BlackRock: Promoting shareholder activism – National Consumers League

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By NCL Public Policy intern Melissa Cuddington

Many consumers think of money management companies, such as BlackRock Inc., Vanguard Group, and State Street Corp., to be solely interested in the finance market and ways to strengthen their investment portfolios. Turns out this isn’t entirely the case. 

The recent action of Laurence Fink, CEO of BlackRock Inc., calling on shareholders to better articulate long-term plans and spell out how their organizations can contribute to society in a positive manner, is a stellar example of a company promoting shareholder activism.

According to a Wall Street Journal article from earlier this year, Fink stated that BlackRock Inc. plans to—over the next three years—double the size of the team that engages with other companies regarding their societal impact. Fink also states that this team will be investigating corporate strategies that can be used when collaborating with investors and shareholders.

Fink states in his annual letter that investors must “understand the societal impact of your business, as well as the ways that broad structural trends—from slow wage growth to rising automation to climate change—affect your potential for growth.”

This statement by Fink caught NCL’s eye as a positive and productive move on the part of the finance industry. It is crucial that money management companies understand their societal impact and ways in which their investments affect structural trends—such as climate change and unemployment. We hope to see other money management companies follow suit.

Guest Blog: Fixing the Life Insurance Marketplace – National Consumers League

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b.fetchel.jpgA version of this guest post was originally published in the National Underwriter. The views reflected here are not necessarily those of the NCL.

“The life insurance market is characterized not only by an absence of reliable price information, but also by the presence of deceptive price information…the deceptive sales practices found in the life insurance industry constitute a national scandal.” So testified Professor Joseph Belth, an expert on the life insurance industry, before Congress in 1973. Can this statement, from more than 40 years ago, still be as true today?  And is it possible for such deplorable industry practices to be occurring without being in the spotlight of public attention?

The short answers are yes. To this day the life insurance industry too often relies on inadequate product disclosure, misinformation, and fraudulent practices, thereby costing consumers billions of dollars annually. Industry executives have for years acknowledged that no one would buy many of their companies’ products if they were appropriately informed.

The free market economic system is built upon informed buyers making educated decisions. Yet so many life insurance industry chieftains who regularly sing the praise of our economic system fail to acknowledge that their businesses haven’t satisfied the system’s prerequisites or played by its rules.

Empirical proof of the life insurance market’s dysfunction is readily apparent by examining the very products life insurers and their agents sell. While a select few cash-value life insurance policies can provide excellent competitive value, perhaps 95% of such policies sold provide value no informed consumer would accept. This marketplace’s dearth of information also afflicts tens of millions of policyholders at annual renewal; if properly informed, millions of them currently could readily obtain much better value. Consumers of the industry’s other main products, annuities and long term care insurance, also face enormous disclosure-related problems.

The root of the age-old problem is the inadequate disclosure of information surrounding cash-value policies, such as whole life policies, where the annual cost is not the annual premium. Professor Belth and I have both long recommended disclosure about a policy’s annual costs and rate of return on its cash-values.  

The attached table of an actual insurance policy’s historical performance (see below) shows how this information on a policy’s annual costs and rates of return on its cash-values can be presented on a year-by-year basis and summarized over the duration with average or aggregate measures. Similar cost and rate information can be calculated on any and all prospective new and in-force policies via online consumer-friendly analytical tools. Understanding policies from this framework, and with solid knowledge of the differences between illustrated future values and actual future performance, enables consumers to assess the competitiveness of a policy’s costs and rates. For example, a healthy 40 year-old male can  compare his policy’s costs with benchmarks that are available in the marketplace and its rates of return with suitable alternative investments. 

A cash-value life insurance policy’s unique intrinsic economic advantages arise from its Congressionally-granted tax privileges, not its highly touted permanence; after all, a term policy can be converted or exchanged into a policy providing lifelong, permanent coverage. These tax privileges, which are given directly to policyholders, however, are not a basis for which insurers can charge consumers; no one pays thousands of dollars to set-up an individual retirement account (IRA). Consequently, when selling such cash-value policies as whole life agents routinely make assorted misrepresentations. Agents often misleadingly state: 1) that a whole life policyholder pays for a lifetime of costs upfront, and that doing such and owning his/her coverage is better than endlessly renting it; 2) that buying a whole life policy at a younger age locks in a lower level cost for life; and 3) that the annual costs of a whole life policy can actually decline as the insured ages because these policies can pay dividends. These three common agent statements, and myriad variations of such, are deceptive.

