MODERATOR: "Good morning from Washington. I'm Larry Quinn speaking to you from the Broadcast Center of the U.S. Department of Agriculture. Welcome to today's news conference on animal identification issues with Secretary of Agriculture Mike Johanns.

"Joining the Secretary today are Under Secretary of Marketing and Regulatory Programs, Bill Hawks; Animal and Plant Health Inspection Service Administrator, Ron DeHaven; and Chief Economist Keith Collins.

"A reminder for reporters, if you want to ask a question during our question and answer period today simply press "1" on your telephone touch pad and that will alert us.

"Now here is Agriculture Secretary Mike Johanns. Good morning, Mr. Secretary."

SEC. JOHANNS: "Good morning to you, Larry. And thank you for that introduction.

"Today we are here to continue an important initiative and an important discussion. In many speeches to many groups across the nation I have made a promise that my door will always be open, that we will listen, that we will respect differing viewpoints. That's how I've always believed public servants should act, treating those we serve with respect, dignity and equality, and most importantly we need to listen.

"For example, on Monday I did announce that USDA will hold a series of Farm Bill listening sessions across the country. I'd like to hear from the entire agricultural community as we approach renewal of this centerpiece of farm policy. I want to hear from farmers and ranchers as to what we are doing enough to encourage and support the next generation of farmers, whether we are fostering an atmosphere of opportunity, whether we can do more in cooperative conservation, conservation that works with agriculture not against it.

"In other words, I announced on Monday that I want to hear from the American agricultural community about how we're doing and how we might do better. Today I'm making an announcement in the same vein.

"Last February in my first speech as Secretary of Agriculture I testified before the Senate Agriculture Committee on bovine spongiform encephalopathy, or as we call it BSE. There I detailed the many steps USDA had taken since the single BSE discovery in December 2003 and our plans to continue forward.

"Among those steps that were discussed was the establishment of a national animal identification system that would track animal movements from birth to death for the purpose of disease tracking and other purposes. Senators at that February hearing asked me about the animal ID system. There's a lot of interest on the Hill.

"In subsequent meetings with members of Congress and at later House hearings as well as during visits with industry groups, questions came up: "What type of system does the government envision, how will it work, who will own the data, when will it be up and running, when will we see something in writing?

"Can the private sector establish a system that will comply with the necessary data needs of government, and perhaps most importantly will we have input? Well, the answer to that last question I can say is an emphatic yes.

"Following the Senate hearing I directed our Animal and Plant Health Inspection Service to move forward to address these issues via a process that would allow all interested parties a thorough review as we move on to the next phase.

"So today I am announcing that USDA is publishing in the Federal Register a detailed thinking paper on the national animal ID system. It includes a strategic plan. It also includes timelines. These are suggestions that we can use as a starting point for an important discussion on how this new system will be shaped and most importantly implemented.

"In keeping with my promise to keep this process transparent, the public is seeing this plan almost as soon as I have. And my hope is that we can examine it, we can discuss it. The purpose of publishing the paper in the Federal Register is to ensure that it can be widely distributed and to provide a 30-day comment period for all to provide any input, advice and suggestions.

"There are some ideas contained in this paper that we have talked about a lot of times, some standards we believe must be met regardless of how the system is established. For example, our primary goal is to create a system that will ensure that we can identify all animals and premises that have had contact with a foreign or domestic animal disease of concern within 48 hours of discovery.

"The system will include the integration of three key components-- premises identification, animal identification, and animal tracking. It will allow state and federal animal health officials to manage disease surveillance and control programs more effectively and more efficiently.

"In the end the system will help limit the scope of dangerous outbreaks and ensure that we are committed and that we can contain and eradicate as quickly as possible.

"The system must be verifiable and adaptable and give producers flexibility to incorporate the most effective and current technology available which assures that the door to improvement and competitive innovation remains wide open.

"Standards must be uniform and systems must be compatible. It must be inclusive to assure that it works for all ag species and also to assure adequate participation. In other words, it must be effective without being burdensome.

