[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
            HEARING TO REVIEW ANIMAL IDENTIFICATION SYSTEMS

=======================================================================


                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                     LIVESTOCK, DAIRY, AND POULTRY

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 11, 2009

                               __________

                           Serial No. 111-02


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            FRANK D. LUCAS, Oklahoma, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        BOB GOODLATTE, Virginia
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 TIMOTHY V. JOHNSON, Illinois
DENNIS A. CARDOZA, California        SAM GRAVES, Missouri
DAVID SCOTT, Georgia                 MIKE ROGERS, Alabama
JIM MARSHALL, Georgia                STEVE KING, Iowa
STEPHANIE HERSETH SANDLIN, South     RANDY NEUGEBAUER, Texas
Dakota                               K. MICHAEL CONAWAY, Texas
HENRY CUELLAR, Texas                 JEFF FORTENBERRY, Nebraska
JIM COSTA, California                JEAN SCHMIDT, Ohio
BRAD ELLSWORTH, Indiana              ADRIAN SMITH, Nebraska
TIMOTHY J. WALZ, Minnesota           ROBERT E. LATTA, Ohio
STEVE KAGEN, Wisconsin               DAVID P. ROE, Tennessee
KURT SCHRADER, Oregon                BLAINE LUETKEMEYER, Missouri
DEBORAH L. HALVORSON, Illinois       GLENN THOMPSON, Pennsylvania
KATHLEEN A. DAHLKEMPER,              BILL CASSIDY, Louisiana
Pennsylvania                         CYNTHIA M. LUMMIS, Wyoming
ERIC J.J. MASSA, New York
BOBBY BRIGHT, Alabama
BETSY MARKEY, Colorado
FRANK KRATOVIL, Jr., Maryland
MARK H. SCHAUER, Michigan
LARRY KISSELL, North Carolina
JOHN A. BOCCIERI, Ohio
EARL POMEROY, North Dakota
TRAVIS W. CHILDERS, Mississippi
WALT MINNICK, Idaho

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

                 Nicole Scott, Minority Staff Director

                                 ______

             Subcommittee on Livestock, Dairy, and Poultry

                     DAVID SCOTT, Georgia, Chairman

JIM COSTA, California                RANDY NEUGEBAUER, Texas,  Ranking 
STEVE KAGEN, Wisconsin               Minority Member
FRANK KRATOVIL, Jr., Maryland        BOB GOODLATTE, Virginia
TIM HOLDEN, Pennsylvania             MIKE ROGERS, Alabama
LEONARD L. BOSWELL, Iowa             STEVE KING, Iowa
JOE BACA, California                 K. MICHAEL CONAWAY, Texas
DENNIS A. CARDOZA, California        ADRIAN SMITH, Nebraska
BETSY MARKEY, Colorado               DAVID P. ROE, Tennessee
WALT MINNICK, Idaho
------

              Chandler Goule, Subcommittee Staff Director

                                 ______

                                  (ii)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Neugebauer, Hon. Randy, a Representative in Congress from Texas, 
  opening statement..............................................     3
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     4
    Prepared statement...........................................     6
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     3

                               Witnesses

Clifford, D.V.M., John R., Deputy Administrator, Veterinary 
  Services, Animal and Plant Health Inspection Service, U.S. 
  Department of Agriculture, Washington, D.C.....................     7
    Prepared statement...........................................     8
    Supplemental material........................................   142
Nutt, Bill, President-Elect, Georgia Cattlemen's Association, on 
  behalf of National Cattleman's Beef Association Cattle Health 
  and Well-Being Committee, Cedartown, GA........................    36
    Prepared statement...........................................    38
    Supplemental material........................................   142
Thornsberry, D.V.M., Robert M. "Max", President of the Board, R-
  CALF USA, Richland, MO.........................................    41
    Prepared statement...........................................    42
    Supplemental material........................................   126
Butler, Donald P., President, National Pork Producers Council, 
  Clinton, NC....................................................    56
    Prepared statement...........................................    58
Jordan, D.V.M., Karen, Owner, Large Animal Veterinary Services, 
  Co-owner, Brush Creek Swiss Farms, on behalf of National Milk 
  Producers Federation, Siler City, NC...........................    62
    Prepared statement...........................................    63
DeHaven, D.V.M., W. Ron, MBA, Chief Executive Officer, American 
  Veterinary Medical Association, Schaumburg, Il.................    65
    Prepared statement...........................................    66
Williams, Dr. Rob, Counsellor (Agriculture), Embassy of 
  Australia, Washington, D.C., Accompanied by Mr. Dean Merrilees, 
  Minister Counsellor (Agriculture), Embassy of Australia, 
  Washington, D.C................................................    78
    Prepared statement...........................................    80
St. Cyr, Kerry, Executive Director, Canadian Cattle 
  Identification Agency (CCIA), Calgary, Alberta, Canada.........    84
    Prepared statement...........................................    85

                           Submitted Material

Kirk, Kevin, Special Assistant to the Division Director, Michigan 
  Department of Agriculture, Animal Industry Division, submitted 
  statement......................................................   112
Kolb, Shane, DRA Livestock Team Chair, Dakota Rural Action, 
  submitted statement............................................   114
Libby, Russell, Executive Director, Maine Organic Farmers and 
  Gardeners Association (MOFGA), submitted statement.............   120
McGeary, Judith, Executive Director, Farm and Ranch Freedom 
  Alliance, submitted statement..................................    98
    Submitted letter.............................................   106
Mortenson, Todd, President, South Dakota Cattlemen's Association, 
  submitted statement............................................   122
Nachtigall, Margaret, Executive Director, South Dakota 
  Stockgrowers Association, submitted statement..................   124
Stockton, Deborah, Executive Director, National Independent 
  Consumers and Farmers Association (NICFA), submitted statement.   138
The National Family Farm Coalition, submitted statement..........   109
    Submitted letter.............................................   106
Texas Landowners Council, submitted letter.......................   106
Submitted questions..............................................   584
.................................................................


            HEARING TO REVIEW ANIMAL IDENTIFICATION SYSTEMS

                              ----------                              


                       WEDNESDAY, MARCH 11, 2009

                  House of Representatives,
     Subcommittee on Livestock, Dairy, and Poultry,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 1300, Longworth House Office Building, Hon. David Scott 
[Chairman of the Subcommittee] presiding.
    Members Present: Representatives Scott, Costa, Kagen, 
Kratovil, Holden, Boswell, Baca, Markey, Minnick, Peterson (ex-
officio), Neugebauer, Goodlatte, Rogers, King, Conaway, Smith, 
and Roe.
    Staff Present: Claiborn Crain, Nathan Fretz, Alejandra 
Gonzalez-Arias, Chandler Goule, Scott Kuschmider, Robert L. 
Larew, John Riley, Rebekah Solem, Patricia Barr, John Goldberg, 
Tamara Hinton, Pete Thomson, and Jamie Mitchell.

OPENING STATEMENT OF THE HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. This hearing on the Subcommittee on 
Livestock, Dairy, and Poultry to review animal identification 
systems, including the subject of efficient use of taxpayers' 
resources as required by clause 2(n) of House rule 11 will come 
to order.
    The Chairman. I would like to begin by welcoming everyone 
to the first hearing of the Livestock, Dairy and Poultry 
Subcommittee in the 111th Congress. It is indeed a distinct 
honor and a privilege to have been selected to chair this very 
important Subcommittee. I look forward to working with such an 
illustrious and knowledgeable group of my fellow Members of 
Congress as we have on this Subcommittee as we move to complete 
our long and perhaps difficult agenda.
    I would also like to welcome our distinguished witnesses. I 
greatly look forward to hearing your testimony and tapping into 
your expertise as we explore the topic of today's hearing, the 
National Animal Identification System.
    The subject on the Subcommittee's agenda today is indeed a 
very complex one; and, at times, it will be difficult to 
navigate through. No issue is more emblematic of the 
difficulties we face moving forward as is animal ID. It is my 
hope, however, on this and further issues that we will be able 
to work together in a positive fashion to find common ground 
and to address the issues we face with decorum and mutual 
respect. The constituents, which we all serve, deserve no less 
from us.
    Regarding the subject of today's hearing, I believe that a 
national animal ID system has myriad benefits. A mandatory 
system would let us know where infected animals are so that we 
could reroute transportation to prevent disease from spreading. 
It would also help protect producers against the spread of 
minor animal diseases as well as from the devastating economic 
effects of BFE, foot and mouth disease, and TB. Finally, it 
will save the government money and provide a vital tool in 
maintaining the security and integrity of the food supply, 
which is one of my greatest concerns as a Member of Congress, 
as the Chairman of this Subcommittee, and as a consumer, and 
certainly as a parent and a grandparent as we know and we plan 
for future generations in our country.
    In fact, we are currently planning a joint hearing with the 
Committee on Homeland Security to discuss our preparedness for 
an initial or catastrophic outbreak and the ways in which that 
would jeopardize our food security in the United States due to 
a lack of mandatory animal ID system.
    With respect to animal diseases, a robust NAIS with large-
scale participation has a potential to expedite that trackback 
and not only prevent further corruption of the food chain but 
ultimately, lessen the economic impact of any such outbreak.
    But there are, of course, considerable questions that need 
to be addressed before a national animal ID system can achieve 
its maximum value. The economic impact on small and mid-sized 
producers is very real and needs to be taken into consideration 
when determining whether or not to compel producers to 
participate in this system.
    Additionally, I understand the privacy concerns that have 
been expressed to me, especially from some of our friends in 
the cattlemen's associations. Shielding proprietary business 
information and protecting farmers from unwarranted protests 
and business interruptions is crucial. However, I strongly 
believe that the benefits of a National Animal ID System in 
terms of animal health, public safety, and in maintaining the 
economic viability of our agriculture sector, domestically and 
through exports, far outweigh the potential costs.
    In order to make this program worthwhile and effective, we 
need at least 97 percent participation; and it seems very 
unlikely that we will ever get there at that level under a 
voluntary system. We will hear on our third panel how 
successful a mandatory system is. But if any one of our 
panelists today has advice on how to convince producers to 
participate, short of compulsion, please feel free to share it 
with this group. Because we are far past time for this system 
to be fully up and running. The security of our food needs to 
be protected now, not somewhere down the road in the future.
    I thank everyone for coming today and look forward to this 
discussion.
    The Chairman. With that, I will turn to our Ranking Member, 
Mr. Neugebauer, for any comments he might wish to make.
    [The prepared statement of Mr. Scott follows:]

 Submitted Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    I would like to begin by welcoming everyone to the first hearing of 
the Livestock, Dairy and Poultry Subcommittee in the 111th Congress. It 
is indeed a distinct honor and a privilege to have been selected to 
chair this Subcommittee. I look forward to working with such an 
illustrious and knowledgeable group of Members, as we have on this 
Subcommittee, as we move to complete our long and perhaps difficult 
agenda. I would also like to welcome our distinguished witnesses. I 
greatly look forward to hearing your testimony and tapping into your 
expertise as we explore the topic of today's hearing, the National 
Animal Identification System.
    The subject on the Subcommittee's agenda today is a complex one, 
and at times will be difficult to navigate through. No issue is more 
emblematic of the difficulties we face moving forward as is animal ID. 
It is my hope however, on this and future issues, that we will be able 
to work together in a positive fashion to find common ground and 
address the issues we face with decorum and mutual respect. The 
constituents we all serve deserve no less from us.
    Regarding the subject of today's hearing, I believe NAIS has myriad 
benefits. A mandatory system would let us know where infected animals 
are, so that we could re-route transportation to prevent disease from 
spreading. It would help protect producers against the spread of minor 
animal diseases, as well as from the devastating economic effects of 
BSE, FMD and TB. Finally, it would save the government money and 
provide a vital tool in maintaining the safety and integrity of the 
food supply - which is one of my greatest concerns as a Member of 
Congress, as the Chairman of this Subcommittee, and as a consumer. In 
fact, we are currently planning a joint hearing with the Committee on 
Homeland Security to discuss our preparedness for an initial or 
catastrophic outbreak and the ways in which that would jeopardize our 
food security in the United States do to a lack of a mandatory animal 
ID system.
    One of the chief problems during any outbreak of food-borne illness 
is to trace the source of that illness, whether it is confined to 
animals or has the potential to spread to humans, back to its source. 
With respect to animal diseases, a robust NAIS with large scale 
participation has the potential to expedite this trackback, and not 
only prevent further corruption of the food chain but also limit the 
potential for human illness and ultimately lessen the economic impact 
of any such outbreak.
    But, there are of course considerable questions that need to be 
addressed before NAIS can achieve its maximum value. The economic 
impact on small and midsized producers is very real, and needs to be 
taken into consideration when determining whether or not to compel 
producers to participate in this system. Additionally, I understand the 
privacy concerns that have been expressed to me. Shielding proprietary 
business information and protecting farmers from unwarranted protests 
and business interruptions is crucial. However I strongly believe that 
the benefits of NAIS in terms of animal heath, public safety, and in 
maintaining the economic viability of our agricultural sector, 
domestically and through exports, far outweigh the potential costs.
    In order to make this program worthwhile and effective, we need at 
least 97% participation, and it seems unlikely that we will ever get 
there under a voluntary system. We will hear on our third panel how 
successful a mandatory system is. But if any one of our panelists today 
has advice on how to convince producers to participate short of 
compulsion, please feel free to share it with the group, because we are 
far past time for this system to be fully up and running.
    I thank everyone for coming today, and look forward to the 
discussion. With that I will turn to the Ranking Member, Mr. 
Neugebauer, for any comments he may wish to make.

       OPENING STATEMENT OF THE HON. RANDY NEUGEBAUER, A 
             REPRESENTATIVE IN CONGRESS FROM TEXAS

    Mr. Neugebauer. Thank you, Chairman Scott, for calling this 
Subcommittee hearing in the 111th Congress, our first together 
as Chairman and Ranking Member, on the topic of animal 
identification.
    I expect we will hear from a lot of witnesses today that 
say that animal identification is a good thing. I expect we 
will hear about the benefits of improved disease monitoring, 
rapid traceback investigations in cases of animal disease 
outbreaks. Some will discuss the economic benefits of improved 
herd management and premiums that some sellers enjoy as a 
result of having source-verified cattle to provide to a market 
that currently rewards such information.
    This is all fine, and I am interested in learning more 
about it. However, I would also invite my colleagues to pay 
particular attention to the testimony of our witnesses who are 
concerned about the potential pitfalls of a mandatory animal 
identification system and the many unanswered questions there 
remain about just exactly what this system would entail.
    For instance, what are the costs of a mandatory system? In 
the past, I have heard from the cattle sector alone that 
ongoing costs could be as much as $200 million a year. Will the 
benefits of a mandatory system outweigh the costs, or will it 
simply be a tax on the livestock sector?
    A mandatory identification program will create tremendous 
amounts of data. Many of our constituents consider that to be 
proprietary. We have all heard stories about unintentional and 
intentional violations of private information. How will the 
data be protected? After many years of discussion, I have yet 
to hear a convincing explanation of how our constituents' 
information will be protected.
    I have several questions about how the system will work: 
How often producers will need to report the movement of 
animals; what type of penalties would be associated with 
mandatory systems for producers found to be out of compliance. 
Taxpayers have spent almost $130 million on the National Animal 
Identification System. What has this money brought us, and what 
will be the final cost of the system?
    We should also take time to learn from the experiences of 
livestock producers in Australia and Canada, who have both had 
mandatory ID systems. Have the systems improved market returns 
for their producers, and have they experienced improved herd 
health?
    Thank you again, Mr. Chairman, for calling this hearing. I 
am certain my colleagues will have many more questions, and I 
look forward to today's give-and-take session.
    The Chairman. Now I recognize the Chairman of the full 
Committee, Mr. Peterson.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Thank you, Mr. Chairman.
    I want to congratulate you and Mr. Neugebauer on moving up 
to the leadership of this Subcommittee. We expect great things 
out of you; and we know you will do a great job leading this 
Subcommittee, as Mr. Boswell did so ably during his tenure 
before he moved on to another Subcommittee. So we appreciate 
your leadership, and I think you recognize there are lots of 
issues that have to be dealt with in this Subcommittee. So you 
guys are going to be busy.
    So I thank you for calling this hearing today, and I want 
to acknowledge, as I said, your first hearing. I know that you 
guys will be a strong voice for animal agriculture in the 111th 
Congress.
    Today's hearing is the first of multiple hearings our 
Committee will call to handle animal identification systems. 
This topic has been covered by this Committee several times 
since USDA established the national identification system in 
2004 as a way to enhance its animal health protection efforts. 
But here we are after 5 years, and it is sad to say that we 
really haven't made much forward progress.
    NAIS has received $128 million from appropriated or loaned 
funds and has spent over $107 million to provide a traceback 
system in the event of an outbreak of a major animal disease. 
Yet many crucial aspects of the program show little promise of 
being substantially implemented.
    Just 35 percent of the animal premises are presently 
registered. Only 5 percent of the cattle have NAIS-approved AIN 
tags; and almost none of the intermediate markets and 
slaughterhouses are enrolled in the program, which has hindered 
the bookend approach to traceability that the animal ID system 
was conceived.
    Agency staff have told us that, without a change to a 
mandatory system or economic incentives to producers in the 
industry, the program probably would never be effective in 
providing the country with a reliable traceback system.
    I can't believe that after 5 years we are still pretty much 
in the same place, despite the millions of dollars that have 
been thrown at this system. This Committee has lots of 
questions about how the money was spent by NAIS, by the states, 
by the industry partners, given the below-average results that 
we have seen to this point.
    I still believe we need a mandatory animal ID system, and I 
have introduced bills in the past that would implement one, and 
I understand that some groups out there are still vigorously 
opposed to this idea. I would, however, caution those groups 
that when--and I think this is an issue of when, not if--a 
severe disease outbreak happens, don't come into my office and 
expect a government bailout because you were unwilling to move 
forward with this. You will not get a sympathetic ear from this 
Member if and when that happens.
    I just think we have our head in the sand if we think that 
we are going to be able to avoid this completely. And I don't 
think the government should be in a position of having to bail 
people out if people don't want to take up this matter. We are 
not very good at that, given what we are doing with the banks 
and so forth. We probably will bail people out, but I am not 
going to be one of those that is going to be involved in that.
    I think the stakeholders out there need to get together and 
resolve their differences and try to help us move this issue 
forward. I have said over the years that I would be willing to 
have the government pick up the costs of this system at the 
beginning to get it going. If we would have done this in the 
first place, the money that we would have spent would have gone 
a long ways to getting all of the tags and readers and 
databases in place. So we would like to figure out how this 
money was spent, and why we are in this position.
    We have been asked by our leadership to look into ways to 
reduce spending and waste that's happened here. I think this is 
a case of one of those instances, and I hope that we don't 
allow that to go forward in the future.
    I hope that we can examine why the current system hasn't 
worked, and why in my opinion why it won't work. Moreover, we 
need to examine what can be done in the future to improve our 
animal health system in the event of a disease outbreak.
    Once again, I appreciate today's witnesses being with us, I 
appreciate the leadership of the Chairman and Ranking Member, 
and I look forward to the testimony of our witnesses.
    The Chairman. Thank you very much, Mr. Peterson.
    [The prepared statement of Mr. Peterson follows:]

  Submitted Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
    Thank you, Chairman Scott, for calling this hearing today. I want 
to acknowledge your first hearing of the Livestock, Dairy, and Poultry 
Subcommittee. I know you will be a strong voice for animal agriculture 
in the 111th Congress.
    Today's hearing is the first of multiple hearings this year our 
Committee will call to examine animal identification systems. This 
topic has been covered by this Committee several times since the USDA 
established the National Animal Identification System in 2004 as a way 
to enhance its animal health protection efforts.
    Here we are after five years and it is sad to say that we really 
haven't made much forward progress.
    NAIS has received $128 million from appropriated or loaned funds 
and has spent over $107 million to provide a trace-back system in the 
event of the outbreak of a major animal disease. Yet many of the 
crucial aspects of the program show little promise of being 
substantially implemented. Just thirty-five percent of animal premises 
are presently registered; only five percent of cattle have the NAIS-
approved AIN tags; and almost none of the intermediate markets and 
slaughterhouses are enrolled in the program, which has hindered the 
bookend approach to traceability NAIS has conceived.
    Agency staff have told us that without a change to a mandatory 
system, or economic incentives to producers and the industry, the 
program would never be effective in providing the country with a 
reliable trace-back system.
    I can't believe after five years we are still in pretty much the 
same place despite the millions that have been spent on this system. 
This Committee has lots of questions about how the money was spent by 
NAIS, the states, and industry partners, given the below average 
results we have seen to this point.
    I still believe we need a mandatory animal ID system, and I 
introduced bills in the past that would implement one. I also 
understand that some groups are still vigorously opposed to this idea.
    I would, however, caution those groups that in the case of a severe 
disease outbreak, do not expect me to have a sympathetic ear when it 
comes to mitigating the economic costs of a market disruption. I think 
the stakeholders out there need to get together and resolve their 
differences, because I believe some people out there have their head in 
the sand if they don't understand the economic consequences of 
continuing to do what we have been doing.
    I hope that through this series of hearings we can examine why the 
current system hasn't worked and won't work, and what can be done in 
the future to improve our animal health system in the event of a 
disease outbreak.
    Once again, I appreciate today's witnesses for being here and I 
look forward to their testimony. Thank you, Chairman Scott, and I yield 
back.

    The Chairman. Members, in light of the fact that we have 
three panels before us, the Chair would request that other 
Members submit their opening statements for the record so the 
witnesses may begin their testimony, and this will ensure that 
we have ample time for the witnesses to be heard and ample time 
for all of our questions.
    The Chairman. With that, we certainly would like to welcome 
our first panel. The witness consists of Dr. John R. Clifford. 
Dr. Clifford is the Deputy Administrator to Veterinary 
Services, Animal and Plant Health Inspection Service, at the 
U.S. Department of Agriculture here in Washington.
    Dr. Clifford, welcome; and you may begin your testimony.

       STATEMENT OF DR. JOHN R. CLIFFORD, D.V.M., DEPUTY 
  ADMINISTRATOR, VETERINARY SERVICES, ANIMAL AND PLANT HEALTH 
INSPECTION SERVICE, U.S. Department OF AGRICULTURE, WASHINGTON, 
                              D.C.

    Dr. Clifford. Chairman Peterson, Subcommittee Chairman 
Scott, Ranking Member Neugebauer, thank you for the opportunity 
to testify before the Committee this morning.
    As the chief veterinary officer of the United States and 
the representative to the World Organization for Animal Health, 
I have witnessed the growing importance of animal 
identification to individual countries and on the world stage. 
More and more countries are requiring identification systems as 
a prerequisite to trade. Identification systems also ensure 
countries can manage their own exotic diseases that do not 
recognize international borders and consequently pose risk to 
life of livestock and public health.
    Traceability is a critical component the OIE reviews in 
determining the animal disease risk levels of member countries. 
Many wonder why the United States has not requested a 
negligible risk classification from the OIE. Frankly, unless we 
can demonstrate an effective animal ID system, it is highly 
unlikely that we will receive that classification.
    I believe that it is the U.S.'s responsibility to play a 
leadership role in animal health matters. While we have done a 
good job on numerous fronts, I do not believe we have done our 
best when it comes to national animal ID. Frankly, I am 
disappointed by the 35 percent participation rate by producers.
    My statement for the record explains several of the major 
challenges we face in building the system and the policy and 
operational changes made to address them. The result is that it 
can still take months for animal health officials to complete 
an animal disease investigation because records are often, at 
best, kept on paper. The lack of any official identification 
means that many more farms and ranches become part of a 
traceback, and without movement data we cannot identify 
potentially exposed animals.
    A recent example, of 199 positive cases of bovine TB 
identified in the U.S. Between late 2003 and early 2008, over 
84 percent of those animals did not have official USDA ID. That 
alone increased the amount of time and money AHPHIS and states 
spent in conducting tracebacks in 27 percent of the bovine TB 
investigations. The average time spent conducting a traceback 
was 199 days, an unacceptable level in today's world.
    To date, we have obligated $118.9 million to implement NAIS 
based on the policy direction set forth in the program. 
Initially, we planned a voluntary program that would eventually 
become mandatory. However, in August of 2006, in response to 
various concerns, then-Secretary Johanns decided that NAIS 
would be entirely voluntary at the Federal level and would be 
technology neutral. As a result, USDA was required to identify 
and test new technologies and expend significant efforts in 
convincing producers to participate.
    On the positive side, the efforts of the last 5 years have 
enabled us to build and link all the IT components of the 
system, standardize numbering systems so that we and our state 
partners have common frames of reference and test and deploy 
strategies for increasing traceability in key sectors of the 
livestock industries. While we have much work to do in terms of 
traceability for cattle, today we have very high levels of 
traceability in swine, poultry and the sheep sectors.
    Maintaining a functional system is not cheap. It is a 
bargain when you put it in perspective. Initial figures show 
that annual government and industry costs will exceed $200 
million. This roughly translates into a half a cent increase 
for a pound of red meat. We know an FMD outbreak would cost 
billions of dollars in terms of industry losses and APHIS and 
state response efforts. The question we need to ask then is if 
the cost of NAIS is worth the investment in costs to industry 
and consumers when compared to the results we will achieve. I 
absolutely believe that it is.
    In addition to dramatically improving our ability to 
effectively respond to animal health emergencies, NAIS will 
support the competitiveness of our livestock sector in 
international markets and consumer confidence in its food 
supply and its safety. APHIS has continued to move forward in 
building the system and implementing strategies laid out in the 
NAIS business plan. In doing so, we remain focused on program 
transparency and accountability.
    Secretary Vilsack and his team are conducting a full review 
of past spending within the program, and we continue to look 
for ways to improve program oversight. I know that some of the 
Secretary's other priorities, include implementing NAIS in a 
way that is sensitive to the unique qualities of different 
species' groups, protecting producers' private information, and 
providing producers with clear information about the program. 
The Secretary is carefully weighing the range of policy options 
available to him, and APHIS is ready to act on his priorities.
    We understand that the success of NAIS depends on strong 
collaborations with this Committee, producers, industry, and 
USDA; and we are committed to working with all of these key 
players in a transparent way that is responsive to the concerns 
of all stakeholders.
    Thank you. I would be happy to answer any questions.
    The Chairman. Thank you very much, Dr. Clifford. We 
appreciate your testimony.
    [The prepared statement of Dr. Clifford follows:]

 Prepared Statement of John R. Clifford, D.V.M., Deputy Administrator, 
 Veterinary Services, Animal and Plant Health Inspection Service, U.S. 
              Department of Agriculture, Washington, D.C.
    Chairman Scott, Ranking Member Neugebauer, and Members of the 
Subcommittee, thank you for the opportunity to testify before the 
Committee this morning. My name is Dr. John Clifford and I am the 
Deputy Administrator for Veterinary Services with the Department of 
Agriculture's (USDA) Animal and Plant Health Inspection Service 
(APHIS). In this position, I also serve as USDA's Chief Veterinary 
Officer.
    I appreciate the Committee's interest in our progress in 
implementing the National Animal Identification System (NAIS). We have 
expended significant resources, both financial and in staff time. While 
we have made progress, much remains to be done and we look forward to 
working with the Committee to reaching our goal of a modern, 
streamlined information system that helps producers and animal health 
officials respond quickly and effectively to animal disease events in 
the United states. NAIS is a long-term investment in emergency 
preparedness and response, competitiveness of our livestock sector in 
international markets, and consumer confidence in our food supply.
    I would like to begin by giving you a brief overview of NAIS, 
including what we have been doing, the challenges we have faced, where 
we are now, and our plans to continue enhancing the program. Finally, I 
will conclude by reporting on how we have spent the dollars provided to 
us.
    Before I start, I would like to mention that the Secretary is 
carefully weighing all of the options to determine how USDA and its 
partners can make NAIS more effective and successful. We understand 
that the success of NAIS depends on strong collaborations between this 
Committee, producers, industry and USDA. We are committed to redoubling 
our efforts in working with all of these key players in a transparent 
way and that is responsive to the concerns of all stakeholders.
NAIS History
    The Animal Health Protection Act (AHPA) of 2002 authorizes USDA to 
take measures to detect, control, or eradicate livestock pests or 
diseases in the United States. When we do detect an outbreak, we must 
quickly determine its source so we can stop disease spread. We must 
identify all infected animals and all animals exposed to them. By 
tracing back from the infected animal detected, we can find any other 
infected or exposed animals and establish quarantines to ensure that 
they do not move. Once we set quarantine boundaries to arrest disease 
spread, we concentrate on treating or removing infected or exposed 
animals to eliminate the disease. The faster we can trace the path of 
the initially detected diseased animal, the faster we can establish the 
quarantine-and with more precision so that we do not needlessly prevent 
healthy, unexposed animals from moving in commerce--and commence 
treatment or removal.
    Somewhat like the ``Golden Hour'' concept of emergency medicine for 
humans, for animal health we have found that being able to trace back 
from infected animals within 48 hours is vital in quickly containing 
and eliminating an incipient disease outbreak. To achieve such an 
ambitious goal, we must have a standardized animal identification 
system. For much of the second half of the 20th century, USDA conducted 
long term eradication programs for diseases like brucellosis and 
tuberculosis. We used animal identification systems for those programs. 
While certainly not the modern, standardized system we envision with 
NAIS, those systems did provide us with a solid base for trace back. 
The success of those programs led to a dramatic decline in the number 
of premises and animals registered in any identification program.
    Recognizing the lack of standardization and the increasing void in 
animal identification that would hamper our response capabilities to a 
disease outbreak, USDA, states, and industry have been working 
cooperatively to develop a unified NAIS for several years. This work 
assumed greater urgency when we witnessed the heavy losses associated 
with the foot and mouth disease (FMD) outbreak in the United Kingdom in 
2001. In 2003, a group of approximately 100 industry and government 
representatives--the National Identification Development Team--drafted 
the U.S. Animal Identification Plan. While the Team was still seeking 
support for the plan, the detection of a case of bovine spongiform 
encephalopathy (BSE) in the United States on December 23, 2003, brought 
even greater urgency. Within days, then-Secretary Veneman used her 
emergency authority to transfer $18.8 million to APHIS to accelerate 
NAIS implementation.
    I should note that while we started NAIS with a focus on animal 
health, we also know that 75 percent of emerging animal diseases are 
zoonotic; that is, they can affect humans as well. Accordingly, a fully 
functional NAIS may also have tangential, but substantial, human health 
and food safety benefits.
    Initially we envisioned a voluntary program that would eventually 
become mandatory. Also, we envisioned a system using standard 
technology. However in response to various concerns raised by some 
producers, small farmers, and some religious groups, then Secretary 
Johanns decided in August 2006 that NAIS would be entirely voluntary at 
the federal level. (States retained the option to make their 
participation mandatory, and several have done so.) Accordingly, we 
invested a great deal of effort-and money-in encouraging producers to 
voluntarily participate. I will provide more detail about those efforts 
later in my statement. Also, rather than establish a mandatory 
technology, we sought to make NAIS technology neutral, in hopes of 
stimulating competition that might lead to better pricing and more 
flexibility for voluntary participants.
NAIS Overview
    I would like to give you a brief explanation of the three 
components that make up NAIS-premises registration, animal 
identification, and animal tracing. The first phase of NAIS involves 
producers registering their premises containing livestock and poultry 
with their local state or tribal authorities. Premises information is 
critical to protecting U.S. agriculture because it gives us the ability 
to plot locations within a radius of an infected premise and determine 
the potential magnitude of a contagious disease as well as the 
resources needed to contain it. Additionally, it provides the 
foundation to achieve both animal identification and tracing.
    Just having a contact list of producers in a given area will help 
us respond quickly when an animal health emergency or significant 
disease event arises. These lists proved beneficial when a blizzard hit 
Colorado in January 2007. The State Department of Agriculture used the 
NAIS contact list to call ranchers, evaluate the well being of their 
livestock, and airdrop hay if needed.
    Animal identification, the second component of NAIS, provides 
participating producers and owners with a uniform numbering system for 
their animals; both as individuals or as a group or lot of animals. The 
actual identification protocol is sensitive to the unique qualities of 
different species groups, and the way they are raised and processed. 
For example, while individual animal identification is important for 
cattle, lot identification is more practical for poultry. The uniform 
numbering system links producers' livestock or poultry to the animals' 
birthplace or premises of origin. This is a valuable tool for producers 
and owners whose animals go into commercial production or are moved 
frequently. Each identification number provides a unique number for 
animals and the location or premises.
    The final NAIS component, animal tracing, is available through 
several Animal Tracking Databases (ATDs) maintained by states and 
private industry. Having states and industry maintain these ATDs is 
part of our plan to assure confidentiality for participants. The 
Federal government does not maintain this data; states and private 
entities do.
    Key animal tracing information includes the animal identification 
number, the premises identification number, and the date the animal was 
moved in or out of a premises. We use a ``bookends'' analogy for 
individual-animal traceability. There is a ``left bookend''--the birth 
record; ``books on the shelf''--animal movement records; and a ``right 
bookend''--the animal termination record. I want to emphasize that 
animal health officials will use the data only when an animal disease 
event warrants such use. This is another part of our commitment to 
protecting confidentiality.
Benefits of NAIS
    Animal health officials in the United States and around the world 
have long recognized that an efficient and effective system for the 
identification of premises affected or potentially affected by 
livestock diseases is an essential component of any animal health 
program. While an animal identification system will not prevent the 
onset of a foreign animal disease such as FMD, a fully implemented NAIS 
will provide for rapid animal tracking and disease containment. These 
are critical in mitigating the risks posed by potential disease 
outbreaks.
    Currently, it can take months for animal health officials to 
complete an investigation of an animal disease event because records 
are often, at best, kept on paper. Too often the lack of any official 
identification results in many more farms and ranches being part of a 
traceback as we are unable to determine the specific origin of the 
subject animal. Additionally, without movement data, we cannot 
determine potentially exposed animals. This exacerbates the traceback 
challenge.
    For example, of the 199 positive cases of bovine tuberculosis 
identified in the United States between late 2003 and early 2008, over 
84 percent of the animals did not have official USDA individual 
identification. As a result, USDA and state investigative teams spent 
substantially more time and money in conducting tracebacks, including 
an expanded scope of an investigation to identify suspect and exposed 
animals. The average time spent conducting a traceback involving 27 
recent bovine tuberculosis investigations was 199 days. This is simply 
not acceptable.
    With the rapid disease response capability that a successful NAIS 
will provide, we can limit the number of animal owners impacted by an 
outbreak and reduce the economic strain on owners and affected 
communities. In the case of an animal disease outbreak, NAIS would 
enable the United States to demonstrate that certain areas are free of 
disease, potentially limiting market closures. NAIS also helps to 
preserve the marketability of animals for domestic markets. Also, NAIS 
opens communication channels between animal health officials and animal 
owners, allowing the rapid sharing of information in the event of 
animal health concerns.
    Cost is another issue we must carefully consider. We understand 
that NAIS implementation is not cheap; initial data from a cost-benefit 
analysis Kansas State University is conducting for USDA show that 
annual government and industry costs associated with achieving full 
preharvest traceability for cattle, swine, sheep, and poultry exceed 
$200 million annually. But we must compare this with the estimated 
billions of dollars in losses we would suffer from an FMD outbreak. The 
2001 United Kingdom FMD outbreak cost $7.9 billion in losses and 
eradication costs. A 1997 FMD outbreak in swine in Taiwan cost $6.9 
billion and wiped out its previously strong export market. To more 
definitively demonstrate the benefits of 48-hour traceability, we 
entered into a cooperative agreement with Kansas State University, to 
conduct a cost-benefit analysis of the NAIS program. The analysis is 
studying the benefits and costs of all components of NAIS across all 
industry/species sectors. The analysis is also seeking to determine the 
overall distribution of the system's benefits and costs among producers 
of various-sized herds, marketing firms, processors, consumers, and 
state and federal government agencies. The report is currently being 
finalized and we hope to be able to share it with the Committee soon.
    In the global marketplace USDA recognizes that traceability-whether 
it be ``farm to fork'' traceability for food safety purposes, or 
traceability for animal disease purposes alone-is important to all 
producers and segments of the preharvest production chain for marketing 
purposes. Many of our international trading partners and competitors 
such as Brazil, the European Union, Australia, and Japan have adopted 
national identification systems. Establishing an internationally 
recognized system of traceability will enhance the competitiveness of 
U.S. exports of animals and animal products. In fact, our lack of a 
standardized, national animal identification system was one factor that 
prevented the United states from receiving ``negligible risk'' status 
(the best status possible under the rating system) for BSE from the 
World Organization for Animal Health (OIE). Receiving negligible risk 
status would not only enhance our ability to compete internationally, 
it would greatly support U.S. domestic price structures so that all 
producers-regardless of their interest in international marketing -
would benefit when the United states expands its export markets.
Challenges
    We have faced many challenges as we have worked to develop a robust 
NAIS. Most producers, industry groups, and state officials tend to see 
NAIS' value, but the debate continues over how to implement it. This 
has led to a disappointing participation rate of about 35 percent. Some 
state legislators have sought to restrict participation in the program. 
Further, we at USDA have made adjustments in the direction of NAIS, 
resulting in some confusion regarding producer participation.
    Perhaps the producers' biggest concern has been protection of their 
information. I assure you that USDA takes NAIS privacy issues very 
seriously. We intentionally limited the type and quantity of 
information collected and maintained by the Federal government. USDA 
maintains only the premises registration information needed to enable 
effective trace back or notification in animal disease situations, as 
well as distribution/termination records of official identification 
devices, and will not have direct access to the animal tracking 
databases which contain animal movement records. Existing Federal law 
protects individuals' private information and confidential business 
information from disclosure-a fact that USDA has continually 
emphasized. We will use all of our existing authorities to protect 
private personal information or confidential business information 
provided by NAIS participants. We look forward to working with the 
Committee should you believe that we need additional statutory 
assurances of confidentiality.
    To address all of these challenges, USDA is working to reach a 
better understanding with producers about NAIS. We have put tremendous 
emphasis on outreach, communication, and promotional efforts to 
encourage participation. We want to make sure that producers recognize 
and embrace the importance of participation and understand the myriad 
benefits that NAIS brings to the entire U.S. livestock sector.
NAIS Today
Infrastructure
    The premises registration and animal identification infrastructures 
are fully operational. The animal tracing component, while operational, 
is in its final stage of development. We are building these systems 
using standardized data elements established through NAIS. The 
standards now in place will ensure long-term compatibility of systems, 
an invaluable, long-term benefit that has resulted from NAIS.
    To date, we have registered over 500,000 premises, or approximately 
35 percent of the estimated number of our Nation's livestock and 
poultry premises. Thirteen states have registration rates greater than 
50 percent; however, seven of those states have some form of a 
mandatory program or a process for issuing the standardized premises 
identifier to the locations on record in their state.
    The animal identification component, with nearly 30 identification 
devices available that incorporate the official Animal Identification 
Number, commonly referred to as the 840 AIN, is well established. We 
can use it to meet multiple needs for animal ID. Both visual-only and 
radio frequency tags are available. Over 5 million AIN devices have 
been manufactured of which 2.6 million have reached farms and ranches 
throughout the United States.
    Producers have access to several Animal Tracking Databases (ATDs) 
for reporting the movement of animals that they ship to or from their 
premises. About 20 organizations are working with USDA to provide ATDs; 
these systems vary in their level of operation and integration with 
USDA systems. The ATDs link to the Animal Trace Processing System 
(ATPS), which is in its final stage of development. The ATPS provides 
the conduit for communicating and receiving information from the ATDs 
when animal health officials conduct disease tracebacks. These 
information systems are vital to making it easier for producers, 
states, industry, and USDA to determine the scope of a disease 
situation, locate infected animals, and curtail any further spread of 
disease.
NAIS Business Plan
    In August 2008, USDA published A Business Plan to Advance Animal 
Disease Traceability. We are using that plan to guide our efforts to 
increase NAIS' functionality. The plan articulates these key priorities 
for USDA in fulfilling the long term vision for NAIS and demonstrating 
greater accountability for the program:

      Prioritize implementation by species/sectors, taking into 
account where the greatest disease concerns and traceability 
opportunities exist

      Harmonize animal ID programs

      Standardize data elements of disease programs to ensure 
compatibility

      Integrate automated data capture technology with disease 
programs

      Partner with states, tribes, and territories

      Collaborate with industry

      Advance ID technologies

    Secretary Vilsack has made it clear that NAIS should be implemented 
in a way that is sensitive to the unique qualities of different species 
and the way they are raised and processed. We have prioritized each 
species based on the need for improved traceability and developed 
supporting strategies that will work effectively for each species.
    The Business Plan specifically provides benchmarks to guide the 
NAIS' progress towards the long-term goal of 48-hour traceback of 
affected or exposed animals in the event of an animal disease outbreak. 
Our immediate goal is to ensure that a minimum critical mass of 
producers is on board, which we estimate would be 70 percent of the 
animals in a specific species/sector that could be identified and 
traceable to their premises of origin. I must emphasize that while 70 
percent would provide some measure of traceability, we really need to 
achieve higher participation rates, perhaps as high as 90 percent, to 
ensure the benefits of the system.
    We must have data element standards to have compatible systems to 
communicate effectively among industry, state, and federal systems. For 
this reason, one of our key strategies is use of a standardized 
location identifier-the premises identification number-when recording 
locations that participate in activities related to a disease program 
and when responding to an animal disease event or outbreak. In an 
effort to proceed with establishing the standardized PIN, our Agency 
published a proposed rule on January 13, 2009, ``Official Animal 
Identification Numbering Systems,'' (Docket No. APHIS-2007-0096) in the 
Federal Register and is inviting comments on the proposal through March 
16, 2009. The proposed rule would establish the 7-character PIN as the 
standard location identifier.
    USDA has also moved forward on another key strategy: integrating 
electronic data capture and reporting technologies into existing 
disease programs. By using NAIS-compliant identification devices that 
support automated data capture technology and by integrating handheld 
computers/readers to replace paper-based forms, animal health officials 
can electronically record and submit essential data to USDA's Animal 
Health and Surveillance Monitoring database and other animal health 
databases. The electronic collection of data increases the volume and 
quality of information and speeds data entry into searchable databases.
    While NAIS' purpose is to provide critical animal health data, it 
can support industry-based marketing efforts. USDA's Agricultural 
Marketing Service (AMS) has capitalized on the NAIS 840 animal 
identification eartag as a producer-friendly, practical solution to 
meet the requirements of country-of-origin labeling. AMS is strongly 
encouraging the use of NAIS participation to identify animals involved 
in USDA Process Verified Programs and Quality Systems Assessment 
Programs. This will allow producers to use one animal numbering system 
and ID method for multiple uses, simplifying their recordkeeping and 
reducing the costs associated with multiple ID tags. Producers who 
obtain a premises identification number for their operation and 
identify their animals using NAIS-compliant methods will be able to 
provide adequate information on the origin of their livestock to 
packers. Packers can rely upon this information for their origin claims 
on products.
Levels of Participation
    The poultry industry, through the support of the National Poultry 
Improvement Plan (NPIP), continues to have a high level of 
traceability-estimated at more than 95 percent today. Premises are 
already well defined and industry organizations and leaders from the 
National Turkey Federation, National Chicken Council, United Egg 
Producers, and APHIS are merging existing records with NAIS.
    The level of traceability in the pork industry has progressed well. 
Collaborative effort of the National Pork Board (NPB) and state and 
Federal animal health officials has led to an 80 percent increase in 
premise registration. The commercial swine industry utilizes group/lot 
identification extensively, thus premises information alone provides a 
high level of traceability.
    We can trace most sheep back to the flock of origin due in large 
part to industry participation in the National Scrapie Eradication 
Program. An estimated 95 percent of sheep flocks are listed in the 
scrapie database.
    The cattle industry remains our highest priority due to the lack of 
official identification. While interest and participation in NAIS have 
increased as a result of 840 AIN tags being readily available, the rate 
at which official identification is increasing in the cattle industry 
continues to concern us. The Business Plan includes goals to have 50 
percent of the calves born after January 1, 2008, officially identified 
to their birth premises by October 2009 and 60 percent by October 2010. 
We initially anticipated that Country of Origin Labeling (COOL) would 
significantly increase the use of 840 AIN tags. However, a significant 
part of the industry appears to support using the paper affidavits to 
meet its compliance requirement. Therefore, we may have over-estimated 
the anticipated increase in use of 840 AIN tags resulting from COOL. 
Given our current strategies, it appears that achieving the 
traceability business plan goal for the cattle industry will be 
difficult.
Funding
    As NAIS continues to progress, Secretary Vilsack and his team will 
be overseeing its continued development. The Secretary is starting with 
a full review of past spending within the NAIS program. We know 
accountability is essential to assure the American public that the 
Federal government is making the best and most efficient choices when 
it comes to their tax dollars. Accordingly, I would like to give you a 
brief overview of past funding activities.
    We have obligated $118.9 million since 2004 to develop and 
implement NAIS. We invested nearly $18 million, or about 15 percent of 
total obligations, on development of high caliber information 
technology (IT) systems, which are critical in making NAIS a success. 
We used eighty percent of those IT funds to support premises 
registration; 14 percent for animal identification; and 6 percent for 
the tracing component, including building capability to ensure USDA can 
interact with state and private Animal Tracking Databases.
    We worked closely with states, Tribes, and Territories and provided 
them with $55.5 million, or 47 percent of total obligations, to 
administer and deliver the program through cooperative agreements. 
These funds provided on-the-ground resources to conduct education and 
outreach efforts, administer premises registration activities, and 
support selected pilot projects/field trials to explore innovative 
methods of advancing NAIS. We worked through the states and others to 
allay the concerns expressed by producers and others about what they 
deemed too much intervention by the Federal government. Also, working 
through states we reduced the amount of information collected and 
maintained by USDA, thus advancing the goal of confidentiality.
    USDA also entered into several cooperative agreements with non-
profit industry organizations. These agreements support efforts to 
promote NAIS and increase participation in premises registration, and 
these efforts cost approximately $3.5 million.
    The education and outreach efforts, through cooperative agreements 
with states, Tribes, Territories, and industry organizations, were part 
of the policy of persuading producers to participate in a voluntary 
system. We also used approximately $10.4 million, or about 9 percent, 
of the total obligations for national-level communications aimed at 
increasing producer awareness and understanding of, and participation 
in, NAIS.
    The balance of the funding over the past 5 years supported the USDA 
staff leading the NAIS effort. This includes the many veterinarians, 
information specialists, statisticians and others involved in designing 
the program. It also includes the APHIS veterinarians and other animal 
health professionals located throughout the United States. They worked 
closely with their state and industry counterparts to promote an 
understanding of and participation in NAIS.
    We understand the importance of accountability in the NAIS program, 
and assure you that we continue to look for ways to improve program 
oversight. We have allocated funding in accordance with the strategic 
direction of the program. As we look to the future and take a hard look 
at program strategy, we will adjust the funding allocations as 
appropriate.
Conclusion
    Thank you for the opportunity to testify before you today on this 
important issue. USDA recognizes that we must be able to quickly and 
effectively trace animals linked to a disease event in order to enable 
a quick response to eradicate or control the disease. Enhancing these 
capabilities through the NAIS strengthens our ability to protect the 
health of U.S. livestock and poultry, as well as the economic well-
being of those industries.
    Implementation of the NAIS has been one of my highest priorities as 
Chief Veterinary Officer. It is time to reassess our strategy to ensure 
that we achieve significant increases in participation rates to reach 
the critical mass we need for an effective program. As I stated in my 
introduction, the Secretary is carefully weighing all of the options to 
determine how USDA and its partners can make NAIS more effective and 
successful. We look forward to continued collaboration with the states, 
industry, producers, and the Committee to develop NAIS policy in a 
manner that invites and is responsive to the input of all stakeholders.
    I'd be happy to answer any questions.

