If the government (in good faith?) issues a food safety warning which significantly decreases the demand for the food product but in the end turns out to be wrong, are the affected food growers entitled to government compensation? That's the question facing the tomato industry and government:
While throwing a few rotten tomatoes at U.S. regulators might help ease their economic pain, growers involved in the latest salmonella food epidemic would prefer cash for their trouble.
After weeks of implicating domestic tomatoes in an outbreak of Salmonella Saintpaul, federal food-safety sleuths have shifted the spotlight to jalapeño and then Serrano peppers grown in Mexico. They were found to be related to more than 1,300 infections in at least 43 states, the District of Columbia and Canada.
This left tomato growers, particularly those in Florida, holding the shopping bag, since the U.S. Food and Drug Administration announced on June 7 that certain types of tomatoes shouldn't be eaten nationwide.
The advisory was lifted July 17, but growers say they already lost $100 million in sales during the investigation, which they charge was conducted poorly and without enough consultation with them.
Interesting question. Here are some more to think about.
To maintain market efficiency, the government must maintain a functioning food safety and inspection system. But pulling the trigger early on a possible safety concern can lead to market panic and significant--and real--economic losses. So how certain should the government be before issuing a warning, and if the warning turns out wrong, should anyone suffering losses be compensated?
On the other hand, if the government fails to issue a warning in the case of a widespread outbreak, should victims be compensated?