Raw Milk: The Irony

I don't have a dog in the fight on raw milk vs. pasteurized milk.

But from a food debate standpoint, raw milk is an utterly fascinating topic. Why? Because it shows how certain food industry issues simply do not line up into a clean political matrix, with a clear "left side" and a clear "right side" telling us what positions we should hold.

In fact, holding a generalized position on the overall food industry can put you on the wrong side of an issue when it comes to a specific food product.

Raw milk is one such product.

To illustrate what I mean, imagine a Brooklyn-based foodie who dislikes and distrusts Big Food, Big Ag, Big Corn and Big Soda and anything else with a capital B, including Wal-Mart and Monsanto. In her view, the food industry clearly puts profits before people, and it should therefore be more heavily regulated by the government. Probably much more.

Further, this idealistic foodie thinks we need to change the default food environment, which she believes contributes heavily to society's obesity problem. This is why she strongly supported New York City's large soda ban, and it's why she also believes we'd be far better off if the government went ahead and just banned HFCS too. In her view, strict policies and regulations like these are good things: they are for our benefit and for our protection.

Now, we may not agree with all of her views, but I think we can at least agree that, in general, her positions are internally consistent. And please note: we at Casual Kitchen are not passing judgment on the merits of these various positions in any way! Reasonable minds can disagree reasonably.

One day, however, this Brooklyn foodie learns about all the incredible merits of raw milk. She discovers, from scanning some websites, that raw milk is delicious, healthful, and far superior to pasteurized milk. She can't wait to become a regular raw milk drinker.

But to her horror, she discovers that her government is as strict with raw milk as it she wishes it would be with HFCS! In fact, the federal government mandates the pasteurization of milk and milk products--for our benefit and for our protection.

Worse, eighteen states strictly prohibit the sale of raw milk under any conditions--including her neighboring state of New Jersey. And even in her home state of New York, raw milk is strictly regulated. In New York it is entirely illegal to sell raw milk at retail stores--again, for our benefit and our protection. Raw milk can only be purchased at specifically licensed and regulated farms, and there are strict rules that these farms must follow, including prominently posting signs warning consumers that this milk does not have the “protection” of pasteurization.

"Wait a minute," she thinks. "Why does the government force pasteurization on us? And how can the government possibly decide it's illegal to buy raw milk? This makes no sense at all!"

Our Brooklyn foodie's confidently-held, generalized position on the overall food industry ended up depositing her on the exact wrong side of the debate over raw milk. She's discovered, to her intense confusion, that she wants a more heavily-regulated food industry--except when she doesn't. Hopefully she'll see the irony.

Readers, what do you think?


Read Next: Oppositional Literature: The Key Tool For Achieving True Intellectual Honesty


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A Slaughterhouse Catch-22 for Food Regulations

One of my favorite readers left a great comment about food regulations on my Interview With FDA Commissioner David Kessler post. Here's the portion that struck me as particularly provocative:

I have no patience with the "nanny state" objection. All the governmental regulations that have been put in place to protect citizens are there in response to citizen demand. The government doesn't do a single.blessed.thing that citizens haven't asked for.

If someone is smart and responsible and capable of figuring out, e.g., how to read a food label and why it's desirable to wear a seat belt, well yippee for them. The regulations don't impinge on their rights at all.

Double true. With extra truth sauce.

However, if we're going to be intellectually honest here, we owe it to ourselves to at least try to think up the contra-case: an instance where food regulation goes too far, becomes a clearly bad thing and does impinge on peoples' rights. Fortunately, we have one. Actually two.

One is happening right now. It's the new slaughterhouse regulations recently enacted by the US Department of Agriculture, in response to a spate of high-profile e. coli outbreaks that shook the meat industry over the past few years. This article in The Atlantic addresses the subject better than I ever could, but suffice it to say that our government's new meat processing regulations have become so complex, so onerous and so expensive that only the largest mega-regional slaughterhouses can afford to meet them.

So what happens next? Well, for starters, the small-scale meat processing industry is now likely to die off or get consolidated away.

Which leaves us with a problem. Let's say you're a local, small-scale rancher or beef farmer, and you want to send your ethically grown cattle to a small, local, ethically-managed abattoir. Unfortunately--and in an ironic example of unintended consequences--you can't. You'll soon have to send your cattle hundreds of miles away to the same gigantic industrial slaughterhouse everybody else is stuck using, because your small-scale abattoir became unprofitable under the new regulatory framework.

