Testimony of

**[The Honorable Ann M. Veneman]{.smallcaps}**

**[United States Department of Agriculture]{.smallcaps}**

# [Before the U.S. House of Representatives]{.smallcaps}

**[Committee on Agriculture]{.smallcaps}**

# [January 21, 2004]{.smallcaps}

Mr. Chairman and members of the Committee, thank you for the opportunity
to appear today to discuss the recent BSE-positive cow found in
Washington State, and our response.

I have appreciated the conversations that I have had with many of you
during the last month. Your input and comments are extremely valuable as
we continue to work through this situation.

**[Response actions on and after December 23]{.underline}**

On December 23, we received word that a tissue sample taken as part of
our routine surveillance system had tested presumptive positive for BSE.
That was only four weeks ago, but in some ways it seems like four
months, especially when you consider all that has transpired.

We had in place a BSE response plan, which was first developed in 1990,
and has been continually updated since then to reflect the latest
knowledge about the disease, as well as lessons learned from other
countries that have had cases of BSE. Upon hearing of the BSE find, we
immediately began to implement that plan.

We began an epidemiological investigation to determine the origin of the
cow and to identify and locate her offspring and cohorts. We also began
the process of tracing the meat forward and learned that, while the meat
from this cow went into the food supply, the high-risk products, such as
brain and spinal cord, did not enter the human food system.

We feel very confident that the meat that did enter the food supply
posed virtually no risk to public health. However, in an abundance of
caution, we traced the meat from the animal and issued a recall of the
product. Also, consistent with our response plan, we sent the tissue
sample for confirmation to the World Organization for Animal Health
(OIE) reference laboratory in Weybridge, England.

We also decided to immediately inform the public. I felt then and still
feel very strongly that we have an obligation to the American public and
to our industry to be as transparent, timely and accurate as possible in
our communication efforts.

Upon learning of the presumptive positive, I asked our scientists how
confident they were of the preliminary results. When our experts said
they were very confident in the accuracy of the tests conducted by our
scientists at the National Veterinary Services Lab in Ames, Iowa, we
made the information public on December 23 -- the same day I learned of
the presumptive positive test result -- and even though the lab in
England had not yet verified our findings.

After the announcement, we began daily briefings that were broadcast
live via our website and, in some cases, broadcast live on network and
cable television so that those who were interested could hear the latest
updates. From December 24 through New Year's Eve, some 100,000 people
viewed our briefings via the web and thousands more participated through
an interactive phone line.

When considering actions to be taken following the find, I repeatedly
asked myself and staff three questions: First and foremost, what, if
any, additional actions need to be taken to further protect public
health; what additional actions, if any, need to be taken to prevent
potential spread of disease in the cattle herds; and how can we best
maintain consumer confidence in our safe beef supply.

On December 30, one week after the find, I announced a series of actions
to further enhance our already strong safeguards. These included an
immediate ban on non-ambulatory (downer) animals from the food system
and further restrictions on specified risk materials -- such as brain
and spinal cord tissue -- from entering the food supply. We also
announced that meat from cattle tested for BSE will be held until the
test has confirmed negative. The measures were published on January 12
as interim final rules.

We were able to act so quickly because of the advance planning we had
undertaken. After the find in Canada, and prior to the find in
Washington State, we had been working on new regulations on specified
risk materials, so much of the regulatory analysis had already been
completed. In addition, we said that we will maintain an aggressive
surveillance system by doubling the number of animals tested and
continuing to target high-risk animals.

We also announced that we will be expediting the implementation of a
verifiable system of national animal identification. Currently, many
animals can be identified through some system of animal ID. In fact, the
BSE-infected cow in Washington had an animal ID, which has greatly
facilitated the traceback.

Significant work to develop such a system has already been accomplished.
Over the past 18 months, USDA has worked with the National Institute for
Animal Agriculture, and state and industry groups, to identify national
standards for an animal identification system that will enhance the
speed and accuracy of our response to animal disease outbreaks. I have
asked USDA's Chief Information Officer to make it a top priority to
develop the technology architecture necessary to implement an effective
and verifiable system throughout the United States. Our goal is to
achieve a uniform, consistent, and efficient national system.

On Saturday, December 27, we learned that the ear-tag matched that of a
Canadian cow that was exported to the U.S. We made the public
announcement of that information that same day, and further announced we
would be confirming through DNA testing. On January 6, the DNA result,
along with other records and documentation, allowed the U.S. and Canada
to confirm that the cow originated on an Alberta dairy farm.

In keeping with our commitment to continually review our systems, I also
announced on December 30 that I would convene an international panel of
experts to review our investigative efforts. We are asking them to make
recommendations for possible further enhancements to our systems,
including recommendations on changes to our current surveillance
systems, in light of the current situation. This team will be composed
of the same experts who reviewed the Canadian situation, with the
addition of an OIE expert. We expect them to be here this week to begin
their review.

