As FSMA Final Rules Near Publication, New Report Cites Economic Issues

With the first of the final rules of the Food Safety Modernization Act (FSMA) expected out today, August 31, a new working paper states that preliminary analysis of the four “most burdensome regulations” of FSMA shows that they fail to demonstrate that the benefits of the rules will outweigh their costs. “Regulations Implementing the Food Safety Modernization Act,” is published by Richard A. Williams of the Mercatus Center at George Mason University.

In some cases the rules are unnecessary; in others they are likely to be ineffective, the author states, adding that for some of the rules, there is very little evidence that they actually address a significant food safety problem. For others, the FDA has been unable to provide evidence that the rules will be effective at reducing foodborne risk. Imposing ineffective rules on food production is likely to raise food prices and constitute a tax. This will disproportionately burden lower-income Americans, who spend a larger portion of their incomes on food than do those who are better off.

The paper cites the following as key problems of the rules:

• For some food safety rules, the FDA has failed to identify a large, recurring problem in need of federal regulation, e.g., the intentional adulteration rule. Because the FDA has four anti-bioterror regulations in place and food companies have undertaken extensive activities to protect their businesses, the report believes the intentional adulteration rule is merely an unjustified addition to the regulatory burden.
• Congress and FDA have apparently ignored evidence that similar, existing rules have failed to reduce food safety risk, the report states. For example, in the current rulemaking, the FDA has imposed a version of the Hazard Analysis Critical Control Points (HACCP) system on the entire food industry. Yet two past rules requiring HACCP have been ineffective. For example, before implementing its seafood HACCP rule, the FDA hypothesized that 50 percent of the rule’s benefits would come from reducing illnesses caused by raw oysters—but illnesses have actually increased. The food industry that created HACCP has for the most part already adopted it where it is useful. For raw products, such as fresh produce, it is not likely to be effective.
• FDA offers no evidence to support the claim that its regulations will reduce food recalls involving foodborne illnesses, the author states. In fact, more regulation seems to lead to more recalls, not fewer.
• FDA’s rules consistently stretch the FSMA to the extreme limit when narrower rules would be more justifiable. For example, the only significant hazards relating to animal food that the FDA can point to are associated with people touching or consuming contaminated pet food. But the FDA’s animal food regulation extends to all animal food, including food for farm animals. A more tailored rule would apply only to the 300–400 pet food facilities instead of to all 4,000–7,000 animal food facilities, reducing costs tremendously while preserving all expected benefits.

Solutions to these problems that the author sees are:

1. Congress should revisit the FSMA under the Congressional Review Act. Using information provided by comments on the FDA’s regulations, Congress can eliminate prescriptive requirements, get rid of statutory deadlines, and put a hold on finalizing any FDA rules. Meanwhile, it can perform risk assessments on the rules and reexamine the FSMA’s provisions to see which regulations might be salvageable to create “functional rules”—rules whose benefits exceed their costs.

2. In the absence of congressional action, the FDA should implement the FSMA in an economically responsible way. Where no significant problem exists, it should choose regulatory alternatives with minimal economic impact. Where there is a problem, it should narrowly focus regulation on the facilities and products involved.

Download the full publication or the research summary.