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AFFI stops PACA bill in committee.

AFFI Stops PACA Bill in Committee

AFFI has effectively stopped the Perishable Agricultural Commodities Act (PACA) Technical Amendments of 1992 from proceeding further in the Senate Agriculture Committee before the Senate's August recess. AFFI will be working during the recess to put forth the industry's views on the PACA issue in the Senate.

The bill would instigate major changes to PACA without the benefit of a public hearing or full consideration of the issues which affect the businesses which are regulated under the Act. In a letter to the committee and in lobbying efforts on Capitol Hill, AFFI urged the Senate to consider fully all the ramifications of the bill, which was already approved by the House of Representatives.

The bill appears to be an attempt to overturn a recent decision issued by the U.S. Court of Appeals holding that sellers of perishable agricultural commodities could not recover funds paid to a lender by a purchaser of those commodities in payment for pre-existing loans. "To assume that this decision serves as a new protective device for banks accommodates only a narrow view of the issues involving PACA and ignores several other important considerations," said Leslie G. Sarasin, AFFI's executive vice president of public policy.

According to AFFI, it was not Congress' intent to penalize PACA licensees by forcing them to meet more rigorous lending requirements than other borrowers. "AFFI believes that the bill would ensure that the difficulties some licensees have faced will continue to grow as lenders become increasingly aware of the ramifications of the statutory trust," said Sarasin.

In effect, the statutory trust eliminates a perishable agricultural commodities seller's responsibility to determine the credit worthiness of his or her purchaser. According to Sarasin, AFFI believes it would be an inappropriate act for Congress to excuse sellers of perishable agricultural commodities from the sound financial responsibility that all other businesses must bear.

Sarasin pointed out that the bill fails to address several problems facing the industry as a result of PACA, and urged the Committee to conduct a more thorough review of PACA in its entirety.

FDA Issues Preliminary Database Guide

The Food and Drug Administration (FDA) has developed a guide for developing and using databases, and is seeking comments on the procedure described in the manual.

In FDA Nutrition Labeling Manual: A Guide for Developing and Using Databases, the agency clearly notes why it is advantageous for industry to use an FDA-accepted database: "FDA has indicated that it will not take immediate action against a company for a product that does not contain the labeled level of nutrients, provided the agency has reviewed and accepted the database for the product and provided the company has followed good manufacturing practices in producing the food."

Although the comment period is 45 days from the date of publication in the Federal Register (September 8, 1992), the manual will not be finalized until final food labeling regulations have been published in November.

AFFI recently submitted comments expressing support of FDA's proposed revision of its database guidelines.

AFFI Supports Metric Amendment

On July 21, 1992, the Senate approved legislation which would revise the law enacted earlier this year that would have required that metric units be the primary method of declaring net weight and make optional use of the traditional inch/pound system. The Senate action on H.R. 5343 follows passage of the measure by the House of Representatives on June 29, 1992. The legislation, which AFFI strongly supported, now goes to President Bush for his signature.

The bill would amend the American Technology Preeminence Act by requiring the net weight statement of food labels and other consumer commodities to be declared in both metric and the traditional inch/pound system of measure, but without specifying which measurement must be declared first. Under the recently passed legislation, the inch/pound measurement, followed by the metric declaration, would be permitted.

The bill also makes other technical changes to the Act including clarification that metric units would not have to be used on foods that are packaged at the retail store and that the Act would not apply to unit pricing, advertising, recipe programs, nutrition labeling, or other general pricing information. It also clarifies that the Act would not require changes in package size or affect in any way the size of packages; and that the Act would not affect the sale or distribution of products whose labels have been printed before its effective date of February 14, 1994.

Undercharge Relief Bill Passes Committee

The Senate Committee on Commerce, Science and Transportation recently approved S. 1675, the Undercharge Equity Act of 1992. The bill would provide relief to shippers from claims brought by bankrupt and insolvent motor carriers to collect additional freight charges on past shipments.

AFFI had pressed members of Congress to quickly bring the legislation to the attention of the full House of Representatives and the Senate, calling for a legislative solution to reverse the Supreme Court decision of 1990 which allows motor carriers to negotiate, bill and collect one amount from a shipper and then later collect additional funds when the motor carriers become insolvent or bankrupt because the carriers may have failed to properly file the negotiated rates.

