A Theory for Why Large Farms need Small Farms

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dc.contributor.author Crespi, John
dc.contributor.author Marette, Stéphan
dc.contributor.author Crespi, John
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2020-12-11T13:52:36.000
dc.date.accessioned 2021-02-24T21:55:17Z
dc.date.available 2021-02-24T21:55:17Z
dc.date.embargo 2020-12-11
dc.date.issued 2020-02-01
dc.description.abstract <p>The political economy literature related to agricultural policy provides a number of conjectures corresponding to farm size, but provides no theoretical model of the political utility of small farms. Framed in the context of regulation, we demonstrate how large farms may use small farms to influence their regulatory burden. Producing in the presence of externalities, farms can be regulated to eliminate the damage. We compare a socially optimal regulation with the choice that would be taken by a large farm if it could influence the regulatory decision using the small farm as political cover. Compared to the socially optimal choice, there are cases where the large farm would choose regulation and reduced competition while in others would choose to fight the regulation to save its smaller rival. If the externality and the regulatory burden are very large, the large farm prefers more competition if that leads to less regulation. In this case, lobbying to “save small farms” is in the best interest of the large farm.</p>
dc.identifier archive/lib.dr.iastate.edu/card_workingpapers/625/
dc.identifier.articleid 1625
dc.identifier.contextkey 20531757
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath card_workingpapers/625
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/93587
dc.source.bitstream archive/lib.dr.iastate.edu/card_workingpapers/625/2020_Crespi_TheoryLargeCARDWP.pdf|||Sat Jan 15 01:19:08 UTC 2022
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Economic Theory
dc.subject.disciplines Industrial Organization
dc.subject.disciplines Political Economy
dc.subject.keywords farm policy
dc.subject.keywords farm size
dc.subject.keywords concentration
dc.subject.keywords regulation
dc.subject.keywords lobbying
dc.title A Theory for Why Large Farms need Small Farms
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication ce210dae-8839-4a40-837c-f17b1bac916d
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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