7. Promoting Quality and Fair Trade Through Marketing and Regulatory Services

The Marketing and Regulatory Programs (MRP) mission area of USDA works to ensure a productive and competitive global marketplace for U.S. agricultural products. Each agency’s programs are planned in collaboration with stakeholders and customers. Programs are structured to achieve a unique cooperation of service delivery among Federal, State, and local governments and the private sector. Three agencies comprise this mission function: Animal and Plant Health Inspection Service (APHIS), Agricultural Marketing Service (AMS), and Grain Inspection, Packers and Stockyards Administration (GIPSA).

The mission of the Agricultural Marketing Service is to facilitate the strategic marketing of agricultural products in domestic and international markets, while ensuring fair trading practices and promoting a competitive and efficient marketplace, to the benefit of consumers of U.S. food and fiber products.

The Animal and Plant Health Inspection Service leads the way in anticipating and responding to issues involving animal and plant health, conflicts with wildlife, environmental stewardship, and animal well-being. Together with our customers and stakeholders, we promote the health of animal and plant resources to facilitate their movement in the global marketplace and to ensure abundant agricultural products and services for U.S. consumers.

The Grain Inspection, Packers and Stockyards Administration facilitates the marketing of livestock, poultry, meat, cereals, oilseeds, and related agricultural products and promotes fair and competitive trading practices for the overall benefit of consumers and U.S. agriculture.

AMS, APHIS, and GIPSA collectively have more than 8,000 employees, primarily agricultural marketing and animal and plant health specialists, in all 50 States and many foreign countries. The agencies’ total funding for FY 1997 was $819 million, about 1 percent of USDA spending and a very small investment relative to the value of U.S. agricultural products. Many MRP programs are funded by fees paid by recipients of agency services.

Accomplishment Highlights

USDA Promotes Farmers Markets
On June 27, Secretary Glickman opened the 1997 Farmers Market season at USDA headquarters. These farmers markets, which were held at USDA through October, benefit small and limited- resource farmers while giving city customers a chance to meet the farmers who produce the food. Unsold food was recovered by the D.C. Central Kitchen and donated to the hungry. Emphasis was placed on attracting minority farmers’ participation, building on USDA’s commitment to help small and minority producers attract new sources of income. Other Federal Departments also organized farmers markets for their employees and other customers. To celebrate World Food Day October 16, USDA organized special farmers markets to promote food recovery, direct marketing, and increased consumption of produce. Farmers markets are now a tradition, allowing farmers to offer healthy foods to city customers every week during the summer and fall.

Promoting Fairness in Global Trade
APHIS efforts to promote global trade and establish science-based regulations have led to the successful application of regionalization, the concept that import requirements should be based on geography and science rather than politics. The final rule on regionalization, which passed in late 1997, represents a major step toward considering the importation of plant and animal products on a purely scientific basis. The agency resolved unjustified trade barriers with 16 countries. These efforts were worth $7 billion in agricultural exports.

Major regulatory initiatives allowed APHIS officials to shift the focus of Karnal bunt regulations from spores to actual bunted kernels, lessening the impact of the disease on the U.S. wheat industry. In addition, APHIS published a new final rule on genetically engineered organisms and products that expands the notification process and allows for extensions under the petitioning process.

Emergency Response Helps Control Pests
APHIS achieved numerous successes in the area of emergency response. As part of these efforts, APHIS officials worked quickly to control newly established pests and diseases such as the Asian longhorned beetle and Karnal bunt, and to reduce significantly the incidence of animal diseases such as brucellosis and tuberculosis. APHIS also worked to maintain a viable bison population in Yellowstone National Park during a harsh winter and has made great strides in reducing the incidence of rabies in Texas.

APHIS Streamlining Saves Money
APHIS has also moved forward with several initiatives designed to streamline operations and provide better service at less cost. Among these initiatives was an effort to consolidate regional offices, realign the agency’s Biotechnology, Biologics, and Environmental Protection staff, the Investigative and Enforcement staff, and the Animal Care staff, and place the Civil Rights Enforcement and Compliance and the Information and Technology Services staffs with the Office of the Administrator.

