Agricultural economics: principles, markets, and applications

Agricultural Economics

There are several areas of concern for agricultural economists, when they look towards the future. Some of these areas of interest are nutrition & health, the possibility of using food products for other uses than consumption and genetic adaptation of crops. However, three major interests of agricultural economists are the supply of food available, farm productivity and profits and agriculture production that will be friendly to the environment.

The availability of food supplies in the world is a primary interest and concern for agricultural economists. In an article by Lester Brown, he compares our use of the natural resources to the use of an endowment, which we have now started to utilize in addition to the interest and this leads to bankruptcy. He states, "By satisfying our excessive demands through overconsumption of the Earth's natural assets, we are in effect creating a global bubble economy" (Brown 1). Several issues impact the concern of the world's food supply.

The first consideration in food security is the rising temperatures of the world. According to Lester Brown, the "16 warmest years since record-keeping began in 1880 have occurred since 1980. With the three warmest years on record -- 1998, 2001 and 2003 -- coming in the last five years, crops are facing unprecedented heat stress" (Brown 1). The heat stress on plants globally impacts evaporation and impedes fertilization, leading to production of fewer crops. Fewer crops will lead to increased prices in food, particularly for countries that import much of their food, principally grain.

The second consideration of food security is the over consumption of water and the falling water tables. The use of more efficient and powerful water pumps has helped deplete the water tables to an unprecedented low level. These factors together; the slowing product growth, the rising temperatures and the depleting water tables make concern over the future of food security very important, even urgent when considering what measures need to be addressed.

Secondly, in order for farmers to continue to produce enough food to feed our country and export food to other countries who could not survive without importing food, the Farm Security and Rural Investment Act (known as the 2002 farm bill), was introduced as a way to provide subsidies to the farmers in need of assistance. "Faced with some of the lowest prices since the Great Depression and a succession of weather-related disasters ranging from drought to deluge, most growers welcome subsidies that will guarantee income even in bad years" ("Funding for Farmers" 1).

Not everyone agrees with 2002 farm bill, though. According to John E. Lee, "Economists continue to argue that heavy financial subsidies drive production crop costs up, drive commodity prices down, distort the mix of production inputs, distort trade patterns, abet the trend to fewer and larger farms, and reduce the viability of farming in poor agricultural countries" (Lee 1).

Faced with dwindling crop prices and no subsidies, the farmer would most likely close down their farms, either voluntarily or by forced bankruptcy. The groups that profit from the bill are likely to be happy with the results of the bill, and their lobbyists are frequently asking for higher subsidies, despite the contentions that the subsidies cause lower market prices and, in effect, create some of the problems the farmer encountered to begin with. The subsidy program is just one part of the farm productivity and profit issue. There is a need for the farmers of today to improvise in order to be more productive. In a USA Today Magazine article, the argument is that "the changing structure of agriculture in this country means the roles of family farm in agriculture and society are also changing" ("Research Will Solve Many Problems" 1). This concept means that aside from subsidies, the farmer of today must use improved technology and research ideas to improve their crop or change their crops to ones that are more profitable for them. Additionally, farmers may be able to market their products differently so as to make a profit another way.