a

GAO

United States General Accounting Office

Report to Congressional Requesters

August 2003 COUNTRY-OFORIGIN LABELING

Opportunities for 

USDA and Industry to 

Implement 

Challenging Aspects of 

the New Law

GAO-03-780
Several existing programs may be useful to USDA as models in implementing 

the new country-of-origin labeling law, including USDA’s school meals 

programs and the Department of Defense’s Subsistence Prime Vendor 

Program, which rely on contract certifications and compliance visits to 

verify origin. Florida’s experience with its labeling program may be useful in 

providing marking options and for using a state’s existing enforcement 

infrastructure to help administer the new law. Within industry, the fee-forservice meat grading programs and origin-identity programs, such as Vidalia®

onions, use affidavits from growers/producers to verify origin. However, as 

models, these programs have limitations because none was designed to 

address features of the new law that will present implementation challenges 

to USDA and industry, including how the law defines “domestic” meat and 

fish. The meat industry’s practice of not routinely maintaining origin identity 

for imported meat presents a further challenge. 

Most of the USDA attachés for 57 U.S. trading partners that we surveyed 

reported that their host countries require country-of-origin labeling for one 

or more of the commodities covered by the new law. Most countries with 

programs conduct routine inspections and impose fines for labeling 

violations. Additionally, practices also varied among the nation’s larger 

trading partners—Canada, Mexico, and Japan. Their own practices 

notwithstanding, some trading partners view new U.S. identity requirements 

as possible trade barriers. Survey results stratified by food product and by 

country are included in a special publication entitled Country-of-Origin 

Labeling for Certain Foods—Survey Results (GAO-03-781SP), which is 

available on the Internet at http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. 

The assumptions underlying USDA’s $1.9 billion estimate for the first-year 

paperwork burden on industry under the voluntary program are questionable 

and not well supported. They pertain to such things as the extent to which 

businesses were already keeping records and the cost per hour of developing 

and maintaining a record-keeping system. USDA has since compiled and 

published examples of routine records that businesses may already maintain 

that may be useful to verify compliance. Lastly, FDA proposes a recordkeeping mechanism for nearly all food businesses to protect the food supply 

from intentional tampering, which may be useful for keeping origin records. 

Timeline for Implementing the Country-of-Origin Labeling Law 

May 13, 2002 2002 Farm Bill with Country-of-Origin Labeling Law 

October 11, 2002 Voluntary Country-of-Origin Labeling Guidelines 

November 21, 2002 Estimate of Paperwork Burden for Voluntary Program 

Fall 2003 Proposed Final Rule to Implement Labeling Law to be issued 

September 30, 2004 Final Rule to Implement Country-of-Origin Labeling required 

September 30, 2004 Country-of-Origin Labeling Law takes effect in grocery stores 

Source: GAO. 

A provision in the 2002 Farm Bill 

requires grocery stores to identify 

certain commodities—beef, pork 

and lamb, fish and shellfish, fruits 

and vegetables, and peanuts—by 

country of origin. This provision 

also requires that an initial 

voluntary program be followed by a 

mandatory program by September 

30, 2004. GAO was asked to 

identify existing programs that 

might be useful to USDA in crafting 

the new program, to update a 1998 

USDA survey of major U.S. trading 

partners’ country-of-origin labeling 

practices, and to assess the 

reasonableness of the assumptions 

and methodology USDA used for 

estimating first year record-keeping 

costs. 

GAO is recommending that USDA 

collaborate with industry to 

identify alternatives for 

accomplishing such requirements 

as developing and maintaining 

records documenting country of 

origin of covered products, develop

an accurate estimate for recordkeeping costs, consult with the 

Bureau of Customs and Border 

Protection to develop an approach 

for informing the meat industry of 

its labeling responsibilities for 

imported meat under Tariff Act 

rules, and consider requesting 

Congress to make butcher shops 

and fish markets subject to the law 

through a technical amendment in 

order to provide a level playing 

field for the retail sale of meat, fish, 

and shellfish. 

www.gao.gov/cgi-bin/getrpt?GAO-03-780.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Erin Lansburgh 

at 202-512-3017 or Lansburghj@gao.gov. 

Highlights of GAO-03-780, a report to 

Congressional Requesters 

August 2003 

COUNTRY-OF-ORIGIN LABELING

Opportunities for USDA and Industry to 

Implement Challenging Aspects of the 

New Law 
Page i GAO-03-780 Country-of-Origin Labeling

Contents

Letter 1

Results in Brief 5

Background 8

Existing Programs May Be Useful As Models to Some Extent, but 

They Do Not Adequately Address Unique Features of the New 

Law 12

Most U.S. Trading Partner Countries Require Country-of-Origin 

Labeling at Retail for Foods Covered by the U.S. Labeling Law 23

USDA Used Questionable Assumptions in Its Estimate of the First 

Year Record-Keeping Costs for Compliance with the Voluntary 

Country-of-Origin Labeling Program 28

Conclusions 35

Recommendations for Executive Action 36

Agency Comments and Our Response 37

Appendixes

Appendix I: Scope and Methodology 40

Appendix II: State Programs that Require Country-of-Origin 

Identification at Retail for Foods Covered by the New U.S. 

Labeling Law 44

Alabama 44

Arkansas 45

Florida 45

Louisiana 46

Maine 47

Mississippi 47

North Dakota 48

Wyoming 48

Appendix III: Federal Programs that Require Origin Information 50

School meals programs (such as the National School Lunch and 

Breakfast Programs) 50

The Subsistence Prime Vendor Program 52

The National Organic Program 53

The Market Access Program 54

The Food For Peace Program 55

Meat Grading and Certification 55

USDA Process Verified Program 57

Seafood Inspection Program 57
Contents

Page ii GAO-03-780 Country-of-Origin Labeling

Appendix IV: U.S. Trading Partner Countries Surveyed and Their 

Country-of-Origin Requirements for Certain Foods 59

Appendix V: GAO Contacts and Staff Acknowledgments 60

GAO Contacts 60

Acknowledgments 60

Tables Table 1: Programs That Have Origin Identity or Related 

Requirements for Foods 13

Table 2: Selected Information on State-Implemented 

Country-of-Origin Labeling Programs 15

Table 3: Percentage of Covered Foods Imported in 2001, by 

Volume 19

Table 4: Summary of Country-of-Origin Labeling Practices for 57 

U.S. Trading Partners: Scope, Oversight, and Enforcement, 

by Product Category 24

Table 5: Top 10 U.S. Agricultural Trading Partner Countries, by 

Dollar Value (in thousands) 26

Figures Figure 1: Examples of Labels on Imported Produce in Florida 

Grocery Stores 16

Figure 2: Activities Involved in Bringing Beef to Consumers 22

Figure 3: Documents/Records That USDA Has Identified As 

Routinely Maintained in the Peanut Industry That May Be 

Useful to Verify Compliance with the Country-of-Origin 

Labeling Law 33

Abbreviations

AMS Agricultural Marketing Service

FDA Food and Drug Administration

GAO General Accounting Office

USDA U.S. Department of Agriculture

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Page 1 GAO-03-780 Country-of-Origin Labeling

United States General Accounting Office

Washington, D.C. 20548

A

August 5, 2003 Letr

The Honorable Tom Daschle

United States Senate

The Honorable Tim Johnson

United States Senate

A requirement that retail grocers identify certain agricultural products by 

country of origin was included in legislation passed in 2002.1

 According to a 

key sponsor of the legislation, a primary purpose of the law is to inform 

consumers of the origin of their food and permit them a choice of 

purchasing domestic or imported products. Beginning September 30, 2004, 

when the new law takes effect, grocery stores will have to clearly mark the 

products covered by the law—beef, pork, lamb, fruits and vegetables, fish, 

shellfish, and peanuts—with their country of origin. Stores will also have to 

indicate whether fish and shellfish (both domestic and imported) were 

farm raised or caught in open waters, such as rivers or oceans. The new law 

requires that both domestic and imported items be identified, and it sets 

specific criteria that must be met for a covered food to be labeled as a U.S. 

product. For example, for meat to carry a “product of the United States” 

marking, it must be from an animal exclusively born, raised, and 

slaughtered in the United States. 

The U.S. Department of Agriculture’s (USDA) Agricultural Marketing 

Service (AMS) is responsible for implementing the new country-of-origin 

food labeling law. To confirm compliance with the law, AMS may require 

anyone who prepares, stores, handles, or distributes a covered food to 

maintain a verifiable record keeping audit trail. However, the law prohibits 

AMS from introducing a mandatory identification system (such as animal 

ear tags) to verify country of origin. AMS may use written certifications 

from businesses to verify origin identity; it may also use existing programs 

as models for that purpose. To help it administer the program, AMS may 

enter into partnerships with states that have existing enforcement 

infrastructures. Retailers who intentionally violate the law face fines of up 

to $10,000 per violation. 

1

Title X, Subtitle I, Sec. 10816 of the Farm Security and Rural Investment Act of 2002, Pub. L. 

No. 107-171, 116 Stat. 533 (2002), generally referred to as the 2002 Farm Bill. This act 

amended the Agricultural Marketing Act of 1946, 7 U.S.C. 1621 (2000).
Page 2 GAO-03-780 Country-of-Origin Labeling

The law directs AMS to issue guidelines for a voluntary country-of-origin 

labeling program, which retailers may use until the mandatory program 

goes into effect.Those guidelines, which AMS issued in October 2002, 

define the scope of the foods to be covered (for example, salted peanuts 

are covered but peanut butter is not).2 They also require retailers to 

maintain records for a period of 2 years on the country of origin of covered 

foods they sell.3 Because the voluntary guidelines included this record 

keeping provision, AMS was required, under the Paperwork Reduction Act, 

to estimate the cost to industry of that new record keeping responsibility.4

In November 2002, AMS issued its estimate that the cost to industry to 

develop record keeping systems for the voluntary program and maintain 

those records the first year would be about $1.9 billion.5

 AMS based its 

estimate on assumptions regarding the number of hours that would be 

needed for each industry sector—producers, growers, fishermen, 

processors, importers, distributors, and retailers—to design a record 

keeping system and maintain the records, and on the hourly rates required 

for each industry segment to carry out those activities.6

In terms of a precedent for country-of-origin labeling, the Tariff Act of 1930, 

as amended, already requires most imported items to be marked with their 

country of origin through to the ultimate purchaser.7

 However, 

identification of country of origin is only required by the Tariff Act when 

imported items are wrapped; such labeling is not required when imported 

2

See Department of Agriculture, “Establishment of Guidelines for the Interim Voluntary 

Country of Origin Labeling of Beef, Lamb, Pork, Fish, Perishable Agricultural Commodities, 

and Peanuts Under the Authority of the Agricultural Marketing Act of 1946,” 67 Fed. Reg.

63367 (2002).

3

While the guidelines themselves are voluntary, they state, “for those retailers and other 

market participants who choose to adopt [the] ... guidelines, all of the requirements ... must 

be followed.” 67 Fed. Reg. at 63368 (2002). 

4

When a new regulation imposes a significant additional paperwork burden on industry, 

agencies are required, under section 2 of the Paperwork Reduction Act, 44 U.S.C. 3506 

(2000), to publish and obtain comments on an estimate of the cost of that burden.

5

Department of Agriculture, “Notice of Request for Emergency Approval of a New 

Information Collection,” 67 Fed. Reg. 70205 (2002). 

6

AMS did not estimate all costs associated with the voluntary program, nor did it develop a 

cost/benefit analysis. AMS will have to develop a cost/benefit analysis for the proposed rule 

to implement the mandatory program. 

7

See section 304 of the Tariff Act of 1930, as amended, 19 U.S.C. 1304 (2000).
Page 3 GAO-03-780 Country-of-Origin Labeling

foods are displayed, loose, in open grocery bins. In January 2000 we 

reported that meat packers and processors do not routinely maintain 

country-of-origin information, as required under the Tariff Act, on imported 

meat after it passes a USDA safety inspection. 8

 We also reported that U.S. 

Customs Service (now the Bureau of Customs and Border Protection), 

which administers tariff requirements, has not been enforcing those 

requirements for the meat industry.9

 The new law has provisions 

concerning origin identification—for example, new definitions for U.S. 

products and the requirement to distinguish between farm-raised and wild 

fish and shellfish, whether they are domestic or imported, which differ 

from the Tariff Act. 

As you requested, this report (1) examines how certain existing federal, 

state, and industry programs that include origin identity requirements 

address oversight, verification of origin, and enforcement, and assesses 

their applicability as models for USDA to use to implement the new 

country-of-origin labeling law; (2) identifies which U.S. trading partner 

countries require country-of-origin labeling at the retail level for foods 

subject to the new labeling law and how these programs are being 

implemented; and (3) assesses the reasonableness of USDA’s assumptions 

and methodology for estimating the cost to industry of the first year recordkeeping paperwork burden for the voluntary country-of-origin labeling 

program. You also asked us to update a 1998 report by USDA’s Foreign 

Agricultural Service—1998 Foreign Country of Origin Labeling Survey—

in which the Service surveyed its in-country attachés in 46 countries and 

the European Union on country-of-origin labeling practices in their host 

countries. 

As part of this study, we examined the Tariff Act requirements and Bureau 

of Customs and Border Protection regulations, which require origin 

identity for imported items, as they apply to the foods covered by the new 

country-of-origin labeling law. We also examined the following federal, 

state, and industry programs, which include origin identity or related 

8

See U.S. General Accounting Office, Beef and Lamb: Implications of Labeling by Country 

of Origin, GAO/RCED-00-44 (Washington, D.C.: Jan. 27, 2000). 

9

Pursuant to section 403 of the Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 

2135, 2178 (2002), the U.S. Customs Service transferred from the Department of the 

Treasury to the Department of Homeland Security. The activities discussed in this report are 

organized within the Bureau of Customs and Border Protection. 
Page 4 GAO-03-780 Country-of-Origin Labeling

requirements, for their usefulness as models for country-of-origin identity 

under the new law:

• School meals programs, such as the National School Lunch and 

Breakfast Programs, in which foods donated by the federal government 

or purchased with federal funds should be of U.S. origin. 

• The Subsistence Prime Vendor Program, in which foods purchased by 

the Department of Defense to feed military troops should be of U.S. 

origin.

• The National Organic Program, in which foods labeled “organic” must 

be grown—or, if from animals, raised—in accordance with the National 

Organic Act.

• Seafood Inspection Program, in which the quality certification of 

domestic fish and shellfish is maintained through to the commercial 

buyer/consumer.

• The Market Access Program, in which advertisements and other 

promotional activities paid for with federal funds, must be for 

agricultural goods that are 50 percent or more of U.S. origin.

• Food for Peace Program, in which USDA purchases U.S.-grown product 

(generally grain) from U.S. farmers for subsequent donation to poor 

countries.

• Process Verified Programs, in which USDA verifies that the identity of 

meat from animals raised with special handling or feeding, among other 

things, is maintained through to the consumer.

• Breed claim/grading programs, in which the identity of meat from 

animals—a breed certification (such as Angus beef)—or carcasses—a 

grade certification (such as USDA Prime)—is maintained through to the 

consumer.

• State programs that require country-of-origin identification for selected 

foods (such as Florida which requires imported produce to be marked 

with country of origin).
Page 5 GAO-03-780 Country-of-Origin Labeling

• Local government/industry-sponsored programs that promote specific 

foods linked to origin (such as Vidalia® onions, which must be grown in 

the proximity of Vidalia County, Georgia).

