Peter Timmer
speaker
27 appearances
1 recordings
1 series
first heard Dec 2024
last heard Dec 2024
Peter Timmer’s voice in public audio — every appearance, attributed to the second.
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Appearances
Freakonomics Radio · How the Supermarket Helped America Win the Cold War (Update) · 9 Dec 2024
podcast
Economists who don't do U.S. agricultural policy are horrified by what they see in terms of distorting markets.
If I may say so, I lived through the structural transformation of the agricultural economy.
I'm a retired professor, have worked on agriculture and food policy, poverty reduction, economic development for well over 50 years now.
I'm old enough to remember when we hand-picked all of our tomatoes and we hand-peeled all of our tomatoes. But that, of course, changed. When I was in grade school or junior high school, If we could pack 40,000 or 50,000 cases of canned tomatoes and product in a year, that was a pretty successful year.
By the time I had graduated from graduate school, the company was putting out a million cases a year.
I remember when we bought our first one, it was a huge expense, and it just revolutionized our operation. I was just in a microcosm of what turned out to be very general trends in the entire U.S. food system at the time.
The fact is, they were unable to modernize Soviet agriculture with the economic structure and strategy that they were following.
It was not a technological problem. It was a management and marketing problem. There was a total divorce between what consumers wanted and what the managers of the big state farms were told to produce.
Oh, gosh. I mean, the shelves were empty. It was just weird. We stayed at a government hotel. And there was hardly anything to eat. You talk with the staff of the research agencies and places like that who would struggle just to come up with basic foods. They knew it could be better than that.
It was a fundamentally failed strategy for agriculture that brought down the Soviet Union. They didn't grow enough and they didn't grow the right things. And there were no price signals telling you what's expensive and what's cheap. They wasted a lot of what they were producing on the land. It never got into the supermarkets. Timur was actually in Moscow when the Soviet Union collapsed.
The neat thing is I have a passport going in stamped Soviet Union, but my passport coming out the exit stamp is Russia. People were so... optimistic about what was going to happen. They knew that American supermarkets were a miracle. They had seen it on television. That point had clearly gotten through at least to everybody that I talked to.
I mean, demand collapsed dramatically. But agricultural productivity did not. And what that meant was prices just collapsed. And so that so totally set the mind frame for U.S. agricultural policy.
You know, economists who don't do U.S. agricultural policy are usually horrified. by what they see in terms of distorting markets, picking, okay, corn, soybeans, wheat, you guys get big subsidies, apples, grapes, fresh fruits and vegetables, you're on your own. Dairy, Incredibly regulated both federally and at the state level. Just a mess. Just an awful mess.
High fructose corn syrup. Yep. You've got surplus corn. And you've got a demand for easy, convenient sweetener in the food sector. And that was just a perfect storm. That syrup revolutionizes food processing because instead of a powdery sweet thing, it's a liquid. And liquids are way easier to handle. in food processing.
If I had only one thing to say about the impact of our agricultural programs on what you see in the supermarket and subsequent health issues out of the diet, I would have said the fact that we use so much high fructose corn syrup, that's the example of how things can go badly wrong even if well intended. I mean, don't get me started on ethanol because that's the next step.
in reducing the surpluses, but I don't want to go there.
We didn't manage that process very well. But I think just basic economic forces would have pushed us in that direction. It just wouldn't have pushed us as far.
Supermarkets were able to manage the supply chains all the way back to farmers, but they didn't want little tiny farmers. Just one supplier, please. It's just way too complicated to contract with 50 or 100. That has changed then the nature of production.
right down at the level of Tip Top Canning Company and how we would be able to provide the kind of regular quality and supply and low price that a Walmart or a Kroger or a Publix would need.
I used to ask my class, I'm talking 1985, where is the world's largest supercomputer? And the correct answer was, it's at the Pentagon. Okay, where is the world's second largest supercomputer? Bentonville, Arkansas, home of Walmart. They used that computer to track every single item on every single Walmart shelf. That information technology is what revolutionized food marketing.
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