SPEAKERS CONTENTS INSERTS
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57–925 CC
1999
1999
THE FREEDOM TO E-FILE ACT
HEARING
BEFORE THE
SUBCOMMITTEE ON DEPARTMENT OPERATIONS,
OVERSIGHT, NUTRITION, AND FORESTRY
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
ON
H.R. 852
JUNE 17, 1999
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Serial No. 106–22
Printed for the use of the Committee on Agriculture
COMMITTEE ON AGRICULTURE
LARRY COMBEST, Texas, Chairman
BILL BARRETT, Nebraska,
Vice Chairman
JOHN A. BOEHNER, Ohio
THOMAS W. EWING, Illinois
BOB GOODLATTE, Virginia
RICHARD W. POMBO, California
CHARLES T. CANADY, Florida
NICK SMITH, Michigan
TERRY EVERETT, Alabama
FRANK D. LUCAS, Oklahoma
HELEN CHENOWETH, Idaho
JOHN N. HOSTETTLER, Indiana
SAXBY CHAMBLISS, Georgia
RAY LaHOOD, Illinois
JERRY MORAN, Kansas
BOB SCHAFFER, Colorado
JOHN R. THUNE, South Dakota
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WILLIAM L. JENKINS, Tennessee
JOHN COOKSEY, Louisiana
KEN CALVERT, California
GIL GUTKNECHT, Minnesota
BOB RILEY, Alabama
GREG WALDEN, Oregon
MICHAEL K. SIMPSON, Idaho
DOUG OSE, California
ROBIN HAYES, North Carolina
ERNIE FLETCHER, Kentucky
CHARLES W. STENHOLM, Texas,
Ranking Minority Member
GEORGE E. BROWN, Jr., California
GARY A. CONDIT, California
COLLIN C. PETERSON, Minnesota
CALVIN M. DOOLEY, California
EVA M. CLAYTON, North Carolina
DAVID MINGE, Minnesota
EARL F. HILLIARD, Alabama
EARL POMEROY, North Dakota
TIM HOLDEN, Pennsylvania
SANFORD D. BISHOP, Jr., Georgia
BENNIE G. THOMPSON, Mississippi
JOHN ELIAS BALDACCI, Maine
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MARION BERRY, Arkansas
VIRGIL H. GOODE, Jr., Virginia
MIKE McINTYRE, North Carolina
DEBBIE STABENOW, Michigan
BOB ETHERIDGE, North Carolina
CHRISTOPHER JOHN, Louisiana
LEONARD L. BOSWELL, Iowa
DAVID D. PHELPS, Illinois
KEN LUCAS, Kentucky
MIKE THOMPSON, California
BARON P. HILL, Indiana
Professional Staff
WILLIAM E. O'CONNER, JR., Staff Director
LANCE KOTSCHWAR, Chief Counsel
STEPHEN HATERIUS, Minority Staff Director
KEITH WILLIAMS, Communications Director
Subcommittee on Department Operations, Oversight, Nutrition, and Forestry
BOB GOODLATTE, Virginia, Chairman
THOMAS W. EWING, Illinois,
Vice Chairman
RICHARD W. POMBO, California
CHARLES T. CANADY, Florida
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JOHN N. HOSTETTLER, Indiana
SAXBY CHAMBLISS, Georgia
RAY LaHOOD, Illinois
JERRY MORAN, Kansas
JOHN COOKSEY, Louisiana
GREG WALDEN, Oregon
EVA M. CLAYTON, North Carolina,
Ranking Minority Member
MARION BERRY, Arkansas
BENNIE G. THOMPSON, Mississippi
VIRGIL H. GOODE, Jr., Virginia
DAVID D. PHELPS, Illinois
BARON P. HILL, Indiana
MIKE THOMPSON, California
GEORGE E. BROWN, Jr. California
DAVID MINGE, Minnesota
(ii)
C O N T E N T S
H.R. 852 To require the Department of Agriculture to establish an electronic filing system to enable the public to file all required paperwork electronically with the Department and to have access to public information on farm programs, quarterly trade, economic, and production reports, and other information.
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Clayton, Hon. Eva M., a Representative in Congress from the State of North Carolina, opening statement
Goodlatte, Hon. Bob, a Representative in Congress from the State of Virginia, opening statement
LaHood, Hon. Ray, a Representative in Congress from the State of Illinois, opening statement
Phelps, Hon. David D., a Representative in Congress from the State of Illinois, opening statement
Walden, Hon. Greg, a Representative in Congress from the State of Oregon, opening statement
Witnesses
Dollar, Wayne, president, Georgia Farm Bureau, on behalf of the American Farm Bureau Federation
Prepared statement
Hobbs, Ira, Deputy Chief Information Officer, U.S. Department of Agriculture
Prepared statement
Komar, Steve, executive vice-president, Fiserv, Inc.
Prepared statement
Massey, Sheila, national president, Women Involved in Farm Economics
Prepared statement
Newton, Paul, past president, National Association of County Office Employees
Prepared statement
Submitted Material
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Soltwedel, Norbert, legislative chairman, National Association of Credit Specialists, statement
THE FREEDOM TO E-FILE ACT
THURSDAY, JUNE 17, 1999
House of Representatives,
Subcommittee on Department Operations,
Oversight, Nutrition and Forestry,
Committee on Agriculture,
Washington, DC.
The subcommittee met, pursuant to call, at 10:15 a.m., in room 1301, Longworth House Office Building, Hon. Bob Goodlatte (chairman of the subcommittee) presiding.
Present: Representatives LaHood, Moran, Walden, Clayton, Goode, and Phelps.
Staff present: Al Mackey, Kevin Kramp, Ryan Flynn, Callista Bisek, Wanda Worsham, clerk; and Russell Middleton.
OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINA
Mr. GOODLATTE. Good morning. This hearing of the Subcommittee on Department Operations, Oversight, Nutrition, and Forestry will come to order.
The purpose of this hearing is to receive testimony and written statements reviewing H.R. 852, the Freedom to E-File Act. Our colleague, Congressman Ray LaHood, a member of the subcommittee, introduced H.R. 852 on February 25, 1999. This bill requires the Department of Agriculture to establish an electronic filing and retrieval system to enable the public to file with USDA all required paperwork electronically. H.R. 852 also allows the public to access farm program information, quarterly trade reports, economic and production reports and similar information.
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The focus of this bill is to enable farmers, ranchers, landowners and borrowers to do more of their business with the USDA on the Internet. This bill is about access. It is about allowing farmers the advantages of the Information Age.
As the various competitors in the broad band marketplace race to compete in the provision of high speed Internet access to consumers, our producers are in danger of being left behind. The biggest obstacle to farmers interacting with USDA over the Internet is a familiar face; that is, the face of an old and outdated computer environment at USDA. The stovepipe mentality that is the culture at USDA has prevented the Department from operating on a common computing environment and threatens to limit the development of farmer-friendly Internet applications.
I am the co-chair of the House Congressional Internet Caucus. This position affords me the pleasure of meeting many individuals and businesses engaged in sustaining and expanding the Internet. These folks continually tell me that the expansion of the Internet will be the driving force of our economy well into the next millennium. When I asked what are the biggest obstacles to expansion, most reply fear of Government interference.
The technology industry is mostly concerned about unnecessary Internet regulation. We need to also be concerned about the interference caused when Government acts as an anchor instead of an enabler.
I have long been critical of the USDA mismanagement of their use of technology. I do think their stovepipe mentality is acting as an anchor to technological progress. The Internet interaction that Congressman LaHood's bill requires is not advanced technology. There are the other Government agencies already allowing their customers the same access and freedom that H.R. 852 would allow farmers to have.
It is high time the USDA goes on-line with rural America. The Internet is farmer friendly. It is time to eliminate the Government interference that retards the expansion of the Internet. It is time to get the USDA operating on a common computing environment. If we don't, I am concerned American farmers and ranchers will be lost in time.
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I look forward to hearing the witnesses' testimony today. We have assembled uniquely qualified people who will provide insight into the implications of the Freedom to E-File Act. At this time I would like to recognize the ranking member of the subcommittee, Mrs. Clayton of North Carolina.
OPENING STATEMENT OF HON. EVA M. CLAYTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA
Mrs. CLAYTON. Thank you, Mr. Chairman.
I want to thank you for holding this hearing on H.R. 852, the Freedom to E-File Act, sponsored by our committee colleague Mr. LaHood, and the interest and leadership you have shown on information technology, not only at USDA but at other Government agencies as well.
I strongly support the general goal of H.R. 852. I believe USDA must improve electronic access to its programs and services. The number of farmers and ranchers that have and use home computers is indeed growing. Coupled with a growing demand on USDA field employees as a result of downsizing, the USDA must take advantage of information technology to help ease the employees' workload burdens and to provide faster and better service to producers, especially during the economic crisis we are currently encountering.
While I do support the bill's goal, I am concerned that the bill does not allow USDA a realistic implementation time frame. Furthermore, it complicates the efforts made by Secretary Glickman to develop a comprehensive and compatible common computer environment at the Department by vesting all information technology control with the Chief Information Officer, CIO, an effort, Mr. Chairman, where your contribution to the Secretary's initiative has played no small part.
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In order to e-file you need Internet access. USDA's LAN/WAN/Voice project is designed to provide the network for service centers to assess the Internet, and it is only 85 percent complete.
In the past, the Department has made some questionable and, in some judgments, some poor decisions regarding information technology funding. By mandating initiatives the Department's information technology infrastructure is not prepared for, this bill, with all its good intentions could do, and I say could do, harm where it is designed to do good.
A final bit of irony, the House-passed agriculture appropriations bill struck the funding needed for the initiative critical to the goals of H.R. 852. Perhaps we can overcome this.
Again, Mr. Chairman, this is an important issue, and also I support the general goals of this bill. I look forward to the witnesses' comments.
Mr. GOODLATTE. It is now my pleasure to recognize the sponsor of the legislation, Congressman LaHood.
OPENING STATEMENT OF HON. RAY LaHOOD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Mr. LAHOOD. Thank you for holding this important hearing on H.R. 852. Your cooperation and that of your staff is greatly appreciated. I also want to thank the witnesses for appearing here today. I hope to learn what each of them thinks of H.R. 852 and the need for USDA to deliver more of its services electronically.
As we move into the 21st century, we must prepare all segments of our economy for the ever increasing world of e-commerce. Mr. Chairman, practically every industry in America is taking advantage of the World Wide Web. We can do no less for American agriculture. That is why I introduced legislation requiring the USDA to develop a system for farmers to access and file paperwork electronically. H.R. 852, the Freedom to E-File Act, makes good sense.
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As our society has become more technologically advanced, so have our farmers. In fact, a recent survey found that over half of all farmers and 72 percent of those with 500 acres or more have personal computers. Farm families use computers for a variety of other farm functions like financial management, market information and precision agriculture management systems. Computers in the homes have become almost commonplace. Many farm families could easily file necessary farm program paperwork from their home and offices if they had the option.
Freedom to E-File is not a panacea, but it is a good start. It is a reasonable, sensible way to help farmers spend less time filling out paperwork and more time on the farm. It will help increase the efficiency of American agriculture.
I am pleased to also say that on the other side of the Rotunda, Senator Peter Fitzgerald from Illinois has picked this bill up and is hopefully going to move it through the Senate. I notice from the testimony today we do have support from the USDA, from WIFE, from the Farm Bureau, from NASCOE and from Fiserv. So I appreciate the support from all of those different organizations and from Senator Fitzgerald, and I look forward to the witnesses.
Mr. GOODLATTE. Thank you. I am now pleased to recognize the gentleman from Illinois, Mr. Phelps.
OPENING STATEMENT OF HON. DAVID D. PHELPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Mr. PHELPS. Thank you, Mr. Chairman. I too want to commend you for holding this hearing. It is very valuable, especially to a new member, to discuss such important legislation. Thank you for allowing me to deliver this statement at this time.
As co-sponsor of the Freedom to E-File Act, I strongly support Representative LaHood's efforts to reduce the paperwork burdens on our farmers and to helm bring farm programs into the electronic age. I would like to thank all the witnesses for being here today, and I especially want to give a warm welcome to Mr. Paul Newton, a constituent of mine and an expert on farm program administration at the county level.
