Natural Resources Research Articles

Quality assurance certification and implementation: growers' costs and perceived benefits

Document Type

Article

Publication Date

1-9-2003

Journal Title

Australasian Agribusiness Review

ISSN

1442-6951

Keywords

Quality assurance certification, Western Australia, Broadacre farming, Farm management, Farm economics

Disciplines

Agribusiness | Agricultural Economics | Agricultural Science | Agronomy and Crop Sciences | Animal Sciences | Management Sciences and Quantitative Methods | Natural Resources Management and Policy | Operations and Supply Chain Management | Plant Breeding and Genetics

Abstract

This study reports findings from a mail survey of Western Australian broadacre farmers participating in quality assurance (QA) accreditation. A 50 percent response rate generated a sample size of 78 usable replies. The average farm in the survey spent $13,470 gaining QA accreditation, upgrading facilities and implementing the QA system. Most of these costs were set-up costs incurred in the first year of QA training. Almost half of all farmers in the survey considered QA accreditation and implementation to be value for money. A further 39 per cent were unsure of its value. Only 13 per cent of respondents felt it was not a worthwhile investment. Most respondents agreed that there were benefits, apart from price premia, in applying a QA system and 84 per cent of growers viewed QA accreditation as the start of greater regulation of grain production.

Even if no price premium was available for QA grain, 39% of respondents indicated they still believed QA to be worthwhile. However, this same group of farmers also indicated that if the premium for QA grain was less than $8.90 per tonne they would begin to question the value of implementing the QA system on their farm. Overall, farmers in the survey suggested an average premium of $12.30 per tonne was required to prevent them questioning the merits of QA.

A simple investment model suggested that to exactly offset the cost of QA accreditation and implementation a price premium of $11.70 per tonne was required. This premium was very close the price premium of $12.30 per tonne identified by growers as being required before they would doubt the worth of adopting a QA system.

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