Bob Dylan and Contract Theory

As excited as many are about an American folk/rock singer composer winning the Nobel Prize for Literature, the economic prize is also worthy of mention here. First though, my favorite song lyrics of Mr. Dylan:

I ain’t gonna work on Maggie’s farm no more
No, I ain’t gonna work on Maggie’s farm no more
Well, I wake in the morning
Fold my hands and pray for rain
I got a head full of ideas
That are drivin’ me insane
It’s a shame the way she makes me scrub the floor
I ain’t gonna work on Maggie’s farm no more

I ain’t gonna work for Maggie’s brother no more
No, I ain’t gonna work for Maggie’s brother no more
Well, he hands you a nickel
He hands you a dime
He asks you with a grin
If you’re havin’ a good time
Then he fines you every time you slam the door
I ain’t gonna work for Maggie’s brother no more

I ain’t gonna work for Maggie’s pa no more
No, I ain’t gonna work for Maggie’s pa no more
Well, he puts his cigar
Out in your face just for kicks
His bedroom window
It is made out of bricks
The National Guard stands around his door
Ah, I ain’t gonna work for Maggie’s pa no more

I ain’t gonna work for Maggie’s ma no more
No, I ain’t gonna work for Maggie’s ma no more
Well, she talks to all the servants
About man and God and law
Everybody says
She’s the brains behind Pa
She’s sixty eight, but she says she’s fifty four
I ain’t gonna work for Maggie’s ma no more

Many of Dylan’s interpreters suggest this is a criticism of capitalism or of the military industrial complex. That actually leads us to a chat about the economic prize this year, given to Oliver Hart and Bengt Holmström for their contributions to contract theory. (Disclaimer: not only am I not a economist or a lawyer, my understanding of these theories is very casual and centered on my community organizing work. I may over or understate many of these theories and will always edit when better information comes my way. Feel free to add to my knowledge via email as needed.)

Contract theory focuses on the relationship between the parties in a contract, including those which are asymmetrical in terms of information. The world contains scads of examples of information asymmetry: media, police or military, employers, technology providers etc. When one party has access to more information than the other, the fairness of the contract can be questioned. The other issue that is relevant here is what are called incomplete contracts. This covers the likelihood that a contract in present time cannot always cover every possible outcome and so often must be renegotiated at some time; in that case it is possible that renegotiation can off the rails because of lack of trust.

In many ways, this describes much of our alternative food and farming movement impetus. Certainly, the desire for fairness and trust for both producers and for eaters has led to transparency being one our chief indicators.  The heart of our movement is direct marketing  which offers straightforward ways to create fairness between its agents. But even within those models, there can be an information asymmetry. For example, some farmers markets have created systems where information only flows from vendor to market and not the other way around. In others, vendors cling to systems that ask little of them as far as information sharing with the market. One way to gauge whether this is an unequal contract is at the time that the agreement is being changed by starting to ask for sales data or to request changes in other rules over time. The difficulty in negotiating that update may signal the need for a more detailed market agreement that outlines the requirements and benefits for the market and its vendors.

Still, the very nature of the mutual dependency and face to face nature of farmers markets and their vendors can correct any imbalance. Same goes for other type of direct marketing contracts, especially CSAs which began as a elegantly simple contractual relationship between producers and eaters for a single season and a single farm. Now,  when there is an imbalance it often benefits the shopper and not the farmer because many CSA farmers move outside of the implied agreement in the desire to build consecutive-season relationships. An example of this is when a farmer offers a credit for lost crops, even when the contract in a CSA explicitly states that the shopper loses their investment if the crop fails. Or, when a CSA farmer begins to morph into an aggregator of goods from nearby farms and cottage industry producers without creating a updated contract with their shoppers that outlines the new rules of bringing those goods to the shopper.

However, the concern over unfair contracts really “scales up” for me when systems move into intermediate (back door or bin sales) and wholesale (middle-man or pallet sales) contracts. We certainly hope that restaurant owners and wholesale buyers will build contracts with our producers with the same transparency and information sharing as those in the direct marketing sector, but often that has not been the case.

The key to mutually beneficial agreements on all levels of our food work relies on building contextual contracts and incentivizing them for all  involved. What are the main benefits for a producer to sell at a  lower cost to a chef? Well, two might be consecutive sales and the ease in delivery, and yet rarely are these benefits described in agreements for most of our producers when they sell at these levels. What is the main benefit for the buyer? Often it is either the quality of the product or the name recognition of the producer attached to the goods and yet rarely are those benefits understood and outlined in these agreements.