"I think that is something we can all agree on. It's important to note that in order to work the animal ID system must be a cooperative state, federal and industry program. We don't expect that the USDA can do this alone, and we should not.

"Similarly we cannot do this without input from those involved in the implementation, state and local health officials, and of course farmers, ranchers, everyone else involved in animal production.

"In creating this paper, APHIS held 19 listening sessions all across the country. They did utilize input from producers, industry reps, and experts as well as state and tribal officials. This document puts on paper actual implementation plans.

"And now I want to hear what you think. It's vital for us to hear from America's agriculture community about how to implement this tool in the animal health protection system.

"I also know that there are some proposals here that will generate some very strong opinion. Those are the ones that we need the most input on, issues like confidentiality, the mandatory versus voluntary nature of the system, data ownership, and a timeline for implementation. These are all issues we must resolve together.

"I cannot promise that we'll agree on everything in the end, but as I said I can promise we're going to listen to your ideas and listen to your views. A system that will allow us to pinpoint, track and isolate threats to health is enormously important, and this issue is too important for us to get it wrong. The threat to animal health and thus our food supply, both unintentional and intentional, are very real.

"The National Animal Identification System will be a strong tool in fighting those threats, often before they even materialize. This is something we need to do and it's something we need to do right. The paper will be posted today on USDA's National Animal Identification System website which can be found at WWW.USDA.GOV//NAIS.

"Tomorrow we will publish the Notice of Availability and a Request for Comments in the Federal Register. Once that happens, comments can be submitted either through the postal mail or over the Internet. If you do wish to use the Internet, we will post a link on the right side of the NAIS web page tomorrow that will tell you how to do the electronic comment form. Instructions and an address for submitting postal comments will also be posted.

"So to all of those out there, we hope to hear from you soon.

"Now we would be happy to take any questions that you might have."

MODERATOR: "Thank you, Mr. Secretary. And as we begin our questions we remind reporters, if you want to ask a question you need to press "1" on your telephone touch pad so that we'll know you would like to ask a question.

And our first question today comes from Gary DeGiuseppe from Arkansas Radio Network. Gary, go ahead, please.

REPORTER: "Thanks, Larry. Good morning, Mr. Secretary.

"I'm wondering, such a premium is being placed on confidentiality here-- what would be wrong with making this data available to consumers? Doesn't drawing a veil over the data undermine the effort to achieve public confidence in the safety of the food supply?"

SEC. JOHANNS: "Well, confidentiality is one of the issues that we're very, very anxious to hear on. And I have to tell you, for those who are out there raising or feeding cattle, one of the things that they do guard very jealously is information relative to numbers in their herd, etcetera. Confidentiality is a pretty big issue to them.

"How we manage this, how we deal with it, how we draw that balance that your questions drives to is very important. We want to make sure that consumers always have good information, but we also recognize that there are some privacy type issues here, some confidentiality issues that we also need to pay attention to.

"So again, it's a very important piece of this. We're anxious to hear thoughts on it from all sides. And we'll factor those thoughts in."

MODERATOR: "Our next question will come from Bill Tomson of Dow Jones, and standing by should be Matt Kaye of the Burns Bureau.

"Bill, go ahead, please."

REPORTER: "Mr. Secretary, you mentioned the question of mandatory versus voluntary. The strategic plan isn't listed up on the website yet. Is that not defined in the strategic plan whether or not this will be mandatory or voluntary?"

SEC. JOHANNS: "I'll have Bill Hawks talk to you a little bit about that."

SEC. HAWKS: "Yes. Bill, what we've got there is a proposal and proposed dates to -- it's voluntary going to mandatory. The proposed date that we've got to have it fully operation, fully mandatory is 2009.

"But it's like the Secretary said, this is our current thinking, this is the timelines that we've got set out. But we're seeking input from all of those that are involved. We have all the cooperative agreements that are out now that we put out last year. We're going to be entering more cooperative agreements. So we have got to test-drive this bill if you will.

