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94–703 PDF 2004

THE DEVELOPMENT OF USDA’S

NATIONAL ANIMAL IDENTIFICATION

PROGRAM

HEARINGS

BEFORE THE

COMMITTEE ON AGRICULTURE

AND THE

SUBCOMMITTEE ON LIVESTOCK AND

HORTICULTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MARCH 5, 2004, HOUSTON, TX,

JULY 22, 2004

AUGUST 17, 2004, FAYETTVILLE, NC

Serial No. 108–24

(

Printed for the use of the Committee on Agriculture

www.agriculture.house.gov

COMMITTEE ON AGRICULTURE

BOB GOODLATTE, Virginia, Chairman

JOHN A. BOEHNER, Ohio

Vice Chairman

RICHARD W. POMBO, California

NICK SMITH, Michigan

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

JERRY MORAN, Kansas

WILLIAM L. JENKINS, Tennessee

GIL GUTKNECHT, Minnesota

DOUG OSE, California

ROBIN HAYES, North Carolina

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

TIMOTHY V. JOHNSON, Illinois

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

DENNIS R. REHBERG, Montana

SAM GRAVES, Missouri

ADAM H. PUTNAM, Florida

MAX BURNS, Georgia

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

CHRIS CHOCOLA, Indiana

MARILYN N. MUSGRAVE, Colorado

DEVIN NUNES, California

RANDY NEUGEBAUER, Texas

——— ———

CHARLES W. STENHOLM, Texas,

Ranking Minority Member

COLLIN C. PETERSON, Minnesota

CALVIN M. DOOLEY, California

TIM HOLDEN, Pennsylvania

BENNIE G. THOMPSON, Mississippi

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

BARON P. HILL, Indiana

JOE BACA, California

RICK LARSEN, Washington

MIKE ROSS, Arkansas

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico

ED CASE, Hawaii

RODNEY ALEXANDER, Louisiana

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

JIM MARSHALL, Georgia

BEN CHANDLER, Kentucky

STEPHANIE HERSETH, South Dakota

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

MARK UDALL, Colorado

RICK LARSEN, Washington

LINCOLN DAVIS, Tennessee

——— ———

PROFESSIONAL STAFF

WILLIAM E. O’CONNER, JR., Staff Director

KEVIN KRAMP, Chief Counsel

STEPHEN HATERIUS, Minority Staff Director

ELYSE BAUER, Communications Director

SUBCOMMITTEE ON LIVESTOCK AND HORTICULTURE

ROBIN HAYES, North Carolina, Chairman

RICHARD W. POMBO, California

Vice Chairman

DOUG OSE, California

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

ADAM H. PUTNAM, Florida

MIKE ROGERS, Alabama

CHRIS CHOCOLA, Indiana

MARILYN N. MUSGRAVE, Colorado

RANDY NEUGEBAUER, Texas

MIKE ROSS, Arkansas

Ranking Minority Member

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

COLLIN C. PETERSON, Minnesota

RODNEY ALEXANDER, Louisiana

BEN CHANDLER, Kentucky

LEONARD L. BOSWELL, Iowa

MARK UDALL, Colorado

RICK LARSEN, Washington

JOE BACA, California

PAMILYN MILLER, Subcommittee Staff Director

(II)

(III)

C O N T E N T S

MARCH 5, 2004, HOUSTON, TX

Page

Goodlatte, Hon. Bob, a Representative in Congress from the Commonwealth

of Virginia, opening statement ............................................................................ 1

Hayes, Hon. Robin, a Representative in Congress from the State of North

Carolina, prepared statement ............................................................................. 4

King, Hon. Steve, a Representative in Congress from the State of Iowa,

prepared statement .............................................................................................. 4

Stenholm, Hon. Charles W., a Representative in Congress from the State

of Texas, opening statement ................................................................................ 3

WITNESSES

Beckendorf, Charles, chairman, National Milk Producers Federation, Tomball,

TX .......................................................................................................................... 46

Prepared statement .......................................................................................... 69

Charbo, Scott, Chief Information Officer, U.S. Department of Agriculture ........ 5

Prepared statement .......................................................................................... 71

Accompanied by:

Nancy Bryson, General Counsel, U.S. Department of Agriculture

Jim Butler, Deputy Under Secretary, Marketing and Regulatory Programs,

U.S. Department of Agriculture

Keith Collins, Chief Economist, U.S. Department of Agriculture

Denis, A.H. ‘‘Chico’’, III, vice president, Texas Sheep and Goat Raisers Association, San Angelo, TX, on behalf of the American Sheep Industry Association ........................................................................................................................ 44

Prepared statement .......................................................................................... 77

Lyons, Jan, president, National Cattlemen’s Beef Association, Manhattan,

KS .......................................................................................................................... 40

Prepared statement .......................................................................................... 84

Philippi, Joy, producer, Bruning, NE, on behalf of the National Pork Producers Council ............................................................................................................ 42

Prepared statement .......................................................................................... 78

Smith, Gary C., vice chairman, International Stockmen’s Educational Foundation, Houston, TX ................................................................................................. 48

Prepared statement .......................................................................................... 83

SUBMITTED MATERIAL

Maher, Kevin D., president, GlobalVetLink, submitted material ....................... 92

Texas and Southwestern Cattle Raisers Association, statement ......................... 89

JULY 22, 2004

Hayes, Hon. Robin, a Representative in Congress from the State of North

Carolina, opening statement ............................................................................... 97

Peterson, Hon. Collin C., a Representative in Congress from the State of

Minnesota, opening statement ............................................................................ 100

Ross, Hon. Mike, a Representative in Congress from the State of Arkansas ..... 99

WITNESSES

Akers, Jim, Coordinator, Southeastern Livestock Network, LLC, Lexington,

KY .......................................................................................................................... 122

Page

IV

Akers, Jim, Coordinator, Southeastern Livestock Network, LLC, Lexington,

KY—Continued

Prepared statement .......................................................................................... 137

Letter of July 8, 2004 to Under Secretary Bill Hawks, from United

States Senators ............................................................................................. 220

Accompanied by:

John Stevenson, director, Kentucky Beef Network, Lexington, KY, on behalf

of Southeastern Livestock Network, LLC

Armentrout, Mark, member, Beef Information Exchange, Atlanta, GA ............. 119

Prepared statement .......................................................................................... 144

Clifford, John, Deputy Administrator, Animal and Plant Health Inspection

Service, U.S. Department of Agriculture ........................................................... 101

Prepared statement .......................................................................................... 133

Accompanied by:

Neil Hammerschmidt, Coordinator, National Animal Identification System,

Animal and Plant Health Inspection Service, U.S. Department of Agriculture

Luttropp, Jodi, coordinator, National Farm Animal Identification and

Records, Brattleboro, VT ..................................................................................... 121

Prepared statement .......................................................................................... 136

SUBMITTED MATERIAL

Collins, Jim S., executive vice president, Georgia Cattlemen’s Association,

statement .............................................................................................................. 222

Fischer, Glenn, senior vice president, Allflex USA, Inc., statement ................... 223

Shaw, Mark J., chief executive officer, Micro Beef Technologies, Ltd., statement ...................................................................................................................... 239

Stott, Rick R., chairman, Northwest Individual Identification Pilot Program,

letters of July 14, 2004 to Mr. Hayes and Neil Hammerschmidt .................... 212

AUGUST 17, 2004, FAYETTEVILLE, NC

Hayes, Hon. Robin, a Representative in Congress from the State of North

Carolina, opening statement ............................................................................... 243

WITNESSES

Carpenter, Rann, chief executive officer, North Carolina Pork Council, Raleigh, NC ............................................................................................................... 265

Prepared statement .......................................................................................... 308

Collier, David, chairman, Swine Advisory Committee, American Farm Bureau

Federation, Fayettville, NC ................................................................................. 256

Prepared statement .......................................................................................... 289

Fox, Kenny, region III vice president, South Dakota Stockgrowers, Belvidere,

SD, on behalf of R-CALF, United Stockgrowers of America ............................ 261

Prepared statement .......................................................................................... 300

Gonder, Eric, DVM, Goldsboro Milling Company, Goldsboro, NC, on behalf

of the National Turkey Federation and the North Carolina Poultry Federation ........................................................................................................................ 267

Prepared statement .......................................................................................... 311

Harward, Marcus, president, North Carolina Cattlemen’s Association, Richfield, NC ................................................................................................................ 263

Prepared statement .......................................................................................... 306

Hawks, Bill, Under Secretary, Marketing and Regulatory Programs, U.S.

Department of Agriculture .................................................................................. 245

Prepared statement .......................................................................................... 280

Kremer, Russ, president, Missouri Farmers Union, Bonnots Mill, MO, on

behalf of the National Farmers Union ............................................................... 259

Prepared statement .......................................................................................... 298

Lowder, Chester, director, livestock programs, North Carolina Farm Bureau

Federation, Norwood, NC .................................................................................... 257

Prepared statement .......................................................................................... 295

Page

V

SUBMITTED MATERIAL

Kissee, John, Livestock Marketing Association, statement ................................. 318

(1)

THE DEVELOPMENT OF USDA’S ANIMAL

IDENTIFICATION PROGRAM

FRIDAY, MARCH 5, 2004

HOUSE OF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Houston, TX.

The committee met, pursuant to call, at 10:00 a.m., at the Houston Livestock Show and Rodeo, Reliant Center, Houston, TX, Hon.

Bob Goodlatte (chairman of the committee) presiding.

Present: Representatives Lucas, Moran, Gutknecht, Hayes,

Osborne, Burns, King, Nunes, Neugebauer, Stenholm, Peterson

and Ross.

Staff present: William E. O’Conner, Jr., staff director; Brent

Gattis, Pete Thomson, John Goldberg, Elizabeth Parker, Pam Miller, Josh Maxwell, and Andy Johnson.

OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH

OF VIRGINIA

The CHAIRMAN. Good morning. This field hearing of the House

Committee on Agriculture to review the development of USDA’s

Animal Identification Program will come to order.

I would also like to make an announcement that if time allows

after the last scheduled witness we will open the hearing to interested speakers who have signed up with committee staff. However,

there will be a time limitation of 2 minutes per speaker in order

for this hearing to conclude at its scheduled time of 2 p.m.

I have an opening statement and before I get into the written

portion of that let me say what a great pleasure it is for me to be

here. This is my first visit to Houston but it is not without having

a connection to this city, because Sam Houston was born in my

congressional district in Rockbridge County, Virginia. [Laughter.]

Let me take this opportunity to thank the Houston Livestock

Show and Rodeo and the International Livestock Congress for the

tremendous amount of help in putting together today’s hearing.

Field hearings necessarily involve a great deal of on-site assistance

and guidance. It has been a pleasure to work with such a professional group of people who have been most supportive and have extended every hospitality to the House Agriculture Committee, and

we have an explanation for that too because Dan Gattis, the director of the show, is the father of our Deputy Chief of Staff Brent

Gattis, so we feel very much at home right here.

Animal identification has become a front burner topic in Washington and within the livestock sector. Throughout the fall discusVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
2

sions regarding the various proposals to implement a nationwide

animal identification system have gained a new intensity. This is

an idea that has been discussed for many years, and I believe there

is growing awareness about the potential value of a system. The recent BSE finding and the Secretary’s December 30 pledge to speed

up the process have given these discussions more urgency.

I think it is important to begin any discussion of animal ID by

reminding folks that it is not a preventative measure. True, it can

be used to help prevent the spread of contagious diseases, but it

cannot be seen as an alternative to continued vigilance regarding

animal health.

The other notion that is important to remember in any discussion of animal ID is that everyone has a different concept about

what it is, what it can and cannot do and what value it has to producers, processors, retailers and consumers. For this reason it is

necessary to take a cautious, deliberative approach so that we end

up with a system that benefits that all of the interested parties and

does not come at the expense of any one sector of our livestock production system.

Our hearing today will consider testimony from the administration, the largest of livestock producer groups and our host, the

International Livestock Congress. We purposely kept the witness

list small. For today’s hearing we have deferred to the folks who

want to talk about the many available identification products,

members of the academic community and the broader range of the

livestock community. Animal identification is a big topic, and we

will consider the views of all these parties in future hearings.

In the last several months, we in Washington have experienced

a parade of companies briefing the Congress, the livestock interest

groups and the Department of Agriculture, each with a hardware

and/or software product more spectacular than the last. While most

of us are dazzled by the whiz-bang technologies now available to

identify and track animals individually or by lots, I hope to focus

today’s hearing on the associated policy questions. The reality is

that as lawmakers we will not be wrestling with the challenges of

integrating a new technology into our livestock herd. We will be

struggling with how to integrate these new technologies with the

Government and many questions remain unanswered.

For instance, do we need a universal mandatory system or will

a voluntary system with relatively high participation be sufficient

to address animal health goals? What is the price tag of this system, and who will incur the costs? How do we protect the information collected from being used by other Governmental agencies or

even public interest groups who take an adversarial approach to

producers? Should we adopt a system that serves only animal

health purposes or do we include provisions to serve the needs of

food safety, commercial, consumer, environmental and financial

communities? Do we ensure that producers are able to employ all

of the existing animal ID products currently available or pick a single universal product for everyone? How important is it to have a

system that allows producers the flexibility to add features which

contribute to the value of their product or that accommodate

emerging technologies? Is it time to adopt a United States-only approach or should we integrate our animal ID system with Canada

3

and Mexico? These are a few of the questions I have as we begin

today’s hearing. I look forward to the testimony and the participation of my colleagues since they will address some of these questions and certainly raise many more.

At this time it is my pleasure to recognize a distinguished Texan,

the ranking Democrat on the House Agriculture Committee, Congressman Charlie Stenholm.

OPENING STATEMENT OF HON. CHARLES STENHOLM, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. STENHOLM. Thank you, Mr. Chairman, and thank you for

scheduling this hearing in Houston, TX and allowing your continuing education to proceed as you have already acknowledged today.

[Laughter.]

It is a particular fitting place for us to hold this hearing and particularly fun for me, because the first time I came to the Houston

Livestock Show was 1963. I was a vocational agriculture teacher.

Brought a boy down and caught a calf in the Houston calf scramble, and it was particularly fun to watch it last night again. But,

boy, how things have changed here. The facilities now, the tremendous work that goes on here at the international show now and all

of the aspects, just tremendous. Now over $100 million of scholarships that will have gone to young people of Texas. Now, sometime

this year we will break that—$8 million this year alone—what goes

into the continuing education of the future leaders of this country.

And that is what this is all about.

And this hearing today is particularly timely because it goes

without saying that the livestock industry plays a very large role

in United States agriculture. As the Nation’s No. 1 producer of

beef, cattle, sheep and goats and as a major producer of almost

every other class of livestock, Texas as a State has a huge interest

in livestock production. One might even say our State has a Texassized interest in anything to do with the U.S. livestock industry,

and that is why it is so timely for you to have scheduled this meeting today here at Houston, at one of the largest livestock shows in

the Nation and in conjunction with the 2004 International Livestock Congress. As you have mentioned in your remarks, it is

something that we are paying and will pay additional continuing

attention to the international aspects of the decisions that we

make, both in the case of animal identification and all other areas

that pertain to animal health.

This hearing is obviously also very timely given the subject matter at hand. The question of how to securely, permanently and efficiently identify and track livestock for the purpose of dealing with

livestock diseases has been important for years. In light of recent

developments in Canada and Washington State, however, the question has gained newfound prominence. Let me clear on this: It is

time to develop and implement an animal ID system. This is something the livestock industry must want to do and be intimately involved in its formulation. It is not something Government can or

should simply impose from on high.

Mr. Chairman, it is also critically important that we have real

cooperation between the public and private sectors for the valid

reasons you mentioned in your opening statement. Obviously, there

4

are some very significant questions yet to be answered. Who will

decide what technology to use? How much will it cost? Who will

pay? How will the data be kept secure? How will privacy be maintained? These and other questions remain unanswered. It is my

hope that today’s witnesses will candidly share their concerns with

the committee along with their suggestions for addressing these

challenges. And I am hopeful that today will be a good beginning

on the kind of open debate we need in order to move forward deliberately and carefully. Mr. Chairman, I look forward to working

with you as we continue to consider the best approach to animal

identification.

The CHAIRMAN. I thank the gentleman. Are there any other

Members who have an opening statement that they would like to

make? I would remind them all that if they have anything that

they would like to submit for the record in writing it will be made

a part of the record.

[The prepared statements of Members follows:]

PREPARED STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF NORTH CAROLINA

Chairman Goodlatte and Ranking Member Stenholm, I want to thank you for

holding this hearing on the development of a national animal identification system.

In the wake of the one BSE case, this issue is getting a considerable amount of attention by the administration, the livestock industry and Members of Congress.

I applaud the efforts made by the industry to work with USDA to develop the

U.S. Animal Identification Plan (USAIP). Two weeks ago I spoke to producers at the

North Carolina Cattlemen’s convention and the North Carolina Pork Council convention. There was great support for the USAIP and the work that has been done

on this plan over the last 2 years. This is a system that requires producer input

in order for it to work.

However, there are a few things that need to be addressed as we move forward

such as how to pay for the system; will it be mandatory or voluntary; how do we

ensure confidentiality of the information; and do we take a U.S.-only approach or

a North American approach, involving Canada and Mexico.

I realize legislation has been introduced calling for a mandatory national animal

id program, and some of the bills try to fix these concerns. But I believe this hearing

is crucial to address these hard questions first in order to give the administration

and Congress guidance on how to proceed.

Following this hearing, I anticipate holding additional subcommittee hearings.

This is a system that can have great value for the livestock industry, but we must

not take the responsibility lightly. There are some very critical decisions that must

be made to have a beneficial, cost effective and confidential system.

Mr. Chairman, I look forward to today’s testimony and the insight that USDA and

the producers will provide. Thank you again for holding this hearing.

PREPARED STATEMENT OF HON. STEVE KING, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF IOWA

Thank you, Mr. Chairman, for holding this hearing. I appreciate you bringing us

down here to learn more from producers on the issue of animal identification.

The announcement in December of the discovery of BSE in the United States was

bad news but not entirely unpredictable. Given that thousands of live Canadian cattle are imported to the United States and that the Canadian border is not a commercial or biological barrier, my personal analysis of the statistical odds was that

we would find a case of BSE in the United States.

With that said, there has not been so much fuss made over a single cow since

Mrs. O’Leary’s cow kicked a lantern over in a shed in Chicago and a lot of the fuss

is justified. We have a $35 billion beef industry, a very safe and nutritious food supply to protect, and an important export market to re-open.

I have been working for the past year with livestock producers, processors, and

the USDA to accelerate a national system for source verification and traceability for

cattle and hogs. The BSE announcement only strengthened my argument that we

need an animal identification system to give us an efficient tool to trace cattle from

5

the farm of origin to and through processing. When and if this ever happens again,

we need the tools to quickly identify the path that the animal traveled and also be

able to potentially identify sources of feed supplement.

I look forward to hearing ideas on how exactly this system can become a reality.

Again, Mr. Chairman, thank you for holding this field hearing.

The CHAIRMAN. Our first witness is Mr. Scott Charbo, Chief Information Officer of the U.S. Department of Agriculture, who is accompanied by the Honorable Nancy Bryson, General Counsel of the

U.S. Department of Agriculture; Dr. Jim Butler, Deputy Under Secretary for Farm and Foreign Agricultural Services of USDA; and

Dr. Keith Collins, Chief Economist of the U.S. Department of Agriculture.

Mr. Charbo, please begin with your testimony, and we would

welcome that. We would remind all of our witnesses that their entire statement will be made a part of the record.

STATEMENT OF SCOTT CHARBO, CHIEF INFORMATION

OFFICER, U.S. DEPARTMENT OF AGRICULTURE

Mr. CHARBO. Mr. Chairman and members of the committee,

thank you for the opportunity to participate in this hearing on a

national animal identification system. I would like to discuss the

purpose and benefits of a national identification system and

USDA’s plan for implementing such a system.

Increased animal disease outbreaks over the past decade including the recent finding of BSE in Washington State have intensified

public interests in developing a national animal identification program. Our purpose for an animal identification system is to address veterinary and animal health issues. Early identification of

animal disease can contain and reduce the costs associated with a

disease outbreak. While there is currently no nationwide animal

identification system, some segments of certain species are required to be identified as part of current disease eradication activities. In addition, some regional voluntary identification programs

are in place and others are currently being developed and tested.

Over the past years USDA has supported several State and State

sponsored animal identification programs. In addition, the U.S.

Animal Identification Plan, also known as USAIP, developed a

partnership of more than 100 animal industry and State and Federal Government professionals to describe an animal information

system and infrastructure to enable the identification of all animals and premises potentially exposed to disease of concerns within 48 hours. Based on these efforts we believe there is a solid foundation on which to develop a national system. However, we must

also be mindful of the diversity and complexity of our animal industries and the lack of experience with animal identification for

a large number of U.S. producers. This extreme diversity and complexity makes immediate scaling of current projects that have been

funded by USDA difficult until a thorough evaluation of those

projects for potential use on a national scale and for a significantly

broader scope than intentionally tested can be conducted.

Our goal is to create an effective, uniform, consistent and efficient national system. We believe this goal can be achieved by adhering to several key objectives. The first objective, a system

should allow producers to the extent possible the flexibility to use

current systems or adopt new ones. Producers should not be burVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
6

dened with multiple identification numbering systems or requirements.

Second, this flexibility can be achieved by having a system that

is technology neutral so that all existing forms of effective technologies and importantly new forms of technologies that may be developed in the future may be utilized.

Third, the national system should use and build upon the excellent data standards developed by the USAIP. Provisions to ensure

data confidentiality are an essential part of this objective.

Fourth, the system must not preclude producers from being able

to use it with production management systems that respond to

market incentives.

Fifth, the national system must be designed so that it does not

unduly increase the role and size of Government. The president’s

budget proposal for fiscal year 2005 requests $33 million to fund

activities for system implementation. No funds have been appropriated for fiscal year 2004. Since we plan to begin implementation

during fiscal year 2004, we are considering alternate methods of

funding.

USDA plans to move forward with implementation of a national

identification system this year, first on a voluntary basis and eventually with a requirement for premises and individual animal identification for all animals. At this point, we can provide general indications of our plans for fiscal year 2004. Implementation will begin

with an assessment of those existing systems now in use and funded by USDA. This review would determine the capacity of any of

these systems to serve as national premises and national identification number allocation and repository systems. Based on this review we would select the most promising infrastructure to fund to

develop the national allocation and repository system.

Our first priority is to get the national premises allocator and the

repository in place in fiscal year 2004 and begin allocating premises identification numbers to cooperating States, tribes and other

entities that are ready to register premises. We envision providing

funding through cooperative agreements to States, to tribes and

other entities so that they could develop the capacity to interface

with the national number allocators and repository systems. Once

cooperators are integrated into this national system and premises

are being registered we would be in a position to use animal identification numbers to producers through these early cooperators.

The technologies used by producers and non-producers to identify

and track movements of animals would be worked out through

these cooperative agreements with the input of States, the animal

health officials in those States, producers and the industry. USDA

plans to be technology neutral. Our interests are in setting information standards or performance standards, developing a national

database system to which States and other entities can readily connect and receiving data from those entities.

Many issues must be resolved before we can accomplish the task

being identified for 2004 and beyond. We look forward to working

with the Nation’s producers, the industry, the animal health officials, the steering committees on USAIP and the Congress to successfully achieve a national identification system. Thank you and

7

we would be pleased to respond to any questions you may have at

this time.

[The prepared statement of Mr. Charbo appears at the conclusion

of the hearing.]

The CHAIRMAN. Thank you, Mr. Charbo. Do any of the other

panel members have an opening statement to make?

I will start with a question. Mr. Charbo, some have said that a

single universal mandatory program is not necessary to serve the

purposes of monitoring animal health. Others assume that the system being contemplated by the USDA will be mandatory and apply

to all commercial animals. Can you outline for us what the Department’s intentions are in this area?

Mr. CHARBO. We believe coming out with a voluntary system to

begin with that there is a lot of momentum going currently with

the industry to initiate a voluntary system and get participation so

we can learn early on working closely with the regional producers,

the animal health officials. We believe also that we are not looking

for a product out of the box, that there are a lot of initiatives that

are currently going on, and if we set those data standards, the information needed to respond in an animal health emergency, information about a premises and an animal, that we can work with the

systems that are currently out there to bring those into a national

system, and that would be the point of data that the animal health

officials would use to respond to that emergency.

The CHAIRMAN. Animal ID systems currently in use range from

a clipboard on the dash of the truck to state-of-the-art hardware

and software packages. Will you design a plan to accommodate this

entire range or will USDA’s plan impose a specific technological solution?

Mr. CHARBO. No. As we said, we wanted to remain technology

neutral for those purposes that you mentioned. What would be a

requirement is the data standard coming in from those multiple

systems. That would be a standard of the Department for the industry’s work force. That would also be the standard for these national repositories where the data would be connected to.

The CHAIRMAN. Many are advocating the U.S. Animal Identification System, USAIP, while others say we should base it on existing

information, such as brucellosis vaccination and veterinary health

certificates to create a national animal ID system. Have you done

an analysis of existing information sources?

Mr. CHARBO. We are currently doing that. We are familiar with

those programs. There is a need for national identification consistency across those programs. Premises are being identified in a lot

of those programs. There is not a unique numbering system in

there to identify. In other words, you would get duplicate numbers

coming in from multiple systems or multiple programs. We feel it

is important to move forward with these data standards in order

to clean some of that up.

The CHAIRMAN. Ms. Bryson, can you guarantee that the information collected out of the Department’s Animal Identification Program will be protected from release under the Freedom of Information Act by this or future administrations? Will this information be

shielded from other governmental agencies, such as the Internal

8

Revenue Service, the Environmental Protection Agency, the Food

and Drug Administration, et cetera, or should it be?

Ms. BRYSON. As to the first part of your question, Mr. Chairman,

we can’t guarantee that it won’t be released. The authority that we

are working under right now is the Animal Health Protection Act,

and that does not confer on us the authority to determine by ourselves what is confidential and what is not.

As you have indicated, we are, like all the other Federal agencies, subject to the Freedom of Information Act, and there are two

exemptions to that act which are relevant. In general, the Freedom

of Information Act favors disclosure of information that is provided

to the Government. Exemption 4 excludes from disclosure information which is confidential, commercial and financial information or

trade secrets. Exemption 6 also exempts information that is subject

to the Privacy Act.

In the system that we have described, there is very good case law

indicating that information that is voluntarily submitted to the

Government will not be disclosed under the Freedom of Information Act. That is based on an en banc decision from the DC Circuit;

Supreme Court denied review. It would be USDA’s position that in

a voluntary system information that is provided to us that is considered to be commercial and financial information would not be

disclosed. If someone challenged us on that, it is possible that a

court could look at the decision and reach a contrary conclusion, although our analysis of the law right now is that there aren’t decisions going the other way.

Once we approach a mandatory system, the test becomes harder

about what can be released and what can’t be released, and in

those situations information that is commercial and financial information will be released unless the submitter can establish that to

do so would create a substantial competitive harm to him or her.

The CHAIRMAN. Thank you. Dr. Butler, if the USDA were to

mandate an animal ID system to trace the movement of live animals within the United States, would we be within our rights

under the North American Free Trade Agreement and the World

Trade Organization to require that the same information be available for live animals imported into the United States?

Mr. BUTLER. I don’t know the exact answer to that, Mr. Chairman.

The CHAIRMAN. It is an important question.

Mr. BUTLER. It is a very important question. Dr. Collins?

Mr. COLLINS. It is not a question that we have asked our Office

of General Counsel to opine on yet; however, we have had some informal discussions about it, and we think you could go either way.

You could have a mandatory ID system in the United States and

not require it from countries exporting to us or you could require

it provided you did it in an equitable way, that you treated foreign

producers in the same way you treated domestic producers.

Ms. BRYSON. If I could just add to that. I think the analysis

would be are identification systems that might be in use in other

countries sufficiently similar to ours or equivalent that we would

acknowledge them under our trade system.

The CHAIRMAN. Very good. My time has expired. It is my pleasure to recognize the gentleman from Texas, Mr. Stenholm.

9

Mr. STENHOLM. Thank you, Mr. Chairman. Continuing on the

second question you asked, Mr. Chairman, Mr. Charbo, in your testimony you say that you don’t want to have a system that is—or

that you want to have a system, rather, that is technologically neutral. And I can agree with you if you mean by that not picking a

singular particular company or product. However, in order to have

a system that can work across the whole nation, won’t you have to

in some way ensure that a single type of technology is used? For

example, do you think it would be problematic to have a calf identified with a rumin bolis in Alabama, nose printed as a backgrounder

in Oklahoma, given a radio frequency ear tag on wheat pasture in

Texas and then retinal scanned as a feed lot in Nebraska? Each of

those would meet the general ID requirements you have described,

but I don’t think that sort of scenario would be quite the kind of

system that we all have in mind.

Mr. CHARBO. We would agree with that. We feel also, though,

that is best determined on the grassroots level with the producers

and the industry. On a Federal level, we would be establishing

those data and those performance standards of each of those systems so that the data is consistent and in an animal health emergency we would be able to respond using those repositories that we

mentioned in our statement. The tendency for us on a technology

level if we were to mandate technology level is in the event of

change, which is the nature of technology. Technology changes very

rapidly. We want the flexibility for producers to be able to make

those changes without having a Federal requirement around that

technology. That is the position.

Mr. STENHOLM. I think that is going to be key, and we also have

to have a central place that whatever the technology can come into

and be within the 48-hour frame be established in an identification

system.

Mr. CHARBO. The repositories represent that place.

Mr. STENHOLM. The last question the chairman asked prompted

me to make this observation to all of us in the industry as we seek

this system. Be careful what you ask us to do lest we do it, because

many times we do things domestically that do end up biting us

from the standpoint of international trade. And there is a tendency

among some in the United States today to in fact look at this as

something other than what I hope we look at and this is an animal

health question. This is not a trade question or a market question,

and I think it is particularly—I will just express a personal opinion

now in the light of where we are in the international group that

meets here. I think that seriously that we should be looking at a

system, voluntary system if you mean but what I like to call a

mandatory voluntary system. And that is once we agree as an industry what it is that we need to do in order to protect our industry then it becomes mandatory, because you cannot allow individual producers for whatever reason to stay out of the system if it

is going to work as it was intended. And that is always a difficult

question for us because there are always, particularly in the livestock industry, those who have very strongly held positions.

But I cannot overemphasize and I think for most leaders in the

industry today recognize that this is an idea whose time has come,

and we are very fortunate that we have developed this system over

10

the years. As I mentioned in my opening comments, we have for

years did everything possible to identify sources of animal disease

because it is in our best interest as producers to do so. And we

have done a pretty good job of educating the general population,

because look at the consumption of beef in the United States as a

result of BSE, look at the tremendous increase in consumption of

beef in Canada as the Canadian consumers understood that they

didn’t have a health problem for humans. It was a problem that

needed to be addressed and we are addressing it.

So as we look at this, I hope that we can, working with our

neighbors to the south and to the north, work together on developing this concept as best that we can. And I think that is going to

be critical, again, within the concept of a voluntary mandatory program.

Mr. Charbo—well, I am about out of time on this one. I will save

this—well, it will take a little too long on this. Well, I will wait the

next round and give my colleagues a chance. Thank you, Mr.

Chairman.

The CHAIRMAN. I thank the gentleman. We are very pleased that

we have 12 members of our committee, including a great many

subcommittee chairs and ranking members. The whole committee

consists of 51 members but to bring 12 of us to one location out

of Washington is quite an accomplishment, so we are pleased that

so many of our members participated in this hearing, and I want

to recognize Congressman Frank Lucas from Oklahoma who is the

chairman of our Subcommittee on Conservation, Credit, Rural Development, and Research.

Mr. LUCAS. Thank you, Mr. Chairman. I appreciate the opportunity today, and I would suspect the size of the delegation reflects

the importance of this issue. It has brought us all here today. I did

nine town meetings just a couple of weeks ago out in northwest

Oklahoma in the panhandle, and those are—I would note for the

panel who have been to those kind of events, those are very enlightening, very insightful events. And my constituents brought a

number of questions to my attention on this topic, which I think

it would be a great time to discuss with the panel. One of the

issues they are very fired up about out there is whatever kind of

a system we come up with that it doesn’t turn out to be a source

of user fees every time we record a movement of an animal to support USDA or any other Governmental entity. Many of them being

a part of a number of different breed organizations, they are very

sensitive about transfer fee costs, and they realize that between the

birth of a calf and the arrival at that packing plant or leaving that

packing plant that there may be 3, 4, 5, 6 transactions and they

don’t want to be assessed some fee that over the course of the animal’s life builds a substantial price into that. So there is sensitivity

about that, and we can discuss that in a moment.

There is also, as the chairman addressed, the question of proprietary information, it is very much on their minds out there. There

is a sensitivity among my constituents that they don’t want groups

like, and they used the term, I did not, groups like PETA going to

their computer to examine just how many calves on any given day

or what their stocking patterns have been. That is absolutely important, and if that has to be addressed legislatively to make cerVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
11

tain that is proprietary, then my constituents in Oklahoma are

very, very focused about that.

And one other question, and I will throw this one to the panel,

perhaps Dr. Collins or whoever, but the question was put to me

and I couldn’t answer it, if the real goal of this is improving animal

food health quality, of course, and if the side benefit is reopening

our international markets around the world, the question was put

to me if we come to terms technologically and systemwise in calendar year 2004 and we implement that in calendar year 2005, the

newborns, by the time those calves work their way through the

process to the packing plant in 2006 they won’t show up in that

Tokyo supermarket conceivably until January 2007. If we come to

an agreement on a standard and it is 2007 before that traceable

produce winds up in that supermarket in Tokyo or Seoul or wherever, their question is will our friends around the world, based on

our good intentions and efforts, give us the benefit of the doubt and

respond immediately or are we talking about 2007 before we reenter those markets? And if anyone on the panel could address that,

I would be fascinated by the answer.

Mr. COLLINS. Can I start with the last question, Mr. Lucas?

Mr. LUCAS. Absolutely, Dr. Collins.

Mr. COLLINS. I think we have to look at national animal identification systems in the context of all the other things that we are

doing to ensure the safety of our beef and in food in general. I don’t

know of a country that has made a national animal identification

system an absolute necessity for opening up their markets, so I

don’t think we have to wait to 2007 or 2008 for the Japanese. I

have no timeline in mind to predict when the Japanese would open

their market to our beef, but I think that our goal in working with

them and other countries that have not opened up their markets

is to convince them of the universe, the portfolio of programs that

we have in place, that start with the non-ambulatory animals not

being in the food supply, removing specified risk materials from

animals 30 months and older, the test and hold strategy, the surveillance program which we are about to announce here shortly.

We believe it is those protections that will motivate opening of

those markets together with the work that is going to have be done

with the Organization for International Epizootics.

I don’t think necessarily working directly with OIE was a requirement to get Mexico and Canada to open their markets to us

as they have, but it is going to be for countries I think like Japan.

So I don’t think we have to wait till 2008 for this to happen. I don’t

know if any of the other panelists have—Mr. Butler, do you want

to make an additional comment?

Mr. BUTLER. Well, I would like to reference a previous question

about our North American partners and neighbors. The Secretary

has met with her counterparts and from that meeting in late January she has challenged Dr. J.B. Penn to lead our efforts for USDA

to work with his counterparts to harmonize activities with relation

to North America. As we have identified the areas that we want

to harmonize, we have also discussed animal identification along

with many other issues, so that will be a part of our discussion as

we work with Canada and Mexico.

12

From an animal health standpoint, all countries do have the authority to set their standards for movement or testing for disease

purposes before they move into another country, which is a separate issue, but the animal identification that we are discussing at

this hearing will be a part of those discussions as we work to harmonize our activities with our trading partners to the immediate

north and south.

Mr. LUCAS. Another round, Mr. Chairman?

The CHAIRMAN. Possibly so.

Mr. LUCAS. Thank you.

The CHAIRMAN. It is now my pleasure to recognize the gentleman

from Minnesota, Mr. Peterson, who is the ranking minority member of the General Farm Commodities Subcommittee.

Mr. PETERSON. Thank you, Mr. Chairman. As you are aware, I

think I have introduced H.R. 3787 which has a few things in there,

but it has a FOIA exemption and I judge from your testimony that

in order to be sure we would have to actually legislatively pass a

FOIA exemption for you to be able to say 100 percent that we are

going to be——

Ms. BRYSON. Yes, that is right.

Mr. PETERSON. Will the Department support that bill if I am able

to get a hearing in the Government Reform Committee? Not the

entire—just the FOIA part of the bill.

Ms. BRYSON. I think we are looking at all the bills, and we are

working on our position.

Mr. PETERSON. But you haven’t taken a position yet as to whether you should ask for a FOIA exemption?

Ms. BRYSON. We have not. We have been really focusing on the

mechanics of putting this together and looking at some of the information that I talked to the chairman about in terms of looking at

case law and what kind of protection can be afforded voluntary information since that is where we are thinking about beginning.

Mr. PETERSON. How soon are you going to make your recommendation to the Secretary on what plan you are going to recommend?

Mr. COLLINS. Well, I think we are going to do it very shortly.

Mr. PETERSON. What does that mean, a week or two?

Mr. COLLINS. Yes. I think within the next couple of weeks. We

obviously are putting these things in writing, so we are in the

drafting of a report right now to the Secretary.

Mr. PETERSON. Just for your information, I have talked to the

chairman of the Government Reform Committee and once you have

made your recommendations and that is moving ahead, I think he

is willing to have a hearing on FOIA, so I would encourage you to

get a position on that.

I understand I think what you are saying about how you are trying to put this voluntary system together but what I am concerned

about is how you are going to get all of this stuff into a place where

you can use it. If you have—as I understand what you are going

to be recommending or you are thinking about is maybe States

would have a database, maybe industry groups would have a database and that somehow or another all of that information either

would be kept in the States but would be accessible by USDA. I

sit on the Intelligence Committee and right now we are spending

13

a lot of time overseeing trying to get all these disparate databases

into one place, and we are having a heck of a time. We have got

issues, people reading it from different places. I am just concerned

that we don’t create a problem like that with whatever we come

out with here.

Seems to me that you are going to have to at the minimum set

a standard on how they are going to be able to transmit this data

to some kind of a national database so we can get access to it, and

that is not an easy thing to do. I mean the costs in a lot of these

systems is getting that data from where you collected it into the

system, and if you don’t have a way to do it automated, it is going

to cost a ton of money. And I assume you guys are thinking about

that, but that is kind of where I was coming from in trying to say

that I think USDA needs to control this data, we need to make it

private, exempt from FOIA. And by the way, in my part of the

country the concern people have is—my producers are concerned

that the packers are going to have this information, and that is

what they are worried about, more than PETA, from having an unfair market advantage.

So the voluntary—if we are going to have this voluntary system,

do you envision that that would be what we would do for the foreseeable, just is that a way just to get the thing started and are you

going to look at a mandatory voluntary system, as Mr. Stenholm

has talked about, down the road, because I think eventually we

have got to get everybody into this. Have you thought that far

down the road?

Mr. CHARBO. We have thought through the initial voluntary program and the thinking is that at some point outward that it most

likely would be a mandatory system.

Mr. PETERSON. But you have no timetable on that?

Mr. CHARBO. No.

Mr. PETERSON. You probably know this, but in my judgment if

you don’t have some kind of a mandatory situation, you are going

to have a lot of producers that aren’t going to get involved in this,

that don’t belong to any organization. If you don’t do it, you are

going to have to have the States do it or something or you are just

going to have a lot of these little guys that are just never going to

get into this. Most of them don’t even know this is going on.

Mr. COLLINS. We are concerned about that, Mr. Peterson. I think

one of the things that we have done is we have thought about the

Federal resources that have to go into this, particularly in the first

year, and that we want to fairly dramatically scale up the resources that up to now we have been thinking about putting into

communication and education. We really have to have a national

communication and education effort on this. We will see over time

how effective that will be. I think, as Mr. Charbo said, at this point

we don’t feel we are prepared to make a judgment about mandatory. We think to get the program started it has to be voluntary.

This country is just too big and too diverse, too many disparate situations. It has to be voluntary to get it going and then we can

make a judgment to see how many people participate. Surely, we

are not going to get 100 percent but what the right level is I don’t

know. Even the Canadians with a mandatory program have said

they would be happy to get 95 percent participation. So you know

14

you are not going to get 100. I don’t know what the magic number

is, but we feel it is worth taking a hard shot through education and

communication to see what we can do over the next year or two

and then we will be in a better position to make that kind of judgment.

Mr. PETERSON. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. Next I would like to recognize the gentleman from Kansas, Congressman Jerry Moran,

who is the chairman of our General Farm Commodities Subcommittee.

Mr. MORAN. Mr. Chairman, thank you very much.

I recognize that I am in Texas and so this statement is said with

some fear, but although I can’t claim that Kansas is more of a cattle State than Texas, I can indicate that there is no congressional

district in the country where cattle prices matter more than the

First Congressional District of Kansas. And this is a significant

issue, and what USDA has done in response to the Canadian cow

being found in Washington State has a significant impact upon all

of us, and in our State represented here today has a huge impact

not just upon ranchers but upon the entire State’s economy. This

is a huge, huge issue.

And I am pleased to learn just within the last few days about

developments in regard to our trade relationship with Mexico, and

I commend the Department of Agriculture for their efforts in seeing

that our neighbor to the south becomes a purchaser of our products

again. Anxious to see the publication of the rule in regard to Canada and reaction from cattle producers across Kansas, and ultimately I hope this is the key that opens up those markets that remain closed to the American producer. Mr. Lucas has had his 9

town hall meetings. Whenever we find a town we have a town hall

meeting in my district, and the most common question is very

much what do we have to do to get the Japanese to buy our product?

In regard to animal ID, somewhat as a consequence of those

statements, what is the consequence of us not developing an animal ID system? Is there a belief out there by those in the industry,

by people at USDA that this is not necessary? And if that is the

case, what bad happens if we don’t do what you are suggesting?

Mr. COLLINS. If I could take a shot at that, Mr. Moran. I think

thinking has evolved a lot on that question over the last 5 or 6

years. You only have to look at USDA’s emergency spending on the

control of foreign animal diseases over the last 10 years—it has

grown dramatically. And then look around the world at the outbreaks of animal diseases. Look at the foot-and-mouth disease in

UK and in Europe. Tremendous costs on the economies over there.

That has set in motion a lot of thinking about what you can accomplish by having a national animal ID program.

And the way this is done—I’ll take a minute to explain what

economists do to look at this. I know Mr. Lucas and I participated

in this exercise, Silent Prairie, which was a simulated foot-andmouth disease outbreak, and the costs of that outbreak were substantial. They were in the tens of billions of dollars. But we found

through that simulation which used mathematical modeling of the

spread of diseases that the faster you could track down the aniVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
15

mals, the sooner you could control the disease, the fewer animals

would have to be depopulated, the lower the costs could be, the

sooner you could open up your foreign markets to trade. Surely,

when you get something like foot-and-mouth disease you lose all

your markets immediately, and then under the OIE requirements

after you have depopulated your last animal and you have eliminated the infection completely, you still have to wait 3 months before trade can open up. That is the guidance that they give to countries. Those are all economic costs. So what economists have done

is they have tried to model that. What happens if you can reduce

the traceback time from 10 days to 5 days? It makes a difference

of billions and billions of dollars in the event of a widespread footand-mouth outbreak. So that is what is motivating this.

Now, it is a little bit intangible because we haven’t had some of

these catastrophic diseases in the United States. The last time we

had a major foot-and-mouth disease outbreak I think was 1929 or

something like that. So they are once in a decade events, but when

they occur they could be catastrophic.

Mr. MORAN. What I am trying to do, Doctor, I am trying to do

a cost-benefit, what the costs are of the system that you are developing versus the cost of doing nothing.

Mr. COLLINS. Right.

Mr. MORAN. But the intangible, the unknown is the likelihood of

the outbreak.

Mr. COLLINS. Correct. It is an expected value. The expected value

of the economic loss. And that is a function of the probability of the

disease occurring and then the size of the damage when the disease

does occur. We don’t know those things. I mean you have to sort

of guess at those things, but they can be very, very large. And you

can reduce those costs by reducing traceback time, and you can reduce traceback time with improved animal identification systems.

Obviously there are a lot of different systems that you could use.

Mr. MORAN. What is the estimated cost to produce the system

that you are describing in your testimony, and how is it going to

be borne, who is going to pay for it?

Mr. COLLINS. I can’t give you a number on what the cost would

be. There are cost estimates of different kinds of systems. Probably

the quantified one I would point to is the USAIP, U.S. Animal

Identification Plan. The 6-year costs on that were estimated by the

USAIP group at about $550 million. So this is going to be a costly

exercise. Now, that of course assumes specific technology across all

species groups. What we are trying to do is something that is more

flexible. We think by leaving it up to the producers and being technology neutral, allowing flexibility of using current systems, that

hopefully we can do this at less cost. Also, things we don’t know

about are as we ramp up to a national system what kind of economies of size will we see in the technologies that will be available

to the producers? They may be available at a lower cost, we just

don’t know. But I think that combination of not us picking the winner but letting all the different suppliers out there compete, fostering great competition, building on economies of size, being flexible,

I think we hope that we can bring the thing in at less cost than

those half a billion to a billion numbers that you hear, but I don’t

have a specific number.

16

Mr. MORAN. Thank you, Dr. Collins. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Moran. It is now my pleasure to

recognize the congressman from Arkansas. Before I do I want to

note that we are very pleased to have a former congressman from

Arkansas with us, Congressman Ed Bethune. Ed, wave to everybody there. And now I want to recognize the current congressman,

Mike Ross, who is the ranking Democrat on the Livestock and Horticulture Subcommittee.

Mr. ROSS. Thank you, Mr. Chairman, and thank all of you for

joining us here in Houston. I think it is important that we get out

of the halls of Washington, DC and get out among the people. If

we are going to represent the people, I think it is important we get

out among them and listen to them and take their issues and concerns back to our Nation’s capital.

Congressman Peterson and I have been working on this issue

well before December 23. It has just gotten a lot more public attention and a lot more attention from the press since a single cow was

diagnosed with BSE in Washington State on December 23. A couple of just quick questions, if I may, and before I do let me just

begin by saying this, that I have had town hall meetings at barns

in my congressional district. We have a lot of cattle producers in

our district, some run several thousand head and a lot of them

hobby farm where they have got a real job but they will tend anywhere from 20 to a couple of hundred head of cattle at night and

on the weekends. So I am concerned about how anything that we

do will impact producers, both large and small. That is one of my

biggest concerns.

The reason I believe that we need a national animal ID program,

the reason I am a cosponsor of Congressman Peterson’s bill, H.R.

3787, is quite simple: Since December 23 when a single cow was

diagnosed with BSE, we have lost pretty much all of our export

markets. The last count I had was 52 countries. I know Mexico and

Canada is coming around a bit, but the things they are coming

around on, cattle under 30 months, is only going to take—we are

still going to have about a 40 to a 50 percent loss in exports even

in those countries, as I understand it. It is selective or cherry picking in terms of what they are going to allow and not allow. So I

think something has to be done to get the export markets back.

That is 10 percent and as many of you know, that is 10 percent

of total sales in the U.S. beef industry that go to those countries,

and of course 90 percent of that 10 percent goes to South Korea,

Japan, Mexico and Canada. So I would encourage you all to continue as I have with my conversations, both public and private,

with Secretary Veneman to continue to work with our USTR ambassador to try and get these markets back.

Some of use believe it is going to take a national animal ID program to get these markets back to restore confidence. Fortunately,

we did not lose confidence in consumer beef consumption. America

has not gone down, and that is why we have only seen about a 20

percent drop in prices for most cattle producers. But we have got

to restore confidence and get those foreign markets opened back

up. I think a national animal ID program is the way to do that.

From the town hall meetings I have had in my district they have

two concerns. One is privacy and I don’t believe that you all can

17

regulate that through regulation. A lot of people say why do we

need to pass the bill that Congressman Peterson and I have. It is

because we address that issue of privacy in legislation. I am not

really sure that you all could do that through regulation. So question No.1 is—and yes or no is fine so I can hopefully get answers

to a bunch of these—do you feel like you can address the privacy

concern strictly with regulation? Yes or no will work.

Ms. BRYSON. Maybe. We can address some of them. That is the

short answer. Privacy Act doesn’t apply to——

Mr. ROSS. I think maybe or some of them isn’t good enough for

our cattle producers, and that is why I think we need legislation

to deal with this.

The other question, and it is in your testimony and I know you

didn’t read all 18 pages this morning and I thank you for that, but

in your testimony you talk about the EU and UK and how they

have been doing it one way but they are going to start doing it another way as early as April of this year. And then Canada you talk

about. We have had 29 different tagging options, and by early next

year we are going to have it down to one. The point I am trying

to make is my little sell barns that I have got in Arkansas, Hope

Livestock Sell Barn comes to mind, they want to make sure they

don’t have to have 20 computers lined up with 20 different softwares and 20 different scanners to read 20 different kinds of buttons or tags or whatever you want to call it. And that is why I

think one technology is needed. If you want to have a bunch of

folks selling that technology, I guess it is fine, although that makes

about as much sense to me as this new Medicare drug bill does.

It looks like to me if you have got one person buying the buttons

with the low radio frequency, being USDA, for every cow in America you are going to get a much better deal than if you have got

20 or 30 people out there doing it. I mean that is what has made

Wal-Mart so successful. They buy it by the barge-load and ship it

over here from China or wherever they ship it from. And I just

don’t understand if you have got 20 or 30 vendors out there selling

it, I know it is good for their business but it looks like to me it just

increases the cost per cow.

Can you all expand on, one, how we get a system at USDA to

where they can respond within 48 hours and know where every

cow is within 48 hours? How can we do that with a bunch of different vendors with any confidence? And if we do it with a bunch

of different vendors, what does that do to the price, and are those

things that you all have considered? And, finally, if you could just

share with me the last report I had we are still looking for 51 cows

that we know had come in contact with that single diseased cow

in Washington State. How many cows are we still looking for, and

how many cows do you believe we would be looking for today had

we had a national animal ID program that was mandatory and

that used the kind of technology that could allow you to know in

48 hours? Did you get all that?

Mr. COLLINS. Maybe I could start with some of it.

Mr. ROSS. Thank you.

Mr. COLLINS. I think this question of USDA picking, mandating

a technology has been a difficult one for us. We heard from a lot

of people around the country, some of whom make the argument

18

you just made, that there will be chaos in the marketplace, that

there will be critical movement points like auction markets that

have to have a variety of different systems to take the different

animals that come in the door. On the other hand, we have people

that talk to us as referenced in the chairman’s opening comments

who keep their records in a spiral bound notebook and they don’t

want us to tell them that they have to pay $2.50 an ear tag for

each of their animals. So we take the role of Government as a serious policy issue that we have to decide on, and I think that we

don’t believe we are making a mistake by saying that the first response to solving a problem ought to be to try to let the market

work and let the market work it out. And I think that is the position we are taking initially by having a voluntary program, working through States, working through cooperative agreements, trying to form consensus in partnerships on a voluntary basis. It may

well be that we have one technology, it may well be that our proposal is nothing more than a platform for RFID to win and be the

technology. But if it does, we would like to see it happen through

the competitive marketplace and the private individual choices of

producers and all the participants in the marketplace rather than

have Uncle Sam tell people what they have to do.

I think our goal has been, as Mr. Charbo pointed out, developing

the data standards. We want information. We don’t want technology, we want information, and so our biggest contribution is to

specify the information needs that we need, set up a place to put

that information and make it easy for people to communicate that

information to us through our software standards. So that is the

best answer I can probably give you on that. It may be in the long

run that we end up exactly where you are, but I have some faith

that people in the private sector can work out some of these concerns that you raised about the confusion in the marketplace with

many different readers and so on. So that is sort of the philosophical principle behind what we are doing. Where it goes we will see.

It will depend on which technology is the most cost effective.

Mr. BUTLER. May I add on to Dr. Collins’ statement that different species groups have advocated different types of technology.

I think a lot of our focus and our thinking thus far has been on

beef cattle because we have referenced BSE, but, for instance, the

horse industry I don’t think would advocate some type of an ear tag

approach. So, again, another reason as we look at species beyond

beef, sheep and dairy that we may be referencing this morning that

we have all aspects of technology considered.

Let me shift, if I may, to answer your question about traceback

of the animals with regard to the December 23 investigation. It is

my understanding, and I don’t recall the precise date that APHIS

completed that investigation, so we are no longer looking for any

of those 51 cows. To add to your question——

Mr. ROSS. You have found them all?

Mr. BUTLER. No, sir, we have not, but we have completed and

terminated the investigation.

Mr. ROSS. But we are still looking for—we are not looking for 51,

we just never found them.

Mr. BUTLER. Correct.

19

Mr. ROSS. So we have to assume the 51 we couldn’t find aren’t

diseased and they are not associated with any of the cows that

could become diseased.

Mr. BUTLER. That is the assumption we are making.

Mr. ROSS. And if we had a national animal ID program, we

would have been able to find them within 48 hours? Not under a

voluntary program but under a mandatory program?

Mr. BUTLER. In the case of this specific cow, under an ideal scenario, Canada and the United States would have had systems that

were compatible, because recall she came from Canada into our

country, and it was the fact that she did have an identification tag

that allowed us to start that traceback.

Mr. ROSS. But if we had a voluntary program, if we had a voluntary program and all 51 of those cows were on the part of the

voluntary program that did not have a tag or a button, then we

wouldn’t be any better off than we are today.

Mr. BUTLER. Correct.

Mr. ROSS. Thank you.

Mr. BUTLER. The whole goal is rapid identification for traceback

purposes.

The CHAIRMAN. I thank the gentleman. It is now my pleasure to

recognize the gentleman from Minnesota, the chairman of the Department Operations, Oversight, Nutrition, and Forestry Subcommittee, Congressman Gil Gutknecht.

Mr. GUTKNECHT. Those are all the departments that nobody else

wants. [Laughter.]

Let me, first of all, say, Mr. Chairman, thank you for having this

hearing and a big thank you on behalf of all of us to the good people here in Houston. This has been very impressive for all of us to

see just how big this livestock show and rodeo really are, and you

have treated us very warmly since we arrived yesterday afternoon,

so we thank you.

Second, let me just say that I think there is good news for beef

producers on many fronts. Yesterday, of course, with the reopening

of the markets, apparently, in Mexico I think that is good news. I

think consumers are voting with their pocketbooks. Today, McDonald’s released its numbers for last month, and its store sales were

up 20 percent. So, clearly, Americans’ confidence in the beef supply

here in the United States is strong and is growing stronger, so I

think there is good news on that front.

I think I might also mention to the folks who are here that it

is probably obvious to you, as it is to us, that there really is no consensus yet in terms of what direction we should go, and some

might say that is bad thing. I happen to think it is a good thing.

There was a President, I think it was Rutherford B. Hayes that refused to debate his political opponents and one time he was asked

why, and he said, ‘‘Because I have to think before I speak.’’ And

I think sometimes Washington has a tendency to do the ready, fire,

aim and come out with a policy before we have really thought it

through, so I think these field hearings and the discussions that

the Department are having are actually very good.

But, finally, I want to get to something that—I also serve on the

Science Committee and there is a little agency, and I have mentioned this before and I will lead this to a question, it is an agency

20

in the Federal Government called NIST, the National Institute of

Standards and Technologies, and I really think that they have to

become more engaged in this whole discussion. Most people don’t

know much about NIST. I wouldn’t even expect many of my colleagues would know. If I did not serve on the Science Committee

I wouldn’t know much about NIST, but they set the standards for

virtually everything that we take for granted in the United States.

In fact, if you look on the back of any packaged food product, you

will see a little nutrition label. All that research is done at NIST.

The frequencies used in our cell phones are determined by NIST.

And I think the point I want to make about this is, first of all,

and a question I have for our panel here is have you engaged some

of the people over at NIST yet in trying to come up with a standard

that may make some sense? And then the second point is not really

part of the question but people need to understand that NIST sets

a lot of standards but they don’t necessarily always do it at the request of some Federal law. Many times people in the industry determine that there is going to have to be some kind of a standard.

So perhaps Dr. Collins or Mr. Charbo maybe you want to start and

just say have you talked to the folks over at NIST yet about coming

up with a standard and have people in the industry begun to talk

to NIST about coming up with a standard?

Mr. CHARBO. We have not talked to NIST. We work with NIST

in the Department, we work with them on our credentialing for security aspects and security standard designs for USDA systems,

but on the animal ID I don’t believe at least the committee here

has not spoken to NIST. I would need to check to see if any of the

USAIP Steering Committee and the APHIS people have spoken

with NIST. Most of the guidance from USAIP has been ISO driven,

looking at those ISO standards and how to apply those ISO standards to the animal identification system.

