nach oben

Erschienen in:

2015 | OriginalPaper | Buchkapitel

5. On the Emergence of Private Standards: An Industrial Organization Approach

verfasst von : Abdelhakim Hammoudi, Cristina Grazia, Oualid Hamza

Erschienen in: Food Safety, Market Organization, Trade and Development

Verlag: Springer International Publishing

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

This contribution aims at providing a focused discussion on the main economic issues associated with the emergence of private standards in agrifood chains. Public and private modes for food safety management are explored. Based on a critical review of the recent developments of Industrial Organization (IO) approaches, this contribution examines the rationale behind the emergence of private strategies for food safety governance, their effects on the food supply chain organization, and the strategic interactions between public regulator and private actors in the provision of food safety in agrifood markets. The analysis then draws the attention on the interactions between public regulatory instances (notably between the legislation and the official control system) and on their influence on the incentive for firms to develop voluntary standards. By focusing on buyer-supplier relations in international food supply chains, and based on recent theoretical developments in the IO literature, a simple formalization is finally proposed to investigate the role of public “output standards” and control imperfections in shaping buyer incentive to impose “process standards” over suppliers for import safety management purposes.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel Retail Driven Food Safety Regulation

Nächstes Kapitel Consumers’ Behaviour Towards Food Safety: A Literature Review

Nur mit Berechtigung zugänglich

Based on the Regulation (EC) No 178/2002, it sets the principles of primary responsibility of food business operators, traceability, the general implementation of procedures based on HACCP (Hazard Critical Control Points) principles, and the application of food hygiene practices.

Regulation (EC) No 882/2004 “lays down general rules for the performance of official controls to verify compliance with rules aiming, in particular, at preventing, eliminating or reducing to acceptable levels risks to humans and animals, either directly or through the environment; and guaranteeing fair practices in feed and food trade and protecting consumer interests, including feed and food labelling and other forms of consumer information”.

E.g. upgrade handling and hygiene practices, upgrade equipment and buildings for chemical storage, hygiene and temperature controlled facilities, pesticide storage units, pesticides disposal pits, technical skills, etc.

Since the intermediary price on the safe market partially depends on the number of adhering producers compared to the number of adhering retailers, a relatively high number of adhering retailers is needed to assure producers’ participation. Nevertheless, the possible free-riding behaviors may provide a disincentive for individual adhesion. For this reason, liability may be necessary for this type of initiatives to be adopted by a number of operators high enough to reduce market risk.

The progressive globalization of agrifood chains with the emergence of retail-led supply chains “standardizing” over suppliers and the increasingly quality-based competition, suggest that both collective and individual approaches will coexist on the market in the long term (even if each of these approaches may evolve towards new forms of governance).

The average risk is the sum of the risk on the “safer” market and on the risk on the “generic” market.

This conceptual framework is part of the typology of n-person games. It allows dealing with a number N (N > 2) of players and formally representing without loss of generality agreements that may include the whole set or a subset of players.

The authors consider the level of average risk as an indicator of the risk associated with all markets. The “average risk” results from the heterogeneous quality of production practices of upstream producers participating in the activity.

This specificity of agrifood products deals with the concept of “credence goods” and implies that consumers may under- or overestimate the risk of product failure related to consumption.

As explained in Sect. 5.3.1, private standards act to protect firms’ reputation against the consequences of product failures (Fulponi 2006). The “fear of consequences” may depend on product liability laws (e.g., the 1990 Food Safety Act or the 2011 Food Safety Modernization Act in the United States), from penalties set by enforcement authorities (e.g., fines, product recalls), or more generally, from the prejudicial effects of product failure on reputation.

This exclusion effect has been explained in the literature as a consequence of the “entry costs” in terms of farm upgrading becoming prohibitively large for small scale growers, thus resulting in a reduction of commercialized volumes or the exclusion of (smallholder) farmers from high-value global chains (Jaffee 2003; Dolan and Humphrey 2000).

Indeed, the evidence for the private standards’ impact on farmers is mixed, with some studies showing smallholder “inclusion effects” (Gulati et al. 2007; Minten et al. 2009; Minot and Ngigi 2004), opportunities provided to smallholders by buyer-driven supply chains (Lee et al. 2012) and/or revenue/productivity gains for farmers who have achieved compliance (Kariuki et al. 2012; Henson et al. 2011; Maertens and Swinnen 2009; Okello and Swinton 2009) or reduced pesticide application (Asfaw et al. 2008).

For example, in a competitive context, the introduction of a MQS may reduce the quality range offered to consumers and the average quality (Scarpa 1998; Crampes and Hollander 1995; Ronnen 1991). Furthermore, setting the social welfare maximizing MQS may have contrasting effects on consumer surplus at the expense of high-WTPs for consumers (Ecchia and Lambertini 1997).

