What an economist argues about managing the hazards of new production technologies depends on that individual's beliefs about the scientific credibility of assessed risk of new technologies, about the meaning of voluntary risk and compensations, and about the meaning of “progress” and “nature.” None of these beliefs is derived from the core of the economics discipline. Indeed, the economist's arguments often rest not on economic considerations, but on these matters of belief that are established outside the discipline.

A key player in the current policy debate over chemical use in food production is the consumer. In the last few years we have witnessed that consumer activism has been able to force policy change in a number of areas important to the agricultural and food industries. Consumers' perceptions and concerns about pesticide and animal drug residues in foods can translate, in sometimes volatile and unpredictable ways, into market behavior. In addition to affecting the consumer's own satisfaction and welfare, the consumer's market behavior is obviously of major interest to agricultural producers, manufacturers, wholesalers, and food retailers. Policymakers and regulators are feeling heightened pressure to understand and respond better to consumer (and voter) concerns over pesticides and other chemicals commonly used in agriculture.

Agricultural economics has long been a vital component of studies in agriculture at the 1862 institutions; in recent years, it has grown in importance at the 1890 institutions. All of the 1890 institutions currently offer a degree program or course of study in agricultural economics or agribusiness.

Since their inception, land grant universities have played a vital role in the growth and development of the U.S. economy. Indeed, the land grant model of providing access to and the benefits of higher education to the masses have been effective in raising the standard of living throughout the world. However, it is becoming increasingly clear that the focus of the primary unit (the colleges of agriculture and home economics) of land grant universities must change if it is to remain relevant to society.

Biotechnology research promises to have a greater impact on agriculture and society as a whole than any other technological development in agriculture in the past (such as hybrid corn) or any in the foreseeable future. Biotechnology research potentially encompasses a multitude of technological developments that are likely to impact all aspects of agriculture from agricultural production to food processing to food consumption and possibly even to waste and residuals management, pollution control and water quality.

The potential role for economics in biotechnology research does not differ from the role of economics in examining research in general. There is a substantial literature on that topic. Hans Binswanger has posed four questions that an economic analysis of technical change should address. These questions provide a useful roadmap for thinking about the role of economics in biotechnology research.

Granger-causality tests and Sims' VAR technique were used to analyze the impact of macrovariables on farm output and prices in the U.S. for the period 1934-1987. Granger-causality tests show one-way causality from the macrovariables to the farm sector variables, and this is supported by impulse response functions from a VAR model. Money and interest rate effects on agricultural prices and output are apparent in the data.

This analysis uses a dichotomous qualitative response model to assess the influences of several economic and demographic characteristics of consumers on the purchase decision for variety (edible organ and offal) meats. Specific factors considered include education, age, income, household size, and ethnic heritage. Data collected from a survey of 3, 340 consumers are utilized. Results confirm strong income, age, household size, and ethnic effects on the purchase of variety meats.

Conceptual weaknesses in the use of costs of average abatement as a measure of the cost effectiveness of agricultural nonpoint pollution control are examined. A probabilistic alternative is developed. The focus is on methods for evaluating whole-farm pollution control plans rather than individual practices. As a consequence, the analysis is presented in a chance-constrained activity analysis framework because activity analysis procedures are a practical and well developed device for screening farm plans. Reliability of control is shown to be as important as reduction targets in designing farm plans for pollution control. Furthermore, broad-axe prescriptions of technology in the form of Best Management Practices may perform poorly with respect to cost effectiveness.

A test for static equilibrium developed by Schankerman and Nadiri is used to evaluate the hypothesis that land and capital in aggregate south-eastern U.S. agriculture behave as fixed inputs. Empirical results reject the hypothesis that these two inputs are at their long-run equilibrium levels implied by observed prices. Thus, some degree of asset fixity may be concluded.

This paper uses a deterministic asset replacement model to examine the implications of the 1986 Tax Reform Act (TRA) for replacement investment in U.S. agriculture. The optimal replacement age for an asset is shown to be inversely related to the size of investment tax credits and the present value of depreciation allowances but generally directly related to marginal tax rate. Simulation results indicate that the net effects of the TRA vary across assets. Replacement ages for assets with relatively long depreciation lives (e.g., farm structures) tend to fall. Those for assets with relatively short depreciation lives rise (e.g., tractors).

Farm-level data are used to estimate equations explaining the probability of bidding and the level of the bid for the 1986 Dairy Termination Program. Participation was attractive to older farmers, to those who were not planning to transfer the farm to a family member, to less experienced farmers, and to those using less sophisticated management techniques. Schooling, off-farm work, and nonfarm experience did not have significant effects. The participation pattern suggests that the long-term effects of the program on milk supply are small.

This paper analyzes a variable price support program (VPS) as an alternative to the current farm income support program. The VPS program can control U.S. agricultural production while protecting income of small farmers. The VPS is designed to alter farm level production decisions by reducing commodity support prices for each additional unit of production produced. This will serve to discourage excess aggregate production. The VPS program can be a mechanism to stabilize income of efficient small farms during the transition from the current farm programs to a free market environment. An illustrative study is used to target government program benefits to various farm-size groups.

Target-MOTAD was used to assess the risks and returns of sustainable cotton crop rotations from Auburn University's 92-year “Old Rotation.” Study results analyze rotations of continuous cotton, with and without winter legumes; two years of cotton-winter legumes-corn, with and without nitrogen fertilization; and three years of cotton-winter legumes-corn and rye-soybeans double-cropped. Ten years of observations on deviations from target income were used to identify optimal sustainable rotation(s). Study results suggest that diversification in rotations, as well as in crops, results in the least risk for a given level of target income.