Performing Department
Applied Economics
Non Technical Summary
The proposed research in the renewed regional project will address new and emerging consumers' concerns on process attributes and cultural dimensions of specialty crops, complementing previous research, such as those of local food, the carbon footprint of food, and food safety (post-pandemic focus). It will also address the rapid technological progress in specialty crop production, such as genomics and new breeding methods, and their use in the production of novel specialty crops. These imply tradeoffs for consumers between benefiting from new traits, but at the cost of accepting new technologies with which they are not comfortable. Finally, the aftermath of the COVID-19 pandemic will be significant. The balance of preparation and consumption of food away from home and at home has changed dramatically, including for foods based on specialty crops. Supply chains for specialty crops and processed food based on them will be reorganized to save on labor and to reorient products to be consumed at home rather than in restaurants and food services. These consequential changes will be analyzed.
Animal Health Component
70%
Research Effort Categories
Basic
30%
Applied
70%
Developmental
(N/A)
Goals / Objectives
Analyze the relative benefits and costs for fruit, vegetable, and other specialty crop farmers of: a) the adoption of production and processing practices (e.g., organic, biodynamic farming, adaptation to climate-extremes) and novel technologies at the field level (i.e., mechanical harvesting, biodegradable plastics, gene-edited varieties) that address both the changing production environment and the consumer preferences and needs that will be explored in Objective 2; and b) government and industry-led programs aiming to address consumer preferences and needs while guaranteeing the viability of farm businesses (e.g., certifications, plastic pollution regulations, Farm Workforce Modernization Act).
Investigate the policy and market factors that affect the demand for fresh and value-added specialty crop products, including consumer understanding, perceptions, and behavioral response to non-conventional systems of agri-food production (e.g., organic, biodynamic, hydroponics, vertical growing), and the production and processing practices, and some of the novel technologies explored in Objective 1; commodity and regional marketing programs; voluntary labeling schemes (e.g., Fair Trade, Bee Friendly Farming, SIP Certified, geo-identified, integrated or â¿¿stackedâ¿ labels); product country of origin; international trade, food safety incidents and food safety risk-reducing practices (e.g., traceability systems), among others.
Identify drivers and implications related to the use of various specialty crop marketing channels at the local, regional, national and international scales, including profitability of participation by farmers and intermediaries; benefits and costs for consumers and communities to participate; impacts of various sources of risk and uncertainty; the role of institutional marketing innovations; presence and impacts of market power; implications of supply chain management practices; resiliency of supply chains to shocks; and costs and benefits of policies that impact specialty crop marketing channels.
Project Methods
Objective 1 We will address producers' acceptance and willingness to use production and processing practices, novel technologies, and technological innovations that address consumer needs. We will also evaluate the short- and long-term costs and benefits of adopting these practices and technologies at the farm and industry levels. In addition, we will explore the relative benefits and costs to producers of government and industry-led programs, as well as the impact these programs have on farmers' production and technology adoption decisions, global supply, trade, and consumer preferences. Although we will cover a variety of topics, we will make a particular emphasis on labor issues faced by the produce industry, as this issue is one of the most important issues facing this industry, and is one that has a direct impact on produce availability, wages, and, ultimately, prices paid by consumers (Hertz and Zahniser, 2013; Richards, 2018).We will use a broad range of methods, including experimental economics with choice experiments and other survey methods, like the ones used in Velandia et al. (2020a, 2020b) to evaluate the factors correlated with the use of biodegradable mulches among fruit and vegetable farms and Mulibi et al. (2019) to assess the factors influencing the adoption of sustainable agricultural practices; partial budget analysis (Velandia, Wszelaki, and Galinato, 2019); feasibility studies; risk assessment; and econometric analyses using data collected from surveys and other sources.Partial budget analysis and feasibility studies will use innovative crop budgets. Three innovative components of these budgets will include: 1) scale-appropriate information that addresses different farm sizes and different targeted customers; 2) revenue streams that are closely linked to WTP studies to highlight how changes in consumer demand affect farm-level profitability; and 3) interactions between biophysical, climatic, and management factors and the costs of production. We will combine field trial, on-farm experiment, and secondary data to develop deterministic budgets (Velandia, Wszelaki, and Galinato, 2019). We will also use stochastic budgeting to analyze the risk associated