Ronald D. Knutson

Gains and Losses of Sugar Program Policy Options

High domestic sugar prices supported by U.S. sugar policy have induced a significant substitution of corn sweeteners for sugar. Recognizing the close relationship between sugar and corn sweeteners, this study applies a general equilibrium approach to evaluate the distributional effects of three different policy options (i.e., quota, tariff, and deficiency payment) on sugar related interest groups. The results show that the current quota policy, intended ostensibly to protect domestic sugar producers, have hurt foreign exporters. It will harm domestic sugar producers if the trend continues. Additionally, the quota program is the most expensive of the options considered.

SOUTHERN FARMERS' EXPOSURE TO INCOME RISK UNDER THE 1996 FARM BILL

This paper investigates the farm-level impacts of the 1996 farm bill on the South. Focus group perceptions of risk sources, observed acreage changes, and the farm-level impact of increased price risk are evaluated. Focus group respondents ranked price and yield as the two most important sources of risk, and diversification was ranked highly as a risk-management tool. Limited data suggest that acreage shifts among crops are occurring in the South, presumably aided by the 1996 farm bill. Higher probabilities of cash flow deficits are estimated for cotton and rice relative to feedgrain, wheat, and oilseed operations.

Extension's Decline?

The perception that extension funding has materially declined is not borne out in aggregate U.S. funding data. However, many states experienced substantial reductions in real terms in 1992 and 1993. The pattern of reductions appears to be most extensive in the East, South, and West and in states dependent on extractive industries, although major agricultural states are not immune. In a time of tighter budgets, one might question the extension strategy of continually broadening its clientele. Extension may be better served by concentrating in areas of comparative advantage where experiment station research results serve as crucial input to extension programs in agriculture, forestry, and consumer/family sciences. County support is argued to be crucial to survival of the system.

Restructuring Agricultural Economics Extension to Meet Changing Needs

The evidence is increasing that cooperative extension, if not the agriculture component of the land grant university system itself, may be unraveling. The director of the Office of Management and Budget has recommended that federal funding for extension be eliminated. Three fellows of the AAEA suggest that if the land grant system were reformulated today, there would be no extension component. A past president of the AAEA argues that the whole land grant university system has lost its sense of mission (Schuh). To many, these positions defy logic, ignore the contribution that extension has made to

Farm-Level Consequences of Canadian and U.S. Dairy Policies

apprehensive about the future. From a U.S. perspective, the 1996 farm bill mandated a process of dairy policy reform that could lead to essentially free market conditions, something not seen in the U.S. dairy industry since the 1920s. Canadian farmers await the implementation of provisions that would allow limited movement of quotas across provincial lines. Unknown are the impacts of the next round of trade negotiations conducted under the auspices of the new World Trade Organization (WTO). Dairy farmers and policy makers on both sides of the border need to know where they stand in terms of competitiveness to evaluate the impacts of policy change, whether they be intracountry or intercountry. Studies of the impacts of dairy policy reform have not been consistently illuminating in terms of impacts of major policy change on the competitive relationships between Canadian and U.S. dairy farmers. As a general principle, U.S. economists have found a 25%-30% cost advantage in favor of U.S. dairy farms (Baker et al., Nicholson and Knoblaugh). Canadian economists conclude that their farms would be cost com-

An Analysis of Possible U.S. Sugar Import Policy Revisions

The U.S. sugar import policy, while supporting domestic producers, has had indirect effects on other markets. This study extends previous analyses to look at effects of sugar policy changes from a total agricultural sector perspective. The effects of sugar policy reform are studied with and without changes in farm program provisions for other crops. The results show welfare losses due to the sugar program. It is also shown that reduction of farm programs without altering the sugar quota tilts the terms of trade toward sugar producers giving them a competitive advantage and it is implied that both sets of policies need to be revised simultaneously to avoid distortions between commodities.

Role of the Southern Agricultural Economics Association in Extension

In a recent discussion by three Fellows of else, is an aid to understanding and making the American Agricultural Economics Assocomplex economic decisions. ciation (AAEA), it was observed that if the Four types of change will likely preoccupy Land-Grant University System were to be creour profession over the next two decades: ated today, there would be no extension * internationalization, component. For those involved in the dis* technology, cussion, this was not a matter of controversy. * industrialization, and It was fact. That is a sobering thought for * resource mix. one who has committed a major share of his None of these forces is new to agriculture. professional career to extension education. Yet, each presents unique, new challenges Questioning of the relevance of extension for extension educators and for researchers in todays agriculture throws a whole new attempting to serve their needs. perspective on the issue of the role of the Southern Agricultural Economics Association Internationalization (SAEA) in extension. Therefore, one is comNearly a decade ago, Schuh (1976) chalpelled to analyze a set of broader issues relenged the profession to come to grips with lating to the relevance and role of extension the realities of an open world economy. At in todays agriculture before drawing any the time, driven by a weak dollar and a tight conclusions regarding the role of the SAEA supply-demand balance, exports were growin extension. These include: ing on a path from

