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    USDA Issues COOL Regulations; Industry Responds

    WASHINGTON - After presiding over numerous fact-finding discussions with more than 70 different trade and producer groups, the U.S. Agriculture Department yesterday issued its proposed rules for the congressionally mandated country-of-origin labeling (COOL) program that was required by the 2002 Farm Bill.

    WASHINGTON - After presiding over numerous fact-finding discussions with more than 70 different trade and producer groups, the U.S. Agriculture Department yesterday issued its proposed rules for the congressionally mandated country-of-origin labeling (COOL) program that was required by the 2002 Farm Bill.

    Opponents of the controversial law, which will go into effect next year unless Congress overturns it, issued statements yesterday denouncing the high costs and negligible benefits of the law that they ultimately want repealed.

    In the proposed rule, the USDA laid out the costs of record-keeping for the first year of the program, estimating it to be at least $582 million for producers, processors, and retailers. USDA's announcement, which will be officially published in the Federal Register this Thursday, also found virtually no benefits from possible consumer demand for labeling.

    Comments were quickly issued by leaders of some of the industry's largest trade associations -- including the Food Marketing Institute, the Grocery Manufacturers of America, and the United Fresh Fruit and Vegetable Association.

    For FMI's part, at up to $3.9 billion, "the price tag to implement the country of origin labeling law -- with no clear benefits -- is unacceptable to consumers and the industry. The only reasonable recourse is to repeal the statute," according to Tim Hammonds, FMI president and c.e.o.

    "Under the regulations growers, ranchers, retailers, and others are still subject to $10,000 fines for the inevitable mistakes in trying to implement a law grounded in quicksand," Hammonds said, noting that the entire industry must still track, segregate by country, and document the millions of shipments each year of every fresh and frozen fruit and vegetable; every cut of beef, pork, and lamb; and every fish and peanut.

    "The regulations will reduce product assortment as the industry is forced to provide more space in feedlots, trucks, warehouses, and stores to separate products by country. It will dramatically increase costs for the segregation and record-keeping required," Hammonds continued.

    David Stafford, GMA's director of federal affairs, said: "USDA has made some changes to its proposed regulations for country-of-origin labeling, but the rules still constitute a needlessly burdensome and costly regulation for the USDA, the food industry, and, ultimately, the consumer."

    Furthermore, contrary to the intent of Congress and existing rules defining processed foods, Stafford said the USDA continues to push for an overly restrictive definition of the labeling exemption for processed food.

    Tom Stenzel, president of the UFFVA, which includes a membership base that both favors and opposes the law, said his organization will continue to review the proposed rule and examine whether the USDA has responded to the association's many concerns and determine whether the benefits of the rule would outweigh the costs for its members.

    In his statement, Stenzel commended both backers and opponents of the law for helping generate a thorough analysis and dialog within the industry while noting that the UFFVA's actions on any topic with significantly differing member views cannot please everyone.

    Stenzel said because of the importance of reviewing the complexity of the proposed rule, the UFFVA will not have any immediate comment on the rule, but will work as quickly as possible to analyze the proposed rule, solicit member views and recommendations, and determine appropriate next steps.

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