We also contacted the 50 states to identify state origin identity laws and 

programs. This report describes, but does not evaluate, the state programs. 

To determine country-of-origin practices of U.S. trading partners and 

update the 1998 Foreign Agricultural Service report, we surveyed the 

agricultural attachés for the key trading partner countries and the 

European Union that were surveyed in 1998, as well as other key trading 

partners, for a total of 57 countries.10 The 57 countries account for about 94 

percent of U.S. trading activity for food and animals. We asked about the 

country-of-origin requirements at retail in the host countries for fruits and 

vegetables, peanuts, fish and shellfish, and meat. We did not independently 

verify country practices or evaluate their programs. The results of our 

survey are summarized in this report. In addition, survey results stratified 

by food product and by country are included in a special publication 

entitled Country-of-Origin Labeling for Certain Foods—Survey Results

(GAO-03-781SP), which is available on the Internet at 

http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. 

Appendix I describes our scope and methodology in detail. 

Results in Brief While the methods and applicability of existing federal, state, and industry 

programs vary, several have features that may be useful to USDA as models 

for oversight, verification of origin, and enforcement for the country-oforigin labeling law. For example, both USDA’s school meals programs and 

the Department of Defense’s Subsistence Prime Vendor Program require 

contractors to certify that the foods they provide are of U.S. origin (i.e., 

from U.S. farmers and livestock producers). To verify the contractors’ 

certifications for these programs, USDA conducts periodic plant 

inspections and audits plant procedures for ensuring that no imported 

foods are used; DOD periodically audits contractor performance but has no 

procedures in place to verify that foods are of U.S. origin. USDA’s National 

10The 57 countries include the 15 member countries of the European Union. The attaché to 

the European Union Commission also completed a survey. In addition, USDA’s Foreign 

Agricultural Service asked us to survey 9 countries that have limited trade activity with the 

United States. We did not include the responses from those countries in our analyses. 
Page 6 GAO-03-780 Country-of-Origin Labeling

Organic Program uses independent agents—often state or local 

government employees or representatives of nonprofit groups—to certify 

and oversee compliance by farmers, livestock growers, processors, and 

handlers. Participants in the organic program must keep records for 5 

years; agents may recommend that USDA suspend or fine participants who 

violate program requirements. AMS’s “process verified programs” for the 

livestock and meat industries, such as the Red Angus program, are also 

models of using third-party inspections to verify origin; participants pay up 

to $5,000 annually for AMS inspections that may go back to an animal’s 

birth to confirm that meat is of superior quality and commands a higher 

price. Florida’s labeling program for imported fresh produce may be useful 

to USDA as a model for marking options and for using a state’s 

enforcement infrastructure to administer a country-of-origin labeling 

program. Local government/industry origin-identity programs, such as 

Vidalia® onions, are examples of using affidavits from growers to verify 

origin. For oversight and enforcement, these market-niche foods rely on 

retailers or other producers to spot violators. However, the usefulness of 

these programs as models has limitations because none was designed to 

address the unique features of the new law. Specifically, the new law 

requires that both domestic and imported items be labeled; it defines U.S. 

meat, fish, and shellfish differently than existing laws; and it requires the 

further identification of fish and shellfish as being either farm raised or 

caught in open waters. In implementing the law, USDA will be further 

challenged by the meat industry’s practice of not routinely maintaining 

origin identity on imported meat when it is subsequently cut or ground.

Our survey of agricultural attachés showed that of the 57 U.S. trading 

partner countries, 48 require country-of-origin labeling for one or more of 

the commodities covered by the new law and 44 also require domestic 

products to be labeled. Specifically, of the 57 countries, 46 require labeling 

at retail for produce (fresh or frozen); 34 for peanuts; 41 for one or more of 

the covered meats (fresh or frozen); and 39 for fish/shellfish (fresh or 

frozen). Most of the countries with country-of-origin labeling programs 

conduct routine inspections and impose fines for labeling violations. While 

European Union legislation mandates country-of-origin labeling 

requirements for many of the foods covered under the new U.S. law, the 

results of our survey of the agricultural attachés showed that 

implementation, enforcement, and verification practices varied among the 

15 member countries. Similarly, among the largest U.S. trading partners—

Canada, Mexico, and Japan—practices varied considerably. For foods 

subject to the new law, Canada requires country-of-origin labeling at retail 

only for imported prepackaged fruits and vegetables, Mexico requires it for 
Page 7 GAO-03-780 Country-of-Origin Labeling

all imported and domestic prepackaged foods, and Japan requires it for all 

imported and domestic loose and prepackaged foods. Finally, their own 

practices notwithstanding, certain trading partners have suggested that 

new U.S. country-of-origin labeling requirements may have a negative 

impact on trade; Mexico specifically suggested that the requirements 

amount to a nontariff barrier that conflicts with U.S. trade obligations. 

USDA used assumptions that are questionable and not well supported in 

developing its $1.9 billion estimate for the first year cost to industry to 

develop and maintain record-keeping systems for the voluntary country-oforigin labeling program. The key assumptions pertain to (1) the extent to 

which businesses are already keeping the necessary records, (2) the types 

and number of businesses that would have to keep records, (3) the number 

of hours that each affected business would have to spend in developing and 

maintaining a record keeping system, and (4) the cost per hour of 

developing and maintaining such a system. With regard to existing records, 

USDA assumed that all the record keeping would be a new burden, which 

is not always the case. For example, grocery stores are already maintaining 

country-of-origin records on certain fruits and vegetables for a period of 2 

years as required under another law. In determining the number of 

businesses covered by the law, USDA made an arbitrary assumption that 

about 90 percent of all farmers, ranchers, and fishermen (2 million) would 

be subject to record keeping; others, including authors of a University of 

Florida study, believe the figure is much lower. Furthermore, USDA could 

provide no documentation to support its estimates for the number of hours 

needed to develop and maintain a record-keeping system, and it assumed 

an hourly rate of $50 for processors to carry out these tasks, which was 

more than double the hourly rates it used in recent estimates for other 

programs. Shortly after USDA published its estimate, it compiled and 

published examples of routine documents and records that businesses may 

already maintain that may be useful for verifying compliance for each 

covered food and each industry sector in that food’s production. In 

comments to USDA on the estimate, industry groups provided information 

on, among other things, hourly rates and the time they believe they will 

need to set up and maintain an origin data system. Many commenters said 

USDA’s hourly rates and time estimates were too low, while others said 

they were too high. Although no grocery stores have participated in the 

voluntary program, some meat processing companies, in anticipation of the 

law’s implementation, have alerted their suppliers to keep records on 

where cattle that will go to slaughter after September 2004 were born and 

raised. Finally, a new requirement proposed by the Food and Drug 

Administration under authority of the Bioterrorism Act of 2002—that 
Page 8 GAO-03-780 Country-of-Origin Labeling

nearly all businesses in the food industry maintain certain records—may 

affect the cost to industry to comply with the country-of-origin labeling law 

and both industry’s and USDA’s efforts to implement the law. 

We are making several recommendations to (1) help industries comply with 

the new country-of-origin labeling law, (2) bring the meat industry into 

compliance with existing Tariff Act requirements, (3) ensure an accurate 

estimate of the record-keeping burden under the final program rules, and 

(4) create a level playing field for the retail sale of certain covered foods. In 

commenting on a draft of this report, USDA said that the report provides 

some useful guidance and input in implementing the complex country-oforigin labeling legislation. USDA disagreed with one recommendation—

that it should consult with the Bureau of Customs and Border Protection to 

develop an approach for informing the meat industry of its responsibilities 

under Tariff Act requirements—because it does not believe it has the 

authority to enforce the Tariff Act. We are not recommending that it 

enforce the Tariff Act but, rather, that it consult on an approach for 

informing meat packers and processors of their responsibilities under the 

Tariff Act. We believe the recommendation is important because, as a result 

of the long-standing practice in the meat industry of ignoring Tariff Act 

rules, consumers do not have the same information on imported meat that 

they routinely have for other imported items. We discussed this 

recommendation with the Bureau of Customs and Border Protection, 

which concurred on the value of USDA consulting on an approach to 

inform the meat industry of its Tariff Act responsibilities. 

Background The Farm Security and Rural Investment Act of 2002, commonly known as 

the 2002 Farm Bill, amends the Agricultural Marketing Act of 1946 by 

adding Subtitle D—Country of Origin Labeling. That subtitle, which we 

refer to as the country-of-origin labeling law, applies to the following 

foods:11

• muscle cuts of beef, lamb, and pork;

• ground beef, ground lamb, and ground pork;

• farm-raised fish and shellfish;

11See Pub. L. No. 107-171, Title X, Subtitle I, Section 10816 (2002).
Page 9 GAO-03-780 Country-of-Origin Labeling

• wild fish and shellfish (referred to in this report as fish and shellfish 

caught in open waters);

• perishable agricultural commodities (referred to in this report as fruits 

and vegetables); and

• peanuts.

The new law uses the definitions of a “perishable agricultural commodity” 

and “retailer” found in the Perishable Agricultural Commodities Act of 

1930, 7 U.S.C. 499a (2000). The 1930 act defines 

• perishable agricultural commodity as fresh or frozen fruits and 

vegetables of every kind and character and a 

• retailer as a dealer engaged in the business of selling a perishable 

agricultural commodity at retail that has annual invoice costs of 

perishable commodities in excess of $230,000.

AMS licenses retail food stores that are subject to the Perishable 

Agricultural Commodities Act. According to AMS, approximately 31,000 

outlets—typically grocery stores—are considered retailers under the 

Perishable Agricultural Commodities Act and would be subject to the 

country-of-origin labeling law. Because the law applies to stores that have 

annual invoices for perishable agricultural commodities—fruits and 

vegetables—of more than $230,000, some larger fruit and vegetable 

stands/stores would be subject to the labeling law, according to AMS 

officials; however, large butcher shops and fish markets would not be 

subject to the new law, because they would not have sufficient invoices in 

fruits and vegetables.12 Butcher shops and fish markets do not have to 

provide consumers with information on the origin of the foods they sell. 

Those businesses also would not incur the costs associated with 

maintaining origin information and labeling that grocery stores will incur 

for meat, fish, and shellfish under the new labeling law. 

12Small convenience stores and gasoline marts would not be subject to the labeling law 

because they would not have sufficient activity in fruits and vegetables, according to AMS 

officials. 
Page 10 GAO-03-780 Country-of-Origin Labeling

The new country-of-origin labeling law establishes criteria for food covered 

by the law to be designated as having a U.S. country of origin. Specifically, 

to be labeled a U.S. product:

• beef, pork, and lamb must come exclusively from an animal that is 

exclusively born, raised, and slaughtered in the United States;13

• fruits, vegetables, and peanuts must be exclusively produced in the 

United States; 

• farm-raised fish and shellfish must be hatched, raised, harvested, and 

processed in the United States; and 

• wild fish and shellfish must be harvested in waters of the United States, 

a territory of the United States, a state, or by a U.S.-flagged or U.S.-

registered vessel and processed in the United States, a territory of the 

United States, a state, or aboard a U.S.-flagged or U.S.-registered vessel.

The Tariff Act’s country-of-origin marking requirement for imported 

articles applies to the foods covered by the new law. For covered foods, 

both fresh and frozen, that are imported in consumer-ready packages, the 

Tariff Act rules require that the country of origin be marked on the 

individual packages, as well as on the carton or other container in which 

the packages were transported. In addition, under U.S. Customs Service 

rulings in 1983 and 1991, when produce items are removed from the 

marked containers and put loose into open bins in the produce section, the 

grocery store does not have to identify the items or the display bins by the 

items’ country of origin.14 If the usual marking rules referred to in these 

rulings concerning produce were applied by the Bureau of Customs and 

Border Protection, a grocery store that took unpackaged meat and seafood 

and displayed it loose in display cases would not have to identify the items 

by country of origin. As a result, fresh fruits, vegetables, peanuts, meat, 

fish, and shellfish; frozen shellfish; and live lobsters sold loose by item or 

weight would not require labeling. However, the crates, bags, or other 

13Beef would also be a U.S. product under the new law if it were from an animal exclusively 

born and raised in Alaska or Hawaii and transported for a period not to exceed 60 days 

through Canada to the United States and then slaughtered in the United States. 

14See U.S. Customs ruling HRL 722992. This ruling was interpreted in Customs ruling HRL 

733798 not to require marking because open bins or display racks were not determined to 

constitute “containers.” 
Page 11 GAO-03-780 Country-of-Origin Labeling

containers in which these imported food items are transported must be 

marked with country of origin. Tariff Act rules also require that imported 

foods that are repackaged in consumer-ready packages must be marked 

with their country of origin. 

In April 1999 we issued a report that examined the potential implications 

and benefits of country-of-origin labeling for fresh produce.15 Our report 

noted that grocery stores usually know the country of origin of the 

imported produce that they display in open bins, because they have the 

marked boxes or cartons in which the items were imported. We noted that 

state inspectors in Florida, a state that requires country-of-origin labeling 

for imported fresh produce, checked shipping boxes against the labeling 

signs that grocers placed on produce bins to verify the accuracy of the 

labels. 

In our January 2000 report on the potential implications of country-oforigin labeling for muscle cuts of beef and lamb, we found that meat 

packers and processors did not routinely maintain country-of-origin 

information on imported meat as required under the Tariff Act. We found 

that this was due in part to the fact that the Bureau of Customs and Border 

Protection does not generally enforce the act’s labeling requirement for 

meat after inspection at the border. We also said it might be due to the fact 

that USDA has given meat packers and processors different guidance on 

the need to maintain country-of-origin information. More specifically, 

USDA, which administers the Federal Meat Inspection Act, requires that 

the country of origin appear in English on all carcasses or containers of 

meat entering the United States. However, unlike Tariff Act rules, which 

require an imported product to maintain its import identity through to the 

ultimate purchaser, USDA considers imported meat to be part of the 

domestic meat supply once it passes a USDA safety inspection. Any 

subsequent cutting, blending, or grinding may be done without maintaining 

country-of-origin identity. Thus, grocery stores may not know whether the 

meat they sell is domestic or imported, let alone the country of origin of a 

particular package of meat. In fact, a package of fresh ground beef that 

carries a USDA inspection sticker may contain meat from domestic or 

imported cattle, or both. 

15See U.S. General Accounting Office, Fresh Produce: Potential Consequences of Countryof-Origin Labeling, GAO/RCED-99-112 (Washington, D.C.: Apr. 21, 1999).
Page 12 GAO-03-780 Country-of-Origin Labeling

Under the Tariff Act, animals maintain their foreign country identity. With 

regard to livestock, however, USDA considers imported livestock to be part 

of the domestic herd after the Animal and Plant Health Inspection Service 

inspects and releases the animals.16 Both Tariff Act rules and USDA 

regulations consider the meat from an imported animal to be domestic if 

the animal was slaughtered in a U.S. facility. 

Existing Programs May 

Be Useful As Models to 

Some Extent, but They 

Do Not Adequately 

Address Unique 

Features of the New 

Law

Several federal, state, and industry programs have features that may be 

useful as models to USDA for addressing oversight, verifying origin, and 

enforcing the new country-of-origin labeling law. However, the usefulness 

of these programs as models is limited because none of them was designed 

to address the unique features of the new law, such as the law’s definitions 

of U.S. products. Implementing the law across the meat industry is further 

complicated by the industry’s practice of not routinely maintaining the 

country-of-origin identity of imported meat after it has been cut or ground 

in a U.S. facility. 