Regulations prohibit such misrepresentations, but they have never been enforced. These and other misrepresentations are all designed to distort a cash value policy’s fundamental difference. For agents, the essential difference between whole life and term insurance is the quantum difference in the sales commissions – up to 5-9 times larger on whole life policies than on term policies. No one familiar with the paramount role that compensation incentives tied to the origination of subprime mortgages and the repackaging of such default-inevitable, toxic securities played in creating the Great Recession can doubt the perniciousness of the life insurance industry’s age-old problematic sales practices.

A successful consumer-agent relationship can only be built on trust, so predicating it upon inadequate disclosure is inherently counter-productive to all. While inadequate disclosure appears to be in the insurers’ and agents’ interest, it actually has made consumers so leery of agents that the age-old distribution process is so terribly inefficient and ineffective. Americans’ under-insurance – having woefully less life insurance than needed or appropriate – reaches new records every year. Some insurers’ policy lapse rates raise fundamental questions regarding the products’ suitability that regulators have never examined. And, the facts that the typical life insurance agent sells less than one policy per week and that four out of five new sales recruits fail out of the business within a few years are further proof of this industry’s failed business approaches.

Given the nature of the problem, improved disclosure and publicity of such have always been known to be two indispensable parts of the inevitable solution. Contrary to general opinion, however, there is no need to wait to for this industry’s state regulators to act and mandate disclosure. The necessary disclosures, after all, are not proprietary or esoteric. As is shown in the table, life insurance policies, like an automobiles’ horsepower or MPG, can be disclosed, not only by the manufacturer, but by anyone with the necessary expertise and this information is now available online.

Without publicity though, this public good of disclosure remains undiscovered. Reform of the life insurance industry has always merely been a battle of wills. Reformers have had to confront industry, an uninterested or uninformed media, regulators not understanding their jobs or unwilling or unable to do them, and/or reformers’ own doubts about ever succeeding. Financial markets can be fixed when appropriate policy disclosure for consumers is heralded and becomes pervasive.

When will this information be publicly disseminated, so that everyone knows about it and can use it, thereby initiating the long-overdue repair of the life insurance marketplace? This disclosure-driven transformation will produce the myriad and well-documented benefits of genuine economic competition: consumers will obtain better value; insurers will improve the efficiency of their production processes; and agents will act and be seen as trustworthy professionals. Clearly, the sooner this time comes, the sooner Americans can start saving billions of dollars per year, the better for everyone.

 

Actual Historical Performance of a Whole Life Policy
$250,000 issued 20+ Years ago (in 1989) to a 45 Year Old Male, Best Health
*Annual Premium $5815 Paid All Years
** Notes below provide additional information

Age During Year

Insurance Death Benefit

Cash-Value

Total Annual Costs

Annual Dividend Rate

45

            251,425

  408

            5,444

10.00%

46

            253,954

 5,134

            1,556

10.00%

47

            256,890

10,188

            1,624

9.25%

48

            260,927

 15,823

            1,520

9.25%

49

            265,684

21,955

            1,403

8.50%

50

            271,380

28,709

            1,310

8.50%

51

            278,019

36,119

            1,235

8.50%

52

            285,871

44,344

            1,064

8.50%

53

            295,056

53,487

            998

8.80%

54

            305,332

63,521

            919

8.80%

55

            316,703

74,519

            844

8.80%

56

            328,867

86,417

            907

8.80%

57

            341,858

99,309

            787

8.60%

58

            354,658

112,782

            889

8.20%

59

            366,807

126,628

            1,022

7.70%

60

            378,831

141,112

            1,176

7.50%

61

            391,554

156,699

            1,160

7.50%

62

            404,738

173,322

            1,284

7.50%

63

            418,387

191,040

            1,425

7.50%

64

            429,215

207,946

            1,601

6.50%

 

 

 

Avg. Rate:

8.43%

 

**Insurance Death Benefit shows the amount the policyholder’s beneficiary would receive after his death
Cash-Value is the cash amount the insurer gives to the policyholder if he cancels his contract
Total Annual Costs show the amount expensed from policy premiums (and policy cash values if and when necessary) to pay for sales, claim, administrative, capital charges and any other miscellaneous costs, such as premium taxes.
Annual Dividend Rate is the rate earned by policyholder, net of investment management costs, on policy cash values, that is, values after costs.        

