The Economics of American Agriculture: Evolution and Global Development: Evolution and Global Development

by Blank,Steven C.

• ISBN13: 9780765622297
• ISBN10: 0765622297
• eBook ISBN(s): 9781317457336
• Format: Nonspecific Binding
• Copyright: 2008-04-15
• Publisher: Routledge
• More Book Details

Summary

This book answers the questions: what is happening to American agriculture, and why? Steven C. Blank uses portfolio theory to analyze both macro- and microeconomic data that paints a clear picture of the trends in agriculture, and explains why these trends are consistent with market evolution and global economic development. He clarifies agriculture's specific role in economic development with a focus on the current and future globalizing commodity markets. The book features empirical research that demonstrates the link between farm-level investment decisions and regional and national economic trends. It shows how the dynamic environment of industrialization and globalization of agriculture is part of a continuing development that is driven by technological innovation. This all points to a future with a very different agricultural production sector and some extremely important policy choices that will face the entire country.

Table of Contents

List of Tables and Figures

Preface

American Agriculture and Globalization

Is American Agriculture Shrinking?

Introduction to the Big Questions

The Past Is Prologue

Is American Agriculture Shrinking?

Some Implications of a Shrinking Agricultural Sector

Is a Shrinking American Agriculture a "Bad" Thing?

The Past is Prologue, Again

American Agriculture's Life Cycle

The Life Cycle Model and Industry Analysis

A Formal Model of Agriculture's Life Cycle

Methods for Sorting Through the Questions

Empirical Results for American Agriculture

Concluding Comments and Opening Arguments

Profit Patterns Across American Agriculture

Propositions to be Evaluated

Road Map for Discovery

Exploration Results

Implications of the Strong/Weak States' Results

What Do the Strong/Weak Performing States Have in Common?

The Final Talley

Agricultural Profits and Farm Household Wealth

The Farm Household Model

Method to the Madness

Empirical Results

Implications of the Results

The Economics of Agriculture and Global Development

The Economic Food Chain of Global Development

The Economic Food Chain

Can the United States Leave Agriculture Entirely?

Why Would a Country Want to Leave Agriculture?

What About Comparative Advantage?

Implications of It All

Conclusions and Propositions

Commodities and the Profit Squeeze

The Bottom Line

Dealing With the Squeeze

Local Decisions

Why Is American Agriculture Being Squeezed?

The Bottom Bottom Line

Technology as Catalyst and Treadmill

Technology Is the Catalyst

Harvest Mechanization Helps Agriculture Remain Competitive

Technology as Treadmill

Concluding Comments: Surfing on a Tsunami

Economic Development and the Irony of American Agriculture's Technical Progress

Economic Development Basics

Management: The Fourth Resource

The Irony of American Agriculture's Technical Progress

Global Agriculture's Effect on Market Evolution

Farmland Values and Uses as Indicators of National Wealth

Market Marginal Land

Farmland Values

Land Uses

Idle Farmland and Global Capacity

Global Capacity and Land Use as a National and Local Responsibility

International Mutual Dependence

Short Supplies Created International Trade

Conflict Between Local and Global Comparative Advantage

Mutual Dependence as a Revolving Door

Mutual Dependence Is the Game of Life

American Production Agriculture's Response

Producers as Investors and Portfolio Managers

Decision Rules in Agriculture

When All Assets Are in Agriculture

When Crop Portfolio Changes Are Needed

When Assets Must Leave Agriculture

Land-Use Patterns

Concluding Comments

Measuring Risk for Decision Making

Income Risk and Its Components

Methods of Reducing Income Risk

Portfolio Approach to Risk Reduction

Empirical Methods and Results

Summary

Portfolio Decision Making of Farmland Owners and Tenants

A Portfolio Model of Cropping Opportunities

Effects of Changes in Leasing Rates

The Returns to Risk in Practice

Summary and Conclusions

Is the Market Failing Producers Who Wish to Manage Risks?

Survey Results Regarding Risk Needs

Analysis of Risk Sources

Markets for Risk Management Tools: Failing, Missing or Incomplete?

Risk Tools in Commodity Markets

Risky Business

Appendix: Who Uses Price Risk Management Tools?

Hedging with Off-Farm Income

Some Perspective

A Portfolio Model of Off-Farm Income Effects

Effects of Off-Farm Income Levels

Empirical Analysis

Economies of Scale and Household Off-Farm Income

Summary and Policy Implications

Commodity Market Evolution

Product Quality and Market Evolution

Background

General Proposition

Economics of the Market Evolution Process

How Big Can Organic Markets Get?

How Big Should Organic Markets Get? (And What Are the Policy Implications?)

How Big Will Organic Markets Get?

Tying Up the Loose Ends

Regional Agriculture as a National Industry

Spatial Agriculture

Land-Use Evolution

Data and Methods

Spatial Econometric Modeling

Results of Data Structure Ques

Results of Agricultural Sector Performance

Economic Implications of the Spatial Autocorrelation

What Types of Counties Performed Best?

Evolution of the Agricultural Sector in the Context of the Gravity Model

Looking to the Future

American Agricultural Policy Questions

The Role of American Agribusiness

Market Evolution and the Relationship Between Agriculture and Agribusiness

Blending Agriculture and Agribusiness for Success

American Agribusiness's Role in Directing à

Is Agriculture a "Way of Life" or a Business?

A Look at the Record

Profit Is a Key

Answering the Big Question

The Never-Ending Debates

Wealth is the Real Key

The Business of an Agricultural "Way of Life"

What is a "Farm"?

Policy Questions and Implications

The Role of American Agricultural Policy

Which Farms Receive Government Payments?

Where Is Agricultural Policy Going?

Multifunctionality

American Agricultural Policy in a Global Market

Where It All Leads

Glossary of Variables and Mathematical Definitions

Index

About the Author

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