As a preface to my comments today, I challenge you to consider the following questions. Do the information age technological changes now taking place have the potential to disrupt, or even destroy, the university as we know it? Do these changes have the potential to force restructuring of the land-grant system? My comments today will address these questions. In doing so, however, I will not address problems facing the land-grant system or the agricultural economics profession per se, other than those we face as a part of the overall system of higher education. Others are doing that or have addressed those more unique problems elsewhere. A major National Research Council (NRC) initiative is now examining the relevancy of the land-grant system in the context of today's society; the W. K. Kellogg Foundation has funded an initiative to facilitate positive change within the land-grant system (Warner); and Eidman, in his 1995 American Agricultural Economics Association presidential address, summarized key concerns and issues facing the agricultural economics profession and how we are responding to them. I contend that overlaying the NRC and Eidman concerns is a series of fundamental changes taking place that has the potential to drastically modify the higher education model as we presently know and understand it.

The 1995 Farm Bill debate proved different than many economists expected. It was overwhelmingly budget-driven. Few early concerns about the role of government, efficiency, equity, competitiveness, environment, rural development, and food were addressed. Economic analysis played a different role than anticipated. Models of who and how farm policy is made proved misleading; the debate circumvented the traditional process. Economic models were used more to perform budget accounting than substantive analysis. And their substantive analyses often failed to capture the attention of policymakers. Hence, while a reformist economist's dream, the bill leaves as many issues unanswered as it addresses.

The use of national aggregate measures for the purpose of analyzing the impacts of agricultural policies often hides the impact of national policies on the distribution of benefits and costs between and within regions, size, and types of businesses. While economists can use national aggregate measures to indicate changes in overall efficiency due to policies, the tradeoff between efficiency and equity should be measured and the results provided to policymakers. These tradeoffs were not presented during the 1995–96 Farm Bill debate.

The 1994 congressional elections brought expectations of policy reform that extended to agriculture. This paper examines the role of economic analysis and how policymakers made use of it in developing the policies of the Agricultural Reconciliation Act, also known as the Freedom to Farm Act. Budget reduction pressures, other/secondary policy objectives, and a closed debate led to the system of fixed, declining payments to farmers that characterize an economist's solution, without the direct participation of economists, to interventionist government policy. Left unanswered are questions of political stability of the policy and whether the direct payments themselves are adequate or excessive.

In 1995, for the first time since the 1930s, the United States failed to pass new farm program legislation. The inability to pass farm legislation occurred despite bipartisan agreement that farm programs should continue the trend over the past decade of less government intervention. This paper discusses the sequence of events, the role of agricultural economists, the major issues, and the lessons learned from the 1995 Farm Bill debate. The trend toward declining government intervention in agriculture will require that the profession look increasingly to the private sector for solutions to the problems facing agriculture in the twenty-first century.

Agricultural economists are appropriately concerned about their profession's contributions to policy decisions. An examination of alternative approaches to transforming policy analyses is in order. There are opportunities to (a) focus on income and wealth distribution, (b) give attention to the public as a primary client, (c) avoid advocacy, and (d) adjust institutions in ways that encourage participation in policy analyses including the development of data systems.

A descriptive analysis and a survey of literature were used in this assessment of the transformation of the structure of production agriculture. The changes in production agriculture have important implications for resource use, population distribution in rural communities, and the survival of small farms. The shifting structural change in production agriculture as a response to economic and technological adjustments is not a temporary phenomenon. The economic and natural base of agriculture will change toward greater capital intensity and concentration of ownership, and will raise public policy questions in relation to the survival of a large farm population.

Gebremedhin and Christy focus on agriculture's trend toward concentration and industrialization, and how small farms may be affected by the mostly unintended consequences of government policy. They identify a set of forces that may move smaller farmers out of agriculture, resulting in social costs both to individuals and families forced to change occupations and homes, and to their communities.

A new, post-industrial, paradigm for agriculture is emerging under the concept of sustainable agriculture. The sustainability paradigm has emerged to solve problems created by the industrial model, primarily environmental pollution and resource base degradation. The role of farm size in this transformation to a more sustainable agriculture is the issue addressed. Using a descriptive approach, and relying on a survey of the literature including emerging paradigms and observations, we conclude that, from a sustainability perspective, the smallest effective size will be the most competitive size for farms, as for other knowledge-based enterprises of the future.

