World Food, World Enforcements, World Politics:

No sooner have most people pronounced NAIS dead-on-arrival, than a number of recent events may have breathed life back into the U.S.A.'s National Animal Identification Scheme. A combination of market forces aligned with a simplified tracking technology, and some rare positive news may have reinvigorated USDA's moribund, voluntary animal traceability initiative.

First the news headlines. Even though the U.S. House of Representatives had voted to cut off funding for the NAIS as part of the Farm Bill, a joint House-Senate conference committee agreed a few weeks ago to continue funding the program to the tune of $5.3 million for fiscal year 2010-2011. This funding is a reduction from the $14.2 million authorized for last year and less than the $14.6 million the Senate approved, but the program will continue. However, a growing number of Congressional members have made it clear they want to see effective leadership from USDA to dispel some of the more egregious NAIS rumors running unchallenged in the countryside (e.g., backyard farmers with only a few chickens for home use or sale to friends will have to tag and track each animal). They also want to expand the number of farms and ranches that have registered with the NAIS premises database from the current anemic 13% to closer to the 90% needed for an effective national system.

The second piece of news for NAIS supporters is that U.S. District Judge Rosemary M. Collyer in Washington, D.C., dismissed a civil suit filed by the Farm-To-Consumer Legal Defense Fund and a group of Michigan cattlemen against the USDA and the Michigan Department of Agriculture (MDA) over the National Animal Identification System (NAIS). The group's suit, filed last September, sought to enjoin the implementation and enforcement of NAIS. The suit was dismissed primarily because Judge Collyer ruled the program was voluntarily adopted by state departments of agriculture and was not federally mandated. Should NAIS become mandatory, sorry -- the judge has already ruled.

Even with a bit of good news, the large opposition anti-NAIS forces continue to rally their troops by claiming that NAIS is overly burdensome, and is unnecessary because existing livestock records, such as brands, ear tags, veterinary logs and auction barn records do a good and economical job of tracking cattle movements. Dr. George Teagarden, the Kansas state veterinarian, agrees that the current record-keeping system can be used "to find the animals in question, but it can be months after the fact." According to Dr. Teagarden, this time lag isn't nearly fast enough and he cautions, "A highly contagious animal disease will devastate this country." He underscores this dire prediction by noting that in Kansas in a single month cattle from all 48 of the Continental U.S. states arrive at least once a month. The speed of commerce is too fast to be handled by the paper-based system." Dr. Teagarden is also aware that history does not record any such "devastating" disease to affect Kansas since Foot & Mouth was eliminated in the late twenties. His pandemic prophecy is not a fear to the majority of livestock producers in Kansas or the nation, however those hovering inside the beltway still listen.

Apparently, a number of national governments agree with Dr. Teagarden, and recently several have made or are poised to move their systems from voluntary to mandatory. Within the last few months these key countries have made major moves towards mandatory traceability; moves that are likely to impact USA policy and USA producers.

It is important to understand the difference in other countries. Australia and Canada produce 60% more beef than their country consumes and absolutely must protect and increase export sales. Totally different, the US in 2008, according to the NASS, exported $2,876,906,000 in wholesale beef, but imported $4,764,392,000. For 21 years the US has not produced enough beef to feed the nation. The difference in the urgency to export US beef is drastic. If the US exports more beef, they, in turn must import that exact amount more to feed the nation. In that respect, the US is depending on imports and has no surplus for export at all. All beef export from the US is simply a trading process that does not profit producers, but only those directly related in the selling and buying.

Brazil. Brazil, also producing much more than is being consumed, has just announced that by 2011 all livestock producers will be required to participate in a mandatory traceability system. The new system will rely on simpler technology than the current, voluntary SISBOV system which is RFID-based, and every segment of the Brazilian supply chain, from cow-calf operator to slaughter facility including transporters will be required to provide a complete chain of custody records. Real-time electronic record-keeping is not being mandated, but standardized record-keeping whose data can be transmitted via Internet portals to centralized databases will be used. The SISBOV system will continue to exist for those who want to use it, but the expectation among Brazilian officials is that most producers will use the standardized, simplified paper-based system. On a world export basis, the countries with the most compliance costs will be the least competitive.

Korea. South Korea has instituted a traceback system on domestically raised beef, and has indicated that it would require traceback on imported product by 2010.

Japan. The Japanese government has had a domestic animal identification system in place for several years, and on three different occasions the then-minority political party, the Democratic Party of Japan, had unsuccessfully tried to pass legislation that would require the same level of traceability for imports. In August the DPJ successfully became the controlling party for the first time in a long period, and newly appointed Prime Minister Yukio Hatoyama has vowed to once again try to revise the Beef Traceability Law. He doesn't have control of the Upper House of Parliament, but he may be able to persuade his two coalition partners to go along.

How do these foreign government actions impact the U.S. meat industry? The Brazilian action probably has less direct impact on the US than do the Asian actions, because the Brazilian action was aimed at broadening acceptance of Brazilian beef in the EU. There will be some impact, though, because the largest of the Brazilian meat companies, JBS, is also one of the major U.S. meat producers so there will likely be some technology transfer from Brazilian ranches to their U.S. counterpart.

A major key to Brazilian acceptance of a mandatory livestock traceability system by Brazilian legislators was the simplification of the system of initially registering an animal and then tracking its movements from birth to export. The predecessor voluntary system in Brazil known as SISBOV is an RFID-based identification system with real-time electronic data collection and transmittal. While effective, this system is technologically sophisticated and beyond both the economic means and technological understanding of a large percentage of Brazilian producers. Embracing and actively promoting a simplified registration and tracking system by USDA, we believe, will go a long way towards helping reduce opposition to NAIS.

Even with all of these developments, make no mistake -- NAIS is still on life support, and it may still die. But when the marketplace speaks and producers begin to learn the US is and has been a net import country, and no export markets are necessary at all, NAIS becomes even closer to true and lasting death!