Hadachek, Sexton, and Ma: Resilience of Food Supply Under Extreme Events

In Market Structure and Resilience of Food Supply Chains Under Extreme Events, authors Jeffrey Hadachek, Richard J. Sexton (both Agriculture and Resource Economics, UC-Davis), and Meilin Ma (Agriculture Economics, Purdue University) examine the impact of various economic policies on the resilience of food supply chains.

On the heels of the COVID-19 pandemic and its supply chain impacts, the authors developed a method to quantify shocks to the food supply chain. In particular, the authors focus on the impact events such as pandemics, wars, and natural disasters can have on national and local food supply chains. Using a mathematical model, the authors developed a formula to test the effects of various public policy responses typically used in the U.S.

Specifically, the authors evaluate four different economic policies: 1) reducing intermediary market power, 2) subsidizing the entry of producers, 3) price control through anti-price-gouging laws, and 4) creating regional diversification of production capacity.

The article outlines several findings of these economic tests. For example, the authors argue that policies that spur market competition tend to produce the best overall outcomes, demonstrating "wins" for producers and consumers. Price ceilings can also help achieve supply chain stability in less competitive markets by increasing output. Additionally, the authors show that diversifying production had a generally negative economic effect, regardless of the economic structure.

Overall, the authors identify a wide variety of variables that may impact the resilience of food supply chains. By conducting their research using a mathematical formula, the authors establish a theoretical foundation for their arguments, but future research could expand and conduct more comprehensive real-world analysis of policy responses to economic shocks.