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Industry Compliance Costs: What Would They Look Like in a Risk-Based Integrated Food System?

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Author Info
Laurian J. Unnevehr
Helen H. Jensen () (Center for Agricultural and Rural Development (CARD), Midwest Agribusiness Trade Research and Information Center (MATRIC))

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Abstract

Current policies designed to improve food safety rely on regulation and market incentives. However, the mix of both private and public incentives to improve food safety and the dynamics of industry response to regulation make analysis of the costs of food safety complex. The paper provides an overview of costs of food safety regulation and control in recent literature for both pesticide and microbial controls and draws lessons for identifying cost-effective food safety approaches. Four lessons emerge concerning industry compliance costs. First, the distribution of costs is likely to be more important than market price effects. Second, regulation has an impact on long-run incentives to invest in new technologies or inputs and therefore may bias the nature of productivity growth. Third, an analysis of costs informs the choice among regulatory alternatives; allowing market adjustments to mitigate costs and improving upon existing market incentives is likely to be the most effective ways to reach public health goals. And fourth, a risk-based systems approach can be the best way to understand the costs, incentives, and risk outcomes resulting from alternative interventions. However this approach is made difficult by patchwork regulatory authority across the food chain and lack of data required for risk assessment.

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Publisher Info
Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 01-wp278.

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Date of creation: Jun 2001
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Handle: RePEc:ias:cpaper:01-wp278

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References listed on IDEAS
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.:
  1. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June. [Downloadable!] (restricted)
  2. Besanko, David, 1987. "Performance versus design standards in the regulation of pollution," Journal of Public Economics, Elsevier, vol. 34(1), pages 19-44, October. [Downloadable!] (restricted)
  3. repec:jaa:jagape:v:34:y:2002:i:1:p:165-174 is not listed on IDEAS
  4. Hayes, Dermot & Jensen, Helen & Backstrom, Lennart & Fabiosa, Jay, 2002. "Economic Impact of a Ban on the Use of Over the Counter Antibiotics in U.S. Swine Rations," Staff General Research Papers 5139, Iowa State University, Department of Economics.
    Other versions:
  5. Goodhue, Rachael E. & Rausser, Gordon C., 2003. "Value Differentiation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December. [Downloadable!]
  6. Diderrich, V. & Kliebenstein, James & Patton, S. & Zimmerman, J. & Hallam, Arne & Bush, E. & Faulkner, C. & McCord, R., 2002. "Toxoplasma gondii Levels in Swine Operations: Differences Due to Technology Choice and Impacts on Costs of Production," Staff General Research Papers 10111, Iowa State University, Department of Economics.
  7. Helfand, Gloria E, 1991. "Standards versus Standards: The Effects of Different Pollution Restrictions," American Economic Review, American Economic Association, vol. 81(3), pages 622-34, June. [Downloadable!] (restricted)
  8. Zilberman, David & Millock, Katti, 1997. "Pesticide Use And Regulation: Making Economic Sense Out Of An Externality And Regulation Nightmare," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(02), December. [Downloadable!]
  9. Ing-Marie Gren, 1994. "Cost efficient pesticide reductions: A study of Sweden," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(3), pages 279-293, June. [Downloadable!] (restricted)
  10. Onal, Hayri & Unnevehr, Laurian & Bekric, Aleksandar, 2000. " Regional Shifts in Pork Production: Implications for Competition and Food Safety," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(4), pages 968-78, November. [Downloadable!] (restricted)
  11. Jensen, Helen H. & Unnevehr, Laurian J. & Gomez, Miguel I., 1998. "Costs of Improving Food Safety in the Meat Sector (The)," Staff General Research Papers 1156, Iowa State University, Department of Economics. [Downloadable!]
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  12. Osteen, Craig, 1994. "Pesticide Regulation Issues: Living With The Delaney Clause," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(01), July. [Downloadable!]
  13. Hennessy, David A & Roosen, Jutta & Miranowski, John A, 2001. " Leadership and the Provision of Safe Food," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(4), pages 862-74, November. [Downloadable!] (restricted)
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  14. Jensen, Helen H. & Roberts, T. & Unnevehr, L., 2003. "Tracking Foodborne Pathogens from Farm to Table: Data Needs to Evaluate Control Options," Staff General Research Papers 10440, Iowa State University, Department of Economics.
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  15. Teague, Mark L. & Brorsen, B. Wade, 1995. "Pesticide Productivity: What Are The Trends?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(01), July. [Downloadable!]
  16. Jensen, Helen H. & Unnevehr, Laurian J., 1999. "HACCP in Pork Processing: Costs and Benefits," Staff General Research Papers 1632, Iowa State University, Department of Economics.
    Other versions:
  17. Jensen, Helen H. & Unnevehr, Laurian J. & Gomez, Miguel I., 1998. "Costs Of Improving Food Safety In The Meat Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 30(01), July. [Downloadable!]
  18. Unnevehr, Laurian & Jensen, Helen H., 1999. "Economic Implications of Using HACCP as a Food Safety Regulatory Standard (The)," Staff General Research Papers 1631, Iowa State University, Department of Economics. [Downloadable!]
    Other versions:
  19. Roosen, Jutta & Hennessy, David A, 2001. " Capturing Experts' Uncertainty in Welfare Analysis: An Application to Organophosphate Use Regulation in U.S. Apple Production," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(1), pages 166-82, February. [Downloadable!] (restricted)
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  20. Unnevehr, Laurian J. & Jensen, Helen H., 1999. "The economic implications of using HACCP as a food safety regulatory standard," Food Policy, Elsevier, vol. 24(6), pages 625-635, December. [Downloadable!] (restricted)
  21. Crutchfield, Stephen R. & Buzby, Jean C. & Roberts, Tanya & Ollinger, Michael & Lin, C.T. Jordan, 1997. "Economic Assessment of Food Safety Regulations: The New Approach to Meat and Poultry Inspection," Agricultural Economics Reports 34009, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  22. Narrod, Clare A. & Malcolm, Scott A. & Ollinger, Michael & Roberts, Tanya, 1999. "Pathogen Reduction Options In Slaughterhouses And Methods For Evaluating Their Economic Effectiveness," 1999 Annual meeting, August 8-11, Nashville, TN 21562, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  23. Segerson, Kathleen, 1998. "Mandatory vs. Voluntary Approaches to Food Safety," Research Reports 25188, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Goldsmith, Peter & Turan, Nesve A. & Gow, Hamish, 2004. "Firms, Incentives, And The Supply Of Food Safety: A Formal Model Of Government Enforcement," 2004 Annual meeting, August 1-4, Denver, CO 20343, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  2. Agata Pieniadz & Heinrich Hockmann, 2008. "Factors Driving Quality Standard Compliance in the Polish Dairy Sector," Atlantic Economic Journal, International Atlantic Economic Society, vol. 36(1), pages 41-52, March. [Downloadable!] (restricted)
  3. Martinez, Steve W. & Zering, Kelly, 2004. "Pork Quality And The Role Of Market Organizaton," Agricultural Economics Reports 33973, United States Department of Agriculture, Economic Research Service. [Downloadable!]
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