COOL controversy heats up
By Greg Henderson  |  Wednesday, November 12, 2003

Late last month, the U.S. Department of Agriculture formally published its proposed final rule governing mandatory country-of-origin labeling (COOL) for meat and other covered commodities. By doing so, USDA renewed the controversial COOL debate and added fuel to the fire by announcing a much-larger-than-expected estimate of the cost to the U.S. food industry—$3.9 billion the first year, plus another $600 million to the overall economy. USDA says COOL will cost the meat and livestock industry $2.4 billion, with $1.7 billion of those costs incurred by the beef industry, $673 million for pork and $32 million for lamb.

Mandatory COOL became law as part of the 2002 Farm Bill and is set for implementation Sept. 30, 2004. Opposition to the law began to grow late last year as packers and retailers came to realize the enormous recordkeeping and verification necessary to comply with the law. The outcry from packers, retailers and many producer groups led USDA to hold more than a dozen listening sessions and discussions with more than 70 trade and producer groups nationwide. Those sessions provided input for the proposed final rule, and USDA will accept comments on the proposal for 60 days.

Despite criticism, COOL has supporters who believe the law will help improve the competitiveness of American products such as beef. For instance, they believe consumers should be able to readily distinguish between imported beef and that which is produced and processed in the United States. And supporters are convinced COOL can be implemented for much less than the estimated costs touted by USDA.

Opponents of COOL, however, believe the law is too costly and unnecessary. USDA found little evidence, for instance, that consumers are willing to pay extra for products with country-of-origin labeling.

Speaking at the Worldwide Food Expo last month in Chicago, Mark Dopp, American Meat Institute senior vice president and general counsel, called COOL “intellectually dishonest.” He believes the issue “is an effort by COOL advocates to dictate how meat should be marketed. They are in effect saying, ‘This is how we want meat to be marketed, even though we do not produce the products and we have already been paid.’”

Other elements of the proposed law are:

• The proposed rule will affect the labeling of meat product derived from animals that have been born in one country and raised in another country.
• The rule stipulates that self-certification of country of origin is not sufficient. “The onus is on the processors to have verifiable records that demonstrate country of origin and the legal access to such records,” Mr. Dopp said. “Many retailers will also likely make this a condition of purchase.”
• The proposed rule asserts federal preemption of state laws, meaning that if any element of a state country-of-origin law varies from the federal laws, the federal laws will prevail.

Many producers and producer organizations are worried that mandatory COOL will also be harmful to producers and consumers because of the added costs. And many believe COOL hands poultry a tremendous advantage over red meat, since poultry is specifically exempt from complying with COOL. Many industry analysts believe COOL will force further consolidation in the production and processing sectors of the beef and other red-meat industries. And COOL is likely to be seen as a trade barrier by America’s trading partners, encouraging retaliation.

Despite concerns of most red-meat-industry organizations and analysts, mandatory COOL looms just 10 months in the future. But given the tremendous impact it can have on America’s largest agricultural industry, the U.S. Congress might do well to consider measures that would modify the proposed law.