STATEMENT OF

THE AMERICAN FARM BUREAU FEDERATION

TO THE

SENATE AGRICULTURE, NUTRITION AND FORESTRY COMMITTEE

REGARDING

INTERSTATE SHIPMENT OF STATE-INSPECTED MEAT

Presented by

Harry Pearson

President

Indiana Farm Bureau Federation

April 6, 2000

Good morning. My name is Harry Pearson and I am a corn, wheat and soybean farmer from Hartford City, Indiana. I am president of the Indiana Farm Bureau and a member of the board of directors of the American Farm Bureau Federation.

I am pleased to be here today to discuss the interstate shipment of state-inspected meat.

The American Farm Bureau Federation is the nation's largest general farm organization with over 4.9 million member families.

This issue is one of great importance to our farmers and ranchers, and we certainly support efforts to align the federal and state implementation of meat and poultry inspection laws to allow meat and poultry products to be distributed in interstate commerce.

The mission of the U.S. Department of Agriculture's Food Safety Inspection Service (FSIS) is to provide appropriate regulatory safeguards and services to ensure that all meat, lamb, and poultry products for interstate or foreign commerce meet food safety standards. Authority is provided to move state-inspected products in interstate commerce under the Talmadge-Aiken Act which has worked well in some states. However, as state and federal budgets become more limited, the time is right for increased coordination between state and federal meat inspection programs. Farm Bureau applauds Senators Daschle and Hatch for introducing S. 1988, the Federal Meat and Poultry Inspection Requirements Act of 1999. We support that bill.

Many of the products inspected in a state-inspected facility are specialty products. Production of these items is not always economically feasible for large volume operators. Availability of these specialty products to consumers is limited since the small operator typically falls under the state inspected program and is not allowed to ship those products across state lines. The ability to ship these products in interstate commerce will benefit livestock producers, small processors and consumers while stimulating economic development in rural communities.

Allowing interstate movement of state-inspected meats would benefit livestock producers by creating more competition among packers and processors, thereby increasing the opportunities to market their animals. Four major packers account for more than 80 percent of cattle slaughtered. Fifteen years ago, the large packinghouses accounted for only 36 percent. Many Farm Bureau members believe that competitive pricing activities of the livestock industry have been reduced due to the high concentration of processing by the four major packers. By allowing state-inspected processors to move their meat interstate, the small and mid-size processing plants could expand their operations due to increased market opportunities.

USDA's Packer Concentration Panel determined that allowing interstate shipment of state-inspected meat would provide additional competition in the marketplace. When local producers have more competitive markets for their animals, they receive higher prices for their livestock.

Farm Bureau has supported and worked diligently to pass trade agreements such as NAFTA and GATT. We are now working towards approval of Permanent Normal Trade Relations for China. World trade has increased by opening market opportunities for imported products as well as exported products. However, foreign processors have greater access to U.S. markets than do our own state-inspected meat and poultry processors. This seems contrary to domestic market expansion and disruptive to our own small businesses struggling to compete.

We strongly believe in food safety and in maintaining the highest level of consumer confidence in the safety of U.S.-produced meat and poultry products, but, this debate is not about food safety. State - inspected meat and poultry plants must already meet or exceed federal standards for food safety. This debate is about market access by U.S. food processors to U.S. markets on terms that are no stricter than those that foreign exporters must meet. The safety of our nation's food supply is of vital importance. We believe that the safety of U.S.-produced products will be maintained by the Food Safety Inspection Service and that consumer confidence in the safety of our food can be increased by aligning the federal and state implementation of meat and poultry inspection laws.

Several years ago we supported and worked closely with Congress and the administration to pass the Hazard Analyses and Critical Control Point (HACCP) system into law. HACCP is now fully implemented with every meat processing plant in this country operating under a HACCP system. This law has helped ensure the safety of our meat and poultry products through a science-based process rather than the age-old method of "sight and odor" detection by inspectors. Now is the best time to further the coordination of meat inspection systems and allow the entry of state-inspected meat into interstate commerce.

The American Farm Bureau Federation encourages Congress to pass S. 1988 and allow the Food Safety Inspection Service to take the necessary steps to facilitate the movement of state-inspected meat across state lines.