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Costs and risks of conforming to EU traceability requirements: the case of hard red spring wheat

Author

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  • William W. Wilson

    (Department of Agribusiness & Applied Economics, North Dakota State University, Fargo, ND 58105-5636)

  • Xavier Henry

    (Plantureux, Domaine champ clos 04100, Manosque, France)

  • Bruce L. Dahl

    (Department of Agribusiness & Applied Economics, North Dakota State University, P.O. Box 5636, Fargo, ND 58105-5636)

Abstract

European Union (EU) traceability requirements impose added costs and risks on suppliers. A stochastic simulation model is developed to determine optimal testing strategies and marginal costs to conform to EU traceability requirements for exports of non-genetically modified (non-GM) wheat from the United States. The optimal strategy is chosen to maximize an integrator's utility. Cost components include certified seed, certification and auditing, testing, traceability, quality loss, and a premium for the added risk of a dual traceability system over a single non-traceability system. Adventitious commingling risks are defined stochastically. Results indicate that traceability requirements can be conformed to with reasonable buyer and seller risk at a total cost of $18|non-GM mt. [EconLit Subject Descriptors: C150, C610, D810] © 2008 Wiley Periodicals, Inc.

Suggested Citation

  • William W. Wilson & Xavier Henry & Bruce L. Dahl, 2008. "Costs and risks of conforming to EU traceability requirements: the case of hard red spring wheat," Agribusiness, John Wiley & Sons, Ltd., vol. 24(1), pages 85-101.
    • Handle: RePEc:wly:agribz:v:24:y:2008:i:1:p:85-101
    DOI: 10.1002/agr.20148
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    Cited by:

    1. Stranieri, S. & Cavaliere, A. & Banterle, A., 2015. "Voluntary traceability standards: which is the role of economic incentives?," 2015 International European Forum (144th EAAE Seminar), February 9-13, 2015, Innsbruck-Igls, Austria 206213, International European Forum on System Dynamics and Innovation in Food Networks.
    2. Brofman Epelbaum, Freddy Moises & Garcia Martinez, Marian, 2014. "The technological evolution of food traceability systems and their impact on firm sustainable performance: A RBV approach," International Journal of Production Economics, Elsevier, vol. 150(C), pages 215-224.
    3. Latino, Maria Elena & Menegoli, Marta & Lazoi, Mariangela & Corallo, Angelo, 2022. "Voluntary traceability in food supply chain: a framework leading its implementation in Agriculture 4.0," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    4. Fritz, Melanie & Schiefer, Gerhard, 2009. "Tracking, tracing, and business process interests in food commodities: A multi-level decision complexity," International Journal of Production Economics, Elsevier, vol. 117(2), pages 317-329, February.
    5. Mao-Chang Wang & Chin-Ying Yang, 2019. "Analysing the traceability system in herbal product industry by game theory," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(2), pages 74-81.

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