For More Information see this Table 2 of Policy Disclosure article.

The USDA plan to “modernize” poultry inspection is a step backwards – National Consumers League

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The post originally appeared on scienceblogs.com. By Celeste Monforton, DrPH, MPH of George Washington University School of Public Health & Health Services 

The Obama Administration’s USDA continues to insist that their proposed rule to “modernize” poultry slaughter inspections will improve food safety. Just last week, Secretary Vilsack’s office said it is sticking with their plan, saying: “comprehensive effort to modernize poultry slaughter inspection in ways that will reduce the risk for American families.” For the last 18 months, however, the USDA Secretary has heard loud and clear that his agency’s proposal is certain to do much more harm than good.

Advocates for and experts on food safety, workers safety, consumers, animal rights, and even USDA’s own inspectors, have provided evidence of this during the agency’s public comment period. They’ve also follow-up with letters and petitions reiterating why the proposal should be scrapped. It’s fallen on Vilsack’s and his staff’s deaf ears. USDA’s response is particularly offensive because it contradicts one of President Obama’s declarations.   The President insists that his Administration wants input from the public. He may say his team wants input, but they’ve demonstrated no interest in being persuaded by it. And the evidence continues to pile up. The USDA’s proposed rule on a new poultry slaughter inspection process must be withdrawn.  The most recent evidence added to the hefty stack includes:

  • An investigation by the Government Accountability Office (GAO) concluding that USDA does not have evidence from its pilot project to support its proposed new inspection process. GAO found problematic that USDA: “will not complete another evaluation before it issues a final rule.” That’s the final rule that USDA insists it will issue very soon.
  • Legislation introduced in September 2013 by Senator Kirsten Gillibrand (D-NY) would halt USDA’s action. Responding to the GAO report, the Senator wants to ensure USDA gathers the necessary evidence to justify its assertions that the new system will improve food safety.
  • A coalition of 16 civil rights, worker safety, and faith groups petitioned USDA (and the Secretary of Labor) to withdraw the proposed rule, and adopt a rule to protect poultry- and meat-processing workers from the extreme production line speeds which injury and disable them.  These workers—many of them Latino and African-American, and female—are vulnerable to employer abuse and already experience severe injury and disability because of their work.
  • And, food safety experts persist in assembling the most current evidence on defects in the USDA’s pilot project and proposed rule. As new evidence emerges, they provide it to USDA. They have repeatedly asked USDA Secretary Vilsack to revoke the the equivalency determinations because the HIMP model in swine slaughter is flawed. The most recent letter informed USDA (just in case they didn’t already know) that the European Union seems to have rejected the Australian privatized meat inspection model. As Food & Water Watch explained, the EU’s concern is the

