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entitled 'National Animal Identification System: USDA Needs to Resolve 
Key Implementation Issues to Achieve Rapid and Effective Disease 
Traceback' which was released on August 3, 2007. 

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Report to the Chairman, Committee on Agriculture, Nutrition, and 
Forestry, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

July 2007: 

National Animal Identification System: 

USDA Needs to Resolve Several Key Implementation Issues to Achieve 
Rapid and Effective Disease Traceback: 

GAO-07-592: 

GAO Highlights: 

Highlights of GAO-07-592, a report to the Chairman, Committee on 
Agriculture, Nutrition, and Forestry, U.S. Senate 

Why GAO Did This Study: 

Livestock production contributed nearly $123 billion to the U.S. 
economy in 2006. In response to concerns about animal disease 
outbreaks, the U.S. Department of Agriculture (USDA) announced in 
December 2003 that it would implement a nationwide program—later named 
the National Animal Identification System (NAIS)—to help producers and 
animal health officials respond quickly and effectively to animal 
disease events in the United States. 

In this context, GAO determined (1) how effectively USDA is 
implementing NAIS and, specifically, the key issues identified by 
livestock industry groups, market operators, state officials, and 
others; (2) how USDA has distributed cooperative agreement funds to 
help states and industry prepare for NAIS and evaluated the agreements’ 
results; and (3) what USDA and others estimate are the costs for USDA, 
states, and industry to implement NAIS. In conducting its work, GAO 
reviewed USDA documents; interviewed agency, industry, and state 
officials; and consulted 32 animal identification (ID) experts. 

What GAO Found: 

In implementing the NAIS program, USDA has taken some steps to address 
issues identified by livestock industry groups, market operators, state 
animal health officials, and others. Nonetheless, the agency has not 
effectively addressed several issues that, if left unresolved, could 
undermine the program’s ability to achieve the goal of rapid and 
effective animal disease traceback. Specifically, USDA’s decision to 
implement NAIS as a voluntary program may affect the agency’s ability 
to attract the necessary levels of participation. However, some 
industry groups believe that NAIS could succeed as a voluntary program, 
or that USDA needs to first resolve several issues before making 
participation mandatory. Agency officials are analyzing what 
participation levels are necessary to meet the program’s goal and may 
introduce benchmarks to measure progress. In addition, several key 
problems hinder USDA’s ability to implement NAIS effectively: • USDA 
has not prioritized the implementation of NAIS by species or other 
criteria. Instead, the agency is implementing NAIS for numerous species 
simultaneously, causing federal, state, and industry resources to be 
allocated widely, rather than being focused on the species of greatest 
concern. 

* USDA has not developed a plan to integrate NAIS with preexisting USDA 
and state animal ID requirements. As a result, producers are generally 
discouraged from investing in new ID devices for NAIS. 

* USDA has not established a robust process for selecting, 
standardizing, and testing animal ID and tracking technologies. 

* USDA does not clearly define the time frame for rapid traceback, 
possibly slowing response and causing greater economic losses. 

* USDA does not require potentially critical information to be 
recorded, such as species or age, in the NAIS databases. 

USDA has awarded $35 million in NAIS cooperative agreements from fiscal 
years 2004 through 2006 to 49 states, 29 tribes, and 2 territories to 
help identify effective approaches to register premises and identify 
and track animals. However, USDA has not consistently monitored or 
formally evaluated the results of cooperative agreements or 
consistently shared the results with states, industry groups, and other 
stakeholders. As a result, USDA cannot be assured that the agreements’ 
intended outcomes have been achieved and, furthermore, that lessons 
learned and best practices are used to inform the program’s progress. 

No comprehensive cost estimate or cost-benefit analysis for the 
implementation and maintenance of NAIS currently exists. As a result, 
it is not known how much is required in federal, state, and industry 
resources to achieve rapid and effective traceback, or whether the 
potential benefits of the program outweigh the costs. Industry groups 
and state officials say the cost of implementing NAIS is one of their 
biggest concerns. USDA plans to hire a contractor to conduct a cost-
benefit analysis, in part to more precisely forecast the economic 
effects of NAIS. 

What GAO Recommends: 

GAO made several recommendations to help USDA achieve the program’s 
goal of rapid and effective animal disease traceback. In commenting on 
a draft of this report, USDA generally agreed with the recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-592]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Lisa Shames at (202) 512-
3841 or ShamesL@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Key NAIS Implementation Issues Are Unresolved and Could Undermine the 
Program's Goal of Rapid and Effective Traceback: 

USDA Has Awarded NAIS Cooperative Agreements to Identify Effective 
Implementation Approaches but Has Not Formally Evaluated Agreements' 
Results: 

Total NAIS Program Costs Have Not Been Determined, but USDA Recently 
Announced Plans to Develop a Cost-benefit Analysis: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Select Domestic and Foreign Animal Diseases of Concern 
Identified by USDA: 

Appendix III: Members of GAO's Expert Panel on NAIS: 

Expert Panel Members: 

Appendix IV: GAO Expert Panel Questions and Responses on NAIS: 

Expert Panel: USDA's Implementation of the National Animal 
Identification System: 

Appendix V: Select International Animal Identification and Tracking 
Programs: 

Appendix VI: Information on NAIS Cooperative Agreements: 

Appendix VII: Comments from the U.S. Department of Agriculture: 

GAO Comments: 

Appendix VIII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: USDA NAIS Budget Data, Fiscal Years 2004 (CCC Funds) through 
2006: 

Table 2: USDA Funding for NAIS Cooperative Agreements to States, 
Territories, and Tribes, Fiscal Years 2004 through 2006: 

Table 3: Species Covered by USDA NAIS Cooperative Agreement Field 
Trials, Fiscal Years 2004 and 2005: 

Table 4: NAIS Premises Registration Statistics, by State, as of June 4, 
2007: 

Table 5: USDA's Criteria for Distributing NAIS Cooperative Agreement 
Funding in Fiscal Year 2007: 

Figures: 

Figure 1: A Calf Identified with Both a Visual and an Electronic Tag: 

Figure 2: Number of NAIS Premises Registered, 2005 to Present: 

Abbreviations: 

APHIS: Animal and Plant Health Inspection Service: 

BSE: bovine spongiform encephalopathy: 

CCC: Commodity Credit Corporation: 

EU: European Union: 

FMD: foot-and-mouth disease: 

ID: identification: 

NAIS: National Animal Identification System: 

OMB: Office of Management and Budget: 

RFID: radio frequency identification: 

TB: tuberculosis: 

USDA: U.S. Department of Agriculture: 

United States Government Accountability Office: 
Washington, DC 20548: 

July 6, 2007: 

The Honorable Tom Harkin: 
Chairman: 
Committee on Agriculture, Nutrition, and Forestry: 
United States Senate: 

Dear Mr. Chairman: 

U.S. agriculture provides an abundant supply of food and other products 
for Americans and others around the world, annually generating more 
than $1 trillion in economic activity, including more than $68 billion 
in exports in 2006. Because of the economic importance of the 
agriculture sector and the risks to public health as well as the 
economy, we have designated the federal oversight of food safety as a 
high-risk area.[Footnote 1] Within the broader sector, livestock 
production contributed nearly $123 billion to the U.S. economy in 2006, 
including $13.4 billion in livestock, poultry, and dairy 
exports.[Footnote 2] One way to protect the health of livestock 
animals--which are critically important to the integrity and safety of 
the nation's food supply, the well-being of Americans, and the U.S. 
economy--is through a national animal identification (ID) system to 
trace back and contain diseases that spread rapidly. Our recent work 
has described animal diseases and their economic and, in some cases, 
human health consequences. For example, a highly pathogenic strain of 
avian influenza has spread to nearly 60 countries over the past few 
years, resulting in the death and destruction of millions of wild and 
domestic birds and infecting almost 300 humans, more than one-half of 
whom have died--creating serious concerns that the virus could reach 
North America at any time.[Footnote 3] In addition, the first known 
U.S. case discovered in December 2003 of one cow infected with bovine 
spongiform encephalopathy (BSE) caused the U.S. beef industry to lose 
more than 80 percent of its export trade, or an estimated $2 billion, 
between January and September 2004.[Footnote 4] Commonly known as mad 
cow disease, BSE has been linked by scientists to a fatal neurological 
disease in humans known as variant Creutzfeldt-Jacob disease. Another 
disease of particular concern is foot-and-mouth disease (FMD), a highly 
contagious livestock disease that does not typically affect humans and 
last occurred in the United States in 1929. According to several 
estimates, the direct costs of controlling and eradicating a U.S. 
outbreak of FMD could range up to $27 billion in current 
dollars.[Footnote 5] 

In response to concerns about such outbreaks occurring in the United 
States and in recognition that speed and accuracy are critical factors 
in controlling a disease, the U.S. Department of Agriculture (USDA) 
announced in December 2003 that it would lead the design and 
implementation of a nationwide program--later named the National Animal 
Identification System (NAIS)--to enable USDA, states, and industry to 
quickly and efficiently locate all infected and potentially exposed 
animals and premises that have had contact with a foreign or domestic 
disease of concern. USDA recognized that a fully functional animal 
tracking system will keep the United States competitive in 
international markets, can help reassure foreign consumers about the 
health of U.S. livestock, and may satisfy other countries' import 
requirements. Internationally, some of the United States' major trading 
partners--such as the European Union (EU), Japan, and Canada--already 
have mandatory national animal ID programs in place for certain 
species. The Animal Health Protection Act authorizes the Secretary of 
Agriculture to carry out operations and measures to detect, control, or 
eradicate livestock pests and diseases,[Footnote 6] and USDA has 
delegated this responsibility to its Animal and Plant Health Inspection 
Service's (APHIS) Veterinary Services. USDA cites this broad authority 
for implementing NAIS as either a voluntary or mandatory program. 

NAIS is currently being implemented for nine livestock species groups: 
bison; camelids (llamas and alpacas); cattle (beef and dairy); cervids 
(deer and elk); equine (horses, mules, donkeys, and burros); goats; 
poultry; sheep; and swine. Since 2004, USDA has received input on the 
design and implementation of the program from various stakeholders, 
including industry groups, individual producers, livestock markets, 
slaughter facilities (processors), and state animal health officials. 
USDA says that because NAIS is a state-federal-industry partnership, 
the agency has used stakeholder input to adjust the program as NAIS has 
evolved, and it encourages continued stakeholder input. 

NAIS consists of three components: (1) registering all "premises" that 
manage or handle livestock, such as farms, feedlots, veterinary 
clinics, and livestock markets; (2) identifying livestock animals; and 
(3) tracking animal movements throughout the production process, from 
their premises of origin to their slaughter or death. Initially, USDA 
stated that NAIS would start as a voluntary program and later become 
mandatory, but, in late 2006, the agency decided that NAIS would remain 
voluntary. The agency also provided a timeline for implementation and 
set participation benchmarks that called for gradually increasing the 
percentages of premises registered, animals identified, and animals 
tracked. By August 2005, all states had the capability of registering 
premises, and, as of late May 2007, USDA reported that more than 
390,000 premises, or 27.5 percent of the national estimate, were 
registered in NAIS. 

Of the total $85.0 million funding made available for NAIS from fiscal 
years 2004 through 2006, USDA has awarded $35.0 million in cooperative 
agreements to states, territories, and tribes to help identify 
effective approaches to register premises and to identify and track 
animals. In fiscal year 2007, Congress appropriated another $33.0 
million to develop and implement NAIS, and the President's Budget in 
fiscal year 2008 requested an additional $33.1 million for the program. 
Premises registration is currently funded by USDA, states, territories, 
and tribes and, therefore, is free to the producer. The costs of animal 
ID and tracking are to be borne by the livestock industry and will 
vary, depending on the choices made by individual producers. 

In this context, we determined (1) how effectively USDA is implementing 
NAIS and, specifically, the key implementation issues identified by 
livestock industry groups, market operators, state animal health 
officials, and others; (2) how USDA has distributed cooperative 
agreement funding to help states and industry prepare for NAIS and 
evaluated the agreements' results; and (3) what USDA and others 
estimate are the costs for USDA, states, and the livestock industry to 
implement and maintain NAIS. 

To address all three objectives, we reviewed USDA documents, 
interviewed agency officials responsible for implementing NAIS, and 
conducted site visits to selected livestock markets and cooperative 
agreement field trials. We also conducted structured interviews in 
person or via telephone with animal health officials in seven states. 
These states were selected on the basis of their geographic dispersion; 
the range in the number of premises located in each state; and, in some 
cases, their high levels of livestock production. We also conducted 
structured interviews in person or via telephone with, and reviewed 
documents from, representatives from numerous stakeholder 
organizations, including several NAIS industry working groups. In 
addition, for the first and third objectives, we convened a Web-based 
panel of 32 experts to learn their beliefs and opinions on various 
aspects of USDA's implementation of NAIS. We selected experts who were 
actively involved in the development or implementation of NAIS and were 
knowledgeable of its details; who had conducted research on animal ID, 
or had published in peer-reviewed journals on animal ID; or who were 
recognized by their peers as an expert on NAIS. For the second 
objective, we also reviewed USDA documentation related to cooperative 
agreements signed between USDA and states, territories, tribes, and 
industry groups from fiscal years 2004 through 2007. For the third 
objective, we asked USDA and others for any NAIS cost estimates they 
had developed, and we reviewed federal guidance for developing cost- 
benefit analyses. A more detailed description of our scope and 
methodology is presented in appendix I. We conducted our work from June 
2006 to May 2007 in accordance with generally accepted government 
auditing standards. 