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Paul is a past president of the National Association of FSA County Employees, known as NASCOE, and he represents that group here today. I know he is going to be speaking in the second panel, but I want to take this opportunity now in case we have to move in and out. He is currently the county executive director for the Clark County FSA office in the 19th Congressional District of Illinois, and brings to this subcommittee his 33 years experience as an ASCS and FSA county executive director. I greatly appreciate Paul's presence here today, and I look forward to the insight he and his fellow panelists can offer this subcommittee on this important legislation.
Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you. Any other opening statements?
Mr. Walden.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON
Mr. WALDEN. I want to congratulate my colleague from Illinois, Mr. LaHood, for putting together this bill. It seems remarkable we have to have a piece of legislation to accomplish something that seems so basic in today's world. I would like to comment also I am pleased to see the growing support for this and the importance of it. It amazes me some agencies have demanded this from business from time to time. I think the IRS is one of them in the way we file things. So it is a two-way street. I think the Government needs to step up to the plate here and make this a lot easier. You think it brings some efficiencies, both to the Government and to the people on the farm, and that is what we need to accomplish here.
I appreciate your willingness to hold the hearing and your writing the legislation.
Mr. GOODLATTE. Thank you.
I would ask that a copy of H.R. 852 be inserted into the record at this point.
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[H.R. 852 follows:]
"The Official Committee record contains additional material here."
Mr. GOODLATTE. Now, before we go to the first panel, I would like to express my frustration, and I know the frustration of some of the committee staff, with our own communication problem with the Department of Agriculture.
Would those representatives of the Department here raise your hand? We are glad to have you all. Please know that our frustration is not with you personally, but I want to make sure the occupants of the Secretary's office heard this from every possible angle. The committee is tired and frustrated with the lack of professionalism the USDA has shown. Once again we didn't receive the Department's testimony before the day of the hearing. In fact, to my understanding, we received the testimony about 7 minutes before the hearing was scheduled to begin.
The inability of the Secretary's office to do their job has prevented us from doing ours. This will no longer be tolerated and our thoughts will be relayed to the agricultural appropriations conferees. USDA received the invitation to testify on May 27, and Mr. LaHood's bill was sent to the Department for executive comment on March 2. This hearing or the contents of the bill should have been no surprise.
We always knew that USDA Headquarters, not the field staff, was the root of many of our constituent complaints. Now we know about the inefficiencies starting at the top, and I would ask that you deliver that message the next time you are speaking with people in the Secretary's office. We can't be prepared to ask the appropriate questions regarding your testimony if we don't receive it in a timely fashion.
At this time it is my pleasure to welcome our first panel to the table, Mr. Ira Hobbs, Deputy Chief Information Officer with the Department of Agriculture. We are pleased to have you with us. Your written statement will be made part of the record. We would be pleased to receive your testimony at this point.
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STATEMENT OF IRA HOBBS, DEPUTY CHIEF INFORMATION OFFICER; ACCOMPANIED BY GREGORY L. CARNILL, EXECUTIVE OFFICER, NATIONAL FOOD AND AGRICULTURE COUNCIL, U.S. DEPARTMENT OF AGRICULTURE
Mr. HOBBS. Thank you, Mr. Chairman. Mr. Chairman and members of the subcommittee, I appreciate the opportunity to meet with you today and discuss the proposed Freedom to E-File legislation on behalf of the Department of Agriculture.
USDA supports the Freedom to E-File Act, H.R. 852, to enable farmers, ranchers, landowners, producers and farm borrowers to do more of their business with the USDA over the Internet. As it is currently drafted, H.R. 852 would require the Department ''to establish an electronic filing and retrieval system to enable the public to file all required paperwork electronically with the Department of Agriculture and to have access to public information on farm programs, quarterly trade, economic, and production reports and other similar information'' no later than 180 days after the date of enactment.
The Department supports the goals of this legislation. USDA agencies already have broad authorities to use new information technologies to improve our service to customers and agencies are already moving in this direction. However, we believe some clarification of the goals and timetable of H.R. 852 would be useful. We strongly recommend that the legislation be modified to support the Department's current efforts in the following manner:
To develop a phased 2-year approach to provide Internet-based services, as opposed to a single electronic filing and retrieval system; to focus primarily on the three USDA service center agencies; namely, the Farm Service Agency, the Rural Development agencies, and the Natural Resource Conservation Service, as well as the Risk Management Agency; coordinate implementation of each phase of Internet-based service with the necessary technical infrastructure investments and business process reengineering requirements; and plan implementation around the availability of program and technical staff now working to address the current farm crisis and year 2000 priorities.
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These changes would permit the Department to implement this legislation over a time frame that is consistent with current plans to make greater use of the Internet to deliver programs and services. The Department has already developed a broad 2-year plan, with three phases, that would substantially achieve the goals of this legislation if adequate funding and staff resources are available.
The first phase of this plan would take approximately 180 days to complete. During this phase, USDA would establish an Internet based system to give farmers the ability to download and fill in forms for the highest volume programs and services delivered USDA service center agencies. Completed forms would still have to be printed and/or faxed or mailed back to the Department due to the lack of security and an appropriate distribution method.
During phase one, the Department would also increase the volume and coordinate access via the Internet to news and program information produced nationally for farmers by our service center agencies.
Completing this phase would require the Department to allocate sufficient staff resources to create user friendly forms and guidance and implement them on a web server in a standardized format. Staff would also be required to design and develop procedures for simple and organized submission of program news and information from service center agencies and the Risk Management Agency.
We estimate that the funding requirements for phase one would be $250,000 in terms of initial start-up costs, and $50,000 on an annual basis for support.
Staff and resources for this phase will be funded out of the existing fiscal year 1999 budget. In addition to developing plans for the phase one effort, we have already begun the process of converting paper forms to a standardized appropriate electronic format.
The goal of phase two of our plan would be to allow farmers to actually submit applications to the Department on-line while providing a number of additional Internet-related services. We originally estimated that phase two of this initiative could be completed within 12 months. However, this assumption was based upon the Department receiving $74 million in funding for the Service Center Initiative which was requested in the fiscal year 2000 budget.
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Unfortunately, the recent House action on the fiscal year 2000 USDA appropriation eliminated the funding requested for the Service Center Initiative. As a result, USDA does not have sufficient funding to achieve the full electronic access capabilities as mandated in H.R. 852. Unless additional funding is made available, we believe that only the first phase of our plan is achievable.
If funding is available, phase two of the initiative would establish the capabilities for farmers to submit completed forms for all major programs and services over the Internet. The Department would also establish Internet-based systems to enable farmers to quickly find and evaluate the features and options for some Farm Service Agency, Natural Resource Conservation Service, Rural Development, and Risk Management Agency programs, and communicate electronically with service center staff.
Implementing this capability depends upon the development of an integrated e-mail solution for service center offices, as well as sufficient staff time and funds to plan, procure and implement an encryption and authentication solution to ensure the Department can verify a farmer's identification and the security of the content of submitted information. This could mean requiring every farmer to establish a PIN number.
Implementing phase two also requires staff time and funds to create a distribution system that will ensure completed forms are received by the appropriate agency staff, as well as the training for program and field staff on new systems. We estimate that $500,000 is required to develop and $200,000 to annually support an integrated security solution. In addition, $2.25 million is required initially to provide basic Internet-based services with $1.4 million for annual support.
Assuming that the Department achieves adequate funding to accomplish phase two, we estimate that the third and final phase of our plan can be accomplished within a 24-month period. This assumes that adequate funds are made available for these initiatives in fiscal year 2001 as well.
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Completing phase three would allow USDA to provide farmers the capability to complete and submit all program forms over the Internet, deploy a limited number of software applications on-line for farmers to use in executing program application or service transactions, and deploy the infrastructure necessary to enable Internet access to new applications.
Implementing this capability depends upon the deployment of the Service Center Initiative referred to as the common computing environment network servers, data connectivity solutions, and additional personal computers, as well as reengineering and improving Service Center Initiative programs to enable farmers and service center staff to access and use program data electronically.
An estimated $1.3 million would be required for additional electronic access investments, with $375,000 required for annual support. Investment opportunities to accomplish phase three will be carefully considered as the Department's fiscal year 2001 budget is developed.
Mr. Chairman, members of the subcommittee, let me close by reiterating again the Department's support for the goals of this legislation. It is consistent with the emerging trend towards electronic government, to use information technology more effectively to serve our customers, which USDA agencies strongly support.
We have already begun working in this direction. However, as I mentioned earlier, the rate at which we can achieve the vision articulated in the Freedom to E-File Act will be determined primarily by the availability of funding and staff resources.
We look forward to working with you to achieve the goals of this bill. Thank you for the opportunity to speak before you today. Joining me here from the Department of Agriculture is Mr. Greg Carnill, the director of our service center implementation team. We will be happy to try and address any questions that you may wish to pose.
Mr. GOODLATTE. Thank you for your testimony. Mr. Carnill, we welcome you as well.
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Let me start by asking, do you have a total figure there for everything that you are stating would be necessary to implement what we are calling for in this legislation?
Mr. HOBBS. No, we do not have a total figure for implementation of the E-File Act bill.
Mr. GOODLATTE. Second, let me ask you, these are fairly, as has already been noted, fairly common things that are available with other Government agencies, with a number of private businesses, with State agencies, with the Congress itself. What kind of planning has been going on and for how long has it been going on to implement these kind of customer-friendly services with the Department of Agriculture?
Mr. HOBBS. Mr. Chairman, I think over the course of the last 5 or 6 years there have been a number of efforts started by the Department to improve upon its infrastructure in terms of information technology. The whole direction and intent of these improvements have been to deliver services in a much more efficient and effective manner to our customer and service base. We recognize that we do have, as you referred to them, stovepipe systems, and our infrastructure is not what it ought to be in relationship to some other agencies that have been able to really ramp up and improve upon the basic infrastructure for delivering programs using information technology. But I would say that we have always looked for opportunities to leverage information technology in a much more strategic and tactical way to really focus upon improved service delivery to our customers.
The Service Center Initiative has been ongoing in some form or fashion for at least the last 6, 7, 8 years within the Department of Agriculture. This is part of the planning of that package, to go along with a number of other activities like the LAN/WAN/Voice project that was related to, the deployment and consolidation of service centers across the country in terms of our three farm service agencies. It is all part of a total package in terms of us reinvigorating the infrastructure of our organization to be able to move aggressively into the 21st century.
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Mr. GOODLATTE. Let me ask you this: Do you feel like you are behind the curve on this compared to some other organizations?
Mr. HOBBS. Yes, sir.
Mr. GOODLATTE. You mentioned the need for resources. Over the last 10 years, the Department has been provided by the Congress through our appropriations process about $12 billion for information technology. This year I think it is budgeted at about $1.2 billion for that purpose.
In 1994, the USDA spent $187 million for financial systems alone to operate and maintain 115 different financial management systems. In 1996 we believe the USDA bought nearly 500 laptop computers and distributed these to field offices that are not Y2K compliant. I hope you understand why there is some skepticism on our part that the need for additional funds claim is bona fide when you have such huge sums of money, we believe a good deal of that has been misspent, $115 was spent with no measurable results on the abandoned Info Share project.
Just to give you a few examples of why we are concerned that with that huge amount of money that is being appropriated and budgeted for I.T. services, you couldn't find the few million necessary that you described by greater efficiency in the use of those funds to implement this program and implement it very, very rapidly, given the fact you are already behind what I think most consumers, including farmers, who are very Internet savvy people. They rely on the Internet for all kinds of information, from private sectors, regarding the weather and future pricing on their crops and so on.
It seems to me that the Department could take a more can-do approach to this and say we are going to get it done. It is helpful for us to have this mandate and these timetables to get them done, and we are going to go ahead and do it.
How would you respond to that?
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Mr. HOBBS. Well, there are a lot of things there to respond to. First I would say that your criticism and concern is probably valid. It is no secret the Department has not done a real efficient nor effective job in previous years with respect to how it has used its dollars in that regard. By the same token though, I would also say that the Department has a fairly old and antiquated infrastructure that must be preserved in order to ensure the continuation of delivery of services to our constituents. I think you are absolutely correct that we are looking at an expenditure of about $1.2 billion in terms of information technology, but I think when it is all said and done and you parcel out where the dollars are going, you will find the Department has somewhere less than 1 or 2 percent of dollars it can invest in new technologies across the board.
