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.

From WWII to Syria, How Seed Vaults Weather Wars 

But though the need for seed banks is often associated with more stereotypically environmental, even futuristic, cataclysms (climate change; disease; pesticide-resistant insects) their history is inextricably tied up with something more banal and present-day—war.

…virtually no conflict has gone by without a devastating loss of seeds, often mitigated by a heroic rescue or underscored by a tragic attempt. Afghani mujahideen destroyed Kabul’s national seed collection in 1992. (Local scientists managed to smuggle some seeds into the basement of a few city houses, but by the time they returned to check on them a decade later, looters had dumped them on the floor in order to steal the storage jars.) During the Georgian civil unrest of 1993, just before the country’s Sukhumi Seed Station was destroyed, an 83-year-old botanist named Alexey Fogel escaped into the Caucasus Mountains with its entire lemon collection. Scientist Alexis Rumaziminsi, now known as the “bean boffin of Rwanda,” protected the many varieties of beans in his research plots during 1994’s civil war and genocide. The US-led invasion of Iraq resulted in the razing of the country’s national seed bank in Abu Ghraib—not to mention the implementation of American-style seed laws, which mean that if Iraqis want to buy new seeds, they will have to pay for yearly usage licenses.

Source: From WWII to Syria, How Seed Vaults Weather Wars | Atlas Obscura

The Law of Seeds

The Law of Seeds” is a Bill of Rights for seeds, created by Beth Grossman. She scribed these rights with a quill pen on eleven vintage seed bags that are also painted with images of the stages of germinating corn from seed to mature plant. This traveling art exhibit evokes an appreciation of the wonders of seeds and the importance of protecting this precious source of our food chain. Brisbane, CA was the first U.S. city to adopt this Law of Seeds as a Proclamation. As the exhibit travels, the artist hopes to encourage other cities to develop, adopt and enforce rights of nature.

Great Places Awards, Fayetteville 2030: Food City Scenario

Big fan of the Fayetteville food work I have seen and heard about.

The EDRA 2015 Place Planning Award recipient, “Fayetteville 2030: Food City Scenario,” asks the question, What if Fayetteville’s projected growth enabled the city to sustain its food budget through a local urban agriculture network? And what kind of infrastructure would a city have to develop if it cultivated a local food system? While the large metropolis sponsors the most efficient carbon footprint per capita, moderate scale cities like Fayetteville are better equipped to evolve resilient food-secure environments given the interconnectedness and metabolic alignment among their natural ecosystems, infrastructure, and urban fabrics. Food City’s transferable set of planning tools, established by the University of Arkansas Community Design Center, not only assists to embed high-quality food production into American urbanism, but shows how urban infrastructure can also deliver important ecosystem services.

All of the 2015 Environmental Design Research Association awards here

Open source gleaning model helps NC market farmers address hunger issues

I had the great pleasure to become acquainted in 2012 with this innovative program that is closely linked to the North Carolina farmers markets and individual farmers to get food flowing to more people- but this model made sure that it was NOT at the expense of farmers businesses. Their Donation Stations allows customers to buy an extra share to donate to those in need and also allowed farmers credit for any donations that they made. Their wholesale work to get more agencies to buy regional food is also extremely important.

Open source model helps NC solve hunger problem | opensource.com.