An Economic Assessment of Food Safety Regulations

Comparison of Benefits and Costs

Having estimated both the benefits and costs of

HACCP, we can now assess the economic conse-

quences of reforming the meat and poultry inspection

system.  Table 8 summarizes the 20-year annualized

benefits and costs of HACCP, based on the scenarios

outlined above.

Clearly, the benefits of the HACCP rule are greater

than the costs for all scenarios considered.

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   Even at

relatively low effectiveness (20 percent pathogen

reduction assumed for the low-range scenario), the

savings in medical costs and productivity losses of at

least $1.9 billion are greater than the $1.3 billion in

estimated costs, with the new rules.   As we changed our

assumptions to reflect higher pathogen reductions and

increased the costs of premature death and disability, the

margin between costs and benefits becomes even more

pronounced.

The results of this analysis indicate that implementation

of HACCP will contribute to U.S. economic and social

welfare by reducing foodborne illness, medical costs, and

productivity losses in excess of the costs.  Our benefits

estimates (especially the low values) are conservative.

They encompass foodborne diseases from only six

pathogens for which we have epidemiologic and cost-of-

illness data; implementation of the HACCP rule could

likely produce additional benefits by controlling other

microbial pathogens not included in this analysis.

Even though application of the HACCP rule appears to

be economically justified, there are other approaches to

improving meat and poultry safety.  Although a complete

assessment of the costs and benefits of all food safety

policies is beyond the scope of this report, we briefly

outline some of these approaches.