Food Safety: Experiences of Seven Countries in Consolidating	 
Their Food Safety Systems (22-FEB-05, GAO-05-212).		 
                                                                 
The safety and quality of the U.S. food supply are governed by a 
complex system that is administered by 15 agencies. The U.S.	 
Department of Agriculture (USDA) and the Food and Drug		 
Administration (FDA), within the Department of Health and Human  
Services (HHS), have primary responsibility for food safety. Many
legislative proposals have been made to consolidate the U.S. food
safety system, but to date no other action has been taken.	 
Several countries have taken steps to streamline and consolidate 
their food safety systems. In 1999, we reported on the initial	 
experiences of four of these countries--Canada, Denmark, Ireland,
and the United Kingdom. Since then, additional countries,	 
including Germany, the Netherlands, and New Zealand, have	 
undertaken consolidations. This report describes the approaches  
and challenges these countries faced in consolidating food safety
functions, including the benefits and costs cited by government  
officials and other stakeholders. In commenting on a draft of	 
this report, HHS and USDA said that the countries' consolidation 
experiences have limited applicability to the U.S. food safety	 
system because the countries are much smaller than the United	 
States. The two agencies believe that they are working together  
effectively to ensure the safety of the food supply.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-212 					        
    ACCNO:   A18056						        
  TITLE:     Food Safety: Experiences of Seven Countries in	      
Consolidating Their Food Safety Systems 			 
     DATE:   02/22/2005 
  SUBJECT:   Consumer protection				 
	     Federal agency reorganization			 
	     Food and drug legislation				 
	     Food industry					 
	     Food inspection					 
	     Foreign governments				 
	     Interagency relations				 
	     Proposed legislation				 
	     Safety regulation					 
	     Safety standards					 
	     Food safety					 
	     Standards (food)					 
	     Canada						 
	     Denmark						 
	     Germany						 
	     Ireland						 
	     Netherlands					 
	     New Zealand					 
	     United Kingdom					 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-05-212

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

February 2005

FOOD SAFETY

Experiences of Seven Countries in Consolidating Their Food Safety Systems

                                       a

GAO-05-212

[IMG]

February 2005

FOOD SAFETY

Experiences of Seven Countries in Consolidating Their Food Safety Systems

  What GAO Found

In consolidating their food safety systems, the seven countries we
examined -Canada, Denmark, Germany, Ireland, the Netherlands, New Zealand,
and the United Kingdom-varied in their approaches and the extent to which
they consolidated. However, the countries' approaches were similar in one
respect-each established a single agency to lead food safety management or
enforcement of food safety legislation. These countries had two primary
reasons for consolidating their food safety systems-public concern about
the safety of the food supply and the need to improve program
effectiveness and efficiency. Countries faced challenges in (1) deciding
whether to place the agency within the existing health or agriculture
ministry or establish it as a stand-alone agency while also determining
what responsibilities the new agency would have and (2) helping employees
adjust to the new agency's culture and support its priorities.

Although none of the countries has analyzed the results of its
consolidation, government officials consistently stated that the net
effect of their country's consolidation has been or will likely be
beneficial. Officials in most countries stated their new food safety
agencies incurred consolidation startup costs. However, in each country,
government officials believe that consolidation costs have been or will
likely be exceeded by the benefits. These officials and food industry and
consumer stakeholders cited significant qualitative improvements in the
effectiveness or efficiency of their food safety systems. These
improvements include less overlap in inspections, greater clarity in
responsibilities, and more consistent or timely enforcement of food safety
laws and regulations. In addition to these qualitative benefits, officials
from three countries, Canada, Denmark, and the Netherlands, identified
areas where they believe financial savings may be achieved as a result of
consolidation. For example, in the Netherlands officials said that reduced
duplication in food safety inspections would likely result in decreased
food safety spending and that they anticipate savings from an expected 25
percent reduction in administrative and management personnel.

Although the seven countries we reviewed are much smaller than the United
States, they are also high-income countries where consumers have very high
expectations for food safety. Consequently, we believe that the countries'
experiences in consolidating food safety systems can offer useful
information to U.S. policymakers.

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Countries Have Taken Various Consolidation Approaches, and

Officials and Stakeholders Cited Challenges and Costs but Believe

Food Safety Systems Are Now More Effective Concluding Observations
Comments from the Seven Countries Examined Agency Comments and Our
Evaluation

1 3 5

12 24 25 25

Appendixes

Appendix I:

Appendix II:

Appendix III:

Appendix IV:

Appendix V:

Appendix VI:

Appendix VII:

Appendix VIII:

Appendix IX:

Appendix X: Appendix XI: Scope and Methodology

Canada's Food Safety System Consolidation

Denmark's Food Safety System Consolidation

Germany's Food Safety System Consolidation

Ireland's Food Safety System Consolidation

The Netherlands' Food Safety System Consolidation

New Zealand's Food Safety System Consolidation

The United Kingdom's Food Safety System Consolidation

Comments from the Department of Health and Human Services

Comments from the U.S. Department of Agriculture

GAO Contacts and Staff Acknowledgments

GAO Contacts
Staff Acknowledgments

28 30 34 37 41 46 50 53

57

60

62 62 62

    Table     Table 1: Comparison of Selected Countries' Population, Gross 
                       Domestic Product (GDP), Total Food Consumption, per 
                      Capita GDP, and Spending for Food as a Percentage of 
                                   Total Spending                          10 
Figures   Figure 1: U.S. Federal Agencies' Food Safety Responsibilities  7 
                 Figure 2: Improvements in Food Safety Operations Cited by 
                        Government Officials or Stakeholders               15 

Contents

Figure 3: Summary of Canada's Food Safety System
Consolidation 17
Figure 4: Summary of Denmark's Food Safety System
Consolidation 19
Figure 5: Summary of Germany's Food Safety System
Consolidation 20
Figure 6: Summary of Ireland's Food Safety System
Consolidation 21
Figure 7: Summary of the Netherlands' Food Safety System
Consolidation 22
Figure 8: Summary of New Zealand's Food Safety System
Consolidation 23
Figure 9: Summary of the United Kingdom's Food Safety System

Consolidation 24
Figure 10: Food Safety Authority of Ireland's Organization 43
Figure 11: The Netherlands' 2001 Food Safety System

Organization 47
Figure 12: The Netherlands' 2002 and 2003 Food Safety System
Organization 47

Contents

Abbreviations

AMS Agricultural Marketing Service
APHIS Animal and Plant Health Inspection Service
ARS Agricultural Research Service
BSE bovine spongiform encephalopathy
CDC Centers for Disease Control and Prevention
CFIA Canadian Food Inspection Agency
DVFA Danish Veterinary and Food Administration
EFSA European Food Safety Authority
EPA Environmental Protection Agency
EU European Union
FDA Food and Drug Administration
FSA Food Standards Agency
FSAI Food Safety Authority of Ireland
FSIS Food Safety and Inspection Service
GDP gross domestic product
HHS U.S. Department of Health and Human Services
KvW Inspectorate for Health Protection and Veterinary Public Health
NMFS National Marine Fisheries Service
NZFSA New Zealand Food Safety Agency
RVV National Inspection Service for Livestock and Meat
USDA U.S. Department of Agriculture
VWA The Food and Consumer Product Safety Authority

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States Government Accountability Office Washington, D.C. 20548

February 22, 2005

The Honorable George V. Voinovich

Chairman

The Honorable Daniel K. Akaka

Ranking Member

Subcommittee on Oversight, Government Management, the Federal Workforce
and the District of Columbia Committee on Homeland Security and
Governmental Affairs United States Senate

The Honorable Richard Durbin United States Senate

As we have previously reported, the federal food safety system in the
United States emerged piecemeal, over many decades, typically in response
to particular health threats or economic crises. The result is a
fragmented legal and organizational structure that gives responsibility
for specific food commodities to different agencies and provides them with
significantly different authorities to enforce food safety laws. In fiscal
year 2003, the principal federal agencies with food safety
responsibilities spent nearly $1.7 billion to ensure the safety and
quality of the U.S. food supply.

Many legislative proposals have been made to reform existing laws and
consolidate the U.S. food safety system, but to date no action has been
taken. Most recently, in 2004, parallel Senate and House bills proposed
combining the food safety regulatory programs of the U.S. Department of
Agriculture (USDA) and the Food and Drug Administration (FDA), within the
Department of Health and Human Services (HHS), and the voluntary seafood
inspection program operated by the Department of Commerce.

Several countries have taken steps to streamline and consolidate food
safety functions. In 1999, we reported on the experiences of four
countries-Canada, Denmark, Ireland, and the United Kingdom-that were
consolidating their food safety systems.1 In response to your interest in
learning about these and other countries' experiences with consolidation,
we updated information on the countries covered in the 1999 report and

1GAO, Food Safety: Experiences of Four Countries in Consolidating Their
Food Safety Systems, GAO/RCED-99-80 (Washington, D.C.: Apr. 20, 1999).

included information on three other countries that have also undertaken
consolidation efforts-Germany, the Netherlands, and New Zealand. This
report describes the approaches these seven countries have taken in
consolidating food safety functions, the challenges they faced, and the
results of the countries' efforts, including benefits and costs cited by
government officials and industry or consumer stakeholders.

To develop this information, we examined the seven countries' efforts to
streamline and consolidate their food safety systems,2 including the
benefits and costs that resulted, as cited by government officials.3 We
conducted structured interviews with senior government officials from food
safety, agriculture, and health agencies and with representatives of food
industry and consumer organizations, reviewed and analyzed the documents
they provided, and reviewed World Health Organization and GAO reports. We
also met with European Union (EU) food safety officials to discuss how the
EU's food legislation is affecting its member countries' decisions to
consolidate, as well as how the EU interacts with food safety agencies in
member countries.4 The information on countries' food safety systems in
this report, including descriptions of laws, is based almost exclusively
on interviews with and documentation provided by high-level food safety
officials as well as food industry or consumer stakeholders from the seven
countries we examined. Most of the information we obtained was
qualitative. To the extent possible, we corroborated the qualitative
information provided by government officials by interviewing food industry
and consumer organization stakeholders. We obtained very limited
quantitative information. We asked government officials questions intended
to help us assess the reliability of the quantitative information they
provided, but we could not determine the reliability of most of this
information because of constraints on the amount of time the countries'
food safety officials could devote to our study. Although we could not
assess the quantitative information's reliability, we are reporting it in
order to provide descriptive information that will inform policymakers in
the

2For the purposes of this report, we defined consolidation as the transfer
of responsibility and resources for performing a food safety function from
two or more agencies to a single agency.

3In examining countries' food safety systems, we did not obtain
information on agencies that are responsible for foodborne illness
surveillance for each of the seven countries.

4Five of the countries whose systems we studied, Denmark, Germany,
Ireland, the Netherlands, and the United Kingdom, are members of the
European Union.

United States about the various approaches, challenges, and benefits that
countries' officials identified to us regarding their consolidation
efforts.

Appendix I provides more information on our scope and methodology. We
conducted our work from April 2004 through December 2004 in accordance
with generally accepted government auditing standards.

Results in Brief 	The seven countries we examined have taken various
approaches to consolidate their food safety systems. Each of the seven
countries we reviewed established a single agency to lead food safety
management or enforcement of food safety legislation and modified existing
food safety laws, although their approaches and the extent to which they
consolidated differed. For example, Denmark centralized its system by
creating a new federal agency in which it consolidated almost all the food
safety functions and activities, including inspections, which were
previously distributed among several government agencies. In contrast,
Germany's new agency functions as a coordinating body to lead food safety
management and formulate general administrative rules to guide the
implementation of national food safety laws by the German federal states.5
The German federal states continue to be responsible for overseeing food
inspections performed by local governments. The two major factors
motivating countries to consolidate their food safety systems were public
concern about food safety and a need to improve program effectiveness and
efficiency. For example, in the United Kingdom, consolidation occurred
primarily in response to a loss of consumer confidence resulting from the
outbreak of mad cow disease, and in Canada, consolidation was intended to
achieve greater program effectiveness and reduce expenditures. A third
important motivating factor for the EU countries has been the need to
comply with recently adopted EU legislation. These EU changes aim to
harmonize and simplify its food safety legislation and to create a single,
transparent set of food safety rules that is applicable to all EU member
countries.

In reorganizing their food safety systems, several countries cited
challenges in two areas. First, many countries had to consider whether to
place the new agency within the existing health or agriculture ministry or

5The Federal Republic of Germany consists of 16 federal states, known as
la:nder. Under Germany's federal structure, the federal states have
responsibilities that include the implementation of food safety laws.

establish it as a stand-alone agency while also determining what
responsibilities the new agency would have. For example, Ireland chose to
place its new food safety agency in its existing Department of Health and
Children, in part, to separate food safety responsibility from the
promotion of the food industry, which is the responsibility of the
Department of Agriculture and Food. On the other hand, to separate food
safety regulation from political pressures, New Zealand established a
semi-autonomous food safety agency. A second challenge, cited by officials
in several countries, was helping employees assimilate into the new
agency's culture and support its priorities. To foster the development of
a common organizational culture, food agency officials in Denmark moved
employees to centralized locations and held monthly meetings to
familiarize them with the mission and culture of the organization.

