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Economics of food chain coordination and food safety standards: Insights from Agency Theory

Lookup NU author(s): Dr Diogo Monjardino De Souza Monteiro


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Over the past three decades food markets became increasingly integrated and contractsbetween upstream suppliers and downstream manufacturers, retailers and food servicebusiness are increasingly the norm. Economic theory suggests that integrated companies willhave fewer foodborne illness outbreaks, since the integrated companies have more controlover their supply chain from farm to table. Yet, despite this change in global marketstructure, there have been many food safety outbreaks in the last decade. The prevention andmitigation of these outbreaks was significantly undermined by the existence of informationfailures, even within a single company. This chapter introduces agency theory, an economicframework that helps understand the role of information on the vertical contractual relationsin the food supply chain. The change in economic incentives under different contractsituations is explored. We further discuss how this framework can be used to examinealternative public policies and private strategies to improve supply chain coordination andreduce food safety risks, against some standard established either by the private sector or bygovernment agencies.

Publication metadata

Author(s): Souza Monteiro DM

Editor(s): Roberts T

Publication type: Book Chapter

Publication status: Published

Book Title: Food Safety Economics: Incentives for a Safer Food Supply

Year: 2019

Pages: 29-47

Print publication date: 08/01/2019

Online publication date: 22/12/2018

Acceptance date: 05/03/2018

Series Title: Food Microbiology and Food Safety

Publisher: Springer

Place Published: Berlin


DOI: 10.1007/978-3-319-92138-9_3

Library holdings: Search Newcastle University Library for this item

ISBN: 9783319921372