Mr. Michael Eickman,

Eickman's Processing Co. Inc., Seward, IL

American Association of Meat Processors

Illinois Association of Meat Processors & 18 other state meat associations

Public Hearing on S.1988, New Markets for State-Inspected Meat Act

April 6, 2000 Room 328 Russell Senate Office Building

The Honorable Richard Lugar, Chairman & Members, Senate Agriculture Committee

328A Russell Senate Office Building, 1^st & C Streets NE Washington, DC 20510

My name is Michael Eickman. I am the owner and operator of Eickman's Processing Co. Inc., Seward, IL. My business is a second-generation, small state-inspected meat processing plant in Northern Illinois, about 20 miles from the Wisconsin state line.

I am here today to voice my support for S.1988, the New Markets for State-Inspected Meat Act, and tell you why this proposed law should be passed. I ask that this legislation be marked up, passed by the Senate and House, and signed into law. I am speaking for myself, the American Association of Meat Processors, of which I am treasurer; and the Illinois Association of Meat Processors. Also supporting this legislation are state meat processors associations from the following states: Indiana, California, Iowa, Kansas, Minnesota, Montana, New York, North Carolina, Oklahoma-Texas, South Carolina, South Dakota, Wisconsin, Wyoming, Louisiana, Ohio, Texas, Virginia, and the National Country Ham Association. A large percentage of plants that belong to AAMP are state-inspected. Virtually all the plants in the Illinois State Association and the 18 other state associations mentioned are state-inspected plants.

There are more than 2,500 very small plants across the United States that are state inspected! These are small businesses who are being hurt - restricted - because the Federal Meat Inspection Act (FMIA) says that they can sell their meat only within the state they're located. Yet my plant and these thousands of other small plants are unfairly discriminated against for no reason. We meet the highest food safety standards. All state inspected plants began operating under the new Hazard Analysis Critical Control Point (HACCP) meat and poultry inspection program this past January. The 25 state inspection programs we operate under are "at least equal to" U.S. Department of Agriculture Inspection by law - USDA makes sure of that. In fact, some state inspection programs actually require more than the USDA inspection program. But for some reason, we are not allowed to ship our products across state line.

Page 2...Michael Eickman/AAMP/IAMP Testimony on S.1988

I am happy to see that USDA is supporting S.1988. We compliment the Administration for drafting this legislation. Under this legislation, all inspected meat and poultry in the United States will be inspected under a national system enforcing a single set of requirements, and where state inspection programs will enforce the federal regulations. In fact, most state inspection programs already enforce the federal regulations. There are no distinctions between federal and state inspection requirements. Any debate over what constitutes "at least equal to" inspection

versus "same as" inspection will be meaningless. So there is no reason to keep these restrictions on state plants.

Let me tell you a little about my plant. My plant is located in Seward, IL, a small town about 85 miles west of Chicago. My business is a small, state-inspected slaughtering and processing plant, that provides products farm-to-table. I am only 20 miles from the Wisconsin state line. I can ship my products for hundreds of miles in Illinois, all the way to the borders of Missouri, Kentucky and Indiana. But I can't sell my product in St. Louis, which is just across the river from Belleville, IL, where I can sell it. I've been in the business for 35 years. I now own and operate the plant that my Dad had for 50 years.

Now the people who are against interstate shipment - the giant meat packers and the people who represent them, will say "Why not go federal? Then you can ship anywhere?" My response is: "Why should I have to go federal?" I like working with the state people. Not because their inspection is easier - the Illinois program is just as tough as USDA and even has requirements that USDA doesn't - but it's easier to deal with people in Springfield, IL and in districts around the state, rather than having to go to USDA.

The fact is that USDA is encouraging the state inspection programs to continue, and to grow. USDA wants to see state inspection programs that were shut down to come back. That's part of the goal of this legislation. That's why it's increased the percentage of subsidy of state programs in this bill from 50 to 60 percent. And over the last couple of years, a few states have revived their inspection programs, and more may be on the way. USDA also believes that state inspection programs are better suited to handle very small plants like mine than USDA inspection.

