A public economy perspective on private food certification and the role of the state

The paper addresses questions raised in Learning Field 6 of the project. The authors Stefan Mann and Maria Haller adopt a welfare-economic lens and explore the need to internalize diverse externalities, as well as the relevance of simplification from a transaction-cost perspective and a variety of other ecology and social issues. While acknowledging the need for future policy frameworks to provide sustainability-oriented market incentives, the authors present a threefold incentive structure to inform the synthesis process of the project: (1) If crop producers produce their crops under the social certification required, they should be subject to lower tariffs than today’s status quo. The same should apply to importers of processed goods provided the agri-businesses in the chain are properly certified. Tariff reductions should occur in such a way so as to enable most of Switzerland’s current agricultural area to remain cultivated, but in a sustainable manner. (2) For crop-based products without social certification and animal products with social certification, status quo tariffs could be maintained. (3) The trade options of importers of animal-based products without social certification should be tightened up, given the many negative externalities linked to such production.