ESTIMATING THE COST OF FOOD SAFETY REGULATION TO THE NEW ZEALAND SEAFOOD INDUSTRY
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In New Zealand, the Animal Products Act 1999 requires all animal product processing
businesses to have a HACCP-based risk management program by the end of 2002.
This paper attempts to measure the effects of such regulation on the variable cost of
production of the New Zealand seafood industry. Using the framework developed by
Antle (2000), a model of quality-adjusted translog cost function is estimated using
census of production data from 1929 to 1998. Our results show that variable costs
could increase from 2% to 22% or from 2 cents to 19 cents per kilogram.