The Economics of. in Fisheries

Transcription

1 The Economics of Standards-Certification-Quality Signaling in Fisheries Julie A. Caswell University of Massachusetts Amherst Sven M. Anders University of Alberta The Hague, April 22, 2009

2 The Quality Assurance Market Global, national, regional, and local supply chains Many major players Governments Supply chain participants, non-governmental organizations Proliferation of food standards and related certification and quality signaling Multiple attributes Multiple objectives

3 Dimensions of Fishery Certification Schemes Signaling Mechanism Type of Scheme Scheme Owner Attributes Certified Standards Certification Body Fishery Certification Standards Type I, II, III Geographic Scope Regulatory Oversight Standard Setting Organization

4 How can Economic Concepts Help? Imperfect, asymmetric information affects market functions Presence, mitigation of adverse selection, moral hazard, & fraud Market failure in fisheries Economic problem of over-use of common pool resources Weak definitions of responsibilities

5 Certification is a Solution to Market Failure The Promise Potential Ownership Flow of product Flow of information Supplier Retailer Certification Standard Owner Monitoring Certification Body <-Standard specifications-> Accreditation Body Accreditation Control Control Body Consumer

6 Certification is a Solution to Market Failure The Peril Misrepresentation of true quality Buyers overpay for product attributes Shadow markets (IUU) Exertion of market power Standards owners (certifiers) may use schemes to unfairly disadvantage rivals Governments may misuse certification requirements to distort markets and trade

7 Promise or Peril for Certification of Fisheries Products? Benefits Costs Consumer demand Production systems Cost savings Certification Market access Labelling, promotion Innovation Technology Sustainability Risk of investment Supply-chain integration Liability Traceability Knowledge, regulation Enforcement

8 Benefit Distribution Consumer awareness, recognition, trust, affect understanding = W Supply chain structure (B2B vs. label) Competition, market power, bargaining Standard type, ownership, enforcement Regulatory framework Promotion, advertising, market shares, and competing labels Geographic scope, int. trade

9 Economic Evidence So Far Evidence on consumers positive willingness to pay for eco-labelling Potential trade offs Increasing retail take-up of new generation and custom standards Does label proliferation threaten ecolabelling objectives? MCOOL, organic, carbon footprint

10 LEVEL OF GOVERNMENT INTERVENTION What Role for Regulatory Oversight? Public right to know, need to know, want to NO INTERVENTION No government regulation Private controls know, or fraud protection? Voluntary private Codes of Practice What level of government intervention? SELF-REGULATION Added complexity with fisheries INFORMATION Common pool resource & EDUCATION Shared international regulations, responsibilities Government/private partnership in regulation Enforcement of multilateral agreements CO-REGULATION Farm assurance schemes Retailers proprietary quality assurance schemes Government assembles & publishes evidence Provides information/advice to consumers Naming and Shaming Statutory or government-backed Codes of Practice or Action Plans INCENTIVE- BASED STRUCTURES DIRECT REGULATION Government rewards desirable behavior by private or voluntary sector Creating market incentives for food safety investments Liability rules Prohibition of certain actions, products and/or processes Prescription: process standards (HACCP), labeling Sanctions and penalties

11 Looking Forward Eco-Labelling & Governance of Fishery Supply Enforcement of international FAO guidelines Conflicting management targets across fisheries Gov. control, optimal standards? International standard harmonization Integration of developing country producers

12 Looking Forward New Generation Certification Schemes Complexity of international supply chains New generation of private, voluntary certification systems (e.g. GlobalGAP) Weak corporate responsibility Producer assistance, feedback, minimum participatory elements; Emergence of geographical differentiation and labelling schemes;

13 Current Issues Basic fishery regulation exist in FAO guidelines; Understanding of drivers of new generation certification systems Private benefits key to success Trade-offs in demand environment vs. quality and safety Responsibilities for public policy Control (oversight) of eco-labelling to assure minimum sustainability criteria