Considering Tax Incentives For Testing


As both the government and the food industry strive to enhance the safety of our food, rarely a day goes by when we don’t hear about additional legislation, new regulation and changing policy.

While it remains true that FSIS oversight has substantially improved the safety of our food supply, the regulatory system under which we operate in some ways disincentivizes food safety.  Tax credits may be one way, however, to make food safety even more practical and affordable.

In the absence of any single technological solution to guarantee the elimination of pathogens in food, the best way to control pathogens is to design effective interventions, validate those interventions, and perform verification testing on affected products. The problem in the beef industry, however, is that looking for and then finding pathogens can be extremely expensive.

At the harvest level, establishments that test trimmings are required to divert positive product to cooking or rendering. Common sense tells us that the more companies test, the more pathogens they will find, the more product they will divert and the more revenue they will lose. Unfortunately, this may be viewed by some within industry as an incentive to avoid finding contamination which may in fact exist. This of course can also put any companies which are testing appropriately and aggressively at a competitive disadvantage.

At the processing level, where testing is not mandated, many companies have nevertheless put in place finished product testing programs as a means to further enhance safety. When contamination is found, however, difficult decisions must be made regarding which products are potentially affected and how they will be disposed. Here too, such decisions can be very costly.

One solution to overcome the financial disincentive to testing and diverting positive products is to reward companies that are testing aggressively. Congress should consider creating  tax incentives for testing, research and quality control, and also create meaningful tax credits which would extend to (and reimburse companies for) any positive products diverted from their original intended use.

Such a system would accomplish multiple goals.  Not only would our food become more safe, but by reducing production costs through the use of tax credits and incentives to offset losses from positive product, our food supply would also become more plentiful and affordable as well

Proposed Food Safety Legislation Gains Industry Support

Over the last decade, there have been numerous attempts to reform our food safety laws. As our ability to identify food-borne illnesses and outbreaks continues to improve (special thanks to the CDC, PulseNet and OutbreakNet), at least some weaknesses that were rarely, if ever, considered are now being found. Thus, although most meals consumed in this country remain perfectly safe, the recent peanut butter recalls have those advocating the need for additional checks and balances, at least for certain segments of industry, finding growing support.

Prompted by the recent recalls, lawmakers have proposed revised food safety legislation – the new FDA Food Safety Modernization Act -- which would give the FDA additional resources to more closely regulate food safety. The bipartisan bill was sponsored by Senators Dick Durbin (D-Ill.), Judd Gregg (R-N.H.), Ted Kennedy (D-Mass.) and Richard Burr (R-N.C.). A parallel bill, the Safe Food Enforcement, Assessment, Standards and Targeting Act of 2009, was also introduced in the House. The new legislation proposes to increase the frequency of inspections at food facilities, give the FDA expanded access to company records and testing results, and allow the FDA to mandate recalls if a food company fails to follow the agency's recommendations. As reported and summarized by Janie Gabbett, from, the new bill will specifically:

  • Require all food production facilities to implement preventive plans to address hazards and prevent adulteration, and give the FDA access to the plans and relevant documentation;
  • Expand the FDA’s access to records in a food emergency;
  • Allow the FDA to recognize laboratory accreditation bodies to ensure food testing labs meet high quality standards, and to require test results to be reported to the FDA;
  • Allow the FDA to enable qualified third-parties to certify that foreign food facilities comply with U.S. food safety standards;
  • Require importers to verify the safety of foreign suppliers and imported food;
  • Allow the FDA to require certification for high-risk foods, and to deny entry to any food that lacks certification;
  • Increase FDA inspections at all food facilities, including annual inspections of high-risk facilities, and inspections of other facilities at least once every four years;
  • Enhance food-borne illness surveillance systems to improve the collection, analysis, reporting, and usefulness of data on food-borne illnesses;
  • Require the Secretary of HHS to establish a pilot project to test and evaluate new methods for rapidly and effectively tracking/tracing fruits and vegetables in the event of a food-borne illness outbreak;
  • Give the FDA the authority to order a mandatory recall of a food product when a company fails to voluntarily recall the product upon the FDA's request;
  • Empower the FDA to suspend a food facility's registration if there is a reasonable probability that food from the facility could cause serious adverse health consequences or death;
  • Direct the FDA to help food companies protect their products from intentional contamination, and rapidly respond to food emergencies;
  • Increase funding for the FDA's food safety activities through increased appropriations and fees for domestic and foreign facilities.

In addition to receiving bipartisan support, many food companies and industry organizations have voiced support for the bill as well. Vocal supporters include General Mills, Kraft Foods and Kellogg's, along with the Grocery Manufacturers Association, the National Restaurant Association and the Produce Marketing Association. As reported by, Kirstie Foster, spokesperson for General Mills, stated:

“We are strong advocates for food safety system modernization and reform. Ensuring food safety is the highest priority of our industry. We support reform that includes both greater authority and greater resources to strengthen our ability to prevent and respond to food safety issues.”

In turn, Kraft spokesperson Susan Davison agreed, indicating that “the proposed legislation will make significant improvements . . .” Such comments were also echoed by the GMA, in a statement issued by president and CEO Pamela Bailey:

“Ensuring the safety of our products is the food industry’s most important priority... In particular, GMA supports proposals requiring all food companies to have a comprehensive food safety plan in place. It is absolutely critical that manufacturers take a preventative approach in identifying and evaluating potential hazards, and building food safety into the manufacturing process from the very beginning.”

Finally, according to, Tom O’Brien, a representative for the PMA, also expressed support:

“I think the bills, if they get enacted, will restore consumer confidence in FDA, which in turn restores confidence in the food supply. They modernize FDA’s authorities, and they tell it that they should regulate based on the risk of any particular commodity. Those are very important things that we look for in legislation.”

Although the proposed legislation, if passed, would likely strengthen what already is a robust food safety system, there is unfortunately no solution that can completely eradicate food-borne illness. Like the common cold, flu and other ailments, illness occurs because microscopic pathogens exist in our world and can very easily contaminate our environment, our bodies and our food. Even if present in only small amounts that avoid detection, these organisms can eventually grow and multiply to levels that cause illness (whether introduced at a production facility or anywhere in the distribution chain). Moreover, despite continued best efforts to test for and find these pathogens, nature will continue to do its best to avoid being caught. Thus, although the proposed legislation will not eradicate illness, we are hopeful the new initiatives will, at the very least, help us more proactively identify and solve potential problems before they occur.