Earlier this spring, the White House Office of Management and Budget (OMB) issued additional guidance for agencies on implementing Executive Order (EO) 13771, entitled “Reducing Regulation and Controlling Regulatory Costs.”  EO 13771 established the expectation that for every new regulatory action an agency issues, it must offset the cost of the regulatory action with two deregulatory actions. OMB’s guidance supplements the interim guidance the agency issued on February 2, 2017.

Like the previous guidance, OMB’s most recent guidance addresses how agencies should implement Section 2 of EO 13771, which concerns agency actions during fiscal year (FY) 2017. However, it also addresses Section 3(d), which established that for FY 2018 and subsequent years, the White House will set for each agency a total amount of incremental costs that will be allowed when it issues new regulations and repeals regulations for the next fiscal year. The new guidance defines key terms such as an “EO 13771 regulatory action” and “EO 13771 deregulatory action” and provides further clarification of the scope of the EO, how agencies should calculate cost, and addresses how the requirements  apply in particular circumstances.

OMB also recently issued a memorandum to the heads of executive departments and agencies that lays out the next steps agencies must take as a part of the comprehensive plan to reform the federal government and reducing the federal civilian workforce. OMB’s memorandum officially ends the federal hiring freeze implemented shortly after the Trump administration took office; however, the memorandum directs each agency to develop a long-term workforce reduction plan, in addition to making near-term workforce reductions and other measures to implement the government-wide reform plan, as discussed further below. We summarize the topics covered in OMB’s guidance and memorandum of most relevance to food and agriculture companies.

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The Trump Administration recently released its Fiscal Year (FY) 2018 budget request. The FY 2018 budget request is notable because it proposes dramatic cuts to both the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA), among other agencies. Presidential budget proposals are at most a starting point – with Congress ultimately responsible for deciding what funds to appropriate – but often provide valuable insight into an administration’s priorities.

The FY 2018 budget request earmarks a total of $5.1 billion for FDA as a whole – an increase of $456 million or 10 percent above the funding provided by Congress in the FY 2017 Continuing Resolution. This increase, however, would consist of reducing FDA’s total budget authority by $854 million, while proposing an increase in user fees of $1.3 billion in non-food programs (which are unlikely to pass, as explained below).

The FY 2018 budget request proposes $137 billion to USDA, a decrease of $12 billion or 8 percent from an estimated $149 billion in FY 2017, and outlines plans to lower spending on USDA programs by roughly $230 billion over a decade. This memorandum discusses FDA and USDA’s plans for reducing expenditures as they relate to food safety.

As described in more detail below, the proposed FY 2018 budget calls for a sizeable reduction ($82.8 million) in FDA’s food safety program and a modest increase ($25 million) in the Food Safety and Inspection Services (FSIS) food safety program at USDA. Notably, no new user fees are proposed for either FDA or FSIS food safety budgets, although the USDA budget alludes to a desire for legislation authorizing user fees, as have past budgets.

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Following the release of the Food and Drug Administration’s (FDA’s) nutrition labeling revisions in May 2016, the U.S. Department of Agriculture’s (USDA’s) Food Safety Inspection Service (FSIS) is proposing to amend the nutrition labeling requirements for meat and poultry products. The proposed revisions parallel almost exactly FDA’s final nutrition labeling revisions.  Comments are due 60 days from the date the proposed rule is officially published in the Federal Register.
This rule proposes several significant changes for many meat and poultry product labels. As with the FDA final rule, the FSIS proposed rule would (1) require the declaration of “Added Sugars,” vitamin D, and potassium and remove the requirement to declare “Calories from Fat”; (2) revise the definition of dietary fiber; (3) revise the format of the Nutrition Facts Panel (NFP); (4) require dual-column labeling for certain containers; (5) update the reference amounts customarily consumed (RACCs) for several product categories; (6) consolidate some RACCs across meat and poultry products; and (7) create several new RACCs. The new and updated RACCs include those for appetizers and candies with meat or poultry. Additionally, the proposed rule would consolidate the nutrition labeling regulations (which are currently separate for meat and poultry products) into a single part at 9 CFR part 413. FSIS proposes a two-year compliance period for large companies and a three-year period for small companies.

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Consumers will have greater access to Omega fatty acid content on meat, poultry, and egg product labels based on new guidance issued by the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). Under these guidelines, FSIS will permit on labels factual statements identifying the amount of Omega fatty acids per serving, although qualifiers are required if the Omega fatty acids are not inherent in the animal protein tissue.

