[Senate Hearing 107-304] [From the U.S. Government Publishing Office] S. Hrg. 107-304 TO PREPARE FOR THE AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION TITLE OF THE UPCOMING FARM BILL ======================================================================= HEARING before the COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY UNITED STATES SENATE ONE HUNDRED SEVENTH CONGRESS FIRST SESSION __________ MARCH 27, 2001 __________ Printed for the use of the Committee on Agriculture, Nutrition, and Forestry Available via the World Wide Web: http://www.agriculture.senate.gov U.S. GOVERNMENT PRINTING OFFICE 77-981 WASHINGTON : 2002 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY RICHARD G. LUGAR, Indiana, Chairman JESSE HELMS, North Carolina TOM HARKIN, Iowa THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont MITCH McCONNELL, Kentucky KENT CONRAD, North Dakota PAT ROBERTS, Kansas THOMAS A. DASCHLE, South Dakota PETER G. FITZGERALD, Illinois MAX BAUCUS, Montana CRAIG THOMAS, Wyoming BLANCHE L. LINCOLN, Arkansas WAYNE ALLARD, Colorado ZELL MILLER, Georgia TIM HUTCHINSON, Arkansas DEBBIE A. STABENOW, Michigan MICHEAL D. CRAPO, Idaho BEN NELSON, Nebraska MARK DAYTON, Minnesota Keith Luse, Staff Director David L. Johnson, Chief Counsel Robert E. Sturm, Chief Clerk Mark Halverson, Staff Director for the Minority (ii) C O N T E N T S ---------- Page Hearing(s): To Prepare for the Agricultural Research, Extension, and Education Title of the Upcoming Farm Bill...................... 01 ---------- Tuesday, March 27, 2001 STATEMENTS PRESENTED BY SENATORS Lugar, Hon. Richard G., a U.S. Senator from Indiana, Chairman, Committee on Agriculture, Nutrition, and Forestry.............. 01 Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee on Agriculture, Nutrition, and Forestry.............. 15 Hutchinson, Hon. Tim, a U.S. Senator from Arkansas............... 17 Stabenow, Hon. Debbie, a U.S. Senator from Michigan.............. 02 ---------- WITNESSES Hefferan, Colien, Administrator, Cooperative State Research, Education, and Extension Service, U.S. Department of Agriculture, Washington, DC.................................... 04 Horn, Floyd P., Administrator, Agricultural Research Service, U.S. Department of Agriculture, Washington, DC...................... 07 PANEL I Caspers, Jon, Board Member, National Coalition for Food and Agricultural Research and Vice President, National Pork Producers Council, Swaledale, Iowa............................. 24 Kirschenmann, Fred, Director, Leopold Center for Sustainable Agriculture, Ames, Iowa........................................ 28 Lemmermen, Jay, Chair, Animal Ag Coalition and Director of Quality Assurance, Southeast Milk, Inc., Ocala, Florida................ 26 Robertson, Phil, Member, Committee on an Evaluation of the U.S. Department of Agriculture National Research Initiative Competitive Grants Program, National Research Council/National Academy of Sciences, and Professor, Department of Crop and Soil Sciences, Michigan State University, Hickory Corners, Michigan.......................... 32 Stuckey, Richard E., Executive Vice President of Cast, The Council for Agricultural Science and Technology............................ 30 PANEL II Chicoine, David, Chair, National Association of State Universities and Land Grant Colleges Board on Agriculture, and Dean, College of Agricultural, Consumer, and Environmental Sciences, University of Illinois, Urbana, Illinois....................................................... 41 Lechtenberg, Vic, Chair of the National Agricultural Research Extension, Education and Economics Advisory Board and Dean of Agriculture, Purdue University, West Lafayette, Indiana........ 45 Phills, Bobby, Chair of the 1890 Legislative Committee and Dean and Director of Land Grant Programs, College of Engineering Sciences, Technology and Agriculture, Florida A&M University, Tallahassee, Florida........................................... 43 ---------- APPENDIX Prepared Statements: Harkin, Hon. Tom............................................. 52 Caspers, Jon................................................. 70 Chicoine, David.............................................. 98 Hefferan, Colien............................................. 53 Horn, Floyd P................................................ 61 Kirschenmann, Fred........................................... 83 Lechtenberg, Victor L........................................ 113 Lemmermen, Jay............................................... 75 Phills, Bobby................................................ 109 Robertson, Philip G.......................................... 94 Stuckey, Richard E........................................... 91 Document(s) Submitted for the Record: The American Society of Plant Physiologists.................. 129 Barcinas, Jeff, D.T., Ph.D,.................................. 125 Cochran, Hon. Thad........................................... 124 Roberts, Hon. Pat............................................ 122 HEARING TO PREPARE FOR THE AGRICULTURAL RESEARCH, EXTENSION AND EDUCATION TITLE OF THE UPCOMING FARM BILL ---------- TUESDAY, MARCH 27, 2001 U.S. Senate, Committee on Agriculture, Nutrition, and Forestry, Washington, D.C. The committee met, pursuant to notice, at 9 a.m., in room 328-A, Senate Russell Building, Hon. Richard G. Lugar [Chairman of the Committee] presiding. Present: Senators Lugar, Thomas, Allard, Hutchinson, Harkin, Conrad, Lincoln, and Stabenow. OPENING STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM INDIANA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY The Chairman. This hearing of the Senate Agriculture Committee is called to order. Today the committee holds a hearing to prepare for the Agriculture Research, Extension and Education Title of the upcoming Farm bill. We look forward to hearing about current research programs, learning about implementation of the 1996 Farm Bill and the 1998 Agricultural Research Bill and gathering recommendations for ways to strengthen and improve our programs. For our preparation, we need to pose several obvious questions and take stock of our current situation. What is the current status of Federal research programs and funding? What gains have been achieved through implementation of the 1996 Farm Bill and the 1998 Agricultural Research Bill? Where do we go from here? Should we have funding goals such as doubling of agricultural research, as many are now proposing? I am a proponent of increased investment in agricultural research. Nobel Peace Prize winner and father of the Green Revolution, Norman Borlaug, whom I meet with on occasion and who has testified frequently before our committee, endorses the need to double funding. I believe this is a critical need. But I am interested in how others have documented this critical need. While we might not be able to fully address that today, it may also be helpful to review what has been accomplished through Federal funding of agricultural research. What are the breakthroughs or discoveries that would not have been achieved in the absence of this funding? Is U.S. agriculture losing ground against some of our competitors because Federal research funding has been flat for so long? We will also be interested in learning more about those who are just starting out as researchers in the agricultural area. At one of our committee's four hearings about agricultural research in 1997, the President of the National Academy of Science testified that from his interaction with scientists and graduate students, it was his view that many of the most ambitious young people who were becoming researchers were choosing to go into biomedical research rather than agricultural research because more competitive grant funding was available for that area. As the cornerstone of the 1998 Agricultural Research Bill, I proposed a new competitive grant program initially for future agriculture and food systems. The program was funded at $120 million annually for five years. The funding was to be devoted to critically needed research in the areas of future food production, natural resource management and increased farm income. While this new funding was intended to augment research funding provided by Congress through the annual appropriation process and not to replace it, it has been difficult to ensure that funding would be maintained for this new program. In fact, USDA was prohibited from using funds to implement the program in fiscal year 1999. I was heartened that USDA was able to finally award the first grants under this new program last fall. There was an enthusiastic response to this new competitive grant program. One thousand proposals involving 500 scientists and educators seeking funding of over $1.4 billion were submitted. However, the USDA was able to award funding to just 86 projects. In the appropriation process, funding was maintained for this current fiscal year, but eligibility has been limited to colleges and universities, precluding Federal research agencies, national laboratories or private research organizations from competing for the funding. USDA is now soliciting proposals for funding to be awarded later this fiscal year. I look forward, as do my colleagues, to hearing the testimony today. We will hear from the United States Department of Agriculture, from producer representatives, researchers, scientific societies and the land grant institutions. I look forward to working with my colleagues on the committee and all of those who are testifying as we work toward preparing for an agricultural research, extension and education title in the next Farm bill. I would like to call upon my colleague, Senator Stabenow of Michigan, for her opening comments. STATEMENT OF HON. DEBBIE A. STABENOW, A U.S. SENATOR FROM MICHIGAN Senator Stabenow. Well, good morning, Mr. Chairman. It is wonderful to be here with you this morning and to make some opening comments regarding the research, extension and education title of the Farm bill. I appreciate the opportunity to be here with you on this important topic. I share your desire and statements regarding doubling of the funding. I think it is a very important priority for the Farm bill. As you may know, Mr. Chairman, I am a product of both undergraduate and graduate studies at Michigan State University, which is a premier research and education institution. I also have to say it is a premier basketball institution. I am inviting all of you to join me in Minnesota on Saturday as we root in the Final Four. So, it carries over, the gene pool goes from agricultural research to sporting events to many other areas of our important university. MSU has been not only my home in terms of my studies, but I represented them for many years at various levels. I am very proud of the work they do and the contributions that they make to the topic that we are talking about today. When I was on the House Agriculture Committee, we debated the Agricultural Research Reauthorization. I think that we made a number of advances in ensuring adequate resources for agricultural research and extension activities, including creating a new ARS research initiative to battle Wheat Blight, which I authored. I know that much more needs to be done in that area. Agricultural research and extension keep our agricultural economy armed with the tools that it needs to continue to produce the most plentiful and safe food and fiber in the world. I am hopeful that the new Farm bill recognizes the need to increase our national investment in agricultural research and extension, as the Chairman has indicated. The research, extension and education title of the Farm bill must address the needs of agriculture in the 21st Century. New challenges in food safety and diseases require a reinvigorated approach to research and consumer education. I also believe that biomass fuels and biotechnology hold great promise in developing new markets for agriculture, but that tremendous work is required to make this happen safely and to ensure consumer confidence. I look forward to working with the committee to increase our efforts in research, extension and education during our farm bill debate. Today, I would like also to welcome one of the witnesses who is a fellow Spartan, Professor Philip Robertson. Professor Robertson is the Professor of Crop and Soil Sciences at Michigan State University, a Director of the NSF long-term ecological research program in agricultural ecology at the W. K. Kellogg Biological Station. His research is supported primarily by NSF and USDA. He has made significant contributions in the field of terrestrial biochemistry. Some of his research includes investigating nitrogen cycling in row crop ecosystems, the impact of trace gas fluxes from agricultural landscapes on global atmosphere chemistry and soil and carbon sequestration. Not only has Dr. Robertson served as a member and chairman on a variety of national and international scientific committees, I would like to also mention that he is an active member of his community as president of the Plainwell Community Schools Board of Education, which we know also is a tough job. So, I would welcome Dr. Robertson. It is a privilege to introduce you. I know that you will be testifying on an issue that you know a great deal about, the National Research Council's report on the National Research Initiative, as you served as a member of the council and contributed a great deal to the report that you will be summarizing today. So, again, welcome. I am looking forward to the testimony, Mr. Chairman. The Chairman. Well thank you very much, Senator Stabenow. It is great to have such an enthusiastic ally as yourself in this quest. We wish you the best at Michigan State, both academically and athletically as the week proceeds. Let me say that staff has visited with our first two witnesses from the United States Department of Agriculture and indicated that that we would hope that your testimony would be given in a 10 minute period, more or less. Then, with the following two panels, that each of the witnesses would summarize in five minutes. Your written testimony, that you have prepared will be made a part of the official record, as well as our questions and answers as we proceed. The Chairman. It is a privilege to have as our first panel of witnesses, Dr. Colien Hefferan, who is Administrator of the Cooperative State Research, Education, and Extension Services, United States Department of Agriculture in Washington, D.C., and Dr. Floyd P. Horn, Administrator of the Agricultural Research Service, United States Department of Agriculture, Washington, D.C. Dr. Hefferan, would you proceed, to be followed by Dr. Horn. Then we would like to have the opportunity to question you. STATEMENT OF COLIEN HEFFERAN, ADMINISTRATOR, COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC Ms. Hefferan. Thank you. Mr. Chairman, Senator Stabenow, thank you for the opportunity to appear before this committee. Today I would like to describe the steps that our agency has taken to implement the research provisions of the 1996 FAIR Act and the 1998 Agricultural Research Extension and Education Act, an act which I call ``our era,'' a term which almost no one else has adopted. As information technology has revolutionized the global economy and technological innovation is sweeping across the country, agricultural science and education has changed dramatically in the last decade. The food and fiber production systems are changing before our eyes. CSREES is the agency of USDA which engages our national, widely dispersed, university-based knowledge system to develop science-based solutions and technologies to help farmers, rural communities and others remain productive and profitable in the face of these changes and helps consumers navigate the growing complexities of the agricultural system. CSREES accomplishes its mission by supporting research, education and extension activities through peer review, competitive research and education and education and extension grants, formula-funded support for all land grant institutions, and Congressionally determined special projects. Each of these types of work supports a broad portfolio in support of American agriculture. The formula programs provide a critical base of support for agricultural experiment stations and for cooperative extension systems. They are highly leveraged by State and local funds. The National Research Initiative supports investigator- initiated basic and mission-focused research, which is really the seed corn from which new technology and development occurs in Agriculture. The new program established in the 1998 bill, the Initiative for Future Agriculture and Food Systems, as well as programs supported under Section 406 of that bill for integrated research, education and extension, link together on the ground in a problem-focused way the research, extension and education system. I will talk about those in some depth in a few moments. Our higher education portfolio is designed to expand the educational capacity and address the issues that have been raised over the last decade about the future for food and agriculture as it is determined by the scientific capacity in those fields. These higher education programs are particularly important as they support education and extension at historically Black, tribal colleges and at Hispanic-serving institutions. A number of other programs including the Fund for Rural America research education and extension grants program and the Small Business Innovation Research Grants Program are some of the things that in collaboration with the Congressionally- targeted programs and other national programs such as Integrated Pest Management and Expanded Food and Nutrition, create the broad portfolio that brings the capacity of America's universities to address issues in agriculture. It is through this collection of programs that we have been able to achieve important results. There are many examples of work which is funded initially through the National Research Initiative and is translated into applied problems solving through the initiative established in the 1998 bill and becomes the foundation for education and extension programs. Our agency was formed in 1994 with the reorganization of the department. But the bringing together of research and extension was really enhanced through the 1998 Agricultural Research Reform Act. Prior to that we really had no mechanisms by which we could integrate the grants programs to link together knowledge generation and the use of that knowledge. The law that was passed in 1998 essentially allows us and gives us the tools needed for that integration. It also places enormous emphasis on stakeholder input as the method by which we identify research priorities and establishes peer review and multi-institutional and multi-State mechanisms as the means by which we affect our goals. Let me begin by telling you a bit about the Initiative for Future Agricultural and Food Systems, which, as you identified, provided $600 million over a five-year period in mandatory funding to support new problem-focused work in agriculture. In the first year in which we were allowed to administer the program, fiscal year 2000, we were only able to award grants to eight and a half percent of those who applied. Of the 1,000 proposals that we received, one-fourth