A Market-based Mitigation Program for Wind-borne Diseases

Anton Bekkerman, Nicholas Piggott, Barry Goodwin (barry.k.goodwin@gmail.com) and Kenrett Y. Jefferson-Moore

Agricultural and Resource Economics Review, 2012, vol. 41, issue 2, 14

Abstract: Wind-borne diseases can spread rapidly and cause large losses. Producers may have little incentive to prevent disease spread because prevention may not be welfare-maximizing. This study proposes a market-based mitigation program that indemnifies producers against disease-related losses and provides an incentive to neighboring producers to take preventive action, which can substantially mitigate infestations, reduce the likelihood of catastrophic losses, and increase social welfare. An equilibrium displacement model simulates introduction of the program for U.S. soybeans. Simulations reveal that the market-based solution contributes to minor market distortions but also reduces social welfare losses and could succeed for other at-risk commodities.

Keywords: Agribusiness; Agricultural and Food Policy; Crop Production/Industries; Farm Management (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:132528

DOI: 10.22004/ag.econ.132528

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