USDA Helps To Clear Railroad Bottlenecks
USDA appeared several times before the Surface Transportation Board (STB) in 1997 to outline the Department’s concerns about the impact of the Western rail crisis on agricultural shippers and to indicate measures USDA was taking to help ease the traffic congestion. USDA testimony was instrumental in prompting the STB to take unprecedented emergency action to order service to alleviate the problems of shippers and their customers. At USDA’s urging, the STB also required service data to be reported, which demonstrated clearly that agricultural shippers were bearing the brunt of the Western rail crisis relative to shippers of nonagricultural traffic. This data is still being collected and reported, enabling USDA to closely monitor rail service for agricultural shippers relative to nonagricultural traffic.

USDA Responds to Concentration Concerns and the Lack of Market Information To Ensure Competitive Conditions
Since July 1996, the Agricultural Marketing Service has been working to improve competition in the livestock industry, both domestically and internationally. To address the initiatives recommended by Secretary Glickman’s Advisory Committee on Agricultural Concentration to improve meat and livestock price reporting, eight new market news reports were developed: Forward Contract Slaughter Cattle Summary Report, National Carcass Premium and Discount Report, Expanded Boxed Beef Reporting, Missouri Producer Based Lean Value Direct Hog Report, Import Meat and Poultry Passed for Entry into the United States by Country of Origin, Canadian Live Animal Imports by Destination, Canadian Live Animal Imports by State of Entry, and International Meat Review Report.

All market news reports provide timely and increased information for livestock and meat imports and exports and can be found on the Internet. In addition to the market news reports, AMS is working with the National Cattlemen’s Beef Association in its efforts to develop alternatives for the cattle industry relative to value-based marketing of slaughter cattle by providing marketing data for analysis in researching and developing a value-based marketing system.

In 1996, the Western Organization of Resource Councils had petitioned the Department, requesting rulemaking to restrict livestock procurement practices regarding forward contracting and packer-fed cattle. The Department published the petition in the January 14, 1997, Federal Register, seeking public input on the issues. USDA received 1,757 comments. GIPSA’s analysis of the petition is available from GIPSA’s home page on the World Wide Web.

USDA Publishes Proposed Rule on Organic Standards
On December 16, 1997, USDA announced the proposed rule governing national standards for organic food and fiber production. The proposed rule addresses the methods, practices, and substances used in producing and handling organic crops and livestock and their processed products, along with the requirements for mandatory certification of organic operations. Comments were accepted from the public through April 30, 1998, for consideration in formulating a final rule. Comments were accepted and displayed online, via the Internet--a USDA first. The national organic program is mandated by the Organic Foods Production Act of 1990.

Federal Milk Marketing Order Reform
The 1996 Act mandated that Federal milk marketing orders be consolidated and reformed by April 4, 1999. After obtaining more than 3,700 comments from the public, the Department issued a comprehensive proposed rule on January 21, 1998, that revises the current order program. The proposed rule suggests consolidating the current 31 orders into 11, a replacement for the basic formula price, two options for Class I pricing, and streamlined order language and provisions. USDA accepted input on the proposed rule through April 30, 1998, and held four listening sessions to stimulate further input on the proposal. A final rule will be issued in 1998, and a referendum will be held to determine producers’ approval of the revised and consolidated orders. USDA anticipates meeting the congressionally mandated deadline of implementation by April 4, 1999.

AMS Civil Rights Accomplishments
The Agricultural Marketing Service supported civil rights through the following significant accomplishments during 1997:

• Provided technical assistance and guidance to several minority-owned businesses to prepare them to participate in the USDA Food Purchase Programs.
• Sponsored a workshop for Native Americans in Oklahoma on how to participate in the USDA Food Purchase Programs.
• Purchased 3.3 million pounds of ground beef, at a cost of $3.4 million, for use in Native American Food Assistance Programs.
• Provided technical assistance to a consultant for Native American-owned businesses and to two minority-owned businesses.
• Participated in Tuskegee University’s 105th Annual Farmers Conference, providing information about agency programs.

Targeting Small Businesses
The Agricultural Marketing Service (AMS) awarded 40 percent of purchase awards to small business firms (of the $702 million obligated for agricultural commodity and fish purchases), far exceeding the Government’s goal of 20 percent. In addition, AMS awarded over $10 million in commodity purchase contracts to a small, disadvantaged business under the Small Business Administration’s 8(a) program, doubling the amount awarded to these firms in FY 1996. The agency also participated in projects to pilot-test and evaluate methods to facilitate direct sales by producers to school districts in Georgia and Florida; these methods emphasized small and limited- resource farmers’ access to direct sales outlets.

