What is in this article?:
- In late 2010, Congress passed the Food Safety Modernization Act (FSMA).
- Farm-to-fork, preventive approach embodied in the Act reflects a consensus on how to improve food safety systems.
- Economic research on similar food safety initiatives can help guide implementation of the FSMA.
U.S. Food Safety Policy Enters a New Era
A series of highly visible foodborne illness outbreaks in recent years helped create the political momentum to pass the most extensive reform of the Food and Drug Administration’s (FDA) food safety authority since 1938. The Food Safety Modernization Act (FSMA), signed into law in January 2011, reflects a systematic approach to food safety management shaped by science, industry, and government over the past two decades. As FDA’s Deputy Commissioner recently explained, the FSMA shifts the focus of FDA activities from “catching food safety problems after the fact to systematically building in prudent preventive measures across the food system, from the farm to the table.”
While the FSMA directly affects only FDA authority, its implementing regulations and policies are likely to influence food safety practices throughout the Federal Government and the food and farm sectors. More efficient regulation could reduce the burden of new programs on producers and consumers while helping to ensure that food safety goals are met. ERS research conducted over the past two decades provides a number of lessons that can help identify efficient and effective means of implementing the Act.
Markets and Lawsuits Alone Provide Insufficient Safeguards
Each year, roughly 1 in 6 Americans—47.8 million people—get a foodborne illness. Most of these illnesses are mild and resolve in a matter of days. But many result in chronic, even lifelong, outcomes, including kidney disease, arthritis, and digestive disorders. About 128,000 people per year are hospitalized from these illnesses; 3,000 die. While the chances of getting ill from any particular meal are very small, foodborne sources cause as many illnesses and deaths as the flu in a typical year.
Providing food safety is not free. In an unregulated market, firms cannot afford to invest in safety if buyers are not able to distinguish between the safety of competing products and are not willing to pay a premium for the safer offering. Unfortunately, the safety of food products is usually unobservable to consumers, and often even to companies in the food industry.
Because consumers cannot directly observe food safety, retail markets will generally undersupply it. But there are other places in the supply chain where market incentives help ensure food safety. Major recalls or other food safety failures are more likely to harm companies with significant brand equity, particularly those involved in retail sales. To protect themselves, some companies—particularly national restaurant chains and suppliers of branded meats—have set up supply contracts that specify safety standards or reward use of innovative technologies to improve safety. But such firms supply only a portion of the Nation’s food.
Some see liability suits as a major driver for firms to invest in food safety. ERS research shows that jury awards in personal injury suits offer limited incentives. The nature of foodborne illnesses makes the likelihood low of identifying what food and which producer caused injury. Plaintiffs were found to be most likely to win if they could link their illnesses to a specific pathogen or a large outbreak. Yet, Centers for Disease Control and Prevention (CDC) epidemiological studies can identify the pathogen source for only 20 percent of U.S. foodborne illnesses in a typical year. Less than 1 percent of foodborne illnesses are part of an outbreak.