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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?


To: flatsville who wrote (3717)2/6/1999 4:35:00 PM
From: John Mansfield  Read Replies (1) | Respond to of 9818
 
'USDA site now includes odd disclaimer
asked in the TimeBomb 2000 (Y2000) Q&A Forum
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At the USDA site, usda.gov, click on the Case Study 1 tag and you will get an odd disclaimer, then this bombshell:
How are you preparing for the Year 2000...?

"R.U. Ready" is a pseudonym for a real farmer who manages a 3,000-acre grain operation. In this series from @gInnovator, he outlines his outlook for the Year 2000 problem. He asks some hard questions, and lays out his preparations for inputs, equipment, and financial needs. Whether you agree or disagree, you need to address the same questions. Preparation prevents panic!

Case study: A farmer prepares for the Year 2000

"Preparation prevents panic"

@gInnovator recently interviewed a farm family hard at work preparing for problems related to Y2K issues. Here's the first installment of a multi-part series on their strategies for both their farm business and their personal lives. They've agreed to provide information for the articles, but wish to remain anonymous. We're going to refer to them as the "R.U. Ready" family.

Based on other research by @gInnovator, their approach seems similar to that of other farmers who anticipate problems associated with the Year 2000, so their experience may provide a representative example.

First, some background: Our farmer is part of a large diversified extended family enterprise with more than 4,000 acres spread out over two geographically diverse locations, one concentrated on crop production, the other on crops and livestock. R.U. Ready is not in a position to make all the decisions for the farm, but manages the largest portion of the crop acreage. Each main location lies about an hour on either side of a smaller major Midwestern city.

"First, you have to understand the problem," stresses R.U. Ready. "Then you have to develop a plan." As part of his planning and communicating with other family members, R.U. Ready developed the accompanying flow chart which illustrates his approach to the problem:

First question: Is Y2K a problem? Options: No (but why are firms spending millions to correct a scam?)

Yes (but will it be fixed in time)

-If yes, then there's no problem to prepare for.

-If not, then you can either do nothing or take action.

This depends on your answer to this question: will the power go out?

-If yes, then, can you survive without power?

--if yes, then there's no problem to prepare for

--if no, then you'll need food, heat, water, etc. If the answer to will the power go out is no, but there will be some problems, then you need to answer more questions regarding food, fuel, communications, farm vendors, packing plants and processors etc.

"We've done considerable reading and investigation on Y2K issues. As I see it, there is no way around supply interruptions for the Year 2000," says R.U. Ready. "Some will start before 2000 and others could occur for an extended time. So we want to be prepared for at least a year."

R.U. Ready Family members have discussed Y2K and have developed some preliminary strategies. For the farm business, these involve purchasing enough supplies in 1999 to carry them through the year 2000.

"Since booking two years of supplies amounts to a major financial decision for most farmers," notes R.U. Ready, "we will review these plans as 1999 rolls around. While our operation is financially solid, we still have to be careful with expenditures. Currently, the plan is to have fuel and chemicals on hand in 1999 to farm another year. We'll also have some of our seed needs on hand."

Fertilizer: "We plan to apply all our fertilizer needs in the fall of 1999," notes R.U. Ready. "We generally follow a fall program anyway. And our fields test high enough that we don't plan to apply any extra for succeeding years."

Chemicals: "We'll book a two-year supply of dry chemicals in the spring of 1999," he continues. "Liquid chemicals must be kept from freezing, so we are still weighing options and looking for dry alternatives." For example, they may buy more Accent in 1999, then trade it for Surpass in spring 2000 if they can. They've considered renting a climate-controlled storage facility, but worry about the risk of a large inventory outside their control should the power system go down or become erratic.

Seed: "Due to the storage concerns, we won't be buying much if any additional seed," explains R.U. Ready. But they are concerned about seed supplies. Seed generally becomes available in the spring before planting, notes R.U. Ready. "This could a big problem in 2000, particu l a r l y for prod ucts coming from the Southern Hemisphere. Right now, we don't plan on ordering shorter season corn, though we may experience planting delays in spring 2000.

