theoretical and empirical analysis of the economics of traceability adoption in food supply chains

THEORETICAL AND EMPIRICAL ANALYSIS OF THE ECONOMICS OF
TRACEABILITY ADOPTION IN FOOD SUPPLY CHAINS








A Dissertation Presented

by

DIOGO M. SOUZA MONTEIRO

Submitted to the Graduate School of the
University of Massachusetts Amherst in partial fulfillment
of the requirements for the degree of

DOCTOR OF PHILOSOPHY


February 2007

Resource Economics
UMI Number: 3254897
3254897
2007
Copyright 2007 by
Souza Monteiro, Diogo M.
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© Copyright by Diogo M. Souza Monteiro 2007

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THEORETICAL AND EMPIRICAL ANALYSIS OF THE ECONOMICS OF
TRACEABILITY ADOPTION IN FOOD SUPPLY CHAINS





A Dissertation Presented

by

DIOGO M. SOUZA MONTEIRO





Approved as to style and content by:


____________________________________
Julie A. Caswell, Chair


____________________________________
Daniel A. Lass, Member


____________________________________
Anna Nagurney, Member


____________________________________
John K. Stranlund, Member


__________________________________________
Julie A. Caswell, Department Chair
Department of Resource Economics

To Marta for her love, patience, and courage throughout these years.
To my parents, José and Madalena for all the sacrifices they made for me, and to my
siblings, Madalena and Francisco for their unconditional support.
To my uncle Rafael Monjardino for his friendship and encouragement.
To the memory of my grandparents.
To my great-grandfather Prof. Jorge Monjardino and to my uncle Prof. Fernando de
Oliveira Pinto whose academic careers inspire and challenge mine.
To all my friends in Portugal, especially to Ezequiel, José Maria, Macário, and Pedro.

“For this I was born, and for this came I into the world; that I
should give testimony to the truth. Every one that is of the truth,
hears my voice. Pilate said to him: What is the truth?”
John 18, 37-38


“Deus quer, o homem sonha, a obra nasce.”
Fernando Pessoa, Mensagem



vi

ACKNOWLEDGMENTS

First and foremost I would like to thank my advisor, Professor Julie A. Caswell,
for encouraging me to apply to the Resource Economics doctoral program at the
University of Massachusetts Amherst, and for patiently guiding, mentoring and
supporting me throughout these years. Julie has not only been an excellent advisor and a
role model, but also a true friend. My wife Marta and I have an enormous debt of
gratitude to Julie and to Richard for helping us to adjust to a new environment and for
always being available for any professional or personal issues we faced during this time.
I am also very grateful and obliged to the members of my committee: Professors
Daniel A. Lass, Anna Nagurney, and John K. Stranlund for their excellent comments
and very insightful suggestions, and for taking time to be part of this research. It was a
great privilege and honor for me to collaborate with such a fine and renowned group of

University of Massachusetts faculty members. I learned a lot from each of you and hope
to have opportunities for future collaboration.
I want to thank the Fundação para a Ciência e a Tecnologia (Portuguese
Foundation for Science and Technology) for funding this research and providing for
travel expenses to seminars and meetings where preliminary versions of this work were
presented. I also have to thank Henrique Curto, António Fragata, Nelson Isidoro,
Armando Torres Paulo, Sergio Pereira, Catarina Ribeiro, Domingos Santos, and João
Miguel Silva for their generosity in granting me access to data on traceability adoption
in the Portuguese pear industry, without which the empirical chapter of this thesis could
not be done.

vii

My research was influenced by several people each indirectly contributing to
part of the final product. I am particularly in debt to Dr. Neal Hooker who encouraged
me to think about multi-ingredient foods, to Professor Barry Field for his support and
help in thinking more in economic terms, and especially to Professor Joe Moffitt. Even
though Professor Moffitt was not part of my committee he nevertheless contributed very
kindly and generously to my research, helping me sharpen my initial ideas and always
showing great confidence in my ability to carry on my work.
I had the enormous fortune of having a great group of fellow graduate students
in my years at the University of Massachusetts. Each of them enriched and broadened
my personality. I would especially like to thank José Alves, Sven Anders, Katherine
Boschert, Seda Erdem, Dmytro Matsypura, David McEvoy, Philip Mellizo, Sirisha
Naidu, Linus Nyiwul, Michael Schuppli, Richard Volpe, Lava Yadav, and Yi (Alan)
Zhong for their friendship and encouragement, and for walking along with me through
the hurdles of graduate school.
Margaret A. Cialek, Wendy J. Curtice, and Barbara A. Talenda also deserve
recognition for all their help, kindness and patience in dealing with the administration
and bureaucracies of the University and for attending to special requirements. Elisa

