Country of Origin Labeling
Program Basics
Under Mandatory Country of Origin Labeling (COOL), retailers at the point of sale to consumers are required to label selected food products with country of origin information. Food service establishments like restaurants, cafeterias and food stands are exempt from the COOL labeling requirements.
“Covered commodities” include muscle cuts of beef, lamb, and pork; ground beef, ground lamb, and ground pork; farm-raised fish and shellfish; wild fish and shellfish; perishable agricultural commodities (fresh fruits and vegetables as defined by the Perishable Agricultural Commodities Act), peanuts, chicken, goat meat, ginseng, pecans and macadamia nuts. There is an exemption for a covered commodity if it is an ingredient in a processed food item.
COOL was originally enacted in the 2002 Farm Bill and assigned to USDA’s Agricultural Marketing Service (AMS) to administer. AMS issued a controversial proposed rule for mandatory COOL in 2003. Supporters of mandatory COOL contended that the 2003 proposed rule’s cost estimate for implementing the program was hugely inflated and inaccurate.
The meatpacking sector, many other food handler and processor associations, and many food retailer associations opposed the 2002 Farm Bill’s mandatory COOL provision. These groups were successful in persuading Congress to delay implementation of mandatory COOL through legislative “riders” on Appropriation bills. As a result, mandatory COOL was implemented only for wild and farm-raised fish and shellfish in 2005, with mandatory requirements for other covered commodities ultimately delayed until September 30, 2008.
2008 Farm Bill Changes
The debate over mandatory COOL in the 2008 Farm Bill was preceded by the detection of numerous contaminates in imported food products, particularly products imported from China. An additional concern was the continuing detection of bovine spongiform encephalopathy (BSE or mad cow disease) in Canadian cattle. These headlines tipped the balance in favor of proceeding with mandatory COOL.
The 2008 Farm Bill amended the list of “covered commodities” to include chicken, goat meat, ginseng, pecans and macadamia nuts.
The farm bill modifies the COOL labeling requirements for beef, lamb, pork, chicken and goat meat as follows:
- A label that designates only the U.S. as the country-of-origin for a covered commodity can be applied only to an animal that was exclusively born, raised and slaughtered in the U.S., except that animals born and raised in Alaska and Hawaii which are in transit outside the U.S. for not more than 60 days can also be labeled only with a U.S. country-of-origin label. In addition, animals that were present in the U.S. on or before July 15, 2008 and have remained in the U.S. may also use only the U.S. country-of-origin label;
- Covered commodities from the listed animals that are not exclusively born, raised or slaughtered in the U.S. and are born, raised or slaughtered in other countries may have a label that designates all the countries where the animal was born, raised or slaughtered. Animals that are imported into the U.S. for immediate slaughter can be labeled with the country from which the animal was imported and the U.S.; and
- For ground meat and poultry products from beef, lamb, pork, chicken and goats, the products must be labeled with a notice of origin for all countries of origin or for all “reasonably possible” countries of origin.
Perishable agricultural commodities, ginseng, peanuts, pecans, and macadamia nuts may have only the U.S. country-of-origin label if the product is exclusively produced in the U.S. In addition, labels designating exclusive production in a U.S. state, region or locality can be used instead of the U.S. country-of-origin label.
The labeling provisions for U.S. farm raised fish and wild fish harvested or processed in U.S. or U.S. territorial waters or in U.S. registered vessels remain the same.
USDA may conduct an audit of any entity that prepares, stores, handles or distributes a covered commodity for retail sale in order to verify compliance with mandatory COOL. But USDA may not require records of country of origin other than those maintained in the “normal course of business.”
The 2008 Farm Bill drastically reduces the applicable fines for not complying with mandatory COOL from a maximum of $10,000 for each violation to only $1000 per violation. Retailers are also given a 30-day time period to comply, receive a violation notification, and are provided with an opportunity to appear before USDA in a hearing to defend themselves.
Legislative Authority
Section 11002 of the Food, Conservation, and Energy Act (FCEA) of 2008 amends subtitle D of the Agricultural Marketing Act of 1946, to be codified at 7 U.S.C. Sections 1638-1638d.
Funding
The 2008 Farm Bill does not provide specific funding for mandatory COOL implementation. Administration of the program will be funded through annual AMS appropriations.
Implementation Basics
On August 1, 2008, USDA issued an interim final rule for mandatory COOL based on legislative changes in the 2008 Farm Bill, along with a request for public comments until September 30, 2008 – the effective date for the interim final rule. This interim final rule was followed by a final rule issued on January 15, 2009, which was scheduled to take effect on March 16, 2009
The final rule retains provisions from the interim final rule that raised concerns among supporters of mandatory COOL. The rule provides that the muscle cuts of covered meat and chicken products can be labeled with a multiple country of origin label rather than an exclusive U.S. country-of-origin label, even if the animal was born, raised and slaughtered exclusively in the U.S. This will allow meat and chicken companies to give U.S. consumers the impression that no meat and chicken is produced exclusively in the U.S.
USDA also gives a broad interpretation to the term “processed foods” in the rule. A covered commodity used as an ingredient in a processed food is exempt from mandatory COOL. In the interim final rule, USDA provides as an example of an exempted “processed food item” frozen carrots and peas imported in bulk and mixed in the U.S. Another example is minor processing or commingling with other food items. For example, plain pork chops would require COOL labeling but not pork chops stuffed with filling.
The final rule addressed requirements for records considered sufficient to establish the country-of-origin at retail. For livestock, the final rule provides that an affidavit from a livestock producer specifying the country-of-origin is a sufficient record for a meatpacker or other supplier to rely on, if the affidavit is made by someone having first-hand knowledge of the origin of the animals and identifies the animals unique to the transaction.
Meatpackers may also use an animal eartag that has an 840 Animal Identification Number, used by the National Animal Identification System (NAIS), as sufficient to identify the animal with the tag as born and raised in the U.S.
The final rule did not include the proposal in the interim final rule to use as verification of country-of-origin labeling participation in a USDA Quality System Verification Program, such as the National Organic Program.
USDA Contact Information
The Agricultural Marketing Service (AMS) website for mandatory COOL is http://www.ams.usda.gov/COOL.
The Economic Research Service (ERS) also has a website for COOL economic issues at: www.ers.usda.gov/features/cool/
USDA Contact for Mandatory COOL: Kenneth M. Becker, Acting Program Manager, Country of Origin Labeling Program, USDA-AMS, 202-720-4486, email: Kenneth.Becker@ams.usda.gov.