AMS’s Proposal for BE (Bioengineered) Labeling; A Number of Questions Remain

At long last, the Agricultural Marketing Service (AMS) of the USDA has issued the proposed rule for the National Bioengineered Food Disclosure Standard for food products that have been bioengineered. As readers of this blog know, the Agricultural Marketing Act of 1947 was amended on July 29, 2016 to provide for the establishment of a National Bioengineered Food Disclosure Standard.  Congress gave AMS two years to establish a national standard and the procedures necessary for implementation of the standard.  AMS, however, has had some trouble staying on schedule.  First, the market research required was delayed.  Then, AMS did not publish an ANPR early on, but eventually published questions and asked for feedback.  Now AMS has published a proposed rule a short three months before the deadline that Congress specified for establishing the standard.  Even in the best of circumstances, finalizing a proposed rule in less than three months would be highly optimistic.  And in this instance, it is not the best of circumstances.   The recent proposal raises many questions and undoubtedly will generate many comments.

According to AMS’s summary of the proposed rule, the rule’s purposes are sharing information with consumers and, at the same time, minimizing implementation and compliance costs which would otherwise be passed on to consumers. Some noteworthy aspects of the proposal:

• Terminology: AMS proposes to require the use of the term “bioengineering” (BE) or “BE foods” instead of GMO or genetically engineered foods. Although use of the term BE is consistent with the law, query whether consumers have any idea what BE means. After decades of the use of the term GMO, the introduction of a new term is surprising and may lead to confusion. The first wave of comments to the proposal shows that this may become a contentious issue.
• AMS has punted on the interpretation of “BE food.” In relevant part, the law defines BE as referring to a food that contains genetic material. The question is whether this means that a highly refined food product derived from BE material, but that does not contain genetic material, is a BE food. In response to its questions last year, AMS received comments for two opposing positions, one favoring the interpretation that any food derived from a BE material is subject to a disclosure requirement irrespective of whether it contains genetic material, and one favoring a narrow interpretation limiting the term BE foods to only those food products that contain genetic material. AMS invites comments on the two opposing positions including studies, cost considerations, and which position is more defensible in light of the law.
• Lists of BE commodities: In an effort to make it easier and less burdensome for both industry and consumers to understand what products may need a disclosure statement, AMS proposes a list of highly adopted commercially available BE foods/commodities (canola, field corn, cotton, soybean and sugar beet) and a list of non highly adopted commercially available BE foods/commodities (non-browning cultivars of apples, sweet corn, papaya, potato and summer variety of squash). If other BE foods become available, the list(s) would need to be updated. AMS’s proposal describes the process for updating the lists annually. The lists include commodities, but not all food products derived from those commodities, e.g., it lists corn but not grits, corn syrup, corn flour, etc. However, all foods derived from the listed commodities would be subject to the same disclosure statement as foods on the list. Foods derived from the not highly adopted products could note that the product “may contain” rather than “contains bioengineered ingredients.”
• AMS proposes several options for the BE disclosure statement.
  1. A one-sentence label declaration, such as “contains a bioengineered food ingredient”;
  2. A standardized icon. AMS proposes three alternatives (images and permutations in color and black and white are provided in a separate document). As AMS explains, these icons are designed so they would not disparage biotechnology or suggest BE food is more or less safe than non-BE food.  These standardized icons can be expected to generate comments.
  3. A QR code or other digital marker that directs shoppers to a website for more information, e.g., “Scan here for more food information.” AMS proposes this while acknowledging that it has not yet completed the study on potential challenges associated with electronic disclosures. If AMS were to conclude that electronic disclosure does not provide sufficient access, the agency proposes text message as alternative option.
  4. The proposed rule provides for additional disclosure options for small food manufacturers.
• The 2016 amendment also called on USDA to determine a threshold of bioengineered food present that would necessitate disclosure. The proposed rule includes three different possibilities and invites comments on all three.
• To minimize the burden of recordkeeping, AMS proposes different approaches for regulated entities to keep records that are reasonable and customary to verify the disclosure. For products derived from commodities on the two lists, evidence that the food is derived from the product is sufficient, e.g., for corn tortillas that are labeled with a BE disclosure statement, a record that shows the product is made from corn is sufficient. However, if the label does not disclose that the food is BE or contains a BE food ingredient, then the manufacturer of the retail product would be required to maintain documentation that verifies that the food is not BE.
• AMS enforcement powers are limited. It proposes, in accordance with the law, to perform audits. Companies will have an opportunity to object to the audit findings and request a hearing. Once the audit is final (and challenges have been considered), AMS will publish a summary of the audit findings. The publication of this summary will constitute final agency action. In all likelihood, the real “bite” of a finding of violation would come in the form of follow-on litigation.
• AMS sets Jan. 1, 2020 as the date for compliance for large food companies, and a year later for small companies, defined as those with less than $10 million in annual receipts. These dates coincide with the new compliance dates for the updated nutrition labeling regulations.

Comments may be submitted through July 3, 2018. AMS has indicated that it will not grant an extension because it needs to get the final rule issued as soon as possible.