Civil Rights Legislation and Other Issues

SPEAKERS       CONTENTS       INSERTS

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CIVIL RIGHTS LEGISLATION AND OTHER ISSUES

THURSDAY, OCTOBER 23, 1997
House of Representatives,
Committee on Agriculture,
Washington, DC.
    The committee met, pursuant to notice, at 9:37 a.m., in room 1300, Longworth House Office Building, Hon. Robert F. (Bob) Smith (chairman of the committee) presiding.
    Present: Representatives Combest, Barrett, Boehner, Ewing, Goodlatte, Pombo, Canady, Lucas, Lewis, Bryant, LaHood, Emerson, Moran, Blunt, Pickering, Thune, Jenkins, Cooksey, Stenholm, Peterson, Dooley, Clayton, Minge, Hilliard, Pomeroy, Holden, Bishop, Thompson, Farr, Baldacci, Berry, Goode, McIntyre, Stabenow, Etheridge, Johnson, and Boswell.
    Also present: Representative Scott.
    Staff present: Paul Unger, majority staff director; Bill O'Conner, policy director; John E. Hogan, chief counsel; Pete Thomson, Dave Ebersole, Kevin Kramp, Callista Bisek, Wanda Worsham, clerk; Anne Simmons, and Russell Middleton.
OPENING STATEMENT OF HON. ROBERT F. (BOB) SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON
    The CHAIRMAN. Good morning, everyone will come to order please. Because many members are interested in discussing these issues with the Secretary, we will forego opening statements. We will accept any statements, of course, for the record.
    [The prepared statements of Mr. Stenholm and Mrs. Clayton, and the texts of H.R. 2185 and H.R. 2692 follow:]
STATEMENT OF HON. CHARLES W. STENHOLM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

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    Mr. Chairman, thank you for holding this hearing, the third in a series of hearings on issues involving equitable treatment of program participants and employees at the Department of Agriculture.
    We have previously looked into the issue of discrimination, and have had the opportunity to review Secretary Glickman's Civil Rights Action Team Report. I am pleased that we will now have a chance to discuss potential solutions to the problems which have been brought to light.
    This will be a good opportunity to begin reviewing H.R. 2185, legislation introduced by Representative Clayton, as well as H.R. 2692, introduced by Chairman Smith. The issues being raised by these two pieces of legislation are worthy of thorough and thoughtful discussion, and I am looking forward to the dialogue which will take place today.
    The Secretary is also working on issues such as administrative convergence and the future of small and limited resource farmers and ranchers. I hope we will have the opportunity to address these issues in the next session. Since it appears we will not have time to finish the discussion on these or the civil rights issues this year, I am hopeful we can make a diligent effort next spring to substantively address these areas of concern with further hearings and legislative action where necessary.
    "The Official Committee record contains additional material here."

    The CHAIRMAN. We're delighted and privileged again to have the Secretary of Agriculture with us who was a long time member of this committee and who now will offer a statement on one of the most important issues we have facing agriculture in this country today, I believe. So, Mr. Secretary, thank you for coming and we are happy to hear from you now.
STATEMENT OF HON. DAN GLICKMAN, SECRETARY OF AGRICULTURE

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    Secretary GLICKMAN. Thank you, Mr. Chairman, Mr. Stenholm, and members of the committee. It's, as always, an honor to be back here. I'm here accompanied by Deputy Secretary Rominger and Pearlie Reed, Assistant Secretary for Administration; our Acting General Counsel is Bonnie Luken, Lloyd Wright, head of our civil rights division; Steve Dewhurst, our budget director at the Department. So, we have a pretty good crew here to answer any and all questions that you would want and that reflects the importance of the subject matter.
    Let me, first of all, say I appreciate, Mr. Chairman and Mr. Stenholm, your personal support for the issue of civil rights of the Department of Agriculture and the scenario that's certainly been an extremely contentious one and a highly important one. I think it is extremely critical and important that your committee has taken the leadership issue in Congress on reviewing the matter.
    What I'd like to do is briefly review what we've been up to at USDA since I last appeared at the committee and then I'd like to shift gears and talk about what we need from a legislative solution to complete our work and then maybe make some comments on Mrs. Clayton's bill, as well as your proposal which I understand was dropped in yesterday or today.
    Since the release of our civil rights report, a lot has changed at USDA. Let me give you just two examples. Six months ago, most State farm service agency committees were not very representative of all the people in their State. Today, after working with the strong support and active involvement of Members of Congress, because Members of Congress obviously have a key role in who is on state committees, I would tell you that we have more women and more minorities sitting on these state committees, State farm service committees, than ever before—making that grassroots connection to Federal programs even stronger. As you know, my ability to appoint is limited to membership on State and not county committees under current law, but I would have to say that working with Members of Congress and Members of the Senate, we have made some augmentations in the diversity of membership on state committees in the United States.

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We are also making real headway in resolving the backlog of complaints, but this is an issue that, quite honestly, continues to plague us as well. We've closed the book on 71 program discrimination complaints, including settlement of 10 long outstanding cases, for a total of 118 cases closed counting back to January. We've resolved some 457 employment discrimination complaints this year, since the first of the year. But we have a long way to go and I'll talk more about that in a moment. But underneath the backlog, and I think we've got to get beyond the question of actual numbers for a moment, the question is are we getting at the root problems and I think we are. We are hiring back a team of civil rights investigators that was disbanded in the 1980s, leaving hundreds of cases in limbo. Now we can move forward with the investigations that are necessary to handle cases responsibly—dismissing those without merit, settling those where settlements are just. We also now have alternative mediation to help us keep the process moving forward at a humane clip and we've installed a reliable tracking system. Today, if you call us and want to know the status of your complaint, in most cases, you can get an answer that same day.
These are big changes that are having a dramatic effect on our civil rights effort. In some ways, we may be the victims of our own success. You may remember that when I formed the Civil Rights Action Team, I also asked our Inspector General, Mr. Viadaro, to look into the situation. There latest report to me showed that the backlog of program discrimination complaints has actually gone up substantially. Much of that is the residual effect of the old system. What happened was during our civil rights listening sessions we had all over the country, farmers would stand up and tell their stories. Then they'd say that they filed a complaint years ago and never heard a thing. I'd ask for their names and numbers. I'd get the right people on it. They'd punch the names into the system, nothing came back. So we sent the word out to all the agencies, across the country and here at headquarters, box up your complaints, send them in. Then, we physically sifted through all the files and found 282 additional complaints.

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    So, let me be clear: as of April 1, we had a total backlog of 822 program discrimination complaints. Since then we've gotten 196 new complaints. Some of them involve recent events, others involve alleged discrimination that occurred as far back as 10 years ago. Let me emphasize that point: Even though these cases, some of them, are newly filed, many involve discrimination that was alleged to have occurred years in the past. I think what we are seeing here is a lot of folks who kept quiet over the years because they thought they'd be fighting a losing battle and now they're stepping forward encouraged by our focus on civil rights, believing that their case may now get a fair hearing.
    That's just one more way we can tell that the climate is changing. As I've said before, there's no one silver-bullet solution to our civil rights challenges. If we are serious about institutionalizing change, then it's simply going to take a whole lot of work, a whole lot of people doing a whole lot of work.
    In the last 6 months, we've done a lot of things. One is we are holding employees, up and down our ranks, personally accountable for treating every customer and coworker fairly and equitably, with dignity and respect; we've instituted a zero-tolerance reprisal policy to protect workers who stand up for their rights; we are changing our foreclosure and lending policies to root out discrimination; we are wading through the backlog in complaints, settling proven cases of wrongdoing, investigating and resolving others, and dismissing those without merit; we've reached out more to underserved populations; and we are hiring a full-time cadre of civil rights advocates for our legal team. USDA is well on its way to emerging, I believe, as a Federal civil rights leader.
    The bottom line is we have taken just about all the administrative actions we can to improve our civil rights record and we are in the process of implementing them under the leadership of Mr. Reed and others who are here. It's gotten us off to a good running start, but we haven't completed the course. We're facing a few legislative hurdles that will require a boost from this committee.

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    First, I want to thank Congresswoman Clayton for her almost daily involvement and personal commitment to our efforts and for offering to help bring about the legislative changes we need. Her bill, H.R. 2185, the USDA Accountability and Equity Act of 1997, is a strong step in the right directions. It includes many proposals we support. This committee has a detailed letter from my office going through each item in the legislation and I'll be glad to touch on a few of the major points. Mr. Chairman, I understand that your bill was introduced yesterday, and we haven't examined all of the specifics, so I can't comment on every item until we have a chance to do that. But I would have to say that based on our conversation today, our letter on Mrs. Clayton's bill, and the Civil Rights Action Team report, together with discussions we'll have in the next week or two on this issue, we will try to make our position abundantly clear so we can try to work a legislative solution to these problems.
    I would have to say that—just one comment—I understand that your bill suggests one fairly, what I call hefty, organizational change within the Department of Agriculture, and that is the combination of the Natural Resource Conservation Service and the Farm Service Agency. I would have to say, with greatest respect to my friend, the distinguished chairman from the great State of Oregon, one of the most beautiful places in the United States, I strongly——
    The CHAIRMAN. Continue, please. [Laughter.]
    Secretary GLICKMAN. I strongly feel that now is the time for us to complete the organizational changes we have underway and it is not the time to undo those changes. I agree that we need to be constantly searching for ways to make USDA more efficient and to better concentrate resources on program delivery. I would just say that we are already in the midst of some very dramatic changes to achieve those ends. Major downsizing—we are still putting in place the 1994 Reorganization Act which dramatically reduced and realigned the county field structure, saving millions of dollars and improving customer service. On top of that, we've added a fairly aggressive administrative convergence effort which—upon completion—will have cut by half our administrative support staff. Not program staff, but administrative support staff out in the field so that we can maximize the resources out on the front line serving farmers and all of our customers. At this stage, Mr. Chairman, I believe another layer of wrenching change would cause turmoil in the ranks at a time when what we really need is teamwork. Philosophically, I also believe that America's farmers and ranchers need a strong NRCS and a strong Farm Service Agency. They perform critical and unique functions which I don't think should be mashed together.

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We are moving forward with an independent study by an outside contractor of the county field structure. This study, which was actually requested originally by OMB, will assess the workload of the respective agencies in light of current and anticipated program changes and responsibilities as a result of the 1996 law. It will identify opportunities for efficiencies that consider our customers needs. We hope to provide you with recommendations for the future of the county delivery system by next fall. I believe that would be a more appropriate time to have a dialog about another major massive departmental reorganization. And if I may add, parenthetically, it's not in my statement, we've just been through, in 1996, the most time-consuming farm signup probably in the history of the country, in terms of numbers of farmers on the AMP to signup. Then we went through the 15th signup on the CRP, and we are going through the 16th signup right now as we speak. We have the best, without question, cooperation between NRCS and Farm Service Agency, between our natural resources and technical people and our program people, that we've probably ever had in the history of the Department. These people have done extraordinary work under both a changed farm bill as well as a changed conservation CRP program and now we have the EQIP program that's coming in very big. I think they need to have some time to work through the program areas, because I think that they're serving the customers pretty well out there and I'd hate to see that hit with another major change. I just mention that to you and I'll look forward to your dialog on that.
Let me just make a few other comments on the legislation of Congresswoman Clayton. We can, however, with respect to the county office issue—let me talk about that—make some commonsense refinements that do intersect with civil rights. The Clayton bill includes a provision to convert FSA county employees to Federal civil service status. This is a cornerstone of the Civil Rights Action Team report. I strongly support this conversion, I believe it would greatly improve our program delivery. It would simplify administration by erasing the current dual system that is cumbersome at best. I do know that some folks out in the countryside are nervous about what this means to them. I want to make it clear that this conversion must be done in a way that ensures employees retain their tenure status. I want this transition to proceed in as seamless a manner as possible so that our people can do their jobs. I look forward to working with you to ensure that the necessary legislation is fair and reasonable. The thirites, when the programs were set up, you had county office employees largely, and virtually no Federal employees whatsoever. Through the Farmers Home Administration, you began to develop Federal employees and now we have a system where we have both working in county offices. I do believe, from the standpoint of accountability, all employees ought to work under the same basic structural work rules and accountable to the Secretary.

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    The Farm Service Agency county committees have an excellent overall record of providing a grassroots basis for adapting Federal programs to local needs that should be continued. Both bills, your bill and Mrs. Clayton's bill, would strengthen their ability to serve all a counties customers by providing for the appointment of two diverse members who reflect that community when a committee has no diversity. I support ensuring the committees are representative and would appreciate the opportunity to work with you and Mrs. Clayton to refine this proposal.
    In the area of farm credit, we all know that there are a number of concerns with USDA's program delivery system when it comes to addressing the needs of minority farmers. They have had special difficulties in obtaining adequate credit on terms that suit their needs. USDA's farm credit programs are supposed to help family farmers overcome their difficulties, especially beginning farmers and farmers who need time—help—weathering times of financial stress. Unfortunately, USDA suffered substantial losses, well over $10 billion, because of lax lending policies in the seventies and eighties, and because of the economics of that time period, as well.
    Some of the reforms of the 1996 farm bill will fix those problems. Others are overly restrictive and need to be fixed themselves. These programs have been the subject of a number of discrimination complaints. That's why I put a halt to foreclosures when a discrimination complaint has been filed until the claim is resolved. I have also asked the National Commission on Small Farms, a group that I appointed about 3 months ago to address issues of credit when they give me recommendations for a national strategy on the small farm.
    The record shows that in recent years, only a small percentage of credit funds targeted to socially disadvantaged groups have gone unused. I think we can do better, I think we need more resources in that area, but it will take some help from Congress.
    We also need to admit that the 1996 farm bill went to far in making farmers who have had debt forgiveness in the past, ineligible for future loans. This is a tougher penalty than what's imposed by our bankruptcy courts and I think that's something that we should fix. The fact that somebody went through a restructuring back in the eighties because of, let's say, the economics of agriculture, and 10 years later, these people who are actually productive farmers cannot get farm loans from the Government because they had one strike and their out, that is wrong. Banks don't impose that kind of requirement. No other lending agency imposes that kind of requirement. I think that needs to be fixed.

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    I think when it comes to agriculture, Government credit policies must include the concept of redemption. I think we can do it in a way that's fair to taxpayers and to farmers. I would also say that we need to work closely together to ensure that any changes we make in the credit area not weaken the financial integrity of our credit programs. Such as, we expressed some concern about allowing new loans to be made to borrowers who are currently delinquent.
    So, these are things that I think we can work on together that we can get a solution to.
    I would also like to briefly discuss the audit report issued by our OIG, the Office of Inspector General, concerning minority participation in FSA's farm loan programs. This report brought to my attention many important issues. I believe you have a copy of the report. In response, I've asked Mr. Pearlie Reed, our Acting Assistant Secretary of Administration, to change our procedures and require that all investigations be done by the Office of Civil Rights instead of by the agencies involved. That was a key recommendation, Mr. Viadaro, we believe he is correct.
    On another monetary matter, I would like to note that a number of provisions in the Clayton bill would allow certain programs that are currently supported through appropriations to be funded as mandatory programs. This would obviously require us working together to identify offsets from other areas to avoid increasing the deficit under PAYGO scoring. We look forward to working with you on that.
    The Clayton bill would also modify administration and funding of the EQIP program, the Environmental Quality Incentives Program. I support efforts to ensure that eligible members of socially disadvantaged groups receive funding under this program. I support increased funding for EQIP, but I suspect this increase would also require offsets that we would have to find.

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    The same is true for several provisions affecting the funding and administration of our research, education and extension activities. I believe that these issues are better addressed in the context of our reauthorization of our research title. But again, I want to note that the mandatory funding provisions will require offsets. I might also add, parenthetically, that I think one of the things the committee ought to look at is to ensure some reasonable degree of equity or parity in the funding formulas for the 1890's and 1860's land grant schools. It's clear that the, not that every school deserves the same level of funding, because the schools are larger and different, but we ought to do our best to make sure that there is a reasonable parity in the concept of how much money, relative money, schools get under those particular programs, as well. We look forward to working with you on that.
    In closing, I want to thank this committee, as I said before the last time, your committee is the first one to ever hold hearings on these issues. I think we've made good progress in the last 6 months. It is slow in some areas, particularly in the resolution of complaints, but this is a problem that's been undergoing for a very long time. We stand ready to work closely with you to achieve continued success.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Glickman appears at the conclusion of the hearing.]
    The CHAIRMAN. I thank you, Mr. Secretary. Do either of the other gentlemen wish to make a comment at this point?
    Mr. REED. I do not.
    Mr. ROMINGER. No.
    The CHAIRMAN. Thank you. Well thank you, Mr. Secretary, for a brief, but I think interesting outline of what is occurring and what must be done. I worry that since this indeed is the first effort by this committee to look at a grievous problem in this country that we don't break down to the point that we accomplish nothing from these hearings and this effort. I'm very interested in pursing especially the question of how best to provide your office with information about what's occurring in the country without overriding the heavy hand of the Federal Government on the committee system throughout the country. That's my interest. In that pursuit, I wanted to ask you, tell me, if you can, the opportunities that people have if they feel discriminated against, what opportunities do they have in this Government to appeal to besides the Department of Agriculture?

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    Secretary GLICKMAN. Well, of course people can file complaints with the Equal Employment Opportunity Commission if it's a employment matter. They do have opportunities to go into Federal court directly. There are, I think, other statutes that may be involved in which you can seek remedies, credit statutes that may or may not be within the operations of USDA. I'm not, perhaps our general counsel might know, if there are other opportunities. Yes, most of the opportunity would be equal credit opportunity cases that would probably come through USDA in these matters, I would say.
    The CHAIRMAN. So, I suppose it'd be fair to say that some of these people really don't know or didn't have the opportunity or didn't realize the opportunities they've had in the past and still have to appeal some of these problems. Is that fair to say?
    Secretary GLICKMAN. That's correct and I'd say several things. Probably the remedies were not clearly understood. It may have been that, in certain cases, our employees or our offices, didn't help people in terms of the engagement process. There are probably a lot of different reasons. A lot of these cases could have been probably resolved before you even get to a conflict stage by working with borrowers on a more technical consultative conciliatory arrangement. You know, I'm not telling every one of these cases is a legitimate case; they're not. But what we are trying to do is to make sure that people know what their rights are under the existing law a lot more carefully than they've done in the past.
    The CHAIRMAN. Yes, so I guess the question is, in your opinion, do we have enough appeal procedures in the law already to satisfy those people who have legitimate concerns?
    Secretary GLICKMAN. I think so. I think we have to have the operational staffing within USDA to handle the complaints, however.
    The CHAIRMAN. OK, all right. I want to get by that issue and then to the next and simply that——

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    Secretary GLICKMAN. And outreach. We have to do our job in terms of communication, yes.
    The CHAIRMAN. And that was my next point. Whether it's Mrs. Clayton's decision in her bill or my suggestion, both of them place people on committees that represent the Secretary of Agriculture which will give us the outreach in either case. Do you agree?
    Secretary GLICKMAN. Well, yes, there are differences in how you would place the people on committees and what their roles would probably be.
    The CHAIRMAN. I understand.
    Secretary GLICKMAN. But the idea of making county committees representative is, I think, the critical core of what the Civil Rights Action Team report presented to us.
    The CHAIRMAN. Well, making and encouraging are two quite different things.
    Secretary GLICKMAN. Yes.
    The CHAIRMAN. My time is expired. Mr. Stenholm.
    Mr. STENHOLM. Mr. Secretary, what has been the experience since January 1, 1995, regarding new complaints of discrimination at USDA offices?
    Secretary GLICKMAN. In 1995 or 1997?
    Mr. STENHOLM. 1995.
    Secretary GLICKMAN. 1995.
    Mr. STENHOLM. This is when we really started to begin to focus, maybe 1996 is the year I'm looking for.
    Secretary GLICKMAN. Actually the——
    Mr. STENHOLM. You made the statement that we are seeking improvements, that things are headed in the right direction. I wondered if you could elaborate on that?

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    Secretary GLICKMAN. I'd say, in all honesty, I'd probably, the real focus began in the winter of 1996. Because that's when I created the Civil Rights Action Team. That's when some of the farmers came and brought to the attention of some of the farm loan issues, there were some demonstrations here and it highlighted the issue. So, as I said, since that time while we have settled which is January 1 of 1997, that's why I think that date is probably a more realistic date. We've resolved about—the testimony was—we resolved 457 employment discrimination cases and 118 cases, program cases, in a variety of different ways.
    Mr. STENHOLM. You said some of the new complaints, involve recent events.
    Secretary GLICKMAN. Yes.
    Mr. STENHOLM. Can you quantify the recent events?
    Secretary GLICKMAN. I would say that those would be part of the normal process. People didn't get their loans; I don't have that, we are going to get the committee that more specific data. We're going to get a normal number of complaints, no matter what. So, there have been some additional complaints filed representing, but a big chunk of those are for old fact patterns, not new fact patterns. That's what I can't tell you right now, specifically, how many of these are things that happened. Somebody got discriminated in 1997, versus somebody who said, ''Aha, the Department is now ready to listen to us and we are going to tell them what happened in 1993 or 1994 right now.'' That's what I can't tell you. There's some of both though.
    Mr. STENHOLM. All right, let's look forward a moment. Let's suppose we were to federalize county office employees. In order to ensure local input in the operation of USDA programs, what steps would be necessary to federalize elected county committee members?
    Secretary GLICKMAN. Well, you wouldn't have to federalize the county committee members. I suppose you could. I think the main thing that we want to make sure is where we end up within this process is that we want to make sure that the employees of the Department of Agriculture work in a scheme where all employees are basically treated the same way, subject to the same rules, subject to the same systems of accountability, so you don't have mixed employees within county offices so that everybody knows their subject to similar personnel rules, procurement rules and civil rights rules.

