Producer Incentives and Plant Investments for Salmonella Control in Pork Supply Chains

Abstract

This paper presents a unified analysis of dynamic producer incentive systems for Salmonella control in primary production and slaughter plant investments in Salmonella control measures. We identify optimal incentive system parameters and cost-effective control strategies for achieving various levels of Salmonella prevalence. We compare the performance measures of the combined plant-level control and producer incentive system with results obtained under a producer incentive system only. The combined system allocates control effort among producers and the slaughter plant, resulting in 25-83 per cent lower expected total control cost for a wide range of threshold values.

Keywords: dynamic programming, supply chain, food quality, principal-agent

JEL Classification: L14, Q13, Q18