Construction of Quality Security and Credibility M echanism for Chinese Food Enterprises

Hong LI

College of Economics，Yangtze University，Jingzhou 434023，China

In the past10 years，food enterprises in China have increased by 15%yearly，but food security incidents have occurred frequently because of not only technical problems，but also credibility deficiency andmoral failure of the enterprises.Major safety accidents have serious impact on physical health of consumers，and also their food consumption psychology.According to a food security survey of China Youth Daily in 2004，Chinese consumer's credibility on any food type is lower than 50%，87%of the consumers think that＂illegal food enterprises and individuals'pursuit for benefits＂is a primary reason for the frequentoccurrence of current food security problems.Analysis of causes for the credibility deficiency of Chinese food enterprises，and construction of effective quality security and credibility mechanism are not only the key to construct a long-term food security supervision mechanism，butalso an important guarantee for coordinating social and economic development.

1 Econom ic significance of enterprise credibility

1.1 Credibility is a kind of economic lawKarl Marx regarded credibility as＂a kind ofessential and advanced production relation＂，because credibility was not originated from themoral integrity，but emerged from the exchange and circulation of commodities，itw as the essential feature of developed economic relation.Credibility system in commodity market is a special motion type of value，and also a necessary requirement for commodities realizing their value.Therefore，in market economy conditions，credibility is the reflection of the whole social credibility system's compulsive legal restrictions and moral requirements on individuals，and also themanifestation of social credibility system on individuals.Individuals'offense to credibility regulations is invading the credibility system of the society，and also the economic system on which the society depends.For this reason，in countrieswith a sound credibility base，any individualor enterprise violating credibility and ethics will be revenged by the society，and they will have to pay for their activities.

1.2 Credibility saves transaction cost and improveseconomic efficiencyTransaction is themost important activity in market economy.Ronald H.Coase in The Nature of the Firm，proposed the conceptof transaction cost.According to transaction cost theory，operation of market mechanism needs cost，and all transactions among people need cost，including the cost of seeking for partners，collecting information，negotiating，signing and fulfilling contracts，so the higher the supervision cost is，the higher the transaction cost is.Credibility of transaction parties is the most important factor influencing the supervision cost.

Credibility can be comprehended as one party's confidence on the other party's fulfilling the obligations of contract，or one party's credibility in the eyes of the other party.If both parties have low credibility，they have to pay more for the supervision.On the contrary，if both of them have high credibility，they will not pay too much for supervising the other party.Therefore，credibility is inversely proportional to transaction cost，while transaction post is inversely proportional to transaction efficiency，so credibility is directly proportional to transaction efficiency.Lower credibility accelerates the decline of transaction efficiency because of higher supervision cost and sanction cost for breach of contract.Therefore，if both parties have higher credibility，supervision cost and sanction cost for breach of contract will be saved，and economic efficiency improved［1］.

1.3 Credibility is the guarantee for long-term benefits

Kreps and Wilson，Milgrom and Roberts proposed the reputation model in 1982.Holmstrom established the agent market-credibility model.According to the researches of Kreps et al.，only if consumers purchase commodities or services repeatedly，manufacturers will establish high reputation.Good reputation will bring people long-term benefits（not excluding moral or psychological satisfaction），so all transaction parties will have to establish good reputation for the long-term benefits even they have to bear the losses.

1.4 Credibility is a value resourceMao Yushi thinks that en-terprise credibility has been formed gradually in market development，it is a kind of value resource.＂Especially when a society is transiting from natural economy to commodity economy，fraudulent conducts appear in the market，such as counterfeit trademark，selling second sat best quality prices，short weight，breach of contract，then credibility becomes a rare thing.According to the economic laws，rare products are more valuable，so enterprises particular about business reputation will earn more，consumers will deal with reliable businesses for not being cheated＂.

2 Causes for credibility deficiency of Chinese food enterprises

2.1 Experience food and credence food result in the poor responsibility consciousness of food producersAccording to the approaches of obtaining commodity information，Nelson et al.classified commodities into search product，experience product and credence product.From this perspective，food security is not only an experience product，but also a credence product［2］.For experience product，consumers have no complete information about the product quality before purchasing，but will know it after purchasing the products，or judge the quality and security of products according to the long-term purchase experience.For credence product，food security is not easily identified or judged，consumers will not be able to identify their influence on food before purchasing or after consuming food［3］.For the extension of food supply chain，diverse sources of modern food hazards，complexity of action mechanism，poor display of security information，consumers cannot judge food quality according to consciousness or experience reasonably.In this condition，some food manufacturers pursue benefits by hiding product information，making false information，and using opportunism，which results in serious moral risk［4］.

2.2 China has poor key food test techniques and equipment，limited test capability and scale，providing soil for credibility deficiency of food enterprisesChina has made great progress in developing food security test techniques and relevant equipments，the inspection of chemical pollutants has developed from common qualitative analysis to qualitative and quantitative analysis of more than 100 substances；China has had the capacity of detecting more than 100 pesticides in rice，tea，and juice，testing the residue of more than 50 veterinary drugs in forage and animal-derived foods；the internationally-recognized Dioxin test method was established；analytical quality guarantee examination was passed［5］.

