Alternative Agriculture (1989) / Chapter Skim
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1 Agriculture and the Economy
1 Agriculture and the Economy
Pages 25-88
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From page 25... ...
One example is monocultural production, which synthetic chemical fertilizers and pesticides made possible. The widespread adoption of these alternatives, referred to internationally as the "Green Revolution," led to dramatic increases in per acre yield and overall agricultural production in the United States and many other countries.
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From page 26... ...
Disparities rema~n In productive capacities, income, and regional rural economies, even though total net farm income has reached record levels. Farming is at the center of the food and fiber sector of the economy.
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From page 27... ...
A deliberate domestic policy designed to remove production controls helped the United States profit from these favorable conditions. The expansion of cultivated acres of wheat and feed grains, favorable tax provisions and market prices, and readily available credit helped increase the domestic supply of major commodities such as wheat, soybeans, corn, and other coarse grains.
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The loan rates in the federal commodity programs (the price that the government guarantees farmers) were rigidly set well above international market prices.
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/J COTTON ~ ~ _ ,, i,,. I ~ I \ / \ / \l l _— ~ , At' \\ 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1968 1970 1972 1974 1976 1978 1980 1982 1984 19861987 FISCAL YEAR FIGURE 1-3 Value of selected agricultural exports.
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From page 30... ...
In 1987, the volume of agricultural exports increased for the first time in 7 years (Figure 1-6~. The increase was largely due to a decline in the value of the doDar, faring world market prices, reduction in federal program loan rates, and implementation of the export programs of the Food Security Act of 1985 (U.S.
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From page 31... ...
agricultural exports by commodity.
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agriculture since World War Il. Agricultural productivity measured as output per unit of labor has surpassed that of the nonfarm business sector for more than a decade (Figure 1-~.
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Farm sector / 60 I I ~ ; 1967 1969 1971 1973 1975 1977 1979 1981 ~ 983 1985 YEAR FIGURE 1-8 Agricultural productivity measured by output per unit of labor.
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This has been made possible by great increases in per acre yields resulting from the development and widespread adoption of fertilizers and synthetic chemical pesticides, improvements in machinery, and high-yielcling varieties of major grain crops. Average yields have increased 2 percent per acre annually since 1948 (U.S.
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From page 35... ...
1988. 1988 Agricultural Chartbook.
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From page 36... ...
Agricultural Economic Report No.
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From page 37... ...
In contrast, employment in farm input industries such as agrochemical production, transportation, food processing, and machinery manufacturing has grown significantly during this period. 400 300 0 ._ Q G c`' 200 o ~ 100 Consumer expenditures 1~ Gil//////,> Marketing share of consumer expenditures /////// O ;~ 1976 1978 1980 1982 1984 1986 YEAR FIGURE 1-13 Marketing share of consumer expenditures, farm value, and consumer expenditures for farm foods.
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From page 38... ...
Fertilizers and pesticides currently account for a far greater share of input costs for most major crops than they did 30 years ago. This is primarily the result of widespread adoption of high-yielding seeds that are more responsive to fertilizer applications and continuous cropping that has created favorable pest habitats in certain crops.
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From page 39... ...
~ ~ 2 ~ — o In VARIABLE COSTS 39 Fuel Seed ......
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From page 40... ...
Credit: Soil Conservation Service, U.S. Department of Agriculture.
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From page 41... ...
Washington, D.C. 140 _ 120 _ 100 6 `~ 60 o E A 80 40 20 Corn / _ , \ O 1 1964 1 967 " \ Cotton Wheat Soybeans 1970 1973 1976 1979 1982 1985 1987 YEAR FIGURE I-17 Nitrogen application rates per acre on major crops.
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From page 42... ...
Washington, D.C. The increased use of commercial fertilizer during the last four decades has helped to increase dramatically the per acre yields of agronomic and horticultural crops.
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From page 43... ...
AGRICULTURE AND THE ECONOMY About two-thirds of all insecticides and fungicides are applied aerially; most herbicides in row crops are applied by spray rigs pulled by tractors. Citrus groves, such as the one shown above, may be aerially treated 10 to 20 times per season with insecticides, fungicides, and protestant oils.
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From page 44... ...
Ultimately, pesticides reinforced agricultural trends such as increasing farm size and decreasing diversification. The total pounds of pesticide active ingredients applied on farms increased 170 percent between 1964 and 1982, while total acres uncler cultivation remained relatively constant.
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Agricultural Economic Report No.
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From page 46... ...
