U.S. GOVERNMENT PRINTING OFFICE

67–862 CC WASHINGTON : 2000

S. HRG. 106–784

INTERSTATE SHIPMENT OF STATE-INSPECTED

MEAT AND POULTRY

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

ON

INTERSTATE SHIPMENT OF STATE-INSPECTED MEAT AND POULTRY

APRIL 6, 2000

Printed for the use of the

Committee on Agriculture, Nutrition, and Forestry

(

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

RICHARD G. LUGAR, Indiana, Chairman

JESSE HELMS, North Carolina

THAD COCHRAN, Mississippi

MITCH MCCONNELL, Kentucky

PAUL COVERDELL, Georgia

PAT ROBERTS, Kansas

PETER G. FITZGERALD, Illinois

CHARLES E. GRASSLEY, Iowa

LARRY E. CRAIG, Idaho

RICK SANTORUM, Pennsylvania

TOM HARKIN, Iowa

PATRICK J. LEAHY, Vermont

KENT CONRAD, North Dakota

THOMAS A. DASCHLE, South Dakota

MAX BAUCUS, Montana

J. ROBERT KERREY, Nebraska

TIM JOHNSON, South Dakota

BLANCHE L. LINCOLN, Arkansas

KEITH LUSE, Staff Director

DAVID L. JOHNSON, Chief Counsel

ROBERT E. STURM, Chief Clerk

MARK HALVERSON, Staff Director for the Minority

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(III)

C O N T E N T S

Page

HEARING:

Thursday, April 6, 2000, Interstate Shipment of State-Inspected Meat and

Poultry .................................................................................................................. 1

APPENDIX:

Thursday, April 6, 2000 .......................................................................................... 39

Document(s) submitted for the record:

Thursday, April 6, 2000 .......................................................................................... 91

Thursday, April 6, 2000

STATEMENTS PRESENTED BY SENATORS

Lugar, Hon. Richard G., a U.S. Senator from Indiana, Chairman, Committee

on Agriculture, Nutrition, and Forestry ............................................................. 1

Fitzgerald, Hon. Peter G., a U.S. Senator from Illinois ....................................... 8

Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee

on Agriculture, Nutrition, and Forestry ............................................................. 13

Daschle, Hon. Tom, a U.S. Senator from South Dakota ...................................... 4

Baucus, Hon. Max, a U.S. Senator from Montana ................................................ 6

Johnson, Hon. Tim, a U.S. Senator from South Dakota ...................................... 6

Lincoln, Hon. Blanche, L., a U.S. Senator from Arkansas ................................... 7

WITNESSES

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 2

Panel I

Rominger, Richard, Deputy Secretary, U.S. Department of Agriculture, Washington, DC; accompanied by Ms. Margaret O’K. Glavin, Associate Administrator for Food Safety; accompanied by Ms. Caren Wilcox, Deputy Under

Secretary for Food Safety .................................................................................... 10

Panel II

Boyle, Patrick, President and CEO, American Meat Institute, Arlington, VA .. 34

Dailey, Fred L., Director, Ohio Department of Agriculture, President, National Association of State Departments of Agriculture, Reynoldsburg, OH .. 23

Eickman, Michael, Eickman’s Processing Co., Inc., representing the American

Association of Meat Processors, the Illinois Association of Meat Processors,

and 18 other state meat processing associations, Seward, IL .......................... 26

Foreman, Carol, Tucker, Distinguished Fellow and Director of the Food Policy

Institute Consumer Federation of America, Washington, DC. ......................... 32

Heikens, Jolene, Triple T Country Meats, representing the American Association of Meat Processors, the Iowa Association of Meat Processors, and

18 other state meat processing associations, Wellsburg, IA ............................. 27

Nielson, Richard T., President, Utah Cattlemen’s Association, representing

the National Cattlemen’s Beef Association, Salt Lake City, UT ...................... 30
Page

IV

Pearson, Harry, President, Indiana Farm Bureau, representing the American

Farm Bureau Federation, Indianapolis, IN ....................................................... 29

APPENDIX

PREPARED STATEMENTS:

Lugar, Hon. Richard G. .................................................................................... 40

Roberts, Hon. Pat ............................................................................................. 41

Harkin, Hon. Tom ............................................................................................ 50

Daschle, Hon. Tom ........................................................................................... 84

Johnson, Hon. Tim ........................................................................................... 86

Hatch Hon. Orrin, G. ....................................................................................... 88

Boyle, Patrick .................................................................................................... 82

Dailey, Fred L. .................................................................................................. 52

Eickman, Michael ............................................................................................. 63

Foreman, Carol, Tucker ................................................................................... 77

Heikens, Jolene ................................................................................................. 68

Nielson, Richard T. ........................................................................................... 74

Pearson, Harry .................................................................................................. 70

Rominger, Richard ............................................................................................ 43

DOCUMENT(S) SUBMITTED FOR THE RECORD:

Position statement, submitted by Mike Lorentz, Cannon Falls, MN ........... 92

Position statement, submitted by Michael Weaver, President, Weaver

Meats, Inc., Past President, Ohio Assoc. of Meat Processors .................... 94

Position statement of the National Chicken Council ..................................... 96

Position statement of the Consumer Federation of America, submitted

by Nancy Donley, President S.T.O.P., Caroline Smith DeWaal, Food

Safety Director, CSPI, Carol Tucker Forman, Director, Food Policy

Institute CFA, ............................................................................................... 101

Excerpts from the Wall Street Journal ‘‘Consumer Groups Decry State

Meat Inspections’’, submitted by Carol Tucker Forman ............................ 104

Position statement of the Kansas Department of Agriculture, submitted

by Bill Graves, Governor .............................................................................. 109

Position statement of the National Confreence of State Legislatures, submitted by Larry Diedrich, South Dakota House of Representative

Chair, NCSL Agriculture and International Trade Committee ................ 111

House Concurrent Resolution No. 5050, submitted by Hon. Pat Roberts ... 115
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INTERSTATE SHIPMENT OF STATEINSPECTED MEAT AND POULTRY

THURSDAY, APRIL 6, 2000

U.S. SENATE,

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY,

Washington, DC.

The Committee met, pursuant to notice, at 9:37 a.m., in room

SR–328A, Russell Senate Office Building, Hon. Richard G. Lugar,

(Chairman of the Committee), presiding.

Present or submitting a statement: Senators Lugar, Fitzgerald,

Harkin, Daschle, Baucus, Johnson, and Lincoln.

OPENING STATEMENT OF HON. RICHARD G. LUGAR, A U.S.

SENATOR FROM INDIANA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

The CHAIRMAN. This meeting of the Senate Agriculture Committee is called to order. The Committee is holding this hearing today

to review interstate shipments of State-inspected meat and poultry.

This is not a new issue for the Committee. Small plants that

have operated under State inspection programs have long advocated interstate shipment of State-inspected meat and poultry.

Plants located near the border with another State have been particularly supportive of this change because of the potential for increased markets for their products. Producers have been supportive

because of the potential for additional markets for their livestock

and poultry.

At the end of last year’s session, Senators Daschle and Hatch introduced legislation, S. 1988, which would permit interstate shipment of State-inspected meat and poultry. This legislation was

based on a concept paper developed by the United States Department of Agriculture and endorsed by the National Advisory Committee for Meat and Poultry Inspection.

We have the opportunity today before this committee to hear of

support for this legislation and to air concerns about this approach

to allow interstate shipment of State-inspected meat and poultry.

We are honored to receive testimony from our colleague, Senator

Hatch, an advocate of interstate shipment of State-inspected meat

and poultry, and we will be pleased to hear the United States Department of Agriculture’s perspective from Deputy Secretary

Rominger. Finally, a panel of witnesses will testify, including representatives of the State Departments of Agriculture, producer

groups, meat processors, and consumers.
2

I offer a special welcome to Harry Pearson, representing the

American Farm Bureau Federation, and a good delegation of Hoosiers who are with us today in this hearing.

Before proceeding to our witness, let me mention that as soon as

Senator Harkin, the distinguished ranking member, appears, he

will be recognized for an opening statement.

[The prepared statement of Senator Lugar, can be found in the

appendix on page 40.]

But for the moment, I would recognize our colleague, Senator

Hatch, who I aforementioned is one of the authors of legislation we

will be considering this morning. We are delighted to have you,

Orrin, and proceed with your testimony.

STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM

UTAH

Senator HATCH. Thank you, Senator Lugar, Senator Daschle,

Senator Johnson. I am grateful to be with you and I applaud you

for holding this hearing. I am particularly pleased that you are

going to have the opportunity to hear from Richard Nielson, the

President of the Utah Cattlemen’s Association. I am sure you will

find his testimony cogent and very informed.

As you know, the New Markets for State-Inspected Meat Act, the

Daschle-Hatch bill, would lift the outdated ban on the interstate

shipment of State-inspected meat. Rather than state all the details

of this legislation, I would like to describe to the members of this

committee how the ban on interstate shipment is affecting small

businessmen in rural Utah. I want to emphasize that what we are

seeing in Utah is echoed in at least half the States in this country.

The business owners I will tell you about own small meat packing

plants that are inspected by State inspectors.

The first is Eddie Roberts, who owns Tooele Valley Meats in

Grantsville, Utah, not far from the Nevada border. Eddie is well

known in the area for making some of the finest sausage available

anywhere. Casinos just across the border in Wendover, Nevada,

know of his sausage products and have tried to purchase them.

Contracts with these casinos would be a tremendous boost for

Tooele Valley Meats, but as we all know, Eddie is barred by law

from selling his sausage products in Nevada or any other State.

A casino in Las Vegas has also approached him, telling him they

would buy as many roaster pigs as Eddie could produce, but the

ban also applies to poultry. So much for rewarding product excellence. Mr. Chairman and the members of this committee, I am sure

you appreciate what an order like that would mean for a small

business in a rural community. Once again, Tooele Valley Meats

was forced to turn down what they considered to be a dream opportunity.

In Smithfield, Utah, Monte Lucherini owns L&H Packing Company, a State-inspected plant just 15-miles from the Idaho border.

This plant produces roast beef, jerky products, hot and mild sausage, and other products. Monte has been contacted by a number

of businesses in Idaho seeking to purchase his products. Once

again, a small businessman in a rural area was faced with a

chance to expand his business but was forced to turn it down.
3

With regard to this legislation, Monte has said, and I quote, ‘‘I

believe that my gross sales would increase 30- to 40-percent. Employment would be increased also. I would need more butchers and

more workers. It has also been a thorn in our side that we could

not service the customers that want our products.’’ So much for encouraging investment.

In Vernal, Utah, Don Anderson owns and operates Uintah Packing. The principal part of Don’s business has been selling steaks to

river outfitters taking visitors down the Green and Colorado Rivers. He was doing excellent business with these customers until it

was pointed out to the river guides that they could not serve Don’s

product because a portion of the river trip would dip into Colorado

and Arizona, thus making it illegal for them to serve steaks produced by a State-inspected plant. Well, Mr. Chairman, Don lost his

business and has never fully recovered from it. In this case, the

currently policy not only hindered business, it actually hurt it.

Finally, I would like to talk about Theone Merrill. Theone owns

Heartland Foods in northern Utah and produces a number of excellent products, many of which are cooked and canned. Now, Mr.

Chairman, Theone has an idea. He has recognized that if he could

tap into the Internet as a marketing tool, the entire world would

be within reach of his products. He had already learned of interested buyers of his products in other States, but he will not be able

to pursue those markets. Needless to say, Theone is eager for the

passage of this bill. Just as in the other cases, Mr. Chairman, his

market is limited to the State of Utah. So much for rewarding innovation and risk taking.

Now, these stories and the others like them around the country

would be enough in my book to take action on this bill, but there

is more. Each of the plants I have mentioned is completely free to

sell buffalo meat, pheasant, ostrich, alligator, emu, and other meat

products not only across State boundaries but even to foreign nations, and these meat products are inspected by State inspectors.

Yet State-inspected beef, pork, and poultry cannot travel a few

miles from Tooele, Utah, to Wendover, Nevada.