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    Mr. STENHOLM. But what do you do where there is also a keen interest in making sure that we maintain some local input, some local control within the confines of a Federal supervisory role.
    Secretary GLICKMAN. Well, we still strongly believe that the county committee system is extremely important and you would still have a farmer-elected county committee system. I agree with you. I think that's a critical part of the process. We have not recommended that farmer-elected county committee process be ''federalized'' as well. That's not in the Clayton bill and that is not one that we have recommended, but I haven't really thought through, but let me just say this. The purpose of the county committee are many fold. One of course, is to hire the staff under current proposals. The other is to carry out the policies of the administration, in terms of implementation and operation of the basic programs, and we'd see that continuing.
    Mr. STENHOLM. I ask this question for your thought and that of others. One of the controversies and one of the reasons why the 1994 Reorganization Act has not fully worked as was intended is the division of opinion regarding whether Federal employees can be supervised by non-Federal employees. That's a fundamental question and we will hear again today witnesses testifying is that is not acceptable. If that is not acceptable, then as we pursue either Mrs. Clayton's approach or the chairman's approach, we are going to have to resolve that. My personal opinion is, it should be acceptable. If it's not, then let's make the changes to where we can clearly have both the Federal response and the Federal responsibility of oversight, but also maintain the local control that gets lost in the shuffle when we run things from Washington.
    Secretary GLICKMAN. I think, as a matter of principle, we agree with you. I don't want to tell you that we necessarily support the federalizing of county committees right now.

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    Mr. STENHOLM. I understand.
    Secretary GLICKMAN. But, conceptualize the idea of preserving local control, particularly, the implementation of policies, that's critical to the system. It's one of unique things how agriculture programs have worked. We just want to make sure we restore accountability through that process and the things that I just mentioned.
    Mr. STENHOLM. Thank you.
    The CHAIRMAN. Thank you. Mr. Combest.
    Mr. COMBEST. Thank you, Mr. Chairman.
    Mr. Secretary, I think that everyone agrees conceptually with the basic reason for this hearing and discussion today. From a personal standpoint, I would want to make certain that we don't, in order to try to deal with an existing problem, go well beyond where we need to go. I think it's important for us to identify, as was the chairman's questions earlier, as they related to what remedies are, in fact, in place today for an individual to pursue when they feel that there is a discrimination, credit or whatever the case may be, and whether or not those are inadequate or whether or not they may be adequate, just is a lack of information. But to make a dramatic change in the structure of county committees, such as having the secretary appoint voting members to a committee, I would have to be convinced a lot more so than I am today that there's something broken that would fix. I don't know that would fix it. I think that takes away from the structure of what the county committee system was established to do and I am a strong believer in the effectiveness and efficiency and good operation of a county committee system; but I do think that, as you've indicated, ways to pursue whether it's informational or whether it's getting the word out, whatever the case may be, those are avenues that we should proceed to look carefully—at which to look carefully.
    You had mentioned the cooperation of NRCS and FSA in the current signup and the previous 15th signup on CRP, which are our most recent activity that I think has caused a lot of work in those offices and, for the most part, I would agree with that. Since you talked about the entire FSA operation I would be somewhat remiss if I didn't indicate, and I don't know this from the national level, but I know from a regional level, there is still a major problem existing in the offices of FSA between the credit and the program divisions and while there needs to be a lot of work done in that, we have talked with people who deal with farm credit in USDA and continuing to talk with them. It was a subject of the first hearing that the subcommittee that I chair held and it still remains to be a major problem. I think we may, as we get into the, what is considered the heavier credit season, recognize that still exists and want to continue to try to work with you and the Department on solving that problem.

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    I am concerned about the restructure of the way that a restructuring of loan has been viewed in terms of the ability of a farmer to get current credit. I do not believe that, when that restructuring provision was allowed several years ago, if they complied with that they should not be penalized today and in many cases, are. I do agree with the basic concept of making for certain that we are very diligent in collecting, but I don't believe that a restructure, a single restructure, should disqualify an individual and we would be very happy to deal—that is another subcommittee issue. In my subcommittee, we would be happy to work with the administration on working on language or whatever that we might to deal with our problem, because it is real and it exists; I think it's extremely unfair.
    Let me ask you from the county office structure. Having come from a county office many, many years ago. There's two concerns. There's one in, if in fact, you change the status of a county employee, and that is in their benefits and making for certain there is no loss or no gap there. I think that's all a personal situation and we recognize it exists and should deal with it. I don't believe that most farmers that come into that county office know who they work for or really care, but I am concerned about the impact, as Mr. Stenholm as discussing, the impact of the way that office operates, based upon that designation of one being county or one being a Federal employee and how that change, primarily it would be from county employee to Federal employee, might effect the office operation. I think that is where I have real concerns.
    Back to the ability of the county committee to operate. How do you see changing county employees to Federal employees changing the office operation as a farmer would know it today?
    Secretary GLICKMAN. It shouldn't change it very much. The idea is conceptually to get to a point, as Congressman Stenholm said, where, in a sense, the employees functions are interchangeable, in terms of that there status of being a Federal or county employee shouldn't affect their ability to, in fact, relate to the customer who's out there and now it does in some areas. To ensure that there is accountability so that all employees are comparably accountable up the line for their performance, how they treat their customers, you know, and then to look at this structure after the 1994 Reorganization Act in terms of how to make it more modern, make it more efficient as a result of the reorganization proposals. You know, I personally believe that federalizing the employees will do that as long as we, in fact, retain a strong policy role for the county committee. There may be other ways to skin that cat, but I have to tell you the main purpose driving this is accountability all the way up through the process; and you have more accountability now.

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    I'm going to go back for a moment. We looked at our state committee people in this country. There was very little diversity on state committees. There's some, but very modest. This scenario where I can have some impact in, working with Congressmen and Senators, I said now, look out there, you've got States out there that have a lot of Native-American farmers, a lot of women farmers, a lot of African-American farmers, a lot of Hispanic farmers. I said try to do your best, no quotas, no goals, try to do your best to make sure that you don't have five white males on every state committee in the United States and that's not necessarily the way it was, but there was a lot of patterns like that. So, what we talked to some of the Senators and Congressmen involved and there was dramatic progress made. People, finding those people where they could. Again, no quotas, no goals; do your best to make sure the folks making the decision from the top are somewhat representative of the place as a whole, and there have been fairly significant things. That 's the kind of, we want to try to see if we can get that accountability and if we can at the county committee level, as well. The people who are making those decisions being fairly representative of the folks who, you know, who are in their area and doing it in a way that preserves accountability for employees and allows them to be involved in the policy decisions that are made at the local level. I don't tell you that I have the only way to get this done. I think what we ought to be working for is a matter of our end goal here is to accomplish these objectives.

    Mr. COMBEST. Thank you, Mr. Secretary, Mr. Chairman.
    The CHAIRMAN. Thank you. Mrs. Clayton.
    Mrs. CLAYTON. Thank you, Mr. Chairman. Also, thank you, Mr. Chairman, for having the hearing and although both of us have bills, we want the same goal, we go at it a different way and you would not be surprised, I think my approach is perhaps the deliberate and considerate way.

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    Mr. Secretary, I also appreciate you giving us, I think, a candid reflection that as things get better sometimes you have to assess how bad things are. For that reason, I want to just give our colleagues some sense that this is not a minor, Mr. Combest appropriately said he's sympathetic to why this ought to happen, why we are having this hearing, but didn't want the solution to be beyond what was needed.
    Since 1965, there have been complaints about the discrimination for farm services and credit. Not just by Afro-Americans, but by minorities and farmers of small farms. This isn't a recent incident, these aren't a few people. You have just mentioned again you had 822, you now have 196. It has been a long time coming, and there are a lot of people who have been affected by that. You will hear about them later on. But, I didn't want my colleagues to get a sense that this is some minor issue that has just come on a wave that we are bringing before you. People have been losing their lands and losing the opportunities to farm and produce like other farmers simply because, apparently, there has been the unwillingness to make those loans and services indiscriminately.
    There are two things I want to have you to clarify. One, in response to Mr. Stenholm, you said—I think you said—that the county committees—correctly you said—county committees were not federalized, but I think you want to also say, although they're not federalized they are indeed subject to certain civil service regulations and the employees who are employed by those committees are subject to those civil service procedures. So there are some rules in place that may be Federal in nature. The inconsistency is what we are trying to get. We're trying to make sure that you don't have one set of rules for one set of people and one set of rules for another set of people. I just want to refer to section 101 of our bill and Iwant you to clarify, I may be under misconception.
    Secretary GLICKMAN. No, I agree with you. There are parallel sets of rules. They are not identical and their implementation and enforcement are sometimes inconsistent, but currently they operate under a set of rules that are substantially parallel.

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    Mrs. CLAYTON. Would you comment on if you think that the majority of the 1,000 now complaints would have had sufficient opportunity to know how to get their process, I mean, get their procedures and processes in place so their complaints could be heard without a civil rights division? The impression is that if we just knew what the procedures were or the process was, that all these farmers who had these complaints could have taken care of that. Why are we going through it if that was so easy?
    Secretary GLICKMAN. I would let Mr. Reed respond, but I would have to tell you that this is a multi-faceted problem, it's a complicated problem. You've got to have appropriate outreach, which is a complicated national type of operation whereby our offices do a much more effective job in working with and consulting with producers and letting them know what their responsibilities and rights are; that hasn't been the case in all circumstances. You've got to have a complaint handling process that is much more sophisticated than the one we've had over the last 20 or 25 years with an adequate number of people to actually respond to and act on these cases; justice delayed is justice denied. That is all part of the situation. You need an effective civil rights operation within our general counsel's office that is working aggressively and we are getting that up to speed right now. I mean, you know, this problem is as much a communications problem, but it does require some institutional changes internally, as well.
    Mrs. CLAYTON. Well, I'm going to ask if I may ask you to defer your answer, because I need one more and then my time is going to go. The reason I wanted you to comment on that because it seems as if this is something we could easily dismiss and say, ''Aw, a few cases.'' One thousand cases, none of these cases I'm sure since 1965, but this issue has been going on since 1965.
    Also, you've had—if I'm adding the figures up 1,018 cases. Can you tell me if these cases are coming through the county system?
    Secretary GLICKMAN. I'd ask Mr. Reed, I don't really know the answer to that.

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    Mr. REED. They're coming from a variety of sources, but we can provide for you a list of every case with an explanation for what the case is.
    Mrs. CLAYTON. The reason I had, because one of the parents will comment and you will not be here, Secretary, to say that the system is working. I just want to know if the system is working, pray tell, why do we continue to get these large number of complaints that farmers are having their loan discriminated, if the system is working?
    Secretary GLICKMAN. First of all, it's 118 new cases, not 1,018 new cases——
    Mrs. CLAYTON. No, it's 196 new cases you told me.
    Secretary GLICKMAN. I'm sorry, 196 new ones.
    Mrs. CLAYTON. One hundred ninety-six new ones.
    Secretary GLICKMAN. I'm sorry, OK, yes.
    Mrs. CLAYTON. And you had 822, that gives you 1,018, if I'm adding correctly.
    Secretary GLICKMAN. That's total cases.
    Mrs. CLAYTON. Total? Right.
    Secretary GLICKMAN. OK.
    Mrs. CLAYTON. If the system is working, why are we continuing getting these?
    Mr. REED. Mrs. Clayton, you're exactly right. From about 1983 until now, we did not have the appropriate system in place to provide the appropriate oversight. As a result of implementing the CRAT report, and there were two or three recommendations in the report that dealt specifically with this kind of problem, we have designed a system and is in the process of implementing it. So, I would say that, administratively, we are to a point now where we can address the concerns you just mentioned.

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    Mrs. CLAYTON. Mr. Chairman, my time is up. May I ask if I could enter into the record testimony of some persons who wanted to testify and couldn't have the opportunity: Ms. Visconti of New Jersey, Mr. Scrutchfield of Missouri, and Mr. David Harris of North Carolina. May I enter their testimony into the record, please?
    The CHAIRMAN. Without objection, so ordered.
    Mrs. CLAYTON. Thank you, sir.
    [The prepared statements of Ms. Visconti, and Messrs. Scrutchfield and Harris appear at the conclusion of the hearing.]
    The CHAIRMAN. Thank you. Mr. Barrett.
    Mr. BARRETT. Thank you, Mr. Chairman. Mr. Secretary, welcome back to your former home. I think you sense that you're always very, very welcome before this committee.
    In listening to your testimony, we continue to talk about reorganization, we talk about downsizing, and you specifically mention the wrenching pain, was the term you used, that has taken place, continues to take place. The teamwork that is necessary for all of us to complete the reorganization, the downsizing, et cetera. Well, my mind immediately goes back to the fact that we know that we are going to experience another downsizing in the very near future and I guess the question would go to when can we expect it and what would you expect that we could expect when that happens?
    Mr. ROMINGER. As a result of what it looks like we are going to get in the 1998 Appropriations bill, there will be a requirement for additional small number of reductions in employees in a number of our agencies, in RCS as well as the Farm Service Agency. So, the agencies are planning for that eventuality.
    Secretary GLICKMAN. I would say, Mr. Barrett, the underlying answer has to do with how much money's appropriated for the operations of respective mission areas in the Department. To a large extent, this item is almost exclusively based on the dollars in the S and E account, Salaries and Expenses Account, and if those numbers continue to go as they have in the past, there will be less options available to us.

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    Mr. BARRETT. And it as much as we're in the new—excuse me, Mr. Rominger go ahead.
    Mr. ROMINGER. I was just going to add, that that's the reason that we are going to this outside contractor to look at what is the workload of these agencies as a result of the changes made in the 1996 farm bill, so that we can have a better idea of whether we can provide the services, given the budgets that we are looking at.
    Secretary GLICKMAN. And I would add just a couple of things. There's a lot of work out there to be done. We have to do a good job of explaining to Congress, as well as OMB and other places, you know, what the functions are, what has to be done, because, you know, sometimes the racheting down can go down so far that it can make it difficult to get the services performed and that's one of the reasons why we have this study going on as what ought to be the functions in the light of changed circumstances so we know what the numbers ought to be.
    One other thing: We're working on something called administrative convergence now. For example, State—you have three, rural development, NRCS, FSA out there. Many of them have three procurement systems, three personnel systems, three automobile systems. You've all heard the story about the producer who goes into the county office and he finds three different Xerox machine repairers there, fixing three different Xerox machines; one belonging to NRCS, FSA, and rural development. Now, that may be a bit hyperbolic of a story, but it happens more than you think. So, one of our goals is to try to coordinate, in each State, the administrative functions in a way so that we can free up more program function funds out there. That's something that desperately needs to happen.
    Mr. BARRETT. Well, there's no question there's been a dramatic decline in budgets, but inasmuch as we are into the new fiscal year, is it fair to say that we may expect some action before the end of this calendar year?
    Mr. ROMINGER. Yes.

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    Mr. BARRETT. Thank you.
    Mr. ROMINGER. Yes, I think that's true, the agencies are planning to go forward with reductions in a number of people before the end of the year.
    Mr. BARRETT. Thank you. I certainly would support equal treatment for everyone, USDA or otherwise. But I also wonder why, at this point when there's so many other issues facing us, research, we've talked about it, Mr. Secretary, you know, fast track, we were together yesterday on that issue. Is this not something, 2185, Mrs. Clayton's bill and the chairman's bill, is not a lot of this can be handled administratively? You've already indicated the successes that you've had up to this point in administrative changes, or perhaps, I should say management. Can't a lot of this be handled internally?
    Secretary GLICKMAN. A lot of this can be and a lot of it has been. Mr. Reed may tell you a little bit about what has actually gone on administratively.
    Mr. BARRETT. In the short time I have left, would he do that, please?
    Secretary GLICKMAN. Yes. The one thing I would have to tell you, however, is that there are a couple areas we think need to be handled legislatively. We think that the harmonization of the county office system to make sure that all the employees are subject to the same accountabilities stream ought to be done. We also think this farm loan issue, the disqualification of people because they had a restructuring or consolidation 10 years ago and they're no longer qualified for loans, that's something that needs to be done legislatively. And there's several of those type of items that we think need to be done.
    Mr. BARRETT. I understand that. Mr. Reed?
    Mr. REED. To be brief, the accomplishments that the Secretary referred to are in his report that he issued this week and it's a 6-month interim report on implementation of the CRAT report. What you'll find in here is that over half of the 92 recommendations, are recommendations that are not specifically civil rights, they're centered around management issues that we need to correct so that we don't get the civil rights problems; but the specifics on each one of those are in this document.

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    Mr. BARRETT. Thank you, and the name of that publication is what?
    Mr. REED. Implementation of the Civil Rights Action Team Report at USDA.
    Secretary GLICKMAN. We'll get you the documents.
    Mr. BARRETT. Thank you very much. Thank you, Mr. Chairman.
    Mr. HILLIARD. Mr. Chairman? I would also like to have a copy of that report.
    The CHAIRMAN. Yes, I think you ought to give each member a copy.
    Secretary GLICKMAN. Every member will get one.
    The CHAIRMAN. Thank you.
    Secretary GLICKMAN. It just was finished about 2 days ago, so, every member will get one.
    The CHAIRMAN. Thank you very much. Mr. Boswell?
    Mr. BOSWELL. Thank you, Mr. Chairman. I'll be very short.
    I think, Mr. Secretary, you referred to this federalizing of county employees, as you're working on it and so on, but would you just give us a quick review of all that's what you've got in mind there. Specifically, federalizing of the county employees under Congresswoman Clayton's bill and then, perhaps, you could draw an analogy about the chairman's bill, granting authority of the Secretary over non-Federal employees.
    Secretary GLICKMAN. Well, we support the basic principles in Congresswoman Clayton's bill. Right now you have a mixed group of employees in county offices. You have, again, as we talked about the county employees do have to comply with a roughly set of parallel rules, but they are not Federal employees in the classic sense. It's only placed the United States Government by the way where you have people paid for by the Federal Government who are not Federal employees. That was done in the 1930s basically as part of a compromise in order to get farm programs through and the idea was to keep local control, but we believe that it discourages, in many areas, accountability and we think that we, particularly in the area of civil rights, and so, but it's more of a—as Mr. Reed says—more of general management issue that all employees working in an office ought to be subject to the same set of rules, the same accountability, the same hiring practices, and, you know, the lines of authority ought to be similar. But to do that, you have to do it sensitively, so that people's seniority rights, tenure rights are all protected. You know, it's not necessarily something you can snap your fingers and get done.

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    Mr. BOSWELL. I think that will give a lot of relief out there that's been, what you just finished saying there. I appreciate that.
    I, Mr. Chairman, want to say to Congresswoman Clayton, I really appreciate what you're doing and I think you've got a good thing going and long overdue and complement you for it. Mr. Chairman, I say this—I hate having people behind my back when I'm talking to them. I guess I can't——
    The CHAIRMAN. I'll protect your backside.
    Mr. BOSWELL. Well, OK. I really enjoyed working with you, Mr. Chairman, but I can't see you, but I got a feeling that you thought some of us, maybe us newcomers, weren't getting enough mail, but what you've done, is just like with a snowstorm over your suggestion on how to reorganize. And I respect the Secretary's comment or that he hasn't had time to evaluate that, but while you're evaluating that, Mr. Secretary, why maybe you'd throw in your question or your thinking process, what would be the effect on conservation projects, if this were to go forward, such as small watershed plans under Public Law 566, if we should eliminate the NRCS. So, I don't know, there's probably a whole host of other things you'll be looking at.
    Secretary GLICKMAN. I mean, as a practical matter, OK, my own belief is, I don't think it's a very good idea.
    Mr. BOSWELL. Well, so far, I don't either.
    Secretary GLICKMAN. And for a lot of different reasons. One is, as I talked about, they've been through this wrenching process of reorganization so the mere fact of, you know, combining vast sections of the Department of Agriculture, would be very problematic. But beyond that, NRCS is largely a technical organization. They help people comply, more and more on a voluntary, incentive basis with a variety of conservation techniques. OK, and whether it's buffer strips for parium buffers, whether it's conservation plans, you know, whether it's helping working with conservation districts on small—on watershed projects, whatever it is, that is their focus. Farm Service Agency are people who administer farm programs and farm lending programs and they're different functions. There's no question, I would be a fool not to believe that there hasn't been competition out there in the countryside between the two agencies in some areas. Other places people work together extraordinarily well without competition existing.

