Does higher food safety assurance bring higher returns? Evidence from Taiwan

https://doi.org/10.17221/154/2017-AGRICECONCitation:JIANG W., LUH Y. (2018): Does higher food safety assurance bring higher returns? Evidence from Taiwan. Agric. Econ. – Czech, 64: 477-488.
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With increasing concern of the food safety issue, consumer’s demand for certified food have induced the adoption of organic farming or traceability certification. There is, however, relatively limited research devoted to examining the determinants and economic outcomes of the two food safety assurance certifications. The major intents of this study are to analyse the determinants of the farm household’s adoption decisions of the organic and/or traceability certifications, and to investigate the economic consequences of different modes of adoption. It is found that while the log-odds of rice farmers’ choice of organic certification over the choice of none of the certifications decreases significantly with age, the educational level is positively associated with the adoption of traceability certification. The results suggest the significance of the “Straybird Program”, “One Hundred Young Farmers Counselling Program” and “The Farmers’ Academy” in promoting the adoption of food safety assurance certification. Estimated average treatment effect after correcting for the self-selection problem indicates that the adoption of the traceability certifications leads to a better economic outcome for the Fuli rice farmers, compared with the adoption of organic or both certifications. This result thereby suggests that higher food safety assurance does not necessarily bring higher returns.

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