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Abstract
Among alternative agriculture's basic tenets
is the notion that the long-term health of our food and fiber system depends
upon maintaining sufficient diversity in production, processing, and marketing.
Such diversity ensures open access, competition, and innovation. The
rationale is similar to that for maintaining adequate diversity in natural
biological communities - reductions in species diversity (and competition)
hamper our ability to adapt to social, physical, and biological shocks through
time.
This report examines the implications of two emerging and quite
different food streams in U.S. agriculture: industrial and direct marketing.
Clearly, the future trajectory of these two food streams will have enormously
important implications for agricultural diversity in all of its forms and
manifestations.
This report represents the second installment in our ongoing
investigation of structural change in U.S. agriculture. The first report in this
series, The Industrial Reorganization of Agriculture (June, 1996), provided
a general overview of the basic structural changes accompanying the
industrialization process. Both reports detail ongoing changes in agriculture
and provide information and insight about what these changes may mean
for agricultural sustainability.
The industrialized food stream is characterized by highly concentrated
production and processing sectors and coordination between stages of
production via vertical coordination or contractual arrangements. One
consequence of the vertical coordination and contracting is that the control over production operations by farmers and ranchers is being reduced.
Operators who sign contracts that ensure access to large industrialized
markets are usually given less latitude in selecting inputs and production
practices. During the last decade. the Wallace Institute has received
numerous inquiries about the effects of a more industrialized agriculture
on farmers and ranchers. consumers. environmental resources and the
welfare of rural communities.
Direct marketing of agricultural products is simultaneously rising
at exponential rates around the country. For example. farmers markets
have increased from less than 100 in 1960 to over 2400 in 1996. and by
almost 40 percent from 1994 to 1996. Although these direct markets
deliver a small proportion of total food supplies. they represent an
emergent trend with important implications for maintaining a diverse set
of farms. ranches and processing operations. The direct marketing stream
is characterized by direct contact between producer and consumer.
smaller-scale production operations. and a highly decentralized structure
- opposite traits to the industrialized process. Direct marketing is based
on the concept that farmers and ranchers control the products of their
operations from cultivation and weaning to final sale.
The vitality and growth of the industrial and direct marketing
food streams suggest that both will be with us for some time. Therefore it
is important to understand how these food streams are constructed. and
how they are perceived by producers. consumers and public policy
makers. Also. it is critical to conduct research to inform public policy
needed to foster development paths that incorporate all social benefits and
costs. These and other important issues and questions are addressed in
this report.