How to Improve Food Safety

The recent recall of fresh-cut romaine lettuce processed in an Ohio facility by a company called Freshway Foods has given a new rallying cry to activists trying to spur quick Senate passage of the FDA Food Safety Modernization Act. The Center for Science in the Public Interest (CSPI), a self-proclaimed consumer advocacy group, made this statement:

While consumers wait for Congress to pass food safety legislation, the plants that process and bag lettuce and the farms that grow it are operating under an industry honor system which clearly failed in this case. The FDA can’t tell us when it last had inspectors in the plant where this lettuce was processed. Congress urgently needs to give the FDA the resources and authority from the farm forward, transforming it from a reactive agency to an agency focused on preventing contamination.

Freshway is conducting this recall on a voluntary basis, because — even with the presence of this serious food safety hazard — FDA lacks the ability to order a recall. Giving the FDA mandatory recall authority is another reason why the Senate should bring S. 510, the FDA Food Safety Modernization Act, to the floor without further delay.

This is all a non sequitur. The implicated company promptly recalled its product in accordance with FDA requests; giving the FDA authority to recall would not have affected the case. The proposed legislation would require that the FDA inspect “high risk” food processing facilities just once a year and others once every four years. But the facility involved in this case already was regularly inspected by many government inspectors and private auditing groups. There is no indication that more frequent inspection by the FDA reduces the incidence of foodborne illness.

With its present authority, the FDA can already recommend anything it wishes. The great “spinach crisis of 2006” was, in fact, a simple FDA recommendation that consumers not eat, and vendors not sell, fresh spinach. The fact that the FDA had no mandatory recall authority did not matter: no reputable supermarket or restaurant chain would sell or use a product the FDA recommends against using.

In fact, if the FDA knew how to “prevent contamination” of fresh produce without compromising other values, such as affordability, it could simply suggest these procedures and recommend against the consumption or sale of produce not grown or processed in this fashion. It doesn’t do so, not because it lacks mandatory authority but because it hasn’t the foggiest idea of how to “prevent contamination” of fresh produce.

Indeed, the claim made by CSPI that food safety practices have “clearly failed” only makes sense if you believe that the proper goal for a food safety system applied to a product grown under the open skies, subject to wind, rain, animals, and other variables of Mother Nature, is that nothing should ever go wrong — an expectation for safety we don’t apply to autos, airlines, or any other facet of our lives.

The reality is that we know very little about food safety. Nobody knows the migration rate of E. coli O157 or how far a filth fly can carry a pathogen. In the absence of definitive answers, food safety on the farm is a continuum, not an absolute.

Common sense would indicate that if a five-foot buffer around a farm is good, a ten-foot buffer is better and a fifty-foot buffer better still. If putting a trap every hundred yards to catch rodents in the field is good, then trapping every fifty yards is better, and every twenty-five yards better still. If land floods, possibly bringing unknown pathogens to the soil, postponing planting for three months is prudent, six months more prudent, five years, super-prudent.

There is no place on the continuum of actions at which we can declare food to be definitively and absolutely “safe.” All of the food safety actions available to us are just steps toward reducing risk. Each of those steps has the effect of increasing the cost of the product to the consumer — and may also involve costs to other values, such as environmental preservation.

We are capable of building cars that could withstand 100-mile-per-hour collisions. But the law does not require this, because we recognize that such expensive, heavy, fuel-guzzling vehicles would contravene other values, such as affordable transportation and reducing our dependence on petroleum. Similarly, though we may value food safety, there are also other things we value. We don’t grow each leaf of romaine in a controlled indoor environment akin to a semiconductor manufacturing facility “clean room.” We don’t require agricultural workers to decontaminate and don hazmat suits to avoid passing pathogens on to the produce. These actions would increase the price of produce dramatically, thus depriving many of the opportunity to eat healthier diets. And even if these precautions were taken, there remains the possibility that cooks and servers — both at restaurants and at home — might contaminate the produce.

The FDA already possesses enormous power: It can and has stopped commerce in whole industries and blocked the entry of produce from companies and countries. With its vast influence on consumers and trade buyers, it can bankrupt almost any produce farmer, rancher, packer, or processor. Few will take the risk of crossing the FDA.

