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Tuesday, October 31, 2006

Health Regulation And The Market For Food.

A California agricultural group is calling for compulsory health standards in the wake of the recent food scares linked to contaminated produce from California farms.
"Western Growers President Thomas Nassif said calling for compulsory adherence to safety standards, which have been voluntary, and inviting the government's oversight showed how seriously the industry took the outbreak – one of nine linked to California vegetables in the past decade.

'It is not normal for a business to say, "Please regulate us and enforce it if we don't do the right things,"' Nassif said. 'But that, we believe, is essential to restore public confidence.'" (Here.)

Actually that is how regulation works. Large companies welcome regulation because they find it easier to comply and it clears the competition of smaller companies. For example, New York City is banning transfats from food sold in restaurants. KFC and other major fast-food chains are phasing out transfats. (Here.) They acknowledge some difficulty with the phaseout but they are proceeding. Why? Because they can. On the other hand, the greatest opposition to the ban comes from the city's restaurant association which represents lots of small businesses. For them, compliance will be extremely difficult.

Which is not to say regulation is inherently bad. It just doesn't come without cost.


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