November 22, 2002, Issue X, Number 46

A publication of the National Association of State Departments of Agriculture
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NASDA WAREHOUSE TASK FORCE HOLDS FIRST MEETING IN KANSAS CITY

SHARPE DECLARED WINNER IN SOUTH CAROLINA RACE

ADAMS SPEAKS AT NATIONAL FARM BILL CONFERENCE

SENATE CLEARS HOMELAND SECURITY BILL

HOUSE AND SENATE ELECT LEADERS

CONGRESS APPROVES PORT SECURITY BILL

CONGRESS ADJOURNS, PUSHES FUNDING BILLS TO NEW YEAR

HOUSE AG COMMITTEE CHAIRMAN ANNOUNCES RETIREMENT

USDA SEEKS COMMENTS ON INCOME LIMITATION RULE

FDA ISSUES NOTICE ON CWD-POSTIVE ANIMALS AND ANIMAL FEED

PESTICIDE BRIEFS

TRADE BRIEFS

USDA NEWS

State News--MICHIGAN LEADING WAY IN ELECTRONIC ANIMAL IDENTIFICATION EFFORTS; FIRST YEAR OF EFFORTS SHOWCASES TECHNOLOGY'S ROLE, VALUE IN DISEASE ERADICATION, FOOD SAFETY

State News--MOHLER RECEIVES FFA HONOR


Past Issues

November 8, 2002

November 1, 2002

October 25, 2002

October 18, 2002

October 14, 2002

October 4, 2002

September 27, 2002

September 20, 2002

September 13, 2002

September 6, 2002

August 30, 2002

August 23, 2002

August 19, 2002

What's New on the NASDA Website

NASDA's Warehouse Task Force webpage

2002-2003 NASDA Calendar

Biosecurity and Farm Bill Implementation Guides

Materials for NASDA 2002

Disaster Assistance Letter

MARK YOUR CALENDARS

  • NASDA's Midyear Legislative Conference, January 31 to February 4, 2003, The Renaissance Washington D.C. Hotel, Washington, D.C.
  • Tri-National Agricultural Accord, April 1 to 3, 2003 (new dates), Montreal, Canada

U.S. SUPPLIER LIST ONLINE
A "one-stop" information source for U.S. exporters and international buyers to research, plan, and evaluate potential trade opportunities. For information, go to NASDA's website at http://www.nasda.org/. FAS' "Exporter's Matrix: Handbook for U.S. Agribusiness" export guide is available. Please contact NASDA to request a copy.