of those proposals were deemed as fully fundable, excellent research. Again, of that group, fewer than 90 were actually funded. But the work that was funded focuses on a number of critical issues, including development of biobased products for solvents, for greases and for latex substitutes. It includes a consortium of institutions in Texas, Florida and California that is looking at the reduction of microbial contamination in the production of fruits and vegetables, both the mechanisms to do that and farm worker education and other extension education. There is a consortium of University of Tennessee and Purdue researchers which is developing natural resource management solutions for private landowners. There also are consortia of institutions that are helping producers and consumers to understand the application of new agricultural biotechnologies. One of these consortia includes 1890 land grant institutions and is focused on developing and delivering biotechnology applications for underserved farm communities. This initiative has really resulted in a fundamental shift in how CSREES manages its portfolio, drawing upon substantial stakeholder input and bringing together in the peer review system and the merit review system scientists, educators and practitioners. Well, one of the intents of the 1996 and the 1998 bill were to involve more stakeholders. The first line of stakeholder involvement that we have benefited from is the National Agriculture Research Extension Education and Economics Advisory Board. As Administrator of CSREES, I like to find an acronym that is more difficult than our own agency name, and that one does it. This body is really our first contact for taking the pulse of the stakeholder community when seeking to implement new programs or taking existing programs in new directions. This group, the Advisory Board, has been critical to us in the implementation of the Fund for Rural America in providing substantive guidance as well as the Initiative for Future Agriculture and Food system. We also have developed a number of new practices for seeking stakeholder input on each of our programs including requesting in our Requests for Proposals input on the nature of what we are asking for as well as responses. As I mentioned a moment ago, we also have revised our peer review system, where appropriate to use not only scientific and educational peers, but lay people who have an understanding of the issues to be addressed are included in some of our programs. Each of our peer review panels is managed jointly by a USDA staff member and a nongovernment, scientific expert who work together to recruit peer panel members that represent our diverse institutions and stakeholders. Well, let me go on to a second theme in the past legislation and that is that we focus on multi-institutional and multi-disciplinary projects. It has been clear as we look at genetics or water quality or insect or microbial ecology or consumer behavior that no one discipline is sufficient to address the complex issues facing agriculture. While we have had a longstanding program of multi- institutional work through the Hatch Regional Research Program, now through the 1998 legislation we are implementing a program of multi-institutional, multi-disciplinary work that is supported through the formula based programs at the Land Grant Universities. Each institution is working collectively across State lines and across disciplines and functions at their institutions to make the highest and best use of the formula based dollars. The mandate of the law strengthens the commitment of the universities to achieving the goals of problem solving through agriculture. We have also tried to model within the agency the goals of multi-institutional and multi-disciplinary work by mounting more of our programs in collaboration with other Federal organizations. We have strong collaborations with NSF in the area of genomics research. We are working with the Department of Energy and NSF to complete the Arabadopsis Genomic Sequencing Program and have initiated new programs with NASA, with EPA and with the Food and Drug Administration where there are clear points of tangency between the agenda of those agencies and Agriculture bringing new resources and new opportunities to utilize the capacity of the universities. Well, let me end by reiterating that the principles of the 1996 and the 1998 legislation, including stakeholder input, multi-disciplinary work and problem-focused work has aided the agency in refocusing its programs on issues that are critical to American agriculture. But we recognize there are two things that are critical to us as we continue. That is that we need to build more collaborations with other Federal organizations to address the points of tangency between our programs and theirs, including those between agriculture and medical research, and that we need to be able to continue to work toward systems that are able to respond quickly to emerging problems where the science base needs to be applied to solving those problems. Thank you. The Chairman. Thank you very much, Doctor. [The prepared statement of Ms. Hefferan can be found in the appendix on page 53.] The Chairman. Our friend, Dr. Horn, will you give us your testimony? STATEMENT OF FLOYD P. HORN, ADMINISTRATOR, AGRICULTURAL RESEARCH SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC Mr. Horn. Mr. Chairman and members of the committee, I am Floyd Horn, Administrator of the Agricultural Research Service. ARS is the intramural research organization of the U.S. Department of Agriculture. I am pleased to be here today to update you on our response to the directives of the 1996 Farm Bill and the 1998 Research Title and to talk about what ARS is doing for America and American agriculture. First, I would like to tell the committee how ARS responded to the expanded research purposes in the 1996 Farm Bill and how we implemented the priority setting and peer review sections of the 1998 research title. Frankly, most of the provisions of these two bills were not directed at ARS. Those sections that were, though, provided the impetus for us to take a fresh look at our programs and accomplishments to more fully engage our stakeholders and to refine our peer review processes. This committee's interest and input into those activities is acknowledged and appreciated and I believe ARS is a much stronger organization today because of that interest. To fully integrate the tenets of the eight agricultural research purposes into the agency's every day processes, ARS incorporated them into its strategic plan. Indeed, they are in fact the basic framework for our strategic plan. Most importantly, ARS restructured its research programs into 22 national programs that link the purposes to the agency's objectives. The 1998 research title made it clear, that Congress expected rigorous peer review of federally funded research for both relevance and merit. It also directed that research priorities should be established with input from our customers, our stakeholders and our partners. In response to the latter, ARS held more than 40 national program workshops at different locations across the country. These workshops for the first time really brought ARS scientists and our national program staffers together with our customers. Over 3,000 of our customers attended these workshops, including hundreds of growers and ranchers. During the workshops, our customers discussed their needs and problems with our scientists. Our researchers found meeting producers and consumers face to face especially helpful and quite gratifying. In addition to producers and consumers, representatives from all of our customer groups attended the workshops. These included Federal and State partners, industry groups and businesses, non-governmental organizations, a group that we have had very little contacts with in the past, and university researchers. We also made a special effort to invite small and disadvantaged producers to these gatherings to be sure that we attended to their needs. We are really quite proud of these workshops. For the first time we have a major influx of information from the outside into our program priority setting process. In addition to integrating stakeholder input into our priority setting to insure program relevance, the 1998 Research Title directed ARS to peer review each of our research projects at least once every five years. These reviews are conducted by independent and objective expert panels that base their reviews on scientific merit criteria. In response to this requirement, ARS established the Office of Scientific Quality Review in 1999 to review each research program systmatically. The Office is headed by a senior scientist called the Scientific Officer, who selects the panel chairs from outside ARS. There are six panel members on each panel. Each panel reviews approximately 20 projects. The panel chair selects the panelists and resolves matters relating to conflicts of interest, diversity and expertise through the Scientific Officer. The peer reviewers are, as they should be, technical experts and good scientists with relevant knowledge and experience in the research that they are reviewing. The peer reviewers may be ARS scientists or non-ARS scientists, but the majority of the reviewers on each panel must be non-ARS scientists. To date, we have held panel review sessions for four of our 22 national programs, but this is an ongoing process that will repeat every five years for each research project. Since our time is limited, Mr. Chairman, I would like to now address several urgent issues that loom on the horizon. First is that of our research programs developing biofuels. The recent energy crisis in California has clearly demonstrated the nation's need for alternative energy sources. ARS research into biofuels is aimed at developing knowledge and technologies to increase the use of agricultural crops and by-products. Our success could reduce America's dependence on foreign petroleum and reduce the net production of greenhouse gases, as well as create economic opportunities in rural America. ARS conducts alternative energy research at four locations, in Illinois, Pennsylvania, Texas and California. We are developing methods to enable the more efficient production of ethanol using agricultural and forestry wastes, grain crops and fast-growing crops that might be grown solely for their energy production. ARS research is also exploring the development of biodiesel from vegetable and animal fats and we are developing energy alternatives for use on the farm that involve a combination of wind, solar and biofuels. To aid in our research efforts with biofuels, the research title offered $1.5 million for construction and design of a corn-to-ethanol pilot plant to be built in Edwardsville, Illinois. ARS is at the moment overseeing a $14 million extramural grant to Southern Illinois University for that pilot plant construction. A second urgent issue we face regards a key mission of the ARS, ensuring a safe food supply. In recent months, to many americans having a safe food supply has come to mean preventing Bovine Spongiform Encephalopathy (BSE), also known as Mad Cow Disease, and Foot and Mouth Disease from entering the United States. Of course, there are many other aspects in which we have significant program elements, but these are the ones that are in the news. We are fully engaged in efforts to keep these diseases out of the country. Although we have not conducted research with BSE directly, these are not new issues for ARS. We have extensive research experience and ongoing research programs both in Foot and Mouth Disease and Transmissible Spongiform Encephalopathies, known as TSE, including Chronic wasting disease and scrapie. Current research on TSEs includes a diagnostic research program in conjunction with the Animal and Plant Health Inspection Service (APHIS) academia, and the animal industry aimed at developing new live animal and post-slaughter tests. These are major barriers to understanding this disease. The test we are developing at the moment will detect scrapie, which affects sheep, and Chronic Wasting Disease found in deer and elk. Both diseases are found here in the U.S. Chronic Wasting Disease affects a significant number of our wildlife. So far it has not apparently transferred to domestic species. We also conduct research into how these TSE diseases are transmitted, to better understand the fundamental aspects of Mad Cow Disease ultimately. ARS also recently held a two-day special conference of experts on BSE research needs. Frankly, this was a result of the recent National Cattlemen and Beef Association meetings at which BSE or Mad Cow Disease was listed as the top priority. As a result, we are prepared to initiate a research program that will address the detection of ruminant proteins in animal feeds, believed to be the source of BSE. Foot and Mouth Disease poses a more immediate threat because it is one of the most contagious diseases of livestock known. ARS has an ongoing research program into many of the complexities dealing with Foot and Mouth Disease. Because it is so contagious, all of this work is conducted in high-level bio- containment laboratories at the Plum Island Animal Disease Center in New York. During the past year, ARS scientists have completed important research concerning how FMD is spread and we are currently testing vaccines which induce protection against several of the Foot and Mouth Disease virus types. Incidentally, there are seven major types of Foot and Mouth Disease virus and about 70 or so bio-types. This is a reason why it is difficult to get cross-protection, for instance, from vaccines. These vaccine candidates will allow positive differentiation of vaccinated animals from naturally infected animals, an extremely important distinction if you want to have a vaccination program. We are also working on very rapid diagnostic tests, as well as test to differentiate animals vaccinated with existing vaccines from naturally infected animals. The validation and adoption of these tests in the field by APHIS and the international laboratories will have an impact on FMD control, hopefully in time to save the devastation that we see in Europe, but certainly, we hope, in time to save any problems that we may have here. This concludes my testimony, Mr. Chairman. I will be happy to answer any questions that you or any other members of the committee may have regarding ARS' research and implementation of our new responsibilities as directed by the recent legislation. Thank you. [The prepared statement of Mr. Horn can be found in the appendix on page 61.] The Chairman. Well, thank you very much, Dr. Horn. I would like to begin by saying that I am deeply interested, as all of us are, in American foreign policy and security policy, in addition to agricultural policy. We have come to a juncture and the last part of your testimony really shows the intersection of the two. First of all, with the bio- fuels research, our pace here I would not characterize as leisurely. But on the other hand, for at least 20 years and before that, there have been thoughts that somehow we might be at risk as a nation in terms of our fuel supplies and our energy supplies. It would be a good idea if we took a stronger look at renewable resources, namely, things that grow every year and that are available to us. Back in President Carter's administration, we had numerous hearings then, in the Agriculture Committee and the Foreign Relations Committee, trying to see if we could establish more independence. This has waxed and waned as times have gone on. Sometimes we have become less urgent about the situation. Even now, many Americans are not really aware of how critical a problem we may have, although increasingly they are becoming aware as crisis occur in our power grids or natural things transmission or debates over general supplies. Having said that, it has always struck me as curious why the Nation as a whole did not see more urgency in establishing bio-fuels, leaving aside what the base would be. Those of us who are involved in corn farming have always fostered ethanol from corn. That has proceeded. But ethanol could come, as we have heard around this table, from all sorts of bio-fuel sources, as a matter of fact. Testimony by Jim Woolsey, former Director of the CIA, has suggested that there are very promising sources in switch grasses and sugar canes and even bark on trees. A good number that might finally get us to a cost point that is equivalent or better than that of petroleum based source. That, it seems to me, is a critical element because, essentially, our bio-fuels policy in the country depends heavily on a subsidiary or a payment or however one must characterize the difference in the cost of ethanol and gasoline that comes from a petroleum base. It is just that simple, but that critical, that we have not narrowed that gap. I was intrigued that you mentioned that $14 million is going into another pilot project out in Illinois which I gather is state-of-the-art and will narrow the gap substantially. Some cynically pointed out last year in testimony that given the rise in gasoline price, they may overtake whatever is happening with regard to corn-based ethanol and the market may solve our problem. But I am not that optimistic about it. What is your general sizing up, either one of you, as to the urgency or in fact some say pessimistically, that we in agriculture are always looking for the rainbow out there, some type of bio-fuel that really does measure up economically to a natural gas or to a petroleum, or what have you. It simply isn't there. In other words, they would say, you really have to recognize that it just is not there and all of these efforts, interesting as they are, are fated to finally end in a waste of time and money. Is that to be our fate or can you give us some prognosis of this? Ms. Hefferan. Well, I think the likelihood of a solution to the fuel problems for agriculture is not so much a scientific question. It is an economic one. The science has support through a number of the projects that we support and suggests that there are many alternative ways to develop fuel through agricultural products. Last year in the New Initiative for Future Agriculture and Food Systems we supported four separate projects that focused on bio-fuels as part of a broader program in bio-based products. That is in addition to the work that was supported through the National Research Initiative and some special focus programs. There are a variety of different mechanisms, which are microbial in nature, looking at how microbes can change the fuel content of various agricultural products to looking at how we can overcome problems like lignin in the conversion of plant material to ethanol fuel. So, I think the question of investment is one that we have addressed through the programs established primarily in the 1998 bill. It is an area where we are asking for new work in anticipation of growing demand as the economics of fuel changes. The Chairman. But you believe the science is there. You don't have the money to do the things you want. How do you make this transfer, promising as this may be, to somebody's actual plant where they begin to turn out something that might be bought