D. Johnson, Glenn L. “Why Farmers Out-Produce Market Demand,” pp. 58-62.
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1. Johnson outlines 8 "basic facts" (economic factors) about agriculture that he believes cause farmers to “outproduce the demand for food” in the long-run. What are these basic facts and how do they cause farmers to sometimes produce more than the market is demanding? What are the implications of these basic facts for the behavior of food markets? For other participants in the agri-food system?
2. Why does Johnson disagree with Cochrane's view that technology is the main cause of low prices for agricultural commodities?
3. THINK ABOUT:
If Tomek/Robinson, Cochrane, and Johnson (from last week’s reading) are correct that (a) prices of agricultural products are unstable, and that (b) there may be instability, a cobweb, a treadmill or asset fixity at the farm level of the system, then what are the implications of these factors for farmers, food manufacturers/wholesalers/retailers, and consumers in the short run? In the long run?
Print Source: Crop productivity--research imperatives revisited : an international conference held at Boyne Highlands Inn, Harbor Springs, Michigan, October 13-18, 1985 and December 11-13, 1985 / Martin Gibbs, Carla Carlson, editors. http://catalog.lib.msu.edu/record=b1657898~S39a