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


 
   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010 

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________

     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES

                ROSA L. DeLAURO, Connecticut, Chairwoman
 SAM FARR, California                       JACK KINGSTON, Georgia
 ALLEN BOYD, Florida                        TOM LATHAM, Iowa
 SANFORD D. BISHOP, Jr., Georgia            JO ANN EMERSON, Missouri
 LINCOLN DAVIS, Tennessee                   RODNEY ALEXANDER, Louisiana
 MARCY KAPTUR, Ohio
 MAURICE D. HINCHEY, New York
 JESSE L. JACKSON, Jr., Illinois  

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
      Martha Foley, Leslie Barrack, Cliff Isenberg, and Matt Smith,
                            Staff Assistants
                                ________

                                 PART 4
                                                                   Page
 Food Safety Oversight: U.S. Department of Health and Human 
Services, Office of Inspector General.............................    1
 Food and Drug Administration.....................................   65
 Protecting the Public Health in a Global Economy: Ensuring That 
Meat and Poultry Imports Meet U.S. Standards......................  141

                                ________
         Printed for the use of the Committee on Appropriations














 PART 4--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION,

              AND RELATED AGENCIES APPROPRIATIONS FOR 2010
                                                                      




















   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES

                ROSA L. DeLAURO, Connecticut, Chairwoman
 SAM FARR, California                       JACK KINGSTON, Georgia
 ALLEN BOYD, Florida                        TOM LATHAM, Iowa
 SANFORD D. BISHOP, Jr., Georgia            JO ANN EMERSON, Missouri
 LINCOLN DAVIS, Tennessee                   RODNEY ALEXANDER, Louisiana
 MARCY KAPTUR, Ohio
 MAURICE D. HINCHEY, New York
 JESSE L. JACKSON, Jr., Illinois    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
      Martha Foley, Leslie Barrack, Cliff Isenberg, and Matt Smith,
                            Staff Assistants
                                ________

                                 PART 4
                                                                   Page
 Food Safety Oversight: U.S. Department of Health and Human 
Services, Office of Inspector General.............................    1
 Food and Drug Administration.....................................   65
 Protecting the Public Health in a Global Economy: Ensuring That 
Meat and Poultry Imports Meet U.S. Standards......................  141

                                ________

         Printed for the use of the Committee on Appropriations

                     U.S. GOVERNMENT PRINTING OFFICE

 55-703                     WASHINGTON : 2010













                       COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 NORMAN D. DICKS, Washington             JERRY LEWIS, California
 ALAN B. MOLLOHAN, West Virginia         C. W. BILL YOUNG, Florida
 MARCY KAPTUR, Ohio                      HAROLD ROGERS, Kentucky
 PETER J. VISCLOSKY, Indiana             FRANK R. WOLF, Virginia
 NITA M. LOWEY, New York                 JACK KINGSTON, Georgia
 JOSE E. SERRANO, New York               RODNEY P. FRELINGHUYSEN, New   
 ROSA L. DeLAURO, Connecticut              Jersey
 JAMES P. MORAN, Virginia                TODD TIAHRT, Kansas
 JOHN W. OLVER, Massachusetts            ZACH WAMP, Tennessee
 ED PASTOR, Arizona                      TOM LATHAM, Iowa
 DAVID E. PRICE, North Carolina          ROBERT B. ADERHOLT, Alabama
 CHET EDWARDS, Texas                     JO ANN EMERSON, Missouri
 PATRICK J. KENNEDY, Rhode Island        KAY GRANGER, Texas
 MAURICE D. HINCHEY, New York            MICHAEL K. SIMPSON, Idaho
 LUCILLE ROYBAL-ALLARD, California       JOHN ABNEY CULBERSON, Texas
 SAM FARR, California                    MARK STEVEN KIRK, Illinois
 JESSE L. JACKSON, Jr., Illinois         ANDER CRENSHAW, Florida
 CAROLYN C. KILPATRICK, Michigan         DENNIS R. REHBERG, Montana
 ALLEN BOYD, Florida                     JOHN R. CARTER, Texas
 CHAKA FATTAH, Pennsylvania              RODNEY ALEXANDER, Louisiana
 STEVEN R. ROTHMAN, New Jersey           KEN CALVERT, California
 SANFORD D. BISHOP, Jr., Georgia         JO BONNER, Alabama
 MARION BERRY, Arkansas                  STEVEN C. LaTOURETTE, Ohio
 BARBARA LEE, California                 TOM COLE, Oklahoma
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, 
   Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado
 ------ ------                      

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)


   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010

                              ----------                              


                                          Thursday, March 26, 2009.

  FOOD SAFETY OVERSIGHT: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 
                      OFFICE OF INSPECTOR GENERAL

                               WITNESSES

DANIEL R. LEVINSON, INSPECTOR GENERAL
JODI NUDELMAN, REGIONAL INSPECTOR GENERAL, OFFICE OF EVALUATION AND 
    INSPECTIONS, NEW YORK, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
THOMAS E. STENZEL, PRESIDENT AND CEO, UNITED FRESH PRODUCE ASSOCIATION
CRAIG HENRY, SENIOR VICE PRESIDENT FOR SCIENCE AND REGULATORY AFFAIRS, 
    GROCERY MANUFACTURERS ASSOCIATION

                 Opening Statement, Chairwoman DeLauro

    Ms. DeLauro. The committee is called to order.
    Good morning. And let me thank all of you and welcome you 
here this morning. And a special welcome to our witnesses:
    Daniel Levinson, the Inspector General for the Department 
of Health and Human Services;
    We have Tom Stenzel, President of United Fresh Produce 
Association, someone who is very familiar with many of us on 
the subcommittee--we thank you, Tom, it is good to see you back 
here; I am glad you got through the traffic; and
    Craig Henry, Senior Vice President for Science and 
Regulatory Affairs for the Grocery Manufacturers Association.
    Now, Jodi, you tell me your title here because you are at 
the table here.
    Ms. Nudelman. I am Regional Inspector General in New York.
    The Chairman. Okay. Lovely. Thank you so much for being 
here.
    I guess we are not sure yet as to when and where and how, 
but to the Inspector General, thank you, we don't know when the 
last time was that you appeared before the committee, but we 
are delighted to have you here.
    Mr. Levinson. I think this is my first time.
    The Chairman. All right; let's hear it for that. Thank you 
very, very much.
    I want to say thank you again to everyone for taking the 
time to share your insight and experience. And again, a special 
thanks to Tom and Craig, it was short notice, but we are 
delighted you are here.
    My colleagues and I all believe that we have a 
responsibility on this subcommittee to confront issues of 
public health and public safety. And when families can no 
longer trust that the food they eat is safe, government has to 
respond. We need to be there.
    For many years we have fought to reform--and I will make 
this my own view--a dysfunctional Federal agency, an FDA that 
is unable to meet its most basic regulatory responsibilities. 
And our work continues as we strive to provide the resources 
and the tools in order to effect change.
    Today's hearing focuses on a very important tool for 
combating food-borne illness outbreaks. That is traceability, 
traceability in the food supply chain, the ability to follow a 
food product's path back from the store where it was purchased 
to the place at which the contamination occurred. It is 
critical to identifying both the source of a potentially 
dangerous outbreak and the location where contaminated products 
have been sold and may even be still available.
    We were reminded just how important traceability is during 
last year's salmonella outbreak, originally linked to tomatoes. 
As we all know, the FDA later turned its attention away from 
tomatoes, ultimately determining that peppers from Mexico may 
have been the source of the outbreak, but not before the market 
for tomatoes shrank dramatically and tomato growers suffered.
    And so this outbreak raised some important questions. What 
if an effective traceability system had been in place? Would 
the FDA have been able to find peppers as the original source 
sooner in its investigation, minimize the impact on the tomato 
industry, prevent needless additional illnesses?
    We are going to attempt these questions, review the report 
on traceability released today by the Office of the Inspector 
General at the Department of Health and Human Services. The 
report assesses the traceability of selected food products.
    In its examination, the Inspector General's Office was able 
to trace only 5 of the 40 products through each stage of the 
food supply chain. What is more, the Inspector General found 59 
percent of food facilities failed to meet FDA's requirement to 
maintain records on their sources, recipients or transporters. 
The tools were put in place by the 2002 bioterrorism law, yet 
neither the law nor the implementing regulations gave FDA 
authority to put a system in place ensuring companies comply 
with the requirements under the law.
    There are other gaps as well. The law exempted farms and 
restaurants from the recordkeeping requirement. And in moving 
from the draft rule to the final rule, the Office of Management 
and Budget exempted foreign facilities completely and 
significantly limited the kinds of companies required to 
maintain lot-specific information.
    Traceability today simply is not good enough; it is 
inconsistent, it is unreliable. I think these findings confirm 
what many in the Congress already believe, that we can do 
better, that we have a responsibility in the event of a food-
borne illness outbreak to effectively find the source of 
contamination as quickly as possible and prevent further 
illness, and even death.
    To be sure, the Inspector General study involved only 220 
facilities. And I want to just say, I am pleased to have this 
report. I think it is a good beginning; I think it points us in 
the direction of what we have to try to do, but it involved 
only 220 facilities.
    OMB has estimated that more than 700,000 facilities are 
subject to the traceability requirements we are discussing 
today. And yet, while this study is not a valid statistical 
sample of the entire industry, it provides us with a glimpse 
into how these requirements are actually being carried out.
    In its report, the Inspector General recommends that the 
FDA seek additional authority, and in fact, the FDA has 
formally requested some authority related to traceability in 
its food protection plan. At the same time, traceability has 
considerable support in the Congress and will likely be 
included in food safety legislation that moves forward this 
year.
    But also, as we study the Inspector General's findings, I 
think we also have an obligation to ask whether the FDA could 
have done a better job with the authority it had. When tomatoes 
were first suspected as the potential source of last year's 
salmonella outbreak, I know some growers were frustrated by the 
Agency's inability to act on what it knew.
    I think it is fair to say that the United Fresh Produce 
Association has been out front on the issue of traceability, 
and I hope Mr. Stenzel will speak to the issue.
    We also look forward to hearing Mr. Henry discuss the 
Grocery Manufacturers Association's use on traceability.
    Mr. Stenzel, Mr. Henry, we value your perspective and your 
experience as the Congress works to craft legislation, that it 
does not interfere with the traceability technologies that are 
already working in the marketplace. I think your testimony will 
help the subcommittee determine where FDA can best leverage its 
resources to strengthen traceability systems.
    From farm to fork, our food system is vast, it is 
complicated, and we need to build an effective traceability 
system. And it is not easy to do. But with the public health at 
stake, I believe that it is essential, and I believe this 
subcommittee believes it is essential for us to do.
    So I thank all of our witnesses this morning for their 
participation. I look forward to the testimony. And let me ask 
our ranking member, Mr. Kingston, if he would like to make an 
opening statement.

              Opening Statement of Ranking Member Kingston

    Mr. Kingston. Thank you, Madam Chair. I look forward to the 
hearing, and I look forward to hearing from these panelists. 
And particularly, it is good to see Mr. Levinson again; I 
hadn't seen him in a while. I didn't know he has already been 
here 4 years, so time does fly.
    But two things that I really want to focus on in terms of 
the traceability debate are, number one, what is the critical 
safety point in the processing of the food? For example, it 
might not matter so much where a chicken was raised as much as 
it is important where it was cooked. We may need to trace back 
to the very beginning, but maybe we don't. And we should focus 
on where can you put the most effort and get the most benefit 
from.
    And then the second part of that is, what is the risk 
benefit? For example, there is going to be some food where it 
is easy to trace because we are already kind of doing it, but 
maybe there is no real benefit in it. Or there may be another 
question as to where is the risk and which foods are riskiest.
    I think we should actually cherry-pick certain food groups 
to say, these are the ones that are the most critical, they 
seem to have a relationship with food-borne illnesses more than 
this group. And those are the ones that, from a starting point, 
we should focus on, rather than try to embrace the whole world 
of consumption as an initial step.
    So those would be my comments. And I will yield back. Thank 
you.
    Ms. DeLauro. Thank you, Mr. Kingston. Let's move to our 
testimony.
    And I will just let our witnesses know that your full 
statement will be in the record, so feel free to just outline 
and summarize your comments for the committee, and then we will 
move to questions and answers.
    Mr. Levinson. Thank you.

                   Opening Statement, Daniel Levinson

    Mr. Levinson. Thank you, Madam Chair. I would like to just 
read a brief summary of my lengthier written testimony, which I 
would request be made a part of the record.
    Good morning, Madam Chair, and members of the subcommittee. 
I am Daniel Levinson, Inspector General for the U.S. Department 
of Health and Human Services. I am here today with Jodi 
Nudelman, our Regional Inspector General for the Office of 
Evaluation and Inspections in New York.
    Recent outbreaks of food-borne illness involving peanut 
butter, peppers and spinach have raised serious questions about 
FDA's ability to protect the Nation's food supply. The Office 
of Inspector General has identified FDA oversight of food, 
drugs, and medical devices as a top management challenge and 
has conducted several reviews of FDA's oversight of food safety 
over the past decade. I appreciate the opportunity to appear 
before you today to discuss our most recent work on the 
traceability of the food supply.
    In short, we conducted a food traceability exercise and 
found that only 5 of the 40 products we purchased could be 
traced through each stage of the food supply chain back to the 
farm or border.
    Several factors limited our ability to trace the remaining 
products. These factors would also limit FDA's ability to 
respond quickly and effectively to a food emergency. In 
addition, many food facilities did not comply with FDA's 
records requirements, and existing records requirements are not 
sufficient to ensure traceability. These findings demonstrate 
that more needs to be done to protect public health and to 
ensure that FDA has the necessary resources and tools to 
respond to a food emergency.
    Each year, more than 300,000 Americans are hospitalized and 
5,000 die after consuming contaminated foods and beverages. In 
a food emergency, FDA is typically responsible for finding the 
source of the contamination and removing unsafe food products 
from retail shelves. FDA's ability to fulfill its duties 
largely depends upon whether it can follow a food product's 
movement through each stage of the food supply chain, a process 
referred to as traceability.
    The food supply chain typically starts on farms and can 
involve manufacturers, processors, packers, distributors, 
transporters and retail stores before reaching the consumer. 
Beginning in 2005, FDA required these facilities, with several 
exceptions, most notably farms, to maintain records with 
contact information for all sources, recipients, and 
transporters.
    Additionally, some of these facilities, specifically 
processors, packers and manufacturers, must also record what is 
known as lot-specific information to the extent that it exists. 
Lot-specific information distinguishes one production batch 
from another, and can be a number or other identifier that is 
printed on the product. These records help FDA to trace a 
product through each stage of the food supply chain during a 
food emergency.
    Our review had two objectives. First, we assessed the 
traceability of 40 selected food products that we purchased 
from retail stores around the country. Second, we determined 
the extent to which food facilities maintained the required 
information about their sources, recipients and transporters. 
We found that only 5 of the 40 products we purchased could be 
traced through each stage of the food supply chain. In these 
five cases, every facility that handled the product was able to 
link it to lot-specific information in their records.
    For 31 of the 40 products, we were only able to identify 
facilities that likely handled the products. Many of the 
facilities that handled these products could only estimate a 
range of deliveries that likely included the product. These 
estimates may have included more facilities than actually 
handled the product, or may not have included all of the 
facilities that handled the product.
    For the remaining four products, we could not even identify 
the facilities that likely handled them. In these cases, at 
least one facility in the food supply chain failed to provide 
any information about the potential source of the product. In a 
food emergency, there could be a serious health consequence if 
FDA cannot, at a minimum, identify the facilities that 
potentially handled a contaminated food product.
    We identified three factors that limited the traceability 
of food products. First, food facilities did not always 
maintain lot-specific information. A few processors did not 
maintain this information even though they were required to do 
so. In addition, many other types of facilities did not 
maintain lot-specific information.
    Second, several products did not have lot-specific 
information on the product or packaging, which is not currently 
required by the FDA.
    Third, a number of facilities mixed raw food products from 
a large number of farms, a process known as commingling. For 
example, a single bag of flour we purchased contained wheat 
from more than 100 farms.
    The second objective of our review was to assess 
facilities' compliance with FDA's requirements to maintain 
contact information about their sources, recipients and 
transporters. We found that 59 percent of the food facilities 
did not maintain this required contact information. In 
addition, a quarter of the food facilities reported that they 
were not aware of FDA's requirements to maintain this contact 
information. Noncompliance with these requirements affects 
FDA's ability to trace food products through the food supply 
chain.
    Based on these findings, we made six recommendations to the 
FDA:
    One, FDA should strengthen the existing records 
requirements regarding lot-specific information. Specifically, 
FDA should seek statutory authority, if necessary, to require 
processors, packers, and manufacturers to create lot-specific 
information and maintain it if it does not exist. FDA also 
should extend the requirements to include facilities that are 
currently not required to maintain this information.
    Two, FDA should consider seeking additional statutory 
authority to require food facilities to further strengthen food 
traceability. This could include a variety of approaches, such 
as requiring facilities to use information technologies to help 
facilitate recordkeeping.
    Three, FDA should work with the food industry to develop 
guidelines on traceability.
    Four, FDA should address issues related to mixing raw food 
products from a large number of farms.
    Five, FDA should seek statutory authority to request 
facilities' records at any time.
    And finally, FDA should conduct education and outreach 
activities to inform the food industry about its record 
requirements.
    In conclusion, in the event of an outbreak of a food-borne 
illness, FDA needs to be able to quickly identify the source of 
a contamination and remove unsafe products from retail shelves. 
Our review demonstrates that more needs to be done to protect 
public health and to ensure that FDA has the necessary 
resources and tools to respond to a food emergency.
    We share your commitment to this issue, and we currently 
have work under way related to FDA's inspections of food 
facilities and whether facilities register with the FDA. And we 
have ongoing work as well on FDA's procedures for recalls.
    This concludes my oral testimony. I will welcome your 
questions.
    Ms. DeLauro. Thank you very much, Mr. Levinson.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. DeLauro. Tom Stenzel.

                     Opening Statement, Tom Stenzel

    Mr. Stenzel. Thank you very much, Madam Chairwoman. Thank 
you for holding this hearing today on the important issue of 
traceability for the entire food industry.
    I think all of you on the committee know of our industry's 
call for mandatory Federal oversight of produce safety 
standards, and I assure you today that we feel the same way 
about traceability. It is an important cornerstone of our food 
safety efforts.
    Let me mention three specific areas this morning: first, 
the general state of traceability today in the produce 
industry; secondly, major initiatives that we now have under 
way to build more streamlined whole-chain traceability; and 
finally, share some brief recommendations for the Congress and 
FDA moving forward.
    Traceability of fresh produce is a very complex and 
expensive undertaking, linking multiple partners in a sometimes 
long supply chain. Each company is responsible for maintaining 
the information required to comply with the Bioterrorism Act, 
mandating one step up and one step back. But just to give you a 
sense of the enormity of that effort, we estimate that six 
billion cases of fresh produce a year are shipped in the United 
States.
    I think it is best to look at produce traceability in three 
groups: individually packaged produce that often carries a UPC 
code, bulk produce in its original carton, and then bulk 
produce that may have been repacked or commingled with other 
lots for product quality.
    With prepackaged produce, such as fresh salads, a bag of 
fruit or cut vegetables in a package, UPC codes serve as the 
product identifier, linking back to specific codes identifying 
the product source. We are unaware of any instances in which 
public health investigators having a package in hand have been 
unable to quickly and efficiently reach the company that 
packaged the product.
    Bulk produce poses a different challenge in that the 
produce is often removed from the original carton for final 
display and consumer sale. For those products, recordkeeping by 
the retail establishment or the food service company that has 
dropped that product at a specific restaurant is required to 
begin linking an individual produce commodity back down the 
chain.
    Finally, bulk produce is sometimes repacked between the 
farm and final consumer destination. Because produce 
commodities are likely to be of different sizes, colors, 
shapes, and stages of ripeness, repackers play an important 
role in our industry in sorting the highest quality produce 
very close to its final consumer destination.
    Most frequently today, individual lot integrity is 
maintained during this sorting process, but there are times 
when different lots of produce must be mixed for product 
quality, and outgoing cases are still expected to carry 
information that is traceable to the incoming different produce 
lots that have gone into that single case.
    The industry is fully committed to one up, one down 
requirements of the Bioterrorism Act, and we have repeatedly 
urged FDA to enforce this law. I am particularly pleased and 
interested in reading the Inspector General's report today, as 
this is precisely the type of analysis that we need conducted 
before an outbreak, that can help us focus on the areas where 
individual operators need to improve in their own traceability 
systems.
    In a similar initiative last summer, investigators from the 
Energy and Commerce Committee, Oversight and Investigation 
Subcommittee, conducted several real-world trace-backs, tracing 
tomatoes from a restaurant that was picked randomly out of a 
phone book. They were amazed at the results. They were able to 
get back to the original farm source within a matter of hours.
    Next, let me talk about some of the exciting new 
initiatives that are under way in the produce industry to take 
traceability another step forward. More than a year ago, our 
association joined with industry partners to develop a common, 
industry-wide framework to standardize case coding for all 
produce sold in the United States.
    While today most companies have the ability to track one 
up, one down in their own systems, the adoption of a 
standardized coding system across our industry will connect 
each stage more quickly and efficiently. Every case of produce 
will be labeled with a global trade item number, called a GTIN, 
which identifies the originator of the case and the type of 
product inside. It will also carry a lot number specifically 
identifying the produce, including its packing or harvest date. 
Labels will carry a bar code with this information which each 
member of the supply chain will be able to scan so that the 
information can be stored and readily available.
    Adoption of these standards is now in motion; it is not 
just an idea. With commitments from retailers, wholesalers, and 
produce growers across the chain, we are promoting this 
initiative through a new Web site, producetraceability.org, 
numerous industry meetings; and, in fact, we are building a 
10,000-square-foot produce traceability demonstration center at 
our association's upcoming annual convention to help the 
industry begin to adopt these practices.
    One last item I would mention in the emerging technology 
area is what is called the GS-1 data bar, an electronically 
readable code small enough to even fit on a fruit or vegetable 
sticker. I brought several examples of those and include one in 
my testimony.
    You will begin to see in your store now on this little 
sticker that has the price look-up number----
    Ms. DeLauro. Man, after my own heart with a green pepper. 
If you cook that with sausage, it is very good.
    Mr. Stenzel. Madam Chair, I will leave this for you after 
the hearing.
    These codes are going to be very helpful to us in the 
emerging technology area.
    Ms. DeLauro. All the information is on that little sticker? 
Can you pass that up?
    Mr. Stenzel. Sure.
    The information that is contained on these codes today 
includes the company or the packer who originates it. The codes 
are not actually big enough to include the lot number, so that 
is an important point for us in new technology development, but 
it is going to be a step forward in the ability to track 
exactly where that piece of produce came from.
    We are also early in the stage of adoption at the retail 
level. Most retailers cannot actually scan that data yet. They 
need a new generation of scanning technology at the checkout 
line. But I think that does lead me to my final point and 
recommendations for the committee and Congress.
    One is to look at the ability of technology to help us in 
this effort. First, please look at the unique aspects of 
tracking bulk fresh produce. We are certainly going to be 
different from other sections in the food industry. We are 
likely to find that overly prescriptive mandates from the top 
down are not as likely to be as effective as efficiencies from 
the bottom up in the industry, the new technologies that we are 
talking about here. We believe that we are on the right course 
with the produce traceability initiative I have discussed, and 
we ask that Congress set the goal that we need to achieve, not 
mandate the process.
    Secondly, I would ask the committee to consider ways of 
assisting in meeting the cost of traceability requirements. 
While larger companies may adopt these technologies on their 
own, it is essential that cost burdens do not prevent all 
companies from adopting these protocols.
    Third, let me suggest that the FDA engage in more 
practical, hands-on traceability exercises just as the IG has 
done here. Our industry stands ready to cooperate with the 
committee, the FDA, the IG, and any others, in doing mock 
trace-back exercises on an ongoing basis.
    Fourth, I recommend that we urge FDA to enforce the current 
law before we completely call it a failure. If, in an outbreak 
situation, FDA finds companies not in compliance, then take 
action, take highly visible action. That is what signals the 
importance of proper behavior to those in any industry who 
might be inclined to cut corners.
    Finally, Madam Chair, I need to share a little frustration 
with you, as I am sure you anticipate. But the enhancements we 
are talking about today would not have prevented the anxiety of 
last summer's salmonella outbreak. This past summer, we saw 
what could only be called a ``wild goose chase'' or, rather, a 
``wild tomato chase.'' For weeks and weeks, officials blamed 
the slow search on the lack of traceability.
    We now know the problem was we were searching for the wrong 
product. In reality, FDA was able to trace tomatoes back to the 
farm, the only problem was those trace-backs kept pointing to 
different farms. FDA called that inconclusive, but we now know 
better. Trace-back was conclusive, and it showed that there was 
no common point where all of those tomatoes could have been 
contaminated. Trace-back worked, it just didn't confirm the 
original hypothesis.
    Once jalapenos were identified as the real culprit, 
Minnesota health officials quickly traced the peppers back, 
from a small restaurant in Minneapolis to a food service 
distributor, to a tiny wholesaler in Texas, and a farm 500 
miles south of the Mexican border. The Minnesota investigators 
were quoted as saying, ``It took a few phone calls, and you can 
work it fairly quickly back to the grower.''
    Now, I know our industry is far from perfect in our ability 
to track product, and we want to understand the gaps; but that 
description more closely resembles the industry I know today. 
We are capable of tracking most produce one step up and one 
step back, but just as importantly, we are committed to 
streamlining and expediting that process just as fast as we 
can. Thank you.
    Ms. DeLauro. Thank you very much, Mr. Stenzel.
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    Ms. DeLauro. Mr. Henry.

                     Opening Statement, Craig Henry

    Mr. Henry. Thank you, Madam Chairwoman, and the members of 
the subcommittee, for allowing me to testify today.
    My name is Craig Henry. I am the Senior Vice President and 
Chief Operating Officer for the Science and Regulatory Affairs 
Division of the Grocery Manufacturers Association. I have over 
30 years of experience in manufacturing operations and related 
food safety programs, which includes traceability.
    As stated earlier, Americans enjoy one of the safest food 
supplies in the world, but food and beverage companies 
recognize that steps must be taken to make our food supply even 
safer. Ensuring the safety of our products and maintaining the 
confidence of consumers is the single most important goal of 
the food and beverage industry today and going forward.
    Product safety is the foundation of consumer trust, and our 
industry devotes enormous resources to ensure that our products 
are safe. Our industry strongly supports efforts to continually 
improve the safety of America's food supplies and urges the 
subcommittee to continue to make the prevention of 
contamination the foundation of our Nation's food safety 
strategies.
    Recommendations that we have are as follows:
    One, increase FDA food-related spending. GMA, and the 
members that it represents, strongly supports proposals to 
increase FDA food-related spending to rebuild FDA scientific 
and regulatory capacity.
    We applaud the subcommittee for providing FDA with the 
critical resources in the 2009 fiscal year Omnibus 
Appropriations bill, and urge you to provide a comparable 
increase for food-related activities in the subsequent fiscal 
year of 2010.
    Regarding food safety plans, certainly GMA strongly 
supports proposals in House and Senate legislation requiring 
every food company manufacturing food for the U.S. market to 
conduct an evaluation of food safety risks that identifies 
potential sources of contamination, identifies appropriate food 
safety controls, and documents those controls in their food 
safety plan.
    We should require foreign supplier safety programs and 
build foreign capacity. GMA strongly supports proposals in both 
the House and Senate legislation to build the capacity of 
foreign governments to regulate food safety and to require 
every food importer to police their foreign suppliers. In 
particular, we support proposals to require that food importers 
document the food safety measures and controls being 
implemented by their foreign suppliers, and to require foreign 
importers to make a foreign supplier food safety plan available 
to FDA.
    On fruits and vegetables, again, we support proposals to 
give FDA the power to establish Federal safety standards for 
certain fruits and vegetables when science and risk demonstrate 
that standards are needed. FDA should be permitted to work with 
States and to tailor standards to meet local growing conditions 
and to ensure that those standards are met.
    On risk-based inspection, GMA strongly supports House and 
Senate legislation to focus domestic and foreign inspections on 
facilities that pose the greatest risk of contamination that 
could result in food-borne illness or injury. To focus scarce 
resources, FDA should permit expedited entry for imports that 
pose no meaningful risk.
    On traceability, government and industry should work 
collaboratively to identify and address gaps in our current 
traceability system, including measures that will ensure that 
responsibility for traceability is shared throughout the supply 
chain, measures that will improve the interoperability of 
current and future traceability systems, and that are built 
upon and encourage industry innovation. In particular, GMA 
strongly supports the House and Senate proposals to develop and 
test promising new traceability systems through pilot programs 
in the produce sector.
    Lastly, on authorization of mandatory recalls, GMA strongly 
supports proposals in the House and Senate legislation to give 
FDA the authority to order a mandatory recall when a company 
producing FDA-regulated products has refused to conduct a 
voluntary recall and there is a significant risk to public 
health. Specifically, where the responsible party refuses to 
voluntarily recall a product for which there is a reasonable 
probability that the food will cause serious adverse health 
consequences or death, the Secretary of Health and Human 
Services should be permitted to order an FDA-regulated company 
to recall immediately.
    GMA applauds your efforts to seek swift and lasting 
improvements to our food and safety system. We look forward to 
working with you to continually improve the safety of America's 
food supplies.
    I would be pleased to entertain any questions.
    Ms. DeLauro. Thank you very much.
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    Ms. DeLauro. Thank you all for your testimony. And let me 
just ask a couple of questions if I can.
    I am going to start, if I can, Mr. Levinson, with the 
recommendations. I will ask our other two panelists to comment 
as well, because I am going to try and make my way in a number 
of rounds to deal with the recommendations and see where we go.
    Excuse my voice, I have laryngitis. It is been about a week 
now. So, in any case, it is a little squeaky.
    The first recommendation that is made is that FDA should 
seek statutory authority, if necessary, to strengthen existing 
requirements related to lot-specific information, specifically, 
to require processors, packers, manufacturers to create and 
maintain lot-specific information and extend it to all entities 
not required to maintain this information.
    Now, to be clear, you are recommending that lot codes be 
mandated for all products and that all persons be required to 
maintain those codes for all products under FDA's jurisdiction. 
Is that correct?

                        LOT SPECIFIC INFORMATION

    Mr. Levinson. We are talking about lot-specific information 
with a recognition that lot-specific information may, in terms 
of the technology, involve a variety of approaches. And I would 
ask my colleague, Jodi, to talk more about that.
    Ms. Nudelman. The other thing, from the study, we are not 
making any comments about farms. So in our study, we are 
saying, to extend the requirement to keep lot-specific 
information to distributors, wholesalers, storage facilities, 
and the retailers. But from the extent of our study, we could 
not make any comments on farms.
    Ms. DeLauro. Or foreign entities?
    Ms. Nudelman. Correct. That was the limitation to our 
study. We traced these 40 products back to the border or to the 
source, and it did not include any foreign entities.
    Ms. DeLauro. Restaurants were exempted as well; is that 
right?
    Ms. Nudelman. Correct.
    Ms. DeLauro. So it is restaurants, farms, and the foreign 
facilities?
    Ms. Nudelman. Correct. We cannot speak from them.

                          STATUTORY AUTHORITY

    Ms. DeLauro. Let me ask you this question. Why do you 
suggest that statutory authority might be needed for this? Did 
FDA suggest that to you? And for what parts of the proposal do 
you think legislative authority would be needed?
    I ask this because you are talking about statutory 
authority, again versus regulatory authority. And we did deal 
with a rule--I have comments on the rule and where we weakened 
the rule before, but there was a rule-making authority that the 
Agency had.
    But here you are suggesting that there be, again, as I say, 
a statutory authority. Can you explain why?
    Mr. Levinson. Well, I think we have included that without 
necessarily, as an office, opining on whether that authority 
already exists or not. And not serving as the chief legal 
officer of the Department and having gotten the sense that 
there is, at least historically, some uncertainty about how far 
the original 2002 law goes in the kinds of authorities we are 
talking about, our purpose really was to take this very 
important, we thought, snapshot of the historic record when it 
came to what has transpired since the passage of the law and 
the regulation.
    And noting how nearly 60 percent of those we contacted were 
not in compliance, and with one out of four not even knowing 
about compliance, we certainly felt strongly that Congress 
needed to revisit this. And if, indeed, there need to be some 
statutory changes, it would be certainly timely.

                            BIOTERRORISM ACT

    Ms. DeLauro. Well, I will make the point here about the 
earlier rule, which were the limitations of the Bioterrorism 
Act; because at the outset, it was more fulsome, if you will, 
than what it turned out to be, and farms totally excluded, all 
foods under the exclusive jurisdiction of USDA totally 
excluded, restaurants totally excluded.
    Access to records, FDA must have reason to believe that 
food is adulterated and that it presents a threat of serious 
adverse health consequences or death to humans or animals.
    And the final rule was weaker than what the draft rule was. 
I mean, this was in the act, if you will. But then, you know, 
the final rule was weaker than the draft rule.
    All foreign persons except those transporting food in the 
U.S., were excluded. And at the time, OMB estimated that it 
exempted about 225,000 foreign entities, even though it said 
that the large number of excluded foreign entities increased 
the likelihood of hampering trace-back investigations.
    The requirement to keep a record of lot-specific 
information, which applies to all entities, was limited to 
manufacturers, processors, and packers in the final rule. And 
yet, again, OMB said that the reduction in benefits from doing 
so was high, estimated that the length of trace-back times 
would be sharply higher under the final rule than under the 
draft rule.
    And there was a change in that the requirement to make 
records available to the FDA in a food emergency was changed 
from 4 to 8 hours, to not to exceed 24 hours. And then all 
retail outlets with fewer than 10 full-time-equivalent 
employees were excluded.
    I am just going to ask, I understand the issue of the high 
cost on other firms, if they--you know, a number of these folks 
were included, but it is estimated that trace-back times for 
many of the products would be 1 to 14 days, with all parties 
keeping code records, compared to 6 to 8 weeks without all 
companies keeping them. And that was really known at the time, 
and so forth.
    I want to ask our two other panelists--I know my time has 
expired, but very briefly--not to comment on statutory versus 
rule-making, but just on strengthening the existing 
requirements with regard to lot-specific information, if you 
could briefly comment.
    Craig.
    Mr. Henry. Thank you, Madam Chairwoman.
    I think the best person or best entity to address the value 
of it is certainly FDA, and I think that Mr. Levinson qualified 
that in his statement.

           STRENGTHENING TRACEABILITY THROUGH THE SUPPLY ACT

    As I stated before, in order to address traceability and 
strengthening it through the supply chain, responsibility needs 
to be levied at all levels. As the testimony, I think, across 
the board today shows, there are two primary directions that we 
must be focused on. One is certainly the upstream, which gets 
back to the source of the contamination, and that needs to 
happen with rapidity. The downstream is going to be the 
turnabout, once you know where it is coming from.
    Now we have to get to the consumer's pantry to build their 
confidence as quickly as possible. If there is a breakdown in 
not being able to identify a particular product by lot code, 
either for the consumer or for the person vending that product, 
there is now a gap. And I think that is very evident in the 
survey that the IG has quoted.
    And then I would default, I think, to Tom, because his 
process does speak to the entire trackability or traceability 
all the way down the system.
    But I would also like to qualify and bring the 
subcommittee's attention to the idea of interoperability. It is 
not as easy as it sounds. And GMA fully supports the need to 
focus in on the pilot program, the pilot study, so that we can 
define from the bottom up what is practical, what is feasible, 
what is cost effective; and make sure we are getting the 
response we need, an end result which is better consumer 
confidence and safer food products.
    Ms. DeLauro. Tom.
    Mr. Stenzel. In my layman's opinion, I would suggest a 
rule-making issue, even though you have asked us not to comment 
on that.
    Ms. DeLauro. Well, I am happy to have you comment because 
we apparently have the ability to do that.
    Mr. Stenzel. I believe so.
    The two key aspects, I think, for the produce industry--the 
farm exemption I don't think is a problem; I think it is still 
appropriate. In our case, the product is sent to a first 
handler, the person who packs the box, and it is that person's 
responsibility to maintain the lot information, where it came 
from. So having a set of records at the farm level would 
probably just be a duplication of what it goes through at the 
packer level. So we think that is acceptable.
    On the question of FDA access, other than when they suspect 
that there is a contamination problem, we do think that is 
important. FDA should be able to go out and look at records now 
when there is not problem and help find those problems.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you. I am going to yield to Ms. Emerson 
for right now and then come back, because she was here first.
    Ms. DeLauro. Yes, she was. Ms. Emerson.
    Mrs. Emerson. Thanks, that is great. I appreciate it.
    Thank you all so much for being here, Madam Chairman or 
chairwoman or chair--I don't know what to call it.
    Ms. DeLauro. It makes no difference.

                        TRACEABILITY REGULATIONS

    Mrs. Emerson. Mr. Levinson, I want to ask you about the 
traceability regulations you tested in this study and which 
were required by the Public Health Security and Bioterrorism 
Preparedness and Response Act.
    The authorizing language gives the Secretary authority to 
access records when there is a belief the food has been 
adulterated and threatens public health. Your testimony states 
a concern for the thousands of Americans who have become ill 
after eating contaminated food and beverages.
    In your opinion, is the fact that the authorizing language 
refers to adulterated food and was included in the Bioterrorism 
Act relevant to the purpose of the regulations? And, 
essentially, is the authority granted under the Bioterrorism 
Act to respond to adulterated food broad enough to cover all 
discovered food-borne illness, or should it be limited to 
terrorist incidents?
    And then my last question about this subject is, should we 
be trying to patch together a traceability system from a 
Bioterrorism Act, or should we start with a whole new public 
law, as Rosa kind of referred to?
    Mr. Levinson. Mrs. Emerson, we, as an office, like 
virtually every OIG office in government, doesn't try to serve 
as a policymaker to advance a particular policy proposal. This 
study came about, in large measure, because in talking with 
FDA, FDA itself told us it was unsure as to whether there was 
enough compliance with being able to know, when it comes to 
food traceability, whether it would be possible to trace foods 
subsequent to the 2002 law.
    And we actually moved from one project to this one, sharing 
their concern that this looked to be a pretty important matter.
    I would leave the science, really, to others as far as 
contaminated versus adulterated, but I think we move forward on 
the study on the assumption that the law, as passed by 
Congress, envisioned the ability in a food emergency to be able 
to trace food in a way that, given these results, indicate that 
we don't have the compliance that was envisioned by Congress.
    Mrs. Emerson. Well, it certainly seems that--and obviously 
this is not your fault, and we are happy that you found it. But 
when you consider that only 5 of 40 products were traceable, to 
me, that is a pretty disappointing record of compliance. And 
with only 2 of the 38 facilities having lot-specific 
information, it does suggest that we have a significant issue 
with enforcement.
    Am I mistaken in that?

                              ENFORCEMENT

    Mr. Levinson. Well, with respect to enforcement, I think 
one of the hurdles that exists in the structure now is that the 
FDA can take action on the criminal side if it believes that 
there has been a failure to adhere to the requirements of the 
Food, Drug and Cosmetic Act.
    That is almost too severe a regulatory regime, if you will. 
And it would actually be helpful, as per our recommendations, 
to think about a compliance regime that wouldn't put FDA to the 
test of having to, in effect, build a criminal case. And I 
think our own experience indicates that there is a lot of 
noncompliance that has nothing to do with some kind of criminal 
motive to evade the law.
    Mrs. Emerson. So fines, or something like that, might be 
better?
    Mr. Levinson. This is a good time for Congress to revisit 
this provision. There are many areas of human endeavor where 7 
years doesn't make a whole lot of difference, but when you 
consider where we were as a nation, and in this area of 
information technology in 2002 and where we are today, and I 
think the conversation about the GS-1 data bar is a good 
example of how things continue to evolve in IT at a very rapid 
rate.
    We have talked about health IT for these last few years, we 
obviously now are in the world of food IT. And things are 
moving rapidly enough that these are the kinds of issues that 
perhaps can be grappled with in a much more cost-efficient way 
than perhaps could have been done historically, making the 
revisiting of this issue especially timely today.
    Mrs. Emerson. Okay. It looks like I am out of time. Thank 
you, Madam Chair.
    Ms. DeLauro. Thank you for the questioning. And I just 
might say that technology has moved ahead, yet we haven't moved 
ahead with public policy.
    But, also, there needs to be a monitoring system that 
exists. You can have the information, but not be able to do 
anything with it, which is where we are at the moment in 
whatever the information is. As limited as it is, there isn't 
any way to track or to monitor anything that is happening.
    Mr. Bishop.
    Mr. Bishop. Thank you very much. This testimony is very 
fascinating and I think it is very timely. And I want to thank 
you for the information you are bringing to us.

                             FUNDING LEVELS

    Dr. Levinson, from your perspective as the IG, I am 
interested in whether or not, based on your study and your 
knowledge, you feel that FDA has sufficient resources and tools 
at this point in time to accomplish--let's assume that we are 
able to tighten up the traceability and give what is necessary 
for that, do you have the necessary personnel, do you have the 
necessary laboratories, the equipment?
    Is your organizational structure such and are you staffed 
such that adequate time and effort can be placed on the food 
safety issues that we are concerned about, as opposed to your 
other responsibilities with drugs?
    And are you in a position to say that Congress needs to 
look at perhaps some reorganization in terms of how those 
responsibilities are handled and how the resources are 
allocated? Because, as I understand it, USDA, with meat, fish 
and the poultry, has many more inspections, many more personnel 
available per facility, than FDA does on a ratio basis.
    So tell me about that, about the resources, the 
organization, the structure, do you have what you need, or do 
we need to look at trying to provide some additional resources?
    Mr. Levinson. Mr. Bishop, this particular study was not 
undertaken to look at FDA in any global way and, indeed, it is 
one among at least a dozen reviews of FDA work that the OIG has 
done over the last few years in specific areas. We really don't 
serve--we wish we could, perhaps, in a more ideal world, but 
given our own resources, if you set aside Medicare and 
Medicaid, as an office we have about $40 million to oversee 
over $100 billion of HHS programs. And therefore, we do our own 
cost-benefit analysis of what we are going to look at.
    We have looked at this particular area, and we really can't 
speak to the overall picture of FDA. We certainly, in the 
course of the reviews we have undertaken of FDA work, we have 
revealed, surfaced a number of recommendations for change that 
we would strongly----
    Mr. Bishop. I am not sure that I understand from your 
rhetoric the answer to my question. What I want to know is, do 
you have enough resources? Do you have enough funding? Do you 
have enough staff, anything else that you need to satisfy the 
American public, to satisfy the Congress that you can do what 
is necessary to keep our food safe?
    And if you don't, tell us, so we can try to make provisions 
so you can have what you need. But if you don't tell us what 
you need, we can't provide it.
    Mr. Levinson. I understand and I appreciate the question.
    Mr. Bishop. Having done all of these studies that you are 
talking about, and as the IG, you have to look at the whole 
Agency. And looking at the whole Agency, you have to know 
whether you have to make, as you say, cost-benefit analysis 
decisions on how you use the $40 million of resources that you 
have.
    So if that is not enough, tell us. If you need more people, 
tell us. If you need more authority, tell us.
    Mr. Levinson. Well, we are very grateful for the funding 
that the OIG does get at HHS, and we would need--
    Mr. Bishop. Is it enough?
    Mr. Levinson. We are certainly stretched with the 
responsibilities that we have. But I think what you are getting 
at, really, are the resources of the FDA, not so much the 
resources of the OIG. And with respect to the resources of the 
FDA----
    Mr. Bishop. That is what I am asking.
    Mr. Levinson. Yes. In the first instance, it is important 
to have that question posed to the FDA.
    Mr. Bishop. I am sorry, I didn't mean to be ambiguous. I 
thought that you were the OIG for the FDA; is that correct?
    Mr. Levinson. Well, the FDA is one of 300 programs and 
agencies of HHS----
    Mr. Bishop. The HHS, okay.
    Mr. Levinson [continuing]. That the OIG, as an independent 
body, looks at. So we do consider the FDA part of our oversight 
responsibility, and we feel an important responsibility to 
report to Congress on what we find when we do reviews like this 
of FDA operations.
    But we think it is very important that you have an 
opportunity to pose exactly that question to the FDA when the 
opportunity presents itself.
    Mr. Bishop. We will.
    Ms. DeLauro. I can't let the moment pass. It is one of the 
reasons why we should have a food safety agency that is 
independent, because then it would have its own IG. And I am 
not saying that you haven't done your job, you have done a 
great job, but it would be a different set of circumstances.
    Mr. Kingston.
    Mr. Kingston. Thank you, Madam Chair. I want to just walk 
through some numbers to make sure everybody keeps something in 
perspective here. We certainly want to do everything we can on 
food-borne illnesses, to attack this, but frequently in 
politics we concentrate on the factor of fear, to use our own 
positions to get reelected and prove our own importance.
    These are facts. This is a number--and of course if anybody 
can dispute it, that is what we are here for, but as I recall, 
76 million people a year get food-borne illnesses. According to 
our testimony, Mr. Levinson, 300,000 get hospitalized, 5,000 
die.
    Big number, 74 million, but if you look at eating three 
meals a day, supposing we never have snacks, 300 million people 
in the population of the United States, 365 days a year, if you 
divide that 76 million by that number, you are talking about a 
.002 percent in terms of food illnesses--the point being, we 
have a remarkably safe food supply.
    And we need to keep that in mind, that there are a lot of 
things out there working--no thanks to the Federal Government; 
it is there because the private sector works. They have an 
incentive to have their customers keep buying from them because 
dead customers don't return.
    And so we need to keep that in mind. Sometimes we just 
continuously beat ourselves up and spend a lot of money.
    I want to pick on my friend's testimony--not my friend, Mr. 
Henry, but I want to pick on GMA a second.

                           FDA FUNDING LEVELS

    In terms of FDA funding, do you know how much of an 
increase they got last year?
    Mr. Henry. Mr. Kingston, I believe that they got--I am 
going to say close to $100 million. I know we were originally 
proposing, in the coalition, a $200 million increase over a 5-
year period. And I did not bring that number with me, but I 
want to say that--for sure, I know they got $40 million, but I 
don't know exactly what that number is.
    Mr. Kingston. Actually, it was about $200 million in the 
supplemental and then in the omnibus----
    Ms. DeLauro. Three hundred million total.
    Mr. Kingston. Three hundred million.
    Now, that being the case, your first recommendation was to 
give a comparable increase. If you thought it was 100, and you 
are shooting to double that to get to 200, and now that we have 
told you it is over 300 million, should we drop this 
recommendation from your testimony?
    Mr. Henry. No, absolutely not.
    Mr. Kingston. The sky is the limit when it comes to tax-
funded--there is no deficit problem here.
    Mr. Henry. Right.
    Mr. Kingston. Okay. I just want to say the FDA got a ton of 
money in the last cycle.

