Is FSMA Doomed? $115bn Says No!
In the regulatory tug of war that has been characterized by President Trump vowing to roll back much of the FSMA food safety legislation put in place by President Obama, there are several very worrying issues that affect all Americans. It’s a potentially deadly development for U.S. consumers as cases of food adulteration have clearly demonstrated in recent years.
In the high-profile case of the Peanut Corporation of America, the owner Stewart Parnell was sentenced to 28 years in jail for knowingly allowing products adulterated with Salmonella to be sold to consumers. The known consequences of this case were 9 people killed, 714 sick and potentially thousands of others unreported.
According to the U.S. Attorney's Office, in 2011, a listeriosis outbreak killed roughly three dozen Americans who consumed infected cantaloupe. A pair of Colorado farmers were sentenced to five years' probation, including six months of in-home detention, for their role.
In addition; The U.S. Center for Disease Control (CDC) “The number of outbreaks associated with an imported food increased from an average of 3 per year during 1996–2000 to an average of 18 per year during 2009–2014.”. This represents a total of 195 outbreak, resulting in 10,685 illnesses, 1,017 hospitalizations, and 19 deaths. It’s important to note that only a fraction of all foodborne illnesses are ever reported. CDC estimates 48 million people get sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases each year in the United States. That’s a lot for an industry that is supposed to give us sustenance, nutrition and enjoyment to have on it’s conscious.
Moral points aside, there is a very strong economic argument for food safety on many facets.
Productivity: With 48 million Americans getting sick every year and 128,000 hospitalizations there comes a massive cost to industry and economic spend in addition to the cost to the health care system. A 2010 study by the Journal of Food Protection put the annual cost at $77bn per year to the US economy.
Cost of Product Recall: The average food product recall cost in the USA is put at over $10m per recall. Against a backdrop of over 500 food safety recall sin 2016 this puts the cost to U.S businesses at somewhere in the region of $5bn per year. The true cost will be much higher, as this estimate covers only the cost of lost sales, destruction of food and other logistical costs.
Brand Damage: The value of a brand is variable and related to profitability, marketing and whilst it is hard to quantify the true cost of brand damage. The industry itself has reported that brand damage costs 250% of the cost of recall meaning that a cost of at least $12.5bn per year needs to added into the equation.
Food Fraud: This is a growing problem as food supply chains have globalized in recent decades and it’s not going to go away any time soon. Food fraud is hidden, dangerous and estimated to cost U.S businesses in excess of $10-15bn by the Grocery Manufacturers Association of America.
Adding these costs up, we get somewhere close to a $115bn cost to the U.S economy every year, and that’s just what the costs we have a reasonable handle on.
Looking at the other side of the coin, regulation not only keeps our food safe, it creates professional jobs in inspection, audit, training, consulting, in I.T and, yes, in government. We won’t even try to estimate the size of the food safety industry but it is significant and adds huge value to the economy in addition to helping ensure the safety of food.
Time will tell if FSMA is doomed but my gut feel is that there are too many down sides, just a few of which we have highlighted above, for sensible people to roll back the FSMA legislation. In the richest country in the world, if we can’t afford food safety, then we might as well condemn our economy to a third rate, medieval society subject to the ravages of disease and food inequality. This statement on foodprocessing.com we feel is close to the reality and will make any wholesale roll back of FSMA a major struggle. “FSMA is a carefully crafted, bipartisan overhaul of a critical system that hasn't been updated in 75 years. There even was support from the food industry, consumers and the government.”
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