That places a tremendous burden on the Department, because you cannot really deploy new technology on top of an infrastructure that is broken. You have to fix the basics before you can proceed to providing more services that people are accustomed to and see a lot emerging from the private sector.
So I think therein lies our problem, is that we are getting the requirements to move aggressively into the 21st century, but we are saddled with a 19th century infrastructure, which we are desperately trying to repair on the fly as we also bring about new technologies and new applications.
The numbers that I quoted related specifically to the application of the e-commerce electronic filing capacities of H.R. 852. What it does not take into consideration is those things that we have to do to improve the infrastructure, to get everyone in USDA operating in compatible environments where we are able to do things much more efficiently.
Therein lies what we are trying to do, and aptly named with the common computing environment, which is the forerunner of the project you mentioned earlier in terms of Info Share, which we think we have a much better handle on and that we think we are making some very aggressive and important strides in terms of improving the delivery of information technology and fixing some of the problems that we have in the Department. But it is a dilemma in terms of our ability to be able to shift resources to do new things while at the same time being saddled with the continuation of our existing infrastructure.
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Mr. GOODLATTE. I appreciate your recognition of the problem, but it seems to me $1.2 billion gives you an awful lot of resources to fix those problems and, as you fix them, to make sure that the systems within the agencies of the Department are compatible and communicate with each other, since they have to be replaced every 2 to 3 years anyway with the changing rate of technology. It seems to me the new systems installed ought to be communicating with each other, and in the process, it is not that difficult to make them communicate with the people you serve.
At this time let me recognize the ranking member.
Mrs. CLAYTON. I, too, share the position that we want to find the position with USDA, taking the entrepreneurial spirit of trying to meet the challenge of dealing with what you have in the existing system as you go forward. I think to belabor it, to understand it certainly is a more realistic way rather than an unrealistic way of suggesting you could do it without making the system that you have now workable and making the connection.
I just know in our congressional office, we don't have anywhere the kind of connections to make, that sometimes we find ourselves not making that transition as smoothly and sophisticated as we think we have.
We just went through the transfer from one system to another, and using the same equipment and using the same brand, but just upgrading meant some transition.
So it is not to be unrealistic in the recognition that there are some transitional problems and there are costs in that. But I think the challenge that you have for the Department should be how we meet those challenges. I think correspondingly we here have an obligation. I was amazed at the appropriation, in spite of the chairman saying the $1.2 billion that we had, the initiatives, that $1.2 billion is not there without some claims. So there are some obligations to draw on that. I hope you are spending those dollars well, just as we in our homes sometimes have to make a determination whether we repair the roof or go ahead and get a new roof. So sometimes in the exercise of the maintenance we can have some efficiencies if we do those well.
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I think to leave it unchallenged the $1.2 billion is there to do all the things we want to do would be unrealistic, and certainly it an unfair assumption. But it is nevertheless an obligation to make sure we use those funds as effectively and as efficiently as we can.
I, too, want to know how you add up what you have. I heard you comment that you did not put in your testimony what you needed to do as the Department to get ready for this. But phase one and two, you gave us some figures.
Mr. HOBBS. Phase one, we are funding out of our 1999 process. We included in the fiscal year 2000 request for the common computing environment I think roughly about $74 million, of which funds were to be used to move this project along into a second phase. I think the numbers that I quoted for phase two were somewhere in the neighborhood of about $2.725 million in terms of start-up. We have an annualized support cost of about $1.6 million.
Mrs. CLAYTON. Well, the one I was really struck with was, I thought it was a billion, I may be wrong. I was in error.
But let me ask you, the e-mail, the e-rate to—e-mail is such a common instrument in most of the computers. Where is that cost designated? Is it a connection? It couldn't be in the technology of e-mail, because that is a standard. Help me understand.
Mr. CARNILL. It is very much in the technology. Even though most systems in today's technology environment must be refreshed every 2 or 3 years, the major part in this is FSA, which operates in a 13-year-old Legacy system with dumb terminals connected to system 36s in service centers that has horrific connectivity incompatibility problems in the current industry standard.
That is why we have been for the past 3 years involved in this major initiative to look at not only FSA's business requirements, but the comprehensive business requirements of all three of the service center partner mission areas that are our front line county-based agencies and move into a flexible, open, distributed, client-server architecture that most of you are used to having a PC on your desk with a modem in it that we can call the Internet from.
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We just for the very first time at the end of 1998 had $30 million available for the initial capital investment in what is estimated to be a $300 million capital investment to achieve the common computing environment, and we have been able to now deploy the first 16,000 common work stations to the field. That only represents about 40 percent of our field force, and it is spread thinly across the agencies. It is not yet connected to the rest of our architecture to include network servers.
We have laid the foundation with the $100 million investment across 2,500 offices nationally for the telecommunication infrastructure in order to have a LAN in the local office and connect to the wide area network of the Department. But this is an iterative phased building process as required by the rules, and it is a large and complex process to address total business needs.
From the very beginning of the architecture design, we have fundamentally known we had to build public access and e-commerce into the system. We have always had the public access servers, the Web servers required, and the security plans ongoing to move this forward. It has simply been a matter of competing resources to deal with the current crisis of today versus being able to invest in your future.
Mrs. CLAYTON. My time has expired. Should I conclude from your comments that 60 percent of the field offices are not able to communicate with you through e-mail or with the farmers, are or are not connected?
Mr. CARNILL. Every field office has at least one computer in it that has a modem connection. In terms of the staff, generally, having e-mail access and being trained and competent, no, they are not.
Mrs. CLAYTON. It is like in our office, rather than have every computer connected to the Internet, we have designated computers connected to the Internet. Could each office have a computer that farmers could send if they wanted to, e-mail that information?
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Mr. CARNILL. In this initial phase one process we described that we could implement on an accelerated basis within our fiscal year 1999 plan, we could make sure that this initial capability for farmers to go to a server or an e-mail address that we have set up where they could pull basic forms down could work, but they would then have to fill those forms out and send them back by fax or mail. We would have limited capacity in some offices to allow them to e-mail them back directly to offices.
By the end of the fiscal year, we could probably identify a computer and an e-mail address for almost every USDA program delivery site in the country. But we are talking about, you know, again, it is the same question we ask ourselves when one of the agencies comes forward and says we have a critical emergency with a Legacy stovepipe system. We have to do a 10 or $20 million Band-Aid just to maintain business today, which diverts being able to invest in the infrastructure we are trying to move to. Should we do an immediate quick fix on electronic access that does not ultimately contribute to the larger plan that we already have in place to produce a truly effective and efficient interactive capacity with producers.
Mrs. CLAYTON. I am sympathetic, but still we are moving into the 21st century. We can always find the overload not to do. If anything, we would challenge you to see this as a challenge and try to make it happen.
Mr. HOBBS. Mrs. Clayton, the Department does recognize it as a challenge, and the Department is very focused and committed with respect to electronic commerce. But one of the things that we have rightly been criticized for in the past is that we jump to quick fix solutions that inevitably cause us more problems down the road. It is conceivable you could have one computer in every Farm Service office or service center location around the country that perhaps could receive forms, but at what cost from the standpoint of security, the ability to protect the confidentiality of the information being transmitted.
So there are a number of different factors. What we do not want to do is what we have been criticized so strongly for in the past, and that is a new requirement coming in, we jump to make that happen, and we find out in hurrying up, what we are now doing is going back and unraveling the blanket and starting all over again. Of course, then we have exhausted another $5, $10, $15 million that is pointed out to us about our inefficiencies. So we have tried to be very cognizant of where we are going, recognizing that if you are not part of the Internet, you are probably not part of too much of anything else that is going on from the standpoint of delivering services to customers and to clients. I know that from my own experiences.
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I have expectations, too, in terms of people I interact with and companies that I request services from as a private citizen. So we are very committed to this process and looking for avenues to be entrepreneurial, but we also recognize that if we try and build advanced level applications upon poorly constructed infrastructure, we are setting ourselves up and our constituents for a great fall. That is what we are trying to avoid also.
Mrs. CLAYTON. Thank you for your patience, Mr. Chairman.
Mr. GOODLATTE. Mr. LaHood.
Mr. LAHOOD. Well, I certainly appreciate your testimony and your support for the legislation. Tell me this: How does this fit into your priorities, implementing this e-file legislation? If it were passed, how would it fit into your priorities of what we are trying to establish within your department?
Mr. HOBBS. I think, Congressman, it would mean we would have to defer some of the other things we are doing, especially if it is passed in its current deployment without resources for the Department to dedicate to this effort.
We would have to, as we have in the past, respond to it in the sense that it is an emergency, it is a crisis that we have to deal with in order to be compliant with the legislation, or the law if it is passed in that instance. So from that sense, that is how it would dovetail into our priorities.
Mr. LAHOOD. You do have a significant amount of money dedicated to, as you would term it, upgrade your infrastructure. To my way of thinking, what I am really proposing here is the idea that these are the most basic services and the most basic requirements that you require of producers. This is a service that is absolutely a requirement for these producers. This is the first line of information in order for a producer to acknowledge to the USDA that he or she is involved in agriculture.
It seems to me, and I know it is easy to come here and say you need more money, and I regret a little bit that that seems to be the hang-up with your implementing this legislation if it were to be passed, because I think you do have an enormous amount of money, and I do think this is a priority, given the fact that without this information the producers don't really have any kind of first line of information to the USDA other than to do it the way they have been doing it currently.
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So my point is when I ask about what priority does it take, I am really asking in the sense that you need this information and producers need to provide it in order to establish the fact that they are actually doing something out in the hinterlands with regard to producing food and fiber for the country or nationally.
I wonder if that has any standing at all, that argument?
Mr. HOBBS. I believe your argument has tremendous standing.
Mr. LAHOOD. Then why doesn't it have a higher priority? If the point is—we hear people talking all the time, particularly at the highest levels of our Government, about moving into the 21st century and building bridges and all this sort of stuff, and we know there are other agencies that require it, there are other agencies where you can do it, and here this is the most basic form of information for producers to the USDA, and I am wondering is why can't it have a higher standing or a higher priority, because it is the first line of information for producers to your agency?
I have used the example of the IRS. If you want to file your income tax, you can do it electronically. There is actually a benefit to doing it, and that is sort of a requirement all of us have. It is not dissimilar to farmers or producers having to file certain information in order to qualify for certain programs. They ought to be able to do it electronically. Why wouldn't that have the highest standing within your agency?
Mr. HOBBS. The way I would answer that is go back and probably rephrase in terms of priority. The highest priority that I am aware of that we have as it relates to our customers is the efficient and effective delivery of services. Whether that is across, face-to-face, an encounter, whether that is electronically, whether that is telephonically, that is our requirement. There are a number of different things that the Department is trying to do to make that a reality and to make that as important a message as we can in terms of what we get across in the Department.
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We recognize that electronic filing is a very significant way in which for us to move. We have already started that. There are many different activities within the Department that are directed toward that. The question is whether or not we can do it in 180 days for all of our constituents, given some of the other problems and issues that we have that also impact the same issue of efficient and effective service delivery to our customers.
Mr. LAHOOD. If we change the time frame, do you think you could find the resources within your agency to do this? Say we allowed some flexibility for the implementation of this. The thing I don't want to get hung up on here, I would allow for some flexibility. I think that is a legitimate concern, particularly if you have lousy infrastructure to begin with. I think you make a good argument on that.
The thing that I think is a little bit more troubling is the fact that you come here supporting it, but you need more money and you have an enormous amount of money now. And if this does have high standing and is a high priority, then I would think that the Secretary or others within the agency may want to shift some resources to make it happen, if we are flexible in the time frame within which you need to do it.
Mr. HOBBS. Congressman, let me try to explain it in just a different tact.
Part of what we are saying is that it costs us certain things to do electronic commerce or e-filing, as referred to in the legislation. But before we can do that, there are certain things that we have to do from the standpoint of improvement of our infrastructure.
