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Benefit/Cost Analysis in Public and Private Decision-Making in the Meat and Poultry Supply Chain

  • Tanya RobertsEmail author
Chapter
Part of the Food Microbiology and Food Safety book series (FMFS)

Abstract

Benefit/cost analysis (BCA) is a tool that can be used to examine either public or private decision-making. What differs is what variables are included in each BCA. Hazard Analysis and Critical Control Point/Pathogen Reduction (HACCP/PR) regulation was established in 1996 for US meat and poultry. From the US government’s perspective, the estimated benefits of HACCP were a reduction in foodborne illnesses of the American public citizens and their expenses (medical costs, productivity losses, and pain and suffering) vs. the costs to industry of implementing the HACCP regulations. The public health protection benefits were estimated to be in the billions of dollars, while the industry costs were in the millions of dollars.

A private firm’s decision whether to invest in poultry production in China, however, examines benefits and costs using variables to determine profitability. Some of the factors to be considered in this private BCA include (1) the increasing demand for poultry meat in China and other Asian countries with rising incomes; (2) the demand for the wide range of chicken parts in China; (3) the cost savings of raising chickens in China, including lax environmental regulations and enforcement; (4) the possibility of selling chicken breasts (and frozen chicken products) in the US market at a premium price that more than covers all costs, including transportation; and (5) competition with increasingly global food companies in Asian markets.

Keywords

Benefit/cost analysis Food safety Hazard Analysis at Critical Control Points (HACCP) Prevention Pathogens Chinese chicken Regulation 

Abbreviations

AI

Avian Influenza

BCA

Benefit/Cost Analysis

CCP

Critical Control Point

CDC

Center for Disease Control and Prevention/USA

EO

Executive Order from the President of the USA

ERS

Economic Research Service/USDA

FSIS

Food Safety and Inspection Service/USDA

HACCP

Hazard Analysis and Critical Control Points

ICMSF

International Commission on Microbiological Specifications for Food

LTHO

Long-term health outcomes

OIRA

Office of Information and Regulatory Affairs/OMB

OMB

Office of Management and Budget/USA

PPIA

Poultry Products Inspection Act/USDA

USDA

United States Department of Agriculture

Notes

Acknowledgments

Many thanks to review comments from Mary Ahearn, Walter Armbruster, and Diogo M. Souza Monteiro. All omissions and misstatements, of course, remain my errors.

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Economic Research Service, USDA (retired)Center for Foodborne Illness Research and PreventionVashonUSA

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