For example, existing works have addressed supply chain contracting (Novak and Stern 2008; Taylor and Xiao 2009) or the design of appropriate mechanisms to induce suppliers’ quality efforts (Balachandran and Radhakrishnan 2005; Hwang et al. 2006).

Fares and Rouvière (2010) enrich the analysis by distinguishing between “high” risk situation (a contamination episode can have strong and immediate consequences for consumers), and “low” risk situation (more silent risks). In this model, if there is no threat of public intervention, the incentive for the firm still depends on the “carrot and stick” mechanism, but firms are more likely to implement the measure voluntarily in a low risk situation than in a high risk situation (unless the legal rule is sufficiently efficient).

Inversely, considering a threat to be credible is the same as saying that if the game progresses at the point where the threat is supposed to be carried out, the threat will, in fact, be acted on.

Starbird and Amanor-Boadu (2007) use a principal-agent model in the context of adverse selection to examine how contracts that include traceability can be used to select against producers who cannot meet processor’s safety specifications. The authors show that the motivation to select against unsafe producers depends on the magnitude of the failure costs and the proportion of the failure costs allocated to producers. Starbird (2005) examines the influence of inspection policies set by the principal on the efforts exerted by an agent (producer) concerning product safety. The authors show that inspection policies affect the producer’s willingness to exert higher effort to ensure safety. See also Fox and Hennessy (1999) for an analysis of the effect of random and terminal inspections on the behavior of a producer afflicted with random contamination over time.

The simple model presented in this section is based on Grazia et al. (2012, 2014). The main mathematical details and parameters of this model are presented in the appendix of this chapter. For a more detailed description, see Hamza et al. (2015).

These empirical evidences clearly emerge within buyer-supplier relations in global agrifood chains (producers/exporters and importers). Preliminary results of empirical surveys on importers, conducted within the framework of the SAFEMED Project “Food safety regulations, supply chains structure, market access and international competition”, coordinated by INRA-ALISS, highlight the role of trust and reliability, within the criteria for supplier selection, as one of the mechanisms to ensure the safety of procurement. For more details on the SAFEMED project, see the following website: http://www.arimnet.net/Form_website_SAFEMED_corrected2.pdf

Asfaw S, Mithöfer D, Waibel H (2008) EU private agri-food standards in African high-value crops: pesticide use and farm-level productivity. In: 12th congress of the European association of agricultural economists (EAAE), Ghent, 26–29 August 2008

Balachandran KR, Radhakrishnan S (2005) Quality implications of warranties in a supply chain. Manag Sci 51(8):1266–1277CrossRef

Bloch F (1995) Endogenous structures of association in oligopolies. Rand J Econ 26(3):537–556CrossRef

Caswell JA, Johnson GV (1991) Firm strategic response to food safety and nutrition regulation. In: Caswell JA (ed) Economics of food safety. Elsevier Science, New York, NYCrossRef

Coglianese C, Lazer D (2003) Management-based regulation: prescribing private management to achieve public goals. Law Soc Rev 37(4):691–730CrossRef

Crampes C, Hollander A (1995) Duopoly and quality standards. Eur Econ Rev 39(1):71–82CrossRef

d’Aspremont C, Jacquemin A, Gabszewicz JJ, Weymark JA (1983) On the stability of collusive price leadership. Can J Econ 16(1):17–25CrossRef

Dolan C, Humphrey J (2000) Governance and trade in fresh vegetables: the impact of UK supermarkets on the African horticulture industry. J Dev Stud 37(2):147–176CrossRef

Ecchia G, Lambertini L (1997) Minimum quality standards and collusion. J Ind Econ 45(1):101–113CrossRef

Fares M, Rouvière E (2010) The implementation mechanism of voluntary food safety systems. Food Policy 35(5):412–418CrossRef

Fox JA, Hennessy DA (1999) Cost-effective hazard control in food handling. Am J Agric Econ 81(2):359–372CrossRef

Fulponi L (2006) Private voluntary standards in the food system: the perspective of major food retailers in OECD countries. Food Policy 31(1):1–13CrossRef

Garcia Martinez M, Verbruggen P, Fearne A (2013) Risk-based approaches to food safety regulation: what role for co-regulation? J Risk Res 16(9):1101–1121CrossRef

Garella PG, Petrakis E (2008) Minimum quality standards and consumers’ information. Econ Theory 36(2):283–302CrossRef

Giraud-Héraud E, Hoffmann R (2013) New look at competition issues: the rise of norms and standards. In: 5th OECD food chain analysis network meeting, Paris, 30–31 October 2013. Competition along the Food Chain. Available from http://www.oecd.org/site/agrfcn/

