Washington Apple Commission: Carlson on paid leave

From the offices of the Washington Apple Commission on July 29:

Washington Apple Commission President Placed on Leave
Wenatchee, WA…The current President of the Washington Apple Commission, Dave Carlson, is going on paid administrative leave as of September 1, 2008, by action of the Board of Directors at a board meeting on July 24. Citing the need to go in “a different direction” the board voted in an 8-1 decision to place Carlson, who has been President since the reorganization of the Commission in 2003, on indefinite leave. The Wenatchee, Washington-based Commission focuses on export promotions in over 30 international markets and will receive $4.8 million in federal marketing access promotion funds for the 08-09 season. Also in the meeting the board estimated the upcoming 08-09 crop at 98.3 million bushel boxes and passed a budget based on a 96 million box crop. In addition to federal funds, Cmmission activities are supported by a $.035/bushel box assessment.

TK: The Packer will develop this story further. Find coverage of this from The Wenatchee World here.

Calendar watching

I've noted that some of our readers are taking the measure of the Fresh Talk calendar at the bottom of the page. Likewise, some organizers of industry conferences are letting me know about coming events and informing me when I've overlooked inclusion.. Please don't hesitate to e-mail me at tkarst@thepacker.com and let me know about events you would like to see listed here. Here is a note from Jim Gorny about a coming workshop:

Please find below a press release from the UC Davis Postharvest and Technology Research & Information Center announcing details regarding our upcoming September 16-18, 2008 Fresh-cut Produce Workshop. This workshop will provide participants with valuable take home information that they can use to address key technical issues, challenges and opportunities in their businesses.

If you would please consider letting your readership know about this important educational opportunity.
Also attached is a workshop brochure with more information about the workshop.

Please contact me if you have any questions.

Best Regards,

James R. Gorny, Ph.D.
Executive Director
Postharvest Technology Research & Information Center
University of California, Davis
Tel: 530.754.9270
Email: jrgorny@ucdavis.edu


TK: You will find information about that event and many others in the Fresh Talk calendar. Click on each item and you will typically find more details about the events.

Doha we hardly knew ye

Everybody - myself included - likes to dog and nitpick world trade talks until they collapse. Now there is plenty of remorse about lost opportunities. Is it really over? Here is some reaction rolling in

From Sen. Tom Harkin:
"U.S. Trade Representative Schwab made a significant offer to reduce trade distorting agriculture payments and other countries should have been more reasonable."

American Farm Bureau Federation's Bob Stallman

"It is regrettable that India and China were not prepared to negotiate improvements in agricultural trade for themselves and other developing countries."

Food fears frustrate global trade

A disagreement pitting the U.S. against China and India over agricultural subsidies remains unresolved as the so-called Doha Round of World Trade Organization talks, which has been dragging on since 2001, has ended as a dud.


From a BBC report:


The main stumbling block was farm import rules, which allow countries to protect poor farmers by imposing a tariff on certain goods in the event of a drop in prices or a surge in imports. India, China and the US could not agree on the tariff threshold for such an event. Washington said that the "safeguard clause" protecting developing nations from unrestricted imports had been set too low.


An earlier Associated Press article detailed how rising food prices worldwide and concerns about food security, particularly among poor nations, were at issue:


China and India were not alone. Faced with rising food prices, a number of developing nations have sought wide loopholes against opening up their farm markets — either by blocking certain strategic products such as rice or grains or through rules that would allow them to raise tariffs sharply if faced with a sudden flood of imports. Farming in the developing world is "not like manufacturing," said Trade Minister Mari Pangestu of Indonesia, the world's fourth most populous country. "It's not a machine you can just turn on or off." Rich and poor countries have clashed repeatedly in the round that was once billed as a recipe for lifting millions of people out of poverty. The trade body is hoping for agreement this week on lowering farm subsidies and industrial tariffs, setting the stage for an overall trade accord by the end of the year. Signs of a breakthrough last Friday were followed by more entrenchment over the weekend."

Cotton, sugar and rice are among commodities China wants to protect with tariffs, no mention of fresh produce.


Finding common ground among nearly 140 WTO member nations is challenging even during times of stability and growth, such as the 1990s, when China's rise as a manufacturing and export power pulled globalization into the mainstream of economic and political debate. (U.S. produce firms in the apple or garlic trade surely remember well in the '90s when Chinese exports pulled down floor prices for their respective products.)


The past decade has seen the rise of resource nationalism, as energy prices have jumped nearly 15-fold since oil bottomed out at $10/barrel in the late '90s. Poorer nations have felt the bite of fuel costs more than developed nations, and no doubt have seen how Russia and Venezuela purged foreign control of their oil resources and boast cash reserves equivalent to hundreds of billions of dollars to show for it.

