AGRICULTURE IN THE 21ST-CENTURY

Significant changes are occurring in the relationships among the stage s of the food and fiber systems from input supply to retail. Changing end-use markets and technology are primary drivers of what is often ch aracterized as the industrialization of agriculture. The fundamental r esearch issue is what structural changes and realignments will occur i n the agricultural production and distribution system to efficiently a nd effectively supply various end-use markets, and how these changes, combined with the increasing role of knowledge and information in impr oving physical and financial performance of the system, will affect th e relative efficiency of traditional impersonal markets compared with personal negotiation in coordinating the production and distribution c hain. Analysis is based on observation of trends in the food sector an d the integration of world markets for agricultural products. Deductiv e reasoning is used to infer changes in agricultural business practice s needed to accommodate consumer demands in a worldwide market. The in dustrialization of agriculture will result in a significantly differen t industry-one characterized by a manufacturing approach to creating s pecific products for unique end-uses, and negotiated coordination of t he stages of the production and distribution chain from genetics to fi nal consumer. The manufacturing mentality will emphasize intensive sch eduling and use of resources; alliances with others to reduce costs, l ower risk, and capture value; and total systems rather than stage opti mization to increase efficiency and reduce losses. Negotiated coordina tion in the form of contract production, vertical coordination, and st rategic alliances will replace much of the impersonal open markets coo rdination that has dominated commodity markets in the past. Informatio n will be a major driver and determinant of the form of coordination a s well as who has power in the food production and distribution system .