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A Market-based Mitigation Program for Wind-borne Diseases

Published online by Cambridge University Press:  15 September 2016

Anton Bekkerman ,
Nicholas E. Piggott ,
Barry K. Goodwin  and
Kenrett Jefferson-Moore
Anton Bekkerman
Affiliation:
Montana State University
Nicholas E. Piggott
Affiliation:
North Carolina State University
Barry K. Goodwin
Affiliation:
North Carolina State University
Kenrett Jefferson-Moore
Affiliation:
North Carolina A&T State University
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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

check-offequilibrium displacement modelinvasive speciessoybean rustwelfare effectswind-borne disease
Type
Research Article
Information
Agricultural and Resource Economics Review , Volume 41 , Issue 2 , August 2012 , pp. 175 - 188
Copyright
Copyright © 2012 Northeastern Agricultural and Resource Economics Association 

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