Regional Trade Patterns: The Impact of Voluntary Food Safety Standards
2006
Woods, Mollie | Thornsbury, Suzanne | Raper, Kellie Curry | Weldon, Richard N.
Good Agricultural Practices (GAPs) are aimed at reducing farm level microbial contamination of fresh produce and include both fixed and variable cost components. We empirically analyze three scenarios of voluntary food safety practice adoption and third-party certification in the North American fresh strawberry market using a spatial equilibrium model. The model incorporates GAPs adoption across production regions and across farm size. Transportation and product shrinkage, which are critical factors in inter-regional trade of perishable products, are also included. Regional trade pattern impacts are assessed and used to draw inferences for pressure on market structure. Results indicate that competitive pressures are greatest on those regions with mid-size volumes that are not able to take advantage of close market proximity, yet still must absorb additional costs. This suggests that adoption of food safety practices, even if voluntary, is likely to accelerate what is already a bi-modal structure for this industry.
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