Home Wealth Project

Image: Stevehopson.com

In a rare move of bipartisan cooperation, Congress has passed a sweeping food safety bill that would give the FDA power to recall tainted produce, dairy products, eggs, and some processed foods before they hit supermarket shelves. Besides preemptively recalling food, the food safety bill lets the FDA make more inspections, regulate farming, and hold food companies accountable for tainted products. The action comes in the wake of recent food recalls that crippled food producers and sickened consumers. The New York Times describes what the bill does:

Nearly a fifth of the nation’s food supply and as much as three-quarters of its seafood are imported, but the F.D.A. inspects less than one pound in a million of such imported foods. The bill gives the F.D.A. more control over food imports, including increased inspection of foreign processing plants and the ability to set standards for how fruits and vegetables are grown abroad.

And as food suppliers grow in size, problems at one facility can sicken thousands all over the country…The legislation would raise standards at such plants by demanding that food companies write plans to manufacture foods safely and conduct routine tests to ensure that the plans are adequate.

The legislation greatly increases the number of inspections the F.D.A. must conduct of food processing plants, with an emphasis on foods that are considered most high risk — although figuring out which ones are riskiest is an uncertain science….(and) neither version of the bill would consolidate overlapping functions at the Department of Agriculture and nearly a dozen other federal agencies that oversee various aspects of food safety, making coordination among the agencies a continuing challenge.

This is the biggest food-safety overhaul in 70 years, according to various media sources. “(F)ood-borne illnesses that cost the nation an estimated $152 billion a year,” according to Bloomberg, which has some more numbers:

The Senate bill calls for the FDA to inspect at least 600 foreign food facilities within a year of enactment, and double its number of foreign inspections in each subsequent year for five years. The measure would require inspections every three years for U.S. manufacturing and processing plants the FDA deems to be at a high risk for contamination, and every five years for all other domestic facilities.

Under that schedule, 50,000 foreign and domestic food facilities would be inspected in 2015 by the FDA or by federal, state, local or foreign officials acting on the agency’s behalf, according to the nonpartisan Congressional Budget Office. The legislation would cost about $1.4 billion during five years, according to CBO estimates.

Some local food producers with annual sales under $500,000 would be exempt from that rule under language written by Democratic Senator Jon Tester of Montana, an organic farmer.

The small farm exemption is an interesting point. The Daily Caller features a couple of small farm advocates’ views on the new bill:

(One advocate) is wary of the $500,000 line the Tester-Hagan amendment draws, saying that it puts those just above it at a disadvantage. “Say you’re not protected by the Tester amendment, you make between $500,000 and $750,000 a year, you’re subject to these produce standards or these safety plans, it’ll be easier for the big companies to comply, they’ll have economies of scale…a lot of food producers are regarded as small businesses if they’re under $750,000, and I think they’ll find it more difficult to comply with some of the requirements in the bill,” he said.

John Peck, the executive director of Family Farm Defenders…thinks the bill is an attempt by big companies like Monsanto, Kellogg and General Mills to shift liability for infected food products from their production facilities back to farmers.

“There are four companies that control pretty much every food item that you eat,” Peck said in a phone interview. “There’s no free market in food. The only place you really find a free market is at the farmers market.”

Peck thinks SB 510 is being pushed on purely factory-farming motives, but said Family Farm Defenders is okay with the bill now that the Tester-Hagan amendment is attached. He doubts, though, that excess costs will end up hitting consumers, saying that he instead expects big companies, with economies of scale, to force any excess costs from the regulation back onto the backs of farmers.

It remains to be seen how the FDA’s new powers will play out on the entire food industry. 70 years is a long time to go without updating the federal regulatory system–food production simply wasn’t the same in the 1940s as it is now. If the newly muscled FDA can stop contamination from spreading, more power to it.

The one thing that bugs me about this bill, and every new bill the government introduces, is that it doesn’t take inefficiencies into account. Instead of examining the energy allocation consequences of its new laws, the government chooses to throw more red tape on top of existing bureaucracy, complicating the whole process and making it more expensive.

The problem with regulation isn’t that it exists in the first place. It’s that the government doesn’t take a cold hard look at how the systems and processes it is putting in place affect the productivity of the industries it monitors, as well as its own budget. This food safety bill, sorely needed as it is, also serves as a sordid reminder of the reams of red tape that are piling up outside of industry fences.

View full post on Business Pundit