"If we would decide to tie up the dollars in 1999 for seed in 2000, we can't store it properly. But it might be worth the risk of poor germination compared to not getting any seed at all in the spring of 2000." If necessary, they would plant soybean seed out of the bin. And they could also plant hybrid corn out of the bin, but yields will be cut in half.

So, in 1999 R.U. Ready will plant a little open pollinated corn, which he expects to produce 500 to 600 bushels of additional seed stock for 2000. This corn must be harvested in the ear, so he has set up a hand sheller. And he's reading up on how to grow and harvest open-pollinated seed.

Fuel: They plan to contract for a year's supply (12,000 gallons) of diesel fuel at the cropping location. That's enough to supply their 11-kilowatt diesel-powered electrical generator over the winter as well as fuel the farm equipment for the year 2000 crop. Their generator links to either an inverter board (to charge a bank of batteries) or to 220-volt equipment such as dryer fans or a welder.

"The real Y2K issue comes down to energy supplies," states R.U. Ready. "I think frequent and widespread outages is a best case scenario. We'll stretch our power supplies as necessary and as far as possible."

Equipment: They've contacted Cat, Case-Cummins and Deere regarding microprocessor chips in their newer tractor and truck engines. "We traced the systems to the fuel pumps, but the manufacturers assure us there are no date-sensitive aspects to these systems," he says. He hopes they're right.

And they'll have to make a decision soon about their combine. "We normally trade very four years--and we're due to trade after the 1999 harvest. Either way, in 1999 we'll be laying in a supply of extra parts, filters, oil and other supplies," exp la in s R. U. Ready. Or maybe sooner. "By the time YOU hear about shortages and problems, it will be too late to do much about it because everyone else will also be scrambling," he notes.

Grain storage: R.U. Ready typically harvests and stores their corn and soybeans on the farm. He often air dries a substantial portion over the winter. They harvest this portion at 20% moisture then air dry with fans to 15%. "We may not have electricity in the winter of 2000 to do that," he notes. "We've considered additional propane drying to completely dry the grain in the fall of 1999."

So far, the plan is to book enough propane for 1999 harvest, plus fill up all the existing propane tanks after harvest--as they expect shortages and transportation problems later. "We may get additional propane tanks, but they cost about $1 a gallon to buy so it adds up."

Their 1990 grain drying system does not have microprocessors. "So as long as we have power we expect to be operational," says R.U. Ready. If necessary, they could run 7.5 hp fans on each of a dozen bins, and work out a schedule for their other electrical needs from the diesel generator, as well as getting power to distant locations. A tractor-powered PTO generator is another option they may utilize. They'd get about 12 hours of operation per tankful, and have a 300-gallon fuel trailer they now use for hauling fuel to the field.

Livestock: The other major portion of the operation is a large diversified livestock-grain operation with hogs and cattle. "The main concern is to keep the livestock alive," notes R.U. Ready. "But the question is for how long. Most of the animals are raised on contract, so have set schedules of receipt and delivery. A lot will depend on how operational are the elevators and packing plants and transportation systems."

The R.U. Ready family stores about 1,000 acres of crop at the livestock operation location, along with silage and ear corn for their 2,000 head of cattle. They c oul d a lso fi ll a Harve store if necessary. They have a diesel generator at this location too, and will stock up on fuel. They plan to fill all their propane tanks in 1999.

"We should have little effect until it comes time to sell the livestock," points out R.U. Ready. "If things are really bad, we may be bartering for butchers--or worse, trying to protect the herd from bandits."

"We won't have these problems in our own operation, but we're also concerned about embedded chips and controllers in feed mills and environmental controls in confinement buildings." They also have questions about veterinary supplies, along with the rest of the infrastructure of the economy.

Markets: Currently all their bins are empty, but they'll be full after the 1998 harvest. "We hope to be able to get rid of our 1998 crop and have room for the 1999 crop. This could be a problem due to high carryover, low demand, and low prices," relates R.U. Ready. "Many farmers in our areas are building bins. We're seeing a horrible basis and export market. But livestock megafarms find it hard to shut off their contract schedule, so they'll have to continue feeding livestock."

"If we are able to move the 1998 crop and harvest the 1999 crop, we'll likely store most of it on the farm. We'll take our lumps in the market as they come in 1999 and 2000. However, we have serious questions about the infrastructure for both grain marketing and transportation. We can always eat the grain, or burn it (we'll have a biomass stove, too), and if we can't get any other seed we can plant it," he adds. Barter for neighboring livestock farmers might also be an option.

