Editorial

Editorial by the Plain Talk "I firmly believe that we must move the timeline up in implementing country of origin labeling on meat products," Larry Diedrich, candidate for South Dakota's lone seat in the U.S. House of Representatives, states on his campaign Web site.

Rep. Stephanie Herseth, who Diedrich will be challenging in November, noted last July that she's disappointed by the House Agriculture Committee's repeal of mandatory country of origin labeling in favor of a voluntary system.

Wednesday, in a debate at the Dakotafest Farm Expo in Mitchell, Sen. Tom Daschle, and his challenger, John Thune, agreed on the importance of country-of-origin labeling as a tool to help South Dakota's cattle growers.

But they blamed each other for the federal government's two-year delay in implementing it.

When you're running for political office, especially in a state like South Dakota, where a good part of the population makes its living by raising and selling livestock, it's oh-so-easy to be in favor of country-of-origin labeling (often reduced to a a simple acronym in ag circles: COOL).

At a time when some public interest groups in South Dakota are claiming that it's time to remove the sales tax on food because nearly one in five children in the state lives in poverty, it's also time for politicians and other proponents of COOL to be honest with us.

There's a good chance, you see, that COOL won't be the big benefit that our U.S. senators, representatives, office-seekers and ag lobbyists say it is.

If made mandatory, the labeling may, in fact, raise the price of American grown beef, pork, fruits and vegetables.

So even if those who wish to see the sales tax on food disappear get their way, their efforts may be nil.

Daschle, Diedrich, Thune, Herseth and Sen. Tim Johnson never mention that when they address farmers, ranchers and consumers.

The intent of COOL is to promote the sale of U.S. meat and other commodities by providing consumers with information regarding the origin of the meat and produce they purchase.

The final version of the farm bill mandates country-of-origin labeling for produce sold at retail stores by October 2004. When Congress approved the farm bill two years ago, President Bush indicated he would sign it.

The House-Senate conference language stipulates that Sept. 30 will be the first day of mandatory country-of-origin labeling for produce.

Until then, labeling has been voluntary, with the secretary of agriculture conducting rulemaking on both voluntary and mandatory guidelines for labeling.

Darrell R. Mark and Dillon M. Feuz of the Department of Agricultural Economics, University of Nebraska note in a 2003 study that sparse information relating to consumers' willingness to pay a premium for U.S. meat, or labeled meat, exists.

The two men have determined that costs to various industries to implement COOL could exceed the benefits they receive from consumer premiums for U.S. meat.

One private industry association estimates that COOL will cost the red meat industry and USDA about $1.06 billion, according to Mark and Feuz.

In other words, it's likely that consumers who someday want to see "made in the U.S.A." stamped on their steaks, chops and roasts will also find something else � a higher price tag.

Costs to implement a practical system for COOL will primarily stem from expenses associated with developing an individual animal identification and traceback system and segregating products in the meat packing industry.

In the beef industry, such a system would likely require that a meat product be traced from the retail outlet downward through the supply chain to the boxed beef cut, carcass, and live animal.

This would require additional information sharing among consumers, retailers, wholesalers, packers, cattle feeders, stocker/growers, and cow-calf operators.

It doesn't take much of a stretch to imagine the bureaucratic nightmare that could easily ensue.

Because COOL enforcement efforts will be directed at retailers, they will likely have to initiate a concentrated industry effort to verify meat as originating in the U.S.

Food producers who originally backed COOL are beginning to realize the costs and liabilities involved.

A study released Oct. 14, 2003, by the Food Marketing Institute indicated that 62 percent of the meat, vegetable, and fruit processors oppose the COOL law in its current form, and want Congress to change or repeal the law before it takes effect in approximately a month.

Last October, the Grocery Manufacturers of America, the American Frozen Food Institute, and the National Food Processors Association testified before a House Agriculture subcommittee in opposition to COOL, warning of the unintended conse-

quences that are likely to result in higher prices for consumers and greater use of foreign ingredients.

Opponents believe they will pick up support for repeal once final regulations are issued and implementation begins. But that is little comfort to retailers who say they will have to make huge initial investments to comply with the law, before it is likely to be changed or repealed.

It is also little comfort to the American Feed Industry Association.

It notes that COOL is creating massive trade problems, particularly with Canada and other long-term trading partners. It is also complicating the trade in feed and ingredients of animal origin, even though the program does not apply.

The association also notes that the regulation is affecting U.S. growers' ability to buy replacement livestock overseas, as well as affecting the labeling, recordkeeping and auditing costs of producers, processors and retailers.

Until procedures for implementing COOL are developed, the effects of the legislation on the beef and pork industries will remain uncertain. How U.S. industry participants, consumers, and U.S. trading partners react to COOL as it is implemented will also be critical to determining whether the benefits outweigh the costs.

Implementation of the mandatory country of origin labeling law will be burdensome for U.S. cattlemen according to a report released last September by the U.S. General Accounting Office (GAO).

While disputing initial costs estimated by the USDA, the GAO concluded "Any procedures AMS (USDA's Agricultural Marketing Service) puts in place to implement country-of-origin labeling will inevitably impose an additional burden on the U.S. meat, fish and shellfish industries."

"This review by GAO confirms that country-of-origin labeling won't be free," said National Cattlemen's Beef Association (NCBA) Director of Legislative Affairs Bryan Dierlam last fall. "Cattle producers and industry groups agree that there is a better way to inform consumers about the origin of their beef than this costly burdensome law.�That's why NCBA has long advocated a different approach to labeling � one that promotes U.S. beef, not burdens U.S. producers."

We encourage our political leaders to be more specific when they address country-of-origin labeling.

If they believe COOL should become mandatory, then please start telling us about how it may begin to affect our pocketbooks.

We suggest our policy makers, especially those stumping on the campaign trail, adopt more of a win-win approach.

Throw your support behind The Food Promotion Act of 2004, which calls for the implementation of a voluntary country-of-origin labeling program. The act directs the secretary of agriculture to establish the voluntary labeling of produce, meat (including beef, pork, veal, lamb) and seafood with country-of-origin information.

The labels are aimed at encouraging consumers to choose American products at their supermarkets.

We believe the act will have largely the same affect as the earlier proposal calling for mandatory labeling � without the burdens to agriculture trade and the added costs to consumers.

The Vermillion Plain Talk editorials reflect the opinion of Plain Talk editor David Lias. You may contact him at david.lias@plaintalk.net

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