The Problem with Government Food Safety Regulation

We all have a vested interest in making sure that our country's food supply is as safe as it can possibly be.

And we have an enormous and powerful federal regulatory body, the FDA, which regulates food safety in this country. And yet our regulators failed to prevent the recent rash of food contamination problems (raspberries? peanut butter? spinach? jalapenos?) that we've faced here in the USA. In fact, some have even made the argument that our food regulators have lost the confidence of the American people.

How did we get here?

This article will try to frame up some of the issues that come up when the government tries to regulate the food industry and prevent lapses in food safety. As always, I'd love to hear input from my readers, who in my opinion are some of the most insightful out there, so please share your thoughts below in the comments section.

The Lifecycle of a Government Regulator
There's a rhythm to the birth, life (and in rare cases, the death) of a governmental regulatory agency. It all starts when there's enough of a groundswell of popular opinion to regulate a given industry in the first place. And in the food industry in the late 1800s and early 1900s, we got exactly that, as the uproar following a wide range of egregious behavior by food and beverage makers drove the creation of a federal agency to regulate food and drug products (for a textbook expose of nasty food processing practices from that era, see Upton Sinclair's The Jungle).

Once the regulatory body gets established, things typically improve, often markedly. If all goes well, then new standards get set, enforcement procedures get put into place, bad guys get caught and put out of business, and the industry slowly but surely adjusts to improved standards.

Everybody wins during this stage: consumers get safer food, companies that are good actors gain market share as the bad guys leave the business, and the regulators (as well as the politicians who put them into place) get immense political capital for helping the industry improve its standards and practices.

Symbiosis
However, things don't always remain quite so perfect. Often the regulatory agency and the industry it regulates begin to develop a symbiosis that hampers the agency's ability to objectively regulate the very industry it was created for.

One of the key sources of this symbiosis comes from the fact that the regulator and the industry typically hire from the same talent pool. The regulators need people with industry knowledge so they can put reasonable regulations into place. Likewise, the industry needs people with regulatory knowledge so they can competently follow the regulations.

Often, a great way to enter the food or drug industry and secure a high-paying job is to first spend a few years working for government pay at the FDA. And what better way is there to show the world that your company is carefully following federal regulations than to hire a key regulator as a senior person in your company?

For better or for worse, a symbiotic--some might say a parasitic--relationship gradually begins between the regulator and the industry it regulates. They hire the same people, they all know each other, and in some instances, they gradually grow to need each other.

In a worst-case scenario, the regulatory agency gets bigger and bigger, gets staffed with more and more people from the industry, and slowly but surely, the organization's mandate begins to change from regulating to feeding its own budget and bureaucracy. We've just seen a classic example of this worst kind of symbiosis in my former profession, as the SEC and other regulatory bureaucracies utterly failed in their mandate to regulate the securities industry, despite having enormous staffs and huge budgets.

Throw Money at the Problem
Ironically, whenever a big problem slips by the regulators, say a peanut butter recall or e. coli contamination at a large beef processing plant, the initial reaction is often to increase the budget for the regulatory agency. This gives rise to a powerful, if counterintuitive, irony: the regulatory agency actually benefits by failing to do its job!

Political Grandstanding
Any of you who have watched a Senate hearing on TV will agree that our congressional leaders, from both parties, just love to grandstand. Whenever there's a hearing broadcast on CNN, whether it's about food safety, steroids in baseball or overpaid Wall Street executives, believe me, every congressperson sitting in on those hearings wants to make the most of their three minutes of speaking time on national TV.

This happens in print media too: witness this zinger of a quote at the end of a New York Times article on food safety where Michigan Representative John Dingell says, “as a result of the failure of giving Food and Drug the resources it needs, people are dying.” Is that a constructive comment, or is it needlessly inflammatory? The FDA already has an enormous budget--will giving it still more money really help it become a more effective regulatory body?

I guess it depends on your perspective. The thing is, there is just too much political capital to be earned in situations like this for our legislators to resist dropping inflammatory quotes like this. Of course, it is another matter entirely whether this actually helps solve the issue at hand.

In no way am I making the argument that we should eliminate regulation, nor do I claim regulators are universally incompetent. In fact, if there's any conclusion to be made from the recent rash of food contamination problems we've had in the US, we need more and better regulation.

My goal for this post is to illustrate some of the common issues and problems that emerge when our government tries to regulate something as enormous and as complex as our country's food industry. Many of the issues I've discussed are predictable and they've happened in many other industries over the course of our nation's history.

What You Can Do To Help
Most importantly, you can help by being watchful and involved citizens and voters. The next time there's a major food or drug recall, watch out for the political grandstanding. Watch the ensuing budget process and see where your tax dollars go. Observe the media with a critical eye, and note which of your congressional leaders are more interested in appearing to help solve the problem (while getting maximum media airtime, naturally), and which of your leaders are actually interested in solving the problem. And if you see your congressman or senator being a demagogue or playing games with public opinion, call them or write them and make sure they know you are watching. And voting.

Readers, what are your thoughts?

A big thank you to Accidental Hedonist for writing a series of articles on this subject and prompting me to think about these issues!

For Further Reading:
The Jungle by Upton Sinclair: This book, published in 1906, was famous for exposing horrendous food safety practices in the meat processing industry. Its publication was one of the key forces behind the passage of the 1906 Food and Drug Act.
The 1906 Food and Drug Act and the History of the FDA From the FDA's own website.
FDA Finalizes Report on 2006 Spinach Outbreak You can see your tax dollars at work right here in this report. I think.

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