Federal Programs Have 

Features That May Be 

Useful As Models

USDA’s school meals programs and the Department of Defense’s 

Subsistence Prime Vendor Program are examples of large programs that 

use certifications to verify the origin of food. Both programs also have wellestablished oversight and enforcement procedures. A number of other 

USDA programs, as well as the National Oceanic and Atmospheric 

Administration’s Seafood Inspection Program, have origin identity and 

related requirements. These programs use various means to verify origin, 

including third-party verifications and self-certifications; many also use 

oversight and enforcement options to ensure compliance. The smaller 

programs, such as process verified and meat grade and certification 

programs, demonstrate that the meat industry is able to maintain product 

identity when it is in its interest to do so. Such programs may be useful to 

USDA in bringing the meat industry into compliance when the mandatory 

regulations become effective. Table 1 describes selected features of federal 

programs that have origin identity or related requirements for foods.

16The Animal and Plant Health Inspection Service border inspection activities discussed in 

this report are now organized within the Bureau of Customs and Border Protection in the 

Department of Homeland Security. 
Page 13 GAO-03-780 Country-of-Origin Labeling

Table 1: Programs That Have Origin Identity or Related Requirements for Foods

Program Description

School meals programs (such as the National 

School Lunch and Breakfast Programs)

USDA requires that the fresh fruits and vegetables that it purchases for these programs 

must be domestically grown, processed, and packed, and that meats must be from 

domestic livestock.a

 Food suppliers certify in their contracts with AMS that the foods 

they provide will be domestic and that they will maintain records, such as invoices and 

production and inventory records that confirm that the food is domestic. Suppliers that 

handle both imported and domestic products must have written plans—segregation 

plans—that describe in detail how they will ensure that only domestic products will be 

provided to the programs. For example, for meat products, AMS conducts oversight 

visits to each supplier three times a year; these visits include examination of origin 

records. If violations are found, AMS may reject the food, suspend or debar the 

contractor, terminate the contract, impose fines, or take legal action, including criminal 

prosecution. 

Subsistence Prime Vendor Program The Department of Defense requires that food purchased for U.S. troops must be 

domestic. About 50 large wholesale suppliers—known as prime vendors—certify in 

their contracts that they and their subcontractors will provide only domestic food. The 

department performs compliance audits at least annually, which, although primarily 

focused on food quality, use observations and interviews with contract officials to verify 

that food was produced or processed in the United States. With respect to enforcement, 

the department can refuse the food or use a different prime vendor, but cannot assess 

fines.

National Organic Program Foods labeled as organic must be produced in accordance with the Organic Foods 

Production Act of 1990.b

 The program uses third-party verification, in the form of USDAapproved certifying agents, to verify that the food meets the organic rules. These 

certifying agents perform annual inspections and review the participants’ written annual 

plans for ensuring compliance with organic rules. Any person, including a retailer, who 

knowingly sells or labels a nonorganic product as "organic" may be subject to fines of 

up to $10,000 per violation (7 U.S.C. 6519 (2000)).

Market Access Program Federal funds help finance advertisements and other promotional activities for 

agricultural products that are at least 50 percent U.S. in origin. Program participants 

self-certify that their agricultural products meet the U.S. origin requirement. USDA’s 

Foreign Agricultural Service audits participants at least every 2 years, focusing primarily 

on the eligibility of program expenses. Payments made for ineligible expenses must be 

reimbursed. 

Food for Peace Program The U.S. government sells agricultural commodities—for example, wheat, rice, 

cornmeal, feed grains, vegetable oil, soybeans, and soybean meal—to developing 

countries under long-term credit arrangements. Participant growers and processors 

self-certify that the commodities are 100 percent U.S. in origin. USDA does not verify 

compliance with origin requirements for the commodities.

USDA Process Verified Program Through this fee-for-service program, USDA verifies quality claims made by producers 

and marketers of livestock and fruits and vegetables. AMS, at a cost of about $5,000 

annually per participant, conducts independent, third-party audits of participants’ 

production and manufacturing processes to confirm that they maintain consistent 

quality. For livestock, companies have their marketing claims, such as breed or feeding 

practice claims, verified by USDA; they can then market as “USDA Process Verified” to 

their customers. In some cases, verification includes tracking animals back to the farms 

where they were born and raised. Companies that do not adhere to their approved 

procedures may be suspended from participating.
Page 14 GAO-03-780 Country-of-Origin Labeling

Source: GAO analysis of federal program information.

a

Almost all public and some private nonprofit schools are subsidized by USDA for each complete 

school meal served, regardless of household income; lunches and breakfasts for children from lowincome households receive greater subsidies.

b

See Organic Foods Production Act of 1990, 7 U.S.C. 6501 (2000).

Appendix II contains additional information on these federal programs, 

including program scope, objectives, oversight, and enforcement.

State Country-of-Origin 

Labeling Programs Also 

Have Features That May Be 

Useful as Models to USDA 

Eight states have implemented country-of-origin labeling programs, and 

each includes at least one of the commodities covered by the new countryof-origin labeling law. 17 Based on our discussions with program officials in 

eight states and our review of program documents, one state has countryof-origin labeling programs for meat and shellfish, three have programs for 

fish only, two have programs for meat only, and two have programs for 

fruits and vegetables (see table 2).18 Two of the states—Florida and 

Maine—have had more than 10 years’ experience operating labeling 

programs. Although their programs are limited in scope relative to the new 

national program, their first-hand experiences may be helpful to USDA, 

particularly with regard to marking/labeling options, initial implementation 

issues, and using states’ enforcement infrastructures to administer a 

country-of-origin program. 

Meat Grading and Certification Programs AMS inspectors grade and/or certify meat at the request of meatpackers on a fee-forservice basis. Certification services, such as breed claims (e.g., “Certified Angus 

Beef”), consist of evaluating meat for compliance with specification and contractual 

requirements. Grading, such as “USDA Prime” or “USDA Choice,” involves visual 

inspections using USDA standards. These premium grade and certification identities 

follow the meat through the distribution chain to the retail level, including restaurants 

and retail markets.

Seafood Inspection Program: The National Oceanic and Atmospheric Administration, on a fee-for-service basis, 

inspects and quality-grades domestic fish and shellfish. According to program officials, 

the inspected seafood is sold primarily to foreign markets that require this third-party 

certification of quality. 

(Continued From Previous Page)

Program Description

17For this report, a state-implemented country-of-origin labeling program is one that is active 

statewide and includes oversight by some level of state (or state-delegated) government. We 

also identified four states—Idaho, Kansas, South Dakota, and Tennessee—that have 

country-of-origin labeling laws that have not been implemented.

18We did not independently evaluate the state laws/programs.
Page 15 GAO-03-780 Country-of-Origin Labeling

Table 2: Selected Information on State-Implemented Country-of-Origin Labeling 

Programs

Source: GAO analysis of state country-of-origin labeling programs.

a

Louisiana labeling rules also indicate that imported meat can be labeled imported or indicate the 

country of origin.

b

In Maine, domestic potatoes must be labeled as a U.S. product; apples grown in Maine must be 

labeled as a Maine product. 

Also as shown in table 2, all of the states require retailers to label the 

covered imported foods—five with the country of origin, two with the word 

“imported,” and, in Louisiana, which has two separate programs, the 

shellfish program names the country of origin and the meat program uses 

the word “imported” or names the country of origin. Four state programs 

and Louisiana’s meat program also require covered U.S. foods to be 

labeled, and Maine requires U.S. apples and potatoes to be labeled. Some 

require the foods to be identified as American or from the United States; 

others allow the food to be identified by its state of origin. 

Most states provide some flexibility in how the country of origin can be 

shown. For example, Florida allows labeling to appear on the item or in the 

display areas near the food; signage can be handwritten or printed and of 

varying size. Figure 1 shows examples of labels and marking options used 

on imported produce in Florida grocery stores. 

State Products covered Product labeling

Alabama Catfish U.S./state or “imported”

Arkansas Fish U.S./state or import country 

name

Florida Produce, bee pollen, and 

honey

Import country name

Louisiana (two 

programs)

Meat U.S. or “imported” or import 

country name

Shrimp, crawfish, crab, and 

crabmeat

Import country namea

Maine Produce Import country nameb

Mississippi Catfish U.S./state or “imported”

North Dakota Meat U.S. or import country name 

Wyoming Meat Import country name
Page 16 GAO-03-780 Country-of-Origin Labeling

Figure 1: Examples of Labels on Imported Produce in Florida Grocery Stores
Page 17 GAO-03-780 Country-of-Origin Labeling

Most of the eight states use their state department of agriculture staff to 

conduct compliance inspections at retailers, while the rest use their health 

departments or other state staff. Inspections are generally carried out at 

least once a year, in conjunction with other labeling and sanitation 

inspections. In Florida grocery stores, we observed inspectors examining 

shipping containers in storage areas to verify the accuracy of labels on 

display cases in the produce areas. Some states require retailers or 

distributors to maintain records for covered commodities. 

With regard to enforcement, all eight states have the authority to take some 

action against a retailer who violates the labeling requirements, and six 

have the authority to impose fines. During 2002, three states—Alabama, 

Florida, and Mississippi—fined retailers and others for violating their 

country-of-origin labeling requirements. See appendix III for more 

information on the eight states’ country-of-origin labeling programs.

Some State and Industry 

Marketing Programs May Be 

Useful as Models to USDA

We also found a number of state- and industry-supported marketing 

programs for foods that provide examples of using affidavits and 

certifications from growers or producers to support product origin. For 

oversight and enforcement, at least a portion of these programs relies on 

retailers, growers, producers, or others to spot violations. Some aspects of 

these state and industry programs may be useful as models to USDA.

For example, more than half of the states have marketing programs for 

products grown or produced locally. These programs make promotional 

materials or slogans available to producers from their states. In order to 

participate in these programs, many states require participants to register 

with their state’s department of agriculture. For example, Alaska requires 

participants to complete an application that includes an affidavit of 

eligibility stating that the participant takes full responsibility for proper use 

of the state logo, “Alaska Grown,” in accordance with the policy 

requirements of the program. Arizona also requires participants to request 

and receive written permission to use the state logo, “Arizona Grown.” 

Breach of any of the provisions of the Arizona program may result in 

termination of the participant’s use of the promotional materials. 

Oversight and enforcement for a number of these state programs rely on 

retailers, growers, producers, and others to spot violators and report them 

to state program officials. An official from one state told us that the state’s 

program does not include inspections; however, the official knew of no 

instances where the state logo was used without permission. Programs also 
Page 18 GAO-03-780 Country-of-Origin Labeling

exist for products produced in areas within a state. For example, Vidalia® 

is a trademark for a variety of sweet yellow onions grown in a 20-county 

production area in Georgia. The Georgia Department of Agriculture 

registers all Vidalia® onion producers and packagers each year and has the 

authority to collect license fees for use of the trademark. Producers must 

apply for a license from the Georgia Department of Agriculture to sell 

Vidalia® onions and to use the Vidalia® mark. On the application, which is 

submitted annually, a grower must state the type of onions planted, total 

number of acres, and location. According to a director of markets, 

complaints of misuse of the Vidalia® label are investigated as soon as 

possible; any penalties assessed are based on the number of violations, 

their seriousness, and the circumstances involved. 

With regard to industry marketing programs, the majority of states in the 

U.S. have a beef quality assurance program that alerts buyers that the meat 

has met certain quality criteria. The goal of this type of voluntary program 

is to ensure safe and nutritious beef for the consuming public and to 

maximize consumer confidence. The national guidelines for these 

programs, issued by the National Cattlemen’s Beef Association, include 

standards on feed additives, medical treatment, and record keeping for 

program participants. Records must be kept for 2 years. In the South 

Dakota beef quality assurance program, a receiving log is kept that includes 

the verified source of delivered cattle. Another industry program with 

producer certifications involves the use of affidavits by beef producers to 

certify that their livestock did not consume feed containing specific 

materials and additives. This program began because of demand from large 

purchasers who wanted to purchase animals that were grown on feed 

meeting selected standards.

Unique Features of the New 

Law and Meat Industry 

Practices Present 

Implementation Challenges

While federal, state, and industry programs may be useful as models to 

USDA up to a point, they do not adequately address the unique features of 

the new country-of-origin labeling law. In particular, the new law requires 

that both domestic and imported items must be identified by their country 

of origin and defines domestic meat, fish, and shellfish differently than 

under Tariff rules or in existing programs. In addition, the new law also 

requires that imported and domestic fish and shellfish be further 

differentiated as farm raised or “wild” (caught in open waters). 

Implementing a program of this scope and size will be challenging for 

USDA. Implementing it for meat will be further complicated by meat 

industry practices. 
Page 19 GAO-03-780 Country-of-Origin Labeling

By requiring that both domestic and imported items be identified, the law 

puts a new compliance burden on U.S. industries involved with the covered 

foods, including their production and distribution streams. As shown in 

table 3, the United States imported over 83 percent of fish and shellfish, by 

volume, in 2001—the most recent year for which USDA has compiled these 

data. However, for the rest of the covered foods, the United States 

produced more than it imported. 

Table 3: Percentage of Covered Foods Imported in 2001, by Volume

Source: USDA’s Economic Research Service.

But the extent of the new burden is not clear. According to many industry 

representatives, the burden will be substantial. Others believe it will be 

small compared to the benefit to consumers of knowing where their food 

comes from. Currently, consumers have that information on many foods. 

For example, imported canned foods and foods that are imported in 

consumer-ready packaging, such as imported leg of lamb, are marked with 

their countries of origin. The new country-of-origin law brings in most 

other foods that are not necessarily origin-identified today. Of the few 

remaining foods, including poultry, a bill has been introduced that proposes 

to make poultry and goat subject to the new country-of-origin labeling 

law.19

Regarding definitions of a U.S. product, the new country-of-origin labeling 

law defines U.S. and imported meat, fish, and shellfish differently than 

those foods have traditionally been defined under Tariff Act rules and 

federal programs. For example, under Tariff rules, meat from an animal 

Covered food Percentage imported

Beef 11.6

Pork 5.1

Lamb 39.8

Fish and shellfish–fresh and frozen 83.3

Fruit–fresh and frozen 23.1

Vegetables–fresh and frozen 16.6

Peanuts 9.1

19HR 2270, introduced on May 22, 2003, would amend the Agricultural Marketing Act of 1946.
Page 20 GAO-03-780 Country-of-Origin Labeling

born or raised for some period of time outside the United States is 

considered to be part of the domestic meat supply if the animal is 

slaughtered in the United States. Similarly, under Tariff Act rules, fish or 

shellfish caught in foreign waters or by a foreign-documented ship are 

considered domestic if they are processed in the United States or aboard a 

U.S. flagged ship, according to Bureau of Customs and Border Protection 

officials. In these examples, the meat, fish, and shellfish do not satisfy the 

new law’s “born, raised, and slaughtered” or “harvested and processed” 

criteria to be considered domestic. As noted earlier, the new law stipulates 

that to be a U.S. product 

• meat must be “exclusively from an animal that is exclusively born, 

raised, and slaughtered in the United States;”

• farm-raised fish must be “hatched, raised, harvested, and processed in 

the United States;” and

• “wild” fish must be “harvested in waters of the United States, a territory 

of the United States, or a State,” or by a U.S. flagged or U.S. registered 

ship and “processed in the United States, a territory of the United States, 

or a State, including the waters thereof” or aboard a U.S.-flagged or U.S.- 

registered ship.

USDA’s school meals programs and the Department of Defense’s 

Subsistence Prime Vendor Program define “domestic” foods differently. 

