PROTECTING CONTRACT GROWERS OF BROILER CHICKEN INDUSTRY

welfare weight, ω? The implementation procedure is simple. Say, for ψ(ω)=ω and ω=5%. Then
(6') will give us

rⁱ(.)=bo+βo[(105% χ^-i -xi ] .

Which shows that the standard is merely others’ average. Instead, it is 105% of others’ average.
In case of existing pay structure, growers know their own average and others average. Only thing
they need to do is to adjust others average by 105% provided the regulatory rule is in place.

Setting the value of ω is the political issue.

4. Feasibility

So far it is assumed that there will be no budgetary constraint. That means the integrator
can pay that additional amount from his profits. But if this is not the case and the regulator has
some money (B) to spend on it, then the problem changes. If the budget constraint is

РУ - ʃXH ∙∙∙∙∙IXH U' (U(x))ɪ(x/e)dX...dxⁿ -E(X /e) ≤B

(7)

Now, the derived condition is

_u.∣- r ( _x)] ₌______________________^h(^xi /^e = ^eH )g(^x i / ^xi^{, e} = ^eH )__________________ (5”)

^[ ( ^)]                                i i i ∕ i -i - , -i / i i            -i          ʌ

(_λ + _ω) + μ[_{1 -} h(^X / e = eL^, e = eH )g(^x  /^{x, e} = ^eL^{, e}  = ^eH ) ]

h(x^l / e = e_H )g(x^-i / x^l, e = e_H )

Where y is the multiplier for the budget constraint. In this case, y plays vital role in

In the determination of the rⁱ(x). If the budget is not binding we get the similar results as
described above. But if the budget is binding then depending on the value of y ,the regulator’s
Problem differs from the integrator’s problem. For some values of y ,both may have the similar
results. In that case regulator may not be able to affect privately held transactions.

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