“apparent conflict of interest of having company-paid employees inspect meat for safety and wholesomeness. In its zeal to privatize inspection here in the U.S., USDA’s Food Safety Inspection Services may have created a trade crisis by hastily approving its ill-conceived program abroad. It’s time to revoke those equivalency determinations before there is a major international food safety incident.” All of this—combined with the overwhelming rejection of the USDA approach in comments submitted to the agency during the formal public comment period—should be more than enough for the agency to scrap their plan. But there’s more. Icing on the Cake The icing on the cake is stellar reporting by the Washington Post’s Kimberly Kindy. For the last seven months she’s investigated the potential impact of USDA’s proposed changes to poultry slaughter inspection. In April, Kindy wrote about the death of USDA poultry inspector Jose Navarro. The 37 year-old father died from a pulmonary hemorrhage likely related to exposure to chemicals used to disinfect poultry. Navarro’s assignment was inspecting poultry at Murray’s Chicken in upstate New York. Her investigation led to a private report provided by USDA to the House Appropriations Committee. The agency acknowledged that in plants which have already accelerated line speeds, workers have been exposed to larger amounts of chemical disinfecting agents. “The use of powerful antimicrobial chemicals has increased in order to decrease microbial loads on carcasses.” Increasing production line speeds is exactly what USDA is proposing to do. The chemical agents in which the poultry soaks, poses a serious risk of harm to USDA inspectors, as well as the thousands of workers employed in these plants. Jose Navarro’s death is the gravest example of that point. In September, Kindy reported on USDA’s failure to control contaminated meat produced at plants that are using the agency’s “modernized” inspection system from reaching consumers. In exchange for adopting the new system, poultry and meat producers can substantially increase lines speeds, use employees to inspect the product throughout the process (which means fewer USDA inspectors) and come up with their own scheme to identify contaminated meat and poultry. The system has been adopted by some oversees producers whose meat is imported to the U.S. Kindy interviewed members of USDA’s own scientific advisory committee. Commenting on the USDA’s pilot and plans to implement it nationwide, one committee member told Kindy: “We should not be putting it out there, saying it is okay for other countries to use, when it has so many flaws and when contaminated meat is coming in.” Last week, Kindy added to her series on USDA’s plan. She reported that the proposed increase in line speed will not only be a danger to workers, lead to increase use of chemicals, and could allow contaminated meat into the food supply, but that the “USDA plan to speed up poultry-processing lines could increase risk of bird abuse.”  [This next part is not for the faint of heart.] “Nearly 1 million chickens and turkeys are unintentionally boiled alive each year in U.S. slaughterhouses, often because fast-moving lines fail to kill the birds before they are dropped into scalding water, Agriculture Department records show.” USDA reacted to Kindy’s Oct 29 story with a post on the agency’s blog. They insist their proposal is just hunky-dory, adding “Experts agree that it would significantly reduce foodborne illnesses – reducing dangerous pathogens like Salmonella to protect American families.  Improving America’s food inspection system will do just that, and USDA is committed to undertaking this effort in a way that ensures even stronger humane handling measures in the future.” As far as I can tell, the “experts who are agreeing” are two individuals on whom the USDA relies. One is Professor Billy Hargis from the University of Arkansas. He is the Sustainable Poultry Health Chair, and endowed position, funded in part, by the Tyson Family (Tyson, as in the mammoth poultry company.)  The other expert is Douglas Fulnechek, DVM, a manager and veterinarian at USDA. Personally, I don’t consider either unbaised experts.  In contrast, many public health experts, who have no financial or professional stake in the outcome, submitted scads of evidence to USDA on the likelihood of grave harm should its proposal be adopted. From contaminated meat and crippled workers, to toxic chemicals and tortured chickens, surely the White House will ask Secretary Vilsack to withdraw this ill-conceived rule. If not, we’ll be asking the Obama Administration, which side are you on?  I take that back, we’ll know which side they’re on.

Free webinar: Improving communication between patients and health care professionals – National Consumers League

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Dr. Ira Wilson of Brown University will lead the webinar “Medication Adherence in Practice” on November 19. Three out of four Americans do not take their medications as prescribed. Open communication between health care professionals and their patients can be a powerful tool for improving rates of medication adherence.

Health care professionals including nurses, doctors, and pharmacists can inform patients about the importance of taking their medicines as directed in order to improve overall health outcomes. Often, it is difficult to know the right questions to ask for both the patient and health care professional.

NCL’s Script Your Future campaign is holding its first-ever free webinar for health care professionals to learn how to talk with patients about taking medication as directed.  This webinar, on November 19 at 12noon Eastern, is a part of ongoing efforts to provide resources to both patients and health care professionals about medication adherence and how to improve communication in the health care setting. There are many reasons why people don’t take their medicine as directed, including forgetfulness, side effects, not sure they need medicine, and cost. Having that conversation to understand the patients’ concerns can help health care professionals provide better care.

Featuring Dr. Ira Wilson from Brown University, the webinar will present health care professionals with tools to communicate effectively with patients. Dr. Wilson will include real-world examples and solutions that he has developed over the years to establish trust with his patients and improve care.

This webinar is a must-attend for any professional who is looking to improve their skills.Join this free webinar today by registering here. Bring your questions to this exciting and interactive event! What: Webinar for health care professionals – doctors, nurse practitioners, pharmacists, nurses, etc. When: Tuesday, November 19, 12noon – 1 pm Eastern Contact Ayanna Johnson at ayannaj@nclnet.org with any questions. For more information about the Script Your Future campaign, visit www.ScriptYourFuture.org.