Mr. LAHOOD. I understand that. You have explained that very well.
Mr. HOBBS. All right, sir, I will try and move on. The issue becomes though that we have to do that, and at the same time we have to maintain the service level base that we are able to provide now.
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We can't, without stopping one, start the other. There has to be some form of a transition in order for us to move from approach A to approach B. What we are saying is that what would help us in that approach would be funding for the deployment of the projects and the resources that we have laid out, structured and planned, and have been advocating for over the course of at least the last 4 or 5 years through our Service Center Initiative.
That is what we have been trying to do. It is not so much we are saying we need more money as it is we need what we asked for in order to do the things that this subcommittee and committee and the Congress is asking us to do in terms of the delivery of our programs.
Mr. LAHOOD. I will let you go on to Mr. Phelps, and I would like to come back with a few more questions, Mr. Chairman, if you would like to proceed that way. However you want to do it here.
Mr. GOODLATTE. Thank you. We will do that. Mr. Phelps.
Mr. PHELPS. Thank you, Mr. Chairman. I will try to be brief because so much has already been covered, I think, in the interests of time.
I guess what strikes me firsthand, maybe being a new member my expectations were more from this level of Government in response, especially in the crisis situation that we find agriculture in. I know you are probably talking about a sophisticated level, idealistically what should be reached to service properly, professionally in the age in which we are. What strikes me is trying to understand why we can't work with what we have in trying to expedite information to our field officers and the farmers that require it, to give information back to us, especially to expedite in a crisis situation that we found in the last few months.
Is not the capability there to even work with field offices that just have the basic structure? Can they not meet requirements without the ideal upgrading that we know is going to be expensive and maybe it takes longer for the phases that you have effectively outlined? Is there not something in place that we could exercise the requirements without all the expense that ultimately we are going to face? Am I just naive in my understanding of that?
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Mr. CARNILL. I don't think you are naive. I think there is a communication gap, if you will, on people truly understanding how far behind and how basic the kinds of infrastructure issues we are talking about with the field are. I suspect when you hear from the representatives that are here who have experience in field offices, that they will share with you what they face on a day-to-day basis in our field offices versus what they have at home with the PC that they went down to Wal-Mart and picked up for $1,000.
It is hard to imagine that it is so difficult that we couldn't at least create some connectivity that would accomplish some minimal activities at every office, and we are moving aggressively to get ourselves to the point where we can just let our own staff receive and send e-mail to us and amongst themselves. But I have to say that it is not there.
Mr. PHELPS. It just seems like the communication would be just normal, especially the time we have had in the last few months with the agriculture crisis, that the agency would reach out to the field offices and recommend, look, we may not be ideally equipped to respond, but in other words, sensitivity, some expression of leadership. Obviously I am not convinced it is priority either because I believe you would be coming to previous Congresses and asking for help in order to get this in place without even anticipating what came about in the last year in the agriculture markets.
So I guess that just overwhelms me, the fact that we are at this level and we are at this time in history where we are expected to be dealing with this technology to the best of our ability, and yet at the most crisis level, I think I hear you admitting there is not even proper communication to say we are sensitive to what is happening. You are required to give this information to us. Let us see if we can work out the basic line of what is available.
Surely there are programs that you can borrow from other agencies that should be self-contained enough not to be sensitive to the loan programs or whatever there might be to go through the existing system. Because I think I heard you say phase one would be like $2.7 million, and then $1.6 million. Is there nothing even in that, don't you have that kind of flexibility with the money you have now to say look, in lieu of the seriousness of the crisis, let's try to get something started, just in case we are questioned on this basis by Congress and others as to what we are doing to respond.
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Mr. CARNILL. We have started. We have people in the building now who are taking our most used forms. We have determined out of the hundreds and hundreds of forms that there are a couple of hundred where the bulk of the business is involved, and we are already converting those so that we will begin to be able to make those accessible at Web sites to producers to download and have available.
We are migrating those forms into existing off-the-shelf technologies that will allow producers to actually pull that form up on the screen and fill that information out on the form and send it back. Those are our phase one-phase two initiatives, and they are manageable shifts in resources, certainly in this year, and if we have the modernization budget next year within the resources that that budget provided.
So, yes, there are some initial first things we can do and are in the process of doing.
Mr. PHELPS. Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you.
Mr. LaHood, did you have other questions you wanted to ask?
Mr. LAHOOD. Do you see this bill impeding your ability to comply with Y2K readiness?
Mr. HOBBS. Congressman, I would not say I see it as impeding it. Certainly given in its present form how it would come out, it would have an impact on resources that are now being dedicated toward the Y2K effort.
Mr. LAHOOD. Well, your own testimony indicates approximately how much it would take to implement this, which appears to be maybe less than about 2 percent of your overall budget. Let me just say this: If this is a priority, and I assume it is from your testimony and what you have already said in answering questions, trying to go on-line with producers is something you are interested in doing, right?
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Mr. HOBBS. More than interested, sir. It is the way business is going to be conducted.
Mr. LAHOOD. Then I guess what I would like, I don't want you to say you can't do it because you don't have the money. You know what, everybody around here can say that. Every agency can say that.
What I would like for you to do is offer some flexibility to us, to say that you will look at some of your own resources that you already have to help implement this, but you might need some additional resources.
I think there has to be some sort of compromise ground here. I don't think you can say you can't do it because you don't have the money and you need more money, because everyone says that. You have a lot of money. Your agency has a lot of money for these kinds of services.
What I would like to see you do, if it does have standing and if it is a priority, which you have said it is, then I would like you to come back to me or to the subcommittee and to say we can use some of our existing resources, but we possibly need some others. But just to say it can't be done because it is going to cost an enormous amount of money and you don't have it, you know, that doesn't work.
I have a fairly good feeling that this bill has a pretty good chance of passing, because I think it is going to pass in the Senate, and I think it has pretty good standing over here. I think you need to think about some sort of compromise ground here.
Mr. HOBBS. That is not unreasonable. In our testimony we listed about four or five things that we thought would be helpful to us.
Mr. LAHOOD. Right.
Mr. HOBBS. In terms of the legislation, both in terms of time frames, both in terms of focus. USDA is already, as we mentioned, in 1999 there are things we are spending funds for in terms of this program and its effort, and I believe that I can commit to you we will come back to you and say here is what we think we can do, because we are not trying to get out of the e-filing notion by saying simply we don't have the money for it. What we are indicating though is that this is a broad—that this program is one among many things we are trying to do to improve service delivery, and that some of those things certainly impact on this from the standpoint of how we prioritize than what we are able to do in terms of being able to deliver services and do so consistently without any failing on our part. We want to move to electronic commerce.
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Mr. LAHOOD. I think your point about really trying to develop infrastructure is important. You don't want to pile junk on top of junk. I would agree with that. But I also want to make the point, this is the most basic service you provide to the producers. This establishes them as producers, it establishes them as people who can tap into the different programs that you have. It is not dissimilar to a taxpayer who files with the IRS establishing themselves as a taxpayer. It is the most basic thing that you do. I would think it has high standing and high priority as a result of that.
So I look forward to whatever information you can come back to us with in terms of using existing resources and really trying to make this happen.
Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you. Mr. Phelps, does that prompt any more questions on your part?
Mr. PHELPS. No.
Mr. GOODLATTE. Mr. Hobbs, we very much appreciate your participation. We look forward to working with you to accomplish the goals of this legislation, and we encourage you to go back to the Department and say, ''Hey, this is something that really in many respects doesn't even require legislation if we get on the ball and do it.'' Some of the time limits you have expressed concern about are in operation right now. The legislation was introduced earlier this year. It has been more than 100 days added to the 180 days that are provided in the legislation to accomplish the first phase that has already been given to you. I suspect the legislation is not going to be passed and signed into law tomorrow. So let's get to work on it and accomplish these things.
These are things that are good, common sense, customer-friendly business applications that the Department should be doing. I think it is absolutely great that Congressman LaHood has taken the initiative on behalf of America's farmers to prod the agency to do it. But I would love to see the agency say yes, this is exactly what we need to be doing, in fact we are hard at work planning to do it, finding the resources within our very large I.T. budget to do it. We are contemplating as we replace certain pieces of equipment in the agency, that the new pieces of equipment are going to have the capability to carry out these functions, and we will get this job done and get it done quickly so that America's farmers remain competitive in the international marketplace by having the best interaction possible with an agency that is supposed to be dedicated to supporting their efforts.
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Thank you again for your participation.
Mr. HOBBS. Thank you, sir.
Mr. CARNILL. Thank you.
Mr. GOODLATTE. We are now pleased to invite our second panel to the table, Mrs. Sheila Massey, national president, Women Involved in Farm Economics; Mr. Paul Newton, past president, National Association of County Office Employees; Mr. Steve Komar, executive vice-president of Fiserv; and Mr. Wayne Dollar, president of the Georgia Farm Bureau.
I would like to welcome all of you, and remind you that each of your written statements will be made part of the record. We will be pleased to receive your testimony at this point, beginning with Mrs. Massey.
STATEMENT OF SHEILA MASSEY, NATIONAL PRESIDENT, WOMEN INVOLVED IN FARM ECONOMICS (WIFE)
Mrs. MASSEY. Thank you for the opportunity to represent Women Involved in Farm Economics before this subcommittee. I am Sheila Massey, national president of Women Involved in Farm Economics, WIFE. WIFE is a grassroots organization with 17 state associations and members at large in almost every state. Today I will share the views of WIFE on how we perceive H.R. 852, the Freedom to E-File Act, and the role we foresee for this technology in future communications and business transactions with our Farm Service Agency offices.
Results of studies conducted to determine the percentage of farmers with on-line computers indicate that 50 percent of farmers overall have personal computers. WIFE's membership definitely falls in the norm of statistics. I would venture to say that the majority of WIFE members own a personal computer as a vital tool for their farm management system.
Today, computers on our farms and ranches serve purposes other than those of basic record keeping. The accessibility to go on-line to acquire up to the minute agriculture market reports and weather forecasts greatly assist us in the day-to-day decision making. The ability of agriculture producers to access and file paperwork over the Internet is a very interesting proposal, especially if this system can be implemented using existing funds and at no additional costs to taxpayers.
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Considering the possible benefits e-filing would provide, what first comes to mind is the distances that we travel to our FSA offices to fill out paperwork and sign forms. I live in the Southwest where the term ''in the middle of nowhere'' definitely has some significance. Our farm located in the bootheel of New Mexico is a 40-mile one-way trip from our county FSA office. The distance from our farms and ranches to the USDA service centers is not only an issue in the Southwest, but the entire western United States and other parts of the country as well. The ability to save a trip or two into town is a welcome prospect, especially since deadlines often come when we need to be in the field.
The possibilities proposed by the Freedom to E-File Act are very attractive. Farmers' ability to have greater access to information electronically makes good sense. As we consider the possibilities that H.R. 852 is proposing, several questions must be addressed. First, will our FSA offices be equipped with the updated technology to facilitate electronic filing? Will our county offices have computers capable of networking and accessing the Internet? Will the county office employees have the training required to do the job that will be expected of them? Will new PCs being received by county FSA offices be capable of linking to the databases currently in the older systems?
If the answers to all of these questions are yes, then we are most definitely in business. If any of the answers are no, then we have a few snags to work through.
Keep in mind that the success of doing business electronically lies in the ability to do so with no interruption of service due to antiquated technology in our FSA offices.
What will be available to producers conducting business electronically? Will we have the capability to access the entire database of our local FSA offices? Will we have access to GIS aerial maps? Will we have access to the wealth of information which can be found in the FSA database? Will we be able to link to this information without restrictions? But, most important, will the information that is being transmitted from our farms to the FSA offices be protected? All of these questions must be addressed in order for farmers to know what to expect in regard to electronic filing.
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WIFE has long maintained that adequate staffing levels for the Farm Service Agency office are an absolute must. In light of this proposed legislation, we reemphasize the fact that we must have no further downsizing or reduction in force at the county level. We would also emphasize that the current staff must be trained adequately to facilitate a smooth running electronic filing system.
