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Incentive systems for food quality control with repeated deliveries: Salmonella control in pork production

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  • Robert P. King
  • Gé B. C. Backus
  • Monique A. van der Gaag

Abstract

This paper presents a dynamic principal-agent analysis of incentive systems for Salmonella control. The European Union will require Salmonella testing from 2008. On the basis of the producer's performance history in controlling Salmonella, the incentive systems analysed determine quality premiums to the producer, testing frequencies for hogs delivered, as well as charges to the producer for testing and penalties. Using cost estimates and technical parameters, we evaluate two dynamic incentive systems. We also assess the impact of ownership structure on performance. The more efficient incentive system economises on testing costs by reducing the probability of testing in response to a favourable production history and is preferred under all ownership structures. Copyright 2007, Oxford University Press.

Suggested Citation

  • Robert P. King & Gé B. C. Backus & Monique A. van der Gaag, 2007. "Incentive systems for food quality control with repeated deliveries: Salmonella control in pork production," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(1), pages 81-104, March.
    • Handle: RePEc:oup:erevae:v:34:y:2007:i:1:p:81-104
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    Cited by:

    1. Ng, Desmond W. & Salin, Victoria, 2012. "An Institutional Approach to the Examination of Food Safety," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-26, May.
    2. Resende Filho, Moises de Andrade, 2007. "A Principal-Agent Model for Investigating Traceability Systems Incentives on Food Safety," 105th Seminar, March 8-10, 2007, Bologna, Italy 7897, European Association of Agricultural Economists.
    3. Olmos, Marta Fernández & Grazia, Cristina & Perito, Maria Angela, 2011. "Quality and Double Sided Moral Hazard in Share Contracts," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(1).
    4. Moisés de Andrade Resende Filho & Brian L. Buhr, 2006. "A Principal-Agent Model For Evaluating The Economic Value Of A Beef Traceability System: A Case Study With Injection-Site Lesions Control In Fed Cattle In The Us," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 127, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Olmos, Marta Fernandez & Martinez, Jorge Rosell, 2011. "The Quality-Quantity Trade-off in the Principal-Agent Framework," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 11(1), pages 1-12, January.
    6. Russo, Carlo & Perito, Maria Angela & Di Fonzo, Antonella, 2014. "Using Private Food Safety Standards to Manage Complexity: A Moral Hazard Perspective," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), pages 1-15.
    7. Mojduszka, Eliza M. & Schaub, James D., 2011. "Supply of Food Safety under Competing Inspection Schemes (Risk Mitigation Strategies)," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103942, Agricultural and Applied Economics Association.
    8. Moisés de Andrade Resende Filho, 2008. "Information Asymmetry and Traceability Incentives for Food Safety," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807111109520, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

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