COOL again

Jul 12, 2013

It looks like the gloves are off in this industry battle for a bad Country of Origin Labeling (COOL) law. Last week, eight U.S. and Canadian meat and livestock industry groups filed suit against USDA for injunctive relief regarding COOL. The groups are claiming the law has violated the First Amendment of the United States Constitution by compelling speech, in the form of costly and detailed labels on meat products, that does not directly advance a government interest.

Under the constitution, commercial speech may be compelled only where it serves a substantial government interest; for example, if the compelled speech is aimed at preventing the spread of a contagious disease. Because these labels offer no food safety or public health benefit, yet impose costs the government modestly estimates at $192 million, the government cannot require them.

The suit also contends that the COOL rule is arbitrary and capricious because it imposes vast burdens on the industry with little to no countervailing benefit and is in violation of the Administrative Procedure Act.

The suit also claims that the new rule violates the Agriculture Market Act because it exceeds the authority granted to USDA in the 2008 farm bill. The statute doesn’t permit labels in that detail where animals were born, raised and slaughtered, which the final rule requires.

After USDA’s response to the World Trade Organization’s initial complaint that the law was discriminatory, it was apparent that this law would be headed to the courts. As we’ve contended since its inception, the law was a waste of time and effort and was made to placate a small number of consumer and producer groups.

However, this law seems consistent with much of the regulation that has been put in place during the Obama administrationĀ“s tenure. Also, it makes you wonder just who USDA listens to for policy guidance, because it’s certainly not any of the major industry players who have factual information to share with legislators.

It’s remarkable that legislators even listen to groups like R-CALF and National Farmers Union (NFU) for any solid guidance; these groups are more interested in bashing big agribusiness than anything else. NFU issued a news release after the suit was announced and all they could come up with to support the law was that a 2008 consumer report found that 95 percent of consumers believe that processed or packaged food should be labeled by the country of origin and that country of origin should always be available at point of purchase.

However, other research from Kansas State University indicates that consumers don’t really care about COOL.

That all sounds nice and in most cases it would not be a big deal. But when you look at how the cattle business works, especially how we assemble cattle into groups and co-mingle them along their life cycle, it’s a bit more difficult. The cattle business is a North American industry that has shared resources for a century to maintain its viability and competitiveness.

R-CALF also piped in with a post announcement press release and their angle is as old as the North American cattle industry. They continue to rail on the National Cattlemen’s Beef Association and the fact that they are funded with 82.5 percent beef checkoff dollars and that they are lobbying with those dollars. Bill Bullard, R-CALF CEO, refers to the suit as the meatpacker-lobby lawsuit, and said the only reason it was filed was to help meatpackers exploit consumers by allowing packers to buy cheaper foreign cattle and sell the resulting meat to unsuspecting consumers at the same price that domestic meat commands. In his view, meatpackers are the major conspirators in the cattle business and without COOL, consumers cannot initiate any competitive demand signals for livestock regardless of their country of origin.

We have yet to see any serious consumer food safety groups rise to respond to this suit, which in my view is similar to Obamacare. This is a law that can’t be written to work with the long international history of the beef industry. If there were a food safety or animal health component, we might be able to support it. The rule was written for the radical farm groups to discriminate against Canadian and Mexican cattle producers.

Consumer groups certainly didn’t come up with the idea. They were fine knowing that their meat is federally inspected and safe. Again this is bad beef industry politics. — PETE CROW