A new, post-industrial, paradigm for agriculture is emerging under the concept of sustainable agriculture. The sustainability paradigm has emerged to solve problems created by the industrial model, primarily environmental pollution and resource base degradation. The role of farm size in this transformation to a more sustainable agriculture is the issue addressed. Using a descriptive approach, and relying on a survey of the literature including emerging paradigms and observations, we conclude that, from a sustainability perspective, the smallest effective size will be the most competitive size for farms, as for other knowledge-based enterprises of the future.

This research examines the predictability of a profit maximization model, an expected value-variance utility maximization (E-V) model, and two versions of the target-MOTAD model for modeling risky agricultural production decisions. Model solutions were translated into expected value and variance of farm income for analysis. Direct comparison and chi-square analysis of actual and predicted expected income distributions were used in the analyses. It was concluded that the utility maximization and cash-cost target-MOTAD models predicted distributions of farm income better than the variable-cost target-MOTAD and profit maximization models.

Agricultural exports are important to many regional economies, as is the case for agricultural exports either produced in or shipped through Louisiana. A hybrid (revised and verified) IMPLAN model of the Louisiana economy is used to estimate the direct and indirect impact of agricultural exports. Original model estimates of foreign exports lacked holistic (overall) accuracy. However, other, more general uses of the model were unaffected by this lack of accuracy. While the contributions of agricultural exports to the state economy were substantial, impacts were concentrated in unprocessed products. Increasing the export of processed agricultural products should enhance economic activity.

In their paper, “Small Farms and Sustainable Development: Is Small More Sustainable?” D'Souza and Ikerd examine the potential linkages between two streams of analysis—“sustainable development” and “small farms.” This is a worthwhile objective, as there has been little effort to link the two together. This is—as the authors note—a surprising gap in the thinking about forces that might lead to long-term sustainability in agricultural production. The authors are right to bring the issue to our attention.

This paper briefly outlines a topology of small farms and then considers the role of the government versus the market in key public policies such as commodity income support, environment, stability, research, and rural development. A number of options are explored for public policy to better serve small farms, including drastic alternatives such as graduated property taxes on farmland, with exemptions or lower rates for small farms. These and other alternatives are not necessarily recommended. Improved extension education and human resource development offer some of the most promising public policy opportunities to help small farmers.

Exotic aquatic plant management is a major concern for public reservoir management in many regions of the United States. A study was conducted to measure the effects of alternative aquatic plant management strategies on recreational expenditures and regional economic activity. The study area was Lake Guntersville, Alabama, and the local economy surrounding the lake. Lake Guntersville is one of the largest reservoirs in the Tennessee Valley Authority system. Results suggested that relatively moderate levels of aquatic plant control are associated with the highest levels of recreation-related economic effects on the economy surrounding Lake Guntersville.

This study examines per trip consumer surplus associated with guided Whitewater rafting on two southern rivers. First, household recreation demand functions are estimated based on the individual travel cost model using truncated count data regression methods and alternative price specifications. Findings show mean per trip consumer surplus point estimates between $89 and $286, depending on modeling assumptions and river quality. Magnitudes of these surpluses are very dependent on assumptions about the opportunity cost of time.

The topic of the relationship between sustainability and farm structure, including the role of government, is extremely timely. It is so timely, in fact, that economists have significantly more questions about these relationships than we do answers. Farm policy, with its emphasis on commodity production, is clearly at a turning point; perhaps this is the most critical time since the basic policies were established some 60 years ago. The Tweeten and Amponsah paper makes a contribution to our understanding of this sea of change in the policy arena and the likely impacts on small farms.

This study evaluates the economic impact of a ban on methyl bromide on the U.S. winter fresh vegetable market for six major crops: tomatoes, green peppers, cucumbers, squash, eggplant, and watermelons. Florida is the primary domestic supplier of these products. Mexico and Texas are the competing suppliers of the five vegetable crops and peppers, respectively. Leontief technologies represent both monocrop and double-crop production systems; linear inverse demand functions represent four demand regions in the U.S. and Canada. By increasing production costs and reducing yields, a ban on methyl bromide decreases Florida's FOB revenues by 54% and increases those of Mexico by 65%. Price increases to U.S. fresh vegetable consumers range from near zero to over 10%, depending upon the commodity and location.