    The Chairman. The Chair would like to remind Members that 
they will be recognized for questioning in the order of 
seniority for Members who were here at the start of the 
hearing. After that, Members will be recognized in the order of 
arrival. I certainly appreciate the Members' understanding of 
this.
    Let me just start with a question or two right quick.
    Dr. Clifford, if we had a disease outbreak today that was 
airborne, are we prepared to trace, track, and quarantine 
animals in 48 hours?
    Dr. Clifford.  Let me give just a little bit of 
clarification on that because if a disease were airborne or 
easily passed through air, I think the critical component here 
is whether that disease has the ability to spread very rapidly 
and has a very short incubation period versus a long incubation 
period. When you talk about tuberculosis, that's a very long 
incubation period. With diseases like avian influenza, foot-
and-mouth disease have very short incubation periods.
    So, based upon today's standards, if we had a foot and 
mouth disease outbreak, we would not be able to get in front of 
that disease based upon its ability to spread and the speed of 
commerce. With avian influenza, though, with regards to the 
ability that we have and traceability within the commercial 
poultry sector, we would be able to get our hands around that 
very quickly and control that.
    The Chairman. All right. But foot-and-mouth disease is one 
that we could not be able to track, correct?
    Dr. Clifford. It would obviously depend on how it entered 
and where it went and how quickly we were able to discover it. 
The fact is, with the ability of this disease to spread very 
rapidly, and if you take the example of TB, during the time it 
would take us to trace these, that disease can spread to many, 
states very rapidly.
    The Chairman. Thank you very much.
    Now, my other question is--I realize your testimony says 
that the Secretary is weighing all of the options to push 
animal ID forward. However, does the USDA support a mandatory 
system?
    Dr. Clifford. Sir, that decision would be left to the 
Secretary. As I indicated in my testimony, the Secretary is 
weighing those options.
    I think, though, to say from APHIS's perspective, it is not 
an issue to me whether or not the system is voluntary or 
mandatory. It is an issue of having an effective system. This 
system currently as it is, with 35 percent producer 
participation, is not effective.
    The Chairman. All right. Thank you very much.
    Mr. Neugebauer.
    Mr. Neugebauer. Dr. Clifford, in your testimony you state 
that 35 percent of the premises have been registered. Do you 
have an idea of what percentage of the production that is?
    Dr. Clifford. No, sir; but I will see if I can determine 
that; and if I can, I will provide that for the record. USDA 
does not collect this information.
    Mr. Neugebauer. I think that will be helpful. Because you 
could have--35 percent of the premises may be a substantial 
part of the production, and so I think that would be helpful if 
you could furnish us that information.
    Mr. Neugebauer. One of the things that you stated in your 
testimony is that in case of an animal disease outbreak NAIS 
would enable the United States to demonstrate that certain 
areas are free of disease, potentially limiting market 
closures. In the post-BSE environment, we have been able to 
reopen some of the Asian markets, but our friends to the north, 
Canada, have not been able to open those. Those markets have 
not always opened up to them on the same basis that the U.S. is 
able to open up, and yet they have an animal ID, mandatory 
animal ID program. How has animal ID benefited Canada when you 
talk about market access?
    Dr. Clifford. Well, I think it has assisted Canada to help 
them with regards to market access traceability. And if you 
look at their recent findings with TB, for example--this is 
away from BSE--but with regards to TB, where we took months, 
weeks to find TB, they were able to do with their system in 19 
days. And that is a significant event when you are talking 
about animal health; and that is really what we are talking 
about with this system with regards to animal traceability.
    Mr. Neugebauer. I get the traceback, but what I am saying 
is it didn't open up--it has not opened up markets for me, and 
that is part of your testimony. As we are going through this 
process, this is part of the debate; and I think this is an 
issue that we need to look at very carefully.
    Dr. Clifford. I think it does open up markets, and I think 
that it is important to open up markets. While BSE, frankly, 
has become more of an--oftentimes considered more of a 
political issue than a disease issue; because while it is a 
food safety concern--and we take that very seriously--we know 
how to control that disease. And a number of countries are 
still very concerned about that disease, and so BSE is one 
where there are difficulties even with the U.S. with regards to 
opening up those markets.
    Mr. Neugebauer. But, in this case, it did not necessarily 
help Canada?
    Dr. Clifford. I think that would be best for Canada to be 
able to respond to that.
    Mr. Neugebauer. A lot of people are conflicted in they 
think currently that the Secretary of Agriculture may have the 
statutory authority to implement a mandatory ID program. What 
is your opinion on that?
    Dr. Clifford. Yes; the Secretary has the statutory 
authority under the Animal Health Protection Act to make the 
program mandatory.
    Mr. Neugebauer. So if the Secretary decides to do that, we 
would not need legislation to implement that?
    Dr. Clifford. No, sir.
    Mr. Neugebauer. Many of my constituents are concerned about 
the amount of data that has been proposed to be collected in a 
number of these databases; and when I talk to different 
producer groups, some say that a limited amount of information 
should be kept; others say that the proponents of a mandatory 
ID want more data. How are we going to ensure, if we implement 
this system, that proprietary information is protected to the 
people that are furnishing this information?
    Dr. Clifford. We are very concerned about this issue with 
regards to confidentiality, and we take it very seriously. 
Actually, we collect very little data with regards to our 
system with the premises registration. It is really nothing 
more than a phone book within that system. In fact, some states 
may collect more data, but we don't keep those within our 
system.
    With regard to the industry's concern, in fact, we went 
outside with animal-tracking systems and have connected with 
private-sector systems as well as state-sector systems so all 
of the animal-tracking data would be kept outside of the 
Federal government.
    In addition, we have always protected producer data and 
have been able to protect that data thus far.
    Mr. Neugebauer. But USDA would be able to--if called upon, 
these outside entities-- to furnish that data, would they have 
to furnish that to you?
    Dr. Clifford. Part of the agreement with the outside 
entities that we are connected to is that animal health 
officials would only use that data for purposes of an animal 
health event. And that is part of the agreement that we sign 
with those companies, yes, and the states.
    Also, Ranking Member, I would just like to--your earlier 
question about the number of premises and what number or total 
that is with the number of animals in commerce, that is not 
data we collect. So, as I said, we will look into that, but I 
don't want this Committee to think that we have that data, 
because we don't. We don't have the number of animals people 
have. That is not in that database. It is a very limited amount 
of data there.
    The Chairman. Chairman Peterson.
    Mr. Peterson. Thank you, Chairman.
    It is my understanding, Dr. Clifford, that a cost-benefit 
analysis of NAIS was completed by Kansas State University and 
is in your possession for review; is that correct?
    Dr. Clifford. Yes, sir.
    Mr. Peterson. Can you provide that to the Committee?
    Dr. Clifford. Yes, sir. We are reviewing that document now, 
and we will provide that information through the Secretary and 
provide it to the Committee as soon as the Secretary has an 
opportunity to review that.
    Mr. Peterson. How long will that be?
    Dr. Clifford. We want to get it to you as quickly as 
possible and not delay. So we understand----
    Mr. Peterson. Is there any possibility you can summarize 
the conclusions, or does it have to go through the Secretary 
first?
    Dr. Clifford. I may be able to provide you a brief summary 
very soon, if that would be suitable.
    Mr. Peterson. You can't do that now?
    Dr. Clifford. Well, I think it is important that I 
articulate it in an appropriate way. And I will say, based upon 
the $200 million figure, under a mandatory system for both 
government and industry, you are looking at over $200 million 
for a mandatory system; and those numbers will vary depending 
upon the percentage of producers that participate in a 
mandatory system.
    So, in other words, you are probably not going to reach 100 
percent, but there are different cost levels between 90 percent 
and 100 percent and those types of figures. And then a bookend 
approach is typically something less than $200 million.
    Mr. Peterson. I don't want to get too much in the weeds 
here on what has happened, but a lot of the effort, I think, 
has been in trying to identify premises.
    Dr. Clifford. Yes, sir.
    Mr. Peterson. And have the states done that on your behalf? 
Is that basically what has been happening?
    Dr. Clifford. Well, actually, it has been more than states. 
It has been states. It has been our own folks. We have also 
done a lot of outreach effort. Under a voluntary system, you 
have to have more expenditures to reach out to----
    Mr. Peterson. But don't some states have a mandatory 
premise ID requirement?
    Dr. Clifford. A few states do, yes, sir; and a few states 
that didn't have a mandatory requirement went ahead and moved 
premises information that they had over to this system.
    Mr. Peterson. It has been suggested by some that we setup a 
system whereby we kind of set the parameters, set the 
standards, and then have the individual states actually carry 
this out on a state-by-state basis. Do you think that is a 
workable solution? Because the idea is that the producers are 
more comfortable with their state licensing people. They are 
used to working with them.
    And could we set up some kind of mandatory system where we 
just set the--you have to use this kind of database, it is 
compatible, the readers and all of that, so that it all works 
together but actually let the states implement this. Has that 
been looked at, and is that a workable solution?
    Dr. Clifford. It is something we have looked at. I think 
that components of the system can be done that way.
    As I mentioned earlier with regards to the animal-tracking 
components, we do feel that it is important to have a national 
premise identification component that is kept at the national 
level.
    Mr. Peterson. But what I am saying is, yes, we would keep 
it, certain of this information, the premises and stuff that we 
have to have. But instead of USDA or the Federal government, 
doing the work to have this tracked, to have the individual 
states do it and then you collect the information from them 
because you----
    Dr. Clifford. Well, that is actually the system now. The 
states now have the responsibility of getting that data into 
the system. And then they use our allocator system for the pin 
number, and they will also use our repository where that pin 
information is kept. And it is kept on a state-by-state basis.
    Mr. Peterson. Do you think the states have the ability--say 
the Secretary decided to make a mandatory system and the states 
then are required to implement a mandatory system and they are 
the ones that are required to set it up and make it happen 
within a certain period of time. Do you think that is a 
feasible thing that every state would be able to do this?
    Dr. Clifford. I think that in some cases the states would 
be, and in some states we would need to provide more 
assistance. I think it is really a larger picture than that. 
All of our cooperative animal health programs are cooperative 
with our state counterparts. Both of these components and the 
industry components are critical to our success in many of our 
disease programs; and I believe that a cooperative program is 
necessary and needed, sir.
    Mr. Peterson. Thank you, Mr. Chairman.
    The Chairman. The gentleman from Alabama, Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    You talked about the cooperative nature, and you said it 
depends on that. So you are saying the Department doesn't have 
a stick to force a state to participate. Is that implicit in 
that remark?
    Dr. Clifford. That is not what I intended in that remark.
    But, basically, when we are talking about our cooperative 
disease programs, both the state and Federal government helped 
develop those programs together and implement them together.
    Mr. Rogers. So if the Secretary decided that he or she 
wanted to implement a mandatory ID program, you could compel 
the states to form whatever necessary infrastructure to do 
that, to implement it?
    Dr. Clifford. Our compelling--or our authority would lie in 
the interstate commerce of those animals. So it would be in the 
interstate and international commerce where we would compel 
them to abide by that, yes.
    Mr. Rogers. It felt like Chairman Peterson was getting to 
the point if the states could do it, whether or not you could 
make them, if they did not have the adequate infrastructure.
    You said we have 35 percent participation now. You didn't 
know if it was just premises or if that included animals, with 
Mr. Neugebauer's question. Of that 35 percent, are they uniform 
ID systems? I have been led to believe that they are two or 
three different ID systems now that are in existence. Is that 
incorrect? Or are they uniform?
    Dr. Clifford. When you are talking about 35 percent with 
regards to ID systems, for example, the poultry and the pork 
sector would use group lot more. It is not about individual ID. 
The 35 percent, it represents a premise identification number. 
So then that number would be tied to individual ID or group 
lot.
    And with regards to individual ID, there are many different 
ID devices that we have approved and a number of companies that 
have developed those devices in accordance with our 
requirements; and those devices are species specific. So, for 
example, you may have a special type, one for the pork 
industry, another one for cattle, and another one type for 
sheep and goats.
    Mr. Rogers. So if we decided to press or if the Department 
decided to press this animal ID to try to get the hundred 
percent participation, the current systems wouldn't have to be 
modified?
    Dr. Clifford. That is correct. The decision would need to 
be what approach we would take, and whether that would be a 
bookend-type approach or a 48-hour traceability approach where 
you have a totally integrated system. And the 48-hour 
traceability would require--because of the technology needs, to 
move to an RFID-type technology. So the producers would have to 
use that, with the exception of group lot identification. Those 
animals move in a group and lot and stay together. They don't 
require individual ID.
    Mr. Rogers. Thank you. That's all I have, Mr. Chairman.
    The Chairman. The gentleman from Iowa, Mr. Boswell.
    Mr. Boswell. Thank you very much, Mr. Chairman. I, too, 
thank you for having this meeting.
    It was interesting, the discussions going on about what 
happened to our industry, and I say ``our'' because I am 
involved in it, too, as many of you know. If a disease would 
break out, then what would we do? And as one of my staff 
reminded me, I spent a lot of time in the military, and the 
military runs on its stomach. Where are we going to get our 
protein? Where are we going to get our food material if we 
should have a big shutdown?
    So I think Chairman Peterson said it pretty succinctly. We 
have got to do deal with this. So I am going to leave that 
statement.
    But I think I would ask this to our witness. So what are 
you recommending to the Secretary? You have got his ear. What 
are you suggesting he do?
    Dr. Clifford. I would leave that up to the Secretary. But I 
would recommend to the Secretary that if we are going to 
continue down this road the system needs to be effective; and 
in order for it to be effective, it has to have a high level of 
participation.
    Mr. Boswell. Good non-answer. What are you going to 
recommend for him to do?
    Dr. Clifford. As I said, the system----
    Mr. Boswell. No. Come on. Just give me an answer. What are 
you going to recommend?
    Dr. Clifford. Congressman, I think that it is important 
that I stick with my previous answer on this.
    Mr. Boswell. Mr. Chairman, why don't you dismiss the 
witness? He doesn't want to talk with us.
    The Chairman. The gentleman from Nebraska, Mr. Smith.
    Mr. Smith. If I might follow up. When do you expect to have 
a recommendation?
    Dr. Clifford. To the Department?
    Mr. Smith. Correct.
    Dr. Clifford. We have had some discussions already with the 
Secretary and provided some information, and I think that it 
will require some additional information, and the Secretary is 
reviewing that.
    Mr. Smith. So in terms of a time line for a recommendation, 
though--I mean, formulating the policy, I would assume that 
eventually the Department will come up with a decision with 
recommendations gathered along the way. When do you think the 
Department would be able to come up with the policy?
    Dr. Clifford. I can't answer that for the Secretary. That 
would be a decision for the Secretary's office to make on the 
direction we are going to go in the Department.
    Mr. Smith. Is there anyone else testifying today who might 
be able to answer?
    Dr. Clifford. I don't think so, sir.
    Mr. Smith. So your are representing the Department?
    Dr. Clifford. Yes, sir.
    Mr. Smith. But you can't really give----
    Dr. Clifford. I can't speak for the Secretary; no, sir.
    Mr. Smith. Okay. Let me proceed, then, to another topic 
here.
    We know that there are examples in government where 
confidential information, very sensitive information, I would 
say, has inadvertently been distributed, not necessarily in the 
USDA but in other agencies; and I know that there is concern 
among many that information will be shared that shouldn't be, 
even if it is accidentally. I mean, you would have other 
agencies probably laying claim to the fact that they should 
have access, whether it is the EPA, whether it is Centers for 
Disease Control, Homeland Security, IRS. How do you think we 
could ensure that only USDA would have access to the 
information?
    Dr. Clifford. Actually, we have had a lot of information 
over the years with disease programs and animal ID; and we have 
always kept that information confidential except in a very 
compelling case. In a compelling case, sure, there are legal 
issues there that may require us to release that. But I don't 
believe that we would release that just because IRS or EPA or 
anyone else wanted to see that information.
    Mr. Smith. Can you speak to any of those safeguards and how 
that logistically works?
    Dr. Clifford. We wouldn't release it to them. This system 
was developed for animal health purposes. That is its intent, 
and that is our commitment to the industry.
    Mr. Smith. I think you alluded earlier that sometimes the 
"disease issues" become a political issue, whether it is with 
trade or other things.
    What about the Freedom of Information Act? How would that 
apply or not apply to the information obtained and contained at 
USDA?
    Dr. Clifford. It can be requested under the Freedom of 
Information Act; and, obviously, we can be challenged under the 
Freedom of Information Act. To date, we have been able to 
protect that data.
    Mr. Smith. Unknown from this point forward?
    Dr. Clifford. All I can do is base it on past history, and 
we have been able to protect it to date.
    Mr. Smith. Is there a cause for concern about the future?
    Dr. Clifford. I think that because of the concern of the 
industry that, yes, we have concern about confidentiality 
issues. I think it is a very important issue. It is something 
that I think is an appropriate issue for this body to be 
discussing, as well as the Secretary.
    Mr. Smith. I realize you are not very comfortable speaking 
of your recommendations to the Secretary or what the Secretary 
might recommend ultimately or when. Is this part of your 
concern to voice to the Secretary?
    Dr. Clifford. The Secretary is very well aware of the 
confidentiality concerns of the producers' sect, yes; and he is 
also aware that we feel it is very important to be able to 
protect that data.
    Mr. Smith. So how do you think, moving forward, we should 
handle this issue?
    Dr. Clifford. I think that some of those decisions are 
going to have to be made, as I indicated, by Congress and by 
the Secretary as to how we move forward.
    Mr. Smith. The Secretary has the discretionary authority 
currently to implement a mandatory program?
    Dr. Clifford. Yes.
    Mr. Smith. But I hear you saying you are deferring to 
Congress for that?
    Dr. Clifford. I am not saying that at all. I think that it 
is an important point that needs to be discussed and addressed 
both at the Secretary level and by Congress. That is all I am 
saying. I mean, with regards to that issue. I am not saying who 
should take the lead or not.
    Mr. Smith. Okay. My time has expired. Thank you.
    The Chairman. Thank you very much.
    The gentleman from Maryland, Mr. Kratovil.
    Mr. Kratovil. Let me ask it a different way. You certainly 
bring to the table a substantial insight into the costs and 
benefits of having an effective system, correct?
    Dr. Clifford. Yes.
    Mr. Kratovil. Do you, based on your experience, believe 
that you can, in fact, have an effective system if it is not 
mandatory?
    Dr. Clifford. I think that, based upon the last several 
years, we have not been effective in signing premises up. So 
the current system is not working. So either it is going to 
have to be mandatory or provide an incentive for producers 
under a voluntary system to sign up.
    Mr. Kratovil. And if it is not mandatory, what is the 
alternative in terms of a voluntary incentive that would 
thereby encourage and thereby make it effective?
    Dr. Clifford. It would either have to be an incentive of 
providing up-front resources potentially, that is one idea, as 
Chairman Peterson mentioned, to incentives within the market to 
drive this. Some people have felt that the COOL rule would 
actually help drive animal ID. Thus far, we have not seen that 
boost for that.
    Mr. Kratovil. I gather in making some sorts of 
recommendation to the Secretary, again bringing to the table 
your expertise, you have weighed both the costs and benefits of 
having a mandatory system. What do you see as the most 
legitimate criticism of a mandatory system? And if a system 
were imposed, what would USDA do to address whatever those 
legitimate concerns are?
    Dr. Clifford. That is a good question.
    I think that would require some definite thought with 
regards to the concerns. The concerns that are obvious to us 
are confidentiality. We want to be able to protect the 
producers' information such as we have in the past, and we 
think that is a critical component to get their buy-in and 
support for this system.
    There are also the cost factors. So I think that we--it 
would be prudent to look at ways where we can minimize that 
cost, especially to small farmers, small producers, in order to 
get to the level of participation that is needed.
    There are also an area where a number of folks have raised 
concerns over the years, and hopefully we have addressed those 
properly, where people make assumptions that we want them or we 
require--them to register when their animals are not in 
commerce. It is really not the number of animals somebody owns; 
it is the question of whether those are in commerce.
    So backyard-type poultry, if somebody has got a few small 
animals in their backyard, or a horse, we are not interested in 
those animals except to say we would recommend that they have 
their premises registered; which costs practically nothing for 
them to do that. Only because if there was a disease outbreak 
in that area, it is critically important to for us to know all 
of those animals of that species that are susceptible to that 
disease within that location because it helps us be more 
effective in our job and helps protect them as well.
    Mr. Kratovil. So there are concerns that are raised either 
coming down from the Secretary or legislatively? There would be 
ways to deal with whatever those concerns are?
    Dr. Clifford. I think there would be a number of ways to 
address many of those concerns.
    Mr. Kratovil. What states have mandatory systems? You 
mentioned a number of states have them.
    Dr. Clifford. When you are talking about mandatory, it is 
not necessarily mandatory across all species, but Wisconsin has 
mandatory premises identification. Michigan requires 
identification in their live cattle due to TB which requires, 
as a part of that, the official ID to be registered with the 
premise. And then, also, Indiana requires animals within the 
state that move to have premises registration; those that are 
going to sales, shows, exhibitions.
    Mr. Kratovil. As part of those, have you looked at and 
evaluated those systems?
    Mr. Kratovil. We have, as well as other states; and those 
are the states, when you look at the premises registered, 
that--there are 13 states that have more than 50 percent 
premises registered. That is 7 of those states.
    Mr. Kratovil. Okay. Thank you, Mr. Chairman.
    The Chairman. The gentleman from Iowa, Mr. King.
    Mr. King. Thank you, Mr. Chairman.
    Dr. Clifford, I thank you for your testimony and your 
responses to these questions.
    My first question is just a clarification one. It seems to 
be endemic across the livestock identification vernacular, when 
I hear the word ``premise'' and the word ``premises,'' can we 
clarify that that means one and the same thing? That we really 
mean premises?
    Dr. Clifford. Yes, it is premises. I am sorry.
    Mr. King. I wanted to make that point.
    Dr. Clifford. Sometimes that is my habit as well.
    Mr. King. Is the Department willing to endorse the idea of 
indemnifying a producer from liability that might be achieved 
through FOIA action? I mean, you can protect your information, 
but there is no guarantee on a FOIA. If there is a Freedom of 
Information Act that is filed and that information is divulged 
and it results in litigation, that would be the liability 
created for a producer. Because of potential mandatory ID, that 
could be a system that could be imposed by the Secretary. What 
is the Department's position on recommending statutory 
protection for those producers?
    Dr. Clifford. I don't think that we have discussed that 
with the Department. That is something that we would have to 
discuss with regards to the liability issue.
    Mr. King. I raise that point because I think that is the 
only way that we can protect producers if this process of 
livestock identification moves along. I think that we should be 
compelled, as a Committee, to take a very close look at how we 
protect producers that might be exposed by a mandatory 
livestock ID program through FOIA.
    And another point would be, as I listen to you testify, we 
are talking about an animal ID or livestock ID system that is 
created for the purpose of controlling disease in case there is 
a disease outbreak and protecting the industry and food safety. 
Are there other tools that might be encompassed here that we 
haven't discussed, or is it a single mission?
    Dr. Clifford. Well, our mission has been for the animal 
health components. And that, also, when you have healthy 
animals, you are going to have a safer food supply. That has 
been our mission.
    But there are other benefits that we have seen from this. 
For example, if you have a hurricane on a coastline or, more 
recently, snowstorms in Colorado, premises identification 
information was used by the state in order to contact producers 
in locations to see if there was a need in assistance for feed 
for their cattle.
    Mr. King. What about grade and yield, other breeding 
information, that kind of data that breeders keep and it is 
their intellectual property that they may or may not want to 
provide availability to other breeders, producers, or perhaps 
their customers? Is there any provision that you have 
envisioned that would allow producers to use this as a 
marketing tool and a way to improve the production of the 
livestock?
    Dr. Clifford. They could certainly use the system as an 
identification device for their own personal use. We would not 
want their personal business information that you had described 
and would not house that, but they could certainly use the 
system to track those things with regards to their own personal 
animals, absolutely.
    Mr. King. As far as a sophisticated type of a system, that 
would not and--very unlikely--could not be housed within USDA. 
If the vision were the vision of utilizing animal 
identification for all of the menu list of purposes that it 
might be useful for, we can't do it within USDA then?
    Dr. Clifford. We do not want that information.
    Mr. King. I have one final question here, and that is the 
goal of a 48-hour traceability, as part of your testimony--I 
will just say my goal is a little different than that. I think 
you can get a truck anywhere in America in 48 hours. So if it 
is disease eradication and control or the spread of it, I would 
think that with the modern technology that we have we should be 
able to do real time. I will just say, let us just put this out 
here for a different vision.
    We started out with 48-hour discussion some years ago. I 
will submit today let us talk about the time frame of click-of-
the-mouse, rather than 48 hours. If you are going to build a 
software, you might as well do it click-of-the-mouse. I know it 
takes longer to get the notices out there some places where you 
have to use telephones and people. But at least to do the 
traceback, I am going to suggest that should be instantaneous; 
and I would appreciate your opinion on that.
    Dr. Clifford. I would like to explain it in this way. 
During an outbreak situation with a disease like foot-and-mouth 
disease that, with the speed of commerce can spread very 
rapidly, when we talk about 48-hour traceability, what it 
really means is for us to be able to sit down at the keyboard, 
just like you say, and in realtime get that information about, 
in a full traceability system, where we know where those 
animals potentially have been and whether animals have been 
exposed.
    So we immediately, from that point, would start contacting 
those markets, those slaughter facilities, those truckers, 
those farmers and ranchers and say, ``Halt,'' so that you are 
not putting commerce on hold as a whole and trying to stop 
commerce across all the U.S. So you are trying to stop commerce 
where you know the disease is likely to be. And then you 
immediately send resources in there and draw down, with the 
potential to shrink that.
    Mr. King. Thank you, Dr. Clifford.
    Thank you, Mr. Chairman. I yield back.
    The Chairman. The gentleman from Wisconsin, Mr. Kagen.
    Mr. Kagen. Thank you, Mr. Chairman.
    And thank you, Dr. Clifford, for being here this morning 
and answering almost all of our questions. We do have some 
concerns.
    I always ask myself three questions about anything that is 
coming forward, whether it be in business or here in 
government. The first question is, will it work? The second 
question is whether or not it is going to be good for both 
business and for consumers alike. And finally, is it the right 
thing to do?
    On all three of these questions, I would gather your answer 
would be yes, you believe a mandatory animal ID system across 
the country is best for business, that it is going to work, it 
is going to be good for consumers, and it is the right thing to 
do.
    Am I correct that you would agree with those presumptions 
of your answers?
    Dr. Clifford. Yes, I do. And, in fact, the system we have 
built to date--and that is one of the definite good things that 
have come out of that--has provided the foundation to do just 
that.
    Mr. Kagen. Well, you are aware of the Wisconsin Livestock 
Identification Consortium, aren't you?
    Dr. Clifford. Yes.
    Mr. Kagen. And would you hold that up as a national model 
of something you might want to attain?
    Dr. Clifford. I think they have been very effective in what 
they have done.
    Mr. Kagen. So we could use the Wisconsin model as something 
for the country?
    Dr. Clifford. Oh, the Wisconsin system actually is the 
system that we have developed at USDA.
    Mr. Kagen. So you developed it by imitation, something that 
happens here in Congress as well.
    Dr. Clifford. Well, it was a joint effort with the IT 
system, is what I am saying. We have further expanded upon 
that.
    Mr. Kagen. Right. With regard to whether or not things will 
work out the way you would like it to, maybe you could fill in 
a few blanks that I have in my head about the RFID system. How 
expensive is that, per head? Does it really provide you with 
the best technology available? What would it cost me if I am 
milking cows, per head?
    Dr. Clifford. It will cost in the range of $3 to $5 per 
head right now. And we are talking about labor cost as well as 
costs for the reader. Those are some of the things--for small 
producers, we can try to look at reducing some of those costs. 
I think the costs over time, as well, will decrease as more of 
this technology is used.
    So that is kind of a range. And I think that some of that 
data and information and more specific to that range could be 
in the cost-benefit analysis, once we provide that to you all.
    I think it is important to note that, if you are going to 
48-hour traceability, you have to have the speed of commerce. 
The technology needs to be developed to be able to meet the 
speed of commerce, because if we don't, if we are slowing down 
commerce, it is not going to be utilized and it is not going to 
be effective. So it is critical for that use.
    Mr. Kagen. My final question to you is, can we afford not 
to institute a mandatory animal ID system?
    Dr. Clifford. Again, I would have to state that those are 
policy decisions for the Secretary. But regardless, we need an 
effective system. In order to have an effective system, it is 
either going to need to be mandatory or have appropriate 
incentives for the producers to participate.
    Mr. Kagen. Well, I look forward to working with you and 
other Members of this Committee to fashion a system that is 
going to be good for our producers and consumers alike in 
keeping not just the health of our economy but the health of 
our people and our livestock in mind.
    Thank you very much.
    I yield back.
    The Chairman. The gentleman from Tennessee, Mr. Roe?
    The gentleman from Texas, Mr. Conaway?
    Mr. Conaway. Thank you, Mr. Secretary--I am sorry--Mr. 
Chairman.
    The Chairman. Thanks for the promotion.
    Mr. Conaway. I wanted to start a rumor that you are joining 
the administration and get that kicked out there. Just kidding.
    It never occurred to me--I have one horse who is a big, fat 
pasture pet, rarely ever leaves my property. It didn't occur to 
me until you just said that I am contributing to those who use 
this 35 percent compliance registration of premises, that I am 
contributing to that issue by not registering my premises. Did 
you really intend for me to register my premises?
    Dr. Clifford. Can you repeat, sir, what you have again?
    Mr. Conaway. One fat horse.
    Dr. Clifford. No. I did not intend for you to register your 
premise. What I did say, though, is it is recommended only from 
a standpoint because if there is a disease occurrence within 
that location----
    Mr. Conaway. So the registration requires me to tell you 
how many head I have?
    Dr. Clifford. No.
    Mr. Conaway. Okay. If we don't know how many places or 
premises there are, how do we know only 35 percent of them have 
been registered?
    Dr. Clifford. When we talk about premises, we use that 
estimate based on the National Agricultural Statistical 
Service. And that estimate is based on 1.4 million premises in 
the U.S. that have farm income of at least $1,000.
    Mr. Conaway. Okay. If there was an event and you had to do 
the trace-back, once that event is over, do you purge that data 
collected during the trace-back efforts from the system?
    Dr. Clifford. No, we don't. We keep that data.
    Mr. Conaway. So that would be additional data----
    Dr. Clifford. It is important data for our analysis.
    Mr. Conaway. But it was over, it is done, we know it all 
happened. You keep that data?
    Dr. Clifford. Absolutely.
    Mr. Conaway. The Secretary has the authority to mandate a 
system. What recommendations are you going to make for changes 
to the FOIA?
    You are pretty confident right now under the voluntary 
system that you can protect producer data under a voluntary 
system. If we go to a mandatory system and collect additional 
data and have new requirements in place, what recommendations 
are you going to make to change FOIA or to put protections in 
that allows our producers to know that, under the mandatory 
program, your answer is still the same, that you have complete 
confidence that the information ought to be made available?
    Dr. Clifford. Well, again, I would answer that based on 
history. And the history, as far as----
    Mr. Conaway. Okay, but the history is going to be 
different. I mean, under a mandatory system the future is going 
to be different than it used to be.
    Dr. Clifford. It may be. But I am also not an attorney, so 
I don't know that I can answer the question about the FOIA rule 
per se, and I don't have a full concept of the FOIA laws.
    But I will say, under mandatory systems of disease-
eradication programs and information that we have had for years 
and years and years, we have been able to protect that data 
from release.
    Mr. Conaway. Okay. Is this issue overplayed? Are producers 
just--don't want to comply with the overall deal because they 
believe their data is at risk? Are they overstating their 
concerns?
    Dr. Clifford. I think it is nothing more than a phonebook, 
but it is still their right.
    Mr. Conaway. Under a mandatory system, though, you think 
they are concerned?
    Dr. Clifford. Again, even in a mandatory system, the 
premises identification is really nothing more than a location.
    Mr. Conaway. On your incentive program to help the 
voluntary system out, I think under the farm bill we pay 
organic farmers $750 a year to maintain that status. Is this as 
important as organic farming?
    Dr. Clifford. This is very important.
    Mr. Conaway. Is this more important or less important?
    Dr. Clifford. I am not going to judge that relative to 
organic farming. It is for animal health.
    Mr. Conaway. Let's talk about food safety then. Is this 
issue more important or less important than organic farming?
    Dr. Clifford. This issue is extremely important to animal 
health and food safety.
    Mr. Conaway. All right. And so, for $750 a year, we help 
people maintain their organic status. Are you recommending that 
we pay $750 a year to register premises?
    Dr. Clifford. I am not recommending that. But I am stating 
that there would be some incentive for a mandatory system, one 
or the other.
    Mr. Conaway. Well, since we are in the $750 range, do you 
think $750 a year would be plenty of incentive to send you my 
name and address and the fact that I have one fat horse?
    Dr. Clifford. That is a judgment call for the individual. 
And I think it is----
    Mr. Conaway. Well, I am looking forward to whatever advice 
you are going to give the Secretary. I understand we have you 
jammed up, and it is easy to whack you about the head and 
shoulders on this, because you really can't tell us these 
answers. But value judgments on these issues are something we 
hope we can look to you and your squad to help us with. Because 
we are all on the same side. We all want safe food, and we want 
the commerce to flourish, we want access to foreign markets, 
all those things. We are all on the same side.
    So, thank you, Dr. Clifford. Appreciate you coming.
    The Chairman. The gentleman from California, Mr. Baca?
    Mr. Baca. Thank you very much, Mr. Chairman.
    Thank you for being here, Dr. Clifford.
    One of the questions that I have, in your testimony you 
state that USDA has provided states, tribes, and territories 
with $55.5 million, which comes out to be 47 percent of the 
total cost administered and delivered to NASA at the program.
    Do states and tribes and territories contribute to the 
remaining 53 percent of the costs? That is question number one. 
And how much of the cost is incurred by the producers?
    Dr. Clifford. With regards to clarification on that 
question, are you talking about under a mandatory system or our 
current system?
    Mr. Baca. The current system.
    Dr. Clifford. So, under the current system, the money we 
provide to the states in cooperative agreements and to the 
tribes, that money is there to be able to do two things 
primarily. One is to set the foundation and provide the support 
and infrastructure needed to register premises and to move NAIS 
forward.
    The second component is--and a lot of these dollars are 
being spent for the outreach component in a voluntary system 
that has not been that effective. So that dollar amount, if 
under the current system were to continue, would either need to 
be continued or reduced to just support a basic infrastructure 
to support the current system, because it has not been 
effective in signing up producers.
    Mr. Baca. How much of that cost, though, is incurred by the 
producers?
    Dr. Clifford. The costs that are incurred by the producers 
for premises registration are nominal. You can go online and 
sign up your premises or send in an application to the state. 
There is very little cost for signing up your premise.
    Where the cost would occur to the producer is if they are 
using individual animal ID with their animals and the 
application of that animal ID, and that can be--RFID technology 
can range from $3 to $5 per animal. If you are putting in just 
a tag with non-RFID, it can be up to a cost of 50 cents to a 
dollar or even less in some cases, looking at the cost as well 
as for the labor needed to apply that.
    Mr. Baca. Okay. And following up with that last comment, 
you said, when looking at the amount of funding each state 
receives and the number of premises each state has registered, 
the cost per registration varies from as little as $10 to as 
much as $800 per premise.
    Can you account for the vast difference in the cost 
effectiveness of cooperative agreement funding?
    Dr. Clifford. Well, the cooperative agreement funding, as I 
indicated, about half of that has been provided to support the 
basic infrastructure, and the other half has been to do a lot 
of this outreach. So it depends upon how that outreach was 
done. And it would be agreement by agreement. So, in some 
cases, people went door to door. In other cases, they may have 
been doing phone or mailings and those types of things.
    Mr. Baca. Is there a better scale that can be developed to 
bring that narrow gap? Because it surely varies between $10 to 
$800.
    Dr. Clifford. Well, when you say $800, it is because that 
particular state was not effective in being able to sign up 
those premises. In states where it was, that dollar amount per 
premises comes down substantially. And, for example, in the 
State of Wisconsin, you had a mandatory premises 
identification, in 2004 their cost per premise was $128. In 
2005 that cost went down to $17 per premise.
    So those variables are directly dependent on their success 
in signing people up. If they are successful, those costs are 
going to come down on a per-premise basis. If they are not 
successful, they are going to climb.
    Mr. Baca. Okay, thank you.
    I yield back the balance of my time.
    The Chairman. The gentleman from Virginia, Mr. Goodlatte?
    Mr. Goodlatte. Well, thank you, Mr. Chairman. I appreciate 
your holding this hearing.
    I appreciate, Dr. Clifford, your testimony and your long 
and hard work on this issue. I very much appreciate that.
    I share a number of the concerns raised by the Chairman 
regarding the lack of progress that has been made at the 
Department, the amount of money that has been spent, the amount 
of time that has been taken. I don't attribute that to you, but 
I do attribute it to schizophrenia that exists down at the 
Department on this.
    As you noted, the previous Secretary of Agriculture, over 3 
years ago, called for a voluntary animal identification system. 
But there are many down at the Department who don't agree with 
that, and I think that that has been a hindrance to the 
progress being made.
    And I think there are a number of examples of why that has 
occurred. For example, I was pleased to hear you say that we 
are going to now get a cost-benefit analysis of animal 
identification system. But the Department has been working on 
this for well over 6 years, and you would think that if you 
were trying to sell producers on the merits of participating in 
a voluntary system, that this cost-benefit analysis would have 
been done at the outset and have been available to them for a 
long period of time.
    So, first, let me ask you, is this cost-benefit analysis on 
a mandatory system or a voluntary system?
    Dr. Clifford. It is on both, sir.
    Mr. Goodlatte. And is it a cost-benefit analysis that is 
targeted at the overall benefits to our country, or is it 
targeted to the benefits that an individual producer will find 
if they participate?
    Dr. Clifford. I think it looks at all of the cost to both 
producer and to government. And it looks at the benefit of this 
with regards to trade, largely, and the movement of product.
    Mr. Goodlatte. Secondly, you have heard the concerns 
expressed here regarding the security of the information that 
producers would provide. You have provided assurance that the 
Department has protected other information that other farmers 
have had. And yet the Department has, on more than one 
occasion, recommended to the Congress that the Congress pass 
legislation to protect this information.
    Dr. Clifford. That is correct.
    Mr. Goodlatte. So, in your recommendation to the Secretary, 
who has the authority to put mandatory animal ID into place, 
would you recommend that he do so without action being taken by 
the Congress to provide the protection recommended by the 
Department? Or would you say, you have to wait until the 
Congress provides that protection?
    Dr. Clifford. I think it is important for the information 
to be protected. As far as the legal issues around this, I 
think that would best be answered by the Department's legal 
staff as well.
    Mr. Goodlatte. And they have recommended that the Congress 
take action to do that.
    Now, you have analogized the protection of this 
information. All we have, right now anyway, is the equivalent 
of a phonebook. But, in a phonebook that I am familiar with, 
there is lots of information that is not in there because 
people have chosen not to put the information in the phonebook.
    Would you recommend that they have that option? Because 
that is what a voluntary system is. A mandatory system says, 
you have to be listed in the phonebook, and you have to worry 
about whether somebody can have access to that phonebook who 
they don't want to have access to it.
    Dr. Clifford. Congressman, I would like to answer that in 
this way: Previously in all of our disease programs, we had 
developed ID systems specific to that program, and we always 
have assigned herd numbers, what we call herd numbers, to those 
herds at the government level. The fact is that those numbers 
were not consistent. One premises could have multiple numbers.
    It is essential for us to have good-quality data and know 
where these animals are in a disease outbreak situation for us 
to be effective. In order to do that, we have to have basic 
premise identification information within that system.
    Mr. Goodlatte. I understand the need for information.
    Dr. Clifford. So my thing is, for it to be effective, it 
has to be----
    Mr. Goodlatte. Gotcha. In fact, I agree with you on that 
point. My concern, however, is, what happens to the person who 
doesn't want to participate? It is not like a phonebook.
    Finally--Mr. Chairman, I might run over a few seconds, if 
that is all right--the third inconsistency I have is in your 
answers to the gentleman from Texas. You have recommended and 
you think that the only way to effectively do this is a 
mandatory system. But you have told him, as a very, very small 
producer, that it should be voluntary on his part.
    And the people we hear from a lot, as you know, are people 
who have--and they are in the commercial market, in many 
instances. They may be selling that one fat horse or maybe not, 
but they are people who have, for example, a small number of 
poultry that they are raising on their grounds. And if those 
poultry are taken to the live markets in New York or other 
places, as you know, that is a very easy way for the diseases 
that we are all concerned about to spread.
    So I guess my last question to you is, is what you are 
recommending really mandatory? Or is it actually mandatory with 
a lot of exceptions that would make it, in fact, voluntary for 
many people? That also seems to be a schizophrenic thing on the 
part of the Department in terms of what we are really striving 
for here. So is it mandatory, or is it voluntary?
    Dr. Clifford. The answer to that question really lies with 
the issues of commerce. If you have animals that are routinely 
going into commerce----
    Mr. Goodlatte. Even if it is a very small operation?
    Dr. Clifford. Even a small operation.
    Mr. Goodlatte. If you are only raising 3 or 4 or 5 birds 
and you take those to a market or something?
    Dr. Clifford. If you are continually raising those birds 
and taking them to a market, our belief is that they should be 
part of the system.
    Mr. Goodlatte. Okay.
    Thank you very much, Mr. Chairman. I appreciate your 
forbearance.
    And thank you, Dr. Clifford. I appreciate your answers.
    The Chairman. Thank you.
    The gentlewoman from Colorado, Ms. Markey, do you have a 
question? You are recognized for 5 minutes.
    Ms. Markey. Yes. I had to step out, so if this question was 
already asked and answered, you can let me know.
    But with respect to premise registration, beef cattle has 
shown to be the most difficult to register, while dairy cattle, 
poultry, swine, sheep, and goats have had a greater 
participation. So what do you think accounts for this 
disparity? And particularly with regard to cost, what do you 
see as the cost differential with beef cattle? And what do we 
do to address that?
    Dr. Clifford. I think the cost-benefit analysis will show 
this. In a mandatory system, the greatest cost for this program 
is going to be to the cattle sector. That is because of the 
cost--a lot of their animals would move as individual animals 
and not as group lots in commerce, which means that individual 
identification would have to be applied. So a large part of 
that cost would lie there with the producers with regards to 
the identification devices and the labor to put those devices 
in.
    With regards to the lack of participation, I think it has 
been very difficult to get the beef cattle sector to sign up. 
That doesn't mean that there are not producers out there 
leading the charge. One of the reasons we went with cooperative 
agreements to the private sector to help assist in this effort 
is we thought members of those associations in the private 
sector would help stimulate participation. It has not been as 
effective as we would have liked. So even the private sectors 
and industry representatives have had difficulty in getting 
their own members to sign up.
    Ms. Markey. And just as a follow-up, because the cost is a 
huge issue--any ways that you are looking at addressing this, 
to get the participation up with the cattle industry? And, as 
Chairman Peterson talked a little bit about having the states 
become more involved because they already have programs set up 
and some of these producers are already participating in those 
state programs.
    Dr. Clifford. Well, and there are ways to reduce some of 
this cost. Obviously, for our purposes, we believe that the 
animal needs to be identified for our purposes when it leaves 
that premise. So while it is on the premise, if it never leaves 
that premise, if it was born and raised on the premises, then 
it really doesn't need to, for our purposes, be identified. It 
may for the producer's purpose. That is one issue.
    The other issue is, over time, as we apply these IDs and if 
we move to an RFID technology, we know that that cost is going 
to come down through competition in the market. And so that 
will help drive down cost.
    For the small producers, you can look at ways of trying to 
provide--the readers can be very expensive for the electronic 
technology. They can range from a few hundred dollars to a 
thousand or more dollars for a reader, which could be very 
expensive to a person who has 10 cows and would not want to 
purchase that.
    So you could look at different methods where they wouldn't 
actually need a reader. Maybe they could utilize a reader from 
a community source or a co-op or something along those lines. 
Or there may be incentives from the Federal government or state 
government to help purchase some of those.
    Mr. Peterson. Would the gentlelady yield?
    Ms. Markey. Yes.
    Mr. Peterson. I just want to make this perfectly clear if I 
didn't make it clear before.
    I had a briefing last week where some folks over at 
Homeland Security estimate--and I don't know if I believe these 
numbers or not--say that the potential risk here to the cattle 
industry is anywhere from $30 billion to $100 billion--$30 
billion to $100 billion. That is $300 to $1,000 per animal.
    Now, I don't know if that is right or wrong, but say that 
it is right. What I am saying to people is, fine, you can get 
all hung up about FOIA and all this other stuff and drag your 
feet, but what you are doing is putting yourself at risk at 
some level of $300 to $1,000 an animal. That is what you are 
doing by continuing to drag this out. All I am saying is, fine, 
if that is what you want to do, have at it. But don't come back 
to me and ask for help if that happens to you, okay? You are on 
your own, and that is the choice you are making. And I will do 
what I can to make sure that the government doesn't bail you 
out if this happens to you.
    Mr. Goodlatte. Would the gentleman yield?
    Mr. Peterson. I just want people to understand.
    Mr. Goodlatte. If the gentlewoman will yield?
    Mr. Peterson. I yield.
    Mr. Goodlatte. I appreciate the gentleman's point. I think 
it is a good one. But wouldn't it also make sense to say that, 
if you want to participate in a voluntary system, that that 
would be one of the precautions? That if you are a participant 
in the system, you would be able to look to the government for 
help in time of a disaster, and if you didn't, you wouldn't? 
That is what we try to say to other forms of disaster relief.
    Mr. Peterson. That would be fine. I just think people need 
to understand the risk they are taking here.
    Mr. Goodlatte. I understand.
    Mr. Peterson. That is what I am concerned about.
    Mr. Goodlatte. And I share that concern.
    Mr. Peterson. And I would be of the same mode. If I was out 
there raising cattle, I wouldn't want the government knowing 
what I am doing either. That is my nature. But I think we have 
to get real about this.
    We are going to try to get the Homeland Security Committee 
and us together to have a briefing that was given to me last 
week. I think people just need to understand what we are facing 
here. It is bigger than just foot-and-mouth. There are other 
issues out there too that haven't really been talked about.
    So, thank you, gentlelady from Colorado.
    The Chairman. Does the lady from Colorado have another 
point, or are you complete with your questioning?
    Ms. Markey. No. Thank you, sir. I am finished.
    The Chairman. Mr. Boswell?
    Mr. Boswell. Thank you, Mr. Chairman. I will be very brief.
    There are some strong feelings, Dr. Clifford. You just 
heard some. I won't try to walk on you. But, you should have an 
opinion. I am not going to ask you to say any more; you have 
made your point. But if you are being muzzled or if you can't 
come up here and tell us what we need to know--I mean, you are 
an expert. That is why we wanted you to be here. We value your 
expertise. If you are told you can't come up here and give us 
straight answers, then we probably need to know that. It is 
just very frustrating, as we feel the tensions that is--I will 
wait. Go ahead and get your counsel because----
    Dr. Clifford. Congressman----
    Mr. Boswell. I am not finished. I was pausing while you got 
your counsel there.
    Dr. Clifford. Okay. I am sorry. I apologize.
    Mr. Boswell. Which is okay. I do the same thing. And we all 
do. That is why I am not criticizing you for getting counsel. 
But if you can't come and tell us, we ought to know that.
    Mr. Chairman, you can't effectively lead us if we can't 
have witnesses come and give us their best of their experience. 
So if he can't speak for the Department, maybe we could 
rephrase it and say, ``Well, what is your opinion?'' versus 
``What are you recommending?'' Maybe he can't share what he is 
recommending.
    I guess I get there because, in my many years of military 
service--and this is a compliment to general officers, people 
of star rank, flag officers--they will support their commanding 
officer up the line right up to the Commander in Chief, no 
question about it. That is the way it works. But every time I 
have ever had the experience, when I was on the Intelligence 
Committee or anything else, ``But, sir, do you have an 
opinion?'' And then they would say, ``Well, this is my opinion, 
just my opinion,'' but they would give it. And it was very 
valuable. It helped. It helped the security of this country.
    And I think that is what you are on, Mr. Chairman, is you 
are concerned about the security of the country and not just 
our industry of livestock, but it is a big security thing. So 
anyway, that is just a suggestion.
    Thank you. I yield back.
    The Chairman. Do you have your opinion on this?
    Dr. Clifford. Yes, sir.
    Mr. Boswell. Let's have it.
    Dr. Clifford. I do have my opinion. The system that we have 
thus far has not worked. Unless we can provide adequate 
incentives for them under a voluntary system, it has to be 
mandatory.
    The Chairman. All right. Thank you very much.
    Mr. Boswell. And I thank you, too. Thank you very much. I 
hope you will forgive me for being so crass.
    Dr. Clifford. No problem, sir.
    The Chairman. We appreciate you in securing his opinion. It 
was very helpful. Thank you, Mr. Boswell. Sort of like pulling 
teeth, isn't it?
    I think we have Mr. Costa here. The gentleman from 
California?
    Mr. Costa. I am not so sure that it all hasn't been said, 
but maybe not everybody has said it. I was pleased to hear your 
final comment that, if you are going to have an animal ID 
program that is successful--I am not trying to put words in 
your mouth, so I just want to be clear--that it has to be 
mandatory, it can't be voluntary. Is that correct?
    Dr. Clifford. It is either that or it needs to have 
incentives that would get a high level of participation for 
producers.
    I mean, frankly, sir, the bottom line for me is, as an 
animal health official for the U.S. government and somebody 
that cares very much about our animal health, the system has to 
be effective. This is not effective. And I don't think that 
this Secretary or even we want to continue to shove dollars at 
a system that we are not able to get the level of participation 
that we need to have an effective system.
    Mr. Costa. So for the implementation of a successful 
program, what would you say are the key elements in the 
transition that we have to make from where we are today to this 
mandatory program, realizing the diversity that exists today 
among the various segments within the industry; both from the 
cow-calf, the feed lot operations, the dairy operations; I mean 
the whole--and the packers? Have you given some thought on how 
you would take this current system that I think everyone agrees 
is not working----
    Dr. Clifford. Absolutely.
    Mr. Costa. And what are the steps?
    Dr. Clifford. You can't go from where we are today to a 
fully 100 percent participation in a matter of a short period 
of time and have all the tracking components and everything.
    So, in the meantime, our recommendation would be to 
initially move to an immediate bookend approach, as Chairman 
Peterson mentioned earlier in his statement, which basically 
gives us the front end of premises being registered, and it 
collects that data and information at the time the animal is 
slaughtered or dies. So that we have two ends to connect the 
dots in between with the animal's movements.
    Mr. Costa. And in those bookends you envision what, a 12- 
or 24-month period? What timing are you looking at?
    Dr. Clifford. We believe we could have that in place--
including the rulemaking for that, we would be looking at 
something around 2 years or less, to have that full--and then 
followed by another year or two with the traceability 
component.
    Mr. Costa. So we are talking about 3 years?
    Dr. Clifford. Probably 3 to 4 for full, effective 
implementation.
    Mr. Costa. What would be the second and third step 
necessary?
    Dr. Clifford. I am sorry?
    Mr. Costa. What would be the second and third step 
necessary to make this transition successful and to get buy-in 
from all of the various segments within the industry?
    Dr. Clifford. Well, to make the transition successful on 
the bookend approach, we have to have a high degree of premises 
registered on the front end, with ID being used in commerce.
    And then the second component would be that the packers and 
slaughter facilities would need to be collecting and entering 
that information in the database at the time of the animal 
being slaughtered or at the time of death on the farm that that 
information is provided.
    Mr. Costa. And how do we pay for this?
    Dr. Clifford. The payment, depending upon the breakout for 
government versus private sector, would vary, and depending 
upon the level, but it is somewhere--the total payment 
necessary would be something less of--somewhere in the range of 
$160 million to $190 million for a bookend approach.
    Mr. Costa. And where would the data collection reside? 
Within each individual operation, i.e., whether it be a packer 
or whether it be a cow-calf operation or a dairy?
    Dr. Clifford. We would have the data with regards to the 
premise location and the ID itself. And then the ID would be 
retired once that animal is slaughtered.
    Mr. Costa. My final question--and I will submit some other 
questions, Mr. Chairman, with your permission, under unanimous 
consent--is, do you think for the successful implementation of 
a national ID program that it is necessary--or do you concur 
with the statement that it is necessary for a transparent 
implementation of the MCOOL program?
    Dr. Clifford. With the COOL program?
    Mr. Costa. Yes.
    Dr. Clifford. The COOL program is obviously a separate 
issue.
    Mr. Costa. Right.
    Dr. Clifford. But the 840 number has been basically called 
safe harbor as a basis for U.S.-born animals. And we have 
regulated that and allowed the 840 number to be used solely for 
U.S.-born animals for COOL. So it certainly--if that is 
utilized in COOL, it could be an assistance and a driver in 
animal ID.
    Mr. Costa. My time has expired, Mr. Chairman, but just for 
the Chairman and Members of the Committee, for your own 
thoughts, in my view you cannot have a successful 
implementation of a transparent MCOOL program without a 
national mandatory ID program. I just don't see how you do it. 
I know that we are talking--I believe the two are linked.
    Thank you very much. My time has expired.
    The Chairman. Thank you very much.
    And we thank you, Dr. Clifford. This has been a very 
informative exchange. I am sure that you see from this 
Committee there are many, many questions, there is a great 
concern, because there is a great concern within the public 
about our food safety. Many questions are being raised. And it 
is my hope that you will be able to share with the 
Administration and with Mr. Vilsack how important this issue 
is. And this Subcommittee will be moving very aggressively to 
protect our food supply. And this National animal ID system is 
the key to that.
    So we thank you.
    And we will now have our second panel begin to assemble.
    Thank you very much.
    Dr. Clifford. Thank you.
    The Chairman. We want to welcome this panel, a very 
distinguished panel.
    We also want to notify everyone that we will have a series 
of votes coming up at some point. We will pause at that 
particular point and go take these votes and come back and 
resume the panel. And we certainly appreciate your 
understanding and cooperation with us on our schedule for 
voting.
    I want to welcome our distinguished panel, and let me 
introduce them at this time.
    We have Mr. Bill Nutt, who is the President-elect of the 
Georgia Cattleman's Association, on behalf of National 
Cattleman's Beef Association, Cattle Health and Well-Being 
Committee. And he is from Cedartown, Georgia.
    Welcome, Mr. Nutt. Glad to have you.
    Dr. Max Thornsberry, DVM, who is the President of the Board 
of R-CALF USA, from Richland, Missouri.
    Welcome. Good to have you, Dr. Thornsberry.
    And we have Mr. Donald B. Butler, President of the National 
Pork Producers Council, from Clinton, North Carolina.
    Welcome.
    Dr. Karen Jordan, DVM, Owner, Large Animal Veterinary 
Services, co-owner, Brush Creek Swiss Farms, on behalf of the 
National Milk Producers Federation, Siler City, North Carolina.
    And we have Dr. W. Ron DeHaven, D.V.M., M.B.A., Chief 
Executive Officer of the American Veterinarian Medical 
Association, Schaumburg, Illinois.
    Welcome to all of you. Thank you for coming.
    Mr. Nutt, we will begin with you.

