Abstract:
The impact of individual market-based, regulatory and liability incentives on food safety responsive
behaviour of firms is assessed using the Sri Lankan tea and dairy processing firms’ motivation to
adopt Hazard Analysis & Critical Control Points (HACCP) food safety metasystem as the case.
A series of face-to-face interviews were conducted with the manager responsible for food quality
assurance in the firm, supported by a validated structured questionnaire and a site inspection,
between April and September 2010 to collect data from tea (n=32) and dairy (n=34) processing
firms operate in six provinces. A comprehensive Structural Equation Model was developed using
the “Analysis of Moment Structures” statistical package to elicit the effect of nine individual
incentives on firms‟ decision to adopt HACCP. Further an Incentive-Related Index reflecting the
strength of each incentive was derived. The outcome of analysis suggests that “Reputation” and
“Anticipate government regulation” possess the greatest impact on a firm’s food safety behaviour
along with “Sales and Revenue” for tea and “Liability Laws” for the dairy processing sectors. It
also implies that larger firms have a greater tenacity to adopt HACCP than smaller firms and tea
sector is more likely to adopt this metasystem voluntarily than the dairy sector. This creates the need
for policy makers to recognize the importance of market-based incentives and the close interplay
and interactions of which with regulatory incentives, and in turn, importance of development of a
properly functioning regulatory and liability system and a steadfast system to inject market-based
motivators such as brand equity to promote adoption of HACCP among firms.
