Food Safety Management Through the Lens of Hybrids: The Case of Fresh Fruit and Vegetable Shippers

Abstract

Managing the pesticide safety risk to provide end markets with safe fruit and vegetables raises complex issues due to the diversity and stringent nature of public and private safety requirements and the high cost of controlling the product and the production process. More often than not, this leads to the development of diversified and more integrated relationships between growers and their buyers. Our paper is a case study of the hybrid forms underlying such relationships. It begins by developing the analytical framework, drawing on transaction cost, positive agency, and property rights theories with a special focus on the model proposed by Ménard (The Handbook of Organizational Economics, Princeton, 1066–1108, 2013), positioning the hybrid forms along the two dimensions of decision rights and strategic resources. It then presents a selection of quantitative and qualitative findings obtained from data collected through face-to-face interviews with managers of fresh produce shipping firms in France and Chile. Both case studies confirm that the level of centralization increases with the buyer’s commercial reputation, the level of customer safety requirements (a key component in the marketing strategy of the buyer), and the level of asset specificity which is mostly embedded in the technical assistance and training provided by the buyer to the growers. Moreover, our paper establishes a clear divide between firms that only control product safety at the delivery stage and firms that also control safety throughout the production process and may take decisions on behalf of the grower before harvesting.

Appendices

Appendix 1

1.1 Results of the French case study

		Independent variables
Type of control	Dependent variables	Group size	Customer safety demand	Commercial reputation	IPM technician	Quality manager	Intercept	R2	Prob > F
Process control	Process control	0.113	−0.055**	0.413***	1.896**	−1.117 (10.9%)	36.362***	0.635	0.008
Product Control	Analysis pressure	−0.451***	0.010***	0.061***	0.100	−0.457***	4.234***	0.840	0.000
	Sanctions	−3.477**	−0.014	0.513***	3.012***	−3.677***	55.218***	0.699	0.002
	Procedures	−0.465	0.001	0.087	1.364*	−0.597	11.953	0.251	0.487

1. Significant at 1% (***), 5% (**); 10% (*)

1.2 Results of the French case study in more details

 

Appendix: OLS models results
Independent variables	Dependent variables
		Control over the products									Control over the practices
		Pressure of analysis	Sanctions				Control procedures
			Aggregate	Type of penalty	Incentives for grower transparency	Communication of individual residues analysis results at collective level	Aggregate	Grower sampling for residue analysis	At least one analysis per grower per year	Information on the results of analysis and/or association of the IPM technician to control planning adjustments	Aggregate	Crop sheets management	Consultation between quality manager and IPM technician over residues management and prevention	Frequency of greenhouse visits by the QM
Group size		−0.477***	−3.477**	0.874°	−0.993*	0.475	−0.560	−0.128	−1.186*	0.629	1.099	0.005	0.664°	−0.251
Level of customer safety requirements	Aggregate	0.010***	−0.014	0.005	−0.006	0.006	0.0001	−0.100	0.017*	−0.003	−0.055**	−0.011	−0.005	−0.002
	Customer-specific requirements	−0.200***	−0.344	0.097	−0.085	−0.007	−0.429	−0.634**	0.403°	−0.099	−1.490**	−0.273**	−0.229	−0.062
	Share of fast food industry	0.330***	1.178	0.351	−0.156	0.804**	−0.019	0.710*	0.504	−0.617°	−1.530°	−0.382**	−0.018	0.032
	Export of UK customers	0.003	−0.819	0.033	−0.101	−0.174	0.642	−0.135	−0.385	0.528*	0.452	0.175°	−0.030	−0.186
Reputation	Aggregate	0.061***	0.513***	0.184	0.050	0.122**	0.087	−0.048	0.100*	0.178	0.413***	0.044	0.092**	0.054
	Membership in a commercial superstructure	0.346***	2.898***	0.196	0.210	0.825***	0.087	0.069	0.455°	−0.218	1.131*	0.051	0.309°	0.307°
	Level of tomato valuation	0.331°	3.615°	−0.691	0.567	0.735	0.912	0.599	−0.026	0.169	3.485°	0.152	−0.201	0.477
	Tomato segmentation	−0.166°	−0.514	0.105	−0-0.072	−0.129	0.481	0.119	0.740°	−0.189	0.925	0.245	0.119	−0.294
Type of technician		0.145*	3.012***	−0.025	0.556*	0.198	1.483	−0.022	0.231	0.637*	1.941**	0.149	0.449°	0.447°
Type of quality manager		−0.457***	−3.677***	−0.274	−0.557**	−0.381	−0.597	0.037	−0.335	−0.307	−1.765**	−0.237°	0.767**	0.718**

