Susan: On the record. Joining us for today's media conference call, we have on the line Agriculture Secretary Tom Vilsack. Also he's joined by USDA Chief Veterinarian John Clifford. The two will be talking about animal disease traceability.
If you'd like to ask a question of the two please let us know by pressing *1 on your touchtone pad. I turn it over now to Agriculture Secretary Vilsack.
Agriculture Secretary Vilsack: Susan, thank you very much and thanks for joining.
First of all before I go into detail about what we're going to discuss today, I do want to publicly thank Dr. Clifford and his team for the work that they have done in this area of animal disease traceability. It's been a long process, a very detailed process, that required a great deal of outreach. And Dr. Clifford has been a great ambassador for the USDA in connection with this particular issue. So I want to start off by thanking him for his work and his team's work.
As folks probably know, last February 2010, I announced that we would propose a new flexible framework for animal disease traceability in the United States. That traceability or knowing where diseased and at-risk animals are, where they've been and when, it's very important to making sure that we can have a rapid response when animal disease events take place.
And we outlined at that time the tenets that would be included in a revised and reformed system. We acknowledged that it should only apply to animals moved interstate. It ought to be administered by the states and travel nations to provide more flexibility. It ought to encourage the use of low-cost technology. And it needed to be implemented transparently through Federal regulations and a full rule-making process.
During the spring and summer of last year, USDA hosted eight public meetings to discuss this new framework. The meetings provided a venue for APHIS to provide additional details about the framework and to learn from industry representatives and producers how best to support the states and tribes as they move forward to develop a workable traceability system.
After careful consideration of the feedback collected from these meetings (Tape break at 4:09:06) a work group that was established as well as travel consultations and additional discussions with producers in the industry. We're ready today to fulfill our commitment to implementing this program transparently by sharing our proposed rule for achieving animal disease traceability in America.
The proposed rule we're issuing this week meets all four tenets that I initially laid out. It will indeed be administered by states and tribal nations. It will only apply to livestock moved interstate. It encourages the use of low-cost technology. And it will be implemented transparently.
Under this proposed rule unless specifically exempted, livestock moved interstate would have to be officially identified and accompanied by an interstate certificate of veterinary inspection or other documentation such as an owner/shipper statement or brand certificates.
Tracing capabilities vary by species we acknowledge. Thus, the proposed regulations focus on those species such as the cattle sector where improved capabilities are most needed. That sector's varying use of official identification coupled with a significant movement of cattle interstate warrants regulations that enhance the current traceability infrastructure.
The proposed regulations specify approved forms of official notification for each species. It will also allow livestock to be moved between the shipping and receiving states or tribes with another form of identification such as brands so long as it is agreed upon by the animal health officials in the two jurisdictions involved.
There will be exemptions for producers who raise animals to feed themselves, their families and their immediate neighbors. Interstate movements of those animals to a custom slaughter facility are also exempt from the traceability regulation.
Now we proposed this framework because increasing levels of official identification will help USDA more quickly identify which animals do not need to be held and tested in the conduct of a disease investigation. This information can reduce the number of locations affected and the number of animals tested; thereby decreasing significantly the length of the investigation and, as importantly, the cost to producers and the Government.
There is clear evidence of this value in the sheep industry where 92 percent of caught sheep bear an official tag. And in a 2010 incident sheep where easily traced through a flock of origin within minutes.
On the other hand, low levels of official identification in the cattle sector require more cattle, often thousands of head, to be tested more than necessary. And it dramatically increases the time necessary to conduct investigations. For example, the Bovine tuberculosis disease investigations frequently now exceed 150 days as USDA and state investigator teams spent substantially more time and money in conducting tracebacks.
Now it should be noted that this traceability system is not going to prevent disease. But knowing where diseased and at-risk animals are is indispensable during an emergency response and for on-going disease programs. Reducing the number of animal owners impacted by an animal disease event also reduces the economic strain on the owners and affected communities.
With this proposal, I believe we've created an adaptable system that will help us respond to a disease event quickly and quickly address that disease event and hopefully minimize the harm to producers. It's flexible yet coordinated in its approach to traceability and I think it embraces the strengths and expertise that exists in our states, tribal nations and producers and empowers all of them to find and use traceability approaches that work best for them and for their region.
