Farm policy lags U.S. ag and food structural changes
4) Modern food markets increasingly demand product quality in a wide variety of
dimensions. Vertical markets from farm to retail have become increasingly coordinated, mostly through contracts. This has helped solve information problems and enabled farmers and food processors to more consistently and accurately meet consumers’ quality demands. Restricting the contracting process, as recent regulations have proposed, is therefore likely to harm both consumers and farmers, according to Sextone and Saitone.
5) Advancements in genetically modified, or transgenic, seeds have led to dramatic
concentration in seed markets for major crops such as corn, cotton, and soybeans. Antimonopoly and competition policies should be guided by the objective of maximizing total private incentives for transgenic innovation, the economists say, not intentionally or unintentionally limiting technical innovation.
While the farm bill debate is just beginning to stir, the likelihood of Washington lawmakers being able to complete a plan by the September deadline is another issue altogether.
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