Date post: | 31-Dec-2015 |
Category: |
Documents |
Upload: | brent-robinson |
View: | 216 times |
Download: | 1 times |
AAPPCCAA
New Directions for Agricultural New Directions for Agricultural PolicyPolicy
Daryll E. RayUniversity of Tennessee
Agricultural Policy Analysis Center
Farm Bureau Farm Policy ForumWashington D.C.
April 15, 2011
AAPPCCAA
Long-Term and Shorter-Long-Term and Shorter-Term ConsiderationsTerm Considerations
• Long-term: Past, present, and future configurations of U.S. agricultural production– Food/fuel to exports back to food/fuel?
• Shorter-term: Safety net rhetoric vs reality– Direct payments and revenue insurance
– Etc.
AAPPCCAA
Configurations of U.S. Configurations of U.S. AgricultureAgriculture
• At one time, configured to produce fuel as well as food/feed/fiber– Firewood– Oats, hay, pasture for “horsepower”– Part of a very diversified agriculture
• Crop rotations• Livestock on nearly every farm• Provided own weed/pest/plant nutrient measures• Even for years after gasoline replaced oats as a
horsepower fuel, farms continued diversified
AAPPCCAA
Configurations of U.S. Configurations of U.S. AgricultureAgriculture
• Export-driven production configuration last part of the 20th century– Crop exports exploded in the 1970s– U.S gobbled-up those 1970s exports – Production configuration moved to
• Specialized crop production (corn/soybeans)• Livestock on few farms (one specie if any)
– Exports fell and leveled off in 1980s• Revamped policies to “get back our rightful
share of exports”
AAPPCCAA
Configurations of U.S. Configurations of U.S. AgricultureAgriculture
• One vision for the future is a return to a fuel/food/feed/fiber configuration of US agricultural production that– Better utilizes agriculture’s resource base to
simultaneously• Produce an expanded share of the U.S.’s motor
fuel needs• While continuing to fully supply domestic and
export quantities of food/feed/fiber
– Improves soil quality and productivity
AAPPCCAA
Back to the Future?Back to the Future?• Only in the sense of general categories of
output– 21st century technologies– 21st century soil and environmental considerations
• Michigan State University researchers provide one visual comparison of– Today’s configuration of US agriculture– And an example of a future energy/food/feed/fiber
agriculture
AAPPCCAA
Assumes…Assumes…• Continued investments
– Ethanol delivery infrastructure– Flexible fuel vehicles– Fermentation/enzyme technologies– Commercial development of synergetic
animal feed/ethanol technologies that improve digestibility and availability of protein
• Additional acreages of cellulosic biomass crops, including perennials such as switchgrass or Miscanthus
AAPPCCAA
Some Net ImpactsSome Net Impacts• Improved soil quality/productivity
– Increases soil organic matter– Promotes diversity of organisms– Reduces erosion and water retention– Increases sequestered carbon– Additional crop diversity and revenue sources for crop
farmers
• Reduces need for imported oil– Improves balance of payments– Reduces need to defend interests in Middle East
AAPPCCAA
That’s nice but what That’s nice but what about the present??about the present??
• Well, it seems we have it all backwards– What is least important right now is receiving the most
attention• Agriculture does not need direct payments or insurance that
ensures extraordinary profits• Safety net? Safety net for what??
– While continuing needs are being ignored or marginalized
• Nutrition/conservation/energy independence• Protecting farmers when priced are low• Protecting availability/prices for users
AAPPCCAA
Safety Net for What?Safety Net for What?
• Direct payments…– Are paid even though prices are well north of
all costs– Are an embarrassment whether in rural cafes
or visiting our city cousins– And yet there are demands to continue them
in the next farm bill• Why? Well, because otherwise there would be
virtually no “baseline” money for farm programs (also some special circumstances for rice and cotton)
• Not because they make sense as a safety net (they don’t, of course—totally inadequate when prices collapse)
AAPPCCAA
Safety Net for What?Safety Net for What?
• Revenue insurance products…– Receiving considerable attention– Protect farmers “pure” profits when prices are
really high—could cost tens of billions to do so– When (not if) prices fall and remain below the
cost of production, revenue insurance products “guarantee” a percentage of those below-cost prices (these guaranteed prices could be well below variable costs)
– A safety net that plummets along with prices??
AAPPCCAA
Is a Safety Net Needed?Is a Safety Net Needed?
• Yes, even with the “future configuration of agricultural production”
– Agriculture would still need a safety net
• Low prices in agriculture do not self-correct in a timely fashion (low prices do no cause farmers to idle fields nor consumers to eat 5 meals per day)
• What if U.S. exports were unleashed with a WTO-like free-trade agreement?
AAPPCCAA
US and World exports of Barley, Corn, Oats, US and World exports of Barley, Corn, Oats, Milled Rice, and Wheat, 1980-2010Milled Rice, and Wheat, 1980-2010
Mill
ion
Met
ric
To
ns
World Exports of 5 Grains
US Exports of 5 Grains
AAPPCCAA
US and World Exports of Barley, Corn, Oats, US and World Exports of Barley, Corn, Oats, Milled Rice, and Wheat, 1980-2010 - PercentageMilled Rice, and Wheat, 1980-2010 - Percentage
Per
cen
t
US 5 Grains Exports as % of World
AAPPCCAA
US and World exports of 5 Grains and US and World exports of 5 Grains and Soybeans, 1980-2010Soybeans, 1980-2010
Mill
ion
Met
ric
To
ns
World Exports of 5 Grains and Soybeans
US Exports of 5 Grains and Soybeans
AAPPCCAA
US and World exports of 5 grains and soybeans, US and World exports of 5 grains and soybeans, 1980-2010 - Percentage1980-2010 - Percentage
Per
cen
t
US 5 Grains and Soybean Exports as % of World
AAPPCCAA
So the US Share of World Exports So the US Share of World Exports Has Dropped Precipitously Has Dropped Precipitously
Per
cen
t
US Soybean Exports as % of World Exports
AAPPCCAA
Policy for All SeasonsPolicy for All Seasons• A policy that
– Protects farmers during “hard times”– Not piles on during the “good times”
• A policy that– Helps ensure supply availability for domestic
and export markets (random policy and weather events will occur—plan for them)
• A policy that– Provides long-term sustained funding for
conservation/environmental/energy/rural development/research
AAPPCCAA
Agricultural Policy Analysis Center The University of Tennessee 310 Morgan Hall 2621 Morgan Circle Knoxville, TN 37996-4519
www.agpolicy.org
Thank YouThank You
AAPPCCAA
To receive an electronic version of our weekly ag policy column send an email to: [email protected] to be added to APAC’s Policy Pennings listserv
Weekly Policy ColumnWeekly Policy Column