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Published: Tuesday, 7/21/2009

Eggs-cellent regs

THE Obama Administration's overhaul of Food and Drug Administration regulations to counter recent outbreaks of salmonella and E. coli should serve as a model for federal agencies across the board.

These reforms are especially aimed at the egg industry, which has been hit hard by a spike in reported salmonella cases nationwide. Action was also precipitated, no doubt, by the increasing number of product recalls, ranging from pistachio nuts to Nestle cookie dough.

In the egg industry, the incidence of food-borne illness could be reduced by requiring producers with more than 3,000 laying hens to refrigerate their eggs at 45 degrees Fahrenheit within 36 hours of their being laid as well as during transportation to distributors.

Most striking about the new regulations is their cost efficiency, which will be implemented over the next 12 to 36 months. The new regulations will cost $81 million, or about 1 cent for every dozen eggs, says the FDA. That will be offset by the $1.4 billion that will be saved annually in health-care treatment that can be avoided by reducing food-related illnesses.

The FDA reforms also highlight some of the gross inefficiencies in national food-regulation agencies, notably the overlap of the FDA, which is responsible for produce, and the Department of Agriculture, which oversees meat.

All in all, this case exhibits how the government can eliminate needless expenditures in one sector of the economy, in this instance health costs triggered by salmonella outbreaks, by more thoroughly regulating another. The fact that more than a billion dollars can be saved at the cost of a penny per dozen eggs should make one wonder how many other responsible regulations can generate similar savings.

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