Mr. GUTKNECHT. Well, my sense is that a standard will emerge

and that the industry itself will begin to say, ‘‘Hey, we need to

have—we can’t have half the country practicing at 120 volts or

whatever and the rest of world going at 240 or the rest of the

United States.’’ It is sort of the whole idea of railroad tracks. I

mean, ultimately, you have got to have a standard width for railroad tracks in the United States, and it may not be the same as

the rest of the world but that is what it is here in the United

States. So that is my advice.

There was a question that staff wanted asked and I will ask it.

Does the FOIA exemption in Mr. Peterson’s bill prohibit USDA

from sharing the information with other Federal or State government agencies, and would those agencies, particularly State governments, be prohibited from releasing the information to the public? Have you done enough research to answer that question?

Ms. BRYSON. I don’t think we can answer that question yet. The

FOIA exemption for release to other Government agencies is fairly

limited to enforcement purposes, and there have been questions

asked about whether we could share information with other agencies for health purposes such as HHS, and we are just still looking

at that.

Mr. GUTKNECHT. Thank you very much. I yield back my time.

21

The CHAIRMAN. I thank the gentleman. The gentleman from

North Carolina, Mr. Robin Hayes, has a particular interest in this

subject. He is the chairman of the Livestock and Horticulture Subcommittee.

Mr. HAYES. Thank you, Mr. Chairman, and thank you to the all

you good Texans that have offered us incredible hospitality and to

the Houston Livestock and Rodeo Association for providing scholarships. As many of you learned last night, one of our great staff

members is a recipient of one of those scholarships. And while we

are on that subject, while I was looking around this morning,

Amber Bane and her Jersey cat Missy, Eric Richter, president FFA

in Shanadoo, and Brady Brown, his aide, are looking for one of

those scholarships. Any of you all on the committee here they are

really fine young people. Put in a plug for them. [Laughter.]

To the panel, animal ID, if we had the right data, how much insurance would this be against closure of foreign markets to our

livestock? And before I say that everybody in this room is in agreement that animal health and food safety is subject No. 1, so we are

not overlooking that. And we do sit here and we watch when you

shake your head yes, when you shake your head no and when your

head just goes down and you go to sleep on us. So thank you for

that input as well.

Mr. COLLINS. It depends on the disease episode. The answer to

your question depends on the disease episode. Let us take the BSE

case in Canada as an example.

Mr. HAYES. Don’t get too involved. I have got about six more

questions. Can you come up with a list of things that we can do

working in conjunction with our international trading partners to

get an insurance policy against those markets closing if we do it

right?

Mr. COLLINS. Yes. And I mentioned that before but just to give

you an example Canada had a mandatory animal ID program and

yet the world shut down Canada’s beef exports when BSE was discovered there. So an animal ID program in and of itself is not going

to prevent the closure of markets, but it can shorten the duration

that the markets are closed. That is the important thing. What is

going to keep markets open is the overall set of programs that we

have in place that ensure the safety of our food.

Mr. HAYES. OK. And we have got to work with our foreign trading partners and others, not to good partners. Are you opposed to

any other entity besides the Federal Government keeping the data?

Mr. CHARBO. From the administration of the data we believe that

USDA needs to have management of the program. We don’t believe

that those systems need to necessarily be under a USDA roof. We

currently have lots of systems, probably most of the committees

you serve on, the agencies you work with have systems that are

contracted out or supported out by vendors or contractors to support that. I think that is an option that we have discussed. We

haven’t come to any closure, but from the administration or management of the program, including the data, we believe that USDA

should administer that information.

Mr. HAYES. So the answer to the question, are you opposed, is

yes.

22

Mr. BUTLER. Additionally, if I might add, Congressman, we also

know that we will need to work in coordination with our State animal health regulatory authorities.

Mr. HAYES. Now, a consortium of our different livestock associations with a database you couldn’t live with that? I am worried

about what Ms. Bryson said, they can’t ensure—the Freedom of Information Act can’t ensure that that wouldn’t be released to folks

that don’t need it, so I am just looking to you to come up with some

way that we can put that data outside the Government so it is used

for what it is intended and not for other questionable purposes.

And we will be having at your direction and the chairman’s wishes

additional livestock hearings to build on the input from the folks

that are here in the audience and their counterparts in other

States as well. So I am leading you down a path, can we do outside

of Government? All right?

We were talking earlier, I think we need to have one objective

and all kind of technologies to fulfill that objective so that competition in the marketplace can do its part to keep our producers competitive. That is all I have for now, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. It is now my pleasure to

recognize the gentleman from Nebraska, Congressman Tom

Osborne.

Mr. OSBORNE. Thank you, Mr. Chairman, and I would like to add

my thanks to the people here in Texas and thank you for coming

this morning. And I guess as I travel my district, which is like

many others here, a heavy livestock concentration, I hear really

two major concerns that keep surfacing. One is confidentiality of

information and, second, what is it going to cost, who is going to

pay for it. Those are basically the two things. I would like to offer

one observation and then I will ask a couple of questions.

First of all, I would agree, I think that Mr. Peterson mentioned

the fact that we probably need a date where mandatory ID is going

to have to happen, because if we just kind of leave it floating out

there, there will be a lot of people who procrastinate. And I certainly agree with the idea that we need a voluntary system for a

while here but unless we set a finish line, I think we may have

some problems.

The second thing that, again, I think has been talked about a lot

and it may be more of an observation than a question but that was

simply on the confidentiality issue. If you could help us as to

whether we really do need new legislation to ensure confidentiality

or if there are some ways that can be handled through guidelines,

that would really help this committee and those interested in the

problem. Because it is beginning to look like maybe we need legislation, but whatever guidance you can give us would be great.

Now I will ask a couple questions. First of all, I agree with your

idea that we should be accepting a wide variety of technologies. I

think competition is important. I don’t think we want to settle on

one real quick, but it just seems to me that there may be some

technologies that are not very reliable and I would wonder if you

don’t believe that at some point you may have to have some regulatory agency saying, ‘‘Well, we will accept this and this and this

and this, but we aren’t going to accept this and this and this.’’ And

I hear anybody addressing that issue. Do you feel at some point

23

you will need to make some judgments as to what you will accept

and what you won’t?

Mr. CHARBO. We believe that through the voluntary and through

the cooperative agreements that we are doing with the States, with

the animal health officials, with the industry that a lot of those

concerns will be addressed in those voluntary programs. We can

also address it in terms of which technologies are able to deliver

the data required, which is the program that we focused on from

USDA’s perspective on the repositories of the data. So that if a certain technology isn’t delivering the data effectively to those repositories, then we are able to act upon it and address some of the

questions that you have raised there. But we really believe that we

can work through those issues on a grassroots level with the industry and State health officials in doing that.

Mr. OSBORNE. I would certainly agree that is a place to start,

and I guess what you are saying is, OK, what we are going to do

is we are going to set up what is required, the information that we

need, and we are going to put in a database and if we are not getting it from a certain technology, then we may have to say, well,

we are not going to allow that. But it does seem like at some point

you are going to make a value judgment if something just isn’t producing results. Is that correct?

Mr. CHARBO. Correct.

Mr. OSBORNE. OK. Then I guess the last question that I would

like to ask has to do with the funding issue. I know we have $33

million allocated for 2005 and nothing for 2004 but it seems to me

that there is an awful lot of people going to be scrambling in 2004

to get something set up. So it may be that an awful lot of the cost

is going to be borne this year, and I noticed in your testimony

that—and I think I am quoting you correctly—it says you are considering alternative methods of funding. This is for Mr. Charbo.

Can you amplify that a little bit, because I am sure folks would

like to know what that is going to be.

Mr. BUTLER. We are reviewing our authority under the CCC

funds and are putting some proposals together, they are going

through the Department for 2004; yes, sir. And, again, that is related to testing the system, if you will. We are describing that in

these cooperative agreements that we keep referencing where different types of technologies could be utilized. We could learn lessons from what does work and what does not work, but, yes, sir,

we are putting together a CCC request for 2004 funds.

Mr. OSBORNE. OK. And you can’t be any more specific than that

at the present time as to amount or just a ballpark figure, what

you are looking for and what pot of money or—I know CCC is pretty broad, I think, so it is a matter of whose ox is going to get gored

in this process.

Mr. BUTLER. We are sensitive to those requests because we know

we are also making a request for our surveillance plan associated

with the recent case of BSE. We know we need to increase our efforts in that regard. We have looked at the existing cooperative

agreements that have been utilized over the past several years, the

amount of dollars associated with them, what we have learned and

tried to amplify those to projected needs for the future. We are also

aware of our request in 2005.

24

Mr. OSBORNE. You would have made a good football coach because you know how to dance, don’t you? [Laughter.]

Mr. Collins?

Mr. COLLINS. I would just add to what Mr. Butler says that this

is more complicated than it appears. We can go to CCC, as Mr.

Butler said, under emergency authority, but that is really a onetime request from CCC. After that it would have to be appropriated

discretionary funds, and so when we use CCC like that the Appropriations Committees look at us very carefully, because if we are

setting something in motion using mandatory funds, then that puts

them on the hook for discretionary appropriations in future years.

And so we just have to balance these things. We have to have adequate documentation for OMB, and we have to make sure that

what we are doing has adequate buy-in. And so it is not something

that we just do overnight, and so I know people have been frustrated that we haven’t come forward with a number and all of that

yet, but we are getting there. We are doing our documentation now

and we hope to be able to say something in the near future.

Mr. OSBORNE. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. I would now like to recognize the gentleman from Georgia, Congressman Max Burns.

Mr. BURNS. Thank you, Mr. Chairman. Thank you for holding

the hearing here in Houston; we appreciate the hospitality. I have

a fairly unique perspective on this problem because I spent 30

years in information systems and information technology and I

have had cattle all my life. And so when I started trying to understand the challenges that we face as we address this issue, I am

a little bit concerned that it is a major policy issue and we act perhaps more than we would like to. Let me go back to Mr. Stenholm’s

comments about voluntary mandatory. That is a very interesting

choice of terms. I am not seeing many Federal voluntary programs

be successful, and I am not enamored with the prospect of mandating anything. So I would like for you to kind of help me understand

how do we get from where we are, what are the incentives for us

to move through this process in a more voluntary basis?

Mr. CHARBO. We have several requests right now from States,

from industry wanting to move forward with identification programs. We think that is a real good indication of this initial voluntary program of moving toward some success currently. What

they are looking for is some guidance, some standards of how to

move forward with that implementation, and that is what we are

working on and what we are describing here in our statements,

both from where USDA would play in terms of setting data standards and these national repositories where data would move towards. That data is coming from these cooperative agreements with

the species, the States, et cetera.

Mr. BURNS. My concern is as we go from voluntary for a period

of time if we determine that indeed the voluntary system is inadequate, then we are faced with a tougher decision to begin to make

some expectations and some requirements. In Georgia, we mostly

do cow-calf, we are cow-calf producers. There are very few feed lots,

almost no feed lots, no major packers. Let us talk about the small

cow-calf producer and how this system would impact that segment

of our industry. Dr. Butler?

25

Mr. BUTLER. Having had experience like yourself being one of

those small producers, one, we know we will need education. In our

2005 request and in our 2004 emergency request there are dollars

associated for education. I sense there is a will in the industry to

assist and to come forward because I think this is—the season has

come for this, and I would suspect the next panel will be more specific the industry’s willingness to come forward.

As we implement this and phase it in over time, I agree, Congressman, that there will be those who won’t come forth voluntary.

So that small cow-calf producer may have to look to their, quote,

‘‘service provider,’’ and that service provider might be the local auction market, and that local auction market may have to assist

them in some way, accepting a type of technology, complying with

whatever possible regulations might come forward in the future to

allow that calf to move from the ownership on the farm to the next

segment of the market and to pass through that market to the next

owner. So education will be a key part of this, and those that are

involved in every segment of the market chain from a cow-calf producer standpoint need to be involved, participate and provide some

information and incentive. And I think the market itself will drive

that incentive ultimately for the small cow-calf producer to——

Mr. BURNS. When we were, and we still are, dealing with the

issue of country-of-origin labeling the potential impact of COOL on

a small cow-calf producer might force some of them to reconsider

being a part of that marketplace and pushing them out of that

business. And, again, part of the concern that I have is where in

the chain do we first begin to identify and track this animal’s

movement? And as you suggest, it may be at that first point of

entry into the marketplace. Is that a fair statement?

Mr. BUTLER. That is correct.

Mr. BURNS. As opposed to—and I had the same issue with the

COOL. I heard Dr. Collins’ comments about certainly the potential

economic impact of foot-and-mouth or other major challenges that

we have in our food chain. Have we done a good job of lessons

learned yet on the BSE outbreak? Again, I want to commend

USDA for the way they handled that. I thought it was an excellent

response. Secretary Veneman came and we discussed that. What

more should we have been able to do in the most recent example

of the challenge that we have faced on a national level, and does

animal identification address those issues?

Mr. COLLINS. If I could respond to that. I think to answer that

question of what more we could do you could turn to the international review team’s report. The Secretary created an international review team to look at what we had done and what we

need to do, and, generally, that report was pretty favorable towards

the Department of Agriculture on what we had done. That report

did, however, commend us for wanting to move forward with a national animal identification program.

Mr. BURNS. But you point out that Canada had an animal identification program at a national level and they were not immune to

the kinds of consequences. Is that true?

Mr. COLLINS. Correct. It is part of the plan. It is part of the overall strategy of measures that can be taken to protect consumers

26

and producers and to ensure that there is confidence in our food

supply. So it is part of that.

Mr. BURNS. I thank the committee. Final comment, I support a

voluntary program, and I support a standards-based approach as

opposed to a mandated technology. I think, again, the marketplace

is more than willing and able and capable of meeting the needs.

Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman, and it is now my pleasure to recognize the gentleman from Iowa, Congressman Steve

King.

Mr. KING. Thank you, Mr. Chairman. As I sit here and listen to

this, I look back at last May and I will say that my analysis of the

statistical analysis of the probability of BSE showing up in the

United States as far back as last May was that it was probable

that it would happen here. And I regret that it did, and every day

that goes by that we don’t find a second case takes me closer to

hopefully a conclusion that this is at this point still an unexplained

anomaly, and the best thing I hope for is that it becomes an explained anomaly.

A couple of points I would make is I listened to Mr. Stenholm’s

explanation about the different types of identification systems we

might have. That is an interesting analogy and it is one we do have

to evaluate in the implementation of this. I would throw out another one that might be closer to the ultimate identification system,

and that would be if we had a chief DNA identification system,

something that you might take a punch out of an ear and put that

in a ziplock bag and run that DNA test through there and put an

animal identifier on. And the other part of this equation that we

haven’t talked about is the food chain, and it is important for us

to trace back through herds but it is also important to immediately

be able to trace the food chain and shut that down as quickly as

we possibly can. And I am interested in that aspect of it as well

as that the packers are going to have to deal with any identification system that we might put together, and we aren’t hearing

from them today, and hopefully we will hear from them in the future, but there are only a few of those that will be efficient enough

that you can run cattle through the shoot at the plant in an efficient fashion and be able to identify those animals that way.

So I will say that—and another point I would make is that the

carcass identification or the carcass information that we will get

from that I want to know from the panel your perspective on how

valuable that information will be to producers. I do support statutory language protecting that information from Freedom of Information Act. I think it should be proprietary to the producers, but

your opinion on the value of that information to producers as to

whether that in itself will offset the cost of our identification system. Whoever would like to address any of that rambling series of

questions and comments I would like to hear from you.

Mr. CHARBO. Let me just start with what type of data is being

collected here. Carcass data is not part of this product. There is

really two data products that are here, and one of those is a premises. Where are these animals and what part of the country are

they located, who is the operator on that? The other part of that

27

is strictly an animal identification number and a date and time

stamp at a location really.

Mr. KING. But, Mr. Charbo, is there anybody in the beef industry

that thinks we should not be collecting carcass information while

we are putting this system together, that we have the capability for

producers to collect their carcass data?

Mr. CHARBO. The capabilities would be there if that producer believes that there is some value in that and those incentives, but in

terms of this system for the repositories, that data isn’t a requirement of being uploaded.

Mr. KING. And isn’t there a significant downside if we devise and

agree on and approve of a system of animal traceback that does not

leave into the account for carcass information? Aren’t we selling

ourselves short if we don’t talk about the added value of carcass

information that can come along with at really no extra cost this

animal ID system?

Mr. COLLINS. This is a difficult issue. I think there is no question

about the value of carcass information. It is tremendous throughout

the supply chain. It adds value to producers, it is what more and

more retailers want. The question is what do we need in a national

repository to protect animal health, and we are trying to make that

as minimum an amount of data as required to satisfy veterinarians

so they can undertake their epidemiological studies. It doesn’t

mean that that information won’t be collected and shouldn’t be collected and isn’t of value; it is. What we would envision is we have

a premise number, we have an animal number. What we want to

know is about the movement of that animal, so we want dates. But

think of that information as a computer record with a whole bunch

of other fields, and in those other fields could go breed, could go

yield, could go all kinds of other information. And all that could go

into the database that the producer is reporting to, that the producer gets the premise number from, that the producer gets the

animal number from. And then that database peels off the fields

of interest to us which go into the national repository.

So that data is out there, and that data can be used, and we

want a system in the national repository that is consistent with

being able to collect that kind of data, add it as additional fields

and do it efficiently so the producers, packers, retailers can use

that information. But we don’t think it is necessary for animal

health purposes to be in the national repository, and it does help

us deal with this confidentiality issue as well, because the more of

that value data we get, the more private, commercial, business information that we get, the more producers get concerned about who

has access to that data. So getting a good response from producers,

and confidentiality in our animal health data are partly dictating

I think what we want in the national repository.

Now we have met with retailers, we have met with the Food

Marketing Institute, we have met with individual branded retailers. They want that information, and they are going to pay for it,

and they are going to get it, and it is going to be in their systems

working all the way back to producers, but it is another question

of whether it should be in a national repository for animal health

purposes.

28

Mr. KING. Thank you, Dr. Collins. I really appreciate that that

is in the record. You have given a very definitive response on that

question. And it is a response also to it if Mr. Ross’ proposal of a

standard technology is approved, that standard technology has to

allow for those additional fields which are proprietary to producers.

Mr. COLLINS. Yes. I agree.

Mr. KING. Thank you very much. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. I understand that the

gentleman from California, Congressman Devine Nunes, doesn’t

have any questions, but I did want to acknowledge his presence

here because it shows the great length and breadth of the country.

We have representatives here from coast to coast and from our

northern border to our southern border.

And now I will recognize another distinguished Texan, Congressman Randy Neugebauer from Lubbock.

Mr. NEUGEBAUER. Thank you, Mr. Chairman. It is good to be in

Texas. I wanted to start off with Dr. Collins, and there is a lot of

discussion out there about what a national ID program can and

cannot do for the industry, and I think is it important to kind of

answer that question before you even get into an analysis of the

cost versus the reward of a program like that. Can you just briefly

touch on that, Dr. Collins?

Mr. COLLINS. I think in a nutshell a national animal identification program would aid in surveillance of animal diseases, it would

aid in identifying where an outbreak occurs, but most importantly

in traceback to all of the animals that have been potentially exposed to that disease, and it would accelerate the traceback. That

is the important thing, it accelerates traceback so that you can contain an animal disease outbreak. The more infectious the animal

disease outbreak, the faster it transmits, the more value a national

animal ID program has, I believe.

Mr. NEUGEBAUER. And I think the second question I have as I

have listened to the testimony this morning, and I will let others

address this, if we had had a national ID program in place in December, would the outcome have been much different of where we

are with some of our trading partners?

Mr. COLLINS. In my view, probably not, no, because the world

has not been ready to keep their markets open for a finding of

BSE. I mean just look at the history of this. No country in the

world is taking meat from a country that had BSE with the exception of those countries trading with one another in Europe and

what we did in taking beef from Canada and now Mexico from us.

So we have been setting precedent here in 2003 and 2004 on the

trade rules with respect to BSE. So I think maybe several years

from now the answer to that might be, yes, it would be different,

but in 2003, no, I don’t think we were quite ready for that because

of the world trading regime with respect to BSE.

Mr. NEUGEBAUER. And certainly as a new Member of Congress

that has recently came from the private sector, I am a firm believer

in letting markets put their own internal checks and controls into

a system, and you being an economist I would hope that you have

some agreement with that. I think the thing that I think about between a voluntary and a mandatory program is that with the

heightened awareness of some of the ramifications of a discovery

29

of a disease that the marketplace is going to be very sensitive

about keeping records and when they buy an animal along the

chain, whether they are buying it from a cow-calf operation and

putting it into a feed lot or from a feed lot to a packer and all

along, I would think that there is going to be a certain amount of

additional requirement in the marketplace for that information to

be furnished and that the Government is not going to have to have

a lot of mandatory incentive for the marketplace to require that.

Mr. COLLINS. Well, we hope so. I mean that is what we are trying to achieve during the initial stages of constructing a national

animal ID program. Movement is incredibly important data. When

people have tried to look at the value of a national animal identification program what they have found is the more diverse the production sector, the more animals move from premise to premise,

the more complicated the marketing system, the more valuable is

a national animal ID system, because those complicated production

and marketing channels mean longer traceback times. When you

have a vertically integrated industry, like hogs or poultry, then

there are more questions about the value, and that is why the hog

industry has been very interested in having not individual animal

ID but lots or group ID which will reduce the costs of that. Because

you can do traceback faster in a vertically integrated system, but

when it is more complicated like the cattle industry then the benefits of an individual animal ID system go up.

Mr. NEUGEBAUER. And the lot concept was something that I had

thought about. In today’s cattle market, would you say—how many

cattle are we talking about that changed locations on a—more than

three times or more than four times?

Mr. COLLINS. Yes. I don’t have a real good estimate of that, but,

certainly, there are a lot of cow-calf operators that will sell to a

backgrounder, and a backgrounder will go to a feed lot and then

a feed lot to a packing plant. There might be an auction barn in

the middle of that somewhere. So you could have a lot of premises

in cattle. In hogs, increasingly, of course, that market has been

evolving with specialization. It used to be all farrow to finish and

now it is pig farms, and pig lots are moving to finish farms. So you

are getting some movement in hogs but not to the extent that you

have it in cattle, I believe. So you do have a lot of movements and

it is important to be able to track those movements. And if you look

at the ID systems around the world, I think even the countries who

have been ahead of us in developing their ID systems are realizing

that. The Canadian ID system, for example, does not track movements. It records origin and it records termination, but they are

moving toward tracking movements as well.

Mr. NEUGEBAUER. Thank you. My time has expired, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. Rather than do a second

round of questions, I think I will simply ask the committee members if they have any additional questions.

I do have one for either Dr. Butler or Dr. Collins, and that is

very pertinent to Texas. We import a million cattle from Mexico

each year. Few argue the fact that we now have a North American

livestock production system. What steps are being taken to coordinate with our neighbors to the north and south? Dr. Butler?

30

Mr. BUTLER. We have had systems to track the movement of animals from both of those countries. In particular, I am more familiar

with the one from Mexico for a number of years because they have

had some endemic health problems that we have been concerned

about. Tuberculosis, for instance, comes to mind. Only certain

states in Mexico are able to send those animals here, and only certain sexes of animals are allowed to come into the United States.

Are we 100 percent harmonized at this point in time? The answer

to that is no. Can we work with them in the upcoming months and

the upcoming years to get a system where we are as compatible as

possible? The answer to that is, yes, Mr. Chairman.

The CHAIRMAN. Thank you. Dr. Collins, do you have anything to

add to that?

Mr. COLLINS. I would just say that we have funded, I believe,

and that is what I was just checking with Mr. Charbo, I believe we

have funded two projects in New Mexico and I think Texas, one in

Texas and one in New Mexico, to look at this very question of animal identification as animals move across the border.

Second, I would say that if countries have a system like Canada

where they have animal numbers, we want our system to be compatible with that. I mean one could envision this record I talked

about where we have a premise number in one field, an animal

number in another field, and if it is an imported animal, it could

be the Canadian animal number is put into that record. So if we

track that animal through our system, we could then track it back

through the Canadian system using the Canadian infrastructure.

So we would want our system to be compatible with theirs as well

and any other country that has an identification system.

The CHAIRMAN. Very good. Thank you. The gentleman from

Texas, Mr. Stenholm.

Mr. STENHOLM. Mr. Chairman, thank you. One question, one observation, though, first is I think we tend to overwork this term,

‘‘voluntary,’’ from a philosophical standpoint. To me voluntary

means getting the various industries—the cattle industry, for example, is different from the sheep industry, is different from the

hog, and therefore you can’t design one system that fits each of the

species. And also it is critical that the industry itself decide whether this is something that is good or bad. Once you make that decision if it is an overwhelming majority, you have gone through that

voluntarily, then it must become mandatory or it will not work.

Give, for example, the boll weevil control program. Once you allow

any farmer or any group of farmers to opt out, you destroy the

whole program. And in this case if—we either decide this is something good for the industry and we do it as you have just described

in making it compatible particularly with Canada and Mexico or let

us forget it. I mean all of these arguments we hear from individuals that say this is not necessary, et cetera. Either it is or it isn’t.

Let us get more personal, let us look at homeland security, let us

look at the fact that we have a voluntary system of allowing people

to come into the United States—people. We have from 10 to 14 million illegals in this country and we don’t seem to care. Oh, you hear

folks espousing and going about the problem, et cetera, but we are

not willing to make those steps necessary, ie. an identification system that will prove who is legal and who is not. We are not willing

31

to do that voluntarily. Fine. That is a decision that our country

makes.

So as we talk about this, that is one of the value of hearings like

this in which those of us who are represented to elect the people,

as I have heard my colleagues, and I share that when we talk

when we hear from our constituents. That is what we represent,

but it is also important for us to think it through from a standpoint. And as I said in my opening statement, an identification system is absolutely critical to the future of the livestock industry for

health reasons, and we do this regularly already. We just need to

improve on it and do it feasible, financially what is affordable, and

this can be done, I believe.

My question of you is why haven’t you talked to NIST? As you

are developing, we have one agency of Government in which spend

their time assessing science and technology, and yet your answer

to Mr. Gutknecht’s question is you have not talked to them?

Mr. COLLINS. Our answer to Mr. Gutknecht’s question was that

we have not talked to them. Mr. Charbo said it is possible that

USAIP has. We have adopted the data standards of USAIP. A tremendous amount of work, years of work have gone into that. Perhaps NIST could add more to that, and Secretary Veneman, I believe, in response to Mr. Gutknecht before a House hearing, said

she thought that was a good idea, that we ought to talk to NIST.

We just haven’t done it yet.

Mr. STENHOLM. Well, this is one of the longstanding frustrations

that I have had with previous administrations, the unwillingness

or the inability to talk to each other within government. It is a

longstanding frustration that I have, and it is just amazing that we

continue to—and maybe we don’t. I am going to accept your answer

that——

Mr. COLLINS. It is not an inability nor an unwillingness. It is

simply you work so many hours a day, you get to it when you can

get to it. Right now this is a USDA responsibility. We have talked

with other agencies. We talked with Food and Drug Administration, for example. They have done work on national animal ID systems. We talked with Centers for Disease Control. We do talk with

other Federal agencies, we do talk with the Office of Homeland Security. Our liaison at the Office of Homeland Security was the

State vet in Indiana. There is a lot of interaction going on between

USDA and other Federal agencies. Perhaps we were remiss in not

dealing with NIST. I think Mr. Charbo will try and remedy that.

Mr. STENHOLM. Thank you.

The CHAIRMAN. Are there other members of the committee who

would like to ask additional questions? The gentleman from North

Carolina.

Mr. HAYES. Mr. Chairman, thank you, and I apologize, I have to

leave here very shortly along with Mr. Peterson, but we assure you

the Livestock Subcommittee chairman at the chairman’s direction

of course, we will have additional hearings to build on the input

that has been gathered here today. And let me ask the Department

to look into the issue of pilot programs. Our people in North Carolina like a pilot program that is going on in Kentucky and I am

sure there are others that can add to that. Let us look at those sucVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
32

cessful operations and look forward to seeing you back in Texas.

When does deer season open next year? [Laughter.]

The CHAIRMAN. I thank the gentleman. The gentleman from Arkansas, Mr. Ross.

Mr. ROSS. Thank you, Mr. Chairman. If I could go back to Dr.

Collins for a minute and follow up on something that our ranking

member Mr. Stenholm said on this whole voluntary business. I am

trying to follow you all’s logic. How do we do a voluntary system

that is going to allow us to be able to identify 100 percent of the

cows that have come in contact with an infected cow in America if

it is done on a voluntary basis?

Mr. COLLINS. I don’t think we can do that.

Mr. ROSS. So when you say you want to do a voluntary program

is that just a way of killing this whole idea and continuing to keep

export markets shut down?

Mr. COLLINS. No. Secretary Veneman was very clearly asked in

a hearing whether she thought this ought to be a voluntary or a

mandatory program, and her response was that, ‘‘I think producers

may have to be required to participate.’’ So I think she had in mind

that this may have to be a requirement at some point in time. So

I don’t think we are starting out saying that this will never be a

requirement. I think what we are saying is that we feel reluctant

to say at this point that this is a required program, a mandatory

program before we have tried to overcome all of the consensusbuilding issues that Mr. Stenholm talked about. We want this to

be something that works for State governments, for animal health

officials, for producers, for auction markets, for processors, and so

there has to be a period of time in which they can work together.

A lot of work has been done in some States. We know Michigan,

we know Wisconsin, we know the FAIR Program. Mr. Hayes just

mentioned the Kentucky Beef Network, the Southeastern Beef Network. There is a tremendous amount of activity going on right now,

but there are a lot of problems that have to be resolved in all those

things, and so we just want to give them some breathing room, we

want to see how fast we can work those problems out, and we want

to put Federal resources into it to work those problems out. So we

are not prepared yet to say that we are going to make this mandatory next month, next year, but we are saying that we think that

we want full participation in this country, in this program. The

Secretary has said that.

Mr. ROSS. How many people at USDA are working on this issue?

Mr. COLLINS. Who knows.

Mr. BUTLER. Dr. Collins is saying, ‘‘Who knows,’’ over here privately.

Mr. COLLINS. Privately. Mr. Butler knows.

Mr. BUTLER. We know that the four of us have been tasked, I

have recently joined the group, but our Chief Information Officer,

our General Counsel and Dr. Collins have been tasked by the Secretary to help move this plan forward. Prior to that we had numerous employees from the Department that worked with USAIP in

developing the plan. We extend that from our immediate family to

those State health regulatory authorities, our States veterinarians

across the United States so they will provide an excellent input

33

through their national association, the U.S. Animal Health Association, et cetera.

Mr. ROSS. So your response is you don’t know how many people

at USDA are working on this.

Mr. BUTLER. Precisely, I do not.

Mr. ROSS. OK. And how long have this unnumbered number of

people at USDA been working on this?

Mr. BUTLER. The USAIP Program has been under development

for approximately 2 years if I am not mistaken.

Mr. ROSS. So at USDA we don’t know how many people have

been working on this but we know they have been working on it

for a couple of years. And here we are having another hearing

today and meanwhile we have got 50 countries that refuse today

to accept U.S. beef. My point, gentlemen and lady, is that, and I

hate to keep going back to Wal-Mart as an example, but I mean

they have got the radio frequency technology, they are requiring it

now in every case and when it is put on a barge they can track

it from the time it leaves the factory in whatever country until it

enters the ship at your local store. And I mean if technology is so

inexpensive that then that radio frequency chip is thrown away

with the box. I mean I don’t think they have spent 2 years and had

an unnumbered number of people at some Federal agency and had

hearing after hearing after hearing to figure this thing out. And in

your own testimony, page 6, you talk about EU and UK and how

they looked at it one way, they are now changing it. Canada, they

had 29 programs. Now they are going to go to one. Australia, they

are changing how they do theirs effective July 1. I mean this is

from your own testimony.

My deal is, and to quote Dr. Collins, ‘‘try it out,’’ I mean the

longer we try it out the longer the producers continue to have cattle that they cannot export to other countries, and they will continue to lose 10 percent of their market. I mean can’t we learn from

Wal-Mart and UK and EU and Australia and Canada? I mean why

do we need to try it out again?

And then, finally, this business of having—there are 95 million

cows out there, OK, 95 million cows, and for the life of me I am

trying to figure out how 10 different companies can provide that

technology, divide up the 95 million cows and provide that technology for a lesser cost than one entity can provide it and that entity being a non-profit entity, that being USDA. I am having trouble understanding how USDA can’t implement this, so 95 million

cows for less money than for-profits would do when you have got

10 different competing interests out there trying to share 95 million cattle, and I guess that is just a—maybe you went to a different math school than I did but the bottom line is the technology

and let me just reemphasize that we have got to have technology

that works. Homeland Security has been around now since late

2001, early 2002. The FBI and the CIA are still trying to figure out

how to talk to each other, and so we have go to have a way to

where no matter where that cows ends up we are able to read it

and it is able to make sense. Otherwise we are spinning our

wheels.

And, finally, Dr. Collins, you had mentioned you didn’t want

Uncle Sam to tell people what to do. Well, that is exactly what

34

USDA did when they ordered a herd of about 400 cows killed. I

have just got to think there is a better way to do this to protect

your producers as well as the safety to the consumers that are out

there.

Mr. COLLINS. Mr. Ross, you are expressing a sense of urgency

which I can appreciate. If I could comment on a couple of your

points regarding having USDA do it cheaper than the private sector and what math school I went to. I would say that my career

experience has been when you say let the Government do it, it

often costs a lot more than letting the private sector do it, just the

reverse of your conclusion on that issue.

I would say that there are a couple of things that are sobering.

You have cited the testimony about what is going on in foreign

countries, and it is true that these foreign countries are making

some decisions. They are not all the same decisions that you just

described. For example, the Australian program right now is a voluntary program. And look at the size of those animal industries in

those countries. The Canadian industry is 14 million head of cattle.

One of the things in our testimony along with the description of

what is going on in foreign countries is the description of the U.S.

animal industries, and I personally am very sobered by the fact

that we have over a million cattle operations in the United States.

In a steady state world, the technology that you are describing that

we should take off the shelf and mandate for USDA, RFID, $2.50

an ear tag, I don’t know, call it $2, whatever you want to call it.

Every year 37 million cattle are born in the United States. After

you have paid all the infrastructure costs, all the data development

costs, you have built all the databases, you have reformatted your

packing plants all over the country and you have put in the stations and you have put in the readers and you have sunk all of

those costs, then in a steady state world you have got 37 million

animals every year that have to have an RFID tag put in their ear.

At $2.50 a head, that is $100 million a year. That doesn’t count

labor costs, that doesn’t count all those other sunk costs. This is

a big deal, and I just don’t feel comfortable and I think we don’t

feel comfortable saying, by God, we are going to mandate it and

you are going to do it in 90 days and it is going to be RFID technology. That is where we are coming from. Do we feel the same

sense of urgency as you? Absolutely, we feel that same sense of urgency, but we also think we need to do it in a deliberate, reasoned

way, and so that is what we are trying to do.

Mr. ROSS. A single cow, a single cow and our prices have dropped

20 percent. All I can tell you gentlemen and lady is you better just

pray that we don’t see foot-and-mouth or hoof-and-mouth or whatever you want to call it in America before we get our act together

on this issue, because if you think a 20 percent drop was bad, it

will totally devastate——

Mr. COLLINS. I agree.

Mr. ROSS [continuing]. Bankrupt the cattle industry in America

if foot-and-mouth gets here before we get through studying all of

this and figuring out a way to do it.

Mr. COLLINS. Well, we are not studying.

Mr. ROSS. We are the leader of the free world and all these other

countries have already figured it out and here we are still debating

35

on how to do it, and the only people hurting are our cattle producers.

Mr. COLLINS. I don’t think they have all figured it out. Canada

is using barcoded ear tags for which they have a huge problem of

lost ear tags, they are not tracking movements, Australia has got

a voluntary system, Europe has got a system. If you are in the UK

and you want to sell cattle, you are cow-calf operator, you get

issued a book. It is about 5 inches by 7 inches by 3-quarters inch

thick. It is a passport, it has got tear-out pages in it, and everywhere that animal goes you tear out two pages, you fill it out, you

turn those pieces of paper in, you put the data into an electronic

database, you keep records on your own farm. It is an incredibly

costly exercise. I don’t think they have got it all figured out. I have

talked to producers in the UK and they have said to us, ‘‘Please,

come up with a better system than we have.’’ So we are not testing,

we are going forward in 2004, we are beginning to implement a national system. It is not a question of testing. We are going to ramp

this thing up beginning in 2004, we are not waiting any longer.

Mr. ROSS. Let me just close by saying that I spent some time last

night with a small cow-calf producer in Canada, I think he runs

about a quarter million cows, and he thinks their system works

pretty well and reminded me that it was their system that allowed

us to do what little bit of tracing we were able to do with the cow

was diagnosed in Washington State.

The CHAIRMAN. I thank the gentleman. Let me just point out to

the gentleman that the 50 countries that ban our cattle from going

in their country now not one, not one of the 50 have made this a

condition for reopening their borders for admitting the cattle. We

need to proceed expeditiously. I certainly agree with the gentleman’s objectives. We also need to proceed expeditiously to get these

borders reopened and our cattle exports there as quickly as possible, and one should not confuse one of those two urgent needs

with the other urgent need, and I fully agree with Dr. Collins that

we had better get this right, and I also agree with him that when

you tell people that the Government is going to take care of it for

you, watch it.

The gentleman from Iowa I believe has a question.

Mr. KING. Thank you, Mr. Chairman. First, I would like to open

with a response to Mr. Stenholm’s national security remark and

that would be it may be true that America is not ready, but I

would be happy to ear tag all 12 million, Charlie, and in fact I

would skin the coyotes while I am at it. But the question I want

to address to the panel is we have not brought up the subject matter here and I know it is something that I know won’t make the

producers happy that we are talking about it but it is one I think

we need to air before the panel, and that is that I raise the issue

about tracing it once it gets into the food chain, and we can go back

to that, but there is also some merit, I believe, into having a way

to identify contaminated feed, and in the case of the two BSE cows,

one north of the border and one south of the border, and I realize

that they were both born before we had the limitations on feed, the

restrictions on feed, but say for example we had a rogue renderer

and we had identified another case of BSE and that food supply

might have—feed supply might have been from a rogue rendering

36

company. Now, wouldn’t we want to also know where that feed

supplement might have gone? And I would just like to hear you

discuss the merits of, and I certainly don’t want to start any KGB

feed records police here but I do want to know the USDA’s opinion

on the value of feed records or the value of being able to trace that

feed to different herds in the case that that might be the contaminant.

Mr. COLLINS. I guess I would say something and let Mr. Butler

continue. I don’t know enough about what FDA requires now to

really be able to answer that. FDA has had regulatory authority

over feed and so I really can’t answer that. Maybe Mr. Butler can.

Mr. BUTLER. Only to add that since December 23 I believe they

are reevaluating their current regulations, taking under consideration the international review team report that has been referenced

this morning in the hearing, and I don’t believe they have made

final decisions about modifications in their regulations, but it is a

very important issue, tracking and working, as we begin implementing our surveillance plan, our aggressive surveillance plan

that again was referenced in the international review team report.

We will be cooperating with the renderers you referenced. Those

renderers obviously will be cooperating with FDA. They have stated that they will increase their inspections, work with their State

counterparts to increase inspections of feed manufacturing facilities. So the jurisdiction of feed does lie within Food and Drug Administration.

Mr. KING. And, again, my recommendation would be to give significant emphasis to that so that it is part of our discussion as this

moves forward and we don’t look back on it and say, ‘‘Gee, we left

that one out,’’ and there could be a significant component there,

and I don’t allege that there is, I just caution that we should take

a good look at it.

And then I would ask also the panel to discuss to some degree

how we might trace then the, I will say, beef through the food

chain once there would be—if there is a future outbreak of BSE,

for example, and that had been introduced into the food chain?

Under an animal ID system how does that work its way through

the integration of the retail market? How do we identify that within, say, within hamburger, for example, versus a more muscle tissue like steaks and what would be the merits of a DNA identification system that might be able to identify in a pound of hamburger

six different cattle?

Mr. COLLINS. Again, I will start this and other members of the

panel can jump in. I think with respect to trace forward we are not

proposing anything different than what is being done right now

with our proposal for a U.S. animal identification system. It essentially goes to termination of the animal and that termination is

death, it is slaughter or it is export. Beyond that the systems that

we have in place are the recordkeeping systems that are kept by

processors, by wholesalers and retailers and when we do trace forward now, such as the recall for the beef in the State of Washington, it is using that record base that we rely on. Now that record

base is getting better all the time because retailers want better

records. We met with one giant corporation that retails food directly to consumers through its fastfood chains and they told us

37

that they have an interest in and they are pursuing, 4-hour

traceback from a hamburger patty to the farm of origin. Four

hours, that is their goal. So there are people in the industry delivering food to consumers that want to accelerate that, and they are

demanding that in the systems that supply them in their food supply chain.

Mr. KING. And I would suggest that in an ideal world from the

producer approach we have got, say, the United States of America,

Western Hemisphere, for example, the broad side, the top side of

an hour glass, everything funnels in through the packer and comes

out the other side and gets spread out again the other way.

Mr. COLLINS. Right.

Mr. KING. And an ideal system would be one that would go then

from birth to plate. And I raise that issue of the DNA because I

think that is the ultimate and I hope we discuss it. That would

conclude my questions, except, Dr. Butler, you had a comment?

Mr. BUTLER. I think you raise a very valid question about DNA,

and if I am not mistaken we have some existing systems in the

United States that are utilizing that technology to identify superior

genetics, obviously to identify such traits as tenderness, so it would

be our goal as we move forward in these cooperative agreements

that if there are some existing systems using that technology as

well as other technologies that have been referenced, that we could

incorporate them, learn from that and see if that is valid for the

future.

Mr. KING. Thank you, Dr. Butler. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. I understand the gentleman from Texas, Mr. Neugebauer, has an additional question.

Mr. NEUGEBAUER. Thank you, Mr. Chairman, and first of all I

want to concur with something you said and that is sometimes we

need to be careful what we ask for. It seems the last 20 plus years

of my life in private business, small businessman from Lubbock,

TX I have seen the outcome of where Government reaches out to

help fix a solution only to cost those businesses hundreds of thousands of dollars with no real meaningful results for those good

ideas, and so I am reluctant to jump onto really good ideas from

the Government until we have run through a process where we are

visiting with the industry groups. And I know that there has been

some ongoing dialogue with the stakeholders in this issue. I would

like to hear from Mr. Charbo what kinds of dialogue are you having with the industry stakeholders and how you feel like that process is going.

Mr. CHARBO. Since the Secretary’s announcement, one of the

things that she encouraged us to do is go out and being to speak

with some of those industry groups, getting the perspectives from

the production side all the way out through, as the gentleman from

Iowa was discussing, through the food chain of understanding what

does traceability mean, what does animal identification mean, is

there any value in animal identification? That has been discussions

that we have had as a group to try to frame some of those issues,

and that has helped us put together the statement that we have

provided. That is where we have been as a panel here.

I think it is important to reference the USAIP which has been

out for 18 months, which has included a lot of grassroots, industry,

38

species groups working together to formulate what we believe is

very important, the data standards of how this information could

be collected and some strategies of implementation that were actually used and some of the implementation that we are suggesting

here. So there has been a lot of those discussions that is going on.

We hope through the cooperative agreements that we have referenced as well that more of that will happen, not just in a pilot

stage but in the actual implementation of moving forward with the

animal identification on a premises and an individual animal basis.

Mr. NEUGEBAUER. Is it your opinion that there is consensus in

the industry for an animal ID program?

Mr. CHARBO. I don’t know if I am in the position to answer that.

I believe that it is as good as it has been. I do have to say that

if you look at the USAIP plan and the comments that are there,

there is a lot of people with concerns about an animal identification

program. It is clear as you look at the equine area they have very

strong concerns about moving forward with an ear tag. That brings

a lot of chuckles but it is a fact. Those people have concerns about

if that is the plan and these hard standards that are put out there

and the Government moving forward with the plan, they have concerns. So I think from an industry basis it is as good as it has been.

Moving forward with the way we plan with a voluntary program

we will have some successes on the premises registration, we will

have successes from the animal identification, and we will be able

to build upon that on a permanent basis.

Mr. NEUGEBAUER. Do you feel like you have a clear model or

business plan of how you go and what the role of USDA is in implementing a voluntary program?

Mr. CHARBO. We believe it is in setting those data standards, of

saying this is the type of information required to respond to an animal health emergency. That is where our authority lies, as Ms.

Bryson has mentioned. It is under the Animal Health Protection

Act is where our authority to do this, and it is important to keep

that frame of reference as we move forward. The data we are asking for in these repositories, working with these cooperative agreements, species groups, State health officials and connecting to their

information and bringing it back to our repository is strictly directed at that animal health emergency.

Ms. BRYSON. I might add if I——

Mr. NEUGEBAUER. That really wasn’t my—really my question is

do you feel like you have a clear and does the industry understand

your plan of how——

Mr. CHARBO. Not yet. I mean—a part of our plan is a strong communication program. I think it is always underestimated in implementations, and we have tried to get ahead of that expectation, and

that communication is going to be major. Purchasing a system, as

people want to say there is a system that we go out and buy, is

not the cost. The cost is the impact down at the producer level and

the industry and what they have to do to change to accommodate

these new requirements. That is the major expense that isn’t recognized when we talk about buying something off the shelf and implementing it. The expensive part is in that implementation.

Mr. NEUGEBAUER. Ms. Bryson?

39

Ms. BRYSON. If I could just add to this answer. I doubt that people understand exactly what we are talking about. What we have

in our testimony that has been submitted today is an outline of as

far as we have been able to get in terms of our collegial thinking

based on discussions we have had with people to date. As with all

of the programs that USDA has issued for voluntary or mandatory

identification programs in the context of disease eradication or our

other authorities, there is going to be plenty of opportunity for public comment. There is going to be lots of outreach, and we are going

to continue to be listening to everybody because we really think

that a system that works is going to be based, as it should be in

a public process, on getting the input and developing a system that

accommodates everybody’s concerns and interests. So we are not

there yet, but we are working towards it.

Mr. NEUGEBAUER. And my final comment about going to one architecture and one system is that we have a system like that where

we just had one system, no competition. That is called Medicare.

And that didn’t work too good and hasn’t worked too good. But

what we did do with the cellular telephone service, for example, is

we allowed a lot of different architecture to happen out there, people figured out a way for that architecture to communicate together, and we have a lot of different companies providing those

services. And now today we have seen the cost of that service drop

dramatically because we let the technology and the competition in

the marketplace work itself out. So any plan to reduce the competition in the marketplace to make it less incentive for the producers

and the people to participate I think it does them a disservice.

What we need to do if in fact we put a system like this in place

if the producers, if the industry groups believe that this is something we need to do, we need to put in place something that is always encouraging the price and the cost of doing that service to go

down and not let the Federal Government regulate it in such a way

and choke it in such a way that it is not a competitive product.

Thank you, Mr. Chairman, for the time.

The CHAIRMAN. I thank the gentleman. Last call, anybody else

have a question for this panel? We need to move on to the next one.

Well, ladies and gentlemen, thank you very much. This has been

a very informative discussion. Let me say that I am in agreement

with your general approach. I want to join with those who have expressed some sense of urgency, we do need to get on to a definite

plan that we can carry out. And I want to also agree very much

with the gentleman from Texas, Mr. Stenholm, that the sooner you

reach out and talk to those other Government agencies like NIST

and other countries, particularly Canada and Mexico, to make sure

we are all on the same page together, the more smoothly is going

to go. We do need to get about it, and we do need to have everybody on board as we do. So I again want to thank this panel for

your very valuable contribution and we will now move on to the

next panel.

We will now invite our second panel to the table. This is Jan

Lyons, president of the National Cattlemen’s Beef Association of

Manhattan, KS; Ms. Joy Philippi, who is a pork producer from

Bruning, NE on behalf of the National Pork Producers Council; Mr.

A.H. ‘‘Chico’’ Denis, vice president of the Texas Sheep and Goat

40

Raisers Association of San Angelo, TX, on behalf of the American

Sheep Industry Association; Mr. Charles Beckendorf, chairman of

the National Milk Producers Federal of Tomball, TX, and Dr. Gary

Smith, vice president of the International Stockmen’s Education

Foundation of Houston, TX.

I will remind all of the members of this panel that their entire

statement will be made a part of the record, and in order to move

to the questions as quickly as possible we would ask that you limit

your testimony to 5 minutes. And we will start with Ms. Lyons.

Welcome.

STATEMENT OF JAN LYONS, PRESIDENT, NATIONAL

CATTLEMEN’S BEEF ASSOCIATION, MANHATTAN, KS

Ms. LYONS. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, I am Jan Lyons. I am president of the National Cattlemen’s Beef Association, and I am a producer. I am a

producer from the Flint Hills region of Kansas near Manhattan

where along with 3 generations of my family I manage our angus

seed stock business. I really appreciate the opportunity to testify

today on behalf of the members and the State affiliates of the National Cattlemen’s Beef Association. I appreciate being able to discuss animal identification which is an issue of great interest and

concern for cattle producers across this country. Obviously, the recent discovery of BSE in a Canadian cow in Washington has given

the discussion a tremendous sense of urgency.

Animal identification is a tool and it is a tool that can be used

on conjunction with our animal health infrastructure to identify

and isolate animals and premises that have been associated with

animal disease, but it is not a substitute for this infrastructure,

and NCBA will oppose any efforts to pay for an animal identification program or system by cutting existing animal health infrastructure. Animal identification is a confusing and complicated

topic which has endured several years of debate to come to a consensus but there is still much work to do.

In order to forge broad consensus, NCBA worked with more than

70 organizations and over 400 individuals to draft what is known

as the United States Animal Identification Plan, and as a matter

of NCBA policy, and let me be clear about this, we support the

USAIP as the foundation of the national identification system and

we support the ongoing work that has taken place here. The

USAIP focuses on establishing technology standards so that the

system is uniform, workable and consistent. USAIP establishes

radio frequency identification, or RFID, as the currently preferred

identification method. RFID has been readily adopted by livestock

producers and adoption of the RFID standard within USAIP acknowledges the existing use of this technology. Full and complete implementation of USAIP is estimated at $545

million over the next 6 years. The USAIP estimate includes the information system, the data collection, the infrastructure and identification devices. Clearly, this amount is a tremendous outlay of resources for any one party. A potential funding approach which we

would like to present could be that the Federal Government would

pay for the establishment and the approval of the standards, the

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lation and then the Federal and State governments cost sharing

with producers on the identification devices. Producers are clearly

concerned about the cost of the identification program and the need

clarification of what the Government is going to pay and when that

would be.

Any effective identification, animal identification program would

provide the traceability needed to contain, isolate and eradicate the

spread of an animal disease that has the ability to disrupt the livelihood of producers. The creation of a system for these purposes

should not result in the invasion of producers’ privacy. Therefore,

NCBA believes that any information provided by producers for the

animal identification system should be exempt from release under

FOIA. Additionally, the Privacy Act protects private and personal

data from release without the written consent of the party that

provided that information. Producers want assurances that their

information and their records will be kept confidential. There

should be no unintended use of producer communication.

Consideration also needs to be given to clarification regarding

producers’ duty of care. Producers need confidence that they will

not be held to standards beyond ordinary care so long as they perform their management practices within the law, such as complying with feed bans, product withdrawals and other laws.

The question of mandatory versus voluntary obviously was a big

issue here today, and it is one that we think should revolve around

how best to achieve the level of participation needed to make the

system effective and make it work. Privacy concerns, cost to producers and the appropriate implementation plan will have as much

bearing on the success of the program and producers’ willingness

to support that plan, and as well whether or not it is mandatory

or voluntary.

The USAIP calls for initially starting with a premise identification system, then moving forward with individual animal identification. It is critical that a premise allocation system be defined

soon that meets USAIP guidelines and recognizes that interstate

nature that takes place for livestock movement. It is also extremely

important that implementation of the program be in step with how

cattle are marketed and moved around this country. We must take

into consideration the constraints that exist at livestock markets,

processing facilities and feed yards. Additionally, many cattle are

already identified through existing marketing and management

programs. If the systems in which these cattle are already identified, are consistent with the standards set by USAIP, then these

systems should be available to provide data to USDA for the purposes of producer participation in this system.

It is critical that there be international harmonization in international identification standards and systems. Our Five Nations

Working Group, which includes Mexico, Canada, Australia, New

Zealand and ourselves, is in agreement that there should be harmonization in our animal identification systems. NCBA supports

the adoption of the RFID standard within USAIP. However, should

Congress act on an identification bill, no statutory provisions

should be included which establish RFID technology standard.

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ity of USDA maintains the flexibility that is needed to adopt new

technology as this develops.

USDA has the authority under the Animal Health Protection Act

passed in the 2002 farm bill to implement an identification system.

NCBA will monitor the implementation of that identification program by USDA and, as stated previously, NCBA is supportive of

an industry-implemented program that is accessed by USDA for

animal disease purposes only. We are confident the current path

we are on will result in the development of an effective animal

identification and traceability program for not only the cattle industry but for all of animal agriculture, and I thank you.

[The prepared statement of Ms. Lyons appears at the conclusion

of the hearing.]

The CHAIRMAN. Thank you, Ms. Lyons.

Ms. Philippi, we welcome you, and we welcome your testimony.

STATEMENT OF JOY PHILIPPI, PORK PRODUCER, BRUNING,

NE, ON BEHALF OF THE NATIONAL PORK PRODUCERS

COUNCIL

Ms. PHILIPPI. Good morning, Mr. Chairman and members of the

committee. My name is Joy Philippi. I am a pork producer from

Bruning, NE, and I am a member of the National Pork Producers

Council Board of Directors. I do have a hog operation in southeast

Nebraska that handles nursery pigs. I would like to thank the

chairman for holding this hearing today, and I ask that my complete statement is part of the record.

In recent months, it has become clear that the issue of national

animal identification system has become increasingly important to

our animal health officials, livestock producers and consumers. Developing and implementing a national animal ID system is far

more complicated than simply just identifying every animal at

birth. The pork industry considers a national animal ID system

part of protecting the Nation’s critical food and agriculture infrastructure in case of an animal disease outbreak or intentional or

unintentional introduction of a pathogen or toxin.

We believe that most Americans now better understand the importance of animal health in protecting food security and safety in

this country, and they are willing to support the development of an

affordable, accurate and sustainable mandatory national animal ID

system. I would like to focus my comments today in three areas.

First, the pork industry’s current mandatory swine identification;

second, ways to enhance the current system; and, finally, a comment on where the pork industry sees outstanding issues in further

developing the national animal ID system.

Today, we have five categories of mandatory ID for swine and

interstate commerce. One is the individual ID of all replacement

breeding swine; two is individual ID for all breeding swine at commingling and slaughter; three is the ID of feeder swine; four is the

marketed swine identified back to their owner at a Federal inspected plant, and five is feeder swine movements across State

lines within a production system based on the written health plan

and production records.

This current interstate swine system has been in place since

1988 and we recognize there are some changes that need to be

43

made. First, the backtag system currently being used to identify

cull breeding swine has a very low tag retention rate. It is only

about 15 to 20 percent. This retention rate is the result of the identification system that does not meet the species-specific needs in regard to handling the animals on the way to market. When a national premises ID system is implemented, we would be able to

apply just a premises ID tag to these animals. That would source

identify them back to their farm.

Second, the identification of market hogs back to the premises instead of just the owner’s mailbox will result in a more rapid and

accurate traceback to a suspect premise in case of an animal disease situation. We believe that improved accuracy in this area

could facilitate further traceback to origin of the premises. And,

generally, because our hogs move in lots and groups, we feel that

it would be much simpler in the recordkeeping area as well.

Today, our industry is holding our annual meeting in Atlanta,

and there will be a resolution presented this afternoon that they

support animal identification and that we support the USAIP plan.

We believe it will receive overwhelming support there in our group.

The USAIP process has been going on since April 2002. There are

109 stakeholders representing over 70 industry organizations and

we have been part of that, but we want to be very clear about what

USAIP is and what it isn’t. It simply defines the standards and

framework for implementing and maintaining a national animal ID

system for all of U.S. livestock. It includes standards for a national

premises numbering system, individual and group lot numbering

systems and performance standards for ID devices.

We also know there are some outstanding issues regarding the

USAIP that we would like to see addressed. Of those five issues,

one would be should the system be mandatory or voluntary; two,

how do we protect and maintain the confidentiality of the producer

data; three, we recognize the importance that there is species-specific information and differences that needs to be hammered out;

four is how do we maintain technology and, finally, funding, who

is going to pay for what? Some of these issues have been talked

about today. I am not going to get into a lot of detail on that. Our

organization is very much in belief that a mandatory system is necessary when it comes to disease management. We also believe that

the confidentiality and security issue has to be addressed. We have

to know that if USDA doesn’t have the authority to protect the producer information or doesn’t know how to do that, then we are

going to need Congress to move something forward to be able to address that.

