Progress 04/01/12 to 03/31/17

Outputs
Target Audience:The research efforts were presented at the 2015 Southern Agricultural Economics Association Annual Meetings in January 31-February 03 in Atlanta Georgia, the 2015 International Agricultural Trade Research Consortium Annual Meetings, December 13-15, Clearwater Beach, Florida, the 2016 Southern Agricultural Economics Association Annual Meetings in San Antonia, Texas, and the 2017 Agricultural and Applied Economic Association Annual Meetings in Chicago, Illinoise. They were also published [Seok, J.H, M.R. Reed and, S. Saghaian, 2016. The Impact of SQF Certification on US Agri-Food Exports. International Journal of Food and Agricultural Economics, 4(3), 1-16, and Seok, J.H. and S. Saghaian, 2016. The Impact of Service Offshoring on Agriculture and Food Sector Productivity, Journal of Agribusiness, 34(1), 51-64.]. In addition, they were discussed at the departmental seminar series and college level as well as in my graduate class, Advanced Agribusiness Management, AEC 622, which is offered for our MS and PhD students annually. The research articles and PowerPoint presentations are accessible by food industry leaders and managers, and academicians (professors, students,and professional) nationally and internationally through Ag-Econ Search website. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The research results were presented at national and international conferences with a wide audience from industry leaders, policy makers and acedicians. The information in this research was also presented in AEC 622 classroom for our MS and PhD students training, and also at the college and departmental levels for our students and colleagues to discuss and learn about the role and uses of food safety regulations and standards, and SQF certification in agricultural product markets. How have the results been disseminated to communities of interest?This research rersults were accepted and presented at national and international conferences with a wide audience from industry leaders, policy makers and acedicians who could take it to their beneficieries and stakeholders, and benefit from it. It was also published in scientific journals for many to benefit from it. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? We investigated food safety regulations and international trade of agricultural products with three aspects: the signalling effect from U.S. strict food safety regulations on U.S. vegetable exports, political determinants of sanitary and photosanitary non-tariff barriers, and the impact of trade barriers on employment in developing countries. First, we investigated the impact of high U.S. maximum residue limit (MRL) standards on U.S vegetable exports to 102 countries utilizing the hierarchical model. MRL, which is one of the non-tariff barriers with respect to food safety, is applied to home and foreign countries at the same time. Thus, firms in countries with higher food safety standards are expected to have a competitive advantage from the 'signalling/learning effect'. The results show that high MRL standards in the U.S. have a positive impact on U.S. vegetable exports, indicating the 'signalling effect' from the strict U.S. domestic MRL standards. The results provide policy makers with insights into how strict food safety regulations of the home country can be considered as a catalyst for increasing competitiveness in international markets. Second, we examined the political determinants of SPS notifications using a nonlinear threshold model with possible threshold variables (GDP per capita and tariff rate). This article finds no threshold values in both variables of GDP per capita and tariff rate. Our results also show that GDP per capita has a positive relationship with SPS notifications that are one of proxy variables for food quality. That implies the importance of quality competition in agriculture and food sectors. Our finding also represents no significant effect of tariff on SPS notifications. This indicates that a law of constant protection, presenting an inverse relationship between tariff and non-tariff barriers, is not satisfied in the agricultural and food sectors. Third, we investigated the impact of tariff and SPS barriers on food manufacturers' skilled and unskilled employment in developing countries utilizing a structural equation model. Results show that both tariff and SPS barriers have a positive effect on unskilled labor employment in developing countries, while trade barriers are not associated with skilled labor employment. This implies that Hecksher-Ohlin theory, presenting labor abundant countries have a comparative advantage in labor-intensive industries such as food, explains well our results since developing countries are abundant in low-skilled labor. We also find that the age of food firm in developing countries is positively related to skilled employment; however, no relationship with unskilled employment. This implies that older food firms change their production process from labor intensive to capital or machine intensive. Many studies show that product quality plays an important role in determining the direction of trade. This project used the Safe Quality Food (SQF) certification as a proxy variable for quality to investigate its effect on U.S. exports. The results of this study show that only the highest level of SQF quality certification has a positive effect on U.S. agri-food exports. The results of this paper have three implications. Firms in the U.S. may want to become certified at the highest level of private standards if they are serious about increasing their exports. On the government side, they should consider employing high public standards or follow other strategies to promote development of high private standards. On the consumer side, SQF may have a signaling effect. SQF represents high quality in terms of food safety, which means that many consumers who want to buy high quality goods may enjoy the high quality products without risks of uncertain information.