 STATEMENT OF BILL NUTT, PRESIDENT-ELECT, GEORGIA CATTLEMEN'S 
    ASSOCIATION, ON BEHALF OF THE NATIONAL CATTLEMAN'S BEEF 
ASSOCIATION CATTLE HEALTH AND WELL-BEING COMMITTEE, CEDARTOWN, 
                            GEORGIA

    Mr. Nutt. Thank you, Chairman Scott, Representative 
Neugebauer, Members of the Subcommittee, ladies and gentlemen. 
It is a pleasure to be here. I look forward to the opportunity 
to share with you some insights into the way we are operating a 
herd management system that, incidentally, provides animal 
traceability in there.
    I operate a small cattle business in Georgia. We produce 
animals in Georgia and in Alabama, have premises in both 
states. We ship the animals to feed lots in Iowa. When they are 
ready, they are harvested, and the carcasses are sold on the 
markets in Omaha. So we are kind of an integrated operation 
that goes through several things in there.
    Our management system is based on managing from cradle to 
grave for the animals that we raise. Any animal that is born on 
my place, my premises, gets identified and tagged on the day it 
is born. We follow it through for the period that it is 
available in our operation. At the point in time we send it to 
the feed lot, we transition to another system, a cooperative 
group that coordinates shipments, moves them to the feed lot in 
Iowa. They have their own tracking system.
    And, by the way, we have animal ID from day one and keep it 
current, and it gets handed off system to system.
    When the animals get in the feed lot, still another system 
of tracking and record-keeping picks it up and follows it 
through to harvest. And it ties in with the packers and the 
harvest houses, data records in there. So there is a complete 
cradle-to-grave traceability and history of those individual 
animals by number in there.
    You might say, what about animals I purchase? And we do 
that sometimes. We follow the same system with them, 
introducing a unique number on the day they enter our herd, and 
we follow them through in the other system as we go in.
    This system is a market-driven, free-choice sort of thing 
that has operated for some years. It provides data, and the 
system is certified. All of those pieces allow my products to 
be sold on the international market, on the Japanese market, 
which is probably the most difficult export market to provide 
the data for in there.
    Age and source verification, other premium identifiers are 
carried in the system. And it is basically a management system 
that allows us to focus on the high end of the market and 
getting the best deal we can for our products in there. It 
follows through, and it works very well. And the primary 
purpose is not animal traceability. The primary purpose is herd 
management and effective business management. And I would like 
to just follow this on through.
    I would say that this system has worked for a number of 
years. The system does not--does not--require an electronic ID 
system. The system does provide for the use of electronic IDs. 
And I want to talk about that again in just a second, a couple 
of thoughts on the electronic ID situation in there. We do 
follow through, and it works very well.
    How did this come about? Good business decisions led us to 
come up with this particular set of software. We could use what 
we have. There are other sources available that have been 
developed. They are all in the commercial market. They are 
market-driven, and they provide value-added data to producers 
like myself who use this information to try to fine-tune our 
operations and get things out.
    Once again, incidentally, they provide traceability in 
there. Every time my animal moves from premise to premise, that 
is entered into the database. When it moves over to the feed 
lot coordination group, there is a different premise there, and 
so on, all down the chain, so that there is a track record 
there and the electronic IDs are there.
    I ought to mention electronic IDs. We haven't used them in 
the past. I do have the readers. I do have them on some of my 
cattle. These are international standard, ISO-compliant 
devices. If you have never seen one of those, that is what an 
EID tag looks like. All it is is a piece of plastic. It has a 
little bit of electronic circuitry inside. And that by itself, 
with the proper reader, and when you put it in the tag of an 
animal and enter that into a database, lets you do some 
identity.
    In practical purposes, it is awful hard when a cow is in a 
herd to go read that little ID, so we use supplemental things 
like visual ear tags.
    The Chairman. Mr. Nutt, may I just interrupt just for one 
second? We want you to kind of wrap up. We have these pressured 
times. And to all of our witnesses, we are going to try to hold 
you close to the 5 minutes so that we can get everything in 
before we go vote, and then we can come back with questions. 
But your testimonies, your full testimonies are part of the 
record.
    So if you could, Mr. Nutt, just summarize right quick, and 
we just appreciate you all understanding our time constraints.
    Mr. Nutt. Thanks, Chairman Scott. I will do so.
    I could summarize our position by saying this: We have a 
free-market-driven system that pays in the management of our 
activities. It wasn't contrived to do animal tracking, but it 
does indeed have that as a by-the-way fallout capability of it.
    Would I be satisfied and comfortable with my whole system 
being swept into a mandatory ID system? Absolutely not. But 
that part of my system that has to do with an individual animal 
and where it is would indeed work in there.
    Thank you very much for the opportunity to discuss with 
you, and I will be happy to answer any questions at the 
appropriate time.
    [The prepared statement of Mr. Nutt follows:]

 Prepared Statement of Bill Nutt, President-Elect, Georgia Cattlemen's 
Association, on behalf of National Cattleman's Beef Association Cattle 
          Health and Well-Being Committee, Cedartown, Georgia
    Chairman Scott, Ranking Member Neugebauer, and Members of the 
Subcommittee, my name is Bill Nutt and I am a cattle producer from 
Cedartown, Georgia. I am President-elect of the Georgia Cattlemen's 
Association and a member of the National Cattlemen's Beef Association's 
(NCBA) Cattle Health and Well-Being Committee. I appreciate the 
opportunity to testify today on my use of animal identification.
    I will start by stating that NCBA's policy supports a voluntary, 
market-driven approach to animal ID. The cattle industry recognizes the 
need for an animal identification plan that is an effective disease 
surveillance and monitoring tool which serves the needs of America's 
cattle producers. Enabling state and Federal animal health officials to 
respond rapidly and effectively to animal health emergencies, such as 
foreign animal disease outbreaks, is important in protecting our 
national herd, and NCBA has encouraged cattle producers to register 
their premises and participate in an animal ID program.
    Our industry has serious reservations, though, about a mandatory 
animal ID program. One of the significant concerns is the 
confidentiality of producer information that would be held in a USDA 
database. All data on producers, their land and premises, and their 
cattle is extremely sensitive, and in many cases proprietary. This is 
not the type of information that is meant for public disclosure. The 
release of that information would expose producers to additional 
liability and risk. The location of their operation could open them up 
to protests by activist groups at their front gate. The location and 
number of their cattle could be used against them by competitors or 
potential buyers.
    USDA does not have a good track record when it comes to information 
confidentiality. As recently as 2007, USDA had problems with FSA 
leaking producers' social security numbers through their website. If 
USDA cannot guarantee the security of something as important as social 
security numbers, how are we to expect them to safeguard our animal ID 
information? More importantly, it has yet to be shown that USDA can 
prevent the animal ID database information from being released to a 
Freedom of Information Act (FOIA) request.
    Animal identification, animal movement, and premises registration 
information should be held in a secure location and protected from 
disclosure. In addition, the information should only be accessed by the 
appropriate state and federal agencies in the event of a Secretary of 
Agriculture declared animal health emergency.
    In the meantime, NCBA supports voluntary adoption of individual 
animal identification programs that support genetic improvement, source 
verification, and disease surveillance. In addition, the private sector 
should have a central role in providing identification solutions that 
fit the varying needs of America's cattle producers. The private sector 
should be utilized to provide ISO-compliant identification devices and 
data collection systems, distribution of system components, and 
associated hardware and system certification. The private sector should 
also provide the various software elements required to make the animal 
ID system work by tracking premise-to-premise animal movements during 
each animal's lifetime so as to provide a responsive trace-back 
capability in the event of a declared animal health emergency. The 
private sector involvement will enable and allow competitive market 
forces to benefit producers and industry while maintaining the 
objectives of the National Animal Identification System (NAIS).
    I would like to explain to you how I utilize voluntary, market-
driven animal identification in my own operation. I am one of many 
smaller producers in the beef industry. I have found that cooperative 
efforts with other producers enables my operation to be responsive to 
the ever-changing beef market demands, that when responded to, can 
enhance our success in serving these markets profitably.
    For many years I have produced high quality beef cattle that I 
raise in Georgia, ship to Iowa cooperatively with other producers for 
custom feeding by another small farmer-feeder group, and then, still 
within the cooperative effort, sell the finished carcasses in Omaha. I 
have found no better way for producers of quality beef to receive the 
full value of the cattle we so carefully bred, developed, and raised 
for the markets we target.
    I maintain lifetime data on all my animals starting on the day they 
are born on my operations, and in the case of purchased animals, when 
they enter my herd. The record and tracking systems I use provide, 
among other things, source and age verification capability that 
qualifies the beef produced to be sold in premium markets that require 
source/age, genetic, and other certifications that result in my 
customers paying premiums for these certifications. Age and source 
verification alone can add $40 to $80 premiums for finished beef.
    The data collection and management system used on my operation is 
simple. Cattle raised on my premises are recorded and tracked beginning 
on the day they are born. Each animal is processed and tagged in the 
pasture and pertinent information (eg: tag number, date of birth, sire, 
dam, birth-weight, etc.) is entered in permanent field record books. 
The data is then put into a computerized system. Pertinent individual 
animal data is subsequently added into the record system during the 
time each animal is in my system. When animals are shipped to Iowa 
feedlots, the feedlot system picks up tracking and follows each animal 
through harvest and subsequent carcass sales. I receive periodic status 
and performance reports during the feeding process, and when each 
feedlot pen is closed out, comprehensive records of each animal are 
provided back to me.
    This feedback data, combined with the information collected prior 
to shipment, forms the basis for careful on-going total herd management 
to meet my business plan objectives. It enables me to monitor the 
effectiveness of my genetic development efforts and other key 
management objectives. This system relies on a unique animal identity 
for tracking but does not require Electronic ID (EID) tags to function. 
Visual ear tags have worked for many years and continue to function 
satisfactorily. However, additional use of market-driven, commercially 
available ISO compliant EIDs correlated to the visual tags is becoming 
more widely utilized in facilitating individual animal identification 
in mass processing. Our current systems handle the addition of 
commercially available visual tag-correlated EIDs with no problems 
today and will continue to do so in the future, barring unforeseen 
complications from ill advised regulatory agencies.
    While my system has been developed on my operation based on 
commercially available software which I have tailored to my needs, a 
number of similar animal identification and tracking systems exist and 
can be used. Commercial systems are available, and many beef breed 
associations have tagging systems available to identify, promote, and 
market cattle based on their particular genetics. Other sources, such 
as the Southeastern Livestock Network--a regional multi-state 
cooperative producer group, have available data management systems that 
collect and process the individual animal data in ways that add value 
to producers.
    These validated systems are all private sector, market driven, and 
voluntarily applied based on efficient business management principals. 
Traceability is provided, and since the private systems are not subject 
to FOIA, data confidentiality is not an issue!
    Our systems currently work effectively in response to competitive 
market driven forces. These systems were developed, and work well, 
under the concepts of the voluntary NAIS cooperatively developed by 
industry and involved agencies. I am very concerned, however, about the 
effects of the latest USDA proposals and initiatives. Moving to 
mandatory animal ID will change our system from a flexible, market-
driven approach to a rigid bureaucratic system that gets in the way of 
good business management of our operations and adds additional risks 
and potential liabilities.
    According to APHIS, the proposed rule entitled USDA APHIS 
``Official Animal Identification Numbering Systems'' is the next step 
in developing a nationally integrated, modern animal disease response 
system and is intended to create greater standardization and uniformity 
of official numbering systems and ear tags used in both official animal 
disease programs and the National Animal Identification System (NAIS).
    While it would not technically require the use of the animal 
identification number (AIN), the rule would require that when AINs are 
used, only those numbers beginning with the 840 prefix will be 
recognized as official for use. This will be effective for all AIN tags 
applied to animals 1 year or more after the date of the finalization of 
this proposed rule. It would also remove the current Premises 
Identification Number (PIN) format that uses the state postal 
abbreviation and proposes to create a single national seven-character 
alphanumeric code format. In addition, the rule would create new 
requirements for official ear tags and going forward, official ear tags 
used in animal disease programs could only be issued to registered 
premises that have PINs. All official ear tags would be required to 
bear the U.S. shield and the use of the shield will be allowed only on 
official identification devices approved by APHIS.
    A good example of my concerns is the apparent fixation within USDA 
to control and track movements of official APHIS EID tags and the 
proposed rule mandating ``840'' tags as the only acceptable tags. This 
will further restrict the distribution of these tags, thus making it 
more and more difficult and expensive for the beef industry to have 
ready access to the EIDs. Consider the following; for an EID to work 
within the system, it is mandatory that each EID comply with recognized 
ISO technical specifications that apply worldwide. The 840 EIDs comply, 
as do numerous other functionally equivalent EIDs that are widely 
available and widely used. Incidentally, 840 refers to the first three 
digits in the standardized multi-digit number sets that provide a 
unique numeric identifier for each EID in accordance with International 
standards. Currently, the initial three digit set is used as a country 
or as an EID manufacturer's code.
    In reality, valid ISO compliant EID's in the production and 
distribution systems, in my supply cabinet, or anywhere else prior to 
their being attached to an individual animal and the number/animal/
premise data entered into a database, have absolutely no practical 
significance to any animal tracking system! Until these conditions are 
met, the EIDs are nothing more than tiny, uniquely identified 
electronic devices encased in plastic.
    It is extremely difficult to categorize efforts to track and 
control production and distribution of the EIDs as a ``value added'' 
function. Rather, these bureaucratic efforts simply add additional and 
unnecessary costs throughout the system by impeding competitive 
production and distribution, thus resulting in increased costs and 
aggravation to producers which in turn will discourage producer support 
and participation. Should this occur, the tracking systems' software 
must continue (as they do now) to be capable of recognizing that U.S. 
operations will probably always operate with multiple initial digit 
sets.
    The issue of premises registration is also of some concern. The 
APHIS proposal seeks to change the current, state-by-state system into 
a uniform, national system. We ask APHIS to look at the impact on 
producers, like me, who have already registered premises to determine 
the economic impact of having to change to a uniform system. This 
change cannot but additional economic burdens on cattle producers.
    In conclusion, I hope you see how a voluntary, market-driven animal 
identification system can work for producers, and why we are against a 
mandatory system. The lack of effort to protect producer data or ensure 
private sector involvement are just many reasons why we cannot support 
a mandatory system.

    The Chairman. Thank you, Mr. Nutt.
    Dr. Thornsberry?

STATEMENT OF R.M. ``Max'' THORNSBERRY, D.V.M, PRESIDENT OF THE 
             BOARD, R-CALF USA, RICHLAND, MISSOURI

    Dr. Thornsberry. Yes, thank you very much. Good morning, 
Chairman Scott and Ranking Member Neugebauer and the Members of 
the Subcommittee. I do appreciate the opportunity to be here.
    I am Dr. Max Thornsberry. I am a 32-year practicing 
veterinarian, food animal primarily, from southern Missouri. My 
family has been in that area from the 1830s, and I am the 
fourth generation to live on the same farm and raise livestock. 
So we have a long background and history of being part of the 
livestock system.
    I also got out of veterinary school in 1977 and 
participated in the latter end of the hog cholera eradication. 
The very first herd that I tested for brucellosis in August of 
1977 had 65 bangers, or positive cows, in it. So I have had a 
very firm and practical education in disease eradication and 
control.
    I need to speak to you today from representing the members 
of R-CALF USA. We are an independent livestock organization. I 
am president of the board of directors. There are 10 directors 
scattered across the United States, representing various 
states. I represent the six midwestern states where most of the 
cow-calf operations are in the United States. Missouri is the 
number-two cow-calf state in the union. Texas is the only other 
state that has more mother cows than calves produced.
    We have heard some information today that I think is 
incorrect. You have heard that there are 35 percent of the 
premises signed up for animal ID. That is a misleading number. 
If you were to count the dairy and the pork and the poultry, 
that would be very, very appropriate. But when you count beef 
production in the State of Missouri, our state veterinarian 
said we have between 7 and 9 percent of the beef operations 
signed up. That is after millions of dollars being spent 
nationwide and hundreds of thousands of dollars being spent in 
Missouri to try to get people enticed to sign up for a free 
premises ID.
    People in my state that have a cow herd average of 33 cows 
per farmer are not interested in the system. They are 
interested in the system that Mr. Nutt has defined, a market-
driven system. I have a 500-head preconditioning lot. I have 
been in animal ID since 1998. I have a computer, a printer, two 
readers in case one goes down, a hookup to the Internet, and a 
series of tags and taggers that are required for me to 
participate. That is a cost I have incurred because there is an 
economic advantage for me to participate. Average producers in 
our state do not see that economic advantage. They do not want 
a premises number assigned to their real estate.
    This thing is primarily driven by treaties and other 
agreements we have made with the World Trade Organization. 
Sitting in the American Association of Bovine Practitioners 
meeting 2 years ago in Vancouver, Bruce and I told a group of 
about 600 veterinarians, the question was asked. ``Mr. Knight, 
why are you so hell bent on getting this system on to my 
clients?'' And he replied, ``It is very simple. We want to be 
in compliance with the OIE by 2010.'' Now, some of you may not 
know what the OIE is, but it is the Office of International 
Epizootics. It is a World Trade-represented organization that 
is in Belgium. It is the organization that is demanding that we 
have animal ID.
    Now, if we get animal ID in the United States, that will be 
Canada and us and possibly Uruguay in the Western Hemisphere 
that have identified and put in place such a system. That puts 
us in a very unfair trading position.
    I spent, in 2005, a couple of weeks in all of Central 
America, in Nicaragua, Honduras, Costa Rica. The only Central 
American country I didn't go to was Belize and Panama. And I 
can tell you, those countries are not going to participate in 
electronic mandatory animal ID. They have had cattle there 
since Columbus landed, and they have a hot-iron branding system 
that they like. You can even go to the poorest country in the 
Western Hemisphere in Haiti and they have a hot-iron brand 
certificate that must accompany the transfer of ownership of 
livestock.
    There are many systems that our organization has in place. 
We do not oppose animal ID, but we do oppose it being 
mandatory. Our policy is very simple: If you want to 
participate, fine; if you don't, fine.
    We have had very successful systems in the past that have 
worked and functioned to control and eradicate diseases. And 
those systems are being disingenuously negated by indicating 
that we must have a national animal ID system in place. I do 
agree that if we are going to have a system, it will be 
mandatory, and the cost of that mandatory system will be many 
times more than the $200 million figure that you have been 
given.
    Thank you.
    [The prepared statement of Dr. Thornsberry follows:]

Prepared Statement of Robert Max Thornsberry, D.V.M., M.B.A., President 
              of the Board, R-CALF USA, Richland, Missouri
    Good morning Chairman Scott, Ranking Minority Member Neugebauer, 
and Members of the Subcommittee. I am Max Thornsberry, D.V.M., and I 
thank you for the opportunity to provide testimony regarding the 
Subcommittee's review of animal identification systems.
    I am here today representing the cattle-producing members of R-CALF 
USA, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of 
America. R-CALF USA is a membership-based, national, nonprofit trade 
association that represents exclusively United States farmers and 
ranchers who raise and sell live cattle. We have thousands of members 
located in 47 states and our membership consists of seed stock 
producers (breeders), cow/calf producers, backgrounders, stockers and 
feeders. The demographics of our membership are reflective of the 
demographics of the entire U.S. cattle industry, with membership 
ranging from the largest of cow/calf producers and large feeders to the 
smallest of cow/calf producers and small feeders. Our organization's 
mission is to ensure the continued profitability and viability for all 
independent U.S. cattle producers.
    Today I will describe the various animal identification systems 
employed by the U.S. cattle industry and explain how, together with 
prudent disease prevention strategies, those systems have successfully 
prevented, controlled and eradicated animal diseases better than in any 
other country in the world. Also, I will address why the U.S. 
Department of Agriculture's (USDA's) proposed National Animal 
Identification System (NAIS) represents a weakening of our superior 
disease prevention, control and eradication strategies, and why the 
NAIS is ill-conceived, unnecessary, unworkable and un-American.
I. Introduction
    The United States' success in preventing, controlling, and 
eradicating diseases and pests in livestock and preventing zoonotic 
diseases from infecting humans relies on the following three 
independent, though interrelated, strategies that I will list in 
descending order of effectiveness:
    1. Disease Prevention (preventing the introduction of diseases into 
        the U.S. cattle herd): consisting of good animal husbandry 
        practices, vaccination programs, and border restrictions that 
        disallow disease vectors from entering the United States.

    2. Disease Control (halting the spread and dissemination of a 
        disease inadvertently introduced into the U.S. cattle herd): 
        consisting of disease reporting, disease surveillance, 
        geographical containment, quarantines, restrictions on animal 
        movements, identifying and monitoring animals-of-interest, and 
        elimination of disease vectors.

    3. Disease Mitigation (minimizing the risk of human exposure to 
        potentially contaminated meat products when contamination is 
        probable): consisting of the removal of high-risk tissues from 
        human food and animal feed and enforcement of sanitary food 
        processing and handling procedures.

    As recently as 2003, 13 federal executive Departments and agencies, 
including USDA, Health and Human Services (HHS), Department of 
Commerce, and the U.S. Trade Representative formed a Federal Inter-
Agency Working Group and reported to Congress on the actions by federal 
agencies to prevent foot-and-mouth disease (FMD), bovine spongiform 
encephalopathy (BSE), and related diseases. The group reinforced the 
need for each of foregoing strategies in order to protect the United 
States from the introduction and spread of bovine spongiform 
encephalopathy (BSE).\1\
---------------------------------------------------------------------------
    \1\ See Animal Disease Risk Assessment, Prevention, and Control Act 
of 2001 (PL 107-9), Final Report, PL 107-9 Federal Inter-Agency Working 
Group, January 2003 (disease prevention and control strategies are 
found at 40, 41).
---------------------------------------------------------------------------
II. Mandatory Animal Identification Is Not An Effective Disease 
        Prevention Tool
    Mandatory animal identification is not an effective tool for 
preventing the introduction of diseases into the U.S. cattle herd, and 
there is empirical evidence that the United States has unwittingly 
relied upon animal identification as a disease prevention measure to 
the detriment of the health of the U.S. cattle herd, the U.S. economy, 
and U.S. consumers. For example:

    1. In its attempt to prevent the introduction of bovine 
        tuberculosis (TB) and brucellosis into the U.S. cattle herd 
        from Mexican cattle imports, USDA requires all Mexican cattle 
        imported into the U.S. to be individually identified with a 
        permanent brand or a numbered eartag. \2\ However, USDA's 
        Office of Inspector General (OIG) reported in 2006 that of the 
        272 bovine TB cases detected during the previous 5 years by 
        U.S. slaughter surveillance, 75 percent (205) originated in 
        Mexico, and these cases were detected in 12 U.S. states. \3\ 
        The OIG explained that because Mexican cattle spend many months 
        on U.S. farms and ranches prior to slaughter, each bovine TB 
        case is potentially spreading the disease in the United States. 
        \4\ Thus, not only is the mandatory animal identification of 
        Mexican cattle not helping to control or eradicate TB in the 
        U.S., its misapplication as a disease prevention tool is 
        actually contributing to the spread of the disease, which 
        continues to cause significant economic losses for U.S. farmers 
        and ranchers, as well as increased health and safety risks to 
        the U.S. cattle herd and consumers.
---------------------------------------------------------------------------
    \2\ See 9 CFR Sec. Sec. 93.427(c), (d).
    \3\ See Audit Report: Animal and Plant Health Inspection Service's 
Control Over the Bovine Tuberculosis Eradication Program, U.S. 
Department of Agriculture, Office of Inspector General, Midwest Region, 
Report No. 50601-0009-Ch, September 2006, at 19, 20.
    \4\ See id., at iii.

    2. In an attempt to ensure compliance with the health and safety 
        provisions contained in USDA's rule that reopened the Canadian 
        border to imports of live Canadian cattle, despite Canada's 
        ongoing BSE outbreak, USDA required, beginning in July 2005, 
        that all Canadian imports be permanently and individually 
        identified with eartags and brands (cattle imported in sealed 
        trucks for immediate slaughter were exempted). \5\ However, the 
        OIG reported that USDA did not adequately meet required health 
        and safety provisions designed to prevent the introduction of 
        BSE. \6\ In a March 2008 report, the OIG found that over 
        142,000 identified cattle and swine from Canada were 
        slaughtered in U.S. slaughtering establishments without USDA 
        ensuring that proper import protocols were in place, \7\ that 
        USDA could not ensure that identified Canadian cattle even 
        arrived at approved slaughtering establishments, \8\ and that 
        there were 145 indications of non-compliance with the health 
        and safety standards contained in the agency's rule. \9\ In 
        addition, another OIG report revealed that USDA was not 
        properly performing and/or enforcing ante-mortem inspections of 
        cattle at slaughter and that a measure crucial to the 
        protection of human health--the removal of specified risk 
        materials (SRMs)--is not being performed properly, even at 
        plants that slaughter cull cattle that have an inherently 
        higher risk for BSE. \10\ Thus, while individual animal 
        identification was touted as a mitigation measure to help 
        prevent the introduction and spread of BSE, as well as to 
        prevent human exposure to the disease, the mandatory individual 
        identification of Canadian cattle functioned as a false panacea 
        that has effectively subjected the U.S. cattle herd and 
        consumers to increased health risks.
---------------------------------------------------------------------------
    \5\ See 70 Federal Register, at 549.
    \6\ See Audit Report: USDA's Controls Over the Importation and 
Movement of Live Animals, Office of Inspector General, Midwest Region, 
Report No. 50601-0012-Ch, March 2008, et. seq.
    \7\ See Audit Report: USDA's Controls Over the Importation and 
Movement of Live Animals, Office of Inspector General, Midwest Region, 
Report No. 50601-0012-Ch, March 2008, at 29.
    \8\ See id., at 16.
    \9\ See id., at 8.
    \10\ See Audit Report: Evaluation of FSIS Management Controls Over 
Pre-Slaughter Activities, U.S. Department of Agriculture, Great Plains 
Region, Report No. 24601-0007-KC, November 2008, et. seq.

    R-CALF USA fully supports the mandatory identification of all 
imported cattle with a permanent hot-iron brand that would 
conspicuously denote the animals' country-of-origin. However, the 
importation of foreign cattle subject to such mandatory animal 
identification should only be allowed following a scientific 
determination that the country-of-origin of the imported cattle 
presents no known risk for any serious communicable disease. Because 
mandatory animal identification can neither prevent the introduction of 
disease, nor even mitigate potential introduction of disease, the 
purpose of such mandatory animal identification for imported cattle 
would be to facilitate the location and monitoring of cattle imported 
from a country that experiences a communicable disease outbreak 
subsequent to the scientific determination that the disease was not 
known to exist in that country.
III. USDA Provides No Evidence That Existing Disease Programs Are 
        Inadequate
    The U.S. has been highly successful in controlling and/or 
eradicating animal diseases following their introduction into the U.S. 
cattle herd. For example, of diseases that affect cattle, swine, or 
multiple species reportable to the World Organization for Animal Health 
(OIE) that have occurred in the U.S., contagious bovine pleuropneumonia 
has not reoccurred since 1892, foot-and-mouth disease (FMD) has not 
reoccurred since 1929, bovine babesiosis has not reoccurred on the U.S. 
mainland since 1943, classical swine fever has not reoccurred since 
1976, brucellosis (Brucella melitensis) has not reoccurred since 1999, 
and porcine cysticercosis has not reoccurred since 2004. \11\
---------------------------------------------------------------------------
    \11\ See Table A2.3: Status of the Occurrence of OIE-Reportable 
Diseases in the United States, 2007, 2007 United States Animal Health 
Report, U.S. Department of Agriculture, Animal and Plant Health 
Inspection Service, Agriculture Information Bulletin No. 803, issued 
September 2008, at 133, 134.
---------------------------------------------------------------------------
    Bovine TB presented a significant risk to people and caused 
considerable losses in the cattle industry in the early 1900s, but by 
the 1990s USDA's Animal and Plant Health Inspection Service (APHIS) had 
reduced bovine TB prevalence to ``very low levels.'' \12\ Even despite 
the continued reintroduction of bovine tuberculosis (TB) in Mexican 
cattle, as discussed above, at the end of 2007 APHIS reported that ``49 
U.S. states (including Michigan's Upper Peninsula and part of New 
Mexico), Puerto Rico, and the U.S. Virgin Islands were considered 
Accredited TB Free.'' \13\ In 1954, APHIS set out to eradicate 
brucellosis, and by the end of 2007 APHIS reported that ``49 states, 
Puerto Rico, and the U.S. Virgin Islands were officially declared free 
of brucellosis.'' \14\ According to APHIS, ``The only known remaining 
reservoir of Brucella abortus infection in the Nation is in wild bison 
and elk in the Greater Yellowstone Area (GYA),'' \15\ and cattle in 
proximity to the GYA from both Montana and Wyoming have recently been 
infected.
---------------------------------------------------------------------------
    \12\ 2007 United States Animal Health Report, U.S. Department of 
Agriculture, Animal and Plant Health Inspection Service, Agriculture 
Information Bulletin No. 803, issued September 2008, at 29.
    \13\ Ibid.
    \14\ Id., at 35.
    \15\ Id., at 37.
---------------------------------------------------------------------------
    Results such as these completely contradict USDA's claim that a 
radical, new, and unproven National Animal Identification System (NAIS) 
is now needed in order to effectively control the spread of animal 
diseases in the United States. Obviously, USDA did not lack necessary 
resources to control and eradicate animal disease outbreaks in the U.S. 
during the past 117 years.
    Congress should take particular notice of APHIS' failure to provide 
any semblance of a scientific risk assessment to support its assertion 
that NAIS is now necessary to effectively control and eradicate animal 
diseases. In particular, Congress should demand from USDA a science-
based evaluation of the epidemiological necessity and/or value of 
achieving 48-hour traceback--a stated goal of NAIS--to effectively 
control the range of diseases likely to affect livestock. This goal is 
without any scientific support and appears wholly arbitrary, 
particularly when one considers that many communicable diseases have 
long incubation periods and are slow spreading, e.g., brucellosis, 
bovine TB, and BSE. Moreover, communicable diseases that spread 
swiftly, such as FMD, require immediate geographical containment and 
quarantine strategies, not the identification of individual animals-of-
interest. And, many diseases are spread by vectors other than domestic 
livestock, such as the spread of Rift Valley Fever by mosquitoes, \16\ 
and therefore require very different containment and control strategies 
unrelated to livestock identification. R-CALF USA is disturbed by how 
decision makers have so uncritically subscribed to USDA's assertions 
regarding the need for NAIS without any substantiating scientific 
evidence.
---------------------------------------------------------------------------
    \16\ See Rift Valley Fever, Saudi Arabia, Impact Worksheet, USDA 
APHIS, Veterinary Services, Center for Emerging Issues, September 20, 
2000, available at http://www.aphis.usda.gov/vs/ceah/cei/taf/
iw_2000_files/foreign/rvf_saudi0900e.htm.
---------------------------------------------------------------------------
IV. The Driving Force Behind NAIS Is A Desire To Conform To 
        International Standards
    This leads us to the fact that USDA's radical NAIS concept did not 
originate on U.S. soil and was not predicated on a need to improve the 
United States' ability to control the spread of animal diseases. 
Instead, the impetus for NAIS was the World Trade Organization's 
(WTO's) goal, formulated in 1995, of facilitating international trade 
through the liberalization of international trade rules. \17\ Because 
livestock presented a unique challenge to international trade--i.e., a 
heightened potential for disease spread--the WTO relies upon the OIE to 
set international standards for managing the human health and animal 
health risks associated with trading livestock within a more 
liberalized, global trade environment. \18\ As an inducement for the 
United States and other countries, which historically were averse to 
assuming the heightened risks associated with imported livestock, 
particularly livestock produced in developing countries where 
veterinary infrastructure was lacking, the OIE offered animal 
identification as a global strategy to mitigate such risks and to 
facilitate trade. In effect, the OIE sought to convince the United 
States and other developed countries to abandon their longstanding 
disease prevention strategies in favor of less effective disease 
management strategies necessitated by the OIE's trade liberalization 
goal. To accomplish this goal, the OIE encourages each of its 172 
member-countries to ``establish a legal framework for the 
implementation and enforcement of animal identification and animal 
traceability in the country.'' \19\ Led by USDA, the United States, 
without conducting its own scientific analysis regarding the need for 
such a program, was among the first countries to oblige.
---------------------------------------------------------------------------
    \17\ See Understanding the WTO, World Trade Organization, Geneva, 
Switzerland, February 2007, at 1, 11, available at http://www.wto.org/
english/thewto_e/whatis_e/tif_e/utw_chap1_e.pdf.
    \18\ See OIE Objectives, World Organization for Animal Health 
(OIE), Paris, France, available at http://www.oie.int/eng/OIE/
en_objectifs.htm#3.
    \19\ Chapter 4.1, General Principals on Identification and 
Traceability of Live Animals, Terrestrial Animal Health Code, OIE, 
Article 4.1.1 (7), available at http://www.oie.int/eng/normes/mcode/
en_chapitre_1.4.1.htm#rubrique_tracabilite_d_animaux_vivants.
---------------------------------------------------------------------------
    From the outset, USDA has aggressively lobbied Congress and the 
U.S. cattle industry to conform to the OIE's animal identification 
edict, and it continues to do so today. As recently as March 2008, 
former USDA Under Secretary for Marketing and Regulatory Programs Bruce 
Knight argued, in his speech on NAIS delivered at the Houston Livestock 
Show and Rodeo, that USDA needs to align U.S. rules with international 
guidelines. In support of NAIS, Knight stated:

    Other countries, which don't yet have their own traceability 
        systems fully in place and therefore can't, under WTO rules, 
        require it of other countries, will still prefer to purchase 
        from sources that can demonstrate traceability . . . But the 
        sooner producers in the U.S. and around the world get on board 
        with animal ID, the more options they will have to market their 
        livestock. In other words, traceability is the key to 
        international sales and market expansion. Animal ID will open 
        doors for producers everywhere. \20\
---------------------------------------------------------------------------
    \20\ Animal ID and International Trade, Bruce I. Knight, 
Undersecretary for Marketing and Regulatory Programs, Houston Livestock 
Show and Rodeo, Houston, TX, March 4, 2008.

    This evidence substantiates R-CALF USA's contention that the 
driving force behind NAIS is not a science-based determination that a 
48-hour traceback, or any other component of NAIS, is needed to 
effectively prevent, control, and eradicate livestock diseases, but 
rather, it was the previous Administration's desire to lead the rest of 
the world toward full conformity with international trade standards 
regarding animal identification. \21\ Further substantiating this 
contention is the universal scope of USDA's proposed NAIS, which 
originally intended to include bison, beef cattle, dairy cattle, swine, 
sheep, goats, camelids (alpacas and llamas), horses, cervids (deer and 
elk), poultry (eight species including game birds), and aquaculture 
(eleven species), regardless of their intended use as seedstock, 
commercial, pets or other personal uses. \22\ Casting such a broad net 
that effectively encompasses nearly all animal species potentially 
subject to international trade, without regard to whether such animals 
would even be animals-of-interest in any particular epidemiological 
investigation, strongly suggests that USDA first established a goal to 
conform to international trade standards and then it subsequently 
worked backward in order to align its actions with a perceived source 
of authority. In other words, USDA decided to impose a national animal 
identification system on U.S. livestock producers and then it invented 
the need to achieve 48-hour disease traceback capabilities in order to 
justify and legitimize its pursuit.
---------------------------------------------------------------------------
    \21\ See id. Former Under Secretary Bruce Knight reiterated USDA's 
often repeated mantra that ``we need to lead by example, stressing the 
importance of OIE standards, to open markets as we encourage other 
countries to open theirs.''
    \22\ See United States Animal Identification Plan, National Animal 
Identification Development Team, Version 4.1, Dec. 23, 2003, at 1.
---------------------------------------------------------------------------
IV. APHIS Has Improperly Imposed Nais On U.S. Livestock Producers
    R-CALF USA believes that the goal of seeking conformity to 
international trade standards is a wholly inappropriate consideration 
for the exercise of APHIS' authority pursuant to the Animal Health 
Protection Act of 2002--the statute cited by USDA as its source of 
authority to implement NAIS. \23\ In addition, R-CALF USA believes 
APHIS has far overreached any statutory authority it may have to 
require any type of animal identification by effectively implementing 
the foundational components of NAIS, i.e., registering individuals' 
private property in a federal database and registering individuals' 
livestock under a federal registry, without first initiating a 
rulemaking to afford the public any meaningful opportunity for comment. 
Indeed, contrary to claims made by APHIS that NAIS would remain 
voluntary, \24\ thus assisting APHIS' effort to circumvent its 
rulemaking responsibilities, APHIS nevertheless mandated NAIS 
participation for producers participating in federal disease programs 
pursuant to an official memorandum issued by the agency on Sept. 22, 
2008. \25\ After objections raised by R-CALF USA and others, APHIS 
issued a new memorandum on Dec. 22, 2008, that canceled the memorandum 
issued on Sept. 22, 2008, though the practical effect on APHIS' mandate 
that producers participating in federal disease programs be registered 
under NAIS remained unchanged. \26\
---------------------------------------------------------------------------
    \23\ See Letter from U.S. Agriculture Secretary Tom Vilsack to Dr. 
R.M. Thornsberry, Feb. 23, 2009.
    \24\ See A Business Plan to Advance Animal Disease Traceability, 
USDA-APHIS, Version 1, September 2008, at 52 (APHIS reports that it 
published a document ``to clarify NAIS as a voluntary program at the 
Federal level.'').
    \25\ See Veterinary Services Memorandum No. 575.19, USDA-APHIS, 
Veterinary Services, Sept. 22, 2008 (the memorandum states that the 
premises identification number (PIN) established under NAIS ``is to be 
the sole and standard location identifier for all VS [Veterinary 
Services] program activities'' and that premises ``will be registered 
in the NAIS.'').
    \26\ See Veterinary Services Memorandum No. 575.19, USDA-APHIS, 
Veterinary Services, Dec. 22, 2008 (``All locations involved in the 
administration of VS [Veterinary Services] animal disease program 
activities conducted by VS personnel will be identified with a 
standardized [NAIS] PIN.''
---------------------------------------------------------------------------
VI. NAIS Imposes A Far Stricter And More Burdensome Standard On U.S. 
        Livestock Producers Than USDA Imposes On Foreign Meatpacking 
        Plants And Livestock From Foreign Countries
    USDA, APHIS, and the USDA's Food and Safety Inspection Service 
(FSIS) have long argued that disease mitigation goals and food safety 
goals are best accomplished using a scientific, risk-based approach. 
Beginning in 1997, APHIS developed procedures to establish risk-based 
import requirements for livestock and livestock products imported into 
the United States, stating it would impose identical import restriction 
on regions with identical risk situations. \27\ In 2003, then Secretary 
of Agriculture Ann Veneman argued that there should be a more 
``practical, risk-based approach to trade'' with countries such as 
Canada. \28\ In 2005, APHIS publicly issued an official Response to R-
CALF Factsheet, wherein the agency took great pains to argue that R-
CALF USA was wrong in seeking stricter disease-related import controls 
because the agency's ``scientifically sound, risk-based import and 
export standards'' were the appropriate standards for disease control. 
\29\ The OIG explained in 2008 that FSIS was using a ``risk-based 
approach to select [foreign meatpacking] establishments'' for safety 
inspections of foreign meatpacking plants. \30\ The FSIS uses such 
inputs in selecting foreign establishments as ``types and volume of 
product exported to the United States, past performance of an 
establishment's food safety controls of public health significance, and 
delistments of, or recommendations to delist, foreign establishments.'' 
\31\
---------------------------------------------------------------------------
    \27\ See Process for Foreign Animal Disease Evaluations, 
Regionalization, Risk Analysis, and Rulemaking, USDA-APHIS, Veterinary 
Services, National Center for Import and Export, 1997; see also 62 Fed. 
Reg., at 56001.
    \28\ Transcript of Media Briefing with Agriculture Secretary Ann M. 
Veneman, Under Secretary for Farm and Foreign Agriculture Services, 
J.B. Penn, Under Secretary for Marketing and Regulatory Services Bill 
Hawks and Dr. Elsa Murano, Under Secretary for Food Safety regarding 
developments of the Canadian BSE Situation on Aug. 8, 2003, at 3.
    \29\ Response to R-CALF, APHIS Factsheet, USDA-APHIS, Feb. 2, 2005, 
at 2.
    \30\ Audit Report, Followup Review of Food and Safety Inspection 
Service's Controls over Imported Meat and Poultry Products, USDA Office 
of Inspector General, Northeast Region, Report No. 24601-08-Hy, August 
2008, at 6.
    \31\ Id., at fn. 21.
---------------------------------------------------------------------------
    USDA's NAIS, however, is the antithesis of a scientific, risk-based 
approach to disease mitigation as it treats each animal in the United 
States as if it were the subject of a disease investigation, 
registering each livestock owner's private property and tracking not 
only each animal's origin, but also its movements throughout its entire 
lifetime. Thus, while USDA, APHIS, and FSIS use a targeted, risk-based 
approach for determining which foreign animals are eligible for 
importation and which foreign meatpacking plants are subject to 
inspection, USDA does not intend to accord U.S. livestock producers or 
their livestock the same science-based consideration. Instead, USDA 
applies a double standard to U.S. livestock producers and their 
livestock by treating each and every one of them as a disease suspect. 
This inexplicable action by USDA is un-American.
VII. NAIS Is Void Of Practical Considerations For Controlling Animal 
        Disease Outbreaks In The United States
A. APHIS has Misrepresented the Expanded Scope of Its Newly Defined 
        Premises Registration Scheme
    Contrary to claims made by APHIS that a foundational component of 
NAIS--the registration of producers' private property with a ``premises 
identification''--has been part and parcel to the United States' 
successful brucellosis and bovine tuberculosis programs for decades, 
\32\ there was no requirement for any specific geographical-based 
premises identification under either the brucellosis or tuberculosis 
programs. \33\ In fact, the bovine TB program specifically authorized 
``a brand registered with an official brand registry'' in lieu of a 
premises of origin identification. \34\
---------------------------------------------------------------------------
    \32\ Veterinary Services Memorandum No. 575.19, USDA-APHIS, 
Veterinary Services, Dec. 22, 2008, at 2 (``VS [Veterinary Services] 
animal health programs have used premises identification for many 
years. For example, premises information was used in the early 1980s to 
support the eradication of brucellosis and tuberculosis in cattle.'').
    \33\ See 69 Federal Register, at 64646, col. 3 (``The new 
definition of premises identification number (PIN) differs from the 
definition it is replacing not only in recognizing the new numbering 
system but also in recognizing a premises based on a state or federal 
animal health authority's determination that it is a geographically, 
rather than epidemiologically, distinct animal production unit.'').
    \34\ See 9 CFR Sec.  77.2 (definition of premises of origin 
identification in APHIS regulations as of Jan. 1, 2004).
---------------------------------------------------------------------------
    Firsthand and anecdotal evidence reveals that brucellosis eartags 
contain a numeric sequence that denotes the state of origin, the local 
veterinarian that affixed the tags, and a numbering sequence for each 
individual animal. The location, or premises, under which the paper 
records are maintained are completed by the local veterinarian licensed 
under the state animal health official, and he/she may identify the 
location where the animals were vaccinated and tagged using the name of 
the nearest town, the nearest highway intersection, or the physical 
address of the livestock owner. Importantly, the brucellosis and bovine 
TB programs most certainly did not include the premises identification 
number that is planned for use under NAIS, and which became effective 
under APHIS' final rule on July 18, 2007. \35\ The premises 
identification number used prior to this recent rulemaking was defined 
as:
---------------------------------------------------------------------------
    \35\ See 72 Federal Register, 39301-39307.

