Animal Agriculture: Selected Issues in the 108th Congress

Animal Agriculture: Selected Issues in the 108th Congress

Order Code RL31945
CRS Report for Congress
Received through the CRS Web
Animal Agriculture:
Selected Issues in the 108th Congress
Updated October 15, 2003
name redacted
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

Animal Agriculture:
Selected Issues in the 108th Congress
Summary
Animal agriculture accounts for a significant segment of U.S. agriculture: in
2002, for example, U.S. farmers and ranchers received $94 billion from the sale of
animal products, or about half of all U.S. farm cash receipts.
Various issues important to animal agriculture have generated interest among
lawmakers in the first session of the 108th Congress. For example, under the 2002
farm bill (P.L. 107-171) many food stores in 2004 must provide country-of-origin
labeling (COOL) on ground and fresh cuts of beef, pork, and lamb. The House-
passed USDA appropriation for FY2004 (H.R. 2673) would block funding to
implement COOL for meats. The Senate committee version (S. 1427) lacks the ban.
Elsewhere, lawmakers are keenly interested in the effectiveness of U.S. food
safety and animal health programs — particularly after Canada announced, on May
20, 2003, that one of its cows had “mad cow disease” (bovine spongiform
encephalopathy, or BSE). The United States responded by banning all imports from
Canada of live ruminants and their products. On August 8, 2003, USDA announced
steps to begin lifting the ban on some meat products, based on what it said was a
scientific assessment of risk. USDA also unveiled a voluntary “Beef Export
Verification” program aimed at satisfying a related demand by Japan, the top market
for U.S. beef (and pork), for verification that U.S. beef imports are not of Canadian
origin. The COOL and BSE issues have rekindled interest in whether the United
States should move more quickly toward a universal animal identification (and,
possibly, meat traceability) system. Among other issues of interest to lawmakers:
! Consolidation and concentration continue to fuel congressional interest in the
structure and business methods of agriculture in general and animal
production in particular, and in their impacts on producers and consumers.
! Large animal production units have stirred concerns about impacts on the
environment, including surface water, groundwater, soil, and air.
! Meat and poultry products, among the fastest-growing components of U.S.
agricultural exports, have encountered foreign trade barriers that disrupt
markets and heighten trade tensions. At the same time, the Administration is
negotiating new trade agreements that would impact animal product exports.
! Court challenges to the national beef and pork promotion (“check-off”)
programs have clouded the future of these efforts.
Among the bills affecting animal agriculture are: H.R. 719, H.R. 857, H.R.
2203, H.R. 2270, H.R. 2273, H.R. 2519, H.R. 2932, H.R. 3022, H.R. 3083, S. 27, S.
325, S. 1044, S. 1103, S. 1187, S. 1202, S. 1298, S. 1407, S. 1460, S. 1626, and S.
1644. This report will not be updated; see the CRS Electronic Briefing Book on
Agriculture Policy, at [http://www.congress.gov/brbk/html/ebagr1.shtml], for recent
developments.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Economic Situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Industry Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Market Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Packer Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Mandatory Price Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Country-of-Origin Labeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Disaster Aid and Economic Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Commodity Promotion Programs (Check-Offs) . . . . . . . . . . . . . . . . . . . . . . . . . 15
Meat and Poultry Trade Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Trade Agreement Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Environmental Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Food Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Antibiotics in Animal Feed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
“Mad Cow” Disease (Bovine Spongiform Encephalopathy) . . . . . . . . . . . . . . . . 27
Animal Identification and Meat Traceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Humane Treatment of Farm Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
List of Tables
Table 1. Meat & Poultry: Selected Industry Data . . . . . . . . . . . . . . . . . . . . . . . . . 3

Animal Agriculture:
Selected Issues in the 108th Congress
Introduction
A variety of issues important to animal agriculture have generated interest
among lawmakers in the first session of the 108th Congress, many similar to matters
considered by previous Congresses. They include farm prices; weather-related
concerns such as lingering drought in some parts of the country; trade negotiations
and disputes affecting meat and poultry exports; and the environmental impacts of
large animal feeding operations. Among other issues of concern are government
oversight of meat and poultry product safety; protection of animal health, including
protection against diseases with potentially serious economic consequences; and
guarding against threats of bioterrorism. The May 2003 announcement that a
Canadian cow had “mad cow disease” (bovine spongiform encephalopathy, or BSE)
illustrated the potential for such consequences (see page 27).
Of ongoing interest are the continuing changes occurring in the livestock and
meat markets, including concentration and consolidation in livestock production.
Another issue is increasing globalization, which not only has expanded export
opportunities for U.S. producers but also exposed them to more competition from
imports. Producer groups, meat packers, and others have brought their perspectives
on the impacts — both positive and negative — to the attention of lawmakers, who
have debated and in some cases passed legislation to address these issues. For
example, the U.S. Department of Agriculture (USDA) oversees a law on mandatory
price reporting for large meat packers, and it is now implementing a law requiring
that all red meat muscle cuts and ground products (along with fresh fruits and
vegetables, peanuts, and seafood) carry country of origin information for the retail
consumer, effective September 30, 2004. Legislation limiting packer ownership or
control of animals before slaughter, and providing USDA with more tools to address
competitiveness issues in the industry re-emerged in the 108th Congress as well.
U.S. beef, pork, and poultry producers have long prided themselves as self-
reliant industries that have operated with few if any federal subsidies. Yet in recent
years, government payments have become more commonplace, at least for livestock
producers — particularly in the form of disaster aid and environmental technical and
cost-sharing support. On the other hand, such assistance is significantly less than the
billions of dollars annually provided to crop and milk producers. Moreover, animal
agriculture can be impacted by a variety of government policies like environmental
regulation, food safety laws, and trade disputes and negotiations.

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Industry Overview
Economic Situation. Animal production is a significant segment of U.S.
agriculture. In 2002, for example, U.S. farmers and ranchers received $94 billion
from the sale of animal products, or about half of all U.S. farm cash receipts. In 2000
and 2001, they received $100 billion and $106 billion, respectively. Cash receipts
from feed crops add another $20-$25 billion to the value of the sector (not including
soybeans and other oilseeds, which also are often fed to animals).
The fall in cash receipts in 2002 was due to a number of unfavorable conditions.
At USDA’s Agricultural Outlook Forum 2003, a livestock analyst summarized:
The livestock and poultry sectors experienced a stressful year in 2002 as a
confluence of weather, disease and trade disturbances affected markets. Drought
gripped much of the nation, diminishing forage and increasing grain costs. As
a result, economic conditions which might have been favorable for cow/calf
producers to hold back heifers to add to the breeding herd were overshadowed
by the continued inability of the forage base to maintain the existing herd and the
cattle cycle entered its 7th year of liquidation. Hog producers expanded
farrowings by about 3 percent in the first half of 2002 but as hog prices dropped
in mid 2002 and grain prices rose to 5 year highs, producers began liquidating
sows and reduced farrowings below year earlier levels. As a result, inventories
which were 3 percent above 2001 on June 1, finished the year 1 percent below
2001. The poultry sector was hit with several outbreaks of disease which
although having limited impacts on aggregate production, resulted in disruptions
of trade flows. Coupled with ongoing disputes with Russia on poultry imports,
exports fell sharply and pushed large supplies on the domestic market. Faced
with poor returns, the broiler industry began a sustained production cutback in
the fall of 2002.
As the sector moves into 2003, prospects for livestock and poultry are somewhat
improved. Although grain prices are higher than a year ago, a return to normal
weather may insure adequate forage supplies for the reduced inventory. Tighter
inventories should help support livestock and poultry prices during the year,
setting the stage for an expansion in inventories in the next years. Hog
inventories may begin increasing next year and cattle, the year beyond. Trade
prospects are improved. Although several countries have instituted barriers
which may limit growth in exports to those countries, it is hoped that they will
bring a degree of normalcy to trade patterns. However, a number of uncertainties
overhang any forecast in 2003. The economy remains sluggish and any
economic disruption could limit meat demand. Disease and food safety concerns
are increasing and could derail any expansion if foreign or domestic consumers
shy away from meat consumption.1
Table 1 contains more recent outlook data for meat and poultry. These newer
USDA data serve to illustrate that externalities like trade problems and animal
disease outbreaks can alter forecasts (see “Trade,” below). For example, the
Canadian BSE outbreak contributed, along with other factors, to record-high cattle
1Shagam, Shayle D. World Agricultural Outlook Board, USDA. February 21, 2003.

