Unintended Consequences Of Food Safety Regulation Quite Costly

FoodSafety_IconThe Food SafetyModern-ization Act (FSMA) signed by President Obama in 2011 is the first reform of FDA food safety policy since the Federal Food, Drug, and Cosmetic Act of 1938. FSMA mandates a science-based and risk-based policy to improve the safety of our food. It gives FDA authority to implement this policy recognizing resource limitations that mandate identification of the greatest risks and focusing resources where the greatest opportunities are to reduce those risks.

Under FSMA, all food-handling facilities are required to register with FDA every two years and cannot sell into interstate commerce without being registered. On-farm handling, holding, and packing operations are treated as a food facility, which is required to develop and implement a Hazard Analysis Critical Control Point plan. Realizing the potential adverse implications for small businesses, Congress added a number of exemptions to ease the burden on these small businesses. These include exemptions to those farms that sold food in the previous three-year period of $500,000 or less, and if more than 50% of their food sales were directly to qualified end-users. Qualified end-users included the consumers of the food regardless of location, or a restaurant or retail food establishment in the same state or not more than 275 miles from the farm. Commercially processed produce also is exempt if processed in a manner to adequately reduce pathogens. Other exemptions included farms with food sales of $25,000 or less and produce that is rarely consumed raw.

Same, But Not Equal

These exemptions result in 149,426 farms that are exempt or not covered by the law, leaving 40,211 that are covered (as reported by FDA in their analysis of economic impacts). Even exempt farms will be required to post notice of their business name and location at the point of sale, resulting in total costs of $3.8 million to those firms. To non-exempt domestic producers, total first year costs for compliance with the rules outlined by FDA were estimated at $699.79 million with recurring costs of $419.28 million to $459.6 million.
FDA estimates the benefits of this policy to be a 56.09% reduction in the estimated illnesses attributable to produce, from 3.12 million illnesses annually prior to the implementation of FSMA to 1.75 million illnesses after implementation. They contend these savings amount to $1.036 billion annually.

Paying The Price

The intention of these regulations is to make food safer for consumers and to mitigate the cost of food safety incidents in our society. Unintended consequences are those impacts occurring as a result of the regulation that do not contribute to the intent of the legislation. Exemptions provided under these regulations will provide more incentives for locally grown produce. The regulations would have minimal impact if they were equally felt by all producers. The regulations will increase the cost of growing and selling covered commodities in the national market. Those commodities will suffer a price impact on their demand, forcing them to compete with rival commodities that may be exempt. Non-exempt growers also will be forced to compete with growers who hold those exemptions because of size (small farms being exempt) or market (those selling into local markets are exempt).

The unintended consequences of this regulation are those producers who have established their presence in the national market will see their competitive advantage whittled away to small and local growers. We can only hope Congress understands these impacts and helps growers adjust to these rules. That will require money to develop safer technologies and to help implement those new technologies. Where does that money come from?

Topics: ,

Leave a Reply

4 comments on “Unintended Consequences Of Food Safety Regulation Quite Costly

  1. Are you serious?? This country was built on the backs of the small farmers. It was estimated that it would cost the small farmers more than $4K a year to comply with this monstrosity. This law was a mistake in the first place and was pushed forward by a consortium of big growers. Growers with enough income to be able to comply with all the regulations this law creates. The small grower will have to abide in some instances because of the liability created by past food issues such as the cantaloupe, spinach, lettuce, green onion, strawberry troubles. How about we really take a look at the reason for the contamination on a case by case basis and actually see what the problem was. I am willing to bet that it was something to do with manure on the organic front, improper hygiene by illegals on the large farms or blatant cutting of corners. Because of our small size we are more in contact with the growing of our produce than many of the large farms. Most of those guys are so large they can hardly call themselves farmers but now ride the seat of a CEO chair. Better stop, step back and take a look at what you have wrought. We should have just managed ourselves better and used GAP better. Don’t worry too much big guys as you will be pushing us little guys out and you will be able to improve your profits so you can continue to buy vacation properties and condos like that tomato grower.

  2. “The unintended consequences of this regulation are those producers who have established their presence in the national market will see their competitive advantage whittled away to small and local growers”

    Sounds good to me!!!

    1. And so the true meaning of the FSMA comes out. Push out the little guy with tons of regulations. RARELY is the little guy the problem. Even if he is, his produce is sold locally and the impact of any illness is felt locally and easily traced to his farm.

      Imported produce, large farm produce, etc. goes through multiple distribution chains, etc. any of which can be contamination sources. The small farmer is the backbone of the food chain. Not the guy growing 3000 acres who is no longer personally connected with what he is growing. His hundreds of employees do the work and he acts solely as a CEO or supervisor. That is NOT the definition of a “farmer”. It is the definition of corporate manager.

      This type of article is to be expected from national publications. Their advertisers push sales to mega farms. When was the last time you saw any of the large companies market to small growers? Ever?

      1. Matt, you are partially right. It is often harder for small growers to comply with food safety guidelines. That is probably why statistically there are more pathogens on produce from small growers. The contamination issues that affect many people are from the larger growers and these are the incidents that hit the news while often those from small growers are not reported – at least not on a national scale.

        And I agree that many of the contamination issues are away from the farm. Many of the recalls and sicknesses involve packing shed procedures. It seems that this is especially true in the processed produce products where the produce is cut, washed, and repackaged. These cut portions must be prime for pathogens reproducing and are often eaten without further culling of damaged or decaying portions of the product. Even if the pathogen can be traced back to the farm, the problem was multiplied by the processing and shipping package environment.