"And so those are some decisions that will be made as we move forward. As the Secretary said, we are going to be totally transparent as we move forward with this."

MODERATOR: "Our next question comes from Matt Kaye of the Burns Bureau, and standing by should be Jerry Hagstrom of Congress Daily.

"Matt, go ahead."

REPORTER: "Thank you. Mr. Secretary, thank you for taking my question.

"The Under Secretary said last year that some $19 million in CCC funds would get the program off the ground initially as a voluntary program covering premise ID allocations, national ID repository, state and tribal ID research. But what about the longer term picture in solidifying the program and making it permanent? How much will be made available, and who will pay for it?"

SEC. JOHANNS: "Great questions. Again I'm going to turn to Keith or Bill and they can give you the details."

DR. COLLINS: "I'll start and maybe Mr. Hawks would like to add to that. As you indicated, we started out with a CCC emergency funding of $18.8 million to get the infrastructure started; for this program for this year we have $33 million. That continues the infrastructure building.

"In the actions that are being taken today we are soliciting, through a series of questions, feedback from the industry. One of those questions relates to the future costs of this program. Who should bear the cost of this program, how should the cost be allocated, and where should the funding for this program come from?

"I'll just mention sort of the three categories of cost, and maybe they'll indicate to you why we haven't budgeted specifically for this program for all future years.

"One area of cost is simply the infrastructure development. That's building a repository for premises ID and for animal ID and tracking. A second is to build the state systems.

"So there's a lot of infrastructure building that has to take place.

"The second category of expenses-- the individual animal identification. And just to give you an example of that, we slaughter about 33 million head a year. All those animals would have to be identified. We have born about 40 million head of animals a year. And sort of a steady-state world out in the long-term like you're asking about, all of those animals would be identified. So we're talking about something between 33 and 40 million for cattle, individual animal identification devices each year.

"Consider an RFID tag-- they cost $2.00 a tag plus or minus 50 cents. So right there that would be in the neighborhood of $40 million times two -- $80 million a year just for those tags.

"Then the third category of cost, and this is the one we know least about, would be the cost of reporting to the system the actual movements of the animals, the tracking of the animals. And I think what we're going to learn as we bring the tracking system up on line over the coming year, we're going to learn where the efficiencies can be gained and we can be in a better position to figure out what the costs of tracking are going to be.

"So we know there's substantial cost. This is a federal, state, private partnership. We expect all three entities to contribute to those costs. So far we've put $19 million plus $33 million, and we'll define those costs better as we get comments back from the questions we're asking today and we refine the system based on the strategic plan."

SEC. HAWKS: "Yeah. I would add to that along with the comments that we get back with the cooperative agreements that we're doing out there with the states and the tribes, we will continue to refine those costs as well. So I think it's that we're in the process of trying to determine exactly what the cost. But I would like to point out the fact with the $18.8 that we committed last year, the $33 million that is in our '05 budget and $33 million is in the President's budget for '06, it's a pretty good commitment on our part."

MODERATOR: "Our next question comes from Jerry Hagstrom of Congress Daily. And Chuck Abbott of Reuters should be standing by.

"Jerry?"

REPORTER: "Yes. Mr. Secretary, you describe this as a thinking paper. Could you tell us exactly what status it has in terms of federal rulemaking so that we can compare it with something else? Is it a proposed rule like we have had with other things, or do you go back and do that when this is done?

"And secondly, what animals will this cover? I would assume it will cover cattle and pigs. But does it cover poultry? Would it cover other animals that are raised for meat? I assume it won't cover fish. Please give us those details."

SEC. JOHANNS: "Great. I'll start with your question about process. I'll ask Bill Hawks to offer a thought on your second question relative to what animals are covered.

"In terms of process, this is not rulemaking. What we are attempting to do here is to put out our thoughts, our thinking, put that in writing, spread that as far and wide as we possibly can, to get public reaction to that thinking.