by a consumer somewhere? Where does the transition come and how do we get to that point? Ms. Hefferan. I can give you a partial answer to that and I am sure Dr. Horn has much more to say on it as well. You know, we support activities such as the Small Business Innovation Research Grant Program, which really looks at commercializing the benefits of agricultural science, wherever it may have come from. Within the last several years, that program also has supported demonstrations and models that look at fermentation, and that look at new mechanisms for enhancing the fuel content of biological products. So, I think it is going to take a very deliberate effort and a continuous ramping up of our research, but I think so long as we have the knowledge base on the shelf that we can draw down as the economics becomes more favorable to bio-fuels, there are scientific solutions that can address this problem. Mr. Horn. I would agree with this. The areas of research needed, fall into two categories: improving the efficiencies of converting agricultural materials into both ethanol and bio- diesel and developing high value industrial feed stocks and co- products from by-product streams. We have major programs in this area at the National Center for Agricultural Utilization Research in Peoria. We also have work at the Eastern Regional Research Center in Philadelphia and the Western Research Center in Albany, California. Much of this is on fermentation chemistry, and fermentation systems that can be used to convert agricultural commodities, primarily corn, into ethanol. We also are working, with corn residues trying to convert those into non-food biomaterials. We are also looking for ways to convert vegetable oils, such as soybean oil into bio-diesel. At the Eastern Regional Research Center we have a number of different approaches to the production of ethanol, but one of the more interesting with regard to bio-diesel is the enzymatic process for converting animal fats and vegetable oils and already used restaurant greases into bio-diesel fuels. At the Western Regional Research Center in Albany, California, we are looking into grain fractionation fermentation systems that could produce not only ethanol, but very high value co-products. I do think it is a matter of economics at the moment. We have been told a number of times by economists that there are places in the country in close proximity to the source, where we could develop a profitable industry, but by and large it will always relate to the cost of available fossil fuels. The Chairman. Let me ask, Dr. Horn, for you to work with our staff, if I may. I would like to know what is going on in each of those sites that you have named. Mr. Horn. Very good. We also have auxiliary projects in about a dozen other locations for a total of $13.2 million in this program. The Chairman. Great. Just one further point: On the second large issue that intersects foreign policy and agriculture, the BSE and the Foot and Mouth Disease situation. During December I visited an agricultural laboratory, as it was so described in Russia, about 100 miles from Moscow. It was a very obscure place and rather rundown at this point. But it was interesting because they had bunkers that were supposed to protect whatever was happening there from nuclear attack from the United States in the past. They had various supplies inside the bunker. Now, the gist of what they were about, the Director who had been there 40 years said, was to protect the herds of the former Soviet Union against a terrorist attack by the United States in which we would use Hoof and Mouth Disease and/or at least 13 other diseases that they identified to destroy the entirety of their livestock. So, as a result, they claimed that they were building antidotes to this, various vaccines. As a matter of fact, in the past they did produce a lot of vaccine for cattle herds and have distributed this in various parts of Russia. Interesting enough, they also brought in from Africa strains that were not native to Russia or Europe. When I queried why they were interested in those situations, they said, ``Well, they thought the United States might discover those, too, and they wanted to work out some toxins in case we were that original about it.'' The flip side of the coin, having seen these 14 vials of material which was kept in refrigeration there in this dilapidated structure, these were the crown jewels of the laboratory. It could go either way. Toward the building of anti-toxins or toward the use of something that would be an aggressive weapon of mass destruction. Their claim, routinely, is that they were never involved in that, and perhaps it is so. But in any event, I mention this because others have been at work and have thought through the predicament, not of an accidental case of Hoof and Mouth Disease, but of a deliberate attempt. This is inconceivable to most of us and we really don't want to think about it. But we are thinking about it because now at risk are the herds in this country. We are diligent at USDA, as you are every day, in beefing up at least the inspections and trying to think through, really, how do we stop it so there is not this epidemic and this plague that could visit us and change life in America very substantially. So, I applaud you on the work that you are doing. Once again, those of us who are enthusiastic about research always ask, ``Is it enough?'' Is it a question of research now or enforcement, rigorous exclusion or how would you characterize what you are up to? Mr. Horn. Mr. Chairman, it sounds like you have been to Vladimir and perhaps to Oblensk. We have been following in some of the same footsteps and we are very, very concerned about biological weapons the former Soviet Union had. The Chairman. In fact, I found an ARS man in Russia. Mr. Horn. Yes, we sent him over there to see you. The Chairman. Yes. Mr. Horn. The ARS scientist was Dr. Rick Bennett. It was an opportune encounter. But frankly, we have been very, very worried about this for a good long time. In fact, almost every country that has had an offensive bio-weapons program has had an agricultural component to that program. The most serious was the Soviet Union where, if we are to believe the testimony that has been presented before the Congress by defectors, that of 33,000 bio-weaponeers in the former Soviet Union, 10,000 were working on agricultural issues. Just to compare that, the total work force in ARS is about 7,500 now and we have 2,000 scientists. So, it was a huge program and we don't know where all of it is, obviously. Foot and Mouth Disease was weaponized and a number of others, may have been Rift Valley Fever, Tularemia and others. Some were zoonotic and some just against animals. There are really four categories that we are worried about. One is animal diseases. One is crop diseases. Another is zoonotic diseases of animals that can transmit, to humans. The last is technological surprise. With new biotechnological sciences at their disposal, those interested in biological weapons can change pathogens to either get around vaccines or to make them more virulent than they would ordinarily be. So, this is a huge issue. Zoonotic and ``new'' diseases that we would not normally see in this country like Glanders and Rift Valley Fever pose a totally new mission for the Department of Agriculture. We have, as you say, been working diligently on things like Foot and Mouth Disease, Brucellosis, and Bluetongue. But there is another whole set of pathogens that our veterinarians would be ill prepared to encounter that have been prepared for use against us. The Chairman. Well, this committee is eager to work with you in trying to inform the American people of the good work you are doing. I think this is one of these situations of extraordinary work because it was not topical. It has been unseen. But the basis of our work, as you know, and your work every year is to provide an ongoing funding of research which is absolutely vital. Whether people have topical interests or not, these emergencies occur and we have to be ready. Mr. Horn. We appreciate your support very much in this regard. In fact, I know you are responsible for much of the State Department activity that allows us to talk to these people and direct their activities in more peaceful ways. They are in fact, in cases that I can think of, assisting us in developing prophylactics against some of the diseases they created right now. The Chairman. That should be mentioned. I have mentioned the sad side of it. That is potential terror, but the fact is that the cooperation now is extensive because of the fear of Russians that they themselves may make a batch of it and kill their livestock or injure their people. So, it is an urgent situation. Mr. Horn. We are very enthusiastic about the potential to work with these former biological weaponeers. The Chairman. Thank you. Senator Harkin. Thank you, Mr. Chairman. I will just ask that my statement be made a part of the record. STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY Senator Harkin. I am sorry I was a little late, but this is a great segue into my questioning for Dr. Horn. We have a National Animal Disease Center and a National Veterinary Biologics Lab at Ames. It has been there for over 40 years now, almost 50, I think. I visited it a number of times. I had the former Secretary of Agriculture, Glickman, out there to look at it. I am going to hope to get Secretary Veneman out to take a look at it also. In fact, I was just there last Friday. They were bringing a number of sheep from Vermont that had TSE to dispose of them. This made quite a bit of national news. Of course, it made a lot of news in Iowa, too. A lot of people are concerned about this. The National Animal Disease Center at Ames, after 40 some years, needs to be upgraded, not only just for the present kinds of diseases, but all the things that you just talked about with the Chairman. We don't know what is coming down the pike. We know that some of these diseases are mutating. They are becoming stronger. They are becoming more virulent. They are manifesting themselves in different ways. Then there is the whole issue of bio-terrorism that we have to be concerned about. A lot of this falls in the lap of the National Animal Disease Center and the National Veterinary Biologics Lab at Ames. They are so spread out now that they are actually doing some of this work in a shopping center. Quite frankly, I am concerned about that. We are doing some stuff with toxins and things that are not in really secure areas. That has to be addressed. I am concerned that something might happen. The ARS proposed a plan calling for integrating and modernizing these disease facilities in Ames with the requirement that a study be completed by March first. The current facilities are grossly inadequate. Mr. Horn. Yes. Senator Harkin. They need to be upgraded for the new century ahead. As I said, some of them are in a strip mall. Instead of shopping center, I should have said ``strip mall.'' I think the stories about animal diseases and the fact that we had to transport sheep there to be disposed of just shows that we are not out of the woods on this. In looking at what is happening in Europe, I am told that they are losing something like $200 million a day in Europe. I think in Great Britain it has already cost them in the billions of dollars. So, again, I guess I am just laying the ground for asking you what is the current status of the mandated report and when can we expect to see it? I would like to have any of your comments on the need to upgrade those facilities. Mr. Horn. Senator Harkin, before you came the Chairman made some opening comments that included some discussion of the proposals that are around to double the investment in agricultural research. It is absolutely true that we have under-invested in agriculture research for some time. It is particularly apparent with regard to the condition of some of our animal health facilities. This is the principal jewel in the crown with regard to domestic threats against American livestock and agriculture. All of the things that you have said are very true. We have Nipah and Hanta viruses. We have things that are mutating naturally that threaten our country's huge agricultural enterprise. We must respond by repairing those facilities. The Department of Agriculture is not seen as a ``big science'' agency. We have less than two percent of the Federal research and development budget. This issue must be dealt with. I agree with you wholeheartedly. It is urgent. We also have a sizable project there at Ames. We in ARS are in 84 different buildings on that site and APHIS is in another 25 buildings. A few years ago, the preliminary estimates for upgrading the facilities which, in a significant part, meant replacing buildings, was upwards of $400 million, a huge number in agriculture. The report that you make reference to has gone through a couple of iterations and recently more reiterations to be sure that it is conservative, yet compelling. It is a very large project for us and we want to make sure that we get it right. We started out in 1992 proposing separate facilities to house APHIS and ARS. More recently, we took the approach that these could be combined and coordinated in a way that would save the Federal government a considerable amount of money. I hope that is the case. The report is pending. We expect the report to go to the Secretary for the beginning of the departmental clearance process within a week or 10 days. Our guess is that shortly thereafter, it will be presented to the Congress. The master plan that is coming out of the combined efforts of APHIS and ARS will be completed in June 2001 or a lot of us will be asking why it isn't. It is an extremely important project for us and I can assure you we are working with due diligence to make sure that this is an effective proposal, because we know in these economic times it is going to be difficult to get this kind of an investment. It is not the only one we have like it. We also have the exotic animal disease issues that we deal with at Plum Island. That is another huge project. But you are absolutely correct. It is urgent and it has to be dealt with. Senator Harkin. Well, we have to get on with it because we have got to start laying the groundwork for the rebuilding, consolidation, and putting up a little bit more secure parameters than what we have had in the past. We must get that stuff out of the strip mall and back into an area where it can be controlled more tightly than it has been in the past. So, I look forward to the report and I urge you, with as much rapidity as you can, to get it to us so we can see what we are going to do here on this committee and on the Appropriations Committee to get this facility upgraded. I just want to note for the record that the testimony of Jay Lemmermen, who will be up next, on behalf of the Animal Agricultural Coalition, spoke specifically about the need for this. He said that the existing facilities were ``antiquated, inefficient, and seriously undermine USDA's role as a world leader in animal health and diagnostics.'' He says, ``For example, the United States currently does not meet the standards that we require of our trading partners, leading us to rely on foreign laboratories and foreign diagnostic procedures.'' I just wanted to note that for the record. That is why it is so important to get moving on this. Mr. Horn. We also have certain standards to meet with regard to the certification of our animal handling facilities and our veterinary laboratories. That is at risk as well. Senator Harkin. Exactly. Thank you very much, Doctor. [The prepared statement of Senator Harkin can be found in the appendix on page 52.] The Chairman. Thank you very much, Senator Harkin. Senator Hutchinson. STATEMENT OF HON. TIM HUTCHINSON, A U.S. SENATOR FROM ARKANSAS Senator Hutchinson. Thank you, Mr. Chairman. Dr. Horn, it is good to see you again. For my own benefit, and I came in late and I apologize for that. If you have addressed this, then forgive me for asking it again. But on the Foot and Mouth Disease and our national effort to prevent the spread of Foot and Mouth Disease to the United States, can you just give me an overview of how many agencies are involved in that effort, who is coordinating that effort? What is the role of ARS and the USDA and how great is the threat to United States livestock? Mr. Horn. Well, I will do my best. This is a fairly complicated affair. Certainly, every country that we trade with, and interact with and have significant amounts of traveler exchange with, is trying to contain this disease. So, I would say that our partnerships with Europe including Great Britain, for instance, are very important deterrents to the movement of Foot and Mouth Disease to this country. The companies that actually transport people back and forth are sensitive to this and there are a great many steps being taken by partners. But within the Department of Agriculture, clearly the key is with APHIS. APHIS is both coordinating and providing the action and regulatory responses to Foot and Mouth Disease surveillance. The ports of entry are the points of focus. We are trying to identify and confiscate contraband materials, livestock materials, livestock, and livestock products that are capable of carrying the virus. We are trying to educate people as they come to our ports of entry that if they have been on a farm they need to tell us about it and we need to exercise the appropriate disinfection precautions to keep them from bringing the disease to the United States. We are also doing what we can to help those afflicted with this problem by providing scientific expertise. This is where we begin to come to ARS. ARS is a crosscutting research agency whose primary function in the department is to provide science and technology to the action and regulatory agencies, including APHIS. So, we would be developing the new diagnostic kits that can be used by APHIS in their effort to keep the disease out of the United States. We are field testing a kit right now that can determine a positive or negative Foot and Mouth Disease sample in 40 minutes or so, as opposed to the current 40 hours. It is also much more sensitive than the existing tests. That is important because in Europe the disease primarily being spread by sheep. Sheep don't show the symptoms that you see in cattle or swine. So, oftentimes you can move apparently normal and healthy sheep and yet they are diseased. So, we are helping with science and technology there as well. We will probably be working also with the French. Second, we would focus on the potential for the use of vaccines in ways that haven't been possible in the past and other technologies that might be used to understand the spread of the disease and help contain it. Of course, there is a big issue of carcass disposal that is researchable now. It is a tremendous environmental issue. What is poorly understood at the moment, but rapidly coming to the forefront, is that the big losers in this are not just agriculture, but virtually every aspect of life in the U.K. has been affected. Tourism is down 85 percent. There are major losses to the country's economy because of Foot and Mouth Disease. Senator Hutchinson. So, do you feel