Although none of the countries has formally analyzed its consolidation
results, the government officials and stakeholders we interviewed in each
of the seven countries stated that the overall effect of consolidation has
been or will likely be positive. None of the countries has conducted an
analysis to compare the effectiveness and efficiency of its consolidated
food safety system with that of the previous system. For example,
officials stated they could not determine whether their country's
consolidation had reduced foodborne illness because consolidation was only
one of many factors that could influence the frequency of foodborne
illness. Furthermore, it may be too early to fully assess the benefits of
consolidation for several of the countries because their new food safety
structures have been functioning for 3 years or less. Although limited,
some information on costs and benefits was available. As expected, most
countries incurred start-up costs in reorganizing. These expenditures were
used for purposes such as acquiring buildings and purchasing laboratory
equipment. Some countries experienced a temporary reduction in the
quantity of food safety activities performed due to consolidation-related
disruptions. However, government officials in each of the seven countries
believe that these consolidation costs have been or will likely be
exceeded by the benefits. Specifically, these officials, as well as
stakeholders in each country, consistently stated that consolidation of
their food safety systems has led to significant qualitative improvements
in food safety operations that enhance effectiveness or efficiency. For
example, government officials and stakeholders cited such benefits as
reduced overlap in inspections, more targeted inspections based on food
safety risk, more consistent or timely enforcement of food safety laws and
regulations, and greater clarity in responsibilities. Government officials
in Canada, the Netherlands, and Denmark stated that some cost savings may
be achieved as a result of

changes that have already taken place or are expected from planned changes
needed to complete their consolidation efforts. For example, in the
Netherlands officials said that reduced duplication in food safety
inspections would likely result in decreased food safety spending. Dutch
officials also said that they anticipate savings to be derived from an
expected 25 percent reduction in administrative and management personnel
and from selling excess property.

In commenting on a draft of this report, HHS and USDA stated that they are
working together effectively to ensure food safety and pointed out
limitations related to the information available for our study. For
example, both agencies said the report does not contain cost-benefit
analyses of countries' consolidations, and USDA said the report does not
have information on causal relationships between consolidation and
quantifiable public health benefits, such as changes in the incidence of
foodborne illness. They also said that these countries' consolidation
experiences have or may have limited applicability to the U.S. food safety
system because the countries have smaller food and agriculture industries
than the United States. Our report clearly acknowledges that the countries
provided limited quantitative data on the costs and benefits of
consolidation and points out that the information presented is based on
structured interviews with highlevel officials, documentation they
provided, and interviews with food industry or consumer stakeholders from
each of the seven countries we reviewed. As our report states, government
officials, as well as food industry and consumer stakeholders,
consistently stated that consolidation of their food safety systems has
led to significant improvements in food safety operations that enhance
effectiveness and efficiency. In addition, our report clearly states that
the countries we reviewed are smaller than the United States, but it also
notes that, similar to the United States, they are high-income countries
where consumers have high expectations for food safety. Consequently, we
believe this report provides useful information on countries' experiences,
particularly with regard to the qualitative improvements in food safety
operations cited by government officials.

Background	While the U.S. food supply is generally safe, each year,
according to a Centers for Disease Control and Prevention (CDC) estimate,
tens of millions of Americans become ill and thousands die from eating
unsafe food. Furthermore, USDA's Economic Research Service has estimated
that the costs associated with foodborne illnesses are about $7 billion,
including medical costs and productivity losses from missed work.

The safety and quality of the U.S. food supply is governed by a complex
system that is administered by 15 agencies. The principal federal agencies
with food safety responsibilities operate under numerous statutes
underpinning the federal framework for ensuring the safety and quality of
the food supply in the United States. These laws give the agencies
different regulatory and enforcement authorities, and about 70 interagency
agreements aim to coordinate the combined food safety oversight
responsibilities of the various agencies. The federal system is
supplemented by the states, which have their own statutes, regulations,
and agencies for regulating and inspecting the safety and quality of food
products.

USDA and FDA have primary responsibility for ensuring the safety of foods.
USDA's Food Safety and Inspection Service regulates meat, poultry, and
certain egg products, and FDA regulates the safety of all other foods,
including milk, seafood, and fruits and vegetables. The Environmental
Protection Agency (EPA) sets limits on the amount of pesticide residues
that are allowed in food, and the National Marine Fisheries Service within
the Department of Commerce provides fee-for-service inspections to ensure
the safety and/or quality of commercial seafood. Similarly, USDA's
Agricultural Marketing Service (AMS) performs food quality assurance
inspections that include food safety elements. In addition to their
established food safety responsibilities, USDA, FDA, and EPA, along with
the Department of Homeland Security, have begun to address food security.6
Figure 1 summarizes the 15 agencies and their food safety
responsibilities.

6For the purposes of this report, we defined food security as distinct
from food safety in that food security refers to the vulnerability of a
nation's food supply to deliberate actions that contaminate food or reduce
the available quantity of food.

Figure 1: U.S. Federal Agencies' Food Safety Responsibilities Agency
Responsible for

U.S. Department of Food Safety and Inspection All domestic and imported
meat, poultry,

Agriculture Service

and processed egg products

Animal and Plant Health Protecting the health and value of U.S.

Inspection Service 	agricultural resources (e.g., animals and plants)

Grain Inspection, Packers and Establishing quality standards, inspection

Stockyards Administration 	procedures, and marketing of grain and other
related products

Agricultural Marketing Establishing quality and condition

Servicea	standards for dairy, fruit, vegetable, livestock, meat, poultry,
and egg products

Agricultural Research Service Conducting food safety research

Economic Research Service 	Providing analyses of the economic issues
affecting the safety of the U.S. food supply

National Agricultural Statistics Providing statistical data, including

Service	agricultural chemical usage data, related to the safety of the
food supply

Cooperative State Research, Supporting food safety research, Education,
and Extension education, and extension programs in the Service land-grant
university system and other

partner organizations

Department of Food and Drug Administration All domestic and imported food
products Health and Human except meat, poultry, and processed egg Services
products

Centers for Disease Control Protecting the nation's public health, and
Prevention including foodborne illness surveillance

Department of National Marine Fisheries Voluntary, fee-for-service
examinations of Commerce Service seafood for safety and quality

Environmental Regulating the use of pesticides and

Protection Agency 	maximum allowable residue levels on food commodities
and animal feed

Department of the Alcohol and Tobacco Tax and Enforcing laws covering the
production,

Treasury Trade Bureau 	use, and distribution of alcoholic beverages

Department of Coordinating agencies' food security
Homeland activities
Securityb

Federal Trade Prohibiting false advertisements for food Commission

Source: GAO.

aAccording to USDA, AMS has no statutory authority in the area of food
safety. However, AMS performs some functions related to food safety for
several foods. For example, AMS graders monitor a

shell egg surveillance program that identifies cracked and dirty eggs. In
addition, AMS performs functions related to food safety for the National
School Lunch Program.

bIn 2001, by Executive Order, the President stated that the then Office of
Homeland Security, as part of its efforts to protect critical
infrastructures, should coordinate efforts to protect livestock,
agriculture, and food systems from terrorist attack. In 2002, Congress
enacted the Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat.
2135 (2002), setting out the department's responsibility to protect and
secure critical infrastructures and transferring several food safety
related responsibilities to the Department of Homeland Security. As a
result of the Executive Order, the Homeland Security Act of 2002
establishing the Department of Homeland Security, and subsequent
Presidential Directives, the Department of Homeland Security provides
overall direction on how to protect the U.S. food supply from deliberate
contamination.

Many proposals have been made to consolidate the U.S. food safety system,
but to date no action has been taken. Several bills introduced in the
Congress, reports by the National Academy of Sciences and the National
Commission on the Public Service, and several of our reports and
testimonies have proposed consolidation of the U.S. food safety system.
For example, in 2001, parallel Senate and House bills proposed
consolidating inspections and other food safety responsibilities in a
single independent agency. In 2004, legislation was again introduced in
the Senate and the House to establish a single food safety agency to
protect public health, ensure food safety, and improve research and food
security. This proposed legislation would combine the two food safety
regulatory programs of USDA and FDA, along with a voluntary seafood
inspection program operated by the Department of Commerce. The proposed
new food safety program would have been based on a comprehensive analysis
of the hazards associated with different foods and their processing and
would require, among other things, the enforcement of the adoption of
process controls in food establishments as well as the establishment and
enforcement of science-based standards.

In 1998, the National Academy of Sciences recommended integrating the U.S.
food safety system and suggested several options, including a single food
safety agency.7 More recently, the National Commission on the Public
Service recommended that government programs that are designed to achieve
similar outcomes be combined into one agency and that agencies with
similar or related missions be combined into large departments.8 The
Commission chairman testified before a House subcommittee that important
health and safety protections fail when responsibility for

7Ensuring Safe Food From Production to Consumption, Institute of Medicine,
National Research Council (Washington, D.C.: National Academy Press,
1998).

8Urgent Business For America: Revitalizing the Federal Government For the
21st Century, Report of the National Commission on the Public Service
(Washington, D.C., 2003).

regulation is dispersed among several departments, as is the case with the
U.S. food safety system.

The division of responsibility among several government agencies
responsible for food safety is not unique to the United States. Food
safety officials in the countries we selected for this review said they
faced similar divisions of responsibilities and that their countries'
reorganizations were intended to address this problem.

Although the seven countries whose food safety systems we reviewed are
much smaller in population than the United States, they, like the United
States, are high-income countries9 where consumers have very high
expectations for food safety. Table 1 presents data on population, size of
economy, food expenditures, and consumer spending for food as a percentage
of total consumer spending for the seven countries and the United States.
The table shows that U.S. consumers' spending on food as a percentage of
their total spending is somewhat similar to that of the other seven
countries, ranging from about 10 percent in the United States to over 16
percent in Ireland and the United Kingdom. In general, high-income
countries tend to spend a smaller percentage of their income on food than
low-income countries. For instance, in low-income countries consumers'
spending for food often exceeds 50 percent of their total spending.10

9All seven countries, as well as the United States, are in the World
Bank's high-income category.

10For all of the 114 countries analyzed in a recent USDA Economic Research
Service study, consumer spending on food as a percentage of total spending
ranged from nearly 74 percent of the total budget in Azerbaijan to just
below 10 percent in the United States. James Seale, Jr., Anita Regmi, and
Jason Bernstein, "International Evidence on Food Consumption Patterns,"
Technical Bulletin Number 1904, Economic Research Service, USDA, October
2003.

Table 1: Comparison of Selected Countries' Population, Gross Domestic
Product (GDP), Total Food Consumption, per Capita GDP, and Spending for
Food as a Percentage of Total Spending

Country

Populationa (2004)

    Size of economy (2003 GDPb) (dollars in millions) Total food consumptionc
                                                 (2003) (dollars in millions)

Per capita GDPd (2003)

                         Spending for food as a percentage of total spendinge

        Canada         32,507,874     $834,390    $45,375    $27,097    11.68 
        Denmark           5,413,392   212,404      12,430    39,497     14.02 
        Germany        82,424,609    2,400,655    162,251    29,137     13.09 
        Ireland           3,969,558   148,553      5,018     38,864     16.59 
      Netherlands      16,318,199     511,556      27,659    31,759     13.29 
      New Zealand         3,993,817    76,256      5,525     19,350     15.19 
    United Kingdom     60,270,708    1,794,858    104,550    30,355     16.37 
     United States    293,027,571    10,881,609   $564,040   36,924   

Source: GAO using various sources cited below.

Note: For each data source, the table shows most recent year available
from the source.

aCentral Intelligence Agency, The World Factbook, Field
Listing-Population, July 2004 estimates,
(http://www.cia.gov/cia/publications/factbook/fields/2119.html).

bWorld Development Indicators database, World Bank, September 2004 World
Bank, (http://www.worldbank.org/data/databytopic/GDP.pdf). Gross Domestic
Product is the market value of the goods and services produced by labor
and property located in a particular country.

cConsumer expenditure amounts, except for the United States, are from
national statistical offices/OECD/Eurostat/Euromonitor for 2003. The
amount for 2003 for the United States is from the Economic Research
Service, USDA. All amounts are for expenditures of food and nonalcoholic
beverages brought into the home.

dUnited Nations, Department of Economics and Statistics Division,
Indicators on Income and Economic Activity. All amounts are for 2003 and
were last updated in December 2004.

eERS/USDA Data - International Food Consumption Patterns,
(http://www.ers.usda.gov/data/InternationalFoodDemand). Food budget shares
are estimated across 114 countries using 1996 data for nine major
consumption groups and eight food subgroups including bread and cereals;
meat; fish; dairy products; fats and oils; fruit and vegetables; beverages
and tobacco; and other food products.

Most of the countries we selected for this review are members of the EU11
and, as such, must abide by EU food safety legislation. The development
and implementation of EU food safety legislation is the responsibility of
the Health and Consumer Protection Directorate General. In 2002, to
respond to consumer concerns about the safety of the food supply, the EU
created a

11The EU is a treaty-based institutional framework that defines and
manages economic and political cooperation among its 25 member countries.
EU member countries have reached EU-wide agreement in certain policy
areas, including food safety, and operate as a single economic market.

new independent food safety institution, the European Food Safety
Authority (EFSA), which is responsible for providing independent,
scientific advice on all matters linked to food and animal feed safety.
The tasks performed by EFSA include communicating with the public on food
safety matters and providing risk assessments to the European Commission,
the European Parliament, and the EU Member States.

