Catfish and USDA Regulations - The Issue of Unintended Consequences and The One Food Agency Solution

In a New York Times article, a case study of how unintended consequences of a regulatory change has challenged the catfish industry.  The catfish industry wanted protection against imports, and so asked to be regulated as part of the USDA inspection.  It is however, not working out as intended.

Looking at the proposals being made to transition food safety oversight to one agency, it is not the things considered that will be a challenge, but all of the unintended consequences that follow.

NY Times
http://www.nytimes.com/2015/03/21/us/catfish-farmers-seeking-regulation-to-fight-foreign-competition-face-higher-bills.html?_r=1
Catfish Farmers, Seeking Regulation to Fight Foreign Competition, Face Higher Bills

By RON NIXONMARCH 20, 2015

WASHINGTON — In 2008, faced with increased competition from Vietnam and China, catfish producers in the United States did the unthinkable: They asked for more regulation of their industry.

Congress concurred and agreed to move the inspection of foreign and domestically produced catfish from the Food and Drug Administration to a more rigorous program at the Agriculture Department. The process, however, has dragged on for nearly seven years.

Now, as the Obama administration prepares to finalize the inspection regulations, domestic catfish farmers may have received more than they bargained for, experts say.

More rigorous inspections could cost an already beleaguered industry millions of dollars to comply with the new regulations, potentially driving more catfish farmers out of the business and costing hundreds of jobs in the rural South, said John Sackton, a seafood industry analyst.

The Agriculture Department inspections, which would be more like those conducted at meat and poultry processing plants, are conducted daily and are more rigorous than the sporadic checks conducted by the Food and Drug Administration.

“I don’t think they had a clue,” said David Acheson, a former associate commissioner for foods at the Food and Drug Administration who has also worked at the Agriculture Department. “Catfish producers asked for stronger regulations, but I think many of them thought it would only apply to foreign producers.”

Bari Cain, president of the Catfish Farmers of America, an industry trade group based in Mississippi, said that farmers would be able to meet the new inspection requirements and ensure “the highest level of food safety for American consumers.”

The American catfish industry, which is concentrated in Alabama, Arkansas, Mississippi and Texas, has been steadily losing market share. The number of acres devoted to catfish production dropped to 69,910 acres this year from 133,000 in 2008, according to the Agriculture Department.

The industry says some of the decline can be attributed to higher prices for corn, which is the primary source for catfish feed.

But the main reason for the catfish industry’s woes, officials say, is lower-priced imports, primarily from Vietnam, which often undercut catfish raised in the United States by $2 a pound.

Those imports now make up about 75 percent of the United States market. Domestic catfish farmers say foreign-raised catfish is produced under lax safety standards. But the Vietnamese Association of Seafood Exporters and Producers, a trade group based in Ho Chi Minh City, said its catfish exports undergo rigorous testing and inspection.

So the American industry turned to Congress for help.

The catfish inspection office has long been the subject of intense debate, with the domestic catfish industry and seafood importers each accusing the other of providing misleading facts about the safety of imported catfish.

Several lawmakers — most notably Senators John McCain, Republican of Arizona, and Jeanne Shaheen, Democrat of New Hampshire — called the Agriculture Department catfish inspection plan wasteful and intended to protect only domestic catfish producers. They sponsored an amendment to repeal the new catfish office during Farm Bill negotiations, but the amendment failed after lawmakers from catfish-producing states lobbied to revive the inspection office.

The Obama administration had also opposed the new office, but it is still moving ahead with its creation. “We have worked to ensure the final regulations are reasonable and effectively ensure public health,” said Adam Tarr, a spokesman for the Food Safety Inspection Service at the Agriculture Department.

Senator Thad Cochran, Republican of Mississippi, the largest catfish-producing state, said the office is needed to protect consumers.

“Once the U.S.D.A. catfish inspection program is implemented, both domestic and foreign producers will be required to provide a product that has been certified as safe and unadulterated,” Mr. Cochran said.

Vietnam and other catfish exporters say the new office violates World Trade Organization rules, and the issue has now become part of the continuing Trans-Pacific Partnership negotiations, according to people familiar with the talks.

Trade experts said that the catfish dispute would not derail a deal, but they warned that the catfish inspection office could harm the United States’ efforts to win other concessions and could cause other countries to retaliate against American exports like beef and soybeans.

The Food and Drug Administration and the Agriculture Department have radically different inspection systems, going back nearly a century.

American catfish farmers argue that the agency examines only about 2 percent of all imported food. The farmers, and some food safety advocates, say that lack of inspections may allow fish into the country that could contain banned antibiotics or other chemicals. A 2012 Government Accountability Office study found that catfish was a low-risk food.

Agriculture Department inspectors are in meat and poultry plants daily checking for food safety and sanitation violations. The department also reviews safety systems in countries that want to export to the United States.

The Food and Drug Administration rarely inspects foreign or domestic food plants unless there is evidence of a problem. A new food safety law passed in 2010 will increase the number of foreign and domestic inspections by the Food and Drug Administration.

Dickie Stevens, president of Consolidated Catfish in Isola, Miss., said he was not worried about the Agriculture Department inspections. “We should be able to deal with any new regulations,” he said. “And if there are plants out there that can’t, then they shouldn’t be selling catfish.”

Gavin Gibbons, a spokesman for the National Fisheries Institute, a seafood producers trade group that is opposed to the new catfish inspection office, said the industry might come to regret its push for increased inspections.

“This is the quintessential example of be careful what you ask for,” Mr. Gibbons said. “By trying to regulate the competition out of business, they may find that they could be regulating themselves out of business.”