[Senate Hearing 108-606]
[From the U.S. Government Publishing Office]
S. Hrg. 108-606
DEVELOPMENT OF A NATIONAL ANIMAL IDENTIFICATION PLAN
=======================================================================
HEARING
before the
SUBCOMMITTEE ON MARKETING, INSPECTION, AND PRODUCT PROMOTION
of the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
MARCH 4, 2004
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
______
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
THAD COCHRAN, Mississippi, Chairman
RICHARD G. LUGAR, Indiana TOM HARKIN, Iowa
MITCH McCONNELL, Kentucky PATRICK J. LEAHY, Vermont
PAT ROBERTS, Kansas KENT CONRAD, North Dakota
PETER G. FITZGERALD, Illinois THOMAS A. DASCHLE, South Dakota
SAXBY CHAMBLISS, Georgia MAX BAUCUS, Montana
NORM COLEMAN, Minnesota BLANCHE L. LINCOLN, Arkansas
MICHEAL D. CRAPO, Idaho ZELL MILLER, Georgia
JAMES M. TALENT, Missouri DEBBIE A. STABENOW, Michigan
ELIZABETH DOLE, North Carolina E. BENJAMIN NELSON, Nebraska
CHARLES E. GRASSLEY, Iowa MARK DAYTON, Minnesota
Hunt Shipman, Majority Staff Director
David L. Johnson, Majority Chief Counsel
Lance Kotschwar, Majority General Counsel
Robert E. Sturm, Chief Clerk
Mark Halverson, Minority Staff Director
(ii)
C O N T E N T S
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Page
Hearing(s):
Development of a National Animal Identification Plan............. 01
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Thursday, March 4, 2004
STATEMENTS PRESENTED BY SENATORS
Talent, Hon. James, a U.S. Senator from Missouri, Chairman,
Subcommittee on Marketing, Inspection, and Product Production.. 01
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member,
Committee on Agriculture, Nutrition, and Forestry.............. 07
Baucus, Hon. Max, a U.S. Senator from Montana.................... 08
Nelson, Hon. Ben, a U.S. Senator from Nebraska................... 02
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WITNESSES
Hawks, Hon. Bill, Under Secretary, Department of Agriculture,
Marketing and Regulatory Programs, Washington, DC.............. 04
John, Mike, Vice President, National Cattlemen's Beef
Association, Columbia, Missouri................................ 29
Lehfeldt, Bob, American Sheep Industry Association, Lavina,
Montana........................................................ 34
Marsh, Bret, First Vice President, U.S. Animal Health
Association,
Indianapolis, Indiana.......................................... 16
Ostberg, Ronald, Montana Farmers Union Member, Scobey, Montana... 35
Philippi, Joy, National Pork Producers Council, Bruning, Nebraska 31
Schmitz-Hsu, Fritz, Former CEO, Tierverkehrsdatenbank AG,
Switzerland.................................................... 21
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APPENDIX
Prepared Statements:
Talent, Hon. James............................................... 44
Hawks, Hon. Bill............................................. 49
John, Mike................................................... 77
Lehfeldt, Bob................................................ 93
Marsh, Bret.................................................. 67
Nelson, Hon. Ben............................................. 48
Ostberg, Ronald.............................................. 96
Philippi, Joy................................................ 83
Schmitz-Hsu, Fritz........................................... 71
Document(s) Submitted for the Record:
Roberts, Hon. Pat............................................ 100
Questions and Answers Submitted for the Record:
Harkin, Hon. Tom................................................. 102
DEVELOPMENT OF A NATIONAL ANIMAL IDENTIFICATION PLAN
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THURSDAY, MARCH 4, 2004
U.S. Senate,
Subcommittee on Marketing, Inspection, and Product
Promotion, of the Committee on Agriculture, Nutrition and
Forestry,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:05 p.m. in
room SH-216, Hart Senate Office Building, Hon. James Talent,
[Chairman of the Subcommittee], presiding.
Present: Senators Talent, Harkin, Baucus, and Nelson.
STATEMENT OF HON. JAMES TALENT, A U.S. SENATOR FROM MISSOURI,
CHAIRMAN, SUBCOMMITTEE ON MARKETING,
INSPECTION, AND PRODUCT PROMOTION, COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
Senator Talent. All right; we will convene the subcommittee
hearing.
I want to thank everyone for coming to the hearing to
discuss this important subject, the development of a national
identification program. I do not need to tell people in this
room how important the issue is. I do want to start by saying
the United States has the safest food supply in the world. I
have said that many times before and will continue to say it on
occasions like this. It is still true today.
A national animal identification plan is not a new idea; in
fact, over the last few years over 75 livestock-oriented
organizations have been working on a framework for a national
system. The finding of the imported dairy cow with BSE on
December 23 has accelerated the consideration of such a system.
Shortly after the announcement of that, Secretary Veneman
testified before the full Committee that she was committed to
developing a national program. Additionally she told the
Committee that USDA had sufficient statutory authority to
establish a mandatory or voluntary national ID plan through the
Animal Health Protection Act. I am pleased with her and the
Department's timely response and attention to this issue.
We have assembled a great panel of experts today. Each one
has an interesting perspective on this issue as well as a depth
of knowledge on the animal industry in general. I look forward
to hearing from each of them. I believe, and I do not want to
put words in their mouths, but I believe each witness is going
to agree that a reliable national ID system in the United
States is not something that is going to happen overnight. You
cannot turn on a national animal ID program like a switch.
Owing to the large number of animals and diverse production
systems in the United States, a national identification plan
will not be simple to develop, and successful implementation of
an ID system will require significant resources in both time
and money. As an example, there are 68,000 cattlemen in
Missouri. We are proud of each and every one of them. Each of
these producers will need a premise identification number in an
ID system, not to mention the sale barns, packing plants and
veterinarians.
Distributing a premise identification number to each of
these producers will take several weeks or more, and that is
just Missouri. There are 1.2 million cattlemen in the United
States, which means that we are faced with a major task in
developing and implementing a national ID system.
We need program that quickly traces animals backward and
forward but is not costly or burdensome to producers regardless
of whether it is a small herd of 30 animals on 80 acres in
Missouri or a herd of 1,000 with a grazing allotment in the
West. Right now, the United States has an opportunity to build
a plan that will strengthen our animal health capabilities as
well as consumer confidence if we do it right.
I am pleased that the Secretary considers this an important
subject and believe she has the authority she needs to
implement it. I have spent some time working on this issue with
producers in Missouri, and they recognize the need for a
national animal ID program as it relates to animal health, but
they still have very valid concerns and questions regarding
privacy, cost and impact on the way animals are marketed in the
United States. I hope we can address some of these concerns
today.
We are going to start with the Undersecretary for Marketing
and Regulatory Programs, Bill Hawks, who has been a frequent
witness before the committee.
It is great to have you with us. Not only does Secretary
Hawks have responsibility for APHIS, the agency which will be
involved with a national ID program, but he has also worked in
the cattle business, and he knows first hand how an ID program
would impact our farmers and ranchers.
I also want to mention the piece of good news and
congratulate the Secretary for his good work in the
negotiations with Mexico. I am pleased to hear they are
reopening the border. That is great news for the producers, and
I am hopeful that our other trading partners will soon follow
suit.
[The prepared statement of Senator Talent can be found in
the appendix on page 44.]
I want to recognize Senator Nelson for an opening statement
and also recognize his great work on this issue.
Senator Nelson.
STATEMENT OF HON. BEN NELSON, A U.S. SENATOR FROM NEBRASKA
Senator Nelson. Well, thank you very much, Mr. Chairman,
and I thank you for holding this very important hearing. I look
forward to the panels' comments. Unfortunately I am going to
take leave of time for a minute and co-chair a Personnel
Committee of the Senate Armed Services Committee hearing. I
have perfected a lot of things but being in two places at once
is not one of them yet. I am optimistic.
Senator Talent. Senator, there will probably be a 30-second
ad in your next campaign complaining that you have not yet
figured out how to be in two places at one time.
[Laughter.]
Senator Nelson. Well, thank you and thank the panel for
coming to the Subcommittee today to offer your views on a
national animal identification program, and because of the
timeliness of this issue, I appreciate your collective
commitment to appear before us today.
Work on a national animal ID program has been progressing
through its early stages of development for the last several
years, with the issue being thrust forth in the public radar
due to the first detection of BSE in the United States last
December. Although I wish we were addressing this matter under
different circumstances, I do believe it is critical that we
use the momentum for change generated by the BSE case to move
forward in working through the various concerns surrounding an
animal ID program with one goal in mind: full implementation of
a quality program at the earliest possible date.
Let me emphasize that I do not want to cut corners, because
that will only lead to problems down the road. As our producers
and ranchers languish under closed export markets, there is a
costly lesson to be learned. Therefore, we must move without
delay to create a program that will play a contributing role in
improving food safety and animal health while at the same time
providing a valuable tool in protecting the livestock industry
from foreign animal disease outbreaks.
Today, I will be particularly interested in comments from
our panelists on three topics. First, I would like to know the
panelists' views on where we will find the funding for this
program. USAIP has estimated that once the ID program is fully
in place, costs could approach $122 million annually, with ID
tags accounting for nearly $100 million of that amount. The
National Farm Animal Identification and Records Program, FAIR,
and another USDA-funded ID pilot program estimates that its
program could cost $540 million over a 5-year period.
Currently, USDA has $33 million in the fiscal year 2005
budget to accelerate development of an animal ID system. This
is only a fraction of the total cost. In order to alleviate the
concerns of producers, especially smaller producers, that they
will be majority of the development and annual management costs
of the program, we have to find an adequate cost share balance
between the livestock industry and the public.
Second, as you know, producers are concerned about public
scrutiny and Government intrusion of their records. In general,
there is a strong support for a program where only the
appropriate state and Federal officials would have access to
the animal ID information through the performance of their
duties, with ample safeguards to protect that information from
any damaging effects caused by public disclosure.
Therefore I am interested in the panelists' views on the
best way to protect private and proprietary information with a
national animal ID system but also in the context of the
public's right in many cases and always its desire to know.
Finally I believe that in conjunction with the implementation
of an animal ID program, we should restore the original
September 2, 2004, deadline for mandatory country-of-origin
labeling as directed in the Farm Bill. As you move farther away
from the Beltway, the support of COOL grows like a wildfire on
the prairie, and I have personally experienced this wave of
sentiment in my state.
In my opinion, I find that both this animal ID probably and
COOL go hand-in-hand. and I would appreciate the panel
addressing this issue as well.
I believe today's hearing is not only appropriate and
necessary but should be considered a sign of this subcommittee
and the larger Ag Committee's dedication to finding a positive
outcome in the debate over animal ID protections.
I commend your hard work and dedication to this issue, and
I look forward, Mr. Chairman, to a continued level of
coordination and communication as we work with the USDA,
Congress and the various working groups joining together to
find a resolution to this matter that works for everyone.
Thank you very much.
[The prepared statement of Senator Nelson can be found in
the appendix on page 46.]
Senator Talent. Well, I am grateful to the Senator for his
comments, and I understand entirely if he has to go to another
hearing. Staff tells me, Ben, that we seem to have picked the
busiest afternoon so far in this year for this subcommittee
hearing.
Senator Nelson. I shall return.
Senator Talent. OK; great.
Senator Talent. We will go right to our first panel, which
consists of the Hon. Bill Hawks, who is Under Secretary in the
Department of Agriculture for Marketing and Regulatory Programs
and, as such, is a very busy man, and so we are grateful to
have him here with us today.
Mr. Hawks, if you would give us your statement.
STATEMENT OF HON. BILL HAWKS, UNDER SECRETARY,
DEPARTMENT OF AGRICULTURE, MARKETING AND
REGULATORY PROGRAMS, WASHINGTON, DC
Mr. Hawks. Yes, sure. Thank you, Mr. Chairman and Senator
Nelson.
It is certainly a pleasure to be here with you today. The
advent of the increased animal disease outbreak around the
world over the past decade, especially the recent BSE-positive
cow found in Washington state have intensified the public
interest in developing a national animal identification program
for the purpose of protecting animal health.
While there is currently no national animal identification
system in the United States for all animals of a given species,
some segments of certain species are required to be identified
as part of a current program disease eradication activities. In
addition, some significant regional voluntary identification
programs are in place, and others are currently being developed
and tested.
