The effect of governance mechanisms on food safety in the supply chain: Evidence from the Lebanese dairy sector.

Abstract

Food safety is a key public health issue worldwide. This study aims to characterise existing governance mechanisms - governance structures (GSs) and food safety management systems (FSMSs) - and analyse the alignment thereof in detecting food safety hazards, based on empirical evidence from Lebanon. Firm-to-firm and public baseline are the dominant FSMSs applied in a large-scale, while chain-wide FSMSs are observed only in a small-scale. Most transactions involving farmers are relational and market-based in contrast to (large-scale) processors, which opt for hierarchical GSs. Large-scale processors use a combination of FSMSs and GSs to minimise food safety hazards albeit potential increase in coordination costs; this is an important feature of modern food supply chains. The econometric analysis reveals contract period, on-farm inspection and experience having significant effects in minimising food safety hazards. However, the potential to implement farm-level FSMS is influenced by formality of the contract, herd size, trading partner choice, and experience. Public baseline FSMSs appear effective in controlling food safety hazards; however, this may not be viable due to the scarcity of public resources. We suggest public policies to focus on long-lasting governance mechanisms by introducing incentive schemes and farm-level FSMSs by providing loans and education to farmers. © 2016 Society of Chemical Industry.