Sowing Seeds of Change Informing Public Policy in the Economic Research Service of USDA (1999) / Chapter Skim
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4 Current Issues and Problems
4 Current Issues and Problems
Pages 70-90
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From page 70... ...
World trade has been expanding faster than world economic output since 1973 (Council of Economic Advisers, 1997:243-244~. This is a direct consequence of the growth of open national economies and the globalization of financial and commodity markets.
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From page 71... ...
Despite the massive changes in the food and agriculture sector, one sees again a continuing characteristic of the classic farm problem a persistent disequilibrium in the form of an excess production in the face of ruinous prices. Farmers tend to maintain excess productive capacity in the same products primarily because of large investments in specialized assets that have no value in the production of other crops or livestock (Kilman, 1998~.
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From page 72... ...
Whether this policy approach can be sustained through 2002 or beyond is now at issue (Kilman, 1998~. Although the general direction over two decades in farm policy has been toward letting farm markets work with less direct government intervention, the growing number of policy participants and multiple policy goals (high farm income, stable prices, agricultural competitiveness, access to world markets, environmental sustainability, reduction of budget deficits, etc.)
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From page 73... ...
ERS is now called on more frequently to serve the department's needs in its policy interactions and negotiations with other cabinet agencies and units of state government. Publications reflect this in analysis of such topics as water policy in the Pacific Northwest, coastal zone management, reduction of pesticides in foods, changing food stamp rules, and the economic adaptation of agricultural production to global warming.
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From page 74... ...
74 SOWING SEEDS OF CHANGE for permanent leadership was not paid until 1996, when the current administrator was finally appointed. As a part of continuing spending reduction efforts, the Office of Management and Budget in 1993 proposed to cut ERS funding for fiscal 1994 by a draconian 25 percent.
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From page 75... ...
CURRENT ISSUES AND PROBLEMS 75 force." This appears to reflect a then-prevailing dissatisfaction with ERS, including a perceived lack of responsiveness to clientele, and an alleged uneven quality of analysis, including failures to understand the full context of some policy issues being analyzed. More than two-thirds of the reduction in ERS budget from its high point in 1979 has come since 1992 (see Table 3.1~.
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From page 76... ...
Symbolic of the downsizing of ERS's professional research and analytic capacity during the 1990s was the 1994 demise of Agricultural Economics Research, a peer-reviewed professional journal established by the BAE in 1949 and published by its successors for 46 years. In addition, during the 1994 reorganization of USDA, the position of assistant secretary for economics (to whom ERS had reported)
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From page 77... ...
Many now wonder whether any of the broad categories of ERS products, objective economic research, policy and other analysis, or even basic information provided by secondary data (including S&O work) are still valued by the USDA to say nothing about concern for an appropriate balance between such complementary outputs.
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From page 78... ...
What is clear in the United States is that the traditional agriculture of many independent farms dealing with competitive farm product processing and marketing firms, all coordinated by a relatively transparent set of open domestic and international markets, will be a far smaller and shrinking part of the food system. Coordination of the newer evolving structures is likely to be dominated by direct vertical and horizontal integration and control or by contracting arrangements or some mixture of direct integration of functions and contracting.
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From page 79... ...
Just as in other sectors, there will be regulatory efforts to extract subsidies and create protections that are not as visible and vulnerable as direct budget subsidies and price supports. This greater complexity of the food and agriculture sector will create more, not less, demand for policy research, analysis, and secondary data.
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From page 80... ...
Research on consumer interests in food safety, nutrition, and related food matters are also likely to become more important. This increasing importance is inevitable as consumer preferences dominate and differentiate domestic and international markets as never before.
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From page 81... ...
The recent ERS attempt to reduce resources in S&O activities led to organized political opposition from privatesector clientele, USDA action agencies, and the Congress. It would appear that indicators, S&O intelligence, and related basic information are the only highly visible, broadly valued, and consistently supported ERS products.
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From page 82... ...
Both the BAE and ERS have faced this dilemma without the capacity or support to resolve it in any satisfactory fashion. Over the nearly four decades of its existence, some ERS administrators have understood better than others the complementarily of the three categories of ERS products and the necessity for support from the Office of the Secretary and the Congress.
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From page 83... ...
The action agencies of the USDA are in many cases suppliers of information to ERS as well as important users of all ERS products. But they either presume ERS will always be there for them or, as likely, are nervous over whether ERS research and analytic results will support or undermine their programs.
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From page 84... ...
The possibilities raised range from significant ERS performance failures, unrealistic and conflicting expectations of ERS, belief that ERS analysis was on occasions politicized by USDA, to a few instances of supposed denial by the secretary's office of access to ERS products. No matter the degree of validity or generality of these criticisms, they create a perception that must be dealt with.
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From page 85... ...
The ERS of the l990s is an even smaller, though still significant part of the agricultural economics profession. Today, there is widespread perception that the quantity and quality of ERS products are not what they should be, given the number of professionals in ERS and the size of its budget.
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From page 86... ...
But these concerns are also a reflection of the larger scope of new USDA policy and information needs embedded in an inconsistent and conflicting set of priorities held by a diverse set of new and old clientele, all colliding in the context of a progressively thinner ERS resource base. Academics, for example, cannot happily continue to criticize ERS performance, while discouraging their better students from considering ERS employment and still expect ERS to provide a high-quality, comprehensive, information, and analytical base for the profession as it now does.
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From page 87... ...
This politicized the BAE and its secondary data and analysis functions and led to the demise of the BAE in 1953, when party control of the executive branch changed. When the ERS was established in 1961, it reported to a director of agricultural economics (at the assistant secretarial level)
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From page 88... ...
Perhaps the secretary had little use for economic analysis, or perhaps the position was wanted for another purpose (the number of presidential appointment positions in a department is fixed by law) ; or again, under White House pressure to reduce the number of USDA agencies, internal politics led action agencies and clientele to rid themselves of a highly visible economic adviser with whom they were often at odds.
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From page 89... ...
ERS Mission The expectation of the early directors of agricultural economics that ERS would provide all economic work done in USDA was never a realistic goal and was never achieved. Partly in an effort to deal with the analysis that ERS provides the secretary, individual program or action agencies have long employed their own economic researchers and analysts, often hired from ERS ranks.
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From page 90... ...
The demands for new skills and greater diversity in expertise and the large decline over time in real resources and personnel ceilings leave USDA facing the question: Should ERS resources be increased, or should ERS cut the scope of its mission to fit its resources, and if so, where should the cuts come and what is the appropriate balance between different ERS products? It is not clear today what the secretary or the Congress expect of ERS.
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