"There would be a point at which down the road that you engage in a rulemaking process to finally and ultimately solidify the course and direction. But this is really a response to a lot of discussion I have heard on the Hill and from folks in the industry out there-- let's get this going, let's get some idea out there, give us an opportunity to informally react to those. So this is a preliminary stage to rulemaking.

"Might be a little bit unusual, but we believe it's a great way to be transparent, to start the discussion in terms of our next steps. So rulemaking will be down the road some.

"Bill, talk a little bit about animals covered, if you will?"

SEC. HAWKS: "Okay. Thank you, Mr. Secretary. Well, it's certainly our intention to have all species of animals covered here. You asked the question specifically about fish. There's actually species working groups that is involved with fish. I've actually attended aquaculture meetings to have those discussions. So as we look at what needs to be covered, we think that any species that's out there that has a disease situation that would benefit from this we think it would be important to cover it.

"But we are working with those individual species groups to get their input. We're not doing anything in a vacuum here. This is, as the Secretary said we're open, we're transparent, so we need that feedback as well.

"But we would anticipate that we would have all of the major species covered; as we get that input back from the minor species we will move forward with that."

MODERATOR: "Our next question comes from Chuck Abbott of Reuters, and standing by should Sally Schuff of Feedstuffs.

"Chuck?"

REPORTER: "Yeah, good morning. The more I listen to this I wonder, gentlemen, have you reached the stage where you're just starting all over again on animal ID? Earlier this year there was talk that you'd have premises ID achieved by the end of summer. What's the timeline now on getting premises ID or individual animal ID in place?"

SEC. JOHANNS: "It's very much not starting over. Some really great work has been done out there, and in fact when I was traveling this week in Tennessee, I had kind of a town hall meeting there, and they were talking to me about some of the things they were doing at the state level there in terms of premises ID.

"And the goal we had is that states would be on-line for premises ID this summer. Every indication is that that's going well. There might be a handful of states that we need to boost along, but we continue to be encouraged by the progress there.

"So now this is still very much on track.

"This next step where we literally start talking about animal ID and tracing where that animal is moving from birth to slaughter is a significant step. This is where we start really talking about changing how the industry operates. And that doesn't happen overnight. Some of us probably wish that it did, but it doesn't. Most important thing we can do at this point is to get input from the folks out there that are going to have to implement the policy.

"We can sit back here in our offices and have theoretical discussions about how this should work, but on the last day there's an industry out there-- there's a cattle feeder, a cow-calf person, whatever it is, or somebody in the poultry industry or swine industry that's got to figure out how to implement what it is.

"And so that's what we're really doing is seeking that input. But very much on track, very anxious to hear comments and continue to move this forward. And the good thing as Keith has indicated there's funding there that is going to help us continue this effort."

MODERATOR: "Our next question is from Sally Schuff of Feedstuffs. Standing by should be Philip Brasher of Des Moines Register.

"Sally?"

REPORTER: "Yes. Thank you, Larry, and thank you, Mr. Secretary.

"My question is, there seems to be a considerable gap in the agreement between various species groups and the industry, and there also seems to be a major concern about the vulnerability to threats. How quickly do you think you can bring the species disagreements into line with an action plan for this?

"And can you address the importance of the threats that are out there if we don't get an animal identification program going soon?"

SEC. JOHANNS: "I would offer a thought on your last question relative to threats. We have always been concerned about food supply here at the USDA and how we fit into that in terms of the agro-terrorism. I just this week spoke at a conference in Kansas City and talked about that and some of the things we need to do.

"I can tell you that the President has been very, very focused on that obviously, and not only focused but he's put funding in his budgets and this proposed budget to assist us in terms of being prepared relative to agro-terrorism.

"So it is obviously a concern. A lot of good things have happened in that area. We could go on and on about some of the things we've done in terms of laboratory testing and being better prepared to identify on a national basis, isolate and then deal with whatever issue we find. It's just a vast improvement in the last couple of years.

"This piece of it however we believe is also significant. And it is a sea change. This is a very big difference in how business is done out there relative to individual animals.

