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Pundit’s Mailbag – The End Of The Yeoman Farmer? Does Society Care Enough About PTI And FSMA To Put The Small Farmer Out Of Business?

Jim Prevor’s Perishable Pundit, July 22, 2013

Always looking out for the little guy, frequent Pundit contributor Bob Sanderson responded to our piece, With Wal-Mart’s PTI Mandate and 100% Guarantee On Produce, One Wonders If Local Is Included Or Is There More Fluff Than Real Stuff; Unions Will Be Watching. His letter expands on the point from PTI (Produce Traceability Initiative) to FSMA (Food Safety Modernization Act):

It is clear that a double standard for produce safety is... a double standard.  And that the small producer/processor who is out of compliance can wreak havoc on everyone else.

But the FSMA Proposed Rule, as I read it, really seems to say that if it is put into effect and enforced, the vast majority of small producers will not be able to comply. So what are the consequences of this? I would imagine that things will go in the direction of more divided markets, where there will be quite different standards, but at least not within a single operation.

But then, there will be lawsuits flying all over the place, since an outbreak traced to a farmers market could have a huge impact on supermarkets.  Where do you see this headed? You seem to be taking the position that everyone should have to comply with the same rules.

Or is it as you suggest it might be with Wal-Mart, and as it has always been on all highways, that 65 mph means 77 mph, and thank God it's hardly ever enforced?

—Bob Sanderson
Owner, President
Jonathan's Sprouts
Rochester, Massachusetts

Bob has contributed many pieces to the Pundit including these:

Pundit’s Mailbag — GMOs And Hawaii Papaya

Pundit’s Mailbag — Does A 1,200-item Audit Necessarily Result In More Safety Than A 40-item Audit?

Pundit Mailbag — Honor ‘Green’ Attempts

Pundit’s Mailbag — The Acceptance Of Risk              

Pundit’s Mailbag — Sprout Lessons Echo Food Safety Dilemma

Pundit’s Mailbag — More On Manure

Pundit’s Mailbag — The Tyranny Of Economics And The Goals Of Fairtrade

Pundit’s Mailbag — Can Irradiation Follow The Path Of Pasteurization?

Pundit’s Mailbag — A Look At Organic Versus Conventional Yields

Pundit’s Mailbag — Irradiation, Pasteurization and Labeling

Pundit’s Mailbag — Pesticides And Cancer

Pundit’s Mailbag — Food Prices And Free Markets

Pundit’s Mailbag — Organics And Manure

Testing Sprout Seeds

His comments are intriguing because Bob typically looks at the situation at hand in a broader context. Here he looks at food safety and the cost of varying standards, but he also looks at the overall question of what our food system will look like and the role of the independent farmer in the world we are creating.

Our piece about Wal-Mart explained that we had real doubts about the extent to which Wal-Mart was going to enforce its self-proclaimed PTI standards on small local growers, heritage agriculture partners, etc. The fact that the announcement didn’t state that this was Wal-Mart’s intention and the explanation that this decision would be made through “buyer discretion” told us all we really needed to know.

After acknowledging the possible difficulties this could pose for food safety, Bob is, in a sense, asking if this is bad or the way we want to develop the food system.

The obvious dilemma on food safety regulation of all types in produce is that since this is not a yes/no question, “is the milk pasteurized or is it not,” we are always talking about a series of practices that are believed to enhance food safety — more frequent water testing, more traps per acre, etc.

Since there are no particular amounts of these practices that produce “safe food,” we are talking about setting some level for each of these things. We can do this nationally or we can we can require site-by-site food safety plans but, in any case, this is at least as much a hunch as it is science, and the benefit derived is most uncertain.

The problem is that food is so colossally safe that an effective intervention — say one that God came down and told us would, in fact, somehow reduce mortality from leafy green consumption by 5% over the next century — is, in fact, impossible for humans to divine from any known data source.

The incidences of food safety problems generally are wildly unpredictable Black Swan events today, and so the fact that we require say a weekly water test and then have no food safety incidents for five years does not mean that the next year can’t be the worst year on record.

This colors the discussion of application of food safety standards to smaller farms because, in fact, we don’t know very much about the effectiveness of many of these regulations. There was no controlled test in which some producers were PTI-complaint and some were FSMA-compliant and some were not, and we can thus say with confidence that any of these things save lives or reduce illness.

In general, as a matter of commercial fairness, we would say that if a policy is important enough to impose on growers, it has to be imposed on all growers. Otherwise we start distorting the market, leaving people to organize themselves inefficiently in order to avoid certain regulations.

In addition, a primary benefit of government regulation would normally be an increase in public confidence of food safety, which will increase willingness to purchase, but this benefit won’t come about if the regulation does not apply to everyone and if consumers have no way of knowing if the tomato on their sandwich was grown under the regulatory regime or not.

Beyond this, uniform regulation serves to reduce transaction costs and thus makes for a more efficient economy. If anyone can buy from any grower, shipper, wholesaler, etc., and know that all product is compliant, it saves a lot of cost and encourages small business because small businesses are the ones having the most trouble ensuring product is complaint.

This last point may somewhat outweigh the obvious problem, which is that compliance can burden small growers. If a water test is prudent every 24 hours, that will cost a two-acre farm much more per acre than a thousand-acre farm. Because the paperwork burden is not dissimilar whether one is ordering a bag of a soil amendment or a thousand bags, compliance, which includes being able to document compliance, is going to always burden small businesses more than large ones and, in this case, small farms more than large farms.

Yet, this all may be somewhat academic. Large buyers such as Wal-Mart have multiple interests, food safety being just one of them, and this mirrors society at large. The reason an exemption for small farmers was put into the FSMA, over the objection of United and PMA and WGA, is because as important as food safety is, it is neither the only concern nor the highest priority.

It may seem shocking to say that food safety is not the highest priority when everyone always says it is. It is not that these people are insincere; it is just that we are talking about infinitesimally incremental actions that are hoped to have some impact on food safety.

We are not certain that government regulation, in general, actually encourages food safety. We suspect it encourages an attitude of complacency that may well inhibit food safety. The government’s implied warranty that everything is safe makes it difficult to receive a good return on investment for safety efforts that exceed government requirements and, by the nature of democracies, it is difficult for governments to require world class standards.

Still, this is the way of the world, and so we have government-dictated food safety standards, but we also see little evidence that our representatives have the stomach to cause mass bankruptcies. This is why, despite the government report in the aftermath of the Jensen Farms cantaloupe situation, clearly stating that pre-cooling is important for food safety, that nobody is banning the sale of non-pre-cooled cantaloupes.

For a long time now, many produce industry companies have signed affidavits necessary to get business — then they did their best to produce safe food within the budget allowed and their own capabilities. If there was ever a real problem, they prayed for a fire to burn all the records.

There is some possibility of a bifurcation of the trade with independents buying non-complaint product and large chains paying up for PTI— and FSMA-compliant product, but competitive realities being what they are, we suspect there will be continuing pressure to expand loopholes and that exceptions will be allowed in the name of organic, local, small-scale, artisan or whatever the sentimental favorite is at the moment

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