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Meat Industry: Pass Food Safety Costs to Taxpayers

All the lobbyists billing their respective and mostly meat industry clients made the point one more time Monday — they do not want fees replacing what the taxpayers now ante up and the government borrows to pay for food safety.

So they’ve penned a letter to the so-called “Gang of Six,” three Democratic Senators and three Republicans, working behind closed doors to see if they can pull America’s fiscal airplane out of a nosedive before it all crashes into one big pile.

The agribusiness lobbyists are worried the “Gang of Six” might be getting ideas from the Obama Administration, which has put forth a plan for taxes and fees on the food business that the industry says are “the cause of grave concern.”

The Obama Administration plans to submit legislation, which has upset the industry, to create two types of fees, according to a budget summary from USDA’s Food Safety and Inspection Service.

A mandatory fee would cover the estimated cost of services the federal government provides for risk assessments, hazard analyses, inspection planning, compliance review, enforcement, technology support and at risk communication.

There would be a second fee based on performance that would cover additional inspections, including food safety assessments, follow-up sampling, and additional inspections required in the event of an outbreak of disease.

But 25 of the nation’s mostly meat industry organizations wrote the “Gang of Six” Monday in a broad effort to kill the Obama Administration’s ideas about fiscal responsibility.

“Meat, poultry and egg product inspection is a public health and safety program required by federal law and has been funded through tax dollars for over a century,” said the letter addressed to “Gang of Six” Chairman Kent Conrad, D-ND.

 

“Food safety inspection benefits everyone and therefore should be paid for through appropriated funds. Inspection fees will make the current equitable funding mechanism inherently regressive, since low and middle-income families spend a higher portion of their income on food than do wealthier Americans. Furthermore, any proposal to transform government-funded food safety inspection provides less accountability for the government to manage program costs, results and efficiencies.”

Earlier, the co-chairs of the Commission on Fiscal Responsibility and Reform, Democrat Erskine Bowles and Republican Alan Simpson, proposed putting the meat industry on a diet of fees. The full commission, however, dropped the idea from its final report.

Signing the meat industry’s “Gang of Six” letter were: American Association of Meat Processors, American Farm Bureau Federation, American Frozen Food Institute, American Meat Institute, American Sheep Industry Association (ASI), Eastern Meat Packers Association, Illinois Association of Meat Processors, Indiana Meat Packers and Processors Association (IMPPA), Iowa Meat Processors Association, Mid-States Meat Association, Missouri Association of Meat Processors, National Cattlemen’s Beef Association, National Chicken Council, National Frozen Pizza Institute, National Meat Association, National Pork Producers Council, National Turkey Federation, Nebraska Association of Meat Processors, North American Meat Processors Association, Ohio Association of Meat Processors, Shelf-Stable Food Processors Association, Southeastern Food Processors Association, Southeastern Meat Association, Southwest Meat Association, and United Egg Association.

Currently about 41 cents out of every dollar required to provide food safety services is borrowed by the government and added to the nation’s $14 trillion debt.  Taxpayers pay the other 59 cents.

Federal inspection services are now provided without charge to the industry at more than 2,000 processing plants for cattle, calves, hogs, sheep and lambs.

© Food Safety News
  • Doc Raymond

    Federal Inspection services are actually provided for free at nearly 6,000 slaughter and processing plants in the US, including chickens, turkey and other poultry. The Feds already charge the Bison industry for inspection, why not the rest?

  • Consumer Federation of America and every other consumer group I know oppose user fees to pay cost of meat and poultry inspection. The purpose of inspection is to protect the public health. Any market benefit provided to meat and poultry firms is incidental to the public health function. USDA inspectors have always viewed themselves as “cops on the beat” protecting the public from contaminated food and that’s how we view them too. We don’t want inspectors going into filthy meat plants thinking of the owner as their customer or constituent. We don’t want the food inspection version of a rent-a-cop. That is a real risk of an across the board fee attached to inspection.
    However, there are fees we do support, including the reinspection fee in the new FDA food safety law. It will be imposed on plants that consistently fail to operate effective preventive controls and produce safe food.
    CFA enthusiastically supports the proposed “reinspection fee” that has been proposed for meat and poultry inspection. Some companies consistently operate at the lowest possible level of safety. USDA has to send in Food Safety Assessment teams and take other steps to bring these operations up to an acceptable level of safety and sanitation. As it is now these firms are both a threat to public health and pose an unfair competitive burden on the companies that invest time, money and effort into meeting their obligations to produce safe food. Additional oversight imposes extra costs and they should have to pay the extra cost that remedial inspection imposes on the public.
    CFA also supported the “registration fee” for companies regulated by FDA that was included in the House-passed version of the FSMA. Although it qualifies as a user fee, it is not a fee attached to the act of inspection.

