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РЫНКИ ТОВАРОВ И УСЛУГ В АТР
Институты контроля предпринимательской экосистемы на пищевых рынках отдельных стран Азии
Ольга Карпец1, Екатерина Юрченко1*
'Дальневосточный федеральный университет, Владивосток, Россия
Информация о статье
Поступила в редакцию: 17.02.2017 Принята к опубликованию: 06.04.20 17
УДК 336:5 ШЬ Э 47, Ь 51
Ключевые слова:
безопасность продуктов питания, контроль качества, регулирующие институты, рынок продуктов питания, АТР.
Keywords:
food safety, food safety regulation, food quality control, food market, Asian-Pacific Region.
Аннотация
Качество и безопасность продуктов питания являются необходимым условием для обеспечения здоровья нации и роста производительности труда. Динамичное развитие стран АТР привело к росту спроса на качественные продукты питания. Несмотря на актуальность тематики, в проанализированных статьях из реферируемых зарубежных журналов не в полной мере описана предпринимательская среда на пищевом рынке с точки зрения относительной эффективности действующих институтов. В статье проводится сравнительный анализ формальных и неформальных институтов контроля на рынке продуктов питания Японии, КНР и Индии и оценка их эффективности. Предложены пути улучшения текущей институциональной ситуации в этих странах и обсуждаются потенциальные варианты применения опыта этих стран для российского рынка пищевых продуктов.
Entrepreneurial environment at food markets of selected Asian countries control institutions
Olga Karpetc, Ekaterina Iurchenko
А bstract
The article addresses the issue crucial both for the economy as a whole and for every individual consumer since food is one of the basic needs for human beings. Quality offood influences health and productivity of every country's population. However, market sometimes fails to provide correct incentives for the economic agents to supply high-quality products and in a number of countries the problem starts with the food deficit itself so that people do not start to think about its quality. If the government and its institutes are weak the labor force may show maximum productivity and economic development will be impaired.
The issue is even more challenging in Asian countries, due to the rapid growth of the Asia-Pacific Region, which results in higher demands for food quality. Although there is plenty of literature
Автор для связи: E-mail: karpets.ov@dvfu.ru DOI: https:// dx.doi.org/ 10.5281/zenodo.819515
on the topic, that demonstrate various approaches, relative efficiency of food safety control in terms of both formal and informal monitoring has not been examined in detail. The article intends to identify common and distinctive features among the instruments adopted by some countries (Japan, China and India) to provide their citizens guarantees that the food is safe for consumption. A method of comparative study was applied to assess the benefits and efficiency of each type of institution, which include government-provided (legislation) and alternative ones like consumer and producer initiated or third-party (mass-media). In conclusion, some possible suggestions to improve the current entrepreneurial environment at food markets of selected Asian countries control institutions are presented. Special recommendations were made for India due to its unfavorable situation at the moment. Finally, potential policy alternatives for Russia are presented.
Introduction and literature review
Safety of food regulation at a national level should be regarded as extremely important for a number of reasons:
- inherent market imperfections [1];
- in terms of international competitiveness of a company [2];
- for developing countries the issue of compliance stands up high in respect to their exports to developed countries [3];
- in concern of competition issues of co-regulation [4];
- shift of consumers preferences from the volume of food supplied to its quality [5];
- relationships between public and private food safety control systems [6];
- specific reason for Asia: dramatic change in diets [7].
Quality of food influences health and productivity of population therefore should be regarded as governmental issue. Asian-Pacific Region is characterized by rapid growth and while its population gets wealthier it becomes more demanding to food quality as well.
There are two types of institutions controlling food safety: public (presented by statutes and controlling and supporting bodies) and private or alternative, and they have to cooperate otherwise the second may strongly undermine the efficiency of the first.
According to H. Demsetz [8] "the existence of market failure does not mean that government regulations can necessarily improve upon the unregulated market, especially when one considers the positive role that market mechanisms such as liability and product quality reputation play in the provision of safe products, including foods". Therefore efficient alternative institutions complementing formal ones are crucial forsmooth operation of national food safety control system.
Despite the variety of approaches reviewed, it must be noted that the relative efficiency of food safety control in terms of both formal and informal monitoring has not been examined in detail.
Research methodology
The data on food safety regulation was gathered for three countries of Asia: Japan, known by high life expectancy; China and India as populous countries. We identified the major players in this sphere as government, consumers and producers and mass media and applied a method of direct comparative study to determine the most and least effective ones.
The main purpose was to identify those food safety institutions that influence country's population, food quality awareness, and overall monitoring of this market.
