As a producer in the ascendant food renaissance
(defined by a sudden respect for all things small and local) I’ve noticed a
curious double incongruity: First, the clamoring for “safe,” centrally managed
food rules leads unerringly to the sort of consolidated, industrially processed
foods many of the clamorers so despise in the first place. Second, enacting
more-stringent safety regulations actually reduces the incentive for truly
excellent food-safety standards.
First things first…. Food safety in the United
States is regulated by no fewer than 15 federal agencies and thousands of
separate governing procedures. More rules, in accordance with the principle of
regulatory capture, often lead to fewer players and larger, more-centralized
food conglomerates. That is the nature of things. By way of corroboration, the
food industry has “cautiously applauded” the latest rules proposals, a sure
sign that big business sees government bureaucracy as a helpful barrier to
competitive entry. Philip Armour, the great Gilded Age meatpacking industrialist,
was always quick to pronounce support for additional government safety
regulations: they always improved his bottom line.
Today, the Grocery Manufacturers Association (GMA)
is chiming in, telling us, “Consumers expect industry and government to work
together to provide Americans and consumers around the world with the safest
possible products.” Mr. Armour couldn’t have said it better himself. As a
card-carrying consumer myself, I vehemently demur. I expect industry alone to
provide safe food; government should police industry when it lies, steals, or
cheats. We don’t want the two “working together,” unless, that is, we greatly
desire further consolidation in the food industry.
In 1970, for instance, the top five beef companies
controlled about a quarter of overall market share; today the top four command
more than 80 percent. Regulatory accretion over this period has, not
coincidentally, also increased. The reasons for that are complex, but Patrick
Boyle, of the American Meat Institute makes a revealing comment:
If you
ask the CEOs of the four largest beef companies, one concern that they have is
the upstart companies that are coming into the business, the small regional new
entries that are coming into the beef industry, who one day may have the agility,
the acumen, and the competitive instincts to achieve the market share levels
that the larger companies have today.
Advertising the intense regulatory environment of an
industry is a time-honored deterrent to would-be upstarts. As increasing
administrative restrictions enter the arena, a number of small-scale food
producers proportionally bow out.
But isn’t food safety such a pressing concern, a
threat to public health so grave that we can’t be bothered with this kind of
corporate fratricide? Perhaps. Statistics that “thousands die every year” do
not help us grapple with the magnitude of the alleged threat. They do, however,
contribute to the passage of legislation such as the duly enacted Food Safety
Modernization Act. And that is where we have to be careful.
Let’s try some perspective: According to the Centers
for Disease Control, the estimated number of deaths caused by food-borne
illness numbers around 3,000 a year. Before we send in the Marines, let’s
consider that the same data show us that more people die by intentionally
strangling themselves each year. Or that more than eight times that number die
each year by accidentally falling off things. Moreover, 70 percent of those
food-borne illnesses (and presumably deaths) result from poor food-handling
procedures during preparation at home or in restaurants, not from poor
food-production practices. The number of people we’re attempting to save with
this kind of legislation, ironically enough, is significantly lower than the
number of people who die each year from malnutrition (known affectionately in
our business as “starving”). If we were really interested in saving lives,
logic might dictate, we would make sure that this supposedly dangerous food was
going to people who needed to eat it!
Keeping food safe
So is there a paradox here? If we agree that even
one death from food-borne illness is too many (and it is), then how can we
squeeze out that lingering menace without artificially exacerbating the very
problem we are trying to solve?
I wax heretical here but let me offer a
counter-solution: Allow small food companies (which I assume we’d like to see
more of) to select whether they want to be regulated under the new rules
(estimated to cost as much as $30,000 a year) or to opt for adding an “Unregulated”
notice to their label. Yes, allow them to swim in a laissez-faire pond, relying
only on well-informed customer feedback. Companies would have access to, but
not be bureaucratically held to, the latest techniques for proper food handling
and customers would quickly determine who does things well and who does not
(and not, by the way, by getting sick; consumers are smarter than that). In
effect, we would tap the latent power of markets to manage food safety instead
of the blunt instrument wielded by administrators. Contrary to popular myth,
markets are very good at giving us what we want, even if those things are
intangibles such as clean air or safe food. I predict that food safety in the
unregulated sector would quickly surpass the regulated sector as innovation and
competition are unleashed.
Imagine for a moment what the food world would look
like if we made food safety a competitive advantage. Imagine, if you will, a
Volvo of the food world vying for an “ultra-safe” reputation. A small company
could demonstrate (through third-party quality assurance, a sophisticated
testing regime, or something not yet thought of) that its product was
measurably safer than its competition’s. Corporate self-interest would be
instantly harnessed toward the greater public good. Imagine a continual
striving for the next-higher grade on a “Good Housekeeping Seal of Approval” or
an “AAA” rating from Quality Assurance International. Instead of aiming simply
for the “Inspected — Passed” stamp of the current regime, companies would be
competing to be the best they could possibly be.
Regulations are good for imposing minimums, but not
at creating excellence. Since our food-safety “problem” is clearly in the
vanishing margins, excellence is called for. That can really be attained only
when incentives are structured to push our producers (and consumers) to go the
extra mile to make food as safe as it can possibly be.
The FDA’s proposed rules, while appearing to be
timely and necessary, are in fact counterproductive. The New York Times,
meanwhile, reports that they “can serve as a role model [sic] for what can be
achieved when the private and public sectors work together to achieve a common
goal.”
Indeed, and I don’t expect to be impressed.
About the author: Paul Schwennesen is a southern
Arizona rancher who raises, processes, and directly markets all-natural,
grass-fed beef. He can be reached at AgrarianLiberty.com.
This article was published by The Future of FreedomFoundation.
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