Let me put this another way, Mr. Chairman. We trust State inspectors to efficiently inspect emu but not beef, and it is okay to

sell State-inspected beef or pork in Utah, but nowhere else. This

makes absolutely no sense, Mr. Chairman.

But what makes even less sense, Mr. Chairman, is the fact that

while those Nevada casinos or Idaho supermarkets are banned

from buying sausage and other products from Utah, they have no

problem whatsoever in importing those products from a foreign

country. Foreign competitors have full freedom to sell their foreigninspected products in the United States, and, of course, they are

more than willing to do so.

Mr. Chairman, I know you share my view that the American economic system should reward excellence, hard work, effort, and investment, yet current policy concerning State-inspected meat is

holding Americans back for no justifiable reason. It is just plain

stupid and I hope you and the other members of this committee

will agree.

Not only does this policy of prohibiting the interstate distribution

of State-inspected meat stifle the growth and prosperity of individ-
4

ual small businesses, but it also contributes to the concentration in

the meat packing industry in our country. As I am sure every

member of this committee knows, there are fewer and fewer places

for our livestock producers to sell their products.

I believe the New Markets for State-Inspected Meat Act will help

to increase competition in the meat packing industry. You do not

need to take my word for it. Three separate USDA Advisory Committees have recommended lifting the ban on interstate shipment

as a way to create more opportunities for small packers and livestock producers in rural America.

I think that events in the State of Minnesota have confirmed

this. Minnesota began a State inspection system only last year. As

a result, in only a short time, 30 new plants started up in that

State. Now, this is good for competition, it is good for consumers,

and good for livestock producers.

The Minnesota experience also demonstrates what many small

plant owners have expressed to me, that most small plant owners

prefer to work with State inspectors, which tend to be much more

hands-on, informative, and responsive than Federal inspectors.

This is why the small plants in Utah and in other States would be

happy to comply with Federal inspection standards but shy away

from turning their plants over to inspection by Federal inspectors.

This is a key point, Mr. Chairman. There is absolutely nothing

about this bill that would compromise food safety.

The time is ripe to do away with the outdated and anti-competitive ban on interstate shipment of State-inspected meat. This bill

will open markets and spur growth in the meat packing industry.

It will be good for our small plant owners, our livestock producers,

and rural America in general. So I urge the members of this committee to report this measure to the full Senate as soon as possible,

and I want to thank personally the prime sponsor of this bill, Senator Daschle, for his willingness to lead out in this manner and to

continue this fight to change what really is something that needs

to be changed.

I want to thank you for giving me this time this morning.

The CHAIRMAN. Thank you very much, Senator Hatch, for your

testimony.

It is appropriate that, in fact, the co-author, Senator Daschle, is

at hand, the Democratic leader and a distinguished member of our

committee. Tom, would you like to make a statement or respond to

Orrin or boost your bill or anything pertinent you may have?

Senator HATCH. Come on, Tom, let us get up here.

STATEMENT OF HON. TOM DASCHLE, A U.S. SENATOR FROM

SOUTH DAKOTA

Senator DASCHLE. First of all, Mr. Chairman, I thank you, as

Orrin has, for holding this hearing. This is another example of your

extraordinary interest in many of the issues relating directly to agriculture.

I think Senator Hatch has pointed out as succinctly as I have

heard the implications for processors all over the country, but in

his State in particular. He has also pointed out the irrationality of

the current situation and the implications of current law for not

only producers but for agriculture in general.
5

So I applaud him for his statement. I congratulate him on an excellent statement and appreciate very much his direct involvement

in this legislation. He and I have been working on this now for

some time. We have 17 other cosponsors on a very bipartisan basis,

and so I am pleased that we have been able to get to this point.

It is hard to believe that Congress has been debating this issue

now for over 20-years. As a result of a lot of work by USDA and

numerous other groups interested in the issue, at last, we have a

proposal that Senator Hatch has outlined that can provide interstate shipment authority in a way that benefits everyone, either directly or indirectly. He and I, as I noted, had been working on this

bill for a good period of time now, about 6 months, and it is based

on recommendations made by the National Advisory Committee for

Meat and Poultry Inspection.

It is good for small plants, as Senator Hatch has noted, and the

communities in which they are located. We think it is good for

farmers and ranchers. It is good for the States with a State-inspection program. We think it is very good for consumers and it is good

for the market because we think it will stimulate competition as

well as innovation.

Under current law, only State-inspected bison, venison, pheasant, and ostrich can be shipped interstate. S. 1988 would expand

this shipment, at long last, to include beef and pork and lamb and

poultry. Products would be eligible for interstate shipment, export

to other countries, and use in products destined for export to other

countries, as well.

As Senator Hatch has noted, the current law severe limits State

plants’ marketing opportunities and unfairly penalizes them based

on size and gives unfair market advantage to bigger plants for

which Federal inspection is an option. This limitation penalizes

producers, who bear the added transportation costs of shipping

products to Federally-inspected plants if they want to market out

of State. The current law is inequitable among species, of course.

Some species can be shipped across State lines while others cannot.

So with the full implementation of HACCP, State and Federal inspection programs will be enforcing the same food safety and

standards and we will have the same seamless food safety inspection system we have talked about having now for some period of

time.

With S. 1988, we still have the benefit of our State-inspection

programs and their specialized knowledge of local needs. In South

Dakota, for example, we have 53 State-inspected plants. A number

of them serve very isolated populations.

So, Mr. Chairman, allowing this interstate and international

shipment of products inspected at these plants would provide a tremendous opportunity for the producers that Senator Hatch noted,

producers and processors in South Dakota, to owners and employees of these plants who have new business opportunities and to

towns that are in need of new business and capital flow.

So I am really interested in the testimony this morning of a

number of witnesses who have come distance, as well as our experts from the Department of Agriculture. I again thank you for

your interest in this issue and especially thank Senator Hatch for

his cosponsorship and his leadership, as well.
6

The CHAIRMAN. Thank you very much, Senator Daschle.

Let me ask each of the Senators who have joined this hearing if

they have opening comments or questions of our witness, Senator

Hatch. Senator Johnson?

STATEMENT OF HON. TIM JOHNSON, A U.S. SENATOR FROM

SOUTH DAKOTA

Senator JOHNSON. Just very briefly, I want to thank you, Mr.

Chairman, for holding this hearing and Senator Hatch’s leadership

on this important bipartisan issue. As Senator Daschle has noted,

this issue has been around a long, long time and it is overdue that

we finally address it in a constructive way this year.

I am pleased to be a cosponsor of S. 1988. This legislation, as

Senator Daschle has noted and Senator Hatch has noted, would

help create a seamless system of meat inspection between State

and Federal systems, and particularly now with implementation of

our HACCP system, we have the support of USDA and a great

number of agricultural as well as consumer organizations in this

country.

At a time when there has been a lot of frustration expressed in

South Dakota among my producers about lack of competition and

integration going on in the packing industry, this is a step, I think,

in the right direction which would be a boon, I think, to livestock

producers as well as to the State’s economy, to the economy of

many small communities, as well as to consumers. As Senator

Daschle has noted, we have some 53 small packing plants in South

Dakota. Many of them are right along our borders, but for artificial

and no longer rational reasons, not allowed to market their products across the State lines into Minnesota, Iowa, North Dakota,

Wyoming, and Nebraska.

I am confident talking to these producers in their small plants

around the State that this would do a great deal to allow them to

expand their business. It would create new niche markets for many

of our livestock producers at a time when they need more alternative marketing opportunities for themselves and it would create

greater competition in the livestock and meat industry in general.

I think that is a good thing for consumers and it is a good thing,

I think, for the country as a whole.

So I applaud USDA’s work with us on this legislation and all the

bipartisan cosponsors of this bill and I am hopeful that we can, in

fact, move beyond a hearing to a markup point at some expeditious

time. Thank you.

The CHAIRMAN. Thank you very much, Senator Johnson.

Senator Baucus.

STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM

MONTANA

Senator BAUCUS. I thank the Chairman. Mr. Chairman, as I

think and reflect upon this issue, it really is somewhat in a certain

sense sad that it takes Congress so long to do something that is

so right. This is a no-brainer. Clearly, inspection plants, packing

plants, processors in our country, whether they are Federal or

State, should be able to ship product across State lines because

under HACCP they will be subject to the same inspection stand-
7

ards. It just makes no sense at all for me that anyone would oppose

this legislation. it is just that simple.

Senator Johnson made a very good point about niche markets.

This legislation will enable lots of different people to market their

own meat products in a way that makes sense to them. We in my

State, Mr. Chairman, we call ourselves the Big Sky State and we

like to think that ‘‘Made in Montana’’ is going to be a good selling

point, not only nationwide but internationally. It is my hope that

this legislation is tailored in a way so that State-inspected plants

will be able to sell not only across State lines but around the world.

And clearly, it is to the best interest of a State processing plant

to be safe. If they are going to sell their product and have it accepted, and probably because they are small, they know they have got

to do a good job and they are going to do a good job.

It is analogous to me like start-ups in the high-tech world. You

have all these start-ups because people in our country today have

the opportunity, if he or she has a good idea, to follow up and pursue it, and I think the same should be true here. If a group of people want to get together and put together their processing plant,

they ought to be able to do so. There have been many attempts in

my State that have been futile, frankly, and one of the reasons is

this. It is just hard to ship. You cannot across State lines.

I very much commend Senator Hatch, Senator Daschle, and others for finally getting this bill together. I am a cosponsor, proudly.

Many others are, too. This is getting to be a thing, Senator. You

and I are on a lot of bills, I have noticed. This is one more.

Senator HATCH. It is starting to worry me.

[Laughter.]

Senator BAUCUS. It is a good sign. We Westerners are sticking

together.

Thank you very much, Mr. Chairman.

The CHAIRMAN. Thank you, Senator Baucus.

Senator Lincoln.

STATEMENT OF HON. BLANCHE LINCOLN, A U.S. SENATOR

FROM ARKANSAS

Senator LINCOLN. Thank you, Mr. Chairman. I appreciate your

holding the hearing today and want to welcome Senator Hatch and

thank him for his hard work on this issue.

Food safety is an extremely important issue, I think, to all of us

and I am pleased that the Committee is working on this issue here

in this bill so that we can review the proposal that has been offered

regarding the interstate shipment of State-inspected meat and

poultry. The administration and several members of this committee

have been working very hard on this measure to ensure that there

is a consensus, and I applaud that effort and I would like to work

to that degree.

However, I do represent a State that has a very large poultry interest, and today the poultry industry still has a few concerns

about the impact of this legislation, so I may have a few questions

for the panelists later on. I am delighted to hear from Senator

Hatch and would certainly like to ask him that maybe if there is

a possibility, we can look at some of the concerns that we do have

from the poultry industry’s side. I look forward to the witnesses
8

that will present that and would just simply highlight that food

safety is truly the ultimate issue here and that we do not forget

that and that we reflect on it, and as we can make improvements,

hopefully we will to this very important issue.

So thank you, Mr. Chairman, and thanks, Senator Hatch.

The CHAIRMAN. Thank you, Senator Lincoln.

The Chair would like to enter into the record a statement from

Senator Roberts, who is a cosponsor of the legislation and is supportive of it.

[The prepared statement of Senator Roberts can be found in the

appendix on page 41.]

Senator Fitzgerald.

STATEMENT OF HON. PETER FITZGERALD, A U.S. SENATOR

FROM ILLINOIS

Senator FITZGERALD. Thank you, Mr. Chairman. I would like to

welcome the distinguished Chairman of the Judiciary Committee

here. You do our Agriculture Committee much honor by coming before us and I am pleased to be a cosponsor of your legislation, Senator Hatch.

I think that now, in an era when we have a meat processing sector that continues to consolidate, and we are hearing a lot of complaints from the farm community about the continued consolidation

at the end producer level, we now have the four largest processors

controlling approximately 80-percent of the fed cattle market and

approximately 60-percent of the pork market, it seems to me that

allowing State-inspected plants to compete on a nationwide basis

is a very worthwhile goal. I compliment you on this legislation.

