Is quality certification in fruit and vegetable production a market-driven choice in Greece?

Δημοσιεύσεις μελών--ΣΤΕΓ--Τμήμα Αγροτικής Ανάπτυξης & Διοίκησης Αγροτικών Επιχειρήσεων, 2015This study examines whether the implementation of a quality management system (QMS) and the choice of a certain quality assurance scheme (QAS) were decided as responses by fruit and vegetable producers to market conditions, separating certification decisions into two components. A survey study is conducted and two discrete choice models are estimated: ordered logit for the implementation of QMS and binary probit for the choice of QAS. It is found that the buyers’ demand for certification and the efforts of farmers to differentiate their products from others in an area that may present local quality problems lead farm businesses to accelerate QMS implementation. Regarding the choice of a private QAS, it is a market-driven decision. The conclusion is that certifications are characterised by a market-driven approach and the increased interest in certified products can lead to the diffusion of certification. Because the absence of information provision and the controls exerted by public authorities have an impact on QMS implementation, the diffusion of certification depends also on public policy measures, indicating the crucial role of a public policy mix properly designed to promote certification

Certify or not? An analysis of organic food supply chain with competing suppliers

Customers expect companies to provide clear health-related information for the products they purchase in a big data environment. Organic food is data-enabled with the organic label, but the certification cost discourages small-scale suppliers from certifying their product. This lack of a label means that product that satisfies the organic standard is regarded as conventional product. By considering the trade-off between the profit gained from organic label and additional costs of certification, this paper investigates an organic food supply chain where a leading retailer procures from two suppliers with different brands. Customers care about both the brand-value and quality (more specifically, if food is organic or not) when purchasing the product. We explore the organic certification and wholesale pricing strategies for suppliers, and the supplier selection and retail pricing strategies for the retailer. We find that when two suppliers adopt asymmetric certification strategy, the retailer tends to procure the product with organic label. The supplier without a brand name can compensate with organic certification, which leads to more profits than the branded rival. As the risk of being abandoned by the retailer increases, the supplier without a brand name is more eager than the rival to obtain the organic label. If both suppliers certify the product, however, they will fall into a prisoner’s dilemma under situation with low health utility from organic label and high certification cost