Depolarizing Food and Agriculture: An Economic Approach

213 Pages·2014·1.277 MB·English

by  Andrew Barkley, Paul W. Barkley

DEPOLARIZING FOOD
AND AGRICULTURE
Many issues in food and agriculture are portrayed as increasingly polarized. These
include industrial vs. sustainable agriculture, conventional vs. organic production
methods, and global vs. local food sourcing, to name only three. This book
addresses the origins, validity, consequences, and potential resolution of these and
other divergences.
Political and legal actions have resulted in signifi cant monetary and psycho-
social costs for groups on both sides of these divides. Rhetoric on many issues has
caused misinformation and confusion among consumers, who are unsure about the
impact of their food choices on nutrition, health, the environment, animal welfare,
and hunger. In some cases distrust has intensifi ed to embitterment on both sides of
many issues, and even to violence. The book uses economic principles to help
readers better understand the divisiveness that prevails in the agricultural production,
food processing, and food retailing industries.
The authors propose solutions to promote resolution and depolarization
between advocates with seemingly irreconcilable diff erences. A multifaceted,
diverse, but targeted approach to food production and consumption is suggested to
promote social well-being, and reduce or eliminate misinformation, anxiety,
transaction costs, and hunger.
Andrew Barkley is Professor and University Distinguished Teaching Scholar in
the Department of Agricultural Economics at Kansas State University, USA.
Andrew teaches courses in the economics of agriculture and public policy. His
research includes assessment of teaching and learning methods and the economic
evaluation of the wheat industry.
Paul W. Barkley is Professor Emeritus, Department of Agricultural Economics,
Washington State University and Adjunct Professor, Applied Economics
Department at Oregon State University, USA. Paul has made major contributions
to the fi elds of rural (community) development and environmental economics. He
is a Fellow of the Agricultural and Applied Economics Association.
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Competition and Effi ciency in International Food Supply Chains
Improving food security
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Organic Agriculture for Sustainable Livelihoods
Edited by Niels Halberg and Adrian Muller
The Politics of Land and Food Scarcity
Paolo De Castro, Felice Adinolfi , Fabian Capitanio, Salvatore Di Falco and Angelo Di Mambro
Principles of Sustainable Aquaculture
Promoting social, economic and environmental resilience
Stuart Bunting
Reclaiming Food Security
Michael S. Carolan
Food Policy in the United States
An introduction
Parke Wilde
Precision Agriculture for Sustainability and Environmental Protection
Edited by Margaret A. Oliver, Thomas F. A. Bishop and Ben P. Marchant
Agricultural Supply Chains and the Management of Price Risk
John Williams
The Neoliberal Regime in the Agri-Food Sector
Crisis, resilience and restructuring
Edited by Steven Wolf and Alessandro Bonanno
Sustainable Food Systems
Building a new paradigm
Edited by Terry Marsden and Adrian Morley
Seasonal Workers in Mediterranean Agriculture
The social costs of eating fresh
Edited by Jörg Gertel and Sarah Ruth Sippel
Food Security, Food Prices and Climate Variability
Molly E. Brown
Depolarizing Food and Agriculture
An economic approach
Andrew Barkley and Paul W. Barkley
For further details please visit the series page on the Routledge website: http://www.
routledge.com/books/series/ECEFA/
DEPOLARIZING FOOD
AND AGRICULTURE
An economic approach
Andrew Barkley and Paul W. Barkley
First published 2015
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
And by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2015 Andrew Barkley and Paul W. Barkley
The right of Andrew Barkley and Paul W. Barkley to be identifi ed as
authors of this work has been asserted by them in accordance with sections
77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilized in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identifi cation and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Barkley, Andrew, 1962-
Depolarizing food and agriculture : an economic approach / Andrew
Barkley and Paul W. Barkley.
pages cm. -- (Earthscan food and agriculture series)
Includes bibliographical references and index.
1. Agriculture--Economic aspects. 2. Agriculture and politics. 3. Food
industry and trade--Political aspects. 4. Agriculture and state. I. Barkley,
Paul W. II. Title.
HD1415.B286 2015
338.1--dc23
2014020167
ISBN: 978-0-415-71422-8 (hbk)
ISBN: 978-0-415-71423-5 (pbk)
ISBN: 978-1-315-88282-6 (ebk)
Typeset in Bembo