To be sure, government has an important role in food safety — properly understood in three categories. First, it must examine the legal system and understand that how it ascribes liability shapes the behavior of people and businesses. Second, government should work to change the incentive structure inherent in today’s liability system so as to encourage the desired safety activities. Third, the role of effective government in this arena needs to be reconceived not as simply bigger government but as government that does well what it attempts to do — more effectively discharging its traditional responsibilities of establishing a legal structure for commerce and effectively policing and contributing to the dissemination of knowledge.

How would this work in practice? Here is a six-point plan to revise and improve the federal government’s approach to food safety.

1) Switch to a Negligence Standard from a Strict Liability Standard, and Switch Primary Liability to the Trade Buyer
In the 1963 case Greenman v. Yuba Power Products Inc., the California Supreme Court unanimously ruled that a “manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being.”

This decision, which consumer advocates considered a major advance for food safety, had two significant unintended consequences.

First, it established that absolute liability lies with the producer. Parties down the chain, such as retailers, are only contingently liable in the event they were to lose a lawsuit. As long as the producer can pay, the retailer is off the hook. Consequently, the primary food safety concern among retailers in America is that their vendors carry sufficient liability insurance. By contrast, in the United Kingdom and certain other foreign countries, supermarkets can be held liable in court if a person becomes ill or dies and it is shown that the retailer did not exercise proper due diligence in vetting suppliers.

Second, because the standard is “strict liability” and because food safety outbreaks are costly and unpredictable “black swan” events, farmers and processors get no return on their investment in food safety if they have the bad luck to have an outbreak. In other words, the liability is strictly theirs whether they invested millions, going above and beyond all food safety standards, or they did nothing at all.

Combining this “strict liability” standard with a concentrated buying environment, where large chains such as Wal-Mart, Costco, Kroger, Safeway, and Supervalu account for the vast majority of purchases, results in a potentially troublesome situation. At these big buyers, although official corporate policy may place a priority on food safety and the individuals employed may care about food safety, the day-to-day institutional imperative is to get lower prices from vendors. Most producers are more than willing to give buyers exactly as much food safety as they are willing to pay for. But buyers, who are not liable for food safety problems, have precious little incentive to pay extra for higher food safety standards.

A simple switch in the legal standard from strict liability to negligence, combined with a change to make trade buyers hold primary liability on food safety matters, would dramatically alter the incentives.

Under this plan, producers — now knowing that they can’t be held liable if they follow all the best practices on food safety — would have enormous incentive to invest in this area. Buyers, knowing that their own stock could tank if they have to pay out multimillion-dollar judgments, would have a whole new interest in food safety and more reason to pay top dollar to get the safest product.

In other words, food safety is primarily a tradable good in the marketplace. In deciding that the producer is liable no matter how diligent his efforts and that the retailer is not liable no matter how lax his efforts, the judicial system has distorted the way the market meets the consumer interest in food safety. Solving this problem is far more likely to enhance food safety than giving the FDA additional power. After all, the FDA doesn’t produce or buy food; it is always going to be a much more indirect player in moving the needle on food safety than members of the industry.

Of course, even with a much more robust food safety effort by both buyers and retailers, the occasional foodborne illness outbreak could cause death or injury. This might be treated as a case of “assumption of risk” of eating raw produce, similar to getting beaned on the head by a fly ball when watching a baseball game. These activities have risks, no matter what; acknowledging them may lead to more prudent behavior, such as declining to consume certain products if one has a compromised immune system. Ironically, by constantly trying to reassure consumers of the safety of the food supply, government officials have made prudent behavior by consumers seem unnecessary, and they have inured consumers to marketing pitches based on safety efforts. Why buy irradiated ground beef, for example, if the government keeps saying all beef is safe?

2) Root Out Bribery and Corruption in Food Safety Certification
Although there is a role for activist government in food safety, it is not what the “food safety community,” preoccupied with giving the FDA more money and authority, now hopes to see passed into law.

The best federal agency to enhance food safety is not the FDA but the FBI. Few buying operations have the capability to have their own personnel inspecting and monitoring producers along today’s global supply chains. The solution is to rely on third-party certification agencies. Trade buyers can establish their own standards or agree to accept other well-recognized standards, such as those of the British Retail Consortium. Adherence to these standards is then confirmed by various independent auditing groups. This is essentially the same mechanism the USDA uses to implement organic certification. The problem is that there is widespread corruption associated with these certifications, especially in areas such as China, Eastern Europe, and many developing countries, though auditors that are less than rigorous are also well known in the United States.

