On marketing orders and food safety

As I prepare to do more reporting on the issue of food safety and marketing orders, I came across a couple of research papers on the subject you may want to review. Here is the link to one 2005 paper that I posted on the Fresh Produce Industry Discussion Board, titled, Economic Consequences of Mandated Grading and Food Safety Assurance: Ex Ante Analysis of the Federal Marketing Order.

The authors of the study included Daniel Sumner and Julian Alston in Department of Agricultural and Resource Economics at the University of California, Davis, and members of the Giannini Foundation of Agricultural Economics. The paper looked at the costs and benefits of pistachio federal marketing order in relation to food safety. From the paper:

Aflatoxin is the main issue behind the marketing order, which states that no handler shall ship for domestic human consumption pistachios that exceed an aflatoxin level of 15 parts per billion (ppb).8 An aflatoxin inspection certificate must cover all domestic pistachio shipments.

This study was favorable to value of the marketing order. But the authors acknowlege this:

In the baseline case, a primary source of benefits from the marketing order is through a reduction in the probability of an aflatoxin event. The probability of an event with and without the marketing order is among the most difficult parameters to estimate given the lack of historical experience or other data.


TK: While there are many unknowns, what is all too real is the cost involved in guarding against a food safety "event." As the authors suggest, what can never be fully known is the probability of an event "with and without" the marketing order. The expense of extra regulation, even if self-imposed, for the purposes of food safety is a tough sell for growers who have never experienced an "event." However, it is no doubt considerably more attractive for growers who have.