In the past year in my commentaries, you may recall my mentioning that the federal government was starting to take a hard look at competition within the food and agricultural industry. The most recent news is that the U.S. Department of Agriculture has launched a new initiative, called the Agricultural Competition Partnership, between their agency and bipartisan attorneys general in 31 states and the District of Columbia, to enhance competition and protect consumers in food and agricultural sectors, including within grocery, meat and poultry processing markets.
Through a framework established in consultation with state attorneys general, this new partnership will assist state attorneys general in tackling anticompetitive market structures in agriculture and related industries that are raising prices and limiting choices for consumers and producers. Tom Vilsack, USDA secretary said, “The Biden-Harris administration is committed to addressing corporate consolidation and its negative effects on the U.S. economy, such as unfair competition and increased prices. By placing necessary resources where they are needed the most and helping states identify and address anticompetitive and anti-consumer behavior in partnership with federal authorities through cooperative agreements, we can ensure a more robust and competitive agricultural section.”
The focus of the partnership includes the following three areas: (1) Anti- competitive market structures and practices, as well as price gouging and other anti-consumer practices in food retail, meat and poultry processing; (2) lack of choices for consumers and producers; and (3) conflicts of interest, misuse of intellectual property, and anticompetitive barriers across the food and agriculture supply chains. But wait, there is more to the story (see below).
Market Concentration Is Real: USDA Says
In a parallel news story, the meat industry publication Meatingplace recently reported that market concentration, and its impact on pricing and competition, has increased in recent years, according to a new report from the USDA Economic Research Service. Though it is widely believed that market concentration decreases competition and drives up prices, according to the report, market consolidation can also facilitate innovation and economies of scale that can lower market prices. So, I guess you can say there are two sides to every story.
Ahead On Capitol Hill
After a brief July recess, lawmakers returned to Capitol Hill before their August break to face a tough legislative agenda with the threat of a government shutdown facing them in the fall. The annual appropriation spending bills that keep the government moving must be enacted by the start of the new fiscal year come October 1 and the spending bills continue to be a major priority for Congress. Lawmakers were hoping to finish the spending bills before their August recess but it was not to be. Legislators also are looking to enact a new version of the five-year farm bill by the end of the second half of 2023. Contained within the farm bill is the Supplemental Nutrition Appropriations Program (SNAP) which continues to divide House Democrats and House Republicans particularly with the work-related requirement for SNAP recipients. It will be a down-to-the -wire finish before the farm bill gets to the President’s desk.
We at Policy Solutions anticipate that the farm bill will most likely remain in a “holding pattern” until the many appropriation spending bills are passed, thus averting a government shutdown on October 1. House and Senate leaders have said bluntly that floor action on the farm bill will be delayed until the government is funded so expect a lot of last-minute maneuvering. And remember, the House spending bills must be reconciled with the Senate’s, which is another hurdle. If the funding battle continues, it is likely that we will see an extension of the present farm bill just to keep its programs running. We think it is very unlikely that a farm bill will be written by the time the current legislation expires at the end of September, but most likely it will be finished by January 1, 2024. Don’t fret as this has become the norm with past farm bills.
FDA Reorganization Continues
Earlier this year in my commentaries I also wrote about the debacle within the FDA about the lack of emphasis upon food issues within the FDA bureaucracy. Congress, as well as non-government agencies and non-profit organizations, kept repeating the mantra to “get the F out of FDA.” The shouting was aimed at creating a stand-alone food agency component separate from the current bureaucracy within FDA. The result would be the creation of a new agency with emphasis upon food issues as opposed to food issues being second fiddle to drug policy within FDA. What’s the latest?
