CU Comments on USDA interim final rule on COOL for fish and shellfish

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Consumers Union’s Comments on
US Department of Agriculture (USDA) Agricultural Marketing Service (AMS)
Proposed Rule on Mandatory Country of Origin Labeling of Beef, Lamb, Pork, Perishable Agricultural Commodities, and Peanuts
Docket No. AMS-LS-06-0081; LS-04-04; AMS-LS-07-0081
August 20, 2007
Submitted by
Michael Hansen, PhD
Senior Scientist

Summary
Consumers Union (CU) welcomes the opportunity to comment on USDA’s propose rule for mandatory country of origin labeling (COOL) for beef, lamb, pork, perishable agricultural commodities, and peanuts. We believe that this COOL proposal should be as expansive as possible and cover as many items as possible as it is clear that consumers desire to know where there food is coming from.
There are two basic arguments for COOL. First, three studies conducted this year have found that consumers overwhelmingly desire COOL and believe they have a right to know such information. For example, a poll of 1,000+ people conducted by Consumers Union in early June, 2007, found that 92% thought that imported food should be labeled as to its country of origin . Another poll from earlier this year, conducted for Food and Water Watch, found that 82% of 1000 people polled in early March, 2007, supported mandatory COOL . Most recently, a poll of more than 4,500 people, conducted in mid-July, 1997 by Zogby Interactive, found that 88% of those polled said all retail food should have COOL. More importantly, some “94% believe that consumers have a right to know the country of origin of the foods they purchase.” Thus it is clear from these polls that an overwhelming majority of consumers want their foods to have COOL.
Second, COOL can also serve as a risk management measure. Developing countries such as China or India, which may not have as stringent food safety regulations and/or have not implemented/enforced those regulations as rigorously as the US, may export hazardous food products. COOL could allow consumers to avoid such food items as the need arose. For example, in 2003, there was an outbreak of hepatitis that killed 3 people and sickened more than 600 people and was linked to green onions from Mexico . Since there was no required COOL for fruits and vegetables in 2003, concerned consumers had to refrain from buying all green onions for a while. If COOL had been in effect, consumers could have simply avoided green onion from Mexico. More recently, in June, 2007, FDA announced that they would detain imports of all farm-raised shrimp, catfish, basa, dace (type of carp) and eel from China until they can be shown to be free of residues of four drugs unapproved for use in farm-raised seafood; three of the drugs (gentian violet, nitrofuran and malachite green) have been shown to be carcinogenic in animal studies . Although FDA did not issue a recall for these farm-raised Chinese seafood imports, consumers that are concerned about consuming such products could potentially avoid them as COOL for fish and shellfish was implemented for large retailers in 2004.
Consumers agree that COOL can serve as a risk management measures. The Zogy Interactive poll—conducted in mid-July, 2007—found that 90% of those polled “believe knowing the country of origin will allow consumers to make safer food choices.”
We are concerned that certain clauses in the law mandating COOL allow many products to be excluded. The law stated that, for purposes of COOL, the terms “retailer” and “processed agricultural commodity” should “have the meanings given the terms in section 1(b) of the Perishable Agricultural Commodities Act [PACA] of 1930.” As AMS noted, “Under PACA, a retailer is any person who is a dealer engaged in the business of selling any perishable agricultural commodity solely at retail when the invoice cost of all purchases of produce exceeds $230,000 during a calendar year. This definition excludes butcher shops, fish markets, and small grocery stores that sell fruits and vegetables at a level below this dollar volume threshold or do not sell any fruits and vegetables at all” (68 FR 61946, October 30, 2003). Unfortunately, this definition of retailer does not conform to what the average consumer thinks of as a retailer. It completely excludes stores that do not sell fruits and vegetables, such as a large fish market, even though fish are supposed to be covered. It also excludes meat markets and small green grocers and convenience stores. In fact, it covers only very large supermarkets. To compensate for these significant exclusions, we urge USDA to resolve any ambiguities in a way so as to maximize the number of food items with mandatory COOL.
Perhaps the most important ambiguity in the law concerns a “processed food item.” The law (Public Law 107-1712) explicitly exempted covered commodities from COOL if they were “an ingredient in a processed food item,” but did not define what was meant by “processed food item.” We urge USDA/AMS to make case by case rules for what is defined as “processed” and to be conservative in terms of allowing exemptions for such items.