In addition to creating EFSA in April 2004, the EU adopted additional,
comprehensive food safety legislation12 that becomes effective, in large
part, on January 1, 2006. Together with the earlier regulation
establishing EFSA, the legislation is intended to create a single,
transparent set of EU food safety rules applicable to all food, including
animal and nonanimal products. The legislation covers the entire food
supply chain from production to consumption and places more requirements
on EU member nations. It identifies specific food safety objectives and,
unlike much of the EU's previous food safety legislation, specifies the
methods by which those objectives must be achieved. For example, it
requires food business operators to adopt specific hygiene measures and a
permanent procedure or procedures based on Hazard Analysis and Critical
Control Point principles.13 Moreover, the legislation requires that each
EU country establish and implement an official food and animal feed
control plan by January 1, 2007. Thereafter, an annual report on the
implementation of this national control plan must be submitted. To carry
out its official controls over food and animal feed, a country must
designate responsible entities. If a country has more than one responsible
entity, it must ensure effective coordination between these entities.
According to a paper presented at a

12According to EU officials, the legislative package includes Regulation
(EC) No. 852/2004 of the European Parliament and of the Council of 29
April 2004 on the hygiene of foodstuffs; Regulation (EC) No. 882/2004 of
the European Parliament and of the Council of 29 April 2004 on official
controls performed to ensure the verification of compliance with feed and
food law and animal health and animal welfare rules; Regulation (EC) No.
853/2004 of the European Parliament and of the Council of 29 April 2004
laying down specific hygiene rules for food of animal origin; Regulation
(EC) No. 854/2004 of the European Parliament and of the Council of 29
April 2004 laying down specific rules for the organization of official
controls on products of animal origin intended for human consumption; and
Directive 2004/41/EC of the European Parliament and of the Council of 21
April 2004 repealing certain directives concerning food hygiene and health
conditions for the production and placing on the market of certain
products of animal origin intended for human consumption and amending
Council Directives 89/662/EEC and 92/118/EEC and Council Decision
95/408/EC.

13Hazard Analysis and Critical Control Point principles are risk-based and
make industry, rather than government inspectors, responsible for
identifying steps in food production where food safety hazards are most
likely to occur and for establishing controls that prevent or reduce such
hazards.

2004 international forum for food safety regulators, in recent years many
EU countries have chosen to establish a national food safety authority,
but the establishment of such an authority is not obligatory.14

Countries Have Taken Various Consolidation Approaches, and Officials and
Stakeholders Cited Challenges and Costs but Believe Food Safety Systems
Are Now More Effective

The seven countries we examined had two primary reasons for reorganizing
and consolidating their food safety systems, took various approaches, and
often faced similar challenges. While the extent to which countries
consolidated their food safety systems varied considerably, each country
established a single agency to lead food safety management or enforcement
of food safety legislation.15 Although most countries incurred some
consolidation start-up costs, government officials, as well as food
industry and consumer stakeholders, generally agree that consolidation has
led to significant qualitative improvements in the effectiveness or
efficiency of their food safety systems. Our ability to evaluate these
improvements and other information officials provided was limited because
none of the countries has conducted an analysis to measure the
effectiveness and efficiency of its consolidated food safety system
relative to that of the previous system. In some cases, it may be too
early to fully assess the benefits of the countries' consolidations.

The seven countries whose reorganizations we reviewed consolidated their
food safety systems primarily to improve program effectiveness and
efficiency or to respond to public concern about food safety.

14"European Food Safety Control Systems: New Perspectives on a Harmonized
Legal Basis" (paper presented at the Second Food and Agriculture
Organization of the United Nations/World Health Organization Global Forum
for Food Safety Regulators, October 2004).

15The Netherlands established a lead agency to enforce food safety
legislation. The other six countries established a lead agency for risk
management. Risk management is the process, distinct from risk assessment,
of weighing policy alternatives, in consultation with all interested
parties, considering risk assessment and other factors relevant for the
health protection of consumers and for the promotion of fair trade
practices, and, if needed, selecting appropriate prevention and control
options. However, some countries, such as Germany, have separated
responsibility for risk assessment-the scientifically based process
consisting of hazard identification, hazard characterization, exposure
assessment, and risk characterization-from risk management by placing risk
management and risk assessment responsibilities in separate entities.

According to a 1998 National Research Council report,16 an effective food
safety system protects and improves the public health by ensuring that
foods meet science-based safety standards through the integrated
activities of the public and private sectors. This report also addresses
efficiency, stating the greatest strides in ensuring food safety from
production to consumption can be made through a scientific risk-based
system that ensures that surveillance, regulatory, and research resources
are allocated to maximize effectiveness. Public concern about food safety
became an important issue in several industrialized countries during the
1990s when bovine spongiform encephalopathy (BSE), commonly known as mad
cow disease, was confirmed in large numbers of cattle.17 In addition to
improving effectiveness and efficiency and responding to public concern
about food safety, some EU countries were further prompted to consolidate
by the need to comply with recently approved EU food safety legislation
that becomes effective, in large part, January 1, 2006. The new
legislation places more requirements on EU member countries. For example,
each EU member country will be required to submit and annually update a
plan for the implementation of the new law and to report annually on the
implementation of that plan.

Regarding consolidation approaches, each country established a single
agency to lead food safety management or enforcement of food safety
legislation. Each country modified its existing legal framework to give
legal authority and responsibility to the new food safety agency. However,
countries' approaches in consolidating their food safety systems varied,
particularly with respect to how comprehensively food safety functions
were consolidated. For example, Denmark centralized its system by creating
a new federal agency in which it consolidated almost all its food safety
functions and activities, including food inspections, which were
previously distributed among several federal and local government
agencies. On the other hand, in Germany, which established a new lead food
safety agency, the 16 federal states continue to be responsible for
oversight of food inspections performed by local governments. Germany's

16Ensuring Safe Food From Production to Consumption, National Research
Council (Washington, D.C.: 1998).

17BSE is an always fatal, neurodegenerative disease that has been found in
cattle in numerous countries. Cattle contract the disease through animal
feed that contains protein derived from the remains of diseased animals.
Scientists generally believe an equally fatal disease in humans-known as
variant Creutzfeldt-Jacob Disease (vCJD)-is linked to eating beef from
cattle infected with BSE.

new food safety agency functions as a coordinating body to lead food
safety management, including formulation of general administrative rules
to guide the federal states' implementation of national food safety laws.

In reorganizing their food safety systems, officials from several
countries cited challenges in two areas. First, many countries faced a
similar decision regarding whether to place the new agency within the
existing health or agriculture ministry or establish it as a stand-alone
agency while also determining what responsibilities the new agency would
have. A second challenge, cited by officials in several countries, was
helping employees assimilate into the new agency's culture and support its
priorities.

Although countries have not formally analyzed consolidation results, the
government officials and stakeholders we interviewed in each of the seven
countries cited improvements in food safety system operations and stated
that the net effect of consolidation has been or will likely be positive.
None of the countries has conducted an analysis to measure the
effectiveness and efficiency of its consolidated food safety system
relative to that of the previous system. For example, officials stated
that they could not determine whether their country's consolidation had
resulted in public health benefits, such as reduced foodborne illness,
because consolidation was only one of many factors that could affect the
frequency of foodborne illness. Furthermore, it may be too early to fully
assess the benefits of consolidation for several of the countries, as
their countries' new food safety structures have been functioning for 3
years or less. Although limited, some information on costs and benefits
was available. As expected, most countries incurred start-up costs, which
included, for example, the acquisition of buildings and purchases of
laboratory equipment. Some countries experienced a temporary reduction in
the quantity of food safety activities performed due to
consolidation-related disruptions. However, government officials in each
of the seven countries believe the benefits of their consolidations have
exceeded or will likely exceed the costs. In particular, these officials,
as well as food industry and consumer stakeholders in each country,
consistently stated that consolidation of their food safety systems has
led to significant qualitative improvements in food safety operations that
enhance effectiveness or efficiency. These improvements include the
reduction of overlapping food safety activities, such as inspections of
food establishments by various agencies. (Figure 2 summarizes each
country's improvements in food safety operations as cited by government
officials, food industry stakeholders, or consumer stakeholders.)
Moreover, government officials in Canada, the Netherlands, and Denmark
stated that some cost savings

may be achieved as a result of changes that have already taken place or
are expected from planned changes needed to complete their consolidation
efforts.

Figure 2: Improvements in Food Safety Operations Cited by Government
Officials or Stakeholders

                                   Countries

G = Government official
S = Industry or consumer stakeholder

GS = Both government official and stakeholder

Source: GAO analysis of information from officials and stakeholders.

Note: The improvements listed are based on structured interviews with food
safety officials and food industry and consumer stakeholders.

Figures 3 through 9 show summary information on each country's reasons for
consolidation, entities responsible for food safety before and after

consolidation, challenges, and start-up18 and other consolidation-related
costs, as well as examples of consolidation benefits. This information was
provided by government officials and food industry or consumer
stakeholders. For more detailed information on each country, see
appendixes II through VIII.

18In consolidating their food safety systems, six of the seven countries
incurred start-up costs in addition to ongoing operational costs. In these
countries, the newly created consolidated food safety agencies needed
additional funding to establish a fully operational food safety system.
Although some countries provided documentation regarding these startup
costs, we were not able to determine the reliability of this information.

Figure 3: Summary of Canada's Food Safety System Consolidation

Reasons for 	Improve effectiveness (e.g., consistency of inspections and
clarification of responsibilities). Improve efficiency by reducing
duplication and overlap in food safety activities. Reduce federal
spending.

consolidation

Entities Inspections: (1) Health Canada; (2) Agriculture and Agri-Food
Canada; and (3) Fisheries and Oceans Canada.
responsible for
food safety before Food policy and risk assessment: (1) Health Canada; (2)
Agriculture and Agri-Food Canada; and (3) Fisheries and
consolidation Oceans Canada.

Entities In 1997, Canada reorganized its food safety system. Inspections:
Canadian Food Inspection Agency (CFIA), a separate
responsible for regulatory agency (departmental corporation) whose
president reports directly to the Minister of Agriculture and Agri
food safety after Food Canada. Public health policy and standard setting:
Health Canada.
consolidation

Responsibilities of CFIA: All inspection/compliance activities, including
inspections of imported/domestic products, laboratory and diagnostic food
safety support, crisis management and product recalls, and export
certification.a Health Canada: Public health policy and standard
agency(ies) after setting, including research, risk assessment, and
setting limits on the amount of a substance allowed in a food product.b
consolidation

Challenges (1) Assignment of specific food safety roles and
responsibilities: To address this challenge, the CFIA and Health Canada
jointly developed a food safety functions matrix to clearly define
responsibilities. (2) Assimilating employees into a new agency's culture
and priorities and a high retirement rate among former employees of the
health, agriculture, and fisheries departments: Officials said it is
important to plan for the merging of organizational cultures and bring the
workforce into a dialogue on the new organization's vision and objectives.

Start-up and other (1) According to Canadian officials, in fiscal year
1998 Canada spent $25 million Canadian ($18 million U.S.) in start-up
consolidation-funds to consolidate food safety inspections within the
CFIA. This amount was about 7 percent of the agency's fiscal year
related costs cited 1998 budget.
by officials and (2) According to labor officials, productivity briefly
declined shortly before and immediately after consolidation. In addition,
stakeholders according to government officials, retirements resulted in a
temporary loss of experience.

Examples of (1) Financial savings: A senior CFIA official stated that
during the agency's first 2 years, fiscal year 1997 and fiscal year
benefits cited by 1998, the consolidation reduced food safety operating
expenditures 10 percent relative to preconsolidation food safety officials
and spending. Noting that no comprehensive analysis has been performed to
determine the net impact of the consolidation stakeholders on food safety
expenditures, the official based this statement on his knowledge of food
safety operating expenditures

before and after consolidation.

(2) 	Reduced overlap in inspections: Inspectors have been trained to
perform more than one type of food safety inspection. This
cross-utilization of inspectors enables one inspector to complete
inspections of a food-processing facility that were previously performed
by two or more inspectors. As a result, the number of visits made to the
same food-processing facility has been reduced.

(3) 	Clearer responsibilities, better coordination, and reduced gaps in
oversight: Officials said consolidation has clarified food safety
responsibilities, and, as a result, the food safety system's ability to
mitigate risk and to respond to a potential crisis has improved. They
cited the response to managing the 2003 BSE crisis as an effective
reaction to a problem, stating that food safety personnel knew their
specific responsibilities and responded in a timely, thorough manner.
Officials said the effectiveness of this response can, in part, be
attributed to the universal coordination of animal health and food safety
that has resulted from the consolidation.c

Source: GAO analysis of information from Canadian officials and
stakeholders.

aThe Canadian Food Inspection Agency is also responsible for food quality
assurance inspections and animal and plant disease control.

bHealth Canada's responsibilities include research, risk assessment and
standard setting in relation to the nutritional quality of foods marketed
in Canada.

cAn international review supported this assessment, stating the
investigation was comprehensive, thorough, and timely. In addition, food
industry stakeholders said the government's response to BSE was very
effective.

Figure 4: Summary of Denmark's Food Safety System Consolidation

Reasons for Improve effectiveness (e.g., communications with consumers and
consistency of inspections). Improve efficiency (e.g., consolidation move
resources to high-risk areas and reduce overlaps in responsibilities).

Entities Inspections: (1) Ministry of Agriculture; (2) Ministry of
Fisheries; and (3) municipalities.
responsible for
food safety before Standard setting: (1) Ministry of Health; (2) Ministry
of Agriculture; and (3) Ministry of Fisheries.

consolidation

Entities In 1997, the Danish government created the Danish Veterinary and
Food Administration (DVFA) as an agency of the responsible for Ministry of
Food, Agriculture, and Fisheries. Inspections were consolidated within
DVFA in 1999 and 2000. The food safety after organization was fully in
place by January 2000. In an August 2004 governmental reorganization, DVFA
was moved to the consolidation Ministry of Family and Consumer Affairs.

