CHAPTER 2 Policy Problems of Food and Agriculture

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CHAPTER 2Policy Problems of Food
and Agriculture

• AGBU 310

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Past Policies

• 1930s-1960s excess capacity problems
• Low farm prices and incomes
• Need for off-farm income
• Led to rural decline
• Led to gov. intervention (price supports and
  production controls)
• Not competition in world market and other
  countries retaliated
• Direct payments

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Past Policies

• 1970s Golden Years
• Weather and disease lowered production which
  increased prices
• Demand increased due to increased population,
  rising incomes, and changes in foreign policy.
• Concern over ability of world to feed itself
• BOOM PERIOD
• Farmers were encouraged to produce
• Gov. reduced their role

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Past Policies

• 1980s burdensome supplies and low prices
• Gov. stepped in with price and income supports
  and production controls
• Again, the U.S. not competitive in world market
  (high domestic supports and a strong dollar)
• 1996 Farm Bill switched this to direct payments
• The events of the 1960s to the 1980s is called
  a Policy Cycle

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Agriculture

• Export and world market dependent
• World trade changed by development in EU and
  former Soviet Union
• Fragility of agriculture
• Public interest increased
• Large farm size
• Resource constraints
• Shorter policy cycles (erratic)

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Todays Agricultural Problems

• 1) WORLD FOOD PROBLEM
• 2) FARM AND RESOURCE PROBLEM
• 3) CONSUMER FOOD PROBLEM
• 4) RURAL DEVELOPMENT PROBLEM

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WORLD FOOD PROBLEM

• Most complex
• Distribution problems caused by low incomes
• Trade
• Capacity
• Most complexities stem from policies made in
  response to immediate political pressures

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FARM AND RESOURCE PROBLEM

• Instability
• Weather, pests, disease, value of dollar
• Excess capacity and fixed assets
• Diversity
• Need technological and business skills
• Resource scarcity
• Particularly irrigation water
• Environmental problems

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CONSUMER FOOD PROBLEM

• 1900-1970s sanitary conditions
• 1970s-now food prices, nutrition, food labeling,
  pesticides, animal rights, marketing orders,
  commodity support programs
• Nutrition food stamp program (large portion of
  Farm Bill)
• Price - of income spent on food
• Safety - HACCP

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RURAL DEVELOPMENT PROBLEM

• Not a priority since the New Deal infrastructure
  policies in the 1930s
• Rural decline in the South and on the Great
  Plains
• Infrastructure (roads, bridges)
• Health and education
• Selective outmigration (lack of jobs)
• Poverty
• Farm Labor (treatment of migratory labor)

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PROBLEM SOLVING PHILOSPOHIES

• FREE MARKET
• HUMANITARIAN
• AGRICULTURAL FUNDAMENTALIST
• STABILIZER
• REGULATOR

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FREE MARKET

• BELIEF the forces of supply and demand determine
  product prices and also allocate and ration
  available supplies.
• Gov. programs should be eliminated
• Role of gov. limited to research, education,
  provisions of production and market information,
  to reduce barriers to trade
• GATT
• NAFTA

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HUMANITARIAN

• BELIEF major ag. Problem is that of adequately
  feeding an ever-expanding world population and
  solving issues of malnutrition at home and abroad
• Increase foreign food aid
• Developmental assistance
• Environmentalists
• Right to food resolution adopted at the 1974
  World Food Conference

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AGRICULTURAL FUNDAMENTALIST

• BELIEF the root of all wealth lies in
  agriculture and the soil, and that agriculture
  has moral properties- the capacity to engender
  in human beings an elevated behavior, and it
  creates values in human beings that are generally
  recognized as being good.
• Must maintain agricultures health to maintain
  economys health
• High farm prices allow farmers money to spend in
  rural communities
• Like price floors

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STABILIZER

• BELIEF major problem in agriculture is
  instability
• Gov. should ensure price do not fluctuate much
• Gov. should ensure supplies always available
• Free market belief allows producers to manage
  their risk through futures, options, and contracts

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REGULATOR

• BELIEF market incentives cannot be relied on to
  make decisions on the appropriate combination of
  inputs to be used in production, the allocation
  of land and water resources, or the processing
  and marketing practices of food processors and
  retailers.
• Other believe that this view infringes on
  property rights
• Supporters are typically environmentalists and
  food safety advocates

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What is your philosophy?

• It may be a combination of several of these
  philosophies.
• Take a few minutes to think about it and write a
  paragraph on where you stand in regard to ag.
  Policy.
• We will do this again at the end of the semester
  to see if any of your views have changed