TY - UNPB
T1 - Kontraktproduktion af slagtekyllinger
AU - Bramsen, Jens-Martin
PY - 2005
Y1 - 2005
N2 - The Danish production of broiler chicken is organized as contract production. This Working Paper is analyzing the contracts between the two private Danish slaughter-houses and their producers with a holistic economic approach. The overall aim is to maximize the integrated profit, but in order to implement this into reel world contract design, there are three, often conflicting, criteria to consider; coordination, motiva-tion and transaction-costs.
Generally the broiler contracts are working nicely especially in sense of the impor-tant coordination of time and place of deliveries etc. However there is a problem with a possible hold-up opportunity. The term of notice is 1-2 years and in this period the slaughterhouses are in principle free to set a price. Due to relative week competition and specific investments this can be used by the slaughterhouses to decrease the price especially in the short run but also in the long run. Regardless of weather this oppor-tunity is actually used or not, the consequence is a lack of motivation for producer investment resulting in higher costs. The paper therefore suggest a model with either fixed prices or prices based on different indexes, both of them being negotiated regu-larly e.g. every second year.
Another important area, where further optimization could be needed, is the quality payment scheme. To provide the right incentives the payment scheme must reflect the value of quality, but it seems as the value of future demands are neglected. Also documentation e.g. certification must be implemented as a requirement in the pay-ment scheme. Therefore a new point based payment scheme is proposed. Still, devel-oping any payment scheme for quality, much focus on the motivational aspects of quality measurement is needed.
AB - The Danish production of broiler chicken is organized as contract production. This Working Paper is analyzing the contracts between the two private Danish slaughter-houses and their producers with a holistic economic approach. The overall aim is to maximize the integrated profit, but in order to implement this into reel world contract design, there are three, often conflicting, criteria to consider; coordination, motiva-tion and transaction-costs.
Generally the broiler contracts are working nicely especially in sense of the impor-tant coordination of time and place of deliveries etc. However there is a problem with a possible hold-up opportunity. The term of notice is 1-2 years and in this period the slaughterhouses are in principle free to set a price. Due to relative week competition and specific investments this can be used by the slaughterhouses to decrease the price especially in the short run but also in the long run. Regardless of weather this oppor-tunity is actually used or not, the consequence is a lack of motivation for producer investment resulting in higher costs. The paper therefore suggest a model with either fixed prices or prices based on different indexes, both of them being negotiated regu-larly e.g. every second year.
Another important area, where further optimization could be needed, is the quality payment scheme. To provide the right incentives the payment scheme must reflect the value of quality, but it seems as the value of future demands are neglected. Also documentation e.g. certification must be implemented as a requirement in the pay-ment scheme. Therefore a new point based payment scheme is proposed. Still, devel-oping any payment scheme for quality, much focus on the motivational aspects of quality measurement is needed.
M3 - Working paper
T3 - FOI Working Paper
SP - 1
EP - 90
BT - Kontraktproduktion af slagtekyllinger
PB - Fødevareøkonomisk Institut, Københavns Universitet
CY - Frederiksberg
ER -