Publications

• Type: Journal Articles Status: Published Year Published: 2016 Citation: Seok, J.H., M. Reed, and S. Saghaian. (2016). The Impact of SQF Certification on the U.S. Agri-Food Exports. International Journal of Food and Agricultural Economics, 4(3): 1-16.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Li, X. (Vivian), S. Saghaian, and M. Reed. (2013). The Impact of HACCP on U.S. Seafood Exports: The Case of Fish, Mollusks and Shellfish other than Mollusks, Journal of International Agricultural Trade and Development, 8(2):111-123.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Ilunga, Y. and S. Saghaian. (2015). Impact of Access to Healthy Food on Obesity: The Evidence from U.S. Counties. Selected paper. The SAEA Annual Meetings, January 31-February 03, Atlanta, Georgia.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2017 Citation: Zarebanadkoki1, S., S. Saghaian, Y. Zheng, and S. Buck. (2017). Market Responses to Beef Recalls. Selected paper. The SAEA Annual Meetings, February 4-7, Mobile, Alabama.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Shepherd, J. and S. Saghaian. (2015). Risk Perception and Trust Interaction in Response to Food Safety Events across Products and Their Implications for Agribusiness Firms. Journal of Food Distribution Research, 46(3):91-112.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Ashktorab, N., S. Saghaian, and N. Shahnoushi. (2013). An Analysis of Aflatoxin Food Safety Concerns and other Factors Affecting Irans Pistachio Exports to EU, Australia, and Japan, Asian Journal of Agriculture and Development, 10(2): 95-105.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2017 Citation: Darbandi1, E. and S. Saghaian. (2017). Impact of Food Safety Events on the U.S. Beef Exports to the EU. Selected paper. The SAEA Annual Meetings, February 4-7, Mobile, Alabama.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2015 Citation: Seok1, J.H. (presenter), M. Reed and S. Saghaian. (2015). The Impact of Safe Quality Food Certification on the U.S. Agri-Food Exports with a Focus on Product Quality. Selected paper. The International Agricultural Trade Research Consortium Annual Meetings, December 13-15, Clearwater Beach, Florida.

Progress 10/01/15 to 09/30/16

Outputs
Target Audience:The research efforts were presented at the 2015 Southern Agricultural Economics Association Annual Meetings in January 31-February 03 in Atlanta Georgia, and the International Agricultural Trade Research Consortium Annual Meetings, December 13-15, Clearwater Beach, Florida. They were also discussed at the departmental seminar series and college level as well as in my graduate class, Advanced Agribusiness Management, AEC 622 which is offered for our MS and PhD students. The research articles and PowerPoint presentations are accessible by food industry leaders and managers, and academicians (professors, students,and professional) nationally and internationally through Ag-Econ Search website. The research effort was also published in the International Journal of Food and Agricultural Economics, 4(3): 1-16. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?This research was presented at an international conference with a wide audience from industry leaders, policy makers and acedicians. The information in this research was also presented in my AEC 622 classroom for our MS and PhD students training, and also at the college and departmental levels for our students and colleagues to discuss and learn about the role and uses of SQF certification in agricultural product markets.. How have the results been disseminated to communities of interest?This research was accepted and presented at an international conference with a wide audience from industry leaders, policy makers and acedicians who could take it to their beneficieries and stakeholders, and benefit from it. It was also published in an international journal for many to benefit from it. What do you plan to do during the next reporting period to accomplish the goals?I have three exiting new research proposals prepared as a PhD dissertation project currently in progress: The first essay, entitled: "The 'Learning Effect' and the Impact of High Maximum Residue Limit Standards on the U.S. Vegetable Exports," investigates the probability that a home country's strict food safety regulations may improve a home country's competitiveness by the 'learning effect'. The second essay, entitled: "Political Determinants of Sanitary and Photosanitary (SPS) Notifications: Testing the Law of Constant Protection and Food Safety Demand," tests the law of constant protection that is the inverse relationship between trade and non-tariff barriers. Furthermore, the second essay investigates the political determinants of SPS notifications using a nonlinear threshold model with GDP per capita and tariff rate variables. The third essay, entitled: "Trade Barrier Effects of Sanitary and Photosanitary on Skilled and Unskilled Workers in Food Manufacturing Firms," investigates food safety related non-tariff barrier reduction effects on unemployment, differentiating between skilled and unskilled workers.