The investments made by USDA in identification projects as
well as private sector investment in these and other projects
have generated base and experience that provide a platform on
which to build a national system. As an example, the National
Farm Animal Identification Records, or FAIR, program is an
animal identification program supported by USDA's APHIS and the
Holstein Association, USA, Incorporated, a nonprofit breed
registry organization led by dairy producers.
APHIS also provided funding for the Wisconsin Livestock
Identification Consortium Initiative, an industry-managed and
controlled information system. In addition to programs directly
funded by USDA, a more comprehensive U.S. animal identification
plan has been developed by an industry-state-Federal
partnership including more than 100 animal industry and state
and Federal Government professionals representing more than 70
associations.
This plan is the United States Animal Identification Plan,
or USAIP. While implementation details of the plan are still
being worked on, the USAIP describes an information system and
infrastructure to enable the identification of all animals and
premises potentially exposed to an animal with a disease of
concern within a 48-hour period.
Species-specific working groups are currently working with
the framework of the USAIP to develop animal identification
implementation details for those breeds and species. Governance
of USAIP is planned as a joint Federal-state responsibility,
with oversight and input from industry. The USAIP notes that
costs would be substantial and recommended both public and
private funding to cover the cost of the program.
The United States is not alone in developing animal
identification systems. Most developed countries have either
already adopted or are planning to adopt some system of
identification and trace the movement of livestock within their
borders. The European Union has adopted the most comprehensive
program of animal identification and tracking. The Canadian
Cattle Identification Program is an industry-led initiative to
promote beef consumption through assurance of efficient
traceback and containment of serious animal health and food
safety problems. Australia has also developed a national
livestock identification scheme for identifying and tracing
livestock.
There are a number of important lessons that have been
learned from the work that has been ongoing within the United
States and the rest of the world. First, it is critically
important to get support from the industry as we shape an
animal identification system for the United States. Second,
there is no one-size-fits-all technology. Third, both public
and private funding will be required for any system to become
fully operational.
We believe that in designing a U.S. system, important
factors to consider are the diversity, the complexity of our
animal industries, and the lack of experience with animal
identification for a large number of producers. This extreme
diversity and complexity make immediate scaling up of a current
project that has been funded by USDA difficult if not
impossible until a thorough evaluation of those projects for
potential use on a national scale and for a significantly
broader scope than initially tested can be conducted.
In addition to the large number of animals, producers and
nonproducers that must be accounted for in a national system,
there is also a decided lack of experience with the individual
animal identification in the United States, and where it
exists, the systems are quite diverse. A large number of
producers, especially calf operators, do not currently
individually identify their animals. Thus, a major component of
a national system will be educating livestock producers and
processors as to how the system would operate and their
responsibilities. To meet the educational needs of the
livestock producer and processor, USDA will need to work in
concert with states, organizations and other stakeholders.
Another issue is the authority of USDA to implement a
national identification system. The Animal Health Protection
Act enabled the Secretary to prevent, detect, control,
eradicate diseases and pests of animals in order to protect
animal health, the health and welfare of people, the economic
interests of livestock and related interests, the environment
and the interstate and foreign commerce in animals and other
articles.
The Animal Health Protection Act gives the Secretary broad
range of authorities. We believe the provisions of the Animal
Health Protection Act provide the Secretary with ample
authority to establish and implement either a mandatory or
voluntary system of animal identification.
The National Animal Identification System would provide
information on animal numbers by location and the movement of
those animals over their lifespan. The potential disclosure of
individual producers and processing plant information give rise
to concerns about the accessibility and confidentiality of
individual records contained in the national animal
identification base base. Federal legislation addressing the
confidentiality and accessibility of information in a national
identification base base may be needed to address the concerns
of livestock producers and processors and expedite the
implementation of a national identification system.
Our goal is to create an effective, uniform, consistent and
efficient national system. We believe this goal can be achieved
by adhering to several key objectives. First, the system should
allow producers, to the extent possible, the flexibility to use
the current systems or adapt new ones.
Second, this flexibility can best be achieved by having a
system that is technology-neutral so that all existing forms of
effective technology and new forms of technologies maybe
developed in the future may be utilized.
Third, the national identification system should use and
buildupon the excellent base standards developed by the USAIP.
Fourth, the system must not preclude producers from being
able to use it with production management systems that respond
to market initiatives.
Fifth, the architecture for the national animal
identification system must be designed so that the system does
not unduly increase the role and size of government. The
President's budget proposal for fiscal year 2005 requests $33
million to fund that year's activities for system
implementation. No funds have been appropriated for fiscal year
2004. Since we plan to initiate an implementation during fiscal
year 2004, we are considering alternative methods of funding
including emergency funding from the Commodity Credit
Corporation.
USDA plans to move forward with implementation of a
national animal identification system in 2004 first on a
voluntary basis and eventually with a requirement for premises
and individual animal identification for all animals. Although
we are still developing our specific timeline for
implementation and deciding on funding mechanisms, we can
provide some preliminary and general indication of activities
for 2004.
Our implementation would begin with an assessment this
winter and spring of existing premise and animal number
allocated systems in use. Based on that review, we would select
the most promising infrastructure to fund and develop the
national premise allocator number and repository system and an
animal identification allocation number and repository system.
We believe these national systems could be in place by late
summer to begin allocating premise identification numbers to
cooperators, states, tribes and certain other entities that are
ready to register premises. We would envision providing some
funding through cooperative agreements to states, tribes and
other entities. At this point, we do not envision Federal
funding being used for individual eartags or other such
devices. However, funding of select electronic readers could be
accommodated under the agreements with some cooperators.
During the summer and into the fall, we would also focus on
identifying qualifying third parties such as private industry
and trade associations that have identification products or
programs, so they could be integrated into the national system
later this fall. By late fall, we would then be in a position
to issue premise and animal identification numbers to third
parties to begin receiving that information.
Many issues must be resolved before we can accomplish this
task just identified for 2004 and beyond. We look forward to
working with the national producers, the industry and Congress
to be successful in creating a national animal identification
system.
Thank you, Mr. Chairman, members of the Committee, I would
be happy to respond to questions.
[The prepared statement of Mr. Hawks can be found in the
appendix on page 49.]
Senator Talent. Senator Harkin has arrived. I want to
recognize him--I see Senator Baucus as well. Well, Tom, you are
ready to go, and you have a brief one. Why do you not just go.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, RANKING
MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
Senator Harkin. Very brief, yes, thank you very much, Mr.
Chairman, and thank you for the opportunity to look into the
development of a national animal ID system.
The need has become abundantly clear since the discovery of
BSE in Washington State. It is also clear that technology
exists to implement the program. As I have done previously, I
urge the USDA to move forward with a system to protect animal
health, public health, and to ensure confidence by both
domestic and foreign markets.
Given the significance of all of these concerns, USDA must
develop the program in a very transparent manner. One of the
first things USDA needs to do is announce its plans to ensure
that those affected by the program, including livestock
producers and other industry participants and consumers, will
have an opportunity to observe and comment on the critical
decisions USDA faces.
There is going to be some controversial decisions ahead.
The only real way to build consensus through the industry is to
provide those affected with a voice in the process. As the
system is designed, USDA needs to make sure that it protects
the ability of farmers and ranchers to be independent. The last
thing we need is a system that locks a producer into delivering
to one packer or vertical chain having a unique animal
identification system and thus take away the producer's ability
to seek other buyers.
A system need not be designed to encourage this kind of
vertical integration, and I urge the USDA to be cognizant of
this issue as it moves forward. A national animal ID system
raises a host of other questions that I look forward to
learning about today and in the near future, such as how it
will be funded, how will confidentiality and liability issues
be addressed, what is the timeline for implementation?
I look forward to working with my Senate colleagues, USDA
and members of the livestock industry and the public to ensure
a workable, cost-effective animal ID system.
Thank you very much, Mr. Chairman.
Senator Talent. Thank you, Senator.
Our ranking member is here. Senator Baucus.
STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA
Senator Baucus. Thank you very much, Mr. Chairman.
Clearly, this is a good opportunity to try to find the best
way to set up a national ID system that is going to work. I
just have a couple of points. First, thanks for holding the
hearing. There is always a silver lining in every cloud. You
have the BSE cloud here, and I guess one potential silver
lining here is it almost forces us now to come up with some way
to minimize to a higher degree the recurrence not only of BSE
but other diseases and other problems that may or may not
happen.
I am no great animal pathologist, but certainly, it just
seems that as the world becomes more complicated, and there is
more interaction among more people, more animals, people and
animals and so forth, different kinds of little viruses or
bacteria develop and become sometimes immune more quickly than
we would like, and it is a very uncertain world, and in some
sense, even more uncertain every day.
The degree to which we can sort of get this right, as right
as we can get it, clearly the greater the service we will be
providing.
A couple other points here. This gives us an opportunity to
a lot of good questions of people. I firmly believe in the old
John Locke sunshine idea, that the more people vigorously
debate a certain point of view, the more likely it is that the
truth is going to emerge. It is old fashioned, but I believe
it. I hope that that is a consequence of this hearing.
We have some real experts here. I know, Mr. Hawks, thank
you for testifying, but in addition to that, from my home
State, Ron Ostberg of the Cattle Producers is going to be on
the third panel from Scobey, Montana; also, Bob Lehfeldt, a
sheep producer from Lavina, Montana.
I say they are experts because they are. They are the front
line. They are the producers. They are the ones that whose
livelihoods are at stake here. They are the people of the soil,
just really good, good, good people. I know both of them quite
well. One is a cattle producer, as I mentioned, the other in
sheep. My family raises both cattle and sheep, and I have known
them for years, and they are honest, common sense, no nonsense
guys.
We are also proud in the West, as you know, Mr. Chairman
and Mr. Hawks, that we have an ID system already in place. It
is called hot iron brands. It works pretty well. Cattle are
IDed at birth, basically, or not quite at birth but in the
calving and get also eartagged most of the time. It worked in
this case, too, and herdmates of the Canadian-found BSE case
were discovered traveling through Montana. Because of Montana's
branding laws, these animals research tracked within less than
24 hours.
We are just saying and asking, as we put this together,
that I know you will, Mr. Hawks: include producers; include
people who really are directly affected by this directly. We
cannot have something top down here. It is got to really work
from people at the bottom up.
We also have some additional tracking systems. It is not
just branding. We have something called the Montana Beef
Network, which uses radio frequency identification and a
computer base base. I have forgotten the number; it is 14,000
head have already been identified in Montana with this system.
It is something we developed at home. It is a separate,
additional kind of technology.
We do not want to reinvent the wheel here, but we want to
be able to look at different technologies, not get too locked
into one. We want to be sufficiently flexible here to allow
existing tracking programs to be utilized as well and also
safeguards to prevent any point in the supply chain from
demanding one certain technology and limiting producer choice.
In addition, it is important to remember that--let us not
be kneejerk here. Let us be thoughtful. The questions that
Montanans are asking, when I surveyed folks at home, are,
first, cost. What is the cost of all of this going to be? Who
is going to bear the burden? How is the cost going to be
distributed, and how much Uncle Sam, how much producers, how
much others in the system? We have to think that through and be
up front about it.
Next are privacy questions: Who is going to have access to
details of a rancher's operations? Ranchers are very concerned
about--they want to do the right thing, but on the other hand,
they do not want some ID system to enable, either under FOIA or
something else, to find everything under the sun about a
rancher's operations. It is not really relevant, but we want to
make sure that that is not an unintended consequence of all of
this.
The third general set of questions revolve around the
integrity of this system: what safeguards will be enacted to
maintain the integrity of a national ID system?
Mr. Chairman, I guess, thank you for holding this hearing.
Thank you, Mr. Hawks, and I also want to thank my good friends
from Montana who are here, because I appreciate your taking the
time to come all the way to Washington, DC I know it is not the
first item on your agenda to get on an airplane and come to
Washington, DC, but thanks a lot for coming, and thank you
again, Mr. Chairman and Mr. Hawks.
Senator Talent. Well, I thank the Senator for his comments.
Bill, the good news is, as I listen to the opening
statements, we seem to be speaking more or less off the same
page in terms of the concerns, and all of us are really
reflecting what we are hearing back home from our producers.
Now Senator Harkin and Senator Baucus came in as you were
ending your comments, and they both raised a concern that I
had, which was timing for a rollout or what you are considering
doing, and you discussed that in your testimony.