Analysis results
Institutions of food safety regulation existing in three countries: Japan, China and India are divided into two groups: formal and alternative institutions. The relative efficiency of formal institutionsis compared in Table 1.
Table 1
Formal institutions of food safety regulation by country
Institution Form Institutions by country
Japan China India
Laws
n - Food Sanitation Law; - The Food Safety Basic Law (2003) [9]; - Japanese Agricultural Standards law(2000) [10]. - The Regulations on the Administration of Food Hygiene (1965) [11]; - China's Food Hygiene law (1995) [12]; - Additional regulations - India's Food Safety& Standards Act 2006 (FSSA).
ев Areas covered
сл ig e L - food safety policy, risk assessment and management; - food quality standards and food related processes, parties and equipment; - Ministry of Health, Labor and Welfare (MHLW) - food quality standards, hygiene rules, monito-ring, enforcement and punishment of violators; - does not specify how to deal with cases of mass food poisoning - food quality standards, food inspections mechanism; - producing, storage, distribution and selling of food; - the system of govern-men-tal regulation of big food enterprise's activity [13, 14]
Authorities
- MHLW; - Food Safety Commission, local governments [15]; - Hazard Analysis and Critical Control Points system (1995) [16]. - Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF); - Food Safety Commission (2003) [17] - Ministry of Health; - Ministry of Agricul-ture; -The General Administration of Quality Supervision, Inspection and Quara-ntine; - China Food and Drug Administration (2003) - The Food Safety & Standards Authority of India (FSSAI); - The Bureau of Indian Standards; - Local authorities
Responsibilities
- risk assessment and management; - stability of food distribution channels; - food quality control system; - collecting information and applying new IT methods [18] - food quality standards, hygiene rules, packa-ging and labelling of products, the mechanism of monitoring, enforcement and punishment of violators; - dealing with food poisoning outbreaks [19] - food quality standards, hygiene rules, packaging and labelling of products, the mechanism of moni-toring, enforcement and punishment of violators; - enforcement of FSSA [20]
As alternative (informal) institutions may be complementary to formal ones we analyzed the major areas of their influence. By alternative institutions we mean the ones provided by market, and groups of economic agents involved in the establishment of such institutions for each country selected.
The areas influenced by alternative institutions provided by market areintro-duced in Table 2.
Table 2
Alternative institutions of food safety regulation, provided by the market by the country
Institution Form Country
Japan China India
Parties
m 5-H - Consumers; - Consumers Associations - Consumers; - China Consumers' Association (1984) - Consumers
a Areas influenced
in sn o o - food safety and food security problems; - expressing consumers' opinion and protecting their rights [21]; - food related education [22] - food safety; - high quality food demand; - consumers' rights pro-tect-tion; - inspections of enterprises [23] - slight influence on food quality problems due to low education level, low food quality awareness and poverty of consumers [24, 25]
Parties
s CJ & •a & tn <D - food producers; - food processing enterprises; - food distributors, including supermarkets and store chains - small and large food producers and retailers; - food processing enterprises; - other related parties - food producers; - food distributors; - street vendors
T3 O Areas influenced
PH -food quality and hygiene with the aim to protect their good image - food quality and hygiene [26] - food quality; - food related equipment; - hygiene; - hygiene training for
In addition to the agents analyzed in the table2 third parties to the market (who are not either consumers or sellers) may also be important in terms of food safety control. For the three countries selected we determined two types of such players Mass Media and Science (individual scientists and institutions). Their relative efficiency is compared in Table 3.
Data presented in the table serves to prove the different state of development of informal institutions in the area of food safety. Japan wins by the scope of their activities and presumed results. For example, mass media in Japan and China went further than simple informing of consumers and Japanese scientists are involved into investigations of food novelties impact and consumers' informing of studies' results.
Table 3
Alternative institutions of food safety regulation, provided by third parties in different countries
Institu-
tion Form Country
Japan China India
Parties
-all sorts of Mass Media; -all sorts of Mass Media; -all sorts of Mass Me-
CS 'S <D g - Journalists - Journalists dia
Areas influenced
s s cd S - informing consumers of food safety situation; - consumers' food quality education; - informing consumers of food safety general situation and food poisoning cases; - informing consumers of food quality questions and raising food
- motivating of food enterprises - investigating of food safety violations [30] quality awareness [31]
Parties
- Scientists; - Scientists; - Scientists;
- Scientific institutions - Scientific institutions - Scientific institutions
Role
Science - developing new technologies for food storage and transporta-tion; - researching food related problems; - developing new tech- - researching food related problems; - developing new tech-
- investigating of the impact of food novelties on the human health; nologies nologies [32]
- informing consumers of the results achieved
Conclusionsand discussion
The effectiveness of food quality control system in three countries investigated varies a lot.
