COOL DELAYED; INDUSTRY UNVEILS VOLUNTARY INITIATIVE 2004-01-26 (1)

JOANNA RAMEY / LYNNE MILLER

WASHINGTON -- The food industry breathed a collective sigh of relief late last week after Congress approved an omnibus appropriations bill containing a two-year delay in the implementation of mandatory country-of-origin labeling for meat, produce and peanuts.

The showdown occurred in the Senate, which after weeks of wrangling voted 65 to 28 Thursday for the delay. The House late last year approved an identical measure.

Against this backdrop, associations for various food-industry groups, as well as retailer and wholesaler organizations, agreed to craft their own voluntary country-of-origin program, and ultimately work with Congress to codify it into a law replacing the unpopular COOL legislation.

The groups involved in the effort -- the United Fresh Fruit and Vegetable Association, Food Marketing Institute, National Cattlemen's Beef Association, National Fisheries Institute, National Grocers Association and National Pork Producers Council -- have vowed to make their own program cost-effective, inclusive and driven by market demand. They plan to meet in the spring, possibly as early as February, to lay the groundwork for the program.

It would differ from the proposed legislation in several ways, according to representatives for the trade associations. First and foremost, the groups want to develop a program that will cost far less than the mandatory labeling program that the U.S. Department of Agriculture estimates could cost $3.9 billion in its first year of implementation alone.

The potential costs were not discussed last week as Senate Democrats and a handful of Republicans agitated for changes to a massive bill funding the federal government this year, which was already long overdue for a vote.

Senate Minority Leader Tom Daschle, D-S.D., led the charge against the COOL delay, saying the December discovery of a single cow in Washington state with mad cow disease underscored the need for country-of-origin labeling, since the animal was born in Canada.

However, the various challenges to the spending bill were beaten back, largely because opponent lawmakers admittedly had to vote for the overall spending bill because it contained funding for projects in their home districts. "It is regrettable we are faced with this choice," said Sen. Hillary Rodham Clinton, D-N.Y.

John Motley, senior vice president of government and public affairs at Food Marketing Institute here, said once opponents of a COOL delay "got over the initial shock that labeling has nothing to do with mad cow disease and protecting the American consumer, they stepped back" to approve the measure.

Tom Wenning, vice president and general counsel with the National Grocers Association, Arlington, Va., said the two-year COOL delay "sets the stage for us to pursue a voluntary program." Although he couldn't forecast whether there will be other mandatory labeling challenges, Wenning said support for a voluntary program, including from House Agriculture Committee Chairman Bob Goodlatte, R-Va., bodes well.

Lightening the recordkeeping requirements and building flexibility into the program are also major objectives for the associations.

"This current law has a huge paperwork burden that isn't necessary," said Tom Stenzel, president of UFFVA here. "A voluntary program would be far simpler."

The industry program also should give retailers options as far as how they could convey the country-of-origin information to consumers, he said. For example, beyond stickers and signs, retailers could consult in-store databases when approached by shoppers wondering about the origin of a particular item.

Many in the food industry believe there's extremely limited interest among consumers in knowing where their food comes from, so it would make sense to set up the voluntary program in markets where research indicates demand exists -- and consumers are willing to pay a premium for products marketed under a "raised in America" banner, according to Jon Caspers, president, National Pork Producers Council, Des Moines, Iowa. He envisions the voluntary program filling niches rather than being comprehensive. It should be set up to reward the producers who choose to participate, he said.

To make the program more inclusive, groups that were left out of the COOL legislation should be encouraged to get involved, representatives for the associations said. For instance, they would like to see participation from restaurants and other food-service operators.

"There's no reason a voluntary program couldn't apply to the food sold at restaurants," Caspers said.

The food-service segment would be a welcome addition, said a spokeswoman for National Cattlemen's Beef Association, Denver, which has been working for some time on a voluntary labeling initiative.

"We'd like to bring [restaurants] into this program," said Karen Batra, NCBA spokeswoman.

The poultry industry, also excluded under the COOL law, would be another good addition, she said. Leaving poultry out of the labeling program "makes no sense," Batra said.