Costs and risks of conforming to EU traceability requirements: the case of hard red spring wheat

William Wilson, Xavier Henry and Bruce L. Dahl
Additional contact information
Xavier Henry: Plantureux, Domaine champ clos 04100, Manosque, France, Postal: Plantureux, Domaine champ clos 04100, Manosque, France
Bruce L. Dahl: Department of Agribusiness & Applied Economics, North Dakota State University, P.O. Box 5636, Fargo, ND 58105-5636, Postal: Department of Agribusiness & Applied Economics, North Dakota State University, P.O. Box 5636, Fargo, ND 58105-5636

Agribusiness, 2008, vol. 24, issue 1, 85-101

Abstract: European Union (EU) traceability requirements impose added costs and risks on suppliers. A stochastic simulation model is developed to determine optimal testing strategies and marginal costs to conform to EU traceability requirements for exports of non-genetically modified (non-GM) wheat from the United States. The optimal strategy is chosen to maximize an integrator's utility. Cost components include certified seed, certification and auditing, testing, traceability, quality loss, and a premium for the added risk of a dual traceability system over a single non-traceability system. Adventitious commingling risks are defined stochastically. Results indicate that traceability requirements can be conformed to with reasonable buyer and seller risk at a total cost of $18|non-GM mt. [EconLit Subject Descriptors: C150, C610, D810] © 2008 Wiley Periodicals, Inc.

Date: 2008
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Working Paper: COSTS AND RISKS OF CONFORMING TO EU TRACEABILITY REQUIREMENTS: THE CASE OF HARD RED SPRING WHEAT (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:24:y:2008:i:1:p:85-101

DOI: 10.1002/agr.20148

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