Hodges, James H.

English

Research Papers in Economics

INDUSTRY  APPROACHES TO FOOD SAFETY  REGULATION
James H. Hodges
American Meat Institute
The American Meat Institute (AMI) is the national
organization  which represents  meat  packers  and  pro-
cessors  and their suppliers throughout  North America.
Its members produce the majority  of meat  and poultry
products manufactured  in the U.S.  It has been a pres-
ence  in Washington  since around  the  turn of the  cen-
tury.  The focus of this paper is on the meat and poultry
industry,  and  the  government  agencies  that  intensely
regulate  the  industry.
Inspection Programs
By  way  of background,  today's meat  and poultry
inspection  program  has its  origin  in the Federal Meat
Inspection Act of 1906 (chapter 3913,  34 Stat. 674).  At
that time, the primary public health concerns were dis-
eased animals  and unsanitary  conditions in meat pack-
ing plants.  The law requires that all cattle, sheep, swine,
goats and equines-and  their carcasses  and parts-be
inspected and passed  as human food for distribution in
interstate  commerce.  The  1957  Poultry  Products  In-
spection  Act  (P.L.  85-172)  extended  to chickens,  tur-
keys,  ducks,  geese and  guineas  many of the  same re-
quirements mandated for meat.  The Wholesome Meat
Act of 1967  (P.L.  90-201) further  extended inspection
programs  to  the  state level  by  establishing  a federal-
state cooperative inspection program for plants that pro-
duce  and  distribute  meat  and  poultry products  within
state  boundaries.
Twenty-five  states  currently  maintain  inspection
programs that are required to be at least equal to federal
standards.  Similar requirements  also apply to imports
from  foreign  countries,  which must  have  equivalent
inspection systems.  The primary goal of these inspec-
tion programs  is to prevent unwholesome,  adulterated
or misbranded products from being sold as human food,
and to ensure that meat and poultry products are slaugh-
tered and  processed under sanitary conditions.
The  United  States  Department  of Agriculture's
(USDA) legal responsibilities  are primarily focused an
slaughter and processing facilities.  It maintains juris-
diction over federally-inspected  meat and poultry prod-
ucts during  storage,  distribution  and sale, but federal
law exempts retail  and restaurant operations  from the
type of food safety  inspection required in federal- and
state-inspected  packing and processing  plants.  More-
over,  current meat  and poultry  inspection  statutes  do
not give  USDA  food  safety jurisdiction  on  farms,
ranches,  feedlots  or other  live  animal production  fa-
cilities.  No inspection system can eliminate all food-
borne illness risks from meat and poultry, but there is a
growing  consensus  that  food  safety  can  best  be  en-
sured through oversight programs that are coordinated
from production through  consumption.
USDA's Food Safety and Inspection Service (FSIS)
uses significant  resources to carry out  its responsibili-
ties.  FSIS has a total staff approaching  10,000 employ-
ees.  More than 8,000 field inspectors and  supervisors
inspect  approximately  6,500  plants.  The  estimated
cost  to operate this  massive,  labor-intensive  program
in Fiscal Year 1998 was $675 million, or approximately
$100 thousand per FSIS-inspected facility.  In contrast,
the Food Drug and Administration (FDA) has a budget
of slightly over $200 million for food safety activities
and approximately  900 employees to regulate  an  esti
Umated  53,000 establishments that produce, process  or
store  food.  That  translates  to  an  expenditure  of ap-
proximately $4,000 per FDA-inspected  facility.  These
statistics demonstrate that meat and poultry manufac-
turers  are the most intensely  regulated segment of the
U.S. food industry.
Existing  governmental resources  devoted to food
safety are disproportionately  directed at meat and poul-
try manufacturers  because federal laws require continu-
ous  animal-by-animal  inspection  and  a  daily inspec-
tion presence  in processing facilities.  Current statutes,
coupled  with FSIS  inspector  opposition,  restrict  the
agency's flexibility to shift its resources in response  to
changing health risks.  FSIS  has limited ability  to tai-
lor its inspection frequency based on the risks presented
by the type of animal, processing  technology  or other
risk factors. FSIS's  effectiveness  and efficiency could
be  enhanced  if the  agency  focused  its  resources  on
products  and  processes  that present the  most  signifi-
cant public health risks.