1988. Chemicals Registered for the First Time as Pesticidal Active Ingredients under FIFRA (including 2 (C)
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Agricultural Economic Report No.
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Agricultural Economic Report No.
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From page 49... ...
AGRICULTURE AND THE ECONOMY 49 in cotton, alfalfa, peanuts, and apples. Largely because of the success of IPM in cotton, insecticide applications to field and forage crops declined 45 percent between 1976 and 1982.
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From page 50... ...
Total irrigated acreage peaked at slightly more than 50 million acres in 197S, declining to just under 45 million acres in 1983. Since then, total irrigated acreage has remained steady, although the composition has changed slightly; irrigated acreage in the West has declined, while irrigated acreage in the East has increased.
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From page 51... ...
Center pivot irrigation systems, which rely on groundwater, accounted for the largest increase of irrigated acreage of any irrigation system. These systems were used on 3.4 million acres in 1974 and 9.2 minion acres in 1983.
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From page 52... ...
The principal factors behind the increase in irrigated acres over the past two decades have been private investment stimulated by federal policies, which have included high commodity support prices, tax incentives that include investment credits and accelerated depreciation for equipment, water depletion allowances, and cheap credit. During the 1970s, about 80 percent of irrigation investment involved private funds.
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From page 53... ...
AGRICULTURE AND THE ECONOMY 53 Federal efforts to reduce production are often hampered by programs or policies that encourage irrigation and its resulting high per acre yields. Between 1976 and 1985, an average of 3.7 minion acres served by the Bureau of Reclamation were producing crops already in surplus.
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From page 54... ...
Pests were controlled through rotations, cultivation, and a variety of cultural and biological means. Cattle and hog production clearly illustrate the relationship among increasing specialization; changing distribution of farm income among large and small producers and regions; and changing cropping patterns, farm size, and management techniques.
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From page 55... ...
Most cattle are slaughtered between the ages of 15 and 24 months, weighing between 1,000 and 1,200 pounds. Low-cost feed grains and consumer preference for marbled thigher fat} grain-fed beef led to the proliferation of feedlots in the 1960s and 1970s.
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From page 56... ...
56 ALTERNATIVE AGRICULTURE 70 60 C' 50 40 an ~ 30 an o 20 10 o Small 1~1 Part-time - ~3 Moderate Large Very large _ ~ 1111 1 L OIL 1 , ~ . ~ ~ A: 1 969 1974 YEAR 1 978 1 982 FIGURE 1-25 Percentage of cattle sales by size of operation (in 1969 dollars)
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From page 57... ...
has identified nine representative agricultural regions based on data from the 1980 Census and the 1982 Census of Agriculture (Figure 1-27~. Three basic criteria were used to identify these revisions the commodities produced and the resource base; the percentage of farms with sales between certain levels; and the degree of agricultural and nonagricultural economic integration.
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From page 59... ...
The effect of farm policy on the overall regional economy is, in turn, a function of the importance of agriculture to the region and the nature and scope of agricultural input, food processing and marketing, and transportation industries. In no region was the total farm income more than 50 percent of the total income of the farm population (see Table 1-3~.
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61 ~5 co o l LL m u)
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From page 62... ...
By contrast, California farmers are less influenced by federal commodity programs, particularly farmers specializing in fruit and vegetable production. More than half of California's agricultural gross income is from nonprogram crops.
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In the Delta, however, median farm income was 11 percent higher than the median income for ah Delta households. Median farm income in the Eastern Highlands was only slightly less than aD Eastern Highlands households.
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64 · U, ._ o ." On In ._ CO ._ ·= '1 1 o ~4 m Z to of U ~ ~ 0 -i In ~ o., In ~ o U U
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From page 65... ...
Farm programs have enormous influence on the crops that are grown and on the choice of management practices. Prices under the commodity programs are often far above world market prices.
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66 in a)
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From page 67... ...
1987. Economic Indicators of the Farm Sector: National Financial Summary, 1986.
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From page 68... ...
Recently, however, they have benefited from lower feed costs resulting from the feed grain program passed in the Food Security Act of 1985. Policy also influences land use in indirect ways.
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From page 69... ...
. The cross-compliance provision of the Food Security Act of 1985 is designed to control government payments and production of program commodities by attaching financial penalties to the expansion of program crop base acres.
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The deficiency payment is the difference between the target price and the loan rate or the market price, whichever difference is less. When market prices are low, this policy rewards producers who strive for maximum per acre yield rather than maximum net return in the marketplace.
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From page 71... ...
