The proposed new food labels (Country of Origin Label, COOL), will become mandatory in September of 2004 and will inform consumers the origin of their meats, vegetables, fruits and peanuts. COOL is estimated to cost the farm and food industry as much as $4 billion. Currently, the origin labels are voluntary, but the law will impose fines up to $10,000 per violation once labeling becomes mandatory. The label will have to state where the animals were born, raised and, in addition where they were processed. This will be complicated in cases where livestock was born elsewhere but slaughtered in the US. It is estimated that the food industry and farmers likely spend $3.3 billion to separate pigs, cattle and sheep before they are slaughtered. Record keeping alone is estimated to cost $600 million.
So the big question, who will pay this hefty price tag? Retailers warn that consumers will end up paying more for their food to pay for the labels. Ever since President Bush signed the label law last year as part of farm bill, packers and retailers have tried to get the labeling program rolled back. Interestingly, the House passed a measure to effectively block it, but Senators (particularly from farming states) want to keep it, arguing that the consumers would purchase US food products instead of imports. USDA claims that the law has no measurable benefit and finds little evidence that consumers are likely to increase their purchase of food items bearing the US origin label.