To have power means to have responsibility – National Consumers League

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This post originally appeared on SOCAP International’s Web site Guest blog by Matt D’Uva, President of the Society of Consumer Affairs Professionals I had the absolute privilege to attend the Trumpeter Award Dinner on Tuesday night hosted by the National Consumers League.  NCL, founded in 1899, is an inspiring organization.  They have been fighting the good fight for important causes such as workers’ rights, consumers’ rights, and equal pay for equal work.  Although the organization is well over 100 years old, this year marks the 40th Anniversary of the Trumpeter Awards Dinner which, of course, made me think about the interesting connection between this celebration and SOCAP’s own 40th anniversary.

Organizations like NCL have been a critical player in important movements in the history of our country, such as the consumer movement which helped create new legislation, practices and accountability which ultimately led to the creation of SOCAP and literally the customer care profession.  I believe that leaders like Florence Kelly, the first general secretary of the NCL (and the namesake of one of the Trumpeter Awards), would be thrilled to see the power of consumers today.  I believe she would be challenging organizations like SOCAP and our members to ensure that the Voice of the Consumer is alive, strong and elevated within companies on every issue.  Ms. Kelly once famously said, “To buy means to have power, to have power means to have responsibility”. This responsibility is born by consumers, by customer care executives and by organizations like SOCAP and NCL.  To that end, SOCAP has worked hard to build a partnership with the National Consumers League to ensure that we are living up to Ms. Kelly’s challenge of taking our responsibility seriously to consumers.  For example, SOCAP—working through our local chapters and our national members—actively supports NCL’s LifeSmarts program which works with young people in grades 6 – 12 to help them learn important skills to better and more educated consumers.

Our members help write questions, volunteer their time, and donate funds to help the LifeSmarts program grow.  As SOCAP’s President and CEO, I also serve as a member of the Advisory Board. We have also been working with NCL on other programs such as their Fraud.org project protecting consumers from bad players who mean to do them harm, the very opposite of customer care.  Additionally, we have started important dialogue with NCL about the issue of consumer privacy.  Privacy is an important topic for customer care and business, especially as we see the great opportunities to use Big Data to build meaningful, authentic relationships with consumers.  It is through these important partnerships like this that SOCAP can contribute to your internal conversations.   To that end, I invite you to participate with us at our 2013 Annual Conference (October 27-30 in Scottsdale, AZ) where we will convene a panel session with NCL leaders as well as industry representatives from Microsoft and Publishers Clearinghouse to discuss issues around consumer privacy and what we can learn from consumer organizations and industry working together.  This will be the first of many discussions on this important topic and we hope you will join us. I am proud of SOCAP’s history of supporting customer care experts who are the heart and soul of industry and who bring the voice of the consumer to decision makers.  I am also proud to share a bit of our history with the consumer groups like NCL who have fought to push for the transparency and openness that customer care provides.  As we look to the future, our partnership will ensure that SOCAP members remain at the forefront of pushing our profession and service to customers through listening and engagement.

Around the world 15.5 million children are trapped in domestic servitude – National Consumers League

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 By Sharon L. Fawcett, CLC Contributing Writer “I clean the floor many times in a day. When it is not well done, my employer throws the dirty water at my face.”

This is how a girl from Togo describes her experience with child labor to Anti-Slavery International (ASI) researchers. She is a child domestic worker, enduring her employer’s abuse. The International Labour Organization estimates that 15.5 million children around the world are involved in domestic work in a home other than their own; 10.5 million of these children are involved in child labor as they are either under the legal minimum working age, or employed in hazardous conditions or conditions akin to slavery. In 2008, 61 percent of children in domestic labor were between 5 and 14 years of age; one-third were under age 12.73 percent of children engaged in domestic work are girls.

Child domestic labor is one of the most widespread and exploitative forms of child labor in the world. Child domestic workers help with the day-to-day tasks of running a household. These may include cooking, cleaning, caring for children or the elderly, gardening, running errands, and other tasks, as well as selling goods in the marketplace and on the street. These children may live with their employers, they may receive financial remuneration for their work, or “in kind” payment like food and housing. The hours are long, and many child domestic workers report that they are always on-call.

