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Mandatory versus voluntary approaches to food safety

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  • Kathleen Segerson

    (Department of Economics, University of Connecticut, Storrs, CT 06269-1063)

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    Abstract

    Food safety policy is currently based on a combination of voluntary measures undertaken by producers and regulatory measures imposed, for example, by the US Department of Agriculture and the Food and Drug Administration (e.g., mandatory HACCP systems). This article addresses the question of whether reliance on voluntary approaches is likely to lead to adequate consumer protection. Drawing on recent literature on the choice between voluntary and mandatory approach to environmental protection and standard models of product liability, the article develops an analytical framework to determine the conditions under which firms are likely to invest in food safety voluntarily. The results suggest that for goods for which consumers can readily detect safety characteristics, market forces can create incentives for voluntary provision of safety. However, for goods for which consumers cannot readily detect food risks, market forces are not likely to be sufficient to afford adequate protection. Even in such a context, however, direct government regulation is not always necessary. The threat of the imposition of mandatory controls (possibly coupled with financial inducements for undertaking voluntary approaches) may provide firms with sufficient incentives to invest in food safety in an effort to avoid those controls. However, if firms do not respond, regulators must be prepared to follow through on their threats and impose a regulatory system of protection. © 1999 John Wiley & Sons, Inc.

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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

    Volume (Year): 15 (1999)
    Issue (Month): 1 ()
    Pages: 53-70

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    Handle: RePEc:wly:agribz:v:15:y:1999:i:1:p:53-70

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    Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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    Cited by:
    1. Olivier Bonroy & Christos Constantatos, 2008. "On the use of labels in credence goods markets," Working Papers 20521, Institut National de la Recherche Agronomique, France.
    2. J. Lepoutre & N. A. Dentchev & A. Heene, 2005. "Dealing With Uncertainties When Governing CSR Policies," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium, Ghent University, Faculty of Economics and Business Administration 05/337, Ghent University, Faculty of Economics and Business Administration.
    3. Goldsmith, Peter D. & Turan, Nesve A. & Gow, Hamish R., 2004. "Firms, Incentives, And The Supply Of Food Safety: A Formal Model Of Government Enforcement," 2004 Annual meeting, August 1-4, Denver, CO, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 20343, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Fares, M. & Rouvière, E., 2006. "Voluntary Approaches to Food Safety : A Unified Framework," Working Papers MOISA, UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro, IRD - Montpellier, France 200615, UMR MOISA : Marchés, Organisations, Institutions et Stratégies d'Acteurs : CIHEAM-IAMM, CIRAD, INRA, Montpellier SupAgro, IRD - Montpellier, France.
    5. McCluskey, Jill J., 1999. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia, Australian Agricultural and Resource Economics Society 123706, Australian Agricultural and Resource Economics Society.
    6. Auriol, Emmanuelle & Schilizzi, Steven, 2003. "Quality Signaling through Certification. Theory and an Application to Agricultural Seed Market," IDEI Working Papers, Institut d'Économie Industrielle (IDEI), Toulouse 165, Institut d'Économie Industrielle (IDEI), Toulouse.
    7. Donald MacLaren, 2004. "International Food Safety Standard and Processed Food Exports: Issues of Firm-Level Analysis," Department of Economics - Working Papers Series, The University of Melbourne 905, The University of Melbourne.
    8. Fares, M'hand & Rouviere, Elodie, 2010. "The implementation mechanisms of voluntary food safety systems," Food Policy, Elsevier, Elsevier, vol. 35(5), pages 412-418, October.
    9. Henson, Spencer & Masakure, Oliver & Cranfield, John, 2011. "Do Fresh Produce Exporters in Sub-Saharan Africa Benefit from GlobalGAP Certification?," World Development, Elsevier, Elsevier, vol. 39(3), pages 375-386, March.
    10. Northen, James R., 2001. "Using Farm Assurance Schemes To Signal Food Safety To Multiple Food Retailers In The U.K," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), International Food and Agribusiness Management Association (IAMA), vol. 4(01).
    11. Henson, Spencer J. & Hooker, Neal H., 2001. "Private Sector Management Of Food Safety: Public Regulation And The Role Of Private Controls," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), International Food and Agribusiness Management Association (IAMA), vol. 4(01).
    12. Elamin H. Elbasha* & T. Lynn Riggs, 2003. "The effects of information on producer and consumer incentives to undertake food safety efforts: A theoretical model and policy implications," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(1), pages 29-42.
    13. Noelke, Corinna M. & Caswell, Julie A., 2000. "A Model Of The Implementation Of Quality Management Systems For Credence Attributes," 2000 Annual meeting, July 30-August 2, Tampa, FL, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21874, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Jayasinghe-Mudalige, Udith K. & Henson, Spencer J., 2004. "Quantifying The Impact Of Economic Incentives On Firms' Food Safety Responsiveness: The Case Of Red Meat And Poultry Processing Sector In Canada," 2004 Annual meeting, August 1-4, Denver, CO, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 20419, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Loureiro, Maria L., 2008. "Liability and food safety provision: Empirical evidence from the US," International Review of Law and Economics, Elsevier, Elsevier, vol. 28(3), pages 204-211, September.
    16. Scott A. Malcolm & Clare A. Narrod & Tanya Roberts & Michael Ollinger, 2004. "Evaluating the economic effectiveness of pathogen reduction technologies in cattle slaughter plants," Agribusiness, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 20(1), pages 109-123.
    17. Zhou, Jiehong & Yue, Chengyan, 2010. "Investigating Chinese Vegetable Processing Firms’ Economic Incentives to Enhance Quality and Safety Controls," Journal of Food Distribution Research, Food Distribution Research Society, Food Distribution Research Society, vol. 41(3), November.
    18. Fares, M'Hand & Rouviere, Elodie, 2006. "Voluntary approaches to food safety: New insights," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece, European Association of Agricultural Economists 10081, European Association of Agricultural Economists.
    19. Saak, Alexander E., 2003. "Identity Preservation And False Non-Gmo Labeling In The Food Supply Chain," 2003 Annual meeting, July 27-30, Montreal, Canada, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 22182, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Hobbs, Jill E., 2004. "Traceability in the Canadian Red Meat Sector," Economic and Market Information, Agriculture and Agri-Food Canada 55304, Agriculture and Agri-Food Canada.
    21. Rouvière, Elodie & Caswell, Julie A., 2012. "From punishment to prevention: A French case study of the introduction of co-regulation in enforcing food safety," Food Policy, Elsevier, Elsevier, vol. 37(3), pages 246-254.

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