In this study, the effects of an export subsidy for cotton are analyzed using a linear elasticity model. The study explicitly addresses the interaction of current domestic policies with the proposed export subsidy. An export subsidy may be a successful method of reducing the government costs of the cotton program.

The theme of my address is diversity in the profession of agricultural economics. I address diversity as a response, a strategy, not as an end in itself but as a conscious approach by ag economists in land grant universities seeking a useful role in the future.

I chose this theme because I am genuinely concerned about our future in the 1862 and 1890 land grants. I acknowledge up front that not all ag economists work in land grant universities but all have a stake in them as our primary reservoir of human capital. Most practicing ag economists have roots in a land grant university and depend on their products for “new blood” in business or government. My interest in diversity has been influenced by the writings of several prominent ag economists, reviewed briefly below, by recent conversations with Jim Hildreth, John Holt, and Jim Bonnen regarding the future of the land grants and by personal observations of the painful manifestations of tensions within departments in the South and elsewhere as faculty try to position themselves for an uncertain future.

Given an equipment complement, a specific crop mix has a probability distribution for whole-farm net returns. Increasing crop acreage while holding the set of equipment constant will reduce fixed costs per acre, but it will also increase the length of time required to complete crucial field operations such as planting and harvesting. Thus, the probability of encountering weather-related delays in fieldwork will increase. This increase in delays may cause a decline in yields and changes in the distribution of net returns. This paper develops a Target MOTAD model capable of capturing intra-year impacts on profit that arise from the timing of planting and harvesting operations as well as inter-year impacts on profits that are due to variations in economic and weather-related factors. The model relies on estimates of available fieldwork time and a crop's harvestable yield in different time periods throughout the harvest season.

A growing segment of society is concerned about a myriad of health and environmental issues related to the use of pesticides and other agricultural chemicals. Despite the leveling-off of agricultural chemical use in the 1980s, chemical use in agriculture has come to be seen as a two-edged sword. On the positive side, agricultural chemicals have become the engine for world-wide productivity gains. These chemicals have contributed to increased yields per acre and have reduced waste in storage and distribution. On the negative side, agricultural chemicals are perceived by many to present risks to the safety of the food we eat, to the quality of our drinking water, to the wildlife population, to applicators and to people who inadvertently come into point contact with them.

The General Accounting Office (GAO) recommended that the USDA substantially reduce or eliminate the extent of price discrimination practiced under federal milk marketing orders. The purpose of this study was to quantify the impacts of alternative means of implementing the GAO proposal on the economic viability of Texas and New Mexico dairy farms. Five dairy farms were simulated for six years under the current dairy policy and five alternative proposals. Results of the analyses indicate that large New Mexico dairies can remain economically viable under all of the alternatives. On the other hand, federal order policy changes would accelerate the loss of equity for moderate size Texas dairy farms.

In anticipation of Congressional debates over an expanded environmental title in the 1990 farm bill, several studies on pesticide use and the impacts of reduction were undertaken (e.g., Smith et al., Knutson et al., Osteen and Szmedra, and GRC Economics). Osteen and Szmedra reported that the use of herbicides, insecticides, and fungicides increased steadily from post-World War II to 1982 before decreasing as crop prices declined and acreage reduction programs reduced planted acreage. Heightened concerns and perceptions about the presence of pesticides and nitrates in our food and water supplies have led to calls for the reduction and/or elimination of agricultural chemicals. For example, a National Academy of Science study has concluded and therefore fostered the perception that substantial reductions in chemical use are possible without large impacts on production and/or prices.

Harvest response to production and asymmetric price risk was analyzed using an ordinary least squares model. Statistically significant responses to production-quality and output price risk were indicated. Results suggest that alternative pricing strategies designed to reduce risk may alter harvest response and decrease month to month harvest variability.

A probabilistic model is applied to cross-sectional data to identify determinants of post-restructure performance of Federal Land Bank loans. The results indicate that restructured loans were sensitive to factors that determine the debt repayment burden and the repayment ability of the restructured farm operations. Loan performance is found to be relatively more sensitive to the levels of the post-restructure interest rate and cash farm income than to the financial structure and leverage position of the restructured farm. The relationships between the post-restructure interest rate, cash farm income level, and the probability of loan performance are illustrated.

