Country-Of-Origin Labeling:

Opportunities for USDA and Industry to Implement Challenging Aspects of the New Law

GAO-03-780: Published: Aug 5, 2003. Publicly Released: Sep 10, 2003.

Additional Materials:

Contact:

Robert A. Robinson
(202) 512-9692
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A provision in the 2002 Farm Bill requires grocery stores to identify certain commodities--beef, pork and lamb, fish and shellfish, fruits and vegetables, and peanuts--by country of origin. This provision also requires that an initial voluntary program be followed by a mandatory program by September 30, 2004. GAO was asked to identify existing programs that might be useful to USDA in crafting the new program, to update a 1998 USDA survey of major U.S. trading partners' country-of-origin labeling practices, and to assess the reasonableness of the assumptions and methodology USDA used for estimating first year record-keeping costs.

Several existing programs may be useful to USDA as models in implementing the new country-of-origin labeling law, including USDA's school meals programs and the Department of Defense's Subsistence Prime Vendor Program, which rely on contract certifications and compliance visits to verify origin. Florida's experience with its labeling program may be useful in providing marking options and for using a state's existing enforcement infrastructure to help administer the new law. Within industry, the fee-for-service meat grading programs and origin-identity programs, such as Vidalia onions, use affidavits from growers/producers to verify origin. However, as models, these programs have limitations because none was designed to address features of the new law that will present implementation challenges to USDA and industry, including how the law defines "domestic" meat and fish. The meat industry's practice of not routinely maintaining origin identity for imported meat presents a further challenge. Most of the USDA attachis for 57 U.S. trading partners that we surveyed reported that their host countries require country-of-origin labeling for one or more of the commodities covered by the new law. Most countries with programs conduct routine inspections and impose fines for labeling violations. Additionally, practices also varied among the nation's larger trading partners--Canada, Mexico, and Japan. Their own practices notwithstanding, some trading partners view new U.S. identity requirements as possible trade barriers. Survey results stratified by food product and by country are included in a special publication entitled Country-of-Origin Labeling for Certain Foods--Survey Results (GAO-03-781SP), which is available on the Internet at http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. The assumptions underlying USDA's $1.9 billion estimate for the first-year paperwork burden on industry under the voluntary program are questionable and not well supported. They pertain to such things as the extent to which businesses were already keeping records and the cost per hour of developing and maintaining a record-keeping system. USDA has since compiled and published examples of routine records that businesses may already maintain that may be useful to verify compliance. Lastly, FDA proposes a record-keeping mechanism for nearly all food businesses to protect the food supply from intentional tampering, which may be useful for keeping origin records.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: In addition, to ensure an accurate estimate of the paperwork burden on industry for developing a record-keeping system and maintaining records on country of origin for the final rule, the Secretary of Agriculture should direct AMS to work with industry associations to compile more accurate data on hourly rates, approximate number of hours, as well as the approximate numbers of growers, livestock producers, food processors, and other sectors subject to the new law.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: AMS has taken steps that should result in more accurate estimates of the paperwork burden on the affected industries for developing record-keeping systems and maintaining records. USDA has requested and received comments on costs by and within industries and analyzed data compile by others on this cost burden for implementing and maintaining COOL. It also has the actual implementation experience of COOL for 2 years in the fish and shellfish industry and, in November 2006, requested actual industry economic impact data in preparation of issuing the final rule. Finally, in June 2007 AMS reopened comments on the proposed rule implementing COOL for the other covered foods and requested specific comments, data, and other relevant information on whether aspects of the interim fish and shellfish rule would apply to mandatory COOL for these foods. AMS's efforts should result in more accurate estimates, thereby satisfying the intent of our recommendation.