Would you just take a minute and repeat what you are saying
regarding your plans, at least for 2004?
Mr. Hawks. Sure.
Senator Baucus. Mr. Chairman, if I might, I ask to be
excused here. I have a bill I am managing on the floor. It is a
jobs bill trying to lower taxes on Montana and national
domestic production so that we can get more products produced
in America and more jobs in America.
Senator Talent. Completely understand, Senator, and if you
have any questions for the record, we will sure put them in. I
note that I picked a very busy day for this, so I will say to
Senator Harkin, it is my intention after he answers this, and I
am going to ask a little bit about confidentiality, to defer to
you for any questions you may have--just really wanted to--OK,
well, why do not you answer that one and then I will just defer
to Senator Harkin, let him ask his question in case he has to
go.
Mr. Hawks. We recognize the fact that it is going to be
difficult to ramp this up immediately, and so, our plans are
this summer of 2004, we would be able to do the premise
identification and then earlier in 2005 to be able to do the
individual identification. That is a ramp-up process.
We want to be evaluating the systems that we have already
invested in to try to determine which ones of those are the
best candidates to be the national repository, and that is
really our plan, to start in fiscal year 2004 with the premise
ID and then move into the individual ID shortly thereafter.
Senator Talent. Why do not I just recognize Senator Harkin
to get a question or two, because I am here anyway, and I do
not know if you need to go.
Senator Harkin. I really appreciate that. Thank you very
much, Mr. Chairman.
Mr. Secretary, and I really thank the Chairman for giving
this opportunity to ask a question here. I just basically--I
had a lot of questions I will submit for the record, but one we
have to clear up, as I have been doing my job and going to
these meetings and stuff around the Hill today, I heard a
report that came out, and I want to make sure we can get it
clarified here, concerning USDA's position on whether the
program would be mandatory, and it comes out--I guess you
testified before a House Ag Appropriations Committee meeting
this morning.
What I am hearing is that you said it would be up to
industry on whether to make this program mandatory. You cited
the possibility that a large retailer like Wal-Mart might
mandate animal identification. As all of the testimony that has
been submitted today indicates, an animal ID system is needed
for health reasons, and also given that some of the animal
health issues concern diseases that can cross from animals to
humans, obviously BSE, it is also a public health concern also.
Again, I wanted to give you a chance to clear this up--
these are just reports that are coming out--and clear up
whether or not the determination of animal health and public
health policy would be left to a few large private entities or
how this is going to happen, and I just wanted to give you the
opportunity to clear up some of these rumors. There are reports
that are going around.
Mr. Hawks. Sure, there is obviously a lot of confusion in
the way those questions were asked, maybe in the way the
questions were answered on my part as well. Let me first
emphasize the fact that it is our desire for animal disease
control and eradication purposes to have animal identification.
Preferably, we would like to see this market-driven. Therefore,
we would like to see a voluntary system work. We really do not
care whether it is a voluntary system, whether it is a required
system, but the desire is to get a system in place.
If the system can be 100 percent voluntary, that would
certainly be my preference to have that system in place. That
is really where we would prefer to go. Whatever method we get--
and this is for animal disease control purposes and eradication
purposes.
Senator Harkin. Well, Mr. Secretary, again, I understand;
let me just throw again--a follow-up question on that again is,
since there are public health concerns associated with this,
because some of these diseases can cross over to humans, in
those cases, I am not certain that just simply leaving it to
the market might be sufficient. I can only assume that in your
developing this, you are bringing in entities like the CDC; you
are bringing in other public health agencies to take a look at
this and to have their input into a system that might be
designed.
Mr. Hawks. Senator Harkin, the animal identification
component that we are working on now is we are structuring it
as designed for animal disease control. That is the animal
disease, animal health officials are the ones that we
anticipate having access to this system.
Senator Harkin. Maybe I am not asking my question right.
What I am saying is that you are developing an animal ID
system. There are a number of reasons why this is being done.
One is for consumer confidence here. It is for making sure that
our markets overseas, that we can have something our customers
want overseas; after all, the customer is always right, as they
say.
Then, there is another element to that. That is public
health concerns, in terms of animal diseases that can cross
over into the human area. In that case, it is not simply just a
market system; it is a public health concern, and that is why I
am asking if you are going to bring in public health officials,
Center for Disease Control people--that is really our public
health entity in America--and others to have some input into
this process, and as I said in my opening statement, to make it
transparent and open.
Mr. Hawks. Senator, it is certainly a transparent and open
process as we move forward here, and it is our desire to have
100 percent compliance with this, and as I was saying, we would
prefer to have it on a voluntary basis. As far as having the
transparency that you are talking about, having the opportunity
for whomever to participate in this, whether it is the CDC,
whether it is your producers in Iowa, whether it is the
producers in Missouri, whether it is the State health
officials, the animal health officials or whomever, it is
totally open, totally transparent.
Senator Harkin. Well, I hope so, and I hope that you are
giving due concern to the public health aspect of this also,
because if a system is designed, at least, Mr. Chairman, I
feel, wherein the public health concern area has not been
involved and open, and they have not had their concerns heard
and contemplated, that we might have some problems with that.
Senator Talent. Senator, if you would just yield for a
question.
Senator Harkin. Sure.
Senator Talent. You got a partial answer, but I am not--
Bill, is it fair to say that, in terms of your current plans,
you are open to the CDC commenting, but you do not have
specific plans to go seek them out, which is what you are
asking. Is that a fair summary?
Mr. Hawks. That is correct; it is certainly open,
transparent. Anyone who would like to participate, that is
exactly----
Senator Talent. I do not want to put words in Senator
Harkin's mouth, but he is saying you might want to make certain
that they come over and give you a few comments, since there
are health----
Senator Harkin. You got your finger on it. The Chairman put
his finger on it.
Mr. Hawks. They are certainly welcome at the table,
Senator.
Senator Talent. OK.
Senator Harkin. Well, I am urging you to not say you are
welcome; I am urging you to seek out our public health agency,
CDC; bring them in on this from the beginning in this process
and not wait for them.
You are right, Mr. Chairman, you figured out what the
disconnect here was.
Senator Talent. Yes, I was just looking at the outside of
the conversation; I thought I could expedite things.
Senator Harkin. That is great.
Mr. Hawks. Sometimes, we need outside help.
Senator Harkin. I am urging you to bring them in and be
proactive in bringing them in. I guess that is what I am
saying.
One last thing I would just say, Mr. Chairman.
Senator Talent. Sure.
Senator Harkin. I have heard from some groups that
represent small farmers, small processors, that they do not
feel that they are having an opportunity to be heard. There is
a concern, as I said in my opening statement, that somehow, we
may be going to a system that is vertical; that large
processors would have a certain system, and that if you do not
meet that, you are out of it and there is a great concern among
independent producers about that, so----
Mr. Hawks. Senator, I would certainly take the opportunity
to respond to that.
We recognize, and in my opening statement, I said one size
does not fit all. Therefore, we want to make sure that we do
not disenfranchise those small producers----
Senator Harkin. I appreciate that.
Mr. Hawks [continuing]. Anywhere.
Senator Harkin. I appreciate that.
Mr. Hawks. Thank you.
Senator Harkin. Mr. Chairman, you have been very kind.
Senator Talent. Oh, no, I appreciate the Senator's
attendance on a busy day.
Let me follow-up on a few points, Bill, and I appreciate
your testimony was very open. You actually answered some of the
questions I had, and it does seem like the Department at this
point has recognized and is working on the concerns that
Senators have raised. Let me go a little bit into the
confidentiality aspect of this.
I understand, I am not asking you for the specifics that
you want this process to get you. It is really not fair for me
to say you have to tell me exactly what you anticipate this
process to do when we have all been urging you to be open and
to listen to what people say and adjust in response to the
process, OK?
I was hoping that we could get for Senators and for the
record your thinking on these subjects, and I would encourage
you to be forthcoming. I do think generally the subcommittee
and the committee is supportive, and we are generally on the
same page in terms of where you are trying to go.
Is it anticipated that the base would be accessed in the
case of some kind of emergency disease situation only? If not,
are there other situations where you think it might be accessed
by the Government, or are there areas where you are open--we
are going to hear from, in the second panel from Dr. Schmitz-
Hsu from Switzerland, who is going to talk a little bit about
how that system, now that they have had it in place for a
number of years, how that information is available there and
how they are using it actually with supporter producers for
marketing efforts, et cetera.
Would you just share with us a little bit about what you
think in that area?
Mr. Hawks. Yes, sir, Senator.
It is our intent for this information that is in this
national repository, if you will, to only be available for
those animal health officials, whether it is State officials,
whether it is Federal Government animal health officials, to
carry on their disease control work. Some of it--it would not
necessarily say that it would only be accessed just for an
emergency situation; some routine surveillance, routine
observations there that it would be available for those
purposes.
That is really what our intent is. We have no intent of
this being accessed by any Government official, Government
agencies that do not have a need to know for an animal disease
standpoint.
Having said that, we also want this system that is being
developed to be broad enough to allow those producers the
opportunity on their behalf, if they want to have other market-
driven information that could be attached to it, but somewhere
else, not in our repository. We only want to know those things
for movement, that identification. That is what we are looking
at for our purposes.
Senator Talent. Did I understand you to say that, again, I
understand it is a long way down the road, but the only time
this information would be available without the specific
approval of the producer would be in the case of some kind of
an animal disease situation?
Mr. Hawks. Animal disease situation.
Senator Talent. An agency that had authority, statutory
authority to look into that, which I assume would be the
Department.
Mr. Hawks. Right, it would be the APHIS, Animal Plant
Health Inspection Service. It could be State animal health
officials, those that need to have it for that purpose.
Senator Talent. Now, when you set up the pilot projects, is
it your intention for APHIS to set guidelines that the plans
have to follow? Or are you going to leave it up to the
organizations submitting those plans?
Mr. Hawks. We will have guidelines as we look at additional
requests for participation in the program. There would be some
guidelines, but they should be fairly wide. There should be
opportunity from those that want to participate to have the
opportunity to do that.
Senator Talent. OK; I have a question staff has prepared:
do you feel confident that terrorist organizations will not
have access to the information? I am guessing that you are not
going to approve a plan unless you are confident terrorist
organizations are not going to have access to the information.
Mr. Hawks. Well, I guess it depends on what they identify
as terrorist organizations.
No, sir, we have no intent of having terrorist
organizations have----
Senator Talent. It is a concern that we need to be----
Mr. Hawks. Sure.
Senator Talent. Because we certainly do not, we want to be
careful with hackers and everything that people cannot get in.
This is an important thing to do, but I really support what is
the intention of the Department to move, yes, with speed in the
sense that you do not rest; you do not just let it sit there
for 6 months, but taking care that we do this the right way.
When you talked about mandatory and voluntary, for example,
it is my sense, observing what you are doing is that the idea
here is to get some pilot programs out that meet the needs that
we have identified of the public interest that producers feel
at least reasonably comfortable with and then see, maybe, a
little bit how they grow on their own, and then, if everything
is working pretty well, at some point come in a little bit
later with the more mandatory type system.
Is that how you might envision this?
Mr. Hawks. Yes, sir, that is exactly it. I would really
like to stay away from the terminology mandatory, because it
was certainly our objective to get--if we could get 100 percent
participation or near 100 percent participation without having
anything mandatory, I mean, it is our desire to have this
system, have as much participation as we possibly can. Whatever
way we get there, that is where we want to go.
I personally think, being a farmer myself, I have a
tendency to think that we would get more participation through
a voluntary system that works efficiently, works effectively
than we would from a top-driven system.
Senator Talent. Yes, and if we all step back and just think
in real life how this is going to work, the two options really
just collapse, because we all want a system that will work. We
can talk about mandatory or voluntary. I would say, though,
that a system that is coercive, that we push down on top of our
producers when they are fighting it with everything that they
have, is just not a system that is going to work and therefore
is not a system that is in anybody's interest.
Would you agree with that?
Mr. Hawks. I certainly agree with that.
Senator Talent. It is one thing if you have a lot of
pilots, and some of them are really working, and you sort of
steer in the direction of the one you think is the best, and
you have to push a little bit at a certain point, but if you
are just absolutely jamming it, what that means is it is
probably not working out there, and then, we are not going to
get the kind of certainty that we want.