But key detection techniques and equipments are poor，detection capability and scale are limited，so the level of food quality security cannot be reflected.For example，in terms of pesticide detection，F(xiàn)DAmulti-residuemethod can be used to detect360 pesticides，Germany multi-residue method to detect 325 pesticides，Canadian multi-residue method to detect 251 pesticides，but China multi-residue method to detect more than 100 pesticides［6］.In terms of environment pollutant detection，developed countries have trace detection techniques and large-sized precise equipments for testing Dioxin and analogs，and trace of clenbuterol，hormone and chloropropanol.China has no quick or effective test methods，techniques and equipments for these pollutants［7］.Without advanced detection equipments or techniques，many enterprises try to haggle over quality supervision departments，providing soil for credibility deficiency of food enterprises.

2.3 Many food enterprises are lacking in basic social responsibilitiesSocial responsibility refers to an organization's obligations to the society which are always higher than their own objectives.An organization should be operated and managed in a way favorable for the society，if an enterprise should bear not only legal and economic obligations，but also the obligation of＂pursuing long-term objectives beneficial to the society＂，so the enterprise should have social responsibility.Food industry is a conscientious industry，food enterprisemanagers should put consumers'needs on the top priority，take＂providing healthy and qualified foods for consumers＂as their social responsibility.However，many food enter prise shave poor responsibility consciousness，and lack in primary responsibilities.According to food security survey of the State Council，quality inspection departments find more than 9 000 food security hazards every month，involving more than 120 000 enterprises，170 000 workshops［8］.For example，dairy industry tycoons in China have devoted a lot to social welfare and charity，but neglected the food quality，as a result，thewhole industry collapsed and the industrial chain was also broken，consumers，clients and employees experienced great losses，and the enterprise image which has been established in the past decades crashed suddenly.

3 Countermeasures for building quality security and credibility mechanism of Chinese food enterprises

3.1 Enhancing information disclosure and reducing information asymmetryFor credence food，quality signal model can be used for information disclosure，but the third party that consumers are confident in should be introduced into the market.The third party can be quality certification agency，or government department.Independent authentication of qualification associations and regulatory interferences of government，such asmaking label policies，laws and regulations，various standard strategies and consumers'education，can be used to guarantee genuineness and precision of information.Disclosure of food security information contributes to solving fairness and efficiency problems in food security protection.On the one hand，obligations of different groups are defined via the information disclosure，reflection and realization of various obligations are encouraged，social justice mechanism advocated.On the other hand，information disclosure enriches food security information grasped by various groups，which is favorable formaking scientific and reasonable decisions，and improving food security supervision.

3.2 Increasing input of fund，integrating current monitoring and detection resources，improving food detection systemFirst，more funds should be invested for installing new food securi-ty detection equipment，and updating backward equipment.Second，more funds should be invested for training of technicians，such as device analysis，analysis and examination.In addition，training for business，regulation，standard andmetering should be enhanced，and also more funds should be invested in food security researches，and the future researches focus on the following aspects：regulating management and test process of laboratories，establishing quality control regulations of food security detection laboratories，improving management level and technical capacity of laboratories；one-time test techniques，quick test techniques and specialized test techniques of many pesticides and veterinary drugs；improving techniques for detecting food additives，forage additives and illicit chemicals.

Second，according to the principles of distributing reasonably，investing in key sections，meeting needs of work，current monitoring and detection resources should be integrated，qualification of food inspection and monitoring agencies should be attested，an authorized food security monitoring and inspection evaluation system established，food security evaluation carried out comprehensively，problems caused by repeated detection，such as high cost，dead zone for monitoring，should be settled effectively，an intelligent and quick food security detection and monitoring service system with clear hierarchies and reasonable layouts should be established，technical support provided for quality security management of agricultural products and agricultural trade activities，so as to establish the food security early-warning mechanism of China，and prevent food security risks.

3.3 Enhancing self-discipline of the industry，guiding food enterprises to take social responsibilitiesEnhancing self-discipline of the industry，guiding food enterprises to obey rules of market economy and regulations of the industry is an important content of guaranteeing food security.According to the 32nd clause of Food Security Law，food enterprises should establish and complete their food security management mechanism，enhance the staff training about food security knowledge，specialized or part time food security management staff should be assigned to improve the food inspection.This clause is mainly used to enhance self discipline，self-improvement of food enterprises.Food producing enterprises have to further improve food security management system，comprehensive quality of staff，in addition to moral constraints，good food security consciousness.According to features of food production techniques，key control points and control elements should be defined from incoming inspection to production and to the final product inspection，monitoring and inspection staff should be assigned，internal quality control，monitoring system and quality traceability system of enterprises should be improved，food production monitored and controlled.Food enterprises should reduce or avoid food security problems，and take the social responsibility of guaranteeing food security actively.

3.4 Establishing enterprise credibility file and release systemSupervision departments should collect relevant information about enterprises'credibility，establish credibility file，and classify their credibility into different levels，but the classification is not a lifelong tenure，supervision departments evaluate the credibility of food enterprises regularly.In addition，media monitoring should be enhanced，internet，TV and newspaper used fully to release the information about enterprise credibility.

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