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Producer Incentives in Livestock Disease Management

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Management of farm animal diseases is increasingly important in view of the threats they pose to farm incomes and sometimes even to the viability of farm enterprises, wildlife and humans. This report analyses the incentives for individual farmers to manage such risks and the governments' role to align farmer incentives with public objectives.

Identifying and assessing animal disease risks, as well as understanding their financial implications, are central to decisions made by farmers. The report examines the economic drivers of farmer decisions and government economic instruments, such as compensation related to livestock epidemics. It further discusses a spectrum of psychological and social drivers of farmer behaviour and emphasises the importance of government's more extensive role in the areas of information, communication and education related to disease management. Finally, farmer collective action in various areas of disease management is considered, such as capacity building, risk insurance, surveillance, and responses to disease outbreaks. The case studies of livestock disease management in Australia, Chile and Korea complement this analysis.

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Economic determinants of farmer decision-making related to animal disease

This chapter reviews the major economic and financial issues of farmers’ management decisions related to livestock disease. Farmer decisions are first examined from the perspective of costminimising or profit-maximising with no risk, uncertainty or information issues, which is most appropriately applied to endemic diseases. The role of risk and uncertainty in farm decisions is then examined, as are farm incentives in the presence of information asymmetries. This analysis provides insights that are relevant to epidemic diseases. Finally, the role of the farm industry structure and spatial effects in disease management are examined.

English

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