We are also in the process of approving so-called "rapid tests" for BSE.
On January 9, we announced that APHIS would begin formally accepting
license applications for BSE rapid test kits. These tests, among other
things, are less specific than the immunohistochemistry (IHC) test that
USDA has designated as its official test for BSE, but can produce
results for screening purposes more quickly. Internationally, the IHC is
considered the "gold standard" diagnostic test method.

APHIS is now reviewing and responding to the data submissions,
physically inspecting the facilities where these test kits would be
produced, and actually testing these kits at the National Veterinary
Services Laboratories in Ames, Iowa.

Last week, on January 13, I traveled to Ames, Iowa to visit with our
scientists at the National Veterinary Services Laboratory to get a sense
of how the testing process currently works, listen to their views about
revisions to our testing program, and discuss what additional resources
they need to get their jobs done.

As you all know, the National Centers for Animal Health in Ames are the
linchpin in our animal health infrastructure. We have world-class
scientists there, and they need world-class facilities. That is why I
was pleased to announce last week that the President's 2005 Budget will
include \$178 million to complete the renovation of the USDA campus in
Ames, which houses a critical mass of APHIS' diagnostics and veterinary
biologics laboratories, as well as ARS researchers.

When completed, the campus will be the most modern and best-equipped
animal disease diagnostic and research facility in the world. If
approved by Congress, these funds will allow us to fully complete this
project by the end of 2007 under an accelerated contracting and
construction schedule.

All the actions that we are taking are in addition to the strong
safeguards we had in place before December 23. Since the discovery of
BSE in the United Kingdom in the mid 1980s, the United States has been
very proactive in implementing measures to guard against BSE. We have
continually reviewed the scientific research, conducted risk assessments
and strengthened our protective measures accordingly.

As you know, USDA requested Harvard University to conduct an independent
risk assessment to evaluate preventative measures already in place and
to identify additional actions that should be taken to minimize the risk
of BSE. After three years of extensive data gathering and analysis, the
results were released in November 2001. At that time, Harvard found that
the BSE is highly unlikely to become established in the United States,
should the disease be detected in our country. As a result of the
Harvard analysis, we announced additional preventive actions, such as
increased surveillance and the testing of certain ground beef products
for central nervous system tissue.

In 2003, we asked Harvard to reassess the situation, taking into account
the BSE find in Canada in May. In August, Harvard reaffirmed the
findings of the initial study that systems already in place would
prevent BSE from spreading if it were found in the United States.
Harvard also concluded that even if infected animals or ruminant feed
material entered the U.S. animal agriculture system from Canada, the
risk of it spreading extensively within the U.S. herd was very low.

**[Impact on domestic and export beef markets]{.underline}**

Throughout this process, we have been committed to maintaining public
health safety and consumer confidence in our systems. Some 90 percent of
U.S.-produced beef is consumed domestically, and all indications are
that the confidence of the U.S. consumer in the safety of American beef
remains very strong. Retailers and food service outlets are reporting
virtually no adverse effects on consumer demand as a result of the BSE
finding. We believe this is due in part to the quick and aggressive
steps the Administration has taken to protect public health.

Unfortunately, most of our export markets, including our key buyers --
Japan, Mexico, Korea and others -- immediately closed their markets to
U.S. beef after the December 23 announcement.

In 2003, the quantity of U.S. beef exports is estimated at 2.6 billion
pounds, accounting for 10 percent of U.S. beef production. The value of
our exports of beef, veal and variety meats is estimated at about \$3.8
billion for 2003, and we exported another \$65 million in live cattle.
The products that otherwise would have been exported in 2004 now must be
absorbed in the domestic market.

The loss of exports had an immediate impact on the cattle market,
resulting in an initial drop of 15 to 20 percent in cattle prices on
cash and futures markets. However, prices have strengthened over the
past week. Markets are now down 10 to 15 percent from the levels prior
to the BSE finding, and current cattle prices remain above year-ago
levels.

Regaining our export markets is a top priority for the Administration.
The conditions our trading partners impose on us for re-opening trade
must reflect what science tells us. We know that the risk to public
health from BSE is extremely low in countries that have no or low
incidence in cattle, and that also have appropriate mitigation measures
in place.

The United States is leading the effort to ensure that the international
response to BSE is science-based. After the find in Canada last May, we
reacted exactly the way countries are now treating the United States --
we shut off all beef and cattle imports from Canada. However, after
conducting a complete and thorough investigation into the incident, and
evaluating the additional safeguards Canada made to its already strong
system, we allowed trade in low-risk products to resume in late August.

The United States reviewed the scientific evidence and determined that
imports of boneless beef from animals under 30 months of age and other
low-risk products could safely resume. The U.S. decision was consistent
with international scientific standards that allow for trade to resume
when a country has taken the necessary actions to prevent the spread of
BSE.