with producer's decisions (Awondo et al., 2017).Objective 2We will use a variety of demand analysis methods to understand and predict consumer behavior in the specialty crop markets of interest.We describe these methods according to the main goals of demand analysis - forecasting, measurement, and testing the impact of policy or marketing strategy changes on demand (Chintagunta and Nair, 2010). Demand estimation and forecasts are important for predicting future firm or aggregate market sales and growth, firm inventory planning, and revenue and profit consequences of alternative marketing strategies (e.g., pricing strategies) and can be used to understand consumer reactions to novel products or changing market conditions. Analyses focused on measurement assess a variety of measures, from observed data such as consumer welfare, beliefs, risk, or other preferences. These analyses can be structural, with explicit assumptions on preferences and information on consumer characteristics (i.e., demographic information, beliefs, preferences), or impose minimal structure such as experiments which use randomized control trials with a marketing intervention as the treatment. A third option is to use nonparametric models of demand. When combined with information on exogenous variation in demand, nonparametric approaches can address some common issues with the approaches described above, and measure casual effects with minimal assumptions ("causal-effects" or "reduced-form" analyses). Finally, analyses may be focused on testing or evaluating the impact of policy, or marketing strategy or tactic changes on consumer demand for raw or processed fruit and vegetable products.It is worth noting that much of the consumer demand analyses that will be undertaken by S-1067 members will be tackled through interdisciplinary research or which have important interdisciplinary implications. A variety of research techniques can be used to offer insights into consumer preferences and tradeoffs, which, in turn, can inform the development of new production practices, plant varieties, and fruit and vegetable products, and marketing techniques. Economic experiments, for example, can make use of sensory evaluations to understand how much consumers value taste, mouthfeel, and other palatability attributes, and preferences can adapt to repeated exposure (experience). A collaboration among project members in Washington and New York (among other states) is using economic approaches to estimate table grape consumers' trade-offs between fruit quality and production characteristics, and the acceptability of novel technologies such as gene editing. Another collaboration between project members in Washington and Mississippi is assessing consumers' most preferred sensory quality traits for blueberries, and processed cranberries.Objective 3To undertake this objective, our S-1067 members will engage in numerous types of analysis. Descriptive assessment of current fruit and vegetable market structure and production trends can provide a benchmark for evaluation of changes in marketing strategy, either ex-anteor ex-post (e.g., Jablonski, Sullins, and Thilmany McFadden 2019). Case studies, anecdotal evidence, literature reviews, qualitative analyses, and econometric analyses are all tools also likely to be employed in descriptive models, and econometric analyses can also be employed in both descriptive models and causal inference (e.g., Boys and Fraser 2019; Cleary et al. 2019; Plakias, Demko and Katchova 2019). Simulation methods may adopt game theoretic techniques to provide an analysis of strategic interaction between agents in marketing channels. Game theory allows such interactions to be modeled in a context of imperfect competition and can be used to analyze agents' behavior in domestic, bilateral, or multinational policy setting arenas (e.g, Rickard et al. 2018). Results will contribute to a better understanding of the underlying market structure in fruit and vegetable industries and may increase the multi-state research effort of transferring insights to other cases, firms, or industries. Specific examples of how these methods will be employed by current members are included below.Qualitative research undertaken by members, including interviews and participatory supply chain mapping activities with specialty crop supply chain stakeholders, will help us better understand motivations and barriers of these stakeholders in complex local and regional supply chains and marketing channels.A wide variety of econometric methods will also be used to analyze primary data and secondary data collected from food system stakeholders. New primary data will be collected via surveys, and research will facilitate the collection of transaction data from specialty crop marketing venues, including farmers' markets and produce auctions. Also, members will continue to develop and update new data products that can be used in a variety of analyses by all of our S-1067 members.In addition, simulation models calibrated with data on trade flows, agricultural production, marketing practices, and other variables will be used by researchers in states including Indiana, Ohio, and Nebraska to conduct ex-anteanalyses to understand the possible impacts of policies or other shocks that may affect specialty crop marketing channels and conduct benefit-cost analyses to inform supply chain stakeholders. Researchers in Indiana are also conducting a cost-benefit analysis of expanding marketing windows for specialty crop producers.