that the coordination in the United States is adequate and that our response has been well coordinated? Mr. Horn. Well, unfortunately, that is the kind of question you can only answer with assurance in retrospect. The way it is is as good as it can be. I think virtually every veterinarian in the United States, livestock veterinarian, is sensitized to the need to be careful and watchful. APHIS has been operating for some time now on an emergency basis, communicating with Europe and Great Britain and Argentina and other countries where Foot and Mouth Disease is being found. Senator Hutchinson. If I could quickly move to another subject, the Chairman spoke about ethanol in our bio-fuels. I am very interested in the bio-diesel that you made reference to and its feasibility in the future. We have a soy oil glut in the United States. I have worked with the Soybean Association on possible legislation that would do something like we currently do with ethanol. But you said that the future of these bio-fuels is really dependent upon the cost of energy out there. I think that is a fair reflection of what you said. Do you feel that some kind of incentive program on bio- diesel could play a role as our ethanol legislation? Mr. Horn. I don't know much about incentive programs. In agricultural research we tend to focus on making the technology available. It is clear from what we are hearing from the Economic Research Service that there are many parts of the Nation where it is close to competitive as an energy source, but it is not there. I think as was the case with the Farm bill in the first place, that increased research was supposed to be a part of the safety net. If it is that kind of incentive that you are talking about, I believe that additional research will make it a more efficient and competitive fuel. Senator Hutchinson. Thank you. One last point, in the budget blueprint that was presented, the administration says that in 2001 USDA funded approximately 300 Congressionally earmarked projects for research, education, extension grants to land grant universities not subject to merit based selection processes and therefore do not represent the effective use or limit Federal funding and that the budget proposes to eliminate funding for these earmarked projects, saving taxpayers about $150 million. On the surface, that sounds very logical. But I am concerned that we may have made a sizable investment in a lot of these land grant universities and programs through the earmark and that to make an across-the-board elimination of those may in fact not be in the national interest or the public interest. If you would comment on that, and is there any way that those kinds of earmarks could be subjected to a meritorious evaluation and assessment of how much value they are without a simple kind of meat-axe approach on eliminating all the earmarked funding. Mr. Horn. Thank you for asking me that question, Senator Hutchinson. This aspect of the administration's budget, of course, will come forward in much more detail in April. It may be easier to determine exactly what process was used at that time. But I would say this much: In prior year budgets, the process has been almost identical. Those items that have not appeared in President's budget have been slated for redirection. That process has led to debate with the Congress. In recent years, certainly most of those have been restored. I think that is because of the sense of the Congress that there is value in many of these projects. I believe our responsibility at the agency level is to be sure that should the funds be forthcoming from whatever source, that they are used properly. I did speak earlier about the merit and relevance reviews that we go through to make sure that that happens. So, regardless of the outcome of this particular aspect of the budget blueprint and what follows, I think that we will do our very best to assure that the money is well spent, should it be forthcoming. Senator Hutchinson. Thank you, Mr. Chairman. The Chairman. Thank you very much. Senator Allard. Thank you, Mr. Chairman. Just to bring the panel up to date on my background, I am a veterinarian, so obviously, I am interested in what research you are doing right now. Is Plum Island under your jurisdiction? Mr. Horn. Yes, the research that goes on at Plum Island is. Senator Allard. The researchable problems that are out there? Mr. Horn. Yes. Senator Allard. That is what I am interested in, the research side of it. What is it that you are doing specifically on Foot and Mouth Disease research in relation to the vaccine? I have had a State veterinarian contact me about his thoughts about a vaccination program. I know that it is controversial and I kind of want to know just what it is. He felt perhaps more research needed to be done in that area. I would kind of like to have your comments on that. Mr. Horn. There are clearly researchable problems associated with vaccination programs and policy. Of course, there have been several problems over the years. First of all, because it wasn't possible to regulate the vaccine production industry to the level necessary, occasionally there were batches of vaccine prepared, so-called killed virus vaccines in which not all virus particles were ``killed''. Therefore, you could get an outbreak actually caused by vaccination, which is unacceptable in a disease that is as contagious as Foot and Mouth Disease. Senator Allard. Exactly. Mr. Horn. Second, the purposes of international trade, there have been tremendous barriers to the export and import of food from livestock or livestock themselves if a country had Foot and Mouth Disease and you couldn't tell the difference between a vaccinated animal and an exposed animal. That has changed. We have developed technology now where one can, in fact, tell the difference between the two. We did that at Plum Island. Third, we are taking new approaches to vaccination and vaccine development. There are two promising candidates, but unfortunately neither is on the shelf today. One is a peptide vaccine and the other is made of genes taken out of the Foot and Mouth Disease virus and put into a human adeno virus. Once these go through the proper clearances, they may be the answer because they are not the full Foot and Mouth Disease virus. Senator Allard. There is just enough shared anti-genicity there that cross over? Mr. Horn. Exactly. Our sense is that this technology is probably, under the best of circumstances, two to five years away. Excuse me. The adeno virus is the one that is probably two to five years away. The synthetic peptide, it may be possible to clear that much more quickly. We can make a synthetic peptide vaccine. In fact, these are in production right now on Long Island, and they are sold in other countries. Taiwan in particular. Taiwan had a big outbreak recently, and is consuming a tremendous amount of that synthetic peptide product. That would simply be a process of clearing the product here, running some animal tests to provide data, to show efficacy, sensitivity and specificity, and clearing the facility that would produce it for us. So, we are working on that as well. Then the other aspect of work that I think is extremely important is rapid diagnostics. As you may know, if you have followed this issue, it took three weeks for the British to realize that they had this disease. Great Britain has a wonderful veterinary service. It took almost six weeks in Taiwan for them to know they had the disease, and they probably have the best vet service in Asia. Hog cholera in the Netherlands--six weeks, and so forth. So, rapid diagnostic kits are essential. We are working on that. We hope to field test soon in the U.K. a detection test that shows in 40 minutes or so whether or not the virus is present and it is very, very specific. So, we think these are going to be important parts of the overall strategy. Senator Allard. Now, help me with your background. Are you a veterinarian? Mr. Horn. No sir, I am an animal nutritionist and biochemist. Senator Allard. OK. Now, let me move on then to the other. What is being done on research on Spongiform Encephalopathies? You know, these are the kind of diseases that have lesions like Mad Cow Disease. The media is using Mad Cow Disease-like, which I think is making everybody think that all these species of animals get Mad Cow Disease. But these are all Spongiform Encephalopathies. What kind of research are you doing on that? Mr. Horn. It is clearly misunderstood. We have two in particular that we are concerned about in this country, Chronic Wasting Disease in deer and elk and Scrapie in sheep. We are doing work on these diseases at the National Animal Disease Center in Ames, Iowa and in our Blood-borne Disease Program at Pullman, Washington. We are working primarily on two aspects of that problem. One is trying to find diagnostic tools that can be used in live animals. That is not easy, but we have developed an inner eyelid test for Scrapie with sheep that appears to work. One normally goes after lymphatic tissue to test for the prion that is presumed to cause these diseases. The inner eyelid test is quite good with regard to identifying the presence or absence of the prion. We are also looking for this in blood. There is some promise to this approach, although it is still very much at an experimental level in blood. There is no BSE in America. I think it is very important to say that. That includes in our research program. We have not worked on Mad Cow Disease in the United States because it is important to be able to say we don't have it here. What we have decided to do, because of the urgency of this and the spread of it in Europe, is to start a new Mad Cow Disease or BSE research program. We are going to do it at the outset in two ways with the full support of the livestock industry. One is to add our talent and expertise to the efforts underway in other countries that have it. We would presumably put American scientists in laboratories in Britain and perhaps in Canada. They don't have it in Canada, but they have studied some of the tissue samples in Canada. Then, disabled, dead materials could be brought to the United States and subjected to research programs, probably on Plum Island. But these would be things that were inactivated and not carrying the agent. Senator Allard. So, even on to Plum Island, you would be bringing in inactivated material, then. That is the plan. Mr. Horn. That is the plan, because the perception of having absolutely no BSE in the United States is so important to the livestock industry. BSE inactivated, of course, could be handled anywhere. It could be handled at Ames or whatever. But it is wonderful to be able to say, ``We don't have any BSE agent in the United States.'' Incidentally, in terms of the international animal health community, Plum Island is outside the continental United States. Senator Allard. I didn't know that. Mr. Horn. Yes. It is a very important concept. It is the only place in America where we can do Foot and Mouth Disease work. Senator Allard. Because technically it is outside the United States. Mr. Horn. That is correct under the International office of Epizootics. Senator Allard. Thank you, Mr. Chairman. The Chairman. Thank you very much, Senator Allard. Let me ask a question on behalf of Senator Stabenow, who had to go to another hearing. She is concerned about Bovine TB, an issue in Michigan. Can you give us any information as to your work in that area? Mr. Horn. Well, we are aware of this as well. Of course, it is a big problem in Michigan, a relatively virulent and antibiotic-resistant strain of tuberculosis has broken out in the deer population. There is a possibility of having it re- established in the livestock population. Particularly it has occurred in Michigan, but there are other States as well. We are cooperating with the State University System and the Animal and Plant Health Inspection Service to evaluate the potential of controlling this disease in livestock, should it occur in livestock, and in wildlife. In the last five years we have actually found this new TB in 12 counties in the northern part of the Lower Peninsula of Michigan. It would appear that about five percent of the wild deer are identified as TB-positive. It can also be found in other creatures that interact with the deer, coyotes, raccoons, fox, bear, feral cats, bobcats and a few beef cattle. We have had ten beef cattle test positive and two dairy cattle herds in northern Michigan. So, turberculosis in this wildlife reservoir is extremely problematic for us and it threatens the modified--accredited status of Michigan. What our research is going to do, and it, too, is conducted, incidentally, Senator Harkin, at the National Animal Disease Center in Ames, is lead to more sensitive and specific diagnostic tools for TB and a new set of strategies that might be more applicable to our life. The Chairman. Thank you. Senator Harkin, do you have further questions of this panel? Senator Harkin. We thank both of you for your testimony and for your extensive testimony and for your extensive questions and answers and dialog with us. We appreciate your own achievements. We look forward to visiting again soon. Mr. Horn. Thank you very much. Ms. Hefferan. Thank you. The Chairman. The chair would like to call now a panel composed of: Mr. Jon Caspers, board member of the National Coalition for Food and Agricultural Research and vice president of the National Pork Producers Council in Swaledale, Iowa; Mr. Jay Lemmermen, chair of the Animal Agriculture Coalition and Director of Quality Assurance, Southeast Milk, Inc., of Ocala, Florida; Dr. Richard Stuckey, executive vice president, Council for Agricultural Science and Technology, Ames, Iowa; Dr. Phil Robertson, member, committee on an evaluation of the U.S. Department of Agriculture National Research Initiative Competitive Grants Program. He is from the National Research Council of the National Academy of Sciences and a Professor of Crop and Soil Sciences at Michigan State University, Hickory Corners, Michigan; Dr. Fred Kirschenmann, director of the Leopold Center for Sustainable Agriculture in Ames, Iowa. I want to call upon the distinguished Ranking Member, Senator Harkin, because three of this panel are in fact from his native State of Iowa. I suspect he wants to make a comment about that. Senator Harkin. Thank you, Mr. Chairman. I just wanted to welcome them. Jon Caspers is a very well known, very prominent pork producer. He is vice president of the National Pork Producers Council and has been very much involved in leading this new group, this Council for Agricultural Research to try to get the funding doubled over five years. Dr. Stuckey has been executive vice president for CAST, as we call it, in Ames, Iowa. He has a broad domestic and international background in agricultural research. He is a recognized expert in plant pathology. CAST has been an indispensable resource over the years to many of us on this committee and in this room. Dr. Fred Kirschenmann was recently appointed director of the Leopold Center for Sustainable Agriculture in Ames, Iowa. The Leopold Center is at the forefront of research into environmental and economically sound agricultural practices. Dr. Kirschenmann has been a leader in this movement for sustainable agriculture for a long time. He is a recent import to Iowa from the Dakotas and we are glad to have him there. So, thank you very much, Mr. Chairman, for having my fellow Iowans here. The Chairman. Thank you very much, Senator Harkin. I would like to call upon each of you to summarize your testimony in five minutes, if possible. All of your testimony will be made a part of the record in full. We will proceed with questions and answers after hearing from all five of you. First of all, Mr. Caspers. STATEMENT OF JON CASPERS, BOARD MEMBER, NATIONAL COALITION FOR FOOD AND AGRICULTURAL RESEARCH AND VICE PRESIDENT, NATIONAL PORK PRODUCERS COUNCIL, SWALEDALE, IOWA Mr. Caspers. Thank you. Thank you, Mr. Chairman, for inviting the National Coalition for Food and Agricultural Research to testify at this important hearing on food and agriculture research. I am Jon Caspers, a pork producer from Iowa, a member of the board of directors of the National Coalition for Agricultural Research and Vice President of the National Pork Producers Council. Our Coalition looks forward to working with this committee as we seek to double Federal investments in food and agricultural research over the next five years. I need not remind this distinguished committee that the food and agriculture sector faces many immediate issues, and yes, even crises every day. Safeguarding our borders against the introduction of the devastating BSE and Foot and Mouth Diseases, low farm incomes and consumer concerns about biotechnology are some of the urgent issues. We believe the best long-term strategy for preventing these problems and capitalizing on the opportunities is increased support of food and agriculture research and education. To paraphrase the old adage, ``An ounce of prevention is worth a pound of cure.'' We believe a dollar of funds invested in research now will pay back $8 or more dollars in public benefits in the future. Research based on technological advances such as the ability to produce higher yielding crops in animals with improved human nutritional qualities have allowed for a more abundant, safe, efficient and environmentally friendly food supply, improved human health and well-being, and yes, longer lives and lower health costs. We want to thank the Chairman and other members of this committee for supporting programs and funding that have helped make these accomplishments possible. Yet, despite the best efforts of this committee, and the world-renowned success of U.S. food and agricultural research, Federal funding has not kept pace with inflation. In real terms we now spend less on food and agricultural research than we did in 1978. We believe this is statistic suggestion that Federal support could be as much as a quarter century behind. Today we spend only one dollar of Federal food and agricultural research in the USDA for each $500 consumers spend on food and fiber. Concern that this less than optimal investment in food and agricultural research will unintentionally restrict our nation's competitiveness, living standard and general economic growth and development, a new coalition has been formed, the National Coalition for Food and Agricultural Research. National CFAR is a broad-based stakeholder coalition of food, agriculture, nutrition, conservation and natural resource organizations. Our mission is to double Federal funding of food, nutrition, agricultural, natural resource and fiber research, extension and education programs during the next five years. This is to be net additional funding on a continuing basis that will complement, not compete with or displace the existing portfolio of Federal programs of research in education. Our ultimate goal is not budgetary but the many benefits that will accrue to each American that a doubling of funding will bring about. Currently, National CFAR has over 60 members broadly representing all phases of food and agriculture sectors. Our members include major national organizations such as the National Corn Growers Association, National Council