US programs affecting food and agricultural marketing

7 billion to a peak of • a review of the major forces affecting over

Potential Impacts of Transatlantic Trade and Investment Partnership (T-TIP) on the Fresh Vegetable and Beef Trade

40 billion in 1981. The profession was agriculture out of which research and warned that agriculture had entered a new extension problems will evolve, era with macroeconomics and international * an analysis of the resulting challenges policies having a profound impact on agrito the Land-Grant System (hereinafter culture and its institutions. A specific chalreferred to as the System) and particulenge was made to extension regarding the larly to extension, and need to educate farmers, farm leaders, and * a refinement of those challenges for the policymakers on the factors affecting trade. agricultural economics profession. The predicted profound impact, indeed, Subsequently, implications will be drawn for has become a reality. Farmers, agribusinessthe role of the SAEA in extension education. men, economists, and policymakers alike have This approach is taken at the risk of not been forced to direct their thinking to the treating any of these topics in sufficient depth forces of a weak and subsequently a strong to be meaningful. The paper might, therefore dollar, from high inflation to low inflation, be viewed more as providing a basis for furand from a low to a high real rate of interest. ther discussion than for provision of definiThe importance of understanding these ecotive answers. nomic forces was emphasized to every agriculturalist-teacher, researcher, and extension worker.

The Era of the Functional Consumer

Part I. The Food and Agricultural Marketing System Overview.- 1. Evolution of Agricultural and Food Markets, Policies and Programs-Walter J. Armbruster, President Emeritus, Farm Foundation and Ronald D. Knutson, Regents Professor Emeritus, Texas A&M University.- 2. Expectations and Realities of the Food System-Jean Kinsey, Professor, University of Minnesota.- 3. History of Governments Role in the Food and Agricultural Marketing System-Richard G. Heifner, UDSA Economic Research Service, Retired. Part II. Market Structure, the Supply Chain and Marketing Orders.- 4. Market Structure and Competition Policy--Walter J. Armbruster, President Emeritus, Farm Foundation.- 5. Managing the Supply Chain through Contracts and Cooperatives-Ronald D. Knutson, Regents Professor Emeritus, Texas A&M University Robert Cropp, Professor Emeritus, University of Wisconsin.- 6. Federal and State Marketing Orders-Mechel Paggi, Director, Center for Agricultural Business, California State University Fresno and Charles F. Nicholson, Professor, California Polytechnic State University, San Luis Obispo.- 7. U.S. Generic Advertising and Promotion Programs-John M. Crespi, Professor and Director of Graduate Studies, Kansas State University: and Richard D. Sexton, Professor, University of California Davis.- 8. U.S. Export Market Development Programs-Shida Henneberry, Regents Professor, Oklahoma State University. Part III. Food Quality Standards, Food Safety, Border Inspection and Invasive Pests.- 9. Challenges in Choosing the Mix of Public and Private Standards for Food Quality Assurance-Julie Caswell, Professor and Department Head, University of Massachusetts Amherst.- 10. Food Safety and Traceability-Diogo M. Souza-Monteiro, Lecturer, University of Kent, UK and Neal Hooker, Professor, The Ohio State University.- 11. Quality Assurance for Imports and Trade-William Nganje, Associate Professor, Arizona State University.- 12. Non-native Pest Prevention and Control: The Role of Government Interventions and their Impact on Efficiency-Dannele Peck, Assistant Professor, University of Wyoming. Part IV. Market and Consumer Information, Risk Management.- 13. Consumer Information and Labeling-Jayson Lusk, Professor and Willard Sparks Endowed Chair, Oklahoma State University.- 14. The Policy of Risk Management-Matthew Roberts, Associate Professor, The Ohio State University. Part V. Societal Issues.- 15. Local Food, Organics, and Sustainability-Dawn D. Thilmany McFadden, Professor, Colorado State University.- 16. Agricultural Biotechnology Issues-Michael Phillips, PhD, Technology Policy Consultant.- 17. Humane Treatment of Farm Animals-David Blandford, Professor, Pennsylvania State University. Part. VI. Challenges and Opportunities.- 18. Program Challenges and Future Opportunities-Walter J. Armbruster, President Emeritus, Farm Foundation and Ronald D. Knutson, Regents Professor Emeritus, Texas A&M University.- Glossary of Agencies, Programs and Organizations.- Index.