Illinois, according to our Illinois Department of Agriculture, has

283 meat processors. These plants employ about 6,000 people and

have annual sales totaling $425 million. Whenever I am at a Farm

Bureau meeting anywhere in any county in Illinois, somebody who

is from one of these State-inspected plants will get up and complain that they cannot export their meat out of State.

So I think we need to look at if these plants are complying with

USDA standards, if they are using some of the science-based technology that the USDA is now requiring, I think it will improve food

safety in our country, and in addition, it will allow for some more

competition in the meat industry, give the farmers more end producers to sell their livestock to, and be good for consumers. So I

want to congratulate Senator Hatch and I am pleased to be a cosponsor.

I also want to point out that one of my constituents, Michael

Eickman of Eickman’s Processing Company in Seaward, Illinois, is

here today and he is representing the American Association of

Meat Processors, a national organization of 19 State meat processing associations. Mr. Eickman, I want to thank you for traveling

to our nation’s capital to be with us today.

Thank you very much.

The CHAIRMAN. Thank you very much, Senator Fitzgerald.

Senator Hatch, you have heard from your colleagues and we appreciate very much your coming to offer this testimony personally.

Let me just say that your presence prompts me to make really

a further request. As if often the case with Congress, the jurisdic-
9

tion of various committees is clear with regard to some issues and

yet the issues are sometimes bigger than all of our committees. We

have been talking in this committee a good bit about agricultural

concentration. That was reflected in some of the statements by

Senators today, Joel Klein before the Committee and others who

are involved in that issue and we will be talking about that some

more. We appreciate the cooperation with you as chairman of Judiciary and your members because obviously these are subjects of

great interest to you. You have the whole antitrust issue in the

country, but the agricultural part of it is very important to us.

In the same spirit as we have worked with Senator Gramm in

the Banking Committee and our own Senators, Senator Johnson,

Senator Baucus, Senator Daschle, Senator Leahy are very active in

the debate on extending to rural America the television satellite

situation in the recent debate. These issues bob up in various ways,

but they are of great importance to rural America, as you understand with your constituents.

So we thank you for coming to be with us today and for giving

of your time.

Senator HATCH. I want to thank you, Mr. Chairman, and all of

you who are cosponsors, particular Senator Daschle, who is a great

leader and a very fine friend, and I really appreciate being given

this time. I hope you will listen to our Utah cattlemen. They are

good people.

The CHAIRMAN. We will listen carefully.

Senator HATCH. Thanks a lot.

The CHAIRMAN. The chair would like to call now the Deputy Secretary of Agriculture, Richard Rominger. He will be accompanied

by Ms. Margaret O’K. Glavin, Associate Administrator for Food

Safety, and Ms. Caren Wilcox, Deputy Under Secretary for Food

Safety.

Secretary Rominger, we are pleased to have you, as always. You

have been faithful in responding to our calls for testimony and

have given us the benefit of your wisdom and counsel and we look

forward to that again today.

Before you begin, let me mention that my understanding still is

that there will be two roll call votes cast at 10:30, which is a half

an hour from now. That will necessarily mean the absence of most

Senators for about a half an hour, given the time that it often

takes to get the first vote cast and the second. So I ask your forgiveness to begin with before we even begin, but we would like to

hear your testimony and then begin to proceed with Senators’ questions. We probably will be interrupted somewhere in that passage.

When we return, other Senators will be recognized if you can wait

that half hour or so, and we will proceed then and then move on

to our panel of other distinguished witnesses.

Mr. Secretary.
10

STATEMENT OF RICHARD ROMINGER, DEPUTY SECRETARY,

U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, DC.; ACCOMPANIED BY MARGARET O’K. GLAVIN, ASSOCIATE ADMINISTRATOR FOR FOOD SAFETY; AND CAREN WILCOX, DEPUTY

UNDER SECRETARY FOR FOOD SAFETY

Mr. ROMINGER. Thank you, Mr. Chairman and other members of

the Committee. I am pleased to be here today to talk about S.

1988, to remove the statutory prohibitions on interstate shipment

of State-inspected meat and poultry products that was introduced

by Senators Daschle and Hatch last year. In addition to Senators

Daschle and Hatch, I want to thank the ever-increasing bipartisan

group of Senators who have cosponsored the legislation, which is

known as the New Markets for State-Inspected Meat Act of 1999.

As the former head of the California Department of Food and Agriculture, I am pleased that we have finally come up with a solution that is fair to States, fair to small producers, and fair to consumers.

With me today, as you have indicated, are Deputy Under Secretary for Food Safety Caren Wilcox and Associate Administrator

for Food Safety and Inspection Service Margaret Glavin, who have

worked diligently with all of the stakeholders to resolve this interstate shipment issue.

The bill here today solves the perennial question of how to level

the playing field for small and very small State-inspected meat and

poultry processing plants, allowing them to reach markets across

State lines. I think the bill finds the right balance, providing packers with access to compete in new markets, ensuring the necessary

Federal oversight to guarantee consumers and our foreign trading

partners of the integrity of a seamless national inspection system,

and maintaining the identity of State inspection programs.

The genesis of this bill was a public meeting the Department’s

Food Safety and Inspection Service held back in June 1977 in

Sioux Falls, South Dakota, at the request of Senator Daschle. The

meeting initiated a consensus approach toward achieving interstate

shipment for State products. Subsequently, the Agency shared with

our National Advisory Committee on Meat and Poultry Inspection

a concept paper on interstate shipment, and ultimately the Committee composed of consumer, State, and industry representatives

endorsed this carefully balanced concept as a basis for legislation.

When Senator Hatch requested a report on the recommendations

for lifting the ban on interstate shipment last year, we were

pleased to forward the administration’s proposal.

The linchpin of this bill is the provision that States will adopt

and enforce Federal inspection statutes and regulations. Inspected

and passed State products will bear a Federal mark of inspection,

making it crystal clear wherever these products move in commerce

their safety and wholesomeness is assured by the U.S. Government.

In addition, States will be allowed to continue to use their State

mark of inspection. They will also continue to be allowed to impose

additional requirements on plants voluntarily opting for State inspection. But States cannot impose these requirements on or interfere with the free movement of product originating from Federal or

another State’s plants.
11

Before State-inspected plants can ship interstate, USDA will first

conduct comprehensive reviews of the State programs, confirm that

all the recommendations from the reviews have been implemented,

and then annual comprehensive reviews will continue to verify that

States are fully enforcing Federal inspection requirements.

Under the Hazard Analysis and Critical Control Point, the

HACCP inspection system now in place, the Nation’s food supply

is even safer than it has been. We have seen the overall presence

of salmonella in broilers, swine, ground beef, and ground turkey

drop, and for some species by as much as 50-percent. To strengthen

the seamlessness of the national inspection program under S. 1988,

all salmonella performance standard samples for products eligible

for a Federal mark of inspection, whether produced in a Federal or

a State establishment, will be collected by the Department and

analyzed in our laboratories. We believe this will also give consumers confidence of the Federal oversight of the system.

So we think the time is ripe for S. 1988 with the final implementation of HACCP in January of this year. The approximately 2,300

State plants have adapted to the HACCP system very successfully

and are producing safe and wholesome product under this new system of inspection. With the carefully planned in-depth reviews, the

confidence will be there among consumers, industry, the States,

and the Department to remove the inequity and allow State-inspected plants to ship their products interstate under the provisions of this bill.

We have 25 great State partners that are on the map listed up

there with the expertise to best provide inspection for their small

and very small State plants. The States are illustrated on that

chart. Those are the ones that are speckled there. USDA wants to

strengthen its relationship with the State programs and ensure

their viability. In fact, we want to encourage more States to implement their own program.

To this end, the bill calls for raising the Federal reimbursement

up to 60-percent of the cost of operating a State program. Currently, FSIS will reimburse a State for only up to 50-percent of its

program’s costs.

Additionally, since these are voluntary programs on the States’

part and a State’s resources are not inexhaustible, States would be

permitted to limit the size of plants that are eligible for State inspection and this bill would allow for that. The very small plants

who produce specialty niche market products, such as award-winning Kansas beef—we have got some Kansas beef right here—or

jerky from—this is the maple cured M&J jerky from Vermont, and

here we have got Manly Meats sausage links from Indiana. These

are winners with the passage of this bill.

Interstate shipment will allow these State plants to reach new

markets and to engage in new and innovative methods of marketing, such as mail order or e-commerce over the Internet. So this bill

would allow these small plants to better compete with plants that

are Federally inspected.

I think the consumer is also a big winner here. Consumers would

be able to enjoy a greater variety of safe meat and poultry products

like those that I just mentioned. With the current prohibition in

place, you or I here in Washington cannot enjoy the many specialty
12

products produced under State inspection. However, once this bill

passes and becomes law, not only would every American be able to

enjoy these and other State-inspected products, but people from

around the world would be able to enjoy these products since they

would be eligible for export, and they will be able to do so with the

assurance provided by the USDA mark of inspection.

Small producers will also win because they will have more local

plant options for delivering their animals. In some regions, small

farmers and ranchers have to transport their animals over long distances. Even Federally-inspected plants will benefit because they

are often suppliers to these small and very small plants that buy

their product and then add value to those products.

The Federal program and the State programs are winners, too.

Greater coordination between Federal programs and State programs will ensure the consistent application of policy and enforcement. Importantly, the higher degree of coordination will ensure

that the expertise will flow both ways, maximizing the use of talents available in a national inspection system.

The interstate shipment debate, as we have heard, has gone on

long enough. Back in the early 1980s, when Senators Daschle, Dorgan, and Roberts were members with Secretary Glickman on the

House Committee on Agriculture, then-House Subcommittee Chairman Harkin held hearings on this subject, and this was a decade

after the debate on the issue had begun.

Senator HARKIN. Was that in the last century or what?

[Laughter.]

Mr. ROMINGER. A long time ago. So we think the time is right.

HACCP has been successfully implemented. We have a balanced

bill addressing concerns of processors, consumers, State regulatory

authorities, USDA, and the industry, and this bill has been introduced. It is time to pass this interstate shipment bill.

Mr. Chairman, thank you for the opportunity to appear before

you this morning and I look forward to working with you in passing S. 1988 so that we can move to a seamless national food safety

system. We will be happy to answer any questions that you or

other members of the Committee may have. Thank you.

[The prepared statement of Mr. Rominger can be found in the appendix on page 43.]

The CHAIRMAN. Thank you very much, Mr. Secretary. It is appropriate you had the historical reference of our members during their

House service. I think already it has been mentioned, by Senator

Daschle, I think, that the issue has been with us for 20-years. I can

recall each of the conferences during that period of time in which

this issue has arisen in one form or another from one house or another and it is appropriate at this point, because we do have the

ranking member and the Chairman of the Subcommittee that

heard this bill in the last century.

[Laughter.]

Tom, would you like to proceed with your opening comments or

your questions?

Senator HARKIN. As soon as I sit my cane down back here, I will

be set.

[Laughter.]
13

STATEMENT OF TOM HARKIN, A U.S. SENATOR FROM IOWA,

RANKING MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

Senator HARKIN. Thank you, Mr. Chairman, and I apologize for

being late. I had to testify before the Armed Services Committee

this morning and I just got out of that. I will just ask that my

statement be made a part of the record.

The CHAIRMAN. It will be included in full.

Senator HARKIN. I just want to make sure that I welcome Jolene

Heikens of Triple T Meats in Wellsburg, Iowa, who has come here

today and I look forward to her testimony. We have, as I am sure

you do in Indiana and I know you do in South Dakota, Senator

Daschle and Senator Johnson, a lot of these small plants that really provide a good source of revenue, they employ people, they

produce a great product. Especially if you are in the corner of a

State where you are bordering two other States and your market

sort of is right over there but you cannot do anything, it really

works a terrible hardship.

I think what we have here is a good approach on this to ensure

that these plants meet all of the requirements of HACCP and meet

the requirements of Federal inspection, even though we can deputize the State inspectors. So I think we have a good seamless system here now that we can bring these small plants into the national system.

With that, I thank you very much.

The CHAIRMAN. Thank you very much, Senator Harkin.

[The prepared statement of Senator Harkin can be found in the

appendix on page 50.]