Mr. Hawks. You are right, Senator. That is exactly what we
intend to do, to evaluate these systems that we have already
invested in. There will be some additional opportunities for
those that have ideas and have systems that they would like to
participate in the program. We do those evaluations, be very
thorough, very deliberate, and then move toward those systems
that certainly can deliver what we are looking for.
Senator Talent. It is important to remind everybody, if the
system is not working out there, and the industry does not have
confidence in it, it could end up producing the opposite of
what we want, because if it tell us certain things about
premises, in the case of a disease situation, but we do not
have, and our trading partners do not have real confidence,
because the system is being resisted out there, well, then, we
do not know how to act on that information or not.
I would expect some elements of maybe--it is going to be
largely, I do not want to say entirely--voluntary but it is
something where you are going to have to work with industry to
make this thing work. We are all in agreement with that.
A couple more questions. We do have a couple of other
panels, and you have been generous with your time. Are the
development efforts with USAIP still underway? Is that group
disbanding? Tell us the status of that.
Mr. Hawks. No, sir, USAIP is a vital part of what we have
done. We have taken the excellent work that they have done over
the last almost 2 years now; built on that. We certainly want
them to engage with us at this particular point in time. They
are a grassroots group, and we think it is vitally important
that they stay engaged, work with us to try to get forward. My
motto is working together works, and we need to work together
with USAIP as well as all industry interests to move forward.
Senator Talent. You referenced existing ID programs that
have received Federal funds. There are other programs that are
working out there that have not received Federal funds. There
is a good breed association tracking systems; Kentucky's animal
ID system. Are you going to consider the merits of those
programs?
Mr. Hawks. Yes, sir, we sure will.
Senator Talent. Yes, you are not just going to look at the
ones that you have funded to this point. That is good.
Mr. Hawks. No, sir.
Senator Talent. See if I have anything.
Let us just get briefly--I do not know that it is
appropriate at this stage to get heavily into this, but how are
you going to work with the States? How do you anticipate--are
they going to control some of this base? What about premise
distribution or premise numbers distribution? Do you want to
comment on that for us?
Mr. Hawks. Sure, the comment I would like to make there is
the States are going to be vitally important in everything that
we do; as a matter of fact, the vast majority of the authority
that we use under--until we declare an extraordinary emergency
for animal disease control--the situation with avian influenza
in Delaware today, we are doing with State authority, and even
in Texas right today, we are using State authority to handle
the avian influenza there.
It is absolutely vital that the States are well-connected
and well-involved in this system.
Senator Talent. That is all I have. Other Senators may have
questions to submit for the record. We do appreciate your being
here today, Mr. Hawks, and look forward to probably further
hearings on this as you develop the program.
Mr. Hawks. Thank you very much, Senator.
Senator Talent. Thank you for coming.
Senator Talent. As Mr. Hawks excuses himself, if the next
panel could come forward, please.
I want to welcome our second panel. Let me introduce both
of you at the same time, and then, we will go to Dr. Marsh
first because that is the order I have here on my paper. I do
not know that it really matters. Dr. Brett Marsh, who is the
first vice-president of the U.S. Animal Health Association and
the Indiana State Veterinarian; and then, Dr. Fritz Schmitz, I
understand, is how I should pronounce it, sir, who is the
former CEO of an tracing base base corporation, and you can
pronounce the name of that company. I am not going to attempt
to do so, sir. I am very much looking forward to both your
testimonies. and Dr. Schmitz, especially, well, I do not want
to say I am not looking forward to yours, Dr. Marsh, but I will
be very enlightening to the Subcommittee and the record to hear
your experience in Switzerland and compare it to what you see
happening here.
Dr. Marsh, if you would go ahead with your testimony; thank
you.
STATEMENT OF BRETT MARSH, FIRST VICE PRESIDENT, U.S. ANIMAL
HEALTH ASSOCIATION, INDIANAPOLIS, INDIANA
Mr. Marsh. Thank you, Chairman Talent, Ranking Member
Baucus, the members of the Subcommittee.
I really appreciate the opportunity to testify before the
Subcommittee today on this extremely important issue with
regard to developing a national animal identification system.
In February 2003 was released a document titled the National
Strategy for Physical Protection for Critical Infrastructures
and Key Assets and it was indicated in that document and
significantly that agriculture and food were listed as one of
the critical infrastructures for the country.
More recently, in January of this year, the President
signed Homeland Security Presidential Directive No. 9, which
establishes a policy for defending our ag and food systems in
the country, and both of these illustrate the importance of
this sector and that there is need to put safeguards in place
in order to protect us for the long-term.
Identification of livestock, of course, is one of those
critical components in order for us to have an effective and
efficient response to an animal health emergency, and quite
frankly, the safety of the nation's food supply, our animal
health and public health are at risk, and therefore, we need to
take a hard look and be prepared as a nation to take some
definitive actions and definitive steps.
There are three basic tenets, if we take a look at those
and use those in developing a successful plan and implementing
that plan that will help us as we move forward, and the first
of those tenets is that animal identification is not new. It
has been mentioned here this morning that we have a variety of
ID systems that have been used for decades across the country,
whether they be brands, as Senator Baucus has mentioned, in his
State, eartags, ear notches, back tags; we have had a variety
of systems over the years that we have utilized, and of course,
we have utilized those in my State as well, but unfortunately
the shortcomings that we have with those systems and the lack
of a national ID system result in an inadequate traceback
capability for us at the State level and therefore inadequate
for a country as a whole and unfortunately leave our livestock
populations exposed to disease.
Although, therefore, we have significant interest and
experience with a variety of these systems, there is indeed a
need for a dramatic change, a comprehensive animal
identification system, and this is in part because of the
changes in our industry. The industries the I serve in Indiana
have changed dramatically over the last 5 years, let alone 10,
and also in addition to the fact that in this post-9/11
environment, we recognize that this sector is subject and a
potential target for terrorist activity, either domestically or
internationally.
There is a need for a plan, a new plan with new goals, and
tenet No. 2 is that there is such a plan. It may not be the
plan, but it is a plan, and it has given us a templates where
we can move forward. It is a template to identify the future
needs of the United States for animal identification purposes.
It is been developed by 70 organizations and associations
working over the last 2 years, involving up to 400 individuals,
so indeed a grassroots effort supported by USDA and the State
animal health officials to identify the best ways to accomplish
this task.
They have done a good job in trying to identify and address
those gaps in our current systems, and they have come down to
three basic objectives, and they are important objectives as
you look at the U.S. Animal Identification Plan. The first is
that there be a uniform premise identification system. This is
one of the primary objectives, one of the primary goals of this
USAIP and will serve us well in the long run.
The second objective is a uniform individual animal
identification system or, depending upon the commodity, it may
be a group or lot identification system. That is one of the
things that needs to be worked out as we continue to refine
this plan.
Senator Talent. We have to work out what uniform means,
too.
Mr. Marsh. Indeed, indeed.
The third objective under that plan is that there be a 48-
hour traceback capability. That is extremely important for us
as well as we look at the experience of some of our global
neighbors with the challenges they have had even 3 years ago
with foot and mouth disease in the United Kingdom and having an
effective traceback capability.
The United States Animal Health Association, after careful
review of this plan, passed a resolution at their meeting last
fall that basically endorsed the plan as a work in progress and
encouraged the USDA to establish species-specific working
groups to get down to some of those specific needs of the
commodity organizations to make sure they are addressed and
their concerns are addressed as they move forward with the
plan.
It is interesting, in the fall of 2002, USDA hosted a table
top exercise. It is called Crimson Sky. As I recall, Senator
Roberts of this Subcommittee served as the chief executive
during that table top exercise. Not unlike exercises that have
taken place all across the country at the State level, and my
State being one of them, it does not take very long to
determine that if you do not know where the susceptible species
are located before you have the outbreak, you have lost a lot
of time and therefore may result in significant and
catastrophic losses for the industry.
We experienced that in our State, and therefore, we
recognize that that is one of the basic objectives of the USAIP
and an important piece of that.
Individual identification, as I mentioned, we have been
doing it for years, and a variety of programs have been used
for ownership purposes or animal health purposes, but it is
significant that in our most recent experience in Washington
State, with a case that was identified in December of last
year, that at the close of the BSE investigation, there were
still cattle we could not find, and that is with our current
system.
We could all agree that it was better for the United States
to experience BSE instead of foot and mouth disease with that
kind of result. It is important for us to take a look at what
is out there, and it is a compelling reason that I mentioned to
move forward.
The USAIP also identifies some of the best technology that
they believe should be utilized, and that is the RFID, the
radio frequency ID, for individual identification purposes, and
it is also important because, based on what we have learned in
my State and likely yours, Senator, that it may be the least
disruptive to the markets process so that we can still trade
and move our product amongst our States, which is important to
all of us.
The third tenet is that we have to have a workable time
line and budget, and that has been discussed here today.
Although the BSE case in Washington State has certainly
energized the interest and the need for this plan, we have to
have the infrastructure in place, or it will not work, and we
have discussed that here this morning and not only the
infrastructure but identifying the unique needs of the
commodities.
We talked a lot about the cattle industry, but certainly,
swine is big in my State and other commodities, so we need to
make sure that we have identified their specific needs.
I applaud the USDA and Secretary Veneman for taking
definitive actions to raise this to a level of interest at the
national level, to make sure that this moves forward and
particularly in asking her chief information officer and others
in leadership positions at USDA to take a look at how to
evaluate and for the implementation of the plan.
One of my primary concerns and why I appreciate this effort
from USDA is that there must be an information technology
system to make sure this works. I am looking forward to the
next speaker's presentation with regard to some of his remarks
in this area, because we clearly have to have a situation that
can gather and store and retrieve these key datum elements,
because that is really the underpinning of the USAIP and the
needs that we have as a country.
We also have to have it so we can respond the evolving
technologies. What we have today, obviously, may not satisfy
all the needs that we have in the near term.
Senator Talent. Doctor, we almost have to--Dr. Schmitz, we
are all anticipating your testimony--it would seem to me that
we almost need to know what that is going to be before we do
the rest of the system, because everything else is going to
have to put base into that part of the system, the base bank
that we have.
I agree with you, that is crucial. Then, as long as we work
with producers and the States and--the rest of the system can
adjust to that a little bit. Would you say that is fair?
Mr. Marsh. That is an accurate statement, Senator. That is
one of the things, frankly, we are looking to USDA to say what
is that template, because the interest is there at the producer
level and we are ready to move forward as long as we know what
that is. Without that, we would be lost.
One of the other issues that we run into is on this time
line, and I am interested--and Undersecretary Hawks is here
this afternoon--is that one of the challenges that we would be
met with, and our cattle industry is not as large as yours is
in Missouri, for example, but we have 19,000 cattle herds in
our state, and if we were to accomplish this, say, over a 90-
day period of time, we would have to register in the
neighborhood of 200 of those every day. That is one of the real
challenges that we see in order to accomplish that. In your
State, that would be in the neighborhood of 765 a day, and so,
it could equate to a major task trying to do it well.
In Indiana, we have established partnerships with our
commodity organizations, because we recognize that as the State
animal health official, we are not going to do it by ourselves.
We recognize the value of their work with the USAIP, and our
Indiana Beef Cattle Association, for example, has established
an ID working group so they can begin to work through those
specific nuances that have to be resolved.
Resources, of course, have come up already this afternoon,
and appropriately, clearly, it is going to have to be a public
and private partnership, and back to your comments, Senator, we
need to know what that template is to really begin to pound out
what those figures will be in my State.
Producers see the need, and there is the momentum to move
forward. I have a number of questions from producers in my
State, veterinarians and others, about how this needs to move
forward and basically how they can help. The energy is there.
We just need to have that template so we can begin to move
forward. Likely, as is the case in other countries, it will
likely take Federal funding to get it launched so that we can
make sure that it is in place and sustainable for the long-
term. Because otherwise, it is going to be in place for some
time, we hope, to serve our needs for the long-term.
Basically, those three basic tenets: that the ID is not
new, and if we leverage the experience that we have out across
the country; we have a lot of producers that certainly have
used these systems over the years, but to pull all those
together into a meaningful system is really the value that we
have here today; that there is a new plan, the USAIP. It is not
the complete plan, but at least, it is certainly a great, great
start, and indeed, having that grassroots influence in that
process has been very valuable and then having a workable time
line and budget.
