How Far is a Producer Willing to Go for a Certified Body?

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New AAEA Member research published in AJAE

Since Certified Bodies and manufacturers are not uniformly geographically distributed, producers in some areas of the country, could be disadvantaged in their need to choose one that is further away

In 2017 the FDA initiated a website allowing accreditation bodies to apply for FDA recognition. Recognized accreditation bodies can accredit certification bodies (CBs) who perform food safety audits. This program helps to ensure that imported foods are safe. CBs for different standards conduct food safety audits, and play an increasingly important role helping retailers and the government ensure food safety.

In a new article released by the American Journal of Agricultural Economics (AJAE), “Choosing Certifiers: Evidence from the British Retail Consortium Food Safety Standard,” the authors wanted to study how food manufacturers choose CBs. In the United States, for manufacturing sites certified for the British Retail Consortium (BRC) standard between 2011 and 2015, 85% of the audit grades were as---the highest grade the standard offered. The authors found that manufacturers are more likely to choose CBs that assigned a higher share of A grades, they are more likely to return to the same certifier that audited their site in the previous year, and to choose geographically closer CBs.

One of the authors of the article, Yuqing Zheng from the University of Kentucky and a member of the Agricultural & Applied Economics Association (AAEA), says “finding that geographic location matters suggests that location can create a degree of product differentiation that might potentially create market power. Also, since CBs and manufacturers are not uniformly geographically distributed, producers in some areas of the country, especially in the center states, could be disadvantaged in their need to choose CBs that are further away. Small-scale producers are audited by CBs that are located farther away. The average distance between a site and their chosen CB was about 600 miles.”

The article is available online and open to the public for a limited time. If you are interested in setting up an interview with Yuqing Zheng, please contact Allison Scheetz in the AAEA Business Office.

ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices. To learn more, visit http://www.aaea.org.

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Allison Scheetz
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