FSIS has a broad  range of enforcement  powers to
prevent unwholesome,  adulterated or mislabeled  meat
and poultry from  reaching  the public.  Plants are pro-
hibited from operating unless the government provides
inspection services.  FSIS often exercises its authority
to  withhold  or  suspend  inspection  if plants  are  not
meeting their statutory or regulatory obligations.  Such
actions shut down plant operations.  It is also illegal to
sell  or transport  adulterated  or  misbranded  products.
Unsafe products  can be condemned and removed from
the market.  Violation of the federal  meat and poultry
laws can result in substantial fines as well as imprison-
ment.
Over the past two decades, USDA has asked Con-
gress for additional statutory authority to mandate prod-
uct recalls without obtaining court orders, to summarily
withdraw  inspection  services  from  companies  USDA
believes  have violated the law,  and  to unilaterally  im-
pose civil fines  on companies that fail to comply with
the laws, regulations, or agency's orders.  In light of the
scope and breadth of USDA's existing enforcement ar-
senal, and the absence  of any proof that the tools cur-
rently  available  to  USDA  are  inadequate,  additional
authority  is  not necessary.  Moreover,  because  of the
potential  administrative  abuse  these  requested  sanc-
tions would present, new enforcement authority would
be contrary  to  sound  public  policy.  More  punitive
measures will not and cannot make food safer.
Adopting HACCP
In  1996, the federal  government and industry  be-
gan a  several-year process to dramatically change  the
way meat and poultry are inspected.  This new regula-
tory program, commonly  referred to as Hazard Analy-
sis  Critical  Control  Points,  or  HACCP,  more  clearly
defines  the  responsibilities  of the  regulator  and  the
regulated  industry.  Meat  and  poultry companies  are
required to have a plan  for producing  safe  food.  The
government's  regulatory  role is to set food safety per-
formance  standards  and  to verify  through its  inspec-
tion  activities  that  the  company  meets  those  perfor-
mance  standards.  Federal inspectors  maintain  a con-
tinuous presence in plants.  However, where inspectors
previously  looked  for  problems  that had  already  oc-
curred,  under the new  system,  they monitor plant ac-
tivities  to be sure appropriate  steps are being taken  to
prevent problems.  It is  a fundamental  shift  in the pri-
orities of the federal  government.
Substantial progress has been made in recent years
by industry  and government  in identifying  and adopt-
ing  effective  food  safety  standards  and procedures.
HACCP has  become the framework for both industry
and  government  efforts  to improve  food  safety.  The
adoption of HACCP procedures was mandated in 1995
by the Food  and Drug Administration  (FDA) for sea-
food processors, and in 1996 by the USDA for meat and
poultry slaughterers and processors.  Many companies
Uin  other segments  of the  food  industry  have  adopted
HACCP on their own, and HACCP is increasingly rec-
ognized  in other countries  and  by international  orga-
nizations  as  state-of-the-art  in science-based  process
control for food safety.
An important feature of HACCP is that it provides
the basis for clearly defining and  modernizing indus-
try and  government  programs  to ensure the safety  of
food.  Government  does  not produce  food-govern-
ment action cannot  make it safe.  At the point of pro-
duction and processing, only food companies have the
capability and responsibility to make food safe.  Main-
taining  food  safety  also  requires  responsible  private
action  at each  step of distribution,  retail preparation
and sale,  and subsequent  handling by consumers.  The
government's  core regulatory role, which HACCP can
facilitate,  should be  in verifying  that  companies  are
meeting their basic food safety responsibilities,  estab-
lishing  food  safety  performance  standards  based  on
the best available  science,  and providing accountabil-
ity for businesses to meet those standards  through ap-
propriate  oversight and enforcement.
The transition  to this  new HACCP-based regula-
tory program has created several implementation chal-
lenges.  Many FSIS personnel find it difficult to aban-
don traditional "command and control" inspection tac-
tics.  Many inspectors with  no scientific training con-
tinue  to  dictate  how  a  plant's  production  process  is
designed and operated.  FSIS needs  to improve its  in-
spector performance  to  achieve  fair and  uniform  en-
forcement of the regulations.  A more  in-depth under-
standing  of food safety manufacturing  principles and
the  agency's  inspection  modernization  process  is
needed.  USDA's credibility and the ultimate success or
failure  of its  new  regulatory program  depends  on al-
lowing  companies  to  produce  products  in a  manner
that results in uncompromising food safety.  FSIS should
focus on verifying that the products are safe and aban-
don  the  practice  of mandating  how  product  safety  is
achieved.