One of the goals of the New Markets for State-Inspected Meat Act is also to help make small and very small meat and poultry businesses more viable. The meat and poultry industry is becoming more and more concentrated and centralized in the hands of fewer and fewer mega-sized companies. This is true today not only in the meat business, but in agriculture and in all businesses and industry in the United States. As small businesses, we must be able to expand our presence in the marketplace, or we will die. It has come down to these alternatives: either take us over, or take off these restraints that are on us for no logical reason! Allowing state-inspected meat and poultry products to be sold in interstate commerce will also help the marketing of products that may be identified with certain states. That would help counter the increasing consolidation in Agriculture that Agriculture Secretary Dan Glickman has warned against and expressed great concerns about. As far as the quality of our products goes, our products have won awards both in international and national competitions.

Page 3...Michael Eickman/AAMP/IAMP Testimony on S.1988

This legislation is also needed to help the small cattle, hog, lamb and veal and poultry producers and herdsmen across the United States. The continuing consolidation in the meat packing industry leaves these small ranchers and farmers with fewer markets for their animals. This puts further pressure on them, which they don't need because of already-low commodity prices. It is the small processors that are the buyers of animals from small producers. Large meat packers are not purchasing animals from small producers, because they already have contracts with large producer sources. Permitting interstate shipment by allowing small meat processors to sell their products in a national marketplace will help these farmers and ranches to have better options to sell their animals at better prices. It will also help invigorate the economy in rural areas all across the United States. In many of these areas, small producers are hurting. Also, small meat processing plants provide a great deal of employment in those areas.

The change in the law is also needed because the rules right now don't make any sense. For example, I can't ship beef, pork, lamb or veal out-of-state because of the federal restrictions. But I can ship products made from so-called exotic animals - buffalo, ostrich and others - which are inspected the same exact way by state inspectors - anywhere in the world. Why? Because inspection of products from "non-amenable species" is not required by USDA, so these products are immune from the rules. Does that make any sense? If I can ship these products anywhere, why can't I ship pork, beef and lamb?

Why are meat and poultry products produced overseas allowed to have unrestricted access to the marketplace in the United States, while hard-working owners of American small businesses are denied the same opportunity. How can this be justified?

There are a couple of other reasons I'd like to talk about. Legalizing interstate shipment of state-inspected meat and poultry products will actually help, not hurt, large meat packing companies. As small and very small processors, we buy products and materials from large meat packing plants, such as boxed beef, for example. Then we further process this meat into other products. So ending the ban on interstate shipment will actually help the large companies, not hurt them. It will benefit both of us.

The fact is, the only reason that the large industry has to be against interstate shipment is a fear of competition with very small meat plants. When I hear that a few of these huge packers are afraid of us, that's very hard for me to understand. The large meat packers in the United States have 95 percent of the market, leaving small and very small meat packers with the rest, only 5 percent. Surely these big companies can't feel threatened by us little people!

Opponents of interstate commerce for state inspected products say that small federal plants will be hurt by interstate shipment. AAMP has a large number of federal plants as members. AAMP's President last year, Tom Dewig, operator of Dewig Meats, Haubstadt, Indiana, says he supports interstate shipment for state-inspected meat plants, that it will help the entire meat industry,

both large and small. He says it will help small plants remain viable participants in the industry, and help them grow. Dewig says growth will be good for everyone!

Page 4...Michael Eickman/AAMP/IAMP Testimony on S.1988

For example, he says that not only can small state-inspected plants buy product from large plants for further processing, but it works the other way as well. Federal plants can buy product from state-inspected plants for processing. So it works both ways and helps everyone.

Thank you for asking me, the American Association of Meat Processors (AAMP), the Illinois Association of Meat Processors and 18 other state meat processor associations to offer testimony in favor of the New Markets State-Inspected Meat Act of 1999. We urge the Committee to approve the legislation and mark it up for passage by the full Senate. You will be helping small business in the United States to survive and prosper!

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