A Study On Food Safety Issue Based On The Perspective Of Production&Operation Body Incentive

There is a Chinese saying “Food is god for the people”, but food safety is whatmatters to food. Food safety is an extremely important issue concerned with not only theorderly development of the food industry, but also the health of population, and even thestability of a society. The protection of food safety, therefore, is becoming a topic relatedto livelihood, economy and even politics. People’s appeal of safe quality food advancesalong with the development of the society. A fundamental multi-layered supervisionsystem has been setup by the Chinese government in the efforts of satisfying such anappeal. The frequently triggered food safety issues in recent years, however, reflect theurgent necessity of completing our food safety protection systems. Researches on foodsafety issues, therefore, have realistic significance to the society. The protection of foodsafety needs comprehensive treatment from different perspectives. Strengthenedsupervision can be the fundamental treatment for the obviously massive food industryunethical practice. It is however public resource consuming and ineffective whensupervision works alone, due to the attribute of food safety trusted products, and thecomplicated but low entry and transition cost of our huge sized food industry. Under suchan environment, the upgrade of market according to the actuality and characteristic of ourfood industry, the creation of incentive compatibility conditions, and the incentive ofproduction&operation bodies in improving food safety from an economic incentiveperspective, become necessary supplements to the strengthening of governmentsupervision and, would be the ultimate approach in achieving food safety from along-term view.In a general survey of food safety researches from both China and abroad, there hasbeen fruitful achievements. Their approaches are great numbered from executivemanagerial perspective, but much less from the economic incentive perspective. It isespecially true in China, that the study of food safety issue from an economic incentiveperspective is rare. Based on both theoretical and empirical needs, the research wasundertaken in an actual food safety environment, with theories from informationeconomics and industrial organization, and with methods of choice experiemt andquantitative analysis, the food safety incentive mechanism was analyzed by setting up aproduction&operation body decision-making model under the condition of asymmetricinformation. With the data from incidents statistics and field investigations, the empirical analysis of chinese food safety situation and cognitive decisions of related subjects wereanalyzed, and related policy proposals were provided.After introducing the research theme, firstly, this research makes analysis of theChinese current food safety situation, based on the statistical data of2173food safetyincidents, the governmental data of monitoring food safety and sampling, as well as thedata investigated from637sample consumers. After a series of theoretical and empiricalanalysis, it is concluded that the general food safety environment in China is promising,which can be testified from the current situation and the protection system. There are,however, frequently human factors greatly affect consumer recognitions and theirsatisfaction to government supervision. Further incentive and restrictions to the productionand operation bodies are necessary for ensuring a food safety environment.Secondly, from the perspective of our choices in food safety target level, thesupervision of food safety issues requires an overall consideration in social ethics,consumer cognition and consumer appeal to the rights of health. Under a social transferpayment policy, a reasonable food safety target level should be higher than a Benthamismsocial welfare functional target level.Thirdly, from a perspective of food safety incentive mechanism, the primary causeof food safety problem is asymmetric information. A credible information mechanismcould correct the malfunction of food industry in a certain degree. The performance ofinformation mechanism, however, depends on whether the information reflects the trueendowments and safety level differences of the production&operation bodies, andwhether the information could be completely received and unanimously interpreted by theconsumer. In addition, under an asymmetric information condition, the achieving ofcompatible incentive mechanism can be realized by reduced difficulty for improving foodsafety environment, by improved benefits for producing safe food, and increased cost forproducing disqualified food. In consideration of supervising food safety issue under acompetitive environment, motivating corporations to upgrade their food safety level couldbe achieved by sufficient corrections of food safety belief in problem corporations, and bythe prevention of industrial spread effect.Finally, choice experiments are introduced into the research. Based on theinvestigations of486sample subjects, the approval rate and preference of relative foodsafety improvement arrangements are examined in the market.643sample vegetablefarmers, as the starting unit of food production, are also investigated for the empiricalanalysis of pesticides application behaviour influenced by such factors as profits incentivenominal variables. Learned from the results of empirical analysis, there is a remarkablerecognition to food safety regulations in the market, which constitutes the foundation ofcorporative incentive in improving food safety environments. Also learned from theinvestigation of farmers’ pesticide application, market profits insurance incentive nominalvariables have greater impact to the behavior than government monitoring variables and market organization pattern variables, besides, the result also shows some rationality ofthe research perspective.Overall, this research may contribute to the following: gave a economic analysis totargeted level of food safety based on social welfare function perspective; analyzed foodsafety incentive mechanism by using information economics and other theories;empirically examined the market cognition and preference to relative food safetyregulations; and inspected the effect of market benefits incentive factors to farmers’pesticide application. There are, however, research limits exist and it demands furtherstudy, i.e. limited theoretical analysis and empirical subject choices. Above all, the gate ofeconomics studies in food safety issues is unlocked, any further developments andexpansions of the study is beneficial to the theories and practices of food safetysupervision.