COOL serves as a wedge
By Greg Henderson
| Wednesday, March 19, 2003
Country-of-origin labeling (COOL) is either the worst piece of legislation Congress has ever saddled onto livestock producers, or it’s the best. Either way, the debate over COOL’s merits, or lack thereof, has intensified dramatically in recent weeks, and stands to be one of the industry’s most divisive issues.
Last year Congress included country-of-origin labeling of various food commodities, including beef products, in the 2002 Farm Bill. The phase-in plan calls for voluntary labeling until Oct. 1, 2004, when COOL becomes mandatory. Since the law was passed last spring, opposition to COOL has increased, and both pork and beef producers have come to realize that the law is complex and has many unintended ramifications.
COOL was a major topic of discussion and debate during the National Cattlemen’s Beef Association convention in Nashville earlier this year, and most of what producers heard did not favor the new law. COOL regulations, producers were told, will be expensive and increase their risk of liability. Under COOL, American cow-calf producers and feeders will be expected to maintain records or “audit trails” that prove where their cattle were born and raised. Keeping such records will add to the costs for every segment of the supply chain, according to analysts. Also, those who finish cattle procured from Canada or Mexico will not be producing U.S. beef, despite the use of U.S. technology and management.
Those who support COOL believe that mandatory country-of-origin labels on beef products will improve the competitiveness of American beef. They believe consumers should be able to readily distinguish between imported beef and that which is produced and processed in the United States.
Debate over the COOL legislation intensified last month when a USDA estimate of the program’s costs were said to be inflated. USDA filed a Federal Register notice last November claiming that full implementation of the initial voluntary stage of the program would cost $1.97 billion per year to implement, including the cost to producers. Rep. Mary Bono (R-Calif.) and 35 other House members wrote USDA Secretary Ann Veneman saying the cost estimates were “grossly over-inflated.” Rep. Bono and her colleagues wrote, “Not only does USDA fail to account for origin labeling already required in several states, but it factors in costs for regulations currently mandated by USDA itself.” The lawmakers also told Secretary Veneman, “We believe a more thorough examination of actual COOL implementation in states like Florida provide a more valid cost-estimate model.”
Independent of USDA’s cost estimates, the U.S. pork industry says they stand to lose $1 billion through COOL. A report on COOL’s impact by economists Dermot Hayes, Iowa State University, and Steve Meyer, Paragon Economics, says the traceback requirements of COOL will increase farm-level production costs by 10 percent, or about $10.22 per hog. The National Pork Producers Council, which requested the report, will work to stop the implementation of COOL.
The National Cattlemen’s Beef Association’s formal policy supports a voluntary COOL system, and no changes to that policy were made during their convention. However, a resolution was passed to request congressional hearings to investigate the impacts of COOL.
For their part, consumers appear more willing to pay extra for values such as product quality and food safety than they do for country-of-origin labeling.
Whether COOL is good legislation or bad remains debatable. What’s certain is that COOL is serving as a wedge that is being driven between pork and beef producers and their established national organizations, and that’s a scenario where everyone loses.
