The proliferation of regulations calling for the labelling and tracking of meat products is putting Latin American producers in a bind. Labelling requirements, which vary from nation to nation, include grading schemes as well as labels for organic products and those that contain GMOs. Consumers want to be better informed about the meat they buy, yet producers find it difficult to pass on the additional cost in price-sensitive markets of Latin America. Steven Lewis finds out more.
Until recently, Latin America’s livestock farmers and meat processors faced few marking and labelling requirements for their products, but now they are struggling with a host of new regulations aimed at identifying organic, genetically modified (GM), and disease-free meat.
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Tracing and labelling a variety of meat products has proven viable in leading consumer markets like the United States and the European Union, but the jury is still out on Latin American markets. In price-sensitive markets like Argentina, Brazil, and Mexico, livestock farmers and meat processors find it difficult to pass on the additional costs to final consumers in the form of higher prices.
A host of labelling requirements
Meat product marking got started in Latin America when federal meat inspectors began grading meat at processing plants. Information supplied by inspectors has been expanded in recent years as consumer groups demanded to know the age of animals and the overall quality of the cut.
The government of Panama recently implemented a regulation requiring that all meat cuts sold in supermarkets have a quality rating affixed. The regulation states: “The five categories of meat are: (veal) for animals aged less than one year; (superior) for animals aged no more than two and a half years; (select) for animals less than three and a half; (good) for animals up to five years; and (commercial) for those over five years of age at the time of sacrifice.”
The five categories of meat are: (veal) for animals aged less than one year; (superior) for animals aged no more than two and a half years; (select) for animals less than three and a half; (good) for animals up to five years; and (commercial) for those over five years of age at the time of sacrifice.
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By GlobalDataSupermarkets are also battling with requirements for labelling, and in some cases segregation, of meat products. The advent of organic meat production raised the need to identify and segregate products through all stages of production, processing, distribution, and final sale.
Until recently, virtually all organic meat produced in Latin America was destined for export markets where it sold at premium prices. As times changed however, supermarkets in major Latin cities have found themselves under increasing pressure to carry organic products, but they are ill prepared to do so in the case of meat. Cooler space is limited, making it difficult to segregate meat products by type and quality.
GMO labelling threatens to further complicate the lives of meat processors and supermarket operators in the region. Inconsistency in identification requirements makes it difficult to package products in a way that conforms to all the necessary rules. In Paraguay, for example, there is no law requiring that meat products containing GMO’s be labelled as such. However, Brazil recently enacted a law requiring that all products containing 4% or more of any genetically modified ingredient be labelled as such. State regulations in Argentina require that supermarkets post lists of such products on bulletin boards that are readily visible to the public.
Meeting the EC’s traceability demands
The European Union is the driving force behind labelling in South America’s meat exporting nations. During July, EU inspectors made it clear to agricultural authorities in Argentina and Uruguay that both nations must implement comprehensive traceability systems by the end of 2002 if they want to maintain their export markets.
Several years ago, Argentina proposed a traceability program based on the use of identification chips, but European authorities frowned on that technology. Now the Argentine cattle industry is launching a tracing system based on tags with bar codes. During the upcoming calving season tags will be affixed to all cattle destined for export markets.
Uruguayan agricultural authorities recently began tagging calves under a comprehensive traceability program based on EU guidelines. Funding for the program comes under a US$18.5m World Bank loan earmarked for combating foot and mouth disease. According to Diego Paysse, head traceability consultant for the new program, the challenge is to develop a viable system that is affordable to the nation’s meat producers and processors.
Local consumers won’t absorb the cost
Argentine traceability expert Enrique de Leon de Bellocq recently published a report in which he argued:
“Livestock farmers and end consumers account for 80% of the value added to meat, and traceability brings the two much closer together. Traceability should also help producers recover additional production costs because consumers will better understand the value they add.”
“Traceability should also help producers recover additional production costs because consumers will better understand the value they add.”
Uruguay’s meat producers are struggling however to find trading and labeling systems that will be affordable within that market context. All parties concerned agree that they cannot pass on traceability costs of US$13 to US$18 per animal per year, as is the case in the EU. That would amount to an annual cost of US$180m per annum for Uruguay’s cattle industry.
Agricultural authorities in MERCOSUR nations believe that their respective governments can recover at least part of their investment in traceability through increased tax revenues. Nationwide tagging and tracking of cattle transactions will drastically reduce rampant tax evasion arising from unregistered cattle transactions.
It will be difficult to recover added costs of labeling and traceability in Latin America where consumer power is only a faction of that found in developed nations. Consumers will necessarily bear the cost of being better informed about the meat they buy, although most of that burden is likely to be borne by foreign customers who can afford to pay a premium price for value added meat products.
By Steven Lewis, just-food.com correspondent
To view related research reports, please follow the links below:- Guide to Food Regulations in Latin America – Volume I Guide to Food Regulations in Latin America – Volume II Handbook on the Labelling of Genetically Modified Foods, Ingredients and Additives |