    [A] State's two-letter postal abbreviation followed by a number 
        assigned by the state animal health official to a livestock 
        production unit that is, in the judgment of the state animal 
        health official or area veterinarian in charge, 
        epidemiologically distinct from other livestock production 
        units. \36\
---------------------------------------------------------------------------
    \36\ 69 Federal Register, at 64646, cols. 2, 3.

    Thus, the original premises identification number was predicated on 
the state of origin and assigned by the local veterinarian acting under 
the state animal health official, without any requirement to register a 
livestock producer's private property. This is radically different than 
the new premises identification number planned for use under NAIS. The 
new NAIS premises identification number usurps the sole judgment of the 
state animal health official by authorizing the federal government to 
make the assignment; it no longer expressly requires the state of 
origin identifier; and, it expressly requires the registration of real 
property. The newly developed premises identification number under the 
NAIS scheme is:
    A nationally unique number assigned by a state, Tribal, and/or 
        Federal animal health authority to a premises that is, in the 
        judgment of the state, tribal, and/or Federal animal health 
        authority, a geographically distinct location from other 
        premises. The premises identification number is associated with 
        an address, geospatial coordinates, and/or other location 
        descriptors which provide a verifiably unique location. \37\
---------------------------------------------------------------------------
    \37\ 72 Federal Register, at 39306, cols. 1, 3; 39307, col. 1.
---------------------------------------------------------------------------
    Thus, APHIS has radically changed its preexisting disease programs 
by commandeering what was previously exclusive state and local control 
over the information required to identify livestock and livestock 
production units. The effect of this radical change is that livestock 
producers are now subject to a federal registration of their real 
property and a federal registration of their personal property (i.e., 
livestock) under the NAIS.
B. NAIS Unnecessarily Ignores and Supplants Preexisting, Time-Proven 
        Animal Identification Systems
    For over a century, USDA has effectively used various means of 
animal identification to control and eradicate animal diseases. 
Importantly, USDA, state animal health officials and Tribal animal 
health officials employed a science-based methodology to identify 
animals-of-interest in a specific disease program and targeted those 
animals for identification and subsequent monitoring and surveillance. 
For slow spreading diseases with long incubation periods, such as 
brucellosis, government officials targeted those animals in states 
where brucellosis was likely to exist and that would also be expected 
to enter the U.S. breeding herd. In other words, those officials 
targeted those animals that would not be slaughtered before the 
targeted disease could incubate to infectious levels. The programs 
involved the vaccination of animals retained for breeding purposes, 
eartagging the animals with official metal eartags, tattooing the 
animals, and surveillance for the disease at certain marketing points 
and at slaughterhouses.
    Under the preexisting brucellosis program, if a positive 
brucellosis case were detected by surveillance, the animal's metal 
eartag and tattoo provided immediate traceback to the state of origin 
and to the local veterinarian that vaccinated the animal, and in some 
incidences the production unit, as determined by the state, where the 
animal was vaccinated. In the event of a lost eartag or unreadable 
tattoo on an animal found positive through surveillance, government 
officials could access information about specific animals through 
various other sources including:

    1. Hot-iron or freeze brands, tattoos, and/or ear notches 
        registered under any one of the 15 or more states that maintain 
        state brand programs, \38\ several of which recognize brands as 
        an official identification for disease control purposes. \39\
---------------------------------------------------------------------------
    \38\ See A Business Plan to Advance Animal Disease Traceability, 
USDA-APHIS, Version 1.0, September 2008, at 37 (APHIS states there are 
15 states with brand inspection programs with either full or partial 
state participation).
    \39\ See National Animal Identification System: USDA Needs to 
Resolve Several Key Implementation Issues to Achieve Rapid and 
Effective Disease Traceback, U.S. Government Accountability Office, 
GAO-07-592, July 2007, at 19.

    2. Animal identification systems consisting of eartags and tattoos 
        used by breed associations that maintain registries of such 
---------------------------------------------------------------------------
        animals.

    3. Animal identification systems and records used and maintained by 
        private individuals that may consist of eartags, tattoos, ear 
        notches, and dewlap notches.

    4. Backtags affixed and recorded at auction yards and other 
        locations.

    5. Health certificates used in interstate commerce that either 
        describe or identify the animal(s) transported.

    6. Sales receipts and other documents used in commerce.

    Local veterinarians and state and tribal animal health officials 
are the first lines of defense for any disease outbreak and they have 
used any one or more of these preexisting animal identification systems 
and devices to successfully conduct animal disease tracebacks in 
cooperation with APHIS.
C. APHIS Is Disingenuous in Its Attempt to Promote NAIS by Dismissing 
        the Effectiveness of Preexisting Systems
    APHIS highlights several case studies in its efforts to promote 
NAIS. However, the isolated cases it cites are the result of APHIS' 
dilatory actions to prevent the introduction of foreign animal diseases 
into the United States and its failure to contain diseases in wildlife. 
First, APHIS cites the detection of BSE in an imported Canadian cow on 
Dec. 23, 2003, which resulted in the widespread closure of U.S. beef 
export markets that have yet to be fully restored. \40\ Disturbingly, 
this imported cow was identified with an official Canadian eartag, and 
USDA refused to disclose this fact until after U.S. export markets were 
closed around the world. \41\ This is significant because history shows 
that world markets react very differently when a BSE case is detected 
only in imported cattle. This different reaction was evidenced when 
Canada detected its first case of BSE in 1993, in an animal imported 
from Europe. \42\ At that time, APHIS took steps to track, monitor, and 
test cattle that had also been imported into the U.S. from Europe 
during the '80s, as well as animals imported from Japan after Japan 
detected its first case of BSE. \43\ However, and despite, the fact 
that Europe had already instituted a feed ban that prohibited meat-and-
bone meal in ruminant feed in 1988 and subsequently upgraded its feed 
ban in 1990 to prevent the spread of BSE, \44\ and despite the fact 
APHIS knew that Canada likely had rendered dozens of cattle that it had 
imported from Europe, \45\ APHIS took no action: 1) to require Canada 
to immediately implement a feed ban as a precondition to importing live 
cattle into the U.S.; 2) to restrict, track, or monitor live cattle 
imports from Canada; and, 3) took no immediate action to encourage the 
U.S. Food and Drug Administration (FDA) to implement a feed ban in the 
U.S. that would mitigate the higher-risk imports from Canada. In fact, 
the U.S. did not implement a feed ban until late 1997. Thus, the 2003 
introduction of BSE into the United States was the result of APHIS' 
failure to restrict imports from Canada even after Canada was known to 
harbor a significant risk for BSE. APHIS' NAIS would not, and will not, 
prevent the introduction of diseases from countries that harbor 
significant health risks such as BSE, brucellosis, bovine TB, or FMD. 
The only means of preventing the introduction of such diseases is by 
restricting imports from countries known to harbor such diseases.
---------------------------------------------------------------------------
    \40\ See A Business Plan to Advance Animal Disease Traceability, 
USDA-APHIS, Version 1.0, September 2008, at 77.
    \41\ See BSE (Bovine Spongiform Encephalopathy, or Mad Cow 
Disease), Department of Health and Human Services, Centers for Disease 
Control and Prevention, Web site at http://www.cdc.gov/ncidod/dvrd/bse/ 
(``Trace-back based on an ear-tag identification number and subsequent 
genetic testing confirmed that the BSE-infected cow was imported into 
the United States from Canada in August 2001.'').
    \42\ See 72 Federal Register, at 53320, col. 1.
    \43\ See Animal Disease Risk Assessment, Prevention, and Control 
Act of 2001 (PL 107-9), Final Report, P.L. 107-9 Federal Inter-Agency 
Working Group, January 2003, at 49.
    \44\ See Evaluation of the Potential for Bovine Spongiform 
Encephalopathy in the United States, Joshua T. Cohen, et al., Harvard 
Center for Risk Analysis, Harvard School of Public Health, at 38.
    \45\ See U.S. Department of Agriculture's Summary of the 
Epidemiological Findings of North American Bovine Spongiform 
Encephalopathy Positive Cattle, USDA, April 2005, at 17 (``Of those 
[imported European cattle] that were not found alive [in Canada], it 
was determined that 68 had potentially gone into the rendering stream 
after being slaughtered (59) or dying on farm (nine).'').
---------------------------------------------------------------------------
    APHIS' second and third case studies involve the 2005 and 2006 
detections of BSE in a 12-year-old cow (born in 1993) in Texas and a 
10-year-old cow (born in 1995) in Alabama, respectively. \46\ NAIS 
would neither have prevented these cases, nor would it have provided 
any more meaningful traceback information than could have been obtained 
if the animals were subject to the brucellosis-type identification 
program. Scientists have determined that neither of these cases was of 
the ``typical BSE strain'' found in Canada and the United Kingdom. \47\ 
Instead, the U.S. cases are of the ``atypical BSE strain,'' which is 
not definitively known to be transmitted through feed and may represent 
sporadic disease. \48\ Both of these cases were born before 1997, the 
date the U.S. finally implemented a feed ban to arrest the potential 
spread of BSE. \49\ Even assuming that these cases were caused by the 
consumption of contaminated feed, and given the long incubation period 
for BSE, the best solutions to protect human health and livestock 
health is to prevent this non-indigenous disease from being introduced 
into the U.S. by prohibiting imports from countries known to have 
infected cattle, enforcing the U.S. feed ban to prevent any potential 
spread, increasing surveillance, and continuing the removal of high-
risk tissues from human food. After testing approximately three 
quarters of a million cattle from 2004 through 2006, and 40,000 cattle 
per year thereafter, the U.S. has found no evidence of any spread of 
BSE in the U.S. cattle herd following the 1997 feed ban. \50\
---------------------------------------------------------------------------
    \46\ See A Business Plan to Advance Animal Disease Traceability, 
USDA-APHIS, Version 1.0, September 2008, at 77.
    \47\ See BSE (Bovine Spongiform Encephalopathy, or Mad Cow 
Disease), Department of Health and Human Services, Centers for Disease 
Control and Prevention, Web site at http://www.cdc.gov/ncidod/dvrd/bse/

    \48\ See BSE (Bovine Spongiform Encephalopathy, or Mad Cow 
Disease), Department of Health and Human Services, Centers for Disease 
Control and Prevention, Web site at http://www.cdc.gov/ncidod/dvrd/bse/

    \49\ See Mad Cow Disease: Improvement in the Animal Feed Ban and 
Other Regulatory Areas Would Strengthen U.S. Prevention Efforts, U.S. 
Government Accountability Office (formally Government Accounting 
Office), GAO-02-183, January 2002, at 9.
    \50\ See Bovine Spongiform Encephalopathy (BSE) Enhanced 
Surveillance Program, U.S. Animal Health and Productivity Surveillance 
History, USDA-APHIS Veterinary Services, available at http://
nsu.aphis.usda.gov/inventory/activity.faces?INVENTORY_NUMBER=44; see 
also Bovine Spongiform Encephalopathy (BSE) Ongoing Surveillance 
Program, U.S. Animal Health and Productivity Surveillance History, 
USDA-APHIS Veterinary Services, available at 77, 79.
---------------------------------------------------------------------------
    APHIS also cites TB case studies during the years 2004-2007 in 
support of NAIS. \51\ However, and as discussed previously, APHIS knows 
that it is continually reintroducing bovine TB via imported Mexican 
cattle, which are believed to be spreading bovine TB during the months 
those cattle spend in the U.S. prior to slaughter, and yet, the agency 
has failed to take any meaningful steps to halt this unacceptable 
disease reintroduction. Moreover, APHIS' NAIS fails to address how NAIS 
would better control bovine TB when it is not only continually 
reintroduced in Mexican cattle, but also, tuberculosis is endemic in 
U.S. wildlife populations. APHIS, for example, reports that in the 
state of Michigan, ``[c]ontrolling bovine TB in the deer populations is 
of great importance in the program to eradicate bovine TB in the cattle 
population. The primary method of disease control involves testing and 
slaughtering of infected deer.'' \52\ APHIS is disingenuous in its 
attempts to promote NAIS as being able to control diseases such as 
bovine TB by achieving the capacity to identify cattle populations 
``identified to premises of origin within 48 hours,'' \53\ particularly 
when primary sources of the disease are foreign countries and wildlife.
---------------------------------------------------------------------------
    \51\ See A Business Plan to Advance Animal Disease Traceability, 
USDA-APHIS, Version 1.0, September 2008, at 77, 79.
    \52\ Michigan Bovine Tuberculosis Eradication Project, U.S. Animal 
Health and Productivity Surveillance History, USDA-APHIS Veterinary 
Services, available at http://nsu.aphis.usda.gov/inventory/
activity.faces?INVENTORY_NUMBER=337.
    \53\ A Business Plan to Advance Animal Disease Traceability, USDA-
APHIS, Version 1.0, September 2008, at 59.
---------------------------------------------------------------------------
    APHIS further cites the brucellosis case detected in Montana in 
2007, without even mentioning in its case study the fact that the 
likely source of the disease was wildlife in the Greater Yellowstone 
Area. Elsewhere, APHIS states that ``[t]he presence of brucellosis in 
the wild, free-ranging bison and elk herds in the Greater Yellowstone 
Area presents a continual challenge for Brucellosis program eradication 
efforts in the United States.'' \54\ The source of brucellosis detected 
in both Montana and Wyoming in 2008, according to APHIS, was infected 
free-ranging elk. \55\ APHIS' resources would be better spent focusing 
on the known sources of diseases to prevent their introduction into the 
U.S. cattle herd rather than to subject the entire U.S. livestock 
industry to the invasive scheme contemplated in the NAIS.
---------------------------------------------------------------------------
    \54\ Bovine Brucellosis Eradication Program, U.S. Animal Health and 
Productivity Surveillance History, USDA-APHIS Veterinary Services, 
available at http://nsu.aphis.usda.gov/inventory/
activity.faces?INVENTORY_NUMBER=117.
    \55\ See Status Report_Fiscal Year 2008, Cooperative State-Federal 
Brucellosis Eradication Program, Debbi A. Donch and Arnold A. 
Gertonson, USDA-APHIS Veterinary Services, available at http://
www.aphis.usda.gov/animal_health/animal_diseases/brucellosis/downloads/
yearly_rpt.pdf.
---------------------------------------------------------------------------
    As evidenced by APHIS' Status of Current Eradication Programs found 
at Appendix 1, the agency has been highly successful at eradicating 
cattle diseases using existing resources. Given the lack of any 
scientific analysis regarding the expected change the NAIS would have 
on APHIS' current rate of successful disease eradication, Congress 
should avoid the agency's efforts to supplant its time-proven programs 
with an unproven system that is likely to consume more resources in its 
administration (i.e., in its reporting, tracking, and monitoring animal 
movements and managing colossal databases) than the agency now spends 
in preventing, controlling and eradicating disease.
VIII. The Costs Of Compliance With Nais Will Accelerate The Exodus Of 
        U.S. Farmers And Ranchers
A. The Cattle Industry Suffers From a Long-Run Lack of Profitability 
        that Would Worsen if Producers are Subjected to Additional 
        Costs of Production
    For decades, Congress and USDA have ignored the effects on U.S. 
livestock producers of the tremendous buying power exercised by 
oligopolistic meatpackers. As a result, anticompetitive practices 
abound, and the once competitive marketplace is now heavily tilted in 
favor of corporate agribusiness. This has created a long-run lack of 
profitability for independent family farmers and ranchers who are 
marketing into a system that persistently produces prices too low to 
cover their cost of production. The results are alarming, as 
independent farmers and ranchers in each of the major livestock sectors 
are exiting their respective industries at phenomenal rates.
    For example: 90 percent of U.S. hog operations exited the industry 
since 1980, their numbers falling from 667,000 in 1980 to only 67,000 
in 2005; over 40 percent of U.S. sheep operations exited the industry 
during this period, their numbers falling from 120,000 to only 68,000 
in 2005. About 40 percent of cattle operations exited the industry 
during this period as well, falling from 1.6 million to 983,000 in 
2005.1A\56\ These data show that U.S. livestock industries are 
unhealthy and contracting rapidly. The NAIS will significantly 
accelerate the exodus of U.S. farmers and ranchers.
---------------------------------------------------------------------------
    \56\ See 72 Federal Register, at 44681, col. 2.
---------------------------------------------------------------------------
    According to USDA's Economic Research Service (ERS), the average 
return to U.S. cow/calf producers in 2007 was an operating loss of 
$46.25 per bred cow. \57\ When total production costs are included, 
such as hired labor and taxes and insurance, the actual loss per bred 
cow in 2007 was $608.08. \58\
---------------------------------------------------------------------------
    \57\ See Cow/Calf Production Costs and Returns Per Bred Cow, 1996-
2007, Data Sets: Cow-calf, USDA Economic Research Service, available at 
http://www.ers.usda.gov/data/CostsandReturns/testpick.htm.
    \58\ See id.
---------------------------------------------------------------------------
    Since 1996, the year the U.S. cattle industry began its 
unprecedented herd liquidation, the average return to U.S. cow/calf 
producers was an operating loss of $6.42 per bred cow per year.1A\59\ 
Again, when total production costs are included, such as hired labor 
and taxes and insurance, the actual loss per bred cow per year from 
1996 through 2007 was $493.87.1A\60\
---------------------------------------------------------------------------
    \59\ See id.
    \60\ See id.
---------------------------------------------------------------------------
    During this period, 1996-2007, when U.S. cattle producers 
experienced this average actual loss of $493.87 per bred cow per year, 
228,880 U.S. cattle operations exited the industry, their numbers 
falling from 1.2 million to 965,510, and the number of operations fell 
further in 2008 to 956,500. \61\ Thus, during the past dozen years, 
U.S. cattle operations have exited the industry at a rate of over 
19,000 operations per year, the equivalent of losing more cattle 
operations each year than are in the entire states of California, 
Colorado, or Idaho. \62\
---------------------------------------------------------------------------
    \61\ See Cattle, USDA National Agricultural Statistics Service, Mt 
An 2-1 (1-97), available at http://usda.mannlib.cornell.edu/usda/nass/
Catt//1990s/1997/Catt-01-31-1997.pdf; See also Farms, Land in Farms, 
and Livestock Operations: 2008 Summary, USDA National Agricultural 
Statistics Service, Sp Sy 4(09), February 2009, at 14, available at 
http://usda.mannlib.cornell.edu/usda/current/FarmLandIn/FarmLandIn-02-
12-2009.pdf. See Farms, Land in Farms, and Livestock Operations: 2008 
Summary, USDA National Agricultural Statistics Service, Sp Sy 4(09), 
February 2009, at 18, available at
    \62\ See Farms, Land in Farms, and Livestock Operations: 2008 
Summary, USDA National Agricultural Statistics Service, Sp Sy 4(09), 
February 2009, at 18, available at http://usda.mannlib.cornell.edu/
usda/current/FarmLandIn/FarmLandIn-02-12-2009.pdf.at 18 (In 2007, 
California had 16,000 operations, Colorado had 14,700 operations, and 
Idaho had 10,600 operations).
---------------------------------------------------------------------------
    Mr. Chairman and Members of the Subcommittee, this is not a natural 
attrition rate--this is a crisis, and until Congress takes action to 
correct the long-run lack of profitability in the U.S. cattle industry, 
we will continue hollowing out rural communities all across America.
    The NAIS would significantly worsen the crisis caused by a lack of 
profitability because it would add additional production costs to an 
industry already unable to recover its cost of production from the 
marketplace.
B. The Projected Costs of NAIS are Significant and Untenable for 
        An Industry Unable to Recover Its Costs of Production From the 
        Marketplace
    APHIS has not provided the public with a cost/benefit analysis for 
NAIS despite having aggressively promoted the program and having 
expended millions of taxpayer dollars to promote the program over the 
past several years. However, in 2003 USDA published estimates of the 
cost of verifying the origins of cattle during its early rulemaking for 
mandatory country-of-origin labeling. The estimates published by USDA 
included those submitted by Sparks Company Inc. and Cattle Buyers 
Weekly (Sparks/CBW), and E.E. Davis, both of which estimated the cost 
of animal identification for U.S. cattle producers. \63\ Sparks/CBW 
estimated that the cost to cattle producers for verifying the origins 
of cattle using animal identification would range from $8.63 to $10.63 
per head, and E.E. Davis estimated costs for cattle producers of up to 
$15.30 per head. \64\
---------------------------------------------------------------------------
    \63\ See 68 Federal Register, at 61962, cols. 2, 3.
    \64\ See id., at 61964, cols. 1, 2.
---------------------------------------------------------------------------
    More recently, Kansas State University (KSU) developed a 
spreadsheet ``to assist livestock producers and others in the industry 
with estimating the costs associated with an individual animal 
identification system,'' though it asserts that not all the costs 
included in its spreadsheet would be required under NAIS. \65\ Though 
it is unclear to R-CALF USA whether the costs included by KSU are 
understated or overstated, the spreadsheet estimates are very similar 
to the earlier estimates published by USDA. For example, KSU estimates 
the cost per head for a producer with 100 head of brood cows at $15.90 
per head. \66\ Importantly, the KSU spreadsheet reveals that larger 
cattle operations would pay significantly less per animal than would 
smaller operations, e.g., the estimated cost for a producer with 400 
brood cows is $6.14 per head. \67\ Thus, it would appear from the KSU 
data that the average-sized cattle operation in the United States, 
which consists of approximately 44 cows per herd, would be expected to 
incur costs that are considerably more per head than the $15.90 
estimate for a herd size of 100 head.
---------------------------------------------------------------------------
    \65\ See RFID Cost.xls--A Spreadsheet to Estimate the Economic Cost 
of a Radio Frequency Identification (RFID) System, Version 7.6.06, 
available at www.agmanager.info/livestock/budgets/production/beef/
RFID%20costs.xls.
    \66\ See id.
    \67\ Average herd size calculated by dividing the number of U.S. 
cows and heifers that have calved in 2008 (41,692,000) by the number of 
U.S. operations with cattle and calves in 2008 (956,500).
---------------------------------------------------------------------------
    This substantial inverse cost scaling, i.e., costs become 
substantially lower as operation size becomes larger, will 
significantly disadvantage small- to medium-sized cattle operations in 
the marketplace, thus encouraging the further corporatization of the 
U.S. cattle industry. And, as previously stated, adding additional 
costs on U.S. cattle producers who are already suffering from a long-
run lack of profitability will accelerate the ongoing exodus of family 
farmers and ranchers from the U.S. cattle industry.
C. Evidence Shows that the Scope of the NAIS is Beyond Contemplation, 
        and 
        Similar, Though Much Smaller, Programs Attempted Elsewhere are 
        Fraught with Problems
    In a 2006 news conference, former Agriculture Secretary Mike 
Johanns said in regard to the NAIS:

    First thing I would say is that to describe this as a massive 
        project is to under-describe how big this is and how 
        significant it is and how much is involved. I'll just take one 
        industry, the cattle industry. At any given time you have 90 to 
        100 million head of cattle in the United States. There has 
        never been a system put in place that would deal with that kind 
        of magnitude. And we are talking about a system that literally 
        says from the time of their birth on through the entire chain, 
        we will trace that animal until we can ascertain where the 
        animal finally was processed. So just a huge undertaking. \68\
---------------------------------------------------------------------------
    \68\ Transcript of Tele-News Conference with Agriculture Secretary 
Mike Johanns And Dr. John Clifford, USDA's Chief Veterinarian Regarding 
the National Animal Identification System Washington, D.C.--April 6, 
2006.

    More recently, in 2008, former USDA Under Secretary Bruce Knight 
---------------------------------------------------------------------------
said in regard to conducting a cost/benefit analysis for NAIS:

    I want to share a couple of other efforts that we're involved in 
        regarding animal ID. One is a benefit-cost analysis of NAIS 
        that researchers at Kansas State University are conducting for 
        us. To the best of our knowledge, no other country has studied 
        this. It is a massive undertaking, but necessary to advance the 
        U.S. ID system. We believe this study will provide empirical 
        evidence that animal ID is worth the effort we're putting into 
        it-and that producers put into it also. \69\
---------------------------------------------------------------------------
    \69\ Animal ID and International Trade, Bruce I. Knight, 
Undersecretary for Marketing and Regulatory Programs, Houston Livestock 
Show and Rodeo, Houston, TX, March 4, 2008.
---------------------------------------------------------------------------
    These statements demonstrate that the NAIS is a colossal program, 
certain to have impacts that reach far beyond what anyone has presently 
contemplated. R-CALF USA is convinced NAIS will be a colossal failure--
necessitating a whole new bureaucracy just for its administration and 
resulting in a new era of unwarranted government intrusion on the 
personal lives and private property of U.S. livestock producers.
    The former president of the Australia Beef Association and a fifth-
generation cattleman from Australia, John Carter, whose family, 
incidentally, registered the first-ever cattle brand in Australia in 
1853, produced a short but compelling video on how Australia's attempts 
to administer its National Livestock Identification System have been a 
disaster for Australian producers. I have provided a copy of Mr. 
Carter's video in DVD format for the Subcommittee, and you will find 
that he also references a report from the United Kingdom, which he says 
reveals significant problems with the animal identification program 
underway in Europe, as well.
IX. Solutions To The Legitimate Challenge Of Expanding Disease 
        Traceback Capabilities And Improving Information Sharing Among 
        And Between Federal, State, And Tribal Officials
A. NAIS is an Unreasonable and Unnecessary Response to the Legitimate 
        Need for Improving U.S. Disease Prevention, Control, and 
        Mitigation
    APHIS has raised perhaps only two legitimate disease traceback 
concerns regarding the nation's continued ability to effectively 
control and eradicate diseases during the agency's entire, multi-year 
campaign to promote NAIS:
    First, APHIS has acknowledged that as a direct result of the 
successful eradication of diseases under APHIS' preexisting disease 
programs, there are now fewer producers (and likely fewer livestock) 
participating in federal disease programs. \70\
---------------------------------------------------------------------------
    \70\ See Animal ID and International Trade, Bruce I. Knight, 
Undersecretary for Marketing and Regulatory Programs, Houston Livestock 
Show and Rodeo, Houston, TX, March 4, 2008, at 3 (``Further, these days 
fewer beef producers are participating in disease programs as 
eradication efforts have been successful.'').
---------------------------------------------------------------------------
    Second, APHIS acknowledges difficulties in sharing information 
between and among Federal and state animal health officials. \71\
---------------------------------------------------------------------------
    \71\ See Veterinary Services Memorandum No. 575.19, USDA-APHIS, 
Veterinary Services, Dec. 22, 2008 (``Differences in the information 
systems have historically existed among the Federal and State animal 
health information systems . . . [and] were not compatible or capable 
of begin integrated across systems.'').
---------------------------------------------------------------------------
    R-CALF USA views both these concerns as legitimate challenges to 
the United States' continued ability to successfully control cattle 
disease outbreaks and eradicate diseases. R-CALF USA believes that both 
of these challenges can be effectively addressed using statistical, 
science-based solutions that do not, as NAIS does, infringe upon the 
private property rights and rights and expectations of privacy of U.S. 
livestock producers, impose significant compliance costs on U.S. 
livestock producers, impose burdensome reporting requirements on U.S. 
producers, favor corporate agribusiness over U.S. family farmers and 
ranchers, result in the storage of U.S. producer information in a 
foreign country's database, \72\ require a whole new federal 
bureaucracy, or subject U.S. producer and livestock information to a 
heightened risk of mischievous access by livestock buyers or anti-
livestock groups.
---------------------------------------------------------------------------
    \72\ See Record Retention Authorization (RDA) No. 00292000, 
Wisconsin Department of Agriculture Trade and Consumer Protection 
(WDATCP), Division of Animal Health--Livestock Premises Registration, 
January 2008 (showing that Wisconsin's livestock premises database 
records are maintained in an electronic oracle database in Canada and 
current records are required by USDA to be retained for 5 years in 
accordance with the USAIP (U.S. Animal Identification Plan).
---------------------------------------------------------------------------
B. A More Practical Solution to Prevent, Control, and Mitigate Diseases 
        in the U.S.
    R-CALF USA urges Congress and USDA to immediately cease all efforts 
to implement the NAIS. Instead, R-CALF USA recommends that Congress and 
USDA focus on targeted solutions to the legitimate livestock disease-
related challenges faced by U.S. livestock producers, and take steps to 
meaningfully address legitimate food safety challenges, as evidenced by 
recent, and massive, recalls of meat produced in U.S. slaughtering 
plants.
    Specifically, R-CALF USA recommends the following alternative 
course:
    1. Prevent the importation of serious cattle diseases and pests 
        from foreign sources:
    a. Prohibit the importation of livestock from any country that 
            experiences outbreaks of serious zoonotic diseases, 
            including pests, until scientific evidence demonstrates the 
            diseases and/or pests have been eradicated or fully 
            controlled and there is no known risk of further spread. 
            This recommendation includes a request for an immediate ban 
            on live cattle imports from Canada, which harbor a 
            heightened risk for BSE.
    b. Require all imported livestock to be permanently and 
            conspicuously branded with a mark of origin so 
            identification can be made if a zoonotic disease or serious 
            pest outbreak occurs in the exporting country subsequent to 
            importation.
    c. Require all livestock imported into the United States to meet 
            health and safety standards identical to those established 
            for the United States, including adherence to U.S. 
            prohibitions against certain feed ingredients, pesticide 
            use on feedstuffs, and certain livestock pharmaceuticals.
    d. Require TB testing of all imported Mexican cattle and further 
            require that all Mexican cattle remain quarantined in 
            designated feedlots until slaughtered.
    e. Reverse USDA's efforts to carve out regions within disease-
            affected foreign countries in order to facilitate imports 
            from the affected country before the disease of concern is 
            fully controlled or eradicated.
    f. Increase testing of all imported meat and bone meal to prohibit 
            contaminated feed from entering the United States.
    2. Adopt the surveillance and identification components of the 
        preexisting brucellosis program, including the metal eartag and 
        tattoo that identifies the state-of-origin and the local 
        veterinarian that applied the identification devices, and 
        require breeding stock not otherwise identified through breed 
        registries to be identified at the first point of ownership 
        transfer.
    3. State and tribal animal health officials should be solely 
        responsible for maintaining a statewide database for all metal 
        tags applied within their respective jurisdictions and should 
        continue to use the mailing address and/or the production unit 
        identifier determined appropriate by the attending veterinarian 
        to achieve traceback to the herd of origin should a disease 
        event occur. Under no circumstances should the Federal 
        government maintain a national registry of U.S. livestock or 
        require the national registration of producers' real property.
    4. The Federal government should enter into agreements with state 
        and tribal animal health officials to pay for the state's and 
        tribal government's cost of identifying breeding stock, 
        maintaining the state and tribal databases, and bolstering 
        disease surveillance at livestock collection points such as 
        livestock auction yards and slaughtering plants, including 
        increased surveillance for BSE.
    5. The Federal government should coordinate with the states and 
        tribes to establish electronic interface standards and 
        establish improved communication protocols so it can more 
        effectively coordinate with the states and tribes in the event 
        of a disease outbreak.
    6. The Federal government should coordinate with the states and 
        tribes to establish improved protocols for the retention and 
        searchability of state and tribal health certificates, brand 
        inspection documents, and other documents used to facilitate 
        interstate movement of livestock.
    7. Establish specific disease programs and focus increased 
        resources toward the eradication of diseased wildlife in states 
        where wildlife populations are known to harbor communicable 
        diseases.
    To address the challenge of increased incidences of tainted meat 
products, Congress and USDA should implement a requirement that meat 
sold at retail and at food service establishments be traceable back to 
the slaughterhouse that produced the meat from live animals, not just 
back to the processor that may have further processed tainted meat. 
This simple improvement would enable investigators to determine and 
address the actual source of meat contamination--primarily the 
unsanitary conditions that allow enteric-origin pathogens to 
contaminate otherwise healthful meat.
X. Conclusion
    R-CALF USA greatly appreciates the Subcommittee's investigation of 
the NAIS and we trust that you will not allow USDA to carry through 
with this unacceptable proposal. R-CALF USA stands ready to assist 
Congress and USDA in the development and implementation of a more 
reasonable, workable, and effective program to continue protecting U.S. 
livestock and consumers from diseases that affect livestock.

            6Sincerely,

            [GRAPHIC] [TIFF OMITTED] 51102.008
            
R.M. ``Max'' Thornsberry, D.V.M.,
R-CALF USA President of the Board,
    Attachments: DVD of Cattle Identification in Australia
                               Appendix I
[GRAPHIC] [TIFF OMITTED] 51102.005

[GRAPHIC] [TIFF OMITTED] 51102.006


    The Chairman. Thank you very much.
    Mr. Butler?

    STATEMENT OF DONALD P. BUTLER, PRESIDENT, NATIONAL PORK 
                 PRODUCERS COUNCIL, CLINTON, NC

    Mr. Butler. Good morning, Chairman Scott, Ranking Member 
Neugebauer, and Members of the Committee. My name is John 
Butler. I am President of the National Pork Producers Council. 
NPPC is an association of 43 state pork producer organizations 
and serves as the voice in Washington for America's 67,000 pork 
producers.
    To maintain the viability of the U.S. pork industry and all 
of animal agriculture, we strongly support a mandatory animal 
identification system across all livestock, dairy, and poultry 
species, with each industry developing an effective and 
affordable ID system for their species.
    A mandatory animal ID system plays three vital roles for 
America's pork producers and consumers: One, it strengthens the 
security of the Nation's livestock industry, especially in the 
event of an international intentional introduction of a 
pathogen or toxin that could affect animal health. Two, it 
provides U.S. pork producers and Federal and state animal 
health officials with improved tools to manage swine herd 
health through disease surveillance, control, and eradication. 
Three, it enables U.S. pork producers to maintain and promote 
access to international markets, which are critical to the 
continued viability of our industry.
    The advantage of a mandatory ID system is that it places in 
a searchable database in each state all premises holding 
livestock. In the event of a foreign or domestic animal disease 
outbreak, animal health professionals can efficiently review 
the premises that have been exposed, rather than trying to 
physically locate them by driving around in the countryside.
    The goal of an ID system is trace-back of an animal to its 
farm of origin within 48 hours of the discovery of disease. 
This would allow a disease to be brought under control and 
eradicated more quickly, thereby saving taxpayer dollars and 
animals and keeping foreign markets open for our exports.
    The U.S. livestock industry, dairy, and poultry 
increasingly are vulnerable to foreign animal diseases because 
of increased international trade and travel. There is also a 
threat of deliberate introduction of foreign animal disease by 
terrorist organizations.
    A disease infecting just one U.S. pig could cause massive 
economic disorder in the U.S. pork industry and, for that 
matter, for the entire U.S. livestock industry. It is estimated 
in a 2005 study that an outbreak of foot-and-mouth disease 
could cost U.S. pork producers between $40 billion and $60 
billion.
    The U.S. pork industry has a functional mandatory swine ID 
system which has been in place since 1988. The system which 
helped eradicate pseudorabies from the commercial herd requires 
that all swine in interstate commerce be identified and the 
movement records be reported to Federal and state animal health 
officials.
    When the U.S. Department of Agriculture announced in 2004 
the creation of the NAIS system, the U.S. pork industry eagerly 
supported its implementation. The NAIS system establishes 
standards for each species of livestock, poultry, and fish to 
bring national uniformity to animal identification. The U.S. 
pork industry adapted its existing swine ID system to fit the 
requirements of the NAIS program.
    Premises registration is the foundation of swine 
identification standards. Group ID is the preferred method for 
identifying market swine. Animals not eligible for group 
designation must be identified with official ID methods or 
devices, such as tags bearing an animal ID number or premises 
ID number.
    The NAIS standards for swine require movement data to be 
captured and maintained as production records by individual 
owners and producers. The records must be readily available to 
USDA upon request, and records must be maintained for 3 years 
after the animal leaves the premises. The U.S. pork industry 
does not support reporting movement data to centralized 
databases unless the Federal Government is willing to help pay 
for such a system.
    For the past 4 years, NPPC and the National Pork Board has 
worked with USDA to register swine premises, and we are proud 
to say that we now have 80 percent of all the swine premises in 
the U.S. registered. Additionally, U.S. pork producer delegates 
at the 2007 annual meeting voted to ask packers to require 
premises registration as a condition of sale and for breed 
registries to require it as a condition of registration.
    The lack of coherent implementation strategy at USDA has 
allowed critics of the national program to distort many of the 
facts about its requirements, including the privacy of data 
collected. Such data is simply a contact or producer name, 
things that you would find in a telephone directory. This 
information already is publicly available and has been provided 
by producers to Government agencies through various permitting 
arrangements.
    While the U.S. pork industry has been successful in 
implementing a national ID system compliant with the national 
program, it must be recognized that some diseases, such as 
foot-and-mouth disease, affect multiple species.
    I am finishing up, sir.
    Given the contribution of animal agriculture to the U.S. 
economy, the pork industry believes it is imperative that the 
U.S. Government establish a mandatory system. And we ask that 
Congress and the Obama Administration provide the resources 
available to make that happen.
    Mr. Chairman, thank you for the opportunity to speak to 
you, and I will take questions at the appropriate time.
    [The prepared statement of Mr. Butler follows:]

   Prepared Statement of Donald P. Butler, President, National Pork 
                     Producers Council, Clinton, NC
Introduction
    The National Pork Producers Council (NPPC) is an association of 43 
state pork producer organizations and serves as the voice in 
Washington, D.C., of America's 67,000 pork producers.
    The U.S. pork industry represents a significant value-added 
activity in the agriculture economy and the overall U.S. economy. In 
2008, it marketed more than 110 million hogs, and those animals 
provided total gross receipts of $15 billion. Overall, an estimated $21 
billion of personal income from sales of more than $97 billion and 
$34.5 billion of gross national product are supported by the U.S. hog 
industry. Iowa State University economists Dan Otto and John Lawrence 
estimate that the U.S. pork industry is directly responsible for the 
creation of nearly 35,000 full-time equivalent jobs and helps generate 
an additional 515,000 indirect, mostly rural, jobs.
    The U.S. pork industry today provides about 20 billion pounds of 
safe, wholesome and nutritious meat protein to consumers worldwide.
    Like many other segments of the U.S. economy, the pork industry has 
suffered through some tough economic times over the past 18 months. 
Last year, U.S. pork producers lost an average of $22 on each hog 
marketed, and it has been estimated that the industry, as a whole, has 
lost 35 percent of its equity since September 2007.
    The industry's one bright spot has been exports, which have helped 
temper U.S. pork producers' losses. In 2008, the United States exported 
2.05 million metric tons, or 4.4 billion pounds, of pork valued at 
nearly $5 billion. Last year was the 17th consecutive year of record 
pork exports.
    It is critical to the continued viability of the U.S. pork 
industry--and to the livestock, dairy and poultry industries--that the 
United States establish a mandatory system that allows animal health 
officials to better identify, control and eradicate diseases that could 
infect the country's livestock herds and affect domestic and 
international markets.
Pork Producers Have Been Committed To Mandatory Animal ID For 20 Years
    The U.S. pork industry has had a functional, mandatory swine 
identification system in place since 1988. This system requires that 
all swine in interstate commerce be identified and that movement 
records be reported to Federal and state animal health officials (53 FR 
40378, October 14, 1988). This rule has been codified as 9 CFR 71.19. 
In 2000, the rule was amended to include group/lot identification for 
feeder pig movements across state lines within a production system. 
Today, for interstate commerce, the U.S. pork industry has:

      Individual identification for all replacement breeding 
swine.

      Individual identification for all breeding swine at 
commingling and/or slaughter.

      Identification of feeder pigs.

      Identification of market pigs back to their owner from 
federally inspected plants.

      Feeder pig movements across state lines within a 
production system based on written health plans and production records.

    The U. S. pork industry's commitment to mandatory identification 
was lead by the Pseudorabies Eradication Program, which created a 
system for identifying premises with infected animals and ultimately 
led to the successful eradication of the disease from the commercial 
swine herd.
    NPPC passed its first resolution on animal identification in 1995. 
In 1998, U.S. pork producers agreed to the concept of a national 
premises identification system. In 1999 and 2000, U.S. pork producers 
agreed that improved sow and boar identification were needed, and the 
NPPC Board of Directors approved the concept of a national premises 
identification system.
    When the United States Department of Agriculture (USDA) announced 
in 2004 the creation of the National Animal Identification System 
(NAIS), the U.S. pork industry eagerly supported its implementation. 
The NAIS established standards for each species of livestock, poultry 
and fish to bring national uniformity to animal identification. Seeing 
the value of uniformity for animal health purposes, the U.S. pork 
industry quickly began adapting its exiting swine identification system 
to fit the new requirements of the NAIS. The Pork Industry 
Identification Working Group completed the program standards for the 
NAIS for swine in April 2006. Once program standards were established, 
a Swine Identification Implementation Task Force, with representation 
from each segment of the pork industry, was set up to oversee 
implementation of the NAIS for swine. While USDA has not adopted these 
standards, U.S. pork producers are implementing them today. While the 
focus has been on premises registration and implementation of the 
program standards in the U.S., the pork industry has been proactive in 
communicating its efforts with Canada and Mexico to ensure 
comprehension and to start the process of harmonization of swine 
identification standards in North America.
    Premises identification--knowing where U.S. pigs are raised--is the 
foundation of the U.S. swine identification standards. Group 
identification is the preferred method of identification in market 
swine. Animals not eligible for group designation must be identified 
with official identification methods or devices (tags) bearing the 
official Animal Identification Number (AIN) or Premises Identification 
Number (PIN). If a tag is required, it will comply with AIN tag 
requirements.
    According to the program standards for the NAIS for swine, movement 
data will be captured and maintained as production records by the 
individual owners, production systems and markets. These records must 
be made readily available to USDA upon request and must conform to 
applicable regulations. Records must be maintained for 3 years after 
the pigs leave the premises.
    All interstate movements of swine and semen must be reported either 
on a certificate of veterinary inspection (health certificate) for 
individually identified animals or an interstate movement report for 
group identified animals. The premises identification numbers of the 
shipping and receiving premises must be recorded on the certificates of 
veterinary inspection and the interstate movement report.
    At the 2005 annual meeting of the U.S. pork industry, U.S. pork 
producers voted for a policy supporting a U.S. mandatory national ID 
system. U.S. pork producers also voted at the 2007 annual meeting to 
ask pork packers to require premises registration as a condition of 
sale and to ask breed registries to require it as a condition of 
registration. Through these combined actions and the success of the 
Swine Identification Implementation Task Force, today more than 80 
percent of U.S. swine premises have been registered.
    The U.S. pork industry and USDA have worked cooperatively to 
register swine premises. The National Pork Board entered into a 
cooperative agreement with USDA to assist with producer education on 
the benefits of animal identification. Educational materials were 
developed, and staff was contracted to work one-on-one with producers 
at state meetings, farm shows, fairs and with state identification 
coordinators to promote premises registration. The effort was so 
successful that the agreement was renewed for fiscal 2009. With funds 
provided through these agreements, the swine industry has been able to 
achieve the highest percentage of premises registered in the livestock, 
dairy and poultry industries.
Mandatory Animal ID Is Needed To Protect U.S. Livestock Herds
    The best way to protect the health of U.S. animal agriculture is 
through a mandatory animal identification system across all livestock, 
dairy and poultry species where each industry develops an effective and 
affordable ID system for their respective species. Having such a 
mandatory system in place would enhance U.S. animal health officials' 
ability to trace diseased or exposed animals to their farm of origin 
and identify other potentially exposed premises within 48 hours after 
the discovery of a disease. The U.S. pork industry strongly supports a 
mandatory animal identification system as a way to maintain the health 
of U.S. livestock, dairy and poultry.
    The real advantage of a mandatory animal ID system is that it 
places in a searchable database in each state all premises holding 
livestock. In the event of an animal disease outbreak, be it a foreign 
animal disease or a domestic animal disease, animal health 
professionals can efficiently review the premises that have been 
exposed to a disease rather than trying to physically--by driving--
locate them. This will allow an animal disease to be brought under 
control and eradicated more quickly, thereby saving taxpayer dollars 
and animals.
Animal ID Is The Cornerstone Of All Animal Health Programs
    As USDA has developed animal disease eradication programs over the 
years, premises registration and animal identification have been the 
cornerstone of the programs. By simply knowing where livestock are 
raised, U.S. animal health officials are better able to respond and 
eradicate diseases. When the U.S. pork industry was eradicating 
Pseudorabies from the domestic herds, for example, regulatory animal 
health officials maintained the names and addresses of pork producers. 
They did this so they could respond quickly when a positive 
Pseudorabies test came back from the laboratory.
    Breeding animals were identified with backtags at market for this 
same reason. Samples were taken from these animals and tested for 
Pseudorabies. If an animal tested positive, the regulatory animal 
health officials went back to the owner of the animal. The U.S. pork 
industry and USDA have worked together over the years to eradicate 
diseases, such as Pseudorabies and Classical Swine Fever, from the U.S. 
swine herd.
Animal ID Is Needed For Foreign Animal Disease Response
    The U.S. livestock, dairy and poultry industries are increasingly 
vulnerable to foreign animal disease because of potential spread 
through increased international travel and trade. Even more frightening 
is the threat of deliberate introduction of an animal disease by 
terrorists.
    Less than 75 miles from the U.S. shores, for example, lurks a 
disease that could cost the U.S. pork industry billions of dollars. 
Classical Swine Fever is widespread throughout the Caribbean islands 
and is only a boat ride away from the U.S. mainland. And there is any 
number of foreign animal diseases ready to infect just one U.S. pig and 
cause massive economic disorder in the U.S. pork industry and in the 
entire U.S. livestock industry. It was estimated in 2005 that a food 
and mouth disease (FMD) outbreak would cost the U.S. pork industry, 
alone, between $40 billion and $60 billion, an estimate that would be 
even higher today.
    Based on figures from 2008, when the U.S. pork industry exported 
nearly $5 billion of pork, producers would lose $48 per head if just 
export markets were closed because of an animal disease outbreak in the 
United States. (Further loses undoubtedly would be incurred because 
domestic consumers would not purchase pork, either.)
    The U.S. pork industry urges USDA to implement a mandatory animal 
ID system to address the growing dangers to the U.S. livestock 
industry.
Problems Implementing A Mandatory Animal ID System
    The U.S. pork industry applauds USDA for its efforts to set up a 
national animal ID system. But the agency has struggled since 2004 to 
implement a viable NAIS that serves the needs of all animal 
agriculture.
    The lack of a coherent implementation strategy by USDA has allowed 
critics of the NAIS to distort many of the facts about its 
requirements. Some opponents have used the ``red herring'' of the 
government's ability, or lack thereof, to maintain the privacy of data 
collected. But the data required to register a premises is simply a 
contact or producer name, a street address, telephone number and the 
types of livestock and/or poultry maintained on the premises. This 
information already is publicly available in telephone books and county 
records or already has been provided by producers to government 
agencies through various permitting processes. No information that 
isn't currently available from public sources, such as state-issued 
environmental permits, is being collected for premises registration.
    Critics of the NAIS have raised other concerns that give the 
impression that the animal agriculture industry has something to hide 
or has information that it is unwilling to have included in the NAIS. 
The U.S. pork industry believes in full disclosure and does not share 
that point of view.
    Another issue that provoked serious opposition to the NAIS was an 
``ill-defined'' USDA proposal to require all animal movements to be 
reported to a central database. The enormous workload and expense to 
build and maintain that caused many in the U.S. livestock, dairy and 
poultry industries to question the benefits of such a broad 
requirement. USDA scaled back the reporting to only birth and final 
disposition of animals. But serious damage was done to the initial 
support for NAIS.
    Further implementation of the NAIS now is hampered by a lack of 
funding. Continued shortfalls are devastating the program and causing 
it to limp along. Large sums of money previously have been appropriated 
for NAIS, with much of it spent on research and demonstration projects 
to evaluate the feasibility of portions of the system and to test new 
technologies. By not fully appropriating dollars to fund the NAIS, 
Congress has sent the message that it is not happy with the way USDA 
was using the money. But this sends the wrong message to our trading 
partners and the U.S livestock, dairy and poultry industries. Congress 
must fully support a mandatory national animal ID system with dollars 
needed to achieve the goal of a 48-hour trace-back in the event of an 
animal disease. Resurrecting the ID system at a later time would be 
nearly impossible. It is not hyperbole to suggest that progress on 
implementing the NAIS will come to a standstill due to the funding 
shortfall.
Summary
    While the U.S. pork industry has been successful in implementing a 
national swine ID system compliant with the NAIS, it must be recognized 
that some diseases, such as FMD, affect multiple species. Even if the 
U.S. pork industry registers 100 percent of the country's pork 
premises, it would remain vulnerable to the unregistered premises down 
the road that may have other susceptible animals that become exposed to 
an animal disease. That is why the U.S. pork industry strongly supports 
a mandatory national animal identification system. Until the animal 
identification is made mandatory and all premises are registered, it 
will never have the intended effects of providing surveillance and, 
indeed, improving the animal health infrastructure, aiding in the 
control and eradication of highly contagious foreign and domestic 
animal diseases and, ultimately, protecting the U.S. livestock 
industry, its producers, processors and hundreds of related businesses 
and more than a half million mostly rural jobs for Americans.
    Given the contribution animal agriculture makes to the U.S. 
economy, the U.S. pork industry believes that it is imperative that the 
United States adopt a mandatory national animal identification system 
for all relevant livestock species. It urges Congress and the Obama 
Administration to lend its support for a national mandatory animal 
identification system and to provide adequate funding for its 
implementation and maintenance.
    In summary, the U.S. pork industry supports an identification 
system that is species specific and accommodates the production 
practices of each species, that allows animals to be identified and 
moved by groups or lots and that requires individual identification 
only for animals moved outside a closed production system. It also 
believes the identification system should be required by federal 
regulation and include a central database created and operated with 
federal funding. The U.S. pork industry does not support reporting of 
every animal movement.