USDA uses the Tariff rule’s definitions for domestic meat, fish, and 

shellfish, while the Department of Defense uses a slightly different 

definition for meat that describes imported meat that is further cut or 

ground in a U.S. facility as “domestic.” 

With regard to the new law’s requirement to identify fish and shellfish—

both domestic and imported—as either farm raised or caught in open 

waters (wild), fishermen know the origin of their catch. We were told by 

the seafood manager of a grocery chain distribution facility for one chain of 

grocery stores that for some species, such as salmon, some individuals in 

the distribution channels that have a long history of handling fresh seafood 

may be able to distinguish farm raised from wild fish based on appearance, 

but that would not be the case, generally. Therefore, unless the fisherman 

identifies the fish and shellfish with origin information, the processors, 

handlers, and/or grocers will have no way to determine origin.
Page 21 GAO-03-780 Country-of-Origin Labeling

Finally, with regard to practices in the meat industry, in January 2000 we 

reported that meat packers and processors do not routinely maintain 

country-of-origin information on imported meat as required under the 

Tariff Act. As our 2000 report stated, this is due in part to the fact that the 

Bureau of Customs and Border Protection does not generally enforce the 

act’s labeling requirement for imported meat after inspection at the border. 

We believe it is also due to the fact that USDA’s Food Safety and Inspection 

Service has given meat packers and processors different guidance on the 

need to maintain country-of-origin information. Unlike Tariff Act rules, 

which require an imported product to maintain its import identity through 

to the ultimate purchaser, USDA considers imported meat to be part of the 

domestic meat supply once it passes a USDA safety inspection; any 

subsequent cutting, blending, or grinding may be done without regard to 

country-of-origin identity. Figure 2 shows the activities involved in bringing 

imported beef, beef from imported cattle, and beef from domestic cattle to 

consumers.
Page 22 GAO-03-780 Country-of-Origin Labeling

Figure 2: Activities Involved in Bringing Beef to Consumers
Page 23 GAO-03-780 Country-of-Origin Labeling

Most U.S. Trading 

Partner Countries 

Require Country-ofOrigin Labeling at 

Retail for Foods 

Covered by the U.S. 

Labeling Law

Most of the 57 U.S. trading partner countries, including the 15-member 

countries of the European Union, whose practices we surveyed through 

USDA’s agricultural attachés require country-of-origin labeling for one or 

more commodities covered under the new U.S. law.20 However, key trading 

partners have indicated that they may view new U.S. marking requirements 

as possible trade barriers. 

Most U.S. Trading Partners 

Require Country-of-Origin 

Labeling for Some Foods

Of the 57 U.S. trading partner countries, 48 require country-of-origin 

labeling for one or more of the commodities covered by the new law and 44 

also require domestic products to be labeled. Our survey of USDA attachés 

for these countries showed that 46 countries require labeling at retail for 

produce (fresh or frozen); 34 for peanuts; 41 for one or more of the covered 

meats (fresh or frozen); and 39 for fish or shellfish (fresh or frozen). See 

table 4. 

20We did not analyze or independently verify the foreign laws/programs.
Page 24 GAO-03-780 Country-of-Origin Labeling

Table 4: Summary of Country-of-Origin Labeling Practices for 57 U.S. Trading Partners: Scope, Oversight, and Enforcement, by 

Product Category

Source: GAO.

Note: The European Union countries’ requirements for meat apply only to beef.

Among U.S. trading partners, however, country-of-origin labeling 

requirements vary. Several countries require labeling for all foods covered 

by the new U.S. law, including, for example, Argentina, Australia, and 

Japan. In Argentina and Japan, both domestic and imported foods must be 

labeled, while in Australia, domestic foods sold loose do not have to be 

labeled. Other U.S. trading partners have country-of-origin labeling 

requirements for only some of the products in our survey. For example, 

Canada requires country-of-origin labeling at retail only for prepackaged 

imported fruits and vegetables, while Mexico requires such labeling for 

both imported and domestic prepackaged foods. 

The agricultural attachés reported that most countries surveyed do have 

routine inspections to check for compliance with their country-of-origin 

labeling regulations. In addition to inspections, many countries have 

enforcement penalties and fines. For example, after incidents of 

mislabeling in Japan, the government increased the penalty for violations 

Labeling required

Product category

Imported 

products

Domestic 

products

Routine 

inspections

Enforcement actions 

or penalties

Fish/shellfish/seafood—fresh (farm raised) 30 27 27 29

Fish/shellfish/seafood—fresh (wild) 27 24 24 26

Fish/shellfish/seafood—frozen 37 29 31 37

Fruits and vegetables—fresh (loose) 26 24 25 26

Fruits and vegetables—fresh (packaged) 38 34 33 36

Fruits and vegetables—frozen 34 28 27 34

Meat—cuts 35 33 30 35

Meat—frozen 41 36 33 40

Meat—ground 34 31 27 33

Peanuts—(loose) 17 11 15 16

Peanuts—(packaged/canned) 34 27 28 33
Page 25 GAO-03-780 Country-of-Origin Labeling

to a maximum of 100,000,000 yen, or approximately $833,000.21 In contrast, 

in Austria the maximum penalty is 7,267 Euros (about $8,400).22 In addition, 

in certain countries the penalties for mislabeling food products can include 

destruction of the product, the loss of a business license, or imprisonment. 

The European Union legislation imposes country-of-origin labeling 

regulations for fruits and vegetables, fish and shellfish, and beef. According 

to the responses to our survey, a few member countries, including Finland, 

France, and Spain additionally include country-of-origin labeling 

requirements for peanuts. Most of the member countries have routine 

inspections; however, enforcement actions appear to differ among the 

countries. For example, in Denmark, if routine inspections reveal that a 

food is not correctly labeled, the inspector can issue a warning or a fine at 

his discretion. In contrast, in Portugal, if the country-of-origin indication is 

missing, government officials seize the food. If the supplier can prove the 

product origin, the product can be relabeled and reintroduced in the 

market; if origin cannot be proven, the food must be destroyed.

Key Trading Partners Have 

Country-of-Origin Labeling 

Programs but See New U.S. 

Requirements as Possible 

Trade Barriers

Although many U.S. trading partner countries have country-of-origin 

labeling programs for one or more commodities covered by the new U.S. 

law, certain countries, including Canada, Mexico, and Australia, have 

expressed concern that new U.S. identity requirements may have a negative 

impact on trade. These countries are among our largest trading partners in 

agricultural commodities, as shown in table 5. 

21This conversion was provided to us by the Foreign Agricultural Service attaché for Japan 

on March 18, 2003.

22This conversion was calculated using the May 2003 monthly conversion rate published by 

the Federal Reserve Board.
Page 26 GAO-03-780 Country-of-Origin Labeling

Table 5: Top 10 U.S. Agricultural Trading Partner Countries, by Dollar Value (in 

thousands) 

Source: U.S. Department of Agriculture’s Foreign Agricultural Service.

In written comments to USDA, Canadian officials stated that the U.S. 

country-of-origin labeling law would restrict trade, especially in the red 

meat sector. For example, according to the officials, currently some U.S. 

ranchers import cattle from Mexico and Canada to raise them for slaughter. 

If, to reduce compliance costs, U.S. retailers choose to not handle beef with 

more than one country of origin (e.g., cattle born in Canada and raised and 

slaughtered in the United States), the market for these cattle would 

disappear. Of the foods covered by the new U.S. law, Canada requires 

country-of-origin labeling at retail only for prepackaged imported fresh 

fruits and vegetables.

The government of Mexico is also concerned about the impact of a U.S. 

country-of-origin labeling law. Although Mexico requires country-of-origin 

labeling for imported and domestic prepackaged foods that are covered by 

the new U.S. law, it does not require such labeling for imported fresh fruits, 

vegetables, and peanuts sold loose and imported unpackaged meat cuts, 

fish, and shellfish. Specifically, Mexican officials wrote in comments to 

USDA that U.S. country-of-origin labeling requirements would impose an 

unnecessary, burdensome, complicated, and expensive requirement on 

producers, exporters, importers, and retailers, thereby erecting barriers to 

trade in Mexican produce, meat, and seafood destined for the United 

States. As such, according to Mexican officials, the regulations amount to a 

nontariff barrier that conflicts with U.S. trade obligations under the North 

American Free Trade Agreement and the World Trade Organization. In 

Country U.S. imports U.S. exports Total

Canada $10,347,720 $8,653,774 $19,001,494

Mexico 5,518,418 7,251,596 12,770,014

Japan 373,663 8,367,629 8,741,292

China 1,001,354 2,067,125 3,068,479

Netherlands 1,750,406 1,173,414 2,923,820

Korea 151,069 2,674,184 2,825,253

Italy 1,789,921 545,623 2,335,544

Australia 1,894,019 338,000 2,232,019

Taiwan 174,757 1,953,229 2,127,986

France 1,486,239 390,467 1,876,706
Page 27 GAO-03-780 Country-of-Origin Labeling

addition, the officials noted that small suppliers in Mexico have neither the 

staff nor the expertise to comply with the U.S. country-of-origin labeling 

requirements. 

Australian government officials have also expressed opposition to a 

mandatory U.S. country-of-origin labeling law. Australia requires countryof-origin labeling for all imported foods covered by the new U.S. law, but 

not for domestic foods sold loose or unpackaged. In comments to USDA, 

the Australian government wrote that these regulations could act as 

barriers to trade by discriminating against imported products in favor of 

domestic products and by imposing significant compliance costs on 

overseas producers. As a result, U.S. consumers will have fewer choices 

when purchasing food and perhaps higher priced domestic foods. In 

addition, Australian officials believe that the U.S. country-of-origin labeling 

regulations conflict with the more liberal stance taken by the U.S. 

concerning other agricultural issues. 

Japan requires country-of-origin labeling for all foods covered by the U.S. 

law. Following the May 2003 discovery that a breeding cow had died of 

bovine spongiform encephalopathy (BSE)—commonly known as mad cow 

disease—in Alberta, Canada, Japan wrote to USDA regarding the country 

of origin of beef imported from the United States. Specifically, in a June 10, 

2003, letter, Japan instructed USDA that the United States cannot export 

beef or beef products to Japan that come from cattle born, raised, or 

slaughtered in Canada. The letter stated that, effective July 1, 2003, beef 

and beef products exported to Japan from the United States must be 

accompanied by the USDA health certificate for the animal from which the 

meat was derived, indicating where the animal was born, raised, and 

slaughtered. USDA asked Japan to postpone the effective date pending 

discussions among the countries—Japan, Canada, and the United States. 

On June 25, 2003, Japan announced that it agreed to postpone the effective 

date until September 1, 2003. 

A detailed presentation of the responses to our survey of the agricultural 

attachés for each of the 57 countries is being released as a special 

publication entitled Country-of-Origin Labeling for Certain Foods— 

Survey Results (GAO-03-781SP), which is available on the Internet at 

http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. 
Page 28 GAO-03-780 Country-of-Origin Labeling

USDA Used 

Questionable 

Assumptions in Its 

Estimate of the First 

Year Record-Keeping 

Costs for Compliance 

with the Voluntary 

Country-of-Origin 

Labeling Program

Many of the assumptions that USDA used in developing its estimate of the 

first year record-keeping costs for compliance with the voluntary countryof-origin labeling program are questionable and not well supported. The 

key assumptions for USDA’s estimate that these first-year costs for 

developing and maintaining a record keeping system would be about $1.97 

billion pertain to the following:23

• the types and numbers of businesses that would have to keep records,

• the extent to which businesses were already keeping the necessary 

records,

• the number of hours that each affected business would have to spend in 

developing and maintaining a record-keeping system, and

• the cost per hour of developing and maintaining a record-keeping 

system.

In each area we have questions about what USDA assumed and/or the 

support for its assumptions.

The number of businesses required to keep records may be 

overstated. USDA made several assumptions and estimates pertaining to 

the number of businesses that would be required to maintain country-oforigin records. Taken together, these assumptions produce an upper bound 

for the number of businesses that might be affected. However, different 

assumptions would produce a lower number. For example, USDA assumed 

that nearly all producers would be required to maintain country-of-origin 

records even if they produced commodities not covered by the labeling law 

(e.g., grain producers), or produced covered commodities that were not 

sold through retail outlets in a form to which the labeling law applies (or 

not through retail outlets at all, such as by restaurants). USDA officials told 

us that they could not determine how many producers would not be 

required to maintain country-of-origin records, in part because many may 

23USDA’s estimate pertains to the cost of complying with voluntary guidelines. As such, it 

also is based on the assumption that all affected businesses will choose to comply. Since 

compliance is voluntary, it is possible that no one will comply, and that the actual cost of the 

voluntary guidelines will be zero. AMS officials, including the Administrator, told us that—

as of July 28, 2003—they were not aware of any retailers participating in the voluntary 

program. 
Page 29 GAO-03-780 Country-of-Origin Labeling

market both covered and non-covered commodities. So, after adding 

together the number of commercial farms and ranches in the United States 

(about 2.16 million) and an estimate of the number of commercial fishing 

vessels (100,000), USDA arbitrarily assumed that 10 percent of this total 

might not be required to maintain country-of-origin records. For purposes 

of estimating costs, this number was then rounded to 2 million affected 

producers. However, based on comments that USDA received on its 

estimate, there may be many more than 10 percent that would not be 

required to maintain country-of-origin records. For example, using USDA 

data, the authors of a study by the University of Florida International 

Agricultural Trade and Policy Center concluded that the number of 

producers of covered commodities, excluding fishing vessels, was about 

1.34 million.24 Using that figure and other assumptions, the study arrived at 

a much lower cost estimate.25 We do not know exactly how many 

producers would be affected by the labeling law. However, to the extent to 

which some producers would not be required to maintain country-of-origin 

records because they either do not produce covered commodities (e.g., 

potatoes used in potato chips) or their foods are not sold at retail grocery 

stores subject to the new law (e.g., they are marketed to restaurants or 

institutions) in a form for which the labeling law applies, then USDA’s 

estimate may overstate the record-keeping costs of compliance with the 

law.26

Some records on country of origin might already exist. In developing 

its cost estimate of the record-keeping burden, USDA assumed that all 

affected businesses would have to establish new record-keeping systems 

because it believed that at that time country-of-origin information was not 

required to be maintained by other federal statutes or regulations. As a 

result, USDA attributed all of the costs of maintaining these records to the 

new law. However, some of the record keeping may represent costs that 

businesses were already incurring. For example, since the release of 

USDA’s estimates, USDA officials have acknowledged to us that the 

Perishable Agricultural Commodities Act requires that retailers maintain 

24USDA used an estimate of approximately 100,000 fishing vessels that it believes could be 

affected by the country-of-origin labeling provision. The Department of Commerce’s 

National Marine Fisheries Service developed this estimate for USDA.

25John Van Sickle et al., “Country of Origin Labeling: A Legal and Economic Analysis.” 

University of Florida Institute of Food and Agricultural Science, May 2003.

26USDA officials believe that the number of producers that may fall into these categories for 

which the labeling law does not apply is small. 
Page 30 GAO-03-780 Country-of-Origin Labeling

records on fruits and vegetables that they sell for 2 years, the same period 

required by the voluntary country-of-origin labeling law. USDA agrees that 

those records may include information on country of origin and that the 

existing record-keeping system may be useful for the new law. In addition, 

ranchers in many states are maintaining records on their livestock because 

certain processors want this type of information. To the extent that 

businesses are already maintaining some of the records that the country-oforigin labeling law requires, then USDA’s estimate overstates the 

incremental costs properly attributable to the law. USDA has 

acknowledged that the record-keeping burden would be smaller than it 

originally estimated if some business records that verify country of origin 

are already being maintained because of some other federal requirement. 

