Towards Sustainable Food Governance in Informal Dairy Markets: Evidence from Regulatory Surveillance and Digital Traceability in Pakistan

<title>Abstract</title> <p>Food safety in informal dairy markets remains a critical governance challenge in developing countries due to fragmented supply chains, weak traceability, information asymmetries, and limited institutional coordination. While previous studies on milk adulteration have primarily emphasize on laboratory detection of contaminants, relatively little consideration has been given to the governance mechanisms that shape regulatory compliance. This study draws on Principal–Agent Theory to examine how information asymmetry, and weak traceability, contribute to food safety failures in Pakistan's informal dairy sector. The results of this study show that digital traceability, supported by stronger coordination among supply chain actors, and reduced information asymmetry are associated with a substantial decline in milk adulteration. The study argues that achieving sustainable food governance requires a shift from reactive enforcement to evidence-based regulatory governance that integrates digital traceability, risk-based surveillance, and collaborative governance across the dairy value chain. Through Principal–Agent Theory, this research advances the literature on food safety governance while offering practical policy recommendations for advancing sustainable food governance in developing countries.</p>