In a time of economic uncertainty worldwide, nations' inclination to circle the wagons to protect domestic markets is understandable.
But the advance of global trade is a marathon, not a sprint. As trade negotiators plan their next move, the smart money will bet on growing reliance among nations for products and services -- including food.

COOL: Co-mingle among yourselves

Retailers will be allowed to co-mingle produce of various origin in bulk displays, so long as the signage accounts for all possible origins. I'm not sure if consumers will find this approach very appealing, and retailers may take this approach at their own risk, IMHO.

From the interim final rule:


With regard to markings, in addition to the change made by the 2008 Farm Bill with respect to State, region, and locality labels, which is further discussed below, the Agency has made
several changes to provide for increased flexibility in labeling. In general, these changes mirror the changes that were made to the marking provisions contained in the interim final rule for fish and shellfish as a result of comments received on the proposed rule. Many commenters requested the use of check boxes to convey origin information. Other commenters requested that bulk commodities should be allowed to be commingled in bins as long as the signage indicates the countries of origin of the contents of the bin. Numerous other commenters recommended that State and regional designations should be accepted in lieu of country of origin. For a more complete discussion of the relevant comments, readers are invited to review the interim final rule for fish and shellfish. Accordingly, under this interim final rule, the declaration of the country of origin of a product may be in the form of a check box provided it is in conformance with other Federal labeling laws. Also, under this final rule, a bulk container
(e.g., display case, shipper, bin, carton, and barrel), used at the retail level to present product to consumers, may contain a covered commodity from more than one country of origin rovided all possible origins are listed. Under the proposed rule, the use of check boxes was not expressly allowed and covered commodities from more than one origin that were offered for sale in a bulk container were required to be individually labeled. Under the proposed rule, State or regional label designations were not permitted in lieu of country of origin. However, the 2008 Farm Bill, and thus this interim final rule, expressly authorize the use of State, regional, or locality label designations in lieu of country of origin for perishable agricultural commodities, peanuts, pecans, ginseng, and macadamia nuts.

COOL FAQ: What is this all about?

From the USDA interim final rule, the first question: What is required of me?


What are the general requirements of Country of Origin Labeling?
The 2002 and 2008 Farm Bills amended the Act to require retailers to notify their customers of the country of origin of beef (including veal), lamb, pork, chicken, goat, wild and farm raised fish and shellfish, perishable agricultural commodities,peanuts, pecans, ginseng, and macadamia nuts. The implementation of mandatory COOL for all covered commodities except wild and farm-raised fish and shellfish was delayed until September 30, 2008. The law defines the terms “retailer” and“perishable agricultural commodity” as having the meanings given those terms in section 1(b) of the Perishable Agricultural Commodities Act of 1930 (PACA)(7 U.S.C. 499 et seq.). Under PACA, a retailer is any person engaged in the business of selling any perishable agricultural commodity at retail. Retailers are required to be licensed when the invoice cost of all purchases of perishable agricultural commodities exceeds
$230,000 during a calendar year. The term perishable agricultural commodity means fresh and frozen fruits and vegetables. Food service establishments are specifically exempted as are covered commodities that are ingredients in a processed food item. In addition, the law specifically outlines the criteria a covered commodity must meet to bear a “United States country of origin” designation.

PMA plans COOL Webinar

Clearly, our industry associations have been preparing for the day when the COOL interim final rule was released. Here is news from PMA about an education and outreach event in early August:


New COOL implementing regulations to be introduced
via free PMA/Western Growers Webinar

Newark, Del. – Industry members can learn firsthand how to implement the newly-released country of origin labeling (COOL) interim implementing regulations from representatives of the agency that wrote them during a free Webinar scheduled for Aug. 6. The Webinar will feature an in-depth look at the new regulations from U.S. Department of Agriculture (USDA) Administrator Lloyd Day; it is being co-hosted by Produce Marketing Association (PMA) and Western Growers.

Day will present the new regulations – released by USDA July 28 – and explain what companies throughout the supply chain need to do to comply with them. He and other USDA representatives, including Deputy Administrator for Fruit and Vegetable Programs Robert Keeney, will then answer questions from Webinar participants.

“This Webinar will offer industry a first look at the brand new regulations,” said PMA Vice President of Government Relations and Public Affairs Kathy Means. “We know time is of the essence, because COOL labeling has to be in place by Sept. 30.”

“There has been a lot of anxiety and concerns over false starts in the marketplace, so we are glad to provide this opportunity to go straight to the source to find out exactly what to do,” said Western Growers Executive Vice President Matt McInerney.