of Farmer Cooperatives, American Dietetic Association, National Pork Producers Council, American Soybean Association, National Cotton Council, American Crop Protection Association, U.S. Rice Producers Association, Institute of Food Technologists, Wildlife Management Institute, American Farm Bureau, Ducks Unlimited and the Forest Land Owners Association. We want to stress the continuing need to build the capacity to do quality research and education including human resources, infrastructure support, formula funds and core programs. It is important to maintain a balanced portfolio of Federal research and education programs including competitive grants, formula funds and intramural programs. Major areas of research that have been identified by our members and related coalitions that are in need of additional funding include food security, safety, fortification, enrichment and allergens; nutrition and public health, production quantity and quality; nutrient adequacy; global competitiveness; and new market opportunities. Environmental stewardship and resource conservation and the scientific basis for public policies relating to the environment, plants and animals. Increasing knowledge, skills and expertise, emergency preparedness for emerging plant and animal diseases and bio- terrorism; product pioneering for food, nutrition, biomaterials and bio-fuels; genetic resources, genetic knowledge and biotechnology, rural community economic vitality and education and outreach to producers, processors and consumers, including food safety, sound nutrition, conservation and management. In conclusion, Mr. Chairman and distinguished Members, our new and growing coalition of a broad-based cross-section of stakeholders in food and agricultural research recommends that Federal investments in food and agricultural research be doubled over the next five years. This would definitely benefit the American consumer in multiple ways. It would benefit producers and consumers of all commodities in all States and it would contribute to the United States being the best fed country with the lowest share of income spent on food. It would strengthen our competitiveness in the global marketplace while achieving the proper balance of human and environment needs. It would enable producers to produce safer and healthier foods and it would find new uses for agricultural products and enhance the protection of our national resources. Thank you, Mr. Chairman. This concludes my statement. I will be pleased to answer any questions at a time you see fit. The Chairman. Thank you very much, Mr. Casper. [The prepared statement of Mr. Caspers can be found in the appendix on page 70.] The Chairman. Mr. Lemmermen. STATEMENT OF JAY LEMMERMEN, CHAIR, ANIMAL AG COALITION AND DIRECTOR OF QUALITY ASSURANCE, SOUTHEAST MILK, INC. OCALA, FLORIDA Mr. Lemmermen. Thank you, Mr. Chairman. I am Jay Lemmermen. I am Chair of the Animal Agriculture Coalition and Director of Quality Assurance for Southeast Milk in Ocala, Florida. The Ag Coalition is a coalition of livestock, poultry and aquaculture trade associations, the veterinarian and scientific communities that monitors and influences animal health, environment, food safety, research and education issues. AAC appreciates the opportunity to present to you and the Senate Agriculture Committee our priority items for the research, extension, and education title of the Farm bill. Now in the prepared statement, the value of animal agriculture and the challenges facing animal agriculture and the importance and economic value of ag research is fully listed in detail. So, I would like to skip over those and just present the highlights of our priorities. One, AAC sees the critical need for increased funding for ARS and CSREES research. As noted in the statement, this research provides the tools for APHIS which needs to protect our animal industries from both accidental and intentional introduction. We are grateful for the 9.7 percent and 4 percent increases that ARS and CSREES received in fiscal year 2001. But these increases must be at least maintained lest they get eaten up by inflation and mandatory pay raises. NRI needs to be funded at the full amount requested by the administration. Last year it was decreased by 10.9 percent from the previous year. It was actually 29 percent less than what was requested by the administration. NRI is where the basic targeted research is done. It provides new diagnostics and prevention-based biologics. Right now, a critical need in this area is for an injectable euthanasia agent for Foot and Mouth Disease. Right now the agent they are using in the U.K. is useful only as an IV product requiring tight restraint of the animals which is both dangerous for the people who handle them and hard to do and time-consuming. They are getting behind just euthanizing the animals. No. 2, facilities, adequate places to safely conduct research on large animals and dangerous biologic agents is a must. Therefore, AAC strongly supports the ARS-APHIS master plan for $440 million to rebuild the NADC, NVSL, and CVB Labs in the Ames, Iowa area. Plum Island, New York is also in need of adequate funding, not just to repair and maintain, but to modernize and come into compliance. We need BL-4 capability there to work on large animals. We rely on Canada and Australia to work on the adena virus on swine. We can't even do it in our own country. Three, FAIR 2002 guidelines for animal health emergency management systems. The AAC members participated actively in the food-animal integrated research conclaves and fully support the concept of coordinating research priorities of ARS and CSREES along the FAIR 2002 guidelines. Members of the coalition also participated in the safeguarding review at APHIS and through these exercises recognized the need for an emergency management system for animal health. The monitoring and surveillance portion is dependent again upon the quality of diagnostic tools provided through ARS and CSREES research. Prevention is the key. The initial price of $500 million or more for these items that we have listed is a large sum of money. But compare that to the devastation suffered by Taiwan when Foot and Mouth Disease destroyed their swine industry or BSE and Foot and Mouth Disease in U.K. As the Chairman has noted, it is over $1 billion already and the damage is far from total. To restate AAC's priorities, No. 1, increase funding for research. We are also a member of John's coalition for doubling agriculture research. No. 2, proper facilities to do the research, No. 3, coordinating the planning along specific guidelines to get the most research for the dollar spent with an eye on preventing the kind of animal industry disasters we have seen recently around the globe. Speaking for the AAC, I would like to again thank you for the opportunity to share our thoughts with you as you prepare for the 2002 Farm bill. Thank you. The Chairman. Thank you very much, Mr. Lemmermen. [The prepared statement of Mr. Lemmermen can be found in the appendix on page 75.] The Chairman. I want to acknowledge the presence of Senator Conrad, who has joined us and who would like to make a comment about one of our witnesses. We will hear from that witness and then proceed back into the order. Senator Conrad. Thank you very much, Mr. Chairman. I thank the Ranking Member. Well, thank you for holding this series of hearings. I apologize, because of my Budget Committee responsibility I have not been as faithful an attendee as I have been in the past, but we are getting to the end of that process. Mr. Chairman, I did want a chance to introduce one of our witnesses here this morning, Fred Kirschenmann, who is from North Dakota and someone we are very proud of in North Dakota. Are you trying to take credit for him in Iowa? Well, that is what happens, you know, when you are a good person and have an outstanding reputation, everybody tries to take credit for you. But Fred lives in North Dakota. He is the director of the Leopold Center for Sustainable Agriculture in Ames, Iowa. That is where Iowa gets in on claiming Fred. But he also runs the Kirschenmann Farms in Windsor, North Dakota. That is a certified organic farm, a 3500-acre farm that is really, I think, one of the show places of North Dakota. Fred is a national leader in the organic movement. He has been on many boards and commissions. I will just mention it would to the Members here. Fred has just completed a 5-year term on USDA's National Organic Standards Board and he has been a member of the board of the Henry Wallace Institute for Alternative Agriculture since 1974. In 1997, he was its president. We just couldn't have a better witness, one that carries more credibility than Fred Kirschenmann. We put on an event every year in North Dakota that we call ``marketplace.'' It attracts about 5,000 people. Fred has been a participant in that, has taught classes there. It is a joy to see him here as a witness. Again, I want to thank the Chairman and Ranking Member for permitting me this opportunity. The Chairman. Thank you, Senator Conrad, for your testimony about our witness. Dr. Kirschenmann, would you proceed. STATEMENT OF FRED KIRSCHENMANN, DIRECTOR, LEOPOLD CENTER FOR SUSTAINABLE AGRICULTURE, AMES, IOWA Dr. Kirschenmann. Thank you very much. I was deeply honored to be invited. Now, I feel especially honored. Thank you, Senator Conrad, for your kind comments. Thank you, Chairman Lugar. I have long been an admirer of your work and I am very pleased to be here this morning. In my adoptive State of Iowa, we recall Senator Harkin with deep affection, so it is especially a pleasure to be here this morning with all three of you here. As has been indicated, I am a farmer, first and foremost. I have taken an off-farm job to support my farming habit, as of November last year. So, I am now deeply involved in the research agenda at the Leopold Center. It is very gratifying to hear the comments about support for agriculture research because as a farmer, I recognize the vital importance of our ongoing research agenda. On the other hand, I think, again as a farmer, we have to simply recognize that our research has not done the job in terms of our farming community. The statistics simply don't look very promising right now. Over half of our farm income now comes from direct government payments. Costs of production exceed the market price for most of our commodities. There are now more farmers over age 65 than under age 35 in this country and we now have more prisoners than farmers. My friends ask me whether that means we have too many prisoners and not enough farmers and maybe it means both. The farmer side of that equation, of course, is inflated because as everyone here knows, we still count everybody as a farmer that produces at least $1,000 gross income. Our environment problems persist. In some cases they have gotten worse. Our rural communities are in a state of decline. Most States have an extremely narrow crop and income base. We have some serious problems facing us. I think one of the things which I want to urge us to do is to think about redirecting at least a small portion of our research dollars so that we can begin to change some of that picture which I have just described. Otherwise, we may indeed have an agriculture in this country without farmers. Our suggestion is that we really look at three interrelated initiatives as we think about our agriculture agenda for the future. Incidentally, all of these initiatives have now been demonstrated in terms of field experience that they are effective. The first initiative which I would like to suggest is that we take more seriously looking for solutions to agricultural problems from our natural capital, in other words, the ecological kinds of solutions. There is much evidence that indicates that these are successful approaches. The reason that they are beneficial for farmers is that farmers can begin to achieve their production goals without as many costly inputs. It is the costly inputs which in many cases, while it may increase yield, does not increase their net income. Of course, net income for the farmer is one of the crucial factors. There is a recent report, which was reported in the New Scientist Magazine, a study just released entitled ``Reducing Food Poverty with Sustainable Agriculture, a Summary of New Evidence.'' The report was put together by Jules Pretty and Rachael Hine, who are with the Center for Environment and Society at the University of Essex in Great Britain. It is interesting. They looked at 208 cases from 52 countries where sustainable agricultural practices have been put in place. What they discovered was an overall 40 to 100 percent increase in yield by using these technologies compared to previous technologies. The way they did it was by better use of natural capital, through introduction of new regenerative elements and through new and local appropriate crop varieties and animal breeds. It was an excellent example of this kind of research, which also appeared in Science Magazine last fall. The study actually appeared in Nature Magazine and was reported in Science Magazine where in China they took two varieties of rice that had been locally adapted and companion- planted them. They had an 18 percent overall increase in yield and a dramatic reduction in inputs for diseases control because the varieties were adapted to those local conditions. So, my question is how many of those kinds of solutions are currently unknown to farmers because we haven't devoted very much of our research to those kinds of solutions. The second and third solutions that I won't have time to go into are in the marketplace. We think there are many opportunities in the marketplace, but as long as farmers are going to only produce commodities which are essentially raw materials, there really isn't much hope for increasing their income. We have to find new markets that add value to those commodities so that there is a greater return into the farm sector of agriculture. Then, finally, our farm policies. We think that the kind of research that the Sustainable Agriculture Research Education Program has been doing in past years, which is clearly a showcase of success in agricultural research in this country, the idea is being copied in much of our other research and policies that would support that kind of research more as well as policies that would reward farmers for doing the right thing. Certainly, Senator Harkin's legislation entitled the ``Conservation Security Act'' is a prime example of that kind of research. So thank you very much. The Chairman. Thank you very much, Doctor. [The prepared statement of Dr. Kirschenmann can be found in the appendix on page 83.] The Chairman. Dr. Stuckey. STATEMENT OF RICHARD E. STUCKEY, EXECUTIVE VICE PRESIDENT OF CAST, THE COUNCIL FOR AGRICULTURAL SCIENCE AND TECHNOLOGY Dr. Stuckey. I am Richard E. Stuckey, executive vice president of CAST, the council for Agricultural Science and Technology. I am pleased to testify on behalf of CAST. CAST represents 37 professional scientific and engineering societies whose individual members exceed 180,000 scientists. Our mission is to bring science to public policy decisionmaking. The members of CAST represent a broad spectrum of the food and agricultural sciences including rural sociology, animal science, plant science, plant protection sciences, agricultural engineering, food technology, nutrition, toxicology, veterinary medicine and many other related disciplines. Although CAST is comprised of the various disciplines I have mentioned, today I have been asked to focus on the plant science research needs. Others on this panel have addressed animal and other discipline needs. There are two points I would like to make. First, there is a need for significantly increased investment in agricultural research extension and education. Second, the earth has limited natural resources. With the United States budget surplus, why not invest in the science that has helped contribute to that surplus? There was genuine excitement in the academic community when in 1989 a new program was introduced which many of you supported, called the National Research Initiative. But the authorized $500 million never materialized beyond the approximately $100 million over the past 10 years. A healthy agricultural system provides the building blocks for human health. We are what we eat. Today's world is becoming even more complex with more issues and more challenges to face. Simply slicing the budget research pie into more pieces is not the answer. We must make the pie larger. The examples of funding increases at NIH and NSF over the past 5 to 10 years certainly come to mind. Our goal is to protect our environment, maintain a sustainable agriculture and food system, and provide an economic return for those who labor long hours and assume financial risks. This can be improved with increased research spending. The approach to reaching these goals is what may differ. No longer does one size, one approach, fit all. Choices are not black and white, but rather shades of gray. For some the approach would be highly technology driven. For others, it would rely more on human capital. I believe this diversity in approach is well illustrated in the CAST report released yesterday on vertical coordination of agriculture in farming dependent areas. More and more we find there is no one approach or single way. Rather there are multiple approaches worthy of research and educational support. This brings me to my second point, the earth's limited natural resources. We all know that the world's population continues to grow and is projected to add another 50 percent to six plus billion during the next 30 to 50 years. We need to conserve existing natural resources. More food will need to be produced with the land and water that we have available today. There is no more land and water to be made. The supply is finite. Our plant research priorities should have the preservation of natural resources a primary goal. The primary mission areas of the Agricultural Research Extension and Education Reform Act of 1998 remain priority areas today. More specific to plant research, the Coalition for Research on Plant Systems, CROPS, was organized to determine the societal needs and to develop a comprehensive coherent natural research strategy. Recommendations from the CROPS 1999 Forum were endorsed by more than 75 organizations. The three research priorities identified were the following: One, expand the science and application of plant genomics. Two, develop practical, sustainable production management systems for the protection of the food and fiber supply of our natural resource base. Three, develop mechanisms to enhance producer profitability while minimizing risk of financial loss and ensuring food safety and security. Invasiveness of plant and other nonnative pests and bio- security concerns are also becoming priority issues. More public research and education dollars are needed, not only for the development of new products, but also for the safety testing of these products as they come to market. The diminished role of the public-funded agricultural research has shifted the research heavily to the private sector for which there has been some public distrust. I often wonder how the acceptance of genetic