1. Agricultural and food markets

2. What we want to learn about this topic
introduce some of the issues and concepts dealt with in the course
get a sense of the very extensive government intervention in and regulation of agricultural and food markets. This course focuses on the evaluation of these interventions.
introduce the concept of the food chain and the way in which markets link the various stages of the food chain together
identify some potential problems with the operation of food markets

3. Short introduction to the issues
The policy context
Agflation (rising food prices caused by increased demand for agricultural commodities.
"in 2007 agflation hit everything from cereal and baked products to meat, poultry, fish, and eggs“)
in world food markets - a temporary blip or reversal of historical downward trend in real food prices?
further reform of Europe's agricultural policy
the struggle to reach agreement on new international trade rules disciplining agricultural policy in the WTO Doha Development Round
agricultural exceptionalism (Agricultural Exceptionalism and Farm Worker Organizin. Farm workers were explicitly excluded from nearly all of the major federal labor laws passed in the 1930s, building a tradition of “agricultural exceptionalism” in which farm labor is not subject to the same regulations as the labor in other industries. )- is agriculture different? And why?
role of agriculture and food industry in the Guyanese Economy

4. Short introduction to the issues
The food chain
resource markets (land, labour and capital)
input markets (fertiliser, feed, chemicals, veterinary services etc.)
primary commodity markets (farmer-merchant and farmer-processor interactions)
wholesale food markets (processor-retailer interactions)
retail food markets (retailer-consumer and food service-consumer interactions)

6. Short introduction to the issues
Issues in agricultural and food markets
Primary commodity markets
- competitive markets - characterised by volatility, declining terms of trade, bargaining weakness of farmers, may not guarantee food security at either the household or national level
Factor and resource markets
- missing and imperfect markets (environment, agricultural research) labour market (concerns over income levels), land markets (managing competing uses)
Input and food wholesale markets
- concentrated markets - suffer from concerns over market power, role of advertising, brands
Food retail markets
- changing consumer behaviour (diets, nutrition), asymmetry of information (food safety, food quality)
International trade markets
- Level playing field?, fair trade, disease spread, food miles

7. Short introduction to the issues
Government regulation of agricultural and food markets
- Most countries adopt an active agricultural policy to address these perceived weaknesses in food and agricultural markets. Thus there is evidence that policy addresses significant and widespread socio-economic problems. However....
- Note the high levels of border protection far exceeding anything we find in the industrial or services sectors
- Note the high transfers from consumers and taxpayers to agriculture (OECD PSE estimates)
- Note the frequency of trade disputes around issues to do with agricultural trade barriers and food safety
Are these costs simply a fair price which society is prepared to pay to achieve valid objectives? What are these objectives? Are they being met by existing policies? Could they be met more cheaply?

8. Short introduction to the issues
The policy analysis perspective
- How does the economist approach these issues? The following is a useful checklist.
What objectives is the policy trying to achieve?
What instruments is it using?
Is the intervention efficient?
- Is the intervention equitable?