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New Food Labels Likely to Drive Prices Up

New Food Labels Likely to Drive Prices Up

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WASHINGTON (AP) -- People probably will have to pay more for their food to cover the cost of new labels Congress ordered to tell where their meat, fish, vegetables, fruit and peanuts come from, the Agriculture Department said Monday.

The department released figures doubling from $2 billion to $4 billion its estimate of what the labels will cost in their first year, largely from procedures required for labeling livestock origins. In the 2002 farm bill, Congress required that the labels start appearing on products by next September.

Kenneth Clayton, associate administrator for the department's Agricultural Marketing Service, said the costs are likely to be passed on to consumers as higher shelf prices at grocery stores. Clayton offered no estimate of how much prices might go up because of the labels.

The new estimate predicts that farmers and packinghouses probably will spend $3.3 billion just on separating pigs, cattle and sheep before they're slaughtered. Record-keeping will cost another $500 million or more, Clayton said.

In its initial estimate last year, the department put the cost at $2 billion to establish and maintain records that trace food to where the livestock originated.

While consumer advocates and some farmers have argued the labels will let Americans know more about the products they are buying, Clayton said the department was "hard-pressed to come up with any quantification of benefits."

The labels have to say where the animals were born, raised and processed. Packers, retailers and the Bush administration itself have pushed to get the labeling program rolled back ever since President Bush signed the farm bill into law last year.

Tim Hammonds, president and CEO of the Food Marketing Institute, which represents supermarkets, said the price for the program is too high, and consumers will see few benefits. "The only reasonable recourse is to repeal the statute," he said.

The House passed a measure this year to block the requirement. However, farm state senators have prevented that measure from getting anywhere in the Senate, arguing that consumers would buy more U.S. food products instead of imports if given the knowledge and choice.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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