COOL agreement

TK: From United/PMA, this joint announcement breaks the latest on COOL negotiations. Not the industry's earlier compromise, but a much better mandatory law than was in place before.

Industry Negotiates Key Improvements to COOL in U.S. House Farm Bill
Country of Origin Labeling to Go Into Effect September 30, 2008

As part of the 2007 Farm Bill to be considered by the U.S. House of Representatives tomorrow, the produce, meat and retail industries have negotiated important improvements to reduce the regulatory burden and cost of the country of origin law now on the books.

United Fresh and PMA have worked together for the past several years with a coalition of produce associations and the retail supermarket industry to find common ground that would deliver country of origin information to consumers, without the burden of the law first passed in 2002. Implementation of that law had been delayed twice by Congress based on industry concerns about its unintended consequences and cost. In September 2006, these organizations reached a compromise agreement that we have advanced with Members of Congress.

Since that time, the environment to consider country of origin labeling has changed significantly, fueled by recent food safety issues such as the Chinese import situation. Many key members of Congress have made known that they would not allow further delay in the 2002 law, and instead urged all parties to negotiate any improvements that they felt needed in the law. Their bottom line was that mandatory COOL for meat and produce would go into effect on September 30, 2008, but they were willing to consider improvements in the law if consumer groups, meat and produce suppliers, and retailers could agree.

With the oversight of the House Agriculture Committee, representatives of the meat, produce, and retail industries have negotiated over the past week a series of compromises with consumer and farm groups. Yesterday, a number of produce stakeholder organizations reviewed the proposed changes to the law and endorsed an agreement to move forward with mandatory COOL with the following changes that will be included in the Farm Bill:

1. Significantly reduced penalties for mistakes in labeling at point of purchase, including a “good faith” standard that reduces the liability for retailers unless shown to be disregarding or willfully violating the law. This helps ease the burden on retailers, so long as they are working to comply with the law. Note that produce suppliers must provide country of origin information to retailers, and the truthfulness of that declaration is still subject to PACA law.
2. Retailers would not be liable for misinformation provided by suppliers, which should eliminate the need for retailers to audit their suppliers to ensure compliance.

3. No new record-keeping. Normal records kept in the regular course of doing business are sufficient to comply with the law. This is an important relief from the original law that threatened an extreme cost burden on the total supply chain.

4. A specific provision to allow labeling of a U.S. State, region or locality in which a product is produced to meet label standards as product of U.S. Therefore, a descriptor such as Minnesota Grown or Pride of New York would be sufficient labeling to comply with law. Produce suppliers and retailers across the industry strongly advocated for this change due to the many marketing programs and state/regional affiliations currently appearing in produce labeling.

With these provisions agreed to through tough negotiations with farm and consumer groups under the direct supervision of Congressional leaders, our associations will support these changes throughout Farm Bill consideration. Of course these changes are not law until finally passed by Congress and signed by the President which we expect to occur by the end of the year. But, given the current state of negotiation on these issues, all parties believe these agreements are likely to hold through the process.

Because our associations have worked closely on this issue for several years, we are issuing this joint information alert to members of both associations. We would like to publicly acknowledge the work of United Fresh in negotiating these agreements with other stakeholders in Washington, DC, and PMA in assessing the impact of various specific proposals considered throughout the process. In addition, we would like to thank the many produce associations and the Food Marketing Institute for working together to find common ground on what has been one of the more contentious issues facing the produce supply chain in many years. The next step will be to focus on the regulatory process at USDA as the Department develops the “rules of the road” to implement COOL in a way that provides useful information to consumers with minimal cost and negative impact on the total produce supply chain.


Tom Stenzel
President - United Fresh Produce Association

Bryan Silbermann
President
Produce Marketing Association