        The backbone of our food supply is now the large farmer. I can’t remember the exact statistics but it is something like 80% of our food is produced by 20% of our growers. I, farming with my brothers and sons, consider myself a middle size grower with just under 3000 acres (just over 1000 produce.) We don’t have hundreds of employees (actually less than 20) and don’t act solely as CEO or supervisors and are personally connected with what we are growing. But to do a good job and keep the food safe we have to think professionally and attend to detail much the way a corporate manager does.

        I feel for you small growers. Even with our combined operation we are still a small business and the Food Safety paperwork alone feels crushing. I can’t imagine doing it alone for a small operation. But I also fear the impulse to cut corners on food safety because the operation is small and you are trying to do everything yourself.

Farm Management Stories
drought management; irrigation; water management
CitrusClear Up Misconceptions About Water Use In Ag
August 31, 2015
Those in the industry need to to clear up misconceptions about water use in agriculture. Read More
Food SafetyLawmakers Urge FDA To Help Small Farms With FSMA Compliance
August 28, 2015
Letter from members of Congress asks FDA to expedite assistance and training for small producers. Read More
FruitsDo You Have #FarmFans? If Not, You Should
August 26, 2015
Your guests are already live tweeting their experiences of visiting your farm. Why not turn this into a social experience to promote your business? Read More
Virginia Tech campus in Blacksburg
CitrusCounting Down The Top U.S. Colleges For Natural Resources And Conservation
August 25, 2015
STEM-fueled area of study presents wide field of opportunity for future grads. Read More
Apples & PearsApple Growers, USApple Partner To Support Education
August 20, 2015
U.S. Apple Association (USApple), apple growers, and partner brands launch Apples for Education: Buy an Apple, Help a Student, to Read More
Charlotte's Web-medical marijuana in greenhouse
CitrusMedical Marijuana Endeavor Anything But Pipe Dream For Florida Nurseries
August 20, 2015
While applicants await fate for one of the five available licenses to weave ‘Charlotte’s Web,’ best-case-scenarios play out. Read More
CitrusMaps Show Impending Impact From WOTUS
August 19, 2015
Plots indicate expansion of EPA’s reach across Pennsylvania, Virginia, and Montana. Read More
The Latest
CitrusWhole-Farm Revenue Protection Insurance To Be Available…
August 31, 2015
USDA offers greater flexibility for beginning, organic and fruit and vegetable growers. Read More
drought management; irrigation; water management
CitrusClear Up Misconceptions About Water Use In Ag
August 31, 2015
Those in the industry need to to clear up misconceptions about water use in agriculture. Read More
Virginia Tech campus in Blacksburg
CitrusCounting Down The Top U.S. Colleges For Natural Resourc…
August 25, 2015
STEM-fueled area of study presents wide field of opportunity for future grads. Read More
Charlotte's Web-medical marijuana in greenhouse
CitrusMedical Marijuana Endeavor Anything But Pipe Dream For …
August 20, 2015
While applicants await fate for one of the five available licenses to weave ‘Charlotte’s Web,’ best-case-scenarios play out. Read More
CitrusMaps Show Impending Impact From WOTUS
August 19, 2015
Plots indicate expansion of EPA’s reach across Pennsylvania, Virginia, and Montana. Read More
branches covered in ice
CitrusWicked Winter Coming This Way Says Latest Farmer’s Alma…
August 17, 2015
Super El Niño-influenced weather patterns align to paint a less-than-pretty portrait. Read More
man trying to prevent from being boxed in by boxes
CitrusEconomic Progress A Threat To Box In Agriculture [Opini…
August 11, 2015
For growers, buffer zones, noise ordinances, nutrient runoff concerns, and sinkhole threats all are factors heightened with nearby neighbors. Instead of trying to beat them, why not join them? Read More
Immokalee< FL, Farm and Grove aerial view
CitrusFlorida Farmland Remains Hot Commodity
August 5, 2015
Recent multimillion-dollar deal involving Immokalee citrus grove is among several high-acreage, high-dollar transactions. Read More
Farm ManagementFarm Bureau Awards Mini-Grants To Communities Across Th…
August 4, 2015
White-Reinhardt grants are allocated through county and state farm bureaus and are used to create new agricultural literacy projects or expand existing ag literacy efforts. Read More
Farm ManagementLocally Grown The Lipman Way
August 3, 2015
With Lipman Local, the Florida operation has developed a mutually beneficial program that sources local produce around the country and helps smaller growers raise their game. Read More
Farm ManagementCorrect Misconceptions About Farming [Opinion]
August 3, 2015
Misinformation about agriculture abounds. We need to put a stop to it and set the record straight. Read More
Farm ManagementAn Excellent Industry Education [Opinion]
July 31, 2015
The end of one era, and the ushering in of another. Read More
money
CitrusBankrupt Florida Farm To Yield Plenty Of Land, Equipmen…
July 30, 2015
As many as seven different buyers could be part of this Chapter 11 proceeding. Read More
Farm ManagementFour Great Pricing Tips From U-Pick Experts
July 30, 2015
Although each of the growers I talked to has his or her own take on a pricing structure, they all Read More
Farm ManagementHow To Find Your Perfect U-Pick Pricing Structure
July 30, 2015
If there’s one mission impossible for pick-your-own operations, it might just be how to set a pricing structure. Odds are you’ve Read More
Farm ManagementUnited Farm Workers Turns Up Heat On California Growers
July 29, 2015
With temperatures soaring into the triple digits, union organizers are focusing on heat illness regulations. Read More
Citrus2 Dozen Florida Nurseries Vying For Coveted Cannabis Gr…
July 27, 2015
With only five spots available to produce the low-THC ‘Charlotte’s Web’ strain, tedious review process is in full swing. Read More
CitrusUSDA Expands Crop Insurance Options For Fruit And Nut G…
July 24, 2015
The USDA announced the expansion of crop insurance to provide additional options for fruit and nut producers. The Supplemental Coverage Read More