Contracts for Grain Biosecurity and Grain Quality
AbstractThe export of grain from Western Australia depends upon a grain supply network that takes grain from farm to port through Cooperative Bulk Handling receival and storage sites. The ability of the network to deliver pest free grain to the port and onto ship depends upon the quality of grain delivered by farmers and the efficacy of phosphine based fumigation in controlling stored grain pests. Phosphine fumigation is critical to the grain supply network because it is the cheapest effective fumigant. In addition, it is also residue free. Unfortunately, over time, common stored-grain pests have evolved to develop resistance to phosphine and there is a risk that phosphine will become less effective and may need to be replaced with more expensive alternative fumigants. Currently the alternative fumigants will involve substantial capital investment or leave residues in the grain which may restrict grain exports. There is some evidence that phosphine resistance develops on farm due to inadequate biosecurity management. As a first step to analysing this problem, this paper considers the design of farm biosecurity contracts using a principal-agent approach.
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Bibliographic InfoPaper provided by Australian Agricultural and Resource Economics Society in its series 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia with number 124216.
Date of creation: Feb 2012
Date of revision:
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Principal-agent model; supply contracts; moral hazard; stored grain; biosecurity; Crop Production/Industries;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- S. Andrew Starbird, 2005. "Moral Hazard, Inspection Policy, and Food Safety," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 15-27.
- Olmos, Marta FernÃ¡ndez & 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), January.
- Starbird, S. Andrew, 2005. "Supply Chain Contracts and Food Safety," Choices, Agricultural and Applied Economics Association, vol. 20(2).
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