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prices in the fall of 2003. These types of changing conditions help to form the
backdrop for animal agriculture issues in Congress.
Table 1. Meat & Poultry: Selected Industry Data
2001
2002
2003*
2004*
Beef
Production (million lbs.)
26,107
27,090
26,649
25,375
Fed steer prices ($/100 lbs.)
72.71
67.04
81.35
79-86
Feeder steer prices ($/100 lbs.)
88.20
80.04
87-88
87-96
Consumption (lbs. per cap.)
66.2
67.6
65.2
62.2
Beef/veal exports (million lbs.)
2,269
2,447
2,628
2,660
Beef/veal imports (million lbs.)
3,164
3,218
2,891
3,430
Pork
Production (million lbs.)
19,138
19,664
19,668
19,775
Hog prices ($/100 lbs.)
45.81
34.92
39.73
38-42
Consumption (lbs. per cap.)
50.2
51.5
51.2
50.3
Pork exports (million lbs.)
1,560
1,611
1,681
1,695
Pork imports (million lbs.)
951
1,070
1,250
1,375
Broilers
Production (million lbs.)
31,266
31,895
32,210
32,894
Broiler prices (cts./lb.)
59.10
55.60
61.30
58-63
Consumption (lbs. per cap.)
76.6
80.5
80.6
81.2
Broiler exports (million lbs.)
5,555
4,807
4,916
5,100
Broiler imports (million lbs.)
14
12
13
12
Turkeys
Production (million lbs.)
5,562
5,713
5,717
5,790
Prices (cts./lb.)
66.30
64.50
61.20
61-66
Consumption (lbs. per cap.)
17.5
17.7
17.7
17.8
Turkey exports (million lbs.)
487
439
452
465
Turkey imports (million lbs.)
1
1
1
1
Source: USDA/ERS, Livestock, Dairy & Poultry Outlook, various issues; USDA, World
Agricultural Supply and Demand Estimates, various issues.
* Forecast.
Trade. The United States is the world’s leading producer, consumer, and
importer of beef, and the second leading exporter, holding 20% or more of the world
export share, according to USDA. The United States is the third leading pork
producer, consumer, importer and exporter, also with an approximately 20% market
share. It is also the leading consumer, producer, and exporter of poultry meat,

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dominating global exports with about 45% of market share. Total red and poultry
meat exports experienced strong annual gains for 16 years through 2001, reaching
nearly 5 million metric tons (MMT) valued at $7.4 billion, before declining in 2002.
Both red meat and poultry meat exports were expected increase in 2003, USDA
reports.
USDA analysts note that, while trade prospects look brighter, a number of
uncertainties have affected foreign (and domestic) demand, including sluggish
economic conditions, and animal disease and food safety concerns in some markets.
For example, beef demand in Japan, the number one foreign market for U.S. beef,
was disrupted when that country in September 2001 reported its first cases of bovine
spongiform encephalopathy (BSE or “mad cow disease”). Then, the discovery of
BSE in a Canadian cow in 2003 led to a demand by Japan (and South Korea) that
U.S. beef shipments begin to carry verification that they are of U.S. origin.2
After assessing the risks of reopening the border, U.S. officials began admitting
some (low-risk) Canadian beef products in September 2003. Officials are currently
working on a proposal that might allow younger Canadian cattle to enter, perhaps
starting in 2004. Meanwhile, USDA and trade reports indicate that, as a result of the
2003 import suspensions and other factors, U.S. cattle supplies were the lowest in a
number of years, contributing to the dramatic increases in U.S. cattle prices.
Separately, Japan has increased tariffs on beef imports, including from the
United States (see page 18 for an explanation). Existing or impending foreign-
imposed import barriers in other key export markets, which U.S. trade officials are
working to reduce or eliminate, also add to uncertainties.
Industry Structure. Consolidation and concentration have fueled ongoing
congressional interest in the structure and business methods of agriculture. Animal
production and marketing in particular have been moving toward fewer and larger
operations in recent years. Ownership or tight control of more than one phase of
production and marketing by a single firm (known as vertical integration or
coordination) also is more common.
Consolidation and concentration have occurred at varying paces within the
animal production, processing, and marketing sectors. The most dramatic changes
in recent years have occurred in the hog industry. Twenty-five years ago, the industry
had many more smaller operations that often were part of traditional crop-livestock
farms, where every phase from conception through finishing took place. Today, U.S.
hog production is characterized by a fewer number of operations that are very large
and likely specialize in only one or two production steps. Large firms more typically
own the pigs, contract their production among many growers, and likely control or
coordinate slaughter, processing, and marketing.
2In early October 2003 U.S. officials were trying to learn the details about a Japanese bull
that recently may have tested positive for BSE. See CRS Electronic Briefing Book,
Agriculture Policy, at [http://www.congress.gov/brbk/html/ebagr1.shtml], page on “‘Mad
Cow’ Disease,” for details.

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Between 1994 and 2001, the number of hog farms declined from over 200,000
to approximately 80,000. However, the hog population has remained relatively stable
at an average of 60 million head due to consolidation on larger farms: the percent of
hogs on farms with 2,000 or more head increased from 37% in 1994 to nearly 75%
in 2001, according to USDA. As of 2002, nearly half of the U.S. hog inventory was
owned by operations with more than 50,000 head.3 Post-production, the four largest
firms’ share of hog slaughter climbed from 40% in 1990 to 45% in 1994 to 57% in
2001, according to industry trade data. These packers now purchase at most a quarter
of their hogs on the spot market, compared with nearly 90% a decade earlier,
according to one survey by university agricultural economists.

By contrast, poultry production and processing has been vertically integrated for
decades, almost from its start as a commercial industry.
Structural changes in the beef industry generally have not been as dramatic in
recent years as for pork. Small operations still produce the majority of beef cattle in
the United States, and three quarters of the nation’s beef cattle spend at least some
portion of their life on a small farm, according to USDA.4 Nonetheless, the cattle
feeding industry (the phase after cow-calving and before slaughter) continues to shift
toward a small number of very large specialized feedlots that are increasingly
vertically integrated with the cow-calf and processing sectors. Feedlots with 1,000
head or more comprised 2% of the feedlots but marketed 85% of the fed (slaughter-
ready) cattle. Feedlots with 32,000 head marketed 40% of the fed cattle.5 The four
largest beef packers accounted for 68% of all slaughter in 2001, about the same as
in 1994 but up from 59% in 1990, according to industry trade statistics.6
Debate has revolved around the impacts — negative and positive — of industry
structural changes on livestock prices, on the traditional system of smaller-sized,
independent, family-based farms and ranches, and on the rural communities where
they live and do business. Also at issue are implications for consumers, for trade in
a global economy, and what role government should play in monitoring and
regulating agricultural markets. Policy makers are examining whether current laws
for ensuring competition and antitrust still are appropriate — and are properly
enforced — as well as whether new policy approaches might be considered.
3USDA, Economic Research Service (ERS). Economic and Structural Relationships in U.S.
Hog Production (Agricultural Economic Report No. 818), February 2003.
4ERS, “Where’s the Beef? Small Farms Produce Majority of Cattle,” Agricultural Outlook,
December 2002. The article provides a definition of a small cattle operation, which differs
depending upon whether it is full-time or part-time.
5ERS briefing room on cattle at [http://www.ers.usda.gov/Briefing/Cattle/Background.htm].
6The large farmer-owned cooperative Farmland Industries, which was the fourth-largest
cattle slaughter firm and the fifth-largest hog slaughter firm (source: Cattle Buyers Weekly),
declared bankruptcy protection in 2002. Smithfield Foods, the largest U.S. hog slaughter
firm, is moving to acquire Farmland Food, the cooperative’s hog business, which would
increase Smithfield’s market share from 20% to 27%. See: Tweeten, Luther, July 23, 2003,
testimony before the Senate Judiciary Committee. Tweeten’s testimony argues that the
pending acquisition will bring greater benefits than costs. It can be viewed at
[http://judiciary.senate.gov/hearing.cfm?id=869].

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Market Oversight. USDA’s Grain Inspection, Packers and Stockyards
Administration (GIPSA) is charged with oversight of animal markets, primarily
under the Packers and Stockyards Act (P&S Act) of 1921, as amended (7 USC §192).
However, the agency does not have direct antitrust authority. Rather, its role is to
maintain fair competition rules. Specifically, the P&S Act makes it illegal for a meat
packer or poultry dealer to engage in or use any unfair, unjustly discriminatory, or
deceptive practice or device; give undue/unreasonable preference/advantage to
persons or localities; apportion supply among packers in restraint of commerce; trade
in articles to manipulate or control prices, or to create a monopoly; or conspire to
apportion territory, or sales, or to manipulate or control prices. GIPSA is authorized
to investigate alleged violations in the livestock industry but not the poultry industry.
The Department of Justice (DOJ) has the authority under several statutes to
prosecute anti-competitive acts generally, including violations of the P&S Act upon
referral by GIPSA.7 Generally, the goal of antitrust regulation is to protect
competition for the benefit of consumers. Regulations are not intended to keep
existing competitors (producers) in the market, but rather to protect the market from
unlawful anti-competitive behavior. USDA has undertaken a number of actions
intended to address concentration and to promote competition, including: (1)
enhanced reporting of livestock prices and other marketing data, (2) expanded
investigations of procurement and pricing practices in the fed cattle, hog, and lamb
sectors, and of poultry companies’ contracts with growers, and (3) an overhaul of
GIPSA to strengthen its ability to investigate and pursue prosecution of anti-
competitive practices
Several initiatives have been aimed at strengthening USDA’s oversight of
livestock markets and/or studying them. A September 2000 report by the General
Accounting Office (GAO) determined that GIPSA lacks the staff, the budget, and the
expertise to investigate anti-competitive behavior in the livestock industry.8 GAO’s
recommendations included calls for an earlier integration of attorneys in the planning
and review of investigations, and for closer consultation between GIPSA, DOJ, and
the Federal Trade Commission (FTC) during investigations. A requirement that
USDA implement GAO’s recommendations for improving the administration of the
P&S Act was signed into law on November 9, 2000 (P.L. 106-472).
Examples of other federal agencies that exert various regulatory or oversight
authorities over animal industry are USDA’s Agricultural Marketing Service (e.g.,
market price reporting and country of origin labeling); USDA’s Food Safety and
Inspection Service (meat and poultry food safety); USDA’s APHIS (animal health
protection); the Environmental Protection Agency (regulation of discharges from
large animal feeding operations); and the Food and Drug Administration (animal
drug regulation).
7For a more detailed description of the various authorities and agencies involved, see CRS
Report RS20562, Merger and Antitrust Issues in Agriculture: Statutes and Agencies.
8 U.S. Government Accounting Office. RCED-00-242: Packers and Stockyards Programs:
Actions Needed to Improve Investigations of Competitive Practices. September 2000.

