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Senators clash on livestock prices

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Tommy

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Senators clash on livestock prices

BY LORI NITSCHKE




WORLD-HERALD BUREAU


WASHINGTON - Worried that some meatpackers may be undercutting farmers and ranchers by incorrectly reporting prices they pay for livestock, Iowa's U.S. senators are holding up efforts to extend a federal system that helps set the price for beef, pork and lamb.

Sens. Chuck Grassley and Tom Harkin say Congress should postpone a proposed five-year authorization of the mandatory livestock reporting program, which expired Sept. 30.

The program is continuing voluntarily until government investigators complete a report about potential problems in the system, including the case of a Nebraska producer whose sale of 1,150 cattle was incorrectly reported. The Iowans favor a one-year extension that they say would allow Congress time to consider changes to the program.

Grassley, a Republican, expressed frustration that the program doesn't have more teeth.

"I don't think I've seen a piece of legislation we've worked so hard to get passed . . . end up doing less than the previous law did," he said, referring to the voluntary system in place before 2001.

The position of Grassley and Harkin, a Democrat, puts them at odds with many in Congress, including Sen. Ben Nelson, D-Neb., who say the meat industry is best served by a long-term extension of the reporting program, guaranteeing a continuous flow of information for producers and buyers as they enter into contracts.

While the program's benefits are most obvious for livestock producers - they use information in the reports when negotiating with buyers - it has broader effects, said Ted Schroeder, an agricultural economist at Kansas State University.

By creating a more efficient market, the program ensures a steady supply of meat, particularly beef.

"The consumers benefit from cattle price reporting very directly by helping them to have access to really cheap beef products," Schroeder said.

Grassley and Harkin say they do not want to miss an opportunity to make changes if Government Accountability Office investigators find discrepancies.

In a letter, Nelson and five Republican senators said authorizing the program for five years would not preclude amending it if problems are documented. The American Meat Institute, an industry group, agrees.

The House has passed a five-year extension, which would expand the program to include prices of pork cuts; the Senate passed a one-year extension. The differences will have to be reconciled.

Among the concerns the Iowa senators have is the difficulty some farmers and ranchers have had in confirming that their trades were listed properly.

The Iowa Department of Agriculture and Land Stewardship attempted to help the Nebraska producer determine how his sale of 1,150 cattle was reported.

Harold Hommes, who heads the department's Bureau of Marketing, said federal officials told his department they could not have access to that information, and they were less than helpful to the rancher as well.

The rancher, whose name has not been made public, declined through Hommes' office and Grassley's office to be interviewed.

At a hearing before the Senate Agriculture Committee, the acting administrator of the federal program said the Nebraskan's sale was reported but incorrectly categorized as a sale of dressed meat instead of live cattle.

Hommes said the discrepancy made it impossible for the producer to find his transaction and also meant the market for live cattle was missing the data from the high-priced sale.

Another concern of the Iowans is that packers are not being punished for violations.

At the hearing, Kenneth Clayton, the program's acting director, said the office has issued 18 warning letters since 2001 and assessed civil fines of $10,000 each on two producers. In both cases, the fines were suspended, provided no further violations of the law occurred within a year.

Mark Dopp, a spokesman for the American Meat Institute, questioned the call for greater penalties for reporting mistakes.

Dopp said the government has dealt appropriately with errors, which he described as often relatively minor mistakes such as accidentally transposing numbers.

Those who want tougher penalties, he said, are akin to those "looking for severe sanctions for people doing 57 in a 55 mph zone."

Sen. Chuck Hagel, R-Neb., has said he supported the five-year extension of the law but, given Grassley's and Harkin's opposition, he encouraged House leaders to accept a one-year extension.

Hagel's desire for quick action came in part because of a 1999 bill passed by the Nebraska Legislature that would require the state to set up its own livestock reporting system if a national one did not exist.

Nebraska Agriculture Secretary Greg Ibach said that if the federal reporting system has not been reinstated by the time the Legislature meets next winter, he would have to seek funding to put a Nebraska system in place.

In an effort to head off that possibility, Gov. Dave Heineman sent letters to Congress asking members to resolve the issue over the federal program as quickly as possible.

Heineman said creating a state system would be costly, "especially when it appears the existing (federal) act will eventually be reauthorized."

Opponents of the price reporting program are few and far between, said Jay Truitt, a lobbyist for the National Cattlemen's Beef Association. He said Congress needs to move ahead on reinstating the mandatory program and then it can tackle problems.

"If there are repairs that need to be made to the system, we will support them, absolutely," Truitt said, "but you don't throw the baby out with the bath water."
 
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