This trend is clear for most commodities (Figures 1-31 through 1-34~. With between 80 and 95 percent of the nation's corn, sorghum, wheat, cotton, and rice acreage enrolled in federal commodity programs, the chances are slim for widespread adoption of alternative practices that involve rotations with nonprogram crops, such as leguminous hay or forage crops, or the planting of other program crops for which farmers have to establish base acres.
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Department of Agriculture, Agricultural Stabilization and Conservation Service, Commodity Analysis Division, 1988. 4 LL ~ I An m Or llJ CL cn 2 o 1 o ~ ~ r - c7 100 It price A Target price \ 1970 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 YEAR 75 c, a, Q ._ of o 50 F C' CE 25 O FIGURE 1-32 Market price, target price, and percentage of sorghum growers participating in the sorghum commodity program.
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From page 73... ...
, 1 IL 1 0.5 z I a: o C:) 9 ~ _ O 1970 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 A Market price I \~f Target price \ YEAR 100 Q o Cal _ 25 ~ O FIGURE 1-34 Market price, target price, and percentage of rice growers participating in the rice commodity program.
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From page 74... ...
Department of Agriculture {USDAJ sets a target price and a loan rate for wheat, corn, barley, sorghum, cotton, and rice and equivalent prices for sugar, tobacco, and milk each year. If the average market price of a commodity is below the stated target price, the government pays participating farmers the difference between the target price and the loan rate or the market price, whichever difference is less.
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From page 75... ...
Under changes in the Food Security Act of 1985, loan rates for wheat, feed grains, soybeans, upland cotton, and rice were lowered to 75 to 85 percent of the average price received by farmers over the past 5 years, dropping out the high and the low years. Loan rates may not drop more than 5 percent from the previous year's rate, unless deemed necessary to make the U.S.
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From page 76... ...
Although the effects of recent changes in the tax code win not be fully understood for several years, the similar swampbuster and sodbuster provisions of the Food Security Act of 1985 and the Tax Reform Act of 1986 eliminated many financial incentives for farming practices that contributed to soil erosion and conversion of wetlands to farmIanc! (see the "Soil Conservation Programs" section in this chapter)
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From page 77... ...
Agricultural overuse is depleting the slowly recharging OgaDala aquifer in some locations. The Tax Reform Act of 1986 denies deduction of any expenses associated with preparing land for center pivot irrigation.
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From page 78... ...
of production with reduced government support. Yet, increased international competition, the decline in world market prices for most commodities, and the relatively high percentage of total variable costs for inputs needed to achieve current high yields warrants a reassessment of farming practices, research, and the effects of policy on farm decision making.
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From page 79... ...
Farmers who have continued conservation practices in boom years lost opportunities to build base acreage and, in some cases, forfeited chances to improve their farms' proven per acre yield and payments. In response to this inequity, the Food Security Act of 1985 incorporated several mechanisms designed to simultaneously control surplus production and reduce soil erosion on the most highly erodible land.
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bThis figure represents the percentage of all crop base acres.
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From page 81... ...
loans, government loans for storage facilities, federal crop insurance, and conservation reserve payments farmers must manage ah highly erodible fields in accordance with an approved soil conservation plan by 1995. Between 80 minion and 95 minion acres win require these plans, although more than 25 minion of these acres are now in the CRE The impact of conservation compliance on farming practices is not known, although no-tiDage or conservation tiDage practices are often recommended for highly erodible land.
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From page 82... ...
Congressional policy and the EPA's application of current law regulating pesticides have resulted in a slow, deliberate pesticide regulatory process. From the inception of the EPA special review program in 1975 through September 30, 1987, the agency completed 40 special reviews or risk-benefit analyses of the most hazardous pesticides.
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From page 83... ...
Food Quality and Safety Food safety regulations and meat inspection programs are primarily designed to prevent health risks and acute illnesses from chemical and microbial contaminants in food. These regulations, however, do not enhance food quality.
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From page 84... ...
The federal government also sets grading standards for farm products. Beef grading tended to equate high-fat content with high quality in Prime and Choice cuts for example, until recent changes in grading standards.
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From page 85... ...
Between 80 and 95 percent of program crop acreage is currently enrobed In the federal commodity programs. The base acres and crosscompliance provisions of these programs will penalize growers who want to adopt diversified crop rotations or integrated livestock feed and forage operations on this land.
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From page 86... ...
1985. The Food Security Act of 1985.
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From page 87... ...
1985a. Agricultural-Food Policy Review: Commodity Program Perspectives.
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From page 88... ...
Competitiveness in Agricultural Trade: A Technical Memorandum.
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