Forms associated with loan making and servicing procedures will be reviewed for possible elimination, streamlining and consolidation. Regulations are being streamlined along with handbooks and forms. The new processes will reduce burden not only on our customers but on our own staff as well. The first regulation rewrite completed was the Guaranteed Preferred and Certified Lending Program, which was published as a final rule on February 12, 1999. There were several burden reductions associated with this final rule. By reducing the application form from 12 pages to 6 and reducing the amount of supporting documentation, the time required for working up an application will be reduced at a minimum of 1 hour. In addition, at the insistence of lenders that they cannot justify putting the same effort into small loans as they do larger loans, a "lo-doc" application was developed for requests under $50.000.00. By reducing the burden associated with a normal loan application, lenders are no longer indicating they will avoid making the smaller loans, since the lo-doc process makes these loans cost efficient to process.

Reductions have also been realized in the Direct Loan Program, where automated forms are now being used to calculate losses and the eligible loan amount for Emergency Loans (EM). This automated format reduced the amount of time required to determine EM eligibility from 2 hours to 20 minutes. It is anticipated that as the streamlining process continues on the remaining CFR parts, the same types of time savings and reduced paper burdens will be realized in all Farm Loan Programs. The Agency has also placed loan applications, related forms, and a lender handbook on the Internet so that farmers and guaranteed lenders may access these documents without a physical visit to the USDA service center.

Still, we recognize that quantum leaps in reducing paperwork burden require us to look beyond our own Agency boundaries to all of the USDA agencies that serve our common farmer and rancher customer as well as those entities beyond the Department. From the customer's perspective, the most annoying issue is repetitive submissions of the same information to different USDA and State entities. Accordingly, two of the goals in our Strategic Plan for Information Management reflect our commitment to facilitate information sharing with USDA's service center partners and with non-USDA entities.

FSA is one of the major participants in USDA's Service Center Initiative (SCI) along with NRCS and RD mission area. Information collections at the service center level represent the

majority of FSA's total collection burden. FSA believes that SCI provides a unique opportunity to achieve new levels of information collection efficiency because collections across organizational boundaries can be consolidated as common service center business processes are reengineered. Projects underway through the SCI that will help reduce paperwork burden include:

developing common geospatial maps and data and prototyping and testing common software tools and procedures for managing and sharing the information;

prototyping and testing a common customer information management business process;

developing data management standards and a common information architecture;

prototyping and testing common customer eligibility and compliance business processes; and

prototyping and testing Internet-based tools to share information with customers electronically.

FSA is taking full advantage of this opportunity by sponsoring a companion initiative—the Paperwork Reduction Implementation Team (PRIT)—that brings a paperwork reduction focus to the BPR initiatives under SCI. This effort was initiated by Secretary Glickman who directed NFAC to establish a team specifically focused on reducing paperwork on farmers. The vision statement for this initiative is “information is collected once and shared many times by USDA Service Center employees and, as appropriate, with other public and private entities." Another focus of PRIT is to develop standard methodologies for information collection management and to standardize burden calculation and reporting processes.

Beyond USDA, the production agriculture industry and State and local governments are increasing use of automated tools to manage various agricultural enterprises. Producers are using global positioning systems and mobile computers to support precision farming operations, such as, planting and fertilizer and pesticide applications in the field and collection of real-time yield information during harvest. These tools organize their business management information in a manner that facilitates easier information sharing that will reduce reporting burden in contrast to

manual methods of managing the data. Several State and local government entities are using digital geographic imagery and geographical information systems to manage land and crop-based information, such as, pesticide regulation, land valuation, water management, and resource conservation. Dependency upon fundamental land and crop data is a common element to all of these activities as well as to many of USDA's programs and services. The collection of this information is duplicated many times resulting in additional burden on agricultural producers. Expenses for managing the information are also duplicated by each of the entities. Further, nonstandard information formats inhibit sharing and reuse of the information among entities.

FSA believes that information sharing partnerships with these State and local entities is critical to achieving our overall burden reduction potential. Accordingly, FSA initiated dialog in 1998 with a variety of State government entities in Arizona and California about opportunities to consolidate and share basic land and crop information. Discussions have since expanded to State and local entities in Idaho. The entities include the departments of agriculture, environmental protection agencies, and water management commissions. We believe that these discussions will lead to incremental information sharing projects and ultimately result in substantial reductions in aggregate information collection burden on our common customer.

