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Public Policymakers Pick Up On Pundit’s Proposals For Safer Food

Jim Prevor’s Perishable Pundit, June 29, 2010

Our piece, How to Improve Food Safety: Aggrandizing The FDA only Distracts from Real Solutions written for The New Atlantis, a Washington, DC-based journal of technology and society, has begun to percolate through the public policy community. Part of this process is getting picked up in academic-related venues such as CIDRAP, the Center for Infectious Disease Research and Policy:

Produce business expert says strengthening FDA won’t make food safer

Jim Prevor, founder and editor of Produce Business magazine, writes that giving the US Food and Drug Administration (FDA) more power — as proposed in the FDA Food Safety Modernization Act now before the Senate — will do little to make produce safer. Writing online recently in The New Atlantis, a journal dedicated to clarifying the moral and political understanding of technology, Prevor asserts that nothing can make fresh produce absolutely safe, but recommends several steps to make it safer than it is.

His first recommendation is to change the legal framework for produce safety so that liability is not wholly fixed on producers but is shared by wholesalers and retailers, thereby giving the latter more of an incentive to buy only the safest products. Another is to increase the reliability of food safety certifications by rooting out bribery and corruption in agencies that certify products.

Other steps Prevor recommends are to increase the capacity of state laboratories that investigate disease outbreaks, revitalize the Agricultural Extension Service so it can teach farmers about best practices for food safety, and provide more food-safety education for consumers. Prevor writes on food safety at PerishablePundit.com.

Another step is getting politicians themselves to start thinking about options in public policy. William (B.J.) Lawson is a 36-year-old Republican candidate for Congress in North Carolina’s Fourth District. He ran last time and, despite running an aggressive campaign, including raising enough money to do a little TV advertising, still lost by a substantial margin to Democratic Congressman David Price, who has represented the district for most of the past 22 years.

Because the district includes both Duke University and the University of North Carolina at Chapel Hill, plus a large black population in Durham, the district is typically Democratic. Price did, however, lose in the big 1994 Republican year and so, with this year looking good for the Republicans again, his young challenger may have a better shot. We don’t know Mr. Lawson but do note that he has picked up on some the ideas we raised on proper public policy toward food safety:

Jim Prevor, a respected commentator on the food industry, argues that simply empowering the FDA to further regulate farms and processors to “reduce pathogens” is ultimately counterproductive:

The reality is that we know very little about food safety. Nobody knows the migration rate of E. coli O157 or how far a filth fly can carry a pathogen. In the absence of definitive answers, food safety on the farm is a continuum, not an absolute.

Common sense would indicate that if a five-foot buffer around a farm is good, a ten-foot buffer is better and a fifty-foot buffer better still. If putting a trap every hundred yards to catch rodents in the field is good, then trapping every fifty yards is better, and every twenty-five yards better still. If land floods, possibly bringing unknown pathogens to the soil, postponing planting for three months is prudent, six months more prudent, five years, super-prudent.

There is no place on the continuum of actions at which we can declare food to be definitively and absolutely “safe.” All of the food safety actions available to us are just steps toward reducing risk. Each of those steps has the effect of increasing the cost of the product to the consumer — and may also involve costs to other values, such as environmental preservation.

We are capable of building cars that could withstand 100-mile-per-hour collisions. But the law does not require this, because we recognize that such expensive, heavy, fuel-guzzling vehicles would contravene other values, such as affordable transportation and reducing our dependence on petroleum. Similarly, though we may value food safety, there are also other things we value. We don’t grow each leaf of romaine in a controlled indoor environment akin to a semiconductor manufacturing facility “clean room.” We don’t require agricultural workers to decontaminate and don hazmat suits to avoid passing pathogens on to the produce. These actions would increase the price of produce dramatically, thus depriving many of the opportunity to eat healthier diets. And even if these precautions were taken, there remains the possibility that cooks and servers — both at restaurants and at home — might contaminate the produce.

