Losing farmers and farmland

In this piece at TheHill.com, Kathryn Boor, the dean of agriculture at Cornell University, opines on the loss of farmers and farmland.  She writes:

“A report released this week by the U.S. Department of Agriculture (USDA) showed that total farmland in the United States has decreased by 1 million acres since 2014. That’s a loss of 18,000 farms. An August 2013 Science magazine editorial cited a 26 percent decline in federal spending on agriculture and food research over the previous decade. These numbers are dramatic and damning, not least of all because our nation’s economic health relies upon vital rural communities, but because we are losing our country’s most vital technological laboratories.”

While I agree with some of the sentiment in the piece, I'm not so sure the situation is as dire as Boor suggests.  I went to the USDA report she cited.  By pulling data out of the various tables, I was able to create the following table. 

The loss of farms she cited occurred entirely among the tiniest of farms, which sell less than $10,000 (note: this is gross sales not profit; $9,999 in sales could be achieved, for example, by selling 6 or 7 feeder calves).  Every other sales size category gained farmers.  So, what happened between 2014 and 2015?  A few really small (probably part time) farmers got out, and a few really small farmers became a bit bigger.  One might bemoan the loss of these very small farms, but I think we'd be hard pressed to call it "dramatic and damning" and it has very little to do with larger  problem of obtaining more funding agricultural research.  In fact, as the USDA document shows, there is a long-run trend toward smaller, larger farms, and part of this can be explained precisely because of technological developments in agriculture that have been labor-saving.

I'm also a bit confused about the stated concern related to lost farmland.  In fact, one of the main goals of that agricultural research requested by Boor is to increase agricultural productivity - to get more food using less land and other resources.  Getting more food  using less land is precisely what we want!  That "saved" land can be put to other uses, some of which are likely better for the environment.   

New Book Arrival

I was pleased to find this in the mail yesterday!

It officially comes out March 22.  According to Amazon, it is the #1 new release in the categories of biotechnology and agronomy.  I have no idea what that means, but I'll take it.  

John Copeland, Tyler Cowen, Rachel Laudan, and Dan Sumner were gracious enough to provide nice blurbs - thanks!   

Got a Good Idea for a Paper Session?

One of my duties as incoming president of the Agricultural and Applied Economics Association (AAEA) is to help pull together sessions of invited papers for the ASSA meetings held in Chicago in January 2017.  As many readers may know, it can be comparatively difficult to get a paper on the ASSA program as it is THE big meeting of economist from around the world.  The AAEA has some dedicated slots at the ASSA meetings, and I aim to use the best of them.

If you've got a good (or even half-baked) idea for a paper session at the ASSA meetings, I hope you will consider submitting a proposal.  Details on proposal submission are here. Feel free to shoot me an email if you have specific questions that aren't covered in the call.

NYT Editorial on My Food Policy Study

Yesterday, the New York Times ran an editorial on the political fight over GMO labeling.  In the piece, the editorial board cited one of my studies (with Marco Costanigro) in the following passage:

“There is no harm in providing consumers more information about their food. A study published in the journal Food Policy in 2014 found that labels about genetic modification did not influence what people thought about those foods.”

I want to add a clarification and caveat to that statement.   What we found (in the context of an internet survey), is that the addition of GMO labels didn't make people more concerned about GMOs than they already were.  That is, the addition of a label didn't seem to send a signal that GMOs were more risky than consumers already thought they were.  

However, we did find that consumers would attempt to avoid foods with a GMO label.  Consumers' choices in our studied implied they were willing to pay as much $1.98/lb to avoid an apple that has a mandatory "genetically engineered" label relative to an unlabeled apple.  As I discussed just yesterday, it is precisely this issue that is the big potential driver of the costs of mandatory labeling.  That is, if some segment of consumers tries to avoid GMO labels, retailers and food manufacturers may respond by trying to source more costly non-GMO crops.    

Finally, I'll note that despite the above quote, that different types of GE labels in fact had very big effects on what people "thought" or were willing to pay for GE foods.  In particular, we compared how willingness-to-pay (WTP) for an unlabeled apple varied when there were apples with mandatory labels (i.e., "genetically engineered) vs.  voluntary labels (i.e., "not genetically engineered").

We found that the WTP premium for the unlabeled apple relative to the apple labeled "genetically engineered" was the aforementioned $1.98/lb.  However, the WTP premium for apples labeled "not genetically engineered" relative to the unlabeled apple was only $0.81/lb.  Thus, the implied willingness-to-pay to avoid GE was [(1.98–0.81)/0.81] ∗ 100 = 144% higher in the mandatory labeling treatment as compared to the voluntary labeling treatment.  In the paper, we write:

“The differences in responses to mandatory vs. voluntary labels may result from the asymmetric negativity effect, which may in turn result from differences in what these two labels signal about the relative desirability of the unlabeled product. The differences in the “contains” vs. “does not contain” may also send different signals and change beliefs about the likelihood that the unlabeled product is GE or non-GE.”

One more point that I just can't led slide.  The editorial also mentions the following:

“Various polls have found that about 90 percent of Americans favor mandatory labels for genetically modified foods.”

Yes, but about the same percentage of consumers say they want mandatory labels on foods with DNA.  And, when you directly ask people, the vast majority say they don't want the issue decided by state ballot initiatives but rather by the FDA.  And, we've had real-life ballot initiatives in five states now, and all have failed to garner more than 50% support.  Whatever positive reasons may exist for mandatory labeling, the cited "90% of people want it" reason is the most dubious and misleading.

An often forgotten benefit of biotech crops

Discussions on the environmental benefits (or costs) of genetically engineered crops tend to focus on relative volumes and toxicities of herbicides applied, effects of Bt, and possibilities of cross pollinating native plants.  In so doing, what is often missed is an important environmental benefit of herbicide resistant crops.  In particular, if a farmer can control weeds by spraying the entire field with a herbicide like glyphosate, that means they don't have to use other methods of weed control (like plowing) that may lead to soil runoff.  

A new paper just released by the American Journal of Agricultural Economics by Edward Perry, GianCarlo Moschini, and David Hennessy tackles this issue. Here's a portion of the abstract:

“We find that glyphosate tolerant soybeans and conservation tillage are complementary practices. In addition, our estimation shows that farm operation scale promotes the adoption of both conservation tillage and glyphosate tolerant seed, and that all of higher fuel prices, more droughty conditions, and soil erodibility increase use of conservation tillage. We apply our results to simulate annual adoption rates for both conservation tillage and no-tillage in a scenario without glyphosate tolerant soybeans available as a choice. We find that the adoption of conservation tillage and no-tillage have been about 10% and 20% higher, respectively, due to the advent of glyphosate tolerant soybeans.”

It should be noted that herbicide tolerance isn't unique to biotechnology.  There are several "non GM" crops on the market that are tolerant to certain herbicides but are not genetically engineered, at least as the term normally used.