The Economics of the Naturalist Food Paradigm

Challenges to the conventional paradigm have isolated industrial agriculture from consumer segments exhibiting preferences for a growing array of credence attributes, including organic, locally produced, and raised using humane livestock and poultry practices. This review surveys the empirical evidence on the economic impact of the alternative to the conventional industrial agriculture paradigm that motivates these growing market segments. We define this alternative the Naturalist Paradigm. While more research is needed to completely assess the impacts of specific naturalist responses, current findings demonstrate that restrictions on industrial practices imposed by policy or consumer preferences sacrifice productivity, thereby imposing environmental costs and raising food prices. Such restrictions may also reduce choice sets of consumers, impeding consumer and producer welfare gains. The intended benefits of such practices for human, animal, or environmental well-being must be weighed against the costs they impose. Trade-offs imposed by such practices suggest that their contributions to obesity reduction in the developed world, alleviation of hunger and malnutrition among poor populations, and avoidance of environmental pollution and biodiversity loss are highly uncertain.