Regulatory and policy changes  are also needed to
create an environment that is consistent with HACCP-
based inspection.  FSIS began a regulatory review pro-
cess  in  1995  to revise  or repeal  existing  regulations
that  impede  implementation  of  a  scientifically-de-
signed  HACCP  program.  FSIS  has  made  limited
progress  in discarding  old, outdated regulations.  The
result is a new HACCP-based inspection  program lay-
ered  over  the  traditional  regulatory  compliance  pro-
gram.  Inspectors  are  using new  procedures  to  deter-
mine  compliance  with  old regulations.  FSIS  should
complete its regulatory review process  as soon as pos-
sible.  Otherwise,  the  new  HACCP-based  inspection
program will be scientifically  indefensible and thus, it
will inhibit the adoption  of new technologies  and  in-
novations that can improve the safety of meat and poul-
try  products.
Food Handler Education
Food handler education is an extremely important
element of a  production  to  consumption  food  safety
system.  The  American  Meat  Institute  Foundation
(AMIF) has trained thousands  of meat and poultry in-
dustry  workers  in  HACCP principles  and  basic  food
safety.  Joint training in these  areas between  industry
and government employees  would be even  more ben-
eficial. AMIF has spent seven years providing HACCP
training for the meat  and poultry industry.
AMIF recently conducted HACCP briefings in 20
U.S.  cities.  The briefings immediately  followed half-
day  HACCP  briefings  that  USDA's  Food  Safety  and
Inspection  Service (FSIS) conducted  in each of the lo-
cations.  Both  the AMIF  and the  FSIS briefing  were
designed to help prepare meat and poultry plants with
10  to  500 employees  for HACCP  implementation  in
January  1999. The FSIS briefings focused on the regu
Ulatory requirements plants must meet.  The AMIF brief-
ings focused on practical tips for operating under USDA's
new  Pathogen  Reduction/HACCP  Rule.
Consumer Education
Consumer  education  is  an  other important  com-
ponent of a farm-to-table food safety system.  Last year,
industry, consumers and the federal government formed
the Partnership for Food Safety Education and launched
a consumer education program called Fight BAC  T! It
is  hoped that this  campaign  will  persuade consumers
to improve  risky food-handling  behavior and prevent
food-borne  illnesses.
AMI and the Food Marketing Institute administer
the Partnership and own the registered trademarks.  The
Partnership has raised more than $580,000 toward a $1
million  goal.  Among  the  accomplishments  in  1998
are:
*  More than 200,000 Fight BAC!1M Commu-
nity Action  and Supermarket  Kits have been
distributed in  an effort to spread  the educa-
tional word  of the campaign  to consumers
through community  businesses  and
organizations.
*  The Fight BAC!
T M television  public service
announcement  has  aired  on  100 television
stations for a total of over 200 million viewer
impressions since October  1997.
*  A Fight BAC! "'  radio public service
announcement  has been  used more than
23,000 times and  has been heard by an
estimated  43 million Americans.
*  The Fight BAC![M website (http.//
lwwtl.fightbac.org/) has received  1.5  million
hits, or nearly 250,000 per month,  since its
launch  in  1997.
Additionally,  the Partnership  will concentrate this
year on developing  educational materials for children.
Recent, unpublished research conducted by USDA and
FDA shows  that  the best  way  to reach  children  with
safe food-handling  messages in schools is through the
science  curriculum-and the  best grades  for learning
this  information  are the  third,  fourth,  fifth  and  sixth.
The  Partnership  is  developing  a classroom  teaching
guide  for Kindergarten  through the  third grade.  The
guide uses a BAC!TM  puppet, songs and games to teach
safe  food handling  to very young children.  A consult-
ing  firm  has  been  selected  to create  a  science  class
teaching  guide for the fifth through eighth grades.
Future Directions
The  meat  and  poultry  industry  is  committed  to
doing  everything  within  its powers  to ensure  that the
food  it  processes,  distributes  and  serves  to American
consumers  is  the  safest  and most  wholesome  in  the
world.  Companies strive every day to make their food
safety systems better.
Manufacturers  of meat and poultry  products rou-
tinely  employ many state-of-the-art  practices to mini-
mize  the risks of foods causing human illness,  but we
cannot  guarantee  all food  products  are  free  from  all
risks.  By the same token, no food inspection  system or
testing  program can guarantee zero risks.
