Excellent post! As both a producer (small) and a consumer of FOOD...I heartily concur.

The term 'fungibility' is defined in terms of the perspective of the buyer. The precise definition can be looked up any online dictionary; of more interest is how it is used in practice for a fungible commodity. The Chicago Mercantile Exchange web site defines a contract for corn to consist of 5000 bushels of '#2 Yellow at contract Price, #1 Yellow at a 1.5 cent/bushel premium #3 Yellow at a 1.5 cent/bushel discount.' That's fungibility in action. Notice, from a buyer's point of view, there are distinct differences in field corn . . . apparently at least 3 grades of yellow corn. To you and me, it's just yellow field corn. And the buyer is willing to accept different grades, albeit with some financial adjustments.

I like the way Wikipedia puts it: 'There is a spectrum of commodification, rather than a binary distinction of "commodity versus differentiable product". Few products have complete undifferentiability and hence fungibility; even electricity can be differentiated in the market based on its method of generation (e.g., fossil fuel, wind, solar). Many products' degree of commodification depends on the buyer's mentality and means. For example, milk, eggs, and notebook paper are considered by many customers as completely undifferentiable and fungible; lowest price is the only deciding factor in the purchasing choice. Other customers take into consideration other factors besides price, such as environmental sustainability and animal welfare. '

This is why I part ways with your reply to Sean, where you said, 'By definition, it is impossible to compete in a commoditized market on quality — because the definition of a commodity is “a good supplied without qualitative differentiation across a market.” ' I disagree with that definition. I know, I know, you pulled at definition from Wikipedia. And I pulled the 'spectrum' definition from Wikipedia. Which definition is correct? From a buyer's perspective at the Chicago Mercantile Exchange, does the buyer want to receive any grade of corn, or does the buyer want specific grades of yellow corn? From a buyer's perspective, is it any old pesticide-dunked-root-crop, or is it organic potatoes?

I think it's a spectrum. I don't care if the organic potatoes I buy at my local grocery stores are grown locally or grown hundreds of miles away. I don't care if a particular bag of potatoes comes from one farm or multiple farms. What do I care about? I want potatoes, not turnips. I want organic potatoes, not pesticide. Organic potatoes are a commodity, and they're fungible, and they're real food.

Regarding 'topsoil is disappearing at roughly 1% per
year, and food is more depleted of trace minerals each year' . . .

The second allegation can be countered by the following analysis: en.allexperts.com/q/Agriculture-2377/Soil-Depletion-Myth-Fact.htm . I am not fully convinced on either side of this argument; I think I have too little information and not enough interest to pursue the issue any further.

As for the 'topsoil disappearing at 1% per year' allegation, I don't understand why the owners or shareholders of a farm corporation would destroy an asset. Land cannot be depreciated. Furthermore, the following analysis indicates that the allegation is based more upon models than on observed data: http://www.wou.edu/las/physci/taylor/g473/refs/trimble_crosson_2000.pdf .

The 'Against the Grain' book was an interesting read in places. Thanks for the recommendation.

You are correct that an entire book could be written about this topic (and more). In fact there is an entire economic history that could be written about this topic alone. It might surprise you that many of the ills of commoditization you describe easily pre-date the era of price supports--in fact, price supports (as well as paying farmers NOT to plant crops) were earnest attempts by the government to stabilize the cash-crop (=corn) market after two successive decades of deflation AND a devastating environmental collapse!

In fact, the corn market may have caused more human suffering than we know! Historians allege that the 'opening of the West' in the post-bellum era led to such an increase in corn production that corn prices in the 1st breadbasket of the world--the Ukraine--collapsed in 1872, leading to a worldwide market panic and deflationary crunch. The misery and starvation caused by the panic contributed to civil unrest... which may have motivated the Russian government to pen the fraudulent "Protocols of the Elders of Zion", which attempted to affix blame for the peasants' suffering not on the greedy nobility and ineffectual government, but (by some conspiracy theory involving bankers) on their Jewish neighbors. The vicious progroms, mass forced migrations, and ultimate genocide across Eastern and Central Europe at the hands of the Nazis are all well-known.

As for fungibility, I believe that corn quality in the marketplace is actually fine for my needs. It's the eggs and milk and poultry that seem to suffer the most with lax USDA standards. The big guys have colonized the USDA, hence the attempted ban on even labeling milk rBGH free! (I always buy rBGH free b/c it supports small dairies--only the big boys use that stuff, and they use it to grind the little guys out of business.)

Beyond fungibility, there is fraud. Looked into "Italian EVOO" lately? How about honey? How would you feel if you knew that imported olive oil was actually deodorized soybean oil from Brazil and that some national brands were caught selling honey that was banned for human consumption in India and smuggled into the US to be repackaged? CBoT, which regulates trade of pork bellies, coffee beans, OJ, and corn, is not going to be cheated, but CONSUMERS frequently are!

I don't perceive agriculturalists as being fundamentally greedy. I see the Dust Bowl as being caused mostly by ignorance. (If the agriculturalists who remained in the Dust Bowl area after the Dirty Thirties were greedy as you describe, the land would be completely destroyed. Instead, one can find reports such as this: amarillo.com/news/local-news/2011-07-17/landscape-changes-make-new-dust-bowl-unlikely ).

The destruction of the soil in the Fertile Crescent is more likely to be caused by one of three causes: (1)ignorance of non-destructive agriculture techniques (2) the tragedy of the commons (which goes on today; look at the Ogallala Aquifier), or (3) authoritarian regimes making stupid decisions, such as described at news.nationalgeographic.com/news/2001/05/0518_crescent.html.

I think the following story more accurately describes what happens when farmers are given control over their own land: (link)