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Food Safety Modernization Act (FSMA)

Post written by: Nate Nieschwitz

WFI-FoodEach year, the Centers for Disease Control and Prevention estimates that approximately 48 million Americans get sick, 128,000 are hospitalized, and 3,000 die from foodborne diseases.

In response to these often highly publicized events, the Obama administration signed the Food Safety Modernization Act (FSMA) into law in January of 2011. This new law is touted as the most sweeping reform to the food production industry in 80 years. The idea behind the change is to shift the government’s position from a reactive to a proactive approach on the fight against foodborne illness.

Key components of the FSMA

  • Increased power to the FDA to initiate mandatory recalls and revoke registration to distribute product. Prior to the FSMA, the FDA could only recommend a recall.
  • Mandatory preventative measures for food production facilities. This is to include a written plan that analyzes hazards and controls, an intensified record keeping and product traceability process, and a reaction plan should an outbreak occur.
  • Mandatory produce safety standards. Within one year of the law’s passage, the FDA is to develop “science based minimum standards.” Prior to this, many produce and fruit processors did not face the sort of standards other food segments face.
  • Increase inspection frequency of both foreign and domestic facilities. All “high risk” facilities must be inspected within five years and then placed on an inspection schedule at least every three years. Foreign providers must comply with U.S. standards.
  • The “Tester Amendment” was added to protect certain smaller producers by exempting those who have sales less than $500,000, sell more than half of their product directly to consumers, and deliver within a 275 mile radius.

The Pros and Cons

While these provisions initially sound positive, critics are already pointing out some drawbacks.

For starters, the law has already been delayed with layers of red tape. As an example, in an article from Food Safety News by James Andrews, the author points out that the release of “science based” standards around fruit and produce are already nearing a year past due.

Furthermore, skeptics would point out that the new regulations will require years of studies and rule making from committees to implement, at a cost of billions of dollars to taxpayers, the food industry, and ultimately, the consumer.

Proponents, however, argue that if successful, the benefits of the law will outweigh the high costs associated with foodborne disease. Furthermore, Katherine Cahill of Marsh’s global product risk suggests that many of the best companies are already surpassing these standards and will only require a “tweaking and tightening.”

Regardless of opinion on the law, the fact is the FSMA is here to stay.

As President Reagan once suggested, a government program is the nearest thing to eternal life on Earth. In response, food producers and manufactures will need to ensure they understand what changes the law brings about, particularly in regards to their exposure for financial loss.

Louis Lubrano, a senior vice president at Liberty International Underwriters, was quoted in PropertyCasualty360 as calling the law a “game changer.” He goes on to state that the government now has the power to induce a recall for what it believes to be a risk, not what it knows to be a risk.

With this increased exposure it would be prudent for food producers to ensure they are covered properly to handle both increased liability claims falling under their GL policy, as well as carry product withdrawal/recall coverage. It is clear that the FDA is serious about their newly appointed authority and the exposure to producers. They just recently flexed their muscles by removing Sunland’s registration to continue its peanut operations due to a salmonella outbreak.

Regardless of validity, the likely outcome of this law is an increased frequency of recalls, and corresponding lawsuits associated with those recalls against producers. Only time will tell if the FSMA is successful in its goal of preventing foodborne illness or if it is simply another big government bureaucracy builder typical of the Obama administration. In the meantime, food producers need to educate themselves on the new exposures they face and acquire the proper coverage.

What measures will your manufacturing operation take in order to meet compliance with new FSMA regulations? How will this impact how your business and production line function?

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