In total, expenses for hired labor and other purchased inputs such as fertilizers,
petroleum products, and pesticides were $5.5 billion, about a third of total farm
expenses.
ANALYTICAL MODEL
The benefits to the agricultural sector of greater fruit and vegetable consumption
will be measured by estimating the changes in consumer and producer surplus from an
equilibrium displacement model. The dual approach used in this analysis lays out basic
demand and supply equations from demand and cost functions to show how
equilibrium conditions change in response to shocks, such as an increase in the demand
for fruits and vegetables. The functions characterize the final market, allow for
substitutability between marketing and non-marketing inputs in the marketing sector,
includes the farm sector, and changes in input use resulting from changes in crop mix
and substitutability in land, labor and other inputs. The model is parameterized with
farm, market and consumption data. The increase in fruit and vegetable consumption
is modeled as a shift in the demand curve with the shift equal to the percentage increase
needed to meet the recommendations of a cancer prevention diet.
An increase in fruit and vegetables as described about will have a major impact on
fruit and vegetable industries in the U.S. For states with a large share of production in
fruits and vegetables, such as Florida and California, significant shifts in the production
of other crops may also occur as inputs are moved into producing fruits and vegetables.
Moving inputs from one use to another is not cost free. Therefore, other commodities