The reasons children end up in domestic labor vary by country and region, but poverty is usually a major factor. Child domestic workers are often overlooked in attempts to protect child workers, partly because of the notion that domestic work is a “safe” form of employment. However, because these children work inside private homes, they are especially isolated and at risk for abuse. According to the ILO, three-quarters of all children in domestic child labor perform hazardous work. This includes children working at least 43 hours per week, working at night, and being exposed to physical or sexual abuse.

The ILO reports that significant numbers of child domestic workers are victims of trafficking, debt bondage, or servitude. Approximately 225,000 of these children work in Haiti’s restavek system, trapped in what amounts to forced labor and slavery. From the French words rester avec (“to stay with”), restavek children, usually girls, from poor rural backgrounds are given or sold by their parents to work as domestic servants for other families.

ASI and Free the Slaves (FTS) report that restavek children are treated as sub-human, and are extremely vulnerable to exploitation as well as physical, psychological, and sexual abuse. A similar form of servitude takes place in Nepal where, for more than half a century, daughters of lower-caste, Tharu, have been sold or given to those of upper-castes as a means of debt repayment by their families. These young girls are known as kamlari.

In spite of Nepal’s government officially banning bonded labor in 2000 and its Supreme Court making the kamlari practice illegal in 2006, at least 500 girls are still trapped in domestic slavery, according to Man Bahadur Chhetri from the Kamlari Abolition Project. The suicide by self-immolation of 12-year-old kamlari Srijana Chaudhary, this year, highlighted the dire situation of kamlari girls. Yet another form of child domestic servitude is found in Niger, where girls born into slavery can be sold to wealthy men as “fifth wives” or wahayu, a practice in which they become sexual and domestic slaves. Child domestic labor violates the United Nations (UN) Convention on the Rights of the Child (CRC) to which all countries that have ratified it are bound.

The United States, Somalia, and newly constituted South Sudan are the only UN member nations that have not ratified the CRC. (To learn what children’s rights are violated by child domestic labor, see table “Child Domestic Work and Children’s Rights.”) Child domestic labor also violates the ILO’s Worst Forms of Child Labor Convention (C182) and Minimum Age Convention (C138). In many cases it may violate the UN Palermo Protocol on Trafficking in Persons.

In 2011, the International Labour Conference adopted the Domestic Workers Convention (C189). C189 gives domestic workers, in states that ratify the convention, the same protections that other workers are entitled to. The convention also contains specific provisions to protect children from child labor in domestic work, ensuring that those of legal age to work can do so in decent conditions, without jeopardizing their education. The entry into force of ILO C189 on September 5, 2013 is a major step towards acknowledging the rights of domestic workers and protecting child domestic workers. However, as Kali Yuan of The Bernard and Audre Rapoport Center for Human Rights and Justice at the University of Texas points out, the standards in C189 must be translated into local context, changing norms and attitudes at the grassroots level. The same is true for other relevant conventions, so that children who wish to perform domestic work—and are of legal working age—can do so in conditions that are fair, safe, and respect their dignity.

For more on what some CLC members are doing in this sector see: Report: Human Rights Watch (2012), Lonely Servitude: Child Domestic Labor in Morocco. Information about the work of Free the Slaves, and partners, to end domestic slavery in Haiti, India, and Nepal. Information about the work of UNICEF, and partners, to help child domestic workers in Haiti regain their rights.

Dethrone the King Amendment – National Consumers League

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By Teresa Green, Linda Golodner Food Safety & Nutrition Fellow Over the past two months, animal welfare groups have expressed outrage over the King Amendment to the Farm Bill. Republican Representative Steve King of Iowa put forward the proposal in response to a California law that would only permit the sale of eggs from cage-free hens by 2015.

Last year, King proposed a Farm Bill amendment, which would have exempted out-of-state producers from having to meet the standards of the state in which their products sell. Now, seeing an opportunity for passage, Rep. King has introduced his bill as an amendment to the Farm Bill yet again. However, animal welfare groups are not the only ones with the right to be enraged; everyday-consumers have a stake in this, too. The provision, written in loose and ambiguous language, could ultimately lead to overturning a wide array of state laws enacted to promote food safety and ensure fair labor standards. In this aggressive assault on states’ abilities to protect and promote the health and safety of their citizens, the amendment threatens the very laws that citizens helped to enact. As a result, child labor laws might go out the window. Rules related to additives in alcohol production, rules on raw milk and arsenic in poultry-feed are also under threat. NCL has been working hard with a multi-stakeholder coalition to ensure this amendment does not make its way into the final Farm Bill.  But we need your help, too. We call on you to contact your representative and two Senators, encouraging them to reject the King Amendment and stand up for consumer protection.

