Representatives from two large livestock organizations on Tuesday said the Country of Origin Labeling provisions in the 2014 farm bill will be the single element that causes them to oppose the entire bill.
National Cattlemens Beef Association president Scott George said in a teleconference that COOL – which requires labels on meat indicating where the originating animal was born, raised and slaughtered – creates a multitude of problems for livestock producers. The most significant, George said, is the threat of trade retaliation from Canada and Mexico.
"(Livestock producers) are tied to a railroad track with a runaway train coming down that's called retaliation," George said. "We know that this horrible thing is coming at us that has got to be dealt with."
The rule has been under intense scrutiny by the World Trade Organization and Canada and Mexico, which say it discriminates against imports and creates consumer bias. Supporters of the rule argue that it provides consumers with additional information about the origin of their food.
But per WTO rules, both Canada and Mexico have already released lists of items on which tariffs could be raised to retaliate against the U.S. for implementing the COOL rule. For Canada, the list includes meat, live cattle/swine, dairy and produce – even wooden office furniture.
Joining George on the call, National Association of Manufacturers Director of International Trade Policy Jessica Lemos said the retaliation will result in a WTO process that may last around two years.
The farm bill, however, is a chance to repeal COOL and avoid all of that, Lemos said.
Concerns of cost
Outside of retaliation issues, National Pork Producers Council President Randy Spronk joined George to explain concerns about COOL's cost of implementation. Those costs include extra labor and infrastructure needed to segregate animals based on their origin.
According to George, the Office of Budget and Management estimated an implementation cost of about $100 million after the latest COOL rule revision in May 2013. That cost is weighing on producers, he explained.
"Those costs are being borne by the retailers and the processors and they will pass those costs right back down to the consumer, right back down to the producer," George said. "So the producer is taking home less today than he could have been taking home if those costs were built in."
What about a compromise?
Both Spronk and George said the decision to oppose the entire farm bill based on the COOL regulation is needed. A vote for the bill, George commented, is "a vote for retaliation."
Though they said that other routes were considered, including voluntary COOL or labeling that specifies products of the U.S., no proposals were accepted.
Though the groups wouldn't comment on how many legislators they believe would support a no vote on the farm bill on the basis of COOL, George said the hope is that the bill will fail and return to conference committee for alteration.
If that plan doesn't work, the groups say additional pressure from businesses feeling effects of trade retaliation may fire up urgency to repeal COOL via independent legislation.
"Obviously, the farm bill was the primary opportunity to address this issue once and for all, but if it prevails in Congress this week, then we will continue to fight this and push for a policy that is compliant with our WTO obligations," Lemos said.
'The votes were not there'
Despite the backlash from NPPC and NCBA regarding the COOL rule, lead negotiators on the farm bill Tuesday said that groups opposing it on the basis of COOL are missing out on the bill's other elements that benefit the livestock industry.
"All of us worked together for what we knew we could achieve and they came in wanting to repeal COOL. There was no way … the votes were not there in either body to do that," said Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Ag Committee. "So we moved forward to achieve what we could together and I'm very disappointed that they are not choosing to understand what a huge win this bill is for livestock."
According to Stabenow, the bill offers a $7 billion investment for ranchers, including permanent livestock disaster assistance.
Rep. Frank Lucas, R-Okla., chairman of the House Ag Committee, noted that at the beginning of negotiations, neither the Senate bill nor the House bill had language to repeal COOL, creating a challenge for principals to include such language in conference.
"To be asked to go and advance … towards total repeal, when there wasn't language on either side, it just was extremely difficult," Lucas noted. "Ultimately, the chairwoman and myself and ranking members had to make a decision: do we want a farm bill, or do we want to take an issue that could potentially blow the whole process sky high?"
Lucas said he "wasn't totally surprised" at the reaction of the livestock groups, considering their activism against COOL.
"This is not over with. It's just on this day, this couldn't prevail," Lucas said. "And, doing the farm bill – the Agricultural Act of 2014 – seemed to me and a majority of my colleagues to be the highest priority at that moment. I think we made the right decision."
Ultimately, the livestock groups said their goal is to move forward, even if it means sacrificing other reforms in the farm bill.
"We would like to see that (the COOL issue) can be resolved so that we can go back to what we do best each and every day and that's to raise livestock," Spronk said. "So for right now, full repeal."
The House is poised to consider the bill on Wednesday morning. While Senate Majority Leader Harry Reid has not unveiled a schedule for the bill in the Senate, he has indicated that it will be a priority, Stabenow says.
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