Advance Notice of Proposed Rulemaking for Contract Poultry Industry
Contract poultry growers continued to express concerns about (1) settlements tied to the performance of other growers, (2) the accuracy of feed weights and the procedures for feed delivery and pickup, and (3) procedures for weighing live birds. An Advance Notice of Proposed Rulemaking was published and 1,772 comments were catalogued. GIPSA and officials of the Office of the General Counsel reviewed and analyzed the comments and identified a number of areas for consideration. Some may require a change to Packers and Stockyards regulations and an amendment to the Packers and Stockyards Act.

Official Grain Moisture Measurements
GIPSA selected the Dickey-John Corporation’s Grain Analysis Computer Model 2100 as the new moisture meter to replace technology currently in use. This new technology will allow the agency to improve its automation capability, reduce error associated with operator interaction, improve efficiency in grain inspection, and conform to requirements of the National Institute of Standards and Technology.

Automated Grain Inspection To Increase Efficiency
GIPSA has established a team of technical experts to develop an automated grain inspection system in partnership with the grain industry. An automated system will improve the efficiency and productivity of grain handling facilities, making them more competitive in today’s global marketplace.

ConAgra Settlement
Conagra agreed to pay $8.3 million in penalties and signed a compliance agreement after pleading guilty to charges of adulteration, misgrading, and misweighing of grain.

Proposed Restructuring for Packers and Stockyards
The plan will integrate economic, statistical, and legal expertise into this agency’s investigative activities, and will transfer some headquarters positions to the field. The plan provides for fewer, but larger, field offices to better reflect industry alignment.

USDA Streamlines Animal Welfare Act (AWA) Enforcement
APHIS has instituted a two-pronged AWA enforcement strategy introducing innovative penalties for individuals who wish to improve their facilities and imposing stringent penalties for those who do not. This strategy sends a clear message that AWA violators will be prosecuted to the full extent of the law. For example, when an elephant owned by the King Royal Circus died during transport in August 1997, APHIS completed its investigation and filed formal charges within 3 weeks--a process that typically takes several months. The Agency also obtained an expedited hearing on the case in which the owner of the Circus was fined $200,000--the highest fine ever to be imposed in any AWA case--and his license to exhibit animals was permanently revoked.

APHIS has also achieved considerable success in addressing public concerns about pet theft and random source class B dealers--those dealers who obtain their animals from sources other than breeding them themselves. To ensure that these dealers obtain their animals legitimately, APHIS officials instituted a policy that subjects them to quarterly inspections. In FY 1997, APHIS officials were able to trace back an impressive 95.5 percent of animals sold to research to their original source--up from approximately 40 percent in 1993. In addition, since APHIS introduced these enhanced enforcement activities, the number of random source animal dealers has dropped from more than 80 in FY 1994 to fewer than 40 in FY 1997.

USDA Helps New York Combat Asian Longhorned Beetles in Protecting Urban Forestry APHIS initiated cooperative eradication efforts with New York State and New York City officials after Asian longhorned beetles were discovered in the Greenpoint section of Brooklyn and the vicinity of Amityville in August 1996. The beetles--believed to have first arrived from China--can destroy more than 100 species of hardwood trees, including maple, horsechestnut, and elm. The infestation placed at risk the roughly 2.7 million trees in New York City, including more than 50,000 trees in parks and playgrounds in Brooklyn alone. In addition, Asian longhorned beetles pose a potential threat to the sugar maple industry in upstate New York, as well as the maple syrup production and fall foliage industries in New England.

In February 1997, APHIS, State, and New York City officials began removal, chipping, and incineration of more than 1,200 infested trees located on public and private property in the two affected areas. USDA’s Forest Service has pledged funding for replacement trees, and tree replacement has begun in Brooklyn. Because New York residents expressed strong concerns about the removal of trees, public outreach efforts were an essential part of the eradication program. Surveys conducted following tree removal have detected some Asian longhorned beetles just beyond the limits of the quarantined areas, and the quarantines will be slightly expanded as a result. However, no beetles have been found in Connecticut, New Jersey, or other areas of New York.

Packers and Stockyards Enforcement Actions
During FY 1997, the Packers and Stockyards (P&S) Program conducted 1,820 investigations into alleged violations of the P&S Act. Alleged violations included, but were not limited to: restriction of competition in the purchase of livestock; failure to pay for livestock; engaging in unfair or unreasonable practices in connection with holding, feeding, watering, and overall handling of livestock at a stockyard; delayed weighing of poultry; and false records. P&S issued 29 administrative or justice complaints to bring subject firms into compliance with the P&S Act.