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Compliance with International Food Safety Standards in Kenya's Green Bean Industry: Comparison of a Small- and a Large-scale Farm Producing for Export

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  • Julius J. Okello
  • Scott M. Swinton

Abstract

European food safety standards have increased the fixed and transactions costs of Kenyan green bean farmers while requiring more stringent quality monitoring by exporting firms. This paired case study finds that large farms use owner equity to invest in improved facilities. Small farms attain scale economies by joining a marketing group that spreads facility investment costs and reduces the transaction cost to buyers of monitoring small farm performance. Green bean buyers meet the asymmetric information problem by close monitoring, the threat of contract termination, and variable product pricing to induce compliance with the standards. Copyright 2007, Oxford University Press.

Suggested Citation

  • Julius J. Okello & Scott M. Swinton, 2007. "Compliance with International Food Safety Standards in Kenya's Green Bean Industry: Comparison of a Small- and a Large-scale Farm Producing for Export," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 269-285.
  • Handle: RePEc:oup:revage:v:29:y:2007:i:2:p:269-285
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2006.00342.x
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    Cited by:

    1. Hansen, Henrik & Trifković, Neda, 2014. "Food Standards are Good – For Middle-Class Farmers," World Development, Elsevier, vol. 56(C), pages 226-242.
    2. Julius J. Okello & Scott M. Swinton, 2010. "From Circle of Poison to Circle of Virtue: Pesticides, Export Standards and Kenya's Green Bean Farmers," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 209-224.
    3. Rosch, Stephanie & Ortega, David, 2014. "Looking for Causes of Effects: Imperfect Contract Enforcement in Kenya's French Bean Market," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170553, Agricultural and Applied Economics Association.
    4. Rosch, Stephanie D & Zhang, Cathy & Preckel, Paul & Ortega, David L., 2015. "Do Search Frictions Compound Problems of Relational Contracting?," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205779, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    5. Muriithi, Beatrice W. & Matz, Julia Anna, 2015. "Welfare effects of vegetable commercialization: Evidence from smallholder producers in Kenya," Food Policy, Elsevier, vol. 50(C), pages 80-91.
    6. Ochieng, Dennis O. & Veettil, Prakashan C. & Qaim, Matin, 2017. "Farmers’ preferences for supermarket contracts in Kenya," Food Policy, Elsevier, vol. 68(C), pages 100-111.
    7. Seng, Kimty, 2016. "The Effects of Market Participation on Farm Households’ Food Security in Cambodia: An endogenous switching approach," MPRA Paper 69669, University Library of Munich, Germany.
    8. Kariuki, Isaac Maina & Loy, Jens-Peter & Herzfeld, Thomas, 2012. "Farmgate Private Standards and Price Premium: Evidence From the GlobalGAP Scheme in Kenya's French Beans Marketing," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 42-53.
    9. Martha McMahon, 2013. "What Food is to be Kept Safe and for Whom? Food-Safety Governance in an Unsafe Food System," Laws, MDPI, Open Access Journal, vol. 2(4), pages 1-27, October.
    10. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Working Papers JRC101617, Joint Research Centre (Seville site).

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