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Costs of monitoring food safety and vertical coordination in agribusiness: What can be learned from the British Food Safety Act 1990?

Author

Listed:
  • Jill E. Hobbs

    (Agricultural Economics and Marketing, Agricultural and Rural Economics Department, The Scottish Agricultural College, Aberdeen, UK)

  • William A. Kerr

    (Agricultural Economics, Department of Economics, The University of Calgary)

Abstract

The British Food Safety Act 1990 may significantly affect the structure of agribusiness. The most important aspect of the new act is the introduction of the “due diligence” defence clause. Food companies must prove that they exhibited due diligence in ensuring that food in their possession conformed to the provisions of the act. This may significantly increase the monitoring costs facing food companies. As a result, alternative forms of vertical coordination that minimise the costs of compliance with the act may evolve. Agribusiness companies need to be aware of the potential impact of the due diligence clause on monitoring costs and policy makers need to consider the implications for industrial structure when framing food safety legislation. © 1992 John Wiley & Sons, Inc.

Suggested Citation

  • Jill E. Hobbs & William A. Kerr, 1992. "Costs of monitoring food safety and vertical coordination in agribusiness: What can be learned from the British Food Safety Act 1990?," Agribusiness, John Wiley & Sons, Ltd., vol. 8(6), pages 575-584.
    • Handle: RePEc:wly:agribz:v:8:y:1992:i:6:p:575-584
    DOI: 10.1002/1520-6297(199211)8:6<575::AID-AGR2720080608>3.0.CO;2-N
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    References listed on IDEAS

    as
    1. Pashigian, B Peter, 1982. "A Theory of Prevention and Legal Defense with an Application to the Legal Costs of Companies," Journal of Law and Economics, University of Chicago Press, vol. 25(2), pages 247-270, October.
    2. Terence J. Centner & Michael E. Wetzstein, 1987. "Reducing Moral Hazard Associated with Implied Warranties of Animal Health," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(1), pages 143-150.
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    Citations

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    Cited by:

    1. Jean Marie Codron & M'Hand Fares & Elodie Rouviere, 2007. "From public to private safety regulation?," Post-Print hal-01323247, HAL.
    2. Mojduszka, Eliza M., 2004. "Private And Public Food Safety Control Mechanisms: Interdependence And Effectiveness," 2004 Annual meeting, August 1-4, Denver, CO 19987, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. E. Rouvière & K. Latouche, 2014. "Impact of liability rules on modes of coordination for food safety in supply chains," European Journal of Law and Economics, Springer, vol. 37(1), pages 111-130, February.
    4. Nakuja, Tekuni & Akhand, M. & Hobbs, Jill E. & Kerr, William A., 2011. "The New Food Safety Regime in the US: How Will it Affect Canadian Competitiveness," Trade Policy Briefs 116852, Canadian Agricultural Trade Policy Research Network.
    5. Young, Linda M. & Hobbs, Jill E., 2000. "Public Policy Responses To Increased Vertical Linkages In Agri-Food Supply Chains," Research Discussion Papers 29237, Montana State University, Department of Agricultural Economics and Economics, Trade Research Center.
    6. Buzby, Jean C. & Frenzen, Paul D., 1999. "Food safety and product liability," Food Policy, Elsevier, vol. 24(6), pages 637-651, December.
    7. Aubert, M. & Bouhsina, Z. & Codron, J.M. & Rousset, S., 2013. "Pesticide safety risk, food chain organization, and the adoption of sustainable farming practices. The case of Moroccan early tomatoes," Working Papers MoISA 201304, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
    8. Northen, James R., 2001. "Using Farm Assurance Schemes To Signal Food Safety To Multiple Food Retailers In The U.K," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 4(1), pages 1-14.
    9. Rouvière, Elodie & Royer, Annie, 2017. "Public Private Partnerships in food industries: A road to success?," Food Policy, Elsevier, vol. 69(C), pages 135-144.
    10. Mainville, Denise Y. & Zylbersztajn, Decio & Farina, Elizabeth M.M.Q. & Reardon, Thomas, 2005. "Determinants of retailers' decisions to use public or private grades and standards: Evidence from the fresh produce market of Sao Paulo, Brazil," Food Policy, Elsevier, vol. 30(3), pages 334-353, June.
    11. Crutchfield, Stephen R. & Buzby, Jean C. & Roberts, Tanya & Ollinger, Michael & Lin, Chung-Tung Jordan, 1997. "Economic Assessment of Food Safety Regulations: The New Approach to Meat and Poultry Inspection," Agricultural Economic Reports 34009, United States Department of Agriculture, Economic Research Service.
    12. Garcia Martinez, Marian & Poole, Nigel, 2004. "The development of private fresh produce safety standards: implications for developing Mediterranean exporting countries," Food Policy, Elsevier, vol. 29(3), pages 229-255, June.
    13. Michael Friis Jensen, 2005. "Capacity Building for Pro-Poor Trade: Learning from the Limitations in Current Models," Human Development Occasional Papers (1992-2007) HDOCPA-2005-15, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    14. Holleran, Erin & Bredahl, Maury E. & Zaibet, Lokman, 1999. "Private incentives for adopting food safety and quality assurance," Food Policy, Elsevier, vol. 24(6), pages 669-683, December.

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