000126 USDA Says Country-Of-Origin Meat Labels Not Needed

Washington - Requiring imports of beef and lamb sold in U.S. grocery stores to carry a label stating where the meat came from is unnecessary and could harm U.S farm trade, the U.S. Agriculture Department said.

In a long-awaited report mandated by Congress in 1998, the department said that there was no proof that the labels would help U.S. producers.

“There is no direct or empirical evidence to suggest that a price premium engendered by country-of-origin labeling will be large or persist over the long term,” the department said.

“Indeed, if consumers do distinguish goods depending on their country of origin, strong incentives exist for industries to act without government intervention, i.e., on a voluntary basis,” the agency said.

In 1998, U.S. meatpackers helped kill a provision that would have required country-of-origin labeling on imported beef. But Congress required the USDA to produce a report on the cost and benefits of labeling imported beef and lamb.

U.S. cattle and sheep producers support country-of-origin labeling because they think shoppers would support U.S. farmers and would choose U.S. meat over imports.

The issue has gained support over the last several years after low prices, caused by a variety of factors including decreased exports and huge supplies, have forced many ranchers out of business.

But meatpackers and the food industry say country-of-origin labeling would greatly increase costs without providing any real benefits for consumers since the Agriculture Department strongly enforces food safety standards for all imports.

Congress had set an April 1999 deadline for the study's release. But the Agriculture Department defended itself against lawmakers who criticized the lengthy delay.

“We took the time to produce a thorough report that discusses the key factors and the key issues,” USDA spokesman Andy Solomon said.

The USDA said it was concerned that country-of-origin labels would anger U.S. trading partners, causing a backlash against U.S. farm exports, not just meat. Exports provide about 25 cents of every $1 in farm revenues in the United States.

The USDA also said country-of-origin labeling would not come cheap.

In addition to a one-time design cost, the labels alone could cost up to $8 million, depending on how many cuts of meat are included in the program. Taxpayers may also have to shell out “millions of additional dollars” to pay for U.S. officials to enforce the labeling requirement, the department said.

Labeling would also take a costly toll on streamlined meat processing facilities, the report found.

“It is estimated that there would be efficiency losses and lost business costs associated with segregating product by country of origin,” the department said.

“Some firms may choose to avoid imported cuts in order to avoid incurring the costs of segregation and control systems for imported meat cuts, and the penalties of non-compliance,” the agency reported.

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