IDEAS home Printed from https://ideas.repec.org/p/cen/wpaper/08-31.html
   My bibliography  Save this paper

The Direct and Indirect Costs of Food Safety Regulation

Author

Listed:
  • Michael Ollinger

Abstract

The cost of compliance with the Pathogen Reduction Hazard Analysis Critical Control Program (PR/HACCP) rule of 1996 has been controversial since it was first proposed. Surveys have provided some cost information but examined plant size and other indirect effects with limited data and did not make cost estimates of direct cost components, such as mandated tasks. This paper addresses those deficiencies with data from a national survey of meat and poultry plants on PR/HACCP costs. Results indicate that (1) mandated tasks are the most costly component of the PR/HACCP rule, (2) regulation favors large plants over small ones, and (3) private actions are nearly as costly as direct regulation.

Suggested Citation

  • Michael Ollinger, 2008. "The Direct and Indirect Costs of Food Safety Regulation," Working Papers 08-31, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:08-31
    as

    Download full text from publisher

    File URL: https://www2.census.gov/ces/wp/2008/CES-WP-08-31.pdf
    File Function: First version, 2008
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Henson, Spencer & Reardon, Thomas, 2005. "Private agri-food standards: Implications for food policy and the agri-food system," Food Policy, Elsevier, vol. 30(3), pages 241-253, June.
    2. Fernando Balsevich & Julio A. Berdegué & Luis Flores & Denise Mainville & Thomas Reardon, 2003. "Supermarkets and Produce Quality and Safety Standards in Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1147-1154.
    3. Spencer Henson & James Northen, 1998. "Economic determinants of food safety controls in supply of retailer own-branded products in United Kingdom," Agribusiness, John Wiley & Sons, Ltd., vol. 14(2), pages 113-126.
    4. Michael Ollinger & Danna L. Moore, 2008. "The Economic Forces Driving Food Safety Quality in Meat and Poultry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 289-310.
    5. Hooker, Neal H. & Nayga, Rodolfo M. & Siebert, John W., 2002. "The Impact of HACCP on Costs and Product Exit," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(1), pages 165-174, April.
    6. Klein, Nicole L. & Brester, Gary W., 1997. "Economic Impacts of the Zero Tolerance Directive on the Cost Structure of Beef Packing Companies," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35743, Western Agricultural Economics Association.
    7. Knutson, Ronald D. & Cross, H. Russell & Acuff, Gary R. & Russell, Leon H. & Boadu, Fred O. & Nichols, John P. & Wang, Suojin & Ringer, Larry J. & Childers Jr, Asa B. & Savell, Jeff W., 1995. "Reforming Meat and Poultry Inspection: Impacts of Policy Options," Working Papers 258074, Texas A&M University, Agricultural and Food Policy Center.
    8. Bartel, Ann P & Thomas, Lacy Glenn, 1987. "Predation through Regulation: The Wage and Profit Effects of the Occupational Safety and Health Administration and the Environmental Protection Agency," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 239-264, October.
    9. Ollinger, Michael & Mueller, Valerie, 2003. "Managing For Safer Food: The Economics Of Sanitation And Process Controls In Meat And Poultry Plants," Agricultural Economic Reports 33975, United States Department of Agriculture, Economic Research Service.
    10. Julius J. Okello & Scott M. Swinton, 2007. "Compliance with International Food Safety Standards in Kenya's Green Bean Industry: Comparison of a Small- and a Large-scale Farm Producing for Export," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 269-285.
    11. Ollinger, Michael, 2004. "The Impact Of Market Mechanisms And Haccp Regulation On Food Safety Quality," 2004 Annual meeting, August 1-4, Denver, CO 20150, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Roberts, Tanya, 2005. "Economics of Private Strategies to Control Foodborne Pathogens," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 20(2), pages 1-6.
    13. Jaffee, Steve & Masakure, Oliver, 2005. "Strategic use of private standards to enhance international competitiveness: Vegetable exports from Kenya and elsewhere," Food Policy, Elsevier, vol. 30(3), pages 316-333, June.
    14. Codron, Jean-Marie & Giraud-Heraud, Eric & Soler, Louis-Georges, 2005. "Minimum quality standards, premium private labels, and European meat and fresh produce retailing," Food Policy, Elsevier, vol. 30(3), pages 270-283, June.
    15. Jeffrey J. Reimer, 2006. "Vertical Integration in the Pork Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 234-248.
    16. Golan, Elise H. & Roberts, Tanya & Salay, Elisabete & Caswell, Julie A. & Ollinger, Michael & Moore, Danna L., 2004. "Food Safety Innovation In The United States: Evidence From The Meat Industry," Agricultural Economic Reports 34083, United States Department of Agriculture, Economic Research Service.
    17. Starbird, S. Andrew, 2005. "Supply Chain Contracts and Food Safety," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 20(2), pages 1-5.
    18. Ollinger, Michael & Moore, Danna L. & Chandran, Ram, 2004. "Meat And Poultry Plants' Food Safety Investments: Survey Findings," Technical Bulletins 33559, United States Department of Agriculture, Economic Research Service.
    19. Jean-Marie Codron & M'hand Fares & Elodie Rouviere, 2007. "From public to private safety regulation? The case of negotiated agreements in the French fresh produce import industry," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(3), pages 415-427.
    20. John M. Antle, 2000. "No Such Thing as a Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 310-322.
    21. Pashigian, B Peter, 1984. "The Effect of Environmental Regulation on Optimal Plant Size and Factor Shares," Journal of Law and Economics, University of Chicago Press, vol. 27(1), pages 1-28, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Direct and Indirect Costs of Food Safety Regulation
      by Sui-Jade in Journalist's Resource on 2010-06-04 00:19:08