The CHAIRMAN. I will ask my questions last so that we get as

many Senators in before the vote. We are now advised the vote will

be about 10:40, so that gives us a little bit more time.

Senator Daschle, do you have questions of the witness?

Senator DASCHLE. Mr. Chairman, I will be brief, but first of all,

let me compliment Secretary Rominger for his excellent statement.

We appreciate his presence here today. He said a couple of things

that I think we ought to elaborate on, if we could just a little.

One intriguing statement was that you actually encourage Stateinspected plants and you want to see more of a State role and State

involvement. Could you elaborate a little bit on why you think that

is important?

Mr. ROMINGER. We think it is important because the States know

their local small plants and we think they are in a good position

to be able to do a good job of inspecting those plants, and now that

we have a national seamless system, why, we will be able to guarantee the consumers that those small State-inspected plants are up

to the standards of Federal inspection and, in fact, will carry that

Federal inspection stamp in addition to the State stamp, if the

States still want to use that. So we think that would give the

States an opportunity to put their State stamp on it as well as the

Federal stamp.

Senator DASCHLE. You also mentioned that this legislation could

enhance food safety because of the food testing provisions. I would

be interested, if you could, to elaborate a little bit more on that,
14

especially as it relates to salmonella. Why is this a better food safety law than we might have otherwise had?

Mr. ROMINGER. We have, as you know, recently instituted the

salmonella testing, and perhaps one of my colleagues will elaborate

on that, but we think that, that is important to make sure that all

of these plants are testing for salmonella. USDA would continue to

take the samples not only in the Federal plants but in the Stateinspected plants, as well, and analyze them so that we would be

able to assure consumers that those plants are meeting the salmonella requirements, as well, and we think that is important because salmonella is one of the pathogens that has caused sickness

in a lot of people.

Senator DASCHLE. And that is not happening today, correct?

Ms. GLAVIN. Under HACCP, we do have plants where we test for

salmonella. We have been doing that now for 3-years. The overwhelming majority of the plants, over 90-percent, have been able

to meet the salmonella performance standards, which is a real tribute to those plants. They have stepped up to the plate and really

taken charge. We think that having a single set of salmonella sampling, in other words, done all by the Federal Government, will enhance the safety of the product and will enhance consumer confidence that all plants are being held to the same standard. This

has been a big success.

Senator DASCHLE. Could I finally ask, obviously, a lot of groups,

consumer groups, producer groups, processor groups, all have an

interest in this. I appreciate your efforts to reach out to all of them

to try to reach a consensus. Could you give us your appreciation

of that effort? Was everybody included in this consensus making effort in the beginning and how do you feel about the role that all

the groups have had in getting us to this point?

Mr. ROMINGER. I will ask Caren to elaborate, but yes, we did include everyone who was interested and wanted to come to the discussions that were held, and, of course, our Advisory Committee

also reviewed this process extensively. So we think everyone who

was interested was included.

Caren, do you want to elaborate on the amount of work that

went into that?

Ms. WILCOX. The National Meat and Poultry Advisory Committee, the Advisory Committee to the Secretary, did discuss this on

numerous occasions. They looked at various work plans for the legislation. They made suggestions about changes. Those discussions—our meetings, of course, are public and were well attended

by both the members and also those that are not formal members

but they were perfectly able to make comments at that time. So

there were several public discussions and extensive other discussions.

Senator DASCHLE. Mr. Chairman, I have to say the Department

has just been very, very helpful and cooperative in this whole effort. As was just noted, I think the outreach here to try to ensure

that we have addressed the concerns and the priorities of all

groups has really been a remarkable effort. I applaud them and I

thank them for their participation and certainly appreciate their

testimony this morning. Thank you.

The CHAIRMAN. I thank the Senator.
15

Senator Fitzgerald.

Senator FITZGERALD. Thank you, Mr. Chairman.

I neglected to congratulate the minority leader for his help and

his lead sponsorship here. In my enthusiasm to thank Senator

Hatch, I neglected to mention that you were the lead sponsor.

While we are of different parties, I have enjoyed working with the

minority leader on issues of importance to farm country out there.

Mr. Rominger, thank you for addressing that issue about the consensus building process because I have noticed that there are a list

of four organizations that opposed the legislation. I am glad you

have attempted to work at the USDA with all interested parties.

I have a little bit of a different question. I am wondering if the

USDA has estimated the cost of implementing this legislation and

does the President’s or the current budgets that are floating out

there right now being debated on the floor of the Senate, do we

have appropriate levels of funding for the Food Safety Inspection

Services to take on this new role?

Mr. ROMINGER. Yes, we do. The FSIS 2001 budget includes a re- quest for $1 million to cover the increased cost that would be associated with the comprehensive reviews of all the State programs.

As far as the reimbursement from 50-percent to 60-percent, if all

of the States opted for that, that would add an additional $8 million in payments to the States, but that will not be needed until

fiscal year 2002, but we would request that at that time.

Senator FITZGERALD. So you think the States are in a pretty good

position, too? You are saying there is going to be an increase in the

amount of sharing of the expenses from 50- to 60-percent?

Mr. ROMINGER. Yes. This bill allows for that.

Senator FITZGERALD. That is good. So the States should be in

pretty good order, too. And if they are not, they probably will have

trouble with you, I would imagine, because you have to approve the

systems they have in place.

Mr. ROMINGER. Well, the States, the 25 States that have programs now are operating under a 50-percent reimbursement, so we

think this just will help them.

Senator FITZGERALD. Thank you. You did touch upon this briefly

in your testimony, but I just wondered if you could update the

Committee a little bit more expansively on your progress in implementing the HACCP systems, the Hazard Analysis and Critical

Control Point systems, in both the Federal and State-inspected

plants.

Mr. ROMINGER. As we have indicated, we have been through this

process now. It was a 3-year process. First, we had the large plants

that came on January 1, what would that have been, 1998, and

then we had the medium-sized plants and small plants on January

1, 1999, and now in January 2000, the very small plants have come

under the HACCP regulation. We have seen a huge majority of

those plants meeting their HACCP requirements, have their

HACCP plans in place, and are doing a good job. So we think that

now is the time to include all of them in this State and Federal

inspection system. But they have done a good job.

Maggie, would you like to comment?

Ms. GLAVIN. I would only like to add that this past year, when

we brought on the very small plants, a large number of those were
16

State-inspected plants and the States did a wonderful job of bringing those plants along. These are the very small plants, fewer than

ten employees, and we and the States worked very closely together

to make sure that they were prepared.

Senator FITZGERALD. Thank you very much.

The CHAIRMAN. Thank you very much, Senator.

Senator Johnson.

Senator JOHNSON. Yes. I want to second the comments made

about appreciation, not only for being here but for the work that

you have done to build a consensus among so many different players who have an interest in this reform. I think we need to do more

of that in general in Congress, frankly, but in this particular instance it is very, very welcome.

You observed about how we are enhancing our meat safety inspection with the implementation now of HACCP and the salmonella testing and so on, but, in fact, the track record of Stateinspected meat products, even before that, how would you characterize it? We are starting from what, in fact, was a very high level

in the first place is my understanding. Is that a fair characterization of our State-inspected meat plants, by and large, in the past?

Mr. ROMINGER. Yes. Yes, I think so. I think the States have done

a good job in the past. We think that this will assure consumers

and assure our foreign trading partners that they are equal, they

are the same as the Federally-inspected plants. So there would be

even more confidence.

Senator JOHNSON. Do you anticipate any resistance from our

trading partners, having evaluated this new approach in the U.S.?

Mr. ROMINGER. No, I do not.

Senator JOHNSON. Good. When you talk about increasing our cost

share from 50- to 60-percent and then ultimately an $8 million increase, a very modest level when you think of a national effort such

as this, what is that added increment designed to enable the States

to do? What is the rationale for the 50- to 60-percent and how will

that $8 million assist the States?

Mr. ROMINGER. Well, there may be some added costs to the

States in their coordination with the Federal Government, making

sure that our inspectors and their inspectors keep up to date on all

the training that goes on. So there may be a little added expense

for States in being part of this seamless system, so we thought that

this would be a way to compensate them for that.

Senator JOHNSON. Do you anticipate that there will be an overwhelming positive response from these 25 States that have State

inspection systems?

Mr. ROMINGER. I think so. Caren, do you have any comment?

Ms. WILCOX. We certainly believe that probably all of them will

be very enthusiastic about it.

Senator JOHNSON. And you anticipate additional States may, in

fact, as well, join in with State inspection systems?

Mr. ROMINGER. Have we had any?

Ms. WILCOX. There are provisions in the bill for them to come in

and we would hope that there would be. We have some indications

from some States that they are interested in the new program.
17

Mr. ROMINGER. Because there are some States that have given

up State inspection in the last few years and they may be interested now in getting back in.

Senator JOHNSON. Again, I appreciate your testimony here today.

I think there is a lot of enthusiasm among the American public as

well as producers on this issue, and again, your work to really put

us in a position now to finally begin to implement this reform, I

think is very welcome and badly needed. Thank you.

The CHAIRMAN. Thank you, Senator Johnson.

Senator Lincoln.

Senator LINCOLN. Thank you, Mr. Chairman, and I, too, appreciate your availability here today. I just have a couple of questions.

I do not think anyone in the room will disagree with the fact that

our agricultural community today faces a variety of struggles on a

daily basis, and one of the top ones is truly trade barriers. Senator

Johnson asked a few questions about that. You answered with a

no, that you felt pretty confident that we would not have any problem with our trading partners, but I cannot help but imagine a scenario where you have a product that is inspected in, say, a State

like Oklahoma, maybe shipped to Louisiana, where it is further

processed into a Cajun sausage, and then shipped to Europe.

I just wonder if our trading partners are going to be willing to

deal with each of those individual inspecting systems through the

various States. From your previous answer, I can only assume that

it is that you maintain that S. 1988 would not violate any current

international trade agreements, is that correct, Mr. Rominger?

Mr. ROMINGER. That is correct, and we think that our trading

partners will accept this because that Federal stamp will be on the

product that is inspected by the State plants because they are

meeting Federal inspection requirements.

Senator LINCOLN. That just kind of leads me to, and we talk

about the 25 States that have State inspection systems are very

pleased with this legislation. I thought it was 26, I guess. There

are 24 States that do not, is that correct, that do not have

State——

Mr. ROMINGER. No, we have got 25.

Ms. WILCOX. One dropped out recently.

Senator LINCOLN. The numbers do not matter. I am just saying

that there is another side to that coin. There are the other 25

States that do not have State inspection systems. When you mention that, if, in fact, they are meeting Federal guidelines, why

would it be—I do not know that they would not want to be Federally inspected.

Mr. ROMINGER. Why would not the small plants want to be Federally inspected——

Senator LINCOLN. Because of the cost?

Mr. ROMINGER.—instead of staying with the State program?

Senator LINCOLN. Yes.

Ms. GLAVIN. Certainly at our public meeting back in 1997 in

Sioux Falls, we heard extensively from small producers about their

desire to continue to work with State people who were much closer

to them, who were much more available than the faceless people

in Washington, is what they would call us. I think I became convinced certainly in that meeting that the very small plants, these
18

plants that have a small number of employees, often are family

owned and family run, are better served by a government agency

that is closer to them, that knows the community, that knows

them, is able to get to them faster.

That was the basic reason, because we kept asking that question.

Why not come under Federal inspection if you want to ship interstate? Universally, that was the answer. I know the people in the

State. They respond to me. They respond to my phone calls.

Senator LINCOLN. Well, in terms of leveling playing fields, I definitely think that is important, but you have States that have opted

not to do a State system because they chose to do the international

trade, or to trade across State lines and internationally.

If, in fact, that Federal stamp is over the State stamp, does that

mean that the Federal Government assumes the liability and the

responsibility?

Mr. ROMINGER. It would be the same as any other Federally-inspected plant now. The Federal inspection is on it, which means

that we are assuring consumers that, that is a safe, wholesome,

healthy product.

Senator LINCOLN. So you do assume the liability and the responsibility of that. Well, then can you just describe how the State-inspected facilities would have to comply with the FSIS, the regulatory requirements?

