Labeling rule called too costly

New labeling requirements to tell American consumers the country of origin for their meat, fish and produce would cost producers, processors and retailers as much as $4 billion a year and could hurt exports, government and industry sources said yesterday.

The Farm Bill of 2002, passed by Congress and signed by President Bush, requires retailers to notify customers of the country of origin of the commodities by next September. The labels are meant to let consumers know where food is grown or raised, and to allow them to choose American products, rather than foreign.

The U.S. Agriculture Department yesterday released a proposed labeling rule, and industry and consumer groups quickly scrambled to denounce or praise it.

The proposed measure has divided much of the farming community and Congress. The Bush administration, some lawmakers and many in the food industry prefer to have a voluntary system replace the mandatory requirements before next year’s deadline.

“The estimated benefits associated with this rule are likely to be negligible,” the department said in a cost-benefit analysis. The estimated first-year cost for growers, producers, processors, wholesalers and retailers — largely for tracking and recordkeeping — ranges from $582 million to $3.9 billion.

The estimated cost to the U.S. economy in higher food prices and reduced food production 10 years after implementation ranges from $138 million to $596 million, the department said.

Country-of-origin labeling is popular among some U.S. producers. Ranchers, for example, use it to help promote and market U.S. beef. But the mandatory regulations are a step in the wrong direction because of high compliance costs, the National Cattlemen’s Beef Association, an industry group, said yesterday.

“Cattlemen are hoping Congress will find a way to rework the law so it helps — not hinders — the profitability of cow-calf producers,” Terry Stokes, association chief executive officer, said in a statement.

National Pork Producers Council President Jon Caspers said the labeling is a trade-protectionist measure that could trigger litigation at the World Trade Organization.

“In today’s global marketplace, where pork producers have just come out from under 18 months of straight losses, we cannot afford to lose even a small percentage of the exports that provide significant value to the U.S. pork industry,” he said.

More than 40 other countries currently have country-of-origin labeling.

Other farm groups think the Agriculture Department proposal would pay for itself and help U.S. farmers.

“About any product you wear, you drive or you buy is labeled with a country of origin. But the products you put in your body are not. We produce the best products in the world, but our customers can’t tell,” said Tom Buis, vice president of government relations at the National Farmers Union, a group that represents family farmers and ranchers.

Costs would run toward the low end of the Agriculture Department analysis, and a 1 percent to 5 percent increase in sales would pay for labeling, he said.

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