Responsibilities of The DVFA is responsible for almost all food safety
responsibilities. Exceptions are the Plant Directorate, which is
food safety responsible for animal feed inspections, and the Directorate
for Fisheries, which is responsible for inspection of fish on
agency(ies) after ships. These two agencies are in the Ministry of Food,
Agriculture, and Fisheries.
consolidation

Challenges (1) Municipal inspectors, who were accustomed to being part of
much smaller systems, were transferred into the DVFA. To foster the
development of a common culture and reinforce the new agency's mission,
DVFA moved employees to centralized locations and held monthly meetings.
(2) Having adequate funding for start-up costs, which were originally
underestimated.

Start-up and other (1) According to officials, start-up costs associated
with Denmark's consolidation were about 204.5 million Danish kroner
consolidation-(about $26 million U.S.), or approximately 21 percent of
DVFA's fiscal year 2000 budget. The start-up funds were spent
related costs cited for new data processing systems, laboratory equipment,
staff compensation, and buildings.
by officials and (2) Officials said the number of inspections performed
declined from 1999 to 2000 while DVFA was being formed, but began
stakeholders to increase after 2000.

Examples of benefits cited by officials and stakeholders

(1) 	Reduced overlap in inspections: Inspectors have been trained to
perform more than one type of food safety inspection. This
cross-utilization of inspectors enables one inspector to complete the
inspection of a single food processing facility, which previously might
have been performed by two or more inspectors, and reduces the number of
visits made to the same food processing facility.

(2) 	Frequency of inspections based on risk: Officials stated
consolidation and accompanying reform of food safety laws facilitated
risk-based inspections. The frequency of most inspections is now based on
an individual food product's safety risk and on an individual company's
food safety record, not on agencies' jurisdiction, as was the case before
consolidation. As a result, the frequency of inspections at some food
processing plants and of lower risk food products has been reduced, making
more resources available for inspections of higher risk companies and
foods.

(3) 	More consistent or timely enforcement of food safety laws and
regulations: Reducing inconsistency in inspections resulting from the
sharing of food safety responsibilities among three ministries and local
authorities was one of the chief reasons Denmark decided to consolidate
its food safety system. According to officials, moving nearly all food
inspection responsibilities to the DVFA, establishing uniform guidelines,
and training inspectors greatly reduced these inconsistencies in
enforcement. Officials added that they expect this increased consistency
in inspections will make it easier for them to comply with new EU food
safety legislation.

(4) 	Possible financial savings: Officials said consolidation enabled a
reduction in the number of microbiological laboratories from 11 to 6. As a
result, they estimate the annual operating costs of microbiological
laboratories have been reduced considerably. In addition, a senior
official stated that consolidation of regional and local offices has
reduced administrative expenses.

Source: GAO analysis of information from Danish officials and
stakeholders.

Figure 5: Summary of Germany's Food Safety System Consolidation

Reasons for Address public concerns about food safety stemming from the
discovery of BSE in Germany in 2000 and earlier food consolidation safety
problems. Improve compliance with EU food safety legislation.

Entities Research, risk assessment, and communication: (1) Federal
Ministry of Health and (2) Federal Ministry of Food, Agriculture
responsible for and Forestry.
food safety before

consolidation Implementation of federal legislation and oversight of
inspections: Sixteen federal states.

            Inspections: Municipalities and other local governments.

Entities Federal Ministry of Consumer Protection, Food, and Agriculture.
This ministry has two new agencies. In 2002, Germany responsible for
established a coordinating body, the Federal Office of Consumer Protection
and Food Safety, to lead food safety food safety after management. In
addition, the Federal Institute for Risk Assessment was established in
2002 to separate scientific risk consolidation assessments from decision
making.

Responsibilities of The Federal Office of Consumer Protection and Food
Safety interacts with the EU, coordinates food safety activities, and food
safety develops general rules to guide the implementation of national food
safety laws by the German federal states.

agency(ies) after The Federal Institute for Risk Assessment performs risk
assessments and provides scientific advice.consolidation

The German federal states continue to be responsible for enforcement and
oversight of municipalities' inspections.

Challenges	According to officials, negotiations between the federal
government and the federal states concerning reform of food safety law
have been complicated, as some reforms that would give the federal
government increased authority would require constitutional changes,
according to officials.

Start-up and other Germany's consolidation did not require significant
start-up spending.
consolidation
related costs cited
by officials and
stakeholders

Examples of benefits cited by officials and stakeholders

Streamlined communications and improved crisis management: Officials said
that the consolidation has resulted in enhanced communication between the
federal government and the federal states, as well as providing more
complete food safety information to consumers. As an example, they cited
the response of the Federal Ministry of Consumer Protection, Food, and
Agriculture and its two new agencies to the emergence of acrylamidea in
food as a major public concern. In responding to the acrylamide issue, the
federal government established a food risk forum to enable state food
safety agencies, the food industry, and consumer organizations to more
easily communicate with each other. In addition, acrylamide questions and
answers were put on the Internet to address consumer concerns. According
to officials, before the consolidation, coordinated communication happened
only sporadically, and at times the federal agencies and the federal
states disseminated conflicting information. Officials believe these
streamlined communications are beginning to restore consumers' confidence
in the food safety system. A consumer organization representative agreed
that the consolidation had improved communication during food crises.

Source: GAO analysis of information from German officials and
stakeholders.

aResearch has found that acrylamide, a carcinogen, may be formed in
starch-containing foods when they are baked or fried.

Figure 6: Summary of Ireland's Food Safety System Consolidation

Reasons for Address public concern about food safety stemming from food
scares and the detection of BSE. Consumers perceived the

consolidation 	Ministry of Agriculture and Food, which was responsible for
inspecting farms and meatpacking plants, to favor the interests of the
food industry over consumer protection. Address agricultural and food
industry concerns about reductions in beef exports resulting from the BSE
detection.

Entities (1) Department of Agriculture and Food; (2) Department of
Environment; (3) Department of Public Enterprise; (4) Marine
responsible for Department; (5) Department of Enterprise, Trade and
Employment; (6) Department of Health and Children. Eight
food safety before regional health boards. Thirty-three local authorities.
consolidation

According to officials, these entities' activities were not coordinated
and, no independent accountability system existed to provide assurance of
enforcement of food safety laws.

Entities (1) Food Safety Authority of Ireland (FSAI). In 1998, to
coordinate and oversee the activities of the existing food safety
responsible for entities, Ireland established the FSAI. FSAI is an
independent food safety agency that reports to the Minister of Health
food safety after and Children. (Ministries, health boards, and local
authorities continue to perform inspections.)
consolidation

Responsibilities of The FSAI has risk assessment, management, and
communication responsibilities. In addition, it is responsible for the
food safety enforcement of food safety legislation. It carries out this
responsibility by establishing and overseeing service contracts with
agency(ies) after some of the previous food safety entities. Under these
contracts, the previous food safety entities continue to perform
consolidation functions such as inspections.

Challenges (1) In deciding where to place the new agency, FSAI, within the
government, Ireland chose to place the agency under its existing Ministry
of Health and Children specifically to separate food safety
responsibilities from food and agriculture promotion efforts, which is the
responsibility of the Department of Agriculture and Food. (2) FSAI also
had to bring about the clear understanding that the food industry has the
primary responsibility for food safety.

Start-up and other Officials stated Ireland spent approximately 1.5
million Irish pounds ($2 million U.S.) for start-up costs in fiscal year
1999.a
consolidation-The start-up funds were used for temporary staff, renting
office space, and operational expenses.
related costs cited
by officials and
stakeholders

Examples of benefits cited by officials and stakeholders

(1) 	Single contact for consumer and industry clients: Officials cited
improved relations with stakeholders as a result of providing consumers
with a single agency contact and forming a council group that encompassed
both industry and consumers to discuss the concerns faced by each group.
According to the officials, this level of communication between the
government, industry, and consumers had not existed prior to the
consolidation when no single agency had food safety as its central
mission.

(2) 	Improved accountability and transparency: According to officials, the
establishment of Ireland's lead food safety agency, the FSAI, has made the
many entities that have food safety responsibilities more accountable for
the performance of those responsibilities. Before consolidation, food
safety functions, most notably inspections, were the responsibility of
over 50 entities across the government with no central government
authority to coordinate or monitor the performance of these entities.
Consolidation made the FSAI responsible for enforcing food safety
legislation and tracking the many entities' food safety activities. FSAI
uses service contracts with each of the government departments, local
authorities, and regional health boards to reach agreement with the
entities on performance standards, including methods of inspection and the
number of inspections to be conducted. FSAI officials meet formally at
least three times a year with each entity's liaison to facilitate
monitoring of the service contracts. Separate audits are conducted to
verify compliance with their contract requirements.

Source: GAO analysis of information from Irish officials and stakeholders.

aIreland's start-up costs as a percentage of its total food safety budget
could not be estimated.

Figure 7: Summary of the Netherlands' Food Safety System Consolidation

Reasons for Address public concern about food safety resulting from BSE
and other food safety crises. Improve effectiveness and/or consolidation
efficiency by reducing overlap and improving coordination within the food
safety system.

Facilitate compliance with EU food safety legislation.

Entities (1) Inspectorate for Health Protection and Veterinary Public
Health within the Ministry of Public Health, Welfare and responsible for
Sports.

food safety before (2) National Inspectorate Service for Livestock and
Meat within the Ministry of Agriculture, Nature, and Food Quality.
consolidation

Entities Food and Consumer Product Safety Authority. In 2002, the
Netherlands established the Food and Consumer Product responsible for
Safety Authority, an independent agency within the Ministry of Public
Health, Welfare and Sports. In 2003, the new agency food safety after was
moved to the Ministry of Agriculture, Nature and Food Quality. The new
agency includes both inspection offices, consolidation which are to be
consolidated by January 1, 2006.

Responsibilities of According to officials, the Food and Consumer Product
Safety Authority's core responsibilities cover three areas: (1) risk food
safety assessment and research - to identify and analyze potential threats
to the safety of food and consumer products; (2) agency(ies) after
enforcement - to ensure compliance with legislation for meat, food, and
consumer products, which may include non-food consolidation items; and (3)
risk communication - to provide information concerning risk and risk
reduction, based on accurate and

reliable data.

Challenges (1) 	Determining the responsibilities and authorities the new
food safety agency would have and the ministry in which to place the new
agency.

(2) Increased employee attrition.

Start-up and other Officials estimate the Netherlands' Food and Consumer
Product Safety Authority will spend approximately 5 million euros ($6
consolidation-million U.S.) on its ongoing consolidation process, or about
3 percent of its 2004 budget.
related costs cited
by officials and
stakeholders

Examples of benefits cited by officials and stakeholders

(1) 	Reduced overlap in inspections: Before the consolidation, two
inspection offices from separate ministries had responsibility for
inspecting slaughterhouses. After consolidation, both inspection offices
were placed under the new food safety agency, and now only one inspection
office inspects slaughterhouses. In addition, inspectors are being trained
to perform more than one type of food safety inspection. This
cross-utilization of inspectors will enable one inspector to complete the
inspection of a single food-processing facility which was previously
conducted by two or more inspectors and reduce the number of visits made
to the same food-processing facility.

(2) 	Possible financial savings: Officials anticipate consolidation of
inspectionsa will result in financial savings derived from an expected 25
percent reduction in administrative and management personnel and from
selling excess property. The Netherlands has also begun to cross-utilize
inspectors, training them to perform more than one type of inspection, and
has eliminated duplication of food safety inspections by placing its two
inspection offices under one agency. Together, these changes are expected
to reduce food safety expenditures. A senior Dutch official stated that
having one agency be responsible for the entire food supply chain will
result in potential savings.

(3) 	Single contact for consumer and industry clients: Industry
stakeholders said that before the creation of the Food and Consumer
Product Safety Authority, it was unclear to consumers which agency had
responsibility for various food safety activities, stakeholders said it is
now very clear that the new agency has responsibility for all food safety
functions.

Source: GAO analysis of information from Dutch officials and stakeholders.

aThe Netherlands plans to merge its two inspection offices into one
national inspection office within its food safety agency, the Food and
Consumer Product Safety Authority.

Figure 8: Summary of New Zealand's Food Safety System Consolidation

Reasons for 	Improve effectiveness in several areas, including
coordination within the food safety system and eliminate inconsistencies
in the country's oversight of domestic food, imports, and exports.

consolidation

Entities (1) Ministry of Health.

responsible for (2) Ministry of Agriculture and Forestry.

food safety before In addition, Food Standards Australia New Zealand, a
trans-Tasmana independent statutory authority established under

consolidation	Australian law, sets standards for composition, labeling,
and contaminants for all foods produced or imported for sale in New
Zealand and Australia.

Entities New Zealand Food Standards Authority (NZFSA). In 2002, New
Zealand established NZFSA, a single, independent food responsible for
safety agency. The new agency is a semi-autonomous body attached to the
Ministry of Agriculture and Forestry. In food safety after addition, Food
Standards Australia New Zealand continues to set standards for
composition, labeling, and contaminants. consolidation

Responsibilities of NZFSA has farm-to-table responsibilities. It develops
policy advice for the government and performs public outreach,
food safety surveillance, standards setting, enforcement, research, and
risk assessments.
agency(ies) after
consolidation

Challenges (1) 	Where to place the new agency within the government:
According to officials, the NZFSA's semi-autonomous status is intended to
provide a level of separation from producers sought by the New Zealand
public.

(2) 	Adjustment to new organizational culture: Officials stated that
reassigning employees to the new food safety agency was moderately
challenging because some employees from the larger organizations,
particularly those from the Ministry of Health, had difficulty
assimilating into the culture of the new agency. Approximately 100
employees moved from the Ministry of Agriculture and Forestry and 12 staff
moved from the Ministry of Health into the new food safety agency.