In their paper, “Small Farms and Sustainable Development: Is Small More Sustainable?” D'Souza and Ikerd examine the potential linkages between two streams of analysis—“sustainable development” and “small farms.” This is a worthwhile objective, as there has been little effort to link the two together. This is—as the authors note—a surprising gap in the thinking about forces that might lead to long-term sustainability in agricultural production. The authors are right to bring the issue to our attention.

This paper briefly outlines a topology of small farms and then considers the role of the government versus the market in key public policies such as commodity income support, environment, stability, research, and rural development. A number of options are explored for public policy to better serve small farms, including drastic alternatives such as graduated property taxes on farmland, with exemptions or lower rates for small farms. These and other alternatives are not necessarily recommended. Improved extension education and human resource development offer some of the most promising public policy opportunities to help small farmers.

The topic of the relationship between sustainability and farm structure, including the role of government, is extremely timely. It is so timely, in fact, that economists have significantly more questions about these relationships than we do answers. Farm policy, with its emphasis on commodity production, is clearly at a turning point; perhaps this is the most critical time since the basic policies were established some 60 years ago. The Tweeten and Amponsah paper makes a contribution to our understanding of this sea of change in the policy arena and the likely impacts on small farms.

The National Environmental Policy Act (NEPA), which was signed into law on January 1,1970, has come to be regarded as the first major piece of federal legislation to call for comprehensive attention to environmental concerns in the United States. During the two decades following enactment of NEPA, Congress adopted and then refined major legislation on nearly every aspect of environmental quality concerns: air pollution, water pollution, drinking water quality, hazardous waste management, wildlife protection, pesticide use, and several related problem areas. Current arguments for environmental regulatory reform are a phase in the continuing evolution of this body of federal environmental policy.

Major regulatory reform issues which involve environmental policy include issues of unfunded mandates, risk assessment, and property rights. Each of these proposed reforms involves major changes in environmental policies with impacts on different groups. Property rights is the core issue in Congress and state legislatures, with both regulatory takings and just compensation being the major parameters. Economists can participate effectively in this policy debate with successful research and education programs addressing the divisive issues.

As the environmental policy recommendations of economists become more acceptable, differences in the professional understanding of, and support for, different policy forms are becoming more apparent. These different approaches to environmental policy and research are described around a taxonomy of four perspectives: “rational analysts,” “cost analysts,” “market managers,” and “free market environmentalists.” These perspectives are compared and contrasted. Recognition of these differences can result in a better appreciation of the different research agendas of economists and can improve clarity in teaching and policy advising.

Carriker, Infanger, and Shabman and Stephenson have provided a set of papers related to the current debate over environmental regulatory reform. Each paper stands alone as a distinct and valuable contribution to the literature on this subject. Yet as a set they complement one another and form a whole that is greater than the sum of its parts.

Carriker, in his comprehensive overview of federal environmental policy in the U.S., painstakingly describes the origins, evolution, and impacts of nine major pieces of environmental legislation, and thus sets the stage for discussion of current issues and professional perspectives in the other two papers. Carriker's paper is well documented and should also serve as a good primer for students taking natural resource and environmental economics courses or contemplating graduate research in this area.

Within the general rubric of environmental policy reform, the three papers in this session address the current policy situation, the issues driving the policy reform movement, and how economics can contribute to the debate and its outcome. The papers fit together well to paint a picture of the evolution of environmental policy and some of the issues and challenges for economists associated with that evolution. Although the authors note a number of issues and challenges, there are other important points which deserve attention. In addition, I find myself challenging some of the points raised by the authors. It is toward these points that I focus this discussion paper.

A spatial, intertemporal equilibrium model of the North American dry onion economy is constructed to analyze the impact of liberalized U.S.-Mexico trade. In a free-trade environment, exports of Mexican onions to the U.S. are projected to increase about 50%, while Mexico's share of the U.S. market increases from 8.7 to 12.8%. Farm-level prices in the U.S. are projected to decline 8.9%, while production declines 2.4%. The effect of free trade on U.S. producers is disproportional across regions. Northwest storage onion producers experience the greatest decline in production; however, analysis suggests that improved storage methods may offset a portion of the unfavorable impacts of liberalized trade on these producers. In spite of the unfavorable impact of free trade on U.S. dry onion producers, the industry would not be economically devastated.