Thursday, November 20, 2014

Losing your Cool over COOL. It is (insert any time of day)--Do you know where your food comes from?

Here is an excellent example of a "Non-Tariff Barrier"(overt, non-monetary tax or quota) a country can impose on a good (or class of goods) coming into a country to (1) increase the price of that good or (2) discourage the importation of it.

The "Country Of Origin Labeling ("COOL")" requirement, part of the 2008 Farm Bill, on various food items is one such barrier.   

People like to know where their food comes from in the supply chain.

This imposes a financial burden on certain importers of food items. In this case it is beef producers:

Country of origin label for meat cuts endangered

The U.S. is running out of options in its effort to tell consumers where fresh cuts of meat originated after a successful challenge to package labeling by Canada and Mexico. 
A 2008 farm law requires that packages of steaks, ribs and other cuts of meat identify where the animals were born, raised and slaughtered. A label might say the meat was "born in Canada, raised and slaughtered in the United States" or "born, raised and slaughtered in the United States." 
The World Trade Organization agreed more than once with Canada and Mexico that the labels give the U.S. livestock industry an advantage. In a ruling Oct. 20, the WTO said the labeling requirement forced meatpackers to segregate and keep detailed records on imported livestock, giving them an incentive to favor U.S. livestock. 
The trade organization ruled in 2011 that an earlier version of the labels was discriminatory. That ruling was upheld in 2012 after a U.S. appeal.
 Canada filed a compliant with the World Trade Organization (WTO) and they prevailed.

The US can either ignore it and face retaliation in the form of tariffs on US exports to Canada and Mexico or Congress can modifiy the requirement to meet standards.

Advocates for keeping  COOL as it is are a strong group and it is in the interest of the Public to know where their food supply comes from. Lobbying groups for the goods that will face tariffs will put up a fight as well.  Exports and jobs are at stake.

Who will prevail?

Nice map showing the devolution of farm dependency in the US.

This image is via Big Picture Agriculture from a report by the Kansas City Federal Reserve Bank.

It shows how the US economy has devolved from dependency on agriculture. The Blueish Green areas represent, at the county level, that dependency in 1950 and 2000 (that is the latest date).

Observation: In the earlier time period agricultural interests and affects spread to far more people in rural areas.  Lets say it was more democratic in nature. This served as a counter-weight to the shifting power bases to/in urban areas.

Fast-forward to today. The politics of agriculture affect fewer people (nominally) and corporate interests have replaced the democratic nature of rural politics.

Policies of the bygone era had to appeal to tens of thousands of small business owners (farmers) with varied interests.  Today they have to only appeal to a concentrated number of large corporate farms with homogeneous interests.

Image via Big Picture Agriculture from a report by the Kansas City Federal Reserve Bank
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