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What To Expect From The New Food Safety Modernization Act

Jim Prevor’s Perishable Pundit, December 24, 2010

It has been a wild ride, but the Food Safety Modernization Act has passed both House and Senate and will soon be signed by the President. United Fresh gave the industry position:

By a vote of 215 to 144 Tuesday, the U.S. House of Representatives passed the Food Safety Modernization Act, enacting large-scale changes to the nation’s food safety system. United Fresh issued a statement of mixed feelings on the legislation, which will now head to President Barack Obama’s desk for signature.

For the past four years, the United Fresh Produce Association has been among the most vocal supporters of comprehensive modernization of the food safety system in the United States, working with members of Congress and the Bush and Obama Administrations, and testifying before House and Senate committees more than 10 times. The legislation passed today on Capitol Hill ensures a number of important provisions that we have long supported, including implementation of preventive controls for production and processing of specific fruits and vegetables when shown necessary by a risk-based, scientific analysis by FDA, will be integrated into the food safety framework moving forward,” said United Fresh Senior Vice President of Public Policy Robert Guenther.

The bill represents the first update of food safety regulations in the United States since 1938, however it still contains a controversial amendment added in the final weeks of the congressional session.

The good in this bill, however, is still accompanied by the bad, and the Food Safety Modernization Act still contains an amendment from Senators Jon Tester of Montana and Kay Hagan of North Carolina that threatens the health and well-being of a nation of consumers by exempting some producers and processors based only on the size of their business, their geographic location, or to whom they sell their products,” continued Guenther. “This inclusion of exemptions based on non-scientific qualifications will limit the ability of the Food and Drug Administration to assure consumers that all foods they purchase, whether at grocery stores, restaurants, farm markets, or elsewhere, have met the same food safety standards. We remain fearful that this profound error will come back to haunt Congress, public health agencies, and even those who thought they would benefit from food safety exemptions, but more importantly, we are fearful of what may slip through the food safety loopholes created by the Tester/Hagan Amendment and adversely affect consumers in the United States.”

United Fresh withdrew its long-standing support for the bill over the Tester/Hagan Amendment in November, but recognized that passage of the bill was nonetheless a watershed moment for food safety in America.

United Fresh is confident that the Food Safety Modernization Act will do much good; it is, after all, the first overhaul of the food safety system in seven decades. However, the House and the Senate have both missed an opportunity to engage with one another to remedy the loopholes created by the Tester/Hagan Amendment,” Guenther added. “Today is a day of mixed feelings for our members who have worked long and hard to pass food safety reforms, as this remains a job that is very much unfinished. Moving forward, as we always do, United Fresh will continue to work with our allies in the new Congress, voicing our strong support for uniform, risk-based food safety standards to which all can be held accountable, regardless of size.”

It all became possible when Senator Tom Coburn., the Oklahoma Republican who had been blocking the bill, for reasons unexplained, suddenly dropped his objection. One assumes it was part of a deal or that Senator Coburn, who has been blocking a lot of items, didn’t want to antagonize his fellow senators by blocking a bill they had already voted in favor of by a cloture exceeding margin.

We’ve questioned the industry position that this bill is wonderful except for the Tester amendment exempting the small producers who sell locally.

We have been inclined to look at it as The Wall Street Journal did in an editorial:

The Senate waved through the largest expansion of food regulation since FDR on Tuesday, 73 to 25, and maybe the bill won the votes of 13 Republicans because there was hardly any public controversy. These days, the government needs to take over entire industries to get anyone to notice.

Not that this bill in the name of food safety isn’t a down payment. The Food and Drug Administration will gain new powers over the 2.2 million farms and 28,000 food producers in America — including federal standards for agricultural practices and food processing, transportation and storage — as well as the authority to mandate nationwide recalls.

High-publicity outbreaks like salmonella in eggs or E. coli in spinach have obscured the reality that foodborne illnesses have fallen by nearly one-third over the last decade — largely because businesses have every incentive to police themselves. Meanwhile, Congress’s increasing demands on the FDA — it regulates about 25 cents out of every dollar spent in the economy — mean that the agency does nothing well. When the FDA mistakenly fingered tomatoes as the source of 1,300 illnesses in 2008, the tomato industry suffered $100 million in losses. The real culprit was tainted jalapenos.