engineering may have been different if a majority of this research had been done with public rather than private funds. In conclusion, there is a need for greatly increasing the Federal agriculture and research budgets. The need greatly outweighs our ability to select and choose the areas for where this research should be conducted. There are simply too many choices for a stable or declining budget to address. The world today is more complex than ever before. International travel and trade bring on new dimensions, new problems and new opportunities. We are responsible for the careful nurturing of the planet so that it benefits mankind and the creatures that inhabit it, while protecting the resources for future generations. Thank you for allowing me to share some thoughts and this testimony on behalf of the members of CAST. The Chairman. Thank you very much, Dr. Stuckey. [The prepared statement of Dr. Stuckey can be found in the appendix on page 91.] The Chairman. Dr. Robertson. STATEMENT OF PHIL ROBERTSON, MEMBER, COMMITTEE ON AN EVALUATION OF THE U.S. DEPARTMENT OF AGRICULTURE NATIONAL RESEARCH INITIATIVE COMPETITIVE GRANTS PROGRAM, NATIONAL RESEARCH COUNCIL/NATIONAL ACADEMY OF SCIENCES, AND PROFESSOR, DEPARTMENT OF CROP AND SOIL SCIENCES, MICHIGAN STATE UNIVERSITY, HICKORY CORNERS, MICHIGAN Mr. Robertson. Good morning, Senator Lugar and Senator Harkin. Thank you very much for the opportunity to speak today. I am Phil Robertson, Professor of Crop and Soil Sciences at the W. K. Kellogg Biological Station, Michigan State University. I serve as a member of the National Research Council's Committee to evaluate the USDA's National Research Initiative Competitive Grants Program, known as the NRI. I am here this morning to summarize the committee's report. As you know, the National Research Council is the operating arm of the National Academies, which includes the National Academy of Sciences, a private nonprofit society that was chartered by Congress in 1863 to advise the government on matters of science and technology. The study that I will address today was requested and supported by the USDA. It has undergone the usual rigorous independent review by volunteer experts, internal and external to the NRC. It is hardly necessary to describe to this committee the importance of scientific research for providing the American public a food and fiber supply that is safe, affordable, and environmental responsible. The fundamental success of our efforts to produce food and fiber at a rate sufficient to meet the needs of a fast growing national and global marketplace cannot be reasonably questions, not can the starring role of research in this success be underestimated. Agriculture is more than ever a knowledge-driven industry. Advances in genetics, in field crop technology, in animal health, in food storage and processing, in pest protection and forest health, advances in all stages of the production chain are driven largely by research findings. The NRI was launched in 1992 in response to an NRC report calling for an expanded competitive grants program to address emerging basic research needs in agriculture. Enabling legislation authorized annual spending of up to $500 million on a new competitive grants program. Annual funding has remained at or near $100 million since 1992. Since its inception, the NRI has functioned as a pilot program to support high quality research related to the nation's food, fiber and natural resources system. In 1998, the NRC appointed a 14-member committee to assess the quality, value and other aspects of the program and to remember changes for the future. To carry out this change, the committee gathered data, conducted surveys and interviews and solicited testimony from industry, professional societies, farm organizations, universities and agricultural experiment stations and other Federal agencies. Throughout this process the committee found a great deal of consistency in its findings. In general, the committee found NRI to have financed high quality scientific work within Congressional guidelines. In this sense the program was judged to be a substantial success. The committee also found, however, that the program is in danger of languishing. The program size, the size and duration of individual grants and the low overhead allowance have led to reduced application numbers, especially from scientists outside the traditional food complex. Moreover, the committee found that traditional stakeholders in the NRI are losing confidence in the health and direction of the program. The committee has made 16 specific recommendations to bolster and revitalize the NRI. Many of the recommendations are structural and relatively easy to address, given administrative will and Congressional approval. I would like here to emphasize three of the most difficult but important recommendations made by the committee. First, the committee recommends that the NRI and other competitive USDA research programs be moved to a new extramural competitive research service that would report to the Under Secretary for Research, Education and Economics. Second, the committee recommends the establishment of a new extramural advisory board that represents NRI stakeholders and has a non-USDA chair. These two changes would place the NRI at a level equivalent to USDA's other main research agencies. The committee believes strongly that unless extramural competitive research is given the same organizational stature as formula-funded and intramural research in USDA with its own advisory board, that it will remain difficult for the program to achieve its mission. Third, the committee recommends that by 2005 the NRI budget be increased to a level equivalent to the $550 million recommended by the NRC in 1989, so long as recommended changes in priority setting, documentation, and organization are put into place. The committee believes that inadequate funding of the NRI has significantly limited its potential and placed the program at risk. A substantial increase in funding will ensure a robust and high quality public research effort that can significantly transform the nation's food, fiber and natural resources system in response to critical needs in agricultural productivity, environmental health and societal well-being. The committee also believes that after reaching this budget level that future budget growth of the NRI should be evaluated and compared with the budgets of complementary programs in NSF, NIH, and DOE. Allow me to conclude with a reiteration of the extraordinary importance of public merit-based, peer-reviewed research in food, fiber and natural resources. In the opinion of the committee, which included scientists and non-scientists from both industry and the public sector, past public research and current private activities cannot meet the needs that are being created by population growth, climate change and natural resource deterioration or the challenges related to food safety and nutrition and to the growing convergence of foods and medical research. To meet these needs requires a vibrant, reinvigorated NRI that provides consistent funding for the investor-initiated, curiosity-driven research that is the backbone of the U.S. basic research enterprise. Thanks again for the opportunity to speak this morning. I will be glad to answer any questions. The Chairman. Thank you very much, Dr. Robertson. [The prepared statement of Dr. Robertson can be found in the appendix on page 94.] The Chairman. I would pick up one comment that you made in the latter part of your statement about the merit-based aspect. This has arisen at another point in our hearing in which, as I recall, Dr. Horn was queried by Senator Hutchinson that as many as 350 projects, being done at land grant colleges or various other situations, were not merit-based, but, nevertheless. Dr. Horn, I suppose with some sense of realism, suggested they might very well be restored by the time we are through with the appropriation process. This is sort of a normal course for our situation. You offer some illumination because when we passed the 1998 act, the $600 million, $120 million each year, the thought was that this would be merit-based. There would be peer review. These would be something well beyond the normal funds that go to keep the doors open in a lot of our research efforts in colleges around the country. Our House colleagues did not see as much merit in that as we did. There are legitimate differences of opinion in a democracy. As a result, nothing of this occurred, zero, really, for the first year. USDA, to its credit, has tried to revive this idea administratively, with the Secretary of Agriculture intervening. Dan Glickman, last year, found a clause that gave him the ability to go out and award 86 grants. There were 1,000 competitors. So, the political situation is in a nutshell in this predicament, on the one hand perennially. Gentlemen such as you come before us and point out the benefits of cutting edge research, thinking outside the box, and new ways and peer-based and merit-based and all the rest of it. But in the practical politics, as Senators look after their constituents and Members of the House likewise, sometimes this happens more or less. I would hope still that we would persist. I think there is value in what you have to say. Many of you have underlined this in various other ways. I want to spend my time on questions and on some comments that appear on Dr. Kirschenmann's testimony because he touched upon this briefly as he had to summarize. But essentially he says, and I quote, ``The brutal truth is that if all we expect from agriculture is that it produce sufficient quantities of food and fiber as efficiently as possible on a global scale, then we should get out of the farming business altogether.'' He points out essentially, as I think almost anybody involved in farming would, that at least currently the return on investment from most farming operations in this country, and I presume that may be true around the world, is very low. This is sort of a dim secret that never quite bubbles up in these situations. Just for the sake of argument, in the Farm Bureau meetings around Indiana, I point out that for my own farm, in the 45 years that I have had responsibility and by the best accounting that I have, has had roughly a four percent return on invested capital. Many farmers say, ``Well, that is far too high.'' But other people looking at this who are not farmers would say, ``What has been going through your mind for 45 years, with Treasury Bonds regularly, 30 percent bonds at 6, 7, or 8 percent? You know, we can see why you might indulge this for a while, but why have you persistently maintained this for 45 years at this low rate of return?'' Others would just simply say they want to know how we got the four percent. I am not really sure how that has worked out. This is why we start each of our Farm bill debates with a business which essentially is not making very much money. Then we proceed through the processors who come before us. We have a big argument about concentration, whether it is the stockyards or the food processors or the people who are do retail. Indeed they are concentrating because many of them are not making very much money, either. But the Wall Street people come and say the whole industry, whether you start from the producer all the way from the time it passes out of the supermarket, is a low return business. If you were to advise clients in America who have venture capital, which have substantial amounts of capital, this would not be the place that they would put it. So, I am intrigued by the testimony that Dr. Kirschemann is giving because he is saying essentially we have to not only market the corn, but market the farm. There are a good number of things that may need to happen. Now, many people to stay alive on farms discovered this a long time ago, all sorts of alternative systems of income quite apart from the in-town job, but they were doing things creatively on their farms that resulted in greater income. The question then, obviously, is how do you couple this with our reverence for the soil, for the ecology, the heritage we have? That is a very difficult situation, too, although not impossible, given the interest in conservation, not only of this committee, but of this country. Along this combination of conservation and research, not long go after we had testimony from the local conservation people as part of the hearing, Senator Harkin, I give him credit, wanted to concentrate on conservation early on to get this started and I agree with that. I think it is a very important thing. But I found that on my own farm, the local conservation person, now given the software that they have been able to produce, they have coupled together all the soil surveys and as a matter of fact, all the data that they have, really, from the State of Indiana. They can put overlays on a screen in front of you that show you what they would predict for an average year of the yield of corn literally acre by acre on the 604 acres that I have. They will show some places that I would never have thought of planting corn or soybeans or whatever else it is that you have a mind to do. They can show what kind of retention there will be of moisture in any of these soils, what are thoroughly inapplicable for septic tank systems if you ever should think about putting housing there and a whole raft of things, just one revelation after another. All of this is available through USDA, through the Conservation Service now, through extraordinary research efforts. This is a different kind of research in a way. It is a data collection, but it is also imaginative so that farmers such as myself or those who are helping me, can make better decisions in terms of conservation, production, maximization in terms of inputs or not inputs at all, if that were to be the decision, in ways that I could not have conceived that we would have these options even 15 years ago, maybe even five years ago. All of this strikes me as tremendously important, if the four percent return is ever going to be something else. If we are ever to have debates on the Farm bill that are something other than a perpetual recession and how you either revive those who survive or keep a few more alive. So, the need for research to tackle this holistic situation just seems to me to be imperative. That doesn't take away for a moment how we might make the yield of corn triple. People like Dr. Borlaug who I cited earlier on would say that is probably necessary if the world is to be fed in 2050, hard as it may be to distribute the corn, given all the political circumstances and governments that intervene and distribution systems even within countries. But at least basically, tripling of yield has been a goal in USDA and has been achieved, say, from the 30's until the present. Can it be achieved again is really a big question or should it be achieved? Can you stretch the wee plant that further. As has been suggested, we think about crops that we don't think about very often that are still to be discovered as commercially viable and valuable. That may be the more promising situation, but one that really stretches even beyond the energy debate we were having earlier, how you make that transition. So, I appreciate the work that all of you have done in your testimony. I have read each of the papers. They are a composite, really, of very good guidelines of what in public policy we ought to be doing. I just take this opportunity to sort of monologue on the problems that we face in total in this committee in trying to help the income of farmers as well as the heritage, as I say, conservation-wise and try to be prepared, really, for a day in which maybe we got the export thing straightened out in which the politics of world trade are more propitious. Dr. Kirschenmann, since I zeroed in on your paper, do you have any comment on this? Mr. Kirschenmann. Well, I think your assessment that we really need to start looking at these things from a holistic perspective is exactly on target. The reason I made the comment in the paper about getting out of the farming business altogether, of course, that is not original with me. Stephen Blank at the University of California suggested that in his book, ``The End of Agriculture and the American Portfolio.'' A lot of people got mad at him for that. I personally applauded him because I think we really need to take that seriously. You know, if all we expect of farmers is to produce raw materials for our food and fiber system, the brutal truth is that farmers in other parts of the world who have cheaper land prices and cheaper labor prices can do that more cheaply than we can. So, he is simply saying, ``Let us face that fact.'' Now, I think the piece that he doesn't tell us about is that farmers really do produce a whole lot more than the raw materials for food and fiber. They are major players in protecting our environment. With the right policies and the right resources, they could be more important players. They play an important role in keeping our rural communities vibrant. So, I think that a debate which we need to have is whether or not the citizens of this country want simply the raw materials or whether they want some of the other public goods that farmers are in a position to provide. The answer to that question seems to me to be critical in terms of the future of agricultural policy. I believe and in terms of citizens that I have talked to, that they do want these other public goods from farmers. That plays in to part of the market and my comment about marketing the farm instead of farming the market. We have a lot of things to market through our farms. Most of the studies, the Hartman Report and others indicate that 30 percent of the consuming public today and that percentage is increasing would like to buy a food story with their food. They would like to know the farmer that produced the hogs or the corn. They would like to know the processor who processed it. They would like to know that there was good environmental stewardship. They would like to know that the animals were treated properly. They are doing a much better job of this kind of marketing the farm where there are computer scanners in the store and you can pick your package of pork chops off the shelf and run it through this computer scanner and it will bring up the picture of the family that produced the hogs, where it was processed, how it was handled, all the way right down to the supermarket. So, the story is right there. I think there are tremendous opportunities here, particularly for our mid-sized farmers which are the ones who are the most vulnerable now. According to the 1997 statistics, we have only 575,000 of those farms left. They are the ones that are the most vulnerable, because they are not big enough to get access to the major commodity markets and they are too big to do the direct marketing which has been the avenue that the smaller farmers have been taking. We have seen some increase in numbers now of those smaller farms. So, I think here is a marketing opportunity. With a little bit of research and the right kind of policies that sort of put them on a level playing field and some imaginative work at the Leopold Center we intend to zero in on that and see if we can't do a