DeLauro - Break up the FDA

Today's food safety hearing opens with a bang. Here is the press release from the office of Rep. Rosa DeLauro detailing her opening statement. Read on...

Washington, D.C. – Congresswoman Rosa L. DeLauro (CT-3), chairwoman of the House Agriculture, Rural Development, Food and Drug Administration Appropriations Subcommittee, delivered the following opening statement during a subcommittee oversight hearing on food safety that examined the problems highlighted during the recent salmonella outbreak and analyzed the critical components that are necessary for an effective food safety system.

During the hearing, DeLauro called for the FDA to be split into two separate agencies – dividing the food safety responsibilities from the drug and device safety responsibilities – and announced that she plans to introduce legislation next week, the Food Safety Modernization Act, that would accomplish this goal. While the long-term solution should be the creation of an independent, single food safety agency, this interim step would establish the Food Safety Administration within the Department of Health and Human Services that would have responsibility for all food safety issues currently administered by FDA. The legislation also will address other critical components of an effective food safety system including traceability, process controls, inspections, and ensuring the safety of imported foods.

Below is the text of DeLauro’s opening statement (as prepared for delivery).

We are here today to examine the salmonella outbreak this year that sickened over 1,400 people across 43 states and the District of Columbia – providing yet further evidence that our current food safety system is broken. It fails to protect consumers from unsafe foods and has the capacity to harm producers and growers in the process.

Our goal this afternoon is not simply to rehash this summer’s Salmonella outbreak. We are looking for bigger answers – searching for the solutions that will allow us to avoid these breakdowns in the future.

Certainly, in recent months food safety has taken center stage like never before. I am encouraged to see many issues that have been on the back burner for years – such as traceability – finally make their way into the mainstream discussion.

Now, it is time to put those words into action. 76 million foodborne illnesses, 325,000 hospitalizations and 5,000 deaths occur each year because of unsafe foods. And their cost to our nation is great – $7 billion in economic losses annually.

A major outbreak’s impact lasts long after it has faded from the headlines. As Mr. Farr can attest, the spinach market still has not fully recovered from an E. coli outbreak two years ago. According to the California Department of Agriculture, spinach production in California is still approximately $60 million less than pre-outbreak levels.

And as Mr. Murray will discuss – and our colleagues from Florida and Georgia have seen this first-hand – the tomato industry now faces a similar struggle. FDA first implicated tomatoes as the potential source of this summer’s salmonella outbreak, before turning its attention to jalapeno and Serrano peppers. Now the FDA may be looking into the possibility that tomatoes caused the earlier infections and peppers were the source behind later cases of the outbreak.

What is most distressing, however, is that no one seemed to be in charge – no one is in charge. During a complex and constantly evolving food safety crisis, the public and the industry both looked to their government for guidance and assurance that the situation was under control. But with little leadership, the situation quickly got out of control and continued to threaten public health and consumer confidence for weeks.

With 15 different agencies responsible for administering 30 laws related to food safety, it is no wonder investigations are mismanaged, shortsighted, and stalled. To address these failings and prevent dangerous products from slipping through the cracks, I believe we need to create a single food agency.

As an incremental step toward that goal, next week I plan to introduce the Food Safety Modernization Act, creating a Food Safety Administration within the Department of Health and Human Services with responsibility for all food safety issues currently administered by FDA. While, maintaining the USDA’s independent, food safety responsibilities, the new law would establish a Commissioner of Food Safety and Nutrition Policy – a presidential appointment requiring advice and consent of the Senate – to lead the new Food Safety Administration.

It is time to create a streamlined federal agency focused exclusively on protecting our food supply. Instead of having to balance food safety with competing priorities, it would allow food safety experts and researchers to do their jobs.

To be sure, our ultimate goal must remain an independent, single food agency, but I believe that in order to begin fixing our broken system, we must act now and this is the best way forward. The Food Safety Modernization Act will address traceability, process controls, inspections, and imports. We have further to go, to be sure, but with this first step, we will have come a great distance – allowing food safety experts and researchers to do their jobs, provide increased oversight and fulfill their regulatory responsibility.

A recent GAO report outlined the critical components that are necessary for an effective food safety system, including traceback procedures, cooperative arrangements between public health officials, and mandatory recall authority. I believe that these measures could be implemented most effectively under a system governed by a singe food safety agency. While there has been movement on food safety reform, we are not there yet.

