Question

Agribusiness

In 2013, American consumers spent over $1 trillion on food for at-home and away-from-home consumption. While the marketing share percentage of the farm-food marketing bill has stayed relatively the same over the years, the dollar amount has increased from $441 billion to $852 billion from 1993 to 2013. What is included in the marketing share of the farm-food marketing bill? How does the marketing bill affect consumers? How does the marketing bill affect farmers?

Answer 1

Part A

We know that the farm food marketing bill means the proportion of consumer food dollar that goes to the farmer for raw products and that goes to the food industry for marketing those farm products to end consumers. The marketing includes value added from farm producing, packaging, transportation, retail trade food services, energy, financial and insurance, and all other categories to make agricultural products ready for the consumers. In 1993 to 2013 the marketing share increased from $441 billion to $852 billion means that there is continues increases in farm productivity which keeps the farm price relatively low. It also increases consumers demand for convenient, highly processed food products, increases food process away from home, and also increases the components of marketing bill includes labour, transportation and energy.

Part B

The increases in farm productivity, which is increased the demand for consumer good. In the view that the total farm -bill the wholesale trade, retail trade, and food services sector contribute over half of the value added to the consumer food dollar. In the common view is that without the contribution in transportation, energy, packing, advertising, the product would not reach the end consumers.

Part C

The increase in farm food bill also affects the farmers. The main factors of production to add value when transform agricultural products to food products is salary, property income, output taxes and imports. The salary and benefits comprise half of the food dollar. The property income comprises machinery, equipment, structures, natural resources, etc.