Not surprisingly, this bill’s main critics have been the small farms and local and organic food outfits that don’t have the profit margins to comply with new regulatory burdens like the “risk-based preventative controls” that the FDA will soon enforce. The House version applies even to farmers markets and roadside stands. Naturally, agribusiness and the processed food industry (and their legal departments) couldn’t be happier, and it’s not the first time big business has leveraged government to weigh down smaller competitors.

Less understandable is the support from so many Senate Republicans, who must know that the Obama Administration plans to pursue its agenda through regulation in the next two years now that it has lost the House. The 13 GOP “ayes” — including Lamar Alexander of Tennessee, Scott Brown of Massachusetts and Richard Burr of North Carolina — have enabled those regulators. The next time one of them gripes about the FDA or slow job creation, we hope the press corps reminds them of this vote.

In other words, we have seen the way the FDA can abuse its power, in the spinach crisis, the salmonella Saint Paul problem with the tomatoes and jalapenos, and issues such as the FDA Import Alert imposed on Honduran cantaloupes, and we question the wisdom of placing more power with the FDA.

We also are not at all convinced that when all is said and done, our food supply will be any safer as a result of this bill. In all the publicity, the one thing you never saw was anyone making explicit promises that if we pass this bill, the number killed from foodborne illness will decline or any other specific assertions.

With this law soon to be upon us, we asked Pundit Special Projects Editor and Investigative Reporter Mira Slot to ask some attorneys who work closely with the FDA what we have in store:

Mitchell Fuerst, Esq.,
Managing Partner
Fuerst Ittleman, PL,
Miami, Florida
Kelly Lightfoot Esq.
Fuerst Ittleman, PL,
Miami, Florida

Q: Your enlightening interview during the cantaloupe outbreak decimating a Honduran grower revealed important issues regarding FDA’s legal authority and procedures in issuing and upholding import alerts. With new government food safety regulations unfolding, we appreciate your insight again.

Perhaps the most important question: will the Food Safety Modernization Act of 2010 improve food safety? Why or why not? What are the key elements of the act and how do they differ from what is currently in place?

LIGHTFOOT: The overriding question is whether it’s going to improve safety. As written, in theory, it has potential to do that, but in terms of implementation, the answer is no. FDA and its personnel will be highly burdened with the shear amount of guidance, inspections, recording, and monitoring and the manpower is not there.

FUERST: Let me give you this thought: although the act imposes certain additional requirements, by and large food safety application of this act seems to ignore the fact that to some degree food grown and produced in the U.S. is already subject to inspection by the states, by the United States Department of Agriculture, by several sub-arms of the Department of Agriculture, in many instances by consortiums and coops that consolidate fruits and vegetables for marketing purposes, and third-party audits.

Nothing in this act gets new inspectors; no where does it say we’re going to fund 500,000 more inspections a year. When California has a budget deficit, it lays off the inspectors that could find the pigs contaminating spinach. To have a federal law giving FDA authority to chase down illness does nothing to protect food safety.

Q: How would you rate FDA’s effectiveness in its surveillance and enforcement infrastructure? Does FDA have the ability to execute the requirements?

FUERST: We have state inspectors climbing through fields, looking through cow sheds and coop facilities; yet we have foodborne illnesses. Inspectors are going though peanut plants and not identifying problems. And the big ag distributors are buying the tainted product. Wholesale coops buying eggs were supposed to be inspected by Illinois inspectors. Either it’s a problem of failure of inspection or absence of inspectors.

If Congress invested billions of dollars in additional inspectors, training and resources, the act might have legs to stand on.

LIGHTFOOT: It’s not much different than the 2009 tobacco regulation, which didn’t account for the dearth of inspectors. When the tobacco legislation was enacted to give authority to FDA to regulate tobacco products, in order to create that division, almost half the employees from the Division of Import Operations and Policy (DIOP), which is FDA’s division in charge of imported food, were sent over to establish tobacco regulation.

