Over the weekend, Tim Carney and Rod Dreher both had very nice columns on the controversy over the push for the implementation of a National Animal Identification System and other food safety measures being pushed in Congress that would likely pose serious burdens for smaller farmers and other producers who are unable to take advantage of the benefits of economies of scale. This is, I guess, the kind of thing that’s supposed to be right up my alley, so I suppose I ought to have something to say about it.
First, here’s Rod:
The Food Safety Modernization Act of 2009 attempts to streamline the unwieldy federal food regulation system, as does the similar Food and Drug Administration Globalization Act of 2009. Both, however, are written as a “one size fits all” bill that would ramp up fees and regulation on all producers of food (and, in the case of the latter, drugs and cosmetics). The little guy who sells homegrown tomatoes or homemade soap at the farmers market would be subject to the same regulation as industrial giants, without the resources to implement it.
As those familiar with my earlier writing on food safety and related subjects will be unsurprised to hear, I think this is exactly right. I’ll turn in a minute to my diagnosis of a similar sort of problem in the battle over raw milk in California, but for now here’s what Mark Thompson wrote about the regulatory dynamic in his terrific Culture11 piece on the CPSIA controversy:
The effects of these new restrictions on small and medium-sized businesses are difficult to underestimate. […] And Woldenberg, whose company is more properly classified as “medium-sized,” says that he conservatively estimates a minimum increase of 30% in the overhead for his company to manufacture an average product. In one instance, a testing company estimated that it would cost $24,000 in testing fees for one of Learning Resource’s children’s telescopes to comply with the law — even though the product contains no parts that could conceivably be considered hazardous. Because this product only generates $32,000 in gross sales per year, it will need to be discontinued. Similar problems will exist for just about every niche children’s product, for which large production runs are impractical, such as educational materials for special needs children.
Meanwhile, however, massive multi-national corporations will be relatively well-suited to adjust to the new law. Their huge economies of scale mean they can afford to staff a few lawyers to oversee compliance with the law, and it is only a minimal change to their business models for them to mass produce and import their products in a way that minimizes testing fees. In sum, the net effects of this law are that the largest businesses will be relatively able to cope with the changes, while small and medium-sized businesses (and really, any domestic business) will be disproportionately affected.
It should go without saying that the fact that in food safety and toy safety alike it is the larger companies rather than the smaller ones that tend to be responsible for the worst crises makes this a self-defeating response indeed: the companies with the greatest intrinsic incentive to do the right thing anyway get run out of business, while those that remain are only barely compliant with the new regulations and have that much less to fear from the efforts of the competition. Hence Rod:
Ironically, the food safety problems that cause such legitimate public concern are caused by large-scale, technology-driven industrial food production and distribution methods – precisely the sort of thing that local, sustainable farmers don’t engage in. Yet they are the ones who will suffer the most from these government attempts to solve a problem caused by bigness and technology by imposing more bigness and technology.
The problem, though, is that the food safety scares of the past few years have given us every reason to think that those industrial producers simply aren’t growing and distributing food that is sufficiently clean and safe: something needs to be done, goes the standard response, and the only option available to us is this one. If saving a few small farms means allowing our food system to be overrun by bacteria-infested and otherwise potentially harmful meat and tomatoes, then that’s a choice that not many of us are willing to make.
Rod tries, though, to argue that there’s room for a third way:
We do need better food safety regulation of major producers, but local family farms and artisans shouldn’t pay for sins they didn’t commit. Consumers need to have the small-farm alternative – and if they are going to preserve it, they have to contact federal and state legislators now.
What Rod wants, then, is a system that puts stringent regulations in place on the larger producers while granting exemptions for smaller farmers who can’t reasonably be expected to meet them. But granting that this sort of route is clearly possible in principle, is it politically feasible? In my Doublethink piece on raw milk, the dynamic I detected in the battle over regulation in California was essentially the same one that Mark found in his work on the CPSIA controversy: in stark contrast to the naive image of anti-regulatory businessmen squared off against the would-be food nannies in government, the actual relationship between business and government was much more, well, symbiotic than that; it was the corporations that were pushing for the new regulations, and it was hard not to think that they were doing so at least partly because they were cognizant of the effects that such regulation would have on the competition. “Regulation”, as Tim Carney put it to me in a quotation from that article, “always helps the big guys by creating barriers to entry, but there’s a more important dynamic here: When you give the government power, you give the lobbyists power. It also works the other way: When only a handful of businesses dominate an industry, bureaucrats and politicians find it easier to control that industry.”
Which brings me to Tim’s very important column:
The lineup of backers and opponents of these [new food safety] bills has surprised some observers, but it shouldn’t. Big food processors—including the makers of some recently recalled foods—support the legislation, while leading advocates of local produce, organic food, and farmers markets are vocally resisting the measures.
Science and environment writer Steve Nash in The New Republic Monday praised Durbin’s bill as a “good idea,” and expressed surprise that Agriculture Secretary Tom Vilsack, “who many decried as corporate, conventional, and something of a shill for Big-Ag” would come out for greater federal regulation, too.
But also supporting the Durbin bill, the DeLauro bill, or both, are Kraft Foods, General Mills, Kellogs, Pepsico (maker of Frito-Lay brand snacks), the Grocery Manufacturers Association, and the National Restaurant Association.
[…] Galen Reser, vice president for government affairs at Pepsico, which processes snack food under its Frito-Lay brand, told this columnist “I think the industry is pretty comfortable with” the regulatory burden of Durbin’s bill, maintaining there are no significant “unnecessary costs.”
Big business is not only more able to bear the costs of regulation, but also better positioned to craft the regulation in beneficial ways. Kraft Foods, for instance, spent $3.68 million last year on its lobbying effort, which includes William Lesher, a former assistant secretary at the Department of Agriculture.
When the fine print is ironed and when the agencies implement the regulations, Kraft and Big Agriculture will have a say, but your local organic farmer won’t. As Stockton puts it, “There is no distinction now between industrial agriculture and federal regulatory agencies.”
And ‘round and ‘round it goes.
So look: either you support a new regulatory regime that is equally strict across the board and so will lay undue burdens on smaller producers, or you push for exemptions and likely lose the support of the big corporations that currently think the proposed regulations are just dandy. You’re damned either way, and to be perfectly honest I don’t know where I come down. I’d love it, of course, if someone could make the case that the food safety scares of recent years haven’t been so serious after all; short of that, however, it’s hard even for a near-libertarian like me not think that the implementation of even an unfairly strict set of regulations would be better than the reachable alternatives. Sadly, the possible world where we get a menu of choices less horrid than these ones is quite a long way away, and involves a political system with a very different character than ours.
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