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The Production of Safe Food According to Firm Size and Regulatory Exemption: Application to FSMA

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  • Pouliot, Sebastien

Abstract

ABSTRACT One feature of recent food regulations is that they treat small and large farms/firms differently. In this article, the relationship between firm output and food safety depends on firm‐specific efficiency factors and how output and food safety interact in the cost function. The model shows that conditional on the distribution of firm output and food safety, new food safety regulations may increase the number of firms, with or without an exemption for small firms. Food safety regulations affect the composition of firms and may even create entry by less efficient firms. The article discusses implications of the Food Safety Modernization Act which includes exemption for small firms.
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Suggested Citation

  • Pouliot, Sebastien, 2014. "The Production of Safe Food According to Firm Size and Regulatory Exemption: Application to FSMA," Staff General Research Papers Archive 37325, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:37325
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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