Mitigating Production Practices and Antibiotics Use in Meat Industries Prone to Economies of Scale by Institutional Novelties, Marketing and Voluntary Actions
- Ernst-August Nuppenau
Achieving improved standards in animal husbandry (including less use of antibiotics) through appropriate interventions has become a matter of public concern. It is currently both, hotly debated and a challenge for food economics. The question is: how can one achieve change in a given environment of property rights and interests? This paper offers a novel approach intended for conflict solving in meat industries which are prone to economies of scale, which are under international and competitive pricing and which experience structural change. In particular, in case of: (i) economies of scale favouring large-scale production and high stocking densities (supported by increased antibiotic use), (ii) political power about resistance to regulate (avoiding strong interference), but also in contrast to (iii) consumers' wishes and willingness to pay (WTP for a change in production modes), there is a problem of coordination and institutions. In this article, the issue is delineated as a problem of political bargaining and creating marketing channels (broker and agency) which shall actively pursue promotion of reduced antibiotics use (specifically through reduced stocking density) as well as negotiations on compensations (for cost increase). Producers are outlined with regards to scheme participation along willingness to accept (WTA). Stocking density reduction is used as proxi for more healthy animal rearing methods. We establish interest functions and show how a bargain can be modelled in the tradition of Zusman’s political economy. Bargaining involves power coefficients for brokerage (premium sharing) as well as an agency (called FSA); the agency is modelled as a bureaucracy optimizing modified costs and benefits. In fact, the agency maximizes its budget and ensures participation of willing producers to join programs. Finally we refer to ways how to solve the issue in modes of political economy models. The assumption is that asymmetric information prevails and consumers are willing to pay (WTP) for healthy food.
- Bella DongEditorial Assistant