UPDATED: USDA Proposes Rule to Amend Labeling Under COOL, Industry Repsonds

ANALYSIS — The US Department of Agriculture (USDA) has issued a proposed modification to the rules required for the labeling of muscle cut commodities covered under the Country of Origin Labeling (COOL) program, writes Sarah Mikesell, 5m senior editor.
calendar icon 11 March 2013
clock icon 5 minute read

Under the proposed rule, origin designations for animals slaughtered in the US would be required to specify the production steps of birth, raising, and slaughter of the animal. In addition, this proposed rule would eliminate the allowance for any commingling of muscle cut covered commodities of different origins.

The changes are designed to provide consumers with more transparency by providing specific information about muscle cut covered commodities.

“USDA expects that these changes will improve the overall operation of the program and also bring the current mandatory COOL requirements into compliance with US international trade obligations,” said Agriculture Secretary Tom Vilsack.

The proposed rule would modify the labeling provisions for muscle cut covered commodities to require the origin designations to include information about where each of the production steps (i.e., born, raised, slaughtered) occurred and would remove the allowance for commingling of muscle cuts.

In June 2012, the Appellate Body of the World Trade Organization (WTO) affirmed an earlier WTO Panel decision finding that the United States’ COOL requirements for certain meat commodities discriminated against Canadian and Mexican livestock imports and thus were inconsistent with the WTO Agreement on Technical Barriers to Trade. The United States has until May 23, 2013, to come into compliance with the WTO ruling in COOL.

Notice of the proposed rule will be displayed in the March 11, 2013 Federal Register and can be viewed at http://www.federalregister.gov/public-inspection. Comments must be received by April 11, 2013.

Under COOL, retailers must provide their customers with information about the origin of various food products, including fruits, vegetables, fish and shellfish and meats. Mandatory COOL requirements help consumers make informed purchasing decisions about the food they buy.

COOL was passed as a part of the Farm Security and Rural Investment Act of 2002 and amended in the 2008 Farm Bill, going into effect in 2008, with regulations being put forward in 2009.

In 2012, USDA and its state cooperators conducted more than 3,800 compliance reviews of retailers. These reviews established an estimated 98 per cent compliance rate for commodities under COOL.

The National Farmers Union (NFU) was quick to hail the proposed changes to COOL rules.

"The proposed rule changes released by OMB are an excellent response to decisions by the World Trade Organization that called for changes to our COOL implementation," said NFU President Roger Johnson. "By requiring further clarity in labels and stronger recordkeeping, the set of rules released today are a win-win for farmers, ranchers and consumers."

In February, NFU and other groups released a legal analysis that detailed the available options for successful US compliance of the WTO's ruling on COOL. The analysis concluded that an effective way of complying with the WTO decision was to provide more information and more accurate details to consumers.

It would not require producers or processors to collect additional information; nor would it increase food cost to consumers as the Office of Management and Budget determined the changes are not economically significant.

The new labeling is not being praised by all of industry. The American Meat Institute says the proposed rule will make current costly, cumbersome requirements even more onerous and disruptive.

“Only the government could take a costly, cumbersome rule like mandatory country-of-origin labeling (COOL) and make it worse even as it claims to ‘fix it.’ That’s exactly what they are doing with a new proposed rule that purportedly aims to bring the law into compliance with US obligations under the World Trade Organization," said AMI President J. Patrick Boyle.

"The proposed rule is even more onerous, disruptive and expensive than the current regulation implemented in 2009. Complying with this proposal, should it become mandatory, will create more excessive costs that will be passed onto consumers. An absurd example of one of the proposed changes is this: a plant or grocery retailer that currently labels its product, “Product of the US” would now have to change the labels on its packages to read, “Born, raised and slaughtered in the US,” he added.

Boyle said in AMI's view, the mandatory COOL labeling is conceptually flawed.

"The anti-free trade objectives of this labeling scheme’s proponents are no secret. Requiring us now to provide even more information at a greater cost when evidence shows consumers, by and large, are not reading the current country-of-origin information is an ill-conceived public policy option,” he concluded. 

The National Cattlemen's Beef Association (NCBA) maintains that there is no regulatory fix that can be put in place to bring the current COOL rule into compliance with the World Trade Organization (WTO) obligation or that will satisfy the US's top two trading partners: Mexico and Canada, and the UDSA amended rule proves that to be true.

"The proposed amendments will only further hinder our trading relationships with our partners, raise the cost of beef for consumers and result in retaliatory tariffs being placed on our export products," said NCBA President Scott George. "The requirement that all products sold at retail be labeled with information noting the birth, raising and slaughter will place additional recordkeeping burdens on processors and retailers, contrary to the administration’s assertion."

George said this combined with the elimination of the ability to comingle muscle cuts, will only further add to the costs of processing non-US born, raised and slaughtered products.

"The end result will be hesitancy to process imported product and increased instances of less favorable treatment of foreign product, giving our trading partners a stronger case at the WTO,” he said.

Sarah Mikesell, Senior Editor

Sarah Mikesell, Senior Editor

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