Food processing and distribution: An industrial organization approach
In: Handbook of Agricultural Economics
This chapter focuses upon competitive relationships in agricultural markets. These markets often exhibit high and increasing levels of buyer and/or seller concentration. Both food manufacturing and retailing are characterized by aggressive attempts by firms to achieve product differentiation. Vertical coordination within the sector through integration or various forms of vertical control is also increasingly important. In addition agriculture is relatively unique among industries in that governments often permit and encourage producers to form selling cartels. Exports and imports of agricultural commodities also often involve intervention by marketing boards and state trading agencies. We review and evaluate recent research on each of these topic areas.
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