U.S. Farm Safety Nets and the 2000 Agricultural Risk Protection Act

Although crop insurance programs have been an important part of U.S. agricultural policy since the 1930s, the "safety net" matra has taken on new relevance and importance in recent policy deliberations and rhetoric. This paper contains a non technical review of issues underlying the safety net concept in U.S. agricultural policy. We outline recent changes in U.S. crop insurance programs and review provisions of the 2000 Agricultural Risk Protection Act (ARPA), which had a significant impact on U.S. risk management programs by expanding crop and revenue insurance subsidies and stimulating new product development. A simple empirical analysis of how these changes may have affected program participation is considered. We then outline points relevant to 2002 Farm Bill deliberations. As is pointed out, the safety net concept seems pervasive to all policy discussions. Countercylical payments, even when provided on an ad hoc basis, may distort production and trade conditions.     

REVIEWS*

Book reviewed in this article: Population and Food Supply: Essays on Human Needs and Agricultural Problems. Edited by Sir Joseph Hutchinson . Cambridge University Press. Farming in Britain Today. By J. G. S. and Frances Donaldson . Allen Lane, Penguin Press, Hardmondsworth, Middlesex. 1969. Environment and Land Use in Africa. Edited by M. F. Thomsas and G. W. Whittington . Methuen, London. 1969. Problems and Approaches in Planning Agricultural Development. Proceedings of the Joint German Foundation/E.C.A./F.A.O. Seminar, Addis Ababa. 1967. Cotton and the Egyptian Economy, 1820–1914. By E. R. J. Owen . Clarendon Press: Oxford University Press. 1969. The Economy of the Private Woodland in Great Britain. By R. Llorrain -Smith . Commonwealth Forestry Institute, Oxford. Institute Paper No. 40. 1969. Report on the Marketing of Scottish Seed Potatoes. By F. G. Hay . National Farmers' Union of Scotland. 1969. Agricultural and Food Statistics—A Guide to Official Sources. Studies in official statistics No. 14. Ministry of Agriculture, Fisheries and Food. H.M.S.O., London. 1969. Food Statistics. A Guide to the Major Official and Unofficial U.K. sources. (Compiled by A. W. Ashby ). National Economic Development Office. Die landwirtschaftlichen Betriebsgrössen in der Sowjetunion in Statistik und Theorie. (The size of agricultural undertakings in the Soviet Union in statistics and theory.) By Ivan Lon?arevi? . Otoo Harrassowitz, Wiesbaden. (No. 45, Giessen Studies of E. European agricultural and economic research.) 1969. Wörterbuch der Landwirtschaft—Ergänzungsband Russisch. By Nikolai Pas'chin . BLV Verlagsgesellschaft, Munich. 1969.     

REVIEWS*

Book reviewed in this article: BURTON, M. P. (1992). An Agricultural Policy Model for the UK GALATY, J. G. and JOHNSON, D. L. (eds.) (1991). Herding Systems in Comparative Perspective HALLBERG, M. C., FINDEIS, J. L. and LASS, D. A. (1991). Multiple Job-Holding Among Farm Families TISDELL, C. A. (1991). Economics of Environmental Conservation. Developments in Environmental Economics 1 BIGGS, S. and FARRINGTON, J. (1991). Agricultural Research and the Rural Poor: A Review of Social Science Analysis BRUN, A. H. and FULLER, A. M. (1992). Farm Family Pluriactivity in Western Europe: Partial Results of a Research Programme Funded by the EC Commission and National Agencies. Enstone, Oxford: Arkleton Trust (Research) Ltd. with assistance from the Ministere de l'Agriculture et de la Forêt COLMAN, D., CRABTREE, B., FROUD, J. and O'CARROL, L. (1992). Comparative Effectiveness of Conservation Mechanisms. Manchester: Department of Agricultural Economics, Faculty of Economic and Social Studies, University of Manchester OLSEN, W. C. (1991). Agricultural Economics and Rural Sociology: The Contemporary Core Literature. With contributions by Bellamy, M. A. and Stanton, B. F SAFADI, R. and PLUSQUELLEC, H. (1991). Research on Irrigation and Drainage Technologies: Fifteen Years of World Bank Experience WORLD BANK (1992). World Development Report 1992     