Impacts
What was accomplished under these goals? Many studies show that product quality plays an important role in determining the direction of trade. This project used the Safe Quality Food (SQF) certification as a proxy variable for quality to investigate its effect on U.S. exports. The results of this study show that only the highest level of SQF quality certification has a positive effect on U.S. agri-food exports. The results of this paper have three implications. Firms in the U.S. may want to become certified at the highest level of private standards if they are serious about increasing their exports. On the government side, they should consider employing high public standards or follow other strategies to promote development of high private standards. On the consumer side, SQF may have a signaling effect. SQF represents high quality in terms of food safety, which means that many consumers who want to buy high quality goods may enjoy the high quality products without risks of uncertain information.

Publications

• Type: Journal Articles Status: Published Year Published: 2016 Citation: Seok, J.H., M. Reed, and S. Saghaian. (2016). The Impact of SQF Certification on the U.S. Agri-Food Exports. International Journal of Food and Agricultural Economics, 4(3): 1-16.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Shepherd, J. and S. Saghaian. (2015). Risk Perception and Trust Interaction in Response to Food Safety Events across Products and Their Implications for Agribusiness Firms. Journal of Food Distribution Research, 46(3):91-112.
• Type: Conference Papers and Presentations Status: Other Year Published: 2015 Citation: Ilunga, Y. and S. Saghaian. (2015). Impact of Access to Healthy Food on Obesity: The Evidence from U.S. Counties. Selected paper. The SAEA Annual Meetings, January 31-February 03, Atlanta, Georgia.
• Type: Conference Papers and Presentations Status: Other Year Published: 2015 Citation: Seok, J.H., M. Reed and S. Saghaian. (2015). The Impact of Safe Quality Food Certification on the U.S. Agri-Food Exports with a Focus on Product Quality. Selected paper. The International Agricultural Trade Research Consortium Annual Meetings, December 13-15, Clearwater Beach, Florida.

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:The research efforts were presented at the Southern Agricultural Economics Association Annual Meetings held on January 31-February 03, 2015 in Atlanta, Georgia, and International Food and Agribusiness Management Association 25th Annual Meetings held on June 14-15, 2015 in Saint Paul, Minnesota. They were also discussed at the departmental seminar series and college level as well as in my graduate class, Advanced Agribusiness Management, AEC 622 which is offered for our MS and PhD students. The research articles and PowerPoint presentations are accessible by food industry leaders and managers, and academicians (professors, students, and professional) nationally and internationally through Ag-Econ Search website. The research efforts were also submitted and accepted by scientific journals such as Journal of Agribusiness, Journal of Food Distribution Research, and Journal of International Agricultural Trade & Development,which are forthcoming. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The results demonstrated that stricter standard has a negative impact on EU trade, and a decrease in domestic welfare and international welfare. The analysis with domestic welfare justifies the EU's policy on tightening the food safety standard on importing shrimps if it wishes to protect domestic suppliers. However, EU consumers suffer from a welfare loss with stricter standards. The zero tolerance policy seems to violate the purpose of food safety standard that stricter standard should benefit consumers by providing food with higher quality, as it reduces consumer welfare. The zero tolerance policy is too tough. The results also showed that with stricter standards, the welfare of suppliers from developing countries is severely reduced while suppliers from developed countries benefit. This analysis of foreign and international welfare supports the assertion that developed countries have advantages over developing countries in the eyes of consumers. With food safety standards increasing with time, developing countries should increase their level of food safety by adopting advanced regulations or techniques so they don't suffer losses as regulations become more stringent. It was interesting to find that developing countries might benefit from the MRPL. Their products were suspect before the enforcement of MRPL in 2002 because of the detection of high hazard to human health. After the EU relieved the required level of MRPL, consumers bought more shrimp products from developing countries. Policy makers need to realize that their response to food safety scares has large impacts on producers and consumers throughout the world. They should be careful as they develop policies and regulations. For the obesity study, according to the analysis several factors combined with access to healthy food, are likely to be effective. The number of recreational areas and fitness facilities is important in decreasing the obesity rate. This would allow people with low incomes to access to these facilities. Even though many U.S. counties have a number of free recreation areas, most of the modern and high quality fitness facilities are private and require a certain amount of money to access them. Economically, a higher number of those structures will increase competition, which will cause a decrease in access fees. There is evidence that access to healthy food has a negative impact on obesity rates in the U.S. using county level data. The first recommendations for those who intend to use this analysis for different prospective is that U.S. counties need to increase the number of programs which operate on a daily basis during the year. The second is that counties should find possible ways to facilitate broader access to fitness facilities, whether by lowering users' taxes or by acquiring basic materials at low cost to improve their existing recreation area. Also important is encouragement for young people who are more at risk for obesity to eat healthier and to engage in physical activities. We also recommend to the population to do the best they can to increase their income in order to have more quality choices in their eating behaviors. Good health is priceless. It is better to prevent obesity in the first place by practicing healthy behaviors than to try to treat the consequences. How have the results been disseminated to communities of interest?The research efforts were accepted for publication by several scientific journals. The research efforts were also presented at the Southern Agricultural Economics Association Annual Meetings held on January 31-February 03 in Atlanta Georgia, and International Food and Agribusiness Management Association 25th Annual Meetings held on June 14-15 in Saint Paul, Minnesota. They were also discussed at the departmental seminar series and college level as well as in my graduate class, Advanced Agribusiness Management, AEC 622 which is offered for our MS and PhD students. The research articles and PowerPoint presentations are accessible by food industry leaders and managers, and academicians (professors, students, and professional) nationally and internationally through Ag-Econ Search website. What do you plan to do during the next reporting period to accomplish the goals?We are working on "Risk Perception and Trust Interaction in Response to Food Safety Events across Products and Their Implications for Agribusiness Firms." The objective of this study is to determine how consumers respond to hypothetical food safety events across different products and regions. The data for this research was obtained from two surveys of fresh produce and meat products. The SPARTA model, based on the Theory of Planned Behavior, is used to determine the impact of factors influencing consumers' purchasing decisions. We are also still working on our research that explores the links between the gravity model and welfare frameworks and apply the quantitative model system to analyze how trade and welfare is affected by the Minimum Required Performance Limits in the shrimp importing market of European Union. We're hoping to complete the final report and submit it to the American Journal of Agricultural Economics for publication. We are also working on "Price Linkages in the Brazilian Sugarcane-Ethanol Industry in the Post 2008 Financial and Economic Crisis," and "Price Adjustment and Market Power in the Columbian Milds Coffee Market."

