There are a few major downsides to government control of the food processing system. Because regulation and regulators tend to favor large producers, it can be extremely difficult for smaller producers to meet the demands of the regulations and still make a profit. This stifles competition and isn't healthy for small producers or consumers in the long run.
Another downside is the fact that large corporate producers have a great deal of influence over legislation and in a sense regulate themselves. The food industry is a classic example of "regulatory capture" so it isn't always clear that legislation actually makes food safer as much as it protects the profits of the industry.
Arguably the largest downside of government oversight is that it provides the illusion of safety but tends to be inadequately funded so there are never enough regulators or inspectors to even provide cursory examinations. So most producers get to stamp their products with the USDA seal of approval while only very rarely actually being subject to inspection. This has led to an increasing number of food-borne illness problems around the country.
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