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CES-WP-08-31

The Direct and Indirect Costs of Food Safety Regulation

Michael Ollinger

September 01, 2008

The cost of compliance with the Pathogen Reduction Hazard Analysis Critical Control Program (PR/HACCP) rule of 1996 has been controversial since it was first proposed. Surveys have provided some cost information but examined plant size and other indirect effects with limited data and did not make cost estimates of direct cost components, such as mandated tasks. This paper addresses those deficiencies with data from a national survey of meat and poultry plants on PR/HACCP costs. Results indicate that (1) mandated tasks are the most costly component of the PR/HACCP rule, (2) regulation favors large plants over small ones, and (3) private actions are nearly as costly as direct regulation.

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