Start-up and other New Zealand officials stated that during 2002 New
Zealand spent about $2 million New Zealand (about $1 million U.S.) on
consolidation-consolidation start-up costs.b The start-up funds were
primarily used for moving expenses, development of new
related costs cited communication and branding materials, temporary
personnel, and rented office space.
by officials and
stakeholders

Examples of Streamlined communication: According to industry stakeholders,
the consolidation has increased and streamlined

benefits cited by communication between the food industry and the new food
safety agency. They said that before the creation of NZFSA, such

officials and communication was not as good as it could have been because
two ministries had food safety responsibilities, neither placed

stakeholders	food safety as a top priority, and coordination between the
two ministries was weak. As a result of the increased and streamlined
communication offered by the consolidated food safety system, stakeholders
said that the new food safety agency is more responsive to food safety
crises. They said the new agency established a network that quickly
delivers information to notify the public of food safety issues. This
increased interaction has made industry more confident in how the
government handles food safety matters. New Zealand's consumer
stakeholders told us that streamlined communication is a result of the
consolidation and added that this improved communication has improved
consumer confidence.

Source: GAO analysis of information from New Zealand officials and
stakeholders.

aThe Trans-Tasman Mutual Recognition Arrangement is an arrangement between
the Commonwealth, State and Territory Governments of Australia and the
Government of New Zealand. According to its 1998 guide, the Arrangement
allows goods to be traded freely between New Zealand and Australia.

bNew Zealand has not compiled information on its total 2002 food safety
spending because several entities had food safety responsibilities.
According to officials, NZFSA's fiscal year 2004-2005 budget is about $78
million New Zealand (about $53 million U.S.).

Figure 9: Summary of the United Kingdom's Food Safety System Consolidation

Reasons for 	Address public concerns about food safety stemming from (1)
the discovery of BSE and other food safety crises and (2) a perception
that food safety regulators favored the food industry at the expense of
consumer protection.

Consolidation

Entities (1) Ministry of Agriculture, Fisheries, and Food. Within this
ministry, the Meat Hygiene Service performed meat responsible for
inspections.

food safety before (2) Department of Health. (No link existed between the
central government and local entities that conducted food
safetyconsolidation inspections.)

Entities Food Standards Agency (FSA). In 2000, the United Kingdom
established FSA as its lead food safety agency. FSA is responsible for
independent of other government departments.

food safety after The Meat Hygiene Service was moved from the Ministry of
Agriculture, Fisheries, and Food to FSA. In addition, some consolidation
employees were moved from the Ministry of Agriculture, Fisheries, and Food
and the Department of Health to FSA.

Local entities continue to be responsible for inspections of nonmeat
products.

Responsibilities of According to officials, FSA is responsible for
scientific risk assessments, research, risk management, policy
development, food safety including negotiation in the EU on behalf of the
United Kingdom, standard setting, education, and public outreach. It has
agency(ies) after audit authority and reserve powersa over local entities'
inspections. Before the creation of FSA, the central government
consolidation performed only very limited education and public outreach
and did not perform oversight of local entities.

Challenges Deciding which responsibilities to place in the new food safety
                                    agency.

Start-up and other In 2000, FSA had start-up costs totaling approximately
9 million pounds sterling (about $14 million U.S.), or about 8 percent
consolidation-of the agency's budget for that year, according to British
food safety officials.
related costs cited
by officials and
stakeholders

Examples of Improved accountability and transparency: According to British
officials, establishing a lead food safety agency to consolidate benefits
cited by food safety functions in the central government has made local
authorities more accountable for food safety inspections, and officials
and the results of food safety inspections are more transparent to the
public and the central government. Officials stated that stakeholders
before the establishment of FSA, no criteria existed for how local food
safety inspections were to be performed, and there

was no requirement to report the results of those inspections to the
central government. Inspection records were kept at the local level. FSA
has authority to audit food safety inspections conducted by local
entities, and these entities must provide FSA with statistical information
on their food safety inspections. According to officials, this information
is made available to the public on a quarterly basis.

  Source: GAO analysis of information from British officials and stakeholders.

aAccording to an FSA official, reserve powers range from providing help
and guidance by directing the way in which the local authority operates to
performing the local authority's services.

Concluding Observations

Although different in many respects, the seven countries' experiences
provide information on the reform and consolidation of food safety systems
that can be useful to U.S. policymakers. While the seven countries had to
overcome challenges, their experiences show that reforming and
streamlining food safety systems is possible when a consensus exists among
government agencies, the food industry, and consumer organizations. As we
learned from food safety officials and industry and consumer stakeholders
in each country we reviewed, such reforms may

result in benefits such as reducing overlaps in food safety inspections
and basing the frequency of inspections on the risks posed by specific
products. We have reported in the past that the federal food safety system
in the United States could benefit from statutory and organizational
reforms. As Congress and other policymakers consider the advantages and
disadvantages of streamlining multiple existing food safety statutes into
a uniform and risk-based framework and whether to consolidate federal food
safety functions under a single agency, these countries' lessons may offer
useful information.

Comments from the We provided relevant excerpts from a draft of this
report to officials of food

safety agencies in Canada, Denmark, Germany, Ireland, the
Netherlands,Seven Countries New Zealand, and the United Kingdom for their
review. The officials either Examined replied that they had no technical
comments or provided technical

corrections, which we incorporated into the report as appropriate.

Agency Comments and Our Evaluation

Although this report does not evaluate HHS's or USDA's food safety
programs and, therefore, makes no recommendations to the agencies, we
provided a draft copy to HHS and USDA for review and comment. In
commenting on this report, both HHS and USDA stated that U.S. food safety
agencies are working together effectively.

HHS noted that our report provides limited quantitative data on the
results of each country's consolidation. The report clearly states that
the information presented was obtained primarily through structured
interviews with high-level government officials and food industry and
consumer stakeholders from each of the seven countries we reviewed. In
addition, our report acknowledges that these officials provided limited
quantitative data; when it was provided to us, we included it in the
report. Our report also acknowledges that none of the countries has
conducted a formal analysis to compare the effectiveness and efficiency of
its consolidated food safety system with that of the previous system. HHS
also commented that the countries included in our report have smaller food
and agriculture industries than the United States. We agree, and our
report highlights such differences in table 1, which shows that the seven
countries have smaller economies and less total food consumption than the
United States. Our report also points out, however, that these countries
are similar to the United States in that they are high-income countries
where consumers have high expectations for food safety. Finally, HHS

commented that the report does not identify the agencies that are
responsible for foodborne illness surveillance in each of the countries we
reviewed. We have added a footnote to indicate that the report does not
contain that information. HHS also provided technical comments, which we
have incorporated in the report as appropriate. HHS's comments are
presented in appendix IX.

In its comments, USDA stated that the report does not contain rigorous
cost-benefit analyses or quantitative data on the public health effects of
the countries' consolidations, such as changes in foodborne illness rates.
Our report clearly acknowledges that we obtained limited quantitative
information and that none of the countries has conducted an analysis to
compare the effectiveness and efficiency of its consolidated food safety
system with that of the previous system. Specifically, with regard to the
effect of consolidation on public health benefits, the report states that
officials told us they could not determine whether their country's
consolidation had reduced foodborne illness because consolidation was one
of many factors that could influence the frequency of foodborne illness.
USDA also stated that the report does not contain quantitative data on
reorganization costs. This statement is incorrect. All but one of the
seven countries provided information on the costs of reorganization, which
the report presents in figures 3 through 9. Similar to HHS, USDA commented
that the countries we reviewed have much smaller populations and also
differ from the United States in climate and agricultural production. Our
report identifies differences of this type in table 1. The report points
out, however, that these countries and the United States have at least one
important similarity: they are high-income countries where consumers have
high expectations for food safety. As a result, we believe the
consolidation experiences of the countries reviewed have applicability to
the United States. USDA also provided technical comments, which we
incorporated into the report as appropriate. USDA's comments are included
in appendix X.

We are sending copies of this report to the appropriate congressional
committees, the Secretaries of Agriculture and of Health and Human
Services, and other interested parties. We will also make copies available
to others upon request. In addition, this report will be available at no
charge on the GAO Web site at http://www.gao.gov.

If you or your staffs have any questions about this report, please call me
at (202) 512-3841. Key contributors to this report are listed in appendix
XI.

Robert A. Robinson Managing Director, Natural Resources and Environment

Appendix I

Scope and Methodology

This report describes the approaches the seven countries have taken in
consolidating food safety functions, the challenges they faced, and the
results of the countries' efforts, including benefits and costs cited by
government officials and industry or consumer stakeholders.

For the purposes of this report, we defined consolidation as the transfer
of responsibility and resources for performing a food safety function from
two or more agencies to a single agency.

To identify countries that have consolidated their food safety systems, we
interviewed USDA and FDA officials, reviewed a 2001World Health
Organization report on how countries have organized their food safety
systems,1 and reviewed the Internet sites of countries' food safety
agencies. We selected a judgmental sample of seven countries for our
review based on the following criteria: USDA and FDA officials agreed that
these countries have consolidated, the countries have high per capita
income, and the countries have consolidated functions of their food safety
system within the last 10 years.

To address our objective, we examined the seven countries' efforts to
streamline and consolidate their food safety systems, including the
benefits and costs that resulted, as cited by government officials. We
conducted structured interviews with senior government officials from food
safety agencies and with representatives of food industry or consumer
organizations in each country, reviewed and analyzed the documents they
provided, and reviewed World Health Organization and GAO reports. We also
met with European Union (EU) food safety officials to discuss how the EU's
food legislation is affecting its member countries' decisions to
consolidate, as well as how the EU interacts with food safety agencies in
member countries.

The information on countries' food safety systems in this report,
including descriptions of laws,2 is based almost exclusively on interviews
with and documentation provided by high-level food safety officials as
well as food industry or consumer stakeholders from the seven countries we
examined.

1World Health Organization, Improved Coordination and Harmonization of
National Food Safety Control Services (World Health Organization Regional
Office for Europe, Copenhagen, Denmark, 2001).

2We did not perform independent analysis of those laws or attempt to
independently assess their intent.

Appendix I Scope and Methodology

Most of the information we obtained was qualitative. To the extent
possible, we corroborated the qualitative information provided by
government officials by interviewing food industry and consumer
organization stakeholders. We obtained very limited quantitative
information. We asked government officials questions intended to help us
assess the reliability of the quantitative information they provided, but
we could not determine the reliability of most of this information because
of constraints on the amount of time the countries' food safety officials
could devote to our study. Although we could not assess the quantitative
information's reliability, we are reporting it in order to provide
descriptive information to inform policymakers in the United States about
the various approaches, challenges, and benefits that countries' officials
identified to us regarding their consolidation efforts.

The data in table 2 on selected countries' population, gross domestic
product, food consumption, income, and consumer spending were used for
background purposes and were not verified.

We conducted our work from April 2004 through December 2004 in accordance
with generally accepted government auditing standards.

Appendix II

                   Canada's Food Safety System Consolidation

In 1997, Canada consolidated its food inspection activities with the
creation of the Canadian Food Inspection Agency. Food safety standard
setting, research, and risk assessment were consolidated within Health
Canada.

Reasons for Consolidating Canada consolidated its food safety system to
(1) improve effectiveness by

Food Safety Responsibilities	making inspections and enforcement more
consistent, clarifying responsibilities, and enhancing reporting to the
Canadian parliament, (2) improve efficiency by reducing duplication and
overlap in food safety activities, and (3) reduce federal spending.

Responsibilities and Structure Before and After Consolidation

Before Canada consolidated its food safety system, its food safety
inspection, food policy, and risk assessment responsibilities were shared
by three separate entities-Health Canada, Agriculture and Agri-Food
Canada, and Fisheries and Oceans Canada.

In 1997, the Canadian parliament approved the Canadian Food Inspection
Agency (CFIA) Act. All food safety inspection activities were assigned to
CFIA, a separate regulatory agency whose president reports to the Minister
of Agriculture and Agri-Food Canada. CFIA is responsible for all food
safety inspections and related activities, including inspections of
imported and domestic products, export certifications, laboratory and
diagnostic support, crisis management, and product recalls. CFIA is also
responsible for food quality assurance inspections and animal health and
plant disease control. Canada has adopted a comprehensive farm-to-table
approach to food safety responsibilities.

Public health policy and standard-setting responsibilities including
research, risk assessment, and setting limits on the amount of a substance
allowed in a food product, were consolidated within Health Canada.1 With
the placement of food safety inspections and related activities in CFIA
and risk assessment in Health Canada, inspection responsibilities were
separated from risk assessment to allow for an independent scientific risk
assessment process.

1Health Canada's responsibilities include research, risk assessment and
standard setting in relation to the nutritional quality of foods marketed
in Canada. For example, Health Canada is responsible for nutrition
labeling, health claims, and nutrient content claims.

             Appendix II Canada's Food Safety System Consolidation

Legislation 	In 1997, the Canadian Food Inspection Agency Act created the
agency and gave it authority to implement existing food safety laws.
Additional legislative reform intended to increase the food safety
system's effectiveness and efficiency beyond the gains already achieved
was introduced in the Canadian parliament in November 2004.2 According to
CFIA, under this proposed legislation, the authorities for CFIA inspectors
contained in eight commodity-specific laws would be strengthened and made
consistent. In addition, the law would give CFIA additional inspection and
enforcement authorities to protect the food supply, such as the authority
to hold products while awaiting test results.

Challenges	CFIA faced a challenge in helping staff adjust to a new
organization as its work force combined former employees from the health,
agriculture, and fisheries departments. According to officials, several
senior officials retired when CFIA was being formed. As a result, the
agency temporarily had less experience at the management level than would
have been optimal. Canadian officials told us it is important to plan for
the merging of organizational cultures and to bring the new work force
into a dialogue on the new organization's vision and objectives.

