Does the USDA have any involvement?
I'm not sure:
More here.The U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) share primary responsibility for overseeing the safety of the U.S. food supply. In addition, all states have their own laws, regulations and agencies dedicated to food safety.
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In many cases, the food safety functions of the FDA and USDA overlap; particularly inspection/enforcement, training, research, and rulemaking, for both domestic and imported food. Both USDA and FDA currently conduct similar inspections at some 1,500 dual jurisdiction establishments -- facilities that produce foods regulated by both agencies.
And why is it that I can buy eggs from a neighbor who has a flock of chickens in their backyard, but I wouldn't be able to buy raw milk from them if they had a couple cows? Or does the government only notice if it becomes more than neighbors selling to neighbors?
Don't know if that's legal. But most people eat cooked eggs (I'm aware of the exceptions). Raw milk is produced to be consumed as is.
New regulations giving the FDA the authority to inspect large commercial egg farms took effect on July 9, 2010. Prior to this rule, FDA inspected egg farms under its broad authorities applicable to all food, focusing on farms already linked to recalls. Apparently, the new rule did not take effect soon enough to allow for proactive inspections by the FDA of the egg farms involved in the August 2010 recall of nearly half a billion eggs for salmonella contamination.
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