HACCP, cost/benefit analysis, food safety, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,

Ahl, Alwynelle (Nell) S.

English

Research Papers in Economics

PART FIVE:  Avenues for Improving
the Quality of Benefit/Cost Analysis
of Food Regulations
19.  A Policy Perspective on Improving
Benefit/Cost Analysis:  The Case of
HACCP and Microbial Food Safety
A. S. Ahl
Strategy and Policy in the Food System:
Emerging Issues
EDITED BY
Julie A. Caswell and Ronald W. Cotterill
Proceedings of NE-165 Conference
June 20-21, 1996
Washington, D.C.
© 1997
Food Marketing Policy Center
Department of Agricultural and Resource Economics
University of Connecticut
and
Department of Resource Economics
University of Massachusetts, AmherstA Policy Perspective on Improving Benefit/Cost
Analysis:  The Case of HACCP
and Microbial Food Safety
A. S. Ahl  (aahl@usda.gov)
ORACBA, USDA
Room 5248, South Building
14th and Independence, SW
Washington, D.C.  20250
Keywords: Cost/benefit analysis, food safety, HACCP
Copyright © 1997 by Food Marketing Policy Center, University of Connecticut.  All rights
reserved.  Readers may make verbatim copies of this document for non-commercial purposes by
any means, provided that this copyright notice appears on all such copies.231
19
A Policy Perspective on Improving Benefit/Cost
Analysis:  The Case of HACCP
and Microbial Food Safety
A. S. Ahl1
Introduction
Policy concerns are raised and regulatory development ensues when a hazard is identified that poses
a threat to health, safety, or the environment.  Since complete information about hazards, their
probability of occurrence or the magnitude of their effects in the population or on the environment is
often unavailable or unknown, policy makers and regulatory analysts are left to construct policies and
intervention strategies without full knowledge.  The intervention strategies (mitigation measures) are
often expensive costing industry and ultimately consumers a great deal of money without concomitant
increases in productivity.  On the other hand, failure to take action may result in harm or death to citizens
or destruction of species or unique environments.  The goal is always to protect appropriately with the
least cost:  creating regulations that are both effective and efficient.  Risk analysis—comprised of risk
assessment, risk management, and risk communication—is a tool which was invented for just this
purpose.
Risk assessment is the structuring of all available, relevant scientific information in a way which
allows for the development of strategies for mitigating the hazards.  Risk management is the choice of
available mitigation measures based on cost-benefit and other analyses.  Ideally, risk communication will
be open and multi-dimensional during this process, including all affected parties, including the policy
(decision) makers.  The best regulatory development for human health, safety, or the environment begins
with good analyses:  risk assessment and risk management.
Risk assessment is the process of carefully answering three questions.  (1) What can go wrong?  This
is the hazard identification, and there are a variety of methods and approaches to identifying hazards.
(2) What is the likelihood that this event will go wrong?  This is known as the probability element.  (3)
What is the magnitude of the consequences if the hazard occurs?  Given in biological terms, it might
answer the question of how many people become ill or die from a given hazard.  Questions 2 and 3, the
probability and the magnitude, constitute the concept of risk.
Risk assessment is traditionally conceived as an adjunct to policy analysis and decision making.
However, it can be usefully employed to support evaluation of research priorities.  A brief discussion is
given later in this chapter.
Risk management asks three parallel questions.  (1) What can be done about the hazard?  This
question addresses the potential mitigation measures which are available.  The risk reduction realized
by each mitigation measure should be estimated.  (2) What are the costs and benefits presented by the
mitigation measures?  In this process, the costs and benefits for each of the mitigation measures must
be considered.  That is, what are the costs for a given amount of risk reduction achieved?  (3) What are232
the impacts of current decisions on future options?  This analysis should evaluate a variety of concerns.
For example, will a given mitigation measure for the hazard of initial concern be replaced by a hazard
of equal or greater concern by the mitigation.  Does the mitigation measure provide a remedy which
limits flexibility for future choices; does carrying out the mitigation result in an irreversible situation?
The importance of this is emphasized by the apocryphal story from a South American city which stopped
chlorinating its water supply in response to a report that chlorinated hydrocarbons (arising from
chlorinated water supplies) cause cancer.  The decision makers in this city decided to stop adding
chlorine to their water supplies immediately without considering the risks associated with this decision.
Thousands died acutely with cholera and other water-borne diseases.
Setting Microbial Food Safety Priorities for Research
Microbial food safety priorities can be set from risk-based evaluation.  The actual hazards for food
safety risk assessment have been identified, though an in-depth characterization of these may be lacking.
Certainly the likelihood of occurrence and the severity of the impact of each hazard is less well under-