REVIEWS

Book reviews in this article: BIL, A. (1990). The Shieling - 1600–1840: The Case of the Central Scottish Highlands BULLER, H. and WRIGHT, S. (1990). Rural Development: Problems and Practices BURRELL, A. (ed.) (1989). Milk Quotas in the European Community CHAMBERS, R., PACEY, A. and THRUPP, L. A. (eds.) (1989) COLLIER, P., RADWAN, S. and WANGWE, S. with WAGNER, A. (1990.) Labor and Poverty in Rural Tanzania: Ujamaa and Rural Development in the United States Republic of Tanzania COLLINS, E. J. T., GILES, A. K. and MALLESON, J. G. K. (eds.) Innovation and Conservation JOHNSON, P. M. (1989) Redesigning the Communist Economy: The Politics of Economic Reform in Eastern Europe KRUEGER, A. O., MICHALOPOULOS, C. and RUTTAN, V. W. (1989). Aid and Development Baltimore: Johns Hopkins CHATHIE, J. (1989) Food Aid and Industrialisation. Aldershot: Gower LOWE, P. and BODIGUEL, M. (eds.) (1990). Rural Studies in Britain and France ROMERO, C. and REHMAN, T. (1989). Multiple Criterion Analysis for Agricultural Decisions. Amsterdam: Elsevier ADAMOLEKUN, L. (1989). Issues in Development Management in Sub-Saharan Africa. EDI Policy Seminar Report, No. 19 Economic Development Institute of the World Bank CURRAN, T. (1990). The Theory and Practice of Agricultural Policy. EDI Policy Seminar Report, No. 24. Economic Development Institute of The World Bank ISLAM, N. (1990). Horticultural Exports of Developing Countries: Past Performance, Future Prospects, and Policy Issues. Research Report 80. Washington, D. C NATIONAL RESEARCH COUNCIL (1989). Investing in Research: A Proposal to Strengthen the Agricultural Food, and Environmental System. Washington, D.C NATIONAL RESEARCH COUNCIL (1989). Food Aid Projections for the Decade of the 1990s. Washington D.C.: National Academy Press (marketed and distributed by John Wiley VAN DEN NOORT, P. C. (1990). Costs and Benefits of Agricultural Policies and Projects. Proceedings of the 22nd Symposium of the European Association of Agricultural Economics, October 1989, Amsterdam, The Netherlands PLUSQUELLEC, H. (1990). The Gezira Irrigation Scheme in Sudan: Objectives, Design and Performance SHAWKI, B. and LE MOIGNE, G. (eds.) (1990): Irrigation in Sub-Saharan Africa: The Development of Public and Private Systems WORLD BANK (1990). Agricultural Marketing: The World Bank's Experience, 1974–85. Washington: The World Bank, Operations Evaluation Department     

THE SEARCH FOR THE COST OF PRODUCTION, 1914-30

The Agriculture Act 1920, provided for British fanners from the the the autumn of 1921 guaranteed minimum prices for wheat and oats which were to be adjusted year by year in accordance with changes in ‘the cost of production’ from those recorded for the base year 1919. In preparation for this task, the agricultural departments of the United Kingdom established an Agricultural Costings Committee under a director and deputy director at Whitehall, and with 26 costings officers among the farmers in the counties. And here begins the official research into agricultural economics in this country, as distinct from the academic. For although the Agriculture Act 1920 was repealed in 1921 just before it came into force and the Costings Committee was disbanded at the same time, the collection and analysis of farming costs was soon revived by the institution of the advisory economics service. The present paper describes the events which led up to the Agricultural Costings Committee and the continuing search for ‘the cost of production’ by the agricultural economists in the early days of the advisory service.     