Leases: "We considered putting clauses in our cash leases so we could cancel them if we cannot obtain inputs to farm the ground," explains R.U. Ready. "However, we don't want to raise questions in the minds of our landlords. And this will be okay if any Y2K problems end up being short-term--less than a year. But there are questions about the status of the banking system for lease payments due in 2000. And farmers renting marginal or high dollar ground may decide to drop some farms to reduce their expenses."

Government: Will the government decide to enact martial law "to secure domestic order? Will this involve "appropriation" of supplies, such as fuel? Their fiscal year starts in October 1999, and as of now it appears that government services systems may not be fully operational. "So that is real possibility for the fall of 1999. But if the National Guard is going to do the farming, we'll all be in big trouble for sure!" he quips.

Finances: "For many farmers, the financial aspects of farming in the spring of 1999 will be a bigger issue than the year 2000 questions," projects R.U. Ready. "Not everyone will be in a position to farm in 2000, though we expect to be prepared."

R.U. Ready notes many landlords still want to hold rents steady, but farmers are looking at $50 or more less income per acre. He thinks many farmers will not want to fight it and will exit agriculture before 1999 even if they're not currently in financial trouble. Others will stay in--and look for bargains in the next couple of years. "If you expect a bad case scenario, you'll want to preserve your purchasing power and get better deals on the other side of 2000 than you can currently get on this side," he points out.

"If stockholders see their equity plummet with falling stock prices, farmers should R.U. Ready to pur chase farmland at depressed prices over the next couple of years," suggests R.U. Ready. "We may be surprised at how much pressure backs off land values if stocks do go down. If investor demand goes out of the market, land prices could go down fast."

"Guys that need money the most may not be able to get it in 1999 or 2000. Many financial statements don't look so good right now, considering $2.40 grain under loan that is now worth less than $2.00 per bushel--that's a big hit," he points out. "Guys that are in good financial shape can borrow money for the next year--and may do that to fund stockpiling. If nothing much happens with Y2K problems, the most they're out is another year's interest. Still, you could get hit with price changes on inputs, or stuck with something you're rather not use. But this will be a minor problem compared to the alternatives.

"Still, I expect farmers with dollars on hand to prepare their business for the coming uncertainty -- and spend more on personal preparation for their families," he concludes.

Personal preparations: "It's important to have a game plan--and a budget," he points out. "Someone has pointed out that 'you can't put so much into preparation that you can't afford to NOT have the problem'!" he adds.

"I have finally reached the point of realization that I am going to do these things based on the situation as I see it developing and can no longer be talked out of it by any one else's best case scenario. It took me over a year to get to this point. I don't want to have to buy anything for at least 6 months after 1/1/2000, and maybe we will have to start before 2000, because I'm pretty convinced we will have bank runs. If we don't have panic before the bank runs, we will have panic at that time."

=============

I wonder if Paul & Flint would like to address these issues.

-- a (a@a.a), February 05, 1999

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Contribute an answer to "USDA site now includes odd disclaimer"
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timebomb2000@yourdon.com

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To: flatsville who wrote (3717)2/6/1999 4:47:00 PM
From: John Mansfield  Read Replies (1) | Respond to of 9818
 
'Notes on today's food supply hearing
asked in the TimeBomb 2000 (Y2000) Q&A Forum
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Observations from notes I scribbled (and can actually read). See particularly comments from Bennett and Evans.
Dodd: food processors need 6-9 months lead time to gear up for increased production. [This might help explain why Glickman refers to stockpiling food as "needless and frivolous." Perhaps in August or September Glickman will tell us it's okay to panic now.]

Glickman noted 50 years ago produce was sold within 50 miles of where it was grown. Not so today. Distribution is VERY high-tech, even smaller farms.

No widespread or severe disruption in food supply. Any will be minor, localized by region.

USDA hired Gartner Group to assess. Assessment not complete, much work to be done, but by and large food supply will remain reliable.

USDA looked at about 50% of food distributors, who deal in basic foods; they're in good shape. Of course, few are immune from ANY interruptions, but only minor problems, few delays.

