Editor's note: The information provided here does not comment on whether or not the interim voluntary rule for country of origin labeling is good or bad. The intent is to provide the most current information available, and what the 2002 Farm Bill and the Interim Voluntary Guidelines indicate will be required to comply with the law.
THE LAW
It is a retail labeling law.
Important provisions of the law include:
• Section 282(a)(1) “A retailer of a covered commodity shall inform consumers, at the final point of sale ... of the country of origin of the covered commodity;”
• Section 282(a)(2)(A) For beef to be labeled as U.S. beef, it must be “exclusively from an animal that is exclusively born, raised and slaughtered in the United States;”
• Section 282(d) “The Secretary [of Agriculture] may require that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable recordkeeping audit trail that will permit the Secretary to verify compliance with this [law];”
• Section 282(e) “Any person engaged in the business of supplying a covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity;”
• 282(f)(1) “The Secretary shall not use a mandatory identification system to verify the country of origin of the covered commodity;”
• Section 284(b) “Not later than September 30, 2004, the Secretary shall promulgate such regulations as are necessary to implement mandatory country of origin labeling;”
• Section 284(c) “the Secretary shall, to the maximum extent practicable, enter into partnerships with States with enforcement infrastructure to assist in the administration of this law.”
RETAILERS
• Retailers who buy or sell $230,000 per year in fresh or frozen fruits and vegetables must comply with the law.
• Each store must keep records documenting country of origin for all covered commodities for two years.
• Retailers found in willful violation of the law can be fined up to $10,000 per violation.
PACKERS
• Packers must keep records documenting country of origin for two years.
• Packers found in willful violation of the law are subject to fines of $10,000 per day, per violation.
• The current USDA document is for voluntary guidelines.
• The final rule must be in place by Sept. 30, 2004.
• USDA, in concurrence with NCBA member policy, will hold listening sessions in 12 states.
USDA’s role
• USDA will enforce the mandatory program to be implemented by regulation by September, 30, 2004.
• USDA will not prescribe the paperwork for the program, but will require a verifiable recordkeeping audit trail.
• USDA may not create a mandatory animal ID program to enforce the program.
USDA March 5 said it is planning a series of listening and educational sessions in various parts of the country to gain more public input and provide interested parties information about the new country of origin labeling law contained in the 2002 Farm Bill.
The listening and educational sessions will take place in 12 states representing a cross-section of the food and agriculture sector. Those states are: California, Florida, Louisiana, Minnesota, Missouri, Montana, Nebraska, North Carolina, Pennsylvania, Texas, Washington and Wyoming.
AMS will announce specific dates and locations for these forums in the near future.
Voluntary and Mandatory
Many involved in the beef industry are concerned about being in compliance with country of origin regulations by September 30, 2004, especially since violations can result in fines. As such, the draft voluntary guidelines published in October 2002 are being used by some as a blueprint for what the mandatory regulations will look like in 2004.
The voluntary guidelines as published by USDA are not the final regulations. The mandatory rule could change as producers and interested parties make comments to USDA during the rulemaking process. To be able to make changes to the final rule, it is critical producers have a clear understanding of USDA’s flexibility under the law. That information can be learned at USDA’s listening sessions.
USDA Rulemaking
To create the mandatory rules, USDA must go through the rulemaking process required under the Administrative Procedures Act. When USDA published the voluntary guidelines, they indicated that they would begin the rulemaking for the mandatory rules in April 2003. USDA must take the following steps:
1. USDA will likely publish an Advanced Notice of Proposed Rulemaking. The publication of this document in the Federal Register notifies the public that USDA will be writing these rules. When USDA publishes this in the Federal Register, it likely will be followed by a comment period, the length of which is to be determined.
2. Then, some time will lapse, maybe 30 to 60 days, while USDA does its internal work.
3. The Proposed Rule on mandatory country of origin labeling will be the next item published in the Federal Register. This Proposed Rule will be the first look that anyone has on what the mandatory regulations will be. This proposed rule will be followed by a comment period, most likely 60 to 120 days.
4. Once this comment period closes, USDA will review the comments internally and develop the final mandatory rule.
5. USDA must publish the Final Rule in the Federal Register by Sept. 30, 2004, to meet the requirements in the statute.
You can share your views:
• directly with USDA
• directly with NCBA, or
• directly with the local or state cattlemen’s association to which you belong.
Q & A on Country of Origin with USDA
The following questions were submitted to Barry Carpenter, deputy administrator, Livestock and Seed Program, Agricultural Marketing Service. The questions were formulated by the faculty at California State University, Chico, based on issues that had been asked by producers.
1. Why should I worry about calves born in Spring 2003?
USDA cannot dictate when a producer must begin keeping records documenting the country of origin for a covered commodity (in this case calving records).
However, the regulations for the mandatory program will be published no later than September 30, 2004 and a verifiable audit trail must exist for all covered commodities offered for retail sale under those regulations.
