The Hindu Business Line : Transparency in selling cattle products

THE US President, went for a quail hunt to celebrate the start of 2004. Talking to newsmen soon after, he advised the citizens to continue eating beef. A few weeks earlier, the Secretary (that is, Minister) of Agriculture, Ms Veneman announced to the public that she would be serving beef at home during the Christmas holidays and they should consider doing the same.

It is not normal practice for senior politicians and bureaucrats to recommend meat products to the public, but these people were trying to build confidence in US beef. The event was important enough for me to expect 24-hour news coverage with television cameras waiting outside the home of the secretary while she put the first morsel of beef into her mouth. That would have been comforting to the millions of beef consumers who found out, early December 2003, that one cow was diagnosed with mad cow disease.

A cow gets infected by the disease (technically-called bovine spongiform encephalopathy) by eating feed containing tissue from the spine or brain of an infected animal. In simple English, a cow which is naturally vegetarian gets the disease when it is fed meat. Not just any meat, but in the US, cows were made cannibals because till the government instituted a ban in August 1997, cattle feed included brain and spinal cord tissue from cattle, on the grounds that it boosted protein.

The government was pretty sure that there was only one infected animal, yet announcements also warned that the meat from the plant which processed the affected animal supplied meat that day to eight states, which could be tainted. It was one of a batch of 81 cows imported from Canada and the government began investigating the others for signs of the disease.

When humans eat this infected meat, the disease jumps species. Since 1990, when there was a major outbreak of the disease in the UK, about 140 people are said to have died from this disease, since humans who eat infected tissue can get a brain wasting illness. Reacting to the recent evidence of the disease, about 30 countries immediately announced a ban on beef imports from the US. It has been estimated that this ban could cost US beef producers about $6 billion (Rs 27,600 crore) in exports. Meanwhile, stocks of beef producers took a hit while chicken sales improved. The reverse situation occurred a few years ago when chicken were found to be diseased.

It is estimated that US consumers spend about $50 billion (Rs 2,30,000 crore) on beef annually, and the cattle industry generates about $180 billion (Rs 8,28,000 crore) in economic activity. It is, economically, a `sacred cow' and an industry not only big, but with significant influence in the government.

The spokesperson for the Agriculture Secretary is a former director of public relations with the National Cattlemen's Beef Association, a large trade group. Her Chief of Staff was formerly the chief lobbyist for the association. Several other officials of the department are former executives of the meat industry.

But it is also an industry that does not believe in the consuming public having full knowledge about its products. Isn't it odd that those who scream the hardest about free markets are also the most secretive? The power of the industry affects what ban is instituted, and how it is enforced.

A recent announcement by the Federal Government trying to build consumer confidence in beef consumption was rather intriguing. On December 30, 2003, the government banned meat from `downer cows.' These cannot walk or stand on their own because they are sick. The shocking implication of this announcement is that till that date, producers were selling meat from sick cows. Interestingly, while making this announcement, the government said it would not prohibit using meat from high-risk cattle in pet foods, and feed for chickens and pigs.

My local grocery store sells cartons of eggs with the label `cage-free eggs.' The label explains that the hens are ``fed an all-natural, all vegetarian diet, with no hormones or antibiotics.'' These eggs are priced about 30 per cent higher than `regular' eggs and have a good custom. I am sure that their sales would shoot through the roof if the newspapers had a headline saying, ``Hens can continue to be fed with tainted meat.''

Government policy appears to be balancing the interests of the industry with the need for full information for the consumer even when it comes to food products. The industry, for instance, prefers to hide behind scientific research that has not yet proven it to be harmful for chicken and cattle to be given growth hormones and antibiotics to make them grow bigger and faster while inoculating them from illnesses. The public health consequence is that the population is increasingly becoming immune to the benefits of antibiotic treatment.

Eric Schlosser, an author of a book critical about the meat industry, writing recently in the New York Times, argues that the new ban in the US "still allows the feeding of cattle blood to young calves — a practice that Stanley Prusiner, who won the Nobel Prize in medicine for his work on the proteins that cause mad cow disease, calls `a really stupid idea'.

More important, the ban on feed has hardly been enforced. A 2001 study by the Government Accounting Office found that one-fifth of the American feed and rendering companies that handle prohibited material had no systems in place to prevent the contamination of cattle feed. According to the report, more than a quarter of feed manufacturers in Colorado — one of the top beef-producing states — were not even aware of the FDA measures to prevent mad cow disease, four years after their introduction."

Full information to the consumer was the issue in a settlement regarding sale of another cattle product, namely milk. Oakhurst Dairy, of Maine, had a label on its milk carton that said, ``Our farmers'' pledge: "No artificial growth hormone used.'' The company just wanted to tell its customers what they would like to know and saw sales increase 10 per cent once it started putting this information on its label. It was not claiming any additional health benefit by its farmers not using the hormone. However, the label upset Monsanto Co., manufacturer of the hormone, which sued the company. In a settlement entered into in December 2003, Oakhurst agreed to add a qualifying statement, ``FDA states: No significant difference in milk from cows treated with artificial growth hormone.'' (FDA is the governmental agency, Federal Drug Administration.)

Designing the information a customer is provided to make a buying decision is a crucial part of advertising. The art is to stay on the right side of the law while manipulating the information. Even when there are no labels involved, as the beef situation shows, there are big stakes at play when it comes to ensuring the buyer has all the information that he should have.

(The author is professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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