ECONOMIC ANALYSIS

Economic Analysis of the United States Food system

Economic Analysis of the United States Food system

Introduction

Agricultural economics is an applied field of economics that focuses primarily on food and fiber production and consumption. Defining the boundaries of agricultural economics can be difficult, however, because issues outside these traditional areas have become increasingly important to the profession in recent years. Agricultural economists engage in work ranging from farm-level cost accounting to assessing the consumer impact of food safety and nutrition labeling to analyzing worldwide agricultural trade patterns and a host of other real-world issues. Accordingly, the Agricultural and Applied Economics Association (AAEA), the largest professional organization for agricultural economists in the United States, currently recognizes a variety of topic areas under the broad disciplinary umbrella, including community and rural development, food safety and nutrition, international trade, natural resources and environmental economics, consumer and household economics, markets and competition, agribusiness management, and production economics (Antle & Sumner, 1996).

In this paper, an overview of the field of Food system economics is provided, focusing on the applications and contributions affecting the food and fiber sector. The paper begins with mentioning contemporary level of food consumption. Next, the underlying theoretical underpinnings are discussed. This theoretical section is followed by an outline of quantitative tools used in agricultural economics, then by short descriptions of a few major subfields of the discipline.

Industry Perspective

From the perspective of the agribusiness industry itself, the term agribusiness refers to business-like agriculture including modern management and equipment. This definition includes the physical farm property, inputs, and the growing processes. These processes may include all stages of agriculture and food production, from the development of seed germplasm to the processing of food products. From this perspective, the assumption is that agricultural and food-processing businesses will increase in scale like any other business. The agribusiness model is seen as one of efficiency and a rational business choice. Issues of labor exploitation and land stewardship are not usually discussed in this version of the definition. Proponents of agribusiness are generally promoters of international agricultural commodity trade and agricultural agglomeration and development (Penson, Capps, Rosson & Woodward, 2006).

Some of the larger and better-known agribusiness companies include Monsanto and ConAgra Foods. Although these companies are multinational corporations, smaller family-owned operations may be termed agribusiness companies as well. Monsanto is representative of the production end of agribusiness, manufacturing agricultural technologies and inputs such as seeds, herbicides, and pesticides. ConAgra is a packaged food company, processing and marketing food products around the world.

Both corporations market food and agriculture products under various brand names. In this context, agribusiness is mostly a descriptive term and refers to the business involved in agricultural production. This may be very wide-ranging, including farming, seed supply, agrochemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales. Undergraduate and graduate degrees are available specifically for agribusiness at universities such as Texas Tech University and Kansas State University (Antle & Sumner, 1996). The California Polytechnic State University has a Department of Agribusiness, boasting the largest ...