  • jmunsell

    FSIS is grossly negligible with how they waste taxpayer dollars while overseeing the meat industry. They have overlapping layers of supervisors, dedicate a full day to accomplish a 1-hour task, have layers upon layers of bureaucrats both at District Offices in DC, who usually cannot provide quick answers to easy questions from the field. A horribly inefficient bureaucracy. And, federal employees are paid higher wages than plant workers, but do much less. The idea of making plants pay for such wasteful use of tax dollars is unconscionable. How many times in the past four decades have I shook my head in disbelief, as I’ve observed two or more agency employees lolly-gagging in the gov office, and as many as four of them at a time “touring” my plant, looking for something to write up.
    And think about the “second fee” as described above, which can be used for Food Safety Assessments (which can be triggered by an excessively high number of NR’s or adverse lab results), follow up sampling, and additional inspections required in the event of an outbreak of disease. This group of second fees would be focused on so-called “problem plants”. Anyone familiar with FSIS misbehavior at my plant would readily perceive that additional agency fees at my plant would have put me into bankruptcy…….while ignoring the source of contamination. Therefore, closing down plants will not improve public health, but it will certainly reduce agency payroll expenses, since there will be fewer plants needing coverage. I can honestly say that if plants had been forced to pay for all FSIS expenses directly related to each plant, that my plant would NOT have been able to pay the fee, and would either have closed its doors, or gone custom exempt.
    Folks, FSIS is an absolute waster of funds, and user fees would remove any incentive for agency employees to be accountable for their inefficient. If you want to remove small plants from the American countryside, have them pay for all of USDA’s irrational expenditures. You will only see a relative handful of huge meat plants left, and with an absence of competition, this oligarchy can easily pass all increased costs onto their customers.
    When the Federal Meat Inspection Act was passed in 1906, mandating federal oversight of the industry for public health purposes, legislators were responsible for providing funding, which they did, via tax revenues. If contemporary legislators now mandate federal inspectors at every restaurant, the legislators must provide funding for this additional level of protection which is deemed essential for consumers. Since such oversight is for the public’s benefit, the public must pay for the benefits provided. And with FSIS, the benefits are much less than current costs.
    John Munsell

  • Carole

    Locally, businesses pay for similar types of licensing (e.g. Seattle King County food service permits), which includes inspections. Why the government/taxpayers at the federal level pay for (some) meat inspections is bewildering; borrowing money to pay for them is ludicrous. Licensing/inspections are a requirement and cost of doing business.

  • jmunsell

    My itty bitty plant had probably ten licenses required of various government entities, local, county, and state, costing hundreds of dollars a year. Believe me, I had plenty of licenses, and paid for them all.
    In the case of FSIS however, I would estimate the cost to my plant would have been a minimum of $60,000 annually, probably substantially more. In addition to the inspector’s wages and the plethora of federal benefits, I’d have been paying a portion of all the travel expenses (and wages) of the numerous supervisors who frequently visited my plant: his immediate supervisor, the Front Line Supervisor, the Humane Handling specialist from the Minneapolis District Office, EIAO’s etc etc. How about the thousands of dollars recently invested in training all the various levels of inspectors and supervisors at the current PHIS training sessions in California?
    Frankly, these expenses would shutter the majority of small plants. I really don’t think that Pres Teddy Roosevelt and the Senators and Representatives who passed the FMIA in 1906 had this in mind.
    John Munsell

  • John Munsell

    FSIS is grossly negligible with how they waste taxpayer dollars while overseeing the meat industry. They have overlapping layers of supervisors, dedicate a full day to accomplish a 1-hour task, have layers upon layers of bureaucrats both at District Offices in DC, who usually cannot provide quick answers to easy questions from the field. A horribly inefficient bureaucracy. And, federal employees are paid higher wages than plant workers, but do much less. The idea of making plants pay for such wasteful use of tax dollars is unconscionable. How many times in the past four decades have I shook my head in disbelief, as I’ve observed two or more agency employees lolly-gagging in the gov office, and as many as four of them at a time “touring” my plant, looking for something to write up.
    And think about the “second fee” as described above, which can be used for Food Safety Assessments (which can be triggered by an excessively high number of NR’s or adverse lab results), follow up sampling, and additional inspections required in the event of an outbreak of disease. This group of second fees would be focused on so-called “problem plants”. Anyone familiar with FSIS misbehavior at my plant would readily perceive that additional agency fees at my plant would have put me into bankruptcy…….while ignoring the source of contamination. Therefore, closing down plants will not improve public health, but it will certainly reduce agency payroll expenses, since there will be fewer plants needing coverage. I can honestly say that if plants had been forced to pay for all FSIS expenses directly related to each plant, that my plant would NOT have been able to pay the fee, and would either have closed its doors, or gone custom exempt.
    Folks, FSIS is an absolute waster of funds, and user fees would remove any incentive for agency employees to be accountable for their inefficient. If you want to remove small plants from the American countryside, have them pay for all of USDA’s irrational expenditures. You will only see a relative handful of huge meat plants left, and with an absence of competition, this oligarchy can easily pass all increased costs onto their customers.
    When the Federal Meat Inspection Act was passed in 1906, mandating federal oversight of the industry for public health purposes, legislators were responsible for providing funding, which they did, via tax revenues. If contemporary legislators now mandate federal inspectors at every restaurant, the legislators must provide funding for this additional level of protection which is deemed essential for consumers. Since such oversight is for the public’s benefit, the public must pay for the benefits provided. And with FSIS, the benefits are much less than current costs.
    John Munsell

  • John Munsell

    My itty bitty plant had probably ten licenses required of various government entities, local, county, and state, costing hundreds of dollars a year. Believe me, I had plenty of licenses, and paid for them all.
    In the case of FSIS however, I would estimate the cost to my plant would have been a minimum of $60,000 annually, probably substantially more. In addition to the inspector’s wages and the plethora of federal benefits, I’d have been paying a portion of all the travel expenses (and wages) of the numerous supervisors who frequently visited my plant: his immediate supervisor, the Front Line Supervisor, the Humane Handling specialist from the Minneapolis District Office, EIAO’s etc etc. How about the thousands of dollars recently invested in training all the various levels of inspectors and supervisors at the current PHIS training sessions in California?
    Frankly, these expenses would shutter the majority of small plants. I really don’t think that Pres Teddy Roosevelt and the Senators and Representatives who passed the FMIA in 1906 had this in mind.
    John Munsell

  • Carole Cancler

    Oh, thanks for the info, John. I am a huge supporter of small, local businesses and buy few, if any products from national producers (meat, eggs, fish, produce, etc). I did not realize, until your explanation, what the impact to smaller, regional producers would be.
    So I stand corrected and support federal funding of FSIS inspections.