Impacts
What was accomplished under these goals? One of our research focuses on the EU shrimp market and measures the impact of a stricter standard to control the residues of chloramphenicol on the EU shrimp market. The EU has explicitly specified the level requirement of Minimum Required Performance Limit (MRPL) on chloramphenicol and products, with levels beyond the MRPL being rejected. This article quantifies how the MRPL level influences EU shrimp imports from developing and developed countries and the associated welfare changes of EU consumers, EU suppliers, and foreign suppliers. It is hypothesized that the lower MRPL has negative effects on EU imports and that the reduction is greater for developing countries. Welfare impacts by type of supplier are calculated based on heterogeneity among shrimp suppliers and provides a new way to quantify welfare changes among countries with differing abilities to adjust to standard changes. Finally, this paper estimates EU welfare changes caused by the lower MRPL for shrimp. The approach used differs from previous seafood studies that focus only on the ex-post evaluation of trade effects, or on the evaluation of welfare effects via econometric analysis. This research explores the links between a gravity model and a welfare framework to analyze how trade and welfare is affected by the Minimum Required Performance Limit regulation in the EU shrimp import market. The "phi-ness" gravity model is used to investigate the trade effects of MRPL on shrimp imports The Poisson Pseudo Maximum Likelihood (PPML) method is incorporated into the estimation to control for zero-valued observations. Based on the theoretical foundation of the gravity model, the nested Constant Elasticity of Substitution (CES) model of consumers' utility is set up to further explore the linkages between these two models. The nested CES model incorporates the effects of MRPL on consumers' confidence in the domestic shrimp market as well as foreign shrimp imported from developed and developing countries. The empirical results confirm stricter MRPL had significant negative effects on trade integration between the EU and trading partners. The welfare analysis shows the zero tolerance policy of MRPL standard dramatically enhanced consumers' demand for domestic shrimp and foreign shrimp imported from developed countries, but reduced the quantity of shrimp supplied by developing countries. The results also show the increased level of MRPL led to an increase in the welfare of domestic consumers, suppliers in developing countries, and in total international shrimp trade, but decreased welfare of domestic suppliers as well as foreign suppliers from developed countries. The intent of another article was to measure the economic impact of access to healthy food on obesity. This study used a linear regression econometrics model to achieve this purpose. Obesity is considered as the dependent variable and a number of other factors such as the number and availability of farmers markets and Community Supported Agriculture programs in the U.S., the number and accessibility of fast food restaurants, and the availability of recreation and fitness facilities are considered as independent variables. Using the USDA county level data, the results showed that beyond access to healthy food, many other factors explain the observed variations in obesity rates in the model. Moreover, the results indicated that the increase of household income and the increase of full service restaurants both have a negative impact on obesity rate. It was also observed that age plays a significant role in explaining obesity with people over 65 who likely eat healthier than people under the age of 18. This study also discusses the factors contributing to the change in obesity rates in order to promote a quality healthy life.