Processed Food Item
One important issue is that the law (Public Law 107-1712) explicitly exempted food items from needing COOL when the covered commodity is an “ingredient in a processed food item” from mandatory COOL, but did not define what is meant by “processed food item.” In the 2004 interim final rule for COOL for fish and shellfish, USDA used a two-step approach and defined a “processed food item” as a retail food item “that has undergone specific processing resulting in a change in the character of the covered commodity, or that has been combined with at least one other covered commodity or other substantive food components (e.g. breading, tomato sauce),” and then gave examples of the types of processing (e.g. cooking, curing, smoking and restructuring) that would cause a product to be considered a “processed food item” (69 FR 59708; October 5, 2004). The Agency has asked whether this definition can also be used for meat (beef, lamb, pork), perishable agricultural commodities (e.g. fresh and frozen fruits and vegetables) and peanuts.
CU believes that the definition of “processed food item” used in the interim final rule for fish and shellfish is too broad and results in the exclusion of many products and so should not be used for meat, perishable agricultural commodities and peanuts. A year before the interim final rule for fish and shellfish, USDA published a proposed rule for COOL for all covered commodities (68 FR 61944 et seq; October 30, 2003), that defined processed food more narrowly, but used the same basic two-part definition of “processed food item” as was ultimately used in the interim final rule. However, in the earlier proposed rule, AMS made clear that “a change in the character of the covered commodity” meant that the food item had “undergone a physical or chemical change such that they no longer retain the characteristics of the covered commodity thus consumers would not use the items in the same manner as they would the covered commodities” italics added (68 FR 61946, October 30, 2003). AMS made clear that cooking, canning and breading would not be considered as forms of processing that would change the characteristics of the covered commodity enough to cause consumers to use it in a different way than usual, while restructuring, smoking and curing would: “All fish and shellfish, whether chilled, frozen, raw, cooked, breaded or canned would be subject to these regulations unless they are an ingredient in a processed food item. . . . restructured shrimp or fish sticks and smoked and cured products would be considered processed food items because they no longer retain the characteristics of the covered commodity and thus consumers would not use them in the same manner as they would the covered commodity” bold added (68 FR 61948, October 30, 2003). In addition, USDA considered breading, seasonings and preservatives to be “non-substantial” ingredients that, by themselves do not constitute making a food item a “processed food item.” By the time the interim final rule was published a year later, USDA weakened their own proposed definition of “processed food item” so that cooking, canning or breading would turn a fish or shellfish into a “processed food item.”
If USDA were to use the definition of “processed food item” from the interim final rule for fish and shellfish, too many products—including cooked or roast meat, seasoned and roasted peanuts, and breaded perishable agricultural commodities— would be exempt from COOL. For example, roasted peanuts would be exempt from COOL labeling because “roasting” is a form of cooking. However, as AMS noted in 2003, “the vast majority of peanuts sold at retail are shelled, roasted and salted. AMS believes these products were intended to be covered by the law” (68 FR 61948). We agree with AMS’ views from 2003 and feel that all shelled, roasted and salted peanuts should be labeled as to country of origin.
In addition, in 2003, AMS stated that “As this is a retail labeling law, to help guide AMS in determining how to define a ‘processed food item,’ AMS viewed the scope of covered commodities in the context of how these products are marketed at the retail level” (68 FR 61946). We strongly agree with this approach of considering how the products are sold at retail level so as not to exclude too many products as Congress clearly intended for most covered commodities to be included. As AMS noted, “interpret[ing] the law as only applying to green peanuts would result in the exclusion of most peanuts sold at retail. Similarly, to exclude canned fish would result in the exclusion of a large share of the fish products sold at retail” (68 FR 61946). So, the definition of “processed food item” should differ between the various covered commodities—e.g. muscle cuts of meat (beef, lamb, and pork), ground meat, perishable agricultural commodities, and peanuts.
