Revisiting the "hot potatoes" of agri-supply chains: exploring interactions and tradeoffs in Colorado potato markets and farm-to-school procurement
Date
2020
Authors
Love, Erin, author
Thilmany McFadden, Dawn, advisor
Bellows, Laura, committee member
Countryman, Amanda, committee member
Jablonski, Becca, committee member
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Abstract
Agricultural and food systems generate externalities, some of which have been linked to achieving economic development goals in rural areas. Historically, agriculture has occupied an important role in rural development policy. But not all agricultural and food supply chains have the same economic linkages and impacts on their communities. We hypothesize that certain types of agricultural and food systems structures and processes are better suited to achieving the goal of local economic development, depending on the location and nature of the market activity. The literature suggests that there is a tradeoff between efficiency and positive externalities in agri-supply chains, which we call the "Efficiency-Externality Tradeoff." We analyze the Efficiency-Externality Tradeoff in two essays. First, we conduct a time-series econometric analysis of Colorado and national potato supply chains. Second, we develop an optimization model of school food procurement, with emphasis on supply chain route. We find that Colorado farmers face asymmetric price influence when participating in national commodity potato markets, implying they have low bargaining power and high downside risk with regards to prices. We also find that in the absence of policy mechanisms, school districts are unlikely to participate in local food procurement, which previous work has documented has a positive impact on local economies. We frame farmer bargaining power and local economic development as potential positive externalities of local and regional supply chains, and since the latter are sometimes less efficient, exploring the tradeoffs between the "costs and benefits" is of interest. Our results indicate that mainstream supply chains, which tend to be more efficient and cost effective, may offer fewer positive externalities, and the effectiveness of policy levers to incentivize positive choices varies. This finding has implications for economic development policies, particularly those targeted at strengthening economic activity in agriculturally dependent areas.
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Subject
externality
food systems
supply chain
farm-to-school
economic development
potato