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Packer Ownership
Issue
More packers today are feeding animals that they own in advance of slaughter,
or are using contracts with producers to obtain their animals. Critics contend that,
as packers buy fewer animals on the spot (open or public) market, they gain excessive
market power, in part through less price transparency. They want Congress to enact
legislation that would ban packer ownership and control of livestock.
Background
Many animal producers believe that the increasing concentration and other
changes in their industries have resulted in a less competitive market environment
and contributed to lower prices than they otherwise could receive. They argue that,
as meat packers (those who slaughter and process animals) acquire more of their
production needs through direct ownership, through closed contracts with animal
feeders, or through other marketing arrangements, these packers purchase fewer
animals on the spot market. The resulting reduction in price transparency works to
their increasing disadvantage, they argue, because packers have more access to
pricing information (and the ability to use it advantageously) than do producers.
USDA and private market analysts believe other factors, like imbalances in
supply and demand, are the most significant factors in price determination. Those
who defend marketing contracts say they provide more stable producer prices than
the spot market. Opponents of a packer ban also argue that it would undermine
production efficiency gains made in recent years. They contend that production and
processing firms must become larger in order to capture lower per-unit costs when
operating at or near capacity. They argue that vertical coordination and the use of
advance marketing arrangements ensure a steady supply to fill this capacity. Such
arrangements also are a reflection of today’s agricultural markets, which are shifting
from the production of a few homogenous commodities (e.g., cattle, hogs) without
a particular market in mind, to creation of a wider variety of specific, consistently
high-quality products in response to consumer signals, they assert.
Past government-sponsored studies have been inconclusive on the relationship
between agribusiness consolidation and farm prices. One, Concentration in
Agriculture: A Report of the USDA Advisory Committee (June 1996), confirmed
widespread producer distrust of cattle pricing and procurement by packers. Among
its recommendations were improved market data collection (to reflect modern
marketing practices), better access to the data by all segments of the industry, and
more vigorous enforcement of existing antitrust laws. (Also see CRS Report
RL31553, Livestock: A Ban on Packer Ownership.)
Role of Congress
In the 107th Congress, the Senate farm bill (S. 1731; H.R. 2646 as amended)
contained a provision (Johnson amendment) that would have prohibited packers from
owning, feeding, or controlling livestock for more than 14 days prior to slaughter.

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Livestock producer-owned cooperatives and entities owned by such cooperatives, and
producer-owned packers that slaughter less than 2% of U.S. totals were exempted
from the ban. The provision was not in the House-passed farm bill (H.R. 2646), and
was deleted by House-Senate conferees from the final legislation (P.L. 107-171).
Conferees instead promised to conduct a comprehensive examination of U.S.
livestock markets and potential legislative solutions. The chairman of the House
Agriculture Committee, in August 2002, sent a letter to producer groups, economists,
packers, and others asking for answers to more than 20 detailed questions on the
current state of the markets.
The 108th Congress provided, in the consolidated appropriations act (P.L. 108-7)
covering FY2003 funding for USDA, $4.5 million for a broad, 2-year study of the
market and economic implications of laws that would prohibit packer control of
livestock. GIPSA, which is responsible for the study, was directed in report language
to tap those with industrial organization and business expertise (i.e., beyond
traditional agricultural economics).
GIPSA proposed, in its next (FY2004) budget request, an increase of $1 million
to implement a new pilot program to audit the top four steer and heifer meat packers.
Such audits, which USDA said have never been conducted, are aimed at assessing
the integrity of the packers’ financial records. However, the House-passed USDA
appropriation (H.R. 2673; H.Rept. 108-193) does not include this funding. The
Senate Appropriations Committee version (S. 1427; S.Rept. 108-107) was awaiting
floor action after the August recess. Also in the FY2004 GIPSA budget proposal is
a $500,000 request to conduct a “comprehensive, industry-wide review” of the P&S
Act and its regulations, which has not occurred since its passage in 1921, even
though “the industries it regulates have undergone dramatic structural changes,”
USDA’s budget summary states.
Meanwhile, companion bills banning packer ownership re-emerged in 2003 in
the Senate (S. 27 by Senator Grassley) and House (H.R. 719 by Representative
Boswell). These measures would prohibit packers from owning, feeding, or
controlling livestock for more than 7 days prior to slaughter. Farmer cooperative-
owned packers exempted from the ban would be those that process fewer than
100,000 hogs or 125,000 cattle per year. This number would be consistent with the
exemption level in the livestock mandatory price reporting law, now in place under
P.L. 106-78 (see page 9). Senator Grassley also introduced S. 325, to require large
packers to buy 25% of their daily slaughter needs from the spot market; and S. 1644,
to prohibit packers with annual slaughter capacity of more than 20 million swine
from slaughtering more than 10 million packer-owned swine in a calendar year.
Senator Enzi introduced a bill (S. 1044) that, among things, would require forward
contracts (also defined as those providing for delivery more than 7 days after the
contract date) to have a fixed based price on the day the contract is signed, and to
limit the size of each contract to no more than 40 cattle or 30 swine.
On July 23, 2003, the Senate Judiciary Subcommittee on Antitrust, Competition
Policy and Consumer Rights held a hearing “Agricultural Consolidation and the
Smithfield/Farmland Deal,” where the packer ownership issue was a major topic of
debate. The packer ban was the subject of a June 21, 2003, field hearing in Nebraska
held by the House Agriculture Subcommittee on Livestock and Horticulture.

CRS-9
Mandatory Price Reporting
Issue
The Livestock Mandatory Price Reporting (LMPR) law, implemented in 2001
by USDA, is due to expire in October 2004, near the end of the 108th Congress.
LMPR was passed as part of USDA’s FY2000 appropriation (P.L. 106-78), to
address the concerns of some livestock producers about low prices, increasing
industry concentration, and the availability of price information. Under the previous,
voluntary system, USDA reported data provided on a voluntary basis by meat packers
and processors on the prices they pay for animals. The new law requires large
packers to report not only negotiated sales, but also forward contract and formula
arrangement transactions.
Background and Analysis
Under the broad authority of the Agricultural Marketing Act of 1946 (7 U.S.C.
1621-1627), USDA’s Agricultural Marketing Service (AMS) had long collected
livestock and meat price and related market information, on a voluntary basis. The
agency’s trained market reporters attended public livestock auctions, visited feedlots
and packing plants, personally contacted many individual buyers and sellers, and
consulted with trade associations to develop data so buyers and sellers all would have
access to accurate and objective information from major markets throughout the
country. The information was disseminated through daily, weekly, monthly, and
annual written and electronic reports covering sales of live cattle, hogs, and sheep,
and of the wholesale meat products from these animals.
In more recent years, growing numbers of animals have been sold under private
marketing arrangements where prices have not been publicly disclosed or reported.
Some agricultural producers, believing such arrangements made it difficult or
impossible for them to determine “fair” market prices for their livestock, called for
mandatory price reporting (MPR) requirements for packers and others who process
and market meat. Opponents of MPR, including some meat packers, and other
farmers and ranchers, argued that MPR would impose costly new burdens on the
industry and could cause the release of confidential company information.
LMPR requires the reporting of market information by meatpackers who
slaughter an average of at least 125,000 cattle, 100,000 hogs, or 75,000 lambs per
year and by importers with annual imports of 5,000 tons of lamb. USDA in turn
must publish frequent, detailed reports on these transactions. Besides preempting
state laws, the measure subjects packers to civil penalties of up to $10,000 for each
violation of not reporting, and requires USDA to collect and publish at least monthly
information on retail prices for meat and poultry products. The law also increases the
number of required reports. New reports under LMPR include the prior day’s swine
market; forward contract and formula marketing arrangement cattle purchases;
packer-owned cattle and sheep information; sales and purchases of imported boxed
lamb cuts; and live lamb premiums and discounts. (AMS continues to collect
information under the voluntary system. However, only data not published under the
mandatory system are still published under the voluntary system.)

CRS-10
Role of Congress
The 108th Congress could be asked to consider legislation extending mandatory
price reporting. If so, among the issues likely to arise are: whether the program has
in fact brought more transparency to livestock markets, and is more effective at
transmitting price information, than the longstanding voluntary system; whether the
cost and administrative burdens outweigh benefits; and whether price data problems
that arose with USDA’s implementation of the program have since been fixed, as
officials assert. (See also CRS Report RS20079, Livestock Mandatory Price
Reporting.)

CRS-11
Country-of-Origin Labeling
Issue
Federal law requires most imports, including many food items, to bear labels
informing the “ultimate purchaser” of their country of origin. Various raw
agricultural products generally have been exempt. The 2002 farm bill (P.L. 107-171)
contains a requirement that many retailers provide, starting on September 30, 2004,
country-of-origin labeling (COOL) on fresh fruits and vegetables, red meats, seafood,
and peanuts. The program is voluntary until then. Some food industry and producer
groups want Congress to override the mandate; such language (banning funds for
implementation of COOL for meats only) is in the House-passed version of the
FY2004 USDA appropriation (H.R. 2673). Other producer groups are seeking
retention of the mandate.
Background and Analysis
In the 107th Congress, the House-passed farm bill (H.R. 2646) had included
COOL for fresh produce only. The Senate-passed version extended it also to meats,
peanuts, and seafood. Conferees in 2002 essentially accepted the Senate coverage.
Proponents have argued that COOL will help U.S. farmers and ranchers because
consumers, if offered a clearer choice, would choose domestic over foreign farm
products. They argue that the economic benefits to U.S. producers will outweigh
implementation costs, which, they believe, have been grossly overestimated by
USDA and other opponents. Supporters maintain that consumers have a right to
know where their food is from, particularly in light of recent animal health and food
safety concerns such as outbreaks of bovine spongiform encephalopathy (BSE, or
“mad cow disease”) in some other countries — many of which, they add, have their
own COOL requirements.
Critics counter that COOL is a thinly disguised trade barrier intended to increase
the costs of imports, and that it will undermine the United States’ own efforts to
reduce foreign trade barriers and expand markets for U.S. producers. Critics argue
that implementation burdens will far outweigh any economic benefits to U.S.
producers and those who market their commodities; and that the U.S. meat industry
in particular will be less competitive with poultry, which is not covered by COOL.
Opponents also maintain that mandatory COOL does not increase food safety and
public health (nor does it protect animal health); they contend that scientifically based
protection programs, not geographical labels, are the answer.
Role of Congress
The House Appropriations Committee in June 2003 reported the FY2004 USDA
appropriation (H.R. 2673; H.Rept. 108-193) with language prohibiting the use of
funds for implementing mandatory COOL for meats only. On July 14, 2003, the
House defeated a floor amendment to delete the committee-approved prohibition,
208-193, before clearing the entire bill. In the Senate, the committee-reported
version (S. 1427; S.Rept. 108-107) lacks the spending ban. Several proposals to

