The Uneven Spread of Private Food Quality Standards Over Space and Time
Insa Flachsbarth, Nina Grassnick, Bernhard Brümmer
University of Goettingen, Dept. of Agricultural Economics and Rural Development, Germany
In response to discerning consumers worldwide, retailers increasingly demand compliance of stringent standards with requirements for food quality and safety, for environmental sustainability and for labour standards. The GlobalG.A.P. standard, being the most prominent global private agri-food pre-farm gate process standard, increased by almost six folds between the mid-1990s and 2011. As a result, many agricultural producers across the world are embracing GlobalGAP as an entry ticket to high-value (mostly) European and US markets. However, over the last two decades, also in developing countries, the retail-sector has undergone a tremendous transformation from traditional retail systems to modern grocery stores. Market power structures of retailers versus farmers make compliance by farmers in developed and developing countries de-facto mandatory to access high-value markets. However, the global spread of important certification schemes is highly unequal. While some regions perform well in adjusting to the sector's transformation, other world regions lag behind and show low certification rates of farmers. These unequal patterns of the global diffusion of food quality standards remain poorly understood, as neither the underlying macroeconomic determinants of standard adoption nor the dynamics over time have been thoroughly investigated. The study seeks to fill this research gap and find the country-level factors that explain this uneven spread, conceptually grounding on the theoretic field of organisational innovations. Findings show that the degree of supermarket distribution in a country and governance structures explain why countries can enter certification markets for the first time. A favourable business environment, high quality of infrastructure, and existing strict public regulations explain an intensification of certification rates. These findings provide important policy implications. To promote the further expansion of certification within countries, public and private investments in modern retail systems seem an appropriate means. Moreover, connecting rural production areas to urban centres by infrastructure investments should help to further spread private food standards.
Keywords: Certification, diffusion of innovations, global value chains, GlobalGAP, market access, private food standards
Contact Address: Insa Flachsbarth, University of Goettingen, Dept. of Agricultural Economics and Rural Development, Heinrich-Düker-Weg 12, 37073 Göttingen, Germany, e-mail: insa.flachsbarthagr.uni-goettingen.de