The National Environmental Policy Act (NEPA), which was signed into law on January 1,1970, has come to be regarded as the first major piece of federal legislation to call for comprehensive attention to environmental concerns in the United States. During the two decades following enactment of NEPA, Congress adopted and then refined major legislation on nearly every aspect of environmental quality concerns: air pollution, water pollution, drinking water quality, hazardous waste management, wildlife protection, pesticide use, and several related problem areas. Current arguments for environmental regulatory reform are a phase in the continuing evolution of this body of federal environmental policy.

Declining domestic cigarette consumption, increased global competition, and loss of import restrictions indicate decreased demand for U.S. flue-cured tobacco. The effects of 10% declines in domestic and export demand are evaluated under a policy of reducing quota to maintain price versus a policy of allowing price to fall to maintain quota. Changes in prices, quantities, revenues, and economic rents are simulated. Losses to nonfarming quota owners are minimized under a policy of price maintenance, while losses in revenues to tobacco-producing areas are minimized by a policy of quota maintenance. Aggregate losses to tobacco growers are greater under a policy of quota maintenance.

Major regulatory reform issues which involve environmental policy include issues of unfunded mandates, risk assessment, and property rights. Each of these proposed reforms involves major changes in environmental policies with impacts on different groups. Property rights is the core issue in Congress and state legislatures, with both regulatory takings and just compensation being the major parameters. Economists can participate effectively in this policy debate with successful research and education programs addressing the divisive issues.

As the environmental policy recommendations of economists become more acceptable, differences in the professional understanding of, and support for, different policy forms are becoming more apparent. These different approaches to environmental policy and research are described around a taxonomy of four perspectives: “rational analysts,” “cost analysts,” “market managers,” and “free market environmentalists.” These perspectives are compared and contrasted. Recognition of these differences can result in a better appreciation of the different research agendas of economists and can improve clarity in teaching and policy advising.

In his recent article, Onianwa used the absolute price version of the Rotterdam demand model to estimate Mexican and Canadian import demands for U.S. beef products. The specification of the Rotterdam model allows straightforward testing of the basic theoretical properties of demand. Based on theory, a system of demand equations should obey adding up, homogeneity, symmetry, and negativity (Theil 1971, 1975; Deaton and Muellbauer). Adding up is guaranteed or automatically satisfied in the Rotterdam model and other similar demand models like the almost ideal demand system (AIDS). Hence, adding up cannot be tested. Negativity can be checked by calculating the eigenvalues of the Rotterdam Slutsky matrix (all eigenvalues should be nonpositive). The remaining two properties, homogeneity and symmetry, can be straightforwardly tested by using the likelihood ratio test, as in the present paper, or the Wald or Lagrange multiplier tests; homogeneity can also be tested separately for each demand equation using the F-test.

Carriker, Infanger, and Shabman and Stephenson have provided a set of papers related to the current debate over environmental regulatory reform. Each paper stands alone as a distinct and valuable contribution to the literature on this subject. Yet as a set they complement one another and form a whole that is greater than the sum of its parts.

Carriker, in his comprehensive overview of federal environmental policy in the U.S., painstakingly describes the origins, evolution, and impacts of nine major pieces of environmental legislation, and thus sets the stage for discussion of current issues and professional perspectives in the other two papers. Carriker's paper is well documented and should also serve as a good primer for students taking natural resource and environmental economics courses or contemplating graduate research in this area.

Within the general rubric of environmental policy reform, the three papers in this session address the current policy situation, the issues driving the policy reform movement, and how economics can contribute to the debate and its outcome. The papers fit together well to paint a picture of the evolution of environmental policy and some of the issues and challenges for economists associated with that evolution. Although the authors note a number of issues and challenges, there are other important points which deserve attention. In addition, I find myself challenging some of the points raised by the authors. It is toward these points that I focus this discussion paper.

A spatial, intertemporal equilibrium model of the North American dry onion economy is constructed to analyze the impact of liberalized U.S.-Mexico trade. In a free-trade environment, exports of Mexican onions to the U.S. are projected to increase about 50%, while Mexico's share of the U.S. market increases from 8.7 to 12.8%. Farm-level prices in the U.S. are projected to decline 8.9%, while production declines 2.4%. The effect of free trade on U.S. producers is disproportional across regions. Northwest storage onion producers experience the greatest decline in production; however, analysis suggests that improved storage methods may offset a portion of the unfavorable impacts of liberalized trade on these producers. In spite of the unfavorable impact of free trade on U.S. dry onion producers, the industry would not be economically devastated.