competition – Michael Sykuta

Cartel sounds much sexier than “marketing order”, doesn’t it? But that’s basically what it is…and some of the cartel members are not happy.

It didn’t receive the attention some other recent US Supreme Court cases did, but a couple weeks ago in Horne v. Department of Agriculture the SCOTUS heard arguments about whether mandatory marketing order set-asides amount to federal takings and should be compensated. This case has tremendous potential impact for upward of 30 agricultural products governed by marketing orders run under the auspices of the USDA. These marketing orders date back to the 1930s and were an attempt by agricultural producers to increase the prices they received for the products by disposing of “excess production”. In other words, farmers of the 1930s got the federal government to institute a national cartel for the purposes of raising the price of food…and those cartels continue to operate today.

So how does that work?

Continue reading “Wrinkles In The US Raisin Cartel”

My colleague, Harvey James, recently edited a volume for Springer’s The International Library of Environmental, Agricultural and Food Ethics titled The Ethics and Economics of Agrifood Competition. The book is a collection of essays addressing the adequacy and fairness of agrifood competition and includes pieces from a variety of scholars, from philosophy to sociology to economics. The volume includes several essays addressing conceptual issues and questions around agrifood competition and several studies of specific agrifood sectors from around the globe.

One of the chapters, written by yours truly, is titled “The ‘Fallacy’ of Competition in Agriculture.” The abstract reads:

Agriculture has long been viewed by economists as the best example of an industry characterized by perfect competition. However, the history of modern agriculture is marked with differences about just how competitive the industry is and whether competition is in fact a desirable thing. Present debates about competition in agriculture rally discontent with the competitive environment around the mantra of “free and fair competition.” But this populist ideal presents problems of its own. First, what is the economic meaning of “free and fair” competition? Second, how does the argument about the need for free and fair competition meet with the facts of how the agricultural industry behaves? And finally, what are the ethical implications of arguments for government intervention in the agricultural economy?

A copy of an early draft of the chapter is available here. But by all means, buy the book!