Kiehl, Elmer R.

English

Research Papers in Economics

THE  FOOD  COMMISSION  REPORT
Elmer  R.  Kiehl
Dean,  College  of  Agriculture
University  of  Missouri
My  first  reaction  to  the  output  of  the  Commission  was  one  of
disappointment-disappointment  in  that  easily  digested  suggestions
or recommendations,  which  I  would  have  expected,  were  not  avail-
able.  The  prescriptions  for  problems  did  not develop  for  several  ob-
vious  reasons.
The  task  before  the  Commission  was  monumental.  It  was  to
study  and  appraise:
1.  Actual  changes  during  the  past  two  decades  in  various  seg-
ments  of the  entire  food  industry.
2.  Projected  changes  based  on  a continuation  of present  trends.
3.  The  kind  of  food  industry  that  would  assure  efficiency  of
production,  assembly,  processing,  and  distribution;  provide
appropriate  services  to  consumers;  and  yet  maintain  accept-
able competitive  alternatives  of  procurement  and  sale  in  all
segments  of the industry.
4.  Changes  in public  policy  affecting  the  organization  of  farm-
ing and  food  assembly,  processing,  and  distribution,  and  the
interrelationship  between  the  segments  of  the  food  industry
that would  achieve  the  desired  distribution  of  power  as  well
as desired  levels  of efficiency.
5.  The  effectiveness  of  services,  including  marketing  news  and
regulatory  activities  of  the  government,  in  terms  of  present
and  probable  developments  in  the industry.
6.  The  effect  of  imported  food  on  U.S.  producers,  processors,
and  consumers.
This  was  truly  a  broad  assignment.  The  action  of  the  Congress
calling  for such  a study indicated  that  policy leaders  and  makers  ap-
parently  believed facts  and data  were  not available  in the form  nec-
essary  to make  policy  evaluations.
The six  charges  to the  Commission  involved  a mixture  of assign-
ments.  The  first  assignment  was  data  collection-a  massive  task.  It
35recognized  deficiencies  in data from  the census,  college  departments,
and  the  United  States  Department  of  Agriculture.  The  second  as-
signment  was  the  evaluation  of  data.  Obviously  this  was  a  tremen-
dous  task.  Any  of  you  familiar  with  research  knows  it  is  easier  to
get data than to evaluate them.  Third,  a theoretical  structural frame-
work  was  to  be  developed  to  make  it  possible  to  evaluate  the  data
in light  of previous  and prospective  trends  in  the food industry.  The
theoretical  structural  framework  required  for  evaluation  of  data
in  the  full  range  of  time  dimensions  was  not  fully  developed.  The
fourth  assignment  was  to  make policy  suggestions  and  recommenda-
tions-in  other  words,  value judgments-over  and  above  the  evalu-
ation  of  data.
Can  you  imagine  doing  all  these  tasks  in  essentially  a  year  of
productive  work?  This  was  about  the  amount  of  time  available.
Most  of  our  experiment  station  projects,  at  least  at  our  institution,
have  a three  to  five  year life  and  deal  with  very,  very  small  portions
of  the  food  industry.  Many  of  these  projects  are  renewed  after  five
years,  as  a  good  many  of  you  know,  because  this  is  an  extremely
complex  area.
Second,  I  was  disappointed  also  that  the  Commission  did  not
treat  each  of the  six charges  equally  in  terms  of effort.  Probably  the
most work  was  done  on one,  four,  and  five.  The others  received  less
attention  essentially  because  of  lack  of time  and  the  sheer  task  that
was  ahead  of  us.  We  did  not  deal  comprehensively  with  items  two
and  three,  projection  of  changes  likely  if  present  trends  continue
and the  kind of  food industry  that would  assure  efficiency  and com-
petitive  alternatives  to  each  segment.  We  gave  limited  attention  to
six, too,  which dealt with impact of imports  on the  U.S. food industry.
Parenthetically  I might add  that the interest  and  concerns  of  the
Commission,  members  and  staff  alike,  probably  changed  uncon-
sciously  about  last  October.  When  the  world  food  crisis  became  ap-
parent  last  September  and  October,  there  was  a  lot  of  discussion
which probably  lessened  the  sense  of  urgency  about  the problems  of
the  food  industry.  The  Commission  was  conceived,  of  course,  in  a
period  of  surpluses  and  the  prospect  of  further  mounting  surpluses.
The change  in the  situation  might  have  led  to  a  change  in  orienta-
tion of the  effort.  There  appeared  to  be  considerable  and  convincing
evidence  that  we  did  have  a  highly  efficient  and  dynamic  food  in-
dustry  and  that  the  food  industry  would  be  a  powerful  weapon  in
the world food  crisis in the  decades  ahead-probably  the  most pow-
erful  element  with  respect  to  our  position  in  this  country  against
hunger  in  other  sections  of  the  world.
36Third,  I  was  disappointed  that  we  did not  develop  further  ideas
on  the  nature  of  the  impact  of  full-scale  economic  integration  in
the food  industry.  I was  impressed  with  the fact  that  the  traditional
role  of  prices  and  the  pricing  system  as  an  allocator  of  resources
between  functions  and  segments  of  the  food  industry  practically
drops  out  of  the  picture  in  the  report.  Supply  responses  essentially
become decisions  of a few men in a few industries-supply  responses
which have  differential  effects  in different  geographical  areas.  With-
drawal  and expansion  decisions  are far  removed  from local  decision-
