Teaching/Communication/Extension/Profession,

Renne, Roland R.

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Research Papers in Economics

The  Role  of  Agricultural Economists:
The  Next  100  Years  or  Less
Roland R.  Renne
The  topic  assigned  me  gives  me  considerable
lee-way  in  discussing  the  role  of  agriucltural
economists  in  the  years  ahead-that  is,  "one
hundred  years  or  less,"  unless  the  emphasis  is
primarily  on  the  "or  less."  Of course,  the  title is
appropriate  in  our  bicentennial  year  when we  are
prone  to  review  events of the  past  two  centuries.
However,  the  changes  in  the  last  100  years  were
certainly not foreseeable even by the most visionary
futurist.  I am  sure  any  predictions  I might  make
today  of  the  role  of  agricultural  economists  a
century  from  now  will  not  and  should  not  be
taken too seriously.
Agricultural Trends
The  changes  in  U.S.  agriculture just in  the last
half  century  (1925-1975),  I  am  sure,  were  far
beyond  the  thoughts  and  contemplations  of
agricultural  economists  in  the  twenties.  As  a
graduate  student  in  that  decade,  I  detected  no
long-time  appraisal  or  predictions  by  our agricul-
tural  economics  leaders  that  would  have  included
the  maior  issues,  changes,  problems, and programs
in  agricultural  policy that  developed  and  are  now
major  areas  or  fields  of  interest  of  agricultural
economists.  And,  the  rapidity  and scope  of these
factors  indicate  that  we  can  expect  many  more
changes in the years ahead.
One  of  the  most  important  developments  of
our last half century is the  broadening of the scope
of  agricultural  matters  in  which  agricultural
economists  have  become  involved.  Agricultural
economics  becomes  more  like  economics  in  the
sense  that interest will  be more  along  the  lines  of
applied  economics  because  of  the  increasing
Roland  R. Renne  is President  Emeritus  and  an  adjunct
professor,  Department  of  Agricultural  Economics  and
Economics,  Montana State  University,  Bozeman.
interaction of agriculture  with other enterprises.  In
other  words,  more  aspects  or  branches  of  eco-
nomics become involved.
Under  these  circumstances  we  cannot  expect
agriculture  to  be  a  field  for  immense  growth  in
agricultural  economics  because  the  agricultural
phases  become  less  significant  than the  economic
aspects.  For example,  the  number of farms  in  the
U.S.  has  shrunk  from  more  than  six  million
(6,350,000)  in  1940  to  less  than  three  million
(2,818,000)  in  1975.  At  the  same  time,  the
average  farm  size  increased  from  167 acres to over
385  acres.  During  the  same  period  the  number in
Montana  shrunk from  44,500 to less  than 25,000
farms,  and  the  average  size increased  from  1,111
acres  to over 2510 acres (or more  than doubled).
Another  example  is  the  marked  decrease  of
manpower  in  agriculture  and  a  tremendous  in-
crease  in  machinery  on U.S.  farms.  In  Montana  a
new  tractor  is now  made at Havre,  in the northern
part  of  the  state,  called  "Big  Bud."  Some of the
parts are  manufactured  in Montana and the tractors
are  assembled  and distributed  at Havre.  In prepara-
tion  of  the  soil  for  seeding  it  makes  a  swath  of
fifty-four  feet  and  sells  for  $93,000.  This  multi-
plies  the  acreage  one farmer can  operate by several
fold compared with earlier tractors, and many times
more  than  the  farmer could manage with horses as
his  main  draft  power.  Of  course,  the  labor  em-
ployed by the  farmer is correspondingly  reduced.
Thus,  engineering  and  manufacturing  tech-
nology  become  very  significant  and  important
factors  in the  farmers'  operations.  The  economics
involved  are  more  similar to economics involved in
factories  and industries than to the individual  farm
family  working  on  the  farm  along  with  hired
workers.  The  human  factor  has  been  greatly
reduced  and  the  intensity  of interaction  between
agriculture  and  other  non-agricultural  enterprises
greatly increased.
93Western J. Agr. Econ.