The FDA already possesses enormous power: It can and has stopped commerce in whole industries and blocked the entry of produce from companies and countries. With its vast influence on consumers and trade buyers, it can bankrupt almost any produce farmer, rancher, packer, or processor. Few will take the risk of crossing the FDA.

Everyone shares the desire for a safe, resilient supply chain for nutritious food available at affordable prices. We all want to prevent disease outbreaks. Are there ways we can increase food safety by constantly encouraging safety throughout the supply chain?

Mr. Prevor identifies six steps we can take to fundamentally align our food system’s incentives towards greater safety. The most important step we can take is switching to a negligence standard from a strict liability standard, and switching primary liability to the trade buyer:

Switch to a Negligence Standard from a Strict Liability Standard, and Switch Primary Liability to the Trade Buyer

In the 1963 case Greenman v. Yuba Power Products Inc., the California Supreme Court unanimously ruled that a “manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being.”

This decision, which consumer advocates considered a major advance for food safety, had two significant unintended consequences.

First, it established that absolute liability lies with the producer. Parties down the chain, such as retailers, are only contingently liable in the event they were to lose a lawsuit. As long as the producer can pay, the retailer is off the hook. Consequently, the primary food safety concern among retailers in America is that their vendors carry sufficient liability insurance. By contrast, in the United Kingdom and certain other foreign countries, supermarkets can be held liable in court if a person becomes ill or dies and it is shown that the retailer did not exercise proper due diligence in vetting suppliers.

Second, because the standard is “strict liability” and because food safety outbreaks are costly and unpredictable “black swan” events, farmers and processors get no return on their investment in food safety if they have the bad luck to have an outbreak. In other words, the liability is strictly theirs whether they invested millions, going above and beyond all food safety standards, or they did nothing at all.

Combining this “strict liability” standard with a concentrated buying environment, where large chains such as Wal-Mart, Costco, Kroger, Safeway, and Supervalu account for the vast majority of purchases, results in a potentially troublesome situation. At these big buyers, although official corporate policy may place a priority on food safety and the individuals employed may care about food safety, the day-to-day institutional imperative is to get lower prices from vendors. Most producers are more than willing to give buyers exactly as much food safety as they are willing to pay for. But buyers, who are not liable for food safety problems, have precious little incentive to pay extra for higher food safety standards.

A simple switch in the legal standard from strict liability to negligence, combined with a change to make trade buyers hold primary liability on food safety matters, would dramatically alter the incentives.

Under this plan, producers — now knowing that they can’t be held liable if they follow all the best practices on food safety — would have enormous incentive to invest in this area. Buyers, knowing that their own stock could tank if they have to pay out multimillion-dollar judgments, would have a whole new interest in food safety and more reason to pay top dollar to get the safest product.

In other words, food safety is primarily a tradable good in the marketplace. In deciding that the producer is liable no matter how diligent his efforts and that the retailer is not liable no matter how lax his efforts, the judicial system has distorted the way the market meets the consumer interest in food safety. Solving this problem is far more likely to enhance food safety than giving the FDA additional power. After all, the FDA doesn’t produce or buy food; it is always going to be a much more indirect player in moving the needle on food safety than members of the industry.

His other recommendations are well worth reading as well. It should be clear that the asymmetry in the current legal framework cannot be fixed simply by giving the FDA more power, and forcing new regulations on our nation’s food producers.

We cannot predict that regulations will ultimately be effective. We can predict, however, that resulting regulations will serve the organizations [that] are best able to lobby the FDA’s rulemaking process. We can also predict that these organizations will be the largest corporate interests [that] are best equipped to absorb the regulatory burden and pass its costs on to their customers.

We will leave North Carolina politics to the North Carolinians, but at least Mr. Lawson and his staff are reading widely and seeking ideas outside of the conventional wisdom.

Our nation has many problems and thinking about them in new ways will be important to finding solutions. A hat tip to both CIDRAP and Candidate William (B.J.) Lawson for being open-minded.

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