Last fall we published a proposal to extend the trading, to allow live
animals and certain other products to enter the United States. The
comment period on that rule closed January 5. In light of the finding in
Washington State and the origin of the cow, we will consider the next
steps on this proposal after our investigation is complete, and
determine how to obtain further public comment on that proposal, or if
we need to revise the original proposal.

In addition, together with Canada and Mexico, we have asked the OIE to
clarify its guidelines regarding trade among countries with BSE so that
science guides the actions of all countries. We expect the OIE to issue
an updated chapter on BSE in the spring.

U.S. beef is safe for consumers in the United States and around the
world, and we are urging our trading partners to base their decisions on
science. Since December 23, we have worked continually to inform our
trading partners about the case, the steps we are taking to investigate
the situation, and the additional safeguards we have implemented.

Within days of the finding, we dispatched USDA's senior trade advisor,
David Hegwood, and Dr. Chuck Lambert, Deputy Undersecretary for
Marketing and Regulatory Programs, to Japan and South Korea to explain
the investigation and the rigorous safeguards that we already had in
place.

Earlier this month, U.S. Trade Representative Zoellick and I each had
very encouraging meetings with the Japanese trade minister. Last week, I
had a lengthy conversation with Japan's Minister of Agriculture Kamei. I
impressed upon him the importance of finding a practical solution to
allow resumption of trade and releasing into commercial channels the
considerable quantity of beef shipped to Japan prior to December 23.

Minister Kamei stated that Japan is looking forward to resuming trade.
As a result, Dr. J.B. Penn, USDA Under Secretary for Farm and Foreign
Agricultural Services, is in Japan today leading a delegation of USDA
and FDA officials to further engage the Japanese in discussions to
reopen that important market to our beef.

In addition, I have talked with ministers from Canada, Mexico, the
Philippines and others on an ongoing basis to keep them informed of our
progress. We have been quite pleased with the reactions of both Canada
and the Philippines. Both countries have allowed at least a portion of
their markets to remain open to our beef.

Dr. Penn and Mr. Bill Hawks, USDA Under Secretary for Marketing and
Regulatory Programs, traveled to Mexico for productive discussions, and
other U.S. officials just returned from China where these issues were
discussed.

Last Friday, I met with my counterparts from Canada and Mexico, Minister
Speller and Secretary Usabiaga, to discuss the need to enhance and
coordinate a consistent North American response to the animal health and
trade issues that BSE raises. We agreed to develop an enhanced
consultative process led by senior officials in each of our respective
departments to facilitate these efforts. The work is already underway,
and we expect the officials to meet within the next 30 days.

In addition, technical teams from Japan and Mexico spent several days in
the United States, meeting with technical experts at USDA and the Food
and Drug Administration. The Japanese team also traveled to the State of
Washington to review the investigation there, and the Mexicans visited
processing facilities in Colorado.

USDA staff at U.S. embassies abroad continue to inform foreign
governments of actions taken and reassure them of the safety of our
beef. In addition, we held a briefing here last week for all foreign
embassies to keep them informed of new developments in the BSE
investigation and to respond directly to their questions.

Our efforts to restore our foreign markets continue to be a top
priority, and we urge our trading partners to resume trade based on
sound scientific principles.

Our investigation into the case in Washington State is ongoing. In just
four weeks and one day, we have made a great deal of progress in both
the traceback and the trace-forward from the infected animal. Our
investigators have worked hand-in-hand with the State of Washington and
other States, as well as with Canadian authorities.

Because of our advance planning and our continuous review of our BSE
risk-mitigation measures -- and particularly the intensive review we
have undertaken since the Canadian case in May -- we were able to
respond very quickly and effectively to the BSE find in Washington
State.

We are continuing to trace the other animals that came across the border
with the infected cow and are finding and testing those animals. To
date, all animals tested have been negative for BSE. We have implemented
significant policy changes and had numerous meetings with our
international counterparts. We have worked to be as transparent in our
processes as possible, and provided updated information as quickly as
possible.

I am very proud of the accomplishments of our dedicated USDA team, many
of whom are with us today, including Under Secretary Hawks, Under
Secretary Murano, and Chief Economist Keith Collins. I would like to
especially recognize our chief veterinarian, Ron DeHaven, for his
extraordinary work throughout this process.

We will continue to provide timely updates to the public as information
is available. We have also included as an attachment to my testimony a
timeline of events relating to this incident. We will continue to update
this on our website as appropriate.

Mr. Chairman, again, thank you very much for holding this hearing today.
We appreciate the opportunity to inform the agricultural community and
the broader public of the actions we have taken. We recognize there are
many different ideas and opinions about how we can achieve the most
robust system possible to guard against BSE. I look forward to the
opportunity for dialogue on these issues that this hearing affords us. I
would be pleased to take any questions you have at this time.