Here's the thing: As regulations increase, the economics of a given industry inevitably change. Big players can handle the incremental costs of new regulations--but the little guy can't always. If regulations become too costly, the big guys become the only players left. Sadly, our government, while trying to protect us, may have inadvertantly regulated away an entire segment of the meat industry, leaving behind an entrenched and far less competitive oligopoly of a few huge market players.

Bonus question: what do you think happens to meat prices as the slaughterhouse industry consolidates? Will farmers get paid more per head of cattle? Will consumers end up paying less for meat? It only takes vestigial critical thinking skills to figure out the answer to both questions is no.

Another irony. Talk to the ethical meat consumers you know. Ask them if they're in favor of more government regulation of our food supply. After they say yes, explain this scenario of the slaughterhouse industry, and see what happens to their once decisively-held opinions. Careful what you wish for.

And if you think the snowball stops there, think again. Consider any onerously regulated industry with a small number of large players. What's the primary barrier to entry for new competitors in such an industry? The primary barrier to entry is, sadly, the ability to meet onerous regulations. The secondary barrier is the ability to exercise political power by lobbying political leaders to impact future regulations in your favor.

You'd think being successful in the meat processing industry meant being good at processing meat. Not for long.

Okay, admittedly, this is just one example. But it's an exceptionally clear and depressing example of how increasing regulations can destroy competition, hurt suppliers and consumers, and worst of all, force perfectly ethical market participants right out of an industry. The question is, where exactly is that point where regulations become too onerous? How do we know when we've crossed it?

I don't know the answer. But I suspect it tends to happen to already-regulated industries that happen to be deeply out of favor with the public. Think about it: Our politicians can easily generate maximum electoral capital by regulating, punishing, assailing, railing, grandstanding and moralizing against these out-of-favor industries, all the while appearing as if they care about their voters. And in a few years, when the industry consolidates down to a few powerful mega-players, you can quietly start collecting political contributions in exchange for softening future regs. This to me is one of the darkest aspects of nanny state politics.

There's one more point I'd like to make: We consumers often think big, greedy companies are anti-regulation. This is far less true than you'd think.

And since I'm trafficking in so much irony today, let me share possibly the most ironic regulatory event of the last one hundred years: The cigarette industry, which is essentially a duopoly here in the USA, actually wanted the FDA to extend its authority and regulate tobacco products. Why? Because the FDA was likely to pass onerous regs that--if strict enough--would prevent another major cigarette company from ever being created in the USA. Bam! You've earned yourself permanent protection from new competition.

Why am I talking about this? Am I trying to say I hate all government regulations, I love contaminated meat, and I think we should return to an Upton Sinclair-esque era with no rules?

Don't be silly. My point is far more limited: regulations don't always protect people. Sometimes they actually hurt consumers, prevent competition, and annihilate small businesses. And all that does is make life easier for the large, politically-connected businesses that remain--and the politicians who represent them. What I want CK readers to understand is that there's no black and white here: you cannot assume that more government regulation is always a good thing. Again, be careful what you wish for.


For Further Reading (investment and industry analysis geeks only):
Competitive Strategy by Michael Porter
Innovation and Enrepreneurship by Peter Drucker
Wikipedia on Porter's Five Forces
Prophet of Innovation by Thomas K. McCraw (a great biography of economist Joseph Schumpeter)


Related Posts:
The Problem with Government Food Safety Regulation
How to Give Away Your Power By Being a Biased Consumer
Survivor Bias: Why "Big Food" Isn't Quite As Evil As You Think It Is
Let Them Eat Cake! Thoughts About Wealth, Power and the Food Industry
Understanding the Consumer Products Industry


How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!

What's Wrong With the Government Limiting Food Marketing to Kids?

I thought I would weigh in on the recent proposed Federal Trade Commission's rules for limiting food marketing to children.

To me this is a fascinating debate. One one side you've got food writers like Marion Nestle arguing (somewhat predictably) that the new rules don't go far enough. Other bloggers are a bit more circumspect and are willing to consider abstract but important aspects of the debate, like unintended consequences, free speech issues and so on. And, sadly (uh, and also somewhat predictably), over at the Huffington Post we have a totally information-free post in which the author jokes about playing games on the Lucky Charms website.