WIFE looks forward to the prospect of doing business with an electronic filing system. The possibilities are endless. The success of such technology can only enhance the delivery system to which we as farmers and ranchers have become accustomed through our Farm Service Agency county offices. We urge both Congress and the administration to avoid any unjustified cuts in funding which would prohibit the technology and the permanent trained staff required to implement that technology.
Thank you again for the opportunity to testify before this subcommittee on H.R. 852. WIFE will continue to be available to work with the subcommittee on issues concerning the delivery system of the Farm Service Agency and the service they provide our Nation's farmers and ranchers.
[The prepared statement of Mrs. Massey appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mrs. Massey.
Mr. Newton, welcome.
STATEMENT OF PAUL NEWTON, PAST PRESIDENT, NATIONAL ASSOCIATION OF COUNTY OFFICE EMPLOYEES (NASCOE)
Mr. NEWTON. Thank you, Chairman Goodlatte. I want to thank you and Representative Clayton for the opportunity to be here and to testify. I am a past president of NASCOE. We represent the county office employees out there in the field offices. I am a CED in Clark County, IL, and have been for some 30 years. I hope to bring you some kind of a front line perspective on the Freedom to E-File, H.R. 852, proposed by Congressman LaHood.
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You know, there have been a lot of studies, and we have alluded to them here today, about how many computers are out there, and that varies by the size of farm and the region. But clearly the trend is toward more on-line computer usage by our farm families and the idea of allowing farmers the opportunity to have greater electronic access to information and programs at their local USDA service center makes good sense.
Now, USDA has begun to move in this direction by putting forms and information on the USDA Web site, but in the county office we are still operating with some very old systems. We have a system 36, we have a 3 B–2 connected to databases in St. Louis and Kansas City. They do not communicate with one another. We cannot network and we cannot reach the Internet with those.
As you were told earlier, there are some PCs that have come out into the counties lately, but those do not connect to our current databases in our old computers.
We do believe the sky is the limit and the employees of the FSA county office are ready, willing and capable of implementing the system of e-filing that you are talking about.
We also would emphasize we think the access must include a GIS system, because those aerial photos have the information farmers need to use, and we see, if that is implemented, it will be an opportunity for us to provide wider service to other agencies and the community. However, all of this hinges on adequate funding, permanent staffing in the future, and proper training in the computer enhancements we will be receiving. NASCOE sees the E-File Act as an important effort that will require commitment of dollars and training of our staff. To this point FSA has been downsizing in front of technology. It makes good sense to implement the technology and let the staffing result from it.
Since we are already understaffed today at county offices, county office staffs will embrace the E-File Act as a time safer they desperately need. Perhaps our greatest fear, and I think this is a legitimate fear from some of the folks due to the downsizing, is that Congress and the Department might just see it as another reason to downsize us. However, as we have talked to our members, we see this as a chance for us to provide much better service and to catch up.
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I want to qualify my comments with three very important areas that NASCOE is concerned about. One, of course, is adequate budget and permanent staffing to make this thing work. Appropriate program reforms. That means some of our forms and programs have to be much simpler if we are going to put them on the Internet. And of course the improved technology. Many county offices are cutting corners and streamlining where possible and trying to make the changes along the way. In fact, if we see the kind of program activity we saw last fall, which when I left home all of the market prices were below production costs, so I see a tremendous demand for our services coming up here shortly, if we see that kind of activity again, which I think we are going to, and we have to live with the budget you all have been sent over here, which drops another 650 man-days over what we started with last year, we are going to have a real difficult time providing the services that our farm families expect.
So I feel we need a signal from Congress and the administration that the unjustified cuts will end and adequate funding and staffing will be allowed for us to implement this system.
We think that without adequate funding, the enhancements will be delayed and program reforms will be limited. Likewise, if there is inadequate program reform, the customer is going to suffer and county offices will not be as effective as they could be. Again, if technology is inadequate, which is what we are dealing with, we remain inefficient and program reforms are limited and staffing requirements are greater.
My point is that we need to look at all three of these areas as well as looking at the new technology, and we want to be sure that also we get the training. Oftentimes out there we get new things, but we don't get budget to train with. We have got some awfully highly qualified folks, most of them have PCs at home, most of them are ready and willing to embrace this technology. We want to be sure that we get the training to do the job that we want to do.
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NASCOE views this legislation as a single but very positive step in the right direction, and I want to thank you for the opportunity to be here and will be happy to try to answer any questions.
[The prepared statement of Mr. Newton appears at the conclusion of the hearing.]
Mr. GOODLATTE. Mr. Komar, welcome. Pleased to have your testimony.
STATEMENT OF STEVE KOMAR, EXECUTIVE VICE-PRESIDENT, FISERV, INC.
Mr. KOMAR. Thank you. Good morning to members of the subcommittee. My name is Steve Komar. I am an executive vice-president with Fiserv, Inc., and I am involved in that organization's delivery of cash and treasury management capabilities and mortgage and lending products to basically the financial services industry, financial institutions, on both a national and global basis.
Fiserv is a leader in the provision of technology and other support services to the financial services industry. It has a number of relationships with Government agencies as well, the Department of Agriculture being one of them.
We service today—well, actually we started from very humble origins ourselves, if you will, in the mid–1980's, a small start-up corporation in the technology business, and today we represent well over 7,000 financial institutions on a global basis. We have about 12,000 to 13,000 employees. Interestingly enough, we do about $1.3 billion in revenue, which was an interesting comparison to something I heard earlier this morning.
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My focus here today is to try to give an assessment or interpretation of how we see technology and development in the e-market market area affecting our customer base and our competitive environment within the financial services industry. However, I do think there are a number of interesting comparisons that while my statements may be general, they may also have some applicability to what we are talking about in regard to the Department of Agriculture.
Forgive me, I am also supposed to request your permission to revise and extend my statement should that become appropriate for a period of 5 additional days.
Mr. GOODLATTE. So ordered.
Mr. KOMAR. Fiserv provides services, as I mentioned, to over 7,000 financial institutions. The truth is it provides them to community bank environments, local neighborhood financial institutions, if you think in terms of credit unions and community banks, and at the other end of the spectrum, provides them to money center and global banks in the over 100 billion market size segment. The net of that is we see the full competitive span, and I think there are some parallels in terms of dealing with agri-giants versus local small business entrepreneurial farmers.
The one thing we found as an organization and that our customer base has found as we look back over the past 10 years and into the future is historically financial institutions have spent all their time driving product that they defined spoke their marketplace and expected their target market and customers to positively receive those and use them. As technology has progressed, as the knowledge and comfort of individuals with technology has increased over the past 5 years, we have found a rather dramatic change in terms of what the expectations of the marketplace are, and it has forced us to move to competitively respond to those.
Absent that, I think our business would suffer dramatically. This is a reality of what is happening to our clients, the financial institutions, to meet the expectations of their customer bases going forward.
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If we look at the past 5 years, we went from a product environment to what we call a marketing or sales-driven environment, and we are now today dealing with what we call a customer centric environment, which means the consumer is king. The ultimate client will define the environment of the future. It will demand the multiple delivery channels that we are all struggling to put up with today and to put into place today, and I think that is very relevant to some of the challenges facing the USDA today.
Competitively, we have gone through bank consolidations, de novo banks, the arrival of de novo and other non-traditional banks, and a change of revenue streams that we provide to our client base. The one thing we have come out of this with is we have to focus on relationship management to succeed. If we do not, we will pay the price tag.
Multiple delivery channels, ease of the client, access to good, competent, accurate information at the client's will and behest, 24 hours, 7 days a week, at their convenience and at the convenience of the bank; not 9 to 3 bank branch operating hours, but complete and total access. If we fail to respond to these, again, I think there will be a very clear impact on our business.
One of the other things we have found, our business has been—for the betterment of our business has been outsourcing, and that is that many organizations, certainly in the financial institution sector, and I believe and suspect in the Government area, have come upon the wisdom of building their core competencies, core capabilities, but then seeking the right amount of technological support from outside sources to maximize their returns for their dollars expended. I think that has some real applications to some of the challenges facing the USDA.
One other comment I would offer, as I am into my red light phase, is that we are finding very clearly that the business equation is dramatically changing. As we put these changes in place, and we must to satisfy our clients, there is not much debate about it, as we are putting these into effect, we are finding a dramatic change in the business equation, and I think that needs to be part of the consideration, and I am sure it is, on the part of the USDA, that says, yes, there is some up-front investment capital to accelerate and release these efficiencies and these capabilities to the marketplace, but on an ongoing expense basis, it is a different world.
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If you think simply in terms of discount brokerage, there is a reason why with Internet and e-market access, discount brokers can offer $5, $6, and $7 trades. It is not that they were pirates or robber barons 10 years ago in terms of delivering that capability, but in fact the cost of servicing a transaction dramatically drops, and that is where the real opportunity and benefit is. You think out 2 or 3 years in new environment, we are looking at cost per transaction dropping from $20, a customer service transaction, to 10 and 15 cents a transaction. This is where the payback will come, and I think it is part of the challenge that everybody faces going forward. It also should be the incentive for us to push aggressively for 852 and any other e-commerce initiatives, because the payoffs are not that far off, and they are quite exciting in terms of what it will do to both the service competency, capability being provided as well as the cost of doing it.
Forgive my overrun. I will go quickly to closing. We do feel that there are in our industry clearly demonstrated opportunities to bring cost savings and increased capability to the marketplace, to the target customer, and I think again that is part of the challenge here, the need to focus on total customer service, accurate and timely data mining, and that I presume is clearly part of the USDA Legacy challenge, and we need to put in place the capability to get incremental strategic planning and other external resources to support the ongoing environment. It can be done much more cost effectively when certain external resources are used in terms of supporting the ongoing cost of the technology. It can generally be done much more efficiently by the use of third parties.
Benefits to the client I think we have heard about a lot. I won't belabor it. But we talk about e-filing today, I call it e-mail and e-market service, the greater concept. You know, it started in 1970's. It is not new technology. It is not a new technology, and we are having quotes that in fact today e-mail transactions are exceeding 10 billion per day across our global landscape.
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Benefits to the client again, timely accurate information, 7 by 24 availability, single point of contact for total information and increased efficiency and productivity on the part of the clients, which would be the farmer, but also on the service provider, which is the USDA. Information is the key enabler and information access is the secondary key enabler.
[The prepared statement of Mr. Komar appears at the conclusion of the hearing.]
Mr. GOODLATTE. Mr. Komar, let me interrupt. We have to go for a vote. The request you made to be able to revise and extend your remarks will not be necessary unless we cut you off here a little bit short. Everything you have to say will be made part of the record.
We will go and vote. We have three votes, and therefore it will probably be about 30 minutes or more before we get back to continue with you, Mr. Dollar. We apologize for the interruption. We will come back and hear your testimony and then get the opportunity to ask some questions of each of you. So thank you for your forbearance.
[Recess.]
Mr. LAHOOD [presiding]. The committee will come to order. Mr. Goodlatte had to go to a lunch, and I apologize for the delay. One of the things that we do get paid for around here is voting, so when they ring the bells, it is kind of important that we show up over there. So I apologize for the delay.
Mr. Dollar, if you would like to proceed with whatever comments you have, your full statement will be made part of the record.
STATEMENT OF WAYNE DOLLAR, PRESIDENT, GEORGIA FARM BUREAU, ON BEHALF OF THE AMERICAN FARM BUREAU FEDERATION
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Mr. DOLLAR. Let me make one comment that kind of concerns me. I don't like to learn bad habits, and this counts against my time. But this red light up here, I told this guy here, they have signal lights outside. I don't know what he is going to do, but he totally ignored this one. So watch the red lights.
I am Wayne Dollar, president of the Georgia Farm Bureau and a member of the Board of Directors of the American Farm Bureau. I raise livestock, corn, peanuts, soybeans, wheat, timber and pecans on our farm in Ochlocknee in Thomas County, GA. We appreciate your efforts in holding this hearing. Although H.R. 852, the Freedom to E-File Act, is only a 1-page bill, the impacts it will have on farmers and ranchers should be immense.
I ask am sure every member of this subcommittee has heard numerous constituents object to the long lines at their county farm service agent offices as well as the need to travel to more than one county office when producers own and/or operate land in counties, not to mention the recapping of nightmarish stories of filling out form after form for various USDA agencies. A simple, one-page bill could reduce or eliminate many of these objections.
