The emerging consensus is that FDA unfairly blamed tomatoes for the salmonella "outbreak." I say this confidently because members of Congress have begun pushing for hearings.
The tomato growers, not surprisingly, want the U.S. government to compensate them for the havoc it wreaked. To the tune of $100 million. Note that this probably understates the total cost. $100 million is the tomato growers and shippers' estimate of their own damages. The total cost including losses to downstream users, particularly restaurants, is much higher. (I can personally attest that Chipotle lost several lunch sales while it was out of salsa.)
Should the government compensate tomato growers?
I don't think tomato growers have a compelling equitable case. Over the long run, the price of produce ought to reflect the risk of random, FDA-induced scares. Think of FDA as a freak hailstorm or 100-year flood; a portion of the price of produce reflects the cost to growers of self-insuring against government-induced catastrophe. Compensating tomato growers may give them a windfall.
The real case for compensation is that the government needs proper incentives. If it doesn't pay for the damage caused by bogus scares, it has an incentive to over-warn. FDA officials face political punishment for acting too slowly to quell a genuine outbreak, but little sanction other than embarrassment for acting too aggressively. And since FDA has the experts, it is difficult for the public to assess whether it indeed acted too aggressively.
The solution is to have Congress pay compensation on a case-by-case basis. Presumably, FDA officials want to protect their budget, and it is a bad budget-preservation strategy to force your paymasters to shell out hundreds of millions of dollars for your blunders.
Yes, there are problems with this. It is difficult even for Congress to determine when FDA has blundered. And making growers unconditionally responsible for outbreaks gives them an incentive to police their industry. But we don't want to encourage over-policing -- we don't want to pay for too much safety -- and FDA overreactions don't give anyone the right incentives.
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