The head of the FDA recently said that his evolving plan to restructure the food side of FDA is moving forward with changes planned especially for the Office of Regulatory Affairs. However, two key watchdog observers say the movement falls short of necessary steps to ensure the effectiveness of the reorganization, according to a report that crossed my desk from Food Safety News. FDA Commissioner Robert Califf last month announced part of his plan for reorganizing his agency with a new focus on the Office of Regulatory Affairs. In my last report on FDA’s reorganization plans, I mentioned Califf’s goal to reinstate the position of deputy commissioner of foods, which at press time is still a work in progress. In a recent department statement, Califf announced that “The FDA is in the final stages of the recruitment process for deputy commissioner for human foods….and the FDA remains on target to finalize its reorganization proposal for both the office of regulatory affairs and the unified human foods program.“ So, stay tuned for more news to come in the fall as FDA continues down the road to reorganize and appease the naysayers who still want a separate, new food agency.
Agriculture Cybersecurity Network
New bi-partisan legislation was introduced last month in the House of Representatives to protect the nation’s food supply from cyberattacks. The legislation is sponsored by Iowa Republican Zachary Nunn and North Carolina Democrat Don Davis. Their bill proposes creating five regional agriculture cybersecurity centers across the United States to do research and develop security tools.
What is the rationale for the proposed legislation? “Recent cyberattacks have shut down food processing plants, targeted grain cooperatives during harvest, and put our food supply at risk,” Nunn said in a press release. In the past a cybersecurity attack had JBS USA paying an $11 million ransom and global food distributor giant Sysco disclosed a cybersecurity breach involving customer information. So, there is justification for the new legislation. Even some major retail food chains have experienced cyberattacks and/or compromises with their consumer data. We will have to see how the proposed legislation plays out as it begins the long road to enactment.
Safe For Kids?
Senate Majority Leader Chuck Schumer is calling for the FDA to investigate the highly caffeinated Prime beverage that he says is being marketed to children. Prime Energy contains 200 milligrams of caffeine per 12 ounces, equal to six cans of Coca-Cola or nearly two Red Bulls. Prime also sells a non-caffeinated hydration drink in similar packaging, but the packing and marketing of the two beverages are so similar that parents were unknowingly buying the highly caffeinated energy drinks for their children, Schumer explained in a press statement. In the meantime, the Prime company website warns that Prime Energy is not recommended for children under 18, women who are pregnant or nursing, or those who are sensitive to caffeine.
Only In California
California state lawmakers often march to their own beat and enact some wacky legislation. On occasion, their new laws spread to other states like wildfire and cause havoc within business and industry circles. Such is the case with a particular California food product safety bill that is winding its way through the California general assembly.
Manufacturers that use red dye No. 3 and four other food additives are up against a wall if the California bill gets enacted. The legislation, which bans five chemicals found in thousands of food products, is likely to move the feds to do “something” even though nearly 99 percent of chemicals introduced since 2000 were approved by the food and chemical industry, not the FDA, which is the agency tasked with ensuring the food supply is safe. Today, more than 10,000 chemicals are used in foods manufactured and sold in the U.S. So, if the California bill gets enacted, food manufacturers may have to reformulate all their products sold elsewhere in the U.S. as opposed to manufacturing products only to be sold in California and then elsewhere in the country. This is a big issue that has the potential to shake up the food manufacturing industry. We will keep you informed.
Detecting Spoiled Food
A graduate student at Southern Methodist University (SMU) has developed a miniature pH sensor that can detect in real-time when food has spoiled, according to an item I noted in a Food Safety News report. The mini device is designed to be incorporated into food packaging, such as plastic wrap. Every time a food package with the device passes a checkpoint in a store, it could get scanned and the data sent back to a server tracking the pH product levels. The pH level in food is directly linked to its freshness. High pH levels, for example, indicate spoiled food as fungi and bacteria thrive in such environments. The sensor is made with biocompatible materials and printed on flexible films, which makes it inexpensive and disposable, according to Food Safety News. This is an amazing invention and developed by a college student no less!
Have a great summer!
Barry Scher is associated with the public policy firm of Policy Solutions LLC and can be reached at [email protected]