Finally, it is worth noting that the GAO report highlighted other nations’ effective “farm-to-fork” approach to food safety. If we want to see similar success and restore our own country’s gold standard for food safety we must also focus on the entire food supply chain, place primary responsibility for food safety on producers, and ensure that food imports meet equivalent safety standards.

We know what is at stake – today we will hear about the consequences of our inaction – and the opportunity to embrace tangible reforms. It is time to show we have learned these hard lessons and make public health our top priority. We cannot afford to wait any longer.

Thank you.

PACA fee increase - do you think it is right for the grower to be paying all these fees?

There is some pushback on the planned PACA license fee increase. I got this email from a reader of The Packer based on a story I did last week and I am publishing it anonymously(his request).


"Read your article this morning in regards to the increase in fees that will be forthcoming.

Granted inflation and demand will increase costs and bottom lines but do you think it is right for the grower to be paying for all these fees.

Why can’t wholesalers and chain stores also contribute to the price increases? Maybe with that formatted cost actually it might decrease for the businesses that actually make this go. The Farmer and Grower.

Bottom line is I think the wholesalers and distributors are riding the coattail of the growers these days and I think it's about time they pay the fiddler."

Poll closed - Immigration tops concerns

What is the number one public policy issue for the produce industry at the national level?

What is the number one public policy issue for the produce industry at the national level?

Immigration	10 (47%)
Child nutrition reauthorization	1 (4%)
Food safety legislation	5 (23%)
COOL implementation	4 (19%)
Fruit and vegetable snack program implementation	1 (4%)

Votes so far: 21
Poll closed

TK: Somewhat surprisingly, immigration is rated as the number one public policy issue for the fresh produce industry; I would have pegged food safety legislation as #1. Clearly, action on immigration reform will have to wait on a new Administration and a mustering of political will that has been lacking for more years than anyone cares to count.

"We are all subprime"

U.S. economic troubles will have a ripple effect around the world, and this column from Down Under sums up the big picture. From the column by Scott Pape in the Herald Sun:

Former Federal Reserve chairman Alan Greenspan reckons it's a "once-in-a-century financial crisis".

Nice work, Al.

You'll scare the grey nomads out of their Pajeros.

Rather than statements that cause us to choke on our cornflakes, let's look at what this all means.

Specifically, is the world going to end just because some bonus-hungry brokers borrowed a little too much?

Just how will this affect the rest of us?

To understand where things are heading, we need to understand how we got here in the first place.

Most people understand that the US has just experienced the biggest housing bubble of all time.

Towards the end of the boom, even poor people were encouraged to buy houses they couldn't afford, using NINJA loans ("No Income No Job No Assets").

These loans have now come back to karate kick the banks that were silly enough to get involved.

Bear Stearns was the first billion-dollar casualty.

Then Freddie Mac and Fannie Mae, who collectively control $5 trillion in mortgages, had to be bailed out by the long-suffering US taxpayer.

Then over the weekend Lehman Brothers and Merrill Lynch became the next high-profile scalps, which caused carnage on Wall Street when it opened on Monday, and ripples around world markets. Experts suggest that the debt hangover could be upwards of a trillion dollars.

You know what they say, a couple of hundred billion here, a trillion there, and pretty soon you're talking about real money.

Maybe even your money.

So, instead of trying to focus on figures that read like an international telephone number, let's look at what this means for you and your plans.

Specifically, the No. 1 question how long will it last?

No one knows.

The only thing we can be sure of is that from a US perspective things are only getting worse.

House prices are declining for the first time since the (not so) Great Depression.

One in every 416 US households was in some form of foreclosure in August (an increase of 27 per cent from last year), according to RealtyTrac.

The Standard & Poor's Case-Shiller home price index shows that housing prices declined by 15.4 per cent in the quarter ending in June, the largest annual rate of decline the index has ever measured.

And they're still falling.

So how does the fact that a bloke in Minnesota can't make his mortgage repayments affect you?

Well, faced with falling asset prices and increasing food and fuel costs, Minnesota Mike (and 300 million of his patriotic pals) starts slowing down his spending.

This sets off an economic domino effect that reaches all the way to our sunny shores. US consumers spend less and therefore demand fewer Chinese-manufactured goods, which causes the Chinese to (temporarily) slow their demand for our resources.

In the coming weeks you'll get your superannuation returns in the mail.

You'll see lots of red ink, perhaps for the first time in years (which is why your fund will probably quote its much more attractive 20-year returns).

