The FDA Food Safety and Modernization Act and the Exemption for Small Firms
AbstractThe FDA Food Safety Modernization Act of 2010 is new legislation that mandates, among other things, new food safety standards. The act includes a clause that exempts small firms from new regulatory requirements. This paper investigates the effects of a small firm exemption from more stringent food safety standards. The model compares food safety, total output and the number of market participants for different food safety regulation with and without an exemption for small firms. The numerical examples show that a more stringent food safety regulation increases food safety, increases the price of food, decreases the total output and decreases the number of firms. A new food safety standard with an exemption for small firms increases the average food safety but not as much as with a new standard alone. An exemption for small firms causes the total number of firms to increase.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 103885.
Date of creation: 03 May 2011
Date of revision:
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Food safety; heterogeneous firms; regulation; regulatory exemption; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; D21; M31; Q10; Q18;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-05-24 (Agricultural Economics)
- NEP-ALL-2011-05-24 (All new papers)
- NEP-CMP-2011-05-24 (Computational Economics)
- NEP-REG-2011-05-24 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Arnade, Carlos A. & Calvin, Linda & Kuchler, Fred, 2008. "Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6448, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Rouviere, Elodie & Soubeyran, Raphael, 2012. "Small is Beautiful? Firm's Size, Prevention & Food Safety," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123410, Agricultural and Applied Economics Association.
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