Results in Brief: 

USDA has steadily increased the number of livestock premises registered 
in the nation and taken some steps to address stakeholder concerns in 
implementing NAIS. However, the agency has not effectively addressed 
several key issues identified by livestock industry groups, market 
operators, state animal health officials, and others that, if left 
unresolved, could undermine the program's goal of rapid and effective 
traceback and thus hinder its success. Foremost among these issues is 
USDA's decision in late 2006 to continue implementing NAIS as a 
voluntary program and to drop participation benchmarks that were 
intended to gauge progress. Many industry groups, state animal health 
officials, and experts say this approach may affect the agency's 
ability to attract the necessary levels of participation to quickly and 
efficiently locate all animals that are potentially exposed to a 
disease. However, some industry groups oppose the program being 
mandatory because they believe that NAIS could succeed as a voluntary 
program or that USDA first needs to resolve several implementation 
issues. USDA officials told us that the agency is analyzing what 
participation levels are necessary to meet the program's goal, and that 
it may introduce new, risk-based benchmarks, accordingly. In addition, 
several other key problems hinder the agency's ability to implement 
NAIS effectively, as follows: 

* USDA has not prioritized the implementation of NAIS by species or 
other criteria. Instead, the agency is implementing NAIS for numerous 
species simultaneously, regardless of the species' economic value, 
their risk of diseases of concern, the potential human health impact of 
these diseases, or other criteria. Consequently, federal, state, and 
industry resources for NAIS have been allocated widely, rather than 
being focused first on the species of greatest concern and allowing 
other species to be included later, on the basis of lessons learned. 
Twenty-one of the 32 expert panel members said USDA should definitely 
or probably implement NAIS incrementally by species and suggested 
criteria to prioritize the order of implementation. USDA officials told 
us that prioritizing implementation may be appropriate, such as 
focusing on specific diseases of concern or commercial operations, and 
that the states should determine their own priorities for 
implementation. 

* Although USDA aims to minimize the financial and practical impact on 
producers and others in implementing NAIS, the agency has not developed 
a plan to integrate NAIS with preexisting animal ID requirements, such 
as scrapie ear tags and brands, for other USDA and state animal health 
programs. As a result, producers have generally been discouraged from 
investing in new ID devices for NAIS, according to industry groups we 
interviewed. 

* USDA has not established a robust process for selecting, 
standardizing, and testing ID and tracking technologies. While 
international programs have generally used specific animal ID devices 
for their national animal ID programs, USDA has taken a "technology- 
neutral" position to allow market forces to determine what devices are 
most effective and practical. In addition, industry groups, experts, 
and others told us that electronic ID technologies do not always 
perform well in production environments, such as livestock markets, and 
that the agency has not independently tested any ID or tracking 
devices. Consequently, producers, livestock markets, and others are 
reluctant to invest in new ID or tracking devices for NAIS, according 
to industry groups and the experts. 

* USDA does not clearly define the time frame for rapid animal disease 
traceback. The definition of "rapid traceback" may vary by disease 
because some diseases spread more quickly than others, but by not 
clearly defining a rapid response for a given disease, there could be a 
slower response and greater economic losses. A senior USDA official 
told us the agency first needs to identify current baselines for 
traceback before the agency can determine time-sensitive traceback 
goals for NAIS. 

* USDA does not require potentially critical information--such as the 
species, date of birth, or approximate age of animals--to be recorded 
in NAIS animal ID and tracking databases. This information can be 
critical for efficient traceback because it helps limit the scope of an 
investigation, thus saving time and potentially minimizing the economic 
impact. USDA officials told us that although animal-specific data can 
be valuable, the agency is collecting the minimum amount of information 
needed due to some producers' concerns about protection of their 
proprietary information in NAIS databases. 

USDA awarded 169 NAIS cooperative agreements totaling $35 million to 49 
states, 29 tribes, and 2 territories from fiscal years 2004 through 
2006 to help identify effective approaches to register premises and 
identify and track animals. To date, USDA has not consistently 
monitored cooperative agreements, and, as a result, the agency cannot 
be assured that the agreements' intended outcomes have been achieved. 
In addition, USDA has not formally evaluated or consistently shared the 
results of cooperative agreements with state departments of 
agriculture, industry groups, and other NAIS stakeholders, which would 
enable lessons learned and best practices to inform the program's 
progress. USDA officials told us the quality of reports submitted to 
the agency varies, and USDA has had insufficient resources to conduct 
additional oversight. In fiscal year 2007, USDA plans to increase 
oversight of all cooperative agreements awarded that year by assessing 
progress midyear. Furthermore, USDA plans to give those states with 
greater numbers of premises registered some flexibility in using 
cooperative agreement funds to subsidize the purchase of animal 
tracking equipment for livestock markets. For the first time, in fiscal 
year 2007, USDA also plans to award $6 million in cooperative 
agreements to nonprofit industry and other groups to increase premises 
registration efforts. 

Although USDA began to implement NAIS in 2004, no comprehensive cost 
estimate or cost-benefit analysis for the implementation and 
maintenance of NAIS currently exists. As a result, it is not known how 
much is required in federal, state, and industry resources to achieve 
rapid and effective traceback or whether the potential benefits of the 
program outweigh the costs. Twenty-nine of the 32 expert panel members 
said that USDA should definitely or probably publish a cost-benefit 
analysis for NAIS. The NAIS working groups, other livestock industry 
representatives, and state animal health officials we interviewed also 
said that the cost of implementing NAIS remained one of their biggest 
concerns. USDA officials plan to hire a contractor to conduct a cost- 
benefit analysis, in part, to more precisely forecast the program's 
economic effects. Moreover, the Senate Committee on Appropriations and 
the House of Representatives have raised concerns over how USDA has 
spent funds to develop and implement NAIS. Finally, the experts had 
mixed views on the impact that NAIS would have on the livestock 
industry, such as whether NAIS may lead to changes in market structure 
or affect prices. 

To ensure that USDA continues to take steps to address unresolved 
issues, we are making several recommendations aimed at improving USDA's 
efforts to implement NAIS more effectively and efficiently. For 
example, we are recommending that USDA reestablish participation 
benchmarks to gauge progress in registering premises and identifying 
and tracking animals; monitor participation; and, if participation does 
not meet the benchmarks, take further action, such as making 
participation mandatory or creating incentives to achieve those levels 
of participation. In addition, we are recommending that USDA establish 
a robust process to select, standardize, and independently test and 
evaluate the performance of animal ID and tracking devices to ensure 
they meet minimum standards. We are also recommending that USDA 
increase the monitoring of NAIS cooperative agreements, evaluate and 
publish the results of cooperative agreements on a timely basis, and 
publish the planned analysis of the costs and benefits of NAIS 
following criteria established in Office of Management and Budget (OMB) 
guidance. 

In commenting on a draft of this report, USDA stated that it 
appreciated our comprehensive evaluation of NAIS and generally agreed 
with our recommendations. However, regarding our recommendation that 
USDA establish a robust process to select, standardize, and 
independently test and evaluate the performance of animal ID and 
tracking devices to ensure they meet minimum standards, USDA believed 
that these standards must be defined through a consensus of affected 
stakeholders and that working with stakeholders to resolve this issue 
is imperative before selecting specific technologies for NAIS. We 
recognize the need for USDA to work with stakeholders before 
determining which ID and tracking devices are most appropriate for 
NAIS. However, we emphasize that the sooner USDA selects specific 
technologies, the sooner the animal ID and tracking components of the 
program will be implemented effectively and efficiently. See the 
"Agency Comments and Our Evaluation" section and appendix VII for a 
reprint of USDA's comment letter and our responses to these comments. 

Background: 

The concept of animal ID is not new, in the United States or abroad. 
For decades, American producers have kept records on, and used ID 
methods for, livestock animals for both commercial and regulatory 
purposes. Specifically, several USDA and state animal disease 
eradication programs--such as programs for tuberculosis (TB) in cattle, 
pseudorabies in swine, and scrapie in sheep and goats--include animal 
ID requirements. Certain species and classes of animals require 
officially recognized ID devices for interstate commerce, and all live 
animals imported into, or exported from, the United States require 
official ID. Thus, many livestock animals are already identified in the 
United States by ear tags, branding, tattoos, or other devices. 
However, the use of ID devices varies by breed, species, and state, 
and, until NAIS, no attempt had been made to create a uniform animal ID 
system of national scope and across multiple species using a universal 
numbering system and central data repository. 

Due to serious concerns about the United States' ability to safeguard 
its livestock from the harmful effects of disease, in 2002, the 
National Institute of Animal Agriculture--an organization of producers, 
veterinarians, scientists, government representatives, and allied 
industries--initiated a state-USDA-industry task force of approximately 
70 representatives to create a national animal ID system. In 2003, USDA 
expanded upon this work and established a development team consisting 
of more than 70 industry associations, organizations, and government 
agencies. That team ultimately produced the United States Animal 
Identification Plan in December 2003, which provided the foundation for 
NAIS. Although early versions of the plan focused on food animals only, 
other livestock species were later incorporated. The plan was being 
finalized when the nation's first case of BSE was confirmed on December 
25, 2003. Five days later, the Secretary of Agriculture announced 
measures to guard against BSE and indicated that USDA would expedite 
the implementation of a national animal ID system. 

Since 2004, USDA has solicited public comments on draft NAIS policy 
documents, held public listening sessions, and met with industry groups 
and others in its efforts to design and implement NAIS. In addition, 
USDA has received input from 10 working groups comprising producers, 
academics, and others representing the various livestock species and 
industry sectors currently included in NAIS. These working groups make 
recommendations to the NAIS Subcommittee, a group of state and industry 
stakeholders established by USDA in September 2004 to provide regular, 
formal input to the USDA Secretary's Advisory Committee on Foreign 
Animal and Poultry Diseases (full committee) about how NAIS should 
progress. The NAIS Subcommittee is also responsible for receiving input 
from the National Institute of Animal Agriculture; the United States 
Animal Health Association, an organization representing state 
veterinarians and allied industry groups; and other organizations and 
individuals. The full committee is a federal advisory group of state, 
academic, and industry experts selected by the Secretary, which meets 
once a year or as deemed necessary by the Secretary. While the NAIS 
Subcommittee meets periodically, the full committee has met only twice-
-in September 2004 and September 2006--since the creation of NAIS. USDA 
is not obligated to take action on the NAIS Subcommittee's, full 
committee's, or others' recommendations. 

For the premises registration component of NAIS, states and tribes are 
responsible for submitting premises information--given to them by 
producers and others--to a central, Web-based USDA premises database. 
In turn, USDA allocates a unique, 7-digit, alphanumeric, premises ID 
number (e.g., A123B45). The premises then receives confirmation online 
or by mail from the relevant state or tribe with its unique premises ID 
number. 

For the animal ID component, USDA published an interim rule, effective 
in November 2004, recognizing the Animal Identification Number as a 
new, official numbering system for individual animals in interstate 
commerce.[Footnote 7] Producers and other NAIS participants can order 
ID devices from USDA-approved managers that are imprinted with a 
unique, 15-digit Animal Identification Number for use on animals that 
move through the production process as individuals, as is typical in 
the cattle, sheep, and goat industries. Figure 1 shows a calf that is 
identified with tags in both ears, with the calf's left ear bearing an 
electronic tag and its right ear bearing a visual tag. Both tags have 
the Animal Identification Number for official ID purposes, and the 
visual tag also has a number used for the producer's herd management 
purposes. For animals of the same species that typically move through 
the production chain as a group, such as commercial poultry and swine, 
producers can instead identify the animals with a group/lot ID number. 
Group/Lot ID numbers are self-generated by the premises (not assigned 
by USDA) and are maintained at the premises in management records. 

Figure 1: A Calf Identified with Both a Visual and an Electronic Tag: 

[See PDF for image] 

Source: USDA. 

[End of figure] 

Lastly, for the animal tracking component, USDA has developed the 
Animal Trace Processing System to allow state and federal animal health 
officials to request information, in the event of an animal health 
investigation, from multiple private and state animal tracking 
databases containing animal location and movement records. Producers 
and others are responsible for reporting certain animal movements, such 
as when a change of ownership occurs or when animals commingle with 
other herds or flocks. Events that would enable state and federal 
animal health officials to request information from this network of 
databases include an indication or a confirmed positive test of a 
foreign animal disease, an animal disease emergency as determined by 
the Secretary of Agriculture or state departments of agriculture, or a 
need to conduct a trace to determine the origin of infection for a 
domestic disease of concern. (See app. II for a list of domestic and 
foreign animal diseases of concern identified by USDA.) 

Key NAIS Implementation Issues Are Unresolved and Could Undermine the 
Program's Goal of Rapid and Effective Traceback: 

USDA has steadily increased the number of livestock premises registered 
in the nation and has taken some steps to address stakeholder concerns 
in implementing NAIS. However, the agency has not effectively addressed 
a number of key issues identified by livestock industry groups, market 
operators, state animal health officials, and others that, if not 
ultimately resolved, could undermine the program's goal of rapid and 
effective traceback, thus hindering its success. USDA's decision to 
implement NAIS as a voluntary program without benchmarks to measure 
progress may affect the agency's ability to attract the necessary 
levels of participation to quickly and efficiently locate all animals 
potentially exposed to a disease. In addition, USDA has not prioritized 
the implementation of NAIS by species or other criteria. Furthermore, 
USDA has not developed a plan for integrating NAIS with other USDA and 
state animal ID requirements, nor has it established a robust process 
for selecting, standardizing, and testing ID and tracking technologies. 
The agency also does not clearly define the time frame for rapid 
traceback. Finally, USDA does not require potentially critical 
information for efficient traceback to be recorded in NAIS databases. 