                       COMPETENT HANDLING OF FDA

    Do you feel that they competently handled spinach, tomatoes 
or peanut butter?
    Mr. Henry. I believe that they handled those issues as 
effectively as they could with the resources that they were 
able to apply at the time, yes.
    Mr. Kingston. You know, there was a lot of collateral 
damage, millions of dollars lost by innocent, law-abiding 
farmers and producers because of, you know, tomatoes, peanuts, 
and there is no compensation for those folks.
    Mr. Henry. No.
    Mr. Kingston. I think one of the things we have to focus on 
is not just giving FDA more money, but giving them more 
competency in terms of using the technology that is out there 
today to rifle-shot rather than shotgun and go through the 
world scaring everybody. And I am looking to GMA to be helpful 
on that.

                     VOLUNTARY VS MANDATORY RECALL

    Now, the other thing is--two more criticisms to my friends 
at GMA. You have an Orwellian statement in here that I have got 
to take exception to: ``Give FDA mandatory recall if a company 
has refused voluntary recall.'' There is nothing voluntary 
about it if they refuse to do it and then they are going to 
have mandatory recall, right?
    Mr. Henry. Yes. According to the current programs, it is a 
voluntary action for a manufacturer to issue a recall. And at 
this particular time, except for infant formula, FDA does not 
possess the authority just to go in and execute on their own, 
so they take the next action, which is to put out an alert, and 
then work with the States to actually, if you will, control the 
distribution of that product in the marketplace.
    So you are right, it is mandatory and voluntary in the same 
statement, but we are saying, Look, if the voluntary action, 
which is the option of the manufacturer, is not exercised and 
there is serious threat to human life, then FDA should have 
that mandatory authority where they can come in and say we are 
going to execute a full-blown recall.
    Mr. Kingston. But I think we need to be frank and say that 
it is mandatory, rather than mandatory if they refuse the 
voluntary. Because it is just so Orwellian for us to be living 
in a government that talks like that.
    Mr. Kingston. Last criticism. When you say you seek swift 
improvements, we all get frustrated when we want swift stuff, 
but swift action sent formaldehyde-laden trailers to the gulf. 
Swift action got us into a war looking for WMD. Swift action 
rushed a TARP program through that allowed AIG to have lots of 
bonuses and other unintended consequences. So sometimes slow 
deliberation is important.
    An example, I think HACCP has worked actually fairly well 
on food safety, and that was a slow piece of legislation that 
went through the process, but I think through that there was a 
lot of vetting.
    But also, as Mr. Levinson has pointed out, technology is 
just moving at a remarkably fast pace, that there are so many 
more tools now that we would not have had 4 years ago. This 
Universal Products Code thing that I hadn't seen before, I 
don't really like those little stickers on my apples because I 
have got to peel them off, but this one kind of makes sense.
    I know I am out of time and I yield back.
    Ms. DeLauro. Thank you very much, Jack. I just think it is 
interesting, with your first comment with regard to the 
numbers, it winds up being about one out of four Americans who 
get sick when you take a look at those numbers and you try to 
break it down, which I think is significant. If you take a look 
at this, it is one, two, three, four, and you go down the list 
here, it goes through--and the other thing is I think your 
point is absolutely right about what has happened to the 
industries, which is why we have had such an outcry.
    But when you think about the last peanut butter outbreak, 
nine people died. Some child, some mother, some relative of 
someone died because they ate some peanut butter-based product. 
Who could have thought that peanut butter would be an at-risk 
food, given the process. So it has very some very, very broad 
ramifications.
    Let me look at the second recommendation. It has two parts. 
The first in the set is that each facility that handles a food 
product maintain records about every facility or farm that 
handled the product along with relevant lots. Typical 
information.

                       RECORDKEEPING REQUIREMENTS

    To be clear, does your recommendation mean that the 
retailer would ultimately need to keep records about all the 
steps--growing, packing, processing, shipping--of every product 
that it sells? And since your report indicates that there are 
problems in implanting one-step-forward, one-step-back 
traceability, do you think that this is realistic? And which 
lot-specific information do you consider relevant?
    Mr. Levinson. Madam Chair, I am going to ask my colleague 
to respond. She has done such extraordinary work on this and I 
want her to have an opportunity to inform you about this.
    Ms. DeLauro. Okay, Jodi. Go ahead.
    Ms. Nudelman. I think you are referring to our second 
recommendation where we are saying--beyond lot-specific 
information, we are saying more of a type of system where--and 
we are making suggestions for FDA to consider in this area, but 
to use the technologies we have been talking about, to have 
standards set where in electronic format there would be the 
type of information that could be standardized across 
industries so that could be eventually----
    Ms. DeLauro. It would----
    Ms. Nudelman. That is one of the possibilities we are 
offering.
    Ms. DeLauro. It would appear that the proposal would seem 
to put the ultimate burden of traceability on the retailer. Is 
that accurate or a misreading?
    Ms. Nudelman. That is not what we meant there. We had meant 
there for FDA to think about broader things here. So to go 
beyond the one-up/one-back rule, to talk about technologies 
that could be linked so that the product itself could be traced 
back through each stage of the----
    Ms. DeLauro. But you are talking about the retailer keeping 
records, correct?
    Ms. Nudelman. Correct.
    Ms. DeLauro. Of all of the steps.
    Ms. Nudelman. We are offering a couple of combinations 
here, so we are not being very prescriptive in this 
recommendation. We are saying that because we know that there 
are a lot of technologies out there, the industry has some new 
thinking. We are leaving this one open and saying, but it is 
time to think beyond keeping one-up/one-back. It is time to 
think of systems that could be interlinked, interoperable 
systems that would allow for traceability through each of the 
stages.
    Ms. DeLauro. It just seems to me, though, that that does 
lead to the retailer in the way in which you would have to do 
all of that, and the retailer having that complete set of 
information. It almost appears to eliminate the need for 
traceback since the retailer would have that information.
    But also I don't know what your sense was in terms of 
retailers. Are they adequately equipped to establish and to 
maintain the records? And I don't know what you turned up in 
your findings with regard to that.
    Ms. Nudelman. Again, as you alluded to, though, the sample 
size that we were looking at was pretty small. But from that we 
could tell a number of the retailers weren't even aware of some 
of the requirements to maintain records just about their 
sources. So that was one of the things we brought to FDA's 
attention in this report; that they need to provide some 
further education in that sense.

                      TECHNOLOGY FOR RECORDKEEPING

    Ms. DeLauro. Okay. The second recommendation is that the 
FDA should require facilities to use certain information 
technologies to help facilitate recordkeeping. Which 
technologies did you have in mind? Do they currently exist, or 
would we have to establish them?
    Ms. Nudelman. Again, this is what I was alluding to in the 
first point where these technologies were referenced earlier 
that could--if you provide certain standards that could be in 
electronic format, which is one big jump here, because we did 
find a lot of paper-based records; so in electronic format, 
where people are keeping the same type of information and that 
information could then be linked across specific facilities 
here. So, again, we are not being overly prescriptive. We know 
that others have looked at it----

                               SAVED TIME

    Ms. DeLauro. Just a final question. Do you have any 
estimate of how much time, in terms of what you looked at, the 
FDA might save in tracing products if you dealt with the new 
technologies?
    Ms. Nudelman. We did not track the time of the products 
that we traced. At the same time, when facilities did have 
something electronic, they could immediately reference it and 
get to the source that we were asking for for a specific 
product. I mean, other just anecdotal evidence was that some 
facilities needed to look through stacks of paper or they would 
have part electronic, part paper, that didn't talk to each 
other. So I think it could be quite substantial.
    Ms. DeLauro. I will just leave it with this. If you do have 
other approaches that you thought about besides what you have 
mentioned that you think would be beneficial, we would really 
like to know about what your views are on that.
    Mrs. Emerson.
    Mrs. Emerson. Thank you, Madam Chair.
    Was it you, Mr. Henry, who mentioned that there really 
isn't any interoperability? You are the one who said that; that 
is correct?
    Mr. Henry. Yes.

                     COST FOR INTEROPERABLE SYSTEMS

    Mrs. Emerson. How much do you all anticipate it would cost 
to put together an interoperable system? No guess?
    Mr. Henry. No guess. It is a real challenge. And I think 
Tom's program that he has proposed lays the foundation and the 
system that could allow that to happen.
    One of the things that I brought with me in anticipating 
that, this is an excellent support document to Tom's testimony. 
This was just released from GS-1, which is a standards 
organization for traceability, but this was released in 
February of 2009 that addresses the particulars on that.
    Ms. DeLauro. Would the gentlewoman yield for one second, 
just to add, if you wouldn't mind, to your question about just 
sharing this issue of the lack of interoperability here. Just 
define that. That would, I think, be helpful to everyone.

                     DEFINITION OF INTEROPERABILITY

    Mr. Henry. Okay. The challenge when you develop a 
traceability program is there are a lot of interested parties 
or stakeholders there. You have the person that is supplying 
the ingredients, the person who is constructing the product, 
you have a distribution chain. You have got a first, second, or 
third-stage retail. Then you have got beyond what we would 
think to be the grocery store, down to other brokers, et 
cetera, et cetera.
    Everyone has a different need for the information they are 
harnessing; therefore, they will develop their own coding 
system. They will adopt proprietary systems. GS-1 is a 
proprietary system. When they adopt that, it is only for their 
needs, not for everyone else's. So if I create a system that I 
manufacture a product for Tom, but Tom is going to retail that, 
if he doesn't have the scanning equipment, the databasing 
equipment to capture what I put on mine by electronic form, 
then he has to do it in written form. Which is exactly where 
the IG's report is going.
    So when you do not have that interoperability--and I am 
only one supplier, so if everyone in this room was supplying 
Tom as a retailer with, let's say, 50,000 different products 
and we all were not unified in the coding system that we used, 
as well as the readability of that code, be it electronic or 
even manual, now you can see where the problem develops.
    Mrs. Emerson. How does the EU do it?
    Mr. Henry. Pardon me?
    Mrs. Emerson. Does the European Union have traceability? I 
think that they do.

                             EUROPEAN UNION

    Mr. Henry. Well, they do. And this is one of the things--
right now globally, and especially over in the EU, Kodak, of 
course, has traceability foundation and guidelines. Various 
countries, which some of those are enumerated in this report 
here, do speak to how they approach traceability. They are all 
still trying to struggle with the interoperability challenge 
and the cost. Especially when you really look at this, when we 
get down to traceability in the finest tune, we really are 
looking at the lowest common denominator.
    Now, one of the things I was not able to ferret out from 
the IG's report, or the survey, was specifically at what level 
of the food chain were some of these facilities, in quotes, 
really affected? Was it, you know, the mom-and-pop operation 
who is doing a small operation where they don't have a lot of 
money. You know, they may all be paper based.
    So we need to look at that level, because if we really want 
to improve recall and get the product out of the system, it has 
to be the lowest common denominator.
    Mrs. Emerson. I appreciate that. If we can't still get our 
first responders to be interoperable, I don't know how the heck 
we are going to get you all to be, but----
    Mr. Henry. I hope I didn't complicate that for you.
    Mrs. Emerson. No, you didn't complicate it at all. That is 
the bottom line. I appreciate your answer, although I guess it 
is just one more set of challenges with which we must deal. But 
thank you.

                    FDA AUTHORITY TO REQUEST RECORDS

    Mr. Stenzel, I want to ask you about your comments 
regarding highly visible action when an outbreak occurs and 
companies aren't in compliance. Would you support increased 
authority for FDA to request facilities records at any time, as 
recommended by the IG? I mean, is there any reason that FDA 
should wait for an outbreak to determine compliance, or is it 
better just to perhaps do a spot check here, a spot check 
there?
    Mr. Stenzel. Congresswoman, two parts to your question. If 
there is an outbreak and they find someone not in compliance, 
then that is the highly visible action.
    On the former question, should they have access to records 
to see if people are having one-step-up/one-step-down 
compliance, we believe they should; that that is a rulemaking 
issue. It probably ought to be part of a standard FDA 
inspection when they are looking at facilities to check on 
their traceability compliance.

                      INDUSTRY EDUCATIONAL EFFORTS

    Mrs. Emerson. I appreciate that. Having worked myself at a 
trade association in my past life, one of the big components of 
that was doing an educational program to help the industry 
comply with different standards, FDA or OSHA or whatever. What 
educational efforts do you all do to raise industry awareness 
of their legal duties in this regard?
    Mr. Stenzel. Well, we are certainly starting more in recent 
years than we used to do, quite frankly. And I think seeing the 
results of the IG's report, although only a few of those were 
produce items, it does make me think we have a responsibility 
to get out and do more education.
    I mentioned in the whole chain traceability, the 
interoperability that our industry is launching, that is where 
we are putting most of our focus right now. But perhaps there 
is a remedial step as well on simply compliance with the 
current rules.
    Mrs. Emerson. Thank you. Thanks, Madam Chair.
    Ms. DeLauro. Mr. Boyd.
    Mr. Boyd. Thank you, Madam Chair, and thank you for holding 
this hearing. Ladies and gentlemen, thank you for being here.
    First of all, I come from a place where I have long held 
the belief that we have the most adequate and safest and least-
expensive food supply in the world. And there are some things 
that have happened, obviously, in the last several years that 
have begun to crack that belief of mine and go into it and make 
me doubt it.
    First of all, I want to tell you that I come from an 
agricultural producing area and the last two most serious 
scares, the tomato industry--I have a major tomato industry in 
the district I represent that was literally destroyed. The 
industry, the farmers, were destroyed by that incident. And I 
also come from a large peanut producing area, which is now 
probably going to be seriously set back because of market 
effect of what has happened here. I think there are two reasons 
for the erosion of that confidence that I have.
    Number one is that we have, as we have gone over the years 
to open our borders and rush to do trade agreements, that we 
have not kept our safety systems up with stuff that was coming 
in from other places, as well as we should.
    And, secondly, this 24-hour news cycle. So when you have 
somebody that gets hurt, everybody knows, it and it just 
totally obliterates the market.
    I am going to get to my question, but I want to set that up 
for you to tell you that the tomato issue, as I know it today, 
still has not been nailed down by the Food and Drug 
Administration as to where it happened and what the product 
was. As a matter of fact, they probably pretty much concluded 
that it was not tomatoes. It was peppers in Mexico; am I right 
or wrong?
    Mr. Henry. Yes.
    Mr. Boyd. Okay. Now, I believe also that when you take a 
taxpayer's--the dollar out of his pocket and say you are going 
to protect the consumer with it, whether you do it at the 
local, State, or Federal level, that money comes from the same 
place. The most effective place to do all of this is closest to 
the consumer as you can get.
    Every State, all 50 States, have a consumer advocate food 
safety component in their State bureaucracies, right? I assume 
there is nobody out there sent from a State agency on this 
issue that has jurisdiction over food safety.

                    INTERACTION WITH STATE AGENCIES

    Now, Mr. Levinson, I have read your report or briefed it. I 
don't see anywhere in it where we have talked about interaction 
with the State agencies and use of their assets, their 
infrastructure, their people, their expertise, their knowledge. 
I have had several communications with my State agency folks, 
and not only did I find out that they weren't asked to be part 
of any of these investigations by FDA, in fact they were 
intentionally not shared information from the FDA. And they had 
access. My State agency had access to information which would 
help the FDA do the traceback.
    Mr. Levinson, did you address this? Can you speak to it? 
And I would like for you to speak it and also maybe one of you 
folks from the private sector, too.
    Mr. Levinson. Mr. Boyd, we have actually been asked by the 
Chair to look at the State inspection agencies, and we have 
work that we are in the middle of right now preparing for that 
specific request. This study is separate from that in the sense 
it was designed to see what the state of recordkeeping was 
pursuant to Congress' law back in 2002.
    But you raise an important, valid, and a very timely issue; 
and we are actually engaged, per the Chair's request, in that 
specific project.
    Mr. Stenzel. Mr. Boyd, if I could share a perspective also 
on behalf of those tomato growers in your district. There was a 
tremendous amount of information that was not brought to bear 
during the investigation that would have helped in the 
traceback. We think that is one of the most serious issues we 
have got here is just what the IG has done, is start these 
traceback exercises now. Let us do them now. Let us bring the 
State and locals and FDA and CDC together and learn the 
process, bring the industry into this process.
    Very quickly, we knew that tomatoes were not the source. We 
knew they were tracking back to different farms. There wasn't a 
common point. But we couldn't move the agency away from that 
conclusion until very, very late in the game. But I think if we 
could do more of these traceback exercises today, we could 
bring some of that expertise you are describing that exists not 
only in State and local governments, but in industry.
    Mr. Boyd. Thank you.
    Madam Chair, I know that you are going to focus on this 
issue. You have, and rightfully so, and I assume you will 
continue to.
    Can I request of you and the committee that we at least get 
some of those--I would like to have--since Florida, and now 
Georgia with your plant down there, your plant that buys my 
peanuts--it wasn't ours. It was the ones that you shipped in 
from China that caused the problem. I want everybody to 
understand that.
    So if we could have some State agencies come in here, and 
FDA, and put them in the same room and maybe some industry 
folks, too, with them--have them talk to each other about their 
inability to communicate with each other and to work together, 
share information; because, you know, Madam Chair, when you 
take the dollar out of the pocket of the taxpayer, he is 
funding both of those agencies and then didn't--not only did he 
not get his money's worth, it was counterproductive. They put 
him out of business for something he didn't do. So I would like 
to work with you on that.
    Ms. DeLauro. I am more than happy to do that. I think it is 
just critical that wherever we move forward, that even with the 
State laboratory systems, the State agencies that have these 
responsibilities, they need to be looped into this; because 
there is a lot of expertise at that level which is now not 
being used.
    I mean, quite frankly, Minnesota--the folks in Minnesota 
did an incredible job of identifying where the issue was and, 
unfortunately, with regard to tomatoes--and you were here, I 
think, at this last hearing that we had here, where they were 
still being let out on their own recognizance. Nobody has 
finished that up. So it continues to put the tomato industry in 
jeopardy. So I am happy to work with you.
    Mr. Boyd. Thank you, Madam Chair.
    Ms. DeLauro. Mr. Kingston.

                        INCREASE IN FDA FUNDING

    Mr. Kingston. Thank you, Madam Chair. I wanted to first of 
all say for the record, particularly for my friends at GMA, 
that FDA since fiscal year 2008 has had a 19 percent increase. 
They have gone from a budget of about $1.7 billion to over $2 
billion; $150 million in the supplemental in June of 2008 and 
$150 million-plus in the CR. If they needed--I mean, which is 
more than the money level you have been asking for. So I am not 
convinced money is their issue.
    But I wanted to move in a different direction. Mr. 
Levinson, the 300,000 people who are hospitalized, I would like 
to know the breakdown of how much of that was in the commercial 
arena and how much of it happened at home in terms of when the 
food may have gone bad? Don't you think it is relevant to the 
discussion?
    Mr. Levinson. That is a number from the Centers for Disease 
Control and Prevention.
    Mr. Kingston. Can you get it?
    Mr. Levinson. We will be happy to drill down as much as we 
can----
    [The information follows:]

    Response: I agree that this is an important part of the equation. 
The statistic you reference was contained in a CDC report entitled 
``Food-Related Illness and Death in the United States.'' In that 
report, CDC researchers estimated that there are 76 million illnesses, 
323,914 hospitalizations, and 5,194 deaths attributable to foodborne 
illness each year. In order to arrive at this estimate, CDC researchers 
compiled and analyzed information from multiple surveillance systems 
and other sources.
    In this report, CDC did not attempt to quantify whether any of 
those foodborne illnesses, deaths, or hospitalizations were linked to a 
contaminated food product or improper handling of the food. In 
addition, the study also did not quantify the number of illnesses 
caused by specific types of food. however, CDC is currently working on 
estimates for the number of foodborne illness that are attributable to 
different food types. These estimates are expected to be completed 
later this year.

    Mr. Kingston. Don't you think that it is extremely 
relevant? Because if this is a food-handling issue, we need to 
know how much food-handling plays a part in terms of the 
homeowner.
    The other thing is, do we have a breakdown of vegetable 
versus meat, or just the type of food, because there again I 
would think that would be extremely relevant. And would you 
agree with me that that is extremely relevant if we have 
300,000?
    Mr. Levinson. I think it is helpful to have more drilling 
down of the data than less, absolutely.
    Mr. Kingston. My good Chair never misses an opportunity to 
plug a single food agency. This is why we need it.
    And we may have a little overlap here, because what I do 
not like in this town that everybody is assumed guilty. And, 
you know, if we are talking 300,000 people a year being 
hospitalized, we should know a full analysis of where is it 
coming from. What if we found out it is 90 percent meat? What 
if we found out that it has happened because people are not 
washing the frying pan; the cold meat versus the cooked meat 
and things like that? That is extremely important.

                             IMPORTED FOOD

    The other thing is--and Mr. Boyd touched on it--how much of 
this is imported food? Because I am a little concerned about 
some of the issues on imported food that we don't want to 
overreact and then have them shut down their buying our food 
from us; which, you know, in poultry country we are concerned 
about China and we are trying to balance that out. But I think 
we need to know that. And then in terms of if people are all 
complying by the--so let me conclude that.
    You will get me those breakdowns, right?
    Mr. Levinson. Yes.
    Mr. Kingston. Okay. And then if everybody was playing by 
the rules now that are on the books, how much would this be 
solved, some of this problem? Do we know?
    Mr. Levinson. If my colleague wants to venture an opinion, 
I am not sure we can necessarily provide some sure-fire 
conclusion as to a solution that obviously is aimed to such a 
large part of the economy and how that is going to be handled. 
I am not quite sure that anyone would be in a position to give 
any kind of final answer.
    Again, this report is taking a snapshot of what happened 
when Congress decided, again pursuant to an antiterrorism law, 
to help ensure a safer food supply. And I think these results 
indicate that that kind of compliance regime has not revealed 
results. But I can't give you a going-forward conclusion as to 
what is going to work 100 percent.
    Mr. Kingston. Okay. I know, Madam Chair, there are some 
people who haven't had a shot at the panel. So I am going to 
yield back.
    Ms. DeLauro. Ms. Kaptur. We do have a total of seven votes. 
So Mr. Latham and then Ms. Kaptur. And I don't know how much 
time is left on the first vote. Ten minutes.
    So, Ms. Kaptur, let us have you move forward. And then, Mr. 
Latham, let me see if we can get you in, and then others can go 
and start to vote, and then we will recess and we can come 
back.
    I will be back and I am hoping others can come back.

                              FOOD IMPORTS

    Ms. Kaptur. Thank you, Madam Chair, very much.
    Mr. Stenzel, can I ask you, in your association for all the 
food throughput that comes from United Fresh Produce, how much 
of it is domestic and how much of it is foreign--just 
ballpark--and which segment is growing?
    Mr. Stenzel. The good news in fruits and vegetables are 
both are growing, and it is not through our organization but 
just in consumption in the United States. Imported products 
counter-seasonal to that grown in the United States have been 
growing in recent years. More than 35 percent of the fresh 
produce would be imported.
    Ms. Kaptur. Okay. In the community in which I reside, 
Toledo, Ohio, a number of our small markets go up to Detroit 
Farmers Market on any given day, purchase boxed items, and 
bring them back and distribute them.
    What percentage of those in the winter months would be 
grown outside the borders of this country?
    Mr. Stenzel. I would have to give you an estimate on that, 
but probably the majority.
    Ms. Kaptur. That is what I think. That is my take on it, 
too.
    I wanted to ask a question about--I was reading in Mr. 
Levinson's testimony here a statement, ``Only 5 of 40 products 
we purchased could be traced through each stage of the food 
supply chain back to the farm or border.'' And I wonder if you 
could comment on that, ``or border''?
    Mr. Levinson. Ms. Kaptur, we weren't looking at foods 
brought in from abroad, so the study does not include 
traceability, if you will, offshore or, for that matter, at the 
farm, at the source. We went as far as either the farm or the 
border, and then we looked at traceability domestically within 
that context.
    Ms. Kaptur. Didn't those jalapeno peppers come from Mexico? 
From everything you know, Mr. Levinson--is it Dr. Levinson or 
Mr. Levinson?
    Mr. Levinson. It is mister.
    Ms. Kaptur. Mr. Levinson, okay. Could you please tell us 
what can we do about that? From everything you know, from what 
you have studied, what could have prevented that in terms of 
traceability systems that could be put in place?
    Mr. Levinson. Ms. Kaptur, I guess that is why I am not a 
doctor. I really don't--I really can't answer that question in 
good faith and give you an answer that I feel in good 
conscience would be really responsive to what I think you are 
getting at.

                   EXCLUSIONS IN THE BIOTERRORISM ACT

    Ms. DeLauro. Marcy, I just would make this point, in all 
fairness to Mr. Levinson. The rule which came out with regard 
to the Bioterrorism Act, all foreign persons except those 
transporting food in the United States were excluded. The 
original rule had them included. When the final ruling came out 
it was excluded.
    So that is not--also, in terms of exclusion, farms are 
totally excluded. Foods under the jurisdiction of the USDA. 
Restaurants are totally excluded as well. So there are certain 
categories of exclusion. And what the report reflects is what 
was included, in essence. So your question is very relevant and 
it is one to be asked about how to deal with this, but----
    Ms. Kaptur. It is so great that you are Chairwoman of this 
committee. It is just so great.
    I am thinking back to the strawberry situation also. That 
was from Mexico, and all these kids in Michigan got sick in our 
neighboring State. It probably came from the Detroit market and 
was redistributed. So, you know, we have got to do something 
about this.
    And the only comment, Madam Chair, as I end, is saying that 
the costs for some of this--also we have to think about how it 
impacts little local producers that are producing in our local 
communities and how we allow them to bring their product to 
market, and they are not a part of some big giant international 
corporation, and whatever regulations are adopted, how we have 
some sympathy for the small producer in all of this.
    Thank you, Madam Chair.
    Ms. DeLauro. Mr. Latham.
    Mr. Latham. Thank you, Madam Chair. And welcome, everyone.

                        TRACEABILITY PRIORITIES

    A consumer today can go to almost any grocery store in 
America and buy something that is ready to eat, made in China, 
and we really have no idea where that wheat came from, what 
kind of water was used in the cooking process there as far as 
the noodles, and they are in most of their ingredients.
    Considering whether you are comparing food safety systems 
in the U.S. or in China, and if Congress increases funding for 
the FDA--as has been requested previously--which is the highest 
priority, do you think, as far as inspection of that foreign 
food or the traceability system in grain?
    And I have got a question about traceability in grain, too. 
But where would you go?
    Mr. Levinson. Mr. Latham, I sense that there is probably 
some good expertise within FDA, because I have had a 
conversation about this with Mr. Acheson himself, who handles 
this area, and he is very familiar with the international 
regimes that kind of exist to watch over the food supply in 
Europe and elsewhere. And I certainly am eager to offer the 
technical assistance of our office, because this study was done 
by some outstanding evaluators in our own operation. I think 
that really requires additional expertise that is not in this 
room right now.

                    COMMINGLED AGRICULTURAL PRODUCTS

    Mr. Latham. Okay. Just coming from an agricultural area 
that produces huge quantities of grain--and apparently in your 
testimony you talked about how that, in a bag of flour, you 
can't trace where the wheat came from to individual farmers. I 
mean, have you ever seen how wheat is handled or corn is 
handled or whatever? It is virtually impossible to trace back--
--
    Mr. Levinson. Right.
    Mr. Latham. This would be extraordinarily expensive and 
unbelievably onerous.
    Mr. Levinson. Mr. Latham, we are certainly keenly aware of 
the commingling challenge, if you will, and that when it comes 
to those kinds of foods it is really important. And, indeed, I 
think our recommendations reflect the need to work with 
industry to come up with a regime that isn't impractical, 
unrealistic; that takes into account the realities of how life 
works with respect to those kinds of foods. Absolutely.
    Mr. Latham. Okay. I think we are very much out of time.
    Ms. DeLauro. We are going to recess subject to the call of 
the Chair, but we will be back.
    [Recess.]
    Ms. DeLauro. I am going to proceed. I am going to assume 
that there will be others joining.

                      AUTHORITY TO REQUEST RECORDS

    Very, very quickly, let me just say--because I think it was 
my colleague Mrs. Emerson who asked the question about FDA 
seeking statutory authority to request facilities records at 
any time, and currently they can only request the records if 
they have a reasonable belief that the food presents a serious 
threat to health. I think it was you, Mr. Stenzel, who said you 
believed they should be able to do this at any time.
    Mr. Stenzel. Yes, Ma'am.
    Ms. DeLauro. Mr. Henry.
    Mr. Henry. We would concur.
    Ms. DeLauro. Mr. Levinson.
    Mr. Levinson. Good. Sounds to me, Madam Chair, good----
    Ms. DeLauro. That is what your recommendation----
    Mr. Levinson. Yes.
    Ms. DeLauro. Okay. I just want to make sure that we 
establish some principles. I will just try to put these things 
together.
    You mentioned with regard to--I have got to be honest with 
you. When we encourage FDA to develop additional guidance on 
traceability, I understand the language but I am tired of 
guiding. I want to try to regulate here. There is nothing wrong 
with guidance, but I think we need to look at how we try to 
regulate.

                           THIRD-PARTY AUDITS

    There was an issue about contracting with independent 
third-party auditors to monitor recordkeeping systems. I get a 
little bit nervous about that for self-serving reports and 
conflicts of interest. My view is that companies--why can't 
companies do this themselves? Mr. Henry?
    Mr. Henry. Yes, it can be done. The difference is in part 
there is what we consider first-party audits, which means I 
audit your own facility; second-party audits which I go, I am 
the buyer, and I audit my supplier, which has great value. 
There is value there.
    Now, again going back to the lowest common denominator, a 
smaller operator here in the United States doesn't have 
certainly the wherewithal to send a member of their staff 
overseas to do those audits. The position GMA has tried to take 
on this, and working very closely with FDA on third-party 
certification, is that harnessing a third-party auditor--and, 
again, remembering the food protection program is focused on 
export to the U.S., or the importer side--being able to use, if 
you will, a third-party auditor who has been properly 
certified, at arm's length, to evaluate accurately a foreign 
supplier has great value and great merit, especially for those 
manufacturers or buyers here that just do not have that 
wherewithal. And I think that is an excellent use of tax 
dollars because now you are having FDA at least bona fide the 
auditor who is executing as well as establishing some guidance 
for the criteria. Okay?
    Ms. DeLauro. Well, I think that means that there has to be 
some real oversight of that process.
    Mr. Henry. I concur. And the oversight----
    Ms. DeLauro. Otherwise----
    Mr. Henry. In fact, I have asked FDA in an upcoming Webinar 
we are going to do, the industry is very much interested to see 
how the shrimp pilot program works out, and we think that the 
walk-behind value is where the FDA, using their inspection 
which is part of the process to improve food safety, is able to 
back into that facility that, quote, is certified and confirm 
it, validate that it does meet the mark.
    Ms. DeLauro. I think the most recent example which really 
wound up with this peanut butter salmonella thing being almost 
a perfect storm was because you had--I understand the 
contracting out to the States for inspection, but one has to 
have a set of criteria in which you ask them to do that. But 
then you have to monitor whether or not they are retaining that 
criteria, and then you have to have some reports back. So if 
you find something, it has got to come back in some way.
    Tom.

                          TRAINING INSPECTORS

    Mr. Stenzel. If I could just add another factor here that I 
think is going to be important is the training of the 
inspectors themselves. And that is one of the things that you 
support in terms of a consistent national training regimen. So 
whether they are State employees or local or even third-party 
private, that they would have the same level of qualification.
    Ms. DeLauro. I think that is also true. I don't know you 
would concur with the laboratories. I mean, these are qualified 
people, but we have to make sure that we have very trained and 
qualified people in those labs. You find it in Minnesota but, 
you know, you don't find it someplace else and so forth. So my 
view is it ought to be looped into this process as well.

                        CHOICE OF PRODUCT SAMPLE

    A quick question on the products. How did you choose the 
products? That is a question that I have. We have got ice, 
manufactured ice. Look, I am a novice at this. Manufactured 
ice, why was it chosen? Inclusion of flour. What was the 
criteria? Did you give FDA the criteria? Did they give you the 
criteria?
    What was it with regard--because my colleague Mr. Kingston 
spoke about dealing with foods that have the highest risk as a 
way of trying to deal with this, and I think--were they 
considered with regard to their role in terms of causing a 
food-borne illness?
    Ms. Nudelman. We developed a number of factors to pick--to 
select these foods in the end. We did consult with FDA, and so 
we were looking for relatively common sort of basic-type foods 
that had ingredients we could essentially trace, that weren't 
overly processed so it would complicate the study. But they did 
sort of gear us towards food products that they were interested 
in knowing more about, that they were unsure whether they were 
risky or not, and then asked us for--in the case of tomatoes, 
to look at something that they considered quite risky. So it 
does have a combination of factors that we looked at.
    Ms. DeLauro. A final quick question with regard to that. If 
FDA did give you the list, did it include products that you did 
not trace? And if so, what were they and why did you not 
include them?
    Ms. Nudelman. It was more of a discussion with them. They 
did not select specific products that we then chose from. We 
came together. We said that we were considering these types of 
products. They geared us towards particularly looking at the 
eggs. They had asked us to include that at the very end. So it 
was a consultation with them is how I would pose that.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you, Rosa.

                  COMPLIANCE WITH CURRENT REGULATIONS

    Mr. Levinson, in your testimony in terms of records 
requirements, you said that 59 percent did not maintain the 
contact information required by FDA. Then you talked about some 
of it was logistics problem, paper records versus electronic 
records, but 59 percent basically were out of compliance. So if 
all these were in compliance, playing by the rules, how much 
would that reduce the problem?
    The short of it is if we follow existing law, existing 
regulations, how much of this would be addressed and 
alleviated?
    Mr. Levinson. Mr. Kingston, it would be hard to know 
exactly how much of whatever risk might remain would 
necessarily be alleviated. One of the requirements is to keep 
contact information. And we thought it was important to reveal 
that to the extent that we have, out of 118, something like 60 
percent or 59 percent of those who were asked, not being able 
to have the information, and then one out of four not even 
knowing that there was contact information that was required 
just reveals, in effect, a flaw in the regime that was set up 
by Congress a few years ago.
    As to whether if we had found that everybody had the 
contact information that that would resolve all safety-related 
issues, I guess that is something to look forward to another 
kind of study design.

                             OTHER RECORDS

    Mr. Kingston. Well, now, let us say they didn't have the 
right FDA information or whatever but they did have some 
records of their own, maybe for product liability reasons or 
whatever. Did you ask them about that?
    Mr. Levinson. One of the interesting things that was 
revealed in the study is that actually some of the 
distributors, wholesale and storage facilities and retailers, 
actually had lot-specific information. It wasn't across the 
board everybody had a lack of information. There were actually 
some people who were not required to have lot-specific 
information who actually had it.
    Now, whether that was either out of safety issues or, 
perhaps more likely, for business-related reasons, I mean there 
really wasn't a consistent pattern----
    Mr. Kingston. I think if you were selling to Wal-Mart, they 
have a higher standard than, say, maybe the neighborhood 
grocer. I don't know. But I think that would be relevant to 
your whole investigation, study. And I use the word 
``investigation'' loosely. But if we are trying to reduce the 
number of traffic accidents and you have got people going 90 
miles an hour because they don't know the speed limit is 55, 
then we need to figure out how do we get you to comply with the 
existing law. Are you intentionally not complying or are you 
just totally ignorant, even though that is no excuse?
    But it would appear to me that would be part of our mission 
here is to get people in compliance with existing law so that 
we can get an adequate data sample.
    Mr. Levinson. Yes, absolutely.

                    COMMINGLED AGRICULTURE PRODUCTS

    Mr. Kingston. And also I wanted to ask Mr. Stenzel, fruit 
and vegetable really has been kind of ahead of many products, 
and it might be because it is easier. But I would imagine it 
gets pretty difficult when you get a blended product outside of 
the bulk commodity and it is mixed in with something. The 
reason why we know about that is because the definition of 
organic food gets to be very complicated when you start 
blending products together and chopping them up and so forth. 
What are you guys doing on that sort of product?
    Mr. Stenzel. I think you are right. I hope we are 
continuing to be out front on some of these issues. I think 
because we have fresh product that doesn't have a kill step, it 
is eaten fresh and wholesome, we are very sensitive to 
maintaining that integrity all the way through to the consumer.
    For example, in a bag salad product today, or mixed 
vegetables, great, great care is taken to maintain records of 
the incoming sources. So if it has got a mix of lettuce and 
carrots in the same bag, that processor does keep lot 
identification records on where the carrots or the lettuce 
would have come from.
    Mr. Kingston. On FDA, on spinach, tomato, you mentioned 
about the collateral damage, it certainly is very important to 
ensure the safety of people first. But along the way, it does 
seem like you can be counterproductive if you say that all the 
peanut butter, all the tomatoes, are tainted; because the next 
scare comes along and people aren't going to really believe 
you. So there is a danger of that.
    What are your recommendations to make FDA more effective, 
again using a rifle-shot approach rather than a shotgun blast?
    Mr. Stenzel. You are absolutely right, Mr. Kingston. I have 
called for in our industry for a total look at the way the FDA, 
the CDC, and State and local health departments cooperate in 
food-borne investigations.
    Mr. Kingston. This might be the Chairman's opportunity to 
underscore one agency.
    Mr. Stenzel. But that really is important. There is a 
diffusion of responsibility. There are different people going 
in different directions. And, really, we have seen in our 
industry in several of these outbreaks just how difficult it is 
to have--who is in charge. I have given the example of the 
National Transportation Safety Board; when there is an 
accident, that you know who is in charge. There is clear 
authority. The buck stops here. And we don't have that in any 
food-borne investigations.

                           MULTIPLE AGENCIES

    Mr. Kingston. Madam Chair, I think this is my last 
question, but I want to make a statement. Following up on 
conversations you and I have had along the way, my concern 
about a single agency is that we will still have other agencies 
who won't give up their control. And then if I am a producer--
and what I don't like is--you know, we need lots of small mom-
and-pop producers. It doesn't just need to be the domain of 
giants who can afford to comply with anything.
    What we want to do is make sure that for the mom-and-pops 
out there, you don't have 15 agencies that can come and harass 
them. Work with them, but not harass them and not make 
production impossibly expensive and prohibitive.
    So I think talking amongst yourselves as food groups is 
very, very important in terms of recommendations to streamline 
this, and then also to take advantage of new technologies that 
really and truly were not out there 5 years ago.
    The Chair and I came here when e-mail was not used in 
congressional offices. And I remember on 9/11 there were very 
few BlackBerrys. And now absolutely everybody has them, from 
the new staffer onward. But technology is evolving so quickly 
now that it is like telecommunications. We pass a law today, it 
is obsolete by the time the agencies flesh in the bones of it. 
So we need to be careful on the emerging technology.
    Ms. DeLauro. Thank you, Mr. Kingston. And I think it is a 
point. And particularly with the mom-and-pop efforts, we now 
have 15 agencies that deal in some way with a food safety 
responsibility, and I don't know that there is anybody who has 
laid it out so that they don't overlap with one another.
    Or talking about communication, which is what 
interoperability is about, it is about communication. If we 
think everybody is on the same wavelength and communicating, 
well, then we are just--I will show you a bridge you can buy 
maybe to nowhere.
    But in any case, you recognize a concern about what happens 
here, and that is about giving up turf, and that is a very, 
very difficult thing to do. But I think we are looking at a new 
environment, and I am not just talking about a new political 
environment with a new administration. And I think for me that 
is particularly helpful in this regard. But I think the new 
environment is what has happened in the various outbreaks of 
food-borne illness, and then culminating with nine people dying 
and industries potentially going out of business, that people 
are now beginning to say my gosh, maybe there is some relevance 
here for all of us. And your input into all of this is really 
critical for us to try to move forward in some way.
    I have about three more questions or so, because I don't 
want you to have to be here all day.
    This is about the Minnesota issue, because I think it is 
important in terms of what is in the public domain on that and 
what the findings are. During that investigation of salmonella 
in St. Paul last summer, there were a number of news stories 
about the process used in Minnesota to investigate food-borne 
illness outbreaks. Minnesota has seemed to pinpoint likely 
sources of contamination very quickly.
    In the salmonella case in particular, it appears that the 
State identified jalopeno as the cause before the FDA did. They 
were also able to suggest that the shipper was in McAllen, 
Texas, and that the peppers came from Mexico.
    In an AP story about the State's work, a representative of 
the State Department, of Agriculture, who did the actual 
traceback was quoted as saying, and this is a quote, ``A few 
phone calls and you can work it fairly quickly back to the 
grower.''
    This seems to be at odds with your findings, and it may 
have been fortuitous in that case that the outlet from which 
the people contracted their illnesses was a restaurant that was 
supplied by a large local distributor.
    So what I would like to have you do is for you to comment 
and for you gentlemen to comment as well. Minnesota and, you 
know, this comment about FDA.

                  DIFFERENCES IN MINNESOTA EXPERIENCE

    Mr. Levinson. Well, Madam Chair, I would certainly ask my 
colleague to comment as well. But my first reaction is how much 
I think the report has tried to be crafted in a way to give a 
snapshot of a system, you know, so that we look across a 
variety of suppliers, manufacturers, processors, and the types 
of food. I think that, anecdotally, I think once you drill 
down, you can find very important fact patterns like the one 
you are talking about in Minnesota that add either a level of 
complexity or a level of simplicity, sometimes, to what a 
solution might look like.
    And in a sense, I want to come back to your concern earlier 
about maybe the--what appears to be perhaps a weakness of the 
sixth recommendation; that FDA should conduct education 
outreach activities to inform the food industry about its 
records requirements. I do think that this is a terribly 
important area in which all of the key players--and the food 
industry is obviously a key player--and the FDA, I think, can 
hopefully craft an I&E effort that can really make a big 
difference in this.
    But let me turn the mike over to my colleague.
    Ms. Nudelman. I would just say that--I mean as we saw in 
our own study here, there is a lot of variability. And 
sometimes you can get back fairly quickly where there is one 
source to each piece. But I think what we try to do is make 
sure that you can trace that precise product back through each 
stage of the food supply chain. As many problems as you have 
back, you see a lot more problems going forward.
    So as we saw in our study, facilities were a lot less 
likely to know their recipients, who they are sending the food 
to, and that you have seen the example of the peanut. Still 
right now, they are still identifying where that peanut paste 
went, who the recipients are, and that has, of course, a lot of 
impact on where to recall the product.
    So I think there are a couple of answers to that--why the 
difference of their findings versus our findings.
    Ms. DeLauro. Gentlemen? Tom.
    Mr. Stenzel. I would comment on Minnesota. Certainly there 
is a degree of expertise and commitment and funding there for 
those investigators that is much above the bar, on average. I 
would also suggest, however, that there is an approach that is 
designed for public health first. That is, go as quickly as you 
can to find the source. And they are working through any of 
these variabilities. They are making those phone calls. They 
are asking questions. It is a very engaging process.

                 CRIMINAL LIABILITY-BASED INVESTIGATION

    What we have found with FDA is it is a much more linear 
criminal liability-based investigation. They want the records. 
A number of our wholesalers and distributors through the summer 
were asked, send me all of your records of all the tomatoes you 
sold in the last 2 weeks. So, thousands of pages. Even 
companies who had electronic records were asked to print them 
out and fax them to the FDA. So we have a problem of a 
different intent, I believe, in the traceback.
    Ms. DeLauro. In a paperless society, they are drowning.
    Mr. Stenzel. There is a lot that needs to be fixed in this 
regard, but that is one explanation, I think, for why strictly 
on a health basis we can move a lot more quickly than on a 
records factual--criminal basis.
    Ms. DeLauro. And particularly if you have identified foods 
that are at high risk, then you really--Mr. Henry.
    Mr. Henry. Yes. I think to echo part of what both of these 
gentlemen said, when you look at the State of Minnesota or 
other States, funding becomes a real issue. There are certain 
States out there that have almost a dearth of staff to take 
epidemiological reports on illnesses.
    And now you look at Minnesota where they do have a 
Department of Health and a Department of Agriculture. If they 
are all on the same page, which is more aligned, if you will, 
with a single type of agency, now you are getting conveyance of 
information very quickly to get to the issue, as opposed to the 
linear relationship that we see between CDC and FDA.
    CDC raises a red flag and says, hey, we think this is where 
it is; hence, the tomato issue. And I think that is where we 
need to have much more rapid transfer of information, not 
holding back, hopefully not worrying about litigation, et 
cetera, et cetera. Let us get to the source, let us get it off 
the shelf.
    Ms. DeLauro. Sam, do you want to go now?
    Mr. Farr. I will wait.
    Ms. DeLauro. Jack, you are okay?
    Mr. Kingston. I might need to make a motion that you guys 
can continue without me if you want.
    Ms. DeLauro. Okay. That would be great. Thank you.
    Mr. Kingston. So moved.
    Ms. DeLauro. So moved. Okay. Thank you. The issue is that 
we need to have----
    Mr. Kingston. We have a very conscientious Chair who does 
not want to appear to be doing it without equal----
    Ms. DeLauro. I don't want to do it without----
    Mr. Kingston. She is actually a closet Fox fan, fair and 
balanced. It would kill her if that word got out.
    Ms. DeLauro. It is going to kill me now.

                        NEW STATUTORY AUTHORITY

    Let me ask a question that has to do with an FDA 
legislative proposal. As part of the food protection plan that 
was released in November 2007, the FDA asked Congress to give 
it 10 new statutory authorities related to food safety. I am 
not endorsing each part of the request, but they are to be 
commended, really, and I will say in what was a regulation-
averse administration for making this kind of a proposal.

                           ACCESS TO RECORDS

    One of their proposals relates to access to records under 
the Bioterrorism Act, and there seem to be two parts of the 
proposal. Both relate to their activities in a food emergency. 
First is to allow the FDA to look at records about related 
articles of food, not just about the food in question. An 
example would be food produced on the same manufacturing line 
as the suspect food.
    Second, in an emergency, allow FDA access to records 
without having to show that it believes the food is 
adulterated. FDA says the recent melamine situation, which FDA 
had early clinical evidence that a specific food was causing 
illness in pets, but did not have clear evidence of a specific 
adulteration. That is the example for the scenario. FDA says 
that this would not impose any new burdens on industry, 
presumably, since these records are already required. This 
proposal is more limited than the OIG recommendation that FDA 
have access to records at any time.
    So I would love to have each of you to briefly comment on 
that.
    Mr. Levinson.
    Mr. Levinson. Madam Chair, I think that as you have 
explained, it would be a very helpful first step. But it would 
definitely be worth Congress' exploring whether something more 
consistent, with a more comprehensive approach recommended by 
the OIG, might actually be more effective.
    Ms. DeLauro. Okay. Thank you.
    Mr. Henry.
    Mr. Henry. Without question, if there is a regulatory 
mandate for records to be made accessible, as it is today in 
the Bioterrorism Act, or just to show that the lot coding is 
being managed by manufacturers, I think manufacturing entities 
would subscribe to that and will comply. That needs to happen.
    There is certainly a challenge when it comes down to having 
access to all records at all times for any reason. FDA is very 
typical, and even as we speak today will come in not only 
asking for records but also photographs and other things that 
are really quite invasive and it takes more time to get that. 
It is not mandated by regulation if there is real advantage.
    And I think I would default back to Mr. Kingston's line of 
thinking there. Is there additional value in getting that 
information that is going to help improve food-borne illnesses 
or, as you just made comment a moment ago, Madam Chairwoman, 
about drowning in paper, you know. Because how much time are 
you going to spend at a facility when you can't deal with the 
paper that is already on your table at this particular moment?
    Ms. DeLauro. Mr. Stenzel.
    Mr. Stenzel. Both of those recommendations in the food 
protection plan we would support.
    Ms. DeLauro. Mr. Farr.
    Mr. Farr. Thank you, Madam Chair. I apologize for missing 
most of this hearing. I have been in other appropriations 
hearings. I really have a couple of questions. One is for 
United Fresh.

