This PhD thesis tackles two main issues in livestock health management: a) the incentives for
animal disease prevention on Danish livestock farms and b) allocation of costs of animal disease
outbreaks and animal disease preparedness, among stakeholders involved in the livestock sector.
The main contributions of this thesis are firstly the investigation of incentives for Danish livestock
farmers to prevent animal diseases at the farm level and recommendations on how they could be
improved. Secondly, the exploration of a mutual fund as a possibility for risk pooling among
farmers and how it can be arranged and lastly, a theoretical contribution to how disease
preparedness costs could be shared.
An exploration of literature on issues regarding animal disease prevention in the Danish livestock
sector is used in paper 1, while an empirical approach is used in paper 2, 3 and 4. A theoretical
approach is used in paper 5. The thesis consists of two parts; first is the introduction section where I
introduce the thesis in general and provide an overview of the objectives and main theories and the
second part includes the 5 papers which address the thesis objectives.
Paper 1 uses existing literature to elaborate on the private and public incentives that influence
Danish farmers to prevent animal diseases. The paper reveals that public incentives could be
improved by clearly stating repercussions for not following certain regulations and the current
compensation strategy could be adjusted in a way that there is a balance between incentivizing
farmers to report suspicion of animal diseases but to also have strong enough incentives to prevent
diseases.
Paper 2 investigates factors affecting farmers’ willingness to participate in a hypothetical mutual
fund for contagious animal disease losses and reasons for not participating for those not willing to
participate. The research is based on data from a survey of 325 Danish pig farmers sent out in May
2014. The results reveal that factors significantly affecting the deciding to participate are famers’
knowledge on animal diseases, risk attitude and SPF classification of the farm. One key take away
from this study is that many farmers would accept risk based premium payments.
Paper 3 builds upon paper 2 by analysing the willingness to pay for the hypothetical mutual fund
using a choice experiment. Results of the mixed logit model show heterogeneity among farmer
preferences and the Latent class model reveals two distinct classes where one class has a positive
willingness to pay and another has a negative willingness to pay. For both classes, farmers are
willing to pay the most for losses related to restocking.
Paper 4 seeks to explore a possibility of risk profiling Danish pig farms according to their risk with
respect to introduction of animal diseases. This study uses an empirical methodology of conjoint
analysis to quantify the importance of different risk factors. Both expert and farmer opinion was
studied. Results indicate that importation stands out as the most important factor followed by the
frequency of contact with other farms and agricultural entities and both experts’ and farmers’
opinions are generally similar. Risk profiling of the sample farms shows that majority of the farms
are low risk farms and reveals the possibility of risk profiling for future use.
Paper 5 uses a theoretical approach to analyse the normative foundation of allocation rules that can
be used in sharing costs related to animal disease preparedness. We assume that effort incurred by
the relevant government authority cannot be observed by the farmers and construct a liability index
that describes to what extent each farmer is liable for the total cost. We set several axioms to be
fulfilled by this index and finally, we argue for the practical relevance of this index and show how it
could be used in practice.