CRS-12
amend COOL have been offered. One bill (H.R. 2270) would extend the COOL
requirement to poultry and goat meat, and would permit animals born prior to
October 1, 2004, to be exempt from coverage. Another proposal (H.R. 3083) is
intended to ease producer recordkeeping requirements, delete the current law’s
prohibition against a USDA-imposed mandatory animal identification system, and
eliminate third-party audit provisions.
The Senate Agriculture Subcommittee on Marketing, Inspection, and Product
Promotion held a field hearing on COOL on April 22, 2003 in Joplin, Missouri. The
House Agriculture Committee held a hearing to review COOL on June 26, 2003, and
its subcommittee on Livestock and Horticulture held another (mainly on non-meat
commodities) on October 1, 2003.
(For more information see CRS Report 97-508, Country-of-Origin Labeling for
Foods; and CRS Report RL32012, Animal Identification and Meat Traceability.
Also, the General Accounting Office recently issued a report examining the cost
impacts and other aspects of COOL. See GAO-03-780, Country-of-Origin
Labeling: Opportunities for USDA and Industry to Implement Challenging Aspects
of the New Law.)

CRS-13
Disaster Aid and Economic Assistance
Issue
Early in the 108th Congress, lawmakers passed a consolidated FY2003
appropriations measure (P.L. 108-7) that includes a $3.1 billion agricultural disaster
assistance package. A portion of the funds is earmarked for livestock producers,
supplementing actions taken earlier by the Administration to help compensate them
for losses due to more than 2 years of drought. Continuing weather-related and/or
revenue losses could create pressure for additional legislative action.
Background and Analysis
Severe drought adversely impacted crop and livestock production throughout
the U.S. farm belt in 2001 and 2002; it continued in some areas in 2003. The 107th
Congress debated, and the 108th Congress ultimately provided, ad hoc assistance for
producers suffering disaster-related losses during the period. Proponents of the
additional assistance had argued that ongoing programs for natural disaster assistance
like crop insurance, the noninsured assistance program, and emergency disaster loans
were inadequate, particularly for livestock producers. Others raised concerns about
the cost of such additional aid, particularly in the face of a large federal budget
deficit.
Of the $3.1 billion in P.L. 108-7 for emergency farm assistance, $250 million
is specifically provided to compensate livestock producers for 2001 or 2002 forage
or feed losses caused by natural disaster. The program is being administered like the
ad hoc 1999 livestock assistance program (LAP). To receive LAP aid, a producer
must be in a county declared a disaster by the President or Secretary of Agriculture,
and must choose between either 2001 or 2002 losses. USDA announced that
program signup will run from August 6 through October 24, 2003. It is intended to
address the needs of producers not adequately covered by the livestock compensation
program (LCP) (see below). Producers cannot, however, receive payments under
both programs.9
P.L. 108-7 also removes date restrictions for LCP eligibility. USDA
implemented this program administratively on October 1, 2002, to provide direct
payments to producers of cattle, sheep, goats and buffalo who were in a county
declared a disaster area by the Secretary between January 1, 2001, and September 19,
2002. Payments were set at $18 per adult beef cattle, $13.50 for certain livestock
over 500 pounds, and $4.50 per sheep or goat, with per person payment limits of
$40,000. Those with qualifying gross income over $2.5 million were ineligible.
P.L. 108-7, extended LCP to eligible producers in any county declared a disaster
area between January 1, 2001, and February 20, 2003 and who did not already
receive LCP assistance. Signup for the expanded program was April 1 through June
2003. Catfish producers also are now eligible for a total of $34 million in program
9Information and updates on these programs can be found at [http://disaster.fsa.usda.gov/].

CRS-14
funds, to be provided through state agencies. The original LCP was estimated by
USDA to cost $752 million. In early December 2002, USDA administratively made
available another $185 million, bringing available funding to $937 million. As of
August 7, 2003, USDA had made more than $1 billion in LCP payments.
Funding for the program originally was provided through USDA Section 32
funds, which originate from a portion of Customs receipts and which typically are
used to buy surplus agricultural commodities for distribution to domestic nutrition
programs. Payments to producers in newly qualified counties will be funded through
USDA’s Commodity Credit Corporation (CCC). P.L. 108-7 also provided $250
million in CCC funds to compensate Section 32 for a portion of the past payments.10
USDA also has exercised its standing authority to release other disaster-related
livestock assistance. For example, in fall 2002, it released more than 250 million
pounds of nonfat dry milk (NDM) that it had acquired earlier under the dairy price
support program. The stocks were provided to mills where eligible livestock
producers could use vouchers to buy feed, valued at $150 million, made from the
NDM. In early April 2003, the Secretary of Agriculture announced the release of
more NDM stocks to approximately 100 counties in nine states where extreme
drought persisted: Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico,
South Dakota, Utah, and Wyoming. In mid-June, the program was expanded to a
total of 134 counties in 10 states (Idaho was added). In other administrative actions
USDA by late summer 2003:
! Had been issuing more than $16 million in refunds to eligible producers in 28
states whose Conservation Reserve Program payments were reduced last year
for haying and grazing on CRP lands;
! Had created a Drought Coordinating Council to monitor ongoing conditions
and to coordinate responses;
! Had announced pilot programs extending revenue insurance to fed or feeder
cattle producers in 11 states (these are risk management pilots that will
provide price protection coverage from 70-95% of expected ending value,
with the Federal Crop Insurance Corporation subsidizing 13% of a producer’s
premiums). A similar pilot for slaughter hog producers is entering its second
year.
Role of Congress
Whether the 108th Congress will determine a need for additional disaster aid in
2003 and/or 2004 remains to be seen. For example, S. 1626 is a proposed emergency
aid bill that would include coverage for livestock-related losses. Deliberations on
this or other measures will be influenced by, among other things, weather and
economic conditions in farm states, federal spending constraints, and electoral
politics. Underlying such deliberations are not only the effectiveness of current
federal emergency disaster aid, but also what role, if any, the government should play
in helping farmers and ranchers manage risk.
10See CRS Report RS20235, Farm and Food Support Under USDA’s Section 32 Program.

CRS-15
Commodity Promotion Programs (Check-Offs)
Issue
Over the past 35 years, Congress has enacted laws authorizing generic
promotion (“check-off”) programs for various farm products. Supporters view the
programs, which fund advertising, research and other market-enhancing activities,
as self-help; government involvement and cost are minimal. Producers and, often,
importers, are required to fund them through assessments, usually deducted from
revenue at time of sale (thus the name check-off). The U.S. Department of
Agriculture’s (USDA’s) role is largely limited to administrative and oversight duties.
Both beef and pork are among the 15 or so agricultural commodities subject to
federally-mandated assessments under free-standing research and promotion
programs. A vocal segment of these industries has been challenging the mandatory
aspects of check-offs, which, they contend, are “taxes” for activities they would not
underwrite voluntarily. Groups representing beef and pork producers have mounted
legal actions in the federal courts. Supreme Court rulings on two similar cases
involving mushrooms, and peaches and nectarines, provide some precedent for the
current pork and beef cases. These legal actions have created much uncertainty about
the check-off programs’ future.
Background and Analysis
In 1997, the Supreme Court ruled (in Glickman v. Wileman Bros. & Elliot, Inc.)
that check-offs for peaches and nectarines did not violate plaintiffs’ First Amendment
rights. However, in 2001 the Court found (in United States v. United Foods, Inc.)
that the mushroom check-off was a violation of the First Amendment and therefore
unconstitutional because it forced producers to pay for commercial speech. The
Court reasoned that, unlike the 1997 case, the mushroom check-off is a stand-alone
program whose principal objective was advertising. The peach and nectarine order,
on the other hand, rather than a stand-alone promotion program, is part of a more
comprehensive regulatory scheme, i.e., one of the marketing orders authorized by the
Agricultural Marketing Agreement Act of 1937 as amended. (For an explanation see
CRS Report RS20512, Federal Marketing Orders for Fruits, Vegetables, and
Specialty Crops.)
These Supreme Court decisions loom over legal challenges of the beef and pork
check-off programs. On June 21, 2002, a U.S. District Court in South Dakota agreed
that the national beef check-off (which began in 1986 and has funded, among other
things, the “Beef — it’s what’s for dinner” campaign) also violates the First
Amendment. The court ordered all beef assessments (amounting to a total of more
than $80 million annually) to halt by July 15, 2002, but the order was stayed while
the U.S. Government appeals the ruling. A panel of the Eighth Circuit Court of
Appeals, on July 8, 2003, upheld the lower court’s ruling. On the other hand, on
November 1, 2002, a U.S. District Court in Montana ruled in a separate case that the
beef check-off law is constitutional.

