Antitrust laws generally seek to promote competition in U.S. markets. Alternatively, these laws attempt to correct the type of market failure that occurs when the market does not sustain price competition or embodies undesirable features, such as prices fixed and agreed upon by rival sellers. It is well known that the federal policy to curb price-fixing agreements was central to the enactment of the Sherman Act of 1890. Formal cartels of the 19th and early 20th centuries, with their sales quotas, exclusive sales agencies, price-fixing committees, and customer and geographic sales allocations, apparently have been eliminated from the contemporary scene. Despite the disappearance of United States based formal cartels, there has been considerable litigation in recent years over pricing behavior of individual firms. A wide array of agricultural and food industries have been involved in these actions.

It would be presumptive of me to inject an Alabama bias into the rank ordering of research needs which should be addressed by the agricultural economist; I prefer to address the issue of how priorities will be set and how the use of the research will be brought about.

These topics have received much attention over the last decade, in the journals of both the Southern Agricultural Economics Association and the American Agricultural Economics Association.

The spatial distribution of economic activity has been the subject of much theoretical study during the last 150 years. The two-state study which provides primary evidence for this article is, to the authors' knowledge, the first attempt to analyze statistically the determinants of industrial location in rural communities with an explicit objective of more enlightened public action at the local, state, and federal levels.

The title of this paper provides almost unlimited latitude for discussions of the contributions, or lack thereof, of the scientists engaged in the application of a body of knowledge commonly referred to as agricultural economics. Because a complete review of the field of agricultural economics would exceed the scope of a paper, this discussion will be oriented to selected issues. The issues discussed are related primarily to empirical analyses. Selected definitions are used to provide a basis for the arguments presented.

Policy in the form of the Food and Agriculture Act of 1977 “emerged” as from behind a tree and was greeted by a hail of sticks, stones, and arrows from the farm strikers. It is appropriate to begin with a note of sympathy for the Department of Agriculture, particularly the Secretary who has so often in early 1978 borne the brunt of farmer dissatisfaction. In certain ancient societies it is said to have been traditional to respond to crisis by sacrificing the life of the king to appease the gods. As you know, in our country the chief executive has delegated this responsibility to the Secretary of Agriculture.

In addition to the domestic price and income areas that are the traditional center of attention, I want to discuss emerging policy on international agricultural trade, and the regulation of agricultural production and the food marketing industry. Though the Department of Agriculture is sometimes not the lead agency in these matters, it should nonetheless be considered in discussion of the agricultural policies of the Carter Administration.

The importance of risk in affecting production decisions is amply attested in the economics literature. Recent investigation of the influence of risky alternatives on supply relations has included both econometric analyses and programming studies. Hazell and Scandizzo suggest that when risk aversion is present, the slope of the supply schedule (i.e., with price plotted on the vertical axis) is expected to be greater than that for a risk-neutral supply schedule.

In spite of considerable interest in the supply implications of risk aversion, little empirical attention has been given to its effects on factor demand. The authors attempt to do so, and examine the applicability of Hazell and Scandizzo's supply assertion to factor demand.

A useful guide for the direction of future agricultural policy on energy requires, in part, detailed knowledge of the demand for different types of energy in different types of agriculture. Two approaches have been used in examining these demand relationships: (1) projecting total agricultural energy requirements, allocating these requirements among different agricultural subsectors, and estimating energy use in different agricultural enterprises; and (2) linear programming (LP) or constrained input-output (I/O) analyses to assess impacts of high energy prices and quantity restrictions on agricultural activities. However, these approaches usually require some stringent assumptions which limit the applicability of the results, and they provide little information about the economic factors that influence the demand for various types of energy. In short, the two approaches may be too restrictive to portray adequately the range of opportunity and response open to the agricultural sector. Emphasis needs to be given to those approaches which can provide information about the economic structure of energy use in the agricultural sector.

Numerous reports citing experiment data continue to claim advantages in gain rates and feed efficiency for bulls in comparison with steers. Although most experiment data agree about such advantages, magnitudes differ considerably among the reports for good reason. Variations in the design of bull-steer experiments are almost as copious as the number of stations reporting results. Bulls and steers used in any given experiment are generally of comparable age and have been subjected to the same feeding environment, but rations tend to differ among experiments, as do breed, age, and time on feed. Though some researchers feed to a predetermined slaughter weight which may differ for steers and bulls, others feed both on equal number of days. Likewise, because some studies have been designed for carcass comparisons of steers and bulls, they fail to provide critical feedlot performance data such as feed efficiencies. Carcass data may or may not include slaughter weights, dressing percentages, or yield of retail cuts.