NASDA WAREHOUSE TASK FORCE HOLDS FIRST MEETING IN KANSAS CITY

        On November 13, Co-Chairs Illinois Agriculture Director Joe Hampton and Montana Agriculture Director Ralph Peck convened the NASDA Warehouse Task Force in its first meeting to hear from interested producer groups and industry organizations about the final rule of the U.S. Warehouse Act of 2000 (USWA) published by USDA in August 2002. In addition to the co-chairs, seven other task force members attended. They included Missouri Agriculture Director Lowell Mohler, Idaho Agriculture Director/Secretary Patrick A. Takasugi, Kansas Agriculture Secretary Jamie Clover Adams, Iowa Agriculture Secretary Patty Judge, Kentucky Agriculture Commissioner Billy Ray Smith, Minnesota Agriculture Commissioner Gene Hugoson, and Louisiana Agriculture Commissioner Bob Odom. The states of Michigan, Indiana, and Georgia were also represented at the meeting. More than 40 people attended the task force meeting.
        The purpose of the task force is to resolve issues that have developed due to USDA's final rule. Strong concerns have been expressed on whether the federal rules can adequately protect grain producers from losses in warehouse bankruptcies and whether federal licensing would allow states to maintain functions such as assuring accurate scales and collecting fees for commodity research and promotion programs at federally licensed warehouses. The final rule included a section that reads "Compliance with state laws relating to the warehousing, grading, weighing, storing, merchandising or other similar activities is not required with respect to activities engaged in by a warehouse operator in a warehouse subject to a license issued in accordance with this part." This provision and its interpretation have caused concern among several organizations.
        The first meeting was an opportunity for interested organizations to bring forward their questions, comments, and concerns about the final rule and also to provide ideas on how to resolve issues that have developed. USDA was well-represented at the meeting. Participants included: Deputy Under Secretary for Farm and Foreign Agricultural Services Hunt Shipman; Deputy Administrator for Commodity Operations Bert Farrish; Candace Thompson, deputy director, Warehouse and Inventory Division; Roger Hinkle, USWA Program Manager; George Aldaya, director, Kansas City Commodity Office; Bill Turbitt, deputy director, Kansas City Commodity Office; and John Voss, general counsel.
        Farrish provided an overview of the USWA and how USDA has developed rules and regulations over the course of many years. He opened his remarks by stating the main themes for warehouse regulations which include: producer protection; facilitation of orderly trade; and an open, transparent, and improved regulatory environment. Other themes included a cooperative and productive meeting. He stated that USDA has a long-standing position that USWA does cover producer contracts and that case law and the statutes support that position. He further stated that USDA codified its position in the final rule and it is not a change in policy. It was also pointed out that USDA agreed to establish a moratorium on issuing federal grain licenses to allow NASDA and the Association of American Warehouse Control Officials (AAWCO) time to resolve their issues with USWA. The moratorium is in effect from October 9, 2002, to January 8, 2003. USDA also listed several options that were discussed during the meeting. Among the options discussed are: (1) adding bonding or other financial requirements for producer (only) contractual exposure (currently none); (2) raising bonding or other financial requirements for depositor protection; and (3) raising net worth requirements.
        After hearing from all the states, USDA, representatives of the National Grain and Feed Association (NGFA), and AAWCO, task force members considered and approved a motion offered by Louisiana Agriculture Commissioner Bob Odom asking USDA to take no longer than December 10 while negotiating with NASDA, producer groups and industry to determine if the Secretary of Agriculture will withdraw the section of the rule, Subpart 735.1, sec. c, "Applicability." This is the section of the rule that has come under heavy discussion and differences of interpretation.
        Following the discussions related to the motion, representatives of the NGFA, the American Farm Bureau Federation, the National Farmers Union, National Association of Wheat Growers, the National Cotton Council, and AAWCO continued to provide additional input to the task force from each of their organization's perspectives. The information gathered at the first meeting will be the foundation for further discussions.
        A working group of the task force will meet with USDA officials in early December to review all comments, questions, and ideas presented to the task force. The goal of the working group is to develop an options paper for further consideration by the task force. Background materials about the task force are located on the NASDA website. (Contact: Jennifer Yezak Molen)

SHARPE DECLARED WINNER IN SOUTH CAROLINA RACE

        Charles Sharpe has formally been declared the South Carolina commissioner-elect of agriculture nine days after the election. Les Tindal, the current commissioner of agriculture, chose not to run again after serving as commissioner since 1982.
        Sharpe was a representative to the South Carolina House of Representatives from 1985 to 2002, serving as chairman of the Agriculture, Natural Resources and Environmental Affairs Committee. He was chairman and founder of both the House Business and Agriculture Caucuses. He was the chairman of the Environmental Affairs Subcommittee from 1988-1994. Sharpe was chairman of the Southern Legislative Conference Committee on Energy & Environment, served as a member of the Southern States Energy Board, chairman of the Southern States Bio-Based Alliance for alternative energy sources, vice-chairman of the National Conference of State Legislatures Committee on Environment, and was a member of the National Conference of State Legislatures Committee on Health and Human Services
        Sharpe said one area he wants to explore as agriculture commissioner is more farming of medicinal and pharmaceutical plants that are favored by drug companies. "The climate is right," he said. "Hopefully we are out of the drought. We can grow what they want to grow." (Contact: Rick Kirchhoff)

