The government of Japan said this week it will wait until September before forcing U.S. beef producers to label their product to say where it was raised and processed. Japan sought a July 1 deadline for the labels in the wake of the reported Mad Cow case in Canada. U.S. officials sought and received the later deadline, insisting they needed time to review scientific reports on how Canada handled its Mad Cow investigation.
The current U.S. ban on Canadian beef imports would seem to preclude any cross contamination of meat supplies. But the Japanese concern is a real one. And it lies at the center of an ongoing struggle by the nation's food producers and processors over country of origin labeling. David Miller explains.
In May of 2002, President George W. Bush signed the newest version of the farm bill into law. With it was enacted the controversial statute known as country of origin labeling or COOL. The measure requires retailers to label unprocessed meats; seafood, fresh and frozen fruits and vegetables; and peanuts as to their country of origin.
Among those groups who support the measure are the Consumer Federation of America. Art Jaeger is the Assistant Director.
Art Jaeger, Assistant Director, Consumer Federation of America: "As a matter of choice, consumers may wish to purchase produce grown and processed in this country or meat from animals born, raised, and processed here. Consumers may wish to avoid meat or produce from a certain country based on news reports on the conditions in that country, pesticide use, or whatever."
And the Ranchers-Cattlemen Action Legal Fund, or R-CALF, which represents 8700 producers as well as numerous state cattle associations, also support the bill. Bill Bullard is R-CALF's C-E-O.
Bill Bullard, CEO, Ranchers/Cattlemen's Action Legal Fund: "What this law will do is take significant market power away from the dominant participants, the retailers and the packers. And it's gonna redistribute that power amongst all the market participants, particularly producers and consumers."
COOL also gets a portion of its political support from a bi-partisan group of legislators including Republican Senator Charles Grassley of Iowa and Democratic Senator Tim Johnson of South Dakota.
When it takes effect on September 30, 2004, the measure will apply to the approximately 31-thousand retail establishments where the annual invoices total more than $230-thousand per store. The USDA's Agricultural Marketing Service estimates the cost per year of implementing the rule at $2-billion. Any retailer who willfully violates the law will have 30-days to correct the mistake or receive a $10-thousand fine. All records identifying the country of origin of covered products must be kept for two years.
Those objecting to COOL comprise a short list of high profile groups from along the entire supply chain. The complaints are diverse, ranging from the cost of record keeping and label redesign to exemptions for anything sold to food service outlets.
Tom Zaucha is the president of the National Grocers Association that is opposed to COOL on a number of fronts.
Tom Zaucha, President, National Grocers Association: "The idea of keeping records of tens and thousands of pages of documentation that a USDA inspector can come into your store and say you're in violation because you can't trace the origin of a banana or an apple or a peanut that was sold seems to me to be fairly ridiculous."
Bryan Dierlam is the Director of Legislative Affairs for the National Cattleman's Beef Association. The NCBA, which represents 200-thousand U.S. cattle producers, initially supported the legislation.
Bryan Dierlam, Director of Legislative Affairs, National Cattleman's Beef Association: "...we believe we ought to have a system that maximizes the benefits and minimizes the cost and when you look at our approach versus the one that's in law, the one in law seems to get those two items turned around, they seem to maximize the cost and minimize the benefit. But nonetheless, that's the law that's on the books and the one that we're going to have to work with and try to figure out if we can't get the focus back on promoting and marketing U.S. beef."
They are joined by the National Pork Producers Council, the Food Marketing Institute and the American Meat Institute. And last week, the House Agriculture appropriations sub-committee voted to withhold funds for the enforcement of COOL.
To help the retailer label products in good faith, COOL stipulates that existing producer paperwork is enough verification. Most domestically grown fruits and vegetables can easily be tracked from the field to the retailer. But new questions are being raised. For instance: Is there a need for a third-party to verify that meat for sale in the cooler can be labeled as born, raised and slaughtered in the U-S-A?
In what appears to be anticipation of the worst case scenario, packers like Tyson Fresh Meats, formerly IBP, have sent letters to their producers asking them to have their documents verified by a third- party, provide a signed legal affidavit, open their records to random audits and indemnify Tyson from any penalties they might be forced to pay.
R-CALF objected to the Grain Inspectors Packers and Stockyards Administration. Officials at GIPSA ruled that, in light of the fact that COOL does not mandate third-party verification, the request is not out of line as long as the demands are applied to everyone that supplies them with meat.
The law has clear guidelines as to what must be done from record-keeping to labeling. Even so, the details have yet to be worked out. The USDA will hold a total of 12 listening sessions and sift through any additional comments before writing a final rule. Iowa State University Extension in Ames, Iowa, even held a video-conference in mid-June for a group of 200 at various locations around the state.
In attendance was Bill Sessions, Associate Deputy Administrator for the USDA's Agricultural Marketing Service.
Bill Sessions, Associate Deputy Administrator, Agricultural Marketing Service: "I do know that what we want to do is implement the law in accordance with the law in a manner that's least burdensome to producers that produces the most information for consumers. And we believe that all parties in the marketing chain, including consumers, want a credible country of origin labeling program where the information can be substantiated."
At the seminar, the problem of record verification was addressed. A possible solution, created by a consortium of academics and producer groups was presented. Under what is being called the Iowa COOL proposal, all U.S. animal producers would keep physical records for country of origin and a signature on a form held by the processor would act as verification. If there was ever a question, wholesalers and retailers could trace the products back through the packer to the producer.
John Lawrence is an extension economist and the Director of the Iowa Beef Center at Iowa State University.
John Lawrence, Director, Iowa Beef Center: "I think one of the questions is, will consumers, when they walk up to that retail meat case, actually have a choice or will it all be product of the U.S.? And anything that's not ends up going through an exempt market such as food service or the small retailers. And so yes, given a choice, they may choose it. They may not be given the choice."
Even though the law won't take effect for more than a year, cattle, sheep and hogs born in the near future will be some of the first to go through the supply chain under COOL.
The USDA hopes to present a proposed rule by September of this year which will be followed by a 90-day comment period. Groups opposing COOL are waiting to see the contents of the final rule before considering any legal action.
For Market to Market, I'm David Miller.