Regulatory monsters.

Williams, Richard A. ; Abdukadirov, Sherzod

On River Monsters, a popular TV show on the Animal I Planet channel, host Jeremy Wade travels the world in search of the largest and most dangerous river creatures. In India, he finds a fish that makes his top-10 list: an enormous catfish. Easily the size of a grown man, the monster is rumored to include humans among its prey.

But are catfish so dangerous once they're caught? Congress thinks so. It has instructed the Food Safety and Inspection Services (FSIS) of the Department of Agriculture to continuously inspect catfish and catfish products even though two existing federal programs by the Food and Drug Administration and the Department of Commerce already provide seafood-safety inspection. Would the new FSIS inspections make catfish consumption any safer?

Why regulate? | A provision of the Food, Conservation, and Energy Act of 2008 (better known as the farm bill) makes catfish subject to continuous inspection under the Federal Meat Inspection Act (FMIA). But the actual need for regulatory action appears to be zero, for two reasons: First, the risk of salmonella contamination from catfish is very close to zero. Second, all catfish, both domestic and imported, are already regulated under the FDA's seafood Hazard Analysis Critical Control Point (HACCP) program. In addition, most domestic fish processors (18 out of 23) are under additional intense inspection from the National Marine Fisheries Service (NMFS). Nonetheless, the FSIS has proposed new rules for the processing of catfish.

How risky is food poisoning from catfish? There has been only one possible outbreak of human salmonellosis associated with catfish in the past 20 years. That outbreak occurred in 1991, with 10 cases of Salmonella Hadar--a variety of salmonella primarily associated with turkey--at a restaurant in New Jersey. Catfish has also not been identified in case-control studies of salmonellosis. Six other outbreaks where the linkage to catfish appears even weaker than the "possible" outbreak in New Jersey are also discussed in the literature. So, from weak evidence of 10 cases of salmonellosis 20 years ago, the FSIS estimates that there are 2,400 cases each year associated with catfish.

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Clearly this indicts the FDA, who already regulates seafood, having instituted the HACCP system in the mid-1990s. For all types of seafood, the FDA estimates that, of the roughly 200 cases of (nontyphoidal) salmonella infections each year, between 100 and 150 cases would be averted by their regulation. (Notice that the FSIS estimate of the number of salmonella cases from catfish each year is 10 times the number of cases that the FDA estimates for all fish.)

For their improbable extrapolation, the FSIS risk assessment makes a number of assumptions about risk parameters. First, the agency has limited data on the number of contaminated servings of fish per year (one short study found an improbable contamination rate of 2.3 percent). Second, the cooking time and temperature parameters that the FSIS recommends for fish are based on "expert opinion" and online cooking recommendations. The entire extrapolation depends on estimates of the proportion of contaminated fish where the salmonella is not killed by cooking. As the FSIS notes, the cooking temperature parameters are the most important parameter in the risk assessment. Yet, the agency does not explain why the cooking temperatures it uses in its analysis are apparently not close to the minimum needed to kill salmonella.

Furthermore, the FSIS has no data on the concentration and distribution of salmonella in catfish. Inexplicably, the agency has assumed that the distribution of salmonella in catfish is exactly the same as found in poultry (actually, slightly less, by way of a "default" assumption). Similarly, the FSIS's assumption about the increase in concentration of salmonella in a serving of catfish that occurs during storage and preparation was determined from experience with chicken, but the agency gives no justification for the extrapolation from chicken data to catfish. Although there is no reason given for that assumed relationship, the FSIS defends it by saying that it may be more plausible than comparing enumeration to hogs or cattle. This seems to be a matter of the FSIS knowing something about the animals it currently regulates and knowing almost nothing about the catfish it intends to regulate.

In fact, a more likely vehicle for contamination of catfish would not be industry processing but rather retail or consumer mishandling, such as through cross-contamination. The FSIS acknowledges that this is a possibility in catfish-filleting operations at the manufacturing level, but not in the retail or consumer setting. Retail handling is not covered in the FSIS's proposed regulatory regime.

To summarize, the evidence for salmonella contamination from catfish is weak and two agencies (the FDA and the Department of Commerce) already regulate seafood, including catfish. Thus, FSIS regulation seems unlikely to result in any additional public health benefits.

Why regulate if public health isn't improved? | The FSIS considers two options for the scope of the rule, based on the definition of catfish. If the definition includes imported catfish, the FSIS claims that 29 percent more illnesses would be prevented because it assumes that there is no difference in the rates of contaminated servings and the effectiveness of their inspections between domestic and imported catfish. Because the inclusion of imported fish expands the benefits of the proposed rule and because the costs of the rule would fall primarily on imported fish, the actual purpose of the FSIS regulation would seem to be protection of domestic competitors, not protection of public health. Additional evidence comes from the FSIS's report that sales of domestic catfish have dropped by around 13 percent since 2007 while imports have increased by about the same amount.