USDA Is Implementing NAIS as a Voluntary Program without Participation 
Benchmarks: 

During the first 2 years of the program's implementation, USDA stated 
several times that participation in NAIS would initially be voluntary 
but would eventually become mandatory to achieve full participation 
and, thus, the goal of rapid and effective traceback. One of USDA's 
first major NAIS policy documents, the Draft Strategic Plan 2005-2009, 
released in April 2005, stated that during initial implementation, 
participation would be voluntary so that stakeholders could have the 
opportunity to obtain experience with the program and provide feedback 
as successful and practical solutions evolved. The plan also provided a 
timeline for implementation, with premises registration and animal ID 
to be required by January 2008 and the reporting of defined animal 
movements to be required by January 2009, under what would become an 
entirely mandatory program. The plan stated that this phased-in 
approach was "to support the transition from voluntary to mandatory as 
full implementation is achieved." In addition, the plan also stated 
that, "While market forces may eventually create more inclusiveness, 
the clear stakeholder support for transitioning to a mandatory program 
and the urgency of achieving the goal, suggest that setting a date for 
that transition would benefit the program." 

Later, the April 2006 Strategies for the Implementation of NAIS set 
benchmarks that were intended to gauge progress in attaining full 
participation. These benchmarks called for gradually increasing the 
percentages of premises registered, animals identified, and animals 
tracked from January 2007 through January 2009. Specifically, for 
premises registration, USDA aimed for 25 percent participation by 
January 2007, 70 percent by January 2008, and 100 percent by January 
2009. In addition, the implementation plan called for 40 percent of 
animals being identified by January 2008, 100 percent of "new" animals 
less than 1 year of age being identified by January 2009, and 60 
percent of new animals having complete tracking data by January 2009. 
USDA stated that it would evaluate whether participation levels were 
increasing at rates that would achieve full participation by 2009, and 
that, if this were not the case, USDA would develop federal regulations 
to require industry to identify their premises and animals. 

In May 2006, in an announcement for NAIS cooperative agreements, USDA 
stated that it anticipated promulgating regulations by early 2008 to 
require participation in all three components of the program. 
Furthermore, in a document supporting its fiscal year 2007 budget 
submission to OMB, USDA stated that the intrinsic value of its 
investment in NAIS was based on the assumption that there would be 
sufficient animal ID and movement data available to support the 
program's traceback goal. USDA also said that if participation fell 
below expectations, traceback would periodically fail because of the 
lack of animal tracking information from nonparticipants. 

However, in August 2006, reporting that 20 percent of the nation's 
premises had been registered, USDA decided that NAIS would permanently 
remain a voluntary program. USDA officials told us that due to 
opposition from some industry groups, it is imperative that industry 
advance the program, rather than government regulations, to encourage 
participation. Some industry groups believe that NAIS could succeed as 
a voluntary program or that USDA first needs to resolve several key 
implementation issues before making participation mandatory. For 
example, officials from the National Cattlemen's Beef Association told 
us they believe that NAIS could be successful as a voluntary program, 
such as the beef industry's 20-year-old Beef Quality Assurance program, 
which covers about 95 percent of cattle in feedlots and aims to reduce 
drug residues and pathogen contamination. The association officials 
also told us that if NAIS became mandatory, producers who have 
voluntarily participated would lose the market advantage they currently 
enjoy through higher prices paid at market or slaughter for animals 
they identify for marketing or management purposes. Another industry 
group, the American Farm Bureau Federation, which in 2006 supported 
NAIS being a mandatory program, expressed its support in January 2007 
for NAIS to be voluntary, while cautioning that USDA should not make 
the program mandatory until the agency has published a full cost 
analysis for the program. The Livestock Marketing Association--a 
national trade association representing over 700 livestock auction 
markets, dealers, and other livestock marketing businesses--also wrote 
in comments to USDA in 2005 that NAIS should remain voluntary until 
USDA addresses several implementation issues, including the 
effectiveness and availability of animal ID technology. 

In November 2006, USDA also dropped its participation benchmarks from 
the most recent policy document for the program, the draft NAIS User 
Guide.[Footnote 8] Despite a steady increase in the number of premises 
registered since USDA began reporting premises registration information 
in January 2005 and reaching the 25 percent target (nearly 360,000 
premises) in early February 2007 (see fig. 2), USDA officials told us 
they dropped the participation benchmarks because meeting future 
benchmarks for all components of NAIS was no longer realistic. Instead, 
the officials said the agency is analyzing what participation levels 
for all components of NAIS would achieve the "critical mass" necessary 
to have an efficient and effective program. The officials added that 
the agency does not expect that equal levels of involvement across all 
species will be necessary, and that new, risk-based participation 
benchmarks for premises registration, animal ID, and animal tracking 
may be developed accordingly, which could vary by species. However, 
USDA has not determined what action it may take if participation levels 
do not meet those new benchmarks. 

Figure 2: Number of NAIS Premises Registered, 2005 to Present: 

[See PDF for image] 

Source: GAO summary of USDA data. 

Note: On the basis of 2002 U.S. Census of Agriculture data, USDA's 
National Agriculture Statistics Service estimates there are 
approximately 1.4 million distinct livestock premises nationwide (with 
more than $1,000 in annual income), which may contain one or more 
species. 

[End of figure] 

Although it may be too soon to determine whether USDA's current 
approach will be successful, many industry groups, state animal health 
officials, and the experts we surveyed say the program will likely need 
to become mandatory to achieve the levels of participation that are 
necessary to rapidly and effectively locate all potentially exposed 
animals in a disease traceback. In the Draft Strategic Plan, for 
instance, USDA reported that most individuals who spoke about this 
subject at the agency's 2004 listening sessions preferred, by a ratio 
of 3:1, a mandatory program to a purely voluntary program. USDA also 
reported at that time that a survey of National Institute of Animal 
Agriculture members showed even stronger support, by a ratio of 8:1, 
for a program that is or will become mandatory. In addition, state and 
industry officials we interviewed said that as a voluntary program 
without benchmarks, NAIS has lost momentum, deterred participation, and 
faces an uncertain future. For example, officials from one major 
agricultural state told us that USDA's changed direction on whether the 
program would become mandatory has challenged the state's premises 
registration efforts, because many producers are motivated by 
compliance with federal requirements, not necessarily by NAIS's 
traceback goal alone. These officials also said that the lack of 
participation benchmarks had compromised the state's credibility with 
producers and its ability to make progress in implementation. As of 
early June 2007, this state had less than 16 percent of its premises 
registered, and the officials believed there is little incentive for 
producers to participate in NAIS. Moreover, three states where premises 
registration is mandatory by state law--Indiana, Michigan,[Footnote 9] 
and Wisconsin--accounted for about 26 percent of USDA's total premises 
registered nationally as of that time. 

Furthermore, a majority of the 32 expert panel members said that 81 
percent to 100 percent of producers, livestock markets, and slaughter 
facilities would need to register their premises to achieve the 
program's goal of rapid and effective traceback (see apps. III and IV 
for more details about these experts and their responses to our 
questions). By contrast, under a voluntary program, only 1 expert 
believed that producers would achieve at least 81 percent participation 
in premises registration, while 11 experts believed that level would be 
achieved by livestock markets, and 20 experts believed that level would 
be achieved by slaughter facilities. For the animal ID and tracking 
components, experts had similar views. For example, a majority believed 
that 76 percent to 100 percent of producers, markets, and slaughter 
facilities would need to participate in animal tracking to make the 
program effective, while a minority believed that level would be 
achieved in any of those sections under a voluntary program. Overall, 
27 of the 32 experts said participation in NAIS should definitely or 
probably be mandatory. 

Several other countries, including the United States' major 
agricultural trading partners and competitors, have instituted 
mandatory animal ID programs for cattle and, in some cases, a few other 
species. For example, the EU has mandatory programs in which all cattle 
born or moved across EU state lines as of 2000 must be identified with 
two individual ear tags and an animal passport, and member states must 
maintain computerized databases that record births, movements, and 
deaths. Since several cases of BSE were discovered in 2001, Japan has 
made a series of changes to its food safety legislation, resulting in a 
mandatory system where all beef and dairy cattle must be identified 
using an ear tag. Information is maintained on an animal's ID number, 
breed, gender, and production history from the farm of origin through 
distribution to consumers. Similarly, in 2001, Canada started a 
compulsory animal ID program that applies to all bovine and bison and 
now requires that animals receive a radio frequency identification 
(RFID) tag when leaving their herd of origin,[Footnote 10] which is 
collected at slaughter or export. Canada later expanded its program to 
sheep in 2004, requiring the use of visual ear tags. Brazil, the 
world's largest beef exporter, gradually phased in its mandatory ID 
program for cattle and bison starting in January 2002; the entire herd 
is expected to be identified by the end of 2007. Australia, the world's 
second-largest beef exporter, has developed a mandatory system that 
uses RFID to identify and trace cattle from farm of origin to 
slaughter. Australia has been moving toward a fully integrated program 
linking electronic ID devices, product bar coding, and a central 
electronic database. Appendix V provides more detailed information on 
select international animal ID and tracking programs.[Footnote 11] 

To increase participation in NAIS, several industry groups, state 
animal health officials, and the experts we surveyed have also 
suggested that USDA provide incentives, such as financial assistance, 
to industry to implement the animal ID and tracking components. For 
instance, the NAIS Cattle Working Group recommended in 2004 that USDA 
assume primary financial responsibility for funding the initial 
development of the basic infrastructure required for animal ID and 
tracking--including equipping concentration points, such as livestock 
markets and slaughter facilities, with RFID readers and software to 
capture the data electronically. Livestock market operators and others 
also say such financial support would be an attractive incentive 
because RFID technology, if effective, would allow animal movements to 
be recorded as quickly as the current "speed of commerce" and, 
therefore, would not slow down business operations. The NAIS 
Subcommittee also recommended, in 2005, a cost-sharing arrangement 
between USDA and industry to fund the program's implementation. The 
Secretary's Advisory Committee on Foreign Animal and Poultry Diseases 
adopted these recommendations as well as the other NAIS working group 
and Subcommittee recommendations presented at its September 2006 
meeting. One state that has already created a cost-sharing incentive is 
Wisconsin, where the state contributes 50 percent, or up to $1, of the 
cost of an RFID ear tag on a first-come, first-served basis under its 
voluntary animal ID program. Wisconsin officials say the cost-sharing 
arrangement is designed to make the program more attractive to the 
state's producers, and, as of early March 2007, the state had approved 
reimbursing producers for a total of 30,000 tags for cattle, which was 
up from 20,000 tags the previous month. 

However, USDA officials told us that the power of producers to protect 
themselves and their animals is a tremendous incentive for 
participation in NAIS, and, as the program continues to be implemented 
and developed, additional incentives will be realized by USDA, 
producers, and state and industry partners. Nonetheless, whether NAIS 
is mandatory or voluntary, the lack of participation benchmarks 
prevents USDA from measuring progress in attaining the necessary 
participation levels for an effective program. 

Several Other Key Issues Hinder USDA's Ability to Implement NAIS 
Effectively: 

Industry groups, market operators, state animal health officials, and 
others have identified several other key problems that, if left 
unresolved, could undermine the program's goal, further hindering 
USDA's ability to implement the NAIS program effectively. 

USDA Has Not Prioritized the Implementation of NAIS by Species or Other 
Criteria: 

USDA has not prioritized the implementation of NAIS by species or other 
criteria. Instead, the agency is currently implementing NAIS 
simultaneously for numerous species, regardless of their economic 
value, their risk of diseases of concern, the potential human health 
impact of these diseases, or other criteria. Consequently, federal, 
state, and industry resources for NAIS have been allocated widely, 
rather than being focused first on the species of greatest concern and 
allowing other species to be included later, on the basis of lessons 
learned. In contrast, international animal ID programs have generally 
started implementation with one species (cattle) and, in some cases, 
later expanded to include a few other species, such as sheep, bison, 
and goats, on the basis of disease risk, economic importance, or 
potential human health impact. In addition, 21 of the 32 expert panel 
members said USDA should definitely or probably implement NAIS 
incrementally by species, while 8 experts said USDA should definitely 
or probably continue with its current approach to implement the program 
for numerous species simultaneously.[Footnote 12] Many of the 32 
experts suggested criteria that USDA could use to determine the 
priorities given to each species in implementing NAIS, including 
whether it is a food animal; its likelihood of capturing diseases of 
concern; the risk that the animal will spread a disease harmful to 
human health; the relative ease of implementation for a particular 
industry; and the industry's impact on the U.S. economy, including 
export value. 

Prioritizing implementation for certain species before trying to apply 
the program to numerous species would likely result in more efficient 
and cost-effective implementation, on the basis of lessons learned and 
best practices being identified. In addition, the industries currently 
covered by NAIS appear to be at various stages of readiness to 
implement NAIS. For example, the Bison, Camelid, Cattle, Equine, Swine, 
Sheep, and Goat Working Groups have submitted reports to USDA with 
implementation recommendations for their industries, but the Cervid and 
Poultry Working Groups have not. Furthermore, according to industry 
representatives, some industries, such as commercial swine and poultry 
operations, already have widespread ID and tracking systems in place 
that would allow traceback to occur within 48 hours, while other 
industries may not. 

