FOOD MARKETING TECHNOLOGY AND CONTINGENCY MARKET VALUATION

Marketing activities are introduced into a rational expectations model of the food marketing system. The model is used to evaluate effects o f alternative marketing technologies on the distribution of the benefi ts of contingency markets in agriculture. Benefits depend on two param eters: the cost share of farm inputs and the elasticity of substitutio n between farm and nonfarm inputs in food marketing. Over a broad spec trum of technologies, consumers are likely to be the net beneficiaries and farmers the net losers from the provision of contingency markets.