Starting Wednesday, consumers will know exactly where their meats, vegetables, fruits and nuts came from.
Or will they?
The United States Department of Agriculture is requiring a country of origin label, known as COOL, to be put on items sold in retail settings, but the intent of the bill and its vague preliminary parameters is a point of contention between many in the food industry.
COOL became law as part of the 2002 Farm Bill, but implementation was delayed twice for all products except wild and farm-raised fish and shellfish, which went into effect in April 2005. USDA spokesman Billy Cox refused to speculate on the reasons for the delays, but said they were the result of Congressional actions.
Bob Kjelland, director of communication for the North Dakota Farmers Union,
said he believed it was a combination of the meat packing industry, the Bush administration and the USDA's objections to the bill that delayed it for so many years. He added that there are two ways to prevent implementation of a law: delay it or do not provide funding. He cited the numerous clarification hearings throughout the years as a "foot-dragging tactic."
Tom Buis, president of the National Farmers Union, said the first delay was due to the USDA's attempt to impose a rule written to ensure the failure of the bill using scare tactics against retailers, producers and others. He said the USDA made it seem that "every farmer had to have a birth certificate, passport and nanny for every animal on the farm."
The second delay, he said, was a combined effort by industry lobbyists and the Bush administration, but the political shift in Congress in 2006 paved a way towards implementation under Nancy Pelosi and the Democrats. After the elections, Buis said, he met with numerous organizations in the industry to work out a compromise that all sides could agree upon.
The original COOL requirements only covered beef, lamb, fish, pork, peanuts and fresh and frozen fruits and vegetables. But the 2008 Farm Bill expanded the list of covered items to include ground meats, chicken, goat meat, macadamia nuts, pecans and ginseng. Other changes from the 2002 bill included a reduction in the civil penalty amount, the specific requirements of multi-country labeling and wording detailing the individual's and the company's responsibility to comply. The 2008 Farm Bill was passed in June, guaranteeing the use of COOL in the U.S. retail food market, but as the deadline approaches for implementing the law, the 'correct' use of single and multiple country origin labels is again being debated among the different food industry groups.
"They (industry leaders) signed on the dotted line with me, but are now going against their word and playing the deception game," Buis said.
National and state farmers unions along with other organizations believe, "large meat processors intend to circumvent both the intent of the law and spirit of the compromise by placing exclusively born, raised and processed U.S. animals in the 'multiple countries' category," according to a NDFU news release.
Kjelland explained that meat packers sometimes buy animals from Canada because they are cheaper and bring them back to the U.S., mixing them in with their U.S.-raised population. When the meat is ground, it is possible that a blending of U.S. and Canadian animals results, so meat packers will use a dual or North American label. Kjelland said that some, but not all, meat-packing companies plan to adhere to this practice. Of those that are, he said their reasoning is financial and processing convenience, but ultimately they are denying consumers' preference.
"To allow meat packers to exploit this loophole means USDA is catering to the packers, rather than following the intent of Congress, consumers, farmers and ranchers," NDFU President Robert Carlson said in a news release.
Gary Mickelson, director of media relations for Tyson Foods, said the COOL implementation will be fairly simple for his business' poultry sector because all of the chicken products sold in the U.S. are domestically produced.
"However, it's a much more complex issue for our beef and pork business," he said in an e-mail.
Mickelson quoted a USDA estimate that said roughly 2 million cattle and more than 8 million hogs slaughtered in the U.S.each year by various meat packers come from Mexico or Canada.
"Rather than go to the significant added expense of segregating livestock and finished product, we believe our customers and consumers will be best served if we simply label most of our affected retail products as coming from 'multiple' countries of origin," he said.
Mickelson added that this method will minimize the added cost for packers, producers and retailers, but he said if customers were willing to pay more for "Product of USA'' items, Tyson would make the effort to segregate and label the animals accordingly. Tyson Foods is the world's largest processor of chicken, beef and pork and employs more than 114,000 people worldwide.
Mark Dopp, senior vice president of regulatory affairs for the American Meat Institute, agreed with Mickelson.
"The logistical issues are quite significant and add cost to the entire system," he said.
Dopp added that the flexibility that the USDA's interim rule provided in terms of labeling will reduce total cost to meat packers and will help producers.
The intensity of the cost debate increases when the full cost of the program is addressed.
According to USDA documents, the implementation cost of the program to retailers is $952 million, part of the estimated $2.5 billion total cost across all sectors for the first year. Within 10 years, the USDA estimates the annual maintenance cost for retailers will drop to $247 million, which will cover "the record-keeping burden plus capital, labor and other related costs to manage product flow at the producer, intermediary and retailer levels."
Buis said he does not believe the estimates are accurate. "The cost will be miniscule," he said.
Dopp, on the other hand, said that, "There is a distinct possibility that USDA estimates are low."
He said that when the origin labeling went into effect for the seafood industry, insiders had told him the actual costs of the program were five to 10 times higher than the USDA estimate.
Regardless of the cost, the program is moving forward.
Once in effect, Cox said that the USDA will provide a six month transition period and will be "working with the industry to fully comply with the law." Ultimately, he said, retailers will be responsible for the origin labeling on the products they sell and must work out the details with their suppliers.
The USDA categorized retail businesses into two forms: firms and establishments. Cox said that an example of an establishment would be a Safeway or Walmart, a chain business, while a firm would be an individual grocery store, a nonchain business. The USDA estimates that 4,040 firms and 36,392 establishments will be affected by the new law.
Enforcement of the new mandatory labeling will fall only the USDA's shoulders, but Cox would not give specific details on how they plan to enforce the new legislation, saying only that they will work closely with retailers.
"We take our regulatory responsibility very seriously," Cox said.
He added that any complaints the USDA receives will be fully investigated. The maximum penalty for an infraction is $1,000, reduced from $10,000 that was originally in the 2002 legislation. Retailers and suppliers would have 30 days to take the necessary steps to comply with the law after receiving notice of a violation before the penalty would be enforced.
The food service industry, such as fast food, cafeterias and restaurants, are exempt from the new law as well as the ingredients in processed foods. Items that have been cooked, boiled, cured, smoked or undergone other transformations "that results in a change in the character of the covered commodity" would be exempt according to an interim final rule document released by the USDA's Agricultural Marketing Service department. Examples of this would include breaded items, bags of mixed vegetables and salad kits with dressing packets.
Research done by the USDA has led them to believe, "There is little tangible evidence found to support that consumers' stated preference for COOL information will lead to increased demand for commodities bearing a U.S.-origin label."
Buis said that isn't the driving factor.
"We produce the best quality and safest products, but you can't tell that in retail," he said. "With all of the recent food safety scares, consumers should have the right to know where items are coming from." Buis said he has received support from numerous producer unions, consumer organizations and watchdog groupseven the bilateral support of Congress.
Dopp disagreed.
"Our position has always been against COOL because, historically, consumers are not willing to support this. If there had been a premium to be made by declaring the origin, it would have been done by now," he said.
He added that if customers demand a certain attribute, like hormone-free meat, the market responds, but he said the demand is not there for origin labeling.
Only time will tell how the program will effect the food industry and consumers. Original plans permitted a year of market analysis before all of the laws were to be written, but Buis said Ed Schafer, the United States secretary of agriculture and former governor of North Dakota, has hinted that the finalization will take place by the end of the Bush administration in January 2009.
"If the USDA messes this up, we will be back.We are up against powerful forces, but we have the bipartisan Congress with us. Next year, when Congress comes back, we will get the legislative changes needed to ensure consumers get all of the information," he said.
