Are Minimum Quality Standards Acting as Nontariff Trade Barriers?

International Relations/Trade,

Effects of Market Power on the Size and Distribution of Subsidy Benefits: The Case of Ethanol Promotion

The subject of market power is discussed frequently in debates about subsidies for ethanol production, and structural conditions in the industry create a prima-facie case for concerns about market power. This paper develops a prototype model for determining the production and price impacts and distribution of benefits from the U.S. ethanol subsidy when upstream sellers in the seed sector and downstream buyers in the processing sector may exercise market power. The impact of the subsidy is analyzed within a simulation framework for alternative levels of market power. Results demonstrate that the impacts on prices and output are limited for modest departures from competition. Distributional impacts are much greater. Seed producers and corn processors with market power are able to capture relatively large shares of the benefits from the subsidy. A perhaps surprising result is that upstream oligopoly power exercised by seed producers is prospectively as important in influencing the positive and distributional impacts of the subsidy as the much more frequently discussed and debated prospect that downstream corn processors may exercise buyer power.Resource /Energy Economics and Policy,

Focusing on eligible products, not retailer markups, may be a more effective way to contain the WIC food assistance program’s costs.

In new research, Tina Saitone, Richard Sexton, and Richard Volpe look at ways in which costs in the Women, Infant and Children (WIC) food assistance program might be contained. Using WIC purchasing data from California, they find that smaller stores charge significantly higher prices for WIC authorized foods. Using a simulation exercise which eliminates the least competitive, and highest priced vendors, they find that program costs could be reduced by 6.25 percent. However, they suggest that despite these potential cost savings, restricting the products covered by WIC vouchers to vendors’ least cost items may be more effective in reducing program costs

Livestock Protection Tools for California Ranchers

Conflicts between livestock and predators are perhaps inevitable, especially on extensively managed rangelands This publication helps producers evaluate livestock lethal and non-lethal protection tools that may fit their site-specific needs

Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects.

Price transmission refers to the process via which information is transmitted between participants in a market. Focusing on vertical markets such as the food chain, this Address considers developments in theory, methods and data that help economists understand how information is conveyed between food consumers and agricultural producers. Central to this understanding is the increasingly important role played by the food industry (retailing, manufacturing and processing) in price transmission. Not only is the food industry a major source of the price changes that producers and consumers face but it also mediates price signals originating in other parts of the food chain in increasingly nuanced ways, as revealed by highly detailed retail (‘scanner’) data that is becoming progressively available to researchers. While the speed, magnitude and asymmetry of price transmission are valuable descriptors of price adjustment in vertical markets, we should be wary of inferring too much about the competitive setting on the basis of prices alone. Theory-consistent empirical models are a step in the right direction and represent a useful complement to the approaches developed in the New Empirical Industrial Organisation (NEIO) literature which address the issue of market power directly. Being the mechanism underlying food inflation, price transmission also has an important macro-economic dimension, and concerns about competition surface here too. Given the rapidly changing nature of the food industry in many countries, the need to understand the forces shaping price transmission is as cogent as ever

Has Specialization Put a Limit on How Far Cattle Contracting Can Go?

I N 1776 Scottish philosopher Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations, or as it is better known, The Wealth of Nations. In many mundane ways, Smith merely chronicled the burgeoning European industries he was observing; but, in doing so, he helped spread a revolutionary thinking about how factories could take advantage of specialization. Smith’s discussion of a visit to a pin factory has been re-told so often that many people probably know the story without knowing the source. The story goes like this: If you were to make a pin, how would you do it? Well, you need to cut some steel, pound and twist it into a wire, cut the wire, straighten it, sharpen one end, afix a tiny ball to the other, and once, say, 100 were ready, box them up for delivery. Smith records 18 distinct tasks involved in making a pin and opines that an untrained 18th century worker Has Specialization Put a Limit on How Far Cattle Contracting Can Go? John M. Crespi and Tina L. Saitone [email protected]; [email protected] could at best fashion one pin per day. Specialized training increases the output to a dozen per worker so that a factory of 100 workers might produce 1200 pins. However, in the modern pin factory he visited, instead of training one person to do everything, workers were each trained for just one of the 18 distinct tasks, and the factory produced 48,000 pins per day. From automobiles to computers to packinghouses, specialization increases output while lowering cost per unit. This revolution in specialization also leads to increased demand for inputs. As output increases, more and more inputs must be secured, whether those inputs are steel or soybeans, plastic or pigs. But what happens in industries that compete for those inputs? They often become concentrated</p