Changes in Agriculture
Evidence  of  these  changes  includes  markedly
increased  personal  income  of  farmers  compared
with  non-farmers and increased  proprietor's equity
per  farm.  In  1940,  per capita personal  income  of
farmers  was  37 per  cent  of per capita non-farmers
personal  income.  Today  it is  around  92 per cent.
Proprietor's  equity  in  1940  was  $6,900 per farm
compared  with  over  $151,000  per  farm  today.
However,  agricultural  income  as  a  percentage  of
total  national  income  has  declined  from  13.5
per  cent  in  1940  to  approximately  9  per  cent
today.  It  is  interesting  to  note that  in  1925  agri-
cultural  income  was  18  per  cent  of  national
income.  The  overall  relative  importance  of  agri-
culture  in the U.S.  economy  today is thus marked-
ly  less,  based  on  these  statistics,  than  in  earlier
years.
These  facts point up  the changing  aspects of the
agricultural  economics  profession  and the need  for
thorough  preparation  in  general  and  applied eco-
nomics  as  well  as  the  technical  aspects of agricul-
ture.  The  role  of the  agricultural  economist  is  the
application  of economic  principles  to the solution
of  problems  involving  the  management  of  pro-
ducing  and marketing  the  products  of the  agricul-
tural enterprise.
Economic Growth
There  are  many  problems  today  that  provide
important  opportunities  for  agricultural  econ-
omists  to  play  effective  roles  in  their  solution.
One  is  the  rate  of U.S.  economic  growth.  There
are  many  people who believe  our rate of economic
growth  needs  to be  slowed.  Growth  lies in apply-
ing  new knowledge  effectively  and in a larger flow
of inputs.  Innovations  in  products,  processes,  and
institutional  arrangements  have  advanced  rapidly
to  rates  as  high  as  any  in the  last  two years.  The
result is more  output, or more  voluntary leisure,  or
more unemployment.
Output  growth  has  been  encouraged  because
its  full  costs  have  not  been  realized  or  they  have
been  ignored.  By  leaving out costs  of the  damages
to  our  environment  producers  have  been  able  to
offer  goods  and  services  at  understated  prices.
Thus,  the  public  is  not  aware  of  their  full  costs.
Land  and  water  resource  developments  such  as
dams  for  irrigation,  power,  flood  control,  and
recreation  use,  and drainage  operations to improve
land productivity  often ultimately cost much more
than  originally  estimated  and  financed.  This  is an
area  in  which  agricultural  economists,  especially
in  the  western  states,  should  be  interested  and
effective.  It  is  becoming  more  and  more  obvious
with the rapidly  rising world population-now  over
four  billion-that  economic  growth  from  now on
will  have  to  be  more  prudent  than ever  before if
mankind  is  to  have  a  reasonably  satisfactory
living situation, or possibly to survive.
Recently  (June  28,  1976),  the  leaders  of  the
world's  seven  top  non-communist  industrial
powers,  in  a conference  at  San  Juan, Puerto Rico,
pledged  to  follow  a  go-slow  approach  in  their
economic  policies  and  study  plans  to  help  one
another  in  times  of  financial  difficulties.  After  a
two-day  economic  summit  conference,  the  seven
leaders  representing  Britian,  France,  West
Germany,  Japan,  Italy,  Canada,  and  the  United
States  said  "restoration  of  balanced  growth  is
within  our  grasp.  We  do  not  intend  to  lose  this
opportunity."  They  believe  this policy  will benefit
not  only their peoples but  the  international  econ-
omy  as  a whole.  This joint statement gave  the U.S.
what  it  most  wanted-a  pledge  to pursue  orderly
economic  growth with policies that do not threaten
a renewed  bout of serious inflation.
The  U.S.  has  experienced  great  material  pros-
perity  over  the  years  of  its  existence,  but  this
has  not  brought  social  contentment.  Was  the
growth  too  rapid?  Or,  was  the  primary  emphasis
wrong?  I  remember  writing  an  article  for  the
New  Republic  in  the  early  thirties  entitled  "The
Badness  of  Bigness,"  Recently  the  book  "Small
is  Beautiful"  has  had  a wide  reading.  Economist
Robert  Heilbroner  recently  said,  "Growth  can't
go  on  forever.  Within  a  hundred years  from  now
we  will have  to bring  growth  under very  stringent
control-perhaps  down  to  zero  and  much  sooner
we  will  have  to  monitor  and  put  a  brake  on our
growth." 1
The Future
Will  the  trends  in  farm  personal  income,  farm
size,  proprietor  equity,  and  agricultural  income,
1  Robert Heilbroner,  in  U.S.  News  and  World  Report,
March  8,  1976,  p.  56.
