Decoupled Farm Payments and Expectations for Base Updating

The degree to which U.S. farm programs are decoupled from production has been a central issue in recent trade disputes. Several authors have suggested producer expectations for base acreage and yield updating in future farm bills create an incentive to alter planting and input decisions. This article reports analysis of the subjective expectations of producers for base updating and an analysis of the effect these expectations have on producer willingness to accept a buyout of the right to update. On average, producers think the chances of updating in the next farm bill are about 40%, but less than 17% indicate adjusting acreage or yields in anticipation of updating.     

Cropland expansion and grassland loss in the eastern Dakotas: New insights from a farm-level survey

The western Corn Belt region of the United States has become a hotspot for agricultural extensification and consequent land use and land cover changes. The goals of this research were to characterize geographic patterns of grassland loss resulting from cropland expansion in the eastern Dakotas, and to understand how these changes were associated with characteristics of individual farms and farm operators. We collected data on grassland conversion and other land use decisions through a mail survey of farm operators in North and South Dakota. Overall, 40% of respondents converted at least some grassland to cropland between 2004 and 2014, and the total acreage of converted grassland was equivalent to 5.1% of the surveyed farm acreage. Although most converted grassland acres (3.2% of farm acreage) were from land enrolled in the conservation reserve program (CRP), there were also substantial amounts of native grassland conversion (1.0%) and tame grassland conversion (0.9%). The total acreage of grassland conversion was more than four times larger than the acreage enrolled in CRP and other conservation programs. Different types of grassland conversion (e.g., native grassland versus CRP) were concentrated in different parts of the study region, and were spatially disjunct from the areas of highest conservation program enrollment. Larger farms were more likely than smaller farms to expand their cropland acreage and accounted for a disproportionate share of grassland conversion. Younger farm operators, higher levels of farm income, higher proportions of rented croplands, and marginal yields were also associated with cropland expansion and grassland conversion. Although CRP and other land retirement programs will remain important policy mechanisms for conservation in this region, they are not sufficient to maintain current levels of grassland cover and do not provide protection for native grasslands. Alternative conservation strategies and new agricultural policies are thus critically needed to maintain the ecosystem services provided by grasslands.     

Assessing effects of federal crop insurance supply on acreage and yield of specialty crops

Crop insurance may affect harvested acreage and yield by influencing producers’ behavior such as land allocation and input use. Although specialty crops are a major source of farm income, especially on the U.S. west coast, they have not received as much attention as field crops in previous empirical studies. This paper assesses the effect of moral hazard and adverse selection associated with the federal crop insurance program (FCIP) on the acreage and yield of major specialty crops in California. An econometric method that expands the switching regression model is developed to assess the effect. Results suggest that federal crop insurance can change specialty crop growers’ production responses to climate and soil conditions. The moral hazard effect tends to increase the acreage and yield of the specialty crops, whereas the adverse selection effect tends to have the opposite effect. The overall effect of the FCIP on acreage and yield of specialty crops is found to be moderate.     

Resisting agrarian neoliberalism and authoritarianism: Struggles towards a progressive rural future in Mozambique

After nearly two and a half decades with a Land Law widely considered progressive, Mozambique is preparing to revise its legal framework for land. Land activists accuse the government of pursuing an authoritarian approach, excluding civil society participation, and falsifying public consultations. The revision would mark a major shift in Mozambique's land policy towards an even more neoliberal framework to allow the transfer of individual land titles. This turning point is a crucial moment for popular movements to mobilize against the consolidation of agrarian neoliberalism and fight for pro-poor land policy that benefits small-scale food producers and rural communities at large. While recognizing different rural and agrarian class formations and interests in Mozambique, I argue that embryonic forms of a cross-class alliance are becoming apparent. As deagrarianization proceeds, the National Union of Peasants (UNAC) plays a key role in mobilizing the rural poor — petty commodity producers, farm workers, fishermen, small agrarian capitalists, and agrarian civil society at large — using left-wing populism to oppose agrarian neoliberalism, which takes authoritarian forms.     

Evaluating The 1966 Agricultural Census1

The extent and direction of both coverage and content errors in the 1966 Census of Canadian Agriculture are of prime interest to the user of the resultant statistics. This paper outlines the general concepts involved in Census evaluation and methods of analysis used to measure quality. Results for the Maritime provinces indicate a statistically significant under-enumeration in farm numbers, total acreage, cropland acreage, hayland, and unimproved land including woodland in the 1966 Agricultural Census.     

An economic analysis of farm forestry as a means of controlling dryland salinity

Large areas of agricultural land under conventional crops and pastures are at risk of dryland salinisation in Australia. The salinisation problem can be controlled by strategic and large-scale planting of trees; however, farm forestry enterprises evaluated with conventional discounting techniques do not generally rank as an attractive alternative to annual crops on productive land. In this article, an optimal control model that explicitly accounts for decline or improvement in land quality over a period of 40 years is presented. The optimal area planted to trees and the optimal groundwater-table trajectory through time are determined under a variety of scenarios. Implications of the results for policy design are discussed.     

