An Economic Assessment of Food Safety Regulations

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An Economic Assessment of Food Safety Regulations: The New Approach to

Meat and Poultry Inspection. Stephen R.  Crutchfield, Jean C.  Buzby, Tanya

Roberts, Michael Ollinger, and C.-T.  Jordan Lin. Food Safety Branch, Food and

Consumer Economics Division, Economic Research Service, United States

Department of Agriculture, Agricultural Economic Report No. 755.

Abstract

An economic analysis of new meat and poultry inspection rules evaluates the

benefits and costs of reducing microbial pathogens and preventing foodborne

illness.  The new rules require federally-inspected processors and slaughterhouses

to adopt Hazard Analysis and Critical Control Points (HACCP) systems to identify

potential sources of pathogen contamination and establish procedures to prevent

contamination.  The benefits of reducing pathogens, which include lower medical

costs of illness, lower productivity losses, and fewer premature deaths, range from

$1.9 billion to $171.8 billion over 20 years, depending upon the level of pathogen

control.  These benefits will likely exceed the costs of HACCP, which are estimated

at between $1.1 and $1.3 billion over 20 years.  Small meat and poultry processing

firms may bear higher costs under the new regulations than do large firms.  Non-

regulatory alternatives to improving food safety, such as education, labeling,

market-based incentives for pathogen reduction, and irradiation, may contribute to

the goal of making foods safer, but are not a substitute for regulation.   Additional

research is necessary to address the fundamental uncertainties involved in esti-

mating the economic consequences of meat and poultry regulatory policies.