The changes in the approach outlined in the proposed rule published today make animal disease traceability more workable, more feasible and provides a common sense approach for all of America's livestock producers, especially small producers.
Now, since this is a proposed rule, we're encouraging feedback on the proposed rule during the comment period. That input added to what we've already learned from the hearings and outreach will enable us to create a regulation that will workable for producers and other stakeholders and will also meet the country's need for an adaptable approach to animal disease traceability that will help us find animals associated with disease quickly, focus on our efforts on those animals and those animal alone and minimize the harm and economic loss to producers and agricultural communities.
Dr. Clifford is with me today and I will respond to questions. But most likely Dr. Clifford will be engaged in helping to respond to these questions so that the technical information that might be asked can be answered properly.
So, with that, Susan, I'd be glad to answer questions.
Susan: All right. We do have some waiting on the line. For others, if you need to know how to get on board, press *1 on your touchtone pad.
Our first call comes from Matt Kay at the Burns Bureau. Matt.
Question: Yes. Thank you. Last March, former Ag Secretary Mike Johanns speaking from the Senate floor said that the proposal that you made last year was a backdoor approach to a mandatory national animal ID. He said the reason he made that claim was that many livestocks auctions attract bidders from both in-state and states around, states all over the country. So one can assume all animals sold through an auction barn will be required to have an ID. And if they don't, he said, auctioneers would literally have to stop the bidding and announce where the potential seller resides for each animal without a tracking number, leaving out-of-state buyers to sit out the bidding.
So my question is does your new proposed rule address this potential pitfall through the certificates that you described.
Agriculture Secretary Vilsack: I'm going to ask Dr. Clifford to respond specifically to the technical aspects of your question. But I do want to remind folks that what we had prior to this proposal was a voluntary system which was frankly not very well accepted in the industry. We estimated that less than 30 percent of producers were actually actively involved and it was a hodgepodge of response and reaction which led us in a situation where we obviously have to test and respond to emergency situations with a very, very broad brush. This is obviously designed to create greater efficiencies.
But, Dr. Clifford, I would ask you to respond specifically to the question.
Dr. Clifford: Thanks, Mr. Secretary.
Yes. We've actually worked very, very closely with the cattle industry sector as well as the marketing sector in the development of this rule. And I can assure you that this rule is not there and it will not impede commerce. It will not do what you just cited first and foremost because it's not the responsibility of the market themselves to determine the designation.
After the animals are sold and then the buyers determine where they go, they will get certificates for those animals if they are moving interstate. And that can be done after the sale. It does not have to be done during the sale.
In fact, many animals are sold at markets today. This same type of process and procedure is handled according to where those animals are destined.
Susan: All right. Next on the line we have from Dow Jones, Marshall Ecblad (phonetic). Marshall.
Question: Hi gentlemen. Thanks for taking my call.
A quick question for you and I noticed in the proposal there are exemptions for situations in which two jurisdictions have separate agreements among themselves. Is there an precedent for that kind of system? And how are you able to assure that that won't lead to some sort of patchwork system in which folks are tracking livestock using a variety of different methods?
Dr. Clifford: So basically all of our programs historically have been state/Federal cooperative programs. So we work very closely with the states with a number of these issues. And traceability is something that's not just important to us at the Federal level for animal health but also the states.
In Secretary Vilsack's initial charge to us, we've worked very closely with the states to give them maximum flexibility but at the same time make sure that we have good traceability. This rule basically sets that stage in motion and provides the states to make those choices that are best for them but will still allow them to trace the animals.
So, no, I do not see this leading to poor traceability in the future.
Agriculture Secretary Vilsack: And I'll just add to that that I think it's fair to say that under the old system the notion that one-size-fits-all was not well received in the marketplace or by producers. The reality is that there are different needs depending upon different regions of the country. And what we've attempted to do is to recognize the uniqueness of each region of the country and each livestock sector in an effort to try to work with them so that we do a better job of traceability but at the same time create a system that's more workable.
Susan: Up next on the line we have Garron Burke (Phonetic) with Associated Press.
Question: Yes. Hi. Good afternoon. Thanks so much for taking my call. It's Garron Burke with the AP.
Secretary Vilsack, I have a question for you. I wondered. Would this proposal apply equally well in a situation in which a disease is intentionally introduced into the nation's livestock population?
