[Congressional Record Volume 143, Number 140 (Thursday, October 9, 1997)]
[Senate]
[Pages S10798-S10800]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Feingold, Mr. Thomas, Mr. 
        Brownback, Mr. Roberts and Mr. Burns):
  S. 1291. A bill to permit the interstate distribution of State-
inspected meat under certain circumstances; to the Committee on 
Agriculture, Nutrition, and Forestry.


    THE INTERSTATE DISTRIBUTION OF STATE-INSPECTED MEAT ACT OF 1997

  Mr. HATCH. Mr. President, I rise to introduce the Interstate 
Distribution of State-inspected Meat Act of 1997. This legislation will 
lift the ban on interstate distribution of State-inspected meat and 
poultry, providing some long-term relief to our livestock producers and 
finally ending a long-standing inequity in meat inspection laws that 
affects about 3,000 meat processors in 26 States.

  In the 1960's, the Federal Meat Inspection Act and the Poultry 
Products Inspection Act allowed States to implement their own 
inspection programs. At the time, there remained some uncertainty as to 
how well the State inspection programs would function, so a provision 
was included banning meat inspected by States from interstate 
distribution. There was also a provision included requiring the U.S. 
Department of Agriculture to periodically recertify that the State 
programs are ``at least equal to'' the Federal standards. In the 30 
years since this program was instituted, a State program has never 
failed to achieve recertification.
  Mr. President, today the ban on interstate distribution has clearly 
outlived its purpose. Instead of protecting the health of our citizens, 
it only stifles competition in the meat packing industry and impounds 
the available market to State-inspected plants. Right now, State-
inspected ostrich, venison, buffalo, and pheasant are freely 
distributed across State lines; yet, a perfectly good steak is banned.
  Furthermore, foreign competitors are allowed to send their meat 
products throughout the United States without regard for State 
boundaries. These foreign companies do not face a higher standard than 
our State-inspected processing plants. The only difference is that the 
State-inspected plants have much tighter oversight by the USDA. There 
is no reason that U.S. plants should be restricted from competing with 
foreign countries.
  Monte Lucherini runs a State-inspected plant in Logan, UT. He runs a 
good business and makes an excellent product, but is still not allowed 
to do business outside of Utah. He writes:

       I believe that my gross sales would increase 30 to 40 
     percent. . . . Employment would be increased also. I would 
     need two to three more butchers, and probably five to six 
     more part-time workers. . . . It has always been a thorn in 
     our side that we couldn't service the customers that want our 
     products.

  David H. Yadron runs a state-inspected plant in Orem, Utah. He says:

       By scrimping and saving, this ``mom and pop'' operation was 
     built to federal standards two years ago. Nevertheless, large 
     companies and foreign competitors enjoy the privilege of 
     shipping their meat products interstate even though our 
     facility and products are equal or superior to theirs. This 
     injustice limits our profitability while providing an unfair 
     marketing advantage to foreign companies and large domestic 
     operations. Unless Congress repeals the unfair prohibition, 
     we could be forced out of business. Conversely, if Wind River 
     grows, then our suppliers, including the local, federal meat 
     inspected packers, would also grow.

  Mr. President, there are restaurants and food retailers in many 
States that would love to purchase meat products from Utah's State-
inspected plants. Utah's State inspection program receives the highest 
marks possible by the USDA, and many of our plants produce unique and 
hard-to-find products. Instead of purchasing from Utah, these 
restaurants and retailers are forced to purchase from foreign 
competitors, even though the quality of the foreign product is often 
inferior.
  There is no sense to this, Mr. President; it cuts into the profits of 
our retailers, raises the prices for our consumers, stifles business 
for our processors, and limits the market for our livestock and poultry 
producers.
  Mr. President, the time has come to lift the ban in State-inspected 
meat and poultry. There is no reason whatever to believe that 
permitting interstate distribution for State-inspected meat would 
compromise safety in any way. In fact, I believe we would have even 
greater assurances about the safety of meat than we do now. The USDA 
would continue to set and ensure inspection standards.
  I am aware that the USDA has recently begun looking into the merits 
of lifting the prohibition on interstate distribution, and I am eager 
to work with the USDA on a workable plan for bringing this law up-to-
date. I call on my colleagues to support this effort to introduce 
equity into the meat packing industry.
  Mr. FEINGOLD. Mr. President, I am pleased to be an original cosponsor 
of the Interstate Distribution of State-inspected Meat Act of 1997 
introduced today by my colleague from Utah [Mr. Hatch] and I thank him 
for his leadership on this issue.
  This is a very important bill for my State of Wisconsin which has 
nearly 300 State-inspected meat plants which provide jobs and income 
for rural communities. The quality meat products processed by these 
plants such as the Lodi Sausage Co. in Lodi, WI, Gunderson Food Service 
in Mondovi, WI, Goodfella's Pizza Corp. in Medford, WI, The Ham Store 
in Brookfield, WI, Country Fresh Meats in Hatley, WI, and Louie's Finer 
Meats, Inc. in Cumberland, WI are prohibited from being sold across 
State lines. These small businesses face the interstate marketing 
prohibition not because their products haven't been inspected--in fact 
all these businesses are inspected by the