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    We announced a conservation reserve enhancement program in the Chesapeake Bay on Saturday. It was the first one of these major initiatives to try to put filter strips along the bay so that they wouldn't get runoff and this was designed with the most extraordinary cooperation between the technical people and the Farm Service Agency people and I didn't get a feeling there was a lot of turf there in this process.
    So, I think the system actually works pretty well. I do know that there are people out there who believe, from day to day, NRCS is taking over the operation, or the CRAT report is a stalking horse for NRCS to take over everything, or the Farm Service Agency is trying to squeeze out NRCS at various places of the country. Quite honestly, nobody's trying to take over either one. Both have very strong functions and ought to continue in that way. That's the way I believe it.
    Mr. BOSWELL. I appreciate that. I think that, as I have observed over the years, the conservation work of the NRCS and so on, that they've been very non-political, very technical, very professional and even the members that serve on those boards, I see they set aside their political preferences, at least where I've been, and I've only got 27 counties, but I've got quite a few. I think that it's working and so, Mr. Chairman, you're going to have to convince me—but, you might——
    The CHAIRMAN. I doubt it. [Laughter.]
    Mr. BOSWELL. Thank you.
    The CHAIRMAN. I thank the gentleman. I won't try today. Mr. Ewing.
    Mr. EWING. Thank you, Mr. Secretary, for being here and, Mr. Chairman, for holding the hearing.
    The biggest question that has come up in my district, with the introduction of the chairman's bill, more so than with Mrs. Clayton's bill, but I was wondering how you visualize the local soil and water conservation districts are going to operate in a restructuring of the Farm Service Agency and Natural Resources Conservation Service?

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    Secretary GLICKMAN. It's unclear. For example, the conservation districts provide some of the resources, personnel for the operation of our conservation programs. This partnership is extraordinary, the conservation district partnership, and it would be affected. I don't think the bill addresses that, to be honest with you. That obviously worries me very much out there, because I would not want to diminish that partnership with conservation districts they've provided over the years.
    Mr. EWING. Well, this may be the same in every State, I'm not familiar with that—but in Illinois, our conservation districts, called soil and water conservation districts, are a creation of State statute and they get county funding, in most cases or all cases, they get State funding, and they pay for almost all of the employees are paid for and work for the soil and water conservation district and then there's usually an assigned Federal employee who is a technician, maybe two or—depending on the size of the county—two or more technicians which come out of the Natural Resources Conservation Service.
    Secretary GLICKMAN. Yes, the deputy tells me the districts have about as many employees as NRCS does, actually.
    Mr. EWING. I guess the question is, if we're going to move to federalize employees in these offices, are we talking about federalizing the State soil and water conservation place?
    Secretary GLICKMAN. I doubt that, and that's not in the bill. I would point out NRCS employees are already Federal employees, they're not county employees.
    Mr. EWING. That's correct, they are.
    Secretary GLICKMAN. So, no, we're not talking—our bill does not talk about federalizing any other conservation employees.
    Mrs. CLAYTON. Could the gentleman yield?
    Mr. EWING. I will yield.

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    Mrs. CLAYTON. Mr. Ewing, how is it working now? I know, in North Carolina, that the Federal workers under the soil and water conservation is controlled by the districts and, by State law, they have these districts that are both codified in State law as well as they're recognized as Federal. Do you see a problem now with as it is working now?
    Mr. EWING. I would say, in our State, that it's working very well. It has over the years. You really don't know who works for who. You go in there and you get pretty good service in those offices. In Illinois, also, the soil and water conservation district is usually housed in the same office with the Farm Service Agency and Federal Land Bank and they've tried to bring them all together, normally in one place and——
    Mrs. CLAYTON. I guess I wanted you to share how it's working, because it works well in North Carolina and those are Federal employees.
    Mr. EWING. You sort of want——
    Secretary GLICKMAN. The NRCS——
    Mrs. CLAYTON. Yes, their employees.
    Secretary GLICKMAN [continuing]. But the water, the conservation district employees are not paid for by the Federal Government——
    Mr. EWING. No, that's correct.
    Secretary GLICKMAN [continuing]. They're paid by the State and whatever funding formula State's have.
    Mrs. CLAYTON. Right. The soil and water conservation actually—within NRCD, I guess, is what we call is the Federal.
    Secretary GLICKMAN. NRCS are Federal, but the interesting thing is that partnership has worked in an interesting way, because there is a lot of interchangeability of functions and they provide a lot of resource in-kind help to technical assistance programs the NRCS and so, without them, the budget would need to be double, probably, what it is.

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    Mr. EWING. Well, reclaiming my time, I guess I just want to leave the thought that this has been working well. There is a lot of concern in our area about changing that and the fact that the soil and water conservation boards are not just made up of farm people, they're made up of with a diversity that you're talking about, representing small communities and in some cases, larger communities, because they do provide services, not only to rural areas, but to the incorporated areas.
    Thank you, Mr. Secretary.
    The CHAIRMAN. I thank the gentleman. Mr. Berry.
    Mr. BERRY. Thank you, Mr. Chairman. Looks like a lower siege staff meeting at the Department of Agriculture in the front row there, and good to see all my old friends.
    Mr. Secretary, you mentioned several times this problem of people that had their loans, had agreed to a write down or whatever being precluded from a new loan. Why do we need that, if those folks are doing so well, can't they go to conventional sources?
    Secretary GLICKMAN. Well, some of them cannot get credit elsewhere. They're small producers and they still operate in a narrow cashflow situation, but I have seen, during my travels, a fairly good supply of smaller producers, minority and non-minority, who can't get normal financing. Frankly, in many parts of the country, the banks have not been aggressive promoters of the use of their guaranteed loans and most of the loans are guaranteed. A lot of these people rely on direct loans. Congress has upped the amount a little bit recently, but the mere fact is that they would otherwise qualify, in many cases without this, and it's just not—it doesn't seem fair. I still think you've got to make a determination of credit, the kind of creditworthiness that you'd ordinarily make on a direct loan and we're not talking about making loans to people who are delinquent. But these are people who would otherwise be eligible for these loans. Don't know how many of them are there, but there are some.

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    Mr. BERRY. Do you have any idea how much money we're talking about?
    Secretary GLICKMAN. You mean in terms of the needs for these programs?
    Mr. BERRY. Yes.
    Secretary GLICKMAN. We don't know. We do know that there was lending money added in the emergency appropriations bill last year for these funds.
    Mr. BERRY. Also, you mentioned the need for maybe an easier way to appeal decisions made at the county level earlier, and more and more, in my district, we're running into a need to appeal decisions or determinations that are made by NRCS and it puts our producers in a position where they're almost immediately confronted by the Justice Department, because of a decision made by NRCS over wetlands and they don't have any method, short of going to Federal court, to deal with that. I wonder if you've looked at that, in any way?
    Secretary GLICKMAN. I can't answer the question. Are you telling me that the designation, of course the designation of wetlands is, you know, we've tried to get that into USDA so that it's not a multiple agency designation. But, are you saying the producers are having problems with those designations, that they can't appeal them and it's because of NRCS activities?
    Mr. BERRY. Yes, sir. I think there's no one in this room or anywhere else that has greater respect for NRCS and what it has meant to the rural communities in this country over the years, but almost in the last few years, we have, in my State, turned NRCS from a wonderful technical advisory agency that is there to provide help to the community and to producers and landowners, into the police department for the EPA and the U.S. Corps of Engineers.
    Our producers are put in a position where they don't have anyone that they can deal with once a determination like that is made and it's turned over to the enforcement people. It puts these folks under tremendous stress and it's bad for everyone concerned. Like I say, their only recourse is through the Federal courts and I think we—as we talk about these things, we need to include that in there.

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    Secretary GLICKMAN. Well, I would say that you make a good point. Quite honestly, I have not heard of a lot of this happening, and maybe it's because the word is not getting up to me, but if, in fact, and a lot of this may be caused by statute—the Endangered Species Act or other statutes—I don't know NRCS's role, but I have not heard a tremendous amount of this going on and if there is, we ought to know about it.
    Mr. BERRY. No more questions, Mr. Chairman. Thank you.
    The CHAIRMAN. I thank the gentleman. Mr. Pombo.
    Mr. POMBO. No.
    The CHAIRMAN. Mr. Canady.
    Mr. CANADY. Thank you, Mr. Chairman. Mr. Secretary, I appreciate your being here. I just want to make a couple of observations about the civil rights issues that have been discussed.
    I think it is very important for us to everything that's necessary to put in place in the Department, as well as everywhere in the Federal Government, whatever it takes to ensure that we have a consistent policy of nondiscrimination. No one should be denied or given any benefit because of that person's race, ethnic background or gender. Now, I do think we need to recognize that special assistance can appropriately be provided to individuals who suffer economic hardship, but the determination of who suffers economic hardship should not be based on their biological characteristics, it should be based on their economic circumstances. There shouldn't be any presumption that someone is economically disadvantaged and needs special assistance simply because they are of a particular race or ethnic background. It's my view that any classification that we put in place based one race or ethnic background will inherently be harmful. I don't think we can put in place classifications based on race and ethnic background that are benign. The intent may be good, but I think the result will end up being harmful to everyone, including the people who are the intended beneficiaries.

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    So, I think it's incumbent upon us to avoid any policies which sort and divide people on the basis of their race or ethnic background. I'm very concerned about any policy that is a policy of proportional representation, because that sort of policy, inevitably, divides sorting and classifying people based on their race and ethnic background and I don't think that's the way we move forward.
    Our focus instead should be on outreach and recruitment efforts. I think those are very important. We have a responsibility to reach out to all parts of the community to make certain that we're bringing people in and making opportunities available to them, but the outreach and recruitment efforts should be coupled with a strict policy of nondiscrimination so that the race or gender of a person is not taken into account. The decisions that are made about who's going to get a job, a contract, or a benefit of any sort, should be made without regard to the person's race or gender. That's what the 1964 Civil Rights Act was about and I think that's what we need to be—that needs to be our model for what we are doing in all the programs of the Government.
    Now, I was very pleased when you described some of the outreach efforts that have been ongoing and you said, no quotas and no goals. Now, of course, everybody says, they're against quotas, but I was glad to hear you say, you were against goals, because I have found that goals can frequently turn into quotas. I think that a——
    Secretary GLICKMAN. If I may say this. I'm probably venturing into constitutional quicksand here, so, you know, no quotas, but you know, it's clear. I agree with part of what you said, but I also have to tell you that if you look at the last 50 to 60 years in this country and you look at the history of the operation of programs in the Department of Agriculture, there have been certain classes of people more affected negatively by the operation of the programs than others. So our goal has to be—and the reason why I say this is because I want to make sure that I'm not misinterpreted.

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    For example, there are no quotas at all, but we did work, for example, with Members of Congress and Members of the Senate on appointment at state committees. We said, we don't have any minorities on state committees in this country; something's wrong here; very, very few. And that's not—I mean we have—we have people out there of great diversity. Do your best where you find qualified people to see if you can get them to serve on these things, and they've done that. Now, I don't know if you'd call that a goal or whether you'd call that a——
    Mr. CANADY. Well, Mr. Secretary, reclaiming my time, I was just quoting what you said. You said there were no quotas and no goals and I was, again—terminology here can be very tricky, because what some people mean by quotas are different one from what other people mean by quotas and I suppose that the same could be said of goals.
    But let me, specifically, address a provision in Representative Clayton's bill that we've been talking about some in that section 101. When I read this, it looks like to me it sets in place a system of proportional representation on the committees. It provides for fair representation of the elected members; this is on page 2 of the bill. I'm not sure exactly what mechanism you put in place to ensure that the people who are elected are fairly representative of agricultural producers, but when you go through all of this, it seems to envision a system of a proportional representation. Now, in your letter to Mr. Smith of September 2, you say that section 101.1 would provide for the appointment to county committees of two additional members who would be demographically representative of groups of producers who would otherwise be underrespresented. I agree with the basic thrust of this provision to ensure that the committees are representative and would appreciate the opportunity to work with you to refine this proposal. Do you support this, a system of proportional representation, such as represented in here?

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    Secretary GLICKMAN. I would say, generically, we support that provision in the bill. I don't want to, at this stage, be stuck to say to you that every word in there, our lawyers think is the best way to phrase it, but, yes, we support it. But it's not—and I would have to also say, I don't view this as proportional representation at all. What I view this is a way for the county committee structure to do their best to represent people who are using the programs and it doesn't mean if there are 14 percent of one particular background group, that there has to be one out of seven on the thing, but the fact of the matter is, that in certain parts of the country, there is totally homogenous representation on county committees and what we are trying to do is see if we can get that broadened and do it in a way that's constitutionally permissible.
    Mr. CANADY. Well, again, my time has expired, but I appreciate your comments on that. I think I disagree with your interpretation of the impact of this language, but that's the subject for another day.
    Mrs. CLAYTON. Would the gentleman yield?
    Mr. CANADY. I think I have no time to yield, but, unless there's objection, I'll certainly——
    The CHAIRMAN. Without objection, we'll grant the gentleman another minute.
    Mr. CANADY. I'll be happy to yield to the gentlelady.
    Mrs. CLAYTON. Thank you. I was struck by your introductory remarks, too, and I was wondering where you were going. I'm delighted to see where your point was to define what you thought the intent was 101 was proportional representation. It was, indeed, the intent, where there was opportunities to bring diversity, to bring diversity. There are places in this country where there may be homogenous farming, there may not be the diversity in that population so this is not to impose what is not in reality. Neither is it to say numerically proportioned, so I reject your interpretation, you gave a very general discussion which is hard to object to in principle, and I don't object to it, but when then you conclude that because you want to include all Americans in it, it is proportional representation and, therefore, by stating that principle, I am now talking about quota, you elected to put that interpretation on it, sir, and I reject that interpretation.

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    Mr. CANADY. Well, reclaiming the small balance of my time, I'm just trying to read the language here and see what it says, and it seems to be a numbers driven——
    Mrs. CLAYTON. Never said proportional.
    Mr. CANADY. Well, it's a numbers driven provision and I think it speaks for itself, but that's, again, we will have other opportunities to discuss this, I'm sure.
    The CHAIRMAN. We will have time to discuss this. I just want to add that we are going to be hearing from a lady, a little later on in this hearing, who is an Italian divorced American woman, who claims she was shut out of the system. Now, in trying to find a way to do this fairly, we have not only an Italian-American divorced woman here, but we have women, we have Indians, we have disabled people, we have all kinds of people who have been discriminated against and somehow we have to find an answer that will include them all so that they have an equal opportunity in the system.
    Mr. Secretary, let me ask you, time wise, you are—can you stay or——
    Secretary GLICKMAN. I probably need to move on pretty soon, but the others here can stay if you would like them to stay.
    The CHAIRMAN. We have a journal vote which is essential, you know, for the continuance of the Nation.
    Secretary GLICKMAN. I'm well aware of what I don't have to do anymore. [Laughter.]
    The CHAIRMAN. We must go down and vote, we will return. If you can stay, we'd love to have you.
    We will recess until the end of the vote.

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    [Recess.]
    The CHAIRMAN. Mr. Rominger, welcome back. You and I might as well have a visit while we are waiting for Members to show up.
    Mr. ROMINGER. OK.
    The CHAIRMAN. Thank you for staying.
    I wanted to ask you a rather technical question regarding the possibility of merging FSA offices and NRCS offices. There's some concerns that the Department's administrative convergence is, as it's completed, many FSA offices will be closed or consolidated, but none of the NRCS offices will be closed, thus, you would force farmers to again go to two separate field offices while we are attempting, by convergence, to provide for one-stop shopping. Can you comment on that possibility?
    Mr. ROMINGER. Yes, Mr. Chairman. First, I'd like to say that the Secretary is sorry that he had to leave, but I'm pleased to stay to answer questions.
    The CHAIRMAN. Thank you.
    Mr. ROMINGER. We've got two things going here, I guess. We've got the reorganization where we are reducing the number of offices out there for the three agencies, the three field agencies: Farm Service Agency, NRCS, and rural development, combining them into our service centers. So those are—and as you've indicated—there will not be all of the agencies in all of those service centers. For example, rural development will be, will have a full-time presence in only maybe about a third of this service centers, and the same could be true in some States and some counties with NRCS and FSA. There will be the one service center which will have the records. There will be cases where there will be people who are based in that service center, but will spend most of their time out in the field, working, perhaps, one day in one county and another day in another county, if it's a multi-county office. So, there will be offices—service centers—where not all of the agencies are there full time.

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    The CHAIRMAN. I'm not sure you answered my question. If you're closing FSA offices and not closing NRCS offices, aren't we, indeed, asking for a two-stop situation, rather than a one-stop?
    Mr. ROMINGER. No, I think that the farmer goes to the service agency—to the service center—and those numbers are continuing to go down as we complete the 1994 reorganization. So, there'll be a service center where all of the records will be held. In some cases, there will be people working outside of those service centers where the need be. So, what we are trying to do is have a system where we have the service center for one-stop shopping, but will have people working to take care of the workload in each county, whatever it is. I think we are trying to do the one-stop shopping, but be able to provide the services that are needed.
    The CHAIRMAN. Will there be closure of NRCS offices?
    Mr. ROMINGER. Well, there's no change in the plan from what we was organized in the 1994 reorganization and the plan that we set out. That proposal showed who would be in which offices, so the Secretary has not adopted any new plan that would require additional closures. As he said, if that's required as a result of budget constraints and deficiencies, he will be back to discuss how we would go about making some additional closures.
    The CHAIRMAN. I think the point is you are sensitive to the issue here, that we are not arbitrarily creating more inconvenience to farmers while we are organizing in an attempt to provide services from a one-stop shopping——
    Mr. ROMINGER. Certainly, we are trying to do just the opposite.
    The CHAIRMAN. Right, right. Mr. Goode.
    Mr. GOODE. Thank you, Mr. Chairman. Let me ask the Deputy Secretary this. When the Secretary was speaking, he said, over a period of time there were $50 billion loaned out that wasn't repaid. Did I hear that right? Or was it $10 billion?

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    Mr. ROMINGER. Did he give any figures?
    Mr. GOODE. Yes he did. In the 1980s he gave some figures of how much was not repaid.
    Mr. ROMINGER. I don't know exactly what the numbers are, but certainly over the years, as a result of, as he said, of the economic times in the 1980s and the lending practices then, there is a considerable amount of that money that was not repaid. I don't have the exact figure.
    Mr. GOODE. Was it $10 billion? I think that's what he said.
    Mr. ROMINGER. Dave, do you have——
    Mr. DEWHURST. No, I think there was a debt problem of about $50 billion in the farm credit portfolio and that it related primarily to emergency disaster loans and economic emergency loans which were made primarily in the early 19——
    The CHAIRMAN. Please state your name for the record, sir.
    Mr. DEWHURST. I'm sorry. I'm Stephen Dewhurst. I am the budget officer for the Department.
    The CHAIRMAN. Thank you.
    Mr. DEWHURST. There was a significant repayment problem and I do recall numbers approaching $50 billion, traced primarily to emergency disaster loans and economic emergency loans which were made under old laws in the early 1980s when the standards were not very tight for those loans and a lot of them were not repaid; they've had to be written down or written off.
    Mr. GOODE. Mr. Chairman. Did the local FSA committee, on the emergency loans for disaster, did they approve those or did they not?
    Mr. DEWHURST. Most of those loans were made prior to the 1994 reorganization and in the 1980s, these loans were under the jurisdiction of the Farmers Home Administration. They had their own committees. The old ASCS county committees were not involved with that loanmaking.

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    Mr. GOODE. Those loans were just done by the Farmers Home Administration people?
    Mr. DEWHURST. Yes, sir.
    Mr. GOODE. How many of the loans, unrepaid, just a rough guess percentage, and I don't know whether we are talking $10 billion or $50 billion, either way it's real money. What percentage of those were just normal loans for farmers, not to local governments or—just ballpark?
    Mr. DEWHURST. Almost all the loans that we are talking about here are loans that the Department made to individual farmers. It's what we call our farm credit lending authority. We make essentially two kinds of loans. We make regular ownership and operating loans to farmers as a lender of last resort. We run delinquency rates of about 20 percent in a direct operating category, about 6 percent in the direct ownership category. We also make disaster loans. In a disaster, if Congress passes laws expressing amounts of those things, we make emergency loans to the producers. We tend to have far higher delinquency rates in those loans. Even as of the end of 1996, we still had a 48 percent delinquency rate in our emergency disaster loan portfolio and about a 36 percent delinquency rate in what remains of the economic emergency loans that we made years ago. We've always had problems recollecting disaster kinds of loans.
    Mr. GOODE. Now the rural development makes loans to localities and water and sewer districts and things like that. Now those loans, back when it was Farmers Home Administration, did they go through their equivalent of the local committee then?
    Mr. DEWHURST. No, they were, essentially those are community-based loans, they were made by Farmers Home in consultation with the local communities, and so far as I can recall, there was no direct oversight by our committee system at the community level.