Agriculture Secretary Vilsack: It absolutely should. And obviously that's one of the issues that we always confront and deal with. And so it's really designed first and foremost in terms of animal health and the ability to trace back as quickly as possible to that we can respond to whatever disease, however it is injected into the population.
Susan: Our next call is with Congressional Quarterlies, Ellen Ferguson.
Question: Thank you for having the call. Is there any role or any kind of review that Congress will play on this since some of the toughest critics of the old system were members of Congress (Tape break at 4:20:00) of funding for the old system was reduced. Are you going to need funding for what you're rolling out today?
Agriculture Secretary Vilsack: Well, we had indicated to states that it was our intention to partner with the states and to make sure that the cost of low-cost technology would be something that would not be necessarily and unfairly burdensome to the states or to the producers. So, to that extent, there will obviously need to be support, financial support, from Congress for this program.
We think we can make the case that the investments to be made by Congress will be better received and better implemented and better utilized than the investments that were made under previous systems. We spent a good deal of money in the past only to get relatively meager support and participation in the program. So our hope is that by doing the outreach that we've done, by working and listening to states and tribal nations, producers and the industry and providing some resource for the low cost technology and some flexibility in terms of branding which is also an issue that brought up that we will get greater compliance, greater acceptability and therefore greater support for this effort.
Because I don't think there's anyone who disagrees that it makes common sense and it makes economic sense that if you have a disease incident, an event, you want to be able to deal with it as quickly as possible. And you want to be able to focus and target the population that needs to be targeted and focused as opposed to taking a broad brush and trying to bring in thousands of animals, spending a great deal of time, having the uncertainty that that creates in the market and the cost and expense of actually testing animals that frankly don't need testing because you had a poor traceability system in place.
So our hope is that people recognize the outreach effort. Our hope is that a number of groups that have been critical in the past acknowledge our effort to work with them and that we get the support from Congress because this is a very important opportunity for us to do a better job of protecting animals and therefore the markets that animals are sold in.
Question: Thank you.
Susan: We continue on the line with Matt Shore (phonetic) with Inside U.S. Trade.
Question: Yes. Thank you for taking my call. As you both know, this traceability issue is also tied to our access as USB to foreign markets. And China has said as a condition to it opening its market to USB imports they would need a system. They want to see a system to trace cattle back to the farm of origin.
It appears that the system you're proposing in this rule doesn't exactly do that. But do you have any signs from China, any reaction or input, to this proposed system whether that would meet their condition? And do you think it does?
Agriculture Secretary Vilsack: Let me first of all say in terms of China and in particular to its relationship to beef we have some significant issues with them that have not yet been resolved that we think need to be resolved based on a science-based and rules-based system as it relates to BSE (phonetic) and whether or not they will be willing to open up their market as other countries have with a process that will ultimately get us to full OA compliance. So that's first and foremost an issue with China.
Let me say that this system in our view puts us in a much better competitive circumstance than we are today. Other countries who have traceability systems have been using that as a way of gaining market advantage. We believe this system basically takes that market advantage away.
It also does not prevent the state within the state of developing any other existing programs that a state feels is appropriate. I was in Wisconsin last week and spoke with the Secretary of Agriculture there. They're very proud of their system in Wisconsin. They want to be able to maintain that system and we don't want to interfere with that system. We want to basically coordinate with their system.
So I think we're going to -- My belief is we're going to have greater compliance and therefore greater confidence which will allow us to do a better job of marketing to export markets.
Susan: Up next on the line is Sally Chef (phonetic) with Feed Stuffs.
Question: Yes. Thank you for taking my call. I've got a two-part question to follow up on Ellen's question on Congressional funding. Do you have a cost yet, an estimate, on what you expect the program will cost?
And as a second part of my question, ARCAP (phonetic) was critical in a press release issued yesterday on the brand issue despite the clarification that came out earlier. Can you address what's the exact status of the use of the hot brands for identification is?
Agriculture Secretary Vilsack: Let me respond to the question of cost and then I'll have John Clifford talk a little bit about the branding issue. We anticipate and expect that roughly $14 million to $14.5 million would be necessary to adequately fund this program. Again, I think there is a good case to made that we'll have a substantial return on that investment both in terms of being able to minimize testing and costs on producers in a disease-event circumstance and clearly in being more competitive in terms of marketing of our livestock to export markets. So I think this is a wise investment.