94
June 1977Role of Agricultural  Economists
as  a  percentage  of  national  income,  discussed
earlier  in  this  paper,  continue  in  the  future?  Of
course,  we  cannot  say,  but  there  are  certain  ab-
solute  limits  that would make  the  continuance  of
some of the present trends impossible. For example,
in  the  case  of agricultural  income  as  a  percentage
of national  income,  if the  present  trend  were  to
continue,  agricultural  income  as  a  percentage  of
national  income  would  be  zero  by  middle  of the
year  2007.  This of course,  makes  no sense at all. I
am sure all of us here, while  we might agree certain
changes  might  be  made,  would not want  to elim-
inate agricultural income  completely.
Consequently,  we  must  conclude  that  while
there  may  be  significant  changes  in  agricultural
income  in  the  years  ahead,  agricultural  income
will  not  reach  zero,  or if it did,  our whole  econ-
omy  would  be completely  changed. As agricultural
economists,  such  a  stupendous  change  would
certainly  affect our  profession  adversely,  to  put it
mildly.  Nevertheless,  the  exaggerated  possibilities
should  lead  us  to  appraise  probable  trends  care-
fully for the next 25  to 50 years.
In  the  case  of  disposable  personal  income  per
capita  of  farmers  compared  with  disposable
personal  income  per  capita  of  non-farmers,  the
percentage  increased  from  37  per cent in  1940  to
92 per cent in 1975.  In  1973  it was 106.8  per cent
of non-farm  income.  With the significant  advances
that  have  been  made  and are  in progress,  and  the
increasing  world  population,  U.S.  disposable
personal  farm  income  per  capita  could  soon
exceed  the  100  per  cent  mark.  Some  writers
recently  have  contended  that  the  trend  will
continue,  the  poor will  be  squeezed,  the  rich  will
be  subsidized,  and  in the  end  only  the biggest and
best  integrated  operations  will  survive.2 Farmers
and  ranchers  can  no  longer  be  automatically
included  among the poor in our nation.
Agricultural  economists,  particularly  those  in
the  principally  agricultural  states,  should consider
the  side  effects  of  these  possible  developments
along  with  the  strictly  economic  aspects.  This  is a
logical  part  of  the  role  of agricultural economists
as  social  scientists.  This  brings  us  to the second of
four major trends, namely farm  size.
If the  trend in  farm  size  continues,  the average
size  of all  farms in  the U.S. will  be 657 acres in the
2 Peter  Barnes,  "The  Sharing  of Land  and  Resources
in  America,"  A  New  Republic  Pamphlet,  Harrison-Blaine
of New Jersey, Inc.,  1973,  p. 22.
year  2025,  compared  with the  present 385  acres,
or an increase in average  size of approximately  100
per  cent,  double  the  present  size.:Th  February,
1970  issue  of  National  Ge-ogr'hi  contains
stunning  photographs  of  an  egg  :faetory  near  Los
Angeles  where  two  million  caged leghorns eat 250
tons  of  feed and  lay  one  millioni eggs  each  day; a
cattle  metropolis  in  Colorado  where.  100,000
steers  are  fattened  on  formulas  prescribed  by  a
computer;  a  $23,000  tomato harvesting  machine,
developed  by  the  University  of  California  that
picks off specially  bred tomatoes  for farmworkers
to  sort  while  taped  music  purrs  in  the  back-
ground.3
Many  tremble  at  these  mammoth  farm  enter-
prises  and  prospects  of many  more  to come.  One
alternative  is  the  establishment  and  operation  of
farm  cooperatives.  In  this  case,  the  individual
farms  are  relatively  small  and  can  be  operated
without  the  necessity  of hiring much labor, if any.