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    Mr. GOODE. But the payback on them is fabulous compared to the individual farmer loans. Is that not true?
    Mr. DEWHURST. Yes, sir, we do not have a serious delinquency problem in our community loan programs.
    Mr. GOODE. Let me ask you this: Say in 1985 and 1990, about how many full time farm families did you have in the United States?
    Mr. ROMINGER. We're down to something around 2 million people that are classified by the census as farmers. Now, when you want to get down and separate out which ones are full time farmers, I think that would be a little harder. I don't know whether we have those numbers in the census. I don't believe we do.
    Mr. GOODE. You could have given every farm family $25,000 and not fooled with the loans, couldn't you? If you had $50 million, I mean, $50 billion that wasn't paid back.
    Mr. DEWHURST. Of course, many of these loans were far greater amounts than that.
    The CHAIRMAN. I thank the gentleman. Now, are there other questions of Mr. Rominger before he has to depart? If not, thank you, Mr. Rominger, for coming. Would you, also, accept from many of the committee members, questions that they might not have had a chance to ask you, either the Secretary or yourself for the record, that we may submit them to you?
    Mr. ROMINGER. We'd be happy to do that, Mr. Chairman.
    The CHAIRMAN. Alright. Thank you very much.
    The next panel will include Mr. Kenneth Hood, Mr. Lucas, Ms. Turner, and Mr. Sundseth. At this point, I'm going to ask Mr. Barrett if he would introduce one of his constituents and a gentleman on this panel, please. Mr. Barrett.

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    Mr. BARRETT. Thank you, Mr. Chairman. I am pleased to take a moment to introduce a constituent of mine from McCook, NE, Jerry Vap, a member of this panel. Jerry is presently serving as president of the National Association of Conservation Districts. I can't think of a better person to be in that position. He is well respected for his expertise and for his leadership and his commitment to conservation. So, a special welcome to Mr. Vap.
    The CHAIRMAN. Thank you. Mr. Kenneth Hood is with us, who is president of the National Association of Farmer-Elected Committeemen. Mr. Hood, thank you, we are anxious to hear from you.
STATEMENT OF KENNETH HOOD, PRESIDENT, NATIONAL ASSOCIATION OF FARMER-ELECTED COMMITTEEMEN
    Mr. HOOD. Thank you, Mr. Chairman. I am Kenneth Hood. I'm president of NAFEC, which is the National Association of Farmer-Elected Committees. I also have served in my county, Ballwood County, which is located in Mississippi, as a community chairperson, elected by my peers and then elected by my peers as a county committee person also, and at that time, also served as 3 years on the chairman of the county committee system. So, just to give you a little background on my expertise, if that's what you want to know about, county committees and how they operate.
    NAFEC, the national organization that I represent as president, has members who are farmers, elected by the producers in their communities to make sure that farm programs are administered fairly and efficiently at the local FSA offices. I look forward to working with this committee to improve the delivery of USDA programs, while ensuring the civil rights of USDA customers and employees. I've given you a written report and what I'll do is just hit the highlights of my testimony here, if it's OK with you, and then have questions later on.
    NAFEC supports the idea of one office, with one staff, that carries out the various programs and activities that serve farmers and ranchers. FSA can and should be the hub of the USDA service center structure. County offices currently administer USDA functions related to production conservation, risk management, credit, and many other activities. Where is Congress to improve upon this service center delivery system it envisioned in 1994? This committee should also look at the potential for providing other services presently administered by agencies outside USDA, such as service and smart cards and Federal nutrition programs.

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    Second, providing the leg and paperwork for the ag census. Also, assisting with FEMA, Federal Emergency Management Applications. Recordkeeping and loss adjustment assessments that are tied to risk management programs. In other words, one-stop shopping, basically, is what I'm talking about there. Such an organizational structure at the service center would allow those wanting to participate in USDA programs to apply at one location and would allow one technical group to review these applications, to determine the needs and feasibility of any request that the farmer or rancher might come to that office to process. It would provide a vehicle by which county committees and conservation districts could develop a formalized relationship to establish priority areas for conservation programs, as well as oversee the delivery of these programs. It would also make the county FSA committee the first contact for review and reconsideration of decisions made when farmers, ranchers, and landowners feel their applications have not been properly considered by FSA employees. We believe, in NAFEC, this is the very type of oversight being sought by the Secretary, who we just heard from, that would ensure fair and equitable treatment for all applicants in all programs. It could be the one-stop place to go for all services, with all employees working together, to ensure that no one leaves the local USDA office without being helped to a maximum extent possible.
    NAFEC recommends that the county office committee should retain their authority to hire county executive directors which provides direct accountability to taxpayers. The present county organization system serves those that have objectives and missions that are close to production agriculture which provide grassroots control over program delivery at the local level. FSA is the only agency with the production agriculture folks and the only agency whose primary mission includes advocacy for farmers and ranchers. The county office committee system is the only grassroots system of review and appeal. NAFEC feels the county committee should retain their authority to approve the eligibility of loan applicants.
    As I mentioned earlier, NAFEC appreciates the leadership of the chairman and Representative Clayton in addressing the recommendations of the CRAT's report. NAFEC has met with other organizations, met with producers, met with farmers, with ranchers, and have come with what we think are some fairly good solutions to some of the problems in the program that you've heard this morning. Of course, civil rights. NAFEC feels that strengthening the civil rights training program for FSA county committees and county office staff on all programs, is a necessity. NAFEC feels that we should improve communications to underrepresented farmers on county committee elections and activities. We should encourage voting participation of underrepresented farmers on farm elected committees that ensure that minorities have the opportunity to be elected to committees. NAFEC supports local control retainment over county offices through the farmer-elected county committee system through the direct line of authority from the Secretary to the State executive director, to the district director, to the county office committees and the county executive director, designed to provide safeguards against any discrimination.

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    And fifth, extend existing secretarial discretion to enforce Federal civil rights laws and agency regulations to the assistant secretary for administration and include strict rules in the handbook to mandate those terms and conditions.
    NAFEC supports the election of all county office committee members and opposes the appointment of any members to the county and area committees. This can be accomplished through the modification of existing authority without changing existing public law. The USDA can establish a set of procedures to examine whether or not a group of producers are underrepresented. When such a determination is made, we recommend that a five-member county committee be established, with two members elected at large from the county or area. This would ensure representation for any underrepresented group. Nominations for those candidates for these at large positions would be provided from underrepresented groups. These changes can be provided without statutory changes and could be implemented immediately. No changes would be required for committees unless the Secretary determines that underrepresentation does exist. This approach promotes opportunity and increases the assurance of fair representation without the stigma of serving under an appointment. It honors and improves the farmer-elected democratic process without changing the Federal agricultural delivery system.
    Mr. Chairman, I appreciate this opportunity to present these statements before you this morning.
    [The prepared statement of Mr. Hood appears at the conclusion of the hearing.]
    The CHAIRMAN. All right, thank you, Mr. Hood.
    Mr. Lawrence Lucas, president of the USDA's Coalition of Minority Employees. Mr. Lucas, welcome.
STATEMENT OF LAWRENCE C. LUCAS, PRESIDENT, USDA COALITION OF MINORITY EMPLOYEES

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    Mr. LUCAS. Thank you, Mr. Chairman, and I thank this committee for being so generous in allowing me, as president of the USDA Coalition of Minority Employees, to testify before you today. Any prepared statements, I always find that, seemingly after I hear other comments, there's no point in preparing them. But I would like to say, and I'd like to thank this committee for taking on this task to do something about the problems of racism, sexism, favoritism, and nepotism that exists in the U.S. Department of Agriculture, as it relates to employees, as well as it relates to the farmers, women farmers, small and disadvantaged farmers of this country.
    I would like to say, that many people will talk to you today. I wonder where were these presidents and where were these organizations when farmers went into these offices of the county committees and they had their applications put in the trash in front of the people who are applying. Where was this committee and where were these presidents and these organizations? When Mr. Pickford had his settlement put in a briefcase, because someone from OGC decides to go on vacation. His case was not settled. Our former Secretary had made that decision in that finding. It gives me pain, Mr. Chairman, to sit here before you and tell you about the racism and sexism in the Department of Agriculture and you will have an Office of Inspector General to give you a report and when he analyzes what he's seen in the South and around this country as it relates to, especially, African Americans, who seek fair treatment, from a Government that is supposed to protect their rights. It gives me great pain to speak before you today and know that I have to speak for these farmers, who just because of their credit conditions, because of a 1996 farm bill that says that they can no longer appreciate and get loans from the U.S. Department of Agriculture.
    But the problem goes much further than the bill itself. It goes deep into the culture of the U.S. Department of Agriculture. Deep into the behavior of people who treat not only farmers, women, and disadvantaged farmers inequitably, but it treats its own employees similarly. We have a culture that exists in the Department of Agriculture that has gone on for administration after administration, secretary after secretary, president after president, both Republican and Democrat. Mr. Chairman, Mrs. Clayton, and many of you, I expect, that you will do the right thing.

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    Now, on the issue of this county committee system. I say you do one of two things. You either correct it or you remove it. I say that the county committee system has not served black farmers, women farmers, equitably, as they have wealthy white farmers in this country. We have a history since 1965, D.J. Miller Report, Focus Report, Civil Rights Commission Report. When you look at the CRAT's report, there's studies after studies, and if you put that paper on the floor in front of us today, you probably wouldn't be able to see anyone in this room beyond this table. It's time to put away partisan politics, put aside partisan politics and do the right thing for people that have come to you, who losing their land, their heritage, only because they are economically deprived, but more important, because their skin is black. There is very little evidence from the OIG report that you will see soon that can state that institutional racism in the county committee system, in the political appointees and career bureaucrats in FSA, is nothing that I have read to say that there's not institutional racism, sexism, nepotism, and favoritism that have denied, that have systematically denied, farmers, women farmers fair treatment in this country.
    I say to you, that when I look at Mrs. Clayton's bill, I think her bill is an excellent bill, but I can't, in all honesty, see any reason why that those county committee people should be grandfathered into a system where we demand qualifications for all Government employees and we should be demanding diversity of all Government employees. I think when you talk about who serves on these county committees, I think when a white person's hand is raised up to vote, I think if it's a woman or Hispanic or an Asian, or a black person, when their hand is raised up to vote, then it should count as well. I do not understand in 1997 why we have a system that where people are going to vote determining the lives and destiny of people who are applying for loans and their vote is not counted. Are we approaching 1997 and the new millennium with fairness and equality for all?
    Mr. Chairman, I thank you. I have submitted my comments and I will be here to answer any questions regarding those comments. Thank you very much.

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    [The prepared statement of Mr. Lucas appears at the conclusion of the hearing.]
    The CHAIRMAN. Thank you, Mr. Lucas. You've outlined exactly why Mrs. Clayton and I and this committee are here today, and why you're here today.
    Mr. Goodlatte, would you take the chair for just a few minutes, please?
    Mr. GOODLATTE [presiding]. Ms. Turner, welcome.
STATEMENT OF MILLIE TURNER, PRESIDENT, NATIONAL ASSOCIATION OF CREDIT SPECIALISTS
    Ms. TURNER. Mr. Chairman, and members of the Agriculture Committee, on behalf of the 200,000 managers and supervisors in the Federal Government, whose interests are represented by the Federal Managers Association, I would like to thank you for holding this important hearing on the Department of Agriculture's Civil Rights and Efficiency Act of 1997 and H.R. 2185.
    My name is Millie Turner and I'm a 14-year Federal employee at the Department of Agriculture's Farm Service Agency and I'm the president of the National Association of Credit Specialists; one of the 15 agency conferences included in the FMA. Before I begin with my testimony I want to stress that my comments before the committee are made in my capacity as the president of NACS and as a member of FMA and are not to be construed as the opinion of the USDA or the Farm Service Agency.
    I would like to thank the chairman for his leadership in agricultural issues and for giving me this opportunity to testify on his bill to merge Natural Resource Conservation Service and FSA. While FMA is not taking a position at this time as to the merits of merging NRCS with FSA or keeping it separate, I would like to comment on three concerns we have with section 104 of this legislation.
    The first concern is we are considering deeming non-Federal employees, Federal, to be a dangerous precedent. As a county employee deemed Federal, the CED is in charge of the system to which they are not accountable. This sets up a system ripe for abuse.

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    The second concern. Item 17 of the CRAT report called for county committees to be removed from, and I quote, ''any farm loan determinations.'' However, there still remains a potential for unwarranted influence and conflict of interest in FSA's credit operations by the county committee. Although your legislation stipulates that the Federal county credit director must consult with, but is not answerable to, the county committee, this safeguard is inadequate. The central fact is that the act would allow the CED or the loan approval official to be supervised, evaluated, and perhaps, be even subject to removal by the CED, who works for, and at the pleasure of the county committee. In practice, the loan approval official is an untenable position and clearly open to coercion.
    The third objection is purely programmatic. Arbitrarily placing the CED in charge of the local offices makes the subsidy specialist responsible for the two remaining mission areas of credit and conservation. Why not fill the position by competition open to individuals from all the FSA program areas?
    The second item I would like to discuss is H.R. 2185. I want to thank Representative Clayton for introducing this important legislation. As a Federal employee at USDA, and as someone who has been very concerned about USDA's civil rights record for some time, I am pleased to see that H.R. 2185 contains many of the recommendations contained in the CRAT report. FMA has absolutely no tolerance for discrimination of any kind and is fully supportive of all 92 recommendations contained in this report. However, as impressed as I am with this legislation, and the honest intents of its author to correct the Deparment's longstanding civil rights problem, the manner in which the former ASCS county employees are converted to Federal status is extremely troubling. Section 102 of H.R. 2185 would waive, for approximately 11,000 county employees, the Government-wide requirement contained in title 5, that all employees hired by the Federal Government serve for 3 years as career-conditional employees before obtaining career status. As the bill is currently drafted, county employees with more than 3 years of service would be converted to Federal status as career employees and those workers with less than 3 years would be converted to career-conditional appointments.

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    FMA opposes section 102 of H.R. 2185 for the following reasons: The first reason is direct conversion is not consistent with the CRAT report which recommended converting FSA county positions to Federal status, because county employees are not subject to Federal EEO and affirmative action employment laws and that the county employees, and I quote, ''lack diversity in the program delivery structure.'' The CRAT report also called for converting, and I quote once again, ''the FSA State and county committee system by converting all county non-Federal FSA positions, including county executive directors, to Federal status.'' Again, the CRAT report calls for converting positions, not employees.
    Second, FMA supports conversion of county employees in the manner that is fair and equitable to career Federal employees. They should be hired as all other executive branch Federal employees, through a fair and open competition, in the Federal Register, as career-conditional employees. Furthermore, the conversion should take place only after the planned downsizing at USDA is completed.
    Let's be honest. This is not about fairness, this is about jobs, and this will impact program delivery. County employees want career status, because the programs they administered are being scaled down and USDA is downsizing. Crediting their county time would allow them to bump existing Federal employees whose credit skills are badly needed and whose programs are not responsible for the downsizing.
    Mr. Chairman, I'm sure you realize that as a member of FMA, and the president of NACS, I'm opposed to supplanting career Federal employees with county employees. However, I have always felt the mission of FSA is not to supply jobs to one group or another, rather FSA is there to provide a service to our farmers and your constituents. We are the lender of first opportunity and, oftentimes, the lender of last resort. The work I do as a Federal employee is important. Important to the taxpayers who want to know that their tax dollars are being used wisely, and important to your constituents who rely on career Federal employees to shepherd them through the complex USDA credit program.

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    In conclusion, Mr. Chairman, once again I want to thank you for holding these hearings and would like to reiterate FMA's commitment to working with the committee on the Agriculture Civil Rights and Efficiency Act and H.R. 2185. Thank you.
    [The prepared statement of Ms. Turner appears at the conclusion of the hearing.]
    Mr. GOODLATTE. Thank you, Ms. Turner.
    Mr. Sundseth, you're welcome, glad to have you here.
STATEMENT OF DAN M. SUNDSETH, PRESIDENT, NATIONAL ASSOCIATION OF FSA COMMITTEE EMPLOYEES
    Mr. SUNDSETH. Thank you, Mr. Chairman. Thanks for the opportunity to meet with you and the entire committee.
    As president of NASCOE, the National Association of FSA County Office Employees, I very proudly represent 90 percent of all the CO employees at FSA, as members of NASCOE. First and foremost, I am a county executive director, a full time FSA employee. I work in the Linn, Benton and Lincoln County office in Oregon. I volunteer my time with NASCOE, as all NASCOE members do and when I attend meetings like this it is with annual leave and on private funds. I appreciate the opportunity to speak today and I understand the constraints of the hearings and I appreciate the fact that you'll allow our written testimony to be recorded as part of this hearing, as well.
    I want to thank Chairman Smith for approaching the USDA reorganization effort through his bill as a point of trying to develop a truly one-stop service center, staffed by employees all committed to delivering services in a manner that utilizes specialized skills at a time when service staffing is decreasing and workload is increasing for all agencies at the local level and for providing specific direction for addressing deficiencies in serving local and socially disadvantaged groups. On behalf of the NASCOE members across the country, I want to say thank you, Congresswoman Clayton, for the language of 2185, that stipulates that if FSA's CO employees are going to be converted to the GS system, that the employee is converted with the position. You are willing, Mrs. Clayton, to look beyond the derogatory comments, beyond the innuendo, beyond the direct insults that we have received from individuals and even from the other USDA employee organizations regarding our skills and abilities and our desire to serve the American public.

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    From our perspective, this committee goals for USDA are the same as the Secretary's goals for USDA, is the same as our goals for USDA. One is fair and equitable treatment for all individuals that want to participate in our programs and for all USDA employees. The other is uniform service that not only is fair and equitable, but provides maximum utilization of USDA's work-force skills and abilities in the most efficient, cost-effective manner possible.
    The issue of civil rights in EEO has been, by far, the most publicized issue facing USDA and FSA for several months. It's an extremely serious problem that has, we believe, a straightforward and simple, yet very effective, solution. The solution is found and addressed in the obvious question raised by the CRAT report: Why were so many claims allowed to go unanswered and unresolved for so very long? I cannot answer that specific question, but I believe USDA can assure itself of fair and equitable treatment for all U.S. citizens by setting and vigorously adhering to a policy that demands immediate attention and appropriate resolution for every claim that is filed. If a claim is upheld and discrimination did occur, then the situation must be rectified and the employee at fault must be appropriately disciplined. If a thorough investigation finds that a discrimination did not occur, then the applicant must be made aware of that decision in a timely manner. A great many of the unresolved claims of the past were fired by farmers participating in, or wanting to participate in programs administered solely by GS employees. Therefore, converting all CO employees to the GS system will not signify the end of all discriminatory behavior within USDA.
    NASCOE accepts the fact that discrimination has occurred. We do not tolerate nor condone it in any form, anywhere in FSA or anywhere else. We believe that any employee found to be discriminating should be dealt with quickly and severely. We want nothing more than to be given a part and an opportunity to be a part of correcting past problems and minimizing future problems. We have already made this offer to the Secretary.

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    With respect to the conversion of CO employees to the GS system, the most often asked question that I receive is: Why? What is the purpose of this conversion action? If it's for control and oversight, we believe the Secretary has more control and oversight over CO employees today than he does even over GS employees. Is it to keep the locally elected committee system from hiring the county office staff? The county committees have never, have never been able to hire the support staff in the county office and for the last 45 years they have not been allowed to hire just anybody off the street as their office manager. They have always had to hire from a register of USDA employees. If it's to make FSA like the rest of Government, then the question is why, at a time when we want to look like the rest of Government and go to the GS system as the Commerce Department and the Defense Department looking to get away from the GS system, to look more like the FSA CO employee system, to find ways to simplify hiring, job classification and its separation policies, as well as coming up with a system that allows for the best and most qualified employee to be retained during a reduction in force, not necessarily the most senior employee.
    We know and understand the importance of trying to improve the U.S. Department of Agriculture at all levels, and we are keenly aware of the need to try to provide better, more equitable, more efficient service to the public. We want, as much as anybody here today, to have a USDA service center delivery system that maximizes the talents, special skills and abilities of the extremely limited number of employees remaining in the local USDA service center. We also believe that the democratically elected county committee is an integral part of all that is and has been successful in FSA and the agencies from which we came. We pledge to you that our members will accept the challenge of change. We will embrace the responsibility for an effective and efficient delivery of Government services to all farm and ranch families in America.
    Thank you, Mr. Chairman, very much.
    [The prepared statement of Mr. Sundseth appears at the conclusion of the hearing.]

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    Mr. GOODLATTE. Thank you, Mr. Sundseth.
    Mr. Vap, welcome, we'll be happy to hear your testimony.
STATEMENT OF GERALD L. VAP, PRESIDENT, NATIONAL ASSOCIATION OF CONSERVATION DISTRICTS
    Mr. VAP. Thank you, Mr. Chairman. I appreciate the opportunity to appear before the committee.
    My name is Gerald Vap. I'm a small business operator in McCook, NE. I am also a member of a conservation district board. We call them natural resources districts in Nebraska, and I have served on that board for many years now.
    I am here on behalf of the National Association of Conservation Districts and the National Association of State Conservation Agencies. NACD represents nearly 3,000 local conservation districts and the 16,000 men and women who serve as their directors. NASCA represents the 54 State and territorial State conservation agencies established under State laws to coordinate the activities and programs of conservation districts. Conservation districts are local subdivisions of State government, charged with coordinating and carrying out comprehensive natural resources management plans in partnership with State and Federal agencies. Our approach to conservation is based on using voluntary incentive-driven programs to help land users protect natural resources. The partnership provides assistance to more than 2.5 million operators, including local, State and Federal agencies, private industry, and other organizations. All together, districts and NRCS activities touch more than 70 percent of the entire land mass of this Nation.
    With regard to the civil rights, we applaud Congresswoman Clayton in her efforts to make things right with the Department of Agriculture. We strongly support ensuring accountability and equity in the delivery of program services, both USDA's and our own, to all people of this Nation. We applaud USDA's leadership in establishing the Civil Rights Action Team to review program delivery and provide equal opportunity for employees. We urge both Congress and USDA to do what is needed to promote diversity and program outreach in all USDA programs. We also recognize our own responsibilities in this area. We have launched initiatives over the past few years to address program outreach and diversity issues, as well. We made great progress in recent years, but we also recognize that we still have a long way to go. We are committed to the vision that every citizen in this country should be served by and have the opportunity to participate in our Nation's conservation programs.