"Your observation is right-- there is not agreement across the sectors. The folks in the swine industry have a little different idea about some of the issues than the folks in the cattle industry. And the poultry industry would probably yet have another idea. But the point is, and I believe this is an important point, if we can get the industries working with us so the system that is developed works for the industry and it accomplishes the goals that we have set out, then we have a chance of doing this right the first time.

"The last thing in the world we want to do is try to push people into a system that won't work. That would be a disaster. So our whole goal here is to gather this input, make sure that we're paying attention to the industry issues and needs, make sure we're building that into the overall goals, and then put a system in place that works the first time."

MODERATOR: "Next question is from Philip Brasher of Des Moines Register. Standing by should be Bruce Hodgkiss (sp).

"Bill?"

REPORTER: "Yes. Mr. Secretary, do you address the issue of liability? Are you going to? Obviously it's been a lot of resistance to the idea of animal ID for cattle producers who worry about being sued."

SEC. JOHANNS: "Again, I'm going to ask Bill Hawks for a few thoughts there, and Bill go ahead."

SEC. HAWKS: "All right. Thank you, Mr. Secretary.

"We are, when we held those listening sessions we constantly got questions about confidentiality and liability. And sometimes I think we have those two being interchanged. My thoughts are that a liability that one might have, they are already exposed to it if they're doing something wrong. If they're doing nothing wrong, there shouldn't be any significant liability.

"What we're doing here shouldn't create any additional liability.

"Having said that, we do feel very strongly that this confidentiality as the Secretary has said earlier is something that needs to be addressed. And I personally attended all those listening sessions, and that was the number one issue.

"So I think while liability is obviously one that is raised consistently, I think it's one that probably is not as big an issue. If you can protect the confidentiality then I think all the producers will be coming on board."

SEC. JOHANNS: "Keith, do you have a comment?"

DR. COLLINS: "No."

SEC. JOHANNS: "Okay."

MODERATOR: "And our final question today will come from Bruce Hodgkiss. Go ahead, please."

REPORTER: "Thank you, gentlemen. Thank you, Larry.

"Obviously the development of infrastructure is a multimillion dollar project here. I just wondered if any thought had been given in this process to using an existing infrastructure, which is in place for the FSA as opposed to APHIS inventing another one. Any thoughts about that?"

SEC. JOHANNS: "Well, I would offer a couple of general thoughts. Needless to say we're open to any suggestion. The most important goal here is to make sure that we do this and we do it in a way that we get it right.

"I'd offer just kind of another philosophical approach. My hope is that when we have a system in place we have created something that allows for a very robust private sector involvement because I really do believe that will be what encourages innovation. That will be what encourages additional private investment. That will be what continues to develop and grow a national animal identification system.

"So again I just emphasize, we're kind of open to the suggestions that are out there. We don't need to rebuild wheels that have already been built.

"On the other hand, again I just want to emphasize I just believe philosophically let's make sure that we're paying attention to the private sector here because there is, I believe, a next generation and a next generation -- and we would hope that they would be a part of that. We don't want to do anything to exclude them from the opportunity to participate in the animal ID system.

"And Keith, go ahead."

DR. COLLINS: "I have one other thing to add to that, and that is that in the development of this infrastructure we have taken great pains to try to minimize the costs of the development of this. One of the ways that we've done that is, we've made available standardized software for premises systems as well as for animal identification and tracking, and we've made those available to the states to adopt those.

"In addition to that, if states already had systems they could present those systems to APHIS and those systems could be certified. So that is another vehicle for economizing on the development of this infrastructure."

SEC. JOHANNS: "Go ahead."

DR. RON DEHAVEN: "I might add just one other comment, and Keith talked about the partnership with the states. There's also an opportunity for partnership with the private sector. For example, there is a database with the Dairy Herd Improvement Association where they already have an extensive database for production records, breeding records, and that sort of thing.

"By incorporating one additional field to include our animal identification number into that database, you've got a perfect partnership between the private sector database and this animal ID database."

