Testimony of J. Patrick Boyle

President and CEO, American Meat Institute

Before the

Senate Agriculture Committee

April 6, 2000

Thank you for inviting the American Meat Institute, representing manufacturers of more than 70 percent of this nation's beef, pork, lamb, veal and turkey products, to testify before this committee today. Our 300 packer and processor members range from small, family-owned businesses to large, multi-national conglomerates. Two-thirds of our member companies have less than 100 employees. All of our member companies operate federally inspected plants.

AMI has long opposed a blanket lifting of the current prohibition against interstate shipment of state inspected meat and poultry. This policy stems from our firm belief in the need for a single, uniform, seamless system for oversight of this nation's meat and poultry industry. Currently, we believe there are actually 27 different meat and poultry inspection programs in the U.S. - one federal program, covering about 6,000 plants in all 50 states, plus 26 different state programs, covering about 3,000 plants in 26 states. We would like to see a single, food safety oversight program for all 9,000 of these plants in all 50 states.

This desire for a uniform system was clearly in the minds of those who drafted S. 1988, and in the minds of the U.S. Department of Agriculture, which developed a white paper in 1998 and 1999, outlining the elements necessary for creating a more seamless system than we have today. I believe one clear outcome of the many discussions and public hearings held on this issue over the past four years is the strong message that greater uniformity is required before we contemplate interstate shipment of state inspected meat and poultry products.

While I commend Senators Hatch and Daschle and their cosponsors for introducing S. 1988, a bill that recognizes the need for a single uniform meat and poultry inspection system that retains an important role for the 26 existing state systems, my member companies have serious concerns about several bill components.

But before I outline our concerns - all of which, by the way, have to do with national uniformity - I would like to submit to you a vision of the future of our business that further underscores the need for a strong, uniform oversight system. Simply put, it is the Internet.

The business transaction of the future - between manufacturer and retailer, or consumer, or between suppliers and manufacturers - will most likely be electronic. What does this mean for small businesses? It means that world markets for their products are only a mouse-click away. It means direct marketing opportunities without having to invest hundreds of thousands of dollars to produce and mail catalogs. It means the opportunity to sell across state and national borders with minimal government intervention. It means new access to foreign and domestic customers without having to invest thousands in travel or advertising. It means faster transactions, the ability to bid for goods and services, and it means huge reductions in transaction costs.

AMI just announced a partnership with FoodUSA.com, a global meat and poultry exchange for manufacturers, wholesalers, distributors and retailers. Believe me, AMI's members are keenly aware of the opportunities that such a business-to-business, global Internet exchange offers. This is a brave new world for all businesses - large and small. And while it offers phenomenal access to markets, literally at one's fingertips, it also demands uniform national oversight programs - at the very least where product safety is concerned. We are on the brink of a complete transformation in the way our industry conducts business and, in AMI's opinion, now is the time to transform our 27 different meat inspection programs into a single, uniform program.

To create a truly uniform system, AMI's members believe that the current bill must incorporate references to the many notices, directives and other federal requirements that are not regulations, but that constitute "nuts and bolts" of the system under which federal plants operate. To be truly uniform, state plants must meet these same requirements and the bill should explicitly state this.

Also, to be truly uniform, we believe states should not be permitted to set regulatory requirements that are different from or in addition to the federal requirements. Everyone should be subject to identical requirements.

National uniformity should also be exercised with respect to thresholds for entry into the state inspection system. The bill would let each state set its own threshold; we believe there should be a uniform threshold.

AMI has taken an official position of opposing S. 1988 unless key problems could be addressed. I must say that we have had some very productive discussions with our friends at NASDA and in the processing and producer communities, and I am hopeful that we will be able to work together with all affected groups to achieve the true consensus necessary for this bill to succeed.

Our bottom line is that the current system with 27 different programs does not offer the uniform oversight necessary for the way business will be conducted in the coming years. We need a single, uniform meat and poultry inspection system, and AMI will support nothing less.