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WASHINGTON, D.C. - In a bid to minimize the recordkeeping and labeling burdens imposed upon retailers, wholesalers, and suppliers for proposed country of origin labeling (COOL) regulations, two of the industry's leading trade associations are urging the U.S. Department of Agriculture (USDA) for flexibility to reduce the billions of dollars in compliance costs and burdens in.
While both the Food Marketing Institute (FMI) and the National Grocers Association (NGA) continue to oppose mandatory country of origin labeling in favor of market-driven labeling programs, the organizations filed comments with the USDA earlier this week called for lessening the regulatory and recordkeeping burdens of mandatory country-of-origin labels, as required by the 2002 Farm Bill. The trade groups see the rules as punitive and costly.
"FMI found that the costs to implement seafood COL were approximately 10 times as great as USDA predicted," said Deborah R. White, FMI v.p./associate general counsel. "These impacts are likely to be especially pronounced on smaller companies throughout the supply chain, particularly once mandatory [COOL] is implemented for the full panoply of covered commodities set forth in the statute."
Noting that meat, produce, and peanuts account for almost 92 percent of the commodities covered by the country of origin labeling law, NGA said USDA's estimates for first-year incremental costs related to COOL could be as high as $3.9 billion. The majority of those costs will primarily be borne by retailers and wholesalers, which will result from the new coverage of the beef, lamb, pork, fresh and frozen fruits and vegetables, and peanuts, scheduled to take effect September 30, 2008.
NGA said the federal agency must act to reduce not only the first year costs, but also the annual recurring costs.
"NGA strongly encourages USDA to make maximum use of its regulatory discretion to promote the disclosure of country of origin information on the covered commodities without excessive or unnecessary regulatory and recordkeeping burdens," said Thomas F. Wenning, NGA's s.v.p./general counsel.
N.G.A. also endorsed a letter sent to Secretary of Agriculture Mike Johanns, by House Small Business Committee Chairwoman, Lydia N. Velasquez (D-N.Y.), supporting flexible regulations, who urged the agency to ensure that small businesses are not burdened with unnecessary recordkeeping requirements.
Among NGA's comments to the USDA:
- Requirements for markings of country of origin declaration and method of production should be flexible.
- Recordkeeping requirements should be minimal and based upon records that are kept in the normal course of business.
- USDA should only require retailers to maintain the country of origin for covered products in the retail store for as long as the product is on hand.
- USDA should require the original suppliers of covered products to substantiate the chain of custody and the accuracy of country of origin information.
- Processed food items should be exempt.
- Time needs to be allotted for products produced prior to a specified implementation date to clear the channels of trade.
NGA said any consideration of final regulations by USDA will likely be delayed and have to be changed if the legislation revising the country of origin labeling requirements is passed by congress in the Farm Bill.
Among FMI's comments to the USDA:
- Recognize that "good faith efforts" on the part of retailers should preclude the agency from issuing fines.
- Allow a reasonable implementation period for all the covered commodities.
- Simplify and clarify the recordkeeping requirements.
- Permit simple country of origin declarations, allowing recognized abbreviations such as U.K. and not requiring the term "Product of" on the label describing the origin.
- Expand the exemption for "processed food items" to recognize certain value-added items such as pre-cut and prepared fresh produce.
"If the language passed by the House in the 2007 Farm Bill survives the legislative process and becomes law," said FMI's White, "we will comment on the regulations proposed to implement that statute. In case, however, the current law remains unchanged these comments should enable the agency to implement the most reasonable final regulations possible."