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Benefits of country-of-origin labels outweigh costs by the Organization for Competititve Markets
(Tuesday, Nov. 26, 2002 -- CropChoice guest commentary) --
Country of origin
labeling benefits will outweigh USDA’s cost estimate of thirteen cents per
week for consumers. Labeling provides opportunities to build consumer
trust, loyalty and brand equity in their purchasing of beef, pork, lamb,
fish, fruits, vegetables and peanuts are grown, raised and processed in the
United States. The USDA estimates, though likely too high, were released
and published in the Federal Register last week. [Federal Register: November
21, 2002 (Volume 67, Number 225)]
Surveys show that 90% of consumers want to know where their food is grown and processed, just as they now are informed as to where their clothes are made. Producers will now have the
opportunity to showcase U.S. produced products which are produced and
processed under the most demanding food safety system in the world. There
is no evidence that consumers are unwilling to pay thirteen cents per week
in return for the ability to choose their meat, fish and produce with
confidence and knowledge of its origins.
Despite the fact that no program has yet been developed, USDA estimated the
overall cost of compliance at approximately $1.97 billion. The cost
estimate is not just for livestock, but for all covered commodities. It
includes the overall labor cost for all producers, all food handlers
(including processors), and all retailers. The U.S. population is
284,796,887. The annual cost per consumer is thus $6.91 or 13 cents per
week.
Unfortunately, USDA only estimated the cost of the program while failing to
address the benefits, which is a key econometric error. In addition, it is difficult to understand how
USDA could estimate the cost side of the equation when the program has been
neither designed nor implemented. For example, USDA could choose to
implement regulations to track only foreign products, while allowing the
domestically produced product to be labeled as a product of the United
States. This strategy would minimize the burden on many domestic industry
players.
The Organization for Competitive Markets is a multidisciplinary, nonprofit
group of farmers, ranchers, academics, attorneys, and policy makers
dedicated to reclaiming the agricultural marketplace for independent
farmers, ranchers and rural communities. | |