We recognize that there is a lot of interest in moving
forward, but clearly, we have to have those infrastructure
pieces put in place before we launch a national program.
Chairman----
Senator Talent. I agree with you Dr. Marsh about the USAIP
plan, and it addresses some of the concerns Senator Harkin
raised about transparency; that process has been pretty
transparent in terms of working with the groups that are out
there already, and if we just disregard it, which is not going
to happen, then, we give up all of that input that we have had.
Mr. Marsh. Indeed, it has been a valuable process. It is
people who work together, particularly when--it is one thing
for a commodity organization to agree to a process, but
collectively, having all of those bodies together, working
together has made that document even more valuable.
Well, Chairman, I appreciate the opportunity; I appreciate
your holding the hearing. There is a lot of value that is
coming from this hearing, and I look forward to any of your
questions.
[The prepared statement of Mr. Marsh can be found in the
appendix on page 67.]
Senator Talent. Thank you, Dr. Marsh.
As everybody can tell, particularly when I am the only one
her, I like to keep it pretty informal, but I promise I will
let the witnesses get through their statements----
[Laughter.]
Senator Talent [continuing]. With minimal interruptions,
anyway.
Dr. Schmitz, thank you for being here, and we all expect to
learn a lot from your testimony. Please proceed.
STATEMENT OF FRITZ SCHMITZ-HSU, FORMER CEO,
TIERVERKEHRSDATENBANK, SWITZERLAND
Mr. Schmitz-Hsu. Mr. Chairman and members of the Committee,
thank you for the opportunity to participate in this hearing.
Respected Senators, ladies and gentlemen, I am very happy
to report to you today on the experiences with animal tracking
in Switzerland. I am here today because of four and a half
years from its inception, I was CEO of the
Tierverkehrsdatenbank AG, TVD AG, the animal tracking
corporation in Switzerland. The TVD AG is the entity
responsible for the design, implementation and operation of the
Swiss animal identification and tracking system.
In the nineties, Switzerland, suffering under outbreaks of
BSE resulting from imported feedstuff was subject to a ban on
the import of Swiss animal products by European and other
countries. After due consideration of this and after danger of
contagious diseases to the Swiss national herd, the Swiss
veterinary authorities concluded there was an urgent need for
an up-to-date animal tracking system. The solution had not only
to address the problem of animal health but also help restore
trust in Swiss animal products and promote food safety.
The Swiss veterinary authorities concluded that the most
effective solution would be to rely upon the private sector for
the solution. The advantages that this would bring were faster
setup and a more quickly operational system and increased
support by the stakeholders, due to the fact that the new
system and base collected could be more easily used for other
purposes.
To engage the involvement of the private sector in the
design of the system, a competitive bid process under WTO rules
was chosen. To participate in the competitive bid process, a
consortium of interested Swiss agricultural organizations
formed the TVD AG. I was chosen to serve as CEO. The
organizations that came together did so because they recognized
the impact and the potential a central animal tracking base
base could have on their business. Together with our technology
partner, the Swiss subsidiary of the American company Computer
Science Corporation, we bid and won the contract.
I understand there is great interest in how the private
sector and the Swiss Government and the private sector arrived
at the collaborative effort. At the beginning, the Swiss
Government visited with all important agricultural
organizations on how to define certain technical aspects of the
system. Many of the organizations did not support the Swiss
Government's vision of the system. More or less every
organization had its own version of the animal identification
plan, and some wanted to offer their services to run the base
base.
Fortunately, the Swiss Government had already a very strong
opinion on how the final solution should look, a central base
base run by an independent company collecting base directly
from the system participants. When we set up the animal
tracking solution, we knew that it take time and be difficult
to gather information on the complete national herd. It was
decided, therefore, to take an iterative process with early
implementation, focus on quick wins and refinement based on
experience.
Features of the solution are: common processes implemented
nationwide rather than different processes by cantons, which
corresponds to your states; the ability to exchange base with
existing sources, including the incorporation of existing
identification systems; multiple base entry systems with strong
base access functionality; a solution that integrates the
business processes; a fully scalable solution, easily
expandable for additional needs of the public and private
sectors; and all basic services of the solution were fully
operational within 6 months of winning the contract.
Enhancements, especially for providing base quality and
provision of additional services, were added on an iterative
and step-by-step basis over time. The Swiss parliament decided
that funding for the setting up of the entire system would be
provided by the Swiss Government but that operational costs
have to be covered by the users; that means the producers,
traders and slaughterhouses.
In Switzerland we therefore started with a fee associated
with the eartags applied to the animals, $2 per calf in 1999,
$4 since January 2004, and, since 2003, also a fee, $4 since
January of this year, per slaughtered animal to provide funding
of the operational costs. Since these fees are uniformly
applied, the system is fair, and the costs can be passed on
uniformly to the consumers without penalizing the producers.
In addition, and of crucial importance to the success of
the system, it was decided that the base base would be made
available for commercial value-added services, provided that
the owners of the base gave their consent; thus, today, not
only producers can use the base base for their inventory
purposes but also agriculture organizations for instance
breeding associations, Government organizations,
slaughterhouses, meat packers, supermarket chains and soon even
consumers.
In particular, some food safety and quality programs
operated by the supermarket chains rely on the animal tracking
base base. We expect others to follow. This provides an
additional source of revenue, which helps fund the operation of
the whole animal tracking system.
Over time, the cost to the Government for running the
animal identification and tracking system, excluding
investments, was reduced from 60 percent in 1999 to less than
20 percent in 2003 and completely self-funding since the start
of this year.
Another crucial aspect of the solution is the base quality.
I cannot stress enough how important this aspect is. The value
of the solution is directly dependent on the quality of the
base. The best way to promote good quality is firstly through
streamlined processes; second, with value-added services
already mentioned; and especially by rewards for good quality
base and penalties for missing or false base.
Another aspect I would like to emphasize is the value of
the business processes associated with the system. The
processes are more crucial to the success of the solution than
the software itself. We and our partners from CSE Switzerland
have invested greatly in the processes and provide the
expertise that we need. Experience is what counts for designing
and running business processes.
Regarding lessons learned from our 5 years experience with
nationwide animal tracking, I would state the following: set up
a central base base that serves not only for fighting animal
diseases but as a tool for all organizations interested in
animal identification. Gain experience before making major
investments. The key success factors are the processes,
training and acceptance. Allow the maximum value to be made
from the base collected. Regulate access rights to protect the
rights of the base owners, but impose no more base access
restrictions than really necessary.
Start with a new base base, but minimize extra costs by
taking over existing base. Be careful not to make things too
complicated and costly by catering to everything which already
exists in order to satisfy certain groups. There must be common
procedures and standard interfaces. Use a single central base
base to reduce costs and minimize response time for impact
analysis.
Last, I would encourage you all to come to Switzerland and
see yourself what we have in our solution. Talk to end users
and familiarize yourself with the expertise we have built up.
You are most welcome, and we would be very happy to collaborate
with you.
Thank you very much.
[The prepared statement of Mr. Schmitz-Hsu can be found in
the appendix on page 71.]
Senator Talent. Well, I can talk to the Chairman and see if
we can arrange a trip for the members of the Subcommittee to
Switzerland. That might be rather popular. I do not know.
Thank you, Dr. Schmitz, for that. That was very, very
helpful.
Let me ask a few questions of you. You mentioned how
crucial business processes are. Could you be a little bit more
specific with that? I want to make certain I understand what
you are talking about there.
Mr. Schmitz-Hsu. About business processes, from ordering
the eartags, delivering the eartags, from registering the birth
notifications over the whole cattle movement to their
slaughterhouses, that you have fully impact this in a very
streamlined fashion.
Senator Talent. That is within the agency the base base and
the system? Or are you talking about the producers or both?
Mr. Schmitz-Hsu. That is for the agency which runs the base
base.
Senator Talent. OK.
Mr. Schmitz-Hsu. You need to make sure that the system is
consistent and simple to use for end users.
Senator Talent. Interesting. Is the base base operational
for hogs, sheep, goats, other animals?
Mr. Schmitz-Hsu. Currently we have registration only of
cattle. The system is set up so it can also handle pigs, sheep
and goats. With pigs, sheep and goats, we currently only
deliver uniform eartags to them, and we register who gets these
eartags. We have the beginning of where the animal is born if
later on, we see an urgent need to trace back where this animal
comes from, but we do not register where and when this animal
has been for pigs, sheep and goats.
Senator Talent. Are you moving in that direction? Do you
think you will be there?
Mr. Schmitz-Hsu. We will do so as soon as there is need for
doing that. Currently, there is not enough need for doing that.
Also we are working currently with conventional eartags, and
for instance, for hogs, you cannot rely on conventional eartags
when you want to register all their movements. You have to
switch to a radio frequency ID. The system is already set up,
and we have already a trial with a radio frequency ID with
cattle.
Senator Talent. Let us discuss that a little bit. In the
list of the bullet point features in your solution, you mention
the common numbering scheme and base collection systems,
ability to exchange base with existing sources, including
existing ID systems, multiple base entry systems, a solution
integrating business processes. Does that mean that your system
was technology-neutral as regards the technology used by a
particular rancher? Radio frequency, eartags, bar code? Did it
matter to your system what kind of technology they used, or
were you able to keep it neutral?
Mr. Schmitz-Hsu. It is technology-independent. If you look
at the identification, it matters actually only when reading
the ID from the animal; that is just the distance to the
reader. This reader can be electronic. It can be your eye. From
there on, the process is exactly the same if you are talking of
electronic ID or conventional ID. Our system is set up; there
are some differences between RFIDs and conventional eartags,
but that is a rather minor thing to incorporate, and we have
done this already.
Senator Talent. That is up to the rancher, the producer
about what kind of technology they want to use.
Mr. Schmitz-Hsu. Actually it is important that you set
certain standards, because then, it will also be market-driven
in buying these kinds of products. If you are buying 30 million
identical identification ID, say, eartags or whatever it is,
that is certainly cheaper than if you are buying 20 different
versions of IDs.
Senator Talent. I get you. You set the standards, and then,
there is flexibility in terms of which particular technology
they want to use in meeting the standards.
Mr. Schmitz-Hsu. Right.
Senator Talent. Right; OK; did the system, as you were
developing it, and actually, I should get back and establish
for the record the time. You indicated in your testimony that
your exports were being banned in 1996. You started the
national ID program in 1998, which was several years later. How
long did it take you to develop and implement this system once
you got the mandate to do so?
Mr. Schmitz-Hsu. In 1996, it showed up; it was evidence
that BSE can be transmitted to humans. That was when this was
certainly an urgent need on fighting this BSE. It took 2 years
until legislation has passed a law to implement a central base
base. That was in 1998. In 1999, we brought in our offer, and
we got the contract in May 1999. In December 1, 1999, that
means less than 6 months after we got the contract, we actually
had already the national base base running, being able to
register all newborn calves. Within less than 6 months.
Senator Talent. How long did it take after that to get cows
registered? You had the system ready, but how long before you
had all the animals on the system?
Mr. Schmitz-Hsu. We started with the newborn calves, and a
year later, we registered all animals on the base base. We took
our base from breeding associations to avoid that we had to go
again to collect information on cows which were already
registered in breeding associations' base bases. We had to
register the remaining cows which were not in a herd. From the
end of 2000 on, in principle, we had the whole national herd on
the base base.
If you mean in terms of sufficient base quality, it took a
little bit longer to get this all running.
Senator Talent. It sounds like from the time you got the
contract to the time the base base was ready, that was about 6
months.
Mr. Schmitz-Hsu. Right.
Senator Talent. Then another year or more, so you are
talking a year and a half, maybe 2 years, to get all of this
registered, and this was several years after the issue really
arose. That is in Switzerland with 1.5 million cows; and the
United States with roughly 100 million.
There have been some bills proposed in the other house to
have a 90-day implementation deadline for implementing a
system. Would you say that was a little bit too ambitious given
the size of the task here?
Mr. Schmitz-Hsu. It sounds to me very ambitious. You have
to consider--it is for the U.S., it is really very urgent, and
it was also for Switzerland. It took a long time, but I heard
the figure that you lose $10 billion per year, so, with this
ban that you have on your beef, and if you convert that to our
hearing today, then, I must say we have, during the just the
hearing here, we have, what, $2 million already lost again to
the agriculture industry in the U.S., so there is an urgent
need to proceed forward.
