Who’s Paying the Price?
Guest Columnist: Autumn Veazey
Food Safety Update
from our newsletter, broadcast on
Monday February 23, 2009
Autumn Veazey

Autumn Veazey
Manager
Troutman Sanders Strategies

Public health officials recently reported that on average, 76 million people become sick, 325,000 are hospitalized, and 5,000 die from food borne illnesses caused by contamination from a number of microbial pathogens. As of February 11, 2009, 600 people have become sick, nine people have died, and over 1,500 products have been recalled as a result of the peanut butter salmonella outbreak. The previous major outbreak occurred last summer from tainted Mexican peppers, and caused over 1,400 people to become infected with salmonella in 43 states. Prior to the pepper outbreak, a tainted supply of California spinach resulted in another major outbreak that infected 276 consumer illnesses, and caused 3 deaths. 

Studies indicate that more consumers than ever before are eating out or buying ready-to-eat and prepared foods, including pre-cut or pre-sliced produce, which may come from many different sources, even overseas. Hence, the very nature of the way we pack, prepare, ship, and market our food has changed dramatically over the last two decades, and there is growing concern that our government agencies have not kept up with these changes. In an effort to reform our current system so that it reflects these changes to our food system, last year Congress introduced numerous food safety related bills and held several hearings inviting industry leaders, consumer advocates, and agency officials to testify. Given the recent peanut contamination and heightened sense of consumer concern, the expectations are rising for the 111 th Congress. 

Most of the bills that were introduced last Congress contain new requirements for labeling, traceability, certification, civil penalties, process controls, and quarterly inspections. Debate continues around each of these requirements as to whether they are necessary to impose on the food industry, whether they will they be effective, and whether the Food and Drug Administration (FDA), the main agency that regulates our food supply, can implement them. Regardless of the end result or compromise, one thing is for certain: additional requirements bear additional costs, and thus providing a means to pay for these costs, particularly in the midst of an economic recession and a significant federal deficit, becomes the central issue in this food safety debate. 

One idea being discussed in the halls of Congress is implementing user fees as a means to pay for additional costs. This is not a new concept. There are other agencies that impose user fees on the very industry that it regulates. For example, the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS), which regulates and inspects meat and poultry, received approximately $135 million last year from existing user fees. The FDA also collects user fees to offset the agency’s regulation of the seafood and drug industries.

However, while often proposed as a “pay for” means, user fees have never been very popular with industry advocates. The food industry is very much opposed to user fees, arguing that food safety should be a cost for all to bear because everyone benefits from the effects of having a secure and safe food supply. Even some consumer advocacy groups view such proposals as a conflict of interest – taking funds from the food industry to pay for their own food safety programs. And if you are a consumer, there is real concern that the added costs of user fees will trickle down the supply chain, and the consumer will bear the burden in the end in the form of higher food prices. Still, some have suggested imposing user fees only on imported food products. But with U.S. food imports reaching close to the $80 billion range, one can imagine the opposition this concept generates. Importers argue that policies like this are unfair and restrict trade. In addition, many fear that our trading partners would react similarly to the U.S., thus shutting off our export markets. 

Another idea that has been considered as an alternative to user fees is annual or bi-annual registration fees of food companies, both domestic and foreign. The concern here, though, mostly among lawmakers, is that registration fees will not generate as much funding as imposing user fees, and additional federal funds would be necessary to supplement additional costs. In addition, the food industry has opposed this concept as well as an unnecessary tax on the industry. 

Thus, the debate over food safety – both the system and funding – will continue into the 111 th Congress. Industry and consumer advocates may not be able to agree on the type of funding source or the changes to the current system, but one thing they can agree on is that something must be done to fix the system, and without additional funds, the FDA will not be able to fix our food safety system. Therefore, the likely compromise may very well be somewhere between registration fees and user fees for food companies, and supplemented with tax payer dollars as well. The meat, seafood, and drug industries all operate in a similar fashion, and Congress tends to follow precedents, particularly where precedents appear to be working.  
 
 
 
In her time with Troutman Sanders Strategies, a full-service government relations and issue management firm, Autumn Veazey has accrued extensive experience advancing clients’ initiatives at the federal level regarding agriculture, nutrition, trade, immigration reform, and food safety.

Most recently, Veazey served for two years as Director of Legislative Affairs and Associate Counsel for the United Fresh Produce Association headquartered in Washington. Her work at United Fresh included negotiations on key specialty crop provisions in the 2008 Farm Bill and securing over $1.3 billion of mandatory federal funding for the produce industry.

 

 

from our newsletter, broadcast on
Monday February 23, 2009
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