Campbell from OIT and Carol Foster from the Graduate School generously helped me
with the final manuscript styles and formatting.
Last, but certainly not least, a very special thank you must go to Father Richard
Cleary S.J., to the University of Massachusetts Amherst Newman Center Community
and to the Portuguese graduate students Catholic group in Boston who contributed to
my sanity, sense of reality, and growth as a human being.

viii

ABSTRACT
THEORETICAL AND EMPIRICAL ANALYSIS OF THE ECONOMICS OF
TRACEABILITY ADOPTION IN FOOD SUPPLY CHAINS

FEBRUARY 2007

DIOGO M. SOUZA MONTEIRO, B.S., UNIVERSITY OF EVORA

M.S., MEDITERRANEAN AGRONOMIC INSTITUTE OF ZARAGOZA

M.S., UNIVERSITY OF MASSACHUSETTS AMHERST

Ph.D., UNIVERSITY OF MASSACHUSETTS AMHERST

Directed by: Professor Julie A. Caswell

Traceability systems are increasingly implemented in food supply chains to
mitigate food safety hazards and to improve information management and logistics.
While traceability systems are largely voluntary and driven by consumer demand in the
United States (US), in the European Union (EU) they are enforced by regulations and
were implemented to restore consumer trust in the food supply. Traceability systems

establish the path of information on food origins, attributes, and production and
processing technologies from farm to fork, thus increasing transparency in the food
chain.
As the consumption of pre-prepared foods increases around the world, new
types of food safety hazards may arise. Previously independent food supply chains may
now come together in facilities producing multi-ingredient, pre-prepared food products.
Implementing traceability in multi-ingredient food chains may mitigate food safety
risks.

ix

This research presents three essays, two theoretical and one empirical, analyzing
the economics of traceability adoption in food supply chains and at the farm. The first
essay investigates under what conditions voluntary or mandatory traceability systems
are preferred in single ingredient supply chains. The second addresses the conditions for
full, partial or no traceability in multi-ingredient food chains. Finally, the third essay
analyzes what has influenced traceability adoption at the farm level in the Portuguese
pear industry. An overall aim of this research is to examine how network effects impact
the levels of traceability flowing along single- and multi-ingredient food supply chains.
This dissertation contributes to the economics of traceability in food supply
chains showing that mandatory traceability may be inevitable if there are large public
benefits from traceability, liability rules are not perfectly imposed, and monitoring and
enforcement is effective. Full traceability is feasible in multi-ingredient supply chains.
However partial traceability is perhaps a more realistic scenario as it may result in
considerable savings for firms along the food chain. Producer organization, retailer, and
farm characteristics clearly influence the decision to adopt traceability. Finally, network
effects have a positive impact on the levels of traceability but a negative impact on the
value of premiums.

x

TABLE OF CONTENTS

Page

ACKNOWLEDGMENTS vi
ABSTRACT viii
LIST OF TABLES xii
LIST OF FIGURES xiii
CHAPTER
1. EXECUTIVE SUMMARY 1
2. MANDATORY AND VOLUNTARY TRACEABILITY ADOPTION IN
SINGLE-INGREDIENT FOOD CHAINS 9

2.1 Introduction 9
2.2 Motivations for voluntary and mandatory traceability 12
2.3 Modeling traceability with network, agency, and vertical control
theories 17
2.4 Models 21

2.4.1 Strictly private voluntary provision of traceability 25
2.4.2 Liability loss mitigation provision of traceability 31
2.4.3 Mandatory provision of traceability 34
2.4.4 Contract structure 39