    The Chairman. Thank you, Dr. Butler.
    Dr. Jordan?

STATEMENT OF KAREN JORDAN, D.V.M., OWNER/OPERATOR, BRUSH CREEK 
 SWISS FARMS; CHAIRPERSON, ANIMAL HEALTH & WELFARE COMMITTEE, 
                         NATIONAL MILK 
              PRODUCERS FEDERATION, SILER CITY, NC

    Dr. Jordan. Thank you for inviting the National Milk 
Producers Federation to testify before you today.
    My name is Karen Jordan. My husband and I also own and 
operate Brush Creek Swiss Farms of Siler City, North Carolina, 
where we milk 75 registered Brown Swiss and have about 70 
replacement heifers. I am also a practicing dairy cattle 
veterinarian. I also serve as Chair of the National Milk 
Producers' Animal Health and Welfare Committee and also serve 
as Chair of the Cattle Committee of National Institute for 
Animal Agriculture.
    My testimony today focuses on the need for mandatory animal 
ID for the livestock industries. And I will also review the 
efforts the dairy industry has taken to move comprehensive 
animal ID to a reality.
    Animal ID is most important in maintaining animal health in 
every dairy herd. While identifying animals and premises cannot 
prevent disease any more than licensing an automobile can 
prevent accidents or theft, identification is essential to 
speeding a timely response and minimizing the spread of 
potentially devastating consequences. It would be difficult to 
track and control the spread of a contagious disease without 
realtime knowledge about where animals are located and where 
they have been.
    First, I want to provide you with a quick overview of the 
dairy industry to place in perspective our need for mandatory 
animal ID. In 2008, the 57,000 commercially licensed dairy 
farms produced nearly 190 billion pounds of milk from 9.3 
million dairy cows, generating nearly $38 billion in dairy-
related income. Additionally, our dairy producers alone have 
more than $110 billion invested in our land, machinery, our 
dairy cows, and our equipment. Mandatory animal ID is a 
collective insurance policy for the dairy industry to protect 
our markets and our assets.
    Our dairy industry has taken a strong proactive stance in 
advocating for mandatory animal ID. National Milk Producer 
Federation has a standing policy that supports three major 
areas: The first is the establishment of a mandatory national 
animal ID system at the earliest possible date for reporting 
livestock movements. The second is the adoption of ISO-
compliant RFID ear tags for cattle. The third is having one 
centrally managed national database which facilitates ready 
access to essential tracking data by all state and federal 
animal health authorities on a realtime basis while 
safeguarding producer confidentiality.
    In 2005, a coalition of six dairy organizations that serve 
our many thousands of dairy farmers--those organizations being 
the American Jersey Cattle Association, Holstein Association, 
National Association for Animal Breeders, National Dairy Herd 
Improvement, National Milk Producers, and the Dairy Calf and 
Heifer Growers Association--these six formed a group called 
IDairy because we collectively believe that our industry will 
be best served when all dairy operations and ultimately all 
dairy cows are identified in a national central database.
    IDairy believes that a national animal ID system can both 
protect farmers' privacy and also allow for immediate access of 
relevant information in the event of a food safety crisis that 
could endanger the entire dairy chain. IDairy has adopted RFID 
tag technology standards to allow tracking of animals at the 
speed of commerce.
    Additionally, IDairy has selected the National Fair 
Database as the preferred private database for dairy animals to 
keep the confidentiality of data, with Government access only 
occurring in the event of an animal disease outbreak where 
tracking information is required.
    In 2007, National Milk and USDA, on behalf of IDairy, 
entered into a cooperative agreement to promote premise 
registration within the dairy industry as part of the national 
animal ID system. By working collectively with USDA, the 
states, and industry, IDairy estimates that nearly 75 percent 
of our dairy producers have registered their premises. However, 
until an animal ID becomes mandatory, obtaining that last 25 
percent is going to be difficult.
    Animal ID is extremely important in reducing the effects of 
a foreign animal disease outbreak in the U.S. For example, in 
1999, a University of California at Davis study estimated that 
a foot-and-mouth disease outbreak limited to solely to just the 
dairy region of California would result in the destruction of 
20 to 100 percent of that region's dairy herds. The resulting 
losses in milk production, plus the containment and 
depopulation costs, are conservatively estimated between $325 
million to almost $2 billion, adjusted for 2007 prices.
    Finally, even a quickly contained foot-and-mouth disease 
outbreak could wipe out our export sales. And last year our 
exports were worth $4 billion.
    As you can see, our Nation's dairy farmers have been very 
proactive in support of animal ID because of the importance of 
animal ID as a collective insurance policy for the dairy 
industry. We respectfully request that mandatory animal ID 
become a priority for USDA.
    If this is to truly be a new era of responsibility, we need 
to be mindful that preparing for a quick and effective response 
to emergencies lies at the heart of a responsible animal health 
system.
    And I thank you today for providing me with the opportunity 
to testify on behalf of National Milk Producers.
    [The prepared statement of Dr. Jordan follows:]

      Prepared Statement of Karen Jordan, D.V.M., Owner/Operator,
     Brush Creek Swiss Farms; Chairperson, Animal Health & Welfare
     Committee, National Milk Producers Federation, Siler City, NC
    Thank you for inviting the National Milk Producers Federation 
(NMPF) to testify before you today. My name is Karen Jordan. My husband 
and I also own and operate Brush Creek Swiss Farms with 75 registered 
Brown Swiss cows and 70 replacement heifers. I am also a practicing 
veterinarian in Siler City, North Carolina where I own a large animal 
veterinary service. I currently serve as the chairperson for the NMPF 
Animal Health & Welfare Committee, and previously I served as vice 
chair from 1993 to 2006. For the past 5 years I have also served as the 
chair of the Cattle Health Committee for the National Institute for 
Animal Agriculture.
    My testimony today focuses on the need for mandatory animal 
identification for the livestock industries, and I will also review the 
efforts the dairy industry has taken to move comprehensive animal 
identification to a reality. Animal ID is paramount in maintaining 
animal health in every dairy herd. While identifying animals and 
premises cannot prevent disease, any more than licensing automobiles 
can prevent accidents or theft, identification is essential to speeding 
a timely response, and minimizing the spread of potentially devastating 
consequences. It will be difficult to track and control the spread of a 
contagious disease without real-time knowledge about where animals are 
located and where they have been.
    First, I want to provide you with a quick overview of the dairy 
industry to place in perspective our need for mandatory animal ID. In 
2008, the 57,127 commercially licensed dairy farms produced nearly 190 
billion pounds of milk from 9.33 million dairy cows, generating nearly 
$38 billion in dairy-related income. Additionally, dairy producers 
alone have more than $110 billion dollars invested in their farms, 
including dairy cows, herd replacements, buildings, machinery, and 
land. Mandatory animal ID is a collective insurance policy for the 
dairy industry to protect our markets and our assets.
    The dairy industry has taken a strong proactive stance in 
advocating for mandatory animal ID. NMPF standing policy supports:

      ``the establishment of a mandatory national animal 
identification system (NAIS) at the earliest possible date for 
reporting livestock movements in the U.S.;

      adoption of International Organization for 
Standardization (ISO)-compliant radio frequency identification device 
ear tags for the cattle industry; and

      one centrally-managed national database, which 
facilitates ready access to essential tracking data by all state and 
federal animal health authorities on a real-time basis, while 
safeguarding producer confidentiality.''

    In 2005, a coalition of six dairy organizations that serve many 
thousands of dairy farmers--the American Jersey Cattle Association, 
Holstein Association USA, Inc., National Association for Animal 
Breeders, National Dairy Herd Improvement Association, National Milk 
Producers Federation and Dairy Calf and Heifer Association--formed a 
group called IDairy because we collectively believe that our industry 
will be best served when all dairy operations, and ultimately, all 
dairy cows, are identified in a national central database. IDairy 
believes that a national animal identification system can both protect 
farmers' privacy, and also allow for immediate access of relevant 
information in the event of a food safety crisis that could endanger 
the entire dairy chain.
    IDairy has worked vigorously to implement animal identification in 
the dairy industry. IDairy has adopted RFID tag technology standards to 
allow tracking of animals at the speed of commerce. Additionally, 
IDairy has selected the National FAIR database as the preferred private 
database for dairy animals to keep the confidentiality of data with 
government access only occurring in the event of an animal disease 
outbreak where tracking information is required. National FAIR has been 
administered by Holstein Association USA, Inc. for a decade and is used 
by the State of Michigan for their animal tracking database.
    In 2007, NMPF (on behalf of IDairy) and USDA entered into a 
cooperative agreement to promote premises registration within the dairy 
industry as part of the National Animal Identification System. By 
working collectively with USDA, states, and industry, IDairy estimates 
that nearly 75 percent of dairy producers have registered their 
premises as part of the National Animal Identification System. Many 
states, including Michigan, Wisconsin, Idaho, New York, Pennsylvania, 
Indiana, Utah, Nevada, and South Carolina, have more than 90 percent of 
their dairy producers participating in premises registration. However, 
until animal ID becomes mandatory, obtaining the last 25 percent 
participation will be difficult.
    Animal identification is extremely important in reducing the 
effects of a foreign disease outbreak in the U.S. cattle population. 
For example, the cost to the dairy industry of an outbreak of Foot and 
Mouth Disease in the U.S., based on recent epidemiological studies, 
would likely be quite serious. A 1999 University of California at Davis 
study estimated that a foot-and-mouth disease outbreak limited solely 
to California's South Valley would result in the destruction of 20% to 
100% of the region's dairy herds. Resulting losses of milk production 
plus the containment and depopulation costs are conservatively 
estimated at $325 million to $1.75 billion, adjusted for 2007 prices.
    A 2007 study published in the Journal of the American Veterinary 
Medical Association demonstrated that an outbreak spread through a sale 
barn or state fair could be multiplied by 10- or 20-fold, as would the 
dairy industry's cost, to as much as $30 billion or more. Finally, even 
a quickly contained foot-and-mouth disease outbreak could close 
overseas markets to U.S. dairy export sales. These were worth nearly $4 
billion in 2008, and the loss of these sales would have an additional, 
disastrous impact on U.S. milk prices.
    As you can see U.S. dairy farmers have been very proactive in 
support of mandatory animal ID. Because of the importance of animal ID 
as a collective insurance policy for the dairy industry, we 
respectfully request that mandatory animal ID become a priority for 
USDA. If this is to truly be a New Era of Responsibility, we need to be 
mindful that preparing for a quick and effective response to 
emergencies lies at the heart of responsible animal health system.
    Thank you for providing me with the opportunity to testify on 
behalf of the National Milk Producers Federation.

    The Chairman. Thank you, Dr. Jordan.
    Dr. DeHaven?

        STATEMENT OF RON DeHAVEN, D.V.M., M.B.A., CHIEF 
        EXECUTIVE OFFICER, AMERICAN VETERINARY MEDICAL 
                  ASSOCIATION, SCHAUMBURG, IL

    Dr. DeHaven. Thank you, Mr. Chairman and Members of the 
Subcommittee. I am Dr. Ron DeHaven, Chief Executive Officer of 
the American Veterinary Medical Association. I truly appreciate 
the opportunity to testify before you today on the National 
Animal Identification System and the important role it plays to 
protect our Nation's food supply and food animal populations.
    From farm to fork, veterinarians protect the health and 
welfare of our Nation's animals. We are on the front lines when 
it comes to surveillance and response to foreign animal 
diseases that could severely impact public health, animal 
health, our food supply, and our trade.
    The AVMA believes that a system to identify animal 
locations and track their movement is essential to quickly 
minimizing the impact of a potentially catastrophic animal 
disease. The U.S. simply cannot afford to wait for an animal 
health crisis to make this system mandatory and animal 
identification a reality.
    The National Animal Identification System could 
dramatically reduce the time required to control animal disease 
outbreaks. A potential response time of 48 hours would be a 
vast improvement over the current outdated system, which often 
relies on an outdated paper trail system. For example, it took 
an average of 199 days to trace TB-infected animals back to 
their farm of origin during the time period of October of 2005 
to August of 2007.
    For a highly contagious disease, such as foot-and-mouth 
disease, a rapid response, possible with the NAIS, could save 
millions of animal lives and billions of dollars. For a cow 
with BSE, or mad cow disease, the NAIS would allow authorities 
to rapidly identify and locate her offspring and other cows 
that would have been exposed to the same feed and then 
potentially keep them out of our food system.
    Animal identification systems are becoming prerequisites to 
international trade, and numerous studies describe how the U.S. 
lags behind other major livestock-producing countries in our 
animal tracing capability. The BSE events in the U.S. since 
2003 have demonstrated the importance of animal traceability to 
maintain and re-establish export markets.
    But beyond financial repercussions, disease outbreaks have 
the potential to decimate livestock populations and cause 
untold animal suffering. The NAIS would allow animal health 
officials to respond far more quickly and effectively to 
locate, quarantine, and eliminate the disease and thereby 
dramatically reduce the animals that might suffer as a result 
of an outbreak.
    Some producers have expressed concerns about invasion of 
their privacy and personal property rights from a national 
animal ID system. But in reality, premises registration 
information can be found in a phonebook and many other publicly 
available information sources.
    The unique animal identification requirements of NAIS are 
very similar to other forms of identification that are 
currently being used by almost all livestock producers for herd 
records, as well as for disease programs, such as tuberculosis 
and TB. And while the cost to implement a national electronic 
animal ID system will be high, let's not forget that this cost 
pales in comparison to the cost of a major disease outbreak.
    The AVMA has worked closely with APHIS to help implement 
and publicize NAIS to our AVMA members. We have urged all 
large-animal veterinarians to register their hospitals and 
their own premises, as well as to encourage their clients to 
register their premises. But despite the combined efforts of 
many for the past several years, only about a third of the 
Nation's farms, ranches, and food animal facilities are 
registered. The AVMA believes that the NAIS would not live up 
to its expectations and potential benefit unless the majority 
of all food animal facilities are registered.
    We simply cannot afford to wait for the next disease 
outbreak to create and fully implement a National Animal 
Identification System. As a body that represents highly trained 
professionals who work on the front lines protecting public and 
animal health as well as our Nation's food supply, the AVMA 
strongly believes that participation in the NAIS should be 
mandatory. Only with full producer participation will we be 
able to quickly contain and eradicate diseases and, as a 
result, minimize the impact on public health, on animal 
suffering, interruption of our food supply, and the financial 
health of our livestock and related industries.
    Mr. Chairman, thank you, and thank you, Members of the 
Subcommittee, for giving the American Veterinary Medical 
Association the opportunity to speak in support of the National 
Animal Identification System. America's veterinarians look 
forward to continue to working with you for the full 
implementation of this important system.
    [The prepared statement of Dr. DeHaven follows:]

Prepared Statement of Dr. Ron DeHaven, D.M.V., M.B.A., Chief Executive 
    Officer, American Veterinary Medical Association, Schaumburg, Il
    Thank you, Mr. Chairman, and Members of the Subcommittee. I am Dr. 
Ron DeHaven, chief executive officer of the American Veterinary Medical 
Association (AVMA), which represents more than 78,000 veterinarians 
across the United States.
    I appreciate the opportunity to testify before you today on the 
National Animal Identification System (NAIS) and its important role in 
helping protect our nation's food supply and contain disease outbreaks 
in the food animal population. I would also like to acknowledge the 
United States Department of Agriculture's Animal and Plant Health 
Inspection Service (APHIS) for working so diligently to advance the 
NAIS, which the AVMA considers crucial to controlling potentially 
disastrous livestock disease outbreaks. The AVMA strongly believes that 
a mandatory system that allows us to identify animal locations and 
track their movements is key to quickly minimizing the impact of a 
potentially catastrophic animal disease on America's public health, 
animal health and food supply.
    The AVMA strongly supports the implementation of the NAIS, and I 
would like to emphasize several important points:

      The AVMA believes the U.S. cannot afford to wait for a 
devastating animal disease outbreak to make the NAIS a reality--the 
NAIS needs to be a mandatory program to ensure timely implementation.

      The information needed for identifying livestock 
production premises to make the NAIS fully functional is not much more 
than what is already in publicly accessible sources, such as phone 
books, and individual animals' identification systems are used daily by 
livestock producers for other purposes. In short, the privacy concerns 
raised by the opponents of NAIS are unwarranted.

      Compared to the costs associated with a widespread 
outbreak of a potentially devastating disease that is not contained due 
to lack of an identification system, the cost of implementing the NAIS 
is minimal.

      An effective NAIS would help the U.S. livestock industry 
and state and federal government agencies track and more quickly 
contain/eradicate a disease outbreak, minimizing the number of animals 
affected and thereby reduce the amount of animal pain, suffering and 
destruction.

      International standards that directly affect animal trade 
are moving toward the direction of traceability ``from farm to fork''--
if the United States is to remain competitive or grow export markets, 
an effective NAIS will be required.

      An effective NAIS will significantly enhance the ability 
to rapidly track, control and eradicate endemic livestock diseases, 
thereby increasing overall productivity for livestock owners and 
associated industries.

    Livestock production in the United States is an asset that feeds 
not only our country, but a great deal of the world, every day. It is 
an asset that must be protected from accidental or malicious outbreaks 
of potentially catastrophic animal diseases. The NAIS is a critical 
tool to protect animal health.
Veterinarians' Roles in Protecting Public Health and America's 
        Food Supply
    The AVMA's membership reflects more than 84 percent of America's 
veterinarians. Among other things, our members protect the health and 
welfare of our nation's animals; protect animal and human health 
through prevention and control of zoonotic diseases; and help protect 
our nation's food supply--from farm to fork. Our members protect the 
health of the animals on farms through preventive care and by 
examining, diagnosing and treating them when they are ill. 
Veterinarians also provide farmers and producers with guidance on 
nutrition, disease prevention, management and other health-related 
issues. Veterinarians examine animals before slaughter and examine the 
carcasses during processing to ensure that diseased animals do not 
enter the food supply. We also inspect and certify that animals, and 
animal products, transported in interstate and international commerce 
are not infected or diseased.
    But it doesn't end there. Veterinarians are on the front lines when 
it comes to surveillance and response to foreign animal diseases, such 
as foot and mouth disease, highly pathogenic avian influenza, bovine 
spongiform encephalopathy and many more diseases that could, and have 
previously, severely impacted animal health, the nation's food supply 
and U.S. trade. Veterinarians are experts in zoonotic diseases--animal 
diseases that can be spread to people. Veterinary epidemiologists 
develop strategies for understanding optimal responses to diseases--how 
they develop, how they are spread, how they can be eradicated, and how 
they can be prevented.
    Our members are not only in private practice, research, academia 
and industry, they are also employed in key positions within state and 
federal governments. Food supply veterinarians working in government 
have a variety of roles, including ensuring that meat, eggs and dairy 
products are safe for consumption. They oversee the health of the 
animals that produce these items that are such an integral part of our 
nation's diet and economy. On both the state and federal levels, food 
animal veterinarians are in critical food safety and defense roles at 
agencies such as the U.S. Department of Agriculture's Animal and Plant 
Health Inspection Service (APHIS), Food Safety Inspection Service 
(FSIS) and Agricultural Research Service. They also fill vital 
positions at the U.S. Food and Drug Administration, the Department of 
Homeland Security and in the U.S. Army. Every state has veterinarians 
in its government to help support those efforts on the state level. The 
veterinary profession, therefore, plays an integral role in the 
infrastructure and daily operations of systems that ensure the high 
quality of U.S. livestock production and animal products that we all 
enjoy today. An effective NAIS will further enhance these efforts.
The Impact of an Effective National Animal Identification System
    As many are aware, the impact of an accidental livestock disease 
outbreak can be devastating to animal production, food production and 
trade. In addition, intentionally introduced foreign animal diseases 
are a national security issue. NAIS would dramatically reduce the time 
required to control a disease outbreak and minimize the economic and 
public health impact such an outbreak would create. A potential 
response time of 48 hours is a vast improvement over the current, 
outdated system of tracking outbreaks of animal disease to their 
sources. Investigators spent an average of 199 days tracing the sources 
of animals infected with bovine tuberculosis between October 2005 and 
August 2007. Some could not be traced back to the herd of origin. For a 
disease such as foot and mouth disease (FMD), which spreads very 
quickly, a rapid response time is critical to preventing a potential 
national outbreak that could cost millions of animals' lives and 
billions of dollars. Another example: if a cow is showing any signs 
that it may have ``mad cow disease'' (BSE, or bovine spongiform 
encephalopathy), NAIS would allow authorities to rapidly identify and 
locate the offspring of that cow and other cows that may have been 
exposed to the same feed that was eaten by the affected cow and prevent 
them from entering our food system. NAIS would enable the savings of 
significant time, minimize trade impact and, more importantly, 
significantly reduce the potential for the disease spreading to other 
parts of the country.
    Most of us are familiar with the impact of the FMD outbreak in the 
United Kingdom and Europe a few years ago. Because the disease is 
endemic in perhaps 60 percent of the world, the United States is 
fortunate to have last experienced an outbreak in 1929. If FMD does 
enter the United States, the impact of an effectively functioning NAIS 
that has efficient animal traceability and disease surveillance 
components would be dramatic. A conservative estimate of the total 
consumer and producer losses from an FMD outbreak in the United States 
\1\ with the animal traceability and surveillance of a mandatory NAIS 
is significantly less than without it: $50.3 billion with NAIS and 
$266.3 billion without it; depopulation of latent infected herds would 
drop from 60 percent without a NAIS to 30 percent with NAIS; the loss 
of market share to the beef industry alone would drop from $18.25 per 
head sold to $9.26.
---------------------------------------------------------------------------
    \1\ Zhao, Z., T.I. Wahl, and T.L. Marsh. (2006). ``Invasive Species 
Management: Foot-and-Mouth Disease in the U.S. Beef Industry.'' 
Agricultural and Resource Economics Review, 35: 98-115.)
---------------------------------------------------------------------------
    Because of delays caused by the inability to rapidly trace and 
perform surveillance, the small number of actual cases of bovine 
spongiform encephalopathy, or ``mad cow'' disease, that have occurred 
in the United States under the existing system had a real financial 
impact similar to what is projected by a potential FMD outbreak. Much 
of this came from loss of trade and decreased global competitiveness. 
Following the BSE events in the United States in December 2003, the 
vast majority of the beef export market was completely closed. Five 
years later, U.S. beef producers have regained only about 75 percent of 
the beef export market volume they had prior to the BSE event. A 2008 
\2\ study that reviewed animal identification systems in North America 
argues that animal identification systems are becoming ``prerequisites 
to international trade.''
---------------------------------------------------------------------------
    \2\ Murphy, R.G.L, D.L. Pendell, D.L. Morris, J.A. Scanga, K.E. 
Belk, and G.C. Smith. 2008. ``Review: Animal Identification Systems in 
North America.'' Professional Animal Scientist 24:277-286.
---------------------------------------------------------------------------
    Indeed, in many countries the demand for traceability has compelled 
government action. Case studies \3\ of poultry, beef, pork, lamb and 
fish firms located in France, Holland, Germany, Norway and Scotland 
that employ traceability indicate that the company officials adopted 
traceability because they believed that consumers wanted to know the 
origin of their food and the processing methods used in preparing it.
---------------------------------------------------------------------------
    \3\ Buhr, B.L. (2003). ``Traceability and Information Technology in 
the Meat Supply Chain: Implications for Firm Organization and Market 
Structure.'' Journal of Food Distribution Research 34(3):13-26.
---------------------------------------------------------------------------
    A number of studies describe how the United States lags behind a 
number of major livestock producing countries in animal traceability. 
According to these studies, the pork industries in the United Kingdom, 
Denmark, Japan, New Zealand, Australia and the European Union (EU) all 
lead the U.S. pork industry in animal traceability. In addition, 
Australia and the EU have advanced mandatory sheep traceability systems 
beyond the voluntary system present in the United States. Australia, 
the EU, Japan, Brazil, Argentina and Canada also lead the United States 
in beef traceability systems. It is important to note that Meat and 
Livestock Australia, a company that provides a variety of services to 
Australia's red meat industry, considers cattle identification in their 
country to be an insurance policy in the event of a trade disruption. 
Since 2004, the EU has been implementing a revised system known as 
TRACES (Trade Control and Expert System). This system is specifically 
designed to identify animals and animal products and track their 
movements from outside the EU and within and between all EU countries. 
It consolidates and simplifies existing systems and creates better 
tools for managing animal disease outbreaks. As David Byrne, the EU 
Commissioner for Health and Consumer Protection announced in 2004 \4\, 
``The new TRACES database will facilitate tracking the 50,000 animals 
transported in the EU each day. This is a major innovation and will 
help in case of an outbreak of an animal disease like foot and mouth 
disease. The new database will reduce red tape for both economic 
operators and competent authorities.''
---------------------------------------------------------------------------
    \4\ Europa Press Room (2004) TRACES: Commission adopts new system 
to manage animal movements and prevent the spread of animal disease. 
European Union Press Release, Reference IP/04/487, April 15, 2004.
---------------------------------------------------------------------------
    Beyond financial repercussions, disease outbreaks have the 
potential to quickly infect and decimate livestock populations. Because 
NAIS is a modern, streamlined information system, producers and animal 
health officials would be able to respond quickly and effectively to 
animal disease outbreaks. NAIS' components allow for tracing animal 
movements to locate, quarantine and eliminate suspicious and confirmed 
diseased animals in the event of an outbreak.
    To those unfamiliar with the history and epidemiological dynamics 
of livestock disease and the consequences of disease outbreaks, it may 
seem unnecessary to have an animal identification system that enables 
the government to effectively monitor the location of farm animals. 
Indeed, some producers have expressed concerns that the system will 
violate their privacy and personal property rights. But in reality, the 
information that will uniquely identify livestock premises is the same 
that is found in any phone book; the unique animal identification 
required by the NAIS is very similar to the brands, ear tags, tattoos 
and other forms of identification currently used by almost all 
livestock producers. A key difference is that premise and animal 
identification within NAIS will now be standardized throughout the 
country. A standardized system will ensure the United States can 
rapidly track, contain and eradicate animal diseases.
    Many of the premises and disease monitoring systems used in 
national disease eradication and control programs in the United States 
have been in place for decades and are no longer sufficient to meet the 
traceability expectations of veterinarians, farmers, livestock 
industries or U.S. trading partners. Examples of these livestock 
disease control and eradication programs, some of which have been 
operational for more than 50 years, deal with: brucellosis and 
tuberculosis in all livestock species; spongiform encephalopathies in 
sheep (scrapie), cattle (``mad cow'' disease) or farmed elk and deer 
(chronic wasting disease); pseudorabies in swine; Johne's disease in 
most ruminants; avian influenza in poultry; and even viral diseases in 
fish. These outdated premise and disease monitoring systems must be 
upgraded if we are to effectively deal with animal disease outbreaks.
    As a body that represents highly trained veterinarians who work in 
the front lines of protecting public and animal health and our nation's 
food supply, the AVMA strongly believes that participation in the NAIS 
should be mandatory for all livestock premises and food animals in our 
country. By making the NAIS mandatory, America will not only protect a 
critical resource from potentially devastating diseases, but an 
effective NAIS will act as a safeguard for guaranteeing the 
availability of our animal food supply. With full producer 
participation in the NAIS, we will be able to quickly contain and 
eradicate diseases that would otherwise have profound immediate and 
long-term impacts on both our food supply and the U.S. agricultural 
industry.
AVMA Policy on and Support for NAIS
    It is for these reasons--protection of public health, animal health 
and the food supply--that the AVMA approved an updated policy 
supporting NAIS in 2006.
    The AVMA policy states:
    ``The American Veterinary Medical Association (AVMA) supports an 
effective National Animal Identification System (NAIS) that contains 
the following key elements:

    1. USDA implementation of all species working group reports that 
        were submitted to the NAIS Subcommittee of the Secretary's 
        Advisory Committee on Foreign Animal and Poultry Diseases.

    2. USDA development of minimum standards for a NAIS.

    3. Rapid implementation of a mandatory NAIS.

    4. Implementation benchmarks and timelines established in federal 
        regulation to achieve the NAIS goals identified in the 
        strategic plan.

    5. Implementation that continues to engage all stakeholders in 
        providing input through the NAIS Subcommittee of the 
        Secretary's Advisory Committee on Foreign Animal and Poultry 
        Diseases and other designated forums.

    6. Database(s) that are accessible 24 hours a day and 7 days a week 
        by animal health officials.

    7. System cost does not detract from effective implementation.

    8. A system that is workable for producers of all sizes.

    9. Exception from freedom of information disclosure laws for data 
        collected in support of the NAIS.''

    Since approving this policy, the AVMA has worked closely with APHIS 
on the implementation of NAIS. Last year, APHIS began offering A 
Veterinarian's Toolkit, a free informational toolkit developed by 
veterinarians for veterinarians. The toolkit will be continually 
updated by APHIS and includes fact sheets, conversation-starter tips 
and live links to provide veterinarians with the information they need 
to effectively participate in and advocate for NAIS.
    The AVMA publicized the toolkit to our members to help 
veterinarians better understand the program and explain the livestock 
identification system. We urged all veterinarians to become involved in 
the NAIS program and to not only register their hospitals and their own 
premises, but also to encourage their clients to register their 
premises. As research time and again confirms, no one carries more 
credibility with animal owners than veterinarians.
    But despite our best efforts--as well as the efforts of the USDA 
and its industry partners--only about one-third of the nation's food 
animal production facilities are registered with NAIS. Currently, only 
505,000 (35 percent) of America's food animal production facilities 
were registered. Since it is impossible to predict which corner of our 
nation or sector of animal agriculture will be impacted by a disease 
outbreak, the AVMA believes that the system will not live up to its 
potential benefit unless all food animal production facilities are 
registered. It is for this reason that we believe voluntary NAIS 
registration is not effective and thus support mandatory participation 
in the system.
Conclusion
    The NAIS is an essential tool in any livestock disease outbreak to 
track down all animals impacted by the outbreak and put a stop to the 
spread of the disease. We cannot afford to wait until the next disease 
outbreak to institute and implement a national animal identification 
program. A fully functioning NAIS will help control any potential 
disease outbreak, limit the spread of disease to more animals and, as a 
result, limit the diseases' impact on public health, animal suffering, 
interruption of food supply, and the financial health of livestock and 
related industries.
    NAIS enables our nation's food supply to benefit from technological 
developments that will reduce what once took months to a matter of 
hours. The cost of participation and maintenance of this system pales 
in comparison to the cost of an outbreak and is essential for the 
benefit of animal health, food safety, food security and the nation's 
economy.
    Thank you, Mr. Chairman and Members of the Subcommittee, for giving 
the American Veterinary Medical Association the opportunity to speak in 
support of mandatory participation in the National Animal 
Identification System. America's veterinarians look forward to 
continuing to work with you on the implementation of this system and 
determining the most effective ways to protect and improve public and 
animal health.

    The Chairman. Thank you very much.
    And I want to just let each of you know how much we 
appreciate your consideration of the time constraints. We just 
want to get as many questions in and answers in as we can. I am 
going to start off very quickly with just one.
    Mr. Nutt and Mr. Thornsberry, you were very eloquent in 
your statements about what you do, your own voluntary system 
that you have in place, which you are to be commended for. But 
the issue is not what you are doing but what others in your 
industry aren't doing. You may be doing well with yours, but 
your neighbor isn't. Maybe your sales barn that you use isn't, 
that you are a part of.
    I want to ask you, how do you feel--I mean, this is a ``no 
man is an island'' situation. This industry is connected. As 
long as it is voluntary and you may do it but your neighbor 
down the road doesn't do it or where you intermingle your cows 
don't do it, it is going to eventually hurt you and make it 
difficult even for your own business to survive.
    And the other point is that you both have mentioned the 
economic costs, you have mentioned privacy courses, you have 
mentioned liability and legal costs, but I have not heard you 
mention one time the other costs, the human costs, the loss of 
lives, the other factors that are so very important that are 
pressing very hard on the minds of those of us up here who have 
to represent this issue.
    Could you comment on that aspect of it and the fact that, 
while you are doing well with it, others are not, and how that 
pertains to your business?
    Dr. Thornsberry. I will answer that from the standpoint of 
food safety. Being a veterinarian, I deal with food safety on a 
daily basis, but I also owned a food plant, a meat processing 
plant for 5 years. So I have been on the cutting edge of 
APHIS's food safety technology.
    And I, for the life of me, cannot come up with any idea or 
method or way that national ID is going to have anything to do 
with food safety. It would identify the animal and possibly 
allow a little quicker trace-back. But every animal that goes 
through the livestock auction I work at gets a back tag that 
identifies it to the owner with his name and address and phone 
number, where it came from before it goes to slaughter.
    So I cannot come up with any concept whereby this system 
would improve food safety. The food safety issues we have in 
the livestock industry occur at the slaughter plants. Until the 
Hassett plan is corrected, whereby you can trace the meat back 
to its point of slaughter, you are not going to have food 
safety where it needs to be in the United States.
    I was--a processing plant, they traced it back to me and 
closed me down, and yet E.coli 0157:H7 comes from a slaughter 
facility from meat that I would purchase, and yet they would 
not trace it back to that point.
    So there is a lot of hype about food safety as it relates 
to animal ID, but I have been involved in it for 8 or 10 years 
now, and I can't come up with any relevance to it, period.
    Mr. Nutt. I would agree with that general approach in 
there.
    There are two separate issues. Both are vital. We can't 
lose sight of the food safety issue. It is a major concern in 
the beef industry because our continued marketability has to be 
dependent on the consumer feeling the meat is safe. So we fully 
support that.
    But, again, it is difficult, from a producer point of view, 
to see the connection between an animal ID mandatory system and 
food safety, per se. The gentleman has very well laid out the 
perspective from a handling point of view, and I generally 
agree with him.
    The Chairman. Well, Mr. Nutt, one quick question, and then 
I want to get to Mr. Conaway before we have to go vote.
    You mention in your testimony that you can't trust the 
Department of Agriculture for the information required by NAIS 
on the information security question. That is a very, very 
telling statement.
    But let me ask you this: Would you support a mandatory ID 
system that utilized private industry to collect the data 
rather than the Department of Agriculture?
    Mr. Nutt. Yes, indeed. That is a viable option in there.
    I think the real issue, though, is, what is the data that 
is collected? Certainly, I have no problem and I doubt if few 
producers would ever question providing information on an 
animal unique ID and the premises where that animal has been 
and perhaps a little bit more.
    It is the uncertainty that we find. And when we look at the 
APHIS proposals, we see extensions that go far beyond the 
limits that we are talking about that make us very, very 
concerned about the other data that keeps being mentioned in 
there. If we knew more what it was, we could probably be a 
little bit more comfortable with it. But, absent that, the 
practice in the past has not led us to be particularly 
comfortable.
    The Chairman. All right. Thank you very much.
    Mr. Conaway?
    Mr. Conaway. Thank you, Mr. Chairman.
    Mr. Butler, you mentioned that your organizations have 
asked packers and breed registries to require premise 
registration. Now, what was the response of those guys, the 
packers and breed registries? What was their response to this 
request?
    Mr. Butler. Most of the major packers in our industry have 
been willing to do that, sir.
    Mr. Conaway. So they now require it in order to accept pigs 
from everyone? So you have 100 percent registration?
    Mr. Butler. No, sir. I said ``most.'' We don't have a 
hundred percent, but most of the major packers and processors 
have agreed to do that.
    Mr. Conaway. And the breed registries?
    Mr. Butler. I am told that the breed registries are close. 
I don't have a figure.
    Mr. Conaway. Six out of eight? I am not sure how many 
breeds there are.
    Mr. Butler. I don't have a number, sir.
    Mr. Conaway. Okay. Would you mind getting that information 
for us? It might be helpful.
    Mr. Butler. We can get it.
    Mr. Conaway. Dr. Jordan, you mentioned that 25 percent of 
your premises aren't registered, and yet dairymen receive 
direct assistance, Federal assistance on milk and those kinds 
of things. It would seem to me that there would be a 
requirement there that they register.
    What is it about the benefits that are touted by those who 
want this system that these 25 percent in your breed don't 
believe?
    Dr. Jordan. So you are asking what is the holdup to get 
that last 25?
    Mr. Conaway. Yes, why do they not believe the benefits? 
Because the advocates, you walk through your positions, and you 
go, ``Well, yeah, gee, why wouldn't I do that?'' So the folks 
who don't like it or who have chosen not to register, what is 
their pushback?
    Dr. Jordan. I think you get back to some of that producer 
confidentiality and just having that confidence in the whole 
system.
    Mr. Conaway. Okay. What I heard you say was your mandatory 
system would have a national database with all movement 
captured. Dr. DeHaven and others who want a mandatory system, 
does your mandatory system include that piece also?
    Dr. DeHaven. Congressman Conaway, certainly ultimately that 
would be the goal. You heard talk earlier about having the 
bookends and having a premises registered and having an ID that 
would be obtained at slaughter upon death of the animal.
    Mr. Conaway. Okay, but what I heard you say was that the 
current mandatory program that you are putting forward would 
simply be a premise registration. But you are broader than 
that. I don't want you bait and switching folks with this 
information, saying it is going to be like a phonebook with 
this information in it. But your ultimate goal is a broader, 
nationalized database where all of this information would 
reside, separate and apart from states and everybody else?
    Dr. DeHaven. We are supporting the entire system, to 
include the traceability aspect. If we are dealing with a 
highly contagious disease, such as foot-and-mouth disease, you 
need to know what animals were where at what point in time.
    Mr. Conaway. What starts the 48-hour clock? What triggers 
the 48-hour clock? Everybody is talking about this 48-hour 
position. What is the trigger on that? How do we know if we are 
actually complying on that?
    Dr. DeHaven. My assumption is that that would be upon the 
confirmed diagnosis of an exotic or foreign animal disease.
    Mr. Conaway. Okay. So some child in Philadelphia gets sick 
eating a hamburger; when does the 48-hour clock start running 
on tracing back to the animal that caused that?
    Dr. DeHaven. I would just clarify, Congressman, that the 
purpose is not for tracing residues or bacteria in processed 
meat products, but rather we are talking about diseases of 
livestock, of----
    Mr. Conaway. So it is not safety of folks eating stuff. It 
is just safety or trying to determine issues within herd?
    Dr. DeHaven. Food safety begins with the health of the 
animal. So this system is designed, initially at least, to be 
focused on live animals and tracing animals that may have a 
disease.
    Mr. Conaway. Okay. On that, you mentioned a particular 
event, that there was 199 days it took to do this trace-back. 
What happened in that 199 days and whatever that would have not 
happened had we had the 48-hour deal and it worked?
    Dr. DeHaven. My assumption, Congressman, is that APHIS 
employees would have contacted and had to contact a number of 
individuals who may have been involved in owning, transporting, 
or otherwise marketing those animals. You contact an 
individual, ask them if they can tell you where a particular 
animal came from, where they were at a certain point in time, 
and that individual tells you, ``I will get back to you in a 
few days after I can look at my records.''
    Mr. Conaway. All right. So what bad happened that would not 
have happened had the Federal Government had direct access to 
all of this data?
    Dr. DeHaven. It is difficult to determine. And I certainly 
don't have----
    Mr. Conaway. Well, but you come up here and you say there 
is trillions of dollars' worth of risks to the system for one 
sick pig contaminating an entire population. But----
    Dr. DeHaven. Let me clarify, Congressman. Are we talking 
about the TB situation, or are we talking about an outbreak of 
foot-and-mouth disease? Two totally different situations. In 
either case, with 199 days to find animals, there could be 
infection being spread even with tuberculosis. With foot-and-
mouth disease, 199 days, we have lost the battle; that outbreak 
is out of control at that point.
    Mr. Conaway. Okay. Well, you wouldn't let it go that long.
    Dr. DeHaven. The assumption in a foot-and-mouth disease 
outbreak is that, instead of, as Dr. Clifford testified, 
tracing 199 animals and taking 199 days, with a foot-and-mouth 
disease outbreak we would be tracing tens of thousands of 
animals and wouldn't have the luxury of 199 days to find out 
where they are now. We would need to know very quickly before 
that 199 animals quickly becomes 10,000 or 20,000.
    Mr. Conaway. All right.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    We do have votes. Here is what we are going to do: We are 
going to recess until 12:35. It will give us time to go--we 
have three votes. The first vote has been on about 5 minutes 
now. So 12:35 we will come back and we will begin the process 
again. Until then--12:45, 12:45 we will come back.
    [Recess.]
    The Chairman. Thank you for your patience. We are going to 
resume. Members will come as they can. And, again, we 
appreciate your understanding of our hectic schedule going 
forward.
    Let me ask Mr. Thornsberry. The Department of Agriculture 
said in a briefing last week that it takes up to 199 days to 
track animals with TB and herdmates, which is a huge problem in 
many states, not just on the southern border.
    How do you explain that the lack of an animal ID program 
will benefit the producer in that regard?
    Dr. Thornsberry. Personally, sir, I would have to see those 
figures.
    If the USDA can't track down a cow that has come in from 
Mexico with an indelible brand on it that has TB in 199 days, 
then we have a real problem. And I don't believe that to be the 
case. It may have taken 199 days for them to identify all of 
the cohorts and every place it had been and all the other 
cattle that it had been with.
    I have participated in the disease trace-back system 
personally. And I had a cow here 4 years ago that came from 
Colorado, and I had all the information I needed on her in two 
hours with two telephone calls. So I don't know where that 
figure comes from. I would like to examine that data to see if 
that is true.
    But I can't imagine that in our modern day of technology 
that we have that you couldn't identify a cow in the United 
States. Every state has a system of ID. You can't move a cow 
across a state line without having a health certificate with 
the identification number on it. You can't run an animal 
through any livestock auction without having a back tag on it 
and identification on it, back tag number.
    I would have to see those numbers. But if they took 199 
days to trace down one cow, then we have a real problem in this 
country, and animal ID is not going to help it.
    The Chairman. All right.
    Mr. Butler, why is it important for all livestock, as you 
have said, all livestock and poultry premises to be registered? 
Why not just have the swine premises registered and let the 
other groups worry about themselves?
    Mr. Butler. Well, Mr. Chairman, I would tell you simply 
that there are a number of diseases that affect swine and other 
species. If there is an outbreak within the swine herd in a 
community, it would be important for people to know where the 
other susceptible species are so that those producers could be 
notified. Conversely, if there were to be an outbreak in a 
species on a farm and there was no system for identifying where 
that animal is or notifying me, as a neighbor, that my herd is 
in peril, that is a problem.
    The Chairman. Okay.
    Dr. Jordan, let me ask you this from the dairy point of 
view. Understanding the fact that production systems are 
completely different for beef and dairy and the fact that dairy 
cattle are handled every day, what do we do about the fact that 
both beef and dairy are susceptible to the same diseases?
    Dr. Jordan. Well, that is the worst thing about disease, it 
doesn't respect what that cow does for a living. And that is 
part of the reason I don't see how we can have a system that 
only supports one side of the cattle industry. We are going to 
have to have an ID that is supportive to dairy and beef.
    Our diseases just don't make a distinction between our 
cattle. And we have to be able to rapidly trace whether it 
comes from--a disease that first started out in the beef 
industry, it is going to easily transfer over to the dairy 
industry and vice versa, just the way our cattle populations 
move.
    The Chairman. And why does the dairy industry favor RFID 
tags? And how does the dairy industry feel about the United 
States Department of Agriculture's neutral technology stance on 
840 tags?
    Dr. Jordan. Well, the RFID tag, to me, is an easy way. It 
is an easy tag, it is a small tag, inexpensive, really, in the 
scheme of things. I know Dr. Clifford told you, like, a price 
of about $3 or $3.50. Literally, the tag is about a $2 tag, 
$2.25. I think his figures were more that added manpower.
    We are going to tag our cattle in some way, just for our 
daily production purposes. The main thing, the RFID tag 
technology, it lets us collect data at the speed of commerce. 
And I think, any time you are going to have to track down 
cattle, that speed of commerce is what becomes critical in 
minimizing any kind of effects of a disease outbreak.
    The Chairman. Okay.
    Dr. DeHaven, let me ask you, 48 hours, we have a 
catastrophic event from, say, hoof-and-mouth disease. How real 
is a potentially catastrophic disease outbreak in this day and 
age? And do you believe we would be adequately prepared to 
handle and eradicate such an outbreak with the voluntary NAIS 
system in place?
    Dr. DeHaven. Mr. Chairman, we have been--and I say ``we'' 
in that I was formerly with the Animal and Plant Health 
Inspection Service, both in the position that Dr. Clifford is 
currently in as well as the administrator of that agency. So I 
can tell you that we have been working on trying to get this 
system in place for a number of years. And so I would share Dr. 
Clifford's disappointment that we only have about a third of 
the premises registered.
    I think that Dr. Jordan made a really good point, in terms 
of being able to trace animals at the speed of commerce, 
because that is how animals move. There has been a lot of 
computer modeling done where, if there were infection 
introduced into a livestock market today, within 24 hours 
animals from that livestock market could be in 15, 17 different 
states. And if we can't trace those animals to their current 
location at the speed of commerce, then we quickly have 
infection established in those 15, 17, or 20 different states. 
They then move from there, and it exponentially increases.
    So, again, the ability to contain and eradicate a disease 
effectively depends on how quickly you find it and how quickly 
you can contain it. And this animal ID system would be the link 
between that, once you find it, to quickly contain it.
    The Chairman. We are not prepared now. We are not prepared 
for an outbreak now.
    Dr. Jordan. If we were to have introduction of a highly 
infectious disease, such as foot-and-mouth disease, and we 
didn't find it literally immediately, in fact we would not be 
prepared to contain what potentially could be a widespread 
outbreak.
    The Chairman. Do we know--any of you may answer this--but 
do we know the size of the damage that could be done now?
    I mean, I was a part of this Homeland Security presentation 
last week with the Chairman, and I was worried before the 
presentation, but afterwards I was even more worried, that we 
aren't prepared in the food supply chain and particularly in 
this aspect. Because airborne means animal to human, is that 
not correct?
    Dr. DeHaven. Airborne means that it can go from farm to 
farm via transmission in the air. And a lot of diseases are 
thought to be spread that way.
    Some of the modeling that has been done would estimate that 
if we were to have a foot-and-mouth disease outbreak that is 
quickly contained, within 72 hours or less, the cost would be 
at least $5 billion. And then, if we were not able to contain 
it immediately, then the cost goes up exponentially, and I 
believe that Chairman Peterson used a figure in the hundreds of 
billions of dollars.
    Recognize that, as we would do if--or we do when a country 
is found to have foot-and-mouth disease and we cut off all 
exports or imports into the U.S. from that country, if we were 
to diagnose foot-and-mouth disease in this country, the same 
thing would happen in reverse. Virtually the rest of the world 
that is not affected by foot-and-mouth disease would cut off 
our exports until such time as we could assure them that we had 
contained and eradicated it. If that took weeks, months, or 
years, that is when the cost can take on that magnitude of $100 
billion, $200 billion.
    The Chairman. All right. Thank you very much.
    Mr. Smith?
    Mr. Smith. Thank you, Mr. Chairman.
    Mr. Butler, earlier I think you are the one who stated--you 
talked about an antiquated system currently in place, paper-
driven, old-fashioned. Is that correct?
    Mr. Butler. Congressman Smith, I don't believe I was the 
person who made that comment.
    Mr. Smith. Okay. Someone did. I apologize.
    Dr. DeHaven?
    Dr. DeHaven. Congressman Smith, I believe that I made the 
comment about a paper-driven system.
    Mr. Smith. Okay. Right. So are you saying then that a 
system is in place now but antiquated?
    Dr. DeHaven. We have had systems in place, particularly 
with tuberculosis and brucellosis eradication, when we had 
widespread disease outbreak and every state had extensive 
program for those diseases. Part of the disease program 
included metal ear tags and then paper records for those.
    As we have been successful in eradicating or almost 
eradicating those diseases, we don't have nearly the number of 
animals that are tested, and so we don't have nearly the number 
of animals identified even with those paper and metal tag-type 
systems.
    Mr. Smith. Okay. Thank you. I appreciate that.
    Dr. Jordan, I am not a dairy expert, but I know that cows 
are the primary focus of a dairy operation. Logistically can 
you explain the process and then the costs associated with cows 
versus bulls and the timing, and as much information as you can 
share.
    Dr. Jordan. Are you talking about just actually getting the 
job done of putting a tag in an animal?
    Mr. Smith. Right. What would be the cost difference for a 
cow as compared to a bull?
    Dr. Jordan. Well, I can answer you from how it would work 
on our farm.
    Our baby bull calves are, essentially for our operation, 
are the ones that are going to leave our farm. And for us, all 
we would have to do is just purchase that little $2 tag and put 
it in his ear. And whether someone chooses--like, a small herd 
may not choose to actually identify every one of those animals 
for daily work with an electronic $2 tag. But as soon as that 
cow is sold in commerce and enters marketing channels, the day 
she is loaded on that trailer, you can put that tag in. It is 
that simple.
    Versus some of our bigger dairies, they are already seeing 
the value of having that electronic tag, using that tag as 
their primary ID system to get their jobs done every day. In 
other words, rows of cattle, and they just take that wand and 
they pass it down, and then that wand beeps when it hits that 
ID tag that they have previously identified they want to do 
something to that animal today.
    Mr. Smith. So you would be comfortable, though, with the 
way it would be handled with the bull calves and otherwise?
    Dr. Jordan. Yes.
    Mr. Smith. Okay.
    I think that is all I have, Mr. Chairman.
    The Chairman. Thank you very much.
    I want to thank the panelists.
    I want to just say this, as we move toward our next 
panelists, that this has been very, very illuminating to us. 
This is, as I said at the outset, a very complex, complicated 
issue, but it is also an urgent issue.
    There are people out there that do not like us, and we are 
vulnerable in our food supply area. And we have to look at 
animal ID from the perspective of the human cost with the same 
degree of energy or even more energy as we look at the economic 
costs, as we look at the lack-of-privacy costs. Those are 
fixable things, we can fix those, but we can't fix a human life 
that is lost because we failed to act in time to protect our 
food chain.
    And I think therein lies the apex of our issue, and that is 
that we must do everything in our power to protect the food 
chain. The one thing that has come out clear in this is there 
is a huge economic cost. There is the front-end economic cost 
that Mr. Nutt and Mr. Thornsberry talked about. But there is 
also an economic cost to this industry if we fail to do 
something, especially when it is relatable to exports and to 
what the world reaction is to our own markets.
    Voluntary animal ID leaves perilous holes in the bottom of 
the bucket, and these holes have to be filled. The issue is, 
can we do it voluntarily or must it be done in a mandatory way? 
It seems to me that, with the questions that have been raised 
and the points that have been made, those concerns of economic, 
those concerns of the privacy issue and trust with the 
Department of Agriculture from the standpoint of our Mr. Nutt, 
whose points were very well-taken--but at the bottom of the 
day, the issue becomes what is the most secure way to protect 
our food chain and protect the American people and that seems 
to be mandatory.
    The discussion is still open. We are moving forward. You 
all have helped us tremendously, and we thank you for your time 
and participation with us today. Thank you.
    And now we will assemble the third panel.
    Thank you all very much. We are just pleased to have you.
    We have with us on the third panel Dr. Rob Williams, 
Counsellor of Agriculture with the Embassy of Australia.
    So, thanks. Good to have you.
    We also have, accompanying him, Mr. Dean Merrilees, 
Minister counsellor of agriculture, Embassy of Australia; and 
Mr. Kerry St. Cyr, Executive Director of the Canadian Cattle 
Identification Agency of Calgary, Alberta, Canada.
    Thank you for coming. Glad to have you.
    We will start with Dr. Williams.