SEC. JOHANNS: "I might mention those last comments came from Dr. Ron DeHaven, who of course has been working on this issue also."

MODERATOR: "And it looks like we do have time for two more questions. Kay Ori Ieta (sp) from NHK, followed by Libby Quaid of AP. Kay Ori?"

REPORTER: "Yes, thank you. Mr. Secretary, I wanted to know when you say "individual identification of cattle," will this include information like birth dates? I ask because this is critical information to the Japanese and Japanese consumers."

SEC. JOHANNS: "Well, here's what I would offer on that. I was asked that question a week ago and we look for an animal identification system that again the industry offers their input and birth date could be a possibility, could be a part of that. But here's what I'd say relative to Japan.

"We have that standard at such a level in terms of testing 20-month-old animals, it is so below the international standard of 30 months that quite honestly I just don't see any concern here whatsoever insofar as food safety issues with the Japanese consumer and BSE, which is the issue as you know we've been working on relative to birth dates.

"So again, just let me assure people, not withstanding how this animal identification system may turn out with where we're starting with Japan we're 10 months under the international standard. So we've made a major concession there to try to get things started with Japan. And needless to say, we hope to move that further.

"Ron, did you have a comment?"

DR. DEHAVEN: "Just from a more technical standpoint, Mr. Secretary, I would point out that one of the questions that we're asking in the Federal Register notice is, when should animals be identified? Should it be at time of birth, should it be at the time the animals leave the premises of birth? Tell us what you think should be the requirement recognizing that there in fact may be some species differentiation.

"For example, poultry raised in confinement we know exactly when their birth date was. On the other hand, the other extreme would be cattle in the western states where they're probably born in many cases on the back 40,000 acres and you may not be able to precisely determine the date of birth.

"Certainly the system would have the capability of capturing that. We would just like input on when and how we should do that."

MODERATOR: "Libby Quaid of Associated Press, your question, please?"

REPORTER: "Hi, there. To follow up on two issues that were raised earlier, first you mentioned this as a precursor to rulemaking. Is actual rulemaking on your timeline?

"And also, the first question that was asked about confidentiality, could you describe what thinking is actually in the paper at this point about confidentiality in terms of what USDA envisions? For example, does it mention a need for an exemption from the Freedom of Information Act?"

SEC. JOHANNS: "Ron, do you want to talk about that?"

DR. DEHAVEN: "Let me first talk about the timelines. And again as the Secretary indicated early on this is our current thinking in terms of having a system that starts out voluntary, going to mandatory.

"And the strategic document will suggest that by April of 2007 we would start, by putting out alerts to producers that we are soon going to be requiring individual animal ID and premises registration with the thought process being that in January 2008 we would have mandatory premises registration and individual animal identification or as the case may be group animal identification for those animals that move in lots.

"And then by January of 2009 we would have a mandatory requirement for reporting animal movements so we could actually track animals through the system.

"Again I would emphasize that this is our current thinking. The strategic plan suggests that we would have a voluntary system going to mandatory, and that would be the milestones of the timelines along the way that we would envision that happening. But we would again actively solicit your input on voluntary versus mandatory and then the proposed timeline."

MODERATOR: "Thank you, Reporters, for your questions today.

"Closing thoughts, Mr. Secretary?"

SEC. JOHANNS: "I will close my thoughts where I began. First, to the folks that have worked on this I express my appreciation. This has been a process now that's been going on not only here but across the country for a period of time. People understand the importance of what we are doing.

"And then the other thought I want to offer is, we are just very, very anxious to hear from people out there-- producers, organizations, whoever may be involved in the animal industry. Your thoughts will be factored, considered. We hope to learn a lot from your insight.

"So take the time to get on-line or get in touch with us, and we'll be very, very anxious to receive your thinking.

"Thanks."

MODERATOR: "Secretary of Agriculture Mike Johanns."

"I'm Larry Quinn bidding you a good morning from Washington."