The next farm bill should create the equivalent of a crop insurance program for poultry producers, Agriculture Secretary Tom Vilsack said today at a House Agriculture Committee oversight hearing that covered a wide range of topics.

Oversight hearings are often held shortly before a long congressional break so that committee members have a chance to personally ask the secretary questions. The House is scheduled to go into recess July 31 through Labor Day.

Tom Vilsack
House Agriculture Committee Chairman Michael Conaway, R-Texas, noted in an opening statement that the committee today would examine USDA “through the lens of waste, fraud and abuse as identified by the department’s inspector general, Phyllis Fong, and the Government Accountability Office (GAO), Congress’ external audit organization.”

Conaway praised Fong, saying that since she took over in 2002, her office has conducted hundreds of audits, and that her investigations of the Supplemental Nutrition Assistance Program, better known as SNAP or food stamps, “ensure that those engaged in fraud do not prey on our most vulnerable.”

The hearing, Conaway noted, would examine the Farm Service Agency’s (FSA) MIDAS information technology or IT program and the Office of Advocacy and Outreach’s (OAO) grants and cooperative agreements awarded in 2010 and 2011, each of which had been the subject of investigations.

Vilsack had been informed that the committee would focus on these programs. In an opening statement, he provided an overview of USDA’s wide range of programs and noted that he had relied on IG and GAO reports to improve MIDAS and had asked the IG to investigate the Office of Advocacy and Outreach.

But Vilsack did not deliver his opening statement, saying that he would prefer to leave the time to provide longer answers to members.

House Agriculture Committee ranking member Collin Peterson, D-Minn., noted in his opening statement that, while oversight is important, “I wouldn’t be surprised if members used this opportunity to address other issues that may be happening in their districts. Avian flu, for example, has impacted many of my poultry producers and others across the region. I’ve appreciated the department’s efforts thus far, but am looking forward to an update on future plans if another outbreak occurs this fall.”

Conaway questioned Vilsack about the computers and Office of Advocacy and Outreach, but Peterson and other members focused mostly on other matters.

Avian influenza

Many members asked Vilsack questions about avian influenza, which has devastated Midwestern poultry operations. The disease spreads more in cold weather, and there are fears it will spread to the Northeast and the South this fall.

In answer to a question from Rep. Austin Scott, R-Ga., Vilsack said that he believed the 2014 farm bill did not include a poultry insurance program because of concerns about costs, but “I urge” it to be included in the next farm bill.

Sen. Al Franken, D-Minn., said in a news release that he was pleased to hear that Vilsack was calling for an insurance program and noted that he and the rest of the Minnesota congressional delegation have urged Vilsack to expedite a study of the feasibility of the insurance program.

Vilsack will speak at an industry conference on avian influenza Tuesday in Des Moines, a spokeswoman said. (See following story.)

Peterson thanked Vilsack for the department’s efforts on avian influenza and praised the work of John Clifford, USDA’s chief veterinarian.

But Peterson said that his constituents are concerned about “inconsistencies” in payments for birds that have come down with low-path avian influenza versus high-path flu, and Vilsack said USDA is looking into how to deal with that difference.

Vilsack also said USDA wants to be in a better position to address the problem this fall, when the flu is expected to show up again. Vilsack said that the Animal and Plant Health Inspection Service, which deals with the avian influenza problem, has 8,000 fewer employees because of budget cuts and had to hire 3,200 temporary employees to deal with the crisis. APHIS has a plan to deal with 500 outbreaks, which is viewed as the worst scenario, he said.

In response to a question from Rep. David Scott, D-Ga., about what USDA is doing to prevent avian influenza from moving to the South, Vilsack also said that USDA is working on a vaccine and plans to stockpile it and work with trading partners to try to convince them to continue poultry imports from the United States if a vaccine is used.

USDA has paid out more than $500 million to growers, indemnifying them for their losses and to pay for cleanup and inspection of facilities before they can be reopened. USDA is also working on tighter biosecurity protocols for the future, Vilsack said.

An earlier version of the vaccine was effective in only 60 percent of birds, but a newer version is closer to the 100 percent needed for it to be adopted.

