Regulatory Impact Analysis: produce safety rule

01/11/2013 03:19:00 PM
Tom Karst

Below are excerpts from the regulatory impact analysis of the produce safety rule, a small bite indeed of the 388 page-document. Consider this a preamble to an introduction.

 From the FDA:

E.  Summary of Costs and Potential Benefits of the Proposed Rule

In this section, we summarize the costs and benefits of the proposed rule. In section IV.G of this document, we provide a more thorough summary of the costs and potential benefits of the proposed rule.

The estimated illnesses attributable to produce RACs other than sprouts, fresh-cut, and sprouts are 3.1 million, and the baseline estimate for preventing all illnesses associated with microbial contamination of FDA-regulated produce is $1.88 billion.

The proposed regulation covers produce responsible for about $1.61 billion of this estimate. We do not expect that this proposed rule will eliminate all foodborne illness linked to covered produce. Instead, we expect that the proposed produce safety regulation will prevent about 65% of this illness burden from recurring. The effectiveness of this regulation and the corresponding reduction in food contamination and foodborne illness is estimated to be $1.04 billion, annually.

We estimate that the total first year costs for domestic farms to implement the proposed rule (if the compliance period were to be the same for all farms, with no staggered compliance) would be approximately $699.7 million, and that the total recurring costs to farms would be $365.65 million per year as shown in Table 10. We estimate that the annualized costs of the proposed rule would be approximately $459.60 million per year using a discount rate of 7 percent for all future years. We obtain a total cost of approximately domestic $419.28 million per year using a discount rate of 3 percent for all future years. The annualized costs for foreign farms are estimated to be about $170.62 million per year using a 7% discount rate and $135.74 million per year using a 3% discount rate.

 

Although, the RIA calculates the cost of the proposed regulation with a small farm cutoff of $25,000 in annual revenue, we consider multiple cutoffs for this size threshold and present estimates for $50,000; $100,000; $250,000; and $500,000 in Table 12. Selecting $50,000 as the threshold for coverage would require 11,958 fewer farms to be covered by the proposed rule, resulting in a total of 28,253 farms covered. This change would cover 1.3 percent fewer produce acres. We estimate that the total annual cost for farms under this scenario is approximately $348 million.

Assuming that the likelihood of a farm causing illness is proportional revenues and that smaller farms are not relatively riskier than larger farms, we estimate a total reduction in benefits of roughly 47,000 illnesses that would not be prevented, equivalent to reduction of $28 million in benefits annually as compared to the $25,000 limit.

FDA has not selected this alternative because, although the cost savings to industry are relatively substantial, we tentatively conclude that the potential additional 47,000 illnesses that would result from increasing the minimum threshold for coverage are too great to justify this option.

The proposed limit of $25,000 accounts for only 1.3 percent of covered produce, representing an estimated 26,000 illnesses per year, increasing the threshold to $50,000 would represent substantial public health impact, nearly doubling the number of preventable illnesses that would not be avoided.

FDA requests comment on the appropriate threshold values to define the limits on farm size for coverage in the proposed rule, as well as supporting data and other information.

 

Quantifying the benefits of the proposed rule

We welcome comment on the potential benefits of the rule, and we particularly request any information that would permit FDA to more accurately quantify the likely benefits of the proposed provisions for individual commodities or for groups or classes of commodities.

The primary benefit of the provisions in this rule would be an expected decrease in the incidence of illnesses relating to produce from microbial contamination.

For the purpose of this analysis, we develop a conceptual framework that describes how implementing this rule would likely reduce the level of foodborne illness. Estimating the rule’s foodborne illness reduction benefits would require the following: (1) baseline risk of foodborne illness attributable to FDA-regulated produce under the scope of this rule; (2) a measure of lost health as measured by morbidity and mortality effects attributable to foodborne illness; (3) value of lost health due to foodborne illness; (4) the changes from baseline food production practices due to the rule; and (5) the effectiveness of the preventive controls.

1. Baseline Risk of Foodborne Illness

 

a. Foodborne Illness Attributable to Produce from Microbial Contamination

We estimate that there are 2.68 million illnesses per year associated with produce that would be covered by this rule and that these illnesses cost $1.6 billion per year. We expect that the proposed rule would eliminate some portion of these illnesses and costs.

To estimate the number of baseline illnesses attributable to produce from microbial contamination only, we begin with only those outbreaks we can directly attribute to FDA-regulated produce from microbial contamination.

In total, there are 4,257 illnesses from 22 separate outbreaks that are linked to produce RACs other than sprouts for the years 2003-2008; this data represents only reported and laboratory confirmed illnesses from outbreaks.

The data span of 2003-2008 is utilized for this analysis because it represents the most current, and comprehensive data available. We are unable to look at years beyond 2008, because the full outbreak data, from CDC, has not been completely collected, sorted, cleaned, and made available for public use.

We do not go back further in the data, because there are regulations in the industry that took effect prior to these dates, and we want to look at a baseline estimate with all current regulations in place and functioning. Additionally, collection methods by both FDA and CDC have improved vastly in recent years, and data further back may be more subject to underreporting biases. This data is directly from an FDA database generated from outbreak investigations and reports (Ref.36).

We note that, because of the infrequency of accrue due to the mitigation of produce related illness in other countries due to improvements in the safety of U.S. exports or produce grown and consumed in other countries on farms covered by the proposed rule. A rough estimate of costs can be found in the Unfunded Mandates section. outbreaks, using a short time period may overstate the riskiness of a particular commodity if it happened to have an outbreak during the period evaluated. If additional data are available from the CDC at the final rule stage we will add it to the analysis. In addition, both 2003 and 2008 had unusually high numbers of illnesses caused by produce, relative to illnesses in adjacent years. We seek comment on whether and how use of our chosen time period may affect the results of our analysis and whether it would be more appropriate to use a different period of analysis.

Over the entire six year time horizon, we observe 15 outbreaks and 769 illnesses attributable to leafy greens. Additionally, there are 9 outbreaks and 1,194 illnesses associated with tomatoes. These two commodities represent the highest number of  average annual outbreaks and illnesses in our available data.

After these top two commodities, herbs, with 3 outbreaks and 730 illnesses; melons, with 7 outbreaks and 313 illnesses; and sprouts, with 9 outbreaks and 151 illnesses, represent the most prevalent commodities in our outbreak data. These commodities are also a likely source of a significant portion of the estimated average annual burden of illness that this proposed rule aims to mitigate.

There are also commodities that appear relatively infrequently in this outbreak data. These include: peppers, peas, green onions, nuts, and berries, each with only one associated outbreak over the six year time horizon. Although these commodities appear to be lower in risk than other types of produce (such as leafy greens), they are subject to the same types of hazards as other produce.

The fact that an outbreak did occur during this time period confirms FDA’s understanding that all produce is subject to sporadic and largely unpredictable outbreaks and illnesses without appropriate mitigation steps. These commodities and their associated outbreaks, show that a variety of produce, that is not typically cooked or receiving kill step processing, even if it is not typically associated with foodborne outbreak may be vulnerable to occasional contamination to a degree that produces a widespread or lethal outbreak.

It considerably more difficult to project the extent to which benefits will be derived from preventing these, since due to their nature, they are unpredictable in the commodity, when they will occur, and the root cause of the outbreak. Therefore, it is uncertain that a regular pattern of outbreaks associated with these products will emerge. We believe that the proposed rule will prevent some meaningful number of these sporadic outbreaks and lead to reductions in human illness.

 

TK: The sales threshold of what farms should be exempt will be hotly discussed by the industry and small farm advocates. This long document merits a careful reading by the industry.



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