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The FDA Food Safety and Modernization Act and the Exemption for Small Firms

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  • Pouliot, Sebastien

Abstract

The FDA Food Safety Modernization Act of 2010 is new legislation that mandates, among other things, new food safety standards. The act includes a clause that exempts small firms from new regulatory requirements. This paper investigates the effects of a small firm exemption from more stringent food safety standards. The model compares food safety, total output and the number of market participants for different food safety regulation with and without an exemption for small firms. The numerical examples show that a more stringent food safety regulation increases food safety, increases the price of food, decreases the total output and decreases the number of firms. A new food safety standard with an exemption for small firms increases the average food safety but not as much as with a new standard alone. An exemption for small firms causes the total number of firms to increase.

Suggested Citation

  • Pouliot, Sebastien, 2011. "The FDA Food Safety and Modernization Act and the Exemption for Small Firms," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103885, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103885
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    File URL: http://purl.umn.edu/103885
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    References listed on IDEAS

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    1. Arnade, Carlos Anthony & Calvin, Linda & Kuchler, Fred, 2008. "Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6448, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Rouviere, Elodie & Soubeyran, Raphael, 2012. "Small is Beautiful? Firm's Size, Prevention & Food Safety," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123410, Agricultural and Applied Economics Association.
    2. Rouvière, Elodie, 2016. "Small is beautiful: firm size, prevention and food safety," Food Policy, Elsevier, vol. 63(C), pages 12-22.
    3. repec:eee:jfpoli:v:69:y:2017:i:c:p:135-144 is not listed on IDEAS

    More about this item

    Keywords

    Food safety; heterogeneous firms; regulation; regulatory exemption; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; D21; M31; Q10; Q18;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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