Interrelationship Among Export Markets, Resource Conservation, and Agricultural Productivity

Abstract

ern farm prosperity. While the public invested in a multibillion dollar supply and marketing control program over several decades to provide agriculture an equitable share of national income, the effects were somewhat minute in improving farm prosperity and asset values compared to the quantum jump resulting from greater exports since the early 1970s. The sources of these increases, greater incomes and populations of developing countries, institutional changes causing the Soviet Union and China to enter Western markets, and generally higher per capita incomes and meat consumption the world over, hasbarring the negative fallout of major wars-the prospects of furthering the demands for U.S. grain and food exports. This newly acquired prosperity and wealth for agriculture in the immediate future does not necessarily promise a continued payoff for the next generations of farmers. There are two potential reasons that maintenance and further growth may not benefit equally the next generations. One is the tendency of current generations to capitalize the future growth in demand and income for U.S. agriculture into present land values. They have already banked this future return to an extent that the current return on land investment is very low. While numerous agricultural economists have proclaimed that exports and export policies are the significant future issues of agriculture (Schuh), this is true mainly for farmers who are land owners and have been or will be able to take advantage of the tremendous inflation in land values, resulting from general inflation and the growth in export demand and domestic commodity pric s, and realize huge gains in their asset values. Of course, their descendents who inherit these enhanced asset values similarly will gain. If land prices forever, owners of farm land and their offspring will o gain forever, just as will holders of gold and scarce works of art if they continue to inflate forever.