needed investments may require labor, especially skilled and supervisory workers, creating additional job opportunities. Other expenditures may go towards building materials, contractors and various technical services, much of which could be sourced locally. Only in circumstances where up-grading relies primarily upon imported equipment and/or expertise, for example that might apply to certain projects funded by bilateral donors, would there be few multiplier effects from expenditures related to standards compliance.

Even where the administrative, technical and financial burden of compliance is achievable at a country or industry level, this burden may be too great a burden at the level of individual firms or producers. There is a general concern that the challenge of rising standards is marginalizing the position of smaller players, especially producers, traders and processors, as well as smaller industries as a whole, in international agro-food trade. However there is presently little empirical evidence to support this argument. In part, this is because of the difficulties in disentangling the specific and distinctive role of standards compliance in the processes of consolidation of agrofood systems.

In many cases, it is evident that compliance with food safety and agricultural health standards largely acts to exacerbate other factors that threaten the status quo in established supply chains. For example, both the Indian and Kenyan fish processing sectors were facing longer-term challenges when forced to comply with enhanced hygiene standards for exports. In the case of India, exporters were facing intense price competition from other suppliers such as Vietnam and Thailand. The Kenyan fish processing sector was characterized by chronic excess capacity because of raw material shortages. In both cases the costs of compliance with stricter food hygiene standards has induced consolidation that, most probably, would have occurred anyway, albeit over a more protracted period of time. In Nicaragua, the decline in the production share of small-scale shrimp producers had more to do with Hurricane Mitch and its aftermath than to the tightening of standards (Cato _et al_ . 2003).

A particular concern is that smaller players can be disadvantaged where there are economies of scale or scope in the implementation of particular technologies or administrative systems. Indeed, evidence from studies of compliance with labor and environmental standards in the United States suggests that costs are proportionately higher for smaller firms. (Crain and Johnson 2001) In some cases the necessary investments have elements of lumpiness, for example laboratory equipment and cold storage facilities, which are only economically viable for largescale operations or require collective action. Likewise, hiring of certain skilled personnel is typically less problematic for medium or large firms than smaller ones. More generally, smaller firms can be ‘overwhelmed’ by the many changes needed to comply with new food safety requirements, for example, even though the actual cash investments that are required may not be substantial.

Producers can also be adversely affected where the transaction costs incurred by buyers when dealing with a fragmented supply base are greatly magnified by food safety requirements. Indeed, compliance with these requirements may actually be less problematic to small producers than the costs associated with the system required to record and certify that those standards have been met. For example, Kenyan vegetable exporters face considerable oversight costs in order to 15