FOOD LABELLING AND AGRI-FOOD POLICY IN CANADA

Presented by Monica Lipai

AGEC630 Term Paper, Winter 2006.

WHY FOOD LABELLING?

• Healthy and informed consumer choices.

• Increasing demand for quality foodstuffs at the

international level.

• The Agri-Food Policy Framework 2002-2007.

• Labeling regulation is a complex and challenging issue

Canadian Federal Food Labelling Legislation

• The Food and Drugs Act – FDA

• The Food and Drug Regulations- FDR

• The Consumer Packaging and Labelling Act- CPLA

• The Consumer Packaging and Labelling Regulations- CPLR

Additional information :

- the Canada Agricultural Products Act – CAPA, CAPR- the Meat Inspection Act – MIA, MIR- the Fish Inspection Act- FIA, FIR- the Competition Act- the Trade-marks Act

Administration and Enforcement of the Canadian Federal Food

Labelling Regulations

• Health Canada

• Canadian Food Inspection Agency-CFIA

- CFIA’s Food Labelling Information Service

- CFIA’s Label Registration Unit

• Guide to Food Labelling and Advertising http://www.inspection.gc.ca/english/fssa/labeti/guide/tab2e.shtml

Why do we need Government intervention in the regulation of food labelling?

• Food safety• Quality Characteristics of foods• Protection from fraud• Trade barriers- rent seeking behavior • International Standards- transaction cost.

- CODEX- FAO/WHO

- IPPC

- OIE

- the SPS agreement- GATT- Uruguay Round

- the TBT agreement-GATT- Uruguay Round

The Economic theory behind the market failure of food quality as a public good

• “Market of lemons” –Akerlof 1970- asymmetric information• High quality “Reputation effect” theory- Klein and Leffler

1981- no market failure?• Supply chain by vertical coordination • Information attributes problems - Tirole 1988

-transformation of credence in search attributes by:

- Labelling regulations-Organic, Eco labelling

- Segregation Regulations- GM

• Government tries to solve the market failure by supplying information trough regulations

CONCLUSION

• Food labeling regulations are a result of the market failure of the quality food public good created because of under information.

• Domestic and international food quality standards have the characteristics of a public good so there is a reason for Government and International Organization to intervene.

• Food quality standards can be lower transaction cost but can be used as non-tariff trade barriers.

• FOOD LABELLING IS A COMPLEX AND CHALLENGING ISSUE

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