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ollinger, Michael & Taha, Fawzi A., 2015. "U.S. Domestic Salmonella Regulations and Access to European and Other Poultry Export Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(A), pages 1-16, July.
    2. Zhigang Wang & Huina Yuan & Fred Gale, 2009. "Costs of Adopting a Hazard Analysis Critical Control Point System: Case Study of a Chinese Poultry Processing Firm," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(3), pages 574-588.
    3. Ollinger, Michael & Wilkus, James & Hrdlicka, Megan & Bovay, John, 2017. "Public Disclosure of Tests for Salmonella: The Effects on Food Safety Performance in Chicken Slaughter Establishments," Economic Research Report 262183, United States Department of Agriculture, Economic Research Service.
    4. Ollinger, Michael & Houser, Matthew, 2020. "Ground beef recalls and subsequent food safety performance," Food Policy, Elsevier, vol. 97(C).
    5. Pozo, Veronica F. & Schroeder, Ted C., 2013. "Effects of Meat Recalls on Firms' Stock Prices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151287, Agricultural and Applied Economics Association.
    6. Ollinger, Michael & Bovay, John & Guthrie, Joanne & Benicio, Casiano, 2015. "Economic Incentives to Supply Safe Chicken to the National School Lunch Program," Economic Research Report 212888, United States Department of Agriculture, Economic Research Service.
    7. Ollinger, Michael, 2024. "Recall characteristics and food safety process control," Food Policy, Elsevier, vol. 124(C).
    8. Michael Ollinger & John Bovay, 2020. "Producer Response to Public Disclosure of Food‐Safety Information," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 186-201, January.
    9. Ollinger, Michael & Bovay, John & Hrdlicka, Megan & Wilkus, James, 2015. "Food-safety test performance and public disclosure: The value of information in encouraging improvements in food safety in the chicken-slaughter industry," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205408, Agricultural and Applied Economics Association.
    10. Ollinger, Michael & Guthrie, Joanne & Bovay, John, 2014. "The Food Safety Performance of Ground Beef Suppliers to the National School Lunch Program," Economic Research Report 262211, United States Department of Agriculture, Economic Research Service.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ollinger, Michael, 2009. "The Cost of Food Safety Technologies in the Meat and Poultry Industries," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 48783, Agricultural and Applied Economics Association.
    2. Ollinger, Michael & Moore, Danna L., 2006. "The economic forces driving the costs of food safety regulation," 2006 Annual meeting, July 23-26, Long Beach, CA 21214, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Ollinger, Michael & Moore, Danna L., 2009. "The Interplay of Regulation and Marketing Incentives in Providing Food Safety," Economic Research Report 55837, United States Department of Agriculture, Economic Research Service.
    4. Michael Ollinger & Danna L. Moore, 2008. "The Economic Forces Driving Food Safety Quality in Meat and Poultry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 289-310.
    5. Michael Ollinger & John Bovay, 2020. "Producer Response to Public Disclosure of Food‐Safety Information," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 186-201, January.
