By Doug Doan
Yesterday’s hearing on the salmonella outbreak that resulted in a huge recall of eggs offers important and disturbing insight into the government’s expanding role in food safety.
To be sure, the hearing followed the predictable script. The company fingered for sanitation problems leading to the recall of 380 million eggs stood before the tribunal and was hectored by members of Congress all wearing the mask of outrage. Henry Waxman played his usual role, announcing the company’s guilt. Then, after reading some reports in the press, he proceeded to insult and badger the company until his time, mercifully, ran out. If you ever thought that these hearings were called in an honest attempt to find out what happened, what went wrong, and what actions could be taken to prevent a similar problem and actually improve the safety of our food supply, think again. That is not how these hearings work.
In fact, the hearing was really a prop for the FDA to push a favorite hobby horse of ever-expanding control, budgets, regulations and authorities. FDA apparatchik, Dr. Josh Sharfstein, made that abundantly clear when he testified in the afternoon and declared that that the FDA needed new “tools in the fight” for food safety. Those “tools” turn out to be broad new powers for the FDA to fine and bring criminal charges against anyone thought to violate FDA rules and guidelines, many of which are ever-changing and evolving, making it hard for business to ever completely understand or fully comply.
No surprise there. Throughout the Administration and in Congress, there is a rising tide of anti-business sentiment that essentially distrusts actions and efforts within the private sector and holds contempt for anyone foolish enough to admit they hope to make their business profitable. Such are the times.
Congressmen Markey summed that sentiment up best by attempting a pole vault to make the impossible leap of comparing the egg safety problems with those of British Petroleum’s oil leak in the gulf. To Markey, an egg producer and BP are just part of one big scheme by business leaders to purposely cheat, lie and defraud Americans. Hence, Congressmen Markey believes that there is always an insufficient amount of oversight and there never can be enough governmental rules, regulations and inspectors controlling our economy.
But is he right?
I think not. If you listened hard to what the owners of the egg company tried to say, you could almost hear a more complicated explanation for the salmonella outbreak. Turns out, testing from the company indicates that the source of the problem may have been contaminated chicken feed introduced into the plant. Little matter–Waxman and the Committee were interrupting so much, and so keen on pummeling the owners, that there was little chance and no interest in actually getting to the bottom of the problem.
Furthermore, the new rules and regulations that were being pushed as a remedy to future problems would have done nothing to prevent this particular salmonella crisis. The egg company had already voluntarily agreed to recall the suspect eggs and the heavy hand of government mandate was not required. The company was trying to come to grips with a difficult problem without being compelled by the threat of fines and criminal arrest.
And so, we come to the most disturbing part of the hearing. Like so many boobleheads, not a single member present thought to ask the FDA Chief Operating Officer just exactly what all the new regulations and oversight would cost. In the anti-business environment that is Washington, it was assumed that more regulations and oversight would come at no cost and are always required.
I can tell you from first-hand experience that the FDA’s anti-business philosophy, which seeks to demonize the nation’s food producers, is forcing many small producers out of business, while other farmers and growers are moving operations out of the United States. Turns out, many small farmers and growers have decided that too much of their time and effort is spent on compliance issues, so they have moved operations out of the United States to countries that are more reasonable and welcoming, taking jobs and investment dollars with them. The orchards and crops that once surrounded my home town in California are long gone and unlikely to return.
The FDA is attempting to achieve an impossible standard of perfect safety. To best understand where Dr. Sharfstein intends to lead the FDA, just take a look at how the nation now reviews and approves new drugs and medications that for the past 50 years have brought almost magical cures and remedies to diseases and aliments that were once thought to be incurable. Under Dr. Sharfstein’s direction, the approval process for new medications has slowed to a crawl with less than 15 new drugs gaining approval in a year. In addition, the quest to eliminate all risks has driven costs for securing FDA approval for a new drug to an average cost of $1 billion.
Not surprisingly, innovative, new medical breakthroughs are no longer assured. The process is too expensive and too time consuming to bring new drugs to market. Remember that the next time a family member or good friend suffers from a terrible illness that just might have been cured by some novel drug that the FDA views as just too risky because side effects affecting one person out of a million might have resulted.
Maybe too we could take a more complete look at guys like Mr. DeCoster, who owned the egg company that Congressman Waxman pilloried yesterday. Turns out that Mr. DeCoster started his company at the age of 12 and has, for the last 63 years, worked every day to build a business that started with only a few chickens. Maybe we should give the guy a little credit for what he has done, while we also try to figure out steps that government and private industry could take to improve safety in the food supply.
The route Dr. Sharfstein wishes us to take will only push more of our food growing business out of the country, as companies seek to avoid future inquisitions. Will eating produce and eggs grown in Mexico, where standards are often far laxer, make you feel better? Because thanks to the little show in Congress yesterday, that is exactly what you are going to get.
Doug Doan is an active Angel Investor and serves on the Board of the Border Trade Alliance.