Market Failure-XL Foods

Besides the obvious problems of a single facility turning 4000 cows into two million pounds of meat each and every day, the E.coli outbreak at XL Foods is yet another example of the market leaving public safety as an externality. Gerry Ritz, the federal agriculture minister, is being rightly criticised for allowing XL Foods to continue to operate for a full three weeks after E.coli was first found to be a problem (that’s forty two million pounds of meat). The important point to note though is that without the Canadian Food Inspection Agency the plant wouldn’t have closed at all. The response of this government was irresponsible, but their recent cuts to the agencies that protect Canadians was even more irresponsible. What we need is a stronger role for government, and less reliance on the free market.