A Safe Food Supply: Overview

ERS provides analyses of the economic issues affecting the safety of the U.S. food supply, including the effectiveness of alternative policies and equity of alternative policies and programs designed to protect consumers from unsafe food. Food safety became increasingly important in U.S. policy, research, and health arenas in the 1990s, illustrated by the 1997 President's Food Safety Initiative and the FoodNet system, established in 1995 to better identify the sources of foodborne disease.

Foodborne disease is primarily caused by ingesting pathogens, such as Salmonella, Campylobacter, Listeria monocytogenes, and E. coli O157. The U.S. Centers for Disease Control and Prevention (CDC) of the Department of Health and Human Services, estimates there are 250 foodborne pathogens and that foodborne diseases cause approximately 76 million illnesses, 325,000 hospitalizations, 5,000 deaths, and an unknown number of chronic conditions in the United States each year (see Food-Related Illness and Death in the United States).

Pathogens exist throughout the food chain, meaning options for improving food safety exist from the farm to the table. Both USDA and Food and Drug Administration (FDA) have emphasized improving industry's harvest, slaughter, and processing practices with their Hazard Analysis and Critical Control Points (HACCP) regulations. An alliance of government, industry, and consumer groups developed the "Fight BAC" campaign in 1997 to educate consumers on how their consumption choices and food preparation methods can reduce their risk of foodborne illness. The food industry has developed its own agenda of inventing new technologies, management systems, HACCP programs, and contracts and vertical coordination to control foodborne pathogens.

ERS assesses the issue of food safety from an economic perspective:

• ERS estimates the human illness costs of foodborne disease to help policymakers identify the magnitude of the societal impact of foodborne disease. In 2000, ERS estimated the costs of foodborne disease at $6.9 billion per year for five foodborne pathogens. Unique disease outcome trees are constructed for each foodborne pathogen to estimate the lifetime consequences of an acute foodborne illness, including chronic complications such as kidney failure and paralysis. These estimates, updated and expanded by ERS, help policymakers identify the magnitude of the societal impact of foodborne disease. ERS has funded two long-term studies to estimate consumers' willingness to pay higher prices for safer food. The results of these studies will be used to update ERS estimates of the benefits of safer food.

• ERS benefit/cost analyses of programs for improving food safety provide insight into the least-cost interventions at locations throughout the food chain from farm to table. In late 2004, researchers examined The Economics of Food Safety: The Case of Green Onions and Hepatitis A Outbreaks. In 2000, ERS research found the public health benefits of the meat and poultry HACCP program would outweigh the costs of implementing HACCP, even at the lowest range of estimated benefits. The 2003 report, Managing for Safer Food: The Economics of Sanitation and Process Controls in Meat and Poultry Plants, concludes that the additional costs of sanitation and process controls after HACCP were higher than originally estimated, but that benefits still outweighed costs even for the lowest projected benefits. Another ERS study, Tracing the Costs and Benefits of Improvements in Food Safety, found that long-term benefits of HACCP were distributed somewhat unevenly among the U.S. population, accruing more to wealthy households than to poor and more to households with children than to those without.

• ERS research on Consumer Food Safety Behavior: A Case Study in Hamburger Cooking and Ordering found that consumption of rare and medium rare hamburgers decreased during the 1990s in response to concern for food safety. The study estimated that the changes in behavior—other factors held constant—reduced the risk of infection due to E. coli O157:H7 by 4.6 percent, at a savings of $7.4 million annually in medical costs and lost productivity.

• ERS uses surveys, theory, and case studies to identify and analyze economic incentives for improving food safety. These incentives can take the form of regulatory requirements or even private goals (firms' desire to avoid legal liability/foodborne disease outbreaks, for example, or to differentiate their product as being safer than other products). ERS has conducted a nationally representative survey of meat and poultry firms on the costs of HACCP regulation and adoption of food safety technologies. The data are being analyzed to estimate cost functions and to relate investments in new food safety technology to production of safer food products. The first results from the surveys are presented in Food Safety Innovation in the United States: Evidence from the Meat Industry. ERS also analyzes case studies of innovations (new equipment, new testing, and new management systems) in the beef industry to see which are the most significant factors contributing to the innovation and the magnitude of the economic incentives.