                   PROGRESS ON MANDATORY REGULATIONS

    I was really impressed by your asking for mandatory 
regulations, and I just wondered what progress has been made on 
that.
    Mr. Stenzel. Well, Mr. Farr, it has been a long time in 
coming. It is, as you know, a couple of years ago when our 
board of directors first made that call. I do believe that the 
FDA is much more intent now on moving forward with a regulatory 
standard particularly for those commodities when, based on 
science or risk, that they can say needs to have a specific 
standard set, the commodity-specific food safety standards.
    We have always said that they had the regulatory authority 
to do that without increased statutory authority, but they have 
been reluctant to this point in time. Certainly Congress is now 
also considering a number of bills that would be very straight 
and plain in providing that statutory authority, if there is 
any question. And I would anticipate that that is going to move 
forward rather expeditiously.
    Mr. Farr. As you know, the industry is really complicated 
in the sense of how many--from the field and the place in the 
field and where that field may be located geophysically to 
surroundings to--I have been very impressed in the Seines 
Valley how they are now mapping those fields, and can tell you 
with every box what--almost the exact spot of the field that 
that came out of. And those boxes are shipped all over the 
country.

                         SMALL, ORGANIC GROWERS

    And, you know, you question what might happen in the 
transportation process or the unloading or putting the 
vegetables on the shelves. And I just hope that we don't 
create--because the backlash--I was on a talk show last weekend 
for small organic growers, and they are fearing that this whole 
thing is going to disrupt ability for them to grow in their 
garden and take it down and sell at the farmers market.
    Mr. Stenzel. I think that is a valid point. We have got to 
be very careful that whatever regulatory requirements are put 
forward are not inhibitive or punitive to smaller growers or 
organic growers.
    At the same time, food safety is not a scalable thing. You 
can't have E. coli in your food, no matter how small a farm you 
may have. So we have got to be consistent in that regard. That 
is where I do think FDA has got to use proper judgment, 
consultation with the U.S. Department of Agriculture, 
consultation with the State Departments of Agriculture and 
Industry.
    In your own district, the California Leafy Greens Marketing 
Agreement has done a fantastic job at setting forth the 
standards that all of the growers should be complying with, and 
those are the standards that I think are appropriate for that 
sector of our industry across the board, no matter where that 
product is grown.
    Mr. Farr. Do you think, as we develop the concept of 
regulations in these areas, that we are consistent with what 
industry thinks is practical and can be done?
    Mr. Stenzel. For the most part I do. That is always the 
risk you run when you ask for regulation: Is it going to be 
wise regulation? Hopefully, we are not asking for something 
that doesn't make sense. But there is going to be oversight 
required of the FDA to make sure that they don't go too far in 
some of those areas; that they do recognize the difference in 
growing regions and what is necessary for safety and what might 
not be.

                       GOOD AGRICULTURAL PRACTICES

    Thus far, I believe the guidance documents, the FDA 
revision of the Good Agricultural Practices that is coming, 
they are on target with what I think is the most responsible 
approach to growing fruits and vegetables.
    Mr. Farr. I want to compliment you as a representative of 
your industry, because whenever we have had these crises in the 
past, I have never seen an industry step up and say we are 
ready to be supportive of regulation. And I think you are 
really to be commended for that in being a part of it.
    Madam Chair, if I can, I have one more question and that 
will be it. And it is of the IG. You are the IG?
    Mr. Levinson. Yes.
    Mr. Farr. Sorry. I don't have my IG I.D.
    Related to this recall--and I have gotten very interested 
in this issue. I never even knew. It was a little something 
that I saw with the E. coli recall, and then with the fires we 
had in Big Sur last year, and it is called crisis 
communication, and it is a whole developed field. I mean, 
medicine has always had it, and we remember the old adage to 
doctors: Don't alarm your patient. But we don't seem to be 
using that--and law enforcement is beginning to learn about it.

                   COMMUNICATION PROTOCOL FOR RECALLS

    Did you look into communication, how professional or what 
they are doing to develop smart protocols for recalls?
    Mr. Levinson. Well, in all candor, Mr. Farr, that is really 
beyond the study that we undertook here that is the focus of 
the hearing today. We have conducted several reviews of FDA 
work. And I think the question that you are asking would really 
be of a more generalized nature than our specific work in OIG. 
But we have certainly identified FDA as--there is a major 
management challenge for FDA and the enormous jurisdiction that 
it has and the ability to align its work in a way that is 
effective and brings a high degree of confidence from the 
American people, from Congress. And I think that is reflected 
to a certain degree in our expression of concern over just the 
management challenge that FDA faces.
    On the more law enforcement-specific ideas, we have looked 
closely at their own internal investigations process and have 
expressed concerns about how that works. And I think that kind 
of work should be--I would hope would be an important trigger 
in FDA revisiting or rethinking the way it handles things like 
recall.
    Mr. Farr. Maybe you could help me understand. I sit on 
Homeland Security, which you would think would be the kind of 
area that would have that, but they don't have jurisdiction in 
this area, and they are just beginning to understand even 
questioning issues of food-borne biology that could lead to 
intentional food contamination or terrorist-type acts.
    It seems to me that this is one of those areas that is 
emerging, particularly with the technology you have. We heard 
in the Virginia Tech shootings that the responders didn't have 
the information that the students in the classroom had, and 
they were text messaging on Facebook, and who was looking at 
that was the media. So here were the responders going through 
their responding channels that weren't accurate.
    And so what happens is you arrive at a scene or you have an 
incident developing, and it is depending on how you handle 
that. You can take a problem and escalate it into a crisis 
because you haven't got the right people to respond to the 
crisis or you are not saying the right things and can develop a 
panic.
    And it seems to me that all of us in government, because we 
are the authority, we have got to start figuring out how in a 
new Information Age that we are going to handle emergency 
communications--and I would imagine that all recalls are 
emergency communications or warnings--that we have got to do a 
much more--be much more sophisticated than we have 
traditionally been in just sort of leaving it up to the law 
enforcement speak, the police channels, and it includes 
regulatory agencies like the FDA. And if you have any idea, I 
don't even know how to start questioning all that.
    Mr. Levinson. Well, I think you have outlined a lot of the 
most important concerns that should really be at the forefront 
as policymakers rethink, and especially Congress, rethinks, how 
it might want to align functions that historically have been 
buried in different departments or agencies. And of course, 
ultimately, it is the Congress' responsibility, authority to 
structure or restructure executive agencies and departments as 
it sees fit.
    And I would certainly agree with you that historically this 
has not been viewed in a more wholistic way; and at this point, 
and especially given the progress we have with information 
technology, deserves a real revisit by people across a much 
wider spectrum of the national security picture than we have 
perhaps experienced before.
    We have a piece of that at HHS and specifically at FDA, and 
I would hope that this is the kind of study that serves as a 
good example of the kinds of concerns that may be elevated to 
the Congress and to the Executive so that we can rethink how 
this actually works in practice.
    Mr. Farr. It gives me something to think about. Thank you.
    Ms. DeLauro. I just have two more questions.

                   ONGOING WORK WITH FDA FOOD ISSUES

    Mr. Levinson, I am curious about your ongoing work with the 
FDA food issues. You indicated that you are conducting a number 
of audits, registration of food facilities with the FDA, FDA's 
inspection of food facilities and its follow-up on violations, 
and several audits on FDA's authority and procedures for 
recalls. Can you give us some additional detail on each of 
these reviews? Are there any preliminary findings that you can 
share with us?
    I would just also add for fiscal year 2010, there is a bill 
moving forward, and we will see legislation--there is a major 
authorization in the Energy and Commerce Committee on the food 
safety issue. So I think your reports could be very very 
helpful in this regard, and if you can tell us when you expect 
to complete them. So any details, preliminary findings, when do 
you expect them to be completed?
    Mr. Levinson. Thank you, Madam Chair. And really on behalf 
of an outstanding Office of Evaluations and Inspections and 
Audit Services as well, we do have within very limited kinds of 
resources, I might add, a fairly robust current and ongoing 
work in food safety. As you mentioned, compliance with FDA's 
food registry requirements, which we expect to be completed 
this fall; FDA's inspections of domestic food facilities, which 
we have a projected a completion date of 2010; imported foods, 
with a completion date sometime during this fiscal year; 
imported pet food and feed products, again to be completed 
toward the end of this fiscal year; human food and pet food 
recall procedures with a projected completion date of 2010.
    We also have work on FDA's consumer complaint system 
process, medical devices, clinical trials and human subject 
protection due next year.
    So this is a robust agenda. And without being able to 
provide really specific status of work at this hearing, I would 
certainly welcome the chance for our staff to be in regular 
contact with your staff so that you are kept very much current 
with where we are headed with this work.
    Ms. DeLauro. I appreciate that and would like to keep in 
touch. I would also like to suggest, and I will make the 
suggestion, that Congressman Waxman's committee have the 
benefit of some of this information as well, and to loop their 
staff in.
    So as we move forward, let us move forward with good, solid 
information, and not then have to backtrack because we didn't 
know about something or we thought we had looked at it but that 
we haven't. This is a question of the interoperability of our 
communication. And so I just think we are in an era, in a 
moment, when there is a spotlight on all of this, and I think 
we need to take advantage of that to its best results for the 
future.

                SHARING RESPONSIBILITY FOR TRACEABILITY

    Mr. Henry, let me just ask you a quick question, because in 
your testimony you said you call for the sharing of 
responsibility for traceability through office supply chain. 
Let me just ask you plainly, who is not carrying the load, the 
burden here?
    Mr. Henry. What we are really referring to there, as you 
look at the scope of the BT Act and who is required to 
participate, which is all those things that I think Mr. 
Levinson has already pointed out. So if there is a gap and the 
gap needs to be filled, then action has to be taken 
appropriately.
    Ms. DeLauro. I just want to make this one comment. I wish 
Mr. Kingston was still here because I think it was Mr. Kingston 
who talked about the mandatory recall earlier on, and this is 
an article from today.
    [The information follows:] 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Ms. DeLauro. This is in the New York Times by Gardiner 
Harris. It is about this report. It says: ``Investigators find 
source of many foods untraceable.'' That was the Gardiner 
Harris piece.

                       PEANUT CORPORATION RECALL

    But this was very interesting to me. This was about the 
Peanut Corporation of America and the salmonella issue. It 
says, ``As late as Monday, the Food and Drug Administration 
formally asked Westco Fruit and Nuts, Inc., based in Irvington, 
New Jersey, to recall all of its products containing peanuts 
made by the Peanut Corporation.''
    Now, I am surmising that the FDA was basing that on some 
reality here--you know, I have to--but how this thing is still 
ongoing.
    ``Jacob Moradi, Westco's owner, could not be reached for 
comment, but he told ABC News that the FDA's recommended 
recall--the agency does not have the power to issue food 
recalls on its own--could ruin his company. `They are asking me 
to commit suicide based on presumption,' Mr. Moradi said in a 
broadcast issue. `They have shown no proof.' An official said 
Mr. Moradi hid from investigators at his plant.''
    Now, I mention this because there are two pieces. I 
understand that Mr. Moradi is afraid that he is going to go out 
of business. But, again, we have to have a process at FDA which 
allows it to make a decision based on solid information that 
there is a problem here and therefore can say, you are shut 
down. You are shut down. But based on proof and data and 
science.
    So we now are in the position where it is so tenuous that 
there is the view of oh, maybe they don't have any indication 
or proof or science. And on the other hand, my God, what is the 
product that these folks are dealing with that my family may 
have consumed and they won't recall their products? There is 
no--this is a no-win situation. A no-win situation because, in 
fact, it would appear that there is no one in charge here of 
making a determination.
    Our goal here is not about--I mean this has been a terrific 
hearing. This is a complicated issue of traceability, and we 
need to do it. We need to do it right. We need to know where 
the first part is and where does it start and where does it end 
and how can we put in place a mechanism?
    I think it is doable. I think you think it is doable. We 
are not in the 1930s here. There is technology. There are all 
kinds of ways for us to address this and deal with risk, deal 
with technology and inspection based on risk. But it is data 
that pushes us in that direction, so we can grant assurances on 
public health and assurances to a company that you are not 
going to go out of business here.
    Mr. Farr. Madam Chair, if I can, my experience in that is 
when the government actually orders destruction of farm 
animals, the government will pay for it; so it is a takings 
issue. And I think a lot of this sort of gets into this tort 
liability issue of if we are not--like in the spinach, we 
didn't take it. We voluntarily asked people to take it off the 
shelves. And for that--and they did. They responded 
immediately.

                   VOLUNTARY RECALL AND REIMBURSEMENT

    Many thought, well, I will get reimbursed for these costs. 
And as you know they didn't, and the insurance company said 
that was a voluntary recall. We don't ensure that. So you are 
in this gray area. And I think if we are going to resolve this 
question, it has really got to be the one of who is going to 
pay for it.
    We have some of these protections under the Perishable 
Commodities Act, where if a buyer doesn't--if you buy wheat and 
you don't sell it in time, it is still good the next week. If 
you buy strawberries and you refuse to pay on them, they rot, 
and there is no secondary market.
    So a lot of this is how you figure out the way to pay for 
it. Or if it is negligence, then the government shouldn't pay 
for it; the entity ought to be charged.
    Ms. DeLauro. Well, I think that is a point and that is 
making the determination.
    It is alleged that I am not going to deal with litigation, 
but we may be in a position with a company that knowingly sold 
a tainted product. Knowingly sold a tainted product. And we 
have to have the capability of making that determination, which 
means a number of enforcement tools and a number of strategies, 
enforcement strategies, that get at what happened.
    Once you begin to put some pieces in place, people are not 
foolish; they say, why would I put myself in this position? But 
if we continue to just self-regulate and just turn a blind eye, 
well, then, hey, whatever the market will bear, and I am going 
to presume I am not going to get caught and I can just move on.
    Not to be litigious, but we have got to have the full 
spectrum of tools available to be able to address what the 
current set of concerns are.
    Thank you all very, very much. Obviously we look forward 
and we hope you will view that there is an open dialogue here 
about how we can try to move forward. I don't want to wait 
months. I think we need to move quickly and try to see how we 
can try to make some very strong recommendations about how 
traceability can work and what it could look like. So thank you 
all very very much.
    This hearing is adjourned.

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                                            Thursday, May 21, 2009.

                      FOOD AND DRUG ADMINISTRATION

                               WITNESSES

JOSHUA M. SHARFSTEIN, M.D., PRINCIPAL DEPUTY COMMISSIONER AND ACTING 
    COMMISSIONER, FOOD AND DRUG ADMINISTRATION
PATRICK McGAREY, DIRECTOR OF THE OFFICE OF BUDGET FORMULATION AND 
    PRESENTATION
NORRIS COCHRAN, DEPUTY ASSISTANT SECRETARY FOR BUDGET, HEALTH AND HUMAN 
    SERVICES
    Ms. DeLauro. The hearing is called to order. Good morning. 
Let me welcome everyone this morning, particularly Dr. Joshua 
Sharfstein, who is the Principal Deputy Commissioner, Acting 
Commissioner of the Food and Drug Commission. I am pleased 
again to welcome all my colleagues. Our ranking member will be 
here shortly. Mr. Latham will make opening remarks in a moment. 
And I'm happy to continue with our efforts to move on with the 
budget hearings for the 2010 Agricultural Appropriations bill.
    Dr. Sharfstein, let us just all welcome you here and 
congratulate you on your new position. Delighted to see you, so 
much look forward to collaborating with you and Commissioner 
Hamburg in the months and the years ahead. I had the 
opportunity to meet with and talk with Dr. Hamburg yesterday, 
and I'm looking forward to a--our conversation yesterday was 
just open and positive and productive, so, looking forward to 
that relationship.
    I know that you agree that FDA's first responsibility is to 
the American people, to ensure the safety of food they eat, the 
drugs that they take and the medical devices that they rely on. 
That is the agency's most fundamental regulatory mission. The 
American people must be able to depend on the system, and the 
people in charge of protecting them.
    I'm proud that since taking the chair of this subcommittee, 
we have begun to address that critical need for more resources. 
This committee and Congress have increased the FDA's total 
budget by more than $572 million since 2006. In 2009, FDA has 
39 percent more in discretionary resources than it had in 2006, 
$572 million, despite overall spending limitations imposed by 
the previous administration. On top of that, a supplemental 
appropriation in 2008 of $150 million. I'm proud that since 
September 2008, the agency has been able to hire 1,500 new 
employees, scientists, inspectors, analysts who are doing 
critical work, a direct result of those increased resources.
    Looking ahead to 2010, I am encouraged by the 
Administration's $2.3 billion request for discretionary 
resources provided by this committee, an increase of $299 
million, almost 15 percent over last year. I believe this is a 
good start at giving FDA what it needs to get back on track. It 
represents a strong commitment to building the historic levels 
of investment this committee has made over the last three 
years.
    Dr. Sharfstein, I know you've already begun working to 
connect the recent increases in resources to concrete positive 
public health outcomes, and I encourage you to continue to make 
them a priority. But as you know, the problems at the FDA will 
not be solved simply with more funds and with stopgap measures. 
As you know, you are coming into an agency that is desperate, 
in my view, for fundamental reform. When we look at recent 
headlines, unsafe foods, dangerous medical products slipping 
through the cracks time and again, it is hard not to see a 
system in crisis and an FDA hobbled by a fragmented structure 
with outdated legal authorities in many areas and insufficient 
authority to protect the American people.
    To restore the agency's gold standard mission and ensure 
the fundamental safety of the food and drugs that it regulates, 
I believe we must be guided by four principles: First we must 
increase funding to support the FDA's mission. Second, we must 
improve the management of the agency and hold it accountable. 
Third, we must push back against the influence of industries 
over the agency. And finally, and perhaps most importantly, we 
must let scientists do their work guided by science and not by 
political or ideological interference. These are the guideposts 
I will use in judging our progress as we move forward in a new 
Administration. This is our opportunity to get the big things 
right for the American people to make real changes that will 
affect their health and their safety every day.
    With that in mind, let me raise a few issues that I imagine 
you will discuss in your statement, and I may ask you to 
elaborate on when we get to questions. In particular, I commend 
your decision to exclude from the budget fees from industry to 
finance the agency's direct to consumer television ads. I have 
always been of the view that having drug companies pay for the 
review of such ads and having reviewers' salaries dependent on 
drug company fees will further undermine the public's 
confidence in the FDA.
    By the same token, I would like to hear more about your 
proposal to increase the number of generic drugs in the market 
and how you view the role of generic drug makers in this 
expansion.
    I also know the FDA must frequently confront new and 
growing demands in a constantly-evolving public health 
environment. As you know, the House recently passed very 
important legislation giving the FDA responsibility for tobacco 
regulation. And the Senate is marking up their version as we 
speak. I look forward to hearing your strategy for implementing 
this regulation and discussing how you envision that 
responsibility fitting within the agency's overall public 
health and safety mission.
    In the same spirit, I also know you will update us on FDA's 
approval of a new plant to make seasonal influenza shots that 
could also be used to make an H1N1 vaccine. Indeed, since the 
virus's outbreak, much of our public health infrastructure, 
including the FDA, has been put to the test. I want to commend 
you and all of the outstanding scientists and doctors for their 
quick and their thoughtful response. And I'm curious to learn 
what we are learning from this experience, what new demands has 
this outbreak created, and how will our response going forward 
affect the agency's larger mission.
    I thank you for joining us this morning, Dr. Sharfstein. I 
look forward to asking you about these and other efforts within 
the FDA. As I told Secretary Vilsack last week, our 
appropriations reflect the priorities of this great nation. We 
have big goals, and it is the details, the budget and the 
basics that we are discussing here today that get us to be able 
to reach those goals.
    With that, let me recognize my colleague, Mr. Kingston, for 
any opening remarks that he may have.
    Mr. Kingston. Thank you, Madam Chair, and I'm going to 
yield to Mr. Latham.
    Ms. DeLauro. Okay. Thank you.
    Mr. Latham. Thank you, Jack. Thank you, Madam Chair, and 
welcome, Dr. Sharfstein. The FDA is one of the most important 
agencies that this subcommittee has jurisdiction over, and as 
you can probably imagine, we've had a lot of people advocating 
for increased funding on your behalf, not just the agency 
itself.
    I'm not aware of any other government agency probably 
outside of the CIA today that catches more grief from 
politicians and industry and others, and for as long as I've 
been in Congress, we've heard the same drumbeat about the 
agency being underfunded and understaffed. That said, there is 
much being asked of the FDA, and I would argue that as we try 
to achieve a risk-free society, we expect almost the impossible 
from your agency. So I think there needs to be some recognition 
that the FDA has challenges, but there is good work being done 
at the agency, and the folks on the ground really don't get the 
kudos that they deserve, and I think this committee would back 
that up.
    The Administration or you're asking for a 19 percent 
increase in funding, and once again, much of that is based on 
the expectation of new user fees that Congress supposedly is 
going to create. I don't know what the prognosis for that is, 
and it's usually very difficult. So for today I hope we can 
have a productive conversation about these numbers, your 
priorities, and that we can draft a responsible spending bill 
that ensures that you can effectively do your job. So, with 
that, Madam Chairman, thank you.
    Ms. DeLauro. Thank you. Mr. Kingston, would you like to 
make any remarks? Okay. Thank you.
    Dr. Sharfstein, if you would please, we'll move to your 
testimony, and you can be assured that the full testimony will 
be made part of the record, so you're free to summarize as you 
like.

                          Introductory Remarks

    Dr. Sharfstein. Great. Thank you very much. Thank you 
Chairwoman DeLauro, Ranking Member Kingston, Congressman 
Latham, other members of the subcommittee. I am Dr. Joshua 
Sharfstein, the Principal Deputy Commission and Acting 
Commissioner, but not for very long, of the U.S. Food and Drug 
Administration.
    I am pleased to present the President's 2010 budget request 
for FDA. For today's hearing, I'm joined by Patrick McGarey, 
the FDA's Director of the Office of Budget Formulation and 
Presentation, and Norris Cochran, the Deputy Assistant 
Secretary for Budget at HHS.
    In my testimony today, I will outline the Fiscal Year 2010 
budget request and the policy initiatives that we are advancing 
in our budget. I will also summarize recent developments 
related to the 2009 H1N1 flu virus outbreak and describe how 
FDA is responding.
    Let me start by thanking the subcommittee for exactly what 
you laid out, Chairwoman DeLauro, the historic investments at 
FDA that have been made over the last few years. I think these 
investments demonstrate the strong support of the subcommittee 
for the public health mission of FDA and the health of the 
American people.
    When I came to FDA a few weeks ago, I asked each center to 
provide examples of how they're using these funding increases 
to promote public health in the United States. I believe a key 
goal of management for the FDA is to be able to connect the 
investment that you're making and the American people are 
making in the agency with clear public health outcomes. And I 
got some very interesting responses.

                         PUBLIC HEALTH OUTCOMES

    I heard from the Center for Biologics that because of your 
investment, FDA is moving forward to be able to test the blood 
supply, and have the blood supply tested for rare and emerging 
strains of HIV. That we are now able to have trained many 
device regulators around the world so that the devices that we 
get are safer.
    We are developing a Hepatitis A test for foods that had 
never existed before, so you could actually test a food to see 
if the Hepatitis A virus is there. We are developing rapid food 
safety diagnostics so we don't have to wait days for the 
results of salmonella tests. We're developing a system of 
coordinating with veterinarians so that pet food outbreaks can 
be identified quickly and stopped. And there's very interesting 
research going on that will lead to new ways in evaluating 
pediatric anesthesia, which is important for children and 
important to me as a pediatrician.
    And of course there's flu. I think it's really important 
for you to recognize the investments that you made in FDA over 
the last couple of years are directly related to the nation's 
preparedness for flu. And the best example of that is right now 
we have six different companies essentially making flu vaccine 
for the U.S. market. In 2004, we were down to two, and it was 
only because of additional resources that FDA switched its 
model to proactively reach out to companies to try to engage 
them in the U.S. market, went out and inspected them and worked 
with them to develop their products for the U.S. market, and in 
the most extreme example, work with a factory that was just 
getting built and were able--which leading to the approval a 
couple of weeks ago what will lead to the doubling and 
eventually the tripling of the domestic manufacturing capacity 
for the injectable flu vaccine. And all that was really 
possible because of the investments that have been made over 
the last few years.

                             BUDGET REQUEST

    So let me take it back up to the whole budget. The request 
overall includes $3.2 billion to protect and promote the public 
health through FDA's mission. This includes an increase of $510 
million for FDA programs, which is a 19 percent increase 
compared to last year. This historic increase demonstrates this 
Administration's commitment to food safety, medical product 
safety and the health of the American public.
    The increase includes $295 million in budget authority and 
$215 million in user fees. And this budget organizes these into 
two initiatives: Protecting the food supply and safer medical 
products. It also includes $74 million for statutory increases 
in user fees and for infrastructure to support FDA's mission. 
And I certainly would encourage everybody here to visit the 
White Oak campus if you haven't already. It's really remarkable 
and also demonstrates a tremendous commitment to the agency and 
public health.
    This budget recommends four new user fees to facilitate the 
review of generic drugs, enhance FDA's ability to register and 
inspect food and feed manufacturing and processing facilities, 
allow FDA to reinspect facilities that fail to meet good 
manufacturing practices and other safety requirements, and 
allow FDA to collect fees when it issues export certifications 
for food and feed.
    It also recommends new authority for FDA to approve 
generic--I would say follow on biologics through a regulatory 
pathway that protects patient safety and promotes innovation.
    Finally, the budget also includes $5 million for FDA to 
develop policies to allow Americans to buy medications that are 
approved in other countries.

                    PROTECTING AMERICA'S FOOD SUPPLY

    Let me go into a couple of details. First, I would like to 
talk about protecting America's food supply. For Fiscal Year 
2010, FDA proposes an increase of $259 million for food safety 
activities. This includes $164.8 million in budget authority 
and $94.4 million in three new user fees that I described 
before.
    This funding will allow the agency to hire over 600 
additional staff to work on food safety. It will pay for cost 
of living increases. It will, through the staff, fund 
significant increases in domestic and foreign risk-based 
inspections, audits and laboratory analyses. The number of 
staff includes more than 220 additional investigators to 
conduct inspections, and we anticipate that when fully trained 
and deployed, this will lead to significant increases in the 
number of domestic and foreign food safety inspections.
    More importantly in my mind than inspections, this will 
also fund an increase in--it will also fund FDA's ability to 
implement a strategic framework for an integrated national food 
safety system. And this includes working very closely with 
states and localities to integrate our efforts and develop 
preventive-based regulations and guidances that will shift our 
food safety system from what I think is now fundamentally an 
outbreak-focused food safety system to what should be 
fundamentally a prevention-focused food safety system.
    These resources include money for the states, money to 
develop capacity around prevention, money for regulations. In 
addition, there's funding to better respond to outbreaks, which 
includes detecting contamination, quickly tracing 
contamination, and communicating risk during a food safety 
event. This funding will also support three new laboratories 
for chemical analysis.
    And there's a major investment in information technology 
systems, including systems we use to screen, sample, detain and 
take enforcement actions against imported food and feed 
products that violate FDA safety standards.

                         SAFE MEDICAL PRODUCTS

    As far as safe medical products, the budget proposes $166 
million for medical product safety. This includes $120 million 
in budget authority and $46.6 million for a generic user fee 
program, and reinspection user fees related to medical product 
facilities. What this funding would accomplish is about more 
than 300 additional full-time equivalent staff. It would also 
fund the cost of living adjustment, and it would permit 
additional inspections of both domestic and foreign sources of 
ingredients, components and finished products throughout the 
drug and biologic and device supply chains.
    Within the Center for Biologics, it would allow the hiring 
of additional safety experts for blood, tissue and vaccine 
safety teams, and would allow CBER to develop new screening 
tests for emerging blood-borne diseases, and additional work on 
identifying safety signals for both vaccines and tissue 
products.
    For devices, it would allow the Center for Devices to 
implement safety requirements including in the FDA Amendments 
Act. This would include analyzing data relating to children's 
devices, conducting a medical trials workshop to address unmet 
pediatric device needs and hiring additional experts. There is 
also a special focus on eye medical devices that are included 
in the budget.
    For CDER, the drug center, the budget increase would allow 
more work to be done on how to best use the risk evaluation and 
mitigation strategies to minimize drug risks and promote safe 
drug use. It also would allow CDER to conduct research on 
bioequivalent standards for generic forms of products such as 
metered dose inhalers, topical drugs and complex dosage forms, 
such as lipozone products. It will also expand enforcement 
against Internet sites that expose consumers to unapproved 
products and fraud.
    For the Center for Veterinary Medicine, the funding will 
allow risk evaluation of animal biotech products and also 
expand efforts to create a safety system for animal drugs, and 
it will support research at NCTR on nanoscan materials and 
other important products. And there's a significant IT 
investment there.

                        LEGISLATIVE INITIATIVES

    I should just briefly mention that there are legislative 
initiatives that are implied by the budget. These include 
support for generic drugs by developing a user fee program that 
would facilitate reduction of the backlog in generic drug 
applications. It also presumes a passage of legislation to 
permit follow-on biologics with a workable and scientifically 
sound regulatory pathway that could significantly reduce costs 
to the American people.

                              FLU OUTBREAK

    Let me just briefly mention, if it's okay, how FDA has 
responded to the flu situation, because I think it really 
demonstrates how FDA is a public health agency working for the 
American people. Now this all happened really just a couple of 
weeks into my time at the agency, and I was really just getting 
acquainted. And I was just extremely impressed by how the 
agency responded, and I want to explain what happened.
    As soon as we became aware of the outbreak, I asked Dr. 
Jesse Goodman, who is here today, the Acting Chief Scientist 
and Deputy Commissioner for Scientific and Medical Programs, to 
coordinate and lead FDA's efforts. And he oversaw a management 
structure that was different from the day-to-day management 
structure that FDA used. We established an incident command 
structure. We created teams around different topics, and they 
reported to Dr. Goodman. The substantive teams we created 
included the vaccine team, the anti-viral team, the in vitro 
diagnostics team, the personal protection team, the blood team, 
the shortage team and the consumer protection team. We also had 
other elements of incident command which include logistics 
support and communications, legal and worker safety.
    So we actually shifted to a 24-hour move, because the CDC 
was interested in deploying products from the stockpile, and to 
do so, they needed some emergency approvals for things that 
were not approved by the FDA to that point. The team worked 
over the weekend, and at three in the morning, I signed several 
emergency use authorizations, which included the first dosing 
for Tamiflu for children under age one that CEDR came up with 
after extensive work over the weekend, and that was based on 
the tremendous amount of work they had done to that point on 
kids under age one. It also included approval for Relenza to be 
distributed by public health authorities, and it included the 
first diagnostic test for H1N1 which permitted CDC to 
distribute that test across the country and to more than a 
hundred countries around the world.
    This team, this incident management team, has been meeting 
since then and has not slowed down even as the particular 
epidemic has taken its twists and turns. And I was just reading 
the most recent report from the team. And just to give you a 
sense of what's going on, the anti-viral team is aggressively 
looking at--and to take a step back, obviously the epidemic is 
not as virulent as initially feared at this point, but there is 
a lot of concern that when the fall flu season hits, it could 
come back and be quite significant, and certainly in this 
respect, when you're dealing a previously unseen flu virus, 
given the course of events in the 20th Century, it is 
definitely better to be safe than sorry. And so we have been 
working very aggressively to think about how we prepare for the 
worst case scenario even if we never need to use those 
preparations.
    One of the things that CEDR is doing--sorry, the anti-viral 
team is doing is reaching out to manufacturers that have 
experimental or unapproved drugs for very severe flu, because 
there are no currently, for example, intravenous formulations 
of the flu drugs approved to see what might be made available 
if we really run into a problem this fall.
    The shortage team is already contacting manufacturers of 
basic antibiotics, IV fluids and antivirals to make sure that 
they're increasing their supply in case of a big problem this 
fall.
    The vaccine team is working full steam ahead on the 
preparations for a vaccine, and that includes growing the virus 
in the FDA's labs. There are sheep that have to produce 
antibodies to test the potency of the vaccine. The FDA is a 
pivotal player in approving and helping design the clinical 
studies that will be used for the vaccine when one is produced, 
and working with the manufacturers.
    There's a blood team that's working in basically the supply 
of blood, which has been fine throughout this, and monitoring 
any questions of risk to the blood supply from the flu, of 
which there have not been any serious questions raised so far.
    The diagnostic team is working very closely with CDC on the 
development of more additional rapid diagnostic tools for this 
particular virus.
    And the consumer protection team is quite active now 
looking on the web to identify people who are really trying to 
defraud the American public. And I'll just read one website 
that recently got a warning letter and is shutting down from 
FDA. It said, ``Independent tests show this product is hundreds 
of times more effective at killing the flu virus than the most 
potent antiviral prescription medications known, and it's the 
only one that actually kills the virus within a few hours and 
automatically eliminates all symptoms.''
    So FDA I think has taken several dozen enforcement actions 
through its consumer protection team to make sure that people 
are not misled. But my concern as a physician is that people 
would turn to products that clearly don't work instead of 
seeking medical attention, which is incredibly important when 
they're sick from the flu.
    So I think I'll stop there. There's a lot more detail in 
the written testimony, and I look forward to your questions.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. DeLauro. Thank you for your testimony. Let me start 
with really a general question of many specific ones. As I 
outlined in my opening statement, I do believe that the agency 
is badly broken, and I think there are a number of surveys of 
employees who have found low morale, reflecting the efforts to 
muzzle staff, et cetera. I don't have to reiterate all of that. 
And you also commented and we have with regard to resources, 
and I am confident--I don't suspect--I'm confident we will make 
additional gains in terms of resources in 2010.
    But what I would like to hear from you is about the other 
three areas: Management, industry influence and science. And 
what I'd like to know is how do--because these are the measures 
that we will return to in the future as to how we are really 
addressing these areas. If you can, tell us how you are 
approaching looking to improve the management of the agency, 
addressing the undue influence of the industry, and ensuring 
that the decisions are based on science.

                             FDA MANAGEMENT

    Dr. Sharfstein. Thank you. I think you're absolutely right 
that funding is just one part of the picture at FDA. And I 
think that management is extremely important. I'm very much 
looking forward to Dr. Hamburg. Both of our backgrounds are in 
running large public health organizations. Hers was much larger 
than mine. I was the health commissioner in Baltimore City. She 
was the health commissioner in New York City. But I think there 
are a lot of principles that are important from that experience 
that I think we both hope to bring to this.
    It is very important that in every unit of an organization 
that people feel accountable for what they're doing and not 
just, you know, the kind of checking the box, of having kind of 
run through the motions of something, but actually moving a 
project forward that is clearly linked to public health. That's 
really what I think our management goals are going to be.
    I think--and when I started by asking the different centers 
where did the increases go that really are directed to projects 
that are going to lead to improve public health, that was a 
message that we were able to send, and I think people have 
responded very well to that across the agency, that we really 
expect to be able to be accountable for where the resources are 
going and what the impact is going to be. And I think as we 
move forward and Dr. Hamburg starts, we have a few ideas for 
her to consider, specifically in how to move that forward.
    But I think you'll see some specific mechanisms put into 
place in the management of the agency that will allow that to 
happen and will provide I think you and the subcommittee a lot 
more understanding of how the resources are used, and a lot 
more confidence in the management of the agency.

                           INDUSTRY INFLUENCE

    To your second point on the influence of industry, I think 
that the credibility of FDA is absolutely critical, and I think 
one of the most challenging things externally and internally 
for people who worked at the agency were hits to the agency's 
credibility over the last several years. And I think Dr. 
Hamburg and I plan to make that a major focus. And the question 
of industry influence is one element of that, but I think there 
are other elements, and I think the FDA's being more 
transparent about how it's making decisions and why it will be 
very important to addressing that.

                               SCIENTISTS

    To your third point, letting the scientists do their work, 
I have been extremely impressed by the talent that's at FDA. I 
go to meeting after meeting where, you know, I kind of feel 
like I'm an imposter because around the room are twelve 
scientists through their careers are on a particular issue of 
the topic. And you really have to respect the kind of 
brainpower that exists at FDA.
    And I think I've been very impressed by how positively 
people at FDA have responded to really how I open most 
meetings, which is, you know, I'm interested in hearing what 
you think should be done to move these issues forward, whatever 
the topic is. And I think it may be that one way to approach 
the fact that FDA has limited authority is to say, well, if we 
don't have authority there, then no reason for us to think 
about it.
    But I'm really encouraging, and I think our approach is 
going to be that let's start with what the right thing to do 
is. If we can do it right away, then let's try to do it, 
because that's going to help American consumers, and I think 
along with consumers when people have confidence, it's going to 
help the industry, too. But if we don't have the authority, 
then we're going to talk about what we need to be able to 
protect the public. So I think that message has really 
resonated, and I think that's the start, and we'll have time to 
talk about maybe other elements of this. I think that's one 
part of changing the approach to science at the agency.
    Ms. DeLauro. My time has expired, and I want to try to hold 
us to the five minutes so we can get as many questions as we 
can, but I thank you for that. Mr. Kingston.
    Mr. Kingston. Dr. Sharfstein, let me ask you a couple of 
questions. I'm very concerned about the national debt, $11 
trillion right now. And it seems to be something that we as a 
nation have chosen to kind of put on the back burner for the 
time being. But FDA often says they don't have the resources, 
but 2007, $1.97 billion. 2008, $2.269 billion. 2009, about--a 
little less actually, $2.667 billion, and now your proposal is 
almost $3.2 billion, which would be a 37 percent increase over 
the short 2\1/2\-year period of time.
    Now it's interesting, you know, during that period there 
have been--your employee count has gone from about 9,500 with 
the proposal to go up to 12,000 employees. You know, when the 
private sector is cutting back, when households back home are 
cutting back, is it really fair for FDA to have a 37 percent 
increase? And I'm not aware--and I may be wrong but--of your 
suggested savings or cuts that you have proposed. And are there 
any?
    Dr. Sharfstein. In this budget?
    Mr. Kingston. Yes.
    Dr. Sharfstein. Let me----
    Mr. Kingston. Could you find anything to reduce, any 
duplicate--duplications or anything like that?

                              FDA'S BUDGET

    Dr. Sharfstein. I think it's a very fair question. And 
overall, given the state of the economy and the budget, I 
totally understand the question. I think it's important to put 
the FDA budget in two types of contexts. One is the years 
before the years that you mentioned. Because if you go back 
further, there was the erosion of FDA's budget considerably. It 
was held flat for many, many years, and the number of employees 
dropped considerably.
    And I think the reason for the increase in the budget was 
the widespread understanding that the erosion of the FDA was 
hurting not only the health of people but the health of 
businesses as all sorts of problems were happening, and FDA was 
really unable to prevent them or respond in a way that people 
really felt confident about.
    Mr. Kingston. Well, let me ask you that. What are those 
numbers in terms of--why you don't go back to say 2004, tell me 
what erosion specifically was.
    Dr. Sharfstein. I think you could go back even further. I 
don't know if I have them handy, but I would go back even to 
like the late 1990s and you could see--I think--I don't want to 
give you statistics I don't have right in front of me, but I 
think there was a considerable decline in the real budget at 
FDA, and there was a big drop in the number of employees in 
particular programs.
    Mr. Kingston. Well, that's certainly relevant, and maybe--
do you have your budget person here?
    Dr. Sharfstein. Yes. Patrick.
    Mr. Kingston. Can you give me those numbers?
    Mr. McGarey. What Dr. Sharfstein points out is consistent. 
Over about a ten-year period, with the recent increases brought 
in, we're about returning to where we were----
    Mr. Kingston. So when were you at $3.1 billion?
    Mr. McGarey. What our staffing will be?
    Mr. Kingston. No. When were you there? Was that 2003?
    Mr. McGarey. Excuse me. I apologize. We were never--I'm 
focusing on the number of employees that that money buys.
    Mr. Kingston. Okay. So you were at 12,000 employees 
previously?
    Mr. McGarey. We were just slightly below that if you go 
back a decade.
    Mr. Kingston. Okay. Can you give me those numbers for the 
record?
    Mr. McGarey. We'll get those for you.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Kingston. Because I'm very concerned about a 37 percent 
increase. And one thing to consider now versus ten years ago is 
that the national debt is so much higher, and I would also 
think that the FDA would be able to take advantage of some of 
the technology that's out there now that--you know, for 
example, what HACCP has done for USDA going from a carcass-by-
carcass inspection to microbial inspection. I would think that 
the FDA would have the same sort of advantages with all the 
technology that might be able to be a savings.
    Also, I wanted to talk to you about these user fees. Every 
Administration--and you have been on the Hill, and you know. 
You've seen--you were here when President Clinton was here and 
Bush, correct?
    Dr. Sharfstein. No. No. I started July 2001.
    Mr. Kingston. Okay. Well, you know that every 
administration rolls out user fees. And yet rarely do user fees 
get beyond this hearing. And because I've just--I've never seen 
the Clinton Administration, the Bush Administration, I do not 
think the current new Administration is going to fight for user 
fees, but I could be surprised. Can you give me an indication 
of what you're hearing in your dying days as interim director?
    [Laughter.]

                               USER FEES

    Dr. Sharfstein. My understanding is that this 
Administration is committed to the user fees as part of its 
plan to really support FDA. And, you know, we're kind of doing 
our best to make the case for them because we think that in 
order to transition to the system, the food safety system that 
you're talking about, and I agree with 100 percent on the HACCP 
and those principles and getting away from having to think of 
it in terms of how many inspections we're doing, and in terms 
of what standards are in place, whether the businesses have the 
responsibility to do it. We've got to get over that hump, and 
we need resources to put that system into place. And that's 
really our goal.
    Mr. Kingston. Okay. Thank you. My time has expired.
    Ms. DeLauro. Mr. Jackson.
    Mr. Jackson. Thank you, Madam Chair, and thank you Dr. 
Sharfstein, for your service to the nation. I have two 
questions, one regarding neuroblastoma, and the other regarding 
generic drugs.
    Dr. Sharfstein, both the House and the Senate encouraged 
the FDA to prioritize review of new treatments and clinical 
trials for pediatric cancers in Fiscal Year 2009, particularly 
those related to neuroblastoma. It is clear to me that we can 
do better by young patients facing a dismal 20 percent survival 
rate from this terrible disease, a survival rate which, unlike 
other pediatric cancers, hasn't improved in decades.
    New treatments and clinical trials that have the potential 
to help children with neuroblastoma should be reviewed with all 
due speed. This is particularly true of therapies for relapsed 
patients who face a survival rate of less than 5 percent. I 
guess I'm asking if you can please put neuroblastoma on your 
radar screen as an area, one, that needs attention, and can we 
work together to try to make progress in this area so infants 
and toddlers battling this disease can access all promising 
treatment options?
    Dr. Sharfstein. And I would answer yes, I think it is very 
important, particularly as a pediatrician, I've actually cared 
for patients with neuroblastoma, and I've seen patients die 
from neuroblastoma, and it is just an incredibly difficult 
experience for everybody who is in contact with the child, as 
well as obviously the child.
    I think one of the things that Dr. Hamburg and I strongly 
support is the FDA not just being passively sitting back 
waiting for applications to come in, but where we think there 
may be opportunities for innovation that can save lives, to 
really reach out and help researchers and industry think about 
what it would take to demonstrate that a product works and is 
safe for kids.
    So I look forward to working with you and your office on 
identifying better treatments for neuroblastoma and other 
diseases affecting children.
    Mr. Jackson. Dr. Sharfstein, we also can agree that generic 
drugs can save patients substantial health care costs. However, 
hurdles still exist in bringing more affordable drugs to 
patients who desperately need them. As the number of generic 
drug applications rise, staffing at FDA has relatively stayed 
flat. What needs to be done to increase the amount of generic 
drugs being brought to the market, and are new user fees the 
only way?

                             GENERIC DRUGS

    Dr. Sharfstein. Thanks for that question also. I recently 
saw my uncle, who is a neurologist, who said that he has a lot 
of patients who skip doses of medicines and put themselves at 
risk for seizures because they can't afford their medicines. 
And generics are an extremely important way for people to get 
access to medications that are safe and effective.
    I think that--and this reflects the previous question--I 
think there is reason to be optimistic about user fees. I think 
that the industry is open to that idea. I think the 
Administration is very interested in it, and I think, just like 
the user fee arrangements have been made in several other 
areas, I think that this is really important. I think more 
resources are critical, but we're also going to look to see 
whether there are other things we can do to streamline the 
approval process for generics.
    Mr. Jackson. Thank you, Dr. Sharfstein. Thank you, Madam 
Chair.
    Ms. DeLauro. Thank you, Mr. Jackson. Mr. Latham.
    Mr. Latham. Thank you very much, Madam Chairman. Doctor, 
the Administration is requesting an increase in the overall 
budget, $510 million. Just last year, the Administration came 
and asked for a $375 million increase, and I think it was 
Senator Kohl over in the other body asked the question to the 
administrator last year if the FDA could absorb that much money 
in one year, and it was just a flat no, we can't absorb that 
much money. It wouldn't be well spent. And I guess I would ask 
you the same question. How do you absorb an increase, $510 
million in one year, to have the money to be well spent? Is it 
possible? Last year they couldn't absorb a $375 million 
increase.
    Dr. Sharfstein. You know, I'm going to probably turn to 
Patrick McGarey to talk a little bit about the process in 
place. I understand--my understanding is that FDA has been able 
to spend all the money that it has been given by Congress.
    Mr. Latham. Are there any unobligated funds?

                           UNOBLIGATED FUNDS

    Mr. McGarey. Well, in the current fiscal year, of course, 
we don't have that situation because it's available to 
obligation until the end of the fiscal year. We have an 
aggressive hiring plan because so much of our budget and our 
mission relates to our staffing, and we are about at 80 percent 
of our hiring targets for the fiscal year, and realizing of 
course we're between 60 and 70 percent through the fiscal year. 
So on our priority goal of hiring, we're meeting those targets. 
We're going to spend more than $400 million in the current 
fiscal year, and we feel in the coming fiscal year, we've 
poised ourself to make expenditures at the $510 million level.
    Dr. Sharfstein. Looking at that, there are chunks of money 
that are really for the development of IT systems, which we can 
obligate this year, and which aren't necessarily needed every 
single year, that amount of money. But that's what helps us get 
us over the hump to----
    Mr. Latham. So how much of those funds are left 
unobligated?
    Dr. Sharfstein. I don't think there's an unobligated part 
of IT.
    Mr. McGarey. Well, much of it is unobligated at this point 
in the fiscal year.
    Mr. Latham. Well, he said he couldn't spend it this year.
    Mr. McGarey. And we will spend it before the end of this 
fiscal year. Our major IT contracts, we're going to put money 
into those in the coming quarter.
    Mr. Latham. And last year as far as food safety, you were 
granted authority to hire 161 new full-time equivalents in food 
safety. Do you know where you are on those hires?
    Mr. McGarey. Again, we are at about 80 percent across FDA, 
and it's very similar to that in the food safety hiring goal 
that we have for that piece of our budget.