We believe that the major components of AMS’ definition of processed food item (i.e. change in character and/or combined with other substantive components) are applicable, with some modification, to muscle cuts and ground meat (beef, lamb, pork), perishable agricultural commodities and peanuts. The first part of the definition—a change in character—is fine, as long as AMS makes it clear that the change in character is such that a consumer “would not use the items in the same manner as they would the original commodity”. Thus, as per the proposed 2003 COOL rule, all forms of cooking (e.g., frying, broiling, grilling, boiling, steaming, baking, roasting), as well as canning would not constitute a change in character. The second part of the definition—combined with other substantive components—is also fine, as long as AMS clearly defines what is meant by “substantive components.” As in the 2003 proposed COOL rule, breading, seasonings, preservatives would not be considered “substantive components.” Also, we do not think that a simple mixture of covered items should be considered as “substantive component.” Thus, a bag of salad greens should not be considered to be a “processed food item” simply because it contains a mixture of covered items (e.g. the various individual salad greens would all be considered covered items).
Meat—muscle cuts and ground product
By combining the notions of consideration of how the products are sold at retail, along with the two step approach to defining “processed food item” with an overarching view toward maximizing the number of food items that will require COOL, we suggest the following. For muscle cuts of beef, lamb, and pork, chilling, freezing, cooking, seasoning or breading should not constitute a method of processing and so should be covered by COOL. In addition, we also support the position laid out in the 2003 proposed COOL, that “needle-tenderized steaks; fully-cooked entrees containing beef pot roast with gravy; seasoned, vacuum-packaged pork loins; and water-enhanced case ready steaks, chops, and roasts . . . would not be considered processed food items” (68 FR 61947). We would go beyond the 2003 AMS proposed COOL rule in a number of areas. We would support the alternative proposal in the 2003 COOL proposed rule which states “that a covered commodity that is further processed (i.e. cured, restructured, etc.) should not be excluded unless the covered commodity is mixed with other commodities such as a pizza or TV dinner” (68 FR 61947). We think this stance is justified on the basis of how consumers perceive cured items. If we exempted restructured and cured products from COOL, this would mean that no bacon, hams nor corned beef briskets would be labeled. Congress clearly stated that pork was included in COOL, but exempting bacon and hams would exclude a significant portion of the pork market.
For ground beef, lamb, and pork, we note that FSIS has specific rules and regulations that define the requirements for products to be labeled as “ground beef,” “ground pork,” and “ground lamb;” and only products that meet those requirements must be labeled as to country of origin. Thus, “ground beef” is defined, in part, as “consist[ing] of chopped fresh and/or frozen beef with or without seasoning and without the addition of beef fat as such, shall not contain more than 30 percent fat, and shall not contain added water, phosphates, binders, or extenders” (9 CFR §319.15(a)). The definition of “beef patties” states they “shall consist of chopped fresh and/or frozen beef with or without the addition of beef fat as such and/or seasonings. Binders or extenders, Mechanically Separated (Species) used in accordance with §319.6, and/or partially defatted beef fatty tissue may be used without added water or with added water only in amounts such that the product characteristics are essentially that of a meat pattie” (9 CFR §319.15(c)). Thus, meat imported into the US and used to make “beef patties” would be exempt from COOL. They do not meet the definition of “ground beef” because “beef patties” can also contain added water, binders and extenders, while “ground beef” cannot. We urge USDA not to exclude beef patties and similar products from mandatory COOL.
We also note that the law did not include all meat, so that all poultry (chicken, turkey, ducks, geese, etc.) as well as meat from goat and other mammals (e.g. buffalo, deer, elk) are not subject to mandatory COOL. We would like to see all such meat and poultry products labeled as to country of origin, but realize that this is not included in the law.
Fresh and frozen fruits and vegetables
Under the law, “perishable agricultural commodity” is defined as in paragraph 1(b) in PACA of 1930, which includes “any of the following, whether or not frozen or packed in ice: Fresh fruits and vegetables of every kind and character; and includes cherries in brine as defined by the Secretary in accordance with trade usages.” Accordingly, cooked and canned fruits and vegetables are not considered “perishable agricultural commodities” and so would be exempt from mandatory COOL. Although we would like to see cooked and canned fruits and vegetables labeled as to country of origin, we realize that the law is explicit in its definition of “perishable agricultural commodity” and, thus there is no opportunity for AMS to require such country of origin labeling.