Inter‐ and intra‐seasonal crop acreage response to international food prices and implications of volatility

Understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and, hence, assessing the global food supply situation. This study makes estimations of monthly (i.e., seasonal) versus annual global acreage response models for the world's principal staple food crops: wheat, corn, soybeans, and rice. Primary emphasis is given to the magnitude and speed of the allocation process. Estimation of intra‐annual acreage elasticity is crucial for expected food supply and for input demand, especially in the light of the recent short‐term volatility in food prices. The econometric results indicate that global crop acreage responds to crop prices and price risks, input costs as well as a time trend. Depending on respective crop, short‐run elasticities are about 0.05 to 0.40; price volatility tends to reduce acreage for some of the crops; comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations. Given the seasonality of agriculture, time is of an essence for acreage response. The analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months.     

Payment Limitations and Acreage Decisions under Risk Aversion: A Simulation Approach

Payment limits have played an important role in U.S. farm policy deliberations for the last thirty years. Current limits are largely nonbinding. Proposals to strengthen and enforce limits are currently in discussion. We evaluate the likely effects of such proposals on acreage for corn, soybeans, wheat, cotton, and rice in several important producing states. Our results generally indicate that payment limits are unlikely to significantly affect acreage in most cases; exceptions occur for cotton and rice, where the probability that limits would be binding is much greater and thus more likely to affect production.     

Producers Get Squeezed up the Farming Food Chain: A Theory of Crop Portfolio Composition and Land Use

There are a number of seemingly contradictory trends in the structure of American agriculture. For example, total revenues from agriculture in the United States continue to increase nearly every year, yet the total acreage of land in farms continues to decrease. This article presents an explanation using portfolio theory that is consistent both with the trends and with rational behavior of individual producers. The results have implications for commodity markets, land prices, and, in the long run, for the economic viability of American production agriculture.     

The Impact of Price Stabilizing Policies on the Risk Efficient Crop/Fallow Decisions of Wheat Farmers in the Brown Soil Zone of Saskatchewan

The micro-linkages between the crop/fallow decision and price-induced risk are examined for wheat producers located on the brown soils of Saskatchewan. Three generic price stabilization policies are defined. Based on a bio-economic simulation model, the risk-efficient FLEXCROP decision rules are selected, and their corresponding cropping patterns are assessed for each generic price stabilization policy. Assuming no subsidy component within the mandatory price stabilization program:
• risk lovers reduce cropped acreages by 0% to 4%, depending upon both the risk-aversion level and the stabilizing program and
• risk-averse producers increase cropped acreage from 10% to 35% over no price stabilization.     

The Influence of Commodity Programs on Acreage Response to Market Price: With an Illustration Concerning Rice Policy in the United States

Farm programs influence the parameters of typically estimated supply functions. We develop and apply an approach that uses detailed information about farm program incentives and constraints to identify underlying structural acreage response parameters when the data reflect behavior under complex government commodity programs. We illustrate the approach with data on rice acreage response to market price in the United States. For U.S. rice, estimates that fail to appropriately incorporate the program rules under which market data were generated are three to four times smaller than the structural parameters that are useful for most policy analysis or projections under alternative policies.     

SUPPLY RESPONSES IN THE SOUTH AUSTRALIAN POTATO INDUSTRY

The potato industry in South Australia is characterised by very unstable prices. One hypothesis for this instability is that potato growers' acreage responses follow a cobweb pattern, that is, a one year lag of acreage to price. This hypothesis is tested, together with a two year lag and a distributed lag. The distributed lag model seems the most satisfactory and gives a short-run elasticity of acreage to price of 0.36 and a long-run elasticity of 1.09. An alternative to the lagged price hypothesis is the "constant cash return" hypothesis which postulates that potatoes are grown to provide a certain cash income to permit farm development. This explanation of acreage response only seems relevant in the dairying and fat lamb areas of the State.     

Technology,market policies and institutional reform for sustainable land use in southern Mali

To identify appropriate interventions that support sustainable land use; a farm household modelling approach is applied to analyze micro-economic supply reactions to various policy measures. The modelling framework links agro-technical and economic data, and takes both production and consumption decisions into account, allowing land use and production technology adjustments in accordance with farm household objectives. Different types of farm households are distinguished on the basis of their resource endowments, savings coefficients and time discount rate. Actual and alternative (sustainable) cropping and livestock activities for different weather regimes are defined for southern Mali. The effects on sustainable land use and expected farm household welfare of adopting alternative technologies and modifying prices, transaction costs, access to credit and land taxes are demonstrated. Even with full information on sustainable technologies, strong policy interventions are required to halt soil degradation. Structural policies proved to be more effective than price policies to reduce soil degradation while maintaining positive income effects. When prices are determined endogenously, structural policy loses some effectiveness as an incentive for sustainable land use due to the effect of additional supply on local cereal and meat Prices.     

基于AHP的双河农场土地资源优化配置评价研究

本文从经济、社会、环境三个方面构建了双河农场土地资源优化配置评价指标体系,以2009年双河农场数据为主要评价依据,采用层次分析法,用Matlab软件进行数学计算,对双河农场土地资源优化配置进行评价研究,并提出优化双河农场土地资源配置的对策建议。     

A Market-Forces Policy for the New Farm Economy?