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    With regard to USDA reorganization, regard to other proposals in your draft bill, we are sorely disappointed to see the reorganization issue is being brought up one more time. First, we believe the civil rights issues are of such importance that they should be addressed in a forum of their own and not combined with other issues, such as reorganization. Second, the 1994 USDA Reorganization Act gave the Secretary broad authority to make extensive changes in USDA's organizational structure, and in response to those wishes of Congress, he established NRCS and FSA to carry out specific functions within clearly defined mission areas. The purpose of that reorganization was not only to streamline USDA and increase its operational efficiency, but also to elevate USDA's natural resources mission to a much higher priority. We believe the Deparment's made very good progress in following the mandates Congress issued in 1994 and the process is continuing.
    Next month, USDA's bringing in an outside contractor to study and evaluate the effectiveness of its county-based agencies and make recommendations on improving the system. It would be counterproductive to disrupt this ongoing process by legislating changes that are neither warranted nor necessary. We do not believe there is any reason to revisit this issue at this point.
    Let me reiterate our position: America's conservation districts and State conservation agencies emphatically oppose merging NRCS and FSA. The two agencies have entirely different, but equally important, missions and responsibilities. It is critical that USDA maintain a distinct, natural resources and environment mission area and a strong, stand alone technical agency to carry out that mission. All of USDA's conservation programs are carried out cooperatively, through local conservation districts and provide a broad array of incentives to all private land users. A merger would narrow the NRCS focus and shrink the availability of its technical assistance to only a small number of Americans. Conservation districts welcome the opportunity to work with Congress and USDA to improve program outreach, efficiency and effectiveness and not just in USDA's operations, but in our own, as well.

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    We appreciate the opportunity to share our views with this committee. Thank you.
    [The prepared statement of Mr. Vap appears at the conclusion of the hearing.]
    Mr. GOODLATTE. Thank you, Mr. Vap.
    Mr. Hood, on page 5 of your testimony, you discussed procedures that may be used to get better representation on local committees. I wonder if you could elaborate on that and tell us how would the nominations for underrepresented groups actually be solicited?
    Mr. HOOD. Yes, if in a particular county that it was determined that there were groups that were underrrepresented, then those groups would be asked to submit nominations themselves, two of them. Those nominations, then would be voted on, at large, and which would guarantee two voting members to the county committee in those particular counties.
    Mr. GOODLATTE. Thank you. Mr. Vap, you mention the merging of these agencies—FSA, NRCS—would make an agency, and I quote you, ''whose natural resource focus would be secondary, at best.'' I wonder if you'd elaborate on that?
    Mr. VAP. In the days of shrinking budgets, if we have NRCS working for FSA, we question whether that focus on natural resources help would maintain the level that it is today, given other circumstances for the use of those dollars. We feel that maintaining a stand alone agency would give the USDA the stature in natural resources management that it deserves and it should be in.
    Mr. GOODLATTE. Thank you. Mr. Sundseth, do you know the number of former ASCS employees who are now involved in FSA farm lending programs?
    Mr. SUNDSETH. The number of employees?
    Mr. GOODLATTE. Right.
    Mr. SUNDSETH. You mean current employees?

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    Mr. GOODLATTE. No, no, the number of former ASCS employees who are now involved in FSA farm lending programs.
    Mr. SUNDSETH. Oh, I understand, I understand. Since we became FSA.
    Mr. GOODLATTE. Right.
    Mr. SUNDSETH. No, sir, I don't, although I know that in some States, there are no CO or county committee employees involved in any credit activities at this time. In other States, there is a tremendous number of CO employees involved. Oregon is one of those States.
    Mr. GOODLATTE. Do you know what accounts for that disparity?
    Mr. SUNDSETH. I believe there's two things. No. 1 is training and No. 2, there have been some decisions made that have precluded us from participating in the loan programs: the 90-day rule, conflict of interest issues. That, I understand have been resolved or at least have been clarified to some degree, but at this point, it seems like the decision has been made that only GS employees will be allowed to work with the credit program.
    Mr. GOODLATTE. Thank you. The Chair recognizes the gentleman from Texas, Mr. Stenholm.
    Mr. STENHOLM. Mr. Hood, what's the current process for hiring CED's?
    Mr. HOOD. At the county level they are trainees, that go through the program in each State, that are trained by USDA. Those trainees are then, a list, submitted to the counties that are in need of hiring a CED or replace a CED from that list. Then those CED's or trainees coming to the county for 2 weeks, 3 weeks, or a 30-day period of time. The county committees look at their work or how they facilitate the problems or the programs in that particular county. Then concurring with the SED of the State, the state executive director, then we hire a CED for the county. And it's always from a list of trainees that are being trained in each of the States.

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    Mr. STENHOLM. Would anybody at the table care to express their opinion as to whether that process is acceptable or whether it should be improved upon?
    Mr. SUNDSETH. Mr. Stenholm, I would like to respond. I believe that it is a good program. When I applied to be a county executive director, I applied with the SED, the state executive director. The state executive director and the state committee are the ones that hired me. That's the same state executive director that hires every GS employee in the entire State of Oregon.
    Mr. STENHOLM. Who elects or appoints the state executive director? How iabout the state committee?
    Mr. SUNDSETH. That's all through a political appointment process.
    Mr. STENHOLM. By whom?
    Mr. SUNDSETH. I'm assuming it's the President. Through recommendations from you, as Members of Congress.
    Mr. STENHOLM. Let me ask some followup questions, and anyone can respond, because it is extremely important that the views expressed in your testimony be harmonized as we pursue this policy issue. Tight budgets are going to demand that we do more with less. I was very encouraged, Mr. Vap, with your testimony as to the fact that you were, and I quote, ''looking where efficiencies can be improved through better cooperation and coordination.'' That's a step in the right direction. We have not had that in the past.
    Regarding Mrs. Clayton's bill, Mr. Hood, would the NAFEC support conversion of non-Federal FSA employees to Federal status if the county or elected committee, as earlier referred to, was converted as well?
    Mr. HOOD. I'll answer the question in this way. If Congress so decided that we should federalize everybody in the county office and if, in their wisdom, they had the proper protection for those county employees that were being converted, I think NAFEC would certainly look at it in that respect at that time.

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    Mr. STENHOLM Ms. Turner, what would be your response to that?
    Ms. TURNER. Talking about the federalization of the county committee themselves?
    Mr. STENHOLM. Yes.
    Ms. TURNER. The federalization? I would—that's kind of a rather difficult thing, I think, for me to respond to simply, because at this point, the county committee are elected and if they were Federal, I'm assuming then, they would supervise the county executive director, depending on how the office was structured.
    Mr. STENHOLM. Please don't feel compelled to answer a question unless you're comfortable doing so. I would appreciate you and your association getting back to the committee regarding the answers to these questions. You raise some very strong objections to the possibility of county office employees being federalized. We have a bill before us that suggests we do federalize them.
    Ms. TURNER. Right.
    Mr. STENHOLM. Some of us are very, very interested in maintaining local control or at least local direction under supervisory capacities. From a civil rights perspective, the record shows that we have not done nearly as good a job as we should do in avoiding discriminatory actions. It's not just the county-elected committees that have done this. The Farmers Home Administration, does not have a better track record than the county-elected committees. Is that correct?
    Ms. TURNER. I agree, yes.
    Mr. STENHOLM. So, therefore, we are looking at a system that is broken and needs to be fixed. However, it's unfair to characterize each of our 50 States and every one of our employees as having broken it. Keep in mind our budget problems, what is it that our farmers and ranchers want done for them, and how can we most efficiently deliver those services to them?

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    Ms. TURNER. Well, I believe they want fair and equitable treatment and service from us and our concern on the H.R. 2185, on federalization, of course, we favor federalization of the county employee. However, we don't favor, basically, the 3-year waiver. Let me kind of explain why.
    The credit program is extremely complex and I'm no way, under no circumstances, making it sound like the county employees cannot learn that credit program. I personally work with county people that are helping me in many aspects of the credit program and they're doing very well. I don't mean to, you know, downplay that the county people—employees—cannot learn the program, because they're learning it. But it's very complex and during that 3-year period, when we are talking of downsizing, there's a very good possibility that if that 3-year waiver goes through then it's going to put everybody—the newly federalized county people, as well as the other Federal employees that have the expertise in credit—all basically in rank where some of the people that have all the experience in the credit program will, in fact, be let go, where more inexperienced individuals will have to work the credit program and they won't have the people left—back in the office that know the credit program, that have the experience in the credit program. That's our biggest concern; that we're not going to serve those farmers, because the individuals that have those years and years of experience in knowing how to service the farmers, work through their cash flows, work on all the what-if situations. It's very, very different with credit than it is with the subsidy programs, and that's our biggest concern.
    Mr. STENHOLM. Mr. Chairman, I'll have some followup questions, but I don't want to abuse the 5-minute rule.
    The CHAIRMAN [presiding]. All right. I thank the gentleman. Mr. Bryant.
    Mr. BRYANT. Thank you, Mr. Chairman, and I apologize to the members of this panel. Obviously, at various times we're called to other committees and the votes are going on and I was away and really missed the opportunity to ask questions of the Secretary. I wish the Secretary were here or that I could have been here when it was my turn to ask questions of him. I am very disappointed at the turn that this USDA seems to be taking here which I think is contrary to what the American people have been talking about for the last few years of trying to send the power out of Washington back to the States, to the counties, to the communities, and here we have a program already that is out there where the rubber meets the road, where the farmers actually have to work and deal with real issues as opposed to what happens in USDA. Now, we're trying to go exactly the opposite direction of federalizing employees there which obviously is the first step to Federal control of Federal decision-making and sending power back the other direction, which is again, I think, totally contrary to where, I think, it ought to be.

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I understand concerns about civil rights. One civil rights violation is too many. Just as one crime is too many. But there are ways to deal with this, and I think, perhaps, better ways to deal with this. Let me try to put this into perspective of the number of the number now. I know a lot of numbers have been thrown around today, but as I understand it, of the 2,300 civil rights complaints that were backlogged at USDA as of earlier this year, 1,500, roughly two-thirds of these, were by USDA employees; and only 800 were from farmers participating in farm programs. Of these 800, about 241 complaints pending, were pending against FSA offices and their predecessor offices, one of which my colleague from Texas mentioned, FHA was probably most of these. Of these 241, 150 were credit cases, 40 for disaster assistance, and 50 for other types of cases. Of the 241 complaints against FSA, there was 130 cases for alleged discrimination on grounds of race, color, or national origin, and 167 cases of alleged discrimination for religion, sex, age, disability, and marital status.
Since that time, August 1997, this backlog has increased. An IG inspection, the letter is—I think it's public dated September 29—indicates that in regard to these complaints, the civil rights complaints, we found that any disparities that appear in loan-making and loan servicing, did not occur as a result of systematic discriminatory practices. However, we did find situations in particular locations that may have adversely affected individual minorities. I think what all this is saying and what I believe, is that the system, the process, is a good system and I don't think we ought to be changing it, federalizing our local people that are elected at a local level. I think we ought to be enforcing the existing laws. I know there's civil rights violations out there, but again, it's up to the system to work as it is, I believe, and it's, I think it's in certain areas, with certain folks. It's not the system, it's not the process, it's some individuals in that process that don't need to be in there and don't need to be making those decisions. But to surrender local control to Washington, I think is a big, big mistake and I know I'm going to be doing what I can as one member of this committee to oppose that entire concept. I think it's totally wrong and——

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     Mr. Hood, I came in late and I understand you represent the association that represents the committee members as, I guess, as they're presently constituted. Did I understand you to say that your association is agreeable to this federalization concept?
    Mr. HOOD. No, I didn't say we were agreeable. I said, in Congress's wisdom, if Congress decided that with the proper safeguards, it was something that we could live with. Right now I think that the system is working good as you have so eloquently presented, but as, if we could maintain the authority of the county committee system, I think that's priority No. 1 there. If the county committee system remains elected from their peers so that we do not loose the grassroots appeal that we have now at that level, I think it should stay the same. But I only mentioned that in the wisdom of Congress, if they decided that, with the proper safeguards, we would certainly look at it. I didn't say that we would be in favor of it, and if I relayed that, I apologize.
    Mr. BRYANT. Again, I just heard parts of it. My time is about up. Yes?
    Ms. TURNER. Mr. Bryant, I just would like to bring up two things real quick. First, as far as civil rights are concerned, I don't think anyone's hands are clean, that kind of alluding to the fact that Farmers Home Administration, and I think we're all equally guilty and we all need to learn to do a better job on the civil rights issue, and also as you're talking about the federalization, what have you, there are a lot of problems having a dual personnel system. There's hiring differences, job classification differences, there's different rating systems, promotion evaluations are different, the RIF procedures are different, and we're working out there in this menagerie and we're still trying to get that service to the farmer and it makes it extremely difficult on a field level, as well.
    Mr. LUCAS. Well, I would like to respond also. It kind of jointly combines a question Mr. Stenholm has. The reality out there from the people that I talk to, being president of an employee organization concerned about the customers of the U.S. Department of Agriculture. I care to differ with you. I see that the problem is great with the farmers of this country, women farmers. There is sufficient amount of reports, such as the D.J. Miller report, the U.S. Civil Rights Commission report, which clearly indicates, which disagrees with OIG's findings that there is no institutionalized discrimination going on in this country. If you talk to the people in the southern districts of this country in the southern region: Mississippi, Virginia, Tennessee, Texas, Oklahoma, Georgia. When you talk to those customers and listen to their pain and their suffering, they will strongly disagree.

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    And the other thing I want to make clear. When FSA, when the tension of civil rights was brought to their attention back in 1966, they said they didn't have a problem. They started with 100 cases. Then we found out that they did not have anyone processing the farmers complaints. Only two people processing employee complaints. Then we find out that we don't have 800 complaints in the Department of Agriculture coming from farmers and our customers; we have 900. What I'm trying to say to you, is that, we have the fox watching the henhouse, down at the Department of Agriculture, and that includes the office of general counsel, who stand in the way of processing and resolving farmer complaints, as well as employee complaints. It is mandatory, it is very vital that this committee take a step out of partisan politics and look at the reality of the pain and suffering of women farmers and black farmers in this country.
    Mr. BRYANT. Let me thank the panel for the comments and obviously, there is disagreement. I think when given the number of county offices, up in 2,500 offices, perhaps, across the country, and probably—literally millions of complaints—millions of transactions handled—that this number of complaints, while again one is important, but again, considering how many that are out there, it's not a large percent.
    Again, I'm not saying one is right, but I'm saying the process, I believe, as it is, is a good one, the system is a good one, and to remake it totally, given this record, I don't think is appropriate. We could probably sit here all day and discuss this, I think, and probably not agree completely on some issues and probably can agree on some other issues, but again, I thank the panel for being here.
    Thank you, Mr. Chairman.
    The CHAIRMAN. I thank the gentleman. Further questions of this panel by any members?
    Mrs. CLAYTON. Yes, I have not had an opportunity.
    The CHAIRMAN. Mrs. Clayton.

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    Mrs. CLAYTON. Thank you.
    The CHAIRMAN. Pardon me, Congressman Scott has joined us. Do you care to join us on the dais, Mr. Scott?
    Mrs. Clayton.
    Mrs. CLAYTON. Thank you.
    Mr. Hood, let me say that the county committees are indeed—I know a good many—I have 20 counties. I can't say I know every member on those committees, but I know a good many of them. I live rural, so I understand the importance of it and I understand the importance of local involvement. I want to—I guess this would also speak to Mr. Bryant, as well. It is probably not fair to say every county committee member is guilty of the acts that we have had, but it is with some resemblance of a trend. I don't know from Mississippi—could you tell me if Mississippi has diversity among its various committees and to what extent it has? And how you have achieved it?
    Mr. HOOD. Basically, most counties in Mississippi have three county committee members—well, let me start off at the community member level. In each LAA, or each area, there are community representatives that are elected from each of the communities, which there are representation from there. From those community members the county committees, three county committees are elected. Then, in addition to the three county committees in Mississippi, we have a minority advisor that is appointed—selected—from the county, from that particular county, to represent.
    Mrs. CLAYTON. I know a little bit about Mississippi, and part of background is planning, so I know that there—the whole—there are various counties that are really majority black, and so the incident of having a minority advisor, where if the democratic process worked, would you not say that you would, the natural process says that the majority would win, right?

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    Mr. HOOD. Yes, that's correct, and that's the reason our recommendation is if there are two underrepresented groups—in the county, to have the underrepresented nominees come from those groups, elected at large, which would guarantee two members, voting members, to be representing that county.
    Mrs. CLAYTON. Well, what's happening? It's just the opposite.
    Mr. HOOD. Well, what has happened is the way that the regulations are written at this particular time, because these community committee persons are elected through the election process.
     A lot of times it's hard to get nominations from those underrepresented groups. I've tried to get my own mother to be nominated and she refused, and so that's the problems that you would have. But if you had nominations coming from underrepresented groups, even though an underrepresented group may be a female, that organization could nominate somebody that they wanted to, whether it's female, or a male, or black or white or whatever, to represent them and they would get and still be represented.
    Mrs. CLAYTON. There are many counties that are in Mississippi that if the process was based on a majority, you would have two minority and one advisor, who would be white. But what you have is where a majority blacks live and farm, you having a minority sitting in as advisor so the system cannot be said be held up as working.
    Mr. Bryant, also, in all due deference, those figures you gave. You said not one person being discriminated you would see acceptable, I agree with that. But we would have a sense of outrage if we had, since 1965, case after case after case, and I think, inappropriately blamed on Farm Service agents, because they've been in business now doing credit for, I believe, only less than 3 years, so they're kind of the scapegoat because they're sitting there. But to suggest that the system doesn't need to be, you know, they said that when we had integration of schools, system didn't immigrate; they said that when minorities couldn't vote or women couldn't vote, the system didn't need to be. It's the system, sir, and we need to find where we don't blame the county committees, take them out of business; I agree we need a local involvement, but to deny that the system isn't broken, is to deny the depth of this problem, the longevity of this problem and the serious violation of USDA in not being the people's committee.

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    It is counterproductive not to look at the system; to piecemeal it. What we want to do, I hope, in this committee, we have different views as how we do it, but we hope we are doing something that we don't have to revisit this issue 5 years from now. We want to do something that is reasonable, that people can live with, that everybody can come and resolve. But not to suggest that you can't look at the system and make it better, is to suggest that we are turning our eyes, once more against it. I would just commend to your chronological pathway of this process, since 1965, there have been at least 10 published reports, and it gets bigger, and we are still in denial.
    Let me just say an apparent thing. I understand that, Ms. Turner, your opposition to the portion in my bill. I disagree, and I would think that the issue that's driving it is legitimate. The issue of survival of jobs is a legitimate one on both sides, but not to suggest that making these people Federal employees is going to put you in greater jeopardy, it doesn't seem that fair either, because if the Government is paying already for the dollars for their salaries and they are, indeed, subject to some Federal laws, why not make them subject to all the Federal laws and whatever RIF of downsizing, ought to be fairly applied, not indiscriminately applied. I don't want to see you out of a job, or those who associate with that; nor do I want to see the Farm Services if indeed they have been doing their work. Where they have been discriminating, where there are cases against them, they should not be grandfathered in; they should be held out and if they found that they're discriminated against, you make sure those cases are helped. But to suggest that we don't want to give those local employees the protection of whatever personnel in the RIF is to deny the same thing you're protecting for yourself. If they've been in there for 15 and 16 years, they should have that right, just as if you've been there 15 to 16 years.
    And to suggest that the local cannot learn the credit system, I just will commend to you the record that I just spoke to you, because I don't have enough time to tell you, it is Farm Home Administration employees, a federalized person, employees, who made many of these errors. All we are trying to do is look at the system and say, apply it everywhere. It was not committee locally, for most instances, it was another local committee, and it was a federalized local committee, but the mentality was that you were discriminating against that.

