Requirements for Additional Traceability Records for Certain Foods (Final Rule) Regulatory Impact Analysis
This final rule establishes additional traceability recordkeeping requirements for persons who manufacture, process, pack, or hold foods for which the FDA has determined these additional requirements are appropriate and necessary to protect the public health in accordance with Food Safety Modernization Act (FSMA). The rule will allow FDA and industry to more rapidly and effectively trace food products that cause illnesses back through the food supply system to the source and forward to recipients of the contaminated product. This final rule will only apply to foods FDA has designated for inclusion on the Food Traceability List and foods that contain listed foods as ingredients that remain in the same form (e.g., fresh) in which they appear on the list. By allowing faster identification of contaminated foods and increasing rates of successful tracing completions, the rule results in public health benefits if foodborne illnesses directly related to those outbreaks are averted. This might also lead to more efficient use of FDA and industry resources needed for outbreak investigations by potentially resulting in more precise recalls and avoidance of overly broad market withdrawals and advisories for covered foods. This Final Regulatory Impact Analysis discusses the economic impacts of the final rule, including costs and benefits.
We estimate that the annualized monetized health benefits of the rule over 20 years range from $59 million to $2.2 billion at a seven percent discount rate, with a primary estimate of $780 million, and from $61 million to $2.3 billion at a three percent discount rate, with a primary estimate of $810 million (in 2020 dollars). We also estimate that (non-health) benefits from avoiding overly broad recalls and market withdrawals range from $233 million to $1.8 billion at a seven percent discount rate, with a primary estimate of $575 million, and from $242 million to $1.8 billion at a three percent discount rate, with a primary estimate of $596 million. Additional non-monetized benefits of the rule may include increased food supply system efficiencies, such as improvements in supply chain management and inventory control; more expedient initiation and completion of recalls; avoidance of costs due to unnecessary preventive actions by consumers; reduction of food waste; and other food supply system efficiencies due to a standardized approach to traceability, including an increase in transparency and trust. At a seven percent discount rate, 20-year annualized costs of the rule range from about $63 million to $2.3 billion, with a primary estimate of $570 million per year. At a three percent discount rate, annualized costs range from about $53 million to $2.3 billion, with a primary estimate of $551 million per year.
Regulatory Impact Analysis: Requirement for Additional Traceability Records for Certain Foods Final Regulatory Impact Analysis (PDF)
Federal Register: 87 FR 70910, November 21, 2022