Proceedings: Discussion

Abstract

The authors of three papers presented at this session are to be commended for (a) providing their insights and views of structural changes that have and are occurring in food industry, (b) providing their assessment of implications of these changes, particularly with respect to their impact on future conduct and performance of industry, and (c) suggesting alternative public policies which, if implemented, would attempt to improve efficiency and performance of industry from standpoint of general public welfare and environment for individual decision makers (especially consumer) at various stages between input sector and consuming sector. Each of authors, I believe, would generally define food industry as the complete chain of that produces inputs and commodities, processes and markets food, e.g., farm input, farm producer and food processing, wholesaling and retailing industries as outlined by Walters. However, Padberg's paper deals almost exclusively with processing, marketing, and consumer sectors. Obviously, time and space limitations prevented authors from providing complete coverage and detail with respect to this complex industry in this broad context. The three papers taken together do, however, provide detailed characteristics of various sectors of this important, encompassing industry. Basically, each author would characterize input sector and processing, wholesaling, and marketing sectors of industry as having an oligopolistic characteristic. Walters argues that processing sector might be divided into two categories, one category processing homogenous products (commodity processors) which tends to be competitive and a second category processing package goods which is oligopolistic. Walters also cites a study by Heid pointing out that current trend towards fewer and larger farm units may bring into question use of purely competitive model in farm sector for some commodities in selected regions of country. Each of authors also proposes additional antitrust studies, monitoring, and remedial action if such studies identify structures that lead to antitrust violations or inefficiencies in industry. Both Dahl and Padberg recommend establishment of a consumer protection agency and Dahl would include producer protection as an additional responsibility of such an agency. Dahl also suggests a review and study of regulatory laws applying to agricultural inputs and products that license or restrict in an attempt to unify these regulations into a set which maintains adequate consumer protection, safety, etc., at minimum cost in each sector of industry. Finally, Dahl suggests comprehensive policy planning for food industry. He states that a systems approach to U.S. food and fiber policy is long overdue. Because of complexity of food industry and numerous agencies, regulatory requirements, etc., which have an impact on inputs and products in each sector of industry, I find this suggest on of comprehensive policy planning of critical importance. It would appear that any comprehensive policy-planning program of food industry could, should, and would include various parameters and suggestions contained in each of three papers presented. Such a policyplanning program might provide Congress as well as decision makers within industry with more complete information of likely impact, including costs and benefits, of changes taking place within and external to industry. Without such comprehensive policy planning at national level it will become increasingly difficult for Congress and individual decision makers within industry to supply adequate, safe food and fiber efficiently and at reasonable costs. Because such policy planning has not been done, it is now difficult to determine added costs associated with food and fiber products resulting from regulations imposed by FDA, This paper was presented in a session entitled Structural Changes in Food Industry: Implications for Future Public Policy. James E. Martin is Dean of Agriculture and Life Sciences at Virginia Polytechnic Institute and State University.