Analyzing organic tea certification and traceability system within the Taiwanese tea industry

BACKGROUND We applied game theory to the organic tea certification process and traceability system used by the Taiwanese tea industry to elucidate the strategic choices made by tea farmers and organic tea certification agencies. Thus, this paper clarifies how relevant variables affect the organic ce...

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Bibliographic Details
Published in:Journal of the science of food and agriculture 2015-04, Vol.95 (6), p.1252-1259
Main Authors: Wang, Mao-Chang, Yang, Chin-Ying
Format: Article
Language:English
Subjects:
Camellia sinensis
Certification
Chemical industries
Compensation
Cost analysis
Costs
Decision analysis
Failure
Farming
Food Industry
Game Theory
Humans
managerial accounting
Organic Agriculture
Organic farming
organic tea certification
Planting
Revenue
Taiwan
Tea
tea industry
traceability system
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Summary:BACKGROUND We applied game theory to the organic tea certification process and traceability system used by the Taiwanese tea industry to elucidate the strategic choices made by tea farmers and organic tea certification agencies. Thus, this paper clarifies how relevant variables affect the organic certification process and traceability system used within the tea industry. RESULTS The findings indicate that farmers who generate high revenues experience failures regarding tea deliveries, cash outflow, damage compensation, and quasi‐rent. An additional problem included the high costs yielded when tea farmers colluded with or switched organic tea certification agencies. Furthermore, there could be decreasing levels of personal interest in planting non‐organic tea and lowering the costs of planting organic tea and the managerial accounting costs of building comprehensive traceability systems; thus, the analysis yielded strong results and a superior equilibrium. CONCLUSION This research is unprecedented, using an innovative model and providing a novel analysis structure for use in the tea industry. These results contribute to the field of literature and should serve as a valuable reference for members of the tea industry, government, and academia. © 2014 Society of Chemical Industry
ISSN:0022-5142
1097-0010
DOI:10.1002/jsfa.6814