ADAMS SPEAKS AT NATIONAL FARM BILL CONFERENCE

        Jamie Clover Adams, secretary of the Kansas Department of Agriculture, represented NASDA on a panel discussion about "responsibilities" during the National Conference on Farm Bill Opportunities in St. Louis, Missouri, last week.
        Accomplishing environmental and natural resource goals by utilizing opportunities in the 2002 farm bill was the major focus of the conference sponsored by the National Association of Conservation Districts (NACD) and the Conservation Technology Information Center (CTIC). NASDA was a participating sponsor of the session designed to create action plans to reach historic levels of conservation on America's farm and ranch lands through the 2002 farm bill.
        Other speakers at the conference included Mark Rey, USDA Undersecretary for Natural Resources and the Environment; Bruce Knight, chief of the Natural Resources Conservation Service (NRCS); James Little, administrator of the Farm Service Agency; former Soil Conservation Service (SCS became NRCS) Chief Bill Richards; Sonja Hillgren, editor of the Farm Journal; Sara Wyant, editorial vice president, Farm Progress Companies; and many other stakeholders.
        "You can accomplish a lot if you don't care who gets the credit," said Adams. "We have to find better ways to seek solutions. We need to let outcomes drive what we do and have measurable results." Adams said states need flexibility--we can't use the "one size fits all" approach.
        Knight said, "Success will come by focusing more on conservation goals and less on individual programs." Knight also called for keeping decision making at the local level.
        Representatives of the agricultural industry, livestock, crops, wildlife, and private business sectors as well as state and federal conservation agency personnel participated in the session to discuss ways to get information on farm program benefits to all private landowners.
        Former SCS Chief Bill Richards said the new Conservation Security Program (CSP) is the "right program at the right time for the right job." He noted CSP will "really turn things around and reward the good guys." Rather than being a sometimes dreaded instrument in the past, a conservation plan will become a prized possession of the future," commented Richards.
        Neil Crane, a potato farmer from Maine, recognized that, "Producers who don't make a profit can't practice conservation." He stressed the need for local leadership. "I can't think of anything more difficult or frustrating than running a locally-led conservation program from Washington, D.C., said Crane, adding, "With that in mind, let us do it at the ground level. We are prepared to launch an effective, defensible program.
        Undersecretary Mark Rey addressed the closing session and put forth a charge to the various interests to come together, set aside their differences and work collaboratively to achieve success. (Contact: Charlie Ingram or Tom Sommer)

SENATE CLEARS HOMELAND SECURITY BILL

        The Senate overwhelming approved legislation late November 19 to create a new Department of Homeland Security (H.R. 5005), after defeating a last-minute amendment that threatened to delay the debate once again. The House approved the bill last week and planned to make technical corrections to the measure November 20 before sending it to the president for his signature.
        The controversial amendment was based on seven new provisions that were added to the legislation during congressional and White House negotiations. Democrats objected to the so-called "special interest" provisions which would extend airport baggage screening deadlines, provide liability relief for pharmaceutical companies that make vaccines, allow the Department of Homeland Security do business with offshore American companies, and establish defense research centers at specific universities. One of the noncontroversial provisions would expand cooperation and coordination within USDA and the Department of Homeland Security. Several Republicans also expressed concerns with some of the provisions. Majority Leader Tom Daschle (D-S.D.) offered the amendment to strike the provisions from the bill. After Minority Leader Trent Lott (R-Miss.) promised to revisit some of the issues next year, lawmakers defeated the Daschle amendment which cleared the way for final passage of the bill.
        The final legislation keeps intact the agriculture recommendations approved by the House and Senate agriculture committees last summer that would transfer the specialized border inspection functions of USDA's Animal and Plant Health Inspection Service (APHIS) to the new department. The legislation addresses three main areas and would: (1) transfer the Plum Island Animal Disease Center from USDA to the Department of Homeland Security (but it requires the two departments to enter into an agreement providing for continued access by USDA for research, diagnostic, and other programs); (2) transfer the functions for agricultural import and entry inspection activities from APHIS Agricultural Quarantine and Inspection Program (AQI) to the new department; and (3) outlines the responsibilities for a new under secretary for border and transportation security to carry out the functions of agricultural inspectors. USDA will retain responsibility for all other activities of the Agricultural Quarantine Inspection Program regarding imports, including pre-clearance of commodities, trade protocol verification activities, fumigation activities, quarantine, diagnosis, eradication and indemnification, as well as other sanitary and phytosanitary measures. All functions regarding exports, and interstate and intrastate activities will remain at USDA. The proposal also requires USDA and the Department of Homeland Security to work out an agreement on the transfer of employees, the training of homeland security employees on agricultural matters, reimbursement and collection of funds for transferred activities, and guidelines, policies, and rulemaking. (Contact: Charlie Ingram)

