Implementing USDA country-of-origin rule won’t be cheap


WASHINGTON — The USDA’s proposed mandatory country-of-origin labeling program could carry an overall recordkeeping cost burden of $458 million per year.

The USDA issued its proposed rule Oct. 27.

Country-of-origin labeling was mandated by Congress in the 2002 farm bill.

Hefty price tag. The impact of the law and the regulation on the U.S. economy could range between $138 million to $596 million annually, according to Kenneth Clayton, associate administrator with the USDA’s Agricultural Marketing Service

The rule, and its estimated implementation cost, came under quick fire by some farm groups, most notably the National Cattlemen’s Beef Association.

The cattle group said the labeling law would force producers to shoulder most of the program’s cost.

“The cost-benefit analysis shows that it will be all but impossible for producers to improve their bottom line under this mandatory law,” said association president and Idaho producer Eric Davis.

The group would rather see a producer-led labeling effort instead of a mandatory program.

White House weighs in. The Office of Information and Regulatory Affairs, under the President’s Office of Management and Budget, called the rule “one of the most burdensome” to be reviewed by the Bush administration.

Administrator John D. Graham, in a letter to the USDA, expressed concerns the labeling rule “would impose substantial net costs on the public.”

He suggested the Bush administration might seek legislative relief to reduce the impacts.

Drop in demand. The USDA estimates consumer prices for the covered commodities could increase between 1 percent and 5 percent.

Clayton said the USDA’s analysis shows that prices will “end up going up a bit,” and there’s likely to be a decline in demand for the covered commodity.

Plus for consumers. The National Farmers Union and 135 agriculture and consumers groups pushed for more country-of-origin labeling funding earlier this fall.

“Mandatory COOL provides an opportunity for the United States to expand the level of consumer choice, confidence and knowledge in the retail marketplace,” said Farmers Union President Dave Frederickson.

That’s something “consumers deserve and demand,” he added, “and American producers can provide.”

Congressional end run. The House of Representatives agriculture appropriations bill contains language to prohibit the U.S. Department of Agriculture from spending funds to implement mandatory country-of-origin meat labeling.

About the rule. Under the proposed rule, muscle cuts of beef (including veal), lamb and pork; ground beef, ground lamb and ground pork; farm-raised fish and shellfish; wild fish and shellfish; perishable agricultural commodities (fresh and frozen fruit and vegetables); and peanuts must be labeled at retail to indicate their country of origin.

Processed food excluded. Covered commodities are excluded from mandatory country-of-origin labeling if they are an ingredient in a processed food item.

Food service establishments, such as restaurants, lunchrooms, cafeterias, food stands and lounges are exempt from the mandatory country-of-origin labeling requirements.

The proposed rule also outlines the requirements for labeling products of mixed origin including products produced both in foreign markets and in the United States, as well as labeling requirements for blended products.

Recordkeeping requirements for retailers and their suppliers are also outlined.

Comments will be accepted through Dec. 29, 2003.

The statute requires retailers to begin labeling items by Sept. 30, 2004.

Under the proposed rule, a covered commodity can only bear a “United States country of origin” declaration if certain criteria are met:

* For beef, the covered commodity must be derived exclusively from animals born, raised and slaughtered in the United States, including animals that were born and raised in Alaska or Hawaii and transported for a period not to exceed 60 days through Canada to the United States and slaughtered in the United States.

* For lamb and pork, the covered commodity must be derived exclusively from an animal that was born, raised and slaughtered in the United States.

* Farm-raised fish and shellfish covered commodities must be derived exclusively from fish or shellfish hatched, raised, harvested and processed in the United States.

* Wild fish and shellfish must be derived from fish or shellfish harvested in the waters of the United States or by a U.S. flagged vessel and processed in the United States or aboard a U.S. flagged vessel.

* In the case of perishable agricultural commodities and peanuts, the covered commodities must be derived exclusively from produce or peanuts grown in the United States.

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