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Food Industry Continues to Oppose Fees to Fund FDA

There seems to be no disagreement that the U.S. Food and Drug Administration will require more funding to fully implement the Food Safety Modernization Act, but the Obama administration plan to collect $220 million in fees for food safety oversight has industry groups warning that those fees would be passed on to consumers via increased food prices.

Almost all of the administration’s budget increase for food safety in Fiscal Year 2013 would be registration fees, even though Congress has struck down fees as a major source of food safety funding at FDA before. Without fees, FDA’s resources for food safety would increase by approximately $33 million next year. The Congressional Budget Office estimated that FDA would need $1.5 billion over five years to implement FSMA.

“We urge you to continue to adequately fund the food safety activities of the U.S. Food and Drug Administration (FDA) rather than support the imposition of any new food regulatory taxes on consumers and food makers,” said food industry groups in a letter to key appropriations lawmakers in the House last week.

The letter, signed by more than 30 trade groups, was sent to appropriations committee chair Hal Rogers (R-KY), ranking member Norm Dicks (D-WA), and agriculture appropriations subcommittee Jack Kingston (R-GA) and ranking member Sam Farr (D-CA). The American Meat Institute, the Snack Food Association, the Juice Products Association, and the American Frozen Food Institute were among the groups that cosigned the letter.

The industry groups point out that an early version of FSMA did contain registration fees to help pay for food safety at FDA but that proposal was rejected by Congress. The bill that was signed into law in January 2011 allows for limited reinspection fees, but not registration fees.   

Part of the trepidation from industry comes from the fact that it is not clear what the fee program would look like, or which type of facility would be required to pay.

“We know FDA’s proposal will drive up costs for food makers and consumers,” said Corey Henry, a spokesman for the American Frozen Food Institute. “What we can’t quantify is the severity of those cost increases, because the specifics of FDA’s proposal are not fully known. It’s unclear how much in additional costs an individual food maker would be forced to bear.”

“Funding FSMA implementation requires more resources, and we believe Congress must make food safety a priority and provide appropriate additional resources,” Henry added.

When the budget plan was announced earlier this month, Patrick McGarey, Assistant Commissioner for Budget at FDA, said that many details still need to be worked out.

“We’re open to working with industry to shape a proposal that meets their objectives and our objectives and meets the public health needs of food safety,” added McGarey. “We’ve not defined the registration fee yet as to which facility and at what amount the fee would be assessed.”

© Food Safety News
  • Everyone wants something for nothing. I say, pay for it now, or pay me a hell of a lot more later after you poison a bunch of your customers.

  • M. “Mike” Mychajlonka, Ph. D.

    Bill, who would not agree that prevention now is preferable to a problem down the road? However, is it possible that the regulatory structure is at the root of the problem here? For the sake of argument, let us assume that all food manufacturers who fall under the purview of FDA are law-abiding citizens. FSMA is, of course, a law as anyone can see – it was passed by Congress and signed by the President. Laws must be obeyed. However, FSMA also grants rule-making authority to FDA. So far as I can see, neither the executive nor the legislative branches of our government intend to render an opinion on these rules once they are formalized. Is there reason,therefore, to assume that rules duly made by FDA, under FSMA, have the same force of law as FSMA itself? If the answer to that question is yes, then one must accept FDA to be a law-making body. If the answer to that question is no, then FDA seems not only to have been granted the ability to make up its own rules but to also generate its own taxes. Maybe doesn’t seem to work in this situation. Is it possible that food manufacturers find neither of the two scenarios seems particularly comfortable and so are reticent to fund their own discomfort?

  • Michael Bulger

    Mike Mychajlonka,
    You wrote, “So far as I can see, neither the executive nor the legislative branches of our government intend to render an opinion on these rules once they are formalized.”
    The FDA is itself a part of the executive branch.
    The executive branch is commonly authorized by the legislative branch to write rules. These rules then carry the weight of the law.

  • Well as for me, I agree with Bill. It’s much expensive to go to the hospital and find meds. I still think prevention is much better than the cure itself. If they had to find a way to fund the FSMA I suggest to go ahead. It’ll save more lives and prevent more outbreaks.

  • M. “Mike” Mychajlonka, Ph. D.

    Michael, thanks for the civics lesson. I had written my original comment in general terms. In light of your comment, perhaps I should rephrase.
    There are regulations involved in the making of regulations. So far as I am aware, the most current of these is Executive Order 12866, issued by President Clinton in 1993. This executive order specifies the steps to be taken in the construction of a regulation by a federal agency. It also states: “. . . OMB shall provide guidance to agencies and assist the President, the Vice President, and other regulatory policy advisors to the President in regulatory planning and shall be the entity that reviews individual regulations, as provided by this Executive order.” The Office of Information and Regulatory Affairs (OIRA) within OMB was identified as the contact point within OMB for this purpose. Completion of these steps results in a final rule. This executive order provides extensive review during the rulemaking process but does not provide for any subsequent executive review of the final rule that I can specifically see. The process does not entail any legislative review except through the Assistant to the President for Intergovernmental Affairs. Although it would appear that a final rule may be modified, it is not clear from this document where the initiative for such modification may come from or whether or not a modified regulation must follow the same rules as a new regulation.
    Section 10 of this executive order states: “Nothing in this Executive order shall affect any otherwise available judicial review of agency action.” I take this to mean that the rulemaking process itself (as described in this executive order) is subject to judicial review. My understanding is that any judicial review of laws passed by Congress is directed to the law itself, not the process by which such laws were made.
    So, Civics 101 tells us that the final rules made by federal agencies have the “Force of Law” but what it doesn’t tell us is that this “Force” must be transmitted (from the original enabling legislation) through almost six thousand words of a rulemaking process that seems (to me at least) to have an awful lot of soft spots. This implies to me that an FDA rule may be attacked according to what a court may decide were “irregularities” in process of how the rule was made. What kind of law is that?
    This brings us back to the issue of asking food manufacturers to pay for FDA’s regulatory activities. Consider the first sentence of the introduction to executive order 12866: “The American people deserve a regulatory system that works for them, not against them: a regulatory system that protects and improves their health, safety, environment, and well-being and improves the performance of the economy without imposing unacceptable or unreasonable costs on society; regulatory policies that recognize that the private sector and private markets are the best engine for economic growth; regulatory approaches that respect the role of State, local, and tribal governments; and regulations that are effective, consistent, sensible, and understandable.”
    I believe that the FDA should be fully funded so that it remains independent and free to act on behalf of the consumer.

  • Jess C. Rajan, Ph.D.

    Generally, Congress provides specific authority to assess user fees in the Federal agency’s authorization or appropriations legislation. Agencies that lack specific statutory authority to charge user fees may use the broad authority under the Independent Offices Appropriation Act of 1952 [31 U.S.C. § 9701] to assess user fees or charges on the beneficiaries. The Federal agency may prescribe regulations establishing the charge for a service or thing of value provided by the agency.