Book Reviews

Book reviewed in this article: A Survey of Agricultural Economics Literature, Volume 4: Agriculture in Economic Development, 1940s to 1990s Edited by Lee R. Martin Carl K. Eicher and Doyle C. Baker. Agricultural Development in Sub-Saharan Africa: A Critical Survey In Lee R. Martin, ed. A Survey of Agricultural Economics Literature John W. Mellor and Mohinder S. Mudahar. Agriculture in Economic Development In Lee R. Martin, ed. A Survey of Agricultural Economics Literature G. Edward Schuh and Antonio Salaza P. Brandao. The Theory, Empirical Evidence and Debates on Agricultural Development Issues in Latin America In Lee R. Martin, ed. A Survey of Agricultural Economics Literature Bovine Somatotropin and Emerging Issues: An Assessment Edited by M. C. Hallberg Boulder, Colorado The Ethics of Aid and Trade: U.S. Food Policy, Foreign Competition and the Social Contract Edited by Paul B. Thompson In Lee R. Martin, ed. A Survey of Agricultural Economics Literature     

Reviews

Book reviewed in this article: Atkin, M. (1993). Snouts in the Trough: European Farmers, the Common Agricultural Policy and the Public Purse. Bassett , T. J. and Crummey , D. E. (eds.) (1993). Land in African Agrarian Systems. Wisconsin: University of Wisconsin Press. D'Antonio , W. V., Sasaki , M. and Yonebayashi , Y. (eds.) (1994). Ecology, Society and the Quality of Social Life. Gibbon , P., Havnevik , K. J. and Hermele , K. (1993). Blighted Harvest- The World Bank and African Agriculture in the 1980s. London: James Currey Ltd and New Jersey: Africa World Press. Hamdar , B. C. (1993). The Relationship Between Agricultural Policy and Forestry in the Southern Region of the United States. Hoff , K., Braverman , A. and Stiglitz , J. (eds.) (1993). The Economics of Rural Organisation: Mac Arthur , J. D. and Weiss , J. (eds.) (1994). Mori , H. and Lin , B-H. (1994). Japanese Beef Market: Distinctly Unique. Senshu University Press. Taylor , C. R., Reichelderfer , K. H. and Johnson , S. R. (eds.) (1993).     

Sustainable rural communities? A legal perspective on the community right to buy

Sustainable development is the underlying policy behind the community right to buy land in rural Scotland enshrined in the Land Reform (Scotland) Act 2003, Part 2. The Act explicitly requires communities wishing to exercise the right to buy to have sustainable development at the heart of their community body and all their plans for the land. This paper examines the role and interpretation of sustainable development in the CRB. Since the Act was passed three administrations have headed up the Scottish government and sustainable development issues and strategies for Scotland have been aired in four important and distinctive policy documents showing that it is still very much an evolving concept in Scottish politics. The current administration has adopted the most econocentric approach yet seen in the UK, focusing on sustainable economic growth. Meanwhile, the community right to buy has developed its own sustainable development agenda. This review of decisions taken under the legislation illustrates that a diverse range of community ownership plans have been deemed consistent with sustainable development, from creation of sports facilities to preservation of castles, lighthouses and village greens. A range of economic, social and environmental objectives have been approved. On the other hand, communities that fail to adopt the ‘right’ approach to the principle will not be successful in using the legislation.     