1. Significant at 1% (***); 5% (**); 10% (*)
2. Significant at 20% (°)

Appendix 2

1.1 Results of the Chilean case study

1.1.1 MRL management characteristics of clusters 1 and 2

Cluster	Low control of producer MRL management during production process	High control of producer MRL management during production process
N	12	26
%	31.6%	68.4%
Number of tests	p = 0.000 a,b
Mean	1.6	2.1
Who bears the testing cost	p = 0.052 a,b
Export firms	58.3%	19.2%
Supplier	33.3%	57.7%
Both	8.3%	23.1%
MRL criterion to decide destination market	p = 0.036 a,b
First selection criterion	58.3%	50.0%
Second selection criterion	16.7%	30.8%
Third selection criterion	8.3%	15.4%
Fourth selection criterion	16.7%	3.8%
Timing of destination market definition	p = 0.038 a,b
Before harvest	16.7%	50.0%
At harvest	8.3%	19.2%
In packing	75.0%	30.8%
Timing of testing	p = 0.000 a,b
Before harvest	0%	100.0%
At harvest	50.0%	0.0%
In packing	50.0%	0.0%

1. ^aSignificance: not significant difference = p > 0.05; significant difference = p ≤ 0.05; very significant difference = p ≤ 0.01
2. ^bHSD test

1.2 Results of the Chilean case study

1.2.1 Main structural and management characteristics of clusters 1 and 2

Cluster	Low control of producer MRL management during production process	High control of producer MRL management during production process
N	12	26
%	31.6	68.4
Export size (in million boxes)	p = 0.001 a,b
<1	66.4%	42.3%
1–5	33.6%	30.8%
>5	0%	26.9%
Number of suppliers	p = 0.280 a,b
≤10	30.0%	14.4%
11–60	50.0%	23.9%
61–99	0.0%	19.1%
≥100	20.0%	42.6%
Market destinations (number)	p = 0.065 a,b
<4	0.0%	0.0%
4–5	25.0%	11.5%
>5	75.0%	88.5%
Species (number)	p = 0.148 a,b
1–2	41.7%	26.9%
3–7	33.3%	15.4%
≥8	25.0%	57.7%
Concentration degree (%)	p = 0.575 a,b
Mean	42.0%	33.8%
≤21%	20.0%	28.7%
21–90%	70.0%	66.5%
≥91%	10.0%	4.8%
Certified suppliers (GAP)	p = 0.159 a,b
Mean	79%	89%
≤60%	18.2%	11.5%
61–80%	27.3%	7.7%
≥81%	54.5%	80.8%
Contract with some or all suppliers	p = 0.503 a,c
	66.6%	80.8%
BRC certification	p = 0.503 a,c
	50.0%	61.5%
ISO certification	p = 0.632 a,c
	41.7%	61.5%
The export firm provides technical assistance	p = 0.341 a,c
	69.9%	95.2%
Technical assistance in phytosanitary management	p = 0.082 a,c
	57.1%	70.0%
The export firm performs training	p = 0.033 a,c
	50.0%	75.0%
Mean ratio of suppliers per technical adviser	p = 0.286 a,b
	22.5	11.6

1. ^aSignificance: not significant difference = p > 0.05; significant difference = p ≤ 0.05; very significant difference = p ≤ 0.01
2. ^bt-student test
3. ^cChi-square test