HOUSE AND SENATE ELECT LEADERS

        Both Democratic and Republican party members in the House and Senate held leadership elections last week to reorganize for the 108th Congress which convenes in January. Many of the party leaders will remain in their positions; but, there will be a number of changes in both chambers.
        In the House, Democrats elected Rep. Nancy Pelosi (D-Calif.) as minority leader. Pelosi succeeds Rep. Dick Gephardt (D-Mo.) who had earlier announced that he would not seek another term in the position. She is the first woman to be elected to the top congressional leadership spot. Rep. Steny Hoyer (D-Md.) was elected minority whip, the position that Pelosi currently holds. Rep. Robert Menendez (D-N.J.) will succeed Rep. Martin Frost (D-Texas) as chairman of the Democratic Caucus. On the Republican side, Rep. Dennis Hastert (R-Ill.) will remain speaker of the House. Rep. Tom DeLay (R-Texas) will become majority leader succeeding Rep. Dick Armey (R-Texas) who was not running for reelection to his congressional seat. Rep. Roy Blunt (R-Mo.) was elected majority whip. Rep. Deborah Pryce (R-Ohio) will chair the Republican Conference Committee and Rep. Chris Cox (R-Calif.) will remain chairman of the Republican Policy Committee.
        In the Senate, Sen. Trent Lott (R-Miss.) will take over as majority leader when Republicans take control of the chamber. Sen. Mitch McConnell (R-Ky.) was elected majority whip to succeed Sen. Don Nickles (R-Okla.). Sen. John Kyl (R-Ariz.) will take over as chairman of the Republican Conference Committee from Sen. Larry Craig (R-Idaho). Senate Democrats voted to keep their current party leaders. Sen. Tom Daschle (D-S.D.) will become the minority leader and Sen. Harry Reid will be the minority whip. Sen. Byron Dorgan (D-N.D.) will remain as chairman of the Democratic Policy Committee and Sen. Barbara Mikulski (D-Md.) will continue as secretary of the Democratic Conference Committee. (Contact: Charlie Ingram)

CONGRESS APPROVES PORT SECURITY BILL

        The House and Senate approved a comprehensive port security bill (S. 1214) on November 14 as lawmakers rushed to complete the lame duck session. The legislation, which had been stalled for months over the issue of user fees on cargo, is the first major maritime bill considered by Congress in years.
        The Maritime Transportation Security Act would require the Coast Guard to conduct vulnerability assessments of U.S. ports. The results of the assessments will be used to implement, for the first time, a national security planning system. Local port security committees would be established to coordinate federal, state, and local law enforcement activities. The legislation includes several provisions to improve the security of containers, maintain cargo tracking, and identification and screening systems. It also authorizes $90 million in funds for research and development projects to determine which technologies will improve port security. In addition, the measure requires the Coast Guard to assess the effectiveness of security systems in certain foreign ports, and to deny entry to vessels from ports that do not maintain effective security. Individuals who enter secure areas on vessels or facilities will be required to have background checks and transportation security cards issued by the federal government. (Contact: Charlie Ingram)

CONGRESS ADJOURNS, PUSHES FUNDING BILLS TO NEW YEAR

        The House and Senate wrapped up their post-election lame duck session this week and adjourned for the year after passing homeland security legislation (see separate story) and a continuing funding resolution to fund government programs until January. Some of the unfinished business that will confront lawmakers early next year is the appropriations bills for FY03, farm disaster assistance, bankruptcy reform, and energy legislation.
        After completing work on the homeland security bill, lawmakers approved a continuing resolution funding government programs at FY02 spending levels until January11. Only two of the thirteen annual appropriations bills have been signed into law. Congressional leaders said they plan to immediately begin work on the funding bills in January and hope to complete the process before the president's State of the Union Address in late January. (Contact: Charlie Ingram)