One way to incentivize the fairness of the contract in these situation may be to create a shared asset owned by all of the parties. Another way to make them contextual might be to have an external party monitoring the agreement. Maybe this is where farmers market leaders can grow their influence?

And of course, markets managing transactions through card technology has led  to lopsided contracts with processors. Markets scramble to understand these complex agreements which exist over different eras of management and open markets  to many new layers of liability.  Another issue is that the energy that markets must reserve for reaching and encouraging benefit program shoppers is often wasted by the lack of good information about the client lists from local or federal government authorities. Too many markets I talk to have no idea how and where to reach these shoppers in their area and when you take in the short time that the majority of these shoppers remain on these programs at any one time (also not shared by most government entities), successful outreach becomes even more unlikely. The vendor in this situation is also underrepresented in a fair contract, as most markets – or the processors working directly with farmers – use boilerplate agreements about card processing with their vendors.

So, one can see from just these few examples that center around direct marketing and intermediate farmers how many contract issues arise. So maybe before the alternative food system becomes another one of Maggie’s farms, let’s spend some time on increasing transparency and incentives for everyone’s benefit.

The Daily Caller Is Totally Wrong About Michelle Obama’s School Lunches 

A study in misrepresentation

The data used in the Virginia Tech study ends in 2007 — five years before the first round of new school lunch standards went into place, three years before Congress passed the Healthy Hunger-Free Kids Act of 2010, and two years before Barack Obama was officially sworn is as president.

In short, the data from the Virginia Tech study has absolutely nothing to do with Michelle Obama’s school meals program — and actually shows how much reform for school nutrition was needed.
“We found that the longer children were in the programs, the higher their risk of being overweight,” Wen You, associate professor of agricultural and applied economics in the College of Agriculture and Life Sciences at Virginia Tech and co-author of the study, said in a press release. “The question now is what to do in order to not just fill bellies, but make sure those children consume healthy and nutritious food — or at least not contribute to the obesity epidemic.”

Source: The Daily Caller Is Totally Wrong

New state laws boost farm to school in Louisiana

The first is Senate Bill 184 – the “Small Purchase Threshold” bill. Up until now, any food purchase a school made larger than $30,000 was subject to a complicated bidding process, known as a “formal bid.” This made it difficult for schools to get seasonal and local foods because the process is often challenging for smaller-scale, local farmers. The passage of SB 184 increased the small purchase threshold to meet the federal standard of $150,000, enabling schools to work more closely with small-scale farmers to serve local food to Louisiana children.

The second is House Bill 761 – the “Urban Ag Incentive Zone” bill. This bill creates urban agriculture incentive areas and reduces taxes on land used for urban farming. It greatly reduces expenses associated with acquiring urban agricultural land, and in turn encourages Louisianans to grow more local food.

Source: New state laws boost farm to school in Louisiana

AGRICULTURE SECRETARY PUSHES BACK AGAINST CRITICS OF HEALTHY SCHOOL LUNCH PROGRAM

Markets can help by encouraging members of their communities to write letters to the editors of local papers and by doing Dot Surveys to capture what market goers  think about high standards for good food in schools, and then sending those sheets to your congresspeople. This is a very clear line in the sand to me, with large corporations fighting this necessary change in order to maintain control and reap large profits through using unhealthy commodity products. Let’s educate our communities.

“I’ve heard a lot of the reasons we should take a step back, and roll back some of the standards, and I want to address several of those concerns. One of those concerns is that participation is down and therefore there must be a reason to roll back and reduce the standards. Well the reality is that school breakfast participation is up,” Vilsack said. “Second, free-and-reduced lunch participation is actually up. What is down is paid lunch and that didn’t start with the standards. That actually happened several years before the standards were enacted, in large part I suspect, because of the economic realities we face.”

The Obama administration will also provide $2.6 million for training programs for cafeteria staff and allocate $5.6 million to the USDA’s Smarter Lunchroom strategies that help states develop ideas that will encourage healthy eating. Vilsack also referenced its Team Up for School Nutrition Success initiative, which helps rural schools come up with creative strategies to provide healthy food.