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    So, I just want to commend all of you—I'll get back to each one of you—but it would seem to be collectively, if all of you have inadvertently said that you support civil rights, we should look how we make this system work better for everyone so those farmers and ranchers who are out there don't have the extra burden of discrimination. They have already the burden of technology and globalization. You just make it extra hard when we have to have the burden of discrimination, as well.
    Thank you, Mr. Chairman.
    Mr. HOOD. Mr. Chairman, may I just add one statement, please in reference to the question she had?
    The CHAIRMAN. Quickly.
    Mr. HOOD. In reference to Mississippi and any other State, those States are following the handbook and existing authority, if not the Secretary of Agriculture would have come down on us very, very hard. So, we are doing exactly as the authority and that's the reason in our recommendation is that we change that authority to correct that. Thank you.
    The CHAIRMAN. Are there further questions of this panel?
    Mr. SUNDSETH. Mr. Chairman, could I make a quick comment on the last?
    The CHAIRMAN. Mr. Sundseth, please.
    Mr. SUNDSETH. I think Mrs. Clayton was talking about the system and looking at the system and so was Mr. Bryant and I think that's a valid point. But I believe the system can work if it's done properly. It's a matter of outreach, it's a matter of the county office employees, and I'm not talking GS and CO, I'm saying county office, county-level employees doing our job and getting out and helping to recruit and find the best and most qualified candidates. In my county, for example, I serve three counties out of one office. Eighty-five percent white male population as farmers.

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    My county committee has—I have 20 people on my county committee—I have five regular members and then I have alternates and community committee members, so I've got 20 farmers representing the farmers and ranchers in those three counties. Of those five regular members, three are women, and one is a Native-American. That's because we went out and we found the best and most qualified candidates and those people that elected those farmers and ranchers to the committee did so based on the knowledge and the background that we as county office staff tried to put out. We tried to let people know, we tried to do a biographical background to let people know who they were electing and who they were voting for.
    The CHAIRMAN. Well, Mr. Sundseth, you're from Oregon, you can make it work. I understand that. [Laughter.]
     And Mr. Hood may be able to make it work, as well, but from my point of view, it isn't working around the country and that's why we are here.
    Mr. LUCAS. Mr. Chairman, I'd like to make one comment.
    The CHAIRMAN. Very quickly, we have a vote.
    Mr. LUCAS. When we talk about accountability, I think one of the problems that exists with accountability or the lack of accountability. We have people being paid for penalties for discriminating against farmers. I think one of the big problems is that no one has been found guilty and even when they're found guilty, absolutely nothing has been done about it. I think one thing that has to happen, that these individuals in these committees, whether they're political appointees, whether they're career bureaucrats, or on the county committees. When we find and the investigation show that these people are guilty of discrimination, it's left up to the Department of Agriculture and the oversight of this committee to make sure those individuals are penalized and possibly removed for discriminating against the farmers of this country.
    The CHAIRMAN. Thank you. Mr. Stenholm.

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    Mr. STENHOLM. Thank you, Mr. Chairman.
    Mr. Lucas, I find myself in agreement with your last statement. There's one other Federal entity you should include in your response citing the unfair manner in which the system has worked since 1965. I've been a great supporter of the county-elected committee, in the belief that local people make better policy decisions than those made in Washington. The system has been imperfect in certain areas, and we are here to try to make it work better. Under our system, a farmer who was wronged at the county level can appeal the decision through a review by his or her peers.
    Clearly, the record shows that this has not worked as well as everyone would have wanted. There is one other entity, and that's our justice system. In addition, I have been a great supporter, of the Legal Services Corporation in the belief that disadvantaged individuals and farmers, who do not have the money to hire an attorney, will have access to legal services. And so I ask the question, where has the Legal Services Corporation been? Why have people like me, who support Legal Services constantly and consistently, had to try to get them to put their efforts into helping those people on whose behalf you have testified this morning? Where have they been?
    Mr. LUCAS. Well, I can answer that question by saying for the same problem that we have at the U.S. Department of Agriculture. Our legal services around this country, because of the cutbacks of the Congress of the United States, have kept and have lowly funded, not only civil rights throughout the Federal Government and Deparment of Agriculture, but they've also underfunded those legal, those legal systems out there who have historically in the past been very helpful to farmers and other people seeking their rights.
    Mr. STENHOLM. But even when we had funding at much higher levels, and I'm talking as a supporter of legal services, and I would gather that you and I could agree that maybe they're underfunded—but at least whatever funding was there, it ought to have worked more to the advantage of the people you who need it.

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    I want to go to one other question.
    Mr. LUCAS. I agree with you.
    Mr. STENHOLM. For all of you, here is our problem given the current budget decisions which have been made between the 1997 and 2002, we are going to have to RIF 11,647 Federal employees, of who 5,000 will be cut at the local level. We do not have a plan in place today as to how we make such cuts and still provide services to our local producers. We don't. Unless we can find ways to improve efficiencies at the local level, we will eventually have 900 less technicians for NRCS than we have this year. Unless all of us working together can resolve all of the problems you've testified to, we're going to have an interesting time. That's why the Secretary announced 150 job openings for credit officer positions this year. Qualified county employees and those currently in training should have hiring preference for those new Federal positions, especially since the Department supports conversion of non-Federal employees to Federal status. Do you agree with that, Ms. Turner?
    Ms. TURNER. Repeat that again, please.
    Mr. STENHOLM. There are 150 openings in the area of farm credit. Qualified employees, county employees, whether they're Federal or not should they have preference in receiving those jobs?
    Ms. TURNER. Should the county have preference over the Federal people? Is that what you're saying?
    Mr. STENHOLM. Are qualified county employees filling these openings, or are they going to somebody else?
    Ms. TURNER. It should go to the most qualified person, so if the county person is qualified, they should get the job.
    Mr. STENHOLM. Regardless of whether they're Federal or county?
    Ms. TURNER. Right. We have to serve the farmer.

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    Mr. STENHOLM. That's the right answer. Thank you. [Laughter.]
    The CHAIRMAN. And that's the right answer for this panel. Thank you very much. We'll go to the next panel immediately after this vote.
    [Recess.]
    The CHAIRMAN. Good afternoon. We'd like to welcome our next panel. Ms. Loretta—please help me with the pronunciation.
    Ms. PICCIANO. Picciano.
    The CHAIRMAN. Picciano. That's Irish.
    Ms. PICCIANO. That's right.
    The CHAIRMAN. Mr. Gary Grant, Mr. John Boyd, Mr. Phil Givens, and Ms. Anna Maria Codario.
    Ms. Picciano.
STATEMENT OF LORETTEA PICCIANO, EXECUTIVE DIRECTOR, RURAL COALITION
    Ms. PICCIANO. Hi, I'm delighted to be here today. I've submitted a lengthy statement for the record which reflects the work that the Rural Coalition has been doing with our community-based members, which includes 90 community-based groups who are working with Indian farmers, Smung farmers, African-American producers, and a whole wide range of constituencies of small farmers in this country. We've been working right now in cooperation with the Department of Agriculture to try and increase minority participation in all the programs and have worked extensively on the county committee elections.
    We appreciate you calling this hearing and giving congressional oversight and attention to this issue, because we believe that's very important and that there's still far more that needs to get on the record around this issue. We also thank Mrs. Clayton and all of the members of the Congressional Black Caucus who we've worked with for many, many years on this issue, and also Mr. Stenholm.

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    I want to focus on a couple of things today that we found in our years of work on county committees. No. 1, I'd like to submit to you, for the record, I don't know that you want to print it, but it's just information. It's a list of voters from Holmes County, FL, which one of the farmers compiled and went back and checked on the accuracy of the list. I did a preliminary count of what she found and I won't verify all my numbers, but there were about 740 people on this list. Out of that list, 32 were out of farming, there were 8 duplicates, and 22 people on this list were deceased. Now we understand that lists have to be updated, but one of them has been deceased since 1984, another for 9 years, and the ballots are still going out. That would be more of a problem if election participation was higher on county committees——
    The CHAIRMAN. Without objection, the clerk will pick up the list.
    [The information is on file with the committee.]
    Ms. PICCIANO. Thank you. On county committees: We can't show any documentation that the dead people actually voted, but what we can show, according to some information we've been able to obtain, is that in many counties, less than 5 percent of the people vote in the elections. There were about 85 votes cast in 1996 in one county in New Mexico and the data provided to this committee the year before indicated there are 3,000 farmers in that district, many of whom are Native-American and some of whom were denied ballots when they went in and requested them. In cooperation with Farm Services Agency, we prepared a voter registration form. We've been told they've submitted that to OMB for approval and it will take until the December 1999 election to have that ready. That voter registration form would allow people to go out and mail in their ballots instead of having somebody have to go in and request them and explain their existence.
    The committees are charged with doing outreach to farmers. In at least three counties in Alabama, the number of eligible voters remained unchanged in the last two elections. It's difficult for minority farmers to get on the list at all. About 80 percent of eligible American-Indian voters are not included in lists. During the elections, up to 25 percent of the ballots cast were disqualified and this was a higher percentage in the counties where there were more minority voters.

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    I guess that's the main point I'd like to say to you today is the real problem here that comes is that, it's almost a situation where, as if you were elected by the voters and you hired Dan Glickman to handle agriculture and then Dan Glickman was also in charge of the elections, and he was in charge of the elections along with the committee of who is going to be hired by the committee. There's some inherent conflicts of interest and I think when you look at the counties that have the very low voting rates, on the disqualification of ballots, if a ballot is incorrectly signed the committee can say, oh, I know this person, we know that's an OK ballot.
    On the other hand, conversely, if it's incorrectly signed and maybe they know the person and they don't want to count the ballot, they can throw the ballot away and it's all legal under the election procedures. So, I think that that's something that very much has got to be looked into. You know, in my mind, if I saw a report that said only 6 percent of the people vote, or 5 percent of the people voted, I'd be going down and finding out what's going on in that county and if they're about outreach and they can't get people to vote in the election, then are they providing information on all of the new programs of the Department.
    On Mississippi, we have a case of a Mr. Shaffer whose never been invited to a meeting. He has a certificate that says he is on the county committee and it's never been explained to him what he's supposed to do. FSA says he's a second alternate and FSA also told us that in outreach training, that they don't train the community committee members, who are alternates, in what they're supposed to do. So the question is: Why do we have them? But Mr. Shaffer believes he should be on the committee and we've asked to see the election results, because he campaigned very vigorously.
    I guess the point here is that there are people out there who are hired as county executive directors who may change over the years if the committee changes, who have been temporary employees and now we want to make them career civil servants without any evaluation. If they haven't run the elections correctly, it's going to be deeply discouraging to members who have cases, but have also been just denied services, treated badly over the years, to have those same people now hired as career civil servants. We do think that the positions need to be federalized. We also think there has to be some kind of a process. You're going to do a disservice to every good county executive director that's out there by hiring people who have not obeyed the laws or administered the system correctly.

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    I know that my time is out and I have much more to say, but, in short, I'd like to summarize a couple of recommendations and I'd be happy to go into them more extensively.
    One real key to this work is outreach. There needs to be a national outreach office, a national outreach strategy. Farmers have to know and we've been teaching farmers how to participate, how to do the nominating forms and finish everything that needs to happen. If that national outreach office doesn't go into effect very soon, it says the Department's not really serious about getting the system to work. We need to make positions Federal, but we need to look at the election procedures. We need to fund the civil rights office and have people in place that are also going to understand compliance standards.
    We should be looking at how well do the committees do? Did information actually go out? Are there minority farmers who are participating in that process? Are they in the programs? In the conservation programs there are very few minority farmers. Sometimes, there are no complaints simply because the farmers don't know about the programs and that was more true of ASCS and NRCS programs in the past. So, we need to go back to the 1990 law and look at the standards and measures and set them in place so that we know whether outreach is happening and I'll end my remarks there.
    [Due to its length, the prepared statement of Ms. Picciano is on file with the committee.]
    The CHAIRMAN. I thank you very much.
    Next we'd like to hear from Mr. Gary Grant, who is president of the Black Farmers and Agriculturist Association; accompanied by Mr. Sam Taylor. He is executive director of the Black Farmers and Agriculturist Association. Please, Mr. Grant.
STATEMENT OF GARY GRANT, PRESIDENT, BLACK FARMERS AND AGRICULTURIST ASSOCIATION
    Mr. GRANT. Thank you, Mr. Chairman, and thank you for allowing Mr. Taylor to sit with me.

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    The CHAIRMAN. Of course.
    Mr. GRANT. And thank you very much for holding these hearings. I come from Tillery, NC, a New Deal resettlement community and to have been—my family has been in a struggle for 25 years with the U.S. Department of Agriculture and I'm the son of a family farmer and a farmer. I would say to you that I have given you the short version of what I wish to say, and request, humbly, that the full version be included in today's hearing.
    The CHAIRMAN. Without objection, so ordered.
    Mr. GRANT. I am the first president of the Black Farmers and Agriculturists Association, a nonprofit organization of African-American farmers and agricultural professionals in 15 States. We have led the fight to unveil and reform the discrimination and lack of service problems at USDA.
    Mr. Chairman, black farmers and limited resource farmers want to have the value and relationship to America as does the historical legend of Virginia Dare, the economic value of the longhorn cattle, and oil wells of Texas, the staying power of religion and of democratic principles, and of Wall Street and the excitement of the World Series and the NBA. We know that you would agree that these icons are irreplaceable parts of the American canopy. Mr. Chairman, so are black farmers and small limited resource farmers. America has based it's strivings and victories on three basic standards: Owning land and property, education, and voting rights.
    Of these three standards, owning property has done more to create the power and economic base for the democratic republic. For white America, farming and owning property has not only been the mainstay of the American dream, but it has also been the means of justifying slave-owning and wealth and greed. In contrast, for black Americans, farming has been the mark of oppression and at the same time, the only true mark of pseudo-independence and unbridled stewardship.

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    Our purpose here today is to help outline and underscore the legislative needs and the human dilemma of this segment of America's working poor. Our purpose is to wake up your hearts and minds about the laws, the politics, the legislative process and policies, the legal apparatus, the media, the social scientist, and the agrieconomist all working to define the black farmer, to eradicate the black farmer, and to kill off the black farmer.
    Black farmers do not suffer from some temporary aberration, instead we are subjected to a persistent and degrading suppression of our living standards, our mental health and physical health and of our dignity and humanity. The black farmer has never lived in a spacious plantation mansion; the black farmer has never been considered an affluent county gentleman who lived a life of relative ease, noted to his stern obligation to uphold, sometimes, peculiar personal honor and pervasive Southern morays, while his black slaves did his work and bidding. Black slaves he bequeathed to his white children upon his death, like chattel and other real property.
    Moreover, it was the slave owning, the peculiar honor and pervasive morays that led to his ruling political parties and amassing great wealth and power. Black farmers lived in virtual shacks, had many children instead of slaves to help with his work, produced crops with the crudest of tools and machinery, and little or no financing, and literally worked himself and his wife to death. At the same time, other sections of the American populations, including this great body, must share the responsibility of developing solidarity in relationship which accommodate the very existence, the aberrations, and the needs of the black farmer and limited resource farmers.
    I would like to briefly thank my Congresswoman, Congresswoman Eva Clayton, of North Carolina, for special attention to this issue. H.R. 2185 is an admirable attempt to overcome a very systematic problem. Black farmers in many organizations endorse the implementation of H.R. 2185. However, we must be clear. H.R. 2185 is not the complete answer to these problems and a stronger, more bipartisan solution, by you, Mr. Chairman, is needed. We encourage you to introduce such a bill and these are the points we believe are crucial: We ask that you codify the recommendations to the Inspector General Report, titled, ''Minority Participation in the Farm Service Agenda, Farm Loan Program';' privatize the socially disadvantaged portion of the direct loan program. Let's face it, the FSA direct loan program has failed black farmers and the American people. We have become lonely, insecure, fatalistic, and invisible. We have been erased from the national consciousness.

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    Let's put a new loan program in place: the Beginning Guarantee Loan Program. The centerpiece of this program is the phasing out of the old program. Change the Farm Credit Act to make lending to minorities a priority, incorporate farm credit system's entity that exists to serve minority and small farmers; codify a long term outreach and technical assistance program; forgive the illegal debt, restore the rights to farms taken away in the 1996 farm bill; require USDA to put in place a new civil rights complaint resolution system and the points of this system: an associated general counsel for civil rights; a high priority on resolving complaints quickly instead of the States at the local level; separate final determination of discrimination authority. OCR should end up with complaint determination and issuing rules of final administrative review.
    In cases where the director of OCR finds discrimination has occurred, the Department should deliver the case and its ruling to the National Mediation Board. The Black Farmers and Agriculturist Association oppose federalization of county FSA employees; we believe local FSA committees should be reformed and integrated, but largely left in place; we support the Secretary's effort to codify the Civil Rights Action Team report. We support and encourage the office of inspector general to thoroughly investigate the management of FSA county employees and their management of minority farming operating loans. We encourage this committee to ask the General Accounting Office to investigate possible major improprieties in these accounts by FSA employees.
    Finally, Mr. Chairman, let us be clear, that the Government should not profit from its own discrimination. Therefore, the Congress would be acting properly to forgive the delinquent debt these farmers received while being abused by the United States Department of Agriculture. In addition, the answer to renewing USDA is in a strong, bipartisan bill from this committee, the Congress and the President.
    We invite the members of this committee to insert the draft amendments we have included in our testimony, the Limited Resource Debt Forgiveness Act of 1997, the Farm Credit Civil Rights Act of 1997, and the Small and Limited Resource Farmers Beginning Loan Guarantee Act of 1997. We implore you to include these legislative solutions in any bill this committee sends forward.

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    Thank you, Mr. Chairman, and members of this committee.
    [The prepared statement of Mr. Grant appears at the conclusion of the hearing.]
    The CHAIRMAN. I thank you, Mr. Grant. Does Mr. Taylor have a statement?
    Mr. TAYLOR. No, Mr. Chairman. I just want to thank you for holding these hearings and I'll be available for questions concerning documents, concerning the testimony of Mr. Grant, or our association, in general.
    The CHAIRMAN. Good, thank you very much, sir.
    Then we'll hear from John Boyd, president of the Black Farmers Association.
STATEMENT OF JOHN BOYD, PRESIDENT, NATIONAL BLACK FARMERS ASSOCIATION
    Mr. BOYD. Thank you, Mr. Chairman, Congresswoman Clayton, Congressman Bobby Scott, Congressman Stenholm. Before I start my testimony, I have some articles that relate to my testimony that I would like to submit for the record, Mr. Chairman.
    The CHAIRMAN. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. BOYD. Thank you very kindly.
    Mr. Chairman, and other distinguished Members of Congress, thank you for the opportunity today to testify before the Agriculture Committee. Today I bring a testimony of hope, years of struggle, and possibly answers to problems that have existed at the Department of Agriculture over for 130 years.
    I'm here to show the importance of the bill, H.R. 2185, is to the existence of the small farmer, socially disadvantaged farmer and the black farmer. I am concerned about the future of the black farmers and the ongoing mistreatment by USDA officials. I have been a victim of the second largest Federal bureaucracy known as the Last Plantation, and rightfully so. The U.S. Department of Agriculture has earned its reputation for being the most racist Government agency in history.

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    I've reviewed and studied the Civil Rights Action Team report. On page 100, Selected List of Past Reports and Recommendations, there are over 112 recommendations and reports. How many reports and how many recommendations do we need before we realize, ladies and gentlemen, that we have a severe problem? How much longer must we on go discrimination, racism and unfair lending practices? I sat here this morning and I watched Congressman Canady as he went out the door, pointing back into the hearing room, laughing. But there's nothing to laugh about, when the farmer has lost his home, when the farmer has lost his family, due to discrimination. Ladies and gentlemen, there is nothing to laugh about.
    The D.J. Miller Report confirms the fact that the county committee system discriminates against black farmers. Mr. Smith, your bill in section 202, Representation on County and Area Committees, states that:
    The Secretary shall appoint two non-voting members for each committee to promote the interest of socially disadvantaged groups.
     Mr. Chairman, we cannot enter the new millennium with 1940 rules and amendments. It is an insult to a group of people to deprive them the equal opportunity, the right to vote, on a county committee system. It is time for Americans to realize that we have become multi-racial, multi-cultural. When a topic is discussed during a county committee system and the call for a vote is heard, I should be able to raise my hand high, with dignity and respect. I am requesting the same treatment, no special favors. We demand the same voting rights today, ladies and gentlemen, as whites. If we cannot get the diversity and voting rights on these county committee systems, then the system should be abolished.
    Mr. Chairman, under your bill, Initiation of Investigation, line 20 through 23:
    The Secretary shall promptly assemble a team of employees of USDA to investigate the action of the employee.