USDA officials pointed out that an animal ID program to support the 
animal health needs of all livestock species would be unique in the 
world and would place the United States in a position to set a new 
standard for animal ID. Some industry groups have expressed their 
support for NAIS being implemented for all species, since many 
transmissible diseases are not species-specific. For example, the 
National Livestock Producers Association, which represents about 
200,000 producers across the country, wrote USDA in 2005 that the true 
value of NAIS rests in its potential ability to track all livestock 
animals, regardless of species, due to the extent of their commingling 
and potential to spread disease. The association added that NAIS would 
not be very effective or equitable if all species were not included as 
soon as possible. Furthermore, 21 of the 32 experts we surveyed said 
USDA should definitely or probably continue with its current approach 
to include all species, rather than limit NAIS to one or a few species. 
USDA officials also told us that establishing NAIS across all species 
is critical, because many operations handle more than one species, and 
that focusing entirely on cattle, as some other countries have done, is 
a critical flaw since some animal diseases cross species lines. 
Nonetheless, USDA officials told us they recognize that prioritizing 
program implementation may be appropriate, such as by focusing on 
specific diseases of concern or large commercial operations, and that 
the states should determine their own priorities for implementation. 
These officials also said future NAIS plans will more clearly identify 
higher-risk areas or sectors within the species. In commenting on a 
draft of this report, USDA told us it plans to develop, in 
collaboration with the species working groups, a NAIS Short-Term and 
Long-Term Implementation Strategies document that will contain actions 
for the remainder of 2007 through 2011. Specifically, the agency stated 
that the short-term strategy, targeted for publication in August 2007, 
will target species or industry sectors that have the greatest need for 
advancing premises registration, animal ID, and tracking. The long-term 
strategy will be distributed in early 2008 and will call for an 
evaluation of participation through 2009 to determine what actions, 
such as incentives, may be needed to accelerate participation in the 
voluntary program. 

USDA Has Not Developed a Plan for Integrating NAIS with Other USDA and 
State Animal ID Requirements: 

Although USDA aims to minimize the financial and practical impact on 
producers and others in implementing NAIS, the agency has not developed 
a plan to integrate NAIS with preexisting programs and systems. Many 
producers are already required to participate in preexisting USDA and 
state animal disease eradication programs that use specific ID devices 
with different numbering systems or that require branding. For example, 
the National Scrapie Eradication Program for sheep and goats requires 
visual ear tags, and other USDA-state programs require ear tags for 
brucellosis and TB in cattle and ear notches in swine. In addition, 
several western states recognize branding as an official ID for disease 
control purposes. As a result, producers have generally been 
discouraged from investing in new ID devices for NAIS, according to 
industry groups we interviewed, thereby inhibiting implementation of 
the program's animal ID and tracking components. 

Importantly, while USDA published an interim rule effective in November 
2004 recognizing the Animal Identification Number as a new, official 
numbering system for individual animals in interstate commerce, this 
new system does not replace other, USDA-recognized, official numbering 
systems. The rule established that the Animal Identification Number may 
be used for official ID in other disease eradication programs. 
Nonetheless, USDA officials told us that they are evaluating how NAIS 
and other official ID systems can be standardized and moved to a single 
numbering system, to the extent practical, and that eventually, the 
agency expects Animal Identification Numbers to become the standard 
national numbering system used for certain species, individual ID 
methods, or both. USDA told us that as of early March 2007, 1.3 million 
Animal Identification Number RFID ear tags had been distributed, 
including some that are being used for state disease eradication 
programs. For example, USDA reported that about 500,000 tags had been 
distributed to Michigan producers, where the state's bovine TB 
eradication program requires all cattle to have RFID ear tags prior to 
movement from their premises. 

For NAIS not to impose undue costs on producers by requiring additional 
ID devices, stakeholders say the program must be integrated with 
preexisting programs and systems. However, USDA faces challenges in 
integrating NAIS with other animal ID requirements. For example, Sheep 
Working Group members told us that because the scrapie program already 
assigns a flock ID number to each premises--plus a unique, individual 
ID number to each animal--sheep producers do not see the need to 
participate in NAIS, which involves different premises and individual 
animal ID numbering systems. Another challenge is that brands identify 
all animals raised by a specific producer as a group, not as 
individuals, and the same brands are often used in different states or 
even in different counties within the same state. USDA's NAIS User 
Guide states that registered brands are not considered to be an 
official, individual animal ID as called for by NAIS because cattle 
typically move through the production process as individuals. In 
addition, NAIS animal tracking requirements may differ operationally 
from state brand laws and practices. For example, New Mexico requires 
state authorities to inspect all livestock moving across brand district 
lines, which contrasts with NAIS, where the responsibility of reporting 
animal movement lies with the premises receiving animals. New Mexico 
officials told us that if they were to implement NAIS as envisioned, 
the time required for state inspections would at least double if 
inspectors were required to read and report ID tags. The Cattle Working 
Group recommended, in 2004, that USDA develop protocols for integrating 
existing brand laws with NAIS individual animal ID requirements and for 
the reporting of animals' movements from brand law states to nonbrand 
law states. 

USDA officials told us that the need to have a single numbering system 
across all species is less important than getting animals individually 
identified and tracked using any official ID system recognized by USDA. 
Furthermore, these officials said that while standardizing to a single 
numbering system for animal ID may eventually be appropriate, USDA 
recognizes there are differences among species and that cost, 
technology capability, and practicality must be considered before 
phasing out existing ID devices that have proven to be workable for 
producers. For example, the 15-digit Animal Identification Number may 
not be the most practical numbering system when used on visual ear tags 
for smaller animals since the size of the tag does not lend itself to a 
15-digit number. Nonetheless, USDA officials are starting to address 
some integration issues. For example, USDA officials told us in April 
2007 that the agency has decided to allow the official ID devices and 
numbering systems used by other disease eradication programs for the 
purposes of NAIS as well, although the agency has not yet communicated 
this development to industry. In addition, in late 2006, a NAIS Brand 
State Working Group was formed, in part to identify what brand concepts 
could integrate with NAIS. In commenting on a draft of this report, 
USDA informed us that it will update the NAIS User Guide in October 
2007 to more clearly reflect the use of other official ID numbers 
within NAIS. 

USDA Has Not Established a Robust Process for Selecting, Standardizing, 
and Testing ID and Tracking Technologies: 

International programs have generally used specific animal ID devices 
for their national animal ID programs, and some NAIS working groups 
have recommended specific ID devices for their species, such as RFID 
ear tags for cattle and RFID microchip implants for horses. However, 
USDA has taken a "technology-neutral" position to allow market forces 
to determine what devices are most effective and practical and to 
accommodate future technologies. In a NAIS policy document on ID 
devices released in February 2006,[Footnote 13] USDA stated that 
individual, visual ID devices are a starting point to ensure greater 
participation among producers and asserted that a neutral approach 
allows RFID; biometrics, such as DNA and retinal imaging devices; and 
other potential technologies to be used as supplemental identification. 
Nonetheless, that document also stated that uniformity and 
compatibility of technology are critical to ensure that the collection 
of animal ID data is practical and cost-effective throughout 
production. Furthermore, USDA recognized the need to have ID 
technologies that are compatible with Canada and Mexico. USDA also 
stated that as NAIS is phased in, ongoing efforts to harmonize animal 
ID with other countries will facilitate safe trade. 

While not all species can use the same devices due to industry 
preferences or physical limitations, such as small ears, USDA's 
technology-neutral approach means, for example in the cattle industry, 
that a producer can choose to use visual ear tags; low-or high- 
frequency RFID ear tags; or other advanced technologies, such as 
retinal imaging. There are costs and benefits associated with any 
device. For example, visual ID devices are less expensive but require 
manual recording, which may cause errors and slow down the "speed of 
commerce" at livestock markets and slaughter facilities. RFID systems, 
on the other hand, allow data to be captured automatically into 
databases, but these systems are also not consistently accurate and are 
more expensive--in terms of both the ID device and the associated 
infrastructure (reader, installation, and computer use). With such a 
wide range of options in animal ID and tracking devices, industry 
groups and expert panel members told us that producers and market 
operators fear that their choices may be inconsistent with others in 
the marketplace, or that USDA will adopt specific devices in the 
future, and they may find themselves having made the wrong investment 
decision. For instance, a producer may find that the closest livestock 
market uses electronic readers and cannot easily accommodate visual ear 
tags; alternatively, the market may not have installed RFID reader 
equipment, and the producer would not get the anticipated return on his 
or her investment. From another perspective, a multispecies livestock 
market, based on its customers, may face a dilemma of investing in 
equipment to read and record visual tags, RFID tags, RFID implants, and 
other devices--or risk being unable to capture all information quickly 
and efficiently and losing some customers. Consequently, producers, 
livestock markets, and slaughter facilities have generally been 
discouraged from investing in ID or tracking devices, thus inhibiting 
implementation of the animal ID and tracking phases. 

Asked whether USDA's technology-neutral position encourages or 
discourages producers' investment in animal ID technology, 23 of the 32 
expert panel members said this position definitely or probably 
discourages investment, and 6 said it definitely or probably encourages 
investment.[Footnote 14] In their written responses elaborating on this 
question, several experts said USDA's technology-neutral approach 
limits the interoperability (compatibility) of different systems in 
place, thus reducing the viability of a consistent, national traceback 
program. In addition, they wrote that it has caused confusion, 
uncertainty, and a "wait-and-see" attitude in the marketplace, and that 
it will take time to sort out efficient from inefficient technologies. 
Conversely, other experts replied that USDA's technology-neutral 
approach allows marketplace competition to advance new or improved 
technologies and drive fair prices. Similarly, for animal tracking, 
more experts replied that USDA's approach definitely or probably 
discourages investment by producers, livestock markets, and slaughter 
facilities more than it encourages investment. For example, 22 experts 
said USDA's approach discourages investment by livestock markets, 
compared with 2 who said it encourages such investment; 17 experts said 
it discourages investment by slaughter facilities, whereas 4 said it 
encourages that industry sector to invest. 

While USDA has not selected specific animal ID devices, the agency has 
published minimum standards for the various ID devices recommended to 
date by the species working groups and the NAIS Subcommittee. 
Specifically, USDA has established printing and performance standards 
for visual and RFID ear tags that address characteristics such as 
durability (expected tag life); tag loss; visual readability of the 15- 
digit Animal Identification Number; and, in the case of RFID, 
electronic read rates and ranges. USDA has published similar 
performance standards for RFID implants, with additional 
characteristics addressing the migration or breakage of the device and 
its being harmless to an animal. However, USDA has not published 
standards for RFID readers and does not expect to do so unless the 
agency purchases readers for use by animal health officials, in which 
case it says it will define performance standards for those specific 
environments. In addition, USDA has not established a robust process to 
independently test and evaluate the performance of animal ID and 
tracking devices. 

Industry groups, expert panel members, and others told us that RFID 
devices do not always perform well in production environments, such as 
livestock markets, particularly with RFID readers being made by 
different companies. For example, one NAIS pilot project found that in 
loading cattle onto commercial trucks, RFID readers read only 70 
percent of the RFID ear tags, with variations among tag manufacturers 
ranging from 47 percent to 96 percent.[Footnote 15] As a result, 
stakeholders are lacking reliable, independent information on the 
effectiveness of animal ID and tracking devices, and without such 
information, they are reluctant to invest in these devices. 

It is common U.S. practice to select one technology for systems that 
need to be widely implemented in different environments to ensure 
consistency and interoperability across multiple users. We have 
previously reported that a robust process for selecting technologies, 
setting and revising performance standards, and testing and evaluating 
technologies against those standards leads to the most effective and 
efficient use of technology.[Footnote 16] For example, we have reported 
on the necessity of the federal government's selection and 
standardization of RFID cards and readers for federal employees so that 
the ID cards can be read at any federal agency across the 
nation.[Footnote 17] 

Several expert panel members suggested that USDA provide funding for 
independent, third-party evaluations of technologies and make results 
of such work readily available; appoint a standards committee to 
evaluate and make recommendations on the basis of sound science; or 
require independent evidence that devices meet standards before 
approving them. The NAIS Subcommittee also recommended, in 2006, that 
USDA establish an objective process to (1) test the performance of ID 
devices to ensure they meet NAIS standards in various production 
environments and over extended periods and (2) evaluate new 
technologies as they emerge. Typically, federal agencies rely on 
independent laboratories that are certified by a government agency, 
such as the National Institute of Standards and Technology, for such 
testing and evaluation. 

USDA officials told us they are working with industry to determine 
better ways to define performance criteria and establish a more 
thorough process to test and evaluate ID devices, but they did not 
specify a time frame for these developments. Toward this end, the 
agency held preliminary discussions in mid-April 2007 with the American 
Society for Testing and Materials' Committee on Livestock, Meat and 
Poultry Evaluation Systems to form a task force to fine-tune ID 
performance standards for NAIS and help USDA put testing protocols in 
place. In the February 2006 NAIS policy document on ID devices, USDA 
stated that when NAIS becomes fully operational, the agency will 
develop an approval process for official ID devices and more complete 
testing and evaluation procedures. Manufacturers of Animal 
Identification Number devices, regardless of any prior permission from 
USDA, will have to submit new or appended applications to be considered 
for "USDA Approved" status. Evaluations may include laboratory or field 
studies to verify compliance with criteria and specification standards, 
either before or following issuance of "USDA Approval Pending" or "USDA 
Approved" status for ID devices. 