HOUSE AG COMMITTEE CHAIRMAN ANNOUNCES RETIREMENT

        House Agriculture Committee Chairman Larry Combest (R-Texas) announced November 12 that he will resign from Congress next year. The announcement came as a surprise to many and Combest cited personal reasons for his departure saying that a number of events made him and his wife realize "how fragile life and health are."
        Combest will step down as committee chairman when the 108th Congress convenes in January. Committee Vice Chairman John Boehner (R-Ohio) has announced that he will not seek the post and will instead remain chairman of the House Education and Workforce Committee. Boehner has endorsed Rep. Bob Goodlatte (R-Va.) as chairman. Goodlatte is the third ranking member of the committee and chairs the Subcommittee on Agriculture Department Operations, Oversight, Nutrition, and Forestry. Other committee members who are seeking the chairmanship are Reps. Terry Everett (R-Ala.) and Nick Smith (R-Mich.).
        There will be other changes in the committee makeup in the new Congress. The chairmanship of the Subcommittee on General Farm Commodities and Risk Management will be open since current Chairman Saxby Chambliss (R-Ga.) won election to the Senate. There will be at least ten committee vacancies to fill due to elections, not counting any changes in committee assignments that individual lawmakers may choose. (Contact: Charlie Ingram)

USDA SEEKS COMMENTS ON INCOME LIMITATION RULE

        USDA's Farm Service Agency (FSA) is seeking public comment on a proposed rule that examines how USDA will define adjusted gross income (AGI) for the purposes of determining eligibility for payment under certain 2003 and subsequent crop-year commodity and conservation programs.
        The rule proposes that, in general, individuals and entities must use the AGI or comparable measure they reported to the Treasury Department's Internal Revenue Service (IRS) for the previous three years. Comments on the rule will be accepted until November. 27, 2002. The 2002 farm bill stipulates that individuals and entities whose average AGI exceeds $2.5 million are ineligible for certain programs unless at least 75 percent of their average AGI is derived from farming, ranching, or forestry operations. These programs include the Direct and Counter-Cyclical Payment Program and Marketing Assistance Loan Program. In addition, it includes conservation programs that are administered by Farm Service Agency (FSA) and the Natural Resources Conservation Program. These conservation programs include the Conservation Reserve Program, Environmental Quality Incentives Program, Farmland Protection Program, Wetlands Reserve Program, Wildlife Habitat Incentives Program, and others. The rule is available online at http://www.fsa.usda.gov. (Contact: Charlie Ingram)

FDA ISSUES NOTICE ON CWD-POSTIVE ANIMALS AND ANIMAL FEED

        In a call to state public health and agriculture officials throughout the U.S. last week, the Food and Drug Administration (FDA) announced that the agency will not permit material from Chronic Wasting Disease (CWD)-positive animals, or animals at high risk for CWD, to be used as an ingredient in feed for any animal species. FDA plans to issue a Compliance Policy Guide on this issue at a later date.
        Animals considered to be at high risk for CWD would include animals from CWD-positive captive herds, free ranging animals from the endemic area in Colorado and Wyoming, deer from the eradication zone in Wisconsin, and deer from any areas designated around any new foci of CWD infection that might be identified through surveillance or hunter harvest testing. FDA stated that animal feed or feed ingredients on the market that incorporate this material should be recalled or otherwise removed from the marketplace. CWD is a neurological (brain) disease of farmed and wild deer and elk that belong in the cervid animal family. The disease has been found in farmed and wild mule deer, white-tailed deer, North American elk, and in farmed black-tailed deer. CWD belongs to a family of animal and human diseases called transmissible spongiform encephalopathies (TSEs). These include bovine spongiform encephalopathy (BSE or "mad cow" disease) in cattle; scrapie in sheep and goats; and classical and variant Creutzfeldt-Jakob diseases (CJD and vCJD) in humans. TSEs are very rare, but are always fatal. Although CWD shares certain features with other TSEs, it is a distinct disease. There is no known treatment for these diseases, and there is no vaccine to prevent them. In addition, there are no validated diagnostic tests for CWD or other TSEs that can be used to test for the disease in live animals or humans. Only deer and elk are known to be susceptible to CWD by natural transmission. Although there is little scientific evidence to show whether CWD is or is not a hazard to humans or non-cervid animals such as cattle and pigs, FDA officials said they believe it is prudent that CWD-positive deer and elk not be used in animal feed. (Contact: Charlie Ingram)