USDA said that the purpose of the comment period on its cost estimate was 

to bring any examples of such other requirements to its attention. 

The number of hours required for record keeping is uncertain. 

Although USDA has indicated that it relied on prior experience with other 

programs in developing its estimate of the number of hours that each type 

of business would need to spend in the first year to develop and maintain a 

record-keeping system to comply with the country-of-origin labeling law, 

USDA had no specific estimate from other programs to serve as its basis. In 

particular, USDA has written that it drew upon its experience with the 

development, operation, and auditing of documented source verification 

programs operated under the USDA Process Verified Program in 

determining the average number of hours that producers, processors, and 

retailers, respectively, would spend complying with the country-of-origin 

labeling law. However, USDA officials told us that USDA does not possess 

documentation detailing the number of hours required to set up and 

maintain record-keeping systems under that program. In the absence of 

hard data, USDA officials told us that they relied on professional judgment. 

In addition, USDA officials told us that USDA does not have any 

documentation of any discussions with industry participants concerning 

the amount of time required for compliance with the country-of-origin 

labeling law. Our review of comments on USDA’s estimate shows that many 

industry representatives believe that USDA underestimated the number of 

hours that will be needed to set up and maintain a record-keeping system; 

others characterized the record-keeping burden as minimal because they 

already maintain records that may satisfy the new requirements. Therefore, 

we question the reliability of the estimates developed for complying with 

the record-keeping requirements of the law. 
Page 31 GAO-03-780 Country-of-Origin Labeling

USDA’s estimates of hourly costs for record keeping exceed 

estimates it used for other programs. USDA used higher estimates of 

the hourly cost of complying with the record-keeping requirements of the 

country-of-origin labeling law than it used in developing similar estimates 

for other programs and it has no documented evidence to justify these 

differences. According to the information sheet that USDA prepared on its 

estimated costs for complying with the labeling law, USDA used higher 

hourly wage rates than those reported by USDA’s National Agricultural 

Statistics Service and the Department of Labor’s Bureau of Labor Statistics 

because of its experience with the industry in the operation of programs 

aimed at tracking the origin of food products through a system. 

Specifically, USDA estimated that the hourly cost for producers would be 

$25, while it would be $50 for processors and other handlers and for 

retailers. In contrast, for the organic rule, USDA estimated that the hourly 

cost for producers and handlers to maintain records would be $23, while 

for the mandatory price-reporting rule USDA estimated that the hourly cost 

for processors, packers, and importers to maintain records would be $20. 

USDA officials told us that they estimated a higher hourly cost to maintain 

records for the country-of-origin labeling law because they believe that a 

computer system operator would be needed to maintain records to comply 

with that law because most food handlers and retailers handle a large 

variety of products produced at different locations.27 However, those 

officials also told us that USDA does not have any documented evidence to 

support using estimates that are so much higher than those it used for other 

rules and that USDA did not obtain industry concurrence that these higher 

estimates are appropriate. Accordingly, there is substantial uncertainty 

regarding the likely cost of complying with the country-of-origin labeling 

law. If the hourly cost turns out to be more similar to the estimated cost for 

other USDA programs, then, other things being equal, the cost of complying 

with the record-keeping requirements of the labeling law will be 

substantially lower than what USDA has estimated for first-year record 

keeping. 

To determine what information is contained in the records that accompany 

food to grocery stores, among other things, we visited food distribution 

centers and grocery stores in Florida and New Jersey and a grocery store in 

the District of Columbia. Officials at the distribution centers told us that 

existing records for receiving, storing, and shipping fresh produce and 

27For the mandatory price-reporting rule, USDA estimated an hourly cost of $50 for 

establishing the record-keeping system, but a $20 hourly cost for maintaining the records.
Page 32 GAO-03-780 Country-of-Origin Labeling

meat provide such information as the number of cases of product and the 

cost per case, but do not provide country-of-origin information for each 

box or carton of a product. Similarly, at three grocery stores we visited, 

officials told us that the records they currently receive from their 

distributors do not contain country-of-origin information, although the 

containers may be labeled. Both the distribution center and grocery 

officials believe that the record-keeping changes that may be needed to 

comply with the mandatory country-of-origin labeling law present 

challenges and will increase their costs. The officials also foresee other 

challenges from the need to segregate foods from different countries 

throughout the entire cycle—from the receipt of the food at the distribution 

centers down to the grocery store displays. Currently, distribution centers 

are designed to receive, store, and ship full pallets of products whenever 

possible. Under the new law, distribution center officials believe that they 

will need to segregate products, which may require them to increase the 

number of pallets needed to store the segregated food and require 

additional warehouse space. The officials also told us that their labor costs 

would likely increase because of the additional time needed to keep foods 

segregated throughout the distribution cycle. Similarly, at the grocery store 

level, officials told us that segregating the covered foods by country of 

origin would require additional display shelves and would increase the 

costs for signs and label-printing equipment, as well as possibly increasing 

labor costs for additional time and effort. Officials at one store told us that 

labeling such store-prepared items as mixed fruit salads by country of 

origin will take longer both for preparation and for labeling, resulting in 

higher costs. 

The costs that industry will incur for segregating and storing foods and for 

labeling products are not part of the paperwork burden and are not 

reflected in AMS’s estimate. AMS will have to estimate these and other 

industry costs, as well as federal costs to oversee and enforce the countryof-origin labeling law, as part of the cost/benefit analysis that must 

accompany the proposed rule implementing the law. AMS expects to issue 

the proposed rule in the fall of 2003. 

Shortly after USDA published its estimate, it compiled and published 

examples of routine documents and records that businesses may already 

maintain that may be useful for verifying compliance for each covered food 

and each industry sector in that food’s production. (See figure 3 for an 

example for the peanut industry.) In addition to the myriad written 

comments AMS received from industry on the estimate and the voluntary 

guidelines, AMS also reached out to industry in a series of “listening” 
Page 33 GAO-03-780 Country-of-Origin Labeling

meetings that senior AMS officials held across the country in an effort to 

better understanding industry’s concerns with record keeping and the 

voluntary program.

Figure 3: Documents/Records That USDA Has Identified As Routinely Maintained in the Peanut Industry That May Be Useful to 

Verify Compliance with the Country-of-Origin Labeling Law 

Many of the industry associations and individual businesses that 

commented to USDA on the cost estimate provided information on, among 

other things, hourly rates and the time they believe they will need to set up 

Official Inspection Certificates Warehouse storage receipts Conformations and memorandums of Purchase 

F&V-95 Worksheet Daily inventories by lots and sales 

Harvest Records Weight tickets Invoices on purchases 

Delivery Tickets Receiving records Receiving records 

Weight Tickets Official Inspection Certificates Sales tickets 

Pesticide application record F&V-95 Notesheets Account of Sales 

Sales tickets Invoices and Purchases Remilling / Blanching/ Transfer Records 

Warehouse storage receipts Ledger records of purchases Daily inventories by lots 

U.S. Customs Entry Forms Unloading tickets Ledger records of purchase 

Purchase Records U.S. Customs Entry Forms Mill Out-turn records 

Lost and damage claims documents UPC codes 

Production and Sales Contracts PLU labeling information 

 U.S. Customs Entry Forms 

 Official Inspection Certification and Positive 

 Lot and Identification 

 Tags and Seals

Peanuts

Farm Operator / Producer / Custom Broker Importer Buying / Warehouse – Storage Operator Sheller / Handler / Custom Blancher-Remiller / 

Processor / Crusher-Accumulators Responsibility

Provide enough information for an auditor to verify 

the County, State and/or Country where the product 

was grown.

Maintain the integrity of the identification system. 

Segregate peanuts according to the country 

designation. Segregate and control throughout the 

system and properly label product according to 

the country designation. 

Maintain the integrity of the identification system. 

Identify and segregate individual lots as to the 

country of origin. Properly label or identify all 

peanuts 

Examples of Records and Activities that may be useful.

Responsibility

The examples of documents and records listed in this table, although extensive, are not inclusive of all documents and records that may be useful to verify compliance with 

the Country of Origin Labeling provisions of the 2002 Farm Bill. Additionally, maintaining documents and records such as those listed as examples will not necessarily 

ensure compliance. The documents listed are examples only and are for the sole purpose of providing information for producers, processors, and retailers to consider when 

establishing records for verification purposes. During a compliance audit conducted by USDA, auditors will review any and all documents to the extent necessary to arrive 

at an accurate decision on the level of compliance.

Source: USDA.
Page 34 GAO-03-780 Country-of-Origin Labeling

and maintain a country-of-origin record-keeping system. The respondents 

expressed a wide range of opinions about the cost estimate; some believed 

that the costs were greatly overstated and that little additional effort would 

be required by retailers. Others wrote that the hourly rates and time 

involved in implementing the new requirements had been greatly 

understated by USDA. Although, as of July 28, 2003, no grocery stores have 

participated in the voluntary program, some meat processing companies, in 

anticipation of the law’s implementation, have alerted their suppliers to 

keep records on where cattle that will be the source of meat on grocery 

shelves as of September 30, 2004, were born, raised, and slaughtered. 

Lastly, a new requirement proposed by the Department of Health and 

Human Services’ Food and Drug Administration (FDA), under the authority 

of the Bioterrorism Act of 2002, may affect industry’s compliance costs and 

facilitate USDA and industry’s implementation efforts with regard to the 

new country-of-origin labeling law.28 Specifically, in May 2003, the 

department published a Notice of Proposed Rulemaking that would require 

the establishment and maintenance of records by nearly all businesses in 

the food industry, including processors, importers, handlers, distributors, 

and retailers.29 The records involved will allow FDA to identify the 

immediate previous source and the immediate subsequent recipient of 

most food. The purpose of the rule is to significantly improve FDA’s ability 

to respond to and help contain the serious adverse health consequences in 

the event of accidental or deliberate food contamination. In effect, FDA 

will have information from farm to table, or from point of import to table, 

on most food. Both import and domestic origin records would be a piece of 

the required information for certain points and may be a reasonable 

adjunct to add at the other points in the farm to table continuum. FDA must 

issue the final rules by December 12, 2003. The rules take effect by June 12, 

2004, for larger businesses (500 employees or more); by December 12, 2004, 

for smaller businesses (from 11 to 499 employees); and by June 12, 2005, 

for the very small businesses (10 or fewer full-time employees). 

28See the Public Health Security and Bioterrorism Preparedness and Response Act of 2002—

commonly known as the Bioterrorism Act of 2002—Pub. L. No. 107-188 (2002).

29Meat, meat products, and egg products, which are exclusively regulated by USDA, are 

excluded from FDA’s regulation.
Page 35 GAO-03-780 Country-of-Origin Labeling

Conclusions Existing programs that include an origin requirement may be useful to 

AMS, up to a point, as models for overseeing compliance, verifying origin, 

and enforcing the new country-of-origin labeling law. In fact, these 

programs may be quite useful for implementing the program for fruits, 

vegetables, and peanuts, which generally comply with Tariff rules, because 

grocery stores generally know the country of origin of these foods. 

However, for meat, fish, and shellfish, we do not believe the existing 

programs will be particularly useful. This is largely due to the law’s unique 

definitions of a U.S. product for these items and its requirement to 

distinguish between fish and shellfish that are farm raised and those that 

are caught in open waters. Any procedures AMS puts in place to implement 

country-of-origin labeling will inevitably impose an additional burden on 

the U.S. meat, fish, and shellfish industries, and to a lesser extent on the 

fruit, vegetable, and peanut industries, if they are to provide assurance that 

country-of-origin identity is maintained. To address the origin identity gaps 

with minimal burden on the industries, USDA will benefit from knowing 

exactly what origin information is available at the various stages of the 

process for each of the covered foods. This information, as well as 

information on options for labeling foods, and other alternative industry 

practices, can best be learned directly from the industries. 

In addition, the extent to which the meat industry deviates from Tariff rules 

when it processes imported meat further complicates AMS’s 

responsibilities. Indeed, the earlier in the process that imported meat loses 

its identity, the more onerous the problem AMS and the industry face to 

ensure origin identity for meat. As we first reported in 2000, we believe the 

responsibility for the industry’s deviation from Tariff rules is due in part to 

USDA’s Food Safety and Inspection Service giving meat packers and 

processors different guidance on the need to maintain country-of-origin 

information. As a result, consumers, who already have origin information 

on imported items, including imported foods, do not routinely have this 

information on imported meat. 

We also conclude that the examples that AMS is providing to industry of 

documents that may be used to verify origin—and its efforts to reach out to 

industry in meetings across the country—are good exercises from several 

perspectives. Primarily, they provide a benefit to the industries to better 

understand their record-keeping burden associated with country-of-origin 

labeling. But perhaps just as importantly, they give AMS a better 

understanding of the industries and the steps that each covered commodity 
Page 36 GAO-03-780 Country-of-Origin Labeling

goes through to reach grocery stores. With this understanding, AMS can 

design a final rule that will afford both a reasonable assurance that countryof-origin identity is there for consumers and enable AMS to better estimate 

the paperwork burden on industry, when it prepares the estimate under the 

Paperwork Reduction Act, for the final rule. 

Finally, because the new law uses the definition of a retailer as contained in 

the Perishable Agricultural Commodities Act of 1930, which based the 

definition on annual invoices for perishable agricultural commodities, 

many fruit and vegetable stands are subject to the new country-of-origin 

identity requirements, while large butcher shops and fish markets are 

exempt. As a result, consumers may not have information they value on 

origin identity when they purchase meat, fish, and shellfish from butcher 

shops and fish markets; those businesses also would not incur the costs 

associated with maintaining origin information and labeling, which grocery 

stores will incur for meat, fish, and shellfish. 

Recommendations for 

Executive Action

To help industry comply with the country-of-origin labeling law’s 

definitions for U.S. products and other new requirements, we recommend 

that the Secretary of Agriculture direct AMS to 

• recognize and address, in the final rules, the extent to which the new 

law’s definition of U.S. products, particularly for meat, fish, and 

shellfish, differ from the definitions in the Tariff Act of 1930; and 

• collaborate with industry to identify, to the extent practicable, different 

options or alternative practices for, among other things, developing and 

maintaining record-keeping systems and labeling covered foods. 

Because the meat industry has not consistently adhered to the Tariff Act’s 

requirements for maintaining country-of-origin identity after imported meat 

has been cut or ground, we further recommend that the Secretary of 

Agriculture direct the Food Safety and Inspection Service to consult with 

the Bureau of Customs and Border Protection to develop an approach for 

informing meat packers and processors of their responsibilities under 

Tariff Act requirements, with regard to maintaining the identity of imported 

meat. 

In addition, to ensure an accurate estimate of the paperwork burden on 

industry for developing a record-keeping system and maintaining records 

on country of origin for the final rule, we recommend that the Secretary of 
Page 37 GAO-03-780 Country-of-Origin Labeling

Agriculture direct AMS to work with industry associations to compile more 

accurate data on hourly rates, approximate number of hours, as well as the 

approximate numbers of growers, livestock producers, food processors, 

and other sectors subject to the new law. 

Finally, to create a level playing field for the retail sale of meat, fish, and 

shellfish, we recommend that the Secretary of Agriculture consider 

proposing that Congress include large butcher shops and fish markets 

among retailers subject to the country-of-origin labeling law through a 

technical correction to the law. 