A topic of considerable recent discussion is the use of high return per acre crops such as vegetables as a possible means of improving income levels on small, limited-resource farms. Though production economic analyses (those using conventional techniques such as budgeting and linear programming) indicate that farmers with small acreage might increase their income substantially by selecting vegetable enterprises, very few farmers are selecting vegetables over field crops. One possible explanation for their failure to do so is that the income from vegetable crops is more variable than that from field crops, and owners of small farms are more inclined to produce crops that will yield a lower but more stable level of income.

Trade in temperate zone agricultural products has remained largely outside the trend toward liberalization that has characterized international trade in the last 30 years. One of the most debated issues in this regard has been the European Community's Common Agricultural Policy (CAP) and its effects on world trade. Recent evidence emphasized the implications of the protectionist nature of the CAP in stimulating internal trade and slowing down third countries' farm exports to the EEC. But, no attempt has been made to estimate quantitatively the magnitude of the effect of the CAP system of import protection on EEC supply, consumption, and trade of agricultural products.

The U.S. grapefruit industry is dependent on continual growth in fresh sales in both domestic and foreign markets. From 1969 to 1975 slightly more than 40 percent of each season's output went to fresh use. Much of the future growth in fresh use is expected to come from new and larger export markets. Both political and economic trade problems continue to occur as greater emphasis is placed on the export markets for fresh grapefruit. Threats of Japanese embargoes and restrictions on containers and fumigants present continual problems with the development of the Japanese export market. The ultimate result of these export restrictions is reallocation of supplies among markets.

Most area economic development impact models are based on the premise that the basis of an area economy is a group of local firms which produce goods and services for sale outside the area. Agriculture, mining, and manufacturing firms typically make up a large part of such a group of exporting or basic firms. However, in most communities and some larger areas, many service firms (wholesale, retail, transportation, finance, medical, utilities) sell some of their products outside the local economy. These exports are part of the area's economic base. That portion of the output of the firms in an area which goes to satisfy local demands is nonbasic output. Area employment used to produce basic and nonbasic goods and services can be classified similarly as basic and nonbasic employment, respectively.

Statistical methods for estimation, hypothesis testing, and confidence statements are based typically on exact specification of the response variates. In the applied sciences another kind of multivariate problem is common in which an observation must be assigned in some optimal fashion to one of several populations. Classification rules based on an index called the linear discriminant function provide a method for such assignment.

Use of the linear discriminant function is relatively new to regional economics. Previously it has been used in such disciplines as botany to classify a new specimen as belonging to one of several recognized species of a flower, in educational psychology to develop rules for admitting applicants to college programs, in routine banking to aid credit officers in evaluating loan applications, and in agricultural economics to determine producer plans for changes in hog marketings and to identify factors associated with watershed development.

The first significant changes in the peanut program in more than 20 years are contained in the Food and Agricultural Act of 1977. The new program retains the use of acreage allotments, marketing quotas, and support prices but changes the procedure used to establish the size of the allotments and quotas given. The new program provides for two support prices versus one under the old program and no longer relates the support price level to a “parity price” concept.

In anticipation of the changes expected to be forthcoming from the new program during 1978 and future years, an analysis was undertaken to determine the effect of changing peanut marketing quotas and support prices on producer income, peanut consumer surplus, and peanut program costs. The analysis does not focus on changes generated by the new program because specific aspects of the program were not known when the research was conducted. Rather, the effect of a change or combination of changes in marketing quotas and support prices is analyzed in a general manner. Generalizations about the new program can be made on the basis of the analysis.

The age-old conflict between producers and market middlemen in the food industry has surfaced in the finfish industry with respect to market prices, producer prices, and marketing margins. Unrest among fishermen (producers) about the performance of the marketing system for various species of finfish has sparked numerous protests in the United States. Some protests have ended in lawsuits; in other cases, marketing cooperatives and/or marketing associations have been formed to integrate several steps in the marketing process. These events have been common in the Florida Atlantic Coast marketing system.

Coastal marine wetlands, in their natural state, are important biological and hydrological resources. Wetlands yield numerous valuable services such as provision of nursery and feeding habitat for fish and wildlife, and the assimilation of wastes. Wetlands, when filled or otherwise altered, also provide valuable sites for residences, marinas, or ports. Because well defined and vendable property rights are lacking for natural unaltered wetland services but are available for development services, the unregulated market will tend to reflect only the benefits of development. The result has been a rate of conversion of tidal wetlands that has been unsatisfactory to many individuals.