Contract governance to reduce antimicrobial overuse in hog farms in China

Abstract

Antimicrobial resistance caused by the overuse of antimicrobials by farmers is an essential health issue. Currently, signing contracts between farmers and cooperatives has become crucial for small farmers to integrate into the modern agricultural industry chain. Unlike vertical government governance, which aims to intervene in the overuse of antimicrobials by farmers through many mandatory or incentive measures, contract governance refers to the social governance model that clarifies rights and obligations between farmers and cooperatives to ensure the adequate performance of contracts, which is especially beneficial to regulate farmers' safe production behavior such as the standard use of antimicrobials. However, there is a research gap concerning the effectiveness of contract governance in inhibiting farmers' overuse of animal antimicrobials. This study applies propensity score matching and mediation analysis method to assess how contract governance affects the overuse of antimicrobials by hog farmers. The paper uses data from 498 hog farmers of China's Hebei, Henan, and Hubei provinces to explore the impact and underlying mechanisms of contract governance on antimicrobial overuse in agriculture. The results showed that contract governance was found to inhibit the overuse of antimicrobials, with the amount paid for antimicrobials reduced by 118 yuan/household. We found evidence that this effect is exerted through three mechanisms: cooperative supervision (CS), technical guidance (TG), and product premium perception (PP). The CS, TG, and PP mediation effects accounted for 19.94%, 27.90%, and 26.93% of the total impact, respectively. Therefore, policy implications of these results include strengthening the standard of contract signing procedures and the integrity of executing contracts, increasing the market premium for products that meet the antimicrobial residue standards, and enhancing farmers' knowledge and contracting ability.