Producer Livestock Disease Management Incentives and Decisions

This paper examines the economics of farm decisions to prevent and control infectious livestock disease. In the case of diseases with costly control tolerating some level of disease is often rational to the producer. Public policy intervention is based on future value and public good aspects of disease control which can lead to a discrepancy between private and public action thresholds. Producer incentives for disease management can be changed through new technologies that lower the cost of prevention or control, subsidies or cost sharing of control measures, or on the consumer side, a change in public desire for disease risk-free products that changes relative prices. Economists can incorporate appropriate epidemiology of a given disease in economic models to inform policy-makers on optimal value or method of subsidies that would prove most effective to make private incentives compatiblewith public policy goals.