Rural utilities: Glickman says looked at over 50% of borrowers, most indicate will be okay by Y2K. Transportation: larger firms further ahead than smaller ones. International shipping: generally lagging United States.

Food distribution in general: Will likely have a relatively low potential for problems. [What the hell does THAT mean?] There's some risk in the short-term for perishables.

There are 20 million on food stamps. USDA expects program to be fully compliant by government deadline of March 31. As for the states, food stamps and WIC program (responsible for local distribution), the results are "promising."

Slight mention that benefits are now by means of EBT (electronic benefit transfer).

Glickman spoke of "fearmongers," scaring people--things are working very well with the food supply.

Bennett: Big problem is source of info on which USDA relies. Gartner assessed 100 major businesses to reach its conclusions re food supply. For 85 of those 100, Gartner looked at SEC filings, press releases, annual reports, etc., i./e., self-reporting. Committee has found that self-reported info tends to be overly optimistic in every circumstance. This is what's found when GAO checks numbers. E.g., Dept of Defense--when GAO checked figures, not what was self-reported. Glickman agreed best face is put on things. Catherine Woteki, undersec for food safety, says she "is reasonably assured" things will be okay.

Bennett asked about mission critical band. Woteki said most organizations are working across the board, not just on mission criticals. But her focus is on mission criticals.

Bennett wondered if the Senate would be working on Y2K and asked the Sergeant at Arms, who is responsible for the computers. The man's response was "really kinda frightening," he said. S at A said all mission criticals would be working, but Bennett wondered about definition of mission critical. For instance, copy machines not deemed mission critical by S at A. If you're running for office and need to get out a mailing, copy machines are mission critical, but S at A didn't see it that way. Sure, you have all summer to fix mission criticals, but remember the copier.

Glickman warbled a bit about how Ag is agent for thrift savings plan and big payroll entity. Sounded as if he was about to lay groundwork for not enough personnel, too much to do, etc.

Smith (R-Oregon) is a food processor. Says Ag production good, mostly in oversupply right now. Most of oversupply goes overseas. Focus ought to be on international Y2K compliance, commodities will be backing up in this country.

Schumacher, undersec for [illegible] and foreign service, believes Canada and Japan in reasomnably good shape. Europe, UK, okay, Mexico "has a little more work to do." Russia - concerned, they'll have to work that really hard.

In talking about food quality and international shipping in computerized, "climate controlled" containers, Michael Dunn, undersec for marketing service, says Coast Guard will stop any non-compliant ships from entering US ports.

Anne Reed, Chief Information Officer, USDA, independent assessments all leading to samew conclusion as Gartner Group. Trade assoc. info, another source of Y2K compliance info, simialr type of assessment.

Smith is worried that resources for Y2K will be taken from foreign food inspection, got to have safe food, imports must meet USDA standards. $38 billion of food is imported, about 5-6 percent of total. Breaks down as 60% of all seafood is imported, 40% of fruits (mostly bananas), and about 6-10% of vegetables. That's fresh stuff. Processed, canned, "lots" imported, doesn't have stats, doesn't know how much offhand.

But basic foods will be there, meat poultry, bread, milk, baby food. Most milk producers are computerised, can be overriden. Distribution is JIT, they're very much on top of the problem.

Dodd: Japan is only in the awareness phase. "Very far behind." Exports of about 1.2 billion.

Shumacher says problem in Japan is internal distribution.

Bennett (I think): Of 500 food processors survyed at end of year, only three have replied.

USDA says their optimism comes from round-table discussions with trade associations. Dairy association, "very forthcoming." Meat and poultry, "their awareness is heightened." Trade associations have been very actively polling their membership about Y2K. Glickman will let them know of Committee's concerns.

Next up was Tyrone Thayer, President of Cargill, which employs 80,000 people in 65 countries. Has spent $385 million in IT services, $80-100,000 in capital investment in high tech every year. Will be ready for Y2K. Also will have contingency plans for transportation, energy and strategic products.

Says need for "overstockpiling" is "not prudent."

Bennett says what if next September there's a surge in demand.

