago. great interest in developing a system to trace diseased animals that move and commerce. this was considered vital to protect the livestalk. there has been substantial federal investment. however, until your fifth of this year usda announced an about face. this revised system will be national only to the degree that they pass the interstate commerce. rather than taking the lead usda

will be a collaborator insisting states and tribes create responses. so mr. secretary, what assurance can you provide that in the face of the next widespread animal diseases covered this system will increase consumer confidence to mitigate impacts of the outbreak, and maintain market access? when is the time table? how will cost be born? how do you plan to assist these states and tribes that are not able to assume the additional costs and development and implementation of a diverse state-centric system? as you know the dairy sector has developed a very specific identification and animal tracking system already. how will your proposal affect dairy farmers or alter the system they already have in

place, mr. secretary? >> mr. chairman, we had a series of listening sessions throughout the country on animal identification. there were 15 in all. i attended two of the 15. i read comments from the other 13. wide range of concern about the former system starting with confidentiality, privacy, and how the federal government was going to dictate that the technology, cost, and the fact that there were differences between barry's types of livestock. greater acceptance of this program among sheep, hogs, and the poultry industry. less than 35% of operators were essentially participating in this system. we did not have the kind of cooperation and participation that we thought you would have.

congress and many members of congress began to express concerns about the resources that were being allocated to this program. we are suggesting that, chairman petersen suggested that the time had come to pull the plug. a lack of confidence in congress and a lack of confidence on behalf of the cattle industry lead us to think is there a way we could get greater participation. still not disrupting what other poultry industry or the hog industry had developed and not disrupting what we have learned from the disease management strategies. one way to do this would be to have a partnership between the federal government and state to focus on the real issue and work with the states to develop a strategy that would focus on a low-cost technology to get the

job done, have a higher rate of participation and allow less to do a better job of traceability and encourage a more rapid response if there is, in fact, an outbreak. we are in the process of meeting with state ag commissioners and secretaries this month. we start this process. we will begin to develop a standard for how this toward. recognizing that was the standard is put in place it would probably likely focus on the lower cost technology. it would address the concerns that were expressed by those who were just local producers and consumers. it did not know why they had to participate in the program when all they're trying to do with slaughtered for their own use. deal with the issue of confidentiality by ensuring the federal government would not have this massive database of information about people that will be used.

providing the resources to the help purchase the low-cost technology and see whether or not we could get significantly greater participation. there may very well be decisions going on that what is working in poultry and what is working in pork may continue. we will be supportive of that. they may decide that they want your tanks. they may decide there is some of the technology that works better. we will help pay for that. what we think will happen is that there will be equator cooperation between state and federal government, a greater participation on behalf of those in all sectors, and we will have a better job of promoting

traceability. you know, if we continue down the road we were on we would continue to have participation in some, but not all of livestock. we would continue to be confronted with the notion that only 30-35 percent of people participate and 60-65 percent of the people aren't participating that means you don't have a disability system. we wanted to try something different. >> the dairy sector. >> i think it depends on the individual state. the reality is if animals are crossing across state lines there is going to have to be a system to make sure that we can attract them back to the state of wisconsin. there will have to be a system. then within wisconsin you can decide how far back you want to go from that point. you may want to go back where there has been great cooperation

and participation in the system and they want to continue that. you can do that. the state is going to be the one to make the decision. the producers within the state will have a greater say in it. the technology will be something that producers will be satisfied that is reasonable and that they are not being dictated to. >> all right. mr. secretary, the budget proposed a number of initiatives. food and healthy neighborhood initiatives. could you please walk us through these initiatives, for example, how much of this involves a real increase in spending and how much is a redirecting funds from existing programs. i would like your thoughts on this. i would also like to hear from deputy merrigan if she has any additional comments. >> mr. chairman, i will give you a general overview and ask the deputy to provide more specifics. as we begin the process of

taking a look at how the federal consumption, one of the things we found out was there were many communities both rural and inner-city america that did not have access to a grocery store that would allow them to have access to the fruits and vegetables. there was a plethora of convenience stores located in these areas that provided an opportunity for processed foods and more expensive food, but not a curse restore. one of the things we wanted to focus on was a way in which we could respond to that challenge. we began a process of looking at states and cities that have been addressing this aggressively. what we learned was that with additional resources and the use of market tax credits we could creatively and innovatively respond to the fact that there were places where it would go miles and miles and miles without access to a grocery store. we could do this in an innovative and creative way and

we could increase the nutritional opportunities and also create business opportunities and rural economic and development opportunities. a grocery store has a very difficult time attracting any talk of a kind of opportunity. when a grocery store locate other businesses want to colocate. so we work with the treasury department, health and human services, and usda to put together a $50 million proposal, part of which would be used to help create that innovative and creative approach to doing that grocery store located. may not even be a fixed facility. maybe an old facility. we just need to be creative about this. we also need to focus our efforts on a continuation of farmers markets and we wanted to create a rural development

resource with enough flexibility that if somebody wanted to build a small processing facility or a cold storage warehouse that you could aggregate enough product to be able to provide the school or a hospital with a steady supply of good, quality food locally produced. we have to be allowed to look at ways in which we can do that. all of this is designed to use new money, but also to redirect some existing resources in what we think might be a more effective way. what the deputy who has worked a lot on this and as more of the details about its. >> thank you, sir. a great job talking about healthy food financing initiative which we are doing in cooperation with treasury and hhs. a variety of the strategies. as mandated by the 2008 farm bill. we are excited about that. in terms of the know your

farmer, know your food initiative great excitement across this country. i was in kansas city a couple months ago. a lot of action going on there. on my way to madison this month the know your former know your food initiative it does not have staff for its own budget. the concept is to use existing fda authorities. we have a lot of resources and people. you want to make sure we are following through on initiatives in the two dozen major farm bill in particular. the business industry loan guarantee program which congress had asked that there be 5 percent of that money set aside for local food promotion. when the department cut down to the details we found out that nobody had applied for that

money. north question naturally was why not? are we doing enough to get the word out that this money is available? part of the know your former know your food is trying to better utilize existing resources within the department. it is also about having a national conversation, particularly with young people about where we want american agriculture to go. in terms of organic we will be having an inspector general report coming up early this week that will look at some long spending problems in the national organic program. these are problems that we are getting ahead of now. for that reason we have asked for a 3.1 million dollar. we believe this is stage of enforcement. we are instituting new

initiatives, residue testing, unannounced inspections. so we want to increase the record of this program. we want to find it initiatives around the department, small increases in parts that are already there. try to find out more about what is going on in gary inorganic terry on the marketplace. we just ask for a small amount of money increased. their is a variety of footholds in the department for a minute, but no huge new program. again, it is getting usda, which is a very big tent organization, finding a way for the different kind of protection schemes . >> you talked about know your farmer know your food. we all know it is in popularity. with these big a bet speak a bie