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Traceability, Liability, and Incentives for Food Safety and Quality
Author(s) -
Pouliot Sébastien,
Sumner Daniel A.
Publication year - 2008
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.01061.x
Subject(s) - traceability , business , safer , stylized fact , incentive , food safety , liability , quality (philosophy) , marketing , economics , finance , food science , microeconomics , philosophy , chemistry , computer security , epistemology , computer science , macroeconomics , statistics , mathematics
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.