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Consumers May Like Onions, But the FDA Doesn't

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Consumers May Like Onions, But the FDA Doesn't

August 7, 2014

A proposed rule by the U.S. Food and Drug Administration would drastically increase costs for American onion farmers and consumers, without any improvement in public safety. Unfortunately, this is not an isolated incident of government overreach—regulation for the sake of regulation is fast becoming the norm in Washington.

The proposed regulation, stemming from the 2011 Food Safety Modernization Act, would limit E. coli levels in irrigation water for any foods that could be consumed raw. This sounds like a justified reason for government action since E. coli outbreaks have the potential to sicken consumers. Just one problem, onions are not subject to E. coli contamination from irrigation. 

According to a thorough field study led by Oregon State University Agricultural Professor Clinton Shock, there is absolutely no risk of E. coli contamination from irrigation water, regardless of method used and bacteria levels in the water. This confirms what farmers and their customers have long known.

Complying with this regulation would have substantial financial consequences for farmers. Their irrigation water would need to be tested weekly and they would have to stop watering if E. coli levels were found to be too high. Onions are finicky and even a small break in irrigation could drastically reduce crop yields. 

Currently, most onion farmers would not be in compliance with the proposal. Yet there are no outbreaks of E. coli from onions. Why does FDA insist on meddling where there is clearly no problem?

Instead of dictating the production process, as FDA is trying to do, smarter regulation would focus on outcomes. The government's supposed motivation is to limit E. coli outbreaks. Why not simply hold companies liable for any harm they inflict? 

This outcome-based oversight is how businesses police themselves, and they see much better results. Kay Riley, manager of Snake River Produce in Nyssa, Oregon told Capital Press that his customers have required him to test his produce for E. coli and salmonella for several years. Is it any surprise that his customers do not want to sell contaminated produce to their customers? Despite the claims of regulation advocates, it is not a smart business model for companies to sicken or kill their customers. Riley said, "We've never had a positive sample. It's great to have Clint's research to verify what we've known for years. Even though irrigation water may not meet the [proposed] standards, we know there is nothing in the onions."

Another even more pointless part of the FDA proposal would require onion farmers to use plastic crates in place of the wooden ones they have been using for years. Thankfully, OSU researchers decided to test the merits of this rule as well. They filled new, bleached plastic crates and two-decade old wooden ones that were not cleaned with onions then tested them for E. coli. No traces of the bacteria were found on the onions from the wooden crates. 

Instead of regulating in search of a problem, FDA needs to stop imposing unnecessary costs on farmers and consumers. Replacing a million wooden crates would cost about $200 million—money that could have been invested, creating more jobs, instead of wasted. These costs to onion farmers would continue to grow since plastic crates can only hold about half the weight of wooden ones and they cost nearly three times as much. Additionally, produce storage buildings would need to be remodeled since the plastic crates are smaller and need more air circulation. 

These costs would be passed on to American consumers.  Higher costs of onion production would mean that Americans would have to pay more for onions, a staple of American cooking.  That would add to everyone’s grocery bills, disproportionately affecting low-income Americans.

FDA is reviewing its proposed rule in light of this scientific evidence, but more needs to be done. Instead of searching for more places to apply its heavy-handed regulation, FDA should focus its efforts on paring back its grip on businesses. This may be just one instance of government overreach, but the problem is systemic. 

America’s regulatory state has expanded non-stop since the 1970s. In 1975, the Code of Federal Regulations had 71,224 pages. By 2013, the number of pages had grown to over 175,000. The sheer amount of government red tape makes it impossible for ordinary Americans to know if they are breaking the law. This opens the door for selective enforcement of obscure laws by federal agencies. If businesses choose not to comply with government requests, they can be targeted, and outdated, pointless regulatory statues can be used against them. 

A new Manhattan Institute report by James Copland and Isaac Gorodetski highlights the additional state-level regulatory burdens that further stymie economic growth. Another study from the Competitive Enterprise Institute shows that it cost Americans $1.863 trillion to comply with federal regulations alone last year—more than the GDPs of Canada and Australia. With per household regulatory costs averaging nearly $15,000 a year, the effects of federal regulation are the second largest expense for American consumers, behind only housing. 

FDA is set to issue a revised regulation by the end of summer. The Agency should admit its regulations would impose substantial costs to little benefit and instead leave onion farmers alone. Regulations crafted inside the Beltway have far-reaching, real effects of the rest of America. 


Jared Meyer is a policy analyst at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter here
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