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USDA: Little Economic Benefit From COOL

Country-of-origin labeling does not provide any positive “measurable economic benefits” for American consumers, and it costs producers, packers, and retailers in the United States to implement, USDA’s chief economist said in a 198-page report sent to Congress.

Link to the report

http://www.zimmcomm.biz/usda/USDACOOLEconomicReport.pdf

The regulations require labels indicating where beef, pork and poultry are “born, raised and slaughtered.”  The USDA report was mandated by the 2014 Farm Bill and was put together by a team of agricultural economists from Kansas State University and the University of Missouri.

“In terms of consumers, USDA’s regulatory impact analyses concluded that while there is evidence of consumer interest in COOL information, measurable economic benefits from mandatory COOL would be small,” the report said. “USDA’s regulatory impact analyses also found little evidence that consumers are likely to increase their purchases of food items bearing U.S.-origin labels.”

USDA’s Office of the Chief Economist  contracted with agricultural economists, including Glynn Tonsor and Ted Schroeder, both from Kansas State University, and Joe Parcell at the University of Missouri for their expertise on livestock marketing issues.

The professors did not find any evidence of measurable increases in consumer demand for beef or pork based on the COOL regulations. While the chances of finding consumer economic benefits from COOL were slim, they did recognize the “substantial interest” in COOL by some based on a so-called “consumer’s right to know.”

The report, which Congress demanded be completed within 180 days of the president signing the 2014 Farm Bill, has landed just before the World Trade Organization is expected to rule on whether or not COOL is an unfair trade barrier as claimed by Canada and Mexico.

So far, all the related WTO rulings have gone against the U.S. If the U.S. loses this last appeal, it’s possible that Congress will repeal COOL.

 


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