Japan has the most effective system of food quality control. According to statistics of The Economist Intelligence Unit, Japan ranks 23 in the world and 4 Asian-Pacific region by product security level in 2016. Index of food safety in Japan is about 20,7 % higher than average [33].
In 1997 there was registered 1960 food poisoning out-breaks with 40000 victims [16]. In 2005 there was registered 1545 food poisoning out-breaks with 27000 victims, in 2012 there was 1100 food poisoning out-breaks with 26600 victims [34]. Big numbers of affected by food poisoning is the result of effective food poisoning monitoring system in Japan.
Chinese system of food quality control stands on second place. According to statistics of The Economist Intelligence Unit China ranks 42 in the world and seven Asian-Pacific region by product security level in 2016. Index of food safety in China is about 17 % higher than average [35]. However, the system of control for food exporting enterprises is much stricter than for inner operators. As the result, more than 99 % Chinese food export to Eurozone meet international requirements [36].
In 2000 there was registered 150 mass food poisoning out-breaks with 6237 victims, 146 of whom died. In 2005 there was registered 256 mass food poisoning out-breaks with 9021 victims, 235 of whom died [37]. In 2012 there was registered 173 mass food poisoning out-breaks with 6272 victims, 146 of whom died [38]. Reliability of Chinese statistics is questionable, as a majority of food-poisoning cases is not registered. The growing number of registered food poisoning outbreaks can be the sigh of growing effectiveness of monitoring and rising food quality awareness of population. The food quality control system of China needs reforming in order to make it more streamlined. However, the effectiveness of the system is gradually improving thanks to measures undertaken by the government.
Food quality control in India isthe least effective of the three. The number of inspectors is too small to enforce food legislation effectively. With economic development and migration of village population to cities, the popularity of street vendors selling food in cities is constantly growing. The research conducted by Sunita Mishra in 2007 states that about 82 % of respondents prefer to buy food from vendors then to go to the restaurant in evening [39]. The vast majority of vendors operates without license. Only 3 % of street vendors use gloves while cooking, and only 2 % of them wash their hands [40].
According to statistics of The Economist Intelligence Unit, India ranks 75 in the world and 17 Asian-Pacific region by product security level in 2016. Index of food safety in India is about 3.3 % higher than average [41].
Situation in the areas related to food safety is compared according to data on Global Food Security Index provided by Economist Intelligence Unit.This index includes a set of unique indicators, which measures (on the scale from 0 to 100 points) drivers for food security in 113 countries.
The usually discussed in literature benefits of food safety regulation include reductions in risks of morbidity and mortality associated with consuming foods that could be contaminated with microbial pathogens and other hazards [5].
Costs of food safety regulation are predominantly analyzed in terms of deadweight losses (DWL) and we have identified two approaches. Antle focuses on industry's cost of compliance, borne by both industry and the consumers of their products, as well as administrative costs borne by taxpayers and the deadweight loss associated with taxation [5]. Seitone and Sexton identify two sources of deadweight losses [42]:
- wastage of low-quality products since they cannot be sold - DWL borne by suppliers;
- excessive product transformation or quality enhancement - DWL borne by consumers.
Seitone and Sexton even suggest a model for computing the costs and benefits of food safety regulation but, firstly, it is constricted by efficient market conditions and secondly, acquiring such comprehensive set of data requires an additional research (including industry surveys) going beyond the limits of this article. Therefore we introduce a set of recommendations for Japan, India and China based on available official statistics and research literature analyzed [42].
There could be definitelyseen correlation between population income level and effectiveness of food quality control system.
Japan as a developed country began to create and improve its food quality control system much earlier than China and India. The performance or formal institutions in this country is higher. Responsibilities of central and local governmental
bodies are clearly divided. Laws related to food safety are regularly reviewed and kept up-to-date. Corruption index provided by the Economist Intelligence Unit is the smallest among the three selected countries.
Table 4
Global Food Security by country [33, 35, 41]
Ja pan China India
Categories and indicators Indicator score % difference from average Indicator score % difference from average Indicator score % difference from average
Affordability
Food consumption as a share of household expenditure 87.8 +25.7 64 +1.9 61.1 -1
Proportion of population under global poverty line 100 +27.5 70.7 -1.8 37.6 -34.9
Presence of food safety net programs 100 +32.5 100 +32.5 50 -17.5
Availability
Sufficiency of supply 62.7 +2.5 76.2 +16 40.4 -19.9
Public expenditure on agricultural R&D 0 -13.4 0 -13.4 0 -13.4
Agricultural infrastructure 80.6 +24 80.6 +24 41.7 -14.9
Corruption 75 +38.5 25 -11.5 25 -11.5
Quality and safety
Diet diversification 69.6 +13.3 50 -6.4 37.5 -18.9
Food safety 100 +20.7 96.2 +17 82.5 +3.3
Sources: [33, 35, 41].