Giraud-Héraud E, Rouached L, Soler L-G (2006) Private labels and public quality standards: how can consumer trust be restored after the mad cow crisis? Quant Mark Econ 4(1):31–55CrossRef

Giraud-Héraud E, Hammoudi A, Hoffmann R, Soler L-G (2012a) Joint private safety standards and vertical relationships in food retailing. J Econ Manag Strateg 21(1):179–212CrossRef

Giraud-Héraud E, Grazia C, Hammoudi A (2012b) Explaining the emergence of private standards in food supply chains. Cahier Polytechnique 2012–30, Département d’Economie, Ecole Polytechnique, Paris. Available from http://hal.archives-ouvertes.fr/hal-00749345

Grazia C, Hammoudi A, Hamza O (2012) Sanitary and phytosanitary standards: does consumers’ health protection justify developing countries’ producers’ exclusion. Rev Agric Environ Stud 93(2):145–170

Grazia C, Hammoudi A, Hamza O (2014) Quelle légitimité à la réglementation SPS européenne: une approche d’économie industrielle. In: Hammoudi A, Grazia C, Surry Y (eds) Sécurité Sanitaire des Aliments. Régulation, Analyses économiques et Detours d’Expérience. Hermès-Lavoisier, Paris

Gulati A, Minot N, Delgado C, Bora S (2007) Growth in high value horticulture in Asia and the emergence of vertical links with farmers. In: Swinnen JFM (ed) Global supply chains, standards, and the poor. CABI Publications, Wallingford

Hamza O, Hammoudi A, Aliouat B, Grazia C (2015) Relation verticale dans une filière agroalimentaire et qualité sanitaire: confiance, contrat ou coopération? Revue Economies & Sociétés, série ¨Systémes agroalimentaires£, 36(10):1589–1614

Hatanaka M, Bain C, Busch L (2005) Third-party certification in the global agri-food system. Food Policy 30(3):354–369CrossRef

Henson S, Humphrey J (2009) The impacts of private food safety standards on the food chain and public standard-setting processes. Paper prepared for FAIO/WHO, Rome and Geneva, 61 pp

Henson S, Northen J (1998) Economic determinants of food safety controls in supply of retailer own-branded products in United Kingdom. Agribusiness 14(2):113–126CrossRef

Henson S, Reardon T (2005) Private agri-food standards: implications for food policy and the agri-food system. Food Policy 30(3):241–253CrossRef

Henson S, Masakure O, Cranfield J (2011) Do fresh produce exporters in Sub-Saharan African benefit from GlobalGAP certification? World Dev 39(3):375–386CrossRef

Hobbs JE (2004) Information asymmetries and the role of traceability systems. Agribusiness 20(4):397–415CrossRef

Hobbs JE (2006) Liability and traceability in agri-food supply chains. In: Ondersteijn CJM, Wijnands JHM, Huirne RBM, van Kooten O (eds) Quantifying the agri-food supply chain. Springer, Heidelberg, pp 85–100, Chap 7

Holleran E, Bredahl ME, Zaibet L (1999) Private incentives for adopting food safety and quality insurance. Food Policy 24(6):669–683CrossRef

Homer S (2010) Standards and market preferences: opportunities and constraints. In: 3rd instalment under the AAACP-funded series of high value agricultural seminars. Standards and Market Preferences. Available from http://www.globalhort.org/media/uploads/File/Video%20Conferences/VC3%20Issue%20Paper.pdf

Humphrey J (2011) Standards, food safety and trade: the European Union and the United States. NTM-IMPACT Working Paper 11/14, October 2011, p 67

Hwang I, Radhakrishnan S, Su LN (2006) Vendor certification and appraisal: implications and supplier quality. Manag Sci 52(10):1472–1482CrossRef

Jaffee S (2003) From challenge to opportunity: transforming Kenya’s fresh vegetable trade in the context of emerging food safety and other standards in Europe. Agriculture and rural development discussion paper no 1. The World Bank, Washington, DC

Kariuki IM, Loy J-P, Herzfeld T (2012) Farmgate private standards and price premium: evidence from the GlobalGAP scheme in Kenya’s French beans marketing. Agribusiness 28(1):42–53CrossRef

Lee J, Gereffi G, Beauvais J (2012) Global value chains and agrifood standards: challenges and possibilities for smallholders in developing countries. Proc Natl Acad Sci, 109(31):12326–12331.CrossRef

Lutz S, Lyon TP, Maxwell JW (2000) Quality leadership when regulatory standards are forthcoming. J Ind Econ 48(3):331–348CrossRef

