Chemical use in agriculture has, over the last fifty years, been the good, the bad, and the uncertain. By all accounts, agricultural productivity increased significantly in the last half century due in part to the introduction and expanded use of agricultural chemicals. More recently, however, some agricultural practices, including increased chemical use, are viewed as having a major impact on the larger ecosystem and as being an important source of environmental nonpoint pollution. Recent groundwater-monitoring programs in the United States sponsored by the U.S. Environmental Protection Agency (EPA) have revealed contamination of underground water supplies by pesticides, nitrates, and other industrial organic chemicals. It has also been questioned whether the high rates of productivity growth that have characterized modern agriculture can be sustained with technologies that disrupt the ecosystem. While there is no doubt that production agriculture does affect the ecosystem, it is not obvious that these effects are necessarily widespread and deleterious to the environment or to long-run productivity, or, if they are, how they should be valued and traded-off with other social objectives.

Whereas considerable effort has been expended in prior research in discussing the appropriateness of alternative measures of income in expenditure studies, this paper looks in depth at the impact of incorporating a broad range of demographic variables in the expenditure analysis. Food expenditures away from home are used to analyze the additional gains in explanatory power and the impact of demographic variables on income elasticities. Considerable divergence of results is found under the alternative measures of income.

U.S. peanut, sugar, and tobacco tariff rate quotas (TRQs) are allocated to suppliers on an historical market share basis. Once allocated they become difficult to redistribute to accommodate changes in comparative advantage among suppliers. The distribution of trade departs increasingly from the tariff-equivalent distribution advocated by the WTO principle of nondiscrimination. Article ΧIII of the GATT regarding the rules for historical allocation is examined and applied to four cases of historical allocation: domestic tobacco quota and TRQs for peanuts, sugar and tobacco. The difference between the law enforcement objective of the WTO and the Pareto optimization objective assumed by economists is stressed throughout.

This paper reviews recent work examining two topics of economic research vital for invasive species policy—integration and valuation. Integration requires bioeconomic models that blend invasive biology with economic circumstances and the feedback loops between the two systems. Valuation requires nonmarket valuation associated with human and environmental damages posed by invasive species. We argue for a second-level of integration in invasive species economics—valuation based on integration models. Policy prescriptions based on integration models need valuation work; valuation surveys need integration models—the two are complements. Valuation could be enhanced with integration in mind; integration could be made better with valuation in mind. An example from blending the two research areas is presented and its merits demonstrated.

State programs promoting their agricultural products have proliferated in response to increased consumer interest in locally grown foods. Tennessee, for example, currently has two state-funded programs promoting its agricultural products. This study examines the factors associated with participation by Tennessee fruit and vegetable farmers in those programs. The results suggest that farmer participation is associated with farm income, use of extension resources, and fresh produce sales. These results should be of interest to anyone attempting to increase producer participation in such programs.

This study examines the relationship between generic advertising and perceived value for 100 percent orange juice using data from a survey on consumption, perceived value, advertising awareness, and other key measures. We investigate the relationships between consumption and perceived value and between generic advertising and perceived value and identify features of generic advertising of orange juice that have the greatest influence on consumers. Our analysis indicates that perceived value is strongly associated with increased consumption and is influenced by generic advertising. Generic advertising is most effective when consumers view the content of the ads as genuine and relevant.

Consumption of lowfat and skim milk has increased substantially over the past decade. This study investigates whether the change is due to price and expenditure effects or to a more fundamental preference change in milk demand. Parametric and nonparametric analytical approaches provide a comprehensive analysis of structural change in milk consumption in New York State. A nonparametric approach first finds evidence of structural change. A parametric likelihood-ratio test then confirms the existence of structural change using a Kalman filter specification. The value of this technical analysis of milk preferences is its implication for labeling initiatives. Milk fat labels have allowed consumers to act on a new set of preferences, thereby improving consumer welfare.

Communities in most states are under pressure to reduce the amount of solid waste going into landfills. Many are making efforts to encourage their citizens to practice backyard composting. A logit regression analysis was conducted to identify factors associated with backyard composting of yard and food wastes in a case study area. Sample data were obtained through a September 1997 telephone survey of 865 households residing in single-family dwellings in Knox County, Tennessee. Findings indicate that a number of variables reflecting complementary behavior, attitudes, knowledge, and peer influence were significantly related to composting behavior. Policy implications of these findings are outlined.

U.S. soybean producers have been cooperatively investing in both production research and demand promotion for nearly four decades to enhance the profitability and international competitiveness of their industry. Have producers benefitted from their contributions to soybean checkoff program activities over the years? How has the return to investments in soybean production research compared to that of soybean demand promotion investments? The overall positive returns to producers over the study period resulted primarily from promotion activities. Production research contributed negatively to overall producer returns from soybean checkoff investments.

Since cow-calf operations are large contributors of agricultural greenhouse gas (GHG) emissions in North America, consequences of pasture species composition, weaning age, and stocking rate decisions were examined by operation size, calving season, and pasture fertility. Fixed resource use and seasonal prices affected the mix of forage and beef production. Overall, adding fertilizer to pasture was unprofitable, resulting in increased stocking rates and greater emissions. Calving season and attendant breeding failure rates influenced the relative profitability of the analyzed beef-production strategies, which in turn affected farm GHG emissions. More-efficient practices led to greater amounts of beef sold per bred cow.