                          VETERINARY MEDICINE

    Mr. Latham. The Center for--and in your testimony earlier 
you talked about working with the states and about surveillance 
and all that type of work. One of the key parts of it is the 
Center for Veterinary Medicine. And in the budget, it really 
only gets, what, $2 million, as far as an increase. And the GAO 
indicated in a Senate oversight hearing that the Center is in a 
state of crisis because there aren't enough vets out there 
working in the center.
    I don't know, I wonder if there are some unobligated funds 
and you can tell me what the priorities are, but you know, if 
there's some funds, rather than worry about whether Cheerios 
are regulated as a drug, it might be a good idea to look at 
that as far as--the whole system out there is going to break 
down if you don't have these people out doing their job on the 
front lines. I don't know if you want to comment, or----
    Dr. Sharfstein. Sure. I think that--I'll turn at the end to 
Patrick on the increase in veterinary medicine. I think it may 
be more than $2 million. But to your general point----
    Mr. Latham. As far as an increase? Okay. Go ahead.
    Dr. Sharfstein. How much is it?
    Mr. McGarey. Between last year and this year, the increase 
for the program for animal drugs and fees, is 36.7.
    Mr. Latham. But how about for hiring?
    Mr. McGarey. Well, probably on average, 70 to 75 to 80 
percent of that Center's investments will be in staffing.
    Mr. Latham. Okay. My question then would be why the GAO 
says that the Center for Veterinary Medicine is in a state of 
crisis? Can you address that? Why and what are you doing about 
it.
    Dr. Sharfstein. Well, I think that--I wish I had a mental 
image of that GAO report, but I don't have it. But I do think 
that there are several very important----
    Mr. Latham. You're not aware of a crisis at----
    Dr. Sharfstein. Well, I think that what my understanding of 
the situation in Veterinary Medicine is that--and if you can 
look back to the melamine pet food situation that happened, 
which I think people recognized as a major crisis. And not only 
that so many animals died, which was terrible, but that it took 
so long to really figure it out, and that the processes for 
fixing it were--where it took so long. And I do consider that a 
crisis. And I've been impressed that the Center now has a very 
strong plan to put in place, and I was mentioning that a little 
bit. This integrated system with the state, locals and 
veterinarians to identify problems in animal feed and be able 
to respond.
    So that is something that is getting a lot of funding in 
this budget, and I think it's extremely important. As the 
health commissioner in Baltimore, I was the chair of the board 
of the animal shelter. And, you know, I think that there is 
tremendous importance to people and importance to the animals 
themselves of, you know.
    Mr. Latham. How many more vets are you planning on hiring? 
I apologize, but I just--to close it off.
    Dr. Sharfstein. How many more vets are we planning to hire?
    Mr. Latham. Yes.
    Dr. Sharfstein. I don't know that off the top of my head. 
We may have to get back to you.
    Mr. McGarey. We would have to get that for the record. We 
certainly couldn't tell----
    [The information follows:]

                   FDA Hiring Plans for Veterinarians

    FDA's Center for Veterinary Medicine plans to hire approximately 25 
Veterinarians during FY 2009 and FY 2010, based on the FY 2009 enacted 
budget and the FY 2010 President's Budget.

    Mr. Latham. Thank you, Madam Chairman.
    Ms. DeLauro. Thank you, Mr. Latham. Mr. Farr.

                         LOUISVILLE INSPECTIONS

    Mr. Farr. Thank you very much. Thank you for your public 
service with your incredible background, academic background, 
medical background in pediatrics and so on, I just--I think 
it's nifty that you're dedicating your life to public service.
    I have a question that arose from my--every year I visit 
the UPS centers in my district and talk to the drivers and 
learn a lot about how we transport things. And it came to my 
attention that the FDA has to inspect all the packages shipped 
out of country to ensure that there's no violation of U.S. 
health, food and safety laws. And the FDA provides inspectors 
to shippers like FedEx and UPS. But last year the FDA pulled 
its night inspectors from its UPS hub in Louisville, citing a 
lack of personnel, even though it had provided plenty of 
personnel to the same job for FedEx in Memphis. And I 
understand that UPS worked out a deal with FDA to undergo a 
six-week trial test to see if indeed UPS was handling the 
volume of packages that qualified for the nighttime inspectors, 
and it did.
    The problem is that the inspectors haven't been provided, 
and this delays getting packages to consumers and creates an 
uneven playing field between UPS and FedEx. What's holding up 
the FDA from responding to getting those nighttime inspectors?
    Dr. Sharfstein. It sounds like a very fair question, 
particularly when it comes to the uneven playing field between 
different companies, and I don't know the answer to that, but I 
can promise to look into it and get right back to you. I think 
you deserve a good answer to that question.
    [The information follows:]

                         UPS Hub at Louisville

    FDA recently completed a six-week pilot of entry reviews for the 
UPS Louisville hub location. FDA determined that the FDA Memphis 
Resident Post is the best location to review UPS entries. At this time, 
FDA is working with UPS on logistical issues and has begun identifying 
processes and procedures that need to be developed before FDA can 
review entries of UPS packages from the Memphis Resident Post.

                            IND APPLICATIONS

    Mr. Farr. Thank you. I appreciate that, since you, you 
know, reviewed it and came to the conclusion that the volume is 
there. Another question came from visiting compounding 
pharmacists and learning a lot about compounding business. It's 
very interesting. And I'm very supportive of it, by the way.
    The FDA banned the use of esterol, which is a natural 
occurring hormone in compound medicines to treat hormone 
replacement therapies. And I understand that a pharmacist can 
apply for a--file an IND, an Independent New Drug application?
    Dr. Sharfstein. Correct.
    Mr. Farr. In order to do it. But this application process 
can be as many as up to 50 pages long, very complicated, costly 
to fill out. Consequently, doctors don't like to do it, 
pharmacists don't like to do it. And those who find--who have 
done it, find that their requests generally get denied. Is 
there any effort to simplify this process so the filing can be 
done in a--since you're not doing any test to decide whether 
esterol should be in compound medicines, that this is the only 
way one can get the exception, and is there anything going on 
to simplify this process, and at least give a decision up 
front?
    Dr. Sharfstein. Also a very fair question. You know, the 
big picture on compounding from my perspective--I'm a 
pediatrician. A lot of drugs are compounded for kids because 
they can't be made available another way. And so I've written 
for drugs that are compounded in clinical medicine, and I 
understand the importance of compounding to the practice of 
medicine in the United States.
    I think the concerns comes when the agency thinks, or 
becomes concerned that compounding is at such a scale that it 
is sort of like drug manufacturing potentially for drugs that 
could be unsafe or not well presented to consumers. And my 
understanding of this particular issue is that there were some 
people who were selling this at a mass scale, a drug that's 
very similar to the approved estrogen, but with making claims 
about its safety that were almost certainly untrue, that it 
wouldn't have the adverse consequences, and that proved a risk 
to women's health. And I think that's what led to the action 
that FDA took.
    Mr. Farr. Mm-hmm.
    Dr. Sharfstein. But FDA did provide, just as you are 
setting out, an option for people which allows some assurance 
that people will get more of the facts about this particular 
type of product and then would allow them to get it. But I 
understand that FDA is--has sought to meet with the compounding 
pharmacists to develop a quick way to get the IND going, and it 
has some trouble getting people to the table to talk about 
that. But in the absence of that meeting, that they did develop 
a website that explains exactly how to do it. But if that's not 
working for people, we want to know. And I'm sure FDA would be 
willing to sit down with the compounding pharmacists 
associations again to work on that. And I do know that some 
people have made it through the process.
    So I think the thing to do may be to understand who is 
expressing that concern and offer to meet with them and see 
what we can do to make this particular pathway, which would 
allow people access to the medicines under conditions that they 
be going in with, you know, kind of both eyes open. If we could 
streamline that pathway, I think that would be something that 
could be mutually beneficial.
    Mr. Farr. Okay. We'll follow up on it. Thank you.
    Ms. DeLauro. Mr. Alexander.

                                  FTE

    Mr. Alexander. Thank you, Madam Chairman. Doctor, I have a 
couple of questions for you, but first Mr. McGarey, going back 
to something that Mr. Kingston was talking about a while ago. 
You said that the lack of funding that you need goes back to 
the 1990s. That's the first time in a while that I've heard 
anybody not totally blaming President Bush for the problems 
that we have now. I'm certainly sure that he'll appreciate 
that.
    But you said that at one point you were not at 12,000 but a 
little less than 12,000 employees. Is that correct?
    Mr. McGarey. Well, we won't be at 12,000 in the current 
fiscal year. The target is to reach that at the end of Fiscal 
Year 2010.
    Mr. Alexander. But you said at one time you were almost at 
that----
    Mr. McGarey. I know we were above 10,000.
    Mr. Alexander. Okay.
    Mr. McGarey. At the end of Fiscal Year 2008, we were below 
10,000.
    Mr. Alexander. Were conditions at that time better than 
they are today in your opinion?
    Mr. McGarey. Well, I--my service doesn't go back that far, 
but talking to people who have been at FDA, conditions is a 
broad term, but there are many drivers our workload that are 
pressing now, and we deliver our mission with employees.
    Mr. Kingston. Will the gentleman yield?
    Mr. Alexander. Sure.
    Mr. Kingston. I want to make a clarification. This was your 
employee count in 1998, 8,841; 1999, 8,869; 2000, 9,406. So 
we're not talking about returning to a level that was over 
10,000. I'm not sure what year you're talking about, but that's 
not accurate with what this is. Now maybe it dipped up in 2001.
    Mr. McGarey. I would point out, the actual at the end of 
Fiscal Year 2008 was 9,811 employees. So we're in the year 
where we're seeing a lot of growth, and I guess I was looking 
at a ten-year span where we were----
    Mr. Kingston. Well, I just want to clarify because my 
understanding from your answer to me was that you're returning, 
but you're not returning according to this.
    Mr. McGarey. We would be happy to request a table that lays 
out the FTEs across those decades.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Kingston. I yield.
    Mr. Farr. Thank you. Reclaiming my time. The reason I asked 
that is looking at data, CDC data, and I certainly don't want 
anybody to think that we're implying that they're misleading 
us, and for sure we don't want anybody to think we're calling 
them liars, but on this data sheet it says that 300 million 
Americans eat three meals a day. We know that's not accurate. 
Three hundred million people do not eat three meals per day. 
But even at that, they say that at 5,000 deaths, we have a 
99.99 percent success rate. Five thousand deaths to me would 
seem like it would be a lot less than 99.9 percent success 
rate.
    But getting to the question is when we had the number of 
employees that you would like to have, were we better than 
99.99 percent successful?
    Dr. Sharfstein. Let me address that. I think that the 
number of employees is an important thing to follow up on, but 
it's one part of the complexity of the budget situation. And if 
you go back and compare a decade to now, the market for foods, 
the market for drugs, the complexity in the science has 
expanded tremendously.
    Even if you just look at imports, number of imported foods, 
and the number of establishments importing to the United States 
has gone up tremendously. So the complexity of what FDA is 
dealing with sort of probably the best--and not just the 
complexity, but the amount of things that FDA is dealing with 
is also something you've got to factor into as you're looking 
at what the appropriate amount of resources for the agency is.
    I think that 5,000 deaths is too many. And ideally, you 
wouldn't have people dying from the food that they're eating. 
Now do I think that the measures that we're going to be putting 
into place will reduce that number? I do. I don't think it's 
entirely based on the number of resources or the number of 
people, but what we do with that. And I think that the shift to 
what Congressman Kingston was talking about, a prevention-
oriented system, is going to lead to reducing that. And 
ultimately, we have to measure our success by how many people 
are dying and how many people are getting sick, not how many 
people are we hiring or, you know, how many buildings are we 
building. And this gets to the management question that the 
chairwoman was raising, that if we can't demonstrate that 
you're getting important value for the resources at FDA, then 
we don't deserve the money.

                            IMPORTED SHRIMP

    Mr. Farr. Just one more question. I wanted to ask about--we 
understand that only about 2 percent of the shrimp that are 
imported are tested. Do we know if that number is correct?
    Dr. Sharfstein. That's probably about right. I think for 
food in general, it's about 1 percent. So that may be a little 
high. I'd have to look exactly for shrimp, but.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Farr. So since we import about 90 percent, we're told, 
of the shrimp that we consume, and we're only testing 2 
percent, that should probably cause us concern, wouldn't you--
--
    Dr. Sharfstein. Well, I think this gets to the question of 
whether testing and inspections is the measure of safety or 
not. And, you know, FDA could show up with a budget request 
that is truly astronomical if the idea was that we should be 
testing all imports or inspecting all facilities annually. But 
we're actually trying to use the resources in a way to 
establish a system that doesn't require that kind of testing. 
So one of the things that FDA is doing on shrimp is, there's a 
pilot project to certify a program that would basically train 
auditors and inspectors to do prevention-oriented work with all 
the different foreign shrimp producers so that we have 
confidence that the foreign production of shrimp is done under 
a prevention-oriented system, then you're just using testing to 
kind of check. And two percent might be fine at that point. If 
you don't have a strong prevention-oriented system in place, 
then you're kind of stuck just thinking about it as testing, 
but that's something that turns very expensive very quickly.
    So I think the principle is, we have to be assured that the 
system for production, both in the United States and 
internationally, is based around prevention, and then we do 
targeted testing to assure that rather than we have to test 
everything that's coming in, because even then you could miss 
stuff if the actual system isn't sound underneath that.
    Mr. Farr. I know a lot of us have farm-raised fish farms in 
their districts, and we've been concerned about the increase in 
the number of imports fish, so-called catfish, from countries 
we're concerned about not only the processing the facilities, 
the cleanliness of them, but where those fish are raised, we're 
concerned about that. And then the other day we were told--we 
were talking about catfish--that we really have never even 
identified what a catfish is. So that really causes a lot of 
concern. We don't know whether some of those fish coming in 
from other countries can even be classified as a catfish.
    Anyway, thank you for being here.
    Dr. Sharfstein. Thank you.
    Ms. DeLauro. Then my colleague raises an interesting 
question, which I intend to explore further on, which is about 
the issue of equivalency and in standards. And having to do 
with FDA, which at the moment does not have any system of 
equivalency, though you have stopped a whole lot of product 
coming in from China just in January, probably within 800 or so 
different kinds of products have been stopped from coming in to 
China. And I'll just say to my colleague at the request of a 
number of colleagues move catfish to FSIS in the farm bill. It 
was of concern to me at that juncture. It was a concern to me 
right now. Mr. Hinchey.
    Mr. Hinchey. Thank you very much, Madam Chairman, and thank 
you very much, Commissioner Sharfstein.
    It's interesting to listen to you. You seem to be dedicated 
to your responsibilities here with this job and that's very 
important. What you're doing is critically important to the 
health and safety and security of people all around this 
country, and that's something that we need very, very well. And 
the importance of the FDA is something that the chairman of 
this committee is focused on over the last several years in a 
very significant way, trying to make sure that this system 
works better.

                                GENERICS

    So I just want to ask you a couple general questions, and 
thank you very much for everything that you're doing. One of 
them has to do with the generics, generic drugs, and the 
expense of these generic drugs and the ability of people to buy 
them. With the downturn in the economy it's making it 
increasingly difficult for people to be able to afford these 
generics and there is less and less generic options for a 
substantial amount of these drugs that are very important for 
people's safety and security. So I wanted to ask you. What is 
the generic drug backlog now, and how does it compare to the 
past. And, also, can we get a commitment from the FDA to ensure 
that there will be enough staff to always keep the generic drug 
backlog below a reasonable number so fewer people are inhibited 
by it.
    Dr. Sharfstein. Thank you. I think it's a very important 
question. Generics are extremely important in U.S. medicine.
    Mr. Hinchey. I can't hear you very well.
    Dr. Sharfstein. Oh, I'm sorry. Thank you.
    Mr. Hinchey. Thanks.
    Dr. Sharfstein. No problem. I was just saying that generics 
are extremely important in American medicine and to many, many, 
many patients. Many people in Baltimore where I was health 
Commissioner really relied on generics and we were active in 
working with certain companies making generics available very 
cheaply to make sure that that information was know to 
patients. I think that the fact that there's such a backlog, my 
understanding is that it's about 1300 applications is 
definitely of concern.
    I don't think all of them necessarily are like ripe for 
approval right away, but that that's sort of what's in the 
pipeline and the need to increase resources and other types of 
measures is very important, and I think is something the 
President is counting on in part to reduce healthcare costs. 
And I think that's why we expect pretty strong backing for a 
user fee program for generics that would give considerable new 
resources, allow us to hire, I think, about another 60 or so 
people for the generic program and really make a dent in those 
numbers.
    Mr. Hinchey. So you are moving this in the right direction 
apparently and you are concerned about it, and you are trying 
to improve it as much as possible.
    Dr. Sharfstein. Yeah, this is very important, no question.

                               USER FEES

    Mr. Hinchey. Yeah, well, good, and look forward to working 
with you on that. One of the issues that we have dealt with 
over the course of the last several years if the Food and Drug 
Administration's dependence to a considerable extent 
financially on the drug industry, because of the financial 
interaction between the regulatory agency and the operations 
that are supposed to be regulated. In fiscal year 2001 the fees 
paid by the drug companies at that point funded 32 percent of 
the FDA's budget for drugs.
    Last year those fees comprised almost 50 percent of the 
drug program's budget and nearly a quarter percent of the FDA's 
overall budget. And that, of course, is something that has been 
a great concern for a number of people on this committee, 
including our chairman and others. We've been trying to deal 
with that issue and make it work much better than it has.
    So I'm wondering if you can tell us how much of the FDA's 
budget is expected to come from drug user fees in fiscal year 
2010. Now, that may be down even though it stays at the same 
level. The percentage of it may be down, because of the fact 
that the budget is going up, and appropriately so going up. But 
I'm just wondering how much of the FDA's budget is expected to 
come from drug user fees in this upcoming fiscal year, and what 
steps are currently being taken to end the FDA's close 
financial ties to the industry that it oversees.
    Dr. Sharfstein. So I understand, if I am looking at this 
correctly, that the overall drug program is about--I'm going to 
have to make sure I get this right--an overall for the agency 
the total budget is $3.2 billion, and the number of user fees 
is 800 million; but, if you're looking particularly at the drug 
program--I don't want to get the number wrong--so I might ask 
about that.
    Mr. Hinchey. Yeah, the numbers are important, but I'm more 
concerned about what your attitude is going to be and what your 
plans are, the direction in which you are going to be moving.
    Dr. Sharfstein. Well, let me tell you my attitude about it. 
I think it's certainly true the percentage of FDA's budget that 
is comprised of user fees has been increasing, and I think that 
I understand the concern people have made or expressed that 
user fees create perception or a conflict with the agency's 
work. And, I think from my perspective, I think these concerns 
reflect a broader lack of trust in FDA that goes deeper than 
questions about the agency's sources of income.
    And I think the most important thing that Dr. Hamburg and I 
can do is renew the public's confidence by acting with 
integrity and transparency by sending the signal inside and 
outside the agency that we will make decisions based on the 
best available scientific evidence and not on influence that's 
inappropriate and make sure decisions are not unduly influenced 
at any point, and I think that's something we are very 
interested in following through on, and we've already started 
some efforts in that regard.
    As far as the user fees themselves, my view is it depends 
on the type of user fee and the rules about the user fee. I 
think that when I go to the MVA and I pay for a license, I am 
not getting a lot of consideration aside from the MVA in 
response to that. And I think that one of the things you see is 
you look back on the history of the user fee program at FDA is 
what the user fees have been allowed to pay for has changed, 
and I think that has moved in the right direction. So that 
money that comes with fewer restrictions and allows important 
safety work to happen is going to have less of the concerns.
    Mr. Hinchey. Thank you. I appreciate that. But what I am 
concerned about frankly is in the context of this operation the 
ability of the operation that is being overseen having an 
opportunity to influence the decisions that are being made 
based upon the money that they are putting into the process. 
That's the important thing, and I am sure you will be focusing 
on it.
    Dr. Sharfstein. Right. I hear your concern.
    Ms. DeLauro. Thank you, Mr. Hinchey.
    I would just like to add to the conversation of my 
colleague, Mr. Hinchey, in this way. And that is I have always 
felt over the years that the user fees were never meant to 
outpace appropriations and that is in fact what exactly has 
happened. And it is not being part of the effort, but in effect 
in my view in control of the effort that I see compounded by a 
study by a Harvard Professor, ``New England Journal of 
Medicine'' in 2008, said that ``Since 1993 the first year of 
PDUFA drugs approved closest to the review deadlines had higher 
rates of serious safety issues in later years than other drugs.
    That was disputed by the FDA. Professor Reed checked his 
data. Months later he published his raw data in an 151-page 
memo where he made some corrections, but he stood by his 
original conclusion. And the most recent legislation, FDAAA, 
gave FDA long-needed power to order safety measures when 
approving drugs. But, before that, FDA reviewers with questions 
about safety issues could only request post-market safety 
studies, the large majority of which were never even started by 
the companies ordered to do them.
    I think it's probably not surprising that we have serious 
safety issues emerging years later. I am going to ask for your 
thoughts and this is not where I was going in terms of a 
question, but I think it is appropriate at this juncture to lay 
that on the table and ask to get your thoughts about that 
before I move.

                                 FDAAA

    Dr. Sharfstein. Let me respond in two ways. The first is 
the FDAAA legislation was extremely important. It came after a 
very important Institute of Medicine report when I was on the 
board. I joined the board that did that report after that 
report was done and I am very familiar with it. And I think it 
did give very important authorities to FDA when that 
legislation passed; not just require studies, but also to 
require label changes and to require risk management strategies 
for drugs that are marketed.
    And I think all those things, plus the flexibility and the 
user fees to spend more on safety, is going to strengthen what 
FDA can do. And I do think there is--and I want to respond in a 
slightly different way also--which is I think ultimately if the 
history of the FDA--and I definitely would commend Phillip 
Hills' book ``Protecting America's Health'' on this--is that 
there is not such an opposition between a strong FDA and a 
strong industry.
    In fact, if you look back on the history of the FDA, when 
FDA has had trouble with regulation or their having had 
authority and people have been injured and all sorts of 
problems have happened. It is undermining confidence in the 
industry, and the industry financially has suffered pretty 
dramatically. And if you look across the last century you see 
that when FDA does its job fairly and reasonably in the 
interest of public health, even if it is strengthening its 
oversight, the industry actually does well. And I think that, 
you know, we are going to do the best we can to make the right 
decisions for public health, but I have every expectation that 
as we do that and as we are able to strengthen the credibility 
of the agency, that the industry in the long term will benefit 
too.
    Ms. DeLauro. I would just say this to Dr. Sharfstein. It is 
not something I haven't said from this microphone over the last 
several years. I think what specifically happened with regard 
to the FDA, that it lost its mission; that it is a regulatory 
agency. It has not functioned as a regulatory agency. I would 
just submit to you that part of that problem has come from 
undue influence of an industry and I do believe that the user 
fee issues have had an effect on that process, have made it 
more difficult. I believe that is one of the single biggest 
efforts that you and Dr. Hamburg have to take a hard look at to 
restore the regulatory mission to this agency, self-regulation 
has failed. It has failed unmercifully in our financial 
institutions and we have been brought to our knees financially.
    Now, that is one level of difficulty when this agency 
doesn't regulate the products that it is supposed to regulate, 
people die. That is the result; and, I believe on both sides of 
the aisle on this committee, we want to return the regulatory 
function to this agency. Let me just comment. Let me go back on 
the issue of budget increases and food, and taking a look at 
the testimony, I was a little bit concerned.
    Lots of useful activities, stepped up inspections, honestly 
a lot sounds to me like buzz words from a prior administration 
working with stakeholders and probing risk communication. This 
is a real change, a real change from the past would be a plan 
on food safety that identify the foods at greatest risk, that 
dealt with enforceable performance standards on pathogens, 
E.Coli, salmonella, listeria, and those performance standards 
could be developed with industry.
    Looking at a system akin to a HAACP system that allowed for 
sampling and contamination, and a requirement that that had to 
be reported back to the FDA to looking at how we do base 
facilities on risk and then developing a system for inspection, 
because we cannot inspect everything. But if we do not have 
data and information to base on that risk that which would seem 
to me that we are not going to get anywhere here and a strong 
certification process for imported foods, I don't see very much 
of that in testimony. I know you are there a short time.
    Dr. Hamburg is not even there at the moment, but these are 
the kinds of changes that I am looking for with regard to the 
food safety aspect of the FDA. And, you know what my position 
is on where food safety ought to be. I don't have to repeat 
that here, but will we see these kinds of changes from the FDA? 
In the future I will make another point: Energy and Commerce is 
going to produce a piece of legislation in short order.
    If we are to move in direction seriously on food safety are 
these kinds of requirements in that piece of legislation, and 
will you support these kinds of requirements in that 
legislation? The train has left the station on food safety and 
I need to know from FDA's perspective if you will support these 
kinds of efforts in a food safety piece of legislation.
    Dr. Sharfstein. Thank you. Excellent question, I think.
    The budget testimony kind of runs down the general areas 
where the money is going to go. It's not oriented in terms of 
the priorities for food safety, and I think my list of 
priorities for food safety would be very similar to yours. It's 
not about meeting with stakeholders. It is about putting in 
place a modern, regulatory system for food that's premised on 
prevention, and I think that is the gist of the Commerce 
Committee bill which I fully expect we'll be able to support.
    I think the food safety working group, which I met the 
other day when you were there, talked about that. Those are the 
principles that we are going to support. There is a tremendous 
amount of new authority that FDA needs to be able to accomplish 
that, but at the same time we are proceeding as if, you know, 
we are going to get it. And, we are working very hard within 
FDA to develop regulations around GMPs that need to be revised, 
an approach to prevent good standards of the HASAP model and 
others that could be put in the enforceable.
    And I met multiple times with industry groups and that's 
what they want too. You know, and I think if we don't see 
results in those ways, the FDA is not succeeding in food safety 
and I think Dr. Hamburg and I are going to make that an extreme 
priority. And our progress has got to be measured and the 
implementation of those things, not in the number of people 
hired necessarily. I mean those things we think are important 
to get there, but that's not actually progress, nor is the 
number of inspections progress. It is those other things that 
are going to represent progress.
    Ms. DeLauro. Thank you.
    I went over and I apologized to Mr. Kingston.
    Mr. Kingston. Thank you, Rosa.
    Dr. Sharfstein, I wanted to take in the numbers the CDC and 
Inspector General has given us. There are 76 million food borne 
illnesses reported a year; 300,000 hospitalizations; 5,000 
deaths. Everybody on the same page on that?
    Dr. Sharfstein. Yes.
    Mr. Kingston. Okay. 300 million Americans eating three 
meals a day, no snacks. It is 9 million meals eaten daily times 
365 days a year. That's 328 billion meals a year and so if you 
divide that by the food-borne illnesses, you actually come up 
with a rate of safe food at 99.98 percent. Correct? I mean this 
me. I want to make sure that there's no editorializing or 
fudging here, so that is the mathematical model. I mean that's 
the mathematical reality. Correct?
    Dr. Sharfstein. The vast majority of food in the United 
States is safe. No question!

                       FOOD SAFETY WORKING GROUP

    Mr. Kingston. Right. So where I am confused is with food 
safety being at 99.998 percent safe, is the goal of the FDA 
specific in terms of food safety or is it this general 
political where we need more food safety? And the reason why I 
say that to you as a scientist, how do we measure it? Will it 
be on, okay, we had less than 300,000 go to the hospital? Or do 
we have less than 5,000 deaths? I mean, where will the metrics 
be?
    Dr. Sharfstein. That's a very important question. The food 
safety working group or the President has identified that as 
one of the top priorities. And when the food safety working 
group comes out with its report, you are going to see this is 
what we mean by progress and food safety, and it is going to be 
very specific.
    I do think we want to see fewer deaths and fewer 
hospitalizations; and, you know, you can look at these numbers 
from different perspectives. As a physician, I have taken care 
of kids who have been very sick from food borne illness, and I 
will never forget a little girl I took care of who had 
hemolytic uremic syndrome from E.Coli 015787 and she was in 
renal failure. She was on a fluid restriction and she was 
begging for water, and her parents couldn't give it to her.
    And I'll never forget that. And I think it's sort of like 
when you have that kind of thing that is preventable, and now I 
think if you get to a point where you decide, you know, there's 
just not more that you can do to make it preventable, then 
that's where you are. But when you have preventable illness.
    Mr. Kingston. What I want to make sure is we have a 
specific goal in mind.
    Dr. Sharfstein. Yes.
    Mr. Kingston. Because I do think that another thing we 
never talk about in this committee is the 300,000 
hospitalizations or the 5,000 deaths. How many of those people 
actually had a broken immune system to begin with? Perhaps this 
little girl I don't know, and certainly wouldn't want to base 
decisions on anecdotal evidence any more than you would as a 
scientist.
    But the other question is how much of this could be 
prevented with consumer education. You know, like we have 
always been told, do not put the cooked hamburger back on the 
same plate that you put the raw hamburger when you are taking 
it to the grill unless you have washed it. Do you know the 
breakdown of that 5,000, how much of this was in the household 
versus anything in the food processing commercial side of it?
    Dr. Sharfstein. My understanding, generally speaking, that 
about two-thirds of the illness are from FDA-regulated products 
and about a third from USDA; and, so, the meats would be about 
a third and the other types of food would be about two-thirds, 
but----
    Mr. Kingston. So, I want to make sure I understand.
    Dr. Sharfstein. But don't stop me answering your question.
    Mr. Kingston. Yeah. No, but what you are saying about a 
third of it is something that happened in the household that 
could not be regulated. Is that?

                                 E.COLI

    Dr. Sharfstein. Well, no; not exactly. I think that for 
some problems that happened in food safety, you know, for 
example all E.Coli that's in meat, if the meat is handled with 
gloves and everything and it's cooked completely, that E.Coli 
is going to get killed by the heat, you know.
    But that doesn't mean that you want to put people at risk 
by having a lot of E.Coli in the meat, because not everybody is 
going to be able to keep to that standard. So I think of it as 
a shared responsibility. I know that consumer education is an 
extremely important part of what we want to accomplish and USDA 
wants to accomplish, but that alone is not going to be 
sufficient.
    And I think that you are raising a question, which is 
important, which is when we talk about food safety, are we 
dancing on the head of the pin. Are we talking about real 
things that can be done that can make meaningful improvements 
in food safety? And I think if you look back to say the PCA 
thing that just happened and the fact that you had a facility 
that was very----
    Mr. Kingston. It was criminal actually more than process.
    Dr. Sharfstein. And, but the fact that you had hundreds of 
companies that were purchasing from that facility and not 
really aware of the conditions there, it suggests that there 
are things that could be done, processes that can be put in 
place, that can make the food supply a lot safer. It won't be 
perfectly safe at the end of the day, and I don't think 
perfection can be expected in this. But meaningful improvements 
that will reduce those numbers are what we are trying to find.
    Mr. Kingston. Yeah. No. I am excited about it, but I also 
feel that FDA in the face of political pressure still has to be 
the adult in the room and say, you know, the food system is 
right here now, and we want to take it here, which means we are 
going to own up to this 300,000 number. We are going to reduce 
it to 150,000; and, I am like you. I don't want any deaths, 
whether they are food borne, you know, from the household 
issues or elsewhere.
    Dr. Sharfstein. So, your point is extremely well taken. I 
think the metrics and outcome have got to be a part of what we 
are doing.
    Ms. DeLauro. Mr. Farr.
    Mr. Farr. Thank you very much. I think the certification 
process really needs to be implemented, because I represent the 
most productive agricultural valley, maybe in the world, the 
Salinas Valley. And it was the center for the E.Coli breakout--
not the Salinas Valley, but a valley near there--and it was 
isolated to one farm.
    That E.Coli spinach recall had all kinds of unintended 
consequences for growers. One was that it was voluntary, so 
about a hundred millions dollars was lost in our county and not 
reimbursed in any way by any insurance. If it had been a 
taking, of course, it would have been some reimbursement for 
that.
    I want to compliment you, because I have seen your budget. 
You are going to spend some money on it to improve risk 
communication during a food safety event so that the public can 
respond promptly to the FDA alerts and protect themselves from 
harm. I would like to make sure that you also include that to 
study the ways of improving the communication so that it's not 
just a scare tactic, because that's where I think, you know, 
the analogy given, ``if an airplane goes down people don't stop 
flying.''
    But with this, the unintended consequences of just saying 
``Don't eat spinach,'' is to this day, leafy greens have never 
reached what they were at that point. And you know Mexico 
didn't say we're not going to buy any lettuce from the United 
States. The E.Coli was in spinach. But I think it is really 
important for the government in its ability to inform a 
constituency. I have seen this with fires this summer where--
nothing to do with your agency--but law enforcement demanded 
that people leave, and they had all the information they 
needed, because they'd look on the Internet. And they'd say, 
``Why should I leave my house?''
    You know, ``The fire is 10 miles away. It is burning at a 
half a mile a day. It is not going to be here for days. I am 
not going to leave.'' And I think there is a whole new 
communication system out there that government hasn't really 
taken into consideration. It's the Internet, and Facebook, and 
so on. So I hope with this money that you're going to really 
work on what I call risk communication to make sure that the 
communicators think about what they're saying the consequences 
of that will be.

                          RECOVERY OF INDUSTRY

    Dr. Sharfstein. Let me respond in two ways. The first is I 
think that the response to these outbreaks is under-prioritized 
recovery. Recovery is a really important goal of food safety 
system, and I mean by recover, I mean recovery of the industry. 
And even from the beginning of an outbreak, that has to be a 
consideration; and, I'll give you a specific example of my 
short time with FDA how that's played out.
    From the moment that we were engaged with the pistachio 
industry, we called in the leaders of the industry and talked 
to them, and asked them to see whether they would be willing to 
set up a website right away that would be the products that 
were not associated with the farm that had the problems. And 
they were maybe a little surprised to hear from us, but very 
interested; and they immediately set that up.
    And we've had, you know, many, many hundred thousand--I 
don't know exactly how many--hits through our website. We link 
to it from the FDA website; the industry, you know, wanting to 
make clear right from the beginning which products were not 
associated with this particular farm that was the problem.
    And, I think that's a very small step, but I think we have 
to think about from the beginning of these how we narrow the 
advice, and then what we do to permit confidence in the food, 
because people have to eat. And there are so many healthy foods 
out there, that's just extremely important.

                           RISK COMMUNICATION

    On your point about risk communication I can tell you as a 
former local health officer in Baltimore that is the most 
challenging part of the job.
    Mr. Farr. What you learned as a doctor, the first rule is 
don't alarm the patient?
    Dr. Sharfstein. Well, I think you're right. We don't want 
to alarm people. On the other hand, we want to give people the 
risk information that they need to protect them.
    Mr. Farr. Exactly, but we have to be smart about it.
    Dr. Sharfstein. And what we're going to use the money for 
is in part to work with some researchers to hear how people are 
hearing the messages, because you can say the message and you 
can think you are getting it across; and people aren't hearing.
    Ms. DeLauro. Thank you. We also want to prevent them and 
not react to them continuously. Mr. Latham.
    Mr. Latham. Thank you Madam Chairman.
    And I know we have votes on the floor here so I'm going to 
try to be brief. First of all, I want to associate myself with 
the previous round, Mr. Farr's question about the disparity of 
inspections for express carriers, and that's a major issue; 
and, we need answers on that.
    Talking about imported products; and, Ms. Emerson wanted me 
to ask some questions also about how the FDA proposals to rely 
on certification in order to obtain assurances that products 
comply with food safety standards, the certification, how would 
that work? Would it be used on domestic products only or on 
imports, or only for imports?

                           DOMESTIC PRODUCTS

    Dr. Sharfstein. So we are putting together the pieces of 
how we would approach this, and I will start with domestic 
products. I think the understanding is that we would have an 
integrated local, state-federal system where we would be 
working very closely with the states, localities, and there 
would be inspection through that system, not through third-
party certification.
    For imports, it's a different situation, and I think the 
best position you'd be in is where the country is doing such a 
credible job of inspections that you can rely on the country 
certification.
    Mr. Latham. How do you assure that? I think that's the 
question. I think that's the question. How do you assure that 
the foreign country is credible. You've got people over the 
monitoring all the time? Or are there certification processes?
    Dr. Sharfstein. That hasn't started at FDA yet. USDA has 
the whole system of certification. We could probably learn a 
lot from how they do it, but we would anticipate that not every 
country is going to qualify for that, so then you've got to 
shift gears a little bit and you've got to say: ``All right, if 
the country is not going to do it, could the country as a 
whole?''

                       THIRD-PARTY CERTIFICATION

    Maybe the country's oversight of this particular crop will 
be sufficient. We'd have to create standards for that; and, if 
that's not sufficient, maybe there's a third-party 
certification process, internationally, like they are trying to 
do with shrimp that could have credibility. And with each of 
the steps you want to be checking more and more so that, you 
know, if the country standard is the best standard to have, you 
would have a certain level of checking.
    But as you move towards other levels of standards that, you 
know, you are going to have enough confidence in, but you were 
going to have that confidence because you are going to be 
checking more and more, so we hope to be sharing. And I think, 
you know, an approach to this that will make sense and be able 
to answer some of those questions. In part, it is going to 
depend on whether and what kind of food safety legislation 
passes, because it gives us different authorities in that 
respect.
    Mr. Latham. Now you've got a proposal that products that 
fulfill additional guarantees to exclude intentional 
contamination bioterrorism risks, maybe eligible for fast-track 
processing at the border. Are you going to have rules? Are you 
going to have guidance for the companies? Do you have any idea 
where that's going to come down?
    Dr. Sharfstein. I think that partly is going to depend on 
what passes in Congress. But the principle there is the more 
assurance we have that something is safe based on the rules 
that pertain to where it's made and who's overseeing it there, 
then the quicker it will be able to get into the country. The 
less assurance we have depending on the system, then the more 
we are going to have to do at the border for those products.
    Mr. Latham. Do you expect to have fewer inspections under a 
system like that?
    Dr. Sharfstein. I think that what we expect to have to be 
able to target whatever number of inspections we have as 
effectively as possible. So I don't think that we are going to 
say. We'd like a system that doesn't have to be that we are 
inspecting 50 percent of the food, because that would be 
enormously expensive and not even as effective as having a 
better prevention approach in other countries.
    Mr. Latham. Okay. I am going to stop there in the interest 
of time. I've got some questions for the record, but thank you, 
Madam Chairman. Thank you.
    Dr. Sharfstein. Thank you.
    Ms. DeLauro. Thank you.
    I will encourage my colleagues to go to vote. I just want 
to lay out something that we can come back to, but we will do 
that. I will be back and I think many of those who can will 
come back as well for additional questions. This has to do with 
counterfeit and contaminated products from China. A ``Reuters'' 
news story: ``China State Food and Drug Administration counted 
329,613 cases of the distribution of unlicensed drugs and 
medical products in 2007.'' Recent Op-Ed in the Asian section 
of the ``Wall Street Journal,'' as many as five million Chinese 
citizens work in the counterfeit market, which includes fake 
drugs, patent infringement and trademark infringement.
    While the Chinese government might not directly participate 
in drug counterfeiting, it certainly enables the practice at a 
minimum by looking the other way. Indeed, drug counterfeiting 
may be a significant part of the economy. The story also quoted 
a Chinese expert in counterfeiting who said: ``Counterfeiting 
is now so huge in China that radical action would crash the 
economy over night and even destabilize a government or 
counterfeit factories and warehouses are often owned by local 
military and political grandees.''
    Five million people in China work at counterfeiting drugs; 
little enforcement by their government. What do you plan to do 
beyond--right now, as I understand, there are a couple of 
offices in China staffed by a few people in order to be able to 
safeguard the American people from dangerous drugs--Chinese 
drugs, drug ingredients and foods.
    I clearly will come back with that, but I also have here a 
list of, you know, January 2009 listing all of the various 
products that have been stopped coming in from China as 
something as unsafe and we've got in the first four months of 
2009 such practices as what the Chinese government is doing. 
The FDA rejected 839 shipments of Chinese products including 
fish.
    Anyway, I have two minutes to go to vote, but I mean this 
is such a serious issue without any real infrastructure in 
place to deal with it. Two percent of shrimp inspected, I mean, 
I think this is a crisis. I really do. And, today, 73 percent 
of people in this country are more fearful of the food they are 
eating in terms of food safety than they are in the war on 
terror, so I am going to ask you to address this when I get 
back. Thank you very much.
    Recess subject to the chair. Thank you.
    [Recess.]
    Ms. DeLauro. I want to get the permission, which I have, of 
the Ranking Member. You usually cannot start with just one 
person. I apologize. It was longer than anticipated.
    The hearing is called to order. I am not going to go 
through the commentary again, Dr. Sharfstein. This is on the 
counterfeit drugs, China.
    Dr. Sharfstein. I think this is an extremely important 
issue and one that Dr. Hamburg feels particularly engaged in. I 
think she is very aware of the statistics like this that show 
the increase in imports over time and reflect the incredible 
change in the world over the last decade in how products are 
coming to the United States.

                           COUNTERFEIT DRUGS

    I think there are three separate issues. One is the 
counterfeit issue, which are drugs that are sort of purported 
to be a particular drug but are not that drug at all. That is 
very much an issue of global concern.
    The World Health Organization is very engaged in it and 
there is going to be a lot of activity globally on it.
    I think part of the solution to that one in comparison to 
the other two issues is that if we had a solid system for 
pedigree and tracking of drugs, then we know we are getting 
what we are getting. That is for that issue.

                          SUPPLY CHAIN SAFETY

    Then there is a second issue of for what we are getting, 
are there safety issues. You have the not counterfeit, meaning 
a drug that is not sort of fake but the actual drug that has 
originated from another country where there are issues in the 
supply chain. The obvious example would be Heparin.
    Ms. DeLauro. That is the thing that just came to my mind.

                                HEPARIN

    Dr. Sharfstein. That is in the second category. The Heparin 
problem was not a counterfeit problem. It was a problem that 
the actual raw ingredient was contaminated, and you have a 
situation where many raw ingredients for many drugs----
    Ms. DeLauro. That appears to be intentional, the 
contamination of Heparin. No?
    Dr. Sharfstein. You have this issue of actual products that 
are legitimate products but may be unsafe because of problems 
in the supply chain.
    Ms. DeLauro. That requires a tracking system.
    Dr. Sharfstein. I think the first issue, the counterfeit 
issue really is a solid tracking system, make sure you are 
getting the actual drug you think you are getting in the sense 
that this is the company's drug. It is not someone purporting 
to be the company's drug.
    The second issue is more complex because even a tracking 
system, you could be getting the drug you think you are getting 
but that drug can be contaminated in some way, and trying to 
figure out how to establish a system that is going to prevent 
that is much more complex.
    Then there is the issue of foods, where you have hundreds 
of thousands of companies selling foods into the United States 
from different directions, all sorts of different foods, and it 
is not a closed system like the drug supply is.
    Each of those are major challenges. I think this is going 
to be--you are putting your finger on one of the biggest 
challenges facing the food and drug markets, the biggest 
challenges facing the FDA, it is going to require a combination 
of approaches, but we are very much aware this is an important 
issue.
    The approaches include, I think, responsibility at a lot of 
different levels. We have to hold the Government responsible in 
part, the Chinese Government, but in addition, the people 
importing the product have to be responsible. The companies 
that are--it is their supply chain, they have to be 
responsible.
    There are major public health issues involved in this. 
There would be obvious public health issues like the food being 
unsafe or the drugs being unsafe, but then there are other 
public health issues.
    The market for counterfeit drugs could mean a lot of people 
not getting treated with the right drugs, or for example, when 
you are dealing with anti-microbial drugs, like tuberculosis 
drugs, if somebody is making a poor quality tuberculosis drug, 
it is not even just that the patient does not get treated but 
that tuberculosis could become resistant.
    Ms. DeLauro. Right, and that is a real problem.
    Dr. Sharfstein. That could swing back and hit the whole 
world. You have a series of overlapping challenges with imports 
that are going to be very important to address.
    Ms. DeLauro. This is January 2009. Coca, melamine. Mixed 
mushroom, filthy. Frozen cat fish nuggets, Chloramphenicol. 
Chocolate candy, dark chocolate, all melamine. Dried mushrooms, 
filthy. Dried food, candy glaze, honey. Filthy.
    It is staggering. This was stopped, fortunately. It is a 
large plate with a lot of things on it, but I think--
vermicelli, filthy.

                             PUBLIC HEALTH

    Dr. Sharfstein. I take that personally.
    Ms. DeLauro. Right, I take that very, very personally. 
Frozen white shrimp, unsafe animal drugs, fermented shrimp 
sauce.
    Your business and my business is not trade. This is about 
the public health. We need to be able to rely on you to put the 
mechanisms in place. This is something that we will continue to 
talk about as you all move forward.
    Mr. Kingston.

                               CIGARETTES

    Mr. Kingston. Thanks, Rosa. Doctor, on the regulation of 
cigarettes, nicotine is carcinogenic, yes or no? What is 
carcinogenic in cigarettes? What ingredients?
    Dr. Sharfstein. Which ingredients? I think there are a 
number of them. I think there are more than 100 carcinogenic 
ingredients in cigarettes.
    Mr. Kingston. Are you not in kind of an oddball 
philosophical position of having to come up with acceptable 
regulations of carcinogens?
    Dr. Sharfstein. You mean----
    Mr. Kingston. Let us just say that was in cereal. You would 
not allow the cereal, right?
    Dr. Sharfstein. I think I understand what you are saying, 
that if the legislation that is moving forward now were to pass 
and FDA were to have regulatory authority over tobacco, would 
there be kind of a weird situation for FDA given that 
cigarettes are harmful, to regulate them.
    I think it is a fair question to ask. I think the question 
that you have to ask with this is sort of the same question you 
have to ask with any kind of product or regulatory decision, 
which is do the benefits of doing it outweigh the risks.
    I think the benefits of FDA regulation on tobacco could be 
quite considerable in terms of the public health. Tobacco is 
such a dangerous product and so unregulated right now.
    At the same time, there are potential risks. One of the 
risks is that people may perceive why is FDA permitting 
something that is unsafe, as you put it.
    I think on balance, there is no question in my mind that 
the benefits would outweigh the risks.
    Mr. Kingston. What would you be able to do that would be 
different from what is going on now?
    Dr. Sharfstein. Under the tobacco legislation?
    Mr. Kingston. Yes.
    Dr. Sharfstein. I think there is authority there that 
relates to the marketing of tobacco products as well as the 
composition and performance standards that would be for the 
manufacturing of tobacco products.
    Mr. Kingston. What would you do different in the 
advertising?
    Dr. Sharfstein. We do not have authority over it and it is 
not something the agency has really thought of, but it would 
be--the one thing I would say is part of the legislation does 
implement the 1996 rules, which was proposed and does have some 
advertising related provisions in it.
    I do not know if I could tell you all of them exactly. If 
you went back to that, you could see some of the things that 
the bill----
    Mr. Kingston. Maybe if you could give me something for the 
record. I would love to know what you would do different in 
advertising and then what you would do different in the 
regulatory structure, and the big question that everybody hates 
to ask, you know, what is the safe level of nicotine.
    Are you going to tell me I can go to three cigarettes a day 
and that is better than ten? Once you have that FDA stamp on 
there, you are telling a whole bunch of kids, hey, the FDA 
approves it.
    [The information follows:]

    The Family Smoking Prevention and Tobacco Control Act (Tobacco 
Control Act) amends the Food, Drug, and Cosmetic Act (FDCA) to give FDA 
authority over tobacco advertising in several respects, including, 
principally:
      Under FDCA Section 906(d), FDA may impose restrictions on 
the advertising and promotion of a tobacco product as appropriate to 
protect the public health.
      Under FDCA Section 903, a tobacco product is misbranded: 
(1) if its advertising is false or misleading in any respect (Section 
903(a)(7)(A)); (2) if it is sold or distributed in violation of 
regulations prescribed under Section 906(d) (Section 903(a)(7)(B)); or 
(3) unless its advertising and other descriptive printed material 
includes certain information (Section 903(a)(8)).
      FDCA Section 911 contains several provisions relating to 
advertising for modified risk tobacco products, which give FDA some 
administrative responsibilities, rulemaking authority, and enforcement 
authority.
      Section 201 of the Tobacco Control Act directed FDA to 
reissue final regulations issued in 1996 that restrict access and 
certain marketing practices, including certain advertising practices, 
to protect children and adolescents. These regulations, 21 CFR Part 
1140, were reissued on March 19, 2010 (75 FR 13225).
      Section 201 of the Tobacco Control Act amends the Federal 
Cigarette Labeling and Advertising Act and Section 204 amends the 
Comprehensive Smokeless Tobacco Health Education Act of 1986 to give 
FDA administrative responsibilities, rulemaking authority, and 
enforcement authority over the statutory health warnings on cigarette 
and smokeless tobacco packages and in advertisements.

