.comment-link {margin-left:.6em;}

Monday, April 23, 2007

FDA new the food was contaminated.

The April 23, 2007 edition of the Washington Post has an article by Elizabeth Williamson regarding the recent food contaminations found in peanut butter, spinach and dog food.

According to the article the FDA new for years about contamination problems at the PB and Spinach plants, but due to the huge growth in the industry, “relied on producers to police themselves.” Sounds like the FDA want the producers to be the Baptists. No surprise that the bootleggers are also the producers. Gee, I wonder where the problems lie!

Further, following a complaint from the CDC regarding an earlier salmonella spike, a spokesman for the FDA said that the “FDA … cannot force a disclosure, a recall or a plant closure except in extreme circumstances, such as finding a hazardous batch of product.” Of course following a death the processing plant can be closed.

It would seem to me that we could classify this as a market failure and the need for government might be warranted. “But Wait” I hear you cry. “The FDA is a government agency.” That is correct, however, since the FDA seems to have little control on preventing serious accidents from occurring we can draw one of two conclusions:

1) A market failure exists even with government intervention
2) Government action is not large enough to correct the market failure.

It would seem Congress agrees with the second conclusion since they have recently “voted the FDA a $10 million increase to improve food safety.”

Perhaps Congress thinks the FDA was wrong in its presumption that the producers could be both the bootlegger and the Baptist.

Comments:
It seems to me the efficiency issues here are not easily sorted out at this point because government has intervened with regulations. As such, let's assume government has regulations to deal with "food safety." Resulting "failures" would not seem to be market failures, but rather, government failures.

Once government writes regulatons down, the idea of responsibility for safety failures seems to me to shift significantly. Consumers now assume a 3rd party, government, is protecting them. But, if government doesn't police and enforce its regulations, even assuming the regulations are written effectively to insure food safety, it would seem fair to conclude safety failures are the responsibility of government. But, of course, government can't be sued by consumers unless government agrees to be sued.

In other words, it seems to me now that government has safety regulations, neither consumers nor producers, nor government agents have quite the proper incentives to insure safe food. Government agents simply do not risk their own resources, in general, for failures to enforce and insure food safety.

If government was not involved, there is not much I think we can learn from the situation today about whether there would be market failure with respect to food safety. Such market failures have been alleged with respect to these issues, but any situations without government regulation are long past history.
 
b4guj4 Hello all!
 
Thanks to author.
 
Wonderful blog.
 
Hello all!
 
Good job!
 
Nice Article.
 
Wonderful blog.
 
Good job!
 
Magnific!
 
Wonderful blog.
 
2sGLaB write more, thanks.
 
Thanks to author.
 
Good job!
 
Good job!
 
Hello all!
 
actually, that's brilliant. Thank you. I'm going to pass that on to a couple of people.
 
Good job!
 
Wonderful blog.
 
Nice Article.
 
Thanks to author.
 
This comment has been removed by a blog administrator.
 
actually, that's brilliant. Thank you. I'm going to pass that on to a couple of people.
 
This comment has been removed by a blog administrator.
 
Post a Comment

Links to this post:

Create a Link



<< Home

This page is powered by Blogger. Isn't yours?