The Relevance of Government Policy in the Industrialized Agri-Food System Konstantinos Giannakas Department of Agricultural Economics, UNL

Changes in Consumer Preferences Technological Progress Global Competition  Gov’t Support to Agriculture Product Differentiation Vertical Co-ordination Industrialization of the Agri-Food System Move from commodities to differentiated products & evolution of vertical market arrangements from farms to consumers

The government can affect: Existence of differentiated products Number of differentiated products (i.e., variety) Degree of product differentiation (i.e., quality differences) Government Policy and Product Differentiation

Grades and Standards under Asymmetric Information - Facilitate supply of high quality experience and credence goods Intellectual Property Rights - Provide incentives for research and development of new products Public Research & Development Banning of New Products Government & Existence of Differentiated Products

Variety depends on the fixed costs of brand-producing firms Gov’t can affect fixed costs through - Subsidized & Public R&D - Regulatory Requirements Number of grades and standards Government & Number of Differentiated Products

Proximity of Different Grades Breadth of Intellectual Property Rights Protection Government & Degree of Product Differentiation

Since the government can affect: Existence and Number of differentiated products Degree of product differentiation it can affect: Equilibrium prices, quantities and quality Firm profits Consumer welfare Government Policy and Product Differentiation

Optimal Regulatory Response to Agricultural Biotechnology (Market & welfare impacts of 1 st and 2 nd generation GM products under different regulatory and labeling regimes in developed and developing countries) Mandatory Country-Of-Origin-Labeling National Organic Program Purity Standards in Food Labeling Laws Food Policy Research at UNL

Food Safety & Optimal Regulation of Credence Goods Impact of Different Organizations (Public Firms & Co-ops) on Innovation & Food Quality Genetic Use Restriction Technologies (Terminator Genes) Impact of Length & Breadth of IPRs Protection on Innovation Impact of GMOs & IPRs Policies on Hunger Food Policy Research at UNL