Ms. GLAVIN. First of all, they would be required to adopt all of

the requirements of both our legislation and our regulation and

they would have to enforce those in the same way that we do. They

do that today. They have equal to. But they would have to have

the same laws and regulations and enforce them as we do.

Senator LINCOLN. So it almost sounds like the Federal Government wants to get out of meat inspection.

Ms. GLAVIN. No.

Senator LINCOLN. No?

Ms. GLAVIN. I would not go that far.

Senator LINCOLN. But, I mean, if, in fact, you take the liability

but allow the State to do it as long as they comply with your guidelines, then it is kind of like was mentioned earlier, the deputizing,

apparently, of State inspection systems.

Ms. GLAVIN. We would continue to have oversight of those State

systems, including yearly reviews of them, and as has been mentioned, we will do the salmonella performance standard testing,

which would be an ongoing check that, in fact, things were operating properly.

Senator LINCOLN. The number that you mentioned on that salmonella testing, the 90-percent compliance, I guess, or positive results from that, were those all Federally—I did not understand

your answer. Those were all Federally-inspected facilities,

right——

Ms. GLAVIN. Those are Federally inspected.

Senator LINCOLN.—not State-inspected facilities.

Ms. GLAVIN. That is what is in our database, yes.

Senator LINCOLN. Right. So then what you would be hoping

would be if they comply with all of your standards and requirements, then those State facilities would meet that 90-percent level,

hopefully, as well?
19

Ms. GLAVIN. The 90-percent was 90-percent of plants are meeting

the standard, and all plants are required to meet them. It is clear

that plants are stepping up to the plate and doing that. The

States——

Senator LINCOLN. Those are Federally-inspected plants, correct?

Ms. GLAVIN. The ones that my data refers to are Federally, yes,

but the State plants all have the same requirement.

Senator LINCOLN. They do now?

Ms. GLAVIN. Yes.

Senator LINCOLN. OK. Do you know if they are meeting that

same——

Ms. GLAVIN. Yes, they are. I do not know the exact percentage

of plants that are meeting it, but I would assume it is in the same

area of 90-percent.

Ms. WILCOX. Most of the small plants, the very small plants,

have just come into the program and therefore the database is not

complete as to the salmonella sets for the very small.

Senator LINCOLN. I just had a few concerns and wanted to make

sure that I had those expressed and would like to maybe visit with

you further on some other questions that we may have.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator Lincoln.

One concern of critics of the bill has been phrased in this way.

Under this bill, would all State-inspected plants have to comply

with all USDA directives, notices, and policy memorandum? Was

that the intent of the proposal as prepared for transmittal to Congress?

Mr. ROMINGER. Yes.

Ms. GLAVIN. Yes.

Ms. WILCOX. It is our intent, yes.

The CHAIRMAN. Under this bill, would States still be able to require and to pay for inspection of all meat species? For example,

in Indiana, inspection is required for farm-raised deer and elk,

bison and ostrich and emu, and there are a few plants in the State

that slaughter these species. Is the legislation comprehensive in

that way and what comment can you make about all meat species?

Ms. GLAVIN. That would continue to be allowed, although as is

the case today, there would be no Federal payment for that part

of a State’s program.

The CHAIRMAN. I see, no Federal payment there. So the States

could do it, but they have to assume total payment there?

Ms. GLAVIN. Right, and that is the case today.

The CHAIRMAN. There would still, however, be the dual stamps,

both the Federal and the State stamps?

Ms. GLAVIN. No, only on product covered by the Federal Meat

and Poultry Acts.

The CHAIRMAN. So on, for instance, the farm-raised deer, this is

a State responsibility and the State stamps it and pays for it?

Mr. ROMINGER. Unless the Federal Meat Inspection Act is

changed to include them.

The CHAIRMAN. The bill allows USDA to reimburse a State for

up to 60-percent of the costs. The bill also requires a comprehensive Federal review of State inspection programs to determine their

effectiveness of each program, identify changes that are required.
20

Is it possible that changes could be required that would substantially increase the cost to the State of this process, even with the

higher Federal reimbursement?

Ms. GLAVIN. I think the one area where there could be additional

cost is if additional small plants decided to move over to the State

system, that could add to the States’ costs. They would need additional inspectors, etc.. So there is the possibility that their cost

could increase.

The CHAIRMAN. And it is in that area that the States are likely

to incur costs? In other words, if you are a State and you are taking a look at this and you wonder, granted, the 60-percent reimbursement is more generous, but am I going to be required to do

a lot of other things that lead to my costs being higher.

Ms. GLAVIN. That is part of the reason for allowing States in this

bill to set a size limit on the plants that they would be willing to

take into their program so that they have some way to control their

cost.

The CHAIRMAN. Now, in response to other Senators, you have

commented you do not anticipate difficulty with regard to our trading partners abroad. I am just curious, have any inquiries gone out

from the Department to any of these markets or any other countries? Are they aware that this legislation has been drafted by

USDA, offered by distinguished Senators, and do you have any official reaction from them?

Mr. ROMINGER. Caren?

Ms. WILCOX. I know that they have been informed because USTR

and FAS have reviewed this bill and there have been notices, but

I do not know of any formal responses. We do know that some of

our meetings have been monitored by representatives of other governments.

The CHAIRMAN. And they have made either favorable comments

or no comments or how would you characterize it?

Ms. WILCOX. No formal comments.

The CHAIRMAN. Now, 25 States are covered on your chart by both

State and Federal programs presently. Are more States likely to

join this process, and do you have any evidence, any comment as

to what kind of decisions might be made by States that do not have

programs presently?

Mr. ROMINGER. I do not think we know for sure whether any

States will decide to go back to adopt a State-inspected program because it does incur costs for a State that does their own program

because the Federal Government will only reimburse under this

bill up to 60-percent of their costs. So there would be additional

costs for the States if they decide to do their own program.

The CHAIRMAN. Is that your view as to why many States have

not adopted State programs, because it does have an added cost to

it and, therefore, they have just simply been a part of the Federal

business from the beginning?

Mr. ROMINGER. I think that is a major cost, major reason, yes.

Ms. GLAVIN. There is some movement over the years in and out

of the program, and in the past few years, the two States I remember that have dropped the program were Florida and Alaska, and

in both cases it was for financial reasons caused.
21

The CHAIRMAN. And presumably, they did not have additional

meat products that were outside the Federal bounds. I mentioned

the Indiana situation of these additional species. That might be a

justification for having a State program, if you had additional

items that you wanted to certify.

Ms. WILCOX. Yes. If you had an industry with non-amendable

species, yes.

The CHAIRMAN. Senator Harkin, do you have further questions?

Senator HARKIN. Mr. Chairman, I just have one. I think you and

others have covered this waterfront pretty thoroughly. I just have

one just a little bit different than this, Mr. Rominger. I wrote a letter to Secretary Glickman on March 27. It has to do with the reduction of 197 inspector years contained within the USDA’s budget

for next year. I am very disturbed by this, as a matter of fact, and

why that is in there. Here we are talking about inspections, and

yet the USDA in their own budget is asking us to reduce by 197

inspector years, and yet we just recently had another outbreak of

listeria, as you know.

So I am really disturbed by this and I hope that you will take

this back to the Secretary and ask him please to take a look at the

letter I wrote just the other day. I really believe that you are doing

this without soliciting any public comment. I really think that before any changes are made in the inspection process, I really do

think you need to go through an open rulemaking just as you

would for any changes in slaughter inspection. That was sort of the

content of my bill.

I do not need you to reply to that, but please take this back to

the Secretary and let him know that we need to really discuss this

because the last thing we need is a reduction in inspectors, I think,

out there. If you want to comment on that, I would be glad to hear

that.

Mr. ROMINGER. We appreciate and we understand your concerns.

Certainly, the Secretary will be responding to your letter. I will ask

my colleagues to amplify about that, but I would just add that, currently, we have funds in the budget for additional inspectors and

we have an aggressive recruiting program underway right now to

add some additional inspectors in this fiscal year.

Senator HARKIN. So you are adding them this year and cutting

them next year.

Ms. GLAVIN. We do intend to, for slaughter inspection, do a full

notice and comment rulemaking process for any changes there, and

we are also committed to a full public process on making any

changes in the frequency of processing inspection.

Senator HARKIN. I have to tell you, Ms. Glavin, through all my

years here, I do keep fairly open doors to a lot of producers around

the country, large and small, and I am hearing more and more

complaints about the fact of the lack of being able to get a Federal

inspector, and then I get hit with this budget of 197 reduction and

I am wondering, what is happening here? I do not understand this.

Do you have any other comment on that? I do not understand it.

Ms. GLAVIN. Well, no. As the Secretary indicated, we have had

a very aggressive recruiting program this year and we have seen

some success in increasing the number of slaughter line inspectors

and we are committed to continuing that.
22

Senator HARKIN. Maybe we can work this out, but maybe you

can enlighten me more as to why that was in the budget.

Ms. GLAVIN. Yes.

Senator HARKIN. Thank you very much.

Mr. ROMINGER. We would like to continue the discussion with

you on that issue.

Senator HARKIN. I appreciate that. Thanks.

Senator LINCOLN. Mr. Chairman, can I just ask them to qualify

an answer to the Chairman’s question? In discussion about having

presented the proposal to USTR, you did not get a formal response

from them?

Ms. WILCOX. Oh, no, from them, but there is a process that they

have once a bill is introduced that could have implications in international trade that they have.

Senator LINCOLN. I just want to make sure that I understand. I

realize that you have no——

Ms. WILCOX. No. USTR fully oversaw this bill——

Senator LINCOLN. And supports it?

Ms. WILCOX.—and the administration as a whole supports this

bill.

Senator LINCOLN. So USTR, they fully support it?

Ms. WILCOX. They reviewed this bill——

Senator LINCOLN. It is just the other countries that you are saying?

Ms. WILCOX. Our understanding of the Chairman’s question was,

did other countries know about the bill, and there is a process for

informing them about it.

Senator LINCOLN. You have gotten no formal comment from the

other countries——

Ms. WILCOX. We have no formal comment that I know of from

them.

Senator LINCOLN.—but you have a formal endorsement from

USTR?

Ms. WILCOX. Yes. There was a full review by USTR, yes.

Senator LINCOLN. I just wanted to make sure I was correct on

that.

Ms. WILCOX. Thank you for clarifying the record.

Senator LINCOLN. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator Lincoln.

We are concluded with this panel, which is fortuitous. You can

go back to work. But we appreciate very much Secretary Rominger,

Ms. Glavin, Ms. Wilcox and will return after these votes and have

a distinguished panel.

Mr. ROMINGER. Thank you, Mr. Chairman.

The CHAIRMAN. For the moment, the hearing is recessed.

[Recess.]

The CHAIRMAN. The hearing is called to order again. We thank

you for the patience that you have displayed already as our witnesses. We look forward to hearing from each one of you.

Let me introduce the panel who have assembled. They are Fred

L. Dailey, the Director of the Ohio Department of Agriculture and

President of the National Association of State Departments of Agriculture from Reynoldsburg, Ohio; Michael Eickman, Eickman’s

Processing Company, Incorporated, representing the American As-
23

sociation of Meat Processors, the Illinois Association of Meat Processors, and 18 other State meat processing associations, from Seward, Illinois; Jolene Heikens, Triple T Country Meats, representing

the American Association of Meat Processors, the Iowa Association

of Meat Processors, and 18 other State meat processing associations, from Wellsburg, Iowa; Harry Pearson, President of the Indiana Farm Bureau, representing the American Farm Bureau Federation, from Indianapolis, Indiana; Richard T. Nielson, President

of the Utah Cattlemen’s Association, representing the National

Cattlemen’s Beef Association from Salt Lake City, Utah; Carol

Tucker Foreman, Distinguished Fellow and Director of the Food

Policy Institute, Consumer Federation of America; and Patrick

Boyle, President and CEO of the American Meat Institute, Arlington, Virginia.

We are delighted that you are all here. I will ask you to testify

in the order that I have introduced you. Please try to summarize

your comments in 5 minutes, more or less, and your full statements

will all be made a part of the record of this hearing.

Mr. Dailey.

