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The Direct and Indirect Costs of Food-Safety Regulation

  • Michael Ollinger
  • Danna Moore

The compliance costs of the Pathogen Reduction Hazard Analysis Critical Control Program (PR/HACCP) rule have been controversial. Previous reports have used limited data to evaluate its overall and component costs. This paper addresses those deficiencies by examining compliance costs with data from a national survey of meat and poultry plants. Results indicate that (a) regulation favors large, more specialized plants over small, diversified ones, (b) private actions incur considerable costs, and (c), except for chicken slaughter, Federally mandated processing tasks are 160-500% more costly than allowing plants to meet standards using whatever food-safety technology they choose. Copyright 2009 Agricultural and Applied Economics Association

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Article provided by Agricultural and Applied Economics Association in its journal Review of Agricultural Economics.

Volume (Year): 31 (2009)
Issue (Month): 2 (06)
Pages: 247-265

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Handle: RePEc:oup:revage:v:31:y:2009:i:2:p:247-265
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  1. Henson, Spencer & Reardon, Thomas, 2005. "Private agri-food standards: Implications for food policy and the agri-food system," Food Policy, Elsevier, vol. 30(3), pages 241-253, June.
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  4. Fernando Balsevich & Julio A. Berdegué & Luis Flores & Denise Mainville & Thomas Reardon, 2003. "Supermarkets and Produce Quality and Safety Standards in Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1147-1154.
  5. Ollinger, Michael & Moore, Danna L. & Chandran, Ram, 2004. "Meat And Poultry Plants' Food Safety Investments: Survey Findings," Technical Bulletins 33559, United States Department of Agriculture, Economic Research Service.
  6. Spencer Henson & James Northen, 1998. "Economic determinants of food safety controls in supply of retailer own-branded products in United Kingdom," Agribusiness, John Wiley & Sons, Ltd., vol. 14(2), pages 113-126.
  7. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 239-64, October.
  8. Pashigian, B Peter, 1984. "The Effect of Environmental Regulation on Optimal Plant Size and Factor Shares," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 1-28, April.
  9. Starbird, S. Andrew, 2005. "Supply Chain Contracts and Food Safety," Choices, Agricultural and Applied Economics Association, vol. 20(2).
  10. Jeffrey J. Reimer, 2006. "Vertical Integration in the Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 234-248.
  11. Ollinger, Michael, 2004. "The Impact Of Market Mechanisms And Haccp Regulation On Food Safety Quality," 2004 Annual meeting, August 1-4, Denver, CO 20150, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  12. Ollinger, Michael & Mueller, Valerie, 2003. "Managing For Safer Food: The Economics Of Sanitation And Process Controls In Meat And Poultry Plants," Agricultural Economics Reports 33975, United States Department of Agriculture, Economic Research Service.
  13. Codron, Jean-Marie & Giraud-Heraud, Eric & Soler, Louis-Georges, 2005. "Minimum quality standards, premium private labels, and European meat and fresh produce retailing," Food Policy, Elsevier, vol. 30(3), pages 270-283, June.
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