[[Page S10799]]

State of Wisconsin--but because of an archaic provision of Federal law 
which prohibits interstate shipment of State-inspected meats even 
though the State inspection program is certified as equal to Federal 
meat inspection programs.
  These plants, and hundreds like them in Wisconsin, produce quality 
specialty meat products which are demanded by consumers in other 
States. But the owners of these facilities are unable to capitalize on 
their specialties and meet that market demand. By limiting these plants 
to markets within their home-State borders, Federal law effectively 
prevents them from expanding their markets, increasing the number of 
people they employ, and generating additional economic activity in 
rural areas.
  These small plants pose no competitive threat to larger processors 
who are federally inspected. In most cases, State-inspected plants are 
small family owned businesses, employing between 1 and 20 people, 
producing specialty products to fill a small market niche. These plant 
owners and operators pay special attention to the quality of their 
products and because of this they cannot grow very large. Wisconsin's 
small-scale meat processors take great pride in their products which 
reflect the ethnic diversity in my State. In fact, it is my 
understanding that Wisconsin specialty meat products win nearly 25 
percent of the awards at the American Association of Meat Processors' 
nationwide product show.
  Furthermore, these small State-inspected plants play a critical role 
in sustaining rural communities and helping to ensure diversity of size 
in the livestock industry. Most of these plants buy livestock locally 
which helps maintain the viability of nearby small family livestock 
operations. By buying locally they know exactly where their inputs bar 
coming from and how they are produced, which allows them to control the 
quality of their products. These local buying practices help counteract 
trends toward concentration in the livestock and poultry production and 
processing industries providing small livestock and dairy producers 
with marketing alternatives in any industry dominated by a few large 
meat packers.
  The owners of these small businesses in Wisconsin correctly point out 
that they face even more meat shipment restrictions than their 
competitors from foreign countries. Under our trade agreements, meat 
products from foreign countries are allowed into the United States and 
across State borders as long as the country has an inspection program 
that is ``equivalent'' to U.S. programs. Meanwhile, even if State 
inspection programs are ``equal to'' Federal inspection programs, meats 
inspected under State programs are still precluded from interstate 
shipment Mr. President, it simply isn't fair and it is time to 
eliminate this inequity.
  The bill we are introducing today makes a simple but important change 
to Federal law to allow State-inspected meats to be sold across State 
lines after the State inspection program is favorably reviewed and 
certified by the Secretary of Agriculture as at least ``equal to'' 
Federal meat inspection programs. If State programs are not equal to 
the Federal inspection program, they will not be certified by USDA and 
State-inspected meats will not cross State lines. The Secretary is also 
required by this bill to certify that the State inspection program is 
on schedule in implementing USDA's new Hazard Analysis and Critical 
Control Points [HAACP] regulations. The bill also requires the 
Secretary to annually recertify the State program. To provide further 
safeguards, Federal meat inspectors may also randomly inspect State 
plants to ensure that they continue to meet Federal standards. The 
Secretary will have the authority to reinstate the interstate shipment 
ban on plants that fail to meet Federal standards. This bill is 
responsible to consumers while providing equity to small State-
inspected plants.
  Mr. President, I think the best arguments in favor of this 
legislation are made by those small business owners who are directly 
affected by the interstate shipment prohibition imposed on their meat 
products. I want to share with my colleagues some comments made by 
owners of some State-inspected processing businesses in Wisconsin.:
  Louis Muench, owner of Louie's Finer Meats, Inc. In Cumberland, WI 
writes:

