The Research For Incentive-Compatibility Mechanism Of The Adoption Of Pig Traceability System Under The Perspective Of Risk Cost

In recent years, all kinds of food safety incidents happened. This series of food safety problems not only cause serious harm to the life and health of consumers, but it will affect the related industrial development, ecological environment security and the government credibility. As a system to improve the safety of food supply chain, the traceability system in agricultural products is highly valued around the world. In order to improve the food-safety mechanism in our country, the Chinese government introduces the food traceability system to the domestic by trying to build food traceability system pilot project. However, the result is disappointing. The overall progress of food traceability system construction in China is still slow and the problems aren’t be traced. To speed up the traceability system application process, it is necessary to build the induction incentive compatibility mechanism of enterprises to adopt the traceability system.Based on pig traceability system as an example, this paper discusses the failure of the incentive compatibility mechanism of the food traceability system. Firstly, we examine the restrictive factors which influence the widely used of pigs traceability system in our country from the four angles of manufacturer, technology, consumer, legal regulation to revealing the necessary of exploring the reality of the system adopts from the perspective of risk cost. Secondly, building the "participation constraint" and "incentive compatibility constraint" conditions of farmers’(enterprises’) participation in the traceability system, to reveal that the risk cost is a kind of negative incentives for farmers (enterprise) to use pig traceability system theoretically. Finally, we understand the fact of farmers’(enterprises’) participation in and conscientiously implement pig traceability system and its influencing factors through the empirical analysis.Through the analysis, this article can draw the following conclusion:Firstly, farmers (enterprise) have the low risk-cost to take part in the traceability system. Whether the existing legal system, or the market environment, they have insufficient penalties of violations. And these lead to negative incentives for food traceability system adoption decision. Second, farmers’decision of participating in traceability system depends on participation constraint; farmers’decision of participating in traceability system seriously depends on incentive compatibility constraint. On the basis of the above two conditions, we deduced the minimum of premium income and risk cost. As it happens, these two number is the same as Lagrange function. Third, the percentage of farmers"(enterprises") participation in the pig traceability system is higher, but the willingness is not strong. So farmers don’t execute the system seriously. Fourth, we deduce that "the promotion of pig traceability system" and "the frequency of the pig-archives checking of the government" are two reasons for farmers to choice whether they will participate in pig traceability system.Based on economics theory and management theory, this study analyzes adoption mechanism of the pig traceability system to improve the theoretical and practical significance. Firstly, this study introduces risk costs as a key factor to reveal the relationship between risk cost and the adoption mechanism of pig traceability system. Secondly, through on-the-spot investigation, it contributes to a more comprehensive and accurate understanding of food traceability system, and have a deeper understanding of the relationship between the lack of negative incentives and the food safety problems. Increasing the risk cost as a basic food-safety management concept and management mechanism to facilitate better grasp the development process of food traceability system application, provide objective basis for food-safety environment construction, and to promote the national food traceability system construction, to make a positive contribution to enhance the level of food quality and safety management in our country further.