USDA Releases Details of Final Rule on MCOOL

January 12, 2009 06:00 PM
 

via a special arrangement with Informa Economics, Inc.

Some farm group officials wary of flexibility contained in rule

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


USDA on Monday released the final rule on mandatory country-of-origin labeling (MCOOL) required on meat, fish, and commodities under the 2002 and 2008 farm bills.

The final rule will be published in the Jan. 15 Federal Register and will take effect 60 days after publication, on March 16.

Retailers must notify their customers of the country of origin of beef (including veal), lamb, pork, chicken, goat, wild and farm-raised fish and shellfish, perishable agricultural commodities (fresh and frozen fruits and vegetables), peanuts, pecans, ginseng, and macadamia nuts.

The final rule requires covered commodities to be labeled at retail to indicate country of origin. The method of production, wild or farm-raised, must be specified for fish and shellfish.

Exemptions detailed. Ingredients in processed food items are excluded from the rule – the definition of a processed food item is the same as that contained in the interim final rule, USDA said.

Items derived from a covered commodity that has undergone a physical or chemical change, such as cooking, curing, or smoking, or that are combined with other covered commodities or other substantive food components such as chocolate, breading and tomato sauce, as well as sups or canned fish are exempt, USDA said.

The regulation also does not apply to food service establishments, such as restaurants, lunchrooms, cafeterias, food stands, bars, lounges, and similar enterprises.

Penalties. Recordkeeping requirements for retailers and suppliers are outlined in the final rule, which provides for penalties of up to $1,000 per violation for both noncompliant retailers and suppliers, USDA said.

Label details. Specific criteria that must be met for a covered commodity to bear a “United States country of origin” declaration are outlined in the rule.

Provisions for labeling covered commodities of foreign origin, meat products from multiple origins, ground meat products, and commingled covered commodities are also contained in the rule.

Funding for education and training. USDA will make funding available to “accelerate and expand training of state cooperator employees, initiate development of an automated review tracking system, conduct a retailer survey, conduct audits of the retail supply chain, and continue conducting education and outreach activities.”

USDA has cooperative agreements with 42 states on conducting retail surveillance reviews. USDA will conduct reviews in states not covered by cooperative agreements and perform the supply chain audits.
WTO Consultations.

In reaction to the final rule, the National Farmers Union (NFU) said it was disappointed and will seek congressional action if the regulations prove ineffective. "The final rule still contains a loophole that would allow meatpackers to use a multiple countries, or NAFTA label, rather than labeling U.S. products as products of the United States," NFU President Tom Buis said in a statement. "This is misleading to consumers. The intent was to provide country-of-origin labeling, not trade agreement origin of labeling."

USDA said it does not intend for U.S.-produced meat to carry labels saying the meat was from more than one country. However, the final rule allows commingling of meat if a packer handles livestock from more than one country during a day's production, when a plant does not have enough U.S. cattle to process.

The National Pork Producers Council (NPPC) said that, while final rule implementing provides flexibility for the U.S. pork industry, MCOOL still remains a costly and potentially cumbersome statute. “Despite the flexibility provided in the implementing regulation, the law has been estimated to cost the livestock industry $2.5 billion initially and nearly $212 million annually over the next 10 years. Already there is anecdotal evidence that pork producers have incurred higher transportation costs because some packing plants will process only U.S.-origin pigs, and packers are directing Canadian-born pigs to other plants,” the NPPC said in a press release.

USDA estimated the cost at $641 million in 2009 and $506 million a year afterward.

Canada and Mexico have asked for World Trade Organization consultations on COOL requirements. They say it discourages U.S. packers from slaughtering imported animals because of the burden of tracking the origin of carcasses and cuts of meat.

A U.S. government official said the flexibility in the final rule should address concerns voiced recently by Mexico and Canada.

"These final regulations will help to address the concerns we've consistently raised with our American counterparts," Canadian Agriculture Minister Gerry Ritz said in a government release Monday. Specifically, Ritz and International Trade Minister Stockwell Day said the final MCOOL regulations will allow for more flexibility on labeling requirements in the U.S. for meat from animals of U.S. and Canadian origin that are brought together during a production run. Canada has repeatedly raised concerns that COOL could impose unfair costs, especially on Canadian livestock producers, by requiring the segregation of Canadian animals, Day and Ritz said.

The new final rule's provisions "will help to level the playing field for Canadian producers and will strengthen the integrated North American livestock industry,” Day said. "Together with the provinces and industry, we will continue to assess the trade and market impact of this legislation," Day added. "We have built a strong and durable trade relationship over the years with the U.S. and we must more than ever aggressively pursue this already robust relationship during these difficult economic times."

The Canadian Pork Council said in a separate release Monday that it's "cautiously optimistic" regarding the MCOOL final rule and it hoped that will alleviate market uncertainty and allow the market to stabilize. But the pork council stressed that it remains opposed to MCOOL, seeing it as a barrier to trade.

"Canada will continue to monitor the situation and defend Canadian producers through discussions and representations to the U.S. at all levels," the Canadian government said in its release. "There is an increasing body of market information coming from both the U.S. and Canada pointing clearly to MCOOL having seriously disrupted trade in live swine between Canada and the U.S. and we continue to have concerns that market discrimination against imports will persist," said Jurgen Preugschas, president of the Canadian Pork Council, in the group's release. But Preugschas added that "publication of the final rule may alleviate some of the market uncertainty that currently disrupts our U.S.-Canada trade relationship."

Copies of the final rule are online at http://www.ams.usda.gov/COOL.


Comments: MCOOL proponents will go to their favorite lawmakers to seek further changes if the coming implementation of the final rule does not meet their interpretations. Translation: we have not seen the final chapter on this topic.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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