Although cooked and canned fruits and vegetables have already been exempted from COOL by definition, that leaves the question of what kinds of processing would also be exempted from COOL. We disagree with AMS that oranges squeezed into orange juice or apples mashed and made into apple sauce constitute a processed food item that no longer retains the characteristic of the covered commodity and so should be exempt from COOL. The definition of “perishable agricultural commodity” already exempts canned or cooked fruits and vegetables from mandatory COOL. However, we would like to see orange juice included as a covered commodity as orange juice represents a major component of orange consumption in the US.
As for mixtures of a perishable agricultural commodity and “non-substantive components” we agree with AMS that “products such as strawberries packaged with sugar, a preservative, or other flavoring” would not be considered “processed food items” because sugar, preservatives and flavorings are considered to be “non-substantive components.” Thus, for perishable agricultural commodities, AMS should explicitly list sugar, preservatives and flavorings as “non-substantive components.” We do agree with AMS that combination of a perishable agricultural commodity combined with a “substantive food component” that results in a distinct retail item should be considered a processed food item. Thus, a frozen prepared pie containing frozen apple slices would be exempt from COOL. Baked fruit pies would also be exempt from mandatory COOL because the fruits have been cooked and so don’t fit the definition of perishable agricultural commodity. However, we disagree with AMS that a simple mixture of perishable agricultural commodities would constitute a “processed food item.” A bag of salad greens containing romaine lettuce, red leaf lettuce and arugala should not be exempt from mandatory COOL, nor should a fruit cup containing cantaloupe, honeydew, and watermelon or a vegetable tray containing both carrots and celery. Since the retailer will have country of origin information on all these perishable agricultural commodities, they could easily add such information to the labels.
Peanuts
If AMS were to use the definition of “processed food item” that is used in the interim final rule for COOL for fish and shellfish—which includes all forms of cooking, including roasting—for peanuts, that would mean that virtually all peanuts would be exempt from mandatory COOL. As AMS noted in their 2003 proposed rule on COOL, “Because the vast majority of peanuts sold at retail are shelled, roasted, and salted, AMS believe these products were intended to be covered by the law” (68 FR 61948). We strongly agree with AMS that shelled and/or roasted and/or canned peanuts sold at retail do not have characteristics that are different from a covered commodity and so should not be exempted. We also agree with AMS in their 2003 proposed rule on COOL that oil, salt and other flavorings are “non-substantive” ingredients. In the interest of maximizing information for consumers, we would argue that peanut butter should be labeled as to country of origin, as this is a major way that peanuts are consumed in the US, especially by children. To exclude this product from mandatory COOL would be excluding a significant portion of peanut products from such labeling.
In addition, as discussed in the section “Country of Origin Notification” below, AMS in the 2007 reopened proposed rule on COOL, has asked whether the labeling and notification requirements that were proposed in the 2004 interim final rule on COOL for fish and shellfish (e.g. §60.200(f),(g))—and based on US Customs and Border Protection definition of country of origin and “substantial transformation” which is used in lieu of “processing”—could be used for meat (beef, pork, lamb), perishable agricultural commodities, and peanuts. If this approach is accepted, which we think it should be, then the US Customs and Border Protection definition of “substantial transformation” would functionally be used to define “processing.” We note that in a series of decisions, the US Customs and Border Protection (CBP) determined that roasting of pistachios, pecan nuts and coffee beans did not constitute “substantial transformation” in a series of decisions from 1985, 1987, and 1988, respectively . As noted in a discussion of whether cooking shrimp results in a “substantial transformation,” “Customs concluded that the physical and commercial changes which occur in the pistachio nuts as a result of roasting are not significant and that the identity and use of the pistachio nuts remains intact. The decision states that roasting appears to be, like picking, sorting, and bagging, simply one of several processing steps to which all pistachio nuts are subjected, no one of which alters or limits the intended or potential commercial use. See also HQ 730058, June 2, 1987 (roasting of pecan nuts is not a substantial transformation)” . IF CPB feels that roasting of pistachio and pecan nuts is not a substantial transformation, then, since sections §60.200(f),(g) of the interim final rule on COOL for fish and shellfish use “substantial transformation” as a synonym for “processing,” AMS must decide that roasting of peanuts is not a form of processing and so should not be exempt from the COOL requirement.