The third issue that I did bring up was about the specific information and how those things work. We do realize cattle industry

has looked at the radio frequency identification tags as something

they can use. That makes a lot of sense in the sense of a cow that

has one calf a year. It is just going to cost you $2 a year to use

an RFID tag, put a new one in a new calf. In our business, we have

22 to 24 pigs a year from a sow, so we are talking a short $50 a

year for radio frequency tags. That is why we believe that the idea

of using the group and lots for our industry would be probably

more cost effective and acceptable to producers.

44

The fourth issue is related to the technology flexibility. We believe that that system has to be put together with things in mind

in regard to what information we want in that data information

and in then take it out to the industry. We do believe that if that

is done that way, it will drive down the cost to our producers if

done correctly.

And, of course, the last issue is on funding, who is going to pay

for what? We believe the premises identification system is the basis

for the animal ID system, and we believe it is a Federal responsibility that that is carried out. We also believe that USDA needs

to develop the information system to allow that animal movement

data to be captured, stored and accessed when needed.

In conclusion, Mr. Chairman and members of the committee, I

have outlined why the National Pork Producers Council supports

a mandatory animal identification system. I thank you again for

holding this hearing and for your time and attention to this matter,

and I will be pleased to answer your questions at the appropriate

time.

[The prepared statement of Ms. Philippi appears at the conclusion of this hearing.]

The CHAIRMAN. Thank you, Ms. Philippi. Mr. Denis, I am reliably informed by several people that I botched your name as well.

I apologize for my first try at that, and you are welcome and you

we are pleased to have your testimony.

STATEMENT OF A.H. ‘‘CHICO’’ DENIS, III, VICE PRESIDENT,

TEXAS SHEEP AND GOAT RAISERS ASSOCIATION, SAN ANGELO, TX, ON BEHALF OF THE AMERICAN SHEEP INDUSTRY

ASSOCIATION

Mr. DENIS. Thank you very much, Mr. Chairman, and also the

other members of the committee. On behalf of the Nation’s sheep

industry, I appreciate you holding this hearing and giving us the

opportunity to address you on this matter. I am a sheep producer,

I am also a feeder, I am also chairman of the board of a processing

plant there in San Angelo. So I mess with those little wooly bugars

from the time they are born till the time they die.

Today, I represent my State organization here as well as the

American Sheep Industry Association. I can personally attest that

the livestock identification was a hot topic at our national board of

director meeting late in January. ASI has been involved with

USAIP since it was started, and we should have and will have a

sheep-specific ID plan to USDA APHIS by this spring.

Our industry has had a national health identification program in

place that includes mandatory identification, namely the Scrapie

Eradication Program. We have over 50,000 sheep operations nationwide already enrolled with premise identification and millions

of identification tags distributed. This program implemented by

regulation in August 2001 provides the basis for our view that we

believe a model fitting the sheep industry and to a national ID system. We approve national policy at our board meeting, and I believe the points are important to this discussion. The cost of identification supplies and devices should be provided by the public sector. A national ID system for livestock should not duplicate our National Scrapie Eradication Program requirements. Transition into a

45

livestock system must be planned and announced well in advance

with supplies available through a well organized distribution channel.

We have a wide variance of production systems for sheep in the

United States, and an ID program must accommodate all, including

group movement of animals through feeder and slaughter channels.

I get a lot of—into my feed lot I get a lot of producers that bring

their animals, they have never been anywhere else. They go in the

feed lot and they stay all together and then they go to the slaughter plant all together. They need to be identified just simply as a

group. A national ID system should also contribute to the management and marketing and business needs of the U.S. sheep industry, as has been discussed here today. The producer needs some

way to access his information that is collected.

A national ID system for sheep should be thoroughly field tested

before implementation to demonstrate the technology is compatible

with the normal operations of the industry. It must be electronic

and automatic in some form. There is no way that we have the

labor necessary to grab each sheep and read an ear tag and write

that number down.

The system must be thoroughly reviewed and field tested prior

to implementation. This includes a database function which needs

to be provided and maintained by the Federal Government. It must

not be subject to any public records request, as has been discussed

here today. We must recognize the needs of the entire industry involved from auction markets to processors as well as ranchers such

as myself. We also need to remember the cost on a per unit basis

is very different. As the pork people mentioned, costs of an ID on

$125 lamb could be much larger than on a market steer that is

worth four or five times that much.

The additional item that weighs heavily on our sheep discussions

is the need to identify sheep and lambs by lot, as I mentioned, not

by individuals, as long as those lots stay together and are not commingled. Such a system makes more sense when hundreds of lambs

per truckload are moving together through the feed lot and through

the packing plant.

Key issues that I also believe must be addressed by the sheep ID

group include procedures for lost tags. Typically, the tags we have

today we lose about 10 percent per year. All the ID tags and associated equipment we believe on a national basis must be compatible.

The price of the data that is collected by national identification

must be guaranteed.

The second thing that I will ask is that the Government, USDA

and this committee continue to draw on the experience of all the

various livestock organizations in bringing this program online so

that it will work for us as well as for the program. With that, I

thank you very much, and I would be glad to answer any questions.

[The prepared statement of Mr. Denis appears at the conclusion

of the hearing.]

The CHAIRMAN. Thank you. Mr. Beckendorf, we will be pleased

to have your testimony.

46

STATEMENT OF CHARLES BECKENDORF, CHAIRMAN,

NATIONAL MILK PRODUCERS FEDERATION, TOMBALL, TX

Mr. BECKENDORF. Thank you, Mr. Chairman. My name is

Charles Beckendorf, I am a fourth generation dairy farmer from

here in Harris County, about 45 miles from where we are. Those

of you that flew from out of State probably got here quicker than

I did today. It took about 2 hours this morning to get over here.

We are on the other side of Houston. I serve currently as the chairman of the board of the National Milk Producers Federation and

on the corporate board of Dairy Farmers of America, and I appreciate this opportunity to talk to you today.

The National Milk Producers Federation is headquartered in Arlington, Virginia. It develops and carries out policies that advance

the well-being of the U.S. dairy industry. National Milk Producers

has 32 cooperative members, about 60,000 dairy farm members,

and I am here representing those people today. As members of the

National Milk Producers, we join together to better assure that our

Government in Washington will understand and recognize those

economic, legislative and regulatory issues that most impact our

livelihoods and our communities back home.

The need for a uniform national animal identification program in

the United States is urgent, as the recent discovery of BSE in

Washington clearly illustrates. It is absolutely critical to be able to

rapidly track back and verify all animal movements associated

with all birth cohorts of an infected BSE animal including their offspring. I am sure we have not seen or felt the complete ramifications of this one cow in Washington State. BSE is no longer just

a foreign animal disease; it is here in the United States.

Another thing we can say for certain is that we do not have a

workable uniform national identification program for our animals

and for tracking a plan in place in the United States to address

any future disease outbreaks. Until we do as producers we must

constantly live in fear of a potential outbreak of a foreign animal

disease or emerging animal disease in the United States that could

devastate our herds, our markets and our national security. In the

case of foot-and-mouth, a disease outbreak, it would be even more

critical to be able to quickly track both forward and backward all

animal movements associated with all potential sources of infection. It is imperative regardless of whether the disease, foot-andmouth, was introduced her naturally or intentionally.

The U.S. needs a uniform system that establishes minimum

standards for identifying all physical locations and premises where

individual animals and groups of animals are routinely raised and

animal lots are located. In addition, the U.S. needs uniform minimum standards for the identification of individual animals, groups

of animals and lots of animals. Lastly, a uniform national organized system for reporting and storing specific information required

for tracking animal movement between premises is necessary.

Without these it becomes impossible to quickly respond to an animal health emergency and avert any potential negative public and

marketplace consequences.

We at National Milk recognize the advantages of implementing

a uniform national animal ID system as envisioned under the U.S.

Animal Identification Plan, the USAIP. This plan has been widely

47

recognized within the livestock industry. For the past 2 years, more

than 70 national livestock organizations and approximately 400

producers and experts representing these organizations have labored to develop USAIP as a national umbrella operating plan.

Under this plan, all species of food animals, from cattle to fish, can

be properly identified and tracked for both disease surveillance and

emergency management purposes.

A number of different species working groups are organized

under USAIP to develop final implementation plans for introduction of USAIP into their respective industries. The dairy species

working group is now in the process of finalizing for implementation of USAIP and the U.S. dairy industry. Dairy and beef cattle

interests will soon come together to formulate overall cattle industry recommendations for implementation of USAIP within the entire cattle industry sector. Likewise, both the pork and small ruminant industry, such as sheep and goats, are working to establish

final recommendations to implement USAIP in their respective industries.

Specific concern of dairy producers is the imperative to maintain

confidentiality in the animal identification and tracking information that will need to be stored in a simple database under USAIP.

This information may be limited to premises identification numbers, individual animal numbers, group numbers, animal lot identification numbers and dates and locations of movement. It is important that this information be maintained in a confidential business

environment. When such information is combined into one central

database, it could be misused by those who have motivation to do

harm to the livestock producers. We recommend that everything be

done to keep this information confidential.

With a broad base of producer and livestock marketing support,

USAIP has been developed as a model national animal identification and tracking plan driven by industry needs and expectations

that we believe are both realistic and achievable. An effort is being

made to keep USAIP technology-neutral so that each species may

select and adopt the technology which works best in their respective industries. A timeframe has been established under USAIP to

begin to track the movement of cattle, swine and sheep in both

interstate and intrastate commerce. National Milk believes that

this should be initiated just as soon as possible. To allow the process to get started, USAIP operational models should be implemented without further delay. Congress can help facilitate this implementation process by recognizing USAIP as the system of animal identification that we would like to see in place.

Animal agriculture at the farm level is $100 billion industry. Preventing the introduction of foreign animal diseases that could disrupt our national economy is paramount of importance to overall

public confidence in our food supply. Therefore, the public, we feel,

should share a substantial portion of the up-front costs associated

with the introduction of a workable and sustainable national identification program. USAIP, if properly implemented, can become

the foundation for monitoring and surveillance for many diseases.

A national laboratory surveillance system cannot be effective until

a workable uniform national identification plan is implemented.

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48

fidence that our uniform national U.S. identification plan is implemented and demonstrated. This is a major but essential undertaking for the national benefit, and Congress can assist by addressing

the substantial cost that is going to be borne by the industries.

Mr. Chairman, just in closing I would like to reiterate my 4 final

points. Number 1 is the absolute need for a national uniform animal ID program. Number 2 is that USAIP is our choice. Dairy and

beef have both come out in support of that program. Number 3 is

that we have funding by the Government as much as we can. Cost

sharing or full funding is what I would ask for if you ask me. And

confidentiality. Confidentiality is absolutely crucial for this program to work, and I feel like I am preaching to the choir listening

to this part of the program today because it sounds like you are

all in agreeance with what we need to have done. I appreciate the

opportunity to visit with you, and I would be happy to answer any

questions if I can later.

[The prepared statement of Mr. Beckendorf appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you, Mr. Beckendorf. We appreciate your

observations. And now we will welcome Dr. Smith.

STATEMENT OF GARY C. SMITH, VICE CHAIRMAN, INTERNATIONAL STOCKMEN’S EDUCATIONAL FOUNDATION, HOUSTON, TX

Mr. SMITH. Thank you, Mr. Chairman and members of the Committee on Agriculture. I need to start by describing to you what the

International Stockmen’s Educational Foundation is. It is a nonprofit organization. We hold a congress each year in association

with the Houston Livestock Show, a conference in conjunction with

the Calgary Stampede in Canada. Our board is comprised at the

moment of members from the United States of America, Canada,

Australia and Uruguay. We do not have policy as such because we

actually operate the congress and the conference as thinktanks. We

invite in, depending on what the subject is, 50 to 80 people that

we think are thought leaders relative to the issues that we are

going to consider at that particular point in time. And, basically,

at the end our conclusions really are recommendations from someone with third party affiliation as a foundation, just recommendations that the industry might consider as they decide how to meet

each of those issues.

Let me just use three or four examples to show you where we

think a national identification plan and traceability concept are

really needed. In our ISC, International Livestock Congress Beef

Program, in 2002, we were concerned about small and medium size

producers being able to survive in the face of concentration and

consolidation. And one of the things that we felt was essential for

them to be able to do that was to be able to develop markets for

their own product using source verification, process verification,

knowing where the animals came from and how they were treated

as a part of their opportunity to compete with the much larger

firms that were there. In that same conference, we became concerned about agricultural bioterrorism as it affects specifically animal agriculture, and our feeling was the best possible deterrent

that we could have to a bioterrorist was for them to know that we

49

could rapidly trace animals that had a disease or that had someone

had attempted to give a disease.

The following year we were trying to determine how we could

help people produce consumer-demanded beef, and we wound up

again with those same recommendations. The quality and consistency and safety and protection of the public health all really revolved around the opportunity to use traceability and source verification and process verification to identify their products. In that

same conference, we were concerned with how we were going to implement COOL because at that point it would have gone into effect

this fall. And so as we developed a plan for how the industry would

react to that need, an integral part of that was a traceback, traceout, trace-forward system that involved national animal identification.

At that point, every time we talked about traceability we were

saying that it should be voluntary. By the time we got to the International Beef Industry Conference in Calgary last year, we had had

the BSE incident in Canada and so Dr. Richard McDonald who represented ISEF at that meeting said, ‘‘Implementation of a

traceability system in the United States of America is inevitable

and necessary. The drivers for traceability are animal carcass and

beef performance for certification, food safety and public health.’’

This year at our International Livestock conference we dealt with

the issue of BSE in North America, in Canada and in the United

States, and among the things that we said in that conference was,

first of all, we applauded Secretary Veneman saying that we were

in fact going to have a national animal identification program as

a major part of USDA public policy for mad cow disease prevention,

and we also were encouraged by the fact that in President Bush’s

fiscal year 2005 budget there would be an increase of $47 million,

$33 million of it directed toward helping to identify a national animal identification system.

I close with the fact that the International Stockmen’s Education

Foundation would like to urge Members of the United States Congress to move forward expeditiously to implement a coordinated national identification and traceability system for livestock. Thank

you very much.

[The prepared statement of Mr. Smith appears at the conclusion

of this hearing.]

The CHAIRMAN. Thank you, Dr. Smith. We will now proceed to

questions. I would like to direct my first question to the entire

panel, anybody who wants to answer this question. Each of you has

raised concerns about confidentiality, but the USDA cannot guarantee that the information held by the Government would never be

released under the Freedom of Information Act. Would you still

want to go forward with a Government-run program or would you

accept a program operated by the private sector as an alternative?

Don’t everybody jump at once. Mr. Denis?

Mr. DENIS. My thought would be that if the USDA can’t guarantee the privacy of the information, we don’t want to release it to

USDA. And if that holds true for the rest of the Government, then

we would not want to release it to the rest of the Government either. So either I heard discussed this morning about legislation to

make sure that it is held private. If that is possible, then that is

50

fine. That is how it ought to be done, and USDA ought to still manage the information. If that is not possible, then the only way I see

to do it is through a private entity that does not have to.

The CHAIRMAN. And let me add a refinement to my question. If

the USDA cannot guarantee that it cannot retain the information

and has to release it to other Government agencies, setting aside

the question of whether it then gets released outside the Government, would your answer be the same?

Mr. DENIS. Mine would be the same.

The CHAIRMAN. OK. Thank you. Ms. Lyons?

Ms. LYONS. Yes, Mr. Chairman. I would say that the success of

the initiative, the success of the Animal Identification Program is

going to be participation by producers of all segments. Producers

absolutely will not participate unless there is confidentiality of the

data. They have told us that loud and clear on numerous occasions,

so if they will not participate in the program, the program would

not be effective unless that confidentiality is respected.

The CHAIRMAN. Thank you.

Mr. BECKENDORF. One other issue.

The CHAIRMAN. Mr. Beckendorf.

Mr. BECKENDORF. I think confidentiality is probably one of the

biggest issues for any people that are opposed to this National

Identification Program. I have been schooled never to say you can

guarantee anything, much less the USDA guaranteeing it. But my

animals are all identified several different ways, through the bolt

studs, through National DHIA and so those kind of things would

roll into the USAIP I would think, but we do need something but

confidentiality is a major, major issue.

The CHAIRMAN. Thank you. Ms. Philippi.

Ms. PHILIPPI. Our industry definitely feels the confidentiality industry is important. There has been discussion on if there would

be a third party that would manage the data and things like that.

Some of those things I think will be hammered out on the details

when some of the plans are done, but, again, we do believe that if

necessary Congress is going to have to take some type of action to

ensure that USDA can handle that data. I think that would be

most acceptable.

The CHAIRMAN. Thank you very much.

Ms. LYONS. Mr. Chairman, if I just might add, one of the proposals obviously would be that the Government have access to that information as it relates to animal health issues and that the other

data would be held in the database and they would not have access

to that. And, certainly, that could be entity or entities outside of

that Government.

The CHAIRMAN. Thank you. Dr. Smith, your testimony lends considerable support to the notion of product traceability which I perceive as distinct from animal ID. While retailers, processors and

packers talk about traceability in terms of food safety and quality

control, some suspect their interests really lies in shifting liability

to producers. How do we protect producers from being dragged into

liability fights that take place somewhere else in the food production system?

Mr. SMITH. I think unquestionably that has been one of the great

concerns. One of the studies in my other life as a university profesVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
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sor we were trying to determine in the average 4-ounce ground beef

patty how many animals might have contributed a piece of muscle

or fat to that 4-ounce patty. And when we determined that the

least number of animals would be 56 and the greatest number

would be 1,084, the odds of us being able to trace bacteria, for example, back to an individual animal or chemical residues back to

an individual animal just honestly don’t exist. So I don’t think we

fear that as much as we do the thought on the part of others that

we would be able to trace it back to a farm, and that individual

farmer or rancher become liable. It is huge concern and one that

everyone in animal agriculture is concerned about.

The CHAIRMAN. Thank you. My time has expired. Did you want

to add to that answer?

Ms. LYONS. I might just add, Mr. Chairman, that producers have

told us they are very concerned about that liability and where

would that stop and end, and certainly they do not want to be held

to a higher standard than ordinary care, that if they provide an

perform those practices and abide by the laws as far as withdrawals for medications and those kinds of practices, they believe and

want to see assurances that that will be the level where their ordinary care liability would end.

The CHAIRMAN. Thank you, Ms. Lyons. The gentleman from

Texas, Mr. Stenholm.

Mr. STENHOLM. I don’t think there is anyone in the audience or

anyone that has been listening today wouldn’t agree with the general statement that the purpose of this hearing is individual animal identification, and anyone that deliberately, deliberately contaminates our food system should be punished. The question is deliberate and this ‘‘lawsuititis’’ that we have got in the United

States today in which everybody is looking for ways to sue at the

drop of a hat is what causes the reluctance of producers to want

to share any information, even information that is in our own best

interest. Now, I don’t know how we deal with that but we are going

to continue to try. But the best way to do it is to absolutely ensure

privacy of this information and then work on the other problems.

In doing that I think I had a question sent up to me—actually,

it is a question or a statement from the audience a moment ago.

It says, ‘‘Every American has an ID number. It is called a Social

Security number. Can you find any person in the United States in

48 hours?’’ And the answer is obviously no. Social Security numbers are protected by the Social Security Act. You do not have to

issue your Social Security number to anybody unless you want to;

it is voluntary on your part. But the Social Security Act demands

that that number be retained for purposes of Social Security only.

Now, anybody that wants a Social Security number you can probably go out on the streets in Houston, Texas and buy you one

today. You can buy you a driver’s license today. And my point in

bringing up—if it doesn’t matter, you look to the person to your

right and look to the person to your left. Does it matter to you

whether they are a legal citizen of the United States or not? If you

say, no, then we don’t need to worry about it, but if we have got

14 million illegal persons in this country, some of which are alQaeda tied, it bothers me. If it doesn’t bother you, then it is not

a problem.

52

That is why I bring that up because we are talking now about

something to protect our own industries. Every single one of the

five witnesses here have come forward in saying basically in your

own words you want it voluntarily developed because that is the

best way to do it. You sit down as an industry and you decide how

you best will police your individual industry, and you are going to

find some differences between the five industries there, well, at

least three of the five. Dairy and beef are pretty much going to be

on the same program. But the rest are going to have to have some

individual adjustments made to it, but the system when we say voluntary and why I use the term, ‘‘voluntary mandatory,’’ voluntarily

let us decide what is in the best interest of our industry, and then

if the majority decide that is what the industry needs to do and

that is what the Department is working through now with the industry is deciding what and how we should do it. But everyone has

said it has got to be mandatory.

Now with those that believe otherwise, I respect that. We have

great freedoms in this country. But my freedom to swing this arm

ceases when it contacts Mr. Lucas’ nose, and that is something that

we have to remember as an industry. Our individual desires have

to be superseded by the desires of the majority or otherwise you

suffer the consequences, and that is something that every one of

the leaders here are going through, and as you find the differences

within your own industry I know what you are going through in

this.

But every one of you have testified. I want to ask one specific

question of both the pork and the lamb. Mr. Denis, you have talked

about lambs being shipped across States lines must already be

identified in some way because of the Scrapie Program. Could you

describe in more detail what that system is, how well it works for

traceback and traceforward in the event of the identification of a

disease? And the same I would like to Ms. Philippi to do it regarding the group lots and how well it is working for hogs.

Mr. DENIS. My understanding is the Scrapie Program has no effect traceforward from slaughter. My understanding is it has

worked very well. The scrapie tags have worked very well. They

are read at the point of slaughter. The only purpose in that program is to catch that diseased animal at the point of slaughter.

Then that tag does have to premise identification, so if you find a

reactor where she came from or he came from. You don’t know

where it has been all up and down the chain necessarily, but you

do know where it came from. To that extent it is working very well.

It would not work in this situation because it is a little tiny

metal tag that you have to have a hold of the animal and read it,

and if you were trying to do every one of the sheep every time they

moved, you would be overwhelmed by the work that you would

have to do. But for the scrapie eradication I believe it is working

very well.

Ms. PHILIPPI. In our industry, with the pigs that move across

State lines they have traceback through health papers and things

like that to the premise where the pigs came from, the location. We

use that in our system some and it works well. As far as actual

ID device at this time, we don’t use anything that I am aware of

on the pigs that are within a production system moving across

53

lines, things like that. And then with the sows and that it is identification to the slaughter plant.

Mr. LUCAS [presiding]. The gentleman’s time has expired. The

Chair now turns to himself. Just for an appreciation of the magnitude of the challenge we face and not discussing the adult, mature breeding animals, Ms. Lyons, just off the top of your head how

many beef cattle calves are born every year, 40 million?

Ms. LYONS. Roughly, 40 million.

Mr. LUCAS. How many piglets hit the ground every year in this

country would you guess?

Ms. LYONS. You might be asking a question that I can’t answer

for sure.

Mr. LUCAS. But it would have to be a substantial number, certainly in excess of the 40 million beef cattle, so we could be talking

80 million maybe?

Ms. LYONS. That is right. I would say that would be possible.

Mr. LUCAS. How many lambs are born every year?

Mr. DENIS. I am going to guess there is in the neighborhood of

8 million?

Mr. LUCAS. And milk?

Mr. BECKENDORF. Forty to 45 million.

Mr. LUCAS. So even if we don’t address the adult creatures, just

the animals being born, we are talking, oh my goodness, 165, 170

million individuals a year, and depending on how they are tracked

in groups, recording that movement through sounds like a pretty

daunting task no matter what.

I turn to the panel once again as a whole for another question.

One of the issues raised by my constituents is not so much the

question of tracking back for particular diseases but a concern over

some of the mundane routine stuff. From a beef cattleman’s perspective in an industry where we have one part of the segment that

raises calves and in my part of the world stocker operators with

their wheat pasture and then of course the feed lots and whatever

else, the things that we do at every stage of the way. I vaccinate

calves at 2 months and when my stocker neighbors buy them and

put them on wheat they go through an entire vaccination series

again, and when they go to the feed lots they are vaccinated again,

all basic good health. The question one of my constituents asked

was, well, if someone shoots in the wrong place, uses a dull needle,

it is not clean and that quarter has to be thrown away at the processing point, in this kind of a system, in theory, you track back

down. The question was who would be responsible for the bad shot,

so to speak, when it would be indistinguishable? I guess my question is from the perspective of this group the stuff you have seen

from the Department so far, the discussion you have had internally

in your own associations, is there going to be any way to address

those kind of problems? I mean right now the packer takes the

loss. Doctor?

Mr. SMITH. Since I grew up on a stocker cattle operation in Cato

County, OK I am familiar what you are saying. And since I have

worked on injection site blemishes in cattle using beef checkoff

funds for the last 15 years, what we did when those first started

occurring was not try to blame people, not try to point fingers, not

try to go back and do that but to put into place an education proVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
54

gram that allowed us to teach everybody concerned what they

should be doing. So I just don’t think there is that kind of mentality to take it back and say that to an individual producer. I think

we tried to educate our way out of it. Yes, it could be used for that,

but I just don’t think that is the way our industry operates.

Mr. LUCAS. The flip side of the coin, with this sort of a system

identifying all the way through the process is there a probability

that producers who use good genetics, good breeding practices, who

are state-of-the-art would be rewarded for their, in the beef cattle,

for instance, their greater rib eye size and their more consistent

weight going through the packing plants? Do we see where that potentially would be a possible benefit on down the road?

Ms. LYONS. I would say that the success of this program is going

to be determined on the pull-through nature of the benefits, and as

producers see the fact that if their calves are identified when they

enter commerce, that the person who is purchasing those pays

more dollars for that animal, then those kinds of incentives encourage producers to participate in the program. So I would say, yes,

you would be seeing incentives as that becomes available, as we see

that marketing system and that free enterprise system at work.

Mr. LUCAS. So there is a little sunshine even in the shadiest

clouds once in a while.

Ms. LYONS. I have seen that incentives provide a much better,

greater opportunity and encouragement for participation than do

penalties.

Mr. LUCAS. Very good point. The gentleman from Arkansas.

Mr. ROSS. Thank you, Mr. Chairman, and thank the panel for

coming to Houston and being a part of this. This is very important,

and let me make it clear, I mean I am here. Out of 51 members

I think 12 or 13 of us are in Houston, and let me just say that I

am here because I want to find a way to make this work for producers. My frustration at USDA is certainly not aimed at you all,

it is just we have been studying this thing for about 4 years and

I guess we are going to study for a few more years, and I would

just like to get things done instead of study them all the time, and

that is why I get a little frustrated with how our Government operates. They were talking voluntary but maybe someday mandatory.

You all pretty much, as I understand it, believe it has got to be

mandatory to every work; is that right? Yes, no, yes, yes and no?

Ms. LYONS. I would qualify that. I would say that our position

is and our belief, strong belief is that there must be an adequate

level of participation for this program to be successful. We do not

believe at this point in time that that needs to be mandatory. Certainly, the voluntary aspects and participation at a high level to

have producers participate should be aimed at and achieved, and

you do that by implementing and stressing the right program, the

program that does provide for things like confidentiality of the

data, not a lot of burden, back on producers. And as you design the

program, you make it something that they want to participate in

and see benefits to participating.

Mr. ROSS. My thinking is if we do this, and I am talking cattle

specifically here, if we do this for 95 million head of cattle, I am

told we can get it down to about a buck a piece. So at a buck a

piece you would still want to keep it voluntary and you would want

55

to offer an incentive at the time of commerce to encourage them?

So if it only costs a buck to do it, what is the kind of incentive you

are wanting to offer, 50 cents, a buck, a buck–50? Any idea?

Ms. LYONS. I would say the market must determine what that

incentive will be. And as every step as those transfers take place,

that will be determined in the system as it works. The whole debate about voluntary versus mandatory seems to me it puts emphasis on the wrong thing. Our producers tend to respond and react

adversely when they are told they have to do something. I would

much rather have them come forward because they see benefits to

participating in this program. And that if we do a good job to educate them and to bring them to that point and to explain that, I

think we have a much better chance for success for the whole program.

Mr. ROSS. I have done a number of town halls, not town halls,

meeting with the cattlemen association groups in my district and

they were a lot more standoffish about this whole national animal

ID thing before December 23, and at least in my area now they are

beginning to embrace it and recognize that long term that something needs to be done to keep their price from dropping. My only

concern is if it is—and voluntary may be the way to go, but if we

go voluntary with the thing, it is like the 51 cows we finally quit

looking for. If those 51 happen to be the 51 that aren’t tagged, then

we haven’t really accomplished anything with this new technology.

In terms of the cost, I believe, and Congressman Peterson and

I in our bill we require USDA to pay most if not all of it. I mean

if we can spend a billion dollars a week paying interest on national

debt, surely, goodness, we can come up with $100 or $200 million

to restore the markets to the producers as well as assure the safety

to the consumers.

Another quick issue is on this technology business. What I am

fearful of is you get a bunch of people out there with a different

kind of technology because no one is going to sell the same kind

of thing because they all want to make theirs a little bit different,

and if you have got one kind of technology that you invest in from

one private company and then when you get to a sell barn they

say, ‘‘We don’t accept that kind of technology. Now you have got

to pay us so many dollars to pop that button out and put a different button in before it can keep entering the chain,’’ I just see

a lot of problems if we have a bunch of different kinds of technology. Would any of you all like to elaborate on that?

Mr. BECKENDORF. I think we do need one uniform plan all the

way across the country.

Mr. ROSS. Does everybody agree with that? Just raise your hands

if you believe there should be one uniform type of technology.

Ms. LYONS. Mr. Ross, I would just say starting out that certainly

is the advantageous way to go with what is available out there.

And I agree with you and your comments earlier regarding the fact

that as they enter commerce, even if I am to sell to my neighbor,

my neighbor is not going to have a bunch of different readers if he

is buying calves from everyone. So starting out it needs to be, but

I think let us not cast it in stone what the future may hold because

as technologies develop and come aground there may be other ways

to go that would be endorsed.

56

Mr. ROSS. In closing, Mr. Chairman, let me just quickly point out

two things. One is we now live in a global economy, and the fact

is that when I used to spend time on my grandpa’s farm we would

go 8 miles to the sell barn in Hope, Arkansas and we would sell

it and they would be slaughtered somewhere near there and be

sold somewhere near there. And now we have got cows that see no

borders and we have go the technology to deal with these new

changing times that we have.

Finally, on the privacy thing, and that has to do with privacy.

USDA by regulation cannot guarantee us privacy; they stated that

this morning. We can by regulation, and that is what Congressman

Peterson’s legislation and my legislation does. Finally, let me just

caution you, if we do end up having these databases owned by the

private sector, don’t forget that it is much more difficult to control

the private sector than it is a Federal agency with a Federal law.

And a case, an example, I will leave you with: I recently had someone approach me to let me know—this is a private company now—

IRS, there is no way the IRS could ever give me this information

without getting in a whole lot of trouble, but a private company

came to me and said, ‘‘You know, for your reelection campaign we

can sell you, we can sell you everybody in your district who has disposable income over $750,000 and tell you which charities they

have donated to and whether they are a Democrat or Republican.

And I was appalled by that. But that technology is out there and

available in the private sector, and I am real concerned that if

these databases are maintained in the private sector, that this information ends up in the wrong hands. Just something to kind of

chew on for a while. Thank you, Mr. Chairman.

Mr. LUCAS. The Chair now turns to the gentleman from Minnesota.

Mr. GUTKNECHT. Thank you, Mr. Chairman. Mr. Ross, if you

would just give me the names of those Republicans, I would——

[Laughter.]

Mr. LUCAS. I will give you the name of the company and for

$6,000 you can buy it. I mean it is crazy but it is out there.

Mr. GUTKNECHT. well, it is amazing and I was just going to mention that I don’t have any real specific questions because most of

the questions have already been answered. And I want to thank all

of you; your testimony has been excellent. I do want to mention in

terms of technology, again, having served on the Science Committee for all of my 9 years we learn a lot about technology, but the

technology in this field is emerging very, very rapidly. My colleagues would be disappointed if somewhere in my presentation I

did not talk about prescription drugs because I have become very

involved in the whole issue of tracing prescription drugs. And back

in my office, and I apologize, I should have brought with me two

little vials that I have. One is—in a little vial about this big I have

150 microcomputer chips. They are being developed. They are the

next generation of the UPC code, and they will start emerging, you

will start seeing them in grocery stores within the next 2 years,

and the cost right now for those little computer chips is about a

nickel. They believe they will drive them down to probably less

than 2 cents as the market emerges for those. The other thing I

have in my office is a vial of a product that has been developed by

57

a little family owned feed and seed company up in Minneapolis

called Cargill and it is a family owned company. It is not a family

farm but anyway they have developed microscopic taggets made essentially of corn starch, and they are going to be incredibly cheap.

So I think this technology will continue to emerge and develop and

become more affordable.

I just want to thank all of you, and I think the testimony has

been excellent today from all of you, because I think the concerns

are real, but I think the concerns are solvable, and I think as we

go forward we will forge this consensus and take the world’s safest

food supply and make it even safer. Thank you very much.

Mr. LUCAS. The gentleman from Kansas.

Mr. MORAN. Thank you, Mr. Chairman. Did anyone on this panel

hear something this morning from USDA that you wish we would

have asked about, any flags raised, concerns that—a number of you

have items in your testimony, lists of things that you think need

to be done before we bring animal identification into play, but did

you learn anything that USDA is doing that causes concern? I take

that as a no? That is encouraging. Nice to know that the industry

and the Department are on the same page.

The other thing that I thought was interesting was the amount

of money that was suggested this may cost, $550 million. If we

were going to spend $550 million in the livestock world, is that how

you would want the money to be spent is on developing an animal

identification? Is this your highest priority?

Mr. DENIS. I think from the sheep industry it is. In other words,

until we had the BSE in Washington we thought we were protected

so it wasn’t very big. Today it is big. We could have lost a lot more

than we lost.

Mr. BECKENDORF. It was BSE this time. Next time it could be

foot-and-mouth or BSE again somewhere else. We have TB here in

Texas. Today we are testing every dairy herd, every purebred cattle

herd here in the State. It is absolutely imperative that we have

some type of a program to identify where those cattle are and

where they have been.

Ms. LYONS. And I would say, Mr. Moran, that certainly that is

our highest priority. The ability to track and trace back quickly

from an animal disease perspective is probably the most important

issue right now facing our industry and the beef cattle industry.

Ms. PHILIPPI. The swine industry looked at this prior to the BSE

outbreak. We thought that it would be very important to have a

plan put in place to be able to trace back to the last premises. I

believe in our situation animal health is the beginning of food safety, and that is one of the steps that we were hoping that would be

taken to provide a traceback. I think we have also became a little

more aware of agri-terrorism issues. I think that is why we see it

as a priority.

Mr. BECKENDORF. Can I comment one more time?

Mr. MORAN. Certainly.

Mr. BECKENDORF. This USAIP is an animal identification program, not a food safety program. I think the food safety would

come in as consumers know that we know where those cattle are

and can find them.

58

Mr. MORAN. When we as members of this committee have a discussion with our colleagues who perhaps are less oriented toward

agriculture, it seems to me one of the issues that we face in this

process is how much it is going to cost and who is going to pay?

When we are asked the question for justification of why someone

other than the producer should pay what is the response to that

question to our more urban colleagues?

Mr. BECKENDORF. Well, this isn’t a food safety issue. The cattle

industry or the animal industry is going to be forced to do the labor

to put these—to carry this out. The cost, I think, is in the public

interest more than just in the cattle industry, and so because it is

in the public interest, I would think that we need some public

funds, at least cost share in the program.

Ms. LYONS. I would say that it is an imminent threat not only

to the cattle herds but that could devastate not only our economy

but the whole economy, and certainly from that perspective it is a

national issue and therefore the Government should participate in

that program.

Mr. MORAN. Thank you all very much for your testimony, and I

appreciate Chairman Goodlatte organizing this hearing and his

staff putting together with USDA followed by you. I think it has

been a good dynamic for us to hear from both of the panels, and

I appreciate your testimony today. Thank you, Mr. Lucas.

Mr. LUCAS. Thank you, Mr. Moran. The Chair turns to the gentleman from Georgia.

Mr. BURNS. Thank you, Mr. Chairman. Again, it is good to be in

Houston. It is good especially to have a panel who have multiple

livestock industry groups represented because we all have a stake,

we all have a stake. I want to start by, first of all, my colleague,

Mr. Ross, and I disagree on a number of things. We don’t disagree

on the objective, and the objective is food safety, and the objective

is a stable economy for our beef industry, our beef cattle industry,

our dairy industry, our swine industry and certainly our sheep industry.

Now, it is interesting that indeed we have an identification system. I wish this were a Coca-Cola can, I was looking for a Coke

can. The UPC code—because there is a little small company in Atlanta, a little business that does that there. We have had a UPC

code for years and whether I am buying Coke or whether I am buying USA Today or, quite honestly, whether I am using a card with

a chip, the technology is there. Twenty or 30 years ago I was dealing with database designs for marketing data associated with products. Now, we don’t identify this can, although we could, and we

don’t necessarily identify this particular piece of paper, although

we could. And there may be market value in that. I would make

one comment: I would think that it would not be in our best interest to identify, have USDA identify or anyone else for that matter

a single technology that is supposed to answer and solve all of our

problems. It is a bit problematic because the technology and how

quickly is it moving, and I would focus much more on standards

and compatibility than a focused technology.

Now, my question starts with existing programs. I have a beef

herd, I vaccinate brucellosis, I put tags in ears and we do that kind

of thing. I think in your testimony, Ms. Lyons, you point out that

59

that was a very successful program, perhaps so successful that we

have not been as vigilant in the more recent few years than we

have. And I think, Mr. Beckendorf, you point out we have problems

here in Texas with some animal diseases. Now, what about existing

programs that are already there that we can build upon?

Ms. LYONS. To respond to that, I would say that certainly there

is a lot of activity going on out there in the States right now, a lot

of very effective programs that are very successful. We would be remiss if we tried to reinvent the wheel, but certainly we do need

this national standardization, and certainly if those programs provide the kind of data in the format that is able to be interchanged,

we certainly think that we need to start with those programs and

advance those.

Mr. BURNS. Would you suggest or agree that these programs

need to be integrated into and maybe provide a foundation start for

any future development?

Ms. LYONS. And I would tell you that they are. As we look at the

programs around the country, what is going on, and as I understand USDA has as well, there are many of those that comply. We

think it is important that we get the standards out there, though,

quickly before producers or States rush to make decisions that

maybe will not give us that interchange and that integration. So

we think we need to take the leadership in that, but, certainly,

there are programs out there that are very successful and blend in

there very well.

Mr. BURNS. History is not on our side. Forty years ago we tried

to develop a telecommunications standard for the United States

and the U.S. Department of Standards, Bureau of Standards was

charged with that task, and it took them so long to develop a

standard the industry created a standard and basically implemented it ahead of the bureaucracy that was in Washington. Now

that might be a similar scenario that we face today. Should there

be a differential system between those who deal with breeding

stock and those who deal with terminal stock or it is all one system? Ms. Philippi?

Ms. PHILIPPI. In our industry there will be a difference because

our breeding stock is identified, and the feeding channel ones are

not.

Mr. BURNS. In the cattle environment, our breeding stock is identified.

Ms. PHILIPPI. Right.

Mr. BURNS. We can trace back generations, as we should. But

the question is are you going to require—not are you, are we going

to require the same system for breeding stock that we require for

terminal stock? Dr. Smith?

Mr. SMITH. Exactly the same.

Mr. BURNS. And the reason?

Mr. SMITH. Well, the reason I think is because the reason the Canadian system didn’t work was because they mandated identification of animals that left the farm and ranch. We have got to have

numbers on the ones that stay on the farm and ranch.

Mr. BURNS. That is going to generate some heartburn among certain producers. Ms. Lyons?

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Ms. LYONS. As I understand the plan, it is at the point—they will

be identified at the point they enter commerce. So if, say, a replacement heifer——

Mr. BURNS. But there is a big difference here between Dr.

Smith’s position, Ms. Lyons; is that correct? You are saying, Dr.

Smith, that we should—when they drop on the ground, when we

have a calf on the ground, we should ID it at that point?

Mr. SMITH. I believe that except in the northern parts of the

United States they really don’t see those calves for a couple of

weeks. We have to have a little bit of latitude. If we can mother

up the calf and identify it at that point, then it should be identified

from that point on the rest of its life—my opinion.

Mr. BURNS. Ms. Lyons?

Ms. LYONS. There is a lot of unanswered questions. We don’t

have all the answers at this point in time. Those questions need

to be on the table and they need to be examined, but, certainly, as

this goes forward there will be more answers as we go forward.

Mr. BURNS. Thank you. Mr. Chairman, if I could ask one quick

question. USAIP suggest RF technology as a potential option. Are

there any issues or concerns with RFID as it relates to data security or information use? Do you see any concerns there?

The CHAIRMAN [presiding]. That is not a quick question, but I

will allow a quick answer.

Mr. BURNS. OK. I will withhold that and submit it in writing.

Thank you, Mr. Chairman.

The CHAIRMAN. The gentleman from Iowa, Mr. King.

Mr. KING. Thank you, Mr. Chairman. First, I would like to direct

a question to Dr. Smith, that being if I heard correctly one-quarter

pound patty could have as few as 56 in it or as many as 1,084. How

would we ever even calculate the probability of that data?

Mr. SMITH. The way we did that was we went to packing plants

and the put all of their trimmings in 2,000 pound units called

combo bins, and so we determined how many animals were contributing pieces to combo bins. Then we went to large grinding operations where they bring in combo bins from differing sources and

blend them together and make the patties. And from that we determined that the minimum was 56 and the most was 1,083.5, so

1084.

Mr. KING. So you rounded her up just a little.

Mr. SMITH. Yes, sir.

Mr. KING. I didn’t happen to catch that, though, and there was

a slight discrepancy in your testimony, but I wanted to hear how

you had done that and that is a statistical analysis, and practically

speaking, one two-hundredth of a pound in there would be at 156,

so that is a pretty small particle and maybe a grinding wouldn’t

bring it to quite that precision, but your point is well made.

So as I listened to this testimony, I might point something else

out too, and that is that you are reluctant to allow this information

to be under the full control of the USDA unless they can guarantee

the confidentiality of the proprietary information that you appropriately should have controlled in the hands of the producers. And

I would point out that the USDA has testified, as you know, that

they cannot guarantee the confidentiality of that information, but

my point is that I don’t know that there is any entity there that

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can guarantee confidentiality. So I would suggest from my perspective, and actually something that has shaped here as I listened to

this testimony, that a third party and I would suggest a private

contractor third party that would be controlled and directed by a

board that had representatives from each of the relevant producers—the packers, the retailers, the USDA. They could set then the

parameters of that confidentiality. We might set those parameters

in law to give you better security on that, and then the firewalls

could be established by the private contractor for the central database, and those security items are something that is pretty well established now in the technological industry. And that would let you

have maybe the best of all worlds. And if we could also establish

the liability there for the central database if that information were

leaked or released to inappropriate channels and even potentially

if it is wilfully enough criminal penalties would give you a maximum kind of confidentiality in that information. You give us a vehicle to centrally collect it. I personally wouldn’t be so opposed to

the USDA collecting that information at points of collection, be it,

say, county, for example, provided that it went directly to that centrally controlled database and nowhere else. So there is a scenario

that we might be able to come together and agree upon.

But the question that I have that is not resolved in my mind yet

is, and I want to just start down the panel and ask each one of you

to answer this, who should pay for this system and in what configuration would you propose that that happen? Ms. Lyons?

Ms. LYONS. Let me just say the system that you propose is one

that we have heard about as well, and that is that much like a

credit card company or companies they have a lot of data and there

is an ability to access that information as needed, and, certainly,

the repository, though, would be outside of the control of those who

are accessing that. The system that you outlined would answer

that, as I see it. That is something we should consider.

In response to who should pay for that, I believe that the infrastructure should be paid for by the Government. The States and

the Government, the Federal Government working together should

pay—should incur some of the costs of setting that up in their

States, and producers as well need to participate with the other entities to put the tags in and for the system to work. It needs to be

a shared system where all three entities pay.

Mr. KING. Thank you. Ms. Philippi?

Ms. PHILIPPI. We believe that it is a Federal responsibility, that

they should—that the Government should be responsible for setting up the system and for paying for that. How much cost share

and things like that, I wouldn’t want to guess at this point but it

is being addressed by the USAIP Swine Group. We are looking at

some budget numbers and things like that, and hopefully we will

be able to answer that question.

Mr. KING. Thank you. Mr. Denis?

Mr. DENIS. From the perspective of the sheep industry, until we

know somewhat more about what the cost of ear tags, for instance,

are going to be, we have heard that they can be made for pennies,

then the producer can buy those. If we are talking $2 ear tags, the

producer can’t buy those. So at this point in time, we would say

the Government ought to pay for it. Beyond the ear tags and into

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the readers, there again it depends if we have a system where a

packing plant only has to have one reader, it can read—he doesn’t

have to have 20 like has been mentioned here, then the packing

plant can probably afford to buy the reader. Above that it becomes

a governmental function then, in my view, to form and maintain

the infrastructure and the databases to have the information available, because the Government is the one that is going to want to

trace it back if something happens.

Mr. KING. Thank you. Mr. Beckendorf?

Mr. BECKENDORF. First source would be the Government to pay

for it. Realistically, a cost share would be preferable.

Mr. KING. Thank you. Dr. Smith?

Mr. SMITH. International Stockmen’s Education Foundation really doesn’t have a position on that, but I think in listening to our

board of directors and listening to the people who participated in

our conference this year, we were hoping that there would be some

help especially for small scale producers and including some help

perhaps to have college extension, State extension programs help

the small scale producers understand what it is that they are supposed to do and help them get it done in this first round.

Mr. KING. Thank you. And in 20 seconds I would just say that

to the extent that you contribute to the cost of this, your voice will

be far louder. And I do agree Government can help jumpstart this

but remember when Ronald Reagan said, ‘‘I am paying for this

microphone,’’ he had a lot of authority over what went out over

that microphone. Thank you.

The CHAIRMAN. I am paying for this microphone. [Laughter.]

The gentleman from California, Mr. Nunes.

Mr. NUNES. Thank you, Mr. Chairman. Mr. Beckendorf, it is

good to see you.

Mr. BECKENDORF. Good to see you.

Mr. NUNES. I have a question as to how many different technologies, approximately, are out there being used on dairy cattle

today?

Mr. BECKENDORF. Probably everything from the clipboard to a

chip. We have probably over 90 percent of the dairy animals are

already identified, whether that be tatoo or ear tags or branding

or freeze branding. So those—they are identified. I have a friend

in Idaho who can get on his laptop and know who is milking what

cow and how much milk she is giving right now, because they do

milk around the clock. And so the technologies are there. And

USAIP does support this radio frequency thing. And security,

which system is completely secure, I am not sure there is one.

There is a lot is the answer.

Mr. NUNES. So you don’t know specifically how many there are

that are set up to be a national tracking system.

Mr. BECKENDORF. FAIR is a major one that is doing that now.

Mr. NUNES. What is National Milk’s position on FAIR? Are they

ready to adopt that as the technology or are they not there yet?

Mr. BECKENDORF. I don’t think we are quite there yet. We are

more interested in the RFID Program that is under USAIP.

Mr. NUNES. OK.

Mr. BECKENDORF. It does fit into that system.

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Mr. NUNES. But you wouldn’t want the Government to basically

pick one technology. You would like to leave it open to other technology makers?

Mr. BECKENDORF. We would like to see what is out there before

we make a concrete decision and then compare the cost.

Mr. NUNES. So in your position, you think we have a lot more

research to do before we are ready to implement a national system.

Mr. BECKENDORF. The Dairy Working Group hasn’t finished their

decision-making yet, and so I can’t speak for that group.

Mr. NUNES. OK. And this is another related question but many

of my farmers say that they have problems with the tags falling

out. Will that continue to be an issue with a national identification

system?

Mr. BECKENDORF. We have seen some of those tags that they are

talking about using, and rather than a dangle tag it is more of a

button, maybe the size of a little bigger than a quarter that would

be both radio frequency and visual. And those they say stay in

pretty well. In fact, it is almost the size of the back part of the dangle tag.

Mr. NUNES. OK. Thank you. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman. Are there additional

questions from members of the panel. The gentleman from Texas?

Mr. STENHOLM. No question but just an observation as we continue to listen to excellent, excellent testimony showing the support

of all of the livestock industry of the necessity of developing an ID

system. There is a very strong consensus for that. Regarding the

shots, vaccines, et cetera, that are given, I am aware of technology

readily available today that will computerize shot-giving, will guarantee within a very small percent of accuracy the amount of dosage

and will identify the location in the animal in which it is given and

at a very reasonable cost, ie. would be very affordable for feed lots,

et cetera. The technology is there waiting a patent. We have just

scratched the surface on technology when we are talking about

this, and there is no question to me that we will be able to develop

this system provided we go about it the way in which we are going

about it today and maintain support of producers for that which we

are doing.

And I have to smile when sometimes I hear these statements

about the private sector versus the public sector, the Government

sector. I hold in my hand a MasterCard, and the question that was

asked a moment ago of me about Social Security, as I mentioned,

now you can counterfeit one of those real easily, but for as far as

identification and finding me, I know this happened to me just a

few weeks ago. I get a call from MasterCard and they said, ‘‘Mr.

Stenholm, are you aware that your card has an inordinate amount

of use in San Antonio, Texas in the last 3 days?’’ And I said, ‘‘Yes,

sir. My third grandson was born and my wife has been in San Antonio for the last week.’’ [Laughter.]

Some cards have got this little button in them. There are all

kinds of technology and ways to do it, and what we have to keep

in mind is why are we doing it? We are not doing it for any other

purpose other than to protect our industry and continue to be able

to say to our consumers aren’t we blessed to live in a country that

has the most abundant food supply, the best quality of food, the

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safest food supply at the lowest cost to our people of any other

country in the world? And this is going to be another component

of being able to continue to say that.

The CHAIRMAN. I thank the gentleman. The gentleman from

Georgia, Mr. Burns.

Mr. BURNS. I thank the chairman for his indulgence, and it is

very difficult to follow Mr. Stenholm when he talks about his

grandchildren in Texas. I would like to revisit the issue of RFID

because I think that is a key issue. Technologically, it is very promising. I have worked around that technology and with that technology over a period of time, but like all technologies it can be compromised, so it is possible that I could go to your friend’s place in

Idaho and with the current—potentially, technologically, I could

monitor his activities and I, too, could know how many cows he

milks and what they are giving and when he milked them and all

those kinds of things. Now, my question really relates to confidentiality of information and whether or not that is something we can

reasonably provide. Are there any concerns or issues among the

panel as far as RFID in particular or other similar types of detectable ID systems remotely detectable?

Mr. BECKENDORF. As I said before, I am not sure there is any

system out there that is foolproof. I have just been through an

audit at our co-op and as always, as every year, in that audit, in

the management letter they wrote up about security issues in the

IS system and how many times do you change your password and

how long is your password and how many passwords do you go

through? And so I am concerned about is there a system out there

that is foolproof? I am not sure there is.

Mr. BURNS. Ms. Lyons, I think NCBA in support of USAIP might

suggest that RFID is an option. What is your potential concerns?

Is it possible for me to sit in this room and tell you how many cows

are out there in the back? Can you also tell me the trucks they

leave on and where they went?

Ms. LYONS. That is the intent of this program, the animal ID,

and that is to track movement of cattle. And, certainly, we need a

system that will do that effectively. We do endorse—we feel that

it is important that producers have someplace to start. Many of our

producers already endorse the RFID Program and participate in

that. We don’t necessarily think that that is where we are going

to end up down the road, because as has been pointed out repeatedly there are new technologies coming all the time but we have

to start somewhere. If there is anything, there is confusion in the

country and they want to know what can I do, what should I be

using? They are being bombarded as well with all of these questions. So from that perspective, we feel that it is appropriate to

begin somewhere and endorse a system that is working right now

for producers and begin there, but don’t codify it in law as to what

you are using but allow USDA to continue to have the flexibility

to change that as that proceeds. The important thing is that we

have the standards and the interchange of data.

Mr. BURNS. I would agree, and I would again recognize the fact

that as technology changes very, very rapidly, Mr. Stenholm pointed this out and a number of others, we need to be compatible, and

as new generations come online we would then be able to subsume

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and consume all prior technologies. I thank the chairman, I thank

the panel for their information input.

The CHAIRMAN. I thank the gentleman. The gentleman from

Iowa, Mr. King.

Mr. KING. Thank you, Mr. Chairman. As I listen to the discussion here on vaccination records and how we can track those

through an animal identification system, I have not heard, though,

the benefits to avoiding dual vaccination of livestock, and that is

something that we know happens, and I direct first my question to

Dr. Smith and then Ms. Lyons on that. What percentage of feeder

cattle do you think are dual vaccinated a day? Can we eliminate

that 100 percent? What are the financial benefits from that, and

how might that help also underwrite the bottom line of the animal

ID system?

Mr. SMITH. One of the reasons that we originally started using

preconditioning programs and back 45 programs was to try to prevent use of medicines more than one time, and an identification

system would allow us to do that. First of all, it saves money; second, it really keeps us from having an unfortunate compromise of

that animal’s health by vaccinating them a second or third time.

So, yet it would help us very, very much in knowing the history,

especially that animal’s health, and also the amount of potential

residue that might be there for human health. So very beneficial

to us to know those things. The more we know about it, the more

likely we are to be able to avoid those problems.

Mr. KING. So a vaccination cost per head then would be about

what?

Mr. SMITH. Depends on how many things you are vaccinating for,

but in total, in most areas, $1.50 to $3 per animal. If you do that

repeatedly, there are some things that cost 35 cents, other things

that cost $2 or $3 but it would be substantial money.

Mr. KING. But each vaccination is within the scope of the cost of

a single animal identification.

Mr. SMITH. Awfully close.

Mr. KING. That is an interesting point. Thank you.

Mr. SMITH. Yes.

Mr. KING. Ms. Lyon?

Ms. LYONS. Yes. To respond to that I would agree with Dr.

Smith. And as we are seeing in our area of the country and across

the country, we are seeing much more incentive to have an provide

data as cattle transfer. For example, cow-calf producers in our part

of the country find that they are rewarded with an incentive if they

provide at the livestock auction or wherever that transfer takes

place if they provide the medications that were given, the dosages,

the location and what date, and if that documentation goes with

the animals, they are given a higher premium, if you will, on those

cattle. So they are being rewarded with incentives for doing that.

We are seeing that all over the country.

Mr. KING. This only gets better with an animal ID system.

Thank you. I want to just take a moment, too, to thank the panel

for your testimony. This has been not just a hearing for us to put

it into the record your testimony here but it has been also a hearing I think that has been very informative for this committee, and

I am absolutely convinced there isn’t anybody at this panel that

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doesn’t go back to Washington far better informed than they were

when we arrived. So thank you very much. Thank you, Mr. Chairman.

The CHAIRMAN. I thank the gentleman, and I agree with the gentleman’s observation. This panel has been very, very helpful. We

thank each and every one of you for your contribution and we are

now going to allow you step aside and we will go to the final phase

of our hearing which is to allow our audience to give some observations. And if you would like to speak, if you would like to address

the committee and you haven’t filled out one of these little cards

which we need to have our witness identification program, please

do so. And while you are doing that, you can just go up to the corner there and our staff member will be there.

We do have four people who have filled out the card and we will

start in the order that they did so, starting with Phil Wyrick, who

is the director of Livestock and Poultry in Arkansas, and I want

to recognize the gentleman from Arkansas to say a word in introduction.

Mr. ROSS. Arkansas is a huge agriculture State and don’t ask me

why but we don’t have a Department of Agriculture. So the Arkansas Livestock and Poultry Commission plays an important part of

that for our State, and Phil Wyrick is the executive director and

someone that I had the privilege to serve with in the Arkansas

State Senate, and, Phil, welcome.

The CHAIRMAN. Thank you. We would ask you, Mr. Wyrick, and

each of the other individuals to limit your comments to 2 minutes.

We have a timer set somewhere for that purpose, and the reason

is that we are going to have to move out of here in the not too distant future. So you get the first crack.

Mr. WYRICK. Thank you, Mr. Chairman, and it is good to see you,

Congressman Ross. Again, as Congressman Ross indicated in Arkansas we are one of the few States that does not have a Department of Agriculture; however, my responsibility is anything with

hair and feathers. So with that in mind, I will certainly convey

some of our interests.

Again, we would like to briefly thank the USDA for their work

and the work that they did on the BSE problem in December. I

think it is interesting to note that some 97 percent of the people

in the United States had some degree of understanding about BSE

or mad cow. I don’t think 97 percent of the people know who the

president of the United States is, so I think that is remarkable that

we did a great job as far as communicating. We understand also

that in today’s time and the era that we are in sometimes our trading partners spend more time getting their information from CNN

instead of the USDA, so I think they did a great job there.

Briefly, there are just three points. I have spent a great deal of

time, as Congressman Ross has, speaking to the people in our

State, and the people in our State, the cattle people, the average

herd is about 27 head. Certainly, they are all cow-calf producers.

They are very concerned about this, they have many questions.

