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. 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. 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. 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. 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. 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. Nonetheless,  USDA officials are starting to address some integration issues. 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. 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. 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. 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 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. 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.
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.