Externalities in Industrial Food Production: The Costs of Profit

Gabriela Steier, Duquesne Law School

Abstract

Abstract: The large food companies’ failure to internalize all the food production costs creates negative externalities and economic deficiencies in the food market. Government regulation to-date is insufficient to stop the externalization of costs. Poor eating habits of the general public promote such market failures and are controlled by misinformation, advertisements, and unhealthy foods. Regulatory laws, such as the Hazard Analysis Critical Control point Act (HACCP), the Poultry products Inspection Act (PPIA), and the Humane Methods of Slaughter Act were designed with so many legal loopholes, that these acts remain largely ineffective. The externalities of the food production industry affect the economy, the public’s health, the environment, but also the First Amendment Right of Free Speech. Veggie-libel laws passed in thirteen (13) states in the U.S. stifle the dissemination of the truth about the foods people eat. Consumer protection must be fueled from the inside out. Despite the public obsession with food and diet, people are ignorant of where their food comes from. Until the public’s awareness and concern is increased to a point where citizens and lawyers will use tort law to force the food producers to internalize the food production costs, the market will continue to fail.