include the farm ownership loans, both direct and guaranteed, and farm operating loans, which include three categories-direct, guaranteed unsubsidized, and guaranteed subsidized. And in addition to that, we have the emergency disaster loans with a loan level of $100 million, and credit sales of acquired property where we provide the financing to certain producers who require the establishment of credit for the purchase of these properties.

For our grant programs, we are requesting $3 million for State Mediation Grants and $3 million for Outreach Grants for Socially Disadvantaged Farmers.

CFSA ADMINISTRATION

I would like to summarize all of this by making a very brief reference to the administrative support that we are asking for to deliver all of the above programs, which I have indicated are under the new CFSA.

For the 1996 direct appropriation for CFSA salaries and expenses, we are asking for $811.8 million. Together with our credit reform transfers, this would provide a total appropriation level of just in excess of $1 billion, which is an increase of $46.9 million over the cost of the comparable activities in 1995.

The major components of the increase are support of the Federal crop insurance reform and pay increase costs that are coming about in 1996.

In 1996, our activities related to crop insurance are expected to be approximately double the level they were prior to the reform. As a result, an increase of approximately $20 million will be needed to cover such items as the CFSA county office delivery expenses which are not covered by the CAT service fees which we can discuss in more detail.

An increase of $15.8 million would cover the 1995 pay costs and the proposed 1996 Federal pay raise of 2.2 percent.

Mr. Chairman, this concludes my remarks, and I and my colleagues, who I think have all of the answers here that I may not have this afternoon, stand ready to answer your questions.

Thank you.

[CLERK'S NOTE.-Mr. Buntrock's prepared statement appears on pages 528 through 544. A biographical sketch appears on page 527. Budget justifications for the Consolidated Farm Service Agency appear on pages 545 through 722.]

CROP INSURANCE

Mr. SKEEN. Thank you, sir. And I think that you have enough accompaniment there that there are probably very few questions that we will ask that you can't answer.

In deference to my friend, Mr. Myers, who has to go to another committee meeting, I want him to go ahead and start the questioning.

Mr. MYERS. Thank you, Mr. Chairman.

I just have one question relative to the insurance program, the disaster program. We are being told that there are tremendous losses in California, particularly with vegetables. Historically, California has not been a big insuring State, has it? I think in other

years, even some of the years there were earthquakes, they had very little insurance.

What is going to be the situation here when you have got some of those farmers out there that have been wiped out and they haven't had insurance? How are you going to take care of them?

Mr. BUNTROCK. Well, one of the features of the crop insurance reform, of course, does cover these crops that formerly have not been insured.

Mr. MYERS. Pardon me for interrupting you. That is just for crops that you don't insure?

Mr. BUNTROCK. That is correct.

Mr. MYERS. But those who elect not to take insurance. Wasn't lettuce insurable? Most of the crops out there, weren't they insurable?

Mr. BUNTROCK. Some of these vegetable crops are and some are not. I do not have the total list. I will call on Mr. Ackerman to answer in more detail. Let me put it this way. Going into the 1995 reform program, we basically began with those crops that formerly had been insured under the old crop insurance, and then we will add and build on that as we go along.

Of course, one major feature of the crop insurance reform is the noninsured coverage, which will be triggered by a disaster such as you have in California now, for all of those noninsured crops at 50 percent of yield, 60 percent price, for an individual producer. And in that case, that will certainly take effect because we have not yet asked producers to come in and report. Those crops will be covered, if insurance was not already available, by this noninsured crop program.

Now, if we have producers who have not taken advantage of the insurance that we have offered, they may be left out. I would like to ask Ken if he wants to expand any more on that.

Mr. ACKERMAN. Yes. Mr. Myers, our understanding of the situation in California at this point is that most of the crops that had the most serious damage were in fact the noninsured crops, the noninsurable crops. Just looking at one report, I see that lettuce, strawberries, broccoli, cauliflower, and artichokes are included. Some damage did occur to insured crops such as grapes.

For the noninsurable crops, as Mr. Buntrock pointed out, they would be covered under the NAP program, the standing disaster program. The difference between that program and programs from earlier years is that, under this program, California will not have to come and ask for a special disaster relief act. This program is permanent law. It will take effect automatically once the trigger is reached, and, as I understand from the damage reports we have seen, in many cases those triggers would be reached.

As far as the insurable crops such as grapes and a number of others, yes, farmers would have to have insurance. Our understanding is that generally sales have been fairly active in California. The fact that they had flooding about a month or two ago put many farmers in California on notice about the importance of buying insurance this year.

Mr. MYERS. Well, thank you. I remember artichoke crops were taken off a good many years ago, but I thought lettuce and some of those were still insurable.

Mr. ACKERMAN. I believe that in California they are not.

Mr. MYERS. Okay. You might expand in the record if you would please.

[The information follows:]

Mr. MYERS. Thank you for your testimony.
Mr. ACKERMAN. Thank you.

Mr. MYERS. Thank you, Mr. Chairman.

ADMINISTRATIVE SUPPORT

Mr. SKEEN. Thank you, Mr. Myers.

In the last year you have gone through a very interesting time here. This reorganization has been very extensive and I am sure you have a tremendous number of inherent problems in getting it done because it is a huge agency. So I respect and appreciate what you have had to do.

When we passed the appropriations bill, we didn't include funds to take care of some of the disaster provisions or to re-sign_the Conservation Reserve Program or for the operation of the new Crop Insurance Reform Program and you can't do all of these things and we know you can't do them free. And you have employees that have to be trained and paid.

Can you describe for us what the field situation is? Is there a backlog of problems being created because of this? Give me some of the problems that you are dealing with.

And is the Farm Service really giving the farmer the service in a timely fashion even with all the things that you have had to contend with? Give us kind of a rundown on just what the situation is. If it is scary, say so. If it is not, we would like to hear the good side or the bad side.

Mr. BUNTROCK. Well, Mr. Chairman, that is a very important and critical question, and it is something that I would be glad to respond to.

Without question, for the 1995 fiscal year, which we are in right now, things are to say the least very, very tight as you correctly pointed out. There was no administrative funding for the ad hoc disaster program for 1994 which we are in the midst of right now. I referred to the CRP program, and the fact that we intend to go out this year to in effect re-sign up some acreage.

There was no administrative funding included for the NAP program that was also referred to earlier, which is carried out exclusively through the county offices and does require producers to come in up front and establish acreages for all of the 200 and some crops throughout this country that formerly have not been a part of the job of this agency and we have not had records or data for. Mr. SKEEN. It is all a new area for you.

Mr. BUNTROCK. It is a brand-new area. It is an area that has not been addressed before under crop insurance on this kind of a widespread basis, and of course those things were not included in the budget.

Quite frankly what we have done in 1995 is simply prioritize those areas to ensure that we do the best that we can through our county offices. And, by the way, they have worked, I suppose, to the maximum extent that is possible to get these programs administered to farmers throughout. We have prioritized things. Without question, there are some things that we have delayed that we would have otherwise done in 1995.

Mr. SKEEN. Give me an example. Do you do it on a priority basis?