7 - Market and supply chain models for analysis of food systems

Abstract

Economic incentives are among the key drivers of outcomes and the evolution of food systems. This is particularly true in market economies and for agricultural commodities, but the economic performance of food systems has global relevance. Analysis of markets for food—especially from a systems perspective—provides insights about how to improve outcomes from food systems. In addition, the organizational structures that link different actors in a food system can often be usefully considered from the perspective of supply chains. As a result, economic and supply chain analyses of food systems issues can complement other analytical perspectives and support informed decision making to improve desired outcomes. This chapter emphasizes three commonly-used types of economic and supply chain models: spatial optimization models, partial equilibrium models, and dynamic supply chain models based on participatory group modeling building and system dynamics. For each, we provide an overview of the mathematical structure of the model, discuss the kinds of food system issues for which these models are most appropriate, indicate data needs and suggest priority areas for future development and application. We also illustrate a small number of environmental and food security metrics that can be included in analyses based on these methods.