Upside risk, consumption value, and market returns to food safety

Vivian Hoffmann*, Sarah Kariuki, Janneke Pieters, Mark Treurniet

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

We investigate the effect of a modest food safety premium on semisubsistence farmers' investment in a food safety technology. We demonstrate theoretically that in the face of production uncertainty, a market incentive below the marginal production cost of achieving the safety standard can increase food safety investment among farmers motivated by private health returns. We test this prediction through a randomized controlled trial in Kenya through which members of existing farmer groups were offered an opportunity to purchase a food safety input, and half were offered a 5% market premium for produce that met the associated regulatory standard. Access to the premium more than doubled investment in the food safety technology. In line with the model's prediction, most premium-induced adoption was by farmers motivated by a combination of health and financial rewards.

Original languageEnglish
Pages (from-to)914-939
JournalAmerican Journal of Agricultural Economics
Volume105
Issue number3
Early online dateOct 2022
DOIs
Publication statusPublished - May 2023

Keywords

  • food safety
  • risk
  • smallholder farmers
  • technology adoption

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