hopefully successful demonstration in Iowa of how this could be done and create some new markets for these farms. So, I think your assessment of that, looking at the whole system, is exactly what we need to do. The Chairman. Doctor, parenthetically, I have mentioned that on Thursday the committee will hold a hearing. This is only a very small part of this problem. But we are trying to think about the potential markets to farmers for CO2 sequestration or no-till policies or the various items that are coming along, that are big concepts. How do you work out the markets so there can be some buyers and sellers? We had testimony at one conservation hearing from the State of Michigan that they have a website now in which people on the farm who are, say, doing no till or various other practices, are in a position to sell to industrials in Michigan who have some problems right now with regard to waterways. These credits, an actual transfer can occur. They plan to go on line with actual trading of this, which means income for the farmers who are doing the selling. This is, as I say, only a very small part of the forest, but it can become a much larger one as our negotiations continue throughout the world with regard to clean air and clean water. Senator Harkin. Senator Harkin. Thank you, Mr. Chairman. It has been a fascinating discussion. I have listened intently. I am sorry that I have to leave. In fact, I have to go talk to a group about conservation. I think, just picking up on what you just said, that a lot of times we look for the big fix and we look for something that has a universal application, whether it is in our commodity programs or whatever. Maybe we ought to be thinking about a lot of small fixes that go to make up the big fix, rather than a big fix that you try to impose on everyone. Yes, there are a lot of things out there. If you do one small thing, you say, well, everybody can't do that. I understand that but if you have a lot of different things out there, I think maybe that is what I think our challenge is in research. It seems to me we have a couple of components. We have the basic research which is just ``why.'' A lot of people ask ``why.'' That is basic research. We have to do a lot of basic research and focus more on basic research. Then there is the directed research; how? How do you do these things? What is the end goal you want to seek and how do you get to this end goal and more of the things that you were just talking about there, I think, Dr. Kirschenmann? So, I think we have to look at both of these, both the basic research and some of the directed research in trying to accomplish certain societal goals that we may want. I am not certain that there has ever really been a consensus here on what those goals out to be. We all wax eloquently about the need for healthy rural environments, family farms, viable communities with good schools and hospitals and things like that. But then, it seems like the policies we have had in the last 30 or 40 years have made us go just in the opposite direction. Just take for example the capitalization of land values. We had two good hearings in Iowa this weekend, Mr. Chairman. Some of the testimony from Iowa State, Mr. Duffy and Neal Harrel, talking about how our farm programs really have elevated the capitalization costs of land, and we can't just pull the plug now. You have that all locked in so what do we do? How do we get young people who may want to do some agriculture? Maybe they don't want a farm, 3,000 or 4,000 acres of land. But they would like to do something and have a good life style and perhaps find a niche market that is out there that would provide them a good income. But there is no way they can do it with the capital cost of land right now. So, somehow, we have to try to figure out how we address that, too. I don't have the answer. I sure have the questions, but I don't have the answers to this. So, in other words, it was a good discussion. Dr. Kirschenmann, I look forward to working with you in Iowa at the Leopold Center on this. Basically, I think one of the things we have to start looking at, and I will just make this last pitch, we have to look upon conservation as a commodity. Conservation should be a commodity and it should be treated as something that a farmer produces, producing conservation. But I won't get into that. I just want to ask one question going back to what I said earlier. I was at the Ames Lab again this weekend, as I said earlier. I want to ask Mr. Caspers and Mr. Lemmermen of the various commodity and animal health groups, what is your position regarding the need to modernize the Ames ARS and APHIS facilities? Do they meet international accreditation standards and how do you feel about it? I read your testimony, Mr. Lemmermen, and you mentioned it specifically. I just wondered how the two of you feel about how fast we have to proceed on this. Mr. Caspers. Mr. Caspers. Thank you, Senator. Certainly I am familiar with that project and very aware of the need, certainly because it is in my backyard, literally, but also because of the industry and my involvement with pork production. That is a perfect example, I believe, of a facility that we need to improve the basic infrastructure for research and support for agricultural industry. But our coalition certainly cites the need to build that infrastructure around the country. That is one example of something that is desperately needed, I believe. Certainly in other industries there are other needs also. We would like to see more emphasis and more funding put toward building that infrastructure to support research needs for ag. Senator Harkin. Thank you very much, Mr. Caspers. Mr. Lemmermen. Mr. Lemmermen. Well, Senator Harkin, our policy, I don't know we have a direct policy, but any time we could have had it done before yesterday would be great. When it was first proposed we were looking at $380 million. Two years later we are $440 million. By the time it is done it may be over $1 billion to get it done. So, any time we get it done prior to yesterday is great. We need this type of facility. It supports our Yones Programs in dairy. It supported the pseudo-Rabies in swine. There are a number of things that it does and it does well because of the ability to cross-disciplinary lines with APHIS and ARS being right there together and doing these things. One thing we have to remember that as we pass regulations, part of the thing that has hurt Plus Island and Ames is regulations were passed for, say, animal welfare. Where they used to have five animals in a pen, now you have a certain number of square feet, so there is only room for one animal in that pen. Well, now you have to build five times the size of the facility and the money is not there to do it. I mean the regulations came alone without the money. This has put us behind. As Congress looks at regulations, they need to bring the cart along with the horse. True, animal welfare is important. We need to take care of those animals. But we also need to take care of the industry and bring the money along to modernize the facilities so we can still do the work that needs to be done. Thank you, sir. Senator Harkin. Thank you, Dr. Lemmermen. The Chairman. Thank you, Senator Harkin. Gentlemen, we thank you very much for coming today and offering such important testimony. Your response has been appreciated. Thank you very much. The Chair would like to call right now a panel composed of Dr. David Chicoine, chair of the National Association of State Universities and Land Grant Colleges Board on Agriculture and Dean of the College of Agriculture, Consumer, and Environmental Sciences, University of Illinois at Urbana, Illinois. Dr. Bobby Phills, chair of the 1890 Legislative Committee and Dean and director of Land Grant Programs, College of Engineering Sciences, Technology and Agriculture, Florida A&M University in Tallahassee, Florida. Dr. Vic Lechtenberg, chair of the National Agricultural Research, Extension, Education and Economics Advisory Board and Dean of Agriculture, Purdue University, West Lafayette, Indiana. Gentlemen, it is a privilege to have you with our committee this morning. As I mentioned earlier, we will ask you to summarize your testimony if possible in five minutes. Your statements will be made a part of the record in full and we will proceed with questions and answers at that point. For those of you who are trying to gauge your time or for others who may be watching this on closed circuit television and want to come in, we will try to conclude the hearing about noon, when I understand a vote will occur on the Campaign Finance Reform Bill, an amendment being considered even as we speak on the floor. Doctor, would you please proceed. STATEMENT OF DAVID CHICOINE, CHAIR, NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND LAND GRANT COLLEGES BOARD ON AGRICULTURE, AND DEAN, COLLEGE OF AGRICULTURAL, CONSUMER, AND ENVIRONMENTAL SCIENCES, UNIVERSITY OF ILLINOIS, URBANA, ILLINOIS Dr. Chicoine. Thank you, Senator Lugar. Thank you for the invitation to testify today. I am David Chicoine and I am Dean of the College of Agricultural, Consumer and Environmental Sciences at the University of Illinois and I do serve as the chair of the board on Agriculture of the National Association of State Universities and Land Grant Colleges. Dr. Phills will speak on behalf of the historically Black institutions. I understand that the tribal colleges and the U.S. territories will be submitting testimony for the record. We support addressing specific issues and needs of these institutions. I commend you for your support for research, extension and education that is supporting the U.S. food, agriculture and natural resource system. A special note of appreciation for the establishment and support of the initiative for future agriculture and food systems, IFAFS. We recommend the expansion and further refinement of these programs in the reauthorization of the Farm bill. As we have heard from testimony here today and previously, there is widespread recognition of the need to increase investments in agricultural science and education. The Board appreciates and commends the broad spectrum of interest groups that have come together to form the National Coalition for Food and Agriculture Research, the National CFAR. We support their recommendations and that of their membership for a doubling in funding for agricultural research, extension and education in five years. To address the critical issues of the new century, we believe a strong science and education system is essential to effectively deal with all of the policy issues in the next Farm bill. In my written testimony, we provide a number of specific examples of how the research, extension and education system can be better harnessed and coupled with the action agencies of the USDA to address all of the issues facing this committee. This includes better support for farmers and ranchers, building international trade and market opportunities, conserving natural resources, better nutrition and health including food safety and revitalizing rural economies and their communities. Let me comment briefly about each of these. Better research and education support for farmers and ranchers, for example, for using the enhanced and new management tools made available by the new Farm bill have the greatest impact will be essential. In building international trade and market opportunities, science and education are the drivers for new technologies. New technologies provide the foundation for new economic opportunities and value added activities that yield profits and positive trade balances. Publicly funded research and development has provided the U.S. a global competitive advantage. It is essential to enhance this advantage because future growth will be in international markets. On conserving natural resources, continuing to improve the stewardship of natural resources and the environment is a very critical issue. USDA and U.S. EPA are focused on a new approach emphasizing results-based outcomes, rather than regulating practices. Under this new approach, we can collaborate with USDA and RCS and the National Association of Conservation Districts to provide needed cutting edge research and education and outreach programs. For nutrition and health, we believe using the knowledge system can improve this nation's nutritional programs. An example is the Family Nutrition Program, FNP, where extension staff educate food stamp program participants. Universities can partner with USDA on enhanced nutritional research to improve understanding of consumers' behavior. Through improved diets and better nutrition, health can be improved. Revitalizing our rural communities is essential. But little is really known about the success of various strategies to encourage long-term growth and development in rural economies and their communities. Universities and land grant colleges are well positioned to help rural economies and their communities develop strategies and programs based on good science, sound research, and using effective extension programs to address their futures. Research on and education programs about possible new economic opportunities based on natural resources, bio-energy and biomaterials development and new business structures for value added agriculture are needed. New models of collaboration between university, Federal laboratories and the private sector are needed to ensure that results of advanced discovery research are commercialized into new products and activities creating jobs, businesses and economic growth. For research, extension and education, we support the intent of Congress to facilitate greater cooperation between research and extension and between States. We support the intent of Congress to enrich meaningful stakeholder development and recommend the reauthorization of the National Agricultural Research, Extension, and Education Advisory Board. We endorse and recommend the continued authorization of a balanced portfolio of funding mechanisms, making it possible to address long-term needs and short-term issues. Funding from both mandated and discretionary accounts is recommended. In summary, we are interested in tightly linking the research, extension and education system to the critical policy issues addressed throughout the Farm bill. We believe that the increased investments in research, extension and education being called for can most effectively address challenges and add value by linking the knowledge system tightly with agencies in USDA. By doing so the Federal agency and State and land grant universities can, as partners, better serve agriculture and rural communities. We look forward to working with the committee and your staff on details for these recommendations. Thank you very much. The Chairman. Thank you, Dr. Chicoine. [The prepared statement of Dr. Chicoine can be found in the appendix on page 98.] The Chairman. Dr. Phills. STATEMENT OF BOBBY PHILLS, CHAIR OF THE 1890 LEGISLATIVE COMMITTEE AND DEAN AND DIRECTOR OF LAND GRANT PROGRAMS, COLLEGE OF ENGINEERING SCIENCES, TECHNOLOGY AND AGRICULTURE, FLORIDA A&M UNIVERSITY, TALLAHASSEE, FLORIDA Dr. Phills. Mr. Chairman and Members of the Committee, I would like to thank you for the opportunity to testify on behalf of the 1890 Land Grant Universities. I am Bobby R. Phills, Dean and director of Land Grant Programs, for the College of Engineering Sciences, Technology and Agriculture, at Florida A&M University. I also serve as the chair of the 1890 Legislative Committee. I would like to begin my testimony by associating myself with the testimony and remarks of my colleague, Dr. David Chicoine, who serves as the chair of the NASULGC Board on Agriculture. There are three key issues that I would like to address. One is the critical need for increased investments. Two is equitable access. Three is appropriate funding mechanisms. I am heartened by the recent calls to double the investment in agriculture research, extension and education. As we support critically needed investments in agriculture research, extension and teaching, it is essential that the specific funding needs facing the 1890 community also be addressed. Chief among these is the establishment of an 1890 Land Grant Endowment Fund. The 1890's are Land Grant Universities. We did not receive funding benefits from the distribution of Federal lands, as did our colleagues in the 1862s. Through the years the 1890 universities have struggled with inadequate funding resources to meet the especially challenging needs of the underserved communities. The proposed endowment account could be utilized to help address historical inequities of resources and to allow 1890 institutions the opportunity to build our capacity to effectively compete for other funding resources. In the 1998 Agriculture Research, Extension and Education Reform Act, a 50 percent State matching requirement was established for the 1890's. Since passage of this act, we have made significant headway in securing State matching funds for our programs. We are now recommending increasing the State matching requirement to 100 percent. We request that this matching requirement be ramped up over the current requirement of 50 percent with an increase of 10 percent per year over the course of five years. We recognize that it will be harder for some of our 1890 universities to meet this matching requirement than others. We therefore ask that the Congress provide the Secretary of Agriculture greater flexibility in waiving an institution's matching requirement in response to the petition from the university. We also recommend the reauthorization of the following 1890 programs: The 1890 Capacity Building Grant Program with a provision to include 1890 extension as an eligible participant. The 1890 Facilities Program, recognizing that quality academic, research and outreach programs demand that we have quality facilities for training and research exploration. The Socially Disadvantaged Program for small and limited resource farmers, Section 2501 and the Base Formula Program for Research and Extension. We further recommend that the minimum funding level or floor for both of these base programs, research and extension, be raised from 15 and 6 percent to 25 and 15 percent, respectively. In addition to our needs for increased funding, the 1890's need equitable access to existing funding sources so as to become fully active participants in the Federal/State land grant partnership. Currently, the 1890 universities are not eligible for formula funds targeted to forestry issues of the McIntyre- Stennis Program. Many of our institutions are located in States where forestry is a major agricultural industry. These institutions have forestry and natural resource programs that are germane to the forestry industry. We recommend an expansion of authorizing funding for McIntyre-Stennis and increasing eligible participants to include the 1890 universities. We welcome the return of West Virginia State College to the ranks of 1890 land grant institutions. We recognize the need for West Virginia State to retain the base funding that was used to reestablish them. We agree that they should be eligible to participate in those programs in which the 1890 land grant institutions and Tuskegee University are eligible. We would hope that additional