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Abstract
Measures of productivity, for agriculture as well as
for the private sector of the economy as a whole,
have a long and fruitful history in helping to interpret
movements in output, prices, and factor costs.
To an economist who is familiar with productivity
research, and who has watched the continuing rise
in marketing charges for farm products, the inevitable
question is: What can measures of productivity
tell us about the continued rise in the Farm-Food
Marketing Bill and the Farm-Food Market Basket
(farm-retail spread)? 1 This paper is only a step in
that direction (1) 2—it presents some new information,
and it brings together our major findings on
productivity in factories that process farm food
products (10). (Similar work on distribution of
farm foods is now underway.) Within the last
decade, food processing costs in factories have accounted
for roughly a third of the Farm-Food Marketing
Bill. The eventual product of this area of
research should advance our knowledge of supply
relations for marketing services for food and, therefore,
better our understanding of the relationship
between consumer demand for food at retail level
and the marketing system's derived demand for agricultural
products at the farm level. Briefly summarized,
the principal finding in this paper is that,
during the post-World War II period, food manufacturing
as a whole was an average sector with
regard to total productivity and price increases—the
postwar rise in the price of food processing services
was part of the general price rise in the economy
as a whole. The author expresses his appreciation
to Jerome Mark, Frank deLeeuw, William Wesson,
Forrest Scott, and Allen Paul for their helpful
comments.