Traceability, Liability, and Incentives for Food Safety and Quality |
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| Authors: | Sé bastien,Pouliot Daniel A.,Sumner |
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| Affiliation: | Sébastien Pouliot is a Ph.D. candidate in the Department of Agricultural and Resource Economics, University of California, Davis. Daniel A. Sumner is director of the University of California Agricultural Issues Center, the Frank H. Buck, Jr., Professor, Department of Agricultural and Resource Economics, University of California, Davis and a member of the Giannini Foundation. |
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| Abstract: | Recent food scares such as the discoveries of Bovine Spongiform Encephalopathy and E. coli -contaminated spinach have heightened interest in food traceability. Here, we show how exogenous increases in food traceability create incentives for farms and marketing firms to supply safer food by increasing liability costs. We model a stylized marketing chain composed of farms, marketers, and consumers. Unsafe food for consumers can be caused by either marketers or farms. We show that food safety declines with the number of farms and marketers and imperfect traceability from consumers to marketers dampens liability incentives to supply safer food by farms. |
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| Keywords: | foodborne illness food safety liability traceability |
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