Under the provisions of the proposed catfish rule, the FSIS is proposing mandatory Sanitation Standard Operating Procedures (SSOPs) and HACCP plans. The SSOPs are plans to ensure that catfish processing plants are sufficiently sanitary for processing. HACCP is a system of processing controls to ensure that processes are monitored and corrected when there is a chance that hazards may enter the system. Given that these requirements already exist under the FDA's HACCP plan, what gains come from having FSIS regulation?

In fact, the Regulatory Impact Analysis (RIA) does not show any significant difference between the FDA plan and the FSIS plan. The FSIS assumes in its RIA that "many catfish and catfish products processing establishments would need to re-write their existing HACCP plans to be compliant with FSIS HACCP plans." Given that all other seafood, juice, and--eventually--all other products except meat, poultry, and egg products are likely to be subject to the FDA's oversight of its mandated HACCP plans under the Food Safety Modernization Act, the FSIS should explain the deficiency in HACCP plans now required by the FDA. In particular, given that the FDA oversees seafood products that are actually risky, e.g., shellfish from the Gulf of Mexico, the FDA could undoubtedly benefit from FSIS insights--if there are any-into the best manner in which to prepare a HACCP plan.

Will it work? | The FSIS admits that "substantial uncertainty remains about the level of effectiveness that can be achieved by FSIS inspection." In fact, there is no discussion of how such an inspection might actually reduce the amount of salmonella in catfish other than to note, "The role of daily FSIS inspection of catfish processing establishments in reducing potential contamination rates is expected to be important." The mechanism for achieving such importance appears to be that FSIS inspectors will observe what is happening and will periodically test products--and this will somehow prevent 10 to 90 percent of all cases of catfish salmonella poisoning.

In the absence of a mechanism and data that describe precisely what activities would take place during FSIS inspections that would lead to reductions in pathogens--in particular related to fish, not birds--a plausible assumption is that FSIS inspection could be totally ineffective. There is no basis for the assertion that the FSIS model will prevent a "plausible" 10 to 90 percent of all cases of salmonellosis from catfish, which would mean preventing between 230 and 2,077 cases per year.

Who pays? | From the FSIS RIA, most of the cost of this regulation will fall on U.S. trading partners who must initiate an "equivalence" program to be eligible for trade with the United States. For foreign firms, the impact of having to be in compliance with "all of the inspection, building construction standards, and other provisions of the FMIA and regulations" is likely to be prohibitive compared to U.S. domestic industries. Those firms that remain in business exporting to the United States will pass much of the cost on to domestic consumers. The World Trade Organization could easily classify the regulation as a non-tariff trade barrier.

The RIA, however, focuses on domestic costs. It makes no attempt to estimate the costs to foreign producers. But since the costs appear to fall heavily on foreign producers, this seems like a serious oversight for the RIA. There certainly appears to be no basis for the RIA's assumption that "the flow of imported catfish would not change as a result of this rulemaking." If the regulation does have the effect of excluding many foreign producers, it may also increase prices for U.S. consumers.

Net benefits | The FSIS may also have understated its own costs in carrying out the inspection program. In particular, there are likely to be large administrative costs in overseeing each firm's conversion to FSIS-approved practices as well as ongoing costs dealing with USDA in-plant inspectors. This involves senior management time, and it should be calculated. The FSIS has also not provided cost estimates for FSIS testing--beyond the estimated $12 million that taxpayers would pay, presumably every year. Industry testing costs may very possibly be large. It is incumbent on the FSIS to estimate these costs and--rather than simply soliciting comments on the testing frequency and costs--provide them for comment.

Neither an option to define catfish differently so as to reduce these costs nor having a once-daily inspection based on HACCP is likely to generate net benefits. There simply are not enough cases of salmonellosis to prevent and the case has not been made for the new FSIS regime providing protection from any other hazards. Cooking catfish properly may account almost exclusively for the non-existent risk, but whatever risks stem from inadequate cooking have already been addressed by the other food inspection programs. This means that any costs that are incurred by the proposed program represent a social loss. The additional costs will be paid by consumers and taxpayers.

Summary | The FSIS has not established a case for additional regulation. On the contrary, the risk assessment and benefit-cost analysis demonstrate that there is no need for additional regulation of catfish. Any and all costs that are likely to be incurred by both foreign and domestic producers and passed on to U.S. consumers are not likely to be justified by the benefits. Furthermore, it is unlikely that the FSIS could ever meet its threshold for the number of cases of salmonella that need to be prevented for the regulation to pay for itself.

The FSIS should revise both analyses to reflect actual risk and estimate the total costs for both domestic and foreign producers, and put that information out for comments. Revised analyses are likely to show that no option under the new provisions of the farm bill is likely to be cost-beneficial.

READINGS

* "A New Role for the FDA in Food Safety," by Richard A. Williams. Mercatus Center at George Mason University working paper, 2010.

BY RICHARD A. WILLIAMS AND SHERZOD ABDUKADIROV

Mercatus Center at George Mason University

RICHARD A. WILLIAMS is director for policy research at the Mercatus Center at George Mason University.

SHERZOD ABDUKADIROV is & research associate in the Regulatory Studies Program at Mercatus.