On the Economics of Food Quality Standards and Integration in the European Community

Ian M. Sheldon and Harald von Witzke

No 233072, Occasional Papers from Regional Research Project NC-194: Organization and Performance of World Food Systems

Abstract: Part of the process of completion of the European Community's (EC's) internal market relates to the harmonization of EC food safety and health standards. In order to understand the economic implications of this process for the EC food industry, this paper addresses three interrelated issues. First, if competitive markets do not generate the necessary standard-assuring mechanisms, the nature of such a market failure needs to be understood. By setting out a simple model of contractual enforcement, it is possible to show that asymmetric information on quality components is sufficient for the quality-enforcement mechanism not to work in the case of food quality and safety. Second, if standards have to be set by public institutions, the nature of harmonization at the EC level can be examined. Specifically, it is important to assess the economic implications of the concept of "mutual recognition" in the setting of EC food standards. It is possible that this will lead to minimum standards in the Community which has certain welfare implications for consumers and producers. Alternatively, under certain assumptions, removing internal barriers to trade may drive down the price of food quality and may even result in the exit of low quality goods. The process of harmonization may also provide differing opportunities for rent-seeking by both consumers and food producers, therefore, it is useful to consider the likely impact of such behavior on both internal food prices and external trade.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 26
Date: 1992-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ageconsearch.umn.edu/record/233072/files/nc194-op-29.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nc194o:233072

DOI: 10.22004/ag.econ.233072

Access Statistics for this paper

More papers in Occasional Papers from Regional Research Project NC-194: Organization and Performance of World Food Systems
Bibliographic data for series maintained by AgEcon Search ().