Agency Comments and 

Our Response

We provided USDA a draft of this report for review and comment in 

meetings attended by officials from AMS, including the Administrator, and 

from the Food Safety and Inspection Service. We also discussed a relevant 

recommendation with the Bureau of Customs and Border Protection and 

provided relevant draft segments to the Department of Defense.

USDA believes that the report provides some useful guidance and input in 

implementing the complex country-of-origin labeling legislation. However, 

USDA did not agree with our recommendation for the Food Safety and 

Inspection Service to consult with the Bureau of Customs and Border 

Protection to develop an approach for informing meat packers and 

processors of their responsibilities under Tariff Act. According to USDA, 

the Food Safety and Inspection Service cannot do this because it does not 

have authority to enforce the Tariff Act. We agree that the Food Safety and 

Inspection Service does not have authority to enforce the Tariff Act. We are 

not recommending that it do so; rather, we are recommending that it 

consult with the Bureau of Customs and Border Protection so that together 

they can develop an approach to bring the meat industry into compliance 

with Tariff Act rules regarding imported meat. USDA further asserts that, 

under the Federal Meat Inspection Act, once imported meat products 

undergo safety-related inspection activities, they are “deemed and treated 

as domestic”. Notwithstanding the requirements of the Federal Meat 

Inspection Act, the Tariff Act still requires that imported items be marked 

with their country of origin through to the ultimate purchaser—who, 

generally, would be the consumer. USDA’s assertion does not address the 

fact that the meat industry fails to routinely follow Tariff requirements for 

imported meat. USDA also asserts that any guidance it provides can only 

relate to the Federal Meat Inspection Act and that we do not sufficiently 

explain that act and its complexity. While a detailed analysis of the Federal 

Meat Inspection Act is beyond the scope of this study, we believe the 
Page 38 GAO-03-780 Country-of-Origin Labeling

explicit guidance that the Food Safety and Inspection Service provides to 

meat packers and processors under that act—that following safety-related 

inspection activities, imported meat is deemed domestic—is the point of 

confusion with regard to industry’s compliance with Tariff rules. We believe 

our recommendation is important because consultation between the Food 

Safety and Inspection Service and the Bureau of Customs and Border 

Protection could produce an approach to provide consumers with 

information they should already have under Tariff rules on the import 

origin of their meat. 

With regard to our recommendation for AMS to “collaborate with industry 

to identify, to the extent practicable, different options or alternative 

practices for, among other things, developing and maintaining recordkeeping systems and labeling covered foods,” USDA agreed that there 

would be benefit to this but expressed concern that the new country-oforigin labeling law does not provide AMS with authority to require a 

specific record-keeping system. We do not intend for AMS to be that 

prescriptive. Rather, our intent is that AMS build on the type of broad 

general guidance that it is already providing industry; specifically, in 

identifying existing industry records that may be useful for meeting recordkeeping requirements. Similarly, we envision that, based in part on its 

collaboration with industry, AMS could provide broad general guidance on 

other aspects of the law, such as signage alternatives for labeling covered 

foods. 

USDA had no comment on our recommendation that AMS consider 

proposing that large butcher shops and fish markets be subject to the 

country-of-origin labeling law, which we believe would create a more level 

playing field for the retail sale of meat, fish, and shellfish. USDA concurred 

with the other two recommendations. Finally, USDA stressed that the $1.9 

billion estimate for the record-keeping burden under the voluntary program 

does not reflect the full costs of implementing the law. We agree. We added 

language to clarify that this is not the total cost—but only the cost of the 

paperwork burden on industry—and that AMS will also have to develop a 

cost/benefit analysis for the proposed rule it plans to issue this Fall. USDA 

also provided technical suggestions, which we incorporated into the report 

as appropriate. 

The Deputy Executive Director of Trade Compliance and Facilitation, 

Office of Field Operations, Bureau of Customs and Border Protection, 

concurred on the value of having USDA consult with the Bureau on 

developing an approach for informing meat packers and processors of their 
Page 39 GAO-03-780 Country-of-Origin Labeling

responsibilities under Tariff Act requirements, with regard to maintaining 

the identity of imported meat. Lastly, the Department of Defense, through 

the Primary Action Officer for this study, confirmed that the Department 

concurred with the report’s treatment of the Subsistence Prime Vendor 

Program. 

We conducted our review from September 2002 through July 2003 in 

accordance with generally accepted government auditing standards. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

date of this letter. At that time, we will send copies of this report to 

congressional committees with jurisdiction over food safety issues; the 

Secretary of Agriculture; the Secretary of State; the Secretary of Defense; 

the Secretary of Commerce; the Office of the U.S. Trade Representative; the 

Director, Office of Management and Budget; the Commissioner of the 

Bureau of Customs and Border Protection; and other interested parties. We 

also will make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you have any questions about this report, please contact me or Erin 

Lansburgh at (202) 512-3841. Key contributors to this report are listed in 

appendix V.

Lawrence J. Dyckman

Director, Natural Resources 

and Environment
Page 40 GAO-03-780 Country-of-Origin Labeling

Appendix I

Scope and Methodology AAppenednxidexiIs

As you requested, this report (1) examines how certain existing federal, 

state, and industry programs that include origin identity requirements 

address oversight, verification of origin, and enforcement, and assesses 

their applicability as models for USDA to use to implement the new 

country-of-origin labeling law; (2) identifies which U.S. trading partner 

countries require country-of-origin labeling at the retail level for foods 

subject to the new labeling law and how these programs are being 

implemented; and (3) assesses the reasonableness of USDA’s assumptions 

and methodology for estimating the cost of the first year record-keeping 

paperwork burden to industry for the voluntary country-of-origin labeling 

program. You also asked us to update a 1998 report by USDA’s Foreign 

Agricultural Service—1998 Foreign Country of Origin Labeling Survey—

in which the Service surveyed its in-country attachés on the country-oforigin labeling practices in 46 countries and the European Union. 

To determine how existing federal, state, and industry programs that 

include origin identity requirements address oversight, verification of 

origin, and enforcement, and assess their applicability as models for USDA 

to use to implement the new country-of-origin labeling law, we interviewed 

officials and/or reviewed documents from USDA’s Agricultural Marketing 

Service, Farm Service Agency, Food Safety and Inspection Service, Animal 

and Plant Health Inspection Service, and Food and Nutrition Service; the 

Department of Defense’s Defense Logistics Agency; the Food and Drug 

Administration; National Oceanic and Atmospheric Administration; and the 

Bureau of Customs and Border Protection in the Department of Homeland 

Security (formerly the U.S. Customs Service in the Department of 

Treasury). We reviewed the new country-of-origin legislation and other 

related documents, including USDA’s voluntary country-of-origin labeling 

guidelines and comments submitted on those guidelines, comments from 

USDA’s listening sessions, congressional testimony, and examples of 

records and documents that may be helpful for verification purposes. We 

also visited two distribution facilities for supermarket chains (one in each 

of two states), three grocery stores (one in each of two states and one in 

the District of Columbia), and a meat packer processor that has a contract 

with USDA under the school meals programs. These locations were 

selected based on their proximity to our offices in Washington, D.C. and 

Atlanta, Ga, where the GAO analysts who conducted this study were 

located. 

The federal programs we examined were identified in the legislation itself, 

in the request letter for this study, and in discussions with USDA and Food 

and Drug Administration officials who are knowledgeable about origin 
Appendix I

Scope and Methodology

Page 41 GAO-03-780 Country-of-Origin Labeling

identity programs related to foods. To identify and collect information 

about state origin identity programs, we contacted all 50 states through the 

National Association of State Departments of Agriculture. We also 

interviewed state officials about origin programs in the following offices: 

the Alabama Department of Agriculture and Industries; the Arkansas State 

Plant Board; the Alaska Department of Natural Resources; the Delaware 

Department of Agriculture; the Florida Department of Agriculture and 

Consumer Services; the Georgia Department of Agriculture; the Hawaii 

Department of Agriculture; the Illinois Department of Agriculture; the Iowa 

Department of Agriculture and Land Stewardship; the Kansas Department 

of Agriculture; the Kentucky Department of Agriculture; the Louisiana 

Department of Agriculture and Forestry; the Maine Department of 

Agriculture, Food and Rural Resources; the Massachusetts Department of 

Food and Agriculture; the Mississippi Department of Agriculture and 

Commerce; the Missouri Department of Agriculture; the Nevada 

Department of Agriculture; the New Hampshire Department of Agriculture, 

Markets, and Food; the North Carolina Department of Agriculture and 

Consumer Services; the North Dakota Department of Health; the Oklahoma 

Department of Agriculture, Food, and Forestry; the Pennsylvania 

Department of Agriculture; the Tennessee Department of Agriculture; the 

Texas Department of Agriculture; the Virginia Department of Agriculture 

and Consumer Services; the Vermont Department of Agriculture, Food and 

Markets; the West Virginia Department of Agriculture; and the Wyoming 

Department of Agriculture. In addition, we reviewed legal and program 

documents associated with state country-of-origin and other labeling 

programs. We collected descriptive information about state country-oforigin labeling programs, such as their scope, labeling requirements, 

inspection activities, and enforcement penalties associated with the 

programs. During our review, we also identified a number of other state, 

local, and industry programs that included labeling or tracking of product 

origin; however, we did not identify all such programs. We did not evaluate 

the state, local, or industry programs included in our review. 

We also interviewed officials and/or reviewed documents from the 

American Meat Institute and visited a beef packing plant that supplies beef 

products to schools through the school meals programs to examine how 

imported animals and the meats produced from them were segregated 

throughout slaughtering, cutting, chilling, and other meat grading and 

certification activities that take place at meat plants. We also interviewed 

officials and reviewed documents from the Food Marketing Institute and 

visited food distribution facilities in Florida and New Jersey and grocery 

stores in Florida, New Jersey, and the District of Columbia to examine the 
Appendix I

Scope and Methodology

Page 42 GAO-03-780 Country-of-Origin Labeling

process for how the covered commodities are currently received, stored, 

distributed, and displayed at the retail level and existing record-keeping 

practices. In addition, we interviewed officials from the National Fisheries 

Institute, the Ranchers-Cattlemen Action Legal Fund, the United 

Stockgrowers of America, the Organization for Competitive Markets, the 

Livestock Marketing Association, the American Frozen Food Institute, the 

National Food Processors Association, and the American Peanut Council 

and Southern Peanut Farmers Federation. 

To identify which U.S. trading partner countries require country-of-origin 

labeling at the retail level for foods subject to the new labeling law and how 

these programs are being implemented, we surveyed the Foreign 

Agricultural Service attachés in 57 countries.1 These included 45 of the 46 

that the Foreign Agricultural Service surveyed in 1998. 2 We omitted Bosnia, 

which was included in the 1998 survey, because it is a recipient of food and 

aid and not a major agricultural trading partner. The 57 also included 7, all 

major produce trading partners, which we surveyed for our 1999 report 

Fresh Produce: Potential Consequences of Country-of-Origin Labeling.3

We included another 5 countries that were among the top 40 agricultural 

trading partners in 2001, but had not been included earlier. The 57 countries 

account for about 94 percent of U.S. foreign trading activity for food and 

animals. We received responses on all 57 countries. The countries we 

surveyed are listed in appendix IV. 

Before sending our survey, we pretested it with Foreign Agricultural 

Service officials in three countries. During these pretests, we interviewed 

the respondents to ensure that (1) the questions were clear and 

unambiguous, (2) the terms we used were precise, and (3) the survey did 

not place an undue burden on the staff completing it. The survey 

instrument had questions regarding the country-of-origin requirements at 

retail in the host countries for fruits and vegetables, peanuts, fish and 

1

The 57 countries include the 15 member countries of the European Union. We also 

surveyed the U.S. Mission to the European Union. 

2

In addition, we surveyed nine countries as suggested by the Foreign Agricultural Service 

that have limited trade activity with the United States. Bahamas, Bahrain, Barbados, 

Bermuda, Cayman Islands, Iceland, Jamaica, Kenya, and the Netherlands Antilles. We 

received responses from five of the nine countries and provided those responses to the 

Foreign Agricultural Service. We did not include the responses in the analysis for this report, 

which focuses on the activities among our major trading partners.

3

GAO/RCED–99-112 (Washington, D.C.: Apr. 21, 1999)
Appendix I

Scope and Methodology

Page 43 GAO-03-780 Country-of-Origin Labeling

shellfish, and meat. The information presented in this report regarding 

foreign countries’ labeling requirements, oversight, verification, and 

enforcement is based on information obtained from the survey and 

interviews. We did not analyze foreign countries’ labeling laws or 

regulations, independently verify countries’ practices, or evaluate their 

programs. The detailed results from our survey are available in a special 

publication entitled Country-of-Origin Labeling for Certain Food–Survey 

Results (GAO-03-781SP), which is available on the Internet at 

http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. 

To assess the reasonableness of USDA’s assumptions and methodology for 

estimating the cost of the first year record-keeping paperwork burden to 

industry for the voluntary country-of-origin labeling program, we 

interviewed officials from USDA’s Agricultural Marketing Service and 

reviewed agency documents including the Federal Register notices on the 

Guidelines for the Interim Country of Origin Labeling Program and the Cost 

Estimate of Paperwork Burden for record keeping under the Voluntary 

Program; comments received from industry, consumer groups, trading 

partner countries, and others in response to the Federal Register notices; 

questions and answers on the cost estimate published on the Agricultural 

Marketing Service’s Web page; the rules and regulations for implementing 

the Perishable Agricultural Commodities Act; other USDA documents; and 

the University of Florida International Agricultural Trade and Policy 

Center’s report entitled Country of Origin Labeling: A Legal and 

Economic Analysis; the Federal Register Notice and Rules regarding the 

Cost Estimate of the Livestock Mandatory Reporting Program; and the 

Regulatory Impact Assessment for the Final Rule Implementing the 

National Organic Program. 

We conducted our review from September 2002 to July 2003 in accordance 

with generally accepted government auditing standards.
Page 44 GAO-03-780 Country-of-Origin Labeling

Appendix II

State Programs that Require Country-of-Origin 

Identification at Retail for Foods Covered by 

the New U.S. Labeling Law ApendxiI

In contacting the 50 states, we identified 8 states with country-of-origin 

labeling programs that we considered implemented. We considered a 

labeling program to be implemented if it was active throughout the entire 

state and also had oversight by some level of state (or state-delegated) 

government. We did not audit the state programs; rather, we collected 

information about these programs through discussions with officials from 

the respective state agriculture and health departments. This appendix 

provides information about the scope of the programs, labeling options, 

inspections at the retail level, and enforcements actions for noncompliance 

with program requirements for 8 state programs, as provided in discussions 

with officials in each of the respective states. 

Alabama Alabama has a country-of-origin labeling program for catfish. At retail, both 

imported and domestic catfish must be labeled according to origin. 

Labeling for imported catfish must state "imported catfish." Labeling for 

domestic catfish must also indicate the source of the catfish: farm-raised, 

river or lake, or ocean. In addition, Alabama’s definition of catfish includes 

the order Siluriformes or family Anarhichadidae that include basa as a 

catfish. Basa is an imported fish that is frequently labeled as catfish. 

Retailers selling catfish products that are not wrapped or in a container 

may comply with labeling requirements by placing a sign on the display 

case or refrigeration unit reasonably visible to the consumer. Anyone 

selling river or lake catfish exclusively and directly to the consumer may 

place a sign reasonably visible to the consumer identifying the source of 

the catfish instead of labeling each individual container or package of 

catfish.