STATEMENT OF FRED L. DAILEY, DIRECTOR, OHIO DEPARTMENT OF AGRICULTURE, PRESIDENT, NATIONAL ASSOCIATION OF STATE DEPARTMENTS OF AGRICULTURE,

REYNOLDSBURG, OHIO

Mr. DAILEY. Thank you, Mr. Chairman. Thank you for the introduction, as well. I did not have it on my resume, but I did serve

6-years as Director of the Indiana Division of Agriculture during

the 1970s, so I am almost a Hoosier.

The CHAIRMAN. Indeed, always a Hoosier.

[Laughter.]

Mr. DAILEY. But I am also responsible for a State meat inspection and poultry program which oversees 215 establishments in our

State and I have with me today Dr. Lee Jan, Director of the Meat

Safety Assurance Division of the Texas Department of Health, and

he is President of the National Association of State Meat and Food

Inspection Directors. We thank you for the opportunity to speak

here today.

I am here on behalf of all the States to support the approach embodied in this bill, which would lift the unfair ban on interstate

shipment of State meat and poultry products. This is a subject of

extreme importance to State Departments of Agriculture and the

time to act is now. The reasons to act are clear, simple, and, I

think, very compelling.

Because of our long history of oversight and compliance with the

‘‘equal to’’ inspection requirements of Federal law, the States have

never viewed this question of removing interstate shipment as a

food safety issue. In fact, we are very, very proud of our food safety

record.

Some of you may wonder why we have 25 States with their own

State meat inspection programs. Who are we serving? Our mission

is to provide consumers with wholesome, unadulterated products

that are properly labeled and safe. State programs are geared to

regulating small and medium-sized businesses. Our personnel are

generally more accessible and more flexible in providing inspection
24

resources that are geared to the needs and timing of small plants

that are not running three production shifts per day working five

or 6 days per week. State programs also provide practical information and technical assistance and our overtime inspection fees are

considerably less than Federal rates. In Ohio, for example, it is $18

an hour versus $47 an hour for the USDA.

We are geared to working with and supporting businesses that

cannot afford to employ a scientific staff or attorneys to sort

through all the regulations in searching for answers. We provide a

direct line of information sharing and decision making that is accessible to small businesses much more easily than the multi-layered chain of command and the frequently adversarial attitude of

the larger Federal system. So we feel there is definite need for existing State programs to continue, and if this legislation passes,

you are more likely to see additional States adopt programs.

Now, the question before you this morning is whether to change,

whether to level the playing field and provide the same opportunities for all meat and poultry processors, or to continue the Government sanctioned economic advantage for large corporations and foreign competitors at the expense of small businesses.

As I was preparing my testimony, I looked back to testimony I

gave back in 1996, almost 4-years ago, and I began wondering how

many of our small processors we had lost in that time. I went back

and counted and it was 41 different plants that we have lost. We

have also had a number of small cattle ranchers and hog farmers

that have not been paid competitive prices and there have not been

as many opportunities for price discovery. If you go to a livestock

auction, they used to be crowded affairs with a lot of packer buyers.

Now, there is one or two and you almost sense that you take this

lot and I will take that lot.

Mr. Chairman, quite a lot has not changed since the 1996 hearing, and yet quite a bit has changed. That presents us with new

opportunities. First, let me tell you what has not changed over the

years and why this issue is so important to us.

Most importantly, small meat processors under State programs

are still denied many opportunities to sell their product today because they do not have full access to the U.S. marketplace. Many

of these companies make and market specialty products, like sausage, bratwurst, jersey, and ethnic meat products often made from

old world recipes which are not cost effective product lines for large

operators but for which there is clearly a demand. Repealing the

ban would provide consumers with more choices in the supermarket and convenience stores.

It has always struck us as both unfair and illogical to say that

consumers in one State may enjoy meat product while consumers

in another State may not meet that same product. I choose the

word ‘‘meat product’’ carefully because this is the only State-inspected product that cannot be shipped interstate. You heard the

difference between buffalo and beef and we have beefalo, which is

actually five-eighths beef and it has to be inspected because it is

more beef than it is buffalo. You can actually cross-breed the two.

But it is illogical when you get down and look at the absurdity of

it all.
25

Maintaining the interstate ban prevents small businesses from

capitalizing on other sales opportunities, such as niche marketing

through mail order catalogs, the Internet, and we even have a situation in Ohio and Indiana where we have Union City. You can sell

product on one side of the street, but you cannot cross this street

and sell it on the other side.

In my State, Ohio State University recently did a study and they

found that lifting the ban would mean an additional $56 million to

our State economy and create almost 600 new jobs for our State.

The second thing that has not changed is the unfairness of the

ban. You have heard about the large packing conglomerates, but

particularly I think it is very unfair with the foreign competition.

The trade agreements allow foreign inspected product to be shipped

anywhere in the United States so long as that foreign inspection

program is equivalent to the U.S. Federal standards, in practice,

the same standard which the State must meet. If any of our Stateinspected plants were located in Guatemala, Mexico, Australia,

they could ship anywhere in the United States. But because they

are not, they are restricted to intra-State marketing.

As you have heard, the Secretary has three Advisory Committees

which has now recommended that HACCP is fully implemented in

the small plants.

The third major thing that has changed is that we finally have

the administration on board supporting our effort. While the legislation may not be perfect, it is something that will work and it

would move us even closer to a uniform national inspection program. The bottom line is that today, there are now meaningful distinctions between Federal and State inspection programs which

justify perpetuating this unfair ban.

I want to thank the administration for putting this concept on

the table. It is billed as a consensus bill. Some of us feel like we

have not had as much input as we would like, but we do believe

that the true consensus is very close, Mr. Chairman. With a little

work by the Committee with all the interested stakeholders and all

the issues, we can reach a reasonable accommodation that maintains all the essential elements of the USDA concept.

I would like to challenge my colleagues in the food, consumer,

and agriculture communities who are here this morning to commit

to working these remaining issues out, getting a bill passed, not believe that keeping the status quo is in the best interest of anyone.

So we all have a reason to remain engaged in the process and

see this bill through to completion. Our NASDA members and the

constituents we serve hope that Congress will act this year to remove this unfair ban and competitive barrier to small businesses.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Dailey.

[The prepared statement of Mr. Dailey can be found in the appendix on page 52.]

Mr. Eickman.
26

STATEMENT OF MICHAEL EICKMAN, EICKMAN’S PROCESSING

CO., INC., REPRESENTING THE AMERICAN ASSOCIATION OF

MEAT PROCESSORS, THE ILLINOIS ASSOCIATION OF MEAT

PROCESSORS, AND 18 OTHER STATE MEAT PROCESSING ASSOCIATIONS SEWARD, IL

Mr. EICKMAN. Thank you, Senator Lugar and members of the

Committee. My name is Mike Eickman. I own and operate

Eickman’s Processing Company, Incorporated, in Seward, Illinois. I

presently employ 25 men and women in a small State-inspected

meat packing facility. We do slaughter and complete processing

from farm to table as well as wholesaling and catering. We are located 25 miles from the Wisconsin border.

I am speaking on behalf of myself and the State-inspected processing plants across the country representing the American Association of Meat Processors and the Illinois Association of Meat

Processors. These organizations and I strongly ask and urge the

Senate bill and interstate shipment be favorably considered and

passed. This legislation will help smaller processors economically

and finally allow them to compete in free trade, which has been restricted through invisible barriers called State lines for too long.

There are presently 25 States that have State inspection and

they have State inspection because their State legislatures feel that

meat products within their States should be inspected so that the

consumer will have a wholesome meat product. The Federal system

does not require inspection for custom slaughtered products that

are the property of the local farmers and sold to his customers.

Currently, the Federal Government assists States with funding

for their programs and requires these States to recognize and follow USDA and FSIS regulations. If a State does not meet these requirements, then the USDA can intervene and may take over the

State’s program. This would then mean that Federal inspectors

would be required to inspect in those programs so that the products

may be sold.

Since this HACCP was installed, requiring the State inspection

systems for them to continue to get funding, I feel that States

should be awarded the opportunity to ship in interstate commerce

if they so desire. It would not be a program that everyone would

necessarily have to participate in but could be available for those

qualified and willing to follow the regulations set down by the

USDA and State officials.

Secretary Glickman was asked about interstate shipment at our

convention in Louisville, Kentucky, several years ago and he said

that it could not happen unless the HACCP system was implemented and in place. Now that system is in place and operating.

I have been asked why my plant never went Federal for inspection and there are several reasons. In the early years, in 1967

when the Wholesome Meat Act was enacted, we were busy with

doing custom processing. Over the years, this has changed. Now

there are fewer farms with livestock and the larger feeders direct

their livestock to larger packers away from our facilities. We also

felt that the Federal system did not want to hassle with small facilities due to the lack of personnel and necessary funding to pay

for added inspectors.
27

Today, we still wonder if the system wants small plants. Illinois

has nine State plants that have applied for Federal inspection and

12 more are in the process of looking into it and going Federal.

Currently, none of these have received a response from the circuit

supervisor, and that was as of last week. I even had a Federallyinspected plant operator tell me that his inspector told him he

wished this bill would pass so that they could give the smaller

plant back to the State. This would allow the Federal inspectors to

concentrate on the larger facilities.

Another reason is the method of communications the State uses

to solve problems. We do not have the pile of red tape to work

through to solve a problem. Just a few phone calls and the problem

can be solved. We also have heard of the horror stories that the

larger plants have for trying to get something solved on the Federal system and it can be a real task to accomplish something.

In our plant, we also process and inspect exotic animals. These

are inspected and can be shipped anywhere in the world and across

the State lines. However, beef, pork, and lamb are restricted by the

inspection system. Our exotics are inspected the same ways by the

same inspector and we just have never figured out why.

This is not a food safety issue. It is an economic issue concerning

small State-inspected operations and they need a chance to expand

our market base, move freely in interstate trade. The passage of

legislation will not lower the quality of inspection but will enhance

the quality of products available to the customer. We have customers waiting for our products but we cannot ship over that interstate fence and it is a bill that is really needed.

Once again, I ask you to look favorably upon this bill. It is needed, wanted, and now is the time for the processors in these States

to kind of get some compensation for their efforts. Please vote yes,

and I sure appreciate the opportunity to talk to you today.

The CHAIRMAN. Thank you very much, Mr. Eickman. We appreciate your testimony.

[The prepared statement of Mr. Eickman can be found in the appendix on page 63.]

Ms. Heikens.

STATEMENT OF JOLENE HEIKENS, TRIPLE T COUNTRY

MEATS, REPRESENTING THE AMERICAN ASSOCIATION OF

MEAT PROCESSORS, THE IOWA ASSOCIATION OF MEAT

PROCESSORS, AND 18 OTHER STATE MEAT PROCESSING ASSOCIATIONS, WELLSBURG, IA

Ms. HEIKENS. My name is Jolene Heikens and I am from

Wellsburg, Iowa. My husband and I own and operate Triple T

Country Meats. I am here today representing the Iowa Meat Processors Association and the American Association of Meat Processors.

Currently, State-inspected meat plants can only sell their products inside their own State. We feel our businesses are being discriminated against for no apparent reason. Last year, our business

had no choice but to turn down the largest beef order we have ever

received because we could not cross State lines. Is the consistency

there when I can sell a State-inspected buffalo, deer, ostrich, emu,
28

or elk all over the United States and the State-inspected beef and

pork have to be sold within the State?

What is so special about beef or pork that they get a mandatory

free inspection? I can literally watch beef be State-inspected the

exact same way as a buffalo or any of the above-mentioned animals

and they could be marketed through the United States. Why

should these animals be governed under different rules? Are we not

as concerned about products made from these animals as we are

with our beef and pork products?

Interstate shipment is not a food safety issue. This is about placing marketing restrictions on State plants who are enforcing Federal regulations. Our State has spent hours educating processors

with the help of Dr. Joe Cordray, an Iowa State University meat

specialist. The Iowa Department of Economic Development, the

Iowa Meat Processors Association, and Mike Mamminga are just a

few that have supported this effort to help implement HACCP.