2.5 Results 40

2.5.1. Comparing strictly private voluntary, liability and
mandatory levels of traceability 40
2.5.2 Network effects on level of traceability and premium for the

first tier firm 42

2.6 Conclusions and future research 46

3. TRACEABILITY IN MULTI-INGREDIENT FOOD SUPPLY CHAINS 54
3.1 Introduction 54
3.2 Operations research and economic approaches to traceability analysis 56
3.3 A Model of voluntary traceability in a multi-ingredient supply chain 61

xi

3.3.1 Assumptions 62
3.3.2 Model 66

3.4. Results and discussion 74
3.5 Conclusions and future research 82

4. TRACEABILITY ADOPTION AT THE FARM LEVEL: AN EMPIRICAL
ANALYSIS OF THE PORTUGUESE PEAR INDUSTRY 87

4.1 Introduction 87
4.2 Motivations for traceability adoption 89
4.3 Modeling traceability adoption 93

4.3.1 Theoretical and discrete choice models of traceability
adoption 94
4.3.2 Approach to empirical estimation 98

4.4. The Portuguese pear industry 101
4.5. Survey methodology and data 103

4.6. Factors affecting traceability adoption in the Portuguese pear
industry 106
4.7 Conclusions and future research 110

APPENDICES
A. SURVEY FOR EMPIRICAL STUDY – PORTUGUESE VERSION 119
B. SURVEY FOR EMPIRICAL STUDY – ENGLISH VERSION 123

BIBLIOGRAPHY 127

xii

LIST OF TABLES

Table Page

2.1 Levels of traceability and premium for each firm 50
2.2 Implicit levels of private, liability, and voluntary traceability 51
2.3 Network effects on levels of and premiums for traceability 52
3.1 Traceability levels and premiums along the supply chain 86
4.1 Effects of premium, farmer’s profile, and size of farm on optimal
traceability 114
4.2 Descriptive statistics for survey variables (N=138 valid cases) 115
4.3 Maximum and penalized likelihood estimates for traceability
adoption 116
4.4 Cross tabulation of the variables traceability adoption and sales
to the UK 117
4.5 Penalized likelihood estimates for sales to the UK (model 3) and
traceability adoption (model 4) 118

xiii

LIST OF FIGURES

Figure Page

2.1 Network structure of a single-ingredient food traceability system 49
2.2 Efficient scale traceability level 53
3.1 Network structure of a multi-ingredient food traceability system 85
4.1 Profile likelihood for sales to UK by β estimates 113
1

CHAPTER 1

EXECUTIVE SUMMARY
Since 1998, in the aftermath of a sequence of food safety scares in the United
Kingdom and other European countries, traceability began to be discussed as a policy
choice to recover the trust of European Union (EU) consumers in food safety and
quality. Traceability systems establish the path of information on food origins,
attributes, and production and processing technologies from farm to fork, thus
increasing transparency in the food chain.
Beef identification and traceability from farm to fork became mandatory in the
EU through European Commission and Parliament regulations 1760/2000 and
1825/2000. Then regulation 178/2002 of the European Parliament and of the Council on
general food law, imposed mandatory traceability for all food products marketed in the
EU. It entered into force in January 2005. Thus while in 2000 mandatory traceability
was only imposed in one single-ingredient supply chain, namely the beef industry, the
new EU food laws of 2002 extended its application to all foods.
An increased interest in food safety information and the corresponding

enhancement of traceability systems raises at least two types of issues at the global
level. One concerns policy making and another industry development. The first arises
from different perceptions and orientations toward food safety policy in different parts
of the world, for example in the United States (US) and EU. The second derives from
the globalization of business and the increasing sophistication of food manufacturing
and supply chains, particularly those involving pre-prepared foods.


2

In contrast to the EU, in the US mandatory traceability is not generally
considered an acceptable policy choice to mitigate food safety hazards, perhaps because
the reaction of consumers to food scares has not been as dramatic. Golan et al. (2003)
argue that mandatory traceability systems will be too costly and unnecessary for product
differentiation, especially if specific attributes of value to consumers are not targeted.
They also assert that traceability systems may be inefficient for the purpose of
increasing food system safety. Analyzing the demand for traceability, Dickinson and
Bailey (2002), and Hobbs et al. (2005) found that North American consumers are
willing to pay a premium for traceability, especially if it is supported by a quality
assurance system.
Clearly the EU and the US have different perspectives regarding the usefulness
of traceability and the way it should be implemented in the food industry. An
implication of this is a likely increase in disputes at the World Trade Organization as
the EU effectively imposes traceability on all food. This justifies closer scrutiny of the
implications and economic value of different traceability systems.
As the consumption of pre-prepared foods, which often involve the combination
of different ingredients following a recipe, increases around the world new types of
food safety hazards may arise. This is because previously independent food supply
chains now come together in the facility producing the multi-ingredient food. This may
increase risks of food safety hazards due to cross contamination. Implementing

