be the shippers basis for filing the PACA grievance, but there remains the investigation of all the inspections made by the indicted inspectors. It is the contention of WGA that all of these inspections are suspected of being part of the same kick-back scheme, and therefore need to be fully investigated by the Federal Government, not by the industry.

Procedurally, the statute of limitations will expire on July 27, 2000, yet the evidence needed to go forward in the PACA proceedings has not yet been made available by the USDA Office of Inspector General. It is appropriate for Congress to either extend the statute of limitations, or make it clear that the Inspector General should do everything possible, in addition to retaining a non-government contractor, to assist with making this evidence available to shippers.

Another problem in the Hunts Point matter is the shipments involved in the government's sting operation. The shippers were unknowingly involved in, and paid a heavy price for, Federal efforts to catch criminals. Our shippers are not asking for a reward, but we do believe we should be compensated for the fair market value of our produce involved in this government operation. It is well within the power of Congress to reimburse shippers for such losses involving the Federal Government.

ADMINISTRATIVE INFRASTRUCTURE IMPROVEMENTS

During the last decade, the trading of perishable fruits and vegetables has changed substantially, just as other aspects of the economy have changed. However, USDA's Fresh Products Branch operates today just as it has for many decades, and is in serious need of modernization. Our industry is now utilizing digital imaging, internet trading, and more direct sales to supermarkets, and the inspection process needs to be modernized to keep up with private industry. Moreover, criminal activities, like the Hunts Point matter, could be minimized with updated procedures and facilities. The Fresh Products Branch staff and internal procedures at USDA require updating in order to meet the challenges of supplying consumers with a nutritious supply of fresh produce in the 21st century.

WGA believes that the House Agriculture Committee should work with USDA to ensure that a number of improvements to the Fresh Products Branch inspection program are implemented. This should include, at a minimum, the following initiatives:

1) The ethics training that the Fresh Products Branch staff receives each year should be improved. In addition to strengthening existing ethics training, staff should be required to be trained yearly on changing inspection procedures and new inspection techniques;

2) Efforts to improve our inspection procedures by learning from, and adopting, the best inspection practices used by other developed countries;

3) Capital improvements such as notebook or hand-held computers, digital imaging equipment, and simple items such as inspection tables at inspection locations must be authorized and funded.

These and other updated procedures or facilities would greatly improve the Fresh Products Branch services, and are in the best interest of consumers and industry alike. We urge the committee to authorize such capital improvements for the Fresh Products inspection program in a timely manner.

ANIMAL AND PLANT HEALTH INSPECTION SERVICE

WGA encourages the committee to provide strong oversight and provision of adequate authorization of funding for one of the most important agencies of the U.S. Department of Agriculture, the Animal and Plant Health Inspection Service (APHIS). This agency provides invaluable assistance to exporters of U.S. agricultural products by working with foreign plant health officials to resolve phytosanitary barriers which stop or delay our exports. Unfortunately, APHIS's efforts to improve our export picture have been diminished by the growing list of import petitions received from foreign governments eager to export to the U.S. In fact, APHIS appears to have made consideration of import petitions a priority at the expense of assisting American exporters. WGA fears that APHIS has somehow strayed from its original mission of focusing on the problems facing our exporters.

Another concern is that the responsibilities of APHIS were increased dramatically with the adoption of the Uruguay Round WTO Agreement (which includes the Sanitary and Phytosanitary (SPS) Agreement), yet the agency's personnel and other resources were not increased at anything close to the level needed. The release last year of the National Plant Board's study, Safeguarding American Plant Resources, makes clear how extensive the needs are at the agency-and how important this agency is to the future of U.S. agriculture.

Given the critical importance of opening new international markets for our fresh produce exports, WGA believes that APHIS should have a specific mandate from Congress to assist U.S. agriculture in these efforts.

Western Growers is also quite concerned that APHIS is being made subject to political pressures, and is not taking the necessary care required to protect domestic agricultural crops from the risk of pest infestation before approving new import petitions. Exotic pest infestations are much more prevalent than they were even 10 years ago, due to the increased level of international trade. With increased trade comes increase risk of exotic pest infestation, and APHIS must have the resources to confront the task of keeping exotic pest infestations to a relatively low level. Obviously this is necessary if we are to continue to have a successful agriculture industry-for both specialty crops and commodity crops.

WGA believes that Congress should undertake a comprehensive, detailed review of APHIS activities and adopt a new law which clarifies APHIS's role with respect to expanding access to new markets for U.S. agricultural exports. Further, Congress must provide the agency with vastly increased resources. There is no more important investment that can be made for the future of U.S. agriculture.