    Dr. Sharfstein. I could tell you that three cigarettes a 
day is probably better than ten because there is a dose 
response, the more people smoke, the more dangerous it is for 
them.
    I do hear your point. I know it is something the bill tries 
to address. I think it is something that has to be taken into 
account as you move forward so people do not get the idea that 
a product is safe just because the FDA regulates it.
    FDA regulates other things that may not be so safe also, 
and has to deal with that same balance.
    Mr. Kingston. Do you regulate things that have carcinogens 
in them?

                              TANNING BEDS

    Dr. Sharfstein. Yes. For example, tanning beds would be an 
example, and can promote skin cancer. There are actually a lot 
of drugs that can cause cancer.
    Mr. Kingston. Let me ask you this, another philosophical 
question. Do you think FDA should regulate cigarettes?
    Dr. Sharfstein. Yes.

                               CIGARETTES

    Mr. Kingston. Do you think cigarettes are bad for you?
    Dr. Sharfstein. Yes.
    Mr. Kingston. Do you feel--I am going to kind of assume you 
do feel a little bit of queasiness in that there is an 
endorsement side to this; correct?
    Dr. Sharfstein. I think you have to look at it as a benefit 
of regulation versus the risk, just like any kind of balance.
    Mr. Kingston. You have an opportunity to control it a 
little better and kind of accept, you know, you cannot outlaw 
tobacco smoking but FDA involvement might come up with better 
results, philosophically.
    As I understand it, menthol cigarettes are exempted. Is 
that correct or am I wrong on that?
    Dr. Sharfstein. I think the current version of the bill 
prohibits certain flavorants right off the bat.
    Mr. Kingston. I think they are exempted.
    Dr. Sharfstein. What menthol is--menthol is not listed as 
one that by statute is prohibited, but the FDA would have 
authority to take action on menthol under the current version 
of the bill.
    Mr. Kingston. The menthol language, you think is fine and 
acceptable, or would that be something you would not wish 
necessarily was in there?
    Dr. Sharfstein. I think the menthol language is fine. I 
think the President has made it clear that he supports the 
legislation.

                                TOMATOES

    Mr. Kingston. I want to get back to Mr. Farr's question 
earlier in terms of the health benefits of eating peanuts, 
spinach or tomatoes. When the FDA sounded the alarm on those 
three products, there were a lot of people who were unable to 
buy these products or they could buy them but basically, it was 
very risky.
    Dr. Sharfstein. They were told not to eat them in some 
cases.
    Mr. Kingston. Mr. Farr's analogy, and I think it is a good 
one, it is almost like there is a plane crash and we have gone 
out and told people do not fly, planes are unsafe.
    That absolutely was not the case with many of the products 
that are out there. You had said to him that is where the trace 
back becomes important, so you do not just say okay, nobody eat 
tomatoes for the next three months until we get to the bottom 
of this, but you could pinpoint what farm or what production 
shop or whatever.
    There would be a data bank of information. Who keeps that 
information and for how long and who would have access to it?
    Dr. Sharfstein. That is an excellent question. I think 
right now, FDA is working on guidance for the industry on how 
to keep information. Ideal would be that the companies would 
keep the information.
    Mr. Kingston. I just want to interrupt real quick. I may 
have misunderstood you but I thought you said to him that the 
stakeholders would not be in the room, that you would do this 
kind of by yourself or something.
    Dr. Sharfstein. No, I do not believe that at all.
    Mr. Kingston. There was some statement. I want to make sure 
I have a clarification.
    Dr. Sharfstein. I think that working with industry in 
these--
    Mr. Kingston. As you did. I think you pointed out with 
pistachios, you did bring in--that was a different model than 
these other commodities.
    Dr. Sharfstein. I started the day the pistachio thing 
happened. It has been said no matter how long I last at the 
agency, whether it is a month or ten years, my good-bye present 
is going to be a bag of pistachios.
    That is where we started and I thought it was very 
important to reach out to the industry.
    The other area in food that we have dealt with is alfalfa 
sprouts. That was very challenging. We had extensive 
conversations with industry from the beginning. It is only at 
the point where we realized it looked like 70 percent of the 
seeds could potentially be involved, the industry understood 
the predicament.
    It is challenging. When I was the health commissioner in 
Baltimore, you get called in the middle of the night. There are 
100 people that are sick in the hospital. You show up.
    This is a true story. I went to the hospital. They said 
there had been a wedding and someone had driven a pig down from 
New York, from New York to Baltimore. People had eaten it after 
it had been sort of at lukewarm temperature.
    Clearly, you knew exactly what made people sick. Now you 
have the situation where you know probably thousands of people 
have gotten sick and you do not know the cause. It is a real 
challenge.
    I think that when we are in that situation, we want to 
protect people, but we do not want to scare people and destroy 
industries that are very important to the United States.
    I think we have been trying to do this a lot more, or I 
have been trying. It is one of my goals since I have been 
there, to get everybody who is engaged and knows information to 
the table, figure out how we can best make a tough judgment 
under the circumstances to protect people and balance that 
against the other issues that are involved.
    It may be that what we did with pistachios is we made a 
pretty broad announcement and then narrowed it very quickly, 
and the same thing with alfalfa sprouts, a pretty broad 
announcement but we told people we think we are days away from 
getting it more narrow, and we were days away, and we were able 
to narrow it. It was by working in large part with the industry 
that we were able to figure that out.

                                INDUSTRY

    I met with the industry several times already. They have 
been very open to it, even on peanuts. We are working with them 
to try to get the messages out that they are interested in 
getting to their growers. They have been incredibly supportive 
of the FDA doing more.
    I think there is a lot to be done in concert with industry 
that is going to make the food supply safer.
    Mr. Kingston. Thank you.
    Ms. DeLauro. I think it is true about industry. We were 
both here when the western growers told us that what we needed 
were mandatory enforceable standards because they were going 
out of business. Spinach has not come back to what it was. 
Tomatoes, lettuce, peppers, the whole business.
    I think industry is very, very much interested in making 
sure that the product is safe and there is an opportunity to 
work with them.

                               USER FEES

    I want to ask about the food registration and inspector 
user fees. There are a few references in the budget document 
which you estimate in terms of food registration, an inspector 
user fee, $75 million in 2010.
    At one point, the document says the fee would allow FDA to 
collect fees to register food facilities and conduct safety and 
good manufacturing practices, inspections of food manufacturing 
and processing facilities.
    How would the fee be assessed? Are you proposing a single 
fee for registration, that is conducting the safety, the good 
management practices? This fee would fund inspections or are 
you planning to charge both a registration fee and a fee for 
the cost of inspections?
    If you are planning a fee for inspections, would that be 
assessed on a per inspection basis or would it be a general fee 
paid by the facility?
    Frankly, I would be concerned about the potential for a 
conflict of interest in a per inspection fee.
    Dr. Sharfstein. I understand that. I am going to ask 
Patrick to tell me whether I am wrong on this. I may just have 
him answer that question. I know there is a registration fee 
and I think there is a re-inspection fee, which is a separate 
fee.
    Ms. DeLauro. That is a different issue. That requires 
legislation.
    Dr. Sharfstein. Right. I think this also would require 
legislation, the food registration fee.
    Ms. DeLauro. That is right.
    Dr. Sharfstein. I know at a minimum it would be a fee upon 
registration. I do not know whether it is contemplated, I have 
not heard, that it would be a per inspection fee.
    Mr. McGarey. I have not heard any discussions on it being a 
per inspection fee.
    Ms. DeLauro. It would be important to know. If you could 
get back to us on that. That is something we would just like to 
get some clarity on.
    [The information follows:]

                             FDA User Fees

    FDA's FY 2010 budget includes $75,000,000 for user fees to register 
food facilities and conduct safety and good manufacturing practices 
inspections of facilities that manufacture and process foods that 
Americans consume. The Food Registration and Inspection User Fees 
recommended in the FY 2010 budget would be paid annually by each 
registered food facility, whether the facility is inspected that year 
or not. FDA will use the fees to pay for inspections of food facilities 
and other food safety activities that FDA conducts.

    Dr. Sharfstein. Okay. No problem.
    Mr. Kingston. Rosa, would you mind yielding?
    Ms. DeLauro. Not at all. Go ahead.

                             GENERIC DRUGS

    Mr. Kingston. I think this Committee really is 
philosophically in support of generic drugs, and what we might 
be interested in from you is what can we do to accelerate them 
getting to market. There are a lot of obstacles that are out 
there. We would not mind straying into the authorization 
territory. Appropriators do not authorize unless you have 
everybody who wants to authorize, have 51 percent agree.
    I think we would be interested in hearing from you on 
suggestions to get them out there.
    Dr. Sharfstein. Yes.
    I think there is obviously a goal of getting the user fee 
program off the ground. I met with the generic drug industry. 
They seem quite open to the idea of this. I think if everybody 
who is engaged in it seems supportive of it, you have at least 
the basis for it actually happening.
    I would be pretty optimistic just going in that it could be 
worked out that way, but I do think if that path does not pan 
out, we are going to need more resources to be able to get more 
generics to the market.
    Ms. DeLauro. The control measures for all levels of food 
production and processing, the budget again says ``FDA will 
improve its ability to protect American consumers, strengthen 
safety and secure the supply chain by working with domestic and 
foreign industry to develop new control measures for all levels 
of food production and processing.
    ``FDA will also verify that these control measures are 
effective when implemented.''
    This ties in with what we were talking about before in 
terms of the imports. What exactly are these control measures? 
Will they be enforced, and if so, how?
    Further on control measures, I have two more specific 
questions on this and your views on moving to an equivalency 
system for FDA regulated food imports.
    My understanding is this was proposed during the Clinton 
Administration but never implemented. While I believe that 
there are gaping holes in how FSIS has administered 
equivalency, I am not using that as the standard.
    A properly administered equivalency system can be an 
important help for protection.
    Second, what about enforceable HACCP sanitation and 
pathogen standards?

                            CONTROL MEASURES

    Dr. Sharfstein. To your first question about control 
measures.
    Ms. DeLauro. What are the control measures; right.
    Dr. Sharfstein. The big picture is we really need a new 
food safety system that is premised on prevention, and in order 
to get that, and what we have heard very clearly from industry 
and consumer groups and you and others and all the experts we 
have consulted is we need clear regulations that establish the 
basic approach to prevention, that include things like 
performance standards where they are appropriate.
    That is something that we hope to get out of the 
legislation in the Commerce Committee. If we do not get that, 
we will see what we can do under the current law.
    That is what is needed. The entire system is probably not 
going to be put into place by the time we meet again next year, 
but we want to see a lot of progress towards that. We want to 
see many different things moving forward that are going to do 
that and over the next several years, we want to see that 
system put into place.
    On the question of equivalency, are you talking about third 
party certification equivalency or are you talking about 
international equivalency?
    Ms. DeLauro. I am talking international, government to 
government.
    Dr. Sharfstein. Government to government. I think something 
like that has got to be part of the import system. It is 
inconceivable that FDA could be inspecting 200,000 facilities. 
There has to be some other way to approach it.
    Equivalency is going to be something that we will have to 
look at, the strengths and weaknesses of the USDA system will 
be something we will have to take into account in doing that.

                              EQUIVALENCY

    I think we are open to the idea of equivalency overall, and 
then equivalency for particular products. If a particular 
country import a lot of a particular food or something, that 
particular food is done well and we know it is done well, and 
we have confidence that they can oversee it, and that is good 
enough.
    The key in my mind is that we have different tools to 
balance it. The more confidence we have in that system, the 
easier it is for the products to come in, the less confidence 
maybe the more assurance we need from that system, then our 
approach at the border can change.
    We are not saying that everything is exactly the same. We 
have the ability to kind of modulate what our response is at 
the border based on our level of confidence about what is going 
on overseas, and in the end, those two things have to add up to 
an acceptable level of confidence or else we cannot import it.

                                 HACCP

    That is what we need to get to.
    Ms. DeLauro. And HACCP?
    Dr. Sharfstein. We are in favor of HACCP. It has to be 
adapted to the products appropriately. One good thing about 
HACCP is it gives a lot of flexibility to the companies to 
innovate as long as they are hitting their safety targets.
    You do not want to lock people into an old way of doing 
business, but you want to hold them accountable. I think what 
you see in the wake of some of the food safety problems are 
businesses and industries really stepping forward and doing an 
awful lot.
    I think it is just critically important if you think about 
how much testing is going on in the private sector, we want 
that to be as high quality as possible. I really do believe 
that the companies, particularly the big companies, have such 
an incredible interest in the safe food supply that they really 
are allies in how we move forward.
    Ms. DeLauro. Mr. Kingston, would you mind if I ask one more 
question?
    Mr. Kingston. No, not at all.
    Ms. DeLauro. I will just ask this one and then turn to Mr. 
Kingston and then hopefully we can try to wrap up.

                           STATE INSPECTIONS

    This is about the review of state inspections of food 
facilities. Budget again will allow ``FDA to expand state 
capacity for risk based inspections by increasing the number of 
cooperative agreements and partnerships with states.''
    Peanut Corporation of America is the case in point here. 
Just having state inspections is not enough if FDA does not do 
anything to ensure that the state inspections are competent and 
thorough.
    We have a news story that ran on Monday that says ``The FDA 
told several minority members of the Energy and Commerce 
Committee that it did not even know if it had done any reviews 
at all in 11 states in 2007 and 2008, including Texas and 
Georgia, where salmonella was found in peanut plants this 
year.''
    The story said that an FDA official wrote to those members 
and said the recent salmonella outbreak, and I quote, ``Has 
highlighted limitations in our current approach and has 
prompted internal discussions on potential enhancements to the 
audit program.''
    I am a little tired of seeming to look at failures and 
think about improvements after people die. That is not a 
standard I think we ought to adhere to here.
    The stories have identified numerous holes in the state 
inspection system operated by FDA. What is particularly 
troublesome is that the gaps in the system were identified in 
2000 by the IG and little has been done to address them.
    What specifically is FDA doing now to improve the quality 
of state inspections? What are you going to do in 2010? What do 
you believe is the purpose of these contracts? How should FDA 
oversee the work of the states and are our states now required 
to report their findings to the FDA?
    Dr. Sharfstein. Let me take that on in a couple of ways and 
I might ask Mike Chappell from the Office of Regulatory Affairs 
to answer some of those, give his perspective.
    I think the approach--I think your point is very well taken 
that this is not about modest improvements in the system. This 
is about really changing the system.
    Ms. DeLauro. I would just say this, I believe we do not 
have all the resources to do what we need to do.
    Dr. Sharfstein. But even with that, I think the right 
question is not how we are going to audit a little bit better, 
that is not the right question. It is how are we going to 
really integrate the Federal, state and local food safety 
systems.
    There was a very good report that was done for the Robert 
Wood Johnson Foundation by Mike Taylor at G.W. that I would 
definitely commend to you. It is something that the FDA has 
been engaged in and FDA has been meeting with the states around 
food safety, David Acheson and Steve Sunlof are both here.
    The idea is not to think of the states as contractors any 
more. I think there is $15 million in this budget to start this 
transformation, but to really be a partner with the states.

                           STATE PARTNERSHIPS

    FDA really does not have the kind of training capacity that 
it needs, that we would be at a point that when the state goes 
out, we feel like it is FDA going out, and we have confidence 
in their inspections. We have confidence in their labs. That is 
the goal.
    I was just at a meeting where a business said I know we 
hear there are not enough inspections, but we could have a week 
where a Monday, it is the Federal inspector. On Tuesday, it is 
the state inspector. On Wednesday, it is the local inspector. 
Sometimes, they are all the same person. They just put on a 
different hat and they are filling out different forms. Does 
that make any sense at all. How can you say that makes sense.
    In order to jump to that system that is envisioned in the 
Robert Wood Johnson report, there is going to be an up front 
cost of developing the capacity to really retrain the states, 
invest in the states.
    I can tell you this for Maryland, this is not an area--the 
states are having economic problems. This is an area where a 
Federal partnership that comes with money, I think, would be 
very much appreciated because then it would give them a big 
incentive also to participate and develop the capacity we want 
to see in the states.

                                 AUDITS

    I think there is an issue with the audits under the current 
system, but I think the right question is not are we going to 
get 60/70/80 percent of the states audited, it is are we going 
to really change our relationship with the states, change the 
system, so we are able to genuinely feel like they are partners 
and not sort of hired hands to deal with inspections.
    Mr. Chappell. I think that is fair.
    Ms. DeLauro. You have to identify yourself.
    Mr. Chappell. I am Mike Chappell. I am the acting associate 
commissioner for Regulatory Affairs.
    I think as Dr. Sharfstein said, we are really going to 
approach it a little bit differently. Frankly, we really have 
not put the resources into what was our typical audit program. 
We are looking at it totally different, rather than trying to 
audit inspectors per se, look more at state programs 
holistically. Integrate training. Integrate audits, the whole 
process.
    I think we are moving forward in that direction, and 
certainly in the manufactured food standards, where we are 
trying to look at standards for programs rather than auditing 
individual investigators or states.
    Ms. DeLauro. Thank you. Mr. Kingston
    Mr. Kingston. I do not know if the FDA has this model, but 
with USDA, with many processing plants, you can be inspected by 
state inspectors or a USDA inspector, but you can actually 
choose which one you want. You do not choose the easier one 
necessarily. There is some reason that some prefer Fed and some 
prefer state.
    Have you looked at that kind of model to stop that Monday, 
Tuesday, Wednesday, which inspector is going to walk in the 
door and what hat is going to be on his head?
    Dr. Sharfstein. I think we should look at that model. I 
think we are in the process of setting up and moving forward, 
particularly in fiscal year 2010, a system like this, and I 
think that is very fair.
    Mr. Kingston. There is a reason that some prefer state and 
some prefer USDA, and it may be because of interstate commerce 
or something, one checks more boxes on the list.
    It would appear that you do not have to re-invent the wheel 
because there is something out there that could be helpful.
    Rosa, I am actually finished, unless you say something that 
peaks my interest.
    [Laughter.]
    Ms. DeLauro. Then just interrupt, Jack.
    We are going to have votes within the next 15 minutes. I 
would like to try to get in the last couple of questions and I 
know you have to go to the other side or maybe to the dark 
side. I am sorry. I had to say that.

                          OFF LABEL MARKETING

    Off label marketing. This is a guidance issue that at the 
end of the Bush Administration, one week before it ended, 
issued guidance to facilitate off label promotion of drugs, 
medical devices, by drug and medical device companies.
    It allowed the drug companies to distribute reprints of 
medical journal articles on off label use of products with only 
minimal guidance on the quality of the studies and the journals 
themselves.
    A news story reported that Bush/FDA issued new guidance 
over the objections of Bush's Department of Veterans' Affairs, 
which pays for drugs taken by its health system patients.
    ``We urge the FDA to withdraw the proposal. The VA wrote 
FDA last year. It will not improve drug safety. It could very 
well result in a decline in drug safety.''
    Among other things, the VA said ``Second rate studies 
published in journals with questionable peer review processes 
will be used to convince physicians to use drugs for an ever-
increasing number of unapproved uses.''
    What are your views on the policy and will you move to 
revise it?
    Dr. Sharfstein. Thank you for asking that question. Let me 
start by backing up a step. FDA does not regulate the practice 
of medicine and physicians are free to prescribe drugs for 
unapproved uses generally speaking.
    As a physician, I have prescribed drugs for unapproved uses 
and particularly as a pediatrician, because there are a lot of 
drugs that are not approved in kids, and it is really your only 
option.
    That problem is being addressed and thanks in large part to 
Congress, over time, that will be addressed. It is important to 
the practice of medicine that the physicians have that 
capacity.
    At the same time, when there is promotion of unapproved 
uses that is excessive, you have the potential problem that the 
particular uses may not be actually safe and effective because 
they have not been reviewed by FDA, and you also have the fact 
that companies may have less of an incentive to ever seek 
approval if they can go ahead and promote it without approval.
    As a result, I think you have to draw the difference 
between the use of medicines for unapproved uses on the one 
hand and the promotion of medicines for unapproved uses on the 
other.
    I am aware of the guidance that was issued. I think like 
many different things going on, it merits looking at. It is 
part of the bigger picture of how do you strike a balance with 
unapproved use that respects both the importance in many cases 
of unapproved use but at the same time, not wanting to permit 
promotion that could have adverse health problems.
    Ms. DeLauro. You are going to address that issue?
    Dr. Sharfstein. Yes, the issue of unapproved use is 
something that is very much on our minds.

                              FOOD SAFETY

    Ms. DeLauro. I will not go through all the commentary here. 
I think you have heard me say before there is no one official 
in FDA who is responsible for overseeing food safety, that the 
functions are spread out and scattered across it, OBM and ORA, 
toxicological research, et cetera.
    It has been suggested that the President could 
administratively create a new position of FDA deputy 
commissioner to the Secretary for Food Safety, directly 
accountable to the Secretary.
    This would create within the FDA a virtual food safety 
agency, if you will, and give the person authority over the 
food safety effort.
    I do not know what your thoughts are about that, which I 
would like to get. My question is would you move to support 
legislation that would get us moving toward consolidating food 
safety functions of FDA?
    I am going to pose my question this way because I think you 
probably know where I am going with this question.
    You may have to hedge your response because of the food 
working group and in any case, I do want your views on a single 
food agency, and is the Administration with regard to FDA 
opposed to a single food agency?
    Dr. Sharfstein. Sure. To the first part about a position 
within FDA, I would split your statement into two parts. One is 
does it make sense to have somebody in charge of all food 
activities at FDA, and I would say that is a suggestion we are 
taking very seriously at this point, and we will be happy to 
update the Subcommittee on where that goes. I definitely 
understand that perspective.
    Where that person reports is the other half, and you 
mentioned reporting to the Secretary. I will just tell you 
personally, that does not make sense to me. If it is within 
FDA, it should report to the FDA Commissioner, as to maintain a 
good management structure and not create a lot of confusion, 
people have to know who they are reporting to.
    I think both Dr. Hamburg and I are extremely committed to 
food safety. Both of us have experience as local health 
officers managing outbreaks. I think we are going to be very 
focused on it and I think we will be able, as you can tell from 
the level of interest in this discussion, this is a very high 
priority for us.

                           SINGLE FOOD AGENCY

    As far as the single food safety agency, the big picture is 
I am not aware the Obama Administration has a position on this 
at this point.
    My view is this is an opportunity for major progress on 
food safety in the United States as we switch to a prevention 
oriented system, and there is a lot of ground that we can gain 
very quickly if we are really focused on moving forward, and 
that is the right thing to be doing now.
    The longer term discussion on how best to organize things, 
I think that is something Dr. Hamburg and I are going to be 
willing to engage in, but without sort of a pre-conceived 
notion of what the right thing to do is.
    Right now, we think it is very important for FDA to get 
these resources and to get the authority and then to make a 
difference and create a better system.
    Ms. DeLauro. I appreciate that. I also would just comment, 
I still think that getting to where we need to go with regard 
to food safety means food safety out of FDA and the two 
agencies within HHS, as I have suggested and others, seems to 
be a good idea as well.

                      MEDICAL PRODUCT INSPECTIONS

    Quickly, it looks as if the $12.2 million for medical 
product inspections both domestic and foreign seems low. It 
seems to me to be very low in terms of your budget.
    I think it was Dr. Woodcock who testified last year at 
Energy and Commerce that it would cost an estimated $225 
million to inspect foreign drug plants as frequently as U.S. 
plants are inspected.
    This seems very, very similar to the past here. As you 
begin to take a look at the problems here, are you open to 
advising us on the redirection here?
    Am I wrong that in terms of this changing what we deal with 
in terms of inspection of drugs, both domestically, and medical 
products, both domestically and foreign, does that seem low to 
you, $12.2 million?
    Dr. Sharfstein. It is hard for me to answer that question 
in terms of whether it seems low or not. I think there is a lot 
of work that has to be done internationally, and that work may 
require more resources for FDA than is in this budget over 
time.
    I totally accept that premise. I think it cannot be a model 
that every country sends inspectors to everyone else's plants. 
There has to be a better system of oversight where we have 
confidence in plants that maybe we ourselves have not 
inspected.
    I think that is why FDA has started some cooperation with 
Europe and Australia to kind of split up the inspections. There 
are a whole bunch of things that I think Dr. Hamburg is going 
to be very interested in looking into in this regard.
    As we dig into it and we figure out--I will tell you one of 
the things from my perspective in the budget is that things are 
measured by what the increase is as opposed to where are we 
compared to the goal.
    I think that ultimately, we want to understand for imports 
what is the goal system we are getting to, what does it take to 
get there, both in terms of policy and resources. That, I 
think, is eventually how we will want to present the budget as 
well.

                          DIETARY SUPPLEMENTS

    Ms. DeLauro. The last two questions, this has to do with 
dietary supplements as it deals with health risks of 
conventional hormone therapy, and when there were risks 
associated with the therapy, people started to look at natural 
alternatives, such as the dietary supplements.
    The products are heavily marketed to women at or around the 
age of menopause. The Dietary Supplement Act limits FDA's 
authority over the supplements. You are responsible for the 
safety aspects of the products and what is the adequate 
oversight of these efforts.
    How are you going to move the agency to develop a very 
robust safety program for dietary supplements within the 
current structure?
    Dr. Sharfstein. Excellent question. You may be aware that 
FDA recently was involved in a voluntary recall of the largest 
dietary supplement used for weight loss in the United States.
    That was the result of work within the agency and a lot of 
work from external doctors who were publishing papers and being 
concerned about what was happening to their patients. That 
product was able to be removed. It was a relatively rare side 
effect that was identified, but a very serious one, and one 
that had the product come off the market.
    The challenges to FDA include the fact that we are not told 
what is being sold, let alone reviewing for safety prior to 
marketing.
    Within the context of FDA's role, I think we have the 
manufacturing standards that are being put into place and we 
have the required adverse event report, reporting for serious 
adverse events that is being put into place, and we have to 
make as best use of those as possible.
    I think we have to be prepared if we are identifying risks, 
that are really putting people at risk, to not be shy about 
talking about them. I think that is in the best interest of 
public health but it is also in the best interest of the 
industry, which I do not think wants to put its customers at 
risk.
    I think using the data that we get, hearing from doctors 
who are concerned, hearing from patients who have had problems.
    The other thing that I think is important that we can look 
at is when companies are making claims that are inappropriate, 
we can crack down on that right away. Even if we do not have 
good data on safety, if people are making claims and are 
leading people to believe they can get something treated 
without appropriate evidence, we can stop them from making 
those claims and that could be helpful on safety, even without 
doing a full safety review.
    Ms. DeLauro. That means there is going to have to be 
funding attached to that, and adequate funding.
    Dr. Sharfstein. I think that is true and there is a good 
group within FDA and I think one of the things we will want to 
do is assess how that is compared to the need. I think this 
recent withdrawal demonstrates that FDA can do things.
    I would commend the health hazard evaluation on this 
particular product. It very clearly walked through the evidence 
and when you see that kind of evidence, you can understand why 
the company looked at that and did the right thing.

                            MEDICAL DEVICES

    Ms. DeLauro. My last question, and we will submit questions 
for the record, this has to do with medical devices, and you 
review medical devices, thousands of them every year.
    Ninety-eight percent are cleared through the 510K process, 
a less vigorous process than prescription drugs go through. 
Again, as is my understanding, FDA does not require clinical 
trials for 90 percent of medical devices that are sold in this 
country.
    Again, my understanding is this was a process that was 
supposed to be for minor changes in simple devices. GAO 
recently reported that it is inappropriately being used for 
implanted medical devices and life saving medical devices.
    The New York Times report has been used for diagnostic 
tools used to diagnose cancer. If the devices are not safe or 
accurate, people die.
    My question is should not the FDA always require clinical 
trials to prove that implanted medical devices are safe and 
effective and should not clinical trials be required to prove 
diagnostic accuracy of devices used to detect cancer and other 
life threatening diseases?

                              510K PROCESS

    Dr. Sharfstein. Those are two excellent questions and I 
think the 510K process has obviously been subject to a lot of 
different reviews and questions. I think it is something that 
both Dr. Hamburg and I are going to want to understand pretty 
well.
    I know FDA has started the process of making sure the 
products that should go through the pre-market approval process 
are going through it and a whole bunch of products that had 
been put in the 510K pile or I should say were sort of 
grandfathered out are now getting pulled back in.
    In terms of what actually should require clinical trials, I 
think that has to be a judgment call based on the particular 
product. I will give you an example.
    If there is a product, even if it is implantable, say there 
is a very clear improvement that you could prove in the lab, in 
other words, internal to the device, that made the device more 
stable say, and you could prove that in a million different 
ways in the lab, that it is clearly more stable and it is all 
internal to the device, it may be a scientific judgment that 
you do not have to randomize people to the old version, which 
we think is less stable, if you have a ton of evidence, and it 
is evidence. It is just not in people, that it is going to be 
better.
    You would not necessarily need a clinical trial for that. 
For a cancer diagnostic, I think it also might depend. If you 
have confidence in the approach based on a whole bunch of other 
science that this worked for these other four tumors and you 
know this is the same basic concept, you might want some 
clinical data but whether you would want a clinical trial, I am 
not sure.
    I think it is not so much the--the law gives FDA 
considerable flexibility. The key is for FDA to be making good 
scientific decisions. I think one conclusion that I have kind 
of drawn in my limited time at the agency is that a lot of--it 
is very important for FDA to explain its decisions.
    If FDA is going to put a device in the 510K pile because 
they think it is equivalent to a previous device, why, what is 
the basis for that decision. What can FDA do to explain that 
and then people can agree or disagree.
    Ms. DeLauro. Make a judgment.
    Dr. Sharfstein. It is right out there. I think some of the 
reason for the concern over the 510K process may be that FDA is 
doing it wrong or it may be that people do not really 
understand what FDA is doing.
    I think that is an important more general issue for us to 
tackle. This is an area that people feel like to a certain 
extent is behind the curtain, and when making decisions on 
things like this, FDA should be explaining itself.
    Ms. DeLauro. Thank you. That is my last question. We will 
submit some for the record. I thank you for your time, your 
patience, for your commitment to this effort.
    I will end with where I started. I am very, very much 
looking forward to working with you and collaborating on an 
area and an agency that I have the utmost regard for and 
respect, and it has a function in our society which I believe 
is very, very critical to the health and safety of the people 
of this country.
    I want to also say you have a number of your folks with you 
today and I will continue to say to them, many of them have 
been here in the past and have spoken up, but I will ask the 
same questions of the people who are currently in charge as I 
asked of the people who were previously in charge.
    I am excited, quite frankly, I would be less than honest if 
I did not say, of a new environment, an environment which I 
think can help us to go back to the mission of the agency, 
which is regulation but founded on sound science.
    I look forward to that and am encouraged by our 
conversation. Thanks very, very much.
    Dr. Sharfstein. Thank you.
    Ms. DeLauro. The hearing is adjourned.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                                            Tuesday, July 28, 2009.

 PROTECTING THE PUBLIC HEALTH IN A GLOBAL ECONOMY: ENSURING THAT MEAT 
                AND POULTRY IMPORTS MEET U.S. STANDARDS

                               WITNESSES

WENONAH HAUTER, FOOD AND WATER WATCH
LORI WALLACH, PUBLIC CITIZEN
KEVIN BROSCH, DTB ASSOCIATES, ON BEHALF OF AD HOC COALITION FOR SOUND 
    SCIENCE AND TRADE
    Ms. DeLauro. The hearing will come to order. Good morning. 
Thank you all for attending today. The subject of today's 
hearing is Protecting the Public Health in a Global Economy: 
Ensuring That Meat and Poultry Meet U.S. Standards.
    I particularly want to say a thank you to Kevin Brosch, 
Lori Wallach, and Wenonah Hauter for coming to speak with us 
today.
    One of our core responsibilities on this committee is to 
ensure that the agencies under our purview safeguard America's 
food supply. Not all the dangers that threaten the health and 
safety of American families can be found in airport, border 
checkpoints, or harbor containers. Sometimes they lurk in our 
fridges and on our kitchen tables. And protecting our food 
supply is not just a crucial matter of public health, it is 
vital to the success of our farmers and our ranchers.
    With that in mind, today we will review the process used by 
the USDA, the United States Department of Agriculture, to 
determine equivalency between the food safety systems of 
different countries.
    Specifically, I have concerns about the granting of 
equivalency for processed poultry from China, processed poultry 
being the chicken that ends up in chicken soup, canned chicken, 
breaded chicken tenders, and a host of other products on the 
American market.
    To use the exact USDA language, processed foods, which I 
believe is important to note, are exempt from country of origin 
labeling, our retail items derived from a commodity that has 
undergone specific processing, such as cooking, curing, 
smoking, or restructuring, or that have been combined with 
another food component.
    It is my belief and my concern that this granting of 
equivalency to China was extremely flawed and based on trade 
promotion rather than public health concerns.
    Decisions about the importation of food products from China 
or anywhere else are a public health issue that cannot and must 
not be entangled in and subordinated to trade discussions.
    In its 2005 audit report on its inspections of several 
plants in China, USDA found disturbing, unsanitary conditions, 
such as grease, blood, fat and foreign particles being observed 
on product contact areas of conveyer belts. Yet despite these 
findings, USDA found that the food safety system in China was 
equivalent to ours in the United States. And once this 
equivalency was granted, we ceded much of our ability to ensure 
the safety of these poultry products to the country in 
question, in this case China.
    This experience with Chinese processed poultry raises 
troubling questions about the equivalency process, which I hope 
this hearing explores today. As I see it, there are four main 
questions which this hearing should attempt to address, and 
which we should take as a guideline for equivalency reform in 
the future.
    First, can we come to a conclusion on whether the 
declaration of Chinese equivalency by the USDA was valid and 
well-founded according to the standards of equivalency already 
outlined by the agency?
    Second, if not, why not? Is there a way or process we can 
establish equivalency, using the standards that are currently 
in place?
    Third, do we know how to correct the problems that arose 
with China's equivalency based on how we currently determine 
equivalency with other countries such as Chile, Canada, 
Australia, to name a few?
    And finally, what do we need to change about the 
equivalency process more broadly, independent of the example of 
Chinese processed poultry here?
    We intend in this hearing to undertake a thorough review of 
the USDA equivalency process. Quite frankly, that may 
necessitate further hearings, until it can be established that 
the process used for determining equivalency is focused 
primarily on protecting the public health rather than 
facilitating global trade, and that it is based on sound, 
scientific assessments, rather than business-minded, wishful 
thinking, or political considerations. We need to tread 
carefully.
    Particularly given the contaminated food outbreaks we have 
experienced in our own country of late, the continuing concerns 
about the safety of other products coming out of China, such as 
toys, and the relative lack of transparency in the Chinese 
safety system, we need to make absolutely sure that we do not 
open the door to potentially unsafe processed meat and poultry 
imports from China or anywhere else around the world.
    We all believe in the value of trade. However, we also 
believe that the health and safety of American families are 
nonnegotiable. It is our charge and that of the USDA to ensure 
that consumers do not have to worry about the safety of 
processed poultry products on the market. And we are here today 
to ensure that the USDA is living up to its most important 
responsibility and is always putting the public health first, 
above considerations of global trade.
    To discuss the question today we have three panelists with 
us. We have Kevin Brosch. Kevin Brosch is a cofounder of DTB 
Associates, LLP, an international policy and agricultural 
policy consulting firm. Between 1989 and 1999, he served as 
Deputy Assistant General Counsel for International Trade in 
USDA's Office of the General Counsel. Mr. Brosch also served as 
legal adviser to the USDA team negotiating the agriculture and 
sanitary and phytosanitary agreements in the WTO Uruguay Round, 
and he supervised and participated in the negotiation of the 
agricultural portion of the Northern American Free Trade 
Agreement.
    I should also mention that my staff asked a coalition of 
industry groups to send a representative to today's hearing to 
discuss their views on this matter, and they said that Mr. 
Brosch's testimony would speak for them.
    Lori Wallach is Director of Public Citizen's Global Trade 
Watch Division, a Harvard trained lawyer. Wallach has testified 
before more than 20 U.S. Congressional committees on trade and 
globalization matters. She has served as a trade commentator on 
numerous domestic and foreign news outlets. Her most recent 
book is Whose Trade Organization: A Comprehensive Guide to the 
WTO. She has also contributed to numerous anthologies, 
including the International Forum on Globalization's 
Alternative to Economic Globalization: A Better World is 
Possible.
    Wenonah Hauter is the Executive Director of Food and Water 
Watch, a nonprofit consumer organization founded in 2005. She 
has worked extensively on energy, food, water, and 
environmental issues at the national, State and local level. 
From 1997 to 2005, she served as Director of Public Citizen's 
Energy and Environment Program, which focused on water, food, 
and energy policy. From 1996 to 1997, she was Environmental 
Policy Director for Citizen Action, where she worked with the 
organization's 30 State-based groups.
    I want to say thank you all for attending. We look forward 
to your testimony. Before you start your testimony, and I will 
ask you now and also again before you begin, your entire 
testimony will be in the record and we will ask you to 
summarize and speak between 5 and 7 minutes. I know the staff 
will kill me, but it is 5 and 7 minutes to get out what it is 
that you want to get out.
    With that, let me yield to my colleague, the ranking member 
of the committee, Mr. Kingston from Georgia.
    Mr. Kingston. I thank the chairwoman for yielding, and I 
thank you for holding this hearing today.
    We have a great number of very good, very fruitful hearings 
in this committee and we have a great atmosphere of agreeing to 
disagree. I would really thank the Chair for having this 
hearing today, because so many in Congress will make a stand 
but then they won't defend the stand. The Chair has taken a 
position and, by proof of this hearing, is letting it be 
challenged, and rather than hiding in the shelter of the 
majority, which unfortunately both sides are guilty of in the 
past, I think it is very good to have this hearing today.
    I also agree with the Chair that food safety is paramount 
to trade, and I can say that as somebody who voted against 
GATT, somebody who voted against NAFTA, and somebody who voted 
against most favored nation status for China. I think that we 
have to be very careful when we are dealing with trade partners 
and some multi-trade agreements, if not all of them. We have to 
be very cautious. I think safety does have to take precedent 
over trade.
    Now, I do think there are three points we want to make as 
we start this hearing that are very important. Number one, 
while we do have the industry groups represented, we do not 
have USDA or FSIS here, and I feel that we maybe should 
consider having further hearings in which we get to cross-
examine them on equivalency, because certainly they would have 
the opportunity as people who are on the ground to let us find 
out did you rush this through under political pressure or do 
you really feel that the Chinese-reimported poultry is safe?
    So I do think it is a missed opportunity not having FSIS 
here, but perhaps in a second hearing we can do that.
    The second point I want to make is there is sometimes in 
Congress, in political bodies, an assumption that if we don't 
prevent something happening then other groups are going to let 
it happen. And in this case, there is almost a subtle message 
that we may inadvertently be sending that American industry is 
more concerned about the profit than food safety. And I don't 
think that is the signal we want to send. I believe that 
American corporate citizens are good citizens and don't want 
to, in fact, poison their own people.
    I will point out, as I have many other times, the U.S. food 
safety success rate. According to the CDC, 76 million food-
borne illnesses are reported a year. That is a big number: 76 
million. 300,000 hospitalizations, 5,000 deaths.
    Now, we who study this know that there are preexisting 
illnesses and immunity problems in terms of some of these 
deaths. But putting that aside, 5,000 is a very serious number 
of deaths. 300,000 hospitalizations. We all take these numbers 
to heart.
    Taking a step back, though, if you have 300 million 
Americans, which we have more, and we have visitors all the 
time, and they eat three meals a day, which they eat more than 
that, and they have snacks. Multiplying that times 365 days a 
year, you are looking at 900 million meals, without snacks, 
eaten by 300 million people. That comes out to 328 billion 
meals a year.
    Doing the math by that, 76,000 divided by 328 billion, you 
get a food illness rate of .0002 percent, or a success rate of 
99.98 percent.
    Now one of the things that our witnesses and I share in 
common is that the FDA doesn't do a good job, and the USDA 
doesn't always do a good job. But if the food safety record is 
this, according to the CDC, then who would we attribute that 
to? We would attribute it to the private sector and American 
industry. Then obviously if you are a food processor, you don't 
want to put poisoned food out on the marketplace, even if you 
don't care about people, because you don't want them to get 
poisoned. You want them to come back next week and buy more of 
your stuff so you can make more money.
    But these are important statistics to keep in mind if we 
feel that the FDA and the USDA do not do a good job on food 
safety because you have to come to the conclusion that there is 
another factor out there worrying about food safety, and I 
would say that it is the private sector.
    The third point I want to make in terms of our trade with 
China is we are picking winners and losers. Case in point, 
these are some goods that we are importing right now from 
China.
    Seafood medley, and it says, ``For fast, easy, fun seafood 
dishes.'' Thank you, Mr. Latham.
    Grilled wheat cakes with real octopus. No meal would be 
complete without this. Imported from China.
    Organic--some kind of beans.
    Mrs. Emerson. Edamame.
    Mr. Kingston. Edamame. Is that Chinese or is that a 
Missouri word?
    Ms. DeLauro. Soybeans.
    Mr. Kingston. Maybe I am more careful here. But organic. 
Now the question would be, we go over what is the definition of 
organic? I am wondering how they earned that organic label? Is 
there an organic equivalency? I would say there is not.
    Okay, Ms. Emerson, kamame? Noodles.
    Mrs. Emerson. Those are just noodles.
    Ms. DeLauro. Who does the grocery shopping in your house, 
Jack?
    Mr. Kingston. I do it, but I go straight to the poultry.
    Raw and unsalted sunflower seeds. I always think of that as 
being Kansas.
    Shelled edamame. Here it is again. It is very popular 
somewhere.
    No Thanksgiving dinner would be complete without dried 
seaweed.
    I am not sure how to pronounce this particular word, but 
again imported from China.
    Now Mrs. Emerson is going to talk about that product.
    Mandarin oranges from China.
    Mrs. Emerson. They are scary.
    Mr. Kingston. This is floating in some sort of syrup, I am 
not sure what. In light syrup.
    Smoked oysters in sunflower oil, salt added.
    Straw mushrooms, whole peeled.
    Bumblebee smoked oysters.
    Stir fry sauce, simply Asian.
    Water chestnuts. And this was just one quick shopping trip. 
This wasn't let's go out on a Chinese survey and try to find 
things. These are products right now that we can import from 
China.
    So my question is: Should we not also be having a ban on 
these things, or are we sure that the FDA does it a little bit 
differently than the USDA, that we do not trust the USDA but we 
do trust the FDA? And I think that if we were going to be maybe 
philosophically honest here that we should either ban them all 
or review them all or treat them the way that we are treating 
poultry. I ask that question because I think sometimes 
government can pick winners and losers and inadvertently you 
can do a disservice to our consumers out there, the public that 
we want to serve.
    I will close with this. We are very interested in this 
hearing today. Again, I thank the Chair for having it. I want 
to know all about it, but keep in mind that my position and 
others on the committee is not saying let's import Chinese 
chicken as much as it is let the process work. Apparently the 
process works for this through the FDA. We should let the 
process work through the USDA.
    Thank you.
    Ms. DeLauro. I thank the gentleman. Let me actually make 
three points.
    One, I would have loved to have had the new Undersecretary 
from the USDA be here today. But in fact there isn't an 
Undersecretary yet for the FSIS, Food Safety Inspection 
Services. So it may be we do, as I said at the outset, 
Congressman Kingston, that we may want to do further hearings.
    I would also like to introduce Dr. Richard Raymond, who is 
here and who is a former FSIS Director, and welcome. I am not 
sure where you enjoy being seated more, where you are now or 
here, but you have always been very up front and candid, and I 
enjoyed working with you, Dr. Raymond. Thank you very much.
    Before we begin testimony, I would like to say what an 
array of products, Jack. But you should know in February of 
2009, FDA's import actions with regard to these Chinese 
products stopped: Frozen pollack, filthy; breaded shrimp, 
unsafe animal drug; rice stick, filthy; dried mandarin peel, 
maybe from those mandarin oranges, filthy; frozen squid tube 
and tentacles, filthy; breaded shrimp, unsafe animal drug, 
nitrofuron; soy protein powder; poisonous frozen tilapia, 
unsafe animal drug; frozen frog legs, salmonella. Oyster flavor 
sauce. Anyway, the list goes on and on and on. And that is 
February of 2009.
    With that, I am going to ask Mr. Brosch if you will begin 
the testimony for us today.
    Mr. Brosch. Thank you, Madam Chairman. I have my full 
testimony here for the record.
    Ms. DeLauro. Yes.
    Mr. Brosch. Thank you, and I ask that it be accepted.
    Good morning, Madam Chairwoman and members of the 
committee. My name is Kevin Brosch. I appear today on behalf of 
the Ad Hoc Coalition for Sound Science and Trade. With me is 
Mr. Bill Roenigk, the Vice President of the National Chicken 
Council. The Coalition appreciates your invitation to present 
its views.
    The Coalition consists of 39 trade associations and 
companies engaged in domestic production and international 
trade related to meat and poultry products, including trade 
with China. Its members are listed in the attachment at the end 
of my testimony.
    The Coalition urges Congress to reconsider section 723 of 
H.R. 2997, the House version of the 2010 agricultural 
appropriations bill. Section 723 would continue to prohibit 
USDA's Food Safety and Inspection Service from implementing or 
advancing any regulation regarding potential imports of Chinese 
poultry products. The Coalition has two simple points.
    First, public health and safety are paramount 
considerations in the production, processing, and distribution 
of the food supply, and we need effective FSIS regulation of 
meat and poultry products to ensure public safety and public 
confidence.
    For companies in the food business, food safety is an 
everyday preoccupation. They have a legal and moral 
responsibility to place a safe, wholesome, properly labeled 
product on the market. And they also live with this simple 
marketplace imperative: If the public even perceives that a 
product is unsafe, the public will stop buying it.
    It is not enough that your product is safe, your 
competitor's product must be safe, too. USDA has a long 
successful history of ensuring the safety of imported meat and 
poultry through a stringent, comprehensive process of 
determining regulatory equivalency and approving individual 
plants. U.S. standards are very high and very tough to meet. 
Many countries have applied to ship poultry to the United 
States over the years, but only five are approved and ship here 
now. Accordingly, all meat and poultry products, domestic or 
imported, must meet our national standards.
    Second, the United States should apply its food safety 
requirements to imports in a manner consistent with 
international trade rules, and in particular with our 
obligations under the WTO agreement on sanitary and 
phytosanitary measures. The United States insists that other 
countries abide by SPS rules, and we must treat our trading 
partners, including China, as we want them to treat us.
    Any WTO member country that applies to ship meat or poultry 
products to the United States can have the safety of those 
products determined on the basis of science and risk 
assessment. Only China has been singled out for different and 
less favorable treatment.
    China has invoked its right to WTO dispute settlement. It 
asserts that current U.S. law contravenes WTO obligations to 
afford China Most Favored Nation treatment, and that that law 
is inconsistent with SPS articles 2 and 5, which require that 
SPS measures be based on sufficient scientific evidence and 
appropriate risk assessment.
    The Coalition is very concerned by these developments, and 
apparently we are not alone. Recently, the Obama administration 
in its comments on H.R. 2997 also noted its concerns regarding 
the consistency of section 723 with U.S. International 
obligations.
    Section 723 sends the message, perhaps unintended, but 
nonetheless grave, that U.S. food safety regulators cannot be 
trusted to do their job. The confidence of the U.S. consumers 
and the safety of meat and poultry is based, to a significant 
degree, on their trust that FSIS is an effective regulator. 
Also, most other countries accept our exports based on FSIS 
certification. What does section 723 say to our consumers and 
our trading partners about our food safety system?
    Second, the United States regularly invokes SPS rules to 
nontariff barriers and to maintain market access for U.S. 
products. U.S. Trade Representative Ron Kirk recently announced 
the Obama administration trade policy emphasizing enforcement, 
particularly in the SPS and TBT areas. This administration's 
policy to enforce U.S. trade rights will be severely undermined 
if the United States itself is held to maintain WTO 
inconsistent policies.
    Third, section 723 is eroding our trade relations with 
China. Importers applying for permits to enter U.S. poultry 
products are being told that the permit office is closed for 
the holiday, even when there is no holiday. China can use these 
or other tactics to shut U.S. poultry products out of its 
market when it considers that it has been unfairly treated.
    China is a $700 million market that the U.S. poultry 
industry has worked long to develop. It is now at risk.
    I would say in conclusion that this Coalition does not 
advocate any specific result. It advocates for a process that 
is consistent with our WTO obligations. It does not prejudge 
the outcome of any risk assessment that FSIS may conduct with 
respect to Chinese poultry. FSIS may determine that Chinese 
product meets U.S. standards and may be safely imported. Or, 
FSIS may conclude that that product does not meet our standards 
and therefore cannot enter the market. The Coalition simply 
asserts that the process of science-based risk assessment, 
inherent in both our national legislation and in international 
trade law, must be respected and that our interests in a safe 
and reliable food supply, and fair and predictable trade rules 
and in sound U.S. trade policy are best served by allowing FSIS 
to proceed in the case of the Chinese application, as it does 
in all other cases.
    Thank you, Madam Chair.
    [The statement of Mr. Brosch follows:]