traceability in multi-ingredient food chains may mitigate food safety risks. Trinekens
and Beulens (2001), Hobbs (2002), Hofstede (2002), Meuwissen, et al. (2003), and Van
der Vorst (2004) made significant contributions to the understanding of traceability
3

adoption in single ingredient food chains but research on the implementation of
traceability in multi-ingredient chains is still scarce.
Golan et al. (2004) surveyed several different systems of traceability in US agro-
food industries concluding that in the US traceability tends to be solely motivated by
economic incentives. A study of voluntary traceability adoption in the European meat
and poultry sectors found that its main drivers were higher production uncertainty,
higher chances of moral hazard and opportunistic behavior, increasing monitoring costs,
and inability to identify food traits (Buhr 2003). Recently, empirical studies by Mora
and Menozzi (2005), focusing on the cost components and drivers of traceability, and
by Banterle, Stranieri, and Baldi (2006) using a transactions costs perspective on
traceability, found that its adoption is less costly when firms are larger and have
previously implemented quality assurance systems. These studies also indicated that
traceability contributed to the reduction of internal and external product failures, and is
a strategic asset facilitating contractual relations, reinforcing trust, and improving the
ability to assign liability. There is no formal empirical analysis looking at what
motivates traceability adoption at the farm level. However, this is a critical issue
because if farmers do not implement traceability it becomes impossible to have it from
farm to fork.
From an economic perspective, the key question is what are the main drivers and
dynamics of traceability systems? To address this question, this research presents two
theoretical essays analyzing the economics of traceability and an empirical study of
traceability adoption at the farm level. The first theoretical essay investigates the
conditions in which voluntary or mandatory traceability systems are preferred in single
4

ingredient supply chains. The second theoretical essay discusses the conditions for full,
partial or no traceability in multi-ingredient food chains. The empirical essay analyzes
what has influenced traceability adoption at the farm level in the Portuguese pear
industry. An overall aim of this research is to examine how network effects impact the
levels of traceability flowing along single and multi-ingredient food supply chains.
The second chapter of this dissertation presents the first theoretical essay. It
investigates the conditions for preferring voluntary versus mandatory traceability using
three alternative models. These combine network, agency, and vertical control theories
to study and compare implementation of a traceability system along a supply chain with
three tiers. In the models, traceability is a vertical and downstream flow of information
governed by a sequence of contracts. Downstream levels of traceability depend on
upstream levels. Thus, to have traceability downstream firms must set an appropriate
premium to assure a firm immediately upstream accepts a contract for the provision of
traceability. In the first model the motivation for traceability is strictly voluntary and is
in response to consumer demand. In the second model, along with generating a
premium paid by consumers, traceability adoption mitigates a stochastic liability loss
due to food safety hazards. Finally, the last model is of mandatory traceability, where in
addition to being motivated by consumer willingness to pay and liability loss
mitigation, firms choose the socially optimal level of traceability in order to avoid a
penalty set by a regulator. In each of these models, the third tier firm downstream is the
claimant of benefits from consumer willingness to pay, bears the stochastic liability
losses of food safety hazards, and faces the regulatory penalty for not providing the
socially optimal level of traceability. Chapter two compares voluntary and mandatory
5

systems of traceability, and analyzes how network effects or externalities impact the
optimal choice of traceability and their potential impacts in shaping policies.
The main finding in chapter two is that leaving the decision to adopt traceability
entirely up to the private sector may lead to an under provision of traceability, which
may impede effective prevention and mitigation of food safety risks. Mandatory

traceability, defined as the requirement to provide the socially optimal level of
traceability, should only be considered if food safety hazards have a high probability of
occurrence, involve considerable private and social losses, and can be easily monitored
and enforced. The network effects have opposite influences depending on whether they
impact levels of traceability or their corresponding premiums. Effects on traceability
levels due to changes in the marginal premium paid by consumers, in the probability of
food safety hazards, and in the external benefits of traceability to society are all
positive. The impacts on premiums set in the contract with the first tier firm will be zero
or negative if average costs are represented by U-shaped curves and the level of
traceability required is equal to or below the efficient scale level.
The second theoretical essay, presented in chapter three, investigates the
voluntary implementation of full, partial, or no multi-ingredient traceability in a three-
tiered supply chain with firm asymmetries. The modeling strategy uses network,
agency, and vertical control theories. In this model, there are several firms in both the
first and second tiers, each linked with only one firm upstream. As in chapter two,
traceability is a vertical and downstream flow of information on product origins,
attributes, and processing technologies. However, to implement traceability the third
tier firm, producing a multi-ingredient food, must propose a contract to at least one of
6

