Farm-audit-versus farm-advisory-system - The economics of quality assurance systems

Abstract

This paper focuses on the problem of quality assurance in agricultural production within the special context of a compulsory farm-audit-system recently brought forward by the EU. In Germany there is a far reaching (quality) control gap that-in view of the difficult national financial situation-cannot be filled by traditional means of mandatory regulations and monitoring. It could possibly be bridged by further privatization of former state-run controlling and monitoring tasks. Against this background, the newly suggested Farm-Audit-System is to be assessed. An in depth analysis of already existing quality-management-approaches shows, however, that within the agricultural sector there are fundamental (economic) barriers which inhibit a purely private initiative to install quality-auditing-schemes. Thus, an (in the beginning) state-run compulsory farm-audit-program to launch a broad quality initiative seems to be justifiable.