REVIEWS*

Book reviewed in this article: BURGER, K., DE GROOT, M., POST, J. and ZACHARIASSE, V. (eds.) (1991). Agricultural Economics and Policy: International Challenges for the Nineties: Essays in Honour of Prof. Jan de Veer HINTON, W. L. (1991). The European Market for Fruit and Vegetables JUSSAUME, R. A. JR. (1991). Japanese Part-Time Farming: Evolution and Impacts PORTER, D., BRYANT, A. and THOMPSON, G. (1991). Development in Practice POTTER, C., BURNHAM, P., EDWARDS, A., GASSON, R. and GREEN, B. (1991). The Diversion of Land: Conservation in a Period of Farming Contraction ROMERO, C. (1991). Handbook of Critical Issues in Goal Programming WINTER, L. A. and SAPSFORD, D. (eds.) (1991). Primary Commodity Prices: Economic Models and Policy ANSELL, D. J., GILES, A. K. and RENDELL, J. (1991). Very Small Farms: ‘A Distinctive Role?’ Special Studies in Agricultural Economics Report No. 16 ARKLETON TRUST (RESEARCH) LTD. (1991). Rural Change in Europe: Structural Policies and Multiple Job Holding in the Rural Development Process. Papers from the second review meeting at Braemar, 1989 BOWERS, J. (1990). Agriculture and Rural Land Use: Into the 1990s CRAMER, G. L. and JENSEN, C. W. (1991). Agricultural Economics and Agribusiness GREELEY, M. (1991). Postharvest Technologies: Implications for Food Policy Analysis. EDI Development Policy Case Series, Analytical Case Studies, Number 7 MINISTRY OF AGRICULTURE, FISHERIES AND FOOD. (1991). Fifty Years of the National Food Survey. 1940–1990 VAN OORT, G. M. R. A., VAN DEN BERG, L. M., GROENENDIJK, J. G. and KEMPERS, A. H. H. M. (eds.) (1991) TRACY, M. (ed.) (1991). Farmers and Politics in France WARREN, D. M. (1991). Using Indigenous Knowledge in Agricultural Development. World Bank Discussion Papers No. 127 WISE, T. E. (ed.) (1991). Agricultural and Food Research - Who Benefits? CAS Paper 23 YOUNG, M. D. (ed.) (1991). Towards Sustainable Agricultural Development     

BOOK REVIEWS

Book reviewed in this article: Decisions Under Uncertainty with Research Applications. By A. N. HALTER and G. W. DEA Cost-Benefit Analysis. By E. J. MISHAN Systems Analysis in Agricultural Management. Edited by J. B. DENT and J. R. ANDERSON Foundations of Farm Policy. By LUTHER TWEETEN Institutions in Agricultural Development. Edited by M. G. BLASE The Reluctant Farmer. The Rise of Agricultural Extension to 1914. By ROY V. SCOTT The Sino-American Joint Commission on Rural Recomtruction. By T. H. SHEN Bank Credit to Farmers for Irrigation Development. By RESERVE BANK OF INDIA Conditions Necessary for Agricultural Growth. By A. N. RAJAMANI Agricultural Development and Population Growth. By R. N. TEWARI Agricultural Price Stabilization in India. By B. Y. JHA Economics of Land Consolidation in India. By S. K. AGARWAL     

Addressing water contamination from concentrated animal feeding operations

Pollution from concentrated animal feeding operations (CAFOs) in the United States is impairing water quality. CAFOs have been designated as point sources of pollutants, so under the Clean Water Act, they need a permit before they discharge pollutants into federal waters. Federal regulations known as the CAFO Rule delineate particulars about which CAFOs need permits and details about how CAFOs must minimize discharges of pollutants. The provisions of the CAFO Rule have been controversial. Revisions in 2003 and 2008 were challenged by agricultural and environmental groups for not complying with the requirements set forth by federal law. Agricultural groups feel the rule imposes too many costs and that some of the regulatory provisions are invalid because they not pursuant to any statutory authority. Environmentalists feel that the rule does not provide sufficient requirements to prevent discharges of pollutants. The analysis of five major issues illuminates the challenges faced by governments as they make efforts to limit contamination of water resources.     