One of the questions is security. People in agriculture in general

don’t necessarily like the Government in their business, and I

think that is another reason why they said, ‘‘What are you going

to do about the security of the information that you receive?’’ The

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second issue would be funding. We are concerned about unfunded

mandates. They are out there right now and they are talking, they

are saying, ‘‘Well, listen, I hear it could be everything from 5 cents

a head to $25 a head.’’ So there is a great deal of concern there.

Heading a State agency we recognize the information we are getting is that we are going to be responsible for a great deal of this

information gathering and certainly maintaining it. We are hoping

that the Federal Government recognizes that indeed we will need

some funding help.

And then, again, the third issue is simplicity. Listen, when you

get down to 27 head average, we don’t call a committee and say,

‘‘Look, let me speak to my supervisor of cattle management, we are

going to work cattle today.’’ What I do is I point to my daughter

over there and I say, ‘‘Can you take off today at school and help

me work some cattle?’’ We don’t have an abundance of labor. So,

certainly, realize that we in Arkansas and, again, like many southeastern States primarily deal with cow-calf operations, primarily

deal with, again, understaffing of labor and certainly a marginal

profit. With that in mind, I appreciate the opportunity to address

you. Thank you, gentlemen.

The CHAIRMAN. Thank you, Mr. Wyrick. Next we have Bob

McCan, president of the Texas and Southwestern Cattle Raisers.

He may have run out of interest before we did.

We now have Jodi Luttropp, the National FAIR coordinator, National FAIR Holstein Association USA.

Ms. LUTTROPP. Thank you, Mr. Chairman and committee members. My name is Jodi Luttropp and I am the coordinator for the

National Farm Animal Identification and Records Program. National FAIR is an RFID, animal ID and traceability system that is

in place and working today and can easily be utilized as a bovine

portion of the larger animal identification system. National FAIR

aims for and fulfills the standards proposed by the U.S. Animal

Identification Program, or USAIP.

The National FAIR Program provides each animal with a unique

identification number and uses electronic ear tags to identify and

track the animals. Similar to the Social Security number or a car’s

VIN number, the number stays with the animal for its lifetime. To

date we have a million animals using this number.

National FAIR was established as a pilot program by USDA in

1999 and we applaud their foresight for this effort. The mission

was to design, develop and demonstrate a pilot project for a national animal livestock identification program that will track livestock from farm to farm, farm to market and market to processing

unit. And we have accomplished this goal.

I would like to remind the committee that the $1.8 million in

Federal funds, taxpayer dollars, has already been spent on this

pilot project. Why do we want to reinvent the wheel at this stage

of this game? We are facing crisis in the cattle industry. Our cattle

producers need swift action to implement a national animal identification system today, and National FAIR is here to help. Also, substantial investment began 2 years ago when the USAIP was established to build consensus for and begin development of a national

animal identification system. By recording premises information

and tracking animal movement with electronic identification, we

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can do this in minutes. In addition to the structure of the National

FAIR’s system, it is dynamic and flexible while utilizing current

herd management software programs and on-farm systems. This

also allows for the inclusion of new technologies as they become

available.

We endorse the USAIP as a viable system for all production animals. With the development since December 23 and potential for

more disease incidents to occur, the timeline for implementation of

a system to check bovine movements could be shorter. As a part

of the USAIP, National FAIR stands ready today to meet the needs

of a mandatory national animal identification program to help protect our Nation’s food supply and minimize the risk associated with

future disease outbreaks.

In the last month, the awareness for the National FAIR Program

on a congressional level has grown tremendously. To enhance the

Department of Agriculture’s response to outbreaks of livestock disease, H.R. 3787 was introduced in the House by a group of representatives led by Congressman Collin Peterson and Congressman

Ross that provides full funding and data security needed, and we

urge your support of this initiative. Thank you .

The CHAIRMAN. Thank you very much. The last one I have a card

on so far is Rosemary Mucklow, executive director, National Meat

Association.

Ms. MUCKLOW. There is a chance I can get up there. [Laughter.]

Oh, here is some technical help. Thank you. Thank you very

much. I have got a couple of messages for you today, and I appreciate being today. I am the director of the ICF Board, and I appreciate what Gary Smith brought to you today.

My messages are that as the executive director of National Meat

Association, I represent people who are survivors of mandatory

price reporting. I know a lot of you didn’t like that legislation that

came from the other place back there, the consequences of which

reminds me of what Congressman Stenholm said to you, ‘‘Be careful what you wish for, you just might get it.’’ That has been a very,

very harsh rule. We are not here to talk about it today, but it has

been a very, very tough and costly rule on American meat slaughterers and processors who were subjected to it. So I urge your

thoughtful consideration that one of the biggest problems with that

law it was so prescriptive. So if you are going to do something on

an ID system, try not to be too prescriptive and certainly prevent

the people in the other house from being too prescriptive.

The other message I would leave with you is that I represent an

industry that is bombarded under the Freedom of Information Act,

and these bombarded requests are designed to invade company information often for purposes that are not merely unjustified but

may sometimes be unlawful. You are very right to be concerned,

and the entire breadth of this industry has every right to be very

concerned about their data being used for at least unjustified if not

unlawful purposes. And I am strongly interested and my industry

is strongly interested in that issue, and I am grateful I can’t talk

to you any longer because I have got a plane to catch too. Thank

you very much.

The CHAIRMAN. We appreciate your frankness. Well, we promised

you we would end this hearing before 2 o’clock and we are going

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to do that with at least a minute to spare. I want to again thank

the Houston Livestock Show and Rodeo, Dan Gattis and all of the

folks, the many, many volunteers who helped us get around yesterday and today, for all of the work that has been done to make this

hearing possible. I think all will agree that the testimony and discussion we have had during this hearing underscores my own view

that we still have a lot of work to do to ensure that animal identification proves to be an asset to producers and not a liability. Having said that, we need to get about that as quickly as possible. I

look forward to the future hearings of the House Agriculture Committee as we examine this important topic in greater detail. With

that, this hearing is adjourned.

[Whereupon, at 2:00 p.m., the committee was adjourned.]

[Material submitted for inclusion in the record follows:]

STATEMENT OF CHARLES BECKENDORF

Mr. Chairman, my name is Charles Beckendorf. I am a fourth generation dairy

farmer from Tomball, Texas, where I operate a 250 cow dairy on a 350-acre intensive grazing operation. I serve as chairman of the board of the National Milk Producers Federation (NMPF) and on the Corporate Board of Directors of Dairy Farmers of America. I appreciate the opportunity to present testimony here today on the

important subject of Animal Identification.

NMPF, headquartered in Arlington, VA, develops and carries out policies that advance the well-being of U.S. dairy producers and the cooperatives they collectively

own. The members of NMPF’s 32 cooperatives produce the majority of the U.S. milk

supply, making NMPF the voice of 60,000 dairy producers on Capitol Hill and with

government agencies. As members of NMPF, we join together to better assure that

our government in Washington, DC will understand and recognize those economic,

legislative, and regulatory issues that most impact our livelihoods and communities

back home.

The need for a uniform national animal identification program in the United

States is urgent. As the recent discovery of Bovine Spongiform Encephalopathy in

Washington clearly illustrates, it is absolutely critical to be able to rapidly track and

verify all animal movements associated with all birth cohorts of an infected BSE

animal, including their offspring. —I am sure we have not seen or felt all the ramifications of this one cow that stole Christmas!— One thing we can now say for certain, BSE is no longer just a foreign animal disease to the U.S. Another thing we

can say for certain is that we do not have a workable uniform national animal identification and tracking plan in place in the U.S. to address any future disease outbreaks. Until we do, as producers, we must constantly live in the fear of a potential

outbreak of a foreign animal disease or emerging animal disease in the U.S. that

could devastate our herds, our markets, and our national security.

In the case of a foot-and-mouth disease outbreak, it is even more critical to be

able to quickly track, both forward and backward, all animal movements associated

with all potential sources of infection. This is imperative regardless of whether the

disease was introduced naturally or intentionally.

The U.S. needs a uniform system that establishes minimum standards for identifying all physical locations or premises where individual animals and groups of animals are routinely raised, and animal lots are located. In addition, the U.S. needs

uniform minimum standards for the identification of individual animals, groups of

animals, or animal lots. Lastly, a uniform, nationally-organized system for reporting

and storing the specific information required for tracking animal movements between premises is necessary. Without these, it becomes impossible to quickly respond to an animal health emergency and avert many potential negative public and

marketplace consequences.

NMPF recognizes the advantages of implementing a uniform national animal

identification system as envisioned under the U.S. Animal Identification Plan. This

plan has become widely recognized within the livestock industry under the acronym

of ‘‘USAIP’’. For the past 2 years, more than 70 national livestock organizations, and

approximately 400 producers and experts representing these organizations, have labored to develop USAIP as a national umbrella operating plan. Under this plan, all

species of food animals—from cattle to fish—can be properly identified and tracked

for both disease surveillance and emergency management purposes.

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A Number of different species working groups are being organized under USAIP

to develop final implementation plans for introduction of USAIP into their respective industries. The Dairy Species Working Group is now in the process of finalizing

details for implementation of USAIP in the U.S. dairy industry. Dairy and beef cattle interests will soon come together to formulate overall cattle industry recommendations for implementation of USAIP within the entire cattle industry sector.

Likewise, both the pork and small ruminant industries, such as sheep and goats,

are working to establish final recommendations for implementation of USAIP in

their respective industries.

A significant concern of dairy producers is the imperative to maintain confidentiality of the animal identification and tracking information that would need to be

stored in a central database under USAIP. This information may be limited to

premises identification numbers, individual animal numbers, group numbers, animal lot identification numbers, and dates and locations of movement events. It is

important that this information is maintained as confidential business information.

When such information is combined into one central data base, it could be misused

by those who have motivation to do harm to livestock producers. NMPF recommends

that every effort be made to restrict public access to any data gathered. Limited access can be provided to only those state or Federal Government officials who need

to conduct animal disease surveillance or to track animal movements in the event

of an animal health emergency.

With a broad base of producer and livestock marketing support, USAIP has been

developed as a model national animal identification and tracking plan driven by industry needs and expectations that we believe are both realistic and achievable. An

effort is being made to keep USAIP technology neutral, so each species may select

and adopt the technology which works best in their respective industries. A timeframe has been established under USAIP to begin to track the movement of cattle,

swine, and sheep in both intrastate and interstate commerce. NMPF believes that

this should be initiated as soon as possible, but recognizes that the process of

achieving a successful animal identification program covering all species will be

complex and lengthy.

To allow the process to get started, the USAIP operational model should now be

implemented without further delay. Congress can help facilitate this implementation process by recognizing USAIP as the system of animal identification and tracking, providing the necessary financial support, and providing for confidentiality of

information that will be necessary to assure producer acceptance of any national

animal identification plan. This implementation effort must also become a cooperative effort between industry and government at all levels if the public is to be protected.

Animal agriculture at the farm level is a $100 billion industry. Preventing the introduction of foreign animal diseases that could greatly disrupt our national economy is of paramount importance to overall public confidence in our food supply.

Therefore, the public must share a substantial portion of the upfront costs associated with the introduction of a workable and sustainable national animal identification and tracking plan. USAIP, if properly implemented, can become the foundation

for monitoring and surveillance for many zoonotic diseases. A national laboratory

surveillance system cannot be effective until a workable and uniform national animal identification plan is implemented. Foreign consumers won’t embrace our products until they have confidence that a uniform national U.S. animal identification

plan is implemented and demonstrated to work. This is a major but essential undertaking for the national benefit. Congress can assist by addressing the substantial

costs that become associated with building an infrastructure necessary to identify

and track all livestock movements in the U.S. on a sustainable basis. It is important

to remember that producers must supply the labor and time essential to make any

national animal identification system work. It is equally important for the infrastructure associated with getting any new national program implemented to be in

place as soon as possible.

Mr. Chairman, I appreciate the opportunity to present this testimony today in

front of your distinguished Committee on behalf of NMPF and many dairy producers

across the U.S. We appreciate you taking the time to come to the great State of

Texas to conduct these important hearings on a most important issue. We appreciate all you have done on behalf of animal agriculture and the U.S. dairy industry,

and we look forward to working closely with you to begin the prompt implementation of a workable and producer friendly national animal identification system as

envisioned under USAIP.

I would be happy to address any questions you may have. Thank you.

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STATEMENT OF SCOTT CHARBO

Mr. Chairman and members of the committee, thank you for the opportunity to

participate in this hearing on a national animal identification system. I am accompanied by Dr. Jim Butler, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services; Nancy Bryson, USDA General Counsel; and Dr. Keith Collins,

USDA Chief Economist. Our group was asked by Secretary Veneman to provide recommendations on how to proceed with implementing a national animal identification program. Today, I would like to discuss the purpose and benefits of a national

animal identification system, provide an overview of the current status of animal

identification systems and present USDA’s plan for implementation of a national

identification system.

BACKGROUND ON ANIMAL IDENTIFICATION SYSTEMS

The advent of increased animal disease outbreaks around the globe over the past

decade, especially the recent BSE-positive cow found in Washington State, have intensified the public interest in developing a national animal identification program

for the purpose of protecting animal health.

Livestock identification was first used to indicate ownership and deter theft.

Then, in the early 1960’s, USDA’s Animal and Plant Health Inspection Services

(APHIS) began using tags, tattoos, and brands to meet statutory regulations to trace

the movements of animals during disease outbreaks and for eradication programs.

Today, the purpose of animal identification systems remains primarily to address

veterinary and animal health issues. Most individuals associated with livestock recognize that early identification of animal disease can contain and reduce the costs

associated with a disease outbreak. Other benefits of a national animal identification system in addition to animal health include facilitating value-added production

and marketing programs. However, it is important to point out that no animal identification program by itself will prevent an introduction of animal disease, ensure

safe food or prevent a recall.

U.S. programs. While there is currently no nationwide animal identification system in the United States for all animals of a given species, some segments of certain

species are required to be identified as part of current program disease eradication

activities. In addition, some significant regional voluntary identification programs

are in place, and others are currently being developed and tested. Over the past several years, USDA has supported several state or state sponsored animal identification programs. For example, either through cooperative agreements or research

grants, APHIS and the Cooperative State Research, Education, and Extension Service (CSREES) have funded projects in Alabama, Iowa, Kansas, Michigan, Montana,

New Mexico, Texas, Utah, and Wisconsin. In addition, a number of states have contacted USDA and expressed interest in developing and testing animal identification

systems.

The investments made by USDA in identification projects as well as private sector

investments in these and other projects have generated data and experience that

provide a platform on which to build a national system. As an example, the National

Farm Animal Identification and Records (FAIR) Program is an animal identification

program supported by the USDA’s APHIS and the Holstein Association USA, Incorporated, a non-profit breed registry organization led by dairy producers. Administered by the Holstein Association, FAIR provides the infrastructure and information

system that allows for both premises of origin determination and animal tracking

through two unique numbers. The first number is a premises number with a unique

number assigned to each production unit for participating premises. The second

number is an animal number, which uses the American Identification Numbering

(AIN) System to assign an official number for each animal. FAIR uses either a visible or an electronic identification tag to track animals from farm to market, and

market to slaughter. As of February 25, 2004, almost 8,200 farms were participating

in FAIR. Of this total, 1,500 farms had animals with electronic identification tags.

While FAIR is a national program, over 80 percent of the farms with enrolled animals and over 90 percent farms with animals using electronic identification tags are

in Michigan.

Another example is the State of Michigan, which launched an Electronic Identification (EID) Program as a pilot project in November 2001 as part of the State’s

bovine tuberculosis (TB) eradication plan. The program was developed and implemented through a cooperative agreement from APHIS. EID uses a tag imbedded

with a radio frequency identification device (RFID) and marked with a unique, individual number that will not be duplicated. The project made tags available to producers at no charge in the Northeast Lower Peninsula or those with accredited

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herds. As of 2002, 432 herds, representing 17,000 individual animals, had been TB

tested and tagged with RFID tags. Each RFID tag is linked to a database that includes information specific to that animal, including date of birth, sex, and type/species. EID is also tied to the FAIR Program to ensure accurate individual animal

identification, tracking and coordination of TB test results and herd status.

APHIS also provided funding for the Wisconsin Livestock Identification Consortium initiative, an industry managed and controlled information system. The Consortium’s program, the Animal Identification and Information System, commonly referred to as A-II, was designed in collaboration with the Wisconsin Department of

Agriculture, Trade and Consumer Protection and USDA. The goals of the Wisconsin

livestock identification project are to: produce a fully operational, scalable livestock

identification and—information system; provide the basis for an system to cover all

major livestock—species; support a national system through compatible regionalized

data systems in partnership with added-value service providers; demonstrate the

feasibility of providing a new service integral to obtaining value from identity-preserved livestock products; provide information on how to enhance the marketing of

livestock—products; and serve as a model for public/private partnerships that serve

both the producer’s added-value programs and that of the regulatory agencies.

In addition to programs directly funded by USDA, a more comprehensive U.S. animal identification plan has been developed by an industry-state-Federal partnership

including more than 100 animal industry and state and Federal Government professionals representing more than 70 associations. This plan is the United States Animal Identification Plan (USAIP). While implementation details of the plan are still

being worked on, the USAIP describes an information system and infrastructure to

enable the identification of all animals and premises potentially exposed to an animal with a disease of concern within 48 hours. .

The USAIP identifies four key data elements that require standards: (1) a uniform

premise identification system; (2) a uniform and nationally recognized individual

animal identification numbering system; (3) a uniform and nationally recognized

numbering system for groups or lots of animals; and (4) a uniform numbering system for non-producer participants (such as tag distributors, animal health officials,

laboratories, processing plants).

Under USAIP, the information system uses identification of each premise and the

recording of U.S. Animal Identification Numbers and U.S. Group/Lot Identification

Numbers. USAIP then associates the animal ID data to each premises where the

animals or group are located and the specific dates an animal was at a location.

Species specific working groups are currently working within the framework of the

USAIP to develop animal identification implementation details for: bison, beef cattle, dairy cattle, swine, sheep, goats, camelids (alpacas and llamas), horses, cervids

(deer and elk), poultry, and aquaculture. While USAIP suggests the potential use

of alternative technologies to identify animals if appropriate standards are established, the focus is to foster the adoption of national standards for the use of RFID

devices in animals.

Governance of USAIP is planned as a joint Federal/state responsibility with oversight and input from industry. For example, State governments would maintain a

state premises database system, submit premises data to a national premises repository, maintain intrastate animal movement database, and report interstate movement to an national identification database. The USDA would allocate U.S. Animal

Identification Numbers, administer the national premises repository, including the

allocation of premises numbers, and administer the national animal identification

database. In addition, APHIS and individual state animal health entities would ensure uniformity of operation across the United States. The USAIP notes that costs

would be substantial and recommends both public/private funding to cover the cost

of the program.

The United States is not alone in developing animal identification systems. Most

developed countries have either already adopted or are planning to adopt some system to identify and trace the movement of livestock within their borders.

EU experience. The European Union (EU) has adopted the most comprehensive

program of animal identification and tracking. Under EU rules, the basic objective

of animal identification and tracking is to control infectious diseases. However, different identification and registration systems apply to different types of livestock.

Depending on the individual needs of the different species, those systems include

several elements like identifiers, registers, or passports.

Illustrative of the EU system is the current system operating in the United Kingdom (UK) for cattle. The British Cattle Movement Service (BCMS) is the agency

that is responsible for cattle tracing for Great Britain. The four elements of the cattle identification and registration system are: tagging (cattle must have a unique

number); farm records (records of cattle births, imports, movements and deaths);

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passports (recording where cattle have been throughout their lives); and inclusion

in the cattle trace scheme (CTS).

CTS records the identification and death of cattle, the movements from birth to

death of cattle issued with passports (since 1998), and the movements of older cattle

(since 2001). However, electronic tagging of cattle is not compulsory within the EU

or UK. The Government plans to recover the costs of running the CTS from industry

beginning April 2004 at the earliest.

Other animals in the UK are not part of the CTS but must be identified. For example, pigs under 1 year of age moving direct to slaughter and pigs over 1 year of

age moving to any destination must be identified with a slap mark on each shoulder

area of the pig. Sheep are also required to be identified and the UK’s Department

of Environment, Food and Rural Affairs intends to run a pilot to test the effectiveness of electronic tracing in a real time environment within the sheep industry. The

pilot was set to begin in December 2003 and run through December 2004 with a

report due February 2005.

Canadian experience. The Canadian Cattle Identification Program is an industryled initiative to promote beef consumption through assurance of efficient traceback

and containment of serious animal health and food safety problems. The program

is administered by the non-governmental Canadian Cattle Identification Agency

(CCIA), which is led by a Board of Directors made up of representatives from all

sectors of the cattle industry and the government. The program is regulated and enforced by the Canadian Food Inspection Agency (CFIA). In the event of a health or

safety issue, the CFIA is given access by the CCIA to the record of the herd of origin.

Unlike the UK program, there is no requirement that cattle movements be identified from birth to death. Rather, under the Canadian program, a unique national

identification ear tag is applied by the time an animal leaves the herd of origin.

Currently there are 29 approved tag options for use in the Canadian Cattle Identification Program (including 27 bar-coded plastic dangle tags and two electronic button tags). However, on January 1, 2005, the CCIA is moving to electronic tags (radio

frequency). The program applies to all bovine and bison animals.

Canada also implemented a Canadian Sheep Identification Program on January

1, 2004. This program is also an industry-led initiative (Canadian Sheep Federation). Under this program, producers must apply an approved national ID ear tag

(bar-coded tags are not required) to all lambs born on their premises before they

leave the farm, and to ensure that all ovine animals bear an approved tag before

they leave the premises. Unlike the cattle program, the sheep program requires

sheep producers to keep records of the movement of animals. This decision was

made mainly to keep costs low for producers by not requiring bar-coded tags.

Australian experience. Australia has also developed a National Livestock Identification Scheme (NLIS) for identifying and tracing livestock. The NLIS uses machine-readable RFIDs. NLIS approved devices come in the form of an ear tag or

rumen bolus/ear tag combination. Cattle identified with NLIS devices can be electronically read as they move through the livestock chain. At time of reading, each

owner’s property identification code, similar to the premises ID proposed in the US

system, can be recorded and linked to the NLIS device. This transaction information

is then stored in the secure central NLIS database. While the program is voluntary,

all state and territory governments, together with industry, have agreed to aim for

the introduction of the NLIS by July 1, 2004. State governments underpin NLIS

with legislation governing the use of NLIS devices and some states specify penalties

for misuse. Australia also has developed a voluntary National Flock Identification

Scheme (NFIS) for the permanent identification of sheep and lambs. NFIS relies on

visually readable ear tags printed with property identification codes and do not contain a RFID. It is the aim of all state and territory governments to introduce the

NFIS by July 1, 2005.

In addition to animal health, another reason Australia opted for NLIS is to facilitate access to European market. To supply to the EU, a producer must be accredited

under the government’s European Union Cattle Accreditation Scheme (EUCAS). Accreditation requires a series of conditions to be met relating to the eligibility of cattle, the introduction of cattle, and the use of Hormonal Growth Promotants. In addition, producers must use NLIS tags or rumen boluses and interact with the NLIS

database to provide full and accurate records of the status and location of their EU

accredited cattle.

Lessons learned. There are a number of important lessons that have been learned

from the work that has been ongoing both within the United States and the rest

of the world.

First, it is critically important to get support from industry as we shape an animal identification system for the United States. It is clear from experiences from

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across the United States and in other countries that producers recognize the need

for and are willing to help in designing an appropriate animal identification system.

Second, there is no ‘‘one size fits all’’ technology. It is likely that some technologies

will work better for some species than for others. Rather than focus on a specific

technology, we should focus on the design of the identification system. What information should be collected and when should it be collected? Once the identification

system is designed, the market will determine which technologies will be the most

appropriate to meet the needs of the system.

Third, both public and private funding will be required for any system to become

fully operational. Databases must be maintained, programs must be monitored, and

equipment must be purchased. Most countries receive support from their governments in developing and maintaining their identification systems.

ISSUES TO CONSIDER IN SCALING TO A NATIONAL SYSTEM

We believe that in designing a U.S. system important factors to consider are the

diversity and complexity of our animal industries and the lack of experience with

animal identification for a large number of U.S. producers. This extreme diversity

and complexity makes immediate scaling up of current projects that have been funded by USDA difficult if not impossible until a thorough evaluation of those projects

for potential use on a national scale and for a significantly broader scope than initially tested can be conducted. While many dairy producers use individual animal

identification for production management purposes, there were 95 million cattle and

calves in the United State on January 1, 2004, and only 9.0 million were dairy cows.

The number of cattle and calves far exceeds those in the U.S. pilot programs and

identified in the foreign country ID systems that were described earlier. Although

cattle production varies regionally, cattle and calves are produced in every State.

Texas ranks as the Nation’s leading producer of cattle and calves with 14 million

head on January 1, 2004. Other States ranking among the top 5 cattle and calf producing States include: Kansas (6.65 million head), Nebraska (6.25 million head),

California (5.2 million head), and Oklahoma (5.1 million head). One-third of all cattle and calves on January 1, 2004, were located in the top 5 producing States.

Of the 95 million head of cattle and calves in the United States on January 1,

2004, a total of nearly 14 million head of cattle and calves were on feed in feeding

operations on January 1, 2004. In 2003, nearly 38 million head of calves were born,

which would determine the number of new individual cattle identification numbers,

along with cattle imports, that would have to be issued each year when the program

is fully implemented. Some of these animals die on farms. About 4 million head of

cattle and calves were estimated to die due to disease, predators, and other causes

in 2003.

Imported animals would also require identification. In 2002, 21⁄2 million head of

cattle and calves were imported into the United States. Imports from Canada accounted for two-thirds of total imports in 2002 and the remaining one-third were

imported from Mexico. The finding of BSE in a cow in Canada on May 20, 2003 resulted in a ban on imports of cattle, calves, and beef from Canada. On August 8,

2003, USDA announced conditions for resuming imports of certain beef products

from Canada. Imports of cattle and calves from Canada continue to be restricted.

Reflecting this restriction, U.S. imports of cattle and calves dropped to 1.5 million

head during the first 11 months of 2003, with Mexico comprising about two-thirds

of all imports. Our national animal identification system should be compatible with

foreign systems to allow for tracking to the export country, so that their identification system could be utilized as well in an animal health emergency.

An identification system would also account for exports and the United States exported nearly 450,000 head of cattle and calves in 2001, with about two-thirds of

all exports going to Canada and about one-third going to Mexico. Over the past two

years, the U.S. supply of feeder cattle has tightened and exports of cattle and calves

have fallen off sharply. In 2002, U.S. exports of cattle and calves dropped to 244,000

head and declined to 94,000 head through the first 11 months of 2003. The confirmation of a BSE in Washington State on December 23, 2003 has caused importing

countries to restrict the importation of cattle and calves and beef products from the

United States.

The complexity of implementing an identification system is also evidenced by the

existence of 1.03 million cattle and calf producers located in all 50 States in 2003,

with about 0.9 million cow-calf producers. Three-fifths of U.S. cattle producers had

fewer than 50 head and 99 percent had fewer than 1,000 head. Fifteen percent of

all cattle and calf producers are located in Texas. Only two other States had more

than 50,000 cattle and calf producers in 2003 Oklahoma and Missouri. Thirty-four

States have more than 10,000 producers.

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The national identification system must also accommodate the Nation’s 95,189

cattle feeding operations that operated in 2002. Ninety-eight percent of these

feedlots have less than 1,000 head capacity and are primarily located in the Corn

Belt. On average, feedlots with less than 1,000 head capacity marketed about 40

head per year. The 2,189 feedlots with capacity of 1,000 head or more accounted for

over 86 percent of all cattle marketed from feedlots in the United States in 2002.

The U.S. hog industry is also interested in participating in a national system at

the outset. This industry, too, presents a challenge due to its size and complexity.

The U.S. had 60.0 million hogs on December 1, 2003. In 2003, 100.4 million head

were born, about 7 million head were estimated to die due to disease, predators, and

other causes and 100 million head of hogs were slaughtered. Hogs are produced in

every State. Iowa ranks as the Nation’s leading producer of hogs with 15.8 million

head on December 1, 2003. Other States ranking among the top 5 hog producing

States include: North Carolina (9.9 million head), Minnesota (6.4 million head), Illinois (4.0 million head), and Indiana (3.1 million head). Nearly two-thirds of all hogs

on December 1, 2003 were located in the top 5 producing States.

In 2003, 7.1 million head of hogs were imported into the United States essentially

all of which were imported from Canada. The United States is not a major hog exporter.

In 2002, there were 75,350 hog producers located in all 50 States. Two-fifths of

these producers had fewer than 99 head and 57 percent had fewer than 500 head.

In contrast, 0.1 percent (110 operations) of hog producers had 50,000 or more head.

These large producers accounted for nearly 50 percent of all hogs marketed in 2002.

Thirteen percent of all hog producers are located in Iowa followed by Minnesota

with 8 percent and Illinois with 6 percent.

The U.S. sheep industry is another priority species for participation in a national

identification system. On January 1, 2004, there were 6.1 million head of sheep and

lambs on farms. The 2003 lamb crop was 4.1 million head in 2003, which was a

new record low. In 2002, 3.4 million head of sheep and lambs were slaughtered in

the United States. The number of sheep and lambs has trended downward since

peaking at 56.2 million head in 1942. Sheep and lambs are produced in nearly every

State. Texas ranks as the Nation’s leading sheep and lamb producer with inventory

of 1.1 million head on January 1, 2004. The other top 5 States include California

(0.7 million head), Wyoming (0.4 million head), South Dakota (0.4 million head), and

Colorado (0.4 million head).

In 2002, there were 64,170 sheep and lamb producers. About 10 percent or 6,800

sheep and lamb producers were located in Texas in 2002 and another 4,600 producers were located in Iowa. Other States with over 3,000 sheep and lamb producers

in 2002 included Ohio and Oregon.

In addition to the diversity and complexity of the U.S. livestock industries, there

are many nonproducers that must participate in a national identification system.

For example, there were 3,233 U.S. livestock slaughter plants in 2003, of which 879

were under Federal inspection. Most of these plants slaughter fewer than 1,000

head annually. Three-fourths of the cattle slaughter plants, nearly two thirds of the

hog slaughter plants, and 85 percent of the sheep and lamb slaughter plants slaughtered fewer than 1,000 head of each species and these plants accounted for less than

1 percent of total slaughter. In contrast, the federally inspected plants that slaughtered over 1 million head of each species accounted for over 50 percent of total cattle

slaughter and 88 percent of hog slaughter in 2002.

USDA also estimates there are 7,775 posted stockyards, bonded dealers and market agencies involved in the buying, selling, and marketing of livestock in the

United States, and many of these would have to report in a national identification

system that kept track of animal movement. Some of these stockyards, dealers, and

market agencies may deal exclusively with species other than cattle and calves.

In addition to the large numbers of animals, producers and nonproducers that

must be accounted for in a national system, there is also a decided lack of experience with individual animal identification in the United States, and where it exists,

the systems used are quite diverse. A large number of producers, especially cow-calf

operators, do not currently individually identify their animals. Thus, a major component of implementing a national system will be educating livestock producers and

processors as to how the system would operate and their responsibilities.

Under a national animal identification system, producers and processors would be

responsible for registering animals and recording their movement over an animal’s

lifespan. It is envisioned that each animal would be identified, and its movements

would be catalogued through time. Producers, marketers and livestock processors

would have to be educated on the premise and livestock numbering systems, the

technologies for recording an animal’s movements, and other aspects of the program.

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To meet the educational needs of livestock producers and processors, USDA will

need to work in concert with States, organizations, and other stakeholders.

Another issue is the authority of USDA to implement a national identification system. The Animal Health Protection Act (AHPA) was enacted to enable the Secretary

of Agriculture to prevent, detect, control, and eradicate diseases and pests of animals in order to protect animal health, the health and welfare of people, economic

interests of livestock and related industries, the environment, and interstate and

foreign commerce in animals and other articles. The AHPA gives the Secretary a

broad range of authorities. The Secretary is specifically authorized to carry out operations and measures to detect, control, or eradicate any livestock pest or disease.

The Secretary may also prohibit or restrict the importation, entry, or interstate

movement of any animal, article, or means of conveyance to prevent the introduction

into or dissemination within the United States of any livestock pest or disease. The

Secretary also has authority to cooperate with other Federal agencies, States, or political subdivisions of States, national or local governments of foreign countries, domestic or international organizations or associations, Indian tribes and other persons for the purpose of detecting, controlling, preventing, or eradicating any livestock pest or disease.

A system of animal identification could facilitate the detection, prevention, control, and eradication of pests and diseases of livestock. We believe the provisions of

the AHPA authorizing the Secretary to carry out operations and measures to detect,

control, or eradicate livestock pests or disease provide the Secretary with ample authority to establish and implement either a mandatory or voluntary system of animal identification. Also, the AHPA enables the Secretary to enter into agreements

with States or other stakeholder organizations to implement either a mandatory or

voluntary animal identification program.

A national animal identification system would provide information on animal

numbers by location and the movement of those animals over their lifespan. The

potential disclosure of individual producer and processing plant information gives

rise to concerns about the accessibility and the confidentiality of the individual

records contained in a national animal identification database. Under the Freedom

of Information Act, agency records are accessible to the public. However, agency information contained in a database that would reveal confidential business information is not accessible to the public under the Freedom of Information Act. Another

concern is whether Federal agencies could access information in the national animal

identification database for their program purposes.

Uncertainty over the confidentiality and accessibility of information in a national

animal identification database may cause some livestock producers and processors

to delay participation in a national animal identification system until these issues

have been resolved. Federal legislation addressing the confidentiality and accessibility of information in a national animal identification database may be needed to address the concerns of livestock producers and processors and expedite the implementation of a national animal identification system.

USDA’S GOAL FOR A NATIONAL ANIMAL IDENTIFICATION SYSTEM

Our goal is to create an effective, uniform, consistent, and efficient national system. We believe this goal can be achieved by adhering to several key objectives.

First, the system should allow producers, to the extent possible, the flexibility to

use current systems or adopt new ones. Producers should not be burdened with multiple identification numbers, systems, or requirements.

Second, this flexibility can best be achieved by having a system that is technology

neutral, so that all existing forms of effective technologies and new forms of technologies that may be developed in the future may be utilized. In this regard, we

also expect successful pilot programs, particularly those USDA has funded to date,

will play an important role in scaling up during the transition period to a full national program.

Third, the national identification system should use and build upon the excellent

data standards developed by the USAIP. Provisions to ensure data confidentiality

are an essential part of this objective.

Fourth, the system must not preclude producers from being able to use it with

production management systems that respond to market incentives. We want a system that will be compatible with the alternative management programs now being

used to improve animal health and quality.

Fifth, the architecture for the national identification system must be designed so

that the system does not unduly increase the role and size of the government. The

President’s budget proposal for fiscal year 2005 requests $33 million to fund that

year’s activities for system implementation. No funds have been appropriated for fisVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00081 Fmt 6633 Sfmt 6633 F:\DOCS\10824 HAGRI PsN: HAGRI
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cal year 2004. Since we plan to initiate implementation during fiscal year 2004, we

are considering alternative methods of funding.

PHASED IMPLEMENTATION PLAN FOR A U.S. SYSTEM

USDA plans to move forward with implementation of a national animal identification system in 2004, first on a voluntary basis, and eventually with a requirement

for premises and individual identification for all animals. Although we are still developing our specific timeline for implementation and deciding on a funding mechanism, we can provide some preliminary and general indications of activities for

2004. Our implementation would begin with an assessment this winter and spring

of the existing premises and animal number allocation systems now in use. This review would identify, validate and verify the capabilities of current systems in operation and determine the capacity of any of these systems to serve as a national

premises and animal number allocator and repository. Based on that review, we

would select the most promising infrastructure to fund to develop the national

premises allocation number and repository system and an animal identification allocation number and repository system.

Our first priority is to get the national premises allocator and repository in place

in fiscal year 2004 and begin allocating premise identification numbers to cooperating states, tribes and certain other entities that are ready to register premises. We

would envision providing some funding through cooperative agreements to states,

tribes and the other entities so that they could develop the capacity to interface with

the national number allocators and repositories. Once cooperators have integrated

with the national systems and premises are being registered, we would be in position to issue animal identification numbers to producers through these early cooperators.

The technologies used by producers and nonproducers to identify and track movements of animals would be worked out through the cooperative agreements with the

input of states, animal health officials, producers, and industry; USDA plans to be

technology neutral. Our interests are in setting information standards, developing

a database system to which states and other entities can readily connect, and receiving data from these entities. At this point, we do not envision any significant Federal funding being used for individual animal tags or other such devices, however,

funding of select electronic readers could be accommodated under the agreements

with some cooperators. We envision third party premises allocation would be coordinated with the state animal health official for the state in which the premises is

being allocated.

Starting in fiscal year 2004, we would also focus on identifying and qualifying

third parities, such as private industry and trade associations, that have identification products or programs, so they could be integrated into the national system. In

early fiscal year 2005, we would then be in a position to issue premise and animal

identification numbers to third parties and to begin receiving information from third

parties into the system.

Many issues must be resolved before we can accomplish the tasks just identified

for 2004 and beyond. We look forward to working with the Nation’s producers, industry, animal health officials, state governments, the USAIP Steering Committee

and the Congress to successfully achieve a national animal identification system.

Thank you and we would be pleased to respond to any questions you may have.

STATEMENT OF A.H. ‘‘CHICO’’ DENIS, III

Mr. Chairman and members of the committee, on behalf of the nation’s sheep industry, I greatly appreciate your leadership in conducting this hearing regarding development of an Animal Identification Program.

I am a lamb producer, feeder and currently serve as first vice-president of the

Texas Sheep & Goat Raisers Association. I am also chairman of the board of Rancher’s Lamb of Texas. Rancher’s Lamb is a lamb slaughter company in San Angelo,

Texas, formed in 1996 by sheep producers. Rancher’s Lamb is one of the primary

lamb slaughter and lamb meat distribution companies in the United States and located in the largest sheep producing state in the nation.

Livestock Identification was among the most thoroughly discussed topics at our

national board of directors meeting in late January 2004. ASI has been involved

with the USAIP since initiation and intends to provide a sheep specific ID plan to

USDA APHIS this spring. Our industry has a national animal health program in

place that includes a mandatory identification system, namely the Scrapie Eradication Program. We have over 50,000 sheep operations nationwide already enrolled

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with premise identification and millions of identification tags distributed. This program implemented by regulation in August of 2001 provides the basis for our view

and we believe a model for fitting the sheep industry into a national animal ID system.

I believe the policy approved by our board of directors last month best speaks to

the points important to our industry on identification. It is as follows:

ASI endorses the concept of a mandatory national identification program for livestock as outlined by the USAIP Development team, Department of Homeland Security and U.S. Department of Agriculture.

ASI believes that formal rule making on the implementation of a national livestock identification system should include the following and begin immediately in

order to communicate and clarify USDA’s and other government and animal health

regulatory agency needs, requirements and timelines:

The cost of identification supplies and devices should be provided by the public

sector.

Implementation of a National ID System for livestock in the sheep sector should

not be duplicative of the National Scrapie Eradication Program ID requirements

and a seamless transition to another system should be planned and announced well

ahead of the time with supplies available through well organized distribution channels.

A National ID System for sheep should accommodate all the various production

systems in the U.S. including group movement of owned animals for management

purposes as well as movement through feeder and slaughter channels. A readily

visible means of identification must be included in a sheep identification system.

A National ID System should contribute to the management, marketing and business needs of the U.S. sheep industry.

A national ID system for sheep should be thoroughly field tested before implementation to demonstrate the technology is compatible with normal industry operations.

Implementation of this system should not economically burden any sector of the

U.S. sheep industry.

The system, regardless of the species, ought to be thoroughly reviewed and field

tested prior to implementation. This includes the database function which needs to

be provided and maintained by the Federal Government. The overall identification

system should be integrated between Federal and state government with industry

partners including but not limited to producers, auction markets and processors.

As we see it, the database and tracking functions are both essential, in order to

make an overall system effective, but also likely the most difficult to implement. We

feel that a premises identification that is tied to the headquarters of an operation

is key. A great percentage of the sheep in the U.S. graze large expanses of land,

some private and some public, and may cross two or more State boundaries during

the year.

Again, using the ranch headquarters on the flock as the premises identifier (just

as it is currently in the scrapie regulation) should serve as adequate identification

for a database requirement and provide practical tracking/traceability.

As a point to reiterate, the cost of the individual identification device and its ap- plication per unit of value for a lamb is certainly different than for a steer. A $1

tag along with the cost to apply it on a $125 lamb is considerably more expensive

that on a market steer worth many times more in value.

An additional item that is weighing heavily in our sheep ID discussions is the

need to identify sheep and lambs by lot or group similar to our feeder and slaughter

lambs today under our Scrapie Eradication program requirements. Such a system

makes more sense when hundreds of lambs per truckload are moving together

through the feedlot and packing plant.

Key issues that I believe must be addressed by the sheep ID group include procedures for lost tags, compatibility of all ID tags and associated equipment on a national basis, and privacy of data collected by in a national animal identification program.

I appreciate this opportunity to discuss the priorities of the sheep industry on this

important and somewhat controversial topic. I encourage the committee and USDA

to continue to draw on the expertise of the industry in designing and implementing

a workable program.

STATEMENT OF JOY PHILIPPI

I am Joy Philippi, a pork producer from Brunning, Nebraska. I also currently

serve on the National Pork Producers Council Board of Directors. I own and operate

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a 2,000 head nursery, which handles approximately 14,000 head of weaned to feeder

age pigs per year for our local producer network.

I would like to thank the Chairman for scheduling this field hearing on such an

important issue. In recent months it has become clear that the issue of a U.S. national animal identification system has become of increasingly more importance to

animal health officials, livestock producers and consumers. The issue of developing

and implementing a national animal identification or national animal ID system is

indeed far more complicated than simply identifying animals at birth. The National

Pork Producers Council appreciates the opportunity to further examine the issue of

a national animal identification as the U.S. Department of Agriculture and Congress

moves forward on developing a national system and considers the consequences for

U.S. pork producers.

We consider a mandatory national animal identification system part of protecting

the nation’s critical infrastructure food and agriculture in the case of animal disease

outbreak or intentional or unintentional introduction of a pathogen or toxin. We believe that most Americans now understand how important animal health is to protecting the food security and safety in this country and is willing to support the development of an affordable, accurate and sustainable mandatory national animal

identification system.

We believe that such a national animal identification system should reflect the

following principles:

• a single, mandatory national program with uniform foundation standards;

• a practical and effective tool for improved animal health management, including

surveillance, assessment, and response to the intentional or unintentionally introduction of foreign pathogens or toxins; • an ultimate goal of a 48-hour traceback system capable of identifying premises

that had direct contact with a diseased animal; • the inclusion of all livestock species, as defined in the 2002 farm bill;

• part of a national critical infrastructure plan to protect the food and agriculture

sector; • a credible system to meet the demands of our international trading partners in

a post-BSE world, this should include harmonization across North America, and finally;

• a system that must not place U.S. pork producers at great financial peril due

to onerous additional requirements and costs.

This morning, Mr. Chairman and members of the committee, I would like to explain what the U.S. pork industry has been doing since 1988 regarding swine identification and where we see opportunities for our pork producers to improve their current market swine identification system and fold it into a mandatory national animal identification system. Finally, I would like to leave the Committee with an idea

of where the pork industry sees pitfalls and concerns about the development of such

a mandatory national animal identification system.

What is at stake here? In today’s pork industry there are an estimated 75,000 (according to National Animal Health Monitoring Surveillance Data) pork producers in

the U.S. These producers send 100,000,000 hogs to market each year. Total farmgate receipts for hogs in 2002 were $9.6 billion. 2003 total receipts are expected to

exceed $11 billion when final data are available in April. In 2003, the retail value

of the pork sold to consumers was $40 billion. On the export side, approximately

eight percent of U.S. pork production is exported. This percentage has been steadily

growing for the past 12 years. Finally, the pork industry is responsible for over

$83.6 billion in total domestic economic activity and $32.5 billion in gross national

product, and supports nearly 566,000 jobs in the U.S., alone.

Many species have at one time or another had animal identification programs. Almost all of the national identification requirements implemented in recent years are

tied to disease eradication programs. Good examples in the pork industry are Classical Swine Fever (the US was declared free in 1979), and more recently Pseudorabies

(currently there are no positive herds in the United States). As you can see, the

pork industry is quite familiar with identifying animals because of its desire to detect, monitor and eliminate diseases for years.

In these disease control programs pigs are identified when they are tested or vaccinated. Often testing (or screening) is performed as part of preparing the pigs(s)

for sale, to move across state lines, or for area/regional surveillance purposes. Premises identification is an important component of the ID system. To effectively manage disease, animal health officials need to know the location of the pig(s) and if

other animals were at that same location. Without premises identification, animal

identification, and records, the ability to trace back and trace forward would be impossible.

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There is a catch–22 when animal identification systems are developed around disease eradication programs. Obviously, as the eradication program succeeds, more

and more states or regions become disease-free. The requirement to test (or possibly

vaccinate) in these ‘‘free’’ areas becomes unnecessary and is eliminated. Unfortunately, the impetus for identification is therefore removed as well. The irony is that

successful Industry/State/and the U.S. Department of Agriculture (USDA) eradication programs result in less animal identification and reduces our ability to manage health in the future.

The pork industry has understood this for a long time. In 1988, the pork industry

requested that USDA publish a rule on the mandatory identification of swine to improve their product and to enhance food safety. This rule has been codified as 9 CFR

71.19. In 2000, the rule was amended to include group/lot identification for feeder

swine movements across state lines within a production system. So today, in relation to interstate commerce the pork industry has (1) individual ID for all replacement breeding swine; (2) individual ID for all breeding swine at commingling and/

or slaughter; (3) identification of feeder swine; (4) market swine identified back to

their owner at federally inspected plants; and (5) feeder swine movements across

state lines within a production system based on written health plans and production

records.

In addition there are various intrastate rule requirements as the Pseudorabies or

PRV eradication program comes to completion.

Identification, under this rule is achieved in a number of ways: using USDA official eartags; USDA official backtags for swine moving to slaughter; official swine

tattoos; tattoos on the ear or flank recorded by a swine registry association; ear

notching when recorded in a pure-bred registry; an eartag or tattoo bearing the

premises identification for slaughter or feeder swine. The interstate movement of

feeder pig rule requires each and every premise where a pig has been must retain

transaction records for a period of three years.

The system works relatively well. Originally, however, the 1988 rule failed, USDA

had to focus on education rather than enforcement. Initially there were serious

problems when the 1988 rule was first implemented. The rule, contrary to producer

input, attempted to move the actual application of the identification to the farm.

Producers, wanting to comply and do the right thing, started applying slap tattoos

to market hogs. Packers, not knowing the hogs had already been identified, applied

their own tattoos over the top of the existing numbers, rendering both unreadable.

In addition, producers had much less experience and training in applying tattoos,

which resulted in a dramatic decline in readability. Finally, a packing plant had

hogs delivered that had been tattooed with unapproved ink, which shut down the

plant. To resolve the issue, USDA announced they would focus on education instead

of enforcement while they rewrote the rule. Once the rule was changed and met industry needs, it became very effective.

There are several areas in which we see that there is room for improvement.

First, the backtag system currently being used to identify cull breeding swine has

a low tag retention rate about 15–20 percent. This retention rate is low because the

identification system does not meet the species-specific needs regarding the handling of these animas on the way to market. We would like to see this system enhanced. If a national premises identification system were implemented we could

apply premises identification tags to our breeding animals thereby identifying the

source farm. Second, the identification of market hogs back to their last premises,

instead of their owner’s mailbox, will result in a more rapid and accurate traceback

to the suspect premises. This improved accuracy could facilitate further traceback

to origin premises because today, generally, hogs move in lots recordkeeping in our

industry is by and large based on lot or group movement.

I have addressed the regulatory path that the pork industry has taken. I want

to briefly touch on how the pork industry’s policy position has evolved over time.

In 1995, the National Pork Producers Council passed its first resolution on animal

identification; it included a statement endorsing voluntary electronic identification

for pigs. Early on, the industry was focused on tying animal identification to premises and the use of developing national standards. Every year or so since that date,

the NPPC delegates have passed increasingly more specific resolutions moving the

industry slowly towards today’s position. In 1998 producers agreed to the concept

of a National Premises ID system. In 1999/2000 producers agreed that improved

sow and boar identification was needed and the National Pork Producers Council’s

Board of Directors approved the concept of National Premises Identification system.

Today, as we speak the U.S pork industry is holding its annual meeting in Atlanta,

GA. We expect to have at least one resolution passed supporting a national mandatory animal identification system and more specifically, expressing support for the

government-industry developed U.S. Animal Identification Plan.

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The development of a U.S. Animal Identification Plan began, in earnest, in April

2002, when the National Institute for Animal Agriculture coordinated the development of a National Identification Task Force. This original Task Force consisted of

over 30 livestock organizations. As the process unfolded additional stakeholders

were added. By the time a Draft USAIP was presented at the U.S. Animal Health

Association meetings a year later over 109 stakeholders representing over 70 industry organizations—had input into today’s USAIP.

Let’s be clear on what the USAIP is and is not. It simply defines the standards

and framework for implementing and maintaining a national animal identification

system for all of U.S. livestock. The Plan includes standards for: (1) a national

premises numbering system; (2) individual and group/lot animal numbering systems; and (3) performance standards for ID devices. It sets up a recommended

three-phase path to improving identification in the pork industry. Just as important,

the USAIP recognizes the significant species differences and recommends the formation of species-specific working groups to design and refine their individual identification plans. It also proposes joint industry/government governance mechanisms

for the national system.

The USAIP is not ‘‘THE PLAN’’ and it does not have ALL of the answers, there

are still many outstanding questions to be answered. However, the USAIP establishes a framework and working document that we believe needs to be the foundation for establishing a national system. We in the pork industry are not prepared

to go back to the drawing board after almost 3 years of work and a 16-year track

record of helping our producers implement a current rule that works and that producers have integrated into their production.

If I might, I would like to outline how the pork industry views further enhancements to the current mandatory swine identification system based on the current

USAIP. We believe that further enhancements are dependent upon available resources and funding by this I mean both Federal and industry funding and resources. We have laid out three distinct phases and included a targeted timeline

that we had hoped to achieve.

In Phase I: All swine operations and holding facilities would be identified with

a unique national identification premises number. Once established, this number

would be applied to all replacement breeding animals by means of visual tags. In

addition, this premises number could be coded on the transport papers of all market

pigs thereby identifying them to their last location—not the owner’s mailbox. Once

Phase I was implemented nationwide, the U.S. pork industry will have met the 48

hour traceback goal contained in the USAIP, therefore we believe it would be wise

to initiate implementation test projects as soon as practicable.

In Phase II: Producers would be required to record all group/lot movements—

using their own group/lot IDs—and keep those records for a period of three years.

Since they are already established, adoption of group/lot ID standards would be encouraged in preparation of reporting movements to a central repository in the future. However, until confidentiality, security, and added value for producers are addressed, the system described in Phase I is superior to submitting group/lot IDs to

the market. I say this because USDA would not have to access a database to identify the premises number of the pigs.

Finally in Phase III: There would be electronic reporting of individual and group/

lot ID to a cognizant authority be it USDA or a designated or certified third party

or organization all interstate and intrastate movements.

Phase III raises many questions in pork producers minds. As mentioned earlier,

they are concerned that that the issues of confidentiality and security of their data

will be protected and respected and that they will see some added value here.

As I stated earlier the USAIP identifies a number of issues that must be addressed. I would like to highlight five. (1) Will this system be mandatory or voluntary?; (2) How will the confidentiality and security of a producer’s data be protected?; (3) Why is it important for species groups to develop species-specific plans

recognizing that there are species and movement differences?; (4) How do you allow

for technology flexibility, new devices, methodologies and technologies?; and finally

(5) Funding Who pays for what?

I would like to discuss these issues in a minute. But first, I should note that the

pork industry believes that some of these issues can and should be addressed by

the species-specific working groups already in place. Some of these issues will require either USDA action or Congressional action. We do have a Pork Industry

Working Group working through a number of issues such as cost, definitions, devices/technology/methods, implementation planning, and finally communication.

This Group is made up of pork producers, USDA officials, state and private practice

veterinarians, academics, pork production and management companies, breeding

stock companies, breed associations, livestock market, as well as food companies.

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The first issue is the issue of a Mandatory vs. Voluntary system. Ours has been

mandatory since 1988. Other species groups such as sheep and cervids also have

mandatory ID for disease control programs. From a disease management perspective, we believe the system must be a mandatory program otherwise the ability to

effectively manage diseases will be hampered if not all species, producers and other

stakeholders are participating in a national animal ID system.

The second issue is the issue of Confidentiality/Security. The issue of confidentiality has not been effectively addressed to date by either the USAIP process or USDA.

It is imperative that any animal identification regulation developed by USDA include protections from public access to a producer’s vital economic/trade information.

NPPC believes that there is the potential for serious wrongdoing when the following

critical pieces of information about a producers operation are aggregated and made

public: (1) the address of the production facility/facilities; (2) the number of animals;

(3) the time and date that the animals were/are at that site; and (4) and real-time

animal movement information. Our competitors and the bad guys should not have

free access to this information. If you stop to think about what the President has

said and done about agriculture being part of the nation’s critical infrastructure, we

believe that it makes sense that USDA, our partner in fighting animal disease in

this country, provide us with the protections necessary when handling this sensitive

economic data. NPPC believes that the Committee should thoughtfully consider the

President’s recently signed Homeland Security Presidential Directive HSPD 9 and

consider how it interacts with the Secretary’s desire to protect the agriculture and

food system from major disease outbreaks. Release of the data pork producers are

being asked to provide could provide a road map to ‘‘diminish the overall economic

security of the United States.’’

Until confidentiality and security are addressed producers are unwilling to report

data to a national database. An effective and protected system must be operational

before producers are asked to take the time to report animal movement data.

The third issue relates to species-specific implementation plans. There are vast

differences between species including the diseases of concern, production practices,

record keeping, animal movements, and animal value. For example, the cattle industry has embraced electronic ID eartags (RFID tags) as the identification device

of choice for their species. The value of a single bovine coupled with the frequent

commingling of animals from different owners make RFID a logical choice for their

species. However, a $2.00 RFID tag is much less of an issue in an animal valued

at $1200 versus a $90 animal. From another perspective, if cost of identification is

based on breeding females, a cow has one calf per year and therefore the cost per

cow is $2.00 per year. On the other hand, a sow will have 22–24 offspring per year

and pork producers would have $44-$48 per breeding female per year in identification expenses. Group/lot ID is an effective identification system for swine due to production practices but not commonly applicable to bovine. In addition, many species

(equine, llamas, etc.) don’t tolerate eartags. It is important that all species are allowed to develop an effective yet affordable ID system. Finally, in 2001 a study conducted by Disney, Green, Forsythe, Weimers, and Weber and published in the Review of Scientific Technologies, Offici. Int. Epiz (2001) 20 (2),385–405., concluded

much the same thing. Though individual animal identification is an important consideration, economic analysis indicates that the cost-benefit equation varies greatly.

For cattle in situations similar to those in the U.S. results showed that improved

levels of animal identification may provide sufficient economic benefits in terms of

the consequences of a foreign animal disease to justify improvements. The study did

not draw similar conclusions for swine the economic benefits were not sufficient to

justify system improvements.

The fourth issue is related Technology Flexibility. Any system while allowing for

species differences must also allow for technology flexibility. New devices, methodologies and technologies emerge every day. In addition, the cost of a certain technology becomes less over time. I am sure that the Committee has seen many technologies over the past several months. USDA must establish a national data platform for animal health management purposes and have the marketplace meet those

standards. This not only encourages innovation and competition it also drives down

the cost to pork producers.

The fifth and final issue is the issue of funding. Who pays for what? We believe

that developing a National Premises Identification System is the basis for any national animal identification system and it is a Federal responsibility. Further, we

believe that USDA needs to develop the information system to allow animal movement data to be captured, stored and accessed when needed, whatever the data may

be for animal health management purposes is also Federal responsibility.

The cost to fully implement the USAIP has been estimated at $121 million per

year. Although considered a priority, by the Department, they have requested only

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$33 million from Congress in fiscal year 2005. Obviously, as species working groups

develop their species-specific identification implementation plans, the funding requirements will become clearer and so will the reality of what industry is capable

of funding. The pork industry is just emerging from five years of low pork prices.

Should producers have to incur additional expenses for an additional public good?

We do know that an enhanced mandatory national swine identification plan will

likely be quite different without Federal funding than with Federal funding. We continue to believe that most Americans now more than ever understand how important animal health is to protecting the food security and safety in this country and

are willing to support the development of an affordable, accurate and sustainable

mandatory national animal identification system.

Mr. Chairman and Members of the Committee, we should reflect on what not having a national mandatory animal identification system has cost us in the livestock

industry. We have all paid in public perception we have paid in the media we have

paid with our international trading partners. Yes, while a mandatory national animal identification system would protect the $100 B livestock industry in this country, it also protects and secures the nation’s food animal supply and a huge section

of the nation’s economy. This is both a private and a public good. America’s pork

producers take this responsibility very seriously.

