FARM AND AGRO-INDUSTRIAL ECONOMICS
Learning outcomes of the course unit
The course is organized around five key themes:
• The tools of Agri-food Economics;
• The structure of Farm and Agro-industrial System,
• Food chain, distribution channels and the regulation mechanisms of Agri-food System;
• Agricultural and Food Policy in the European Union;
• Quality, certification and traceability.
a. At the end of the course students will have acquired the knowledge necessary to understand both the operation of an enterprise of the food system as well as the context in which it operates.
b. On the basis of the topics, the student will be able to apply the acquired knowledge in order to carry out management decisions in a company of the food system, regardless of the functional area in which he or she will be employed. Their sphere of action can be developed by initiatives aimed at improving economic efficiency (including the supply of raw materials) to the enhancement of the product / service offered on the market.
c. At the end of the course, the critical thinking skills (independent judgment) will enable the student to deal with the production system in a broader perspective than merely being able to understand the operational dynamics that occur at the supply chain level.
d. The ability communication skills developed will allow to use a consistent technical language and to work in teams in order to interact with various functional levels provided for by the company.
e. The study method also passes through practical exercises to master the sources of statistics and information on the food system, with particular reference to the consumption of food products. These activities are designed to enhance the ability to learn by applying a logical method to identify problems and to criticize analysis of the solutions adopted.
Course contents summary
In developed economies the agri-food system is a complex of interdependent firms that contribute significantly to national income and trade balance. The system includes farms, industrial enterprises and services sectors and is organized into chains and functional sub-sectors. The production is mainly oriented to the food supply for the population, but there are also raw materials for no-food uses (fiber and fuel).
The course looks at main constraints that affect the activities of farms and of the Italian agroindustrial system as a whole: the most important elements in this respect are the evolution of the demand for food, the EU policies and the regulations for international trade provided by the WTO.
The focus is on dimensions and characteristics of the agrifood system with particular reference to contractual and market regulation mechanisms. The course ends with an analysis of information asymmetry which can hamper an adequate commercial exploitation of agrifood products.
1 The tools of Agri-food Economics
1.1 Consumer’s behaviour in food consumption
1.2 The Supply-Demand Sheet
1.3 Food chain definition and its components
1.3. The “Agri-business complex” and the “Input-Output Model”
2 The structure of Farm and Agro-industrial System
2.1 The Sub-Sectors of the Agri-food System
2.1.2 Food industry
2.1.3 Food distribution
2.2 Engel’s law and changes in patterns of food consumption
2.3 The ISTAT survey on household consumption
2.4 Italian foreign trade in agri-food products
2.4.1 Long term trends of the Italian agri-food foreign trade
2.4.2 The deficit in the agri-food sector’s share of overall trade
2.4.3 Structure of Italian agri-food foreign trade
3 The marketing of agri-food products
3.1 The marketing mix for agri-food products
3.2 Prices and asimmetry of information
4 Food chain, distribution channel and regulation of Agri-food System
4.1 Economic function of intermediation and distribution channel
4.2 Agri-food markets
4.2.1 Equilibrium in competitive and monopoly markets
4.2.2 Characteristics of agri-food markets
4.2.3 The market of imperfect competition
4.3 Transaction cost economics and contracts
4.3.1 Phases of transaction and cost of goods
4.3.2 Factors affecting transaction costs
4.3.3 Regulating transactions
4.3.4 Contract economics in the agri-food system (contract and vertical integration)
5 EU agricultural policy
5.1 Pricing policy under “coupled support”
5.1.1 The European tradition in agri-food sector intervention: protectionism and
5.1.2 Formation of the CAP: aims and working of the Common Market
5.2 CAP Reform and “decoupling”
5.2.1 “Decoupling” the support to agriculture
5.2.2 The 1992 McSharry Reform
5.2.3 The 2003 Fischler Reform
6 The WTO and multi-lateral agreements on agri-food products
6.1.1 WTO objectives
6.1.2 The “Most Favoured Nation” clause and the “National treatment” rule
6.1.3 Multilateral and regional agreements
6.2 The GATT agricultural agreement
6.2.1 Role of agriculture in GATT negotiations
6.2.2 The Uruguay Round
6.2.3 The GATT agricultural agreement: terms
6.3 International agreements on non-tariff barriers
6.3.1 Health barriers
6.3.2 Technical barriers
6.4 TRIPS agreement on GI’s
7 Strategies for food quality
7.1 Trademark policies
7.2 Definition and EC regulations on PDO and PGI products
7.3 Collective marks and the policy of voluntary Consortia for the protection of typical
7.4 Certification and traceability in agri-food syste
The main readings are the lesson notes from the course and texts selected by the
-Teaching materials for the course of Farm and Agro-Industrial Economics, Università degli Studi di Parma, Parma, 2011 (available at the photocopy service by the Dipartimento di Economia).
- R. Fanfani: Il sistema agroalimentare in Italia, Bologna, 2009, Edagricole.
- F. Messori F. Ferretti: Economia del mercato agroalimentare, Bologna, 2010, Edagricole.
The teaching modalities are aimed to the training objectives set forth herein.
The course is based on frontal lectures concerning the general issues associated with the operation of businesses and agri-food markets (knowledge, understanding and learning skills).
The teacher will illustrate the meaning of the most common terms involved in the farm and agro-food business (communication skills).
The ability to apply knowledge will be assessed during some applications to be carried out and discussed in the classroom with colleagues (applying knowledge). On these occasions it will be possible to ascertain the confidence in personal judgement and the ability to communicate with appropriate technical language.
Assessment methods and criteria
The assessment of students is done by a written test. The exam consists of open ended written questions .
The knowledge and the ability to communicate with the appropriate technical language will be assessed with three open-ended questions that will be assessed up to 7 points each.
The self-reliance and the ability to apply knowledge will be assessed with an exercise comment to a table or a graph, which relates the problems of the course, which will be evaluated up to 9 points.