This bill builds on promises made to producers by the Department for a long time. Very simply, H.R. 852 says that within 150 days, the Department will establish an electronic filing and retrieval system to enable the public to file all required paperwork electronically with USDA and to have access to public information on farm programs, quarterly trade, and economic and production reports.
For practically every industry, the World Wide Web is a mainstream way of doing business today. Farmers are already able to apply for credit through the Farm Credit System through the Internet, file tax returns with the Internal Revenue Service, and order supplies from numerous vendors through the Web. Similarly, FSA could make greater use of telecommunications to deliver farm programs and reduce the need for farmers to visit a county FSA office.
Regulations make up a large portion of a farmer's costs. Experts put the cost of Federal regulations borne by the private productive economy at $68 billion annually, 20 times the size of projected Federal deficit for fiscal year 1997 of $34 billion. This estimate may be low because it does not include the cost of loss productivity.
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We estimate the cost of Federal regulations on production agriculture exceeds $20 billion annually. This estimate is based on farm production accounting for 3 percent of gross domestic product, and therefore 3 percent of the overall Federal regulatory burden of $68 billion. We believe that the share of total Federal regulatory costs borne by production agriculture is probably greater than $20 billion since farmers and ranchers are at the eye of the environmental regulatory storm due to our dependence on land, water and air.
Representative LaHood's bill would begin to chip away at these regulatory costs, especially those captured by the lost productivity estimates. We envision H.R. 852 as providing three critical services to producers: Allow producers to file and retrieve information electronically and reduce duplication of efforts; provide producers with timely USDA news and information in order to improve their ability to make timely and accurate decisions; and provide producers with self-service decision support tools to enhance their ability to assess decision alternatives, estimate impacts and perform calculations.
FSA service centers are struggling with increased workloads and reduced budgets. Both of these could be eased with an improved electronic access system. Current electronic systems are fragmented between agencies and even between programs within the same agency. While there may be a sizable amount of information contained in the current system, it is for the most part too unorganized to be useful. We strongly believe FSA could transact more business with farmers through the mail and by telephone and computer, thus increasing the efficiency of its operations.
It is important to remember that producers must still visit the county office to sign up for loan deficiency payments, disaster assistance, direct operating ownership and emergency loans, certify acreage, maintain conservation requirements, sign required paperwork for peanut and tobacco programs, fill out required forms for participation in the Marketing Assistance Program.
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In addition, even though the 1996 FAIR Act reduced some paperwork, many farmers who lease land must visit the county office frequently because payment designations can be made only for the length of the lease.
I thank you for having this. I hope that something really happens and thank all of you for what you do for the farmers and ranchers of the USA.
[The prepared statement of Mr. Dollar appears at the conclusion of the hearing.]
Mr. LAHOOD. Thank you for being here. We appreciate it and appreciate the support of your organization.
Mr. Newton, you were here during the USDA testimony. Tell me what you have in terms of infrastructure in your own office, computer infrastructure, computer capability currently, and what it would take if this kind of legislation were passed? I am just trying to get a sense from where you come from in southern Illinois, what you currently have and what you believe it would take for you if this bill were to be passed?
Mr. NEWTON. We currently have the major portion of our data if a system 36. It is an IBM system that we put in back in the 1980's. That is what we process almost all of our farm program payments through. Then we have a 3 B–2 system which we handle the credit things through, and we are slowly kind of integrating those two.
To me, what we need is to move as quickly as we can to the PC environment. I was interested in what Mr. Dollar said. What he is saying is you could free us up a lot out there if a lot of the repetitive things they have to do, they could just do it electronically with us. We can't do that now. The PCs that we have won't access that database. But it is my knowledge, and again I am not a computer expert, but it is my understanding we can put a server in there that allows that to happen, and that is the next step to me that I have to have before I can start seeing that I get the data out there that they need.
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The other thing, if we can put that database in place, we can get requests every day wanting reports, maps, all of that. And we have only four program texts to do that stuff with, and I have people needing LDPs, I am going to do LDPs. If it was in the system, the farmer could access that and provide it to their crop insurance agent. We would be free to do something else.
But in answer to your question, somehow we have to move to that PC environment, and we have to get that data that is in the 36 over here where it is usable.
Mr. GOODLATTE. Mr. Komar, have you thought at all about what the USDA said about what the cost would be to implement an e-file system based on your expertise? Or do you know enough about the system around the country to know? I am just kind of curious what you were thinking about when they were testifying. Just in terms of the cost of equipment and what they were saying about having old computer infrastructure and all that sort of stuff. Do you have any comments about any of that?
Mr. KOMAR. I come with a great deal of respect for their environment and some of the challenges that they face. As I was sitting there, my reaction was that I thought that they had a grand plan or a grand scheme for an architecture that probably had, my guess, my opinion, a 36- to 48-month implementation life, and that to try and keep that on track they were looking askance at some short-term fixes.
I can only relate to my own experience, which is when we have a customer base and we have that kind of plan, which we do, because we have a lot of old Legacy systems ourselves, the reality is we have to find a way to meet that near term challenge. In today's environment, with the kind of plug and play capability you have, it seems there could be a plan that with allow near term quick enhancements that were still in sync with the longer term plan. When the other piece of that architecture came into play, be it a centralized architecture or whatever else, you would still be able to take this up-front capability, which is literally PCs and servers. In today's world, that is not normally a huge outlay in terms of dollars to put that capability in place, relatively short-term, and yet have enough forethought as part of your plan to make sure that that will work years later when your grand scheme is in fact operative.
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So when I heard some of the numbers, my reaction was although I have a limited knowledge of that branch of infrastructure, it would seem to me that those monies would have been more than adequate to fund that environment.
Mr. LAHOOD. You have primarily worked with banks, I take it?
Mr. KOMAR. Primarily, yes.
Mr. LAHOOD. If you go into a bank that has a little bit of computer infrastructure, what you try and do then is develop a plan for whatever they are trying to do long-term. What you are saying, would that be comparable to what you heard here today in terms of USDA?
Mr. KOMAR. I think it would be. I thought I heard an awful lot of parallels. Obviously, there are limitations on what I know and they are superficial at this point, but the architecture seems it would work and it is very comparable to what is going on in industry today.
I guess my only comment is putting in e-mail capability as a stand-alone access, I would imagine there would be any number of industry people that could tell you that can be put in place in months, not years.
Mr. LAHOOD. And what about the cost?
Mr. KOMAR. The cost is nowhere near as intensive as putting old prior generation environments into place would be. You think in terms of a multiple of perhaps one-third or less of what it would cost you to do that with an IBM 36 environment or an old mainframe environment. You are dealing with much higher multiples, versus what it would cost in investment capital today.
Mr. LAHOOD. Mrs. Massey, do you have a computer in your home?
Mrs. MASSEY. Yes, sir, we do. We have our accounting package and we keep track of irrigation, chemical application. We have a mapping program where we can know from year-to-year where we planted what and have records of all of that sort of thing. I think that we are fairly typical of the farmers that we know, and I have talked with other members in our organization, and I think it is a fairly standard thing that most farm offices do have computers.
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Something that I did not bring out in my presentation or testimony is the concern that we have that there are some farmers out there who do not have computers, and until their dying day they will not have computers. Even though I am very supportive, not I, farmers in general are very supportive of the availability of electronic filing, we don't want those farmers and ranchers out there who don't have to get lost in the shuffle.
Mr. LAHOOD. That is a good point. I think there will always be people who will want to go in and face-to-face talk to somebody, people that they have known for years and years and years. That is a good point. I really don't have any other questions, unless any of you have anything further to say or any other comments you would want to make, I would be happy to hear from any of you.
I do appreciate very much the support that you have given to our effort here and the suggestions that you have made, and it will be very helpful to us as we move ahead.
Do any of you want to say anything further or have any other comments? Mr. Dollar.
Mr. DOLLAR. I would just remind you, and I am sure you know, that this statement here covers 50 States and Puerto Rico.
Mr. LAHOOD. Your statement?
Mr. DOLLAR. Yes, sir.
Mr. LAHOOD. I realize you represent a very, very significant organization, Mr. Dollar, and I do appreciate your coming here today. I appreciate the American Farm Bureau's interest and support for this legislation. It means an awful lot to us in terms of what we are trying to accomplish.
Mr. NEWTON. Congressman, I did want to just make one point before. First of all, I wanted to say something a little off the subject. You all passed a supplemental resolution for us that helped us out out there, and we appreciate that very much.
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Mr. LAHOOD. Yes, sir. We appreciate the work you do. We know that over the last several years you have given at the office many, many times, and there has been a lot of reductions in what you folks do. We haven't decreased the paperwork, but we have decreased the man and woman power. We appreciate the fact that a lot of your people work long hours when they have to and work overtime, and I have a lot of folks in my own district that I talk to a lot about this. I know there is a lot of hard working people in those offices out there. We appreciate that.
Mr. NEWTON. We appreciate that you understand where we are coming from there. We wish we had this environment last year. That is where we are with this thing. So all I am saying is as we progress, keep in mind that we do need those people and we do need adequate staff to serve this crisis that we have out there now. But we will get it done for you, if you give us the staff and the training. We can get this in place, if they give it down to us to use.
Mr. LAHOOD. Understood. Thank you all very much. That concludes our hearing for today. Thank you to all the staff for your help on this.
[Whereupon, at 12:35 p.m., the subcommittee was adjourned, subject to the call of the Chair.]
[Material submitted for inclusion in the record follows:]
Statement of Ira Hobbs
Mr. Chairman and members of the subcommittee, I appreciate the opportunity to meet with you today and discuss the proposed Freedom to E-File legislation on behalf of the U.S. Department of Agriculture.
USDA supports the Freedom to E-File Act, H.R.852, to enable farmers, ranchers, landowners, producers, and farm borrowers to do more of their business with the USDA over the Internet. As it is currently drafted, H.R. 852 would require the Department ''to establish an electronic filing and retrieval system to enable the public to file all required paperwork electronically with the Department of Agriculture and to have access to public information on farm programs, quarterly trade, economic, and production reports and other similar information'' not later than 180 days after the date of enactment.
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The Department supports the goals of this legislation. USDA agencies already have broad authorities to use new information technologies to improve our service to customers and agencies are already moving in this direction. However, we believe some clarification of the goals and time table of H. R. 852 along the following lines would be useful. We strongly recommend that the legislation be modified to support the Department's current efforts to:
develop a phased 2-year approach to providing Internet-based services, as opposed to a single electronic filing and retrieval system;
focus primarily on the three USDA service center agencies—the Farm Service Agency, the Rural Development agencies, and the Natural Resources Conservation Service; as well as the Risk Management Agency;
coordinate implementation of each phase of Internet-based service with the necessary technical infrastructure investments and business process re-engineering requirements; and
plan implementation around the availability of program and technical staff, now working to address the current farm crisis and year 2000 priorities;
These changes would permit the Department to implement this legislation over a time frame that is consistent with current plans to make greater use of the Internet to deliver programs and services. The Department has already developed a broad two-year plan, with three phases, that would substantially achieve the goals of this legislation if adequate funding and staff resources are available.
The first phase of this plan would take approximately 180 days to complete. During this phase, USDA would establish an Internet-based system to give farmers the ability to download and fill-in forms for the highest-volume programs and services delivered by USDA service center agencies. Completed forms would still have to printed and faxed or mailed back to the Department due to the lack of security and distribution methods. During phase one the Department would also increase the volume and coordinate access via the Internet to news and information produced nationally for farmers by service center agencies.
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Completing this phase would require the Department to allocate sufficient staff resources to create user friendly forms and form guidance, and implement them on a web server in a standard format. Staff will also be required to design and develop procedures for simple and organized submission of program news and information from service center agency and RMA staff.
We estimate that the funding requirements for phase one would be $250,000 to initially implement the forms system, and $50,000 for annual support. These estimates assume that the forms system does not require purchasing licenses for client software.
Staff and resources for this phase will be funded out of the existing fiscal year 1999 budget. In addition to developing plans for the phase one effort, we have already begun the process of converting paper forms to a standard appropriate electronic format.