PLANTING FLEXIBILITY ON SUBSIDIZED ACREAGE

Western Growers Association is strongly opposed to allowing fruits, vegetables and nut trees to be grown on acreage which is enrolled in USDA subsidy programs for the bulk commodities (the so-called "Flex Acreage" policy). This is necessary to ensure that producers of fruits and vegetables who do not receive USDA subsidies are not put at a competitive disadvantage against growers who do participate in the Federal farm programs. This policy also prevents against the disruption of produce markets due to artificially imposed signals arising from changes in government policy.

Along with other produce organizations, WGA worked hard to ensure that Congress abided by this policy in writing both the 1990 and 1996 farm bills. The Federal Agricultural Improvement Act of 1996 (1996 farm bill) prohibits the planting of fruits and vegetables on all USDA contract acres, with certain narrow exceptions specified in the law. In testimony before the House Agriculture Committee in 1999, Secretary of Agriculture Glickman recommended that Congress expand "planting flexibility so that producers can elect to plant fruits and vegetables (on subsidized acres] if they choose to do so." This proposed amendment would overturn the policy, included in the 1996 farm bill, of preventing subsidized growers from planting fruits and vegetables on contract acreage. WGA is strongly opposed to Secretary Glickman's proposal, and will strongly oppose any new legislation which would allow subsidized producers to compete against non-subsidized growers in the production of fruits and vegetables.

WGA also is concerned about USDA's enforcement of the Flex Acreage provisions of the law. On May 5, 1999, USDA issued an Advance Notice of Proposed Rulemaking indicating that many growers believe the penalties for violating the current prohibition of planting fruit or vegetables on contract acreage are unduly harsh, and that the agency is considering reducing these penalties. While WGA does not believe that penalties should be unnecessarily punitive, we do believe it is incumbent upon USDA to ensure that any reduction in the current penalty regime does not lessen the deterrent effect of the penalties in enforcing the Flex Acreage policy, as clearly intended by Congress. WGA opposes any substantial change in the penalties which would weaken current law.

WGA remains committed to ensuring that the fundamentally fair policy of prohibiting subsidized growers from competing against growers who do not receive government assistance in fruit and vegetable production remains the law of the land, and that the law is effectively enforced.

SUPERMARKET CONSOLIDATION

Supermarket consolidation is a concern from the grower to the consumer. The ability of the supermarket to drive farm-gate prices down and drive retail prices up when a supermarket chain dominates the market is economically unacceptable. Unlike non-perishable consumer products, a family farmer with a perishable crop ready for harvest does not have the alternative of waiting for prices to rise. The immediate requirement to market the product is further complicated when the market is dominated by a few large chain supermarkets. The trend of retail supermarkets demanding slotting fees from grower/shippers of fresh produce is evidence of market power which puts family farmers at a great disadvantage.

GUEST WORKER LEGISLATION

Western Growers Association also strongly supports bipartisan legislation to reform the H-2A agricultural guest worker program (S. 1814 and H.R. 4056). An effective guest worker program is needed to ensure that legal workers are available to harvest perishable crops when there are not enough domestic workers for this purpose. The inability to secure a sufficient number of workers in a timely fashion to harvest perishable crops results in adverse consequences for growers, workers, and consumers of fresh fruit and vegetables.

In recent years, the H-2A program has proven to be cumbersome and inefficient when faced with the task of supplying significant numbers of guest workers on short notice. As our industry continues to experience localized labor shortages throughout California and Arizona, the need for a reformed program to avert labor shortages continues to grow. Thus, legislation to reform the H-2A guest worker program is very important to the California fresh produce industries.

S. 1814 and H.R. 4056 also include provisions that will provide undocumented workers with the opportunity to earn permanent status through employment in agriculture. This "adjustment of status" provision is a "win-win" situation for growers and farmworkers. Growers benefit through the stability of a legal workforce and the certainty that highly perishable crops will be harvested in a timely manner. Farmworkers benefit by earning the right to legal status, avoiding the substantial risks inherent in undocumented status, and get the protection of U.S. labor laws.

Again, WGA strongly supports the bipartisan agricultural guest worker legislation with adjustment of status for farmworkers, and urges Congress to enact this legislation in 2000.

FEDERAL CROP INSURANCE

WGA has generally been supportive of efforts to expand effective risk management tools to growers of fresh fruits and vegetables. However, due to recent experience, we are concerned about potential adverse impacts on growers from any expansion of the Federal Crop Insurance Program. WGA strongly urges USDA and the Risk Management Agency to ensure that new crop insurance programs are structured in such as a way as to ensure that they do not disrupt existing markets for fresh fruits and vegetables.