       We are the operators of a small meat processing and sausage 
     making operation in a small town in northern Wisconsin . . . 
     Our plant is 30 miles from the Minnesota border and we cannot 
     even provide sausage for a pancake supper in Minnesota, let 
     alone any wholesaling to supermarkets and convenience stores. 
     We have received over 100 State and National awards for our 
     sausage products. We cannot even market these products on a 
     regional basis, let alone a national basis. This past May 
     [1996], we were honored to receive two international gold 
     medals for our sausage in Frankfurt, Germany. We are not 
     allowed to market these products anywhere but Wisconsin. 
     These kinds of restrictions make it difficult to maintain a 
     profitable business.

  Dan Kubly, one of the owners of LazyBones Ham Store, in Brookfield, 
WI writes:

       We work very closely with our state inspectors and consider 
     them an ally in our overall business. We constantly consult 
     with them on equipment conditions, labeling and handling 
     procedures in our plant. It makes no sense that we are 
     permitted to ship our products anywhere as long as the retail 
     customer buys the product at our stores, but are not allowed 
     to ship the same product across state lines through a 
     distributor . . . Our volume is increasing rapidly and we are 
     interested in contracting with a multi-state distributor, 
     however we are unable to do this because we do not have USDA 
     inspection. We feel our business will suffer significantly 
     and job creation will end if we are not permitted to expand 
     due to this unnecessary prohibition.

  James Weber, owner of Gunderson Food Service, in Modovi, WI writes:

       We are operating a small meat plant in northwest Wisconsin 
     and employ 9 people. We slaughter and and custom process for 
     the local farm community, smoke ham and bacon, manufacture 
     sausage and sell retail and wholesale. We are under Wisconsin 
     meat inspection and are required to be equal to or better 
     than Federal inspection. In the last 4 years we have taken 18 
     Wisconsin, national and international awards for our ham, 
     jerky, beef sticks and sausage; but because I am in Wisconsin 
     I am discriminated against by the Federal government. We are 
     30 miles from the Minnesota border but cannot sell our 
     product there. If my products are of high enough quality to 
     be sent 250 miles to Milwaukee, Wisconsin, then why is there 
     a problem with me selling it 25 miles away in Waubaska, 
     Minnesota?

  Bill Ruef, owner of Ruef's Meat Market in New Glarus, WI who 
processes a Swiss ready-to-eat snack called ``Landjaeger'' writes:

       This [Landjaeger] is our most popular item, and I get asked 
     on a regular basis by business owners from other states--we 
     are about 25 miles from the Illinois border--if we can ship 
     our Landjaegers to them for resale in their establishments. 
     It really hurts me and my business when I have to tell them 
     ``no'' because we aren't federally inspected. This kind of 
     unfair prohibition will only continue to drive small 
     businesses to fold and allow large conglomerates to 
     monopolize the industry.

  Mr. President, these business owners say it best. The current 
prohibition on interstate shipment of State-inspected meats is obsolete 
and patently unfair to small meat processors. It is time to correct 
this inequity and I urge my colleagues to support this important 
legislation.
  Mr. BROWNBACK. Mr. President, today I join with the distinguished 
Senators from Utah, Wisconsin, and Wyoming in introducing a bill which 
addresses an injustice that has developed out of current law.
  Under current law, meat and poultry products that are processed in 
plants which are inspected by State departments of agriculture are not 
allowed to be shipped over State lines. This restriction is an unfair 
restraint on competition which is especially discriminatory toward 
small processing facilities.
  State inspection programs are required to maintain standards are ``at 
least equal to'' federal inspection standards. The U.S. Department of 
Agriculture periodically recertifies that State programs continue to 
meet that standard. meeting an ``equal to'' standard is the same 
requirement that foreign meat processors must meet in order to sell 
their product within U.S. borders. Not allowing State inspected 
facilities the freedom to sell their product throughout the country 
after having met the same standard that allows their foreign 
competitors to market their product unimpeded is, quite simply, unfair.
  This arbitrary restriction has been troublesome to me ever since I 
was Secretary of Agriculture for Kansas. I've seen firsthand that this 
restriction impedes competition. In fact, I would like to insert in the 
Record a letter that I received from a professional in