Employee unions were initially concerned that the consolidation would lead
to privatization of the food safety work force. According to a CFIA
official, these concerns decreased substantially when the work force
realized privatization was not planned. In addition, the official stated
that labor relations have improved because unions now only have to
interact with one food safety inspection agency instead of three.

In addition, assignment of responsibilities was a major obstacle during
the implementation phase of Canada's consolidation. To address this
challenge, Health Canada and CFIA jointly developed a food safety
functions matrix to clearly define responsibilities.

Annual Expenditures and According to a senior official, CFIA's fiscal year
2003 food safety spending Number of Employees was $360 million Canadian
($232 million U.S.). Spending for all of its activities-food safety,
animal health, and plant protection-was $517

2The CFIA Enforcement Act was introduced in the Canadian Parliament on
November 26, 2004.

Appendix II Canada's Food Safety System Consolidation

million Canadian ($334 million U.S.). User fees assessed on food
establishments financed a portion of this spending. These user fees for
food inspections have been frozen at about $40 million Canadian (about $26
million U.S.) since 1997 and in fiscal year 2003 accounted for about 11
percent of CFIA's food safety spending.

According to a Health Canada official, the fiscal year 2004 budget for
Health Canada's food program was about $42 million Canadian ($31 million
U.S.).

Reducing spending was one of Canada's objectives in consolidating its food
safety system. A senior CFIA official stated that during the agency's
first two years, fiscal years 1997 and 1998, the consolidation reduced
food safety operating expenditures by 10 percent relative to
preconsolidation food safety spending.3 The official based this statement
on his knowledge of food safety operating expenditures before and after
the consolidation. The official noted that Canada has not performed an
analysis on the effect of its consolidation on food safety expenditures.
According to the official, such an analysis would be difficult because (1)
the last audited preconsolidation quantification of food safety
expenditures was published in a 1994 report by Canada's Office of the
Auditor General and (2) in fiscal year 1997, when the CFIA was formed,
food safety, animal health, and plant health expenditures were not
separated in financial reports. The agency began separating these
expenditures in financial reports beginning in fiscal year 2000.

According to the CFIA official, CFIA's work force consisted of about 5,300
employees in fiscal year 2003. According to a Health Canada official, the
Health Canada food program had approximately 400 staff in fiscal year
2004.

3The official also noted that since fiscal year 1998,CFIA's total
expenditures for all of its activities-food safety, animal health, and
plant protection-have increased, but said this increased spending was not
related to the consolidation and attributed the increase to higher food
production, exports, and consumption, as well as increased spending in
response to threats from new animal and plant diseases and pests. While
some of these new plant pests and animal diseases, such as BSE, are food
safety issues, others, such as footand-mouth disease, an animal disease,
and the Asian long-horned beetle, an insect that harms trees, are not
related to food safety.

             Appendix II Canada's Food Safety System Consolidation

Stakeholder Reaction	The food industry stakeholders we interviewed were
consistently supportive of Canada's consolidation. Among the
consolidation-related benefits they cited were improved communications,
particularly with respect to food recalls; easier interaction with
regulators through having a single contact for enforcement and compliance;
fewer inspectors visiting processing plants; clarification of
responsibilities; and increased consistency in the enforcement of food
safety laws.

While expressing overall support for the consolidation, representatives of
some food industry organizations cited a need for more timely decision
making. For example, representatives of one organization said their member
companies, which, they said, often have more technical expertise than the
government authorities on specific matters, sometimes have to wait too
long for a decision on a food safety question and lose commercial
opportunities as a result. In addition, some industry representatives said
Health Canada's setting of standards should better reflect CFIA's ability
to enforce the standards.

Appendix III

                   Denmark's Food Safety System Consolidation

In 1997, Denmark consolidated its food safety system with the creation of
the Danish Veterinary and Food Administration.

Reasons for Consolidating Denmark consolidated its food safety system to
(1) improve effectiveness

Food Safety Responsibilities	in several areas, including communications
with consumers and consistency of inspections and (2) improve efficiency
in numerous ways, such as by moving resources to areas that present higher
risks and reducing overlaps in responsibilities.

Responsibilities and Structure Before and After Consolidation

Before Denmark consolidated its food safety system, responsibilities for
inspections were shared by multiple entities, including the Ministry of
Agriculture, the Ministry of Fisheries, and a large number of
municipalities. Standard-setting responsibilities were shared by the
Ministry of Health, the Ministry of Agriculture, and the Ministry of
Fisheries.

In 1997, the Danish government consolidated the multiple agencies'
activities into the Danish Veterinary and Food Administration (DVFA), an
agency of the newly formed Ministry of Food, Agriculture, and Fisheries.
Inspections were consolidated within the DVFA in 1999 and 2000. In August
2004, as part of a governmental reorganization, the Danish Veterinary and
Food Administration was moved to the newly created Ministry of Family and
Consumer Affairs.

The DVFA is responsible for almost all food safety responsibilities. For
logistical reasons, a few duties were not moved to the new agency in 1999
and 2000. These remaining duties are with the Plant Directorate, which is
responsible for animal feed inspections, and the Directorate for
Fisheries, which is responsible for inspections of fish on ships. These
two agencies are in the Ministry of Food, Agriculture, and Fisheries.
According to officials, the DVFA has farm-to-table food safety
responsibilities.

Denmark has separated risk management and risk assessment. The Danish
Institute for Food and Veterinary Research, a separate institute within
the DVFA, is responsible for research and risk assessment.

Legislation 	The Danish Food Act, adopted in 1998, reformed Danish food
safety law by replacing seven existing food laws with this single law. The
legislation

            Appendix III Denmark's Food Safety System Consolidation

harmonizes the regulation of food of animal origin and other food, and,
according to Danish officials, it is very similar to EU food legislation.

Challenges 	Officials said when bringing employees from several agencies
into a new organization, it is important to establish a common culture.
The consolidation involved over 2,000 employees, including about 500
municipal inspectors who were moved to the DVFA. To foster the development
of a common organizational culture, food agency officials moved employees
to centralized locations and established online discussion groups to
familiarize employees with the mission and culture of the organization. In
addition, the division heads in the regional offices held monthly meetings
with employees.

Moreover, officials stressed the need to have adequate funding for
start-up costs.

Annual Budget and Number According to officials, DVFA's budget for 2004
was 856 million Danish

of Employees 	kroner (about $142 million U.S.). About 61 percent of this
planned spending was to be financed by user fees assessed on food
establishments. User fees finance nearly all meat inspections.

Officials stated that DVFA had about 2,000 employees (1,820 full-time
equivalents) in 2004.

Stakeholder Reaction	The food industry and consumer organization
representatives we interviewed told us their organizations supported the
proposed consolidation and continue to support it. They stated that the
consolidation has improved the food safety system's effectiveness.
Improvements cited include more consistent enforcement of food safety
regulations, reduced overlap in inspections, streamlined communications,
clearer responsibilities, and improved service delivery as a result of
having a single contact. For example, a food industry representative
stated that having a single contact leaves no doubt about which authority
to approach when a problem or question arises. In addition, the
representative said Denmark's salmonella control program is an example of
a situation where the

Appendix III Denmark's Food Safety System Consolidation

consolidation's clearer responsibilities have been beneficial.1 Without
the consolidation, said the representative, this program probably would
have experienced conflicts between the health and agriculture ministries
and would not have been as successful.

User fees are also an important consideration for the Danish food
industry. As noted earlier, Danish food companies finance a significant
portion of DVFA's spending through payment of user fees. According to
industry officials, the payment of these fees motivated the food industry
to support reforms in the Danish food safety system that would hold down
inspection costs.

According to a consumer organization representative, the consolidation
made food safety inspections and enforcement of laws and regulations more
consistent. Before the consolidation, the representative said, many
municipal food safety entities had insufficient expertise and resources
and the central government's oversight of municipal food safety entities
was uneven. In addition, the representative stated that the consolidation
had facilitated the development of DVFA's online system to report the
results of inspections. The representative believes having access to
inspection reports has contributed to Danish consumers' continued high
confidence in the safety of their food.

1Salmonella bacteria, sometimes present in meat, are a source of foodborne
illness in humans.

Appendix IV

                   Germany's Food Safety System Consolidation

The German parliament approved the creation of the Federal Office of
Consumer Protection and Food Safety and the Federal Institute for Risk
Assessment in 2002.

Reasons for Consolidating Germany consolidated its food safety system in
response to public

Food Safety Responsibilities	concerns about food safety stemming from the
discovery of BSE in 2000 and other food safety problems. An additional
objective was improved compliance with EU food safety legislation.

Responsibilities and Structure Before and After Consolidation

Before Germany consolidated its food safety system, responsibilities for
research, risk assessment, and communication were shared by the Federal
Ministry of Health and the Federal Ministry of Food, Agriculture and
Forestry.1 Responsibilities for implementation of federal legislation and
oversight of inspections were shared by the sixteen federal German states,
and inspections were performed by municipalities and other local
governments.

In 2002, the creation of two new food safety agencies was approved by the
German Parliament. Both of the new agencies are in the Federal Ministry of
Consumer Protection, Food, and Agriculture.

The Federal Office of Consumer Protection and Food Safety, a coordinating
body, is responsible for leading food safety risk management. It serves as
Germany's contact point with the European Commission, including (1) acting
as a coordinator for Food and Veterinary Office audits of compliance with
EU food safety legislation and (2) implementing in Germany the European
rapid alert system for consumer health protection and food safety. In
addition, this agency's responsibilities include coordinating food safety
surveillance at the federal level and formulating general administrative
rules to guide the implementation of national food safety laws by the
German federal states. The federal states continue to be responsible for
implementation of food safety legislation and oversight of food
inspections performed by local governments.

1The Federal Environment Ministry had responsibility for industrial
contaminants, such as dioxin, in food. It continues to have this
responsibility.

Appendix IV Germany's Food Safety System Consolidation

The other new food safety agency is the Federal Institute for Risk
Assessment, whose responsibilities include providing impartial scientific
advice and support for the law-making activities and policies of the
federal government in all fields concerning food safety and consumer
health protection, except for animal diseases. The Federal Institute for
Risk Assessment performs risk assessments and communicates risk assessment
results to the general public. According to officials, this agency was
created to separate risk assessments from decision making. The purpose of
this separation was to increase public confidence in risk assessments by
distancing these assessments from possible political interference.

A chronology of the consolidation of Germany's food safety system follows:

o 	November 2000-The detection of BSE in German cattle and other food
safety issues undermined consumer confidence in the food safety system.

o 	July 2001-The Federal Performance Commissioner's Report, a study of the
German food safety system, was produced by a German national audit office
task force. The report's three main recommendations were to (1) reorganize
the Federal Ministry of Consumer Protection, Food, and Agriculture, (2)
establish a coordinating body within the federal government, and (3)
establish a scientific unit to perform risk assessments.

o 	December 2001-In response to the task force report's second and third
recommendations, administrative guidance issued by the Federal Ministry of
Consumer Protection, Food, and Agriculture established the Federal Office
of Consumer Protection and Food Safety and the Federal Institute for Risk
Assessment as "institutes."

o 	August 2002-The German parliament approved the Consumer Health
Protection and Food Safety Restructuring Act, authorizing the creation of
these two new food safety agencies.

o 	November 2002-The Consumer Health Protection and Food Safety
Restructuring Act took effect.

o 	December 2003-The Federal Office of Consumer Protection and Food Safety
presented the federal states with a draft general administrative
regulation that would harmonize their food safety controls. As of

             Appendix IV Germany's Food Safety System Consolidation

October 2004, German officials expected these regulations to take effect
in January 2005.

Legislation 	The Consumer Health Protection and Food Safety Restructuring
Act, which took effect in November 2002, separated the fields of risk
management and risk assessment by authorizing the creation of Germany's
two new food safety agencies.

Challenges 	According to officials, negotiations between the federal
government and the federal states concerning reform of food safety law
have been complicated, as some reforms that would give the federal
government increased authority would require constitutional changes.

Annual Budget and Number According to officials, the Federal Office of
Consumer Protection and Food

of Employees 	Safety's budgeted spending for 2004 was 25 million euros
(about $31 million U.S.), and the budgeted 2004 spending for the Federal
Institute for Risk Assessment was 47 million euros (about $58 million
U.S.).

In 2004, according to officials, the Federal Office of Consumer Protection
and Food Safety had about 350 employees, and the Federal Institute for
Risk Assessment had about 540 staff.

Stakeholder Reaction	The German food industry and consumer organization
stakeholders we contacted support the consolidation.

According to a representative of a major food industry organization, the
German food industry supports the creation of the Federal Office of
Consumer Protection and Food Safety because it has increased coordination
of the federal states' food safety activities and has improved Germany's
ability to respond to potential food safety crises. In addition, to
further improve Germany's ability to prevent potential food safety crises
and in view of impending EU legislation, the food industry advocates
increasing the Federal Office of Consumer Protection and Food Safety's
authority to coordinate the federal states' food safety activities, thus
enabling increased harmonization of food safety standards and control
procedures across states. Moreover, the food industry representative
stated

Appendix IV Germany's Food Safety System Consolidation

that the separation of risk assessment and risk management has given the
food safety system more credibility in the view of the public and
industry.

A representative of the consumer organization we contacted stated that the
consolidation has made the food safety system more effective. In addition,
the representative stated that the consolidation has increased German
consumers' confidence, but added that German consumers continue to have
less confidence than consumers in other European countries. The consumer
organization favors giving the Federal Office of Consumer Protection and
Food Safety increased authority.

Appendix V

                   Ireland's Food Safety System Consolidation

In 1998, the Irish government enacted legislation creating the Food Safety
Authority of Ireland. The Authority assumed all responsibility for food
safety in July 1999.