Alabama Department of Agriculture and Industry staff perform inspections 

of retail stores for compliance with country-of-origin labeling 

requirements. These inspections are done in conjunction with other 

labeling and food safety inspections. Inspections of retail stores are 

conducted approximately three times a year. Generally, inspections include 

reviews of display cases and storage areas, plus paperwork, if necessary. 

Alabama’s country-of-origin labeling program does not include a 

requirement that retailers maintain documents related to product origin. 

Penalties for noncompliance start with a warning, and subsequent 

violations can result in a civil fine of $500. During 2002, inspectors issued 

11 fines totaling $5,500 for various labeling violations.
Appendix II

State Programs that Require Country-ofOrigin Identification at Retail for Foods 

Covered by the New U.S. Labeling Law

Page 45 GAO-03-780 Country-of-Origin Labeling

Arkansas Arkansas has a program for fish. The suppliers, distributors, and retailers 

must label all packages of imported and domestic fish/catfish. 

Furthermore, catfish products must be specifically labeled by the 

processor, distributor or retailer to identify the source of production, such 

as “Farm-Raised Catfish,” “River or Lake Catfish,” “Imported Catfish,” or 

“Ocean Catfish.” Amendments to the law in 2003, by the Arkansas General 

Assembly, state that the term “catfish” may only be used when identifying 

any species of the scientific family Ictaluridae. 

Arkansas Bureau of Standards investigators inspect retail stores, 

processors, and packagers for compliance with program requirements. 

Staff conducting the inspections are already in retail stores checking for 

accuracy of labels concerning the weight and quantity of packaged meats 

and goods. These random inspections consist of checking display labels 

against paper records. These records consist mainly of affidavits signed by 

catfish suppliers that certify the origin of the product and that the product 

was packaged and processed in sanitary conditions. Retailers found to be 

in violation of the law can be assessed civil penalties. The law provides for 

a graduated system of penalties starting with a fine of $500–1,000 for a first 

offense, $800–2,000 for a second offense within 3 years of the first, and 

$1,500–2,500 for a third offense within 3 years.

Florida Florida has a country-of-origin labeling program for fresh produce, 

packages of bee pollen, and honey, at the retail level. Only imported 

products must be labeled under the Florida program. Labeling for these 

products must indicate the country of origin. The industry complies with 

the labeling program for imported products through a variety of means. 

Hand-lettered signs are placed in retail bins, individual stickers are placed 

on products naming the country of origin, and some stores use permanent 

printed signage. Other stores use signs in which lettered product items and 

origin information can easily be slipped into slots on the edges of display 

bins.

Florida’s Department of Agriculture and Consumer Services staff routinely 

inspect more than 40,000 retail, processing, and food establishments 

annually, with approximately 15,000 to 20,000 having imported produce 

sales. Florida food safety inspectors visit all food retailers about three 

times per year, to inspect such items as store cleanliness, food storage 

temperatures, meat handling procedures, and country-of-origin labeling of 

produce. Florida’s country-of-origin labeling program does not include a 
Appendix II

State Programs that Require Country-ofOrigin Identification at Retail for Foods 

Covered by the New U.S. Labeling Law

Page 46 GAO-03-780 Country-of-Origin Labeling

paperwork retention requirement. Inspections at retail stores involve 

verification of signs or labels of origin in the retail display areas with 

shipping containers in the storage and unpacking areas at each location. 

Penalties for noncompliance with Florida’s labeling law start with a 

warning to the retailer, and repeat violators are assessed administrative 

fines beginning at $200 and increasing if noncompliance continues. In some 

instances, calls are made to corporate headquarters, to ensure that the 

corporate managers are aware of the law and the need for compliance. 

State law provides for fines of $5,000 per violation, up to $20,000 per day. In 

one instance, a violator was fined $10,000 for repacking imported produce 

and presenting it as domestic. During 2002, inspectors issued 171 fines 

totaling about $57,000.

Louisiana Louisiana has a program for fresh and frozen meat, including ground meat. 

Louisiana expanded the program to include shrimp, crawfish, crab, and 

crabmeat. For meat, both imported and domestic products must be labeled. 

Retailers must label meat as American, imported, or a blend of American 

and imported meats. American meat is defined as meat processed at an 

American packing plant. If a store sells only American meat, it may put up a 

sign or placard stating this and does not have to label individual items or 

displays. For shrimp, crawfish, crab, and crabmeat, only imported products 

must be labeled to indicate the country of origin. When foreign shrimp, 

crawfish, crab, and crabmeat are combined with domestic products, the 

marking or label must clearly show the country of origin of the foreign 

products. The country of origin must be displayed on the container if the 

shrimp, crawfish, crab, or crabmeat is in package form. A sign designating 

the country of origin may be used for shrimp, crawfish, crab, and crabmeat 

sold in bulk from a display case.

Louisiana Department of Agriculture and Forestry officials inspect retail 

stores for compliance with the state’s country-of-origin labeling regulations 

in conjunction with other inspections, such as those for compliance with 

its general labeling laws. Inspections of retail stores are conducted at 

regular intervals. Inspections include reviews of display cases, storage 

areas, and paperwork, if required. Louisiana’s country-of-origin labeling 

program does require distributors to maintain documents related to 

country of origin on crawfish and shrimp. Penalties for noncompliance 

with the state’s country-of-origin labeling requirements start with a warning 

letter and may include a civil fine not to exceed $500 per violation/day. 

During 2002, inspectors did not issue any fines for noncompliance with 

Louisiana’s country-of-origin labeling requirements. 
Appendix II

State Programs that Require Country-ofOrigin Identification at Retail for Foods 

Covered by the New U.S. Labeling Law

Page 47 GAO-03-780 Country-of-Origin Labeling

Maine Maine has a country-of-origin labeling program for fresh produce at the 

retail level. With the exception of apples and potatoes, only imported 

products must be labeled under the Maine program. Labeling for these 

products must include the country of origin. Both domestic and imported 

apples and potatoes are required to be labeled. Fresh produce may be 

labeled individually, on the package, on the bin or with a placard near the 

produce, or it can be displayed in the original shipping container.

Maine Department of Agriculture, Food and Rural Resources staff perform 

inspections at the retail level. Inspections are performed in retail stores at 

least once a year. If violations are identified, then the store is inspected 

more frequently. Inspectors view produce displays for proper labeling. The 

country of origin can be shown by either a display placard or by individual 

labels on produce. If inspectors have a question about the source of an 

item, they check the shipping boxes in storage areas. If further clarification 

is needed, the inspectors can also review shipping invoices. Officials said 

that invoices tend to include the source of the product. Maine’s country-oforigin labeling program does not require retailers to maintain documents 

related to product origin. Penalties for noncompliance with Maine’s 

country-of-origin labeling requirements may include a civil fine of not more 

than $100. During 2002, inspectors did not issue any fines for 

noncompliance with Maine’s country-of-origin labeling requirements. 

Mississippi Mississippi has a country-of-origin labeling program for catfish at the retail 

level. Both imported and domestic catfish must be labeled at retail. 

Imported products do not have to be labeled with the country-of-origin, but 

must indicate that they are imported. Labeling for domestic catfish should 

include either the state of origin or indicate that the catfish is a product of 

the United States. Labeling for domestic catfish must also indicate the 

source of the catfish—whether it was farm raised or river caught. In 

addition, Mississippi’s definition of catfish is limited to two families of fish, 

but not others that include basa. Basa is an imported fish that is frequently 

labeled as catfish. Retailers selling catfish products not wrapped or in a 

container may comply with labeling requirements by placing a sign on the 

display case or refrigeration unit reasonably visible to the consumer. Any 

person selling river or lake catfish exclusively and directly to the consumer 

may place a sign reasonably visible to the consumer identifying the source 

of their catfish instead of labeling each individual container or package of 

catfish.
Appendix II

State Programs that Require Country-ofOrigin Identification at Retail for Foods 

Covered by the New U.S. Labeling Law

Page 48 GAO-03-780 Country-of-Origin Labeling

Mississippi Department of Agriculture and Commerce staff inspect retail 

stores for compliance with the law as part of their regular inspections 

under the food sanitation law. Inspections of retail stores are performed 

approximately once a year. Inspectors review display labels for country-oforigin labeling and storage areas. Retailers are required to keep records of 

their purchases of catfish and other fish for a period of 2 years after such 

purchases and sales have occurred. These records do not have to be 

maintained at the retail store. The penalty for noncompliance with the 

country-of-origin labeling requirements of Mississippi’s law is a civil fine of 

up to $1,000 for each violation. During 2002, the department found 11 

violations at one location and issued a fine of $1,800.

North Dakota North Dakota has a program for fresh beef, lamb, and pork, including 

ground products, sold at the retail level. Both imported and domestic beef, 

lamb, and pork must be labeled. Imported meats are labeled with their 

country of origin before they are delivered to the retail location. Meat 

received from a U.S. packing plant is considered a domestic product. Meat 

products must be labeled at the retail level with a clearly visible printed or 

written indication placed in the immediate vicinity of the food product. 

The North Dakota Department of Health is responsible for inspections at 

the retail level and the North Dakota Department of Agriculture conducts 

inspections at meat packers and processors. Inspections for compliance 

with country-of-origin labeling requirements are conducted at least once 

every 2 years in conjunction with the routine health inspections at retail 

locations. Health inspections in seven counties are performed by county 

staff in cooperation with the department and are conducted two to three 

times a year. There are no document retention requirements specific to this 

program. Anyone found in violation of the law is turned over to the county 

state’s attorneys office for filing of a complaint and possible legal action. To 

date, no such actions have been taken. 

Wyoming Wyoming has a country-of-origin labeling program for meat, including 

poultry, at the wholesale and retail level. Ground meat is not required to be 

labeled under Wyoming’s program. Every retailer and wholesaler who sells 

or offers meat for sale in Wyoming through an establishment or processing 

plant that is the product of any foreign country shall clearly label the meat 

as imported and include the country of origin. Meat processed in the United 

States is considered a domestic product. For imported meat sold 
Appendix II

State Programs that Require Country-ofOrigin Identification at Retail for Foods 

Covered by the New U.S. Labeling Law

Page 49 GAO-03-780 Country-of-Origin Labeling

unpackaged in a retail case, a visible placard stating the country of origin 

may be used instead of a label. 

Wyoming Department of Agriculture staff conduct inspections for 

compliance with the program in conjunction with food safety inspections 

required at the retail and wholesale levels. All establishments are riskassessed and then inspections are carried out accordingly. At a minimum, 

establishments are inspected at least once a year, which includes 

compliance with country-of-origin labeling requirements. Inspectors 

inspect meat and containers of raw meat received by the establishment or 

processing plant to verify that meat that is the product of a foreign country 

is clearly labeled. Wyoming does not have fines associated with its countryof-origin labeling program. If inspectors find a retail location is not in 

compliance, the inspector informs store personnel of the requirement to 

label imported meat. In order to fine a retailer, the department would have 

to take the retailer to court. This has not been done since the program’s 

inception. 
Page 50 GAO-03-780 Country-of-Origin Labeling

Appendix III

Federal Programs that Require Origin 

Information ApendxiI

This appendix provides additional information on the following federal 

programs that have origin identity or related requirements for foods.

• School meals programs

• Subsistence Prime Vendor Program

• National Organic Program

• Market Access Program

• Food for Peace Program

• Meat grading and certification programs

• USDA Process Verified Program

• Seafood Inspection Program

School meals programs 

(such as the National 

School Lunch and 

Breakfast Programs)

The school meals programs, administered by the U.S. Department of 

Agriculture’s (USDA) Food and Nutrition Service, operate in over 99,000 

public and nonprofit private schools and residential childcare institutions. 

Total funding for the programs were more than $6 billion in cash 

reimbursements and commodities for fiscal year 2002. Each day, the School 

Lunch Program provides meals to about 28 million children. The meals 

programs were established under the National School Lunch Act of 1946, 

42 U.S.C. 1751 (2000). 

USDA provides both cash reimbursements to participating schools and 

entitlement commodities purchased by USDA’s Agricultural Marketing 

Service and Farm Service Agency. The Agricultural Marketing Service 

purchases meat, fish, poultry, eggs, and fruit and vegetable products; the 

Farm Service Agency purchases other items, including peanut products, 

flour, grain, dairy products, oils, and shortening. About 20 percent of the 

dollar value of the food served in school lunches comes from USDA’s 

commodity purchase programs. State and local school food authorities 

obtain the remaining 80 percent of food either through direct purchases 

from manufacturers or distributors or contracts with food service 

management companies that procure the foods for them. 
Appendix III

Federal Programs that Require Origin 

Information

Page 51 GAO-03-780 Country-of-Origin Labeling

All federal purchases for the program must be of domestic origin. For meat 

or meat products, domestic origin is defined in USDA guidelines for 

suppliers as produced in the United States, from livestock raised in the 

United States, its territories, possessions, Puerto Rico, or in the Trust 

Territories of the Pacific Islands. However, the animals do not have to be 

born in the United States. For example, meat from animals born in Mexico 

or Canada and raised for some portion of time in the United States can be 

sold to AMS for use in school meals programs. 

Program Compliance and 

Enforcement

For meat, potential suppliers must apply for and receive approval from 

AMS to be eligible to supply meat for AMS’s commodity meat purchase 

program. The meat suppliers are required to maintain records including, 

but not limited to, invoices, production, and inventory records evidencing 

product origin, and to make such records available for review. These 

suppliers comprise an Approved USDA Domestic Product Suppliers List. 

Slaughterhouses and processors identify themselves as either “domestic 

only” (i.e., they handle only products manufactured from livestock raised in 

the U.S. or its territories) or “segregation plan” facilities (they handle 

products derived from both domestic and imported livestock). Imported 

livestock are defined as livestock imported for immediate slaughter that 

arrive at the plant in sealed trucks. The segregation plan prepared by 

suppliers and contractors handling both imported and domestic livestock 

must clearly describe how the company will ensure that no meat from 

imported animals is inadvertently included in school meals programs’ 

supplies; AMS must approve the plan before the company can become a 

contractor for USDA feeding programs. 

AMS audits both “domestic only” and “segregation plan” facilities three 

times a year with its staff of 20 auditors. When violations are found, AMS 

can take enforcement actions including remedial actions (e.g., provide 

training), rejecting the meat, suspension or termination of the contract, 

debarment, liability for damages, or criminal prosecution. The annual 

compliance cost to AMS is about $112,500. These costs, which include 

oversight of school meal meat contractors, are funded by user fees paid by 

the meat suppliers. Currently, AMS auditors perform about 250 meat 

supplier compliance audits per year at an average cost of about $450 per 

audit. The cost per audit is based on an hourly fee that is assessed for the 

time required to prepare for, conduct, and report the results of the 

assessments, and the time required to complete all related travel.
Appendix III

Federal Programs that Require Origin 

Information

Page 52 GAO-03-780 Country-of-Origin Labeling

Similarly, suppliers seeking to provide fruit and vegetable products to AMS 

for the school meals programs must complete an annual certification 

statement that all products are grown, processed, and packed in the United 

States. AMS uses five to six auditors who audit these suppliers based on a 

combination of random sample and risk assessment.

