Performance of International Grain Marketing Systems: Discussion

I would characterize the three papers as follows: (a) The Martin paper is an attempt to formulate a methodology for an objective evaluation of the performance of the international grain marketing system. (b) The Bunker-Cook paper is an historical review of the role of U.S. cooperatives in the international grain marketing system. (c) The Halow paper is an emotional appeal to retain the international grain-marketing system as currently instituted. Halow's paper is of little value to this audience of professional agricultural economists because of its polemical character. We have a proud tradition of providing objective economic analysis as an input to participants in the political process; a process which sorts out the social, political, and ideological preferences of interest groups in order to set the policy framework in which economic activities like grain marketing will be performed. As individual participants in that process, we might or might not find his comments of interest, but they are of little professional value. I, and most agricultural economists, would fully agree with Halow's point that middlemen perform an important economic function. They do so for an honorable reason-to earn a livelihood, and they are often unfairly used as whipping boys. The balance of Halow's paper, however, implies that if one accepts those premises, then he must conclude that the U.S. grain-marketing system as currently instituted should be retained without questioning whether the current mix of world conditions, international market structure, and national policy variables may be producing results which are seriously detrimental to U.S. national interests. The Bunker-Cook paper is a useful description of the evolution of cooperative efforts to participate in international grain markets. I find little with which to quarrel except the implication that having farmers act as middlemen is philosophically preferable to proprietary firms. Some might go a step further to assert that having cooperatives perform the intermediary functions in the world grainmarketing system would enhance its social performance. That, of course, is not necessarily true. Martin has proposed an approach to the evaluation of performance of the international grain-marketing system. The focus on objective criteria for evaluating performance is urgently needed, as evidenced by the Halow paper which unfortunately characterizes most of the writing on this subject. Martin observes that it is "mandatory that the structure of the system be defined and thoroughly understood in undertaking comparative analysis of performance." I would add that behavioral characteristics of participants also should be understood. He continues, "given the increasing role of the public sector and the multiobjective nature of public policy, the definition of performance cannot be restricted to a conceptual framework that includes only variables internal to the grain sector." I agree with both conclusions. But having said that, Martin proceeds to conceptualize an evaluation methodology without doing either, perhaps because there still is substantial disagreement on the structure and behavior of participants, including policy makers in the international grain-marketing system. If that is true, we as a profession must get on with additional work to correct that deficiency. It is my own belief that world grain price levels have been policy determined rather than supply-demand determined for years-mainly as a derivative of U.S. domestic farm policy. Supply and demand forces, working primarily through open U.S. grain markets, fix day-today price levels within constraints imposed by government policy. Since the United States Kelly Harrison is General Sales Manager and Associate Administrator, Office of the Secretary, U.S. Department of Agriculture.