(Oct. 2, 7:00 a.m.) As a six month phase-in period began Sept. 30 for country of origin labeling for fresh produce at retail stores, U.S. Department of Agriculture officials said they are aiming for surveillance of compliance by 36,000 retailers by April.

Some fruit and vegetable industry leaders have asked for a longer phase-in “informed compliance” period, but Agricultural Marketing Service Administrator Lloyd Day said agency officials believe six months is sufficient for the supply chain to get up to speed on the federal law and work through older packaging that won’t comply.

“We had considered a longer period of time, but we are very well aware that the intent was to see this implemented as quickly as possible,” Day said during a teleconference Sept. 30.

Undersecretary for Marketing and Regulatory Programs Bruce Knight said the total cost of the first year of implementation for all covered commodities — including fish, beef, pork poultry, fruits and vegetables, peanuts and pecans — has been estimated by the agency at $2.5 billion.

“There is significant cost impact associated with country of origin labeling as passed by Congress,” Knight said.

Knight said it was the intention of USDA to gather all comments on the interim rule, and about 190 comments were received by Sept. 30, the last day of the public comment period.

“This indicates we should be able to stay on our current schedule of our intention to go to a final rule before the end of this calendar year,” Knight said, promising to look at all comments received.

USDA officials said they don’t have the money yet for surveillance and enforcement of country of origin, but said they hope Congress will appropriate the $9.6 million in fiscal year 2009 needed for enforcement of the regulations.

Day said the USDA has an official partnership with the state departments of agriculture to assist with COOL retail surveillance.

Country of origin rules for shellfish and fish were implemented in 2004.

In 2007, about 1,600 stores were surveyed to gauge compliance with the country of origin labeling law for shellfish and fish, and Day said about 540 stores in that group showed violations. In total, there were about 1,100 COOL violations among those 540 stores, or about two per store.

Retailers have 30 days to correct the violations and avoid fines.

“So far, there hasn’t’ been a single fine taken,” he said.

However, Day said if the USDA does find retail establishments or suppliers who are willfully ignoring the law, the penalty is $1,000 per violation beginning in April 2009.

The Newark, Del.-based Produce Marketing Association has asked USDA to classify all fresh-cut items as processed and therefore exempt from COOL. Others have said USDA’s regulations regarding fresh-cut produce are confusing. Day on Sept. 30 said the AMS rule is sufficiently clear but promised all industry comments would be evaluated before a final rule is issued.

Robert Guenther, senior vice president of public policy for United Fresh Produce Association, Washington, D.C., said the association wanted the COOL law to mirror the Perishable Agricultural Commodities Act definition of a processed product. Guenther noted PACA law says cutting of produce doesn’t constitute processing and thus fresh-cut is still covered by PACA .

“How we looked at it was that if we started going down a path that said in this other law (COOL) that cutting constitutes a processed food item, then what would be the implications for PACA down the road?” he said. “We wanted to make sure we were consistent with PACA.”

He said the overriding issue for United is that USDA takes into account the changes in the 2008 farm bill.

In addition, he said the agency needs a “bright line” to make clear what a processed product is and what is a prelabeled product. “If they can get through that, they can resolve a lot of the confusion,” Guenther said.

Guenther said the USDA also needs to help the marketplace understand the requirement in regards to record keeping, particularly relating to documentation.

“If you read their stuff, it isn’t absolutely clear,” he said.