USDA Does Not Clearly Define the Time Frame for Rapid Traceback: 

When USDA announced NAIS in 2004, the program's traceability goal was 
to locate all potentially exposed animals within 48 hours of a 
disease's discovery, and both USDA and states conveyed that message in 
their outreach to producers and others. However, USDA's most recent 
NAIS policy document, the draft NAIS User Guide issued in November 
2006, is silent on this time frame and instead says NAIS will allow 
producers and animal health officials to respond as "quickly, 
efficiently, and effectively as possible." By definition, traceback 
goals need to be time-sensitive and cost-effective to efficiently 
target and evaluate the program's success in eliminating a disease 
outbreak. If rapid traceback goals are not clearly defined, there could 
be a slower response to an animal disease outbreak and, therefore, 
greater economic losses. 

Of the 32 expert panel members, 25 defined rapid traceback in an animal 
disease event as occurring within 48 hours, with 10 of the experts 
defining it as 24 hours or less and 15 defining it as 25 to 48 hours. 
State animal health and industry officials told us it is important that 
USDA communicate a specific time frame to encourage participation, 
reinforce the necessity of rapid traceback, and have a measure by which 
to evaluate results. However, a senior USDA official told us that the 
definition of "rapid traceback" may vary by disease, because some 
diseases spread more quickly than others and some diseases are limited 
in how they can be transmitted. For example, traceback for FMD might 
ideally occur within 12 hours because the disease spreads so rapidly. 
By contrast, because BSE is transmitted only through animal feed 
containing certain contaminated animal products, and scrapie is 
transmitted during the breeding season, a longer traceback would be 
appropriate. In addition, the senior official told us that until USDA 
collects baseline information on tracebacks for specific diseases, the 
agency cannot determine time-sensitive, cost-effective traceback goals 
for NAIS. 

USDA Does Not Require Potentially Critical Information for Efficient 
Traceback to Be Recorded in NAIS Databases: 

When producers and other participants register their premises, they are 
required by USDA to record only their name and contact information, 
with species information being optional. In addition, when USDA- 
approved managers distribute ID devices to a producer, they must record 
the devices' unique animal ID numbers, the premises ID number where the 
devices were sent, and the date of distribution. However, USDA does not 
require additional information, such as the species, date of birth, or 
approximate age of the animals, to be recorded in NAIS animal ID or 
tracking databases. 

Information that may be critical for narrowing the scope of a 
traceback--thus saving time and resources and potentially minimizing 
the economic impact--includes the species, date of birth, or 
approximate age of an animal. Many diseases, such as bovine TB, affect 
only specific species or generally affect animals of a certain age, 
such as in the case of Johne's disease, which is usually contracted at 
a young age. Consequently, if a new case of these diseases arose in the 
United States, tracing other species or animals of a different age may 
unnecessarily use federal, state, and industry resources in locating 
animals and premises that may not be affected--thus impeding the goal 
of rapid and effective traceback. Similarly, most equine diseases of 
concern affect only equine species, and exotic Newcastle disease 
affects only poultry, so tracing other species would be an inefficient 
use of time and resources. Other state and federal animal disease 
eradication programs require the recording or reporting of this type of 
information. For example, the Bovine Tuberculosis Eradication Program 
requires, for all TB-tested bison and cattle, the reporting of the 
animal's unique, official ID device; approximate age; gender; and 
breed. In addition, the National Scrapie Eradication Program requires 
goat flock owners to maintain a management and monitoring plan that 
must record an animal's gender, year of birth, and breed following the 
discovery of scrapie within the flock. 

The Cattle Working Group recommends that producers identify calves at 
birth or at the earliest date possible to support animal disease issues 
when the age of an animal is needed, noting that when the precise date 
of birth is not known, the approximate birth date within 2 to 3 months 
should be recorded. USDA officials acknowledged that although animal- 
specific data can be valuable, the agency is collecting the minimum 
amount of information needed for traceback to (1) respond to some 
producers' concerns about protection of their proprietary information 
in NAIS databases and (2) encourage participation. In addition, 
participants have the option to record such information in ID and 
tracking databases, and USDA encourages them to do so. Nonetheless, 
without this information being consistently recorded in NAIS databases, 
USDA and state officials may not be able to efficiently trace only 
those animals potentially affected by a disease. 

USDA Has Awarded NAIS Cooperative Agreements to Identify Effective 
Implementation Approaches but Has Not Formally Evaluated Agreements' 
Results: 

USDA has awarded $35.0 million in NAIS cooperative agreements to 
states, tribes, and territories to help register premises and identify 
and track animals. However, USDA has not consistently monitored or 
formally evaluated the results of these cooperative agreements. In 
addition, USDA has not consistently shared cooperative agreement 
results with NAIS stakeholders. USDA plans to increase its oversight 
and give states with greater participation in NAIS some flexibility in 
using their cooperative agreement funds. 

USDA Awarded 169 Cooperative Agreements between Fiscal Years 2004 and 
2006: 

To help identify effective approaches to register premises and identify 
and track animals between fiscal years 2004 and 2006, USDA awarded 169 
cooperative agreements, totaling $35.0 million, to 49 states, 29 
tribes, and 2 territories. NAIS cooperative agreement awards ranged in 
size from $7,381 to $1.2 million, and the average award was about 
$207,000. In fiscal years 2004 and 2005, USDA did not require 
recipients to contribute to, or share, costs (cost-share); however, in 
fiscal years 2006 and 2007, USDA required certain recipients to 
demonstrate 20 percent in matching funds, through cash or in-kind 
(noncash) contributions. For more information about NAIS cooperative 
agreements' funding by fiscal year, see appendix VI, table 2. 
Cooperative agreements are typically funded for a 12-month funding 
period, with recipients required to submit both quarterly 
accomplishment and financial status reports. 

USDA required all NAIS cooperative agreement recipients to submit 
information to USDA in an initial work plan containing proposed project 
objectives, species and industry sector focus, as well as milestones 
for measuring progress. Although some premises registration cooperative 
agreements proposed activities that would span across most species and 
industry sectors covered by NAIS, other projects proposed focusing 
premises registration activities on one, or a few, species and sectors 
of the livestock industry. Of field trial cooperative agreement funding 
to test animal ID and tracking solutions, all but two field trials 
intended to focus on beef or dairy cattle; several proposed work on 
sheep; a few included swine, cervids, goats, bison, and equine; and 
only one project intended to focus some work on camelids. While no NAIS 
field trials proposed work on the poultry industry, USDA has previously 
funded work, through funds other than NAIS cooperative agreements, that 
examined the tagging and record-keeping requirements that would 
facilitate tracking of birds in the live bird marketing system. For 
information on species covered under NAIS field trials, see appendix 
VI, table 3. 

Field trial funding recipients also varied in the number of industry 
sectors they intended to involve in cooperative agreement activities. 
Overall, more than one-half of recipients intended to work with 
producers, livestock markets, slaughter facilities, and feedlots. USDA 
did not require field trials covering multiple species or industry 
sectors to include in initial work plans information regarding how 
funding was to be spent on each species or sector. USDA officials told 
us that they have not requested such details because of the 
interconnectivity of the activities associated with cooperative 
agreements. 

Most of the cooperative agreement awards were focused on premises 
registration. Specifically, of the $35.0 million awarded in fiscal 
years 2004 through 2006, USDA awarded 146 cooperative agreements 
totaling $23.4 million for premises registration efforts to 49 states, 
29 tribes, and 2 territories. These premises registration awards 
provided funding for activities such as hiring personnel to register 
premises, developing educational materials, and providing outreach to 
producers and nonproducer participants on the goals of NAIS. For 
example, 1 cooperative agreement awarded to the Navajo Nation was for 
the development of communications in the Navajo language for outreach 
on premises registration and animal ID. In addition, some of these 
cooperative agreements funded limited animal ID and tracking 
activities, along with premises registration. 

In fiscal years 2004 and 2005, USDA also awarded field trial 
cooperative agreements. Specifically, in fiscal year 2004, USDA awarded 
16 cooperative agreements totaling $9.7 million to 15 states and 1 
tribe. USDA estimates that $1.8 million of the $9.7 million awarded was 
used to support premises registration activities. The remainder was 
used for field trials to develop, test, and offer solutions for 
applying animal ID devices and collecting animal tracking information. 
For example, 1 cooperative agreement with the Wyoming Livestock Board 
tested whether existing brand inspection personnel and infrastructure 
could be used to track livestock changing ownership and livestock 
entering into interstate commerce through Wyoming livestock markets. In 
fiscal year 2005, USDA awarded 7 cooperative agreements totaling $1.9 
million to 6 states and 1 tribe for field trials to support research, 
including the assessment of existing and novel ID technologies. 

USDA anticipates awarding an additional $20.5 million in cooperative 
agreements in fiscal year 2007. Of this, USDA anticipates awarding 
$14.5 million for continued support of premises registration, 
education, and outreach activities under approximately 80 cooperative 
agreements to 50 states, 28 tribes, and 2 territories. As of March 
2007, USDA had awarded 31 of the anticipated 80 cooperative agreements, 
totaling $6.7 million. The remaining $6.0 million in fiscal year 2007 
funding for cooperative agreements will be provided for the first time 
to nonprofit organizations for premises registration activities. In 
January 2007, USDA entered into a cooperative agreement with the 
National Pork Board to begin work with pork producers to encourage 
premises registration. Subsequently, in February 2007, USDA announced 
that other nonprofit industry organizations, historically black 
colleges, tribal land-grant colleges, and tribal organizations were 
also eligible for these awards, which are intended to support the 
continued registration of premises. 

USDA Has Not Consistently Monitored or Formally Evaluated NAIS 
Cooperative Agreements or Consistently Shared Their Results: 

To date, USDA has not consistently monitored or formally evaluated NAIS 
cooperative agreements and has not consistently shared their results 
with state, industry, and other stakeholders. USDA officials told us 
that NAIS program staff provided some oversight for field trial 
cooperative agreements as well as for tribal premises registration 
cooperative agreements. However, NAIS program staff do not directly 
monitor most NAIS cooperative agreements; instead, USDA delegates 
administrative oversight activities for each cooperative agreement to 
designated representatives, mostly Area Veterinarians in Charge whose 
overall responsibility is to supervise and perform the official animal 
health activities of APHIS in the state concerned. These individuals 
are responsible for direct administration of the individual state 
premises registration and field trial cooperative agreements, including 
the monitoring and assessment of agreements. According to USDA, it is 
appropriate for these designated representatives to monitor cooperative 
agreements because they are familiar with the circumstances associated 
with implementing projects in a particular state. We have previously 
reported with other government audit organizations that monitoring the 
performance of federal awards helps to ensure that goals are reached 
and required deliverables are completed.[Footnote 18] According to USDA 
officials, the designated representatives responsible for monitoring 
cooperative agreements have a multitude of competing responsibilities 
and thus may not have sufficient time or resources to oversee 
cooperative agreements. 

In addition, NAIS program staff did not conduct any formal evaluation 
of NAIS cooperative agreements. Evaluating results against cooperative 
agreement goals can help to identify ways to improve program 
performance. USDA officials said that the quality of quarterly and 
final accomplishment reports provided to designated representatives by 
cooperative agreement recipients varied. They said that many times, 
these reports identified what was being done, rather than what was 
being accomplished. For example, one state premises registration 
project set milestones for educating 60 percent of livestock producers 
and registering 40 percent of premises; however, the reported results 
included the purchase of computers, number of presentations given to 
producer organizations, and number of premises registration forms that 
were printed for distribution. Furthermore, our analysis of available 
reports indicated that results were not reported or were of limited 
value because initial project goals and milestones presented in 
recipients' work plans were vague or unclear.[Footnote 19] In addition, 
several states indicated to us that they had difficulty completing the 
work outlined in their cooperative agreements within given time frames. 
For instance, one state told us that it was difficult for it to hire an 
ID coordinator in its first year of cooperative agreement funding, 
which meant the state was unable to use all of the funds it was 
allocated. Thus, while USDA has awarded the majority of cooperative 
agreement funds to support premises registration, the agency has not 
been able to determine effective or ineffective approaches for 
increasing premises registration, animal ID, or tracking. 

USDA has formally shared few results of cooperative agreements with 
NAIS stakeholders, hindering them from identifying approaches that have 
worked to achieve NAIS program objectives, such as increasing outreach, 
as well as ineffective approaches, such as the interoperability of RFID 
devices and readers. To date, USDA has provided information regarding 
NAIS field trial cooperative agreements on three occasions. In April 
2005, USDA released a document containing summary information on the 
goals of the initial 16 field trials, including the types of technology 
tested and industry focus. In June 2006, USDA released a preliminary 
progress report for these first 16 field trials but stated in the 
report that due to the timing of work plan submissions and the 
subsequent need for approved time extensions to complete proposed 
projects, 10 of these 16 projects awarded in fiscal year 2004 had not 
yet submitted final reports. In addition, USDA stated in this report 
that to fully understand the projects' results, interested parties 
should contact cooperative agreement project administrators to learn 
more about the projects' specific activities. However, the report did 
not include contact information. In May 2007, USDA released a third and 
final report on the results of the fiscal year 2004 field trials and 
descriptions of the fiscal year 2005 field trials for distribution to 
state, industry, and other stakeholders.[Footnote 20] 

USDA started sharing the results of premises registration and outreach 
cooperative agreements by publishing weekly premises registration 
statistics, by state, beginning in December 2006 (for state premises 
registration statistics, see app. VI, table 4). However, USDA has not 
formally shared any information about the strategies used by the 
individual state projects, nor has the agency communicated to 
stakeholders successful or unsuccessful approaches to registering 
premises. 

