Voluntary approaches to food safety: New insights

Food safety economists have raised numerous questions according to the emergence and the multiplication of safety quality management system within the food supply chain. However, few research deal with the voluntary implementation by firms of these systems (Segerson, 1999; Venturini, 2003; Noelke- Caswell, 2000). Our paper aims to develop a unified analytical framework of these research. We obtain three results. First, in a market model when the mandatory threat is strong, the voluntary adoption of safety measures is an equilibrium without need of the cost differential assumption (Segerson, 1999) nor of a reputation effect (Venturini, 2003). Second, when the mandatory threat is weak the reputation effect and the rule of liability could induce the voluntary adoption on different extent depending on the situation of safety contamination. Third, in a supply chain model we introduce a retailer and show that a well designed contract offered by the retailer induce upstream firms to voluntarily implement safety measures. Private incentives are thus very powerful and can be used as the sole mechanism to implement the efficient system.