In conclusion, Mr. Chairman and Members of the Committee, I have outlined the

many reasons why the National Pork Producers Council supports a national mandatory animal identification system. I have detailed today’s pork industry’s mandatory

market swine identification system and ideas for enhancing the effectiveness of the

system. We believe that careful and thoughtful consideration of the national animal

ID efforts are currently underway such as the USAIP and that these efforts will

lead to better public policy decision-making, provide producers reliable and accurate

animal health monitoring, surveillance, eradication and ultimately provide credible

food safety assurances for U.S. consumers. We believe that the development of an

affordable, accurate and sustainable mandatory national animal identification system that does not place onerous and undue costs on pork producers will enhance

the long-term health and growth of the U.S. pork industry.

Thank you Mr. Chairman and members of the committee for your time and attention. I would be pleased to answer questions at the appropriate time.

STATEMENT OF GARY C. SMITH

The International Livestock Congress (ILC) is held each year, in conjunction with

the Houston Livestock Show and Rodeo, under the sponsorship of the International

Stockmen’s Educational Foundation. In 2002, the ILC Beef Program ‘‘Surviving and

Thriving in the Next Decade’’ reached these conclusions: (a) Seedstock generators

and cow/calf producers should implement voluntary individual animal identification

(IAID) programs. (b) Stockers/backgrounders and cattle feeders should work with

cow/calf producers to be able to trace cattle in order to verify the origin (source verification) of cattle and the system through which cattle have been produced (process

verification). (c) Traceback, source verification and process verification are important elements in helping packers and processors assure safety and quality of beef

to customers and consumers. (d) Traceability is the missing link in preventing/controlling Foreign Animal Diseases and agricultural bioterrorism in the U.S. beef industry. In 2003, the ILC Beef Program ‘‘Producing Consumer-Demanded Beef’’

reached these conclusions: (a) The marketplace, driven by the consumer, will place

increasing demands on the beef industry to track the sources of its products because

of product safety and eating quality issues; to be rewarded for superior performance,

those in the beef industry must be willing to identify and measure their products.

(b) To generate change in determinations of value in cattle and beef there must be

changes in mindset with regard to communication of knowledge/ information, and

an accountable traceback system with price linkage must be developed. (c) There is

value in being able to trace certain product attributes because information feedback

is important to those in certain industry sectors. (d) Traceback has positive implications relative to food safety, and traceability can facilitate product differentiation.

Because Country Of Origin Labeling (COOL) was then scheduled for implementation by September 2004, program participants at ILC 2003 developed a ‘‘COOL Implementation Plan’’ characterized as: (1) Phase I (a) Packers and retailers; tracking

and development would consist of defining tracking methods, addressing product

displacement factors and defining infrastructure solutions. (b) Feeders; fed-cattle

tracking would involve use of separate lots and, in some cases, individual data for

animals within lots of cattle. (c) Producers would be encouraged to implement a voluntary program. (2) Phase II (a) Feeders and producers would develop a national

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data-base and develop audit trails involving voluntarily identifying cattle at first

point-of-sale, requesting assistance of auction markets and following cattle in tracking systems used by those in vertically aligned beef supply chains and alliances. (b)

Packers would concentrate on verification of traceability. (3) Phase III (a) Producers,

packers and retailers will use national identification numbers making the progression to a unique identification system that involves use of electronic identification

tags in cattle (birth to weaning, stockering/ backgrounding, into production for 2 to

20 years if in the production herd, into feedlot for 6 to 12 months if harvested as

fed-cattle, to packing plant), barcode identification of carcasses and parts in the

packing plant and DNA tests at preharvest and postharvest.

At the 2003 International Beef Industry Conference (Calgary, Alberta, Canada),

also sponsored by the International Stockmen’s Educational Foundation (ISEF), Dr.

Richard McDonald (Texas Cattle Feeders Association) represented the ISEF in stating ‘‘Implementation of a traceability system in the USA is inevitable and necessary;

drivers for traceability are animal/ carcass/beef performance, source verification,

food safety and public health.’’

In 2004, the ILC Beef Program ‘‘International BSE Summit’’ participants applauded USDA Secretary Ann Veneman’s January 2004 announcement that ‘‘a national animal identification program’’ is a major USDA policy priority for Mad Cow

Disease prevention and that ‘‘USDA has worked with partners at the Federal/state

levels and in industry for the past 11⁄2 years on the adoption of standards for a verifiable nationwide animal identification system (the U.S. Animal Identification Plan)

to help enhance the speed and accuracy of our response to disease outbreaks.’’ ILC

2004 participants were also encouraged by Secretary Veneman’s February 2004 announcement that ‘‘President Bush’s fiscal year 2005 budget will include an increase

of $47 million to enhance USDA’s BSE-prevention program, with $33 million directed toward acceleration of the development of a national animal identification

system.’’

The International Stockmen’s Educational Foundation urges members of the U.S.

Congress to move forward expeditiously to implement a coordinated national identification and traceability system for livestock.

STATEMENT OF JAN LYONS

I am Jan Lyons, president of the National Cattlemen’s Beef Association. There is

no better time and no better place than the International Livestock Congress to discuss animal identification, an issue of great interest and concern for cattle producers

across the country.

Mr. Chairman. Thank you for the opportunity to present testimony to you today

on behalf of the members and state affiliates of the National Cattlemen’s Beef Association. I appreciate being able to discuss animal identification, an issue of great interest and concern for cattle producers across the country.

There is no better time and no better place than the International Livestock Congress to discuss animal identification, an issue of great interest and concern for cattle producers across the country.

Animal identification is not a new issue to NCBA, cattle producers, or USDA. In

fact, NCBA has been very engaged in the development of identification systems for

almost 10 years. In 2000, NCBA adopted standards as an organization so that the

identification industry would have some commonality. Throughout this time, we also

worked with USDA representatives knowing that at some point, we would be testifying at hearings such as this one about the role, purpose and potential pitfalls of

a national animal identification system. As many have readily conceded, the recent

discovery of BSE in a Canadian cow in Washington has given this discussion a tremendous sense of urgency. This sense of urgency has manifested itself in congressional hearings, the media, in cattle associations at the state and national level, and

in the marketplace of technology.

Recent discussions have focused heavily on technology—the technological capability to track animals from farm to plate—using the newest and most effective technology or finding new uses for existing technology. But technology is not the start

of the discussion. The discussion begins with why identification is important, and

how it can be used as a tool to contain animal disease and protect the United States

cattle herd, our greatest asset. Beyond technology, there are many questions that

producers have about animal identification that become policy questions for Congress, USDA and NCBA. I hope to give some context to these issues and to pose

some potential solutions.

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ANIMAL IDENTIFICATION IS A TOOL

Animal identification is a tool that can be used to identify and isolate animals and

premises that have been associated with animal disease. We have had a mandatory

animal identification system in our country in the recent past, the brucellosis eradication program. This program required that animals be vaccinated for brucellosis,

tattooed, and tagged with a permanent metal identification clip tag. While this program was established to eradicate brucellosis, the result was a traceability program

that has helped USDA and states over the years identify other diseases such as tuberculosis. Though the early days of the brucellosis program were very difficult for

all parties—including producers, states, USDA, and even Congress, the program has

successfully eliminated brucellosis from all but a few places in the United States.

The downside of the success of the brucellosis program is that as states have become

brucellosis free, vaccinations for the disease ceased, and, as a result, so has the tagging with the metal clip tags. Our task today is to increase the level of identification

so that we can expediently contain a disease upon discovery.

I emphasize that identification is a tool to use in conjunction with our existing

animal disease surveillance and monitoring infrastructure—it is not a substitute for

that infrastructure. We do not wish to follow the examples of Europe, where too

much emphasis was placed on identification and not enough emphasis on infrastructure. Though much is made of the many EU tracking systems, the EU has been subject to a BSE epidemic, Food and Mouth Disease outbreak, Dioxin contamination,

and PCB contamination, all due in part to weak science-based infrastructure.

I must state that NCBA will oppose efforts to pay for an animal identification system by cutting existing animal health infrastructure. To do so would be the equivalent of cutting a city’s fire department to pay for a fire extinguisher for every household. Although having a fire extinguisher in every home is good policy, to do so at

the expense of the fire department could open up the community for larger and

more destructive conflagrations.

DEVELOPMENT OF A NATIONAL IDENTIFICATION SYSTEM

Animal identification is a confusing topic for many because everyone has their

own notions about what it is, how it works, what it can do, how it can be done, and

the best technology with which to do it. The development of such a system in these

kinds of circumstances can be difficult. That is why dialogue and consensus building

is so very important. It has taken time within our own industry and association to

develop consensus, and that came only after years of debate.

Concurrently, other groups and organizations were having similar discussions.

Once groups had a certain level of internal consensus, it was time to bring these

groups together. That began to occur two years ago when the National Institute for

Animal Agriculture began hosting meetings which culminated in the development

of the United States Animal Identification Plan (USAIP). More than 70 organizations and over 400 individuals have worked diligently to draft the USAIP plan. This

level of support is unprecedented in the history of developing programs of this magnitude and importance. The full text of the USAIP is available at www.usaip.net.

Following development of the broader plan, members of the USAIP have established individual species working groups to outline specific areas of interest or concern within that species. The bovine working group has met January 27 and February 12 with the next scheduled meeting on March 10. The purposes of these meetings are to continually refine the implementation of an identification program, answer unanswered questions, develop pilot programs, and discuss industry education.

As a matter of NCBA policy, we support of the USAIP as the foundation of the national identification system and support the ongoing work of the bovine working

group.

We recognize however, that many questions remained unanswered within the

plan and within the minds of cattle producers across the country, Congress, USDA

and interested parties. These questions form the basis for the animal identification

policy questions that are the subject of today’s hearing. These questions include:

• What will it cost? Who will pay?

• How will our producers’ information be protected?

• Will this system be mandatory or voluntary?

• How will it be implemented and how will any burden be shared?

• What will other countries need to do and how will their information be integrated?

• What technology will be used?

• What authority does USDA currently have? Is additional authority needed?

• How can this system be used to add value?

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COST

Full and complete implementation of USAIP is estimated at $545 million over 6

years. This is inclusive of all the species in the plan. Other publicly released commercial estimates mirror this figure. The USAIP estimate includes the information

system, data collection infrastructure, and identification devices. Clearly, this

amount is a tremendous outlay of resources for any party. The identification system

would provide the infrastructure needed to ensure traceability in the event of a crisis. Past infrastructure projects similar to this one have been partnerships between

producers, the industry, and state and Federal Government. Due to the outlay of

resources required, it is proper to discuss which parties would be responsible for

funding the identification program.

The USAIP focuses on establishing technology standards so that the system is

uniform, workable and consistent. Accordingly, we believe it is appropriate that establishment and approval of these standards is a proper role for the Federal Government. The implementation of the plan means the installation of the infrastructure, networks, and reading capabilities. This will entail a tremendous investment

in hardware across the country. This type of investment has typically been a partnership and cost sharing effort between states and Federal Government. The identification device, which is the cost most associated directly with an individual producer, could be paid by producers utilizing available state or Federal dollars to assist in the cost, especially for those producers in need of assistance.

To summarize, an approach could be the Federal Government paying for establishment and approval of standards; the Federal and state governments partnering

on infrastructure installation; and the Federal and state governments cost sharing

with producers on the identification device.

CONFIDENTIALITY

Producers are extremely concerned that the information that becomes part of an

animal identification system could fall into the hands of those who would use it illicitly. Indeed, NCBA was part of a lawsuit in which an environmental group used the

Freedom of Information Act (FOIA) to gain access to private producer financial

records in an effort to ‘‘destabilize’’ ranching. This use of private financial data for

these types of purposes is inappropriate. For these reasons, NCBA believes that any

information provided by producers for the animal identification system should be exempt from release under FOIA. Additionally, the Privacy Act contains several provisions that protect private and personal data from release without the written consent of the party that provided the information. Making the Privacy Act apply to

data provided under this system, would add an additionally layer of protection for

producers privacy. Clearly, we recognize that the purpose of the identification system is to provide information that USDA needs in the event of an animal health

crisis, and our comments on FOIA and the Privacy Act would not in any way preclude USDA from getting the information needed to respond to a crisis. NCBA believes that producer confidentiality is crucial to a successful animal identification

program.

MANDATORY VS. VOLUNTARY

The most popular question that arises when talking with producers about identification is the question of voluntary versus mandatory. Unfortunately, this question

is becoming a litmus test among some as to whether or not they will support or oppose the establishment of an identification system. We recognize that to be successful, we need to have high levels of participation in the program. Our policy is that

we should determine in a sound statistical manner what this level of participation

is, and the frequency of identification that is necessary to protect the health of the

U.S. cattle herd from disease. It is fair to assume that you could have much higher

participation with a well-designed voluntary program than you would if you had a

poorly designed, under funded, poorly managed, uncoordinated, mandatory system.

One needs to look no farther than the previously mentioned brucellosis eradication

program to know that the early days of that program were full of strife due to the

well-meaning but ineffective manner in which it was initially implemented—especially on livestock that moved interstate.

The question of mandatory versus voluntary should revolve around how best to

get the level of participation needed to make the system effective, and that will be

driven more by available funding and an implementation plan that makes sense,

rather than a litmus test. NCBA supports an industry-implemented animal identification system that protects producers but provides government with appropriate

access government to contain animal health outbreaks.

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IMPLEMENTATION

The USAIP calls for initially starting with a premise identification system, then

moving forward with individual animal identification. Some have criticized the

USAIP recently as having unworkable implementation timetables. The key here is

not artificial deadlines, but a framework for implementation that makes sense. The

timetables will be adjusted as funding is available and progress is made.

It is extremely important that implementation of the program be in step with how

cattle are marketed and moved. We must take into consideration the constraints

that exist at livestock markets, processing facilities and feedyards. Accordingly, animals should be identified at or before the first time they enter commerce. We must

also develop procedures for livestock that are sold on a private treaty basis that may

avoid these facilities until they are sold to a packer.

Additionally, many cattle are already identified through existing marketing and

management programs. If the systems in which these cattle are already identified

are consistent with the standards set by USAIP, then these systems should be available to provide data to USDA for the purposes of producer participation in the identification system. This is an example where the marketplace has adopted USAIP

standards, and Radio Frequency Identification (RFID) is already ahead of our current regulatory systems. These programs should not be put at risk while our regulatory structure plays catch-up with where the majority of the marketplace already

is.

The key to effective implementation is solid standards—which USAIP provides—

combined with flexibility for mode of marketing, regional differences and existing

programs. The standards of USAIP are the driving force in ensuring that the system

works and is functional.

To ensure that the animal identification system is successful, pilot programs

should be implemented in different regions of the country. This would allow the

plan to be tested using different production and marketing systems and recognize

environmental differences. These pilot programs would be the first phase of implementation. NCBA encourages Congress to provide adequate funding for these

projects.

INTERNATIONAL CONSIDERATIONS

As we have seen with the recent case of BSE and avian influenza, it is important

that there be international harmonization in animal identification standards and

systems. As we resume trade with Canada and Mexico we need equivalency in

traceability. We not only need expedient identification and containment of animal

disease within our borders, but across our borders and around the world. In our

five-nations alliance with Mexico, Canada, Australia, and New Zealand, there is

common agreement with our counterparts in these countries that there should be

harmonization in our animal identification systems.

TECHNOLOGY CONSIDERATIONS

USAIP establishes Radio Frequency Identification (RFID) as the currently preferred identification method. Other technologies—DNA, retinal imaging, boluses, implants—could be integrated into the system as standards and practical applications

of the technology evolves. RFID has been readily adopted by livestock producers.

Millions of these tags are already in use and have been in use within many of the

existing identification programs. Adoption of the RFID standard within USAIP acknowledges the existing use of this technology. To adopt another technology at this

point would make the millions of RFID tags of no use to current users and hamstring the ability of our industry and USDA to expedite implementation of an identification system. NCBA does not wish to engage in, nor do we wish Congress or

USDA to engage in technology fights because every firm or entity has a plant, or

an employee located in someone’s district. RFID can be most readily integrated

today into operations across the country. NCBA wants to foster and environment

that is a catalyst for competition, innovation and efficiency.

NCBA and the National Milk Producers Federation recently sent a joint letter to

USDA urging USDA to ‘‘fully support the first step in plan implementation by recognizing and supporting the use of a standardized RFID system as the foundation

of the system when individual animal identification is required.’’ USDA should

adopt this standard which would enable all states and all producers to begin implementing the system in short order. To delay implementation so that entities can debate or cajole does not assist in implementing the identification system in a timely

fashion. It is imperative that USDA adopt the RFID standard consistent with

USAIP sooner rather than later to enable to department to meet its stated objective

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of implementing an identification system soon. Nonetheless, should Congress act on

an identification bill, no statutory provisions should be included which establishes

the technology standard. Keeping the technology standard within the regulatory responsibility of USDA maintains the flexibility needed to adopt new technology.

CURRENT STATUTORY AUTHORITY

NCBA understands that USDA has the authority, under the Animal Health Protection Act passed in the 2002 farm bill, to implement an identification system.

Therefore, no additional authority is needed. NCBA will monitor the implementation of an identification program by USDA, and as stated previously, NCBA is supportive of an industry-implemented program that is accessed by USDA for animal

disease issues. The recommendations in this testimony could be utilized by USDA

under their existing authority. Should we or USDA identify gaps or areas where additional authority is needed, we will work to address the shortcoming legislatively.

Should Congress move forward in passing statutory provisions related to animal

identification, we will work to make the above testimony part of the legislation.

VALUE ADDED OPPORTUNITIES

The purpose of the animal identification system described in the above testimony

is for animal health and related purposes. The system as described will not provide

management information to producers or to parties in the chain of production. It

is for the purpose of providing USDA the information needed to manage animal

health issues. However, the identification device used, such as the RFID tag, could

be used to facilitate or enable producers to participate in programs that provide

management data. Indeed, many producers are already participating in these value

added, information management programs and if those programs meet the USAIP

standard, they could be used by USDA for participation in the identification system

for animal health. We encourage the optimization of benefits from animal identification that can provide additional value to our producers.

NCBA has long recognized the importance that identification can play as part of

our animal health infrastructure. That is why we have invested so much both internally, and as part of the USAIP development. We know that many questions exist

and we are committed to addressing each question, answering it, then moving forward. At this point, USDA can make an important move forward by adopting the

USAIP recommendation for RFID technology as the identification standard.

The USAIP is an outstanding starting point for efforts to develop an effective animal identification and traceability system that will benefit producers, consumers

and government. The U.S. has the healthiest cattle herd in the world. Our system

can and will protect animal health by engaging the long standing partnerships that

brought us to this level, including partnerships within the Federal and state governments’ animal health infrastructure, veterinarians, producers and other livestock

professionals. It’s a partnership built on principle and a commitment to do what is

right.

We are confident the current path we are on will result in the development of an

effective animal identification and traceability program for not only the cattle industry, but also for all of animal agriculture.

Thank you for the time and I will be happy to answer any questions.

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(97)

THE DEVELOPMENT OF USDA’S ANIMAL

IDENTIFICATION PROGRAM

THURSDAY, JULY 22, 2004

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON LIVESTOCK AND HORTICULTURE, COMMITTEE ON AGRICULTURE, Washington, DC.

The subcommittee met, pursuant to call, at 1:07 p.m., in room

1302 of the Longworth House Office Building, Hon. Robin Hayes

(chairman of the subcommittee) presiding.

Present: Representatives: Osborne, Rogers, Neugebauer, Ross,

Scott, Peterson, Herseth, Boswell, Udall, and Stenholm [ex officio].

Staff present: John Goldberg, Elizabeth Parker, Pam Miller, Pete

Thomson, Callista Gingrich, clerk; and Andy Johnson.

OPENING STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA

Mr. HAYES. Good afternoon, ladies and gentlemen. I’d like to call

this meeting to order. We have got other Members coming. They

are kind of trickling in, but since nobody but the posterity cares

about our opening statements anyway, we will move on.

I have met a number of you yesterday and today and really appreciate all of you coming and being a part of this process. If you

are not here regularly, I don’t think you understand how much of

a contribution that you make when you take the time, devote the

energy and the resources that it takes to come. We are very dependent on you, and I am sure my colleagues, particularly Mr. Boswell and Mr. Peterson, would join me in those remarks. So I am

most grateful to you for being here.

Animal identification, if you were in the previous markup, has

been given a considerable amount of attention over the last few

months, and I am glad that we can review where USDA is in their

process of establishing a national program for animal disease surveillance. We will also hear from other witnesses who have worked

on a regional basis with producers, the livestock industry, State

animal health officials, and the USDA on how to begin identifying

animals. I would like to mention that we did invite folks from the

Northwest Pilot Project, but unfortunately, their schedules did not

allow them to attend the hearing today. Their testimony has been

made a part of the record.

Yesterday, this subcommittee hosted companies who are actively

engaged in the animal ID process, and I hope most of you were

able to attend and see the wide variety of technologies that were

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available. And I was thoroughly impressed with not only the number but the quality and the quantity of the information and how

many different areas were covered by the technology. These companies are the creators of cutting edge technology that can work in

multiple species and rapidly trace animals from the farm to the

processor. Most of these companies had a display booth at the National Institute for Animal Agriculture’s Animal ID and Expo Show

in Chicago back in May. I believe most, if not all, of these companies have met with producers and livestock industry representatives to demonstrate how their technologies work. The subcommittee greatly appreciates their willingness to travel to Washington

and give Members, staff, USDA, and others a chance to learn more

about these technologies. I realize many of you were interested in

testifying at today’s hearing, and while time does not permit us to

hear directly from you, please be encouraged to submit your written testimony for the record.

With that said, I think it is important to note that with this

many companies already having workable databases in place and

technology being used right now, I hope USDA will allow these

companies to come into the fold and use those systems that meet

the USDA’s requirements. Rather than reinvent the wheel, I believe these companies should be given a fair opportunity to be a

player in a National Animal Identification System. The more competition there is in available technologies, the more cost-efficient it

will be for the producer and the better product we will produce

from the rancher to the processor, and ultimately, the consumer.

Throughout this process, I have been technology-neutral, ignorant

in many cases, so that producers may determine what works best

for them, and I appreciate USDA having that same position. And

I am sure we can encourage them to maintain that position

throughout the process. I also believe it is important to have a voluntary program unless there is a need for it to be mandatory, and

again, I appreciate USDA having the same position.

However, as time passes, I am growing concerned about the process that USDA is using in regard to implementing a national program. Last fall, I heard praises from the industry that USDA was

working with them to develop a program. Many producers and industry folks came together to work with USDA to develop the U.S.

Animal Identification Plan, or the USAIP as it is called. Since the

Secretary’s December 30 announcement to accelerate the development of a program, I have heard that there has been a lack of communication and transparency in the process. Some feel USDA has

strayed away from the USAIP.

I am concerned that on one hand USDA is holding listening sessions to gather input from the countryside and recently released an

Advanced Notice of Proposed Rulemaking asking for basic comments on implementing a program, like when and under what circumstances should the program transition from voluntary to mandatory and what species should be covered. On the other hand,

USDA closed the deadline last week for State animal health officials to submit funding requests to implement premise ID systems

or work on State pilot projects. And Monday, USDA announced

that it has elected a premise ID system as an interim solution to

begin registering locations. I am confused as to why the DepartVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00103 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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ment is holding these listening sessions and asking for general,

basic comments while at the same time it appears USDA is going

ahead with its own agenda to implement a program by funding

State applications and selecting interim premise registration systems. I have heard from producers and those trying to be involved

in the process that they are worried that the listening sessions and

comment period are a facade while the USDA makes its own determination on how to structure a program. And I might add, at this

point, that Bill Hawks and I met as recently as 9 o’clock this morning and went over these concerns, assured me that they are not

valid and we are all on the same page. So I am sure Dr. Clifford

and Mr. Hammerschmidt will speak to that and reassure us.

So far, the decisions that have been made at USDA have not

been subject to public comment. The lack of transparency and communication in the process thus far concerns me. I hope the Department is serious about wanting producers’ comments on the AMPR

and that you are listening to them. I hope that asking for producer

input isn’t merely a gesture to include them in the process but that

USDA truly wants to work with the producers and that it will.

From conversations that I have had with Under Secretary Bill

Hawks, I know he understands how things have been appearing to

producers, and I believe and I am convinced that he is committed

to making sure the producers’ concerns are addressed as am I and

other members of the committee.

I am anxious to hear from USDA and to learn more about some

of the regional approaches that are also available. Again, it makes

more sense to enhance programs that are already in place and

proven rather than create a bureaucratic structure that burdens

producers with redundancy and cost.

I look forward to today’s discussion and appreciate our witnesses

for being here. At this time, I would like to recognize the ranking

member, Mr. Ross, for any comments he might have.

STATEMENT OF HON. MIKE ROSS, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF ARKANSAS

Mr. ROSS. Thank you, Mr. Chairman.

This morning, we marked up a bill on Country of Origin Labeling, commonly referred to as COOL, after over 2 years USDA drug

their feet on trying to come up with some rules and regulations to

go with the law, and I think that is a lot of the reason why we

found ourselves today moving from a mandatory to a voluntary status with country of origin labeling. And I would hope that that

doesn’t become a continual policy of USDA to try to delay implementation of things that I think are important. I think having an

animal identification system is very important. We can debate

whether it should be voluntary or mandatory just as we are doing

with country of origin labeling, but whatever we are going to do,

we need to get on with it. And I believe that very strongly.

Prior to December 23, 2003, there are a lot of sale barns in south

Arkansas and a lot of ranches in south Arkansas where I would

have been run off the property if I had even hinted at the idea of

some kind of national animal identification program. I can tell you

that today, as I travel my district and visit with folks that run

from 20 herd of cattle to 2,000 herd of cattle that they strongly beVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00104 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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lieve that we have got to do something to get these markets opened

back up once again. And recognizing that while we actually have

rebounded from that single cow in Washington State being diagnosed with BSE back on December 23, 2003, the fact is that if we

had an outbreak of foot-and-mouth, it could be devastating to the

cattle industry in America as we know it today, because we don’t

have a way to track it. And I am concerned that we are continuing

to increase the number of tests we are doing. I think we all know

the more we test, sooner or later, we are going to find more cows

that have mad cow disease, or BSE. And I don’t think we have a

process in place today to be able to handle that and avoid the kind

of catastrophe or fall in the market that could follow. That is why

I strongly believe today, as cattle producers large and small in my

district believe, that we have got to get an ID system in place.

And finally, the reason I think I would urge the USDA to make

this a priority and try to move a little faster in figuring this thing

out is let us be mindful that while cattle processes are good today,

how long can they stay up? We have got 58 countries today that

no longer accept U.S. beef. 58 countries have closed their borders

to U.S. beef since December 23, 2003. I think a national animal

identification program that address cost and that addresses privacy

and that is implemented fairly across the board can go a long way

toward securing the beef market in the U.S. for many years to

come.

So with that, I appreciate the chairman very much for your continued attention in this matter. And we all recognize that some

form of a National Animal Identification System is on the horizon.

I am pleased to see that USDA is here to testify today about their

progress on this issue, and I hope that the outcome of the identification system in the end is one that works for all parties involved.

I look forward to hearing from the witnesses and to working with

you, Mr. Chairman, in ensuring that this committee and its members are well informed as we proceed down this new path of considering a National Animal Identification System.

And with that, I yield back the balance of my time.

Mr. HAYES. I thank the gentleman for his comments and would

suggest that anyone who has an opening statement certainly submit it for the record. I know Mr. Peterson has a time constraint.

Would you like to make a couple comments, Collin, before we get

started?

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. PETERSON. Well, yes, thank you, Mr. Chairman. Thank you

for calling this hearing and your leadership.

I just wanted to associate myself with Mr. Ross and I appreciate

the Department moving on this and expediting it, but I still have

some concerns that we may not be moving quick enough. And I am

not sure that this voluntary approach is going to get us to where

we need to be. Clearly, we have a problem with BSE, and hopefully

we won’t find any more animals, but we might.

But I am more concerned about the potential of getting foot-andmouth disease into one of our major livestock distribution centers.

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We have got these countries now that have stopped us exporting.

If we get foot-and-mouth, I don’t know how many countries around

the world we don’t allow them to import into this country because

of foot-and-mouth. And if that gets around the country it is really

going to be devastating. And I don’t see how a voluntary system

that is going to be pieced together is going to solve that problem.

If somehow or another the terrorists get foot-and-mouth in here or

we get it in Joplin, Missouri where they tell me these cattle can

be within 24 hours in every part of the country. I don’t think we

have got a system in place to deal with that. And I have concerns

that this voluntary system is not going to get us there quick

enough. I understand the problems with the mandatory part of it,

but if that ever happens, we have got big problems. And I just hope

whatever we come up with, we get it implemented sooner rather

than later in case anything like this ever happens. One of the

things I would like to know from the witnesses is if something like

that did happen, how soon could we deal with it.

Thank you, Mr. Chairman.

Mr. HAYES. Thank you.

The gentleman, Mr. Boswell.

Mr. BOSWELL. Just very short, Mr. Chairman. I would like to

hear your comments you might make about the Osborne bill as you

go through your comments. Thank you.

Mr. HAYES. Ladies and gentlemen, the first two witnesses at the

table are Dr. John Clifford, Deputy Administrator for Veterinary

Services at the Animal and Plant Health Inspection Service at the

U.S. Department of Agriculture in Washington. He is accompanied

by Mr. Hammerschmidt, Coordinator of the National Animal Identification System at the Animal and Plant Health Inspection Service, USDA in Washington.

Dr. Clifford, please begin when ready, and thank you both.

STATEMENT OF JOHN CLIFFORD, DEPUTY ADMINISTRATOR,

VETERINARY SERVICES, ANIMAL AND PLANT HEALTH INSPECTION SERVICE, U.S. DEPARTMENT OF AGRICULTURE

Dr. CLIFFORD. Thank you, Mr. Chairman and members of the

committee, and thank you for the opportunity to participate in this

hearing on animal identification. On April 27, Secretary Veneman

announced the transfer of $18.8 million from USDA’s Commodity

Credit Corporation to provide initial funding needed to begin development and deployment of the National Animal Identification System. Plus, the President’s fiscal year 2005 budget includes another

$33 million for these efforts. Once fully operational, the NAIS will

help the USDA and our State and industry partners quickly identify all animals and premises that have had direct contact with a

foreign animal disease or disease of concern within 48 hours after

discovery.

USDA believes this goal can best be achieved by focusing on the

following objectives. (1) We do not want to burden producers with

multiple identification numbers, processes, or requirements. What

we, together with our industry and State partners, have envisioned

is very simple. A system where every premise has a unique sevencharacter identifier and every animal needing to be identified individually would have a 15-character number.

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(2) There is no one-size-fits-all technology. Producers will be able

to utilize technology that works best for them.

(3) The NAIS should be built upon a national data standard to

ensure that the uniform systems evolve.

(4) The architecture for the system should be created without unduly increasing the role and the size of Government. The identification of premises and animals, while requiring significant resources,

is a fundamental and straightforward objective. However, collecting

and reporting animal movement information to establish a travel

record of each animal’s life is an enormous undertaking, requiring

significant development and testing and substantial infrastructure.

We are only at the beginning of what will surely be a lengthy

process. U.S. cattle population is our first priority, although the

system will eventually focus on all livestock within the represented

industries. Clearly, the development of a system of this kind of

scope and complexity requiring a substantial investment on the

part of both the public and private sectors needs to be developed

with ample opportunity for input by those affected.

In addition, there are ongoing dialog with industry and States on

this subject. On July9, we published an advanced notice of proposed rulemaking that, among other things, solicits comments on

when and under what circumstances the national system should

move from what is now a voluntary system to one that is mandatory and which species should be covered.

USDA’s priority in 2004 is to establish the Premises Identification System. Starting next month, States and tribes on a limited

basis can begin registering locations where livestock are held, sold,

or commingled using an interim standardized premises registration

system provided by APHIS or systems developed by themselves or

others that meet the national data standards. APHIS is taking advantage of work done under an agency cooperative agreement by

the Wisconsin Livestock Identification Consortium, which was identified by an independent contractor as a premises registration system that met the established data standards and offered the necessary computing needs at the national level. We are also evaluating other systems that states or third parties have developed to ensure their compliance with the national data standards.

APHIS will provide close to $12 million to States and tribes

through cooperative agreements this year to help them implement

premises identification. As mentioned earlier, the President’s 2005

budget calls for $33 million in funding for animal ID, and a portion

of this money would go toward establishing additional cooperative

agreements to assist States and tribes that don’t receive funding

this year.

USDA is also gearing up for substantial education and outreach

campaign aimed at producers. In 2005 and 2006, USDA plans on

further developing the animal ID system so that it provides efficient collection of animal movement data. As States and tribes gain

experience, USDA will integrate those approaches that are most

successful into the broader system.

USDA is aware of producers’ concerns about the confidentiality

of information collected in the animal ID system and is taking

them very seriously as we explore the most effective means for collecting animal identification information.

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We look forward to working with and hearing from the Nation’s

producers, industry, animal health officials, State governments,

and Congress to successfully achieve a national identification system. And we also want to thank you, Chairman Hayes, and your

entire subcommittee for all of your efforts to advance this vital initiative for agriculture. I would be pleased now to take any questions you might have.

[The prepared statement of Dr. Clifford appears at the conclusion

of the hearing.]

Mr. HAYES. Thank you, Dr. Clifford. And I think we will go

ahead and let—Dr. Hammerschmidt, would you like to have a word

before we begin?

Mr. HAMMERSCHMIDT. No, it is not necessary.

Mr. HAYES. All right. Again, thank you for coming. And just to

the questions, then. I want to be sure that we fully develop as others ask questions your feelings about the status of USDA’s attitude

towards the whole process. We are still open. The USDA is going

to tell us what they need for their area of responsibility, and we

are still encouraging producers, technology providers, and others to

help provide the expertise to create a system that works. And did

I characterize what I heard you say correctly? Did I put any words

in your mouth?

Dr. CLIFFORD. No, sir. And that is correct. We are very open to

ideals and others from the industry. And I think from APHIS’

standpoint, we take pride in working with the industry and our

stakeholders in our disease eradication programs as well as animal

identification.

Mr. HAYES. Thank you, sir.

Moving to questions now, Mr. Peterson is recognized.

Mr. PETERSON. Thank you, Mr. Chairman.

This freedom of information question, I have introduced a bill

that would exempt this process from the freedom of information.

Have you looked at that bill?

Dr. CLIFFORD. Yes, sir, we have seen that bill.

Mr. PETERSON. Do you think it is necessary or not?

Dr. CLIFFORD. Sir, we have seen all of the legislation and commend the Members for that. The Department, at this time, does

not have a position on any of the legislation currently.

Mr. HAYES. He is legislatively neutral.

Mr. PETERSON. So in other words, you don’t think you need it,

apparently?

Dr. CLIFFORD. I didn’t say that, sir.

Mr. PETERSON. All right. If this is a voluntary system, I don’t

quite understand how we can say that we are going to find any

kind of disease problem in 48 hours. Aren’t there going to be a lot

of folks that aren’t in the system if it is voluntary?

Dr. CLIFFORD. Well, I think it is important to note, also, that we

are not without identification systems in the United States. All of

our disease eradication systems are built on an identification component. But the concerns that we have oftentimes, though, is some

of the diseases are nearing their end of eradication, like brucellosis,

for example, where vaccination is no longer done in most of the

country. That is because the disease has been eradicated in most

of the U.S., so we are losing those identification systems. And also,

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there are requirements within those for record keeping in markets

and by people that deal in cattle movements or other livestock

movements.

The important point to note, though, is a lot of those are manual

type systems. We need a system that we can do that within 48

hours, not taking longer time. It is necessary to be able to do that,

because time is money with regard to the eradication of disease, especially a disease like foot-and-mouth disease that can move very

rapidly. So our ability to get on top of that very quickly and to

identify those animals very quickly is extremely important.

But at the same time, a voluntary system we feel is necessary

to begin with in this country in order to build the foundation and

make sure that the foundation is sound for that system to follow

in the future.

Mr. PETERSON. Well, I understand that. I serve on the Intelligence Committee, and we just had the report released today by

the 9/11 Commission, which is making recommendations 3 years

after we had a tremendous catastrophe in this country, and we

probably aren’t going to get anything done with it until next year.

My concern is with this approach is that we could end up in this

kind of a situation in the animal agriculture industry. If we have

a foot-and-mouth breakout, then everybody is going to be clamoring

to figure out what went wrong and clamoring to do a mandatory

system. We are going to have a similar kind of a situation that we

have been dealing with in the Intelligence Committee. And that is

my concern. I understand why you are doing what you are doing

and we appreciate you coming up and briefing us and all of that

sort of thing. But I still think if somehow or another we get a footand-mouth problem here and it spreads to any extent, you are

going to be put in a crisis situation, and we are all going to be sitting around saying, ‘‘I wish we would have done this and gotten

prepared for it ahead of time.’’ That is my concern. And I don’t

know if you have that same concern.

Dr. CLIFFORD. Well, I would just also like to state, as previously

mentioned in my testimony as well as by the chairman, we have

gone out with an advanced notice proposed rulemaking to seek additional comment on this issue from the voluntary to mandatory

system.

Mr. PETERSON. Thank you.

Mr. HAYES. I thank the gentleman.

Mr. Osborne.

Mr. OSBORNE. Thank you, gentlemen, for coming today.

And I just have one brief question. We looked at all of the technology that was available yesterday, and I was impressed by one

comment, and that was that someone mentioned that ear tags,

within a short time, you lose, maybe, 10 percent and almost 100

percent over 12 years or something like that. And we probably

don’t have a lot of cows that are around that long, but I know you

are trying to be technology neutral, but if as time goes on you

begin to experience a high degree of failure, are you prepared to

step in and say, ‘‘This is unworkable. We are going to recommend

this as opposed to that.’’ Or are you going to try to remain technology neutral throughout the whole process?

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Dr. CLIFFORD. It is our intent to remain technology neutral, and

I think there is a number of species working groups throughout the

U.S. that are specific to pork industry, to the sheep and goat industry, to the cattle industry, as well as other entities that are working on these issues very diligently. And I think it is important that

one size won’t fit all and all animals don’t have to be identified. For

example, animals move in lots. Poultry will move in lots. Swine

will move in lots, so I think we need to allow that flexibility to

allow the industry to help, guide, and direct us in the directions of

things that do work for them and could be to their benefit, not just

from a disease standpoint, but for their own marketing purposes.

Mr. OSBORNE. Thank you, Mr. Chairman. That is really all I

wanted to ask.

Mr. HAYES. Thank you.

Mr. Ross.

Mr. ROSS. Dr. Clifford, if I could, let us go back to this voluntary

business for a minute.

After the single cow was diagnosed with BSE on December 23,

2003, we started trying to figure out all of the cows that the cow

had been associated with. And it is my understanding that at some

point USDA just kind of threw their hands up and gave up looking,

and there were about 50 cows unaccounted for, is that correct?

Dr. CLIFFORD. I don’t remember the exact number, sir, but there

was a certain number that were unaccounted for that, although

statistically a number of those animals would have already had extended, their life expectancy would have already been passed as

well. So the actual number would have been relatively small.

Mr. ROSS. But you will agree there was somewhere in the neighborhood of 50 cows that were unaccounted for?

Dr. CLIFFORD. I don’t remember the exact number, but there was

a certain number of head that were unaccounted for, yes.

Mr. ROSS. OK. And those cows could be dead or they could be

walking around with BSE today. They could be in the slaughterhouse today with BSE. We don’t know.

Dr. CLIFFORD. We don’t know the location of those cows that

were unaccounted for, but at the same time, the likelihood many

of those would have been past their extended lifetime based upon

the average age in which an animal lives in the U.S.

Mr. ROSS. In the unlikelihood that they were still living, walking,

and breathing either in a pasture or a sale barn or waiting in line

at a slaughterhouse, if we had mandatory national animal ID, we

would have been able to find them, correct?

Dr. CLIFFORD. You would probably have been able to find some

of those based upon that type of a system, and it didn’t mean you

would be able to identify 100 percent of them.

Mr. ROSS. And why is that?

Dr. CLIFFORD. Well, animals, even under a mandatory system,

you are not necessary going to have 100 percent compliance, and

animals also lose identification. While we want to approach that in

any type of system, even under a voluntary system, that doesn’t

mean that you would have 100 percent, every single animal maintaining their ID. Animals will lose some ID. ID devices come out

of ears, depending upon the type of device that is used.

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Mr. ROSS. I think you may be making my point for me. If we

know we won’t have 100 percent with mandatory animal ID, what

percentage would you care to guess that we would have with the

voluntary animal ID program?

Dr. CLIFFORD. I wouldn’t care to guess on a percentage, but I

think it is important to note that a voluntary system that we do

need to develop a foundation for any system before we would move

to a mandatory type approach.

Mr. ROSS. My concern about a voluntary approach is if we have

a massive breakout of BSE or if we have just one case of foot-andmouth and I am convinced that that will pretty much be the end

of the beef industry in America as we know it today, if we are able

to tell our export markets, ‘‘Well, we have got a voluntary program,

and we are not sure exactly what percentage is participating in it,

but we are pretty sure that all of the animals that are diseased are

part of the voluntary program, so continue to take our exports.’’ I

don’t think they are going to buy that, Dr. Clifford. I think they

are going to want a mandatory program where we can clearly identify all of the animals that could very well be affected. How can we

think that in any sense that a voluntary animal ID program is

going to do anything to open up these 58 markets that are closed

today, let alone what could happen if we had a major breakout of

BSE or a breakout of foot-and-mouth?

Dr. CLIFFORD. Well, I think it is important to note, especially

with issues such as BSE, and I will talk a minute about FMD and

also the trade issues that you have raised, we protect public health

through the removal of SRMs, and we protect animal health in this

country through a remnant to remnant feed van. The issues with

regard to any type of disease eradication effort, we don’t rely on

100 percent animal identification currently with our current programs that we have had in place and have been very successful.

We successfully eradicated the exotic New Castle disease from California without individual identification on poultry. And many of

these were in backyard areas. So we use many facets to be able to

eradicate and control diseases with regard to epidemiology and surveillance. So ID is one component that is part of an overall infrastructure that is needed. And the better that system is, it sure

helps any system and will help you in that eradication effort. But

it is not the only component of any eradication system.

And the additional thing with regard to trade is that I know no

market that is closed to the U.S. today as a result of a lack of an

identification system in the U.S.

Mr. ROSS. Well, I know I am out of time, and I will follow up

later in this hearing with additional questions. But again, in closing, let me just say that, you saying, ‘‘Let us make it voluntary and

let us hope that all of the cows that get diseased happen to have

been signed up,’’ makes about as much sense to me as back when

I was in elementary school, the Health Department came and they

vaccinated all of us for small pox. They didn’t say, ‘‘We are going

to vaccinate those of you that we think might be exposed to small

pox.’’ I mean, that isn’t how we did that, and I just don’t find the

logic behind how a voluntary program would work in the time of

a crisis such as foot-and-mouth.

Thank you.

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Mr. HAYES. I thank the gentleman.

I just might add, at this point, it sounds you may be pulled in

different directions here, Dr. Clifford. It has been my observation

that with the voluntary approach, we get a better system, we get

better participation, we get a better value if we all do our job. And

it is certainly the intention of this chairman and the committee to

make sure that our committee work in the hearings and all of the

other pieces of the puzzle come together to give us that end product. In my travels around and listening to folks everywhere, I don’t

hear any resistance to the animal ID program because it has value.

On a bill on that market desire to participate in that, and again,

if we turn it in on the Government, and I guess I will be looking

at Mike instead of you, instead of turning it out to the marketplace

then we kind of constrict ourselves, in my opinion. But if we fail

to get where we need to be to protect our markets and have

traceability, then we can look at other options.

Mr. Neugebauer.

Mr. NEUGEBAUER. Mr. Chairman, you gave the first part of my

remarks, but I appreciate you calling this hearing, because, as you

know, I am a strong advocate of letting the marketplace dictate

what it needs to do in order to operate efficiently and effectively,

and I believe that, particularly as it relates to animal ID, that the

people in the industry are going to require traceability at the end

part of the users, and that is going to filter down to the producers

and the cow/calf folks. But I have always said I like the fact that

we need to let the industry drive this issue and let them determine

exactly what they think they need and not let the Government set

the standard. I think, obviously, government always has that opportunity to step in if they don’t think that industry is performing

as they should, but unfortunately, a lot of times, government tends

to want to step in first and get ahead of industry. And in this case,

I believe that we are proceeding in the right direction.

I know that a number of States have submitted some of the cooperative agreements. One of the questions I had was will the producer industry input be involved in choosing which cooperative

agreements might be funded?

Dr. CLIFFORD. The cooperative agreements, and I will see if Mr.

Hammerschmidt wants to add anything, basically are being reviewed by Federal personnel as well as a State component.

Mr. HAMMERSCHMIDT. Part of the application process entailed or

involved, the working groups, the species working groups provided

input on target areas that they felt these cooperative agreements

should target and having the applicant reflect in their application

what areas needing resolved is a major part of the application process so that, in fact, we are working with projects and respond or

reflect what the industry provided the input to.

Mr. NEUGEBAUER. What involvement have the stakeholders, the

industry folks had in developing and making and the development

of the premises ID system?

Mr. HAMMERSCHMIDT. Over the last couple of years, the USAIP

group has met continuously providing direction, recommendation

on the development of a national program. It certainly emphasized

that the foundation system for us to be able to track animals was

the establishment of a premises registration system. In that procVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00112 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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ess, different committees, in particular, the Standards subcommittee established the standards, the data standards, the data elements that would be appropriate for implementing premises registration system. Those standards are, in fact, the standards that

we are building upon to implement premises registration system.

Mr. NEUGEBAUER. We had a number of vendors here yesterday

that are involved in animal ID, and one of the things that I feel

very passionate about is the fact that we develop a standard and

let innovation take over in the marketplace. And once we have a

platform that everybody agrees on, then we can talk together kind

of like my Motorola cell phone talks to someone on a Sprint phone,

being able to allow flexibility and innovation. And to the degree

that some producers are raising ten cows and some producers have

thousands of cattle, and we have got people who are in the cattle

feeding industry, do you share that vision that we need to keep

flexibility and make sure that we have got our uniform platform

but that we have the ability to keep innovation throughout this

process?

Dr. CLIFFORD. I will see if Neil wants to add anything, but absolutely. We are basically wanting to set certain data standards there

and to allow the flexibility. That is why we are remaining technology neutral and allow the flexibility within the system.

Mr. HAMMERSCHMIDT. Certainly as we look at the opportunities

that this brings forward in national identification program, we certainly anticipate advancement in the technology, and we certainly

feel that that technology can best be implemented by letting the industry adopt and integrate that technology as they best see fit versus it being directed at the Federal level. So we agree very much.

Mr. NEUGEBAUER. And in fact, animal ID is not a new concept.

Many of you folks have been doing animal ID for a long, long time.

What percentage of, for example, the cattle industry, would you

say, already has some implementation of an animal ID system in

place?

Dr. CLIFFORD. We don’t have a percentage for you, sir, at this

time.

Mr. NEUGEBAUER. But it is a pretty good number, probably more

than a lot of people realize.

Dr. CLIFFORD. Well, there are certain, yes, entities out there that

do that for sure, but I don’t have a percentage for you.

Mr. HAMMERSCHMIDT. I think certainly when we talk about taking advantage of some of the identification that exists in some of

these programs, I think that ought to allow us to kick-start having

some of these animals fit into the system early on.

Mr. NEUGEBAUER. Thank you, Mr. Chairman.

Mr. HAYES. Mr. Stenholm.

Mr. STENHOLM. Dr. Clifford, in your written testimony, you state

that while initially the program would be voluntary, you might

eventually move to a mandatory system. Would you share with us

on what basis you might make a determination of when a voluntary program would need to become mandatory?

Dr. CLIFFORD. Well, I think there are a couple of points with

that. One is through the AMPR, the public comment, and also

through the process of cooperative agreements. And when we reach

to a point nationally where we have got some uniformity and at a

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point where we can maybe consider moving and built the foundation for the system to consider moving to a mandatory system. If

and when we would move to a mandatory system, though, we

would definitely go through rulemaking for public comment.

Mr. STENHOLM. In other words, if I think I understood what you

said, take a species, take beef, for example, when the beef producers of the United States go through the various processes, look at

the technologies and determine what they need in order to maintain an animal health system, once there is a consensus, maybe not

unanimous, but a consensus, that might be the period of time in

which a voluntary program might become mandatory?

Dr. CLIFFORD. That would be something we would consider, sir.

Mr. STENHOLM. Do you believe that it would be practical to think

in terms of a voluntary system in which one of our States could opt

out and maintain an animal health system?

Dr. CLIFFORD. As far as a voluntary system?

Mr. STENHOLM. Yes.

Dr. CLIFFORD. Sure, I mean, it is voluntary. They could decide

not to follow that, but it is also important to note, though, that, as

I had indicated earlier, we still have disease eradication and control programs that require certain types of identification for interstate movement and for trade purposes.

Mr. STENHOLM. That is true. I mean, we are talking about a very

serious matter, animal health. We are talking about it not only

from that which might normally be brought into the United States

but the possibility of a terrorist attack. And therefore, the need of

trace-back is becoming very evident, and as you say, we already

have that need species by species. And that is where I guess the

question, as we perceive, it seems to me that all of our industry,

species by species, are really going to have to give some considerable thought to the most efficient way to trace back, for their own

protection, because some of these diseases when they hit or could

hit could be devastating to all of us. And therefore, anyone in the

production end of this understands that now, and I have sensed

that there is a tremendous willingness on the part of all industry,

all species, to look at a system. But I have chosen to say kind of

what I hope you are saying is that we develop this working together in a voluntary system.

Dr. CLIFFORD. Yes.

Mr. STENHOLM. But once we get that system in which a strong

consensus agrees, ‘‘This is what we need. This is the most efficient

way to deliver what we all say we need to protect our industry.’’

Once we get to that point, I fail to see, at that time, how we can

continue to say it is voluntary and let people opt in and out at their

choice. But I guess that is what we are going to eventually get to.

Dr. CLIFFORD. Yes, sir.

Mr. HAYES. Mr. Udall.

Mr. UDALL. Thank you, Mr. Chairman. I want to thank the panel

for being here today. And I do intend to yield momentarily to the

ranking member, Mr. Ross, but I did want to make a comment and

associate myself with the remarks of my friend from Minnesota,

Mr. Peterson, and Mr. Ross of Arkansas.

It strikes me that markets that are already in place, there is a

fair amount of competition over transportation costs, quality, cost

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of production. And when you put a regulatory scheme in place, you

are agreeing on a set of rules and a way of collaborating, if you

will, within a market structure. The competition still goes on, but

the rules are clearer. And if we put a system in place now, I think

this is what Mr. Ross was trying to say, in which everybody was

involved and was collaborating and promoting the system, there

would still be plenty of opportunities to compete both on the quality and the cost of production side as well as the technology that

could be brought into play. And I could make the argument that

there might be even more incentives if we had a system in place

to create the technologies that would lead us to the point, I think,

in which Mr. Stenholm was suggesting will eventually arrive. It is

my opinion it would be wiser to arrive there sooner rather than

later.

With that comment, I would be happy to yield to my friend from

Arkansas, Mr. Ross.

Mr. ROSS. I thank the gentleman from Colorado.

Mr. Neugebauer brought up something that I wanted to go back

to. Basically, we have a voluntary program today, just, for some

reason, we want to pass a law or rule or regulation saying it is voluntary. But for all practical purposes, that is what we have today

is a voluntary program. And then he asked what percent of the

beef industry out there is participating in today’s voluntary program. And you couldn’t give him a percentage. How will you be

able to give this committee a percentage with another voluntary

animal ID program as the results of rule, law, or legislation, or will

you?

Dr. CLIFFORD. When we implement in the beginning to build this

system and we start to collect data and information as animal identification information is entered into this system, we will be able

to tell you how many animals and what percentage are identified

in the U.S. population. I also would say, though, that our system

is just beginning. I think the question was as relative to what percentage may be already implementing their own types of systems,

and a lot of producers today in this country recognize the importance of animal identification and have identification systems for

marketing purposes, for record keeping, and so forth. And we need

to get the buy end of the industry and producers throughout the

country for this new system that we are developing. And I want to

continue to reiterate this. We have requirements for a national animal ID today for specific disease eradication programs, such as

brucellosis and tuberculosis, pseudo rabies in swine, chronic wasting disease in deer and milk.

Mr. ROSS. In regard to the actual electronic device, if you will,

to track animals, I mean this is not new technology. Wal-Mart has

announced that beginning in about a year now, every vendor they

do business with on every individual case box will have one of

these chips. And basically when it gets from China or wherever it

has come from to the shelf in downtown America, that chip is literally thrown away with the box. I mean, they have learned how

to get the price of this stuff down to where it is not expensive.

My question is when you talk about the open market and letting

all of the vendors, and my guess is about half the people sitting behind you all are probably folks that are either in that national aniVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00115 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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mal ID business or they want to get in the national animal ID

business. When it comes to Medicare, for example, we let the patient choose which doctor they go to, but we tell the doctor what

their reimbursement rates are going to be. If USDA is going to help

pay for this, it looks like there ought to be a set price and then let

those in the industry, who can be competitive, compete for the business, provided.

And I think this is a very important point, that all of the equipment works the same way in terms of being read. I have got a

bunch of mom and pop sale barns in my district, for example. And

if they have got to have 20 different scanners for 20 different ear

tags as they go through the chute, that is going to be very complicated and unnecessary. So I think it is important that whatever

kind of system we do implement, and I am fine with having 20 different people provide it, but I think it has got to be the kind of system where one simple scanner, for example, scans all of the different ear tags that are on the market. I think that is very, very

important. If we don’t do that, I think we will be back here in 5,

10, 20 years revisiting the issue to try and get basically one system

that works universally. It is just like computers. You can buy a

computer from Gateway or Dell or Microsoft or whoever you want,

but basically the software you buy out there can be loaded on all

of them. I think it is important that they are all interchangeable

so we don’t put any burden unnecessarily on those who will have

to be helping to keep track of these animals as they process

through things such as stockyards and sale barns.

Do you have any thoughts on that?

Dr. CLIFFORD. Let me ask Mr. Hammerschmidt to respond to

that, please.

Mr. HAMMERSCHMIDT. Certainly, the compatibility of the system,

regardless of the technology used, is very critical. We certainly

agree that, for practicality, efficiency, and cost-effectiveness, we

have got to have some standardization. At the same time, our role,

as the Federal Government, is, again, establishing the data standards, animal identification numbering systems, what pieces of information we need to successfully trace back and trace forward potentially exposed animals. We feel very strongly that the industry,

through the working groups, can demonstrate and prove that they

are in the best position to determine what type of compatibility

standards, technology standards, again, work best in those environments.

Mr. HAYES. I thank the gentleman. And I have a couple questions.

Dr. Clifford, we talked about transparency in your opening statement in the national system. Why has the Department not requested public comments until now even though you are hoping to

start allocating premise ID numbers next month, before the comment period closes?

Dr. CLIFFORD. Well, I think we are continuing to ask for public

comment on the program. Through the listening sessions, we have

done a number of speaking engagements throughout the country,

and I think this is an ongoing process. And it is a voluntary process. We want to build the proper type of infrastructure and set the

112

data standards for this system, so it is a very open process that we

want to have here.

Mr. HAYES. So the comment period for premise ID is still open

is what I heard you say.

Dr. CLIFFORD. Well, as far as for the AMPR, the comment period

will be open for 60 days.

Mr. HAYES. OK. You mentioned in your testimony that database

systems must be developed. After attending the displays yesterday,

it appears that the databases are developed at a very high level,

an impressive level. Can USDA use these current private databases and simply set up memorandums of understanding to access

the data if a disease outbreak were to occur? It seems like this

would also solve some of your confidentiality problems.

Dr. CLIFFORD. I am going to let Mr. Hammerschmidt respond to

the database.

Mr. HAMMERSCHMIDT. We certainly feel that to be successful in

the program we want to bring forward, that those service providers

are key in making the system work. They are providing service to

producers that would allow us to have the information on animal

location without any extra work effort of the producers and cattle

feeders and market operators. So having an integrated system that

allows that information to feed the National Animal Identification

System and tracking system is very critical that we take advantage

of those through appropriate agreements and memorandums of understanding. At the same time, USDA must ensure that we have

access, that information is well integrated, readily available to support animal disease monitoring and surveillance. Certainly, by all

means, we want to take advantage of that data infrastructure that

these service providers add or bring forward to the system, by all

means.

Mr. HAYES. I think you took my question just a little bit more

complicated than it was. Number one, given the amount of data or

the types of systems available, if an outbreak were to occur, which

is the last thing anybody wants, given all of the data out there

now, could you do a pretty effective job today tracing those animals? That is half of the question.

Mr. HAMMERSCHMIDT. Yes.