Yes, we recognize and appreciate that there are folks who are somewhat critical of various aspects of this program. We have made an effort to try to listen and to try to respond to those concerns. And I'll let John Clifford go into greater detail about that.
Dr. Clifford: Thanks, Mr. Secretary.
So, really on the brand issue, brands currently in the Code of Federal Regulations are recognized as being official as well as other forms of ID such as backtags, registration tattoos. We're not trying to eliminate these forms of ID but basically to apply this rule and one aspect of the rule that would allow all 50 states to be able to work together and that is that all 50 states would need to accept official ID in all 50 states. So brands as stated by the Secretary are recognized as far as their value and they can be utilized between two brand states as long as both states agree to that. Plus they can be utilized within the state itself that has those brands.
There are only about 14 brand states in the United States. And to effectively have brands to high level, it's important that you have a good system in place within those states.
The other 36 states in this country do not have that system in place. And basically if we allow brands to stay official we would be saying to those other 36 states you would have to implement a system that's not in place in those and put additional burden on those states and those producers within those states.
Susan: We're going to try to take a couple more calls. Ron Hayes with Radio Oklahoma Network.
Question: Good morning, Mr. Secretary. One question in regards to this whole issue of really doing what needs to be done for that international marketplace you alluded to the fact that you feel that this kind of levels of the playing field a little bit.
I know that the Australians are using this as a marketing advantage against whomever they're selling against at this point. A lot of concern in the Asian nations about being able to trace back very precisely. Do you really believe that this is going to be able to give us the traceback that would be adequate if we had a disease? In other words, can we trace back within one, two, three days information if we get a disease outbreak?
Agriculture Secretary Vilsack: We would not be proposing this if we weren't confident that it would do a better job than we have done in the past in responding to disease outbreaks. Obviously, in some cases, it will be perhaps a matter of days. In some other circumstances depending upon the complexity, it may be a matter of weeks. But it will certainly be not 150 days or some of the rather lengthy processes that we've seen in the past.
So we believe this is a significant improvement over that effort. And I think it's one that we can aggressively market together with our quality and together with our pricing to make our products, our livestock products, far more competitive and far more salable.
You know, we're having a record year in agricultural exports in part because the American brand across the world is the premier brand. And I will tell you. I said this just the other day at a press conference. There's a lot of negative news that's floating around in this country. And I think it's perhaps high time that we focus on some of the positive aspects of what America does and America does better than anybody else.
And we can start with agriculture. And we can start with production agriculture. And we can start with the capacity that we have in this country to feed ourselves and to help feed the rest of the world in times of trouble and in export marketing opportunities.
And our export marketing opportunities this year will set a record which means that farmers and producers will have a better bottomline and it also means more jobs. Every billion dollars of agricultural sales generates 8400 jobs in the economy. That's one of the reasons why one out of every 12 jobs is connected in some way, shape or form to agriculture.
So this is a success story. And we want to build on that success. One way we build on that success is by having a traceability system that works, that's more flexible, that's more responsive to the producers' needs and that basically allows to do a much better job than we've done in the past. And that was the goal. And I think with a lot of outreach and a lot of listening and a lot of hard work with commissioners of agriculture and secretaries of agriculture and producer groups and a whole host of state veterinarians, a whole host of people, who have an interest in this issue. We've listened very carefully and we've listened hard. And I think we have a much, much more improved process than we had.
And, as John Clifford was sharing with me, this is a discussion we've been having in this country for a long time. And it's high time that we get to a point where we actually have a system that works.
SUSAN: Mr. Secretary and Dr. Clifford, we have time for one last call and that comes from Christopher During (phonetic) with Waters.
Question: Thank you for taking my call. I'd just like to clarify one thing real quick from Sally's question earlier on the cost. You said about $14.5 million. I'm assuming that's per year or is that going to be like a one-time charge?
Agriculture Secretary Vilsack: That's a per year charge.
Question: Okay. Thank you. And the comment period, how long is the comment period? It may say that on the release, but I --
Agriculture Secretary Vilsack: Ninety days.
Question: Ninety days, thank you.
Agriculture Secretary Vilsack: Thank you.
Susan: All right. Everyone, thank you for joining us for today's media conference call. That brings our call on animal disease traceability to a close. Thank you.