The federal budget agreement signed on April 15 by President Obama - which cuts $38.5 billion in spending while funding the government through Sept. 30 and averting a government shutdown - includes cuts to several programs that involve food retailers.
However, these cuts are not expected to have a negative impact on the food industry, at least in the short term, according to government and trade association officials contacted by SN.
Areas of the budget agreement linked to the food industry include a $1.6 billion cut to the Environmental Protection Agency, representing 16% of its budget; a $10 million cut to food safety and inspection programs; and a $500 million cut to WIC, the health and nutrition program for women, infants and children.
The EPA's GreenChill Advanced Refrigeration Partnership, a voluntary program aimed at reducing refrigerant leaks and pioneering new refrigeration technologies, has attracted about 40 supermarket banners encompassing some 5,500 stores. But the EPA doesn't expect any changes in the immediate term “in how we run GreenChill,” said Drusilla Hufford, director, Stratospheric Protection Division, which oversees the GreenChill program.
On its enforcement side, the EPA's current leak repair requirements, under Section 608 of the Clean Air Act, require that food retailers repair a refrigeration system with more than 50 pounds of ozone-depleting refrigerant found to leak at an annual rate of more than 35%. Asked if leak enforcement would be affected by budget cuts, an EPA spokesperson replied that EPA staff “are reviewing the funding levels and we will have more details when that review is complete. We understand the need to make difficult decisions to ensure the government lives within its means.”
Jill Hollingsworth, the Food Marketing Institute's senior vice president and head of its Center of Excellence for Food Safety and Protection, does not anticipate a “significant impact on food safety” as a result of the budget agreement. “The FDA will focus on areas of greatest risk where their inspections can be most effective,” she said.
She also expects the implementation of the FDA Food Safety Modernization Act of 2010, enacted this year, will continue to take place. “The FDA has already made great strides” in implementing the new law, she said. “They are quite aware of the task and the tight timeline.”
Regarding cuts in the WIC program, “FMI is hopeful that it will still be adequately funded, based on current participation rates and the current cost of administering the program,” said Liz Garner, FMI's director of government relations. But if participation spikes and administrative costs go up, “we don't know if [the current budget] would be enough,” she added. She noted that WIC cuts were reduced from an initial $750 million to $500 million in the current federal budget.
FMI is pleased that the budget sets aside $35 million for the implementation of the electronic benefits transfer (EBT) program for WIC benefits, allowing participants to use a card-based system to pay for food, Garner said. WIC is slated to become EBT-ready nationwide by 2020.
MEAN AND LEAN
In assessing the impact of budget cuts, the EPA's Hufford told SN that “we will not be letting down our industry partners in a voluntary program like GreenChill.” The Stratospheric Protection Division that she oversees is “extremely cost effective,” she said. “Our work is accomplished with an incredibly small number of people, so I view us as already very mean and lean. A loss of a small amount [of funding], while painful, would not stop us.”
In addition to helping retailers seek leak reduction goals and share best practices, the GreenChill program presents certification awards to stores that achieve certain reduction levels, which are vetted by refrigeration experts. The certification program will continue unimpeded, Hufford said.
Refrigeration contractors have expressed interest in joining the GreenChill program, but Hufford acknowledged that the GreenChill is unlikely to grow in this budgetary environment. Still, she is looking “to do some serious drilling down in the areas we've already started. There's been a tremendous momentum in the conversation that's been started.”