The Evolution and Implications of the U.S. Food Security Act of 1985

The Food Security Act of 1985 sets the United States (U.S.) policy course for the five years, 1986–1990, in the areas of farm product prices and farmer incomes, agricultural production, food aid, and trade in agricultural products. It is clearly an evolution of past policy, deeply rooted in the institutional processes of participatory policymaking. The Act will have important implications for not only domestic producers, consumers, agribusinesses, and taxpayers, but alto product agricultural exporters and importers around the world. Just as it was substantially, affected by the current loss of export markets and the economic crisis in the U.S. agricultural sector, its implementation and impacts will be affected in the future by the unpredictable weather, macroeconomic conditions around the world, and international trading policies. This article examines the development of the policy embodied in the Act and analyzes its primary economic implications. Although most provisions of the U.S. agricultural price and income policy that had evolved over the past half century were continued, important changes were made. The resulting policy closely mirrored the preferences revealed from research concerning farmers and leaders of national agricultural and food interest groups. Primary changes from the previous 1981 Act were: lengthening the duration to five years; substantial lowering of the minimum price support levels; permitting a gradual decline in the minimum target prices; providing for a whole dairy herd buyout program; establishing export enhancement initiatives through credit, promotion, and export payment-in-kind (PIK); and initiating major efforts to increase farmland conservation and withdrawal of fragile lands from production. Likely implications of the new Act include: (1) lower product prices for agricultural producers around the world, and also farmer incomes if there is no income protection from national policies; (2) a similar but a less proportionate impact on consumers; (3) a substantial burden on the U.S. Treasury, and possibly those of the other nations as well, depending upon the type of policies followed; and (4) likely intensification in the immediate future of the economic conflicts and negotiations between major agricultural trading nations of the world. Research played a vital role in the development of the U.S. 1985 Act. Given the turbulent, uncertain, and important nature of the agricultural and food sector in the world, research is challenged to provide more and better knowledge for future policymaking.     

Income Stabilization For B.C. Hog Producers

The objective of this paper is to estimate the costs and effects of federal and provincial government programs designed to stabilize the incomes of B.C. hog producers. Simulation was used to provide these estimates. This involved building a mathematical model of the B.C. hog industry, including important supplyldemand relationships and the operating characteristics of alternative stabilization schemes. Successive runs of the model were made, each assuming operation of a different stabilization scheme. Results are presented for the current Agricultural Stabilization Act and a guaranteed margin approach (federal) and the B.C. Swine Producers' Income Assurance Program (provincial).
L'Objectif de cet article est d'bvaluer les couts et les effets des programmes provinciaw et fkdtraux destints il stabdiser les revenus des producteurs porcins de la Colombie Britanique. Ces evaluations one ttt obtenues par simulation. Ceci a nktssitt la construction d'un modMe mathtmatique du secteur du porc de la Colombie Britanique, comprenant d'une part des relations d'offre/demand et d'autre part les caracttristiques operationnelles des divers plans de stabilisation. En supposant A chaque fois I'application d'une plan difftrent de stabilisation, des simulaitons successives one Ctt entreprises pour I'actuel plan ftdtral de Stabilisation (Agricultural Stabilization Act), le plan fedtral de marge guarantie. et le programme provincial actuellement utilist en Colombie Britanique (B.C. Swine Producers Income Assurance Program).     

BOOK REVIEWS

Book reviewed in this article: Accounting and Planning for Farm Management Consumer Behaviour. By A. S. C. EHRENBERG and F. G. PYATT Farm Management and Agricultural Economics: an Introduction. By J. B. HARDAKER, J. N. LEWIS and G. C. MCFARLAN Studies in Agricultural Credit. By ECONIOMIC DEPARTMENT, RESERVE BANKOF INDIA Management and the Social Sciences. By T. LUPTON Initiation à la Gestion Prévisionnelle de l'Entreprise Agricole. By P. DU BOULLAY and M. DESCLOS LE PELEY     

美国农业经济学科变迁及对中国的启示

本文对美国农业经济学科不同发展阶段进行了总结,描述了美国农业经济学科如何从传统农业经济学逐渐拓展到资源与环境经济学、农村社区管理和AgribusinesS的过程,美国农业产业变迁、就业市场变动和产业外部环境变化是导致美国农业经济学科变迁的根本原因。最后,结合当前中国农业经济学科的现状,提出了相关学科发展的建议。     

Book Reviews

Book reviewed in this article: The World Grain Trade: Grain Marketing, Institutions, and Policies edited by M. J. McGarry and A. Schmitz Boulder CARGILL: Trading the World's Grain W. G. Broehl, Jr. Hanover, N.H. Costs and Returns for Agricultural Commodities: Advances in Concepts and Measurement edited by M. C. Ahearn and U. Vasavada Boulder Rural Development in Taiwan and Mainland China edited by P. Calkins, W. S. Chern and F. C. Tuan Boulder     