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    Ms. DeLauro. Thank you very much, Mr. Brosch.
    Ms. Wallach.
    Ms. Wallach. On behalf of Public Citizen's 100,000 members, 
I want to thank the chairwoman and the committee for the 
opportunity to discuss this problem of ensuring that consumer 
safety is protected in the context of America's increasingly 
globalized food supply.
    Since NAFTA and the WTO, there has been a rapid growth of 
imported food coming into the U.S. Our current trade pact rules 
prioritize the expansion of food trade and literally limit 
countries' domestic food safety policy space, which gets to the 
question about whether we need to change some of the WTO rules 
as compared to focus on whether or not our current practices, 
which promote safety, comply with the existing rules.
    Finally, the way that some U.S. agencies have applied the 
trade rules; for instance, with USDA and meat and poultry 
equivalence, have resulted in U.S. consumers increasingly being 
forced to rely on foreign governments to regulate the safety of 
the foods purchased and consumed here.
    Unfortunately, our recent experience, the headlines we all 
see in the news have shown that quite frequently other 
governments are not up to the task. We still have improvements 
in this country after all the infrastructure, experience, and 
years of fighting for food safety. Relying on foreign 
governments and their food safety systems to protect Americans' 
health is a recipe for disaster, and it must be changed. There 
is a way to get the benefits of trade and still ensure food 
safety for U.S. consumers. However, under our current trade 
rules, this is difficult.
    I am going to summarize the six points that are in my 
testimony for the record. The first point is the fact of the 
increasing share of Americans' food coming from or being 
processed or grown in other countries. In the 15 years since 
the implementation of NAFTA and WTO, what was a trickle of 
imports became a flood. So now, $80 billion in food are 
imported into the U.S. Annually. That is over double the level 
when NAFTA and WTO went into effect.
    Number two, this shift has occurred following U.S. entry 
into particular trade agreements that contain trade, 
investment, and deregulatory rules and standardization 
requirements explicitly designed to increase the volume of food 
trade.
    So NAFTA in 1993, WTO in 1994, these agreements enforced 
systems of rules. WTO has 17 different agreements. These 
agreements prioritize expanding volume of ag trade over food 
safety. I am not saying that is a theory, it is explicit in the 
rules. Number one, the WTO tariff rules require that you set 
your tariffs low enough that every country is importing at 
least 5 percent in each tariff line. Even if you are exporting, 
that is about increasing the volume, that is not even about 
rational efficiency.
    Number two, the agreements contain new foreign investor 
rules that safeguard and in fact incentivize relocating 
production and processing offshore.
    Number three, the rules in these agreements facilitate 
trade expansion by limiting the kind of import safety terms and 
inspection rates that can be applied on the return. The 
specific rule is all countries shall ensure the conformity of 
all laws and regulations and administrative procedures, which 
is to say we are supposed to change our domestic laws to meet 
the trade rules.
    Finally, the trade pacts provide a mechanism for exporting 
countries to challenge domestic food safety laws in other 
countries and seek their elimination.
    One of the 17 WTO agreements is the agreement on sanitary 
and phytosanitary measures, the so-called SPS agreement, and in 
the name of facilitating trade, that agreement, in sum, does 
the following 4 things: Number one, it sets a ceiling on food 
safety standards.
    Countries are to use, number two, international standards 
whenever possible, and any standard providing a higher level of 
protection is subject to challenge. There is no floor, it is 
only a ceiling.
    Number three, it requires that domestic food safety 
measures be constructed in the least trade-restrictive manner, 
which is to say trade comes first, and then you figure out what 
also works for safety.
    Number four is a requirement that other countries accept 
imports that meet other country safety standards but not the 
importing country's safety standards. Taken in combination, the 
agreements effectively are deregulatory superstructure, which 
undermines our strong domestic policies to protect the food 
safety.
    Now I found the Obama administration comments on the 
chicken measure extremely worrisome because the issue here, as 
President Obama said as a candidate, is how to make sure our 
trade agreements, as he noted, which might need renegotiating, 
make sure we have product safety, and that as a priority, as 
compared to criticizing whether a product safety measure meets 
a trade agreement, should be our focus.
    We have to ask how we got these rules. My testimony goes 
into more detail on this, but when NAFTA and WTO were 
negotiated, there were 500 corporate representatives on the 
official U.S. Trade Advisory Committee System. There was not a 
single consumer, public health, or safety organization. So 
under the theory of he who writes the rules rules, we got rules 
that satisfied the advisers. And, in fact, agribusiness firms 
have been openly interested in trade rules that would 
facilitate the ability to have a global single marketplace with 
production overseas.
    A recent APHIS report talks about companies such as Perdue, 
Tysons, Smithfield, ConAgra all relocating plants abroad, many 
in order to send products back under U.S. equivalency 
standards.
    Now these equivalency standards, the basic question that 
neither USDA or any government agency engaged in trade related 
equivalency has answered, is the fundamental paradox, which is 
how can something that is different be the same? Which is to 
say we expect U.S. consumers expect that the food that comes to 
their plates, regardless of where it is grown, processed, or 
comes from is going to meet U.S. standards. And if the basic 
rule of equivalence is that you must accept things that do not 
meet your standards, it begs the question of how we can satisfy 
U.S. consumers because the basic rule for trade equivalence is 
that it is a process where the exporting country gets to show 
you that their system, which may be substantially different, is 
good enough, meets your goals, even though it may be very 
different, and then you are required to take the food under 
their system and treat it as if it was under your system.
    Now, different WTO signatory countries have implemented 
this in different ways, some of them with more focus on safety 
than the way USDA has done it in the U.S., and in fact FSIS 
brags it has gone the furthest in trade facilitation 
equivalence in its own materials. The trade agreements don't 
define what equivalence means, and therein lies the space for 
USDA to create a new equivalence policy that can increase the 
public health focus. There is more room to put focus on public 
health. But regardless of what it could mean in the U.S., 
during the Uruguay Round Act implementation the U.S. previous 
standard which required sale of meat in the U.S. from foreign 
countries to be ``equal to'' all U.S. safety standards was 
switched to ``equivalent to.'' This change in language from 
``equal to'' down to ``equivalent to'' was done in the Meat Act 
and in the Poultry Act.
    As a lawyer I would say it was actually not necessary to 
make that weakening. There was nothing in the WTO agreement 
that would define it downward. However, whether or not it was 
necessary, that is what was done.
    USDA at different times has stated that they will only 
accept food under the system that meets U.S. standards, and 
alternatively, in issuing the regulations, have said they can 
no longer require that food meets U.S. Standards. This is 
something that needs to be clarified. All food sold here must 
meet U.S. standards. But instead of FSIS staff going to other 
countries and explaining how to meet U.S. standards so that we 
can have the benefits of trade and food safety, now FSIS staff 
spend a lot of time discussing amongst themselves whether 
varying technical standards and different foreign regulations 
are close enough to be able to rely on them for U.S. consumers.
    Bottom line is that now the meat industry in foreign 
nations who have different standards certify their own plants 
where the USDA used to certify plants under their own systems, 
and it comes in. This gets to Congressman Kingston's point 
about the market incentives, which has repeated violations by 
foreign plants of U.S. law, do not, as it would in the U.S., 
result in them being shut down so that they need to actually 
follow the rules.
    Instead, it is a two-tier system where the U.S. plants have 
to meet the U.S. law, the foreign plants can meet their own 
law, and they are supposed to compete in the same market. And 
as consumers, we are supposed to rely on them. That in a way 
gets to the chairwoman's number three question, which is it is 
not just the practice, it is the policy. The actual USDA 
equivalence policy needs to be reissued.
    Perhaps the bottom line evidence of that is the fact that 
under that policy it would be even vaguely possible to 
determine equivalence for the Chinese chicken system. Now I am 
talking about an analysis based on science and an inspection of 
the actual circumstances. So you would hope that there would be 
rules such that, given what we know of the record in China, not 
just in the chicken plants, but systematically of the 
government covering up safety problems, of people not only 
being fired but being jailed for actually reporting safety 
problems, of absolutely no culture of accountability in that 
government for prioritizing safety of their own citizens, much 
less for the export market citizens, the notion that that 
system, given under the current equivalence formula--USDA is in 
the business of approving countries, not plants, not safe meat. 
So the notion that that culture of non-regulation could 
possibly fit under the current policy is evidence that the 
policy itself needs to be changed. That is an equivalence that 
never should have been found.
    And I want to conclude by saying that it is not just China, 
because we found equivalence with Canada, despite the fact that 
the E. coli standards are fundamentally different, and for 15 
years we have been fighting about whether they are safe, and it 
stayed in place.
    Public Citizen did a 2002 report listing all of the 
equivalency problems with Chile and other countries that list 
systematic, clear violations, and equivalence has been left in 
place.
    So we have three key fixes that we recommend. The details 
are in my written testimony. Number one is for USDA to do a new 
rulemaking to create a new equivalence policy and one that 
prioritizes public health. And we recommend that in doing so, 
USDA consider how NHTSA at the Department of Transportation did 
their rules, as it is a very much public safety-oriented 
priority standard.
    Number two, that the operation of equivalence be tightened 
up to those regulations as specific recommendations. For 
instance, what happens with audits, how often, what happens 
when there is a failure that should be shut down and 
equivalence determinations should end at a certain point, have 
to be redone to keep the countries on their toes to stay with 
the standard.
    Finally, we need to fix the trade agreement rules that in 
their first instance would even call for the prioritization of 
trade expansion, volume expansion, over standards. There is a 
way to have both, and I would recommend a review of the Trade 
Act, H.R. 3012, as a system for how to review and renegotiate 
some of the food safety provisions. Those provisions were 
negotiated amongst farm and consumer groups.
    Thank you very much.
    [The statement of Ms. Wallach follows:]

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    Ms. DeLauro. Thank you, Ms. Wallach.
    Ms. Hauter.
    Ms. Hauter. Chairwoman DeLauro, Ranking Member Kingston, 
and members of the subcommittee, thank you for the opportunity 
to testify today. I think most Americans would be shocked to 
know that every year since 2006 during the annual 
appropriations process, that Congress debates whether to 
continue to forbid funds from being used to implement the rule 
allowing China to import poultry products into the U.S. Most 
people would use their common sense and determine that it 
doesn't make sense to import a risky food like poultry from a 
country with a food safety record like China, from a country 
that is almost 7,000 miles on the other side of the world.
    I will note that we agree with Congressman Kingston that we 
should also look at the FDA process and that the same thing is 
true for FDA and all of these other products. We just happen to 
be talking about poultry today.
    It was politics that determined China was eligible to 
import poultry into the U.S. There was no honest process based 
on the evaluation of risk. The inadequate process ignored major 
problems, and approval was rushed through.
    Let us review the events that have brought us here today. 
In November 2005, FSIS published a proposed regulation listing 
China's eligibility to export processed poultry products. Food 
and Water Watch was among the groups that raised serious 
concerns during the public comment period. We pointed out that 
the 2004 FSIS audit of seven Chinese poultry and slaughter 
processing plants was problematic. The three slaughter plants 
failed the audit, two of the four processing plants failed. And 
we believe that a sample of only four processing plants was 
insufficient anyway given that the proposed rule indicated that 
more than 25 processing facilities would be eligible for 
export.
    It is important to note here that in an August 2008 USDA 
Office of the Inspector General audit report, that inspectors 
from FSIS visited China again in 2005 and conducted another 
audit. The four facilities failed. But there was no publicly 
visible regulatory activity on the proposed rule until April 
18th, 2006, when the final rule was sent to OMB. Normally I 
think everybody is aware that a review of this nature takes up 
to 90 days. Today, 32 countries are eligible to export meat 
products to the U.S., and eight are eligible for poultry 
products. These countries had to go through a very lengthy 
review. And while it was imperfect, it was many, many, many 
times more rigorous in terms of regulatory hurdles than what 
China was required to do.
    So the rule was announced on April 18th. Stunningly, on 
April 20th, 2 days after the rule was sent to OMB, the final 
regulation was announced at the White House because Chinese 
President Hu Jintao was visiting then-President Bush. The rule 
limited exports to the U.S. to shelf-ready poultry products. 
The rule was clear it didn't include birds slaughtered in 
China, but USDA officials continued to push for equivalency, 
even in the face of overwhelming evidence that China's poultry 
slaughter and processing facilities are not really equivalent.
    To its credit, this subcommittee has been responsible for 
raising issues that have led Congress to prohibit expenditures 
of funds by USDA on this rule. Without the committee's 
vigilance, Americans would now be exposed to dangerous 
contaminants and bacteria. Lurking in the background is a trade 
issue that seems to be tied to the equivalency of status of 
China for proposed poultry products. China refuses to import 
beef products from the U.S., ostensibly because of concerns 
about mad cow disease. But really, China is willing to 
reconsider beef imports if it can export poultry to the U.S. In 
fact, the Chinese press reported just before the April 2006 
visit by President Hu Jintao that a beef for chicken deal was 
being negotiated.
    There was an April 12, 2006, article that appeared in China 
Daily entitled, Chinese Poultry to U.S., U.S. Beef to China, 
that strongly suggested that a quid pro quo agreement had in 
fact been struck.
    While USDA officials have stated that no such understanding 
was ever reached, opening up beef trade with China seems to be 
a very high priority for the USDA. Although some of our 
domestic agribusiness trade associations are using their 
considerable political power to push for a swap, it is the 
National Cattlemen's Beef Association who has been very vocal 
in pressing for a removal of the ban on the importation of 
processed poultry products from China. They view it as an 
impediment to the export of U.S. beef to China.
    But we should be clear, imported food from China is not 
safe. Their own government officials have admitted that openly. 
In March 2009, when their food safety law was unveiled, 
officials in the Chinese Health Ministry described the food 
safety situation in their country as grim, with high risks and 
contradictions.
    The new law which took effect on June 1, 2009, is designed 
to address the problems that arose from the intentional 
contamination of milk, which caused over 300,000 Chinese 
citizens to be hospitalized with acute kidney disease and 13 
infants to die. I think everyone is aware, because milk powder 
is used in various baked goods and candies, hundreds of 
products were impacted.
    Other imported food products from China have been the 
source of recalls, import alerts, and detention. And since 
January 2009, the FDA has stopped 545 shipments of Chinese food 
items that fall under FDA jurisdiction from being imported. 
Among the reasons cited, illegal veterinary drugs, suspected 
contamination with melamine, unsafe food additives, unsafe 
color additives, lack of labeling, salmonella contamination, 
listeria contamination, unsanitary packaging conditions, unsafe 
pesticide residue, poison, unfit for food, and failure to 
register a food process.
    In addition, currently there are 12 FDA import alerts for 
various Chinese foods, and there have been several U.S. recalls 
of imported Chinese food products such as seafood, candy, baked 
goods, and pet food ingredients.
    We should really wait and see how the new food safety law 
works and whether the government of China can enforce it before 
we allow them to export any more food to us. We believe that 
the equivalency approval process for China was deeply flawed, 
and the process needs to be started anew, and this should 
include revoking the April 2006 rule.
    Our regulatory agencies must maintain the integrity of the 
food safety system, and regulations must be based on science, 
not politics. Trade should not trump public health. And while 
China might view this as a quid pro quo, the welfare of U.S. 
consumers should not be sacrificed so that we can open up new 
export markets.
    [The statement of Ms. Hauter follows:]

