IS IT COOL IN SAN
ANTONIO TODAY?
Presentation by
Rosemary Mucklow
NMA Executive
Director
National Meat
Association
At
Southwest Meat
Association
Good morning! Thanks for being here this morning, when a River Walk and a leisurely latte would be infinitely preferable to listening to me on a subject that is exhausting not merely our industry but also several branches of our government. To date, the only one unaffected is the judicial branch, but I’ll predict here this morning that they too may become involved. Certainly the kinds of letters that retailers are sending to their meat suppliers suggest a really good chance that lawyers see huge opportunities here to educate not only their children, but their children’s children!
We arrived in this mess through a series of
mistakes. I am reminded by my
distinguished countryman, Winston Churchill, who said: We’re in an age of great events and little
men. Now I’m not up here to defame the
male gender, so today we’d say: little persons, and I’m not referring to
kindergarten class! I’m talking about
the United States Congress which hustled through an amendment to the Farm Bill
in 2002 to provide for Country of Origin labeling of meat and fish, but not
poultry, and a bunch of other ag commodities, initiated by Congresswoman Mary
Bono of California and carried by a majority vote. Those feathers are going to eat our lunch again!
The responsible leadership in Congress had already
suggested when the subject was discussed that there needed to be more study –
someone needed to speak to the issue of paperwork and what such a mandate would
cost, but in haste to get a Farm Bill in 2002, such sagacious advice from
people like Congressman Charles Stenholm and Congressman Larry Combest, the
Democratic and the Republican ag leaders at the time, both from Texas, that a
voluntary program would make sense was thrown to the wind.
You may ask how such a bill was passed. It’s instructive to know. On the 4th
October 2001, the House of Representatives, on a roll call vote, adopted the
Farm Bill 296 to 121 with a mandatory fruit and vegetable labeling
amendment. On November 13, 2001, the
Senate Agriculture Committee approved Title X of the Senate Farm Bill
containing mandatory country of origin labeling, and on February 13, 2002 the
Farm Bill passed the Senate.
As is customary when the Senate and the House version of
a bill differ, a Farm Bill Conference was convened in March-April 2002, and the
bill that emerged out of Conference contained a mandate for labeling meat. The Farm Bill was then ratified by both
Houses on an “up or down” vote.
This is how bad laws get passed! You may have heard enough, but since you’ve
stayed this long, I’m going to ask the homeland, podium and door security
subcommittee to bar the exit doors and keep you tied to your chairs for the
rest of this riveting disastrous story that is likely to turn your hair as
white as mine!
The Administration, in fact the Secretary of Agriculture
herself, is responsible for carrying out the law, and with COOL on the statute
books, she turned to the Agricultural Marketing Service to develop the
appropriate regulations. Leaders of
your organization and National Meat Association have visited Washington together
in the Spring for several years, so we have become acquainted with one of the
more friendly agencies within USDA.
Generally, the leadership at AMS is open to hearing from our
industry. They provide mostly marketing
services, and they like to work with us and to get our cooperation in such programs
as commodity product acquisition, grading and certification services, and even
in mandatory price reporting which replaced their excellent voluntary system
because of another bad law!
Thus, the officials at this agency, under the oversight
of Under Secretary Bill Hawks, went to work to respond to the mandate of a
highly prescriptive law, written by lawmakers who know very little about the
complicated business of growing livestock and converting them into meat and
meat products. They published a Notice
in the Federal Register in October 2002 after they had developed an
estimated cost for meeting the mandate of the law and they invited comments
from all interested parties about their implementation plan. They got them too! In fact, their Notice raised
many more questions than it answered, and was debated strongly by proponents
and opponents alike.
If you don’t think it isn’t a cumbersome requirement,
just think about this. The AMS was
explicitly told that they could not require mandatory livestock identification,
and the U.S. doesn’t have mandatory livestock id, but the labels must inform
retail shoppers of the country of origin.
Now butchers know that they grind meat from more than one animal when
they make hamburger. Indeed they are quite likely to grind meat from animals
that come from different countries – and they have to tell consumers the
country of origin of the meat. They’d
better be prepared to have a much larger label to do this. In fact, the responsibility of a butcher may
become more complicated than the responsibility of an airline pilot, if they
have to meet the mandate of the U. S. Congress for country of origin. The
problem is that this information is just not available, and even if the United
States adopted a national cattle identification system today, it would be at
least ten years before all the livestock that enter the food chain would bring
with them birth and residency information to meet the requirement of the
law.
Right now, USDA is drafting a formal proposed regulation
to implement COOL. It has no choice in
the matter. It has laid out the estimated cost in the Notice, it has accepted
comments, and the next step in rulemaking is to issue a proposed rule to
implement the law that is on the books. Once AMS has received comments on the
proposal, it will have to publish a final regulation. Compliance date is September 30, 2004.
