JUNE 3, 2009, 12:39 P.M. ET

Food Industry to Make Case to Lawmakers Over Fees

Source of Article:  http://online.wsj.com/article/SB124403613212981229.html



WASHINGTON -- The food industry said it is willing to pay some fees to fund the government's food-safety functions, but officials are expected to tell lawmakers today that the money shouldn't be used for safety inspections.

"We are not opposed to all fees," said Scott Faber, vice president of federal affairs at the Grocery Manufacturers Association, representing the $2.1 trillion food, beverage and packaged-products industry. "We are concerned that a poorly designed fee to finance inspections and enforcement would create an inherent conflict of interest. That would erode rather than enhance consumer confidence."

The industry's limited embrace of fees came as it seeks to boost consumer confidence after a slew of food-borne illnesses involving products ranging from peanuts to spinach to hot peppers from Mexico. Each has cost food companies along the distribution chain billions of dollars. Industry officials, who had long opposed fees to augment the Food and Drug Administration's largely stagnant food budget, now say they want to help fund the agency.

The Obama administration and some powerful lawmakers are proposing user fees to give the FDA a steady funding stream for food-safety functions. President Barack Obama's budget included $260 million for food safety, including $95 million from user fees. Fees for inspecting and registering food companies would account for $75 million, and additional money would come from facilities that need repeat inspections and from certifying exporters.

New legislation could go even further. On Wednesday, the House Energy and Commerce Committee will hold a hearing on draft legislation that would, among other things, charge all food facilities an annual registration fee of $1,000 -- more than $375 million in total -- to fund the FDA's food-safety activities. The legislation would also require the agency to conduct more frequent inspections at high-risk facilities and give it authority to require food facilities to take specific steps to prevent contamination.

"Of all the issues we have debated regarding improving the nations' food supply, resources is of utmost importance," said Rep. John Dingell (D., Mich.), one of the biggest supporters of the registration fees. "New responsibilities with no new resources is a recipe for disaster. Registration fees will ensure that we have the resources to do what must be done."

Committee Chairman Henry Waxman (D., Calif.) called food safety "a shared responsibility" between government and the industry, and added: "Although I wish we did not have to resort to industry fees to supplement funding for FDA's work, the shortfall in resources in the agency's foods program is dire.'' Karen Lightfoot, spokeswoman said the committee hopes to vote on the legislation in the next few weeks.

Wednesday's hearing will be the first for the FDA's new commissioner, Margaret Hamburg. Officials from GMA and the United Fresh Produce Association are also expected to testify.

Mr. Faber of GMA said the food industry supports fees to cover costs of repeat inspections as well as certification fees for U.S. exporters as well as fees for product recalls, an idea included in Senate legislation sponsored by Sen. Dick Durbin (D., Ill.).



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