Congress Passes and Overrides Veto of 2008 Farm Bill

28 May 2008 Publication
Authors: Michael D. Flanagan

Legal News Alert: Food Industry

The Food, Conservation and Energy Act of 2008, otherwise known as the Farm Bill, became law on May 22, 2008, after the U.S. Congress overrode a presidential veto by substantial margins in both houses. While many critics complained the bill provides generous subsidies to farmers during a time when Americans are faced with high food prices, Congress continued the traditional subsidy programs and added a new average crop revenue program that offers producers better options for managing risk of both yield and price declines. In addition to the farm subsidies, the Farm Bill provides an additional $10.3 billion for nutrition programs and expands the fresh fruit and vegetable snack program for school children. The Farm Bill contains at least two provisions that are of particular interest to the food industry: the modification of the country of origin labeling (COOL) program and a new catfish inspection and grading program that may be a precedent for expansion into inspection and grading of other types of fish.

Country of Origin Labeling
The Farm Bill amends the Agricultural Marketing Act of 1946 to provide new COOL requirements for beef, lamb, pork, and goat meat. It also amends the list of covered commodities to include chicken, macadamia nuts, ginseng, and pecans. (Note that peanuts were covered by the existing COOL law.) The provision specifies labeling requirements for products that are of U.S. country of origin, multiple countries of origin, imported for immediate slaughter, and from a foreign country of origin. For meat products to be eligible for U.S. country of origin, the product must be derived from an animal that was born, raised, and slaughtered exclusively in the United States (with a narrow exception for animals from Alaska or Hawaii and transported through Canada), or present in the United States on or before July 15th, 2008 and, once present in the United States, must have remained continuously in the United States.

For multiple countries of origin, a retailer of a covered commodity derived from an animal that is 1) not exclusively born, raised, and slaughtered in the United States, 2) born, raised, or slaughtered in the United States, and 3) not imported into the United States for immediate slaughter, may designate the country of origin of the covered commodity as all of the countries in which the animal may have been born, raised, or slaughtered.

A retailer of a covered commodity derived from an animal that is imported into the United States for immediate slaughter shall designate the origin as the country from which the animal was imported and the United States.

For foreign country of origin, a retailer of a covered commodity that is derived from an animal that is not born, raised, or slaughtered in the United States shall designate a country other than the United States as the country of origin of the commodity.

For ground beef, pork, lamb, chicken, and goat, the notice of country of origin for ground products shall include a list of all countries of origin or a list of all reasonably possible countries of origin.

A retailer of farm-raised fish or wild fish may designate the covered commodity as having a U.S. country of origin only if the covered commodity is hatched, raised, harvested, and processed in the United States. Wild fish must be harvested in the United States, a territory of the United States, or a state, or by a vessel that is documented under Chapter 121 of Title 46, United States Code, or registered in the United States, and processed in the United States, a territory of the United States, or a state, including the waters thereof, or aboard a vessel that is documented under Chapter 121 of Title 46, United States Code, or registered in the United States. The notice of country of origin for wild fish and farm-raised fish shall distinguish between wild fish and farm-raised fish.

For ginseng, peanut, pecan, or macadamia nut, the covered commodity can be designated as having a United States country of origin only if the covered commodity is produced exclusively in the United States. With respect to a covered commodity that is a perishable agricultural commodity, ginseng, peanut, pecan, or macadamia nut produced exclusively in the United States, designation by a retailer of the state, region, or locality of the United States where such commodity was produced shall be sufficient to identify the United States as the country of origin.

The Secretary of the United States Department of Agriculture (USDA) may conduct an audit of any person that prepares, stores, handles, or distributes a covered commodity for retail sale to verify compliance with this provision. A person must provide verification of the country of origin of covered commodities. Records maintained in the course of the normal conduct of the business, including animal health papers, import or customs documents, or producer affidavits, may serve as verification. The Secretary may not require a person that prepares, stores, handles, or distributes a covered commodity to maintain a record of the country of origin of a covered commodity other than those maintained in the course of the normal conduct of business. If the Secretary determines that the retailer or person engaged in the business of supplying a covered commodity to a retailer has not made a good faith effort to comply with the COOL provisions and continues to violate the law willfully after providing notice and an opportunity for a hearing before the Secretary with respect to the violation, the Secretary may fine the retailer or person in an amount of not more than $1,000 for each violation.

Catfish Inspection and Grading
The Farm Bill authorizes a voluntary, fee-based grading program at the USDA for catfish, to be performed by the Agricultural Marketing Service. Additional species of farm-raised fish or farm-raised shellfish may be added to the grading program through a petition process to the Secretary.

The Farm Bill also provides that catfish shall be an amenable species under the Federal Meat Inspection Act, and therefore will be subject to examination and inspection by the USDA’s Food Safety and Inspection Service (FSIS) when processed for use as human food. In conducting the inspections, FSIS is authorized to take into account the conditions under which the catfish are raised and transported to a processing establishment. Catfish will be subject to continuous inspection and imported catfish inspection programs must be found to be equivalent under USDA regulations before foreign catfish may be imported into the United States, which is consistent with current law for imported meat and poultry.

With significant opposition to expanding beyond catfish, inspection of additional species of fish and shellfish are not addressed in the Farm Bill. However, the Farm Bill Statement of the Managers to the conference report reminds the USDA that they have underlying authority within the Federal Meat Inspection Act to amend the definition of amenable species as they consider necessary and appropriate. Final regulations for grading and inspection activities are to be promulgated no later than 18 months after the date of enactment of the Farm Bill.


Legal News Alert is part of our ongoing commitment to providing up-to-the minute information about pressing concerns or industry issues affecting our food industry clients and colleagues. If you have any questions about this alert or would like to discuss this topic further, please contact your Foley attorney or any of the following individuals: 

 

Michael D. Flanagan
Milwaukee, Wisconsin
414.297.5834
mflanagan@foley.com

Vicki J. Hicks
Washington, D.C.
202.295.4073
vjhicks@foley.com

Mark Mansour
Washington, D.C.
202.672.5585
mmansour@foley.com

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