making  processes  of producers,  local  bankers,  dealers,  etc.
Integration  in  the processing  end  of  the food  distribution  sector
appears  to  be  increasing,  and  its  implications  for  agricultural  pro-
duction are  not clear.  We  see  that there  are  real issues  here  relating
to  the  structure  of  the  entire  U.S.  economy.  However,  we  were
dealing  only with  the  food  industry.  Will  prices,  or  will  the pricing
system,  be  retained  or  have  a  role  as  a  resource  allocator  in  the
traditional  sense  when  we  have  a  highly  integrated  system?  What
are  the  alternatives?
Fourth,  I was  disappointed  that we  did  not spend  more  time on
questions  of  conglomerate  organization  and  the  impact  of  this
structural  realignment  on the  competitive  interrelationships  between
different  segments  of the food industry.  I think  this is crucial.  Promi-
nent economists  as  well  as  knowledgeable  persons  and  legal  people
offered  testimony  relating  to  this  question,  but  nothing  was  really
developed  concerning  how to  deal  with  it.
I  wish  to  comment  briefly  on  the  implications  of  the  issues
emerging  from  the  study  of  the  food  industry.  In  my  view,  as
desirable  as the  general  Commission  report  may  have  been  in  com-
pliance  with  the statute,  I believe  the real  issues have  yet to be fully
identified.  The  solid  work  of  the  Commission  is  in  the  technical
reports.  It  was  the  data  collection  aspect  of  the  whole  activity  that
provided  the  lasting  value  of  the  effort.  Many  of  you  have  heard
marketing  researchers  say  that  they  cannot  get  data  on  this  or  that
question from cooperating firms  or the industry.  The  Commission,  of
course,  had  the power to  obtain  this  data,  and  I  might  say  the  data
were  obtained  with  the  full  cooperation  of  the  industry  segments
involved.
Another  consideration  is  that  issues  have  to  be  raised  in  the
context  of  a  theoretical  framework  and  a  value  system.  This  re-
mains  yet  to be  done.  The  essential  theoretical  framework  required
for  evaluation,  I  fear,  has  not  been  fully  developed  by  economists,
37political  scientists,  and  others  involved.  A  value  system  profile  and
framework  must be  developed  so  that it involves  the  political  aspira-
tions  of  our  society  and  all participants  in  the  food  industry.  This,
of course,  the Commission  itself  could  not do.  So  I am  saying  that  a
new  package  of  issues  and  recommendations  is  really  not  available
from the report.
I  want  to  suggest  that  the  next  step  is  homework  for  the  re-
searchers  and  the  USDA  and  the  research  and  extension  personnel
of  the  land-grant  colleges.  They  now  must  become  intimately  in-
volved  in this process.  I want  to repeat  that the homework  is  ahead.
The  identification  of  issues,  the  debate  of  them,  and  the  resolution
of  them,  involving  industry  groups  and  others,  are  yet  to  be  done.
The  task was  simply  too monumental  to be  wrapped  up  in one neat
package  for  educational  use  with  clientele  groups  on  a  wholesale
basis.  I fear  this  is  what  too  many  people  expected.  The good  work
of  the  staff  in  the  technical  reports  is  an  excellent  foundation  on
which  to  build.  True,  the  Commission  had  power  to  obtain  data
and information  not  otherwise  available,  but time  and  circumstances
prevented  full  digestion  of  some of  the  data.  The  neat  package  did
not become  available;  and,  in the  best American  tradition,  I  believe
this  is  good,  if  I might  use  a  value judgment  now,  in that the  Com-
mission did not provide  us with  the final report but with useful  basic
information  for  the  development  of  appropriate  research  and  edu-
cational  programs.
The  finality  of  the  type  of  report  that  some  hoped  for  would
have  been  a  disservice.  It  would  have  precluded  further  intimate
contact with this  whole  activity for  the  entire  array  of  talent  outside
of the  Commission  and  its  staff.  As  I  see  it,  this  is  the  stage  we  are
about to launch, and I urge those in policy education research to make
their own independent  analyses  and  studies  so that  the  evolutionary
and dynamic  character  of the U.S.  food  industry  can  be retained  and
strengthened.
One  additional  thought  is  that  I  was  and  am  impressed  that
the  Commission  was  composed  of  dedicated  and  knowledgeable
people.  The  Commission  members  were  people  of  good  will,  and
matters  could be  discussed  by  the  Commission  with  good  taste  and
grace.  In my  opinion,  the  staff  was  excellent  and  wholely  dedicated,
but  again  I  re-emphasize  that  the  task before  this  small  group  was
monumental.
I  believe  that  the  activity  of  the  Commission  was  on  balance  a
highly  useful  one  and  did  uncover  facets  for  further  study  and
38analysis.  Now  that the  Commission  no longer  exists  and  as  I  reflect
upon  the  past,  I  believe  this  was  a  highly  salutary  and  worthwhile
activity.  We  had  the  good  fortune  of  having  the  excellent  coopera-
tion  of  hundreds  of  individuals  in  firms  of  the  food  industry;  and
this  reflects  favorably,  I  believe,  on  their  attitude  toward  the  com-
plexity  of  the  entire  food  industry.  They  wished  to  contribute  to
increased  understanding  of  the  food  industry.
39

THE FOOD COMMISSION REPORT

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics