Adoption of HACCP Food Safety Metasystem by Tea and Dairy Processing Firms in Sri Lanka: An Empirical Assessment on Incentives for Firms to Act

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.