While USDA states that some results of cooperative agreements have been 
shared publicly at numerous stakeholder meetings, animal health 
officials and industry representatives told us that not enough 
information exists about the results of NAIS cooperative agreements, 
and that more sharing of results, best practices, and lessons learned 
is needed. For example, a researcher applying for fiscal year 2005 
field trial funding told us it was difficult to determine whether 
previous NAIS cooperative agreements had included work similar to what 
the applicant was proposing. In addition, industry groups, state animal 
health officials, and experts told us that livestock markets would 
benefit from more information concerning the retrofitting of animal 
tracking equipment. 

USDA Plans to Improve Oversight and Give States with Greater 
Participation in NAIS Some Flexibility in Using Cooperative Agreement 
Funds: 

As we have previously reported, increasing oversight, linking funding 
to performance milestones, and altering flexibility are accountability 
mechanisms that can be used by agencies to encourage improved 
performance during an award period.[Footnote 21] In fiscal year 2007, 
USDA plans to increase oversight activities for some state cooperative 
agreements, on the basis of state premises registration levels at the 
time of the November 2006 announcement. For example, the 27 states that 
had 25 percent or less of their premises registered at the time of the 
cooperative agreement announcement and were eligible for more than 
$82,000 in awards would receive only 90 percent of reserved funding 
until a midyear review period. According to USDA, designated 
representatives will determine the success of cooperative agreements 
during this midyear review, largely on the basis of the goals stated in 
the cooperative agreements' approved work plans. The 23 states with 
greater than 25 percent of premises registered, or eligible for awards 
of less than $82,000, are eligible to receive 100 percent of 
cooperative agreement funding without a midyear review (see app. VI, 
table 5). In addition, all nonprofit industry organizations that 
receive cooperative agreement funding in fiscal year 2007 will be 
eligible for 50 percent of approved funds, with an additional 25 
percent of funds released following each successful third-and fourth- 
quarter review of interim reports required by USDA. 

Moreover, USDA has linked funding to participation levels by providing 
for increased spending flexibility for some state recipients of fiscal 
year 2007 premises registration cooperative agreements. USDA believes 
that cooperative agreement funding may be more appropriately used by 
states with greater numbers of premises registered to support the 
animal ID and tracking components of NAIS. For example, the 14 states 
that have achieved greater than 25 percent of premises registered may 
spend up to 40 percent of funds on animal tracking infrastructure, such 
as to support NAIS's integration with preexisting disease eradication 
programs or to share in the cost of data collection equipment for 
livestock markets and dealers. The 18 states that have registered 
between 11 percent and 25 percent of premises may spend up to 30 
percent of their funding on animal tracking infrastructure, while the 8 
states that have registered between 6 percent and 10 percent of 
premises may spend up to 20 percent of funding on animal tracking 
infrastructure. Finally, those states that have registered less than 6 
percent of premises are required to spend 100 percent of funds on 
outreach and premises registration. 

Total NAIS Program Costs Have Not Been Determined, but USDA Recently 
Announced Plans to Develop a Cost-benefit Analysis: 

USDA has not determined the program costs for NAIS but recently 
announced plans to hire a contractor to conduct a cost-benefit analysis 
for NAIS, in part to more precisely forecast the economic effects of 
the program. The Senate Appropriations Committee and the House of 
Representatives have raised concerns in recent years about how USDA has 
spent funds to develop and implement NAIS. Finally, the views of our 
expert panel members are mixed concerning NAIS's potential impact on 
the livestock industry. 

NAIS Costs and Benefits Are Not Known: 

Although implementation of NAIS began in 2004, USDA has not developed a 
comprehensive cost estimate or cost-benefit analysis for the program. 
In addition, to our knowledge, no industry group, academic institution, 
or state animal health agency has published a cost estimate for 
implementing and maintaining NAIS. Without a comprehensive cost-benefit 
analysis for NAIS, it is not known how much is required in federal, 
state, and industry resources to achieve rapid and effective traceback, 
or whether the potential benefits of the program outweigh the costs. In 
2004, and again in 2006, the NAIS Subcommittee recommended that USDA 
prepare an in-depth, cost-benefit analysis for NAIS as part of the 
strategic planning process. In addition, 29 of the 32 expert panel 
members said that USDA should definitely or probably publish a cost- 
benefit analysis that contains detailed NAIS cost and benefit 
information for the different sectors of the livestock industry, 
states, and USDA. The NAIS working groups, other livestock industry 
representatives, and state animal health officials we interviewed said 
that the cost of implementing NAIS remained one of their biggest 
concerns. For example, in comments to USDA in 2005, the Livestock 
Marketing Association wrote that it is "highly critical of the fact 
that too little has been known" about the potential costs of 
establishing a national animal ID system and about who will bear those 
costs. Furthermore, the association wrote that a cost-benefit analysis 
is "long overdue" and that without better information, NAIS appears to 
be prohibitively expensive for the livestock industry to implement. As 
a result, without a reliable cost-benefit analysis that is consistent 
with federal guidance, stakeholders are unlikely to participate in NAIS 
due to their uncertainty that NAIS program benefits outweigh program 
costs. 

USDA announced plans in March 2007 to conduct a cost-benefit analysis 
for NAIS. USDA officials told us that the cost-benefit analysis will be 
used for program planning and resource allocation, producer and 
industry education, and public relations and outreach and to more 
precisely forecast the economic effects of NAIS. USDA officials 
anticipate that the cost-benefit analysis will be available in 2008. 

As we have previously reported, measuring the economic performance of 
federal programs, such as the extent to which program benefits exceed 
costs (net benefits) or are achieved at least cost (cost- 
effectiveness), could be a useful way to assess, in conjunction with 
other measures, the extent to which federal programs are meeting the 
nation's priorities.[Footnote 22] In addition, OMB has established 
general guidance on conducting cost-benefit analyses of federal 
programs to promote efficient resource allocation through well-informed 
decision making.[Footnote 23] OMB suggests that agencies follow this 
guidance in conducting analyses used to support government decisions to 
initiate, renew, or expand programs or projects that would result in a 
series of measurable benefits or costs extending 3 or more years into 
the future. The USDA announcement suggests that the planned NAIS cost- 
benefit analysis follow this and other available federal guidance. 

Concerns Exist over How USDA Has Spent Funds to Develop and Implement 
NAIS: 

In fiscal year 2004, the Secretary of Agriculture transferred $18.8 
million from the Commodity Credit Corporation (CCC) to develop and 
implement NAIS, as shown in table 1. Although approximately $85.0 
million had been made available for NAIS implementation by the end of 
fiscal year 2006, USDA had obligated only about $61.1 million as of 
late March 2007;[Footnote 24] thus, the agency has carried over about 
$23.9 million in unobligated NAIS funds into fiscal year 2007.[Footnote 
25] Because NAIS funding has been designated by Congress to be 
available until expended, USDA can carry funds that it did not expend 
in prior years forward into the current year. In addition to these 
carryover funds, Congress appropriated an additional $33.0 million for 
the NAIS program for fiscal year 2007. The President's Budget requested 
$33.1 million for NAIS in fiscal year 2008. 

Table 1: USDA NAIS Budget Data, Fiscal Years 2004 (CCC Funds) through 
2006: 

Dollars in thousands. 

Funding availability; 
Fiscal year: 2004: $18,793; 
Fiscal year: 2005: $33,197; 
Fiscal year: 2006: $33,007; 
Total: $84,997. 

Planned obligations:  

Information technology development, maintenance, and operations; 
Fiscal year: 2004: $2,009; 
Fiscal year: 2005: $6,858; 
Fiscal year: 2006: $7,733; 
Total: $16,600. 

Cooperative agreements; 
Fiscal year: 2004: 14,357; 
Fiscal year: 2005: 17,050; 
Fiscal year: 2006: 13,882; 
Total: 45,288. 

Communications and outreach; 
Fiscal year: 2004: 2,137; 
Fiscal year: 2005: 3,474; 
Fiscal year: 2006: 1,940; 
Total: 7,551. 

Headquarters and field staff and materials; 
Fiscal year: 2004: 290; 
Fiscal year: 2005: 3,125; 
Fiscal year: 2006: 5,285; 
Total: 8,700. 

Uncommitted/Unassigned funding; 
Fiscal year: 2004: 0; 
Fiscal year: 2005: 2,690; 
Fiscal year: 2006: 4,167; 
Total: 6,857. 

Total; 
Fiscal year: 2004: $18,793; 
Fiscal year: 2005: $33,197; 
Fiscal year: 2006: $33,007; 
Total: $84,997. 

Actual obligations:  

Information technology development, maintenance, and operations; 
Fiscal year: 2004: $1,829; 
Fiscal year: 2005: $5,276; 
Fiscal year: 2006: $2,466; 
Total: $9,571. 

Cooperative agreements; 
Fiscal year: 2004: 13,944; 
Fiscal year: 2005: 15,031; 
Fiscal year: 2006: 6,026; 
Total: 35,000. 

Communications and outreach; 
Fiscal year: 2004: 2,137; 
Fiscal year: 2005: 2,719; 
Fiscal year: 2006: 1,640; 
Total: 6,495. 

Headquarters and field staff and materials; 
Fiscal year: 2004: 379; 
Fiscal year: 2005: 3,213; 
Fiscal year: 2006: 6,428; 
Total: 10,019. 

Total; 
Fiscal year: 2004: $18,288; 
Fiscal year: 2005: $26,238; 
Fiscal year: 2006: $16,559; 
Total: $61,086. 

Unobligated funds; 
Fiscal year: 2004: $505; 
Fiscal year: 2005: $6,959; 
Fiscal year: 2006: $16,448; 
Total: $23,911. 

Actual expenditures:  

Information technology development, maintenance, and operations; 
Fiscal year: 2004: $1,813; 
Fiscal year: 2005: $3,946; 
Fiscal year: 2006: $908; 
Total: $6,668. 

Cooperative agreements; 
Fiscal year: 2004: 11,831; 
Fiscal year: 2005: 9,799; 
Fiscal year: 2006: 2,219; 
Total: 23,849. 

Communications and outreach; 
Fiscal year: 2004: 2,103; 
Fiscal year: 2005: 1,598; 
Fiscal year: 2006: 216; 
Total: 3,918. 

Headquarters and field staff and materials; 
Fiscal year: 2004: 379; 
Fiscal year: 2005: 3,174; 
Fiscal year: 2006: 6,427; 
Total: 9,979. 

Total; 
Fiscal year: 2004: $16,127; 
Fiscal year: 2005: $18,518; 
Fiscal year: 2006: $9,770; 
Total: $44,414. 

Source: USDA data as of March 27, 2007. 

Note: All figures have been rounded to the nearest thousand. 

[End of table] 

The Senate Appropriations Committee and the House of Representatives 
have raised concerns in recent years about how USDA has spent funds to 
develop and implement NAIS. For example, in the 109th Congress, the 
House passed a fiscal year 2007 appropriations bill for agriculture 
(H.R. 5384) that included a provision prohibiting funds from being 
obligated on NAIS until the House Appropriations Committee received a 
detailed plan for NAIS "including, but not limited to, proposed 
legislative changes, cost estimates, and means of program evaluation," 
and that the plan be published in the Federal Register for public 
comment. Although the bill, with the provision limiting obligations, 
passed in the House, it did not become law. USDA officials told us they 
have plans to obligate all carryover funds in fiscal year 2007. These 
plans include awarding additional cooperative agreements to states and 
industry organizations to register premises; additional investments in 
information technology development, maintenance, and operations; and 
communications and outreach. 

Expert Views Concerning Changes to the Livestock Industry Are Mixed: 

Questions have been raised about whether NAIS could lead to greater 
contracting, vertical integration, or horizontal consolidation in the 
livestock industry market structure,[Footnote 26] and whether NAIS 
could affect prices at both the retail and producer levels. Expert 
panel members provided the following views relating to changes in 
market structure as well as to changes in costs and prices for various 
market participants due to the implementation of NAIS. 

* The 32 experts were evenly split on whether contracting or horizontal 
consolidation would increase as a result of NAIS--16 said those effects 
would definitely or probably be more likely to occur, and 16 said those 
effects would not occur or are probably less likely to occur. 

* Twenty experts said vertical integration would not occur or is 
probably less likely to occur, while 12 said vertical integration is 
definitely or probably more likely to occur. 

* Regarding price effects at the retail level of meat and/or animal 
products, 12 experts thought prices would be higher; 15 thought there 
would be no effect; and 5 believed they would be lower. 

* When asked what would be the effect on prices paid to producers for 
livestock if NAIS led to increased costs in livestock markets and/or 
slaughter facilities, 21 experts believed that prices would probably or 
definitely decrease; 8 thought there would be no effect; and 2 thought 
that there would probably be an increase. 