its ingredient suppliers in the second tier. Following the liability model of the second
chapter, the third tier firm in the multi-ingredient supply chain adopts traceability to
receive a premium from consumers and to mitigate a stochastic liability loss in the event
of a food safety hazard.
The main conclusion on the multi-ingredient supply chain traceability model is
that full traceability is feasible. However partial traceability is perhaps a more realistic
scenario. Partial traceability may result in considerable savings and be more rational, as
some of the ingredients composing the multi-ingredient food may have very limited
probabilities of food safety hazards or enter in small proportions in the final product,
which may result in lower benefits than costs from traceability.

Another conclusion is that both horizontal and vertical network effects have to
be considered when analyzing the implementation of traceability in multi-ingredient
supply chains. The results show that horizontal network effects are always positive
implying that traceability levels are complements across the ingredients composing the
output of the third tier firm. Consequently the response of the third tier firm to demand
for more traceability may be very inelastic and only occur if it is for a reasonable
number of ingredients. Vertical network effects result from changes in traceability
premiums paid by consumers to the third tier firm and in probabilities of food safety
hazards. The results show that vertical effects are positive; as consumers raise their
willingness to pay for traceability or the probabilities of food safety hazards increase,
more traceability is demanded upstream. What is not clear is if this change makes firms
along the chain better or worse, which will depend on the structure of traceability costs
and how benefits are distributed.
7

Finally, chapter four presents an empirical analysis of traceability adoption at
the farm level in the Portuguese pear industry. This industry is suited for analysis of
traceability adoption because farmers appear to adopt different levels of traceability,
depending on their characteristics, location, affiliation with farmer organizations, and
marketing strategy. Farmer associations play a very important role in this region,
organizing most marketing activities, streamlining pear production, and helping farmers
to adopt quality assurance systems such as EurepGAP (Euro-Retailer Produce Working
Group Good Agricultural Practices), for which traceability is a major requirement. The
dataset contains 138 observations on pear producers affiliated with six farmer
organizations in the “Oeste” (western) region of Portugal. This region produces about
80 percent of the total annual Portuguese pear crop. The decision to adopt the
EurepGAP traceability level is analyzed through a discrete choice model and estimated
with the penalized likelihood estimator. This estimation technique was recently
developed by Heinze and Schemper (2002) to deal with the monotone likelihood or
quasi-separation problem. It is particularly suited to correct the small sample bias

frequently encountered in the estimation of discrete choice models.
The results show that traceability adoption at the farm level is best described by
a two-step decision process. Farmers first select the market they wish to sell to and then
the level of traceability, according to the market requirements. Larger farms, those
complying with quality assurance systems such as a Protected Designation of Origin
(PDO), and full time farmers affiliated with larger producer associations have higher
odds of adopting more stringent traceability standards such as the EurepGAP scheme.
8

On the other hand, higher productivity levels, lower levels of education, and location in
regional centers of production reduce the odds of EurepGAP traceability adoption.
These findings have important implications for public policy and firm strategic
decision making. In the region analyzed, traceability was adopted in response to a mix
of private and public incentives. Industry leaders indicated that although traceability
adoption involved considerable investments, it is starting to pay off because it can be
used to improve the way information is managed. The results show that public
authorities may wish to cooperate with producer organizations in deciding how to
promote traceability adoption at the farm level. For example, economies of scale in
information collection and management as well as avoidance of network externalities
may occur if farmer associations decide to invest in a traceability system that holds the
registries for all their affiliates.
This dissertation contributes to understanding of the economics of traceability
by showing that mandatory traceability may be inevitable if there are large public
benefits from traceability, liability rules are not perfectly imposed, and monitoring and
enforcement is effective. Further, full traceability is feasible in multi-ingredient supply
chains, but partial traceability saves costs along the supply chain. Membership in
producer organizations, retailer demands, and farm characteristics influence the
decision to adopt traceability in the Portuguese pear industry. Finally, network effects
have a positive impact of the levels of traceability. However, network effects on
premiums paid to firms upstream in the supply chain depend on the structure of costs