    Recommendation: Because the meat industry has not consistently adhered to the Tariff Act's requirements for maintaining country-of-origin identity after imported meat has been cut or ground, the Secretary of Agriculture should direct the Food Safety and Inspection Service to consult with the Bureau of Customs and Border Protection to develop an approach for informing meat packers and processors of their responsibilities under Tariff Act requirements, with regard to maintaining the identity of imported meat.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: USDA has recognized, but never emphasized, the Tariff act requirement that the meat industry maintain country-of-origin identity on imported meat after it has been cut or ground in the United States. Although USDA occasionally acknowledged that the meat industry might have additional responsibilities under the Tariff act for labeling imported meat, USDA never adopted Customs' (now Customs and Border Protection) position, which was upheld and reinforced through a number of court rulings. Instead, USDA's position is that imported meat is "deemed" to be part of the US meat supply once it has been cut or ground in the United States. The purpose of our recommendation was to ensure that meat packers and processors understood their responsibilities under the Tariff requirements, with regard to maintaining the identity of imported meat. USDA is now planning to implement COOL for beef, lamb, and pork in September 2008. Under the COOL law, meat must be labeled with the country where the source animal was born, raised, and slaughtered, which will satisfy the Tariff act and make USDA's position moot. AMS's October 2003 proposed rule, which was reopened for comments in June 2007, describes several scenarios that could apply to labeling meat with the source animal information when COOL is implemented. When AMS implemented COOL for fish and shellfish in 2005, it included the law's unique and detailed origin identification requirements. We believe that USDA's COOL regulations, when implemented, will satisfy the intent of this recommendation.

    Recommendation: To help industry comply with the country-of-origin labeling law's definitions for U.S. products and other new requirements, the Secretary of Agriculture should direct AMS to collaborate with industry to identify, to the extent practicable, different options or alternative practices for, among other things, developing and maintaining record-keeping systems and labeling covered foods.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: AMS has taken several measures to obtain input from industry to identify options or alternatives for, among other things, developing and maintaining record-keeping systems and options for labeling covered foods, as we recommended. The 2003 proposed rule for country-of-origin labeling (COOL)included a request for further comments from industry on all aspects of the rule's recordkeeping requirements and alternatives for labeling covered foods. AMS has issued Q&A's and met with industry stakeholders on the COOL requirements. In the interim final rule for fish and shellfish, which became effective in April 2005, AMS decided not to prescribe specific requirements on label placement or size in order "to provide industry with as much flexibility as possible." Finally, the COOL compliance guide, issued June 2007, includes many examples of records and activities that industry may use to document origin. COOL implementation for all covered foods, which has been delayed twice, is now scheduled for September 2008.

    Recommendation: To help industry comply with the country-of-origin labeling law's definitions for U.S. products and other new requirements, the Secretary of Agriculture should direct AMS to recognize and address, in the final rules, the extent to which the new law's definition of U.S. products, particularly for meat, fish, and shellfish, differ from the definitions in the Tariff Act of 1930.

    Agency Affected: Department of Agriculture

    Status: Closed - Implemented

    Comments: As we recommended, USDA's Agricultural Marketing Service (AMS) recognized and addressed how the country-of-origin labeling (COOL) law and the Tariff Act differ in their definitions of a US product in its 2003 proposed rule for country-of-origin labeling (COOL), which covers beef, lamb, pork, fish, perishable commodities, and peanuts, and in the 2004 interim final rule for fish and shellfish (the only products implemented, to date). The proposed rule uses language from our report to help explain the Tariff Act requirements and definition of "country-of-origin;" it contrasts that with the COOL requirements for labeling US and imported food. The interim final rule identifies criteria for fish and shellfish products to bear a "United States country of origin" label. The interim final rule clarified the records on different types of fish and shellfish that would provide retailers with credible information on which to base U.S. origin declarations. The June 2007 compliance guide includes a list of the various labeling scenarios for fish and shellfish, which require method of production (e.g., wild vs. farm-raised) labeling as well as country-of-origin.

    Recommendation: Finally, to create a level playing field for the retail sale of meat, fish, and shellfish, the Secretary of Agriculture should consider proposing that Congress include large butcher shops and fish markets among retailers subject to the country-of-origin labeling law through a technical correction to the law.

    Agency Affected: Department of Agriculture

    Status: Closed - Not Implemented

    Comments: We recommended that USDA consider whether there was a need to create a level playing field for retailers and their competitors (butcher shops, fish markets, and small grocery stores) for the foods covered by COOL and, if so, propose that change to Congress. The law directed USDA to use the definition of "retailer" from the Perishable Agricultural Commodities Act (PACA). In the interim rule for fish and shellfish, in response to commenters, USDA responded that "retailer," as defined in PACA, would not include butcher shops, fish markets, and small grocery stores. There was no indication that USDA, in making its determination, considered whether retailers would be at a disadvantage, due to their added costs for implementing COOL and maintaining country-of-origin records.

    Jul 21, 2014

    Jul 9, 2014

    Jul 8, 2014

    Jun 26, 2014

    Jun 25, 2014

    Jun 24, 2014

    Jun 17, 2014

    Looking for more? Browse all our products here