* Similarly, when asked what would be the effect on prices paid to 
producers for livestock if NAIS led to decreased costs in livestock 
markets and/or slaughter facilities, 16 experts replied that prices 
paid to producers would probably or definitely increase; 13 replied 
that there would be no effect; and 1 respondent thought there would be 
a decrease. 

Conclusions: 

NAIS provides USDA, states, and the livestock industry with a historic 
opportunity for the United States to develop a comprehensive, coherent 
program to identify the nation's livestock animals and premises and 
achieve the goal of rapid and effective disease traceback. In addition, 
a successful program in sync with our international trading partners 
and competitors could boost consumer confidence in U.S. animal products 
and help maintain and expand market access. However, for NAIS to be 
fully effective and efficient in responding to an animal disease 
emergency, adequate levels of participation need to be achieved in all 
three NAIS components--premises registration, animal ID, and tracking. 
If insufficient numbers of animals are identified and tracked, the 
system will have gaps, despite millions of dollars being invested in 
the program's development. Conversely, high levels of participation 
would better position the United States to handle future animal health 
emergencies and minimize economic, trade, and possibly human health 
consequences. USDA's changes in direction over the past 3 years have 
caused considerable confusion and frustration among many NAIS 
stakeholders, and the program's implementation may be in danger of 
losing momentum. Most critically, whether NAIS is voluntary or 
mandatory, the lack of participation benchmarks makes it more difficult 
to gauge progress in attaining the necessary levels of participation 
for an effective animal ID program and, if there is insufficient 
participation, to develop strategies to achieve it. Without meaningful 
progress, USDA's expenditures on NAIS will continue to be questioned. 

In addition, if USDA does not resolve several key implementation 
issues, the program will continue to face opposition by some industry 
stakeholders, and participation in all three NAIS components could be 
limited. Collectively, these unresolved issues will likely lead to 
ineffective and inefficient implementation and prevent NAIS from 
achieving the goal of rapid and effective traceback. First, 
prioritizing how NAIS is implemented, such as by species, would allow 
USDA and stakeholders to better allocate their resources and improve 
the program over time. Second, the integration of NAIS with other USDA 
and state animal disease eradication programs and branding systems 
would remove another hurdle preventing participation in NAIS's animal 
ID and tracking components. Third, creating a robust process for 
selecting, setting standards for, and independently testing and 
evaluating animal ID and tracking devices in meeting NAIS standards is 
important to ensure effectiveness and interoperability across the 
national program and, therefore, would encourage investment. Fourth, 
identifying time-sensitive and cost-effective goals for traceback, 
which may vary by disease, would allow stakeholders to have common 
goals in responding to an event, potentially speeding up response and, 
therefore, minimizing economic losses. Fifth, requiring the recording 
of information in NAIS databases that may be critical for efficient 
traceback, such as species, approximate age, or date of birth, would 
enable animal health authorities to more quickly locate only those 
premises and animals that are relevant in an investigation, thus 
minimizing time and resources and hastening response. 

Finally, we believe that if USDA were to provide industry, state, and 
other stakeholders with key information on the results of cooperative 
agreements, it would help identify the most effective and efficient 
means to implement the program and likely increase participation and 
enable producers, livestock markets, states, and other stakeholders to 
make informed decisions about where to allocate scarce resources. 
Moreover, for planning purposes in allocating federal, state, and 
industry resources, it is important for stakeholders, Congress, and the 
public to know how much it will cost to implement and maintain NAIS, 
compared with its benefits. Without a reliable cost-benefit analysis, 
stakeholders are unlikely to participate in NAIS due to their 
uncertainty about whether program benefits outweigh the costs. 

Recommendations for Executive Action: 

To achieve the program's goal of rapid and effective animal disease 
traceback, we recommend that the Secretary of Agriculture direct the 
Administrator of APHIS to reestablish participation benchmarks to gauge 
progress in registering premises and identifying and tracking animals; 
monitor participation; and, if participation does not meet the 
benchmarks, take further action, such as making participation mandatory 
or creating incentives to achieve those levels of participation. 

In addition, we recommend that the Secretary direct the Administrator 
of APHIS to take the following seven actions to implement NAIS more 
effectively and efficiently and achieve the program's goal of rapid and 
effective traceback: 

* set priorities, in consultation with the NAIS species working groups, 
state animal health officials, and others, for implementing NAIS 
incrementally by species or other criteria; 

* determine how NAIS will integrate with existing USDA and state animal 
disease eradication programs and branding systems; 

* establish a robust process to select, standardize, and independently 
test and evaluate the performance of animal ID and tracking devices to 
ensure they meet minimum standards; 

* identify--in consultation with the NAIS species working groups, state 
animal health officials, and others--current baselines for animal 
disease traceback, and develop time-sensitive, cost-effective goals for 
traceback under NAIS, which may include separate time frames for 
specific diseases; 

* evaluate what information is critical for efficient traceback, such 
as species, approximate age or date of birth, and require that 
participants record that information in the NAIS animal ID and tracking 
databases; 

* increase the monitoring of NAIS cooperative agreements, and evaluate 
and publish the results of cooperative agreements on a timely basis; 
and: 

* conduct the planned analysis of the costs and benefits of NAIS 
following criteria established in OMB guidance for conducting cost- 
benefit analyses for federal programs and publish the results for 
comment. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to USDA for review and comment. In 
written comments on our draft report, USDA stated that it appreciated 
our comprehensive evaluation of NAIS and generally agreed with our 
recommendations. However, regarding our recommendation that USDA 
establish a robust process to select, standardize, and independently 
test and evaluate the performance of animal ID and tracking devices to 
ensure they meet minimum standards, USDA agreed with the need to 
establish a more robust process for having ID devices tested to meet 
minimum performance standards, but believed that these standards must 
be defined through a consensus of affected stakeholders. USDA stated 
that as performance standards are established, the selection of such 
devices will then be warranted. USDA also stated that as part of the 
evaluation process, it will specify the testing standards and then 
review the manufacturer's documentation of laboratory testing and field 
trials. In addition, USDA stated that testing of such devices should be 
at the expense of the device manufacturer. 

We recognize the need for USDA to work with stakeholders before 
determining which ID and tracking devices are most appropriate for 
NAIS. However, the sooner USDA selects specific technologies, the 
sooner producers, livestock markets, slaughter facilities, and others 
will likely participate in the animal ID and tracking components of 
NAIS. As a starting point, some NAIS working groups have recommended 
specific ID devices for their species. It is common U.S. practice to 
select one technology for systems that need to be widely implemented in 
different environments, and we have previously reported that a robust 
process for selecting, standardizing, and testing and evaluating 
technologies leads to the most effective and efficient systems. During 
the course of our work, we found that USDA's technology-neutral 
position has caused producers, market operators, and slaughter 
facilities to be generally discouraged from investing in new animal ID 
or tracking devices for NAIS due to fear that their choices might be 
inconsistent with others in the marketplace, or that USDA might adopt 
specific devices in the future. The selection of specific ID and 
tracking devices, therefore, would ensure consistency and 
interoperability across the program's many potential users, leading to 
more efficient implementation. Furthermore, as stated in this report, 
USDA has recognized the need for animal ID technologies that are 
compatible with Canada and Mexico, and it also has stated that 
harmonizing the United States' program with other countries will 
facilitate safe trade. Selecting technologies for NAIS that are in sync 
with our trading partners and competitors could have positive trade 
implications for the United States. Lastly, the selection of specific 
devices would inform the cost-benefit analysis that USDA is currently 
conducting, which, in turn, could affect participation levels. These 
reasons underscore the need for USDA to select specific ID and tracking 
devices, on the basis of independent, reliable information regarding 
their performance in meeting minimum standards and of consultations 
with stakeholders. 

In its written comments, USDA also provided points of clarification and 
provided details about current and future actions that the agency plans 
to take to address our recommendations, which we incorporated 
throughout the report, as appropriate. USDA's written comments and our 
specific responses appear in appendix VII. In addition, USDA provided 
technical comments that we incorporated throughout the report, as 
appropriate. 

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days from the date of this report. At that time, we will send 
copies of this report to the interested congressional committees, the 
Secretary of Agriculture, and other interested parties. We will also 
make copies available to others upon request. In addition, this report 
will be available at no charge on the GAO Web site at 
http://www.gao.gov. 

If your or your staff have any questions about this report, please 
contact me at (202) 512-3841 or ShamesL@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix VIII. 

Sincerely yours, 

Signed by: 

Lisa Shames: 
Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

The objectives of our review were to determine (1) how effectively the 
U.S. Department of Agriculture (USDA) is implementing the National 
Animal Identification System (NAIS) and, specifically, the key 
implementation issues identified by livestock industry groups, market 
operators, state animal health officials, and others; (2) how USDA has 
distributed cooperative agreement funding to help states and industry 
prepare for NAIS and evaluated the agreements' results; and (3) what 
USDA and others estimate are the costs for USDA, states, and the 
livestock industry to implement and maintain NAIS. 

To address these objectives, we interviewed USDA officials responsible 
for implementing NAIS and conducted site visits to selected livestock 
markets and cooperative agreement field trials. We conducted structured 
interviews in person or via telephone with animal health officials in 
seven states: California, Iowa, Michigan, New Mexico, Texas, Vermont, 
and Wisconsin. These states were selected on the basis of their 
geographic dispersion; the range in the number of premises located in 
each state; and, in some cases, their high levels of livestock 
production. We also conducted interviews in person or via telephone and 
reviewed documents from the NAIS Subcommittee and the 10 NAIS working 
groups that report to the NAIS Subcommittee: Beef and Dairy Cattle 
Working Group, Bison Working Group, Camelid Working Group, Cervid 
Working Group, Equine Working Group, Goat Working Group, Market/ 
Processor Working Group, Poultry Working Group, Sheep Working Group, 
and Swine Working Group. We also conducted structured interviews in 
person or via telephone and reviewed documents from four industry 
organizations: American Farm Bureau Federation, Livestock Marketing 
Association, National Cattlemen's Beef Association, and National 
Livestock Producers Association. In addition, we reviewed documents 
from the United States Animal Health Association Livestock ID 
Committee; the Ranchers-Cattlemen Action Legal Fund --United 
Stockgrowers of America; three NAIS opposition groups--NoNAIS.org, 
Liberty Ark Coalition, and the Farm and Ranch Freedom Alliance; and 
other organizations that testified before Congress on NAIS in recent 
years or spoke at USDA's listening sessions in 2004. We attended the 
NAIS Subcommittee meeting and a USDA meeting with state departments of 
agriculture on NAIS held in August 2006 in Kansas City, Missouri, and 
the Secretary's Advisory Committee on Foreign Animal and Poultry 
Diseases meeting in September 2006 in Riverdale, Maryland. We 
identified and reviewed applicable laws, USDA policies, guidance, and 
technical standards regarding NAIS. We also reviewed relevant GAO 
reports and a Congressional Research Service report to Congress on 
animal identification (ID) and traceability. 

To determine how USDA has distributed cooperative agreement funding to 
help states and industry prepare for NAIS, we reviewed USDA 
documentation related to cooperative agreements signed between USDA and 
states, territories, tribes, and industry groups from fiscal years 2004 
through 2007. To determine which livestock species were the focus of 
cooperative agreement field trials, we reviewed and systematically 
recorded this information from cooperative agreement recipients' work 
plans; however, we did not independently assess whether the proposed 
work with these species and industry sectors took place. To determine 
how USDA has evaluated the results of cooperative agreements, we 
interviewed NAIS program staff, reviewed guidance provided to 
recipients, and reviewed quarterly and final reports submitted to USDA 
by cooperative agreement recipients. Because some cooperative 
agreements were ongoing and because other recipients did not report to 
USDA in a timely manner, we could not examine a complete set of 
quarterly and final reports for all recipients. We conducted a 
reliability assessment of the data that USDA provided to us on the NAIS 
cooperative agreements and found these data to be reliable for our 
reporting purposes. 

For the third objective, to determine estimates of the costs to 
implement and maintain NAIS, we asked representatives from USDA, 
industry groups, academic institutions, and state animal health 
agencies for any NAIS cost estimates they had developed. We identified 
and reviewed federal guidance for developing cost estimates and cost- 
benefit analyses and sound economic and cost accounting principles. We 
also reviewed NAIS budget data from USDA for fiscal years 2004 through 
2007, and conducted a reliability assessment of these data and found 
them to be reliable for our reporting purposes. 

To help answer the first and third objectives, we convened a Web-based 
panel of 32 experts on several aspects of NAIS. The process we followed 
is based on GAO guidance for identifying experts for panels or other 
work requiring expertise in a specific area. We identified potential 
panel members by conducting a literature search to obtain the names of 
individuals who had published on animal ID in academic journals and in 
other relevant venues. We also asked for recommendations from 
individuals we interviewed for other aspects of the job. We then 
selected individuals who were actively involved in the development or 
implementation of NAIS and were knowledgeable of its details; who had 
conducted research, or were published in peer-reviewed journals on 
animal ID; or who were recognized by their peers as an expert on NAIS. 
Panel members were asked to fill out a Web-based questionnaire, which 
asked for their beliefs and opinions on future participation in NAIS, 
effective traceback, implementation of NAIS, the costs and benefits of 
NAIS, the impact of NAIS on the livestock industry and consumers, ID 
technology, and databases for tracking animals. Panel members had 
approximately 3 weeks to fill out their questionnaires in December 2006 
and January 2007. All panel members completed their questionnaires, 
giving us a 100 percent response rate. The questions and aggregated 
responses are presented in appendix IV. While we display only the 
quantitative, closed-ended responses, we also relied on the responses 
to the qualitative, open-ended questions to inform our findings in this 
report. The views expressed by the panel members do not necessarily 
represent the views of GAO. 

