Liability Risks in Agri-food Supply Chains: The Case of Wet Feed
AbstractRecent animal feed crises caused substantial damage throughout food supply chains and, consequently, initiated debates on the liability insurance cover of animal feed companies. In this framework, a quantitative risk analysis for wet feed producers in the Netherlands is presented. The simulation model developed is parameterised by among others data from three Dutch wet feed companies reflecting about 45% of the wet feed market in the Netherlands. The model addresses direct damage up to farm level. Default outcomes per crisis show that the number of contaminated farms is expected to be 117, with a variation from 19 farms in the 5% percentile to 331 farms in the 95% percentile. Projected direct damage per crisis is on average Euro 0.9 million, ranging from Euro 0.09 million (5%) to Euro 2.8 million (95%). The expected number of 117 farms consists of 15 sow farms, 31 hog farms, 49 dairy farms and 22 beef farms. Sensitivity analyses illustrate that the size of farms supplied with wet feed and the number of days in which contaminated wet feed is delivered are key variables in determining the eventual size of damage. Outcomes show the expected situation for the entire wet feed sector in the Netherlands— under the assumption that all wet feed companies have about the same risk profile as the sample companies whose data have been used to parameterise variables such as mixing rates and number of farms supplied each day. As the sample companies cover 45% of the total volume of wet feed in the Netherlands, their “share” in total damage is expected to be about the same, i.e. 45%. Similar conclusions hold for other wet feed companies whose risk profile is comparable to that of the sample companies. Outcomes are used in supply chain and insurance discussions on reviewing liability insurance covers of animal feed producers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44396.
Date of creation: 2008
Date of revision:
Contamination risk; Simulation model; Direct damage; Agribusiness;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.