Friday, July 29, 2011
Posted by D. Daniel Sokol
Sheldon Kimmel (DOJ) has an article on The Illusion of Anticompetitive Behavior Created by 100 Years of Misleading Farm Statistics.
ABSTRACT: The share of U.S. consumer food-spending that farmers received (the “farm-share”) fell steadily from 48% in 1913 to only 20% by 2000, prompting repeated investigations into who might be to blame for that decline. Similar alarms come from the other standard measure of how markets treat farmers, the farm-retail, “price spread.” However, this paper explains the biases built into these measures: Both of these measures are distorted by purely nominal changes. This paper introduces a better measure of how markets have treated farmers, and shows that, if measured properly, the farm-share of total consumer food costs has been stable.