CRS-16
On October 25, 2002, a U.S. District Court in Michigan ruled that the pork
check-off law (the program began in 1986) also is unconstitutional because it violates
complainants’ rights of free speech and association; this ruling also was stayed
pending appeal. The pork program collects a total of about $55-$60 million annually.
The Supreme Court ultimately could again be called upon to resolve both the beef
and pork cases.
Also pursuing regulatory avenues, pork check-off opponents coordinated by the
Campaign for Family Farms requested that USDA conduct a producer referendum
on whether or not to continue the program. In August-September 2000, USDA
conducted a non-binding referendum, which, the Department determined, garnered
enough votes to end the check-off. However, the National Pork Producers Council
(NPPC) led a court challenge to block a final termination rule. Subsequently, USDA
on February 28, 2001, announced a settlement with the suit’s plaintiffs allowing the
program to continue with modifications. The agreement is aimed at ensuring that the
national pork promotion board operates separately from NPPC, and that the board
will be more responsive to producers’ concerns about its activities. In addition,
USDA is to conduct a survey no earlier than June 2003, and if 15% of producers and
importers favor a binding referendum, it must be held within one year.
Role of Congress
Other than passing authorizations enabling producer groups to set up check-off
programs, and periodically conducting oversight, lawmakers have not become deeply
involved in the programs — in contrast to their work on major farm subsidies, where
high taxpayer costs and other issues have made the policies more visible. That could
change if check-offs continue to stir controversy and the courts overturn their
legality. (See CRS Report 95-353, Federal Farm Promotion (“Check-off”)
Programs. USDA’s Agricultural Marketing Service also has information about the
check-off programs on its website at [http://www.ams.usda.gov/lsg/mpb/lsrp.htm].)

CRS-17
Meat and Poultry Trade Disputes
Issue
The United States is one of the world’s leaders in meat and poultry trade (see
page 3). Meat and poultry products are among the fastest growing components of
U.S. agricultural exports. However, at the same time that the industries’ reliance on
foreign markets is increasing, some countries have instituted barriers that have
disrupted exports, threatened future growth, and heightened trade tensions.
Background and Analysis
Russia. Russia announced that it was imposing import quotas on poultry and
tariff-rate quotas on beef and pork, effective April 1, 2003. U.S. exports of poultry
to Russia, by far our largest poultry customer, already had declined by approximately
a third in 2002 (from a USDA-reported record of approximately one million metric
tons), after Russia banned them effective March 10, 2002, ostensibly out of concerns
about product safety. During extensive negotiations, U.S. officials several times
announced that these safety issues had been resolved. However, differences over
technical requirements lingered into fall 2003 — long after the Russian agriculture
minister told U.S. reporters that most U.S. plants had met the required health
standards and that all of them would be inspected by July 1, 2003.
Russia’s new world import quota for poultry was reported to be 744,000 metric
tons (MT) for the rest of 2003 (May-December), with annual quotas of 1.05 million
MT to be in place for 2004 and 2005. Much of this total poultry quota was expected
to be allocated to the United States. Although the United States sells little pork or
beef to Russia, new tariff-rate quotas on these products would effectively block any
future U.S. growth there, industry officials had contended. In September 2003, the
U.S. Trade Representative (USTR) announced what was characterized as a favorable
U.S.-Russia market access agreement for poultry, beef, and pork. However, as of
mid-October, different Russian officials were sending conflicting reports as to
whether such an agreement had been reached.
Mexico. U.S. pork and poultry exports to Mexico have been jeopardized by
developments in the wake of the scheduled January 1, 2003, end to import duties for
those and other agricultural products under the North American Free Trade
Agreement (NAFTA). Mexico historically is the third largest market for U.S. poultry
meat. In late January 2003, the Administration announced a U.S. industry-supported
agreement on poultry that established a 6-month safeguard tariff-rate quota (TRQ)
of 50,000 MT on U.S. chicken leg quarters entering Mexico, with an over-quota tariff
of 99%. The Administration then negotiated a longer-term agreement to head off a
Mexican safeguard investigation that could have resulted in tariffs of up to 240%.
This longer-term agreement, announced in July 2003, sets the TRQ for U.S. chicken
leg quarters at 46,950 MT from July-December 2003, with over-quota tariffs of
98.8%. Annual TRQs will be in effect for an additional 4 years: 101,000MT in 2004
with an over-quota tariff of 79%; gradually changing to a TRQ of 104,060 by 2007
with an over-quota tariff of 19.8%. (In-quota tariffs are zero, and the TRQs will not
be in effect after 2007 under the agreement.)

CRS-18
Mexico, the second largest and fastest growing U.S. pork export market, also
launched on January 7, 2003, an anti-dumping investigation of U.S. pork imports.
Preliminary findings, likely this year, could result in high duties and depress U.S.
exports.11 USTR announced on June 16, 2003, the filing of a WTO case against
Mexico challenging antidumping duties it opposed on U.S. beef in April 2000;
already pending is a U.S. challenge of the beef duties under Chapter 19 of NAFTA.
Meanwhile, Mexican cattle producers have petitioned the government for a safeguard
investigation on imported beef; Mexico is the second largest U.S. beef export market
after Japan.
European Union. A longstanding dispute with the European Union (EU) is
its ban since 1989 on the import of U.S. beef produced with hormones. In 1997, the
WTO ruled that the EU cannot ban, without scientific justification, such imports.
The WTO authorized U.S. retaliation of $117 million in prohibitively high U.S.
duties on a variety of EU agricultural imports. The EU offered to compensate the
United States by enlarging the 20,000 MT quota for non-hormone treated beef in lieu
of lifting the ban. The United States has maintained that such compensation, unless
contingent on removing the ban, is unacceptable. On October 15, 2003, The Wall
Street Journal reported that the EU will soon announce that it now has scientific
evidence to support the ban — an indication that the issue is far from resolved.
Japan. The United States and other countries (Australia, New Zealand, and
Canada) that export beef to Japan were hit by an increase in Japanese tariffs on
frozen and chilled beef imports, effective August 1, 2003, to 50% from their current
38.5%. Under so-called “snapback” tariff provisions of the WTO trade rules, Japan
can impose the higher tariffs if imports increase by 117%. Japan used, as the base
period for calculating this increase, the time when Japanese consumption was
unusually low due to the BSE outbreaks (see above). The higher tariffs are likely to
remain in effect until March 31, 2004, according to USDA officials.
Role of Congress
Generally, Congress conducts vigorous oversight of the Administration’s trade
dispute activities. On the Russian meat and poultry issue, for example, some
Members of Congress signed letters to the President urging him to be more
aggressive in resolving the problem. Meanwhile, Section 407 of the Trade and
Development Act of 2000 (P.L. 106-200) directs the U.S. Trade Representative
(USTR) periodically to revise the list of products subject to trade retaliation, on the
premise that rotating products subject to higher duties will expose a broader swath
of an offending country’s economy to penalties, thereby creating more pressure for
compliance. This so-called “carousel” provision was enacted partly out of frustration
over the EU beef hormone and other disputes, but the USTR so far has not employed
the provision. Lawmakers also could seek to withhold support for other
Administration trade initiatives if they are dissatisfied with trade dispute resolution.
11Mexico did announce in late May 2003 that it was lifting its anti-dumping duties on
imports of live U.S. hogs, which had been in effect since 1999. However, anti-dumping
duties on pork meat are still possible this year, U.S. officials have indicated.

CRS-19
Trade Agreement Negotiations
Issue
The Administration has signed free trade agreements (FTAs) with Chile and
Singapore. These agreements were approved by both Houses of Congress in 2003
under expedited fast-track procedures spelled out in the Trade Act of 2002 (P.L. 107-
210).12 Other bilateral negotiations are being pursued with Central America,
Morocco, the Southern Africa Customs Union, and Australia, as are multilateral
negotiations to secure a free trade agreement for the Americas (FTAA) and new
world trading rules under the auspices of the World Trade Organization (WTO). Fast
track procedures would also apply to these agreements.
Farm interests, including those representing animal agriculture, generally
support the objectives of such agreements, which for U.S. producers mean removing
import tariffs and other barriers that impede sales of their products in foreign
markets. However, many U.S. producers have become increasingly wary of trade
agreement negotiations. Some have expressed concern that trading partners have not
fulfilled their commitments under existing agreements; others worry that new
agreements will expose their own industries to intense competition from imports here
at home. Such concerns are at play as lawmakers consider newly negotiated
agreements in the 108th Congress.
Background and Analysis
A major aim of FTAs is expanding market access through tariff elimination.
Agricultural interests will be concerned about the scope of commodity coverage in
such FTAs and the time periods during which tariffs would be phased out. U.S.
agricultural export and import sectors will have different concerns about commodity
coverage and schedules, and negotiated agreements will reflect a balance between
U.S. and FTA partners’ interests.
Agreements that open world markets to more U.S. exports are critical to the
U.S. meat and poultry sectors, where foreign sales have offered the greatest
opportunities for growth. As noted earlier, total red and poultry meat exports
experienced strong annual gains for 16 years through 2001, reaching nearly 5 million
metric tons (MMT) valued at $7.4 billion, before declining in 2002. Red meat and
poultry meat exports are expected to begin increasing again in 2003, USDA reports.
At the same time, U.S. meat and poultry producers are concerned about any
negotiations that effectively would provide foreign producers with more access to
U.S. markets without offering at least comparable access to U.S. products in their
own countries. One view shared by some animal and other agricultural groups is that
12For details on fast-track procedures for considering trade agreements and the relationship
of fast track to agricultural negotiations, see CRS Report 97-817 ENR, Agriculture and Fast
Track or Trade Promotion Authority, November 7, 2002. For further information on the
Chile, Singapore, and other negotiations, see also the CRS electronic Trade Briefing Book
at [http://www.congress.gov/brbk/html/ebtra1.shtml].