The action lead to diminished food safety of imports because it took the front end of FDA in Maryland for all imports of food into the U.S and put it in charge of tobacco. Those inspectors still haven’t been returned.

FUERST: I’m convinced if Congress allowed money for state and FDA inspectors, and wrote a statute to make funds available to consortiums and food coops that could train and staff adequately, then FDA’s new power to recall and the ability to enhance food safety makes sense.

Q: How does the act affect imports?

LIGHTFOOT: The main point is to increase the number of inspections in foreign facilities. One provision within the first year of enactment is that FDA must conduct 600 foreign facility inspections.

Q: Based on the scope of food imported into the U.S., and the political and infrastructural challenges, how will this play out?

LIGHTFOOT: The act states if the facility doesn’t allow the U.S. to inspect, it can’t import into the U.S. However, the reality is there are more than 600 foreign facilities exporting food to the United States from Spain alone, and several thousands in China.

Q: How does The Food Safety Modernization Act of 2010 relate to the Bioterrorism Act? Does it parallel, overlap or conflict in any way?

FUERST: One of the prime methodologies FDA has always utilized to protect safety of imports is a barrier created on imports. All food theoretically can be inspected when it comes to the U.S. After the 2001 Bioterrorism Act was enacted in October, it pushed the border back by giving identification responsibility to foreign establishments so FDA could inspect food oversees. But that’s not the way it turned out. The Bioterrorism Act is nothing more than a paper chase.

The principal means still exists of foreign food subject to enforcement of U.S. regulation when it passes through the border. Spinach grown in California and shipped to Oregon may not be inspected. If spinach comes in from Mexico it does get inspected, but not all adulterated product will get caught. The reality is there are not enough compliance inspectors and customs employees at the border to inspect everything. FDA does a risk-based approach on who gets inspected and who is allowed to pass without inspection. There is no way to do 100 percent.

When it comes to domestic, we have state and federal ag inspectors, and third-party audits from field to store. Very little food is sold at ag stands where Americans drive by and buy it. Grocery stores have the means for inspection, but all too often it’s on an incident basis now. There is something wrong when contaminated eggs can be sold at countless supermarkets.

Q: What advice would you provide to Congress, to FDA, to the industry regarding food safety regulation?

FUERST: What are we going to do about it? Let’s examine the problem stemming from the peanut butter manufacturer making product for 20 different brands. The way the story came out, the factory passed the state inspection, and federal requirements were not implemented.

How about the fines that ought to have been imposed on the distributors, and those stores that could have conducted their own inspections? What they were exposed to was the cost of a recall and an image issue.

Q: Isn’t the risk of destroying your brand an incentive in itself?

FUERST: The notoriety of selling contaminated peanut butter faded once the entire blame went back to the peanut butter factory. What if we imposed a duty for the distributor contracting with that factory to do inspections and bear responsibility? The methodology would change to a fines and penalties process born throughout the food distribution channel.

Lots of companies, particularly ConAgra, had a whole public relations team managing the adversary of the publicity of buying peanut butter from that factory. But we now know of obvious bad conditions at the plant. Why weren’t companies that were buying it inspecting the plant?

When a farm in Illinois was identified as having salmonella in its eggs, companies announced recalls, but they were not fined. If you’re driving too fast, you may slow down because you don’t want to get a ticket, or you’re afraid of getting hurt or hurting someone else, otherwise you may just decide to speed. If your only reason not to speed is because of getting a ticket, the solution is to raise the cost of the ticket.

I call it velocity of the heart. If the only reason for not cleaning the plant, not rinsing produce in accordance with rules, or not filtering water running through the canal is a fine, then the way to food safety is to have more inspections and penalties for non-compliance.

Q: Doesn’t your speeding analogy presume recklessness or intent to do harm? In the produce business, if an outbreak occurs, not only is it tragic from a consumer health standpoint, but it can bankrupt companies, do massive damage to the industry’s reputation. Even if you put ethics aside, from a business/profitability standpoint, what company wants to operate in a way that could lead to contaminated product?