The UK institutes a front of package labeling system, we hope FDA follows – National Consumers League

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By Teresa Green, Linda Golodner Food Safety & Nutrition Fellow Anyone who has ever been to the grocery store knows how overwhelming picking a product can be.  When there are 20 brands of peanut butter it can be difficult to choose which one to purchase.  Should you pick the one with less fat but more sugar?  What about the claims that one brand is “all natural?”  How much sodium is too much?

This understandable confusion has given rise to a proliferation of front of package (FOP) labeling systems which ostensibly present more concise information to consumers.  Unfortunately, because these systems are designed and implemented by the industry, they can often still be confusing. This is why we have, for many years, been urging the US Food and Drug Administration (FDA) to adopt a mandatory FOP labeling system.  In 2011, the Institute of Medicine (IOM) issued a report on the topic, recommending a system that granted foods stars based on the amounts of fat, sugar and salt they contained.  As of yet, FDA has taken no public action to implement this system.  Chronically underfunded, the agency has been overwhelmed by an expanded food safety mandate in recent years and has had to prioritize those responsibilities over labeling. The UK, on the other hand, is making inroads, having just recently introduced a system.  However, they do not mandate its use and thus estimate the voluntary regime will cover 60 percent of foods.  Still, this is certainly a step in the right direction.  A single uniform, government-issued system provides clarity and consumer demand can pressure non-compliant companies into implementing the system.  Here’s to hoping FDA takes note and moves forward with its own long-delayed regulations.

Debate about the farm bill rages on in Congress – National Consumers League

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By Teresa Green, Linda Golodner Food Safety & Nutrition Fellow For anyone interested in food and agricultural policy, the last month has been an exciting and tense one.  As both the House and the Senate took up long delayed farm bills, many advocates were hopeful that the final bill, which provides a foundation for important farm and nutrition programs, would finally pass after a year’s worth of delays.

Surprisingly, and to the shock of many who have followed its progress closely, the farm bill was voted down in the House.  The bill was defeated, ironically enough, by a group of bipartisan Congressmen. Democrats voted against the bill because of its draconian cuts to the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), and some Republicans voted against the bill because they felt the bill did not do enough to curtail spending.  This historic defeat of the farm bill has imparted some important lessons legislators and advocates would do well to heed before once again trying to pass the bill.

  1.  While it’s called the farm bill, SNAP is key.  Despite its name, somewhere around 76% of farm bill spending goes to nutrition programs.  It is this coupling that has for many years enabled the passage of expensive farm programs and continued funding of safety net programs which are unpopular with many Republicans.  As we’ve written before, there are many myths floating around about SNAP, and they serve to fuel strong and often heated debate.  Several amendments dealing with SNAP were offered during the floor debate on the bill, including mandatory drug testing and work requirements.  These amendments are largely credited with losing the necessary Democratic votes.
  2. Bipartisanship is integral to passing the farm bill.  Given that some Republicans feel that the farm bill should face even more drastic cuts than those proposed, the Republican leadership was counting on a handful of Democratic votes to help push the vote through.  Without these votes, it may prove impossible to get a farm bill passed.  This emphasizes the importance of reaching across the aisle when trying to get through “must pass” legislation, lessons we can only hope the leadership will take in mind while working on immigration reform and next year’s budget.
  3. Kicking the can down the road doesn’t always work.  When the farm bill came was about to expire last year in the midst of an election, House leadership refused to bring the bill to the floor.  Instead, they extended the old bill for one year, seemingly confident that the legislation could be passed after the election.  Last week’s vote proves that this was not the case.  The leadership will now have to come up with a new and innovative strategy to get the farm bill passed, a tricky prospect given the strong opinions on both sides of the issue.

While the vote surprised House leadership as well as those working on the farm bill, in the current climate, it was not entirely unforeseeable.  If recent action in Congress has taught us anything, it is that we can hardly predict what action that body will take.  For advocates, this should be an encouragement to pursue issues that may seem unlikely to pass.  And this unexpected vote gives us another chance to make sure important safety net programs like SNAP are fully funded, an opportunity we should not let go to waste.