CRS-20
the current U.S. strategy, of completing a series of separate bilateral or regional trade
agreements before the WTO multilateral trade negotiations are concluded, would
create such unfavorable conditions. Bilaterals are primarily about reducing tariffs.
Many of the trade barriers encountered by U.S. agricultural exporters involve
nontariff issues, such as what they view as unjustified sanitary and phytosanitary
(SPS) measures, and high foreign export and domestic subsidies.
In the view of these groups, a successful multilateral (Doha) round, now
scheduled to be completed at the end of 2004, could more effectively address such
issues and would be more likely to create greater long-term export growth than the
bilateral and regional measures. However, progress in the Doha round has fallen far
short of expectations.
Negotiations for a free trade agreement with Australia are of particular concern
to U.S. animal producers. Negotiations are not expected to be completed until 2004
at the earliest.13 The United States has a long-running agricultural trade deficit with
Australia. U.S. exports to Australia were valued at $338 million in 2002 compared
with between $400 million and $500 million annually 10 years earlier. Meanwhile,
from just over $1 billion annually 10 years earlier, Australia exported $1.9 billion in
agricultural products to the United States in 2002. Approximately $1.1 billion of the
2002 value were red meats, mainly beef and some lamb. Australian beef is now
subject to U.S. tariff rate quotas. Besides their concern about even greater Australian
competition in these products, U.S. producer groups contend that overly rigid
Australian SPS measures have blocked U.S. shipments of pork and chicken, among
other agricultural products.
Role of Congress
Fast track procedures for congressional consideration of legislation to
implement trade agreements include strict time limits on debate, no amendments, and
an up or down vote. Congress must be notified of the Administration’s intent to
negotiate a trade agreement or to sign an agreement. The 2002 Trade Act requires
extensive consultation between the Administration and Congress before and during
negotiations. Fast track, or Trade Promotion Authority (TPA) as it is currently
called, enables the President to assure trading partners that negotiated agreements
will not be changed when presented to Congress. At the same time, extensive
consultation and oversight requirements ensure that Congress will have a role in the
negotiations.
As Congress monitors ongoing negotiations and considers implementing
language for new agreements, groups representing meat and poultry producers can
be expected to ensure that their perspectives and concerns are heard. Prospective
bilateral and regional trade agreements, e.g., with Australia and parts of Latin
America, also could receive lukewarm receptions from farm-state lawmakers if they
perceive that meat and other agricultural trade disputes (see page 17) are not being
resolved to their satisfaction.
13CRS Report RS21476, U.S.-Australian FTA Negotiations. This report also contains
information on the agricultural aspects of the negotiations.

CRS-21
Environmental Issues
Issue
With animal agriculture increasingly concentrated in larger, more intensive
“factory-style” production units, concerns arise about the impacts of operations on
the environment, including surface water, groundwater, soil, and air. (A related
issue, largely dealt with at the local level, concerns odors from large feedlots near
residential areas,) Contaminants from manure, if not properly managed, also can
affect human health. Policies to address such concerns include regulation, primarily
of large feedlots under the Clean Water Act (CWA; 33 USC 1251 et seq.), as well as
technical and financial assistance for producers. At issue are the effectiveness of
these policies, and the appropriate roles for the public and private sector, in
mitigating any adverse environmental effects.
Background and Analysis14
Animal manure frequently is used beneficially on farms to fertilize crops and
add nutrients to the soil. However, as livestock production has become denser and
more spatially concentrated, the amount of manure nutrients relative to the
assimilative capacity of land available on farms for application has grown. Of the
estimated 238,000 large U.S. animal feeding operations (AFOs), swine and poultry
have seen the most growth. From 1982 to 1997, numbers of hogs raised in large
AFOs increased 12-fold; the greatest geographic concentrations now are in
Oklahoma, Arkansas, North Carolina, northern Iowa, and southern Minnesota.
During the same period, large-AFO poultry output increased 218%, with
concentrations now in southeastern and western coastal states; and Minnesota and
surrounding areas.
Waste discharges from large concentrated animal feeding operations (CAFOs)
into the nation’s waters are regulated under the CWA.15 The Act’s rules governing
these discharges had not been revised since the 1970s, despite the many changes of
the past two decades in animal agriculture. In the late 1990s, the Environmental
Protection Agency (EPA) initiated a review of the regulations, in part to satisfy the
settlement terms stemming from an earlier lawsuit brought by environmental groups.
The Clinton Administration proposed rule revisions in December 2000, and the Bush
14Source: Primarily CRS Report RL31851, Animal Waste and the Environment: EPA
Regulation of Concentrated Animal Feeding Operations (CAFOs).
15Under EPA regulations, an AFO is a facility where livestock or poultry are raised or
housed in confinement under the following conditions: (1) animals are confined or
maintained for a total of 45 days or more in any 12 month period; and (2) crops are not
sustained in the normal growing season over any portion of the lot or facility (i.e., animals
are not pastured or on rangeland). CAFOs are AFOs that meet minimum size thresholds
(number of animals) plus one of the following conditions: (1) pollutants are discharged into
navigable waters through a manmade device; or (2) pollutants are discharged directly into
waters of the United States that originate outside of and pass over, across, or through the
facilities or otherwise come into direct contact with the confined animals. CAFOs account
for less than 5% of AFOs but raise more than 40% of confined U.S. livestock.

CRS-22
Administration issued a final, revised set of regulations on December 12, 2002 (the
final rule was published in 68 Federal Register 7175-7274, February 12, 3003).
The new rules are expected to require an additional 11,000 CAFOs to have
pollution discharge permits and manure management plans, compared to 4,500 under
prior rules. Overall, the final rules are generally viewed as less stringent than the
proposal, a fact that strongly influences how interest groups have responded to them.
Agriculture groups have said that the final rules are workable, and they are pleased
that some of the proposed requirements were scaled back, such as changes that would
have made thousands more CAFOs subject to regulation. However, some continue
to question EPA’s authority to issue portions of the rules. Many states had been
seeking more flexible approaches than EPA had proposed and welcomed the fact that
the final rules retain the status quo to a large extent. Environmentalists contend that
the rules rely too heavily on voluntary measures to control runoff and fail to require
improved technology. Environmentalists and several agriculture industry groups
have filed lawsuits challenging the rules in a number of different federal courts.
One concern of environmentalists is that no regulations address CAFO air
pollutant emissions such as ammonia, hydrogen sulfide, and methane. Scientists
generally believe such emissions have environmental impacts, but most believe more
research is needed to determine public health impacts. Industry groups note that
water pollution control technologies, the subject of CAFO rules, do not address air
emissions, and proven air abatement technologies are needed before adopting rules.
Livestock operators face costs for manure handling requirements and for
developing and implementing nutrient management plans. Among several programs,
a key source of federal money is the Environmental Quality Incentives Program
(EQIP) administered by USDA’s Natural Resources Conservation Service. EQIP
provides technical assistance, cost sharing, and payments to aid producers with
conservation and environmental improvements and practices. Under the 2002 farm
law (P.L. 107-171), annual mandatory spending for EQIP is increasing, from $200
million to $1.3 billion by FY2007. Sixty percent of available funding is targeted to
livestock (the rest to crops). FY2003 appropriations for EQIP are $695 million.
According to the General Accounting Office, neither EPA nor the states have the
staff and resources to adequately implement the water quality rules (Livestock
Agriculture, Increased EPA Oversight Will Improve Environmental Program for
Concentrated Animal Feeding Operations (GAO-03-285), January 2003).
Role of Congress
As the rules are implemented, and if new environmental concerns about animal
agriculture arise, Congress could be asked to address such issues as: the adequacy of
EQIP and other funding to help producers, states, and the EPA with compliance and
implementation; the need for research to encourage new technologies for managing
animal waste and to measure air quality impacts and priorities; and oversight of EPA,
state, and farmer implementation of the rules. Also, do the revised rules reflect
congressional expectations on dealing with animal waste? Are amendments needed
to clarify or modify lawmakers’ current views? (For example, one proposed bill, S.
1407, seeks to strengthen further the regulation of CAFOs.)

CRS-23
Food Safety
Issue16
USDA’s Food Safety and Inspection Service (FSIS) is responsible for inspecting
most meat, poultry, and processed egg products for safety, wholesomeness, and
proper labeling. The Food and Drug Administration (FDA) is responsible for
ensuring the safety of all other foods, including seafood. After September 11, 2001,
much of Congress’ and food inspection agencies’ attention focused on assuring that
food and the U.S. agricultural production system are adequately protected from
bioterrorism. Preceding the concern with bioterrorism, Congress for years has paid
close attention to the efforts of FSIS and the meat and poultry industry to address the
ongoing problem of naturally occurring microbiological contamination, which is
responsible for outbreaks of severe and sometimes fatal foodborne illness. A
longstanding issue is the effectiveness of these efforts and the need, if any, for policy
changes (such as increased FSIS resources) to improve them.
Background and Analysis
Since January 2000, all federally inspected slaughtering and processing plants
are operating under the HACCP (for Hazard Analysis and Critical Control Point)
inspection system. It is intended to prevent contamination by microbial pathogens
at points along the manufacturing chain where it is most likely to occur. HACCP
complements, not replaces, the traditional system of inspection under existing
statutes, where inspectors examine every animal before and after slaughter, and are
also present at least daily in plants that process meat and poultry after slaughter.
Data show that HACCP may reduce the presence of pathogens in facilities that
produce meat and poultry products. Yet, outbreaks of foodborne illness and sporadic
recalls of ground beef and other meat and poultry products indicate the ongoing
difficulty of preventing contamination of the products themselves. Although records
show that packing plants for the most part have been abiding by the mandatory
standards for pathogen levels, major players in the industry argue that USDA’s
regulations exceed the HACCP concept by establishing what they view as
impractical, expensive testing regimes and unrealistic standards. They also maintain
that adding HACCP while maintaining existing requirements increases regulatory
burdens for meat and poultry processors, with no tangible improvement in public
health. Consumer advocates have remained supportive of HACCP, contending,
among other things, that the testing program is effective at reducing pathogens
because it forces companies to emphasize prevention in their operating plans.
On April 24, 2003, the National Academy of Sciences (NAS) made available
its latest report on food safety. Scientific Criteria to Ensure Safe Food reiterates the
Academy’s longstanding recommendations for better connections between public
health agencies and food safety regulatory agencies, and for a science-based,
16Source: Primarily CRS IB10082, Meat and Poultry Inspection Issues, updated regularly.
See also CRS Report RL31853, Food Safety Issues in the 108th Congress.