resources are made available to all of the 1890 land grants and Tuskegee, such that West Virginia State's participation does not put an additional and unintended burden on their colleagues. We would like to commend the leadership of the USDA CSREES and the land grant community for the development of the new IFAFS Competitive Grants Program. The departmental staff and others went the extra mile to make sure that our institutions were fully aware of the new program and gave us the opportunity to compete as equal partners in this process. We have achieved some success. However, with enhanced support to increase our competitiveness, we will do even better in the future. While we support competitive grants, we are concerned that some mistake the term ``competitive'' with the term ``quality.'' The Competitive Grants Program does provide a form of quality control for awarding funds for relatively short-term projects. However, many of the programs that we provide need to be sustained over time. Short-term competitively awarded projects do not adequately serve the longer-term needs of the underserved populations that we work with. Formula funds and endowment funds provide the necessary sustained funding that is required to truly build capacity. Again, I would like to thank the committee for the opportunity to testify here today. We look forward to working with you and our colleagues in the land grant community as we move through the reauthorization of the Farm bill. We urge you to use this moment, this opportunity, to invest in our 1890 universities and in the future of our communities. Thank you. The Chairman. Thank you very much, Dr. Phills. [The prepared statement of Dr. Phills can be found in the appendix on page 109.] The Chairman. It is now my privilege to introduce Dr. Vic Lechtenberg. Let me have a point of personal privilege. Earlier in the day, very much earlier this morning, as many of you will recall, Senator Stabenow of Michigan you were not here at that time Dr. Lechtenberg, but she introduced Dr. Phil Robertson who was to appear on the panel before you. She noted that Michigan State University was indeed in the Final Four. She was planning to head to Minneapolis to watch all of that. I would mention parenthetically that Purdue University has a Final Four entry with the women's team. So, we shall be excited with you about that prospect. Dr. Lechtenberg, in addition to being Dean of Agriculture at Purdue, has been the Chairman of the Advisory Committee on Research that was mandated by the 1996 Farm Bill. He has conducted those duties. We had a recent meeting with his panel, which was very productive, I think, for many of us. Dr. Lechtenberg. STATEMENT OF VIC LECHTENBERG, CHAIR OF THE NATIONAL AGRICULTURAL RESEARCH EXTENSION, EDUCATION AND ECONOMICS ADVISORY BOARD AND DEAN OF AGRICULTURE, PURDUE UNIVERSITY, WEST LAFAYETTE, INDIANA Dr. Lechtenberg. Thank you, Senator. Thank you for the opportunity to talk with you for a few minutes about the activities of the National Agricultural Research Economics and Education Advisory Board. As you know well, the Board is a statutory committee established by the FAIR Act in 1996 to help foster a successful and healthy U.S. food and agriculture system by improving USDA's research and education programs. Then the Research Reform Act of 1998 added some additional responsibilities. I am going to talk briefly about some of the responsibilities of the Board and some of the recommendations that we have made to the Secretary. One of the responsibilities of the Board is to try to engage in stakeholder input activities. We have, in our recommendations, tried to reflect the collective interests of stakeholders from whom we have heard around the nation. The members on the board come to their role from 30 specific constituencies. They really all acted, I think, in a manner that truly reflects the best interests of the entire food, agriculture and natural resource system. They have not been advocates solely for the interests of their special constituencies, but have been effective spokespersons for the entire research and education system. This, in my opinion, has really enhanced the Board's credibility and it has made it a pleasure to serve on the Board as chair. It would have been less comfortable had they not been such good statesmen. The recommendations that I am going to talk briefly about include several. The first three are recommendations that the Board has made very recently to the Secretary of Agriculture and previously, a few months, to the Transition Teams as the new administration was coming into office. They deal with the profile of agriculture and food system programs. As you heard from others before the committee today and I know in discussions with Dr. Borlaug and others, the population of the world has quadrupled in the 20th Century and it is really research and technology that have made it possible for the world food system to feed that population. We think that the challenges that we face in the next 50 years as we try to cope with environmental stewardship, with global trade, with biotechnology, emerging diseases, food safety, health issues of diverse populations and so on, are challenges that are going to be at least as great as those that this world food system has faced in the last 50 years. As we face those challenges, we are convinced that public sector research in agriculture does not appear to have the level of national priority that we think it should have, at least not if one judges it on the basis of funding levels that have been appropriated. The Board believes clearly that it should be a high priority, and we further believe that USDA should lead the efforts, to elevate the importance of agricultural research and education on all fronts--with Federal agencies, with the Congress, and with the public. We think that there are phenomenal opportunities for advances across the entire food and agricultural research system and that this system merits that level of priority. We further think that USDA, with its other agencies as partners, should determine what these research priorities are going to be. If USDA is setting these priorities and helping determine the new technologies in advance, we are convinced that they are going to have greater relevance to the world of agriculture and food systems and adoption of those technologies is going to be hastened. We made a second recommendation in terms of communications. We believe that a proactive public communications strategy is essential to inform Americans about two things: One, the important contributions that the agriculture and food system makes to our nation's economy; and two, the importance of agricultural research and technology to the underpinning of that sector of our economy. We think that is essential to help improve and strengthen our production and market competitiveness and to help harness these new technologies for the benefit of all society. We further think that these communications responsibilities ought to in some way be separated a bit from the day-to-day public relations duties of the office of the Communications Director and the Secretary of Agriculture's Office. Our third recommendation in our transition statement had to deal with partnerships. The partnership among research, education, extension, and economics, and units of USDA and the land-grant universities and colleges of agriculture is known worldwide and respected. It should be strengthened. We believe that further incentives are needed to expand multi-institutional efforts to help foster interagency cooperation and to build the strength of the 1890 and 1994 institutions. In that context, Senator, the 2501 Program to Minority and Small Farmers, we believe to be especially important. In addition to those three items, we talked about peer review. The Merit Review System in USDA really needs to address two critical issues: One, are the endeavors that are undertaken relevant to solving real problems? Two, is the science of high quality? The board believes that increasingly USDA's review procedures recognize both of these components and it has already been mentioned that the Initiative for Future Agriculture and Food Systems was, in our opinion, very well managed in that regard. Also, ARS has revamped its peer review system this past year and a half and the Advisory Board has had significant input into that process and has been working to review that approach. We believe they have done a very good job and that that system now is very credible and we want to commend them for their efforts. Based on our stakeholder symposia, the Advisory Board has also made some specific recommendations for priority areas for research and education. You have heard some of these words. They include some things like: added value and new use products, agricultural genomics, education and information issues, emerging animal and plant issues including the emergency preparedness and response capability, environmental stewardship, food safety, human nutrition, communications and outreach. All of these, we think are vitally important. Then in 1998, the 1998 Reform Act added an additional responsibility to the Board to review adequacy of funding. You heard some things about that already today as well. The board believes that when we have a sector that represents 15 percent of the nation's economic output, but only 2 percent of the nation's research R&D, that it is grossly underinvested in research and technology. We strongly support the efforts of the National Coalition for Food and Agricultural Research to expand funding and to expand broad stakeholder input into the program priorities. We have also made recommendations to the Secretary with respect to human resources. We believe that USDA is in a unique position, with the various partnerships that it has, to enhance human capital development and building and we encourage them to do everything they can in that arena. Other agency cooperation has also been on our radar screen and we are encouraging USDA across all the REE missions as well as other mission areas to do more to work cooperatively and avoid duplication of effort. As we think about the future and look at some targets of opportunity, we think there should be more connections between agriculture and the food, nutrition, and health arena; between agriculture and the environmental protection and ecology; biomaterials and bio-energy offer exciting opportunities; and the preparedness and emergency issues and defenses against bio- terrorism are critical. Structural changes are causing upheavals across many rural communities. We think there needs to be some empowerment of rural communities in terms of developing local leadership that USDA can help foster. Advances in other fields of science and technology are critical and we would like to see some greater effort on the part of USDA to try to capture some of those possibilities and opportunities as well. There are several features that we think are unique to agricultural research that I have outlined in my prepared comments and I would be very happy to answer any questions about those. Mr. Chairman, this concludes my statement. I want to thank you and the committee for your support. I would also like to take this opportunity to thank all of those across the country who volunteered to serve on the Advisory Board and who have come before the panel to offer their thoughts and comments in the stakeholder symposia and you and other Members of Congress who appeared before our session last week. We thank you very much. [The prepared statement of Mr. Lechtenberg can be found in the appendix on page 113.] The Chairman. Thank you very much, Dr. Lechtenberg. Dr. Phills, I note the careful thought you have given to specific ways in which the 1890 universities could be strengthened. I appreciate that. That is important information for our committee as that portion of the Farm bill is formulated. Dr. Lechtenberg has picked up your thoughts with regard to the Section 2501 situation and the broader Advisory Committee recognized that. There appear to be very specific funding difficulties with many of the 1890 colleges. I just simply note without more editorial comment that I appreciate your itemizing those as completely and thoughtfully as you have because that will be helpful to us. Mr. Phills. Thank you, Mr. Chairman. We just want to be a full partner. The Chairman. You have noted historically that the 1862 Morrell Act got off on a different basis than the 1890 Act. This doesn't necessarily bring about a whole set of inequalities forever, but there are differences in the basis here. We need to be cognizant of that. Mr. Phills. Yes. The Chairman. Dr. Chicoine, the 1998 Agriculture Research Bill tried to implement a process to solicit input from those who use agricultural research. I just wondered, can you give at least some anecdotal or more systematic evidence as to how that has proceeded in the colleges of which you have some knowledge? Mr. Chicoine. Well, at least the institutions that I have more knowledge of than others, in fact there is has been a concerted effort to reach out again aggressively not only to the organized structure within the food and agriculture sector which are commodity groups and farm organizations, but as well into the community-based systems we serve through our extension programs. In our own State of Illinois, there has been substantial restructuring of the relationship that we have with our customer base, our stakeholders, if you will. They have formed coalitions that we interact with on a routine and frequent basis that gets beyond the sort of the typical advisory committee meetings that typically take place. I know others across the country are changing their relationships with the people that they work with in similar ways. The Chairman. You described those meetings more graphically. Are they out in the field? Who are the people who show up for meetings and interacting with professors such as yourself and researchers? Mr. Chicoine. Literally, all of the above. Essentially, they include both on-campus experiences so that in fact we can help people understand what it means to do research, both the sort of basic research, but yet research that is applied to target specific problems. In our case, we actually have a working group structure, five working groups that are focused on particular goals that we work toward helping achieve. There are some 60 people that are involved in each of the working groups. They meet quarterly and interact about the activities that are underway, assessing how well we are progressing in those activities as well as talking about the big picture. It is really important when we think about research and education, the understanding of the particulars that are going on in any particular project are key, but also having guidance that is in fact more strategic and global is really important for us as we think about the challenges we face and can address those challenges with research and education. The Chairman. Are any of these meetings covered by local press? In other words, is there some greater broadcast of this important dialogue and of research generally? Do local people find it to be helpful? Mr. Chicoine. Well, there is really interest in having people communicate with the press about what is going on because in fact the press likes to have the localized version of what might take place within the context of a land grant university's program. Individuals that are involved in these working groups are very active in communicating in a broad sense within their own organization as well as through the media, about what is taking place and the confidence that they have from the interaction about the progress that we are making with them in addressing some of the issues through research and education. The Chairman. Dr. Lechtenberg, you have complimented, and I think appropriately, the members of the Advisory Commission that you have chaired. As you have mentioned, I had the privilege of meeting with them just a short time ago, again, as they came to some conclusions, at least, as we approach the Farm bill. Should we have a similar mandate in the next Farm bill, that is, to set up such a commission. As we head down the road again, we ought to have a broadly based group of leaders in agriculture throughout the country, very diverse constituencies sort of discussing this all the way along and then helping us as we come along in the research part of it. We had another group that took a look at the Farm bill as a whole and we have had testimony from them in a public meeting of the committee. But in this research effort, can you offer some advice, and if not today, will you subsequently, as to how we ought to approach some thoughts about the Research Advisory Group? Dr. Lechtenberg. Let me offer a couple and then follow-up with maybe some more thoughtful comments. One of the important elements, I think, and one of the important features that the 1996 and modifications in 1998, those two bills, started down a path that is important is in terms of stakeholder engagement and involvement. We have had on the Advisory Board a National Stakeholder Symposium each year after the organizational year of the Board and we have used input from folks around the country to help focus recommendations on what we thought to be some key areas. Equally important, in my view, we have regional sessions. We have had subgroups of the Board meet in each region of the country about once a year and try to get outside this area and bring in some thoughts from folks in some focused areas. That is one of the things that I would suggest to the committee that is vitally important, to maintain some high level of pressure for the stakeholder engagement. As I mentioned in my testimony, I believe there are two and the Board believes there are two really important elements of research review. One is the scientific quality which peer scientists are perhaps best qualified to provide. Equally important, and perhaps more important, we are making sure that the efforts in which we are engaged focus on real issues to the food, agriculture, and natural resource system. Stakeholder engagement is critical to achieving that. I am particularly pleased as I think about and look at the way the National CFAR group is beginning to come together and be organized that it is not just an advocacy group for the funding, but it is going to be a strong stakeholder input organization as well and help provide some of the direction for priority setting that is important. I think that is probably the most important issue that I would flag to the committee's attention, but I will give a little more thought to your question and followup. The Chairman. Stimulated by this invitation, perhaps your colleagues can pitch in and help you. We appreciate very much each of you coming this morning and offering your testimony. I think we have had a good hearing with regard to research. Again, it is the beginning of our consideration of that chapter. I would invite all of you and those who have testified before, as you have second and third thoughts, to help us, because we have time to try to do a quality job in this very vital area. Having said that, the hearing is adjourned. 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