Most Australians have their super invested in a balanced investment option, which generally has, well, a balanced mixture of assets: shares, fixed interest, property and cash.

While this asset mix will provide some protection to weather the current economic storm, we may well be in for more negative returns in the next financial year.

Just remember, though, that superannuation is a long-term investment.

Things may look bad now, but I reckon that 20 years from now you'll be glad you stayed the course, especially if you own shares in the banks.

Yet the economic canary in the coal mine is our large level of household debt as a percentage of income.

In 1988 it stood at 30 per cent - now it averages 160 per cent.

This leaves us wide open to economic shocks.

This crisis didn't start with Lehman Brothers, and it certainly won't end with it.

We've just witnessed the biggest debt-funded consumption bubble ever, and the US economy will be dealing with the resulting indigestion for the foreseeable future.

With economists predicting that Japan, Europe and the US will all soon be in recession, one thing's for certain, like it or not, we're all sub-prime now

Wal-Mart v. Fresh and Easy and other W-M news

Wal-Mart continues to attract coverage for its Marketside concept, and commentary why the stakes are high both in its attempt and the Fresh & Easy U.S. roll out. Here is a sampling:

Wal-Mart may try smaller store in county From Sign on San Diego:

Food industry analysts say Wal-Mart's Marketside concept is a response to rival Tesco's entry into the United States with its Fresh & Easy grocery stores. Last month, the British retailer opened its seventh store in San Diego County and announced plans for five more.

Bill Bishop, chairman of the firm Willard Bishop, which advises supermarkets, said Wal-Mart can't afford not to take Tesco on.

“In many people's minds, Tesco is the best retailer in the world, not the biggest but the best,” Bishop said. “They are in 14 different countries and have demonstrated that they play with a very hot hand – Wal-Mart would be asleep at the switch not to challenge them.”

Tesco's Fresh & Easy plans three more inland stores

From the Press Enterprise:

Even as British grocer Tesco's Fresh & Easy Neighborhood Market continues to add merchandise and open new stores -- including three Inland debuts in the next month -- a U.K.-based equity analyst says the fledgling chain remains far behind its initial sales and expansion projections.

The retailer so far has opened 82 stores in three states, and last week opened its 10th Inland market in Murrieta. Also last week, senior research analyst Mike J. Dennis of Piper Jaffray Ltd. issued the firm's second downbeat evaluation this year regarding the small-format concept's progress in the U.S.

Among his conclusions, Dennis said weekly unit sales per store on national-brand goods are as much as 50 times lower than its main supermarket competitors. Also, he said Fresh & Easy is likely to have 168 stores open by February 2009, falling short of its projected 203, possibly due in part to construction delays at its Stockton distribution and kitchen facilities.

Small box retailers From FT

For retailers, the attraction of smaller stores is better sales densities, up to two or three times higher than a typical superstore, as well as better gross margins. But the challenge with rapid turnover is to keep the shelves constantly restocked; customers have little tolerance of missing items. Meanwhile, rents are higher and there is a smaller top line to absorb overheads. It took Tesco five years to get the hang of running its smaller "Express" format in the UK.

That explains Wal-Mart's caution. The US's largest retailer has opened just 140 of its Neighbourhood Market stores - a quarter of the size of its typical 200,000 sq ft format - in a decade. That is a snail's pace for the expansionist group, which opened on average 240 new stores in each of the past five years. It is only now experimenting with a 15,000 sq ft convenience format. But, if food retailers are to keep pace with shifting consumer tastes, they must master the art of miniaturisation.

Wal-Mart keeping close eye on Tesco's U.S. stores : From Reuters

Wal-Mart has remained tight-lipped about its plans for Marketside. In June, Eduardo Castro-Wright, head of Wal-Mart's U.S. division, said the Marketside stores would feature a smaller assortment than a traditional grocery store and focus on fresh goods.

He said Wal-Mart shoppers might shop at the company's large supercenters once a month and go to its grocery-based Neighborhood Markets once a week, but would use Marketside for quick trips to buy perishables.

Tesco rivals testings smaller formats

TK: Wal-Mart's heart may not be with the smaller format - particularly with the potential growth for supercenters in California still significant - but Fresh & Easy will keep them working the model. May the better retailer win. Fresh & Easy said yesterday it is having no troubles filling its labor needs, with 14,000 applications received in August, or about 72 for every position available.