Power, Fairness and Constrained Choice in Agricultural Markets: A Synthesizing Framework

Abstract

The (un)fairness of agricultural markets is frequently invoked, especially by farmers. But fairness is difficult to define and measure. In this paper we link fairness and power with the concept of constrained choice to develop a framework for assessing fairness in agricultural markets. We use network exchange theory to define power from the dependencies that exist in agricultural networks. The structure of agricultural networks and the options that agricultural producers have to participate in agricultural networks affect the degree to which they are dependent on others within the network. Dependency, in turn, affects the choices that agricultural producers have. We consider both the number and nature of these choices. We argue that constraining or limiting choices — both in number and in their type — violates principles of justice. Importantly, network exchange theory provides a method for assessing constraints in choices and, hence, the fairness of agricultural markets. Such an assessment could potentially lead to new policies that safeguard the liberties of marketplace participants. We present a brief case to illustrate how this framework can inform on the fairness of agricultural markets, and conclude with considerations of what this means for policy, particularly in the arena of anti-trust.

Keywords: Agrifood structure, industry concentration, networks, power, justice, fairness, broiler industry

JEL Classification: D63, Q13, Q18, L14, L40, L66