Since the partial deregulation of the trucking industry in 1980, many carriers routinely negotiated with shippers to determine rates for services on a per shipment basis. However, many carriers failed to file these rates with the Interstate Commerce Commission (ICC). This behavior has resulted in the practice of issuing undercharge claims, according to AFFI.

S. 1675 would provide a legislative solution to the problem created by the Supreme Court's ruling. The bill would establish an average discount rate, by weight, at which settlements could be reached. It would give the ICC the authority to review disputed claims to determine their reasonableness. In addition, the legislation would set the statute of limitations for claims at two years for the first year following enactment of the bill, and 18 months for subsequent years.

Similar legislation was introduced in the House of Representatives, and was referred to the Public Works and Transportation Committee, but no action has been taken. AFFI will continue to push for passage of undercharge relief legislation this year.

AFFI Comments on Labeling Format

AFFI told the Food and Drug Administration to keep the current nutrition label format for food products rather than confuse consumers with daily values. AFFI is opposed to FDA's proposal to establish Percent Daily Value (DV) with Daily Reference Value (DRV) as the standard format.

"Based on the results of the FDA and industry-wide surveys, AFFI firmly believes that the current format conveys meaningful nutrition information to consumers in a clear and concise manner," said AFFI President Steven C. Anderson in the comments to FDA. "Consumers have long-standing familiarity with this format and therefore find it least confusing and most helpful."

Daily Values are reference amounts of various nutrients in a daily diet. These amounts are averages and are not applicable to all consumers due to varied individual diets and dietary requirements.

AFFI's views were also represented at a joint FDA and U.S. Department of Agriculture public hearing on August 17. Leslie G. Sarasin, AFFI's executive vice president of public policy and staff counsel, testified on behalf of the frozen food industry.

Anderson pointed out that the results of the industry studies demonstrate that the majority of people sampled could not calculate their specific DV when asked how many servings of a particular product would be needed to fulfill daily requirements for a specific nutrient.

While there is some benefit to providing consumers with DRV information, AFFI also believes that requiring it would add clutter to the food label and pose problems for smaller retail packages lacking ample space to include the information.

That's why AFFI "consistently has supported voluntary declaration of such information, where there is a clear benefit to the consumer and where label space allows the proper presentation," Anderson added.

AFFI does not believe that requiring DV or other educational information on the food label is consistent with the Nutrition Labeling and Education Act (NLEA).

Anderson said it is essential that FDA and USDA agree on a single format that is the most appropriate for all foods regulated by the two agencies. "Different format requirements cause confusion in the marketplace and place needless burdens on manufacturers who market both FDA- and USDA-regulated foods," he added.

Anderson concluded by stressing that the food label's role is to provide specific nutrition information about a particular product, and that government and industry should focus on educational programs to supplement the label.

AFFI Sponsors Labeling Seminar in Chicago

AFFI will host a seminar for food industry professionals following announcement of the new food labeling regulations by the Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA), encompassing the most significant changes to the food label in 26 years. New Labeling Regulations: A Step-by-Step Approach will be held November 12-13, 1992 at the Westin O'Hare Hotel in Chicago, Illinois.

All food companies will be affected by the new food labeling requirements. Once FDA and USDA announce the regulations in November, companies will have very little time to revise every label on each of their products.

AFFI's seminar will provide frozen food-specific instructions on how to begin the compliance process, and discussions of the rules on health claims, descriptors, definitions, databases, label format and content, enforcement and advertising. This seminar is crucial for regulatory issues specialists, industry attorneys, label and package design specialists, nutritionists, marketing specialists, quality control specialists, and anyone else involved with labeling issues.

Cost of the seminar is $400 for AFFI members and $600 for non-members. A 20 percent discount is available for those who register by October 12. To register, or for more information, contact Leslie G. Sarasin, AFFI's executive vice president of public policy, at (703) 821-0770.
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Title Annotation:American Frozen Food Institute; Perishable Agricultural Commodities Act; Senate Agriculture Committee
Publication:Frozen Food Digest
Date:Oct 1, 1992
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