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     Again, this is called the fox watching the henhouse. The process implemented by Mr. Reed and Mr. Wright is much more suitable for program complaints. The farmer will receive a fair investigation by an independent investigator.
    Over the past 130 years at the Department of Agriculture we have seen our identification change from Negro to colored to blacks to African-Americans, and we are still continuing discrimination against black farmers. Congress has laws to protect the rockfish and the bald eagle, but refuses to do anything about the disappearance of the black farmer. USDA has over 1.5 million acres in its inventory. If a farmer was forced into foreclosure and a finding of discrimination has been issued by the Department and their land is in Federal inventory, those acres should be returned to the farmer.
    We have experienced discrimination, racism, and unfair lending practices and simply wrongdoing by the Department. I've criticized Secretary Glickman for failure to deliver on a promise he made earlier this year at the CBC hearing where he said he would make sure that Black and socially disadvantaged farmers would be able to receive emergency funds this year. When those statistics came out by the Department of Agriculture, there wasn't one emergency loan in this country made to a black farmer, and, ladies and gentlemen, that is a national disgrace. A national disgrace on behalf of our Federal Government. I have held several protests in an attempt to bring national attention to the plight of the black farmer. These rallies were held on December 12, 1996 in front of the White House, April 23, 1997 at the Department of Agriculture, September 22, 1997, at the White House. There have been several hearings, on April 23 and July 17, and even this hearing today.
    The time has come for action. For action. Secretary Glickman has admitted discrimination exists in program delivery. Dr. John Hope Franklin said it's the first occupation for blacks was farming and it will be the first occupation to become extinct for blacks. Senator Charles Robb, a Democrat from Virginia, said discrimination is particularly offensive when practiced by Government employees against their coworkers and customers. Former Secretary Mike Espy acknowledged that the racism at USDA is pervasive, real and systemic and why can't our farmers be treated fairly by our own Federal Government. Congressman Bobby Scott, who is here today, a Democrat from Virginia, who spoke at the White House rally, stated that black farmers are facing blatant institutionalized racism at USDA and that fact has been documented many times again.

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    It is a duty of our elected officials to step up and rectify the wrongs done by our Federal Government and begin to make some rights. I'm a firm believer that if these things had occurred to any other race of people, it would have been dealt with years ago.
    Black farmers will never receive fair and equal treatment as long as no one is held accountable for their actions at USDA. For these employees who have been found guilty of discrimination, there is no room in our Federal Government for people who continue to discriminate. At the July 17th hearing, Secretary Glickman was asked the question, how many employees were fired for administering discrimination? He replied, none.
    I've made several attempts to secure a loan for home repairs and this application was thrown in the trash can, Mr. Chairman. An example of the kind of discrimination that is so rampant throughout the country at the Deparment of Agriculture.
    If we do not rectify these problems, at the Department of Agriculture, we have failed as legislators, we have failed as leaders of this country, and we have failed as citizens of this great Nation, I submit to you respectfully.
    Thank you, Mr. Chairman, for the extra time.
    [The prepared statement of Mr. Boyd appears at the conclusion of the hearing.]
    The CHAIRMAN. Thank you, Mr. Boyd.
    Now, we'll hear from Mr. Phil Givens from Oklahoma, and I'll let him tell you the city and town he's from.
STATEMENT OF PHIL GIVENS, TAHLEQUAH, OKLAHOMA
    Mr. GIVENS. I'm from Tahlequah, which means two in Cherokee.
    The CHAIRMAN. Can you spell it?
    Mr. GIVENS. T-A-H-L——

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    The CHAIRMAN. No, never mind. [Laughter.]
    Mr. GIVENS. I really don't know what to say. I've never been lost for words, but in baling hay yesterday, when I was notified by Mrs. Clayton's office that I'd have the opportunity to come up here and speak, I'm just a little awed that we don't have any Native-American representation here.
    Let me tell you a little something about my history. I'm half Native-American and half African-American. I live on the original allotment ground in Oklahoma that was force-marched on our people from Alabama and Georgia, meaning that we were removed on the Trail of Tears, not only the Native-Americans, but also the slaves. We're a lot closer to the land than any of these people that have spoke at this table. That's what makes Native-Americans unique, our land.
    It's real clear from the conversation I've had in this room today with some people, we're more than your underrepresented customer; you don't have any employees that even know how to even treat me, deal with me, or enhance program delivery with Native-Americans in Oklahoma. They've admitted that in USDA.
    In looking at Mrs. Clayton's bill, I see it as a good bill, no bill's perfect, but for this reason—I hadn't looked at your bill, Mr. Smith—but it brings accountability. Not only to the farmers, USDA, but also to the taxpayers. If we have FSA, NRC, rural economic development, and USDA employees out here discriminating against us, it's going to cost the taxpayers if we file a civil rights complaint and if it's properly investigated and were found to be in the right, that we have been discriminated against, they're going to pay, the taxpayers. In her bill, I see accountability. I have faith in the Federal Government.
    I do not have faith in USDA or the system that's in place for this reason: We have encountered racial discrimination in Oklahoma since the beginning of time. We had a CED in July, call me racial names, told me I could go to Washington, DC, and tell all the ippity, uppity blacks and called them by name; our civil rights director here, Lloyd Wright, our Assistant Secretary, Pearlie Reed; and that really upset me. What's still troubling me, is that man is still working in that office to this day. Had Mrs. Clayton's bill been in place, I feel like Washington, DC should have had that man removed by now. I'm not really up on her bill, but what I liked about it is that Mr. Bryant, over here—I guess he's a confidante—was upset about targeting money towards people. You know, this country didn't have a problem with our color when they sent us to Vietnam. I mean don't have a problem with me being black and Indian now. I mean, this bill is important to us in Oklahoma and Indian country, because it's going to bring some type of tool or mechanism that we need that's not in place now to correct some wrongs. In my impression, Congressmen can do that. I mean, the Federal Government has told us all our life, being an Indian, what we can and can't do. We can't borrow money through FSA because there are land restrictions; we can't vote in the county committee elections.

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    So, I don't know. I sit here, I'm getting mad and getting upset, but I hope this bill is taken real serious, because it has some funding in there for socially disadvantaged people. I feel like somebody felt this bill would just target just the black farmers. I'm half black and half Native-American, I'd like to get a piece of that bill. But we have white females that are good farmers; that bill is also going to address their status. There's nothing in that bill there, that I see, that could say that we're going to allocate so many billions of dollars to just black, Hispanic, Native-American.
    We just want to do some outreach. Part of her bill has outreach, technical assistance. I'm ashamed to tell you all that I've flown up here 59 times in the last 2 years just to obtain outreach, technical assistance and program delivery just because of racism.
    Now, if the Secretary can administratively put some people on board, I'm all for that. A good example, we had to meet with Deputy Secretary Rominger, Pearlie Reed, Lloyd Wright, everybody in USDA, to get a Cherokee Indian put on the State FSA committee. That just happened last Tuesday. We have never had a black or Native-American on the state committee. We've only had two in the whole time of Oklahoma, blacks on the county committee. I farm 2,900 acres and I feel like I was qualified to sit on the county committee and I've never had that opportunity. We had to have the Secretary of Agriculture in Cherokee County, make him have the election process held three times, just because my wife decided to run, who is a full-blood Cherokee, and my daughter.
    So, racism is rampant and the only way you can control, in my opinion, racial discrimination, is to hold people accountable. And I think this bill will make the county committee employees accountable. Right now, we don't know who can fire this man. He's hired by the county committee. They should have fired him 2 or 3 months ago, but USDA's got to decide who's got the authority to fire this bigoted person. Now, if you don't think that's the worse case scenario, he admitted saying this, we had witnesses, we approached the civil rights director back there, he immediately sent a team of investigators to Tahlequah, OK, but for him to do his job, this committee needs to come up with some money to strengthen our outreach component and also our civil rights component.

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    So, what I'd like to do in ending, is thank you all for the opportunity to visit with you on this bill. Mr. Smith, I'd also like a copy of your bill, but right now, speaking for Native-Americans and what few black farmers we still have left in Oklahoma, her bill would put us in position where we could at least participate. Hell, we'd be just satisfied with minority advisors. Mr. Boyd here wants a full voting member. If we could just get a minority advisor, we'd be tickled to death.
    So, with that, I thank you.
    [The prepared statement of Mr. Givens appears at the conclusion of the hearing.]
    The CHAIRMAN. I thank you, Mr. Givens.
    Now, Ms. Codario.
STATEMENT OF ANNA MARIE CODARIO
    Ms. CODARIO. Mr. Chairman, and members of the Agriculture Committee, I want to thank you for giving me this opportunity to make a statement to you.
    My name is Anna Marie Codario and I live in Atlantic County, NJ. This is a very important hearing because you are considering legislation that holds out hope for small farmers, who, like myself, have not been treated fairly by the Government.
    Mr. Chairman, if you would permit me, from time to time, to deviate from this text, because it's an extremely emotional issue with me.
    I was 41 years old when I had the dream of being a full time farmer. I'm now 61 years old and for 20 years have lived a nightmare because of what has happened to me, because of the Farmers Home Administration and the USDA. If there had been an Eva Clayton in the Congress 20 years ago, I wouldn't be sitting here testifying. I'm a living example of what happens to a small farmer who happens to be a divorced, Italian-American. I've been locked out of a system—and I put this in polite words in my text—run by members of self-proclaimed club, a club that rules by an outdated mentality, because of who I am, not because of what I can do. I was denied the right by the U.S. Department of Agriculture, to be a successful farmer.

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    The history of my discrimination began in 1977, when I decided I was going to buy part of the family farm, the farm that was established by my immigrant father and grandfather. I couldn't even get an appointment with a county supervisor. The appointment was made through the president of an independent lending agency. In retrospect, I can see why that was done. I began having difficulty at this meeting, but I finally got the loan at the end, even though I was told, ''What do you know about farming?'' I was born and raised on that farm and worked very hard on it. This discrimination continued through the winter of 1978. My brother applied for an emergency loan and he listed me as a creditor. I steadfastly believe that if he hadn't listed me as a creditor, they would not have taken as long to grant the emergency loan to him. As it was, I received the loan or my money in July 1979, too late to recoup any spring crops and too late to make money on any of the summer crops. We had a county supervisor at the time who came to me and told me I might qualify for a moratorium. By the time I was able to meet with this gentleman, who by the way was a minority himself, he was transferred to another part of the State, and the new supervisor refused to meet with me, as did the district director and the state director. My congressman had to intervene to have me have a meeting with these gentlemen, even though the papers that I received stated that I could have a hearing, if I so requested. We attended a meeting, my brother and I——
    Excuse me, a minute, please. I told you this is an emotional time for me and I really am requesting your indulgence.
    My brother and I went to this meeting and when I asked the state director about a moratorium, he said no such thing existed. I now know that there was one that was passed in 1979 by Congress. I was told that I had to pay my arrears immediately. I had been current with $9,000 a year payment to my first mortgage, but I was in arrears with Farmers Home. When I was told I had to pay this or foreclosure would follow, I paid $4,000. That $4,000 should have gone to my first mortgage, and within 3 months my first mortgage foreclosed. My brother on the other hand was at the same meeting. He was given a month to come up with a plan, 2 years to complete the plan, and never did complete the plan; he is still farming. I began a letter writing campaign and this was my letter writing campaign: I wrote to two Presidents, several Attorneys General, Congressmen, two Secretaries of Agriculture; getting nowhere. I sent evidence to everyone, everyone, and when you have a paper in your files that states, let's get ready to move because she doesn't seem to have the money. When you see documents altered and you send these documents to the Secretary of Agriculture and you are told they see nothing wrong, then we have a serious problem.

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    I filed a law suit pro se. I'm not an attorney, I don't know the red books from the green books. My case was thrown out of court, not because the employees weren't guilty, but because I filed incorrectly. As a result, every answer I got contained ''well you filed a lawsuit and it was dismissed.''
    Mr. Chairman, this is the first time I have ever come close to my day in court, right here, in the House Agriculture Committee. Thanks to a hearing I watched on April 28, 1997, when I saw Congresswoman Eva Clayton and I saw Congresswoman Waters, and I saw a dynamic young attorney by the name of James Myart. I wrote to them and one letter did what all this correspondence couldn't do. The President—excuse me. I'm normally not nervous when I speak. The President wrote to Dan Glickman to have an investigation and I was ecstatic. Dan Glickman sent me a letter saying he saw nothing wrong.
    I just think that there is a very serious problem and if we don't have a bill passed, such as Congresswoman Eva Clayton has presented, there will be more women like myself, who's going to live a living hell.
    Now, I have presented a very modified written statement, but I have an affidavit that I would like to present, but the affidavit isn't very good without all the correspondence and all the correspondence isn't very good with all the exhibits. So, Mr. Chairman, I don't know how to do this.
    The CHAIRMAN. Well, I have a suggestion.
    Ms. CODARIO. Yes?
    The CHAIRMAN. The Clerk will pick it up and make it part of the record.
    [The information is on file with the committee.]
    Ms. CODARIO. Thank you, and thank you so much for this opportunity.

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    [The prepared statement of Ms. Codario appears at the conclusion of the hearing.]
    The CHAIRMAN. You're welcome.
    Mr. GIVENS. Mr. Chairman, I have a question. I don't know what the procedure is, but I need to get something clear when I go back home and speak with the rest of the tribal leaders. I'd like to have a little information from Congresswoman Clayton and views concerning this bill, if I could. We quit baling hay, sold a little hay in a cord to come up here, and I think I ought to have a little explanation on this bill or either you have a bill in person. Took 400 bales of alfalfa hay to get up here.
    The CHAIRMAN. Mr. Givens, Mr. Stenholm and I know exactly how many 400 bales are, because we've been there. So, Mrs. Clayton's bill is available for your perusal, my bill is available, and now we're going to have an opportunity for the members to ask questions. Mr. Stenholm.
    Mr. STENHOLM. I would begin by attempting, in my own way, to answer your question, Mr. Givens. I think the chairman has made it very clear that he intends to move legislation along the lines Mrs. Clayton has taken, or his bill or something else. The legislative process works in such a way that your entire written suggestions will be made a part of the record, and will be considered by all members of this committee. This committee is going to make every attempt to resolve the questions which have been raised today. Now it may or may not satisfy everyone, but we will try our best to do so. I certainly will, and I believe that's the chairman's intent.
    Mr. Grant, you made the statement that if the farmer was forced into foreclosure and a finding of discrimination was issued by the Department and their land is in inventory, those acres should be returned to the farmer. What if it is determined that there is no discrimination?

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    Mr. BOYD. I think I made that statement, Mr. Stenholm.
    Mr. STENHOLM. I believe you're correct, Mr. Boyd.
    Mr. BOYD. Could you ask the question one more time?
    Mr. STENHOLM. Yes, you state, if the farmer was forced into foreclosure, and a finding of discrimination has been issued by the Department and their land is in inventory, those acres should be returned to the farmer?
    Mr. BOYD. Correct.
    Mr. STENHOLM. What if there was no discrimination found, after a thorough investigation by the proper authorities?
    Mr. BOYD. Well, I guess the farmer has no other choice, but to take his fight to court. What I'm trying to say is, apparently there is 53 percent of this land in inventory, that's formerly black-owned land.
    Mr. STENHOLM. No, I'm asking specifically your opinion or anyone else's at the table. If there was a thorough research regarding discrimination and there was no discrimination found, how should that farmer be treated?
    Mr. BOYD. The farmer should take his case to court.
    Mr. STENHOLM. That's his choice.
    Mr. BOYD. Right.
    Mr. STENHOLM. But I'm asking your opinion.
    Mr. BOYD. That is my opinion. That farmer should take his case to court.
    Mr. STENHOLM. Mr. Grant, I believe you had an innovative suggestion for some amendments to this bill. Privatization of direct loan program. I just had a chance to look at that briefly. But I guess a question that I need to have from your perspective: If you were sitting on the loan committee, making the determination of eligibility, what criteria would you tend to use for determining eligibility for a 100 percent guaranteed loan?

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    Mr. GRANT. Mr. Stenholm, I think that the criteria would probably, that is in existence, would probably be OK. What we find is that, because we have this institutionalized racism and discrimination, that it continues to be a part of because the agents that have perpetrated the crimes continue to be at the head, therefore, the farmer is not allowed or does not have a real advantage in his application being looked at from very objectively. And I think we can work on that some, as well, but to have everything assured at 100 percent would be much better than what we do now in entrusting it with these agents. Sam may want to respond, as well.
    Mr. TAYLOR. If I may followup there, Mr. Stenholm, the key with the 100 percent guarantee loan program is that, as you know, currently with the existing program, the Government can never reach the volume, the amount of funds needed in comparison to the volume of applications or people who would like to apply. We talked all morning, of course, about the budget restrictions that the Congress is currently under. We have to come up with a new system. The current system of the old program was put in place when we did not have as many credit options available to farmers, put in place during the 1930s and 1940s and we've maintained it through the years. Now we have the farm credit system; we have to look at all the available options. If you look at the current guarantee program, minority farmers, black farmers, are almost nonexistent in that loan portfolio. They are almost nonexistent in the farm credit system portfolio and so we have to make indentures and I think the regulation says black farmers and minority farmers, small limited resource farmers, should be graduating from the direct loan program into guaranteed lending and that has not happened.
    Yes, sir?
    Mr. STENHOLM. In the context of this question, it's no secret that we've got a terrific delinquency problem in Farmers Home. Ten to $12 billion has been loaned to farmers and cannot be paid back. We must consider the issues of the beginning farmer and the disadvantaged farmer as described by the folks here today. Perhaps there isn't time to answer this question, but I encourage you to think about it and get back to me. We will never satisfy the desires of everyone in the United States who would like to farm. There's not enough money out there; we just can't do it. There must be criteria for deciding reasonableness of a loan repayment, I would hope. What kind of criteria might we use? Recognizing what has been stated about discrimination, what kind of criteria might this committee consider that would be helpful in making changes, that would be acceptable to the citizenry as a whole?

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    Mr. TAYLOR. Sir, I thank you, and if I may followup just very briefly. I think what you find is that the qualifications and the eligibility for small and limited and socially disadvantaged farmers as far as eligibility, are excellent qualifications written in the existing law. The problem is that the local county committee system and especially the local county credit supervisors have not enforced or have abused the system. So, it's very important that we put into place those proper structures that would not allow that to happen. The second thing is local, as far as feasibility in determining eligibility to farm, that's the greatness of the local county system, and that's why in our testimony we support keeping the county system in place. Obviously, it has to exist under a different structure, more integrative, more reform, less room for racial tendencies to come out and that sort of thing, but we're not saying that we don't have a great local county structure out there; we do, but it has been abused, that has to be rooted out.
    Ms. PICCIANO. Mr. Stenholm? In terms of the standards, I think, No. 1, it's really important to recognize that we shouldn't assume offhand that minority farmers are any less able to meet any criteria that are set——
    Mr. STENHOLM. That was not in my question.
    Ms. PICCIANO. Right, I understand. I think the point is that, I heard that a state director recently said at a meeting, we don't want the minority farmers to apply for the program, because then we run out of money and they're disappointed. I think the thing is, that there should be qualified standards, but we're going to probably have to have some different standards for small and beginning farmers and some multi-year programs to recognize the reality that they may, in fact, be able, and we should keep statistics, to repay that loan as well as anybody else, but they have to have the full mix. If they can't get into the CRP program or they can't get into some other program, it all affects their loan performance. So, I think we need another kind of program with very good standards, but that deals with that particular situation.

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    Mr. GIVENS. Mr. Stenholm? Since I am a farmer and since I do farm 2,900 acres, I have no problem with the policy procedures that's in place when determining eligibility to obtain a farm loan, as long as we have a civil rights component and a civil rights director that has a tool and a mechanism to enforce what's on the books. Now I have all respect right here for Mr. Wright, but if Mr. Wright can't do his job, then yes I do have a problem with the criteria in place in determining eligibility. And getting back to her bill, unless Washington, DC has direct supervision in my State, in my world, Indian country, I have a problem with the county committee system and the determine eligibility. Just because I live on Indian land, in an Indian home, that makes me not as good a farmer as my white neighbor and I have a problem with that when he's farming 100 acres and I'm farming 2,900 acres. Going in front of the county committee, well that's Indian land, it don't count. We spent $6,000 just trying to get a conservation plan on Indian land. Had to fly up here and see Mr. Wright to get some relief.
    The CHAIRMAN. OK, thank you, Mr. Givens. We're going to have to move along.
    Mrs. Clayton.
    Mrs. CLAYTON. I want to thank all the panelists for your varied contribution, your unique presentation from looking at the election procedures. I was struck by the fact we do need to look at that, I'll just make that observation that's in that case. I want to recognize my constituent, Mr. Grant, who is from my district and say welcome to the committee.
    But even as we look at H.R. 2185 and believe that it is indeed a good bill. You know, I am biased towards that, but I would have to recognize to all of you, it's not complete. I'm not suggesting that it is complete. It's a first step and could be stronger. One of the areas we have to do more is recognizing that it's not just really just the minority farmers or because of discrimination. It is small family farmer, it is the disadvantaged farmer, in terms of getting credit. We have to recognize credit is a serious problem for small farmers. The ability for small family farmers to stay competitive, not only includes the ability to get money, but it also includes the ability to be competitive in the marketplace, to have the right inputs, to have sufficient collateral, it means it has to recognize what it means in this whole area of globalization, vertical integration, contract from all of those things impact small farming. Then when you add to this the whole burden of, obviously, discrimination, rather, discrimination because you're female, or rather because you're Indian, or because you're Hispanic or black, it simply means that credit is a constant, ever problem for small farmers.

