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Issue Paper - National Pork Producers Council Discuss MCOOL

by 5m Editor
18 June 2003, at 12:00am

US - MCOOL and Consumers: Where's the Connection? Proponents of the MCOOL provision of the 2002 Farm Bill claim that it was designed to meet consumer demand for information about the country-of-origin of the foods they eat.

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They argue that by providing such label information consumers will choose to purchase more U.S. labeled products, thus increasing the demand for U.S. meat products. These claims are clearly contrary to many consumer research findings and distort other research findings.

MCOOL Did Not Originate With Consumers.

MCOOL proposals have been discussed for years. A number of producer groups petitioned USDA for a workable VOLUNTARY COOL program prior to the debate on the 2002 Farm Bill. The proposal for the current MCOOL law originated amongst populist farm activist groups and their supporters in Congress as a means of reducing the flow of livestock and food products into the United States. These activist groups have clearly stated that their primary focus has been cattle from Mexico, cattle, beef, pigs and pork from Canada, fresh vegetables from Mexico, Central and South American and fish from Vietnam. MCOOL proponents concluded that the only way to stop the growth of or reduce imports in an era of ever increasing free trade, especially in agriculture, was to impose additional costs in the name of consumer choice or protection.

Country-Of-Origin Is Not A High Priority For U.S. Consumers.

Consumers, in survey after survey, did not rank the country-of-origin of food as a high priority characteristic. In fact, virtually all recent consumer surveys show that food safety and inspection systems, freshness, nutrient content and other factors consistently rank of higher concern than does country-of-origin. In those cases where research has shown a concern about food origins, little evidence is offered about consumers' willingness to pay a premium for that information. There is little reliable information regarding just how much of a premium consumers are willing to pay and whether it is sufficient to cover the costs of an origin identification system.

The often-quoted research study released by Colorado State University and the University of Nebraska in February 2003, which found consumers were willing to pay substantial premiums for U.S. labeled beef, has limited application. The researchers themselves noted the study's limitations in a subsequent fact sheet. Concerns about the application of the research cited include: (1) a small sample size (n= 273); (2) the experimental labels used in the research were differed from the proposed USDA MCOOL labels; (3) the use of an unlabeled product (not permitted under MCOOL) versus a "Product of Canada" label; and (4) the fact that experimental and survey data do not necessarily predict consumer behavior. It should be noted that the CSU/NU research only addressed consumer preferences and willingness to pay for the labeling of beef and not pork.

MCOOL Fails To Meet The "Consumer Right To Know" Myth.

MCOOL proponents claim that MCOOL directly addresses consumers' "right to know" about the origin of their meat. If this is a "right" then it comes, as with all "rights", with responsibilities. Consumers must be responsible for paying for a system that delivers clear and credible information rather than forcing U.S. pork producers to shoulder these costs. Today, it is not apparent that consumers will actually pay for such a system. Furthermore, the mandatory nature of MCOOL forces ALL consumers, including those who really are not concerned about country- of-origin issues, to pay for this information system.

This law even fails miserably to address the mythic "right to know" issue because it exempts all products that are sold through foodservice, processed products, poultry, products sold through small retail food stores such as butcher shops and a vast array of other food products regardless of where they are sold. Well over half of the pork and pork products sold in the U.S. are exempt from MCOOL. That means that, under the current law, consumers have a "right to know" only at the RETAIL meat case and not when they buy poultry or when they buy back ribs at the local butcher shop or order a double-cut pork chop at a four-star restaurant or even when they buy a hot dog for a backyard cookout or at the ball park. Interestingly, the way the MCOOL law is structured; it is possible that the pork in all of these products could come from the same animal.

Consumers Do Not Routinely Ask For Country-Of-Origin Information Already Available.

There are pork production and processing systems in the U. S. that are able to tell consumers clearly where every package of pork they sell comes from. None of them have been asked by CUSTOMERS or CONSUMERS to do so. In fact, at least one producer-owned venture, the Minnesota Certified Pork Program, cancelled its effort to deliver source-verified products to consumers because it could not find enough consumers willing to pay large enough premiums to offset the added costs. If consumers value country-of-origin labeling and are willing to take responsibility to pay to support such a system, why have they not done so in numbers to that would reward these entrepreneurial producers and processors? By forcing all producers and processors to provide this information under the mandatory provision of this law, these entrepreneurs will instantly lose their product differentiation advantage and, thus, any price premium at the retail meat case. Pork from pigs born, raised and processed in the U.S. represents over 90 percent of all pork consumed in the U.S. It will become the commodity pork of the future when all pork must be labeled.

What is the answer?

The National Pork Producers Council (NPPC) is calling on Congress to repeal the mandatory provision of the country-of-origin labeling law for hogs and pork products and replace it with a workable voluntary COOL program. NPPC believes that there is insufficient evidence to conclude that U.S. consumers are concerned enough about the origin of pork products to pay a sufficient enough premium to financially support an origin information system. If such consumers can be identified, a voluntary system would allow entrepreneurs to create and capture such value through the pork chain. NPPC believes that this trade protectionist law, as currently structured, will force thousands of independent pork producers out of business because it will increase costs without adding a product characteristic for which consumers will pay a sufficient premium. Simply put: There is no free lunch and under MCOOL, producers and processors will pay the cost of a lunch that consumers might say they want but are unwilling to pay for.

Source: National Pork Producers Council (NPPC) Issue Paper - 13th June 2003

5m Editor