The goal of phase two of our plan would be to allow farmers to actually submit applications to the Department on line while providing a number of additional Internet related services. We originally estimated that phase two of this initiative could be completed within 12 months. However, this assumed that the Department would receive $74 million in funding for the Service Center Initiative (SCI) which was requested in the fiscal year 2000 budget. Unfortunately, the recent House action on the fiscal year 2000 USDA Appropriations Bill eliminated the funding requested for the SCI. As a result, USDA does not have sufficient funding to achieve the full electronic access capabilities as mandated in H.R. 852. Unless additional funding is made available, we believe that only the first phase of our plan is achievable.
If funding is available, in Phase II of the initiative USDA would establish the capability for farmers to submit completed forms for all major programs and services over the Internet. The Department would also establish Internet-based systems to enable farmers to quickly find and evaluate the features and options for some FSA, NRCS, Rural Development, and RMA programs, and communicate with service center staff.
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Implementing this capability depends upon the development of an integrated E-mail solution for service center offices, as well as sufficient staff time and funds to plan, procure, and implement an encryption and authentication solution to ensure the Department can verifiscal year a farmers' identification and the security of the content of submitted information. This could mean requiring every farmer to establish a PIN number. Implementing phase two also requires staff time and funds to create a distribution system that will ensure completed forms are received by the appropriate agency staff, as well as training for program and field staff on new systems.
We estimate that $500,000 is required to develop and $200,000 to annually support an integrated security solution. In addition, $2.25 million is required initially to provide basic Internet-based services with $1.4 million for annual support.
Assuming that the Department achieves adequate funding to accomplish phase two, we estimate that the third and final phase of our plan can be accomplished within 24 months. This assumes that adequate funds are made available for these initiatives in fiscal year 2001 as well. Completing phase three would allow USDA to provide farmers the capability to complete and submit all program forms over the Internet; deploy a limited number of software applications online for farmers to use in executing program application or service transactions; and deploy the infrastructure necessary to enable Internet access to new applications.
Implementing this capability depends upon the deployment of the Service Center Initiative Common Computing Environment network servers, data connectivity solutions, and additional personal computers, as well as re-engineering and improving Service Center Initiative programs to enable farmers and Service Center staff to access and use program data electronically.
An estimated $1.3 million would be required for additional electronic access investments, with $375,000 required for annual support. Investment opportunities to accomplish phase three will be carefully considered as the Department's Fiscal Year 2001 budget is developed.
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Mr. Chairman, members of the Subcommittee, let me close by reiterating again the Department's support for the goals of this legislation. It is consistent with the emerging trend towards electronic government, to use information technology to more effectively serve our customers, which USDA agencies strongly support. We have already begun working in this direction. However, as I mentioned earlier, the rate at which we can achieve the vision articulated in the Freedom to E-File Act will be determined primarily by the availability of funding and staff resources. We look forward to working with you to achieve the goals of this bill. Thank you again for the opportunity to speak before you today.
Statement of Wayne Dollar
Mr. Chairman, I am Wayne Dollar, president of the Georgia Farm Bureau Federation and a member of the board of directors of the American Farm Bureau Federation. I raise livestock, corn, peanuts, soybeans, wheat, timber and pecans on a 1,000-plus acre farm in Ochlocknee in Thomas County. We appreciate your efforts in holding this hearing. Although H.R. 852, The Freedom to E-File Act, is only a one-page bill, the impact it will have on farmers and ranchers should be immense. I am sure every member of this subcommittee has heard numerous constituents object to the long lines at their county Farm Service Agency (FSA) offices, as well as the need to travel to more than one county office when producers own and/or operate land in multiple counties, not to mention the recapping of nightmarish stories of filling out form after form for various USDA agencies. A simple one-page bill could reduce or eliminate many of those objections.
This bill builds on promises made to producers by the department for a long time. Very simply, H.R. 852 says that within 180 days, the department will establish an electronic filing and retrieval system to enable the public to file all required paperwork electronically with USDA and to have access to public information on farm programs, quarterly trade, and economic and production reports.
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For practically every industry, the World Wide Web is a mainstream way of doing business today. Farmers are already able to apply for credit through the Farm Credit System via the Internet, file tax returns with the Internal Revenue Service electronically, and order supplies from numerous vendors via the Web. Similarly, FSA could make greater use of telecommunications to deliver farm programs and reduce the need for farmers to visit a county FSA office.
Regulations make up a large portion of a farmer's costs. Experts put the cost of Federal regulations borne by the private productive economy at $688 billion annually—20 times the size of the projected Federal deficit for fiscal year 1997 of $34 billion. This estimate is low because it does not include the cost of lost productivity.
We estimate that the cost of Federal regulations on production agriculture exceeds $20 billion annually. This estimate is based on farm production accounting for three percent of gross domestic product and therefore three percent of the overall Federal regulatory burden of $688 billion. We believe that the share of total Federal regulatory costs borne by production agriculture is probably greater than $20 billion since farmers and ranchers are at the eye of the environmental regulatory storm due to our dependence on land, water and air.
Rep. LaHood's bill would begin to chip away at these regulatory costs, especially those captured by the lost productivity estimates. We envision H.R. 852 as providing three critical services to producers:
Allow producers to file and retrieve information electronically and reduce duplication of efforts;
Provide producers with timely USDA news and information in order to improve their ability to make timely and accurate decisions; and
Provide producers with self-service decision support tools to enhance their ability to assess decision alternatives, estimate impacts and perform calculations.
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FSA service centers are struggling with increased workloads and reduced budgets. Both of these could be eased with an improved electronic access system. Current electronic systems are fragmented between agencies and even between programs within the same agency. While their may be a sizable amount of information contained in the current system, it is for the most part too unorganized to be useful. We strongly believe FSA could transact more business with farmers through the mail and by telephone and computer, thus increasing the efficiency of its operations.
Many hoped one of the benefits of the 1996 FAIR Act would be significant reduction in the paperwork requirements for producers at local FSA offices. While the annual calculations involving historical acreage and yields devoted to agricultural production, market prices for crops, and support prices set by Congress have saved time, new requirements have often offset the time savings.
It is important to remember that producers must still visit the county office to (a) sign up for loan deficiency payments; (b) sign up for disaster assistance; (c) apply for direct operating, ownership and emergency loans; (d) certify acreage if eligible for the noninsured assistance program; (e) sign up and maintain conservation requirements for participation in the conservation reserve program; (f) sign required paperwork for the peanut and tobacco programs; and (g) fill out required forms for participation in the marketing assistance loan programs. In addition, even though the 1996 FAIR Act reduced some paperwork, many farmers who lease land must visit the county office frequently because payment designations can be made only for the length of the lease.
If USDA shifted to using computer technologies, they should be able to operate with fewer staff and offices, and therefore save a significant amount of money now spent on administrative costs. More importantly, usage of new technology would improve the efficiency of fulfilling government requirements for producers and greatly reduce their frustration levels.
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We appreciate your interest in this bill and encourage the committee to report it out as soon as possible.
Testimony of Sheila Massey
Thank you Chairman Goodlatte and Representative Clayton for the opportunity to represent Women Involved in Farm Economics (WIFE) before this Subcommittee. I am Sheila Massey, National WIFE President. WIFE is a grassroots organization with seventeen state associations and members-at-large in almost every state. The technology of electronic mail has become an integral part of our communications system. Today I will share the views of WIFE on how we perceive H.R. 852 the Freedom to E-File Act and the role we foresee for this technology in future communications and business transactions with our Farm Service Agency (FSA) offices.
Results of studies conducted to determine the percentage of farmers with on-line computers indicate that 50 percent of farmers overall have personal computers. The farmers and ranchers who make up WIFE's membership definitely fall into the norm of statistics. I'm proud to say that the members of our organization as a whole have progressed with the times. I would venture to say that the majority of WIFE members own a personal computer as a vital tool for their farm management system.
Accounting, budgeting, irrigation and chemical application records, production records at harvest and shipping records of those harvested crops are just a few of the day to day functions that our own computer is used for in our farm office. The ability to use our computer for mapping to keep track of where crops are grown from year to year is another valuable tool.
Today computers in our farm and ranch offices serve purposes other than the basic record keeping uses I have mentioned. The accessibility of producers to go on-line to acquire up to the minute agriculture market reports and weather forecasts greatly assist us in day to day decision making. The ability of agricultural producers to access and file paper work over the Internet is a very interesting proposal, especially if this system can be implemented using existing funds and at no additional cost to taxpayers.
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Considering the possible benefits e-filing would provide what first comes to mind is the distances we travel to our FSA county offices to fill out paperwork and sign forms. I live in the southwest where the term ''in the middle of nowhere'' definitely has significance. Our farm, in the rural community of Animas, located in the bootheel of New Mexico, is a 40-mile trip one-way from our county FSA office. The distance from our farms and ranches to our USDA Service Centers is not only an issue in the southwest, but the entire western U.S. and other parts of the country as well. The ability to save a trip or two into town is a welcomed prospect, especially since deadlines always come when we need to be in the field.
The possibilities proposed in the Freedom to E-File Act are very attractive. Farmers' ability to have greater access to information electronically makes good sense. The ability to communicate electronically with USDA Service Centers will save farmers many miles of driving and enable them to be in the field working instead of on the road.
As we consider the possibilities that H.R. 852 is proposing, several questions must be addressed. First, will our FSA offices be equipped with the updated technology to facilitate electronic filing? Will our county offices have computers capable of networking and accessing the Internet? Will the county office employees have the training required to do the job that will be expected of them? Will new PC's being received by county FSA offices be capable of linking to the databases currently in the older systems?
If the answers to all of these questions are yes, then we most definitely are in business. If any of the answers are no, then we most definitely have some snags to work through. Keep in mind that the success of doing business electronically lies in the ability to do so with no interruptions of service due to antiquated technology in our USDA Service Centers.
What will be available to producers conducting business electronically? Will we have the capability to access the entire database in our local FSA offices? Will we have access to GIS aerial maps? Will we have access to the wealth of information, which can be found in the FSA database? Will we be able to link to this information without restrictions? Most important, will information transmitted from our farms to the FSA offices be protected? All these questions must be addressed in order for farmers to know what to expect in regard to electronic filing.
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Keep in mind that many who live in rural America are still using party phone lines that are not conducive to uninterrupted electronic mail service. It must also be considered that some farmers have opted to receive free e-mail service in lieu of a service available to them at a monthly fee. One WIFE member emphasized that even though the availability of electronic mail is admirable, when faced with choosing the free service instead of one which might provide better service but requires a monthly fee, it is necessary to save money whenever possible.
It is imperative that we not forget the farmers and ranchers out there who do not have computers, and, until their dying day, will not have a computer in their office. The availability of doing business electronically is great but not if it takes place to the detriment of those producers who do not have that capability. Therefore we must address the issue of adequate staffing in our county FSA offices. We cannot address staffing without addressing a budget that will provide adequate staffing levels. Staff that will deal with the electronic filing system and who will continue to be available to work on a one to one basis with the producers who prefer to do business as they've been doing it for years—face to face.
WIFE has long maintained that adequate staffing levels for the Farm Service Agency are an absolute must. In light of this proposed legislation H.R. 852, we reemphasize the fact that we must have no further downsizing or reduction in force at the county level. We would also emphasize that the current staff must be trained adequately to facilitate a smooth running electronic filing system.
WIFE looks forward to the prospect of doing business through an electronic filing system. Its possibilities are endless. The success of such technology can only enhance the delivery system to which we as farmers and ranchers have become accustomed through our Farm Service Agency county offices. We urge both Congress and the Administration to avoid any unjustified cuts in funding, which would prohibit the technology and the permanent trained staff required to implement that technology.
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Thank you again for the opportunity to testify before this Subcommittee on H.R. 852. WIFE will continue to be available to work with the Subcommittee on issues concerning the delivery system of the Farm Service Agency and the service they provide our nation's farmers and ranchers.
Testimony of Paul Newton
Thank you Chairman Goodlatte and Representative Clayton for the opportunity to testify. I am Paul Newton, Past President of the National Association of FSA County Office Employees, known as NASCOE. NASCOE represents FSA County Office Employees on issues related to administration of farm programs. I am the County Executive Director for the Clark County FSA in Illinois. Our County employees work with USDA farm programs everyday, and many of them work on farms themselves. I am no computer whiz, but I do hope to provide the Subcommittee with our experience, common sense, honesty and frontline perspective on the Freedom to E-file Act, H.R. 852 introduced by Representative Lahood.