Publications

• Type: Journal Articles Status: Accepted Year Published: 2015 Citation: Li, X. and S. Saghaian (presenter). (2015). The Effects of Food Safety Standards on Trade and Welfare: The Case of EU Shrimp Imports. IFAMA 25th Annual World Forum and Symposium, June 14 - 15, Saint Paul, Minnesota. Ilunga, Y. (presenter) and S. Saghaian. (2015). Impact of Access to Healthy Food on Obesity: The Evidence from U.S. Counties SAEA Annual Meetings, January 31-February 03, Atlanta, Georgia. Chen, B. and S. Saghaian. (2015). Price Linkages in the Brazilian Sugarcane-Ethanol Industry in the Post 2008 Financial and Economic Crisis. Journal of Agribusiness, submitted. Sujarwo, J., M. Reed, and S. Saghaian. Changing Technical, Allocative, and Economic Production Efficiency of Small-Scale Farmers in Indonesia: The Case of Shallot Production. Journal of International Agricultural Trade & Development, forthcoming Li, XL, and S. Saghaian. (2015). Price Adjustment and Market Power in the Columbian Milds Coffee Market. Journal of Agribusiness, submitted. Shepherd, J. and S. Saghaian. (2015). Risk Perception and Trust Interaction in Response to Food Safety Events across Products and Their Implications for Agribusiness Firms. Journal of Food Distribution Research, will be submitted shortly. Ozertan, G., S. Saghaian, and H. Tekguc. (2015). Dynamics of Price Transmission and Market Power in the Turkish Beef Sector. Turkish Journal of Economics, Business & Finance, 30(349):53-76. Saghaian, S. and M. Reed. (2015). Spillover Effects of U.S. Federal Reserves Recent Quantitative Easing on Canadian Commodity Prices. International Journal of Food and Agricultural Economics, 3(1):33-43. Sujarwo, J., M. Reed and S. Saghaian. (2015). Production Efficiency of Small-Scale Shallot Producers in East Java, Indonesia. Journal of Global Economics, Management and Business Research, 2(2):59-71.
• Type: Journal Articles Status: Submitted Year Published: 2015 Citation: Li, XL, and S. Saghaian. (2015). Price Adjustment and Market Power in the Columbian Milds Coffee Market. Journal of Agribusiness.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Ozertan, G., S. Saghaian, and H. Tekguc. (2015). Dynamics of Price Transmission and Market Power in the Turkish Beef Sector. Turkish Journal of Economics, Business & Finance, 30(349):53-76.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Saghaian, S. and M. Reed. (2015). Spillover Effects of U.S. Federal Reserves Recent Quantitative Easing on Canadian Commodity Prices. International Journal of Food and Agricultural Economics, 3(1):33-43.
• Type: Journal Articles Status: Published Year Published: 2015 Citation: Sujarwo, J., M. Reed and S. Saghaian. (2015). Production Efficiency of Small-Scale Shallot Producers in East Java, Indonesia. Journal of Global Economics, Management and Business Research, 2(2):59-71.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: The research efforts were published in the Journal of International Agricultural Trade & Development, (9):1-20; Journal of Review of Social, Economics & Administrative Studies, 28 (2); International Journal of Food and Agricultural Economics, 2 (2): 1-16; and Journal of Agribusiness, 1, 31 (Fall):181-192. It was also discussed at the departmental and college level as well as in my graduate course, Advanced Agribusiness Management, AEC 622 for MS and PhD students. The journals are accessed by food industry leaders and managers, and acadeimcians (professors, students, and professional) nationally and internationally. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Foot-and-mouth disease (FMD) is a highly contagious viral-type disease which infects cloven-hoofed ruminant animals, such as cattle and pigs. The disease has had very destructive impacts on animal herds throughout the world. FMD symptoms include fever, erosions, and blister-like lesions on the hooves, lips, mouth, teats, and tongue (APHIS, 2007). FMD outbreaks can also affect consumption behavior because the disease can influence consumer perceptions about food health and safety. Food safety and animal life issues are increasingly impacting international agricultural trade. Member countries of the World Trade Organization (WTO) can apply measures of the Sanitary and Phytosanitary (SPS) Agreement to prevent the spread of pests or disease among animals and plants, and ensure safe