How Foodborne Illness Impacts the Economy

by Odysseas Papadimitriou on September 12, 2012

foodborne illness and the economyEver see the movie Contagion?  If so, you’ve got a sense for how a chef failing to wash his hands after touching some contaminated pork and then shaking hands with a customer can end up making people sick clear across the world.  Sure, the events in the film might be a bit sensationalized, but foodborne illness is a real threat, both to our health and that of the economy.  And interestingly enough, modern media actually both exacerbates the problem and could help provide a solution.

When an outbreak occurs in this the era of Facebook, Twitter, and streaming news on cell phones, millions of consumers know about it immediately and are likely to swear off the product involved for the foreseeable future.  Therefore, not only will the farm at which it originated almost certainly go bankrupt as a result, but the entire industry will suffer as well.

“Anytime there is an outbreak, sales go down,” said Dr. Douglass Powell, professor of food safety at Kansas State University.  “Any commodity … is only as good as its worst farm.”

Just think of all of the foodborne illnesses you’ve heard about in recent years.  Right now, there’s an outbreak of salmonella in cantaloupes from Indiana.  There was also the poultry-induced spread of listeria in 2002, the spread of hepatitis A caused by infected green onions in 2003, the salmonella outbreak in peanuts in 2008, and the spread of E. coli that originated in German sprouts in 2011 yet caused quite a stir  in the United States.  The list goes on and on, too.

The reason you may have heard of these incidents is not because they were especially deadly – the largest death toll was 50 people; compare that to the 240 murders that have occurred in Chicago this year through mid-June.  Rather, it’s because the reach of modern interstate commerce means that an outbreak could easily affect those living far away from where it originates.

The effect on the economy is just as widespread.  According to Robert L. Scharff, a former economist for the US Food and Drug Administration and currently an assistant professor at the Ohio State University, foodborne illness costs the country roughly $152 billion annually.  This prodigious cost arises from a number of different factors, including hospital costs for the infected, lost productivity, the cost of investigating the outbreak, the closure of businesses in the affected industry, and sales lost as a result of consumer fears.

As Dr. Powell pointed out, “Any foodborne outbreak has effects far beyond the headlines.”

The question is what to do about this issue not only because our economy could obviously use a break, but also given the simple fact that, as Dr. Powell noted, it seems out of whack that “we’re supposed to be a developed country, and we have all this illness from something as basic as food.”

The answer, according to Dr. Powell, is to give consumers as much information as possible.  People simply have little way to tell whether the food they buy comes from farms that are microbiologically safe or not.  Denoting this on labels much like restaurants emphasize good inspection grades would be a good start, even though it would surely alienate industry bigwigs given that it would imply that certain foods aren’t actually safe to begin with.

Ultimately, some marketing reform is also going to be needed.  A perfect example of why is the case of organic food.  Production issues, such as organic farmers being more conscious of their environmental impact, surely play into its popularity, but its primary driver is the fact that people believe it to be safer than non-organic food, according to Dr. Powell.  While marketers don’t out and out say so, they certainly hint at this falsity.  We just need to point the marketing machine in the right direction.

Dr. Powell is helping lead this effort with his aptly-titled Barf Blog, which discusses food issues in a way that will keep the attention of today’s ADD society.  Who knows, maybe we can make foodborne illness education the next “in” celebrity cause and in doing so not only save lives, but also save the industry billions of dollars, thereby reducing food prices for everyone and helping our ailing economy.  Does anybody know Matt Damon?

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