Mr. HAYES. All right. And then the other is confidentiality concerns. That would be somewhat addressed in there as well. I know

USDA has selected interim premises ID system, but your testimony

says the independent contractor only reviewed three systems. Don’t

you think it would have been beneficial to evaluate more? And why

did they only evaluate systems supported by Federal funds?

Mr. HAMMERSCHMIDT. There were three systems that were evaluated that there were substantial contributions for Federal funds

going into. And we had contracted with an independent contractor

to evaluate those systems that have already been supported for

that purpose with Federal funds, rather than bearing additional

costs to look at new systems to see if they would meet our needs.

And of that, the Wisconsin Livestock Identification Consortium was

selected based upon that recommendation from that independent

contractor.

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Mr. HAYES. However, that would not preclude if there were a

better idea within or without of this room. Those better idea folks

could come forward with it as well?

Mr. HAMMERSCHMIDT. And it doesn’t preclude States from using

their systems, which we are in the process of reviewing those systems and certifying those systems for use as well.

Mr. HAYES. OK. I know my hog and poultry producers are interested in being able to identify their animals in groups or lots. Is

this something USDA thinks could be accomplished for these species that move in groups?

Mr. HAMMERSCHMIDT. Yes, definitely.

Mr. HAYES. Do we have additional questions? I am going to ask

you first, but I have got to get Mr. Ross off of the corner and get

him on the same page with me.

Mr. PETERSON. Thank you, Mr. Chairman.

Just to follow up a little bit, I still am concerned, and we have

had these discussions in my office, that this kind of approach you

are taking could leave us in a situation where we might have a situation like Mr. Ross talked about and that is stuff coming in all

kinds of different formats. And the cost of this system is not necessarily maintaining the database, it is getting it into the database.

That is where the cost is. And I want to go back to this, but I have

just spent 3 years on the Intelligence Committee dealing with this

where all of these different databases that can’t talk to each other

and they still haven’t gotten them together, because nobody was

out front and said, ‘‘This is how it is going to be done.’’ That is

what I am concerned about. I mean, I understand what you are

trying to get and you are going to say, ‘‘Well, you have got to give

us this information,’’ but if you guys don’t lay it down at the beginning, I think, and you just allow the private industry to go off and

do all of this different stuff, I just wonder what we are going to end

up. So I think you have got to take control of that end of things,

voluntary or mandatory, whatever it is.

Dr. CLIFFORD. I will let Mr. Hammerschmidt respond to that.

Mr. HAMMERSCHMIDT. I certainly agree in regard to the data elements, the definitions, the official description of those data elements for database purposes. It is critically important that those

be standardized. And that is really the role and function of the

USDA.

Mr. PETERSON. Well, everybody agrees with that, but what I am

concerned about is that you standardize how it comes in.

Mr. HAMMERSCHMIDT. Well, and certainly, that is all in the cards

as well, the format in which that information is transferred.

Mr. PETERSON. Well, not necessarily the format, I don’t know

what you would call it. But I mean, you have got all of these different things out there. If you allow all of that stuff to go forward,

as Mr. Ross says, you are going to force these little sales barns to

have all kinds of different readers. I mean, you have got to, kind

of like what we went through with GPS or we are going through

with the Europeans where they came up with a system, we came

up with a system, and it caused problems with our folks that

were—I think we have gone over that enough.

The other thing I wanted to ask about is the process. Apparently,

you went out and audited a bunch of these systems. Have you gotVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00118 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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ten that information back to everybody, the results of the audits

and how they stacked up and so forth?

Dr. CLIFFORD. Which particular systems are you referring to?

Mr. PETERSON. Well, as I understand it, you have gone out and

looked at, like, these folks that were here yesterday and audited

their different systems.

Mr. HAYES. Would the gentleman yield for a question?

Mr. PETERSON. Yes.

Mr. HAYES. I have lost track of my days, but one day, Chairman

Goodlatte and I, and I am not sure who else came into this room,

and there was a network of different data systems set up on the

table. Not yesterday, the day before. Did you see what the chairman and I saw, because what we saw was, and the chairman was

the animal. He picked up a tag all of the way around, and that was

pretty impressive. Maybe we ought to turn that over to Intel folks.

Mr. PETERSON. SI International, the independent firm that did

this review, has that information been given back to everybody?

Dr. CLIFFORD. Not yet, sir. We are reviewing that from a standpoint of what can and can’t be released to different individuals. We

will be doing that soon and be getting back to those that were involved.

Mr. PETERSON. You can’t tell us when that is going to happen?

Dr. CLIFFORD. No, sir, but we hope to do that very, very soon.

Mr. PETERSON. And one other thing that I think is going to cause

you problems, and this group picked this Wisconsin deal, but when

people find out that this has been in Canada, that it was in Canada all of the time and it just was transferred recently to Fort Collins, you are going to have a bunch of Members out of the House

and the Senate raising hell about this like they did with the Canadian beef that came across the border in New York or wherever it

was. I just think you have got a political problem on your hands

with this when people find out about this. I don’t think people

know that this was in Canada. It has been in Calgary right since

the start, as I understand it.

Mr. HAMMERSCHMIDT. Certainly the company that is based out

of Raleigh, NC has a data center in Calgary. As far as hosting that

application, I think from a technology standpoint, systems can be

housed almost anywhere in the world.

Mr. PETERSON. I understand that. Given all of the sensitivities

that we have with the Canadian cattle and the BSE, I am not sure

that was the greatest political move that was made.

Mr. HAMMERSCHMIDT. From a computer technology perspective,

we certainly don’t think it is an issue.

Mr. PETERSON. Right, and I don’t disagree with that.

Dr. CLIFFORD. And the system that we are using is housed in

Fort Collins now.

Mr. PETERSON. Yes, I know it has been moved.

Dr. CLIFFORD. Right.

Mr. PETERSON. Yes.

Thank you, Mr. Chairman.

Mr. HAYES. I will give you a minute and a half while Ms.

Herseth is getting her questions.

Mr. ROSS. Ninety seconds. I was just wondering why I worked so

hard to get here, now I know: for these 90 seconds.

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Let me go to the privacy issue. I am very concerned about the

issue, as my cattle farmers and ranchers are in my district. I think

it is important that we be able to trace cows when we need to trace

them for the purpose of trying to eradicate or stop a disease. But

I strongly believe that that information should never, ever be

shared under any other circumstances with anyone, other than

USDA when they are trying to trace a cow to determine if other

cows have been diseased. And I just want to find out what the official position of USDA is on the privacy part of this.

Dr. CLIFFORD. Well, sir, we are very concerned about the privacy

issue as well, and we know the concerns out there that have been

raised from producers about this issue. And we are looking at all

of our options with regard to that, legislation being one of those

possible options. So we are very concerned about it, and we are

looking at it as well. And the information we will be asking for is

minimal information with regard to our ability to do traceability of

animals for disease purposes.

Mr. ROSS. So are you confident that the information will remain——

Dr. CLIFFORD. We are looking at every possibility to make sure

that that information remains confidential. We are looking at every

option that we have, sir.

Mr. ROSS. I think that is very important, and I would just urge

USDA as they move forward with this to really address the privacy

issue.

One last question, and that is if we could go back to the cost,

what percent of the costs do you see USDA assisting cattle producers, in terms of subsidizing the cost of implementing this equipment, this program, or are we just hoping they will just dig in their

own pocket and do it voluntary because you all suggested that they

do?

Dr. CLIFFORD. Let me let Mr. Hammerschmidt respond, but I

don’t think we actually have necessarily a direct percentage cost.

It depends upon some issues.

Mr. HAMMERSCHMIDT. Right. Again, if we look at all costs, the

cost of working cattle, to tag the cattle, and things like that, the

cost gets extremely huge. We are looking at USDA having the responsibility to provide funding for the infrastructure and more the

cost-sharing identification devices and things like that to be on the

producer side. I believe that has been provided in previous testimony. So that is kind of the cost sharing. To come up with a percentage, it would certainly depend on what is used in coming up

with that cost, the total cost of the National Animal Identification

System.

Mr. ROSS. So it is kind of going to be difficult once it is implemented in terms of being able to tag all of the cattle. But once they

are tagged, as cows are bought and sold and as they are born and

vaccinated, it would just be another step in the vaccination process

in terms of tagging them at that point. But generally, just the actual cost for the tag is all I am speaking to. Do you have any idea

of what percentage of the actual cost for the equipment, if you will,

to tag, as I call it, would USDA pay and how much would the cattle

producer or small farmer pay?

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Mr. HAMMERSCHMIDT. In regard to the identification devices, at

this point in time, we are looking at the producers providing the

cost or covering the cost of those identification devices. That is basically the way we have arrived at the budget.

Mr. ROSS. And so what is it that you all are paying for?

Mr. HAMMERSCHMIDT. Part of the infrastructure, resources, like

at the State level to the cooperative agreements. A lot of that is to

develop the systems and provide resources to help collect the data

and things like this. Really, in a lot of the programs, the States

provide a lot of the assistance in carrying out the programs. The

technology at the marketplaces and other locations where cattle

and livestock are marketed, providing the technology or the equipment necessary to collect animal movement data. We need systems

that will allow individual producers to report animal movement

data and things like that.

Mr. ROSS. Well, let me just clarify. In terms of the cost of the

equipment that the producer is going to need to sign up for this

voluntary program, there is no help from USDA? The money we

have been talking about, the tens of millions of dollars we have

been talking about, basically, is just to cover the bureaucracy that

you all are creating because of all of this?

Dr. CLIFFORD. We are covering the database type issues. And

how you recover it and how you implement that system, the producer would be responsible for the individual identification device.

Mr. ROSS. Mr. Chairman, thank you for your patience.

One final follow up, and that is, for example, the sale barn that

needs the scanner, the reader, and to get that data transmitted to

you, who is going to pay that cost?

Dr. CLIFFORD. That can be covered through some of the cooperative agreements that we would be putting out money to through

the States and these requests.

Mr. ROSS. Well, I would encourage you to really look at doing

that. And I would also encourage you to go back and look at possibly trying to find an incentive to these cattle producers, especially

if it is going to be voluntary. I think it is important that we provide

an incentive by covering at least some of the cost for each ear tag.

Thank you, Mr. Chairman.

Mr. HAYES. Be sure and leave the light on at least when Ross

is asking questions, will you?

Ms. Herseth.

Ms. HERSETH. Thank you, Mr. Chairman.

And I do have just some initial comments. I apologize for being

late, so some of my questions that I pose here at the end may be

a little bit redundant, but I want to pose them, because they have

been questions that some of the producers back in my State of

South Dakota, have inquired about.

Sort of in conjunctions, we have had some meetings in the last

couple of weeks with regard to the BSE surveillance program. And

then of course, we had the hearing, as you know, earlier today with

regard to Country of Origin Labeling. So there is an interrelatedness here, of course, for all of these issues. And I have heard, as

I mentioned, from my constituents on this issue over the past several months, and most of them support an animal ID system in

this country. And I think the consensus would be that it be volVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00121 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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untary certainly in its initial stages because of concerns about the

costs and where that burden rests fairly heavily with producers

and producers in South Dakota that are already concerned that

they don’t have a level playing field in the marketplace. So I think

that it would provide some positive benefits to producers, but we

need to, I think, be clear about what an animal ID system is and

what it isn’t.

Animal ID is not a marketing tool, unlike Country of Origin Labeling being a marketing tool, among other things, and important

as it relates to other issues. I also think it is not a substitute, in

my opinion, for mandatory Country of Origin Labeling for meat

products in the United States. I strongly support mandatory Country of Origin Labeling for a host of reasons, reasons that are different from those which influence my support for an animal ID system of some kind. None less than the ramifications that our current trade policy will have on livestock producers in South Dakota

and throughout the region their ability to distinguish their product

from an increasing tide of imports.

I point this out because I don’t want opponents of mandatory

Country of Origin Labeling to try and muddy the water and say

they are providing producers with marketing tools by supporting

animal identification systems, whether that be mandatory or voluntary. Also, I don’t think the animal ID system is so much a consumer information issue. That, again, I think comes down to Country of Origin Labeling.

What this is is an animal health issue. This information will help

protect U.S. producers from the devastation of the introduction, either innocently or maliciously, of a dreaded animal disease in this

country. We have seen from some of our European friends struggle

with several horrific outbreaks of animal disease that has devastated much of their animal agriculture. In the past few years,

Great Britain and mainland Europe have had to deal with the

scourge of foot-and-mouth disease. The damage to our livestock industry of such an outbreak in this country would be astronomical,

and certainly, for States like South Dakota, where our single largest industry is the cattle industry. So this program with an animal

ID system could help mitigate that damage. I think that is clear.

We are also very familiar with the BSE issue, as I mentioned.

This committee, in conjunction with the House Government Reform

Committee, held a hearing on that issue last week. And a fully implemented and trustworthy animal ID program in this country

would be of great benefit if that disease is ever detected in a U.S.-

born cow.

While I acknowledge the potential benefits of the program, we

need to make sure, as I think some of the comments and questions

that have been posed are trying to get out, that any such program

is structured properly. I would like producers to have considerable

say in how the program is developed and operated, including small,

independent producers. But USDA must be the keepers of the information. As some of the questions were getting at as it relates

to the liability issues, the privacy issues, producers’ operations and

information about them must remain confidential, and that is jeopardized if this program is contracted out to any private entities.

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Several States, including South Dakota, already have a system

of identifying livestock, and that is the hot iron brand. This approach has worked well in South Dakota for over 100 years to identify livestock ownership, and I wouldn’t want any national identification program to undermine that popular system. So my question is has that been part of your discussions as it relates to programs already in place, whether it be a hot iron brand, whether it

be producers in a certain State or region or certain farm organizations that are currently looking at this, trying to be proactive, trying to anticipate the problems but yet are now concerned that if all

of a sudden a program through USDA, voluntary or mandatory, requires them to have a certain type of technology that they are

using of significant cost to them. I wish I had been able to attend

the presentation yesterday, because I know that advancements in

technology can certainly help us implement this system at the

same time our smaller producers, especially ranchers in western

South Dakota, are utilizing a system that works well for them.

Dr. CLIFFORD. I am going to let Mr. Hammerschmidt address the

issue with regard to the brands.

Mr. HAMMERSCHMIDT. There has certainly been tremendous dialog on how we can build upon or take advantage of the brand

states. They have got the infrastructure in place to administer the

branding program. We really think the opportunity there for them

to utilize the system that we are bringing forward in the National

Animal Identification System might be easier there in some of

those States because they have that infrastructure in place. Realizing that the brand is ownership based, what we are needing to do

for animal disease surveillance and monitoring is tracking the animal based on its movement. So while there is different objectives,

we are very confident that those brand states will be able to be a

tremendous asset to the National Animal Identification System, by

all means.

Ms. HERSETH. A follow up, even though my time has expired, one

quick question, Mr. Chairman?

Mr. HAYES. You are going to go on the same list with Ross, but

one more short question.

Ms. HERSETH. That being said, as I stated in my earlier comments, the input from the producers and certainly those from

States that utilize the brand, the plans for USDA to formally, or

informally, for that matter, take the input from producers that

have the concerns, has that been discussed as well? Or how has

that been implemented into your discussions thus far in developing

the program?

Mr. HAMMERSCHMIDT. As we go forward, we want to continue to

maintain what we refer to as species working groups, so the producers can be well represented and provide input to the steering

committees and also our industry representatives. So we certainly

want to maintain that infrastructure and even strengthen it to

make sure that we get input and direction from the grass roots producers, by all means.

Ms. HERSETH. Thank you.

Mr. HAYES. I thank the lady for her comments.

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Gentlemen, we thank you very much for your participation and

look forward to your continued participation as we go forward. And

do you have any other questions, Mr. Stenholm?

Mr. STENHOLM. I don’t want to get on your list, Mr. Chairman.

Mr. HAYES. It is a prayer list.

We thank you all and would call the second panel to the table.

While everybody is coming up, I will go ahead and introduce our

next panel of witnesses. We will probably have votes at about 3

o’clock, so we will try to keep things moving along.

Our second panel will be Mr. Mark Armentrout, who is a member of the Beef Information Exchange of Alpharetta, GA; Ms. Jodi

Luttropp, coordinator of the National Farm Animal Identification

and Records of Brattleboro, VT; Jim Akers, coordinator of the

Southeastern Livestock Network, LLC of Lexington, KY, who is accompanied by John Stevenson, director of Kentucky Beef Network

of Lexington on behalf of the Southeastern Livestock Network,

LLC. And Mr. Chandler was going to introduce you and unfortunately, he is called away to other duties, but we welcome you on

his behalf.

If you all are ready, Mr. Armentrout, would you please begin?

STATEMENT OF MARK ARMENTROUT, MEMBER, BEEF

INFORMATION EXCHANGE, ALPHARETTA, GA

Mr. ARMENTROUT. Yes, sir.

Mr. Chairman and distinguished members of the subcommittee,

thank you for the opportunity to participate in this hearing on the

development of the National Animal Identification System. I am

Mark Armentrout, chief operating officer of AgInfoLink Global, a

member of the Beef Information Exchange, also referred to as BIE.

I am accompanied today by fellow founding BIE members representing MicroBeef Technologies, IMI Global, eMerge Interactive,

and APEIS.

Today, I would like to outline the purpose and benefits of BIE,

and industry solution that accomplishes the requirements of the

National Animal Identification System and fulfills the needs of

both public and private interests.

Safeguarding the health of the national livestock herd while protecting the interests of America’s animal producers is vital to animal agriculture and all U.S. citizens. We recognize that by protecting the animal agriculture industry, we promote human health,

provide wholesome, reliable, and secure food resources, mitigate

national economic threats, and enhance the sustainable environment. Central to achieving these goals is an efficient and effective

animal identification program with 48-hour trace-back capability,

which protects producer and processor rights by preserving data

privacy and data confidentiality on all animals in the national

herd.

The critical importance of these issues is precisely why the competing companies represented here today formed the Beef Information Exchange, an industry-driven solution that advances and accelerates a private sector, self-regulated animal identification system that it satisfies both Government and industry requirements.

Beef Information Exchange is a broad-based collaborative effort of

leading data service providers with over 35 years experience trackVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00124 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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ing millions of individual animals. BIE began organizing in September 2003 to meet the need for a national trace-back system

while ensuring data privacy for producers. BIE builds a bridge between the livestock industry and government’s need to rapidly respond to and control an animal disease outbreak.

Working within the National Animal Identification System

framework amended by comments submitted by BIE to the USAIP

Steering Committee, BIE creates data-sharing standards and provides a secure technical platform to facilitate information exchange

while ensuring data confidentiality and protecting the privacy of

existing trading relationships. The key to the BIE solution is the

data trustee infrastructure. A data trustee is a private industry

role that operates as an information clearinghouse, or escrow

agent, for official data. The data trustee sits between producers

and government with data being pushed from a licensed network

of commercial data service providers to a private sector data repository. The official data are securely stored at the data trustee location and can be accessed by State and Federal health agencies

when a disease trace-back is initiated.

Through the data trustee infrastructure, health officials will be

able to pull the information they need for the target animal from

the data trustee on demand while the data relating to animals not

involved in the investigation remain secure in the private sector

system. Furthermore, data trustees enable producers and processors to receive the much-needed trace-back confirmation reports

they require in the normal movement and commerce of animals.

The principle benefit to the BIE model is that private data are

kept confidential until needed in an animal health investigation,

helping to protect the security of private industry. BIE is inclusive

by design, which allows producers to adopt and make use of technology-neutral animal identification methods and systems that best

serve their operation’s needs.

We have plans to expand our membership. Reaction to the BIE

model from producers and processors, animal health officials, and

Members of Congress has been overwhelmingly positive. Due to our

existing system’s infrastructure in implementation expertise, the

BIE concept helps reduce the cost of implementing and operating

a National Animal Identification System and produces tangible financial benefits to farmers and ranchers that can assist in offsetting the cost of the system.

Yesterday, BIE members conducted a live demonstration of the

BIE system for members of the House, their staff, and USDA officials. The demonstration effectively established that competing in

dissimilar database systems can be seamlessly linked and that we

are currently capable of collecting, storing, and reporting the required data at the speed of commerce to meet the 48-hour traceback objectives. We are confident that the BIE model is the most

efficient, practical, and readily implementable solution for animal

agriculture.

As pioneers, innovators, and leading data service providers, we

understand what works when tracking individual animals. While

many alternative solutions may appear to exist, our combined intellectual property, implementation expertise, and proven systems

mean that BIE members are uniquely qualified to implement a priVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00125 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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vate sector solution and can do so more quickly, efficiently, and at

a lower cost than alternatives, including the public sector.

Mr. Chairman and members of the subcommittee, we respectfully

submit that the BIE model provides the best alternative for implementation of the NAIS and that it is ready to implement in scale

immediately. BIE members are committed to a private sector animal identification system, and we look forward to working cooperatively with USDA, Congress, and all industry stakeholders in implementing the NAIS.

We thank you and look forward to answering your questions.

[The prepared statement of Mr. Armentrout appears at the conclusion of the hearing.]

Mr. HAYES. I thank the gentleman.

Ms. Luttropp.

STATEMENT OF JODI LUTTROPP, COORDINATOR, NATIONAL

FARM ANIMAL IDENTIFICATION AND RECORDS,

BRATTLEBORO, VT

Ms. LUTTROPP. Thank you, Mr. Chairman and committee members. My name is Jodi Luttropp, and I am the coordinator of the

National Farm Animal Identification and Records Program.

National FAIR is an animal ID and traceability program in place

and working today that incorporates radio frequency identification

tags. The National FAIR program provides each animal with a

unique identification number and uses electronic RFID ear tags to

identify and track the animals. Similar to a Social Security number

or a car’s VIN number, that stays with the animal for its lifetime.

The Holstein Association USA, Inc. has worked cooperatively

with USDA/APHIS Veterinary Services since 1999. Our charter, as

stated in the agreement, was, ‘‘To design, develop, and demonstrate

a pilot project for a national livestock identification program that

will track livestock from farm-to-farm, farm-to-market, and market-to-processing unit.’’ We have accomplished our goal. The National FAIR program has been identifying and tracing animals

from birth to slaughter for several years. We have an infrastructure already in place consisting of a comprehensive database, a

dedicated tag provider, and a coordinated field staff. We have the

capability to start putting in place today what the U.S. Animal

Identification Plan calls for implementing in 2006. National FAIR

fulfills the standards outlined by the U.S. AIP.

When the animals are identified, the information is entered into

the National FAIR database. Currently, there are well over 1.3 million animals in the National FAIR database. Information stored in

the FAIR system includes when and where the animal was born,

what locations the animal has been at, such as farms, markets, or

processing plants, and what livestock the animal has been contact

with, and eventually where and when the animal was slaughtered.

The information on the National FAIR database allows for the tracing of animal movements from birth to slaughter in as little as a

few minutes. As a part of our system, tag readers designed to read

the electronic tags are already in place at several markets and

processing facilities across the United States.

The National FAIR system includes a security module that enforces the ‘‘Rules of Access’’ for information. Currently, the State of

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Michigan has adopted privacy rules that allow producers to view

information regarding their premises or animals but does not allow

them to view other producers’ information. Those at the State government level have access to information required to perform identification and traceability during a health emergency. The security

module deployed by National FAIR is a robust component capable

of allowing flexibility in defining security access to the information.

Furthermore, the structure of the National FAIR database is a dynamic and flexible system compatible with many her management

software programs and allows for the inclusion of new technologies

as they become available.

It is critical to understand that the National FAIR program was

developed by producers for producers. The National FAIR program

is a part of the Holstein Association, which has 35,000 memberproducers throughout the United States. Those producers govern

the Association, and only adopt policies and procedures that work

in the fields and are beneficial to the consuming public. Those

same producers have, through our Association, invested over $2

million in the development of this program.

It is our belief that animal identification for production animal

agriculture in this country needs to be mandatory. Additionally, it

can not be technology neutral. The RFID technology employed by

the National FAIR is the most accurate, efficient, and cost-effective

form of animal ID used in the world today and will likely be for

many years in the future. Without a mandatory animal ID program

in this country, we will continue to be denied market access to certain countries throughout the world.

Producers will resist if the Government controls an individual

animal identification system in the United States; therefore, it is

important that a producer-supported and driven program be responsible for animal traceability. The Holstein Association has

been identifying animals in this country for 119 years and is recognized throughout the world as a leader in animal identification.

This country’s animal agriculture producers, including our 35,000

members, are at risk today with the threats of additional cases of

BSE in this country and the threat of foot-and-mouth disease. Although the National FAIR program will not prevent any diseases

from occurring, it will allow for immediate isolation and tracking

of animals.

The National FAIR program is ready today to meet the standards for a mandatory, national ID system in the United States. We

urge your support of this important initiative.

Thank you very much, Mr. Chairman and committee members.

[The prepared statement of Ms. Luttropp appears at the conclusion of the hearing.]

Mr. HAYES. Thank you for your comments.

Mr. Akers.

STATEMENT OF JIM AKERS, COORDINATOR, SOUTHEASTERN

LIVESTOCK NETWORK, LLC, LEXINGTON, KY

Mr. AKERS. Thank you, Mr. Chairman and committee members.

We appreciate the opportunity to address you today.

John Stevenson and myself represent the Kentucky Beef Network and the Southeastern Livestock Network. The Southeastern

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Livestock Network is a partnership formed between cattlemen’s organizations in 10 States across the Southeast, State animal health

officials, marketing organizations, and land grant extension services throughout that region.

We are no more excited about the prospect of entering into the

most far-reaching effort to regulate livestock production in history

than the producers are. However, an increasing number of us and

them realize the value and inevitability of a national animal ID

system.

Animal agriculture, and specifically the beef industry, is unique

from so many other farming enterprises in that it operates without

a safety net of subsidization and depends solely on market forces

for its livelihood. This fact has created a fierce independence that

ensures product differentiation and a demand-driven pricing structure. There is no question that integrated, more controlled production and marketing systems will easily attain compliance, as they

typically, as a part of their business structure, have much more

traceability than is required in the National Animal Identification

System.

So where is the challenge? I think the challenge is in our local

sale barn or auction market and on the independent small, familyowned farm. We have to focus our energies on those challenges, not

on the simple pieces of this undertaking.

It has been suggested by some in public forum that the beef industry should explore more efficient business models for our industry, like the pork and poultry industries have. Mr. Chairman and

members, I think the family farm has experienced about all that

we can take, and we are not willing to concede that to achieve national animal identification. The family farm is too important socially and economically to let this happen.

In Kentucky, we have invested heavily and wisely in helping

farmers transition from tobacco to livestock production, and livestock production remains their only mainstream alternative to stay

on the family farm. Our auction marketing system is extremely important to maintaining that structure.

The Southeastern Livestock Network has identified seven important functions that they would provide and focus their energy on.

Bring everyone at the table that is impacted by the implementation

of National Animal Identification System and attempt to avoid

those unintended consequences that often occur when one segment

implements a program. Identify the useful technologies that you

saw across the hall yesterday and bring those useful technologies

to the everyday producer and markets that do not have the ability

or the volume to enter that room and assess those technologies or

equitably make their own deal.

Create linkages in the industry that provide data-sharing capabilities to help create that value that would drive the system. In

order to do that, there must be independent bodies to ensure that

uniformity across regions and cooperation between these types of

groups. We recognize that we have to work closely with the State

animal health officials that, in our opinion, should be the cornerstone of national animal ID. It should be their responsibility to ensure that systems in operation do meet the compliance standards

of NAIS.

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(3) We need to provide an inexpensive platform for the integration of existing systems at work in our markets, on farms, and in

our processing facilities to start the process and implement NAIS.

The confidentiality concerns are the number one concern regardless

of which segment of this undertaking you talk with. The concept

that we have discussed and proposed to you is one that would allow

the data to remain in the ownership of the private producer until

that information was needed to answer a question relative to disease traceability.

Finally, to communicate the needs of Federal funding and provide structure to efficiently put that funding to work. Without

question, the number one priority needs to be the implementation

of the premise ID system and supporting our State animal health

officials in getting that implementation underway and behind us.

Those State animal health officials certainly need support for the

surveillance and compliance activities that we feel should be their

role. The data collection infrastructure that will be required in our

marketing system will require Federal support as well as the education and communication needs of our markets and our producers.

In closing, we strongly support the role of USDA and APHIS in

providing compliance analysis, surveillance, and oversight of this

system. We feel it inevitable and necessary to work with them to

establish realistic benchmarks and timelines to assess the performance of this system.

Mr. Chairman, the factor that will define the success or failure

of NAIS is the level of producer buy-in and participation. I think

we all know that. By allowing producers to participate in ownership of the system and maintain a level of control, I think we can

achieve that objective. Thank you.

[The prepared statement of Mr. Akers appears at the conclusion

of the hearing.]

Mr. HAYES. I thank the gentleman for his comments.

Mr. Ross, while you were out of the room, we may have found

somebody that, at least temporarily, is on your side.

Mr. Stevenson.

Mr. STEVENSON. I have no comments at this time.

Mr. HAYES. All right.

Again, I thank the panel. And a question that I want you to

think about, you don’t have to answer it know, if we don’t ask you

a question that you want to answer when we get through, that is

going to be any questions that we didn’t ask you.

The gentleman from Arkansas, Mr. Ross.

Mr. ROSS. Let me start with Mr. Akers, if I may.

What do you see as the biggest difference between your position,

the producers, the cattle farmers’ position, and that of the USDA?

I mean, what is the biggest obstacle we have got to try and implement this in as smooth a way as possible.

Mr. AKERS. Well, I think there are a couple, excuse me, basic differences. Number one, where we appear to be heading with USDA

is that all of this information residing in a national repository as

opposed to connected, communicative databases out in the industry. That is one major difference. Second, it appears that many of

the resources that have been requested to this point and appear to

be coming in the future continue to focus on the upper end of this

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system, the databases, on a national level as opposed to where the

real challenges are that I outlined in the data collection mechanism

out in the country.

Mr. ROSS. Let me, if I might, just briefly go to Ms. Luttropp.

In your testimony, you indicated that, like I, you believe it needs

to be mandatory. Can you expand on that any? I mean, this is the

big debate voluntary versus mandatory, one technology versus multiple technologies. And for the life of me, I can’t understand why

anybody would want to have multiple technologies just to simply

complicate life. Again, it goes back to when you go to the store to

buy a VCR tape or a DVD tape or a software program for your computer and when you get home, they are going to work. It is universal. And I think it is very important that we have that. And is

there anything else you could add to your testimony to try and help

me convince some of these folks who don’t see it our way?

Ms. LUTTROPP. Keep in mind I am speaking on behalf of the Holstein Association, which is a producer organization of 35,000 farmers out in the countryside, that believes this needs to be a mandatory system. I need to have my car inspected in the State of New

Hampshire in order to drive it on the roads. My family farm in

Wisconsin has to have their dairy operation inspected once a year

to ship milk. There are just ways and regulations of doing business.

Mr. ROSS. You mean they don’t tell you that those things are voluntary?

Ms. LUTTROPP. No, sir. No, sir. And I think we need everybody’s

participation in this to have an effective system that can accurately

trace back in 48 hours. We need everybody’s involvement. We have

also had experience in a mandatory system in the State of Michigan. Northeastern Michigan, where they are attempting to eradicate tuberculosis, we administered that system there, and it is

mandatory radio frequency ID tags in northeastern Michigan, and

the system works. And there was no major upheaval from the producers. They needed that verification in order to have markets for

their cattle. And I think that is the situation we are faced with

today. We are still in a crisis in the bovine business. Yes, some of

the media hysteria has died down, but we are still not able to ship

meats, genetics around the globe, and every day that goes by that

those markets are denied, it is harder and harder to get them back.

Mr. ROSS. Ms. Luttropp I am glad you are here today. Thank you

for expanding on that.

And Mr. Chairman, this will probably come as a surprise to you,

but I yield back what appears to be the balance of my time.

Mr. HAYES. I thank the gentleman.

We will get another shot at Ms. Luttropp, who is really on my

side, but she just hasn’t had it presented to her in the proper way.

If I might take a moment, she has a group of folks who are on the

program, so it makes really good sense for her for everybody else

to come along and be a part of the benefits that she has realized.

I am hearing that our other folks have realized the same thing,

and they are anxious to take part in the benefits as well. The question then becomes do you take the wisdom of the market and the

marketplace and come up with a system or do you bring it to

Washington and reduce it down to its worst common denominator

to do it? So as I told you, she is on my side.

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Ms. Herseth.

Ms. HERSETH. Thank you, Mr. Chairman.

A question for Mr. Armentrout and Ms. Luttropp. The USDA has

been out to audit your systems?

Mr. ARMENTROUT. No, they have not.

Ms. LUTTROPP. They have at ours.

Ms. HERSETH. And for yours, I guess, they haven’t been out as

they indicated, but they are going to schedule an audit at any time

of your system?

Mr. ARMENTROUT. They are welcome to come any time they want

to do it. We have demonstrated the system, but these were all privately financed and developed by the owners of these companies,

the systems.

Ms. HERSETH. And Ms. Luttropp, when was the audit conducted

by USDA of their system?

Ms. LUTTROPP. The audit was conducted in late May.

Ms. HERSETH. And you have heard back from USDA about their

conclusions, thoughts?

Ms. LUTTROPP. Up until this moment, we have heard that they

have selected other systems for interim solutions regarding premises ID.

Ms. HERSETH. But you haven’t received any feedback from USDA

at all with regard to the audit?

Ms. LUTTROPP. We have not, ma’am.

Ms. HERSETH. I think that is all I have at this time.

Mr. HAYES. I thank the gentlelady.

David, would you like to question?

Mr. SCOTT. I would like to.

Mr. Akers represents the cattlemen from Georgia, is that right?

What differentiates the Southeastern Livestock Network from any

other private company offering data services?

Mr. AKERS. Well, I think there is a clear differentiation in what

the Southeastern Livestock Network is attempting to do for the

members of the organizations and the average producers in that it

attempts to go out into that technology marketplace that you all

saw yesterday and sort through that multitude of choices that are

out there and find those best pieces and use the collective volume

of those small producers scattered all over the Southeast and put

those solutions into a package that can be utilized by those producers cost effectively. There certainly is no effort by that southeastern

group to force anyone to use their services, but they feel there is

a responsibility to attempt to do that for those independent small

producers and markets.

Mr. SCOTT. And can you explain the interaction of commodity organizations, like extension, State government, and other partners?

Mr. AKERS. Well, as I said in my testimony, we feel like it is important to have everyone at the table on something that is as historic as the decisions that will be made in national animal ID. I

don’t think anybody disagrees that the extension service is going

to experience a considerable need for educational programs that are

going to have to be delivered to bring our producers along. The

State animal health officials certainly have a huge responsibility

that resides within their office, and many of them have not been

involved in the national discussions at this point. But we have choVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00131 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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sen to bring the markets and those producer organizations to the

table already and start to talk, not argue, about whether we are

going to do this, but start to talk about how we are going to do this.

And I think that is a very, very important function of that organization.

Mr. SCOTT. All right. I think you made the assertion that a more

loosely structured ID device distribution system would yield more

useful data over the long run. Could you expand on that, explain

that?

Mr. AKERS. Yes, sir, I would be glad to.

I think this goes to a little bit of the discussion we have had

today of the voluntary versus mandatory. I think what we have

tried to espouse is that what we better be focusing on is soliciting

the buy-in and support and the participation of our producers. It

is our concern that if we expend our effort to create a completely

watertight, perfect system on paper and march out of Washington

with it, that everybody is going to run from it, nobody is going to

use it, and those that do may well not provide wholly accurate information to that system because of their concerns. But if we work

on creating a system that has value to the producer, we allow them

to come to that system because of that value, and we expend our

energies in making that simple, effective, and in the long run, we

would have provided a much more accurate and a much larger pool

of data to answer questions about disease surveillance.

Our organization, as well as the others around the country that

hold those thoughts, certainly understand that part of that deal

has to be that the system must meet the stated objective for disease traceability. There is no question and no argument about that.

Mr. SCOTT. But are you not proposing to shut out other private

industry providers out of a large region of the country?

Mr. AKERS. Certainly not, sir, and this is a large region. You are

looking at roughly 25 percent of the people and 20 percent of the

cattle in the beef industry alone. As I said before, we have never

proposed that that be the only offering in that region. Certainly,

there are entities, markets, and producers within the southeastern

region within our own State that probably will choose the services

of other companies, whether that be because it better fits their

business model or business arrangements already in place. We are

not particularly concerned about those bigger folks that can make

those deals on their own. It is folks like my family and many of

your families that are sitting back home and don’t have the ability

to walk into that room that you saw yesterday and analyze that or

the volume to be able to equitably purchase those services.

Mr. SCOTT. Well, Mr. Akers, you are certainly knowledgeable and

you equip yourself very well before this committee. I certainly commend you. If I may conclude with one point. Just to go back to the

Southeastern Livestock Network, just to finally wrap up my questioning with you, could you give us a snapshot of what the Southeastern Livestock Network’s approach would like in a typical livestock market from the perspective of the producer and then from

the perspective of the market operator?

Mr. AKERS. OK. The work that we have done in Kentucky and

in other locations around the Southeast has focused on the attempt

to make this as transparent as possible. It is our contention that

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all of the data necessary to satisfy national animal ID is collected

in the context of our marketing system already at some point. Our

challenge is to incorporate premise ID and unique animal ID into

those data collection systems and pull the very limited, appropriate, required information out of those systems on the other end,

protect them, and provide access to them to those appropriately requiring that access.

We have done demonstration sales around the region, and we

have chosen RFID electronic ID technology, putting those scanners

at the location where that commerce that we want to track takes

place, and that is that auction ring. We have developed, working

with private industry companies, very accurate systems of recording those animal IDs as those animals move through the auction

arena, assigning those numbers into the record keeping system

there at those markets that day, and then facilitate in pulling that

information out at the end.

What does the producer see? Nothing, I hope. I don’t want that

experience of him coming to that free commerce location to be any

different than it was before this. He knows that he is participating

in national animal ID and he has to be able to do that willingly.

But in terms of the technology creating a burden or a slowdown in

that market, we can’t have it, and I don’t think we have to.

For the market operator, we have got to spend time working on

this, but the technology does exist and improves every day to allow

that fluidity of data collection to take place in the context of the

way they already do business. It doesn’t have to be a separate function. It doesn’t have to be a different system operating. I think it

can all work together.

Mr. SCOTT. Thank you very much. Thank you for your generosity, Mr. Chairman.

Mr. HAYES. Thank you, sir.

Mr. Stenholm, do you have additional questions?

Mr. STENHOLM. Thank you, Mr. Chairman.

Carrying on with the last thought, Mr. Akers, and the old saying,

‘‘Let us not get the cart before the horse.’’ But I have heard you

say now quite eloquently as you have described the process, and

could you all kind of speculate with me or based on your best information what we are talking about in cost per animal? And then

give me your best shot as to how that cost should be shared. What

part should the Federal Government, and perhaps State government, the producers, the livestock auction, processors, all of those

that will benefit from this program, have you given any thought to

how that cost might be shared? First off, what are we talking

about? And then how would we share it? Do you have any thoughts

on that?

Mr. AKERS. I think that is a very fair question, sir, and I appreciate the accusation of eloquence. I don’t think I have ever had that

before.

Mr. STENHOLM. Don’t let it go to your head.

Mr. AKERS. Don’t worry. I typically get told that folks can’t understand what I say because of the accent.

We have spent quite a bit of time looking specifically at the

southeastern region, OK, and we feel like that is the region that

is the most challenging because of the dramatic concentration of

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small producers. We feel like the needs are very different when you

look at the brand states and the infrastructure that is already in

place in those locations. We have put numbers on paper and looked

at the number of livestock markets modeled after the Kentucky

program where the markets would share in the cost of equipment

just like the producers would share in the cost of the devices. It is

very easy to come up with, I think, a 5-year program that we had

initially put together quite some time ago that approached $100

million. All costs. OK. Everybody’s costs. Producers sharing the devices takes about half that cost out of that system. I think it is important to understand that regardless of whether we say mandatory or we want to talk about voluntary, in order to get this job

done, somebody is going to have to put that infrastructure in place

in those markets.

This is not going to happen on its own. I think everybody recognizes the need to talk about a voluntary program, because it is

going to take a long time to do this regardless of what we say

today. And we feel like that Washington needs to be looking at paying for that infrastructure either in a cost-shared program or wholly, depending on how rapidly this needs to be pushed.

I don’t see a lot of resistance in the countryside to producers

sharing in the cost of the devices, as long as they have got some

control of the information that results from those devices. We also

feel like, and I outlined there, that there is going to be a tremendous need for ground level education and communications in these

markets and to these producer groups. And as always, education

and communication requires funding. It is not as expensive as infrastructure, but it does require some funding.

Mr. STENHOLM. On that $100 million cost in your area, let us put

that on a per animal unit. Are we talking cattle? Are we talking

horses and cattle? What are we talking about?

Mr. AKERS. When we sit down, and this has been quite some

time ago and put together that 5-year approach, it basically looked

at developing the infrastructure surrounding the need to do this for

the cattle industry, but building it in a manner that other livestock

species could certainly come on board without a lot of adjustment

or tweaking to that system, if you will. The 5-year plan included

the major species that would come on board, and in all honesty, at

that point, because of the flexibilities we are asking for in terms

of producer ownership and drive behind this, there was a lot of

cost-share written into that from the producer and industry side of

things.

Mr. STENHOLM. Ms. Luttropp, any comments or observations on

your part again on cost sharing?

Ms. LUTTROPP. From our perspective, we are looking for Government assistance in the development of the database systems used

on the State and Federal level. We also hope that our Government

can assist in establishing the reader infrastructure in the markets

and processing plants and installing those electronic readers and

getting them set up and really those readers there, once installed,

our experience has been that there isn’t a lot of labor involved on

top of that on a daily basis. The readers can do their thing untouched and deliver data to the database. I think the biggest area

of cost, and Mr. Akers touched on it, is the tags. There is a place

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where our producers are willing to chip in. It is in the tags. From

my estimates in talking to producers, they assume around a $5 cost

per head if that is the cost of the tag, a person to go tag them and

record the data. So if the producer is going to pick that up, that

is probably about a $5 per head contribution from the producers.

So to sum up, we feel that Government could help pay for the

system development, the databases, the readers, and the producers

are willing to cost-share on the tags.

Mr. HAYES. Thank you. I am not sure, we may have a vote coming up fairly soon, so I want you all to report back to America that

we have commonality in this committee, bipartisanship. And we

are all about you all.

The first question, can you explain how your approach, the system, will work to cover multiple species and, obviously, working

with other species beyond cattle? Did the guy selling the ear tags

for turkeys, is he still here?

Mr. ARMENTROUT. I can address that.

Mr. HAYES. Please.

Mr. ARMENTROUT. From our perspective, we currently are working with other species today. We have projects going on: swine,

sheep, bison, and cattle. Some animals you identify by group or lot,

some individually. Our systems work and handle those.

Mr. HAYES. No great challenge there.

Mr. Akers and Ms. Luttropp?

Ms. LUTTROPP. If I may just add, once the data standards are established and you have a unique ID number, it doesn’t matter what

you attach that number to, all you have got to do is track it.

Mr. HAYES. OK.

Mr. AKERS. I certainly agree, Mr. Chairman. I think as long as

you keep this about what we say it is about, it is about disease surveillance and a very limited amount of data, it is truly not an issue

once that species decides, No. 1, how they are going to identify

their animals, and No. 2, how they are going to record that data.

Mr. HAYES. Mr. Scott asked this question of you, Mr. Akers, so

you have answered it. The others of you, what makes you think

your approach stands out from the rest?

Mr. Armentrout?

Mr. ARMENTROUT. I think the approach that we have of it being

a private data trustee where these disparate system, whether it is

our system, their system, or whatever, is holding the data in a private repository and then when Government needs it, they can access that information. And we have the ability to go back, find cohort animals, or whatever, and enable you to do the 48-hour traceback while keeping the data in private hands. And we did demonstrate the ability to have different systems. We have established

the data-sharing standards and how that information is shared

back and forth.

Mr. HAYES. Well, one of the things that was particularly impressive was the amount of information that you had available within

your system, which was far greater than what USDA would need

to handle traceability and that sort of thing. I wish Mr. Ross were

here all of the time; he would be on my side by now.

Ms. Luttropp?

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Ms. LUTTROPP. A few key points, I think, that make us special

with National FAIR. One is we are producer-driven. 35,000 producers that we answer to and tell us what we need to do to make this

system work for them. Our system has been developed in cooperation with USDA/APHIS. We have received Congressional appropriation, but also, we have contributed matching in kind contribution from the Holstein Association members exceeding the amount

that we have received in Federal appropriations. Finally, our experience in animal health. I mentioned the Michigan system before

where we are attempting to help them eradicate tuberculosis. Our

system has been proven effective and been tested in reacting to

animal health concerns.

Mr. HAYES. Thank you, ma’am. And you all are doing a good job,

and that is probably why they were audited because of the Federal

funds.

Let us see. Again, Ms. Luttropp, you were talking about that you

were a mandatory animal ID person and that the U.S. was being

denied market access because of lack of mandatory animal ID. Mr.

Clifford said there were no countries. Are you aware of any that

are denying us access because we don’t have animal ID?

Ms. LUTTROPP. It is not the sole factor, however I believe it is

a factor.

Mr. HAYES. OK. One more question for you. You have heard

these folks explain how they can be technology neutral and still accomplish their goals, so talk a little bit more about your technology-specific position, which is softening.

Ms. LUTTROPP. RFID has been proven capable around the world,

and we have proven it to work in our National FAIR system. If we

want a system that is able to move at the speed of commerce, for

example, in a processing plant. I think that is the real litmus test

to systems. Mr. Ross had mentioned about having 20 different

readers there to check in animals. I have major concerns that inconsistencies are going to be very expensive for those processing

plants and farmers to deal with.

Mr. HAYES. Very, very good observation. And just in closing from

my standpoint, and Ms. Herseth I will get back to you and don’t

forget the ultimate question, here is my thought, and I apologize

for—this is not intended as a lecture, but just so that you have a

clear-cut understanding of where I am coming from on this. If you

were to say it is going to be absolutely mandatory and the Government is in charge, then all of a sudden, you are coming this way.

You are closing it down instead of opening it out. If these are technologies that are out there, and they are also represented by cups

around the table that you don’t even see in my hand, as soon as

the Government picks one, it kind of has the dampening effect of

those others disappearing. Now what I hear everybody saying over

and over again is that animal ID will be a very great asset to our

industry and our producers as it relates to traceability, safety, marketing, and all of those kinds of things. So what I see happening

is people are going to hear what you are saying because you are

the producers in the industry, and they are going to see the value

of this wisdom. If you go the other way and today the Government

says, ‘‘Do it,’’ then you give an inordinate amount of power to a

small minority, and I think it is a minority that don’t want to do

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this, to slow down the process. If it is a good idea, it is something

that we want to do in the best way possible and as quickly as possible, let us do it instead of waiting and hoping that this town will,

number one, do it, and number two, get it right. So that is where

I am coming from. We are pretty much in agreement, it is just how

we get there the quickest and with the best possible approach for

our folks back home.

Ms. Herseth.

Ms. HERSETH. The only comment I would add to the chairman’s

is that as we go about implementing this, as I think Mr. Akers has

articulated so well here today on behalf of not only those smaller

producers in Georgia but certainly producers of the same size of

family operations in South Dakota, that we acknowledge how they

are affected and that whether it is voluntary or mandatory, whether it is one technology or many, that we know that some have been

doing this very adequately with a brand system or others and that

we just don’t discount the input of our smaller producers. Because

whether it is this issue, whether it is Country of Origin Labeling

or other issues that have come into play, for me, all of these come

together and affect rural America and rural communities. It is not

just one size of operation that is smaller versus a larger. It is much

more. It has a broader impact than that, and that is why I want

their input to be adequately reflected as we develop and implement

the program.

Thank you.

Mr. HAYES. Back to the question. What question was not asked

that you would like to answer? We are heading down the home

stretch.

Mr. AKERS. Mr. Chairman, if I might.

Mr. HAYES. Please.

Mr. AKERS. I think it is important that you all understand——

Mr. HAYES. If I might interrupt you for a minute.

Mr. AKERS. Yes, sir.

Mr. HAYES. I have been hunting it for 5 minutes. You said on

the first page of your statement, ‘‘Regulation that changes the very

nature of that which it seeks to monitor is shortsighted and

wrong.’’ I think that was well said. Excuse me. Go ahead.

Mr. AKERS. Thank you. I wasn’t going to spend time on that

since it was on paper, but I appreciate you saying it out loud.

I think it is important for everybody here to understand that all

of these private sector pieces that you all have viewed this week,

the producer organizations that are represented here and groups,

like the Southeastern group, that have attempted to pull together

all of those impacted, with few exceptions, I don’t think there is

any entity in this room that is here to propose that they should be

the system. OK. I don’t propose to know what is right to do in

South Dakota or Nebraska, but we have got a pretty good handle

on how things are done in Kentucky and in the Southeast. I think

once we have those broad parameters, we need to go back and look

at how to achieve those objectives in the context of the way we do

business. They have been very effective of doing that in the dairy

industry. They ought to be able to continue that effort. There are

pieces and parts of that that are beneficial to all of us. The things

that we have done from a value-added standpoint work extremely

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well in our environment, and producers are accepting of them and

they participate. There are many, many others involved in this

around the country, and if we focused on pulling all of that together instead of reinventing it, I think it would move us way down

the road.

Thank you.

Ms. LUTTROPP. No further comment.

Mr. HAYES. She is there, I told you.

Mr. Armentrout?

Mr. ARMENTROUT. My only comment would be that when—and I

agree with you, Mr. Chairman. When we bring the private sector

into it and we see that these competing companies are there driving the cost of the service down, we survive because we provide solutions to our customers that work. And going back to the question

who has reviewed our systems. No, USDA hasn’t done it, but I

have had due diligence by potential investors, and I get due diligence every day by my customers who say this either works or it

doesn’t, and believe me, they don’t hesitate to call and tell us what

they think. And we go back and change. We know what it takes

to make it work in rural America.

We have the technology. We have the resources. We know how

to do it. We just believe that a private sector solution answers the

questions that producers have about the confidentiality and the privacy of their data as well as answering the question of how do we

provide the lowest cost most immediately implementable solution

to the industry.

Mr. HAYES. I see your question worked its way from the back

row to the front. Any other question in the back row? Mr. Akers?

Anyone else? It is like an auction. Going once, going twice.

Again, thank you all very, very much for being here. And make

no mistake about it, it is the intention of this Chairman and this

committee to take what the industry and the ranchers and the producers and all of the folks back home are telling us they want to

have the help for their industry and move it down the field as rapidly in a common sense workable manner as we possibly can. So

with that in mind, those of you who haven’t signed on to our voluntary contract, I will meet you afterwards, and I am sure you are

now convinced.

Thank you very, very much for being here today. We look forward to working with you on an ongoing basis. Without objection,

the record of today’s hearing will remain open for 10 days to receive any additional material and supplementary written responses

from witnesses to any question posed by a member of the panel.

This hearing of the Subcommittee on Livestock and Horticulture is

adjourned. Thank you all.

[Whereupon, at 3:15 p.m., the subcommittee was adjourned.]

[Material submitted for inclusion in the record follows:]

STATEMENT OF JOHN CLIFFORD

Mr. Chairman and members of the committee, thank you for the opportunity to

participate in this hearing on animal identification. As you know, on April 27, Secretary Veneman announced the transfer of $18.8 million from USDA’s Commodity

Credit Corporation (CCC) to provide initial funding needed to begin development

and deployment of the National Animal Identification System (NAIS). Plus, the

President’s fiscal year 2005 budget includes another $33 million for these efforts.

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Once fully operational, the NAIS will help USDA and our State and industry partners quickly identify any livestock or agricultural premises exposed to a foreign animal disease so that the disease can be contained and eradicated. This will benefit

producers as well as consumers.

BACKGROUND ON ANIMAL IDENTIFICATION SYSTEMS

The increasing number of animal disease outbreaks that have been reported

around the globe over the past decade, and the BSE-positive cow found in Washington State last December, have intensified public interest in putting in place a national animal identification program to protect animal health. The European Union,

Canada and Australia all have some type of animal identification system already

in place. A strong U.S. identification system is a necessary component of our Nation’s agricultural infrastructure.

Of course, animal identification is not a new concept in the United States. In the

1940’s, when livestock identification was first used to indicate ownership and deter

theft, the USDA’s Animal and Plant Health Inspection Service (APHIS) initiated an

extensive animal identification program to identify cattle vaccinated for brucellosis.

The official brucellosis vaccination tag with an ear tattoo provided the U.S. with a

highly successful animal identification program for cattle for many years (although

it is now on its way to extinction because that program is quickly approaching its

successful conclusion.) A number of other animal health programs also include an

animal identification component. And, certain classes of livestock must be officially

identified before entering interstate commerce. So there are multiple systems in

place that all exist for different purposes, but there is no nationwide animal identification system for all animals of any given species.

Animal identification systems have merit for producers for other reasons as

well,including performance recording and marketing opportunities. However, APHIS

is focused on animal ID for one principal reason: to establish the animal information

foundation we need to support our animal disease control, eradication, monitoring

and surveillance programs. Livestock producers recognize that finding potentially

sick or exposed animals early in a disease outbreak is essential to containing the

disease quickly. The NAIS would allow for rapid tracing of livestock in the event

of an outbreak, helping to limit the scope and expense of the outbreak and allowing

us to minimize impact on domestic and foreign markets. The NAIS will also be critical as we work to complete the disease eradication programs in which we have invested many years and millions of dollars.

GOAL AND OBJECTIVES

The goal of the National Animal Identification System is to have the capability

to identify all animals and premises that have had direct contact with a foreign animal disease (FAD) or disease of concern within 48 hours after discovery. USDA believes this goal can best be achieved by focusing on the following objectives:

• First, we don’t want to burden producers with multiple identification numbers,

processes, or requirements. What we, together with our industry and State partners,

have envisioned is very simple: a system where every premise has a unique 7-character identifier. And every animal needing to be identified individually would have

a 15-character number. Many producers are already asking to make a move to this

numbering system from the multiple systems currently in use, so we are planning

to pursue rulemaking to recognize for official use both the 7-character premises ID

number and the 15-character Animal Identification Number. This will allow those

who want to start the migration to do so, while not requiring it for others who may

not be ready.

• Second, there is no ‘‘one size fits all’’ technology. It is likely that some technologies will work better for some species than for others. Rather than focus on a

specific technology, the USDA will focus on the design of the identification system

what information should be collected and when it should be collected. Once the identification system is designed, the market will determine which technologies will be

the most appropriate to meet the needs of the system.

• Third, the NAIS should be built upon national data standards to ensure that

a uniform system evolves. The system also must not preclude producers from being

able to use it in coordination with production management systems that respond to

market incentives.

• Fourth, the architecture for the system should be created without unduly increasing the role and the size of the government. Both public and private funding

will be required for the NAIS to become fully operational. Database systems must

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tified and tracked, programs must be monitored, and labor is needed for all these

activities.

The identification of premises and animals, while requiring significant resources,

is a fundamental and straightforward objective. However, collecting and reporting

animal movement information to establish a ‘‘travel record’’ of each animal’s life is

an enormous undertaking, requiring significant development and testing and substantial infrastructure. Because of its complexity, we plan on phasing in the NAIS

to provide a timely and cost-effective program while ensuring it is functional, practical, and reliable. Initially, the program will be implemented on a voluntary basis,

but we may eventually require premise and animal identification.The U.S. cattle

population is our first priority, although the system will eventually focus on all livestock within the represented industries.

Clearly the development of a system of this kind of scope and complexity, requiring a substantial investment on the part of both the public and private sectors,

needs to be developed with ample opportunity for input by those affected. In addition to our ongoing dialogue with industry and States on the subject, we are holding

listening sessions around the country and on July 9, we published an advance notice

of proposed rulemaking that, among other things, solicits comments on when and

under what circumstances the NAIS should move from being voluntary to mandatory, and which species should be covered now and over the long term.

NAIS IMPLEMENTATION PLAN OVERVIEW

USDA’s priority in 2004 is to establish the Premises Identification System. Starting next month, States and Tribes on a limited bases can begin registering locations

where livestock are held, sold, or commingled, using an interim standardized premises registration system provided by APHIS, or systems developed by themselves or

others that meet NAIS data standards. APHIS is taking advantage of the work done

under an Agency cooperative agreement by the Wisconsin Livestock Identification

Consortium, which was identified by an independent contractor as a premises registration system that met the established data standards and offered the necessary

computing needs at the national level. The contractor reviewed three systems supported by Federal funding. We are also evaluating other systems that states or third

parties have developed to ensure their compliance with NAIS data standards. APHIS will provide close to $12 million to States and Tribes through cooperative

agreements this year to help them implement premises identification as well as to

carry out field trials or research to test and fine-tune technologies and collect animal movement data. The deadline for States and Tribes to submit applications for

cooperative agreements was July 15. The evaluation of the applications will be completed quickly so that selected projects can be initiated in early August. As mentioned earlier, the President’s fiscal year 2005 budget calls for $33 million in funding for animal identification, and a portion of this money would go toward establishing additional cooperative agreements to assist States and Tribes that don’t receive

funding this year.

