A model of producer incentives for livestock disease management

Abstract

We examine the management of livestock diseases from the producers' perspective, incorporating information and incentive asymmetries between producers and regulators.Using a dynamic model, we examine responses to different policy options including indemnity payments, subsidies to report at-risk animals, monitoring, and regulatory approaches to decreasing infection risks when perverse incentives and multiple policies interact. This conceptual analysis illustrates the importance of designing efficient combinations of regulatory and incentive-based policies.

Impact Assessment of an Independent Agency for Animal Health in England

“…A stochastic model was developed to estimate the number of animal disease outbreaks that may occur within the 30-year lifespan of the new agency. Adopting a stochastic approach allowed the incorporation of variability (Ranjan and Lubowski 2005), and provided additional information to the expected number of outbreaks, e.g., 5 th and 95 th percentiles.…”

Controlling diseases and nuisances: Time-based rights and agricultural production

“…The general objective of compensating producers is to encourage them to take appropriate actions to prevent disease losses. Yet, it has been recognized that payments intended to foster actions to eradicate the disease may lead to an increase of inocula (Ranjan and Lubowski, 2005). Governmental intervention needs to be based on well-designed policies that induce socially optimal ex ante private investment while providing incentives for truthful reporting of the disease.…”

“…model risks for devising indemnity payments for infected citrus groves, whileRanjan and Lubowski (2005) model producer incentives for livestock disease management.…”

Private and Public Economic Incentives for the Control of Animal Diseases: The Case of Anthrax in Livestock

“…There is a strong economic incentive for private management of animal diseases with obvious symptoms, high mortality and morbidity, and apparent costs outside management costs (Roberts, 2006); while animal diseases with no obvious symptoms and no major impact on private production decisions have weak incentives for private management. Private management of diseases with no obvious symptoms can be accomplished if contracts, regulation and laws mandate their control (Ranjan and Lubowski, 2005; Roberts, 2006). Other incentives for private control include: animal death and productivity losses, indemnity payments, payments for reporting sick animals, private insurance requirements, mandatory testing on farms before slaughter, possible destruction of positive or diseased animals if found after testing, business interruption and loss of opportunity, and quarantine of farms having the disease of concern.…”