Abstract/Summary

Governments have intervened in food, agricultural and fisheries markets through various support programs to promote adoption of traceability practices and systems in order to raise food safety levels and increase industry competitiveness. The aim of this paper is to investigate intended and unintended effects of participation in such supporting programs. Intended effects comprise of the impacts on traceability capacity levels, costs and benefits of program participants vs. comparable non-participants. Unintended effects concern the firms’ planning accuracy which we propose to measure through deviations of actual from expected outcomes. We conduct our empirical analysis based on a sample of 55 Italian fishery businesses which we divide in firms who received support, a comparable control group and the remaining sample. Although we find that recipients of government support have higher average levels of traceability capacity and overall benefits than the control group, differences are not statistically significant. In regards to the unintended effects of government support, we find that recipients of government support reported larger deviations of actual from expected benefits than the control group did. While these differences were not significant at the aggregate level, significant differences are found at the level of specific benefit categories. For example, support recipients had overestimated sales and price related benefits but severely underestimated efficiency gains in operations. The results suggest that the motivation for participating in a government support program may not align with the firm’s strategic goals. This misalignment may reduce planning accuracy.