[[Page S10800]]

the State of Kansas who operates a State inspected plant. My 
constituent presents a credible case for why her business is limited 
because of the restriction on interstate shipment.
  Proprietors of State-inspected plants are not the only advocates of 
changing the law. USDA's packer concentration panel recommended an 
immediate repeal of this prohibition as a way to slow packer 
concentration. The National Association of State Department of 
Agriculture, which represents the Secretaries and Commissioners of 
Agriculture which have responsibility for overseeing State programs, 
strongly endorses the repeal of interstate shipment restrictions. Based 
on public comment solicited in the Federal Register and public hearings 
that were held throughout the country, the U.S. Department of 
Agriculture recently announced its support of lifting the ban on 
interstate shipment.
  Mr. President, I would like to address the issue of food safety in 
relation to my proposal. Food safety is paramount. This measure would 
not in any way undermine the consumer's access to a reliable and safe 
product. However, this bill is not about food safety. Rather, this bill 
addresses an issue of commerce and trade.
  In other words, food safety is an issue of enforcing the inspection 
standards that are in place, whether under State or Federal oversight. 
If State-inspected meat is safe to be distributed in Kansas, it is safe 
to be shipped to Missouri, or Oklahoma, or wherever else an 
entrepreneur finds a customer. Conversely, if the food is not safe to 
be shipped over State lines, it shouldn't be distributed with the State 
either.
  And, as both State and federally inspected plants implement the 
Hazard Analysis and Critical Control Point system, we can be even more 
assured that plants throughout the country are conforming to a 
uniformly high set of standards. Now, more than ever, a focus on who 
does the inspecting has no relevance in determining where the product 
can be consumed safely.
  I would like to highlight the paper that the U.S. Department of 
Agriculture recently released in support of allowing the interstate 
shipment of State-inspected meat and poultry products. In this paper, 
the administration states its concept for legislative action and 
establishes certain recommendations for what that legislation should 
include. I believe that there is much common ground between the 
Secretary's guidelines and the bill that my colleagues and I are 
introducing today.
  I look forward to working with the USDA, as well as my colleagues 
here in the Senate, in order to pass and implement this legislation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                      Home On The Range & Co.,

                               Scott City, KS, September 11, 1997.
     Congressman Sam Brownback,
     Washington, DC.
       Dear Congressman Brownback: On September 6 of last week I 
     was asked to attend a meeting called by Secretary of 
     Agriculture Dan Glickman concerning the interstate shipment 
     of State inspected meat and poultry products. I was a Kansas 
     representative of small processors that are affected by this 
     issue.
       This is not a food safety issue. Our plants meet or exceed 
     the provisions provided by the USDA. In many cases we are 
     even more careful of our products standards because we live 
     in the communities where we work. If our customers do not 
     like the quality of products we produce they tell their 
     friends and so on. We want to produce the safest and highest 
     quality of products.
       It is an unfair competition issue. With the passage of the 
     NAFTA and other trade agreements, foreign meat and poultry 
     products have free access to United States interstate 
     commerce. These foreign inspection systems must meet 
     requirements similar to those that the states must meet in 
     assuring that their systems meet the requirements found in 
     the federal acts. Why should beef inspected in Mexico have 
     free access to interstate commerce when beef I process can 
     not be sold in Colorado?
       Expanding the market for state inspected plants will create 
     jobs and the economy in all our communities. These plants 
     provide ``value added'' and specialty products to the market 
     that the larger plants do not want to produce.
       Another issue that does not make sense is the fact that the 
     Buffalo Jerky I produce by the exact process as the Beef 
     Jerky I produce is able to be sold across the United States 
     because the USDA does not regulate them as species which 
     require mandatory federal inspection.
       Please give your support to Bill number S. 1862 that is 
     being introduced concerning this matter. It is very important 
     this be passed now. Time is running out for the small 
     processors. In Kansas alone, 6-7 plants are closing a year 
     because we are not able to access the trade we need to stay 
     in business.
       Kansas Secretary of Agriculture, Allie Devine is in favor 
     of this bill. She would be happy to answer any questions you 
     may have on this issue.
       Thank you very much for your time.
           Sincerely,
                                              Lori Robbins, Owner.
                                 ______