An economic assessment of effects of the Finnish salmonella control program on trade

Abstract

In this paper, indirect costs of the Finnish Salmonella Control Program (FSCP) are evaluated. Traditional welfare analysis is used for analyzing the changes in consumers and producers welfare due to the program. FSCP could, by its very structure, act as a technical trade barrier and thus hinder international trade (food imports to Finland). According to a theoretical analysis, potential welfare losses due to decreased trade flows are possible. However, empirical calculations do not lend support to significant trade losses as nearby countries, practicing large scale food exporting, have prices of food stuffs approximately on the same level as Finnish prices. That suggests, that the program does not greatly affect the trade. In case of pork, some potential effects can be found, however, their real significance is questionable, and direct reasons behind cost dissimilarities cannot be exactly determined.