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 an 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, especially those which are asymmetrical in terms of how much information each side has access. The world contains scads of examples of information asymmetry: citizens and media, citizens and police or the military, employees-employers, consumers and technology providers etc. When one party has access to more information than the other, the fairness of the contract should be questioned. The other contract issue relevant to markets and farmers 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 th, t case it is possible that renegotiation can go off the rails because of lack of trust.

In many ways, these scenarios describe much of what drove farmers and their advocates to the creation of the alternative food and farming movement.  The desire for fairness and trust for both producers and for eaters led to transparency being one our chief indicators of success and in keeping the heart of our movement in direct marketing channels which offer simple ways to create fairness. 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.

Still, the very nature of the mutual dependency and face to face nature of farmers markets and their vendors can usually correct these small imbalances. Same goes for other type of direct marketing contracts, especially CSAs which began as simple contractual relationships between producers and eaters for a single season and a single farm. More recently, some CSA relationships have become imbalanced: like when a farmer offers a member a credit for a bad season, even though 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”  when systems move into intermediate (back door or bin sales) and wholesale (middle-man or pallet sales) contracts. Here, I’ll focus on intermediate sales, as wholesale sales are a whole other kettle of fish and in most cases, are beyond the capacity or interest of small family farms. (The reason for that is that few of those systems have really changed anything about their purchasing policies or their regulations for small farms, and so the costs and risk are all on the side of the farmer still.)

The hope is still that restaurant owners and wholesale buyers will build contracts with 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, consistent sales and the ease in delivery (meaning the farmer can deliver when most convenient to him or her and get quick payment), 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 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, such as a mutually owned cold truck or even branding. 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 market 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.

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Wrapping up 2015 with Food First

The third of 3 organizations that I am highlighting today. Of the three, this is the international organization, and one that has created some very thoughtful and provocative positions for food organizers. The democratization of all supporting systems is vital to winning food sovereignty and Food First has done admirable work on that level for 40 years.
The sophistication of their work on environmental issues, social justice, monetary policy, labor policies and much more allows all little markets and gardens to be a integral part of a huge movement. As someone who has seen many movements splinter or become proprietary before they matured enough to have wide impact, I am thankful to those who remember and work so that this rising tide carries all boats.
And way too often, those of us building those fulcrums of local food systems-farmers markets- focus only on doing and spend too little reflecting or analyzing on what has worked and what hasn’t. Lucky for us, Food First is on top of that too.
Through Food First, I have learned about dozens of inspiring campaigns across the globe and had access to some of our most influential thinkers. Spending a little time at the vision level and checking out what is happening at the global level is what makes working locally entirely satisfying. I hope that you find Food First as useful as I have.

Source: World Hunger: Ten Myths : Food First

Slow Food Int’l Food Sovereignty Tour with Eddie Mukiibi

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Where & When

will visit five American cities where disparities in power and wealth trigger an inspired use of food to grow leadership, self-reliance and cooperation. Stops on the tour include universities, schools and school gardens, and urban farms.

November 5-18, 2015: New York City, Detroit, New Orleans, Petal, and Sacramento. Learn more about the public events listed below on theNational Slow Food Calendar:

  • November 5-7 in New York City
    • Thursday, November 5: Kelso Beer Tap Takeover at the Berg’n Beer Hall (6-8pm)
    • Friday, November 6: A global discussion at NYU followed by light refreshments and Ferrari sparkling wines (5-7pm)
  • November 7-10 in Detroit, MI
    • Sunday, November 8: A discussion at the Spirit of Hope Church about youth and food with Detroit youth activist Kadiri Sennefer followed by soup and bread (6-8pm)
  • November 11-14 in New Orleans, LA
    • Wednesday, November 11: Slow Food New Orleans Happy Hour at Café Carmo (6-8pm) featuring under-utilized seafood species
    • Saturday, November 14: Ring the opening bell at the Crescent City Farmers Market (8am-12pm)
  • November 13 in Petal (Hattiesburg), MS: Invitation-only event
  • November 15-18 in Sacramento, CA
    • Monday, November 16: A Slow Food Fall Mixer to draw solidarity between African and American garden projects (6-8pm)
      More information here

Expo Milano 2015

US food rocks the Expo
Visitors enter the 42,000-square-foot barn-like structure on a wide ramp built from the reclaimed Coney Island boardwalk, which was destroyed by Superstorm Sandy. One side of the building is a living vertical farm the length of a football field which is harvested daily. Inside, a self-guided tour of interactive kiosks features videos of farmers, chef activists, research scientists and policy makers all speaking to the Expo’s theme of how it’s going to be possible to safely feed a population of 9 billion in the year 2050.

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Milan Southern Agricultural Park

During the Milan Expo 2015 the attention will be mainly focused on the Milan Southern Agricultural Park (Parco Agricolo Sud Milano), the “park of Expo 2015”, featuring 47 thousand hectares and representing one of the biggest areas aimed at feeding itself and the planet. An amazing space that coverss almost fifty per cent of the provincial area around Milan where historical farms, agricultural productions, natural, cultural and environmental resources are gathered and they might become the Biosphere’s Reserve. That means being awarded with the International praise from UNESCO for the keeping and protection of the environment within the program “Man and Biosphere”.

USA rocks Expo Milano 2015.

Keeping Agricultural Land Prices Affordable for Farmers in the UK

“The idea goes back to 2005, when members of various groups involved in ecological land management and cooperative development got to talking. Inspired by a vision for what would become the Ecological Land Cooperative (ELC), they sketched out a plan to buy degraded agricultural land and lease it to people with the desire and skill—but not enough cash—to start small-scale farms with regenerative practices (think permaculture and agro-forestry).”

Keeping Agricultural Land Prices Affordable for Farmers – Economy – Utne Reader.

The MOON magazine | The Future of Food

This month we gather around the topic of food—a subject everyone loves. Food is the great convenor, the global common denominator, the alchemical substance that pulls parties into the kitchen, makes friends out of strangers, puts flesh on our bones and smiles on our faces.

But all is not well in food land, despite the colorful array of products on U.S. grocery store shelves. One third of Americans are overweight; diet-related diseases are skyrocketing; our food is being designed to addict, rather than nourish; bees are dying; biodiversity is being lost; and modern agriculture is based on massive inputs of petroleum—a finite resource.

The MOON magazine | The Future of Food.

40 organizations

Food TankFood Tank, one of my favorite new think tanks, is highlighting organizations worldwide doing good work. It’s a good list, although a bit of a surprise what is here and what is not…

http://foodtank.org/news/2013/05/forty-organizations-that-are-shaking-up-the-food-system