Jeffrey Perloff has done a fantastic job organizing the first ever NBER workshop on agricultural economics. Here's the program. I just booked my ticket and am really looking forward to it.
This was a difficult thing to do and many kudos to Jeff for all his efforts. Polite folks don't say it out loud, but the truth is that many econ folks see ag. econ. as the ugly stepchild of economics, and so it's quite a feat to have an ag. econ. grace the halls of the relatively exclusive NBER. I hope this helps to whittle down silly intellectual barriers.
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A couple months ago the New York Times convened a conference " Food for Tomorrow: Farm Better. Eat Better. Feed the World ." ...
It's amazing how upon completion of a masters degree in agricultural economics, people still look at you as a farm kid who should be managing a cotton farm or selling seed, and won't even take you serious at a job interview or upon receiving a resume. Its sad, but unless one wishes to pursue a career in academics or the usda, I would never recommend someone to pursue a masters in ag econ, for the reasons stated in your post.
ReplyDeleteQuestion: As I understand it, which may not be too well, crop price supports or subsidies were instituted after WWII as a way of stabilizing the farm economy. The chief alternative was farmer supports, or income supports directly to farmers.
ReplyDeleteSince the former have led to homogeneous crops, industrial farms and the disappearance of the family farm, have there been any serious efforts to return to the original choice?
If you could direct me, I would appreciate it.
Alan,
ReplyDeleteThanks for your comment.
None of the economists I know seem to be fans of agricultural subsidies. I think they exist for obvious historical and political reasons. But to suggest that farms would go back to the way they were before WWII if subsidies were removed is very naive (sorry).
You may want to look at this post
http://greedgreengrains.blogspot.com/2009/04/six-stylized-facts-about-us.html
Anyway, most farms are still family farms, even most of the big ones, it's just that those family farms are pretty big and reasonably wealthy, not small and poor like they were before WWII.
While it's hard to know for sure, I don't think removing subsidies would change this very much. (Although my own research suggests otherwise, see
http://ideas.repec.org/p/ags/aaea06/21097.html ).
I'm not a big fan of subsidies, mainly because I don't think they're fair (why do farmers get subsidies and not other small businesses?). But in the big scheme of things I think the social consequences of them is mostly small potatoes. Important exceptions include ethanol subsidies and sugar quotas.
Sorry, did not suggest there be no subsidies or a return to pre-WWII ways. If there is some confusion, I suggested that the crops not be subsidized, but the farmers themselves.
ReplyDeleteAs for example, favorable treatment for core acreage or free health care or something like that. The crop subsidy scheme to me has led directly to the big is better by way of the marginal cost of farming another acre always being below the average cost.
Big farms are wealthy, is what I hear you saying. To say that they are family farms ... They are mechanized, industrialized, chemicalized. I have in mind something other.
Alan,
ReplyDeleteToday's subsidies, most of them anyway, are much like you suggest: they are not really attached to how much farmers produce. The subsidies mainly come from "direct payments," "counter-cyclical payments". You can google those terms to learn more about them. The so-called "decoupled" nature of these payments makes it very hard to see how they might effect output or farm size.
I've been pooring over this issue for a very long time. I see a lot of puzzles and think there may be greater implications of the subsidies for farm sizes and output--greater than most practicing ag. economists, anyway (you can probably find this research of mine by googling or checking out my vita). But I still think the overall effects are probably small.
I say probably because 'smoking-gun' evidence is really, really hard to find. And some of the evidence we do have suggests the effects of these decoupled payments may be bigger than we think.
Thought I posted this response already:
ReplyDeleteIt seems improbably that the connection between subsidies and bigness has not been thoroughly investigated. Is this really true? As I understand it, 85% of subsidies go to 15% of farmers and 100% go to five or six crops.
But if you can give me feedback on nothing else, how about the proposition that bigness is driven by the fact that the marginal cost of farming an additional acre is always less than the average cost. Thus, reversing the calculation by favoring core acreage or maybe just free health care for farmers, not laborers, might help.
I will check out your research as soon as. Thanks.