The role of collective action in overcoming the challenges of European Food Safety Standards: The Case of Kenya’s French Bean and Nile Perch Industries

Abstract

The European Union (EU) is the leading importer of developing-country high value exports. EU countries have in the last two decades developed stringent food safety standards and imposed them on developing-country fresh vegetable and fish suppliers. These standards require investment in costly physical facilities and human skills. Developing-country suppliers often lack human and financial capital needed to invest in such facilities. Consequently, there have been concerns that these standards will exclude poor developing country exporters. This paper examines the role collective action has played in facilitating compliance with International Food Safety Standards (IFSS) by Kenyan suppliers of French beans and Nile perch to Europe. It finds that IFSS caused a drop in exports French beans and Nile perch. However, suppliers of both commodities used collective action to resolve idiosyncratic market failure, exploit economies of scale, and reduce buyers’ transaction costs hence increase exports. The findings imply that developing countries can overcome the challenges of IFSS by mobilizing small suppliers into groups that then help small suppliers to meet the standards through joint investments in costly assets.