US Agricultural and Food Policies

Economic Choices and Consequences

Gerald D. Toland, Jr., William E. Nganje, Raphael Onyeaghala

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781315459516
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

Policy analysis is a dynamic process of discovery rather than a passive exercise of memorizing facts and conclusions. This text provides opportunities to "practice the craft" of policy analysis by engaging the reader in realistic case studies and problem-solving scenarios that require the selection and use of applicable investigative techniques.

US Agricultural and Food Policies will assist undergraduate students to learn how policy choices impact the overall performance of agricultural and food markets. It encourages students to systematically investigate scenarios with appropriate positive and normative tools. The book emphasizes the importance of employing critical thinking skills to address the complexities associated with the design and implementation of twenty-first-century agricultural and food policies. Students are asked to suspend their personal opinions and emotions, and instead apply research methods that require the careful consideration of both facts and values. The opportunities to build these investigative skills are abundant when we consider the diversity of modern agricultural and food policy concerns.

Featuring case studies and critical thinking exercises throughout and supported by a Companion Website with slides, a test bank, glossary, and web/video links, this is the ideal textbook for any agricultural policy class.

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Chapter 1

An introduction to policy analysis

An initial perspective on policymaking

Role of this chapter and the educational aims of this textbook

Why study agricultural and food policy?

General purposes of this text

Challenges and efficacy of policy analysis

Transition from general philosophy to pragmatic matters

Tools for policy analysis and evaluation

Discontinuation of the Direct Payment Program (DPP): a case study

A systematic method for applied policy research

The science and art of policy design

Summary of applied policy research

Policy analysis: a worthy undertaking

Influential US Policies in the 21st Century: the 2010 FSMA, the 2014 Farm Bill, and the 2015 Trade Act

The FDA Food Safety Modernization Act (FSMA)

The Agricultural Act of 2014 (i.e. the 2014 Farm Bill)

The 2015 Trade Act (“TPA for the TPP”)

Summary

Suggested guidelines for using this textbook

Organization of the textbook chapters

Summary

Notes

“If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it.”

Abraham Lincoln. Excerpt from his “House Divided” speech in Springfield, Illinois. June 16, 1858.¹

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An initial perspective on policymaking

Whether we realize it or not, agricultural and food policies influence the quality of our daily lives. We expect our agri-food system to produce a safe, nutritious, reliable, and abundant food supply. But perhaps we do not fully appreciate how remarkable our system is. What is more, we continue to enhance our expectations. For example, we now seek food production and distribution methods that are environmentally friendly and sustainable.

Are today’s farm and food policies adequate to meet the challenges? How will we determine and implement programs that can effectively and equitably balance economic incentives, resource constraints, and distributional outcomes, now and in the future?

This textbook is designed to help the reader address these and other important questions. If we follow Abe Lincoln’s advice (quoted above), then we will carefully examine the status of our agricultural and food system performance today, and begin formulating a way forward for the future.

The dynamic changes taking place in our agri-food system point towards a future of both challenge and opportunity. We are frustrated by the problems of food insecurity and childhood obesity, while we marvel at the speed and power of our technological advances.

We gain a sense of optimism when we view the amazing impact of precision agriculture, agricultural genomics, supply-chain management, and nanotechnology. Our current agricultural and food system strongly benefits from noteworthy improvements in knowledge, efficiency, and overall productivity in our modern economy.

In the midst of our optimism, there are real concerns. We need to fully address how our farm-and-food system will endure the effects of climate change, food safety issues, and related factors that threaten food system resiliency.

Considerable effort is required, if we are to design and implement agricultural and food policies² that can capitalize on the promising opportunities while offering real solutions to the vexing problems.

When we examine what is at stake – such as, determining how best to sustainably feed a hungry world – then the search for effective agricultural and food policies is readily understood as an enterprise worthy of our full attention.

This book aims to assist undergraduate students (and other interested readers) to learn how alternative policy choices impact the overall performance of agricultural and food markets. This text also provides opportunities to apply economic principles to improve the efficiency and equity of policy design and implementation.

Readers of this text can sharpen their ability to analyze scenarios and review case studies to determine how policy choices create desired results. We also identify when well-intentioned policies are sometimes responsible for unintended economic impacts.

“Choices have consequences” is a nearly universal piece of advice. This motto is particularly relevant for our investigation of agricultural and food policies. Using appropriate methods of analysis, we can predict how policy changes create a wide range of important economic consequences for real-world decision-makers.

