Rethinking the Role of Government in the Future Agri-Food System

The original motivation for this paper grew out of the Food and Agricultural Marketing Consortium's recognition that 1996 marks the fiftieth anniversary of the Agricultural Marketing Act of 1946, a sweeping piece of legislation that forms a major underpinning for government activities to promote agricultural marketing in the United States. More broadly, the Consortium recognized that much of domestic food and agricultural marketing policy and many of our institutions date back even further to the 1920s and 1930s and have been recently viewed as outmoded to various degrees by different people. The Consortium posed the question: What set of government policies fits the current and future agri-food system? Another way to state this question is to ask what set of marketing policies for the agrifood system is in the public interest? The question is one of optimal policy design, if such a thing can be effectively defined. Identifying the set of policies that fits current and future conditions is a formidable task, requiring as it does the consideration of how markets are operating and how they are likely to change in the future. The most difficult aspect of the task, however, is considering: 1) to which performance standards to which we wish to hold the agri-food system, 2) to what degree is some notion of fairness part of those standards, and, 3) if fairness is important, what standard of fairness should we use? Valuable treatises have been written on these subjects. However, I propose to talk about them more informally. In a session on marketing orders at the Consortium's 1994 meeting, Gary Fairchild posed the questions in this form: If we did not have marketing orders today, would we want them and propose them? Could we get them approved? The second question is especially timely since the relative size of the agricultural sector is now smaller than when many of the programs were originally passed. My purpose here is to address the questions posed above for all types of marketing policy.