MSU Agricultural, Food, and Resource Economics
Despite increased research in recent years, the impact of food safety measures on the food industry remains an open question. There is still active debate on how food safety can be positioned to increase industry competitiveness, on the costs and benefits of food safety systems, and on the equity impacts associated with these systems, particularly at the firm level. Moreover, the reasons for an individual firm to allow its food safety certification to continue or discontinue are not well understood. In this context, this dissertation analyzes three themes related to food safety and industry competitiveness.
The first essay describes the contrasting experiences of Thailand, Vietnam, and the Philippines with regard to dynamics of competition in international seafood markets. Using a case study approach and institutional analysis, results show that policies and institutions adopted by Thailand and Vietnam had led to a favorable business environment; strong collective action; effective export-oriented strategies by the private and public sectors; and a remarkable culture of product quality and food safety. Policies favorable to the industry have been more easily passed in Thailand and Vietnam than in the Philippines due to the lack of sustained investments from sector actors to push forward these policies in the latter. The culture of free-riding, dole-out mentality, and lack of sustained collective action is more prevalent in the Philippines than in Thailand and Vietnam. The Philippines can learn from these countries? experience, but structural changes need to occur including permitting healthy competition among interest groups and creating a favorable environment for collective action and business sector to flourish and for individual actors to participate and contribute to the betterment of the sector. The second and third essays continue to explore deeper the food safety dimension of the Philippine seafood industry.
The second essay employs logit, survival, and firmlevel financial cost-benefit analyses using primary data from 59 seafood processing firms in the Philippines. It shows that: (1) product?s price and quantity levels and active membership in associations are significant factors affecting initial adoption, while price differential between EU and other markets, difficulty in credit access, and active membership in associations are significant factors affecting continued certification; (2) output prices did not increase and are not expected to increase in the near future due to HACCP adoption; and (3) quantity increases, reduction in product wastage, and other realized benefits from HACCP adoption were limited. Results point to strong disincentives for continued adoption due to losses by many firms. Despite strong motivations to discontinue, there are losses of market access to EU by other industry players due to difficulties in shifting factors of production to other productive sectors.
The third essay employs a translog cost function to analyze 2-period panel data from 59 firms. Results show that: (1) reported HACCP expenditures are underestimated, likely due to investment crowding-out effect, lower flexibility in production, or costs hidden in other accounts when calculating production costs; (2) there is no evidence of cost efficiency gains with HACCP systems; and (3) there are no economies of size in seafood processing even with HACCP systems, contrary to most findings in the literature. iv ACKNOWLEGMENTS