There are some legislators, not merely those who argued
against the original statute, but quite a few others in the Congress that know
full well the folly of this foolish COOL requirement. One of these is the Congressman from San Antonio, Henry Bonilla,
who is the Chairman of the Agriculture Appropriations sub-Committee. He was successful at inserting language
during consideration of the Agriculture Appropriations bill for FY 2004 which
begins in October 2003 to deny funding to implement the meat portion for
COOL. This effort alone does not send
COOL down the drainpipe of oblivion, but it sends a message that there is
support in the House of Representatives about the folly of this
requirement. I’m here, in Congressman
Bonilla’s backyard, so to speak, to thank him for recognizing just how
unworkable this law really is. It sends
a message to the United States Senate how the other chamber feels. But remember, COOL wouldn’t be here today if
it were not for the other chamber. It is the United States Senate that got it
into the Farm Bill, and some of the leaders in the Senate have promised a
fight, including the Ranking Minority Leader himself, Senator Tom Daschle from
South Dakota.
COOL remains particularly popular with some of the farm
state Senators of both parties, including Senators Charles Grassley and Tom
Harkin from Iowa, Tim Johnson, the junior Senator from South Dakota, and Max
Baucus and Conrad Burns from Montana and others. Some of their constituents see COOL as a way to counter meat
imports – and that’s imports of beef,
lamb and pork. They see the trucks
coming from Canada, and it puts fire in their bellies. The supporters of COOL in the countryside
argue that USDA doesn’t need cattle identification for COOL, since they don’t
like that idea at all. That means
record keeping which you all know a lot about, and they don’t want it! The supporters want only imported cattle to
be identified. All others would be
“U.S.” cattle by default. But that’s not the way the law is written. We’ll need
more than no funding money for the meat only portion to get rid of COOL, but
nevertheless we’re enormously grateful to Congressman Bonilla for his
leadership on this issue. Would that
there were more leaders in our Congress like him!
Most major retailers are issuing very legalistic letters to their suppliers, suppliers of meat like you, telling you what they expect and that they want a commitment from you that you’ll have the documentation to support country of origin claims on the meat you sell them and hold them harmless. This kind of stuff may persuade some of you to sell exclusively to foodservice which is exempt from COOL. Retailers have to be within the definition of PACA, the Perishable Agricultural Commodities Act, to be subject to COOL. This is a 1930s law which defines a retailer as a buyer/seller of perishable agricultural – fresh and frozen fruits and vegetables, solely for sale at retail with a cumulative invoice value in a calendar year of more than $230,000. The definition specifically excludes butcher shops, fish markets and small grocery stores below the threshold level.
What retailers expect from their meat supplier is: records and a verifiable audit trail to establish the accuracy of COOL info; Indemnify them for any fines and other costs, including their attorney’s fees, if the information you provide or fails to provide meets the requirements; Segregate all covered commodities by COOL until you deliver to them, and maintain the document trail to prove it; and provide them with an audit by a third party such as USDA.
In the interim, so they can be assured that you will be able to comply with the law, suppliers are being asked to supply them with a letter of intent by September 30 this year saying that you’re planning to do all of this, and a copy of your action plan.
In February this year, some of those who had mistakenly supported COOL but had no idea how onerous it would be began to recognize their folly. As a result, producers looked to the government to help explain to those who so badly wanted this law just how it would play out. Thus began what has become known as “listening sessions” in many rural parts of the United States conducted by the Agricultural Marketing Service. These sessions have been well-attended, not only by grass roots people impacted by the COOL requirement, but also by their elected officials. Earlier this week, one was held in Illinois, and I understand that House Speaker Dennis Hastert was supportive of what USDA laid out to his constituents in terms of the complicated problems.
I’ve gone on long enough here this morning. I’m going to leave up here a copy of the portion of the 2002 Farm Bill that provides for COOL for those of you who haven’t seen it. Also, a copy of USDA’s Q&As that will answer some of your questions is here. Quite frankly, the next big move will be in the United States Senate where leading opponents have vowed to overturn the Bonilla amendment in appropriations to deny funding for COOL. Senator Dasche says: We have the votes to overturn. Senator Tim Johnson says that there are cost-efficient ways to develop mandatory regulations despite the scare talk of the meat packing industry. Senators Tom Harkin from Iowa, Max Baucus from Montana, Craig Thomas from Wyoming, Conrad Burns from Montana and Charles Grassley from Iowa represent a formidable bi-partisan coalition, supported by folks like Public Citizen, Livestock Marketing Association, and others. The lead organization supporting COOL is Ranchers-Cattlemen Action Legal Fund, otherwise known as R-CALF, supported by the Western Organization of Resource Councils.
So finally, COOL needs a legislative fix. It cannot be fixed in the regulatory arena. The legislators that need to get this done is the Club of 100 – the United States Senate. These are the guys that you need to reach to make a difference. And remember, we need only move a few votes in the middle to get the job done!
Thanks for listening this morning here in the high country of San Antonio.