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Is Our Food System Too Big to Fail?


This column also appears in today's Food section.

About a year ago, Lehman Brothers collapsed, throwing the financial world and the global economy into chaos. What made Lehman's downfall so damaging, and created so much terror around the near-implosions of many other Wall Street behemoths, was the oft-repeated idea that they were all "too big to fail." But in reality, these banks were actually too interconnected to fail. They had all made bets with each other, and guaranteed each other's loans, and generally were so deeply intertwined that the end of one could mean the end of all.

As it is in finance, so it is in food. In late 2008 and early 2009, the Peanut Corp. of America shipped peanuts tainted with the Salmonella typhimurium bacteria. That's not a good thing, of course, but it shouldn't have been too big a deal. Pull some peanuts off the shelves and go on about your day.

If only. The recall involved 3,913 products from 361 companies. Nine people died and about 700 got sick. And that's probably wildly understated: The Centers for Disease Control and Prevention estimate that only one in 38 cases of salmonella is reported.

This is the modern face of tainted food: not a bad egg or a piece of rotted meat, but contamination at a production plant that serves hundreds of companies making thousands of foods. We have a system that does a much better job of making sure most food is safe but is much more vulnerable when something does go wrong. Outbreaks are hard to contain because they're hard to trace. Consumers know not to eat peanuts during a peanut outbreak, but they don't know to avoid foods that contain production compounds laced with peanuts. Grocers are caught flat-footed because they don't know whether a cereal bar includes items from a particular peanut producer. "We have had a lot of consolidation in the food industry," said Erik Olson, director of chemical and food safety programs for Pew's Health & Human Services Policy project. "A few decades ago, there were very few situations where a single factory could influence the national or international food supply."

That's not all that didn't happen a few decades ago. Remember the Great Spinach Recall of Ought-Six? Or the cookie dough recall this year? Ask yourself: How did E. coli bacteria get on spinach and cookie dough? E. coli is present in animal feces. Outbreaks are generally traceable to beef. But spinach and cookie dough? That was a first.

"Our food safety regulation system was written when the food supply was completely different," Olson said. "The original laws were signed by Teddy Roosevelt. The last major overhaul was in 1938. We still don't have mandatory recall authority; the FDA needs to ask for voluntary recalls. We don't have basic things like companies testing their food for contamination, or standards ensuring imported food meets same quality standards as domestic food. Inspections are once every 10 years. Our system is not keeping up with changes in the food supply. It needs to modernize."

Efforts are underway to do exactly that: The House has passed, and the Senate is considering, an overhaul of the nation's food safety laws. The approach mirrors the ongoing efforts to regulate "too-big-to-fail" corporations in the financial arena. The intent is not to turn back the clock to the days of small producers and corner stores but to be more aware of the unique dangers posed by size and be more vigilant against them. The bills make inspections more frequent, with the House bill demanding them at least yearly, and more often for facilities that pose a high risk to the system. The bills subject imported food to quality controls and give the FDA the mandatory recall authority it has lacked for so long. They try to make the food distribution system more traceable and the FDA more capable. They try, in other words, to bring the regulations up to date.

It's about time. An appropriate regulatory state was important in previous decades. But it is, if anything, more critical now. The food production system is too big, and too interconnected, to fail. A serious lapse will not sicken a single diner or the patrons of a couple of stores, but much of the country. It will require enormous amounts of effort to track, trace and recall countless tons of food because a microscopic binding agent carries an awful passenger. The economic disruption will be significant, and so, too, will the resulting fear. And it doesn't have to happen.

Photo credit: By Bill O’Leary -- The Washington Post

By Ezra Klein  |  September 30, 2009; 5:20 PM ET
Categories:  Food  
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Cool. Now the feds will do for the food supply system what they've done for health care, and we can have a real crisis on our hands.

Posted by: msoja | September 30, 2009 8:36 PM | Report abuse

The funny part is that even a liberal wouldn't eat government food.

Maybe we should reform this first for educational purposes.

Posted by: whoisjohngaltcom | September 30, 2009 11:38 PM | Report abuse

so, how did e coli get into the cookie dough and spinach?

Posted by: PindarPushkin | October 1, 2009 11:53 AM | Report abuse

For spinach, wasn't it reported to have something to do with failure to provide bathroom facilities for pickers?

Another thing to do is to work on a regulatory regime that discourages consolidation and difficult-to-trace interconnections in industrial food protection. (If you think how well the increased regulation of the too-interconnected-to-fail banks is going, that's just a glimmer of how it will be for the food business.) Also one that encourages smaller local producers, who are often impeded by regulations intended to prevent megaprocessors employing untrained workers from poisoning millions.

Posted by: paul314 | October 1, 2009 1:01 PM | Report abuse

--"so, how did e coli get into the cookie dough and spinach?"--

If you don't know, and at this point (to my knowledge) nobody knows, how will giving more money and power to the people who didn't prevent it before enable them to prevent it in the future?

The fact is, food processors have every incentive not to poison their customers. The FDA is *already* irrelevant in such regards, especially when one considers the breadth and depth of the current food market.

Posted by: msoja | October 1, 2009 2:37 PM | Report abuse

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