and on how benefits are distributed along the chain.
9

CHAPTER 2

MANDATORY AND VOLUNTARY TRACEABILITY ADOPTION IN
SINGLE-INGREDIENT FOOD CHAINS
2.1 Introduction
Food supply chains are complex networks of interdependent firms, involved in
the production, processing, transportation, marketing and sales of foods from farms to
consumers. In the past decades the agri-food system became increasingly knitted
together and, with globalization of food markets, distances between agricultural
production and consumption became larger. This occurred not only in terms of physical
distances but also in the number of tiers in the supply chain. These fast paced changes
in food supply are unprecedented in human history and their consequences to society
are yet to be fully understood. One of the most striking elements of the new
environment is the increasing need for coordination, demonstrated by the growing
number of contract agreements in food chains (MacDonald et al. 2004; James, Klein,
and Sykuta 2005). Another is the concern with the level of information and
transparency on food quality and safety, origin, and production and processing
technologies (Caswell 2006; European Parliament and Council 2002). Amongst other
motivations and advantages, contracts and more information may reduce uncertainty
and improve risk management, or shift it more efficiently along food chains, thus
reducing transaction and food safety costs.
There has been notable progress in agricultural and food technology, production,
and processing procedures. Both private and public sectors have invested heavily to
improve food safety standards through new technologies, management practices and
regulations. A prime example of this is the adoption of mandatory hazard analysis and
10

critical control points (HACCP). However, regardless of all these efforts old safety
threats still prevail and new hazards are appearing every year, justifying further
investigation of responses to existing interventions and consideration of alternative or
complementary instruments.
Voluntary and mandatory food traceability systems are increasingly used to
improve information sharing across food supply chains. There is still considerable
debate at the domestic and international level on whether traceability is an appropriate
tool to improve food safety and, moreover, if mandatory traceability is justified. Simply
put traceability is an information system through which firms in different tiers of a
supply chain share details on product origins, attributes, and production and processing
technologies. Traceability should not be seen as a panacea for food safety problems,
rather it is a tool to improve information management along food supply chains. It may
be seen more as a complement than as a substitute to existing public and private
interventions to improve food quality and safety.
The objective of this chapter is to contribute to the debate on the economics of
traceability. It investigates under what conditions voluntary or mandatory traceability
systems are preferred when there is a need for more information in a single ingredient
supply chain. Another goal is to investigate how and in which direction network
externalities affect optimal levels of traceability and respective premiums.
The European Union (EU) was particularly affected by a series of food scares in
the early 1990's leading to consumer distrust in farmers, agri-business firms, retailers,
and public authorities. Similarly the US, Japan, and Canada had their share of food
safety incidents but, with the exception of Japan, it seems that their impact at the
11

consumer level was not as widespread as in the EU. This succession of events led
private and public authorities to propose further interventions aimed at restoring
confidence in the food supply.
Information asymmetries and imperfections are important sources of food safety
and quality distrust throughout the supply chain and at the consumer level. Henson and

Trail (1993) suggest that information remedies, along with process standards, product
performance standards, and pecuniary measures could correct or mitigate food safety
market failures. However, they point out that provision of information may itself be
imperfect, due to the nature of foodborne risks, the public nature of information, and
asymmetries in the supply of food safety or quality information.
Starting in 2000, through European Commission and Parliament regulations
1760/2000 and 1825/2000, beef identification and traceability from farm to fork became
mandatory in the EU. Since January 2005, through regulation 178/2002 on general food
law, traceability became mandatory for all food products marketed in the EU. More
recently, the European Parliament and the Council regulation 1830/2003 imposes
traceability for products containing at least 0.9 percent of genetically modified
materials. Traceability is thus a pivotal element in new EU food legislation and a tool to
mitigate food safety hazards. Contrasting with this view and policy choice, Golan et al.
(2003) argue that mandatory traceability systems will be too costly and unnecessary for
product differentiation, especially if specific attributes of value to consumers are not
targeted. They also argue that such systems may be inefficient for the purpose of
increasing food system safety, as they could reduce the incentives for firms to innovate
in their processes in order to improve safety levels.