Ground beef recalls and subsequent food safety performance

The U.S. Food Safety Inspection Service recalled more than 370 million pounds of meat and poultry products and oversaw 680 Class 1 recalls over 1998–2014. The cost to firms was about $109 million in lost market value (Pozo and Schroeder, 2016). Thomsen and McKenzie (2001) argue that firms internalize the costs of recalls, and Marino (1997) asserts that high food safety costs lead to food safety investment, but no research has examined the impact of recalls on plant food safety performance. Using performance on tests for Salmonella conducted by the Food Safety Inspection Service as a measure of food safety, this article examines the performance on Salmonella tests of ground beef plants with Class 1 recalls. The results show that plants have high Salmonella levels before and during the year of the recall and have much lower levels afterward. The paper also shows that ground beef plants with recalls are less likely to meet the FSIS standard for Salmonella and that the likelihood of failing to meet the standard increases as the standard becomes more stringent.     

Delisting from EU HACCP certification: Analysis of the Philippine seafood processing industry

This paper employs firm level benefit-cost and supply chain analyses to explore the reasons why a majority of Philippine seafood processing firms discontinued EU HACCP between 2004 and 2005. Results indicate that only 38% of firms remained certified, as they gained significantly from retention of EU markets, gained access to US markets, captured new buyers, and reduced product wastage. However, 62% of the initially certified firms abandoned certification, as they did not realize most of the anticipated benefits from certification and continuing certification was not economically viable. Delisting by some processors led to profit losses among their raw fish and input suppliers amounting to $4–6 million per year, representing approximately 6–9% of the value of Philippine seafood exports to the EU and mainly affecting small aquaculture fish suppliers.     

The implementation mechanisms of voluntary food safety systems

The recent food scares have been the motivation for voluntary programmes on food safety being promoted by public authorities and voluntarily implemented by food operators. In this article, we take into account the nature of the contamination risk to investigate the complementarities between private and public mechanisms for those voluntary systems to be implemented by a firm. We show two main results. First, when the firm directly markets its products to consumers a strong mandatory threat is a sufficient condition to implement voluntary systems whatever the risk of contamination. In contrast, when the mandatory threat is weak voluntary systems should be more implemented in industries where the risk of food contamination is low (pesticide residue) than in industries where the risk of contamination is high (pathogenic contamination). Second, when the risk of food contamination is low and the firm is embedded in a supply chain where the retailer can impose its own safety system, a well-designed penalty contract will induce a voluntary implementation whatever the mandatory threat.     

From mutual recognition to mutual scientific opinion? Constitutional framework for risk analysis in EU food safety law

Regulation 178/2002 (the so-called General Food Law – GFL) codifies risk analysis as the core principle of the modern food safety policy. This article places the GFL in EU multi-level food safety governance and analyses the impact of risk analysis, the precautionary principle and mechanisms of scientific governance introduced by the GFL on both national and Community legislation. It discusses the case law of the European Courts dealing with scientific evidence and the precautionary principle applied to both European and national food safety measures. The article concludes with some observations on the role of the risk analysis methodology in the Community internal market.     

The impact of food safety standards on processed food exports from developing countries

This paper examines the impact of food safety standards on processed food exports in developing countries. A panel data econometric analysis of processed food exports in developing countries was undertaken. The Sanitary and Phytosanitary Standard (SPS) is incorporated into the model to capture the impact of food safety standards. The empirical model shows that food safety standards imposed by developed countries could impede processed food exports from developing countries. This could emerge because practically, SPS is less transparent than tariffs or quotas. There is an ample room for developed countries to tweak the standards stronger than necessary to achieve optimal levels of social protection, and to twist the related testing and certification procedures to make their competing imports more competitive. In addition, limited supply-side capacity of developing countries, especially in terms of resources, manpower as well as institution, constrains the countries to overcome food safety standards. Because of the potential benefits that could emerge from imposing food safety standards such as a reduction in transaction costs and trade friction, developing countries should view SPS not just as a trade barrier but also as an opportunity to upgrade quality standard and market sophistication. Supply-side capacity in developing countries needed to be improved, especially upgrading agriculture sector. Multilateral efforts are also needed to mobilize additional financial and technical assistance to help redress constraints in developing countries in meeting the required food safety standards imposed by developed countries.     

Strategic responses to food safety legislation

This paper assesses the responses made by food companies to changes in food safety legislation. Such responses are assessed in three ways. Firstly, an assessment is made as to why strategic responses to such legislation might be different to general strategic behaviour. Secondly a conceptual framework is presented and an examination of supply chain organisational response is made. Finally, the paper addresses the question of external marketing responses to food safety legislation. The paper concludes that food safety legislation is different, and often requires very swift strategic actions to be effective. Like other forms of legislation, however, food safety issues can also provide incentives and opportunities to well-managed and market-orientated firms.     