Reviews

Book reviewed in this article: VAN DEN Ban , A. W. and Hawkins , H. S. (1988). Colman , D. and Lee , Cooper , A. F. (1989). British Agricultural Policy 1912-36: A Study in Conservative Politics. Dooney , S. (1988). Irish Agriculture: Lee , R. D., Arthur , W. B., Kelley , A. C., Rodgers , G., and Srinivasan , T. N. (eds.) (1988). Nadkarni , M. V. with Syed Ajmal Pasha and Prabhakar , L. S. (1989). Repetto , R. and Gillis , M. (eds.) (1988). Public Policies and the Misuse of Forest Resources. Sagoff , M. (1988). The Economy of the Earth: Philosophy, Law and the Environment. Tarditi , S., Thomson , K. J., Pierani , P. and Croci -Angelini , E. (eds.) (1989). Brief Note: Anderson , J. R. and Hazell , P. B. R. (eds.) (1989). Variability in Grain Yields: Implications for Agricultural Research and Policy in Developing Countries. Brief Note: Crittenden , R. and Lea , D. A. M. (1989). Integrated Rural Development Programmes in Papua New Guinea. Brief Note: Longworth , J. W. (ed.) (1989). China's Rural Development Miracle, With International Comparisons. Brief Note: OECD (1989). Agricultural Policies, Markets and Trade: Monitoring and Outlook 1989.     

The influence of diversification on long-term viability of the agricultural sector

We estimate the impact of diversification on the performance of farm businesses using measures of economic viability among farms in Scotland and Sweden. We derive indicators of viability using national level accounting surveys for the period 2000–2012 and account for short-term and long-term effects within our estimates of viability.A higher proportion of Scottish farms emerge as being more short-term and long-term viable than Swedish farms. This could, we propose, be due to emphasis on enhancing farm viability within Scottish planning for rural development, compared to Sweden which emphasized productivity and environmental enhancement. Moreover, for both countries the trend in viability is relatively stable until 2007, when both panels begin to display the impact of policy and market change.Findings based on a multinomial logistic regression indicate that farms which run additional ventures outside traditional agriculture, and are diversified in the sense that they obtain revenue from two or more agricultural enterprises, are more viable compared to specialized agricultural units. Other factors which affect viability were found to be structural, biophysical and institutional, specifically the reform of the Common Agricultural Policy (CAP) in 2003. However the significance and magnitude of these effects differ across the two countries. Consequently, these results seem to imply the importance of emphasizing non-specialized agricultural activities within rural development policy and, moreover, informs the rationale behind proposed redistributions of CAP payments.     

Rural nonfarm employment and farming: household-level linkages

This article introduces the articles in Agricultural Economics , vol. 40 no. 2 (March 2009). First, we introduce their objectives in a brief review of existing literature on developing country trends in rural income diversification, in particular rural nonfarm employment (RNFE) and its impact on farm technology choice in crops and livestock, and thus on agricultural modernization and diversification. Then we preview the key points of the articles, which use distinctive primary datasets from Albania, Bulgaria, China, India, Mexico, Nigeria, the Philippines, Senegal, and Vietnam to document the impacts of RNFE and their implications for farm technology and farm activity.     

Book Reviews

Book reviewed in this article: Tangermann, S. and Banse M, (eds) 2000. Central and Eastern European Agriculture in an Expanding European Union Antle, J. M. and Smith, V.H. (eds) 1999. The Economics of World Wheat Markets, CABI Publishing Johnson, R. W. M., with a commentary by R. Howarth. (2001). reforming EU Farm Policy: Lessons from New Zealand Grant, Wyn P. and Keller, John T. S. (eds). Agricultural Policy: Volume I – Agricultural Policy in Western Europe; Volume II – Agricultural Policy in Global Perspective OECD Agricultural Outlook 2005–2005