food for consumers. Thus, it is common to have livestock and meat exports from a country banned because of FMD. Such a ban can have devastating impacts on a country’s livestock industry. Numerous studies have found that FMD outbreaks can dramatically influence consumption behavior, market prices, production in all stages, and meat product trade. Some of the studies focus on the effects on livestock supply contemporaneously and over time. Some studies have focused on the effects of FMD on meat demand. Previous studies that have estimated economic impacts of FMD have focused on specific domestic markets; the analysis of FMD outbreaks on global trade in pork products or the aggregate world trade is less discussed. In order to enhance the implication of global trade, this study attempted to investigate the effects of FMD on pork trade among numerous countries. Each country’s situation is different with regard to the structure of pork production, the importance of the pork processing sector in the economy, and the infrastructure that can be used to combat the disease. These issues are important in the decisions about combating the disease, but beyond the scope of this study. FMD-infected importers may not increase their pork imports, depending on which policy importers adopt. When time-related unobserved impacts were controlled, pork importers with a slaughter policy tend to increase pork imports. This relates to the shortage of domestic supply from controlling FMD outbreaks by destroying pigs. On the other hand, importing countries with a vaccination policy do significantly decrease pork imports when time-related unobserved impacts are controlled. In this case any shortage in domestic supply under a vaccination policy is more than offset by a reduction in domestic pork demand. How have the results been disseminated to communities of interest? The research effort was published in the Journal of International Agricultural Trade & Development, (9):1-20. It was also discussed at the departmental and college level as well as in my graduate course, Advanced Agribusiness Management, AEC 622 for MS and PhD students. The journals are accessed by food industry leaders and managers, and acadeimcians (professors, students, and professional) nationally and internationally. What do you plan to do during the next reporting period to accomplish the goals? Currently many countries apply Hazard Analysis Critical Control Point (HACCP) to control seafood safety. The diverse status of HACCP implementation by countries imposes import barriers and harms international trade in seafood. Many empirical studies concentrate on HACCP effects on seafood trade of developing countries. Only a few studies focus on U.S. seafood export markets. Our goal is to investigate and analyze the trade effects of different HACCP implementation systems by importing countries on U.S. seafood exports. We have investigated the status of HACCP implementation on a panel of the top 38 importing countries for U.S. seafood export market, and analyzed the trade effects based on their level of economic development and their extent of HACCP implementation. A gravity model with fixed-effects is adopted for the analysis. The findings suggest that the status of HACCP implementation in importing countries has differential impacts on seafood trade flows. U.S. HACCP has a positive impact on seafood exports to the majority of importing countries, except those where the status of HACCP implementation is unclear. The HACCP effects are more strong on groups of countries that directly adopted HACCP. The U.S.’s role in helping developing countries integrate HACCP into their existing food safety standards is also positive and significant. I will fully report on this effort during the next reporting period. We have also looked at the coffee as a differentiated product and major import and exporting markets. We investigate price transmission and market power in the Colombian Milds coffee beens. I will report on that as well. In another research, we explore the links between a gravity model and welfare frameworks and then apply the quantitative model system to analyze how trade and welfare is affected by the Minimum Required Performance Limits (MRPL) in the shrimp importing market of European Union. We're hoping to conduct and finish that research and report on that if time allows.

