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The Impact of HACCP on Costs and Product Exit

Published online by Cambridge University Press:  28 April 2015

Neal H. Hooker ,
Rodolfo M. Nayga Jr.  and
John W. Siebert
Neal H. Hooker
Affiliation:
Department of Agricultural, Environmental and Development Economics, The Ohio State University
Rodolfo M. Nayga Jr.
Affiliation:
Department of Agricultural Economics, Texas A&M University
John W. Siebert
Affiliation:
Department of Agricultural Economics, Texas A&M University
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Abstract

Detailed information on firm level food safety costs is reported. Survey data for small and very small meat processors are modeled. Economies of scale in implementing Hazard Analysis Critical Control Point (HACCP) systems are investigated. Results indicate that even after controlling for scale, very small plants incur higher compliance costs. Diseconomies of scope are assessed using the probability and number of products discontinued due to HACCP. Such “partial exit” is positively related to the current range of items produced and the need for facility modification. However, no evidence is found for higher levels of partial exit in very small plants.

Keywords

HACCPeconomies of scalefirm and product exitfood safety strategiesmeat processing
Type
Original Articles
Information
Journal of Agricultural and Applied Economics , Volume 34 , Issue 1 , April 2002 , pp. 165 - 174
Copyright
Copyright © Southern Agricultural Economics Association 2002

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