This paper first discusses the changes that are bringing about the New Farm Economy. A wave of consolidation has shifted agricultural production to larger, lower cost producers in almost all sectors of agriculture. At the same time, supply chains represent a new form of ownership and control that is replacing commodity markets as the preferred way to market farm output. Both consolidation and the development of supply chains offer the possibility of producing a greater variety of safer, cheaper food. The paper argues that farm policy, crafted for the agriculture of the 1930s, is no longer necessary to raise or stabilize farm incomes, and is largely ineffective anyway. Moreover, farm policy impedes the market forces driving innovation and efficiency in the farm economy. Letting market forces guide the evolution of the farm economy, unfettered by outdated government programs and unnecessary farm subsidies, is the best way to harness the benefits of the New Farm Economy. Getting rid of government subsidies and control will lead to dramatically fewer farmers in agriculture: a policy to deal explicitly with those who will leave agriculture is needed. A transition policy is described that focuses on helping reduce the number of farmers by offering a buyout to farm producers which subsidizes their exit from farming and prevents reentry.     

Rationale and Motivation of Agricultural Producers in Adopting Crop Rotation in the Northern Great Plains,USA

Despite several environmental and economic benefits of crop rotation, the adoption of this agricultural practice is relatively low. Understanding the reasons for low adoption is important from a sustainability policy perspective. This study explores the motivation, challenges, and sources of information of agricultural producers who participate in crop rotation practices in South Dakota, North Dakota, and Nebraska. The findings of a mail survey of 672 producers in these three states show that producers are familiar with the crop rotation practice. Economic profitability is found to drive motivation for crop rotation adoption. The results of a binary logistic regression model show that a producer who perceives that crop rotation is beneficial to farm profitability is 1.83 times more likely to adopt it than the producer who does not believe in its profitability to the farm. The lack of time or resources is the primary barrier to the adoption of crop rotation practice. This study provides additional evidence in support of the importance of farm profitability for the adoption of the practice of crop rotation. Understanding the rationale and addressing the challenges faced by agricultural producers would be useful in planning and policy making of sustainable agriculture.     

An Evaluation of the Ontario Farm Business Management Association Program

The Ontario Farm Business Management Association (FBMA) program was initiated to improve the business management skills of Ontario red meat producers. The program has three aims:

• •

  to increase management skills on the farm
• •

  to increase management skills in the private sector
• •

  to help farmers make use of private sector advice.

Two methods were used to evaluate the program. First, FBMA members and other red meat producers were surveyed about their farm and personal characteristics as well as use farm records and information sources. Second, focus groups were held with the FBMA field persons. Results indicate that membership in an FBMA increased the collection and use of farm records, but that there was no significant increase in the use of private sector consultants by the producers. Moreover, FBMA members indicated a very low willingness to pay to support their FBMA if government funding were stopped.     

Owned or rented—does it matter? Agricultural land use change within farm properties,case studies from Norway

In Norway and many other countries agriculture has moved toward less, but bigger farms. Total agricultural area has not been much affected mainly due to land tenancy. In this study we used aerial photographs to map land use and land cover in agricultural areas at present and in the mid-sixties. Three study sites were chosen, representing areas of differences with respect to drivers of change and possible differences in their landscape outcome. Maps from the two periods were used to produce transition matrices for the three areas as well as within each farm property. Our main finding on acreage change is that fully cultivated land increases and pastures decreases. A novel feature in our study is that we also include land use changes within single properties. In all three places a large share of the fully cultivated land in the sixties remains fully cultivated land irrespectively of whether the land is in use by its owner or is rented. When we looked at increases of fully cultivated land, the results are mixed. In the less favorable region, ownership to land versus rented land helps explain the variation in gain of fully cultivated land as well as maintained total agricultural area. However, in the case study from the grain region, whether a farm property today is in use as own land or rented, do not help explain the variation in changes within the data sample of farm properties larger than one hectare.     

SOME CURRENT POLICY ISSUES*

A number of current policy issues are discussed which illustrate serious confusion and economic illiteracy in the minds of many influential farm leaders. The issues discussed are: the cost-price squeeze in agriculture; the embargo on the export of merino rams; promotion of farm products; land policy; and tax concessions for agriculture. In some cases policies are followed which run counter to both farmer and national interests. Along with farm management extension, there is a growing need for agricultural policy extension.     

The political economy of agriculture for development today: the “small versus large” scale debate revisited

The role of agriculture in economic development and the development politics of promoting smallholder versus large‐scale agriculture have both been at the center of a long‐lasting and controversial debate. Using an innovative methodology which combines a value chain approach with input‐output‐analysis, the growth multipliers and productivity of both farm types in Guatemala are analyzed. Results show that smallholder agriculture has the same potential to stimulate output growth as large‐scale agriculture. Smallholder value chains include mainly informal sectors and create more jobs than commercial agriculture. Therefore, a reorientation of agricultural and land policies toward small‐scale food producers and within a comprehensive policy of integrated rural development is not only necessary in terms of social equity but also for boosting economic development.