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    Ms. DeLauro. Thank you very much, and you all very much.
    If I may start, I would like to, Mr. Brosch, ask you a 
question.
    Mr. Brosch. Certainly.
    Ms. DeLauro. First of all, I am just reading your testimony 
and you say we are here to advocate that Congress allow the 
determination whether poultry from China is safe, meets U.S. 
requirements, to be made in the same way that decision is made 
for our domestic product and for product from every other 
country, through risk assessment, comprehensive science-based 
approval processes that have been established under our laws 
and regulations. I concur. I agree with you, and I applaud the 
commentary.
    Further in your testimony you say, Imported food is 
expected to be subject to the same rigorous standards. USDA has 
a long successful history of ensuring the safety of imported 
meat and poultry through a stringent, comprehensive process by 
which the Department must determine that an exporting country's 
inspection system is equivalent to the U.S. system before 
approving that country for exports to the United States. Beyond 
that, any plant seeking to export meat or poultry to the U.S. 
after this equivalency determination has been made must 
demonstrate its compliance with U.S. requirements. This 
approval process can take many years, and it should. It is the 
way USDA protects the American consumers from unsafe products.
    You go on to talk about the approval process, which is 
rigorous.
    Let me ask this question because there was a declaration by 
USDA of equivalency with China. But this is what was in the 
inspector's reports. And while you can't read anything that is 
up there, but you have at your desk the inspection documents.
    Mr. Brosch. This document?
    Ms. DeLauro. Yes. It is a summary of the document which I 
believe is worth reading. This is what the auditor found. This 
was for four processing plants. Keep in mind the notion was 
that there would be between 10 to 25 processing plants in 
China. So this was four processing plants that China selected. 
They selected the processing plants and, quite frankly, the 
three slaughtering plants. We didn't go in and randomly select. 
They selected the plants for us to look at.
    Sanitation control. In one establishment during pre-
operational sanitation, grease, blood, fat. Pieces of dried 
meat and foreign particles were observed on product contact 
areas of conveyer belts and plastic containers. In one 
establishment, over product dripping condensation was observed 
in several areas.
    In two establishments, edible and inedible containers were 
not segregated in the cut-up area.
    In three establishments there was inadequate light at the 
reinspection stations.
    In one establishment, tables were missing at the inspection 
station.
    In three establishments, the conveyer belt used for edible 
product transfer had several deep cuts.
    In one establishment, a rusty pipe with flaking paint was 
observed over the exposed chiller.
    In one establishment, product contact areas were 
continuously wiped off by a dirty cloth that was not cleaned.
    In one establishment, non-food contact surfaces of 
processing tables were observed with heavy grease in the raw 
meat area.
    In two establishments, employees designated the floor 
duties were handling edible product duties.
    Slaughter processing controls. In one establishment, 
monitoring activities were not adequately addressed in the 
HACCP plan.
    In one establishment, generic E. coli testing on the whole 
birds was not being performed.
    In one establishment, no testing for salmonella species on 
whole birds was performed.
    In two establishments, there was no pre-chill or post-chill 
operation performed by the establishment employees or 
inspection service.
    Now, there was, based on this audit, a determination and a 
declaration of equivalency with U.S. standards. Now if in the 
United States, Georgia, Iowa, an inspector went into the plant, 
in inspecting U.S. plants, and found--I could repeat them, but 
I will not--if they found all of these circumstances, would 
they be declared safe in the United States?
    Mr. Brosch. Of course not. They would be delisted.
    Ms. DeLauro. They would be delisted. Okay.
    Now, I am all--this is science, this is science. This is 
not ad hoc legislation. Science. But there was a declaration of 
equivalency based on these findings. Your comment, just to say 
back to you, in the United States they would have been 
delisted.
    Mr. Brosch. Yes.
    Ms. DeLauro. Where do we then provide the same standards 
that we ask of U.S. plants, we ask of foreign plants?
    In addition, I might add--I want to talk about--I believe 
in what the U.S. domestic market is doing. And I do have here 
the U.S. Department of Agriculture, FSIS quarterly enforcement 
report from January 2009 through March 31st, 2009. And it says 
here on average with regard to compliance rate that it is 98.8 
percent. So we are dealing with compliance. This is not 
compliance, nor is it equivalency.
    Let me make one more point. The issue is why we have 
singled out. Your point here where you talk about the USDA 
approval process is exceedingly rigorous, and the approval 
process can take many years, and it should. Let us talk about 
the approval process here. Essentially if I take an October 
2004 letter from the Chinese Government to Dr. Murano, and they 
were asking for poultry, domestic Chinese poultry to be let 
into the country, and I believe they asked at that time that we 
bypass any inspection process. Fortunately, that didn't happen.
    But let's go from October of 2004 to--we are talking--what 
did you say, Ms. Hauter--June 1 of 2006, and a determination of 
equivalency in that period of time.
    I would like to ask you why China was singled out for 
preferential treatment versus any other country. What is that, 
a year, 6 months, a year, 7 months, in terms of making that 
determination?
    I have to make one more point to you, that during this 
period of time, and if you go back, this was, I think the rule 
was--the discussion about it was November 23rd, 2005, November 
21st, was it Detroit operation, Newark, Detroit? Newark. I will 
get the precise citation, in Newark Operation Foul Play. This 
was U.S. Customs that stopped a million pounds of poultry 
products smuggled in from China; smuggled in illegally from 
China.
    At the same time, going back, June 2004, outbreaks of 
highly pathogen avian flu strains of virus found among poultry 
flocks in eight Asians countries, Cambodia, China, Indonesia, 
Japan, Laos, South Korea, Thailand, and Vietnam.
    June 2005, more human and poultry cases of H5N1 influenza 
are coming to light in Southeast Asia. Human illness in Vietnam 
and the second poultry outbreak in China.
    August 10, 2005, Chinese authorities say they have 
identified the virulent disease that appeared in Sichuan 
Province in late June. Sickened a suspected 212 people so far; 
killed 38.
    Streptococcus suis, a bacteria in pigs. The 16th to 21st of 
January 2006, European Health and Consumer Protection 
Commissioner Markos Kyprianou will visit the People's Republic 
of China. He is interested in avian flu and human influenza.
    I will just say that is the atmosphere in which all of 
these deliberations are being discussed. How we could have 
provided equivalency in this period of time, given what USDA 
auditors talked about, the amount of rigorous time involved in 
being able to declare a country equivalent, and the incredible 
health circumstances at that time when we should have cut off 
negotiations, in my view, and said we have to really take years 
to figure out whether or not we will allow chicken to be 
processed in China or slaughtered in China to come back here.
    Mr. Brosch.
    Mr. Brosch. Thank you, Ms. Chairman.
    I guess first of all I would say with respect to the 
smuggled poultry, the million tons, our Coalition or any 
company of course is not in favor of anything that would be 
smuggled or brought in illegally. We want things to go through 
the process. That is what this is all about. With respect to 
that, we are in total agreement with you. That was outrageous. 
What companies were involved with smuggling should have been 
brought before the law and punished for that. So we don't have 
anything to say about that certainly.
    With respect to the sheets that you have put out here, I 
would just note that what you see here, I think, you know, you 
see a lot of bad situations, but you also see FSIS doing its 
job. What you have is FSIS out here, and they are observing and 
reporting all of these things. And at the conclusion of the 
pages, they are saying, if approved, this establishment--the 
equivalency was approved, this establishment would be delisted. 
And they say that on the second page and on the fourth page.
    Now, we have circumstances where we have approved other 
countries or we have approved plants in our own country who get 
delisted, because even though the decision has been made on the 
equivalency of the system, something goes awry and something 
goes wrong. And our people are on the spot, and they take care 
of it.
    For example, the United Kingdom right now has been approved 
but it is currently suspended. And it is suspended because our 
inspectors, doing their job, found something wrong, and they 
took care of that. And they now have that suspension.
    We have companies in this country that are suspended. We 
regularly have companies--and I am sure Dr. Raymond has told 
you about that on many occasions--from other countries where 
those plants are delisted on a regular basis, have to go 
through some process to get back on.
    So these are unacceptable situations----
    Ms. DeLauro. But you went and--not you, but the agency--
based on that data--and believe me, this was done in 2006. Our 
ban, the limitation, did not go into effect until 2007. Between 
2006 and 2007, I don't know of any going back and saying that 
this has been corrected, that has been corrected. And, by the 
way, China never certified any plant during that period of 
time.
    But this is not someone that you approved based on good 
data. This is someone that you approved on problems. Wasn't 
somebody who came through the process, you said it was okay, 
they had a problem, and then you addressed that problem. This 
was from the get-go. This was, day one, you knew of all of 
these difficulties.
    Mr. Brosch. Yes. Well, obviously, I left the Department of 
Agriculture in 1999, and I can't respond for the Department of 
Agriculture. I think those are questions they are going to have 
to respond to, your questions. But I can't answer that 
question.
    Ms. DeLauro. And allowing a year and 5, 6, 7 months in 
order to do this progress, does that meet the standards that 
you have laid out in your testimony?
    Mr. Brosch. You know, I would have to know more facts to be 
able to say that. I mean, you have brought a lot of facts out 
here on the table. I haven't had a chance to discern those, 
``Here are the responses,'' I really can't answer that.
    Ms. DeLauro. And you also--I just want to repeat your 
answer early on--if you found these circumstances in U.S. 
plants, you would delist them.
    Mr. Brosch. I would think they would be delisted.
    Ms. DeLauro. Okay. Thank you.
    Lori, Ms. Wallach, do you have a comment? Quickly, because 
I am well over and my colleagues are bearing with me. They will 
take me to task later.
    Go ahead.
    Ms. Wallach. I just wanted to speak to what those 
inspections were about, because prior to the WTO and the change 
in the law, U.S. officials had to go into each plant and 
inspect and then decide that particular plant was equal to U.S. 
and certify that plant.
    Now, under equivalence, under the existing rules that need 
to be changed of USDA, they do what is called a paper audit, 
where they look at what the system is supposed to be. But then 
the plant inspections go to whether or not it is actually being 
enforced or implemented.
    So, particularly when you have a developing country that 
hasn't the budgetary or infrastructure or culture of 
enforcement, those inspections, when you see the catastrophe, 
are not just about whether or not the plant itself is approved, 
but rather it is the evidence of whether what is on paper is 
what is in reality.
    So it was an abomination that that equivalence 
determination was issued. And we thank the chairwoman from 
saving us for that, though it is a scary fact that it was 
necessary to intervene to stop it, which, in a way, gets to one 
of the structural problems that has to change, which is: It is 
not a matter of what would be delisted. We don't get to pick 
that. We can go in and audit and see repeated problems we don't 
delist, because our report from 2002 shows repeated problems in 
Brazil and Chile and other places. But they get to pick.
    So it is the actual country, once you certify equivalence, 
it is the country that picks the plants. And so, it is not even 
that we would be looking at them like we used to once they had 
been picked as an okay plant to say they were no longer okay, 
which makes that set of disgusting information even more 
horrifying.
    Ms. DeLauro. Uh-huh.
    Mr. Brosch. Just for the record, we don't import anything 
from Brazil. Brazil is not approved to ship to the United 
States.
    Ms. Wallach. That is not true.
    Mr. Brosch. Not for poultry.
    Ms. Wallach. For beef.
    Ms. Brosch. Not for poultry at all.
    Ms. Wallach. Right, for beef. Our report in 2002 looked at 
beef and poultry in the equivalence system. So let me clarify: 
Brazil was beef. And they had company-paid inspectors year 
after year, and we allowed it.
    Ms. DeLauro. They do beef, they do mutton, and they do pork 
from Brazil, and not poultry.
    Mr. Brosch. Not poultry.
    Ms. DeLauro. I just want to make one other point. I think 
it is important. These plants were selected by China for us to 
look at. Two of the four processing plants failed. Three out of 
three of the slaughtering plants failed.
    When you deal with equivalency, we don't get to pick and 
choose what plants. The Chinese Government, the Brazilian 
Government, the Canadian Government, they pick the plants. We, 
in essence, lose our ability--we are supposed to do a yearly 
audit, assuming we do a yearly audit. We go back and we take a 
look. But we don't certify, we don't select the plants, we 
don't do the inspection of those plants.
    Mr. Latham.
    Mr. Latham. Are we going in order?
    Ms. DeLauro. I thought you were representing Mr. Kingston. 
I am sorry. I thought that was the case, but it is up to you 
guys. You tell me what you want to do.
    Mr. Latham. Okay. Thank you very much, Madam Chairman.
    And welcome, the panel.
    Some of the correspondence that has been shared with me and 
some of the testimony that I have read today, proponents of the 
ban have, in all intents and purposes, accused American farmers 
of putting sales ahead of public concerns, public health 
concerns.
    And, in your letter, it says here, ``I was disappointed to 
read that the producers of virtually all meat products in our 
Nation's grocery shelves would place a higher premium on the 
benefits of the marketplace than maintaining the safety of our 
food and protecting public health.''
    I am sure we are going to hear today that trade should not 
trump public health. And I will tell you, if you put yourself 
in the shoes of an Iowa farmer, there would be absolutely no 
disagreement with that, because only one food safety incident 
can put that farmer out of business.
    And I will tell you that statements like that are 
absolutely offensive and to my constituents are very offensive. 
The idea, somehow, that they would place sales above the public 
health I think is shameful and has no place in this debate at 
all. Ensuring the safe food supply is absolutely critical to 
the success or failure of all of the agricultural economy. And 
I really ask people to stop painting farmers as the bad guys.
    And it seems to me--and if you look at this, when you look 
at different initiatives that are here, whether it be the 
indirect land use, that farmers are, you know, the cause of all 
environmental problems, that there is in this Congress today a 
real war on agriculture and the family farm operations. And it 
simply is wrong, and it has to stop. And to keep painting them 
as the bad guys I think is, again, very, very offensive, as far 
as I am concerned.
    I really wonder why, if proponents of the ban feel as 
strongly as they do about China's food safety, why haven't they 
supported a ban on all food products coming from China?
    And it is really frustrating today that we don't have a 
representative here from USDA. This is what this is all about. 
We have no one here. We have gone through the whole spend bill 
this year, the ag appropriations bill, and not had any 
oversight into these agencies. I really wonder why they are 
absent here today. They should be here to defend themselves and 
provide information. And I have questioned, you know, whether 
we are doing any oversight, as far as the Department itself is 
concerned, with the funding that has already been put forth 
this year.
    But I think a lot of us that represent agriculture and 
represent family farmers are extraordinarily frustrated when we 
hear them being blamed for the type of problems that are 
certainly in the system.
    Ms. Hauter, you indicate in your testimony that the FSIS 
has a fairly extensive evaluation and enforcement system for 
meat and poultry products and that your organization believes 
that the process provides better safeguards for consumers.
    Why don't you advocate a similar funding limitation on 
foods imported under the FDA jurisdiction?
    Ms. Hauter. Sir, we have supported a ban on all Chinese 
food products coming into the U.S.
    And, just for the record, I would like to say that our 
organization works very closely with family farm organizations.
    Mr. Latham. Such as? Who?
    Ms. Hauter. And I am actually married to a full-time family 
farmer on my family's farm 40 miles from Washington, D.C. So we 
would never make an attack on family farmers.
    We work with the National Family Farm Coalition and all of 
its affiliates from several States, from the Alabama Contract 
Poultry Growers Association. I can list--would you like me to 
list the groups?
    Mr. Latham. No, no, that is fine.
    How can you, you know, say--and this is horrible, all these 
findings. And I will note that they are back from 2004, the 
most recent one, 2005. How do we know that things haven't 
gotten any better, when you have the prohibition from doing 
inspections?
    Ms. Hauter. Well, sir, I, the past 2 years, had the 
opportunity to go to China and attend a food safety meeting. In 
fact, I will be going again at the end of September. And it is 
a trade show that is put on by the proponents of food trade. 
Dr. Raymond was there last year and spoke at the conference.
    And I had the opportunity to speak to any number of Chinese 
people about the food safety system, heard about the problems 
that the government is having from the government officials' 
own mouths, and, in fact, have lots of concerns about a whole 
range of products, especially organics.
    And I think that we need to really look at the equivalency 
process again, and for all countries, not just China. Because I 
think China is probably the most dramatic example of problems, 
but I know that when we have looked at other countries from 
Latin America, even Australia, there are major problems--
Canada.
    Mr. Latham. But if you have the funding prohibition in 
place, how are you ever going to know, on a science-based 
inspection, whether or not there are improvements? Again, this 
is 4- and 5-year-old information. I mean, have they done 
nothing since then? We don't know, because we can't inspect 
them.
    Ms. Hauter. I think that we need to wait and see how many 
recalls we have on other products and what happens in China 
with food safety issues. I know that we are monitoring the 
Chinese press.
    Mr. Latham. How are we going to know that if we don't have 
the ability, don't have the funding to be able to inspect it?
    Ms. Hauter. Because there are many very dramatic food 
safety problems that have occurred in China----
    Mr. Latham. That were at the trade show?
    Ms. Hauter. Well, not that were just at the trade show. I 
think the melamine--the press. I mean, the melamine crisis was 
occurring when I was in China last August. The Chinese people 
that I spoke to were actually outraged, and I think that they 
are very concerned about their own food safety issues. And we 
need to give it some time to see if the government can become 
accountable to its own citizens on food safety and a range of 
other issues.
    So, what is the rush? We have enough poultry products in 
this country. Why would we put our own citizens at risk just so 
that we can import processed chicken from China? I don't 
understand why that is such an imperative that we would 
actually risk our citizens' health.
    Mr. Latham. Are we out of time?
    Ms. DeLauro. Look, I went over----
    Mr. Latham. I enjoyed yours though.
    Ms. DeLauro. If you have another question, please go ahead.
    Mr. Latham. Well, just kind of that point, in your 
testimony you said, ``Some of our domestic agribusiness trade 
associations seem to think that there is linkage between the 
status of poultry imports and beef exports.'' Are you 
questioning whether there is a linkage?
    Ms. Hauter. No, I believe there is a linkage when you look 
at the evidence. It is a quid pro quo. And I don't think that 
that is how we should make public policy decisions on the food 
that our citizens eat; that, so that we can export beef to 
China, that we allow imported pork products into the country.
    Mr. Latham. Okay.
    Ms. Wallach, in your testimony you talk about NAFTA and the 
WTO for the explosion of U.S. food imports that gives the 
impression that, you know, U.S. farmers are hurt by it. In 
fact, U.S. food exports have gone from $37 billion in 1991 to 
$115 billion last year. You know, you are saying that they 
doubled as far as imports. But doesn't that kind of counteract 
what, you know, you are saying about the negative impact of 
free trade?
    Ms. Wallach. Sir, the food import growth rate is 128 
percent since NAFTA and WTO until the last set of data. And the 
food export rate is 86 percent. So it makes my point that the 
volume overall has gone up.
    But the reason why the U.S. trade surplus in agriculture 
has declined--and, in fact, in 2005, the United States was a 
net food importer for the first time since 1955--relates to the 
fact that our import growth is expanding much more quickly, 
almost double, than our export growth.
    Mr. Latham. And why is that?
    Ms. Wallach. I would argue that, under the rules of the 
trade agreements, a lot of production, particularly 
processing--because if you look in the processed lines of 
tariff lines, that is where the biggest increases are--has 
shifted offshore to take advantage of lower wages and lower 
safety standards. So, with the equivalent measures, the 
producers don't have to meet our standards anymore.
    Mr. Latham. But artificial trade barriers of products 
wouldn't have any effect on that?
    Ms. Wallach. Well, the areas where we are basically still 
exporting a lot are areas where, theoretically, that would be 
the case still, in grains. But in the processing and the human 
value added, more expensive, additional value added goods is 
where we are now becoming a net importer. Which gets to--if you 
look at the tariff lines, it looks like the agribusiness 
companies are shipping the human cost to cheaper venues.
    On your question of how we could ever find out if things 
are better in China, I mean, practically, an approach would 
be--and this gets to the problem with the existing equivalency 
rules at USDA. Right now, if there is a problem, the 
equivalency isn't listed, and you go back and reassess.
    So what I would suggest is that, for instance, the past 
determination, which seems on all grounds to have been done 
terribly--even if the rules were right, it seems pretty 
slipshod--to be to lift that assessment and to start over, 
number one, to get the underlying rules correct, so that, for 
instance, we go back to a system where the U.S. inspectors 
picked the plants. There is nothing in the sanitary and 
phytosanitary agreement that would require us to give us that 
right. That would help, particularly in the culture of a 
regulatory system like China that has so many problems in its 
own system. So that might be a way to try and make it work.
    But also, you know, other elements of improvement, not the 
least of which would be to make very clear on the record that, 
to find equivalence, you need to find the system really does 
provide the same level of protection in every regard, which is 
to say some places are going to have to clean up their act if 
they want to be able to send food here versus we just let it 
come in. And then you would go through the process, having 
gotten rid of the old equivalence determination, fixing the 
system, and then using the new system of determining 
equivalence to figure out if whether or not, in fact, 
practically, in this day, if things have gotten better. And 
under a proper system, you could find that food can come from 
China in a safe way.
    It is an assessment that you have to do. I am skeptical 
because, with your colleague's grocery bag of delectables, I 
actually look at the country of origin labeling, and I avoid 
stuff made in China, food, that has any potential 
contamination, like the Mandarin sauce, et cetera. The dried 
stuff I am less worried about. But it is a pretty severe 
problem. I mean, if we have had staff who read Chinese, who 
read the Chinese press--because it is only when people start to 
die that you see in the foreign press coverage of the food 
safety problems--but it is endemic. I mean, it is like the 
jungle. And so if you can read the actual Chinese language 
press, there is coverage of horrible problems that just don't 
get bad enough to kill people all the time.
    So it needs to be redone.
    Mr. Latham. Okay.
    Mr. Brosch, do you have any comments?
    Mr. Brosch. Well, I guess I would just reiterate what I 
said earlier, which is that we are not here to advocate for any 
particular result; we are here to advocate for a process.
    And the process that we are here to advocate is the one 
that we have committed to, which is to allow each country to 
apply and to be evaluated on the basis of risk assessment and 
science. And to simply shut out one country seems to me to be 
inconsistent with the application that we have taken.
    And I think that we owe that to all--now, if the decision 
is taken, that they are not sufficiently safe or their product 
doesn't meet our standards, so be it. But I think it is the 
process that we are here to advocate for.
    Mr. Latham. All right. And I appreciate that, that no one 
is advocating that we need to bring safe products in here. You 
know, when we have funding prohibitions, we will never know.
    Mr. Brosch. Mr. Latham, in my testimony, my longer 
testimony, I mentioned--I think all of us can remember alar 
from years ago and its effect on the apple market. And I think 
it is a good example of the kinds of situations that our 
members, the members of our coalition, face, which is: The 
market is sensitive to these kinds of issues, so if you have a 
situation where there is an unsafe product on the market, the 
consumers are not sitting there saying, is that an apple from 
Washington State or is that an apple from France or wherever. 
They are saying they are afraid of apples.
    So it is in our interest and all off our interests, 
probably more than anyone else's, not only because we are 
consumers and our children are consumers and our relatives are 
consumers, but also our businesses depend upon the perception 
of the American public that things be safe.
    So we are very much with the chairwoman. We are very much 
with everybody here who has indicated their interest in safety 
of food product. But we think that there is a process that we 
have put into place that is part of our law for everyone else, 
that is part of our international obligations, and that has to 
be respected.
    Mr. Latham. Right. And that is exactly why I find it very 
offensive when people make statements that the producers put 
marketplace over safety. Because that is simply--if you want to 
be out of business tomorrow, if you are--and to sell an unsafe 
product to what is probably your own family knowingly, for 
profit, that charge is--I am very frustrated by it and I am 
very offended by it. And I appreciate it.
    Mr. Brosch. I have the privilege of, besides working for 
this coalition, of working very regularly for the National Milk 
Producers Federation, and I go to their meetings. I am their 
outside general counsel. And I can tell you, at the meetings I 
have had in the dairy industry, I have heard more discussion 
among dairy farmers about this issue, how they can improve, how 
they can be more safe, somatic cell count, everything else. 
Because they are living right there, they are living right 
there in those circumstances. They don't want to live in 
something that is unsafe.
    So I applaud your statements. I think that is the way 
farmers and food industry people think in this country; it is 
just not well-known. And, unfortunately, they get a bad rap.
    Mr. Latham. Right.
    Thank you very much.
    Ms. DeLauro. Let me just, before I yield to Mr. Sanford--
because my colleague from Iowa is referencing the letter that I 
wrote to the groups who wrote to me. And I would ask him to 
take a look at the letter that they wrote to me and what they 
stipulate.
    And now, we are not talking about--and, Mr. Latham, you 
began talking about small farmers. Well, as far as I know, 
Cargill, JBS, Monsanto, Tysons, and several others, these are 
not exactly small farmers.
    I have a high regard for small farmers. I spent a lot of 
time and have for almost 15 years on this subcommittee, not as 
its Chair but as a member of this subcommittee, and now as its 
Chair, providing enormous resources in order that small farmers 
might be successful.
    And I have dairy farmers. And not that long ago at the 
Greenbacker Farm in Wallingford, Connecticut, and trying to 
find out how it is, because of melamine in China and children 
dying in China, that the Chinese people do not want to drink 
milk anymore, whether it is milk produced in China or milk 
produced in the United States. And our folks are having a very 
difficult time with that because of the drop.
    So this is not about small farmers. This is about large 
agribusiness and large producers, who have a very big interest, 
and some, quite frankly, who years ago when this first came 
out--and the National Chicken Council--who said this would be 
the wrong direction to go in. Tunes have changed.
    Mr. Bishop.
    Mr. Latham. Would the gentlelady yield just a second?
    But this letter you write, I mean, you are talking--the 
response is to Cattlemen's Beef Association, Chicken Council, 
Pork Producers, the Turkey Federation. You are accusing them of 
putting the sales or trade above food safety. Those are all the 
small farmers in Iowa and throughout----
    Ms. DeLauro. I am saying that food safety is to be 
uppermost. It is good to think about trade. There are ways in 
which we are going to be able to deal with this.
    And I would like to ask Mr. Brosch, if I can: Ms. Wallach 
and Ms. Hauter, both talked about a way to start over, to 
revoke the current rule, start again, so that we have an 
inspection process and can move forward to see--in fact, I 
think it is clear, based on evidence. I am not a scientist. I 
take advantage of the science that the agency has in place.
    Should we start this over again?
    Mr. Brosch. Are you talking about the USDA rule?
    Ms. DeLauro. I am talking--yes.
    Mr. Brosch. Well, I think that is a question--the USDA and 
you can have that discussion. I don't----
    Ms. DeLauro. You don't have an opinion on whether we should 
do that. Do you have an opinion on whether we should start 
over? You represent all of these groups. What----
    Mr. Brosch. Well, obviously, we are going to have to start 
over or start at some point, because the current legislation 
has blocked any movement on a rule for a number of years now. 
So I don't know where we are at here, given that situation. So 
I think that discussion would have to have USDA in the room.
    Ms. DeLauro. Fine.
    Mr. Kingston. If the gentleman would yield, basically you 
would have to start all over. Because if you jump in halfway, 
you have to make sure it is from A to Z safe. And so you sort 
of have to start all over, by definition.
    Mr. Brosch. Well, it looks to me like--the data, for 
example, that has been presented here today is from 2004. That 
seems to be a bit dated. I would think----
    Ms. DeLauro. That is the date, that is the time period on 
which equivalency was determined on that data. Between 2006 and 
2007, there wasn't any visits or re-audits or anything of the 
current state of affairs, in terms of correcting deficiency.
    Mr. Brosch. I am not offering any criticism, Madam 
Chairman. I am just saying, in response to your question 
whether you would have to start all over, since this process 
has been essentially blocked by legislation for several years--
and this data goes back to 2004. I don't know what the newest 
data is, but of course you want to make your decisions on 
current data. So USDA would have to do something of that sort. 
And, again, we don't have USDA in the room, so I would think--
--
    Ms. DeLauro. I want to address that again. I want to 
address that again. There is no individual at USDA who was head 
of FSIS. That is not your problem. It is a problem for us, 
because we can't get the appropriate person up here to be able 
to ask questions.
    Clearly, as well, this was not the USDA that made this 
determination. It was a prior USDA. So we are waiting very 
patiently for the new head of FSIS, and then, boy, do I have a 
series of questions for that new Secretary.
    Mr. Brosch. Again, Madam Chairman, I wasn't offering any 
criticism of your comments. I was simply saying that, in order 
to answer this properly, somebody from USDA would have to be in 
the room.
    Ms. DeLauro. Sure. Okay.
    Mr. Bishop.
    Mr. Bishop. Thank you very much.
    Let me join Mr. Latham and Mr. Kingston, Mr. Brosch, in 
suggesting that I think it is obvious that safety has to be 
first and foremost for our producers, for our farmers, for our 
processors, for our wholesalers, and for our retailers. 
Because, obviously, if the consumer feels that the food is not 
safe, they are not going to buy it. And if it is not bought, it 
means that all of you, everybody in that process, is going to 
suffer. And, Mr. Brosch, I was happy to hear you suggest that, 
perhaps, as Mr. Kingston suggested, we do have to start over 
with USDA to make sure that our food is safe.
    But I want to just ask this question to all of the panel 
members. Getting back to Chinese chicken, according to the 
Chinese Government, their poultry industry complies with the 
international standards and practices with respect to their 
inspection of meat and poultry and that it currently exports 
poultry to other developed markets, including Japan, the 
European Union, and Switzerland.
    I want to ask the panel members, all of you, if you will, 
to your knowledge, is there any evidence that those other 
developed nations who currently import Chinese meat and poultry 
products have encountered or experienced any significant issues 
or problems with those products that they have imported from 
China?
    Mr. Brosch. Well, Mr. Bishop, I asked that question just 
the other day in preparation for this. My understanding is that 
the current volume of poultry shipped from China to Japan is 
about 10,000 tons a month, which is a fairly significant 
volume. And, for the European Union, which I believe approved 
shipments from plants about a year and a half ago, my 
understanding is, for the first half of this year, there is 
something on the order of 1,500 tons total to Europe, which is 
not as big a number.
    I asked about the question of food safety problems. I am 
unaware of any. I mean, I don't have comprehensive knowledge, 
but I am not aware of any, at this point, in those markets. But 
that is all I know at this point.
    Mr. Bishop. Ms. Wallach.
    Ms. Wallach. I tried to figure out the same question. I 
found two things, although I am still snooping around.
    One thing is that, for Japan and Europe, which is the 
information I could find--I couldn't find out Switzerland--the 
countries have inspectors from their own food safety systems in 
the plants so that----
    Mr. Bishop. In China.
    Ms. Wallach. In China. And so they won't rely on the 
Chinese system, and they run a separate line--there is a day 
when the guy from Japan is in a particular plant, and that is 
the day that they can actually run the line----
    Mr. Bishop. Are they signatories to the same agreement that 
we are?
    Ms. Wallach. Yes. That is how they have interpreted it. 
That was my reference to the notion that there are different 
ways to interpret how you can do it. So that is number one. 
That is how they have interpreted making sure it is safe; they 
put their own people there.
    And so then they have to live up to the actual standard, 
and they are applying their standard. So it is, like, a 
different day. And, apparently, the way they staff it is they 
have the inspector moving around. There is a particular day or 
2 days that it is running the Japan line, and then it goes back 
to what we would otherwise have to accept.
    The second thing is that they have a much higher rate of 
reinspection at the border, which is the second thing I found 
out. Japan and Europe, with respect to high-risk foods, which 
they characterize a lot of meat and poultry products from 
China, inspect between 50 and 70 percent. That is, you know, 
numerous times over what we do, which is, what, around 11 
percent now.
    So those are the two things I could figure out of how they 
are dealing with the problem.
    Mr. Bishop. So you would then suggest, I would imagine, 
that we look at the approach that they take to try to make sure 
that ours is safe.
    Ms. Hauter. Yes, the EU has restricted poultry imports from 
one region of China that doesn't have avian flu. And China has 
a very decentralized way of addressing inspection issues. It is 
not centralized in the same fashion as ours. There is a lot of 
discretion at the regional level.
    Mr. Bishop. Through your research, have you determined also 
that they have the people on site?
    Ms. Hauter. Yes. And they do microbiological testing, as 
well.
    Mr. Bishop. On site?
    Ms. Hauter. Yes.
    Mr. Bishop. And we do not?
    Ms. Hauter. No. I mean, one of the things that we would 
like to see is, rather than our current recall system, that we 
actually do testing on site and we get the results immediately, 
so that we don't need to have recalls.
    Mr. Bishop. So you are suggesting a more proactive 
approach?
    Ms. Hauter. Yes.
    Ms. Wallach. When I was discussing generally revisiting our 
rule for finding equivalence and I had mentioned that other 
countries, under the same exact international trade rules, have 
done different things, some of the best practices have been 
things like a more prophylactic ``let's avoid the stuff coming 
in'' versus ``we pick up what is left later,'' but also only 
this notion of actually not only picking the plants but having 
your people there and having your standards being applied by 
your people.
    Mr. Bishop. How do you feel about that, Mr. Brosch?
    Mr. Brosch. Well, I think USDA would have to respond to 
that better than I, because that is a question of resources. I 
mean, that may be a question of resources in terms of being 
able to put----
    Mr. Bishop. Well, we are responsible for the resources.
    Mr. Brosch. Yes, sir.
    Mr. Bishop. But we could, with resources and with 
direction, force them to do it. But I want to know how you feel 
about whether or not that is something that we ought to do.
    Mr. Brosch. You know, that really----
    Mr. Bishop. How you think that the processors in our 
country would feel about making sure that they had on-site 
inspection----
    Mr. Brosch. I will be honest with you, Mr. Bishop. I don't 
know. I really don't know.
    Ms. DeLauro. Could you yield for a second, Mr. Bishop?
    Mr. Bishop. Yes, ma'am.
    Ms. DeLauro. I just wanted to ask another question.
    In our process before, because earlier in your testimony or 
in commentary, that when we were equal to, did we have on-site 
inspections? What did we have in the past, before the rules 
changed, in terms of some of the facilities? What kinds of 
inspection regimen did we have, in terms of determining 
equivalency and those kinds of things?
    Ms. Wallach. Even then, we didn't have people in all the 
time doing continuous on the line that was the U.S. line.
    Ms. DeLauro. Right. But what we do have----
    Ms. Wallach. We had USDA inspectors go first pick the 
plant, decide if they met our standards. And then they did 
audits. There were complications. I am not saying that was a 
blessed system, but that sure as heck was better than the 
current system.
    Now, China and Europe have gone one better, and they have 
actually figured out ways--and, by the way, this is also--I am 
sorry, Japan and Europe have gone one better. And this is not 
only in China, which is how I threw China in the wrong part of 
the sentence, they do that also in Latin America. So if you 
basically want to send food there, they make sure that it is 
going to be safe.
    And, as I understand it, but this--I couldn't get to the 
bottom of it, contradictory information--they actually have 
user fees as part of how they--because why should--if the 
company on site should have some contribution to how--and it is 
a sum fee, the way some of the new food safety bills have been, 
where you are not paying for a service which you could capture 
but rather register, you pay a fee, and then that is part of 
getting the inspection.
    Mr. Bishop. Mr. Brosch, do you have some further 
information?
    Mr. Brosch. Mr. Bishop, I wanted to consult with Mr. Ronick 
from the National Chicken Council because I felt bad about not 
responding to your question, and I wanted to get a little bit 
more information so that I could.
    In response to the question about how I would feel about 
having U.S. inspectors in plants overseas, the reason I think 
it is a complicated question is because we ship poultry--we, 
the United States--ship poultry to about 60-some countries. So 
we are talking about not just China, we are talking about 
Russia and the Ukraine and substantial numbers of countries and 
a substantial resource issue that you would have to address. 
But, certainly, we are cognizant that it would be an issue.
    But the second is, we do import meat and poultry from a 
number of countries now. I have the list here. I think it is 
about, oh, maybe 20 or 30 countries, something like that. And 
then we have this question about whether or not we are going to 
have 20 or 30 different inspectors from 20 or 30 countries in 
our plants, as well. Because they may say, ``Well, you know, 
you send inspectors over, we will send inspectors.'' And maybe 
that----
    Ms. DeLauro. 98 percent compliance.
    Mr. Brosch. Well, I know, Madam Chairman, but that is 
something we would have to consider, that is something we would 
have to think about and how that would work itself out. But, 
you know, we are talking about a very complicated problem.
    Mr. Bishop. Yeah, it is a very complicated problem, but, at 
the same time, it is one that would be in the best interest--in 
order to lift the prohibition, it would be in the best interest 
of American consumers. It seems to me it would be in the best 
interests of our American processors if we had a level playing 
field across the globe.
    Mr. Brosch. It may be. I am just trying to give you the 
best information I know at the current time. And that may be a 
discussion that has to be----
    Mr. Bishop. And I want to be very helpful, because, you 
know, I have processors that you represent in my district. And 
I want to make sure that they are able to export, that we don't 
have this quid pro quo thing and the leveraging that apparently 
is happening. We want to level the playing field because we 
believe that you have the best products and that we have the 
safest, the highest quality, most economical anywhere. But 
let's demonstrate a level playing field.
    Mr. Brosch. Well, we appreciate your support, Congressman. 
We do.
    Ms. DeLauro. Mr. Kingston.
    Mr. Kingston. Thank you, Rosa.
    Ms. Wallach, you had testified that we have $80 billion in 
food goods that are imported to the United States annually. Of 
the $80 billion, which ones do you feel safe with and which 
ones are you more uncomfortable with?
    Ms. Wallach. I, actually, on that question, being more of a 
trade person than a food safety person, though I am in the 
nexus, would defer to my friends at Food & Water Watch.
    Mr. Kingston. Okay. Well, it came out of your testimony, 
the statistic.
    Ms. Wallach. Well, I can give you the general answer to 
that, which is the answer that is common sense, and that is 
from countries in Europe, from the European Union member 
countries, from Japan, the countries that have advanced food 
safety systems that have been invested in a lot, we are less 
concerned. Those might literally honestly be equivalent in 
certain respects to what we are trying to do, number one.
    Number two, things that aren't subject to spoilage through 
long transportation, things that aren't temperature-sensitive. 
So, for instance, with chicken and the idea of what temperature 
you have to keep to keep E. coli from growing, et cetera. 
Processed foods have more of a risk than those that are not 
processed, except for potential chemical contamination of 
pesticides, et cetera.
    I mean, what I am saying--I am familiar with all of that. I 
am not familiar with the last data set. I haven't done a study 
looking at the last set of recalls except for China, which is a 
lot of the FDA recalls are China.
    Mr. Kingston. Okay. Then let me ask the question maybe for 
both of you. Do you feel that there were politics involved in 
the approval of the USDA rule in 2006?
    Ms. Wallach. Yes.
    Mr. Kingston. And that was Ms. Hauter's statement also. I 
had wondered, since Dr. Raymond is here, to put him on the spot 
and the whole committee--I feel like Perry Mason. Why don't we 
pull him up here? And could we swear him in and ask him? You 
know, he is a freelance guy now. Could we ask him if he felt 
pressured? He might choose this moment to run, go outside, and 
make a phone call. Is that--can't do that?
    But I think it is important that we have--yeah, I think we 
should have him come back. Because I am not sure that that is 
an accurate statement. I am not sure that it is inaccurate. I 
will say that trade agreements do tend to have politics 
involved in them. However, I wouldn't think the USDA would put 
food safety secondary to trade for the myriad of reasons we 
have already discussed.
    But what I am also concerned with, Ms. Wallach, is, again, 
having voted against GATT, WTO, NAFTA, most favored nation 
status, you know, you now have cream in the coffee, and you 
can't separate it.
    And we are at $80 billion in imported food. Are we not 
looking backwards, are we not sticking our head in the sand by 
saying, let's put this band in place without letting the 
science rule the day and without letting the process move 
forward?
    And the reason why I say that is, if you look at CAFTA, 
which I think your groups were against--you have been critical 
of CAFTA, which is fine--but it has been in effect for 5 years, 
and not one of those countries has been approved to import food 
to the United States. Chile is still, I think, even though 
finally we had a trade agreement with them, only 2 years ago 
have they been approved for meat. And, so, you know, that is 
the process at work.
    Rosa had listed off a myriad of products which the FDA 
pulled off the shelf in February of 2009. Is that not the 
system at work? Is that not the healthy thing? Do you want to--
well, I don't know if you want to talk or not. You are welcome 
to. We are family here.
    Ms. Hauter. Okay, I will go.
    It is what basically is being caught. And a lot of the 
contaminants that are being caught may be things that make 
people sick today. But there are other contaminants that, on a 
long-term basis, could be very detrimental to people's health.
    And I think we need to look at our globalized food system 
generally and what it means. And it is a larger issue than just 
food coming into the country and safety issues. I mean, we were 
talking about small farmers earlier today and the impact of 
global food trade on small farmers, so that they are not able, 
basically, to compete or to get their product on the market. So 
we have most garlic, for instance, being produced in China.
    I mean, I think that there are a lot of reasons that we 
need to look at this system and that one of the reasons is food 
safety.
    Mr. Kingston. Reclaiming my time, that is not really what 
the issue is here. I mean, what you are talking about is their 
inability to compete. That is a trade issue; that is not a food 
safety issue.
    And, really, what I am trying to say is you and I lost on 
NAFTA and WTO, and we can't go back. Now, going forward, 
shouldn't we lift the ban? And, if there is a problem with USDA 
and politics, was that not settled in November of 2008?
    Ms. Hauter. Well, it is never too late to have the food 
safety regulations that we need and to look at a process that 
has been flawed from the beginning. And the equivalency process 
and the problems are a lot bigger than with China. And so, I 
don't think it is too late.
    And I do just want to say that I spoke with Dr. Raymond at 
that food safety meeting in China that I mentioned. He gave a 
speech, and he was rushing out of the room. And I said, ``Do 
you support Chinese chicken coming into the U.S.? Are we going 
to have Chinese processed chicken?'' And he was on his way to a 
poultry conference in Beijing, and he said, ``If I have 
anything to do with it.''
    And so, you know, I think there were politics, and I don't 
think that they were secret.
    Ms. Wallach. What we are talking about is going forward 
based on the current reality. And so, the reality is these 
trade agreements passed. We now have a much more globally 
integrated food sourcing system. But we don't have food safety 
systems and rules that actually are up to that reality.
    Mr. Kingston. Well, we actually do for FDA, I think you 
would agree. Or maybe you would say FDA is totally flawed and 
we shouldn't be importing. I mean, do you----
    Ms. Wallach. There have been some improvements made with 
the bill last year, but, no, they are not actually in a 
situation where one should feel particularly safe about their 
import safety. I mean, you either----
    Mr. Kingston. Well, let me ask you, on a scale of one to 
10, 10 being safe, where are the FDA products, in your 
estimation?
    Ms. Wallach. Before I do the math on that, because it 
depends on the product--for instance, some of the seafood I 
would say is like a one--what is the bottom? One? Zero? I mean, 
some of the seafood is horrifyingly not safe.
    And some of the other products, such as fruits and 
vegetables, I am less worried about.
    Mr. Kingston. So you would support a similar ban on the FDA 
products?
    Ms. Wallach. Until we come up with a system to ensure they 
are safe? Yes, of course.
    Mr. Kingston. So you feel like the USDA and FDA systems are 
so----
    Ms. Wallach. Dropping the ball.
    Mr. Kingston [continuing]. That lifting this ban--is that a 
delay tactic, or is that a, ``Hey, can we retool this?''
    Ms. Wallach. Well, you were out of the room, I think, when 
I proposed that what we need to do is basically revoke the 
current rule, get the actually USDA equivalence determination 
policy right----
    Mr. Kingston. Okay, let me ask you this----
    Ms. Wallach [continuing]. And then redo it to figure out.
    Mr. Kingston. But, now, you are a lawyer. Isn't that 
against GATT? I mean, wouldn't that open up an entire can of 
worms, in terms of trade agreements, if we said, ``Okay, we are 
going to change it''? I don't know.
    Ms. Wallach. What the WTO requires is that when a country 
petitions us, we go through a process to determine whether or 
not their system is equivalent, not defined, to our system. And 
then if we deny it without a basis, they can challenge that.
    But if we go through a new process now and we have a basis, 
we determine through the legitimate process this is not up to 
snuff, or if you want to do it, here is what you want to do. 
That process--and, again, the determination based on the 
criteria we set--is what our obligation is. So if we started 
over, that is not a trade violation. We basically have the 
obligation----
    Mr. Kingston. But we can't start all over with this ban in 
place.
    Ms. Wallach. Well, we have to get rid of the current 
equivalence determination. I mean, it was an abomination that 
it was made that way. And we need to start over and figure out 
if we can do one that is actually kosher, so to speak.
    Mr. Kingston. To mix meat terms.
    Ms. Hauter. Could I add one thing? China never actually 
certified any plants under the April 2006 rule. And they could 
have because the ban wasn't in effect until December of 2007.
    Ms. Wallach. One other thing on the looking forward 
versus----
    Mr. Kingston. Mr. Brosch? He has, kind of, been champing at 
the bit.
    Mr. Brosch. No, no, that is all right. I was just going to 
say, I am not sure that that point supports the idea of 
banning. I mean, what that basically says is that China didn't 
feel that it could certify any plants. And that seems to be 
part of the process----
    Mr. Kingston. That would be like the CAFTA countries.
    Mr. Brosch. Yeah. In fact, we have that situation----
    Ms. DeLauro. Why? Why couldn't they certify?
    Mr. Brosch. Well, they took a look at what they had, and 
they decided they wouldn't meet our standards, and they didn't 
certify them. If we have a plant----
    Ms. DeLauro. They thought they couldn't, but we thought 
they could. Is that right?
    Mr. Brosch. I don't think that had any--the question was 
whether they had a system in place which seemed to be 
equivalent. And the question is, that doesn't presuppose that 
you can certify a specific plant under that. You may look at 
the plant and say it is not up to snuff, we can't do that. And 
we have had lots of situations like that. There are two steps 
to this.
    Ms. DeLauro. So, because of that, I mean--excuse me, Jack--
we should then allow this to go--because they didn't feel that 
they were up to snuff or they didn't have a system in place to 
deal with this, then we should allow it to happen. We should 
allow it to happen. I mean, that is a little bizarre here.
    Mr. Brosch. Could I make one statement?
    Ms. DeLauro. Could I just make one statement? I don't 
understand, as well as that, this was a prelude. I mean, 
ultimately, as in my understanding--and I have a concern about 
this with regard to our domestic industry, and that is that 
China's ultimate goal is, really, they want to get a domestic 
Chinese poultry, the ability to export that into the United 
States.
    And, in fact, there was an equivalency determination based 
on slaughter, but they had to backtrack on that given the 
unbelievable conditions. But all of the press commentary at the 
time was that we were on our way to looking at--the process 
piece was a prelude to the domestic Chinese poultry coming into 
the United States, which would, in fact, mightily compete with 
our small producers, the way it has with our seafood industry.
    Mr. Kingston. Well, but that gets back to trade and 
deviates from safety. I mean, if they can compete against this 
garlic thing, it is not a safety question; that is a trade 
issue.
    But Ms. Wallach is now champing at the bit.
    Ms. Wallach. Just factually, both Honduras and Nicaragua 
are determined equivalent, I believe, for meat, not for 
poultry. But they are both on the list. So those are your CAFTA 
countries. They are actually determined equivalent.
    Mr. Kingston. Then why aren't they importing?
    Ms. Wallach. That would be a Tony question, about what in 
particular. He is a meat man.
    But on the question going forward versus looking back, I 
mean, we have a system of rules; that is the WTO's non-tariff 
barrier rules. We have now had 15 years to see how they work. 
And even when this was negotiated, I don't think anyone 
contemplated we would be as integrated as we are now.
    So taking the incoming data of how it is working, different 
countries have done different things to make it so that they 
can have the benefits of trade and still have safety. So you 
have, for instance, the European Union and Japan doing their 
in-site inspection thing. You have different countries that 
have just said, ``We can't afford it; we are not going to 
certify as equivalent.'' There are a lot of countries that have 
denied equivalence determinations.
    We need to keep up with the times.
    Mr. Kingston. So if we had, say, an amendment in committee 
that said we would have a system similar to Japan, you would be 
comfortable with it?
    Ms. Wallach. I would like to look at specifically what you 
had in mind with the details, but I would suspect we would be a 
lot more happy than that than our somewhat what appears to be a 
blinded dartboard approach.
    Mr. Kingston. I know I am way over.
    Ms. DeLauro. No, we all are.
    Mr. Hinchey. And then Mrs. Emerson.
    Mr. Hinchey. Rosa, thank you very much for--this has been a 
fascinating experience. And it is fascinating primarily because 
it is so important. I mean, it is something that is terribly 
significant, and important and significant to all the people of 
our country and a lot of other people around the world. So it 
is important for us to try to understand this better and to do 
whatever we can to make it more effective.
    We are importing and exporting food materials. Is there any 
clear understanding of the rationale between exports and 
imports of specific elements of the food? In other words, we 
are importing poultry, but we are exporting poultry. Are we 
exporting more than we are importing, or is it the other way 
around?
    Mr. Brosch. Well, I can answer that. We are the largest 
exporter of poultry in the world. We export about 3.3 million 
tons a year.
    Mr. Hinchey. Yes, that is what I thought. So the fact of 
the matter is that we don't really have an internal need to 
export poultry. We produce all the poultry we need.
    Ms. Wallach. To import it.
    Mr. Hinchey. And more, actually. We are exporting a lot of 
it.
    So much of these trade relationships that we have and these 
so-called free trade agreements that have been put into play 
over the course of years, particularly the most recent, fairly 
recent ones, over the last couple of decades, say, for example, 
are a little longer even, are focused on the level of profits 
that can be made by the people who are engaged in these trade 
operations.
    So the trade agreements that we have are not really trade 
agreements any longer, even if they ever were. They are really 
investment agreements now. They are so-called trade agreements 
which encouraged the investment of finances out of the United 
States in order to maximize the profits that can be made by the 
importation--manufacture or creation, in some way, and then 
importation of those materials from those other countries here 
into the United States.
    So, apparently, based upon this conversation here and your 
brilliant answers to these questions and intriguing answers to 
these questions, it is pretty obvious that that is the same 
kind of thing that is happening here.
    Who are the major corporations that are importing food from 
other countries, particularly now, say, China? What are the 
names of the major corporations that are involved in the 
importation of food, poultry and other food, from China to the 
United States?
    Ms. Wallach. Well, right now, no poultry is being imported 
from China.
    Mr. Hinchey. Pardon me?
    Ms. Wallach. Right now, no poultry is being imported from 
China, thanks to the intervention of the committee.
    Mr. Hinchey. Okay. Who was doing it before it was excluded?
    Ms. Wallach. The firms that I understand were interested in 
having this capacity and were looking towards China included 
Perdue and Tysons. Those were the two U.S. companies who were 
seeking this equivalence determination for this particular 
commodity in that particular country.
    If you look more broadly, you will see that Cargill, Archer 
Daniels Midland, and a couple of other of the major processors 
have used the trade agreements to relocate processing offshore 
to lower environmental health, OSHA-type standards and lower 
wages and have set up in a variety of other countries----
    Mr. Hinchey. Yes.
    Ms. Wallach [continuing]. To send back to the U.S. market.
    Mr. Hinchey. Yeah. Well, that is exactly the point that I 
am making. We are dealing with a situation here that is not in 
the best interests of the people of the United States or people 
of other countries, as well. It is in the best interest of 
corporate profits for people who are in the process of 
manipulating these trade agreements for their own benefits. 
That is basically what we are dealing with here.
    What are the food imports that are coming in from China 
right now? Any?
    Ms. Hauter. There is a wide range, a long list----
    Mr. Hinchey. Long list. Okay, who are the corporations that 
are involved in that importation of those long list of foods 
from China? Do you know offhand?
    Ms. Hauter. Not offhand. Major seafood--we can get that 
list to you.
    Mr. Hinchey. Okay. Okay. I would like to see it, because 
that seems to me what is really happening here. And it is 
intriguing why our country is allowing or even encouraging 
these kinds of things to take place.
    Ms. Wallach. I think when you look at the trade agreements, 
there are different sets of rules to consider. The investment 
rules have to do with those investment and competition 
questions and offshoring. But then, in addition, the sanitary 
and phytosanitary rules have to do with the food safety issue. 
So, even as Mr. Kingston described, you separate out what is 
the trade issue, you also have these food safety rules in the 
trade agreements that limit your domestic food safety 
enforcement capacity and standards.
    So not only do you have the investment rules taking away a 
lot of the risks and costs that used to be associated with 
relocating to a poor country, but then you reduce the import 
safety you can apply, so that even if you weren't looking at 
the economic issue, you now have also the penalty on the safety 
side, which, from a U.S. producer perspective, is pretty 
catastrophic.
    Because if you are the actual grower, the farmer, the 
rancher, as compared to the agribusiness company who is the 
processor, and you actually are going to produce, you know, for 
instance, the milk, when there is a crisis someplace 
internationally, it is the desire and the demand for the actual 
commodity that crashes.
    And so it is the actual producer that gets clobbered by 
what is sometimes a greedy investment decision by the 
processing firm that then exploits the holes in the rules that 
they helped write in the trade agreement that limit the ability 
to implement the same domestic standards on imports.
    Mr. Hinchey. Yes. Exactly. Right.
    Ms. Hauter. From USDA's own reports on value of U.S. food 
imports from China by category, juices and products of fruits 
and vegetables are 24 percent. In fact, most apple juice is now 
produced in China, not in the United States.
    Food ingredients and preparations, 8 percent; fruits, 
vegetables, and nuts, 10 percent; and fish and shellfish 
imports account for 41 percent of value of food imported from 
China.
    And Food & Water Watch did a report on food safety 
violations of fish, where we found that only 1.3 percent of 
fish coming from China, which is about 32 percent of the fish 
that we get into this country, actually was inspected.
    Mr. Hinchey. Well, again, very interesting. And this is 
something, obviously, that we have to deal with, both from the 
perspective of the agricultural operation here and the way in 
which it interacts and interrelates and imports from other 
countries and the Food and Drug Administration and other 
aspects of the responsibilities of the Federal Government 
overseeing these kinds of operations and activities, which are 
not being handled effectively. They are being handled very 
poorly.
    I mean, one of the things that you said in response to a 
question was that a lot of other countries take much better 
care and caution in inspecting the quality of food that is 
imported into their countries, whereas the importers here of 
food into our country are not engaging in that effectively. 
They don't seem to be too concerned about it. Their major 
concern is what is the maximization of the profits and not the 
maximization of the quality of the materials that are being 
imported.
    Go ahead.
    Ms. Hauter. Sir, I wanted to add one other point from 
another USDA report on foreign agriculture service, and they 
are talking about the status of importing poultry. And they say 
that the regulatory agency in China states that it is not 
economical to do this. ``Rising international broiler prices 
and international transportation costs, combined with the 
unfavorable exchange rate, make re-exports uncompetitive. The 
issue of cooked poultry exports to the U.S. remain's China's 
top market access priority for agriculture.''
    Mr. Hinchey. Could I ask--or has it run out? Have I run 
out?
    Ms. DeLauro. Yes, it has. Unfortunately we didn't start the 
clock, Maurice, but you did go over.
    Mr. Hinchey. But the clock varies from time to time, I see.
    Ms. DeLauro. No, the clock has been no guarantee. That is 
why I let you just let it go.
    Mrs. Emerson.
    Mrs. Emerson. Madam Chair, can I yield a minute--no, a 
second of my time--no, a couple seconds of my time to Maurice?
    I just want to answer your question about what companies 
import Chinese products. Well, here you have smoked oysters, 
Haddon House Food Products, Inc., in Medford, New Jersey. Here 
are some nice smoked oysters for you.
    Oh, and here are Harris Teeter mandarin oranges. You missed 
this at the beginning, so I thought I should show you. Harris 
Teeter oranges, these are imported from China by Harris Teeter.
    Mr. Hinchey. I am not interested in it from the point of 
view of being able to purchase it myself, you know.
    Mrs. Emerson. Here is JFC International, Inc. This is dried 
seaweed. This is another Harris Teeter product. Oh, and then 
the best one. The best one are cooked noodles in who knows what 
kind of water.
    Simply Asia, and this company is called Simply Asia Foods, 
Inc, Union City Boulevard, Union City, California. So it is a 
lot of little companies.
    Mr. Hinchey. I wonder who those little companies are 
connected to.
    Mrs. Emerson. Harris Teeter probably does it on its own and 
other generic brands of groceries.
    Oh, here is yet another one. Excuse me. Oh, this is just 
Harris Teeter. But, anyway, I just wanted to point out that I 
think it is probably fairly prolific. None of those are chicken 
products, by the way. There is some frozen shrimp and squid and 
octopus in that bag, too, but it is defrosted. I am not going 
to get it out. People may get too hungry. It is lunchtime.
    Mr. Brosch. Just mention, Mrs. Emerson, that in the chicken 
import and export trade there are lots of small niche 
businesses that are involved in the import and export business. 
It is not dominated by the large companies. They are largely 
the producers and processors, and most of import export is by 
smaller niche companies.
    Mrs. Emerson. Yes, I was going to make that point.
    Regardless, you may not want to eat that stuff. I don't, 
but that is beside the point. But just to answer your question, 
since the bag of goodies was sitting here next to me, I thought 
I couldn't resist.
    Mr. Hinchey. I am not sure that is an answer to the 
questions that I was asking, but I think it is an interesting 
set of circumstances where you have a lot of small companies 
that are engaged in this. One of the questions is, who are 
these small companies, who are they associated with, what 
corporations are they entangled with and in what way, and what 
are the actual import-export circumstances that are going on?
    All of these things are very important. I thank you for 
bringing up the little packages, but there is an awful lot more 
information that has to come out here.
    Mrs. Emerson. I am not disagreeing, but I am going to ask 
my question now. I am going to ask my question now, because I 
probably will run into yellow time here.
    My first question goes to you, Ms. Wallach, and I apologize 
for having been gone for 30 minutes, but I had something else I 
had to do.
    Obviously, you take aim in your testimony at the 
equivalency requirements in trade agreements and also are 
critical of USDA's administration of this policy, and you 
recommend that we act to require that only food that meets our 
safety standards is eligible for sale in the United States. And 
I think that appears to me like a goal of requiring other 
nations to harmonize their regulations with ours.
    I do want to note that HACCP, just for example, when they 
came into effect in 1996 they had already been required in 
Europe, in the European seafood industry. And when they, the 
Europeans, adopted those regulations, it was even difficult for 
them to determine what U.S. equivalency would be and what the 
competent U.S. entity would be, whether it is Food and Drug 
Administration or USDA with whom they should negotiate. So 
while we have a safe food supply, we can't claim to possess or 
quickly implement all the best food safety ideas, and a 
diversity of approaches probably isn't bad, because we really 
care about the results at the end of the day.
    You do seem to raise important concerns regarding USDA's 
interpretation and implementation of equivalency policy. It is 
very hard to see how meat samples that are gathered by private 
company employees could be as reliable as those gathered by 
government employees or how procedures changed from those 
originally evaluated can apparently be grandfathered in. Are 
these problems that could, even if you don't believe ideally, 
could they be addressed by tightening of administration policy, 
number one?
    And I know, for example, that you mentioned--I was told 
that while I was gone that you mentioned to Mr. Latham that our 
phytosanitary agreements do not require China to choose 
inspection locations. So could that also be fixed 
administratively? And are you aware of any upcoming decisions 
we should watch for that may provide insight into the way USDA 
will interpret the equivalency standard?
    Ms. Wallach. I think the way forward is to do a rulemaking 
to establish a new FSIS policy for determining equivalence. I 
think that there are problems with the concept of equivalence. 
It has limits, as I lay out in my testimony, overall that 
cannot be overcome, even with the best policy.
    But it is also the case that we can get a heck of a lot 
closer to safe by having the right equivalence policy, which is 
why it is important to do a new policy if we are going to do 
equivalence determination, again, knowing that there are limits 
to what under that system you can do.
    One of the main benefit of pieces of policy space that 
exists is in the WTO sanitary and phytosanitary agreement there 
is no definition of equivalence. There is a requirement that in 
fact that the countries get to decide if the exporting country 
standards meet their standards, which is why you have this huge 
diversity of how it has been implemented by other countries. 
And USDA has been a little schizophrenic about this question, 
which is why we need new rulemaking.
    In their report on the concept of equivalence, USDA, there 
is a FSIS report that says meat and poultry and egg products 
exported from another nation must meet all safety standards 
applied to foods produced in the United States. That is what 
they say is the definition of equivalence.
    But in the actual regulation that established the current 
policy they say, the United States can no longer require 
countries wishing to export meat and poultry products to have 
inspection systems that are at least as safe as those of the 
U.S.
    Those are direct contradictions, and I would say the new 
rule has to have the first version be the version.
    Then the question becomes, if you look at the level of 
safety, the inspection system, the system of oversight, and the 
access to information in the system, are each of those systems 
delivering the level that is the U.S. level? And that is where 
we have had a major failure. Because we have had just clear--
like, for instance, the U.S. standard requires continuous 
inspection, and we have held countries equivalent over and over 
and over, even though they don't have continuous inspection.
    We require government inspectors, not company inspectors. 
We have allowed countries to stay equivalent. These are not 
like close, like hmm, is it the right pathogen test to do it 
this way or that way? These are just really obvious.
    So some of the things we have to do in a new regulation as 
well as making clear that what we are really looking for is 
there may be other ways to really be equal to us, that you 
don't have to do it exactly the same way but that you really 
have to get to our level, which is not the current system.
    In addition, we need to do things like have the equivalence 
determinations expire so that actually they get redone and 
there is a new rulemaking to make sure. To have a system 
basically when there are audits which need to be more frequent 
and funded. That when an audit fails the equivalence 
determination is suspended, the right to import is pulled until 
it gets fixed. The country then can say, come back, make sure 
it is fixed. Once it is fixed, it can be reinstated.
    Under the current system, audit after audit after audit 
finds the most horrific things; and not only is the equivalence 
not suspended but the right to actually export is not changed. 
Having the rule be that the U.S. inspectors decide which 
plants, once you have the system, then you still have the U.S. 
certifying particular plants, what the Japanese and EU are 
doing. Having more on-sight inspection, so it is not just an 
annual audit, please God, but on a regular basis you have 
inspectors going through the plants. Those are all ways you can 
certainly improve the current system.
    And as well having all these rulemakings on the record so 
that each country when they change a rule you have a new notice 
and comment, which, by the way, is what NHTSA does. The NHTSA 
process and also the substance, which explicitly says they give 
priority, actually, their exception to equal to is higher than, 
so that they look for an upward harmonization. So if another 
country is doing it better, smarter, higher standards, then we 
can accept that. And, in fact, the way that their rulemaking is 
done it calls on us to think about harmonizing to the other 
country. So it is a list-up system, and it is all done on the 
record. So, procedurally, it is more inclusive.
    Mrs. Emerson. You told Jack that you would be a little bit 
more comfortable with Japan's equivalency. Do you feel the same 
way about the EU?
    Ms. Wallach. The reason why I hedged is because I don't 
know on paper what it requires. What I know is what the reports 
are of how it is being implemented in China.
    I could review both of those systems and get back to you 
about what the actual system says. I just hadn't done that 
homework.
    Mrs. Emerson. If you don't mind.
    Ms. Wallach. I am happy to look it up.
    And, Mr. Kingston, Honduras and Nicaragua are importing 
meat under their equivalence determination. The meat man has 
informed us.
    Mr. Kingston. Any problems with it? Any illnesses?
    Mr. Corbo. Not that we know of.
    Mrs. Emerson. I am at red.
    Ms. DeLauro. I want to thank Mrs. Emerson.
    I just wanted to say that the problems are worldwide. And, 
Mrs. Emerson, there was an FSIS inspection in 2003 of the 
Canadian system. The FSIS found it so bad they told the 
Secretary that public health was at risk. They recommended an 
enforcement review. The review was deferred by the Secretary, 
that FSIS work with the Canadians.
    Mrs. Emerson. Referred?
    Ms. DeLauro. Deferred, I am sorry. So that FSIS went back 
in 2005 and they found largely the same problems.
    I will get the information to you on the Canadian issue, 
because I think it is important. This is not a singling out a 
place because----
    Ms. Wallach. The two Inspector General reports I would 
refer to your attention also that goes to the whole system.
    Mrs. Emerson. Thank you.
    Ms. DeLauro. Mr. Farr.
    Mr. Farr. Thank you very much, Madam Chairman.
    This is a beautiful can of worms you have opened up. 
Listening to this I felt like we were talking, debating the 
Nuclear Arms Inspection Treaty, my guys will inspect your guys. 
And it seems to me that this raises so many questions that are 
worthwhile raised, and I do think we probably need to revisit 
it all.
    You have to keep in mind that all agriculture is grown 
somewhere or all poultry or cattle are raised somewhere. In 
most cases, that is in a county or in a State, not just in a 
country; and each of those regions have their own regulations.
    I was thinking about something we don't grow in our 
country, so we don't have that inspection process. But when you 
think about labeling fair trade coffee, it is not really much 
of an enforceable label. It is supposedly coffee that is grown 
in ecologically sensitive ways. It is supposed to pay their--
and coffee growers are small, little, independent farms, just 
from my experience of being a Peace Corps volunteer in Latin 
America and Colombia where they grow a lot of coffee. It is 
supposed to pay the wages and benefits. That is a label that we 
all accept in this country.
    But we also have set up this kind of different process for 
food, because we put it in the Federal Government as a separate 
inspection for meat and poultry. We don't have a Federal 
inspection for everything else. This is the only specialized 
inspection we have.
    And so, therefore, if you are going to get into it--and I 
have a lot of cattle operators now who want to grow and serve 
their own beef, just like they say their neighbors can grow 
grapes and process them and put them in a bottle and put the 
label on the bottle. It is very difficult to do that, to put it 
on meat, saying this is Jack Barion Ranch's grass-fed cattle. 
And they want to do that because of all these issues on animal 
safety. Yet to get it into an inspection process and 
slaughtered in a slaughterhouse and keep your label on it 
versus trying to get a meat inspector to come down and watch a 
small slaughter, it is just not happening.
    So this is a whole market that I know Marcy is very 
interested in, in how do we develop this market on our own? So 
I think the difficulty in here is we get unintended 
consequences as we try to build the perfect sanitized system.
    Fresh produce, in my area, the most fresh produce in the 
world, Salinas Valley, most of it lettuce, you don't have a 
kill step with lettuce. And what you have had is recalls on E. 
coli contamination, salmonella contamination. And guess what is 
happening? What we are seeing is that even with the best 
management practices in the world on how you grow this stuff 
safely you still have now the new sort of private sector coming 
in with their corporate risk managers saying to growers, you 
have to grow to our standards, have nothing to do with science. 
And growers are having to kill every rodent, which is now 
hurting the wildlife population, particularly the raptors. And 
what they are finding is they are having to use more pesticides 
and herbicides because their integrated pest management systems 
are destroyed by these mandates from corporate, not from 
Federal. And yet if you are going to sell lettuce to 
McDonald's, it buys a lot of lettuce, you want to make sure 
that you meet their standards.
    And I think when you get into other countries it gets more 
difficult. Because equivalency is supposed to be that you are 
as good as we are, and that is why we allow you to import 
stuff.
    I have dealt with how we in California put inspectors in 
Hawaii. When you get on a plane in Hawaii, you have to go 
through an ag inspector. California pays for that, because we 
don't want those medflies coming back to California.
    So we have done this stuff where you put our people in 
other countries. They put their own inspectors on the ground in 
Holland. And, therefore, they know they are not going to get 
contamination coming into Japan. We are not even getting in.
    When you get into trying to do trade, what happens if a 
pest--like we have a glassy-winged sharpshooter. You cannot 
move that to any other State, can't move it outside the 
country, because we have banned anything coming in.
    So this is really what it is, is a can of worms. How do you 
set these national standards, which I do think we ought to 
have, but still not put it away so that the small farmer--I 
think if you have these health standards that we are going to 
require for selling produce in a grocery store apply to the 
produce that is in the farmers market, you are going to kill 
farmers markets, because they are not going to be able to meet 
those standards.
    You know, I don't think we have had many illnesses because 
people have bought food from farmers markets.
    So I would really be interested. Ms. Wallach, you said that 
in your paper here--I noticed the sentence that WTO equivalency 
rule shows U.S. law and agency regulations and practices must 
change, as well as trade agreement constraints on food safety. 
It is not only a matter of the agency's doing better but 
changes to underlying policies.
    How do we meet those standards so that indeed--you know, we 
can't just say--it is interesting. Why do we export so much 
poultry but not allow anybody to import? Because that is the 
trade deal. We are not going to allow our stuff into their 
country unless we take stuff from their country. That is just a 
fair deal.
    Now, they ought to be traded on equivalent standards. That 
is for sure. And if you are a country that is struggling, how--
the laws in Mexico on food inspection are great, but the 
infrastructure for that, trying to hire people with those kinds 
of degrees and pay them the salaries they pay them in their 
Federal workforce or in their state workforce isn't happening. 
And so there is stuff done under the table.
    So I am really concerned about do we sort of have to 
develop a training course and equivalency standard for 
professional ethics and professional standards and have kind of 
the world meet that if we are going it to import from those 
countries? How do we get there from here? It is one thing to 
say, let's just change these laws, but, as you pointed out, Ms. 
Wallach, these countries have some good laws; they just don't 
have the ability to enforce them. How do we close that missing 
gap?
    Ms. Wallach. Well, I think one of the best ways to try and 
not have the unintended consequences problems is--and there is 
three levels of change. There is the trade agreements, there is 
statutes, and the regulations.
    On the regulatory level, which gets to coming up with a new 
system for what the equivalence policy should be for USDA, 
doing it as an on the record rulemaking at least provides an 
opportunity for all the potentially interested parties to get 
their two cents in. As we saw with the organic standard, 
frequently tens of thousands of people get their two cents in. 
So that is a way where, unintentionally, some standard could be 
set that somebody who is on the ground producing would get in a 
comment that would be important. So that is one of the 
procedural questions.
    On the question of the difference in the infrastructure and 
the funding, that is part of what a new U.S. equivalence policy 
has to take into consideration. Right now, under the current 
policy, they do what is called a paper audit. And so there are 
some splendid systems. They are just not enforced. They are 
beautifully written.
    The problem is there are only a few plant audits, for 
instance, even with Canada where things are enforced. But we 
did 4 out of 200 plants we looked at to see actually what was 
on paper, what was on going on in the plants. With China, you 
saw there were some 25 plus plants, considering there were 
actually 6 places that were looked at.
    So having a system where we actually, in determining not 
just what is on paper but what is happening, take into account 
is there a capacity.
    And, number three, having our inspectors certifying what 
plants means that if we are saying these three plants are the 
ones, then that is where the resources go.
    Mr. Farr. Do they do that here? For example, when they come 
to buy, foreign countries come to our country, do they come in 
and inspect our plants and select which ones so that their 
country decides, EU or Japan?
    Ms. Wallach. It depends on the country. EU and Japan do go 
look at our plants.
    Mr. Farr. And they see whether those plants meet their 
standards.
    Ms. Hauter. And Russia does.
    Ms. Wallach. I don't know about Russia. But EU and Japan, 
yes, they pick our plants.
    There is no violation of any trade agreement obligation. It 
is our bad past policy that explicitly said we would no longer 
do that. It is in the rule. So that is just one very clear 
thing we should change.
    Mrs. Emerson. Will the gentleman yield?
    You asked the question of how often they come to inspect 
our plants?
    Ms. Wallach. That I don't know. I don't know. I can try and 
find that out.
    Mr. Farr. But what I am pointing out is there is also now 
another movement which is the private sector, this idea of we 
will have our own corporate inspections outside; we are not 
trusting government enough. And that is dangerous. Because then 
you are setting corporate standards that have no good science 
behind them, and you are going to ruin a lot of other--as I 
have seen in our area, you are essentially running in conflict 
with all of the best management practices you are taught about 
trying to grow things in an open environment.
    Mrs. Emerson. Sam, that is a little bit of a 
generalization. We don't know. Because there is liability that 
those companies, if they import bad stuff, so surely they have 
got to have some standards.
    Mr. Farr. Sure. But when they are coming and telling the 
growers in California, which probably has the toughest 
standards in the Nation on everything--pesticides, herbicides, 
farm worker practices, OSHA standards, all of that--that you 
have got to go kill/poison all of the rodents--and one Federal 
inspector was so shocked when they arrived in the Salinas 
Valley, saying, oh, my God, birds fly over these crops; we will 
have to prevent that.
    I mean, that is the kind of reaction that people are having 
now when they find contamination of E. coli and salmonella is 
because these products don't have a kill step. I am pointing 
out it is all kind of convoluted, but it gets very complicated 
when you get down to the grower level of how you are going to 
meet these national or Federal or international standards that 
aren't practical.
    Ms. Wallach. The regulatory process I think can be dealt 
with that way.
    On the statutory level, in my testimony I recommend we go 
back to an equal to standard. I don't think we had to change 
the statute. But even if we don't, the agency can basically 
have a rule that requires that, as you put it, you are showing 
their stuff is up to our standards.
    And then the third thing is the trade agreements. There are 
issues beyond equivalence where the trade agreement sanitary, 
phytosanitary, and technical barriers to trade chapters rules 
actually do have constraints, not just on imported food safety 
but products, toys, other products; and those constraints were 
put in place under this notion of basically facilitation of 
trade volume over everything else. And that is out of balance.
    Mr. Farr. Do you have a paper on that?
    Ms. Wallach. I do have a paper on that.
    And, moreover, you were a cosponsor last year of the trade 
act, the Trade Reform Accountability Development and Employment 
Act, that calls for renegotiation of the food safety and 
product standards language so that you basically have the 
balance. So we get the benefits of trade but that we don't 
sacrifice the necessary safety.
    The basic principle of it is, if doesn't discriminate, 
i.e., as long as you trade the foreign and the domestic good 
the same, it is not a trade issue. And we shouldn't have trade 
agreements setting a subjective limit on safety. The question 
is discrimination, and then the question is done.
    And so that is the same issue with equivalence. If we had 
everyone treated the same, we wouldn't really have a trade 
issue.
    So that bill has been introduced again this year, and there 
are 106 cosponsors, so it may have the hope of a review of the 
actual trade agreements in the renegotiations.
    Mr. Farr. Does that answer all these questions? I am not 
sure it does. We will talk about that later.
    Ms. DeLauro. Marcy Kaptur.
    Ms. Kaptur. Thank you, Madam Chair, for a very, very 
interesting hearing. I had two other events I had to be at 
before this one, so I am sorry I couldn't be here at the 
beginning. But I have read your testimony, and we thank you for 
being here.
    What runs through my mind is how, especially in the food 
arena, when something is said exactly the opposite actually 
occurs. So, for example, when we had the fight on labeling, and 
rather than labeling we get deceptions. So you will get a label 
that says, no cholesterol, real big letters. And then you look 
at the back, high in saturated fats. There it is, you know, 40 
percent. How you get a 60 percent fat content in chicken pie, I 
can't figure out how you can get it so filled with saturated 
fat.
    You think of the term NAFTA, North American Free Trade 
Agreement. It is anything but free. We have had over a trillion 
dollars of trade deficit racked up with both Mexico and Canada 
since its start, a trillion dollars. So many lost jobs, but we 
call it free. It isn't free. It is very, very expensive. That 
doesn't say anything about what has happened in Mexico or 
Canada.
    We talked about the word equivalency. It is actually not 
equivalent.
    So what you have to do when you get into the food arena is, 
whatever they say, just reverse it; and then you will begin to 
understand the truth. You will begin get to the truth.
    I grew up in a store, our family store. And our father, who 
was a small businessman, bless his soul, called our store 
Supreme Market. We used to wrap up the meat; and he would put 
his label on there, Supreme Market, address, name, phone 
number, everything. We were so proud of everything that was 
made there.
    And as I have watched what has happened over the period of 
time, I think what is missing in the food sector is true ethics 
accountability and the former American ethic, going back to the 
founding of the Republic, of great respect for the earth and 
its productive abilities. You can walk around these buildings 
and see women holding shafts of wheat, and as it became a more 
mechanized society the ethic was missing. Something has 
happened, and it is very serious.
    And when I look at this food safety issue and the 
importation issue, what you generally get is people don't want 
labels. They don't want to know.
    Those in charge of the food system today--and small grocers 
like our father were drummed out of business because of 
contracts that Maurice somewhat referenced--this is a true 
story--where dad used to go into Swift and Armor in those days, 
and I would go with him, and the man who was in the cooler 
would say you can't have those anymore for your store because 
it was prime meat because the supermarkets have bought the 
whole case. So you can only have the choice meat, not the prime 
meat.
    I remember our father's face, probably one reason I am in 
Congress today, because I lived the inequity in our family. And 
thank God for the man in the case who said to our dad, hey, 
Kappy, it is okay. I will switch carcasses. They won't know 
anyway. Our dad knew what the best was.
    But something has happened with the ethics of food, and it 
goes beyond any one regulation. It is the reason that as we 
talk about inspection somehow the mechanized system has made us 
forget our values. And I say that because of many of the 
interests represented in the audience today. We thank those who 
want to call us to a higher ethic.
    And maybe it is a restoration of the original ethic of 
stewardship and a respect for the earth and respect for people 
who produce our food--and I don't want to get too religious, 
but in the denomination I am a member of the symbol of a table 
and breaking bread is very important. There is even a very 
serious religious element to all of this that somehow when we 
allow contaminated goods to flow to anyone's table--and the 
more poor you are the more likely it is that contamination will 
flow to you--something is really wrong inside the system. No 
matter how profitable it is, if the ethics are missing, we have 
changed as a country, and it is not good.
    So my question really is to Mr. Brosch. It is my 
understanding that if a foreign food processor of meat in 
Mexico is sending goods here--we were told by USDA 11 
companies, I guess, do that down there, 11 different plants--
that we send our inspectors in there because there have been 
problems with Mexico and then those goods flow here. My 
question is, do you know who pays for the inspectors? Is there 
a fee on the importer to pay for those inspectors or do the 
taxpayers pay for that? I am very interested in that.
    Mr. Brosch. I think this is paid by the taxpayer. I don't 
believe this is a fee for service, but that is in the red meat 
area. There is no poultry coming from Mexico, and I am more 
familiar with the poultry situation.
    Ms. Kaptur. Okay. I am concerned about equity here and the 
way in which we handle this whole food movement back and forth.
    In the area of invasive species, though that is not the 
subject of today's meeting, but when we get contamination in 
this country, there is no international--this goes to my 
question, my second question, which is, if you looked at the 
amount of money we as taxpayers are having to pay for the 
mistakes, environmental mistakes happening inside this 
country--take my district, 10 percent--we have more trees than 
any other area of Ohio. We are going to lose 10 percent of our 
tree cover, like that, from the emerald ash borer. And who is 
responsible? Nobody, nobody. So where does the bill get placed? 
On the taxpayer. I say that is wrong.
    So my question really is, what is the international claims 
court or torts court? Where do you take the importer, where do 
you take the exporter to get--I want my money back. For every 
tree, for all the money I have had to appropriate, for all the 
city governments who have to hire people to cut down and 
replant these trees, where do I get justice in this system?
    For the kids who got sick in Michigan eating those 
strawberries in those little yogurt things or Sundaes that they 
were eating up there when that came in from Mexico and was 
packaged in Los Angeles, who went to court? Where is the court 
case? None. No ethics. No responsibility. No justice. What kind 
of a system is this?
    So my question to you is, you are here today on trade 
agreements and equivalency standards. But how do we get ahold 
of the whole enchilada and control those who are doing this at 
our borders?
    Jo Ann held up those products there. All right. So if 
something goes wrong--nothing ever went wrong in our dad's 
store; nobody ever got sick. But if they had, they knew exactly 
where they got it.
    Now what is the system that we have today to assure that 
quality and that justice? Whether it is food or whether it 
might be invasive species, what is the mechanism 
internationally where we can get justice? Because it doesn't 
exist right now.
    Ms. Hauter. I don't think we have one.
    Ms. Kaptur. We don't have one. Madam Chair, we are left 
with this regulatory--this Swiss cheese regulatory mechanism 
that doesn't work and putting the burden on the taxpayer to pay 
for everything. It is a whacky, unjust system.
    Ms. DeLauro. Ms. Hauter, do you want to respond?
    Ms. Hauter. I was going to respond generally.
    I think it is beyond the scope of this panel today, but I 
think we really need to do a complete assessment of our food 
system, from the way that the Farm Bill impacts small farmers, 
the concentration that is present in this country, the way that 
small farmers really can't compete, even though we hear in 
their name that our agricultural policies are really all about 
helping family farmers. And I think that we need to promote the 
types of policies that are going to allow a more local food 
system. I know Congressman Farr mentioned someone in his 
district who is trying to slaughter on a very local basis.
    We have recently released a report on this issue where we 
assess the USDA regulations, and it is very difficult for any 
small producer to compete, whether they are trying to produce 
meat, cheese, or vegetables. And so what we really need is a 
shake-up and to really look holistically at the system.
    Now, I don't have an answer for how that is going to 
happen, but that is the only way that we are going to 
straighten out our food safety system.
    Ms. Kaptur. If you have proposals along those lines that 
you could share, we would be very interested in your ideas.
    Ms. Hauter. We would be happy to do so.
    Ms. Wallach. The only thing that I would add is that not 
only isn't there such a system, but, in fact, the existing 
enforceable international government system is the trade 
agreements, which set an explicit ceiling on many of those 
issues of consumer justice.
    So not that I want to give the invasive species issue, get 
your blood boiling more, but in fact certain actions that the 
United States has taken to try and control various invasive 
species have been threatened with WTO attacks under the 
sanitary and phytosanitary agreement arguing that they are not 
the least trade-restrictive means. And particularly the Asian 
long-horned beetle, we were going to require a particular kind 
of fumigation and temperature treatment of the pallets that 
come in the wood of the shipping pallets coming from Asia. And 
we got a demarche, which is the first step to a WTO challenge, 
from China on behalf of Hong Kong, threatening that that wasn't 
the least trade restrictive way to try and limit the invasive 
species infestation.
    And, in fact, our own USDA or APHIS I think had done the 
sort of testing of what could you do to allow the trade to 
continue but not have the pallets causes a serious problem and 
decided that was not just the least straight, that was the only 
way. It had to be a certain temperature, and it had to be 
zapped by a certain chemical. So we never implemented that. It 
was a threat, that we took the threat seriously and didn't want 
the challenge. So----
    Ms. DeLauro. Mr. Brosch, do you want comment?
    Mr. Brosch. Yeah, we can't do this here today.
    There have been a lot of statements about what the sanitary 
and phytosanitary agreement says and doesn't say. I happen to 
be one of the two U.S. negotiators of this agreement, was 
involved in it for 6 years. I would just like to state for the 
record that I wouldn't agree with a lot of things that have 
been said about that. If we had a longer time and a different 
thing, we could have a debate on that. I know we don't have 
that time.
    But I don't believe that we ever intended during the 
negotiation to put a ceiling on the level of safety that any 
country could choose; and, in fact, it says that explicitly in 
the agreement. It says that any country can choose its 
appropriate level of sanitary or phytosanitary protection. And 
that is the core of that agreement. So I would have to disagree 
with that. I don't think that is true.
    With respect to people threatening to sue us on least 
restrictive means, you know, as I say as a lawyer to my friends 
all the time who are worried about lawsuits, you can always be 
sued. The question is whether somebody can beat you or not.
    If that is the question, if in fact the facts are as 
represented there, I don't think the United States should be 
afraid if somebody is threatening to sue. If we do get sued, we 
can defend that; and we have defended cases. I have personally 
defended cases for the United States.
    The last thing I would like to say is there have been a lot 
of things said about conspiracies or deals done within the 
Department to trade safety for food. And I was not at the 
Department in 2006 when this occurred, but I was at the 
Department between 1989 and 1999 and served under about five 
Secretaries of Agriculture and a number of under secretaries, 
served directly with them and was a negotiator in the Uruguay 
Round on agriculture and the SBS agreement and the NAFTA.
    I can tell you, Ms. Chairman--I would say this under oath--
I was never once in a meeting where anyone suggested that we 
should trade benefit for safety. I have never heard that during 
my time in the Government. I just want to say for the good 
people at USDA who do their job every day, I think that that 
is, at least in my experience, not a correct assessment of the 
way they go about their business.
    Ms. Wallach. I just want to address the ceiling/no floor 
issue, because it can be addressed on two different grounds.
    First of all, the only kind of standard--I think you will 
agree with me--that can be challenged is the domestic standard 
that provides a higher level of protection than is deemed 
appropriate in the agreement. There is no mechanism for 
challenging the lack of a protection. There is no floor. The 
only thing that can get challenged is a higher level of 
protection, not the failure to provide some kind of a food 
safety protection. So when we say that prioritizes trade 
facilitation over safety, when there is only a ceiling, i.e. 
Being challenged for too high, not too low, that is pretty much 
only a ceiling.
    The second point is the provision you just read, was 
article sub 1 of the basic rights and obligations, but if you 
keep going through the other three rights and obligations you 
get to the crux of what I was talking about, the least trade 
restrictive rule, which is members shall ensure that any 
sanitary or phytosanitary measures apply only to the extent 
necessary to protect human, animal, plant or health are based 
on scientific principles and is not maintained without 
sufficient scientific evidence.
    And then it goes on to continue to say, sanitary and 
phytosanitary measures which conform to international standards 
and recommendations shall be deemed to be necessary, but 
everything that doesn't conform, i.e., everything that is 
higher, is subject to challenge. And, again, there is no way to 
challenge things that are lower, so thus the ceiling versus the 
floor.
    Ms. DeLauro. Mr. Kingston. What I will do is, Mr. Kingston, 
and I know Mrs. Emerson has one more question and do that, and 
then I have a few questions, and then we will try to move to 
winding down.
    Mr. Kingston. Ms. Hauter, you get money from Public Citizen 
right?
    Ms. Hauter. No.
    Mr. Kingston. You don't? I am looking at their Web page, 
and it lists usage of Public Citizen money, and it does list 
Food and Water Watch.
    Ms. Hauter. We were a spin-off from Public Citizen. We get 
no funding from Public Citizen.
    Mr. Kingston. There is no relationship, but it is listed on 
the Web page.
    Ms. Hauter. No, no formal relationship. We have a collegial 
relationship. Our program grew, and we are getting outside of 
the main mission of Public Citizen, and so we started another 
group. It is a 501(c)(3), its own funders. We have no financial 
relationship.
    Ms. Wallach. If you are looking at our 990s, I believe in 
2006 we had to pay them out the remaining grants when they got 
their own bank accounts. They used to be a division of Public 
Citizen, and they spun out as an independent organization, but 
we still are their former mother ship.
    Mr. Kingston. I just want to bring that up. Because one of 
the previous questions was that somehow these small businesses 
are maybe puppets or front groups for the big, evil, large 
businesses. And I just want to say--I am looking at it.
    And I want to also go on to say, since you asked, that I am 
disappointed. After telling you I voted with you on some trade 
agreement, your political donations, Al Franken for Senate, 
American Votes, American Civil Liberties Union, American 
Association of the University of Women, Common Cause, Democrats 
for the Future, Democrat Congressional Camp Committee, the 
Democrat National Committee, Harry Reid for Senate, Hope Fund, 
League of Women Voters, Levin for Senate--I am looking for 
Kingston--Obama----
    Ms. Wallach. That doesn't happen to be this Lori Wallach, 
because I don't make enough to give those kind of 
contributions.
    Mr. Kingston. It is not your Web site. It is Public 
Citizen's.
    Ms. Wallach. We don't have a PAC, so we don't give any 
contributions. Now I personally am too broke. Were I interested 
in giving those contributions--you will find I did support 
Donna Edwards.
    Mr. Kingston. You are a group that was nonprofit, founded 
by Ralph Nader in 1971, correct?
    Ms. Wallach. Uh-huh.
    Mr. Kingston. I am just going off your Web page. I am 
disappointed that you guys----
    Ms. Wallach. We don't have a PAC is what I am telling you. 
We are a (c)(3) and a (c)(4).
    Mr. Kingston. Do you do things for these groups? I will 
show you this Web page.
    Ms. Wallach. Yeah, I would be interested in seeing that, as 
would our general counsel.
    Ms. DeLauro. Jack.
    Mr. Kingston. And the only reason why I am saying that is 
because there were questions about some--Mr. Brosch had listed 
in the back of his testimony their groups. And so, you know, if 
he has a prejudice or a bias we can say, well, it is obviously 
Monsanto or National Retail Federation or National Turkey 
Federation that he is pushing for.
    But I am just trying to figure out if there is a 
relationship there or not, and you said there isn't. I am just 
saying the Web page says there is. I will take your word for 
it, because I respect it as accurate.
    Now, let me ask you, Mr. Brosch, there have been some 
questions about our trust of Canada and our trust of the EU and 
our distrust of China. Why is that accurate or inaccurate? 
Should we trust China?
    Mr. Brosch. Well, I think that we trust Canada and the 
European Union because the process that we have put into place 
has gone forward and our scientists and our regulators have 
taken a look at those countries. There have been questions 
raised by the chairwoman about Canada and about----
    Ms. DeLauro. Continue.
    Mr. Brosch [continuing]. About situations with Canada. We 
send the people back there. They work with those folks. We send 
people to Europe all the time. Mostly they send people here, 
the Europeans; and we work with those on a regular basis.
    I think it is that process that essentially improves the 
product you get or don't get. You make decisions during that 
process whether you are going to allow that trade to continue, 
you are going to allow certain plants. As plants get delisted, 
you go take a look at them. That process goes forward.
    We don't have that kind of experience with China. China has 
developed something of a reputation with respect to other 
products, not necessarily meat and poultry but milk and 
Melamine and other products, and that has spilled over now, and 
people are painting with a broad brush.
    As I said, the Europeans and Japanese, the people we are 
talking about and the people we trust or trust us, are 
importing poultry from those countries. So I think it is a 
matter of process, and it seems to me we set up a scientific 
process. We have regulators we hopefully can trust--
    Mr. Kingston. Let me ask you, Ms. Wallach. You had said to 
Mr. Bishop earlier that we don't have the system that Japan has 
in place. You said you are not quite sure what Europe has in 
place, but you would agree that we could learn from what Europe 
is doing if they don't have a track record. Well, if they have 
a track record for good or bad, we can learn from that, 
correct?
    Ms. Wallach. I think that they, looking at the same 
circumstances in China, decide they needed their own on-site 
inspectors, special days to run their export lines, and a very 
high 50 to 70 percent border inspection to me indicates that 
they found problems and that was one way they thought they 
could deal with it to try and make it safe. I think we should 
learn from that experience.
    By the way, I will send you Public Citizen's 990s. We don't 
take any corporate or government money. We have 100,000 
members, and we get a little bit of foundation money for books.
    Mr. Kingston. That is what your Web page says, and it 
actually says something very impressive: Your average donation 
is $28. That is good.
    I am not disputing that. I am just saying that information 
came from the Web page, that it suggested there was a 
relationship, lists a relationship.
    The only thing I want to point out is that Mr. Brosch has 
his members listed, and I think it is always good to know who 
is related to who.
    Now, let me ask you this. Ms. Wallach had talked about an 
annual audit and the right to look back and close down and keep 
up with new technology. In your opinion, is your group 
supportive of those? That sounds reasonable to me, frankly. 
Would you guys be supportive of that?
    Mr. Brosch. An annual audit of the----
    Mr. Kingston. Of a Chinese facility.
    Mr. Brosch. Oh, I believe that they do that now, 
Congressman.
    Mr. Kingston. They do do that now?
    Mr. Brosch. FSIS regular----
    Ms. DeLauro. Not all of--they don't look at all of the 
plants.
    Mr. Brosch. I don't know if they look at all of the plants, 
but they have an annual or nearly annual audit of the system of 
the country that we are dealing with.
    Mr. Kingston. Ms. Wallace, do you know what risk-based 
inspection is?
    Ms. Wallach. Uh-huh.
    Mr. Kingston. Do you support that?
    Ms. Wallach. I think there are elements of concern where 
the highest points of risk are, but I don't support the program 
that has been played with here, that has been tested here.
    Mr. Kingston. Do you support the concept of it?
    Ms. Wallach. I think that you can emphasize what are the 
riskiest practices and places to look. For instance, yes, I 
support elements of it. The way FSIS has been doing 
reinspection at the border used to be based on what particular 
facilities and counties had the worst record. So you would 
know, boy, that plant has been having problems. I am going to 
do more of that. They went to a random sample system, which to 
me was crazy. So while the rest of the system was going to 
risk--yeah.
    Mr. Kingston. Internationally, could a concept like that be 
helpful in a situation like this where you have stated you have 
a little more comfort level with Canada than you would with 
China? Would a risk-based inspection approach work?
    Ms. Wallach. I think that one of the things about redoing 
the regulations is taking into account the different levels of 
infrastructure and funding available in different countries. 
Because one of the big failings now is you have a paper audit 
that looks at what the laws are in the book, but then you have 
no idea if they are actually implemented. So I don't know if 
that would be risk or reality based.
    But, for instance, in a country that has very limited 
funding or a culture of having a lack of government 
accountability or secrecy of reporting problems, et cetera, I 
would be much more interested in having, for such a country to 
get the right to import, to have lots of U.S. inspection and 
oversight on the ground, as compared to a country that is 
having--for Canada, I would rather focus on the E. coli 
standards and less about that particular issue.
    Mr. Kingston. Also, one thing I wanted to mention--I know I 
am out of time and, Ms. Hauter, you want to say something.
    You know, if I could get a local farmer to produce and sell 
it to the local school board, one of the barriers in keeping 
him from doing that are many of the regulations that Ralph 
Nader groups have supported. And it is very frustrating. 
Because I know I think from reading that you prefer locally 
grown food, and I think many of us do. But I know one of the 
huge problems in the local farmers selling to the local school 
board are regulations that have been thrust upon the market, 
really because of litigation and things. And I would love to 
work with a group like yours to say, okay, how do you get a 
local farmer to sell to a local school board and get around 
some of those regulations that are burdening him and 
prohibiting him from it. But I don't know if we can get there 
at this point, because there is so much litigation that our 
society is in love with right now.
    Ms. Wallach. Needs to be updated just like the 
international standards need to be updated.
    Ms. Hauter. Congressman, we would love to give you the 
report that we just published on small slaughter and what needs 
to be done in a regulatory framework to make local slaughter 
possible.
    I also just want to say about risk-based inspection that 
the National Academy of Science just found that there is not 
the data available to show that risk-based inspection works, 
and we have a lot of concerns about the way that it would be 
implemented.
    Mr. Kingston. You know, I haven't read that report but look 
forward to it. I can say this, having some knowledge of the 
food business since I used to sell product liability insurance 
and I have sold to food processors, that there are certain 
processors that have violations just as there are restaurants 
that have more violations than others. And if you have an 
inspector that has 4 hours I would rather have him go to the 
frequent violator than somebody who has a really strong track 
record. And that is what risk-based inspection is.
    But I am not pushing risk-based inspection right now. We 
have had some good hearings on that. I can't even believe he is 
still sitting here.
    But my question really was, if you trust Canada and Europe, 
does an international risk-based inspection that would go after 
the Chinese shoring up their program work?
    Mr. Brosch. Mr. Kingston, about your local production, 
there is under FSIS rules a 20,000 bird exemption for small 
local production. So if someone is a producer of less than 
20,000 birds a year, he can, he or she, whoever is running that 
business can do that and be outside the FSIS inspection system; 
and the rationale is that person is selling locally and all of 
their customers know where they are getting their product.
    Ms. DeLauro. Mrs. Emerson. I think you had one question.
    Mrs. Emerson. I actually have one and a half.
    Ms. DeLauro. Go for it.
    Mrs. Emerson. Just because, since we have got off the 
subject of Chinese chicken, sort of, I do have one question I 
want to ask of Ms. Wallach and then a general question that I 
would like each of you all to answer.
    Back on phyto and phytosanitary, in your written testimony 
you mention the EU's ban on artificial growth hormones in meat 
and the millions that they have had to pay in WTO, because of 
the adverse WTO finding. I am just curious. In your opinion, 
was that a necessary food safety regulation or was it 
protectionism?
    Ms. Wallach. I think it is the right of the people who are 
going to eat the food to decide the standard. So the test for 
trade should be did they apply the same standard domestically 
as they sought to apply to imports. So at the point that they 
actually had successfully banned it, because that wasn't the 
case in the first couple of years, the same artificial growth 
hormones for their own producers, then their consumers have a 
right to expect the same for the product in the market that is 
coming from an imported source. So I believe that was 
legitimate when it became non-discriminatory, and they 
maintained their right to do that by paying the sanctions.
    Mrs. Emerson. Okay, I appreciate that.
    Tomorrow, we have before us a new food safety bill; and we 
are going to vote for it under suspension of the rules in the 
House--pardon?
    Ms. DeLauro. That is not clear.
    Mrs. Emerson. Oh, I thought that was what we were doing.
    Let's forget that we might vote for it under suspension.
    Can I just get your all's take? Have we done enough with 
regard to USDA and with regard to the FDA and will any of the 
things that we have discussed today be helped by that food 
safety bill?
    Because I want to make sure that we are going to be in a 
position where some of the equivalency and the like, that we 
are actually addressing all of those things, if we are going to 
take it up. Because I think we have to do something. Obviously, 
today's hearing would point that out. But I want to know what 
we are doing is on the right track.
    Mr. Brosch. I apologize. If I had known you would ask that 
question, I would have prepared for it.
    Mrs. Emerson. Well, I didn't know I was going to ask it. 
Since we went off Chinese chicken, I figured I might as well 
ask.
    Mr. Brosch. I am not really prepared to answer that 
question.
    Ms. Wallach. I am in the same boat.
    Ms. Hauter. We would have much preferred the legislation 
that Congresswoman DeLauro had introduced.
    Mr. Kingston. Hear hear.
    Mrs. Emerson. We would agree with you. I was just 
wondering.
    Ms. Hauter. We have concerns about this legislation, 
although we are not generally opposing it. We are hoping that 
some of these concerns are worked out. The fees on small 
farmers, less--too much regulation on small producers. The bill 
does, however, increase vigilance on imports for FDA. It is 
just going to be very costly.
    Mrs. Emerson. We can find the money. We should make sure--
--
    Ms. Hauter. We would be happy to give you our written 
assessment of the bill.
    Mrs. Emerson. Well, if you can give it to us today.
    Ms. Hauter. We can.
    Mrs. Emerson. Thank you. Maybe when you get back to your 
office.
    Ms. Hauter. Okay.
    Ms. DeLauro. Yes, I think the authorizers have got to come 
to the Appropriations Committee to deal with the funding to 
carry out what it is they have talked about carrying out.
    I know Mr. Bishop doesn't have any more questions. I have 
three and a half, and then we truly will wrap up. You all have 
been wonderfully patient with us.
    Under the system approved by FSIS, China will only be able 
to deal with processed chicken that originates largely in the 
United States or Canada. Let me just ask the three of you--and 
it is a quick question. How will we be able to tell if what is 
shipped back is exactly the same product that was sent to 
China, especially since we will not have U.S. inspectors in the 
Chinese plants? And how do we know whether the product is 
cooked to the appropriate temperature in order to assist with 
that process of safety?
    Ms. Hauter. We won't.
    Ms. DeLauro. Ms. Wallach.
    Ms. Wallach. We won't.
    Mr. Brosch. It will be based upon a series of records and 
an audit of records, as I understand it. That is how that 
process works. So it is based upon a review of records, of in 
and out, shipments in, shipments out, and the time in which 
they do the processing, how they run the lines.
    Ms. DeLauro. And to know that we have--not getting a 
domestic poultry product in return, because, as you know, 
domestic Chinese poultry is still prohibited to the United 
States because of high incidents of Avian flu.
    Mr. Brosch. The rule doesn't allow it. That is I think the 
basic legal restriction of the rule. It doesn't allow use of 
anything except poultry from approved----
    Ms. DeLauro. And given the level of inspections we have on 
the ground there, that we can, both in terms of inspections and 
of cooking the product to the appropriate temperature, your 
view is that we will be able to address that.
    Mr. Brosch. I think that FSIS could address that. They are 
not here, again, but I think they are the people who will have 
to answer your question.
    Ms. DeLauro. Okay.
    Ms. Wallach. As far as the temperature, we would have to 
rely on, under an equivalence determination, whatever system is 
going on in China that we are deeming to say is okay. And this 
would be a question, if you had more inspectors on the ground, 
if you would actually be able to stay on top of that.
    As far as the prospect of chicken laundering, bringing in 
one source and recruiting another one, I think that would be 
something that would be very hard to avoid, even given the 
potential of tracking the paper. I think that is almost 
impossible to avoid. Which begs the question of if you have got 
a phytosanitary reason why you are very nervous about having a 
particular product, i.e., an animal illness, do you ever allow 
then a processed chicken stem from that place until the actual 
animal disease is controlled?
    Ms. DeLauro. A recent CDC report found that poultry was the 
most commonly identified source of food poisoning in the United 
States. That was recounted in the newspapers in an article by 
Gardner Harris, I think, on June 12. I think it was in the New 
York Times. And I have spoken to food safety scientists at CDC 
and others about the key issues involved in assuring poultry 
products are safe, and the most important factor they cite is 
maintaining correct temperatures throughout.
    This is a particular challenge for China. Let me quote from 
a USDA publication that was released this month. It is entitled 
Imports From China and Food Safety Issues. Refrigerated storage 
and transport equipment in China is relatively scarce. When 
temperature-controlled infrastructure is available, power 
outages, railroad delays, and delivering temperature standards 
may lead to spoilage.
    Is such a system equivalent to ours? Are these reasonable 
risks for us to take with American consumers? Mr. Brosch?
    Mr. Brosch. Well, I think the first information you had, 
that poultry was the food most associated with food-borne 
illness may be a little bit distorted. My understanding that 
that data that is based on two outbreaks in two prisons, where 
they had a substantial number of incidents in those prisons, 
and that there is, in fact, further data on that study that 
sort of corrects that. So my recommendation is we will try to 
get you some information on that, but I think that that is not 
quite accurate.
    Ms. DeLauro. The temperature issue, can you address that?
    Mr. Brosch. Yes, I think what we have got is a situation 
where, if China is approved and China is allowed to do this, 
what we will have is a limited number of plants near the ports 
who are going to be the ones who will source this. They are 
going to be the ones closest to receive the product coming in.
    By the way, we don't anticipate there is going to be a lot 
of trade in this. The idea of bringing poultry all the way from 
the United States to Canada and then being able to process it 
and bring it back is going to be a very small amount of trade. 
Probably a specialized item like a Chinese specialized food 
item or something like that, but we don't anticipate that they 
are going to be near the borders. Those are going to be the 
plants that are already processing for Japan and for Europe. I 
don't think we are going to see plants that are far away from 
the borders or away from the main part of the industrial 
heartland of China providing chicken under this plan.
    Ms. DeLauro. That is interesting. That is not something 
that we had heard about, bringing, you know, stuff from the 
ports and industrial.
    So, in any case, let me just ask--well, go ahead, please. I 
didn't ask you, Ms. Wallach.
    Ms. Wallach. I was going to say if that is potentially the 
safest way to do it, then that should be part of the rule that 
would be the equivalence determination. This gets more to the 
idea of thinking about where the risks are and then having 
specific determinations for specific countries. And I say that 
as a person who knows trade and not the technical details. But 
having just heard that for the first time to translate it to 
what the equivalence policy would be, you then would want to 
make that the rule. Because, otherwise, the way things are now, 
China decides which plan.
    Ms. DeLauro. That is right.
    Ms. Hauter.
    Ms. Hauter. And this speaks to the problem of having a very 
decentralized regulatory system, where local authorities make a 
lot of decisions and where we are certifying that the whole 
country is safe, rather than the way that Europe does it, 
looking at different regions.
    Ms. DeLauro. Yes. This was, again, an ERS report, July, 
2009, Imports From China and Food Safety Issues. I talked about 
what was on one page now. This is page 17 of that report.
    Most of the violations flagged by FDA and imports from 
China over the annualized periods were problems linked to the 
processing and handling of food products, rather than to farm 
production practices. Filth generally results from introducing 
dirt or foreign materials and unsanitary packing or processing 
of facilities.
    Page 45, exported products often bring a higher price than 
those sold on the domestic Chinese market because of the higher 
costs of strict safety controls and the large differential 
between domestic and rural prices. Because the difference in 
prices is so wide, producers have strong incentives to sell 
inferior products for export produced at lower costs with fewer 
safety controls, which creates a challenge in policing supply 
chains to ensure that unsafe products are excluded.
    The last comment I want to make from the report, which is 
at page 26, which refers to a publication called The China 
Price by Alexandra Harney; and the quote is, the difficulty of 
conducting reliable company audits in China is highlighted by 
Harney's description of, quote, shadow factories, sophisticated 
strategies to falsify records, and other means of evading 
audits by foreign customers.
    I think those come out of a USDA ERS publication, which I 
believe gets at the heart of what today's issue is about, not 
only about China but the whole issue of equivalency and where 
we go for the future.
    I wanted to address a beef issue, if I might. I don't know 
if anybody wants to comment on those comments. I think they 
speak for themselves.
    Again, this is a China-U.S. poultry dispute. It is Jeffrey 
Baker, Congressional Research, July 16, 2009. It says here, and 
I quote, China is the only market completely closed to U.S. 
beef exports and represents one of the largest potential growth 
markets for U.S. beef, worth in excess of $100 billion.
    Mr. Brosch, can you tell me why we haven't taken China to 
the WTO over this?
    Mr. Brosch. I don't know. I think that the closing of the 
beef market had to do with a couple of limited incidents of Mad 
Cow that were picked up in the northwest part of the United 
States. There has been a lot of back and forth with the Chinese 
on this, and--I don't know--maybe Ambassador Kirk in his 
statement recently that he plans to increase enforcement, maybe 
that is what he will be looking at.
    Ms. DeLauro. But I am interested, because you represent a 
coalition of a whole group of people who have a significant 
interest in the beef market here. Why hasn't the U.S. brought 
suit or a complaint of the WTO if this is--and I have no reason 
to dispute CRS here.
    Mr. Brosch. No, I don't dispute that.
    Of course, you can't bring a private right of action in the 
WTO. Our groups could not file a lawsuit at the WTO. It is a 
country-to-country agreement actions have to be brought by the 
U.S. government.
    Ms. DeLauro. Well, that is what I am asking. I mean, this 
is not a group without sufficient clout, if you will.
    Mr. Brosch. Well, I can tell you, for example, we think 
that poultry has been unfairly excluded from South Africa for 
about 10 years; and I have personally been in to see, I think, 
every person in the world; and I still haven't been able to get 
the U.S. Trade Representative to take that case.
    Ms. DeLauro. Do you think we should? Your view, do you 
think we should?
    Mr. Brosch. Well, actually, the one group I don't represent 
is the beef people. So I don't know what discussions they have 
had, but perhaps so. But it is a frustration a lot of times 
when you try to get those decisions made.
    Ms. DeLauro. Okay. I have one more question, but I think 
Ms. Kaptur does. I will ask my question, and then it is the 
end, guys.
    Ms. Kaptur. Madam Chair, I don't know if anyone has asked 
this question or not, but I wanted to ask Mr. Brosch or the 
other witnesses, which food chain in the United States sells 
the most imported Chinese chicken, to your knowledge?
    Mr. Brosch. Nobody, because we don't have any imported 
Chinese chicken.
    Ms. Kaptur. We have none. Prior to the ban?
    Mr. Brosch. We never have had any. They banned it before 
there was any imports. So we don't have any Chinese chicken.
    Ms. Kaptur. So we have never had imports of Chinese chicken 
into our country.
    Mr. Brosch. Not to my knowledge.
    Ms. Kaptur. Even before the ban. All right.
    And I wonder if any of our witnesses have any information 
about the incidence of the swine flu. In fact, I was at the 
University of Wisconsin recently and heard that there is a 
theory that flies in lagoon pits east of Mexico City related to 
a very large swine production facility may actually be the 
nexus of the carrier from the lagoon pit to children that live 
here there. Have you had any confirmation of this or could you 
provide anything to the record?
    Ms. Hauter. We have heard that theory; and we can provide 
you with what we have seen, mostly news articles.
    Ms. Kaptur. But I was at a meeting with very high-level 
researchers where they had traced everyone who had left the 
country and then anybody that got the swine flu around the 
globe, and then they traced it back to this particular area. I 
believe it was east of Mexico City.
    I remember when we had the NAFTA fight, and we said that 
meat production would be moving south of the border. And people 
said, oh, that could never be done, because they don't have 
enough water and so forth. There is a million animal hog-
producing platform down there, and the question is whether or 
not this can be linked. So I would appreciate any information 
that you have.
    Ms. Hauter. There are also other issues related to the 
illness. There are E. coli bacteria, not the 0157, that also 
cause illness; and ARS has written about this. They are present 
in imported meat products. And these are bacteria that aren't 
currently in the U.S.
    And so this is another consideration. Because we don't test 
for these pathogens domestically, we can't test meat products 
of our trade partners, and this is something that needs to be 
addressed.
    Ms. Kaptur. You know, it is interesting, Madam Chair, the 
supermarket that I shop at on occasion back home, I noticed in 
the supermarket's case just in the last 6 months or so the meat 
that is now on there, if it is labeled, will have a label that 
says from U.S., Mexico, or Canada. So I assume under NAFTA one 
cannot identify the country but only the trade agreement. Could 
anyone comment on that?
    Mr. Brosch. Well, there is a complication with respect to 
NAFTA trade, because there are movements across--especially in 
the Texas area and on the Canadian border there is movement of 
small animals. For example, you may have a breeder operation in 
Canada where they will sell--they will be born, and then they 
will sell small animals across the border. Then the question 
is, is that an animal that is Canadian or American? And I think 
the rules say that it has to be completely born, raised, and 
fed, or something like that. So if you have got the movement of 
small breeding animals across the border, then you have a hard 
time identifying either as Canadian or American.
    And then also there is a movement of breeder animals from 
the United States across the border into Mexico, and there is a 
big business in that. So it is a very difficult thing to do 
that with respect to NAFTA countries because of that particular 
movement on the border.
    Ms. Kaptur. Very, very interesting. Thank you.
    Mr. Kingston. I wanted to ask one more question at some 
point.
    Ms. DeLauro. All right. Why don't you go ahead.
    Mr. Kingston. I wanted to ask, are you guys familiar with 
we moved catfish from FDA to USDA? Does that concern you? Do 
you want to react?
    Mr. Corbo. Tony Corbo from Food & Water Watch.
    We were opposed at the time of moving it over because of 
the staffing shortage problems that FSIS had just dealing with 
meat, poultry. And I have been quoted as saying they had a 
tough enough time doing four-legged animals; they don't need 
fins as well.
    But the issue now that it is over there, and you all have 
already appropriated, you know, money for the program to be set 
in motion, that I think we are going to have to go through the 
program and set up a system for domestic catfish inspections so 
that it could also be applied to the imports. And so we see 
this as an opportunity to really assess. Because we are 
importing an awful lot of seafood and we are importing a lot of 
catfish and a lot of it is showing up with illegal antibiotics, 
that FSIS may have an opportunity here to get control of the 
unsafe imports that are coming into this country.
    Mr. Kingston. Well, let me ask you this. It was actually 
moved because of trade, not because of food safety; correct?
    Ms. DeLauro. Yes.
    Mr. Corbo. The Catfish Farmers of America, they were the 
ones who successfully got it moved over. And I agree with you. 
There were trade arguments used.
    But in looking at the data from FDA in terms of what they 
have been able to intercept, they are not getting it all. You 
have products coming into this country from Vietnam and from 
China and from Thailand that do not meet our food safety 
standards. And so if we are----
    Mr. Kingston. We will have the equivalency standard though, 
right?
    Mr. Corbo. They will have to set up a system. FSIS will 
have to set up a system. And what is remarkable about this 
language in the farm bill is that not only will the processing 
facilities have to meet the inspection standards, but it also 
gives FSIS on-farm inspection capabilities and transportation 
inspection capabilities, which we don't have for meat and 
poultry now.
    Ms. DeLauro. I would just add there, I was in conversation 
when we were doing the farm bill with catfish farmers. I told 
them I wasn't sure--actually, I was more than not sure; I 
didn't think it was such a good idea. But we did put in very 
tough language to try to deal with this, you know. What we did 
and one of the big issues with regard to trade was the 
percentage of the market that was being taken by foreign 
imports, and the foreign imports were coming in just laden with 
antibiotics.
    I refer you to yesterday's, I don't know if it was The New 
York Times or the Washington Post, but I think it was The New 
York Times that talked about salmon coming in from Chile, and 
the salmon from Chile is loaded with antibiotics.
    Now, there, again, if we begin to change our standards and 
do what we want to do, you know, that can--I mean, again, the 
level of the agreement, I don't know what it is specifically 
with that--we then are in a weakened position to deal with 
trying to protect the public health of this country. But I 
think it has been laid out as to what has happened with regard 
to catfish.
    Done.
    Mr. Kingston. Yes.
    Ms. DeLauro. I think it is important, and Ms. Kaptur is not 
here, but, again, processed foods are excluded from country of 
origin labeling requirements.
    So I think we need to reiterate that fact.
    Also, one of the points I wanted to make with regard to the 
science and a prior question here is and, again, this was 
science and from CDC and others, with U.S. chickens, and this 
is a quote, are fragile, easily contaminated with bacteria. It 
also says that every step increases risk. It is kill, clean, 
gut, getting it to the consumers. You need to do it as quickly 
as possible; and, in fact, it is crucial with regard to 
temperature. If the appropriate temperature--and keeping it 
that way.
    It is hard for me to believe. I would be less than honest 
if I didn't express my view on this, that getting U.S.-Canadian 
chicken, getting it to China and maintaining a level of 
temperature, getting there, what happens there with the 
processing and defrosting and what happens there, who knows how 
it is being cooked. We are not even sure, two out of three are 
not sure, that the process--that we are getting back a U.S. or 
a Canadian chicken, coming back here.
    This is science. This is not some coming out of the door, 
out of the closet saying, okay, I think today we will look at 
this process, Chinese chicken, and say that, you know, it can 
put us at risk in terms of health. So that is science, and it 
is risk-based.
    Last question. This is, Ms. Hauter, you shared, I think, 
what is an interesting piece of information from ARS Research, 
that, and I quote, strains of food-borne pathogens not common 
to the United States are contaminating meat and poultry 
products that are imported.
    Can you just discuss the research findings on that or get 
us the research findings in more detail and get us a summary of 
that research? Because, I suspect that has health implications. 
Do you know if FSIS is taking this research into consideration 
in its equivalence determinations? If not, should it?
    I was interested in your statement that you have a document 
from FDA that says, and I quote, that half of the foods that 
have been associated with food-borne illness have been 
imported. And can you submit us a copy of that statement from 
the FDA for the record?
    Ms. Hauter. Yes, we are happy to submit that. We had to sue 
to get it, but we now have the information, and we will provide 
it.
    Ms. DeLauro. Great.
    Ms. Hauter. We can also provide the other information. FSIS 
also had a public meeting on the issue of the other types of 
bacteria.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. DeLauro. Great. Let me just say a thank you to all of 
my colleagues, those who are here who hung in to the bitter 
end, and to the ranking member, who I know cares deeply about 
these issues, and Mr. Bishop as well, and those who had to go 
to other meetings today.
    I want to thank each of our panelists. Thank you for your 
knowledge and intellect and your candor and the suggestions 
about how we move to the future.
    I think we laid out some information, but, ultimately, it 
is about how we move to proceed for the future, which we all 
have an interest in. And I would love to be able to, you know, 
after this meeting, collect ideas of how we might try to deal 
with the issue of the Chinese chicken in the short term and 
also how we deal with equivalence and how this can lead us to 
equivalence in the long term.
    So I thank you all very, very much.
    Mr. Kingston. And I also wanted to say, you know, those 
Chinese products I am cooking them in my office, and I wanted 
to invite Tony and Dr. Raymond to co-host a little brunch with 
me, and we will have some good eating.
    Ms. DeLauro. I hope you are not alone, Jack. Thank you very 
much.
    This hearing is completed. Thank you.















