Obama's "Freshest" Industry Takeover

Let’s quickly review U.S. industries now subject to increased federal regulation.  Well, there’s healthcare, the banks, energy (EPA regulating CO2 emissions), the Internet (FCC’s net neutrality proposal), education (student loans), autos, and forgive me, I almost forgot the mortgage industry.

The end of the 111th Congress has introduced another major sector takeover whose influence reaches our life (at least several times a day), and that is the food industry, all done under the guise of “food safety.” If carried out completely, our food sector will face increased regulation and the unfortunate reality is our food will be less safe.

How clever of our politicians to go after the food sector.  There is no question that we take our food for granted. We buy it cheaply, abundantly, and unless we work in one of the many sectors of the food industry, we don’t really understand how it gets to the restaurant, drive-through window, or local grocery store. And there isn’t really much of an incentive for us to learn how it gets to us, until someone gets sick. When that happens, we all pay attention and we all demand accountability.

Fully aware of the non-partisan nature of this “safe” issue, one of President Obama’s first weekly radio addresses confronted this populist need to make our food more safe.  He established a working group of cabinet officials who would create a food safety strategy to improve the safety of our food.

Meanwhile, emboldened Democrats were introducing a number of bills that would “modernize” the food safety system.  After all, the original food and drug act hadn’t been significantly changed for 100 years, they claimed, as if modernized laws would make our food safer. Oh, and a lot of people were getting sick, they also claimed, although many more people die of seasonal flu each year than they do from food sickness:

So the House quickly passed a bill in July 2009 that most of the agricultural sector “supported,” in the same way many healthcare, banking, Internet, auto, student loan, and mortgage companies supported regulation (with a gun to the head).  Likewise, politicians on the squeamish close-to-center right didn’t dare to vote against food safety, so the bill passed with a super-majority vote.

Senator Dick Durbin’s (D-IL) food safety bill quickly arose as the principal legislation that would move in his chamber.  The bill was held up for varying reasons over the next year.  But even Matt Drudge was suckered into the populist food safety movement when he posted a link that Reid was holding up the food safety bill, as if that was a bad thing (you didn’t say that, I’m reading your mind here, Drudge).

Fortunately, in the last bitter months of the bill’s struggle to get to the floor for a vote, Senator Tom Coburn blocked the legislation until it passed under unanimous consent on Sunday, December 19.  You’re still my hero, Dr. Coburn, but could you not have held out for another two weeks?  BTW – Coburn was rewarded a few days later in passage of the 9/11 First Responders Bill.

So what does this mean for the agricultural sector and more importantly, for the cost and quality of your food?

For starters, the primary foods targeted are those deemed “high risk” by the FDA.  The FDA could add to that list, however, at any time.  Now imagine you grow, pack, transport, process, or sell a “high risk” crop and you will now be heavily regulated.  Do you think you will not seriously consider moving to a non-regulated commodity?  You bet.  And from where will we then get our “high risk” commodities?   Well, probably not from America.  Hmmm.  This isn’t sounding so good.

Okay, so I farm “high risk” tomatoes and now I decide to move to a non-regulated crop.  Will that not alter the fragile domestic market’s supply and demand chain?  One can only guess how the already sensitive agricultural economy will adapt to a surge in supply of non-regulated crops.

Let’s say I believe I can continue to grow a high risk crop and I face compliance with the imposed regulations.  The FDA now has the authority to enter my property at any time, and should I be negligent on any one of the many uber-nanny state regs (like my employee fails to wear gloves), I could face hefty fines or even civil penalties.

All of these regulations cost something, and that cost will be passed on to the consumer, either monetarily or from unknown quality imported foods.

What the government has failed to realize is that the industry wins or loses based on the safety of their product – it is their bottom line.  There are bad actors from time to time, as we have seen in past years, and the industry’s response time has only improved through private efforts, not government efforts.

We can only hope that Obama keeps his hands off of other industries in his remaining two years, although I’m scratching my head trying to think of a which industries are left.