   STATEMENT OF DR. ROB WILLIAMS, COUNSELLOR OF AGRICULTURE, 
  EMBASSY OF AUSTRALIA, WASHINGTON, D.C.; ACCOMPANIED BY DEAN 
   MERRILEES, MINISTER COUNSELLOR OF AGRICULTURE, EMBASSY OF 
                          AUSTRALIA, 
                        WASHINGTON, D.C.

    Dr. Williams. Thank you, Chairman.
    The Australian Government would like to thank the 
Subcommittee for the opportunity to share information on our 
experiences with implementing and improving Australia's 
National Livestock Identification System, or NLIS. I refer you 
to my written testimony for a more comprehensive account.
    As background, a number of factors have influenced the 
successful development of Australia's animal identification 
system, including heavy reliance on export markets, strong 
industry and government partnerships, and maintaining customer 
or consumer confidence.
    A mandatory cattle identification system based on visual 
tail tags was developed in Australia in 1967, which provided 
the ability to trace all cattle back to their last property of 
residence. The initial impetus for an improved national 
traceability system in Australia came from industry, on the 
basis that such a system could serve interests for disease 
management and commercial market requirements. In Australia's 
experience, this type of system best works on a mandatory 
basis.
    With NLIS, the Federal Government has an overall policy 
coordination role and supplies funding to underpin the national 
system. The state governments, including territories, have the 
legal jurisdiction over livestock and implement the legislation 
that underpins the program. The industry, through the producer-
owned Meat and Livestock Australia, or MLA, currently 
administer the database for NLIS.
    NLIS, which commenced in 1998, was implemented by 
Government and industry first agreeing to a national 
performance standard and business rules. The development of 
national performance standards was critical to a uniform 
rollout of NLIS. Standards included a requirement to be able to 
trace back within 48 hours an animal to its place of birth, the 
adoption of a 99 percent retention and read rate, and devices 
that could be read at a maximum distance of four feet. At the 
time, only one technology met those standards under Australia's 
variable and harsh field conditions, and that was the machine-
readable half duplex RFID, which was adopted as the technology 
for NLIS.
    The rules regarding access to the NLIS database are 
outlined through business rules in the terms of use for the 
NLIS database. Government has access to the database for 
relevant fields of information necessary to manage a suspected 
or actual disease outbreak or a chemical residue incident. The 
data collected through NLIS is protected from freedom of 
information requests by other interested parties, primarily 
because the information is held by a private company in MLA. 
Today, there have been no known FOI requests for this 
information.
    Currently, NLIS in cattle is a permanent whole-of-life 
system that allows individual animals to be identified 
electronically and tracked from property of birth to slaughter 
for food safety, product integrity, and market access purposes. 
NLIS is endorsed by Federal and state governments and by major 
producer, food lot, agent, sow yard, and processor industry 
bodies.
    NLIS became mandatory in July of 2005 for cattle. Tracing 
systems are now operational or under development for sheep and 
goats, pigs, and alpacas.
    The development and implementation of livestock 
traceability systems has significant costs, but the benefits of 
being able to accurately and quickly trace animals in the event 
of a disease or chemical residue issue outweigh these in the 
Australian context. Costs for NLIS are shared by both 
government and industry. It cost approximately $56 million to 
tag the national cattle herd, and the annual tagging costs 
thereafter are approximately $20 million. To put these costs 
into perspective, Australian beef exports are valued at 
approximately $17 million a week.
    NLIS database stores more than 194,000 properties and 
almost 17 million devices. Over 55,000 transactions or 
movements are recorded daily. And over 97 percent of the 
transactions are processed in the database within 30 minutes, 
making this realtime data. When integrated with post-slaughter 
tracking systems, the database facilitates rapid tracing of 
cattle and carcasses.
    Australia's experience has demonstrated that a system based 
on visual tags or brands, complemented by paper-based records, 
does not provide a robust basis for tracing livestock. 
Electronic systems have been demonstrated to be more reliable, 
less prone to human error, less resource-intensive, and easier 
to use.
    In conclusion, NLIS was developed to enable the rapid and 
accurate trace-back and trace-forward across Australia. This 
has benefits in terms of disease control and market access. 
NLIS is performing well and meeting the needs of all key 
stakeholders and has proven to be very useful for herd 
management.
    The Australian Government thanks the Subcommittee for this 
opportunity to share with you the results of our experience to 
date in implementing an animal identification system. And it is 
certainly an honor to be able to provide this information to 
the Subcommittee.
    [The prepared statement of Dr. Williams follows:]

   Prepared Statement of Dr. Rob Williams, Counsellor (Agriculture), 
                 Embassy of Australia, Washington, D.C.
Introduction
    The Australian Government would like to thank the Subcommittee for 
the opportunity to share information on our experiences with 
implementing and improving Australia's National Livestock 
Identification System (NLIS). It is an honour to be able to provide 
information to the Subcommittee on our system which may assist in your 
deliberations. The system represents a joint commitment and working 
partnership between the Australian Government at federal and ftate 
levels and Australian industry.
Background
    A number of important factors have influenced the successful 
development of Australia's national livestock identification system:

      Australia's reliance on export markets (two thirds of all 
agricultural products are exported, including 70 per cent of beef);

      The emergence of a realization within industry and shared 
by government that an animal identification (ID) system would be useful 
in sustaining customer satisfaction with the integrity of our product;

      A strong industry and government partnership, 
particularly evident in the cattle and beef sectors;

      A mandatory property identification system for cattle 
since 1967 that has been used to support and maintain Australia's 
favourable animal health status; and

      Agreement among all parties that the system be as simple, 
cost efficient and practical as possible.

    The system originated from the early 1960s when Australia undertook 
an ambitious US$600 million program to eradicate Bovine Tuberculosis 
and Brucellosis (official eradication program began in 1970, and 
Australia declared freedom from the diseases in 1997 and 1993 
respectively). In response to interest from trading partners, a 
mandatory cattle identification system based on using tail tags was 
developed in 1967 that provided the ability to trace all cattle back to 
their last property of residence. A premise ID numbering system was 
used to identify herds in relation to a parcel of land--these were 
referred to as Property Identification Codes (PIC) and provided the 
ability to trace all cattle back to their last property of residence.
    The initial impetus for a national traceability system in Australia 
came from industry rather than government on the basis that such a 
system could serve industry interests for disease management and 
commercial market requirements. In Australia's experience, this type of 
system best works on a mandatory basis, especially given its large 
reliance on exports. Like the United States of America (US), Australia 
has a federal system of government and this has required it to build a 
consensus on the division of responsibility and oversight of NLIS. The 
Federal government has an overall policy coordination role and supplies 
funding to underpin the national system. The state governments have the 
legal jurisdiction over the movement and health of livestock and 
develop and implement legislation that underpins the program through 
government/industry management Committees. This Committee in each state 
coordinates extension and producer education programs such as 
demonstration sites, an assistance hotline and industry seminars that 
assist producers with on-farm use of technology. The state governments 
have established a registry of PICs, are responsible for ordering of 
identification devices and have assisted with establishing the reading 
infrastructure and more recently auditing device performance and 
monitoring compliance with legislative requirements. The industry, in 
Meat and Livestock Australia (MLA), currently administer the database 
for NLIS.
    In the mid-1990s, after the successful eradication of brucellosis 
and tuberculosis, livestock industries, state and federal governments 
agreed that there was a need to convert the established visual-read-
only PIC system to an electronic whole-of-life individual cattle 
identification system on the grounds that it was only a matter of time 
before such a system would be needed to ensure biosecurity, food safety 
and market access. This system became known as NLIS. In 1998, once 
again in response to a trading partner, individual identification was 
made compulsory for producers supplying the European Union (EU) market 
to provide meat from Hormone Growth Promotant-free cattle. The NLIS has 
been vital in Australia maintaining access to the high value EU market 
and has contributed to maintaining a high level of consumer confidence 
for Australian beef in its other major markets such as Japan and Korea.
Implementation of NLIS
    NLIS was implemented by government and industry first agreeing to a 
set of National Performance Standards and Business Rules. The 
development of national performance standards was critical to a uniform 
and national roll out of the NLIS. Standards included a requirement to 
be able to trace back within 48 hours an animal to its place of birth, 
the adoption of a 99 per cent retention and read rate, and devices that 
can be read at a maximum distance of 1.2 metres. The technology 
selected had to meet these specific performance standards. At the time, 
only one technology met those standards under Australia's variable and 
in many cases, harsh field conditions--the machine-readable half duplex 
Radio Frequency Identification Devices (RFID), which was adopted as the 
technology for implementing the NLIS.
    Business rules were developed to operate at the farm, saleyard and 
slaughterhouse levels. For example, all animals must be tagged prior to 
leaving the property of birth, and all stock movements must be read at 
points of transfer including saleyards and slaughterhouses.
    The NLIS database is currently administered by MLA on behalf of 
SAFEMEAT . The rules regarding access to data are outlined through 
business rules in the ``Terms of Use for the National Livestock 
Identification System Database''. Federal and state governments have 
access to the database for relevant fields of information necessary to 
manage a suspected or actual disease outbreak or residue incident. 
These fields include date of sale or slaughter, PIC number, RFID 
number, and National Vendor Declaration (NVD) serial number. Private 
access to specific fields of information is only available to 
registered users such as producers, sale yard operators and 
slaughterhouse owners and includes data of a commercial nature such as 
carcase weights and fat scores.
    The data collected through the NLIS is protected from Freedom of 
Information (FOI) requests by other interested parties primarily 
because the information is held by a private company in MLA. The 
privacy and ``commercial-in-confidence'' provisions of the Australia 
FOI Act offer additional protection because the legislation provides 
exemptions for this type of data. To date, there have been no known FOI 
requests for this information.
Current Status
    NLIS is Australia's system for identification and traceability of 
livestock. It is a permanent whole-of-life system that allows 
individual animals to be identified electronically and tracked from 
property of birth to slaughter-for food safety, product integrity and 
market access purposes. NLIS is endorsed by Federal and state 
governments and by major producer, feedlot, agent, saleyard and 
processor industry bodies and is underpinned by legislation.
    NLIS became mandatory in July 2005 for cattle. Tracing systems are 
now operational or under development for sheep and goats, pigs and 
alpacas. The development and implementation of livestock traceability 
systems has significant costs, but the benefits of being able to 
accurately and quickly trace animals in the event of a disease or 
chemical residue issue outweigh these in the Australian context.
    NLIS operates in conjunction with other relevant legislation with 
regard to product liability. In Australia, a National Vendor 
Declaration (NVD) exists in all cattle, sheep and goat transactions. 
This declaration is a signed statement from the vendor declaring the 
animal and public health status of the livestock consignment over the 
previous 60 days.
    There are significant costs that are shared by both industry and 
government in adopting NLIS. It cost approximately US$56 million to tag 
the national cattle herd and the annual tagging costs thereafter are 
approximately US$20 million. To date, the Federal and state governments 
have committed approximately half the establishment costs in the last 
decade, and the industry the other half through both check-off funds 
and capital investment. To put these costs into perspective, Australian 
beef exports are valued at approximately US$70 million per week.
    The cost of the cattle tags is met by farmers, and averages between 
US$1.35--US$2.65 per tag. The cost of sheep tags is up to approximately 
US$1. In addition to the tags, farmer costs include the tag applicator, 
which ranges from US$15 to US$125. In addition, other optional costs 
may be incurred by a farmer to purchase equipment such as tag readers, 
software and IT equipment to utilise NLIS as a herd management tool.
NLIS (Cattle)
    NLIS (Cattle) uses machine-readable RFID devices (either an ear 
tag, or a rumen bolus/ear tag combination) to identify cattle. Each 
device contains a microchip encoded with a unique number linked to the 
PIC of the property of origin. All locations where cattle are kept 
(e.g. farms, saleyards, abattoirs etc) are required to have a PIC. When 
animals move along the supply chain, the RFID devices are scanned with 
an electronic reader and the movement details (e.g. the PIC an animal 
moves to) are recorded on the NLIS database, so that animals can be 
tracked. A life record of an animal's residency, and which animals it 
came into contact with, is established.
    The NLIS database stores more than 194,000 PICs and almost 70 
million devices. The database is accessed through the internet via a 
User ID and password. Cattle producers are able to directly access the 
database to report the movements of their cattle. When integrated with 
post-slaughter tracking systems, the database facilitates rapid tracing 
of cattle or carcases should there be a suspected or actual disease 
outbreak or chemical residue incident.
    The system is mandatory and is now fully in place across 
Australia--with over 55,000 transactions/movements recorded daily. Over 
97% of transactions are processed in the database within 30 minutes, 
making the data `real time' and of enormous value for tracing purposes.
    In addition to the location history of the animal, devices may have 
`statuses' recorded against them, for example, risk statuses from 
chemical residues, animal health statuses, market eligibility 
information as well as lost or stolen cattle, completeness of 
traceability history etc.
    NLIS in cattle is progressing well and has been demonstrated to be 
highly effective. During the national traceability exercise conducted 
in May 2007, CowCatcher II, 98.7% of animals were traced back to their 
property of birth within 24 hours and all in-contact animals were 
traced within 48 hours.
(Sheep and Goats)
    NLIS for sheep and goats is a mob -based, paper-based system for 
tracing sheep and farmed goats. It uses visually readable ear tags 
which have the PIC printed on them and is complemented by the use of a 
movement document. A database for sheep and goats has been developed.
    NLIS (Sheep & Goats) was introduced on 1 January 2006 with the 
requirement to apply a visual tag with a PIC to sheep and farmed goats, 
complemented by movement documentation, before leaving the property of 
birth. From 1 January 2009 under the national rules for NLIS (Sheep & 
Goats) all sheep and farmed goats must be tagged with an NLIS 
accredited device before leaving their property of birth.
    The national traceability exercise in August 2007, SheepCatcher I 
identified enhancements required with NLIS in sheep and goats to ensure 
prompt and accurate traceability of these animals for market access and 
disease control purposes. These enhancements have been, or will shortly 
be implemented.
NLIS (Pigs)
    NLIS in pigs is in the early stages of development. It is a mob-
based system based on tattoos and brands along a with movement 
document. At present only the animal identification part of the system 
is mandatory. Movements of animals through saleyards are required to be 
recorded.
NLIS (Alpaca)
    NLIS in alpaca is in the early stages of development. The alpaca 
industry is advocating the use of RFID tags that incorporate both radio 
frequency and visual readability in the one tag for animal 
identification. The peak industry body is of the view that it will be 
easier and less expensive to set up the RFID system now while the 
industry is in its infancy.
Future Steps
    NLIS is performing well and meeting the needs of key Australian 
stakeholders and international trading partners and customers. NLIS has 
proven to be very useful for herd management. The NLIS database enables 
`statuses' to be ascribed to individual animals (for example, risk 
statuses from chemical residues, animal health statuses, market 
eligibility information, lost or stolen cattle). This functionality is 
potentially a very powerful tool for disease preparedness and response 
capacity, or for market management.
    Some tools are being developed to enable interrogation and tracing 
through the NLIS database to be more efficient and effective. For 
example the Victorian Department of Primary Industries has developed a 
tracing tool called LiveTRACE TM. LiveTRACE integrates property data, 
animal ID data, property animal health data and transaction data in 
order to perform two major types of analysis: link analysis and 
timeline analysis. Links between various entities, such as a property 
and a saleyard, and their relationships over time can then be viewed.
    The current priority species for NLIS is sheep and goats. The 
following strategies are currently under development or are in the 
process of being implemented to enhance NLIS (Sheep and Goats):

      mandatory mob based movements recording for all saleyard 
transactions will be implemented nationally from 1 July 2009; and

      mandatory transaction tagging will be implemented from 1 
July 2009.

    State and Territory jurisdictions are also working towards national 
uniformity for the purposes of NLIS (Sheep and Goats), particularly in 
the areas of PICs, movement documentation and saleyard transaction 
data. For example:

      All States are to require the use of approved movement 
documentation for all stock movements between different PICs.

      For saleyard transactions, agents are required to provide 
the purchaser with the following information: date of sale, from PIC, 
other PICs on tags recorded on documentation, number of head on 
movement documentation, movement document serial number, to PIC, number 
of head transferred to each buyer PIC, saleyard NLIS ID. This 
information may be provided in paper or electronic form, including the 
use of the central database. Where stock are purchased by a processor, 
the information must be provided prior to slaughter. For other 
purchases, the information is to be provided within seven days.

      Documentation to be retained for 7 years by a producer, 
and for 2 years by other parties (processors and agents).Tags and 
documentation to be required for movement of a live animal to a 
knackery. If an animal dies on farm and is moved to a knackery, a 
record of the movement to be retained by the consignor.

    NLIS is under development for pigs and alpaca's.
Conclusions
    NLIS was developed to enable the rapid and accurate traceback and 
traceforward of livestock across Australia. This has benefits in terms 
of disease control and market access. Australia's experience has 
demonstrated that a system based on visual tags or brands complemented 
by paper-based records does not provide a robust basis for tracing 
livestock. Australia has found that interrogating such a system is slow 
and resource intensive and the data are unreliable due to human error 
in recording transactions. Electronic systems have been demonstrated to 
be more reliable, less resource intensive and easier to use.
    The NLIS has been implemented as a practical, government and 
industry partnership that has delivered business management benefits to 
the cattle and beef industry along the whole chain from `gate to 
plate'. Integrating NLIS with herd management systems assists producers 
in supporting their quality assurance and food safety claims.
    The Australian Government thanks the Subcommittee for this 
opportunity to share with you the results of our experience to date 
implementing a National Animal Identification System.
    Additional information is available at www.nlis.com.au and 
www.animalhealthaustralia.com.au
    For any queries, please contact the Australian Embassy:

      Dean Merrilees, Minister Counsellor (Agriculture) on 
[REDACTED]

      Dr Rob Williams, Agriculture (Veterinary) Counsellor on 
[REDACTED]

    The Chairman. Thank you very much.
    Mr. St. Cyr?

        STATEMENT OF KERRY ST. CYR, EXECUTIVE DIRECTOR,
         CANADIAN CATTLE IDENTIFICATION AGENCY (CCIA),
                    CALGARY, ALBERTA, CANADA

    Mr. St. Cyr. Good afternoon, Mr. Chairman, Members of the 
Subcommittee. Thank you on behalf of the board and staff of the 
Canadian Cattle Identification for the opportunity to testify 
today.
    The CCIA is a federally incorporated, not-for-profit 
organization that was initiated by the Canadian cattle industry 
to establish a national individual animal trace-back system for 
animal health and food safety in Canada. Through the leadership 
and foresight of producers and industry leaders and willing 
partners in the Federal Government, the CCIA was incorporated 
in 1998.
    Conceptually, the original cattle identification system was 
designed to increase domestic and international consumer 
confidence through the assurance of efficient animal trace-back 
to assure the containment and eradication of animal health 
issues and assist in the management of food safety concerns. It 
was also to maintain and increase market access by avoiding 
trade barriers imposed due to animal health issues and support 
industry by opening up new markets.
    And what it also does for us is it allows us to remain 
competitive not only with other species--and I am speaking from 
a cattle perspective--but other countries that were focusing on 
developing animal ID and trace-back programs.
    As a result of this proactive approach by our industry 
leaders in government, Canada was prepared to react effectively 
and efficiently to the emergence of BSE as an animal health 
issue in 2003.
    As I noted earlier, the agency is a federally incorporated, 
not-for-profit entity led BY a board of directors that is made 
up of representatives from several sectors of the livestock 
industry. Though not a voting member of the board, the Canadian 
Food Inspection Agency has been an exofficio representative on 
our board since its inception and has been an integral partner 
in the development and implementation of the program. Other 
government partners have been Agri-food and Agriculture Canada 
and some provincial governments.
    From a historical perspective, the CCIA completed its 
initial voluntary implementation in 2001 and for less than $4 
million. The mandatory enforcement by CFIA for animal ID was 
phased in starting on July 1st, 2002.
    The CCIA's repository houses the national ID and trace-back 
systems for a variety of industry and species groups, including 
dairy, beef, bison, sheep, and pork. The CLTS, or our 
repository, is the core of cattle marketing programs in Canada, 
as it is the source of information needed to provide 
international markets with credible data on the cattle they are 
importing. For the pork industry, the CCIA had previously 
developed the Western Slaughter Database for swine and is now 
working with this industry on a development and implementation 
of their own national traceability system.
    Due to the emergence of avian influenza, the CCIA has 
worked with provincial groups in the poultry sector for the 
creation of premises identifiers to be used in their emergency 
planning system. Recently there was an outbreak of avian 
influenza in British Columbia, and, with their robust emergency 
planning system, supported by premise ID, the scope of the 
problem was effectively managed and the resulting cull was only 
60,000 birds, not the tens of millions seen previously.
    I guess the basis for our success has been an effective 
partnership between Government and industry, where industry has 
played a leading role in setting the timeline and the path 
forward, and had willing participation from the Federal 
Government in the delivery of this.
    In the material that was forwarded to me in advance, one of 
the issues that was identified were what were the positives and 
the negatives. Well, we have heard a lot about technology being 
the key for speed of commerce. It can also be the Achilles heel 
if the system doesn't fit the industry that it needs to work 
in.
    Part of that is the use of the RFID tag. I agree completely 
with my compatriots from Australia that it is the key to making 
it work. The reality is that in Canada, much as in parts of the 
United States, there are severe climatic conditions that affect 
the retention of the tags. We are focusing on an ongoing 
program of improvement to deal with that.
    In conclusion, what I would like to emphasize is that we 
believe we have a successful system based on the strength of 
the collaboration between industry and government, where 
industry plays a leading role and that government is a willing 
partner with industry.
    Thank you for inviting me to speak here today.
    [The prepared statement of Mr. St. Cyr follows:]

Prepared Statement of Kerry St.Cyr, Executive Director, Canadian Cattle 
         Identification Agency (CCIA), Calgary, Alberta, Canada
    Mr. Chairman and Members of the Committee, thank you on behalf of 
the Board and staff of the Canadian Cattle Identification Agency (CCIA) 
for the opportunity to testify today.
    The CCIA is a federally incorporated, not for profit organization 
that was initiated by the Canadian cattle industry to establish a 
national individual animal traceback system for animal health and food 
safety in Canada.
    The origins of the CCIA can be found in the animal disease 
outbreaks of the 1980's and early 1990's; international events such as 
the outbreaks of Foot and Mouth Disease and BSE in other jurisdictions, 
and the management and eradication of Bovine Brucellosis and 
Tuberculosis domestically. Given our dependency on export markets, this 
emphasized the need to more effectively identify the cattle herd in 
Canada.
    Through the leadership and foresight of producers and industry 
leaders and willing partners in the federal government the CCIA was 
incorporated in 1998.Conceptually the original cattle identifications 
system was designed to:

      Increase domestic and international consumer confidence 
through the assurance of efficient animal trace back to ensure the 
containment and eradication of animal health issues and assist in the 
management of food safety concerns;

      Maintain and increase market access by avoiding trade 
barriers imposed due to animal health issues and support industry by 
opening up new markets; and

      Remain competitive with not only other species but other 
countries that were focusing on developing animal ID and traceback 
programs.

    As a result of this pro-active approach by our industry leaders and 
government, Canada was prepared to react effectively and efficiently to 
the emergence of BSE as an animal health issue in 2003.
    As noted earlier, the Agency is a federally incorporated not-for-
profit entity led by a Board of Directors made up of representatives 
from several sectors of the livestock industry. Though not a voting 
member of the Board, the Canadian Food Inspection Agency (CFIA) has 
been an ex-officio representative on our Board of Directors since 
inception and has been an integral partner in the development and 
implementation of the program. Other government partners have been 
Agri-Food and Agriculture Canada (AAFC) and some provincial 
governments.
    CCIA, as the national traceability administrator for the Canadian 
cattle and bison industry, manages, administers and develops policy for 
the national animal ID, tracking and traceback program.
    Included in these duties are the allocation of unique individual 
tag numbers from the national database, these unique tag numbers 
(animal ID) are required before an animal can move from the herd of 
origin and must be maintained to the point of export or carcass 
inspection.
    The CFIA is responsible for regulatory enforcement as defined 
within the Health of Animals Act. The CFIA also ensures that the 
National program meets the ever evolving animal health and food safety 
traceback requirements from both domestic and international 
perspectives.
    AAFC also works closely with the CCIA to ensure the funding 
requirements for important development and enhancement initiatives are 
met.
    From a historical perspective the CCIA completed its initial 
voluntary implementation in 2001 and for less than $4 million. The 
mandatory enforcement by CFIA was phased in starting on July 1, 2002.
    The effectiveness of the planned and phased in implementation has 
been very good. Based on international reviews of the traceback process 
following animal health issues, CCIA has been recognized as a world 
leader in animal identification and traceback.
    With a nation wide compliance rate of between 99-100%, the CCIA has 
implemented a sustainable identification program while maintaining and 
surpassing national standards.
    The CCIA's repository (the Canadian Livestock Traceability System 
[CLTS]) houses the national ID and traceback systems for a variety of 
industry and species groups, including dairy, beef, bison, sheep, pork 
and poultry.
    The CLTS is the core of cattle marketing programs in Canada as it 
is the source of information needed to provide international markets of 
credible data on the cattle they are importing.
    For the Pork industry, the CCIA had previously developed the 
Western Slaughter Database for swine and is now working with this 
industry on the development and implementation of their own national 
traceability system.
    Due to the emerging issue of avian influenza, the CCIA has worked 
with provincial groups in the poultry sector for the creation of 
Premises Identifiers to be used in their emergency planning system. 
Recently there was an outbreak of avian influenza in British Columbia 
and with their robust emergency planning system, supported by Premises 
ID, the scope of the problem was effectively managed and the resulting 
cull was only 60,000 birds, not the tens of millions seen previously.
    CCIA has been an active participant in the formation and 
maintenance of the Canadian animal identification system by creating 
national standards to provide direction and leadership on individual 
identification, technology, tag distribution, data reporting and 
auditing. As well as working directly with both industry and government 
partners, the CCIA has implemented a system that is practical and fully 
supported by the Canadian cattle industry and other sectors.
    On an ongoing basis the CCIA assists the CFIA in any animal health 
or food safety related investigations in Canada, which have been an 
integral part in all BSE investigations. The system provides invaluable 
and timely tag inventory, tag history, retirement data from the packing 
plants and exports, and the activity of all herds involved. In the 
follow-up reviews to the 2003 BSE investigations, the international 
review Committee was very complimentary of the effectiveness of the 
Canadian traceback system.
    During negotiations with Japan for the re-opening of their market 
to Canadian beef exports, a key factor was the existence and 
credibility of the Canadian animal identification system. Supported by 
the system Canadian access to an increasing number of international 
markets is occurring, with recent market agreements in the Middle East 
an example of this.
    From the perspective of being a ``partner'' in external 
traceability systems, CCIA has also had an effective and collaborative 
relationship in coordinating efforts with the Wisconsin Livestock ID 
Consortium for system development to meet their state's needs.
    With a proven successful industry/government partnership that has 
endured and grown, the CCIA is poised to leverage on its past and 
current success with animal identification and grow the potential for 
full Canadian livestock and poultry traceability.
    A key concern that everyone in our societies has is the issue of 
security of their personal information--it is a concern that is raised 
constantly and from the perspective of CCIA, it is a requirement 
imposed by privacy legislation. All personal information associated 
with each tag number is securely maintained within the national 
database and is only accessed by authorized personnel in the event of 
an animal health issue.
    Releases of information needed for the handling of such matters as 
stray animal searches and for the enabling of value-added information 
sharing is performed with the appropriate consents.
    From a structural and procedural basis, the CCIA assists producers 
and other industry participants meet their regulatory reporting 
requirements to governments, federal and provincial, through controlled 
access based on defined protocols.
    With the emergence of commercially driven, value-added programs, 
the development of industry consent-based information-sharing protocols 
has also been implemented, that is to say that if a producer and 
someone else in the value-chain wish to share defined information they 
can have that information flow facilitated by the system. However, I 
would emphasize that all the participants must agree to this and define 
the terms of what they are willing to share.
    As with all technology-based systems, the CCIA has continued to 
enhance the functionality of the animal identification program through 
ongoing system enhancements, including a complete upgrade in 2006 to 
facilitate the migration from bar code tags to Radio Frequency 
Identification (RFID) technology tags. It has also implemented 
components to support:

      Various value added and post-BSE initiatives such as Age 
Verification; and

      The implementation of Premises Identification Numbers to 
support emergency planning and enable movement reporting.

    The use of Age Verification, the ability to associate an animal 
birth date with a unique animal identification number, has been a key 
evolution. To address the ever increasing demands from our 
international trading partners for livestock products with specific 
requirements accurate age determination for Canadian cattle is a 
necessity.
    In order to ensure the industry could maintain its market access, 
the CCIA implemented changes to the CLTS that provide an effective and 
internationally recognized validation and age verification process. 
This functionality enables producers to submit information to meet 
regulatory requirements (Alberta and Quebec) or commercial interests in 
a recognized national database and have it readily available when it is 
required by either domestic or export markets.
    The transition from the original bar code tags to Radio Frequency 
Identification (RFID) technology officially began on January 1, 2005. 
The bar coded tags were no longer eligible for sale in Canada as of 
July 1, 2005, and as of September 1, 2006 producers were no longer 
allowed to tag anything but mature breeding stock with the bar code 
tags. The transition will be complete as of December 31, 2009, with all 
cattle leaving their farm of origin being mandated as requiring a CCIA 
approved RFID tag.
    From a commercial perspective, the evolution from bar codes to RFID 
has been moving faster than this timeline, with many feedlots and other 
commercial entities (e.g. dairies and feedlots) using the unique animal 
RFID tag number as a critical component in their business systems to 
monitor feed, health, production, and other factors.
    The implementation of RFID technology has provided many benefits 
including:

      Providing accurate and efficient trace back information 
more efficiently;

      Allowing for the electronic reading of numbers without 
the line of sight and legible bar code required for an optically based 
system;

      Ensuring Canada has an accurate and comprehensive age 
verification system; and

      Providing the necessary basis for full animal movement 
tracking at the speed of commerce.

    In conjunction with national standards, the CCIA's standards for 
RFID tags ensure visual, mechanical, physical, electrical and 
environmental quality, additionally they are also tested to make sure 
they cause no undue welfare concerns to an animal. The CCIA also 
verifies associated technology such as readers to ensure that they meet 
all standards for readability.
    As the CCIA continues to enhance the current system it provides an 
increasingly efficient platform to collect essential animal 
identification related data and other attribute information that has 
both regulatory and commercial utility. The use of the data supports a 
variety of applications, which includes the:

      Transition to RFID tags;

      Previously referenced implementation of age verification;

      Premise Identification registration facilitates 
tracebacks and movement tracking, whether it is a Group or Lot approach 
(pork and sheep), individual animal sighting; or unique animal movement 
(cattle and pork breeding animals), animal health zone controls, and 
disaster planning / recovery; and

      Value-Added commercial programs, either for mass-marketed 
approaches or local niche markets.

    In preparing for this hearing it was identified that there was 
interest in learning what had worked and what has not been as 
successful. I will attempt to share some of my learnings and that of my 
organization.
    Given that technology is described as the key to the success of the 
system, it is fair to say that it can also be its Achilles heel. By 
this I mean that the system can be incredibly efficient when all 
sectors have a high level of technological infrastructure, but when 
that infrastructure is not as robust (e.g. dial-up or not Internet vs. 
high-speed / broadband) a single solution or approach is not always 
attainable or viable.
    This is a key factor for developing the tools and techniques for 
data collection, distribution, and also the structure for the education 
and training required to support producers and other industry 
participants. Failure to address the capture methods issue and 
education aspects can have significant impact on overall credibility of 
the system.
    Another key area is the base level technology, that of the RFID tag 
and the factors affecting its retention and readability. This component 
is one that is subject to an incredible range of environmental and 
climatic factors in Canada and testing and product improvement and 
producer education are vital to addressing concerns.
    With respect to addressing key technology factors or other system-
related issues, CCIA is moving to continuous improvement practices to 
address the technological and engineering factors, while using these 
practices to identify key educational issues for the industry and how 
to best deliver the training.
    Underlying this is the reality that there is no ``one size fits 
all'' approach to a national traceability system in a country as large 
and diverse as Canada and we will use a collaborative and open approach 
to working with industry, the business sector, and government to 
address the issues and deploy the right tools for the getting the job 
done.
    In June 2006, recognizing industry's leadership and foresight in 
building the foundation for livestock traceability, Federal/Provincial/
Territorial (FPT) Ministers committed to phasing in a National 
Agriculture and Food Traceability System (NAFTS), beginning with 
livestock and poultry. Four sectors have been prioritized: cattle, 
sheep, hogs and poultry.
    In August 2006, an Industry-Government Advisory Committee was 
established to lead the development and implementation of the national 
traceability system for the livestock and poultry components of NAFTS. 
IGAC is the current forum for industry and governments to collaborate 
on traceability.
    The need for this approach will become even more evident as we 
advance down the path to a full multi-species traceability system. 
Having a flexible and collaborative organization and system will be the 
only way that we will achieve a vision that embraces the full continuum 
of traceability from the farm gate to the consumer's plate.
    The integration of multiple complex data systems, while protecting 
the personal privacy of individuals will necessitate innovative 
solutions and extensive collaboration between a large number of 
parties.
    As you can imagine, communications is a crucial factor in the 
success or failure of a national identification system. No one party 
can make it a success or result in its failure--it is dependent on the 
resources and participation of all industry sectors, organizations and 
government to ensure industry and all stakeholders are informed and 
able to support and use the program and understand its future 
potential.
    Multi-year campaigns utilizing standard themes in various 
communications tools, such as brochures, advertisements, educational 
forums, presentations, websites, posters and media kits, are needed to 
ensure that the CCIA effectively communicates key messages about the 
program.
    The path to the future that the CCIA has committed to is one that 
continues to:

      Meet and strives to set performance levels that exceed 
domestic and international requirements for animal identification, 
tracking and traceability;

      Improve Canada's overall animal health emergency response 
capabilities;

      Enhance all aspects of data integrity and quality 
control;

      Define and implement all necessary technological and 
database enhancements;

      Ensure a cost-effective, efficient and long term 
sustainable program for sectors of the livestock and poultry 
industries;

      Support to our industry partners in their efforts to 
engage and educate the consumer as well to assure them of food safety 
and the quality of Canadian meat; and

      Work with our trading partners in an effort to achieve 
international standardization and increase the efficiency and cost-
effectiveness of all livestock identification and traceability 
programs.

    The animal identification program was initially mandated as a joint 
venture between industry and the Federal Government to meet the basic 
animal health and food safety traceback requirements. This partnership 
continues to be very strong and productive and one that is expanding to 
include provincial governments and an ever-expanding range of industry 
sectors.
    The evolution of the relationships and the collaborative 
development of the necessary tools are seen as the most effective way 
forward and pave the way for the effective and efficient use of the 
system for all stakeholders.
    Thank you for your invitation to meet with you and the time to 
speak to you today.

    The Chairman. Thank you both very much. We are very, very 
grateful.
    Let me start the questioning with you, Mr. St. Cyr. Can you 
comment on whether mandatory ID has helped your export markets?
    Mr. St. Cyr. Well, I can't speak from the perspective of 
having taken part in the negotiations. However, the subjective 
evidence that I have received from our Canadian Cattlemen's 
Association is that the existence of our animal ID system was 
crucial in opening the Japanese market to Canadian beef.
    The Chairman. Now, did any of your businesses go out of 
business directly related to their participation in mandatory 
animal ID?
    Mr. St. Cyr. Not to my knowledge.
    The Chairman. What was the start-up cost for your programs? 
And what are the annual costs to each of your governments, 
Australia and Canada? Please state if your answers are in U.S. 
dollars or your own currency.
    Mr. St. Cyr. As I noted in my presentation, the start-up 
cost for the CCIA was approximately $4 million Canadian and our 
annual operating cost is about $3 million Canadian.
    Dr. Williams. Certainly, from our cattle industry 
perspective, the start-up costs were about $56 million U.S., in 
terms of tagging the national herd and some of the 
infrastructure costs that needed to be put in place. Then it is 
approximately $20 million U.S. a year to maintain the annual 
tagging. That cost so far has been shared 50-50 between 
government and industry.
    The Chairman. And just in Australia, is Australia TB-free? 
If the answer is yes, would you credit the mandatory ID system 
for that success?
    Dr. Williams. Yes, we are TB-free. We have been TB-free 
since 1997. And the basis of having a mandatory animal 
identification system was due to our tuberculosis and 
brucellosis eradication program. So definitely yes.
    The Chairman. So have either of you ever had to use or 
execute your system for a disease problem? And if so, how long 
did it take you to track all of the animals that you were 
looking for?
    Dr. Williams. We certainly have used it on some minor 
residue issues. So, going back to the questions that were asked 
of the previous panel on food safety, it still is a useful food 
safety tool. Certainly anecdotally, from the minor issues we 
have had to deal with, it has been a very effective tool for 
traceability.
    But we have also tested it, as a government, through 
exercises. We have had two exercises for the cattle industry 
called Cow Catcher I and Cow Catcher II--very ingenious names, 
of course. Basically, Cow Catcher I was conducted before the 
mandatory system came into place, and we found the overall 
result for traceability was about 75 percent. Our national 
performance standard is related to tracing an animal within 24 
hours and also contact animals within 48 hours. When we ran the 
exercise Cow Catcher II, which was conducted in 2007, the 
traceability success rate rose to 99 percent, or nearly 99 
percent of cattle were traced within 24 hours.
    The Chairman. Now, to the both of you, do you believe that 
your animal ID system would be as an effective if it were 
voluntary?
    Mr. St. Cyr. I will start out on this one.
    The program in Canada did start out on a voluntary basis, 
and it had a reasonable uptake. However, to reach the point 
where you have the critical mass, it had to be converted to a 
mandatory animal ID system.
    The Chairman. Okay.
    And you?
    Dr. Williams. I don't have anything to add to the other 
comment, other than to say, yes, in the Australia experience it 
started off as voluntary, but, again, our experience has shown 
that it must be a mandatory system.
    The Chairman. Thank you very much.
    Mr. Neugebauer?
    Mr. Neugebauer. Thank you, Chairman.
    Dr. Williams, in your testimony--and I want to make sure I 
understand this clearly--what portion of that cattle ID system 
in your country is borne by the producer and what portion is 
borne by somebody else?
    Dr. Williams. Are you talking about the costs of the 
system?
    Mr. Neugebauer. Yes.
    Dr. Williams. In terms of costs, it has been approximately 
50-50 in terms of the actual split. It does vary between 
states. Different states and different territories were able to 
implement the system under their own--well, they were required 
to put the legislation in place and under their own steam, if 
you like. But in terms of actual costs, it has worked out to be 
approximately 50-50.
    Mr. Neugebauer. Fifty percent the producer and 50 percent 
the government then?
    Dr. Williams. Exactly, yeah.
    Mr. Neugebauer. In the Australian system, what are some of 
the primary things that your government did to protect what 
would be considered proprietary data that the producers would 
not want to share in a public domain? What have you all done to 
protect that?
    Dr. Williams. Yes, that is a good question. The data 
collected through NLIS is protected from freedom of information 
acts in Australia. And the major reason why that is done is 
because the database is actually held by a private company, in 
Meat and Livestock Australia.
    And there have been no known requests for data for freedom-
of-information purposes to date, but even so, the data is 
protected.
    Mr. Neugebauer. Now, is some of that data held by private 
companies and then accessed by the government? Or is it all in 
a government database?
    Dr. Williams. No, it is in a private database run by a 
producer-owned group called Meat and Livestock Australia. The 
government has access in specific circumstances, for suspected 
or actual disease outbreaks or chemical residue incidents. So, 
most of the time, the government is not accessing the database.
    Mr. Neugebauer. So when you ran Cow Catcher I and Cow 
Catcher II, did you physically go into the database, or did you 
call the private company and say, we need trace-back or 
information on these? How did that work?
    Dr. Williams. No, we physically used the database at the 
government level, both mainly the state and territory levels 
but also Federal Government. It is an ID user, password-
protected system, Web-based, Web-enabled. Government offices 
have their own user ID and password protection, so you know who 
accesses the database, and you also have different levels of 
protection as to what you can access in the database.
    Mr. Neugebauer. So, in other words, can you physically go 
in there and download data, or do you have to review it online?
    Dr. Williams. I am a government veterinarian and not IT 
expert, but I have actually interrogated the database myself. 
Most of the time, a government officer would--they only have 
access to certain fields in the database, and most of the time 
what you have isn't easily seen on the screen, so you then 
might make a few notes about what you might need to do, say, 
make a phone call or go to a sow yard.
    So you could--I am not sure whether you can actually 
download it, but you can certainly--you have access to the 
database that you need to.
    Mr. Neugebauer. Do you have mandatory animal ID for all 
food animals in Australia?
    Dr. Williams. We are moving towards that system. So 
mandatory tagging of sheep and farmed goats was brought in in 
January 2006, and we are moving to a mandatory recording 
system.
    And I think it was explained by previous panelists, you 
sort of go through this in a step-wise process. You register 
premises, then you start to identify the animals, and then you 
actually have the traceability systems put in place.
    So we are working towards the traceability system. July 
2009 in sheep and farm goats, we will have mandatory 
requirements for recording through sow yard transactions.
    Mr. Neugebauer. Where the private sector is maintaining the 
database and the government is accessing it, and so therefore 
if somebody does an open records request, the government 
doesn't have any data in its hands, other than maybe the 
premises numbers or something like that? So, that is the way 
you have protected the proprietary information?
    Dr. Williams. Basically any information from that database, 
as I said, it is exempt from the Freedom of Information Act in 
Australia.
    Mr. Neugebauer. By statute?
    Dr. Williams. Yes, that is correct.
    Mr. Neugebauer. I want to go to my Canadian friend. By the 
way, we came to Canada on a field hearing a couple of years 
ago.
    And where are you in the process? Do you have mandatory 
animal ID for every food animal in Canada?
    Mr. St. Cyr. Not all food animals, at this point. We are 
moving on that path. The goal of industry and government is to 
have that in the next few years.
    Right now, we have cattle, bison. Pork will have a national 
traceability system this year. Sheep has moved that way. Goats 
are probably the last of the commercial type of livestock 
species that don't have it.
    Mr. Neugebauer. What mechanisms has the Canadian Government 
put in place to help to protect this proprietary information so 
that producers don't feel like their operations are an open 
book?
    Mr. St. Cyr. Well, because we are essentially a private 
company that manages it on behalf of industry and government, 
we have a different regulatory environment instead of the 
Federal Government. The Federal Government and provincial 
governments have right of use and access to information through 
the regulatory regime that they operate under, but that is the 
only information that they have right of use and access for.
    Proprietary information is managed under a separate 
regulatory regime, where it is consent-based by the producer. 
So you want to have a value-chain sharing approach, so that you 
are carrying that attribute information along. All of the 
members of the value chain who want to share information must 
consent and provide us with that consent so that that can be 
enabled for them.
    Mr. Neugebauer. So that is to make certain representations 
about the origin of that product, where it has been and so 
forth----
    Mr. St. Cyr. Exactly.
    Mr. Neugebauer.--for countries or companies that are 
sensitive to food safety?
    Mr. St. Cyr. Yes.
    Mr. Neugebauer. Thank you, Chairman.
    The Chairman. Thank you.
    Just as a note, we are going to have the second panel come 
back very briefly. So those, the second panel here, please stay 
put. We are going to have you come back momentarily. We 
appreciate your attendance here.
    To continue the questioning, Mr. Costa?
    Mr. Costa. Thank you very much, Mr. Chairman. For clarity 
here--I just have one question for these witnesses--are we then 
going to move to the second panel?
    The Chairman. Yes.
    Mr. Costa. Okay.
    I also have some constituents here who are very involved in 
the issues that we are talking about here today. So I am 
pleased that they are here to get their own take on what is 
going on.
    Quickly, with both Australia and with Canada, do you have 
an equivalent of the animal identification--I mean like the 
MCOOL program? I don't know how familiar you are with it here 
in the United States, but it requires labeling for products 
that are sold in our markets. Do you have an equivalent of that 
in Australia or Canada?
    Mr. St. Cyr. Recently, the Federal Government implemented 
Product of Canada labeling requirements. But because that is 
outside of my area of expertise, I would be very reluctant to 
comment on that.
    Mr. Costa. Okay.
    For Australia?
    Dr. Williams. We do have Mandatory COOL for some products 
but not for red meat. So it has no basis for beef.
    Mr. Costa. So suffice it to say, both of your countries are 
in transitioning as far as consumer demands and other markets 
dictate, as it relates to both labeling as well as animal 
identification.
    But you see animal identification, to the heart of the 
questions that you were asked today, as being a health issue 
and not a marketing issue, is that correct?
    Mr. St. Cyr. For us, from the government perspective--and I 
can only speak subjectively, because I just work with them----
    Mr. Costa. Yes. I mean, there are three reasons. It is 
either health, marketing, or trade.
    Mr. St. Cyr. For the way the current system is structured, 
it is an animal-health-based approach. From the commercial 
side, the industry side, it is a facilitator to allow them to 
market both domestically and internationally.
    Mr. Costa. Is it the same in Australia?
    Dr. Williams. No. It is actually covering all three. 
Certainly for animal health from a government perspective, the 
legislators' perspective. But from an industry perspective, it 
is definitely market access. In fact, because we so heavily 
rely on exports in Australia, that was one of the key drivers 
for NLIS--or mandatory NLIS.
    Mr. Costa. And trade.
    Dr. Williams. Yes, exactly. That is correct.
    Mr. Costa. I would like to go to the next panel, if that is 
possible, Mr. Chairman.
    The Chairman. Thank you very much. I want to thank this 
panel for your participation. You have been very helpful to us, 
and your full testimony will be a part of the record. We want 
to thank you very much.
    And if the second panel could reconvene for a moment, we 
have a couple of quick questions Mr. Costa would like to ask.
    Mr. Costa. I thank the Chairman and Ranking Member for your 
indulgence. I tried to get back here as quickly as I could from 
the floor and got waylaid.
    As you are sitting down, quickly, Mr. Nutt and Dr. 
Thornsberry and--I guess Mr. Butler is not here--Dr. Jordan and 
Dr. DeHaven, question: Mr. Nutt, do you oppose mandatory--I 
heard your testimony earlier--ID? Animal identification?
    Mr. Nutt. I will start off by saying this: As we know it 
today, with the degree of definition that there is, we very 
much opposed a mandatory system.
    Mr. Costa. All right. I just wanted to clarify that.
    Dr. Thornsberry, you are opposed as well?
    Dr. Thornsberry. 100 percent.
    Mr. Costa. Okay. I thought I understood in the testimony--I 
was here at the time--that the pork industry supported it, if I 
am correct for the record, as did the dairy industry. Is that 
correct?
    Dr. Jordan. That is correct.
    Mr. Costa. We have about, what, about 9.3 million milk cows 
in the country?
    Dr. Jordan. That is right, mature animals, yes.
    Mr. Costa. And about 4 million heifers, replacement 
heifers, something like that? But you have worked with the 
mandatory program, in essence, for a while.
    Dr. Jordan. Yes. Well----
    Mr. Costa. I mean de facto. I mean the way you register 
your animals for breeding dates and everything, they are all 
registered, they are identified from dairy to dairy, right?
    Dr. Jordan. Well, I am not going to lead you astray in 
thinking that all of our cattle are registered with breed 
associations.
    Mr. Costa. No, I understand that.
    Dr. Jordan. Okay.
    Mr. Costa. I am a third-generation dairy person, so I know 
a little bit about the business.
    Mr. DeHaven, your position on mandatory ID?
    Dr. DeHaven. We support mandatory ID.
    Mr. Costa. Okay.
    Mr. Thornsberry and Mr. Nutt, the question I asked the 
previous panel, I think there are three reasons why we--and I 
know, Mr. Thornsberry, you strongly supported labelling, or I 
believe R-CALF strongly supported it. And I am confused. I 
think there are three reasons, as I said, for animal ID: 
health, marketing, and trade.
    And you told me how you felt about the trade issues in your 
testimony, so obviously that doesn't sway you. But I am trying 
to understand why, if you support labelling under MCOOL, 
doesn't it seem inconsistent for you as a veterinarian not to 
support it for health reasons?
    I mean, we have BSC issues that we have to deal with, we 
have brucellosis, we have TB. I have had two dairies in my 
district that have tested positive, and it has been a horrific, 
difficult challenge to deal with. I mean, it just seems to me, 
if we had mandatory ID, we could deal with a lot of these 
issues.
    Mr. Thornsberry, do you find your position inconsistent?
    Dr. Thornsberry. No, I certainly do not. There is no 
relationship to ID and COOL. COOL identifies the country of 
origin, not the farm of origin. And all meat and all cattle 
coming into this country from another country have to be marked 
with a mark of origin. All we have to do is maintain that 
origin. Anything born in the United States doesn't need an 
identification, because all foreign products are identified.
    You know, we hear this----
    Mr. Costa. Let me ask you a question. Would you not agree 
that, if we had a national animal ID program in place, that the 
length of time associated with the costs of testing for TB, for 
example, could be dramatically reduced, that we could save 
money?
    Dr. Thornsberry. No, I do not. I don't know of a dairy yet 
that doesn't have their animals identified in some fashion or 
another. Seventy-two percent of all dairies are part of DHIA, 
and all those have an individual identification on them.
    I don't believe that animal ID is going to be any 
miraculous system that will automatically prohibit us from ever 
having a problem in this country.
    Mr. Costa. But you have concern about animals being 
imported from Mexico or Canada, right?
    Dr. Thornsberry. Most certainly I am.
    Mr. Costa. Of all the animals that I understand that have 
been traced out and tested from Mexico, I understand 377,000 
tests, not one has tested positive?
    Dr. Thornsberry. For TB?
    Mr. Costa. Yes.
    Dr. Thornsberry. Seventy-five percent of the TB identified 
in the United States by DNA typing comes from Mexican cattle.
    Mr. Costa. Not one of the Mexican cattle that I understand 
was implicated in the tests.
    Dr. Thornsberry. No, sir, that is incorrect. The OIG has 
made a report here recently. Part of the problem we have TB in 
this country, we have wildlife reservoirs. That is going to 
continue to be a problem forever.
    Mr. Costa. Well, of course, whether you have MCOOL or 
whether you have a mandatory ID.
    Dr. Thornsberry. But 75 percent, 75 percent of the----
    Mr. Costa. But would you not argue that mandatory ID'ing 
would provide an added safety issue?
    Dr. Thornsberry. No, I would not.
    Mr. Costa. Well, I would disagree with you. I mean, I 
understand why you don't like it.
    Dr. Thornsberry. Yes, I don't think you have weighed the 
consequences of this program. You have had Australia talk to 
you that has 25 million head of cattle. Talking about us, we 
have 100,000 head of cattle in this country.
    Mr. Costa. 100 million cattle.
    Dr. Thornsberry. I mean 100 million.
    Mr. Costa. Right, last time I checked.
    Dr. Thornsberry. We have four times as many cattle, four 
times the cost, if not more. They are getting tags much less 
expensively than we are because most of our tags come from that 
country. Mine are costing me $3.
    Mr. Costa. I don't think you can do MCOOL successfully, as 
I said to the earlier witness--and I don't expect I am going to 
change your mind, but you are not going to change your mind--
unless you have mandatory ID. I think the two go hand in hand.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you very much.
    Before we adjourn, I want to recognize the Ranking Member, 
if you have anything you would like to say.
    Mr. Neugebauer. Well, I think this has been very helpful. 
And I think one of the things that this begins to articulate is 
there are a lot of different ways to approach this issue. But I 
think one of the most important things, as we move in this 
direction of trying to make a decision on what to do with 
animal identification, is we need to get it right. And we hear 
that even if we started now, it would take 4 years to implement 
it. Gosh, if it would take 4 years to implement it and then we 
didn't get it right, how long would it take to fix it?
    So I appreciate the Chairman. I hope this is an issue that 
we will thoughtfully proceed with. We may have to have 
additional hearings and possibly look at some different ways to 
approach this issue.
    The Chairman. Well, thank you, Mr. Ranking Member.
    And I want to thank all of you, all of you that came, took 
time out of your busy schedule to come and share with us your 
expertise. We deeply appreciate it. It has been very helpful to 
us and very informative.
    As I said before, this Committee is moving aggressively on 
this issue. I think our time clock is ticking. As I mentioned, 
this issue is a homeland security issue now, and our next 
hearing will be a joint hearing between this Committee and the 
Homeland Security Committee.
    This is taken very seriously. We feel the Administration is 
taking it very seriously. We are going to move forthrightly. We 
are going to figure out a way to deal with those concerns.
    I think you have real concerns, Mr. Thornsberry and Mr. 
Nutt, in terms of the confidentiality of information, make sure 
it is protected. I think we did have some examples, although 
from Australia and Canada. They are smaller economies of size 
than ours; we recognize that. But I think we have the nucleus 
for coming up with a conclusion.
    And, like I said, at the end of the day, the bottom line is 
protecting the food chain of the American people, thereby 
protecting the human costs that we have but also protecting our 
economy as well. It only takes one little slippage.
    Now I would just like to say, under the rules of the 
Committee, the record of today's hearing will remain open for 
10 calendar days to receive additional material and 
supplementary written responses from the witnesses to any 
question posed by a Member.
    This hearing of the Subcommittee on Livestock, Dairy, and 
Poultry is thereby adjourned.
    [Whereupon, at 12:43 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
  Submitted Statement of Judith McGeary, Executive Director, Farm and 
                         Ranch Freedom Alliance
    The Farm and Ranch Freedom Alliance (FARFA) is a non-profit 
organization headquartered in Austin, Texas. Founded in April 2006, 
FARFA has over 600 members and over 2,000 subscribers to its mailing 
list from across the country. FARFA is dedicated to protecting the 
interests of independent farmers, ranchers, homesteaders, and other 
livestock owners.
    USDA has described NAIS as ``one of the largest systematic changes 
ever faced by the livestock industry.'' \1\ Despite the scope of the 
proposed program, the government has not conducted any scientific 
studies to analyze the design or effectiveness of the NAIS. Nor has the 
government ever completed a cost-benefit analysis. Rather, the USDA has 
relied on unsupported, generalized statements that NAIS is necessary to 
protect the United States against an outbreak of animal disease and 
that it will help the export market. The discussion below is an 
overview of the most egregious issues that have been ignored by the 
proponents of the program.
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    \1\ USDA Press Release No. 0120.06 (Apr. 6, 2006).
---------------------------------------------------------------------------
Background
    In the 1980s and 1990s, industry trade groups developed plans for a 
national electronic animal identification system. \2\ In 2002, the 
National Institute for Animal Agriculture (NIAA) established a task 
force to create a National Animal Identification System. \3\ The NIAA 
is a trade organization composed primarily of large agri-business, 
technology companies, and government bureaucracies. \4\ The NIAA 
included USDA in its task force to develop a national electronic 
identification system. \5\
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    \2\ See, e.g, Proceedings of the 1994 Livestock Identification 
Consortium, online at http://animalagriculture.org/Proceedings/
1994IDProceedings.asp
    \3\ Draft Strategic Plan, United States Department of Agriculture, 
Animal and Plant Health Inspection Service (published Apr. 25, 2005) 
(hereinafter ``Draft Plan'') at 4.
    \4\ The list of NIAA members is available at http://
animalagriculture.org/aboutNIAA/members/memberdirectory.asp.
    \5\ Draft Plan at 4.
---------------------------------------------------------------------------
    In April 2005, the USDA published the Draft Strategic Plan and the 
Program Standards for the NAIS. These documents set out a three-stage 
program: premises registration, animal identification, and animal 
tracking, discussed in more detail below. The Plan stated that the NAIS 
would be mandatory after an initial voluntary period. \6\
---------------------------------------------------------------------------
    \6\ Draft Plan at 8-9.
---------------------------------------------------------------------------
    After a public outcry, USDA announced in November 2006 that NAIS 
would be voluntary at the federal level. \7\ The same day USDA made 
this announcement, it also announced the availability of $14 million to 
fund state programs under cooperative agreements. The cooperative 
agreements with the states include provisions requiring the states to 
reach specified goals for participation. \8\ The federal funds thus 
encourage states to adopt mandatory programs, as Wisconsin and Indiana 
have done, \9\ or to use coercive measures to increase registrations. 
For example, Michigan now requires all cattle to be tagged with NAIS-
compliant RFID tags (and the properties registered), Tennessee has 
refused disaster relief to farmers whose properties were not NAIS-
registered, and Colorado has expelled children from the State Fair 
livestock show because their parents' properties were not registered. 
\10\
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    \7\ USDA, National Animal Identification System (NAIS): A User 
Guide and Additional Information Resources (Version 2.0, December 2007) 
(hereinafter ``User Guide'').
    \8\ See, e.g., USDA, Announcement of Cooperative Agreements for 
Implementation of the National Animal Identification System (NAIS) 
(Nov. 22, 2006) (hereinafter ``Cooperative Agreement Announcement'') at 
1 (``Applications must present well-defined measurable outcomes and 
total allocation of funding will be dependent upon achieving projected 
results with a mid-year assessment.'').
    \9\ Wisconsin and Indiana have implemented mandatory premises 
registration. See Wis. ATCP Rule 17.02; 345 IAC 1-2.5. State agencies 
in Texas, Vermont, and Pennsylvania have proposed mandatory regulations 
under NAIS and only withdrawn them after intense public outcry.
    \10\ USDA has expressly approved of coercive tactics, such as 
requiring participation in NAIS to be tied to existing programs. See 
User Guide at 7. USDA's 2007 call for applications for cooperative 
agreements also allows for data mining. See Cooperative Agreement 
Announcement at 12. Numerous anecdotal reports have also surfaced of 
individuals being told that the state program was mandatory (even when 
nor regulations had been adopted), told that they had to register in 
order to attend a show or sell their animals at public auction, or 
other threats.
---------------------------------------------------------------------------
    Further, despite referring to ``critical mass'' as an intermediate 
goal for participation, the USDA has repeatedly stated that its 
ultimate goal is to have 100% or ``full'' participation. It is not 
plausible that 100% of animal owners, including thousands of people who 
have livestock as pets, will choose to sign up for this program of 
their own free will, in time to meet USDA goals. The reality is that 
states continue to face pressure from USDA to implement mandatory or 
coercive measures to meet the USDA's goals and to receive federal funds 
to meet those goals. We urge Congress to halt or restrict the USDA's 
implementation of NAIS.
I. NAIS will impose significant costs on livestock and poultry owners, 
        including small farmers and pet owners.
    The USDA provided a grant to Kansas State University in 2007 to 
conduct a cost-benefit analysis. Although USDA has the results, it has 
refused to release the study to date. Instead, the USDA and state 
agencies continue to spend money on NAIS and expect animal owners to 
pay costs, while our economy faces a severe recession.
    Even just the first step of the NAIS, premises registration, 
involves significant costs: computer hardware and software to create 
the database of all animal owners, and the personnel for data entry, 
management, and maintenance. These costs must be paid either through a 
fee on the landowner (as proposed in Texas) or with taxpayer dollars.
    Animal identification is a separate, costly step. Although the 
external RFID tags cost $3, the implantable microchips cost 
approximately $20. The cost of actually tagging the animals must also 
take into account the costs of a veterinarian's assistance (for 
implantable micrcohips) or the equipment and labor necessary to 
precisely place the tags in the correct portion of the ear so that they 
can be read electronically. \11\ There is also the potential for human 
or animal injury in the process, as well as the shrinkage associated 
with greater handling of the animals. \12\ Most farmers and ranchers 
have very narrow profit margins and will not be able to absorb these 
costs. Some animals, such as sheep and goats, may be worth as little as 
$50 to begin with, making such costs clearly excessive. If leg bands 
are used to identify poultry at birth, they will require multiple tag 
changes while they grow to maturity, which could easily mean spending 
more money on tags than the bird would sell for.
---------------------------------------------------------------------------
    \11\ For example, paying a vet in the Central Texas area to implant 
a microchip in a horse costs between $60 and $80, based on a phone 
survey. For the external tags, an applicator is needed and the tag is 
supposed to be placed in a precise \1/4\ area of the ear.. See Michigan 
University Extension, Bulletin E-2967 (July 2006).
    \12\ A presentation by Kansas State University researchers 
conducting a cost-benefit analysis of NAIS under a grant from USDA, 
included the following ``cost categories'' for implementation of NAIS 
for cattle: RFID tags, RFID technology, labor (associated with each 
category), shrink, animal injury, human injury, depreciation, and 
opportunity costs.
---------------------------------------------------------------------------
    The third step, reporting, will require animal owners to either 
have electronic readers and computers, or to pay someone else to scan 
the tags and report. The cost for reporting every movement of every 
animal will differ, depending on whether the owner has to hire 
additional labor to help with the paperwork requirements. The list of 
reportable events is long: the tagging of every animal; regional shows 
and exhibitions; every sale, whether by private agreement or market; 
missing animals; predator losses; euthanasia; rendering; and slaughter. 
The resulting databases will be massive, requiring extensive equipment 
and personnel. These costs may be directly imposed on the animal owner, 
or they may be partially hidden by using taxpayer dollars, levies on 
sales barns, or other methods. But they must be paid somehow.
    The Australian Beef Association has estimated that the costs for 
the Australian program (which covers cattle only) could be as high as 
$40 for each animal. \13\ The Association noted that a British 
parliamentary Committee found that Britain's tracking program cost as 
much as $69 per animal sold. When multiplied by the approximately 100 
million cattle in this country, 9 million horses, 9 million goat and 
sheep, and millions more included livestock and poultry animals, these 
costs are staggering.
---------------------------------------------------------------------------
    \13\ Australian Beef Association, Submission to the Queensland 
Government Relating to the National Livestock Identification System 
Regulatory Impact Study (2005).
---------------------------------------------------------------------------
II. NAIS will not increase food safety.
    For many people, the issue of animal health is closely linked to 
food safety. Yet the NAIS will do nothing to improve the safety of our 
food supply. Most food-borne illnesses are from bacteria such as 
salmonella, e. coli, and campylobacter, or the Norwalk viruses. \14\ 
These organisms contaminate food due to poor practices at 
slaughterhouses or in food handling. \15\ The NAIS will not prevent 
these problems from occurring. Moreover, because the tracking will end 
at the time of slaughter, the NAIS will not improve the government's 
ability to trace contaminated meats once they leave the slaughterhouse 
and enter the food chain.
---------------------------------------------------------------------------
    \14\ See Centers for Disease Control and Prevention, http://
www.cdc.gov/ncidod/dbmd/diseaseinfo/
foodborneinfections_g.htm&1Bmostcommon (website last checked May 8, 
2006). Campylobacter, salmonella, and e. coli are all found in the 
intestines of animals, so that contamination occurs during the 
slaughter process. The Norwalk viruses are believed to spread primarily 
from one infected person to another, through handling of food by 
infected kitchen workers or fishermen.
    \15\ See Centers for Disease Control and Prevention, http://
www.cdc.gov/ncidod/dbmd/diseaseinfo/
foodborneinfections_g.htm&1Bmostcommon (website last checked May 8, 
2006). ``Meat and poultry carcasses can become contaminated during 
slaughter by contact with small amounts of intestinal contents. 
Similarly, fresh fruits and vegetables can be contaminated if they are 
washed or irrigated with water that is contaminated with animal manure 
or human sewage. . . . Later in food processing, other foodborne 
microbes can be introduced from infected humans who handle the food, or 
by cross contamination from some other raw agricultural product.''
---------------------------------------------------------------------------
    In fact, the NAIS will actually reduce food safety. Economies of 
scale and the provisions for group identification under NAIS will 
translate to advantages for factory confinement farms. The use of 
antibiotics in these farms has raised significant health concerns, 
while significant environmental issues have been linked to the 
confinement operations' animal management practices. Meanwhile, small 
farmers who sell their products locally, creating a diversified and 
totally traceable food supply, will be driven out of agriculture by the 
costs of NAIS.
    Although it is not a widespread problem, the issue of BSE or Mad 
Cow Disease is of great concern to many Americans. The most effective 
protection against the human health threat from BSE would be a system 
of testing every slaughtered cow that enters the food supply, as is 
currently done in Japan. \16\ England and the European Union also test 
significantly more cattle than does the USDA, which tests only about 1/
10 of 1% of our slaughtered cattle. \17\ The USDA has justified this 
low testing rate on the grounds that it estimates that there are only 4 
to 7 cows in the entire country that have BSE. Yet the USDA apparently 
sees no contradiction in pushing for the electronic tagging and 
tracking of 100 million cows, a process that will not actually detect 
those few sick ones or prevent them from entering the food supply.
---------------------------------------------------------------------------
    \16\ See Congressional Record_House at H4270 (June 8, 2005) 
(comments of Congressman Kucinich); See also Final Report, Japan-United 
States Working Group, Section 1(1)(iii) (Japan's BSE Measures) (July 
22, 2004) (``Based on Article 14 of the Abbatoirs Law, only animals 
that pass ante-mortem and post-mortem inspections are approved for 
slaughter and dressing for use as edible meat. . . . cattle of 0 months 
or older (all ages) are subjected to BSE testing during this post-
mortem inspection.'').
    \17\ The U.S. tested a little over 176,000 cows for BSE in 2004 and 
tested fewer than 700,000 cows total between June 2004 and March 2006, 
a period of almost two years. See News Release, Statement by USDA Chief 
Veterinary Officer John Clifford (DVM) Regarding Positive BSE Test 
Results (Mar. 13, 2006). Between 32 and 35 million cattle are 
slaughtered each year in the U.S., so the USDA has been testing 
approximately 1% for BSE. See USDA, Livestock Slaughter 2003 Summary 
(35.5 million cattle); Livestock Slaughter 2004 Summary (32.7 million 
cattle); 2005 Summary (32.4 million cattle). In contrast, the European 
Union countries tested more than 8 \1/2\ million cows just in 2003, and 
tested over 6 million in just the first 9 months of 2004. See U.K. Food 
Standards Agency, Results of BSE testing in the EU, http://
www.food.gov.uk/bse/facts/cattletest; Results of BSE testing in EU in 
2004, http://www.food.gov.uk/bse/facts/cattletest2004. In 2006, the 
USDA announced that it was reducing testing by 90%.
---------------------------------------------------------------------------
    NAIS will do nothing to increase the safety of the American food 
supply, although it will almost certainly raise the cost of food.
III. NAIS will not improve animal health.
    It is critical to recognize that animal diseases, in both wild and 
domesticated animals, have been part of human existence for thousands 
of years. The excuse of disease cannot justify every intrusion into 
citizens' privacy and burdens on their property rights. But we are not 
even faced with a true choice between safety and freedom, because the 
NAIS will not provide any true protection against disease.
    The sole goal of the NAIS is to provide 48-hour traceback of all 
animal movements. According to the proponents, every animal must be 
part of the system. Yet the government has not provided any studies or 
models showing why 48 hours is a magic number nor why 100% of animals 
must be included. The Farm and Ranch Freedom Alliance submitted 
requests under the Freedom of Information Act (FOIA) in November 2006 
and December 2007, asking for the studies, risk analysis, and other 
scientific documents used to develop NAIS. USDA has acknowledged 
receipt of both requests and has provided no objection under FOIA, yet 
it still has not produced a single study.
    Basic scientific principles and practical experience both establish 
that the susceptibility of animals to disease and the likelihood of 
transmission differ greatly depending on the species of animal, the 
exact disease, and the conditions under which the animals are kept. 
\18\
---------------------------------------------------------------------------
    \18\ The health problems caused by confinement or industrial 
management systems have been well documented in the scientific 
literature. See, e.g., Cravener, T.L., W.B. Roush, and M.M Mashaly, 
Broiler Production Under Varying Population Densities, POULT. SCI. 
71(3):427-33 (1992); M.R. Baxter, The Welfare Problems of Laying Hens 
in Battery Cages, VET. REC. 134(24):614-19 (1994); D. Herenda and O. 
Jakel, Poultry Abbatoir Survey of Carcass Condemnation for Standard, 
Vegetarian, and Free Range Chickens, CAN. VET. J. 35(5):293-6 (1994); 
T.G. Nagaraja and M.M. Chengappa, Liver Abscesses in Feedlot Cattle: A 
Review, J. ANIM. SCI. 76(1):287-98 (1998); T.G. Nagaraja, M.L. Galyean, 
and N.A. Cole, Nutrition and Disease, VET. CLIN. N. AM. FOOD ANIM. 
PRAC. 14(2):257-77 (1998); D.H. Tokarnia, J. Dobereiner, P.V. Peixoto, 
and S.S. Moraes, Outbreak of Copper Poisoning in Cattle Fed Poultry 
Litter, VET. HUM. TOXICOL. 42(2):92-5 (2000)
---------------------------------------------------------------------------
    Non-commercial operations are not immune from disease, but they do 
not pose the same risks as the commercial facilities. Using poultry as 
an example, in the 2004 outbreak of avian flu in Texas, the disease was 
found in a 6,600 bird flock in commercial poultry operation; but 
despite testing more than 350 nearby non-commercial flocks, no infected 
birds were found in non-commercial flocks. \19\ In the 2002 outbreak of 
avian influenza in Virginia, ``farm equipment, vehicles and personnel'' 
that moved among commercial facilities caused transmission of the 
virus. \20\ An NGO report indicates that the spread of avian flu, 
including the greatly-feared H5N1 virus, is due to the conditions in 
confinement poultry operations. \21\ As noted in that report, a USDA 
report found that, out of 45 outbreaks of avian flu in the country of 
Laos, 42 of the outbreaks occurred in commercial operations. \22\
---------------------------------------------------------------------------
    \19\ News Release, Texas Animal Health Commission (Apr. 1, 2004).
    \20\ E-Digest Volume 2, Number 11, Issues Faced in the 2002 VA AI 
Outbreak; paper presented by Dr. Bill Pierson, at the 2002 Poultry 
Health Conference sponsored by the Ontario Poultry Industry Council.
    \21\ Genetic Resources Action International (``GRAIN''), Fowl Play: 
The Poultry Industry's Central Role in the Bird Flu Crisis (Feb. 2006) 
(hereinafter ``GRAIN Report'').
    \22\ GRAIN Report (quoting USDA, Laos: Poultry and Products_Avian 
Influenza, GAIN Report, U.S. Department of Agriculture (Mar. 16, 
2005)).
---------------------------------------------------------------------------
    Despite the clear, scientifically documented differences between 
production systems and non-industrialized holding of livestock, NAIS 
treats all owners alike. Under NAIS, a small-scale livestock owner with 
10 chickens free-ranging is considered as much of a threat to animal 
health as a commercial operation with 10,000 chickens living in a 
crowded building. The farmer raising sheep or cattle on healthy 
pastures is treated the same as the feedlot with hundreds of animals 
crowded into small pens. Indeed, the small-scale producers face even 
heavier burdens than the large commercial operations because of 
economies of scale and the way the USDA has defined group lot numbers. 
This program is precisely the opposite of what is needed to prevent and 
control disease.
    NAIS may also increase the spread of livestock diseases by creating 
a new black market. If the NAIS is implemented on a mandatory basis, or 
creates restrictions on people's right to buy, sell, or use their 
animals, it is inevitable that some people will decide not to comply. 
Since they will be acting illegally, they will be far less likely to 
seek a veterinarian's help should a disease problem arise. To 
understand the potential problem, one has only to look at the outbreak 
of Exotic Newcastle Disease that occurred in Los Angeles in 2002, a 
situation that pro-NAIS supporters have repeatedly referenced. \23\ The 
Exotic Newcastle Disease outbreak was started and spread by 
cockfighting flocks. \24\ Cockfighting is illegal in California and the 
roosters were smuggled in from Mexico. \25\ Thus, the NAIS will 
actually create conditions that increase the probability of disease 
outbreaks by undermining the first line of defense: the actions of 
private individuals and their veterinarians in quickly diagnosing and 
containing diseases.
---------------------------------------------------------------------------
    \23\ See, e.g., News Release, Texas Animal Health Commission (Feb. 
28, 2006).
    \24\ R. Scott Nolen, Exotic Newcastle Disease Strikes Game Birds in 
California, Journal of The American Veterinary Medical Association News 
(Nov. 15, 2002)
    \25\ See News Release, Texas Animal Health Commission (Jan. 1, 
2003) (``END likely was initially introduced into Southern California 
through illegal importation of infected birds.''); Congressman Elton 
Gallegly, Smuggling Cockfighting Roosters a Conduit to Bird Flu, Santa 
Barbara News-Press (Dec. 11, 2005).
---------------------------------------------------------------------------
    There are far more effective ways to address animal diseases than 
an electronic identification and tracking system. The USDA and the 
equivalent state agencies have extensive programs in place to monitor, 
track, and contain disease. These existing programs were analyzed in 
the Government Accountability Office's (GAO's) report on the efforts to 
protect agriculture from a terrorist attack. \26\ As acknowledged in 
that report, the government's ability to respond to an intentional 
introduction of livestock disease reflects its ability to respond to 
natural outbreaks. \27\
---------------------------------------------------------------------------
    \26\ United States Government Accountability Office, GAO-05-214, 
Homeland Security: Much is being done to protect agriculture from a 
terrorist attack, but important challenges remain (Mar. 2005) 
(hereinafter ``GAO Report on Agriculture'').
    \27\ The GAO Report on Agriculture repeatedly refers to the 
government's response to outbreaks, ``whether natural or intentional.'' 
See, e.g., GAO Report at p.26. The Report's conclusion explicitly 
states: ``By overcoming these challenges, the United States will be in 
a better position to protect against and respond to a disease outbreak, 
whether natural or intentional.'' Id. at p.56.
---------------------------------------------------------------------------
    The GAO identified multiple deficiencies in the government 
programs: many veterinarians lack the training needed to recognize the 
signs of foreign animal diseases; USDA does not use rapid diagnostic 
tools to test animals at the site of an outbreak; vaccines cannot be 
deployed within 24 hours of an outbreak; and current USDA policy 
requires a complex process for deciding if and when to use vaccines, a 
process that could be too lengthy during an outbreak. \28\ The report 
listed additional ``management problems'': a decline in agricultural 
inspections at ports of entry, which are the first line of defense 
against the entry of foreign diseases; weaknesses in the flow of 
critical information among stakeholders; insufficient technical 
assistance to states for developing emergency response plans; 
shortcomings in coordinating working groups and research efforts; and 
lack of integration of agencies' databases. \29\ Notably, the GAO did 
not identify any deficiencies in current mechanisms for tracking 
animals, or recommend that resources be allocated to create a program 
such as NAIS.
---------------------------------------------------------------------------
    \28\ GAO Report on Agriculture at p.6-7.
    \29\ GAO Report on Agriculture at p.7-9.
---------------------------------------------------------------------------
    Instead of addressing prevention, diagnosis, and treatment of 
disease, the USDA has spent over $130 million of taxpayer dollars to 
develop an electronic tracking system \30\ and seeks to impose this 
unnecessary and ineffective system on every person who owns livestock.
---------------------------------------------------------------------------
    \30\ Steve Stecklow, U.S. Falls Behind In Tracking Cattle To 
Control Disease, Wall Street Journal (June 21, 2006).
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IV. NAIS will not protect against bioterrorism.
    The USDA's claim that the NAIS will protect against bioterrorism is 
equally flawed. In 2005, the Government Accountability Office (GAO) 
reported on the efforts to protect agriculture from a terrorist attack. 
\31\ The GAO identified multiple deficiencies in the government 
programs: many veterinarians lack the training needed to recognize the 
signs of foreign animal diseases; USDA does not use rapid diagnostic 
tools to test animals at the site of an outbreak; vaccines cannot be 
deployed within 24 hours of an outbreak; and current USDA policy 
requires a complex process for deciding if and when to use vaccines 
instead of slaughtering animals, a process that could be too lengthy 
during an outbreak; and the number of inspections of agricultural 
imports has actually decreased since 2001. \32\ Notably, the GAO did 
not identify any deficiencies in current mechanisms for tracking 
animals, or recommend that resources be allocated to create a program 
such as the NAIS.
---------------------------------------------------------------------------
    \31\ United States Government Accountability Office, GAO-05-214, 
Homeland Security: Much is being done to protect agriculture from a 
terrorist attack, but important challenges remain (Mar. 2005) 
(hereinafter ``GAO Report on Agriculture'').
    \32\ GAO Report on Agriculture at p.6-7.
---------------------------------------------------------------------------
    While the GAO report did not identify NAIS as important in 
controlling animal disease, the report highlighted what may happen 
after the government traces animals back. Current USDA policy calls for 
``depopulation.'' Stripping away the euphemisms, this means that the 
government will kill all susceptible animals, domestic and wild, within 
a 10 kilometer radius of wherever the infected animal has been. 1A\33\ 
Healthy animals will be killed, whether or not the disease is fatal to 
animals or transmissible to humans. If the disease spreads beyond the 
initial quarantine zone, the government will continue to expand the 
kill zones.\34\ This policy is wasteful, will drive many small farmers 
out of business, and increases the risk of terrorism by creating an 
unnecessarily high-profile target.
---------------------------------------------------------------------------
    \33\ GAO Report on Agriculture at p.13 n.12 & p. 31.
    \34\ GAO Report on Agriculture at p.31.
---------------------------------------------------------------------------
    All of these issues make the U.S. vulnerable to bio-terrorism, and 
none will be addressed by the NAIS. In fact, as noted by the GAO 
report, the concentration of our food supply makes it vulnerable to 
attack ``because diseases could spread rapidly and be very difficult to 
contain. For example, between 80 and 90 percent of grain-fed beef 
cattle production is concentrated in less than 5 percent of the 
nation's feedlots.'' \35\ The NAIS was developed by and for large 
producers, and will only lead to increased corporate control and 
consolidation of our nation's food, as small producers are driven out. 
This in turn increases our vulnerability.
---------------------------------------------------------------------------
    \35\ GAO Report on Agriculture at p.1.
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V. NAIS is not justifiable as a market program.
    The USDA has also stated that the animal identification program is 
necessary to help the export market. \36\ This rationale obviously 
applies only to food animals, not most American horses, nor our 
parakeets, parrots, llamas or alpacas, all of which are included in 
various states' NAIS plans.
---------------------------------------------------------------------------
    \36\ See Transcript of Secretary Mike Johnns Remarks to the 
National Cattlemen's Beef Association Annual Meeting_Denver, Colorado 
(Feb. 3, 2006), http://www.usda.gov/wps/portal (Home/Newsroom/
Transcripts and Speeches) Release No. 0060.06.
---------------------------------------------------------------------------
    With respect to food animals, the issue of the export market could 
easily be addressed by a voluntary program, supported by the affected 
meat exporters. Such a program would allow the market to determine how 
valuable it is to track animals from birth to death. Any farmer that 
wishes to export animals or food to other countries could enroll in the 
program. In turn, exporters could refuse to buy from anyone who was not 
also enrolled in the tracking program. Interestingly, the U.S. imports 
significantly more beef than it exports, \37\ raising a question as to 
the true value of the export market to the economy as a whole.
---------------------------------------------------------------------------
    \37\ http://www.ers.usda.gov/data/meattrade/BeefVealYearly.htm
---------------------------------------------------------------------------
    From the perspective of the domestic market, this program could 
simultaneously be used to create a label that might then demand a 
premium from concerned consumers, similar to the organic certification 
program.
    Although the USDA has claimed that the program is currently 
``voluntary'' and ``market driven,'' the facts do not support this. 
USDA has spent over $130 million to develop this program, and requested 
another $33 million this year. It has provided over $45 million in 
grants to the states and tribes between 2004 and 2008 and over $5 
million to industry organizations in 2007-08. \38\ Several states, at 
USDA's urging, have either adopted or proposed mandatory portions of 
the program. This is not a market-driven program.
---------------------------------------------------------------------------
    \38\ http://www.usaspending.gov/
---------------------------------------------------------------------------
    Neither the export market nor the domestic market requires a 
mandatory program that includes every single livestock animal in the 
country. The free market should be allowed to function.
VI. NAIS has significant technological problems.
    Although the USDA has claimed that NAIS is ``technology neutral,'' 
the USDA's documents specify that RFID tags will be the means for 
identifying cattle and the Equine Species Working Group has similarly 
specified that microchips will be the default means for identifying 
horses. \39\ RFID technology, like any electronic device, is subject to 
problems that do not exist with traditional identification methods such 
as branding or tattoos. Depending on the security of the technology 
used, one can clone microchips, infect them with viruses, or reprogram 
them. \40\ The specific type of microchip recommended by the Cattle and 
Equine Species Working Groups, the ISO 11784/11785 chip, is 
particularly vulnerable to reprogramming because it is based on a 
``recipe'' that any manufacturer can follow. \41\ That recipe produces 
chips that can be programmed in the field before they are applied to 
the animals, or even reprogrammed after they are in the animal. \42\ It 
is impossible to reliably trace an animal if someone can change its 
identity at any time.
---------------------------------------------------------------------------
    \39\ Draft Program Standards at p.20; Equine Species Working Group 
Recommendations to USDA, Recommendation 13 (May 24, 2005). 
See also http://www.horsecouncil.org/equine%20id%20website/
AHC%20ESWG%20Microchip%20Paper%209.23.05.htm
    \40\ See Annalee Newitz, The RFID hacking underground, Wired, 
www.wired.com/wired/archive/14.05/rfid_pr.html; John Markoff, Study 
says chips in ID Tags are vulnerable to viruses, New York Times (Mar. 
15, 2006); In a university study in the Netherlads, a group of 
scientists showed that it was possible to create a self-replicating 
RFID virus. Rieback, M.R., B. Crispo and A. Tanenbaum, Is your cat 
infected with a computer virus?, Vrije Universiteit Amsterdam, Computer 
Systems Group.
    \41\ See Draft Program Standards at p.20; Equine Species Working 
Groups Recommendation, Recommendation 13 (May 24, 2005))
    \42\ For example, an ad in a Swedish newspaper stated: ``We offer a 
new chip service. We will change the ID number of the `Kennel club' 
type chip according to your wishes. Inexpensive. Easy. Fast. Total 
discretion. Also sale of ISO programming units.'' Sveriges Storsta 
Morgontidning (Feb. 18, 1998). In 1998, ISO received a formal petition 
calling for revisions or suspension of the standards, and identifying 
multiple flaws in the ISO 11784/85 standard, including the lack of 
unique ID codes. See letter from Gosstandrat of Russia, Committee of 
Russian Federation for Standardization, Metrology and Certification, to 
Rudolf Zens, Secrteary, SC 19 (Mar. 2, 1998) at http://
www.rfidnews.com/images/3-2-98.gif. See also The Controversial ISO 
11784/85 Standard, ISO 11784/85: A Short Discussion, at 
www.rfidnews.com/iso_11784short.html. ISO 11784/85 ``Standard'' with 
Blemish: A discussion of the ISO standard for RFID: its provenance, 
feasibility and limitations at www.rfidnews.com/iso_11784.html (website 
last checked July 1, 2006).
---------------------------------------------------------------------------
    Significantly, the ISO 11784/85 chip is not the type of microchip 
that has been generally used in horses, dogs, or cats in the United 
States for private purposes, and it emits on a different frequency, 
134.2 kHz, rather than standard 125 KHz. Thus, most of the scanners and 
microchip readers in the U.S. today will not read or even detect these 
ISO chips. Every animal handling facility will have to buy expensive 
new scanners in order to comply with the USDA- and ESWG-recommended 
technology.
    The problems with the microchips and readers are only the 
beginning. The USDA has set out its vision of multiple public and 
private databases, capturing all of the reportable ``events'' for every 
animal in the system, with the USDA creating a metadata portal to use 
for its purposes. \43\ The technological aspects of setting up such 
huge databases are daunting. Along with the technological requirements, 
there will be literally hundreds of millions of opportunities for human 
error in this system. Moreover, integrating databases is far from a 
simple task. Indeed, despite the emphasis on inter-agency cooperation 
since 9/11, the GAO's 2005 report on agriculture and terrorism noted 
that the federal government still had not integrated its own databases. 
\44\
---------------------------------------------------------------------------
    \43\ USDA, Integration of Private and State Animal Tracking 
Databases with the NAIS (released Apr. 6, 2006).
    \44\ GAO Report on Agriculture at p.7-9.
---------------------------------------------------------------------------
    The technology companies that make microchips, software, and manage 
databases could make billions of dollars under NAIS. Yet, there is no 
evidence that they could deliver reliable 48-hour traceback of unique 
animal identification.
VII. NAIS will impact the entire economy, for the benefit of a handful 
        of corporations.
    The ultimate cost of the NAIS goes beyond the billions in direct 
costs discussed above. Some people who currently own animals will 
choose to sell or slaughter their animals rather than submit to such an 
intrusive government program or to violate their religious beliefs. 
Many other animal owners will be forced to sell because of the 
expensive and time-consuming requirements. The USDA estimates that 
there are approximately 1.4 million premises with livestock in the US. 
While this number is daunting enough, it significantly underestimates 
the true numbers of people who will be affected. USDA's estimate is 
based on who responded to the 2002 Agriculture Census, which excludes 
millions of horse owners, homesteaders, and those who keep livestock as 
pets. In fact, Massachusetts reports that it has already registered 
twice as many properties as had been reported under the census! And 
even the USDA census reflects the fact that the majority of animal 
owners are small farms and ranches, not large commercial operations 
that can pass on the costs of the program.
    If a significant portion of livestock owners dispose of their 
animals, or simply let their flocks and herds dwindle because of cost 
and labor under NAIS, there will be wide-reaching effects throughout 
the economy. Businesses that sell feed and supplies to small producers 
may go out of business. Local feed mills may also close. Real estate 
prices could be depressed even more as large numbers of rural land 
parcels are put up for sale.
    While many people will suffer severe economic burdens under the 
NAIS, the large agri-business and technology companies will profit from 
the increased export of food products and massive demand for 
microchips, software, and databases. These companies played a key role 
in developing the NAIS. For example, executives for large technology 
companies such as Global Vet Link sit on the board of directors of the 
NIAA, the trade group that established the working groups in 2002. 
Other entities who are proponents of NAIS will benefit from managing 
the databases, such as the associations (i.e. NCBA and American Farm 
Bureau) that have joined together to form the United States Animal 
Identification Organization (USAIO) to manage the ``industry-led animal 
movement database.'' \45\
---------------------------------------------------------------------------
    \45\ Animal Identification, Government Affairs Center, National 
Cattlemen's Beef Ass'n (Apr. 3, 2006) at http://hill.beef.org/
newview.asp?DocumentID=15053.
---------------------------------------------------------------------------
VIII. NAIS will burden citizens' property rights and civil liberties.
    If the state implements the program on a mandatory basis or using 
coercive methods, the NAIS imposes heavy burdens on people's freedoms 
and rights, raising multiple Constitutional issues.
    The NAIS will establish a huge, permanent database of citizens' 
real property (the homes and farms where animals are kept) and personal 
property (the animals themselves), and potentially make it criminal to 
own those animals without registration of farms and animals. 
Individuals will be required to report each animal's movements, every 
sale, and every slaughter. Since animals do not move themselves, this 
means reporting the individuals' own movements. Ownership of livestock 
is a traditional activity that has been practiced throughout history 
without government surveillance. There is no more justification for 
imposing reporting requirements on animal owners than on the owners of 
any other common property, such as tools. Moreover, this plan will 
heavily burden individuals' ability to raise food for themselves and 
their families. The NAIS will therefore burden people's Fifth and 
Fourteenth Amendment rights.
    Further, having collected information on people's private homes and 
property, the NAIS fails to protect this information. If the 
information is held by the government, individuals face massive 
intrusion into their lives and, potentially, the use of the information 
for taxing and other purposes. If the information is held by private 
companies, individuals will be vulnerable to competitive misuse of 
their information or sale of their information, a serious problem that 
has already occurred in many other areas.
    The NAIS also poses First Amendment problems. Some groups, such as 
the Amish or Mennonites, have well-known religious objections to 
registrations and technological devices. Other groups also believe that 
they are prohibited from participating in this program due to 
scriptural prohibitions.
    The proposed system may also violate the Fourth Amendment's 
protections against unreasonable searches and seizures, the equal 
protection clause, and constitutional restrictions on the taking of 
property.
Conclusion
    Most of the people who will be impacted by NAIS are still unaware 
of it. When voters who own livestock, horses, and poultry find out the 
burdensome nature of the program, they will wonder why Congress created 
it, or allowed the USDA to implement it without clear statutory 
authority. We urge you to support your voters' interests by halting the 
NAIS.
    NAIS is an intrusive, burdensome program that will not provide any 
real protection against animal disease or bioterrorism. The program is 
not justifiable on either philosophical grounds or a cost-benefit 
analysis. To the extent that tracking is a benefit to the market, it 
should be a voluntary, market-driven program paid for by the 
participants.
            Sincerely,
Judith McGeary, Esq.
Executive Director
Farm and Ranch Freedom Alliance
8308 Sassman Rd
Austin, Texas 78747
Phone: [REDACTED]
Toll-free: [REDACTED]
[REDACTED]
    www.farmandranchfreedom.org
Submitted Letter From Farm and Ranch Freedom Alliance, Texas Landowners 
            Council, and The National Family Farm Coalition
                              Attachment 
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       Submitted Statement of The National Family Farm Coalition
    We welcome the opportunity to submit this statement to the 
Subcommittee as you review the National Animal Identification System 
(NAIS). The National Family Farm Coalition represents family farmer and 
rural advocacy organizations in 30 states. We strongly urge USDA to 
reconsider the NAIS program in light of the significant failures to 
date in implementing NAIS and its large cost burdens to farmers and 
ranchers already struggling with the current economic crisis.
    USDA first issued a ``Draft Strategic Plan'' on NAIS in 2005 that 
called for mandatory animal identification and reporting of animal 
transport by 2009. An outcry from farmers and ranchers across the 
country over the far-reaching impacts of this program has delayed 
implementation, with USDA claiming the program was ``voluntary'' while 
funding State Cooperative Agreements and using other coercive tactics, 
such as directing veterinarians to enroll customers in NAIS. The latest 
action by USDA is a proposed rule issued in January 2009 that mandates 
the NAIS Premises Identification Number (PIN) as the only means of 
identifying properties for USDA animal health programs. The proposed 
rule also mandates the use of NAIS for ear tags using official animal 
identification numbers (AIN). The proposed rule affects cattle, bison, 
sheep, goats and swine directly. The National Family Farm Coalition 
objects to USDA's continued attempts to force this program on producers 
and believes a mandatory NAIS system will not address animal disease 
but will further burden farmers and ranchers financially, posing a 
severe threat to farmers' livelihoods..
Current Animal Disease Programs Effective
    NFFC believes current disease programs for tuberculosis, 
brucellosis, Johne 's disease and scrapie have proven effective and 
financially practicable for farmers. Such programs currently allow for 
low-cost metal tags and/or tattoos not tied to the NAIS Animal 
Identification Number (AIN). Existing animal disease programs have done 
an excellent job in almost eliminating brucellosis and drastically 
reducing incidents of TB. Traceback capability in the event of disease 
outbreaks is available through current branding, ear tag and tattooing 
programs. NFFC fails to understand why an expensive, untested, 
complicated new bureaucracy is necessary to address animal disease 
outbreaks. Free trade agreements have also allowed livestock in from 
countries that do face animal disease problems, such as TB in Mexico 
and BSE from Canada, which NAIS does not address. U.S. efforts to 
control animal disease should focus on disease prevention instead of 
investing valuable resources in disease management.
Costs to Family Farmers
    Most disturbing to family farmers is USDA's refusal to release 
cost-benefit analyses of the NAIS program, in marked contrast to the 
numbers developed by USDA during the debate over country-of-origin 
labeling. By requiring all AIN ear tags to conform to the 840 prefix, 
USDA is inevitably allowing for the requirement of expensive RFID tags 
as the only ear tag technology permitted in animal disease programs. 
This places high financial costs on farmers who must pay for the tags, 
technology readers and software necessary to comply with the NAIS 
program. A Kansas State University analysis presented an average cost 
of $15.90 per cow for producers with fewer than 100 head of cattle. 
Producers with more than 400 cows would face a cost of $6.14 per head. 
The United States has lost thousands of farmers and ranchers since 1960 
due to low prices and industry consolidation. NAIS will only fuel this 
unfortunate trend and make it virtually impossible for small and mid-
size farms to compete and survive. Furthermore, producers raising 
grass-fed beef or sustainably raised hogs and other livestock will find 
the costs of NAIS prohibitive. NAIS is an unfair tax on America's 
producers. USDA has failed to provide any evidence that the program 
will be cost-effective and has instead spent over $130 million on the 
program with very little to show for it, other than intense producer 
opposition.
    Additionally, the recent proposed rule by USDA explicitly overrides 
state and local laws. Four states have passed anti-NAIS legislation: 
Missouri, Kentucky, Arizona and Nebraska. More than a dozen other 
states are considering such legislation. Missouri state law explicitly 
prohibits the mandatory enrollment of producers into NAIS without 
approval by the state legislature. Such widespread opposition from 
diverse states shows why USDA needs to reconsider whether NAIS is truly 
the most effective way to address animal disease concerns. Nonetheless, 
USDA has continually ignored the views of states and pushed onward with 
implementation.
Unfair Advantages to Industrial Operations
    A further advantage under NAIS is granted to confined animal 
feeding operations (CAFOs): they may use ``Group Lot'' numbers for 
thousands of animals since they do not co-mingle with other species. 
This gives an unprecedented advantage to CAFOs over diversified farmers 
and those who do not raise animals in confinement. Many studies 
indicate that diseases are far more prevalent among animals raised in 
CAFOs and that E. coli contamination can be traced mainly to industrial 
livestock operations. It makes no economic sense to assign large 
livestock operations group/lot identification numbers (GINs) while 
separate AINs are required for diversified, smaller producers.
NFFC Summary of NAIS Program
    USDA has not provided adequate evidence to show how 
``standardization'' and ``uniformity'' are needed to improve current 
systems that have worked to date. NAIS is an unprecedented bureaucratic 
undertaking that has proved unsuccessful in several countries, 
including Australia; tag loss rates and inaccurate producer database 
accounts have severely impacted their livestock industry. America's 
family farmers deserve a more honest appraisal of the NAIS program and 
the expensive threat it poses to farmers struggling in the current 
economic climate.
    We appreciate the opportunity to submit testimony and urge USDA to 
allow for more producer input into the best means to address animal 
disease and the flawed premises of NAIS. Attached is a letter signed by 
60 diverse organizations opposing the continued appropriations for 
USDA's NAIS program that was included in the recent Omnibus 
Appropriations bill.
                                 ______
                                 
 Submitted Material Submitted By Kevin Kirk, Special Assistant to the 
Division Director, Michigan Department of Agriculture, Animal Industry 
                                Division
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                                 ______
                                 
 Submitted Material Submitted By Shane Kolb, DRA Livestock Team Chair, 
                          Dakota Rural Action
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  Submitted Material Submitted By Russell Libby, Executive Director, 
        Maine Organic Farmers and Gardeners Association (MOFGA)
    (adopted August 10, 2006)
    The Maine Organic Farmers and Gardeners Association (MOFGA) 
strongly opposes the National Animal Identification System (NAIS) 
proposed by the U.S. Department of Agriculture (USDA).
    The program proposes that livestock farmers register their 
premises, identify all newborn animals and flocks, and track movements 
of new animals from one owner to another. It is intended to cover every 
place where farmers keep livestock--from huge feedlots and confinement 
dairies with 20,000 animals or more, to small backyards where families 
keep three chickens to produce fresh eggs for themselves.
MOFGA opposes this program because:
    1. It will force people who are not part of the national and 
        international food distribution system to participate in a 
        registration and tracking program that, ultimately, will 
        discourage more people from producing food for themselves and 
        their communities. The registration, tagging, and tracking 
        systems will require everyone with animals to file paperwork 
        regularly with state and/or Federal agricultural authorities. 
        The proposed system will treat everyone who has any livestock 
        the same--as if everyone ships his or her animals into 
        anonymous, national markets, even if the animals never leave 
        the farm.

    2. The proposed tracking systems will force farmers to bear most of 
        the costs of participation, for limited public value. Farmers 
        will pay for tags and identification systems, and will be 
        responsible for the costs of recordkeeping and submitting 
        information on animal movements. Ultimately, this will raise 
        food costs.

    3. The approach focuses on tracking diseases after the fact, rather 
        than disease prevention and animal health. There is no disease 
        prevention aspect in the system as proposed. The goal of the 
        program is to be able to trace back diseases to their origins--
        not an altogether bad goal. The problem is that it appears to 
        be the only goal. Too many public veterinary resources already 
        are directed to these identification systems, rather than 
        disease prevention.

    4. It is unworkable at the comprehensive scale envisioned. Maine's 
        Department of Agriculture, Food and Rural Resources 
        (Department) lacks the human, technical and data resources to 
        manage this program effectively. For example, Maine, as most 
        other states operates a voluntary scrapies certification 
        program. Scrapies is a degenerative disease of sheep, similar 
        to mad cow disease (however there is no scientific evidence 
        that Scrapies poses any risk to human health). Participating 
        farmers tag all their animals, and the Department checks each 
        flock regularly for signs of the disease. Farmers track sales 
        to and from the participating farms, and maintain records of 
        sheep from flocks that appear to be scrapies-free. The USDA 
        estimates that there are 600 farms in Maine with at least one 
        sheep, but only 140 farms participate in the Maine Sheep 
        Breeders' Association, and even fewer are enrolled in the first 
        phase of the Scrapies program. If Maine lacks the resources to 
        find, identify, and work with all of the sheep farmers in 
        Maine, how will the state do that for all of the animals and 
        species targeted by the NAIS?
MOFGA's Approach to Animal Health
    Society must rethink the way it tackles animal health problems, and 
it must empower farmers to help find solutions. The Department must 
support these efforts directly. Any animal wellness program implemented 
to help prevent the spread of an animal disease epidemic should be 
voluntary, confidential, provide appropriate exemptions for farms not 
participating in interstate commerce, and emphasize a continued 
investment in livestock health. This will require the active 
participation of a wide range of farmers, as well as more technical 
veterinary support from the state.
Appropriate Actions
    1. The Department should hire at least one additional veterinarian 
        with the primary responsibility of helping all livestock 
        producers recognize the benefits of closely and continually 
        monitoring the health of their animals.

    2. In the event of a disease outbreak (e.g., avian influenza), 
        MOFGA would notify its members, via both e-mail and letter, of 
        the issues and how to help prevent further spread of the 
        disease. MOFGA would encourage livestock farmers to contact the 
        state veterinarian's office for advice.

    3. Working with the Department and Cooperative Extension Offices, 
        MOFGA will provide its members with excellent record-keeping 
        systems for identifying animals and using that information to 
        improve the general health and productivity of animals on the 
        farm.

    4. MOFGA will provide examples of record-keeping systems that allow 
        farmers to track both the source and disposition of animals 
        brought onto their farms and sold from their farms.

    5. MOFGA's Livestock Specialists will encourage all farmers to 
        follow the principles of organic livestock health, and work 
        with farmers to identify breeds and lines that succeed and 
        thrive in this bioregion under organic production systems.

    6. Fundamentals of animal health also require that animals be 
        treated humanely. MOFGA staff members will integrate these 
        principles into their work with all livestock producers, 
        regardless of the scale of production.

    7. MOFGA encourages farmers to work closely with all livestock 
        health resources and to monitor closely the health of all the 
        animals on their farms.
                                 ______
                                 
Submitted Material Submitted By Todd Mortenson, President, South Dakota 
                        Cattlemen's Association
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                                 ______
                                 
   Supplemental Material Submitted By Margaret Nachtigall, Executive 
        Director, South Dakota Stockgrowers Association (SDSGA)
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                                 ______
                                 
 Supplemental Material Submitted By R.M. ``Max'' Thornsberry, D.V.M., 
                   President of the Board, R-CALF USA
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 Submitted Material Submitted By Deborah Stockton, Executive Director, 
     National Independent Consumers and Farmers Association (NICFA)
March 4, 2009
Introduction:
    The United States Department of Agriculture (USDA) has spent 
considerable taxpayer money and physical resources on the ``National 
Animal Identification System'' (NAIS), acting without Congressional 
mandate and creating widespread opposition from farmers, ranchers, 
livestock owners, homesteaders, consumers and agriculture supply 
businesses-a massive grassroots response that NAIS is a bad idea, 
unwanted, and not grounded in the reality of farm life, animal 
husbandry or healthy food.
What is the purpose of Animal ID?
    A system of animal identification for disease traceback, sales, 
health, and breeding recordation has been in continuous use in the 
United States for well over a century. Refined during its extensive 
use, the current system, without NAIS components, has and does work 
well. Why create NAIS?
What is the purpose of NAIS?
    The USDA's NAIS would require ``premises registration'' of any 
property where a single farm animal is kept; Radio Frequency ID tagging 
or microchipping of every animal; and reporting of every animal's 
movements presumably within 24 hours to a federal database under 
penalty of severe fine, confiscation of animals or both. NAIS proposes
      a national disease response network built to protect your 
animals, your neighbors, and your economic livelihood against the 
devastation of a foreign animal disease outbreak.

    FACT: The USDA already has in place the network they claim NAIS 
will supplant.

    The USDA's claim that ``modern'' technology will enable 48-hour 
traceback during disease outbreak is untenable. In reality, NAIS will 
not prevent disease because it does not address the cause of disease. 
Traceback can help track the movement of disease, but if a cataclysmic 
foreign animal disease outbreak occurred, NAIS will not improve on the 
current system for containment and quarantine.
Costs of NAIS
    The monetary and time costs to implement NAIS are prohibitive for 
any but the largest industrial livestock producers. Small farms, that 
make up the vast majority of agricultural holdings, could not comply 
and sustain their operations. Farming in America would reduce to large 
industrial operations. Food costs would increase as monopolies 
increase. Food borne illness, statistically a product of industrial 
production and processing, would increase. Rural economies would 
suffer.
    During this economic downturn, when small farms are the fastest 
growing agriculture sector, these expanding sources of employment and 
local food production would fail. At the same time, taxpayer burden 
would increase to pay for government agencies to oversee and enforce 
NAIS.
Cost of NAIS to small farmers and livestock owners
    Partial estimated costs for NAIS according to the spreadsheet for 
an RFID system for cattle developed by Dhuyvetter and Blasi of Kansas 
State University in 2003 (wand reader price updated for 2009).
      400 head or more of cattle: $6.69 per head

       100 head of cattle: $18.07 per head per year.

      25 head cattle: $63.61 per head

    NOTE: Cost for small producers is almost 10 times that for large 
producers.
      Net Returns on Cow--Calf operations projected for 2009-
2010 per cow: $-24.25, -47.92 \1\. Combined with NAIS costs: projected 
net loss of $87.86-- 111.53 per cow/calf. This does not include the 
time cost of implementing NAIS.
---------------------------------------------------------------------------
    \1\ FAPRI 2007 U.S. and World Agricultural Outlook January 2007 
FAPRI Staff Report 07-FSR 1 ISSN 1534-4533 Food and Agricultural Policy 
Research Institute Iowa State University University of Missouri-
Columbia Ames, Iowa U.S.A., p. 121 www.fapri.missouri.edu/outreach/
publications/2007/OutlookPub2007.pdf
---------------------------------------------------------------------------
    Results of 2007 US Census of Agriculture for percentage of small 
producers, who would be most impacted by NAIS.
      90% of beef producers own fewer than 100 cattle each

      70% of pork producers own fewer than 100 hogs

      91% of sheep producers own fewer than 100 sheep

      93% of egg producers own fewer than 100 poultry.
    These figures correlate with the conclusions of Buhr and Resende-
        Filho in their presentation at the 2006 International 
        Association of Agricultural Economists Conference. Their total 
        projected cost of NAIS per quarter for just the beef and pork 
        sector was $27.5 million, that far outweighed the projected 
        increase in revenue of $10.42 million. They concluded with this 
        statement: ``If the defense of the NAIS is based on its effect 
        on the demand side of the market for meats it is expected that 
        the US Federal government will need to pay for a great part of 
        the costs with the NAIS; otherwise the NAIS is likely to be 
        economically unfeasible in the US.'' This statement is more 
        relevant in 2009 with the economic challenges that ALL small 
        producers face.
Case: A small producer/homesteader (actual example)
    Sabo Family in Southern Illinois. Livestock: 9 milk goats, 10 goat 
kids, 2 goat bucks, guardian donkey, 2 feeder steers. Provides food for 
3 adults, 4 children, along with \1/4\ acre garden, 80% of family food.
      Operating cost FY 2008: grain, supplements, hay, 
veterinarian expenses: $3,007

      Return on investment: 275 lbs livestock protein, 380 gal. 
goat milk, 100 lbs soft cheese (I.e. Cream Cheese), 130 lbs hard cheese 
(Cheddar, etc), organic matter to maintain garden production.

      Current market cost of items produced for personal use: 
$16,569.95.
    Breakdown:
      Protein @ $5.22 per pound ($1435.50): Goat Milk @$3.86 
per quart ($5,867.20); Soft Cheese @ $21.92 per pound \2\ ($2,192), 
Hard Cheese @ $54.43 per pound \3\ ($7,075.25)
---------------------------------------------------------------------------
    \2\ Current 3/1/9 market source Whole Foods, St. Louis, MO data 
used @ $21.92 per pound
    \3\ Sourcing price-shipping required as no local sourcing for this 
product: http://www.amazon.com/Sterling-Goat-Milk-Cheddar-Cheese/dp/
B0000DG6XY

      Projected additional cost of NAIS enrollment: $4,024 
initial investment \4\ with annual cost fluctuating $2,871--$3,981 
Dependant upon livestock ``events,'' database management costs 
increases, and as yet unknown producer participation cost requirements 
for the ``Free'' National Animal Identification System (renewal, 
reporting, redress).
---------------------------------------------------------------------------
    \4\ http://www.freetofarm/extras.html: Appendix A-2.
---------------------------------------------------------------------------
    Conclusion: Operating costs first year would increase 133.82%. 
Combined with economic downturn in the United States economy, increased 
feed costs due to redirection of feed grain to Biofuel development and 
increased farm costs to produce hay, mandatory enrollment would be 
counter-productive to the individuals involved due mainly to cost 
constraints. Basically, it would be impossible.
    This producer would be required to purchase of an additional 
$16,569.95 of foodstuffs on an annual basis. Point of interest: The 
annual Mortgage payment of this individual is $13,584. The amount spent 
for food on an annual basis would exceed the Mortgage cost. This does 
not include the loss of supplemental organic matter to maintain garden 
plot for production of vegetable and fruit products. Author was unsure 
of where to source compost.
Cost to Rural and Local Economies
      As small farms disappear, counties and states will 
experience loss of taxes

      Stores selling local farm products will have to 
``outsource'' to non-local

      Farm support businesses will lose their primary customer 
base
Cost to Consumers
    Case: Diederichs. Family of six in the suburbs of Chicago who 
sources much of their family food from local farms, farmer's markets 
and neighbors. ''I know that every particle of my family's hamburger 
came from the same healthy, local steer. It is impossible to put 
monetary value to peace of mind''_Sue Diederich, mother
      2008, 1 year's supply of beef for family of six: $1115.41 
(a half steer)

      NAIS impact on farmer expected to increase that amount to 
$2000.00 \5\
---------------------------------------------------------------------------
    \5\ USDA figures--profit per calf: http://www.ext.nodak.edu/
extnews/newsrelease/2003/061903/02beefta.htm. Note: Mean off 20% lowest 
and 20% highest for inputs: $417.50 inputs cow/calf, same for sale of 
500 pound calves: $405.00 so already at a loss of $ -12.50 for calf 
growers in '08. Add the cost of id to this and realize 30% of our beef 
comes from herds with less than 50 head and you can see the problem 
immediately. Also http://www.fapri.missouri.edu/outreach/publications/
2007/OutlookPub2007.pdf Note: page 137 shows a loss of -$24.25 for 2009 
and a profit of $9.20 for 2008
---------------------------------------------------------------------------
    NOTE: The same increase applies to chicken, lamb, turkey, pork, 
eggs, milk and other dairy products fish and shellfish \6\
---------------------------------------------------------------------------
    \6\ NAIS Draft Business Plan: http://animalid.aphis.usda.gov/nais/
naislibrary/documents/plans_reports/
TraceabilityBusinessPlan%20Ver%201.0%20Sept%202008.pdf. Also NAIS User 
Guide: http://animalid.aphis.usda.gov/nais/naislibrary/documents/
guidelines/NAIS-UserGuide.PDF
---------------------------------------------------------------------------
    Impact on garden and produce:
      Quality produce depends on natural inputs, especially 
manure of nearby livestock farms. Costs for manure will also increase, 
if it can be sourced locally at all. Small produce farms will lose 
their sources or leave the business.
    Impact on Non-Food Consumer Goods:
      All clothing and other items made from animal hides or 
fibers will increase in price.

      Some 1500 different consumer products manufactured with 
milk casein as an ingredient_adhesives to paint and pharmaceuticals 
(Venus Casein Products \7\) will increase in price.
---------------------------------------------------------------------------
    \7\ Venus Casein Products, Inc: http://www.venuscasein.com/

      Vaccinations for childhood diseases, flu. pneumonia, and 
more contain ingredients (legally necessary in some cases)from cattle 
and/or chickens (Vaccine Excipient \8\) that will increase in price
---------------------------------------------------------------------------
    \8\ Vaccine Excipient & Media Summary, Part 2--Excipients Included 
in U.S. Vaccines, by Vaccine; http://www.cdc.gov/vaccines/pubs/
pinkbook/downloads/appendices/B/excipient-table-2.pdf
---------------------------------------------------------------------------
    Consumers with Extraordinary Burden From NAIS:
      Senior citizens, many on fixed incomes will become more 
dependent upon all levels of government for assistance. Single parents, 
also already economically disadvantaged, will do the same.
    Conclusion: With U.S. population increasing daily, demand will 
increase as supply decreases, putting extraordinary pressure on the 
remaining farmers, affecting all consumers, and government agencies at 
all levels, and forcing a remedy for a situation that should never have 
happened. Given the economic situation, many American families will be 
imperiled by this program.
Problems with similar systems in other countries
    In Australia
      Costs to Sale Barns: In excess of $30,000 even with 
subsidizing \9\
---------------------------------------------------------------------------
    \9\ http://www.abc.net.au/news/stories/2006/07/14/1686569.htm

      Excessive Fines:
       Stephen Blair, cattle producer, fined $17,300 for 
incorrectly tagging 177 head of cattle: Mr Blair was fined $1800 under 
the Stock Diseases Act and ordered to pay court costs of $15,500. \10\
---------------------------------------------------------------------------
    \10\ http://theland.farmonline.com.au/news/nationalrural/livestock/
Cattle/cattle-producer-ordered-to-pay-17300-for-nlis-tag-breach/
798558.aspx
---------------------------------------------------------------------------
       $500 fine for eight cattle lacking proper identification 
\11\
---------------------------------------------------------------------------
    \11\ http://www.abc.net.au/news/stories/2006/10/16/1765737.htm
---------------------------------------------------------------------------
    In the UK
      Healthy Herd of 567 Head Destroyed for Clerical Reasons
    In March, 2007 Cheshire, UK dairy farmer David Dobbin's prize-
winning registered dairy herd was destroyed by DEFRA for undefined 
``irregularities'' in ``some'' paperwork regarding the identification 
of his cattle under the EC system. DEFRA confiscated the cattle 
passports which are to bear the eartag number of the individual animal 
on the RFID document, then confiscated his cattle telling Dobbin he had 
48 hours to positively identify the animals, no longer in his 
possession, via DNA or they would be destroyed. As per EC regulation 
494/98, no indemnity was paid. The herd was valued in excess of 500,000 
pounds and was destroyed in March of 2007. \12\
---------------------------------------------------------------------------
    \12\ http://www.telegraph.co.uk/news/uknews/1545862/Christopher-
Bookers-notebook.html
---------------------------------------------------------------------------
Premises Registration and RFID Tagging:
      Enrollment in NAIS requires a landowner to register his 
property as a ``premises,'' by signing a contract of unspecified 
duration and unclear legal meaning. Most farm owners object to this and 
refuse to enroll.

      The ``840'' registration prefix for RFID tagging is a 
U.S. designation. NAIS is an international system.

      The database for premises registration for the state of 
Wisconsin, and possibly for the entire country, is being held in 
Canada. \13\
---------------------------------------------------------------------------
    \13\ Obtained by a producer in Wisconsin under Open Records law, 
pursuant to WI open records statute. Available by request. E--mail 
[email protected].
---------------------------------------------------------------------------
    Insofar as the database exists outside the jurisdictional authority 
of the United States, how can producers ascertain the sanctity of this 
information when the 1974 Privacy Act does not extend beyond U.S. 
borders? Who has access to this information? We would never be able to 
determine that information.
NAIS Enrollment:
      USDA alleges 33/% enrollment of U.S. livestock holding 
properties

      Actual number closer to 9.7%
    As of March 2009 the USDA alleges over 33% of livestock holding 
properties are registered as ``premises'' in NAIS. Many of these are 
multiple unit enrollments, livestock auction facilities that own no 
cattle, custom feed lots, rodeo arenas, USDA employees, state DOA 
extension agents, livestock owners who are unaware they are enrolled 
and producers who are in the process of ``Opting Out.'' Some youth have 
been forced to ``enroll their property'' before a single goat or lamb 
could qualify for government controlled state fair competition. Western 
Horseman Magazine has the largest circulation of any livestock 
publication in the world. In their online poll, June of 2008, based on 
thousands of votes, revealed over 93% of animal owners, if given a 
choice, would refuse to comply with any component of NAIS.
      USDA press releases and staff state a number of 1.4 
million livestock raising operations exist in the US.

      The 2007 US Ag census, plus data from the American Horse 
Council, plus farms with below $1000 in annual sales bring the correct 
number to at least 3,910,022. The category with the greatest growth 
recorded in the 2007 census was cattle owners of one to nine head and 
the under $1000 income group. Small farms are growing in numbers faster 
than all others.
    Calculating the actual number of all real farms, total NAIS alleged 
enrollments minus the multiple enrollments and adding the under $1000 
income farms, the percentage of enrolled farm owners in the US is not 
33% but, in fact, less than 9.7%.
Conclusion
    The USDA has spent over $138,000,000 for state cooperative 
agreements and NAIS sign up incentive programs. Its 28 USDA branches, 
including the Farm Service Agency, County Extension offices and USDA 
licensed professionals, have dedicated untold hours to coerce new 
enrollments in NAIS. The cost to USDA per NAIS enrolled farm owner is 
well over $360 each to date.
    NAIS is the result of looking for trouble, not finding it anywhere, 
diagnosing it incorrectly, and applying costly, bogus remedies. Never 
has such a USDA grandiose plot been attempted with less user approval, 
less convincing value, and such distorted numbers used to spin the 
program.
Solution
    Industrial agriculture created NAIS to benefit industrial 
agriculture. We support private industry creating and maintaining a 
system like NAIS for its own use and benefit. If the system is cost 
effective, it will pay for itself. If it is not cost effective, forcing 
small farmers and taxpayers to pay for it makes no sense.
    Contact:
    Deborah Stockton, Executive Director
    National Independent Consumers and Farmers Association (NICFA)
    www.NICFA.org [email protected] [REDACTED]
  Supplemental Material Submitted By John R. Clifford, D.V.M., Deputy 
Administrator, Veterinary Services, Animal and Plant Health Inspection 
       Service, U.S. Department of Agriculture, Washington, D.C.
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                                 Submitt
                                 ed 
                                 Questio
                                 ns____
                                 
Response from John Clifford, D.V.M., Deputy Administrator for 
        Veterinary Services and Chief Veterinarian, Animal and Plant 
        Health Inspection Service, U.S. Department of Agriculture
Questions Submitted by Hon. Walt Minnick a Representative in Congress 
        from Idaho
    Question 1. Dr. Clifford, you testified that there are challenges 
associated with protecting producers' privacy in the development and 
implementation of a national identification system. What authority does 
the Department of Agriculture have to protect this sensitive 
information and how can we safeguard this information from being 
subject to the Freedom of Information Act if the program is mandated?
    Answer. USDA takes National Animal Identification System (NAIS) 
privacy issues very seriously. In developing NAIS standards, we 
intentionally limited the type and quantity of information collected 
and maintained by the Federal government. This is the most effective 
step we can take in order to help protect producer privacy.
    USDA generally treats producer information as confidential. The 
Freedom of Information Act (FOIA) does, however, compel us to release 
information that is not subject to a FOIA exemption. To date, USDA has 
applied FOIA exemptions to withhold NAIS producer information when 
requested, and will continue to apply appropriate exemptions to protect 
personal information and confidential business information provided by 
NAIS participants, consistent with law and the Administration's 
recently announced policies regarding FOIA.
    Question 2. If the NAIS were made mandatory, would backyard poultry 
flocks and every single animal be required to participate?
    Answer. To be successful, NAIS must include animals moving in 
commerce because of their potential to spread disease. If NAIS were 
made mandatory, we would not require_but certainly encourage_producers 
keeping backyard poultry flocks and other animals not moving in 
commerce to participate. At a minimum, we would strongly encourage 
these producers to register their premises, since animal disease does 
not discriminate on the basis of herd or flock operation size or 
whether a producer sells animals commercially or raises them for 
personal use. With premises registration information, we can 
proactively contact these producers early on in a disease situation, so 
that they can take steps to protect their animals.
    The three bovine spongiform encephalopathy (BSE) tracebacks in the 
United States are important examples of why we need a high 
participation rate of animals in commerce. In tracing back these three 
cows, we ran into a number of dead ends and in multiple cases, we just 
could not trace back an animal to its herd of origin, which is key in 
properly investigating BSE cases. Having these premises and animals 
identified would have benefitted the government and producers 
tremendously, allowing a more swift and targeted response and use of 
resources.
    Question 3. With respect to premises registration, beef cattle 
premises have shown to be the most difficult to register, while the 
dairy cattle, poultry, swine, sheep, and goat markets have had a much 
greater participation in the registration effort. What do you think 
accounts for this disparity?
    Answer. Various groups within the beef cattle industry have voiced 
a number of concerns with NAIS that we believe contribute to their low 
participation rate, currently estimated at 25%. One of the greatest 
concerns we have heard is with the costs associated with a mandatory 
NAIS. Over 90 percent of the industry costs for such a system would be 
associated with the cattle sector. This is largely due to the 
individual animal identification required, whereas swine, sheep, goats, 
and poultry can often be sufficiently traced using premises and group 
lot identification. Additionally, cattle typically move more times 
during their lifespan than other livestock species.
    Concerns have also been raised about the use of producer 
information. Some have concerns that their information will be released 
and used to their detriment, such as for liability purposes related to 
food safety tracebacks, as we move forward with this critical program.
    We believe strongly that we must work collaboratively with industry 
to address their concerns and move forward with an effective 
NAIS_whether it be a mandatory or voluntary system. In fact, on April 
15, 2009, the Secretary held a roundtable with stakeholders 
representing the full spectrum of views on NAIS. This meeting kicked 
off a larger listening tour to gather feedback on concerns and, more 
importantly, to identify potential solutions to help USDA and the U.S. 
livestock sector move forward with the program.
    Question 4. What studies have been done demonstrating that NAIS 
will reduce the occurrence or scope of animal disease outbreaks?
    Answer. I would first like to clarify that the purpose of NAIS is 
not to reduce the occurrence of an animal disease outbreak, but rather, 
to reduce the scope of disease spread by increasing traceability and 
thereby allowing for a swifter and more precise response. Several 
studies have looked at foreign animal disease outbreaks and their 
resulting effects, and have found that a quicker response equates to a 
significant decrease in negative effects from an outbreak. I will 
briefly discuss a few of these studies.
    In a study that examined the impacts of a hypothetical foot-and-
mouth disease outbreak in California, researchers found that a shorter 
traceback time is key to reducing the scope of a disease, as indicated 
by the study's finding that in its simulation, ``a one-week delay in 
starting depopulation could increase the proportion of infected 
premises from 18% to more than 90%.'' \1\ An additional study cited 
``prompt identification and elimination of affected herds'' as a major 
factor influencing eradication of an outbreak of foot-and-mouth 
disease. \2\ A more recent study that examined the value of 
traceability in a hypothetical foot-and-mouth disease outbreak in 
Kansas found that ``as the level of surveillance and ability to trace 
cattle increases, the number of animals that have to be destroyed and 
related costs decrease.'' \3\
---------------------------------------------------------------------------
    \1\ Ekboir, J.M., L.S. Jarvis and J.E. Bervejillo. 2003. Potential 
Impact of FMD Outbreak in California, in Sumner, D. (ed.), Exotic Pests 
and Diseases: Economics, Science and Policy, Iowa State University 
Press.
    \2\ Ekboir, Javier. (1999). The Potential Impact of Foot and Mouth 
Disease in California: The Role and Contribution of Animal Health 
Surveillance and Monitoring Services. Davis, Calif.: Agricultural 
Issues Center.
    \3\ Pendell, D.L. and Schroeder, T.C. (2007). Value of Animal 
Traceability Systems in Managing a Foot-And-Mouth Disease Outbreak in 
Southwest Kansas. Kansas State University Agricultural Experiment 
Station and Cooperative Extension Service.
---------------------------------------------------------------------------
    These studies highlight the need for enhanced traceability, which 
can be achieved through increased participation in NAIS. The more 
quickly we can identify what animals and operations may be affected, 
the faster we will be able to find exposed animals and take the 
necessary steps to contain the disease. Conversely, the longer the 
process takes, the more a contagious disease can spread, potentially 
increasing the number of herds and animals involved. And, in the case 
of diseases like BSE that are not contagious, the longer it takes to 
provide definitive information about the extent of the disease, the 
longer we will see decreased consumer confidence and negative trade 
impacts. This would lead to more cost for producers, longer commerce 
interruptions with added cost to consumers, and more disruptions to 
communities and industries connected to livestock production.
    We also see significant opportunities to reduce the scope of 
domestic disease within our animal health programs. For example, of the 
199 positive cases of bovine tuberculosis identified in the United 
States between late 2003 and early 2008, over 84 percent of the animals 
did not have official USDA individual identification. As a result, USDA 
and state investigative teams spent substantially more time and money 
conducting tracebacks, including an expanded scope of an investigation 
to identify suspect and exposed animals. Additionally, the average time 
spent conducting a traceback involving 27 recent bovine tuberculosis 
investigations was 199 days. This is simply not acceptable.
    We can see the potential value added by enhancing traceability when 
we compare recent tuberculosis tracebacks of U.S. versus Canadian cows. 
Since 2006, we have completed 44 investigations of bovine tuberculosis 
positive animals. The average length of time to complete these 
investigations was 186 days. However, the average investigation time 
for two cattle that originated in Canada, which has a mandatory animal 
identification system, was only 19.5 days. Canada's unique numbering 
standard, tied to a unique premises identification, is consistent with 
our proposed standards for advancing traceability in the United States. 
Incorporation of these standards into livestock commerce will provide 
USDA with the readily-accessible, accurate information required to 
expedite disease control efforts.
    Question 5. What analysis has been conducted of current tracking 
capabilities? For example, what is the average tracking time for 
individual animals? For cases that have taken longer than average, what 
reason(s) have been identified for the slower response?
    Answer. USDA examines animal disease surveillance data, animal 
health program data, and actual animal disease investigations to 
analyze our current traceback capabilities. Current traceability in the 
poultry, swine, and sheep industries is high. However, we have 
consistently found that in the beef cattle industry, tracebacks take 
longer, cannot always be completed, and result in longer delays and 
greater costs to producers because of the industry's low traceability 
level. Traceback time varies depending on each unique situation, and is 
greatly affected by the availability of records, which can vary widely. 
Additionally, as disease risk lessens, fewer people participate in 
USDA's existing eradication programs. This means that fewer animals are 
identified and can be traced if there is a disease event. Below are 
some examples:
    Bovine Spongiform Encephalopathy (BSE) 09
    Surveillance data from July 2007 through January 2009 indicated 
        that of 72,869 primarily adult cattle, only 39% (28,558) were 
        identified with an official USDA metal ear tag. Official USDA 
        animal identification tags are individually unique nationally 
        and provide the opportunity to also associate a point of first 
        tagging, allowing for a faster traceback.

    Bovine Brucellosis 09
    USDA official brucellosis calfhood vaccination requires the 
        attachment of a USDA official animal identification tag, which 
        provides a primary means of identifying cattle for traceability 
        purposes. Program data for calendar year 2008 indicates that 
        slightly more than 3.7 million heifer calves were vaccinated, 
        out of over 20 million heifers that were eligible (based on 
        USDA National Agricultural Statistics Service data). Therefore, 
        only 18.5% of eligible heifers for brucellosis vaccination were 
        identified with nationally unique, USDA official animal 
        identification.
    Question 6. What analysis has been done to determine the specific 
data that would be important during a disease outbreak, and the 
potential for error or delay due to excessively large databases?
    Answer. USDA determined what data is needed during a disease 
outbreak based on widely agreed upon veterinary epidemiological 
principles, the agency's experience responding to animal diseases, and 
stakeholder input. It is generally understood within veterinary 
epidemiology that it is vital to have data that would identify an 
animal's origin and movements. \4\ Examination of USDA's previous 
experience in responding to animal disease events, including review of 
epidemiological investigation reports, supports that assertion. Our 
analysis defined what is needed to identify, contain, and eradicate 
livestock disease. This includes (1) the animal's identity, (2) where 
it originated, (3) what other farms it was on, (4) what other animals 
it had contact with, (5) what other farms are in the vicinity of the 
affected farms, and (6) the timeframe in which those contacts took 
place.
---------------------------------------------------------------------------
    \4\ Toma, et al., (1999). ``Dictionary of Veterinary 
Epidemiology,'' Iowa State University Press.
---------------------------------------------------------------------------
    The NAIS Information Technology (IT) systems were built 
specifically to provide this vital information to animal health 
officials quickly and easily when a disease event arises. They were 
also designed to be able to function effectively in the event of a 
major outbreak. The systems have a full back-up site, are tested 
regularly to ensure performance level, and are updated as enhancements 
become available.
    The problem USDA faced at the outset of development of NAIS was not 
that of an excessively large database, but rather that there were 
multiple disparate systems, coupled with traceback data that was 
contained on paper records stored in file cabinets at numerous 
locations across the country. USDA has effectively used a number of 
large databases for a variety of its programs and thus has experience 
in developing and maintaining them successfully. USDA is confident that 
the IT system built to support NAIS, while encompassing large 
databases, is being carefully managed to provide available and secure 
traceability information when needed.
    Question 7. What analysis has been done of the unintended 
consequences of NAIS? For example, what plans have been developed to 
address non-compliance and the risks posed by animals that are being 
kept illegally?
    Answer. NAIS is currently a voluntary program; therefore, non-
compliance is not an issue. However, in order for the program to be 
successful, participation must exceed the critical mass level of 
participation estimated by USDA to be 70 percent of the animals in a 
specific species/sector identified and traceable to their premises of 
origin. If we did not exceed this threshold, we would not be able to 
significantly improve traceability.
    In a mandatory system, USDA would likely develop a gradual 
enforcement scheme and detect non-compliance as animals moved in 
commerce. In each instance, we would assess the risk of that movement 
involving animals that were not officially identified, work to 
communicate the importance of complying with the regulations to those 
responsible for the movement, and, when necessary, assess penalties 
commensurate with the risk.
Questions Submitted by Hon. K. Michael Conaway a Representative in 
        Congress from Texas
    Question 1. What is the basis for the design of NAIS? Specifically, 
why does USDA repeatedly state that 48-hour traceback is ``optimal'' 
and that the program needs to include every animal? Both claims run 
contrary to sound epidemiology and risk analysis. Diseases have 
incubation times from a few hours to a few years_one approach does not 
fit all. And risk analysis would dictate that we focus our resources on 
high risk facilities (which typically mean high density).
    Answer. A working group of epidemiologists, producers, market 
operators, harvest facility operators and other stakeholders determined 
that a 48-hour time frame would satisfy all sectors of the livestock 
production chain. Yes, incubation time and infectivity vary among 
diseases; however, we must have a system capable of handling the worst 
case scenario. This worst case scenario is a foot-and-mouth disease 
outbreak, which has an incubation time of 24-36 hours. To develop the 
48-hour goal, we coupled this with the likelihood that 100% of the 
needed data would not be available electronically and would require 
some manual tracing.
    It is important to remember that 48 hours is the goal, developed by 
experts in this field, to obtain all traceback information_but not to 
complete all disease tracebacks. For example, it takes 72 hours just to 
complete a screening test for bovine tuberculosis. But, it is essential 
to locate potentially exposed animals to help keep the disease from 
spreading should confirmatory results come back positive.
    From my perspective, I agree that high density, intensively managed 
livestock populations pose a greater risk for disease amplification; 
however, animal disease can strike operations of all sizes and we must 
be prepared for that risk. USDA does not believe that every animal 
should be included in NAIS_the key is that NAIS must include all 
animals moving in commerce because of their potential to spread 
disease. And beyond that, additional premises registration and 
identification of lower priority operations and animals only serve to 
make the system stronger.

    Question 2. What are the costs of NAIS? In the cost-benefit 
analysis for COOL, USDA included the following: labor, training, 
modification of existing record-keeping, software programming, computer 
hardware, impacts on operations' efficiency, and more. Yet, when asked 
about NAIS, USDA makes it sound like it's nothing more than the cost of 
the tag.
    Answer. NAIS costs include program management by veterinarians, 
information specialists, statisticians and others; outreach; animal 
identification (identification devices and labor, applicators, etc.); 
data collection (market readers, slaughter readers, field readers, data 
collection labor); and the development and maintenance of the 
information system itself. Once NAIS is implemented, there will still 
be ongoing costs. The system is comprised of components that will have 
to be rebuilt, replaced, or updated over time (e.g., as the livestock 
population turns over, new ID tags will need to be purchased; as new 
technologies become available, computers, applicators, and readers will 
need to be replaced; etc.). Data from the Kansas State University 
benefit-cost analysis released by USDA on April 29, 2009, show that 
annual estimated costs for implementing NAIS today throughout the 
livestock (food animal) industries could range from roughly $143 
million for a bookend approach with 90 percent participation, to $228 
million for full pre-harvest traceability with 100 percent 
participation, with other options falling in between.
    Because over 90 percent of the industry costs for a fully 
implemented system would be associated with the cattle industry, I 
would like to briefly discuss their costs. As the program currently 
stands, for most U. S. cattle operations, the cost to identify animals 
with NAIS-compliant tags/devices is a choice of alternatives and price 
comparisons with tags that are already being used, and most often, not 
the imposed implementation of a totally new system of tagging. Data 
show that in the U. S. cattle industry, 79.1 percent of all beef cows 
and 97.4 percent of all dairy cows are identified individually with 
some form of animal identification \5\. NAIS-compliant, USDA official 
animal identification tags are available as traditional visual tags as 
well as RFID tags/devices. They are very similar to the existing tags 
being used by the producers, where often only the numbering system is 
different. Actual costs depend upon the producer's choice of which tag 
works best for their operation. Overall, the costs for NAIS roughly 
translate into less than one-half percent of the retail value of U.S. 
beef products.
---------------------------------------------------------------------------
    \5\ based upon USDA APHIS National Animal Health Monitoring System 
(NAHMS) data (Beef 2007-08 and Dairy 2007 studies).

    Question 3. There are serious ethical concerns in how NAIS has been 
developed. The USDA's working groups were initially drawn from the 
working groups established by the National Institute for Animal 
Agriculture (NIAA). The NIAA is an industry trade organization, and the 
members of the working groups included many companies who stood to 
profit directly from the implementation of NAIS, such as tag 
manufacturers and database management companies. Even some of the 
nonprofit organizations_such as Farm Bureau and Jockey Club_have 
subsidiaries or ties to companies that manage databases. These 
conflicts of interest have never been addressed.
    Answer. I do not believe that we took ethical missteps in the 
development and implementation of the NAIS. The National Animal 
Identification Development Team was initiated by USDA at the request of 
the United States Animal Health Association, an organization of state 
and federal animal health officials, producers, and livestock industry 
organizations. The steering Committee and working groups were selected 
under the direction of USDA, not NIAA. The participants are experts on 
these issues, and it was essential that we develop the program using 
their expertise.
    Nearly 400 individuals representing over 200 stakeholder 
organizations helped develop the initial plan, which was called the 
United States Animal Identification Plan (USAIP). There was a concerted 
effort to include large and small producers, livestock markets, harvest 
facilities, renderers, academia, producer organizations, breed 
organizations, state and Federal animal health agencies, tribal 
organizations, technology providers (tags, readers, integrators), data 
service providers, transportation (trucking industry), and grower 
alliances, cooperatives, and other organizations not necessarily 
affiliated with a national organization.
    Inclusion of companies and organizations directly involved in the 
animal identification or data collection business was not seen to be a 
conflict of interest. Their expertise was valuable, but certainly not 
the only source of information.
    The USAIP was only one set of recommendations that the agency 
considered in developing the National Animal Identification System 
(NAIS). Public input from listening sessions across the country was 
also considered. The numerous comments received from email and website 
postings were as well. And Secretary Vilsack has emphasized his desire 
to seek additional input as we continue with NAIS implementation.
Question Submitted by Hon. David Scott a Representative in Congress 
        from Georgia
    Question 1. The GAO reported in July 2007 that the Department had 
major areas that would hinder USDA's ability to implement NAIS 
effectively, what has the USDA done to cover these issues:
    A. USDA has not prioritized the implementation of NAIS by species 
        or other criteria. Instead, the agency is implementing NAIS for 
        numerous species simultaneously, causing federal, state, 
        industry resources to be allocated widely, rather than being 
        focused on the species of greatest concern.

    B. USDA has not developed a plan to integrate NAIS with preexisting 
        USDA and state animal ID requirements. As a result, producers 
        are generally discouraged from investing in new ID devices for 
        NAIS.

    C. USDA has not clearly defined a time frame for rapid trace back 
        possibly slowing response and causing greater economic losses.

    D. USDA does not require potentially critical information to be 
        recorded, such as species or age in the NAIS databases.

    Answer. USDA appreciates the review conducted by GAO and has 
addressed all recommendations. I will outline progress on each of the 
four issues you specifically mentioned below.
    A. APHIS has prioritized the implementation of NAIS by species and 
other criteria. USDA's A Business Plan to Advance Animal Disease 
Traceability specifically addresses prioritization of NAIS 
implementation by species. NAIS should be implemented in a way that 
addresses the unique attributes of different species/industry sector 
and the way animals are raised and processed. In addition, we need to 
consider that animal diseases are not always species-specific. For 
example, foot-and-mouth disease (FMD) was first diagnosed in swine in 
the United Kingdom outbreak in 2001 but soon affected cattle and sheep. 
Therefore, APHIS recognizes that NAIS must be inclusive for all 
livestock and poultry while prioritizing efforts that will address the 
species with the greatest void in traceability.
    Species were grouped into two tiers, and within each tier, ranked 
as low, medium, or high priority. The level of priority reflects the 
emphasis each species and each sector will be given in implementing the 
strategies and actions of the business plan. The specific 
prioritization of species can be found on pages 14-25 of the business 
plan, which is available at: http://animalid.aphis.usda.gov/nais/
naislibrary/documents/plans_reports/
TraceabilityBusinessPlan%20Ver%201.0%20Sept%202008.pdf.
    B. USDA has taken a number of steps to integrate NAIS with 
preexisting USDA and State animal identification requirements and 
encourage the use of new identification devices through ongoing actions 
defined in the business plan on pages 26-27. For example, the National 
Poultry Improvement Plan (NPIP) supplements NAIS with locations of 
poultry breeder flocks, resulting in traceability estimated at more 
than 95 percent. Additionally, an estimated 95 percent of sheep flocks 
can be traced back to the flock of origin due to the identification 
provided by USDA's scrapie eradication surveillance program.
    APHIS issued regulations to establish the premises identification 
number (PIN) as a standard for identifying locations that manage and/or 
hold livestock, with a final rule on July 18, 2007 (72 FR 39301-39307). 
The regulations also established the animal identification number (AIN) 
as an official numbering system for all disease program activities 
(bovine tuberculosis, brucellosis, scrapie, etc.) to uniquely identify 
locations across all disease programs. Additionally, APHIS published an 
interim rule on September 18, 2008, which reserves the 840 number for 
U.S.-born animals (73 FR 54059-54063).
    A. On December 22, 2008, we issued Veterinary Services (VS) 
Memorandum No. 575.19 to explain our policy for the use of the PIN in 
the administration of animal disease program activities. Specifically, 
the use of the PIN format is being established as the standard for all 
disease programs to ensure the locations are uniquely identified across 
all disease programs.
    On January 13, 2009, we published a proposed rule (74 FR 1634-1643) 
to make the 840 number the only version of the AIN, establish the NAIS 
seven-character PIN as the sole standard, and have a standardized PIN 
for all premises that use USDA official animal identification.
    USDA and states are incorporating electronic data capture and 
reporting into existing animal health programs and information systems. 
This effort in mobile information management for field collection of 
animal identification data, whether chute-side with producers or at 
surveillance points such as harvest facilities or livestock markets, is 
expanding. Examples include the electronic bovine tuberculosis testing 
system, electronic brucellosis system for vaccination and testing, and 
the electronic scrapie tracing system.
    C. The September 2008 traceability business plan provides timelines 
with performance measure objectives to advance tracing capabilities for 
each species. Tables outlining these timelines are found on pages 59-60 
of the business plan.
    D. With regard to requiring potentially critical information to be 
recorded, such as species or age, in the NAIS databases, APHIS has 
discussed this issue extensively with stakeholders through the species 
working groups and in collaboration with industry. Participants 
identified the minimum data elements that must be obtained to conduct a 
traceback investigation. APHIS incorporated these data elements into 
NAIS through the requirements of the animal tracking databases.
    Other data elements, such as species, date of birth, and gender, 
are often contained in information systems maintained by service 
providers in animal agriculture and may be provided when necessary. 
Requiring additional information for an animal record to be considered 
a ``qualifying'' record, however, must be closely evaluated so as not 
to exclude otherwise valuable information.
    Through development of animal tracking databases, APHIS has 
established a process to ensure that any consideration of expanding 
data elements is done in collaboration with the species working groups 
and through the recommendation of the NAIS Subcommittee. Experience 
with the animal tracking databases as they come on line with the Animal 
Trace Processing System will allow APHIS to document the availability 
of necessary information.
    APHIS is studying the information available through the animal 
tracking databases to determine if additional required fields are 
necessary or if the data maintained in the systems are adequate without 
requiring additional data elements. Additionally, such findings and 
potential recommendations will be discussed with the species working 
groups. If changes are warranted, APHIS will revise the NAIS program 
standards and repost them in July 2009.
Question Submitted by Hon. Frank Kratovil, Jr. a Representative in 
        Congress from Maryland
    Question 1. Is it fair to say that you bring to the table 
substantial insight into the cost and benefit of this system? If so, 
can it be an effective system if it is not mandatory?
    Answer Yes, I do believe that I have substantial insight due to 
decades of experience in protecting animal health and think it is 
important to examine the costs of our animal health programs and 
compare those to the potential benefits. The NAIS system can only be 
effective with strong participation that exceeds the critical mass 
level estimated by USDA to be 70 percent of the animals in a specific 
species/sector identified and traceable to their premises of origin. If 
we do not exceed this threshold, we will not be able to significantly 
improve traceability. In other words, this important system simply 
won't work. It is essential that we have an effective NAIS_whether it 
is voluntary or mandatory_in order to more quickly and precisely 
respond to animal disease outbreaks.
    To examine the costs and benefits of various forms of a National 
Animal Identification System, we sought the help of outside experts. A 
team from Kansas State University, Montana State University, Colorado 
State University, and Michigan State University carried out this 
analysis. The analysis studies the benefits and costs of all components 
of NAIS across all industry/species sectors. The analysis sought to 
determine the overall distribution of the system's benefits and costs 
among producers of various-sized herds, marketing firms, processors, 
consumers, and state and federal government agencies. USDA provided the 
analysis to the Committee on April 29, 2009.
    I recognize that cost is a significant concern for everyone with an 
interest in the NAIS. We know accountability is essential to assure the 
American public that the Federal government is making the best and most 
efficient choices when it comes to their tax dollars. We understand 
that NAIS implementation is not cheap; data from the Kansas State 
University cost-benefit analysis show that annual estimated costs for 
implementing NAIS today throughout the livestock (food animal) 
industries could range from roughly $143 million for a bookend approach 
with 90 percent participation, to $228 million for full pre-harvest 
traceability with 100 percent participation, with other options falling 
in between. But we must compare this with the estimated billions of 
dollars in losses we would suffer from an FMD outbreak. And, although 
significant, the costs for implementing NAIS in the cattle sector 
roughly translate into less than one-half percent of the retail value 
of U.S. beef products.
    We are committed to being transparent and providing information 
about the benefits and costs of NAIS. On April 15, 2009, the Secretary 
held a roundtable with stakeholders representing the full spectrum of 
views on NAIS. This meeting kicked off a larger listening tour to 
gather feedback on concerns_including producer costs_and, more 
importantly, to identify potential solutions to help USDA and the U.S. 
livestock sector move forward with the program. We look forward to a 
productive discussion on these issues.

                                  
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