The Subsistence Prime 

Vendor Program

Since the early 1990s, the Department of Defense has used the “Prime 

Vendor” program to provide all food items, including food service 

equipment and operating supplies for U.S. land-based troops as well as for 

the U.S. Navy fleet and the U.S. Coast Guard. For food items, a partnership 

was created between the Defense Logistics Agency’s Defense Supply 

Center in Philadelphia and a number of small and large full-line commercial 

food distributors known as Prime Vendors. There are currently about 50 

Prime Vendors—located across the continental United States and foreign 

countries—that provide food items to military commands. Under the Prime 

Vendor Program, the department can take advantage of existing food 

distribution systems to obtain needed items much more quickly and 

inexpensively than through maintaining its own system, according to 

department officials. Inspectors spot-check deliveries at their destination 

for condition, identity, and quantity, including a visual check for domestic 

source requirements. The Berry Amendment has been included in 

Department of Defense appropriations bills for many years and codified 

into law; it requires that all food served to U.S.-based troops be of wholly 

domestic origin, including such ingredients as spices.1

Program Compliance and 

Enforcement

The Department of Defense annually audits Prime Vendors to ensure that 

food products meet contract specifications for quality and compliance with 

applicable statutes as well. The department has an auditing budget of 

approximately $430,000 annually; audits generally take about 2 days to 

complete. Audit teams are comprised of personnel from both the 

Department of Defense and other cognizant federal agencies, such as the 

National Marine Fisheries Service for audits of seafood or USDA for such 

items as poultry and beef. The audit team checks to ensure that food 

packaging bears the appropriate label. If the particular food item was not 

required to bear labeling showing the manufacturer or processor, the Prime 

1

See section 832 of the National Defense Authorization Act for Fiscal Year 2002, Pub. L. 

No. 107-107 (2001) (to be codified at 10 U.S.C. 2533a).
Appendix III

Federal Programs that Require Origin 

Information

Page 53 GAO-03-780 Country-of-Origin Labeling

Vendor or supplier is requested to provide confirmation of domesticity. 

Generally, this is accomplished through an interview with the Prime 

Vendor. If violations are found, the department notifies the Prime Vendor to 

immediately discontinue supplying the noncompliant items. 

This will have to change, however, because section 8136 of the fiscal year 

2003 Department of Defense appropriations act (Pub. L. No. 107-248 

(2002)) added a requirement for foods procured for U.S.-based troops. 

Specifically, seafood must be wholly domestic (i.e., caught on a U.S. flag 

vessel and processed in the United States). In addition, the Berry 

Amendment, as codified, exempts (1) certain groupings of items—such as 

tea in bulk, green coffee beans, and olive oil—that are not grown or 

produced domestically in sufficient quantities and (2) other foreign-grown 

products that are processed in the United States. Periodically, the 

Department of Defense and congressional representatives and potential 

suppliers have expressed concern about the requirement to purchase only 

domestic products.

The National Organic 

Program

The National Organic Program labeling requirements apply to raw, fresh 

products, and processed foods that contain organic ingredients. Foods that 

are sold, labeled, or represented as organic must be produced and 

processed following the organic program standards. The program is 

intended to assure consumers that the organic foods they purchase are 

produced, processed, and certified to consistent national organic 

standards. Labeling is based on the percentage of organic ingredients in a 

product and labels must include the USDA-approved certifying agent seal 

identifying that the organic products came from approved organic 

growers/handlers.

The program went into effect on October 21, 2002, and required that 

organic products be labeled all the way down to the retail level. The 

regulations also require that to be labeled organic, products had to be 

produced and handled by approved entities certified by USDA as 

accredited certifying agents. Certifying agents may be for-profit, not-forprofit, or governmental entities, but they are not employees of USDA. 

Program Compliance and 

Enforcement

If an allegation is brought against an operator, the certifying agent will 

review the allegation. If the certifying agent believes a violation has 

occurred, the operator is sent a letter detailing the allegation. The operator 
Appendix III

Federal Programs that Require Origin 

Information

Page 54 GAO-03-780 Country-of-Origin Labeling

is given time to comply; if the situation is not corrected, a revocation or 

suspension will be issued. In addition, civil penalties of up to $10,000 may 

be levied. 

The Market Access 

Program

USDA’s Foreign Agricultural Service uses funds from the Commodity Credit 

Corporation to administer the Market Access Program.2

 The program’s 

purpose is to encourage the creation, maintenance, and expansion of 

commercial export markets for U.S. agricultural commodities through such 

activities as consumer advertising and participation in trade fairs. Program 

funds are authorized through agreements using a cost-share assistance 

approach that provides for partial reimbursement of eligible promotional 

expenses to eligible trade organizations that implement a foreign market 

development program. Participants may receive assistance for either 

generic or brand promotion activities; for example, program funds have 

been used to promote a market for U.S. blueberries and a large orange juice 

cooperative. An eligible commodity must contain at least 50 percent 

domestic content. 

Program Compliance and 

Enforcement

In addition to the domestic content requirements, participants must submit 

travel and expense reports within required time frames. Records must be 

maintained for not less than 3 years after completion or termination of the 

agreement or not more than 5 full calendar years following the year of the 

transaction that is evidenced by such an account or record that took place, 

whichever is sooner. The Foreign Agricultural Service conducts 

compliance reviews of participants; each year approximately 50 percent of 

the participants’ records are reviewed, which accounts for approximately 

90 percent of the dollars awarded. All participants’ records are reviewed at 

least every 2 years, according to officials. Typical problems identified by 

these audits are ineligible expense submissions—such as excessive travel 

expenses or charges for product samples and business cards—or math 

errors. According to program officials, these situations are rectified by 

participant reimbursements for overpayment.

2

The Commodity Credit Corporation is a government owned and operated entity within 

USDA that was created to stabilize, support, and protect farm income prices. It also helps 

maintain balanced and adequate supplies of agricultural commodities and aids in their 

orderly distribution.
Appendix III

Federal Programs that Require Origin 

Information

Page 55 GAO-03-780 Country-of-Origin Labeling

The Food For Peace 

Program

The Food For Peace Program (known also as Title I, P.L. 480),3

administered by the Foreign Agricultural Service, provides for U.S. 

government sales of agricultural commodities to developing countries 

under long-term credit arrangements. Program commodities are used to, 

for example, combat hunger and malnutrition; promote broad-based 

equitable and sustainable development; and encourage the development of 

private enterprise and democratic participation in developing countries. 

The Farm Service Agency purchases the commodities supplied under the 

program, including wheat, rice, corn meal, vegetable oil, soybean meal, and 

soybeans. None of the agricultural commodities covered under the 

country-of-origin labeling requirements in the 2002 Farm Bill are currently 

included in the program. 

Under this program, all agricultural products a participating company 

provides are to be produced in the United States. Specific language 

outlining this requirement is clearly stated in each announcement. For 

example, the announcement explains that the provided commodities are to 

be of domestic origin, defined as being “manufactured, processed, mined, 

harvested, or otherwise prepared for sale or distribution from components 

originating the United States.” All commodities supplied by U.S. companies 

must be 100 percent domestic in origin; the only exception is if the 

commodity is not available “at a fair and reasonable price” on the domestic 

market.

Program Compliance and 

Enforcement

As part of the contract requirements, the suppliers attest that the products 

they provide are of domestic origin. Generally, USDA does not verify that 

products provided are actually of domestic origin only. 

Meat Grading and 

Certification

The Agricultural Marketing Act of 1946, as amended,4 authorizes the 

Secretary of Agriculture to provide voluntary federal meat grading and 

certification services that facilitate the marketing of meat and meat 

products. AMS administers the programs; its regulations provide that 

grading and certification services will be furnished for both domestic and 

imported meat. Federal meat grading serves a number of functions, 

3

See 7 U.S.C. 1691 (2000).

4

See 7 U.S.C. 1621 (2000).
Appendix III

Federal Programs that Require Origin 

Information

Page 56 GAO-03-780 Country-of-Origin Labeling

including aid to livestock producers in identifying and receiving prices 

commensurate with the quality and quantity of the livestock they produce 

and providing consumers, retailers, and institutions with a uniform supply 

of meat of the desired quality. Grading services consist of the evaluation of 

carcass beef, lamb, and pork for compliance with the grades of the 

appropriate official U.S. standard. Certification services consist of the 

evaluation of meat and meat products for compliance with specification 

and contractual requirements. Commercial meat purchasers, including 

restaurants and exporters, regularly use these services to ensure that the 

quality and yields of the products they purchase comply with their stated 

requirements. 

Under current regulations, a country-of-origin labeling mark must appear 

on imported carcasses before they can be graded. However, the mark is not 

required to remain on the cuts after processing, and the marks are 

sometimes removed during trimming. Meat packing plants segregate meat 

carcasses once they have been graded. For example, beef carcasses 

generally move through the fabrication phase of the plant segregated by 

grade such as prime, choice, and select. Some slaughter plants also have 

segregation plans for various certification programs including breed claims 

such as “Certified Angus Beef.” 

Program Compliance and 

Enforcement

AMS staff conduct about 800 reviews annually of USDA graded meat sold at 

restaurants and retail establishments to ensure the proper use of USDA 

nomenclature for beef and lamb products, referred to as P.L. 272 reviews.5

If violations are noted, appropriate remedial, administrative, and, if 

necessary, legal action can be taken to ensure compliance. AMS provides 

meat-grading services to industry on a “cost recovery” basis, which 

includes graders’ salaries, as well as the costs of supervision and 

management of the system. On average, grading services cost the beef 

industry about 38 cents per carcass. AMS’s meat grading services fee also 

covers the cost of its P.L. 272 meat grading reviews, which cost about 

$120,000 annually (800 reviews at an average cost of about $150 per 

review).

5

Public Law 272 amended, in 1955, at 69 stat. 553, the Agricultural Marketing Act of 1946. 
Appendix III

Federal Programs that Require Origin 

Information

Page 57 GAO-03-780 Country-of-Origin Labeling

USDA Process Verified 

Program

The USDA Process Verified Program is a voluntary program that provides 

livestock and meat producers an opportunity to assure customers of their 

ability to provide consistent quality products by having their written 

manufacturing processes confirmed through independent third-party 

audits. These suppliers are able to have marketing claims such as breed, 

feeding practices, or other raising and processing claims verified by USDA 

and marketed as “USDA Process Verified.” Some USDA-approved process 

verified programs track every animal from birth to the retail meat case. 

There are seven approved USDA Process Verified Programs—five pork and 

two beef. 

Program Compliance and 

Enforcement

Process verified meat suppliers are required to maintain records including, 

but not limited to, a complete copy of the applicant’s program 

documentation, including examples of all labels, tags, or other instruments 

used to identify animals or products; completed examples of all forms used 

in the program; and copies of all letters from consulting veterinarians, feed 

manufacturers, and tag manufacturers. Suppliers must agree to make such 

records available for review; all program documents must be retained for a 

period of at least 1 year. All approved programs are subject to 

unannounced annual compliance reviews by AMS auditors. An annual 

review costs about $5,000 and is conducted on a fee-for-service basis. AMS 

may suspend a company from the process verified program for a variety of 

reasons, including deliberate misrepresentation of the eligibility of 

livestock or products distributed under an approved program, failure to 

follow applicant’s approved policies and procedures, and failure to respond 

to corrective actions in the time frame provided. 

Seafood Inspection 

Program

The Seafood Inspection Program, administered by the National Oceanic 

and Atmospheric Administration within the Department of Commerce, is a 

voluntary fee-for-service program. The activities of the Seafood Inspection 

Program are authorized under the Agricultural Marketing Act of 1946, as 

amended. The Seafood Inspection Program routinely evaluates the safety, 

wholesomeness, proper labeling, and quality of fish and fishery products, 

as well as determining the adequacy of sanitation and hygienic practices of 

the processing facility and the safety of the processes used in the 

manufacture of food. These functions are similar to the functions 

performed by the inspection personnel of USDA and FDA toward ensuring 

that the consumer is provided with safe, wholesome, and properly labeled 

food of acceptable quality. 
Appendix III

Federal Programs that Require Origin 

Information

Page 58 GAO-03-780 Country-of-Origin Labeling

The National Oceanic and Atmospheric Administration employs about 130 

federal inspectors. Services can be provided nationwide and in U.S. 

territories, as well as in foreign countries. In addition to the federal 

inspectors, the National Oceanic and Atmospheric Administration has 

agreements with 16 states under which specific state government 

employees are cross-licensed to inspect seafood for the Seafood Inspection 

Program. The official forms and certificates issued by Seafood Inspection 

Program inspectors are accepted as prima facie evidence in any U.S. court.

Both farm-raised and wild fish and shellfish can be inspected. The Seafood 

Inspection Program inspects about 18 percent of the U.S. domestic seafood 

supply. Users of these services include vessel owners, importers/exporters, 

processors, distributors, retailers, and food service operators. The Seafood 

Inspection Program publishes a bi-annual listing of fish establishments and 

products of businesses that are under inspection contract with the Seafood 

Inspection Program. Some U.S. trading partners, such as the nations of the 

European Union, require that seafood inspection/certification be 

performed by government personnel. In fiscal year 2002, the cost of the 

Seafood Inspection Program was approximately $13.8 million.

Businesses participating in the Seafood Inspection Program can request 

several types of inspections, including quality grading. Products meeting 

specific quality requirements may bear an official mark or statement. For 

example, if a product is to be quality graded, it may be marked with the 

“U.S. Grade A” seal. Participating businesses may advertise the qualifying 

inspection marks. 

Program Compliance and 

Enforcement

According to Seafood Inspection Program officials, there are relatively few 

violations by participants in the Seafood Inspection Program. However, 

occasionally Seafood Inspection Program inspectors discover that a 

company has attempted to misrepresent or falsify claims; for example, a 

company may falsely indicate that a product meets European Union 

requirements when it does not. The National Oceanic and Atmospheric 

Administration’s Office of General Counsel provides guidance on a case-bycase basis for the appropriate response to an alleged offense. The National 

Oceanic and Atmospheric Administration may seek the imposition of 

administrative corrective action and/or criminal penalties by the proper 

federal, state, or local authorities.
Page 59 GAO-03-780 Country-of-Origin Labeling

Appendix IV

U.S. Trading Partner Countries Surveyed and 

Their Country-of-Origin Requirements for 

Certain Foods ApendxiIV

We surveyed the following 57 countries, which include the 15-member 

European Union:

Survey results stratified by food product and by country are included in a 

special publication entitled Country-of-Origin Labeling for Certain 

Food—Survey Results (GAO-03-781SP), which is available on the Internet 

at http://www.gao.gov/cgi-bin/getrpt?gao-03-781SP. 

Argentina Italy

Australia Japan

Austria Korea

Belgium Latvia

Brazil Luxembourg

Canada Malaysia

Chile Mexico 

China Netherlands

Colombia New Zealand

Costa Rica Norway

Czech Republic Panama

Denmark Peru

Dominican Republic Philippines

Ecuador Portugal

Egypt Russia

El Salvador Saudi Arabia

Estonia Singapore

Finland South Africa

France Spain

Germany Sweden

Greece Switzerland

Guatemala Taiwan

Honduras Thailand

Hong Kong Turkey

Hungary United Arab Emirates

India United Kingdom

Indonesia Venezuela

Ireland Vietnam

Israel
Page 60 GAO-03-780 Country-of-Origin Labeling

Appendix V

GAO Contacts and Staff Acknowledgments ApendxiV

GAO Contacts Lawrence J. Dyckman (202) 512-3841

J. Erin Lansburgh (202) 512-3017

Acknowledgments In addition to those named above, Clifford Diehl, James Dishmon, Natalie 

Herzog, Diane Berry, Nancy Bowser, Jay Cherlow, Oliver Easterwood, Lynn 

Musser, and Walter Vance made key contributions to this report. 

(360270)
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