SOME GUIDING PRINCIPLES FOR EMPIRICAL PRODUCTION RESEARCH IN AGRICULTURE

Constraints on production economic research are examined in three dimensions: problem focus, methodology, and data availability. Data availability has played a large role in the choice of problem focus and explains some misdirected focus. A proposal is made to address the data availability constraint. The greatest self-imposed constraints are methodological. Production economics has focused on flexible representations of technology at the expense of specificity in preferences. Yet some of the major problems faced by decision makers relate to long-term problems, e.g., the commodity boom and ensuring debt crisis of the 1970s and 1980s where standard short-term profit maximization models are unlikely to capture the essence of decision maker concerns.Production Economics,

A model of U.S. corn, sorghum, and soybean markets and the role of government programs (USAGMKTS)

This estimated model of corn, sorghum, and soybeans markets (USAGMKTS) serves as the U.S. agricultural sector in a study of the effects of U.S. agriculture and macroeconomic policy on Mexico's agricultural sector. This model of U.S. corn, sorghum, and soybeans markets also includes U.S. markets for beef, hogs, and poultry - because of their importance and endogeneity with respect to U.S. feed grain policies, which are major determinants of corn and sorghum prices. The model is part of a set of interlinked sectoral and macroeconomic models that link Mexico and the United States. This paper reports the results of the simulations of various alternative U.S. agricultural policy scenarios, to estimate the effects of various feed grain policy instruments. Plausible U.S. agricultural policy adjustments can alter border prices facing world trading partners by 10 to 15 percent. The extent of these adjustments depends heavily on the current state of the U.S. agricultural economy.Markets and Market Access,Access to Markets,Livestock&Animal Husbandry,Crops&Crop Management Systems,Economic Theory&Research

INCOME DISTRIBUTIONAL IMPLICATIONS OF WATER POLICY DECISIONS

Intrasectoral issues have received relatively little attention in analysis of the distributional consequences of natural resource policy decisions. This paper presents a framework for such analysis and examines how intrasectoral issues can change intertemporally, focusing on water policy in agriculture. The results show that income distribution among farmers depends on the stochastic structure of production and marketing, the size distribution of farms, credit market imperfections, and risk aversion in farmer decisions. It is shown that the introduction of water conservation policies may lead to more equitable income distribution among farmers.Resource /Energy Economics and Policy,

Setting Incentives for Scientists Who Engage in Research and Other Activities: An Application of Principal-Agent Theory

 The objective of this paper is to develop an optimal incentive system for multitaskingscientists in universities or professors under repeat contracting. With the aid of a principalagentmodel under repeat contracting, we show that (i) when a second task is assigned to aprofessor and the two tasks are related, the size of the optimal incentive rate for the first task isreduced in some situations but not others relative to that of a single task, (ii) with an increasein the noise in the technical relationship of the second task or imprecision in outputmeasurement, the optimal incentive rate for that task is reduced and for the first task may bereduced or increased , (iii) with greater efficiency of the professor in producing the secondoutput, as reflected in ability relative to cost of effort, the optimal incentive rate for the firsttask generally decreases, (iv) if the output of the professor’s two tasks are negativelycorrelated then the optimal incentive rate on the first task declines as the size of thiscorrelation increases. The size of the guarantee is always reduced as the professor’s ability fora task increases, but is increased as his cost of effort, noisiness of the technology ormeasurement of output, or correlation between the two outputs increases. It is also possiblethat, as a professor undertakes several difficult-to-measure tasks, the incentive rate will bereduced to the point that an optimal compensation system will involve only a guaranteedsalary, which is a very weak incentive for effort. Selective audits may be useful in thesesituations.incentives; Principal-agent model; Multitask; scientists; professors; respeat contracting; linear contracts

TRANSACTION COSTS, FADS, AND POLITICALLY MOTIVATED MISDIRECTION IN AGRICULTURAL RESEARCH

This paper examines efficiency implications of national and local policies for fund allocation and management of agricultural research, which produce pure and impure public goods. The possibility is examined that competitive grants programs increase rent seeking activities by scientists relative to specific block grants or formula allocations and thereby reduce both the real resources available to produce traditional research outputs and the productivity with which research resources are used. Management of local research units, including advantages of incentive compatible contracts, is also considered. Additional conceptual and empirical work are needed before the issues are resolved.

IN DEFENSE OF FENCE TO FENCE: CAN THE BACKWARD BENDING SUPPLY CURVE EXIST?

Politicians dealing with the “"farm problem”" sometimes lament that output increases when prices go up and when prices go down. This article presents three possible theoretical explanations. In the first, farmers deplete soil (over-farm) when prices are low and imperfect capital markets prevent borrowing. In the second, farmers in financial stress (low prices) allocate more family labor to farming to meet debt-repayment constraints. In the third, wealth held in farmland tends to decline as prices decline. With decreasing absolute risk aversion, this increases risk aversion which, in extreme cases, causes negative supply response.Farm Management,

A SOLID WASTE PLAN FOR SOUTHEASTERN OKLAHOMA

Public Economics,

THE DISTRIBUTIONAL EFFECTS OF LAND CONTROLS IN AGRICULTURE

The paper introduces a framework for analyzing the impacts of land control programs on agricultural production under heterogenous land qualities, heterogenous production technologies and imperfect capital markets. It shows that the introduction of diversion programs tends to benefit land owners while harming operators. Moreover, it tends to increase the separation of land ownership and operation and increase concentration among operators. Diversion programs tend to raise land prices lass than proportional to the increases in rental rates. They encourage the adoption of yield increasing technologies, and may also encourage adoption of cost reducing technologies when credit is a binding constraint. Participation in voluntary government programs tends to be greater in regions with higher costs, less efficient marginal technology and less efficient marginal land.Land Economics/Use,

Agricultural Research: Benefits and Beneficiaries of Alternative Funding Mechanisms

This article analyzes alternative funding mechanisms for agricultural research and the benefits and beneficiaries of these approaches. Although other mechanisms exist, the discussion focuses on public formula and competitive grants programs, private-sector contracts and grants, and revenue from sale of intellectual property rights (IPRs) or new products embodying innovations. Over the past two decades, agricultural research has been criticized for the noncompetitive nature of research fund allocations. Considerable evidence exists that the system has performed well for society. We conclude that the private sector should be permitted to carry out research that it finds profitable to undertake with minimal competition from the public sector. The public research institutions should focus on general and pretechnology science programs that complement private research-and-development (R&D) activities and conduct applied research in areas in which innovations are socially beneficial but not privately profitable. The mechanism for channeling public funds to researchers (e.g., formula, competitive grants, or earmarks) can be expected to affect the types of benefits/impacts of agricultural research conducted and the efficiency of the research activity. Issues remain about the emphasis on process versus substance in the R&D funding debate. However, available evidence does not suggest the elimination of traditional funding mechanisms for public agricultural research