FUERST: If you talk to food producers, they want to produce clean products, don’t want fines, or to damage their reputation, but they also don’t want costs higher than their competition.

Q: To that point, where is the incentive for a company to invest in the best food safety practices, if a competitor does the required minimum, and when a problem occurs FDA treats everyone the same?

LIGHTFOOT: We can get there by making sure good producers are inspected less because the risk is lower. FDA needs to identify high risk facilities subject to more inspections. The act increases frequency to at least once every three years.

Q: A lot can go wrong within three years!

LIGHTFOOT: If you’re going to say we have to inspect all the time, you better hire more inspectors to do it, but all you hear is cut the budget, cut the budget. Food is inspected by two government agencies, the Department of Health and Department of Agriculture. The Department of Health is closed three days a week. And there’s no money for overtime.

Building a system of standards and inspections within the supply chain becomes much more robust than saying FDA has all new jobs to do without the resources. That doesn’t make food safer. Maybe you promote industry inspections with a carrot on the stick.

Q: Is there a discrepancy between what is required of U.S. companies as opposed to foreign companies? Would this Act create more equity?

FUERST: I don’t think domestic food suppliers really understand the level and anxiety of food importers. Every food import is subject to potential inspection. We confront inspections all the time on behalf of clients. The system can be very arduous and very, very difficult.

Q: In what ways?

FUERST: For example, if a product is tested and proves adulterated or contaminated, even if the test done is questionable for validity of results, that food won’t be allowed to enter into the States. The company can’t get a second test.

The bosses at FDA will tell you they just don’t have the time to inspect something a second time. If product tests filthy, they’ll refuse that product. It is almost a given that company will be placed into a red-flag status in which all entrees will be inspected until it proves five consecutive clean entrees not adulterated or misbranded.

Q: Have you dealt with any cases that shed light on your concerns? Could you provide examples or scenarios that could give our readers a better understanding?

FUERST: We had a client with onion fields in Texas, and adjacent lots in Mexico. Because product was on the other side of the river, to bring it in from Mexico it had to go through inspection. It found onions that could have been exposed to a pesticide. That same pesticide was present on the Texas onions.

It took years working with the FDA to get the situation cured with the onions grown in Mexico. Yet, our client was always able to ship his Texas onions. It wasn’t his pesticide. A pesticide used in another farm drifted in the wind to a small section of his onion farm, classifying his entire Mexico facility tainted. The Texas facility would have experienced the same phenomenon, but he had no problem shipping onions from Texas around the country. The equity is in favor of the U.S. producer.

LIGHTFOOT: Another client coop purchases cucumbers from a couple dozen farms in Canada, sorting them in Toronto and shipping them across the border. One of the farms used a pesticide authorized for use in Canada, but impermissible and not approved by EPA; less than 10 percent of his cucumbers had been affected by that pesticide. When sorting cucumbers by size for packaging for retail stores, some cucumbers exposed to that pesticide ended up in packages, which prevented any cucumbers from entering the country.

That same pesticide was authorized for use in the state of Georgia. EPA had created an exemption because the state was suffering an infestation, so those cucumbers exposed to that pesticide were allowed to be sold in Georgia. It took months and huge fines to get the Canadian company product restored to the condition to import to the U.S.; not withstanding the fact that several farmers in Georgia could distribute cucumbers as they wished.

This pesticide was authorized for use in Canada, and in Georgia, but the foreign company was stuck, even though the NAFTA treaty entitled it the same treatment as though it was a U.S. company.

FUERST: The idea that domestic companies have a greater burden than foreign companies is nonsense. The burden for foreign companies is 100 times greater. The Canadian cucumber producer was a consortium buying from dozens of farms, just one of the farms used the pesticide approved by Canada, and that one field with particular infestation paralleled the same problem in Georgia.