Rep. Steve King, R-Iowa, asked whether the latest vaccine has been developed by an Iowa firm. Vilsack said it had been developed by USDA’s own researchers, but that if adopted it would be sold by a commercial firm. King said there should be an open competition for the potential providers.

At the end of the hearing, Peterson praised Vilsack for “his forthright answers.”

“We went through some of the toughest times we have ever seen with this avian influenza situation,” Peterson said. Growers were “down at the mouth” about their situation, he said, but at a meeting last Saturday their attitudes had changed.

MIDAS and other FSA issues, beginning farmers

In his opening statement, Conaway noted that the FSA’s MIDAS IT program was supposed to modernize its delivery of programs to farmers and ranchers, but that it was $140 million over budget and contained only two of the five planned core functions on July 23, 2014, when Vilsack signed a memorandum ceasing further development.

“IT program management across government has been deemed a high-risk area by the GAO,” Conaway said. “The committee expects to see the Agriculture Department implement the identified best practices and hold the responsible parties accountable. This committee will continue to monitor the work of both the USDA Chief Information Officer’s office as well as FSA’s CIO.”

Under questioning, Vilsack said that the problems with MIDAS began because USDA did not have enough “eyes and hands” overseeing the process and because there were different visions in Kansas City, where some of the work would be done, and in Washington.

There are some benefits from MIDAS, Vilsack said, because a farmer can now walk into any FSA office and see all the records of his operations no matter what county he or she is in, because the computer system has better “integrity” and because FSA is now working with the Natural Resources Conservation Service on that agency’s “Gateway” process.

The old computer systems are not gone, Vilsack said, but the systems have been “meshed and merged” and “patched” to develop a system with one vision.

Vilsack said he now gets biweekly reports on the development of the system.

Peterson noted that when he was chairman, he had meetings with USDA’s computer staff and that he thought “they were on track, but there was uneven funding.”

Vilsack declined to take the offer to blame the ups and downs of the appropriations process.

“I was reading the good book,” Vilsack said. “In Proverbs, it says a wise man measures his steps and has many counselors. We didn’t measure our steps or have enough counselors.”

In response to a question from Rep. Ted Yoho, R-Fla., Vilsack also noted that there are 2,100 FSA offices “and people in those offices were comfortable with one system. It was not well thought out.”

In response to a question from Rep. Rodney Davis, R-Ill., Vilsack noted that when he became secretary and wanted to send a note of introduction to all USDA employees, he was told he would have to send 17 messages because there were 17 email systems. Now, Vilsack said, USDA has one email system.

In response to a question from Rep. Mike Rogers, R-Ala., Vilsack noted that there were chief information officers in individual agencies at USDA and that they did not have to report to an overall chief information officer. Now, he said, the information officers have been ordered to check first with other information officers within their mission areas and then with other mission areas to see if money can be saved by buying in bulk.

Rogers said the same problems have occurred at the Homeland Security Department.

In response to a question from Rep. Frank Lucas, R-Okla., former committee chairman, Vilsack said he has rolled out slowly the Acreage and Crop Reporting Streamlining Initiative (ACRSI), which is supposed to make farmer reporting to FSA and the Risk Management Agency simpler, because of the glitches in the implementation of MIDAS.

Vilsack said he started ACRSI in Illinois and Iowa because corn and soybeans are such an important part of the U.S. crop, but that he meant “no disrespect to the folks in Oklahoma.”

Vilsack also promised Lucas he would provide him a written account of how USDA has spent $100 million in funds included to implement the farm bill.

Lucas told Vilsack he believed that farmers who plant cover crops are being “penalized” because they are not included in base acres. Vilsack said he does not believe the 2014 farm bill gives USDA the authority to declare cover crops to be base acres, but said he would ask his legal staff to look at the matter again.

Vilsack told Rep. Mike Bost, R-Ill., that he is conducting pilot projects on whether FSA offices could be used to inform farmers about other farm programs. “This would allow them to maintain their legitimacy and their relevance,” Vilsack said.

Vilsack also noted that there are 31 FSA offices with no full-time employee, but he can’t close them because Congress has forbidden it. Congress tells him to run USDA like a business, he said, asking, “Is that operating it like a business?”

