Conventional agriculture is increasingly criticized as being too concentrated in ownership; too reliant on technology, petroleum-based inputs, and credit; too specialized and ecologically unsound; and too dependent on government subsidies. Alternative agriculture is offered by many as an alternative, and we discuss the possible impacts of its widespread adoption on farm income, yields, regions, labor, trade, environmental quality, and farm structure. The profitability of alternative agriculture is also examined - in so doing, a distinction is made between the adoption of low-input practices and a more holistic alternative agricultural system.

I reexamined five previously published studies that compared the economics of high input conventional crop production systems in various regions to the economics of lower input alternatives that use green manures, cover crops, and more diversified rotations, but no inorganic fertilizers and little or no synthetic pesticides. The original analyses were extended to include estimates of each production system's contribution to the local economy, both directly through farmers' payments for labor and interest, and indirectly through the payrolls and profits of enterprises serving farmers. A similar comparison was also made for high input irrigated and lower input nonirrigated corn production. On a per acre basis, the high input systems' local economic benefits were equal to or greater than those of the lower input systems. However, they were lower as a fraction of total value of production in all but one case, since production was always higher for the higher input systems. Correspondingly, with all but one of the higher input systems, a greater portion of the value of production left the local economy to pay for purchased inputs. This becomes significant if the production system is not sustainable, so that the total productive potential of the area's agricultural resources is finite when integrated over their entire economic life. In such circumstances, the results imply that under the conventional system the local economy will capture a smaller share of the total productive value of those resources.

U.S. agriculture, which has developed in a mixed environment of private initiative and government support, is very successful by many measures. American farmers produce record levels of food and fiber per farm worker at very low budgetary cost to consumers. Recently, however, concern about resource depletion and agrichemical pollution has caused critics to question the environmental sustainability of the agricultural production system. Furthermore, pressures to trim the growing contribution of agricultural subsidies to the national budget deficit have led legislators and others to question the sustainability of the federal farm programs. Low agrichemical input or sustainable agricultural practices, such as nitrogen-fixing legumes in rotation with cereals, could reduce environmental damage. The selectivity and structure of historical farm programs, however, have economically favored conventional systems. Farm programs subsidize only about half the total value of agricultural products. Feed and food grains, cotton, and dairy products receive the lion's share of payments. Soil-building crops like forage legumes, most edible legumes, hay, and pasture are excluded. Secondly, the structure of commodity programs favors intensive production of program crops supported by high fertilizer and pesticide applications. This incentive emanates from the policy of computing the farm-wide deficiency payment for a program crop proportionately to the farm's historical “base” acreage and “established” yield for the crop. The leading farm program crops of corn, wheat, cotton, and soybeans occupied slightly over 60 percent of cropped acres and received at least 65 percent of all U.S. agricultural pesticides and fertilizer in the mid 19809s. Despite budget pressures and environmental concerns, near term termination of farm programs or decoupling them from production of particular commodities is unlikely. Fears about aggravating financial stress, reducing land values, and harming agrichemical supply businesses in program crop-growing regions will promote cautious incremental change. Recent promising signs of “creeping decoupling” include the 1986 freeze on established yields, the gradual reduction in target prices, the permitting of multi-year grass or legume plantings as set aside acreage, and the loosening of base acreage restrictions within the 1988 Drought Relief Bill.

In the region concerned, agriculture is conducted under stress from several difficult circumstances. These difficulties include, among others, drought, a limited length of growing season, harsh winters, insect pests and diseases, and weeds. The present paper describes several measures that are taken to combat these problems. Control devices include legume green manure/cereal rotations, use of drought-resistant and insect-resistant varieties, and early seeding of spring grain to cause maturation before the period of maximum drought risk. Recently, a wide range of legumes has been grown on a limited basis in the region, and further progress toward improved legume varieties is being pursued.

The adoption of sustainable farming system practices by U.S. producers could affect the international competitive position of many agricultural commodities, including livestock. The adoption of such practices over the next several decades will depend on commodity policy legislation, environmental regulation, commodity price and acreage diversion incentives, and the success of ongoing GATT negotiations and trade liberalization. However, the extent and magnitude of these effects are dependent on the internalization and recognition of social costs of agricultural production by farmers and explicit tradeoffs between environmental degradation and agricultural profitability. Environmental externalities include soil loss, surface and ground water contamination by agricultural residuals, loss of wildlife habitat, and diminished aesthetic amenities. In effect, both public and private concerns about the marginal social environmental costs associated with production, when present, will influence the shape and location of commodity supply curves and the U.S. export capability. In turn, these supply curves, which define the production capacity of the U.S. to meet domestic and export demand, will determine our comparative competitive positions for different commodities in world markets.

Complex policy issues and tradeoffs will arise in crafting the 1990 or 1991 Farm Bill. Efforts to advance progress toward sustainable agriculture production systems could arise in the farm bill's commodity, conservation, and research titles. Key definitional issues are highlighted here, as well as water quality issues and the impact of ongoing GATT negotiations in the context of increasing global demands on American agriculture.

The environment will be a major issue during the 1990 Farm Bill reauthorization, with environmental reform efforts directed toward strengthening the conservation provisions of the 1985 Farm Bill, and expanding into new areas of water quality and food safety. The process will differ from the 1985 Farm Bill environmental reform experience in several important ways. In 1990, the policy ideas under discussion are more sweeping, the issues are more complex and controversial scientific understanding is more ambiguous, technical capacity in the field is highly limited, and the farm policy environment is more volatile. Key environmental policy issues this year are the future size and purposes of the 1985 Conservation Reserve Program, and the strengthening of sodbuster, swampbuster and conservation compliance provisions enacted in 1985. Commodity program reforms that remove disincentives to crop rotations, and food safety issues will also top the environmental agenda. An Environmental Stewardship Program is proposed as a new approach to source reduction and pollution prevention. An ESP program might consist of 10–15 year contracts under which farmers are compensated to adopt environmentally sound practices such as crop rotations, reduced and more efficient use of agricultural chemicals, integrated pest management systems, and best management practices for water quality and food safety concerns.