Thayer says they supply raw ingredients to customers, procesors, looking at key strategic processes, that may be a problem. Overseas plants are 80% compliant, main concern is transportation. When questioned about possible overseas infrastructure problems, Thayer more or less sidestepped the question. Would Cargill pull out of any overseas location for inability to provide infrastructure? No. (But had to discuss with cohort before answering.)

Allen Dickerson, CIO of Suiza Foods, largest dairy processor in country, plastic producer. Rural electric cooperatives his biggest concern. Transportation re farmers getting milk to them, pretty good, but coal to power plastic plant may be a problem.

Bennett is satisfied that large power plants will be okay.

Ken Evans, Pres, Arizona Farm Bureau: Is very concerned about Y2K. Gave example of insurance co. testing Y2K compliance, changed date, rolled over to Saturday, January 1, 2000, no problem. However, on Tuesday got calls from hundred of irate customers--their insurance had been cancelled. Soemthing to do with main computer passing info to smaller PC with firewall, couldn't handle Y2K info, so cancelled insurance for about a thousand people.

Gave example of large piece of farm equipment--chip problem. Couldn't handle Y2K date calculations, went into eternal loop. Had to scrap, couldn't be fixed, even when date turned back. Seems even though chips looked same, same codes and all, some were from different batches, some good, some bad. No way to tell which is which, just have to wait for failure.

Bennett said similar thing happened to medical equipment, told about it at another hearing.

When asked, Evans said, very calmly and matter of factly, he's stockpiling food, fuel and water and has generator. And is doing same for his employees.

The two food processors will stockpile raw materials.

-- Old Git (anon@spamproblems.com), February 05, 1999

Answers
Thank you!
What were you taking notes on? A senate hearing? will there be a transcript?

One point: When the big Gartner report came out last fall "98...the one with all the charts and that was based on various types of industries in various countries...remember that ...the pretty red to green charts....

In that report, Agriculture was one of the areas that was really, really lagging. In this country as well as in others although much worse in others.

How did they get so good so fast?

Mary P.

-- Mary P. (CAgdma@AOL.com), February 05, 1999.

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Mary, it was the Senate Committee on the Year 2000 Technology Problem, Food Safety, I think. Sen. Robert Bennett, R-Utah, is the chair. Two things I forgot: One, thanks, Joyce, for giving the head's up to catch this at 4 p.m., and two, I don't remember hearing Glickman actually say stockpiling food is "needless and frivolous," although it was reported thus from advance press hand-outs. I could have missed it during a brain cramp, but I don't think so. Perhaps he changed his mind and talked about fearmongers instead. Shifts the blame, doesn't it, from the consumer to the fearmongers. Whoever they are. Us, I guess. If this hearing is repeated on C-SPAN, and I think it will be, I urge everyone to watch it if they can. See the Ag Dept sec and minions wiggle when Bennett gets going! Don't forget, Mary, the optimistic assessment came from 3 replies to a survey and from self-reporting "round table" discussions--thanks to Bennett for making it clear.

-- Old Git (anon@spamproblems.com), February 05, 1999.

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Old Git, Thanks for sharing your notes. You did a lot of work for us. Sure do appreciate the help.

-- Watchful (seethesea@msn.com), February 05, 1999.

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Old Git, here is the AP Wire that contained the statement about "needless and frivolous". I think you are correct that he didn't "say" this during the actual testimony today.
Y2K Food Shortages Said Unlikely

Y2K Food Shortages Said Unlikely

By TED BRIDIS Associated Press Writer

WASHINGTON (AP) - Agriculture Secretary Dan Glickman says it is unlikely the Year 2000 computer problem will cause widespread food shortages, partly because few U.S. farmers use high-tech systems that might be susceptible.

''The American public can be confident that the major domestic companies, which provide most of the key foods, will continue to operate,'' Glickman wrote in prepared testimony for his appearance today before a Senate committee.

Instead, Glickman warned consumers against ''needless and frivolous stockpiling of supplies.''

He promised his agency would work with the Federal Emergency Management Agency to distribute food if there were shortages.

Mr. K

-- Mr. Kennedy (mrk@odds.com), February 05, 1999.