Impacts
What was accomplished under these goals? International pork trade has been affected by two conflicting effects in recent years: lower trade barriers because of free trade agreements and trade disruptions caused by disease outbreaks. This study investigated how global pork trade was affected by foot-and-mouth disease among major exporting/importing countries. The 41 countries included in this analysis account for 99% of world pork exports and 92% of world pork imports. A Pseudo Poisson Maximum Likelihood (PPML) estimator with a series of controlled fixed effects in the gravity equation was utilized. Results were statistically confirmed that pork exports fall when an exporting country reports foot-and-mouth disease. Exporters with a vaccination policy suffer larger negative impacts than those with a slaughter policy. Pork importers that report FMD and institute a slaughter policy will import more pork, but importers with a vaccination policy will import less pork.

Publications

• Type: Journal Articles Status: Published Year Published: 2013 Citation: Saghaian, S., G. Ozertan, and H. Tekguc. (2014). Market Power in the Poultry Sector in Turkey. Bogazici Journal of Review of Social, Economics & Administrative Studies, 28 (2). Yang, S-H., S. Saghaian, and M. Reed. (2014). International Pork Trade and Foot-and-Mouth Disease.Journal of International Agricultural Trade & Development, (9):1-20. Saghaian, S. and M. Reed. (2014). The Impact of the Recent Federal Reserve Large-Scale Asset Purchases on the Agricultural Commodity Prices: A Historical Decomposition. International Journal of Food and Agricultural Economics, 2 (2): 1-16. Li, X. (Vivian), S. Saghaian, and M. Reed. (2013). Differential Impacts of HACCP Systems on Trade Flows: The Case of U.S. Seafood Exports. Economics World, 1, 1, (December):14-28. Li, X. (Sheila) and S. Saghaian. (2013). The Dynamics of Price Transmission in the Presence of a Major Quality Differential: The Case of Colombian Milds and Vietnamese Robusta Coffee Beans. Journal of Agribusiness, 1, 31 (Fall):181-192. Saghaian, S., G. Ozertan, and H. Tekguc. (2013). Beef and Milk Price Links in Turkey, Economics Bulletin, 33(4):2607-2616.

Progress 01/01/13 to 09/30/13

Outputs
Target Audience: This research has been published in the Journal of International Agricultural Trade & Development in 2013. The audience for this journal is all the univerity faculties, and studenets as well as policy makers, stake holders, and agribusiness managers. Also, the content was discussed university-wide, in the department with graduate students, and in my class, AEC 622, Advanced Agricbusiness Management, In the spring 2013. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? There has been already a concerted movement, led by Codex Alimentarius Commission (Codex), encouraging countries to focus their food safety regulations on improving public health through the use of risk analysis principles (Caswell and Bach 2007). Codex recommends the Hazard Analysis Critical Control Point (HACCP) system as a preferred set of standards to control food safety hazards (Unnevehr and Jensen 1999). A HACCP system monitors and controls critical points in the production process to prevent food safety hazards. How have the results been disseminated to communities of interest? This research has been published in the Journal of International Agricultural Trade & Development in 2013. Also, the content wasdiscussed in the department with graduate students, and in my class, AEC 622, Advanced Agricbusiness Management, In spring 2013. What do you plan to do during the next reporting period to accomplish the goals? We are continuing with research in the area of product differentiation, looking into high quality Colombian Arabica, and Vietnamese Robusta coffee markets as well human health issues related to Foot and Mouth desease.

Impacts
What was accomplished under these goals? This research seeks to explore the effects of food safety standards, specifically U.S. HACCP regulations, on U.S. exports of some seafood products, namely fish, mollusks, and shellfish.The hazards of seafood lie in the different food borne diseases inherent in various categories of seafood products. High concentration of pathogens, biotoxins and chemicals, as well as disease agents, may be present in seafood and therefore constitute serious hazards. Mollusks are a special concern because they are traditionally eaten raw or very lightly cooked; this further increases the risk (Huss, Ababouch and Gram 2004; Rippey 1994). For shellfish, Norwalk and gastrointestinal viruses are the most common causes of shellfish-associated diseases (Huss, Ababouch and Gram 2004). Unlike mollusks, the levels of pathogenic bacteria and viruses presented in raw fish are quite low and it is very unlikely that this low level of pathogens could cause any disease as the product is cooked before consumption. Non-indigenous bacteria and bacterial contamination during processing are responsible for most disease incidents in fish consumption (Ferri 2005). Our research investigates the effects of HACCP implementation on U.S. exports offish, mollusks, and shellfish other than mollusks.The results indicate that food safety regulations have differential effects across seafood products. The HACCP effect on seafood exports of mollusks, which have higher inherent hazards, is positive and statistically significant. This coefficient infers that mandatory HACCP implementation has improved exports of mollusk products. The effects on the other two categories are positive,though not statistically significant.

Publications

• Type: Journal Articles Status: Awaiting Publication Year Published: 2013 Citation: Shahnoushi, N., S. Saghaian, and N. Ashktorab. (2013). An Analysis of Aflatoxin Food Safety Concerns and other Factors Affecting Irans Pistachio Exports to EU, Australia, and Japan, Asian Journal of Agriculture & Development, forthcoming
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Asgari, M. and S. Saghaian. (2013). Oligopolistic Market Structure in the Japanese Pistachio Import Market, Journal of Agricultural & Food Industrial Organization,11(1):1-13.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Li, X., S. Saghaian, and M. Reed. (2013). The Impact of HACCP on U.S. Seafood Exports: The Case of Fish, Mollusks and Shellfish other than Mollusks, Journal of International Agricultural Trade & Development, 8(2):111-123.
• Type: Journal Articles Status: Published Year Published: 2013 Citation: Tan, T., J. Shen, M. Reed, S. Saghaian, and C. Chen. (2013). The Impact of GMO Safety Regulations on Chinese Soybean Exports, Journal of Basic & Applied Scientific Research, 3(3):164-171.

