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Market structure and resilience of food supply chains under extreme events

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  • Jeffrey Hadachek
  • Meilin Ma
  • Richard J. Sexton

Abstract

Recent extreme events and the disruptions they caused have made food supply chain resilience a key topic for researchers and policymakers. This paper provides input into these discussions by evaluating the efficiency and resilience properties of the leading policy proposals. We develop a conceptual model of a prototype agricultural supply chain, parameterize the model based on the empirical literature, and conduct simulations to assess the impacts on resilience and economic welfare of four key policy proposals: (i) intensified antitrust enforcement to improve market competition, (ii) subsidization of entry of additional processing capacity, (iii) prevention of price spikes through anti‐price‐gouging laws, and (iv) diversification of production and processing across multiple regions. Results show that some of the policies have potential to improve supply‐chain resilience, but their impacts depend on the existing market structure, and resilience gains often come at the cost of reduced efficiency.

Suggested Citation

  • Jeffrey Hadachek & Meilin Ma & Richard J. Sexton, 2024. "Market structure and resilience of food supply chains under extreme events," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 21-44, January.
    • Handle: RePEc:wly:ajagec:v:106:y:2024:i:1:p:21-44
    DOI: 10.1111/ajae.12393
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    Cited by:

    1. Alam, Md Fahim Bin & Tushar, Saifur Rahman & Ahmed, Tazim & Karmaker, Chitra Lekha & Bari, A.B.M. Mainul & de Jesus Pacheco, Diego Augusto & Nayyar, Anand & Islam, Abu Reza Md Towfiqul, 2024. "Analysis of the enablers to deal with the ripple effect in food grain supply chains under disruption: Implications for food security and sustainability," International Journal of Production Economics, Elsevier, vol. 270(C).
    2. Hadachek, Jeffrey & Ma, Meilin, 2024. "Risk Externalities in Vertical Supply Chains," 2024 Annual Meeting, July 28-30, New Orleans, LA 343748, Agricultural and Applied Economics Association.
    3. Jackie Yenerall & Andrew Muhammad & Karen DeLong & Trey Malone, 2024. "Navigating the challenges of building a more resilient infant formula industry," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 499-513, June.

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