A Qualitative Assessment Of The Benefits And Costs Of On Farm Food Safety And Environmental Farm Plans In The Pork Sector

Author : John Charles Bovay (Jr.)
Publisher :
ISBN 13 : 9781321210781
Total Pages : pages
Book Rating : 4.2/5 (17 download)

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Download or read book Regulation of Production Practices and Product Attributes written by John Charles Bovay (Jr.) and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Regulation of production practices and product attributes for food, both by government and private industry, has become more common in recent years. Companies including Burger King and Safeway have announced plans to sell only egg products from cage-free hens or pork produced without the use of gestation crates. Many buyers of agricultural products require that their suppliers adhere to production standards related to improved food safety. These private standards are more stringent than existing U.S. government requirements related to animal housing or food safety. This dissertation provides insights and contributes to the modern study of the economics of agriculture by examining the legislation and the implementation of two new sets of laws that regulate farm production practices and food product attributes.This dissertation first considers the economic motivations for individuals to support restrictions on farm practices, that are perceived to improve farm animal welfare, as a means to explaining results of a 2008 California referendum on treatment of farm animals. When passed with a 63% majority, Proposition 2 (Prop 2) banned the use of conventional cages to house egg-laying hens in California. The types of cages restricted by Prop 2 accounted for well over 90% of all U.S. egg production in 2008. The political outcome brings to light a possible paradox: why would individuals support a restriction on production (or consumption) of a product they routinely consume? This seeming paradox can be explained by a straightforward model in which animal welfare is considered a public good and the type of housing permissible under Prop 2 is associated with perceived improvements in animal welfare. Thus, while a restriction on production of eggs using conventional cages raises the price of eggs for all egg consumers, individuals can obtain benefits that outweigh the costs they incur personally from the restriction. In this dissertation, I create and analyze a data set including precinct-level support for Prop 2 and economic characteristics about voters in those precincts. The analysis shows that, faced with a referendum on farm animal treatment, voters in California behaved according to the incentives characterized by the model. The empirical results also indicate that political party affinity, education and ethnicity may also play important roles in shaping attitudes about restrictions on farm animal housing.The second policy topic considered in this dissertation is the regulation of food safety under the Food Safety Modernization Act (FSMA), signed into law in 2011. This legislation gave the United States Food and Drug Administration (FDA) new authority to regulate the safety of most food produced for sale in the United States. The Act mandates that producers adopt certain practices related to food safety, some of which are equivalent to practices that many producers have already adopted either privately or collectively. This dissertation examines the extent to which the Food Safety Modernization Act imposes costs differentially on different groups of producers, and derives implications for potential effects of the law on the fresh-produce industry, using the fresh-tomato industry as a case study.In 2007, long before FSMA was passed by Congress, leading members of the fresh-tomato industry responded to pressure from FDA regarding the industry's long history of poor food-safety outcomes, and developed a set of standards for production practices related to food safety at all levels of the fresh-tomato supply chain. Adherence to these standards was required under Florida law for essentially all growers in that state, and the California Tomato Farmers cooperative, whose members produce the vast majority of fresh tomatoes grown in California, also required that its members adopt these standards. These two states represent more than half of domestic production of fresh tomatoes. In this dissertation, I assess the hypothesis that demand for tomatoes from Florida and California increased, relative to demand for tomatoes from other regions, following the adoption of standards for food-safety practices by growers in those states. I use a broad variety of tests, applied to data from the fresh-tomato wholesale market, and find essentially no evidence that demand for fresh tomatoes responded positively to the implementation of collective food-safety practices. (Previous econometric studies have found that demand does respond negatively to outbreaks of food-borne illness, however.)The final essay in my dissertation presents a simulation of the effects of FSMA on the fresh-tomato industry, the results from which illustrate likely effects of the Act on other fresh-produce industries. Using FDA estimates of the line-by-line cost of complying with the Act's proposed rule on on-farm practices related to produce safety, I simulate shifts in supply and demand for dozens of categories of growers, differentiated by size, location, existing adoption of food-safety standards, and exemption status. I demonstrate that the regulations will favor large, domestic growers and those that have already adopted standards very similar to those required by FSMA.