We conducted our work from June 2006 to May 2007 in accordance with 
generally accepted government auditing standards. 

[End of section] 

Appendix II: Select Domestic and Foreign Animal Diseases of Concern 
Identified by USDA: 

Table: 

Domestic:  

Animal disease: Avian influenza (low pathogenic); 
Livestock animals affected: Poultry; 
Can affect humans?: No. 

Animal disease: Bovine spongiform encephalopathy; 
Livestock animals affected: Cattle; 
Can affect humans?: Yes. 

Animal disease: Bovine brucellosis and Swine brucellosis; 
Livestock animals affected: Cattle, bison, goats, swine, and cervids; 
Can affect humans?: Yes. 

Animal disease: Chronic wasting disease; 
Livestock animals affected: Cervids; 
Can affect humans?: Unknown. 

Animal disease: Equine infectious anemia; 
Livestock animals affected: Horses, donkeys, mules, ponies, and zebra; 
Can affect humans?: No. 

Animal disease: Johne's disease; 
Livestock animals affected: Cattle, sheep, goats, and cervids; 
Can affect humans?: Unknown. 

Animal disease: Pseudorabies; 
Livestock animals affected: Swine, cattle, sheep, and goats; 
Can affect humans?: No. 

Animal disease: Scrapie; 
Livestock animals affected: Sheep and goats; 
Can affect humans?: Unknown. 

Animal disease: Texas (splenetic) fever; 
Livestock animals affected: Cattle; 
Can affect humans?: No. 

Animal disease: Tuberculosis; 
Livestock animals affected: Cattle, bison, and captive cervids; 
Can affect humans?: Yes. 

Foreign: 

Animal disease: Avian influenza (highly pathogenic); 
Livestock animals affected: Poultry; 
Can affect humans?: Yes. 

Animal disease: Dourine; 
Livestock animals affected: Horses and donkeys; 
Can affect humans?: No. 

Animal disease: Exotic Newcastle disease; 
Livestock animals affected: Poultry; 
Can affect humans?: Yes. 

Animal disease: African swine fever; 
Livestock animals affected: Swine; 
Can affect humans?: No. 

Animal disease: Classical swine fever; 
Livestock animals affected: Swine; 
Can affect humans?: No. 

Animal disease: Contagious bovine pleuropneumonia; 
Livestock animals affected: Cattle and bison; 
Can affect humans?: No. 

Animal disease: Foot-and-mouth disease; 
Livestock animals affected: Cattle, sheep, goats, and swine; 
Can affect humans?: Yes, but rarely infects humans. 

Animal disease: Glanders; 
Livestock animals affected: Horses, donkeys, mules, and goats; 
Can affect humans?: Yes. 

Source: USDA. 

Note: Pursuant to the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 (the "Bioterrorism Act of 2002"), 
USDA identifies animal diseases that have the potential to pose a 
severe threat to livestock and human health, including bacillus 
anthracis, brucella abortusm, brucella melitensis, brucella suis, 
burkholderia mallei, burkholderia pseudomallei, clostridium botulinum, 
coccidioides immitis, francisella tularensis, botulinum neurotoxins, 
clostridium perfringens epsilon toxin, shigatoxin, staphylococcal 
enterotoxins, T-2 toxin, African horsesickness, peste des petits 
ruminants, swine vesicular disease virus, lumpyskin disease virus, 
sheep pox, and goat pox. 

USDA identifies other domestic animal diseases of concern in federal 
regulations, including acute swine erysipelas (affects swine), anthrax 
(all domestic species), bluetongue (all domestic species), chlamydiosis 
(poultry), Eastern equine encephalomyelistis (horses), mycoplasma 
gallisepticum (poultry), mycoplasma meleagridis (poultry), mycoplasma 
synoviae (poultry), salmonella enteritidis (poultry), salmonella 
gallinarum (poultry), salmonella pullorum (poultry), scabies (cattle), 
infectious salmon anemia, and spring viremia of carp. Additional 
foreign animal diseases of concern identified by USDA include equine 
viral arteritis (horses, donkeys, mules, ponies, and zebra); hendra 
(horses); nipah (swine and horses); Rift Valley fever (cattle, sheep, 
and goats); rinderpest (cattle, sheep, and goats); Venezuelan equine 
encephalomyelitis (all equine species); and vesicular stomatitis 
(swine, cattle, sheep, and goats). 

[End of table] 

[End of section] 

Appendix III: Members of GAO's Expert Panel on NAIS: 

This appendix provides the names and affiliations of 32 academic, 
government, and other experts who, as members of our expert panel on 
NAIS, completed a Web-based questionnaire from December 2006 to January 
2007 regarding USDA's implementation of NAIS. We also spoke with a 
select number of these experts regarding animal ID and tracking 
technology, among other issues. 

Expert Panel Members: 

* Dr. David P. Anderson, Associate Professor and Extension Economist - 
Livestock and Food Products Marketing, Department of Agricultural 
Economics, Texas A&M University: 

* Dr. DeeVon Bailey, Interim Department Head and Professor, Department 
of Economics, Utah State University: 

* Dr. Joseph Balagtas, Assistant Professor, Department of Agricultural 
Economics, Purdue University: 

* Dr. Dale A. Blasi, Professor & Extension Beef Specialist, Department 
of Animal Sciences & Industry, Kansas State University: 

* Dr. D. Scott Brown, Research Assistant Professor and Program Director 
of Livestock and Dairy, Food and Agricultural Policy Research 
Institute, University of Missouri: 

* Dr. Daniel D. Buskirk, Associate Professor and Beef Extension 
Specialist, Department of Animal Science, Michigan State University: 

* Dr. Julie A. Caswell, Professor and Department Chair, Department of 
Resource Economics, College of Natural Resources and the Environment, 
University of Massachusetts: 

* Dr. David A. Daley, Professor, College of Agriculture, California 
State University, Chico: 

* Dr. Kevin Dhuyvetter, Agricultural Economist, Department of 
Agricultural Economics, Kansas State University: 

* Dr. Basil Eastwood, National Program Leader, Plant and Animal 
Systems, Cooperative State Research, Education, and Extension Service, 
USDA: 

* Dr. Scott Greiner, Associate Professor and Extension Animal 
Scientist, Beef and Sheep, Department of Animal & Poultry Sciences, 
College of Agriculture and Life Sciences, Virginia Polytechnic 
Institute and State University: 

* Dr. Ron A. Gustafson, Senior Economist, Beef Analysis, Economic 
Research Service, USDA: 

* Dr. James C. Heird, Director of Equine Sciences Department, Equine 
Teaching and Research Center, Colorado State University: 

* Dr. Julie Jarvinen, Associate Professor, Department of Veterinary 
Pathology, Iowa State University: 

* Dr. Cleon V. Kimberling (retired), Clinical Sciences Department, 
Colorado State University: 

* Dr. John D. Lawrence, Professor and Extension Livestock Economist, 
Agricultural Economics, Department of Economics, Iowa State University: 

* Dr. Darrell R. Mark, Assistant Professor and Livestock Extentionist, 
Department of Agricultural Economics, University of Nebraska, Lincoln: 

* Dr. Bret D. Marsh, State Veterinarian, Indiana State Board of Animal 
Health, and immediate past president of the United States Animal Health 
Association: 

* Dr. James D. McKean, Extension Veterinarian and University Professor, 
Department of Veterinary Diagnostic & Production Animal Medicine, 
College of Veterinary Medicine, Iowa State University: 

* Mr. Douglas O'Brien, Co-Director, National Agricultural Law Center, 
University of Arkansas School of Law, and Staff Attorney, Drake 
University Agricultural Law Center: 

* Dr. James W. Oltjen, Professor and Extension Specialist, Animal 
Management Systems, Department of Animal Science, University of 
California, Davis: 

* Dr. Derrell Peel, Professor, and Livestock Extensionist, Department 
of Agricultural Economics, Oklahoma State University: 

* Dr. Valerie Ragan, President, AgWorks Solutions LLC, and former 
Assistant Deputy Administrator for USDA's Animal and Plant Health 
Inspection Service, Veterinary Services: 

* Dr. Kris Ringwall, Animal Scientist and Director of the Dickinson 
Research Extension Center, North Dakota State University, and Executive 
Secretary, North Dakota Beef Cattle Improvement Association: 

* Dr. Joan Dean Rowe, Associate Professor, Department of Population 
Health & Reproduction, University of California, Davis: 

* Dr. Ted Schroeder, Professor and Director of Graduate Program, 
Department of Agricultural Economics, Kansas State University: 

* Dr. Clifford F. Shipley, Clinical Associate Professor, College of 
Veterinary Medicine, University of Illinois: 

* Dr. Ronnie E. Silcox, Associate Professor and Extension Beef 
Specialist, Animal & Dairy Science Department, University of Georgia: 

* Dr. Michael A. Tomaszewski, Professor and Extension Dairy Specialist, 
Department of Animal Science, Texas A&M University: 

* Dr. Glynn Tonsor, Assistant Professor, Department of Agricultural 
Economics, Michigan State University: 

* Dr. Wendy J. Umberger, Assistant Professor and Extension Economist, 
Department of Agricultural and Resource Economics, Colorado State 
University: 

* Dr. Kelly Zering, Associate Professor, Department of Agricultural and 
Resource Economics, North Carolina State University, Raleigh: 

[End of section] 

Appendix IV: GAO Expert Panel Questions and Responses on NAIS: 

Expert Panel: USDA's Implementation of the National Animal 
Identification System: 

We conducted the following survey as part of our review of USDA's 
implementation of NAIS. We received a 100 percent response rate from a 
panel of 32 experts who filled out a Web-based questionnaire in late 
December 2006 and early January 2007. For presentation purposes in this 
appendix, we have combined the category "No expertise on topic" with 
"No answer" and the category "50% or less" with "51 to 60%." However, 
when the experts filled out the questionnaire, those categories were 
not combined. The views expressed by the panel members do not 
necessarily represent the views of GAO. 

Part I: Participation in the NAIS Voluntary Program: 

In USDA's November 2006 draft National Animal Identification System 
(NAIS): A User Guide and Additional Information Resources (NAIS User 
Guide), USDA states that NAIS is a voluntary program that helps 
producers and animal health officials respond rapidly and effectively 
to animal disease events for livestock and poultry in the United 
States. The next three questions ask for your opinion on likely 
participation levels for the three components of NAIS (premises 
registration, animal identification, and animal tracking) under a 
voluntary program. 

In this questionnaire, the term "producer" refers to all individuals 
engaged in the ownership, management, or marketing of any of the 
species of livestock included in NAIS. For example, in the beef cattle 
industry, this refers to cow-calf producers as well as stocker, 
backgrounder, and feedlot operators. While owners or managers of 
certain species, for example horses, may not typically be referred to 
as producers, these individuals are included in this definition of 
producer. This definition is consistent with USDA's draft NAIS User 
Guide (pg. 5). The term "livestock market" refers to livestock auction 
markets, sale barns, and sale yards. 

Q1. What do you believe will be the percentage of premises registered 
for each sector of livestock production under the NAIS voluntary 
program? 

a. Producers; 
60% or less: 24; 
61-70%: 4; 
71-80%: 2; 
81-90%: 1; 
91- 100%: 0; 
No expertise/ No answer: 1; 
Number of respondents: 32. 

b. Livestock Markets; 
60% or less: 9; 
61-70%: 4; 
71-80%: 5; 
81-90%: 6; 
91-100%: 5; 
No expertise/ No answer: 3; 
Number of respondents: 32. 

c. Slaughter Facilities; 
60% or less: 6; 
61-70%: 1; 
71-80%: 3; 
81- 90%: 12; 
91-100%: 8; 
No expertise/ No answer: 2; 
Number of respondents: 32. 

[End of table] 

Q2. What do you believe will be the percentage of animals identified 
(as individuals or, where applicable, as a group) for each species of 
animal under the NAIS voluntary program? 

a. Bison; 
60% or less: 18; 
61-70%: 1; 
71-80%: 1; 
81-90%: 0; 
91-100%: 1; 
No expertise/ No answer: 11; 
Number of respondents: 32. 

b. Camelids (e.g., alpacas, llamas); 
60% or less: 14; 
61-70%: 1; 
71- 80%: 2; 
81-90%: 1; 
91-100%: 0; 
No expertise/ No answer: 14; 
Number of respondents: 32. 

c. Cattle (beef); 
60% or less: 24; 
61-70%: 2; 
71-80%: 2; 
81-90%: 1; 
91-100%: 0; 
No expertise/ No answer: 3; 
Number of respondents: 32. 

d. Cattle (dairy); 
60% or less: 10; 
61-70%: 4; 
71-80%: 7; 
81-90%: 5; 
91-100%: 3; 
No expertise/ No answer: 3; 
Number of respondents: 32. 

e. Cervids (e.g., deer, elk); 
60% or less: 14; 
61-70%: 3; 
71-80%: 0; 
81-90%: 1; 
91-100%: 1; 
No expertise/ No answer: 13; 
Number of respondents: 32. 

f