Numerous studies have been conducted attempting to determine the percentage of farmers with on-line computers. In my county, we believe that over 50 percent of the farmers have a personal computer which they are using in their farming operation. Twenty percent of these farmers are using the internet for ag information. This usage varies by region and size of farming operation, some counties tell us that only 5 percent of their farmers have computers, but the trend is clearly toward more on-line computer usage by our farm families. The idea of allowing farmers the opportunity to have greater electronic access to information and programs at their local USDA Service Center makes good sense. USDA has begun to move in this direction by providing program information and forms on the USDA web-site. However, in county FSA Offices, we are working with computer systems that were implemented in the mid 1980's. We use a system 36 computer, which is connected to a database in Kansas City, and a computer that is connected to a database in St. Louis. Neither of these systems are capable of networking or access to the internet. We are just beginning to receive PC's in each office. Unfortunately, these computers are not linked to the data bases currently in the older systems. So, we have taken some small steps toward a modern computing environment, but we will obviously need much more equipment and training to move to the system suggested in H.R. 852. We believe the sky is the limit, and the employees in the FSA County offices are ready, willing, and capable of implementing a system which will make E-filing possible.
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We want to emphasize that for farmers to file reports and request benefits on-line they must have the capability to access the entire data base in the local office. This access must include the aerial maps, which are not currently included in an electronic database. Therefore, a GIS mapping system must be included in the technology. This should provide a total data base with interactive capabilities to store information such as crop histories, crop yield information, soil types for HEL determinations, wetland determinations, acres enrolled in various programs such as AMTA and CRP. We see this as an opportunity for FSA to provide greater service to other agencies such as Federal Crop Insurance as well as State and Local entities. We see great opportunities to utilize our already efficient and locally led system of program administration with the upcoming changes in technology and the use of on-line services. In fact, we can envision an FSA that becomes a model grass roots government agency that is more efficient, and computer friendly. However, all of this hinges on adequate funding and permanent staffing in the future, proper training in computer enhancements, and program reforms.
There are some questions related to the E-file Act that will require answers, and concerns that will require study. FSA currently requires signatures on most all applications. Computers in FSA are incapable of accomplishing this requirement, therefore, there will be mailing and some manual work involved. As well, producers will have an increasing responsibility to read the directions and program information thoroughly to properly complete forms. Training of staff will require time and money. Currently, FSA has little of both. Finally, as staffing and budget seems to flow with the political winds, technology has also fallen victim to lack of funding and commitment. Above all else, and let me emphatically state, we need a commitment by Congress, the Department and OMB to fund staffing to meet workload, to fund technology on a long term basis and to be proactive in addressing program streamlining and reforms. NASCOE has been diligently pursuing these efforts, but there is seemingly no end to the political barriers. NASCOE sees the E-file Act as an important effort. However, that effort will require commitment in dollars for training and staff. To this point, FSA has been downsized in front of technology. It makes good sense to implement the technology and let staffing result from it. Since we are already understaffed today, county staffs will embrace the E-file Act as a timesaver they desperately need. Perhaps our greatest fear is that Congress and the Administration will see this as just another opportunity to downsize county offices. We see it as a tool to catch up.
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I would like to qualify my comments by reviewing three very important NASCOE priorities to making farm program delivery as effective, efficient and responsive as possible: (1) Adequate Budget and Permanent Staffing, (2) Appropriate Program Reforms and (3) Improved Technology. As we are all well aware, FSA staffing is far below workload levels. As emergencies and disasters occur, FSA permanent county staff is stretched beyond reason at times. County Committees have had their authority eroded considerably and had their training cut back due to funding constraints. County staff does not have time to accomplish mandated activities. Many offices are cutting corners, streamlining where possible, and trying to keep up with changes along the way. In fact, if we see the kind of program activity we saw in the fall and winter of 1998, FSA county offices will simply be unable to deliver the services needed by our farm families. According to the FSA Workload Division, FSA County Office Staff Years were funded at 12,240 staff years in fiscal year 1999 between supplemental and regular appropriations. Assuming fiscal year 2000 is similar or greater in workload than 1999, and considering the cutback of 652 staff years in the county offices anticipated in fiscal year 2000 appropriations. FSA county staffs will be short 2,192 staff years, conservatively. As we continue downsizing beyond workload justified levels, supplementals only result in temporary help, which limits our ability to deliver more complex programs and implement technology changes . We need to see a signal from Congress and the Administration that unjustified cuts will end and adequate funding and permanent staff will be provided to accomplish mandated activities. Without adequate permanent staffing and budget, technology enhancements will be delayed and program reforms very limited. Likewise, if there is inadequate program reform, the customer suffers and county offices are not as efficient as they could be. Again, if technology is inadequate, we remain inefficient, program reforms are limited, and staffing needs are greater. My point is that all three priorities are imperative to a successful administration of farm programs. NASCOE views this legislation as a single, but very positive, step in the right direction. NASCOE will not defend status quo, but rather looks boldly to new ideas and approaches to improving farm program delivery. The Freedom to E-file Act is a positive step in improving technology and its uses.
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I want to again thank the subcommittee for the opportunity to testify. I would be happy to address any of your questions.
Statement of Norbert Soltwedel
Chairman Goodlatte, Ranking Member Clayton, and members of the subcommittee, I am Norbert Soltwedel, legislative chairman of the National Association of Credit Specialists (NACS) of the Federal Managers Association (FMA). I thank you for this opportunity to offer comments on H.R. 852, the Freedom to E-file Act.
NACS was originally organized as the National Association of County Supervisors within the Farmers Home Administration in 1973. Our organization today represents the interests of over 1,500 Federal loan officers within the Farm Service Agency. In 1995, NACS became part of the Federal Managers Association, which represents the interests of the 200,000 managers and supervisors in the Federal Government.
I have spent 33 years working within various USDA Service Centers in Illinois as a loan officer and, now, as an appraiser. My wife and I are also producers, operating a hog and grain farm in Effingham County, IL. I, like many of my fellow farmers, began using the computer for record keeping, spreadsheet budgets, and word processing in the early 1990's. The Farm Dayta satellite has brought us up-to-date markets, news and weather for over 10 years. I was introduced to the Internet four years ago by my high school son and have since become dependent upon my favorite information websites and communication via e-mail. We, like many others, have used our computer to purchase items, download IRS forms, renew a FCC radio license, check the latest regulations, and complete banking transactions. My daily routine in fact begins with a 5:30 AM log on to check news, respond to email, and search out answers to business questions.
At the USDA Service Center, we are now wired for LAN/WAN/Voice and can access the Internet. E-mail and Bulletin Boards are used to communicate internally. New equipment is arriving, but I think we have a long way to go before we are considered to be state of the art in our operations. Training of employees in the use of all the new technology is not well funded. At worst, it tends to be on a learn as you go basis. Nevertheless, our employees are excited about finding ways to do their job more efficiently.
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E-FILING IS THE DIRECTION OF THE FUTURE
H.R. 852 is an important step forward because even though our loan clientele as a whole may not be as computer adept as the general farming population, they recognize the direction in which we are all heading. Farm loan officers now have laptops that we take with us to the farm. We are also assisting borrowers in putting their Farm Plans on these computers for quick reference during our frequent opportunities to provide financial counseling (Loan Supervision). We are encouraging our borrowers to put these same programs on their home computers to facilitate better interaction and communication. Within my own appraiser profession, Electronic Data Interchange (EDI) is the wave of the future. A large portion of our contracted appraisals could be electronically sent to our offices in lieu of the bulky paper reports saving time and expense in the necessary acquisition of mortgage appraisals.
E-FILING SAVES TIME
H.R. 852 is needed because it will help farmers save time. Everyone seems to have increasingly busy schedules; farmers are no exception. FSA business processes have not placed enough value on a farmer's time. Every form seems to require an office visit and programs are offered via sign-up periods, which clog our offices over the specified window of required contact. Forms exist to apply, to certify, and to provide production evidence. Not all of these require personal contact. It would be much more convenient and efficient for both the farmer and the office staff to interact over the Internet. Elevators could also participate in this process of providing production evidence and sales records. Our loans must account for sales of security property and this information is ideally suited to e-mail transactions involving the buyer. Every non-essential office visit is an inconvenience to the farmer and an interruption of the office staff work.
During the recent SHOP (Small Hog Operators Program), it was possible to download the application from the USDA web site. This enabled my wife to take a fully prepared application during her first office visit. There was no returning home to check records for missing information and it took only a few minutes of staff time to process the application. It would have been much better if that form could have been filled out on line and submitted as a web document from our home or even just filled out while on line with the ability to print the completed form for submission to the local office. Completed forms might also be faxed into the Service Center computer since many farmers own fax machines. Once these forms appear on the Service Center computer, a technician could view them for accuracy and call or e-mail the producer to clear up questions. With proper software, necessary information could be electronically stripped from these forms and transferred into a data bank without requiring information to re-keyed or even produced in paper form. Arrangements will need to be made to allow for electronically filed signatures as well. Recent policy has allowed facsimile submissions but a producer must still visit the local office to affix an original signature and the local staff must re-key information into their computers. There will remain the need for Service Centers to make personal contacts, especially in evaluating and processing farm loan requests as well as to conduct program outreach.
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ISSUES TO BE EXAMINED WITH H.R. 852
It will take time for the agency to develop the procedures and forms to support electronic filing, so time restrictions must be flexible. Still, it must be done. Some other issues would also need to be addressed for the proper implementation of H.R. 852. It is important that Congress ensures that the Department will have the necessary resources and funding to carry out this change, while not cutting existing programs. Furthermore, in light of the Department's track record, it is important for the Congress to provide the necessary oversight to ensure proper implementation of those resources.
Security concerns must be addressed to ensure the integrity of our loan accounts. Lenders participating in the guaranteed loan programs, buyers of mortgaged or LDP grain, and farmers themselves must be assisted in making this transition to greater use of the Internet. A serious effort must be made to eliminate any form or process that is not essential to good business. I think on-going efforts by FSA to streamline the process in the Farm Loan area are making good progress. The recent Guaranteed Approved Lenders Program serves as an excellent example. Congress must make sure that this legislation enhances, not hampers, these efforts.
H.R. 852 SHOULD INCREASE EFFICIENCY AT THE DEPARTMENT
While we must retain sufficient Service Centers to serve the public, we recognize that there are some offices that should be closed in the name of efficiency. Our Farm Loan Managers typically serve multiple counties and view the advent of electronic filing as an opportunity to be closer to their borrowers. Banks once touted that their services were as close as one's mail box; today they are as close as your computer. Two-thirds of our farm loan clients are now lenders who use the Guaranteed Loan Program. They certainly have the computers and should welcome the electronic filing of applications and reports. The Farm Credit System is already accepting electronic applications on their web site. My local Farm Credit Association is receiving six applications per week through the St. Paul web site. As we spend fewer resources in getting information, we can spend more time in solving the needs that our farmers bring to us.
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If H.R. 852 becomes law, it will hopefully bring about positive change at the USDA. As users of automated information systems in the Service Center, we have noted a tendency to use computers as a mirror of the way things have been done in a paper environment. There has been an unwillingness to look at the world the way we would like it to be or even to follow innovations of the commercial world, preferring instead to continue doing business as it is today. Software is too often created as proprietary government systems rather than purchasing off the shelf software. The result has been higher costs, slow development, and endless testing and redevelopment. This culture needs to change. As mentioned earlier, EDI is the real world and a paperless office is not a pipedream. It will take time to equip and train ourselves but the possibilities are absolutely exciting.
H.R. 852 is the first step to making all of this possible. I want to thank Representative Lahood for introducing this legislation and I urge the subcommittee to act favorably on it. In conclusion, Mr. Chairman, I want to thank you for this opportunity to present testimony in favor of H.R. 852 and I offer the assistance of the National Association of Credit Specialists in implementing this new technology when it comes to the Service Centers.
Insert Folios 3–19, page nos. 39–55 here