Zero tolerance rules in food safety and quality

In this introduction to the special section on zero tolerance rules, we identity examples from the known literature, which focus almost exclusively on deviant behavior. In contrast, we assembled papers that focus on zero tolerance as a characteristic of an increasing number of public and private rules that govern and shape the agrifood system. The contributions to this section illustrate the importance of an interdisciplinary approach for the conceptualization and exploration of zero tolerance rules, as well as an examination of the impact of zero on a range of value chain stakeholders including consumers. A thread running through the articles is that a society’s culture, and the political economy in which it is embedded, matter. Moreover, the authors show that the meaning of “zero” is ambiguous and application of “zero” is problematic at best. Perhaps most important is the argument that absolute safety is simply an illusion.     

Benefits and costs of food safety regulation

This paper begins with a review of the concepts and methods that can be used to quantify the benefits and costs of food safety regulations. On the cost side, where research is only beginning to emerge, this paper also provides an analytical framework for measurement of the costs of statutory regulations in the form of design and performance standards. This paper also discusses the use and limitations of currently available benefit and cost information for quantitative regulatory impact assessment, using the assessment of the mandatory HACCP and pathogen reduction regulations in the United States as an example. The paper concludes with suggestions for future research on quantifying benefits and costs of food safety regulations.     

Small is beautiful: firm size,prevention and food safety

Food safety crises have led governments to increase food firms’ responsibility by asking them to voluntarily implement prevention efforts. In this article, we explore the relationship between food firms’ size and their level of prevention efforts. We show that when cross-contamination between units is unlikely, small firms undertake greater prevention efforts than large firms. But when cross-contamination between units is possible, the effort-size curve is an inverted U-shape. Using these results, we discuss food safety laws in Europe and in the US, which differ in how they deal with the size of food firms’ operations.     

Social imaginary and dilemmas of policy practice: The food safety arena in Japan

Through the string of food safety scares that has rocked Japanese society since the early 2000s, conflicts between the traditional notion of socially acceptable risk and the idea of a science-based risk analysis approach have surfaced in the food safety arena. Elites, including government officials and those members of scientific communities who support the science-based risk analysis approach, have become responsible for communicating seemingly contradictory ideas such as “food in Japan is safe” and “there is no such thing as zero risk with food.” This communication logjam has resulted in confusion and created public distrust of both government and scientific experts. Against this backdrop, this paper aims to examine the struggles and challenges faced by government officials in explaining and practicing policies that pertain to highly controversial food safety issues. The primary data used for illuminating the discourses is the official minutes of governmental committees including the Agriculture, Forestry and Fisheries Committee and the Consumer Commission.     

Policies and practices for aquaculture food safety in China

There are growing concerns over the safety of aquaculture food products from China, which supplies 70% of the world’s farmed fish food. We present a comprehensive literature review, supplemented with qualitative data obtained from interviews with experts in the field, to examine the policies and practices designed to ensure the safety of food produced by the Chinese aquaculture industry. The food safety system has many parts that are administered by different governmental organizations with poor coordination among them. The system apparently operates as two entities: one for products destined for the export market and based largely on the requirements of importing countries, and the other with lower standards and levels of enforcement for domestic market products. The top-down approach focuses more on the end product rather than the production practices. There are several indications that regulations pertaining to antibiotic use are not being followed. Recent events have brought the issue of overall food safety to the attention of the Chinese public and the Government is acting positively towards addressing deficiencies of the system. Chief among these is the Food Safety Law which comes into effect in June, 2009. But the central government must work in concert with provincial and local authorities to improve the infrastructure for inspecting and tracking food from farms to the end consumers to ensure a greater degree of safety of aquatic food for the Chinese population.     

From punishment to prevention: A French case study of the introduction of co-regulation in enforcing food safety

In the last decade, the concept of co-regulation has been developed and increasingly promoted as an important instrument of regulation. In the context of food safety, we examine co-regulation programs from the point of view of an enforcement agency. We develop a conceptual framework of enforcement of food safety regulation for use in assessing the degree of shift toward co-regulation from traditional approaches and apply it to a case study of the French import market for produce at Perpignan. We find that co-regulation in the enforcement of pesticide residue limits resulted in a change of practices for the regulatory agency from punishment to prevention based on incentives and information programs.     

Consumer valuation of information about food safety achieved using biotechnology: Evidence from new potato products

This study focuses on the role of food labels and information for affecting consumers’ valuation of food safety achieved through application of biotechnological (biotech) methods. In 2002, potato products cooked to a high temperature were first reported to contain the human carcinogen acrylamide. Research discoveries using genetic engineering can substantially reduce carcinogenic-forming potential, and thereby increase food safety of potato products. Adult consumers from three distant regions of the U.S. were the subjects in lab auctions of potato products. They engaged in distinct rounds of bidding, first without packaged information and again after receiving information about the food safety risks and benefits of new biotech potato products. The study finds that willingness-to-pay (WTP) for these new potato products are not significantly different from conventional potato products under no information. However, exposure to a scientific perspective and scientific plus industry perspectives increases participants’ willingness-to-pay for the new potato products and reduces willingness-to-pay for conventional products. Exposure to the negative perspective on the new technology significantly reduces willingness-to-pay. Consumer valuation of the new potato products is affected by food labels, information, and consumer attributes. A consumer information program could be needed to gain consumer acceptance of these potato products or other foods that have been genetically modified to increase certain food safety dimensions.     