USDA is also gearing up for a substantial education and outreach campaign

aimed toward producers. Next month, an outside contractor will be carrying out

benchmark survey research to determine how much producers know about animal

identification. We will develop a targeted communication plan based on the outcome

of this research, focusing on the need for animal identification and explaining how

interested producers can register their premises.

As mentioned earlier, Under Secretary Bill Hawks is also holding a series of 14

listening sessions around the Nation to provide public forums to discuss animal

identification. Listening sessions have been held in North Carolina, Georgia, Oregon, California, and New Mexico. The next one is scheduled to take place on July

23 in Pasco, WA. We are posting comments from these sessions on our website so

that interested parties can keep abreast of developments.

In 2005, USDA plans on further developing the animal identification system so

that it provides efficient collection of animal movement data. Additionally, we will

also continue our communication and education efforts, address regulatory needs,

and work with Congress on any legislative needs.

We envision that the NAIS will continue to expand in 2006. As States and Tribes

gain experience, USDA will integrate those approaches that are most successful into

the broader system. We will also allow service providers and other participants to

gear up their products, programs and services to meet the demands of a national

program.

USDA is aware of producers’ concerns about the confidentiality of information collected in the animal identification system and is taking them very seriously as we

explore the most effective means for collecting animal identification information.

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Throughout the development of a national system, our goal is to be as transparent

as possible so that producers understand both the responsibilities and benefits that

will result. We look forward to working with and hearing from the Nation’s producers, industry, animal health officials, State governments, and Congress to successfully achieve a national animal identification system. We also want to thank you,

Chairman Hayes, and your entire subcommittee for all of your efforts to advance

this vital initiative for agriculture. I would be pleased to respond to any questions

you may have at this time.

STATEMENT OF JODI LUTTROPP

Thank you, Mr. Chairman and committee members. My name is Jodi Luttropp

and I am the coordinator of the National Farm Animal Identification and Records

Program.

National FAIR is an animal ID and traceability program in place and working

today, that incorporates radio frequency identification (RFID) tags. The National

FAIR program provides each animal with a unique identification number, and uses

electronic RFID ear tags to identify and track animals. Similar to a Social Security

number or a car’s vehicle identification number, the number stays with the animal

for its lifetime.

The Holstein Association USA, Inc. has worked cooperatively with USDA/APHISVS since 1999. Our charter, as stated in the agreement, was, ‘‘To design, develop,

and demonstrate a pilot project for a national livestock identification program that

will track livestock from farm-to-farm, farm-to-market, and market-to-processing

unit.’’ We have accomplished our goal. The National FAIR program has been identifying and tracing animals from birth to slaughter for several years. We have an infrastructure already in place consisting of a comprehensive database, a dedicated

tag provider, and a coordinated field service staff. We have the capability to start

putting into place today what the U.S. Animal Identification Plan calls for implementing in 2006. National FAIR fulfills the standards outlined by the U.S. Animal

Identification Program, USAIP.

When animals are identified, the information is entered into the National FAIR

database. Currently, there are well over 1.3 million animals in the National FAIR

database. Information stored in the FAIR system includes where and when the animal was born, what locations the animal has been at, such as farms, markets, or

processing plants, what livestock the animal has had contact with, and eventually

where and when the animal was slaughtered. The information on the National

FAIR database allows for the tracing of an animal’s movements, from birth to

slaughter, in as little as a few minutes. As part of our system, tag readers designed

to read electronic tags are already in place in markets and processing facilities

across the United States.

The National FAIR system includes a security module that enforces the ‘‘Rules

of Access’’ for information. Currently the State of Michigan has adopted privacy

rules that allow producers to view information regarding their premises or animals,

but does not allow them to view other producers’ information. Those at the state

government level have access to information required to perform identification and

traceability during a health emergency. The security module deployed by National

FAIR is a robust component capable of allowing flexibility in defining security access to information. Furthermore, the structure of the National FAIR database is

dynamic and flexible, and is compatible with many current herd management software programs and allows for the inclusion of new technologies as they become

available.

It is critical to understand that the National FAIR Program was developed by producers, for producers. The National FAIR Program is part of the Holstein Association USA, Inc. which has 35,000 member-producers throughout the United States.

Those producers govern the Association, and only adopt policies and procedures that

work in the field and are beneficial to the consuming public. Those same producers

have, through our Association, invested over $2 million in the development of the

National FAIR Program.

It is our belief that animal identification for production animal agriculture in this

country needs to be mandatory. Additionally, it cannot be technology neutral; the

RFID technology employed by National FAIR is the most accurate, efficient, and

cost effective form of animal ID used in the world today, and will likely be for many

years in the future. Without a mandatory animal identification program in this

country, we will continue to be denied market access to certain countries throughout

the world.

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Producers will resist if the government controls an individual animal identification system in the United States; therefore, it is important that a producer-supported and driven program be responsible for animal traceability. The Holstein Association USA has been identifying animals in this country for 119 years, and is recognized throughout the world as the leader in animal identification. We believe the

Government’s role would be in the area of providing funding for the infrastructure

of a national mandatory identification program—such as database development and

readers.

This country’s animal agriculture producers, including our 35,000 members, are

at risk today with the threats of additional cases of BSE in this country, and the

threat of foot-and-mouth disease. Although the National FAIR Program will not prevent diseases from occurring, if they do show up, it will allow for immediate isolation and tracking of animals.

The National FAIR Program is ready today to meet the needs for a mandatory,

national animal identification program in the United States to help protect our Nation’s food supply, and minimize the risk associated with a future disease outbreak.

We urge your support of this important initiative.

STATEMENT OF JIM AKERS

Chairman Hayes and members of the House Agriculture Subcommittee on Livestock and Horticulture, my name is Jim Akers and I represent the Southeasern

Livestock Network, LLC, it is indeed a pleasure and an honor to have the opportunity to testify before you on the implementation of the NAIS.

A growing number of cattlemen recognize that the need to protect the Nation’s

cowherd from catastrophic diseases is paramount and that a system to rapidly trace

animals from farm to harvest is necessary to provide this protection. I think we all

reluctantly realize that some of their independence may be sacrificed in order to

achieve rapid traceability of their animals.

The idea of a national database filled with the addresses and GPS coordinates for

every farm and ranch with livestock combined with a database to track all animal

movements is contradictory to the inherent independence in livestock producers nationwide. Fierce independence and pride are two of the characteristics that have

driven cattlemen to continue in an industry that challenges their financial needs but

provides a way of life that they cherish.

With the loss of tobacco income over recent years, livestock production has become

the mainstay of the small family operations in our region. Many resources have

been devoted to assisting family farms in making the transition from a dependence

on tobacco to a more diverse production environment, centered around livestock.

These small, family operations are not only an important part of the agricultural

economy but more importantly an integral component in the fabric of small town

America, our American culture and our ecological stability. The Southeast is becoming a more important sector of the livestock production of the United States as increasing pressure on sensitive grazing lands in the West require growth in our region to maintain national beef production.

It is our sincere hope that our efforts are not misunderstood as taking a position

against the NAIS, we agree with the need. In reality we believe that the approach

to animal identification we have taken is the best hope of achieving the stated objective of the NAIS and developing the key factor that will define its success over time,

producers buy-in and participation. We are not a radical organization fostering the

thought that regulation, in and of itself, is by definition detrimental. However, regulation that changes the very nature of that which it seeks to monitor is short sighted and wrong.

Even though mention of the Southeast may not bring to mind visions of cowboys

and vast cowherds, this region of the country is a significant part of the cattle industry, which represents the largest sector of agriculture in the United States. The

10 states (Alabama, Georgia, Kentucky, Louisiana, Mississippi, North Carolina,

South Carolina, Tennessee, Virginia, and West Virginia) represented by the SouthEast Livestock Network, LLC represent roughly 25 percent of the Nation’s cattle

producers and 20 percent of the cowherd. While the southeastern cowherds may be

small individually compared to western herds, collectively they produce almost 25

percent of the cattle in the country.

These small herds will create unique challenges for implementing the National

Animal Identification System, primarily in marketing. The vast majority of cattle

in the southeast are sold through auction markets, with cattle buyers playing the

important role of assembling larger marketable groups for transportation. This sysVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00142 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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tem of trade is extremely important to southeastern producers and must not be disrupted by the implementation of the NAIS.

History of SELN. Representatives of the marketing industry gave impetus for the

initial thoughts that led to the creation of the SouthEastern Livestock Network,

LLC. Kentucky is home to several of the largest cattle buying firms in the country.

These order buyers purchase cattle at auction markets throughout the 10-state

SELN region. As these order buyers learned more and more about the plans for a

national animal identification program last year, they recognized the potential for

a substantial disruption of their business if some type of uniformity in the southeast

was not maintained. Since the Kentucky Beef Network had spent the previous 2

years establishing an electronic cattle management and marketing program, representatives of the largest cattle-buying firms approached the Kentucky Beef Network seeking solutions for their concerns.

Word of the investment by the Kentucky Legislature and the Kentucky Beef Network’s management and marketing system had also spread to the other southeastern states. Last fall, executive officers from the southeastern cattlemen’s associations initiated discussions about the uniqueness of the southeast relative to implementing the NAIS and the importance of the region working together to assure the

region’s special needs were met. The group believed the work already underway in

Kentucky could be expanded throughout the region to address those unique needs.

Initially the dialogue was informal, as representatives from the southeast explored the common concerns and needs of the region’s livestock producers. The discussions became increasingly more focused and lead to the formation of the SouthEastern Livestock Network, LLC in June. This organization is committed to assuring southeastern livestock producers benefit from the NAIS without undue burden.

FUNDAMENTAL PRINCIPLES AND POSITION OF THE SELN

Existing Technology. Over the past 10 years, technology has been developed and

utilized in value added systems within the cattle industry. These systems have proven to be very functional because they were developed by producers with value and

efficiency in mind. Since they are the cornerstone of marketing programs their accuracy is a necessity. The individual identification of cattle utilizing RFID technology

is now widely accepted in many circles within the industry. The information management systems already exist and need only be modified to feed the appropriate

information to the animal disease traceability system, as needed.

The most accurate systems of livestock traceability are the systems that operate

within our markets today. These software and management systems are responsible

for tracking livestock on a transactional basis and therefore have virtually no margin for error. The marketing sector of the industry will most certainly experience

radical changes associated with the implementation of NAIS, we should be committed to minimizing this impact by working with them to integrate the data collection

process with their existing systems. The Kentucky Beef Network has worked with

market software providers to collect animal movement data within the context of

the normal market operation and extract the appropriate information at the end of

the day to provide a reporting function for the buyers and sellers that participate

on that day. Furthermore, we have worked with private industry providers to develop a web based system of housing the resulting data that allows password protected access to those individuals for whom the data was intended.

Many of the other livestock species industries, that are much more integrated, operate with levels of traceability that exceed the requirements of the NAIS. These

systems and those existing within the cattle industry should be the foundation of

animal traceability. The collective experience that has been developed in the field

with the considerations of livestock movement, production efficiency, well being and

producer acceptance should not be shoved aside so we can spend inordinate amounts

of taxpayer dollars to create yet another cumbersome and disconnected system.

Confidentiality and ownership of data. For all sectors of the livestock industry,

confidentiality is the first concern. The very nature of our marketing system is

based on the ability of independent business entities to operate in a manner that

protects the sensitive business information that would, by necessity, be stored in

such a system. The cattle business is the last bastion of free enterprise and independent family business ownership in the livestock industry. These small family operations are the backbone of the entire industry and create the product acceptance

and romance that has been the hallmark of BEEF for over a century. This very important sector is at the most risk relative to confidentiality. It depends on the auction market system for survival and that system lives off of the relationships between producer, agent and buyer to fight off the threat of vertical integration that

has been the death of family farms in the other livestock sectors.

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Responsiveness to advances in technology. There is a long history of government

systems being developed to achieve a regulatory requirement and these systems failing over time due to an inability to maintain and update them with the most advanced technologies. In our opinion, privately held systems that answer to the producer and the marketplace have a much better record of maintaining functionality

because if they do not they will be replaced by someone new who will.

The implementation of NAIS will inevitably change many aspects of the livestock

industry. Incorporating the necessity of animal identification into the production

and marketing systems will facilitate a more rapid adoption of the necessary technologies and its use for improvements in the industry itself, while maintaining the

very important structure of the industry.

Integration within existing systems. The current systems at work within the cattle industry specifically include auction market, brokerage and production management software packages that already collect more information than is necessary to

meet the regulatory requirement. We should focus our resources on incorporating

the animal identification number and premise id into these existing systems and

then create a reporting function that will allow these very important intermediaries

to provide movement reporting as a function of their normal business. Many have

been advancing the thought that the collection of animal movement data should be

a completely separate function from the commerce that takes place in order to insure that inappropriate information does not find its way into the regulatory channels. We strongly disagree with this philosophy since a completely separate system

would require extra investment in additional data collection equipment, additional

labor to operate and maintain and would most certainly slow the marketing system.

The data management system created by the Southeastern Livestock Network, LLC

would provide a platform for all sectors to utilize as the grassroots level of data assimilation. It is our opinion that this type of entity can continually scour the technology suppliers for the equipment and data systems that will create efficiencies

and reduce the cost to producers. A common comment among producers and markets is that they don’t mind reporting the movement of animals to protect the industry but they are worried about government becoming a part of their daily business

functions.

Uniformity. Within this Southeastern region of the United States there are over

300 independently owned and operated livestock marketing facilities that are the

foundation of the industry. These markets provide a simple and accessible marketing system for the small producer to move his/her product into the national system.

These markets in turn depend on a network of brokers or order-buyers that move

from one market to another and put together the livestock from multiple producers

into larger more merchantable groups. Many of these buyers operate in as many as

100 different markets scattered across the region on a weekly basis. This situation

defines the need for uniformity in reporting mechanisms and procedures across the

states within the region. It is our concern that a cumbersome, governmentally operated system would create a scenario that could very easily establish a discount system in particular areas because of local variations in procedures or timeframes associated with data collection and reporting.

The role of the Southeastern Livestock Network, LLC has been and will continue

to be one of bringing all the parties impacted by the NAIS to the table to make

these important decisions together. Setting guidelines for collection of regulatory information without considering the impact of those decisions on the production or

marketing sectors will create those unintended consequences that we fear. We have

been successful in facilitating important conversations that have included State Animal Health Authorities, market operators, producers, data and equipment service

providers, commodity organizations and educators. These conversations should continue and be the forum where implementation decisions are made since they will

bring to light the concerns of each of these sectors and create a level of appreciation

and understanding between the parties. This was the intent of the USAIP process

and to an extent it achieved success. However, the missing element was that all regions of the country were represented in the same room and in that environment

it was impossible to reach consensus for one national policy on specific issues since

there are very stark regional differences that require very different solutions. A

good example is the contrast between the western brand states and our Southeastern region. The brand states, in our opinion, have a good framework in place for

premise identification since they deal with relatively small numbers of producers

and large tracts of land that are fairly static in terms of ownership and control. In

contrast the south is an ever changing patchwork of small farms with multiple operators that move livestock from tract to tract independent of land ownership. These

two scenarios require very different approaches to identification of both the premVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00144 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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ises and the animals themselves. These situations can only be dealt with in an appropriate manner when those decisions are made at the local or regional level.

Working Cooperatively. Historically, because of the small size of the production

units and the independent nature of the producers themselves, the cost of production for livestock in the southeast has been among the highest in the country. This

exists in large part due to the inherent inefficiency of input purchases on a small

scale operation. Compounding this is the fact that calves out of the region typically

garner the lowest bids in the marketplace due to transportation and environmental

differences. Many producers have expressed a concern that NAIS will create yet another advantage for the larger western producers that already operate at distinct

advantages on many other fronts.

The Southeastern Livestock Network, LLC has proposed to operate in a manner

that will use the collective volume of these many small producers to provide low cost

solutions for data collection and transfer. Very few of the markets or producers

within the region have the volume required to go into the technology marketplace

and formulate a competitive arrangement for services or equipment. However, working collectively we can provide a solution to those who wish to utilize it. We do not

intend to force anyone to utilize the SELN system, if it is to their advantage to utilize other services and they can meet the regulatory requirements for reporting,

then that should be their decision.

Primary role of State Animal Health Official. We have held from the very beginning that the NAIS should be a state based system. The State Animal Health official is the cornerstone of disease surveillance as it should be. Producers are much

more accepting of working with their state official than with Federal authorities.

The SELN has held that the state animal health official should be the gatekeeper

to the data that is collected within that jurisdiction. Our concept is that the privately held data collection system would accumulate the animal movement information associated with the appropriate data and premise numbers and make this information accessible on an as needed basis in a mirrored database system that will

allow quick, accurate and appropriate access to information. In this scenario, the

confidentiality issue is simpler since the data would remain in the ownership of the

producer until accessed by the state animal health official when it would then enter

the public domain.

The state animal health official should be the key figure in insuring that the private systems operating within their jurisdiction are indeed operating in a manner

that will provide the appropriate information within the parameters set forth by the

NAIS.

Concerns of Integration. Another commonly held and, in our opinion, valid concern is that of NAIS providing a mechanism to force integration within the cattle

and other independent livestock sectors. Without question, the use of technology and

the ability to respond to changes in regulatory requirements are much easier for

larger producers and even more so for corporate, integrated production systems.

The basis of the concern comes on two fronts. The first, that a member of the

wholesale or retail sector of the marketing system could dictate a technology that

the average, independent producer would be unable to implement or even participate in thereby forcing them to either integrate or leave the business. The second,

that entities higher in the marketing system would be able to garner from the system, information that would allow them to arbitrarily differentiate product without

the consent of the cow/calf producer thereby setting up a reward/discount structure

that could very well put independent producers at a distinct disadvantage.

We must be diligent in our efforts to insure that NAIS is designed to meet the

needs and consider the concerns of this very important sector of the agricultural

economy and community.

Federal funding. We certainly support funding for USDA to complete the premise

allocator and all aspects of the implementation of the premise id system through

state veterinarians. Furthermore, it is understood that USDA should play the key

role in administration, oversight and compliance surveillance relative to the entire

NAIS.

The budget numbers that have been put before you by the USAIP Steering Committee are in our opinion real numbers that will be required to achieve the objective.

However, the priorities outlined for those funds are in our opinion misaligned. The

focus to this point has been on huge centralized databases and not the most important facets of the system. As we have discussed before, the data management systems required to achieve the objective already exist in private industry and although funding would be required to bring those systems to the necessary level of

performance, capacity and uniformity, the sum of those funds would be far less than

that required to build one single system from the ground up. The real challenge lies

in working with the 800,000 plus producers, thousands of feeders, hundreds of marVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00145 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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kets and packers to coordinate the collection of this movement data without changing the nature of commerce or slowing it.

Data collection infrastructure. Regardless of the mechanism for transmitting and

storing data in the animal disease surveillance system, the real challenge will come

in placing the data collection systems in the marketing infrastructure. The auction

marketing system, that is so important to the cattle industry, is where the smaller

producers will enter the system. It is our opinion that with appropriate modifications the marketing system can provide a reporting service to both buyer and seller

without an additional level of workload or complication in their system.

The rapidly developing and ever evolving RFID scanner market is moving aggressively to provide the equipment necessary to achieve this objective. The costs associated with equipping the concentration points to not only read the id devices but assimilate the identification into their software and generate a file for reporting purposes should be shared between the industry and government. We have proposed

an approach modeled after the cost share system already operating in Kentucky

where a 50/50 match is available to markets to make the necessary improvements,

including the improvements and additions required to provide identification services

within the market.

It is the position of the SELN, LLC that a program of this manner would be much

more effectively delivered by a private entity than through the Animal Health authorities. The reasoning behind this position is that the ability to administrate the

distribution of funding and provide the necessary technical support is more easily

accomplished outside of state government. The SELN, LLC was formed to provide

an organized structure, with oversight, to provide this function.

Tag Distribution. There are many issues relative to the distribution of certified

animal identification devices. It is the position of the SELN, LLC that the procedures in place should facilitate easy entry into the system at the most basic levels

of the production sector.

Our philosophy has been to create a system that allows easy access to devices in

the existing retail marketplace and through entities such as the local veterinarian

or sale barn. We have demonstrated an ability to associate these UAINs with the

premise id number as the animals enter commerce. This is in stark contrast to the

currently held position in the regulatory community that tag distribution should be

a reportable event to the national data system.

There is tremendous resistance at the producer level to registering the tags upon

distribution, and for good reason. Many producers are concerned about being able

to access the tags in a timely manner as many, especially smaller producers, make

marketing decisions on very short notice as a matter of everyday operation.

We fully recognize the advantages and disadvantages of both approaches. The

strictly regulated system could result in the population of a data management system with large quantities of erroneous data resulting from the swapping of tags

after the distribution has been recorded. It most certainly will add considerable cost

to the devices themselves by creating the need for an entirely new layer of data collection equipment and infrastructure. The cost of this need is difficult to clearly define but will without question find its way to the pocketbook of the producer unless

government is willing to put the necessary systems in place to achieve the objective.

The system we have proposed is certainly not as tight up front, but in our opinion

will result in a larger quantity of more accurate data in the long run. We believe

that this will be the result of a much higher degree of acceptance at the producer

level coupled with a very accurate system of associating the animal id with the appropriate premise id at the point where everyone concedes is important, that initial

entry into commerce.

We further believe that the local veterinarian is a resource that has been ignored

in the discussion of implementation. This group of trained and certified individuals

is the grassroots connection to the producer and should be considered as a very effective means of entry into the traceability and surveillance system. We encourage

USDA to look at program develop that would subsidize the local veterinarian to not

only apply devices but provide a basic level of data collection service.

We anticipate that many private industry providers will step forward to provide

the services necessary to enter the system. A clear mechanism for certifying these

private individuals is needed at the earliest possible stages of implementation to

prevent the workload of individual animal identification from gravitating solely to

the markets. If there is a prohibitive cost looming in implementation it is the cost

of applying id devices for those producers, who may opt to deliver animals to the

markets and rely on personnel there to provide identification services.

Education and Communication. A key objective of the SELN is to coordinate this

effort across the region. Not only is it important that the information and delivery

mechanisms be of the highest quality but that those materials are developed in a

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manner that account for the specific needs of the region and are delivered in a manner that they will be utilized by producers. The planning of these educational and

communication efforts should be carried out by the individuals that understand the

specific needs of the region and the cultural and economic considerations that will

drive producer acceptance. Commodity organizations and Land Grant University

Extension services working with the state Departments of Agriculture should be the

center of this decision making, development and delivery process.

Premise ID Systems. We fully support and recognize the appropriateness of the

State Animal Health authority serving the function of complete control of the

premise identification system. It is our hope that the SELN would, through its network of communication throughout the varying sectors of the industry, be able to

provide insight into the implementation strategies that will move this process forward in an efficient and accurate manner. Supporting and communicating the special needs that NAIS has placed on these authorities has been and will continue to

be the first objective of the SELN. The appropriate level of funding to achieve the

registration of premise id within each member state in a uniform and timely manner is of utmost concern. We fully recognize that, even within this region, there are

differences in the current status of premise registry capabilities. Funding should be

made available to bring all states to a level of functionality that will satisfy the requirements of the NAIS. No progress can or will occur in the arena of tracking individual animals without the premise id system protecting the identity of the individuals moving animals.

A key component of the SELN plan is the ability to communicate with the

premise systems in the states in order to provide the animal tracking capability to

state animal health authorities. We have proven that with the appropriately protected linkages a system exists to harvest animal movement information out of the

privately held data management system and cross reference it with the associated

premise registry information housed in the state system and create a very effective

and timely traceability chain.

Animal movement tracking. The central concept that allows this type of approach

to function is that of a mirrored database structure. Within this type of system, data

can be stored on one side of the mirror remaining the property of the individuals

that placed the information in the system. When a query to that database comes

from an individual authorized to access it, only the information necessary to answer

that question would cross to the other side and then enter the public domain. The

current system will allow an individual with the appropriate authority the ability

to trace not only the animal in question, but other animals that it may have come

in contact with as it has moved through the production, transportation, marketing

and harvest sectors.

The technology provided by the BIE(Beef Information Exchange) is another important piece that will allow the private sector to choose among data service providers

that best fit their needs. BIE offers a common platform that provides a highly secure connectivity between the numerous privately held systems that enables

traceability of individual animals even though they may have crossed from one data

collection system to another as they have moved through the process.

Cost to Producer. We support the language incorporated into the USAIP Beef

Working Group report that states, ‘‘Producers should not bear the full cost of the

system’’. We do recognize that the flexibilities being proposed by organizations like

the SELN, LLC will require producers to share some of the costs. There is little resistance at the producer level to paying for the identification devices. We have gone

a step further in proposing that a very nominal fee associated either with the purchase of the id device or collected to report data be utilized to fund the operation

of the privately held data collection system. The SELN, LLC has not and will not

ask for funding to develop software, build databases or operate either. In our opinion it would be inappropriate to ask for these flexibilities and the funding to achieve

them. We have proposed that funding be allocated to the State Animal Health Authority to complete the premise id process and maintain it over time as well as to

provide for the added responsibilities of compliance monitoring and surveillance that

will be created by NAIS. The only Federal funding we have proposed should go to

organizations like the SELN, LLC is funding necessary to carry out the education/

communication components and implement the data collection infrastructure.

SUMMARY

At this point animal id is a cattle issue due to the recent incidents of disease that

have heightened the move toward traceability. We recognize that any industry driven effort must be formulated in such a manner that it can be inclusive of other species and variable production and marketing systems. The beef cattle leadership in

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a ten state region of the Southeastern United States has stepped forward to provide

a structure for this group of states to identify, communicate and develop solutions

to the specific concerns of all sectors of the industry.

The SouthEastern Livestock Network, LLC is a producer driven initiative that

seeks to bring to the table all entities impacted by the implementation of the NAIS

within the ten state region. Its purpose is to facilitate a dialog that will minimize

the unintended negative consequences of achieving the regulatory objective. Furthermore, this organization wishes to serve as the vehicle for delivering the technical expertise, communication and education necessary to promote acceptance from

all sectors of the livestock industry.

Without the acceptance of the grassroots producers no system of traceability will

be able to operate with accuracy or efficiency. The very nature of this initiative satisfies many of the concerns that have limited producer willingness to participate in

source verification of food animals in the past.

Relative to the agricultural community, we certainly realize the unconventional

nature of the proposal we lay before you. However, there is precedent for this type

of approach in other sectors of American society. Within the human health and national defense arenas, private entities team with Government agencies to achieve

an objective and it has become common place. It is our sincere hope that you as

members of a very important committee along with those within USDA responsible

for administering the NAIS will recognize the advantages of utilizing this partnership to achieve an objective that we all agree is necessary. Implementation of any

regulatory effort that includes the challenges of the vast number of independent, individual people and the animals that they represent will require an approach very

different than has been taken in the past for specific disease surveillance or eradication programs. The implementation of the NAIS will eventually impact every person in the United States of America that is involved in the production, marketing,

transportation and harvest of livestock, we need to do this right.

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(243)

THE DEVELOPMENT OF USDA’S ANIMAL

IDENTIFICATION PROGRAM

TUESDAY, AUGUST 17, 2004

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON LIVESTOCK AND HORTICULTURE, COMMITTEE ON AGRICULTURE, Fayetteville, NC.

The subcommittee met, pursuant to call, at 2:05 p.m., in the

Crown Center, Fayetteville, NC, Hon. Robin Hayes, (chairman of

the subcommittee) presiding.

Present: Representative Hayes.

Staff present: Pamilyn Miller, subcommittee staff director; and

Lisa Kelley.

OPENING STATEMENT OF HON. ROBIN HAYES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA

Mr. HAYES. I am Congressman Robin Hayes, and let me welcome

you to Fayetteville and to our Animal Identification hearing. This

is about you, this is not about me. It is not about Bill Hawks, it

is not about us. But we appreciate you all coming from as far away

as Missouri, South Dakota, other places to be a part of this process

today.

Mr. Secretary, we appreciate you and the good doctor being with

us today, because you have been very faithful from day one to

make sure that this whole process is driven by the producers and

the consumers and the industry, not by the Government.

So, if I can call this meeting to order I have a short opening

statement. Just to sort of set the record straight and kind of get

the ground rules laid out.

Animal identification has been given a considerable amount of

attention over the last 8 months, and I am glad that we can review

where USDA is in their process of establishing a national program

for animal disease surveillance. We will also hear from other witnesses who represent producers here in North Carolina and across

the country to learn their views on how we should proceed with the

National Animal Identification System.

I will insert in the record at this point, we did invite our other

committee members to be here. Mike Ross has been a very faithful

ranking member. Unfortunately, due to the commitments at home,

you are going to have to put up with me alone today. Rest assured

all the folks on the committee are very actively involved and will

review the testimony and are certainly available to you to move the

process forward in the right fashion.

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As you know, animal identification is an issue that this subcommittee and the entire House Agriculture Committee is taking

very, very seriously. The full committee held a hearing in March

in Houston to begin understanding USDA’s vision for a national

system as well as to hear from producer groups and what they

want to gain from the program. Since that time, USDA has begun

taking steps towards implementing animal identification, so this

subcommittee held a hearing in Washington recently, July 22, to

discuss the latest developments, especially in technology. Knowing

there are various technology companies involved with animal identification, we also hosted a display for companies to demonstrate

their technology to Members of Congress, USDA, and staff.

Last week Agriculture Committee Chairman Bob Goodlatte came

to my district where we met with producers. Animal identification

was the main issue we discussed. Clearly, overseeing the development of the National Animal Identification System is a priority for

many other members of the Agriculture Committee.

With that said, some of the same concerns continue to arise as

we move forward in implementing a system, such as cost, particularly confidentiality, whether it would be a voluntary or mandatory

program. Which technology will be used—let me go back—technologies, if that is appropriate, and making sure that there is not

a one size fits all program.

I am pleased by the direction USDA is going on some of these

concerns. For example, throughout the process I have been technology neutral so that producers may determine what works best

for them, and I appreciate USDA having that same position. I believe it is important to have a voluntary program unless there is

a need for it to be mandatory and again I appreciate USDA having

the same position. I also believe the program should take into account what works for one species may not necessarily work for another. I believe USDA is looking into flexible options for various

species.

And finally, hearing and keeping producer records confidential is

of the utmost concern to me. I have had numerous conversations

with the Secretary. Mr. Hawks, who is with us today, will discuss

the importance of confidentiality, and I can tell you Mr. Hawks

knows very well the concerns of you and other producers having

conducted a series of listening sessions around the country. USDA

will be completing its round of listening sessions this month, in

which they have been gathering input from everywhere. USDA also

has released an advance notice of proposed rulemaking asking producers and industry for basic comments on implementing a program, like when and under what circumstances should the program

transition from voluntary to mandatory, and what species should

be covered. I hope the department will take a close look at the comments received both at listening sessions and the ANPR and use

this information in deciding how to structure the system.

I firmly believe the best way for a National Animal Identification

Program to work is for the producers in the industry to work with

USDA to develop a system rather than having bureaucrats in

Washington—and yes, there are still a few bureaucrats left in

Washington—mandate a burdensome, costly program. I encourage

USDA to work with producers and have a transparent process and

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continue to move forward. The system can have great value for the

livestock industry but we must not take that responsibility lightly.

There are some very critical decisions that must be made to have

a beneficial, cost-effective confidential system.

Before we get started with the testimony I would like to explain

some of the procedures for the hearing. The hearing is structured

like any of our subcommittee hearings in Washington, all witnesses

will have 5 minutes to present their oral testimony, and then answer questions. We have lights and timers, when the lights turn

red your time has expired. After both panels have testified, if time

permits, we would like to have an open mic so those in the audience wishing to make comments may do so. I would ask that you

keep your comments to 3 minutes in length and again we will be

using lights and timers. For the sake of others that might like to

have an opportunity to express their views, I ask speakers to respect the time limit. Keep in mind because of scheduling in the

building, we must conclude by 5 o’clock.

As always I would note that anyone that wishes to submit a written statement as part of the record may do so up to 10 calendar

days after the hearing, which would be Friday, August 27. Please

see Pam or staff if you wish to submit a statement or make comments to any open mic. Additionally, all testimony and comments

made today will be a part of the official record.

I look forward to today’s testimony and the insight that Under

Secretary Hawks and USDA and the doctor and producer groups

will provide. Again, I appreciate all of you being here. If it were

not for you, we could not come up with the right kind of solutions.

And Bill Hawks who is a great friend of mine and the industry has

agreed to answer some questions when he finishes with his testimony. So, if you have something on your mind, we just need him

out of here by 3:00–3:15, something like that. Without further ado,

again welcome to this hearing.

Mr. Hawks, you are the first panel and I appreciate you being

here. You may proceed.

STATEMENT OF BILL HAWKS, UNDER SECRETARY, MARKETING AND REGULATORY PROGRAMS, U.S. DEPARTMENT OF

AGRICULTURE

Mr. HAWKS. Thank you, Mr. Chairman, it is certainly a pleasure

to be back here today where I was some couple, 3 or 4 weeks ago,

I lose track of time, to address this committee on animal identification. I am also pleased to have with me today Dr. Valorie Ragan,

who has been working on animal identification for the past couple

of years. She had worked with the USAIP, we have built on the

standards that they have put in place, the framework and the

standards, realizing the importance that that group played in animal identification.

In April, Secretary Veneman announced the framework for the

implementation of a National Animal Identification System. Incorporating what we learned through our involvement with the

USAIP, USDA is designing the National Animal Identification System so that it will be capable of tracking an animal or groups of

animals back to the herd or premise that is the most likely source

of infection. Our goal is to have a system in place that will identify

246

all animals and premises that have had direct contact with a foreign animal disease or a disease of concern within 48 hours after

discovery, helping to limit the scope and expense of the outbreak

and allowing us to minimize the impact on the animal health and

on domestic and foreign markets. Because of the complexity, we

plan on phasing in the National Animal Identification System to

provide a timely and cost-effective program while ensuring it is

functional, practical and reliable.

Initially, the program will be implemented on a voluntary basis.

By starting out with a voluntary program, it allows us to get buyin from producers and see how the marketplace responds. We may

eventually require premise and animal identification.

With this in mind, we published an advance notice of proposed

rulemaking on July 14. Among other things, it solicits comments

on when and under what circumstance the National Animal Identification System should move from voluntary to mandatory, and

which species should be covered now and over the long term.

In addition to the comment period on the ANPR, I have been

traveling the country discussing animal identification with interested parties at the USDA listening sessions. We have had 8 so far

and have 7 more to go. As I mentioned earlier I was here in Fayetteville back in June. I am due to be in Columbus, Ohio tomorrow

and next week I will be in Ames, Iowa and Joplin, Missouri. APHIS

is posting comments from these sessions on their website so that

interested parties are regularly updated.

As I travel the country, I’ve found that producers understand the

importance of the system, but they wonder how our system would

be funded. In April, Secretary Veneman announced a transfer of

$18.8 million from the USDA Commodity Credit Corporation to

provide initial funding needs to begin premise identification. Of

this, USDA is providing close to $12 million to 29 States and tribes

through cooperative agreements to help them implement premise

identification as well as carry out field trials or research to test and

fine tune identification technologies and collect animal movement

data. A list of the States and tribes, tribal projects is provided with

my written testimony.

To determine the allocation of this funding, a review panel rated

each application based on specific criteria. USDA was most interested in projects that included broad participation of stakeholders;

inclusion of multiple species; and involvement of multiple States or

tribes. Among other things, applications that reflected significant

cost sharing including third party in-kind contributions also receive

priority. Including the cost sharing of States and tribal governments and industry, the total investment in these cooperative

agreements is more than $16 million.

In addition to that, the President’s 2005 budget requests $33 million in funding and I must say that your body of the Congress has

approved that amount. And a portion of this money would go toward establishing additional cooperative agreements with the

States and tribes that did not receive funding from this year’s allocation.

I have frequently heard from producers concerns about the protection of their privacy. We recognize the confidentiality of this information collected in the National Animal Identification System is

247

an important issue. We are examining the issues very closely and

exploring various options to protect the information in the National

Animal Identification System from public disclosure.

We will continue to move ahead at an expedited pace. We are

gearing up for a substantial education and outreach program toward producers. Many of you have heard me speak before. My personal saying is ‘‘working together works,’’ and I will be the first to

say that the only way to implement this is by working together.

Working with the Nation’s producers, industry, animal health officials, State government, Congress, we will successfully achieve a

National Animal Identification System.

I apologize for going over shortly but I will be quite happy to answer any questions.

Mr. HAYES. We probably should have even turned off the lights

with this first panel. Do you want to take a little bit more time to

finish your testimony, or not?

Mr. HAWKS. That is fine.

[The prepared statement of Mr. Hawks appears at the conclusion

of the hearing.]

Mr. HAYES. This is a formal hearing as we talked about earlier,

but I think it would be appropriate, given the nature of what we

are trying to do, to somewhat make it informal at this point, and

entertain any questions that we might have from the audience and

do you want to do that in written form, Pam? OK, yes, if anybody

would like to ask the Dr. Ragan or Secretary Hawks a question

about where we are going, they have been very open, very transparent. He and I talk on a regular basis from Colorado, Washington, or wherever he happens to be. Just let me encourage any of

you to come to the mic and we have him here, let us avail ourselves

of that opportunity.

Mr. HAWKS. You not only have me we have technical support.

Mr. HAYES. We have technical support all around us today. Chester, you want to ask him a question? Go ahead.

Identify yourself so these folks from South Dakota can invite you

out to pheasant hunt or something.

Mr. LOWDER. All right, I am ready to go. I have got my shotgun

cleaned up and ready to go.

Mr. HAYES. I will get you another roll of tape before we send you

out there.

Mr. LOWDER. This is a running joke between the Congressman

and myself.

Mr. HAYES. That is right.

Mr. LOWDER. I am Chester Lowder, I am director of livestock

programs with North Carolina Farm Bureau.

You indicated that you had started a proposed rulemaking. Could

you elaborate just a little more on the strategy and the time tables

that would be involved with that?

Mr. HAWKS. Sure. We announced the advance notice—I feel a little awkward talking to them.

Mr. HAYES. We talked about that earlier.

Mr. HAWKS. We started an advance notice of proposed rulemaking and we announced that on, I think it was July 14, and the

comment period closes September. Now you are getting me speakVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00252 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
248

ing from memory, Martha. OK, we are finding the actual closing

date.

Mr. HAYES. You probably could take that mic and hold it in your

hand and turn around, Bill. I do not want you to get a crick in your

neck.

Mr. HAWKS. Well, I think they said that they had trouble getting

this all geared up. So, I will stay here. But that whole ANPR advance notice of proposed rulemaking included a lot of issues in

there. But, with direct regard to animal identification, we are asking questions such as at what time, under what circumstances

should this program become a mandatory program. What species

should be included, what should be excluded. So, it is sort of open

ended comments that we are looking for. We are truly looking

there again, just like these listening sessions that we are doing

around the country, we truly want to know what the producers,

what the affected community, if you will, think about these issues.

So, that is basically it when, under what circumstances, what species should be identified.

Mr. HAYES. Do you have a follow up on that, Chester? If you

leave here with a question unasked, that is your fault, not ours. We

will answer any question, I do not know if it is a satisfactory answer.

Mr. LOWDER. Again, Chester Lowder. With that indication you

indicated the species would be handled separately so we might

have a program in place for say beef before we would have a place

in force for equine?

Mr. HAWKS. Yes, sir, and really that is what the proposed rulemaking is about. It is to seek responses to those questions so if you

feel like that there should be some species that should be covered,

some species that should not be covered, we want to get those comments. We want to know what your thinking is. And we are getting

a lot of that through these listening sessions and we are taking

those comments, analyzing those comments as well. But this is just

a more formal rulemaking process, so we can get it definitely on

the record. Even though these listening sessions are not made a

part of the rulemaking process, that input is certainly sought after.

So, if you have comments, we want them.

Mr. LOWDER. So, the means and the technologies for species

could be different then. You would not necessarily have one blueprint.

Mr. HAWKS. Absolutely, and you have heard the chairman say

today that one size does not fit all, that is one of my favorite

sayings as well. I realize that a horse is not a cow, is not a pig,

I realize the distinction in livestock production in North Carolina

versus North Dakota and Florida, and California, Washington

State and Maine. So we do understand that, but we need your comments.

Mr. HAYES. Another question, Russ, you did not come all the way

from Missouri and Kenny, you did not come all the way from South

Dakota without a question, did you? Let me remind you Mr. Hawks

has got to leave here. When he leaves, do not let him get away

without a question. Marcus, do you have any questions?

Mr. HARWARD. I have always got a question.

Mr. HAWKS. We do not always have answers.

249

Mr. HARWARD. I am Marcus Harward, from the North Carolina

Cattlemen’s Association. I run about 500 or 600 momma cows and

we run two of the sale barns here in North Carolina. So, we have

a little vested interest in what we are talking about today. For

small producers, the biggest issue here in North Carolina from my

producers and this is what—I had 12 of them this week ask me is

the identification program—where will it start at. I mean is it

going to start on the farm, is it going to start at first point of entry,

first point of exchange or where are you looking for it to first start

at?

Mr. HAWKS. Sure, well from our way of looking at this—and let

me reiterate, this is for animal disease control and management

proposes, period. I probably should put on the record too, the

amount of information that we are looking for is relatively small.

We want to know premises, we want to know the individual animal

and we want to know where they have been. That is what we are

looking for. Having said that, if you run a cow/calf operation and

those animals are maintained on your farm—they are not ranchers

here in North Carolina nor are they in Mississippi. Some folks,

when I say a farm, a cow on the farm they do not think I am saying it right. But, as long as it is on your farm, it really does not

matter to us. But when it leaves that farm that is the information

we would need.

Mr. HARWARD. I do not know if you will be here I just want to

make sure I get this in before you leave. The majority of our farmers are 30 head or less and they wanted me to make sure you knew

that what will work here in the Southeast would be different than

what the Southwest would be, or any other part of the country.

They are going to need a very workable system, because they do

not rely on that source of money for a main source. There is a sizable income supplement to their income, and just remember that

they are I would not say hobby farmers, but we need to make

something very reasonable for them to work with.

Mr. HAWKS. And we really do realize that. Growing up in Mississippi and having been involved in farming in cow production

from time to time throughout my career, I certainly understand

that. And we are committed as I said, we realize the diversity in

production across the United States. So, we want to make—whatever we put out there, it has got to work. It has to work for those

small farmers that have 30 cattle, it has to work for those who

have 30,000 cattle. And so realizing that, it is not an easy task,

that is the reason why we are holding this, that is the reason the

Congressman is holding this hearing. That is the reason we are

holding all those listening sessions around the country, to make

sure that we get that input, and that is the reason why we are

doing these cooperative agreements too, to test some of these

things. To make sure that they work, that they do not add an additional burden on those people out there. We certainly understand

their concerns. I personally understand from having been a farmer

that we do not always know what is best. But what will work and

we have to test them to make sure they will work before they are

put on you, the producer.

Mr. HAYES. Marcus, runs two sale barns now, Marcus, and farms

and everything else, Turnersburg, Norwood. Before you ask your

250

question, those of you that do not know Bill Hawks maybe you

have been fooled in the past by somebody from Washington telling

you that they had come to listen to you and you maybe found that

was not exactly true. When Bill says he is listening to you, believe

me, he is listening. So, if you do not have a question you have

something you want him to hear directly from the horse or the cow

mouth be sure and do that very thing.

Mr. FOX. My name is Kenny Fox, Secretary Hawks, I have a

question. In our area we have many producers that are large operations and a lot of distance to cover, and we have concerns in how

reliable the tags are. Are you confined to just tagging animals?

Some of the studies that—not necessarily studies, but life experiences that I have had with tags, they are very unreliable. They do

not stay in, what are we going to do with the cattle that do not

have a tag?

Mr. HAWKS. I think the best way I could answer this is we are

not necessarily saying that there will be tags. We are technology

neutral. I think you and I both know that in cattle production

there, that is probably one of the most workable ways to do this

portion. You go out west you hear a lot about brands. We are having to look at ways to that, they will tell me when I am out west.

VOICE. We cannot hear you.

Mr. HAWKS. Sure, this cord is not quite longer enough. If I pull

this just a little bit and I lose it, somebody will have to work on

it.

Mr. HAYES. We will give you another one.

Mr. HAWKS. All right, thank you. So, they talk about their brand

systems out there. So, these are questions that have to be answered, it may not be a tag. There is a guy right here in North

Carolina, that when we were having a listening session was talking

about room and boluses. There is retinal scans, there is all kinds

of technology that can be used. There is also an adage that I have

that, there is a way to resolve some of those difficult issues. But,

with respect to those animals that lose their tag or lose their identification, there has to be a way, we will find a way to address that.

Val, do you want to add any to that?

Ms. RAGAN. I think it is pretty obvious that anytime that you put

any kind of a tag in the ear, you are right. The animals are going

to lose tags, especially if they are out on range. But, the important

thing I think here is to put it in perspective that if the tag is the

technology that is selected by that producer—again as Mr. Hawks

mentioned earlier we are not going to be tagging animals that are

just out on range. That are just out there breeding animals that

are staying out there. It is animals that are in movement. So, even

if those are tagged, if that is what the producer selects to use,

there are a couple of things—one there are a number of producers

already who are using tags who use backup systems. Double tags,

another technology in addition, or whatever. So, that is certainly

an option.

The other thing is that if tags are indeed what is utilized, we

have to be as practical and realistic as possible and realize that

there are going to be some that are going to lose tags. And even

if this evolves into a mandatory system, one of the questions has

been what happens if they lose a tag and it is mandatory, am I

251

going to get in trouble, or fined or whatever. And one of the key

things that we are trying to do with development of this system is

to keep it as practical and realistic as possible. So, recognizing that

if an animal loses his tag, we have got a mechanism for re-identifying that animal even if it is another tag.

But also, at the same time, I think if we have got animals that

are 99 percent tagged and we have one that loses a tag occasionally

that is not going to destroy our system. Whereas if we had animals

out there and 99 percent of them are not identified, we have a significant problem in tracking animal diseases. So, if we have—ideally we would like to have every animal identified. Obviously, it

makes the system work well, makes our jobs easier. But we also

will have to have a built-in processes for backups for the times

when those do fail.

And also, I think another important point is that I do not believe

that there is any system that is going to be a hundred percent effective in every case. But I still think if we have a significant portion or as close to as many of the animals identified as we can possibly do in the real world, we will be able to accomplish what we

are trying to do with disease tracking.

Mr. FOX. Another question to Dr. Ragan? I think that you are a

bit optimistic when you think you are 99 percent. I think with the

tag even if you use two tags, we are going to be looking at 20 to

25 percent of the cattle that are going to be unidentified.

Ms. RAGAN. I was not say that we were going to get 99 percent

identified in every case, that was an example of how it would work.

I think when you talk about tags and this is one thing that is important is that we are not advocating a tag or a specific type of tag

and that is one reason why. One of the things that we have heard

going to different listening sessions is the whole range even in the

same room with the same group of producers from those who were

adamant the tags worked perfectly for them and those in the same

room who will say they just do not work, you are going to lose a

significant portion of them. And that is one reason why we are

maintaining the technology-neutral aspect of it. If there is a producer who has a type of tag that works very well in that particular

operation, we want him to be able to use that. If it does not work,

if you are out on range conditions where animals are constantly

losing tags, and another type of identification system is better, then

that is the one we want to have an option out there for.

Am I being optimistic? Sure, I am being optimistic, I think that

we can make this system work. What percentage of animals are we

going to ultimately have identified, I do not know yet until we see

what kind of systems there are that are adopted and how well they

are put in. Whether it be a tag or a plant, an implant, whatever,

there is also the technical aspect of doing it right. And that is going

to have to be a part of that. So, yes I have been out there enough

I think to learn that there is no system that is going to be right,

but it is certainly going to be better then what we have right now,

I think.

Mr. FOX. Thank you.

Mr. HAYES. Kenny, were you in—did you come to Washington for

the technology show, I should be able to remember?

Mr. FOX. No, sir, I did not.

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Mr. HAYES. OK.

Mr. FOX. But I have been to other seminars that tagging companies have put on.

Mr. HAYES. I am sure that you are very familiar, but I was impressed with—I mean we can take you from boluses to DNA, and

those of you that are not from North Carolina, we have a group of

folks at Fort Bragg that they can identify you, and tell where you

are, and what you are doing at any time of the night and day. So,

we are not lacking technology.

Mr. FOX. Well, sir, I do not doubt that a bit, but the cost is another thing.

Mr. HAYES. Sure.

Mr. FOX. The chips that they implant under the skin, they travel,

50 percent of them are unreadable. I am not familiar with the

boluses but I do not think that they are very reliable either.

Mr. HAYES. Do not tell my guy up the road, he thinks they are

the greatest things since sliced bread. But anyway, you all keep

raising the questions, that is what we are here for. Bill, I think

now, that we are doing this, you would be able to count this as a

listening session as well as a hearing. But, raising these questions,

that is a way we make sure that we do not leave any stone, tag,

bolus or whatever unturned.

Mr. FOX. As you know, our organization that I represent on a

State level, Stockgrowers Association, we have a brand inspection

program and it is run by our organization. We contract with the

State and it works real effective and we trace animals, track animals all the time with it. And I advocate a permanent mark, it is

on the hide until they take it off, the hide off of the animal, it is

economical to do. A couple of hot irons for $25 lasts you for 10

years. I mean let us keep it as simple as possible.

Mr. HAYES. Sure, and that is why the whole regional approach

is so important. The size of the ranch in South Dakota is probably

a little bit bigger than the one in North Carolina, and other places.

Good point. Go ahead Bill.

Mr. HAWKS. Let me just follow up just a little bit. I think that

this exchange that we are having right here points out the diversity in cattle production across this country. It is something that

I said when I was wrapping up my statement that I always use

that working together works. We recognize that we have got to

work together with all of the industry to make sure whatever systems that we put in place, that it does not add an additional burden on the cattle producer, it is cost effective, it is simple and it

allows the flexibility for those producers to use whatever works for

them. So that is really our objective, and Dr. Ragan’s comments

about, yes, we would like to have a 100 percent identified, but we

also realize that we have got to have something that meets that

criteria that I just talked about—cost effective and diverse—to be

able to do that. So, that is our objective and that is what we are

here for. That is the reason the Congressman is doing that. As I

said, we are committed to work on this with you.

Mr. FOX. Thank you very much.

Mr. HAWKS. Thank you.

Mr. HAYES. Thank you. Anyone else?

Mr. HAWKS. Can I have this transcript posted on the website?

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Mr. HAYES. Absolutely. Yes, sir.

Mr. MARSHALL. Dave Marshall, State veterinarian in North

Carolina. Thanks for coming down, Valorie and Mr. Hawks.

As you are probably aware, we in North Carolina have probably

one of the more advanced developed premise identification programs in the Nation. And we literally have all of our swine farms,

poultry farms, rendering plants, packing plants, livestock markets,

and dairies already premise identified. That we were able to do

that, built upon trust with the producers, the farmers, and that is

a direct result of a confidentiality law that we have. I believe we

may be unique in the Nation, in that we can protect that data. In

working with the USDA on this animal identification program, Dr.

Weimers, we have completed a form that essentially asks us to declare do we want to use the national database, national allocator

system, national repository, lock, stock and barrel. Do we want a

third party review by the USDA of our State system, or do we want

to use a third party provider.

It is my understanding that there are three selections. We have

indicated that we would like a review of our State premise program

and use that in lieu of the national program. I guess my question

is, is the USDA willing or will they be able to issue national premises identification numbers to North Carolina farms without us

providing the information such as name, address that identifies the

farm? Can we produce a North Carolina premise identification

number and have a national number issued off of that with the

trust and the certification that our system can handle the information you need in time of a disease incident?

Mr. HAWKS. We have gotten pretty good, because we do these listening sessions together, I answer the easy questions, she answers

the hard one. With respect to the confidentiality of data, I cannot

stress enough that we are just as concerned about that as you are.

We are absolutely committed to protecting that confidentiality. We

are looking at several avenues of doing that know. We feel that as

long as we have a volunteer system, that is the case.

With regard to the ultimate data, we feel like that probably

should reside with us at the national level. Having said that, there

certainly is no reason that you—there is such a small amount of

information that we are looking for, I do not think that we care

about a lot of this other information. We just want to be able to

rapidly track those animals to get to those premises that are of

concern, to deal with the animal disease. So, I—Val, you want to

take a shot?

Ms. RAGAN. I think, Dave, if I understand completely what your

question is, the national premises allocator system, the lock, stock,

and barrel that you are talking about, is provided as a mechanism

for registering premises. It is a tool, if you will, to register premises, and that is already working in concert with the premises

numbering allocator. And the idea is to have the premise numbers

allocated at the local level, at the State level, and then, have whatever data you want and I know about your system.

Dave, we have known each other for 20 years, I know about what

he does here. But with your system, you all have a whole lot more

information here than we would need. So, what we would want is

to allow you to maintain whatever you want here, but there are

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certain key pieces of information that we would want at the national level so that we can quickly do a search if we need to. And

the key thing here is I think is standardization of data across the

country.

Your system is very far advanced, is an excellent system. I think

everybody recognizes that, and you do have your data protected

and I think one of the things that is important, as Mr. Hawks has

alluded to, is the confidentiality of data and the protection level is

something that is extremely high on our list right now, and if you

wanted to—if you have some concerns about your ability versus our

ability we certainly understand that.

One of the things we have said a number of times is we do not

have one problem of protecting the data, we have 51. We have the

data at the national level which is minimal, that would actually direct us to which State we need to go to if we needed to do further

work, in which case it would be in your hands as the animal health

authority here, to do whatever the follow up work would be, should

there be something recognized that needed to be investigated. But

in order to very quickly do that across States, we would need data

standardization, and certain just minimal key pieces of data. So, I

would say let us, you and John and myself, if you want, talk further about specifically what we need and you have comfort or discomfort with and see if we can come to a compromise on what will

work for you and also would work for our needs at that level. Do

not need much, we certainly want to build on what you all already

have and not replace it, and you all do not need the general allocator system. That is not a premises system, the one that we are

providing is just a mechanism to register premises which you already have.

I say let us talk off line a little bit more and see what we can

do about marrying up what you all need to do with what we need.

Mr. HAYES. David, when you and I were together last week I left

you at 3:30, I was on the phone with him from Greeley, Colorado

at 5:00, remember 7 not 9. We have got covered.

Mr. HAWKS. Yes, and I think I would like to recognize for the

record too that you have done a wonderful job here with animal

identification in the State of North Carolina. Probably one of the

most advanced States in the union, and we certainly want to work

with you collectively, cooperatively to make sure we get what we

need and you maintain what you need here as well.

Mr. MARSHALL. We did not come here to sing our praises, we

came here to express some concerns. My personal concern is there

is going to be very limited participation on a voluntary basis without solving this problem. And I think that we can, we are a step

ahead here and we can get that trust between ourselves to where

we can provide certain key individuals in your organization with

possibly some secure access to our data. But if we do not have to

provide—there is so many fields that you have to fill in to get that

national identification number, and one of them is the name, and

one of them is the address. I do not think they issue you a number

unless those two particular fields are filled in, and it is just not

going to happen. I mean if can solve this problem, we can—we have

got 7,000 premise to download right now for national identification

numbers, but it is not going to happen until we solve that.

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Ms. RAGAN. I think what you are saying, Dave, is exactly why

it is starting off voluntary, because that trust level and that concern about providing that information is not unique to North Carolina. It is something that we hear regularly all across the country,

so that is one reason we kicked up with our attorneys the efforts

to get those things resolved because we are not going to make anything mandatory as long as that level of discomfort with the Government having whatever is there. And it will be until we are able

to resolve that and you all have resolved it here, and we recognize

that, and I think until we can resolve it at some comfort level that

you are satisfied with, it is going to remain on a voluntary basis,

absolutely.

Mr. HAYES. Thank you, David. I think we have time for one more

question. If we do not have one more question or comment—we

have one more then we are going to let the doctor and Secretary

move on down the road. Yes, sir.

Mr. KAZEE. I am John Kazee, with Livestock Marketing Association. Back to the tags or the reading of the tags in commerce, if

we have an auction with 1,000 head a day, let us say they are identified with the tag or some type of readable system. The failure

rate of 5 percent on a 1,000 head sale, that is 50 livestock that we

do not have identified. I think that is why we are pushing that any

program that we need to have the pilot systems out there, the

trials to find out what do we do about those 50 head, do we have

to scan everything again. Part of them were read part of them were

not. Those are the difficulties that we see that I think you are to

be applauded for making it voluntary to start with until we work

out a lot of these problems.

Mr. HAWKS. Thank you, we certainly recognize the concerns of

the livestock markets, and we—that is the reason that we are

doing cooperative agreements. That is the reason we will be funding more in the next year when we get our appropriations for the

next year. So, we realize that and we are certainly prepared to

work with you.