PESTICIDE BRIEFS

~~EPA Announces Pesticide Registration Work Plan for FY2003~~The Environmental Protection Agency's (EPA) Office of Pesticide Programs has announced its work plan for the registration of conventional pesticides. The work plan identifies 19 new chemical candidates for decision-making. Five of these chemicals have 29 associated uses classified as "reduced risk" pesticides and four of the chemicals have seven associated uses classified as organophosphate alternatives. EPA notes that the work plan includes more candidates than anticipated actual decisions. The work plan also identifies about 320 potential new uses for 54 already-registered chemicals, and identifies 10 inert ingredients for decision-making during the fiscal year. EPA has posted its FY02 Report of Conventional Pesticide Registration Decisions on the Office of Pesticide Programs website. The FY03 work plan can be viewed at http://www.epa.gov/opprd001/workplan/.

~~EPA Releases Report on Plant-Incorporated Protectant for Bt Corn Root Worm~~EPA has released the much anticipated minutes from a federal advisory panel meeting on Monsanto's new Bt corn root worm pesticide product. The document is posted on EPA's website at http://www.epa.gov/scipoly/sap.index.htm. In August 2002, the Federal Insecticide, Fungicide, and Rodenticide Act Scientific Advisory Panel (SAP) held a public meeting to discuss Corn Root Worm Plant-Incorporated Protectant Insect Resistance Management and Non-Target Insect Issues. This Plant-Incorporated Protectant (PIP) product could potentially replace organophosphates, carbamates, and other conventional chemical pesticides used to control a significant insect pest. PIPs are pesticidal substances that plants produce from genetic material or proteins added to the plant. The genetic material, not the plant itself, is regulated by EPA. The corn root worm larva feeds on corn roots and reduces the plant's ability to absorb water and nutrients. Growers can suffer significant financial losses from decreases in production and the cost of chemical insecticides used to control this insect pest. Major issues discussed in the report involve insect resistance management and non-target insects. The Office of Pesticide Programs will review additional data received after the advisory panel meeting and consider the extensive public comments before proposing a decision on the registration application from Monsanto. (Contact: Charlie Ingram)

TRADE BRIEFS

~~ITC to Continue Wheat Investigation~~On November 19, the International Trade Commission (ITC) voted to continue countervailing duty and antidumping investigations on durum and hard red spring wheat from Canada. Dumping is an illegal practice of selling in a foreign market at below cost of production or home market price. This ITC decision moves the cases to the Commerce Department, which will continue to investigate the level of dumping and subsidies on the imported wheat from Canada. A preliminary countervailing duty determination is expected on Dec. 27 and the preliminary dumping determination is anticipated by mid-March 2003. The North Dakota Wheat Commission, the Durum Growers Trade Action Committee, and the U.S. Durum Growers Association filed the petitions.

~~Mexico Pursues Plan for Agricultural Aid~~This week, Mexico President Vincente Fox announced a $10.25 billion plan to offset U.S. farming competition. Under the terms of the North American Free Trade Agreement (NAFTA), agricultural tariffs are to be lifted in January 2003, except for duties on beans, powdered milk, and sugar. With the deadline drawing near, Mexican farmers are very concerned about the impact that this will have on their ability to remain productive and competitive. President Fox sent the measure to Congress and requested a speedy approval. In related news, Mexico will investigate whether to apply an NAFTA safeguard against imports of U.S. chick legs and thighs to offset the impact of the elimination of the current 49.4 percent tariff rate on the chicken parts imported into Mexico which will fall to zero starting in January.