Country of Origin Identification
Another important issue is how to determine the country of origin for covered commodities. The law (Public Law 107-1712) states that to get a US country of origin label, meat (e.g. beef, lamb, and pork) products must come from animals exclusively born, raised and slaughtered in the US; farmed fish must be hatched, raised, harvested and processed in the US, while wild fish must be harvested and processed in US, a territory of the US, or a State including the waters thereof; and perishable agricultural commodities and peanuts must be exclusively produced in the US . We support this portion of the law.
In the 2003 proposed rule on COOL, AMS proposed requiring either labeling of the production steps that happened in the US or other countries, or a simplified label that would state where the product was imported from, followed by the production steps performed in the US. Thus, a farm-raised fish that was hatched, raised, and harvested in country X and processed in the US could be labeled as “Imported from country X, processed in the US.” A farm-raised fish that was hatched, raised and harvested in the US but processed in country X, would be labeled either “Product of country X” or “Product of country X, born, raised and harvested in the US.”
In the 2004 interim final rule on COOL for fish and shellfish, AMS simplified provisions that dealt with “labeling imported products that have not undergone substantial transformation in the United States,” and “labeling imported products that have subsequently been substantially transformed in the United States,” (e.g. §60.200(f),(g), respectively). The basic simplification was that only the information of where the product was imported from and whether it was processed in the US would be on the label, so that information on where all the production steps occurred doesn’t need to be on the label. Thus, if a product had not undergone a “substantial transformation” (as defined by US Customs and Border Protection), then the product’s country of origin would simply be the origin declared to the US Customs and Border Protection. If the product had been imported from country X and had been “substantially transformed” in the US, it would simply be labeled “From [country X], processed in the United States.” If the product had been hatched, raised, and harvested in the US, but was processed (e.g. undergoes substantial transformation) in country X, it would simply be labeled “From country X.”
In the 2007 re-opened proposed rule for COOL, AMS particularly asked for comment on whether the simplified labeling and notification requirements that were proposed in the 2004 interim final rule on COOL for fish and shellfish (e.g. §60.200(f),(g),(h)) could be used for meat (beef, pork, lamb), perishable agricultural commodities, and peanuts. Consumers Union believes that the simplified labeling provision laid out in the 2004 interim final rule, based on US Customs and Border Protection definition of country of origin and “substantial transformation” which is used in lieu of “processing” (e.g. §60.200(f),(g)) would be acceptable to use for COOL for meat products, perishable agricultural commodities and peanuts.
In defining country of origin for blended or mixed products in the voluntary COOL guidelines published in 2002 (67 FR 63367) AMS proposed requiring country of origin for each raw material source of the mixed or blended retail item by order of predominance by weight. AMS did this because it recognized that it would be misleading to consumers if a blended or mixed product (bagged lettuce, bag of shrimp) listed US ahead of other countries if only a small percentage of the covered commodity had US as country of origin. Thus if a bag of lettuce contained 5% lettuce that was exclusively produced in the US and 95% of the lettuce came from Mexico, it would be misleading if the country of origin was listed as: US, Mexico. By the time of the 2003 proposed rule on COOL, AMS had weakened this provision further to simply say that the country of origin declaration for mixed or blended products comprised of the same covered commodity would list alphabetically all the countries of origin for all the raw materials. We oppose an alphabetical listing.
By the time of the 2004 interim final rule on COOL for fish and shellfish, AMS had weakened/simplified the country of origin labeling provision for blended or commingled products comprised of the same covered commodity (such as a bag of shrimp) from more than one country of origin even further. In the 2004 interim final rule on COOL, AMS stated that the declaration on such a bag of shrimp could either list “the countries of origin contained therein or that may be contained therein” italics added.