Maertens M, Swinnen J (2009) Trade, standards, and poverty: evidence from Senegal. World Dev 37(1):161–178CrossRef

McCarthy M, Henson S (2005) Perceived risk and risk reduction strategies in the choice of beef by Irish consumers. Food Qual Prefer 16(5):435–445CrossRef

McCorriston S, Sheldon I (2007) Trade liberalization and rent distribution in vertically-related markets. In: Swinnen J (ed) Global supply chains, standards, and the poor: how the globalization of food systems and standards affects rural development and poverty. CABI, Wallingford

Minot N, Ngigi M (2004) Are horticultural exports a replicable success story? Evidence from Kenya and Côte d’Ivoire. EPTD/MTID discussion papers n.120/n.73. International Food Policy Research Institute, Washington, DC

Minten B, Randrianarison L, Swinnen JF (2009) Global retail chains and poor farmers: evidence from Madagascar. World Dev 37(11):1728–1741CrossRef

Mitchell V-W, McGoldrick PJ (1996) Consumers’ risk reduction strategies: a review and synthesis. Int Rev Retail Distrib Consum Res 6(1):1–33CrossRef

Novak S, Stern S (2008) How does outsourcing affect performance dynamics? Evidence from the automobile industry. Manag Sci 54(12):1963–1979CrossRef

Okello JJ, Swinton SM (2009) From circle of poison to circle of virtue: pesticides, export standards and Kenya’s green bean farmers. J Agric Econ 61(2):209–224CrossRef

Polinsky AM, Rogerson WP (1983) Products liability, consumers misperceptions and market power. Bell J Econ 14(2):581–589CrossRef

Polinsky AM, Shavell S (2006) Public enforcement of law, Stanford law school, John M. Olin program in law and economics. Working Paper No. 322. Stanford University, CA

Reardon T, Farina E (2002) The rise of private food quality and safety standards: illustrations from Brazil. Int Food Agribus Manag Rev 4(4):413–421CrossRef

Reardon T, Codron J-M, Busch L, Bingen J, Harris C (2001) Global change in agrifood grades and standards: agribusiness strategic responses in developing countries. Int Food Agribus Manag Rev 2(3/4):421–435

Ronnen U (1991) Minimum quality standards, fixed costs, and competition. Rand J Econ 22(4):490–504CrossRef

Rouvière E, Caswell JA (2012) From punishment to prevention: a French case study of the introduction of co-regulation in enforcing food safety. Food Policy 37(3):246–254CrossRef

Rouvière E, Latouche K (2014) Impact of liability rules on modes of coordination for food safety in supply chains. Eur J Law Econ 37(1):111–130CrossRef

Scarpa C (1998) Minimum quality standards with more than two retailers. Int J Ind Organ 16(5):665–676CrossRef

Segerson K (1999) Mandatory versus voluntary approaches to food safety. Agribusiness 15(1):53–70CrossRef

Selten R (1965) Spieltheoretische behandlung eines oligopolmodells mit nachfragetragheit. Zeitschrift für gesamte Staatswissenschaft 121(2):301–324

Shavell S (1984) Liability for harm versus regulation of safety. J Leg Stud 13(2):357–374CrossRef

Starbird SA (2005) Moral hazard, inspection policy, and food safety. Am J Agric Econ 87(1):15–27CrossRef

Starbird SA, Amanor-Boadu V (2007) Contract selectivity, food safety, and traceability. J Agric Food Ind Organ 5(1):1–22

Taylor TA, Xiao W (2009) Incentives for retailer forecasting: rebates vs. returns. Manag Sci 55(10):1654–1669CrossRef

Whitakert B, Springer J, Defize PR, Dekoe WJ, Coker RD (1995) Evaluation of sampling plan used in the United States, United Kingdom and the Netherlands to test raw shelled peanuts for aflatoxins. J AOAC Int 78(4):1010–1018

Willems S, Roth E, van Roekel J (2005) Changing European public and private food safety and quality requirements – challenges for developing country fresh produce and fish exporters – European buyers’ survey. The World Bank, Agricultural and Rural Development Discussion Paper 15, Cost of compliance with SPS standards. The World Bank, Washington, DC

Titel: On the Emergence of Private Standards: An Industrial Organization Approach
verfasst von: Abdelhakim Hammoudi
Cristina Grazia
Oualid Hamza
Verlag: Springer International Publishing
Buch: Food Safety, Market Organization, Trade and Development
Print ISBN: 978-3-319-15226-4

Electronic ISBN: 978-3-319-15227-1

Copyright-Jahr: 2015
DOI: https://doi.org/10.1007/978-3-319-15227-1_5

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Springer Professional "Technik"

Premium Partner