CONTRACTING STRATEGIES FOR EU TRACEABILITY REQUIREMENTS

William Wilson and Bruce L. Dahl

No 23535, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: A principal-agent problem was specified to define the equilibrium solution of a contracting strategy for a U.S. supplier exporting wheat to meet EU traceability requirements. The buyer (principal) offers a contract, the supplier (agent) accepts the contract, and then the supplier decides whether to offer a contract to the farmer. Nature at each level of the supply chain represents uncertainty due to adventitious commingling and imperfect information. Results indicate farmers would require 9 c/bu and suppliers 8 c/bu to induce their participation in the contracting strategy.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 22
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:23535

DOI: 10.22004/ag.econ.23535

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