It is important, and that was also once the whole process
was set up that we quickly had a base system implemented, and
we could show, then, to the neighboring countries that we have
done now something, that we are building up a base base,
actually, a whole animal tracking solution which fulfills the
international requirements.
Senator Talent. You mentioned gaining experience before
making major investments. I really appreciate, for the record,
these lessons learned and would commend it to anybody who is
considering how this process is going to be done. Would you say
that your system evolved over time toward one particular kind
of tracking device because it was better than others? In other
words, I guess what I am sensing is that you consulted, you
pulled together this base base. You began implementing it.
While you were implementing the process, you were trying to
learn from the process as you implemented it and did it step-
by-step and concentrated on what was practical rather than sort
of coming up with a plan whole cloth and then just implementing
that without regard to the facts of implementation. That is a
leading question, we lawyers say, but it seems to me that is
how you did it.
Mr. Schmitz-Hsu. The basic functionality is still the same.
We have not changed on that. The principle is still the same.
We have added certain services; we have added certain
functions; we have especially increased the possibility to
communicate electronically with the central base base; that is
a central issue, also, to gain acceptance. I would just like to
stress, again, the problem will not be the central base base,
the computer system, and so on. The problem is to get base
quality, to get the acceptance of the producers to participate.
The fancy system does not help if you do not get the base
in as you need. There, you need to focus, and there, we made a
lot of experience and learned many lessons, and I would have
been happy if I would have been able to share at that time with
somebody else who had made this experience already.
Senator Talent. You mentioned several times how important
it was for it to be user-friendly, for the processes to be
simple and understandable. I guess the idea is to--tell me if I
am wrong--is to create out there in the country among our
ranchers and our cattlemen a sense that they are comfortable
with this system; they know how to use it; it will work well
for them, so you are not dealing with a lot of passive
resistance all the time. Am I understanding you correctly?
Mr. Schmitz-Hsu. Yes, that is an important issue, and we
got a sufficient base quality, a real good base quality, only
after some rewards for good notification were given to the
producers and some penalties if they did not comply with the
system. We have a mandatory system, not a voluntary system.
Senator Talent. You have a mandatory system that most
people feel comfortable with and are happy to participate in.
That is a good way of saying it.
Mr. Schmitz-Hsu. Right, it took awhile, but it was raising
more and more--conviction that something has to be done,
producers had from the very beginning. Actually participate and
do the work, and so, that is an additional effort for them. We
do not deny that. Finally, when they saw the system was good
for something, and they can access their base, they can get the
inventory, they can see that the base they enter for the
national base base is actually also going to their breeding
association, so they do not have to make the notifications two
times, that is a crucial part.
Our system, our central base base is not on top of the
existing base bases we had already but is on the bottom. It is
the base. That is why there was quite a lot of opposition at
the beginning, and people wanted to make it different;
different breeding associations wanted, hey, make a national
system that incorporates our system. Actually, fortunately, the
Federal Government decided, no, we implement a new base base
which will be the basis for the other services.
Very quickly, also, driven by the pressure of the
producers, because they do not want to make notification
several times, then, actually, the other agricultural
organizations, they were somehow driven and forced to take the
base from the central base base. Then, there were additional
services provided to these agricultural organizations, so that
actually fulfills their need.
Senator Talent. Just a couple more questions. I just
thought the opportunity to have you here to get as much
information as we can from you too valuable, really, to pass up
or to minimize. You mentioned--I am going to read this--from
lessons learned: allow the maximum value to be made from the
base collected; regulate access rights to protect the rights of
the base owner but impose no more base access restrictions than
really necessary; make sure the benefit goes to the owners of
the base, that means to the end users; involve third parties
such as supermarket chains early in the process in order to add
to the value for the end users; reward the good end users.
Now, there have been two issues that have been raised, one
by Senator Harkin, and he is reflecting concerns of producers
and others producers have raised that this lesson learned would
implicate. One is I know our producers are very concerned about
confidentiality. If we went out and just said oh, you know
what? This stuff is going to be available, and it is really
going to be good for niche marketing your products and all this
stuff, they would initially, anyway, say wait a minute, we are
not making our operations an open book.
The other that Senator Harkin raised, we do not want
private, big supermarket chains sort of driving what the
requirements of this base bank are. Now, did your ranchers have
the same issues? If they did, what did you do to accommodate
those issues?
Mr. Schmitz-Hsu. See, the producers, they had exactly the
same concerns as your producers here have. Confidentiality, oh,
this goes--does the base go to the IRS and so on, all of these
issues came up.
What we have, the regulation for base access, is we make a
clear distinction between animal base and premises base; say,
the animal base, that goes with the animal, and the new owner
of the animal, he gets all the information, where this animal
has been before, including the address of the previous owners.
For this animal here, whereas, how many animals a premises has,
that is something confidential, and that is only given out to
those when the owner of--the actual producers give the consent
that this has to be done.
We had to implement on our system really elaborate base
access functionality to cover these rules. That fulfills, now,
the need of the producers also, so if they make some--
participate in some kind of supermarket chain program, they can
authorize, by themselves, the supermarket chain, OK, I give you
the right that you can access my base. Then, I do not need to
tell you about my animals. You can go directly from the central
base base.
Senator Talent. Thank you, Dr. Schmitz. I appreciate that
testimony.
Let me ask you, Dr. Marsh, do you want to comment on what
you have heard regarding the Swiss program, what you think we
could take from it? If you just have any comment on things that
they are doing in Switzerland that maybe would not work here or
would work especially well? I would sure like to hear it if you
have any comments. You look like you were listening as intently
as I was.
Mr. Marsh. Yes, it was fascinating testimony, and I
appreciate getting an opportunity to hear him. Even though we
are geographically thousands of miles apart, I do not think we
are on this issue and the challenges that we meet, be met with
it, issues of confidentiality, who owns the base, where it
goes, making sure that the technology that is used, make sure
that the marketplace can still function and certainly State to
State in our situation and potentially internationally.
I am intrigued by what is there. I am aware that others
have reviewed this process, and it is important that we take
those lessons learned. It is not something that is going to
happen overnight. It is going to take awhile to put it in
place. There have been questions about voluntary versus
mandatory. I guess for me and our State, I am not sure what you
would mandate just yet. We are not quite to that point yet, to
say this is what we want, and that is why this is valuable that
we have these species-specific working groups working under the
USAIP to pound out some of those specific details so that they
are not lost in the process.
Again, the number of issues and the lessons learned there
are valuable for us, and we can take heed.
Senator Talent. Do you have a gut sense of what a realistic
timeframe would be?
Mr. Marsh. I am intrigued by Under Secretary Hawk's remarks
that with regard to the premise allocator that that could be
available by the end of this Federal fiscal year. Indeed, there
are a number of base base systems in the States that have been
used for animal health purposes, whether it is for brucellosis,
tuberculosis, pseudo-rabies, et cetera; that there are base
bases out there that have some of this base that could be
transferred into the process.
I am aware of some States, Senator Nelson's State, for
example, where you can go online and register a site. There
will be those who will do that. That is a good tool, but I
harken back to the United Kingdom again. Foot and mouth did not
start in their major commercial operations; it started in a
garbage feeder. At some point, you have to go out and get the
balance of them, where those premises are located, and that
will take some time, and that has been indicated in Dr.
Schmitz's testimony as well.
It is important that we take a look at the processes that
are in place. Our neighbor to the north in Michigan, for
example, has been using RFID for several years, combatting
their tuberculosis problem. There are lessons learned there in
country; there are lessons learned from some of the others;
FAIR and other processes are in-State, are in the country,
rather, and if we are careful in evaluating those, then, we
will not make the same mistakes twice.
Senator Talent. Well, I have kept you two a long time, and
I am grateful for that. We covered a lot of good issues. We do
have another panel. Thank you, Dr. Schmitz; thank you, Dr.
Marsh, for being here.
Oh, I am sorry, Ben, did you----
Senator Nelson. No, no, that is OK.
Senator Talent. The third panel can come on up, then.
Senator Talent. Our third panel is being seated, and I
will, if Senator Nelson would like, would love to have him
introduce the witness from Nebraska, and then, I will introduce
the other witnesses.
Senator Nelson. Well, thank you very much, Mr. Chairman.
I appreciate so much the courtesy of being able to do this.
It is really a pleasure for me to be able to introduce Joy
Philippi from Bruning, Nebraska. She is a family farmer with
2,000 head of nursery hog operation, with that operation
working with a local producer. She serves on the National Pork
Producers Council board. She has been involved with the
Nebraska pork producers for 10 years, the past-president in
2000. She serves on the species subgroup for swine on the USAIP
working group. She is chairman of the NPPC Committee on Animal
Health and Food Security, involved with the Nebraska State
Group on Animal ID, and as I said, in her spare time, she also
farms.
We appreciate very much her presence here today and her
support in the past for our efforts to deal with agricultural
issues of all kinds but particularly to help us understand,
from the point of view of a pork producer, what is involved
with animal identification, and I hope that you will be able to
enlighten us--I hope to be able to stay here for a period--on
what animal ID licensing could involve with respect to the
small to medium size producers. Joy, thank you for being here,
and thank you, Mr. Chairman.
Senator Talent. I will introduce the other three witnesses,
and then, we will start with Mr. John and just go from that way
to that way, because that is how have it down on my paper.
We thank all of you for coming here, and, as Senator Harkin
said, it is very important that we hear from people who really
are doing this and will have to do it, so I want you to tell us
everything you think we need to know. With that in mind, so
that there is enough time to ask questions, if you could, you
do not have to read your whole written statement; if you want
to give a summary of it, that would be fine as well.
Mr. Mike John, who is Vice President of the National
Cattlemen's Beef Association and is from Columbia, Missouri;
Mike, thank you for coming; Mr. Bob Lehfeldt, of the American
Sheep Industry Association from Lavina, Montana?
Mr. Lehfeldt. Lavina.
Senator Talent. Lavina, I am sorry, and Senator Baucus
referred to Bob before, and Ron Ostberg, who is a Montana
Farmers Union member from Scobey, Montana, is with us today.
Mike, thanks for coming. You and I have discussed this
privately, but I wanted everybody to have the benefit of your
wisdom, so please give us your statement.
STATEMENT OF MIKE JOHN, VICE PRESIDENT, NATIONAL CATTLEMEN'S
BEEF ASSOCIATION, COLUMBIA, MISSOURI
Mr. John. Thank you for the opportunity to present
testimony to you today on behalf of the State affiliates of the
National Cattlemen's Beef Association. I appreciate being able
to discuss animal identification, an issue of great interest
and concern for cattle producers across the country.
The recent discovery of BSE in a Canadian cow in Washington
has given this discussion a tremendous sense of urgency. Animal
identification is a tool that can be used in conjunction with
our animal health infrastructure to identify and isolate
animals and premises that have been associated with animal
disease. It is not a substitute for this infrastructure. NCBA
will oppose efforts to pay for an animal identification system
by cutting existing animal health infrastructure.
Animal identification is a confusing and complicated topic
which has endured several years of debate to come to a
consensus, and there is still much work to do. To forge broad
consensus, NCBA worked with more than 70 organizations and over
400 individuals to draft what is known as the United States
Animal Identification Plan or USAIP. As a matter of NCBA
policy, we support the USAIP as the foundation of the national
identification system and support its ongoing work.
The USAIP focuses on establishing technology standards so
the system is uniform, workable and consistent. USAIP
establishes radio frequency identification or RFID as the
currently preferred identification method. RFID has been
readily adopted by livestock producers. Adoption of the RFID
standard within USAIP acknowledges the existing use of this
technology.
Full and complete implementation of USAIP is estimated at
$545 million over a 6-year period. The USAIP estimate includes
the information system, base collection infrastructure and
identification devices. Clearly, this amount is a tremendous
outlay of resources for any party. A potential funding approach
could be the Federal Government paying for establishment and
approval of the standards, the Federal and State Governments
partnering on infrastructure installation, and the Federal and
State Governments cost-sharing with producers on the
identification devices.
An effective animal identification program would provide
the traceability needed to contain, isolate and eradicate the
spread of an animal disease that has the ability to disrupt the
livelihood of producers. The creation of a system for these
purposes should not result in the invasion of a producer's
privacy. Therefore, NCBA believes that any information provided
by producers for the animal identification system should be
exempt from release under FOIA; additionally, the Privacy Act
protects private and personal base from release without the
written consent of that party that provided the information.