CRS-24
transparent strategy for developing food safety criteria. The report contains several
specific recommendations that NAS believes FSIS should implement as soon as
possible to counter the hazard of E. coli O157:H7 in ground beef.
Concerns about bioterrorism preparedness after September 11, 2001, brought
renewed attention to a decades-long debate over whether the 12 federal agencies and
roughly 35 laws governing food safety should be consolidated into a single food
safety entity. Consumer groups favor provisions to make federal regulatory oversight
of food safety more consistent across all types of food products, however that might
be achieved. Food processors argue that: (1) increased regulation will not result in
increased food safety until scientifically valid microbiological standards can be
determined; (2) reorganization alone will not necessarily improve public health; and
(3) reorganization or physical restructuring of agencies would create huge logistical
problems that could actually interfere with the efficacy of the current system.
Role of Congress
On June 12, 2002, the President signed into law the Public Health Security and
Bioterrorism Preparedness and Response Act (P.L. 107-188). Under the law,
Congress authorized such sums as may be necessary for enhanced FSIS inspection
activities in FY2003 and beyond. The act contains extensive provisions concerning
FDA food inspection also. Toward the end of the 107th Congress, new legislation
to give FSIS mandatory recall authority was introduced in both chambers (S.
2803/H.R. 5230), and debate recommenced on recall proposals introduced earlier
(H.R. 3127, H.R. 4834). Legislation also was introduced to counter a successful
lawsuit by the meat industry challenging pathogen performance standards; S. 2013
would have given FSIS statutory authority to use Salmonella bacteria test results as
a basis for enforcement actions under HACCP.
In the 108th Congress, the consolidated FY2003 funding bill (P.L. 108-7),
contains $759.8 million for FSIS. The Administration’s FY2004 budget request
proposes $797 million for FSIS. Of the $42 million increase over the FY2003
appropriation, $25.6 million would support hiring more inspectors and increasing
laboratory capacity for analyzing food samples for possible acts of bioterrorism,
among other things. The $42 million increase would be funded through new industry
user fees. New fee increases are often proposed but usually not adopted by Congress.
The House-passed FY2004 USDA appropriations bill (H.R. 2673) would provide
$785.3 million for FSIS. The version (S. 1427) reported by the Senate
Appropriations Committee would provide $783.8 million.
Meanwhile, bills introduced by Senator Harkin (S. 1103) and by Representative
Eshoo (H.R. 2203) would clarify USDA’s authority to prescribe industry
performance standards for reducing pathogens in meat, meat products, poultry, and
poultry products, and to enforce HACCP requirements, sanitation requirements, and
the performance standards. Another (H.R. 2273) by Representative Udall would
provide USDA with authority to mandate recalls of unsafe meat and poultry. A bill
(S. 1187) by Senator Clinton would require that ready-to-eat meat or poultry products
not produced under a scientifically validated program to address Listeria
monocytogenes be required to bear warning labels for certain at-risk consumers. S.
1202 (Schumer) would require USDA to adopt a traceback system for food animals.

CRS-25
Antibiotics in Animal Feed
Issue
For some 50 years, livestock and poultry producers having been using
antibiotics to prevent and control diseases, promote more efficient growth, and
address animal well-being. Their use has paralleled the gradual shift in the United
States and in other leading animal producing countries from production on smaller,
more diversified farms, to much larger, specialized, and usually confined, animal
feeding operations. Some scientists, regulators, and others have argued that misuse
or overuse of antibiotics in animal agriculture can create antimicrobial resistance to
related drugs used to treat human diseases — and they should be phased out. Others,
including many animal producers, counter that such assertions have not been
scientifically proven, and that an unfounded ban would cost producers millions of
dollars in production costs and harm the quality of animal food products.
Background and Analysis17
Although antimicrobial agents are used to treat illnesses both in humans and
animals, these agents are also used for nontherapeutic purposes, i.e., in animal feed
so that chickens, cattle, and pigs grow faster, use less feed, and, sometimes, disease
prevention. Concern is that such uses can also promote genetic changes that make
microorganisms resistant to antibiotics used to treat human illnesses. The Food and
Drug Administration (FDA) states that due to the diffuse use of antimicrobials, it is
difficult to assess precisely whether the growing resistance in foodborne pathogens
is attributable to the use of antimicrobial drugs in food producing animals or some
other use. Animal producers and the animal drug industry have long argued that a
far more significant cause of antimicrobial resistance is medical doctors, who over-
prescribe antibiotics for people who don’t need them.
The FDA has established standards in its drug approval process for examining
the safety and efficacy of non-therapeutic uses of antimicrobial drugs (both new and
existing ones).18 But critics have complained that the agency is not moving
aggressively enough. These critics were buoyed by a World Health Organization
(WHO) report, issued in August 13, 2003, concluding that phasing out antimicrobial
growth promoters could be accomplished without major negative economic
consequences for food animal producers in countries (like the United States) with
systems similar to Denmark’s. The WHO expert panel had studied their phaseout in
the late 1990s in Danish cattle, broiler and pig production, and found “The program
has also been very beneficial in reducing antimicrobial resistance in important food
animal reservoirs. This reduces the threat of resistance to public health.”19
17Source: CRS Report RL31853, Food Safety Issues in the 108th Congress. For further
information on the topic see also CRS Report RL30814, Antimicrobial Resistance: An
Emerging Public Health Problem.
18See [http://www.fda.gov/cvm/index/other/nadaappr.htm].
19World Health Organization, Impacts of Antimicrobial Growth Promoter Termination in
(continued...)

CRS-26
Animal health industry officials said the WHO report theorizes rather than
proves that there are human health benefits from discontinued use of sub-therapeutic
antibiotics, and that Denmark has tended to downplay the adverse effects it has had
on animal health and production costs. The current FDA plan to examine individual
antibiotic products, whose effects are not all the same, to determine their safety is
more scientifically appropriate, they add.20
Also fueling the debate is a decision by the McDonald’s food chain to require
its meat suppliers to end the use of about two dozen specific growth promoters by the
end of 2004.
Role of Congress
Defining appropriate legislative responses may be more difficult given the
complexity of the antimicrobial resistance problem, the limited data to assess the
problem, and the disagreement over the seriousness or the extent of the health threat
of resistance. Nonetheless, there is interest in Congress in the issue. For example,
on July 25, companion bills that would ban sub-therapeutic uses of most antibiotics
in animal feed were introduced into the Senate (S. 1460) and House (H.R. 2932).
Among other provisions, FDA would have to withdraw approval for each such drug
within 2 years unless it has been proven harmless; and USDA would be authorized
to provide financial assistance to farms, especially small family farms, to help them
make the transition.
19(...continued)
Denmark in the Late 1990s,S 2003.
20“WHO says Denmark’s experience validates growth promoter phaseout,” Food Chemical
News, August 18, 2003.

CRS-27
“Mad Cow” Disease
(Bovine Spongiform Encephalopathy)
Issue
On May 20, 2003, Canada announced that one cow in a northern Alberta herd
had tested positive for bovine spongiform encephalopathy (BSE, or “mad cow”
disease). USDA immediately banned Canadian live cattle and beef imports; in
August, it began steps to gradually reopen the border to such products. Congress is
monitoring closely U.S. efforts to protect U.S. agriculture and consumers from the
entry here of BSE, as well as the economic and trade implications of the incident.
Background and Analysis
A variety of animal diseases have the potential to inflict extensive physical and
economic harm on animal agriculture, and to cause foreign countries to bar U.S.
imports. Some of them pose health risks to humans as well. USDA’s Animal and
Plant Health Inspection Service (APHIS) is charged with protecting the health and
marketability of animals and animal products.
The Canadian BSE case is illustrative of the difficulties that could confront U.S.
producers and APHIS in the event of certain disease outbreaks. BSE is a slowly
progressive, incurable disease affecting the nervous system of cattle. It was first
diagnosed in Great Britain in the mid-1980s, where it not only economically
devastated the beef industry there and in other European countries, but consumption
of products from infected animals also was linked later to some cases of a similar
(and fatal) human disease. No case has ever been detected in the United States since
surveillance began in 1989.
When Canada announced its BSE case, U.S. officials quickly blocked imports
of all Canadian ruminants and ruminant products pending further investigation.
Canadian authorities quarantined the farm and others; 2,700 cattle have been killed.
So far, no more animals have exhibited BSE. An intensive investigation was
conducted to determine the cow’s origin (later found to be a Saskatchewan farm) and
movements, how its remains were processed, whether other herds might have been
infected, and the possibility that contaminated feed may have been the source.
On August 8, 2003, USDA announced that it would accept applications for
permits to import selected ruminant products from Canada, including boneless beef
from cattle under 30 months old and boneless veal from calves no older than 36
weeks at slaughter; and boneless sheep and goat meat from animals under 12 months
old. USDA’s decision was based on what it characterized as a “thorough scientific
analysis” that found minimal risk from these imports. Canadian beef began crossing
the border again in September 2003. The ban on live Canadian cattle remains.
USDA said it was working on proposed conditions for opening the border to younger
animals, which possibly could occur sometime in 2004.
International trade considerations complicated the U.S. decision to reopen the
border. For example, officials in Japan, the largest U.S. beef export market, insisted