Rep. Ralph Abraham, R-La., said that his rice farmers are having a problem over the way that generic base acres and cotton acres are considered for farm payment purposes, and Vilsack promised to get back to him on that issue.

In response to a question from Rep. Glenn Thompson, R-Pa., Vilsack said that letters will be sent to the approximately 10,000 farmers who have not filed conservation compliance plans and would be subject to penalties when participating in crop insurance this fall. Vilsack noted that more than 98 percent of the farmers expected to participate have submitted letters and that he thinks a lot of those who have not complied are no longer in farming. But Thompson said he is still worried some farmers may get surprises this fall. Vilsack noted that the date for compliance was set in law.

In response to a question from Rep. Rick Crawford, R-Ala., about actively engaged rules, Vilsack said Congress “made sure we walked down a fairly narrow lane.” The rules do allow farms to apply for an additional manager, but the total number cannot be more than three, Vilsack said.

The Inspector General also said that USDA leaders should provide more oversight of the Beginning Farmers and Ranchers program, but Reps. Ann Kuster, D-N.H.; Gwen Graham, D-Fla.; and Michelle Lujan Grisham, D-N.M., all said that continuing the program is very important. Vilsack said USDA is working particularly hard to inform people in the military about the program before they leave the service.

Clean Water Rule

Several members asked Vilsack what would happen under the proposed Clean Water Rule, previously known as the Waters of the United States Rule, if USDA’s Natural Resources Conservation Service declared a piece of land to be a wetland but the Environmental Protection Agency and the U.S. Army Corps of Engineers, which are in charge of the rule, had not declared the land to be a wetland. Vilsack said he could not answer and believes that the issue might take both the political process and a judge to figure out.

1890s schools and their graduates

Rep. Marcia Fudge, D-Ohio, noted that last week, when historically black colleges and universities celebrated the 125th anniversary of the Second Morrill Act that established them, the presidents of those colleges remarked at a hearing that 61 percent of those schools have lost a total of $57 million because the states are not providing matching funds required under the law. Vilsack said that USDA is in the process of notifying those schools that the matching funds can come from “other sources” as well as the states, and that under certain circumstances USDA can grant waivers.

Vilsack also noted that agribusinesses have told USDA that they want to diversify their workforces, and that he has asked Agriculture Deputy Secretary Krysta Harden to set up job fairs for the agribusinesses and the graduates of the 1890s schools.

Strike Force Initiative problems

Conaway noted in his opening statement that from 2010 to 2011, the Office of Advocacy and Outreach, under the direction of then-Assistant Secretary for Administration Pearlie Reed, awarded approximately $40 million in grants and cooperative agreements non-competitively under the Strike Force program, which is supposed to address problems in communities experiencing chronic poverty.

Conaway said the inspector general “recommended that those responsible for these awards be held accountable” and that he wanted to know how that recommendation was “executed.”

Vilsack said he became aware of the problems in the Office of Advocacy and Outreach through a hotline tip and that he asked the IG to investigate the situation.

The IG produced a “fast” report, Vilsack said, and when he shared it with Reed and indicated he was disappointed in his performance, Reed left the department. The IG's recommendation on prosecution was forwarded to the Justice Department, Vilsack said, but Justice referred the matter to its Arkansas office, which declined to prosecute. After that decision, Vilsack said, USDA could not take further action due to the federal code of regulations.

A total of $233,000 has been recovered from a contractor, Vilsack said, and the department is trying to convince the contractor to repay another $67,000.

The system for reviewing programs in Strike Force has been completely changed since the problems were found, Vilsack said.

At the end of the hearing, Conaway told Vilsack that oversight is not a pleasant task, but Congress has to do it.

“I was hoping we would not make you so mad that you would bail out on us,” Conaway said.

• Vilsack's testimony to Agriculture Committee

Office of Inspector General reports:

– MIDAS
– Beginning Farmers and Ranchers Programs
– Section 2501 Grants Awarded
– USDA StrikeForce Initiative
– Controls Over the Grant Management Process of the Office of Advocacy and Outreach
– Controls over the Grant Management Process of the Office of Advocacy and Outreach - Section 2501 Program Grantee Selection for Fiscal Year 2012