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Role of this chapter and the educational aims of this textbook

The objectives for this first chapter are to:

• Introduce the field of study known as “Agricultural and Food Policy.” Why is it a productive area of research and discussion?

• Identify the goals and purpose of this textbook. This book offers analytical frameworks and learning strategies to help students understand and evaluate US agricultural and food policy choices and evaluate economic consequences.

• Provide readers with an overview of key policy forces currently influencing the economic performance of the agricultural and food sectors in the United States.

• Explain the textbook’s organizational logic and sequence of chapter topics.

Why study agricultural and food policy?

We all have an interest in learning more about a food and agricultural system that supplies our society with the sustenance for life. Beyond this obvious concern for feeding a hungry world, we can readily cite additional reasons to learn more about farm and food policy.

Agri-food markets are unique. They are regularly affected by highly volatile prices, perishable products, societal safety concerns, and uncontrollable natural production conditions. The impact of these unique conditions, in combination with the influence of private sector economics and government policies, means that policy analysis is always interesting, never boring (at least for true policy analysts), and intellectually challenging.

In this text, we assume readers are motivated to improve the performance of our agri-food systems. If you are a member of this club, then it is necessary to study the socio-economic relationship between public-sector policy options and private-sector decision making.

There are plenty of twenty-first-century instances where we know that policy analysis and effective policy intervention are needed. For example:

• We are encountering health issues associated with child obesity and food waste, and at the same time we are trying to overcome household nutritional deficits connected with food insecurity.

• We need a coordinated policy approach to manage a range of issues that include: increasing our sustainable food production potentials; keeping pace with dynamic domestic and international food markets; and creating efficient systems for renewable energy output and utilization.

• We must address the questions surrounding food system integrity. This agenda includes the pursuit of food safety policies that incorporate HACCP and related performance-based practices. Today’s consumers expect their food purchases to be healthy, nutritious, good-tasting, and free from all pathogens and related threats.

• We need policies that can transform challenges into economic opportunities. For example, can we structure government-subsidized federal crop insurance to efficiently and equitably use taxpayer dollars?

We must pay attention to the details if we are to design successful agricultural and food policies. We need good analysts who recognize the complexity of these problems, and then formulate methods that correctly assess choices and evaluate results.

The stakes are high. We need a properly functioning farm-and-food system. Effective policy analysis can help us “get there.” If we are to increase our resource efficiency and economic welfare, then we must strive to understand the goals of private-sector participants, the motives for government intervention, and the relevance of market outcomes.

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General purposes of this text

Given the rapid pace of change in our agricultural and food economies, it is essential that students be properly equipped to assess new policy situations, apply appropriate analytical techniques, and arrive at conclusions based on sound research.

In light of the pressing need to design effective policies, this textbook serves two major purposes:

• It is a tool for students to learn and apply research-based skills for policy analysis.

• It offers students the opportunity to explore how alternative agricultural and food policies influence the economic outcomes for farmers, agribusinesses, domestic consumers, international markets, and other important constituencies.

Policy analysis is a dynamic process of discovery rather than a passive exercise of memorizing facts and conclusions. This text provides opportunities to “think critically” by asking the reader to consider alternatives and identify solutions for real-world policy problems.

Systematic policy analysis requires considerable effort. As we embark upon our extensive study of policy choices and their economics consequences, it is reasonable to address a very basic and utilitarian question: what difference will it make?

Challenges and efficacy of policy analysis

In the sixteenth edition of his world-renowned textbook, Economics, the late Nobel Laureate Paul Samuelson noted that there is a “world of difference between informed economics and just plain bad economics.”³ He observes that policies based on imprudent analysis can be very costly; and conversely, he effectively argues that thoughtful inquiry is a worthy enterprise.

Samuelson also reminds us that while we have made notable advances in research methodology, we are far from conducting policy analysis as an exact science. Objectivity requires that we understand and respect the limitations of our investigative approaches, while taking advantage of the important insights that careful study can yield.

We also must recognize that the economic analysis of policy making goes beyond the efficiency criteria of calculating benefits and costs. There are distributional consequences. Which individuals, groups or organizations stand to benefit from a policy decision? What economic participants will shoulder the costs associated with a new policy?

In many policy situations, some participants gain, and others lose. As a result, questions about fair...