Mr. HAYES. Bill, Valorie, thank you very much for being with us.

As you and I discussed on the phone the other afternoon, there is

a significant, I think $33 million appropriation that will be coming

through. Those folks that were not recognized on the first round

are certainly in the running, again we are very serious about doing

this right. And thank you all very much for being here and we will

let you get back in time to back your bag packed for Joplin, Missouri, next.

Mr. HAWKS. Well, actually it is Ohio, go directly there tomorrow,

and I think that one is tomorrow. Go there today, do it tomorrow

morning.

Mr. HAYES. Well, thank you very much.

If it is agreeable to everyone, we will call the second panel at this

point. And while you are coming up just for purposes of those that

do not know, the second panel will be David Collier, chairman,

Swine Advisory Committee, American Farm Bureau, in Fayetteville, accompanied by Mr. Chester Lowder, famous shotgun purveyor; Russ Kremer, president, Missouri Farmers Union, from

Bonnots Mill, MO, on behalf of the National Farmers Union; Kenny

Fox, region III vice president, South Dakota Stockgrowers,

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Belvidere, SD, on behalf of R-CALF, United Stockgrowers of America; Marcus Harward, president, North Carolina Cattlemen’s Association, from Richfield NC, sale barn operator; Rann Carpenter,

chief executive officer, North Carolina Pork Council.

You all please be seated. Dr. Eric Gonder, veterinarian, Goldsboro Milling Company, Goldsboro, NC, on behalf of the National

Turkey Federation, North Carolina Poultry Federation.

Gentlemen, let me welcome you to your hearing. We appreciate

you being here and if you do not have any prearranged batting

order, I have Mr. Collier scheduled to go first. Mr. Collier, if you

are prepared, please proceed.

STATEMENT OF DAVID COLLIER, CHAIRMAN, SWINE ADVISORY COMMITTEE, AMERICAN FARM BUREAU FEDERATION,

FAYETTEVILLE, NC

Mr. COLLIER. I am David Collier, chairman of American Farm

Bureau Swine Advisory Committee. We appreciate your scheduling

this field hearing on the important issue of livestock identification

and for inviting AFBF to share our perspective on an issue that is

critical to our members.

We very much appreciate USDA’s announcement on December

30, 2003, that it would prioritize the development of an Animal

Identification System for disease tracking purposes. We believe the

development of the National Animal Identification System is proceeding very well.

Farm Bureau believes that there are four key issues that must

be addressed in order to ensure producer acceptance of an animal

identification system—the cost of the system, protecting producers

from undue liability, ensuring the confidentiality of data submitted

by producers and sufficient education and information.

First is the issue of cost. A cost-effective national system of livestock identification with equitable cost share among Government,

industry and producers must be established. Considerable financial

expense will be associated with the development and implementation of an identification system. Incorporating existing systems

such as previously funded USDA pilot projects and privately funded identification methods already employed by producers will help

reduce the cost. However, the price tag for establishing, operating

and maintaining a system continues to be a huge issue for our

members. Producers cannot and should not bear an unfair share of

the cost of establishing or maintaining an animal identification system. Our ability to move forward with a voluntary system depends

on adequate and equitable funding.

Second is the issue of confidentiality. The confidentiality of data

and access to that data must be adequately addressed. The NAIS

should ensure the security of producer information and respect the

privacy of producers by only collecting data necessary to establish

an identification system. Any data collected to comply with an animal identification program must be maintained and used solely for

the purpose of animal disease prevention and control. Furthermore,

our producers must be protected from public disclosure under the

Freedom of Information Act. Otherwise, proprietary information on

individual farms could be exploited by the farm’s competitors or by

activist groups.

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USDA has indicated that it intends to administer the NAIS cooperatively with the appropriate State animal health officials. Because of the major role that State governments play in this system,

we must ensure that data is protected at both the State and Federal levels.

Finally, it is imperative that the only agencies allowed access to

the information are animal health and other agencies with a legitimate disease and emergency response purpose. There must be clarity on exactly which Federal and State agencies will have access

to the data. Arguments can be made for and against providing

other agencies access to some of the information. It is critical that

a public discussion on how much information, what type of information, and availability to whom, be conducted immediately.

Liability is our third issue. Many producers worry that they

might be forced to share liability for food safety problems that are

now limited to meat merchandisers. An identification system must

protect producers from liability for acts of others after the livestock

leaves the producer’s control. This includes concerns about nuisance suits that name everyone who handled particular livestock.

Fourth is the issue of education. It is critical that producers fully

understand what an animal identification system will and will not

do. We applaud the administration for setting aside $3 million of

the fiscal year 2004 emergency allocation for producer funding.

An advisory board should be established to help regulate an animal identification system. The board should be comprised of producers, processors, animal health authorities, and the USDA. The

board should continuously evaluate the overall performance of the

animal identification system and make recommendations for improvements.

As we move forward, we believe Congress must address the following three issues in order to ensure a workable identification system.

Confidentiality, USDA has repeatedly said that confidentiality

can be maintained as long as the program is voluntary. However,

they have also said that legislative authority will be needed to protect such information when the identification program becomes

mandatory, and they have not yet identified the exact authority

that allows them to adequately protect confidentiality even under

a voluntary system.

Thank you.

[The prepared statement of Mr. Collier appears at the conclusion

of the hearing.]

Mr. HAYES. Thank you, and we do have a time clock for obvious

reasons. As you finish your testimony, if you did not complete a

thought or if there are other things that come up when you are listening to other witnesses we will handle them in the Q&A later.

So, think about that as we go forward.

Mr. Lowder.

STATEMENT OF CHESTER LOWDER, DIRECTOR, LIVESTOCK

PROGRAMS, NORTH CAROLINA FARM BUREAU FEDERATION,

NORWOOD, NC

Mr. LOWDER. Thank you, sir. Chairman Hayes, my name is

Chester Lowder, director of Livestock Programs for the North CaroVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00262 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
258

lina Farm Bureau. On behalf of Larry Wooten, president of the

North Carolina Farm Bureau, and our approximately 460,000

members, it is an honor to testify before the subcommittee.

Mr. Chairman, thank you for conducting today’s hearing. As a

constituent of North Carolina’s Eighth Congressional District, I

know that you have always been a strong advocate for North Carolina’s agriculture industry.

As the State’s largest general farm organization, the North Carolina Farm Bureau represents diversified farm families from all 100

counties in our State. And as you know, Mr. Chairman, many of

our members depend on livestock for their livelihoods.

North Carolina’s farmers realize the need for an effective voluntary animal identification program. However, producers who own

livestock like myself are not without concerns relating to this important issue. Specifically, North Carolina Farm Bureau supports

a voluntary animal identification initiative that is cost effective,

confidential, able to accurately track animals, designed to adequately address the liability concerns of producers, and flexible.

Additionally, such a system must be implemented incrementally to

avoid disrupting livestock production.

First, an animal identification program must be cost effective.

Producers are concerned about how much of the program costs they

will be forced to bear. Individual producers have no way of passing

on the costs to the consumers, who are most likely to benefit from

the system. The establishment of a National Animal Identification

Program may impact a farmer’s ability to sustain their operation

and make a profit. In particular, North Carolina’s economy may see

a negative impact from an animal identification initiative because

of the size of the State’s livestock industry.

Second, an animal identification program must be confidential.

Mr. Chairman, North Carolina has every species of livestock that

would be covered under such a program, from bison and beef cattle

to turkeys and tilapia. In 1964, livestock and poultry accounted for

30 percent of the State’s agricultural cash receipts, 30 years later,

more then 60 percent of those cash receipts are the result of our

multi-billion dollar livestock and poultry industry. Today, relatively

new sectors of our livestock industry, such as dairy and meat goats

and aquaculture, are providing our farmers with additional opportunities.

Mr. Chairman, the success of this program will depend on producers belief that the information collected will remain confidential. Farmers will be more likely to embrace a system that uses information for the purposes for which it was gathered, tracking diseases and residue problems. Maintaining the confidentiality of animal identification information is important for the protection of all

involved in the production of livestock.

The Federal Government must safeguard, possibly through the

Department of Homeland Security and the U.S. Department of Agriculture, exactly who has access to program files. Any information

obtained under the initiative should be accessible to the animal industry and other appropriate public agencies for the sole purposes

of planning effective responses to any disease outbreaks or acts of

terrorism.

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Third, North Carolina Farm Bureau supports a livestock identification system that will efficiently track animals. As you know,

Mr. Chairman, tracking all animals represents a significant challenge for the industry. In the event of a disease outbreak, the ability to accurately trace an animal within a 48-hour period would

allow USDA and State agencies to quickly isolate a problem and

minimize damage.

As you know, it is common for livestock ownership to change

hands several times during the life of an animal. In fact, some livestock even crosses international borders. With this system of multiple owners, any unauthorized residue found in an animal’s tissues

could be wrongly matched with an honest, hardworking producer.

This reality demonstrates the importance of traceability in pinpointing the correct source of disease problems.

Fourth, North Carolina producers are deeply concerned about liability issues relating to a disease outbreak. Once an identification

system is in place, it is very possible that a problem could be linked

to an individual producer when in fact the animals could have contracted a disease after leaving the care of that producer. Unfairly

implicating a producer without having all of the facts almost certainly will hurt that producer’s bottom line. Therefore, the identification system should include safeguards that prevent the release

of information until a thorough and complete investigation is conducted.

Finally, the national identification system must be flexible to

allow for regional differences and enable producers to generate

added information that will assist them in their operations. Such

a system must also incorporate existing identification systems such

as the national scraping program for sheep.

An effective animal identification system would almost certainly

benefit producers. Large scale producers and integrators may develop new marketing strategies through such a system. While we

have many large livestock and poultry operations in North Carolina, we also have many small farms that operate at significantly

lower animal numbers. The regulations associated with an animal

identification program must not be so onerous that these small

owners are forced out of business.

I want to thank you, Mr. Chairman for having the hearing today.

[The prepared statement of Mr. Lowder appears at the conclusion of the hearing.]

Mr. HAYES. Thank you, sir. Mr. Russ Kremer, National Farmers

Union.

STATEMENT OF RUSS KREMER, PRESIDENT, MISSOURI FARMERS UNION, BONNOTS MILL, MO, ON BEHALF OF THE NATIONAL FARMERS UNION

Mr. KREMER. Thank you, Chairman Hayes, for holding this hearing and this opportunity to testify before your subcommittee concerning the development and implementation of the National Animal Identification System. My name is Russ Kremer, I am president of the Missouri Farmers Union and here today to testify on

behalf of the National Farmers Union. I am a diversified family

farmer in the State of Missouri, with an operation consisting of

hogs, cattle, hay, and vegetables.

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At our 102d annual convention in early March, members of the

National Farmers Union debated and developed our 2004 policy, including a statement on the development of an NAIS. Animal identification along with an array of animal health, consumer health and

beef and cattle trade issues have been pushed to the forefront of

national discussion since the BSE-positive cow of Canadian origin

was discovered in Washington State last year.

National Farmers Union members believe proactive steps should

be taken to maintain and ensure consumer confidence in the safety

of U.S. beef and beef products, stabilize our domestic and export

markets, and minimize any economic damage resulting from this

unfortunate situation. A vast array of issues have not yet been addressed, however, in the discussion of developing a verifiable animal identification system, which we believe need to be settled between the administration, Congress and industry before further

promulgation or implementation moves forward. Today, I will outline the five major concerns our member have relative to an animal

identification program.

First, cost burden on producers; second, adequate liability protection firewalls; third, complimentary data sharing with the country

of origin labeling law; fourth, full participation and shared responsibility throughout the industry; and fifth educational component

for producers.

First of all, the cost of implementing and maintaining a verifiable identification system is of great concern for livestock producers

faced with front-line responsibility for any identification program.

For instance, Missouri, we still have 65,000 cattle producers most

of which are smaller herds. According to the U.S. Department of

Agriculture, the development of an identification system will cost

an estimated $550 million over 5 years. Earlier this year, the administration included a request of $33 million in its fiscal year

2005 budget for implementation of an NAIS. Under the estimations

of cost provided by USDA, they plan to provide one third of the cost

over 5 years, if $33 million is the benchmark for what the administration will request annually. Recently, USDA announced it would

award 29 State and tribal cooperative projects with $11.64 million

to begin premise identification. While USDA plans to partner with

State government and industry in managing the total cost, we are

concerned that a disproportionate amount of the costs associated

with such a system will fall on producers, particularly smaller producers, in a way that makes them less positioned to remain competitive in the marketplace. To the extent that such a program is

viewed in the national interest, NFU believes it may be appropriate for the public to bear a greater portion of both the development cost as well as those associated with the day-to-day management of the program.

Second, any effective trace back program runs the risk of compiling information that may be unfairly and improperly accessed and

utilized by others. NFU believes it is necessary to include effective

liability protection firewalls including, but not limited to, an exemption from the Freedom of Information Act. We are very concerned that a system which is maintained outside a public agency

such as the USDA creates an inherent risk to participants that the

private or proprietary information may be divulged in a way that

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is detrimental to individual firms or to the operation of a local, regional, national or international market. We are concerned that unless adequate firewalls are put in place, most of the liability could

be shifted to our Nation’s livestock producers. We certainly were

encouraged by the remarks of Under Secretary for Marketing and

Regulatory Programs, Mr. Bill Hawks, when he stated USDA will

pursue only a voluntary system until they can ensure the confidentiality issue is resolved. It is our hope that officials at USDA will

work with members of this subcommittee and other leaders in Congress to establish legislation that would ensure producers confidentiality, as the program moves from voluntary to mandatory.

Third, we believe Secretary Veneman should immediately implement the mandatory country of origin labeling law. The Secretary

has the congressional authority and discretion to implement this

program in a common sense manner that bears minimum burden

and cost on producers, processors and retailers. After the labeling

program has been implemented and at a point an animal identification program is up and running, we believe it is necessary to

coordinate the two programs, so that U.S. livestock producers will

not find themselves paying the bill.

Lastly, education is definitely needed out among our producers.

And again I will like to thank you Mr. Chairman for this opportunity.

[The prepared statement of Mr. Kremer appears at the conclusion of the hearing.]

Mr. HAYES. Thank you, sir. Mr. Kenny Fox, from South Dakota.

STATEMENT OF KENNY FOX, REGION III VICE PRESIDENT,

SOUTH DAKOTA STOCKGROWERS, BELVIDERE, SD, ON BEHALF OF R-CALF, UNITED STOCKGROWERS OF AMERICA

Mr. FOX. Good afternoon Chairman Hayes. I am Kenny Fox, a

cattle rancher from Belvidere, South Dakota, and I appreciate the

opportunity to provide comments on the development of a U.S. Animal Identification Plan. I am here today representing R-CALF USA

which is a non-profit trade organization that represents 11,000

members. I am also here representing the South Dakota

Stockgrowers Association for which I am a regional vice president.

The South Dakota Stockgrowers has about 1,500 cattle producing

members. Both organizations are made up of producers like me

who make our living in the cattle business. Ranching is not a

hobby or a tax writeoff for me and my family, it is our livelihood.

R-CALF USA’s objectives in establishing a National Animal identification program are as follows:

1. Clarify the intended purposes and need of a National Animal

Identification Program and implement effective measures to prevent the misuse and abuse of proprietary information.

2. Evaluate both the cost and the benefits of a National Animal

identification plan, by doing a cost/benefit analysis.

3. Evaluate the effectiveness of current State and regional animal identification methods.

4. Ensure that the U.S. cattle industry does not foot the bill for

the cost of the animal identification plan.

5. Ensure that the current rush for animal identification program

does not distract the U.S. from its important responsibility of proVerDate 11-SEP-98 10:45 Sep 13, 2004 Jkt 094703 PO 00000 Frm 00266 Fmt 6601 Sfmt 6601 F:\DOCS\10824 HAGRI PsN: HAGRI
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tecting U.S. cattle herds from the introduction of foreign animal

diseases that may enter the U.S. through inadequate border controls.

6. Maintain the highest standards of health and safety for our

cattle industry by continuing to avoid and prevent the introduction

of spread of animal diseases.

7. Maintain current regulations that prohibit the importation of

cattle or beef from any country where BSE and FMD are known

to exist.

I would like to note that before animal identification can proceed,

a primary measure of identification is needed. The following measures provide our industry and our consumers with the first line of

defense against both the introduction of foreign animal diseases

and the potential spread of a foreign animal disease.

1. Mark all imported cattle with a permanent mark of origin.

2. Identify all imported cattle already in the United States with

a permanent mark of origin.

3. Implement country of origin labeling so that in the event of

a disease outbreak in a foreign herd, all foreign cattle and foreign

meat can be immediately identified and quarantined.

R-CALF USA recently commissioned a scientific study known as

the Value of Information study that shows that the value to the

U.S. cattle industry of tracking foreign cattle that enter the U.S.

is $80 million per year. And the study shows that if a BSE case

is detected in a foreign animal that has been tracked in the U.S.,

the value to our industry is over $500 million.

In general there are three major components for which animal

identification cost will be assigned—cost of premise identification,

cost of access in transfer, and cost of building the all encompassing

framework. Many cattle producers in many States through brand

inspection, health certificates, sales receipts, and truckers log books

can trace the movement of cattle very quickly.

In May 2003, when Canada discovered a case of BSE our brand

office received a call from the Montana Department of Livestock

asking for help in tracing several Canadian bulls that had traveled

from Canada, through Montana, and into South Dakota, and were

known to be siblings of a BSE infected cow from Canada. Through

the use of our brand inspection records, our chief brand inspector

was able to trace the movement of those bulls within the State of

South Dakota in 3 hours.

A hot brand is the only true permanent mark of identification.

A brand cannot be removed until an animal’s hide is removed.

Electronic tags and micro chips can either be removed or they can

shift under the skin until they are no longer readable by a scanner.

Electronic tags are impractical in ranching situation. Ranchers like

me who operate on open range have found that ear tags are very

difficult to keep in place. In addition, we do not have our cattle in

a confined area where they can be easily accessed for tagging or

scanning.

R-CALF USA jointly applied for a grant from USDA for the purpose of evaluating the use, integration and compatibility of existing

systems, such as our branding system, into a national animal identification system. Unfortunately, the USDA did not approve funding for our joint pilot program. Obviously, if such existing premise

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identifiers and cattle tracking methods could be integrated in a national animal identification system the cost to producer would remain relatively low. The most expensive and most complicated

component of a National Animal Identification Program are the

costs associated with building, connecting and maintaining a network infrastructure system that allows all existing and new networks to communicate with each other from all regions of the U.S.

Furthermore, maintaining the proper confidentiality of the animal identification information is a big concern. Cargill’s recent announcement in Canada that it would refuse to knowingly purchase

cattle owned by members of R-CALF USA has turned this speculation into a genuine threat with huge economic implications. Cargill

has demonstrated that it is willing to use information related to

cattle ownership for purposes of discrimination. Now, the possibility that Cargill and other packers may use information transmitted

via a national animal identification to the detriment of producers

is a stark reality. Congress must proceed cautiously and prudently

to protect proprietary information.

Congress should ensure that information collected under a National Animal Identification Program should be available only to

public health officials for the purposes of tracing an outbreak. Further, Congress should ensure that cattle producers should not be

held liable for claims other than those made by agencies authorized

to access data in cases of animal health emergencies through an

animal identification system.

In general, the role of the State and the Federal Government in

developing and administering a National Animal Identification Program will be dependent on the amount of funding these Government entities are willing to provide. The development of any program must be accomplished through a cooperative effort between

Government and the U.S. live cattle industry, who would be most

affected by such a program.

In closing, for me and the thousands of independent cattle producers that I represent here today, ranching is the livelihood that

is very important and valuable to everyone in America. In regard

to the national animal identification plan, it is our goal to work

with Congress. However, we hope that Congress will not rush into

an animal identification program that does not properly address

the legitimate concerns raised by cattle producers.

We have stated our objections and welcome the opportunity to

clarify any of the given points. Chairman Hayes, thank you for allowing me to present testimony on behalf of R-CALF.

[The prepared statement of Mr. Fox appears at the conclusion of

the hearing.]

Mr. HAYES. Thank you. Mr. Marcus Harward.

STATEMENT OF MARCUS HARWARD, PRESIDENT, NORTH

CAROLINA CATTLEMEN’S ASSOCIATION, RICHFIELD, NC

Mr. HARWARD. Mr. Hayes and other guests, I personally want to

thank you for the opportunity to discuss with you USDA’s proposed

animal identification system. My name is Marcus Harward and I

currently own and manage about 500 brood cows in the Piedmont

of North Carolina. I also own and operate two sale barns in North

Carolina and currently serve as president of the North Carolina

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Cattlemen’s Association. I was also recently elected vice-chair of

the Southeast Livestock Network.

Five minutes is not a long time to really get into the many issues

concerning a national identification system, so I will tell you the

basic positions that my fellow producers, market operators, and

myself are concerned about.

I understand the ramifications of the United States cattle industry not currently having a traceable animal identification system

while we are presently trying to open up many markets across the

world. I also understand that many market programs within the

U.S. depend on a verifiable tracing program many think would help

maintain consumer demand in this country. The need for a traceable identification system in this country is undeniable, and I support the philosophy that says some type of system is needed. However, the type of system put in place is a key issue and will determine how many producers in North Carolina continue to raise cattle in the upcoming years.

It is essential that the National Animal Identification System not

to be so burdensome to small producers that their cost of scale will

not allow them to continue to produce cattle. When you consider

the cost of scale, keep in mind that the vast majority of cattle produced in North Carolina come from small herds, smaller than 50

and a majority would come from herds smaller than 25. These

small producers should not have to tag animals on their farms and

should really only have to tag the animals that enter into the commerce, interstate commerce.

Markets and order buyers will need assistance from the Federal

Government to finance the needed infrastructure to record data

and make it available for recipients of shipped cattle. This should

not be an annual line item paid by the taxpayers, but should be

considered a start-up-program that can be continued to be funded

by the producers themselves. The question that needs to be answered is whether or not the consumer public has a need to be able

to know where its food is produced. Every day we read about terrorist threats and global animal diseases, so it would hard to conclude that consumers do not have a vested interest in tracking animals; therefore, consumers should have some role in funding the

needed infrastructure.

Having made the case of Federal funding of this system, I do not

believe the sole purpose of such an expensive system should have

its only goal to be able to identify animals in the face of an epidemic disease outbreak. I believe that pertinent data can and

should be extracted from the system to make animal agriculture

more efficient for small producers.

If a cow/calf producer is going to take the initiative to start this

whole process of tracking animals from farm to fork, he should

have the opportunity to retrieve data to offset the costs of getting

the system started. This means that the goal of the NAIS should

not only be to track diseases, but also include making our overall

production system better for both producers and consumers. Whatever the system used to track animals winds up being, it should

be able to be integrated in a producer’s recordkeeping system. This

will aid the tracking ability of the overall system.

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Now, the whole question of sharing and protecting data creates

many more questions that need to be answered. Producers will

need to trust both State and Federal authorities to protect sensitive

information. I suggest that no Government agency be allow to access all the information. Cattle producers would prefer that private

entities, managed by producers such as Southeast Livestock Network be the sole keepers of all the pieces of the puzzle. Government agencies would have access to the information they need to

manage threats. It is not merely the fact that producers do not entirely trust Government with the data, but producers do not want

to deal with the size of bureaucracy that would have to established

to manage it.

In conclusion, the true test of the National Animal Identification

System will be defined by the future hurdles that will attack our

system. However, in the near future if we see this tracking system

only means something to Federal regulators, we have both failed

the small producers and our citizens miserably.

Again, I want to thank you for the opportunity to come here

today.

[The prepared statement of Mr. Harward appears at the conclusion of the hearing.]

Mr. HAYES. Thank you, Mr. Harward, you are the only one that

finished ahead of time. Kenny, he has a hat just like yours but he

left it home to get the oil changed today. [Laughter.]

Mr. Carpenter.

STATEMENT OF RANN CARPENTER, CHIEF EXECUTIVE

OFFICER, NORTH CAROLINA PORK COUNCIL, RALEIGH, NC

Mr. CARPENTER. Thank you Mr. Chairman, it is awfully good to

see you, particularly here in your district, sir.

My name is Rann Carpenter and I am the chief executive officer

of the North Carolina Pork Council. The council represents over

46,000 North Carolinians involved full-time in the pork production

business.

Producers believe that a successful animal identification program

will contain several key components:

First, it will cover all livestock but contain programs that are

species specific.

Second, it will be capable of accurately tracking back to a premises within 48 hours.

Third, it will protect the security of the farm and the Nation’s

food supply through confidentiality of certain information.

And fourth, it will be appropriately and fully funded.

For a national identification program to be effective, it must take

into account the difference in the production, transportation and

processing of each livestock species. What works as a means for

identifying one species of animal does not necessarily work for another.

During her testimony before the U.S. Senate Committee on Agriculture, Nutrition and Forestry in March of this year, Ms. Joy Philippi, representing the National Pork Producers Council gave an

important illustration on why it is so vital that a national identification program be species specific. Ms. Philippi noted that the cattle industry utilizes electronic identification ear tags as their

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means of identification, which appears to be a wise and prudent

choice. However, based on the economics alone this would not be

a wise choice for the swine industry. A sow can have 22 to 24 offspring each year. The cost of each ear tag is $2. Therefore, a pork

producer would pay $44-$48 per year for a breeding female. A cow

on the other hand, has one calf per year at an annual cost of $2

to identify the offspring. One size does not fit all and our National

Animal Identification Program should recognize that fact.

An animal identification system is part of guarding the Nation’s

food and agricultural infrastructure. In the case of an animal disease outbreak or intentional or unintentional introduction of a

pathogen or toxin, a National Animal Identification Program must

be capable of identifying all premises that had direct contact with

a diseased animal within 48 hours after discovery. Timely and accurate identification will ensure better defense for the Nation’s food

supply by allowing for a timely and appropriate response to an animal health issue. Identification of all impacted animals within 48

hours will also provide the public with a greater surety that the

food supply is being well protected.

Most Americans understand that to protect the food in this country, we must protect the farms where that food is being raised. The

council believes that ensuring the security of a farm is an important component of the program. In that regard the national program must take into account the potential for harm should certain

information be made unduly public. Real time data regarding animal movement, the number of animals and the time and date that

animals are at a specific site could provide strategic information for

those whose mission is to disrupt and threaten our national food

production infrastructure. North Carolina pork producers have a

successful collaborative history with our State veterinarian’s office

that has protected animal health and at the same time provided

necessary confidentiality to ensure farm security. Mr. Chairman, I

think that you can see that by the comments of Dr. Marshall Day.

A National Animal Identification Program must do the same.

Finally, full and appropriate funding at the Federal level must

be made available to the States for implementing a national program. USDA has requested $33 million from Congress for fiscal

year 2005 for the implementation of a program. However, recent

estimates put the cost of full implementation perhaps as high $121

million a year. And this gives us concern in North Carolina, and

certainly in other States that we will not have the necessary resources to fully implement the national program.

Implementation of the program at the State level is important

because it will provide opportunities for Federal funding to maximize its efficiency and effectiveness by downloading responsibilities

to those agencies closest to producers and we think that is the

right way to go, leverage local expertise. Each State must have the

dollars needed to implement the animal identification program,

keeping in mind the State’s particular resources needs available in

each State. Without the financial support of Congress, livestock

producers could be forced out of business through well meaning yet

economically impractical regulations.

The council believes that the USDA and Congress can meet the

responsibilities to the food consuming and food producing public by

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developing and implementing an economically feasible program

that is premises-based. In addition, protection of specific farm information is crucial, and the council will continue to work with you,

sir, and other authorities to try to carry out this program.

Thank you.

[The prepared statement of Mr. Carpenter appears at the conclusion of the hearing.]

Mr. HAYES. Thank you, sir. Dr. Gonder.

STATEMENT OF ERIC GONDER, VETERINARIAN, GOLDSBORO

MILLING COMPANY, GOLDSBORO, NC, ON BEHALF OF THE

NATIONAL TURKEY FEDERATION AND THE NORTH CAROLINA POULTRY FEDERATION

Dr. GONDER. Good afternoon Mr. Chairman. I am Eric Gonder,

with the National Turkey Federation. I appreciate the opportunity

to testify. I am a practicing poultry veterinarian with 30 years experience. I am currently the senior staff veterinarian at Goldsboro

Milling Company, in Goldsboro, North Carolina.

The poultry industry is a vital part of North Carolina’s economy.

Growers produced 45.9 million turkeys annually, for the last 15

years. North Carolina is consistently ranked as one of the Nation’s

two largest turkey producing States. North Carolina is No. 4 in

chicken production, 700 million chickens annually. The National

Turkey Federation represents all segments of the turkey industry,

including processors, growers, breeders, hatchery owners and allied

companies. It is the only national trade association representing

the turkey industry exclusively.

Goldsboro Milling is the sixth largest privately held company in

North Carolina, and we produce 9 million turkeys and 1.6 million

hogs annually, and manage 1,200 brood cows. We provide hatching

eggs and day old poult throughout the eastern United States, we

are one of the primary owners of Carolina Turkeys, the Nation’s

fourth largest turkey processor, with 580 million pounds live

weight produced in the last year.

USDA has been working for more then 2 years to develop a National Animal Identification Program. The turkey industry has

been an active participant in that process. One reason is because

export markets now consume about 8 percent of all turkey produced in the United States, substantial change from previous decades. Carolina Turkeys exports more than 20 percent of its production. Those markets are extremely sensitive to animal disease outbreaks. At one point in 2004, we saw 60 countries impose partial

or total bans on the importation of U.S. poultry products costing

more than $20 million per week nationally, primarily, because of

isolated avian influenza outbreaks.

The emerging threat of bioterrorism also must be factored into

the planning for an animal identification system. We have to have

the capability to respond quickly and contain an outbreak should

an attack occur. Obviously, there was the discovery of a single case

of BSE in a cow in Washington State that accelerated calls for a

national identification program. Under Secretary Hawks and other

USDA officials have briefed Congress, industry, and others regularly about the steps the department is taking to implement such

a system. The NTF fully supports those efforts.

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We must make an important distinction here between supporting

the process and endorsing the specifics of the program. USDA’s

poultry industry task force on animal identification has not completed its work, we cannot endorse a specific animal identification

program for poultry at this time. NTF believes that any animal

identification program should be voluntary and should incorporate

existing industry and State programs. Since turkeys and other

commercial poultry are raised and transported as flocks, identification should be done by flock, rather than on an individual basis.

The program should also be extended to the live bird markets

that operate in and around major urban areas. These markets

serve an important purpose in our multi-cultural society, but some

have been dangerous reservoirs of disease, particularly avian influenza. Our organization will continue working with USDA to determine whether the unique nature of the live bird markets would require birds in the markets to be identified individually.

We wholeheartedly agree with Under Secretary Hawks that the

program should include the flexibility to use current identification

systems. Goldsboro Milling and other turkey and poultry companies already have the ability to trace products back from the

slaughter facility to the flock of origin within 48 hours, which is the

stated goal of USDA’s program. In fact, I believe our company

could trace products back to the farm of origin in less than 6 hours.

We welcome the opportunity to demonstrate the capability. Movement of flocks are tightly controlled and all records are kept in a

centralized point for easy retrieval and reference. I have a number

of them with me today.

It only makes sense that USDA should build on this existing

business-based capability rather than try to layer an entirely new

identification program on top of one that is already working. USDA

then can use its resources to engage more fully those industry segments without existing animal identification and trace back capabilities. I also should add that North Carolina has a very good

State program, demonstrated its efficiency several times. We feel

USDA should incorporate such a program into its identification

plans.

NTF agrees with USDA that any animal identification program

should be voluntary at this time. We think that trade considerations alone will ensure strong participation. Making the program

mandatory creates a new range of issues that actually would serve

to slow implementation. For example, it will entail significant new

costs for some industries, the question of who will pay those cost

already is a sensitive one. If the program were mandatory, the

question is likely to become even more volatile.

Another major issue to all poultry and livestock producers is confidentiality of the data. If the data cannot be kept confidential, my

company and I suspect most NTF members would have serious reservations about participating. Among other things we would be

very concerned about the information being available through

FOIA requests to domestic or foreign terrorist organizations.

NTF believes that any animal identification program should be

focused tightly on disease control, should not be utilized to further

other policy goals. USDA and Congress could resist such temptation. The introduction of a major animal disease intentionally or by

269

accident is an immediate public health and economic threat to our

Nation, and that is a threat that an animal identification program

is best equipped to combat.

During the 108th Congress, there have been at least eight major

bills introduced that would mandate some type of animal identification. Most reflect considerable thought on the part of their authors and have a desire to make our Nation’s food supply safer.

NTF cannot endorse any of those bills at this time. We firmly believe that USDA should be given the opportunity to implement its

system before Congress contemplates any additional action. We believe USDA’s program has a strong chance to succeed and achieve

the policy goals the bills advocate.

To conclude, we would like to re-emphasize our support of

USDA’s animal identification program and for the process involved

in implementing it. We believe that turkey companies already possess the ability to comply with USDA objectives. Accordingly, we

believe the program should remain voluntary and incorporate existing industry and State program capabilities with a focus on animal

health and confidentiality of data collection.

Thank you.

[The prepared statement of Dr. Gonder appears at the conclusion

of the hearing.]

Mr. HAYES. Thank you, gentlemen.

I have a number of questions that I am going to ask the panelists. If everybody wants to take a 7th inning stretch before get into

that, we will take about a one minute break here.

[Recess.]

Mr. HAYES. So far we have only got one planned question or comment from the audience. So, let’s stimulate any other thoughts

while we are there.

Chester is in tight with the press here, we are going to have to

keep an eye on you, Chester.

All right, for the entire panel, what producer outreach are your

organizations doing or will you do to educate your producers about

what is expected of them regarding animal identification? Marcus,

you go first, since you were the shortest—Rann’s got on the fanciest suit, let’s let him talk first.

Mr. CARPENTER. I am not sure that is a qualification, Mr. Chairman, but thank you.

We are constantly engaged with our producer community with

regard to this program. Our public policy committee has been

studying this issue for some time. As you realize, a substantial

number of our producers in North Carolina are contract growers,

they work with their integrators as the programs are being developed. So, this is an issue that I think is very much on the minds

of our producers through various publications, through contacts,

through producer meetings which we will actually be having some

next week. We try to communicate the pertinent issues that are affecting us at both local, State, and Federal levels. And clearly this

is a very important part of that process.

Mr. HAYES. I enjoyed being in Greeneville with you, I should

have been there a little earlier in the day, I could have gotten their

attention better.

270

Mr. CARPENTER. Well, I was telling your staff director that you

did an outstanding job under very difficult circumstances.

Mr. HAYES. Made it short. Thank you. Marcus, you got a——

Mr. HARWARD. Yes, we use the Extension Service extensively

about getting the information out to our farmer producers. They

have a roll call or a mailing address or whatever of every producer

in each county. So, we use them extensively even in trying to get

the information out. Also, we have—there is about 12 large barns

in North Carolina, we have a very workable relationship with each

barn owner. And we get out information to them, to get to their

producers that Extension might not have with. Also, just this year

we have started using our county directors for more use than what

they have in the past, and this will be definitely one of their big

issues is to take this identification system and run with it. In each

county there will be a director or several directors from each county and this will be one of their main goals and objectives, is this

identification system. We will let them utilize it and use their expertise in their county.

Mr. HAYES. Anybody else have a comment? Russ.

Mr. KREMER. Yes, we have a grassroots network of organizations

on the county and the local level. We have meetings for empowerment and education. Been very actively involved with the Department of Agriculture and university extension. We have been involved in a pilot program on animal identification with the Missouri Department of Agriculture for about 4 years now.

I am also a director of two livestock cooperatives where we understand the value of animal identification as far as consumers’

point of view. So, we will continue this education, and, yes, we

have these great concerns. And so, education is vitally important.

Mr. HAYES. FFA, 4–H, and some of these younger organizations

who are more technology oriented than those of us who are not so

young any more, certainly ought to include them. Chester, do you

have a comment?

Mr. LOWDER. Yes, Mr. Chairman, through Farm Bureau, we will

be engaging with our leadership in the 100 counties, frank discussions on the implementation of this program, their concerns, asking

for their input as to how we move forward. For the larger operations, I think it would be easier for them, sure it is going to be

costly for them, but yet it will be easier for them in implementation. What I see as one of the big challenges is going to be that 30-

cow beef cattle farmer out there that is 65 to 75 years old, and here

he is faced with a new challenge in his operation that maybe he

has not encountered before, because basically he was on automatic

pilot. Now, he is going to have to incorporate another step or be

prepared to pay for that service when he gets to the livestock market.

It cannot be so onerous that we deprive that small farmer, that

small landowner, the ability to make some extra income to help

pay those county taxes, State taxes, Federal taxes, that he has to

pay by having something recreational, profitable and ongoing for

his land, a useful productive land site.

Mr. HAYES. And that was a big concern David had when we

talked last week in Norwood. Some folks, it would just put them

out of business. Anybody else want to make a comment on that?

271

Dr. GONDER. Sir, if I may.

Mr. HAYES. Sure.

Dr. GONDER. The National Turkey Federation has discussed this

both at its winter meeting last year with the live production meeting, a committee meeting, general membership. Same thing with

the summer meeting, we provided regular updates on the quarterly

conference calls for the live production committee, and the veterinary committee. Our major focus has been trying to accentuate the

difference between poultry management and red meat management. We have hosted Dr. Weimers with USDA in North Carolina

to give him some idea of how our industry was structured. I am

sure we would be happy to extend that invitation to anyone else

that wanted to take advantage of it. Again our major focus has

been on trying to bring forward our current capabilities in this

area.

Mr. HAYES. Before we move on to the next question, let me call

attention to Pam Miller and on Pam’s left is a very fine young lady

representing Texas and other parts of the world, Lisa Kelley who

works for Charlie Stenholm, the ranking member of the full committee. Pam is staff director for the Livestock Subcommittee. Charlie’s ranking member of the full committee. These ladies and others

are available to you all for additional questions that may come up

and they are a very integral part of doing what you are asking us

to do. Chester used the word onerous, that is synonymous with government. That is why we are so insistent on the industry, the producers where logic and common sense are synonymous rather than

onerous. Hang in there with us.

All right, next question, and this is for the entire panel as well.

Several of you mentioned that the public or consumers should help

bear the cost of paying for the animal identification program. How

do you recommend they pay, through the higher food price approach or some other means? Which end do you want to get them.

You want to get them at the store or at the tax man? Just so that

we are clear. All the above, Washington still does not have any

money so the consumer is going to pay one way or the other.

[No response.]

Mr. HAYES. All right, next question, did not like that one. You

think the Federal Government or private companies should hold

the data? Anyone want the Federal Government to hold the data?

[No response.]

Mr. HAYES. OK, we got a unanimous on that one.

You believe that USDA is giving ample guidance and opportunity

for producers to discuss animal identification, and what is expected

of them?

Mr. CARPENTER. Mr. Chairman, based upon the experience that

I have had with Under Secretary Hawks and others, I believe that

USDA is making a very strong effort to try to put a program in

place meeting their obligations and at the same time trying to fully

realize the distinctions and differences in the animal industry

throughout the Nation, and dealing everywhere from the operations that Chester just mentioned to some of the operations in our

State. And I have a positive feeling about the effort that USDA is

trying to make. We obviously will have to see the results, we will

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have to go through the rulemaking process. But, I have to compliment them thus far on their efforts.

Mr. HAYES. OK, in those areas that you feel like they may be

falling short or potentially that could be a problem, please let us

or them know. There are a number of ways to access Pam, my office Tommy Sevier works in your personal office in Washington for

me. He is in the back with the blue shirt on. So, all of us are anxious again to hear of your concerns. We have had a few answered

directly, but as the process moves forward, we would like to make

sure that we do that.

Do you believe USDA is giving ample guidance and opportunity—let’s see, we got that one, sorry about that.

David Collier, American Farm Bureau. American Farm Bureau

believes the funding levels need to be $73 million versus $33 million requested by the department. Do you know what this $73 million would do and why Farm Bureau supports this amount?

Mr. COLLIER. No.

Mr. HAYES. OK. Peter, do you want to add on that one? Go ahead

we are home folks here. David may be like me, he cannot hear, go

ahead and take the mic.

Miss LUDLUM. Mr. Chairman, the $73 million number comes

from the USDA’s budget or the budget estimate the USDA put forward, calling for an estimate of $500 million for the first 5 years.

Our numbers come from USDA’s budget estimate that it would

take about $550 million.

Mr. HAYES. And backing out of that number?

Miss LUDLUM. And backing out of that number, we believe that

the Federal share should around two-thirds the cost for the system.

And that would include—we believe that would incorporate most of

the cost of the infrastructure development, hardware, and software,

and developing the premises identification system in the States, cooperative agreements.

Mr. HAYES. Now, of course that first number is based on a lot

of unknowns. And what we want to do as we take the process forward is to make sure that the marketplace drives competition

which will hold the cost down. As long as we have competing methods, technologies, procedures, the marketplace will do a good job,

but at that point if the Government were to say OK, we are going

to use this method, boom, captive audience, no competition and the

price at that point really gets out of reach, so that is my concern.

We have talked about legislation to define standard of care required of a producer of livestock as ordinary care. What would be

included in a concept that is not covered under current law? Would

this be codifying the current industry best practices recommendation? Anybody want to touch on that one. Dr. Gonder.

Dr. GONDER. I am sorry, I did not fully understand the question.

Mr. HAYES. OK, in the Farm Bureau testimony, they mentioned

that defining the standard of care required of a producer of livestock is ordinary care. Do you think we have sufficient definitions

of standard care, or should there be additional definition improvements in any subsequent legislation?

Dr. GONDER. As the standard of care is applied to animal identification within the poultry industry and probably most animals

produced under contract, we would be required usually under the

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provisions of the Packers and Stockyards Act to maintain identification of those animals to processing and to premises. I believe

it will be incorporated both within the best management practices

of the National Turkey Federation and most of our existing contract structure.

Mr. HAYES. OK, any other livestock folks want to comment on

that.

OK, Russ Kremer, in testimony, you say that groups or lots of

animals should not be permitted to be identified collectively. Most

producers that I talk to, especially hog and poultry, want to identify their animals in groups or lots. Does NFU have a different positions because it is more focused on beef cattle or another reason?

Mr. KREMER. We just feel—of course we have adamantly supportive of country of origin labeling for instance, and want to trace

those animals that come into this country and feel that there is

some confusion or some problems when you bring these animals together in different lots that get commingled, say for instance, that

there needs to be some sort of a practical attempt to identify each

animal individually if it is going to be a true system with a lot of

integrity to it.

Mr. HAYES. OK, anybody else want to comment on that?We do

have somewhat differing opinions on some of those issues, that

being one of them.

Kenny Fox, in your testimony, you state that a hot brand is the

only truly permanent mark of identification. While South Dakota

is a brand law State, there are many States that have no brand

law. Have you estimated the disruption in the market if 100 percent of cattle would have to be branded?

Mr. FOX. No, we have not, sir. But I do not think it would be

any more difficult—I think it would be less expensive to brand

them than it would be to buy these tags and all this computer

equipment. This could cost us upward to $200 a cow when it is all

said and done when you have got the direct and indirect cost related to the program.

Mr. HAYES. What does branding do to you, Marcus?

Mr. HARWARD. Well, branding is going to take about 30 to 40

percent of my business away, because these farmers are 65–75–80

years old. That will give them an excuse to get out. I mean they

have just got lawnmowers in the back yard right now. And it does

produce some income and it will—a lot of them have never branded

and they are not going to brand, and they are not going to ear tag,

I am going to tell you that up front. We are going to do it for them

at the marketplace. I do not—Mr. Fox is in South Dakota, he has

large herds, we have small herds. It is a different identity there

than it is here. And I hope we can come up with systems that

would commingle together that Mr. Fox’s cattle can work with my

cattle, but achieve the same goals. But one system will not fit all,

and I will have to supply the knowledge, the technology, and the

work, the labor and everything for my farmers to stay in business

in North Carolina.

Mr. HAYES. Now, it is my opinion that we can certainly, if branding is the way to go in South Dakota, then we have to be able to

come up with a system that allows for that and then by the same

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token, the small individual animal owner, we have to have something to work for them.

Mr. FOX. Chairman Hayes.

Mr. HAYES. Yes, sir.

Mr. FOX. I would be respectful of using both programs, I just

thought if you meant one or the other.

Mr. HAYES. Absolutely, the point is disruption, if you did

Marcus’s way or vice versa, your answer was very good. National

Hide Council estimates that branding reduces the value of the

hide, which means less money for producers. Is that an issue, and

is that counted toward the goals of maintaining more value?

Mr. FOX. Well, in my instance, I feel that live cow is worth more

to me if I can prove she is mine, than the hide. I think some estimates we get would get $5 extra for the hide if it was unbranded.

Well, the cow is worth around $1,000 right now, I would sacrifice

that $5 to keep that cow.

Mr. HAYES. Well, you pointed out another important aspect of

animal identification. That to me is a way to enhance the value of

your animal in the marketplace, and produce more revenue for the

farm. That is one of the main driving forces.

All right, Marcus, I have got your name on another one. You

state that the animals should not have to be identified until they

enter into interstate commerce. You are a market operator, so

would this not place more of a burden on market operators like

yourself and how would your sale barn adjust to tagging or identifying animals that come through your barn not previously identified?

Mr. HARWARD. I can answer that. In North Carolina, I would

venture to say that all market operators, about 95 percent of our

cattle are sold in singles. Just like you saw Wednesday when you

and——

Mr. HAYES. One at a time.

Mr. HARWARD. One at a time. And I know the boys out west will

not understand it, but that is how it is done in North Carolina.

Well, what we have proposed and we are going to be I guess a force

in front, we want to go ahead and do some of it now to see how

the tracking system will start. We have a system that we can put

the head gate right before they go on the scales. We are already

running them singles, it is not going to disrupt anything to put the

reader above them and put whatever identification system that we

elect or whatever we achieve at the barn that we can use. It should

not, we can run three cows a minute and it should not disrupt that

one bit. We will have to do it going on the scale system. The farmers, by doing it on the farm, I venture to say that half my farmers

do not own a head gate.

So, it is going to be—they are not going to do it. So, we are going

to have to do it for them, I feel like. We feel like we can do it at

the barns or if the buying stations have the premises to do, the facilities to do it. The only problem we see is that if these farmers

sell to their neighbor there is going to have to be some kind of

structure put up for the first point of exchange there.

Mr. HAYES. Rann Carpenter, does North Carolina Pork Council

support voluntary or mandatory?

Mr. CARPENTER. We support a voluntary system.

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Mr. HAYES. OK.

Mr. CARPENTER. And as a matter of fact at this point in time,

a very large percent of the animals raised in North Carolina are

currently operating under a voluntary system.

Mr. HAYES. For Chester, Marcus, Rann, and Eric, can you explain the relationship your organization has experienced in working with North Carolina State animal health programs and how

that data has been kept confidential. David, we can include you in

that group, if you would like. How are you all here in North Carolina keeping that data confidential based on what you are doing

now?

Mr. HARWARD. Well, I know at our barns we already have a

scraping sheep program that we are having to tag each sheep as

it comes through, 18 months or older, and that information is going

to the veterinarian’s office and they are holding that information.

So, we are already doing the system now with the sheep and all

we are doing is going to elaborate it for the beef it looks like coming up. But we are already doing the system like this now with the

sheep.

Mr. HAYES. Chester.

Mr. LOWDER. Yes, sir. We at Farm Bureau have been involved

with the Department in a number of planning and table top exercises dealing with either a disease outbreak or terrorism event.

And we have seen that they have the information there, we know

that they keep it confidential. So, we do not have a problem with

the Department of Agriculture at this point in time having that information and holding it for planning and working with our producers in developing plans for any type of event that might occur. And

I think that this is something that is very important now and will

be in the future as we address how we are going to respond if we

do have an outbreak of a disease or we have a terrorism event.

Dr. GONDER. Mr. Chairman.

Mr. HAYES. Yes, sir, Dr. Gonder.

Dr. GONDER. We have used that information quite a number of

times in the poultry industry for laryngotracheitis breaks and

avian influenza breaks. We use a very similar system for turkey corona viral enteritis breaks, and we have been through a couple of

exercises with them as well. We updated the database several

times as necessary as farms change hands and new ones are constructed. We are satisfied that the information is available in a

form that both they and we can use it.

Mr. HAYES. David, you have a comment on that one, or you OK?

Mr. MARSHALL. They stated it quite well. We use this information quite frequently in dealing with disease outbreaks. I would estimate that we get approximately anywhere from five to eight requests for information lists of farms, this is monthly from a variety

of sources. We have been able to protect that information, we deny

it and it is all under the authority of our confidentiality law, and

I will be more than happy to leave you a copy of that if you would

like.

Mr. HAYES. OK, great. I have several questions that I was going

to ask Bill Hawks but I got so busy having you all ask him questions that—the questions basically dealt with the issue of animals

in groups or lots and how soon will on-the-ground target education

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outreach begin from USDA. I will get some—I will get these questions answered and get them to you. I think you covered them in

some form or fashion, but I did overlook that.

Any other comments or questions from the panel before we go to

questions from the audience.

[No response.]

Mr. HAYES. I will come back to you, I will give you plenty of

warning before we gavel the meeting. Livestock Marketing Association, John Kazee? Did I say that correctly? From Woodstock, Georgia.

Mr. KAZEE. Thank you, sir. I am John Kazee, representing Livestock Marketing Association but I also represent the North Carolina Livestock Markets as their executive secretary. I also cover basically the east coast in dealing with livestock markets, order buyers, and dealers. We do have some talking points I would like to

cover where livestock market stand on the issue of animal identification. LMA market operators and staff have been a part of the

U.S. animal identification development team that has been developing the standards for the national identification system. There is

a going recognition within our industry that we may need a better

identification and trace back system than we have to date in the

event of an animal disease outbreak or an act of terrorism. This

does not mean, however, there is not a great concern about the

cost, and who is going to pay for the equipment and the infrastructure to make it work and security of the information generated by

the system.

In one single mid-size market in Michigan where the electronic

identification system was put in to identify all livestock moving

through the market, nearly $60,000 was spent putting in the scanning equipment, refitting alley ways and upgrading the computer

software, and this was just for the initial installment. It does not

account for the additional personnel, the workmen’s comp, the upkeep, et cetera, that would be needed as well to maintain that system.

The greatest challenge that the auction markets face in identifying every animal that moves through the market is doing it at the

speed of commerce. If it is a national identification system in anyway that slows down our normal speed of operation, we are guaranteed to have a much higher cost of operating and producers who

will seek other ways of marketing their livestock. And therefore, it

will impact the livestock industry far beyond the marketing sector.

Right now, given the likelihood that many animals will come to

market untagged due to most small producers not having the

equipment to do it themselves, and the limited availability of technology to scan animals quickly through the market, we anticipate

that implementing a National Animal Identification Program that

allows timely marketing of animals would be extremely difficult.

We realize that many of the members of this committee are interested in moving ahead with the mandatory National Animal Identification Program immediately. However, if we do so without knowing the cost of building the system’s infrastructure and who would

bear those costs, we do so without first making sure the right technology and the equipment are available to the livestock markets,

packers, veterinarians, animal health officials, and producers to

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achieve that goal of identifying animals at the speed of commerce,

we can expect that the identification system will fail and ultimately

cost of that failure to be greater than any foreign animal disease

outbreak that we may plan to contain.

That is why our LMA board of directors and membership recently agreed to a resolution that until such time that the NAIS

pilot implementation projects are well established, evaluated, and

an economic impact study completed that the NAIS should remain

voluntary and that the LMA member markets and their consigners

and buyers should take a cautious approach to adopting animal

identification technology and information systems that are not fully

evaluated and proven through sound empirical studies.

Lastly, LMA would welcome the opportunity to take a delegation

from this committee to any of our fine marketing facilities to give

you the upfront and personal look at the challenges that the markets do face with implementing this type of program.

Mr. HAYES. Thank you, sir. Be sure to check in with Pam so that

she can track you. We have got one more gentleman; Bill Kluk.

Come on over, Bill. Never been to Mudview, South Dakota, but I

am looking forward to coming.

Mr. KLUK. Mr. Chairman, thank you for giving me the opportunity to ask a question or two here.

There is a couple of things that has not been brought up here

that is kind of a big item in our area. And that is the transmission

of wildlife diseases to our cattle and livestock. And recently in the

last year or so, Wyoming had a brucellosis outbreak and it was

caused by their elk, and I guess the question I have kind of got on

that with the panel and anybody that is interested is how do we

address the wildlife transmission of diseases with an animal identification program? It is a very costly deal when you start having to

blood test entire herds of cattle to prove that they do not have brucellosis before you transport them across State lines and I think

that it is a concern that should be addressed through the animal

identification system.

There is one other comment that I would like to make. The word

‘‘voluntary’’ bothers me just a little bit. I do not know of too many

people that do not volunteer to pay their taxes, and that is a voluntary program, that is why I am a little hesitant on voluntary in

just what does it mean in this program. Can anybody address that?

Mr. HAYES. OK, I think voluntary and you all are certainly welcome to contradict me if I am off—voluntary means, let us make

sure that the Government does not set up the one size fits all,

going to do it this way system. We put the system, the producers

in place that works and it is cost effective and makes us more and

not less competitive with our foreign competitors, then that is the

point in which we should say OK, this is worth doing, let’s make

it mandatory. That is my understanding.

Now on the brucellosis and chronic wasting and things like that,

could Dr. Gonder or David, could you comment on that? We have

not talked about that, that much.

Mr. MARSHALL. I will defer to Dr. Gonder.

Mr. HAYES. Another hat I wear—while David is coming up, I am

one of the co-chairman of the Congressional Sportsman Caucus. So,

I am seeing more on that side than I do actually on the livestock

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side, but I try to blend those two together. I know exactly what you

are talking about, we do not have that many elk, although we have

got more than you would think in the eastern part of the country.

Is that something that is pretty well confined to Montana, Wyoming, Idaho, North and South Dakota, or are you seeing that some

other places as well?

Mr. KLUK. I am not aware of all the moving.

Mr. HAYES. Pardon.

[Inaudible comment.]

Mr. HAYES. Yes, we have them in North Carolina, a lot of them

I believe were here originally. David, do you want to take a swipe

at that?

Mr. MARSHALL. I understand the issue, I am not sure that I can

make it too neat with regard to the wildlife disease threat in the

U.S. animal identification program. Obviously, there is a very large

captive exotic wildlife industry in this Nation. Farmed elk, farmed

deer, exotic deer, those animals obviously need to be included in

the U.S. animal identification program. I can only think that an

animal identification program where these cattle are identified

could only help in the investigation of potential diseases that are

spread from wildlife to our domestic population. But, I really have

not thought about it in that regard.

Mr. HAYES. Brucellosis is an issue with bison as well. So, I think

it is a good point, we will plug that in. I think animal identification, if it were effective, would be some layer of insulation for you

if you were properly identified.

Mr. FOX. Mr. Chairman.

Mr. HAYES. Yes, sir, Kenny.

Mr. FOX. On that same note, I have a concern with all the free

ranging wildlife. If the Government says I have to identify my livestock, then they better identify the free ranging wildlife. That is

where brucellosis is coming from I feel in the cattle industry.

Mr. HAYES. Wild horses have any disease issues? Anybody got

a—Chester is shaking his head, yes. Does that produce an issue for

us, too? Somebody sent me a clipping the other day that said the

Government is spending a ton of money every year because of some

animal activist issues with wild horse populations.

Mr. FOX. Well, there is several vaccinations that they have to

keep up, and I am sure that they are vaccinating against West

Niles, because that creates a human threat as well.

Mr. HAYES. Any other questions or comments from the audience.

We are headed down the home stretch here. If you have got a lick

and you want to get it in, we are getting close to the finish line.

Any other questions, comments from the panel, or questions from

the panel for the staff or the chairman. Questions for each other?

I think Kenny and Marcus been caucusing over here, we are going

to have to watch out for that.

As far as I am concerned I think we have covered all the bases

and the reason being you all were kind enough and generous

enough with your time and resources to come and be with us today.

Do not lose sight of the fact that we certainly appreciate you taking

the time and effort to be with us. We value the information, the

ideas, and the concepts that you bring to the table. We will make

sure that they are included as the process—and it has got to be

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your process—moves forward. So, back on the book so that we do

not miss anything. But I think from my perspective this has been

a very productive part of the process and we will continue down

this road.

And again, let me encourage you if you see something happening

on the part of USDA that says not transparent, not producer-driven, not operator-friendly then let them or us or both know. And it

is our intention very much so to keep them on track. Pam, Lisa,

anybody. Kind of like that auctioneer going once, going twice.

Without objection—this is your last shot—the record of today’s

field hearing will remain open for 10 days to receive additional material, and supplementary written responses from witnesses to any

question posed by a member of the panel.

This hearing of the Subcommittee on Livestock and Horticulture

is adjourned. Thank you, very much.

[Whereupon, at 4:10 p.m., the subcommittee was adjourned.]

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