Pesticide residues and vertical integration in Florida strawberries and tomatoes

Government regulations and consumer concern about pesticide residues in food may increase the costs of production and marketing for producers and processors associated with food safety risks. Vertical coordination is an economic response for mitigating the costs associated with uncertain pesticide residue levels. Data from a survey of Florida strawberry and tomato growers were used to test the hypothesis that vertical integration is associated with a lower mean and variance of pesticide residues. The results confirm a significant negative relationship between vertical integration and fungicide and insecticide residues in Florida strawberries and insecticides in Florida tomatoes. However, fungicides in tomatoes had the opposite effect. [Econ-Lit citations: L220, L660] © 2001 John Wiley & Sons, Inc.