Private incentives for adopting food safety and quality assurance

The competitiveness of food companies in national and international markets depends upon their ability to adopt production processes which meet food safety and quality requirements. Food safety and quality assurance affect the cost of carrying out transactions, and therein lies the private incentive for adopting voluntary quality assurance systems. While quality assurance systems have the potential to reduce transaction costs by serving as the seller's guarantee of safety or quality, they may also serve as trade barriers.     

A conceptual framework for evaluating the most cost-effective intervention along the supply chain to improve food safety

This paper develops a conceptual framework for choosing the most cost-effective intervention along the supply chain to improve food safety. This framework identifies both the initial level of on-farm infection and the potential for new infection post farm-gate as key parameters influencing the relative effectiveness of on-farm and abattoir interventions. In addition, the potential for cost economies of scale in implementing interventions at abattoir compared to on-farm is shown to be a further factor determining the relative cost-effectiveness of these interventions. Overall, it is suggested by the analysis in this paper that successful abattoir interventions will typically be more cost-effective than successful on-farm interventions. These findings are consistent with existing case study evidence.     

Viewpoint: Future of food safety and nutrition - Seeking win-wins,coping with trade-offs

The possible implications of global trends such as climate change and resource scarcity on food security are high on the political agendas. While the food sufficiency aspect of food security takes centre-stage, the future of food safety and nutritional quality of diets often seems to be taken for granted. This paper builds on the results of a foresight study on EU food safety and nutrition towards 2050 to discuss potential future points of tension for food policy. Increasing food production while using fewer resources and reducing food waste while ensuring food safety are just two examples. Innovation at different levels in the food system will be needed to address future challenges. Fast technology uptake and the launch of new food-related products can put pressure on the ability to deliver timely risk assessments, the scope of which might also need to cover other legitimate factors. Future food policies need to be more sensitive to impacts on food safety and nutrition and health aspects. A holistic food systems approach must be taken to identify and discuss in advance possible tensions and trade-offs and to address them upfront in a systematic and transparent manner.     

Investor reactions to food safety incidents: Evidence from the Chinese milk industry

Using a natural experiment in the Chinese milk industry as background, this paper investigates the reactions of individual and institutional investors to food safety incidents. By classifying firms as either honest or dishonest, we find that: First, honest firms significantly outperform dishonest ones and receive more investment flow. Second, individual investors react to incidents more negatively and intensely, especially toward dishonest firms, compared with institutional investors. This study offers important policy implications: First, our findings directly suggest that the government should enact appropriate policies to strengthen food safety and protect consumers’ health. Second, the government should implement efficient mechanisms to strengthen firms’ incentives to participate in social responsibility activities. Third, having institutional investors as corporate monitors is not a sufficient substitute for legal penalties.     

The welfare impact of food pathogen vaccines

Vaccines against several common foodborne pathogens are being developed and could substantially alter the policy tools available to address foodborne illness. However, little analysis is available to suggest how social welfare would be affected by consumer and industry responses to these new vaccines. To address this void, we use stated-preference data to estimate consumer willingness to pay (WTP) for food safety vaccines and then simulate the welfare impacts of subsidizing consumer purchases of the vaccine given two different industry responses: maintaining current levels of food safety vigilance and reducing food safety vigilance due to a moral hazard response that undermines consumer confidence in food safety. To obtain consumer preferences for the vaccine, we simultaneously estimate a three-equation model that recognizes the recursive nature of responses to questions probing respondents’ willingness to purchase vaccines and perceptions of the probability and severity of possible foodborne illness incidents and the joint distribution of unobservable components. Our simulations show large consumer WTP if vaccines are relatively inexpensive while the presence of moral hazard increases respondents’ willingness to pay and voluntary uptake of vaccine.     

On food security and the economic valuation of food

The paper presents an economic evaluation of food and the cost of food insecurity. Building on behavioral regularities of consumer behavior, the analysis estimates the benefit of food at the individual level and at the world level. It finds an inverted-U relationship between food benefit and income. At the individual level, the “food benefit/income” ratio starts at 0 under extreme poverty, increases with income to reach a maximum of 4.4 when income per capita is around $13,000, and then declines slowly as income rises. The paper shows very large aggregate net benefit of food. The analysis also evaluates the cost of food insecurity. It shows that aversion to food insecurity is pervasive, the coefficient of relative risk aversion to food insecurity being around 2.7. The analysis evaluates empirically the cost of food insecurity. We report the cost of food insecurity under alternative scenarios, documenting that it can be large in situations of exposure to significant downside risk.