The corrupt sale of certifications poses a fundamental threat to food safety, and switching to government inspectors doesn’t solve the problem. First, the U.S. government has no authority to run inspections in China. Second, if the government were to use locals in other countries to run inspections, it would face the same problems as a private auditor — keeping the loyalty of local employees whose family, clan, and national interests all compel them to approve facilities and products. Third, whether through sloth or corruption, there are all too many examples of government inspectors not doing their jobs right here in the United States — from rats running wild in a KFC that had been inspected just the night before to horrid conditions at the 7th Street Market in Los Angeles to a payola scandal at the Hunts Point Produce Market in New York.

Beyond establishing a proper liability regime, increasing the reliability of food safety certifications by rooting out bribery and corruption is perhaps the single most valuable contribution the federal government could make toward food safety.

3) Invest in State Health Laboratories
Another useful contribution would be to help increase the capacity of the state laboratories that do so much of the actual work in identifying foodborne illness. Although some states, such as Minnesota and Oregon, have exemplary reputations, other states simply don’t invest in this arena. The food system is national and international, so a weak link affects everybody. An upgrade here would be a wise federal investment. The proposed food safety legislation moves in this direction but is overwhelmingly about giving the FDA more power.

4) Invest in Food Safety Research
The produce industry reacted to its food safety travails by establishing a Center for Produce Safety at UC-Davis to research food safety issues in order to better understand what really causes and what might really prevent pathogen contamination. But this kind of basic research could easily absorb tens of millions of dollars each year, far beyond what the industry can raise on a voluntary basis. Publicly funded investments in research may pay off in real understanding and thus better policy.

5) Revitalize the Ag Extension Service
The old agricultural extension service was and is the primary tool by which the government has traditionally tried to spread best practices among the farming community. Yet since 1988, federal funding for the ag extension service has declined 2.2 percent in real dollars per year on average. Farmers are not generally food safety experts, but they can be taught best practices. The ag extension would welcome the opportunity to help boost the competency of farmers in this arena — but this valuable network of educators is being allowed to atrophy while money is being directed instead to the FDA.

6) Educate Consumers About Food Safety
Finally, broad consumer education on how to properly clean, separate, cook, and chill foods has more potential to reduce foodborne illness than anything else. Nobody wants to blame Mom for a foodborne illness, but even perfectly clean food can fall victim to pathogens if it isn’t treated properly. For instance, potatoes by themselves are almost immune to food safety issues, because they are always cooked which kills the pathogens, but homemade potato salad gets plenty of people sick every year.

The rush to empower the FDA is the reflexive response of those who see a problem and assume that the government can solve it. In truth, the institutional pressure at the FDA is overwhelmingly directed toward self-preservation. That is why in all its recommendations to growers everything is purposely kept vague. So, for example, the FDA recommends that growers make sure they are “taking effective measures to exclude pests,” that farmers ensure “that any well is properly designed, located, constructed and maintained,” and also that farmers ensure “that the water is of a sufficient microbial quality for its intended purpose” — but, of course, these “recommendations” are so imprecise as to be almost useless.

Farm groups have pleaded with the FDA for clear and specific guidance. They desperately want instructions that say something like “a field must be surrounded by a fence six feet high that extends two feet under ground and the aperture of which is never more than 2.25 inches.” But the FDA won’t say this because the agency understands that safety is a continuum, that two feet underground is good but three feet is better, and five better still. The FDA knows that right now, if there is an outbreak, it can blame the farmer and say (as CSPI claims in the statement above) that the fact that there was an outbreak is ipso facto proof that the producer’s plan was inadequate.

FDA executives realize that if the agency made a specific proposal, the recommendation would be no more than an attempt to juggle our imperfect knowledge of pathogen prevention with the realities of the world’s need for not only safe food but also plentiful and affordable food. No matter what standard was set, one day some creature would go under the FDA-specified fence, or over it or through it, leaving the agency itself responsible. With or without a new food safety law, the FDA will remain primarily focused on issuing guidance and regulations more designed to protect its own reputation than to solve food safety problems.

Real improvement in matters of food safety will not result from new regulations or from granting “enforcement” powers to the FDA. It will only result from reforming legal structures so as to incentivize industry members to engage in best practices, and by returning the government emphasis in food safety to its traditional responsibilities.