The question of mandatory versus voluntary should revolve
around how best to achieve the level of participation needed to
make the system effective. In addition, privacy concerns, costs
to producers and the appropriate implementation plan will have
as much bearing on the success of the program as will whether
it is mandatory or voluntary.
The USAIP calls for initially starting with a premise
identification system then moving forward with individual
animal identification. It is critical that a premise allocation
system be defined soon that meets USAIP guidelines and
recognizes the interstate nature of livestock movements. It is
extremely important that implementation of the program be in
step with how marketed and moved. We must take into
consideration constraints that exist at livestock markets,
processing facilities and feed yards.
Additionally, many cattle are already identified through
existing marketing and management programs. If the systems in
which these cattle are already identified are consistent with
the standards of the USAIP, then these systems should be
available to provide base to USDA for the purposes of producer
participation in the identification system.
It is important that there be international harmonization
in animal identification standards and systems. Our five-
nations working group is in agreement that there should be
harmonization in our animal identification systems. NCBA
supports the adoption of the RFID standard within USAIP.
However, should Congress act on an identification bill, no
statutory provision should be included which establishes the
RFI technology standard. Keeping the technology standard within
the regulatory responsibility of USDA maintains the flexibility
needed to adopt new technology.
USDA has the authority under the Animal Health Protection
Act passed in the 2002 Farm Bill to implement an identification
system. NCBA will monitor the implementation of an
identification program by USDA and, as previously stated, NCBA
is supportive of an industry-implemented program that is
accessed by USDA for animal disease issues only.
We are confident that the current path we are on will
result in the development of an effective animal identification
and traceability program for not only the cattle industry but
also for all animals in agriculture.
Thank you for allowing me the opportunity to testify.
[The prepared statement of Mr. John can be found in the
appendix on page 77.]
Senator Talent. Thank you, Mike.
Ms. Philippi.
Ms. Philippi. Philippi.
Senator Talent. We are ready for your statement. Please go
ahead.
STATEMENT OF JOY PHILIPPI, NATIONAL PORK PRODUCERS COUNCIL,
BRUNING, NEBRASKA
Ms. Philippi. Good afternoon, Mr. Chairman, and thank you,
Senator Nelson, for your kind introduction. We would like to
thank the Chairman and the Committee for holding this hearing
today, and we would like to ask that our complete written
statement is submitted for the record.
In recent months, it has become clear that the issue of a
national animal identification system has become increasingly
more important to animal health officials, livestock producers
and consumers. Developing and implementing a national
identification system is far more complicated than simply
identifying every animal at birth. The pork industry considers
a national animal ID system part of protecting the nation's
critical food and agriculture infrastructure in case of an
animal disease outbreak or intentional or unintentional
introduction of a pathogen or toxin.
We believe that most Americans now better understand the
importance of animal health in protecting food security and
safety in this country. We also believe that they are willing
to support the development of an affordable, accurate and
sustainable mandatory national animal ID system. I would like
to focus my comments today on three areas: first, the pork
industry's current mandatory swine identification system; ways
to enhance the current swine system; and finally comment on
where the pork industry sees outstanding issues in further
developing the national animal ID system.
Today, we have five categories of mandatory ID for swine in
interstate commerce: one, individual ID for all replacement
breeding swine; two, individual ID for all breeding swine at
commingling or slaughter; three, ID of feeder swine; four,
market swine identified back to their owner at federally
inspected plants; and, five, feeder swine movements across the
state lines within a production system based on written health
plans and production records.
The current interstate swine ID system has been in place
since 1988, and we recognize there are several areas where
enhancement is needed. First, the back tag system currently is
being used to identify culled breeding swine has a low tag
retention rate of about 15 to 20 percent. This retention rate
is the result of an identification system that does not meet
the species-specific needs in regard to handling the animals on
the way to market.
When a national premises ID system is implemented, it would
be possible to apply premises ID tags to our breeding animals,
thereby identifying the source farm. Second, the identification
of market hogs back to their last premises instead of the
owners' mailbox will result in a more rapid and accurate
traceback to the suspect premise. Improved accuracy could
facilitate further traceback to origin premises because today,
generally, hogs move in lots. Recordkeeping in our industry is
by and large based on lot and group movements.
Today, as we speak, the U.S. pork industry is holding its
annual business meeting in Atlanta, Georgia. We expect at least
one public policy resolution to be presented in support of a
mandatory national animal ID system and expressing support for
the U.S. Animal Identification Plan or USAIP. The USAIP process
has been underway since April 2002. Over 109 stakeholders
representing 70 industry organizations have had input into the
USAIP.
Let us be clear on what the USAIP is and is not. It simply
defines the standards and framework for implementing and
maintaining a national animal ID system for all of U.S.
livestock. It includes standards for, one, national premises
numbering system; two, individual group and lot animal
numbering systems; and, three, performance standards for ID
devices.
NPPC believes that the USAIP represents a blueprint for
moving forward. We acknowledge that it does not have all of the
answers and that there are outstanding questions. I would like
to highlight five of those outstanding issues that require
further development, careful consideration and possible
Congressional action.
One, should the system be a mandatory or a voluntary
system? Two, how do we protect and maintain the confidentiality
of producer base? Three, how do we recognize the importance of
species-specific differences? Four, how do we maintain
technology flexibility; and, finally, five, funding: Who is
going to pay for what?
The first issue is about mandatory versus voluntary system.
Ours has been mandatory since 1988. From a disease management
perspective, we believe the system must be a mandatory program.
Otherwise, the ability to effectively manage diseases will be
compromised. The second issue is about how to protect the
confidentiality and security of the producer base. This issue
of confidentiality has not been effectively addressed by either
the USAIP or by USDA. We need to sort out whether USDA has
clear authority to protect the confidentiality and security of
the producers' base. If USDA does not, then Congress must
assure that the Department has the appropriate authority.
Producers are concerned about who will have access to their
vital economic and trade information, and until these issues
are addressed, pork producers are willing to record the base
locally but unwilling to report it nationally.
A third issue relates to species-specific implementation
plans. There are vast differences between the species,
including the diseases of concern, production practices, record
keeping, animal movements, animal value. The cattle industry
has embraced electronic ID, eartags or RFID as the
identification device of choice for their species. RFID makes
sense based on the value of a single bovine coupled with the
frequent commingling of animals of different owners. RFID at $2
a tag does make sense on an animal that is valued at $1,200
versus a $90 animal.
If cost of identification is based on breeding females, a
cow has one calf per year, and therefore, the cost per cow is
$2 per year. On the other hand, a sow will have 22 to 24 pigs a
year, and pork producers will face identification costs between
$44 and $48 per sow per year. That is why group and lot ID is a
cost-effective identification system to swine.
The fourth issue is related to technology flexibility. A
system allowing species differences must allow for technology
flexibility. New devices, methodologies and technologies come
out every day, and I am sure that the committee has seen many
technologies over the past several months. USDA must establish
a national base platform for animal health management purposes
and have the marketplace meet those standards. This not only
encourages innovation and competition; it also drives down the
cost to pork producers.
The fifth and final issue I wish to highlight is the issue
of funding. Who pays for what? We believe that the national
premises identification system is the basis for a national
animal ID system, and it is a Federal responsibility. We also
believe that USDA needs to develop the information system to
allow animal movement base to be captured, stored, and accessed
when needed whenever those base have anything to do with animal
health management purposes.
In conclusion, Mr. Chairman, and members of the Committee,
I have outlined why the National Pork Producers Council
supports a mandatory national identification system. I would
like to thank you again for holding this hearing, and I would
be pleased to answer any questions at the appropriate time.
[The prepared statement of Ms. Philippi can be found in the
appendix on page 83]
Senator Talent. Thank you, Joy. That is very useful
testimony.
Bob, why do you not go on ahead? I will tell the witnesses,
we have been notified we have votes starting at 4 o'clock, and
we can stay a little bit after 4 o'clock, because the first
vote will probably be--we will have an extra few minutes to get
over there to vote, but we are coming up against a deadline.
Bob, go ahead and go, please.
STATEMENT OF BOB LEHFELDT, AMERICAN SHEEP INDUSTRY ASSOCIATION,
LAVINA, MONTANA
Mr. Lehfeldt. Mr. Chairman and members of the Committee, on
behalf of the nation's sheep industry, I greatly appreciate
your leadership in conducting this hearing regarding
development of an animal identification program.
I am a sheep producer from Lavina, Montana, and today
represent my state association and the American Sheep Industry
Association. I can personally attest that livestock
identification was a hot issue at our national board of
director meeting in late January. ASI has been involved with
the USAIP since initiation and intends to provide a sheep-
specific ID plan to USDA APHIS this spring.
Our industry has a national animal health program in place.
That includes a identification system, namely, the Scrapie
Eradication Program. We have over 50,000 sheep operations
nationwide, already enrolled with a premise identification and
millions of identification tags distributed. This program,
implemented by regulation in August of 2001, provides a basis
for our view and we believe a model for fitting the sheep
industry into a national animal ID system.
We approve national policy at our board meeting, and I
believe these points are important for discussion. One, the
cost of identification supplies and devices should be provided
by the public sector. A national ID system for livestock should
not duplicate our National Scrapie Eradication Program ID
requirements. Transition into a livestock system must be
planned and announced well in advance, with supplies available
through a well-organized distribution channel.
We have a wide variance of production systems for sheep in
the U.S., and the ID program should accommodate all, including
group movement of animals through feeder and slaughter
channels. A national ID system should contribute to the
management, marketing and business needs of the US sheep
industry. A national ID system for sheep should be thoroughly
field tested before implementation to demonstrate that the
technology is compatible with normal industry operations.
Implementation of this system should not economically
burden any sector of the U.S. sheep industry. The system ought
to be thoroughly reviewed and field-tested prior to
implementation. This includes the base base function, which
needs to be provided and maintained by the Federal Government.
We must recognize the needs of the entire industry involved
from auction markets to processors as well as ranchers such as
myself.
It is important to remember on the cost side that cost of
an ID on a $125 lamb is much larger than that on a market steer
worth many more times. An additional item that is weighing
heavily in our sheep ID discussion is the need to identify
sheep and lambs by lot or group, similar to our feeder and
slaughter lambs today under our Scrapie Eradication Program
requirements. Such a system makes more sense when hundreds of
lambs per truckload are moving through the feed lot and packing
plant.
Key issues that I believe must be addressed on the sheep ID
group includes procedures for lost tags, compatibility of all
ID tags and associated equipment on a national basis, and
privacy of base collected by a national animal identification
program.
Thank you, and I would be pleased to answer questions.
[The prepared statement of Mr. Lehfeldt can be found in the
appendix on page 93.]
Senator Talent. Thank you, Bob.
Mr. Ostberg.
STATEMENT OF RONALD OSTBERG, MONTANA FARMERS UNION MEMBER,
SCOBEY, MONTANA
Mr. Ostberg. Thank you, Mr. Chairman; also, I would like to
thank or give a special thanks to Senator Max Baucus for his
kind comments in introducing us earlier here today.
For the record, Mr. Chairman, and Senator Nelson, I am Ron
Ostberg. I am a cattle producer in the west central part of
Montana. I can also say that I come from a farming and ranching
family; that we have had somebody from our family live on that
land for almost 100 years. My granddad on my dad's side
actually filed for homestead on the home place there on
September 8, 1909. We are getting close to that. That is quite
an accomplishment as well.
I am also here today representing the National----
Senator Talent. Maybe you could have us out for the 100th
anniversary.
Mr. Ostberg. I would love to.
Senator Talent. When we get back from Switzerland, we
will----
[Laughter.]
Mr. Ostberg. Maybe I could just go with you to Switzerland,
and we could work that out.
Senator Talent. We would celebrate there, yes.
Mr. Ostberg. I am also here representing and testifying on
behalf of the National Farmers Union and the Montana Farmers
Union as well, where I am a lifetime member. The National
Farmers Union is meeting today in my home state as we speak.
They are conducting their 102d annual convention there, and one
of the issues that they are working on is this specific issue
here. As soon as they do get that policy identified and
finalized, they will be sharing that with the committee, Mr.
Chairman, and the Members of Congress.
I would like to highlight five of the major concerns that
NFU and I have relative to the many animal identification
proposals being considered and explain why these concerns must
be addressed before any national animal ID program is further
pursued or implemented.