Progress 04/01/12 to 12/31/12

Outputs
OUTPUTS: The Sanitary and Phytosanitary (SPS) Agreement concerning foot-and-mouth disease (FMD) continues to be a major barrier regarding trade among countries. International pork trade has been affected by FMD outbreaks which lead disease-free exporters to gain market share. Global production and consumption of pork during 1996 to 2007 rose substantially. The demand for pork clearly offers opportunities for disease-free pork producers to expand international sales. The ranking of the top 20 pork exporters and importers have shuffled noticeably because of import bans from FMD-free importers, so that FMD-affected exporters have lost their global markets as a direct cause of FMD. Hence, global pork export patterns have been influenced by FMD events.This study investigated foreign FMD impacts on four major pork exporters, Canada, Germany, Spain, and the U.S. The results confirm that foreign FMD have impacted pork exporters differently. Germany has gained the most exports during foreign FMD outbreaks in pork importing countries; the U.S. is second, Spain is third, and Canada is fourth. European pork exporters have locational and lower transportation cost advantages over North American pork exporters.This research was presented at the 2012 International Food and Agribusiness Management in June in Shanghai, China. This research is also under review by the Canadian Journal of Agricultural Economics. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Past research findings have shown: first, pork exports decline when an exporting country develops FMD, and exporters with a vaccination policy have larger negative impacts than those with a slaughter policy; second, overall pork imports increase when an importing country institutes a slaughter policy, but importers with a vaccination policy import the same level of pork. However, the competition among pork exporters is different for each exporting country. The FMD events during 1996 to 2007 greatly impacted global pork trade. Among the top 10 pork exporters, only Canada, U.S., Germany, and Spain showed strong growth in exports during that time. These four countries are FMD-free and have not had an outbreak, so they have not had bans imposed through the SPS agreements on FMD. Markets for FMD-affected pork imports have been captured by Germany no matter which policy is adopted by importing countries; the FTA that many countries have with Germany through the European Union is also helpful. The U.S. only seems able to capture increased exports when the importing country adopts a vaccination policy. FMD outbreaks don't seem to affect Spain pork exports, but they negatively impact Canadian pork exports when the importers adopt a slaughter policy. Hence, the empirical results reveal that Germany gains the most among these four countries when there is an FMD outbreak; the U.S. is next; followed by Spain and Canada. When the market competition between North American and European exporters is analyzed, importing countries with either slaughter or vaccination policies increase their pork imports from European countries when they have an FMD outbreak. However, North American pork exporters still hold markets where FMD-affected pork importers adopt a vaccination policy. Moreover, the pork import markets with a slaughter policy are primarily provided by European exporters rather than North American exporters. Hence, the analysis of pork exports between North America and European exporters shows that European countries have a better competition position than North American exporters when importing countries have FMD outbreaks. The different competitive environment between North American and European pork exporters during FMD events may link to several factors. First, vaccination policies were abandoned by the European Union after 1991 due to the successful eradication of FMD. Thus, most countries with a slaughter policy are European and other European pork exporting countries which are FMD-free are the largest beneficiaries. This situation benefits European pork exporters because they have locational advantages and lower transportation costs than North American exporters. Second, though North American and European exporters increase sales when importers adopt a vaccination policy, European exporters still receive larger positive impacts than North American exporters. Consequently, the analysis reveals that European exporters are relatively advantaged when there is an FMD outbreak.

Publications

• Yang, Shang Ho, M. Reed, and S. Saghaian. (2012). Foot and Mouth Disease Alters Pork Markets in Export Competition, in The Road to 2050: The China Factor. Proceedings of the International Food and Agribusiness Management Association (IFAMA) 22nd World Food and Agribusiness Congress, June 9-14, Shanghai, China. (Refereed conference proceedings) [Available on IFAMA website]
• Yang, S.H., M. Reed, and S. Saghaian. (2012). Foot-and-Mouth Disease Alters Pork Export Markets, A Case Study of Canada, Germany, Spain, and the U.S., under Review by the Canadian Journal of Agricultural Economics.
• Yang, S.H., M. Reed, and S. Saghaian. (2012). International Pork Trade and Foot and Mouth Disease, under review by the Journal of Agricultural and Applied Economics.