The compliance guideline provides clarity around Omega-3 claims and reflects a degree of flexibility in FSIS’s approach not formally recognized in the past. Although compliance guidelines technically are nonbinding guidance documents, they reflect current FSIS policy and FSIS typically treats the guidelines as mandatory. FSIS is accepting comments on the compliance guideline for 60 days, although the document is effective immediately.

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The U.S. Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) released its final pathogen reduction performance standards for Salmonella and Campylobacter in raw chicken parts and not-ready-to-eat (NRTE) comminuted chicken and turkey products, entitled New Performance Standards for Salmonella and Campylobacter in Not-Ready-to-Eat Comminuted Chicken and Turkey Products and Raw Chicken Parts and Changes to Related Agency Verification Procedures: Response to Comments and Announcement of Implementation Schedule (the Notice).

The new standards set a high bar for Salmonella and Campylobacter reduction, and FSIS speculates that a significant percentage of the poultry industry initially will not meet the standards.

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On December 1st, the U.S. Department of Agriculture’s (USDA’s) Animal and Plant Health Inspection Service (APHIS) issued a final rule making slight changes to an earlier interim final rule to protect against highly pathogenic avian influenza (HPAI). The interim final rule prohibited or restricted importing living birds and poultry (including hatch eggs) and bird and poultry products from regions where any subtype of HPAI is considered to exist (referred to as HPAI regions).

The final rule makes two primary amendments that relax some of the interim final rule’s import restrictions along with several modest adjustments to APHIS’s import controls, although these changes are expected to have minimal direct effect on the domestic broiler industry. First, it allows zoos to import live zoological birds and poultry that have been vaccinated for avian influenza as part of an official program and under specific conditions. Second, it allows importing pigeons, doves, and other Columbiform species from HPAI regions. The final rule became effective immediately.

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The Food Safety and Inspection Service (FSIS) will soon publish in the Federal Register its long anticipated final rule modernizing the poultry slaughter inspection system. The final rule generally tracks the Agency’s January 2012 proposal with some modifications, most notably a lower line speed than proposed for chicken establishments. The new system, dubbed the New Poultry Inspection System (NPIS), is modeled after the Agency’s long-running HACCP Based Inspection Models Project (HIMP) pilot program and is designed to give establishments more control over their slaughter and processing operations.

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Yesterday, the Food Safety and Inspection Service (FSIS) released a compliance guideline addressing steps meat and poultry establishments can take to control and prevent the introduction of undeclared allergens into food products. The guidance, Allergens and Ingredients of Public Health Concern: Identification, Prevention and Control, and Declaration through Labeling (the Guidelines), identifies key steps FSIS recommends establishments take to identify potential sources of foodborne allergens, prevent and control the introduction of allergens into foods, and ensure all allergens are declared on food labels. Guidelines are technically nonbinding recommendations, but FSIS considers food adulterated and misbranded if its label fails to declare any of the “Big Eight” allergens present in the food.  FSIS “recommends that establishments consider incorporating the practices set out in [the Guidelines] in their HACCP plan or Sanitation SOPs or other prerequisite programs.”

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The Food Safety and Inspection (FSIS) will soon publish in the Federal Register its final rule expanding the scope of labels eligible for generic approval. Under the final rule, labels will be eligible for generic approval unless the product has been produced under a religious exemption, the label is for export only and contains deviations from U.S. requirements, the label bears a “special statement or claim,” or the establishment is seeking a temporary approval of a noncompliant label. The final rule will take effect 60 days from the date it is published in the Federal Register.

This post highlights areas of the final rule that provide the greatest amount of flexibility for generic approval as well as other guidance conveyed in the accompanying preamble.

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On December 6, the Food Safety and Inspection Service (FSIS) published a notice in the Federal Register that will effect several changes to the way the agency regulates not-ready-to-eat (NRTE) ground and other comminuted poultry products. Establishments producing NRTE comminuted poultry products must reassess their HACCP plans within 90 days of the notice’s publication to take into account several recent Salmonella outbreaks, the agency will expand its Salmonella verification sampling program to include non-breaded, non-battered comminuted NRTE poultry products, and the agency will apply its Category 1 performance standard to all comminuted poultry. Moreover, FSIS has announced that it will consider meat or poultry products that contain pathogens that are not considered adulterants but that are linked to an illness outbreak adulterated on the ground that they are “unsound, unhealthful, unwholesome, or otherwise unfit for human food” and would request a recall.

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