Implementation of our one-stop shopping concept faces many challenges. One of the most significant is the need to overcome different standards that govern program development and implementation in a USDA multi-agency environment. Potential efficiencies of consolidated operations cannot be realized if we fail to operate in a consistent or collaborative manner. Standardization is needed in many areas ranging from simple administrative routines to the information technology and telecommunications architecture that supports the delivery of services. Development of standard information architectures and common business processes requires time, commitment, and Congress' continued support. This support of the overall SCI effort is key to realizing potential improvements.

Summary

The collection of information from farmers and ranchers is critical to the Agency's and Department's ability to determine eligibility for USDA programs and calculate program benefits

and loan amounts. We must consider many issues when developing a new program or revising an existing one. These include legislative requirements and intent, maintaining financial integrity, information needed to calculate benefits, burden on the customer, burden on FSA employees, and information technology capability. We have a responsibility to protect the taxpayer's interests when delivering these services and that often times mandates collection of additional information. Material improvements in burden reduction will come from consolidating collections across USDA service center agencies and with State and local entities, improving information sharing, and implementing revised information collection processes that support contemporary business techniques, such as providing electronic access capability. FSA recognizes these opportunities and has committed to take full advantage of them through the SCI and PRIT. Continued funding for staffing and technical infrastructure are needed to turn these opportunities into realities.

In these times of extreme market volatility when farmers and ranchers are shouldering more and more of the responsibility for their own risk management, they require reliable and timely information on weather, markets, and programs. Good information is the mothers-milk of risk management. FSA and USDA are committed to providing this essential component to the nation's farmers and ranchers.

Mr. MCINTOSH. I appreciate your candor there. And, I understand the bind that puts you in. So perhaps we need to then look at whether to make that a more important priority is including that in some of the performance standards, not only for Ms. Reed but others throughout the Department. And, recognize frankly, I'm a big believer in using incentives-so you can recognize in the bonus that's paid at the end, rather than necessarily on a punishment side. If you're taking on extra jobs, maybe people are staying extra hours and making sure they get the paper done, have that reflected there.

Mr. KELLY. Mr. Chairman, I would like to raise another issue along this line as well. You know, sometimes in some of these Paperwork Reduction Act projects, we've got a major one I know we're at odds with OMB and it's that's been out for quite some time. We should be following their rules and we should be taking it seriously, which we are trying to do. However, while we have been working with the Office of Management and Budget in this process, and there's been good people in these different agencies with different approaches, sometimes it's just differences of opinions.

And part of the thing is that sometimes-what I think I would raise a question with is if you don't get it in in time and you are in violation of the law, that there's another law that is to be violated if you don't collect some of this information somehow, and that leads to a dilemma: Which law do I break today? And that needs to be put into consideration of any incentive program. Otherwise

Mr. MCINTOSH. Is there an appeals process if the agency and OMB are at loggerheads on a paperwork collection item? Does the administration have a mechanism where they bump it up into the Cabinet? We used to have the Competitiveness Council when I was in the administration, I know they don't anymore, but is there a process there where you can do that?

Ms. REED. I would have to say that it is very much the exception and not the rule that we have this kind of discussion. We work it at the staff level, and we work it at the senior policy level. In this particular instance, the Secretary himself is prepared to get engaged. So you do move through a process of ratcheting up and trying to get closer.

Mr. MCINTOSH. And, the Director of OMB, if they can't work it out, then I guess you go to the President at that point?

Ms. REED. Hopefully it will not get there.

Mr. MCINTOSH. Hopefully you don't have to take those things to him. I know what you mean. You want to try to solve what appear to be smaller questions. Sometimes there are larger questions reflected in there. So I appreciate that.

And let me now turn it over to Mr. Ryan to finish out this hearing. Thank you both for coming and thank you for your candor and sort of getting a feel for the dynamics of how this is working. And I appreciate it.

Mr. RYAN [presiding]. Thank you for coming by, Mrs. Reed. I appreciate both of-and thank you for your candor. That's refreshing sometimes. It wasn't what you want to hear, but at least it's an