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The food supply hearing is being replayed right now again (10:53 PM EST) on C-SPAN 1. If you have RealPlayer, you can watch it at this link:
play.rbn.com

By the way, I just heard Dick Lugar testify that the GartnerGroup suggests an "information dessimination" campaign to assure the public that food supplies will be adequate in 2000.

-- Kevin (mixesmusic@worldnet.att.net), February 05, 1999.

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play.rbn.com

-- Kevin (mixesmusic@worldnet.att.net), February 05, 1999.

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Thanks Old Git! Good job.
Tried a quick look for the written transcripts but not sure it's available yet.

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), February 06, 1999.

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I didn't editorialize much when I typed up my notes, wanted y'all to get the full, unadulterated flavor as much as possible. But there's a bit of the testimony that really worries me. When Bennett pointed out that the emperor was starkers, i.e., that only three of the 500 top food producers surveyed had answered the survey as of January, and expresseded wonderment that enough had answered since then to give rise to the optimism exhibited by USDA, the USDA's Chief Information Officer (I think she was) said the department's "optimism comes from round-table discussions with trade associations. Dairy association, 'very forthcoming.' Meat and poultry, 'their awareness is heightened.' Trade associations have been very actively polling their membership about Y2K. Glickman will let them know of Committee's concerns."
The words "very forthcoming," heightened awareness, and active polling did not reassure me sufficiently to call the Food Bank to come and get my supplies. When Glickman stood up and said he would let the food distributors/processors "know of the Committee's concerns," as he gathered up his papers and left the hearing, the only emotion I felt was apprehension--then anger at such lack of concern. He'll "let them know"? This is the only action he's going to take about the 497 companies who didn't answer the survey? Well, they can sit at their little round tables and talk nice-nice all they want, but it's not going to convince me that they have their Y2K problems under control. Now, if someone can only tell me at which point stockpiling becomes overstockpiling. . . I think when Mr. Thayer prudently puts away raw materials and such for his company (and probably several months of food for his family), that's stockpiling. When you and I put away rice and beans and such, that's overstockpiling. Just looked at the original quote: Thayer "[s]ays need for 'overstockpiling' is 'not prudent.' Didn't notice that until now. Thayer doesn't deny there's a NEED to "overstockpile," just that it's not prudent to do so. Why didn't he just say there's no need to overstockpile?

As Greybear might say, got overstockpiles?

-- Old Git (anon@spamproblems.com), February 06, 1999.

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Wow... and these people are paid to traipse up to capitol hill and say things like "...stop noncompliant ships." ???
I wonder how they will do that? Will noncompliant ships have the words "NONCOMPLIANT" painted on the bow? Perhaps the Coast Guard will stop them and ask them to fill out a form?

And "overstockpiling" is not prudent...does that mean "stockpiling" is prudent?

Three responses and roundtable discussions (probably at a Georgetown restaurant with 'industry' picking up the tab...) gives them the insight to make this wonderfully detailed and fact-filled analysis.

Thanks Old Git...You've restored my lack of faith in bureaucrats.

-- PNG (png@gol.com), February 06, 1999.

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The thing that struck me most about the hearing was when Lugar expressed his concern that the USDA went from 40%compliance on over 1000 systems to 70% compliance on less than 400 systems. He still isn't comfortable that 600 systems are all of a sudden no longer critical. That's one of those reporting problems we keep hearing about.

-- margie mason (mar3mike@aol.com), February 06, 1999.

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It was also noteworthy that Senator Bennett questioned the accuracy of the GartnerGroup's report on food industry compliance. Bennett said the figures were self-reported by the companies, and represented only the compliance level of the largest players in the industry.

-- (mixesmusic@worldnet.att.net), February 06, 1999.

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Margie, your point is the one that gets my attention about reports from the govt. that their "percentages" look good, but they've reduced the classification of many previously listed mission critical systems. ESPECIALLY the Dept. of Defense.
Mr. K

-- Mr. K (looking@numbers.com), February 06, 1999.

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Contribute an answer to "Notes on today's food supply hearing"
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timebomb2000@yourdon.com

greenspun.com



To: flatsville who wrote (3717)2/7/1999 9:19:00 PM
From: Ken Salaets  Read Replies (2) | Respond to of 9818
 
>> The idea has not been well received. They may want to put an ear to the rail.

Ya got that right! ggg.

Ken