~~Objections Being Raised to U.S.-Australia Trade Agreement~~The National Milk Producers Federation (NMPF) has expressed in a letter to U.S. Trade Representative Robert Zoellick that a free trade agreement with Australia would not only offer no benefit to U.S. agriculture, it would also undermine the administration's efforts to open markets around the world in a multilateral context. It was announced last week that the U.S. would enter trade negotiations with Australia next February with the goal of completing a bilateral free trade pact by 2004. NMPF feels that trade policy emphasis should be placed on the World Trade Organization (WTO) negotiations. WTO members are due to reach an agreement by the end of March on modalities for continuing the agriculture negotiations through the end of the DOHA Round, which is scheduled to be finalized by Jan. 1, 2005. (Contact: Jennifer Yezak Molen)

USDA NEWS

~~New Farm Bill Report Available~~USDA's Economic Research Service (ERS) has released a new report titled "The 2002 Farm Act: Provisions and Implications for Commodity Markets." The 67-page report discusses major programs of Title I Commodity Programs plus selected provisions in the conservation and trade titles. The major focus is an initial evaluation of the new law's effects on agricultural commodity markets, based on sectorwide model simulations under alternative policy assumptions. Copies of the report are available from the ERA website at http://www.ers.usda.gov.

~~USDA Report Looks at Changes in Mexico's Fresh Produce Distribution System~~This week, USDA released a research report prepared in collaboration with economists from USDA's Economic Research Service and Texas A&M University on "Mexico's Changing Marketing System for Fresh Produce: Emerging Markets, Practices, Trends, and Issues." The report focused on how trade liberalization appears to be transforming the structure of the traditional fresh fruit and vegetable marketing system in Mexico. With the rapid growth of national and international supermarket chain stores in Mexico, the traditional supply chain has changed significantly. Plus, new forms of supply management and procurement practices are being introduced by recent entrants to the Mexican supermarket industry. Even with these changes, the report found that Mexican chain store retailers continue to be hampered by the lack of well-defined quality standards, poor cold chain maintenance, and inadequate physical infrastructure in rural areas. The detailed report can be found on the Internet at http://www.ams.usda.gov/tmd/MSB/msb.htm.

~~USDA Requesting Applications for Market Improvement Program~~USDA expects to distribute $1.347 million under the Federal-State Marketing Improvement Program (FSMIP) in fiscal year 2003. FSMIP provides matching funds to state departments of agriculture and other appropriate state agencies to conduct marketing studies or assist in developing innovative approaches to the marketing of agricultural products. USDA is particularly interested in proposals that reflect a collaborative approach among the states, academia and the farm sector. The deadline for applications is February 14, 2003. Results will be announced in early July. Program guidelines and application forms can be located on the Internet at http://www.ams.usda.gov/tmd/fsmip.htm. (Contact: Jennifer Yezak Molen)


STATE NEWS


MICHIGAN LEADING WAY IN ELECTRONIC ANIMAL IDENTIFICATION EFFORTS; FIRST YEAR OF EFFORTS SHOWCASES TECHNOLOGY'S ROLE, VALUE IN DISEASE ERADICATION, FOOD SAFETY