Communication between plant owners and our State inspection

people have been a key component to the success of our State inspection program. The ease of communication between State inspection personnel and plant owners is something I probably did

not realize the benefits of or the importance until I was faced with

the frustration of wanting to expand. I had no choice but to look

at the Federal level because I had possible clientele out of State.

After 2-years of working on writing a business plan and applying

for several loans and grants, I came to the point of being ready to

begin building. So I called the Federal office in Des Moines and I

asked for an appointment to jointly look at our plans for our new

facility. I was told that would make them a consultant and they

were not allowed to do that. They would come after the plant had

been built and ready to open. Then I would be made aware of any

deficiencies that needed my attention. My goal here was to prevent

any problems that could arise after construction had become, and

I certainly do not want to be made aware of my deficiencies when

I am about ready to open a new facility.

I guess I am back to the ease of communication. I do not mean

easier terms of inspection purposes. I am talking about an inspection service that is available not just to regulate but who tries to

participate and provide direction.

We are running a market-driven business which the State inspection programs seem to have a much better understanding of

because they not only want to make sure our meat products are

safe to the consumer, State inspection is there to help and provide

answers and direction in a timely fashion.

In closing, I just simply cannot fathom why interstate shipment

should even be an issue. Our plants are enforcing Federal regulations and we have done everything that we have been mandated

to do. There should not have to be frustrating in wanting to expand

to small business, especially when my guidelines and regulations

are equal to, and in some cases better than those regulated in Federal facilities.

Therefore, I cannot find any valid reasons or laws that should

prevent interstate shipment of meat and poultry products. Thank

you for your time. And I am a Hawkeye and a Cyclone.

[Laughter.]
29

The CHAIRMAN. I understand.

[The prepared statement of Ms. Heikens can be found in the appendix on page 68.]

It is my privilege to introduce now a Hoosier, so it turns up in

the batting order.

[Laughter.]

I wanted to take this occasion of introducing Harry Pearson,

President of the Indiana Farm Bureau, to congratulate him on presiding over the publication of a remarkable history, 80-year history

of Indiana Farm Bureau, which we just received and enjoyed enormously. It is good to have you, Harry, and please testify.

STATEMENT OF HARRY PEARSON, PRESIDENT, INDIANA FARM

BUREAU, REPRESENTING THE AMERICAN FARM BUREAU

FEDERATION, INDIANAPOLIS, IN

Mr. PEARSON. Thank you very much, Chairman Lugar. It is certainly a pleasure to be here this morning and we appreciate you

holding this hearing. I tried to summarize my comments a little bit

in comparison to those that have been presented.

I am Harry Pearson, the President of the Indiana Farm Bureau,

and I live on a farm and farm in partnership with my brother and

our family. The American Farm Bureau certainly appreciates the

opportunity to make comments regarding the interstate shipment

of State-inspected meat. This is an issue of great importance to our

farmers and ranchers all across the country.

We strongly support efforts to align and implement meat and

poultry inspection laws that would allow these products under both

Federal and State programs to be distributed in interstate commerce. The mission of the Food Safety Inspection Service is to provide appropriate regulatory safeguards and services to ensure that

all meat, lamb, and poultry products for interstate shipment or foreign commerce meet food safety standards.

As State and Federal budgets become more and more limited, it

seems that the time is right for increased coordination between

State and Federal meat inspection programs. Many times, the

products inspected in a State-inspected facility are small-volume

specialty products, and quite often, those items prepared by the

small operators are not always economically feasible for large-volume operators. The ability to ship interstate could benefit livestock

producers, small processors, and consumers, and at the same time

stimulate economic development in rural communities.

As has been mentioned earlier, the four major packers account

for more than 80-percent of the fed cattle slaughter. Fifteen-years

ago, large packing houses only accounted for about 36-percent of

that volume. Farm Bureau members believe that competitive pricing activities of the livestock industry have been reduced due to the

high concentration of processing by the four major packers. Allowing State-inspected meats from small and mid-sized processing

plants to move interstate gives them additional opportunities to expand their business.

In 1996, the USDA Packer Concentration Panel determined that

allowing interstate shipment of State-inspected meats would provide additional competition in the marketplace. The Farm Bureau

has worked diligently for the passage of NAFTA and GATT and
30

that same type of effort is being applied toward the passage of permanent normal trade relations with China. World trade opportunities also increase our opportunities as we open new markets.

We strongly believe in food safety and maintaining the highest

level of consumer confidence in our food safety. As has already

been mentioned, however, this debate is not about food safety but

is about our own U.S. processors having the access to our U.S. markets on terms that are no more restrictive than those that foreign

exporters must meet.

Several years ago, we supported and worked closely with Congress and the administration to pass the HACCP system into law.

HACCP is now fully implemented, with every meat processing

plant in this country operating under this scientifically-based process. It is now time to further the coordination in meat inspection

and to incorporate interstate commerce for State-inspected meats.

There is support from several individuals in our State regarding

S. 1988 and they are all supportive of its passage. These individuals include our State veterinarian, Dr. Brett Marsh, representatives from the State Board of Animal Health, Dr. Paul Dieterlin,

Administrator of the Indiana Meat Inspection Program, and Mr.

Jim Rihm, President of the Indiana Meat Packers and Processors

Association. Indiana has 101 State-inspected plants and Mr. Rihm

believes this legislation will help the small packer to better compete in the specialty meats products market.

I talked to a producer, a young producer by the name of Greg

Gunther, who also served on the Small Farm Commission that was

appointed by Secretary Glickman. He lives eight miles from a State

line and he has developed a niche market with specialty products,

but he has to go out of State to a Federally-inspected plant to get

his hogs processed and then take those to Chicago. He also does

some work with the State-inspected plant but cannot move those

products across the State lines and estimated that, conservatively,

that it has cost him about $20,000 in income just because he has

to go out of State to get that inspection done.

The American Farm Bureau Federation encourages Congress to

support and pass S. 1988 and allow the Food and Safety Inspection

Service to take the necessary steps to facilitate the movement of

State-inspected meats across State lines.

Mr. Chairman, we appreciate the opportunity to appear before

you this morning and make comments.

The CHAIRMAN. Thank you very much, Mr. Pearson.

[The prepared statement of Mr. Pearson can be found in the appendix on page 70.]

Mr. Nielson.

STATEMENT OF RICHARD T. NIELSON, PRESIDENT, UTAH

CATTLEMEN’S ASSOCIATION, REPRESENTING THE NATIONAL CATTLEMEN’S BEEF ASSOCIATION, SALT LAKE CITY,

UT

Mr. NIELSON. Good morning, Mr. Chairman. Thank you for the

invitation to be here today and the opportunity to present this testimony. I am Richard B. Nielson and I am the President of the

Utah Cattlemen’s Association and a board member of the National
31

Cattlemen’s Beef Association. I come from a small farm in Central

Utah that I operate with my brother and my son.

Interstate shipment of State-inspected meat is one of the top priorities of Utah Cattlemen’s Association, the National Cattlemen’s

Beef Association, and the other producer groups represented here

today. Under current law, State-inspected plants cannot ship beef,

pork, lamb, or poultry across State lines. This restriction limits the

ability of these plants to expand marketing opportunities and limits competition for market animals. Current law also applies unequally to different species in regards to State inspection programs.

For example, based on information provided by the Agriculture

Committee, there is no restriction on the interstate shipment of

State-inspected bison, venison, pheasant, and ostrich.

This bill would expand interstate shipment of State-inspected

meat to include beef, pork, lamb, and poultry. Meat inspection programs would enforce the same inspection laws and regulations enforced under the Federal program to create a seamless national inspection system with the States retaining the right to impose additional inspection requirements. Products inspected under this authority would be eligible for interstate shipment, export, and for

use in products destined for export.

I would like to share several reasons and anecdotes as to why

this legislation is justified and why the ban on interstate shipment

of State-inspected meat should be eliminated.

Elimination of the ban is good for small businesses. State-inspected plants are typically family owned and operated small businesses whose growth is limited to the markets in their own State.

Because their markets are limited, so is their ability to compete

with large corporate processors who have a worldwide market. Removing the ban would give these businesses a substantial boost in

market opportunities for their products and create additional competition in the live cattle market, which is just one facet in dealing

with the issue of packer concentration.

The current ban actually favors imported meat over U.S. produced State-inspected beef. While State-inspected products are restricted from interstate commerce, meat from over 30 countries

that is not directly inspected by USDA can be sold anywhere in the

United States. This legislation will recognize State inspection systems that are the same as Federal requirements and allow Stateinspected products to compete on an equal footing with imported

products.

I would like to share with you a couple of examples of how this

ban has gone awry. Tyler Meat Company of Toledo, Ohio, sold meat

for 10-years to the River Cafe located on the Michigan-Ohio border.

USDA ordered Tyler to stop sales to the cafe even though its kitchen was in Ohio. The cafe dining area is located in Michigan. Thus,

the sale of Tyler meat was considered interstate commerce.

Another example is the Jackson Brothers Food Locker in Post,

Texas. Jackson Brothers supplied beef jerky to support U.S. troops

during Operation Desert Storm. They could ship their product halfway around the world to support U.S. troops, but they cannot send

their product 80 miles west into New Mexico. Not only are they

limited from growing their business, they are prohibited from selling their product to former Desert Storm servicemen and women
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who came to like their product. It is very important to note that

Jackson Brothers met the standards set by the State of Texas Department of Health Meat Inspection Service, one of the best programs in the country. The HACCP plan for their plant was in place

in November of 1999, 3 months before it was required for plants

of their size.

To summarize, this legislation will remove a barrier that impedes competition, stifles growth, and limits the marketing opportunities for U.S. beef. Passage of this legislation will create a tremendous opportunity for State-inspected plants and subsequently

for cattle producers who market their livestock to State-inspected

plants.

Our goal is a dynamic and profitable beef industry. With the

growth in technology and the Internet, the world is truly our market. We have recently been informed that other groups opposing

this particular bill have offered to compromise. We look forward to

working with them and getting as much support for this bill as we

can.

Mr. Chairman, we urge you to mark up this legislation in your

committee as soon as possible and report it to the Senate floor. I

want the beef industry to have the opportunity to grow by meeting

the needs of our consumer and not be stifled by laws that have outgrown their use. Thank you very much.

The CHAIRMAN. Thank you very much, Mr. Nielson, for your testimony.

[The prepared statement of Mr. Nielson can be found in the appendix on page 74.]

It is a pleasure always to welcome Carol Tucker Foreman. We

have talked about the history of this issue and Carol Tucker Foreman, as you know, served in the administration of President

Carter. I can remember her testimony, not necessarily on this

issue, but she may very well have discussed it 20-some years ago.

Ms. FOREMAN. I am really sorry to say I did.

The CHAIRMAN. Nevertheless, we look forward to your opinion

today. Please continue.

STATEMENT OF CAROL TUCKER FOREMAN DISTINGUISHED

FELLOW AND DIRECTOR OF THE FOOD POLICY INSTITUTE

CONSUMER FEDERATION OF AMERICA, WASHINGTON, DC.

Ms. FOREMAN. Thank you, Sir. I am here representing the Consumer Federation of America, and as you pointed out, I served as

Assistant Secretary of Agriculture with responsibility for meat,

poultry, and egg inspection. I am also serving now as a member of

the National Advisory Committee on Meat and Poultry Inspection.

All three of the consumer representatives on the Advisory Committee have endorsed S. 1988. The legislation would ensure that all

meat and poultry products produced in the United States are inspected under a seamless system constituting a basic set of public

health-based requirements. It would also eliminate the prohibition

on shipping that meat in interstate or international commerce.

The consumer interest in S. 1988 is clear. If passed in its present

form, this bill could help make meat and poultry products safer

and contribute to improved public health. Pathogens do not recognize distinctions between Federal and State systems or large and
33

small plants. Contaminated meat is a public health threat regardless of its source and the risk of contamination should be reduced

wherever they occur.