Producers may want to check with their sales points to determine what documents and on what date these buyers will require such documentation to assure their compliance with the September 30, 2004 requirement.
2. What does a verifiable audit trail mean?
The law stipulates that, “The Secretary may require that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable record keeping audit trail that will permit the Secretary to verify compliance…” To do so, each segment of the supply chain of a covered commodity must maintain records that will permit enforcement authorities to verify, back through the supply chain, that the country of origin claim, as it appears at the retail location, is accurate.
The “audit trail” is the existence of such records that can be tracked back through each segment of the supply chain. The ability of enforcement authorities to accurately track the country of origin back through the supply chain constitutes verification of the audit trail.
The use of affidavits (or self-certification) without a supporting audit trail would not be verifiable, and therefore would not meet the requirements of the law.
In the case of calves, for instance, records that may constitute a “verifiable record keeping audit trail” would include, but not be limited to: sales or purchase receipts, feed records, calving records, individual cow performance records, ear tag records, ear tag transfer records, in-processing records, and other records related to the movement of livestock.
3. How come I can't use an affidavit to prove I don't import cattle and therefore don't need any other records system?
The provisions of section 10816, “Country of Origin Labeling” (COOL) of Public Law 107-171 (2002 Farm Bill) apply to all covered commodities, including those of U.S. origin.
The Farm Bill requires the Secretary to publish regulations no later than September 30, 2004 to require retailers to inform consumers of the country of origin of all covered commodities (including beef) at the final point of sale, and further specifies that, “Any person engaged in the business of supplying a covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity.”
The law further states that, “The Secretary may require that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable record keeping audit trail that will permit the Secretary to verify compliance …” To assure program integrity and have a meaningful program, retailers and their down-line suppliers will have to maintain a verifiable audit trail on covered commodities to substantiate country of origin labeling claims.
As indicated in the Interim Voluntary Guidelines, published in the Federal Register on October 11, 2003 (which will likely be the basis for the mandatory COOL program), “Any person engaged in the business of supplying a covered commodity to a retailer must make available information to the retailer indicating the country of origin of the covered commodity. Such persons, which include, but are not limited to, producers, growers, handlers, packers, processors, and importers, must maintain auditable records documenting the origin of covered commodities. Self-certification by such persons is not sufficient.”
4. Shouldn’t this law only affect producers who handle cattle from other countries?
The law specifies that, “… a retailer of a covered commodity shall inform consumers … of the country of origin of the covered commodity.” The law is all-inclusive, and requires the country of origin to be specified for all covered commodities, including those of U.S. origin.
The law further states that, “The Secretary shall not use a mandatory identification system to verify the country of origin of a covered commodity.” The law does not provide any authority to identify and track imported cattle.
5. I thought the law said mandatory ID is not required ... how come people are saying I need to ID my cattle?
The law does prohibit the Secretary from using a mandatory animal identification system to verify country of origin of a covered commodity.
It is anticipated that each segment of the industry will develop a system(s) which will most effectively and efficiently provide a verifiable audit trail as required to document the country of origin of a covered commodity. USDA will neither specify how such systems will be structured nor how they will function. However, such systems must provide a verifiable audit trail which documents the country of origin. In some cases, up-line suppliers may choose to require by contract or private-treaty that some form of animal identification must be maintained.
6. If I sell 10 calves at the sale barn, who is responsible for the records associated with those cattle? What forms of ID will be acceptable?
Each segment of the supply chain will be responsible to maintain a verifiable audit trail to document the country of origin of covered commodities.
7. What forms of identification are going to meet USDA requirements?
The answer to this is the same as question 5.
8. Why can’t you just track imported cattle and label everything else as U.S. beef?
The country of origin labeling provision of the Farm Bill applies to all covered commodities. Moreover, the law specifically identifies the criteria that product of U.S. origin must meet. For beef, pork, and lamb, for example, U.S. origin can only be claimed if from animals that are born, raised, and slaughtered in the United States.
The law further indicates: “Any person engaged in the business of supplying a covered commodity to a retailer shall provide information to the retailer indicating the country of origin of the covered commodity.”
And, the law states that “The Secretary may require that any person that prepares, stores, handles, or distributes a covered commodity for retail sale maintain a verifiable record keeping audit trail that will permit the Secretary to verify compliance...”
Taken together, these provisions of the law indicate that the need to document the origin of covered commodities is not limited to imports, and that positive verification of U.S. origin is required. — William T. Sessions, Associate Deputy Administrator, USDA/AMS Livestock and Seed Program
Support voluntary country of origin labeling.
• Request congressional hearings to investigate the impact
• Request USDA hold field hearings to increase awareness about country of origin labeling (NCBA made the request and USDA has agreed to hold them in 12 states; the dates, times and places are to be announced)
• Develop educational and informational messages to inform producers about country of origin labeling (this has begun).
• Work with state cattle associations and related groups to communicate this message (this has begun).
Adopted by the NCBA Board of Directors at the Annual Convention, Feb. 1 - Nashville, Tenn.