Feb. 6 (Bloomberg) -- U.S. Agriculture Secretary Tom Vilsack said the recall of salmonella-tainted peanut products shows the need to modernize the U.S. food safety system and ultimately create a single inspection agency.

The duties now shared by the U.S. Department of Agriculture, the Food and Drug Administration and other government agencies should be combined, Vilsack said today in an interview with Bloomberg News in Washington.

“We need a single agency that’s working in a modern framework,” Vilsack said. “We don’t have that today.”

Salmonella-tainted products produced by Peanut Corp. of America have been blamed for at least eight deaths and 575 illnesses since September. Some 75 companies including Walgreen Co., Kellogg Co. and Safeway Inc. have pulled hundreds of items from shelves because they contain recalled Peanut Corp. products, according to the FDA.

While President Barack Obama has promised a greater emphasis on food safety, Vilsack said he doesn’t expect Congress to approve a unified agency this year. Meanwhile, he said, government departments need to work together more closely and use technology to become faster and more efficient.

The USDA inspects meat, eggs and poultry, while the food and drug agency is responsible for other products that cover about 80 percent of the U.S. food supply.

Peanut Corp. Suspension

The USDA yesterday suspended Peanut Corp. from doing business with the U.S. government for one year and recommended a three-year ban for the closely held Lynchburg, Virginia-based company and its subsidiary, Tidewater Blanching LLC. In addition, Stewart Parnell, Peanut Corp.’s chief executive officer, has been removed from the agency’s Peanut Standards Board, the USDA said in a statement.

Legislation to create a single food-safety agency is introduced annually in Congress. The concept has prominent supporters, including Dick Durbin of Illinois, the Senate’s second-ranking Democrat, and Representative Rosa DeLauro, the Connecticut Democrat who heads an appropriations panel that sets food-program spending.

The George W. Bush administration opposed creating a single food-safety entity. The 58-year-old Vilsack, confirmed as agriculture secretary on Jan. 20, said last week that before a single agency could be discussed, “you’ve got to lay the foundation right.”

About 76 million Americans are sickened by food-borne illness each year, with 5,000 deaths, according to the U.S. Centers for Disease Control and Prevention.

Ethanol Support

On another subject, Vilsack, a former Democratic governor of Iowa, said the USDA is in discussions with the Environmental Protection Agency about raising the amount of corn-based ethanol blended into the U.S. gasoline supply.

VeraSun Energy Corp., the second-largest ethanol maker, filed for Chapter 11 bankruptcy protection in October as an industrywide expansion of production facilities outpaced demand. About 21 percent of the U.S. capacity for production of the alternative fuel is idle, according to ethanol-maker Archer Daniels Midland Co.

“I do think it’s important for us to look for strategies to make sure the infrastructure of the ethanol industry is preserved, because it is a key component to this new energy future the president’s laid out,” Vilsack said.

The EPA in November said it would require gasoline to contain a 10.2 percent blend of biofuels this year.

Vilsack also called for quick passage of an economic stimulus package, which he said would help rural America.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net.

Last Updated: February 6, 2009 11:43 EST