No. 1 is the ability of an identification program to
enhance both food safety and animal health, and there has been
some discussion, and it is great to be able to listen to all of
the comments that were previously offered here today; there was
some discussion specifically between Senator Harkin and Under
Secretary Hawks in regard to how far the program was really
going to go.
We talked about animal diseases, and then, Senator Harkin
brought up the concern that was raised to him from Wal-Mart.
Now, I would guess, and maybe I should not do that, but I have
been known to do this before and get into trouble, but I would
guess that Wal-Mart's concern would probably be food safety.
That is something that the Committee needs to take into account
when you look at the total programming here and not just
address animal health issues, some parts of industry are
looking for food safety, and I know consumers are looking for
food safety.
I will try to go through these a little quick here.
Otherwise, I will not be redundant. Everybody else has probably
touched on some of the same concerns. The second issue that I
would like to address is the cost burden of implementing and
maintaining ID systems on livestock producers. That one has
been talked about quite a bit; again, I would like to relate my
comments to some of the other discussion that was held here
earlier today.
Dr. Schmitz talked about the program that he had there in
Switzerland, and that the and Senator Baucus talked about the
branding program that we have in Montana. If I remember
correctly, there is not too many states that do have a branding
program, and I have been told that there are maybe 14 states in
the United States that actually have a branding program. They
tell us that Montana probably has the best branding
identification system in the nation.
The program that I use out there right now on my farm and
ranch is that I do brand all of my animals. That gives an
ownership identification to those animals. I also eartag all of
my animals. My eartags identify the lineal descent of the
animals. I can look at a calf out there; I know immediately who
the mother of that calf is. I can go back to the record books,
and I can tell you who the grandmother and the great-
grandmother was of that cow.
We do have that information there, and I would be more than
happy to share that with any program if that would be something
that they would care to work into or visit with them in regards
to setting up something like that.
Going through this here pretty quick, in regards to the
costs, I do want to touch a little bit on that. It has already
been said, but I would like to say it again that the livestock
producers are the ones who are going to be on the front lines
on this program's initiation. We are concerned today that a
disproportionate amount of the cost associated with an animal
ID system will fall on the producers, particularly the small
producers, in a way that makes them less positioned to remain
competitive in the marketplace.
This was talked about earlier, but I would like to mention
this again: according to the USDA, a livestock identification
system is estimated to cost from $70 million to $120 million
per year, and that is considerably more than the $33 million
proposed in the 2005 fiscal ag budget. We believe that it is
appropriate for the public to bear a substantial portion of
both the development costs as well as those associated with the
day-to-day management of the program.
The third issue that I would like to raise, the third
concern, is the confidentiality of proprietary information that
is collected. There has been a lot been said about that one
already, so I will try not to be redundant on that. I do not
think that I have any points here that--you do have my written
comments, too, Mr. Chairman, so they are in that.
The fourth issue that we raise is the producer liability
protection issue. Assuming an animal identification system does
in fact enhance our capacity to detect and control those
commodities and products which may have adverse food safety,
human or animal health implications, the issue of legal
liability must be considered. It should be expected that the
use of a traceback system will prompt parties to attempt to
establish that any products which do not meet safety and health
standards resulted from actions taken by others within the food
system.
Because the potential costs of identified food safety and
health issues can be significant and will tend to increase as
products move through the food chain, we are concerned about
the process that will be utilized in establishing any liability
and the potential financial obligations a process could create
for market participants. Our final concern, and that one has
not been voiced here yet today, and that is the relationship of
an animal ID program to country of origin labeling, and I am
sure that you have never heard of that one before. Just
kidding.
Actually, we feel that mandatory country of origin
labeling, as directed in the 2002 Farm Bill, should be
immediately implemented. We believe that Secretary Veneman has
the Congressional authority and discretion to implement this
program in a common sense that bears minimum burden and cost on
producers, processors and retailers.
Despite the 2-year delay of implementation of country of
origin labeling included in the fiscal year 2005 omnibus
appropriations bill, the law still requires USDA to move
forward in promulgating a final rule by September 30 of this
year. After the labeling program has been implemented and at
the point an animal identification program is up and running,
we believe it is necessary to coordinate the two programs so
that U.S. livestock producers will not find themselves paying
the bill for the benefit of processors and retailers without
achieving any market benefits.
We would like to see the information gathered through a
national animal identification program maintained and utilized
to augment mandatory country of origin labeling at the retail
level. It is our hope that the discussion of implementing an
animal identification program does not delay implementing the
already mandated country of origin labeling law.
American agricultural producers want a labeling program.
American consumers want a labeling program. When the two
programs are coupled, consumers will be better able to select
food products with the knowledge that new steps have been taken
to strengthen our capacity to identify and contain food
pathogens or other food safety factors prior to the products
reaching the retail market.
In closing, Mr. Chairman, the National Farmers Union and I
ask that full consideration be given to all of our concerns
before any legislative or administrative action is taken to
implement an animal identification program. I would like to
thank you again for the opportunity that I have had here to
testify before you today. We both, the National Farmers Union
and myself, look forward to working with members of this
Subcommittee and other Members of Congress as development of an
identification system moves forward.
That includes a trip to Switzerland, and I would be happy
to answer any questions that you might have. Thank you.
[The prepared statement of Mr. Ostberg can be found in the
appendix on page 96.]
Senator Talent. Thank you, Mr. Ostberg. I thank you for
summarizing your testimony and thank all of the witnesses for
coming such a long way to give us the benefit of their
practical experience, and I will recognize Senator Nelson.
Senator Nelson. Well, thank you, Mr. Chairman. I too thank
our witnesses. This is obviously a very important issue, and it
has to be resolved. Clearly, the lost opportunity and the lost
costs or lost income from the BSE incident is an indication
that we have to proceed to do something to improve not only
animal health, but, as you say, food safety as well.
Credibility in the world is important to that, but it is always
about who pays. We understand that.
While the lost costs and lost income from the BSE incident
probably far outweighs what the cost of this program is, nobody
wants to minimize what the cost is, nor do we want to ignore
who has to pay for it. We need to find a solution to that so
that it is fair, not disproportionate and ultimately delivers a
better product to the public so that we can all enjoy the
commerce, and the ag industry can benefit from it as well.
Thank you very much. I appreciate it. Thank you, Joy,
particularly.
Thank you, Mr. Chairman.
Senator Talent. I thank the Senator for his remarks.
They have started the series of votes, so Senator Nelson
may need to go. I am going to continue the hearing just for a
couple more minutes. I cannot pass up the opportunity to ask
you all to comment on a couple of things anyway.
Let me find Dr. Schmitz's testimony here. Yes. I have
consistently heard concerns, which I can certainly understand
and, in fact, share, about confidentiality. Mr. Ostberg shared
it and made the point, that it was redundant, because others
had said the same thing. I do not know if you all were
listening to Dr. Schmitz's testimony about what was going on in
Switzerland, but there is an interesting point that he has
raised that we are going to have to confront at some point.
He says allow the maximum value to be made from the base
collected; regulate access rights to protect the rights of the
base owners but impose no more base access restrictions than
really necessary. Make sure the benefits go to the owners of
the base; that means to the end users. The way it works in
Switzerland, I take it, is that he mentioned breeding
associations have access with the permission of the producers.
If you have a relationship worked out with some kind of an end
buyer or supermarket or something, they may be allowed to have
access to facilitate that relationship.
They seem to have opened it up there a little bit more than
we anticipate opening this up or than we are comfortable doing
at this stage. Let me ask two questions relating to the base
base and just get your comments on it. First of all, are you
and the industries you represent more comfortable with the
Government having access to base that is largely owned and
operated by a private entity or association, as I understand it
is in Switzerland, or vice versa. In other words, would you be
more comfortable with the Government having access to base
managed by a private association or ownership, or would you be
more comfortable if there were private owners that had access
to Government-run base and--and this relates to that second
question there--how comfortable, having heard what Dr. Schmitz
said, how open are you to that situation where if once we
developed this system, if a producer gives permission, allowing
the access to the base by a breeding association or a retail
buyer or something?
I was not marvelously clear with that, but you all are
intelligent, and maybe you got it enough to comment on it.
Would anybody like to share?
Mr. Ostberg, please, go ahead.
Mr. Ostberg. Mr. Chairman, Senator Talent, I would love to
address that one.
One of the main concerns that I have, and I guess this one
might not be too hard to guess and probably would speak for a
lot of others would as well, would be when it comes to the
pocketbook is how the confidentiality issue concerns us. Dr.
Schmitz made the comment in regards to information becoming
available to IRS. IRS knows more than enough about me already,
and I do not think I could tell them anything else, including
the numbers of cattle I have. They already know that. I do not
have any concerns in that regard.
Where I do have the concern, again, is back to the
pocketbook, and that is when it comes to marketing these
animals. We have seen this information or this kind of
information used against us in the market prices that we
receive; no matter what the commodity is, we have seen this a
number of different times. Your question, Mr. Chairman, was
specifically in regard to whether we let the Federal Government
address this issue or private enterprise.
Senator Talent. Just generally, if you heard Dr. Schmitz's
description of how they have allowed access for certain
purposes with permission, which is one of the ways that they
make this pay for itself; in other words, this helps facilitate
transactions, so I know you have all just heard it for the
first time. I read it, but I have really just heard it for the
first time. You may not want to comment, but if you have it, I
would love to hear it.
Mr. Ostberg. My comments on that, Mr. Chairman, would be
that either way we go, even with the Government, the
information is public. Private enterprise's is public. There
was some discussion earlier here today that addressed the
concern or the request, actually, that was conveyed to the
committee here that they come up with some specific language
that addresses the proprietary information and the withholding
of that information anyplace, and again, I suppose that we
could include some language in there that would provide for,
yes, if we have the consent of the individual producers.
Now, depending again on how far you go with this ID system
here, and to cover the food safety issue, you need to go much
further than just from the producer to the processor. There are
too many people and too many other interests out there that
have an interest further down the food chain. You need to
address that concern to other parts of industry as well.
Thanks for the question, Mr. Chairman.
Senator Talent. Mike.
Mr. John. I would like to address that just briefly,
Senator.
It depends on the perspective that you take on what the
goal of the ID system is, and if it is animal health and
disease related, then probably a combination of private and
Government-type participation would be a more reasonable
direction than just saying it is going to be one way or the
other. I would say as far as keeping costs out of the system
that if there can be a competitive component in the free market
system to deal with managing the production and the
communication between the segments that we will probably see it
offered at a lower cost and maybe a more efficient direction
than having it all contained in a centralized Government base
base.
As it relates to analysis for tracking animals and
isolating an animal disease, obviously, the Government is going
to have to have access to that base in some manner, and good
science will decide whether that means it comes from a single
base base with just the key components of that ID or whether it
is going to come from a series of private base bases.
As far as the components of communicating between the
segments on the things that add value to animal agriculture,
those need to be kept privately.
Senator Talent. OK; yes.
Ms. Philippi. If I could add just a little comment there,
too, I have been in a couple of meetings on this
confidentiality discussion, and one thing that was brought
forward was we do not mind if the Government can have access to
come back and find where our premise is; we do not want that
public. Because especially in our industry, we have those that
would love to know where every hog farm is in the United
States.
Senator Talent. Right.
Ms. Philippi. We have discussed that at length. The other
thing is for the animal health issues, we believe the
Government needs to have access to that.
Senator Talent. Yes, I would just keep that in mind,
because we have all talked about the costs of the
systematically emergency, and to the extent that with, of
course, the permission of producers, the system can be involved
in adding value, that generates streams of income that might
help to pay for the system, which, of course, we would all
like, because, to that extent, neither the taxpayers nor the
producers have to pay for it.
That is the first time I have heard of it. I wanted to get
your comments.
I would have other questions, but I am told there is about
a minute and a half left in the first vote, and on the off
chance that for the first time in its history, the Senate
closes a vote on time, I better get over there to vote.
I am very grateful, the whole Subcommittee is, to you all
for coming such a long way and for the great contribution that
you have made to the hearing, and I will adjourn the hearing
now.
Thank you.
[Whereupon, at 4:16 p.m., the Subcommittee was adjourned.]
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A P P E N D I X
March 4, 2004
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DOCUMENTS SUBMITTED FOR THE RECORD
March 4, 2004
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QUESTIONS AND ANSWERS
March 4, 2004
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