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Abstract

Limited empirical evidence exists either to confirm or refute the hypotheses that food-safety standards confer a positive external effect on farmers adopting it. This article makes use of health indicators obtained from a random cross-section sample of 439 small-scale export farmers in Kenya to evaluate the impact of EU retailer food-safety standards on producers’ health. Results show average cost of pesticide-related health risks at about 165 KSh and 324 KSh per cropping season for GlobalGAP adopters and non-adopters export producers, respectively. These costs equal 86.4% of the mean household chemical expenditure per cropping season for non-adopters and 39.6% of those adopters. Using instrumental variable econometric techniques we demonstrate that pesticide ascribed incidence of acute illness symptoms and its associated cost of illness significantly decrease with adoption of standards. Ceteris paribus, farmer’s who adopt standards experience 70% lesser incidence of acute illness and spent about 50% less on restoring their health compared to non-adopters. Although standards can potentially prevent resource-poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the health of those small-scale farmers who adopt it, as shown by these results. The implication is that if adopted at large-scale standards may reduce production externalities corroborating the view that it may serve as a catalyst to transform the farm production systems in developing countries.

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