The Webinar will be held Aug. 6 at 2 p.m. Eastern/11 a.m. Pacific time. There is no charge to participate, but registration is required. The agenda will feature a lengthy question-and-answer period, to give industry participants plenty of time to have their questions aired and addressed. For additional information and to register, visit: http://www.pma.com/webinar/COOL-2-Webinar.html.

Recording of June 24 COOL best practices Webinar now available
A recording is now available on an earlier Webinar on COOL that was also hosted by the two associations. The June 24 Webinar presented draft COOL best management practices that had been developed by a joint task force whose members represent the entire supply chain. Task force chairs Tom Deardorff of Deardorff Family Farms and Mike O’Brien of Schnuck Markets presented the best practices during the June 24 Webinar. That recording and best management practices can be accessed via PMA’s Web site at http://www.pma.com/issues/labeling.cfm and Western Growers’ Web site at www.wga.com.

The task force will review the new interim implementing regulations to determine whether the best management practices should now be updated.

COOL: Affected entities

COOL FAQ:: How will COOL be enforced?

How will COOL be enforced? Who will enforce it? From the USDA's interim final rule:

How will the requirements of this regulation be enforced?
USDA has entered into agreements with States having existing enforcement infrastructure to assist in compliance reviews for fish and shellfish covered commodities. These agreements will be expanded to encompass all covered commodities. USDA determines the number of reviews to be conducted and has developed comprehensive procedures for the compliance reviews. Only USDA is able to initiate enforcement actions against a person found to be in violation of the law. The COOL statute does not provide for a private right of action. USDA may also conduct investigations of complaints made by any person alleging violations of these regulations when the Secretary determines that reasonable grounds for such investigation exist.\

COOL: Preliminary cost impact analysis

How much will COOL cost? The USDA's interim final rule says this about the regulatory impact:


Preliminary Regulator Impact Analysis
Summary of Comments: Numerous comments were submitted stating that USDA underestimated the implementation and maintenance costs of the COOL program. One commenter stated that the implementation costs plus two years of maintenancevcosts totaled $49 million. Another commenter provided anvestimated total implementation cost of $236,000 for planning,vsoftware, training, and capital. It provided an estimated annual maintenance cost of $279,300 for maintenance of hardware/software, operation costs, and packaging. Their
reported net economic impact was -$516,200. A third commenter stated that retailers experienced actual first year implementation costs of $9,000 to $16,500 per store for seafood
labeling, and intermediary suppliers experienced costs between $200,000 and $250,000 per firm. They reported that one retailer saw a $0.07 per pound (less than 2 percent) increase in cost of goods from its suppliers directly attributable to the requirements necessary to comply with country of origin labeling. A fourth commenter discussed the capital expenditures necessary to meet the product segregation requirements for beef and pork slaughter plants. This commenter estimated that cost to exceed $2 billion. The commenter stated their belief that even
with those plants that can be identified as “All-American” and exempt from the segregation requirement, the cost still could exceed $1 billion. Agency Response: While the Agency believes its analysis conducted in the PRIA in 2003 was accurate for that time, the Agency has conducted a new economic impact analysis because economic conditions have changed, updated data are available, and additional commodities have been added. The commodities to be regulated by this regulation are muscle cuts of beef, lamb, goat, pork, and chicken; ground beef, ground lamb, ground chicken, ground goat, and ground pork; perishable agricultural commodities; ginseng; peanuts; macadamia nuts; and pecans.

The results of this updated analysis show estimated first year incremental cost for growers, producers, processors, wholesalers, and retailers at $2.5 billion. The estimated cost to the United States economy in higher food prices and reduced food production in the tenth year after mplementation of the rule is $211.9 million. The Agency also re-estimated the paperwork costs and estimated those to be $126 million in initial and startup costs during the first year and $499 million per year to store and maintain the records thereafter.

COOL FAQ: What are the record keeping requirements of the regulation?

From the USDA's interim final rule, the $64,000 question about record keeping:


What are the recordkeeping requirements of this regulation?
Any person engaged in the business of supplying a covered commodity to a retailer, whether directly or indirectly, must maintain records to establish and identify the immediate previous source (if applicable) and immediate subsequent recipient of a covered commodity for a period of 1 year from the date of the transaction. In addition, the supplier of a covered commodity that is responsible for initiating a country(ies) of origin claim, which in the case of beef, lamb, chicken, goat, and pork is the slaughter facility, must possess or have legal access to records that are necessary to substantiate that claim. In the case of beef, lamb, chicken, goat, and pork, a producer affidavit shall be considered acceptable evidence on which the slaughter facility may rely to initiate the origin claim, provided it is made by someone having first-hand knowledge of the origin of the animal(s) and identifies the animal(s) unique to the transaction. USDA continues to look for ways to minimize the burden associated with this rule. Therefore, under this interim final rule, slaughter facilities that slaughter animals that are part of a National Animal Identification System (NAIS) compliant system or other recognized official identification system (e.g., Canadian official system, Mexico official system) may also rely on the presence of an official ear tag and/or the presence of any accompanying animal markings (i.e., “Can”, “M”), as applicable, on which to base their origin claims. This provision also applies to such animals officially identified as a group lot. For retailers, records and other documentary evidence relied upon at the point of sale by the retailer to establish a covered commodity’s country(ies) of origin must be maintained for one year from the date the origin declaration is made at retail and, upon request, provided to any duly authorized representatives of USDA within 5 business days of the request. For pre-labeled products, the label itself is sufficient evidence on which the retailer may rely to establish a product’s origin. Pre-labeled products are those covered commodities that are labeled for country of origin by the firm or entity responsible for making the initial claim or by a further processor or repacker (i.e., firms that receive bulk products and package the products as covered commodities in a form suitable for the retailer). The country of origin information of pre-labeled covered commodities must be legibly printed on the shipping container, immediate container, or consumer ready package. In addition to indicating country of origin information, pre-labeled products must contain sufficient supplier information to allow USDA to trace-back the product to the supplier initiating the claim. Records that identify the covered commodity, the supplier, and for products that are not pre-labeled, the country of origin information, must be maintained for a period of 1 year from the date the origin declaration is made at retail. Retailer and supplier records may be maintained in any location.

COOL FAQ: When will the requirements of this regulation take effect?

One of the big questions about the COOL regulation is the "phase-in" period. This excerpt from the USDA's interim final rule - issued last night - addresses that concern:


When will the requirements of this regulation take effect?
The effective date of this regulation is September 30, 2008, because the statute provides for a September 30, 2008, implementation date. However, because some of the affected
industries (goat, chicken, pecans, ginseng, and macadamia nuts) did not have prior opportunities to comment on this rulemaking 10 and because the 2008 Farm Bill made changes to several of the labeling provisions for meat covered commodities, it is
reasonable to allow time for covered commodities that are already in the chain of commerce and for which no origin information is known or been provided to clear the system.

Therefore, the requirements of this rule do not apply to covered commodities produced or packaged before September 30, 2008. In addition, during the six month period following the effective date of the regulation, AMS will conduct an industry education and outreach program concerning the provisions and requirements of this rule.

AMS has determined that this allocation of enforcement resources will ensure that the rule is effectively
and rationally implemented. This AMS plan of outreach and education should significantly aid the industry in achieving compliance with the requirements of this rule. How will the requirements of this regulation be enforced? USDA has entered into agreements with States having existing enforcement infrastructure to assist in compliance reviews for fish and shellfish covered commodities. These agreements will be expanded to encompass all covered
commodities. USDA determines the number of reviews to be conducted and has developed comprehensive procedures for the compliance reviews. Only USDA is able to initiate enforcement actions against a person found to be in violation of the law.
The COOL statute does not provide for a private right of action. USDA may also conduct investigations of complaints made by any person alleging violations of these regulations when the Secretary determines that reasonable grounds for such investigation exist.

United on COOL

From United Fresh last night:



Interim Final Rule Issued for Country of Origin Labeling
The U.S. Department of Agriculture has issued an Interim Final Rule to implement mandatory country-of-origin labeling this fall. The rule will be published in the Federal Register on August 1.
United Fresh Produce staff and outside legal experts are now reviewing the 220-page publication, and will soon issue guidance for the industry in complying with the new regulations. In addition, we are joining with the Food Marketing Institute and American Meat Institute to provide three workshops across the country August 12 in Baltimore, August 13 in Chicago, and August 14 in San Jose for an in-person discussion with USDA officials, industry experts, and most importantly, your supply chain partners from suppliers to retailers. These workshops are your only opportunity to meet with suppliers and customers together to address the challenges of implementing COOL most efficiently. You can learn more or register now by clicking on the location of your choice:
Baltimore August 12
Chicago August 13
San Jose August 14
In addition, a future webcast is being scheduled together with other produce industry partners to address these important new regulations.
All participants in either the supply chain workshops August 12-14 or subsequent COOL webcasts will receive a free copy of United's Compliance Guide to Mandatory Country of Origin Labeling to be updated based on these new regulations.
For questions about COOL or the upcoming workshops, please contact Andrew Marshall at amarshall@unitedfresh.org, or 202/303-3407.