L12

Question 1

GAP= good agricultural practice

Answer 1

Was initiative from supermarket in Europe
Each supermarket had their own standards
Made it difficult for producers since all had different standards
Wanted to find a common standard that the farmers needed to satisfy
Started in Europe but also went to Africa and USA
Basically the same standards globally

Question 2

Drivers of growth of standards

Answer 2

• Economic reforms
• Income growth (care more about quality when income increase)
• Urabanization (assymetric information)
• Foreign investment (FDI) (introduce standards by modern retailers)
Trade liberalization (standard in richer part of world implement standard for production in poorer parts)

Question 3

Why is standard often implemented?

Answer 3

Because of shocks or scandals

For example Dioxin chaos (motor oil in recycling systems)

Question 4

History of EU food standards history

Answer 4

2002 introduced basic food law regulation
International european food safety instead of nationally
From farm to fork: value chain approach: trace where raw material come from

Question 5

Are standards good or bad for developing countries?

Answer 5

Standards can be barriers to trade and development but can also be positive
Depends in nature of standards, how they are implemented, how government rules impact
Smallholders can not always handle, although sometimes group of smallholder contract
Employment is also a benefit (creates low skilled jobs that benefits poor people)
Certification is sometimes good and sometimes bad

Question 6

Simple value chain model

Answer 6

(tech company, farmer, processor, consumer)
Two flows: Finance and product
Customer want specific product and information needs to flow
If one arrow do not work then entire system collapse
Agriculture finance is often difficult in developing countries

Question 7

Solutions for value chain model

Answer 7

Reorganize
Processer finance
Technology company give input and output is sold back to tech company
Collaboration (processor and tech company bring in finance)

Question 8

Vertical coordination

Answer 8

Farmers need specific investment to produce good
Might not have access to that because of financial mean or geographic etc.
Does not have access to input
Interlinked contract=> buyer provide input but then buy output from farmer
Potential surplus = value - investment