WGA's concerns are illustrated by the situation with the watermelon pilot program in 1999. Last year, watermelon growers in Arizona and California experienced one of the worst markets in history. The supply of domestic watermelons was much greater than in previous years, which produced record low farm-gate prices. Moreover, watermelon consumption did not increase significantly because the retail supermarkets did not pass along the low farm-gate prices to consumers. The watermelon farm-gate price collapse also adversely affected farm-gate prices for other types of melons grown by WGA members.

WGA is concerned that the USDA's watermelon crop insurance pilot program was a major factor contributing to the increased supply of watermelons in the U.S. market. The pilot program implemented in select counties in a few States appears to have provided incentives for growers to expand production, or for new growers to enter the market. This created an imbalance in an industry that previously was characterized by a reasonably balanced supply and demand history. Large increases in acreage planted to watermelons in areas served by the pilot program indicate that the program may have been a major factor in causing this shift into watermelon acreage.

WGA strongly opposes the continuation of the watermelon pilot program, and expansion of the Federal Crop Insurance Program to other fruit and vegetable crops, unless USDA can ensure that such programs will not disrupt traditional marketing patterns and will not provide artificial signals or stimulants towards increased acreage and supply. It should be remembered that fruit and vegetable markets are much different in nature than markets for the bulk commodities. Government programs designed for growers of bulk commodities generally are not effective for fruit and vegetables growers, and can often be detrimental to the latter.

Ensuring that new programs are available on a equal basis among all growers, and will not disrupt markets, should be a standard requirement for RMA in developing any new crop insurance programs for fruit and vegetable commodities. WGA also believes that association and cooperatives have a vital role to provide in crafting crop insurance policies and providing premium discounts to growers. Any crop insurance reform approved by Congress must include a role for agricultural associations and cooperatives.

FOOD QUALITY PROTECTION ACT REFORM

WGA strongly supports efforts to provide for a better implementation process of the Food Quality Protection Act (FQPA), such as the "Regulatory Fairness and Openness Act of 1999" (H.R. 1592) by Rep. Pombo. This legislation does not change the fundamental requirements of FQPA, but rather reinforces the original FQPA language to ensure that the EPA uses actual data and realistic models in their risk calculations. The bill also would require EPA to use the data call-in provision of the law where there are data gaps. Effective and fair implementation of FQPA based on actual data and sound science is critical to ensuring that growers have access to the crop protection tools needed to grow nutritious and affordable fruits and vegetables.

WGA is pleased to see that this FQPA reform bill has 218 cosponsors, thus attaining the support of a majority of the 435 members of the House, and urges Congress to move forward with the legislation as soon as possible.

AGRICULTURE RESEARCH

WGA appreciates the small increase in funding for Federal agricultural research that Congress has provided in the last year or two. However, our industry has two concerns regarding research. First, the Agricultural Extension Service has been decimated over the last 15 years. Their advice and applied research is critical to assisting growers in the development of more efficient ways of growing crops. In California, many of the long time extension advisors are reaching retirement age and it is not clear that there is the will to replace them. Second, we believe that more funding should be directed towards applied research. As we struggle with changes in pest control, new environmental legislation, and other challenges, applied research has the potential to assist in the development of new solutions to these issues.

Thank you for this opportunity to present the WGA's views on Federal agricultural policy. I will be glad to respond to any questions.

STATEMENT OF WILLIAM ZECH

Mr. Chairman, it is a pleasure to appear before the House Committee on Agriculture to discuss U.S. agricultural policy. My name is William Zech, and I am an asparagus grower appearing before you today on behalf of the California Asparagus Commission.

Asparagus is a valuable crop in California. California is the number one asparagus producing State in Nation with over 37,000 acres harvest in 2000. Asparagus contributed more than $126 million to California's economy last year. However, we are not the only region experiencing substantial production growth. Our neighbors to the south, Mexico and Peru have significantly increased imports to the U.S. over the last few years. From 1994 to 1998, imports into the U.S. increased by 42 percent, to approximately 108 million pounds. Mexico and Peru provide most of our fresh asparagus imports.

In contrast, U.S. asparagus export sales have decreased by 30 percent during the same period, to about 33 million pounds. This decline in export sales has come about despite our best efforts to expand our export sales. The California Asparagus Commission partners with commodity organizations in other production areas to participate in the Federal Market Access Program (MAP). The national marketing organization, known as Asparagus USA, has participated in MAP since 1996. The program has contributed approximately $250,000 to the grower's international marketing budgets. In general, we've experienced tremendous success in target markets and believe the program is essential to our continued efforts to combat unfair trade policies of our trading partners. The program becomes more important as producers in other countries begin to compete toe-to-toe with U.S. producers in those markets we developed with MAP funds.

