On August 1, 2018, two consumer groups sued the U.S. Department of Agriculture (USDA), USDA Secretary Sonny Perdue, and Agricultural Marketing Service (AMS) Administrator Bruce Summers for failing to meet the statutory rulemaking deadlines for the National Bioengineered Food Disclosure Standard (NBFDS). The suit was filed by the Center for Food Safety (CFS) and Center for Environmental Health in the United States District Court for the Northern District of California. 1/ On September 6, 2018, the plaintiffs filed a motion for summary judgment requesting that the court order USDA to issue the rule within 60 days.

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The U.S. Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) recently released a guidance document to help companies determine whether their operations are exempt from the inspection requirements of the Federal Meat Inspection Act (FMIA). This guidance marks FSIS’s first significant attempt to articulate policy addressing the applicability of its retailer and restaurant exemptions to newer food distribution models, such as online retailers and home delivered meal services. In particular, the guidance confirms that online-only grocery stores and home delivery meal kit services are eligible for the retailer exemption from FSIS inspection.

This post focuses on new aspects of FSIS’s guidance that apply to operations such as online grocery stores, online markets, meal kit delivery services, and restaurants, although the guidance addresses other exemptions including custom slaughter operations.

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On May 3, the U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service (AMS) issued its proposed rule implementing the National Bioengineered Food Disclosure Standard (NBFDS) passed by Congress in July 2016. AMS is proposing a crop-based approach, where disclosure would be required when a food is or contains a crop, or a derivative of a crop, that is included on one of two lists to be developed by the agency. The first list would include crops that are commercially available in bioengineered (BE) forms where the BE form has been highly adopted, such as canola, field corn, soybean, and sugar beet. The second list would include list crops commercially available in a BE form but adopted at a rate of less than 85 percent, such as non-browning cultivars of apple, sweet corn, papaya, potato, and summer squash. In addition to the three disclosure options listed in the statute – text, symbol, or digital/electronic link – AMS proposes to allow use of a text message disclosure option.

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The Food and Drug Administration (FDA) has issued a final rule extending the compliance date for the final rules revising the requirements for the nutrition and supplement facts labels and the declared serving sizes and reference amounts customarily consumed (RACCs). The final rule extends the compliance date for manufacturers with $10 million or more in annual food sales from July 26, 2018 to January 1, 2020, and for manufacturers with less than $10 million in annual food sales from July 26, 2019 to January 1, 2021.

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The United States Department of Agriculture (USDA) Agricultural Marketing Service (AMS) recently issued a final rule withdrawing the Organic Livestock and Poultry Practices (OLPP) Final Rule published in the Federal Register on January 19, 2017. The OLPP rule promised to impose various animal handling and raising requirements on livestock and poultry labeled Organic, but it was never allowed to go into effect during the administration transition. The Trump Administration signaled an interest in revisiting the rule and solicited comments on the OLPP. The recent final rule is noteworthy not only for its withdrawal of the OLPP, but also for the statutory and cost-benefit analyses that USDA cites to justify the withdrawal. In the recent final rule, USDA explains is withdrawing the OLPP Final Rule based on:

  • The agency’s current interpretation of 7 U.S.C. § 6905, under which USDA believes the OLPP final rule would exceed USDA’s statutory authority; and
  • Independent justification based upon USDA’s revised assessments of its benefits and burdens, and USDA’s view of regulatory policy.

The Organic livestock and poultry regulations currently published at 7 CFR Part 205 remain effective.

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U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb, M.D., and U.S. Department of Agriculture (USDA) Secretary Sonny Perdue announced a formal agreement on January 30, 2018, intended to increase coordination and collaboration between the two agencies. The high-level agreement is limited on details, but includes commitments to developing interagency working groups for the following three “issues of shared concern.”

  • Dual-Jurisdiction Food Facilities: The agreement states that FDA and USDA share the goal of streamlining oversight of dual-jurisdiction facilities by identifying and potentially reducing the number dual-jurisdiction facilities. The agencies also aim to bring greater clarity and consistency to jurisdictional decisions under USDA and FDA’s respective authorities and decrease unnecessary regulatory burdens.
  • Produce Safety: FDA and USDA express their commitment to enhancing their collaboration and cooperation on produce safety activities, including the implementation of FDA’s Produce Safety regulation under the FDA Food Safety Modernization Act (FSMA).
  • Federal Regulation of Biotechnology Products: The agreement states that the agencies are committed to modernizing the Coordinated Framework for the Regulation of Biotechnology, as well as the U.S. agricultural biotechnology regulatory system to develop efficient, science-based regulatory practice by working in partnership with other federal agencies. Both agencies have commitments for improving the regulation of biotechnology that are outlined in the September 2016 National Strategy for Modernizing the Regulatory System for Biotechnology Products and a recent Task Force on Agriculture and Rural Prosperity Report.

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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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