May 16. 2003 6:01AM

Study: Setting up food-label system won't be too costly

BY KRISTIN JOHNSON
SPECIAL TO THE SUN

With new federal food labeling laws set to take effect in September 2004, packaging regulations have become a topic of much debate among ranchers, growers, grocers and consumer groups.

The passage of the Farm Security and Rural Investment Act of 2002 requires all beef, lamb, pork, fish, fruits and vegetables to include a country of origin on each package, and places the task of creating the regulations for these stickers on the U.S. Department of Agriculture.

A recent study authored by faculty members at five universities, including University of Florida agricultural economist John VanSickle, the lead author, said that one of the biggest benefits from country of origin labeling - or COOL as it is often referred to - is the power of choice the information gives to the consumer.

"The reason it's even an issue at this point is that it's putting the choice in the consumer's hands instead of the retailer's," VanSickle said. "The retailers don't want to give that right away. It allows them more market power in terms of buying their products."

VanSickle, who directs UF's International Agricultural Trade and Policy Center, said the results of the study showed the projected cost to be much lower. Instead of the $2 billion cost estimated by the USDA for record-keeping, the study's refigured numbers fell between $69.86 million and $193.43 million.

"We estimated the cost to be one-tenth of 1 cent per pound," he said. "The cost really isn't an issue."

John Motley, senior vice-president of government and public affairs for the Food Marketing Institute in Washington, D.C., disagrees. He said the $2 billion covers 40 man hours of work for suppliers to set up a labeling system.

"Forty hours is a joke," he said, pointing to the food wholesalers and retailers FMI represents. "I have companies that have been working on this on and off for the past few months."

The preliminary price tag excludes new equipment that would have to be purchased such as computers and - something Motley said will be the most expensive cost - segregation. Ranchers with cattle born in different places will have to keep the herds separate right up to the processing.

"The law is fatally flawed," he said. "They reached for what they thought would be a simple solution, and nothing the government does is simple."

Motley said food retailers and wholesalers would be held responsible for every mislabeled item, even if the supplier is at fault. He compared it to clothing tags.

"Who puts the labels in? The manufacturer. In this particular law, the retailer is responsible," he said. "The farther you get away from the farm, the less likely you are to receive accurate information."

VanSickle says the record-keeping would be easier than it sounds. Every cow, lamb and vegetable has detailed files. The labeling just puts this information in the consumers' hands.

Rancher Bob Crane, owner of Rockhollow Farm in Alachua, said that the information would allow people to purchase products in which they might have more trust.

"We have to abide by different health laws that other countries don't," he said, adding that he already has seen an improvement in domestic beef prices since voluntary labeling has been in place.

Crane's farm is a "cow-calf operation" - he owns about 150 cattle, which were born and raised on his land, making record-keeping simple for him, he said. But different ranchers operate in different ways. Some purchase replacement cattle instead of raising new ones from birth, he said, while others send their cows to grow up in a different part of the country until maturity when they are returned and sold.

Even then, Crane said, organizing the program for country of origin labeling should not be too difficult.

"I think it's something that could happen without too much pain," he said.

Mike Stuart, president of the Florida Fruit and Vegetable Association, said the USDA should not have to look far to find successful COOL examples. Since 1979, Florida has required country of origin labels for all foreign fruits and vegetables.

"You don't have to re-invent the wheel to put this system into place," he said.

Stuart, Motley, VanSickle and Crane all agree on one thing. It is up to the USDA to make the law work.

The study was completed as an aid in discussions that will lead to the federal regulations being developed by the USDA to comply with provisions of the country-of-origin labeling requirements.