County agents receive cost of production information primarily from state extension services and then disseminate it to agricultural producers. A survey gathered data on agent usage of this information. A Poisson regression analysis using count data was performed to determine the factors influencing the number of times county agents directly referred to published cost of production (enterprise budget) information in a year. The agent's understanding of budget information use in management decisions, the availability of budgets, and his/her receiving the budgets in multiple forms (e.g., sheets, booklets, or software) had significant positive impacts on the use of budgets by the agent.

The term LISA was coined in 1988 as an acronym to identify a federally funded research and education program designed to address the public issue of agriculture and the environment (USDA-CSRS, p. 2). LISA is made up of two related, but different, concepts: low input and sustainable agriculture. This combination reflects a compromise between two different perspectives of the environmental issues confronting agriculture.

The low input perspective is that farmers must reduce their use of commercial chemical inputs as a means of reducing environmental and ecological risks. The sustainable agriculture perspective is that long-run productivity and utility of agriculture depend ultimately on our ability to keep farms both ecologically sound and economically viable. Reduced reliance on commercial inputs is seen as one means of addressing the ecological risks that could threaten long-run sustainability.

The objective of this study was to determine whether structural change in the demand for butter, margarine, and salad and cooking oils occurred between 1967 and 1986. A nonparametric method, which does not require that a functional form be imposed on the data, was used to test for violations from stable, well-behaved preferences. Violations were found, but they were small in magnitude. Therefore, the results failed to show strong evidence that consumption patterns for butter, margarine, and oils were inconsistent with stable preferences.

Entrepreneurs innovate their individual business organizations not only to deal with production and price risks, but also to cope with the risk of sanctions or penalties imposed by society's laws and regulations. More specifically, labor-intensive agricultural firms, faced with potentially large fines for violation of immigration and labor laws, increasingly modify the organization of their firms by shifting the management of routine seasonal labor jobs to independent farm labor contractors. The use of labor contracting is further intensified because of the effectiveness of labor contractors in the recruitment of illegal aliens.

A method was developed with time series models to test hypotheses about the relationship between market structure and spatial price dynamics. Long-run dynamic multipliers measuring the magnitude of lagged adjustment for spatial milled rice prices were calculated from the time series model and used as the dependent variable in a regression model that included a number of factors expected to influence price determination. Results show that price adjustments were slower as regional submarket concentration increased and were faster in the regions with a higher market share. Arkansas, the state with the largest market share, was consistently a price leader.

Three Georgia feeder cattle teleauction markets were analyzed from 1977 to 1988 to estimate the impacts of cattle characteristics and market conditions on prices. Cattle characteristic price impacts were similar to those in previous studies. The impact of feeder cattle futures price on teleauction price was positive but varied across markets. Optimal lot size ranged from 143 to 276 head. In one market, 14 lots were necessary to generate positive price impacts. Additional buyers were estimated to have a $.30/cwt per buyer impact on price.

A recent trend in rural development policy emphasizes small business development in place of industrial recruitment. To analyze some of the likely effects of expanding the proportion of small firms in local economies, an empirical wage rate model incorporating employer size was developed, and parameters were estimated using household data from rural Putnam County, Georgia. The estimates indicated that large employers offered higher wages than small employers and that the wage premium they offered was greater for blacks than for whites. These results support Thomas Till's argument that southern rural counties with relatively large black populations should not abandon efforts to attract large employers. Other factors associated with higher wages included level of education, previous labor force experience, and employment in certain occupations and industries.

Compared to their urban counterparts, the rural poor are more likely to be employed, more apt to be members of married-couple families, less likely to be children, less likely to be minority, and more likely to have assets but a negative income. This paper examines poverty rates and factors that affect mobility in and out of poverty among major categories of the rural poor. Particular attention is paid to farm workers and the rural farm population in the South. It endeavors to identify both structural conditions that perpetuate rural poverty and government interventions that ameliorate human suffering and break the cycle of poverty reproduction.