Economic Adjustment to Sustainable Agriculture: Discussion

I will discuss four major points raised in the Daberkow and Reichelderfer (DR) paper and give two short comments on that of Madden. The main points raised by DR are (a) lowinput agriculture (LIA) can be directly equated with saving fertilizer and pesticides, (b) historical trends in national agrichemical use simply reflect changes in relative input and product prices, (c) the major justification for policy changes is externalities, and (d) changes in commodity programs would have the most dramatic short-term influence on the feasibility of LIA systems. Low-input agriculture is frequently referred to as sustainable agriculture, which in terms of farm families may be equated with survival. Survival depends upon long-run profitability of the farm enterprises in combination with off-farm work activities. In this household production framework all input costs matter, especially labor. One important function agricultural economists can perform when working with biological LIA teams is to evaluate the use and opportunity cost of all inputs. Many of the LIA technologies require precise timing and complex input and output choices. Such managerial skills are not costless to develop and maintain. The focus on reducing all costs is consistent with the efforts of U.S. farmers to regain export market shares lost during the early 1980s. However, attention can frequently be directed toward selected inputs when prices rise such as interest rates in the early 1980s, tillage costs in the late 1970s, fuel cost in the 1970s, and pest control or IPM activities in the early 1970s. In examining trends DR conclude that "all of the economic stimuli over the past forty years would logically induce profit maximizers to increase agrichemical use." However, these long-run trends may have changed in the past few years, and national level data conceal important regional differences in input use. The economic indicators statistics of the Economic Research Service of the U.S. Department of Agriculture (ERS, USDA) show the following regional trends over the past ten years. U.S. cropland was down slightly (6%), but cropland use is down more (16%-21%) in the southern regions (Delta, Southeast, and the Southern Plains). U.S. nitrogen use is about stable, but use in the Southeast and Appalachian regions is down. Nitrogen use per cropland acre rose sharply in the Delta and Lake States. Phosphate use, which is involved in surface water algae blooms, is down sharply in all regions, especially in the Southeast (-68%). Total U.S. agrichemical use is up according to this data series; however, use in the Southeast and Appalachia is down. Per acre use rates of pesticides climbed sharply in the late 1970s, but in the past three to five years total use is leveling off as crop acreage declines (DR, table 1). Expenditures for corn and soybean herbicides and insecticides are off 10% to 15% as both prices per unit and crop acreages decline. Almost 100% of the corn, soybean, and cotton acreage is now treated with herbicides, and new products are effective at lower dosages. Clearly there are production function shifts and price changes that can reverse past trends in agrichemical use relative to labor and land. These are some of the most interesting changes which DR do not explore. The third issue raised by DR is agricultural externalities as the prominent justification for policy changes. The Nielson and Lee study deals only with "potential" nitrogen and leaching pesticides reaching groundwater. Although more instances of herbicide and nitrate residues are being found, this is the result of much more monitoring in the past few years. Detection of groundwater residues at one location is a poor indicator of human health risk. In the case of pesticide residues in food, there are very large exaggerations of human exposure by making worst-case assumptions at Gerald A. Carlson is a professor, Department of Economics and Business, North Carolina State University.