CRS-28
that the United States, effective September 30, 2003, verify that all of its beef exports
there were not of Canadian origin. At the same time that USDA announced the
border opening, it also unveiled a new “Beef Export Verification” (BEV) program
as a voluntary, user-fee funded service. Exporters desiring to sell beef to Japan (or
any other country that may request similar documentation) can apply for BEV
certification from AMS after satisfying a list of requirements so that the agency can
verify that their beef is from cattle slaughtered in the United States. USDA argued
that the verification program was not scientifically justified but was developed to
meet foreign market demands.21
Prior to the Canadian case, U.S. officials already had taken a series of
precautionary steps to keep BSE from entering the United States and its food supply,
and developed an emergency response plan to implement if a case is found. USDA
since 1989 has banned the import of all live ruminants and most ruminant products
from countries where even a single case of BSE is known to exist (Canada will be the
first “BSE” country permitted to import some beef). In 1991, USDA banned the
import of rendered by products from ruminants. As of December 2000, the import
of all rendered animal protein products (whether from ruminants or not) is prohibited.
The Food and Drug Administration (FDA), which regulates animal feed ingredients,
banned the feeding of virtually all mammalian proteins to ruminants in 1997.
Additionally, USDA’s Food Safety and Inspection Service (FSIS) requires inspectors
to divert from processing any cattle showing suspicious clinical symptoms of BSE
and send their brains for laboratory testing.22
Role of Congress
The 107th Congress updated and consolidated a variety of old animal quarantine
and health laws by passing the Animal Health Protection Act as part of the 2002 farm
law (P.L. 107-171; 7 U.S.C. 8301 et seq.). P.L. 108-7, which contained the FY2003
appropriation for USDA and related agencies, includes a $62 million increase for
APHIS Animal Health Monitoring and Surveillance activities ($133 million total) in
order to increase the agency’s surveillance against and readiness for a biological
attack against U.S. agriculture. The 107th Congress also passed the Animal Disease
Risk Assessment, Prevention and Control Act of 2001 (P.L. 107-9), which required
USDA to lead an interagency working group to assess and report on the economic
impacts if BSE or several other diseases were to be introduced into the United States;
federal prevention efforts; the risks to public health from possible links of BSE to
human illness; and the sufficiency of legislative authority to control these animal
diseases.23 The handling of the recent BSE crisis in Canada could be instructive for
those pondering additional measures.
21For more information, see USDA news release, August 8, 2003. Further clouding the
situation were reports in early October that the Japanese had found BSE in a young bull.
22 For more information on these actions, and more recent ones being undertaken in response
both to a study issued in 2001 by the Harvard Center for Risk Analysis, and to the Canadian
BSE situation, see CRS Report RS20839, Mad Cow Disease: Agriculture Issues.
23For the group’s recommendations, see Animal Disease Risk Assessment, Prevention, and
Control Act of 2001 Final Report.

CRS-29
Animal Identification and Meat Traceability
Issue
Should U.S. animal agriculture improve its capability to trace the movement of
livestock and meat products from their sources through the marketing chain? If so,
what type of system might be appropriate? Should it be mandatory? What would it
cost, and who pays? Interest in such questions has grown in the wake of such
developments as the discovery of bovine spongiform encephalopathy (BSE) in a
Canadian cow; a related demand by Japan for verification that U.S. beef imports are
of U.S. origin; and ongoing concerns about bioterrorism. Implementation of a new
country-of-origin labeling (COOL) law for meats and other products also has resulted
in an interest in increased animal identification (ID) capabilities.
Background and Analysis
Animal ID refers to permanently marking individual, or groups of, farm animals
so that they can be tracked from birth to slaughter. Animal ID is one segment of
meat traceability, generally the tracking of identifiable products through the entire
marketing chain to the ultimate consumer. Animal ID and meat traceability are not
programs in themselves; rather, they may be useful tools in animal health, food
safety, quality assurance, and country-of-origin labeling programs.
Many producers already keep records on the identities of each of their animals.
However, no nationwide comprehensive U.S. animal ID system is in place, although
many animals have been identified as part of animal disease programs. A
government-industry task force is developing a national animal ID system. It has
stated that the health of U.S. herds “is the most urgent issue ... and therefore, is the
most significant focus” of its proposed plan. It is anticipated that USDA’s Animal
and Plant Health Inspection Service (APHIS), along with states and industry, will
oversee the system. It initially will identify all premises where cattle are located, to
help in more quickly finding and eradicating animal diseases. The effort is to evolve
into a program identifying individual animals, herds, and/or flocks. The task force
effort is focused on animal disease tracking. Policy issues include whether it should
be mandatory, its cost and who should pay. There is also interest in a system that can
trace meats to their birth animals, where concerns also include the legal and
economic impacts on producers and those who process and market meat products.
The task force notes: “Other countries are rapidly developing systems that are
already being used as technical barriers to trade. These systems are rapidly becoming
the world standard. To avoid the loss of international markets, the United States
needs to be consistent with the animal tracking systems of our international trading
partners.... As our export potential grows, the need to quickly trace suspected foreign
or emerging diseases will be more important than ever.”24
24National Food Animal Identification Task Force, National Identification Work Plan,
November 2002. It and a revised 2003 version can be viewed at [http://www.usaip.info/].

CRS-30
The European Union (EU), where BSE cases have been concentrated (most in
the United Kingdom), now has an extensive (but, critics charge, ineffective)
mandatory program. Beginning in December 2001, Japan began tagging all beef and
dairy cattle and developed a database to track each animal’s birth and movement.
Current Japanese country of origin labeling already identifies U.S. beef in food stores
(Japan’s newer demands would require other documentation). Australia, a major
exporter and U.S. competitor, has a largely voluntary but universal system that
identifies all cattle, and uses carcass and boxed meat labeling procedures that can
trace meat back to the animal’s origin. Australia is moving toward a fully integrated
program linking animal electronic ID devices, product barcoding, and a central
electronic database. Exporting countries Argentina and Canada can identify primary
animal production sites and most individual cattle, respectively, and also can trace
back carcasses and meat cuts to slaughter and processing establishments.
Role of Congress
In the 108th Congress, much of the debate over expanded animal ID has occurred
within the context of COOL. The 2002 farm bill (P.L. 107-171) requires many
retailers to provide country-of-origin information on a number of raw products,
including fresh and ground beef, pork, and lamb, starting September 30, 2004. In
reviewing COOL implementation issues (see page 11), lawmakers have learned more
about how animal ID can be used for other purposes, most notably to deal with
harmful animal diseases. They also have become more aware of trade implications
surrounding animal ID and meat traceability. As Japanese officials have made clear,
the Canadian case of BSE has critical implications for U.S. producers. The BSE or
other unforeseen events might further focus attention on animal ID and meat
traceability (one proposed bill, S. 1202, would require traceability for all meat and
poultry).
(For further information see CRS Report RL32012, Animal Identification and
Meat Traceability.)

CRS-31
Humane Treatment of Farm Animals
Issue
APHIS is responsible for enforcing the Animal Welfare Act (AWA; 7 U.S.C.
2131 et seq.), which requires minimum standards of care for most warm-blooded
animals bred for commercial sale, used in research, transported commercially, or
exhibited to the public. The AWA specifically excludes commercial farm animals
from coverage. Animal protection activists in the United States periodically seek
legislation modifying and/or curtailing many practices that have long been considered
by U.S. producers as acceptable and necessary.
Background and Analysis
No federal law prescribes standards for on-farm handling and care of animals.
Two statutes, the Humane Slaughter Act (7 U.S.C. 1901 et seq.), enforced by
USDA’s Food Safety and Inspection Service (FSIS), and the so-called Twenty-Eight
Hour Law (45 U.S.C. 71-74), enforced by APHIS, do govern, respectively, the
humane slaughter and transport of livestock (but not poultry). Most states have their
own animal anti-cruelty laws, which often but not always apply to farm animals; such
laws also generally do not prescribe on-farm treatment standards.
Many animal protection groups contend that today’s intensive farming systems
perpetuate standard practices that are harmful to animals’ well-being. Examples of
such practices include rearing large numbers of livestock or poultry in close
confinement with little room for natural movement and activity; isolating veal calves
in crates; and performing surgery such as docking hog tails and trimming poultry
beaks so that confined animals do not hurt each other. Some groups advance the
more controversial argument that humans have no right to use animals for any
purpose, even food.

Agricultural producers have long maintained that they understand their animals’
welfare needs and address them adequately. They express concern that efforts by
poorly informed critics could lead to the imposition of mandatory regulations harmful
to their industry and the animals alike. Support for science, education, and voluntary
guidelines are more effective ways of assuring animal welfare, they believe.
The U.S. approach differs from that in Europe, where the European Union and
many of its member states have adopted legislation laying down minimum standards
for farm animal care and transport. In the United States, surveys suggest that most
people (and many animal protection groups) still support agricultural uses of animals,
but many also appear to support some government action to insure humane treatment.
Role of Congress
Over the past several decades, bills to require changes in the treatment of
animals on the farm and during transport and slaughter have been offered in
Congress, although few have advanced beyond the House and Senate Agriculture
Committees. The committees in the past have held hearings on various farm animal

CRS-32
welfare issues, and the panels generally have expressed support for voluntary rather
than more coercive methods of assuring adequate care.
As of August 2003, several proposals had been offered in the 108th Congress.
H.R. 857 (Sweeney) would prohibit the transport or slaughter of horses destined for
human food consumption. On July 14, 2003, Representative Ackerman, during
House floor debate on the FY2004 USDA appropriations bill (H.R. 2673), introduced
an amendment to bar the use of federal funds for inspecting, slaughtering, and
processing all nonambulatory (or “downer”) livestock. The amendment was defeated
by a vote of 199-202. Earlier, on June 19, 2003, Representative Ackerman offered
a similar proposal as a free-standing bill. Senator Akaka introduced companion
legislation on the same date (H.R. 2519/S. 1298).
In January 2003, Congress earmarked, in the FY2003 USDA appropriation (part
of P.L. 108-7), $5 million specifically for FSIS to hire 50 new inspectors to oversee
compliance with the Humane Slaughter Act. The agency had come under criticism
in 2002 for what some view as lax enforcement of the Act. The 107th Congress
included, in the 2002 farm law (P.L. 107-171), a sense of Congress resolution calling
for full enforcement of the Act (Sec. 10305). The law also contains a requirement
that USDA investigate the treatment of nonambulatory livestock (commonly called
“downers”) with authority to issue regulations if findings warrant (Sec. 10815).

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