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February 1, 2002

NCBA remains
committed to checkoff

A U.S. District Court has concluded its trial resulting from organizations and individuals challenging the constitutionality of the beef checkoff. In a statement Jan. 16, National Cat-tlemen's Beef Association President Lynn Cornwell affirmed the organization's commitment to the checkoff program.

"Hearing trial arguments, the National Cattlemen's Beef Association still believes the program is constitutional," Cornwell said. "USDA, the Department of Justice and the Nebraska Cattlemen waged a vigorous legal defense of the checkoff. We are confident the facts will ultimately support a victory for the checkoff. If, however, this court rules differently, we are prepared to take our case to a higher court and ensure the checkoff continues."

Federal District Judge Charles Kornmann presided during two days of testimony in an Aberdeen, S.D., courtroom in the case raised by the Livestock Marketing Association (LMA), the Western Organization of Resource Councils (WORC) and individuals in an earlier petition. Defendants in the case are the Agriculture Department, the Cattlemen's Beef Promotion and Research Board, which administers the checkoff, and Nebraska Cattlemen, Inc., which is leading a group of producers to intervene on behalf of the checkoff.

Kornmann has taken the case under advisement and is expected to issue a written ruling later. Regardless of his decision, the ruling is expected to be appealed.

Expansion of HACCP
program proposed by USDA

The Agriculture Department has announced proposals to strengthen a pilot program currently being operated in approximately 25 plants that slaughter young chickens, hogs and turkeys. USDA also announced its intention to propose expanding the program to additional plants on a voluntary basis.

Started in 1997, the HACCP-based Inspection Models Project is an effort to determine how the Food Safety and Inspection Service (FSIS) can improve the use of its online slaughter inspectors and continue to ensure the reduction and/or elimination of defects that pass through traditional inspection. Under the project, FSIS has established performance standards for food safety and other defects that require improved performance by industry.

Participating plants must develop new process control systems to meet these standards. FSIS conducts inspections, which include a final government inspection of every carcass as well as selecting an increased number of samples for verification, to ensure that these standards are met.

This year, USDA will propose regulations in the Federal Register for plants that slaughter young chickens. Proposals for young turkeys and hogs will follow.

RMA delays additional price elections

Since farm bill debate has not been completed by Congress, the Agriculture Department's Risk Management Agency said that it would provide flexibility to producers in selecting crop insurance price elections for this year.

RMA said that "the outcome of congressional deliberations could have a significant impact on commodity prices for the 2002 crop year. Therefore, RMA will not be able to announce additional price elections by deadline."

RMA said it will announce the additional price elections once sufficient information is available and that "under no circumstances will additional price elections be announced later than July 1, 2002." However, "if RMA is unable to determine the appropriate additional price election for the 2002 spring-planted crops by July 1, 2002, the price elections announced on November 30, 2001, will remain the applicable price elections for the 2002 crop year."

NAFTA: More tariffs axed

The United States, Canada and Mexico have agreed to eliminate tariffs on $25 billion in total trade. The provisions of the North American Free Trade Agreement (NAFTA) allow for this accelerated process and were agreed upon in December 2001. The changes were effective Jan. 1.

Canada and Mexico are the United States' largest trading partners. With the 2002 reductions, Mexico's average tariff on U.S. goods will fall from the pre-NAFTA average of 10 percent to under one-half of one percent. Each day the NAFTA parties conduct nearly $1.8 billion in trilateral trade.

Under the tariff acceleration, Mexico and the U.S. are eliminating tariffs on an equivalent set of products, and Mexico will eliminate tariffs on additional items for which the U.S. tariff is already zero.

Mexico and Canada are eliminating tariffs between their two countries on a parallel package of goods. NAFTA originally scheduled the elimination of tariffs on the products included in the agreement through periods extending to the year 2008.

Duties on covered products traded between the United States and Canada were eliminated on Jan. 1, 1998. Following procedures set out in NAFTA, Ambassador Zoellick and his Mexican and Canadian counterparts agreed to accelerate the elimination of tariffs.

Notable Quotables

"When you look back, a lot has changed in the past year, but not President Bush's commitment to ensuring that American agriculture remains a vibrant cornerstone of our nation's economy. Let me assure you this administration remains committed to working with Congress to complete a farm bill quickly, one that will provide agriculture some certainty and to ensure that our farmers and ranchers have the assistance they need."

— Agriculture Secretary Ann Veneman in a speech Jan. 16 to the National Association of Wheat Growers.