The California asparagus industry faces a number of trade barriers which should be a topic of consideration for this committee as a part of the trade title of any future farm bill and other legislation which comes before you.

First, the California asparagus industry has encountered a number of phytosanitary barriers in our efforts to expand our export sales. I want to share a recent success story with you that illustrates the important role of the Federal Government in phytosanitary matters. Last year, the government of Taiwan halted some of our shipments, contending that U.S. asparagus was infected with an insect known as the burrowing nematode. However, officials from the Animal and Plant

Health Inspection Service (APHIS) were able to provide the necessary scientific evidence proving the nematode does not affect U.S. asparagus. APHIS' work on this particular issue has significant economic benefit to the grower community. Taiwan has exported a study volume of California fresh asparagus since the beginning of our season. We are very pleased with the work of APHIS, particularly in light of our understanding that the agency is under-funded and understaffed. I trust that the committee, as it looks at our future agricultural policy, will take a close look at the activities of APHIS, which are so critical to the future health of U.S. agriculture and to our export sales.

The California asparagus industry also has concerns with several aspects of the European asparagus market. The EU has allowed the formation of Producer Organizations through which fruits and vegetables are marketed. It is unclear how the specific benefits of these organizations, which we understand received over $1.8 billion last year, are passed along to European growers. Vegetable growers in the EU also receive export refunds, and we are advised that in 1997, they received approximately $76 million in such refunds.

Additionally, the EU approves proposals from time to time that provide specific funds to certain crops. We have heard the Spanish asparagus industry has received funding in the amount of $125 per acre. Spanish asparagus has become a strong competitor in the Swiss market, historically one of our top export markets, and we suspect that the recent EU subsidies were designed to make the Spanish asparagus industry more competitive with U.S. exports.

The Swiss market also causes us some concern. The Swiss government has established quotas on asparagus imports from May 1 to June 15. Asparagus imports above the allotted quota for the given week face a high tariff of approximately 72 Swiss francs per kilogram which essentially prices our exports out of the market with respect to Swiss domestic asparagus. While these quotas can be revised upward on a weekly basis depending on domestic supply, consumer demand, and pressure from our California exports, these trade restrictions continue to be a barrier to U.S. asparagus exports.

I bring this information to your attention to point out that the U.S. asparagus industry continues to be confronted with European subsidies which undercut our efforts in the EU market. Our industry asks that, as you consult with Administration trade officials, you support a negotiating stance that will result in substantial reductions in EU subsidies. This is critical if U.S. asparagus growers are to be given the opportunity to compete on a more level playing field in international markets.

În closing, I would like to ask for your support of H.R. 3593, a bill to authorize increased funding for the Market Access Program (MAP). Over its 15-year history, MAP has proven to be a non-trade distorting export promotion mechanism which assists in efforts to expand U.S. agriculture exports, and therefore is an excellent investment of resources. As noted earlier, Asparagus USA received limited funding under MAP ($257,039 in 1998, $245,526 in 1999) which provided vitally needed support to our efforts to share our very fine product with the rest of the world.

Thank you for allowing me to speak to you on behalf of the California Asparagus Commission. I would be pleased to answer any questions the committee members may have.

STATEMENT OF TOM SANFORD

Mr. Chairman, members of the committee, my name is Tom Sanford. I am the mayor pro-tem of the city of Gridley, California.

I appreciate the opportunity to testify before the committee today. The city of Gridley is largely an agricultural community whose primary product is rice. For many years our growers have grappled with the complex issues surrounding the disposal or use of the rice straw that remains after rice is harvested. The city of Gridley is leading a public-private partnership that plans to construct a biofuels plant that will turn rice straw into ethanol. The plant will take a byproduct of rice production and turn it into a commodity of value. In so doing, it will take a liability costly rice straw disposal-that threatens to drive growers away from rice production and create an asset that will help keep rice acreage in production and farm families in our region healthy. In short, the opportunity to turn rice straw into ethanol will benefit both rice growers and the region at large.

Support of our agricultural producers and development of our economic base is an important goal for the city of Gridley. We are located in the heart of the Sacramento Valley's rice-growing region. A healthy rice industry is important to the health of our community, and to other communities like ours. We also fully recognize the value of research into production of environmentally beneficial fuels, and the impor