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Agricultural Marketing Institutions: A Response to Quality Disputes

Listed author(s):
  • Dimitri Carolyn

    (USDA-ERS, Washington DC, USA)

Grades and inspections govern the marketing of agricultural commodities. Federal legislation created the marketing institutions, in the late 19th and early 20th centuries, when national markets were emerging. Three commodities fresh produce (fruit and vegetables), grains, and meat all rely on similar institutions, suggesting they serve a similar role in each market. Tracing the events prior to the legislation of inspection for the three product groups reveals that disputes over quality in transactions between buyers and sellers were present in the fruit and vegetable and grain markets, while transactions along the meat marketing chain were not subject to such disputes. Evidence suggests that the institutions performed the same functions in the fruit and vegetable and grain sectors (solve quality problems), while meat inspections served different purposes that varied over time. As contracts and vertically coordinated market channels become more common in the fresh produce and grain industries, reputation effects will likely be able to enforce contracts, reducing the need for inspection. Meat inspection most likely will continue to be required to ensure sanitation and safety of the meat supply.

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File URL: https://www.degruyter.com/view/j/jafio.2002.1.1/jafio.2002.1.1.1035/jafio.2002.1.1.1035.xml?format=INT
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Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

Volume (Year): 1 (2003)
Issue (Month): 1 (September)
Pages: 1-25

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Handle: RePEc:bpj:bjafio:v:1:y:2003:i:1:n:17
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  1. De, Sankar & Nabar, Prafulla, 1991. "Economic implications of imperfect quality certification," Economics Letters, Elsevier, vol. 37(4), pages 333-337, December.
  2. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
  3. Kindleberger, Charles P, 1983. "Standards as Public, Collective and Private Goods," Kyklos, Wiley Blackwell, vol. 36(3), pages 377-396.
  4. Alessandro Lizzeri, 1999. "Information Revelation and Certification Intermediaries," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 214-231, Summer.
  5. W. Kip Viscusi, 1978. "A Note on "Lemons" Markets with Quality Certification," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 277-279, Spring.
  6. Libecap, Gary D, 1992. "The Rise of the Chicago Packers and the Origins of Meat Inspection and Antitrust," Economic Inquiry, Western Economic Association International, vol. 30(2), pages 242-262, April.
  7. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-1346, December.
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