October 17, 2005

NAIS: Government By Proxy

While I am totally opposed to the NAIS, I think this article is important because it exposes deeper issues in the scheme.

by Terry A. and J. Randall Stevenson

They want to call it privatization. But it’s not. The U. S. Department of Agriculture (USDA) has begun the process of instituting the National Animal Identification System (NAIS) for health and disease tracking purposes in livestock.

Each animal would be given a unique identification number sometime before it leaves the premises of its birth. The USDA has declared that it intends to turn over the operation of the NAIS to a consortium of livestock industry organizations led by the National Cattlemen’s Beef Association (NCBA). They say they are “privatizing” it. In truth, we should call it government by proxy. Would they call it privatization if the government turned over the operation of unemployment insurance to the AFL-CIO, a consortium of labor organizations?

The USDA proposal would grant monopoly status to a private organization. This would be a great leap backward for genuine free enterprise. Our country’s founding was triggered by the existence of a government sanctioned monopoly – the East India Company. It’s not hard to imagine a group of cattlemen dumping boxes of cattle i.d. tags in Boston Harbor.

Another problem with the proposed “privatization” of the NAIS is related to agency capture. It is a fact that many individuals who are now in authority in the USDA previously held positions in the NCBA or other industry related organizations. Granting the operation of the NAIS to the NCBA echoes the machinations of the once powerful Tammany Hall of New York City. In its heyday, the Grand Sachem of Tammany Hall determined who would be employed and who would be given contracts by the city. Tammany Hall, not city hall, was the real governing power in New York City. The most notable Grand Sachem was William “Boss” Tweed. Tweed openly engaged in many shady ethical deals. Founded originally as a fraternal organization, Tammany Hall eventually followed such a twisted standard of morals that its members distinguished carefully between what they considered honest and dishonest graft.

In the Supreme Court ruling on the Beef Checkoff Justice Scalia provided an invitation for the plaintiffs to return with a claim of unconstitutionality based on the principle of freedom of association. Such a claim would apply more fittingly to a mandatory but privately operated animal identification system. In that situation there would be no “government speech” to hide behind. Cattle producers would have no choice but to associate with the NCBA by using the mandatory identification program. This would be required even though the NCBA does not even represent the majority of cattle producers. The NCBA does not represent all cattle producers any more than the AFL-CIO represents all workers.

Granting the NAIS operation to the NCBA is also an end run around the Hatch Act of 1939. That act prohibits government employees from lobbying or campaigning. If the USDA gives the operation of the NAIS to the NCBA, then there is a problem of violating the spirit and intent of the Hatch Act. Carrying on the operation through a non-profit “consortium” barely changes the fact that the NCBA will gain, if not financially, certainly a great deal of political clout from running the NAIS. And the fact is that the NCBA is a lobbying organization. If association with the NCBA is mandatory through the NAIS, and the NCBA continues to lobby, there is a serious problem. There is no way NAIS users would be able to disassociate themselves from lobbying positions taken by the NCBA. If the NCBA wishes to continue to lobby and campaign, it should not benefit (monetarily or politically) from a government mandate that would require all cattle producers to associate with them.

A better proposal would be to let the individual states run their own programs. Many states already have livestock boards in place that enforce livestock brand laws. These brand laws, which are already a rudimentary identification system, differ widely from state to state. It makes no sense for the federal government to impose a national identification system on these states if they can satisfy the goals of a national system by themselves. The federal government does not need to track any animals until they cross a state line. Each state is more capable of running its own system. The only federal involvement necessary is to tell the states what information needs to be tracked. When livestock leaves its state of origin then that information can be passed to the destination state. Nothing more complicated is necessary. Calling the USDA proposal “privatization” obscures the fact that it is also a “federalization” of existing state animal health and identification programs.

Private organizations performing work for the government is not anything new. When such work has been contracted in ways that maintain competitive choice, both government and the public have benefited. Even in the realm of utilities where the government has granted regulated monopolies, the trend has been toward a system of competitive choice. However, the proposal to give the operation of the NAIS to a private consortium does not fit this pattern.

The pattern suggested in the USDA’s proposal has been seen in history before. It can be called cronyism, Tammanization, taxation without representation, compulsory association, favoritism, and patronage. Some might even call it incipient fascism, with its merger of government and business. But one thing is unique about the USDA’s proposal. This is the first time in history it has been called “privatization.”

1 comment:

  1. Hi Hen!

    I see I have a LOT to catch up on your blog. Since being sick I have tried to at least post the occasional article on my blog to keep it alive. I will be back.



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