Okay. As usual with any political issue, you ain't gonna find much nuance out there. Most people have agendas that they're pushing, and those agendas typically come from one of two extremes: YAY! More regulation! Corporations are evil! or BOO! get the government out of my life and get off my lawn!

For my part, sure, I would love to see less advertising in general. And long-time CK readers especially know about my particularly insane hatred of overpriced, hyper-sweetened cereals--a food marketed to children like no other, coincidentally. So, yes, I have a bit of a personal axe to grind in this debate too.

And heck, making the contra-argument on this subject is a little like being against puppies. It is not an easy position to take. (Wait, don't you care about kids? You're in favor of evil corporations taking advantage of our children, you bad, bad person you?)

To be honest, I don't really know where I stand on this issue. So instead of advocating a position, I'm going to ask you, readers, a few open-ended questions, in the hopes that we can collectively foster an open-minded and nuanced debate of our own.

I've said this before and I'll say it again, the readers here at Casual Kitchen are as articulate and thoughtful as anybody can find anywhere (did I mention for the millionth time how grateful I am for this?). With that in mind, what are your thoughts on the following questions?

1) Is it children who actually buy these foods? (PS: This is a bit of a trick question.)

2) Will rules like these actually change peoples' behavior?

3) What are the possible unintended consequences that might result from enforcing guidelines like this? (Keeping in mind that it's notoriously difficult to perceive a law's unintended consequences when those consequences are unlikely for you.)

4) What are the free speech issues involved here?

5) Is it appropriate to hand responsibility for our food choices over to our government? And to what extent is it appropriate that we give away our power to make choices in the face of advertising--or in the face of our children's demands for certain foods?

6) Are we creating rules to make ourselves feel like we've solved a problem?

Readers, here's your chance to sound off--on any or all of these questions. What do you think?

Related Posts:
What's Your Favorite Consumer Empowerment Tip?
Companies vs. Consumers: A Manifesto
A Tale of Two Breakfasts
Food Militancy, and Food Moderation


How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!

Why Our Food Industry Isn't So Bad After All

Longtime Casual Kitchen readers know that I love beating up on rogue subsectors of the food industry. Nothing arouses my indignation more than overpriced spices or branded boxed cereal, or any other area in the food industry where companies limit competition and extract profit out of proportion to the value they provide consumers.

But on the whole, I have to admit that our food industry generally gets it right. The industry adapts to changes in supply and demand very quickly. It supplies a massive amount of fresh and prepared foods to stores all over the continent in a dizzying display of logistics. And, as long as you arm yourself with just the tiniest bit of knowledge about things like cost-stacking and which foods are cheapest in what seasons, you can buy most of the food industry's products at surprisingly low prices.

Yes, there are some Malthusians out there prophesying the end of the food industry as we know it. But, seriously, do you remember the last time there was any kind of a meaningful food shortage in our country?

I do. It was the "rice shortage" of April 2008. Admittedly, some countries--those not fortunate enough to have a food industry as efficient and as responsive to market conditions as our own--clearly suffered.

But in the United States, our rice shortage got fixed in about three weeks. Or in about 1/100th of the time it takes to finish off one of those only-four-per-customer 20 pound bags of rice. That just doesn't happen unless you have an innovative, adaptive and highly effective food industry that gets the right products to consumers quickly and efficiently.

It's funny, I remember a lot of panicked media coverage of the horrors of the rice shortage, but I didn't see a single positive article discussing the fact that our food industry adjusted to it so quickly.

I'm still looking.

Readers, what are your thoughts?

Related Posts:
The Problem with Government Food Safety Regulation
41 Ways You Can Help the Environment From Your Kitchen
What's the Most Heavily Used Tool in Our Kitchen? Our Rice Cooker.
The Limping Dinner: Spicy Brown Rice
How to Make Fried Rice

How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!

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.

Related Posts:
A Recession-Proof Guide to Saving Money on Food
Stacked Costs and Second-Order Foods: A New Way to Think About Rising Food Costs
41 Ways You Can Help the Environment From Your Kitchen
How to Live Forever in Ten Easy Steps
A Rebuttal of "The Last Bite"
How to Handle Raw Chicken So That You'll NEVER Get Food Poisoning




How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by linking to me, subscribing to my RSS feed, or submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon.