1. FOOD LABELLING AND AGRI- FOOD POLICY IN CANADA Presented by Monica Lipai AGEC630 Term Paper, Winter 2006.

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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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