The entrance of additional countries into a European customs union, in this case Turkey, and its impact on agriculture are examined. Results from a trade simulation model are used as components of a Political Preference Function and utilized within a game theoretic framework to identify the optimal strategies for Turkey, the EU, and the U.S. Turkey's best interest, from an agricultural perspective, involves adoption of agreements made in the Uruguay round of GATT as a developing country rather than applying EU protection. Although free trade is not the optimal solution, simulations indicate that the solution does involve the reduction of agricultural protection levels.

We examine the determinants of agricultural experiment station faculty salaries and find that productivity pays—as manifest by grantsmanship, publications, and the elicitation of competing offers—with no residual evidence of a negative seniority-salary relationship that could signal university monopsony power. This contrasts with findings in the previous literature on faculty salaries. Moreover, national market salary benchmarks, which may proxy for imperfectly observable productivity, correlate almost one-for-one with individual faculty salaries, with individual deviations from peers’ salaries proving essentially random. This evidence is much more consistent with the hypothesis that experiment station faculty salaries are determined in a competitive labor market than with the prevailing wisdom that they are set monopsonistically.

We focus on rice policy reform required for Taiwan's admission to the WTO, and examine the effects, theoretically and empirically, of the re-instrumentation of domestic policy needed to achieve environmental objectives when both positive and negative environmental externalities exist. Policies that treat non-commodity attributes in agriculture as secondary to existing aims, such as income support, are unlikely to result in the desired supplies of environmental goods. Those supplies can be achieved at lower government and social costs using policy instruments to achieve environmental goals directly. Results are relatively insensitive to the social values assigned to environmental goods.

Despite the rapid rise in complex carbohydrate consumption over the last twenty-five years, fresh potato consumption has fallen by over 50%. Fresh potato growers and retailers alike need to know whether these changes reflect consumer responses to changing relative prices or incomes, or whether they are due to changes in consumer tastes. This paper uses a linear approximation almost ideal demand system (LA/AIDS) to investigate the effect of relative prices, expenditures, and a set of socioeconomic variables on complex carbohydrate demand. Estimation results show that the socioeconomic variables explain some of the changes in demand, but a significant amount remains as evidence of a change in consumer tastes.

This paper examines the role of the life cycle in impacting the distribution of a combined income and wealth measure using data from the 2001 and 2006 Agricultural Resource Management Survey. Such an assessment is made using both graphical representation of the distribution of the well-being measure along with utilization of the social welfare decomposition procedure. Results show a mild yet statistically insignificant improvement in the distribution of the economic measure over the five-year period. Contribution to social welfare is found highest among the cohort where the age of the head of household is between 45 and 54 years. Targeted programs are found to enhance social welfare if they are aimed towards cohorts where the age of the head of household is younger than 35 years or where the age of the head of household is in the 35-to-44 age group, depending on whether the analysis is based on a perfarm household or on a per-capita basis.

Production of milk under various pricing policies were examined for a representative dairy farm operating under the base-excess plan. Three pricing scenarios were examined to determine calving schedule, milk production, and shadow prices. The period May-July was most profitable, and December-January the least profitable months for calving, under the base-excess program in the Mid-Atlantic Order. The representative producer responded to the pricing policies by shifting production in response to changes in the seasonal patterns of the base and excess prices.

Actual Production History (APH) yields play a critical role in determining the coverage offered to producers by the Risk Management Agency's yield-based crop insurance products. Using both county and individual insured unit data, we examine the impact of APH yield trends for Texas cotton and Illinois com. Our findings indicate that biases due to using simple average APH yields when yields are trending upward reduce the expected indemnity and actuarially fair premium rate. The estimated welfare effect also varies significantly with different commonly used detrending approaches. This study demonstrates that producer welfare can be enhanced through proper treatment of yield trends in crop insurance programs.

Increased concern for the environmental effects of pesticides has led to considerable interest in optimal management strategies for controlling pest populations affecting agricultural production. This issue has been considered by a number of researchers (Feder and Regev; Hall and Norgaard; Hueth and Regev; Lazarus and Swanson; Marsolan and Rudd; and Talpaz and Frisbie). With the exception of Feder and Regev, these studies considered only one species. This approach involves serious limitations since a grower is generally confronted with multiple species during the production period For example, insect prey-predator relationships may exist in the field (Feder and Regev). Alternatively, as an insect pest develops through a number of growth stages, multiple pests in effect exist (Reichelderfer and Bender).

The paper by Taylor has merit because it is provocative, but like many things, this can be overdone. His self-described diatribe against neoclassical economics is in special need of a response. He appears to dismiss the notion of utility maximization, but in fact there is nothing to dismiss. Although many economists do not realize this fact, the assumption of utility maximization is not testable. Give me any pattern of behavior by an individual (or a society) and I can give you a utility function which, when maximized subject to whatever constraints that person or society may face, yields the observed behavior. An obvious example would be U = 1 for the observed behavior and U = 0 otherwise, although more complicated examples could also be constructed. The power of economics lies not in utility maximization, but in the specification of constraints on choice and in describing how changes in the constraints affect behavior. To illustrate, even a consumer who made decisions randomly would tend to have downward-sloping demand curves because of his or her budget constraint (Becker).

The model of production decision making for the expected utility maximizing firm under output price uncertainty is applied to a panel Pennsylvania dairy operators. The model generalized duality implemented in this paper has the advantage of generating a system of supply and variable factor demand functions that consistently account for the presence of output price risk. The application to Pennsylvania dairy operators indicates that output price risk measured by the second and third moments of individual operators’ historical output price series is not an important factor in production decision making. In addition to not maximizing expected utility, these operators are not expected profit maximizers.