ECONOMIC IMPACTS OF MANDATED GRADING AND TESTING TO AVOID A NEGATIVE FOOD SAFETY EVENT: EX ANTE ANALYSIS OF THE FEDERAL MARKETING ORDER FOR PISTACHIOS

The California pistachio industry led an initiative to establish a federal marketing order, which mandates quality standards and an inspection program to assure food safety and consistency in the quality of California pistachios. We develop a stochastic dynamic simulation model of the pistachio market to investigate quantitatively the likely effects of such collective action enforced by government mandates. Simulation results indicate that, across the full range of parameters used in the analysis, the benefit-cost analysis was always favorable to the proposed policy. The measured benefits to producers, the nation, or the world always well exceeded the corresponding measure of costs, typically by many times.Food Consumption/Nutrition/Food Safety,

Demand Enhancement through Food-Safety Regulation: Benefit-Cost Analysis of Collective Action in the California Pistachio Industry

Food safety shocks can threaten the health of consumers, create havoc within an industry and result in severe losses to producers. Governments often attempt to enhance food safety by mandating standards and inspection of food products to supplement the voluntary efforts by private firms. This paper assesses a form of collective action that falls between typical government mandates and purely private action. The California pistachio industry recently established a U.S. federal marketing order. This order sets quality standards and requires inspection and certification, aiming to reduce the likelihood of dangerous or poor quality pistachios being sold to consumers and to provide some quality assurance to consumers. Simulation results indicate that, across the full range of parameters used in the analysis, the benefit-cost analysis was always favorable to the new policy. Continuing work is extending the analysis to account for some particular features of the pistachio industry, to consider alternative policies, and to draw inferences for the application of similar policies to other California specialty crops.Food Safety, Collective Action, Specialty Crops, Government Regulation, Marketing Orders, Pistachios, Food Consumption/Nutrition/Food Safety, Q18, Q13, I18, H4,

Industry-mandated testing to improve food safety: the new US marketing order for pistachios

Food safety shocks can threaten the health of consumers, create havoc within an industry and result in severe losses to producers. Governments often attempt to aid food safety by mandating standards and inspection of food products to supplement the efforts by private firms and industries. This article assesses a form of collective action that falls between typical government mandates and purely private action. The California pistachio industry recently established a U.S. federal marketing order, which sets quality standards and inspection to reduce the likelihood of dangerous or poor quality pistachios. Simulation results indicate that, across the full range of parameters used in the analysis, the benefit-cost analysis was always favorable to the new policy. In the case of California pistachios, collective action is likely to be a helpful tool to ensure a safe product and increase benefits to producers and consumers.food safety, food scare, collective action, marketing orders, pistachios, public good, food regulations, cost-benefit analysis, Agribusiness, Food Consumption/Nutrition/Food Safety,

Economic Consequences of Mandated Grading and Food Safety Assurance: Ex Ante Analysis of the Federal Marketing Order for California Pistachios

Crop Production/Industries, Food Consumption/Nutrition/Food Safety, Marketing,

Ex-ante evaluations of agricultural and environmental policies using flexible costs functions with FADN data: Methods and results

Agriculture in the EU is strongly influenced by public policies. Most of the existing economic models which provide ex-ante analyses are defined on a more or less aggregated level, which ignores theunderlying heterogeneity among farms in Europe. This paper presents a model which fills this gap. Flexible cost functions for dairy, cattle and crop were econometrically estimated using the EU farm accountancy data network for the period 1995-2007. For ex-ante evaluation of public policies, these cost functions are integrated in the objective function of farm mathematical programming models. The model is used to analyse the impact of dairy and sugar market reforms on output, input use and income. Generally, the results highlight that changes in farm supplies, input demands and grossmargins are heterogeneous across farms, thus underlining the need to perform simulations at the farm level