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Food System Economics

Posted by struscott | December 10, 2009

Agricultural economist Dan Bernardo, dean of the College of Agricultural, Human, and Natural Resource Sciences, discussed economic issues behind The Omnivore’s Dilemma, which is the 2009 Common Reading Book for freshmen.

Bernardo said although he does not agree with everything in the book, he found it to be thought provoking. The central thesis of The Omnivore’s Dilemma is the industrialization of agriculture. He said Michael Pollan, author of The Omnivore’s Dilemma, advocates for a food system that skips many steps in the food system chain, taking the product straight from the producer to the consumer.

Bernardo said this more direct chain is expanding in our country, but is also more expensive. The traditional chain can offer products at a lower cost because of economies of scale, meaning bigger companies can buy in bulk at a lower cost and bigger farms can usually produce more, cheaper.

Wal-Mart is the number one food retailer in the world. Bernardo said consumers have a lot to do with that because we prefer low cost products, which is what Wal-Mart offers. Larger firms can also offer more variety year round. Information technology is also partially responsible for economies of scale.

“We as consumers as a group are also responsible, not just big bad Wal-Mart,” said Bernardo.

Bernardo said people want to have bigger farms and produce more so they can be Wal-Mart’s sole contract on any one particular item. One grower already has the sole contract for cherries for Wal-Mart. Bernardo said 15 percent of farms provide 80 percent of the gross value.

Pollan’s book also expressed a large concern that Mansanto, a seed company, will control the food supply. Bernardo said the seed industry now has huge market power, allowing them to choose the prices. He said this is the result of seed patents, which forces growers to purchase their seeds from certain vendors.

Bernardo said part of the industrialization of agriculture is more corporate-based farms, and fewer small family farms. Another result is the concentration of the industry. There are now fewer people growing more crops. Bernardo said that, overall, the number of farms has decreased in the last 70 years, but between the last two censuses Washington has seen an increase in the number of farms.

“We are living during a revolution of the agricultural industry,” said Bernardo.

by Whitney Parsons, CAHNRS Marketing and News intern.