In early January, Coca-Cola told the FDA that they found traces of carbendazim, an illegal fungicide for citrus in the United States, in samples of its orange juice that had been traced to Brazil. No recalls have been issued and growers in Brazil have agreed to phase out their use of the pesticide on citrus exported to the United States, but the event has put food safety concerns in the news.
When we go to the supermarket, we expect the food we buy to be safe to eat. After all, the naked eye can't see Salmonella or E. coli. We rely on producers, government, and retailers to provide us with disease-free food. Despite industry safety standards, government testing, and private certifications there are still hundreds of food recalls every year. In fact, the USDA estimates that 1 in 6 Americans get some form of food sickness each year. Most of these are minor cases, but of these 47.8 million people, about 128,000 are hospitalized and about 3,000 die each year from food borne illnesses.
Using the outbreak of Hepatitis A from green onions in 2003 as a case study, economists Linda Calvin, Belem Avendano, and Rita Schwentesius evaluate the Economics of Food Safety in a report for the USDA. The authors found the main reasons growers do not adopt safer practices is they don't receive a higher price for their product and the costs of adopting the standards is often high. If there is an outbreak, even those following higher safety standards may be affected from decreased demand and prices. In the case of Mexican green onions, the price of green onions peaked at $18.30 for 48 bunches the day before the announcement of the outbreak and two weeks later prices were down to $7.23 a box. Due to the high costs and low payoffs of providing food safety, it is often under supplied.
There is market incentive for growers to adopt food safety measures though. Many willingly do, and the most likely reason given in the case study was to conform to third party certifications of Good Agricultural Practices (GAPs), allowing them to maintain market access. Their investment in food safety may have paid off. While the price of green onions drastically decreased, those with GAPs certification saw almost no decrease in the volume of their sales of green onions and no decrease in their sales of other products. Those with no GAP certification saw their volume of green onion sales down 50% and other products sales were down about 30%. In addition to market incentives, the Food Safety Modernization Act passed in 2010 hopes to institute efficient and effective means of providing consumers safe affordable food.
Looking for more information on food recalls and their impact? Check out The Food Industry Center's 3 case studies on food recalls.