Filed under: Economics of Eating, food politics, Import/Export, labeling, local v. industrial, Mandatory COOL, Regulation
A recent Consumer Reports poll apparently finds that 92% of Americans want to see origin information on their food. This seems like pretty considerable demand, and is in response to the recent rash of food-borne illness outbreaks of the last year or so.
Opponents of COOL will doubtless point to their own studies which show lower demand for this information, and may also point out that polling techniques can be used to promote or diminish a desired response. In addition, it is unclear from the MSNBC report whether the poll asked customers how much extra they would be willing to pay for this information.
The argument that the market can provide COOL information on its own to meet this demand (and by implication would if demand made it likely that costs could be recaptured) is somewhat disingenuous. If reliable origin information were making it all the way to the retailer (who is after all the party most directly able to respond to consumer demands), certainly some retailers would already be providing origin information and including those costs in retail price, giving consumers the ability to choose.
The various industries are structured so that origin information is being lost long before it arrives at the retailer. The only likely way for a single firm to provide voluntary COOL is if that firm is a) vertically integrated from production through retail and either b) only buys meat from a single origin country or c) already has in place reliable segregation and tracking procedures throughout the chain of supply. A single firm which doesn’t meet those requirements is unable to initiate a market-driven solution, no matter how much consumers might demand it.
Additionally, as demand for COOL grows, the failure to provide origin information becomes a market failure: the market is structurally unable to allocate resources in accordance with consumer preferences (i.e., to allocate them efficiently). This may be a situation similar to the Dolphin-Safe Tuna issue of the 1990s.
Via Kate at the Accidental Hedonist.
An otherwise local cheesemaker has to ship her own milk to Pennsylvania in order to turn it into cheese, due to state pasteurization requirements in Maryland.
Last month I gave a presentation in my Comparative Law class, comparing cheese sale and production in the U.S. to that in France. During the question and answer period my professor asked a very pointed question: “Given what you have just described, do you really think that food regulation exists to protect consumers and the public health?”
I of course answered that wherever there is regulation in a marketplace, businesses will seek to influence that regulation so as to give themselves a comparative advantage over their competitors, and that many people believe that food regulation in the U.S. exists to protect the interests of the big ag. companies — a fairly safe non-answer answer: to address the question would have required more, and broader, research than required by a twenty-minute presentation on a fairly specific and rather technical topic.
However I suspect that another effect of this website will be to draw a picture, as others (such as Kate at the Accidental Hedonist) are already doing, of the FDA as a regulator which is to some extent hamstrung by political and business interests which lie in conflict with basic public health. Kate’s recent post does a good job of pointing this out, and should be read in its entirety.
The FDA lacks any authority. The snippet above regarding ConAgra is the perfect illustration of this. When the FDA requested documentation regarding a batch of peanut butter that was destroyed, ConAgra provided…well, nothing. In response to ConAgra’s inaction, the FDA simply walked away, as there was little in the way of legal recourse available to them.
Kate’s point runs counter to my own experience as a buyer at a small, independent specialty food shop: to our eyes, the FDA was able to exercise a great deal of power by requiring us to pay for expensive lab tests to prove that imported cheeses were free of listeria m. — tests which made selling those cheeses economically impossible.
Comparing imported cheeses to domestic peanut butter may be imperfect, as there are, and should probably be, different regulations for different products. But the bigger picture suggests to me that the FDA has a great deal of power over small and independent producers and sellers of goods, and very little over large producers.
From a public safety standpoint, this makes little sense, because the impact of a small producer or seller of goods on the public food supply is fairly small, arguably even de minimus, and food safety issues with small producers can almost certainly be handled better on a state or local level.
Of course, there are interstate commerce issues to consider: there is, I think, a good argument to be made that the U.S. economy is better served by applying a federal food safety standard: this makes it easier to transport foods across state borders, and, at least in theory, prevents producers in one state from having to compete with producers in another state who can produce a possibly equivalent product under a more relaxed regulatory standard. As interstate tarriffs are illegal, it makes some sense to level the regulatory playing field.
A level playing field cannot be had, however, if regulators are not to some degree immune to political pressure (in, I suggest, a similar way as U.S. Attorneys should be immune to political pressure), and political pressure is almost always tied to business interests.
Accordingly, there are at least two dimensions to reforming the FDA:
- Does the FDA have too much power? Not enough? Just enough?
- Does the FDA apply its power evenly across the board? Does it meet greater public health risks with greater vigor? Does it confront lesser risks for the sake of appearing successful?
The Ethicurean has an interesting article about sourcing hazelnuts from Turkey, which contains, in an aside, the following information about mandatory country of origin labeling:
Mandatory country-of-origin labeling (COOL) for meat, seafood, vegetables, fruits and peanuts (but not other nuts) was part of the Farm Bill that passed in 2002. However, after an outcry from the food industry, Congress put the program on hold for everything except seafood until 2008 (seafood labeling began in 2005). There is talk of using the 2007 Farm Bill to lift the hold on COOL (perhaps in exchange for a deal on the national animal ID system), but powerful forces are aligned against it — the big meat packers and giant chains like Wal-Mart, to name a few. COOL would require expenditures by manufacturers and might make labels more complicated, but I think that consumers deserve to know where their food comes from.
For kicks, I’m looking for any information that predicts the ways people’s buying habits would change if country of origin were written on every label.