Motivation For and Cost of HACCP

Satish Y. Deodhar

No WP2003-05-03, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: To remain quality competitive in the post-WTO regime, Indian food processing firms would have to adopt a food safety management system - Hazard Analysis and Critical Control Points (HACCP). It is necessary to understand, therefore, in what way the system benefits firms, and, what are the costs of HACCP implementation. This paper does that. Data on reasons for and cost of HACCP implementation was generated through questionnaire survey of food processing firms. Analysis was performed using factor analysis, contingency tables and chi-square tests. While quality and production related factors motivate firms to employ HACCP, trade associations are not at all instrumental in promoting the system. Set-up cost and operating cost vary with the type of food sub-sector and the size of firm. Government and trade associations may facilitate sector specific concessional loans for HACCP implementation and initiate training programmes. Economies of scale are important in HACCP adoption, hence Indian firms may want to go for horizontal and/or vertical integration.

Date: 2003-05-03
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