stood.  One can only argue for more research, more and better active surveillance, more vigilant
physicians and better data collection.
In trying to develop a rational strategy for food safety research to guide regulatory action, how might
we set priorities for research?  One way is by tackling the most serious problems first, whether in
research or in regulatory policy making.  In risk jargon, this is called the “worst first” strategy.  If the
focus, for sake of an example, is on making beef a safer product, what type of beef is most often involved
in outbreaks of disease?  The sparse data available suggest that ground or comminuted products are
implicated more often as the vehicle for disease.  Further investigation shows that fresh ground
hamburger is the culprit.  Is that based on hamburger’s popularity or on some proportional relationship
between the vehicle and the frequency of consumption?  If hamburger consumption risk is high, the next
step is to consider where most hamburger comes from.  Does it come equally from all slaughter classes
of animals?  Most dairy beef goes into hamburger, and present evidence suggests that about 40 percent
of hamburger comes from dairy beef.  Dairy beef comes disproportionally from smaller slaughter houses
(CEAH 1994).  This brief analysis suggests that further research to reject or confirm these statements
should be made.  If they prove to be correct, then under the worst first strategy, risk management would
focus on small slaughter establishments and/or production of dairy beef as part of the risk management
for this hazard.
In this example of the worst first strategy, both research and regulatory action strategies can be
designed.  However, note that the choice of the analyst in this example, to focus on beef only, is itself
a management judgment.  Ideally, one would consider the entire range of foodborne hazards from all
livestock categories, ask the questions for risk assessment, and assure that enough confirmatory research
is completed to guide policy makers to appropriate regulatory actions.  Performing this analysis on the
entire data set from foodborne outbreaks would result in numeration of the most frequent problems with
the greatest severity.  A relative ranking of the risks could then direct research efforts as well as policy
making.
Appropriate Roles of Academia, Consumers, Government, and Industry
Food safety research is a large complex enterprise in which many groups have valuable information
to share.  Collaboration is clearly in the best interests of all parties.  However, there is no “market” for
collaboration, no driving force which insists on collaboration.  There needs to be another way to promote
this activity.233
The collaborative mode would allow better identification of hazards and more complete under-
standing of risks; a sharing of successful strategies as well as data.  In order to assure that such col-
laborative interaction occurs, the formation of an Institute for Food Safety encompassing academia,
consumers, government, and industry is proposed.  The focus would be to develop the Institute as a
center for database maintenance and information exchange, with two-way communication between the
Institute to all collaborating parties.  This Institute should encompass information collection and
exchange on all livestock food production activities, processing, and consumer behavior.  Ultimately it
should be international in scope.
Improving Future Research and Data Collection
Future research and data collection are of three general types.  First, arrangements should be in place
to collect as much pertinent data as possible from “natural experiments,” wherever they occur.  That is,
when outbreaks of foodborne illness occur, as in Japan in mid-1996, every opportunity should be taken
to understand as much as possible.  Second, the use of decision analysis, risk assessment with uncertainty
analysis, and cost-benefit analysis should be used to guide future research and data collection from
producers and others.  Third, with the insight gained from risk assessment and decision analysis, plans
for scientific research should be coordinated among collaborators to assure that timely concerns are being
researched.
Successful Strategies for Reducing Microbial Contamination of Foods
There has been great emphasis on high technology in developing tests for microbes, instruments for
treatment of carcasses, or for sterilizing food packages.  Though these are all laudable enterprises, it is
important to remember that not all wisdom lies with high tech.  My favorite story is the one about the
abattoir which uses a bell activated by the inspector.  Following the evisceration step, if the inspector
finds visible fecal contamination, s/he immediately rings a bell and announces which line the contami-
nated carcass came from.  This simple act of  providing immediate feedback is said to have cut visible
fecal contamination rates significantly where it has been instituted.  If it works, use it!
Note
A. S. Ahl is Director of the Office of Risk Assessment and Cost-Benefit Analysis (ORACBA).  I 1
would like to thank Dr. Michael McElvaine for reading the manuscript and with his comments, providing
insight and information to improve it.
Reference
Centers for Epidemiology and Animal Health (CEAH).  1994.  Escherichia coli O157:H7, Issues and
Ramifications.  USDA/APHIS/VS, Fort Collins, Colorado, March.

A POLICY PERSPECTIVE ON IMPROVING BENEFIT/COST ANALYSIS: THE CASE OF HACCP AND MICROBIAL FOOD SAFETY

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