Which economic tools for quality regulation? Markets and regulations in the agrifood industry

Faced with the issues of obesity and malnutrition, sanitary crises, the presence of chemical residue in food, issues surrounding market authorizations for genetically modified organisms or meat from cloned animals and so on, the Public Authorities must often intervene to guarantee the transparency of information toward consumers and a satisfactory quality level. However, the impacts of such interventions are not simple and require painstaking research. For example, when the information to consumers is imperfect, the introduction of a minimum quality standard may lead to a reduction in competition. Conversely, by sharing its advertising cost between producers, a collective information policy such as generic advertising counteracts the reduction in competition inherent in advertising, quality or safety expenditure. Furthermore, from an analysis of consumer behaviour faced with the risks (methyl-mercury) and benefits (omega-3) of fish consumption, we show that a taxation/subsidy policy is more efficient than the information policies most often implemented in such a case. A judicious choice between the tax levels applied to the species with toxic product and the subsidy levels to the healthiest species may even result in market regulation with a balanced public budget.