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    Mr. Chairman, I just wanted you to know, and my colleagues, that I recognize that this bill isn't complete. It doesn't answer everything and for that reason we are drafting up something, another bill, and that bill I hope you can join me. I need your help, Mr. Chairman. I'm soliciting your help, publicly. This ought to be a bipartisan approach. It's called Small Farmers Relief Act of 1997, and what that does is simply say that debt forgiveness isn't new in this country. Debt ought to have where there's been flood and disaster or really severe downturn to make it almost impossible and there has been a series of markets where you have tried and not been able to fulfill that, you ought to find a way where debt forgiveness ought to be looked at. As well as look at where discrimination is involved in that. So, you would broaden the opportunity for debt forgiveness. You wouldn't just limit it because there is discrimination, but you also recognize that debt is a burden of small farmers.
    So, I hope I can get your consideration. Are we communicating? [Laughter.]
    The CHAIRMAN. Mrs. Clayton, you know quite well that this committee has never, ever held a hearing on this issue.
    Mrs. CLAYTON. Oh, you're right. You and I are communicating.
    The CHAIRMAN. So, don't ask me whether I'm cooperating. [Laughter.]
     Please, I'd be happy as always. I respect you, I respect your expertise in this issue, I would be delighted to look with you and visit about that bill. I've not seen it, as you well know.
    Mrs. CLAYTON. I haven't written it yet. [Laughter.]
    The CHAIRMAN. I will——
    Mrs. CLAYTON. I want to write it with you.
    The CHAIRMAN. And I pledge to you this. That we will work together to try to find a way that we can have legislation, which I believe is essential that we move forward with legislation. I don't think this issue can be fixed without it, and I want to work with you to see if we can't find agreement to move forward in this area.

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    Mrs. CLAYTON. Thank you. I appreciate that.
    I also want to just acknowledge, as the chairman indicated, that indeed this is the first hearing ever on a bill, probably since 1965, I guess we have had reports, reports, reports, Secretaries, Democrats, Republicans; and it should be noteworthy to recognize, in 1997 is the very first time we have had a hearing.
    It also should be noteworthy that women are also part of that process and that we should look at the broadness of discrimination. It's so easy to dismiss this problem: Oh, it's just a Southern problem; it is just North Carolina, Mississippi problem. But also, we should look at this problem, as the way we look at it, making it fair for both the system, for the people working in the systems, as well as the farmers. That means the employees, that means the employees who've been discriminated against, but also meaning the employees that have to implement that system and I know some of them are out there and I just want to make the observation that those who feel that bringing in Federal persons is going to threaten their security, we need to find a way where it doesn't do that. Those farmers who have come to me and said that I am federalizing the fox whose watching the henhouse, I want to suggest that we need to find a way where those individual employees who have violated the law, are not rewarded by bringing them in, but if they're found to be guilty, they should be dealt with, but I think we would be doing the reverse if we indiscriminately painted everybody with a brush as if they had discriminated. So we have to find a way where we approach this in a reasonable way, because we want to end this system, we want to end this process that allows us to keep revisiting. I think Chairman Smith and I want to at least make history by saying at least we looked at it and collectively the committee wanted to do something about it.
    Thank you, Mr. Chairman.
    The CHAIRMAN. I thank the lady. Mr. Scott, do you have questions of this panel?

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    Mr. SCOTT. Thank you, Mr. Chairman. I appreciate your courtesy and I won't trespass on your courtesy. However, I would like to say that I appreciate the fact that you're holding the hearing, it shows your interest, and I think the testimony from the witnesses and the evidence and all the reports speak for themselves. This is, as has been indicated, the first hearing. Mrs. Clayton has indicated the shortcomings of her legislation, but I think we can make a major step forward in addressing many of the complaints and concerns. And again, I appreciate your courtesies and thank you very much.
    The CHAIRMAN. Thank you. Mr. Goode, do you have further questions?
    Mr. GOODE. Mr. Chairman, I want to thank you, because I know you had many requests from many to speak and I just want to say thank you for all the consideration that you showed in connection with this hearing.
    I would just, and I don't have a particular one to address the question. We've heard a lot about the loan situations, but what about CRP signups and some other areas you have complaints about, alright?
    Ms. PICCIANO. I just talked with a farmer the other day, from Alabama, a black farmer, who reported he encouraged his neighbor to apply for the CRP and there was a delay on the approval of the CRP participation on which his farm plan was based and he ended up going out of business and immediately, the next year, a white farmer bought the land and was accepted into the program. You know those are the kinds of things that are problematic. I went to the press conference where the CRP was announced and I asked the Department what is your way of reaching and making sure that minority farmers receive this information, and they said, well that's why we invited you. We deal with many different clients, we deal with Asian farmers, black farmers, but we only have four employees, and you know, there's 8,100 county committee people who are supposed to be doing that work and what's happening is the farmers don't have the basis of a discrimination complaint, because there's no standard that says that outreach has to be done to inform them about that program, and as a matter of fact, there's an inherent conflict of interest because if more minority farmers apply there may be less funds for everybody else.

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    So, it's a problem, it's a problem in the State conservation districts. Indian farmers, in particular, are not served by extension services, and by some of the conservation districts and that's another area the committee should also look at. But it's a problem in all program areas and just because you're not receiving complaints doesn't mean that there are not significant problems.
    Mr. GRANT. I would also like to add, if I may, and even reflecting back to the earlier panel, black people in this country have been domicile, to a point that they were, you know, you don't make complaints, and then we're also asking how many of these complaints were put in the trash can, because of the people that they were being made to. So, not only the loan program, but all of the other programs where we are not informed and that there. I say that we're a special people, we were brought here under special conditions, we have been special all of our lives and there is going to have to be some special component that allows that.
    For example, when we look at the educational level of our black farmers, we find that they don't read. Sending them a paper is not going to tell them what kind of a program is going on. We need to find ways that these agencies are getting the information and churches within the community that can help the farmer to understand that as well. So, and that's not just with the loan program, but that is with all of the programs that are put out there for us.
    Mr. TAYLOR. I think, Congressman, just to followup, if you may notice in the Inspector General's most recent report that we outlined, the one on minority participation in farm programs, he specified that should be specific measurable function of the new outreach office or any outreach effort by the Department. Obviously, we concentrate here on FSA, but obviously, in NRCS and in many of the conservation plans there are some county offices that have county employees in NRCS, that are driven by black landowners on their way to other farmers for years. Their entire career and never set foot on it to offer a conservation plan or to work in that context.

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    Finally, or one final point, that we certainly want to make sure that the committee takes up, is that many minority farmers feel that there is outright corruption in many of the county supervisors that are managing, supervise bank accounts for OL loans, and that oftentimes, in several States we've gotten reports, may be in flat out fraudulent actions, because of the undereducation of the client that they're representing. We invite another OIG investigation, we invite the Congress to use its powers through the GAO to find out what is the relationship that is going on there and to make sure that real justice has been done. The department has not done a good job of auditing FSA employees in relationship to those accounts.
    Mr. GIVENS. Let me say something on that. I would like to see whatever bill comes out of this hearing have some money for outreach. A good example in Oklahoma, when it comes to CRP, EQIP or AMPTA, not one Native-American in Oklahoma, not one tribe, has ever been able to participate until we flew up here 2 months ago and had the civil rights director tell us about the program. Now, Mr. Wright, if I'm saying something wrong, correct me. Was that not the case? That's hard to believe. A whole State of Native-Americans and not one Native-American got to participate, CRP or EQIP, and it took four plane trips up here, and for the civil rights director to tell us that our tribe and tribal members were eligible for these programs. Where was outreach, where was FSA, NRC? That's scary, when you're talking about a whole State of people has never participated in EQIP, AMPTA or CRP.
    Ms. PICCIANO. Mr. Goode, and the committee, I think there are two things here——
    Mr. GOODE. Let Mr. Boyd say something here.
    Ms. PICCIANO. Oh, I'm sorry.
    Mr. BOYD. Thank you, thank you very kindly.
    Ms. PICCIANO. I'm sorry, John.
    Mr. BOYD. I'd like to thank you, Congressman Goode, for writing a letter to the chairman. I asked that I be able to testify today, and thank you for that. Outreach is a crucial part of the existence for the small farmer across the country, but outreach isn't going to help, technical assistance is not going to help, if the farmer cannot get a loan to plant their crops on time. That is the critical point here. If you apply for a loan in April and May and the county supervisor says you can come get your money in September and October, it's not going to work. Outreach will not be able to help me. That's the point here.

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    Last year, there was $1.9 billion lent, there was less than 1.3 black participation there. There was less than 1.2 for American Indians represented there; 4.2 for Hispanics. The problem, ladies and gentlemen is minority representation and program delivery at the Department of Agriculture. This is the lender of last resorts. If we can't get funding from our own Federal Government, we will not receive it. There was over $20 million—why didn't I go stay in Virginia, Congressman—that was returned to USDA for guaranteed funds, and there's no reason for that. We had over 35 farmers in a meeting with the lieutenant governor that was our supervisor with some people from FSA. None of those people qualified because they had bad credit.
    But if I go year after year after year and not receive operating funds, I'm not going to be able to meet my obligations at the end of the year. I'm not going to be able to pay the Government back. Matter of fact, I'm not going to be able to pay anybody back. That's the problem here we need to be looking at, ladies and gentlemen. Thank you.
    The CHAIRMAN. All right, thank you very much panel. It's been most interesting. I think most helpful to us.
    With that, the committee stands adjourned.
    [Whereupon, at 1:55 p.m., the committee adjourned subject to the call of the Chair.]
    [Material submitted for inclusion in the record follows:]
Testimony of Secretary Dan Glickman
    Mr. Chairman, members of the committee, I welcome the opportunity to testify on the important issue of civil rights legislation for the U.S. Department of Agriculture. I deeply appreciate the support of the Congress and your attention to civil rights at USDA. It has been critical to the progress we are making.
    Today, I'd like to briefly review what we at USDA have been up to since I last appeared before this committee, and then I'd like to shift gears and talk about what we now need from all of you to complete our work improving the civil rights climate at USDA.

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    Since the release of our civil rights report, a lot has changed at USDA. I'll give you just two examples. Six months ago, most state committees were not very representative of all the people of their State. Today, after having worked with the strong support and active involvement of Members of Congress, we have more women and minorities sitting on these state committees than ever before—making that grass roots connection to Federal programs even stronger. As you know, my ability to appoint is limited to membership on State, not county, committees.
    We're making real headway in resolving the backlog of complaints. We've closed the book on 71 program discrimination complaints—including settlement of 10 long outstanding cases. We've resolved some 350 employment discrimination complaints. We've got a ways to go, and I'll talk more about that in a moment. But underneath the backlog, we're getting at the root problems. We're hiring back a team of civil rights investigators that was disbanded in the eighties—leaving hundreds of cases in limbo. Now, we can move forward with the investigations that are necessary to handle cases responsibly—dismissing those without merit, settling those where reparations are due. We also now have alternative mediation to help us keep the process moving forward at a humane clip. And, we've installed a reliable tracking system. Today, if you call us and want to know the status of your complaint, in most cases, you can get an answer that same day.
    These are big changes that are having a dramatic impact on our civil rights effort. In some ways, we may be the victims of our own success. You may remember that when I formed the Civil Rights Action Team, I also asked our Office of the Inspector General to look into the situation. Their latest report to me showed that the backlog of program discrimination complaints has actually gone up by nearly 500 cases. Much of that is the residual effect of the old system. What happened was: During our civil rights listening sessions, farmers would stand up and tell their story. Then they'd say that they filed a complaint years ago, and never heard a thing. I'd ask for their names and numbers. I'd get the right people on it. They'd punch the names into the system ... Nothing came back. So we sent the word out to all the agencies—across the country and here at headquarters—box up your complaints, send them in. Then, we physically sifted through all the files and found 282 additional complaints.

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    So let me be clear: As of April 1, we had a total backlog of 822 program discrimination complaints. Since then, we've gotten 196 new complaints. Some of them involve recent events. Others involve alleged discrimination that occurred as many as 10 years ago. Let me emphasize that point: Even though these cases are newly filed, many involve discrimination that was alleged to have occurred years in the past. I think what we're seeing here is a lot of folks who kept quiet over the years because they thought they'd be fighting a losing battle—stepping forward—encouraged by our focus on civil rights—believing that their case may now get a fair hearing.
    That's just one more way we can tell that the climate is changing. As I've said before, there's no one silver-bullet solution to our civil rights challenges. If we're serious about institutionalizing change, then it's simply going to take a whole lot of people doing a whole lot of work. In the past 6 months, we've been busy on a number of levels:
    We're holding employees up and down our ranks personally accountable for treating every customer and coworker fairly and equitably, with dignity and respect; we're instituting a zero-tolerance reprisal policy to protect workers who stand up for their rights; we're changing our foreclosure and lending policies to root out discrimination; we're wading through the backlog in complaints, settling proven cases of wrongdoing and investigating and resolving others; we're reaching out more to underserved populations; and we're hiring a full-time cadre of civil rights advocates for our legal team. USDA is well on its way to emerging as the Federal civil rights leader.
    The bottom line is that we have taken just about all the administrative actions we can to improve our civil rights record. It's gotten us off to a good running start, but we have not completed the course. We're facing a few legislative hurdles that will require a boost from you.
    I want to thank Congresswoman Clayton for her almost daily involvement and personal commitment to our efforts, and for offering to help bring about the legislative changes we need. H.R. 2185, the ''USDA Accountability and Equity Act of 1997,'' is a strong step in the right direction. It includes many proposals that we support. This Committee has a detailed letter from my office going through each item in the legislation. I'll be glad today to touch on a few of the major points. Chairman Smith, I understand that you, too, have draft legislation. I don't wish to comment on the specifics of your bill until we've had a chance to review it in its final form. But I will say that based on our conversation today, our letter on Mrs. Clayton's bill, and the CRAT report itself, what this administration can support is pretty clear.

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    I would also add—in a general way—that I understand your bill suggests some fairly hefty organizational changes as well. With the greatest of respect for the distinguished chairman of this committee, I have to say that I strongly feel that now is the time for us to complete the organizational changes we have underway. It's not the time to undo those changes. I agree that we need to be constantly searching for ways to make USDA more efficient and to better concentrate resources on program delivery. I would just say that we are already in the midst of some very dramatic changes to achieve those ends. We are still putting in place the 1994 Reorganization Act which dramatically reduced and realigned the county field structure—saving millions of dollars and improving customer service. On top of that, I've added a fairly aggressive administrative convergence effort which upon completion will have cut by half our administrative support staff out in the field, so we can maximize the resources out on the front lines serving farmers and all our customers. Adding another layer of wrenching change—I believe—would cause turmoil in the ranks at a time that we really need teamwork. Philosophically, I also believe that America's farmers and ranchers need a strong Natural Resource Conservation Service and a strong Farm Service Agency. They perform critical and unique functions which I don't think should be mashed together.
    We are moving forward with an independent study by an outside contractor of the county field structure. The study will assess the workload of the agencies in light of current and anticipated program responsibilities. It will identify opportunities for efficiencies that consider our customers needs. We hope to provide you with recommendations for the future of the county delivery system by next fall. I believe that would be a more appropriate time to have a dialog about another departmental reorganization.
    County Offices
    We can, however, make some commonsense refinements that do intersect with civil rights. The Clayton bill includes a provision to convert FSA county employees to Federal civil service status. This is a cornerstone of the CRAT Report. I support this conversion and believe it would greatly improve our program delivery. It would simplify administration by erasing the current dual system that is cumbersome at best. I know that some folks out in the countryside are nervous about what this means for them. I want to make it clear that this conversion must be done in a way that ensures employees retain their tenure status. I want this transition to proceed in as seamless a manner as possible so our people can do their jobs. I look forward to working with Congress to ensure that the necessary legislation is fair and reasonable.

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    The FSA county committees have an excellent overall record of providing a grass roots basis for adapting Federal programs to local needs that should be continued. Both bills would strengthen their ability to serve all a county's customers by providing for the appointment of two diverse members—who reflect that community—when a committee has no diversity. I support ensuring that committees are representative and would appreciate the opportunity to work with you to refine this proposal.
    Farm Credit
    We all know that there are a number of concerns with USDA's program delivery system when it comes to addressing the needs of minority farmers. They have had special difficulties in obtaining adequate credit on terms that suit their needs. USDA's farm credit programs are supposed to help family farmers overcome their difficulties, especially beginning farmers and farmers who need help weathering periods of financial stress.
    Unfortunately, USDA suffered substantial losses—well over $10 billion—because of lax lending policies in the 1970s and eighties. Some of the reforms in the 1996 farm bill will fix those problems. Others are overly restrictive and need to be fixed themselves.
    These programs have been the subject of a number of discrimination complaints. That's why I have put a halt to foreclosures when a discrimination complaint has been filed until the claim is resolved. I have also asked the National Commission on Small Farms to address issues of credit when they give me recommendations for a national strategy on the small farm.
    The record shows that, in recent years, only a small percentage of credit funds targeted to socially disadvantaged groups has gone unused. We can do even better, but it will take some help from Congress. We need to admit that the 1996 farm bill went too far in making farmers who have had debt forgiveness ineligible for future loans. This is a tougher penalty than what's imposed by bankruptcy courts. That's something we should fix.

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    I would also say that we need to work closely together to ensure that any changes we make do not weaken the financial integrity of our credit programs, such as allowing new loans to be made to borrowers who are currently delinquent. When it comes to agriculture, government credit policies must include the concept of redemption. We can do it in a way that's far to taxpayers and to farmers.
    I would like to briefly discuss the audit report issued by the Office of the Inspector General concerning minority participation in FSA's farm loan programs. This report brought to my attention many important issues. In response, I've directed Mr. Pearlie Reed, our Assistant Secretary for Administration, to change our procedures and require that all investigations be done by the Office of Civil Rights instead of by the agencies involved.
    On another monetary matter, I would just like to note that a number of the provisions in the Clayton bill would allow certain programs that are currently supported through appropriations to be funded as mandatory programs. This would obviously require us working together to identify offsets from other areas, to avoid increasing the deficit under PAYGO scoring.
    Conservation
    The Clayton bill would also modify administration and funding of the Environmental Quality Incentives Program. I support efforts to ensure that eligible members of socially disadvantaged groups receive funding under this program. I support increased funding for EQIP, but this increase would require offsets.
    Research, Education and Extension
    The same is true for several provisions that affect the funding and administration of our research, education, and extension activities. I believe that these issues are better addressed in the context of the reauthorization of our research title. But again, I just want to note that the mandatory funding provisions will require offsets.

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    Conclusion
    In closing, I want to thank the committee for its interest in helping USDA improve its service to the American people. I'm proud of the progress that we have made in the past 6 months. It's going to take action by this committee to keep up the pace from here on out. My staff and I stand ready to work closely with you to achieve that.
    I have here with me today our Deputy Secretary, Rich Rominger, Pearlie Reed, our Acting Assistant Secretary for Administration, and Lloyd Wright, the Director of our Office of Civil Rights. We'd be glad to take any questions you may have.

Statement of the American Farm Bureau Federation
    The American Farm Bureau Federation, a 4.7 million member general farm organization, appreciates the opportunity to submit this statement of our views regarding proposed legislation affecting the U.S. Department of Agriculture. Efficient and effective performance by the Department, within the law, is in the best interests if American Agriculture.
    Proposed Combination of FSA and NRCS
    The draft Department of Agriculture Civil Rights and Efficiency Act of 1997 proposes that the Consolidated Farm Service Agency and the Natural Resources Conservation Service be combined into a single agency. The proposal establishes a position of Under Secretary of Agriculture for Foreign Agriculture and Agricultural Field Services to have authority over the NRCS, the FSA, and the FAS. A new Farm Service Agency will be composed of the CFSA and NRCS.
    Farm Bureau policy supports he preservation of the Natural Resources Conservation Service as a separate agency within the USDA. We are concerned that combining the NRCS with an agency that has regulatory functions will diminish the effectiveness of the technical assistance offered by NRCS to farmers. We are against NRCS becoming a regulatory agency and we believe that the agency should continue its traditional role of working with farmers to improve farm productivity while preserving and enhancing our soil and water resources.

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    Civil Rights Actions
    Both the draft proposal and H.R. 2185 seek to implement recommendations of the USDA Civil Rights Action Team. We support Secretary Glickman in his overall efforts to make sure that all farmers who interact with and all employees who work for USDA are treated in a fair and nondiscriminatory manner.
    Both proposals include provisions for Secretarial appointees to be added to county committees in order to help ensure compliance with Federal laws. Farm Bureau strongly supports the local committee system and believes that all committees should consist of farmers elected by local farmers. Programs to assist farmers and accomplish overall national objectives succeed when they are guided by and are sensitive to local needs.
    County committees should continue to exercise their authority over the eligibility of loan applications. Procedures should be improved to assure that county committee determinations about the eligibility of applicants do not unduly delay the loan process.
    The Department of Agriculture has the requisite authority currently to address civil rights concerns. USDA should strengthen the civil rights training program for county committees and county office staff. The Department should also improve the efforts of county committees and offices to encourage the participation of under-represented farmers in local decision making. The current line of authority from the Secretary of Agriculture to the state executive director, district director, county office committees and county executive director should be used effectively to improve civil rights compliance where necessary.
    The American Farm Bureau Federation appreciates the opportunity to work with the committee and to offer positive solutions to these important issues.
    "The Official Committee record contains additional material here."