According to the Centers for Disease Control, USDA’s new public

health-based pathogen reduction Hazard Analysis and Critical Control Point program is successfully reducing pathogen contamination

and foodborne illness. All meat and poultry plants, whether inspected by Federal or State personnel, should meet those same

minimum Federal requirements. Although theoretically equal to

Federal standards, State-inspected plants have too frequently operated at a lower level. The General Accounting Office and USDA’s

Office of Inspector General have both criticized the quality of State

inspection programs. In 1996, the Wall Street Journal detailed the

problems with Florida’s State inspection system and quoted the

head of the State inspection program acknowledging that State inspectors are more lenient on inspection than Federal inspectors

would be.

Under S. 1988, State meat and poultry inspectors would enforce

Federal standards. Federal inspectors would perform salmonella

testing. USDA would also conduct annual compliance audits of

State inspection programs. In return, the restrictions on shipment

of these products would be appropriately removed.

Frankly, Mr. Chairman, consumer advocates would probably prefer a single Federal system rather than what is being suggested

here today. We all have to rely on separate systems to inspect toys

or airplanes or cars. We are, however, prepared to accept this legislation because we think it does set a standard for human health

protection. We will have to oppose the legislation if it is altered in

a manner that undercuts the public health standards.

In addition, we will be forced to oppose S. 1988 if USDA for any

reason restricts its program for pathogen reduction and salmonella

testing that is so basic to the new system. S. 1988 articulates

USDA’s ability to enforce the pathogen reduction standards in

State-inspected plants. In the absence of salmonella testing, we

just would not be able to judge whether State-inspected meat really

is as clean and safe as Federally-inspected meat. That is why we

can accept this bill now. The system has changed.

Under USDA FSIS regulations, each company gets to establish

its own HACCP plan. In the absence of a Federal standard based

on public health protection, that is the salmonella standard, each

company would be free to establish a pathogen level based solely

on its own preferences for quality and safety.

All meat and poultry products bear the seal of the U.S. Department of Agriculture. Consumers assume that mark means the

product meets a standard based on public health, not marketing

convenience. The salmonella standard is not unreasonable or unworkable. Over 90-percent of the companies are complying now.

The success of the program is reducing foodborne pathogens and

illness. It also improves public confidence in the meat supply.

Last year, beef consumption increased to the highest level in a

number of years, in part because of reports that ground beef is

safer than it used to be. Eliminating the salmonella performance

standards and testing would endanger public health. It would also

threaten public confidence in the meat supply. It would almost
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surely diminish both the domestic and international market for

American meat and poultry. Eliminating that salmonella standard

and testing would be both bad public policy and bad business.

Thank you.

The CHAIRMAN. Thank you very much, Ms. Foreman.

[The prepared statement of Ms. Foreman can be found in the appendix on page 77.]

It is a pleasure always to have Patrick Boyle, the President and

CEO of the American Meat Institute. We look forward to your testimony, Mr. Boyle.

STATEMENT OF PATRICK BOYLE, PRESIDENT AND CEO,

AMERICAN MEAT INSTITUTE, ARLINGTON, VA

Mr. BOYLE. Thank you very much, Mr. Chairman. It is always

a pleasure to appear before this committee.

AMI has long opposed a blanket lifting of the current prohibition

against interstate shipment of State-inspected meat and poultry.

This policy stems from our firm belief in the need for a single uniform system for oversight of this nation’s meat and poultry industry, whether that system is administered by USDA or by State inspection programs in the State Departments of Agriculture.

Currently, we believe there are actually 26 different meat and

poultry inspection programs in the U.S., one Federal program covering 6,000 plants in 50 States plus 25 different State programs

covering an additional 3,000 plants. AMI would like to see a single

food safety oversight program for all 9,000 of these plants in all 50

States and would support a bill that achieves that objective.

This desire for a uniform system was also in the minds of those

who cosponsor S. 1988 and in the minds of the Department of Agriculture, which developed a white paper in both 1998 and 1999.

Both documents outline the elements necessary for creating a more

uniform system than we have in place today.

I believe one clear outcome of the many discussions and public

hearings held on this issue over the past 4-years, at least the past

4-years, is the strong message that greater uniformity is required

before we can contemplate interstate shipment of State-inspected

meat and poultry products. While AMI commends Senators Hatch

and Daschle and their cosponsors for introducing the bill, AMI

member companies remain concerned about various provisions of

the bill, all of which, by the way, fall short of achieving national

uniformity.

For example, to create a truly uniform system, AMI members believe that the current bill must incorporate references to the many

FSIS notices, directives, and other policy memoranda that, while

not Federal regulations, they do constitute the day-to-day details of

the system under which Federal plants currently operate. To be

truly uniform, State plants must meet these same requirements

and the bill should explicitly state so, especially since USDA testified earlier today in response to one of your questions, Mr. Chairman, that is indeed their intent.

Also to be truly uniform, we believe States should not be permitted to set regulatory requirements that are different from or in

addition to the Federal requirements. Every plant, Federal or
35

State-inspected, should be subject to the same identical requirements.

Also, national uniformity should also be exercised with respect to

the thresholds for entry into a State inspection program. The current bill would let each of the 25 States set its own threshold. AMI

believes there should be a uniform standard of eligibility for a

plant to enter a State inspection program.

At this time, AMI remains opposed to S. 1988 unless these and

other areas can be addressed. In that regard, however, I am

pleased to say that we have had some very productive discussions

with officials from NASDA, including Commissioner Dailey, prior to

this hearing today, and based upon those conversations, I am hopeful that we will be able to work with them, with this committee,

Mr. Chairman, the sponsors of the bill, and the Department of Agriculture and the other interested parties to achieve a consensus

bill, a true consensus bill which replaces the 26 different inspection

systems with a single uniform meat and poultry inspection system

for all of the 9,000 plants in this country. Thank you very much.

The CHAIRMAN. Thank you very much, Mr. Boyle, for your testimony.

[The prepared statement of Mr. Boyle can be found in the appendix on page 82.]

Before I ask questions of the panel, let me just indicate that I

have asked the Agriculture Committee staff to convene a meeting

next week of the major parties involved, all of which are represented here today and maybe some others who may have been

stimulated by the hearing, to try to work through differences that

may be here. Some of these are apparent from the testimony you

have given, but there also is a spirit, at least that I sense, of people

already convening and conversing and coming reasonably close.

I never want to predict in advance consensus before it occurs,

and this committee attempts to obtain that so that we have the

strongest support of our committee members when we go to the

floor and have some prospects for success of the bills that we report, but I do sense that there is a constructive spirit here. It is

one that I would like to promote, and so I simply mention that as

early as next week, we will be coming to grips really with the

issues that have been developed today, the nuances some of you

have mentioned. Some of you have supported the bill with reservations and suggested if some things happen, you will not support it,

and others have suggested that you are still attempting to come to

consensus.

Let me just ask for a moment, what barriers hinder State-inspected plants from shifting to Federal inspections now? Are there

barriers that we ought to be considering that are out there that

make a difference as we look at this legislation, or is this a significant factor? Yes, Mr. Dailey?

Mr. DAILEY. Mr. Chairman, I think there are three reasons that

we hear people saying they do not want to switch to Federal. One

is facilities. Many times the USDA, when they look at the engineering and design plans, as you heard here, they would require something that does not relate to food safety. For example, many of the

old plants and even the Federal plants that were grandfathered in

had three-inch drain tiles. Now they have to have four-inch drain
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tiles. It is really not a food safety issue, but it is a very expensive

item if you have to switch to do that.

Another issue is the communications and bureaucracy. People indicate, if I have to deal with a bureaucracy, I would rather deal

with a bureaucracy in Indianapolis or Columbus rather than Washington, DC.

The third area, and all of these relate to economics, is the overtime pay. As I mentioned, 8 hours a day is provided free 40 days

a week [sic], but if it happens to be a holiday, if it happens to be

a weekend, and we do maintain a great degree of flexibility with

our local plants, then they are required to pay much more in per

hour charge than what they would at the State level.

The CHAIRMAN. I think those are important distinctions. Does

anyone else want to add to that part of the record?

[No response.]

Let me ask, then, a concern that has been raised is the need for

national uniformity with the Federal inspection system and two

specific points have been mentioned, whether States should be able

to set regulatory requirements and whether States should be allowed to determine what size plants may participate in a State inspection program. Does anyone have a comment on those points?

Mr. BOYLE. I addressed those two in my testimony, Mr. Chairman, and just to reiterate, it is our view if we are going to have

a truly uniform system that the State requirements should match

the Federal requirements and vice versa. Allowing the States to

have authority to set additional requirements on its face contradicts what I think is the overall objective here of national uniformity.

The CHAIRMAN. I recall your making those points and I appreciate your mentioning them. What is the response of other members of the panel? For instance, on the second point, this sometimes

arises in issues before this committee. The States come in and say,

well, we are not satisfied with the level of what the Federal people

are leaving. We have some constituents who want something extra

special on top of this. So then many people from the food industry

come in and say, well, sort of like the Grocery Manufacturers

amendment comes up from time to time and the idea for preemptive Federal authority so that you do not have a piling on of additional authorities in an interstate system of distribution. Is that

applicable to this problem, Ms. Foreman?

Ms. FOREMAN. I am going to respond here on promoting what the

Department of Agriculture said this morning in their testimony,

that none of these additional requirements could be imposed on

product coming into this State, any particular State, as opposed to

those originating in the State and under State inspection. So I do

not think you do have that problem of piling on. It is particularly

what a State wants to accomplish for itself. Consumer advocates always believe that standards are minimum and that people who

want to add to them should be allowed to do so.

The CHAIRMAN. Is that everybody else’s understanding of how

this would work out?

Mr. DAILEY. Mr. Chairman, I do not want to monopolize the

microphone, but let me say that we have been doing salmonella

testing for 12-years, long before the USDA mandated we do sal-
37

monella testing. Last year in Ohio, we had 15-human and fetal

deaths from listeria monocytogenes in meat products that happened to be Federally inspected. I think it is—and there may be

new bacteria or different pathogens that we do not know about in

the future. But our goal is to develop this seamless system and I

think we ought to work towards that.

The CHAIRMAN. Let me ask, on the affirmative side, the suggestion has been made if we move toward this legislation, it will increase sales, that this will be good for the business. Has anybody

done a study or have any idea of quantifying how much good? In

other words, is this a philosophical distinction without any commercial effect or do you anticipate that volume and profits will increase? Yes, Mr. Nielson?

Mr. NIELSON. Mr. Chairman, I would like to respond to that in

what it would do for cattle producers in the country. If we take an

animal to a livestock auction and there are two or three small

plant owners there to bid on that animal as well as some of the

big operators, my cow brings more money. So it is an economic benefit to those of us who produce cattle and animals, and that is the

group I represent. But I can assure you, as a person who goes to

an auction, going every week, I know how the system works and

competition is where it is at, Sir.

The CHAIRMAN. That consideration comes before the Committee

frequently these days and so your testimony is that it enhances the

markets available to cattle producers.

Mr. NIELSON. Certainly.

The CHAIRMAN. Mr. Pearson.

Mr. PEARSON. Mr. Chairman, I talked to three or four small producers that are looking at ways to develop niche markets with

their animals from the farm, and I mentioned the one, but normally, they are going to be able to align themselves with a smaller

processor much more easily than they can with a Federally-inspected plant, and one of them in particular had been the Federal

plant and that plant closed down and basically put him out of business because he could not get at point anyplace else and cross

State lines.

The other one I mentioned, he is taking product into Chicago

that is costing him considerably more because he has to go out of

State to a Federally-inspected plant, which is still twice as far

away from him as a small State-inspected plant. So for the people

that are really looking at ways to develop branded products, and

we see more individuals, small producers, trying to do that, they

can do that more easily with the small plants that are close to

them and even have a branded product that they are looking for

to really track that product all the way to their final consumer.

The CHAIRMAN. I thank each one of you for your individual testimony. As I mentioned before, your full statements will be a part

of the record, but the oral statements you have made, I think have

been very helpful in delineating the issues, and your spirit of being

willing to continue to converse likewise is very encouraging. We

will try to proceed with that good will in mind with the meetings

that commence next week.

We thank you for coming today and participating in this hearing

and the hearing is now adjourned.
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[Whereupon, at 12:05 p.m., the Committee was adjourned.]
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