    6. Ollinger, Michael, 2008. "Structural Change in the Meat and Poultry Industry and the Pathogen Reduction Hazard Analysis Critical Control Point Rule," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 36747, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Ollinger, Michael & Wilkus, James & Hrdlicka, Megan & Bovay, John, 2017. "Public Disclosure of Tests for Salmonella: The Effects on Food Safety Performance in Chicken Slaughter Establishments," Economic Research Report 262183, United States Department of Agriculture, Economic Research Service.
    8. Fontaine, Damien & Gaspart, Frederic & Frahan, Bruno Henry de, 2008. "Modelling the impact of private quality standards on the fresh fruit and vegetable supply chains in developing countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44378, European Association of Agricultural Economists.
    9. Jiping Ding & Paule Moustier & Xingdong Ma & Xuexi Huo & Xiangping Jia, 2019. "Doing but not knowing: how apple farmers comply with standards in China," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 36(1), pages 61-75, March.
    10. Ollinger, Michael & Guthrie, Joanne & Bovay, John, 2014. "The Food Safety Performance of Ground Beef Suppliers to the National School Lunch Program," Economic Research Report 262211, United States Department of Agriculture, Economic Research Service.
    11. Ollinger, Michael & Bovay, John & Hrdlicka, Megan & Wilkus, James, 2015. "Food-safety test performance and public disclosure: The value of information in encouraging improvements in food safety in the chicken-slaughter industry," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205408, Agricultural and Applied Economics Association.
    12. Jan Mei Soon & Richard N. Baines, 2013. "Public and Private Food Safety Standards: Facilitating or Frustrating Fresh Produce Growers?," Laws, MDPI, vol. 2(1), pages 1-19, January.
    13. Ollinger, Michael & Bovay, John & Guthrie, Joanne & Benicio, Casiano, 2015. "Economic Incentives to Supply Safe Chicken to the National School Lunch Program," Economic Research Report 212888, United States Department of Agriculture, Economic Research Service.
    14. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    15. Codron, Jean-Marie & Adanacioğlu, Hakan & Aubert, Magali & Bouhsina, Zouhair & El Mekki, Abdelkader Ait & Rousset, Sylvain & Tozanli, Selma & Yercan, Murat, 2014. "The role of market forces and food safety institutions in the adoption of sustainable farming practices: The case of the fresh tomato export sector in Morocco and Turkey," Food Policy, Elsevier, vol. 49(P1), pages 268-280.
    16. Ollinger, Michael & Moore, Danna L., 2007. "Market Forces, Plant Technology, and Food Safety Technology Use," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9853, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Schuster, Monica & Maertens, Miet, 2013. "Do private standards create exclusive supply chains? New evidence from the Peruvian asparagus export sector," Food Policy, Elsevier, vol. 43(C), pages 291-305.
    18. Ollinger, Michael & Moore, Danna L. & Chandran, Ram, 2004. "Meat And Poultry Plants' Food Safety Investments: Survey Findings," Technical Bulletins 33559, United States Department of Agriculture, Economic Research Service.
    19. Hansen, Henrik & Trifković, Neda, 2014. "Food Standards are Good – For Middle-Class Farmers," World Development, Elsevier, vol. 56(C), pages 226-242.
    20. Adalja, Aaron & Lichtenberg, Erik, 2018. "Produce growers’ cost of complying with the Food Safety Modernization Act," Food Policy, Elsevier, vol. 74(C), pages 23-38.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cen:wpaper:08-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dawn Anderson (email available below). General contact details of provider: https://edirc.repec.org/data/cesgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.