Optional Uses for Excess Resources in U.S. Agriculture: Discussion

Abstract

Thirty years ago, at the joint meeting of the American Economic Association and the American Farm Economic Association, Karl Brandt, of Stanford University, chaired session on Policy-Recent Changes and Future Implications. In the lead paper Willard W. Cochrane provided . .. (1) description of government in agriculture as of 1956-57, (2) an appraisal of the parity idea in price supporting actions, (3) an appraisal of surplus disposal activities and the development of markets, and (4) an appraisal of production control activities. The Soil Bank had just come into being with its attendant adverse publicity, public debate, and high (for that time) U.S. Treasury costs. A comparison of the papers in this session with those in 1956 and subsequent debates in the remainder of the 1950s suggests thirtyto thirty-five-year cycle in agricultural policy. Surely, it's just coincidence, but this also happens to be about the professional life span of agricultural economists. Purcell's paper offers cornucopia of ideas, opinions, value judgments, and hypotheses (supported and unsupported) that will surely stimulate debate and discussion in our profession. In the first few paragraphs he redefines the responsibilities of the profession to include sociology, psychology, and other social sciences, challenges Malthus, affirms that the competitive system will adjust resource use and criticizes government programs. Yet, in later statements he proposes more government intervention but supports the goal of preserving and enhancing efficiency in production, fabrication, and distribution of foods and kindred products. Even so, his arguments in support of the excess capacity thesis are very persuasive. If the overriding goal is to enhance domestic food prices, then I agree with Purcell that we must restrict the resources used to produce those products. However, I would want considerably more information than has been provided before supporting his proposal for resettlement ventures on marginal croplands and for other uses with an area versus an individual farm focus. Even if such were cost effective, would meet environmental standards, and would not adversely impact one segment of the population, I am not sure that economists and agronomists, or anyone for that matter, has or should have the ability to decide which areas are marginal for crop production under future conditions. How are you going to quickly return these areas to production to accommodate serious, always unanticipated, worldwide food shortages? How do you compensate for the impact upon the local economy, local governments, and local institutions associated with the loss of agriculture's contribution? Will enough people utilize the hunting preserves and zoos to offset the loss of agricultural economic activity? Will timber production sustain the local economy and local institutions? How would whatever income is generated by these activities be distributed and to whom? When you idle land, you also idle labor, management, and capital and reduce economic activity. Even though there are many unanswered questions, the idea of an area approach is intriguing, and I would encourage continuing its evaluation. I agree with Purcell's statement that a major challenge to the profession is that of providing guidelines for more orderly adjustment in the agriculture-food system. Particularly, he calls for new approaches to manage the excess capacity in the U.S. agriculture-food system and simultaneously enhance competitiveness in international markets. This suggests that effective programs must involve both supply adjustments and efforts that affect the demand side of the price equation. Reliance on supply management (management of excess capacity) alone will lead to some seVerner G. Hurt is professor and head of the Department of Agricultural Economics at Mississippi State University.