Assessing the Prevalence of Food Safety Concerns in Informal Markets – Case of the Senegal Dairy Market

Most consumers in the developing world purchase food in informal markets, where very little enforcement of quality grades and standards exists. These informal markets are characterized by numerous small-scale traders and processors who typically operate without formal business registration, making enforcing and monitoring food safety standards difficult and expensive. Given the unobservability of many food safety attributes, actors in such informal markets have little to no incentive to invest in food safety. This gives rise to a “lemons market” in which questionable quality and safety products dominate the food system. The milk food chain in Senegal is a quintessential example of an informal market characterized by food safety concerns. The vast majority of urban and peri-urban consumers purchase sour milk from small-scale informal processors which are small, unregistered businesses that operate without a license or any food safety practices. This aspect has major food safety and health implications for the millions of consumers who purchase sour milk from these vendors. To this end, we will conduct a randomized controlled trial to evaluate the impacts of safety training on the adoption of safe handling practices and the safety level of Neex Soow producers’ sour milk. Using 360 participants, we will conduct surveys to understand Neex Soow production, business, and safety practices. We will further assess participants’ demand for safer inputs by evaluating their willingness to pay for each item using the Becker-DeGroot-Marschack auction mechanism. By offering safety training and a recognized training certification, our study introduces a mechanism for product differentiation. Neex Soow vendors who complete the training and display the certification in their shops can signal higher product quality to consumers, potentially creating a premium for safer, more hygienically prepared sour milk. We want to test if this process of quality upgrading addresses the lemons market problem by allowing informed consumers to distinguish between different products’ quality and safety. As more vendors improve their safety practices and gain certification, others in the market could be encouraged to follow to remain competitive, which could raise the average quality of the market over time, thereby reducing the prevalence of “lemons” and promoting overall market efficiency.