AMS has asked whether this simplified approach for labeling country of origin for blended or commingled products from more than one country of origin contained in the interim final rule on COOL for fish and shellfish (e.g. §60.200(h)) could also be applied to meat products, processed agricultural commodities and peanuts. Ideally we would prefer that companies label the actual country of origin for each of the commingled covered commodities, and that they would list the percentage for each of the countries of origin. A bag of shrimp which consists of 95% shrimp from country X and 5% from US and a bag of shrimp consisting of 95% shrimp from US and 5% from country X, would be labeled the same under the interim final rule, while consumers may view a big difference between the two products. Alternatively, we could support the position which AMS proposed in the voluntary COOL guidelines published in 2002 (67 FR 63367) which required country of origin for each raw material source of the mixed or blended retail item by order of predominance by weight.
If AMS utilizes the approach for blended or commingled products laid out in the 2004 interim final rule on COOL (e.g. §60.200(h)), we would like to raise one point that is ambiguous in §60.200(h). This section states that “When the retail product contains imported covered commodities that have subsequently undergone substantial transformation in the United States commingled with other imported covered commodities that subsequently undergone substantial transformation in the United States) and/or US origin covered commodities, the declaration shall indicate the countries of origin contained therein or that may be contained therein” (69 FR 59711). It is unclear whether in such a commingled commodity whether an imported covered commodity that is “substantially transformed” in the US could also list the US as a country of origin. On the one hand, CBP considers the country where the product undergoes “substantial transformation” to be the country of origin. On the other hand, section §60.200(g) of the 2004 interim final rule for COOL for fish and shellfish clearly states that an imported product that was imported from country X and “substantially transformed” in the US cannot list the US as a country of origin; such a product must be labeled “From [country X], processed in the United States.” We think that AMS should make it very clear that in the case of blended or commingled products, listing US as one of the countries of origin should only be allowed for US origin covered commodities, as defined in the law (Public Law 107-1712). US country of origin should not be permitted if the product is only “substantially transformed” in the US; in such blended cases AMS should follow the rule as laid out in §60.200(g), e.g. such products could only say that the product was “processed in the US.” Thus, a bag of shrimp consisting of shrimps that were imported from country X and country Y and that were substantially transformed in the US, should be labeled “From country X, country Y and processed in the United States.”
Markings
AMS has asked whether section §60.300 of the interim final rule for fish and shellfish—which defines the types of markings permissible on covered commodities, in terms of types of labels allowed, placement, signs, locations, etc.—can be used for meat (beef, lamb, pork), perishable agricultural commodities and peanuts. We agree with AMS that the various provisions in section §60.200 can be used meat, perishable agricultural commodities, and peanuts. In particular, we note that §60.300(f) says that “State or regional label designations are not acceptable in lieu of country of origin labeling.” We agree with AMS on this point, unless AMS can specify enforcement. We note that in the 2003 proposed rule on COOL, AMS discussed various state labeling rules and why they would not be acceptable. AMS’ discussion of the Florida law, which is actively enforced, notes that “verification of a product’s origin generally consists of the inspector observing the primary container the product was packaged in to determine if the retailer has accurately characterized the origin of the product on the shelf. This enforcement program is based on a presumption of truthfulness that allows the retailer to rely on the information printed either on the shipping container or on the product itself. Therefore, AMS does not believe this type of enforcement program could serve as a model for enforcement of the Federal program” (68 FR, 61951, October 30, 2003). We strongly agree.
Remotely purchased products
AMS notes that consumers are increasingly purchasing products over the internet or for home delivery before they have a chance to look at the final package. In the 2002 proposed rule for the voluntary COOL (67 FR 63367), AMS stated that consumers should be made aware of the country of origin for a covered commodity before the internet or phone purchase is made. However, by the time of the 2003 proposed rule on mandatory COOL, AMS weakened this requirement so that the retailer must provide country of origin information at the time the product is delivered to the consumer. At that point, the consumer has already purchased the product and could use the COOL information only to decide whether to return it or not. We therefore believe the COOL information must be provided prior to the internet or phone purchase. We agree with the position laid out in the voluntary COOL proposal and think that consumers should be notified of the country of origin of the covered commodity before the purchase is made. In response to the 2002 voluntary COOL proposed rule, numerous commenters said that this would be almost impossible and impractical to do since this information changes rapidly depending on the location of the warehouse. To accommodate this concern, we would agree that the country of origin or the possible country(ies) of origins could be listed on the sales vehicle (i.e. internet site, home delivery catalog, etc.) as part of the information describing the covered commodity for sale.