The  farmers  are  members  and  owners  of  the
cooperative  and  if  adequate  operating  capital  is
secured,  especially  for the  first three to five years,
and  good  management  is  employed,  the  farmers
who  have  about  average-sized  operating  units can
operate  efficiently  and  profitably.  Agricultural
economists  can  play  a  very  important  role  in
advising  and  appraising  the  cooperative's  perfor-
mance  and  in  making  recommendations  that will
assist in assuring successful operations.
The  third trend-proprietor's  equity  per farm-
if current  trends  continue,  will  increase  from  the
present  $151,000  per  farm  to  $282,500  per farm
by  the  year  2025.  This  approximate  prospective
doubling  reflects  the  increased  mechanization,
increased  size  of  farms,  and  relatively  profitable
farm  product  prices of  the  past several years. This
increase  is  due  to  a large  extent to the  decreasing
number of farms  resulting in much  larger acreages
which  contributes  significantly  to  the  ten-fold
increase  in the proprietor's  total equity in the U.S.
from  $43.8  billion  in  1940  to  $426.6  billion  in
1975.
Land  reform  has  been  suggested  from  time  to
time,  as  a means  of stopping  the  exodus  from the
country  to  the  cities.  Frederick  Jackson  Turner,
70  years  ago,  talked  of  the  frontier  as  a  "safety
valve"  for urban  discontent.  Some  contend  urban
problems  are  virtually  insoluble  and  that  city
3Ibid.
95
RenneWestern J. Agr. Econ.
residents  seem  on  the  verge  of  a  mass  psychic
breakdown.
In recent years,  and  for years to come,  agricul-
tural  economists  are  going  to  be  concerned,  and
many  involved,  in  land  reform  programs.  They
should  play  an  important  role in  resource  protec-
tion  as  well  as  in  resource  development.  Again,
the  problem  is much  greater in urban than in rural
areas.  The shrinkage  in number of farms in the  U.S.
from  some  6.3  million  in  1940  to  2.8  million  in
1975  indicates  that  there  has  not  been  a  great
exodus from  the  city  to the countryside.  And,  un-
less  economic  opportunities,  as  well  as  scenic  and
soothing  qualities of the  countryside  are  available,
there  will  not be  an exodus  from  the  cities. Actu-
ally,  the  trend has been from  countryside  to urban
areas  because  of  more  employment  and  related
economic opportunities in the urban areas.  Despite
the  recent  occurrence  of  reverse  migration,  our
farm population is still decreasing not expanding.
The  fourth  and  last  trend,  agricultural  income
as  a  percentage  of national income,  will  probably
continue  to  decline,  but the  decline  is likely to be
smaller  in  the  next 25  to 50 years.  In  view  of the
fact  that  there has been a large  decline in the num-
ber of farms,  but  a  large  increase  in the individual
farm  proprietor's  equity,  American  agriculture
currently is in  a rather healthy state economically.
Conclusion
The rapidly  increasing world population reached
four  billion  on  March  31  of this  year.  There  are
no  signs  of a  major  decrease  in  birth  rates  or  in
longevity.  Under  these  circumstances  the  abilities
of  American  agriculture,  and  those  of  Canada,
to  produce  more  food,  especially  food  grains,
than are  needed  at home,  constitute  an important
factor  in  the  present  and  future  economic  health
of our agricultural  sector. In return, we can  secure
products  through  importing  what  we  need,  which
helps  to bolster  the  economies  of nations export-
ing products to us.
Overall,  American  agriculture  appears  to  be
in  a  relatively  good  state  of health.  Agricultural
economists  can  and  will  play  an  important  role
in  maintaining  a  healthy American  agriculture  and
a  strong  nation.  But,  the  economic  and  social
environment of both domestic American agriculture
and  world-wide  agriculture  in  the  next  25  to 50,
(or  100 years)  will  be  different  from  the  past.  As
social  scientists,  agricultural  economists  must
understand  the  current  environment,  predict  the
future  environments,  and  then  put  forward  solu-
tions  that  will  enhance  the  well-being  of  all
members  of  the  community  we  refer  to  as  the
Planet Earth.
96
June 1977

THE ROLE OF AGRICULTURAL ECONOMISTS: THE NEXT 100 YEARS OR LESS

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Research Papers in Economics