by Saxon Graphics Ltd, Derby
CONTENTS
List of fi gures ix
List of tables x
List of boxes xi
Acknowledgments xiii
Acronyms and abbreviations xiv
1 Introduction: the industrialization and
de-industrialization of agriculture 1
Introduction 1
Global agriculture 3
Polarization and agriculture 4
Example 1: polarization in the beef industry 5
Example 2: the Green Revolution in India 6
Is polarization good or bad? 8
The economic approach to polarization 9
Major themes and book summary 9
Notes 13
2 A concise history of agriculture:
the advent of polarization 14
Introduction 14
The development of US agriculture 16
Slavery 18
The search for effi ciency 19
The mechanization of American agriculture 19
Global diff usion of agricultural equipment 21
vi Contents
The Civil War period: Abraham Lincoln signs fi ve important
laws aff ecting agriculture 22
The government and US agriculture: the development of
agricultural protectionism 23
The increased use of chemical fertilizer 27
Genetically modifi ed plants and seeds 29
Summary and conclusions 30
Notes 31
3 Markets and polarization 33
Introduction 33
Historical evolution of a circular fl ow economy 36
Market economies, command economies, and mixed
economies 37
Market economies and consumer sovereignty 38
Why do markets work? 38
Resource allocation and coordination in a market-based
economy 39
Price changes 41
Limits to markets 44
Poverty in a market-based economy 45
Summary and conclusions 45
Notes 46
4 Food markets and polarization 47
Introduction 47
What food to produce? 50
How much food to produce? 53
How to produce food? 55
When to produce food? 59
For whom to produce food? 61
Summary and conclusions 61
Notes 62
5 Creative destruction and the cycle of polarization 64
Introduction 64
Background: early economic studies 67
Diff usion of innovations 70
Determinants of the rate of adoption of agricultural innovations 71
A model of the rate of agricultural innovation adoption 74
A model of polarization in food and agriculture 76
Innovators and early adopters: intensely pro-innovation 77
Contents vii
The opposition: intensely anti-innovation 81
Summary and conclusions 82
Notes 83
6 Industrial agriculture and economies of scale 84
Introduction 84
Market concentration in food and agriculture 85
Economies of scale 88
Industrial agriculture and polarization 93
Depolarizing industrial agriculture: a way forward 95
Retail groceries and economies to scale 97
Economies of scale and the environment 98
Summary and conclusions 101
Notes 101
7 Externalities, public goods, and agricultural subsidies 102
Introduction 102
Externality 103
Challenges of agricultural externalities 111
Public goods 113
Economic analysis of agricultural policy 114
Optimal level of polarization 115
Summary and conclusions 116
8 Product bundling: bringing together divergent
consumers 119
Introduction 119
Consumer sovereignty 120
Product bundling 121
Summary and conclusions 128
Notes 129
9 Trade, globalization, and localism 130
Introduction 130
Absolute advantage 132
Comparative advantage 133
Opposition to trade due to protection from import competition 136
Diversity and trade 138
Dynamic gains from trade 138
Self-suffi ciency 138
Revenues from tariff s 139
Preferential Trade Agreements (PTAs) 139
viii Contents
Food safety 141
Gains from trade from complementary paradigms in
production agriculture 143
Summary and conclusions 145
Note 145
10 Negotiating resolution: game theory 146
Introduction 146
Firm location decision: a game that brings fi rms together 149
The prisoner’s dilemma 150
Price war game 153
Sequential games: market entry 155
Entry deterrence 158
Asymmetric information: food safety and food quality 160
Summary and conclusions 164
Notes 165
11 The future of food polarization 166
Introduction 166
Economics 168
Diversity 168
Consumers 169
Producers 170
Interdependence 171
Markets 172
Politics 173
Summary and conclusions 173
References 175
Index 186
FIGURES
3.1 Historical evolution of a circular fl ow economy 36
5.1 Rogers’ distribution of adopters 66
5.2 Cumulative technology adoption over time: aggregate diff usion 67
5.3 An Engel Curve 68
5.4 A Kuznets Curve 69
5.5 An Environmental Kuznets Curve 70
5.6 A model of agricultural innovation adoption 75
5.7 A model of agricultural polarization 76
5.8 Impact of income growth on agricultural polarization 77
6.1 Graph of economies of scale: Hypothetical beef packing plant 91
7.1 Graph of eff ects of corn farmer herbicide on corn and grape profi ts 110
8.1 Product lifecycle 120
8.2 Bundling burgers and beverages 124
8.3 Bundling burritos and a natural beef attribute 126
10.1 Product choice game 147
10.2 Firm location decision 149
10.3 Prisoner’s dilemma 151
10.4 Price war game 154
10.5 Market entry game 156
10.6 Subsidy to keep a rival out of the market 159