“If you’re a rural school and you’re having a hard time because your student population numbers are down and your state aid may not be what it once was, and the cafeteria is having a hard time, we may set you up with a rural school who has been successful in figuring this out,” Vilsack said. “We provide a mentoring relationship to call a colleague and you can ask, ‘How did you handle this?’ and we now see that is indeed working, and we have now expanded this beyond the deep south.”
<p>Source: <a href=”http://thinkprogress.org/education/2015/09/09/3699577/agriculture-secretary-defends-healthy-school-lunch-program/”>Agriculture Secretary Pushes Back Against Critics Of Healthy School Lunch Program | ThinkProgress</a></p>

Two new laws in LA help farmers

News from Recirculating Farms Coalition:

“Two new bills in Louisiana that support bringing more good food to communities through local agriculture are now law. The first creates a “farm-to-school” program, which allows Louisiana public schools to communicate directly with local farmers to buy food. Previously, for any food item over $25,000, schools had to go through a complicated and difficult public bidding process, which often left out local farmers because they could not participate, be it due to lack of time or technology. Now, schools can connect with farms for any items under the federal minimum purchasing threshold, which is currently $150,000! This will bring more fresh local food to Louisiana schools. As over 65% of students in Louisiana public schools qualify for free or reduced price meals, the new law will promote providing children with fresh food who may get their primary meal, or even most or all of their meals at school.

Pepper Sarah EbonyThe second new law is an urban agriculture incentive, which allows Louisiana cities to reduce taxes on land usedRooftop hydro towers with herbs smaller for farming. The hope is that more landowners will be motivated to allow use of their properties for urban agriculture and share the tax savings with farmers by leasing at more affordable rates. The intent is to increase access to affordable land in cities for farming and thus also increase availability of local fresh food.

Marianne Sen Thompson and Katie cropRecirculating Farms Coalition, working with students from Loyola New Orleans Law, various farmers, food advocates and especially the National Farm to School Network and Louisiana Farm to School Alliance successfully moved these 2 very important concepts through the Louisiana Legislature with Rep. Ebony Woodruff and Sen. Francis Thompson. On August 1st, with unanimous approval of the House and Senate, they both became law.”

Call for Papers for 2015 Farm to Table International Symposium

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Call for Papers

  Farm to Table International (F2Ti), a three-day, multi-track symposium on the policy and practice of food and drink, is currently accepting papers for its 3rd annual program, taking place August 8-10, 2015 at the New Orleans Ernest N. Morial Convention Center. F2Ti features the brightest thought leaders and leading practitioners in the burgeoning farm-to-table movement. F2Ti explores the cultivation, distribution, and consumption of food and drink sourced locally to globally. It takes place in tandem with the Louisiana Restaurant Association’s Annual Foodservice & Hospitality EXPO, an event attracting food and beverage professionals from across the country.

This year’s theme, “A Feast for the Senses,” spotlights the sensual aspects of food and drink at every stage of the agricultural-culinary cycle. Topics will include, but are not limited to, best practices in urban farming, bringing products to market, sourcing locally, enhancing sustainability, and the latest trends and developments in the industry, including food science, security, and safety.

Proposals for educational sessions should correspond to the current theme, “A Feast for the Senses,” and should be designed to fit one of the following educational tracks:

•    Crop to Cup (Brewing, Distilling, Vinting, plus non-alcoholic beverages)
•    Farming and Production
•    Food and Beverage Journalism and Media
•    Farm to School
•    Food Innovation (Science, Technology, Trends, etc.)

Interested presenters should refer to the conference website at www.F2T-int.com for additional information regarding submission requirements as well as the consideration and selection process.

The deadline for submitting presentations for review is February 20, 2015. Presentations for the F2Ti program will be selected by the Farm to Table International Executive Advisory Council.

F2Ti is produced by the New Orleans Ernest N. Morial Convention Center in partnership with the SoFAB Institute and the LSU AgCenter.

Connecting Students and Farmers—Still Trying | FoodAnthropology

This campaign (just down the road from me) has already done amazing work to get the conversation and the organizing started for regional products to be used in the Southeastern Louisiana University campus purchasing process; FYI-this university sits within a very active farming community and many of its farmers sell to nearby New Orleans outlets. The campus student group Reconnect and their academic advisor Dr. David Burley continue to offer as much information and to open as many communication channels as they can to assist Aramark in understanding what the campus wants, but to no avail. In response Aramark has deliberately undermined their efforts with their embargo against meetings and their”food giveaway” tactic! Using markets as organizing wedges can be the best way to keep the pressure on head-in-the-sand institutions; big props to the Reconnect students and to Dr. Burley for keeping these efforts going year after year. If you have any resources or ideas to assist their efforts to put pressure on Aramark, feel free to email them.

Connecting Students and Farmers—Still Trying | FoodAnthropology.