Reasons for Consolidating Food Safety Responsibilities

Officials stated that Ireland consolidated responsibility for food safety
and food law enforcement within a single national agency to address public
concern about food safety stemming from food scares and the detection of
BSE in Ireland. Maintaining a strong food safety system is also extremely
important for Ireland's economy for several reasons. According to senior
food safety officials, roughly 90 percent of the country's meat and 75
percent of food is produced for export. If trading partners lost
confidence in the food safety system, thus losing confidence in the food,
exports could decline-even without a major outbreak. In addition,
Ireland's economy depends heavily on tourism, and outbreaks of foodborne
illnesses could affect tourism and cause serious harm to the economy.
Furthermore, when BSE was found in Irish cattle in the 1990's, Irish
consumption of meat declined as consumers questioned the effectiveness of
the Department of Agriculture and Food, which was responsible for
inspections of abattoirs, meatpacking plants, and farms. Also, some
consumers perceived that the Department favored the interests of the food
industry over consumer protection.

Responsibilities and Structures Before and After Consolidation

According to officials, before the consolidation of Ireland's food safety
system, food safety functions were the responsibility of over 50 entities
across the government, including six government departments, 33 local
authorities, and eight regional health boards, with no central government
authority to coordinate all of these entities. The Department of
Agriculture and Food, inspected farms, slaughterhouses, and meat
processing facilities for compliance with food safety regulations and was
also responsible for the promotion of the agriculture industry. Local
governments and regional authorities (e.g., health boards) had various
other food safety responsibilities, such as inspecting meat plants
producing for the home market, production and processing of food of
nonanimal origin and the retail and catering sectors. In addition,
multiple agencies were tasked with enforcing food safety legislation with
no central accountability system in place to ensure that food safety
legislation was being properly enforced or to coordinate food safety
functions and activities across the food supply chain.

Appendix V
Ireland's Food Safety System Consolidation

As a result of a series of food scares in the 1990s, the Irish government
undertook a review of its food safety system in 1996 to assure the safety
and quality of their food products. The government's review eventually led
to the establishment of a lead food safety agency. The government
established an interdepartmental committee to advise the Irish parliament
on how the various food safety entities could best be coordinated. In
early 1997, this committee recommended establishing a Food Safety
Authority of Ireland. Under this recommendation, the responsibility for
implementation of food safety laws would have remained with the existing
agencies. The Authority would have audited these agencies and had a voice
in setting and maintaining standards as well as in promoting good
practices. Before this recommendation was enacted, a new government took
office after an election in mid-1997. The new government believed that the
Authority should be directly accountable for all food safety functions,
including enforcement of food legislation. This proposal led to the
establishment of the Food Safety Authority of Ireland (FSAI), formally
established in law under the Food Safety Authority of Ireland Act, 1998,
and beginning its official operation in January 1999. The legislation
which established the FSAI provides for the transfer of all relevant staff
to the new agency. Alternatively it provides that the FSAI can enter into
a service contract with existing agencies for the enforcement of food
legislation. As the likely personnel issues surrounding the smooth
transfer of staff would have delayed commencement of FSAI's food safety
enforcement role, the service contract mechanism was used. At the time,
roughly 2,000 staff, spread across more than 50 agencies, delivered food
safety services throughout the country. Many staff had duties in addition
to food safety responsibilities and therefore officials found it difficult
to transfer "food safety" personnel to the Authority without disrupting
other programs.

FSAI is an independent, science-based body that reports to the Department
of Health and Children.1 According to officials, the government
deliberately placed the FSAI under the auspices of the Department of
Health and Children rather than the Department of Agriculture and Food, as
the former's focus is on consumer health and protection, whereas the
latter is associated with industry and trade development and promotion.

1According to officials, FSAI maintains independence due to its clear
separation from the food industry. Section 10 of the Food Safety Authority
of Ireland Act, 1998 states: "The Authority shall, subject to this Act, be
independent in the exercise of its functions."

Appendix V
Ireland's Food Safety System Consolidation

A Board of 10 members, appointed by the Minister of Health and Children,
governs FSAI although a chief executive officer leads day-to-day
operations.2 In addition, the agency has a 15 member scientific committee
that assists and advises the Board. See figure 10.

Source: GAO analysis of information from Irish officials.

FSAI is the single regulatory authority with responsibility for enforcing
food safety legislation in Ireland. This responsibility is managed through
service contracts with agencies performing food safety activities. FSAI
has the responsibility to monitor and audit these agencies to determine
how well they fulfill the tasks laid out in their service contracts. FSAI
meets formally at least three times a year with each agency's liaison to
facilitate monitoring of the service contracts, and began auditing the
agencies on their performance in fulfilling their service contracts, in
the second half of 2004.3

FSAI has risk assessment, risk management, and risk communication
responsibilities, including setting standards according to the scientific

2Members of the Board are primarily from academia or public health fields.

3Each service contract is valid for 3 years, at the conclusion of which it
is revised and renewed.

                                   Appendix V
                   Ireland's Food Safety System Consolidation

advice (put forth by the scientific committee), making risk management
decisions with the agencies that are responsible for conducting food
safety inspection and enforcement, and communicating risks to consumers,
the food industry, and public health professionals. According to
officials, FSAI's responsibility for food law enforcement begins when food
or animals are transported from the farm. In the fisheries and aquaculture
sector, it has responsibility for food law at the level of primary
production. However, feed safety and animal welfare are outside its
jurisdiction.

Procedures are in place to deal with food scares and food crises, should
they emerge. Such crisis measures include a 24-hour emergency number,
where local authorities can contact FSAI, as well as a memorandum of
understanding between FSAI and all the agencies with food safety functions
on how to coordinate during a crisis. In addition, FSAI is the national
contact for the EU's rapid alert food safety system.

Legislation 	According to senior food safety officials, legislative reform
of Ireland's food safety laws was minor. The Food Safety Authority of
Ireland Act, 1998, as well as establishing FSAI, also transferred
authority for enforcement of existing food legislation and setting food
safety and hygiene standards to FSAI. Although food law in Ireland dates
back to the 1800's, most of Ireland's national food legislation today is
derived from Ireland's EU membership.

Challenges 	According to officials, in deciding where to place the new
food safety agency within the government, Ireland chose to place it under
its existing Department of Health and Children specifically to separate
food safety responsibilities from food and agriculture promotion efforts,
which is the responsibility of the Department of Agriculture and Food.

In addition, food safety agency officials had the overall role of bringing
about the general understanding that the primary responsibility for food
safety rests with the food industry. According to senior officials, FSAI
works with all stakeholders towards this end. Industry stakeholders we
spoke with stated they are now aware that they have such a responsibility.
This change was, in part, due to the FSAI holding open forums with
shellfish farmers, caterers, industry groups, and other stakeholders. The
forums discussed problems and solutions, as well as advocated
partnerships.

                                   Appendix V
                   Ireland's Food Safety System Consolidation

Annual expenditures and FSAI officials estimated that FSAI spends 9.4
million euros (about $11.6

number of employees 	million U.S.) on food safety activities annually.
Government departments, such as the Department of Agriculture and Food,
still retain responsibility for policy and legislation and have separate
budgets.

                        In 2004, FSAI had 82 employees.

Stakeholder Reaction	According to industry stakeholders, FSAI has been
successful in making the concerns and desires of consumers and retailers
on food safety matters a higher priority than they were before the
consolidation and making food safety a higher priority for industry by
fostering open communication. Industry representatives stated these
changes have been positive for industry. For example, stakeholders also
stated that their positive relationship with FSAI has allowed industry
organizations to be informed about discussions at the EU level and
subsequently voice their position to FSAI on issues discussed at this
level. A report published in October 2003 on industry attitudes toward
food safety stated that 910 of 1,300 industry representatives surveyed (70
percent) considered food safer than it had been 10 years earlier.4

A consumer organization stakeholder cited several examples of why
consumers support Ireland's consolidation of its food safety system. For
example, the official stated that FSAI is a single contact point for
consumers when food safety concerns or questions arise. Moreover, the
official said, the consolidation and creation of FSAI added accountability
to food safety in Ireland, which did not exist before. As a result, said
the official, consumers are more confident in the safety of the food
supply, as well as more aware and knowledgeable about food safety. A
report published in October 2003 on consumers attitudes toward food safety
stated that more than half of 800 adult consumers (53 percent) surveyed
considered food safer than it had been 10 years earlier.5

4FSAI's Food Safety Consultative Council conducted the survey. The results
were published in October 2003 in a report entitled "Industry Attitudes to
Food Safety in Ireland."

5"Consumer Attitudes to Food Safety in Ireland," based on a survey by
FSAI's Food Safety Consultative Council, was published in October 2003.

Appendix VI

The Netherlands' Food Safety System Consolidation

In 2002, the Netherlands moved an inspection office from the health
ministry and an inspection office from the agriculture ministry to its new
food safety agency, the Food and Consumer Product Safety Authority.
According to Dutch officials, further consolidation is to occur by January
1, 2006, when the merger of the two inspection offices is to be completed.

Reasons for Consolidating A need to reduce overlap and improve
coordination among the Dutch

Food Safety Responsibilities	government's multiple food safety entities,
as well as public concern about food safety stemming from the dioxin
contamination of animal feed,1 BSE, and other animal diseases triggered
the Netherlands' decision to restructure its food safety system. Officials
noted that the need to comply with recently adopted EU legislation also
motivated the Netherlands' consolidation.

Responsibilities and Structure Before and After Consolidation

Before the Netherlands consolidated its food safety agencies in 2002, the
country maintained two food safety inspection offices, each located in a
different ministry. The Inspectorate for Health Protection and Veterinary
Public Health (KvW) was in the Ministry of Public Health, Welfare and
Sports. The National Inspection Service for Livestock and Meat (RVV) was
in the Ministry of Agriculture, Nature and Food Quality. According to a
senior food safety official, having food safety responsibilities divided
between two different ministries caused overlap within the Netherlands'
food safety system. For example, both ministries had responsibilities for
inspecting slaughterhouse facilities. Officials stated that communications
between the two inspection agencies needed to be streamlined and
duplication of inspection efforts needed to be reduced.

In 2001, before beginning its 2002 consolidation, the Netherlands tried to
address the problems associated with having two inspection offices by
creating the Netherlands Food Authority, a small team of scientists who
monitored the work of the two inspection offices, KvW and RVV. (See fig.
11 below.) However, according to officials, by 2002, both the Dutch
parliament and consumer organizations wanted more guarantees for food
safety inspections than could be offered by the Netherlands Food
Authority. Therefore, in July 2002, the Netherlands converted the

1In 1999, dioxin, a potential carcinogen, was found in animal feed in
Europe. To protect consumer health, the European Commission adopted
measures to remove poultry, pigs, and cattle suspected of having eaten
contaminated feed from the food supply chain.

Appendix VI
The Netherlands' Food Safety System
Consolidation

Netherlands Food Authority into a new food safety agency, the Food and
Consumer Product Safety Authority, and placed both the RVV and KvW within
the new agency. Initially, the Food and Consumer Product Safety Authority
was housed under the Ministry of Public Health, Welfare and Sports, but in
2003 it was moved to the Ministry of Agriculture, Nature and Food Quality.
(See fig. 12 below.) According to officials, moving the new food safety
agency to the agricultural ministry increased its prominence.

Oversight and monitoring Structural organization

           Source: GAO analysis of information from Dutch officials.

Source: GAO analysis of information from Dutch officials.

                                  Appendix VI
                      The Netherlands' Food Safety System
                                 Consolidation

According to officials, the Food and Consumer Product Safety Authority's
core responsibilities cover three areas: (1) risk assessment and research-
to identify and analyze potential threats to the safety of food and
consumer products; (2) enforcement-to ensure compliance with legislation
for meat, food, and consumer products, which may include nonfood items;
and (3) risk communication-to provide information concerning risk and risk
reduction, based on accurate and reliable data. The agency's enforcement
responsibilities include food, animal health, and animal welfare
inspections.2

Senior food safety officials stated that the Netherlands' consolidation
efforts are not complete. According to officials, the two inspection
offices will be merged into one by 2006. This single inspection office
will consist of inspectors responsible for inspecting several types of
food products. The Food and Consumer Product Safety Authority has begun
training current inspectors in anticipation of this merger.

Legislation	According to an agency document, the Food and Consumer Product
Safety Authority derives its responsibilities from various sources,
including the Food and Consumer Product Safety Authority Organization
Decree, dated July 10, 2002. To accomplish the move of inspection offices,
the RVV and the KvW, within the Netherlands food safety system, officials
stated that no major legal changes or new laws were needed. Only minor
revisions in some laws, such as changing the name of the organization
responsible, were necessary.

Challenges 	Officials in the Netherlands faced three challenges in
changing the country's food safety system. First, the government had to
decide what responsibilities and authorities the new food safety agency
would have. Second, as discussed above, the government had to decide which
ministry the new food safety agency would be placed in. The third
challenge was an increase in employee attrition. For example, an official
stated that attrition increased when the Food and Consumer Product Safety
Authority was moved from the Ministry of Public Health, Welfare and Sports
to the Ministry of Agriculture, Nature and Food Quality.

2According to officials, producers have the primary responsibility for
product quality.

                                  Appendix VI
                      The Netherlands' Food Safety System
                                 Consolidation

Annual Budget and Number According to officials, in 2004, the Food and
Consumer Product Safety

of Employees	Authority's budget was 188 million euros (about $232 million
U.S.), and the agency's workforce consisted of about 2,700 full-time
equivalents. Officials also told us that the workforce would decrease to
about 1,800 full-time equivalents by January 2006. Among the factors
causing this reduction are the partial privatization of meat inspections
and the reorganization and reduction of administrative and management
personnel.