One  central  question  facing  the  federal  govern-
ment  is  the  organizational  structure  of the  U.S.  food
safety  regulatory  system.  Most  organizations  repre-
senting the food industry believe the current organiza-
tional  structure  is  adequate  to maintain  the  safety  of
the food supply.  Most organizations  are far more con-
cerned  about  having  a  scientifically-supportable  in-
spection program than about where it is located withinthe federal bureaucracy.  However,  a serious debate is
emerging about the establishment of a single food safety
agency to regulate all foods.
On August 20, 1998, the National Academy of Sci-
ence  (NAS) released  the  report of the  Committee  to
Ensure  Safe  Food from  Production  to  Consumption.
This  congressionally-mandated  study  examined  the
scientific and organizational needs for an effective food
safety system.  The committee concluded outdated food
safety laws and a fragmented federal structure serve as
barriers  to improving  protection  of the  nation's  food
supply.  The report came to three primary conclusions:
*  An effective  and efficient food  safety system
must be science-based.
*  Current statutes  governing food  safety regu-
lation  and management  must be revised.
*  Reorganization  of federal  food safety efforts
is required.
The  committee  recommended  several  measures
regarding  the  scientific  and organizational  changes
needed to improve the U.S. food safety system, includ-
ing the establishment of a unified, central framework-
headed by one official-for managing all federal  food
safety programs.  Specifically  of interest  to the  meat
and  poultry  industry  is  a  recommendation  that  Con-
gress no longer mandate government-employee inspec-
tion  of each animal carcass.  The committee said out-
moded  safety  statutes,  such  as  the  visual  inspection
system for meat and poultry,  may detract from protec-
tion efforts by diverting resources from the implemen-
tation  of  science-based  inspection  reforms.  Instead,
the  committee  recommended  Congress  mandate  a
single set of regulations for all foods.  The report does
not recommend a specific organizational structure,  such
as a single food agency, but it clearly moves the debate
in  that direction.
In response  to  the  NAS  report,  President  Bill
Clinton issued an executive  order on August 25,  1998
that would create a President's Council on Food Safety.
The council would be composed of Cabinet and White
House officials and would be jointly chaired by Secre-
tary of Agriculture  Dan Glickman; Health and Human
Services  Secretary  Donna Shalala;  and  Neal  Lane-
the assistant to the President for Science  and Technol-
ogy.
The Council  will have three primary functions:
*  Developing  a comprehensive strategic federal
food  safety plan.
*  Advising agencies of priority areas for invest-
ment in food safety  and ensuring that federal
agencies annually  develop  coordinated  food
safety budgets.
*  Overseeing the recently  established Joint
Institute for Food Safety Research and ensur-
ing that it addresses  the highest priority
research needs.
We are hopeful that this council will provide more ef-
fective  leadership  for  a  comprehensive  federal  food
safety program.
Concluding Comments
Most Americans  have  a relatively  high degree of
confidence  in  the  safety  of the  food  supply,  presum-
ably  based  on  a  combination  of experience  and the
belief that there is a system in place to ensure that food
is  safe.  People react  strongly,  however,  when  a  food
safety problem strikes home or when the system itself
seems to have failed.  Such real or perceived failures in
the food safety  system capture  media attention which,
in turn,  heavily  influences  public  opinion  and  reac-
tion.
UaOutbreaks  of food-borne  illness  or other  food
safety problems  will never be totally eliminated.  The
food  system  is too complex.  Most consumers  recog-
nize and accept this reality.  Maintaining  public confi-
dence in the safety of food depends on communication
and  education.  Consumers  must  understand  how  to
protect themselves  from the most common food safety
hazards  by  proper  food  handling  and  preparation.
Confidence  in food safety  can thereby be  enhanced.
distributors  willingly  accept  their  responsibilities  to
produce  safe food.  Government has a valuable regula-
tory role, but it must expand  its leadership and invest-
ment in other areas such as food safety research, educa-
tion  and  technology  development.  Food safety  is  a
shared responsibility.  Maintaining  the  safety  of the
U.S.  food  supply  depends  on  all  participants  in  the
food  chain-from  producers  to  consumers-taking
appropriate measures  to prevent food-borne  diseases.
The fundamental  elements of a sound food safety
system  are  in  place  today.  Food  manufacturers  and
U

INDUSTRY APPROACHES TO FOOD SAFETY REGULATION

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