        In the first year since the state embarked on an electronic livestock identification pilot program in Northeast Michigan, more than 90 percent of area farmers have voluntarily incorporated this new technology and system, according to Dan Wyant, director of the Michigan Department of Agriculture (MDA).
        Wyant noted that it has long been common for livestock to have individual animal identification (ID) though traditionally this has been a plastic or metal tag or tattoo. Electronic ID simply incorporates the latest technology, a tag imbedded with a radio frequency device and marked with a unique, individual number that will not be duplicated on any other animal worldwide. This tag is then linked to a database that includes information specific to that animal, including date of birth, sex, and type/species. This electronic tag dramatically speeds up the location and tracing of livestock--from farm to market--and ensures the most accurate and up-to-date information.
        "This type of technology and capability is increasingly important in a global economy and represents the future of the animal agriculture industry," Wyant added. "Electronic ID will play a critical role in protecting the health of Michigan livestock, ensuring the safety of our food supply, maintaining consumer confidence in Michigan food and agricultural products, managing animal diseases and assisting farmers with data to enhance genetic improvement of their herds. We are proud to be at the forefront of this effort."
        The electronic livestock ID pilot project was launched in Michigan in November of 2001 as part of the state's bovine Tuberculosis (TB) eradication plan. This project makes tags available to producers at no charge in the Northeast Lower Peninsula or those with accredited herds. To date, 432 herds, representing 17,000 individual animals, have been TB tested and tagged with electronic ID. Hand-held computers read the electronic tags and accompanying information, and allow additional data to be entered electronically, including disease testing information. Additionally, electronic tag readers have been installed in three of Michigan's major livestock markets and in five Midwest packing plants where Michigan producers send their cattle.
        According to Dr. Joan Arnoldi, state veterinarian and director of MDA's Animal Industry Division, Michigan was picked as a pilot state for the electronic ID program by the U.S. Department of Agriculture's Animal and Plant Health Inspection Services due to its ongoing bovine TB eradication efforts. The federal agency granted the state $1.3 million to develop and implement the identification program. Currently, only a handful of other states, Canada, and a few European countries are utilizing electronic ID on a regular basis.
        "Through this system, Michigan has been able to make advances on several fronts, including improving the state's TB situation," Arnoldi said. "Besides providing further assurance to USDA, other states and our trading partners that Michigan cattle have been properly tested and moved, electronic ID has also helped ease the burden on and speed up response time for the state's livestock producers and has allowed trace backs and forwards to be done in hours rather than days or weeks, which is critical in any animal disease situation."
        The program is tied into the nationwide National Farm Identification Records Program maintained by the Holstein Association USA, Inc. and the USDA's Generic Database system to ensure accurate individual animal identification and tracking and coordination of TB test results and herd status.
        The electronic ID system and database also play a key role in the issuance of movement permits that are currently required in Northeast Michigan. Producers will soon be able to enter an animal's electronic identification number into the state's web-based system and quickly verify whether all testing requirements have been met. If so, the permit is granted and they can then choose to print the permit, or receive it by fax or mail.
        Immediate plans for electronic ID in Michigan include tagging another 18,000 animals, and installing readers at one more market in the state and three other packing plants in the Midwest.
        For more information or to view the electronic ID system firsthand, contact Kevin Kirk, MDA's Electronic Identification Coordinator, at 517/241-4339 or via e-mail at kirkk@michigan.gov, or Sara Linsmeier-Wurfel, MDA Public Information Officer, at 517/241-4282 or linsmeiers@michigan.gov.

MOHLER RECEIVES FFA HONOR

        Missouri Agriculture Director Lowell Mohler received the Honorary American FFA Degree at the 75th National FFA Convention held earlier this month in Louisville, Ky. The award honors individuals who advance agricultural education and FFA through outstanding personal commitment.
        Mohler has been an ardent FFA supporter throughout his career as chief administrative officer of the Missouri Farm Bureau and director of the Missouri Department of Agriculture. As chairman of the Missouri State Fair Commission, a position he's held since 1997, Mohler was instrumental in securing funds for the new FFA Building located on the Missouri State Fairgrounds in Sedalia. The new facility, dedicated during the 2002 centennial fair, is designed to showcase the hard work of Missouri's FFA chapters across the state and provide a central meeting place for FFA members throughout the year.
        "I truly believe the youth involved in FFA are the future of the state's agricultural industry," Mohler said. "For that reason, it's critical that we continue to foster and promote this worthwhile organization."
        Mohler was one of only 97 FFA supporters nationwide to be nominated for the prestigious award. The National FFA Board of Directors approved the nomination.
        FFA is a national organization of 457,278 members preparing for leadership and careers in the science, business and technology of agriculture. With 7,312 local chapters in the United States, Puerto Rico and the Virgin Islands, FFA strives to make a positive difference in the lives of students by developing their potential for premier leadership, personal growth and career success through agricultural education. (Contact: Sally Oxenhandler, 573/751-8596)