Because those cucumbers mixed in packaging for size requirements, all the cucumbers from that coop were banned. Even though the coop discontinued using that farm, it still took more than two years, and tens of thousands of dollars in fines to get them back into importing.

Q: What is your overall assessment of the Food Safety Modernization Act of 2010?

FUERST: The act is more focused on domestic producers, but the act is useless. It’s like a pencil without a point; good to stick in someone’s eye but you won’t write anything with it. It’s just a piece of legislation. The idea that FDA can engage in food science is a good thing, but if you’re going to create a food safety component, do so taking into consideration what you already have.

We have the capacity to make sure food is safe from farm to fork, and we have people employed to do that. We need to fund and train properly, and impose self-discipline requirements through fines and penalties on coops, distributors and retailers.

If a retailer puts tainted food on the shelf, we’re going to punish you. Retailers will make sure it is not tainted and will go and inspect its sources. If we give retailers an out where they are vindicated by saying, ‘We bought this from a factory in Georgia and lots of others did too and we all got fooled,’ the media team can defuse the impact.

Q: How does the act increase FDA’s legal and regulatory authority? Would you consider this legislation sweeping in that regard or more public relations/political in nature?

FUERST: Until this act, FDA was not given authority for mandatory recalls of food. The FDA publicity wagon was able to shame companies into doing so. It is true that by FDA threatening notoriety and brand damage, it becomes a motivating factor for a company to do a recall, even though FDA couldn’t compel one.

This act enhances FDA’s power for mandatory recalls and mandatory penalties, and a company death penalty by not continuing registration status. Penalties on companies that contracted with that particular producer, and making sure everyone in between from field to store had fines and penalties dealt would be a step in the right direction.

Q: Is the legislation designed to do that?

FUERST: The new act does not create the fines and penalties requirements throughout the food supply chain that would cause ConAgra or Nabisco to make sure the factory manufacturing product is doing so in a safe way. We know only relying on brand equity is not sufficient or the peanut butter incident wouldn’t have occurred.

LIGHTFOOT: If the act is funded properly and an equitable system is put in place, it could improve food safety. If it’s funded the way the Bioterrorism Act was funded, it will be a paper chase.

We thank both Mr. Fuerst and Ms. Lightfoot for sharing their expertise. We take their principal claim to be that whether the bill will theoretically advance food safety is moot because the act will never be funded adequately to fulfill the vision of its designers.

There is a lot of truth here. If you really believe that annual inspections of foreign food facilities is necessary, you need tens of thousands of additional inspectors.

This strikes us as a common problem in the translation of expert opinion into law. Experts know what is needed, what they would do, so urge a professionally designed HACCP plan and inspectors on site. Then, in the legislative process that comes out as a risk-based plan done by the farmer and an inspection once every three to five years. This is so distant from what the experts proposed, it is not clear it will do any good at all.

Of course, we are not that enamored of inspectors at all. Generally speaking, pathogens are invisible. By law, there are USDA inspectors in meat plants all the time. That hasn’t stopped the contamination of hamburger with e. coli.

In fact, we are skeptical about the whole idea that you bring safety about by inspections. We are all in favor of good audits as a learning tool to help people get better. Inspections that will close you down seem to us likely to make people clam up so they don’t lose their jobs. Besides, think of how well all those banking examiners did at preventing the financial crises.

We do agree that if you think about the peanut butter and egg situations, the key question is why big buyers didn’t care more? The ideas of charging fines, etc., raised in the interview is one approach. In our piece titled How to Improve Food Safety: Aggrandizing the FDA Only Distracts from Real Solutions in The New Atlantis, we called for a switch in liability standards so that buyers would have more liability and certainly an obligation to engage in due diligence. This is similar to the British system and would create a new environment that would encourage food safety.

Here is a prediction: The law will come into force, there will be no faster improvement in food safety than we have experienced without the law. So self-proclaimed advocates for food safety will blame the House Republicans for refusing to vote enough money to support the bill. After this enormous increase in federal power, they will propose another increase in federal power.

We thank Mr. Fuerst and Ms. Lighthouse for helping us think through the implications of this new law.

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