                           W I T N E S S E S

                              ----------                              
                                                                   Page
Brosch, Kevin....................................................   141
Cochran, Norris..................................................    65
Hauter, Wenonah..................................................   141
Henry, Craig.....................................................     1
Levinson, D. R...................................................     1
McGarey, Patrick.................................................    65
Nudelman, Jodi...................................................     1
Sharfstein, J. M.................................................    65
Stenzel, T. E....................................................     1
Wallach, Lori....................................................   141
                               I N D E X

                              ----------                              
                                                                   Page
Food Safety Oversight: U.S. Department of Health and Human 
  Services Office of Inspector General...........................     1
    Access to Records............................................    50
    Authority to Request Records.................................    43
    Bioterrorism Act.............................................    26
    Choice of Product Sample.....................................    44
    Commingled Agricultural Products.............................42, 46
    Communication Protocol for Recalls...........................    52
    Competent Handling of FDA....................................    32
    Compliance with Current Regulations..........................    45
    Cost for Interoperable Systems...............................    35
    Criminal Liability-Based Investigation.......................    49
    Definition of Interoperability...............................    35
    Difference in Minnesota Experience...........................    48
    Enforcement..................................................    28
    European Union...............................................    36
    Exclusions in the Bioterrorism Act...........................    41
    FDA Authority to Request Records.............................    36
    FDA Funding Levels...........................................    31
    Food Imports.................................................    41
    Funding Levels...............................................    29
    Good Agriculture Practices...................................    52
    Imported Food................................................    40
    Increase in FDA Funding......................................    39
    Industry Educational Efforts.................................    37
    Interaction with State Agencies..............................    38
    Lot Specific Information.....................................    25
    Multiple Agencies............................................    47
    New Statutory Authority......................................    50
    New York Times Article Submitted for the Record--
      ``Investigators Find Sources of Many Foods Untraceable''...    56
    Ongoing Work with FDA Food Issues............................    54
    Opening Statement Chairwoman DeLauro.........................     1
    Opening Statement, Craig Henry...............................    20
    Opening Statement, Ranking Member Kingston...................     3
    Opening Statement, Daniel Levinson...........................     4
    Opening Statement, Thomas Stenzel............................    12
    Other Records................................................    45
    Peanut Corporation Recall....................................    58
    Progress on Mandatory Regulations............................    51
    Questions Submitted by Congressman Kingston..................    60
    Recordkeeping Requirements...................................    33
    Saved Time...................................................    34
    Sharing Responsibility for Traceability......................    55
    Small, Organic Growers.......................................    51
    Statutory Authority..........................................    25
    Strengthening Traceability through the Supply Act............    27
    Technology for Recordkeeping.................................    34
    Third-Party Audits...........................................    43
    Traceability Priorities......................................    42
    Traceability Regulations.....................................    28
    Training Inspectors..........................................    44
    Voluntary Recall and Reimbursement...........................    59
    Voluntary Vs Mandatory Recall................................    32
    Written Statement, Dr. Craig Henry, Senior Vice President for 
      Science and Regulatory Affairs, Grocery Manufacturers 
      Association................................................    22
    Written Statement, Daniel Levinson, Inspector General, U.S. 
      Department of Health and Human Services....................     7
    Written Statement, Thomas Stenzel, President and CEO, United 
      Fresh Produce Association..................................    16
Food and Drug Administration.....................................    65
    510K Process.................................................   123
    Audits.......................................................   118
    Budget Request...............................................    69
    Cigarettes.................................................110, 111
    Control Measures.............................................   115
    Counterfeit Drugs............................................   108
    Dietary Supplements..........................................   122
    Domestic Products............................................   106
    E. Coli......................................................   103
    Equivalency..................................................   116
    FDAAA........................................................   100
    FDA's Budget.................................................    85
    FDA Hiring Plans for Veterinarians...........................    90
    FDA Management...............................................    83
    FDA Staffing.................................................86, 94
    Flu Outbreak.................................................    71
    Food Safety..................................................   120
    Food Safety Working Group....................................   102
    FTE..........................................................    92
    Generic Drugs...........................................88, 98, 114
    HACCP........................................................   116
    Heparin......................................................   108
    Imported Shrimp..............................................    95
    IND Applications.............................................    91
    Industry.....................................................   113
    Industry Influence...........................................    83
    Introductory Remarks, Dr. Joshua Sharfstein..................    67
    Legislative Initiatives......................................    70
    Louisville Inspections.......................................    90
    Medical Devices..............................................   123
    Medical Product Inspections..................................   121
    Off Label Marketing..........................................   119
    Protecting America's Food Supply.............................    69
    Public Health................................................   109
    Public Health Outcomes.......................................    68
    Questions Submitted by Representative Boyd...................   134
    Questions Submitted by Representative Farr...................   125
    Questions Submitted by Representative Latham.................   136
    Recovery of Industry.........................................   105
    Risk Communication...........................................   105
    Safe Medical Products........................................    70
    Scientists...................................................    84
    Shrimp Imports and Field Exams...............................    96
    Single Food Agency...........................................   120
    State Inspections............................................   117
    State Partnerships...........................................   117
    Supply Chain Safety..........................................   108
    Tanning Beds.................................................   111
    Third-Party Certification....................................   106
    Tomatoes.....................................................   112
    Unobligated Funds............................................    89
    UPS Hub at Louisville........................................    91
    User Fees...............................................87, 98, 114
    Veterinary Medicine..........................................    89
    Written Statement, Dr. Joshua Sharfstein, Principal Deputy 
      Commissioner and Acting Commissioner, FDA..................    73
Protecting the Public Health in a Global Economy: Ensuring That 
  Meat and Poultry Imports Meet U.S. Standards...................   141
    Written Statement, Kevin Brosch, DTB Associates, LLP.........   149
    Written Statement, Wenonah Hauter, Executive Director, Food & 
      Water Watch................................................   186
    Written Statement, Lori Wallach, Director, Public Citizen's 
      Global Trade Watch.........................................   164

                                  
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