Stakeholder Reaction	Representatives of the fruit and vegetable, dairy,
and livestock and meat industries all stated that their operations were
not affected by the consolidation in the Netherlands' food safety system.
However, they all stated that the change was beneficial for consumers in
that it clarified that the Food and Consumer Product Safety Authority was
the responsible agency for food safety functions. The Food and Consumer
Product Safety Authority performed a study of Dutch consumers' confidence
in the safety of food in 2002 and 2003. The study results show that
consumers in both years had high confidence in food safety. In addition,
one industry representative explained that as a result of moving the two
inspection offices into a single agency, the two offices now have common
goals.

Appendix VII

New Zealand's Food Safety System Consolidation

The New Zealand Food Safety Authority was established in July 2002.

Reasons for Consolidating According to officials, the New Zealand Food
Safety Authority (NZFSA)

Food Safety Responsibilities	was established in July 2002 to improve the
effectiveness of New Zealand's food safety system by coordinating and
harmonizing food safety efforts. Specifically, New Zealand wanted to
address inconsistencies between the methods used in the Ministry of
Agriculture and Forestry's export food safety program and the Ministry of
Health's domestic food safety program.

Responsibilities and Structure Before and After Consolidation

Before the consolidation, the Ministry of Agriculture and Forestry had
food safety responsibilities for agricultural production, meat and dairy
processing, food exports, and registration of agricultural compounds and
veterinary medicines. The Ministry of Health was responsible for
addressing health issues, as well as ensuring the safety of food sold on
the domestic market, including imported food. According to officials, to
address inconsistencies between the two ministries' food programs, New
Zealand's government consolidated food safety responsibilities of the two
ministries into one semi-autonomous body attached to the Ministry of
Agriculture and Forestry.

NZFSA is now New Zealand's controlling authority for domestic food safety
and imports and exports of food and food-related products. It is
responsible for administering legislation covering food for sale on the
domestic market; primary processing of animal products and official
assurances related to their export; exports of plant products; food
imports; and the regulation of agricultural compounds, such as pesticides
and fertilizers, as well as veterinary medicines. NZFSA has farm-to-table
responsibilities-from primary production through processing to retailers,
importing, and exporting, as well as responsibility for consumer
education. According to officials, the export program's purposes are to
maintain and increase exports while providing assurances of food safety
and keeping compliance costs under control. NZFSA's organization includes
a verification agency, which audits animal product facilities to verify
that exporters are following agreed processes. According to officials,
about 280 of NZFSA's approximately 480 employees are in the verification
agency.

In addition, New Zealand and Australia share a trans-Tasman independent
agency established under Australian law, the Food Standards Australia New
Zealand, that develops food standards for composition, labeling, and

          Appendix VII New Zealand's Food Safety System Consolidation

contaminants that apply to all foods produced or imported for sale in New
Zealand.1

Legislation 	Officials stated that existing food safety legislation
required only very minor modification to create the New Zealand Food
Safety Authority and authorize it to regulate food safety. However,
officials stated that the total domestic food regulatory program is
currently under review, and it was expected that quite extensive change
would be needed as an outcome of this review. Legislative change is
expected in late fiscal year 2005-2006.

Challenges 	According to officials, adjustment to a new organizational
culture was somewhat challenging for some employees. They said some
employees from the larger organizations, particularly employees from the
Ministry of Health, had difficulty assimilating into the culture of the
new agency. Approximately 100 employees moved from the Ministry of
Agriculture and Forestry, and 12 staff moved from the Ministry of Health
into the new food safety agency. A second challenge for officials was
deciding where within the government the agency would be located. NZFSA
was established as a semi-autonomous body attached to the Ministry of
Agriculture and Forestry. According to officials, its semi-autonomous
status is intended to provide a level of separation from producers sought
by the New Zealand public. In addition, the government had to decide
whether to move certain food-related responsibilities to the new agency.
For example, responsibility for human nutrition was kept at the Ministry
of Health.

Annual Budget and Number of Employees

According to officials, NZFSA's budget for the fiscal year that ended June
30, 2004, was approximately $78 million New Zealand (about $53 million
U.S.). A portion of NZFSA's spending is financed by user fees assessed on
industry for a range of regulator-provided services, including export
certification, export audit arrangements, and market access efforts.
Officials stated that NZFSA had approximately 480 employees in 2004.

1Food Standards Australia New Zealand was established by the Australian
Food Standards Australia New Zealand Act 1991.

          Appendix VII New Zealand's Food Safety System Consolidation

Stakeholder Reaction	According to a consumer organization representative,
before the creation of NZFSA, consumers were dissatisfied with the low
priority both ministries placed on food safety. According to this
representative, consumer organizations advocated changes in the food
safety system, including the creation of a single agency dedicated to food
safety.

In 2003, about one year after its creation, NZFSA commissioned a study
conducted by an independent research organization to provide benchmark
information on food safety issues among New Zealand's general public. The
study revealed that a majority of respondents considered food safety
standards to be improving, although concerns remain about specific foods,
such as chicken; food outlets; and other food-related issues, including
salmonella. Only one-third of the survey's respondents stated that they
were confident in the level of monitoring and enforcement of food safety
standards. Despite these concerns, officials of a consumer organization
stated that the creation of NZFSA was a very positive step that was
strongly supported by consumers, and that the agency was too new for
consumer confidence levels to have significantly increased at the time of
the survey.

An official representing a food industry organization in New Zealand
stated that the organization, along with others, had advocated the
establishment of a single food safety agency for years. The official
stated the previous system was piecemeal and inefficient, due to
coordination problems associated with two ministries having food safety
responsibilities and neither ministry placing a high priority on food
safety. As a result of the establishment of NZFSA, the industry is more
confident in how the nation handles food safety. One official stated that
as a result of the consolidation, the use of available resources for food
safety activities is more efficient because food safety resources are
located in one agency instead of fragmented between two ministries. In
addition, the official stated that consumer confidence levels have
improved due to an increase in the government's responsiveness to food
safety crises. According to the official, NZFSA has a responsive network
that quickly delivers information to notify the public of food safety
issues. Finally, the official stated that NZFSA has significantly improved
transparency and remains committed to ongoing discussions with its many
stakeholder groups. For example, in responding to reports of increased
iodine levels in children, NZFSA began discussions immediately with
endocrinologists, other doctors, and with food industry representatives to
address the issue.

Appendix VIII

The United Kingdom's Food Safety System Consolidation

In 1999, the Queen, by and with the consent of Parliament, enacted
legislation to establish the independent Food Standards Agency, which went
into effect on April 1, 2000.

Reasons for Consolidating Food Safety Responsibilities

Officials stated that the United Kingdom consolidated its food safety
system due to a loss of public confidence in food safety, which largely
resulted from the government's perceived mishandling of BSE. By early
1999, the human form of BSE, variant Creutzfeldt-Jakob disease, had caused
35 deaths. It was widely perceived that the fragmented and decentralized
food safety system allowed this outbreak to occur. According to a consumer
organization representative, consumers believed that the Ministry of
Agriculture, Fisheries, and Food-which had dual responsibilities to
promote the agricultural and food industry as well as to regulate food
safety-favored industry over consumers in making decisions related to food
safety.

Responsibilities and Structure Before and After Consolidation

Before the reorganization of the United Kingdom's food safety system in
2000, food safety responsibilities were divided among several central
government departments, such as the Ministry of Agriculture, Fisheries,
and Food and the Department of Health, as well as local authorities. The
Meat Hygiene Service, a subunit of the Ministry of Agriculture, Fisheries,
and Food was responsible for meat inspections, including enforcing hygiene
in slaughterhouses. Other food inspections, conducted by local
authorities, received no oversight from the central government.

In 1999, to address public concerns, the Parliament passed the Food
Standards Act of 1999 to establish the independent Food Standards Agency
(FSA) as the country's lead food safety agency. Officials stated that the
core groups of employees that started with FSA were from the Ministry of
Agriculture, Fisheries, and Food and the Department of Health. The Meat
Hygiene Service was moved out of the Ministry of Agriculture, Fisheries,
and Food and placed within FSA.1 In addition, FSA was granted audit
authority over local enforcement.

1In June 2001, the Department for Environment, Food, and Rural Affairs
(DEFRA) was created. Its responsibilities include on-farm issues, such as
animal welfare and the safety of animal feed, as well as promotion of
agriculture and the food industry. According to officials, elements of the
Ministry of Agriculture, Fisheries, and Food, which no longer exists, were
moved to FSA (1999 to 2000) and DEFRA (2001).

      Appendix VIII The United Kingdom's Food Safety System Consolidation

According to officials, FSA is responsible for scientific risk
assessments, risk management, standard setting, education, and public
outreach. In addition, its subunit, the Meat Hygiene Service, is
responsible for meat inspections. For other foods, FSA forms inspection
policy and audits local inspection authorities. Fruit, crops, and animal
feed are also within its jurisdiction. FSA has no agricultural or food
promotion responsibilities.

FSA has the powers of an agency in a ministry, but is not part of a
ministry. However, according to officials, the agency is held accountable
to the Westminster Parliament and devolved administrations in Scotland,
Wales, and Northern Ireland through Health Ministers.

An independent Board that consists of a Chairman, a Deputy Chair, and up
to 12 other members appointed to act collectively in the public interest,
manage the FSA. The Board's Chairman, who is appointed by the Secretary of
State for Health; Scottish Ministers; the National Assembly for Wales; and
the Department of Health, Social Services and Public Safety in Northern
Ireland, determines food policy and holds discussions on policy issues in
public meetings.

Legislation	The Food Standards Act of 1999 established the FSA. It
classifies the FSA as an independent nonministerial government department
and defines the agency's functions and powers, including its function to
monitor and audit the performance of local authorities and where necessary
to exercise reserve powers2 over local authorities.

Challenges 	The United Kingdom's main challenge in consolidating was
deciding which responsibilities to place in the new food safety agency.
The government had to decide whether to (1) separate or combine food
safety and nutrition, (2) include the Meat Hygiene Service within the new
agency, and (3) include nonmeat inspections as a responsibility of the new
agency or to sustain that authority with the local governments. Decisions
on these issues were made after several debates in Parliament and
considerable discussion among government officials and stakeholders from
the food industry and consumer organizations.

2According to an FSA official, reserve powers range from providing help
and guidance by directing the way in which the local authority operates to
performing the local authority's services.

      Appendix VIII The United Kingdom's Food Safety System Consolidation

An additional challenge cited by FSA officials was to avoid duplication of
efforts during the establishment of FSA and the termination of the
Ministry of Agriculture, Fisheries, and Food. To address this challenge, a
joint interim group was created to help reduce such duplication of
efforts.

Annual Budget and Number According to officials, FSA's annual budget is
approximately 130 million

of Employees 	pounds sterling (about $220 million U.S.); most of that
amount is allocated for meat inspections. The food industry pays FSA about
30 million pounds sterling (about $51 million U.S.) annually in user fees
for inspections.

Officials stated that FSA's workforce consists of approximately 3,000
employees.3

Stakeholder Reaction	A consumer stakeholder stated that the establishment
of FSA was an improvement to the food safety system because the agency has
made the system more open and transparent than it was before the
consolidation. Surveys of consumer attitudes on particular areas of the
food safety system have been conducted, but no survey has been conducted
to measure the confidence level of consumers for the entire food safety
system. For example, this stakeholder stated that surveys conducted by a
consumer association concluded that meat is still a concern for consumers,
but the association has not conducted a survey to determine confidence
levels over the entire food chain. The same consumer stakeholder also
stated that FSA has increased public education about food safety.

Industry stakeholders agreed that the establishment of a single,
independent food safety agency has increased consumer confidence. A
stakeholder stated that the most significant result of the consolidation
was a shift from an industry focus to a consumer focus on food safety
matters. Stakeholders also said transparency regarding the government's
oversight of food safety matters has greatly increased. In addition, one
stakeholder noted that the consolidation resulted in increased
accountability within the food safety system. However, industry
stakeholders cited dissatisfaction with the new agency's reporting on the
testing of food products. One stakeholder stated that FSA collects product
samples, tests them, and reports results without consulting companies.
Another stated that the

3According to officials, about 2,500 of these employees are with the Meat
Hygiene Service.

Appendix VIII The United Kingdom's Food Safety System Consolidation

agency comments on food product studies before they are actually
completed.

Appendix IX

Comments from the Department of Health and Human Services

Appendix IX
Comments from the Department of Health
and Human Services

Appendix IX
Comments from the Department of Health
and Human Services

Appendix X

Comments from the U.S. Department of Agriculture

Appendix X
Comments from the U.S. Department of
Agriculture

Appendix XI

                    GAO Contacts and Staff Acknowledgments 	

GAO Contacts
Robert A. Robinson, (202) 512-3841 Maria Cristina Gobin, (202) 512-8418
Gary Brown, (404) 679-1954

Staff
In addition to those named above, major contributors to this report were
Lawrence J. Dyckman and Kelli Ann Walther. Nancy Crothers, Barbara El

Acknowledgments
Osta, Michele Fejfar, and Amy Webbink also made key contributions to this
report.

GAO's Mission	The Government Accountability Office, the audit, evaluation
and investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost

is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
Reports and newly released reports, testimony, and correspondence on its
Web site. To Testimony have GAO e-mail you a list of newly posted products
every afternoon, go to

www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Contact:
Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470

Congressional	Gloria Jarmon, Managing Director, [email protected] (202)
512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

Relations Washington, D.C. 20548

Public Affairs	Paul Anderson, Managing Director, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***