An Incentive System for Salmonella Control in the Pork Supply Chain



changes in the serological threshold value, the producer penalty parameter, the producer share of
testing cost, and the optimum value of the production history indicator level when bacteriological
threshold values are 3.5% and 3.0%. The producer quality premium shifts gains between producers
and the slaughter plant without affecting risk. It is €0.80 per hog under IOF ownership. Under COOP
ownership, the producer premium decreases from €4.10 to €4.00 per hog when the bacteriological
threshold decreases from 3.5% to 3..0%. This allows the plant to pay the higher expected slaughter
penalty associated with the lower threshold. The optimal values of the producer quality premium range
from €0.80 to €4.10 per hog and from €0.80 to €4.00 per hog when the threshold levels are 3.5% or
3.0% under CHAIN ownership. Within these intervals, changes in the optimal producer quality
premium simply result in transfers between the producers and the slaughter plant, but they do not affect
the expected welfare gain for the chain.

The producer history indicator level is 24 when the plant threshold level ranges from 2.5% to
1.0%. The value of the producer penalty parameter is in the range €1.30-€1.70 per hog for
bacteriological threshold levels from 2.5% to 2.0%, and the maximum testing probability ranges from
0.47 to 0.57 under all three ownership structures. The testing probability parameter value is 0.10 or
0.11 for a bacteriological threshold value of 2.5% and ranges from 0.04 to 0.06 for a threshold value
2.0% under all thee ownership structures.

The producer quality premium is low and in the range of €1.30-€1.50 per hog under IOF and
CHAIN ownership for bacteriological threshold values ranging from 2.5% to 1.0%. It takes a high
value just above €4.00 per hog under COOP ownership when plant threshold values are 1.5% or
higher. This keeps the producer share of gains from Salmonella control high under COOP ownership.
This effect is strengthened by the fact that producers pay all testing costs under IOF ownership, while
the plant pays all testing costs under COOP ownership. With further lowering the bacteriological

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