Chinese rapid economic development boosted an increase of income level as well. Rising consumer awareness and demand for higher quality made food safety the issue of wide public concern. However, formal institutions of food quality control still need further improvement. Index of corruption is quite big. The main positive factor in this situation is government's attention to the issue. There are impl emented food safety net programs and government managed to allocate the required resources.
India has the biggest proportion of population below the global poverty line (or population living under $3.10/day in purchasing power parity). The problem of food quality in this country has become an issue of concern only recently. System of formal food quality control institutions is not effective enough. The responsibilities of various governmental bodies are not clearly divided. There is a lack of financial and human resources for implementation of related laws and control of food market operation. There are corruption problems and the lack of food safety net programs.
It should be noted that in Japan and China formal and informal institutions actively participate in monitoring food quality, while in India informal institutions fail
to provide sufficient motives to improve food quality, and food safety may be supported just by formal institutions.
In perspective, all the countries reviewed should increase public expenditures on agricultural R&D. Introduction of modern technologies like IT-systems can improve food quality and facilitate control over the food market. In the long term, these measures can help to create a food tracking system that will provide consumer with data on each item purchased. However, usage of modern technologies and overall modernization of food quality control system could be expensive; therefore, countries should implement this measures with the regard for existing resources.
China and India definitely lack such an important institute as quality standardization system. Therefore the introduction of international systems of quality certification (ISO, HACCP and others) is highly recommended.
Both countries also need further improvement of population income level, which will lead to growth of demand for food quality. The operation of formal institutions in these countries should become more efficient in order to decrease corruption level.
In addition to raising income level it is important for India to supply sufficient amount of food to the market. Market saturation can raise consumers demand for quality, increase competition and provide correct incentives to producers to supply high quality products. Infrastructure development in agricultural areas will also result in higher food quality.
From the side of informal institutions an establishment of consumers associations can also be a useful measure. They may facilitate interaction between government, consumers and producers and help to protect consumers' interests. Educational level of population should be raised to increase food safety awareness and to improve the level of consumers' participation in food market monitoring.
The issue of food safety in Russia is as much important as in the analyzed countries because food in Russia is abundant and affordable (according to the Global Food Security Index) but its quality is lower than in Soviet period.
Russia has a rather developed system of formal institutions (different technical standards applicable to various types of food) but the enforcement problem with the formal institutions is quite evident and the institutions themselves are not efficient enough. Some big companies choose to pass voluntary quality certification (HACCP etc.) but the quality is still not guaranteed.
Corruption level aligns Russia with countries like China and India though Russia ranks higher (48 against 75 for India). Therefore the same recommendations in this respect are advised.
From the other side Russian consumers are not educated in food safety issues in order to be able to choose among certified and non-certified products. Consumer food safety awareness growth in Russia may enhance competition among food suppliers and raise the overall level of food safety in the country.
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Сведения об авторах / About authors
Карпец Ольга Викторовна, кандидат экономических наук, доцент кафедры менеджмента, Школа экономики и менеджмента, Дальневосточный федеральный университет. 690920 Россия, г. Владивосток, о-в Русский, кампус ДВФУ, корпус G. E-mail: karpets.ov@dvfu.ru
Olga V. Karpetc, Candidate of Science (Economics), associate professor of the Department of Management, School of Economics and Management, Far Eastern Federal University. 69G92G Russia, Vladivostok, Russky Island, FEFU campus, building G. E-mail: karpets.ov@dvfu.ru
Юрченко Екатерина Сергеевна, ассистент кафедры Тихоокеанской Азии, Восточный институт, Школа региональных и международных исследований, Дальневосточный федеральный университет. 690920 Россия, г. Владивосток, о-в Русский, кампус ДВФУ, корпус D. E-mail: iur-chenko. es@dvfu. ru
Ekaterina S. Iurchenko, Assistant Professor, Department of Asian-Pacific studies, Far Eastern Federal University, Oriental Institute - School of Regional and International Studies. D Ajax Street, 69G92G, Vladivostok, Russia. E-mail: iurchenko.es@dvfu.ru
© Карпец О.В., Юрченко Е.С. © Karpetc O.V., Iurchenko E.S. Адрес сайта в сети интернет: http://jem.dvfu.ru
