This past Saturday, during his weekly address to the nation, Obama said the food safety system in the U.S. is a “hazard to public health” and in need of an overhaul. He said that his administration is creating a Food Safety Working Group to improve communication among various government agencies, adding that there are too many agencies responsible for food safety, making it difficult to share information.

He also named Margaret Hamburg as the new commissioner of the Food and Drug Administration (FDA), saying that the agency will change for the better under her leadership.

In addition, Obama announced that the U.S. Department of Agriculture will take steps to prevent diseased cows from entering the food supply chain and that the FDA will hire more food inspectors—noting that the agency has been under-funded and understaffed in recent years and only about 5 percent of the nation’s 150,000 food processing plants and warehouses are inspected annually.

Perhaps that would have prevented the recall of products with peanuts from the Peanut Butter Corp. of America (PCA). According to Bill Marler, managing partner of Marler Clark, a law firm that is representing some of the victims in the PCA case, the cost to the industry could add up to a half a billion dollars by the time it’s over. These costs will come in the form of litigation, brand defamation and loss of consumer confidence, all of which will impact sales at supermarkets and restaurants.

While most agree that producing safe food requires a multi-layered approach, there is no consensus on what this approach should be.

What do you think of Obama’s choice for commissioner and his plans for the Food Safety Working Group? How will it impact your business?

In April, the U.S. House of Representatives Committee on Energy and Commerce, led by Rep. John Dingell [D, MI], released a Discussion Draft (http://energycommerce.house.gov/FDAGlobalAct-08/Dingel_60AXML.pdf) of the FDA’s Globalization Act of 2008. The draft is intended to begin a discussion about how to provide adequate funding and authority for the FDA to ensure the safety of the nation’s food supply in a global marketplace. The committee plans to hold hearings on the draft over the next few weeks and mark up the legislation soon thereafter.

The draft, if adopted, would place new burdens on the food industry as well as the FDA, and come with a heavy price tag. The proposal calls for food manufacturers to pay an annual registration fee of $2,000 per facility (not per company) operating in the U.S. and a $10,000 annual tax on each food importer to finance FDA operations. The committee said the fee would generate approximately $600 million, more than double the FDA’s current food safety budget.

Industry trade associations blasted the draft, citing that the cost of FDA inspections should be paid from general tax revenue, not from taxes imposed on food facilities or importers. By some estimates, the user fees—and the fees associated with non-compliance–will cost the industry over $1 billion. This unnecessary expense will be ultimately passed on to consumers.

“The user fees proposed in the draft are unfair food taxes imposed on food manufacturers that will only work to arbitrarily increase the cost of food for consumers at the worst time possible–when thousands of Americans are already struggling to hold on to their homes and pay their already skyrocketing grocery bills,” says Bob Brackett, Grocery Manufacturer of America’s senior vice president and chief science and regulatory affairs officer.

In addition to the user fees, the draft is also calling for new regulatory requirements, including provisions that provide broad authority to review the adequacy of food safety plants, to mandate controls at each facility and to require labeling for food treated with carbon monoxide. It would also give the FDA mandatory recall authority. Yet, in the past three years, the FDA has lost 600 inspectors.

While there is no arguing that the U.S. food safety system needs improvement, the drastic measures that are proposed in the draft will have negative, long-term impact that could put small food processors out of business. How will this affect your business?

The beef dates back to cattle slaughtered two years ago. The product was recalled because of a videotape released last month showing workers at Westland’s partner, Hallmark Meat Packing, trying to force “downed” cows to stand with electric shocks and fork lifts. “Downed” cows are either injured or too sick to stand. These poor creatures are at risk for contamination and can possibly carry mad-cow disease.

This wasn’t good news for dozens of retailers, including Wal-Mart Stores Inc. and Costco Wholesale Corp. They had to pull product from their shelves from suppliers that got their beef from Hallmark/Westland Meat. Burger King also had to destroy patties that came from the meat packer as well. But some 37 million pounds of the product went to school lunch programs in 36 states — and has likely already been consumed, according to the U.S. Department of Agriculture.

The USDA said that the recall was precautionary and classified it as a Class II recall, meaning there is little likelihood of illness. However, this recall will once again shake consumer confidence in food safety and could potentially cost retailers and foodservice operators millions of dollars.

The recall has gotten the attention from officials in Washington, who are enraged that potentially tainted beef was sent to school lunch programs. According to USA Today, U.S. Rep. George Miller [D-CA], chairman of the House Education and Labor Committee, said that the recall “raises alarming question about the USDA’s ability to monitor the safety of meat that is being shipped to our nation’s schools.”

With members of the Congress calling for action, you would think food safety is sure to become a hot topic in this year’s presidential election. For years, Sen. Hillary Clinton [D-NY] has been calling for tougher regulations, wanting to create a single food-safety agency. Last week, she outlined her plan for reform if she were elected president:

* Immediately conduct a thorough audit of the nation’’ food safety systems to locate weaknesses and gaps. The current recall raises a number of questions, including how USDA failed to detect violations at the Hallmark/Westland plant and what steps USDA will take to ensure that all of the meat is removed from grocery stores and school cafeterias. Clinton will seek a report with recommendations on immediate and long-term reforms.

* Increase USDA food safety funding by more than 50 percent so that inspectors have the resources and staffing they need to do their jobs. This year, USDA’s Food Safety and Inspection Service will have a budget of $930 million. Much of that money goes to fund 7,800 inspectors responsible for inspecting 6,200 slaughterhouses and food processors across the nation. Clinton wants to increase that budget to $1.5 billion and to bolster the inspection force.

* Move toward a single Food Safety Administration responsible for all food products, with strong authorities to protect consumers. Clinton will work to centralize the nation’s food safety efforts in one agency, so that multiple bodies are not policing imports and setting separate standards. Right now, 15 agencies administer more than 30 laws related to food safety. The result is overlap, gaps and waste.

* Give safety agencies mandatory recall authority and direct them to create a national tracing system to determine the origin of tainted food. Clinton will authorize the FDA and USDA to mandate recalls of tainted products. Right now, the FDA and USDA lack mandatory recall authority. The new food safety agency would establish an integrated national traceback system to help regulators trace food products and ingredients from their point of sale back to their origin.

* Find, prosecute, and punish food production facilities that abuse animals and allow unsafe food to enter our food supply.

* Ban the slaughter of downed animals.

Senator Barack Obama [D-IL] also released a statement, saying “When I am President, it will not be business as usual when it comes to food safety. I will provide additional resources to hire more federal food inspectors. I will also call on the Department of Agriculture to examine whether federal food safety laws need to be strengthened, in particular to provide greater protections against tainted food being used in the National School Lunch Program.”

As far as I can tell, the Republican presidential primary nominees have not issued any statements regarding the recall or food safety at this time. I will have to tune in to the next debate to see how they plan on addressing the issue.

In light of last weeks, recall, I am surprised that Clinton is the only candidate that is addressing this issue. The others are aware of the impact that recalls have on the entire food industry. Everybody agrees that the industry must address this complex issue, but how do we go about it?

What do you think should be done about food safety? Is Clinton’s vision of a single food-safety agency a good idea? What would it take for that to happen? Let us know your thoughts.